Posted on 08/15/2005 5:55:06 AM PDT by OESY
A major domestic battle looms this fall, when tax reform-- a centerpiece of the president's bold domestic agenda-- will finally be on the table. The President's Advisory Panel on Federal Tax Reform is expected to release its findings by the end of September. After the political shellacking the White House took on Social Security, the administration will be strongly tempted to take a conciliatory path that supports only superficial reforms, essentially preserving the status quo of our hideous income tax code.
Such a course would have perilous consequences, economically and politically. In fact, the administration has an opportunity here to boldly retake the initiative, to recover lost political support and thrust an already decent economy into high gear and, at the same time, make America better able to meet intensifying competition from China, India and others. How? By junking the entire federal income tax code and starting over with a flat tax. A growing number of countries are doing this -- and so should we.
The current system is beyond redemption, a beast whose complexity, confusion and outright unfairness have corrupted our economy and society. Americans waste more than $200 billion and over six billion hours each year filling out tax forms. They engage in all kinds of useless economic activity intended to take advantage of the code's complicated maze of deductions and to reduce taxes -- from deducting donations of old socks to making unwanted investments. The waste of brainpower -- at a time of increasing global competition -- is incalculable.
The code corrupts our system of government by encouraging the crassest political conduct and by creating a massive, intrusive federal bureaucracy. One-sixth of the private-sector employees in Washington are employed by the lobbying industry. One-half of their efforts are directed at wrangling changes in the tax code....
(Excerpt) Read more at online.wsj.com ...
Sorry - that doesn't qualify as even beginning to be a revenue neutral showing of numbers. It merely illustrates what has become obvious already.
I'd be all for filling out my taxes on a postcard. Fine. Just as long as my pitiful salary is taxed at the same rate as the $10 million trust fund the guy down the street lives on.
You will also be subject to the same audit to assure what ever you put on that post card is correct.
With less information guess what happens to the IRS to assure it can administer and verify the accuracy and validity of those postcard Flat Tax returns.
"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.
Patrick Henry, Virginia Ratifying Convention June 12, 1788:
- "the oppression arising from taxation, is not from the amount but, from the mode
I believe I would much rather pay retail sales taxes to a business and avoid the hassel and intrusion of a federal IRS myself.
Individual Tax Return for the FairTax National Retail Sales Tax:
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That's just more childish nonsense. The request was for you to show your revenue neutral derivation from you "tax plan" in #393. You haven't even begun to do so - and apparently are not capable of doing so.
That's fine, too - it gives folks a good idea of where you're coming from.
You ignore any example. You can't show where the 23% embedded tax will come from. so you keep going back to the same government economic reports. They don't pass the smell test to some of us so we look at real business example to try to figure out how this would happen in real life. You are relying on ivory tower Harvard economist guesswork and are unwilling to engage your brain is discussing specifics. I have thrown out an example-- shoot holes in it.
The revenue neutral calculation you are talking about is a calculation of how much stuff is sold that will be subject to the Fair Tax, divided by the amount of revenue that needs to be replaced.RFG, the flowing paper discusses some of the ways the FairTax uses dodgy accounting to achieve "revenue neutrality." It's an interesting read.
I've seen the Fair Tax (also called by other names) kicking around for at least 20 years. And every version I've seen has two things in common:
A) Filling out your annual taxes will be easier! Do it in 10 minutes! Honest! We wouldn't lie!
B)The very rich drop their tax rate on unearned income to something approaching zero.
I have no reason to believe this scheme is any different.
Well, friend, let's see your economic derivation of the "tax plan" you proffered in #393 and I'll guarantee it won't be "ignored".
You are the one unwilling to accept any studies from well-recognized economists. In fact it's quite clear that you have never studied the revenue neutral derivation(s) you were linked to many threads ago.
You even try to denigrate the 75 economists who clearly strongly support the FairTax to the President and to Congress:
http://www.fairtax.org/pdfs/Open_Letter_President.pdf
This one won't! In fact, to me, that is one of the greatest features of the FairTax! It doesn't care what, or how many, the sources of ones income may be which, when you really think about it, shouldn't be any of the government's business in the first place in a free society.
#393 was a joke and you know it. You are just stonewalling on trying to think on your own without your canned BS responses. If the question doesn't fit the canned mold, you can't answer it. Real world examples with real payrolls and real costs don't fit your models.
If you can show where the 23% embedded taxes are coming from for this one typical business, then you will have gained a FairTax supporter. You may not even understand that the 23% is not there, and might learn something useful in trying to figure it out. There is no magic money here, the business has labor costs, supply costs, some overhead, and profit.
Find the hidden 23% and you're a hero.
I do my own thinking, I don't know these people and I'm not particularly fond of professor types. Most of them know 58 sexual positions but can't get a date.
I'd trust a bunch of business guys at a trade show any day over a bunch of academics. But they could be right, help them make their case with a real world example...
Well you should because it is! The Fairtax does not tax ANYONE'S income at all! It only taxes what they choose to spend on NEW goods and services!
A) Filling out your annual taxes will be easier! Do it in 10 minutes! Honest! We wouldn't lie!
Certainly true if you are talking about Forbes Flat Tax, or any of the minor modifications to the current income/payroll tax system.
