Posted on 03/02/2004 10:23:45 PM PST by esarlls3
Congress Must Pass the Fair Tax Act
By U.S. Rep. Mac Collins
CNSNews.com Commentary
February 27, 2004
Past Congresses have moved in the wrong direction by making our tax laws more complex and expensive for business and individuals to comply with. To keep our economy growing, Congress needs to take action now.
My colleague, Georgia Republican Congressman John Linder, has sponsored the "Fair Tax Act" (H.R. 25), a national retail sales tax on new goods and services. It would replace all individual and corporate income taxes, payroll taxes as well as capital gains taxes, estate taxes and gift taxes.
The Fair Tax replaces the way we are currently taxed, which is based on our annual income, with a tax on goods and services. The Fair Tax, basically, is a voluntary "consumption" tax. The more you buy, the more you pay in taxes. The less you buy, the less you pay in taxes.
The federal government will continue to be fully funded, including Social Security and Medicare.
The Fair Tax will reduce the costs of goods and services by 20 to 30 percent. It will allow workers to keep 100 percent of their paycheck, pension and Social Security payments with the exception being state or local withholding
The Gross Domestic Product will increase by almost 10.5 percent in the first year after its enactment because real wages would increase and tax compliance costs for business would decrease by 90 percent.
The fair tax would also be good news for investors. Real investment will initially increase by 76 percent relative to investments that would be made under our present tax laws. While this increase will gradually decline, it remains 15 percent higher than under the existing tax structure.
American exports will increase by 26 percent initially and would remain more than 13 percent above present levels under the current tax system.
Studies of the Fair Tax have shown that many U.S. companies will choose expansion here in the United States versus abroad, and in turn the United States will become more attractive to many foreign owned companies looking for expansion possibilities.
President Bush, during his State of the Union address in January, said the economy is turning around because the American people are using their money far better than government would have. The Republican majority in Congress was right to return it to the American people and not keep it in Washington.
A fresh and a fairer approach to a Federal tax system is needed. Therefore, it is time for Congress to pass the Fair Tax (H.R. 25).
As a cosponsor of the Fair Tax Act, I have asked Chairman Thomas of the Ways and Means Committee to hold hearings on this vital legislation. I am hoping those hearings will get under way in the near future.
(Congressman Mac Collins is a Republican representing Georgia's 8th Congressional District. He serves on the House Ways and Means Committee and the House Select Committee on Intelligence.)
My point was that income taxes are paid by employees and no change in income-tax-law is going to change business costs.
Ohh! emplyees are now paying corporate income taxes now? They are paying the 7.65 employment excise now. Not by a long shot. Both those business taxes as well as all individual income and payroll taxes are repealed by the HR25. That is how a change in business costs takes place.
Finally, my compliance costs won't change
Lot more to compliance costs than merely filling out forms my friend:
American General Contractor's Association
http://www.agc.org/Legislative_Info/Members_Testify/testimony_04-10-00.aspKilling the IRS, By Daniel J. Pilla, Reason Magazine July 1995
Only assuming that the employees don't end up with it.
Accounting costs above that required to run the business.
No change, you still have to track wages, accounts payable, accounts receivable, benefits, etc.
Benefit programs to help employees avoid taxes.
No change unless you going to mandate eliminating employee benefits for some reason. Why would you do that?
Lost opportunity costs.
No change. Marginal cost is zero for a small business.
Higher interest rates.
Really? How is the NRST going to change interest rates? And why would any marginal reduction in business interest rates be passed on to customers?
And so on.
And so on. You keep setting them up and I'll keep knocking them down.
sounds great. Show me your research and we'll talk. Oh, you don't have any research? Too bad.
On the other hand, the NRST advocates have tons of research, not one line of which has been refuted, only disbeleved by amateur economists who look at thinks piecemeal rather than as a whole. If you want to ignore the research, that's your concern. I'm just here to talk present my case, and other than wanting to gain additional support, I don't care that some people continue to think that somehow the current draconian system is to their advantage. For every nay-sayer, there are several new supporters.
What is the burden of taxes for a corporation that isn't making a profit and therefore doesn't pay income tax or gets a tax credit?
