Replies

You're doing the Lord's work on these tax protester threads.

Good heavens, stinky.
That's blasphemous.
The Lord sure as heck doesn't endorse the NRST.

Posing as "tax reform", the NRST (HR 2525) also represents a "land grab" where business interests are favored over individuals purchasing for their own use:

A family purchasing their own new home for $200,000 pays NRST at a tax-included 23% rate. This means that of the $200,000 paid, $154,000 goes to the seller, and the Gov't receives $46,000 in tax.
A landlord/investor can exploit the business exemption of NRST and purchase the same new single family dwelling tax free as a rental investment for only $154,000. Tenants pay NRST on rent and Landlords act as tax collectors for the government
The $154,000 vs. $200,000 purchase price advantage that landlord/investors enjoy over individual personal homebuyers can be expressed two ways:
- Landlord/investors enjoy a 23% discount compared to the individual personal home buyer.
- Individual personal home buyers must pay 29.87% more than landlord/investors.

This a significant inequity between individuals trying to buy their own new homes and landord/investors looking to buy the same single family dwelling as a rental investment. This disparity has long term implications affecting the distribution of private property. The American tradition favoring individual property rights is reversed. The NRST would discourage individual "consumption" of real property.

"... legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children,...
But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state."
-- Thomas Jefferson to James Madison, Oct. 28, 1785 -- PROPERTY AND NATURAL RIGHT

Posing as "tax reform", the NRST (HR 2525) also represents a "land grab" where business interests are favored over individuals purchasing for their own use:

Posing?

H.R.2525
SPONSOR: Rep Linder, John (introduced 07/17/2001)
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

Sure looks like tax reform to me.

Willy, how many years you going to continue with the same wornout irrational diatribe?

You continually throw it out inspite of the fact it has been totally refuted everytime you have posted it to wit with attribution out of respect of its dominant user:

Homebuilders and the FairTax

Homebuilders Will Reduce Costs and Increase Profits

Like other firms, homebuilders will enjoy a zero corporate tax rate under the FairTax. Also, shareholders will not be taxed on dividends received from homebuilders or on capital gains from their investments. Partnerships, limited liability companies and sole proprietorships will also not be taxed on profits because of the repeal of the individual income tax.
Overall compliance costs of the current income tax system will be reduced. These costs, which are estimated conservatively to be $225 billion¹, are partly borne by homebuilders (discussed below).
All purchases by homebuilders of building materials will be free of sales tax. Business to business sales is not taxed under the FairTax. Moreover, since all producers of these materials will be operating free from income tax and with dramatically lower compliance costs, material (wood, sheet rock, nails, etc.), prices that now contain these costs will fall significantly. This will allow homebuilders to sell their products at lower prices while maintaining their current profit margins.
Current research by Dr. Dale Jorgenson, Chairman of the Department of Economics at Harvard University, and one of the country's leading economists, show that producer costs in the construction industry will decrease in the first year by as much as 25 percent. Economic output in the construction industry during the first year of implementation of the FairTax is expected to increase by more than 50 percent. The huge boom in this industry will be due largely to a significant rise in the demand for all investment goods. Dr. Jorgenson's research shows these increases will continue well into the next quarter century with the 25 year outlook still showing a 13 percent increase in output.²
As an immediate compliance savings, there will no longer be any need for homebuilders and other employers to maintain the distinction between employees and contract labor for tax purposes. This will also result in a substantial labor cost savings, because homebuilders and other employers will no longer need to collect payroll taxes. Payroll taxes (including the employer portion and FUTA) will be repealed. The repeal of this tax will also fuel the economy. Consumers will have more money in their pockets and, therefore, more money to spend, save or invest.

The Demand For New Homes Will Increase

Demand for new homes will increase due to at least two factors. First, most economic projections predict a much healthier economy under a consumption tax. People are willing and able to purchase more and better homes in a healthy economy. Typical estimates are that the economy will be 10 to 14 percent larger than it would have been under the current income tax system within 10 years, and consumption will grow very substantially.³ Some studies show the potential gains to be much higher.⁴ These studies typically do not account for the productivity gains that will be achieved due to lower compliance costs.
Second, discretionary income will increase. Consumers will see their paychecks increase by over $1.5 trillion because income and payroll taxes are eliminated (estimated for 1999). This increase in disposable income will help to generate both consumption and savings.

