Presidential Panel Hears About Tax System

Of course such an estimate would have nothing to do with the fact the JCT that owes it very existence and purpose to that same Internal Revenue Code that would be repealed under HR25

The FairTax does not repeal the Internal Revenue Code. Specifically, Subtitle G is just re-designated as Subtitle E.

So did you misspeak, lie, or were you simply mistaken?

and JCT may have slightly adjusted their assumptions and estimates totally outside anything representing the the FairTax legislation as proposed, in favor of maintaining the status quo, hidden taxes and all.

I guess you'll have to come up with another reason for their estimate.

There you go again ... more "misspeaking"??? You've switched sides several times in this thread alone and these have already been pointed out to you.

As you should know with your wealth of tax knowledge, there has never been a tax system like the FairTax implemented so perhaps we should just insist that you inspect a theoretical version as with your Nightmare VAY/Flat. At least with the FairTax there is a very definitive bill to review. With your daydream there isn't even a scrap of paper so that you can continue your various artifices.

Thanks for the economists textbook definition but I already knew that - and that seems to be basically what you thing your Nightmare Flat tax is - which is more that just gilding the lilly. It's a flat out daydream.

I haven't looked into all 100 or more countries - perhaps you'd like to do that - but I do know that Belgium and Poland (and other Euro countries also) do have at least a personal income tax and, I believe, a corporate income tax also in addition to many other types of taxes as well. The links were in #97 rather than #99 and were developed as part of the VAT you were formerly espousing. If you'd like to backtrack on the 100+ countries that have the VAT to see how many have income taxes also, be my guest.

Why take your own red herring off the list??? Seems pointless.

The FairTax has been shown to be revenue neutral and if you missed that information that has been shown repeatedlo on FR I'm not about to help you out. Go find it. Since the Nightmare family of taxes (whatever they are - and we certainly do not know what they are in any detail)
could be so easily revenue neutral, how about a link opr study showing that ... just so you aren't the author to eliminate bias, of course. Not that you'd lie ...

Riiiigggghhhht!!! Don't "misspeak", though - just weasel word it to the max/

There you go again ... more "misspeaking"??? You've switched sides several times in this thread alone and these have already been pointed out to you.

Maybe you would like to give the post numbers, or is this yet another unfounded claim?

As you should know with your wealth of tax knowledge, there has never been a tax system like the FairTax implemented so perhaps we should just insist that you inspect a theoretical version as with your Nightmare VAY/Flat.

What about any NRST? I would be helpful to compare.

BTW, there are over 130 countries with a VAT and several have implemented some form of flat tax.

At least with the FairTax there is a very definitive bill to review.

Totally irrelevant.

I haven't looked into all 100 or more countries - perhaps you'd like to do that - but I do know that Belgium and Poland (and other Euro countries also) do have at least a personal income tax and, I believe, a corporate income tax also in addition to many other types of taxes as well. The links were in #97 rather than #99 and were developed as part of the VAT you were formerly espousing. If you'd like to backtrack on the 100+ countries that have the VAT to see how many have income taxes also, be my guest.

I believe you said "flat tax".

The FairTax has been shown to be revenue neutral and if you missed that information that has been shown repeatedlo on FR I'm not about to help you out.

No it hasn't, in real or nominal terms.

Since the Nightmare family of taxes (whatever they are - and we certainly do not know what they are in any detail)

I can't help it if you are ignorant of the details of a flat tax and a VAT. Maybe you could go to the library and study up some. Once you get educated, you might actually find that the FairTax isn't what you thought it was.

could be so easily revenue neutral, how about a link opr study showing that ... just so you aren't the author to eliminate bias, of course. Not that you'd lie ...

Uh, you just raise the rate until you are generating the same revenue as your are currently. Poof! Revenue neutral. (You really should go to the library.)

Well LOOEY!!! I was wondering why you'd hadn't shown up and I merely supposed it was because you were too busy on the Tax Protester threads or maybe that you'd been thrown in the klink with some of your TP pals.

I know it's hard to keep up with that Nightmare tax guy's flip-flops, but at the time of the post #97, the VAT was being discusses and that initial part of the post was to illustrate what just a single private citizen in the UK thought about it.

