WSJ: One Simple Rate - A flat tax would uleash a stupendous economic boom, by Steve Forbes

Wall Street Journal ^ | August 15, 2005 | STEVE FORBES

[groanup]

It is what taxes are assessed on, not the entities who pay the tax.

Do you mean money? The amount of tax collected is directly related the the behavior of the taxpayer. If the taxpayer doesn't work he pays no income tax. If the taxpayer doesn't but anything, he pays no sales or excise tax.

[Your Nightmare]

Works great (but only for those who can/will read.

And drink the Kool-Aid.

[pigdog]

Would you like a sip, My Pretty???

[GVnana]

Got it. Thanks.

[GVnana]

The fact that you are even considering this worse than the IRS shows a little naivety on your part. Once the government collects income tax from the individual, it doesn't come calling. Oh, really? Ever heard of an IRS audit?

Now who's being naive? Yes. I've even been through one. If you'd can your put-downs and biases we might have a discussion.

Otherwise, if you just want berate people who may not agree with you, you don't need to reply to my posts.

[GVnana]

Do you collect state sales taxes now? Small businesses in 45 states do right now. Every day.

NO. I don't. I work in the service sector like your plumber, your doctor, your investment broker. The sector of this economy that seems to be the elephant that nobody's talking about in this thread.

[GVnana]

Nor does the FairTax require any such alteration in your charges. It does require that you provide your retailer purchaser with an invoice that is very simple in form and that you retain a record of same.

I don't have retail purchasers. I work in the service sector. My customers are not billed alike. In fact, what my customers get billed changes on a daily basis depending on market factors and my best judgment of the work involved on their order.

[ancient_geezer]

Federal revenues have gone up in the last few quarters, while we had tax cuts in the last two years.

Ancient Geezer has disputed that many times on these threads...

Really, Lewislynn?

Perhaps you aren't looking at the same sources I am, tax rates relative to NNP are lower, federal revenues rise as the economy grows overcoming lower tax rates. Or haven't you noticed?

 

refer Tax Freedom Day 2005 report PDF: Special Report No.134, April 2005

 

Total Effective Tax Rates by Level of Government Percent Net National Product(NNP)
Year	Federal	State	Total
1996	21.3%	10.4%	31.6%
1997	21.8%	10.3%	32.1%
1998	22.4%	10.4%	32.8%
19990	22.5%	10.4%	32.9%
2000	23.1%	10.4%	33.5%
2001	22.2%	10.5%	32.7%
2002 1	19.6%	10.2%	29.8%
2003 2	18.8%	10.1%	28.9%
2004 3	18.4%	10.2%	28.6%
2005	19.0%	10.1%	29.1%
Notes: Leap day is omitted to make dates comparable over time. Since depreciation is not available to pay taxes, GDP is an overstatement of spendable income for the purpose of measuring tax burdens. Depreciation is netted out of NNP. "Overall, NNP provides the best statistical representation of the common notion of “spendable” resources. In 2004 NNP was $10,371.6 billion. Like GDP and PI, NNP is a component of the National Income Product Accounts (NIPA). These accounts are computed and compiled annually by the Commerce Depart-ment’s Bureau of Economic Analysis (BEA)." Tax Foundation Special Report No.134, April 2005 0 First year introduction of HR2525(Fair Tax legislation). 1 Economic Growth and Tax Reform Reconciliation Act of 2001 2 The Job Creation and Worker Assistance Act of 2002 3 Job Growth and Tax Relief Reconciliation Act of 2003 Sources: Office of Management and Budget; Internal Revenue Service; Congressional Research Service; National Bureau of Economic Research; Treasury Department; and Tax Foundation calculations.

 

GDP & NNP are now growing with consequent growth in federal tax receipts with the tax cuts implemented by the Bush Administration.

 

Table 1.7.5. Relation of Gross Domestic Product, Gross National Product, Net National Product, National Income, and Personal Income
[Billions of dollars]   Seasonally adjusted at annual rates

Today is: 8/17/2005   Last Revised on July 29, 2005  Next Release Date August 31, 2005

Line		2003    III	2003    IV	2004    I	2004    II	2004    III	2004    IV	2005    I	2005    II
1	Gross domestic product	11,087.4	11,236.0	11,457.1	11,666.1	11,818.8	11,995.2	12,198.8	12,376.2
2	Plus: Income receipts from the rest of     the world	344.3	384.9	380.0	401.2	418.1	462.4	462.3	---
3	Less: Income payments to the rest of     the world	277.0	291.7	297.0	354.5	369.6	425.6	422.9	---
4	Equals: Gross national product	11,154.8	11,329.2	11,540.1	11,712.8	11,867.3	12,032.0	12,238.2	---
5	Less: Consumption of fixed capital	1,337.2	1,352.5	1,371.1	1,393.8	1,534.1	1,442.0	1,448.4	1,456.1
14	Equals: Net national product	9,817.6	9,976.8	10,169.0	10,319.0	10,333.2	10,589.9	10,789.8	---

 

Table 3.2. Federal Government Current Receipts and Expenditures
[Billions of dollars]   Seasonally adjusted at annual rates

Today is: 8/17/2005   Last Revised on July 29, 2005  Next Release Date August 31, 2005

Line		2003    III	2003    IV	2004    I	2004    II	2004    III	2004    IV	2005    I	2005    II
1	Current receipts	1,808.9	1,887.9	1,917.8	1,951.4	1,975.4	2,054.6	2,201.5	---

 

Interesting how that works isn't it?

