FairTax.Org HR25

WWW.FAIRTAX.ORG ^ | Last Week | Thomas Leser

[antaresequity]

Corporations should never pay income tax. It cost the corporation nothing, as the cost is past on to the consumers of the corporation's products or services.

The only entity paying taxes should be the individual.

Only then will we have true tax reform.

[Iwo Jima]

As with any taxation abuses may occur.

Why is that an "abuse"? It sounds exactly what any good businessman would do. It's the kind of tax avoidance that I or any reasonable person would do.

While it is proposed that the IRS be abolished there would necessarily be an enforcement arm of the new entity. Such an overt abuse as driving a car around the block and selling it as used would and should be actionable, IMHO.

So we're back where we started, eh? Just what "action" do you propose be taken against people who arrange their affairs so as to not pay the tax. Put them in jail? Take away their house? Put them through an audit to make sure that they are paying their taxes correctly?

And this differs from the current situation, how?

[phil_will1]

"WalMart may not risk a 'sanction,' but you have to admit that there would be countless other people selling things -- say in WalMart's parking lot -- that WalMart sells, but for 30% less. And that many consumers would prefer to buy the same or a comparable item for 30% less."

Oh boy, here we go again with the tax reform urban legend about parking lot venders operating in broad daylight that will just be impossible to catch. As if anyone driving around a shopping center can't figure out what is going on. Get serious.

Are you going to bring up your fear of smuggling real estate across the borders to avoid the sales tax, also? That was brought up on a previous thread.

Let's put this into perspective. Will there be a different set of compliance issues with a sales tax than we have seen with an income tax? Of course. Will they be of greater magnitude or likely to create higher rates of non-compliance than we have now? Of course not.

The FairTax isn't perfect. It is just the best tax system that anyone has come up with in the 200+ years that this country has been in existence. For many of us, that is good enough for now. You can work on a perfect system and when you get it all done, all of us will applaud you and probably work to help you get it implemented.

[CSM]

How is the sales tax on the new home the same as taxing your business expense? A couple of posts ago, you claimed that your expenses would go up. That is different than your current post claiming your sales will go down. I think for the sake of this discussion they need to be kept seperately. So for clarification:

Are you stating that your business costs will go up? Why?

Are you stating that your sales will go down? Why?

[CSM]

"The NSRT would cause a huge black market and disruption to our economy and society."

How? I think the economy would still thrive, the government might be hurt but I don't equate the economy with government revenue.

[phil_will1]

"What is the WTO going to say when we point out that we are taxing imports exactly the same way that we are taxing our own production? Are they going to argue that we should reinstate the preference that our old tax system gave to imports?"

"When it comes to the WTO and making anti-American rulings, nothing is too ridiculous."

You didn't answer my question. Please try again.

More to the point, your argument seems to be that we can't do anything to eliminate the bias in our tax system in favor of foreign producers because the WTO won't let us. Are you sure you want to take that position?

[CSM]

"It would be no time at all before the "prebate" would have to be raised because "people can't live on that low amount."

Or it would be no time at all before the realization would be made that the tax rate would go down if the pre-bate was eliminated......

[Always Right]

This is the exact situation we're in today.

But that is not the case. That is not the situation. I know my compliance costs, I know my taxes, I know what I pay my suppliers and subs and employees. Eliminating all the other taxes just won't bring my costs down that much. It may for some businesses, but I know my business better than any pointy-headed proffessor and no matter how many times you say otherwise. A NRST will kill the housing industry, end of discussion.

[Your Nightmare]

Oh boy, here we go again with the tax reform urban legend about parking lot venders operating in broad daylight that will just be impossible to catch. As if anyone driving around a shopping center can't figure out what is going on. Get serious.

Have you ever heard of eBay? The majority of stuff bought on eBay isn't used. It's sold by someone who sets up a "store," buys wholesale, and sells for a little less than retail. I've bought several newe electronics off of eBay.

Of course, if they sell to someone in their own state they charge a sales tax. {wink} {wink}

[phil_will1]

"And this differs from the current situation, how?"