Interest Rates Will Drop

Under the FairTax, conservative estimates predict that mortgage interest rates will fall by 25 to 30 percent or about two points on a 30-year conventional mortgage.⁵ For example, for a $150,000 thirty-year home mortgage at an interest rate of 8 percent the monthly mortgage payment would be $1112.64. On that same mortgage at a 6 percent interest rate the monthly payment would be $907.64. The two-point decrease in interest rates in this instance would result in a $73,800 cost savings to the consumer.
To illustrate the source of the reduction in interest rates it is useful to examine the bond market. Current taxable interest rates include a tax premium. The cost of this premium can be determined by comparing the interest rates on taxable bonds to the interest rates on tax-exempt municipal bonds of comparable risk and term. The difference on the return to investment between a taxable bond and a tax-free bond of comparable risk is about 30 percent. Interest rates will decline due to the elimination of this tax premium because interest earnings will no longer be taxed.
With lower interest rates, more consumers will qualify for new home purchases, and will refinance to obtain equity from older homes.

Homeownership Under the FairTax Will Be More Affordable

Under the current income tax system a home must be purchased from after-income-tax and after-payroll-tax dollars. Under the FairTax, a home is purchased from income dollars that have not been taxed, as taxation occurs at the time of purchase. A consumer may choose to roll the sales tax into a mortgage payment just as state sales taxes on most purchases are today. The home mortgage interest deduction available under the current income tax system only has value when an income tax liability exists. Under the FairTax, there is no need to mitigate income tax liabilities as none exist.

Homebuilders' Compliance Costs will be lower:

Instead of having to comply with the complexities of the income tax and the payroll tax, there will be one sales tax on all goods and services. A firm will simply need to calculate on a monthly basis its total retail sales of new homes.
The homebuilder will receive an administration fee of ¼ of one percent for complying with the sales tax.
No more uniform inventory capitalization requirements.
No more complex rules governing employee benefits and retirement plans.
No more tax depreciation schedules.
No more capital gains tax and depreciation recapture.
No more tax rules governing mergers and acquisitions.
The firm's accounting, tax and personnel (human resources) departments will shrink dramatically.

1 Compliance Costs of Alternative Tax Systems II, Arthur P. Hall, Ph.D., Senior Economist, The Tax Foundation, Special Brief, House Ways & Means Committee Testimony, March 1996.

2 The Economic Impact of Taxing Consumption, Dale W. Jorgenson, Ph.D., Harvard University, Testimony before the Ways and Means Committee, March 27, 1996.

3 Ibid. The Economic Impact of Replacing Federal Income Taxes with a Sales Tax, Laurence J. Kotlikoff, April 15, 1993, Cato Institute Policy Analysis.

4 Looking Back to Move Forward: What Tax Policy Costs Americans and the Economy, Gary Robbins, Aldona Robbins, Policy Report No. 127, September 1994, Taxation Analysis, The Institute for Policy Innovation.

5 Effect of a Consumption Tax on the Rate of Interest, Dr. Martin Feldstein, Ph.D., Working Paper 5397, December 1995. The Flat Tax, 2nd Edition 1995, Robert E. Hall and Alvin Rabushka, The Hoover Institution Press.

Hardly a disadvantage for homeowners.

49 Posted on 09/10/2000 05:59:59 PDT by CHIEF negotiator

Landlord/investors enjoy a 23% discount compared to the individual personal home buyer.

Individual personal home buyers must pay 29.87% more than landlord/investors.

This a significant inequity between individuals trying to buy their own new homes and landord/investors looking to buy the same single family dwelling as a rental investment.

ROTFLM(_|_)O!

Still playing rich man against poor man aren't you Willy.

You do know of course, that investors are home buyers and renters too, don't you?

Why don't you mention:

The base prices for building or renting a home are expected to drop by at least 22%.

The takehome pay(from which one purchases a home) of the home buyer will rise by more than 30%.

