Posted on 08/03/2005 4:51:43 PM PDT by RobFromGa
Unless you are losing money on your business now, I'd say the Fair Tax would be absolutly GREAT for you. Think of it. You will pay 23% on your expenses, but avoid the 15%+ in self-employment taxes (SS & Medicare) while also ending income taxes that are taking about 30% of your net revenue. I'd guess you would come out 25-30% ahead of where you are now. You would also likely be collecting a fee (1/2% ???) on the taxable sales you make. Pigdog probably could give you more information.
The Fair Tax rate is not derived from the amount of the embedded taxes included in the prices of goods and services we buy. The fact that they are about the same percentage is a coincidence. The Fair Tax rate is calculated as follows, per this article http://www.fairtaxvolunteer.org/smart/tax_system.html See table 2 at the very bottom:
The tax revenues collected in 2003 (dollars in billions)were income (personal and corporate) $927.7, Estate and gift $22.4, Payroll $717.8, for a total of $1,667.9 (that's trillion for all you mathematically challenged).
The Fair Tax consumption base starts at $7,760.9 in 2003 and then is adjusted with a bunch of items until you get to $8,740. Then the base is adjusted for the prebate in the amount of $1,746.1 to bring the base down to $6993.8. That makes the tax inclusive rate 19.3%, or 23.8% exclusive. The bill's tax inclusive rate is 23%. That doesn't mean that the embedded taxes included in prices is now 19%.
To recap, the fact that the embedded taxes on average are approximately 23% and the Fair Tax rate in the bill is 23% is coincidence. For one thing, the current tax base and the Fair Tax base are not the same, and part of the cost is compliance costs.
One interesting note, The tax base for the purchase of new single-family homes is $310.6. That means that if these were excluded the exclusive tax rate would increase from 23.8% to 25%. That isn't too much, but if we exclude that, why not exclude lawyer fees?
Not according to HR25, I won't. I'd say the Fair Tax would be absolutly GREAT for you
From what I've seen, it would be absolutely GREAT for everyone, that's what scares me.
I don't itemize now because my home mortgage interest deduction is not as much as it once was.
I thought you weren't going to buy the book? You didn't want to give Boortz any of your money. Or did you just do it the cheap way and let somebody else buy it and read their copy.I bought it. I'll just put a fake Boortz signature in it and sell it for a profit on eBay. :)
Or did your buddies on K-Street give you a copy?I can honestly say I know no one who works on K-street.
She wouldn't have to be rich to be evil.
Bogus.Let's see a quote from an economist who says consumer prices stay the same while take home pay goes up.
Wow, are you just a moron or something?
They are not my numbers, they are from Bush's Office of Management and Budget. They show the total taxes collected that would be eliminated from the price of all goods and services in the US.
Guess what? They don't add up to 20% embedded taxes. They don't even add up to 7% embedded taxes.
The drug dealers can get the rebate IF they register for it and have a valid social security number. Will they register? Who knows.
"Small businesses like S-corps and proprietorships don't pay any taxes now. THey collect income, write off salaries and business expenses and the owners pay income taxes on what is left over.
Business expenses are not taxed under HR25, see post 316. So this is a moot point except for the question of whether or not all the compliance costs will still remain in place to ensure that businesses are now complying with the FairTax code. We get rid of the IRS and replace it with 50 State revenue collectors each with the power to audit?"
Have you ever been through a sales tax audit? I have. I haven't been through an income tax audit, but I know enough about them to know that they are exponentially more difficult to endure than a sales tax audit. The sales tax audit was for a small software company. They sent in one auditor - he was in by 9, out by lunchtime. I dare say that an income tax audit for that same company would have required more than one auditor (which means more than one set of documents being requested) and they would NOT have been out by lunchtime. It would have taken a couple or three days, probably. So equating an income tax audit with a sales tax audit is not apples to apples to begin with.
Second, it is a NATIONAL Retail Sales Tax administered by the states. A business with locations within a single state would remit its NRST through that state. Even businesses with multiple state locations could probably elect to consolidate their return for all locations through a single state - the one their HQ was located in. Even if they didn't do that, there would still be only one state that any single location would have to deal with. I think you are getting this confused with state sales taxes, where any state you sell into would have the right to audit. There wouldn't be any need for that, because you would not have the myriad of state differences to deal with.
Uh, you wouldn't be filing a tax return, so there is nothing to deduct depreciation or interest from! Businesses will no longer file income tax returns, included self-employeds, partnerships, LLCs, estates, trusts, corporations, etc. Am I missing something from your question?
Be aware, RobFromGa, that the poster we know as Nightie is a virulent opponent doing nothing but attacking the FairTax and/or supporters at everry opportunity.RobFromGa, I'm sure you will recognize this as an ad hominem attack. They can't address the message so they go after the messenger.
As to Nightie's post #61 he points you to, it has been, verbatim, posted by him several times on these threads - and refuted just as many times.Actually, they've never been refuted. So, pigdog, can you show me one quote from an economist that says consumer prices will stay level while our nominal wages stay the same (take home goes up)? One?
Boortz's point was correct enough (and he was also right about the prebate) but not responsive to the caller's concern as you point out.
Since the caller was using already-taxed money he was concerned about paying what he views as another tax on that money (whether it's for cheaper priced things or not) and yes, he would pay the sales tax - assuming certain other things were true. Used goods are not taxed, for example, and a given consumer can in effect lower the taxes he pays by judicious use of used goods (many people buy used cars and used houses right now).
Also, and a major point the caller is missing is that when he spends his $600,000 - or some part of it - under the income tax system he is effectively taxed by having the prices of goods inflated by embedded tax costs (e.g., he pays quite a bit higher prices partly caused by embedded tax costs) - which may have been what Boortz was driving at.
The caller is taxed again (when his money currently spent) by these hidden taxes (as some call them) but he is seldom aware of it since they are, after all hidden (but they are there). In addition, the caller could invest this money (or some part of it) earning even more and be judicious in consumption and do quite well.
Because as conservatives we believe in free trade, remember?
Whoa!! YN got body slammed. No wonder he wants you off the threads.LOL! You guys crack me up. That wasn't a body slam. You want to see a body slam?
Read this article about how the states could replace their taxes with the Fair Tax base and rebates: http://www.fairtaxvolunteer.org/smart/tax_system.html
That is correct. If it is invested, it stays in investment tax free. Until the no good heirs spend it, of course. LOL
At least the pimped out drug dealer will be paying taxes. He is still a lawbreaker but at least he's not a tax law breaker.
Only 160 more posts to go and you will be in real-time. Read faster :-)
The drug dealers can get the rebate IF they register for it and have a valid social security number. Will they register? Who knows.Why wouldn't they? It's free money. I'm sure some of them will figure out a way to register twice.
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