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 ...
True, and people who cheat the current system by using cash, will cheat the NRST system by using cash. Like a many people who do not report cash income today, people under the NRST will not report cash payments and will pocket the sales tax. Yes there will be cheating. There will be unreported cash sales. There will be items shipped into this county untaxed. There will be illegal activity that is not taxed. Where there is money to be saved, people will cheat the system.
Will Wal-Mart or Target or any retail outlet risk not collecting the sales tax? I think not.
Will business owners risk losing their business and going to jail? I think not.
Will some cheating occur? Yes.
Will the federal government's nose be kept out of my personal finances? Yes.
Will I be able to save and invest and change investments without concern of tax issues? YES!
Today, we set up trusts, we time our withdrawal of investments based on tax ramifications rather than common sense.
Bill Gates and his father have locked up all their funds in a 'Foundation' unavailable to all but the very rich. The Gates children and grandchildren will live off of this 'untaxed' compound interest for as long as the US is around just as the Kennedy childrens' Foundation has put them though school and frolicking at Martha's Vineyard all these years. Where do you think they get all their money?
And the Gates and Kennedy families say don't eliminate the 'Estate Taxes' because they have theirs all protected. I see so much self-interest here that it makes me puke.
Again, I will bring up Thoreau who went to the woods and lived his simple life to avoid paying taxes -- a tax protest --. Today, the SWAT team would burn his cabin and headlines would scream "White Separatist shoots self in back".
If I disagree with my government on a war, for instance, and so do millions of others, we cannot 'stop paying income tax' because it is an individually collected tax. But, the same is not true of sales tax. If a few million decide to stop purchasing all but used items for even a day or two, DC would get the message.
In my estimation, the only true protest is a tax protest. That gets their attention.
Today, they can listen with sourfull eyes and press the button to keep waging wars whether the people agree or not.
That makes for a higher rate yet.
According to a chart in Emancipating America from the Income Tax by David R. Burton and Dan R. Mastromarco (the authors of the fairtax bill) the fairtax rate is increased by more than 19% to "pay for" the FCA.
Not if they aren't made here....which most aren't.
Wal-Mart and Target don't cheat the current system.
Will business owners risk losing their business and going to jail? I think not.
Business that cheat now, risk all that today but still do it. Just like that Doctor in your example, if he got caught he would get into trouble with the IRS. If somebody pays $100 cash for a Doctors visit, it is easy for him to not report it and not remit the $23.
Will some cheating occur? Yes.
Will the federal government's nose be kept out of my personal finances? Yes.
How? If the government even suspects that you bought goods and did not pay tax, they have every right under your bill to demand that you produce a receipt to prove that you did. You are obligated to produce documentation under the bill.
l I be able to save and invest and change investments without concern of tax issues? YES!
True, but when you go to buy goods they will cost more. Today, we set up trusts, we time our withdrawal of investments based on tax ramifications rather than common sense.
Trust will be unnesccessary, but the effect is the same. All the big money from the Kennedy's or Gates will not be taxed until they decide to spend it. The NRST actually makes it a lot easier for the mega-rich to keep their money with the inheritance tax gone. That may be good or bad depending on your viewpoint.
"True, but when you go to buy goods they will cost more."
No, prices will fall as competition forces businesses to pass their tax savings onto the public. And products, like farm produce, will be more competitive overseas now without the built in taxes.
Family money naturally dispurses after a few generations. A bad business head usually loses it at some point. That is not true of "Foundations". There is no way to lose the money in a "Foundation" unless the family loses control of the "Foundation" which has happened in the past.
Wal-Mart and Target will be collecting NRST from illegal immigrants, too.. who today often pay no taxes.
The States collect the NRST, not the Feds.
You mean there is no competitive forces in business today! Wow, this is good information. The NRST invents the idea of free markets.
Maybe, if they volunteer to do so. There is still a federal agency that oversees all this and can audit people if they wish or if the state decides it does not want to be in the NRST collection business.
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.
Indeed they are huge, as whether a business has a reportable profit on which an income tax may be levied, the overhead costs that are associated with the minimization, determination and accounting/reporting of tax due if any or not, remains to impact the business and its operations.
Part is cost of compliance, the costs related to accounting, reporting and paying any tax due those as as whole exceed $200 billion each year, as much as $100 billion or more on the backs of business whether the business pay any tax at all.
Unfortuately it doesn't end there, additional cost arise in the business' legitimate and sometimes not so legitimate efforts in minimizing the federal tax bill. These are the costs assiociated with legal research and financial planning to arrange operations in such a way as to shelter earnings from the tax lay and to put off or defer payment of taxes. I may include efforts to relocate parts or all of a business outside the jurisdiction of tax authorities or to convert earnings into deductible assets that do not add to production but merely act a repositories to reduce the tax bill.
Additionally are those overhead costs that inevitably arise when the IRS disagrees with a business in what constitutes taxable income or discovers the not so legitimate sheltering of earnings and business operations for the IRS axe. These enforcement costs include all the loss to business and production due to forced collections, compling with audits, the legal fees in defending the business from the rapatious administrative and legal manuvers of IRS investigation and DOJ court actions, with the legal costs, court fees, fines and penalties that arise out of these actions.
Other overhead costs include the cost arising out of tax code disincentive to efficient production in avoiding or not reporting that next dollar of earnings for the increase in tax that it will engender, the purchasing of that deductible equipment or latest and greatest write off the tax account suggests is the best thing to go for sheltering income from the tax bite, but ends up subtracting from the bottom line and fails miserably to meet the promises of all the hype.
