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 ...
`(b) TAX PAYMENTS DATE-`(1) GENERAL RULE- The tax imposed by this subtitle during any calendar month is due and shall be paid to the appropriate sales tax administering authority on or before the 15th day of the succeeding month. Both Federal tax imposed by this subtitle and confirming State sales tax (if any) shall be paid in 1 aggregate payment.
Then I saw this in the paper I posted last night:
Second, it entices states to be collecting apparatuses, by allowing them to keep one-quarter of 1 percent of the revenue collected if they choose to conform the state tax base to the federal base and administer the federal tax.
The federal base is a tax "of the gross payment" so here's what would have to happen to send an aggregate payment of both taxes being "of the gross payment"
Under their "cooperative agreement" and both tax bases being "of the gross payment" there would have to be a combined federal/state tax rate.
The federal rate ("23% of the gross payment" the first year) plus a state rate of say 6% "of the gross payment". Making a combined federal/state tax inclusive rate of 29% (of the gross payments).
29% tax inclusive in real sales tax terms would be a combined federal/state tax rate of 40.85% (29/71) tax exclusive.
It just keeps getting uglier.
Since states will be forced to eliminate their income tax and combine it with the sales tax they already have, it will make for a larger rate, although since the base of taxable goods will be larger (most states don't tax food and housing) the added rate probably won't be as high as 10%. I would guess it would typically be in the 6-8% range, resulting in a total sales tax of slightly more than 35%. Yes, very ugly.
A useful point about the immediate source of payment of the compensation paid not being taxed where taxation in regard income received is concerned, the cites will be useful in other contexts. That however and has little to do with the fundamentals that I was expressing.You are a real piece of work...
I would guess it would typically be in the 6-8% range, resulting in a total sales tax of slightly more than 35%. Yes, very ugly.We don't have an income tax here in Texas and my state and local tax totals 8.25%.
Some of that will be mitigated by the larger tax base (food, new housing, rents, internet sales etc.) that now go untaxed in most states. 6-8% may be low for some states, but a reasonable guess without crunching a ton of numbers.
Some of that will be mitigated by the larger tax base (food, new housing, rents, internet sales etc.) that now go untaxed in most states. 6-8% may be low for some states, but a reasonable guess without crunching a ton of numbers.I actually don't think states would be inclined to go with the wider tax base because it would make their taxes more regressive. They would have to set up some sort of state-wide FCA.
"But under the current system all the taxes are embedded into the cost of goods anyways, so it still gets taxed once the prostitute spends her money."
Any tax, all taxes need enforcement. Why are you fixated on this poor prostitute? Let the poor woman ply her trade in peace.
Do you really think the federal government's need to track the individual income of each and ever worker is anywhere near as simple as collecting a sales tax?
NO not ALL taxes are embedded in the cost of goods, only the taxes of EVERY business venture which has touched the production of a given item throughout it's production cycle and ALL the costs associated with complying with them are embedded.
The problem is the NRST claims some huge benefit, when the facts show otherwise. Both systems says the prostitute/drug dealer owes tax, either income tax or sales tax. Under both systems, neither pays the tax required, but if they do spend their ill gotten money legally, then both systems re-coup some of the lost revenues. The point was both systems are similarly cheated, and for someone to claim one system now taxes these people is a lie. Illegal activity remains untaxed activity under both.
As usual, it is YOU who doesn't "get it"! Let me see if I can explain.
Current system: John Doe and nine of his buddies visit Miss Mable down the street and pay her for her "professional services". Most of those guys probablably earned their incomes by legal means and have been taxed on it but Miss Mable and her pimp PAY NOT ONE RED CENT other than those embedded in the prices of products which her customers also pay when they buy those products.
NRST: John Doe and nine of his buddies visit Miss Mable down the street and pay her for her "professional services". ALL of them pay with money not previously taxed and Miss Mable and her pimp pay when they make purchases of LEGAL goods and services, which now do not have embedded upstream taxes and compliance cost as a component of their price, JUST LIKE JOHN DOE AND HIS NINE BUDDIES DO!!!
