Posted on 01/31/2005 7:12:16 AM PST by bmweezer
Why do these threads degenerate into a 30% vs 23% argument? Can't we discuss the relative merits or downside of this proposal?Because the merits or downsides are different if the rate (tax exclusive) is 23% or 29.87%.
You are confused paulsen, not I.
I'm not "misled", and never have been.Uh, yes you were.
"Nope. You'd pay $10. The NRST only benefits local manufacturing.
Think about how much we import."
Wouldn't the result me that US manufacturing would become more competitive? Therefore more US manufactured goods sold and more US companies started?
As a self-employed businessman, your company purchases are tax exempt. This used to mean that you didn't have to pay that nasty old 6% state sales tax.
Now it means you don't have to pay that 36% "sales" tax. You can save 36% on that second "business" computer, and additional "business" couch, etc. by just presenting your certificate.
Don't worry about the retailer checking real close. He makes the same amount of profit whether that certificate is real or not and, quite frankly, would rather not know.
And, since the massive IRS is gone, who's going to check every little retailer?
I expect the number of small businesses to increase tenfold.
Has anyone figured out the total cost for the prebates and the impact that has on the tax rate? To ask another way, how many % of the 30% (exclusive) tax rate is attributable to the prebate?
SCALEMAN wrote:
Why do these threads degenerate into a 30% vs 23% argument? Can't we discuss the relative merits or downside of this proposal?
Has anyone figured out the total cost for the prebates and the impact that has on the tax rate? To ask another way, how many % of the 30% (exclusive) tax rate is attributable to the prebate?Based on the Farm Bureau analysis for 2001, the 29.87% rate would have been 23.62% without the FCA.
IMO I don't think the word Fair should be used in the same sentence as Tax,what a complete fallacy that is. Here in California for example we pay 18 cents for city taxes and 18 cents for state taxes for Gasoline alone. There's a sticker at every ARCO Station gas pump that states this fact. In a better world, our elected officials, (who really should be addressed as "Official Spenders") should execute much better 'local and national' fiscal discipline.
But since they let the cat out of the bag in the 1930's: "...Most notable and tragic has been the perversion of the "general welfare" clause of the constitution. Article I, Section 8 of the Constitution says:
'The Congress shall have power to lay and collect taxes, duties, imposts, and excises to pay the debts, provide for the common defense, and promote the general welfare of the United States'.
Since the 1930s, the courts have interpreted this phrase to mean that Congress may spend money for any purpose, whether an enumerated power of government or not, as long as legislators deem it to be in "the general welfare of the United States." That is, this innocent clause has become the equivalent of carte blanche spending authority for Congress. The fact that George W. Bush increased spending on such a level in his first dismays me a bit, but I can only imagine the hell the media would've thrust upon him had he actually made a "cut" in anything. It's a sad fact, but it's true.
That would be the result. We can tax imports and get the same result without an NRST.
Either way the consumer loses, but you get your result.
In tax inclusive terms (for those keeping score both ways), that's 23% and 19.1%, respectively.
Imports will now share in the tax burden, and their prices will go up. However, this is a good thing.. The cheap chinese imports have resulted in American products losing market share to the cheap imports, and have forced them to compensate for their loss of marketshare by increasing prices to stay alive, if they are even able to stay alive. Thus to get a good quality product in many cases, it's double the price of the cheaper made products. The FairTax would tend to reverse this trend. So even though the imports will go up, American products would be better able to compete for shelf space, and cunsumer dollars, regaining lost marketshare, and therefore be able to come down in price independent of the other beneficial dynamics involved in the FairTax.
RETAIL services will now be visibly taxed, but they will no longer be burdened by hidden corporate, income, payroll or self-employment taxes.
Also EVERYONE will benefit from the fact that non-retail businesses experience a complete elimination of their tax burden, with no new tax to replace it. That dynamic is true for every node in the entire production tree up unto the actual point of sale. Any argument that prices can not go down unless wages increase in entirely inapplicable to non-retail businesses. Everything leading up to the point of sale is able to directly reduce their prices by the same rate as the tax to gross receipts they would have paid under the current system, without altering profits or wages.
Also, because compliance costs are removed as well, more so from some than others, but a net reduction in costs (or a net increase in productivity), there is an additional benefit, at every point of the production tree up unto the point of sale.
Further, individuals would benefit, not only from the decrease in SS payments or Self Employement tax, but income tax as well.
The only point where it is arguable that wages would have to be reduced to their net, is at the retail level. However, this depends on to what degree the reduction of the tax burden for all business will cascade through the production tree in the form of lower prices.
Really? I thought it was labor costs, the costs of U.S. regulation, and potential litigation costs.
"Everything is good except work. Trying to fill 4 jobs is not easy."
Good to hear and I know what you mean. If I wanted to move to equador, I'd send you my resume.
Maybe I am wrong but I thought the worker at the Chinese sofa factory made slightly less per hour than the factory worker in the US.
LOL!
"...We can tax imports and get the same result without an NRST...."
We are a member of the World Trade Organization. Any attempt to tax imports alone, without the authorization of the WTO, will result in crippling retaliatory tariffs being imposed on exported US goods.
Please Google: "GATT" "Uruguay Round" and "World Trade Organization" For kicks, you may also want to investigate the Organization of Economic Cooperation and Development...they would also have something to say about unilateral imposition of import tarriffs. We've been a member of the OECD since 1973, if memory serves....WTO since it's inception in 1995. Also google "Smoot-Hartley Tariff Act" for a history of tariffs vis a vis internal taxation.
I don't understand. Why would they up? And why is that a good thing?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.