FairTax.Org HR25

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[Principled]

But anyone who is liable is responsible for remitting tax.

No - consumers are liable for the tax. Those who collect tax are the ones who remit to the state.

[Always Right]

Could have fooled me. In order for the provisions of this section to be invoked, there has to be some grounds for a dispute. The only way there can be a dispute is if the entity is liable for oversight in the first place. The only entities liable for oversight are those required to file reports -- retail sellers and certain special cases. Not everyday people buying retail goods and services.

LOL, you are really grasping for straws. All they have to do is think you are liable, and you can be audited. That is what the bill says. And there is no restrictions on who they can ask to produce document.

[Always Right]

Yeah! LOL - I'll send you cards in jail. THe law don't like defrauders - especially tax frauds.

Where is the fraud. I can set up a business selling Kool-Aid, and claim my brand new house is a Kool-Aid stand. May not be the smartest business, but it is a business and should qualify.

[Always Right]

No - consumers are liable for the tax. Those who collect tax are the ones who remit to the state.

Only if you bought it from a legitimate retailer who gave you a reciept. If the new and improved tax collection agency thinks you bought it black market, they have every right within the framework of this bill to ask you for the receipt, and you better have it as it is your burden. Really, keep your receipts.

[kevkrom]

All they have to do is think you are liable, and you can be audited. That is what the bill says.

No, it isn't. It says that you are liable for producing "records" in case of a "dispute". Record-keeping is further defined in section 509, which, I will note says nothing about receipts received by an individual making a retail purchase. Show me where -- in the bill -- that a "dispute" covers a private individual involved in normal retail purchases, and then we'll talk. (Not that I'll be holding my breath...)

[kevkrom]

Where is the fraud. I can set up a business selling Kool-Aid, and claim my brand new house is a Kool-Aid stand. May not be the smartest business, but it is a business and should qualify.

Surprisingly, you're wrong again. If you are using the house as your residence, it is not a "business" expense. Try doing the same thing under the income tax (the "home office" deduction) and see how far you get. Using a business to provide an individual with consumption goods or services is not allowed, and the fair market value of those goods and services would be used to assess the tax due.

[Principled]

All they have to do is think you are liable, and you can be audited.

No, that would be today's IRS.

[ancient_geezer]

No one says a business has to be profitable.

Your right they just need to be able to show they are doing business an not just a Hobby,

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

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`SEC. 701. HOBBY ACTIVITIES.

`(a) HOBBY ACTIVITIES- Neither the exemption afforded by section 102 for intermediate sales nor the credits available pursuant to section 202 or 203 shall be available for any taxable property or service purchased for use in an activity if that activity is not engaged in for-profit.

`(b) STATUS DEEMED- If the activity has received gross payments for the sale of taxable property or services that exceed the sum of--

`(1) taxable property and services purchased;

`(2) wages and salary paid; and

`(3) taxes (of any type) paid,

in 2 or more of the most recent 3 calendar years during which it operated when the business activity shall be conclusively deemed to be engaged in for profit.

state sales tax auditors like to check for little things like that. Seems auditors are expected to look for things like sales, wages, taxes paid, you know, all the little things a business does.

I could drive a Mack Truck through that loophole, or atleast an SUV for my wife.

Under an income tax that might work in declaring an exemption for awhile, 10 times as many filers to check on, but sales taxes have fewer filers, do not use expemption, and those state auditors look for sales, purchases and evidence of what are claimed to be "business" assets are actually used for.

So have at it, if you get away with it more power to yah:

Federalist #21:

"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess.

They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue."

When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four."

If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds.

This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.

[Principled]

Really, keep your receipts.

No, it's today's IRS that requires individuals to keep receipts.

[Iwo Jima]

You don't know much about the bill yet - that's fine. You'd do well to take a look at it.

You might want to read the bill as well. You have previously stated that "used property" is any property on which tax has been paid. However, the bill in Section 2. Definitions (a)(16)defines USED PROPERTY to mean (A) property on which the tax has been collected AND "B) property that was held other than for a business purpose(as defined in section 102(b))on December 31, 2006."

So, houses, cars, and other non-business property existing as of 12/31/06 would never be subject to the NRST. Correct?

[Principled]

What you posted is what I said.

[kevkrom]

So, houses, cars, and other non-business property existing as of 12/31/06 would never be subject to the NRST. Correct?