And, sorry, he's not my "friend" - don't even know him. You might as well drop that "of the gross payment" business as you've been repeatedly shown that is wrong, Had you read the FairTax bill with any understanding instead of just the intention of making out-of-context quotes, you might know that.

That JCT quote from FairTax opponents about a 57% rate is also nonsense and has been shown to be merely like something you do - screw up the arithmetic. Since I know that isn't within your ken, I won't repeat it. It was revenue neutral at the 23% tax inclusive rate.

BTW looey (your 4th screenname I think but maybe I've missed some) can you gives us the tax exclusive income tax bracket rates since you think that that way of presenting things is grand?

Still waiting on #157.

Don't keep going off the deep end.

Of you'd read the bill you should be able to answer most of the questions you ask.

If "you get the seller, not the buyer" as you say I guess you don't understand that the buyer is actually the one PAYING the tax - the seller is just the custodian of the funds to forward to the State. Thae actual taxpayer (me) is protected.

Do you have some difficulty with tourists helping pay our taxes?? I like the idea as it means more we don't have to pay and it helps fund things they benefit from such as National Parks among other things. You're welcome to vomit whatever you'd like - just give us more warning than you have with your posts on this thread.

Better read some of your own posts with an open mind - there are lots and lots there.

You consistently miss the point.

(and I'm still waiting on #157.)

Does the FairTax allow for random audits of customers?

Business level customers purchasing as a business certainly.

You get seller not the buyer under a NRST.

Under the income tax, the illegal seller evades the income tax on his activites, he however pays the NRST on any legitimate purchase he makes. Same is true throughout the cash economy, both buyers and sellers, as most cash economy purchasers only purchase a portion of their goods and services from out of the cash economy even though they make income one way or another out of the underground economy.

You get the buyer, not the seller under an income tax. Where's the gain?

Hmm, seller is making the profit on which busines income taxes are evaded. The customer in most illegal transactions is often engaged in illegal activites and cash transactions himself that evade the income tax.

Not to mention the fact that many are illegally residing in this country and do not qualify for FCA and in many cases even qualifying dare not apply for such, thus paying full NRST rate without rebate. There is plenty of room for the NRST to gain over the income tax system.

Do I have to vomit up the food I ate on my vacation?

Depends on whether or not they figure you might be smuggling contraband in your stomach, don't you figure? Generally a quick xray will satisfy customs interest therein.

Certainly not however for what ever food you consumed. As that you consumed outside the US (not taxable under the NRST) and more than likely paid an exhorbitant foreign VAT plus multiple other business taxes excises while buying it for your consumption.

What about the hotel? I spent a lot of money at DisneyLand Paris. Do I owe you for that?

Nope, again consumption outside the U.S. and you get to pay all kinds of foreign VAT & business excises in that one too.

You don't get all of my plane ticket, either. Do you?

SEC. 101. IMPOSITION OF SALES TAX.

`(a) In General- There is hereby imposed a tax on the use or consumption in the United States of taxable property or services

For what you bring into the U.S. for consumption or use in the U.S. guess what, NRST due and collectable at customs on entry.

If "you get the seller, not the buyer" as you say I guess you don't understand that the buyer is actually the one PAYING the tax - the seller is just the custodian of the funds to forward to the State. Thae actual taxpayer (me) is protected.

How can you say that? The first thing the bill does is make the consumer liable for the tax. And unless the consumer has an offical receipt, they are still liable. And all it takes to trigger an audit is for the government to think you might owe tax. There is NO PROTECTION for consumers in the entire bill. Individual consumers can be audited just like businesses.

Did it help you understand a VAT? If not I can post them again.

Sorry to be coming in so late. Yes, it would help. I understand the VAT completely, although you may not think so, but I do want others to see your argument.

That's just not true. The tax on every transaction under a NRST could be evaded by just one person. The retail collects the tax and doesn't remit it.

And every retailer who collects the fair tax could burglarize homes instead of being in retail. C'mon.

The "underground cash economy" isn't tax any more under a NRST than the current system.

Of course it's not. It's just taxed under the NRST. What are you saying?

And subtract a few million Americans visiting foreign countries and ... well?

