Abolish the IRS with National Sales Tax?

Fox News ^ | 11/3/04 | tgusa

[tgusa]

"I'm not exactly sure how big the national sales tax is going to have to be, but it's kind of an interesting idea that we ought to explore seriously," the president said. The next day administration officials said Bush was not considering such a reform.

John Kerry's campaign quickly condemned a national sales tax, and Bush for potentially supporting it.

“If [Bush] has his way, every trip to the supermarket will feel like a visit to H&R Block and every day will be April 15. And now that this plan has been exposed, George W. Bush is trying to mislead the public into thinking it was just an off-the-cuff comment," Kerry spokesman Phil Singer said in an Aug. 12 statement.

[ancient_geezer]

If I can buy a product cheaper on the internet or by mail from a company in another country without paying sales tax, then that sale is lost to US companies.

This disparity would have to be addressed -- maybe through the use of tariffs.

 

H.R.25

Fair Tax Act of 2003 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.25:

---

`SEC. 101. IMPOSITION OF SALES TAX.

`(c) COORDINATION WITH IMPORT DUTIES- The tax imposed by this section is in addition to any import duties imposed by chapter 4 of title 19. The Secretary shall provide by regulation that, to the maximum extent practicable, the tax imposed by this section on imported taxable property and services is collected and administered in conjunction with any applicable import duties imposed by the United States.

[kevkrom]

If I can buy a product cheaper on the internet or by mail from a company in another country without paying sales tax, then that sale is lost to US companies.

The sales tax would be due upon importation, as well as any customs duties.

[balrog666]

But in any case, its becoming clear that you have a vested interest in our statist quo system. Can you be honest and tell us why?

Is it really that simple?

Would an overnight jump of 25% in prices destroy the economy? How many businesses would fail during the transition period? And how would any change in tax collection methodology solve the problem of exorbitant Unconstitutional spending?

[Your Nightmare]

You overlook the indirect disincentive costs which compise the bulk of the burdens on the economy recognized by all economists but not by your figures.

"Indirect disincentive costs" are not "embedded taxes" in the price of the products we are buying now.

According to the non-partisan Tax Foundation in 1997 Americans spent no less than $225 billion complying with the income tax.

Are you trying to tell me Americans paid $225 billion in real money complying with the income tax?

According to the non-partisan Tax Foundation in 1997 Americans spent no less than $225 billion complying with the income tax.

Once again, we are talking about business tax compliance. This information (whether right or wrong) is irrelevant to this discussion.

LOL, the economy is aggregated into retail prices.

I believe Jorgenson is talking about deadweight losses (I don't know because you haven't provided the source). And by definition deadweight losses are not in prices.

I'm not here to convince you, for your view and agenda has nothing to do with the discorvery of any truth. It is merely to demogogue and confuse issues with irrelavancy and outright distortions.

Nothing to do with the truth, confuses issues, irrelevancy, outright distortions? Sounds like someone I know.

It is sufficient to me to note that Jorgenson's results are underwritten by other economists as well.

Show me the papers.

[Your Nightmare]

But in any case, its becoming clear that you have a vested interest in our statist quo system. Can you be honest and tell us why?

Just because I see the FairTax as the steaming pile of dung that it is, I must have an agenda?

[Your Nightmare]

It's a ~proposed~ bill, and that part could be changed, obviously.

I really don't think they are going to let people opt out of SS. But if they do, those people will still be paying into the system. Which is fine by me, lower taxes for the rest of us.

[tpaine]

balrog666 wrote:

Would an overnight jump of 25% in prices destroy the economy?

The fair tax scheme would not be implemented 'overnight'.
Read the some of the links about HR 25. They explain it all, in detail.

How many businesses would fail during the transition period?

How many angels on a pinhead?

And how would any change in tax collection methodology solve the problem of exorbitant Unconstitutional spending?

Depending on how it was finally written/legislated, a fair tax bill, -- or perferably an Amendment, could put an absolute limit on Fed & State taxes.

[tpaine]

Sounds like you have a big steaming one to me.

[balrog666]

The fair tax scheme would not be implemented 'overnight'. Read the some of the links about HR 25. They explain it all, in detail.

If you don't buy the 22% embedded tax nonsense, the rest of it makes no sense.

How many angels on a pinhead?

Or to quote the Hildabeast: "I can't be responsible for every undercapitalized small business in America."

Fine. As long as we know where you stand, we can judge your arguments.

Depending on how it was finally written/legislated, a fair tax bill, -- or perferably an Amendment, could put an absolute limit on Fed & State taxes.

No such limits exist in the current bill. And I suggest any such limits would it completely. Or just be ignored like every other limit Congress has attempted to impose on itself.

I continue to assert that Unconstitutional spending is the root of the problem. Solve that and tax rates would drop like a rock.