They pay the employment excises, they still have all the accounting, reporting, litigation costs associated with proving they are not making a taxable profit, as well as similar for employee withholding accounting and reporting requirements ...
Just the fact you must meet federal requirement even to determine if any liability exist at all is still there, empoyee FICA is still there, employer's excise is still there ...
All that goes away under the HR25, so yes there are cost savings to even a company that has no profits.
Corporate income taxes are paid out of net profits not on gross proceeds. The effective tax rate on the gross averages about 4%. The NRST will increase that to 23% (from the customer's viewpoint).
So, from the viewpoint of the buyer, the total cost will go up. Perhaps as much as 20%. I think that buyer is going to be mad as hell and he won't give a d@mn whether 23% or 0% goes to the feds.
I'll make it up, just like you guys do. I will show you where I predicted the market going up at the bottom and down at the top. I'll show you all kinds of charts that show where I made my predictions.
For every nay-sayer, there are several new supporters.
You are touching yourself if you think this is going anywhere. Ten years from now you will be ten years older and still selling the same BS on a bulletin board to the same number of people.
If your cyrstal ball is wrong, I pay. No thanks.
Which is more likely (taking a page out of The Dilbert Principle): 1) companies will take this current cost and give it to the employees, or 2) employers use the savings to increase market share. The answer of course, is #2 -- especially since if any of their competitors do so, they must also to stay competitive.
Even so, it's really fungible. In the snowball's-chance-in-hell that the employees get it, then they have more money in their pockets and will be able to afford more for the same amount of time worked.
No change, you still have to track wages, accounts payable, accounts receivable, benefits, etc.
You detractors want to get your stories straight? You all say that passing the NRST will put accountants and tax attorneys out of work, and then you pretend that these services don't cost anything.
No change unless you going to mandate eliminating employee benefits for some reason. Why would you do that?
Nice try to twist my words. There are benefit programs that exist solely for the purpose of allowing employees to do stuff with "pre-tax" dollars: 401k, flexible spending accounts, certain transportation plans. Without income taxes, there would be no need for these programs or their administrative costs.
How is the NRST going to change interest rates?
Same way that tax-free bonds have lower yields. When the investor does not need to recoup additional money to make a target amount after taxes, the rate of return can drop down to the target after-tax rate.
You keep setting them up and I'll keep knocking them down.
You haven't knocked down a thing.
Only assuming that the employees don't end up with it.
The excise tax on the employer [26 USC 3111] is paid 'with respect to having individuals in his employ,'
Not much left for assuming there. Especially considering the business also pays for the accounting and reporting costs for that little ditty.
Funny. I could have sworn you've been provided with dozens of links on this thread to actual research papers. I know you haven't read them because you bring up things that are covered in them. This isn't some FReeper named "kevkrom" behind all of this, we're talking about dozens of solid, pro-business groups and the work of respected economists.
You're just talking.
Ten years from now you will be ten years older and still selling the same BS on a bulletin board to the same number of people.
In which case, you have no worries that the NRST will be enacted, and you cwill ontinue with the current income/payroll tax system that embeds into all prices as well as hits you on any individual earnings you might have.
And I will be entertained :O)
If your cyrstal ball is wrong, I pay.
You pay anyway. That is the whole point. Crystal ball right or wrong you pay. All the NRST does is change how taxes are paid, it does not reduce the taxes collected by government.
So either way you will continue to pay, it just depends on how you would rather pay it.
Through the income/payroll tax system with IRS anal exams, or not.
-- a free people that pays slave taxes to its government is willingly training itself for bondage.
Alan Keyes 1999Servility of soul is bad not only in itself, it is also an open door through which will soon walk the abuses of ambitious government power. Leaders who find themselves with governmental power over a servile people will be quick to conclude that such a people exist to serve them.
Alan Keyes 1999
I'd be all for this under the right circumstance, but they aren't there for me.
