Posted on 12/01/2004 8:25:22 AM PST by Tumbleweed_Connection
...President Bush and House Speaker Dennis Hastert (search) have both said the idea of a national sales tax deserves a serious look. For many, the idea of a world without the Internal Revenue Service is very seductive.
"We spend about $400 billion a year complying with the tax code. We spend $200 billion a year just filling out IRS paperwork," said Rep. John Linder (search) , R-Ga., who has proposed a bill that would create a national sales tax.
Proponents have spent millions on research and have concluded that a national sales tax can replace the income tax, payroll tax, estate tax and corporate tax. Advocates say the new tax would lower the cost of manufacturing and job creation and attract foreign investments, among other things.
"If we were to get rid of the sales or the income tax and the payroll tax and all compliance costs, we would be so ferociously competitive in a world economy that corporate America would not be competed with unless foreign corporations started building their plants in America," Linder said.
Proponents seek a 23-cent national sales tax on all retail goods, everything from groceries to clothes, cars to electronics. Everyone would pay the same rate, which critics argue is part of the problem.
"If you consume $40,000 a year and you make $50,000 a year, would you feel it is fair if a guy who made a half a million dollars a year but spent $40,000 a year paid the same tax you do? I think you wouldn't feel it's fair," said Buck Chapoton, former assistant treasury secretary.
(Excerpt) Read more at foxnews.com ...
You still have not provided proof.
Zon, with the FairTax, if I go to the store and buy a product worth $100 (that's the sticker price), what will my tax be?
The posters lewislynn and Your Nightmare are correct: The federal sales tax rate under the Fair Tax is indeed 29.87%, not 23%.
The 23% rate is the tax inclusive rate: that is, if you purchase something for $100 before federal Fair Taxation, you will pay an additional $29.87 in federal Fair Tax. The total would be $129.87. The 23% number is derived from the fact that the $29.87 in tax is 23% of the total of $129.87.
Banks or other finance outfits will not finance tax. Thus, any sales tax is cash out of pocket. Even when you have "zero down" financing, the sales tax must be paid in full.
If a national sales tax ends up being significantly in excess of existing state sales tax rates, you would have people having to come up with something like 20% of the vehicle price out of pocket. Which most cannot, or will not, do.
Before any of this talk of a NRST turns into something real, this problem has to be resolved. Since most of the people making laws have never sold a damn thing but their own sunny little smiles, they are unaware of this facet. But it's a big thing, and could take a serious chunk out of sales if it comes to pass.
One of the attractions of leases is that the sales tax is paid on a monthly basis as part of the lease payment. That is a reasonable solution that could be tried in the case of an ordinary sale. It's also more equitable.
23% of income earned is tax. 23% of money spent is tax.
If the consumer doesn't pay corporate taxes...where does the corporation get the money to pay the taxes? Do they have a source of income other then their primary good or service? If a company pays their taxes and makes a profit then obviously the cost of the tax was embedded in whatever they offer...otherwise they would go out of business.
23% of income earned is tax. 23% of money spent is tax.Nice Clintonian dodge. Why can't you just tell the truth and answer the question?
Outstanding! That is it! Why is this so hard to understand?
Outstanding! That is it! Why is this so hard to understand?You don't understand what he's saying.
You are right, they won't.
However, the Fair Tax proposal has a provision if I remember correctly (I brought this very point up a few months ago myself) and the answer is that banks are actually indemnified on loans against the sales tax. There is no equity, of course, to back this but apparently the taxpayers will make good the portion of a bad loan that is due to a loss attributable to lending against the sales tax.
I am sorry snow, but you have this mixed up. Trust me!
What do you think you're paying now. Thia way it's upfront and all those tax cheats that work for cash under the table get to pay taxes. Helps eliminate the underground economy.
If the consumer doesn't pay corporate taxes...where does the corporation get the money to pay the taxes?Of course they get the money from consumers (at least, most of it), but that doesn't mean the price the consumer is paying is higher. They don't carry the burden of the tax. The investors could take less profit and keep prices the same or the business could pay their employees less and keep prices the same. Know know (or can know) for sure, but most economist believe the incidence of the corporate tax is on labor and investors, not consumers.
Can't see any negative ramifications right off the bat on this, so I would say it's one plan that would ameliorate the problem.
The average person would start with 100% if their paycheck abd would only pay a tax when they actually spent it. If they saved it or invested it it would be tax free income.
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