Posted on 12/01/2004 8:25:22 AM PST by Tumbleweed_Connection
"What if there is a bad year and people don't buy that much? I am certain Congress will find a way to add an 'emergency' tax for years like that."
History teaches that consumption is a more stable tax base than income.
"Also, as an employer, you will still be on the hook for SS & Medicare taxes."
(sigh) No, you won't. For the umpteenth time on this thread, all payroll taxes would be eliminated by the FairTax.
"State income taxes would still be there."
No, they would not. Few, if any, states would continue to tax income without a federal income tax system to piggy-back onto.
"Most economists don't believe this."
Who are "Most economists"?
"Or the profits that the manufacturer makes on the car just takes a big jump."
That would be true if there were no competition in the auto marketplace.
".....most economist believe the incidence of the corporate tax is on labor and investors, not consumers."
Who are "most economists"?
"The DEMOCRATS will oppose it vigorously!"
Many will, but we will get some, just as President Bush got some to support his tax cuts.
"You are showing your ignorance. You really should stop posting until you understand this plan more."
"Seriously."
You are showing your arrogance. You really should stop trying to control who posts to these threads.
Seriously.
"...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."
You buy a house for, say, $250K after the FairTax is implemented. Your neighbor bought his before the FairTax and paid $250K. You both got mortgages for $200k. You and your neighbor get transferred two years later. You both sell your houses for $265k. In effect, you are getting reimbursed for the sales tax that you paid, just as your neighbor is getting reimbursed for the imbedded tax costs of the old system.
Pretty well thought out, huh?
"What makes you think corporatation pass their taxes on to consumers through higher prices? Most economists don't believe this."
"You aren't serious are you?"
He certainly is .... serious as a heart attack. Stick around these threads for a while. You would not believe the mental gymnastics that the FairTax bashers go through to avoid acknowledging its benefits. YN would have you believe that tax costs work in an entirely different way in business economics than other costs to operate and produce goods. It gets hilarious at times.
"Sheez ... put the system down and go do some chores and a whole new thread takes off."
You mean you have a life outside of Free Republic? I'm SHOCKED, I tell you, SHOCKED!!
BTW, Tom Wright is going yo be on Allan Colmes radio show tomorrow (Friday) night at 11:15. I know you knew that, AG, but this is for the others on the thread. He will debate the FairTax against a (TBA) liberal.
The reason the Canadians dislike the high sales tax they have is that it is in addition to income tax and rather high property taxes. Also, the sales tax is highly VISIBLE, which is an argument in its favor, because it constantly reminds people of what the government is taking.
A sales tax is more just, and economically best.
There is a problem of collection, however. It is easy to evade, and the higher the rate, the more incentive to evade the tax. But the income tax is also evaded.
I fear that the public does not have the imagination or the wit to change the current (disastrous) tax system.
"Granted, raw materials may not be taxed, but brooms, paper, toilet paper, desks, chairs, pens, grease, wrenches, etc. suddenly became 30% more expensive."
(sigh) No, they won't be 30% more expensive, they will be 20 - 25% LESS expensive. Business inputs are not taxed and the imbedded costs of the current system will be removed from the pricing model relatively quickly.
"From what I've seen people that take the time and energy to become educated readily side with the Fair Tax."
I will second that. We probably get at least 67% of the group that approaches the issue with an open mind and witholds judgement until they have a pretty firm grasp of the issue. The biggest problem we have is that (a) so many people have a vested interest in the current system, and (b) people are naturally resistent to change.
"Would the IRS move from auditing tax returns to monitoring ebay?"
Since most of the stuff sold on ebay is used and used goods are not taxed under the FairTax, that is highly doubtful.
"Another good example is computers & software. Suddenly this manufacturer's computers & software will cost 30% more. The mfr is not going to absorb these costs - he is going to pass them on to his consumers."
One more time....... THIS IS A CONSUMPTION TAX, BUSINESS INPUTS ARE NOT TAXED. Business inputs will, in fact, decrease in price as the cost of the current tax system are removed from the pricing mechanism.
"A transaction tax would be several times more difficult to evade, therefore making it more fair for all of us."
How would you ensure that the transaction tax was collected on the hypothetical border sales that concern you in the sales tax example?
"BTW, this isn't my first rodeo, I've studied and argued the points of this tax for yrs."
Indeed you have. Have you managed to persuade anyone of the merits of your argument yet?
"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."
Have you ever heard of the elasticity of demand? Businesses exist to maximize profit, not to maximize price. With elastic products in a competitive marketplace, sales volume goes up when prices go down. Equilibrium will be reached when prices fall to a point where sales price exceeds cost just enough to achieve a reasonable profit margin.
I don't know or care. For some reason you're more concerned about my merits than I am.
But then if you have a problem with the merits of my argument, you have a problem with the plan itself.
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