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???
Yep, many of us know that and have made that point in the past.
Yes ... it really IS simple as your post shows.
Too bad you don't understand your own post.
In the Ccase of FDR, the "relief" came in the form of payroll taxes and withholding from paychecks which impact the lowest earners among us more that those higher up the economic ladder.
the FairTax gets rid of that sort of nonsense.
National sales tax with a low income credit is the way to go. This will stem a huge flow of untaxed income given under the table. It will also illiminate the IRS debacle. Government is against the sales tax because right now they have both a sales and income tax.
My post #687 contains no "fibs" despite your attempt at derision.
Perhaps you should it again and understand what it really says. And, oh, yes Dick Armey has failed in his attempts at getting his income-based tax supported.
It would be manifestly stupid to eliminate the very income tax law that is paying for you and your congressional staff (among other things). CongressCats may be stupid sometimes but they're not THAT manifestly stoopid.
The "American People" have been clamoring for less taxes for a long time and it hasn't happened yet, has it? More "American People need to become aware of the out of control spending and demand it be stopped. Until then, it's business as usual, whether under an income tax or a sales tax.
Bigun, I chose a car as an example because I have worked at auto dealerships for well over 20 years of my life. What you fail to realize, in the example, is that a used car with warranty left on it for a lower price is a lot more attractive to buyers than a new car with 30 cents on the dollar tacked on to pay for the governments out of control spending.
Can you honestly say that you are willing to pay 30 cents on the dollar for a new car when you can get last years model for a lot less, provided the dealer doesn't already jack up the price of the used car to make extra profits?
If you think all taxes are HIDDEN in the prices already, try comparing your Maronie to your contract.
Yes, but they are replaced by how many? Are we going to now be required to retain all sales receipts to show we actually are entitled to the prebate? What extra load is put on sellers, including, I presume, little Johnny down the street that mows our lawns and little Janey that babysits the kids, since they too will be supplying a service that I see no exclusions for in the bill?
For businesses, how much more paperwork will be involved and how many more employees will have to be added to cover all that paperwork, thereby driving up the prices of goods again? As businesses gain expenses, they pass them on to the consumer through prices, inlcuding the wages of any hired to submit, maintain and report the mountain of suggested paperwork called for in the new taxation.
Uhhh, P, D, we are discussing a new taxation claimed to end a current one. To end a Constitutional Amendment it requires a new Constitutional Amendment repealing the first Amendment, yes? You don't get one without the other, my friend.
Sorry, P.D., but it's right there on Fairtax.orgs own website, buried towards the end of their FAQs. I'll post it again, as it is written in their own words.
Fairtax Volunteer FAQ #47
I know the FairTax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter? 30 percent. This issue is often confusing, so we explain more here.
When income tax rates are quoted, economists call that a tax-inclusive quote: “I paid 23 percent last year.” If that were the case, for $100 one earned, $23 went to Uncle Sam. Or, “I had to make $130 to have $100 to spend.” That’s a 23-percent tax-inclusive rate.
We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
Sales taxes, on the other hand, are generally quoted tax-exclusive: “I bought a $77 shirt and had to pay that same $23 in sales tax. This is a 30-percent sales tax.” Or, “I spent a dollar, 77¢ for the product and 23¢ in tax.” This rate, when programmed into a point-of-purchase terminal, is 30 percent.
Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100.
Spend that same $100 under a sales tax, you pay that same $30, and the rate is quoted as 30 percent.
Perhaps the biggest difference between the two is under the income tax, controlling the amount of tax you pay is a complex nightmare. Under the FairTax, you may simply choose not to spend, or to spend less.
http://www.fairtaxvolunteer.org/smart/faq-main.html#47
Yes, choose simply not to spend. We can cut out food, electricity, gas, etc. Oh wait, we'll get those back, provided we qualify and are properly registered with the new Administrating Authority.
I suggest you read your own supportive website closer. The 23% 'inclusive' rate amounts to 30 cents on the dollar at the retail checkout.
If that isn't sleight of hand, why word in such a confusing manner for those dummies amongst us to beleive we are paying a sales tax of only 23%?
