Posted on 08/22/2005 6:53:28 PM PDT by RobFromGa
I believe so. So far, they are preying on a relatively small portion of the population. If a "Fair Tax" was enacted, that population would increase by at least an order of magnitude.
Ohhhh, you mean like credit cards. Nasty thing credit, should be outlawed could lead to too much consum'n go'n on out there.
Can you then fathom the liberal media claiming that "the disenfranchised" are being taken advantage of and we should give them even more compensation? I can.
And why don't they do it know? Afterall it would only be a simple thing to extend the EITC in such a way as to be paid out though one's paycheck. You know something like reverse whithholding. OOPs. they do that now, nevermind.
Sorry, can't get excited about a sales tax rebate that goes to every legal resident being anything exceptional except for once everyone gets it, same as everyone pays the same tax rate.
Course we could just keep doing it like the income/payroll tax system we have:
Bush touts relief as tax day looms
Another 3.9 million Americans will have their income tax liability completely eliminated, officials said.
That's 3.9 million Americans more added to the spending constituency of 70% of the public clamoring for more from government, believing someone else foots the bill, and bypass the taxing them altogether too.
"As a matter of fact, what the income tax does and this is the debate that I think we always try to get into in order to let you and him fight, see and the people of this country are led down a path where the actual control of their resources, which in the end is the control over their will, is handed off to the government." . . . "The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system." "In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they wont, at the voting booth and in other phony issues, be subject to that manipulation." |
The Honorable James DeMint (R-SC)
United States House of Representatives
APRIL 5, 2001
????? What are you talking about??? Jorgenson himself said the embedded taxes include employee taxes. This is not about something I fail to recognize. This is about a black and white issue of what is included in the 22% embedded taxes of Jorgenson's study. Geez, how clear can I make it.
That's great. But sell the fair tax on its merits, not on some fairytale that everyone gets a 25% raise and all prices stay the same. I think there are some legitimate advantages to going to a sales tax, but most of what is presented are gross exagerations sprinkled with some big lies. I think going to a sales tax biggest impact will be on exports. Our exports will be cheaper, at the expense of imports being more expensive once our tax is added. That will have a positive effect on our trade balance, but will be inflationary to our consumers.
Alan is a big fan of the VAT and he sees similar advantage with a sales tax. He is mostly sold on the idea of improving our trade balance. I really don't think Greenspan believes that everyone will get to keep all of their paychecks and prices will come down.
I agree. But different debate for a different time.
I'd start with gradual Social Security privatization...
That horseshoe has been thrown. It wasn't even a leaner. Too many people, too stupid.
...how Social Security surpluses are currently being frittered away.
And exactly how many of your friends and neighbors are aware of that fact?
But once we did that, we'd take something like 6% - 7% of GDP away from the government and put it directly in the hands of individuals.
You're still talking about SS here. That is not the discussion. My question to you was: what about tax policy? What is yours?
Well, it depends on what you compare it to. To the possible havoc and chaos of a complete turning upside down of 100% of our federal tax laws might cause?
A couple of hundred years ago an entire nation was in upheaval. That nation adopted a set of laws that put all of the power in the hands of the people who dwelled in that nation. That had never been done before. Can you imagine the havoc and mania that should have occurred?
Well, it worked. Sure as hell did and here we are, on Free Republic debating as we should be. Free to be idiots or scholars, our choice.
Alan Greenspan and his ilk are Washington statists. If anything good comes out of these discussions it should be that we all accept that fact. Now let's come up with a good tax policy. The fair tax is the best place to start. I can't imagine a more fair way to collect taxes than a national sales tax.
I'm talking about something you CLEARLY do not understand or are unwilling to admit the existence of. I'm talking about all sorts of costs, so many as to be virtually unquantifiable, imposed by the tax system that are NOT the taxes themselves and I have REPEATEDLY said that!
Think of them as unfunded mandates.
Since you clearly don't like hearing it from me maybe you will listen to someone else on the matter but I doubt it!
