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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: pigdog
That's no insult at all, looey - quite the opposite.

Congratulations...Cuz, I meant his intelligence far exceeds anything you could ever dream to be.

761 posted on 05/19/2005 5:09:52 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
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To: lewislynn

Very funny, looey ("... doing something rignt ..."). That'll be the day. And, no, I don't lose any sleep at all thinking about you and your vast notions.

I've seen so many of them (really mostly half-vast;truth be told) over the past 6 - 8 years that I think I've heard it all from you. And don't tempt me on post numbers - you have so many years of covering your backside to do that someone might take you up on it. As it is you manage to shoot yourself in both feet plenty often enough.

Perhaps you'd like some helpful information about the FairTax:

http://www.fairtaxvolunteer.org/smart/faq.html


762 posted on 05/19/2005 5:16:38 PM PDT by pigdog
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To: justshutupandtakeit
You have pointed out nothing other than your inability to come up with sensible or understandable arguments for your position.

Listen troll, I am getting tried of your barking. Your name, justshutupandtakeit, alone is enough to be annoying, if outright a flame.

You should 'shut-up' and listen to other's people's advice.

763 posted on 05/19/2005 5:25:38 PM PDT by Paul C. Jesup
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To: Principled
It's been done a gazillion times, but each time you omit/gloss over/miss the parts you don't seem to understand.

Yeah right. You can't do it. I have asked seven times. Zero, nil, nothing.

764 posted on 05/19/2005 5:31:34 PM PDT by Always Right
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To: Always Right
I have asked seven times.

Oh really? Bet you can't find them.

Why not stop the attack mode and really ask, instead of saying stupid things like "you idiots think $200 Billion is 30% of $8 Trillion". Did you ever really just ask? Did you ever post without attacking?

You may think we want to convince you - that's wrong. We're not here to convince anyone. FR is a tiny corner where these issues can be discussed. What you say is quite unimportant.

765 posted on 05/20/2005 4:35:02 AM PDT by Principled
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To: phil_will1
phil_will1 wrote:
I disagree. First of all, as I previously pointed out, the deductions are where the bulk of complexity lies - not in the rate schedule. We tried a semi-flat tax in 86, and now the Code is far worse than it was then. Would lobbysists/legislators try to complicate a sales tax system? Of course, but those who worked so hard to enact a simpler, fairer system would be fighting them tooth and nail.
Let's look a little more closely at this. I think you're doing more to support my point than your own.

I'll agree that we tried a much simpler tax code in 1986. Fewer rates, fewer deductions, semi-flat characteristics, much simpler than the code that immediately preceeded it.

Now, nearly 20 years later, we have none of that simplicity. We have more tax rates, a bunch of different "refundable" credits, expanded deductions, and all kinds of added complexity.

Do any of the sponsors of this "fair tax" have any history of fighting tooth and nail against needless complexity and bad tax policy? On what basis are you assuming that they will fight changes to a sales tax code tooth and nail? Is that just wishful thinking on your part? Or is there some actual evidence that at least the supporters of this proposal have a history of resisting changes and needless complications added to the tax code? And what about the part of Congress that won't support the fair tax initially? You aren't even going to try to convince me that those people will not try to add complexity and junk up the new sales tax code to "improve" it and make it more palatable to their constituencies, are you?

Unless the voters start voting people out of office because of this counter productive behavior, the critters in congress aren't going to stop this. And the fair tax supporters would be a lot more credible if they could show some credible history of simplifying the current code and keeping it simplified for a reasonable period before trying a wholesale replacement.

With no history of resisting changes, we have to assume that the sales tax code will become convoluted and complex fairly quickly. There's no credible reason to believe otherwise, and I don't care how badly you want to beleive the congress won't needlessy complicate and convolute the fair tax, it still will happen.

