Libertarian ping.To be added or removed from my ping list freepmail me or post a message here
Posted on 06/10/2005 11:13:37 AM PDT by Always Right
1. The 23% sales tax rate turns 37%. A retailer who sells an item for $100 must charge his customer an additional $30 for federal sales tax. Most people familiar with state sales tax call this a 30% tax, since the tax is 30% of the seller's price. The Sales Tax folks call this a 23% tax, since $30 is 23% of the final price ($130 including tax), which they call the 'tax-inclusive' rate. Neither way is technically incorrect, it is just important to understand what is really being discussed. Remember this 30% tax-exclusive rate is only the federal portion of the tax, state sales tax will also be added in. With the elimination of federal reporting, states will have to replace their personal and corporate income receipts, with a sales tax. States collected nearly $500 Billion in 2003 through income tax and sales tax. With Personal Consumption at $7.76 Trillion in 2003, that is 6.4% in tax inclusive terms, which will add another 6.8% to the tax-exclusive rate. So if you buy $100 worth of goods, you will end of paying nearly $137 once State and Federal Sales tax.
2. Even 37% is not enough. One amazing fact when sales tax calculates their rate is that they assume 100% compliance. Everyone will cheerfully report every sale. There will be no under the table or black market sales. Also, no one will try to buy goods overseas to avoid this tax. This is pure fantasy. No one could believe any tax system will have perfect compliance and zero avoidance. The current income tax system has about a 15% tax-evasion rate. Conservatively, we could assume that the sales tax will have a similar tax evasion rate of 15% and a tax avoidance (like spending overseas) rate of 5%. With these more realistic assumptions, the tax rate would have to be bumped up to 44% to be revenue neutral. And these are very conservative assumption. Brookings Institute economist William Gale (National Retail Sales Tax, September, 2004) calculated that about a 60 percent sales tax would be required to be revenue neutral.
3. Fraudulent Calculations. Besides using ridiculous assumptions like 100% compliance, the sales tax economists create money out of thin air. Their paid for economists routinely double-count savings of their plan. The biggest one is being the $1.3 Trillion that individuals pay in taxes. Under the 30% Sales Tax bill, that money would end up in the pocket of individuals, and the proponents correctly tell you that take home pay will go up. But then the Sales Tax proponents go on to tell you that prices will go 25-33% to offset their 30% sales tax. Well if individuals are pocketing 67% of the taxes that are eliminated, how are businesses going to reduce prices very much? The sales tax eliminates about $650 Billion in taxes to businesses. Considering Americans consumers spend $8 Trillion on goods and services, that only allows for businesses to lower their costs by 8%. Once the 30% sales tax is added, the final end cost to the consumer will be 20% higher if the calculation were done honestly. Even allowing for a reasonable amount of savings in compliance costs to businesses under the sales tax system, prices would still shoot up 18-19%.
4. Millions must file. The Sales Tax supporters would have you believe that only retailers need to file under the Sales Tax. That simply is not true. In order to offer the 'low' 30% rate, the Sales Tax must tax services too. 'In 1993, 12,778,000 taxpayers filed individual returns with business income or losses, and another 1,919,000 filed farm returns. In addition, in 1992 the IRS received returns for 17,292,286 non-farm sole proprietorship businesses, 1,484,752 partnerships, and 3,868,004 corporations-all of which probably produced goods or services on which the sales tax would be levied. Thus the supposed simplicity of the sales tax turns out to be a mirage.' (Brookings Institution Policy Brief #31-March 1998) Thus over 35 million filers will still be subjected to reporting and audits, most of these are individuals. This doesn't even consider the 100 million of people who will still have their wages reported to the SSA. Also, all households must register every year with the 'sales tax administering authority' in order to receive your monthly tax rebate. Furthermore, individuals that buy things without sales tax, like overseas purchases, must submit monthly forms and payments to the government. Hardly the zero tax filings for individuals as the sales tax supporters claim.
