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]
[snipped - excerpt did not agree with article]
No and I have the papers to prove it ;-)
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.
Resale perhaps, but the supply simply wouldn't exist for most items. Liquor, cigarettes, and gasoline are all taxed at much greater than 23% now, yet I don't see a huge street market for them.
I wonder how they will treat internet sales? Will the internet still be tax free?
They will go after Internet sales. Yet as much as I dislike taxes, I can't think of a logical argument that the Internet is a separate world exempt for standard laws.
Garage sales? Will they try to crack down on garage sales and yard sales?
I have an income tax rate much higher than 23% now, yet I've never had an IRS agent check out my garage sale income. I think your concern that secondary sales of used items will become a target of revenuers is unfounded. Indeed, the sale of personal items below a certain value would likely by excluded.
What about gold? Gold is technically currency, so charging a tax to exchange one currency for another isn’t very fair.
Gold isn't currency, as I'm not required to accept it as payment. However, you raise an interesting point, a 23% tax on commodities would certainly kill the speculative commodities business. I'm tempted to say there isn't a downside to that, but I haven't sufficiently mulled it over. The more pertinent question is whether all items would be taxed. If yes, then the rate would drop very low (I'm guessing 2%) and be payed mostly by business. It would also drive out middlemen. If there is an exemption for items that constitute a business expense, then CPA's will not disappear.
The problem with taxing every exchange is that a product that changes hands five times at 10% taxation, becomes 61% more expensive.
A business expense exclusion to sales tax would have to be implemented. This could also apply to Gold. In fact, this is exactly what is done NOW with state sales tax.
Most all of you concerns apply to current state and local sales tax (few problems), so I don't understand your fear.
The problem with taxing every exchange is that a product that changes hands five times at 10% taxation, becomes 61% more expensive.I'd like to see that math.
This is where we fundamentally disagree. Sales tax is not hidden. I notice my 7% sales tax each and every time I pay for something, especially big ticket items.
I very much believe that a person that gets a $300 TV and has to shell out $323, or pay an extra $46,000 for a house, will be inclined to want to limit spending and reduce taxes.
If you don't think people will respond to any level of direct and open taxation, then you might as well give up on everything right now.
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?
As do thousands of municipalities. These are all flat taxes and work very well. There is also stiff resistance to even small increases. The existing sales tax plans show how well it works. I live in Florida, where we have no income tax and yet collect revenue just fine. Compare our economy to the North East where they have heavy and graduated state income taxes. So, OK, I'll take the Florida plan as a national model.
Frankly you don't know enough about what it is to know that.
Sure I do. Compare our Florida sales tax enforcement to the national income tax enforcement. Much lower per citizen, and everything else is equal.
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?
I pay a city, county, and state sales tax right now. All of your above concerns apply, yet the problems don't exist.
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.
I don't accept that percentage (what is the causal reason?), but let's run with it. If I invest $100 at 5% now and pay 25% tax on the interest, I get $4. If I invest at 25% less return (4%) I get $4. The question is do I run out and spend my $4 or do I save it and let it compound? As my savings are not taxed, but my purchases are, the incentive is to save.
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)
I love it when people call me a lier because they can't form an effective argument and/or don't wish to think about what I have to say. I would suggest you withhold such spacious attacks on my character, unless you can prove that I am misrepresenting what I know to be wrong, and now just disagreeing with you. As for all of the arguments being made in favor of it, I only feel obliged to take ownership of what I myself have asserted. I don't recall magically applying ownership of someone else's arguments to you. Reciprocity would be appreciated.
Like I said, pick any one of 45 successful sales tax plans and run with it.
Not sure whether you're being serious or not, but I'm fine with Florida's plan. Flat is fair, and only a consumption tax will result in a flat tax.
I'd like to see that math.