What subtract? What are you talking about? The current tax doesn't tax Americans spending money overseas. It taxes their money BEFORE they go overseas. Oh, I see what you're saying, Americans would spend all of their money overseas. Got a bulletin for you, they won't because they can get better stuff here and most Americans can't afford to go overseas just to buy stuff.

Groanup, you are better than this cheap stuff.

No I'm not. I'm a pure fair tax whore. LOL! I see your abetter LL is avoiding the subject altogether tonight. I hope he is spending quality time with his grandchildren. He should. They are going to be real pissed at him when they read these threads one day and realize that he fought against the greates expansion of the economy since the industrial revolution.

Of course it's not. It's just taxed under the NRST. What are you saying?

What are you saying? The NRST makes this bogus claim all time about taxing the underground economy. The truth is underground economy is not taxed under either system. Only when the proceeds are spent in legal transactions that both systems causes income or sales tax to be paid. I can't believe any honest person can say the NRST captures the underground economy. But NRSTers make all kinds of bogus claims.

The FairTax does not repeal the Internal Revenue Code. Specifically, Subtitle G is just re-designated as Subtitle E.

So did you misspeak, lie, or were you simply mistaken?

You are correct, I was mistaken, as HR25shows:

http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25

SEC. 104. CONFORMING AMENDMENTS; EFFECTIVE DATE.

(a) Conforming Amendments- The Internal Revenue Code of 1986 is amended--

(1) by striking subtitle H (relating to financing of Presidential election campaigns), and
(2) by redesignating--

(A) subtitle D (relating to miscellaneous excise taxes) as subtitle B,
(B) subtitle E (relating to alcohol, tobacco, and certain other excise taxes) as subtitle C,
(C) subtitle F (relating to procedure and administration) as subtitle D,
(D) subtitle G (relating to the Joint Committee on Taxation) as subtitle E,
(E) subtitle I (relating to the Trust Fund Code) as subtitle F,
(F) subtitle J (relating to coal industry health benefits) as subtitle G, and
(G) subtitle K (relating to group health plan portability, access, and renewability requirements) as subtitle H.

Which is why everyone must turn first to the legislation for what its provisions hold, as opposed to what can be said of it mistakenly in error or deliberately in misrepresentation and mischief as may be the case.

Whatever or whoever, the source of a statement concerning the FairTax legislation, the bottomline of the legislative text controls.

and JCT may have slightly adjusted their assumptions and estimates totally outside anything representing the the FairTax legislation as proposed, in favor of maintaining the status quo, hidden taxes and all.

I guess you'll have to come up with another reason for their estimate.

LOL, for entrenched bureaucrats, the errors of the JCT analysis speaks sufficiently all on its own:

Prepared for Americans For Fair Taxation
By David Burton and Dan R. Mastromarco
The Argus Group: February 4, 1998

This report responds to Ken Kies’ letter to Chairman Archer of January 12, 1998. In his letter Mr. Kies propounds several objections to the Americans for Fair Taxation (AFFT) FairTax plan (FairTax) as raised by the Joint Committee on Taxation (JCT) staff. This memorandum addresses those objections with respect to three basic issue areas. They are:

•the revenue neutral sales tax rate,
•compliance and evasion issues, and
•the economic impact of replacing the current tax system with a sales tax.

I. The Revenue Neutral Rate

The JCT, through Mr. Kies’ letter, posits that the FairTax would be revenue neutral only at a 30 percent tax-inclusive rate and a 42 percent tax-exclusive rate, and possibly higher (if other factors are considered (see pages 1-2)).

AFFT’s analysis of the revenue neutral rate has been generally confirmed by many of the leading public finance economists in the country.

However, the JCT estimate goes against the weight of authority and is difficult to explain on analytical bases. Not only AFFT but many highly regarded researchers disagree with the JCT’s opinion. For example, Dale Jorgenson (Harvard) has found that the AFFT plan is revenue neutral at 22.9 percent.¹ Jim Poterba (MIT) has found that the AFFT plan is revenue neutral at 23.1 percent.² Laurence Kotlikoff (Boston University) found that the revenue neutral tax rate was 24 percent.³ Researchers at Stanford, the Heritage Foundation, Fiscal Associates and the Cato Institute have reached similar conclusions (22.3 percent to 24 percent).

