Posted on 12/05/2005 2:36:33 PM PST by Eaglewatcher
Yes, it was eleven. It seems to me that states without an income tax will get the biggest portion of the foreign corporations that build plants and headquarters in the US.
Maybe we shoul;d all move to TN, KY, NC, etc???
Or TX and FL?
Yup, those would be OK, too, especially since they have no state income tax already and will be a step ahead when the FairTax becomes law.
you can't have fallen into a trap that easily.
there certainly must be an exception to the used goods free pass when coming across a border -- other wise the amount of one day old used goods being transferred across the borders is going to be astronomical... if that loophole exists it certainly will be closed quickly.
anyways, let's end this silly tangent. just my personal opinion that criminals will be criminals and unless the government starts tracking people's purchase they will find some way to buy most of their goods w/o paying uncle sam.
I see no "trap" but I agree it's a silly tangent. I've never said and never would that criminals will not be criminals or that some will not try to evade the FairTax. That would always be true with any tax.
My point is that is will be much more difficult that it is at present with the truly massive evasion going on with the illegal economy under the income tax. there will be much less evasion than at present I believe. Much less.
I saw a headline today but didn't have access to an article. The headline was President Bush talking on the economy and tax reform. I was hoping an article about his speech would be posted on FR. Curious to know is he said anything about the tax panel's report or the FairTax.
Fair taxation is way less evaded. I think if it happens we'll see just how much revenue has been locked up in all the elite's fancy tax loopholes.
The leftist propaganda machine foundations and trusts should be cracked next.
Their bitchin in Hollywierd and Kerrycuntry will be music to my ears, those "patriots"!
We've been over this a hundred times and you still insist on the lie. It is exactly the same. You are not capturing one penny of the illegal economy. The drug dealer and prostitute are not submitting 23 percent of their gross sales to the government. They are evading just as much as they do today. When they buy things legally, taxes are paid. No different than today. But I know you will continue to make this false point.
Then what are they going to eat, where, drive, and live in? They have to spend it somewhere. The difference, is that whereas now, the government is out their entire tax payment from these people, with FairTax the government is only out the first derivitive. They will spend it. It will get taxed.
This is the primary point where we disagree.
Federal corporate income tax is about $184 billion (for FY 2004). Divide that among companies however you like, pass it back and forth between different layers of production all you want - it still adds up to $184 billion. That is only about 1.6% of the GDP. Add a little extra for taxes on sole proprietorships and partnerships and add a little more for the accounting and you are probably still under 3% of the average cost of an item for business taxes and compliance costs (unless you can convince me that compliance costs are a lot higher than I think they are).
The rest of the 22% embedded tax comes from the employers' half of SS and Medicare, the employees' half of SS and Medicare and the employees' income tax. The employers' half of SS/Medicare is eliminated by the Fair Tax. That leaves the part of employees' pay allocated to income, SS and Medicare taxes as the rest of the embedded tax.
For the average item you buy, the vast majority of the price is labor, not business profit as you assume. Therefore the largest portion of the embedded tax on that item is tax on labor. The only way to remove that cost from the embedded tax is to cut the amount paid for that labor.
`SEC. 510. TAX TO BE SEPARATELY STATED AND CHARGED.
`(a) In General- For each purchase of taxable property or services for which a tax is imposed by section 101, the seller shall charge the tax imposed by section 101 separately from the purchase. For purchase of taxable property or services for which a tax is imposed by section 101, the seller shall provide to the purchaser a receipt for each transaction that includes--
`(1) the property or services price exclusive of tax;
`(2) the amount of tax paid;
`(3) the property or service price inclusive of tax;
`(4) the tax rate (the amount of tax paid (per paragraph (2)) divided by the property or service price inclusive of tax (per paragraph (3));
`(5) the date that the good or service was sold;
`(6) the name of the vendor; and
`(7) the vendor registration number.
