I think we are looking at the rotten state of capitalism.
The good news and bad news is that enough people to make a difference eventually see through the illusion.
"There is no spoon." (Neo, as he cuts the last elevator cable, The Matrix) 
Posted on 05/30/2004 2:10:00 AM PDT by Remember_Salamis
I think we are looking at the rotten state of capitalism.
The good news and bad news is that enough people to make a difference eventually see through the illusion.
"There is no spoon." (Neo, as he cuts the last elevator cable, The Matrix)
Interesting contention.
A question regarding Government Environmental regulations adverse effects on corporate activities makes me wonder why it would be in corporate elites best interest to increase the power of big government. Does the symbiotic relationship alluded to between big business and big government in the US mean that corporate America is actually enabling and encouraging punitive US enviro laws as a vehicle to justify relocating production to Third World countries? Kind of like use the left agenda to enact the regulations and then use the outcry of the right against such measures to make their withdrawal seem more unnoticed or even acceptable?
If this is so, how much of America's lurch toward Corporatism is being puppeteered by the UN? I admit to being no student of economics but this article has aroused my curiosity to the point of wanting to dig deeper. Thx.
My guess is that Locke is an assumed name, and he is really someone else who dares not print this in his own name.
They are avoidable.
If set too high, higher avoidance occurs. Sales Taxes are collected by small businesses -- smarter folks than the corporateers.
There is an old saying: "If you are so smart why ain't you rich?'
The answer is: smart people don't have to be rich.
So long as we have universal adult suffrage and large corporations whose failure would cause great suffering it's hard to see how we can ever be able to get away from "corporatism." If we all owned, lived on, and worked our own farms or small shops, it might be possible to get rid of "corporatist" programs, but even then, population movement to the cities would eventually help to foster large-scale enterprises and big government programs. Now perhaps with global competition and population decline, a lot of countries, including our own, will have to scale back subsidies and the welfare state, but the result may not be quite as rosy as some think.
Sales taxes present many more common-man and safe approaches to avoidance. The income tax -- especially our bribery crafted arcanity of overregulation -- is avoidable only by the well-connected or rich.
How so?
Please research at: http://www.fairtax.org
Amen.
No, companies will not raise pay because they are not paying contributions to FICA; the saving will go into extended benefits to sweeten the honey trap.
Those at small companies and making a living for themselves will suffer, and most likely have to file for assistance to afford the necessities for existing. Getting a payback from an income tax is for luxuries; payback from a NRST is for the basic needs of existence. The opportunity for social control will far exceed that of a tax on the income side, because people will be dependent on government for their lives.
And, no there is no reason for manufacturers to lower their prices. There will be no competition ("gas wars"); they will do what they do now, agree to maintain prices at an all-the-market-will-bear level because that's what companies in a capitalist system do, unless HR25 requires by law they do so, and it doesn't.
Retail outfits will still have to do complicated extraction and filling at the state level for the federal portion, so they will markup their prices for that hassle and expense, and no, I doubt very seriously that the fed rebate will cover the cost, especially for the Mom&Pop operations, if they survive. And even if it does cover expenses, they will still raise prices, if the others around them do, because that's what businesses in a capitalism do.
A NRST system, besides breaking the last bulwarks of state sovereignty, will enrich corporations immeasurably, in addition to allowing social control, so earnestly pursued by corporations. You posted the article, think about its implications.
An income tax sucks. A NRST is dangerous. But I can see the allure of not having to file personal returns every year and passing that off on retailers to do every month. I can't see the allure of getting rid of a federal IRS and replace it with 50 smaller ones.
How do you avoid the sales tax without buying used merchandise? (The can be no such thing as used services)
The income tax -- especially our bribery crafted arcanity of overregulation -- is avoidable only by the well-connected or rich.
Then why is it the lament by the NRST folks that only 50% of the people actually pay income taxes. That a NRST will force all to pay their "fair share"?
It's HR 25 now. I'm not sure if there's any differences.
I simply don't know where to begin. I guess I'll just start at the top of your post and work my way down.
Under the FairTax, Outsourcing will GO DOWN. There is a principle in economic theory, actually one of the key tenets, called the elasticity of demand. What happens is that companies try to look for a perfect balance between the profit margin per item and market share. When the two are in perfect harmony, overal profits are maximized. In markets where there is competition, prices WILL FALL; it's a fundamental economic law. Every company is fighting one another for this "perfect balance" between price and market share. If this weren't the case, prices would continually spiral upward and upward.
