Posted on 07/30/2007 4:48:06 PM PDT by Ultra Sonic 007
Edited on 07/31/2007 9:40:17 AM PDT by Admin Moderator. [history]
Cost does affect the price the seller is willing to offer. That is, it provides a floor the seller must stay above to a greater extent than the seller goes below.
Most people would call that "breaking even". Of course, if the company plans to make zero profit, they won't plan to pay any taxes. How many companies plan on making zero profit Lewis?
You're unbelievable.
It's already difficult to compete with low, low labor costs. As it is today, we compete against those low labor costsYou contradicted yourself....again.----
But US manufacturers can't make enough to stay alive without including tax costs in prices.
I'm pretty sure they buy from overseas manufacturers Lewis. If you still say walmart manufactures - domestically or otherwise, please provide documentation.
Why would anyone manufacture overseas anyway? Could it be tax costs are prohibitively high in the US? You know, those costs you say don't affect the prices of goods? LOL. Yes, lewis, those are the same costs you stipulate to - along with everyone else. You need some sleep.
If a US company [or any company] continuously sells at a price that is below cost, the company will not survive. Do you not get that?
That's why taxes and compliance costs of US manufacturers make the price of US goods what they are... 9% higher than they would be without them.
In order to survive, domestic mfgrs have to include their costs in price - all of them. Then importers raise their price to just below the lowest possible domestically manufactured price.
And there you have our market. Imported goods underselling US made goods while the imported good makes a huge profit margin.
Everyone does NOT pay the same marginal rate under the income tax. I hope you knew that.
My tagline references this difference and connotes that the income tax has a "divide and conquer" approach to taxing us while the nrst would have a united population against higher taxes.
I didn't think I'd have to explain that.
Sorry lewis. THe claim I make is that taxes per se and compliance costs come to 9% of retail prices.I'll just post your words and links to them.Anything else you find is like OReilly finding hate speech on FR. You would have to quote out of context and quote me quoting you.
Again, my claim is that taxes per se and compliance costs come to 9% of retail prices.
Principled: Yes, the amount of eliminated cost is virtually the same as the nrst. But the taxes themselves are but a portion of the costs that will be eliminated.The 22% is the costs of the tax system, not just the taxes per se.
Principled:
You not only contradicted yourself again you lied again as well.
Business tax costs are more than the 9% you stipulate. That 9% only includes business taxes and compliance costs.
You fail to see the ee payroll and ee income taxes as an expense to the company. That's fine, then they become a gain for the employee. The combination of the business tax savings and compliance costs put together with employee gains makes the real price remain constant.
You're making headway - at least now you have come to admit that retail prices are at least 9% tax costs.
Jorgenson said 22% - and you always wonder where the remainder is. I will try not to overburden you lewis - just try to see the employee gains as part of the 22%. Then remember that Jorgenson made a simplifying assumption: that ALL costs would be taken by the employer and none to the employee - that led him to the 22%.
So you have a choice lewis. You can split up the 22% Jorgenson asserts [as you have been doing with th e9% to business] and apply the rest to the individual worker or investor
OR
you can apply ALL the savings to one entity in order to quantify the total. That's what jorgenson did. He applied all possible tax cost savings to the employer.
Hence in Jorgenson's model, take home wage remained stable and nominal prices also remained stable. [note here that real prices obviously remain stable].
In the model you and nearly everyone uses because it most closely models the real world, business absorbs er payroll savings, business income tax savings, and compliance cost savings [coming to the stipulated 9%] while the employee's take home pay increases by ee payroll no longer withheld and ee income tax no longer withheld.
Either way you choose or any way it splits up, the total is the same. That is, no matter how you slice it, real prices remain constant.
BTW, the 9% you apply to business and the increases in er take home are not all the savings that will be applied.
BTW lewis, all of this [you always being wrong] doesn’t mean you have to accept the nrst - you don’t. But it does mean you will have to begin to reveal the real reason[s] you oppose it.
BTW, the 9% you apply to business and the increases in ee take home are not all the savings that will be applied.
I don’t think i like it.
You will probably think I am a nut, but the main thing I like about a sales tax replacement for the income tax, is it will encourage the informal economy...that’s the black market.
What I don’t like about it is what I fear the gov’t will do in retaliation. I think in order to quell the informal economy and reign it in, big brother could easily resort to a tactic that will gradually evolve into the “mark of the beast” described in revelations in the bible.
Oh, also, I like the idea of getting rid of the IRS and a whole industry of unproductive paper shufflers...that being tax attorneys and CPAs.
Although prostitute will pay taxes under the Fair Tax, the pimp will get around paying the tax. As the sum of the prostitute's income is equal to the sum of the pimps payments, there will still be a loss of taxation equal that amount.
I don't think the government has any more or less incentive to go after that lost revenue than they do to go after it now.
The great benefit would be that taxation will be reconnected with voter. Although a poor person now pays far more for goods and services (from the rich) than they otherwise should, the logical connection is hidden.
quell the black market
~~~~~~~~~~~
No, I posted the opposite. The black market will be encouraged by switching to a sales tax.