That is exactly correct, and is not at odds with what Principled says -- items purchased prior to the NRST enactment date are considered "previously taxed", because they were already subject, directly and indirectly, to the income and payroll taxes.

[Your Nightmare]

You might want to read the bill as well. You have previously stated that "used property" is any property on which tax has been paid. However, the bill in Section 2. Definitions (a)(16)defines USED PROPERTY to mean (A) property on which the tax has been collected AND "B) property that was held other than for a business purpose(as defined in section 102(b))on December 31, 2006."

The new version of the bill specifically says "or," not "and." This is the only difference in this version of the bill.

[Iwo Jima]

Are the following goods/services taaxable under the NRST:

1. Tuition,

2. Insurance,

3. Health care,

4. Utilities,

5. Annuity payments,

6. Pensions,

7. Social security, and

6. State or local taxes.

I have my intepretations, but I wanted to know what yours are.

[Iwo Jima]

Then there would be a mad rush to stock up on everything before 12/31/06, with a depression-like slow down afterward. Think of Y2K but much bigger.

[ancient_geezer]

This is for those who collect and remit - retailers. There is nothing indicating individuals need receipts.

If they get that warrant first they may inquire but no warrant no lookee for the individual not engaged as a certified business.

Unlike the current federal tax statutes, presumption of innocence and presumption of lawful behavior are explicitly required of the state tax autorities in HR25, above and beyond Constitutional 4th & 5th amendment protections the federal IRS is so ready to ignore:

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

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`SECTION 1. PRINCIPLES OF INTERPRETATION.

`(a) IN GENERAL- Any court, the Secretary, and any sales tax administering authority shall consider the purposes of this subtitle (as set forth in subsection (b)) as the primary aid in statutory construction.

`(b) PURPOSES- The purposes of this subtitle are as follows:

• `(1) To raise revenue needed by the Federal Government in a manner consistent with the other purposes of this subtitle.

• `(2) To tax all consumption of goods and services in the United States once, without exception, but only once.

• `(3) To prevent double, multiple, or cascading taxation.

• `(4) To simplify the tax law and reduce the administration costs of, and the costs of compliance with, the tax law.

• `(5) To provide for the administration of the tax law in a manner that respects privacy, due process, individual rights when interacting with the government, the presumption of innocence in criminal proceedings, and the presumption of lawful behavior in civil proceedings.

• `(6) To increase the role of State governments in Federal tax administration because of State government expertise in sales tax administration.

• `(7) To enhance generally cooperation and coordination among State tax administrators; and to enhance cooperation and coordination among Federal and State tax administrators, consistent with the principle of intergovernmental tax immunity.

`(c) SECONDARY AIDS TO STATUTORY CONSTRUCTION- As a secondary aid in statutory construction, any court, the Secretary, and any sales tax administering authority shall consider--

• `(1) the common law canons of statutory construction;

• `(2) the meaning and construction of concepts and terms used in the Internal Revenue Code of 1986 as in effect before the effective date of this subtitle; and

• `(3) construe any ambiguities in this Act in favor of reserving powers to the States respectively, or to the people.

[Iwo Jima]

You previously stated (at least I think that it was you) that real estate would not be taxed, but as I read the bill, it is not excluded and seems to be included. Tell me why you think that real estate or land would not be subject to the NRST.

[kevkrom]

1. Tuition

No. Tuition is specifically exempted and is treated as an investment.

2. Insurance, 3. Health care, 4. Utilities

All yes. These are retail sevices.

5. Annuity payments, 6. Pensions, 7. Social security,

No, these are all income sources, not services. There may be certain fees with annuity payments and pensions that are are taxable services, however.

and 6. State or local taxes.

No. The NRST does not tax taxes.

[Principled]

Just look in the bill.

[kevkrom]

You previously stated (at least I think that it was you) that real estate would not be taxed, but as I read the bill, it is not excluded and seems to be included. Tell me why you think that real estate or land would not be subject to the NRST.

I think you must not be reading my posts quite correctly. Land is property that has been previously taxed (there is no such ting as "new" land), and is therefore exempt from taxes. Structures built on that land can be taxable, but structures existing as of the NRST switchover date would be considered "previosuly taxed", and not subject to tax on resale.

However, the price of a new home would be taxable, minus the value of the land it sits upon. Example: I buy a new house for $200,000, the assessment says the land is worth $120,000, therefore only $80,000 is taxable.