Presidential Panel Hears About Tax System

To: ancient_geezer

Doesn't matter what you have a hard time believing, as a consumption tax is paid by the purchaser in any case, not the one doing the labor. At most the provider of labor collects the tax from the purchaser at time of sale, for remittence to government, but a consumption tax is clearly levied on the consumer of goods not upon the producer (i.e. laborer) thereof.

A point of etiquette. If you are trying to convince people to support your position, it does matter what someone has a hard time believing.

I don't agree at all with your comment on who pays. The tax is on the transaction, not either person. The buyer pays more than he would otherwise, the seller gets less.

This is like arguing that the employer pays part of SocSec, when studiesshow that SocSec is just part of the pay package, and raising SocSec taxes always depresses the other part of the paycheck.

I also don't see that this argument has any bearing on the case for or against income tax or NRST or VAT. Whether it's sales or income tax, the buyer pays more, and the seller gets less.

I personally figure this is a screw-the-boomers tax. Having paid income tax all my working life, and planning to go to a lower-income, lower-stress retirement at some point, and have fun spending that (tiny) pile of savings, I find the NRST/VAT folk busy trying to shift the tax from what I won't have (income) to what I've been taxed on (savings).

The only saving grace would be to include a firm percent limit in a constitutional amendment, like the one they didn't get into the income tax amendment.

241 posted on 05/14/2005 5:31:22 AM PDT by slowhandluke

To: slowhandluke

I personally figure this is a screw-the-boomers tax.

Actually the SS/Mediscare taxes are screw the young worker to favor the ole_geezer tax seeing as SS benefits are paid out of current tax receipts going into general revenues.

All the SS/Medicare tax has been is just another income tax feeding into general revenues and spent like any other dollar government can glom onto in the same kind of annual approriations every other program out there is financed with.

From my viewpoint, I am more than happy to support a tax system that does not tax money going into investment nor the money that is earned and re-invested to keep a retirement growing. The advantages of that in increasing ones total assets for estate or retirement by an amount far over even a 25% tax rate cannot be understated.

242 posted on 05/14/2005 5:41:45 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

To: ancient_geezer

`(a) Summons- Persons are subject to administrative summons by the sales tax administering authority for records, documents, and testimony required by the sales tax administering authority to accurately determine liability for tax under this subtitle.

That does not include any restrictions for consumers. You are not going to find too many courts in this country sympathetic to your 'collect and remit' arguement that does not modify this paragraph. And even if the do, it just takes a stroke of the pen to close that little loophole.

243 posted on 05/14/2005 5:47:14 AM PDT by Always Right

To: ancient_geezer

By the way revenue neutrality was required prior to 2004 before the PayGo rules and Budget Enforcement Act expired, and at the time the FairTax legislation was drafted during the Clinton years when the tax rate for the FairTax was established.

The current bill in Congress was introduced in January of this year.

Seems to me a matter of timeframe here is at issue, not whether or not revenue neutrality is required by statute today.

The timeframe is revenue neutrality isn't require today. Nor was it yesterday at 7:23:11 PM CDT when your buddy pigdog lied (it was a lie, wasn't it PG?).

244 posted on 05/14/2005 5:48:36 AM PDT by Your Nightmare

To: slowhandluke

You are correct. The final effect of this tax will be an increase in the final costs of goods to the consumer, to what extent is unknown. Any sane economist not on the NRST payroll would agree that prices would go up and those on fixed income are screwed.

245 posted on 05/14/2005 5:54:40 AM PDT by Always Right

To: Always Right

That does not include any restrictions for consumers. You are not going to find too many courts in this country sympathetic to your 'collect and remit' arguement that does not modify this paragraph.

Courts are required to take the entire state in context, not piecemeal as you do:

U S v. FISHER, 6 U.S. 358 (1805)

"It is undoubtedly a well established principle in the exposition of statutes, that every part is to be considered, and the intention of the legislature to be extracted from the whole."

