DeLay calls for national sales tax

Washington Times ^ | March 25, 2004 | UPI

[ancient_geezer]

WASHINGTON, March 25 (UPI) -- In a preview of the GOP agenda after the fall election, House Majority Leader Tom DeLay, R-Texas, says they are determined to repeal the federal income tax.

Long an advocate of a national sales tax, a confident DeLay told a conference of tax lobbyists Wednesday that House Republicans will have hearings and push the issue in 2005 and 2006.

[ancient_geezer]

The taxfoundation estimates are only based on the direct accounting and filing costs of the "income tax", and does not even address the effects of payroll excises much less litigation costs fine& penalties or a plethora of many other direct and indirct costs imposed on business by the income/payroll tax system that is replaced by the NRST.

http://www.taxfoundation.org/compliance2002.html

In 2002 individuals, businesses and non-profits will spend an estimated 5.8 billion hours complying with the federal income tax code (henceforth called “compliance costs”),

Sorry your "$102.5 billion for business tax compliance." is a very narrow and incomplete number that does not even begin to address the full costs of compliance imposed by both the income tax and FICA.

[The Raven]

Would we still have the 15% SS tax, medicare tax, etc??

[ancient_geezer]

Would we still have the 15% SS tax, medicare tax, etc??

No, all payroll taxes are repealed, along with all income & gift/estate taxes.

You would receive you full gross pay with no deduction for federal income tax or FICA.

[Your Nightmare]

Then I suggest you also convert and cite the income/payroll tax system total effective rate in the same terms so an apples to apple comparison can be made. Which is why the Sales tax is expressed in the same terms as the income/payroll tax it replaces to allow apples to apples/oranges to oranges comparison.

The problem is that income taxes and sales taxes are two different things. One's an orange, one's an apple. You are painting an orange red and telling me it's an apple. Most people will be comparing the NRST to local and state sales taxes that they are very familiar with, which are almost always stated as the tax exclusive rate. The NRST should be stated the way people are use to dealing with sales taxes, using the exclusive rate.

And if stating the sales tax inclusively is only for comparison to the income/payroll tax, why does this law require that the inclusive tax rate be printed on receipts? Will people be trying to figure out how the sales tax compares to the income tax when they are at the register? Of course not. And this law will abolish the income tax. After it passes there is no need for comparison. But, receipts will state the 23% tax inclusive rate when people are really paying 30% more for a purchase. This is an obvious attempt to deceive tax payers into believing they are paying a lower sales tax rate than they really are. And the vast majority of citizens would not realize this ruse until after the law was passed, which is why I believe the rate is presented in the lower, less-understood, tax inclusive rate - to make it more palatable to the average citizen.

How many people on this list were duped into believing they would only be paying 23% more? I was a victim of this deception myself until I looked closer at it. (And, BTW, I don't recall you ever correcting someone - including me - when they misstated costs increases at the 23% rate instead of the real 30% increase. I guess you don't mind misinformation being distributed to the public as long as it helps your cause. Don't worry, I'll be here to correct people in the future.)

[ancient_geezer]

One question - would these taxes apply to real estate? If I sold my home, would I have to send a check to the government?

The NRST grandfathers all residential(non business) property purchased prior to its implementation date.

It can only be applied to new built houses sold after implementation, and the sale of residential land itself having been already fully taxed under the income/payroll tax of today is not subject to the NRST.

The overriding and expressed legislative rule for implementing the NRST, tax everything once but only once at retail sale for final consumption.

In fact "used" goods are expressly defined as those products which have already been taxed under the NRST thus are not taxed.

[The Raven]

>>No, all payroll taxes are repealed

Yippeee...sign me up. Would we still have Democrats?

[ancient_geezer]

The problem is that income taxes and sales taxes are two different things. One's an orange, one's an apple.

That is why you have to use a "tax inclusive" measure for both! To make the comparison.

The income tax is a tax inclusive measure, rate = tax/(gross income) where gross income includes the tax paid.

Same is easily computed for a retail sales tax situation, rate = tax/(gross payment) = tax/(tax + price).

For the income tax, the current total income/payroll tax on gross income is around 23%,

For the NRST the rate is 23% of gross consumer expenditure = (grossincome - savings - state&local taxes).

An apples to apples comparison.

You insist on an apples to nothing comparison which is totally ingenuous as it remove the ability to compare one system with another.

