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Tax Reform Panel Picks Apart FairTax Proposal
Tax Analyists ^ | 5/12/2005

Posted on 05/12/2005 7:46:54 PM PDT by Your Nightmare

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To: Your Nightmare; phil_will1
I have stated that I have no affiliations with any organization and that I certainly aren't being paid by any organization.

Maybe it's just one affiliation. Not that you'd avoid lyingg about it anyway.

Maybe they organization is paying your company - not you.

We have to watch what you say very closely.

601 posted on 05/19/2005 4:11:22 AM PDT by Principled
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To: justshutupandtakeit; pigdog
Of course businesses factor in all "costs" but you don't seem to grasp the fact that income taxes are NOT a "cost."

This is priceless.

It doesn't make you look so smart to use language and words that aren't used in the real world - but that's not where your knowledge is... clearly.

You'll go on to give chapter and verse about the "actual economic definition" or something. HA!

Is the light bill a cost? How about the copier lease payment? SHEESH the idiocy!

602 posted on 05/19/2005 4:17:49 AM PDT by Principled
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To: lewislynn
I have no idea what a "Larken Rose" is.

BWAHAHAHAHAHAHA!

How lame is that! A simple google in another window will make it clear to everyone who pays taxes just who he is.

Does he sell the "pay no income tax kits" for $49?

603 posted on 05/19/2005 4:20:58 AM PDT by Principled
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To: justshutupandtakeit
I am speaking of income taxes not all other taxes.

So all taxes except income taxes are costs? How's that? Is there some formula you're gonna throw out to tell us why what we know is a cost is actually not a cost?

Estimations must be paid but they are not definitive. Sometimes they are not final for years.

Sure sounds like it's gonna be costly to keep up with all this... plan, execute, record, defend, etc. Are the expenses associated with the expense of taxes costs to you? I can't wiat for this!

604 posted on 05/19/2005 4:39:11 AM PDT by Principled
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To: Your Nightmare

Prices are set by the intersection of the supply and demand curves. My point about price is that if there is no profit after tax.....the item isn't sold. Taxes are factored into the equation to see if the widget even makes it to market.


605 posted on 05/19/2005 6:09:01 AM PDT by Conservative Goddess (Politiae legibus, non leges politiis, adaptandae)
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To: Your Nightmare
"Businesses will attempt to maximize their profits regardless of the income tax they might owe, and if they are successful, at the end of the year, the income tax is a liability they must pay."

And where oh where will the funds necessary to pay this liability come from? The tooth fairy?

606 posted on 05/19/2005 6:10:16 AM PDT by Bigun (IRS sucks @getridof it.com)
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To: justshutupandtakeit; ancient_geezer
"Changing the wages of Company A does not create greater demand for A's product."

Uh oh! Somebody ought to call Henry Ford and splain this to him! LOL!

607 posted on 05/19/2005 6:15:22 AM PDT by Bigun (IRS sucks @getridof it.com)
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To: Principled; pigdog
Principled wrote:
Others (who currently evade taxes) will actually have to begin paying taxes.
Only 23 posts before the first fair tax supporter starts spewing half truths and misinformation. Amazing.

First, everybody pays taxes under the current system. You can't have it both ways. If ~30% (or more) of the price of goods is "hidden taxes" then anyone who buys those goods is paying taxes. You can't evade those taxes unless you live in a cave and hunt your own food or gather your own nuts and berries. If you buy stuff, you pay taxes.

Second, there are some who evade taxes by trading in "black markets" and doing various illegal activities. Others who underreport or fail to report their income at all and evade taxation that way. These illegal activities will continue to be untaxed by the fair tax. For example, drug dealers who don't report their income and pay income taxes on their income from the sale of illegal drugs probably won't start reporting their sales and collecting/paying the NRST.

And the handyman or flea market dealer who gives discounts for cash payments with no receipts so that he doesn't have a paper trail and can avoid reporting the income will probably also avoid reporting the sale the same way and not pay any NRST on his activities.