So then the question becomes, do you want to have to deal with a complex and convoluted tax code once a year for an income tax return? (Or once a quarter for your estimated tax payment?) Or do you want to pay the compliance cost of your grocery store, gas station, home improvement warehouse, convenience store, liquor store or whatever having to wade through a convoluted sales tax code every time you buy something? Because with the "fair tax," in 10 years, it will take a whole lot of computing horsepower and a fair amount of CPU time to calculate the sales tax on your weekly grocery run. And you can probably count on a lot more paperwork at least annually to compute what your monthly "rebate" check will be.

In a worst case scenario, you might end up having to provide a federal taxpayer ID of some kind in order to buy anything at a store. I doubt that's on the immediate horizon. But I also doubt that in 1913 anyone could forsee that you would have to provide a taxpayer ID number and photo ID to an employer before they could hire you.

phil_will1 wrote:
You believe that a flat tax would be as effective in stemming the trend toward complexity and higher compliance costs, our history with an income tax (which began as flat) notwithstanding.
And you believe that a "fair tax" that starts out flat will stem the trend toward complexity and higher compliance costs. But you ignore what has always happened to "flat", simple federal taxes, at least the ones that are broad based and apply to a lot of taxpayers and a high volume of transactions.

There's nothing but wishful thinking on the part of "fair tax" supporters to support that belief.

I'll admit that I'm speculating here. But you are also speculating about the future, and your speculation has no basis at all in any history available. My speculation is more of an extrapolation of decades of tax policy history. Your speculation assumes that tax policy history will completely change and magically reverse itself with the implementation of a new tax system.

pigdog wrote:
All of the above clearly shows the gross misrepresentation in your statement: "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."
Odd that you call it a misrepresentation after agreeing that the same transactions that go untaxed due to tax evasion with the income tax go untaxed due to tax evasion under the NRST. If you want to say I'm making a misrepresentation, please point out which specific transactions you believe are untaxed now that would be taxed properly under the NRST.
pigdog wrote:
The assumption you make opf 2,000 changes in the first 5 years (as with the past 5 per your numbers) is quite funny in view of the utter simplicity of the FairTax as it now is written. There is nothing like the corpus of arcana that exists with the IT. By comparison the FairTax is an open book and changes would be MUCH more visible - and therefore those attempting them would be more accountable than at present. I believe it would be MUCH more difficult to make the sow's ear when starting with a silk purse that is apparent to all.
See my previous response to phil_will1. You can believe anything you want. That won't change what actually happens. Do you have any actual evidence that it will be more difficult to implement changes to the NRST if it's implemented. I don't see any reason to believe that the same lobbyists and congress critters that gave us our convoluted, arcane income tax code won't be able to give us a convoluted, arcane sales tax code.

The income tax started out as something fairly simple. The 1913 Income Tax Act was probably only 1/3 of the size of HR 25, so I don't think you're starting out with a simpler tax than the income tax was at the beginning. And I doubt that the taxpayers and citizenry will be any more vigilant or observant of changes to the sales tax code than they are with the income tax code.

And the NRST won't tax all goods the same. Right from the start, some goods will be taxed more than others. There are fuel taxes on gasoline and diesel fuels. There are taxes on tobacco and alcoholic beverages. Even if the sales tax code stays relatively static, there are plenty of other opportunities for lobbyists and social engineers to exercise their control over our lives.

The problem isn't so much that the tax code itself is socialist in nature. The problem is that there are a bunch of socialist legislators who write the tax code. HR-25 won't change that. The same bunch of socialist legislators will be in charge of writing the sales tax code for the NRST.

pigdog wrote:
It's more than a bit difficult where your statement about a "windfall" for the government and an expansion of their powers comes from since that is clearly not the case from the wording or intent of the bill ... in other words, a completely unsupported statement.
Actually, the windfall to the government follows logically from the claims of "Fair tax" supporters and the bill presently being discussed.

This requires some logical thought and analysis. Tell me if you disagree with anything here, or if I get anything grossly wrong.