| Current system | FairTax system | |
| Gross income | $10,712 | $10,712 |
| Less payroll taxes | -819 | 0.00 |
| Less Federal income taxes | 0.00 | 0.00 |
| Plus Earned Income Tax Credit | +4,204 | 0.00 |
| Add the prebate family allowance | 0.00 | +3,701 |
| Spendable income | 14,097 | 14,413 |
| Federal sales tax | 0.00 | -3,315 |
| True after-tax purchasing power | $14,097 | $11,098 |
Here is what there chart should read if they want to use their number properly.
| Current system | FairTax system | |
| Gross income | $10,712 | $10,712 |
| Less payroll taxes | -819 | 0.00 |
| Less Federal income taxes | 0.00 | 0.00 |
| Plus Earned Income Tax Credit | +4,204 | 0.00 |
| Removal of the hidden tax passed along by your employer. | 0.00 | +3,101 |
| Add the prebate family allowance | 0.00 | +3,701 |
| Spendable income | 14,097 | 17,514 |
| Federal sales tax | 0.00 | -3,315 |
| True after-tax purchasing power | $14,097 | $14,199 |
parse words all you'd like but the only legitimate way to show the 'current system' taking away $3101 from the poor soul is to show it as being added in the new system.
in the current system the 3101 is not being taken away from the person's 10k income or their 4k EIC -- the way they show it is plain wrong aside from misleading.
Probably the same place they spend it today. And guess what, when criminals spend their money legally today, they pay that 22 percent embedded taxes. The only real way to capture the illegal economy is to actually collect taxes on the illegal activity. THis is not rocket science folks. Claiming you are taxing the illegal economy is a bold face lie.
The difference, is that whereas now, the government is out their entire tax payment from these people,The next time you drive through their neighborhood check out the fine houses and automobiles they own. Just think of all that sales tax money you'll be getting.
People use after tax money to buy drugs. Drug dealers pay all the embedded taxes you Fairtaxers claim are in everything they purchase now with the purcaser's after tax money....
Tax, tax, tax isn't that what you want?
With the Fairtax they won't remit taxes on their sales AND they'll all get a (gag!) "prebate".
They can then take their tax free ill gotten gains along with their (gag!) "prebate" and launder it in a "it's none of the government's business where your money comes from" tax free savings account.
BTW, practically everything they own is stolen so no tax collected there either.
Total $20.00
Federal Tax $4.60
Net to Seller $15.40
Same shirt. Same price. Example of tax receipt. Tax Exclusive.
Shirt: $15.40
Federal Tax $4.60
Total $20.00
These people are paying taxes to the Federal Govt right now when they buy those chains, jackets, and shoes. They are paying them in the form of embedded taxes37
Limited to products and service produced in USA. All "those chains, jackets and shoes" are not made in USA.
The FairTax will obtain ZERO revenue from the illegal economy. 38
Not all products purchased by people in the illegal economy are made in USA. Taxes embedded in the chain of production of imports are collected by foreign governments. The only US taxes imbedded in after-the-fact imports are in distribution, warehouse and retail store -- none from manufacturing.
Rep. Bill Archer, Chairman, House Ways and Means Committee:
"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."
The large influx of new jobs, among other things, means the current trade imbalance (deficit) will balance out and likely tip to USAs advantage. In other words a greater percentage of "those chains, jackets and shoes" will be made in USA, thereby foreign governments will see their tax receipts decrease.
In order for foreign governments to retain their present level of tax receipts they'll have to replace their outdated, economy-draining tax systems with a consumption based sales tax.
The USA can lead the way to honest economic freedom and financial privacy the world over -- beginning with it's own citizens.
If anyone thinks the present outsourcing by American based companies, many of which are also building new manufacturing plants in foreign countries is bad now, it would be much worse if a major first world country beats USA to the punch by implementing a consumption based sales tax first. Also, that country would get the new jobs and USAs trade imbalance would widen.
It's not a matter of if consumption-based sales tax will gain dominance the world over, but when, and which country will lead the charge and which countries will play catch up.
The United States must take the lead.
Claiming you are taxing the illegal economy is a bold face lie.
You'll have to correct that error -- "a bold faced lie" -- after you read the post at 117.
Shirt: $15.40How did you arrive at $4.60 tax on $15.40 price?
Federal Tax $4.60
Total $20.00
Do you also predict the weather and earthquakes?
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