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 ...
Er... "No one knows", not "Know know"
I am sorry, but I think I am right on this one, having discussed this at length with its primary proponent here, ancient_geezer.
Here is an article with an explanation of the 23%/30% inclusive/exclusive rates.
Here is another article (pdf format) that explains the 23%/30% inclusive/exclusive rates.
As I mentioned before, I am in favor of a national retail sales tax. The Fair Tax has provisions that I don't care for, but if it includes a repeal of the 16th Amendment, then I will accept the Fair Tax proposal.
Suppose a person thinks the government services are only worth $11,500. They would only have to spend $50,000 on new products to receive the government services under the NRST. They could Pocket the other $50,000. Under the income tax if a person thinks the government services are only worth $11,500 then they can earn no more than $50,000 income. But their job pays $100,000 a year so they're forced to pay an additional $11,500 -- twice what they think the government services are worth.
Great, and I am glad you are on board. I just hate the current tax code.
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.
That was my reaction; it's clever in its own way. Philosophically, I don't care for it since I cannot think of a good argument why society should provide this insurance, but on the face of it, it seems workable.
But even providing this coverage doesn't prevent other problems, such as the fact that when the person goes to sell, he is still out the sales tax, and unless there has been a substantial increase in the value of the asset, he may well be underwater on the loan.
My income has gone up about 30% in the last 4 years, yet my spending in real dollars (not adjusted) has gone down in that time -- I paid off some things, refi'd my house, etc.
If I was making 500K, I might spend a little bit more on a slightly nicer car and house, but not much. And I would pay cash for the car and keep it 10 years (like I am doing now). I wouldn't see the change changing my basic frugal nature. I am not sure my spending would be as low as 40K, but if I extrapolate, it wouldn't be much more than that.
Why is this so hard to understand?
It's very easy to understand. Certain people don't like it so the change the premise -- compare apples to oranges.-- to suit their agenda. Make no mistake, those certain people do understand it. They create a straw-man with their apples to oranges comparison and then kick the stuffing out of the scarecrow by proclaiming it a lie. They do it to themselves. See my tag line.
That was my reaction; it's clever in its own way. Philosophically, I don't care for it since I cannot think of a good argument why society should provide this insurance, but on the face of it, it seems workable.Effectively, this is a subsidy, which is the opposite of a tax. If you tax something you get less of it, inversely if you subsidize something you get more. So banks will be more incline to loan money to people who can't afford it. We've removed some of the risk to them. The bank gets the profit on the loan to pay the tax and we take the risk.
But even providing this coverage doesn't prevent other problems, such as the fact that when the person goes to sell, he is still out the sales tax, and unless there has been a substantial increase in the value of the asset, he may well be underwater on the loan.
Dead on, and love the tag line.
Oh well a belated ping, and a Taxreform bump for you all. LOL
If you would like to be added to this ping list let me know.
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:
H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information: http://www.fairtax.org, http://www.salestax.org & http://www.geocities.com/cmcofer/ftax.html
Fundementally illogical describes him to a tee!
Your Nightmare to Sprite518: You don't understand what he's saying.
Obviously you can do your own thinking. I'm going to repeat it here and add a bit to it. For everyone's benefit...
With an income tax at 23%, for each $100,000 income earned $23,000 is income tax. Earn $100,000 then send $23,000 to the government. With the NRST at 23%, for each $100,000 spent on new retail items $23,000 is the national retail sales tax. Spend $100,000 and $23,000 of that is sent to the federal government.
Earned income is $100,000 -- $23,000 is income tax. Spent money is $100,000 -- $23,000 is national retail sales tax..
Your Nightmare to Sprite518: Take my advise, stop posting until you fully understand.
In other words, trust in the "authority" of Your Nightmare he'll tell you what to understand. And don't do your own thinking.
In other words, trust in the "authority" of Your Nightmare he'll tell you what to understand. And don't do your own thinking.Are you saying he wasn't misunderstanding how much the tax was?