However one can easily redefine the income tax into its Sales tax equivalent, as

federaltaxes/(gross_income - state&localtaxes - savings&investment - federaltaxes)

Which does indeed provide a tax exclusive value of 36% for an oranges to oranges comparison with the 29.87% NRST rate.

And if stating the sales tax inclusively is only for comparison to the income/payroll tax, why does this law require that the inclusive tax rate be printed on receipts?

Because that is how the tax is refered to in the legislation. The tax remitted by the seller is .23*gross_payment what the seller would remit to government by simply adding total receipts on the receipt (in absense of any additional state taxes which are in addition to the NRST and not addressable by federal legislation).

Furthermore, those same receipts also include the actual amount of tax paid and the price of the goods separately as is done today. In fact I have never seen a sale receipt that states the rate of the tax applied, merely the amount.

So what is your point?

And this law will abolish the income tax. After it passes there is no need for comparison.

The seller still needs to compute the tax, and doing so on gross_receipts is simpler than doing so on keeping subtotals and applying a tax exclusive measure.

In fact, vendors computing sales taxes to be remitted to the state I live in is computed precisely that way. The tax inclusive rate applied to gross receipts is used in sales tax forms in remitting the tax in many places, that way the vender can optionally choose to include tax within price here without having to keep separate subtotals. Many smaller businesses here use the optional tax included pricing allowed by the state. My favorite neighborhood restaraunt being one that uses that system exclusively_{(no pun intended)}

How many people on this list were duped into believing they would only be paying 23% more?I was a victim of this deception myself until I looked closer at it.

I made it very clear in post #50, by stating it both ways for both tax systems. And could hardly be missed.

It looks to me the only deception going on around here is you convoluted attempts to avoid comparing equivalent rates between the two systems of taxing. Why is that?

The conversion from tax inclusive to tax exclusive is easily done, why haven't you applied it to show the tax exclusive rate of the Income tax so we could compare them.

Looks like an attempt to decieve on your part by overstating tax rates to me, by trying to imply the NRST taxes more than the income/payroll tax system that it replaces which is clearly untrue.

[ancient_geezer]

Don't worry, I'll be here to correct people in the future.

LOL, like you were when I stated both rate systems back in reply #50?

You can be sure I will be always there to point out that equivalent income/payroll tax exclusive rate of 36% for the proper comparison of the two systems, a comparison which you have yet to provide.

Why do you hide the fact that the current tax system actually hits the Amrican people harder than the NRST? Hmmm?

[phil_will1]

"Yippeee...sign me up. Would we still have Democrats?"

LOL Afraid so. The Dems should LOVE this plan - it is the only one that completely untaxes the poor.

[phil_will1]

"Would we still have the 15% SS tax, medicare tax, etc??"

No, the FairTax replaces all those, as the Ancient one pointed out. However, it gets even better. For a number of reasons, we anticipate that states will drop their income taxes and conform their tax systems to the FairTax. Perhaps the biggest reason is that every state with an income tax piggy-backs that system onto the federal system. IOW, the starting point for every state income tax form is the taxable income line from the federal form. If individuals and corporations are no longer filing federal income taxes, any state wishing to continue levying on incomes would have to build an entire income tax system from the ground up - a daunting task for a state to undertake.

For that reason, among others, it is very reasonable to expect that shortly after the FairTax passes, Americans would indeed have a paycheck in which their gross and net are equal - subject to voluntary deductions such as health insurance, union dues, etc.

[Principled]

Oh yes, then there is the exemptions, (paybacks) for people having low level incomes,at the least.

Well, you don't know about the bill after all.

There are no exemptions in the bill.

There is nothing in relation to income levels in the bill at all. Where did you get that bad information?

My guess is that you're thinking of the refund of taxes paid on necessities. But you're ignorant of the provisions of the bill... and many folks are- but most don't go mouthing off pretending they actually do know something about it.

The refund of tax paid on necessities is a REFUND. What kind of logic is it that tells you that getting back overpaid taxes is a "payback"? Are all of the existing deductions in our income tax similarly evil? This assertion is absurd.

Another fundamental (and I want to stress that it is indeed FUNDMANETAL) misunderstanding you have is that this refund is somehow based on income. That's just plain slap-ass wrong. Every legal resident who wishes to receive the refund may do so, but nobody is obligated to receive it. It has nothing to do with income at all! I can't think where you would get such a wrong idea.

It's odd watching yhou on this thread bounce to and fro wiht random objections to the nrst- when each objection you have asserted is dismantled you always return to your opinion (which is fine, obviously)...but it shows that you have no real objection to the nrst but that your objection is to changing the status quo.

