Posted on 07/26/2002 10:12:09 PM PDT by BradyLS
Suppose Government works together to roll back taxes to a 10% flat tax/sales tax. Whatever. States and Municipalities roll back taxes, too. Government does just what it's supposed to by the Constitution. It happens in, say, 20 yeras
Okay, what happens to the buying power of our income? I think it should at least remain constant, which would allow people to save and invest without any problem. But is there a danger that inflation would explode to eat up all the dollars that would return to us? I know it may sound naive or even stupid, but I think this is a real concern if we can successfully produce a flat tax and roll back the tide of government.
There is NO such thing as The RINO party. However there are some RINOs in the Republican party, just as there are some DINOs in the DemocRAT party
If by proposal you mean the actual bill...yes I have, and you need to read IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES
Also you incorrectly assume that the removal of all current taxes will have no effect the price charged for a given commodity.
I didn't say it wouldn't but to say matter of factly it would, would certainly be incorrect.
What I did say is their 23% rate is tax inclusive "of the gross payment". and would increase whatever base prices are by 30%+.
In other words in a state with a 7% sales tax for example, a $100.00 before tax price would be :
$100.00 + 7% = $107.00
$107.00 + fairtax = $139.00 (gross payment)
$139.00 (gross payment) minus 23%(gross payment tax) = $107.00
On that item you would have paid 32% (not 23%) tax on the $100.00 item.
Don't beleive it's a gross payment tax?
`(1) FOR 2003- In the calendar year 2003, the rate of tax is 23 percent of the gross payments for the taxable property or service.
It gets worse. If you like Social Security bureaucrats "determining" the tax rates you'll like the fairtax.....
As I said, I've been beyond their rhetoric and read the entire bill......
The problem is, if a flat tax is implemented, it will be implemented in a way that still brings in roughly the same amount of revenue as before. That is because politicians believe that government spending is inelastic. The primary benefit of a flat tax, IMO, is that it would vastly simplify the tax code, and more corporations, businesses and individuals would make their financial decisions on what performs the best, instead of having to factor in what provides the best tax benefits. It would also reduce the ability of politicians to pander by offering tax breaks.
If as advertised the National Retail Sales Tax is revenue neutral then initially it will have no affect on the net amount of money available for the purchase of goods or to invest. Taxing consumption while not taxing investments should lead to a shift away from consumption and towards investment. With the rebate for necessities, necessities will have a net decrease in cost because taxes will no longer be included in the price. Beyond that you can argue that some prices will have a net increase or decrease depending on the difference in the percentage of the cost due to taxes.
Every thing I have seen or read says interest is exempt so where did you find different info?
Gross payment tax in some ways is typical Government in trying to make numbers look better but it is a true representation of the percentage of the payment that is spent to fund Government.
I prefer the National Retail Sales Tax because it will allow for the easy flow of Capital to where it can be most efficiently used. Current income and Capital Gains taxes discourage the sale of assets and reinvestment because the new investment has to justify the loss due to taxes paid.
That should tell you more than you want to hear...What are your questions? I'll bet I can answer them using their bill or papers written they choose to ignore.
With the rebate for necessities, necessities will have a net decrease in cost because taxes will no longer be included in the price. ...How do you guarantee that?...Government imposed price controls?
There is not a "rebate for necessities". The "rebate" based solely on family size is the same for everyone everywhere.
`SEC. 301. FAMILY CONSUMPTION ALLOWANCE.
`Each qualified family shall be eligible to receive a sales tax rebate each month. The sales tax rebate shall be in an amount equal to the product of--
`(1) the rate of tax imposed by section 101, and
`(2) the monthly poverty level.
What are necessities and what do they cost?...Do we ask the bureaucrats at the central government to tell us what is necessary, then to put price controls on them....
Rent would be taxed. Do you think rent is a necessitiy?...Do you think rent for like units is the same everywhere?...Should the central government impose rent control so the rebate will be fair for everyone?