The costs imposed by the float that must be maintained in estimated tax payments against future tax due that could otherwise be applied to productive business use, the excess held out of production against the uncertainties in estimating that future tax dollar due as the tax code changes or just is not that clear as to how the IRS and courts will interpret what a business sees as a legitimate deductible cost of doing business.
Finally or the costs of loss of sales out of having to increase the price of ones products in the attempt to recover the above impositions on one's business.The loss of demand for your product arising out of the inevitable response of consumers to a price higher than they feel your product is worth to them or because another business pushing the code harder than you offer product at lower price.
All these costs on business are a matter of everyday operating expense that businesses incur out of the complexities of the income/payroll tax system and effect the price of goods and services as well as wages to labor and bottom line return to the investor. All together with actual tax paid reflect the ultimate price the household must pay for an inefficient and comples tax system that is the federal income/payroll tax system we have all come to know and gripe about.
Top candidate for the understatement of the 20th century:
"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.
Oh yea those taxpayer subsidized farm products laden with embedded taxes will be MORE competitive...right.
Lets not purposely be obtuse. Prices will fall as the embedded taxes are removed.
People who don't understand competition think that Businesses will just pccket the difference. That cannot happen as other businesses will cut their prices. Of course we have competition now.. and will in the future.
"The States collect the NRST, not the Feds."
"Maybe, if they volunteer to do so."
The States will be PAID to collect the NRST.. so they will do it.
Yesterday, I heard Rush going on about a 15% income tax. Why, oh why, doesn't he get straight with the NRST? We could sure use him. Anyone have the ablility to speak with him?
I think it has been established the employees will pocket most if not all of the payroll taxes. Prices will not fall enough to offset a 30% tax unless some act of law requires employees to take a pay cut.
What is proposed, a quarter of one percent? I am not sure too many states will sign on for that.
"I think it has been established the employees will pocket most if not all of the payroll taxes."
News to me.
In the first place, prices are not set by employees. Remember what Reagan said
"Our system freed the individual genius of man. We allocate resources not by goverment decision but by the millions of decisions customers make when they go into the market place. If something seems too high-priced, we buy something else. So resources are steered toward those things people want most at the price they are willing to pay."
This is a rule of the free market not to be overruled by your supposed logic.
Compliance with the current system costs me approximately $300 each year. Overall, it is millions of man hours wasted and too many loop holes to imagine. Compliance is in the hundreds of millions cost to the economy. All of this will be gone with NRST.
What is proposed, a quarter of one percent? I am not sure too many states will sign on for that.
Strange the Texas Comptroller's office disagrees with your assessment.
| House Ways & Means archives 106th Congress: Statement of Billy Hamilton, Deputy Comptroller, Testimony Before the House Committee on Ways and Means Hearing on Fundamental Tax Reform April 11, 2000 My name is Billy Hamilton, and I am the Deputy Comptroller for the State of Texas. Carole Keeton Rylander, the Texas Comptroller of Public Accounts, was delighted to receive an invitation to testify before this committee regarding the Fundamental Tax Reform measures under consideration today. Unfortunately, Comptroller Rylander's schedule did not permit her attendance, and she has asked me to testify here on her behalf. My comments today are directed only to the feasibility of state administration of the Fair Tax proposed by H.R. 2525. I do not intend to comment on the economics or any other aspects of the proposal. The Texas Comptroller's office has administered a sales and use tax since the 1960's, and I have been involved with administration of the tax since 1982. Last year, the Texas Comptroller collected $13 billion in sales tax revenue from more than 600,000 businesses. I offer my own experience with sales tax administration, as well as the size of Texas' sales tax program, as the basis of my qualification to speak to you about the administerability of H.R. 2525. As you know, H.R. 2525 would permit states to collect and administer the Fair Tax on behalf of the federal government. In my opinion, Texas would be well-equipped to administer the Fair Tax based on our experience in administering our own sales tax. Even though the base, rate and other characteristics of the Fair Tax are significantly different from the Texas sales tax, it would be feasible for our office to collect the Fair Tax by expanding and enhancing the systems we currently have in place. For example, we would:
The expansion of our systems to administer the Fair Tax, in the manner I've just described, would be sizable. Under the Fair Tax, we would serve approximately 900,000 more filers than we do currently. We estimate that serving that many additional taxpayers would require 1,100 to 1,600 more full-time employees. The Texas Comptroller currently employs about 2,700 people on a full-time basis. In spite of this large expansion, the compensation for collecting the Fair Tax that would be provided to states under H.R. 2525 [HR26 currently] would likely cover our projected costs. As a first approximation, we estimate that the cost to the Texas Comptroller's office for collecting the Fair Tax at full implementation would be $100 to $150 million per year. I emphasize, however, that there would be significant costs to begin collection, including the cost of facilities to house the additional processing facilities, the capital costs of information technology and revenue processing equipment, and the costs of notifying, registering and educating taxpayers on the new tax. In closing, I believe that if the Fair Tax is to become a reality, the U.S. government would be well-served to make use of the existing expertise of the states. Many states have administered consumption taxes since the 1930s and have developed particular capabilities in this area. We also have extensive experience in dealing with the affected businesses. As long as the administrative fee paid to the state is adequate in relation to the costs of collection, I see no reason that the State of Texas could not effectively administer the Fair Tax. |
The only thing established is whom the CPA/Tax Attorney/IRS nut-huggers are and aren't...
Liberals Love the IRS BTTT
As opposed to the morons who want to add a 30% sales tax on everything we buy. Oh the freedom!
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