[Principled]

Would an overnight jump of 25% in prices destroy the economy?

Why is that relevant?

[ancient_geezer]

"Indirect disincentive costs" are not "embedded taxes" in the price of the products we are buying now.

Embedded tax burden is the term that best describes the 20-25% reduction of product shelg prices with repeal of the income/payroll tax system. That 20-25% reduction is due to all tax related factors both direct an indirect.

Your pretense that only the tax alone as opposed to its full effects on productivity can affect the price of good and services in nothing other than misdirection and obfuscation of the real situtation.

Are you trying to tell me Americans paid $225 billion in real money complying with the income tax?

"According to the non-partisan Tax Foundation in 1997 Americans spent no less than $225 billion complying with the income tax"
American General Contractor's Association
http://www.agc.org/Legislative_Info/Members_Testify/testimony_04-10-00.asp

 

Furthermore the reality is that the impact of the income & payroll taxes upon the economy is much greater than merely those paperwork costs as pointed out by that same paper.

I believe Jorgenson is talking about deadweight losses (I don't know because you haven't provided the source).

Assumptions ehhh!

And by definition deadweight losses are not in prices.

LOL, only by your sights.

All business losses reflect in price, for misallocation of resources from productive capacity to non-productive activity. Prices as a consequence are higher than they would otherwise be without the factors giving rise to those losses, specifically tax related disencentives that misdirect productive use of capital into non-productive activities.

It is sufficient to me to note that Jorgenson's results are underwritten by other economists as well.

Show me the papers.

You are certainly welcome to go looking for them yourself, the evidence of the existence of such studies and author's named is sufficient for the purposes of this discussion, and my satisfaction:

As I stated it is not my purpose to convince you for your mind is closed to the NRST.

It is sufficient to provide the evidence that exists to others reading these threads for their perusal and for them to decide upon. Additional investigation that leads to on their part will amply reward them.

 

Committee on Ways and Means, Full Committee, 4-15-97 Testimony

By favoring certain economic activities over others, the tax code distorts financial decisions and reduces economic efficiency.

"According to a study by Jane Gravelle, an economist with the Congressional Research Service, and Larry Kotlikoff, an economist at Boston University, the corporate income tax costs the economy more in lost production than it raises in revenue for the Treasury. "

[tpaine]

The fair tax scheme would not be implemented 'overnight'. Read the some of the links about HR 25. They explain it all, in detail.

If you don't buy the 22% embedded tax nonsense, the rest of it makes no sense.

I used to build houses. Do you really believe I didn't pass on on ~all~ the tax costs of those houses to the buyers? Get real. Embedded taxes are real.

How many angels on a pinhead? Or to quote the Hildabeast: "I can't be responsible for every undercapitalized small business in America." Fine. As long as we know where you stand, we can judge your arguments.

I'm 'standing' with Clinton because I'm for the Fair Tax? -- You're demented.

Depending on how it was finally written/legislated, a fair tax bill, -- or preferably an Amendment, could put an absolute limit on Fed & State taxes.

No such limits exist in the current bill. And I suggest any such limits would it completely. Or just be ignored like every other limit Congress has attempted to impose on itself.

Take it out of their hands, and make limits part of an Amendment.

I continue to assert that Unconstitutional spending is the root of the problem. Solve that and tax rates would drop like a rock.

We've heard that line before. -- It's time to end income taxes.

[Myrddin]

The government, via the IRS knows who is poor, middle class and rich. Under the NRST the IRS is eliminated. There's no provision that replaces it in order to require a person to report their income to the government.

Wrong. You will still be assessed social security, medicaid and FICA taxes on your income. It will be reported via your social security number. Some of those taxes are assessed without an upper bound. The goverment will ALWAYS be aware of your gross income.

[Your Nightmare]

"According to the non-partisan Tax Foundation in 1997 Americans spent no less than $225 billion complying with the income tax"

Hearsay.

According to a study by Jane Gravelle, an economist with the Congressional Research Service, and Larry Kotlikoff, an economist at Boston University, the corporate income tax costs the economy more in lost production than it raises in revenue for the Treasury. "

Hearsay.

Dale Jorgenson, the chairman of the Economics Department at Harvard University, found that each extra dollar the government raises in revenue through the current system costs the economy $1.39.

Hearsay.

Instead of posting these second-hand interpretations, why not post the source? That way we could see what the quoted people really said.

[ancient_geezer]

You will still be assessed social security, medicaid and FICA taxes on your income.

Not under HR25.

All federal payroll taxes as well as income taxes are repealed under HR25.

The funding of all programs including Social Security & Medicare will come from the NRST.

