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Fair Tax - Straightening Out Some Confusion
Nealz Nuze ^
| 9/15/2005
| Neal Boortz
Posted on 09/15/2005 7:03:21 AM PDT by groanup
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To: Kerretarded
The difference is that when that prostitute goes in to the lingerie store to buy that new outfit, it is not being federally taxed now either. That is false. Victoria Secret, its employees and vendors are subject the the income tax today. Lingerie is an example of the legitimate economy. It can be taxed under either system.
To: groanup
I havent thought completely thought the fair tax stuff yet, but one thing seems obvious to me.
If retailers are forced to add 22% to the cost of all their goods, then wouldn't I just buy everything from the black market and save 22%? Wouldn't most people? And wouldn't it be about as enforcable as prohibition and the current drugs laws.
Where is my logic wrong?
To: Your Nightmare
There are clearly more than the two alternatives you offer as the be-all and end-all options you proffer (your "economists assume ..." nonsense). And any claims about prices declining are hardly based upon a single economist as you state. None of you SQLers have ever been willing to admit that the costs of cascading taxation embedded into prices will be removed when the FairTax becomes law. This will certainly work to reduce prices and I have no doubt that studies are ongoing on these effects.
There is certainly no reason why there is not AT LEAST a third assumption having wages increase and prices decrease - but this doesn't fit the SQL playbill of disinformation so you never mention it as a possibility. It is, however, clearly another option to the two you present and probably the most likely of all. And your "economists assume" only two outcomes statement is nonsense. That's YOUR statement.
And there is nothing that I have seen in "The FairTax Book" that states that both benefits occur simultaneously in any event - that again is merely your statement to try to persuade others that any FairTax supporter is lying. They certainly could both occur and whether at the same time or reasonably close to each other is difficult to say. Are you trying to persuade us that only one will occur exclusively of the other? On what do you base that assumption???
Well, Nightie your #33 on this thread (of which you seem so proud) is just the same old rehash you're done previously. Perhaps you have re-arranged the order of some of the snippets, but that can easily be sorted out in my response to your original post of this nonsense which was ---
"The 11 cut-and-pastes you stitched together in your post (and arent YOU the guy continually criticizing ancient_geezer for HIS cut-and-pastes??) Fall into 2 categories - FUD (Fear, Uncertainty, and Doubt) and OOC (Out of Context quotation). The FUD Factor items are marked with a * and the OOC items with a +.
The 11 items are:
1 - Garner (Zodrow, Gravelle, Gale)*
2 - Koltikoff+
3 - Response to Gale by Mastromarco/Burton+
4 - Mastromarco/Burton real estate +
5 - CBO Price Level*
6 - Slemrod/Bakija; Taxing Ourselves*
7 - Gravelle & Esenwein; CRS Overview*
8 - Wilkins; National Retail Federation*
9 - Zodrow; Transitional Issues*
10 - Bull & Lindsey; Monetary Implications*
11 - Hall; Price Level*
Lets take the OOC items first -
Item 2 (Koltikoff) - in a two paragraph discussion of whether or not the FairTax is regressive in theory, the author made certain assumptions to illustrate a point. You merely took these assumptions and presented them as though they were a fact - his belief - he was presenting. They were assumptions to illustrate a point, not fact he was presenting.
Item 3 (Response to Gale) - You conveniently left out the portion where the responders point out that prices would drop with the assumption of the FairTax, and that Gale, in fact, was contradicting himself. Heres a link to the entire response midway on page 14 (through midway on page 15) where it says:
J. Gail Perspective: Consumer Pricing: Up, Down and Sideways Simultaneously. Gale completely overlooks the fact that prices would drop with the onset of the FairTax as the responders point out. After this price drop, prices would then be raised up again to some degree by the sales tax which is the meaning of their statement ... prices will increase by the amount of the sales tax but returns to labor and capital will be higher.
