Posted on 08/18/2005 6:34:27 AM PDT by GPBurdell
What you are forgetting is that is isn't just you. Every home builder is in the same boat. So your competition either has to charge the same price as you, which means you are no worse off since the home buyer can't buy their new home anywhere else. Or your competition, being much smarter than you, can see that their costs are now lower since all their suppliers aren't paying taxes now and will lower their prices. It will be your competition that puts you out of business, not the Fair Tax.
LOL, are you serious?????????????? I sell $7 million now, I pocket it ALL and at the end of the year pay $100-$150K in taxes. Under the 'fair tax', I sell $7 million and I pocket $5.4 million. And you are telling me I am AHEAD $100K, because I have $6.9 million in my pocket now to pay expenses vs. $5.4 million under the 'fair tax'. I have always agreed some of my expenses will go down with the fair tax, but I don't have anywhere near $1.5 million in embedded taxes even considering my suppliers. I will need to raise my end prices to the consumer 10-15%, so will everyone else.
Certainly, and all new homes will be at roughly a 15% price disadvantage against existing homes. The effect will be new homes sales will plunge. Eventually the price of existing homes will rise. But how long will that take, two, three, five years??? I don't know, but I can't affort a five year recession in my business.
Yes, just as with any tax the government can raise or lower it. But the big difference between an NRST and an income tax is that the income tax is withheld along with FICA and 99 out of 100 people have NO IDEA how much they are paying in taxes (especially embedded taxes).
As a little experiment sometime, especially around tax season start asking people you know how much they paid in taxes this year. Without question, if they got a refund they will say, “none, I got money back!” WRONG DUMB ASS. You paid and over paid so the government paid back the interest free loan you gave them by overpaying your taxes.
With the tax being paid OUT OF POCKET with every purchase by EVERY American, peoples resistance to a tax increase will be much greater.
Currently, 50% of Americans (with an income) do NOT pay a dime in federal income taxes. ZERO! So what care do they have if income taxes go up? None. They don’t pay any. But they will pay an NRST and will be far more likely to object to changes to the rate.
As is every home remodeler of EXISTING homes.
The SQL squad is free, of course, to use any derogatory names they can think up (which isn't many). I just take them all to be the jokes they really are.
There is nothing greedy in wanting to determine what happens with the fruits of one's own labors.
I was attempting to be sarcastic, apparently not very well. I agree with you. Self-interest is the magic behind the free enterprise system. R. Buckminster Fuller said that is what makes free enterprise so unique, it turns the selfish desires of each of us into good for the whole society.
My apologies, I misunderstood the intent of your post.
No apology necessary. I am glad we agree.
You bet I'm serious!!! You're in the habit of thinking of the entire sales figure as being "your money" (when even at present it is not).
With the FairTax you will have agreed to collect the 23% tax as a separately itemized thing on your sales receipt - called tax - and it is in no way "your money" so it does not count toward your bottom line. It is also paid by your customers so for the same price (including the sales tax) your gross would decline ... except for the fact that the inputs to your business - the raw materials, financing, etc. you make use of will be dropping in price.
Whether you believe this or not it happens to be true and the amount will be something like 20-25% which WOULD go to boost your bottom line. In fact you might even need to cut prices of homes due to competition and that would help you sell to the expanded market size that the FairTax would create by allowing more people to afford home purchases.
You may not understand this mechanism of making the costs of home ownership more affordable, but it's there nonetheless and here's a link to a good explanation of it if you'll read it:
http://www.fairtaxvolunteer.org/smart/TaxNotesRebuttal.pdf
You've always chosen to disbelieve this sort of valid information and no doubt always will until the FairTax actually goes into effect. Be sure to check back then and honestly tell us how much better off you are under the FairTax - because you will be, and so will your workers.
Keep in mind also that your own personal consumption will be helped with the same effect of overall price levels being about the same including the FairTax, but you having more spendable income to buy things with.
Was there something you did not understand about Jim Robinson's post????? Oh, because I disagree with you plan to ruin our economy, so therefore I must have some personality problem. You guys are pitiful.
How about let's cool it with the insults and personal attacks.
Thanks
85 posted on 08/18/2005 10:53:00 PM EDT by Jim Robinson
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That's one more of those Chicken Little observations that will probably not al all have the effect you fear. Why should that be any more true than it is for used homes today? If there is any difference in demand (which I doubt since there will be plenty of lead time for any adjustments to be made) it will be levelled out almost immediately. If you really fear this then you could adjust your business to remodel/renovate used homes, but its hard to see a reason this would be the case.
I don't see new home sales being knocked in the head right now and at least where I live used homes are typically less expensive than new ones already. Many people prefer to buy the new home even at a higher price.
Golly, I thought I WAS being good. I will try to be blander.
Good ;)
Embedded tax costs are the income taxes paid by businesses of all sorts as well as higher prices for everything THEY buy - and that cascade as things progress from inception to final consumption.Could you please show me an example of how business income taxes cascade from level to level? Thank you.
Company A extracts raw materials and sells them. They pay tax on their income, and for withholding, and compliance. These expenses are calculated and included in the price of the raw materials sold.
Company B purchases raw materials from Company A and converts them (for lack of a better term) to initial stage product bought in bulk by company C. Company B has to pay tax on the income, along with witholding on employees and compliance. These expenses are added to the price of their product. Now we have 2 levels of taxation included in the price of a still yet to come to market good.
Company C turns the purchased material into a widget. Retailers D thru Z purchase said widgets for sale in their stores. Company C has now included their tax, withholding, and compliance expense in the price of the widget they sell to retailers. 3 levels of taxation addition in price now.
And finally the retailers sell the widget to the final consumer. They too ad their tax, withholding, and compliance costs into the retail price. That gives us 4 levels.
In all likelyhood, 4 levels is about as low as you can get to get a material from the ground to the shelf at your local ShopMart.
And my quick and simple example doesn't include any contracted parties who deliver the materials at the different stages of production who also have the various tax expenses included in their price of services, which are added to the price of the product.
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