REPUBLICANS PLAN PUSH FOR ELIMINATION OF IRS

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[EternalVigilance]

It seems to me a lot of FairTax supporters are working backwords from the conclusion they want.

That's how most trips are planned.

First you decide where you want to go, then you plan the route.

To restore privacy, liberty and prosperity to all, and to establish a fair and noninvasive system of taxation, the best minds in the country have arrived at this map.

No one else has come up with anything that even comes close.

[Your Nightmare]

Ok, anyone reading the thread can see you're twisting the context. Back to ignore with you.

So instead of address what I post you just say I'm "twisting the context" and say you're gonna ignore me. Is that how you handle people who question your logic?

Maybe you could say how I'm "twisting the context".

[phil_will1]

"....the NRST shills..."
"... and they quickly discredit themselves with beligerant name-calling...."

Let me see if I have this right. In the very same post, you refer to FairTax supporters as "NRST shills" and then criticize them for name-calling?

No wonder we have been going around in circles with you and LewisLynn/balrog666/YourNightmare, etc., etc., etc. for years now.

You probably don't even comprehend the contradiction in that post.

[ancient_geezer]

Here is a study from the Tax Foundation that estimates the individual and corporate tax compliance for 2002 at $194 billion.

Which only includes accounting and paperwork costs, and does not include litgation, tax research, planning, legalfees, fines, loss of productivity ...

American General Contractor's Association
http://www.agc.org/Legislative_Info/Members_Testify/testimony_04-10-00.asp

To this we must add the shear wastefulness of the colossal compliance costs of the current tax system. To administer the tax laws, the IRS directly employs about 112 thousand employees. The IRS budget is about $8 billion. However, direct expenses of the IRS are not the central compliance problem; rather, it is the expenses that are pushed forward on the taxpayer to be tax collector, tax accountant, and record-keeper.

According to the non-partisan Tax Foundation in 1997 Americans spent no less than $225 billion complying with the income tax. The most recent projections made by the IRS of tax returns to be filed in Calendar Year (CY) 1999 indicate that the grand total, or sum of all major tax return filings, will be 228.2 million. This number is then expected to grow at 1.24 percent annually until CY 2005, when the grand total return count is expected to reach 245.2 million. This does not include the 1 billion information returns that will be filed. In addition, more than 8 billion forms and instructions are sent to taxpayers each year, enough to encircle the globe several times. 

Paperwork is the most visible compliance cost, but it is clearly not the only, and perhaps not the largest compliance costs. Return processing, determining liability, recordkeeping and other burdens are an estimated 19 to 33 % of the total revenue raised by the income tax system and 2.0 to 3.5% of the Gross Domestic Product (GDP)[an additional 3% of GDP₁₉₉₉ = $279Billion]. We waste money each year on seeking to avoid taxes, avoid trouble with the IRS, interpret the laws or determining the best course of actions with the laws. 

Who pays these compliance costs? You do. The hardest hit segments of our economy are middle income wage earners and business owner. Small corporations in particular endure compliance costs estimated to be several multiples of the tax actually collected. Although duly included in the National Income Product Accounts (NIPA), payments made to tax lawyers, accountants, IRS agents and other tax professionals do not really improve our collective standard of living. These compliance costs are wasteful expenditures, which absorb so much time and energy of American people that they roughly approximate in costs the assets of the entire building industry. None of this is necessary.

Adding to the costs and to unfairness, our tax laws are so complicated not even the common tax lawyer can understand them. There are a number of ways of measuring complexity; one of which is the number of penalties issued and then abated for reasonable cause. There are more than 34 million civil penalties issued each year; more than a third of all small firms receive payroll tax-related penalties alone. More than 50 percent are abated.

The tax system is now so monstrously complex that it is beyond the ability of any one person to understand it. Understanding the system is certainly beyond the reach of most mere tax lawyers, accountants and tax administrators. A system that is so complex must be administered in an arbitrary and unfair way. If no one really understands what the law is, it is impossible to administer fairly and uniformly - and of course, it is not so administered. 

Our government embroiled its citizens in more than 35,000 litigation actions. Taxpayers sustained more than 3 million levies. As long as we insist upon an income tax system, the system needs to be complex. The system needs to be enforced with a heavy hand. The system needs to have all of the 34 million in civil penalties. The system needs to be intrusive. It is the price we have to pay for an income tax system.

Perhaps most troublesome, we have gotten little in return for this payment because our current tax system has inspired an increasingly lower level of compliance. Despite the costs of enforcing and maintaining our system, tax evasion is at an all time high. Today's income tax system has invited massive noncompliance. According to the IRS own statistics, only about 80 percent of taxes owed are voluntarily paid -- $200 billion are not. In 1992, the tax gap was estimated to be $127 billion. Taxes evaded continue to be in the range of 22 to 23% of income taxes collected. These IRS figures did not include taxes lost on illegal sources of income. Evaded taxes increased by 67% in the decade between 1982 and 1992. As a percentage of Gross Domestic Product (GDP), tax evasion has reached 2.0% compared to 1.6 % in 1991. 