And you know I'm right that this isn't going to happen. So,,it's just a debating society. have fun with it, but don't take yourself seriously. Too many people would be fanatically opposed to it if they ever thought it would see the light of day. A serious proposal that had a real chance of passage would be met with a cacophony from every direction, not the least of which are the people themselves, who have been brain washed into class warfare. They love to "soak the rich" even if it's all in their minds. Most of the people on this forum are in favor of a graduated tax even if they don't comment on these threads.
Nope, talk to them.
Businesses will still use bookkeepers and accountants and I'm telling you why.
So there will be no change in business compliance costs. Point to me.
Nice try to twist my words. There are benefit programs that exist solely for the purpose of allowing employees to do stuff with "pre-tax" dollars: 401k, flexible spending accounts, certain transportation plans. Without income taxes, there would be no need for these programs or their administrative costs.
Buy a clue, buddy. Benefits (and their costs) are here to stay in salaries and union contracts, NRST or no NRST.
Result: No change in compliance costs or prices. Another point to me.
Same way that tax-free bonds have lower yields. When the investor does not need to recoup additional money to make a target amount after taxes, the rate of return can drop down to the target after-tax rate.
A magical 1% (or 5%) change in business interest rates will not change business costs or product prices for 95% of businesses because they don't finance their inventories like public companies do.
So, no change in compliance costs or prices. Another point to me.
You haven't knocked down a thing.
I guess you weren't keeping score. But that's okay, just keep your chin up. That way the drool won't drip onto your shirt.
Except that even opponents of the NRST agree with the majority of the research findings, even as they try to spin them.
Strange? who are you?
LOL, effort now put in by these staffs will be applied to areas more productive than tax accounting or staffs reduced by the factor of how much goes to tax accounting as opposed to business accounting.
American General Contractor's Association
http://www.agc.org/Legislative_Info/Members_Testify/testimony_04-10-00.asp
Multiple points to kevkrom.
I'm not worried, I'm ambivalent. I have been robbed by these filthy thieves all my life and it will continue no matter what. I have no illusions of "fairness". They will continue to screw me like they always have. The only way to win with these people is to blow it all and go on welfare, Medicare and all the rest of the immoral "programs" until you are ahead. Be the recipient of the stolen money instead of the victim of the crime.
and you cwill ontinue with the current income/payroll tax system that embeds into all prices as well as hits you on any individual earnings you might have.
I have almost finished my prime earning years, my rates will now go lower and in effect I will be taxed the same way you want it, as I spend it. But it is irrelevant, it's never going to happen, and you know it. (Or you are in serious dementia, even for a geezer)
C'mon, they aren't "research findings", but I see you will continue to "spin" them that way. Talk about spinning!
As far as complaince costs goes, see AG's links. No points to you for making unfounded assertions.
Buy a clue, buddy. Benefits (and their costs) are here to stay in salaries and union contracts, NRST or no NRST. Result: No change in compliance costs or prices. Another point to me.
You're claiming that companies will maintain benefit programs that have no purpose simply out of inertia? Without income taxes, no one needs a 401k -- people can invest on their own. Without income taxes, no one needs a flexible spending account -- why apply for reimbursements when the money is already pre-tax? I'm not saying all benefits go away. I am saying that some become obsolete, and thus will be eliminated. No points to you for making no sense.
A magical 1% (or 5%) change in business interest rates will not change business costs or product prices for 95% of businesses because they don't finance their inventories like public companies do. So, no change in compliance costs or prices. Another point to me.
We're talking about a 25% drop in interest rates (again, I invite you to compare the yield on tax-free vs. regular bonds). While this by itself may be a small factor, I'm pointing out that a collection of small factors turn into larger factors. No points to you for arguing each piece of this as if it were the sole reason behind the numbers.
But that's okay, just keep your chin up. That way the drool won't drip onto your shirt.
The final refuge of someone who can't win on the merits: the personal insult.
As under the current system, each family member will require their own Social Security number in order to be counted. There is fraud danger here, but it's pretty minimal. Imagine what happens when Mr. and Mrs. Fraud get a visit from the truancy officer when their 3 ficitious kids aren't showing up at school.
The NRST repeals all sections of the IRS code relating to income (earned, unearned, foreign, domestic, whatever) and estate taxes.
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