Posted on 08/26/2004 11:05:33 PM PDT by n-tres-ted
The truth is that 45 of the 50 states ALREADY have sales tax enforcement agencies in place which by - the - way, are invisible to 99.44% of the population.I didn't say they didn't, but they don't collect all the federal taxes now, do they? And they do audits all the time.
And I never mentioned "returns", that changes the subject. I'm not interested in changing the subject, which is, your statement that prices would go down. A preposterous thing when not identified as a projection. Crystal balls will be in short supply if this thing picks up steam. (An unlikely prospect)
"First he says no federal income tax. Then next he calls it a National tax. What's the difference?"
Ummm ..... about 59,000 pages for starters ..... or a 99+% simplification. That translates into hundreds of billions of $$$ in compliance cost savings.
For another, we would no longer be putting US producers at a disadvantage vs. their foreign counterparts with our tax system. That would have a MAJOR impact on our trade deficit - without provoking a trade war, retaliation by trading partners, or WTO sanctions.
How is that for starters?
I don't see how it could be possible though, since the very institution that does audits (the IRS) would be shut down.
Under HR25, states tax authorities would be administering the NRST in parallel with there own sales tax systems. One of the tools they use to promote compliance is to audit retail businesses for tax compliance when they have reason to suspect a business is defrauding or evading the retail sales tax system.
The effect on retail business would be no greater for having to account for there gross sales receipts under a state's current sales tax and one with the NRST along with it.
Any tax system will have the means to enforce its provisions. The key to a retail sales tax is that only those business that chose to engage in sales of new products for final consumption (as opposed to selling to other businesses or the sale used products on which the NRST has already been paid) are subject to NRST enforcement to assure that taxes are collected from the customer and once collected are indeed remitted to the state tax authority.
Ok, I agree that could be an area where things could get a little nasty (confusing, muddled, etc). I would hope and assume however that the authors of HR25 would've put in their proposal something to regulate how each state would collect the money. A standard procedure in other words.
Again though, since there wouldn't be any complicated tax laws or loopholes or deductions anymore, I don't see how an "audit" could be justified for anyone. The institution that used to perform them (the IRS) is elimated, and the reasons (as trumped up as they are in most cases) for doing them are eliminated.
I can see no reason to believe differently at this time.
"Let's hope your car wasn't made in Germany and your clubs in Japan."
Good gosh, no!! We certainly wouldn't want foreign producers to have to compete on a level playing field with US producers when marketing products in this country, would we?
Interesting, so audits would still continue. I stand corrected Your Nightmare.
However, I think the point ancient_geezer makes is a good one: Retail businesses are already affected by state sales tax audits, thus, the impact on them would probably be minimal.
And of course, as we all agree, individual audits would be eliminated, which is a good thing too.
I would hope and assume however that the authors of HR25 would've put in their proposal something to regulate how each state would collect the money. A standard procedure in other words.
Refer to the legislation:
H.R.25Fair Tax Act of 2003 (Introduced in House)
`CHAPTER 4--FEDERAL AND STATE COOPERATIVE TAX ADMINISTRATION `CHAPTER 5--OTHER ADMINISTRATIVE PROVISIONS |
"I paid as much as 50% of all my pay to the government most of my working life, and now that I'm ready to retire and spend whats left, they will no longer tax earnings, but spending."
"Yeah, this thing will look real good to folks in my situation."
Two nationally known money managers told Congressman Linder that they didn't know what the Dow would be on the day the FairTax is implemented, but 24 months later, it will have doubled. If we can double the DJII in 24 months, who benefits the most from that?
Does it look any better to you now? If the value of equities doubles in 24 mos., that dwarfs the fact that you may be paying 2-3% more for US produced goods. Of course, if you choose to buy imports, you will pay more for them. That, however, is your choice.
Sounds good to me. :)
"Retail prices always go up. People get used to valuing goods a certain way and don't flinch at slight increases. Retail prices only seem to go down for obsolete products or products on the verge of obsolescence."
Not true ..... I can't imagine where you got that idea. It certainly doesn't square with economic principles nor with my experience.
