I don't understand. How is deprecitation a repeat purchase of land. It is merely tax avoidance isn't it?
Under the Fair Tax, all of this depreciation would go away correct?
Correct!! Purchases for business use are not taxed under the FairTax legislation.
Only purchases for final consumption are subject to the retail sales tax implemented under HR25, business purchases are expressly exempted:
H.R.25Fair Tax Act of 2005 (Introduced in House) `SEC. 102. INTERMEDIATE AND EXPORT SALES.`(a) In General- For purposes of this subtitle--
`(b) Business Purposes- For purposes of this section, the term `purchased for a business purpose in a trade or business' means purchased by a person engaged in a trade or business and used in that trade or business--
`(c) Investment Purposes- For purposes of this section, the term `purchased for an investment purpose' means property purchased exclusively for purposes of appreciation or the production of income but not entailing more than minor personal efforts. |
Another thought, this might encourage our headquarters in europe to send more business to us since it would be cheaper than in europe.
Actually it is highly likely to see European and Japanese businesses relocating here for the international trade advantages of a retail sales tax only system. With no federal tax levied on upstream manufacturers or suppliers U.S. exports become more competitive on foreign markets, as well as being a taxhaven for manufactures in the U.S.
Chairman of the House Ways and Means Committee,
Rep. Bill Archer (R-TX)
August 12, 1996
- "A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."