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Childish behavior |
Posted on 02/16/2008 3:30:21 PM PST by xcamel
One solution to the nation's long-term fiscal problems that has gained support in recent years is the idea of replacing all federal taxes with a 23 percent national retail sales tax called the FairTax. Unfortunately, the administrative problems inherent in this proposal make it impossible to take seriously, says Bruce Bartlett, former deputy assistant secretary for economic policy at the U.S. Treasury Department.
For example, under a FairTax scheme: A worker now netting $800 per week would immediately get a $200 raise and start taking home the full $1,000 gross wage that he is paid; instead of paying income and payroll taxes, workers would pay their taxes when they buy things.
The FairTax would impose a 23 percent tax on all goods and services (this is not really correct, but for now we'll accept it at face value for analytical purposes).
Whether he is better off or not depends on what his effective tax rate is: Assuming he spends all his income and no more than that, he will be no worse off if he now pays 23 percent of his income in taxes. That is, his effective tax rate is 23 percent; in this case, the FairTax is a wash, the worker is no better off or worse off in terms of taxes than he is now.
But what if the worker is now paying less than 23 percent of his income in federal taxes? In this case, he is clearly worse off, says Bartlett: The prices of the things he buys will rise by more than his income rises from the elimination of income and payroll taxes. Conversely, if one is wealthy and in a tax bracket above 23 percent, that person would be much better off. His income and payroll taxes would fall by much more than the prices of goods and services he consumes would rise.
Source: Bruce Bartlett, "Why the FairTax Won't Work," Tax Notes, December 24, 2007.
For text:
Post #2, Item “U” for you to.
Hitler wrote a book too.
Why do you label opinion truth? Labor markets are much more complex and inelasticities more crippling than this. While this may be true for radio hosts who are independent contractors, most of the population has to work everyday for a living and does not posess the analytical tools to figure their tax rate and refuse to work unless they get more money. I can tell you that young people who file as “exempt” are surprised when they get their first check and payroll taxes are deducted. They wasted $23 million.
Mmmmm, Auto Zone.
Well my concern will be the exemptions. The poor think they ought not have to pay. The retiring think they ought not have to pay. Who pays? The bees? We need a fair system where everyone is treated equally. People should be encouraged to work. Some of us won’t work much OT because it puts us in a higher income bracket. Several years ago, I got a cost of living raise. I was shocked that I then made a few dollars less. I tried to refuse the raise but was told I had to take it.
Or Roth IRAs. FTers live in tax fantasy land, untroubled by knowledge.
Arguing that it's 23% or 30% is a total waste of time, since the politicians and the parasites keep on sailing along without a clue about spending less to reduce taxes no matter what the feakin' rate is!
That's what the discussion should be about.
Geeez!
You are either ignorant of deceitful.
A 30% inclusive tax is 23 cents.
77 cents times .3 equals 23 cents.
77 cents plus 23 cents equal 1.00 dollar.
Any scamming is on your part.
Where will the money for the monthly FT entitlement check come from? We're not getting one now.
A 25% federal sales tax is not good? Who would have thought that?
I don’t get the point. A sales tax is in addition to the price on the sticker.
Ok.
The milk costs you more than the milk did before.
Ok.
However, you don’t have to pay (additional) income taxes.
Therefore, assuming for the sake of the argument it’s revenue neutral for the individual, the cost, is the same.
30% of what? That's noise, not math.
Don’t talk to me like that.
The answer was in my post, you just conveniently chose to ignore it.
Does she have a sister with a bottle opener?
Wouldn't it be "in addition", not "instead"?
77 cents isn't a dollar. You sell an item for a dollar, you must collect an additional 30 cents (30%) in FT.
That's how every real sales tax in American history has always worked.
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