GOP Discusses National Sales Tax

FOX ^ | Dec 1, 2004

[Sprite518]

Numbers 2 and 3 can be managed better by private companies. They do not have to exist. For instance, Fed Ex for the mail. The roads are obviously ran by government. You ever look at how long its takes to get a road done? It seems like most projects are years. The private sector could manage it better.

[Sprite518]

I agree 100%

[Your Nightmare]

However, in order for Americans to make informed decisions, they have to have some ideas about orders of magnitude with respect to positive benefits.

But if the information they are being given is based on faulty models then they are not being informed, they are being misled (intentional or not). First, Jorgenson's model doesn't say what people claim it does. It does not determine "embedded taxes." It does not discuss the price of consumer products. Second, his model is not designed for short-term analysis. It gives exaggerated results. There are reasons for this. Read the paper I linked to.

I doubt many people would be satisfied with a statement that said "we are confident that prices will come down as we remove the costs associated with the current tax system from the pricing equation. We have no idea how much they will come down, we just know they WILL come down."

So they aren't satisfied. That statement is the most anyone could say. Because nobody has an idea how much they will come down, if at all.

In fact, the 22% is an average. I have seen the chart which shows, by industry, what percentage of the price is the tax system's burden. It will vary slightly (within 4 or 5% from the 22% average) depending on the specific industry involved.

Of course, I've never seen the paper that says 22%, have you? I've only seen 20% (and I've probably seen a later version than you have), and that wasn't modeling the FairTax but a generic NRST.

I think that most reasonably intelligent people know that these are estimates and there is a margin of error, just like there is in political polling. Political polls typically have an MOE of 3-4%. Is our MOE greater than that? Probably. But that doesn't mean that we should not make a good faith attempt to quantify the changes that we anticipate.

The margin of error is ±22%. It's a computer model! One with unrealistic parameters. Did you know his model has no unemployment. Did you realize there is no labor friction. Everyone has a job and they are in the correct job (even though a change this dramatic will cause adjustments in different markets) at the snap of a finger. Does that sound realistic to you? There are other issues with the model.

The goal is to provide the best estimates that we can and let informed Americans use those estimates to make up their minds about reforming the system.

You mean most accurate estimate. (Of course, how would you know if it's accurate? That's why economics is a "soft science." Theories can not be tested and reproduced in the real world.) Jorgenson's result are the best estimates if you want promote the FairTax. Other than that, it's not of much use. If you look at his conclusion he doesn't even mention a particular tax plan and their merits. He was just putting his model to a test. This test has been taken and presented as the gospel, when it is nothing of the sort.

[Your Nightmare]

I didn't misread your post. Quote yourself wherein you asked me to show you an. Or, correct your error

Consider my error corrected. Can we move on now?

[lewislynn]

At best you'll convince maybe 10% of the people on these threads that the FairTax is not the better tax scheme. Even then you'll only convince the most abiding slaves.

Gee you're such an expert at percentages, let's see your math on how prices can be reduced 23%...It's not like I've never asked before or anything.

That's your problem with all this, you're trying to convince someone of something that not only isn't concrete, doesn't exist, never been tried and I'm pointing out the logical conclusions if it were tried...

I've discredited your moron economist's theory using real life experienc, logic and grade school math. Your only counter to that is rehashing previous irrelevant links in previous irrelevant posts and name calling...

If you have something concrete to counter it (no one ever has) let's see it.

[lewislynn]

As a matter of fact, I seem to recall a FairTax basher who swore for several weeks over several FR threads that the rebate was based on income

OOOOH, you really got me there...except the argument wasn't the fairtax it was the Tauzin/Trafficant bill and it was based on income.

Since when is pointing out facts, "bashing"?

[lewislynn]

The proposal is thoroughly documented and explained on websites

Is it? So why is everyone who knows how a sales tax works so confused about the phony 23% rate?

but there is no way to go poof! and magically put that information into someone's head.

And of course correcting them would ruin the disinformation that's working so well and you wouldn't want to hurt their self-esteem.

BTW, I've often wondered and asked, if my posts are such a boost to the cause, why am I not on the ping list?

[Zon]

Can we move on now?

No you may not.

[Your Nightmare]

Can we move on now?

No you may not.

