Because we need the removal of the embedded taxes and compliance costs (estimated at 20%) at EVERY level of the supply chain to provide the stimulus and definitively short circuit the "cascade" effect
Nice words but one does not short circuit "cascade" effect.
Cascading arises from the requirement that capital that is taxed away must be replaced else the loss accumulates to the destruction of business profitibility.
Any system of serial transactions(i.e. turnover) must of necessity return the cummulative charges against capital costs. The recovery of this taxed capital is accomplished through anticipatory pricing to compensate for taxes the same as all other charges against capital thus tax is laid upon the recovery of tax which results in cascade of the tax.
Cascading is inescapable where tax is against the gross value of transaction.
The only alternative to cascading is where avoidence of the tax can be accomplished, which defeats the purpose of the tax, that of revenue collection.
In the case of the APT, the creation vertical mergers avoiding the necessity of taxible monetary transfer transactions. The unfortunate side effect of which are the institution of monopolies driving small businesses that do not have the resources for merger aquisitions and tax avoidence, out of the market.
Other methods of avoidence in high turnover activities such as trading is to remove ones transactions out of the jursidition of taxation, e.g going to a foreign exchanges, using non-bank alternative to moving money(e.g. multi-party checks, cash, barter, and other disintermediation activities.)
In the area banking and bonds the tax on high turnover is recovered in higher rates of interest on the borrower.For government this means lower net revenue available and as the pointed out by P.H. Albuquerque(2001) above, the actual increase in interest payments by government in servicing deficit and debt financing often exceeds any expected revenue gain predicated by the implementation of ubiquitous taxes.
However, being cognizant of this we specifically proposed from the beginning the requirement to totally REPLACE Federal taxes taxes in the same way the NRST does.
Mere total replacement of taxes is an insufficient condition, the legal incidence of the tax remains in the market & production sector where cascade arises out of the necessity to recover of capital losses incurred due to the tax extracted. That replacement is operative factor of cascade, that the APT tax does not remove. Unlike the the NRST which is explicitly incident (economically and legally) upon the consumer as opposed to the factors of production and marketing.
Where the APT tax must pass down to the consumer embedded into price cascading at each turnover in the financial and production chains, the NRST is expressly collected once and only once with no cascading possible as it occures only at one transaction, and not multiply in turnover situations the APT is expressly designed to tax.
. Therefore at worst case the companies all up and down the supply chain with a 19.5% cost savings.
Since the financial turnover transactions of the companies all up and down the supply chain are expressly taxed and the overhead burden of compliance with the tax system lay on those companies their is little saving to be had in that chain. The full weight of the tax falls upon the production/financial system, the burden of which is passed down the chain accumulating into the price of final consumer products paid in total by the consumer, i.e. individual at the end of the line. The entire tax bill (30%+ federal, state and local) passes on to the consumer in price as opposed to the nominal overt transaction tax the citizen can directly perceive.
Sorry but you attempts to hide the reality that only people pay taxes, not business, your pretence at 0.25% tax rate when the reality lay in the 30% embedded in price leaves one wondering just what your game here really is. It certainly is not truth in taxation in any way shape or form.
Therefore, may I reiterate, the APT as proposed for the USA has never been instituted anywhere and lesser models should not be used to criticize it because the difference is night and day.
All the more necessary to approach the APT will severy skeptiscm. As Australia's Prime Minister John Howard puts it in reviewing the reasons why Australia is repealing its Bank Accounts Debit taxes in 2005 and not going to a full implementation of an APT, "It would completely render comatose a workable financial system in a very rapid period of time. And in a global world in which we now live we'd basically be saying that we're opting out and going back to the jungle."
The words of experience, not wishful thinking or wrong headed sincerity.
And , no we don't have a HR number and neither did NRST 10 months into its public introduction.
Actually the Fair Tax Legislation did have simultaneous public introduction' with its introduction as legislation into Congress in 97. The bill was the result of the authoring process, its introduction into Congress was virtually coincident with its public debut.