Nothing but a bunch of
Posted on 05/26/2003 7:07:15 AM PDT by George Frm Br00klyn Park
You cannot get something for nothing so theres no way around it, we will have effective tax rates of 70% or more in the next 10 years.
We already have:
Federal taxes 22.4% of income(taxfoundation)
State & local taxes 11.8% (taxfoundation)
Compliance costs 22.2% (Paine)
Regulatory costs 12.7% (Hodges,Crain)70.1% of your income is now consumed by government
Bet on it
You bet on it, I prefer to try to change the paradigm by assuring people see the full price tag of at least the tax they pay especially those who deriver the greatest benefit from the system:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org
We are all paying through the nose, rich and poor while politicians play the tune of envy and resentment that Americans continue to respond to not understanding the full picture what is happening to them. The NRST is a means to open VOTERS eyes to the reality of Congress' favorite shell games.
Is it any wonder that Alan Keyes refers to the income tax as the "slave tax" and supports a National Retail sales tax to replace it?
The Original Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy. That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
Trust but Verify: Notice how none of these kooks can give a straight answer:
The Corporate Income tax is a VAT.
Of course, we are to beleive the Pubs are suicidal in voting for a secret new tax.
Same old thing the Dems & Pubs have handed us for the last 150 years or so.
gitmo: Are you saying this is embedded in the Tax Plan just passed by the congress?
It is in every corporate income tax enacted by Congress. With any move to expense capital investments as opposed to depreciate on a schedule, causes corporate income taxes to become identical with a VATs in all respects.
By definition and action, the Corporate Income Tax is a subtraction method VAT.
Definition [ http://www.encyclopedia.com/articles/13330.html ]:
value-added tax
levy imposed on businesses at all levels of production of a good or service, and based on the increase in price, or value, added to the good or service by each level. Because all stages of a value-added tax are ultimately passed on to the consumer in the form of higher prices, it has been described as a hidden sales tax. Originally introduced in France (1954), it is now used by most W European countries.
The current income/payroll tax structure now in place is a subtraction method VAT, in that it is a levy imposed on businesses at all levels of production, it is passed on to the consumer hidden in the price of goods and services, lower wages, lower returns on investment for investors, and higher interest rates.
A value-added tax (VAT) generally is a tax imposed and collected on the value added at every stage in the production and distribution process of a good or service. Although a VAT may be computed in any of several ways, the amount of value added generally is the difference between the value of sales and purchases of a business with wages being just a purchase of labor.
Several administrative systems are used for VATs: the credit-invoice method, the subtraction method, and the addition method. The credit-invoice method has been the system of choice in nearly all countries that have adopted a VAT. A subtraction-method VAT is also known as a business-transfer tax. The addition method is a mirror image of the subtraction method.
Credit-Invoice Method VAT. Under the credit-invoice method, a tax is imposed on the seller for all of its sales. The tax is calculated by applying the tax rate to the sales price of the good or service, and the amount of tax generally is disclosed on the sales invoice. A business credit is provided for all VAT taxpayers on all purchases of taxable goods and services (that is, on inputs) used in the seller's business. The ultimate nonbusiness consumer does not receive a credit for his or her purchases. The VAT credit for inputs prevents the imposition of multiple layers of tax on the total final purchase price. As a result, the net tax paid at a particular stage of production or distribution is based on the value added by that taxpayer at that stage of production or distribution. In theory, the total amount of tax paid with respect to a good or service from all levels of production and distribution should equal the sales price of the good or service to the ultimate consumer multiplied by the VAT rate.
To receive an input credit, a business purchaser generally is required to have an invoice from a seller containing the name of the purchaser and the amount of tax collected. At the end of a reporting period, a taxpayer may calculate its tax liability by subtracting the cumulative amount of tax stated on its purchase invoices from the cumulative amount of tax stated on its sales invoices.
Subtraction-Method VAT. Under the subtraction method, value added is measured as the difference between a business's taxable sales and its purchases of taxable goods and services from other businesses. At the end of the reporting period, a rate of tax is applied to this difference in order to determine the tax liability. The subtraction method is similar to the credit-invoice method in that both methods measure value added by comparing sales to purchases that have borne the tax.
