Effort to dump income tax gains steam

WorldNetDaily ^ | March 5, 2004 | Ron Strom

[Fledermaus]

And you'd be correct. Many states went down the same road...the promise of eliminating or "lowering" one tax to add another.

Years later both are up and the original tax is higher than ever along with the new tax.

It never stops.

I moved to TN in 1990 just after they voted FOR a "temporary" increase in the state sales tax that took most county rates from 7.75 to 8.25% (we don't have a state income tax). It's now 2004 and guess what? Yep! We still pay that tax. Of course, as usual, in 1989 it was "for the children" and going to be earmarked for education! HA HA HA HA! And people bought it.

And what's worse is they added another "temporary" sales tax increase of 1% to, yes I'm not kidding, spend on "education for the children". On top of that, they pushed through a vote and created a lottery to raise money to give our Georgia style "Hope Grants" to college while campaining only on education. The idiot sheep thought the lottery money was going to all education spending. SUCKERS! We tried to warn them but they are idiots and think they know everything.

So I'm still paying 1.5% in sales taxes that are temporary. Uh huh. But I'll still take the 9.25% overall rate with NO income tax, a good economy, lower cost of living and a higher level of income. I just wish they'd quit lying and get down to reality.

[Taxman]

Good article bump -- thanks for the ping.

[Taxman]

It has been said that politicians, like diapers, need to be changed often, and generally, for the same reasons!

Get involved in grass roots politics in TN, and vote the tax raising scumbags out of office!

I have followed with some interest the attempts by your last governor and legislature to implement an income tax in TN -- which was defeated by a couple of talk radio show hosts and strong grass roots activism.

Unfortunately, the fine people of TN elected a DemonRat as governor in the last go-around. Bad move, that.

OTOH, the previous Republican governor surely did not enhance the stature of the Republican Party in TN, did he?

[Fledermaus]

He sure didn't. I was at those protest downtown. I remember when our Republican Gov. Sundquist sent out the State Police in riot gear to "confront us".

All we were doing was peacefully walking around public grounds, driving on the streets honking our horns, and legaly demonstrating against an idea.

Families and children came out.

But the pricks in office wanted to portray us first as rich folks in a "Lexus brigade" and then as "rioters" and "thugs" because some liberal plant hurled a rock and blamed it on us.

I voted against our current Dem governor, Phil Bredesen. But so far, he's done more to curb spending, cut the budget (okay, slowing the increase) and hasn't brought up new taxes and is serious about "reforming" (I hate that term) TennCare.

But Sundquist was a good first term governor. He lost it in his second term and Bredesen won't but up again until 2006 I think.

[Badray]

"Everything you said is true, and I'll add this -- I don't trust the Federal Government to not slap an income tax on top of the NRST if it were to ever pass. They wouldn't do it at first, but I could easily see double taxation down the pike."

Part of the process of implementing the Fair Tax is the revocation of the 16th Amendment killing the Federal Income tax.

I don't know all of the details yet, but this has been in the works for 10 years already and while it may not be perfect, (what is?) if it gets rid of the IRS anal exams and the manipulation and control by Congress, then it's the way to go. The Social Security tax will also be gone. One tax on items purchased. You keep your whole paycheck.

You don't spend, you don't pay tax. Period.

And what you have to remember is that EVERYONE - whores, drug dealers, foreign tourists - EVERYONE will pay tax.

[Badray]

I think that you bought the party line hook, line, and sinker. Yeah, there are cheaters and scammers. But if the tax burden were lower - not as crushing, punishing, and confiscatory - then the incentive to 'cheat' is not as great. The essence of the Federal Income Tax is control. It is a slave tax and the tax code is an abomination.

[Badray]

"Let's go back to the idea of cars. How exactly will that extra tax be marketed? Car sellers will NOT want to slap that tax on TOP of the price and all the other crap they sell you. So they'll play the game again...higher trade in, longer payment, lower interest rate, etc. All the tricks they use to keep the price the same."

It seems that in reading prior posts from you that you are a sane and rational person so I'm a little perplexed at this bit of rambling.

There will be no 'marketing' of the tax. You buy, you pay. Period. From 25 years in the car business, I can tell you that (Unless you buy your car from Crooked Motors) the car business has never ben more transparent. Disclosure is almost to the point of being ridiculous.

I ask you to put aside your fear. Read up on the plan. Look at all the good that will be done by driving a stake thru the heart of the IRS and the tax code.

Okay?

[Taxman]

Thanks for jumping in here, Ray. Your posts add to the debate and are most welcome.

[ovrtaxt]

Someone beat you to this article! I guess even geezers have to sleep...

[Taxman]

"Taxquist." Ahhhhhhh -- now there was a politician.

You folks did a good job shouting down his proposed income tax, and it does not suprise me that Beredsen is being cautious in his first term of office.

You have correctly identified the 14,000 pound gorilla in Tennessee -- TennCare. That program (Hitlery! Health Care Lite, BTW) is eating the people of TN alive. It is an excellent example of "If you build it, they will come." TennCare attracts FReeloaders FRom all over the country, as I understand it.