Now, since prices are lower, goods manufactured in the US compare better with their foreign competition. Therefore, more US goods will be sold. As a result, more googs will be maufactured in the US BECAUSE IT IS MORE PROFITABLE. It will also put an end to re-importation.
Now, adressing your next point regarding "sweeting the pot". What you mentioned, increasing benefits, is EXACTLY what happened in the 1960s and 1970s because of the tax law. Employers passed on what would have been wage growth in the form of benefits. Why? For two reasons:
1. Companies get a tax break for providing employees with health care.
2. Employees do not pay FICA or INCOME TAXES on a benefit.
As a result, both parties, employer and employee, mutually benefited from this arrangement: the employer got a tax write-off for providing health care, and the employee got an UNTAXED benefit.
Under the Fairtax, this WOULD end. Companies would no longer recieve a benefit for providing health care (no more corporate taxes, hence no more corporate write-offs), and employees would no longer benefit (there's no reason to have an un-taxed benefit if you don't pay taxes anyway). Therefore, the FairTax would put an end to the practice of passing on wage growth in the form of extra benefits. In fact, decades of this practice is the prime reason (other reasons: socialized health care for seniors and a terrible malpractice system) for our distorted health care system. Employers give bloated health insurance that puts little onus on the employee to conserve costs. As a result, people go to the doc for runny noses and scraped knees. To make a proper analogy for the kind of health insurance companies get, it's like having your homeowners' insurance cover broken windows. Health insurance, like all forms of insurance, is designed to cover the "catastrophic", such as a car wreck, a house fire, or major surgery. The FairTax would end all this.
Next point: you are assuming a cartel. A cartel is when a group of producers get together and agree to fix prices, like OPEC. So, you're "gas wars" analogy is a little off. Now, in other noncompetitive industries, like utility companies, there WIL BE PROBLEMS because there is no competition to force somebody to drop prices. But all this would do is encourage deregulation, which is a good thing.
Regarding small businesses, they will monumentally benefit. The Corporatist system (which the article is about) protects the business interests of politcal constituencies. A lot of these barriers will fall. What's more, it will be cheaper to borrow money and invest under the FairTax. There won't be tax breaks for big companies anymore either. Plus, the "health care advantage" enjoyed by large companies gives big business an advantage over small business through the ability to provide massive group health care plans, and then write it off on taxes! Why do you think GM backed HillaryCare? They can afford to provide health care for their workers, while the competition was less able. Simply put, the FairTAx will make the game more about pure competition and less about who you know and whether or not you're "too big to fail".
Regarding state and fed. filing: they already have the hastle now! TWhat's more, most states would have to change their tax collection to a NRST of their own. After all, almost every state tax collection system in America (if not every one) piggybacks off the federal system. So, with a new federal system, states can piggyback off the new federal system, of erect their own independent collection system, which would be costly.
Bottom line regarding the FairTax and it's effect on corporatism:
Most of the strings binding Big business to Big Government are Corporate taxes and corporate welfare. With both of those gone, American business will be less attached to American Government.
First, let's not call it the "fairtax". Nothing is fair about a 30% NRST on top of a 8-10% state sales tax. Nothing is fair about a 30-40% income tax, either. "Fair" might be a 10% flat income tax. Make no mistake, the large amount of money generated by these high rates are to fund socialist programs.
As for the outsourcing going down, even without corps not having to withhold, foreign labor is going to cost a lot less than American labor, unless we drastically lower our standards of living. If we lower our standards of living, foreign made goods at their low price will be as affordable as American prices before industries went over seas.
The industries that have gone overseas are not coming back. In many cases we have lost the infrastructure to host them, and are rapidly losing the skills to do them again. Of the industries gone or going, the price of American labor is only a part of the reason; heavy government regulation in areas not affecting worker compensation is the rest and will not vanish with an NRST.
Googs manufactured in the US will never be as cheap as those manufactured overseas. The 30% NRST will apply to both. Now, if the NRST applied to only foreign made goods, it would make some sense.
