Posted on 03/03/2005 7:05:07 AM PST by FairOpinion
WASHINGTON Mar 3, 2005 — Federal Reserve Chairman Alan Greenspan on Thursday embraced the notion of overhauling the nation's tax system and said that some form of a consumption tax such as a national sales tax could spur greater economic growth.
"As you know, many economists believe that a consumption tax would be best from the perspective of promoting economic growth particularly if one were designing a tax system from scratch because a consumption tax is likely to encourage saving and capital formation," Greenspan said.
(Excerpt) Read more at abcnews.go.com ...
What ad hominem attack?
Our brief discussion is over.
As you wish! You asked questions and I answered them. That you didn't like the answers does NOT an ad hominem attack make.
No. They also pay the income taxes to the employees who pay it back to them.A tax on income is not a tax on the source of that income.
The cumulative taxes increase in absolute terms, but it is the percentage-of-total-cost that is the important parameter. 10c on a dollar item is not better than $50 on $2000 item.
What he didn't know then was that I was a supplier!"
In which your issue became totally irrelevant, as you neither collect nor remit the NRST.
Your customers are all businesses who are exempt from the NRST. Thus any savings you have are passable to your business customer without any loss to your bottomline from what it is now.
All cost savings to business accumulate on down the full chain of production to the point of a retail sale where the accumulative savings has the greatest effect, in the final price of the retail product sold.
In other words you can't show me a study that "indicates the number of levels in the supply chain are highly correlated with the quantity of imbedded [sic] costs." Cheap dodge.Be happy to. Right after you show me the studies that support your VAT/flat tax/tax of the week proposal.The studies indicate that the number of levels in the supply chain are highly correlated with the quantity of imbedded costs.Show me one study that shows this. Just one.
LOL! We weren't discussing whether I collected or remitted something that doesn't exist. We were discussing whether there were, or were not, high income-tax compliance costs in running a business.
Nice try at changing the subject when cornered!
If I'm paying you, and collecting tax from your wages - i'd say I'm paying myself taxes.
I'm interested in understanding how it would work, but when someone instead tries to sell me snake-oil or play a shell-game on me, I have to object.
I think you might want to rethink and re-phrase that. Better to say "I'm withholding your taxes".
Yes, you are right -- that is a VERY big point. Perhaps it isn't emphasized because so many of the things we consume are, in fact, imported. If I buy a Honda or Toyota, or buy toys for the kids, or shirts and pants, I'll be paying somewhere between 23 and 64% extra.
Yes, that is a very big point!
"You are wrong, you know. Most businesses treat taxes like death -- a necessary evil and pretty much inevitable. Sure, there are some shifts made here and there, but I can assure you that they don't normally spend much time on tax avoidance relative to all the other man-hours in a business. They spend a hell of a lot more time trying to make their bottom line look good for their investors!"
I did some consulting for a manufacturer on the east coast several years ago. The first thing that I did was to review their financials for the previous year. They were a subsidiary of a european company that had just opened that plant a year or two earlier. Their sales volume was not yet sufficient to turn a profit, although sales were increasing each year. For that previous year that I looked at, they had lost about $2.3 million. As I reviewed the income statement looking for large expense items, I noted that they had spent app. $500k for tax consulting. When I asked about that, they said yes, their Big 5 accounting firm had done a project for them analyzing best how to shelter their anticipated taxable income in future years.
Here was a company which had no income to shelter from taxes, which spent $1/2 mill on tax consulting, decreasing their bottom line and requiring more financial support from their parent overseas as a result.
I am not saying that that company was typical. What I am saying is that the notion that only profitable companies bear the cost of our tax system is absolutely wrong. So is the notion that the tax itself is the only cost of our incredibly complex system.
Another example is Enron. One of the news articles about Enron during the year following their announcement of financial troubles revealed that for one of their previous years, they had paid Arthur Anderson somewhere around $75 - 80 million for consulting. Knowing how the Big 5 operates, I would be willing to bet that a big part of that was for tax work. Audit firms doing consulting has been a controversial area in the accounting profession for years, but until recently, the problem has been getting worse, rather than better. Auditing has become a commodity "How much is a clean opinion going to cost me?" Audit firms have increasingly been pricing their audit services as a loss leader as it has become harder to differentiate themselves and audits have becoem commodities. Their real goal is to get their foot in the door with break-even (if they are lucky) audits, and to use that relationship to sell more lucrative consulting services, which in many cases are tax related.
The major accounting firms bill billions for tax services and these costs do not add one iota of value to our production.
If I'm paying you, and collecting tax from your wages - i'd say I'm paying myself taxes.OK. Whatever. It's irrelevant to my point because if they are paying themselves, it's accounted for on the expenditures side. It isn't on with the FairTax.
Their sales volume was not yet sufficient to turn a profit, although sales were increasing each year.Of course you consult them to just raise their prices, right?
We were discussing whether there were, or were not, high income-tax compliance costs in running a business.
ROTFLMAO, the overhead costs to business as I have maintained are much more than just compliance costs of accounting and reporting and a spread throughout the entire chain of production. Something you have a problem recognizing.
As clearly pointed out in replies #108, #253, #289, and #299 to you.
Nice try at changing the subject when cornered!
Indeed, a nice try on your part to makeout a unvarifiable anectdotal account on your part to be representive of the general case that arise from studies of the general economy.
Sorry your unsupported assertions simply don't fly in the face of reason nor well known studies by many different economists coming from many different views of the issue of taxreform.
If it's irrelevant, why did you insist on it?
Further, what indicates to you that this isn't accounted for?
The east coast company you referred to: What were its annual sales?
"Perhaps it isn't emphasized because so many of the things we consume are, in fact, imported."
And that is one of the most important things that the FairTax would do - decrease the proportion of imports vs domestic production in this country, as well as increase the level of US exporting.
We have a trade deficit that recently went over $600 billion per year. That is up dramatically over the past 5 years. It is a major contributing factor to the inability of our economy to produce enough good jobs, in spite of our economic recovery.
88 plus 29.87% = 114.29
I don't expect you to understand but that's a 14.29% increase in price by any logic...except yours of course.
Although this post requires little explanation, it does show that after sales tax prices will indeed be the same.
How 'bout try that little subtraction thingy again. Can you do that?
In case you can't, I'll fill you in... 100-22=78, not 88.
And you base your entire argument on your faulty cipherin'...
Pity.
"If I buy a Honda or Toyota, or buy toys for the kids, or shirts and pants, I'll be paying somewhere between 23 and 64% extra."
Not necessarily. First of all, you would be paying at most 30% extra if you bought imports, probably a little less, as competitive pressures from invigorated US producers would cause prices to drop a bit - but nowhere near as much as US goods would decline. Second of all, your Honda or Toyota may actually have been built in the US, in which case, it would enjoy the relief from US tax burdens that other US produced goods would. The fact that the logo on the front of the car indicated that its parent is a Japanese company is irrelevant.
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