Do you recall the pricing of DVD players when they came out? MUCH higher than they are now, and I would venture a guess that today's have better features and functions. What about computers? I saw a computer advertised the other day for $500 that is a killer machine. You don't have to go back very far to remember a time when a decent computer was over a grand .. and those machines were nothing compared to today's.
Good gosh, no!! We certainly wouldn't want foreign producers to have to compete on a level playing field with US producers when marketing products in this country, would we?Don't make me drive a Ford instead of my BMW.
I'm a money manager.
If your money manager has a crystal ball, double what you pay him.
Projections on the stock market are a dime a dozen.
"We need tax reform, but abolishing the income tax outright is about the single most risky proposition of destoying that which most of us clearly take for granted: a stable government."
I agree that a change of this magnitude is not risk-free, but the enormous benefits would seem to make it a worthwhile endeavor.
However, it should be pointed out that staying with the current system, which is growing like a cancer, is NOT a low risk alternative. Many uninformed Americans assume that it is. According to CCH, the tax system, which was 23,000 pages when Jimmy Carter described it as a "disgrace" in 1976, is now up to app. 60,000 pps. At the rate it is growing, it will exceed 100,000 pages by 2010. Does anyone want to bet that it holds together that long? The evidence that it is buckling under its own enormous weight already are all around us.
We can either get serious about FTR now or wait until we have a huge disaster - the choice is ours.
Tell me how they would prevent tax fraud with the fair tax?
How do they prevent small businesses and selfemployed from defrauding the system now. State tax authorities would administer the law just as they do now.
One significant factor however is that the maximum marginal tax rates on the current income/payroll tax system is over 40% providing significant incentive to hide income, not file, and evade those taxes today.
Under HR25 the maximum marginal tax rate would be approximately half that.
Another is that there are fewer filers (apprx 16million) engaged in retail sales as opposed to the current 160million or so filers. Enforcement efforts would be more concentrated raising the risk of detection.
read ===> Tax Evasion: The Underground Economy
The whole nation will become a bartering nation and the level of retail purchases will fade into oblivion. Someone educate me here.
Between less incentive and higher risk of being caught, there is no reason to believe that tax evasion would be any greater than it is under the current system with its cash underground economy and illegal trade.
There are all kinds of taxes. Tariffs would result in higher prices to the consumer, a net wash, assuming no unintended consequenses.
I favor a sales tax for the simple reason it is visible every time you buy something. The psychological effect would be worth any inconvenience.
"Now a business will have 50 tax collection agency to deal with. The states will take over the IRS's job. 50 little IRSes, each with their own rules, regulation, procedures, etc... and business will have to file once a month to each of the states they do business in instead of once a year (or quarter) to one agency. So much for simplicity."
You are confusing state sales taxes, which are undoubtedly a mess, with the federal sales tax, which is what HR25 will bring about. Filing once a month with the states you do business in, for example, is a requirement of state sales taxes, not a federal tax.
Even on this front, however, there is good news. The FairTax will encourage states to "harmonize" their state sales taxes to the new federal NRST. There is already a movement afoot to standardize state and local sales taxes; the FairTax can realistically be expected to accelerate that trend. Most of the complexity in state sales taxes comes from differing rates and differing exemptions in different jurisdictions. Since the NRST is a single rate with no exemptions, at the very worst, we will be no worse off than we are today with respect to the complexity of collecting sales taxes, and a huge amount better off than we are with respect to income taxes.
Also, no matter how you slice and dice it, converting from the 60,000 page monstrosity that we have now to a system that is less than 1,000 pps. will result in an enormous savings in compliance costs.
"Businesses would still be audited, maybe even more."
Apples to oranges. Sales tax audits are trivial compared to income tax audits.
Since the return is minimized as well as the risk, would not the increased risk be justified by an increased return? As it stands today, the R&D budgets are maxed at the level of the "write-off" amount, give the corporations the decision making freedom and the potential pay-off may just cause an increase.
Of course, the point made by the other poster is that the "greedy" corporations won't reduce their prices, instead they will increase profits, investment and R&D. If his statements are true, then an increase in jobs would be expected.......
If his statements are not true, then the prices would be decreased.
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