FairTax Summit in Florida

August 20th, 2004 | AFFT

[Your Nightmare]

BTW, a lot of retired people would probably find their effective federal tax rate double under a NRST.

[Bigun]

I should attend -- have to check my calendar and my checkbook!

Ditto!

Hopefully I'll see you there!

[lewislynn]

Show ME where the double taxation is

You invest/save after tax income then after the sales tax is inacted it's taxed again when you spend it...not everything has to be written.

[Badray]

smokeyb,

Ignore those two. I think that they are IRS employees afraid of losing their jobs so they campaign against this plan.

Anyone with a lick of common sense and a basic understanding of economics can see that prices will fall when the hidden taxes are removed. Competition between current and new providers of goods and services vying for market share will drive prices down. Consumers themselves will be pushing for price cuts because they know that the costs are now lower. And as you point out, consumers will now have a choice of buying used goods and avoiding any taxation.

Those two, (or one posting under multiple names, as some suspect) if they are IRS agents may be afraid that they will be converted to INS agents instead. Don't you know it's easier and safer to harass American taxpayers than it is to protect them from illegal entry and terror attacks.

[Willie Green]

FairTax Summit in Florida

More vultures preying on the hurricane victims: Price Gouging Saves Lives

[EternalVigilance]

FairTax BUMP!

[phil_will1]

"It doesn't matter what scheme you come up with to fund it; the basic problem is that we can not afford to carry that much overhead."

What about eliminating hundreds of billions of dollars in compliance cost "overhead"? Wouldn't that be a good start?

[phil_will1]

"BTW, a lot of retired people would probably find their effective federal tax rate double under a NRST."

There you go again, YN. BTW, you have an apprentice in SC. The senate candidate, Inez Tanenbaum, is trying to scare people by misleading them about the bill. Why don't you contact her campaign and show them what REAL demagogery of the FairTax is all about? They really are amateurs compared to you.

[Remember_Salamis]

I read "Price Gouging Saves Lives", and what you and your PaleoCon ilk don't know about economics could fill an entire library.

Higher prices encourage conservation and provide incentives to increase supply.

It's that simple.

[Your Nightmare]

There you go again, YN. BTW, you have an apprentice in SC. The senate candidate, Inez Tanenbaum, is trying to scare people by misleading them about the bill. Why don't you contact her campaign and show them what REAL demagogery of the FairTax is all about? They really are amateurs compared to you.

Really?

Middle quintile (median) 2001 numbers for Elderly Childless Households from here.

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Currently: Retired couple. Income = $42,500.

Effective Income Tax Rate = 2.1%	=	$892
Effective Social Insurance Tax Rate = 2.0%	=	$850
Effective Corporate Income Tax Rate = 2.1%	=	$892
net federal tax paid = 6.2%	=	$2,635
consumption expenditures	=	$39,865

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NRST: Retired couple. Consumption = $39,865.

FCA	=	$4,283
total consumption expenditure	=	$30,895 = $39,865 * (1 - 0.225)
net NRST	=	$4,945 = 0.2987 * $30,895 - $4,283

Effective Inclusive Income Tax Rate: Current System	=	6.2%
Effective Inclusive Income Tax Rate: NRST	=	11.6%

[ARCADIA]

What about eliminating hundreds of billions of dollars in compliance cost "overhead"? Wouldn't that be a good start?

Absolutely!

So how would the new plan assure compliance? The number of collection nodes would grow, from a given number of employers/employees today, to the quantity and quality of all taxable transactions executed by each of these employers/employees over the collections period. Would you suggest that we eliminate hard currency and limit our population to more easily monitored electronic transactions? What about the immediate cost of migrating to the new system? Would it really as simple as turning off the lights at the IRS?

The current system is the financial pillar which supports our country. It is fine to talk about changing it; but, unless you want a disaster, you will need to first find a way to reduce the load and ensure that appropriate shoring is in place. There is alot more going on with the present system then the mere collection of revenues. those compliance requirements provide the basic metrics by which we gage our economy.

In our past, the income tax was far less significant as a source of funding then it is today. It would be far easier to return to those days, then to try to create the entire mesh anew while operating at full speed.

[smokeyb]

Unless you are very ignorant as to savings, most savings (especially retirement savings)are deferred income. Do you have an IRA, 401K, SEP, etc ? This would be a benefit to those who have saved. Unless you are a major drug dealer I don't know too many people that have large deposits of after-tax cash equity on hand.

For those that do they still will be buying new products at a lower price, can buy a house, car, etc. used and not pay tax.

Double taxation !?!? I suggest you take a product, say the computer you are using, and follow the taxes from the start of the manufacturing process to delivery into your hands and see the amount of taxes embedded into the price.