Previously saved money would only be involved in paying the FairTax if it were exctracted from savings and spent for new, taxable items. Many things are untaxed such as used items. In addition, if the money were used by a business for normal busines expenses, those are also not taxed.
It's your choice - leave it in savings, earning untaxed money, withdraw and spend it for taxable items or withdraw and spend it for untaxed items. Your choice. That's called freedom. If your only concern is not paying tax, then leave it in savings or invest it into some other venue earning money - which is untaxed.
The key words are - YOUR CHOICE!!!
They'll do the same thing with them that they do today, stockpile it for whatever they wish. Do you honestly believe that criminals engaged in illegal activity will suddenly agree to paying out more of their ill-gotten gain to support this tax intitiative? That's more niavety than even my grandsons have.
Hardly, since if a business were to do that he'd soon be finding that his employees have migrated to his competitors (and earning than his remaining employees - if he had any). It certainly wouldn't be long before he went the way of he DoDo Bird.
I believe your evaluation is not correct at all.
You've asked this same question hundreds of time over the years, Looey - and it's been answered hundreds of times, too.
The answer is always the same ... it's up to you to decide what your essentials are, Looey, and no one else under the FairTax.
That's called "freedom". You seem unable to grasp that.
Not really.
I had no choice in paying my taxes on it at the time I earned it. It is post-tax money. Right now, I have the choice to take it out and spend it or keep it saved.
Right now, if I take out post-tax money and spend it, all I pay is a sales tax (which I would have to spend anyway).
Talking about freedom and choice is obfuscation - the fact is that money I earned in the past was already taxed as income. Now it would be taxed again by the same sovereign under its plan to give us an alternative to income tax. That's taxing the same money, twice.
New interest my money earns in the bank is another matter entirely and in that case you are right.
Well, Nightie your #61 on this thread (of which you seem so proud) is just the same old rehash you're done previously. Perhaps you have re-arranged to orde of some of the snippets, but that can easily be sorted out in my response to your original opost of this nonsense which was ---
There is no obfuscation except, perhaps, in your understanding of the present taxing mechanism. If under the present tax you took the money and purchased things you would actually be paying a sizeable amount in hidden (or cascaded or embedded) taxes and other costs (such as compliance costs) that increase the price of everything.
These have been found by some economists to amount to from 20 to 25% of the price of things. So you'd be "paying a tax", in effect even now by having these higher prices. And that would be the case no matter what you purchase.
With the FairTax, not only could you keep the money earning as an untaxed investment, but if you chose to spend it you'd have the choice to either buy taxable of untaxed items, depending on what was purchased. With the present system there is no such option and any income from investments would be taxed.
You'd actually be better off under the FairTax it seems to me.
The bill is defined as 23% t.i. so that it gives a clear comparison to the income tax rates - which are also t.i. Had you looked on the AFFT webvsite, there are many, many discussions pointing out that tax exclusive rates (which actually are 29.87%, but many people round them to 30%) are typically used when working with sales taxes.
There are very valid reasons for using the 23% t.i. rate in the bill.
There's no "slight of hand" at all and trying to pretend so is foolish. It's amazing that there are still those who try this after - what - 7 or 8 years on FR discussing this.
OK, I have not made myself clear.
I paid income taxes on money I have in the bank when I earned it. Now the federal government says that instead of an income tax (which my savings was subject to), they will be taxing my money on how I spend it. That's fine, except I already paid my taxes on money I had earned and saved!
So any money I earn now under the new system is placed on the same plane as the money I have saved (and already paid my taxes on). Money I earn now under a new system enjoys a benefit that the money I have saved doesn't.
Specifically, say after taxes I got 65 cents post-tax money for every dollar I earned, and I saved some of it. Any new money I earn goes into my savings at $1 for every $1 I earn under a Fair Tax system, and gets taxed at the consumption level.
The problem is that to match every new $1 (fair taxed) I earn, I need to have $ 1.53 (post-taxed).
What's so fair about that? And indeed, how does that leave me better off?
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