Hope you will be able to get control of that monster and put it on the "Big Diet," and soon.

[SERE_DOC]

Sorry to be a wet rag on the subject... but The clowns in DC (no matter what side of the isle they are on) are never going to limit their power and the IRS will be unabated in their ability to destroy.

I will be happy to eat my words but I don't think I will need to.

[ovrtaxt]

products that don't drop in price as they predicted.

The only products that won't drop in price are products insulated from competetive market forces. Like anything having to do with the government, for example, or any other de facto monopolies.

[Principled]

BUMP A BUMPETY-BUMP NO-IRS A-BUMPA-LOOEY!

[ancient_geezer]

A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

[ovrtaxt]

Car sellers will NOT want to slap that tax on TOP of the price and all the other crap they sell you. So they'll play the game again...higher trade in, longer payment, lower interest rate, etc. All the tricks they use to keep the price the same.

Try this out-- the manufacturers no longer have to comply with the IRS. No more employee withholding. Their steel, paint, robot repairs, oil, everything you can think of, becomes subject to competition at lower levels. Their cost drops.

When the car makes to the showroom, it's cheaper, and the sales tax puts it right back where it is now, more or less.

The difference is--- now you have a choice. If you buy it, you pay taxes. If you don't, you don't pay.

The politicians no longer have control, you do. They no longer hold you in a perpetual state of economic jeopardy, with the threat of an audit.

Beyond that, the concept of taxing productivity and success goes away, and the concept of taxing expenditures by individual choice comes about. The first is Marxist, the second is just and fair.

[ancient_geezer]

But income taxes buying a car?

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation

The full impact of the federal tax system(taxes in gross wage/salaries & other compensation + business income/payroll taxes) added onto the base(taxfree) price of retail consumption goods and services is 36% for federal taxes alone.

[ovrtaxt]

I just wish they'd quit lying and get down to reality.

Here's another good reason to support a NRST-- you are extremely aware, as everyone in TN is, of your tax rate. You are reminded of it everytime you make a purchase.

The lying is evident.

Politicians have no room to deceive you with a single sales tax rate.

A tax code book more complicated than an ACME atom smasher owner's manual leaves lots of room to hide and obfuscate.

Again, less control to DC, more control to you.

[SeeRushToldU_So]

I am all for it!

[ovrtaxt]

Call your congressman and force him to support it. I did. We're a step closer than we were before.

[ancient_geezer]

I would need to see more evidence than one Harvard professor, because if prices did not drop as they say, the 23% would be very costly -- indeed, crippling.

Here you go Scott:

The following article covers the mechanism on how the current Federal tax system propagates and is embedded into consumption expenditure.

DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation

The 24% in the article considers only those factors actually paid to government out of imposititions on business in complying with the income, payroll, excise & tariff tax laws.

I refer you to the section of the following article about the Income/Payroll tax system and its impact on our economy "A. Hidden Upstream Taxes. " paragraph 39.

"[39] Dr. Dale Jorgenson, Chairman of Harvard University's Economics Department, believes that the price of goods and services are inflated by about 20 percent or more by upstream taxes consumers ultimately bear. In a recent paper Dr. Jorgenson estimated the built-in taxes contained in the price of goods and services. /22/ In the chart above, he quantified the hidden component of tax, estimating that producer prices would fall on repeal of upstream taxes an average of about 22 percent."

Looking at the accompanying chart, the range of values from industry to industry appears to be about 12-25%.

Economists Gary and Aldonna Robbins of the Texas-based Institute for Public Policy examined the case of dry cleaning a shirt, with a particular eye toward uncovering the hidden costs of taxes in price.

The Robbin's attributed over 33.6% of "consumer prices" to be due to federal taxation passed on to the customer.

The Federal Tax System
http://www.cbo.gov/showdoc.cfm?index=2125&sequence=0&from=1#pt1

From the Table 1 we may extract the proportionate contributions of each sector of taxes as they contribute to consumer price for the year 2000.

• Total revenues collected by Feds in '00 = $1945billion ( 33.6% of consumer price)

Those tax components which will not change prices as a consequence of enactment of HR2525

• Individual Income Tax(Labor) = 945billions,
• Employee half of Social Insurance = 653/2 = 326.5billions,
• Excises = $68billion
• Customs Duties = $19Billion
• Miscellaneous = $40Billion

============================

• Total constant price factors = $1358.5 billion

• Remainder federal tax components affecting price = (1945-1358.5) = $586.5billions

Adjust for a conservative $800 billion cost of tax compliance, (Payne '95 estimates 65cents for each dollar of revenue collected, $1264billion) reductions .

• Total tax related factors affecting consumption price = (800 + 586.5) = $1386.5billions

Estimated change in consumption prices as consequence of enactment of a National Retail Sales Tax, repealing all business income and payroll taxes:

33.6*(1386.5/1945) = 23.9% reduction in consumption prices

Which more than verifies the Jorgenson empirical study of 22% fall in producer prices.

The two sources are in reasonable agreement, and I see 20-25% a reasonable value to expect retail prices to fall, not only for customers here in the United States, but in our exports as well making them far more competitive on international markets.