Posted on 08/18/2005 6:34:27 AM PDT by GPBurdell
NUMBER ONE ---- AGAIN!
The word came in yesterday afternoon. The FairTax Book will remain No. 1 on the New York Times Bestseller's List for the second week in a row. Our editor at Regan Books told us yesterday afternoon that it is much harder to make this list the second week than it is the first. Needless to say, we're excited and gratified. Interview requests for Congressman Linder and myself are pouring in, and the crowds at the book signings remain strong.
Our greatest hope is that the book generates a buzz and momentum of its own. Across the country people who have never heard of The FairTax before are learning that it is possible to get rid of all income and payroll taxes and replace those taxes with a one-time tax on consumption at the retail level. These people are learning that:
* They can say goodbye to the death tax, the gift tax, Social Security taxes, Medicare taxes, the Alternative Minimum Tax, capital gains taxes and the trouble of filling out tax forms; * That they can just go enjoy themselves on April 15th, just as they do on every other spring day; * That American corporations who have fled overseas to escape our crushing tax system can be brought home again; * That they can invest and save with no federal tax consequences whatsoever; * That the trillions of dollars that are working in offshore financial centers, again to escape our crushing taxes, can be brought back to work in the American economy again; * That we don't need to spend $500 billion a year to comply with an obscene tax code; * And that all of this can be accomplished while eliminating the federal tax burden on the poor, and without increasing the cost of living for everyone else.
I was discussing the book with some friends last night. I told them that over the past ten or so days I think that I have signed about 8,000 copies of the book at various book signings. Since many people buy multiple copies of the book, I would guess that I've seen about 6,500 people during that time. So .. how many people had something negative to say? Two. That's it. Just two. One man at Ft. Bragg came through the line twice to have two books signed (he went and bought an extra copy) all the while grumbling that we didn't include enough of the research in the book. Well, there's a reason for that. You can find the research at the FairTax website. Knock yourself out, pal. One other man stood in front of the table and demanded an opportunity to point out all of the typos he had found. We politely declined his incredible offer. But that's it. Two complaints. On the other hand, we've received hundreds of comments from people who doubted whether or not this idea could work ... until they read the book. Well, that's what we were after.
Again ... thanks so much for another week at No. 1! The FairTax is becoming an idea that can't be ignored.
The income taxes are not "given back" but CANCELLED by the FairTax - and they are not the personal income taxes you imply but those on the business. He'll be getting back his withholding taxes just as will the employees.
Nor would the miller have "the same amount" as before since the embedded tax costs (see #154 for the embedded tax mechanism example) lower costs coming into his business thereby raising his profits due to the lowered costs.
No that is the fair tax position. I have demonstrated it 100's of times.
That's dishonesty.
Perhaps you should produce Jorgansons's study on embedded taxes and see who is wrong. I have gone through all the numbers and I show you are $1 trillion short. Perhaps Jorganson saw something I did not. Or perhaps fairtaxers are totally misrepresenting what Jorganson was saying. Either way, it is not me who is dishonest.
Dear pigdog,
"Obviously you haven't even bothered to find out what the information you were linked to contained."
Obviously, you didn't notice that I wasn't "linked to" any information. I was responding, unasked, to Always Right's post, where he was giving the benefit of the doubt that some "embedded" savings could be achieved by not giving back the employer's side of payroll taxes.
I was merely pointing out that for folks who work for me, they'd wind up upside down if that were done. These actual workers pay actual tax rates for payroll and federal income taxes combined in the range of 14% - 15%, total.
"Much of what you post is more of the old SQL nonsense of trying to claim wages will decrease - and they won't."
Actually, I didn't claim that at all. I merely said that to at least attempt to keep MY staff whole after the change, it would be necessary to give them both sides of payroll taxes.
I also pointed out the effect that tax-free fringe benefits have on overall rates of payroll and federal income taxation have right now, under the existing system. These are actual real-world workers, with their actual gross income, tax-free benefits, actual payroll, actual withholding, not mythical people under a theoretical system.
"They'll be getting both sides of their payroll taxes."
Some have claimed that savings could be achieved and passed on by not paying employees the employer side of payroll taxes. Perhaps you've missed those posts by some NSRT advocates on these threads.
"That's been pointed out to you time and again so why keep insisting otherwise?"
As I said, some have claimed otherwise. As well, Always Right was showing that, even for the sake of argument, if one did NOT give both sides of payroll taxes to the employee, it STILL wouldn't get us to 22% price reductions. I was merely pointing out to Always Right that the premise he allowed for the sake of argument is one that cripples the whole scheme of the NSRT.
sitetest
Prices will go down, then be raised back up somewhat due to the FairTax and the employees get their gross pay (less state amnd other withholdings).
Nothing complex or unusual about that nor is it hard to comprehend - unless you've got your heart set on reducing emploiyees pay to scare them, Chicken Little.
Not what has been said - except by youse guys in your fevered attempt to misstate the obvious.
Read #151, 154 and 155. The chart in 3154 covers only business income tax, not payroll tax or complicnce costs.
Those post have been there for a long time and still you haven't bothered to read those (either). Some honesty and some desire to get your questions answered...
You check out the three I just pointed you to.
1. Timberland owner. He is taxed at a rate based on a depletion formula I believe when he sells timber. Usually there is a middle man who solicits bids from sawmills etc. He pays foresters to maintain the land, he pays crews to remove dead trees. He pays for equipment for land management. He pays harvesters for clear cutting. All of the above entities contain embedded taxes, do they not?
