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To: expatpat
If the employee is only getting the same paycheck, then he's getting screwed, because he himself has to now pay the employer's share of the FICA tax, which is now in the sales tax.

Sorry, but you're operating under a fallacy that the tax distribution will remain the same. It won't. Under an NRST, many people who currently operate tax-free (or close to it) will be subject to taxes. A good example of this is under-the-table workers (illegal immigrants), who don't pay income or payroll taxes now, yet would subject to the NRST when they buy things. Also, since they aren't legal residents, they wouldn't be eligible for the FCA, so their effective rate would be the marginal rate.

Also, you'd have the economy expanding -- especially exports -- due to the removal of disincentive to production and a more competitive pricing of U.S. products. Regardless of the actual dollars involved, the real key is purchasing power, which should go up under the NRST as compared to lide under the income tax.

71 posted on 03/03/2005 11:56:42 AM PST by kevkrom (If people are free to do as they wish, they are almost certain not to do as Utopian planners wish)
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To: kevkrom
Sorry, but you're operating under a fallacy that the tax distribution will remain the same. It won't. Under an NRST, many people who currently operate tax-free (or close to it) will be subject to taxes. A good example of this is under-the-table workers (illegal immigrants), who don't pay income or payroll taxes now, yet would subject to the NRST when they buy things. Also, since they aren't legal residents, they wouldn't be eligible for the FCA, so their effective rate would be the marginal rate.

Of course, this will require every business to be completely honest and remit the "tax" to the Federal Reserve instead is sticking it their own personal accounts. Every business becomes a tax collector (yes, I know they alrady are - but more so).

There is still lots of room for "under the table" stuff here.

If a transaction took place and nobody saw it, did it really happen? You could undercut your competition by only "reporting" half of your sales, and setting lower prices. I can often get a much better "cash price" in certain neighborhoods around here. Since they aren't traceable, they almost always "knock off the tax".

Tons more auditing is going to be going on.

73 posted on 03/03/2005 12:01:58 PM PST by Stu Cohen (Press '1' for English)
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