Posted on 08/03/2005 4:51:43 PM PDT by RobFromGa
A simple question...
So, under the FairTaxI get to keep my whole paycheck, prices for everything I will buy will stay the same even with the taxes included, and I get a prebate check from the govt every month. And businesses pay no taxes.
Where is the extra money coming from...
What is wrong with this reasoning below?
1. Right now the government collects $X in the form of all taxes.
2. All taxes are really paid for by consumers in the end result, either directly, or in the cost of their purchases which allow businesses to collect money in order to pay taxes. Companies do not really pay taxes they jsut collect them and pass them on.
3. The FairTax will collect the same $X per year in the form of taxes but using a different method.
4. Under the FairTax, the price paid for goods will not rise because getting rid of all the taxes built into goods will cause the prices to drop, then the FairTax will add onto the new lower price, resulting in the same price paid by consumers.
5. So, for a given taxpayer, shopping (consumption) will be revenue neutral. Ie. Prices are the same as before.
6. And each given taxpayer will get a "prebate" check every month that they are not getting now.
7. And each taxpayer will pay no taxes on capital gains, or on savings.
8. And, each taxpayer will no longer pay any taxes on income, or payroll taxes.
9. And, there will be no Fair Taxes on any purchases made for a business.
Are these all true so far?
Again, I get to keep my whole paycheck, prices for everything I will buy will stay the same even with the taxes included, and I get a prebate check from the govt every month.
Where is the extra money coming from???
How about reading the book instead of half informed opinions?
Trixie doesn't pay income tax now anyway, but now when she buys those spare handcuffs, condoms, etc. she pays the fair tax.
Though the crack she buys will still fall between the, well, cracks.
My only point related to that is that there will be a great demand for these cards and there will either have to be a compliance/audit system (and that's what we're eliminating) or there will be rampant cheating.
Yes and it will be under that state retail sales tax administration to assure that all retail businesses supplying services and products to business customers are complying with reporting requirements.
The point being that the customer is not on the hook, the business selling retail goods and services is, as they are licensed, certified, and compensated to do just that. That is how a business receives certification so it can purchase tax free, by opening its books to the state sales tax authorities charged with adminsistering retail sales taxes.
So the embedded taxes will become visible, but they are the same amount as before. So the government gets the same amount from all purchases as they do now, except they are called a "Fair Tax" now instewad of an embedded tax.
And the government gives up all income taxes, and payroll taxes, and capital gains taxes, and doesn't replace that income with anything.
And they still end up with as much as they collect now. I don't get this New Math.
No. Because one, there's competition out there for my money, so even with a tax, the competitive pressure is going to keep the price down. Second, there's a breaking point somewhere. They can only pass so much along. I ain't buying it. And third, fine, let the market decide.
Have you read the book?
What's the rate the Income tax has increased over the years?
Increases have been slipped by us all these years because
it isn't in plain sight. Unlike the Income Tax Rate, The Fair Tax
Rate will be in plain sight. There is a built-in opportunity to
protest at the cash register which would carry over to the ballot
box if the Fair Tax Rate were increased excessively.
How about reading the book instead of half informed opinions?I've read the book. It's not a very good way to get informed about the FairTax. If you want the pie-in-the-sky marketing BS, it's great. Otherwise, it not a very objective overview.
Have you read the book?Yes. There's nothing new in the book.
You do understand that there are many costs to running a business that are not directly in the "cost of goods sold" calculation. These things include most overhead items. That is what I am talking about, not buying cases of soda pop to resell in my coke machine.
Have you read the book?Don't you mean the manual?
What did you think about the closing of offshore banks and the corporations reconsidering their overseas relocations?
And they still end up with as much as they collect now. I don't get this New Math.Read the quotes in #61. The only way prices can go down significantly is if nominal wages go down (which can't happen because of "sticky wages").
I am reading the book, and I have been studying this with similar non answers for years, I have also asked John Linder personally this question and got a non answer. I am beginning to think that no one at the Fair Tax table understands their proposal well enough to defend it.
My question is simple and it can be boiled down to "where is the money going to come from?" and "how can you prove it to any level of accuracy (even +/- 50%)"?
How will we make the masses realize how high their taxes are now if we end up making taxes even higher? Do Fair Tax proponents hope to have John Q. Public yearn for the good old days of the IRS?
Why do our corporations have to pay taxes on overseas sales to the US government but most European and Asian businesses are not taxed at home for sales in the USA?
Changing this by doing away with corporate taxation would do a lot to make fair trade really fair trade.
I expect we'll be hearing this a lot for the next few weeks. Since you are an expert on this what page should I read next to find the answer to my question. I have already read the last section Q&A and it is unsatisfying.
The book is designed to generate public enthusiasm, for people who have been watching this for years, I suspect that there will be no new answers. And I would love to see good answers because I could get behind this if it could work.
What did you think about the closing of offshore banks and the corporations reconsidering their overseas relocations?Labor will still be cheaper elsewhere.
You do understand that there are many costs to running a business that are not directly in the "cost of goods sold" calculation. These things include most overhead items.
Good, you are starting to get it, Yes tax costs are overhead costs and many times are fixed and often above and beyond the actual taxes remitted to governement.
Repeal the income tax system, remove the reason for those costs in the first place, guess what businesses can run more productively and more efficiently allowing production volume to rise and prices to fall as a consequence. That is what analysis of past tax law changes inform economists of and on which cost reductions to business, both their supplieres and in their own operation derive from.
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