GET IT NOW?
And in reality, I don't think there is a huge difference. Every sales transaction is now a taxable event. Purchasers and sellers must keep an account of all their transactions. Purchasers may not have to report all those transactions, but they better be keeping all their official section 510 reciepts with all the seven peices of required information on it that prove they paid tax on all their purchases. For employees, a 1040 EZ form really is not all that much harder than the paper work they have to fill out to get their monthly rebate check. And if Purchasers do make a purchase where they do no get an official section 510 receipt, then they have to files a monthly report all those transactions and submit the tax.
And that is not even going into the complexities of dual-use items, which are used for both personal and business use. And then you have rules for converting business use items to personal use items. Then you have a huge debate over which items are business use items and which are personal use. The current NRST definitions are vague enough where everyone would be stupid if they don't set up a business and try to avoid a 30% sales tax. Certainly I can come up with a business where I use a car so I don't have to pay an extra $10,000 for sales tax.
NRST: John Doe and nine of his buddies visit Miss Mable down the street and pay her for her "professional services". ALL of them pay with money not previously taxed and Miss Mable and her pimp pay when they make purchases of LEGAL goods and services
Sorry, those are two different scenarios. For some reason you don't explain under the current system, when the pimp and Miss Mable spend their money on legal goods, they are then buying goods embedded taxes on them and taxes do get paid. You stopped when the pimp and prostituted collect their money. If you stopped in the same place under your second example, Miss Mable and her pimp would have provided a service and not collected and remitted the required sales tax. So no tax was paid up to that point. You do an apples to oranges comparison and have the nerve to say we don't get it......An apples to apples comparison tracking the transactions to the same point shows that taxes are paid and/or avoided in a similar manner under both systems. Really you have no legitimate argument, but I realize you will persist you do.
Perhaps I did not make myself fully clear. In the post you reference under the income tax scenario, "...other than those embedded in the prices of products which her customers also pay when they buy those products." should have read "other than those taxes embedded in the prices of legal products she may purchase which her customers also pay when they buy those products."
I will leave it to others to judge the validity of arguments posted here.
GET IT NOW?I get that you don't/won't understand...
And the NRST folks claim these embedded taxes are 20-30%, so where's the difference? They either pay the 30% sales tax when they buy legal goods, or they pay the 20-30% embedded taxes. Legal transactions result in taxes, illegal transaction don't.
The difference is HUGE and most will readily see it but I'm quite sure that you and a few others here will continue to be completely obtuse.
"Illegal activity remains untaxed activity under both."
Illegal aliens will be taxed with the NRST because they need to eat and purchase necessities while here working. They will NOT receive their pre-bate unless they have a legal SS#.
No more 'under the table' workers. Just this week, my neighbor's grandson was offered a job for $5 an hour under the table filing at a local doctor's office. This guy is a DOCTOR and he is paying under the table. But bet your bottom dollar this kid will buy some video games at Wal-Mart or elsewhere and pay a NRST.
Lastly, no system is perfect. But the NRST frees the individual from the prying eyes of the fed and I love that principle, don't you? To me its a States' Rights issue.
It is impossible to get an NRSTer to admit the sky is blue. OK, they sky is pink, have it your way.
Here is an example of an attorney who takes a check for cash for services -- which is a felony.
"Legal fees are taxable for consumer services. Draw up a partnership agreement for me to do business there is NO Fair Tax due. Draw up a Will for me and my wife and you must collect the Fair Tax and remit to the state.
Collect cash and be a crook. Sure, lots of people in business do that today and never get caught not reporting it on their income tax return. Two factors one might want to consider. States are very good at catching skimmers on gross receipts throught some pretty cool audit procedures. (Which are a whole lot easier to tract than income and expenses related to the income tax system)
For the nation as a whole, under the current system the crook never pays any income tax on that cash collect. With the Fair Tax, that crook might not collect the FT from the consumer as he should, but when the crook goes a buys his food to keep his worthless ass alive, he will pay the FT. "
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