Yes, I can; you, obviously, cannot.

[Zon]

Take what you think is your superior economic intellect and create a thorough anti-FairTax study and use it to convince congress that they'd be making a horrendous mistake if they pass HR25.You're wasting your time here spinning your wheels. The small fraction of people you may convince on these threads does nothing to stop the FairTax from being passed. You'd have to convince millions of people. It would be a much more efficient and effective use of your time for you to convince a few hundred members of congress. If you're right in that the FairTax would cause great harm to the economy and cause many people great financial hardship you owe it to yourself and the American people to use your superior intellect and utilize the most efficient and effective means to stop congress from passing HR25. Stop congress from making that horrendous mistake and you'll be one of the great American heroes.

[Zon]

You're so used to living the slave mentality that you asked me if you could move on. Sheesh!

[GOPJ]

A black market would be one of many unintended consequences. Another would be a more lawless society. Bush needs to work this system in gradually -- to establish the tipping point. When the tipping point is established, he needs to back off a percentage... As is, it would be a disaster.

I have wondered the same thing. Two words for you. Black Market.

[Zon]

Perhaps The Best Reason For Enacting The FairTax

And -- why the slave mentality is anti-FairTax

The FairTax doesn't violate any person's life and property rights. No person, group or government may initiate force or threat of force against any person. The right to life, liberty and pursuit of happiness. 

The income tax is collected/extorted by initiation of force and threat of force. The IRS has financially ruined many innocent taxpayers with impunity. Congress empowered the IRS and allows it to continue harming innocent people. Congress must fix the problem. 

 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:"

It is only the slave that accepts his lot in life that his master may initiate force against him -- that his government-master may imitate force and the threat of force against him. In these more modern days the slave rationalizes in favor of his master not because he -- the slave -- can't be trusted to not do the wrong thing but, that it is other slaves that will do the wrong thing.

With his rationalizations the slave argues in favor of his enslavement.

He argues against the FairTax.

A dire threat perceived by the slave is the person that has rejected the slave mentality and propaganda of the slave masters to instead use his own authority as master of his own life to put government in it's correct place as a servant to the taxpayer. The FairTax honors and respects every persons' life and property rights. The FairTax rejects the slave mentality.

A paradox: honest principle escapes the slave mentality. A commitment to honest principle is a prerequisite for escaping the slave mentality.

[Zon]

I've often wondered and asked, if my posts are such a boost to the cause, why am I not on the ping list?

I figure it's because character is the main determinant

To: lewislynn; phil_will1

For some reason you're more concerned about my merits than I am.

That's soooo obvious. The way you shoot the hell out of your credibility it screams out that you don't care about not having merit. In trademark pipsqueak fashion you wave your arms complaining that people won't respond to your arguments instead of your lack of merit. You're unworthy and earned the scorn cast upon you.

Get a clue. Character counts.

493 posted on 12/03/2004 3:22:21 AM PST by Zon (Honesty outlives the lie, spin and deception -- It always has -- It always will.)

 

[Bigun]

OK. So tell me how a VAT is different to the buyer than a NRST (other than a VAT would probably have a lower rate because it's harder to evade).

Be happy to. A VAT is collected from every set of "hands" that touch a given product throughout it's manufacture and again at the retail level. Even though the rate may be lower, this cascading effect costs the consumer much more in the end and is largely HIDDEN from him in that it is incorporated in the prices of all the various parts required to assemble the the final product. This becomes more and more onerous as we move up in complexity of product which require many sets of "hands" for their manufacture. This is, in fact, what happens today with the corporate income tax which functions as a subtraction method VAT in practice.

The NRST eliminates all that subterfuge and cascading by simply taxing finished products ONE TIME at the point of retail sale, where they all end up anyway, and everyone become acutely aware of the true cost of government as a result!

You knew all of that already though didn't you?

[Your Nightmare]

Be happy to. A VAT is collected from every set of "hands" that touch a given product throughout it's manufacture and again at the retail level. Even though the rate may be lower, this cascading effect costs the consumer much more in the end and is largely HIDDEN from him in that it is incorporated in the prices of all the various parts required to assemble the the final product. This becomes more and more onerous as we move up in complexity of product which require many sets of "hands" for their manufacture. This is, in fact, what happens today with the corporate income tax which functions as a subtraction method VAT in practice.