Remember, both your and my theory is just that, a theory. Interactive economics has so many variables that trained economists have been unable to predict outcomes. Once a tax structure is changed, it is set. Better the beast we know than the beast waiting in the wings. We at least know we can survive the present beast.
Now, adressing your next point regarding "sweeting the pot".
Even now, employees sweat over losing their job because of the lost benefits, when the money they need not use for M&D can go for luxuries. Under a NRST, the cost of medical care will be 30% higher, and the basic cost of living will be 30% higher. The security of being an employee for a large corp will be worth the reeducation classes and submission to thought and behavior control for most.
Under the Fairtax, this WOULD end.
When the corp provides health care to employees, that is a service and will be taxed at 30%, because they will have to pay the NRST on that service.
Next point: you are assuming a cartel.
You don't have to belong to a cartel to collude with others in the same business to keep prices up. It happens all the time. A good example is the upholstery trade. I have first hand knowledge that this goes on. The prices aren't exactly equal to one another but they never drop and competition never causes a price war.
Why should anyone drop their prices? The public is used to paying them and will understand, somewhat, that those price will go up with a consumption tax. They are being told the prices will increase 23%. This is one of the reasons I know there is hidden problems in the NRST because if not, there would be no need to lie, and it is a lie, by definition.
Deregulation would be a good thing, but much regulation is not related to to compensation, but for federal control of the of the behavior of the business,and consumer safety, like the sewn in DO NOT REMOVE tags on new goods.
Regarding small businesses, they will monumentally benefit. The Corporatist system (which the article is about) protects the business interests of politcal constituencies. A lot of these barriers will fall.
Small businesses are mostly retail businesses. After a NRST, they will have to report monthly to the state version of the IRS. Much regulation occurs at that point. One of their expenses will be keeping their software up to date, and the potential cost of being audited and sanctioned should they do anything wrong.
This is the point where fraud can occur, and the regulation for such will be heavy, expensive and oppressive. The cost to the consumer will rise to compensate, just like the price of drugs rises to compensate the dealer for his potential danger.
What's more, it will be cheaper to borrow money and invest under the FairTax.
Will not an NRST be placed on the service of borrowing money? In HR2525, the indication is that it will be. All services and new items will be taxed.
There won't be tax breaks for big companies anymore either.
Big companies are invariably manufacturers of finished goods, not having to collect the tax on their sales to retailers and not having to pay the tax on raw materials.
Why do you think GM backed HillaryCare?
Why do you think large corps back an NRST. That should be suspicious right there.
Regarding state and fed. filing: they already have the hastle now! TWhat's more, most states would have to change their tax collection to a NRST of their own. After all, almost every state tax collection system in America (if not every one) piggybacks off the federal system. So, with a new federal system, states can piggyback off the new federal system, of erect their own independent collection system, which would be costly.
All business have the hassle of filing with the state and feds now. With an NRST, only retailers will have to file and be regulated under the future (we don't know how egregious they will be yet). 95% of the unregulated manufacturers are huge corps and 95% of the regulated retailers are small businesses. Large retailers will push even more small retailers out of business, creating a oligarchical effect.
Have you considered the change in relationship between the states and federal government after the feds can compel the state to collect revenues for them?
Under a NRST, no state can choose to not collect the tax and report, which means federal regulation in areas the state have never known before, far beyond the tax and it collection and reporting, but into areas that may affect the tax collection and reporting, including social areas.
I can see ways to benefit from the NRST as well as the income tax, personally and financially. I, personally and financially, can survive as well under either. But a tax on consumption has far more potential for social control than a tax on income. Its has the potential for the iron fist and jack boot like the income tax could never have, and provides the framework for an even farther swing away from the ideal this nation was based on.
I think we're going in circles...
Hers' a nexecerpt from the Federalist Papers #21:
"Imposts, excises, and, in general, all duties upon the articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will in all probability by counter-balanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. . . .
It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed,--that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and tow do not always make four." If duties are too high they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.
Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country. Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment."
If the amount of tax collected drops below that necessary to maintain that level of social security, the rate must go up, by statute. Pressure on Congress will not regulate and cap the tax rate if an increase is mandated in the original legislation.
Used goods will not be taxed, therefore it is reasonable to expect that traffic in used goods will be brisk, profitable and huge, reducing the tax receipts.
I presume all this is the same in HR25.
It is!
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