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To: RobFromGa
If you pay a person $100 wages, ...

THis isn't the situation with a gov't employee. You are putting forth a maid (for example). The maid who is paid $100 in wages will have a tax of 29.87. She is selling a service for which you are paying a wage.

There is no service being sold for a gov't employee. Gov't services are simply provided (like a 911 operator). There is no tax to pay on the sale of the non-existent service - hence the tax is 23% of $100, or $23.

This rule is to prevent gov't from choosing to simply hire more people instead of contracting to private companies. Without the rule, gov't could hire for much less than it can contract work out.

928 posted on 10/25/2006 3:08:40 PM PDT by Principled
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To: Principled
There is no service being sold for a gov't employee.

Nor does the fairtax bill say there has to be anything sold. The government is considered the consumer of the $100 service of the government employee and must remit 29.87%.

932 posted on 10/25/2006 3:21:44 PM PDT by Always Right
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To: Principled
There is no service being sold for a gov't employee.

Wrong, the President's salary for example is payment for a service. I think he makes $400,000 at present, I'm not going to look it up. Under the FairTax his salary becomes a taxable service and the amount of the tax is 29.87% of $400,000 which is $119,480. The gross payments (wages plus FairTax) would then total $519,480. Doing the math, $119,480 divided by $519,480 is 23%-- Voila, you are in compliance.

There is no difference between a cleaning lady (like Madeline ALbright) and any other government employee. You are seeing emanations from penumbras in making this stuff up.

Either point to the language in the bill that you think eliminates government employee wages from being taxed, or which singles them out for special tax calcuations, or give it up.

Note: The President receives many benefits too, like living in the White House and meals and cars, etc. This is all taxable under the fairTax at 29.87% as well. So are soldiers wages, and all the guns and ammo, and the roads, and levees, and the Robert Byrd Memorial Gym. Every dime taxed at 29.87%.

934 posted on 10/25/2006 3:25:17 PM PDT by RobFromGa (The GOP will retain the Senate and House in 2006- Let's Do Something With It!)
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To: Principled
There is no tax to pay on the sale of the non-existent service - hence the tax is 23% of $100, or $23.
Typical Principled logic. First you say there's no tax then you say the tax (that doesn't exist) is 23%...You are one confused individual.
950 posted on 10/25/2006 4:24:10 PM PDT by lewislynn (Fairtax = lies, hope, wishful thinking, conjecture and lack of logic.)
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To: Principled
This rule is to prevent gov't from choosing to simply hire more people instead of contracting to private companies. Without the rule, gov't could hire for much less than it can contract work out.

Excuse me - because government employees are paid with my tax dollars, why would I support a scheme that would cost me more for the same employees? That doesn't sound like an efficient use of my tax dollars.

954 posted on 10/25/2006 4:47:52 PM PDT by lucysmom
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To: Principled
This rule is to prevent gov't from choosing to simply hire more people instead of contracting to private companies. Without the rule, gov't could hire for much less than it can contract work out.
IOW for Parity.

So how does the government paying/remitting 23% tax on service wages (as you and pigdog suggest to be the case)VS private sector paying/remitting 30% tax on service wages solve that potential parity problem again?

The disparity of the rates is 30%. The private sector tax is 30% MORE than the 23% government tax rate you tout, yet you claim it to be for parity.

BTW, what "rule" are you talking about?

956 posted on 10/25/2006 5:39:48 PM PDT by lewislynn (Fairtax = lies, hope, wishful thinking, conjecture and lack of logic.)
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