Posted on 08/22/2005 6:53:28 PM PDT by RobFromGa
The example in #399 shows the cascading effect of tax costsNot it doesn't. You obviously have no idea what cascading is.
Certainly it does, Nightie. Too bad you don't understand the mechanism; most other people will "get it" from the example.
Not true, the latest number was calculated by Treasury for the Tax Reform Panel and they determined the rate would have to be 25.4% inclusive just to replace the income tax.
Of course you can provide the intimate detail of that determination so that all can peruse the basis and how much modification to the provisions of the actual FairTax legislation were introduced to derive such a result.
It has been my experience that such determinations are based on broad assumptions about a retail sales tax system with an artificially narrowed taxbase substantially different from the tax base provided for in HR25.
Judging from that number, I would suspect the authors of that determination od spending a lot of time with W. Gale over in Brookings.
Where did you get THAT number from??? I know a lot of numbers, too, Rongie. The difference is I don't go around throwing them out at people claiming ehey are lieing.
Perhaps I should adopt that technique of yours ...
$423 - you lie!! $187,396 - another lie!! $702,457,983,622,011,998, 101,329 - the biggest lie of them all!! Another triple-dip BS bunch of trivia meaning nothing by the Squirrels.
What planet have you been living on? The 22% embedded tax mantra has been the staple of sales tax supporters for 6 years. Now you are telling us embedded taxes includes cascading effects, economic growth, changing consumers behavior, and whatever other fuzzy predictions you can use to cover up the blantant lie. Give me a break.
Gee, Nightie, the PA FairTax group only had numbers that went to 2001. It's great that you can be so omniscient and see into the future. Don't they call that "perfect foresight"?
Gee, Nightie, the PA FairTax group only had numbers that went to 2001. It's great that you can be so omniscient and see into the future. Don't they call that "perfect foresight"?pigdog, in our world it's 2005 and 2004 is the past. What year is it in FairTaxWorld?
The 22% embedded tax mantra has been the staple of sales tax supporters for 6 years.
And you have been trying to limit debate to your subset of cause for just as long.
Now you are telling us embedded taxes includes cascading effects, economic growth, changing consumers behavior,
Yep, and always have. Just as every economist worth his hire will inform you.
and whatever other fuzzy predictions you can use to cover up the blantant lie.
The only lie lay with that which you apparently do to yourself in convincing your self that commerce operates in a vaccuum of one business (your own).
Give me a break.
You get no breaks, because you are well aware that the the total effect of a repeal of a tax system on commerce is much greater that simply adding up out of pocket expenses for accounting and taxes per-se.
As I have demonstrated already on this thread, that number comes form IRS website. It is Individual Income Tax ($987 Billion) + 1/2 of Employment Taxes ($696 Billion), which equals $1.335 Trillion. I know you consider facts lies when they don't support your agenda, but I can not help you with your delusional beliefs.
No, I am just trying to focus the debate on your biggest lie. If you wish to define embedded taxes as something different then what Dr. Jorgenson says, you need to quit quoting Jorgenson for your embedded tax numbers.
I used the very same quote AR himself selected to make my point and I'm the one changing the parameters of the argument!
If the fair tax webpage said the sky is green, you guys would believe it. It is a waste of time trying to convince you the sky is blue.
No, I am just trying to focus the debate on your biggest lie. If you wish to define embedded taxes as something different then what Dr. Jorgenson says, you need to quit quoting Jorgenson for your embedded tax numbers.
As a matter of fact, I don't quote Jorgenson for embedded tax numbers, he doesn't provide any. Nor do I quote Jorgenson as regards wage numbers, he doesn't provide any of those either.
Nor am I aware of anywhere Dr. Jorgenson has provided his definition of embedded taxes at all such that I would differ in what he does say.
For I quote what he provides, the producer price decline Dr. Jorgenson's studies indicate would prevail with implementation of the FairTax legislation, which is 20% in the first year increasing to a total decline of 30% by the 25th year of his IGEM study, as well as a whole range of Dr. Jorgenson's IGEM results regarding the economy to place that price decline in context of growing GDP, business production and investment numbers of Jorgenson's study as a whole.