Item 4 (Real Estate Foundation) - The footnote you posted from this response also suffers from the same flaw in reasoning as Item 3 just above. Price will first decrease with the advent of the FairTax causing the after tax increase in wages mentioned as well as the increase of prices back in an upward direction from their decrease to the lowered level mentioned above
So much for your out of context quotations. Next we take up the FUD Factor Items:
Item 1 (Garner) with points from (Zodrow, Gravelle, Gale) - As with almost all of the liberal FairTax opponents, the discussion presents what amounts to a description of a VAT structure (calling it a consumption tax) and comparing that to a flawed description of the FairTax (which includes a discussion of exemptions/exceptions required). In addition the discussion goes on to the SQL leap of Faith (as do you) that prices MUST increase with the advent of the FairTax ... while showing no such convincing (or even fairly convincing beyond just stating it) evidence of why this would happen. Garner is obviously not too familiar with the FairTax as he describes a decline in bond values and the idea of corporations losing their depreciation - which of course is nonsense under the FairTax. He also uses heavily from well-known SQL sources such as Zodrow, Gravelle, and Gale which in and of itself should merit serious concern.
Item 5 (CBO) - Hardly a benefactor of the Status Quo (yeah, right) but also makes the Leap of Faith as in Item 1 that prices must increase with the advent of the FairTax. They do, of course, but only after first declining by the removal of the income tax component leaving them more or less the same overall. Despite that lapse, the opinion is offered that the Fed will step in to raise prices (without any clear or convincing indication of why this might be so; merely the claim that it is so).
Item 6 (Slemrod/Bakija) - Here, from a long time SQL advocate (Slemrod) we see the similar liberal Leap of Faith that the sky would fall in the opinion (offered again without any backup) that corporate earnings would fall by 20%. A slightly different twist is given in that the Fed rather than raising prices would now, God-like, merely monitor prices to decide if any action need be taken to PREVENT A PRICE RISE (rather than causing it as in Item 5. Perhaps rather than calling these sorts of SQL ploys a Leap of Faith (which of course they are), they should be called the Chicken Little Syndrome.
Item 7 (Gravelle & Esenwein - CRS) - Once again we see the Chicken Little Syndrome in full operation where any price reduction due to the FairTax is completely ignored and sweeping statements reflecting a great lack of understanding of the FairTax are made by claiming that the tax must be paid in an example industry having a 1-2% profit margin which now owing a tax equal to 20% of receipts - all the while ignoring the fact that the business does not pay the sales tax (at all, let alone out of its profit margin), but that the customer of the business pays the tax. In addition, the CRS folk seem to not understand that the FairTax is border-adjustable as well as the old unwarranted assumption about lower wages being required (for some reason). There are a good number of other flaws in the paper itself other than the selected snippet posted. We also see the use of the old chestnut of anonymous ... economists who judge a consumption tax to be superior to an income tax may nevertheless be skeptical about the advisability of making the change because of these transition effects. Youd think that at least these unnamed economists would appreciate the credit (?) of being named.
Item 8 (Wilkins - National Retail Federation) - This is a study originally commissioned by the NRF from Coopers & Lybrand (who had, as I recall, Wilkins as the leader of the group doing the investigation). It is of the Chicken Little/Leap of Faith persuasion and is impossible to tell much about - aside from the lack of veracity - since, despite requests, it was never published so others could investigate its pronouncements. This link:
http://www.fairtaxvolunteer.org/smart/PwCRebuttal.pdf has a refutation of the Wilkins/PwC/NRF study. A HIGHLY RECOMMENDED READ!!
Item 9 (Zodrow - Transitional Issues) - this is merely George once again doing his thing. He pretty much makes the usual Chicken Little observations, but is at least honest enough to mention that the ... opinion on this issue is certainly not unanimous. And goes on to cite the Jorgenson 25% or so price decline. Kudos, George, for inserting a bit of much needed honesty into the discussion. Makes the Leap of Faith about the Fed being magical and omniscient.
Item 10 (Bull & Lindsey - Monetary Influences) - Makes the Leap of Faith about the wage decline without even considering the removal of the cascaded income tax in prices. This may be one of the reasons that Lindsey is no longer a Presidential Advisor on the economy.