Here is an excert from remarks made by The John M. Olin Distinguished Professor of Economics at George Mason University, Dr. Walter E. Williams, in March of this year to a standing-room-only crowd of students, faculty, and guests at Hillsdale College's Constructive Alternatives Seminar:
"...Keep in mind that a working definition of slavery is that you work but do not have any rights to the fruit of your labor. Taxation and regulation constitute confiscation of some or all of the freedom to own and use property. This confiscation has reached unprecedented proportions. In 1902 expenditures at all levels of government totaled $1.7 billion, and the average taxpayer payed only $60 per year in taxes. In fact, from 1787 to 1920, federal expenditures never exceeded 4 percent of the Gross National Product (GNP), except in wartime. Today federal expenditures alone are $1.8 trillion - almost 30% of GNP - and state and local governments spend over a trillion more. The average taxpayer now pays more than $8,000 a year, working from January 1 to May 8 to pay federal, state, and local taxes. In addition to the out-of-pocket cost, Americans spend 5.4 billion hours each year complying with the federal tax code-roughly the equivalent of 3 million people working full time. If it were employed in productive activity, the labor now devoted to tax compliance would be worth $232 billion annually. The federal cost of hiring 93,000 IRS employees is $6 billion. If these Americans weren't fooling around with the tax code, they could produce the entire annual output of the aircraft, trucking, auto, and food processing industries combined..." Emphasis added.
And he is only talking about DIRECT costs here not intangibles such as missed opportunity costs and the like.
To all FairTax supporters.
I am trying to understand where the 20-25% embedded tax/cost of compliance comes from.
I have read a lot of documents on taxfoundation.com. I have seen numbers around $150 billion just for the compliance to the Income Tax. Obviously corporate income taxes and the corporate portion of the payroll tax will decrease expenses that each company pays. I also understand how the costs cascade up the line from raw material to retail purchase.
Like I mentioned earlier, if depreciation is a compliance cost, our company could get a $30 million benefit from the Fair Tax.
Can someone give me a link to where this research is spelled out so I don't have to do all this myself?
Bigun
You posted while I was typing.
Do you have a link to this, or his research?
The embedded taxes are the taxes that are collected by companies and passed on to individuals through higher prices. If a company is taxed on their earnings, then they will merely raise the price until they are getting what they need to get for each unit sold. If those taxes are removed, then the price will drop accordingly. While this is going on, the employees are still getting 100% of their paycheck, minus voluntary deductions for retirement, etc. So, instead of paying withholding for social security and federal income taxes, an employee will not have these taxes deducted from their paycheck. Instead, the taxes will be paid whenever a purchase is made.
The purpose of the fair tax is not to cut taxes. It is to eliminate the IRS, and all the costly paperwork that goes along with this federal beast, and to pick up new sources of revenue. People who participate in the underground economy do not pay income taxes, but they buy gasoline, bread, cars, jewelry, etc. They cannot avoid these taxes. therefore, income that was not being collected by the government will now be collected.
So, the IRS is gone, prices are about the same, because the 23% is already being paid in embedded taxes that are passed on to the consumer, but now this 23% will only be paid when you buy something. There is no tax on savings or capital gains, estates, etc. Plus, rebate checks are given up to the poverty level for basic necessities. The biggest benefit besides elimination of the IRS is that suddenly, anyone, whether they are a citizen of the US or not, will pay taxes when they shop in the US. That's new revenue. Additionally, even illegal aliens can't escape paying taxes under this method. That's new revenue, because many pay no taxes.
The only thing about depreciation that is a compliance costs is the time it takes to track it and to fill out any applicable IRS form.
Can someone give me a link to where this research is spelled out so I don't have to do all this myself?
Dr. Jorgenson formally of Harvard did a study of embedded costs in 1997 for the fair tax organization. This study is not available anywhere on the net. I assume the fair tax organization has it, but since they grossly misrepresent what Jorgenson is on record as saying, I highly doubt they will ever release it.
Any business that doesn't lower the prices will go out of business.
OK, cite the lies and misrepresentations.
You should go get an accounting 101 book and learn what depreciation is. Until then you are making yourself look just a little less than Einstein.
Why will wages have to drop 25%? The company has already figured their wage percentage. They can sell the same product at a cheaper price and make the same profit per unit. Explain why you feel a wage decrease is also necessary.
Ten percent is a maximum cost savings in my estimation, without the employer half of payroll it would be more like 2-3% cost savings.Let's look at the numbers.
"Can someone give me a link to where this research is spelled out so I don't have to do all this myself?"
http://www.fairtax.org
From the guy who did the study, Dr. Jorgenson. He included the employees tax when he figured out what the embedded taxes were. Without counting the employees taxes they pay, there is no 22 percent embedded taxes.
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