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 ...
Incidentally, many here think the IRS will disappear, not realizing that the IRS is responsible for the collection of ALL Federal taxes other than custom duties. The IRS will be in charge of and Sales Tax collection -- you can bet on that!
The effects on consumers and the economy in general are very cloudy areas of this debate for me.
I really have no dog in this fight .... I'm in my "spending" years now and paid mightily in my earning years. But I'm open to a RST because I think it's simple and above board. A huge side benefit might be the closing of whole lot of Accounting and Law schools and increased enrollment in technologies. ;o)
I'm unalterably opposed to a vat tax!
If you would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25), offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Yes, and no. The NRST plan offers incentives for the states to actually collect the sales tax. (It uses incentives, not mandates, so it is possible the feds might have to collect taxes directly in some cases where a state declines.) Under those cases, the feds role would be collecting the tax receipts from the state, and the feds would have no direct interaction with individuals or businesses.
Yeah, that's the scary thing. How did this country function and flourish before that thing was created?
Income taxes are NOT included in a product's price. One doesn't even know what they are going to be from year to year.
1. Taxpayers see every time they're at the cash register how much government cost them -- leads to reigning in government spending.I agree whole-heartedly with you here, tho' it needs to be added on at the register to make it very apparent. The govt. will try to get it hidden in a gross price like PAYE.
2. Money put into savings and capital gains are not taxed.This is good, but only applies to future savings -- those who already have after-tax savings will be clobbered with double taxation.
6. Financial privacy. Wholeheartedly agree here.
7. There will be some gain here, tho' only partial -- but it will also save a lot of fear and loathing every year.
I differ with you on #3, 5, but that's a different post.
The price on which he decides will either be acceptable to the market or not.
It is lunacy to assert that costs (including profit) are not the determining factor in price!
On customs duties, I guess. Ironic when you think of the Boston Tea Party.
Yes, if prices don't cover costs plus profit, then there will be few suppliers, and prices will go up until they do cover.
That's the dumbest thing I've ever heard. Prices are set by the market equilibrium.
You changed the context. Why am I not surprised of that coming from you.
Your context... if a business can't keep it's price low enough it will be disadvantaged by competition in the market. CEO/business owner thinking: "My costs are X and I want 50% profit, unfortunately my competitors are selling for Y and if I sell at Y I'll only make 10% profit -- 10% is better than zero because nobody will pay X.
Back to the original context. If the business cannot recoup it's cost via setting the price the business goes bankrupt. Taxes are a cost and must be recouped and that is accomplished by adding the tax cost to the price of the product.
Regarding your intentional change of context... "Your Nightmare" is that you're your own worst enemy. It must really suck being you.
Read the tagline.
Of course they are. They are part of a business' costs and are estimated and factored into the price charged (or into a decision whether to stay in that business).
It is lunacy to assert that costs (including profit) are not the determining factor in price!Costs only determine what quantity a business is willing to supply at a given price level. Prices are determined by the market equilibrium of supply and demand.
The bill requires a receipt with the tax separately charged and stated (only exception would be for cases where no receipt is reasonable, like a vending machine).
Folks with after-tax savings will do just the same as under the income tax (with respect to purchasing power of savings).
The income tax, payroll tax, and overhead costs of the income tax system inflate current prices by 25-33%. So any after tax savings you have now will already be hit with an equivalent reduction in purchasing power...
...under the nrst, the 25-33% costs are removed, and then replaced with an nrst - making prices about the same.
That's good....as long as it isn't thrown out in the political trading and compromising to get the bill passed.
Thanks, nice post. It's a hoot when people use a false premise or argument to proclaim the sky will fall.
it's easier to be critical than correct.
(I'm with you.) It can't really get any worse.
People who are dead set on keeping the current fiasco
of a tax system remind me of the farmers who get suicidal
every time the mere mention of cutting farm subsidies comes up.
You need to think about that one again. The savings were taxed once with income tax and would be taxed again with a sales tax when spent. Now you are presumably arguing that the gross price of the purchased goods will not change when a sales tax is added. If you think that the net price will go down enough to keep the gross price the same, then you have some very good weed there in your pipe.
You changed the context. Why am I not surprised of that coming from you.How did I change the context? You people...I swear...
Back to the original context. If the business cannot recoup it's cost via setting the price the business goes bankrupt.And they do, all the time. And this happens because the business couldn't set their own price. That's a function of the market equilibrium. This is basic microeconomics.
Taxes are a cost and must be recouped and that is accomplished by adding the tax cost to the price of the product.Taxes and costs are only recouped if the business can keep them below the market price. If they can't, they lose money. Again, businesses lose money all the time. If they do it for too long they go bankrupt. In your world, no business goes bankrupt, they just raise their prices.
Regarding your intentional change of context... "Your Nightmare" is that you're your own worst enemy. It must really suck being you.What change of context? Damn... You guys are a bunch of kooks.
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