[APT Project Director]

P> As I read through this site it is quite incredible. Too many qualitative old generalizations and not enough numbers. Folks we ARE dealing with a new idea that needs some new thinking.

The numbers do matter and must be used. For example (and I need to use alot of them) how can a final product price, the pieces of which are taxed as they are sold to the assembler, reach 130+%, that is patently ridiculous, if you do the math. Of course all those businesses have had their corporate income taxes removed as well as all their excise taxes and FICA share (so according to the magical thinking of NST their prices should all go down 20% - Right? that's the pillar of your deal). Now let's say a $100 product used parts from 5 subs at $20 a piece. Each purchase from the subs would be $20 at 0.25% or 5 cents so the tax in the final product is 25 cents then when the final product is sold another 25 cents is added. That brings the price to $100.50. Now how is that 30 +++%? I will refrain from the names you and your cohorts would append at this point.

Now let's talk about the APT tax base -- it is enormous at $856 Trillion (nearly a quadrillion). The pieces that are NOT NOW TAXED are huge and allow for everyone including business to have big reductions in their taxes. We are well aware there will be behavioral changes in the number of intracompany account transfers and, yes, day trading and short term speculation, so we play with "half our tax base tied behind our back just to make it fair". ALL THESE LOW RATES ARE ACTUALLY BASED ON ONLY HALF THE TAX BASE AVAILABLE.
APT brings alot more payers to the table and makes it better for all. Because of the number of people involved and the size of our economy these reductions in rates sound like fiction but THEY ARE NOT. You cannot discuss the proposal without understanding these core concepts.

Another myth that has been flying around this numberless discussion is that the consumer/individual pay all taxes. Granted that has been true but with rates this low and economic activity stimulated the taxes will "stay put" with their payers to a greater extent (I didn't say 100%). We need to us another example WITH NUMBERS to illustrate how passing along all taxes to the consumer will not make a whole comparative lot of difference. Take the family making $100K and spending $100K in which all the vendors pass their side of the APT tax to the consumer so the family has another $100k to be taxed, a total of $300K at 0.25% or $750. That's a tad shy of the near $30,000 owing the gov under our current system, or the $17,250 due under NST assuming the $75K spent was all taxable(incl the $5000 rebate). Let's further say this high roller traded 200k in stocks, borrowed 100k and bought a condo for $100k now he's racked up $600K in transactions and will owe a total of $1500. Still a little left over to further invest in those markets which the Free Republic Hall of Famer SAJ said would be dead. If there was not such an extreme advantage here with APT, believe me, I would be all for the NST -- which was the case before I discovered and researched the APT Tax Plan.

Lastly, let's talk about those dead security , futures and derivative markets. You accused me of static analysis. Well, don't you think with all that extra purchasing power, low interest rates (because lot's of money competing for the same bonds) and lack of gov't deficits or SS woes, and reduced taxes and compliance costs, the sales and earnings of companies would be booming ... and wouldn't that make for an especially good investment environment. I dare say the markets would be "hot" and all those speculators would be right there en masse (further reducing our taxes)not willing to let 0.25% stand in the way of that 20,50 or 100+% profit.
You know that's the case. if a few folks wanted to move offshore there would be problems with that too not the least of which are regulations and high taxes of lesser (yes, lesser) countries. We'll get that tiny tax on repatriation or heck let them go if they 're going to balk at 0.25%. I don't have absolute proof of this scenario BUT it is certainly logical.

It is true, if you tax something you tend to destroy it but it does depend heavily on the rate. APT will do EVERYTHING that NST does, including save all the same embedded taxes. But since the security markets were considered dead when a 0.25% tax was aimed at them by SAJ and fans what would you think about aiming a 23% tax at the consumer - the very heart of our economy.

Merry Christmas!

[ancient_geezer]

APT will do EVERYTHING that NST does

Sorry it fails to at least do one thing the NRST does accomplish,(infact it fails in other regards as well but this one is the biggy). It fails to inform the citizen & voter of the cost of government burdening incomes, there purchases, and their equity value.

The National Retail Sales Tax, isolates and informs the electorate of those burdens by explicitly displaying the tax revenue collected by government by it.

The APT fails to inform the electorate of the 98.6% of the revenue burdens that ultimately impact their lives. That freind is one whale of a hidden tax burden your system buries beneath the electorate's radar horizon.

No thanks, that is not the way to limit govenment growth nor encourage any level of accounability of government to the American people who bare the weight of those goverment imposed taxes.