If you can bring up valid points I am happy to engage, but "the sky is falling" is for DU. Here we go with facts and data.

You don't know the fundamental facts with respect to the bill as illustrated in your post about the FCA (do you know what the FCA is?). And you have proide zero data to buttress any of your assertions.

So out with it, nopardons. Why do you prefer to keep the status quo? Or do you?

[Principled]

...talking about something that probably has zero chance of happening

WHat bothers you about folks talking about the benefits and drawbacks of a bill in Congress??

And if you assert that the bill "has zero chance of happening", how about providing some information that backs up your claim?

Your opinions are interesting to be sure, but have little to do with reality, unless you can cite data backing them up.

[phil_will1]

"Even should foreign companies open factories here,most Americans would NOT take those kinds of jobs and have no clue how to make the products."

Two facts seem to have escaped your notice
(1) manufacturing jobs are typically relatively well paying, at least compared to service sector jobs and, therefore, are in great demand here. Many, many of those laid off of manufacturing jobs over the past few years would LOVE to find jobs comparable to the ones that they previously held. Do you honestly believe that we can be a prosperous,vibrant growing economy on a long term basis by selling each other insurance and cutting each others' hair?
(2) As far as Americans having no clue how to make products, anytime you open a new facility, you will have a training curve. That is true in the US, it's true in India, China, Mexico, wherever. Are you saying that Americans aren't as trainable as workers in other countries? If you are going to make such an ad hominem criticism of American workers, I assume that you have data to back that up. Mind providing a link?

[Principled]

You have gone hysterical on us. You're making more statements that indicate that you are unaware of the fundamentals of the bill.

Look here for FAQ or look here for broader information.

Something tells me you won't. It is clear that you never have spent the ten minutes it takes to read the FAQ, but I encourage you to do so. It will make for better discussion. Regardless, it's nice to have you bumping this thread allowing others to refute your nonsense in a way that educates lurkers.

[Principled]

If they are actually considering it, it's because they gain from it, not us.

WHat has been shown is that the candidate who opposes the nrst almost always loses to the candidate who supports it. What the pols gain is a job.

[ancient_geezer]

Also today, a Kansas rep, Todd Tiahrt, unveiled a plan the WH is looking at on how to stop outsourcing of jobs.

Tiahrt advocates national sales tax to help create jobs

Just found this reference to the plan on the net.

[WhiteGuy]

NRST Morning Bump.

The #1 reason that this is the only method of taxation I support:

It's no one's business, especially the governments', how I choose to earn my living or how much I make.

I'll decide how much I'll "contribute" in taxes with my spending. (or lack of)

[Principled]

You're now saying that this is supposed to do completely away with income tax,corporate taxes,capital gains, Medicare [taxes] and social security [taxes] and every other Fed Gov [income related] taxes and bring in enough money to support all of that and all government spending?

Yes. That's why the rate is 23% tax inclusive. You really don't know anything about this bill. Why don't you find out about it then come back and the thread can have intelligent replies. We could *gasp* have discussions based on facts and data.

Of course it makes sense to ask questions if you're unaware of the workings of the bill. But that's not what you're doing. You're spouting objections that are absurd and trivial- pretending that you know about the bill. For an undisclosed reason(s), you oppose the measure. Come clean, man. Are you an IRS agent?

[Principled]

Again,look what happened when the old LUXURY TAX went on, and then had to be repealed.

You're running out of tactics. It has been shown repeatedly that this is just the liberal tactic "say it often and say it loud and folks will start believing"....

Well, that may work in some places YOU frequent, but FR is full of smarter people who are not fooled by this tactic.

The FACTS are that the luxury tax was in addition to existing income tax, payroll tax, and compliance cost.
The FACTS are that the luxury tax made certain items more expensive.

The FACT is that the nrst is a replacement of tax, not an additional tax. The nrst simply replaces existing taxes.
The VOLUMES OF RESEARCH indicate prices will not change much, if at all... and are just as like to fall slightly as rise slightly.

You're sounding like an 8th grader with emotional attachment to the issue in question who is in his first debate. I'm thinking your next point will be something like, "oh yeah?! well you suck at kickball!".

[Principled]

A flAt tax is NOT a VAT

Yes it is. Every single person who has ANY credibility knows this. The flat income tax is indeed a VAT. Specifically, a subtraction method VAT.

Look it up.