Posted on 01/31/2005 7:12:16 AM PST by bmweezer
"An NRST would actually be a financial boon to retirees and those close to retiring when it is implemented. It would instantly make their 401(k)s, IRA, and Pensions 100% tax free!"
Even more than that, the stock market will take off.
I don't see you accusing anyone of anything. I just didn't understand a particular post.
Don't include me in a specific debate with another poster.
I have no clue what your post said. My line of question marks was meant to indicate I didn't understand.
I have had none of my questions on this thread blown off by anyone, I would like to think you would be willing to follow the trend.
"Why not just do a flat tax? Why is that so difficult?"
It isn't that it is difficult; it is that the flat tax doesn't address most of the economic problems that the FairTax would and history shows that it wouldn't stay flat very long. After all, it is still a flat INCOME tax.
Okay then, since you won't explain it I will. It's like discount verses interest. If you have a payment due that is, say, 25% on a purchase, what is your charge? Here is a good example: If I buy a treasury bill due in one year at a discount rate of 10%, I pay 9000 dollars for a 10,000 dollar treasury bill and at the end of the year I get back 10,000 dollars. But in reality, I am only investing 9,000 dollars to earn 1,000 over that year. Hence my actual rate of interest is more than 10%.
So if I go into a store and plop down 100 dollars for a television set, I am not going to be charged 123 dollars under the fair tax, I am going to be charged 130 dollars. That is the gross payment minus 23%. That is my understanding. Is it correct? lewislynn?
With all due respect, I say your post are difficult to comprehend with all the lines and such. Just a suggestion. I can't tell what you are arguing.
So if I go into a store and plop down 100 dollars for a television set, I am not going to be charged 123 dollars under the fair tax, I am going to be charged 130 dollars. That is the gross payment minus 23%.
That is my understanding. Is it correct?
Anyone?
______________________________
And, if that is correct, why is anyone even saying that that the proposed Fair Tax rate is 23%, if it is in fact 30% ?
"I'm not exactly sure who determines the poverty level..."
DH&HS - Dept of Health and Human Services
Is your question always a string of question marks?
The NST is really a tax "of the gross payments" including itself (and everything else in "the gross payments").
The 23% rate thrown around is (intentionally) misleading.
The 23% rate in sales tax terms is actually 29.87%...An item sub-totalling $100.00 before the federal tax would cost $129.87 (gross payment)
$29.87 is 23% of $129.87 (gross payment)
The fairtax shills will declare to their death that "gross payments" doesn't really mean "gross payments". The wording of the legislation and the defintion in the legislation proves otherwise..How could it not?
It isn't a simple sales tax like you might have in your state.
groanup wrote:
With all due respect, I say your post are difficult to comprehend with all the lines and such. Just a suggestion.
I can't tell what you are arguing.
"On the other hand, I think a flat tax is much easier to administer."
The leading flat tax proposal doesn't replace anything - it adds another option in computing your INCOME taxes. That means that the entire 60,000 page system would remain in place and would be added to. There would be three income tax calculations
1. current progressive
2. AMT
3. new flat tax
Do you really think THAT would be easier to administer than a simple, flat rate sales tax which is documented in a little over 100 pages?
Now I'm even further confused.
I really have no clue what you're talking about.
The 23% rate thrown around is (intentionally) misleading.
The 23% rate in sales tax terms is actually 29.87%...An item sub-totalling $100.00 before the federal tax would cost $129.87 (gross payment)
$29.87 is 23% of $129.87 (gross payment)
It isn't a simple sales tax like you might have in your state.
811 lewislynn
It's not what I say, or you say, or what the fairtax website says...
The wording of the legislation is:
`(b) Rate-`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.
Because the rate is calculated "of the gross payment" the actual rate you pay on the item(s) could be considerably more than 29.87%...
If you don't beleive me, for example, add 30% to the price of a gallon of gasoline...Or your phone bill...How much tax on tax is that?
It is if the $130.00 includes all other required state/local/federal taxes, fees, excises etc. In other words if the $130.00 in your scenario is "the gross payment" you're correct..If not, no you aren't correct
"That all being said, do you think that people will make their old toaster and towels do rather than spending more for a new set? Repair and recover furniture rather than buy new stuff? Engage in an orgy of new spending on household goods and other taxed items immediately before the tax comes into play, thereby keeping their budgets down for years to come? How about cars and new houses?"
The economic study of the FairTax did show that consumption would decline in the first year after implementation, but consumption growth would be higher from that point forward, owing to a faster growing economy. Consumption would catch up to where it would have been by the third or fourth year and be higher from that point forward. Even in the first year, the net decline in consumptuion would consist of a significant decrease in the consumption of imports, partially offset by an increase in the consumption of US produced goods.
Because of a huge decrease in compliance costs combined with the elimination of the disadvantage that our current tax system places on US production, GDP growth in that first year would be a smoking 10+%. It would decline each year but would level out at a fraction of a percent higher than under a continuation of the current system. By the time that happened, the economy would be 1/4 to 1/3 larger than it otherwise would have been.
29.87% of what?
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