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???
. Too bad we do not see eye to eye on this issue as together we could have made for a very moving force.
ROTFLN(_|_)O!!!
Sorry not interested in the offer of a position of propagandist for you daydreams.
A.G. wrote: You do have at least one sponsor and a bill introduced into the House or Senate don't you?
Can’t seem to find anyone.
A word of advice.
When you can't convince even Ron Paul, the most libertarian Congress Critter out there, to sponsor your schemes you can be sure you are so fundamentally out of the ball park that you should be taking a good hard look for you personal level of delusion and egomania in action.
Tax going off to Uncle Sugar is tax going off to Uncle Sugar, regardless of how you raise it or what you call it. When it costs me $1.30 for a $1.00 item, and we both know it will end up being more than that as City, County and States taxes are added on top of that, it's more than a 23% at the counter retail cost. Even Fairtax.org admits it actually 30% retail cost at the counter.
Since we are on the subject, how about the taxation of employee discounts above 20% at the rate the item would have sold to the public? Hmmm, what will the actual rate of that taxation amount to?
Let's see if I can remember my Grammar School Arithmetic. An Item sells for $1.00 to the public. I receive a 25% employee discount, so I pay $.75 for it. A 23% at the counter retail cost would be about $.92. The actual retail cost at the counter would be about $.98. However, since the employee discount is taxed at the rate it would have been had the item sold to the public for $1.00, it now costs me $1.05.
Hopefully, my employer will cut my discount, thereby saving me some money. But wait, isn't the employee discount supposed to save the employee money anyways and encourage them to buy from their employer?
Check out Chapter 9, Section 901, paragraph (g). for the taxation of certain employee discounts. Boy, this just sounds better and better all the time.
Like I keep shouting, no tax reform is going to work until we demand and force government to curtail the out of control spending. Call it anything you like, charge it anywhere you like,a s long as spending is out of countrol on pork projects and wasted all over the world, any tax imposed will end up costing the American Taxpayer through the nose and beyond.
Wasn’t an offer. I’m not fond of people who bend the truth and facts to suit their purposes.
Good Lord, PD, can't you read the FAQs supplied at the fairtax.org site? They are the ones saying the retail at the counter cost will be 30%
Now, tell us what it will be AFTER 2007, the first year it is implemented.
Well, let's see now, Nightie - about those three Out Of Context quotes of your ... and YES they were all three out of context as posters can determine if they wish to go digging through the requisite posts and links. But I doubt that's at all required.
I’m not fond of people who bend the truth and facts to suit their purposes.
Unfortunate that you hate yourself so.
That was not what I was discussing AT ALL - and you clearly know it - like a kid caught with jam on his face.
I stated the bill's rate was 23% - are you tring to pretnd that isn't so??
You forgot to use the word "inclusive," didn't you? Regular sales taxes are "Exclusive," as stated at fairtax.org. However, making them "inclusive," as is the income tax at present, the 23% rate becomes a 30% at the counter retail rate.
You have to remember, you are selling this white elephant to us dumb American taxpayers without all the intelligence of those of you who are pushing this off on us all and that care mostly what the end cost is, not legalese to make us think the actual cost is lower.
BTW, none of you have yet explained why that little tidbit from fairtax.orgs FAQs is buried near the bottom of the last page of the FAQs.
"A word of advice.
"When you can't convince even Ron Paul, the most libertarian Congress Critter out there, to sponsor your schemes you can be sure you are so fundamentally out of the ball park that you should be taking a good hard look for you personal level of delusion and egomania in action."