Transactions that go untaxed due to tax avoidance or tax evasion under the current system will also be untaxed for the same reason under the NRST.

pigdog wrote:
Well, actually before 1913 the idea of an income tax was prety much thought to be unconstitutional BUT ...
Actually, there was some form of income tax or tax on wages and salaries from the civil war up into the early 1900's. And taxes on wages and salaries were not deemed unconstitutional by the courts.

In the 1890's, Congress tried to expand the income tax and tax income from rents, dividends and from the gains from buying and selling stocks and real property. Since those taxes were on the proceeds of real property transactions (stocks represent ownership in real property), the courts held those to be "direct taxes" and subject to the provisions of Article I, Section 2, Clause 3. Since those income taxes on income derived from property transactions weren't apportioned to the states based on populations, the taxes were ruled unconstitutional. The 16th amendment was specifically to address that issue.

So, just repealing the 16th amendment would make taxes on capital gains from real estate and stocks unconstitutional. But it would not make excise taxes on wages or salaries unconstitutional.

This is an area where a lot of "tax protesters" get in trouble. Some try to argue that the 16th amendment wasn't properly ratified (an argument that the courts won't ever directly address). The courts generally point out that the particular income that these people are trying to avoid taxes on isn't derived from the rent or sale of real property, and so the income tax that is due is an excise tax and not a "direct tax" and the excise tax would be legal even if the 16th amendment wasn't properly ratified.

This is why simply repealing the 16th amendment won't render all of the income taxes we have today unconstitutional. Income taxes that are excise taxes (for example, taxes on wages or salaries) would still be constitutional, even if the 16th amendment were repealed.

pigdog wrote:
Any tax bill that becomes law will have to be revenue neutral
Actually, the "revenue neutrality" requirement is a rule of the House of Representatives. That rule can be changed by action in the House (and only in the House). It's not a law, and even if it were an actual law, it could be changed by a simple majority of both houses of Congress. If you can't muster the votes to change that rule, you'll never convince me that you'll get the 2/3rds of each house needed to amend the constitution to do away with the income tax.

The problem is that we are taxed too much and the federal government spends too much on things it shouldn't be involved in. And the so called "fair tax" does nothing to change that. There will actually be a big windfall to the government (and a major expansion of government power) when the so called "fair tax" becomes law.

pigdog wrote:
Any "revolt" will come once ALL taxpayers will be able to see on each and every receipt just how much their government is costing.
Most taxpayers already see on every paycheck just how much they are paying in income taxes and FICA taxes.

If you want to spark a revolt, do away with withholding and make people write the checks to pay their taxes.

pigdog wrote:
Can you imaging the existing tax sysem (or even the wunnerful, undefined Nightmare Tax) after 20 30 more years of political manipulation ... which is much easier under those tax systems than under the FairTax which has only a single visible-to-all rate?
Here's some figures for you (from IPI Policy Report - # 168, Simplifying Federal Taxes: The Advantages of Consumption-Based Taxation which attributes them to a May 30, 2001 Wall Street Journal article).

There have been 1,916 changes to the tax code in the past five years, and 7,000 changes since 1986.
Now, here's a question you should ask (or answer for me if you already know the answer). How many of these changes did each "sponsor" of the "Fair Tax" bill vote for? How many did each "sponsor" of the "Fair Tax" bill vote against?

You are very naive if you think that the system set up by the fair tax proposal won't be manipulated and changed by lobbyists and social engineers in the congress. What's it going to look like after almost 2000 changes in just the first 5 years? What about after 15 years and 7000 changes? Do you want to have to hire an accounting firm to calculate your bill every time you buy groceries?

How exactly will it be more difficult to change the tax code under the fair tax? Will it require a super-majority to enact changes? Will there be referendums for the voters to be able to veto changes? Or will it be the status quo, with Washington lobbyists trying to influence Congress critters for special treatment for their patrons?