$1.00 X 10% = $1.10
$1.10 X 10% = $1.21
$1.21 X 10% = $1.33
$1.33 X 10% = $1.46
$1.46 X 10% = $1.61
Any other areas of study that I can help you with?
should have read "$369" with tax (based on 23%). I doubt very many people wouldn't notice the extra $69, and feel that it was an awful high tax.
I very much believe that a person that gets a $300 TV and has to shell out $323,Well sorry to burst your bubble but you've been lied to and you fell for it.
The tax is 23% OF the gross payment not 23% ON the price.
A 300.00 TV would be $390.00 and your $200,000 house would be $260,000...$90 is 23% of $390(gross payment) and $60,000 is 23% of $260,000 (gross payment
Here's how it would be
Ya see after the first year Social Securiy bureaucrats would determine the sales tax rate for "the combined rate"...you know, to save Social Security.
Here's a sale the first year.
$100.00 +
State tax 7%=
$107 + Fairtax 30% =
$139.00 (gross payment)
$139 (gross payment) X .23(fairtax) = $32 federal tax
Does $32 tax on a $100 purchase sound like 23% to you?...See FAQ #47 at AFT if you don't believe the 30% rate and I posted the legislation confirming the tax "OF the gross payment".
Thr rate is just the beginning of the lies. AFT wrote an essay to explain it rather than quote a real sales tax rate.
BTW, the rate isn't "so folks can compare". It's written for the business that pays the tax.
Mr. Business just add up you gross receipts, send 23%.
In order for the business to not lose money he has to charge 30% tax.
No. I made a math error and had already posted a correction before you made your post.
The tax is 23% OF the gross payment not 23% ON the price. A 300.00 TV would be $390.00 and your $200,000 house would be $260,000...$90 is 23% of $390(gross payment) and $60,000 is 23% of $260,000 (gross payment
Curious and confusing if true. Are you certain of this? It is NOT how I read the proposal. If I ask for 23% of the gross amount of a sale, I mean the sale BEFORE taxation, NOT AFTER. I think you are confused about the intent, but by all means let's clarify it so that it means the same thing to both of us. The same applies to your assumption that state sales tax will be taxed as part of the "gross amount".
You seem very wrapped up on the rate. Frankly I'm perplexed as to why. There is nothing to hold the rate steady and it can be increased or decreased. As to whether 23% is correct, I don't know. I haven't done the math. The states (at least 45 of them) have good figures on sales, and we know federal outlays, so it shouldn't be too hard to determine.
But the point is, we are already paying the tax now. But in our current system we slide payment up the ladder, while the burden is still carried by all. People who do not pay are left thinking they are getting something for nothing and voting accordingly, while their standard of living slides due to the hidden tax burden.
If you do not think that graduated income rates create inflated compensation then you are very much wrong.
Again, the point of a flat sales tax in my opinion would be to make the citizen more aware of the cost of their government. If the rate started at 30%, then that's what it would be. I'm confident it would quickly drop and we would have a healthier country as a result.
Curious and confusing if true. Are you certain of this?I've been at this for 8 yrs. I'm certain.
`(5) GROSS PAYMENTS- The term `gross payments' means payments for taxable property or services, including Federal taxes imposed by this title.
Is the Fairtax a federal tax imposed by this title?
It also doesn't exclude anything like state sales taxes either. Hence the words "gross payment".
Wasn't it you I told to throw away "the book" and read HR25?
This is one of the other things I find most disturbing:
Again, the point of a flat sales tax in my opinion would be to make the citizen more aware of the cost of their government. If the rate started at 30%, then that's what it would beThe same citizen getting a government check every month?
What makes you think we're the only ones that know the cost of government?
Absolutely. I have zero doubt about this.
What makes you think we're the only ones that know the cost of government?
The endless stream of people that I talk to that have no idea what they themselves pay directly in taxes, let alone what the added cost to them in goods and services is due to the graduated system.
With your level of cynicism, I assume you are against any reform, as it is all doomed to failure in your opinion?