However, it should be noted the individual citizen does not fill out annual taxes or any such returns in a retail sales tax system. They pay tax collected by the business that remits the tax to their state tax collection agencies.
B)The very rich drop their tax rate on unearned income to something approaching zero.
What does unearned income mean to taxes collected with retail purchases? What does it matter whether the income is earned or unearned or just a can of coins you found in your back yard?
If money is spent for personal consumption by buying retail, it gets taxed the same rate whether you are Bill Gates cashing a dividend check, Tereza H. Whats-her-name clipping taxfree bond intrest, the welfare mom looking for a beer, or JoeMechanic's wife spending the hard earned paycheck.
Get your head out of the income tax box and wake up.
The FairTax legislation is designed to replace all federal income/payroll taxes with a single stage, single rate retail sales tax on the purchase of retail goods and services.
I have no reason to believe this scheme is any different.
That certainly would be true for one who has obviously not bothered to even read the content of the FairTax legislation. I suggest you bother yourself to actually look at it over on Thomas, the Congressional website, rather than merely suppose:
H.R.25Fair Tax Act of 2005 (Introduced in House) TITLE I--REPEAL OF THE INCOME TAX, PAYROLL TAXES, AND ESTATE AND GIFT TAXES
TITLE II--SALES TAX ENACTED
TITLE III--OTHER MATTERS
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If you can show where the 23% embedded taxes are coming from for this one typical business, then you will have gained a FairTax supporter. You may not even understand that the 23% is not there, and might learn something useful in trying to figure it out. There is no magic money here, the business has labor costs, supply costs, some overhead, and profit.He can't and he knows it...he'd much rather lie about it and denigrate you at the same time.Find the hidden 23% and you're a hero.
"A couple of the opinions attempt the "... it's a wash ..." argument that you seem to prefer. It looks no better in their opinion that in yours and is easy enough to refute by taking, say, a $100 drug sale.The sale is not taxed under either IT or FairTax. Under the FairTax when spent by the drug dealer, the tax revenue gained is $23. Under the IT, the ONLY revenue gained (if any) would be at most the profit on the thing sold to the drug dealer ... let's say the seller has a good margin of 25% on sales or $25 on the drug dealer's $100. Of this $25, only a small portion would ever possibly end up as tax revenue since the tax on the $25 profit would likely be something like the 15% rate - or $25 x 0.15 = $3.75. This falls far short of the $23 tax "contribution" under the FairTax so the "it's a wash" arguments are nonsense no matter who makes them."
You've already said that was a hypothetical example and you know it. Now you're even trying to back out of your "tax plan" since you can't show it to be revenue neutral.
And be "your hero"?? (yeah, right!)
You've gotta be kidding now in view of your posting history. It's certain in the "real world" that you don't wish to learn about anything at all. Nor will you ever admit that anyone has shown you anything. Just stop the pretense. That stunt worked a few threads ago when some of us thought you really did want to learn. You've made it obvious you don't and you've been given ample information but choose to ignore it.
Why should anyone waste their time on your piffle?
But Looey, that example isn't talking about embedded tax costs at all - and you dont understand it apparently. It illustrates the taxe contribution gained under the present system and the FairTax from the illegal economy. Embedded tax costs don't enter in.
I think you know you are backed into a corner and are looking for more smoke and mirrors to escape. Of course it is hypothetical but it is intended to be treated as real for the purposes of dicsussion.
23% is a lot of money- this is not like hunting for needles in haystacks or fine margins, this is a massive part of the cost that you claim can be removed.
The only place it could be "found" is the income and payroll taxes that are now being paid to the FedGov. These ARE embedded taxes and they could be removed from the cost of the goods, and this would drop the prices of the goods. But the Fair Tax doesn't give the business this tax relief, it gives it to the employee.
Not wanting to answer a valid question because I have proven that I ask questions you can't answer. You are good at giving answers to questions that weren't asked. Staying on a real track to actually get anywhere is impossible for you because you don't actually understand what you are saying, so you resort to saying you could answer the question, but won't because I'm not worth an answer.
Since you are so intellectally superior to me I'd think you'd want to prove me wrong, but you can't. And you wouldn't be my hero, you'd be the hero of the entire FairTax movement.
In fact, why don't you tell us where to get rid of the 23% right now, since it isn't related to the income tax paid to the employees, we should be able to eliminate the 23% tomorrow.
Darn! Now I feel guilty for eavesdropping! I read it. Sorry Pigdog. Louie Louie, isn't it past lights out at your place?
Hey, Rob - no one that I know ever said that embedded tax costs were ever composed - even partly of income/payroll taxes (even the ER portion which certainly belongs properly to the employee).
Intellectually superior to you? - I suppose you think that's flattering, but I'm just a plain, old country boy ... but I am willing to read, study and learn form many different economic analyses. That's a mark against you since you are not and think you are "right".
Believe me there is no "corner" that you have or even could have "backed me into" - that merely shows you own arrogance. Perhaps if you'd really paid attention to much of the material you'd been directed to, you'd have a better realization that there are places other than employee wages/taxes where costs can build up.
And as I said you can stop the pretense about wanting to "find out" something. It's clear that's not what you're after at all.
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