| THE ECONOMIC IMPACT OF THE NATIONAL RETAIL SALES TAX By Dale W.Jorgenson May 18, 1997 Final Report to Americans For Fair Taxation INTRODUCTION AND SUMMARY The purpose of this report is to analyze the economic impact of substituting the National Retail Sales Tax (NRST)for individual and corporate income taxes,the Medicare,Social Security, and FUTA payroll taxes,and the estate and gift taxes.1 I consider a revenue neutral substitution-one that leaves the government deficit unchanged. Finally,I focus on the impact of this fundamental tax reform on economic growth over the next quarter century. I have summarized my conclusions in a series of charts: 1.The revenue neutral substitution of the NRST for existing taxes would have an immediate and powerful impact of the level of economic activity.The first chart gives a projection of GDP under current tax law. The second chart shows that GDP would increase by almost 10.5 percent in the first year.This increase would gradually decline to a little under 5.4 percent over the next twenty-five years. 2.Taxation of consumption would induce a radical shift in the composition of economic activity-away from consumption toward investment. The third chart shows that real investment would initially leap by a staggering 76.4 percent and then gradually fall to about 15 percent higher than under existing taxes. The third chart reveals that real consumption would initially decline by 9.1 percent. However,consumption would overtake the level under existing taxes within five years and grow rapidly under the NRST. 3.Holding net foreign investment constant,the fourth chart shows that exports would jump by 26.4 percent under the NRST, while imports would rise only modestly. This is the consequence of excluding exports from the tax base while including imports. The initial export boom would gradually subside, but exports would ultimately remain more than 13.3 percent above the level under the current tax system, while imports would fall a modest 0.9 percent below this level. 4.As a consequence of the elimination of taxes on capital income,individuals would sharply curtail consumption of both goods and leisure. In addition,the implied subsidy to leisure time would drop to zero under the NRST; under the existing tax system this is equal to the marginal tax rate on labor income. The fifth chart shows that the NRST would generate dramatic growth in the capital stock and a sharp initial rise in the labor supply that would gradually decline over time. 5.Since producers would no longer pay taxes on profits or other forms of capital income under the NRST and workers would no longer pay taxes on wages, prices received by producers, shown in the sixth chart,would fall by an average of twenty percent.The seventh chart shows that industry outputs would rise by an average of twenty percent with substantial relative gains for investment goods producers. 6.In the long run producers’ prices, shown in the eighth chart,would fall by almost thirty percent under the NRST.In addition,the shift in the composition of economic activity toward investment and away from consumption would drastically redistribute economic activity among industries.The ninth chart shows that production would rise in all industries,but the increase in production of investment goods would be relatively greater. 7.The imposition of the NRST would produce a sharply higher tax rate on consumer goods and services, but the tenth chart shows that the initial consumption tax rate would be twenty-three percent at both federal and state and local levels or only 18.4 percent at the federal level. This would gradually rise over time,but remain below thirty percent or 23.8 percent at the federal level. |
So you merely dreamed up the numbers to suit your view of he world?? Wonderful!
If the fair tax webpage said the sky is green, you guys would believe it. It is a waste of time trying to convince you the sky is blue.
It is interesting that the fairtax web site does not assert the sky to be anything other than blue I note.
So far they have been substantially more accurate about their representations of the FairTax than I have seen other sites dedicated to other tax reform proposals have been.
I not also that the FairTax folks cite and provide studies from many sources having no relation to them other than in providing raw information, rebuttals, supporting studies relating to NRSTs from independant organizations generally and papers supporting an endorsement for the FairTax legislation.
I don't see that one should expect much more out of an advocacy website.
So you merely dreamed up the numbers to suit your view of he world?? Wonderful!No, I used arithmetic (that's mathematics in our world). The PA FairTax groups estimates listed the NIPA tables and lines for each item. I simply used the numbers for 2004 and added them together.
Dear pigdog,
* chuckle *
First, you're only showing a 25% tax rate in your latest table. LOL.
In Level 1, there is a total of 44 cents profit (the sale price is $1.44, the input is $1, that leaves 44 cents for total pre-tax profit), and you're paying 11 cents. That's 25% of the pre-tax profit (it's an inclusive rate when talking about income taxes).
In Level 2, you have 64 cents of pre-tax profit, and 16 cents of tax, for a rate of 25%.
And so forth (although your final levels come to about 25.5%).
Anyway, your corporate income taxes as a percentage of revenues come out to around 11%. That's unusually high for any corporation.
Tell ya what. I'll make a deal with you.
You find 20 Fortune 500 companies that pay 11% of their revenues in federal corporate income taxes (remember to try to estimate their state corporate income taxes).
I'll find 20 Fortune 500 companies that pay less than half that amount - 5% or less of their revenues in federal corporate income taxes.
I don't know if 20 Fortune 500 companies exist that pay 11% of their revenues in federal corporate income taxes, but if you find 20, we'll each go for another 20. And we'll see who runs out first.
If you think that your spreadsheet represents typical companies, you should be able to back it up pretty easily, wouldn't you say?
I'll even give you a head start, pigdog. I spend a lot of time going over income statements of publicly-held companies, and thus, I'm aware of at least one company that pays approximately 11% of its revenues in federal corporate income taxes. It's a good one, too. It's Microsoft.
Now you only need 19 more.
LOL.
sitetest
Dr. Jorgenson directly attributes that 20% fall to "producers would no longer pay taxes on profits or other forms of capital income under the NRST and workers would no longer pay taxes on wages". Jorgenson is as clear as clear can be. He states precisely why prices will fall, and it is totally attributed to taxes on profits and wages paid by both the producer and the worker.
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