Wrong. The customer will pay $100 and the seller keeps $70 and sends $30 to the government.
With the elimination of federal reporting, states will have to replace their personal and corporate income receipts, with a sales tax.
Again you are wrong. Nothing in the Fair Tax bill requires states to go to a sales tax and drop their current income taxes. With me no longer filing a federal income tax return, how does that prevent the state from having me file an income tax return?
And in the tax inclusive/tax exclusive debate, the correct and proper way to do it is tax inclusive if you are comparing it to income taxes, becase income taxes are tax inclusive.
Also, no one will try to buy goods overseas to avoid this tax.
People currently buy items overseas and have to declare them when returning to the country if they are valued above a certain level.
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.
Mr. Gale also decided to exempt a whole plethora of items from the fair tax that ARE NOT exempted to come up with his calculation.
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.
Just how much federal income tax, FICA, etc... are drug dealers paying on their income? ZERO.
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.
Just as it is invisible to the tax collector today.
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.'
And today the drug dealer is paying zero income taxes, zero fica, and zero federal sales taxes (after all, they are only paying some excise taxes on gas, phone, utilities, etc... which are not sales taxes according to you). So, it is a net gain for federal tax revenue under the fair tax.
Lower and Middle Income pay more
Being that the bottom 50% of income earners pay ZERO federal income tax its about time they started paying their fair share.
One amazing thing is under the Sale Tax is that government somehow raises money by taxing itself
The purpose of the government paying the Fair Tax under the Fair Tax plan is not to raise revenue, but for the government to compete on an EQUAL basis with private activity in the market. Currently the government enjoys a tremendous advantage with its tax free status.
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.
Again your wrong. An employer (be it government or private sector) does NOT pay a "sales tax" on an employees salary.
And if you are a Flat Tax supporter, remember, our current tax system started as a Flat Tax. Has worked out wonderfully hasn't it. Long live the Flat Tax!
Wrong. The customer will pay $100 and the seller keeps $70 and sends $30 to the government.
So the customer is paying $100 for a $70 item? What's the difference?
This results in a rate of 43 percent. ( 30/70 )
Your first objection does not use the inclusive method hence the tax submitted is not $30 but only $23. Such mistakes will be common should this change be made.
State income taxes use the numbers on federal forms to calculate their amounts. So if they want to retain i.t. they will have to use different methods. Hence the same amount of manpower will still be used to determine what is owed. Thus, another argument- that there will be a huge savings from moving away from i.t.- is false. AND i.t. are NOT inclusive so even the theory of price formation used by the Pro Sales taxers is wrong.
Let me see if I get this. Criminals who risk death and long jail terms for buying and selling illegal goods are just going to meekly pay these taxes rather than develop an underground economy to avoid them. LoL. ooooK.
Why would you assume that if a flat tax can be changed a sales tax couldn't be just as easily and deceptively raised? Why wouldn't that be even easier to do by small increases every so often?
Okay, serious now... "Nothing in the Fair Tax bill requires states to go to a sales tax and drop their current income taxes."
How do those states (like mine, Arizona) who index their income tax based on your Federal AGI maintain their receipts? When the tax cuts kicked in 5-6 years ago, Arizona failed to reindex the State Income Tax rates and took a terrible hit in tax receipts.
I realize the answer is buried in my question, but it should point out that many states will take the easy way out and mirror the Fed VAT/NRST.
And you want to give them the Sales Tax??
People who push something like NRST with the fanaticism of the FairTaxers are usually looking for power and conquest- my way or die! and "my way" is totalist.