Posted on 02/13/2005 10:41:05 AM PST by nsmart
The FairTax is the non-partisan national sales tax proposal that would replace all federal income taxes. These include personal, estate, gift, self-employment, alternative minimum, capital gains, FICA, and corporate and death taxes.
(Excerpt) Read more at WWW.FAIRTAX.ORG ...
No. An item is new until tax has been paid on it... irrespective of buttons... it is new until it's taxed and once it's taxed it's used.
OK, it has to do with the new sales tax I now have to charge my customers. On $7.5 million in sales, I have to charge my customers $2.25 million in sales tax. Under NRST, I would have to cut my costs $1.725 million so I can charge my customers the same gross amount. I look at all my compliance costs, I look at all my payroll taxes, I look at all my subcontractors taxes, and there is no where close to $1.725 million to save. Absolutely impossible. Under NRST there is no way around me having to charge customers a lot more to buy a new house. And I mean a LOT more.
When you buy a used shirt, make sure you get the original sales receipt which shows that the sales tax has already been paid. Under the NRST, the consumer is liable for tax unless he has the appropriate reciept showing he paid the sales tax to a properly licenced business.
You stated that the black market would hurt the economy. You used the term "legal businesses" when describing the business that would be harmed. I'm asking you, if you believe that a black market will mean manufacturers of products would be operating outside of the law.No, since the tax would be collected at retail, manufacturers won't even have an opportunity to "operate outside the law."
If your vendors don't adjust price, find one who will. Just like today, you manage decisions on cost. Vendors will adjust their prices or lose business. Vendors will have cost cuts too - and so will their vendors and labor, and all of them will have analagous savings, and so on until the beginning of the chain. And your business purchases are not taxed...neither are the business purchases of your vendors or their vendors or their vendors' vendors....
Whatever adjustments you are forced to make in price will be the same adjustments other builders must make. The whole world isn't coming after always right to put him out of business.
THe overall economy will have stable prices - those products with longer production chains will save more - those products with fewer links in the production chain will save less - but it will be the same for all in the sale of that good.
The consumer is liable for payment of the tax - but the consumer doesn't keep receipts for tax purposes anymore. It is the business that keeps receipts.
Seems you've got two things mixed up here. The isn't any more revenue agents coming after individuals - only business.
I think so but I don't know. The last bill I was familiar with was Dick Armey's flat tax proposal.
Not true. What does the bill say:
SEC. 509. RECORDS.
`Any person liable to remit taxes pursuant to this subtitle shall keep records
and just who is liable according to the bill:
(d) Liability for Tax -
`(1) IN GENERAL- The person using or consuming taxable property or services in the United States is liable for the tax imposed by this section, except as provided in paragraph (2) of this subsection.
`(2) EXCEPTION WHERE TAX PAID TO SELLER- A person using or consuming a taxable property or service in the United States is not liable for the tax imposed by this section if the person pays the tax to a person selling the taxable property or service and receives from such person a purchaser's receipt within the meaning of section 510.
So don't be throwing those receipts away anytime soon, because it is your burden to produce them if asked!
You're confusing liability for the tax itself with liability for remitting tax receipts. They are not the same thing.
"Used" is a short-hand definition. What is actually the subject is whether or not the item has been taxed for retail sale in the past -- if yes, then it is not taxable on resale, if no, then it is.
In your example, the "used" DVD player would be subject to the tax, because it had never been previously taxed.
So a business that is liscensed to purchase goods for retail sale, therefore without the sales tax, would risk that liscense to sell the goods cheaply. Is that your premise?
Don't you think it would be easy to identify a retail liscensee that never submits any tax?
It only becomes used after the tax is paid.
What you posted is what I said. THe consumer is liable to pay the tax. WHat makes you think you as consumer will have to keep receipts? Are you thinking about today's system where we do indeed have to keep receipts?
There is nothing in the bill that limits audits to business. Anyone liable for tax, which includes consumers, can be audited and penalized. There is no protection for consumers. Here's another interesting bit out of the bill:
`SEC. 506. BURDEN OF PERSUASION AND BURDEN OF PRODUCTION.
`In all disputes concerning taxes imposed by this subtitle, the person engaged in a dispute with the sales tax administering authority or the Secretary, as the case may be, shall have the burden of production of documents and records but the sales tax administering authority or the Secretary shall have the burden of persuasion.
So there is nothing from stopping the government from asking for your papers, and you have the 'burdon of production of documents"! I think you may just be a little mixed up on what exactly this bill does.
Wrong. Anything produced under our income tax system has already been taxed. It's those pesky production chain taxes passed thru to final consumer.
If you are liable for tax, you have the burdon to produce the documentation. There are no excepts for individuals. The bill is as clear as can be. "Let me see your papers" is all the government has to do.
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