Our current system is also problematic because much of the burden of the current system is hidden from the American taxpayers. Most taxpayers have been taught that an amorphous entity - business -- must pay its fair share. However, they do not understand that businesses are merely a collection of individuals engaged in a productive enterprise. When businesses are taxed, the taxes result in fewer businesses, lower wages or higher priced goods and services if the taxes can be pushed forward. In some businesses, taxes cannot be pushed forward and the owner must endure these taxes. Businesses don't pay taxes, people do; however, the corporate income tax and the employer share of payroll taxes perpetuate this myth.

It is not a harmless myth. The hidden cost of our tax system ensures that Americans remain ever ignorant of the increasing proportion of federal taxes they pay. Taxes are now more than 20 percent of Gross Domestic Product, and despite the claims of tax cuts, Americans pay more now than we have in the history of our nation, including the height of World War II. Upstream taxes only ensure that taxpayers cannot see the true cost of our government, raise the costs of goods and services and ensure more taxes in the future.

There is another problem with hidden taxes. Apart from ensuring the system lacks integrity, hidden taxes buried in goods and services reduce exports, and result in lower profits, lost productivity and a competitive advantage to foreign commodities. 

[rolling_stone]

I guess you missed my questions....you said you knew how much you paid in payroll and income taxes, how about the percentage rate? and how much in hidden corporate taxes on your purchases and services?

State & local sales tax 7.75 percent, pretty visible to me....what rate did you pay in income tax? corporate hidden taxes? payroll taxes?

[meadsjn]

Maybe you should review the thread again. I was responding to a post that claimed the bulk of our tax burden is hidden. That's just not true.

Businesses must charge enough for a product to cover both their total cost of production and their expected profit. The Cost of Goods Sold for a business has to include the cost of labor involved. The cost of labor includes the taxes on that labor (28% or 34% of those taxes being Federal Income Tax).

This is how the Income Taxes are "hidden". They are hidden in the cost of labor required for every stage of production, transportation, and sale of a product.

[Your Nightmare]

So corporate and individual tax compliance was $225 billion + 279 billion, or $507 billion. A little off of your $800 billion number just for corporate compliance, isn't it?

[Hostage]

Thanks for your informative reply.

Also any google search on total individual and corporate taxes will turn up the government's own accounting such as:

http://66.102.7.104/search?q=cache:svpUXRx9pcYJ:www.house.gov/jct/x-83-99.pdf+total+federal+corporate+income+tax&hl=en

The last year listed over a trillion $$$ in individual and corporate tax receipts. The link also breaks it down into individual tax receiptes of $879 billion and corporate tax receipts of $184 billion.

Some of the detractors in this thread think individual tax receipts are not included in product pricing. The last time I checked, employers were required to withhold payroll tax and give it over to the government on a quarterly basis.

But this payroll tax withholding is paid in the form of gross pay by the employer to the employee. So the employing company still needs to account for it in the pricing of their products.

Suppose that the income tax were to be abolished. Say the employer reaches a deal with employees, that is, one half of former payroll withholding will then go to the employee's pay and one half to the company for new competitive pricing purposes.

Would you expect as a result for US business to be more competitive with the NRST?

[Hostage]

You nailed it. It's pretty clear isn't it?

Would you say that anyone who refuses to acknowledge your post given that they have the ability to understand it, would you say such a person has an agenda?

[Your Nightmare]

This is how the Income Taxes are "hidden". They are hidden in the cost of labor required for every stage of production, transportation, and sale of a product.

So what you are saying is that I don't pay income taxes on my earnings?

The cost of labor includes the taxes on that labor (28% or 34% of those taxes being Federal Income Tax).

I'm curious, what do you think the median citizen's effective total federal tax burden is?

[Dont_Tread_On_Me_888]

The ONLY way to get the scum of society--the pimps, whores, fraudulent businesses, drug dealers, etc.-- to pay their fair share is by a national sales tax.

Any "flat tax" will eventually be raised to a high tax rate.

It is a shame on this nation's history that a national sales tax is not the method of collecting federal taxes.

I spend 10 months out of a 12 month year figuring out cost basis and other BS just to file a tax return.

[Your Nightmare]

Here is an interesting paper that is a case study of Hewlett-Packard's 1997 federal tax compliance costs and procedures.

A couple of interesting nuggets: HP was #17 on the Fortune 500 that year but the full-time equivalent personnel engaged in federal tax compliance was only 3.

This quote is very interesting:

The total amount spent on federal tax compliance is about 13 percent of the total HP Corporate Tax Department budget. It is interesting to note that HP’s total costs of local (U.S.) sales and use tax compliance exceed its federal income tax compliance costs.

[ancient_geezer]

So corporate and individual tax compliance was $225 billion + 279 billion, or $507 billion. A little off of your $800 billion number just for corporate compliance, isn't it?

