Posted on 01/31/2005 7:12:16 AM PST by bmweezer
Actually the mechanism for collecting a sales tax is already in place, and very easy for businesses to comply with. It takes me no more than 15 minutes to compute my 'sales tax owed', complete the forms and write the check each quarter for my business. This is on the State level, but it would be no more complicated at the Federal level. Compare this to the time and money it takes me to fill out all the appropriate forms to collect, report and forward Federal Income Tax, Social Security Tax, Medicare Tax, distribution of W-2 forms at the end of the year, 1099's prepared etc etc and you can see why a business might be interested in the sales tax end.
When I first saw this proposal, I was against it. Then I read ancient_geezers posts, and Chief Negotiator, and Taxman's. I looked and learned.
I learned that it may not be perfect, but it is damn good.
I learned that if we are going to control the leviathon that we have to make the cost of it visible and nothing does that better than the FairTax. I learned that the rate, though a lot higher than I would like to see, accurately shows the cost of government.
I believe that that when we don't allow Congress to wield power by controlling the tax code, that it won't be as much fun for them and they'll go home sooner. Half of all lobbying dollars in DC are spent to influence the tax code and there are lots of dollars being spent.
And getting rid of the IRS is the sweetest icing I've ever tasted.
On domestically produced products only.
How much of what we purchase on a daily/weekly basis is imported?
Nonsense. The FairTax base is on GDP, which excludes activity not reported (income and current sales tax evasion), not on the income tax base.
Current income taxes take in 17.6% of GDP (scary, but that's the fact). To be revenue-neutral using a static analysis (welcome to the wonderful world of the CBO), the NRST would have to take in 17.6% of GDP.
The only way your argument makes sense is if you can show that total evasion would increase. But you can't, so you put up the strawman of just sales tax evasion increasing.
Presently, our goods are taxed before being sold overseas, at every level of manufacture. This represents a subsidy, by American taxpaying manufacturers (and potential American purchasers of the goods) for the benefit of foreign markets. The American taxpayer pays both the domestic taxes embedded in the manufacturing cost of exported goods, AND the foreign taxes on imported goods (embedded in the price).
How is that fair? Get rid of all except the domestic end retail sales tax, and our goods would be more competitive in price overseas.
Even better for you, the business owner: You get to keep a credit as compensation for the burden of being tax collector for the government.
Been audited twice. Both times I was doing my best to comply with code. Both times IRS ruled against me and actually showed me my error hidden in the depth of the gawdaful 'code'. And with the IRS you are guilty until you prove yourself innocent. And furthermore, even if there was no intent to defraud, you are still liable for interest and peanalties, so as a business owner, I have no choice but pay out the A** for an accountant to prepare my taxes now.
See my #532. 35% is extremely overboard, the actual revenue-neutral rate (in the absense of FCA or other credits) is a hair under 21%. The additional credits bring the rate up to 23%.
"NRST is voluntary in that you can choose not to spend your money and choose to save it instead."
Also, buying used items is another way to not pay taxes.
Look at the whole picture:So taxes are 20-25% of prices and 20-30% of income?
Presently, the cost of imbedded taxes raises prices 20 to 25%.
Presently, the feds take 20 to 30% of your INCOME.
That is how the income tax started out, look where we ended up.
Good point.
The cost of imbedded taxes is larger than just the taxes paid -- it includes complaince costs, lost opportunity costs, higher interest costs, and so on, none of which shows up as federal tax revenue, yet still shows up at the cash register.
THERE IS NOTHING TO STOP THEM NOW FROM DOING WHAT YOU FEAR. WHY HAVENT THEY?
I was leaning more that way myself, until I started reading the information provided to me here today. Now I'm not so sure.......
And the only way I would support a federal sales tax is if the government was no longer concerned with how much money I earn - ....
.....for just this reason.
......which will never happen.
Of course you are correct, because under either system the states will still know how much you earn and can easily share the info with the feds.
There are aspects of both proposals that I really like and some that I'm not crazy about...but anything has got to be better than the burden we are currently under.
I am all for a tax system that will promote business creation which in turn creates jobs which then creates productive members of society. All of which generate increased tax revenue fo rthe government. But I want the systems to create incentives (mandates) for decreases in government spending (read paperpushing bureacratic jobs), thus not only spreading the burden among more people, but lowering it for all.
I think I am being conservative at 35%.See my #532. 35% is extremely overboard, the actual revenue-neutral rate (in the absense of FCA or other credits) is a hair under 21%. The additional credits bring the rate up to 23%.If you include the federal government paying themselves a tax. If you do, then you need to raise more revenue or tell us how you are going to cut ~40% of government spending across the board (defense, homeland security, etc.).
What about the taxes paid by the retailer, the trucking firm, the importer, etc.
I sincerely hope you are right!
Do you know or understand the difference between 'retail' and 'wholesale'? What you have described is a VAT (Value Added Tax) which is nowhere near the National Retail Sales Tax that is being discussed here. Please educate yourself before you post such tripe.
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