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To: Phantom Lord
Maybe so, but my example clearly showed a recurring increase in cost of products from raw material to the shelf that would be eliminated by the fair tax.
A "recurring increase in cost of products" is not cascading. In your example, the percentage of the cost of the product that is due to taxes does not increase from level to level. If they were 10% at the first level, they would have been 10% at the last (assuming the same tax/compliance burden).
150 posted on 08/19/2005 1:54:03 PM PDT by Your Nightmare
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To: Your Nightmare
His description is actually quite good, as is this one:

"A cascading tax is one which is not just on output value but also on the input element. That is to say it is at every stage of production and distribution. It is a tax on tax. For example resin, rubber and carbon black are necessary for manufacturing a tyre. All the three inputs paid tax and the final products, namely the tyre also paid tax. So these three inputs are taxed twice. Then again the tyre is used in a car, which also is taxed. These three inputs are now taxed thrice. So the tax element on these inputs goes on increasing with every production and distribution chain. The cascading effect of tax makes the tax rate much higher than the original rate."

That is what Phantom Lord was describing despite your quibble. You merely feel that your Job One is to attack, attac, attack anything FairTax. You actually look quite foolish when you get into these loops. Are you wishing to pretend that this build-up effect does not raise prices higher than they would be without them??

151 posted on 08/19/2005 2:16:47 PM PDT by pigdog
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