GOP Discusses National Sales Tax

FOX ^ | Dec 1, 2004

[Sprite518]

"As you say, "trust me" the 23% rate is tax inclusive."

Yes but the less you consume the less taxes you pay. Its your choice.

[crv16]

http://www.massdor.com/publ/pdfs/usetax.pdf

"The use tax is a 5 percent tax paid on out-of-state or out-of-country purchases that are used, stored, or consumed in Massachusetts and on which no Massachusetts sales/use tax was paid. Unlike the 5 percent sales tax, which is collected by merchants, use tax is paid directly to the state by the purchaser.The use tax does not apply to purchases that are exempt from the Massachusetts sales tax, e.g., items of clothing that cost $175 or less."

As you can see, Mass residents who shop in NH and bring their purchases back home are legally bound to pay tax on them. Sure, this law is probably almost never enforced, but it does make all these shoppers "tax evaders".

And products from Canada would be significantly less.

Take a Sony Playstation 2, from Canada ($234CA = $197US), opposed to a system here in the US ($199). Add the 23% tax, and that makes the US PS2 $48 more expensive than the Canadian one. Shipping should be $10-20.

[Bigun]

Care to name one?

There are copious examples on this thread alone. I don't need to point them out as most folks who frequent these boards can read and intrepret the English language quite well without any help from me.

[Your Nightmare]

must tell you that the only half truths and distortions I've observed on these threads have come from yourself and your cronies.

Care to name one?

There are copious examples on this thread alone. I don't need to point them out as most folks who frequent these boards can read and intrepret the English language quite well without any help from me.

So you won't name one. Nice. Unless you have something to back it up, stop make unfounded claims. Got it?

[lewislynn]

Yes but the less you consume the less taxes you pay. Its your choice.

Good idea, you can start now by deciding all the things you want to do without but I thought it was supposed to be good for the economy too. It doesn't sound like it would be if everyone took that attitude.

[Bigun]

Got it?

Yeah! I've got it that you are a COMPLETE nut case if you think your threats will have even the a remote effect on me!

Rave on! You are accomplishing a great deal...for MY side!

[Your Nightmare]

Good idea, you can start now by deciding all the things you want to do without but I thought it was supposed to be good for the economy too. It doesn't sound like it would be if everyone took that attitude.

Can you even wait for the time we can not buy what we want just to stick it the government!

FREEDOM!

[Your Nightmare]

So no examples?

[Sprite518]

I will do a lot more now that I have more money in my back pocket if this ever happens. The more money people have the more they spending. That is true in most cases. Spending is good for the Economy. It creates more jobs, wealth, and raises our standard of living. Its a ripple effect.

[cartoonistx]

To be honest I don't like ANY personal federal taxes. The central government should tax the states via some form of per capita calculation and let the states decide how to collect this amount from their citizens. This is the only way to fairly tax!

[Zon]

Pipsqueaks
vs.
Real Men

lewislynn: Not only is that a lie, it's mathematically impossible without wage reductions...there goes your phony $30,000 richer dream. 370

You don't even know what differentiates a lie from an error. Not only is it not a lie it's not an error. Mathematically it's doable without wage reductions.

From the FairTax Web site:

• "All goods and services already contain the embedded costs of the current tax system in their prices. When these embedded taxes are removed, prices come down. Dale Jorgenson, Ph.D., former chairman of the Economics Department at Harvard University, has projected an average producer price reduction of 22 percent for goods and services in just the first year after the adoption of the FairTax. In addition, the FairTax lowers compliance costs by an estimated 95 percent and the removal of these costs will force prices down even lower."
  FairTax Volunteer - FAQ 1

The following three links to studies by Dr Jorgenson's and his General Equilibrium Model provides the essential economic basis that the FairTax NRST (HR25) was based on. Including the projected 20-30% range for price reduction

•  Efficient Taxation Of Income by Dale W. Jorgensen and Kun-Young Yun, November 15, 2002

The foundational basis for that study comes from two early works by Dr Jorgenson.