2. Sawmill. Profitable sawmill taxed at the corporate tax rate. Trucks, drivers, millers, heavy equipment, building, office furniture, all with embedded taxes in them.
3. Shipping company. Trucks, diesel fuel, drivers, headquarters, office workers, dispatchers, tires, maintenance, computers, headhunters. All with embedded taxes in them.
4. Broker, maybe or wholesaler. Hotels, gasoline, car, office, warehouse, employees, phones, trucks, equipment. All with embedded taxes.
5. Retailer. Home Depot. Buildings, employees, headquarters, tens of millions of low income housing tax credits as investment and tax avoidance(which expense won't be necessary with the fair tax), office staff, store equipment, trucks, inventory, accountants, tax department. All with embedded taxes.
Refer to post #154 and imagine ALL of the embedded taxes at each level.
As for the service economy. In many cases fees can be lowered by the amount of tax liability and the service provider will net the same. A CPA making 100,000 minus 20,000 in tax, SS and Medicare no longer has to pay those things. He now has room to lower his fees if competition forces him too and I believe it will.
What about a large CPA firm that operates on a net income basis? It will have less room to lower its fees because there are fewer embedded taxes in the NET of the large firm than the NET of the independent.
I don't have any data on it but how much of the service economy is accounted for by the independent type of service provider vs. a national entity? I daresay it is mostly independent plumbers, electricians, landscapers, painters, etc. I know I hire a lot more of those than I do large law firms or CPA firms. Doctors? I don't know about that one but I do know that all of the equipment, buildings, research, drugs, staff have embedded taxes.
Dear Always Right,
Interestingly, the total amount of corporate income taxes paid to the federal government only amounted to about 1.3% of GDP in 2003. That's something like a grand total of $150 billion (maybe $165 billion).
Total consumer spending is about 2/3 of a $12+ trillion economy, or somewhere around $8 trillion. Total corporate federal income taxes amount to perhaps 2% of all consumer spending.
If one assumes that 100% of corporate federal income taxes are entirely borne by the consumer sector of the economy, there's your "embedded taxes" - 2% on average.
sitetest
What you are asking for is impossible to provide, since each product is going to go through a different gauntlet before it makes it to retail. Some will realize a greater reduction in costs, some very little, I would assume. Therefore your demand for 'honesty' rings a little manipulative.
So what about the larger point I made about the concept of taxing income? IMO, if it's different from the income tax, it's better- the finer points of the FairTax notwithstanding. Like I said, even if it's a purely break-even result, I'll take it.
Do you have any defense of taxing income and the associated atmosphere of control and intimidation? I'd like to hear it.
The chart speaks for itself as I got it off the Internet.Well there you go! He got it off the Internet!! Case closed. Maybe you would like to tell us where.
Read #151, 154 and 155. The chart in 3154 covers only business income tax, not payroll tax or complicnce costs.You don't really think most businesses set their prices by marking up their costs, do you? How would a business ever loose money (and most do). Also, you might note that if you were to remove taxes from you little example, the businesses would be making less profit. It's not what I would call a real world example.
The market is the ultimate real world example. The market always adjusts. I trust the free market more than any artificially imposed tax structure.
If this thing is implemented, I expect there to be a degree of upheaval as things reach their natural state. So many decisions are influenced by tax policy now that would be made differently if there were no tax considerations. It simplifies everything for everybody, and simple is efficient. Efficient is profitable.
Dear Your Nightmare,
You know, I gotta find a business where I can buy something for a dollar, mark it up 33 cents, and resell it, with the 33 cents markup being all profit - no other costs of doing business. Twenty-five percent profit without adding any value whatsoever!!! LOL.
On the other hand, in the real world, pre-tax corporate profits have averaged around 6% of revenues in recent years:
http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTemplate.cfm?Docid=267&Topic2id=70
Which accounts for why corporate federal income taxes account for about 1.3% of GDP.
sitetest
"A pig in a poke". Another way for the government to pick our pockets.
You know, I gotta find a business where I can buy something for a dollar, mark it up 33 cents, and resell it, with the 33 cents markup being all profit - no other costs of doing business. Twenty-five percent profit without adding any value whatsoever!!! LOL.Actually, if you look at his example, the 33% "profit margin" was net profit. Somehow these businesses were able to know their profits and how much they would pay in taxes before they sold any goods.
With a 30% tax, I would imagine people will be looking for all sorts of creative ways to buy stuff. Tax policy might less of an effect on business purchases, but more of an effect employee benefits and individual purchases.
Dear Your Nightmare,
Look, I'm still amazed at a business model where you buy something for a buck, add 33 cents to the price, incur no other costs, perform no other work, and walk away with the 33 cents.
LOL!!
I'm sure the CEOs of all the corporations in America would like to know how to do that, too, as the average corporate pre-tax profit in the US is only about 6%. And that's for businesses that are even TAXABLE for corporate federal income taxes - most small businesses (which are MOST BUSINESSES, and which represent nearly half the economy) aren't even liable for corporate federal income taxes. And most of them work damned hard to make even that amount of profit.
sitetest
Dear sitetest: (which continues to be the most annoying way anyone posts on this board.)
Where on earth is that business model displayed? Please show us all the model you are so amazed with.
Dear groanup,
"Dear sitetest: (which continues to be the most annoying way anyone posts on this board.)"
Imitation is the sincerest form of flattery.
Thanks! ;-)
"Where on earth is that business model displayed?"
Why don't you look for it? It's referred to, oh, about a dozen times in the last hundred and some posts.
Have fun.
sitetest
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