Utilities would be taxed. Do you think utilities are the same price everywhere?
The "sales tax rebate" is included in the tax rate, you'll be getting a little of your own money back...there's no free lunch.
Gross payment tax in some ways is typical Government in trying to make numbers look better but it is a true representation of the percentage of the payment that is spent to fund Government.
Sounds like you're making excuses for fraud in the government to me.
Every thing I have seen or read says interest is exempt so where did you find different info?
In the bill. That's why I suggest you read the bill. That's where you'll find the truth. If what you say is true (we know it is) the bill would be changed in it's final version. Then what makes you think it'll be better than their dangling carrot?
From HR2525:
`SEC. 801. DETERMINATION OF FINANCIAL INTERMEDIATION SERVICES AMOUNT.
`(a) FINANCIAL INTERMEDIATION SERVICES- For purposes of this subtitle--
`(1) IN GENERAL- The term `financial intermediation services' means the sum of--
`(A) explicitly charged fees for financial intermediation services, and
`(B) implicitly charged fees for financial intermediation services.
`(2) EXPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES- The term `explicitly charged fees for financial intermediation services' includes--
`(A) brokerage fees;
`(B) explicitly stated banking, loan origination, processing, documentation, credit check fees, or other similar fees;
`(C) safe-deposit box fees;
`(D) insurance premiums, to the extent such premiums are not allocable to the investment account of the underlying insurance policy;
`(E) trustees' fees; and
`(F) other financial services fees (including mutual fund management, sales, and exit fees).
`(3) IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES-
`(A) IN GENERAL- The term `implicitly charged fees for financial intermediation services' includes the gross imputed amount in relation to any underlying interest-bearing investment, account, or debt.
`(B) GROSS IMPUTED AMOUNT- For purposes of subparagraph (A), the term `gross imputed amount' means--
`(i) with respect to any underlying interest-bearing investment or account, the product of--
`(I) the excess (if any) of the basic interest rate (as defined in section 805) over the rate paid on such investment; and
`(II) the amount of the investment or account; and
`(ii) with respect to any underlying interest-bearing debt, the product of--
`(I) the excess (if any) of the rate paid on such debt over the basic interest rate (as defined in section 805); and
`(II) the amount of the debt.
`(b) SELLER OF FINANCIAL INTERMEDIATION SERVICES- For purposes of section 103(a), the seller of financial intermediation services shall be--
`(1) in the case of explicitly charged fees for financial intermediation services, the seller shall be the person who receives the gross payments for the charged financial intermediation services;
`(2) in the case of implicitly charged fees for financial intermediation services with respect to any underlying interest-bearing investment or account, the person making the interest payments on the interest-bearing investment or account; and
`(3) in the case of implicitly charged fees for financial intermediation services with respect to any interest-bearing debt, the person receiving the interest payments on the interest-bearing debt.
I prefer the National Retail Sales Tax because it will allow for the easy flow of Capital to where it can be most efficiently used.
The revenue neutral "sales tax" would be a major tax shift directly to the consumer.
I am a small business and I can tell you matter of factly that my business expansion depends on YOU the consumer having more money rather than the other way around. OH, and I, like other businesses am profit driven. If I get tax releif I ain't passing it on to you.....
It's no different than companies moving offshore to avoid taxes or labor costs or whatever...they aren't doing it to lower prices they're doing it to increase profits. Show me one example where it's resulted in reduced prices to consumers.
Companies will not lower prices out of the kindness of their hearts. The only thing that ultimately drives down prices is reduced sales.
We'll have to agree to disagree on the sales tax.
I am a small business and I can tell you matter of factly that my business expansion depends on YOU the consumer having more money rather than the other way around. OH, and I, like other businesses am profit driven. If I get tax releif I ain't passing it on to you.....
Less money chasing the same number of goods will result in you lowering your prices in order to get business and compete with others, deflation. One question that no one has touched is what will be the effect if our economy where to shift slightly from it current consumer driven to a slightly more investment driven economy.
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