So was the sales tax on a $1500 item I just purchased. It added another $90. If I don't have the extra $90, it stays on the shelf. There would have been an extra $345 of "fair tax" applied if it were in place right now.
This is a common misconception. Nearly 23% of any item purchased today contains the cost of embedded corporate taxes businesses pass onto the consumer. The actual cost of that $1500 item is $1155 with $345(rounded up to 23%) in taxes. The Fair Tax is not tax inclusive as the income tax. The Fair Tax is tax is exclusive as it will remove the embedded 23% by eliminating corporate income taxes and apply the $345 as separate sales tax on the bill.
Fair Tax FAQ #47 The total will still be close to $1500. You will still be able to see the rate and decide if you want to leave it on the shelf.
What are you smoking? The leftists in Congress don't really care what they are collecting. The use tax policy to punish the successful (progressive taxes) and buy votes from the bottom end of the income scale. They spend money without any care as to whether it runs a deficit. They can always print more.
They absolutely do care how much they collect! They want more than people can pay. The income tax provides the means. Another common misconception thanks to Congress critters who want you to think they have the power. The Fair Tax achieved 76 cosponsors as a direct result of constituents putting increased pressure on their politicians to support The Fair Tax or risk losing their jobs. They can't spend what they don't have in the Congressional coffer. If they raise the rate too high then people will buy less. Less purchases will mean less sales tax collected and therefore less to spend. People will essentially be able to keep spending in check. That is the concept Hamilton made with the quote in Federalist Paper #21 I cited in my previous post to you.
Only the employer's contribution to social security (7.65% of the nominal $100K cap) is an "embedded" cost that is outside of my gross.
The cost of a corporation's income tax and the associated costs of complying with tax regulations(accountants, tax specialists) are embedded. The 7.65% employer matching, the 7.65% payroll tax is in addition to the hidden tax. You pay for all of it either through what you purchase or directly from your paycheck.
I pay the rest. Elimination of that cost isn't going to matter squat in the bottom line pricing of corporate services.
Elimination of federal income taxes and associated compliance costs will, over time, trickle down to the consumer in the form of lower prices as firms will pass on at least some of the cost savings.
People in the minimum wage world pay nearly zero FIT.
You're still not grasping the concept everyone pays for corporate income taxes with every purchase!
You really don't have a choice about the taxation either way. You have to work to earn income to eat. If your work is a service, it is taxed. No difference between that and the current income tax. It's just "itemized" for the consumer. That same money gets taxed again when it is used to purchase something, except this time it comes out of the "principal" under your control.
The difference is the amount of total tax paid. Most people fall into a 15% income tax bracket. Also wage earners pay 7.65 percent in payroll taxes. That’s 23 percent right there. Also add in the 7.65 percent employer matching. That's 30%. Then factor in the business taxes and associated compliance costs (23%) passed on to consumers. The grand total exceeds 50%!
Fair Tax FAQ #5 The total tax burden will be far less with The Fair Tax.
The repeal of the 16th amendment is an act that requires ratification by the states. Congress can not do it on their own. Why should the socialists feel any pressure to do something they don't want to do?
They will do so for the same reason 76 members of Congress signed in in the last session of Congress. Increasing pressure from a growing grassroots effort to support The Fair Tax.
They are geared up to tax everything in sight. They have majorities in both houses and will control the White House on Tuesday. It's all about the leftist agenda. What's good for the country has nothing to do with what is coming down the pike.
You can either stand by and do nothing while they steal more of your freedom or go at them with the same persistence they have done against the will of the people for decades. I'll choose the latter since the former is precisely why they have gained power.
The difference is the amount of total tax paid. Most people fall into a 15% income tax bracket. Also wage earners pay 7.65 percent in payroll taxes. That’s 23 percent right there. Also add in the 7.65 percent employer matching. That's 30%. Then factor in the business taxes and associated compliance costs (23%) passed on to consumers. The grand total exceeds 50%! Fair Tax FAQ #5 The total tax burden will be far less with The Fair Tax. I fall in the 28% or 33% bracket. Do you really believe I'm going to get to keep all of that? I think you are incorrect in claiming the 15% marginal rate (or my 28% rate) is "embedded" in prices. It is taken from my gross earnings. As I said earlier, the only way that becomes "unembedded" is for my employer to slash my gross compensation. If that happens, there will be two weeks notice followed by a vacancy. I suspect most of my colleagues with similar compensation would have the same reaction. At my company, the only real "asset" is the intellectual capacity of the employees. The buildings and furniture don't earn income from the customers. It would be a really big mistake to try to slash incomes.
“The actual cost of that $1500 item is $1155 with $345(rounded up to 23%) in taxes. The Fair Tax is not tax inclusive as the income tax. The Fair Tax is tax is exclusive as it will remove the embedded 23% by eliminating corporate income taxes and apply the $345 as separate sales tax on the bill. Fair Tax FAQ #47 The total will still be close to $1500.”
This is not the current understanding of how the FairTax will operate. In fact, if you assume that employee withholdings will flow back to the employee and not the employer, imbedded taxes don’t amount to 22%, as we previously believed. Pre-tax price reductions will amount to something on the order of 8-12%. That means that after-tax prices after the FairTax is implemented will be somewhat higher than they are now, and imports will increase by almost the full amount of the new sales tax (since there are no savings from the removal of imbedded taxes). However, when you net out the rebate from the prices paid at the register, consumption purchases up to the poverty level will still be lower than they are under the current system. Costs of consumer goods above the poverty level will be higher than they currently are, but paychecks will be higher, also.