The NRST eliminates all that subterfuge and cascading by simply taxing finished products ONE TIME at the point of retail sale, where they all end up anyway, and everyone become acutely aware of the true cost of government as a result!

This is a common misunderstanding of a VAT. To the consumer, a VAT would be no different than a NRST. They will see the price, the percentage tax, and tax paid right there on the receipt. Just like a sales tax. The only difference is the collection method.

	Input	Value Added	Total	VAT Credit	"Sticker" Price	29.87% VAT	Gross Payment	Net Tax Paid (Tax - Credit)
Raw Materials	$ 0	$ 155	$ 155	$ 0	$ 155	$ 46	$ 201	$ 46
Manufacturer	$ 201	$ 200	$ 401	$ 46	$ 355	$ 106	$ 461	$ 60
Wholesaler	$ 475	$ 225	$ 700	$ 120	$ 580	$ 173	$ 753	$ 67
Distributor	$ 789	$ 250	$ 1,039	$ 209	$ 830	$ 248	$ 1,078	$ 75
Retailer	$ 1,140	$ 375	$ 1,515	$ 310	$ 1,205	$ 360	$ 1,565	$ 112
TOTAL TAX PAID								$ 360

$360 tax on $1,205 is what you would pay with the 29.87% FairTax; and $360 is the tax that would appear on the receipt, just like the FairTax.

You knew all of that already though didn't you?

Actually, no. Because it isn't true.

[Bigun]

That simplistic chart is your "proof" that a VAT is no different than the NRST? Ha! Ha! Ha!

I won't bother wasting any more of my time with you>

[ancient_geezer]

In the EU, where the VAT is most used and indeed is a requirement for membership, there is no requirement that a VAT must be shown to the general retail customer with the VAT itself is embedded into the product shelf price.

A business will present it on a receipt for its business customers of goods or services for then the VAT amount is required to be stated so businesses can receive credit for payment of the VAT.

For obvious reasons, the full VAT that consumers pay is not a thing many governments like to see their citizens be aware of (one of bad factors of a VAT), thus stating it is not required.

Secondly the costs of compling with a VAT on businesses throughout the production chain remain substantially higher than the costs associated imposition of the single time retail sales tax at only the last stage comprising retail sale. These costs are considerable not only for the accounting of VAT payments to government but of the reporting and tracking requirements that are unique to the proper application of the VAT credit/voucher that the business must effect.

The total consequence is not only is the price retail customers must pay for products elevated by the VAT itself, those prices are also substantially inflated by the costs of the system imposed on those businesses.

 

VAT - Value Added Tax
http://www.direct.gov.uk/*

How is VAT worked out?

When someone charges you VAT they multiply the original, or 'net', price of the item by the VAT rate to calculate the amount of VAT to charge. They then add the VAT amount to the net price to give the 'gross' price - the price you pay.

*** Snip ***

VAT on bills and receipts

Most retail prices include VAT - it is not shown separately. But you may see a line showing VAT on a bill or receipt. This does not mean that you are being charged extra; it just shows how much of the price is made up of tax.

 

 

---

 

An Ugly fact with VATs, it all depends who's thinking about skinning that cat.

Specific proposals by democrats for a VAT in this country to replace the income tax alone, have shied away from use of a credit voucher system. Instead a Gibbons/Hollings attempt to gain support for such relied on cascading a lower stated rate(5%) (tax on tax embedded in intermediate and wholsale stage prices) to the final customer to achieve its goal.

The customer is left thinking 5%, where the reality is substantially higher depending upon how many stages have been required in manufacture and delivery of product to the citizen.

More on the Sam Gibbons' desired VAT

Sam's Amazing $5,000 dream coat: http://www.personal.psu.edu/users/k/u/kuk104/vat.htm

VAT: http://www.personal.psu.edu/users/k/u/kuk104/vat.htm ,

 

[ancient_geezer]

OOPs, lets try those article links again.

More on the Sam Gibbons' desired VAT

Sam's Amazing $5,000 dream coat:
http://www.prospect.org/web/printfriendly-view.ww?id=6407 &

VAT: http://www.personal.psu.edu/users/k/u/kuk104/vat.htm ,