Item 11 (Hall - Price Level) - Why is it not surprising that someone largely thought of as an author of the Flat Tax be strongly in favor of that over the FairTax (which he nowhere demonstrates an understand of aside from the requisite Leap of Faith that wages will be lowered and prices raised (the Chicken Little Syndrome again) while ignoring any price reductions offered by the advent of the FairTax.
So, let me see now if I have this straight ... the FairTax supporters may not use the economic data which is presented in good detail on the Americans For Fair Taxation website (because you say so) while you are quite free to use all of the snippets you can gather up from the known SQL defenders (who seldom, if ever, admit to being so - just like you) even if they are only op/ed pieces with little or no economic detail? By George, I think Ive got it!!! "
To be correct we should note that the study in #8 is now "available", but only if you wish to buy it - which I certainly do not since it's been heavily rebutted.
That "stuff" is no better now than then - but nice try to try to trick the unwary!
143
posted on
09/15/2005 11:14:43 AM PDT
by
pigdog
To: spookadelic
wouldn't I just buy everything from the black market and save 22%? That is a major problem with the sales tax. Experience around the world suggests that when rates get to the 12-15% range (well below the proposed "Fair Tax") there is massive evasion. The risk/reward of evading a large sales tax crosses the tipping point.
To: spookadelic
Where is my logic wrong? Your logic is wrong in that you are using the 22/23% rate, which is the 'inclusive rate'. Really, this sale tax bill will add on a 30% sales tax to the cost of the item. But other than that, you make a legitimate point.
To: RobFromGa
Good to see you back. I assume you saw the Money Magazine article which basically verbatim confirmed your e-mail with Jorgenson.
To: Always Right
First off, whoever employes you still reports your income. Second off, you have to regisiter you family to recieve your monthly rebate check. Third off consumers are liable for all taxes unless they have a reciept. Purchases for goods and services you make without a receipt must be reported on a monthly basis. First off, no they don't. For what reason? The only reason they have to report all that now is because of the IRS income requirements. Looking through the text of the legislation, I'm not seeing it. Got link?
Second. Yes? And? You have to do a lot more than just register now. Filing out a post card is a lot different than the financial proctological exam I get now. Sec 302 covers the requirements.
Third. Bull. Retailers, yes. Consumers? No where have I read this. Point to the section of the legislation or stop lying about what it says. Sect 501 goes over this. Only those retailers that will be collecting said taxes have a reporting requirement. Again, Got link?
147
posted on
09/15/2005 11:19:19 AM PDT
by
Dead Corpse
(Anyone who needs to be persuaded to be free, doesn't deserve to be. -El Neil)
To: Always Right
Really, this sale tax bill will add on a 30% sales tax to the cost of the item, after having reduced the price of said item by 30% to begin with.
The Devil is in the details.
148
posted on
09/15/2005 11:21:49 AM PDT
by
Dead Corpse
(Anyone who needs to be persuaded to be free, doesn't deserve to be. -El Neil)
To: Dead Corpse
First off, no they don't. For what reason? Your income is reported to the Social Security Administration for the purpose of benefit and rate calculations. It is in the bill.
To: Always Right
SSA is not IRS. Nor are the reporting requirements the same.
Try again sparky.
150
posted on
09/15/2005 11:22:50 AM PDT
by
Dead Corpse
(Anyone who needs to be persuaded to be free, doesn't deserve to be. -El Neil)
To: Dead Corpse
after having reduced the price of said item by 30% to begin with. The Devil is in the details. Obvioiusly, Boortz himself denying this made little difference to you.
To: SolidSupplySide
"Furs and vacations are examples of the legitimate economy. Either a sales tax or a income tax will capture that."
Please explain to me how an income tax captures the taxes owed by a member of the underground economy when they buy furs or take a vacation.
152
posted on
09/15/2005 11:26:43 AM PDT
by
CSM
( It's all Bush's fault! He should have known Mayor Gumbo was a retard! - Travis McGee (9/2))
To: Dead Corpse
Third. Bull. Retailers, yes. Consumers? No where have I read this. Point to the section of the legislation or stop lying about what it says. Sect 501 goes over this. Only those retailers that will be collecting said taxes have a reporting requirement. Again, Got link? Here are the excerpts. In section 101, this portion of the bill declares the consumer is liable for the tax:
`(d) Liability for Tax -
`(1) IN GENERAL- The person using or consuming taxable property or services in the United States is liable for the tax imposed by this section, except as provided in paragraph (2) of this subsection.
