Posted on 10/19/2006 5:11:50 PM PDT by pigdog
As specified in Congressional bill H.R. 25/S. 25, the FairTax is a proposal to replace the federal personal income tax, corporate income tax, payroll (FICA) tax, capital gains, alternative minimum, self-employment, and estate and gifts taxes with a single-rate federal retail sales tax. The FairTax also provides a prebate to each household based on its demographic composition. The prebate is set to ensure that households pay no taxes net on spending up to the poverty level.
Bill Gale (2005) and the President’s Advisory Panel on Federal Tax Reform (2005) suggest that the effective (tax inclusive) tax rate needed to implement H.R. 25 is far higher than the proposed 23% rate. This study, which builds on Gale’s (2005) analysis, shows that a 23% rate is eminently feasible and suggests why Gale and the Tax Panel reached the opposite conclusion.
This paper begins by projecting the FairTax’s 2007 tax base net of its rebate. Next it calculates the tax rate needed to maintain the real levels of federal and state spending under the FairTax. It then determines if an effective rate of 23% would be sufficient to fund 2007 estimated spending or if not, the amount by which non-Social Security federal expenditures would need to be reduced. Finally, it shows that the FairTax imposes no additional real fiscal burdens on state and local government, notwithstanding the requirement that such governments pay the FairTax when they purchase goods and services.
(Excerpt) Read more at people.bu.edu ...
Fine. Still waiting.
The part of the bill that taxes government wages is not a taxable sale.Neither is the part of the bill that taxes interest. The Fairtax doesn't tax sales, by law, in it's own words, it taxes "gross payments", so what was your point again?
That makes it different than the "fairtax" on a cleaning lady - who sells a service.There is no Fairtax on the cleaning lady. The tax is paid by her employer hence the title from the bill "taxable employer" Neither the cleaning lady or the government employee is taxed. That's why their employers are defined in the bill (the one you've never read) as "taxable employers".
What would be required by law to remit on $100 of noneducational government wages?23% of the gross payment (i.e., including the tax). That would be $29.87 on $100 of noneducational government wages.
Just go read the previous threads, it is all there. The fact that you throw out any information that isn't paid for by the AFFT doesn't mean that these other analyses aren't valid.
I don't really expect you to ever see the error of your thinking. I'm just trying to see that more minds aren't captured by the FairTax cult tractor beam, which seems to remove people's critical thinking skills.
You know this. It's funny watching you contort words though!
There is no "fairtax" (the 23% ti/29.76% te) on the wages. Hence, the tax is 23% of the wage.No where in the bill does it state the tax is 23% of anything except the payment including the tax. You guys are making stuff up that isn't in the bill.
The tax on applicable government wages is considered a 'service' which are taxed as 23% of 'gross payments' which includes the tax. There is no other way in the bill to figure the fairtax, it always includes the tax.
If you pay a person $100 wages, and then you send in $23 tax, the "gross payment" would be $123 as defined by the FairTax bill. ("including Federal taxes imposed by this titel")
You would have remitted $23 out of the $123 total gross payment, which is only 18.7% of the gross payment, so you will be short of the 23% required by the law. In order to come into compliance, you will need remit another $6.87.
At this point, you would have given the employee $100, and paid $29.87 in tax, and the gross payments would now be $129.87. Since $29.87 tax out of the $129.87 gross payments is 23%, you would now be in compliance with the law.
That is assuming they didn't charge you any extra penalty, or throw you in jail for fraudulent tax evasion due to pretending such a stupid math error when the correct method is so clearly spelled out in the bill.
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DIRECT WORDS FROM THE BILL:
(a) IN GENERAL- There is hereby imposed a tax on the use or consumption in the United States of taxable property or services.
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SERVICE- For purposes of subparagraph (A), the term `service'--
`(i) shall include any service performed by an employee for which the employee is paid wages or a salary by a taxable employer
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WAGES AND SALARY- The terms `wage' and `salary' mean all compensation paid for employment service including cash compensation, employee benefits, disability insurance, or wage replacement insurance payments, unemployment compensation insurance, workers' compensation insurance, and the fair market value of any other consideration paid by an employer to an employee in consideration for employment services rendered.
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In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.
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GROSS PAYMENTS- The term `gross payments' means payments for taxable property or services, including Federal taxes imposed by this title.
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It is black and white. You and pigdog are wrong on this point as we have been telling you for months...
What is the tax you speak of? The 23% ti/29.87 te fairtax? Like the 23/29.87 due on sale of a new TV?
Who was the guy that denated boortz recently.... hmmmm... what does he say about it. Do you know?
deBated!
"That's a direct quote from Kotlikoff. "
What makes you believe that Kotlikoff wrote that part of the paper. Sounds like you're merely guessing since I see no signoff by authors at the bottom of each paragraph. Do you think Kotlikoff himself wrote the whole paper? Wonder why those other guys are named???
Or perhaps you have a hand-written, personally signed copy there at work to show you that???
I really don't know or care what some guy that debated Boortz thinks, the bill is perfectly clear.
No name calling. You've already been suspended for it once.
You Squirrels are dead wrong - the government gross wages (non-ed) are taxed at 23% - both fed and st/local - and that's included in the 23% revenue neutral rate.First, stop with the names. OK?
you cared what he said a LOT! Have you changed your opinion?!
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