• The Effects of Fundamental Tax Reform and the Feasability of Dynamic Revenue Estimation -- in Joint Committee on Taxation, Congress of the United States, The Modeling Project and 1997 Tax Symposium Papers, Washington, U.S. Government Printing Office, November 20, 1997 (with P.J. Wilcoxen), pp. 130-151.

And,

• The Economic Impact of Fundamental Tax Reform -- Frontiers of Tax Reform, Stanford, Hoover Institution, 1996, pp. 181-196; reprinted in Joint Economic Committee, Congress of the United States, Roundtable Discussion on Tax Reform and Economic Growth, One Hundred Fourth Congress, First Session, 1996, pp 98-112.

Dale Jorgenson has exemplary economic credentials and is highly respected by his peers?

Juxtaposition Dale Jorgenson, "preeminently a master of the territory between economics and statistics" and the anti-FairTax pipsqueaks that spew assertions, create context-dropping straw-men and proclaim Jorgenson unworthy.

The following is from Dale Jorgenson's Bio

Dale Jorgenson's

Biography

Dale W. Jorgenson is the Samuel W. Morris University Professor at Harvard University. He received a BA in economics from Reed College in Portland, Oregon, in 1955 and a PhD in economics from Harvard in 1959. After teaching at the University of California, Berkeley, he joined the Harvard faculty in 1969 and was appointed the Frederic Eaton Abbe Professor of Economics in 1980. He has directed the Program on Technology and Economic Policy at the Kennedy School of Government since 1984 and served as Chairman of the Department of Economics from 1994 to 1997.

Jorgenson has been honored with membership in the American Philosophical Society (1998), the Royal Swedish Academy of Sciences (1989), the U.S. National Academy of Sciences (1978), and the American Academy of Arts and Sciences (1969). He was elected to Fellowship in the American Association for the Advancement of Science (1982), the American Statistical Association (1965) , and the Econometric Society (1964). He has been awarded honorary doctorates by Uppsala University (1991), the University of Oslo (1991), Keio University (2003), and the University of Mannheim (2004).

Jorgenson served as President of the American Economic Association in 2000 and was named a Distinguished Fellow of the Association in 2001. He was a Founding Member of the Board on Science, Technology, and Economic Policy of the National Research Council in 1991 and has served as Chairman of the Board since 1998. He also served as Chairman of Section 54, Economic Sciences, of the National Academy of Sciences from 2000 to 2003 and was President of the Econometric Society in 1987.

Jorgenson received the prestigious John Bates Clark Medal of the American Economic Association in 1971. This Medal is awarded every two years to an economist under forty for excellence in economic research. The citation for this award reads in part:

Dale Jorgenson has left his mark with great distinction on pure economic theory (with, for example, his work on the growth of a dual economy); and equally on statistical method (with, for example, his development of estimation methods for rational distributed lags). But he is preeminently a master of the territory between economics and statistics, where both have to be applied to the study of concrete problems. His prolonged exploration of the determinants of investment spending, whatever its ultimate lessons, will certainly long stand as one of the finest examples in the marriage of theory and practice in economics.

Jorgenson has conducted groundbreaking research on information technology and economic growth, energy and the environment, tax policy and investment behavior, and applied econometrics. He is the author of 232 articles in economics and the author and editor of twenty-four books. His collected papers have been published in ten volumes by The MIT Press, beginning in 1995. His most recent book, ECONOMIC GROWTH IN THE INFORMATION AGE, was published by The MIT Press in 2002 and represents the first major effort to quantify the impact of information technology on the U.S. economy. Another recent MIT Press volume, LIFTING THE BURDEN: Tax Reform, the Cost of Capital, and U.S. Economic Growth, co-authored with Kun-Young Yun in 2001, proposes a new approach to capital income taxation, dubbed “A Smarter Type of Tax” by the FINANCIAL TIMES.