That was just one small sample of what you have chosen to overlook, however, Payne's 65 cents per tax dollar collected calculates a much higher value than $800billion in 2000,

The Flat Tax; Hall & Rabushka, '95:

What the Income Tax Cost the American People

Notes & References:

A comprehensive review of all the studies that attempt to measure the costs associated with the federal income tax appears in James L. Payne, Costly Returns: The Burdens of the U.S. Tax System (San Francisco: Institute for Contemporary Studies Press, 1993). Payne summarizes the estimates of compliance costs that appear in the following studies: Joel Slemrod and Nikki Sorum, "The Compliance Cost of the U.S. Individual Income Tax System," National Tax Journal 37 (December 1984): 462–65; Arthur D. Little, Inc., Development of Methodology for Estimating the Taxpayer Paperwork Burden (Washington, D.C.: Internal Revenue Service, 1988), pp. III–23; James T. Iocozzia and Garrick R. Shear, "Trends in Taxpayer Paperwork Burden," in Internal Revenue Service, Trend Analyses and Related Statistics, 1989 Update (Washington, D.C.: U.S. Government Printing Office, 1989), p. 56; Annual Reports of the commissioner of the Internal Revenue Service; and a variety of other IRS memoranda

As the response here demonstrated:

http://www.freerepublic.com/focus/f-news/1160242/posts?page=497#497

[Your Nightmare]

Payroll and income taxes is a no brainer. Divide what I paid by what I made.

"Hidden" corporate taxes are a different story, partly because nobody how much (if any) of what I pay in prices is corporate taxes. But also because I don't have a good accounting of how much I spent last year.

State & local sales tax 7.75 percent, pretty visible to me

If it was 7.75% and pretty visible, you should be able to tell me how much you gave your state government last year in sales taxes.

[ancient_geezer]

13 percent of the total HP Corporate Tax Department budget.

Sorry, but a department budget does not include the total costs of loss to business, lobbying that bear upon impact of the income/payroll tax sytem on a business as a whole.

I suggest you get a hold of James L. Payne, Costly Returns: The Burdens of the U.S. Tax System (San Francisco: Institute for Contemporary Studies Press, 1993).

Payne summarizes the estimates of compliance costs that appear in the following studies: Joel Slemrod and Nikki Sorum, "The Compliance Cost of the U.S. Individual Income Tax System," National Tax Journal 37 (December 1984): 462–65; Arthur D. Little, Inc., Development of Methodology for Estimating the Taxpayer Paperwork Burden (Washington, D.C.: Internal Revenue Service, 1988), pp. III–23; James T. Iocozzia and Garrick R. Shear, "Trends in Taxpayer Paperwork Burden," in Internal Revenue Service, Trend Analyses and Related Statistics, 1989 Update (Washington, D.C.: U.S. Government Printing Office, 1989), p. 56; Annual Reports of the commissioner of the Internal Revenue Service; and a variety of other IRS memoranda.

[rolling_stone]

The total amount spent on federal tax compliance is about 13 percent of the total HP Corporate Tax Department budget. It is interesting to note that HP’s total costs of local (U.S.) sales and use tax compliance exceed its federal income tax compliance costs.


that study only goes to the time used to fill out an 1120...

[Willie Green]

You probably don't even comprehend the contradiction in that post.

There's no contradiction if you truthfully call a spade "a spade".

[meadsjn]

Previous attempts at tax reform have met their own shares of resistance.

Caesar taxes and all the people look for either protection or leverage, or both.

There are going to be people arguing for the status quo, and for a variety of reasons. There are going to be people arguing for several different alternative taxing methods.

The Income Tax has been an oppressive method, and has resulted in massive corruption in our body politic and businesses. It is past time to rid ourselves of this "slave tax".

With global trade increasing as it is, we cannot survive as a nation if we keep taxing our production (which is what the Income Tax does), while our foreign competitors dump their products into our markets comparatively tax-free, and our service jobs are lost to countries with lower labor costs.

There are more prohibitive measures in our tax code against hiring American workers than just the cost of tax compliance. The whole tax code must go! There may be a lot of fur flying, but I see that as a good thing.

Make the people who favor a tax on your labor, on your sweat, on the minutes and hours of your life, -- make them explain why they favor that.

[meadsjn]

Previous attempts at tax reform have met their own shares of resistance.

Caesar taxes and all the people look for either protection or leverage, or both.

There are going to be people arguing for the status quo, and for a variety of reasons. There are going to be people arguing for several different alternative taxing methods.

The Income Tax has been an oppressive method, and has resulted in massive corruption in our body politic and businesses. It is past time to rid ourselves of this "slave tax".

With global trade increasing as it is, we cannot survive as a nation if we keep taxing our production (which is what the Income Tax does), while our foreign competitors dump their products into our markets comparatively tax-free, and our service jobs are lost to countries with lower labor costs.

There are more prohibitive measures in our tax code against hiring American workers than just the cost of tax compliance. The whole tax code must go! There may be a lot of fur flying, but I see that as a good thing.

Make the people who favor a tax on your labor, on your sweat, on the minutes and hours of your life, -- make them explain why they favor that.