I really do suggest you study the bill in detail as well as read the information available about it at the hyperlinked websites:

 

text ==> H.R.25, S.1493
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 for additional information: http://www.fairtax.org, http://www.salestax.org & http://www.geocities.com/cmcofer/ftax.html

[ancient_geezer]

Instead of posting these second-hand interpretations, why not post the source?

Go ahead. You are welcome to track down the source and find out that the studies actually do say what the references say they do.

That way we could see what the quoted people really said.

Sure can, so why don't you go track those studies down and provide us with links to them instead of demanding that others do your footwork for you.

I'm satified with the papers and Congressional testimony referencing the studies myself. You want more, go for it.

[Your Nightmare]

Go ahead. You are welcome to track down the source and find out that the studies actually do say what the references say they do.

You are the one posting hearsay. You find them. Until them, we have no idea what those people actually said.

[tpaine]

Instead of posting these second-hand interpretations, why not post the source?
-nightmare-

______________________________________


Didn't you just say something about a steaming pile of BS?

Instead of claiming that Geezers links are "second-hand interpretations", why not read the sources?

[phil_will1]

"Why settle for, say, 3% GNP growth in this country being classified as 'healthy'? Why not 6? Why not more?"

Thank you! It is great to see someone who sees the big picture. Tom Delay has proposed establishing a goal of doubling the US economy over the next 15 years. To do that, he quite rightly says you need more than tax cuts - you need FTR (Fundamental Tax Reform).

According to Dr. Dale Jorgenson, former chairman of Harvard's department of economics, GDP growth would be 10.5% in the first full year after the FairTax is implemented. The second year it would decline to something like 8 - 9%, if memory serves. It would gradually decline but even 10 years out, the rate of growth would still be about a half percentage point higher than it would be under a continuation of the current system and would stay there indefinitely. Of course, by that time, the total economy would be 1/4 to 1/3 larger than it would otherwise have been.

That rate of economic growth would make a huge difference in most of the economic challenges that we see today - the federal budget deficit, the trade deficit, the lack of good paying jobs in our economy.

[ancient_geezer]

Until them, we have no idea what those people actually said.

You may not, ignoring the reality simply because it doesn't fit your position.

For others, just by looking at the multiple papers from different authors and groups that reference these economists all agreeing with the essential position.

There is more than enough evidence that the income/payroll tax system burdens the economy far beyond the amount of tax collected and direct paperwork costs you want to limit discussion too, and that the references to the economomists and their studies are quite consistent from one paper to another.

In short your charge of heresay is rediculus for the witness is not I, but the multitude of papers referencing those papers reporting the same conclusions that make up the body of evidence from which to judge in absense of the original being located on the internet:

 

Chief Executive, The New directions in tax reform -
May 1995.

Tax expert Ernest Christian Jr., a partner with Washington's Patton, Boggs & Blow, reckons these are low estimates or at best incomplete. Citing a U.S. Treasury study which indicates that 6 billion man-ours are consumed each year just in the record keeping for income and payroll tax returns alone, Christian says the true burden on the U.S. economy is probably closer to $1 trillion. For example, Jane Gravelle of the Congressional Research Service estimates that economic loss from the corporate income tax is equal to about 97 percent of the corporate tax revenue collected.

 

STATEMENT OF REPRESENTATIVE DICK ARMEY
HEARING ON THE IMPACT ON
INDIVIDUALS AND FAMILIES OF REPLACING THE FEDERAL INCOME TAX
Committee on Ways and Means, Full Committee, 4-15-97 Testimony

Hinders Economic Opportunity

According to a study by Jane Gravelle, an economist with the Congressional Research Service, and Larry Kotlikoff, an economist at Boston University, the corporate income tax costs the economy more in lost production than it raises in revenue for the Treasury. Dale Jorgenson, the chairman of the Economics Department at Harvard University, found that each extra dollar the government raises in revenue through the current system costs the economy $1.39.

 

But just for you some references to help you along, seeing as your incapacity of using search engines seems to be deficient:

 

Taxes, Deficits, and Economic Growth
by Daniel J. Mitchell
Heritage Lecture #565

http://www.heritage.org/Research/Taxes/hl565.cfm

 

An American Economic Review study found that every dollar of taxes could impose as much as $4 of lost output on the economy, with the probable harm ranging between $1.32 and $1.47
Edgar K. Browning, "On the Marginal Welfare Cost of Taxation," American Economic Review, Vol. 77, No. 1 (March 1987), pp. 11-23.

Another study in the Journal of Political Economy estimated that the corporate income tax costs more in lost output than it raises for the government. The "excess burden" is "123 percent of revenue."
Jane G. Gravelle and Laurence J. Kotlikoff, "The Incidence and Efficiency Costs of Corporate Taxation When Corporate and Noncorporate Firms Produce the Same Good," Journal of Political Economy, Vol. 97, No. 4 (1989), pp. 749-780.