I'm not active any more on Capitol Hill . . . living in Florida now and enjoy life. But I’m sure you recall the book titled "Prosperity Restored by the State Rate Tax Plan" a presentation of the founding father’s original tax plan! I’m sure you must also know the state rate tax is in the Constitution Party National Platform
“To the degree that tariffs on foreign products, and excises, are insufficient to cover the legitimate Constitutional costs of the federal government, we will offer an apportioned "state-rate tax" in which the responsibility for covering the cost of government obligations will be divided among the several states in accordance with their proportion of the total population of the United States, excluding the District of Columbia. Thus, if a state contains 10 percent of the nation's citizens, it will be responsible for assuming payment of 10 percent of the annual deficit. The effect of this "state-rate tax" will be to encourage politicians to argue for less, rather than more, federal spending, and less state spending as well.”
Seems the more you open your mount A.G., the more you bite your toes.
JWK
Seems the more you open your mounth John William Kurowski, the more you bite your toes.
I’m not fond of people who bend the truth and facts to suit their purposes.If you only knew...
Seems to me with a growing economy arising from more efficient business operations and increased capital investment providing additional implementation of technological productivity improvements, wages are more likely to increase with productivity and time than to fall as you seem to think.AG #534 12:09 PM PDT:
Don't know of many employers likely to raise wages of any employee without big guns behind him forcing it (e.g. unions & stikes), or exceptional merit of the individual (tail of the bell curve) in improving the bottomline of the business. Don't see either happening with repeal of a tax that is levied on a business. Can see a business take that action that will maximize his profit in a competitive market. Arbitrarily raising wages of all employee's has not genenerally been shown to be a profit maximizing activity.Calling it both ways, by his own hand, within a matter of minutes when it suits'm.
591 posted on 05/18/2005 10:18:18 PM PDT by lewislynn (My other car is an XC90 T6 AWD....)
I believe your evaluation is not correct at all.
If your counter were correctly reasoned, then employers who abuse their employees in their pay packets by requiring uncompensated overtime, by conspiring with other employers to hold down wages, or by demanding that employees "tip out," should have gone out of business for lack of employees. That isn't true, and so your counterargument falls to the ground.
Ah, but how long before the 'Rats start screaming about "closing the loopholes"?
And if new goods are taxed, and used ones are not, won't the marketplace bid up used goods? So that the tax has an effect on raising the expense of used goods.
My "choice" is really Hobson's choice. Saying that I can always refrain from paying the sales tax by refraining from buying goods and services isn't really a "choice" that rises to the level of "freedom", any more than it would be descriptive of my "choice" to stop breathing, to call my use of oxygen "voluntary" and my refusal to breathe "freedom", for the purposes of taxation.
Sorry my little grasshopper friend, but the proposed Fair "Tax cannot guarantee even one of its stated attractions because the proposed legislation, even if adopted by a current Congress, and signed into law by the President, is nothing more that a list of suggestions to all future Congresses, and would not bind any future Congress. Future Congresses would be free to tinker with the original proposal and manipulate it to accommodate the politically influential just as is now done with the current system!"
And do you have a bill in congress now that "guarantees" all of its "stated attractions"? Mind giving a cite to it? I am sure many of us would like to check it out.
You apparently believe that your position is strengthened by the use of condescending phrases like "little grasshopper" and "class is out now". I would respectfully submit that your desired objective is much better accomplished by pointing us in the direction of a proposal which has been well thought out, has some beginnings of support and documented in detail. Failing that, your insults will not be very persuasive.
Well, you found it. Must not be too hard.
Well, let's see now, Nightie - about those three Out Of Context quotes of your ... and YES they were all three out of context as posters can determine if they wish to go digging through the requisite posts and links. But I doubt that's at all required.You obviously have no idea what it means to quote "out of context" because i did no such thing.
K's assumption noted in his quote was for both things which were in the same footnote and logically stemmed from the same assumption.Huh? Is this English?
Your pretense they are somehow separate statements bolstering each other is nonsense. Both stemmed from the same assumption to illustrate the point he was making. They are both part of the same thing.Hmm. Let's see:
This sentence and the one preceding it assume the price level will rise with the adoption of the Fair Tax. [One assumption.] If the Federal Reserve used its monetary policy to maintain the consumer price level, the adoption of the Fair Tax would entail a decline in the level of producer prices and, thus, the nominal wages and capital income received by productive factors. [Alternative assumption not used in the point made in the text.]