The mortgage interest rates that the homebuyer's pay will fall to 75% of their current levels making payments much more affordable and allowing much lower total payment for houses.

These factors more than overcomes any imagined advantage of investor over the homebuyer so that all homebuyers can become an investors too.

But then good socialists never consider becoming investors themselves now do they W.G.

Now, lets take a look at your specifics and see how they hold up:

A family purchasing their own new ~~home~~ house(residential land is not taxed) for $200,000 pays NRST at a tax-included 23% rate. This means that of the $200,000 paid, $154,000 goes to the seller, and the Gov't receives $46,000 in tax.

A typical family purchasing their own new house today has 25% or more of their gross income extracted by the Federal government before they even think about buying a new or even an older house. That is not even counting the tax costs and costs of compliance placed on businesses of an additional 20 to 30% and embedded in the price of the new house.

A landlord/investor can exploit the business exemption of NRST and purchase the same new single family dwelling tax free as a rental investment for only $154,000. Tenants pay NRST on rent and Landlords act as tax collectors for the government

Of course that landlord/investor also pays the same tax on the house he lives in or rents before he can ever become an "investor/landlord" in the first place. Or do you figure such folks live in NY allies and sleep on park benches.

Additionally, a buyer of an older home, is not charged the NRST, which is the case of most first time buyers of homes.

The $154,000 vs. $200,000 purchase price advantage that landlord/investors enjoy over individual personal homebuyers can be expressed two ways:

Landlord/investors enjoy a 23% discount compared to the individual personal home buyer.

Actually not, as the Landlord/invester pays the 23% tax on the home he lives in whether rented or purchased, the same manner as any other individual.

Individual personal home buyers must pay 29.87% more than landlord/investors.

Again untrue, the landlord/investor pays the same tax on the home he rents or buys new for his personal use. All individuals are treated the same under the NRST. Infact, because the individual receives the full benefit and control of his gross income, as opposed to merely after tax income under the current system. That plus the NRST prebate paid to ALL households provides an enhanced opportunity for everyone to become investors.

Under the current Income/Payroll tax system, the total contribution of the federal tax system(including taxes in gross wage/salaries) to the price of retail consumption goods and services is 36% for taxes alone. Including cost of compliance at around $600billion/year, increases that percentage to about a 47% total burden with respect to current family consumption expenditure caused by the federal tax system as it exists today.

I'll be happy to pay 23% of the total payment for new goods and services, or as you would put it (30% added on) to the tax free price any day. Considering that I have available my full gross pay from which to accrue tax free growth of my savings and investments.

Compared to what we are hit with now:

We must . . . End Tax Slavery Now; Nov '97
by Jarret B. Wollstein

HOW MUCH DO YOU REALLY PAY?
     According to the Tax Foundation, in 1994 the average American paid 22.4% of his or her income in federal taxes, plus 11.8% in state and local taxes - 34.2% total.
     But that's just the beginning! Dr. James Payne of the University of California found that in addition to direct taxes we also pay huge, hidden taxes including:

Compliance costs - record keeping, monies spent on tax planning, computers and software purchased to fulfill IRS requirements, etc.
Enforcement costs - IRS audits, field investigations, service center corrections, criminal investigations, litigation, and forced collections.
Emotional, moral and cultural costs - families forced onto welfare, time and creative energy lost figuring out how to avoid taxes, etc.

     For every $1 we pay in direct taxes, we spend an additional $0.65 in compliance costs. And even that figure doesn't include the cost of import duties, license fees and other government regulations. For a typical U.S. family, the real cost of taxes and regulations is at least:
Federal taxes              22.4% of income
State & local taxes      11.8%
Compliance costs        22.2%
Regulatory costs         12.7%
70.1% of your income is now consumed by government

I have removed the particular phrasing of the line Willy Green objected containing with reguards "resurrect a ghost".

I respectfully submit, the rebuttal in reply #64 and would expect it to stay in place for it is a proper a truthful rebuttal to be used as regards Mr. Green's wornout piece of doggerel.

If this rebuttal is to be banned from use, then Mr. Greens demogogurey must be disallowed as well. To let a lie stand uncontested with the proper response would be unconscionable.