Posted on 07/19/2006 7:26:18 AM PDT by Arcy
Uhh, if the FairTax is revenue neutral, the size of the base doesn't matter. That only changes the rate, not the amount of taxes we are paying.
The size of the base certainly does matter, as you note the rate falls for those paying taxes today.
As a consequence of a larger base reaching a greater proportion of the population, those paying taxes now pay less and realize a gain in purchasing power.
Those who have evading paying taxes in the past, pay more taxes in taxes through the purchase of goods and services. Lower tax rate spread across a larger base means the taxpayer of today has greater purchasing power due to that lower rate.
That is what we have said all along, and that you have denied all these years.
GEEZ
INDEED!!
Your fairtax calculation had an error or errors besides omitting any pre-nrst price reduction.YOUR FairTax calculation has an error in that it doesn't factor in an increase in the person's state and local taxes. This is the shell game y'all play. Y'all decrease a person's direct federal tax burden by increasing the federal taxes a person would pay through their state and local governments. Then y'all count the decrease in direct federal taxes but not the increase in state and local taxes. Wow! Magical savings in federal taxes!
Does you showing your (_|_) mean you don't agree with the AFT's statement?
I note that you have again avoided the essential. The statement is incomplete. I also note what that makes you in deliberately taking such in narrow context.
But then that is your usual MO. So I am not surprised to see it here.
Uhh, if the FairTax is revenue neutral, the size of the base doesn't matter. That only changes the rate, not the amount of taxes we are paying.IOW, when they reintroduce the income tax to compliment the Fairtax they can lower the Fairtax rate...or not.
They still don't understand what makes a "tax base". (all of us legally participating in the income tax system anyway).
You clowns are always crying about having to live with 60,000 pages of tax laws, how do you know you're legally participating, did you read and understand all 60,000 pages? Or maybe you just know all those 60,000 pages don't really affect you.
1)You don't have the right FCAWe are using 2003 income and tax data. I used the 2003 FCA for a married couple with a child from here ($4,853).
It isn't clear how you came up with tax. Can you elaborate? You have used the FCA as income,No I didn't. I added it to their income to get their gross spending. I then multiplied that by the FairTax rate to get their gross FairTax paid. I subtracted the FCA from gross to get their net FairTax paid. Dividing this from their income gives you their effective income tax rate.
The difference in 85891 and my original 87033 being the tax paid on the rebate you chose to include as income (although I don't agree that's the best way to show it, I will do it this way for now).I didn't include it in income, I included it in spending (you do expect people to SPEND the FCA, don't you?). The FCA is taxed when spent. It, like all other government transfers, is reduced in value by the amount of the FairTax.
97000+4508=101508 (add FCA as income) 101508*(1+9/91)=111547.25 (cost reductions or wage increases pre-nrst)Why would you increase the FCA by the percentage of wage increase? You should increase the wage and THEN add the FCA to get total spending (you need total spending to determine total tax paid).
$97,000 * (1 + 9/91) = $106,593 wages.And we haven't adjusted their state and local taxes yet.
$106,593 + $4,853 FCA = $112,446 total spending.
$112,446 * .23 = $25,862 gross FairTax paid
$25,862 - $4,853 FCA = $21,009 net FairTax paid.
$21,009 net tax paid / $106,593 income = 19.7% effective tax rate.
As a consequence of a larger base reaching a greater proportion of the population,A larger base does NOT mean it is reaching a greater proportion of the population. That's silly. It just means the base is larger. Actually income is a larger base than consumption (you guys like to compare all consumption to taxable income). If you wanted the largest base you would tax ALL income with no deductions. This wouldn't mean that it was reaching a greater proportion of the population though.
Those who have evading paying taxes in the past, pay more taxes in taxes through the purchase of goods and services. Lower tax rate spread across a larger base means the taxpayer of today has greater purchasing power due to that lower rate. That is what we have said all along, and that you have denied all these years.And you've said this while denying that anyone would evade or avoid the FairTax.
Their estimates have several flaws. Most notably, despite the fact that the FairTax has several features that tend toward reducing evasion (simplicity, lower marginal rates, drastic reduction in collection points, and greater likelihood of getting caught),the Treasury Department analysts assumed that the rate of evasion would be twice what it is for the income tax, i.e.,the current system rate is 15 percent so they used a 30 percent rate for the FairTax.
Anyone with half a brain and a little imagination can see that features claimed by Fairtax supporters to reduce evasion are way to narrow to enforce the compliance they predict. Sooner or later broad evasion will have to be addressed if the FairTax is enacted; care to guess what enforcement tools will be used?
Why would you increase the FCA by the percentage of wage increase?If you're using CBO calculations, how can it be an (additional) wage increase when most of it is already factored in their numbers for gross income?...And if it isn't, how do you add price reductions to gross income?
LOL!
And you've said this while denying that anyone would evade or avoid the FairTax.
And once again you mistate as is your MO, as what has clearly been said is that their will be no more tax evasion than their is under the current system and since marginal rates are lowered one has every every reason to believe tax evasion will be lower.
However such statements, not being in the interests of your agenda, are continually mistated by you into you prepetual strawman arguments.
Pitiful but normal for you.
A larger base does NOT mean it is reaching a greater proportion of the population. That's silly. It just means the base is larger.
In the case of going from a narrow income/payroll tax system to a broad retail sales tax system it certainly does.
Actually income is a larger base than consumption (you guys like to compare all consumption to taxable income).
Lets see, the current system taxes "taxable income" (the system being replaced by a retail sales tax system,) but all consumption is not comparable to total income of that broader base you are talking about.
All consumption my friend encompasses a much broader proportion of the population than the mere "taxable income" achievable in the current tax system with it high non-compliance rates and broad illegal trade and underground cash economy.