United States v. Lexington Mill & E. Co., 232 US 399, pp. 409. (1914)

"We are not at liberty to construe any statute so as to deny effect to any part of its language. It is a cardinal rule of statutory construction that significance and effect shall, if possible, be accorded to every word. As early as in Bacon's Abridgment, § 2, it was said that 'a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word, shall be superfluous, void, or insignificant.' This rule has been repeated innumerable times." Justice Strong, United States v. Lexington Mill & E. Co., 232 US 399, pp. 409. (1914)

Furthermore the court is expressly bound to the common law canons of statutory construction expressed above by HR25:

Section 1(c) Secondary Aids to Statutory Construction- As a secondary aid in statutory construction, any court, the Secretary, and any sales tax administering authority shall consider--

`(1) the common law canons of statutory construction;
`(2) the meaning and construction of concepts and terms used in the Internal Revenue Code of 1986 as in effect before the effective date of this subtitle; and
`(3) construe any ambiguities in this Act in favor of reserving powers to the States respectively, or to the people.

Unlike you, the courts and sales tax administrators are not allowed to leave out the provisions that grant authority to do an audit or examination that is necessary before an adminstrative summons can even be issued by sales tax system administrators.

`SEC. 508. SUMMONS, EXAMINATIONS, AUDITS, ETC.

`(a) Summons- Persons are subject to administrative summons by the sales tax administering authority for records, documents, and testimony required by the sales tax administering authority to accurately determine liability for tax under this subtitle. A summons shall be served by the sales tax administering authority by an attested copy delivered in hand to the person to whom it is directed or left at his last known address. The summons shall describe with reasonable certainty what is sought.

`(b) Examinations and Audits- The sales tax administering authority has the authority to conduct at a reasonable time and place examinations and audits of persons who are or may be liable to collect and remit tax imposed by this subtitle and to examine the books, papers, records, or other data of such persons which may be relevant or material to the determination of tax due.

And even if the do, it just takes a stroke of the pen to close that little loophole.

So now we must not reform the current tax system because any new proposal could be some day be changed, unlike the current system cast in warm jello.

Conditions are never just right. People who delay action until all factors are favorable do nothing.
William Feather
"The only thing necessary for the triumph of evil is for good men to do nothing."
--Edmund Burke (1729-1797)
"The penalty good men pay for indifference to public affairs is to be ruled by evil men."
- Plato -

Bottomline:

When there is an income tax, the just man will pay more and the unjust less on the same amount of income.
Plato (427 BC - 347 BC), The Republic

246 posted on 05/14/2005 6:11:01 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

To: Your Nightmare; pigdog

The current bill in Congress was introduced in January of this year.

The rates were set during the Clinton administration when the bill was drafted and first introduced into Congress in 1999.

As it stands now with the Bush tax cuts true revenue neutrality would require a lowering in the NRST tax rate. I can live with that.

The timeframe is revenue neutrality isn't require today.

It apparently is if it is to meet the Bush criteria set out in his Executive Orders to the tax reform panel and get past a potential presidential veto if Bush holds that position for bills coming to him for signing into law.

http://www.taxreformpanel.gov/executive-order.shtml

Executive Order: President's Advisory Panel on Federal Tax Reform

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to assist in reforming the Federal Internal Revenue Code to benefit all Americans, it is hereby ordered as follows:
*** SNIP ***
Sec. 3. Purpose. The purpose of the Advisory Panel shall be to submit to the Secretary of the Treasury in accordance with this order a report with revenue neutral policy options for reforming the Federal Internal Revenue Code. These options should:
(a) simplify Federal tax laws to reduce the costs and administrative burdens of compliance with such laws; (b) share the burdens and benefits of the Federal tax structure in an appropriately progressive manner while recognizing the importance of homeownership and charity in American society; and (c) promote long-run economic growth and job creation, and better encourage work effort, saving, and investment, so as to strengthen the competitiveness of the United States in the global marketplace.
At least one option submitted by the Advisory Panel should use the Federal income tax as the base for its recommended reforms.

247 posted on 05/14/2005 6:20:26 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

To: ancient_geezer

Courts are required to take the entire state in context, not piecemeal as you do:

Piecemeal??? What are you taking about??? Paragraph (a) is an independant paragraph that is in no way modified by by paragraph (b). Taking the 'entire state in context' all I can figure it is saying is that all individuals are subjected to administrative summons while businesses can also be subjected to audits. However since a Summons still subjects a person to producing records, documents, and testimony, I fail to see any difference.

248 posted on 05/14/2005 6:24:57 AM PDT by Always Right

To: Your Nightmare

The timeframe is revenue neutrality isn't require today.

That, by the way, is an admission good to hear from you, seeing as you are alway harping on your belief the NRST for some reason must be revenue neutral.