Well, for starters, we would be replacing a 60,000+ page system with one that is a couple of hundred pages long. IOW going from a system that noone understands to one that anyone could. That is more than a 98% simplification.

Second, the points of collection/enforcement would be reduced by about 90%,making possible much higher compliance rates with far fewer resources.

Third, individual citizens would no longer have to inform the federal governemnt of every detail of their financial affairs annually.

That's not bad for starters.

[Always Right]

More to the point, your argument seems to be that we can't do anything to eliminate the bias in our tax system in favor of foreign producers because the WTO won't let us. Are you sure you want to take that position?

It is a legitimate possibility. The main reason I can see to go to a NRST is that it would make our products more competitive by driving the costs of imports up. Driving the costs of imports up will be inflationary, but it will be a boost to our products. The EU and other countries will respond by changing their tax system and/or fighting the NRST in the WTO. I wasn't saying we can't do anything, but there will be responses by other countries we should consider.

[Principled]

So this so-called "prebate" means that everybody gets or at least is entitled to a monthly government check.

I call it a prebate - I don't know that it's "so-called". Others call it a demogrant, the legislation calls it a rebate. Perhaps the best way for you to think of it is rebate or refund. It's not a government check - it's your money. It's nothing more than a refund of overpaid taxes. Why do you think refunding overpaid taxes is socialism? Isn't it a reduction in tax paid?

Why would you think lowering taxes is socialism? You wouldn't be against the nrst for some other reason that you don't want to share, would you?

[Your Nightmare]

How? I think the economy would still thrive, the government might be hurt but I don't equate the economy with government revenue.

Because the rate will have to be adjusted up to account for evasion. If the rate goes up, the economy suffers.

The current income tax rate is higher than it would be without evasion but the proposed FairTax rate does not account for an increase in sales tax evasion. The FairTax rate would have to be adjusted higher if ever implemented.

[This is where some FairTaxer comes in and blows a bunch of smoke about how the FairTax rate does account for evasion. It doesn't account for an increase in sales tax evasion, which there certainly will be with a 4x increase in the sales tax rate.]

[Always Right]

Are you stating that your business costs will go up? Why?

Are you guys really that dense? I have gone over the numbers so many times I am blue in the face. You guys seem to think a 30% sales tax is some holy grail. Sorry but there are REAL problems going to an NRST. Some sectors of businesses will be hurt. Compliance will be a real problem. There is no intellectual honesty in this debate on your part. The NRST is no holy grail, it is just a tax system that moves around how things are taxed. Good for some, bad for others.

[Iwo Jima]

You are exactly right. The NRST would create the biggest black market and police state that you could ever imagine. It would be the IRS on steroids.

[CSM]

Even if the evasion increases 4x, how does that hurt the economy?

[Always Right]

Because the rate will have to be adjusted up to account for evasion. If the rate goes up, the economy suffers.

And the GREAT thing about the NRST, free tax increases! When revenues are short, the NRST automatically kicks in and the sales tax goes up! Yippiieee!

[CSM]

How about answering the question instead of calling me dense?

Is your position that your costs will increase? Why?

Is your position that your sales will decrease? Why?

[CSM]

"And the GREAT thing about the NRST, free tax increases! When revenues are short, the NRST automatically kicks in and the sales tax goes up! Yippiieee!"

Is it easier to increase taxes on 50% of the population or on 100% of the population?

[Your Nightmare]

How? I think the economy would still thrive, the government might be hurt but I don't equate the economy with government revenue.

Maybe because "prebate" is a made up word?

Others call it a demogrant,

Technically that's what it is.

the legislation calls it a rebate.

It's not a rebate.

Perhaps the best way for you to think of it is rebate or refund. It's not a government check - it's your money.

No, it's a government check sent to every legal resident regardless of how much they pay in sales taxes (if at all). Anyone spending below the poverty level (which is basically everyone in poverty) is getting back more than they spend in sales taxes. How is that a "rebate"?