Yep once again you try for your Strawman and narrow statement. Sorry no go.
Lower tax rate spread across a larger base means the taxpayer of today has greater purchasing power due to that lower rate.Interesting except the lower rate exists only in your mind.
In the case of going from a narrow income/payroll tax system to a broad retail sales tax system it certainly does.That has to do with WHICH base, no the size of of it. If you removed the standard deduction from the income tax, the base would be broader and the marginal rates could be reduced but the tax is still being applied to same proportion of the population.
All consumption my friend encompasses a much broader proportion of the population than the mere "taxable income" achievable in the current tax system with it high non-compliance rates and broad illegal trade and underground cash economy.See, there you go again. All consumption vs. taxable income. What is taxable income? It's just income that the government decided to tax just like the FairTax base would be taxable consumption. Take away the deductions (like the Flat Tax does except for the personal deduction) and income is larger than consumption. It HAS to be. What else would people use for consumption?
Yep once again you try for your Strawman and narrow statement. Sorry no go.STRAWMAN...STRAWMAN...STRAWMAN! You guys are like a broken record lately. [And y'all don't seem to know what a straw man is because y'all keep misusing the term.]
And once again you mistate as is your MO, as what has clearly been said is that their will be no more tax evasion than their is under the current system and since marginal rates are lowered one has every every reason to believe tax evasion will be lower.Then you might want to factor in evasion and avoidance when you calculate the rate. This is another one of your claims (like Jorgenson) that you are wrong about but can't/won't admit. Treasury obviously doesn't buy your BS. I think they would know what's in the data better than you would.
In the case of going from a narrow income/payroll tax system to a broad retail sales tax system it certainly does.
That has to do with WHICH base, no the size of of it.
The tax base my blind friend is comprised of a much larger populationbase purchasing goods and services as opposed to the population base paying taxes on "taxable income" of the current system being replaced.
Once again you try divert from the essence to construct your strawman.
Then you might want to factor in evasion and avoidance when you calculate the rate.
Since the NIPA data sets (from which the consumption tax rate is established) does not include unreported transactions of the cash underground nor of illegal trade, only the reports of legitimate businesses in their normal reporting requirements for government and investors. The rate adequately reflects the evasion and avoidence of the current system for which there is no basis to believe will be any larger and many reasons to believe will be actually decline going to a retail sales tax system.
But then you already know that as it has been pointed out to many times before.
Like I said, and you continue to demonstrate today, your MO is to take the narrowest context, play on lack of knowledge and construct strawmen comprising you whole style of argument.
Since the NIPA data sets (from which the consumption tax rate is established) does not include unreported transactions of the cash underground nor of illegal trade, only the reports of legitimate businesses in their normal reporting requirements for government and investors.BUT THAT'S NOT WHAT WE ARE TALKING ABOUT, IS IT? What we are talking about is people ordering stuff online from Canada to avoid the tax. We are talking about people starting personal businesses to evade the tax. We are also talking about the INCREASE in the underground trade DUE to the FairTax!!! Do you really think you can put a 30% tax on goods and there not be an INCREASE in the black market? Come on. Take a trip on the clue train!
But then you already know that as it has been pointed out to many times before.It doesn't matter how many times you say it. Repetition doesn't make something true.
Like I said, and you continue to demonstrate today, your MO is to take the narrowest context, play on lack of knowledge and construct strawmen comprising you whole style of argument.And your MO is to steadfastly deny what is obvious to any reasonable observer (in this case, Treasury). You did this with Jorgenson for literally YEARS!
The tax base my blind friend is comprised of a much larger populationbase purchasing goods and services as opposed to the population base paying taxes on "taxable income" of the current system being replaced.Oy.
BUT THAT'S NOT WHAT WE ARE TALKING ABOUT, IS IT? What we are talking about is people ordering stuff online from Canada to avoid the tax.
So they can pay higher Canadian income/payroll/gst/excise taxes embedded in stuff online, evading U.S. taxes more than they do now? Sure you may get some to buy that one, I don't.
It doesn't matter how many times you say it. Repetition doesn't make something true.
So again you demonstrate your MO, making a truism, this time for misdirection by failing to stating broader context.
For the reality is the facts make it true, and repetition has only been necessary as a consequence of your repeated denial of facts.
http://spruce.flint.umich.edu/~mjperry/Unit10.html
PROBLEMS WITH GDP -
2. Underground economy - could also easily be another $1T, or 10-15% of GDP from prostitution, drug trafficking, gambling, smuggling, illegal gun sales, tax evasion, etc. Also unreported cash income from cash business - taxi drivers, waiters/waitresses, bars, craftspeople, carnivals, fleas markets, illegal immigrants, etc.
And your MO is to steadfastly deny what is obvious to any reasonable observer (in this case, Treasury).
My MO, of necessity has been one of continually correcting your deliberate mistatements and misrepresentations. But then you know that as well. So yes I certainly deny your propaganda, and will continue to do so.
When a government agency has a great deal invested in the status quo I certainly do look at a broader range of facts rather than a narrow rehash of prior misinformation from many sources.
You did this with Jorgenson for literally YEARS!
Interesting I do not recall that Jorgenson ever claimed that GDP would not increase, or that the total price that consumers would pay would not decrease giving them a measurable benefit over replacing just the income tax system with a generic national retail sales tax system.
Quite the contrary. Jorgenson claimed a broad range of effects in replacing just the income tax alone(not counting the benefit to be derived from replacing payroll taxes as well), effects include an increase in overall increase in consumer purchasing power.
But then that is something you deny to this day inspite of your knowing otherwise.
Again your MO shows through, narrow focus lacking context and playing on lack of knowledge as you always do.
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