Personally I figure we need something more in the way of a tax cut, a 10% rate for NRST to replace all federal income, payroll, and gift estate taxes, would be more than adequate to fund government held to its proper constitutional functions.

http://w3.access.gpo.gov/usbudget/fy2001/guide02.html#Spending

$334 Billion --- Defense & Military related expenditure
$ 31 Billion ---- Administration of Justice
$ 16 Billion ---- General Government
$199 Billion ---- Interest on the Debt
=========================
$580 Billion ---- Total

Institute an across the board, Flat rate, single stage National Retail Sales Tax, which taxes all imports and domestic products with the same rate.

Replacing all current federal tax law with a retail sales tax would be 23% on new goods and services paid and receipted at the retail register. No hidden tax, no exceptions, exemptions everyone participates.

Such a tax acts in a natural manner to encourage the elimination of excess government functions through visibility of burden among all constituencies of the electorate.

The total federal government budget would move from $2,000 billions towards something less than $580 billions calculated.

The across the board federal tax rate on new goods and services would decline from 23% to less than 10%.

Sounds great to me.

249 posted on 05/14/2005 6:33:25 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

To: Always Right

??? Paragraph (a) is an independant paragrapht

Regarding issuing a summons to an administrative audit or examination.

that is in no way modified by by paragraph (b).

LOL, a summons that cannot even be issued for an audit or examination, without the authority to do an audit or examination.

Under common law canon, the whole statute must be taken in context, not just isolating a single paragraph my friend.

.However since a Summons still subjects a person to producing records, documents, and testimony, I fail to see any difference.

Your right there is no difference which is why the condition that the person must be a seller (liable to collect and remit NRST) under paragraph (b) must be met before, a summons can be issued by the sales tax administrator.

Sorry, you are just grasping at straws my friend. The legislation was expressly written to concentrate on the seller who is liable for his auditable filings for tax collectios, not the purchaser insofar as administrative actions regarding tax collections of businesses are concerned.

OTOH, for those who would go out of their way to evade remitting a tax, the court route with formal protections of warrant, rules of evidence, presumptions of innocense and lawful actions all come into play.

For yes indeed the NRST is designed to be enforcible, but through due process, formal charge and one's day in court where you happen to be a purchaser accused of not remitting the NRST.

250 posted on 05/14/2005 6:48:13 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

Naw, looey, I don't "misspeak" but I do sometimes make errors and you've pointed those out for me. Thank you. I should just have copied and pasted the snippet like you do. Note to self - pick out snippets like looey does.

I'm sure you'd be surprised (but, hopefully, not delighted) to learn that I also sometimes make spelling and grammatical errors so be sure to check for those also. In fact, would you like a job as a spell-checker?? Mine's on the fritz. Oh, oh, I forgot your "little problem" with the language from long ago. Never mind - I'll just stumble through it.

Would you like me to re-post #219 so's you can understand it? Whether I do or not, people should read the bill and decide for themselves just what it means. If you kept a tally on that. I think you'd find most would soon ignore your snippets for what they are since the bill clearly says one of its principles is to tax a hing once and only once. It is up to the states to do their own taxing but no doubt most of them would choole to conform to the bill meaning that they wouldn't double tax either.

251 posted on 05/14/2005 7:33:55 AM PDT by pigdog

To: ancient_geezer

Sure it can, you can calculate on the basis of whats left from government claiming its cut.

No you can't. What you've already paid can't be a percentage of what you have left...unless you're using the fairtax math. Is that anything like the Million Man March math?

The tax isn't imposed "on the basis of whats left from government claiming its cut"...how can it?

Income tax has to be paid as a percentage FROM your income. It's not paid as a percentage in addition to your income...

A sales tax is in addition to the price (tax exclusive)

It's an "income tax" not a what's left over from your income after they take the tax tax...

Get it?

252 posted on 05/14/2005 7:36:47 AM PDT by lewislynn (My other car is an XC90 T6 AWD....)

To: ancient_geezer

You are in fantasy world if you do not believe a court will allow the NRST collectors to audit people who they think are liable for tax. I really don't see the phrase 'collect and remit' as saving the day here. They undoubtably have to remit the tax, so then it will be up to the courts to decide. I really don't see the courts siding with the consumer here. People are liable for the tax, they will be audited, unless you are in never never land.