5. Tax Evasion will skyrocket. 20 countries have tried a national sales tax, and 20 have switched to a value-added tax. These countries have gone on record and have flat out stated a retail tax of more then 12% is unworkable. People will avoid it, especially with the internet which makes it very easy for the common citizen to purchase goods from foreign sources. The fact that businesses to business sales are not taxed, makes it very tempting to buy personal stuff under a business name. It will take a mighty powerful and intrusive taxing authority to audit all business expensive to make sure. The sales tax rates we are talking about have never been successfully implemented in the history of the world, but it hasn't been for a lack of trying. "Many people would masquerade as businesses" to avoid the tax, says Robert Hall, an economist at the Hoover Institution. Gale reckons that evasion would be far higher than today 's estimated 15%.
6. Big Government gets Bigger. In the 20 countries where the national sales tax has been implemented, and in each case replaced by necessity by a Value-Added Tax, the amount of federal taxes quickly grew from about 20% of GDP, as currently in the US, to 40% and above of their GDP. Not a promising precedent.
7. Underground Economy still not taxed. The NRST advocates falsely claim that the underground economy now will be taxed. Nothing could be further then the truth. Sure, when the money re-enters the legal economy the money is taxed, but that is true today. But will the drug dealers and prostitutes remit sales tax for their goods and services under the NRST? Absolutely not, this portion of the economy is still invisible to the tax collector and therefore not taxed. According to Bruce Bartlett, 'thus whatever revenue is gained when drug dealers spend their ill-gotten gains will be lost because no tax was collected on their drug sales.' (Bruce R. Bartlett, senior fellow, National Center for Policy, Analysis, November 5, 1997).
8. Lower and Middle Income pay more. Steven Sheffrin of UC Davis in a 1996 CPS brief says that a revue-neutral consumption tax even with a generous personal exemption shifts the tax burden to the lower to middle income households. A 1992 Congressional Budget Office study of consumption based tax concluded the consumption tax would decrease the tax on the wealthiest 20% by five percent, while hitting all other groups with a higher tax burden. The poorest quintile being hit the hardest with a 20% increase in tax and the 20-40% income quintile being hit with 9.3% increase in their effective tax rate. This is because the poorest spend a much higher percentage of their income each year and in many cases are even forced to borrow to keep up with their expenses. These numbers are much worst today as the federal tax liability for the bottom 20% has been greatly reduced through expansion of the earned income tax credit.
9. Elderly assets are unfairly burdened. While people currently working will get to keep more of their paycheck, people on fixed incomes will stay the same. Elderly, who have already worked and saved under the income tax system, will now be faced with paying additional high consumption taxes. This group of especially hard hit people, will not have the opportunity to earn tax-free wages, so all their already taxed wealth will be taxed again when they spend it. Come January 1, 2007, if someone's rent was $1000, they will owe an additional $300 in federal tax alone, and many without any additional source of income.
10. Government Taxes Itself. One amazing thing is under the Sale Tax is that government somehow raises money by taxing itself. Whereas this is an interesting way to reduce government, it is typical of the smoke and mirrors the fraudulent analysis of the so-called fair taxers use. Under the plan, the government is considered the consumer and most of it's purchases and employee salaries are taxable. So if the state of Alabama pays its clerk $30,000 in salary, it would be liable to pay the federal sales tax of $9000. The same applies to the federal government, but it pays itself. An interesting way to raise revenue, but it more fraud on their part. If government could truely tax itself, why not just put 100% sales tax on government and then no one else would have to pay taxes.
11. Auto and Housing Industry Hit Hard. As the luxury taxes have proven in the past, adding a large sales tax on item deters people from buying. In 1991, after the Democrats snuckered Bush Sr. into signing the Luxury Tax, Yacht retailers reported a 77 percent drop in sales that year, while boat builders estimated layoffs at 25,000. And that was only for a 10% tax! With new homes and autos having to compete against existing homes and used cars, paying the additional 30% sales tax will be hard to swallow for most consumers.
Lousbolts, today's homes contain a similar amount of tax and tax costs - and they're all recovered in the sale. Execpting distressed sales, only a stupid idiot would sell a house for less than he paid.
Why would you sell the house for less than $260,000? You wouldn't . You'd sell it for as much or more than you paid - just like today.
Next, he'll tell you that prices don't include any tax costs. Really, he will.
Where'd you get that? A monkey's butt?
Taxes still have to be paid - the same in aggregate (revenue neutrality). The tax base for the nrst is larger than the income tax base - remember all the deductions and exemptions for income taxes.
