Top 11 Secrets of a National Retail Sales Tax

Various | 6-10-05 | Always Right

[kevkrom]

The Cat is Out of the Bag. Thanks for the summary.

Except that it's a dead rat dressed up to look like a cat. The "summary" is a collection of half-truths, lies, and exaggerations that is more humor than fact.

[Phantom Lord]

In a tax inclusive system, would the seller be required to itemize the taxes and products?

No. The tax is the same regardless of product. The tax paid would be the % of gross sales.

It wouldn't be that product A is at X% and product B is at Y% and product C is at Z%.

[QQQQQ]

I am sure you'll want to ping your tax ping list to this one, to refute the arguments, and the many false premises.

[balrog666]

Also, next time, add a bullet for the fact that rent will be taxable. If you pay $1000 to rent a house, you will have to pay $1300 ($1000 rent + $300 NRST) under the NRST.

[Principled]

How many people actually believe that a corporation, once it has gotten people used to paying a certain price for an item, will actually lower their prices? The reality is that they will just pocket more money.

... until the business down the street cuts their price and takes a big chunk of your customers.

[kevkrom]

If you pay $1000 to rent a house, you will have to pay $1300 ($1000 rent + $300 NRST) under the NRST.

Absolutely. Because your landlord isn't currently paying any taxes at all. Nope. Uh-uh. None.

Moron.

[frogjerk]

I know the tax is the same but I want to know the original price I am being charged for said item. I don't want any "Trust us, were just adding in the additional 23% tax" garbage...

[QQQQQ]

I don't have time to go point by point, but let me just ask you -- what is YOUR alternative?

Do you think the current system is so great, that we should keep it?

Or do you favor the "short form": "How much do you make, send it all in", then the government will provide for what they think your needs are.

[EternalVigilance]

Unfortunately, given the nature of government, this never happens... :(

Under the NRST, they would have to.

Hamilton, in the Federalist Papers, talks about how taxes on consumption are self-leveling, like water. If you raise the rate too high, revenues will fall at some point, not increase.

Politicians, faced with falling revenues, would have two choices: cut spending, or try and raise the rate. The problems with choice two are A) That move could be quite politically unpopular...and B) Doing so could easily reduce revenues even further, because of the higher prices discouraging consumption.

This natural dilemma for politicians can be nothing but a win/win for a free people.

This is a simple principle that every American who is trying to understand fundamental tax reform needs to get through their skulls.

[Always Right]

I made that point in #9, but maybe should have given its it own number. Interest is also taxed under the sales tax, but only the amount above the fed rate.

[Phantom Lord]

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.

I don't quite get how you can do such mental gymnastics.

If a drug dealer is making $500,000 today, he pays ZERO in federal income taxes and zero in FICA. If a Doctor makes $500K today, he pays in excess of $100K in federal taxes on it.

So currently the score is Drug dealer pays $0, doctor pays $100K.

Under the NRST, if both the Doctor and Drug dealer earn $500K, and they both spend the same amount of money on retail products, they will both pay the same amount in federal taxes. It is a tremendous revenue gain on illegal activity compared to todays system.

This worry that drug dealers are not going to pay sales taxes on their illegal drug sales is far beyond a red herring and straw man.

[Durus]

"Next, he'll tell you that prices do not include any tax costs. Really.

Yup. I've had that discussion before...without hearing any reasonable explanation of where the taxes come from that the Corporation pays. My supposition based on that particular discussion was the corporate tax fairy paid them.

[frogjerk]

Politicians, faced with falling revenues, would have two choices: cut spending, or try and raise the rate. The problems with choice two are A) That move could be quite politically unpopular...and B) Doing so could easily reduce revenues even further, because of the higher prices discouraging consumption.

You forget that cutting spending is politically unpopular as well. If this was not the case we wouldn't have so many "entitlement" increase promises every election cycle...

[Phantom Lord]

I had screwed up my numbers. On a $100 product, the retailer keeps $77 and $23 goes to the government.

[Always Right]

What you status quo-ers are doing when you make this silly argument is to attempt to make transparency somehow a bad thing. It's not. It's wonderful, and one of the best features of a retail tax.

It is good to know how much tax is there. It will wake a lot of people up. But it will also be a huge discouragement to people spending and will have a negative effect on our economy.

[ThinkDifferent]

So what? See #35; the FairTax is revenue neutral, so you'll end up paying roughly the same total amount of taxes. It's silly to point at specific places taxes will go up, because they'll go down in other places, most notably your paycheck.

[justshutupandtakeit]

That is another of the points against it. You will NEVER see the 23% tax but ONLY the 30% tax ADDED. The inclusive tax is completely hidden. "How much is this?" "$100" "How much is the tax?" "$23" "23 is 30% of the price" "I know but that is the government for you"

Once the blatantly deceptive idea of "inclusive" taxes was floated I immediately smelled a rat. Since the entire country has become used to calulating taxes as an add on changing the method does nothing but hide the real tax.

[ancient_geezer]

So the customer is paying $100 for a $70 item? What's the difference?

None at all.

Its 23% of the total payment at the register as the seller who remits the tax views it, or 30% in addition to the shelf price as a customer would view it.

Same tax amount either way it is expessed, same amount goes to government and the retailer either way.

Like today, spend your entire paycheck, how much more in income tax did you have to pay to even spend anything at all.

[Principled]

In a tax inclusive system, would the seller be required to itemize the taxes and products?

link to bill (enter "HR 25"), FAQ, thumbnail sketch.

Kick around in there. It is indeed a requirement that the 23% amount be shown.

[Always Right]

If you pay $1000 to rent a house, you will have to pay $1300 ($1000 rent + $300 NRST) under the NRST.

Absolutely. Because your landlord isn't currently paying any taxes at all. Nope. Uh-uh. None. Moron.

Ever own rental property? Unless you eliminate the property tax (which you don't) there is not much income tax to be paid. Depreciation usually wipes out any income.