253 posted on 05/14/2005 7:37:29 AM PDT by Always Right

Naw, looey, I don't "misspeak" but I do sometimes make errors and you've pointed those out for me

Using you "debate tactic" I'd much rather go on and on calling you a liar, or anything else I could tag on to you..true or not.

That is your style.

Would you like me to re-post #219 so's you can understand it?

I have no idea nor do I care what #219 is. Are you going to repost all the personal attacks to make yourself look good (in your own mind) too?...I know there are some in it because you have them in every post...So go ahead if you think you must.

In fact, would you like a job as a spell-checker?? Mine's on the fritz.

Another lie...there's a litle button right next to the "preview" button that says "spell"

Did you have anything you wanted to "debate" on about the subject or are we still trying to learn about each other?

254 posted on 05/14/2005 7:52:00 AM PDT by lewislynn (My other car is an XC90 T6 AWD....)

To: Always Right

You are in fantasy world if you do not believe a court will allow the NRST collectors to audit people who they think are liable for tax.

Sure a court will order that, given sufficient evidence that a person liable to remit a tax is evading it exists.

Afterall, one of the functions of the court is to provide a review of cause and issue warrant for searchs to do just that, as they do for any investigation into criminal acts, or order discovery in a civil proceeding under the

What you miss however, is unlike the IRS today, that court must be involved in that search or your effects per 4th amendment protections.

. I really don't see the phrase 'collect and remit' as saving the day here.

Courts are very aware of such distinctions. Judges don't like to have there ruling reversed on appeal. Bad for their reputation as a judge not to mention that kind of error get cases dumped and the perp walks.

They undoubtably have to remit the tax, so then it will be up to the courts to decide.

Indeed on the basis of what the statute actually says which is they must be also liable to collect as well a remit. The individual purchaser is not liable to collect the NRST, he is required to pay it.

more of those common law canons that are expressly required by HR25:

FindLaw: U S v. GOLDENBERG, 168 U.S. 95,103 (1897)

"The primary and general rule of statutory construction is that the intent of the lawmaker is to be found in the language that he has used. He is presumed to know the meaning of words and the rules of grammar. The courts have no function of legislation, and simply seek to ascertain the will of the legislator.

FindLaw: S.E.C v. C. M. JOINER LEASING CORP., 320 U.S. 344 (1943)

"The maxim is not to be so applied as to narrow the words of the statute to the exclusion of cases, which those words, in their ordinary acceptation, or in that sense in which the legislature has obviously used them, would comprehend."United States v. Wiltberger, 5 US(Wheat), 76, 95.

"... but the words should be taken in such a sense, bent neither one way nor the other, as will best manifest the legislative intent.' The principle has been followed in United States v. Corbett, , 30 S.Ct. 81, 84; Donnelley v. United States, , 48 S.Ct. 400, 401; United States v. Giles, , 57 S.Ct. 340, 344, 81 S.Ct. 493."

People are liable for the tax, they will be audited, unless you are in never never land.

As purchasers they are liable to pay the tax, certainly. And if there is sufficient evidence to charge them or seek warrant for search from a court in the enforcement of said provisions regarding evasion evasion fraud, you can rest assured that courts will indeed issue warrants or whatever else is necessary and appropriate to the investigation and enforcement of that law the same as any law.

They however are not subject to mere administrative audits on whim of tax administrators as you would have people to believe. The simply is no authority for administrators to audit or examine records of any except sellers on their own. The sales tax administer must go through the court to reach the purchaser who fails to pay the NRST or is involved in fraudulant acts regrarding the payment of that tax.

255 posted on 05/14/2005 7:59:21 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

To: Your Nightmare

Your example assumes that the buyer would not have saved the money he otherwise used to buy cocaine. It assumes he would have spent it on something else. You can't make that assumption in every case.

256 posted on 05/14/2005 8:08:29 AM PDT by groanup (http://fairtax.org)

To: Final Authority

The internet is the solution? Come on now, get a grip on reality.

I didn't say it was the solution. In fact I was agreeing with you. Can't look outside the box?

257 posted on 05/14/2005 8:09:44 AM PDT by groanup (http://fairtax.org)

No you can't.

