Posted on 02/20/2006 3:30:35 PM PST by Bigun
You don't seem to understand that the hidden taxes are not taxes paid into the Treasury Dept. as income tax (business or otherwise) but are prices increased by the cascading of business income tax costs into prices that are passed on to further levels in the production/distribution chain. They cause artificially increased prices due to downstream income taxes that have cascaded into increased costs for things eventually bought by consumers.LOL!!!! WHERE DOES THE MONEY FROM THE INCREASED PRICES GO? DOES THE BUSINESS BURN IT?
So, pigdog, are business profit taxes "normal taxes" in your eyes?I don't think he knows what you mean. I think pigdog believes that in life outside of the pigsty profits are really "hidden taxes" that raise the cost of products/services...
I guess now the Fairtax will not only eliminate inflation and the FED's "hidden taxes" but also profits (otherwise known as "hidden, cascading taxes" in pigdog's world)....maybe warts too.
You Squirrels seem to be munching on a bad bunch of nuts that affect your reasoning. You've completely missed the point that the "hidden taxes" are not taxes at all, but artificially-increased prices caused solely by the business income tax and compliance costs.
The "hidden taxes" themselves (since they are not taxes but unproductive price increases) do not need to be replaced by a revenue neutral FairTax. Instead they are removed - POOF! Gone!! That's why prices will decline with the elimination of income taxes. The income taxes formerly paid to he IRS (but not "hidden taxes" which are not so paid) are the ones involved in revenue neutrality.
The question is really not where the money in "hidden taxes" goes since it is not a tax at all, but where it comes from ... it comes from the consumer in the form of unnecessarily higher prices. It certainly takes no "secret tax agent" to realize these "hidden taxes" are not taxes at all. Most consumers with no agenda will realize this readily enough. Those with an anti-FairTax agenda (but no other plan for tax reform) will merely continue inane attacks.
The FairTax will not eliminate inflation, but certainly will help improve business profits in most cases as many studies by recognized economists have shown. No one that I know has claimed that the FairTax eliminates inflation (or warts for that matter).
Profits, OTOH, are not "hidden, cascading taxes" nor have I ever asserted that they were. That's your SQL claim, remember??
You've completely missed the point that the "hidden taxes" are not taxes at all, but artificially-increased prices caused solely by the business income tax and compliance costs. The "hidden taxes" themselves (since they are not taxes but unproductive price increases) do not need to be replaced by a revenue neutral FairTax.So the business income tax is not a tax and isn't revenue that would have to be replaced by the FairTax?!?
The question is really not where the money in "hidden taxes" goes since it is not a tax at all ...Well, actually that IS the question. Whether a tax or not, these wind up in SOMEONE'S pocket. If prices are going to drop, the amount has to come out of SOMEONE'S income statement.
WHERE IS ALL THIS "hidden" MONEY THAT'S SUPPOSED TO GO AWAY????
It most certainly doesn't vaporize (that is, unless it's not there to begin with.) Every accounting problem has credits and debits; income and expenses; every dollar in has an out.
WHO WALKS AWAY WITH ALL THESE SO-CALLED "hidden taxes" TODAY????
WHO WALKS AWAY WITH LESS AFTER THEIR ELIMINATION?
Are business profit taxes (represented by the $0.81 in Your Nightmare's example) part of the $927.7 Billion the AFT calls "income tax" in its 2003 "revenue neutral" tax rate calculations (Line 23 of Table 2)?
"... business income tax is not a tax and isn't revenue that would have to be replaced by the FairTax ..."Sorry, Nightie - misstating what I have said won't cut it either, no matter how much you'd like it to. I've said nothing like your misshapen claim. Business income taxes ARE indeed taxes and will be covered by the FairTax. Price increases caused by the "hidden taxes" (which as I've repeatedly shown and stated are not taxes at all) are removed rather than being covered by the FairTax. That's why prices will go down with the removal of income taxes and your (so-called) "real world" example in #393 biased against the FairTax shows this very clearly - allowing for something like a 15% or more price decrease. I'm surprised your fellow Squirrels haven't nibbled you to pieces for showing this since they've always claimed prices won't drop.
Your above quote is utter nonsense and precisely the opposite of what I've said.
pigdog from #524:"... business income tax is not a tax and isn't revenue that would have to be replaced by the FairTax ..."Sorry, Nightie - misstating what I have said won't cut it either, no matter how much you'd like it to. I've said nothing like your misshapen claim. Business income taxes ARE indeed taxes and will be covered by the FairTax. Price increases caused by the "hidden taxes" (which as I've repeatedly shown and stated are not taxes at all) are removed rather than being covered by the FairTax.
"You've completely missed the point that the 'hidden taxes' are not taxes at all, but artificially-increased prices caused solely by the business income tax and compliance costs."