This memorandum demonstrates why the JCT analysis is incorrect and why the Jorgenson, Poterba and AFFT analyses that the AFFT plan is revenue neutral at an approximately 23 percent tax-inclusive rate.

A. From a Macroeconomic Perspective, the JCT Calculation of the Rate Is Substantially in Error.

A comprehensive consumption tax that taxes all consumption of any type does not have a tax base equal to only 59 percent of GDP as the JCT is claiming and it certainly does not have a tax base equal to only 42 percent of GDP as the JCT is implicitly claiming in its tax-exclusive rate calculation. Given the absolute breadth of the AFFT consumption tax base (no exceptions, no exclusions, all consumption spending is taxed) such claims are patently implausible. They are particularly implausible in view of the fact that the AFFT plan taxes both private and government consumption and uses a tax prepayment approach on government investment and investment in owner-occupied housing.

One way of viewing the revenue neutral rate needed under the FairTax replacement plan is to consider the effective rate to be equivalent to the following:

Federal Taxes That Must Be Raised / GDP
Tax base / GDP

The proportion of the taxes raised under the FairTax should bear the same ratio to GDP as the taxes to be replaced by the FairTax bear to GDP.

To arrive at our numerator, the taxes to be raised are the AFFT-repealed taxes; namely, the payroll taxes, income taxes, self-employment taxes, corporate income taxes, capital gains taxes and transfer taxes (death and gift). These replaced taxes, for fiscal year 1998, account for 17.8 percent of GDP. ⁴ That is because Federal receipts, as a percentage of GDP, are approximately 19.1 percent, and the FairTax plan would repeal 93 percent of current federal taxes and fees. ⁵ As for the denominator, since investment accounts for 14.6 percent of GDP, the FairTax base can be estimated to be about 85.4 percent of GDP.⁶ 17.8 percent divided by 0.854 is 20.8 percent, the required revenue neutral AFFT tax rate (before the rebate is considered).⁷

From this aerial view, the conclusion reached by the JCT is clearly off target. In order for the JCT’s 30 percent tax-inclusive rate to be correct, the AFFT tax base would need to fall to 59 percent of GDP. In other words, the correct base would be about 31 percent less than the base we estimate. Likewise, in order for the JCT’s 42 percent tax-exclusive rate to be right, the AFFT tax base would need to fall to 42 percent of GDP.⁸

B. Detailed Analyses:

1. The JCT Estimate is Flawed Because it Fails to Add the AFFT-repealed Taxes Back Into the Economy And Assumes Inconsistently That Both the Pre-Tax Prices Will Fall but That the Purchasing Power of Gross Returns Will Remain Constant.

*** Snip ***

2. The JCT Therefore Assumes the Economy Shrinks by the Amount of the Taxes Replaced.

*** Snip ***

3. The JCT Should Have to Explain Why the Base of the FairTax is So Much Less Than the Base of the Flat Tax When the Two Bases are Theoretically Comparable

And continues for another 36 pages of detailed analysis of errors both factual and procedural of the JCT "analysis".

One way of viewing the revenue neutral rate needed under the FairTax replacement plan is to consider the effective rate to be equivalent to the following:

Federal Taxes That Must Be Raised / GDP
Tax base / GDP

The problem with that equation is that it assumes 100% compliance. That assumption alone causes the NRST to underestimate the neccessary rate by at least 15%.

I can't believe any honest person can say the NRST captures the underground economy. But NRSTers make all kinds of bogus claims.

How can you say that? Joe Pimp buys a $5,000 watch with cocaine cash and has to pay a sales tax on it? He never had to before. Clue me in.

Ben Franklin had the right idea, lottery, who wouldn't spend a buck to win $400 billion , just like a 50/50, downsize is the poor would buy more tickets while the rich would pay and play for an advantage .

How can you say that? Joe Pimp buys a $5,000 watch with cocaine cash and has to pay a sales tax on it? He never had to before. Clue me in.

Oh come on now. Joe Pimp buys that $5000 watch today, NRSTers have told me 1000 times there over is 20-30% embedded taxes in the watch today. Now are you going to tell me there are no embedded taxes in the watch today?!?! Legal sales today result in income tax being paid by the retailer, the distributer, and everyone else involved in producing and shipping that watch.