First, when the "Fair tax" (so called) is implemented, all employers will get several positive effects from it. They won't have to withhold income taxes and FICA taxes from employees' paychecks any more, and they won't have to send those payments to the government. Most so called "Fair tax" supporters assume that the taxes withheld from the employees' paychecks will be paid to the employees. Hence the claim that you get to keep your whole paycheck.

But there's more. The so called "employer's share" of the FICA taxes won't be due any more either. And there will be less of an accounting burden (and less of a burden for the attorneys in the legal departement as well) under the fair tax. Supporters of the so called "Fair tax" tell us these savings will be passed on to customers in the form of lower prices, and/or passed on to shareholder in the form of higher earnings.

And it doesn't stop there. Since all organizations will be cutting prices to customers due to market pressures, and since goods bought for business uses are exempt from the so called "fair tax," employers will also see their operating costs fall as prices generally fall from the removal of embedded taxes and compliance costs. Revenues might fall slightly, but since costs are also falling, profitability will increase, or at least not be hurt.

So far, this is just the (so called) "Fair tax" mantra. Are you with me so far? Have I gotten anything wrong?

But here's the kicker. There's one employer, one organization, and they are a large one, and they take a significant portion of my monthly budget. This one employer has already announced that they have no intention of charging less money for their services. They intend to keep all of the benefits of this so called "fair tax" for themselves. They will not allow the so called "fair tax" to reduce their gross revenue stream for any reason. This organization doesn't care that stuff will cost less. They will just buy more with my money.

Care to guess which organization it is that won't cut their prices, won't reduce their gross revenue stream and won't pass any of the alleged savings of the so called "fair tax" on to me?

766 posted on 05/20/2005 4:41:34 AM PDT by cc2k
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To: pigdog

Sorry. I meant to add you to the "To:" and ping you on post 766. There's response there to some of your points and questions in post 660. And there's a question for you at the end.


767 posted on 05/20/2005 5:04:59 AM PDT by cc2k
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To: cc2k
Nattering Nabob of Negativity alert!

Thus far I have seen nothing but attempts to tear down a full scale effort to actually DO something about the problems created by the current U.S Tax code from you on these threads. If you have any POSITIVE suggestions as to how to solve the problem I would LOVE to hear them but throwing up our and yelling "we're screwed" is not an option for me and, I suspect, a good many others here!

768 posted on 05/20/2005 5:21:47 AM PDT by Bigun (IRS sucks @getridof it.com)
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To: Your Nightmare; Principled
WHere to begin... the costs in hard taxes passed along is 10-15% according to literature,

What literature? Give me a link.

NIPA tells you consumption spending is slightly over $8 Trillion.

IRS statistics tell us Business Taxes are under $200 Billion and 1/2 of SS Tax is about $350 Billion. Nobody disputes this, so I can only find about 6.8% of taxes which are hard costs. I try and try and try to discover where the remaining $1.85 Trillion of savings are so business can keep prices the same, but they refuse. The only thing I haven't accounted for is compliance costs, which will only be a small fraction of that. If they can't come up with the rest of the savings, the only conclusion has to be prices will go up substantially under the Fair Tax (which any honest person already knows).

769 posted on 05/20/2005 6:41:10 AM PDT by Always Right
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To: cc2k
Do any of the sponsors of this "fair tax" have any history of fighting tooth and nail against needless complexity and bad tax policy?

Of course! We've been fighting tooth and nail against needless complexity and bad tax policy for 8-10 years now.

Interestingly, we're also spending time defending the clear choice as a replacement to our income tax (which is a mess of needless complexity and bad tax policy) from misrepresentative and misleading attacks by some income tax lovers... you know, the kind that just attack the proposed replacement without offering anything better...

Kinda sounds like the Dem policy on - everything.

770 posted on 05/20/2005 6:43:11 AM PDT by Principled
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To: Always Right
THe information is available. It's there. You choose not to see it. Compliance cost is a part of it, yes... but not all of it.

Separately, I would support the replacement of our income tax system with this consumption tax even if prices changed.

