Posted on 08/29/2004 7:17:58 PM PDT by det dweller too
Income Taxes - The fool’s game
The political season is heating up again and the politicians are busy playing the fool’s game of appealing to our darker instincts. They call on us to tax the rich and everyone cheers, except a few that are immediately labeled as selfish and thereafter ignored. In the end, the politicians usually get their way by convincing the majority to raise income taxes on the rich.
The reason it is a fool’s game is the sad fact that the income tax operates as a hidden fixed cost on domestic business. If you put a large income tax load on the business owners, even if you deduct 100% of the income taxes from the workers, the price of the products they make still goes way up. In the past this was met with a yawn and a shrug as everyone paid the new price, but today there are alternatives. The businessman today that loses profitability because of higher taxes simply can turn to sources outside the US for products that are beyond the reach of our income tax laws. In this way, the businessman can support the tax change voted in by the majority while at the same time maintaining his profit margin by switching to imported products that undercut the pricing from domestic businesses. As the domestic businesses try to compete, they look for ways to cut costs. Since the tax costs cannot be avoided, the only area left to cut is the cost of their domestic labor. In the end it is the majority who voted on taxing the rich that end up losing their jobs, benefits, and wages.
The only effective way to quit this fool’s game is to stop hiding the cost of income taxes in our domestic products. Instead of income taxes, we should consider a simple excise tax on all products sold in this market, regardless of where they are made. Note that this is not a sales tax or value added tax, which can be abused by taxing the same product multiple times. Taxing a product once when it is brought to market takes the cost out of the product itself and puts it into the act of marketing the product here. Import and domestic products marketed here would be taxed at the same rate and exports would not be taxed at all. This will remove the hidden cost penalty that have been causing the loss of jobs in the US and immediately improve US global competitiveness.
F. Kelly
Canton, MI
How is the sales tax, that everyone must pay and is keenly reminded of, "hidden"?Because that's only 70% of what they are paying.
Can you explain what you mean? I don't have any idea what you're saying.....
Can you explain what you mean? I don't have any idea what you're saying.....Only 70% of the taxes collected by the FairTax would be paid by customers at the register. The other 30% will be paid by taxing government expenditures which those governments will in turn pass on to their citizens (us) in the form of higher taxes. Only people can pay taxes, it has to get back to us eventually.
In all the critics calculations, they overlook or try to ignore the fact that the economy is dynamic, not static. Anytime you want to increase tax revenue, lower the rate.
With imbedded tax cost gone, costs will come down. Income will go up (it's no longer being confiscated). Sales will increase. Tax revenues will increase.
Do you ever hear people gripe about working overtime? They hate it because the tax man gets so much of it. In the new economy that this will produce, overtime will really mean something to them. Unions that fight this proposal will face extinction when workers realize the benefits that they were told to forego.
I still don't understand how you are equating the state/local government agencies requirement to pay the NRST with today's "hidden" taxes. I do understand your concern about the percieved tax increases associated with these agencies paying the NRST, but I still don't see it as "hidden".
Well, not anymore than the typical Democrat believes Gov. Granholm when she blames the President for the lagging of MI's economy when compared to the rest of the country. The rhetoric for socialism will always persist, but the best weapon against this rhetoric is knowledge. The NRST is a great way to make people knowledgeable as to the costs of government entitlements.....
I agree, there is no pie to be divided up, or to have shares fought over. RR proved the thoughts supporting that POV to be incorrect.
I still don't understand how you are equating the state/local government agencies requirement to pay the NRST with today's "hidden" taxes. I do understand your concern about the percieved tax increases associated with these agencies paying the NRST, but I still don't see it as "hidden".How is a business being charge a tax by the feds and making you pay it through higher taxes any different than the states being charged a tax and making you pay it through higher state taxes? Aren't they both hidden federal taxes?
Anything the States purchase today has the imbedded tax. Specifically, the sales tax would become a line item in their expenses, just as it would be for individuals, and it would be readily accessible by the State's residents. They would still have access to the budget planning and budget spend, just as they do today.
Even if I were to agree that this 30% you reference is "hidden", wouldn't that be a significant improvement over the 100% hidden amount today?
Specifically, the sales tax would become a line item in their expenses, just as it would be for individuals, and it would be readily accessible by the State's residents.,/I>How would that tell me how much I paid in federal taxes through my state and local taxes? What you are suggesting could be done today by looking at the total amount of federal corporate income tax paid, but what does that really tell you?
Even if I were to agree that this 30% you reference is "hidden", wouldn't that be a significant improvement over the 100% hidden amount today?100% hidden? How is today's tax 100% hidden?
This hidden tax business is a bitch!
Yep. It's that simple, but some refuse to see.
Also the underground economy pays equally as well. (I.E., drug dealers, hookers, etc.)
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