I have thoroughly read the NRST proposition and the support doncumentation. You are making a red herring of the issue.
It is really quite simple. The issue is TAX NEUTRALITY. Right now, in broad brush terms, the Government gets about 23% of salary in tax. That is, I made $100 dollars, Gave the government $23.00 and kept $77.00. So, the Government got $23.00. Ok, still with me, I will use small words so that you can understand.
Under NRST, it is not a scam to get everyone more income, it is a simplification plan that will reduce the overhead. If we can agree that Neutrality = the goverment needs that 23%, then we can go on....
Now, under NRST, you make $100.00 You keep $100.00 You go to the store, spend $77.00, the NRST is 30%. (OBTW there nimrod, it is clearly spelt out in the documentation that the rate is 30%. There is no conspiracy for covering up any crap, you just want there to be) So with the 30% tax the purchase is (gasp) $100.00. See, it is a wash to the current system. No hocus pocus, no smoke and mirrors.
Your (and others little tirades about the IRS are hollow, (Gawd I wish Freepers would do some homework before they get vocal) The current NRST is directly tied to a bill for the repal of the 16th amendment and to abolish the IRS. I know that this makes for a boring post for you, but, ylu should really try to represent reality, not your little pictureof the world. Now, before I forget, the neat part about it is that I get to decide if I want to spend that $77.00 or not. Maybe I will buy used, but it is MY decision. I am no longer a mind-numbed tax-payin' robot. That alone has some attraction.
Regarding SS and the others, THEY ARE INCLUDED IN THE NRST. Just read the damn thing will ya. Stop throwing our red-herrings like the Corporate tax white paper (that tells me you are a bean-counter afraid for his future). A 1996 study had NO currency in this discussion.
Regarding tax collection. State governements would be tasked with the collection of the tax and forwarding it on to the Fed. There is a high likelyhood of States abolosihing thier own onerous income taxes because this is a more lucrative tax collection method. State governments are looking for the $$ to do more with less, So it would be a boon for them as well.
I forget who was doing the yammering about how will we fund the military et.al. Oh yeah Bob(J or something). Ah, Bobbie, do have ANY inkling how much the IRS COSTS each year to operate???? (clue: more than the military) Don't you think that there could POSSIBILY be a bit of excess revenue for funding the military???? Not to mention that the damn tax is REVENUE NEUTRAL!!!! Remember XX dollars under todays tax XX dollars under NRST. This has been crunched upside downs and backwards. The guys who worked this up aren't doing remidial math, (Though yours, Nightmare faintly resembles "Million-Man Math")
I came into this thread just to read. But the posts have gone from the ridicilous to the sublime. Before you post anything based on some nimrods "view" of the proposed NRST, go to Fairtax.org and READ IT!!!
Semper Sheesh
Me neither, other than making the whole thing easier to swallow. It's a political consideration that ultimately is about not impeding business, but still getting taxes.
Labor and investors get their money from the consumer. Without the money from the consumer they wouldn't be able to run their business never mind paying taxes. To somehow say that the consumer isn't bearing the burden of corporate taxes is fundementally illogical.Let me see if I can give you an example:
For simplicity, let's start with no corporate income tax.We could do the same exercise with labor. The thing to remember is that businesses don't set the price of products, the market does. Pricing is a much more complicated issue than adding up all your costs, adding whatever profit you want, plus any taxes you might incur.
A company makes a product for $80 and sells it for the market rate of $100. They make $20 profit.
OK. Now with a 25% corporate income tax.
The company makes their product for $80, sells it for the market rate of $100. They make $20 profit of which they give $5 to the government and net $15.
Who bore the burden of the corporate income tax?
Why would Uncle Sam wait for you to make purchases to collect his loot when he can take it right out of your check before you even see it?
1) Congress critters like to stay in office.
2) consumption spending is more stable and predictable than income.
see ==>FairTax and Stable Government Revenue
3) Tax evasion will can be lower than the current income/payroll tax system
see ==>Tax Evasion: The Underground Economy
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.