Under nrst, big spenders will end up paying a (maximum) 23% marginal rate. I think you're wrong to say that's less than now. What was Tah-ray-za's rate? 2% on 50 million?
And the government must maintain a record of those two requirements. And "ancient_geezer" in this post list quote a few more requirements. Like designating a "head of household" and listing everyone in your household and their ages. He says some people get more pre-bate than others. That's a lot more than just "two requirements."
And that's not "no records" either. And no one lists who and how this information will be verified.
Maybe not. But I am certainly not ignorant of your basic ignorance of economics.
Yes indeed and there is apparently NO help for whatever disease it is that aflicts him.
Reminds me of another quote:
Ignorance is correctable; stupid is forever! Author unknown
If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or your arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen."
Samuel Adams
Nah! kinda like salty ole pharts like you and this here feller:
"Carlos Manuel Robles, you have been tried by twelve true and good men, not of your peers, but as high above you as heaven is of hell; and they said your guilty." "Time will pass and seasons will come and go; Spring with its wavin' green grass and heaps of sweet-smellin flowers on every hill and dale. Then will come sultry Summer, with her shimmerin' heat-waves on the baked horizon; and Fall with her yellow harvest-moon and the hills growin' brown and golden under a sinkin' Sun; and finally Winter, with its bitin', whinin' wind, and all the land will be mantled with snow. But you won't be here to, see any of 'em, Carlos Manuel Robles; not by a damn sight, because it's the order of this court that you be took to the nearest tree and hanged by the neck. The sheriff will ride off leaving you to dangle by the neck until you are dead, dead, dead you no good son-of-a-bitch!"
Signed: Judge Roy Bean
Like designating a "head of household"
No I did not say designating a head of household, neither does the bill. I merely requires the name of the person or persons the sales tax rebate is to be sent to. Don't want it don't send them a name to put on the check. Simple.
listing everyone in your household and their ages.
More like listing everyone by social security number as SSA already has the rest of the information. But you don't even need to give em that if you don't want the sales tax rebate.
He says some people get more pre-bate than others.
Yep each household receives 178 or there abouts for adults, and 65 for each child. Gee so difficult, and not even that is necessary if you choose not to apply.
That's a lot more than just "two requirements.
Requirements? What part of voluntary do you not understand.
And that's not "no records" either. And no one lists who and how this information will be verified.
Sure I have, as I said it's called the Social Security Administration. The folks that already have the information required in any case, as a consequence of current law.
You really should read the bill, instead of just emoting.
H.R.25Fair Tax Act of 2005 (Introduced in House) `CHAPTER 3--FAMILY CONSUMPTION ALLOWANCE
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Well the guy ain't stupid.. but he could care less about the country as a whole.. I think Utopian dreams waylay a lot of good ideas.. The good idea I speak of is shit canning the barrel of spoiled apples and starting a new barrel.. Its that way with apples.. once the "germ" infects them.. vinegar is not far off.. or at the least cider.. The apple juice is a distant recollection..
(if you get my metaphor)..
Just being practical, I think.. What say Ye.?.
Libertarian ping.To be added or removed from my ping list freepmail me or post a message here
Whose is going to go up zero? Nobody that I can think of. SS income is taxed and that tax goes away. Interest income is taxed. That tax goes away. Those with capital gains income pay tax. That goes away.
Are they currently going to Mexico to get that $50K car for the much lower Mexican price? And when they bring it back into America and REGISTER it, they are going to get taxed. Trust me.
If you don't believe me, ask anyone who bought a new car in a state they don't live in if they had to pay the tax as if they bought it in their home state when they registered it.
Show me where in the Fair Tax bill that employers have to pay the sales tax on employees salaries.
If you can not, admit you are lying.
Why would the doctor remit anything? Salaries are not taxed under the NRST. Taxes would only be paid when purchasing retail products and services.
The 20 to 25% is cummulative from raw material to finished product on the shelf as the amount of tax and compliance expense grows from step 1 to putting product on the shelf.
Also, lower prices result in more units sold, and eventually more profit.
"Required"? I thought you said it was voluntary. Which is it?
Competition doesn't work that way.
only a stupid idiot would sell a house for less than he paid.Only a stupid idiot would think a 30% tax makes it worth 30% more than the actual value.Why would you sell the house for less than $260,000? You wouldn't
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