Posted on 08/03/2005 4:51:43 PM PDT by RobFromGa
Why don't you ask her next time?
Yes but all of us are now just as well off as she is!
I'm sure I have the same questions everyone has...if there are no taxes taken out how do we know the consumption tax will raise enough revenue to run the country? How can they tell for sure how much revenue will come in each year? What happens in years where sales are down and people aren't spending? How do we know the 23% won't be raised every few years?
You can see the graph at http://www.fairtaxvolunteer.org/smart/faq-main.html#9
the link won't work, maybe the site is overloaded. I will look into it.
I am not yanking anyone's chain, I just want to understand this so I can support it and explain it to people so they believe me, or I can logically discuss why I am against it.
If it is as it sounds and we can get the current costs of compliance to pay for the whole FedGov, while saving every citizen of the US including people with no income a lot of money, of course I am for it.
What I understand so far is that the FT people are claiming that the compliance money currently spent is enough to fund everything without asking the taxpayers to fork over a nickel. Everything we buy retail will cost the same as it does now, we will pay no taxes to the FedGov, and everyone gets a check every month to boot.
It sounds like a free lunch but if it works, I am all for it.
Every business isn't like yours.
do you know what the answer is to my post 221?
The link I provided above has 2003 numbers. The tax inclusive rate is actually 19%
The vast majority of retirement wealth is in qualified plans such as IRA's and 404(k)'s. The fair tax would be a huge boon to those holding such assets since they would be able withdraw that money tax free.
As for someone who has saved all of his money in a taxable account so he/she wouldn't have to pay taxes in retirement it would seem the fair tax is going to double their tax burden. But three things are working for them.
1. The savings will still be earning interest and dividends which would now be tax free.
2. The costs of goods and services should come down between 10 and 20% as the imbedded taxes are removed from the economy while, at the same time, they will no longer be paying those imbedded taxes themselves.
3. The resulting economic boom could raise the value of their investments.
You WILL get audited, because when the hotel gets audited they will provide the state tax auditor with a list of tax free purchasers.
From day one the prices will go down. Retailers get an inventory credit for the taxes embedded in the inventory they have on hand on the day the tax takes effect, so they can immediately lower their prices. Why would they lower their prices? Competition! And where did you get 25-30%? Out of thin air?
The states will be responsible for enforcement. They are very good at it, trust me.
So businesses will still have all the compliance costs associated with business expense tracking, and also be at the whim of 50 state tax authorities to audit each business expense? Is this cost of compliance negligible?
I believe the burden of proof will be on YOU, just like it is now.
All of those hotels you see along the roads that are filled with business travellers, as well as most of the airplanes, are filled with people conducting business. We pay the state and local sales taxes but the costs are deducted as a cost of business so federal taxes are not paid.
I see the same or worse compliance costs as presently exist, except the potential auditors have multiplied by 50.
BTW, this is not some sneaky tax dodge we are talking about, every business in America just about has many such expenses. It is a large percent of the travel industry.
I figure the NRST is a 30% tax on the goods as we normally think of a sales tax being figured. There will be some compliance savings, so I figured 5% at most.
I would guess that prices will probably be more like 10%-20% higher from what I have read since.
Your Nightmare is going to say that this has nothing to do with his post, but I just wanted you to know.
Have you read the book?
I read the book, got it yesterday, finished it this morning.
It does not answer the questions for me, it is a good beginning book for someone who has never heard of the plan though.
The big issue that the Fair Tax people need to prove to get this program to be embraced by almost everyone is to prove that the retail price paid for goods will not go up by more than say 5-10% when the tax is included. If they can get people to buy off on that claim, we have a winner.
I am skeptical but I am researching this topic as are many people. One problem is economic forecasting is very difficult.
Fair Tax proponents double count this.
They simultaneously claim your paycheck will go up by the amount of income tax that you no longer have to pay and that prices will come down by the "hidden taxes" (i.e. producers' income taxes) that will be eliminated.
There are many illogical claims of the so-called "Fair Tax" proponents, but there is one.
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