The subtraction method differs from the credit-invoice method principally in that the tax rate is applied to a net amount of value added (sales less purchases) rather than to gross sales with credits for tax on gross purchases. A business's tax liability under the credit-invoice method relies on the business's sales records and purchase invoices, while the tax liability under the subtraction method may rely on records that the taxpayer maintains for income tax or financial accounting purposes.
In short, the American people have been sold a pig in a poke for so long as regards the VAT, the electorate no longer knows what kind of tax we are under.
Sleight of mind.
Try Shell Game and you will be closer to the reality.
My thoughts exactly.
I would prefer a VAT tax over our current tax code because it shifts a LOT of the paper work away from the individual and towards the business sector. This means that the government loses a LOT of it's power in using the tax code to abuse individuals.
This is a VERY GOOD THING.
I'll take what I can get and work on turning the VAT to a NRST right afterwards.
Nothing but a bunch of
Wouldn't expensing capital investments be the same as a zero-year depreciation schedule? So how would that become identical to a VAT in all respects?
Value Added = Sales revenues - Business Purchases - Labor Costs
The tax is on Value Added, (i.e. Receipts - Expenses) otherwise known as Profit or Income however you want to call it, a rose by any other name is still a rose.
Think about it,
To expense a thing is to deduct its purchase value in full during the year in which it is purchased.
To depreciate a thing, is to deduct the puchase value proportionately across several years as opposed to immediate deductibility.
A VAT places a tax upon the difference between Sales Receipts and Business Purchases necessary to the production of the product in the year in which that purchase was made.
Is a corporate tax really the same as a VAT? If a corporation enhances the value of their subassemblies by producing a quality product, and yet they manage to make no profit,
Profit by definnition is Receipts less Business Expenditures the same as the definition of Profit. If there is no profit there is no Value Added.
Profit Value Added by definnition is Receipts less Business Expenditures, the same as the definition of Profit.
P.S. Quality is not Value Added in the sense of taxing goods. Value Added is a tax term being merely the dollar amount a company is able to add on to the price of a product over its expenditures.
It seems to me this decidedly not a VAT, but a profit tax.
VAT is a "profit" tax. It is the dollars added to sales price above cost of manufacure especially.
NF, In that article, Joan was writing about the sales tax included in the same legislation. NOT "income" tax. A true flat tax, based on income "from whatever source derived", with NO deductions and/or exemptions {for "trusts", charitable donations, or any other government favored entity of the day}, at the lowest rate that would be "revebue neutral", would raise Old money Harry's tax bite, and lower Donnie and Susie's tax bite. Unlike the faux "graduated" {"progreesve"} income tax of today that has deductions and/or exemptions that allow "Old money Harry" to pay a tax rate MUCH lower than the much quoted "38% highest tax bracket" an absolute fraud {fake}.
The four line tax form would also eliminate the need for tax preparers, and most of the IRS's enforcement. THAT is why the sales {NRST - National Retail Sales Tax that "they" call the "fair" tax is being so heartedly sold.
As Joan's article {in post 32} indicates, the sales tax alone is dibillitating to lower wage earners, and VERY beneficial to the "Old money Harries". Because, as you write, "Donnie and Susie" will pay the sales taxes on most if not all of their yearly income, while "Old money Harry's" wealth will grow exponentially in his untaxed investment funds, while his sales tax bite may well be less than many with much lower incomes. You see, Harry already has most of the things that people just starting out must buy. And, pay sales taxes on. And, Joan was NOT EVEN writing about a "VAT" in the earlier article, except to say that it was being considered. She was writing about the "consumption" tax that is to be phased in. The VAT is just "better" and MUCH faster at gutting the middle class. Peace and love, George.
A true flat tax, based on income "from whatever source derived", with NO deductions and/or exemptions {for "trusts", charitable donations, or any other government favored entity of the day}
Less verbosely, a VAT with an individual income tax.
Gets the consumer at the front end with tax on their wages, then hits them again on the business "income" taxes buried in the price of their purchases. All business dollars remitted for taxes can only come from sales.
