[scott7278]

A 23% tax on a major purchase like a new car or home could be a major burden, BUT they say that prices will also drop 20 - 30% because of the hidden income taxes that are already built into the products.

[Fledermaus]

What "hidden income taxes" are in automobiles? No income taxes are "hidden". Excise taxes, sales taxes, VAT taxes, etc., they are sometimes hidden.

But income taxes buying a car?

[TN4Liberty]

A 23% tax on a major purchase like a new car or home could be a major burden, BUT they say that prices will also drop 20 - 30% because of the hidden income taxes that are already built into the products.

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.

[lewislynn]

A 23% tax on a major purchase like a new car or home could be a major burden,

You've fallen for the 23% lie. The tax is "23% of the gross payment" (including itself).

`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.

That equates to 30+ percent increase in price. Notice the tax is "of the gross payment...gross payment being all other taxes, fees, excises and anything else tacked on to the "payment" would also be taxed 30%. They'll claim the term "gross payment" doesn't really mean "gross payment". Keeping in mind the governments hunger for spending your money you decide what that means and what kind of favors they'll be doing you.

BUT they say that prices will also drop 20 - 30% because of the hidden income taxes that are already built into the products

There is NOT 20 to 30% federal income taxes "hidden" into any product at the retail level...NO business would survive paying 20 to 30% of their gross in taxes. Most products aren't even made here anymore anyway....THINK!

[Dead Dog]

The only reason I can see the prices of goods an service droping from this is if the tax paid employees is cut from their salary. Our take home pay will not change, but we will pay %5.00 more for "things".

The good part about all of this, is foreign produced goods will be taxed equally. As of now, chinese employees do not pay our income tax, American's do. That is reflected in cost. With a NRST, the playing field is a little more level.

[RightWhale]

BUT they say that prices will also drop 20 - 30%

Yeah, that could happen.