Posted on 09/15/2005 7:03:21 AM PDT by groanup
Bingo. Even the sales tax advocacy groups admit this.
True, but any currently hidden tax collected from an income tax paying customer must make up for any taxes not paid by a person avoiding income taxes such as a prostitute or drug dealer...you are not even treading water...
wouldn't I just buy everything from the black market and save 22%?
How would you save 22%? The black market has to aquire their supplys to sell to you, they either pay the tax on that or take the risk of theft/embezzling/fraud etc. to give you a 22% lower price. I doubt that very much.
Remeber even someone operating on the black market has to have enough sales to make a living. The more customers ,the greater their visibility and risk of being caught through either informers or by direct observation by tax enforcement agents of the states.
You don't think government and legitimate businesses that are under audit and certification allowing them to purchase tax free are just going to sit by and let black markets take the retail market over do you?
Where is my logic wrong?
In thinking states don't enforce retail sales tax laws or fail to go after businesses and those who violate them, and in thinking you the customer are likely to see any benefit from buying black market to avoid a 22% tax. Guaranteed 22% is not enough to sustain a black market operation in face of the risks and costs associated with such businesses.
That can not be true. I agree that they carry some burden with the embedded costs in the prices of goods they pay, however they certainly are not carrying the same burden as a legitimately employed income tax payer.
The reason the rate is so high (30%) is simply because we have to many people that don't realize the size of the burden. The single biggest benefit to the NRST is the fact that ALL citizens will carry the burden, then realize the cost of the government they have been demanding. This will bring many people to the limited government political viewpoint that are currently demanding expanded government on the backs of the productive.
How do you propose reducing the size of government when half the population is ignorant to the cost of government?
Because of the 22% embedded taxes that are already in the price of goods and services. The end consumer pays for all these taxes in the form of higher prices. Of course this includes all the taxes paid by businesses and individuals.
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.
There are checks on exemption certificates and on sellers, inventory vs sales, just like IRS does now.
A dishonest seller can evade the income tax by simply not filing. A dishonest buyer cannot evade the income tax.
I see how you completely avoided answering how may collection points there are for each system. obviously 80% fewer collection points will be easier to police under a Fair Tax. There are no buyers and sellers under the income tax, but for a buyer to avoid the sales tax it would take either a cooperating seller (conspiracy) or as you suggested a fraudulent exemption certificate...far harder to avoid under a Fair Tax.
The price of the goods purchased do not contain the taxes paid by individuals. It contains the taxes paid by the corp/bus. as well as their compliance costs. Yes, prices contain some taxes paid for by the company on behalf of the employee, but they do not contain the withholdings from a taxpayers paycheck.
This is the old inclusive-exclusive argument that has been dealt with many times. If you are truly interested it is in the FAQs of the fairtax.org website. If you are not interested enough to inform yourself don't complain about non-issues.
Always a good thing to do
And the only thing missing is the purchaser information. And without the purchaser information, copies of the receipt could be given to multiple people showing you paid the tax. Without this information to correlate buyers and purchasers, receipts will be ineffective. It is a neccessary step for the administration of this tax. This is one item I can guarentee will be added if the fairtax ever becomes law.
I am a Far Tax proponent and I haven't given up on it. You are insistent on a purely technical point that is correct in its limited way but moot overall. When you claim that the present system and the Fair Tax are equal in that respect you are wrong. The present system taxes only income so it can never reach those folks without catching them, arresting them, and charging them with tax evasion. That is a RICO approach and has been used but it is not feasible for the government to do that in a broad way.
You seem equally intent on denying that the NRST will recoup some of that money when the scofflaws purchase something new, as they are likely to do. To insist on that is to be ingenuous.
You are caught up in static economic analysis. A change in the tax code will cause people to change behavior. Many people will create business out of their hobbies to acquire a sales tax exemption certificate.
Dynamic economic analysis suggest the number of collection points will increase as well and the number of sales tax exemption certificates. Both developments will increase the amount of fraud.
The most obvious is to exempt food and scrap the prebate. This way the government is not sending a $300 checks every month to every bum in this country keeping him supplied with wine and crack. Would save billions in administration costs.
What's not to believe? It is in the bill. I realize Hillary may end up with copies but otherwise it will be done.
If you insist on a negative approach to this you will end up as I said in another post to you, just giving up and taking what is handed to you.
You are caught up in static economic analysis. A change in the tax code will cause people to change behavior. Many people will create business out of their hobbies to acquire a sales tax exemption certificate.The first thing I'm doing is setting up a business. A miserable failure of a business that will allow me to buy stuff tax free.
If the scofflaws purchase something new in the legitimate economy, it will be taxed in either system. If the scofflaws purchase something new in the underground economy, it won't be taxed under either system.
Underground economy transactions by definition can't be taxed.
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