I agree, Badray, they are either IRS employees (who have never worked in a private business), lobbyists, or tax accountants afraid of loosing their jobs. Or maybe they like the current Marxist tax system.

[Remember_Salamis]

Good God YN!

I would expect it from lewislynn, but not from you. I can't believe you compared income taxes-only to the NRST, without including payroll taxes.

Shame.

[Remember_Salamis]

"Unless you are very ignorant as to savings, most savings (especially retirement savings)are deferred income. Do you have an IRA, 401K, SEP, etc ? This would be a benefit to those who have saved. Unless you are a major drug dealer I don't know too many people that have large deposits of after-tax cash equity on hand.
For those that do they still will be buying new products at a lower price, can buy a house, car, etc. used and not pay tax.

Double taxation !?!? I suggest you take a product, say the computer you are using, and follow the taxes from the start of the manufacturing process to delivery into your hands and see the amount of taxes embedded into the price.

I agree, Badray, they are either IRS employees (who have never worked in a private business), lobbyists, or tax accountants afraid of loosing their jobs. Or maybe they like the current Marxist tax system."

-- I don't think it's much use trying to explain this point. I've tried it 1,000 times, stating that the overwhelming majority of savings are in tax-deferred vehicles (pensions, IRAs, 401(k)s).

I then tell them that the only ones who lose out are someone stupid enough to kepp their entire life savings under the matress.

[Your Nightmare]

I would expect it from lewislynn, but not from you. I can't believe you compared income taxes-only to the NRST, without including payroll taxes.

Maybe you missed the "Effective Social Insurance Tax Rate = 2.0%"

6.2% is all federal taxes except excise, which they would still pay.

[Your Nightmare]

You may have also missed the "retired" part.

[Your Nightmare]

Unless you are very ignorant as to savings, most savings (especially retirement savings)are deferred income.

And a good portion of that is in tax exempt investments.

[lewislynn]

Unless you are very ignorant as to savings, most savings (especially retirement savings)are deferred income.

Most, not all. Money saved/invested that isn't deferred would be taxed twice.

[lewislynn]

Double taxation !?!? I suggest you take a product, say the computer you are using, and follow the taxes from the start of the manufacturing process to delivery into your hands and see the amount of taxes embedded into the price

If I'm paying taxes on the production of my computer and it's components I'm likely paying Chinese, not American taxes....How will that effect prices with a U.S. nst?

[ancient_geezer]

Currently: Retired couple. Income = $42,500.

*** snip ***

Effective Inclusive Income Tax Rate: Current System	=	6.2%
Effective Inclusive Income Tax Rate: NRST	=	11.6%

Good work YN.

Thanks for the ammo, this is an area that is definitely needing more work. Can't have anyone doubling their tax rate afterall, especially those that are so critically hit as the elderly.

Heck doubling my tax rate might even cause me to start looking to cut government or something drastic like that;O)

Good ammuntion to use in the Ways & Means Committee to provide additional transitional aid for retiree's in the bill and assure that at least Social Security recipients will receive Cost of living increases indexed on the NRST rate with CPI provided for in HR25

 

H.R.25

Fair Tax Act of 2003 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.25:

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TITLE III--OTHER MATTERS

SEC. 303. SALES TAX INCLUSIVE SOCIAL SECURITY BENEFITS INDEXATION.

Subparagraph (D) of section 215(i)(1) of the Social Security Act (42 U.S.C. 415(i)(1)) (relating to cost-of-living increases in Social Security benefits) is amended to read as follows:

`(D)(i) the term `CPI increase percentage', with respect to a base quarter or cost-of-living quarter in any calendar year, means the percentage (rounded to the nearest one-tenth of 1 percent) by which the Consumer Price Index for that quarter (as prepared by the Department of Labor) exceeds such index for the most recent prior calendar quarter which was a base quarter under subparagraph (A)(ii) or, if later, the most recent cost-of-living computation quarter under subparagraph (B);

`(ii) if the Consumer Price Index (as so prepared) does not include the national sales tax paid, then the term `CPI increase percentage', with respect to a base quarter or cost-of-living quarter in any calendar year, means the percentage (rounded to the nearest one-tenth of 1 percent) by which the product of--

`(I) the Consumer Price Index for that quarter (as so prepared), and

`(II) the national sales tax factor,

exceeds such index for the most recent prior calendar quarter which was a base quarter under subparagraph (A)(ii) or, if later, the most recent cost of living computation quarter under subparagraph (B); and

`(iii) the national sales tax factor is equal to 1 plus the quotient that is--

`(I) the sales tax rate imposed by section 101 of the Internal Revenue Code of 2003, divided by

`(II) the quantity that is 1 minus such sales tax rate.'.