Posted on 03/04/2004 10:31:36 PM PST by scripter
So most Americans are now going to be financing a sales tax on automobiles. That puts them more in debt and they are now paying interest on a tax.
Lets see, 20-25% fall in prices + a 23% tax == OMG the same as now.
The total price of any item is set by supply and demand, the supply and demand payment for anything with the NRST will be exactly the same as it today with all federal and income payroll taxes embedded.
Or do you figure that the laws of supply and demand are magically repealed just by changing how we are taxed. If so, I suggest you show us any economic textbook that tells us how that can happen.
Consumerism is the basis of our modern (<20 years) economy and conservatives especially would be afraid to tamper with success even at the prospect of eliminating the income tax.
BUMP
On the subject of tax loopholes:
The way the whole system is structured just invites people to explore loopholes. For instance, we operated under the "sole proprietorship" heading and got hammered year after year. Since changing to a sub-s "corporation", we've saved a good bit. Instead of sending half our income, we're sending a third. I guess that makes us one of those "EEEE-vil" corporations. With two employees. Sheesh.
Part of the process of implementing the Fair Tax is the revocation of the 16th Amendment killing the Federal Income tax.
Two bills of necessity, proposed amendments go through a different process and require 2/3rds approval of both House and Senate, as well a 3/4th ratification by the states.
The first calls for the Constitution to be amended to prohibit all income taxes (merely repealing the 16th would be insufficient),
H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
So the second, Sam Johnson's amendment to the constitution has a chance at enactment & ratification:
H.J.RES.61
Title: Proposing an amendment to the Constitution of the United States to abolish the Federal income tax.
Sponsor: Rep Johnson, Sam [TX-3] (introduced 6/24/2003) Cosponsors: 5
Latest Major Action: 9/4/2003 Referred to House subcommittee. Status: Referred to the Subcommittee on the Constitution.
I'll grant you that argument for the moment. However, I have a $130,000 investment in my house that I bought prior to this proposed tax plan. If I decide to sell it, after such a tax is inacted, I will have to discount it 20% or more just to be competitive with a NEW house that was built under the new tax rules.
What about land? Land will not benefit from lower imbedded taxes because land is not manufactured. In essence, land prices will go up 23% to cover the new taxes, but there will be no offsetting decrease in production costs.
This policy will depreciate every real asset an indivudual has prior to passage of this tax. That is an issue I haven't seen any plan try to deal with.
I think the concept is fine, but the transition will hurt some people a lot, and will play havoc on the economy for several years while it settles out.
So an income tax has prevented people from making income?
This would encourage savings, no doubt, or investment. This is good. A nation of investors. Not a bad position to take in the world.
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.
So you are satifisfied to keep things as they are without trying to change?
It's a good thing that not every one thinks the same way, for an ever-increasing number of members of Congress are actually trying to make it happen because some folks are willing to make it an issue in elections.
Congress Critter's In the News
Has modified his stand to favoring the NRST over the "Armey/Shelby" Flat Tax which he promoted in the Senate for many years.
Primary races for Senate
Steve Rauschenberger (Illinois)
Herman Cain for United States Senate, state of Georgia 2004
and in the House races
Dennis Umphress, libertarian (California 16th District)
Ben Streusand, (Texas 10th District)
Michael McCaul, (Texas 10th District)
Dave Phillips, (Texas 10th District)
John Devine, (Texas 10th District)
Pat Elliot, (Texas 10th District)
Bill Lester (Texas 11th Congressional District)
The first calls for the Constitution to be amended to prohibit all income taxes (merely repealing the 16th would be insufficient)"
Thanks for the clarification. I'm still learning, but I'm on board. In fact, here in Western Pa we are just kicking off an effort to get this moving. I'd appreciate any info that you have. I know that you've done a ton of work on this subject.
'We know it's not perfect' (Shelby on the Stump in Alabama)
Has modified his stand to favoring the NRST over the "Armey/Shelby" Flat Tax which he promoted in the Senate for many years.
There are many thousands of people involved in developing and manufacturing a vehicle - they all pay income taxes!
This will never pass because of fear that a consumption tax would destroy consumption.
Lets see, 20-25% fall in prices + a 23% tax == OMG the same as now.
The individual receives his full GROSS pay, no withholding, and no FICA under an retail sales tax,
And receive the FCA, based on size of household:
All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.
Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.
The 2001 "FairTax" Family Consumption Allowance Figures |
|||
Family Size |
HHS Poverty Level |
Annual FCA |
Monthly FCA |
One |
$8,590 |
$1,976 |
$165 |
Two |
$17,180 |
$3,951 |
$329 |
Three |
$20,200 |
$4,646 |
$387 |
Four |
$23,220 |
$5,341 |
$445 |
Five |
$26,240 |
$6,035 |
$503 |
Six |
$29,260 |
$6,730 |
$561 |
Seven |
$32,280 |
$7,424 |
$619 |
Eight |
$35,300 |
$8,119 |
$677 |
1) Federal Register: February 16, 2001, Pages 10695-10697).
[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer
A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.
The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.
[71] To illustrate the plan's progressive nature we can examine the tax burden that a family of four will have at various annual income levels (or in this case, annual spending levels).
Not only does every family receive a FCA based on family size, not income, but they will also receive 100% of their paycheck:
Fedup Smith makes $39K per year...once the FairTax is the law of the land he will receive an instant increase in pay of $200.00 per week. Since he has a family of four, he will receive a FCA of $445 per month, for a total of $1,305.00 additional income per month that he can do with as he sees fit
"a consumption tax would destroy consumption."
Only in your hallucinations.
However, I have a $130,000 investment in my house that I bought prior to this proposed tax plan. If I decide to sell it, after such a tax is inacted, I will have to discount it 20% or more just to be competitive with a NEW house that was built under the new tax rules.
No because you don't collect the NRST on resale of your home.
The new home price + NRST is the market price, just as newhome price with income/payroll taxes embedded are now.
All the NRST does is change how taxes are collected, and assure that things are only taxed once.
The market value with taxfactors include will be precisely the same with the NRST as they are today with income/payroll taxes embedded in prices.
What about land? Land will not benefit from lower imbedded taxes because land is not manufactured. In essence, land prices will go up 23% to cover the new taxes, but there will be no offsetting decrease in production costs.
Residential land on which a house is built is grandfathered, presumed that taxes on it have already been paid via the income/payroll tax system. Tax once but only once is the express rule in the legislation. With clauses to grandfather property and products prior to implementation of the legislation.
Start here:
Then go to my profile and link pages on FR, to find older threads covering the topic. I and others have been at this since 1998, so FR is a treasure trove of info on the subject.
I thought that was the case, but I wasn't sure.
Let me give you a clue about HR25, use two rules,
tax once but only once,
and if its logical for a retail sales tax, it's probably in there.
And you won't be far off from what the legislation does.
Those are the main rules I use in explaining the tax, and verification in reading the legislation has never proven them wrong.
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