608 posted on 05/19/2005 6:24:31 AM PDT by cc2k
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To: ancient_geezer
Who did I attack "to the man"? When I write that the intent of the farttaxers is to levy an additional tax on the American public, however duped you and you fellow supporters may be, you just "feel" as if it is a personal attack because of your suspended disbelief. I am just pointing out the obvious for anybody who has been active in legislative matters (remember, NH is a state with a huge participatory government of volunteers) and observant of political history. Sorry if I offend you by pointing out your weaknesses.
609 posted on 05/19/2005 6:52:28 AM PDT by Final Authority
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To: Conservative Goddess; Your Nightmare
My point about price is that if there is no profit after tax.....the item isn't sold. Taxes are factored into the equation to see if the widget even makes it to market.

Taxes aren't being eliminated. If taxes are a factor in pricing (pricing is marketability) then the 30% tax at the other end HAS to be a factor as well.

A vendor supplying steel for manufacturing for example, (even if it's foreign steel) might not have to pay tax but he and the buyer better be aware that the steel he's supplying is going to be taxed 30% at the other end when/if the product is sold...

610 posted on 05/19/2005 6:53:18 AM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: Principled
tax fraud dufus

There is no tax fraud nitwit.

611 posted on 05/19/2005 6:55:30 AM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: ancient_geezer

WRT 576, it was sarcasm on my part, you took me seriously? Remember, colored, copied, and pasted fonts are just those, not worth reading, but words and thoughts from ones own hand matter. Simply put, here size does not matter.


612 posted on 05/19/2005 6:56:16 AM PDT by Final Authority
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To: Final Authority; ancient_geezer
When I write that the intent of the farttaxers is to levy an additional tax on the American public...

When you write that it is either complete ignorance of what is in the bill on your part or an out and out lie! I cannot tell which.

613 posted on 05/19/2005 7:00:09 AM PDT by Bigun (IRS sucks @getridof it.com)
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To: cc2k
608 is a great post that points out major problems with the farttaxers thought processes. I and others in the course of this thread have pointed out the same or similar disconnects with their facts and understanding of the issue of taxation. If they can not get it straight and we amateurs can see the problems, shouldn't they just close up shop forthwith? Based on the subject article of this thread, I think they have no choice.
614 posted on 05/19/2005 7:03:45 AM PDT by Final Authority
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To: Bigun
And where oh where will the funds necessary to pay this liability come from? The tooth fairy?
Gross profits, maybe?
615 posted on 05/19/2005 7:06:23 AM PDT by Your Nightmare
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To: Bigun

You keep writing of a bill. Please, a bill is like ....., everybody got one and most of them stink. A bill is fantasy until it gets enacted into law. If it ever sees the light of Congressional debate, let me know.


616 posted on 05/19/2005 7:06:34 AM PDT by Final Authority
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To: Bigun

You keep writing of a bill. Please, a bill is like ....., everybody got one and most of them stink. A bill is fantasy until it gets enacted into law. If it ever sees the light of Congressional debate, let me know.


617 posted on 05/19/2005 7:07:46 AM PDT by Final Authority
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To: Conservative Goddess; Your Nightmare; lewislynn
"My point about price is that if there is no profit after tax.....the item isn't sold. Taxes are factored into the equation to see if the widget even makes it to market.

Preciesly so and the exact reason American produced products, which would otherwise sell like hotcakes in world markets, do not sell! This idiotic MARXIST tax system we currently labor under puts such a burden on our products that they cannot fairly compete.

618 posted on 05/19/2005 7:10:03 AM PDT by Bigun (IRS sucks @getridof it.com)
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To: Final Authority

And what makes you think that a SINGLE supporter of the Fairtax bill, including it's author, would continue to support it if it were modified as you suggest it might be?


619 posted on 05/19/2005 7:12:33 AM PDT by Bigun (IRS sucks @getridof it.com)
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To: Your Nightmare
Where oh where do gross profits come from?

(Hint) Look under sales reciepts as there is NOWHERE else for them to come from!

620 posted on 05/19/2005 7:14:50 AM PDT by Bigun (IRS sucks @getridof it.com)
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