Posted on 01/23/2011 7:27:20 AM PST by jmaroneps37
When my financial advisor gave me a lot of caveats about the new Fair Tax surfacing in Congress, what I really heard him saying was, “You can’t trust government.”
The unintended consequences of the proposed Fair Tax are pause for alarm because “when they sell a Fair Tax, they don’t tell you about other taxes” that will conveniently remain on the books.
“In theory if the government says they’ll take away all other taxes, do they?”
The Fair Tax is a misnomer in Europe. The income tax was not abolished when they added a VAT value added tax or Fair Tax. The problem is, they are suffocating the average European citizen.
A United Kingdom VAT of 17.5% on top of a 50% income tax totals a 67.5% fed to the amorphous blob; in France: VAT 19.6%, income tax 40%, total 59.6%; Greece: income tax 40%, VAT 25%, total tax 65%; Spain: VAT 16%, income tax 45%. In Sweden a 25% VAT plus a 55% income tax results in an eye popping 80% tax individuals feed to the government wow! Denmark’s 83% is even worse!
”The United States is heading right down the same path,” my advisor tells me. Initially our current administration looks to propose a minuscule amount of only 1% or 2%, just like Europe started out imposing. Our 14 trillion dollar debt load is not sustainable, but he stresses VAT economies are deeply mired in gargantuan debt loads as well.
The American notion of hard work and perseverance enables anyone to get ahead here. “Do you think that can ever happen with tax rates between 60% to 80%?” he asks.
What would our lives be like with the European model of Obama’s redistribution of wealth? Consider never being able to buy a home....
(Excerpt) Read more at coachisright.com ...
After a hypothetical transition from the current system to the perfect implementation of a FT, prices will not immediately fall the theoretical amount.
Economic practice shows that economics is not a frictionless environment. Besides I don't trust the gov't to get it right, nor to not screw with the rate (which should be lower than a breakeven to the current drain of gov't).
I suspect that I've been carrying more than my fair load for decades. A FT makes it more difficult to go virtually Galt. It doesn't really address the fundamental financial flaw of a democracy.
FT dogma says prices fall.
Prices fall even after the 30% sales tax is added?
This a fundamental flaw of the proposed FT unless those folks are also disenfranchised. Everybody needs to have skin in the game so politicians have a VERY difficult time raising the FT rate or the prebate amount.
The spontaneous appearance of unicorns will see that that doesn't happen.
Sure, but not with the FairTax.
The FairTax legislation is only 134 pages long, so voters will know about any changes that would threaten and pose the possibility of having both an Income tax and a FairTax.
The FairTax abolishes the Income tax code, so if any legislator even hints at keeping any portion of the Income tax code intact, then the FairTax is DOA.
You shown repeatedly in the past that you have a severe learning disability that is imbalanced with an ability to heckle, distract and subvert a thread.
This response is not for you but for those reading so they can see the disruption you cause and will cause in responding to this post.
The FairTax gets the federal government back out of a wage earner’s paycheck and make one pay at the cash register.
A 2x4 at Home Depot presently priced at $2 will cost $1.54 under the FairTax, and when the 2x4 is carried to the cash register the 46 cents will be put right back on.
The only volatility that the FairTax will create in pricing will be in the first year of transition as the cost of the 2x4 will sit on the shelf at 2$.
The FairTax legislation provides for inventory that transitions, so the 2x4 at 2$ on the shelf will not be taxed under the FairTax, but as the supply chains adjust and the inventory is stocked with no federal tax burden, then the FairTax is applied.
Heckle away.
That's awesome. Prices remain unchanged. Government revenues remain unchanged. I save money because no taxes are with held from my pay check AND I get a prebate every month.
Perpetual motion!!!
Yes prices fall to their pretaxed cost, and the 30% exclusive tax or 23% inclusive is applied to bring price parity.
As in the example you were just shown, a 2x4 at Home Depot sits on the shelf at a price of $2. Under the FairTax a 2x4 will cost $1.54 but 46 cents will be put right back on at the cash register.
46 cents is 23% of $2. That’s the inclusive rate.
46 cents is 29.9% of $1.54. That’s the exclusive rate.
Toddler is trying to create confusion with a simple concept to wit:
Add 1 to 3 and you have increased the 3 to 4 for a gain of 33%. (Exclusive denominator is 3)
Take 1 away from 4 and you have decreased the 4 to 3 for a reduction of 25%. (Inclusive denominator is 4).
Toddlertard likes to create fear with the 30% exclusive snipe. The FairTax legislation requires both inclusive and exclusive rate be printed on a receipt. The FairTax National Retail Sales Tax NRST rate is quoted in inclusive terms because the income tax is quoted in inclusive terms, so a comparison is easier.
Expected you would attempt to hijack the discussion to a hyperbole, because that is what you do.
It’s not prepetual motion. It’s a collection point.
Rather than collect at so many levels in the supply and production chains of bringing products and services to the consumer, the FairTax gets rid of all federal government collection except at the retail level.
The FairTax also has the advantage that American goods and services are not taxed when they are transacted overseas, That means there will be an immediate drop in the costs of overseas exports by more than 20% and this will lead to a bolus of economic growth.
“After a hypothetical transition from the current system to the perfect implementation of a FT, prices will not immediately fall the theoretical amount.”
Oh really? Says who? Have you a link to a study or have you done a study yourself?
So you are saying Home Depot will keep a $2 2x4 on the shelf at $2 even thogh it wprocured without federal tax burden and then they will add an NRST of 59 cents at the cash register for a total of $2.59.
Whereas Lowes Home Improvement or any number of competitors will place a 2x4 procured under no federal tax burden on their shelf at $1.54 and then add 46 cents at the cash register for a total purchase of $2.
You are saying that American corporations and businesses will collude to keep all the federal tax windfall. Massive collusion is your premise. That’s a weak and unfounded argument. It’s also illegal.
All you have to do is look at retail gasoline or diesel prices vs the cost of crude over time.
Yet another weak argument.
Everybody does have “skin in the game”. The Rebate is the same for billionaires as it is for grandma on social security.
But the rich are going to spend much more than grandma and they will pay more as a result. Thus, the FairTax is inherently progressive.
For people to take advantage of the FairTax they would have to be deliberately poor. That’s against human nature in general.
Irrelevant banter by an ivory tower theorist, gabbing about theory versus practice.
So far your arguments are unsubstantiated, unfounded, weak and irrelevant.
Why don’t you just come out and say you are somehow a captive of the Income tax industry?
You just made the point for FairTax analysts.
The price of gas/diesel fluctuates in lagged fashion according to the cost of crude.
That’s a really good example to show haw a market adjusts to a change in underlying costs.
And that’s exactly how the FairTax will be treated in general by businesses. When retail businesses realize a drop in supplier pricing because of the elimination of all and any federal income tax burden, they will adjust their own pricing downward and retain the same net profit. The consumer will not experience a price impact as the NRST is added at the cash register.
A lot of whining over nothing.
As the dollar regains strength, due to a much healthier climate than we have now, your current dollars would stretch farther.
The initial proposal for an NRST is revenue neutral. If government spending can be reigned in, this rate can be adjusted lower.
With every major change in our government, there will be people crying that their ox is getting gored. This in no way means those changes shouldn't be made if we want to continue to exist as a Country.
Uh, how will the FT reduce the price of crude oil? Stuff from Walmart and Harbor Freight?
...a vat tax leaves the IRS in place - duh
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