As Joan's article {in post 32} indicates, the sales tax alone is dibillitating to lower wage earners, and VERY beneficial to the "Old money Harries". Because, as you write, "Donnie and Susie" will pay the sales taxes on most if not all of their yearly income, while "Old money Harry's" wealth will grow exponentially in his untaxed investment funds, while his sales tax bite may well be less than many with much lower incomes.
Ahh! but a "sales tax alone" is not what is being proposed.
All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.
Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.
|
The 2002 "FairTax" Family Consumption Allowance Figures |
|||
|
Family Size |
HHS Poverty Level |
Annual FCA |
Monthly FCA |
|
One |
$8,860 |
$2,038 |
$170 |
|
Two |
$17,720 |
$4076 |
$340 |
|
Three |
$20,800 |
$4,784 |
$399 |
|
Four |
$23,880 |
$5,492 |
$458 |
|
Five |
$26,960 |
$6,201 |
$517 |
|
Six |
$29,040 |
$6,909 |
$576 |
|
Seven |
$33,120 |
$7,618 |
$635 |
|
Eight |
$36,200 |
$8,326 |
$694 |
1) Federal Register: February 14, 2002, Pages 6931-6933).
[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer
A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.
The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.
[71] To illustrate the plan's effective tax rate we can examine the tax burden that a family of four will have at various annual spending levels (or in this case, annual spending levels).
John Linder (R Georgia) offers a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org
Unlike the faux "graduated" {"progreesve"} income tax of today that has deductions and/or exemptions that allow "Old money Harry" to pay a tax rate MUCH lower than the much quoted "38% highest tax bracket" an absolute fraud {fake}.
As usual you make your blanket assertions with no referant. Of course no one pays the "38% highest tax bracket" on all they receive, a bracketed income tax precludes that possibility. Any exemption, deduction, or credit at all regardless of the level of income lowers the "effective", (i.e. actual rate paid out of all dollars received).
http://www.cbpp.org/taxday98.htm
|
CBO Estimates of Effective Federal Tax Rates for 1998 |
|||||
|
Families Ranked by Income Quintile |
Individual Income Tax |
Social Insurance Taxes |
Corporate Income Tax |
Excise Tax |
Total Federal Taxes |
| Lowest | -6.9% | 7.8% | 0.5% | 2.8% | 4.2% |
| Second | 1.7% | 9.9% | 0.9% | 1.6% | 14.2% |
| Third | 6.3% | 10.8% | 1.4% | 1.2% | 19.7% |
| Fourth | 9.0% | 11.3% | 1.4% | 1.0% | 22.7% |
| Highest | 16.2% | 8.0% | 4.6% | 0.5% | 29.3% |
| Top 10% | 18.0% | 6.7% | 5.8% | 0.4% | 30.8% |
| Top 5% | 19.7% | 5.3% | 7.0% | 0.3% | 32.3% |
| Top 1% | 23.0% | 3.0% | 9.5% | 0.2% | 35.7% |
| Average for all families | 11.2% | 9.3% | 3.0% | 0.9% | 24.4% |
| Source: Congressional Budget Office, May 15, 1997. Notes: Pre-tax family income is the sum of wages, salaries, self-employment income, rents, taxable and non-taxable interest, dividends, realized capital gains, and all cash transfer payments. Income also includes the employer share of Social Security and federal unemployment insurance payroll taxes, and the corporate income tax. For purposes of ranking by adjusted family income (AFI), income for each family is divided by the poverty threshold for a family of that size. Quintiles contain equal numbers of people. Families with zero or negative income are excluded from the lowest income category but included in the total. Individual income taxes are distributed directly to families paying those taxes. Payroll taxes are distributed to families paying those taxes directly or indirectly through their employers. Federal excise taxes are distributed to families according to their consumption of the taxed good or service. Corporate income taxes are distributed to families according to their share of capital income. |
|||||
Ahh the everybody pays the same tax, revenue neutral, Flat Income Tax (yellow column) would be 24.4% of gross income for every family in the United States..
- It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income.
You can't eat or gain benefit from dollars you don't spend.
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