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???
Yes! That and the fact that the Fairtax base is far broader than the income tax base.
The Theresa Heinz Kerrys of the world, who now derive large portions of their income from tax free investment vehicles and thus pay very little in income taxes WOULD pay their share under the Fairtax.
Whose the idiot, your post had nothing to do with anything I said, idiot.
Oh so it's a "soak the evil rich people" plan?
But since the tax costs are already embedded in the things they buy, the evil rich are already paying the taxes in the form of "hidden" costs, aren't they?
The same thing could be said about 65 year old Ma and Pa Kettle, who have paid income and payroll taxes faithfully for forty five years are who retired yesterday to begin their long awaited retirement and enjoy the fruits of their long hard slog through life. Of course, it's more compelling to use Theresa Heinz Kerry's name.
As for paying taxes as 'hidden costs' I would say like hell they are...as hidden taxes. With all the corporate loop holes and all that, we are paying those hidden taxes but who knows where they end up. Its not like "hey! this hidden tax goes straight to the government..." Its more like "these hidden taxes are built into the program but have to make it past a stringer of accountants first"
The problem here is how we define wealthy.
The super rich, like 50 million bucks or even 10 million or above in investable wealth... they use the system to their advantage.
The other 'half' of the "wealthy" make their money and earn 200K on up to in corporate jobs or whatever.
So even to the wealthy as far as paying taxes to the federal government, they get screwed among their own ranks.
Half of the "wealthy" get stuck with 50% of the bill. The only problem is the half is the lower half. So if you are busting your rear and get a $300K plus options job... you get screwed. If you are born into a family of billionaires not so much.
Old people have a whooole lot of wealth.
About the only thing Ma and Pa would be complaining about is why they didn't have the same options to build wealth "back in their day".
Go back and look at what I said. It was a much border statement than some of you are making it out to be. This isn't just about budgeted operating costs of one agency. It was a statement on the total effect of having that agency up and running as it is.
The NRST gets rid of it. All of it.
For some of you tax prep guys, tax lawyers, CPA's, and IRS agents, the NRST means a major life change for you. Fine. You should really be doing something a LOT more honest with your time. Like panhandling or cleaning sewers. CPA's would still be a vital part of any accounting department, but would no longer have to worry if you filed the right forms with the proper tax agency office.
It's ok to be scared, but stop the lies about the impact of the NRST. It is too much like listening to the Democrats whine about the Iraq War.
I jsut finished the Boortz book, it states that the retired people will come out ahead because the prices they pay will be the same, and they will get the prebate checks.
How is this any different than the Underground drug dealer? For them the prices will also be the same and they will also get a prebate. How does this system capture one extra cent from the undergrounder that is already contributing to embedded taxes with each purchase?
Exactly, but the price can only go down so low. At some point it makes no sense for the manufacturer to try to sell a product. Also, a manufacturer will already be selling the product a their lowest price that they can afford. Taking an additional 10% cut to pay a tax won't work. They can't take a loss, just to put their TV in your living room. The point is, that the tariff is an arbitrary tax added to the cost of goods... hence CAFTA.
From the governments standpoint its like them (the government) fishing on a frozen lake.
If they just cast out there odds of them catching a fish are just about zero. Why? Because their bait is sitting on top of the ice.
Only when they go in and drill a hole can they fish in that particular spot.
So they do sometimes drill holes in the ice...
The problem is there are just as many if not more loopholes in the corporate tax system as well...
But what ends up happening is the government has to go downstream of the dam where they are releasing water...and ONLY fish in the spot where the water is rushing through the dam.
If the fish doesn't flow through the dam on its way downstream then you cant catch him.
In other words hidden taxes are there and we pay them, but as for being a viable stream of income to the government itself, not so. So this begs the question 'where does the money go'....its wasted or finagled in many instances. Its like we are all living one big ENRON accounting scandal.
If the sales tax idea comes into play it in effect will melt the ice on the lake and you can catch more fish with less burden on just one fishing hole.
As for your question about the prebate for drug dealers you are gonna have to ask someone who knows more about the prebate idea than me.
But as for 'secret imbedded taxes' instead of going through this myriad of BS before getting delivered to the govt it will make it straight forward and clear.
To me at least thats where a lot of the gains will be made in actual revenue delivered to the feds.
Your words precisely.
Link Please? That trillion comment is pure embellishment.
What about state and local which for entreprenuers like me is huge?
I agree we need to overhaul the tax code but what you propose would hurt folks like me worse than what I deal with now. What about interest and depreciation as costs?
It's more complicated than folks like to admit.
If you switch to a small honda civic then what are you paying for gas relatively speaking?
Savings on the system is just part of it... the other part is like mentioned above... it opens up more fishing holes instead of just trying to leave one demographic slice of the "wealthy" holding the bag.
Read the Bill. You are NOT going to get "hurt worse". Far from it.
Hidden taxes?
There is no clear cut federal taxes.
So he pays as he spends. It will be wide open clear cut and straight to DC...unlike now....
The fair tax is openly described by it's sponsors as a tax on accumulated wealth which is EXACTLY what it is. The differience is that, unlike the current system, it is honest and straight forward in it's application (tax it once but ONLY once). It puts all of us on equal footing in our quest to accumulate wealth by taxing EVERYONE who enjoys the benefits of being in this great country be they here only for a little while or an entire lifetime and does so regardless of how they obtain the funds in their pockets. Further, it frees U.S. manufactured goods from ALL the burdens imposed by the current tax system. Lastly, it does NOT make and enforce apriory claims (claims prior to YOUR claims) on the fruits of your labor (a form of slavery IMHO). The only time you pay a tax with the FairTax is when YOU chose to purchase a new good or service and the government doesn't even need to know so much as your name for that to occur.
I'm not saying add tariffs ON TOP of income tax. I'm saying why can't we use tariffs instead of an income tax, and isn't that basically a much simpler consumption tax than the convoluted, unworkable NRST?
That's putting a lot of faith into tax happy states, isn't it?
I grew up in Florida and now live in Washington. I've never had to pay a state income tax, but I don't recall any state ever willingly repealing taxes, even something as simple as a road toll.
For example, there is currently a move afoot to repeal a phone tax that has been effect since 1898, to help fund the Spanish American War. We have been paying a tax that "only the wealthy would have to pay" for 107 years to fund a war we won within 4 months, a century ago.
And, we are supposed to trust politicians on a "likelihood?"
I heard no less an authority than John Linder state on Cavuto's show yesterday that the Fair Tax is a tax on accumulated wealth. I respectfully disagree. The Fair Tax reaches accumulated wealth only to the extent of expenditures for consumption. The Fair Tax reaches current earnings to the same extent exactly. If accumulated wealth is invested in production or in any manner other than consumption, it remains untaxed. But as accumulated wealth flows into consumption, it would be taxed by the Fair Tax, unlike the current income/payroll tax system
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