Posted on 03/03/2005 7:05:07 AM PST by FairOpinion
Why would you think this?
[Reply] Betcha dollars to donuts it was the nominal rate, not the actual percentage of purchase price.
Not sure of your point. The nominal rate is the actual percentage. If all the way along the production-distribution chain 17%, say, of value added is taxed, that is both the nominal rate and the total tax included in the final retail price.
No offense to the good baby boomers out there. I'm thinking 60's Leftist boomers who, now that they are approaching retirement, will be looking for every handout imaginable.
Wow! A small minority of a whole generation offended you, so the whole generation should be punished severely. Rough justice, indeed!
I'd like to see where you get this concept of "imputed rent" for a homeowner, since it's not in the NRST bill. If you own the house prior to the NRST passage, it's considered used/previously taxed. If you buy it after the NRST, you pay tax when you buy it. There's no additional "rent" bill for a homeowner.
This is true, but your interpretation that it will go away is false. That is built into prices because the employees expect a certain level of take-home, after-tax pay, so the salaries are bulked up to include the income-tax that is withheld. So far so good.
However, my argument is that, if a National sales tax is instituted, the employee will still expect the same gross salary, especially since gross prices will go up to include the new sales tax. So the sales tax will now be embedded in prices, instead of the income tax.
One reason why there is so much fire in these discussions is that there is a kind of circular reasoning going on. The pro argument: IF prices don't go up, then workers will need less gross pay and the embedded tax cost will cancel out the added sales tax. OTOH, if workers expect that same gross salary, then prices will go up by roughly the same amount as the sales tax. Which do you think is most likely?
. The government perceives this as the homeowner paying themselves "rent" for living in their own home. This "imputed rent" would be subject to 23% tax...every month. Living in your own home is defined as a taxable act of consumption. No thanks.
Bull, You care to show us that in the Bill?
The Fair Tax Act forbids the taxation of any property you own prior to the implementation or for which you have paid already paid the NRST on purchase.
H.R.25Fair Tax Act of 2005 (Introduced in House)
`SECTION 1. PRINCIPLES OF INTERPRETATION.
`SEC. 2. DEFINITIONS AND SPECIAL RULES.
|
See #245.
One reason why there is so much fire in these discussions is that there is a kind of circular reasoning going on. The pro argument: IF prices don't go up, then workers will need less gross pay and the embedded tax cost will cancel out the added sales tax. OTOH, if workers expect that same gross salary, then prices will go up by roughly the same amount as the sales tax. Which do you think is most likely?You nailed it.
Employees will still receive the same gross pay. Why would an employee's gross pay change?
Employees' gross pay stays the same, and prices stay the same.
The FairTax proposal integrates such features as a progressive national retail sales tax, dollar-for-dollar revenue replacement, and a rebate to ensure that no American pays such federal taxes up to the poverty level.
Included in the FairTax plan is the repeal of the 16th Amendment to the Constitution. The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes), ends corporate taxes and compliance costs hidden in the retail cost of goods and services, and fully funds the federal government while fulfilling the promise of Social Security and Medicare.
Did you see the CNN online poll yesterday? 52% for the national sales tax (the last time I looked at it).
However, my argument is that, if a National sales tax is instituted, the employee will still expect the same gross salary
Which is true, wages will not decline as a consequence of the enactment of the Fair Tax Act. People will receive their full pay.
especially since gross prices will go up to include the new sales tax.
Gross price including NRST is actually expected to fall 3-10% over time as compared to gross price paid for goods and services today with embedded business taxes and tax related costs which will be removed on repeal of the income/payroll taxes on business.
The reduction in price received by the producer ( i.e. cost paid by the customer less taxes) arises from the reduction three components of loss to the business:
1) repeal of the taxes collected from business per-se (i.e. income and payroll taxes paid by businesses)
2) the overhead costs associated with those taxes, they include:
- the cost associated with planning and limiting the tax byte, legal and otherwise,
- the costs associated with accounting and reporting the tax owed,
- the costs associated with audits, litigatation, legal fees and fines imposed, whenever a controversy arises between business and the IRS.
- the costs associated with loss of productivity through non-productive uses of resources in sheltering income from the tax system and various avoidence schemes to convert income to non-taxable forms that don't add to the businesses production.
- the costs associated with estimated tax payments that are padded for uncertainty of the amount of tax owed which removes cash flow from productive use by the business.
3) the losses due to reduction of demand for products due to the higher prices that must be received by business to finances all of the above.
Repeal of the current income/payroll taxes on businesses removes the above losses associated with the conduct of business under the current tax system. All business transactions upstream from retail sale are no longer burdened with the above costs implicit with the federal income/payroll tax system, and business to business purchases are free of the NRST. The result allows business to reduce prices by the amount of savings realized yet maintain current profit and contractual wages to their employees.
Thus, as an average the shelf(before tax) price of products are expected to fall in the range of 15-25% in the first year of the NRST, depending on industry and the length of the production chain involved in producing a particular product.
Essentially that would mean the total amount(NRST included) paid by the consumer for goods and services, on average, would be roughly the same as they pay today for a specific basket of consumption products under the income/payroll tax system.
The net result of all this would be to provide over time, a very conservative estimated 15% increase in economic standard of living with under the Fair Tax Act (HR25) as compared with the current federal tax system it replaces.
I agree. There is no reason for a change. If you agree to $50k per year, that's what you'll get. But under the nrst, your taxes will be paid when you spend, not be taken form you before you even put your hands on it!
VAT ?
Flat income tax?
Graduated income tax?
Anything but the excises and tariffs designed by our founders, eh?
Thus, as an average the shelf(before tax) price of products are expected to fall in the range of 15-25% in the first year of the NRST, depending on industry and the length of the production chain involved in producing a particular product.You have one study that states this and that study allows for nominal wages to drop. You have no evidence that nominal wages would stay the same and tax exclusive (producer) prices would drop significantly. None.
Except that your postings are taken out of context in such a way that misrepresents the assertions of the authors.
Taken in total, your sources say what geez is saying.
G'day YN. What's your preference today? VAT ?I see you're still working hard to marginalize any opposition. You can always tell when you are getting to you FairTaxers. The frequency and level of attacks goes up.
Flat income tax?
Graduated income tax?
Anything but the excises and tariffs designed by our founders, eh?
Except that your postings are taken out of context in such a way that misrepresents the assertions of the authors.No they weren't. Just because you say they were doesn't make it so. It's just a lame attempt at damage control on your part.
Taken in total, your sources say what geez is saying.Spoken like a true Kool-Aid drinker. Cherry or grape?
Opposition is healthy. Discussion is productive.
Your misrepresentations are neither.
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