Just did,

Examples Comparing tax-inclusive and tax-exclusive rates

Inclusive Rate	Description	Exclusive Rate
4.76%	Sample State Sales Tax -->	5.00%
10.00%	<-- Penalty for IRA/401k Early Withdrawal	11.11%
15.00%	<-- Marginal Income Tax	17.65%
15.00%	<-- NRST (not including SS/Medicare)	17.65%
15.30%	<-- Social Security/Medicare Payroll Tax	18.06%
17.00%	<-- Flat Tax (not including SS/Medicare)	20.48%
20.00%	<-- Capital Gains Tax	25.00%
23.00%	<-- NRST (including SS/Medicare)	29.87%
28.00%	<-- Marginal Income Tax	38.89%
32.30%	<-- Flat Tax (including SS/Medicare)	47.71%
39.00%	<-- Marginal Income Tax	63.93%
54.30%	<-- Max Margin Income/Payroll tax rate	118.81%

Note that any tax-inclusive rate larger than 50% would have a tax-exclusive rate of over 100%.

As far as whether or not one should use tax inclusive or tax exclusive measurements for comparison purposes:

The Wrong Camera: The Denominator of the
Tax Incidence Equation.
Dan R. Mastromarco; LLM, Argus Group, Washington D.C.
Tax Analysts Document Number: Doc 1999-32575
Citations: (October 8, 1999)

B. Use a Consistent Size Screen to Portray It.

[118] When considering the rate of a national sales tax, or any tax for that matter, one must always decide which of two distinct means of portraying this rate -- the "tax-inclusive rate" or "tax- exclusive rate" -- best expresses the tax burden. Which one we employ changes absolutely nothing in terms of the taxes that are actually raised or paid by the taxpayer under the taxing regime examined, in the same way that measuring a journey in inches or meters does not change the distance. However, how the rate is presented changes how the relative tax burden is perceived by those who wish to compare the merits of competing tax proposals. Confusion results when we compare alternatives under different measuring scales.

[119] The sales tax is particularly susceptible to this confusion because state sales taxes are normally expressed on a tax- exclusive basis, while income, estate, and payroll taxes, as well as the Flat Tax and other VATs, are normally expressed on a tax- inclusive basis. If we were to express a sales tax rate as a percent of the product price as is done in the states, we would be unfairly overstating the burden of the tax when we compare it to what it is meant to replace at the national level. Or conversely, we would be greatly understating the relative burden of the federal income and payroll taxes for those who don't have time to learn the different measuring systems.

[120] Presentation of a rate of tax on a tax-exclusive basis simply means that the rate of the tax is expressed as the tax paid over a base determined after the tax was already imposed (for example, taxable income under our personal income tax system that is net of the tax). In other words, a tax-exclusive rate would be defined as:

$ tax paid
-------------------------------------------------------------------
($ base on which the tax was imposed)-($ tax paid)

[121] The rate therefore reflects the ratio of taxes paid to what is left in the base, such as net of tax income.

[122] On the other hand, defining the rate of tax on a tax- inclusive basis simply means that the rate of the tax is expressed as the tax paid over the base before the tax has been imposed. In other words, a tax-inclusive rate would be defined as:

$ tax paid
-------------------------------------------------------
$ base on which the tax is to be imposed

[123] Since the base of the tax before the tax is imposed is always more than the base after tax (the denominator is greater), expressing the tax in a tax-exclusive way will always yield a higher rate. In other words, it will express the tax as having a higher burden. /56/

[124] Let us take the following example.

Example: An individual earns $1,000 and pays $200 in taxes
(under either a VAT, income tax, or sales tax) but spends the
remaining $800 on a stereo. Although the taxpayer will pay the
same amount of taxes ($200) out of the same amount of pretaxed
income ($1,000) a question arises as to how the rate should best
be expressed? Is the tax rate 20 percent or 25 percent?

[125] Clearly, one might say that the income or Flat Tax rate is the lower rate, 20 percent, since the taxpayer paid $200 on $1,000 of pretaxed income. That is because the income tax and VATs are normally looked at (unquestionably looked on) on a tax-inclusive basis. However, when we view traditional state sales taxes we might say that the state sales tax rate needed to raise $200 of revenues is 25 percent, even though the sales tax rate raises the same amount of revenue as a 20 percent tax-inclusive income or Flat Tax rate. The taxpayer would be considered to have paid the tax at a 25 percent rate since the taxpayer paid $200 of tax on $800 worth of goods exclusive of tax. That is because the state sales taxes are normally looked on on an after-tax or tax-exclusive basis. To use our formula for tax-exclusive representation:

$ tax paid
--------------------------------------------------------------
(base on which the tax was imposed)-(tax paid)

or,

$200/$800 or, 25 percent.