And here are the Sectio 501 reporting requirements:
`(a) Tax Reports and Filing Dates-
`(1) IN GENERAL- On or before the 15th day of each month, each person who is--
`(A) liable to collect and remit the tax imposed by this subtitle by reason of section 103(a), or
`(B) liable to pay tax imposed by this subtitle which is not collected pursuant to section 103(a),
shall submit to the appropriate sales tax administering authority .....
It is 501(a)(1)(B) which requires the individual who did not have his taxes collected via a receipt from a registered business ('pursuant to section 103(a)') required to submit his sales tax.
To: CSM
Please explain to me how an income tax captures the taxes owed by a member of the underground economy when they buy furs or take a vacation. First of all, furs and vacations are not part of the underground economy. They are part of the legitimate economy. Those activities are lawful and are taxed.
Let's look at a vacationer to Disneyworld. He stays at Holiday Inn. The lodging service is taxed. Holiday Inn pays income tax. Holiday Inn's employees pay income tax. Holiday Inn provides soap. The soap manufacturer and its employees pay tax.
The vacationer goes to Disney. Disney pays income tax. Disney's employees pay income tax. Disney buys electricity to operate the rides. The utility and its employees pay income tax.
Is it really news to you that the legitimate economy gets taxed, or do you really think a vacation is an example of the underground economy. I suspect the latter. Trust me, vacations (and fur purchases) are in the above-ground economy, not the underground economy. I can't believe you disagree.
To: CSM
What prevents the House and Senate from imposing the 2nd slaughter house today? That is an accurate response to nearly all the complaints about the NRST. And what is the logical conclusion to that? That that was not a true complaint at all since it already exists, but instead a faux excuse for maintaining the contemptible status quo.
155
posted on
09/15/2005 11:35:05 AM PDT
by
Mind-numbed Robot
(Not all that needs to be done needs to be done by the government.)
To: hripka
Why don't you try just reading the damn book.
It may answer some of your doubts.
156
posted on
09/15/2005 11:36:34 AM PDT
by
Eagle of Liberty
(11, 175, 77, 93 - In Memory Always)
To: SolidSupplySide
That is a major problem with the sales tax. Experience around the world suggests that when rates get to the 12-15% range (well below the proposed "Fair Tax") there is massive evasion. The risk/reward of evading a large sales tax crosses the tipping point. And what is our current income tax rate? How many collection points? And under theFair Tax how many collection points? And how many cooperating people does it take to evade now and under the Fair Tax? How may non-filers are there now? I'd rather see a smaller number of businesses and service providers policed than all US citizens and residents. How accurate is our present system if 10 accountants from Money magazine can't even come close to figuring the right amount of tax due.
To: Always Right
Yes, if you defer paying the retail tax to a later date. Then you have to file and pay it later as per section 509. This has nothing to do with John or Jane Doe buying shoes at Kohl's.
Stop twisting the meaning. I mean it. It is getting embarassing for me to have to point this stuff out to you.
158
posted on
09/15/2005 11:37:19 AM PDT
by
Dead Corpse
(Anyone who needs to be persuaded to be free, doesn't deserve to be. -El Neil)
To: SolidSupplySide
Are you trying to state that the person that earns their income from the underground economy carries the same burden today as the burden they will carry under an NRST?
159
posted on
09/15/2005 11:39:37 AM PDT
by
CSM
( It's all Bush's fault! He should have known Mayor Gumbo was a retard! - Travis McGee (9/2))
To: rolling_stone
And how many cooperating people does it take to evade now and under the Fair Tax? The Fair Tax is easier to evade. Either a dishonest buyer or seller can evade the Fair Tax. Dishonest Buyer: Presents a sales tax exemption certificate for items of personal consumption. Dishonest Seller: Collects sales tax but fails to remit it.
A dishonest seller can evade the income tax by simply not filing. A dishonest buyer cannot evade the income tax.
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