"The 'hidden taxes' themselves (since they are not taxes but unproductive price increases) do not need to be replaced by a revenue neutral FairTax. Instead they are removed - POOF! Gone!!"
As for the prior post of yours (#526) the answer is obvious enough. The consumer benefits by the lowered prices that your toady Nightie demonstrated do exist in #393. That reduces the business revenue by a corresponding amount except for the fact that the FairTax will improve the economic conditions enough for businesses that most will have the opportunity to increase their revenues over those they prevoiously had (without taking that revenue in the form of non-productively increased prices).
If you didn't have such a locked-in anti-FairTax agenda you wouldn't even have bothered to ask such a question, but thanks for letting me explain it to you. Others will learn from your ignorance of the subject I'm sure.
... lowered prices that ... Nightie demonstrated do exist in #393 ...The ONLY thing demonstrated in #393 is that ACTUAL TAXES paid by businesses TO THE GOVERNMENT (part of the 927.7 Billion the AFT used to calculate revenue neutrality) are about 4.76% of prices in the example.
There are NO HIDDEN TAXES anywhere in the example. NONE! Every penny in the example can be traced to the original input cost, added value cost, profit, or ACTUAL TAX paid. There is not a penny of "artificial inflation."
If the answers to my questions are so obvious, why won't you answer them???
WHERE IS THE HIDDEN TAX???? (it's apparently so well hidden that it cannot be found!)
In fact had he used more realistic figures the hidden tax figure would probably be 20% or more leaving ample room for price decreases when the FairTax takes effect.Like your's - where the only added costs after the first dollar was gross profit. LOL! Now that's realistic!
My example was never presented (and loudly hyped) as "realistic" - yours was. It's still drastically skewed against the FairTax and is unrealistic as I've pointed out on several occasions. My example was always intended only to illustrate the mechanism - which it does.
Are you, perchance, claiming that your #393 does NOT show hidden taxes??? I don't know why the Squirrels don't kick you out of the nest with your outrageous claims and attempts to alter what was said. Perhaps they like that since it fits their agenda.
You know the funniest thing about pigdog's great example. It appears in an object that costs $66.44, there is a total of $65.44 profit in the supply chain that taxes are paid upon. Amazing efficiency, LOL. A $66.44 object has only $1 of costs and everything else is pure profit. I must be in the wrong business if that is how things really work.
Are you, perchance, claiming that your #393 does NOT show hidden taxes???It shows businesses paying taxes on their profits (if they have any). Your whole argument is based on the unproven belief that businesses in the real world "embed" their income taxes in the price of their goods. This goes against the very basic microeconomic understanding that price is based on supply and demand. The market dynamic sets the price, not the business.
... his example #393 ... shows ... what would be something like about a 15% hidden tax when ER payroll and compliance costs are included.His example shows nothing of the sort ... you just made up that number like you do every time you talk about it. And, according to you, Payroll taxes are not "hidden taxes" because they are actually paid to the government and counted as ACTUAL taxes.
Take those out (take out any compliance costs, too) and the MOST prices drop is by the EXACT amount of the ACTUAL tax (and compliance cost) removed. There is NO "artificial price" inflation in his example (and certainly not in yours,) the prices are only higher than cost and profit by the ACTUAL AMOUNT OF THE TAXES PAID (and any compliance costs).
Because of that, aggregate prices across the economy can drop NO MORE than that ACTUAL total amount of tax removed: about $200 B of ACTUAL corporate profit tax, about $100 B of ACTUAL non-corporate profit tax, about $360 B of ACTUAL payroll tax, and about $160 B of ACTUAL compliance costs. Spread over a $11,000 B economy, that amounts to NO MORE than about 7% price drop potential. If ANY business keeps ANY portion of the savings, then the actual price drop is less ... likely no more than 5% average across price drop the economy.
Add back in the 30% FairTax, and Consumer Prices RISE by and average of almost 24%.
You have never demonstrated ONE PENNY of "artificial price inflation" from "hidden taxes" (or costs, or whatever else you call them when you're cornered.)
You can't point to ONE PENNY of cost in ANY example that is not an ACTUAL tax, an ACTUAL cost, or an ACTUAL profit. You've been repeatedly asked to show where the "hidden" amount is, and you refuse ... mostly because you can't ... precisely because it's not there.
Read my 536 post. Did I read pigdog's example (post #323)correctly? Is pigdog saying there is a total of $65.44 profit in the supply chain on a $66.44 good.
You know the funniest thing about pigdog's great example. It appears in an object that costs $66.44, there is a total of $65.44 profit in the supply chain that taxes are paid upon. Amazing efficiency, LOL. A $66.44 object has only $1 of costs and everything else is pure profit. I must be in the wrong business if that is how things really work.And he's shocked to conclude that there were actually $22.51 in taxes paid on the $65.44 profit from the $66.44 item. See!! Taxes are 33.88% of prices!!!! Yeah, but only on an item where profits were 98.5% of the price!
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