As with regards to SS, Medicare, etc. I posted how “I” would treat that in what I do believe was the first post you replied to. I would pay a minimum SS payment to everyone and take it and other entitlements out of the general fund. It is only divided by smoke and mirrors anyway.
You seem very keen to assume that all proponents of a flat sales tax are tied unwaveringly to HR 25. First and foremost is the need to pass a Constitutional Amendment to again prohibit individual federal income tax and to declare than all rates of federal taxation must be flat. The worst possible thing would be to open the door to a federal sales tax WITHOUT first slaying the income tax.
With your level of cynicism,You only tag it as cynicism because you don't want to believe it.
It is a little condescending to think no one but you knows the true cost of government and only you know the way to show them though.I assume you are against any reform,
So in your mind there is no other, never could be any other than the all fulfilling Fairtax? When frankly you don't really know that much about it.
Weren't you the one I suggested 45 other (working) plans to choose from?
$1.00 X 10% = $1.10LOL! yea it's a great example of adding profit/markup (which happens to be the part actually subject to income tax), but, what kind of tax is that supposed to be??? a VAT? The income tax doesn't work that way.$1.10 X 10% = $1.21
$1.21 X 10% = $1.33
$1.33 X 10% = $1.46
$1.46 X 10% = $1.61
Any other areas of study that I can help you with?
LOL. Why would the first person sell for $1.10 when he knows the very same product, with nothing added but profit, will sell for $1.61?
$1.00 X 10% = $1.10 (tax due ON $0.10 profit)No thanks I've seen enough. That's Fairtax math/thinking alright.$1.10 X 10% = $1.21 (tax due ON $0.11 profit)
$1.21 X 10% = $1.33 (tax due ON $0.12 profit
$1.33 X 10% = $1.46 (tax due ON $0.13 profit)
$1.46 X 10% = $1.61 (tax due ON $0.15 profit)
Any other areas of study that I can help you with?
I'm seriously doubting your ability to understand simple English and simple math.
You asked how a 61% increase could occur in reference to my statement that taxing all business to business sales at for example 10% for five transactions would increase cost and thus charge by at least 61%.
There is no mystery in this and it is why states don't tax business to business sales.
If you want to have an honest discussion, then let's have one, and stop with the subterfuge.
I never said I was the ONLY one that knew it, but I do know it, and most don't. As for methodology, you've yet to present a plan, yet alone a better plan.
So in your mind there is no other, never could be any other than the all fulfilling Fairtax? When frankly you don't really know that much about it.
I know a great deal about a flat sales tax. As you said 45 states have them. I also know you have offered no alternative ideas here. You have some points to make about the law proposed in the House, but you don't have any positive changes to make or alternatives. You have no ideas.
So you don't like HR25. OK, you're on record.
Can you show me the post where I said I wanted HR25 word for word? I said I wanted a flat sales tax.
I am like you in that I support a national retail sales tax - the leading proposal just happens to be hr25.
It is, by far, better than the income tax in every respect.
The issue of off-budget entitlements is one, as is the issue of business deductions.
I think the entitlements would need to be changed fundamentally, so that we stop pretending that the money that goes in is the money that comes out. If the income tax beast is to really be slain, then I think they must be funded out of the general fund without any pretense of smoke and mirrors. Revenue to support them would cease to be collected from individuals. Social Security would be a minimum flat payment and cease to be tied to income. Grandfathering would almost be mandatory to gain acceptance.
I would handle businesses the same way they are handled under state sales tax law. Items purchased by a business for resale would not be taxed (grain, lumber, steel, etc.), but items that are not for resale (office furniture) would be taxed. Otherwise, the snowball effect on goods could be tremendous.
I would exempt the resale of personal items below a given threshold.
All in all, it is no different than a state and local sales taxes. People complain that it would make the employer a tax agent, but I fail to see the difference between them being responsible for witholding taxes from the employees and paying SS and collecting taxes from their customers. Again, they already do this in 45 states.
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