[126] Which is the correct way of expressing this rate? To the casual observer, it is obvious which tax to prefer. All else being equal, one would prefer a 20 percent rate over a 25 percent rate. But that same person may be surprised to find out that they are saying the same thing, and paying the same tax.

[127] The problem with using a tax-exclusive basis for determining the rate of a national sales tax and a tax-inclusive base to portray the income tax is that it can be very misleading. Let us look at a taxpayer who is at the top marginal rate under each taxing scheme. The tax-inclusive and tax-exclusive rates would be compared as shown in the charts just above and just below.

[128] In the tax-inclusive chart, we see comparisons that we are used to seeing. This chart reflects the maximum marginal rate of the current personal income tax system as 43.3 percent. /57/ Here the sales tax rate is 23 percent and the Flat Tax rate is 32.3 percent, reflecting the combined payroll and Flat Tax burdens. /58/ But the tax-exclusive chart indicates that the income tax with the payroll tax bears a maximum marginal rate that is 75.8 percent of the tax- exclusive base. Even the federal individual income tax alone reflects a maximum marginal tax-exclusive base of 43.3 percent. According to the chart above, the Flat Tax bears a maximum marginal rate of 47.7. The FairTax plan bears a maximum marginal rate of 29.9 percent. In this chart, the taxes paid are calculated as a percentage of what remains after tax.

[129] In making comparisons between alternative taxing systems it is important to ensure therefore that these comparisons are consistent, fair in terms of expectations, and are well explained. Fair comparisons eliminate and do not exacerbate confusion over a relatively critical point as the means of expressing the tax rate. The only means to do so is to ensure that a tax-inclusive rate is compared with a tax-inclusive rate.

Footnotes:

/56/ When calculating the tax-inclusive sales tax base, two algebraically equivalent methods may be used. The tax-exclusive rate may be converted into a tax-inclusive rate by dividing the tax- exclusive rate by one plus the tax-exclusive rate: ti = te / (1+ te). Conversely, a tax-inclusive rate may be converted into a tax- exclusive rate by dividing the tax-inclusive rate by one minus the tax-inclusive rate: te = ti / (1-ti). Alternatively, the tax- inclusive sales tax rate may be calculated by adding the repealed income tax revenue back into the tax base (consumers, after all, would have that money to spend), whereas one would not do so when calculating the tax-exclusive base (consumers would be spending that amount on tax and it would not be appropriation to include it in the calculation of a tax-exclusive base).
/57/ The maximum marginal payroll rate is 15.3 percent, but this rate applies regressively between $0 and $72,600 for 1999. When this rate attaches, it is possible for a tax to apply at a maximum marginal rate of 43.3 percent (28 percent individual income tax rate plus 15.3 percent payroll tax rate).
/58/ While it is beyond the scope of this article, it is important to understand that the Flat Tax rate of 17 percent assumes a substantial reduction in government revenues.

258 posted on 05/14/2005 8:10:51 AM PDT by ancient_geezer (Don't reform it, Replace it!!)

To: ancient_geezer

15.00%.... Marginal Income Tax.... 17.65%

Ok so 15% is the tax of the total income and 15% is 17.65% of what you have left (85%)...So what? That's not a tax rate.

You don't pay income tax on what you have left.

Do the words "of" and "on" have any meaning to you?

Yet another of your bogus charts.

259 posted on 05/14/2005 8:45:57 AM PDT by lewislynn (My other car is an XC90 T6 AWD....)

To: Always Right

Here's the bill relating to Sec. 101 Imposition of Tax:

"`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."

... and from there it goes on about the rate. Note the key phrase "... use or consumption ...". Shipping things into the country is not either of those two things and therefore NOT a taxable event. If you go on to sell them to retail customers, that WOULD be covered, but not just bringing things in.

Your second concern about spending does not apply since it is the retail sale that is the taxable event, not the spending habits of the purchaser. If this were an income tax (it isn't) perhaps that would be an issue, but the audit authority is related to the sales tax and its collection - not how profligate you are. There is noplace in the bill that I can see that allows that sort of intrusion. In fact, that is one of the great benefits of the FairTax; it eliminates that sort of fishing expedition - unless of course you sollected sales tax and didn't send it in ... naughty, naughty.

Neither of the premises that concern you would be correct.

260 posted on 05/14/2005 9:13:17 AM PDT by pigdog

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