[CSM]

"Now let's say a $100 product used parts from 5 subs at $20 a piece. Each purchase from the subs would be $20 at 0.25% or 5 cents so the tax in the final product is 25 cents then when the final product is sold another 25 cents is added. That brings the price to $100.50."

Except you fail to recognize the next 10, 15, 50 or 100 levels in the supply chain for this part. That would add thousands, if not tens of thousands of transactions to this one part.

"Now let's talk about the APT tax base -- it is enormous at $856 Trillion (nearly a quadrillion)."

Yet, you fail to actually tell us what this base is. You cited a few examples in a post to me, but the bottom line is that it will be passed to consumers. Businesses are not charitable organizations. Your APT proposal doesn't expand the base, it only spreads the expense over more actions. An example of expansion would be the Flat tax proposal of getting all adults to pay. That would double the tax base.

"ALL THESE LOW RATES ARE ACTUALLY BASED ON ONLY HALF THE TAX BASE AVAILABLE."

This is the second such statement that you have made that makes your philosophy clear. It is pretty easy to deduce that you hope to recover as much taxation as possible and that is why you prefer the "painless" or hidden method. Are you sure you wanted to have a discussion around this subject with conservatives?

I'm beginning to think you are testing the waters and getting conservative responses so you will be prepared for their response.......

[SAJ]

'Numberless' discussion, is it? Well, I guess 31 -- as in 31 points' movement required to produce a profit in 1 contract crude oil under this lunatic tax regime -- isn't a nice hard number, then.

Actually (this will brighten your day), I'm wrong here. The figure is too low, because I only computed the tax on the entry side of the transaction. ANOTHER $250-odd dollars will be charged as tax on exit, putting the total confiscation on this simple transaction at roughly $560-570, or 56-57 points, that the trader must make back BEFORE starting to make a profit.

If you or anyone believe that any trader will participate in such a market, you'd best start stocking up on the Thorazine; you need professional help desperately, laddiebuck. No even marginally rational person will trade in such a market when one can easily and quite legally open an account in, say, Switzerland or Bermuda or BVI, and trade Brent crude on IPE or SIMEX, and keep that $500-odd dollars right where it belongs -- in his pocket.

The same argument applies to every futures market, except that NOT every American mkt has a foreign analogue. The cattle rancher and the cattle feeder who want to hedge away their risk are just SOL, unless they pay about $13/head extra for their insurance. They flat won't do this. Don't believe me? Ask a cattle man -- I've some phone numbers for you if you'd care to. Tip: turn the volume down on your phone when you do ask.

In reality, what will happen in the cattle (and many other) mkts is that the futures contract will simply die, and the industry will revert to the cash-forward and to-arrive practices that existed prior to the CME inventing cattle futures in the late 1960s. In short, you taxaholics won't collect more than a pittance during the brief death spiral of these markets, and you will end up raising these mkts' participants costs by forcing them to use older, less efficient risk-management practices. Which excess cost, of course, will be marked up and passed on to the consumer. Brilliance in action, you slick article, you.

You impute a false argument to me, too -- don't do that. I said, in the original post, in so many words, that someone buying shares for the longer term probably wouldn't care much about a 0.6% tax -- but this specific transaction is a very small fraction of all financial transactions. Tunnel vision at its finest. Also, please note that I have never, here or anywhere else, agreed with any sort of NRST, whether at a 23% rate or any other. Do not tar me with that brush, mate; that's the reddest of herrings.

Now, as regards earnings, a widget-maker probably would fare reasonably well under your confiscatory tax regime, but only because his direct involvement with it would be next to nil. What of, say, banks? Unless you define 'financial transaction' VERY adroitly, they won't have ANY earnings to speak of. You don't really believe that banks prosper solely by simply borrowing at discount and marking up the money, do you? Rubbish. They're HUGE players in the various security and debt markets, and that will stop straightaway (most likely, they'll funnel their investments to correspondents or subsidiaries or 'strategic partners' abroad, and you tax freaks won't see a penny). And, you still haven't addressed what will unfailingly happen to government bond spreads, and the backdoor tax increase that your lunatic tax scheme will impose on every American because of the aberration you'll produce in this market. The very same thing will happen in the insurance markets too; John and Jane Homeowner will be hit with a not-very-tasty increase in premiums immediately, on every policy they own. (Can't figure out why, eh? Not surprising. I'll explain it to you if you ask.)

You chaps have hit on an absolutely unsurpassed method of reducing financial liquidity throughout the spectrum, shrinking -- that's right, shrinking -- GDP instantly, and transferring an unspeakably large portion of American wealth to Europe and, in future days, to Asia.

Naturally, I shouldn't be too astonished here; that's part of the goal of a majority of academics, now isn't it?