[pigdog]

Actually GVgirl, we've talked a lot about taxing of services on several earlier threads, so it is certanily is no "elephant under the table" - though it may be an "elephant" because it makes up over half of consumption. I used the term "retail purchasers" to try to indicate to you that as a service provider, your customers are purchasing your service "at retail" IF it is taxable. You might also have purchsers who are NOT retail purchasers and not taxed at all.

For the purposes of the FairTax it may be that your services ARE taxable (but not all services are). If you provide what would be an end use aervice to a final consumer rather than something to, say, a business, then the service might be taxable. Since you haven't even generally described it, it's really not possible to guess or give examples.

I'm afraid, too, that you may be reading in too much complication and too much effort on your part as well as too much big-brotherism. The FairTax is a dramatically simple scheme and any collection and reporting you will do (a once a month two line report sent to the state sales tax folks with the amount you've collected) you will be well-paid for. There's no per-customer detail information as you are concerned about - none. Just the two line report indicated in Sec. 501 of the bill.

At any rate, IF the services are taxable (or some part of them) there's no requirement at all that they be all billed the same amount at all for the same (or different) services. That's completely between you and your customer as it should be.

In #502 just above, I posted two sections from the bill. Sec. 509 basically says you have to keep a record (paper or machine) of your receipts for a period of time and the receipts themselves are defined in Sec. 510. In describing the sevice - that description is yours alone; something meaningful to your business as general or specific as you like. There's no requirement about identifying the customer nor how much time you might have spent nor why you charged what you did. That's all between you and the customer.

I think you can quickly see that there will be many preprinted Invoice forms at Staples, etc. with preprinted numbers, and perhaps some of the oher information, too to save you time. It will basically be you recording the date, (assuming the vendor number, vendor name, and perhaps even the rate are preprinted), "Service A" as a name, the price tax-included, and then the amount of tax paid (23% x the tax-inclusive price). Give our customer a copy, keep a copy. That's the recordkeeping (period).

Then once a month, you add up the tax inclusive prices of he invoices (called "gross payments" in the bill and the amount of tax paid (called "tax collected" in the bill) and send that with your payment that equals the tax collected to the state sales folks. For this monthly "terribly big chore" you are paid a minimum of $200 or 1/4 of 1% of the tax collected - whichever is more. ou might make an esimate of your current service business and get at least a rough idea of how much this would be. The prebate you receive is, of course, a separate thing.

I was actually hoping that you would make use of the links we've given to both read the bill and some of the explanations on he FairTax website but you apparently haven't had time yet, but please do so. the website explains things well (better than I) and you can check other points that may concern you.

It is a gloriously simple tax sytem; far more so that the preesent one. Please invest a few minutes of your time.

[servantboy777]

Thanx a bunch for the post. It contained lots of good info. The Fair Tax "consumption tax or national sales tax" is in my opinion the way to go.

The actual base of persons paying into the system (is that better F authority) would increase through this plan.

The IRS would be diminished as well due to the smaller amount of persons being audited, not to mention the savings in paperwork and publications alone.

[groanup]

You got it brother.

[servantboy777]

If I made a mistake in terminology, I'm sure that most people could get the gest as they read on. I understand your point, however I don't feel ANYONE on this thread is an expert---not even you. So please forgive me and lighten up. I'm sure your a nice fella, but we don't need to act as if were lawyers with the CATO Institute.

[groanup]

...so the small animals will not feel insulted and demeaned.

The squirrels raiding my bird feeders are giving me the finger as we speak. They also seem to be sharpening their claws.

[Final Authority]

First of all, you meant gist, not gest, as spelling is as important as understanding the meaning of words if we are to speak, write, and think, in English, the language of greatness all around the world, that folks who wish to elevate their status, seek to understand and use English. It is for a simple reason, as great works of art, science, technology, industry, commerce, and politics, are developed within the English language. Because of that, terms and understanding have been developed within this understanding that doesn't exist in others. As it is, it is the best tool to develop, process, and communicate ones thoughts. Use it correctly and wisely.

[servantboy777]

I bet your first name is Richard, if it isn't, it should be. So how's that for an English lessen Dickie old boy!

[pigdog]

I've heard from some Appalachian friends that fried squirrel is pretty tasty ... wonder about fried Squirrel?

[pigdog]

You're a mindreader, Finial??? You KNEW he meant "gist" instead of "gest"??? Amazing, since the word "gest" could very well apply since it means a series of adventures - which could perhaps be his intended meaning.

Maybe YOU should lighten up. With either meaning I think most readers will get the drift of what he said. Sounded fine to me.

[pigdog]

Hey, GVgirl ... check #549.

[servantboy777]

Ya made my heart warm up a bit---thanx.

[pigdog]

Don't mention it - just seemed like an appropriate observation.