No sane person would.
Speak for yourself. Most everyone in business understands that increasing costs before profit, increases the cost of the goods or services provided.
You assume a world where the maximum bearable amount is always charged. Capitalism/competition creates price pressures well below the maximum price point.
Surely you would agree that increasing the cost of a raw material would increase the cost of product (e.g. gasoline)? Why is that? By your model it would only drive operating costs/profit lower.
When an industry has a common cost pressure, prices rise. This is not debatable. Taxes are most certainly a common price pressure. In my own business, I always take taxation into account when I determine my necessary profit to proceed. Taxation reduces that profit by percentage and forces pressure points not only on reducing what I will pay (not totally in my control) but ALSO in determining the minimum I will accept in payment.
Simply put, you ask me to do a job for you. I say I will do it for $100 profit. An amount I find will pay for an equitable amount of goods and services for myself. Then you say that I must give you a 40% refund on the $100. To think that I will continue charging you $100 for that job is extremely naive. In fact, I will have to increase your cost by $66 to ensure that I still walk away with $100 in profit.
Do you not think that I could offer much less in salary to my employees if the income were tax free? But you insist that increased taxation would not force me to increase their salary. Pure silliness.
You aren't pretending that a 40% tax (even if there was one) applies to the company's gross income are you?
Where did you come up with that? It reduces profit by 40%. That not only causes companies to make otherwise stupid business decisions to manipulate taxes, but also forces them to charge more in order to achieve the same profit. If the return on investment target is 10% and that could be attained on a $1.00 item before taxation, a 40% tax on profit would force a price increase to ~ $1.05 . Market pressures don't exist, as the same taxation applies to all competitors. It is therefore no different than increasing the cost of raw materials.
I don't know exactly where you got that number but it implies that the Fairtax would have to be 10% or below before it can get approval of "more than 50% of the people" , otherwise no one will fall for the 23% scam...Or did you expect "more than 50% of the people" to fall for the 23% rate in hopes of a 10% rate later?
23% scam? The rate will be whatever it is based on spending. If you think that everyone being taxed an equal percentage is a scam and that graduated rates are fair, then you should perhaps check out DU.
No, its definitely you.
Is a flat tax a good idea? Yes.
Will a flat sales tax make every voter more conscious and conscientious with regard to public spending? Yes.
Will it be harder to administer than the income tax? No.
Will it promote saving? Yes.
You haven't provided a downside. You obviously don't agree with the promises of some, but what is the downside that you see?
The only downside that I see, is that wages are currently inflated at the high end in order to compensate for the graduated income tax, and those individuals would receive a short term benefit. Short term because the market would quickly correct for it.
If one believes in capitalism, a flat sales tax is superior to the income tax in every way.
Oops, my mistake. Well, as I said, I don't think it will have a quelling effect like the proponents suggest, but I don't think it will encourage more of it either.
The drug pusher that now reports no income will report no sales.
Are you nuts? When sales tax is 25% people will freak and will be falling all over themselves to buy things from a guy on the street who charges no tax.
I wonder how they will treat internet sales? Will the internet still be tax free?
Garage sales? Will they try to crack down on garage sales and yard sales?
What about gold? Gold is technically currency, so charging a tax to exchange one currency for another isn’t very fair.
45 states have a sales tax. If a sales tax is such a great idea, why not adopt one of the 45 plans we know works and run with it?
Throw away "the book" and read HR25. Anything that isn't legislated is wishful thinking, a dream, speculation, conjecture and lacks any logic.Will a flat sales tax make every voter more conscious and conscientious with regard to public spending? Yes.
How? will "the voter" that never looked at a paycheck stub, who's now getting a government check or direct deposit every month suddenly start adding up every receipt thrown in the bottom of a bag...would the sales tax rate be that drastic a change? AFT says not.Will it be harder to administer than the income tax? No.
Frankly you don't know enough about what it is to know that. But, the Fairtax would be administered by 50 different states with 50 different interpretations on day one. BTW, at what point does a state worker become a federal agent and then back again...What bureaucracy cuts his/her check?
Read this and notice how many times the word "expand" is used, then multiply that by 50 and that would have to be BEFORE the tax was implemented or one dime of Fairtax was collected...Where would the money come from to do that at each state level? Raise state taxes? Do you think there would only be one office in each state? In fact where would the money come from to send every household in the nation a check before one dime of Fairtax is collected?Will it promote saving? Yes.
AFT says the Fairtax would reduce interest rates 25% (that's huge)...hardly a cause to go running to the bank with all that extra cash to open a savings account.what is the downside that you see?
I'm opposed to it because of the lies, misinformation and speculative talk as if it's all matter of fact (like you're doing here) spewed out to try and sell it...Obviously whoever is promoting the lies and misinformation doesn't think it can stand under it's own merit, why should I?
Like I said, pick any one of 45 successful sales tax plans and run with it.
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