You merely selectively picked snippets that would make it seem (as I said to the unwary who don't know of your deviousness) that he was critical of the FairTax.The quotes I posted weren't about the FairTax in general, the were specifically about what would happen to the price level after the transition to a NRST. What Kotlikoff thinks about the FairTax is irrelevant to his opinion of the price level effects of transitioning to a NRST. I also didn't point out the part where he said the required rate for the FairTax would be 30% inclusive. Why? Because it wasn't relevant to the point.
REFUTATION of #2 stands as it identifys a bogus attempt at misdirection.Status of quote: STILL UNREFUTED
NEED YOUR READING GLASSES OLD FELLER! The authors were not who I quoted at all.First, I didn't say you quoted them. Second, you most certainly did quote them.
That was my observation which follows logically from the authors discussion. I said prices would drop with the onset of the FairTax ... ME - not they.Yeah, I got that. You said it, they didn't. I'm glad you are admitting that you changed what they said.
But while we're in their paper, it's worth noting that they point out that your hero GaleWhy do you think Gale is my hero?
But while we're in their paper, it's worth noting that they point out that your hero Gale - in their words of fan economists observations ... "Throughout his analysis Gale asserts inconsistent opinions on the impact of both repealing the existing tax system and of replacing it with a sales tax. He states that income taxes are “clearly incorporated in the price of goods that are bought ...". MY, MY - certainly if Gale says this it must be so, right??? If income taxes are so incorporated then how is it that prices do not drop when these are eliminated by the FairTax.They accused Gale of being inconsistent, not wrong. The quote I posted is from this exact section where the authors of the FairTax tax explain the either/or situation with wages and prices. Here is exactly what they say (I don't have to insert my opinions when I quote):
He can not hold both points of view simultaneously. Federal income and payroll taxes either are or are not incorporated into the prices of goods and services. If they are embedded in prices, their removal will reduce prices. If they are not, then their removal will not reduce prices but instead returns to labor and capital will go up. If returns to labor go up, people will see their after-tax wages increase and asset values will increase since the present discounted value of the new, higher returns will be higher.
Sorry, Nightie - you shouldn't speak out of all three sides of your mouth at once ... it garbles the message.When discussing what others have said, you shouldn't speak at all. Do what I do and let their words do the talking.
REFUTATION of #3 also stands.Status of quote: STILL UNREFUTED
Your snippet was taken from a FOOTNOTE to a portion of a very good (and lengthy) study showing how housing prices would decline considerably and buyers would have much more income to purchase homes with.So I quoted a footnote. What's the point?
And that's true enough but the discussion was about much higher wages for buyers and considerably lower prices for houses and not some theoretical speculation on tax incidence or whether prices would go up, down, or remain the same.Again, the discussion wasn't about lower prices for houses at all, you are making that up. The assumption that Mastromarco and Burton are using in this example is that consumer prices rises as do after-tax wages. This is completely consistent with every quote I have posted, and completely inconsistent with what you claim it says.
#4 REFUTATION stands also.Status of quote: STILL UNREFUTED
No I didn't "forget". It isn't necessary. If you'd read the bill, you'd see why. Throughout the rate is identified as tax inclusive.
Pretending otherwise is foolishness - and has been tried repeatedly on the threads. That's just about the first things the SQL types do; say it "really" is 30% (the t.e. rate is actually 29.87% but sometimes rounded to 30%) and that saying otherwise is a "lie". It really is either, depending upon what it's being used for.
The rate used in the bill is 23% (and as pointed out above, it is tax inclusive throughout the bill).
There are still those who try that - witness your enending series of attempts to do that very thing.
It really is either, depending upon what it's being used for.Depending on what it's used for?
You mean if it's used for fact it's 30%. If it's used for deception it's 23%
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