Posted on 08/18/2005 6:34:27 AM PDT by GPBurdell
PD, he must think he's going to have to pay the Fair Tax on all his materials and supplies for building his houses. There is no other explanation. Otherwise, at his income level he would be paying taxes at 35% instead of the Fair Tax rate of 23%. He really should have nothing to gripe about.
That's because you're losing the argument.
Um, I think you know this, but YOU don't pay the tax. Your customer does. Have you never bought anything in a store and paid sales tax?
Actually the Fair Tax name came from "the people" through focus groups and polling about the NRST and the concensus among those participating was that it was "a fair tax."
".....that the opportunity for politicians to meddle is so great they won't leave it alone and the regulations could make the income tax codes look like Cliff's Notes."
I agree with most of your post, but not that statement. I think there are two mitigating factors that might make your concerns less severe.
1. When you look at the current system, most of the complexity is in the deductions. That area is gone forever with a sales tax.
2. Could congress mess up the simplicity of the current FairTax design by picking winners and losers with different rates and exclusions? Sure, it is possible. In fact, there is a poster on some of the other tax reform threads who advocates just such a complication. However, as you will see from the responses to his posts, FairTax supporters are strongly opposed to such a modification of the proposal. If we build enough support to pass the FairTax, that will go a long way toward building enough pressure on congress to keep it relatively "clean".
My sense is that Congressman Linder would pull the bill before allowing it to pass in a severely compromised form. Of course, what constitutes "severely compromised" is a matter of judgement. However, I think major complications along the lines that you fear would pretty clearly be in that category.
New, retail goods. If I buy a used car, no tax. If I buy stuff at a garage sale or flea market, no tax. Buy something at good will, no tax. Buy something at eBay, no tax. Thats just to give a few examples.
It's 23% that comes out of my gross sales. I am the one who sends the check it and it comes off of MY bottom line. In the end the customer doesn't care if he spends $120,000 with sales tax or $120,000 with embedded taxes. The problem is, under the fair tax I will have to get $140,000 for the same house to break even after I drain every penny of savings from the elimination of 'embedded taxes', unless of course my employees and my subcontrator employees and my suppliers employees all take pay cuts.
AR, for someone who supposedly owns a business (home builder) you sure seem to have a lot of free time to post on FR. Maybe business is real slow for you and you scapegoat the NRST as the straw that will break your back and put you out of business because of other failings.
Ya, right. Assuming a 23% NRST, you would have to make a little shy of $5,000,000 in retail purchases to pay a million dollars in NRSTs.
What kind of warehouse do you have to store $5,000,000 in retail purchases per year?
What about your calling him pigface?
Actually, in a post above he explained how he got to the 7 figure number. It was based on his sales and thus the tax he would have to forward. So he is claiming the tax paid by the customers who buy his product as tax he paid. Talk about dishonest.
Dishonest???? Please explain to me how that doesn't come off my bottom line and it is me who is sending the check in. Certainly my customers are responsible for every penny of my gross sales, just as they are today. But on $7 million of gross sales, I pocket $7 million. I pay my income tax and I pay the employers share of FICA for my employees. This number is minute compared to the $1.61 MILLION I will have to remit under the fair tax. Explain what is so dishonest. The only thing dishonest is you guys acting like you don't understand this simple point.
Oh puh_leeeez. I was mimicking pigdog for the derogatory nickname he called me. I thought he would get the point, but obviously he did not.
I can see his opposition from that viewpoint, wrong as it is. Just think how Walmart is going to feel. Their taxes are going to increase by billions of dollars. Why, that is probably just going to put them out of business. /sarcasm off
So is the Fair Flat Tax.
What is dishonest is the NRST is paid by the person who purchases the retail product, not the business that sells the product. Using your logic, if you sell a $200,000 house, the NRST that you pay is $46,000 and the NRST paid by the purchaser of the home is zero. But in reality, the $46,000 NRST was paid by the customer and you paid zero.
One thing I continually remind flat tax fans is that our current income tax code started as a flat tax and only very few people were subject to it. A flat tax will not remain flat.
You seem to miss the point that "sales" are not at all taxed in the same way as your income is presently. With the FairTax, you would not be paying tax at all from your business (which seems to be what you're talking about) since your purchases from that business would not be taxable as you apparently sell the homes to others - a case of "for resale" if there ever was one.
If all $7 million of your business's sales were taxable (e.g., to final consumers) you would pay no tax at all ... your customers would - a total of $1.6 million assuming prices remained the same including the FairTax. You'd automatically be $100,000 ahead of the game since there'd be no income tax of that amount. In addition you'd be paid $4,028 for collecting, remitting, and sending the payment and two line report each month, so you're $104,028 ahead of where you are now - plus the prebate as well which would easily put you over $110,000 - or more - better off. And that's not considering any other gains you might have from better interes rates, etc.
If you're talking about your own personal consumption (which is what I took your comment to mean), then my earlier comments apply about you spending $4.5 million a year for taxable consumption.
Rolling my eyes. Technically, I pay, remit and am liable for the tax. I am required by law to charge the customers the tax. That $46,000 comes off MY BOTTOM LINE. I can't charge $260,000 for a home that was $200,000 before the fair tax. That money comes from MY GROSS SALES. That is what the tax is figured on, MY GROSS SALES. The fact is if I sell a $200,000 home under the fair tax, I recieve $46,000 LESS. It is up to me to find $46,000 worth of savings from embedded taxes/compliance costs for each house I sell and for the life of me I can't.
A sales tax will not remain level either. Governments can't resist raising taxes. They're like a kid with daddy's credit card. They never have to pay the bill.
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