But the overall tax collection remains constant AND the tax base is made larger... they'll be more people paying tax.

If you have a pizza party with 18 people for $90, you could have 9 people pay $10 each. Alternatively, you could broaden the base and have 18 people pay $5 each.

If you really want to see what the remainder of costs that will be reduced or eliminated, do a simple search on google or here on FR. I'm not going to spend my time doing what you could do (but refuse).

771 posted on 05/20/2005 6:48:39 AM PDT by Principled
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To: lewislynn

Bingo


772 posted on 05/20/2005 6:53:54 AM PDT by Final Authority
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To: Principled
If you really want to see what the remainder of costs that will be reduced or eliminated, do a simple search on google or here on FR

I have searched and searched and I have provided all the details I have discovered. Why don't you show me where I am wrong if it is so easy to find out? If you can't back up your claims that prices will stay the same with real numbers under the fair tax, quit making it. I have shown what your total tax base is, and what kind of savings we need and what your plan will save. After 9 posts, still no answer. Do I need to reword the question?

773 posted on 05/20/2005 6:55:10 AM PDT by Always Right
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To: lewislynn

WRT 633; BINGO


774 posted on 05/20/2005 6:55:48 AM PDT by Final Authority
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To: Bigun
WRT 768; the problem with the farttax is that it only adds to the problem of taxation. That is, we will only get more of it. The IRS will never go away. It may be renamed however. The income tax can not go away for all of the reasons I and others have written on these taxation threads. The farttax is fantasy and I will hold that position until it sees the light of debate in Congress. If it it acted upon by Congress I will be concerned about how it will be amended, as will all of you farttaxers. I will grant you that there will be a NRST, it will only resemble the farttax in that it will be a retail tax, but it will be designed to augment the tax take and it will be easy to raise at Congress' will. Your (the Farttaxers) efforts will be used a diversion to pass the sales tax plan. Do you feel good now?
775 posted on 05/20/2005 7:04:20 AM PDT by Final Authority
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To: Always Right
Why don't you show me where I am wrong if it is so easy to find out

I didn't say you were wrong, just that you have omitted/missed much of what the income tax system costs that will be eliminated.

I really don't care what you think about this proposal. You already have determined your position without all the info. Your opinion is insignificant and I daresay irrelevant.

776 posted on 05/20/2005 7:04:38 AM PDT by Principled
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To: Principled
I didn't say you were wrong, just that you have omitted/missed much of what the income tax system costs that will be eliminated. I really don't care what you think about this proposal. You already have determined your position without all the info. Your opinion is insignificant and I daresay irrelevant.

OK, the 9th non-answer to a simple question. Are you telling me the costs of the income tax system will be $1.5-1.8 Trillion and that the cost of compliance to the Fair Tax Scheme is Zero? Is that the story you are sticking to???

777 posted on 05/20/2005 7:07:11 AM PDT by Always Right
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To: Final Authority
The IRS will never go away.

Yes, as long as the government collects taxes, there will be a big powerful tax collection agency.

778 posted on 05/20/2005 7:09:53 AM PDT by Always Right
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To: Principled; Final Authority
But the overall tax collection remains constant AND the tax base is made larger... they'll be more people paying tax.

A larger tax base means more things are taxed not "they'll" be more people, because "they'll' won't be more people. The fairtax exempts some taxpaying businesses from the tax rolls (I thought the fairtax didn't like exemptions).

It's cheesy but it ain't a pizza party.

779 posted on 05/20/2005 7:14:16 AM PDT by lewislynn ( Is calling for energy independence a "protectionist" act.)
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To: lewislynn
A larger tax base means more things are taxed not "they'll" be more people, because "they'll' won't be more people.

A larger base means what is being taxed is bigger.

In the case of this consumption tax, there will be more people paying their full share of tax. Illegals, tourists, those with previously unreported incomes, .. oops gotta run

780 posted on 05/20/2005 7:20:31 AM PDT by Principled
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