Posted on 06/10/2005 11:13:37 AM PDT by Always Right
Pure smoke - pure mirrow. The tax loopholes are eliminated in a national sales tax and there are no exceptions to the sales. Flat tax or NST either one would eliminate the volums of federal code we currently labor under.
One problem with your numbers, PL... the $100 item would be $77 for the seller, $23 for the feds, not 70/30.
You're looking at things backwards.
If the economy 'tanks', and the American people are having to do with less, that would be a good time for government to have to tighten its belt as well.
And even if it DOES require a huge NSRT to remain revenue neutral why is that a BAD thing? Would it not be better if the people KNEW how much of their money the government was stealing?
In a tax inclusive system, would the seller be required to itemize the taxes and products?
I agree. But let's look at the sales tax. Under the sales tax the doctor must remit $150,000 for sales tax. Meanwhile, the drug dealer should remit $150,000 for sales tax on all the drugs he sold, but he won't. So in the end, the drug dealer has more money in his pocket to spend under both systems. Taxes are avoided under both system.
Unfortunately, given the nature of government, this never happens... :(
Re: the 'Flat Tax':
The Flat Tax is still an Income Tax.
Income Taxes are totally flawed from their inception.
If you go out in the pasture and find a big, fat juicy cowpie, then flatten it, what do you now have?
A flat cow pie...
The NRST does require the tax to be separately charged and stated (with certain practical exceptions, such as for vending machines that don't proudce receipts).
I think you're right on target. After this "sales tax" we'll still get hit with state, local, school taxes etc. There'll be no exemptions, only the poorhouse!
This results in a rate of 43 percent. ( 30/70 )
How does it discourage business?
When you hear complaints about companies setting up a PO Box on some Carribeian island, remember they did so to avoid some of the onerous income taxes put on them. Such as paying income tax on foreign revenue. Offshore headquarters at a PO Box will no longer have a tax benefit and will no longer happen.
Also, currently there is better than $10 TRILLION of American wealth in offshore financial institutions, primarily because of the tax system and level of taxes. With the removal of the income tax and other federal taxes, a very large portion of that $10 TRILLION will return to America and move through our economy.
I do, assuming said corporation wishes to stay in business and not lose to its competitors.
The Cat is Out of the Bag. Thanks for the summary.
Lets just assume for the sake of argument that the NRST would reduce possible price at retail. If it does then business have 2 options available.
1) Lower prices
or
2) Go out of business when their competitor lowers prices.
There is no 3rd option.
Let me in on a little secret. There is always someone willing to make few dollars less to make a sale. If Nissan passes on the savings they get from the NRST, then Toyota and Honda and GMC and FORD and Chrysler will have to follow suit to compete.
Hell, if I was the owner of Ford, the very FIRST thing I would do the day the hated income tax went away (after firing the tax lawyers and accountants, of course) would be to go on TV and announce: "Come buy our automobiles! With the end of the income tax we are cutting the cost by 30%!"
It is called the free market. A leaner, hungrier company is always in the shadows.
Very well said. Complaining about the FairTax rate is just shooting the messenger.
My fault on that, you are correct. Just makes Always Right's numbers that much more wrong.
Not to mention "THE BLACK MARKET". We'll need more revenue agents than now employed by the IRS.
Next, he'll tell you that prices do not include any tax costs. Really.
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