Forty-three economists have collaborated with Jorgenson on published research. Many of Jorgenson's books and papers have been co-authored with students in economics at Berkeley and Harvard. Among his former students are professors at leading academic institutions in the United States and abroad and several occupy endowed chairs. The MIT Press published ECONOMETRICS AND THE COST OF CAPITAL, edited by Lawrence J. Lau, in 2000. This contains essays in honor of Jorgenson presented at a conference at Harvard by thirteen of his former students. It also contains his biography, a list of his publications, and a list of his sixty-four Ph.D. thesis advisees at Berkeley and Harvard.

---

Here's a short comparative example of how the Fair tax would effect the consumer going from work to a retail store versus the income tax.

Barb has $130 income. Under the income tax she pays 23% of that in income tax, leaving her with $100 in her pocket. Barb goes to a store and spends the $100 on four shirts at $25 each.

Under the Fair Tax Barb goes to the store with $130 in her pocket. She sees that the price of the same shirt is $19.25 because roughly 23% of hidden taxes that are embedded in the supply chain of making the shirt and bringing it to market as well as corporate tax-related compliance costs have been eliminated via the Fair Tax. 

Barb buys the same four shirts as above for a total cost of $100. 4 shirts X $19.25 = $77 plus $23 NRST = $100 *

Barb walks out of the store with four new shirts and, has $30 dollars in her pocket. Thirty dollars she wouldn't of had if she bought the shirts under the income tax.

*[The $23 tax is 29.87% tax paid on the $77 cost of the shirts -- that's the exclusive tax rate similar to the way a state sales tax is expressed. The inclusive tax rate is 23% and is the same way an income-tax rate is expressed  Regardless of which term is used when talking about the FairTax the end result in the above example remains the same.]

lewislynn: Once again the subject is s-a-l-e-s
t-a-x r-a-t-e-s...And prices would be increased by 30% by sales tax rates not income percentages.

Which of the following is more important to the reader: the way a person talks about the tax rate -- ie., inclusive vs. exclusive -- or is it more important to the readers that they would be able to buy four shirts under the FairTax and have $30 in their pocket that they wouldn't of had under the income tax?

One more thing. Financial privacy and personal safety is increased because the FairTax abolishes the IRS.

 IRS Abuse Reports 

"Warning: These IRS Abuse Reports start mildly and slowly. After a while, these reports build into such a crescendo of sickening horror, criminal destructiveness, and unbearable evil that a sedative may be required to read them all:"

[Zon]

Self-exposure Trap 
Reveals Irony Of A Clown

How many times do you think we need to see something in a thread before it is part of the context of the thread?

I wanted it in one entire post to show how you dropped the context as well as the first example that shows how self-expose traps backfire on the person that drops pertinent facts and context. When you say "context of the thread" you obfuscate. The context is your claim that corporations don't pass taxes and compliance costs onto the consumer in the form of higher prices at the cash register in which you used excerpts from an article to support that claim. And it falls apart when the excerpts that ancient_geezer posted from the same article shows that you omitted key facts and context that renders your excerpts worthless because your "claim" is not supported by the article itself. ancient_gezeers excerpts blow your assertion out of the water. My post at 363 brought the facts and context together in one unified post.

You are really a joke

You're projecting. Only the clown is so foolish to think he could subvert honesty and nobody would notice.  The clown imagines he can play the readers for fools. Oh the irony Your Nightmare, the irony.

[Durus]

The use tax? Seriously...how do you figure Mass can force residents of their state to pay taxes on products they didn't purchase in state. What legal authority do they have to pass such ridiculous laws? But then you didn't answer my last questions so I don't really expect you to answer this one.

You can get a SPS2 at toysrus for 150$. It would be rare that any canadian good is lower in price then what you could find in the US just because of their built in taxes. You also make the mistake of in thinking that the nrst will raise prices by 23%.

