Posted on 04/03/2006 3:27:33 AM PDT by Man50D
I am not the one in the Zero Sum World. The money goes into the pockets of the workers, which is why prices can't come down. You are the one double-counting $1.3 trillion benefit by assuming that money both goes to workers AND can be used to reduce prices.
Money did not ignore anything, they just pointed to the most glaring error in the fairtax spin. Certainly there will be some savings for some cost reduction, but it will be on the order of 7-10%, not 22%. Once the 30% sales tax is added, costs will rise 17-20% under the fairtax.
I am been debating this issue for seven years. I know what the research assumes, and it finally was exposed in Money Magazine as a serious error. See post 18.
I own my own business, I pay plenty of taxes.
I own and operate a business too, and I can say categorically if all my expenses due to income tax costs and compliance and payroll taxes were eliminated, I would at best see a savings of 10%, and that is being generous. My after sales tax price to consumers will go up around 20%.
It would be lower, but it would not go away. I can see perhaps $100 billion in savings.
It would take a lot of the reason for illegal immigration away.
Cheap labor under either system is still attractive.
It does a lot of good.
It does some good mostly in the form of making our exports cheaper and our imports more expensive which would be positive for our trade balance but negative for our consumer.
It would make everyone a tax payer.
No more so then the current code. If you believe the assumptions of the fairtaxers, everyone is already paying the embedded tax when they buy the products. But under the fairtax everyone is getting a monthly $500 check for the family consumption allowance, which would make it by far the biggest welfare department ever created.
Everyone would start being more aware of how much tax they pay and they would feel like they are helping to pay for things and might make more informed decisions at the poles.
Everyone would want a bigger monthly rebate check.
You ignore the fact that you would see a savings in your cost of product.
Your suppliers would be able to pass along their 'cost of compliance' savings to you in lower prices.
10% lower costs to you in both labor & materials could enable you to cut prices by 20%.. -- Correct?
LOL, interesting mathmatics. I suppose if I save 10% in office labor, 10% in assembly labor, 10% in sales labor, 10% in office supplies, and 10% in raw materials, I could cut my prices 50%!!!!!!!!......If I see 10% lower costs in labor and 10% in material, that only saves me 10%. Thus I can only cut my prices 10%.
LOL, interesting mathmatics.What's even more interesting is them calling for 10% reduction in wages/labor.
Well, there would be a direct savings of 7.65% for the employers portion of payroll that the employer should see.
the employers portion of payroll that the employer should seeA gray area yet to be determined.
"-- It would take a lot of the reason for illegal immigration away. It would make everyone a tax payer. --"
'Always' wrongly replies:
No more so then the current code.
Wrong.. -- Illegals pay very little under the 'current code'. -- Everything they bought would be taxed under the fair tax, as you know.
--- under the fairtax everyone is getting a monthly $500 check for the family consumption allowance,
Wrong. -- Illegals would ~not~ get an allowance check, as you well know.
which would make it by far the biggest welfare department ever created.
Welfare is a fact of life. -- Perhaps this aspect of the fair tax would lead to a genuine nationwide reform in how we structure the whole mess. -- All of the State & local welfare schemes could be incorporated into the 'rebate' allowance.
Everything bought today has embedded taxes in them. So when an illegal buys goods, his money is going towards paying all the taxes in creating those goods. Certainly the illegal is probably cheating the income tax system assuming he makes enough to have an income tax liability. But if he buys legal goods, he is paying taxes indirectly.
Wrong. -- Illegals would ~not~ get an allowance check, as you well know.
Until the courts rule they do get allowance checks.
Welfare is a fact of life.
So we should just make bigger welfare programs to the tune of $500 Billion per year????
Breaking News!
Sit down folks, Senator John Cornyn is now a co-sponsor to The FairTax Bill, S 25!
TT
Everything bought today has embedded taxes in them.
You're making the fair tax point.
So when an illegal buys goods, his money is going towards paying all the taxes in creating those goods.
Of course it is. But under the fair tax, as you know, he would pay his share of national taxes, -- Unpaid under the 'current code'.
-- under the fairtax everyone is getting a monthly $500 check for the family consumption allowance
Wrong. -- Illegals would ~not~ get an allowance check, as you well know.
Until the courts rule they do get allowance checks.
Wrong. -- Courts do not 'rule'. Under our system, the Constitution rules. --
So we should just make bigger welfare programs to the tune of $500 Billion per year????
Welfare is a fact of life. -- Perhaps this aspect of the fair tax would lead to a genuine nationwide reform in how we structure the whole mess. -- All of the State & local welfare schemes could be incorporated into the 'rebate' allowance.
tpaine,
By the logic Always Right uses, the current Income Tax refund must also be called 'welfare'. In fact, the income taxes that would otherwise be owed if not for the Personal and Child exemptions would also need to be called 'welfare'. Obviously, nobody looks at it that way.
The FCA under the FairTax is nothing more than a monthly tax refund check based on an assumption that everyone spends at least up to the poverty-level. That is not necessarily true for some very low-income persons, but it is quite small and doesn't justify somebody calling the FCA a $500B 'welfare' program.
Only 12% of the population lives below the poverty-line, and many of those counted are in the illegal alien category that won't receive any FCA. However, even if ALL 12% purchased NOTHING and ALL of them received FCA, it would only be a $60B welfare program. Obviously, if you remove the illegal aliens portion of FCA payments and admit that EVERYBODY will be buying SOMETHING and therefor entitled to SOME FCA, the magnitude of the 'welfare' aspect drops dramatically. The term 'welfare' should be limited to money received from the government that exceeds the taxed paid to the government. The portion of the FCA that could be properly called 'welfare' is more like $15B. This is actually LESS than the EITC overpayments under the Income Tax system.
Always Right also likes to twist the 'embedded tax' figures vs. illegal aliens argument to his benefit. He says illegals are already paying taxes because of the embedded tax -- which is true -- but he implies there will be little additional tax revenue from them under the FairTax -- which is false. He has used a price drop figure of 10%, which means the illegal alien is theoretically paying 10% of their purchases in embedded taxes. Under the FairTax they would be paying 23% of all purchases in taxes. So their taxes will more than DOUBLE.
On top of that, the 'embedded tax' costs are not all money remitted to the government. Some of it is just compliance cost that is spent by businesses on tax accounting, planning, etc. so it is built into the prices, but the government doesn't receive any revenue from it. Except third-hand as income-tax revenue on the profits of the vendors providing those services. This is why the government has only received 8%-10% of Retail Sales as taxes from businesses, but the embedded costs cause prices to rise by an additional 3%-4% above and beyond that.
Well put... -- I've been reading about & commenting on the Fair Tax since it was first proposed, and have yet to see any really rational opposition posted about it.
Actually, anyone who can defend our current tax mess is by definition irrational. Catch 22.
Isn't Sanity the first reason to disqualify you from judging whether or not Catch 22 is legal or not?
Some here at FR think it's sane to insist that governments have the power to prohibit liberty, and that anyone who protests this power is crazy, - a belief that 'proves' the governments point.
I hope we both can agree on which belief is actually insane.
"The fairtax research assumed wages would go down with taxes so the take home pay would be stay the same. "
Untrue ... and you know it. No such thing was ever assumed (or shown). That's just more of your horse-puckey!!!
You might as well stop p[osting that old hitpiece from the liberal magazine author. It's been repeatedly discredited as trash.
Get some new material.
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