Posted on 06/10/2005 11:13:37 AM PDT by Always Right
My assertion is that that scenario is at least as likely as the FT fantasy scenario that businesses will fall over themselves to immediately give every bit of any savings they get to consumers.
I'm afraid the meaning of that long sentence eludes me.
Of course he does - but he has ulterior motives for sinking tax reform.
Let's note here that the returns that are done under the nrst are only by business (there are no personal/individual returns) - and the returns are nothing more than gross sales and a check for 23% of it.
Also note here that business will be paid for their efforts in reporting gross sales and remitting 23% of it - they'll earn 1/4% for their trouble - that's 1/4% more than they get now for doing horrendous, time consuming, expensive reporting (compliance which, BTW costs the US economy $250 Billion in non productive expenses).
I disagree - it is the case today that things sold for $100 only let the retailer keep about $70. That's due to the income taxes of every link in the production chain being in the price of the good. That's because the employer payroll taxes of every link in the production chain are in the price of the good. That's because the compliance costs of every link in the production chain are in the price of the good.
When the item gets to be sold at retail, the production costs of the good are 20-25% less than the price - as the price is inflated by the fed tax costs. When those tax costs are eliminated, the retailer can charge that much less and still make the same profit.
So I disagree with your assertion - I say the retailers will be able to make the same profit while they sell for less - due to the elimination of tax costs which are currently hidden in prices.
Talk about disingenuously comparing apples and oranges. Sheesh.What do you mean? unPrincipled was making an ignorant claim that "It's increased market share that leads to growing profits." I provided an illustration that showed that that's not the case (it happened again last year - GM had more market share, Ford had more profits). Often the market share leader has no profits.
Really? That's very interesting...
That alone should tell that the idea is worthy of support -- that lawmakers are against it for not being in their self interest. Remember, they are supposed to be there to serve us.
I assumed Gail was correct because there were no factors in the calculation for evasion, but if NIPA numbers don't include any of the evasion economy, your tax base has effectively been reduced by the current tax evasion rate.The NIPA personal expenditures numbers (the base for the FairTax) factor in current sales tax evasion/avoidance. The income numbers (the base for the current system) have the current income/payroll tax evasion/avoidance. It doesn't take a brain surgeon to realize that if the sales tax rate goes from ~7% to ~37% that sales tax avoidance/evasion will increase from the current level.
You made a faulty assumption. I was not discussing a product that is $100 today selling for $100 tomorrow and the retailer only keeping $70. And I actually made a mistake, they would keep $77.
The use of $100 was for ease of math.
Though under the FairTax it is very likely that a $100 product today will cost $100 after tax under the plan.
The flat INCOME tax does little to solve the problems we have with the tax code. Very little. In fact, it only does one thing: flattens the rate.That statement shows gross ignorance of what the Flat Tax really is. The most important feature of the Flat Tax isn't the flat rate, it's that, by taxing consumption, it removes the bias against savings inherent in our current system.
Have it your way, I'm tired of arguing this point with the FT kool-aid drinkers. I'll leave you to the FT fantasy world where businesses prefer to indulge in price wars to see who can go bankrupt first, instead of taking a 20% margin improvement over 10% more business.
The context was keeping the profit margin the same - but you always are the one who takes things out of context.
Now we agree. They have become pampered fools and forgotten that. I sometimes think that the Congress critters should have to remain in their districts, stay out of Washington, meet with constituents every day, and do their voting with tele- or Internet conferencing.
expatpat:"My assertion is that that scenario is at least as likely as the FT fantasy scenario that businesses will fall over themselves to immediately give every bit of any savings they get to consumers."
OK, where do consumers get this 30% more income to spend when prices are raised by the "EviL NRST"™ ?
Things that have already been taxed are not taxed again. The working definition of "used" in this context is "already been taxed".
Take a look here for a few minutes.
Oh, the FT fans tell me that employees will keep their gross salaries. Therefore, their take-home pay will be higher, because they won't lose IT withholding dollars.
(BTW, I don't assert that gross prices will be 30% higher, just that the FT dream that they won't go up at all is just a dream. My guess is 10-15%, but who knows)
THat is the one good feature of the flat tax.
However, it retains the rest of the evils of the income tax.
it retains withholding income taxes
it retains withholding employee payroll taxes
it retains employer payroll taxes
it retains tax costs hidden in prices
it retains the tax component in US exports, continuing the stupid practice of making US goods less competitive in the world market
it retains the assumption that individual taxpayers are guilty until proven innocent
it retains the feds ability to audit individuals arbitrarily
.....
Tax reform proponents aren't ingorant of the one good thing about the flat income tax, but income tax kooks are ignorant of the downside of the flat income tax- ie everything about our graduated income tax save some bias against saving.
If anyone leaves their heirs a billion dollars or even fifty thousand, are you saying that they haven't earned it and it should be confiscated? I just want to be sure that i understand you correctly. Is that what you are saying?
I laugh at your attempt at rhetoric and debate. Really, you should have gone to some of those liberal arts courses rather than blowing them off. I squeezed those in with my business, finance and economic courses and so now I don't need to debate with nit-wits anymore..
The context was keeping the profit margin the same - but you always are the one who takes things out of context.If all businesses are reducing their prices and keeping the same profit margin, how is one particular business suppose to increase their market share? Suppose the company doesn't have profits (some companies actually lose money, ya know)? Hint: market share does not equal profits.
(BTW, I don't assert that gross prices will be 30% higher, just that the FT dream that they won't go up at all is just a dream. My guess is 10-15%, but who knows)"
OK will the take home pay cover the increase in prices?
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