[lewislynn]

All you've shown are words of ONE hired economist. If you show his entire quote of "embedded taxes" you'll see that he includes employee taxes that would be included in your 100% paycheck...no savings there.

She sees that the price of the same shirt is $19.25 because roughly 23% of hidden taxes that are embedded in the supply chain of making the shirt and bringing it to market.

The "supply chain" is more than likely foreign and doesn't apply to our taxes...no savings there either.

For there to be a 23% reduction in the final cost there would have to be an average of a 23% reduction in each step of the chain.

10 vendors in the chain reducing their price 10% is a 10% reduction... not a 100% reduction...

Taxes are imposed on profit. Please demonstrate how a company paying 30% tax on a 10% profit can reduce their price 23%.

Get it?

[Your Nightmare]

The following three links to studies by Dr Jorgenson's and his General Equilibrium Model provides the essential economic basis that the FairTax NRST (HR25) was based on. Including the projected 20-30% range for price reduction

•  Efficient Taxation Of Income by Dale W. Jorgensen and Kun-Young Yun, November 15, 2002

Have you even read this paper? It does not show a 20-30% price reduction. It does not use the same model as the other two (which, btw, are different versions of the same paper). And this paper only mentions the FairTax a few times. Here is one::

Since taxes distort resource allocation, a critical requirement for a fair comparison among alternative tax reform proposals is that all proposals must raise the same amount of revenue. It is well known that the ST and AFT [Americans for Fair Taxation] sales tax proposals fail to achieve revenue neutrality and tax rates must be increased substantially above the levels proposed by the authors of the plans.¹¹

¹¹ For example, see Aaron and Gale (1996) and Gale (1999)

 

In "Efficient Taxation of Income", Jorgenson "the preeminently a master of the territory between economics and statistics"and Yun calculate that a progressive NRST would have to have a rate of 40%!

 

[Your Nightmare]

You are a silly, silly man.

When you say "context of the thread" you obfuscate.

I eschew obfuscation. I was responding to a post. Sorry if I didn't cut and paste the entire post I was responding to. Most of us here know how to jump up to another post. Since you have difficulty with it I will consider copying entire post from now on.

mmkay?

The context is your claim that corporations don't pass taxes and compliance costs onto the consumer in the form of higher prices at the cash register in which you used excerpts from an article to support that claim.

I posted the entire section on the corporate income tax. You are grasping...

And it falls apart when the excerpts that ancient_geezer posted from the same article shows that you omitted key facts and context that renders your excerpts worthless because your "claim" is not supported by the article itself. ancient_gezeers excerpts blow your assertion out of the water.

No they didn't. Those excerpts didn't say anything about the corporate income tax being passed on in prices.

My post at 363 brought the facts and context together in one unified post.

Your post #363 did nothing except show how petty you are.

Only the clown is so foolish to think he could subvert honesty and nobody would notice. Oh the irony Your Nightmare, the irony.

Yup, irony.

[Tumbleweed_Connection]

How does all of this affect state, inheritance, capital gains... ?

[Your Nightmare]

How does all of this affect state, inheritance, capital gains... ?

Those would be taxed when you spent them. Until then, no tax.

[crv16]

how do you figure Mass can force residents of their state to pay taxes on products they didn't purchase in state

Sure, it's hard to enforce, but it's the law that Mass legislators put in place.

And why wouldn't the NRST raise prices 23%? Most products we buy today are imported, therefore not subject to the potential corporate tax savings. And products that aren't imported - there is no guarantee that companies will reduce prices by *any* amount. They'll charge what the market will bear, just as they should.

Implementation of a NRST would cause a period of great upheaval with regards to salaries and product/service prices. Who knows what would happen after the fact.

The thing I like about a transaction tax is that it makes our overseas trading partners pay a portion. NRST burden is placed solely on consumers within the US.