Gutknecht pushing national sales tax

Pioneer Press ^ | 11-15-04 | ap

[Rakkasan1]

MINNEAPOLIS - Rep. Gil Gutknecht is pushing legislation that would replace the federal income tax with a national sales tax.

"Think of a world where there is no income tax, where you get to keep everything you earn and you pay the tax man when you buy stuff," Gutknecht, R-Minn., told the Star Tribune of Minneapolis.

[Zon]

I don't know what "FWIW" means

For what it's worth

 I am right.

For cripes sake! Of course you're right because only you know what the heck you're talking about. As I said you completely missed The Pont.

[Zon]

So $50 in profit, $22 dollars in taxes... that leave $28 for materials, labor, distribution, state taxes, etc. Sounds reasonable! [what a joke]

Maybe it's reasonable. Maybe not. It depends on what the business is -- what it produces and sells, is it a one man shop or employ hundreds of people. What are the specifics of is the business you pulled those numbers from?

You! are the joke.

[Zon]

While you're at it could you list the companies working at 50% profit, I'd like to invest in them.

Mine for one as well as several others in the same line of work. I wouldn't accept you as an investor and certainly not a customer. I don't knowingly do business with persons that want to maintain the parasitical elite status quo.

Over the NRST you prefer an IRS that steals people's wealth, leaving them in financial ruin and destroys their livelihoods. Here's a sampling of the IRS abuses you prefer: IRS Abuse Reports

[ancient_geezer]

You can't just salute a National Sales Tax without citing the RATE!!!!

17% YES!!

With the repeal of individual/corporate income taxes alone it is 15%, but that keeps the IRS around for excises and payroll/wage taxes like SS/Medicare which are income taxes as well.

23% NOOOOOOOOOOOOO!!!

For income tax and SS/Medicare taxes repealed as well that's a bargain. Most wage earning folks are paying much more today on their earnings.

And, do we drive a stake through the heart of Federal Income Tax 1st?

How do you do propose to accomplish that without removing the tax statutes first and placing a viable system in their stead?

The last 100 years of income tax, with virtually continuous proposals to repeal the 16th have done 0 to accomplish that. As long as there is an income tax system in effect you can expect no progress on repeal nor prohibition of the income tax by amendment to the Constitution:

 

TAXES

 

100years of history under the income tax makes it clear that we will not get there (smaller government) from here (the income tax).

Isn't this just a little bit important?

It hasn't happened your way yet, doesn't look like it will either.

Repeal the income and payroll tax statutes and infra-structure, make them obsolete by replacing with with a retail sales tax

H.R.25, S.1493 Sponsor: Rep Linder, John [GA-7] (introduced 1/7/2003)      Cosponsors (54)

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.

then the way to repeal of the 16th and prohibition of taxes on income is clear and stands ready:

Sam Johnson's amendment to the constitution has a chance at enactment & ratification:

H.J.RES.61
Title: Proposing an amendment to the Constitution of the United States to abolish the Federal income tax.
Sponsor: Rep Johnson, Sam [TX-3] (introduced 6/24/2003)      Cosponsors: (5)

 

Without the necessary step of replacing current tax statutes, the prospects for prohibiting taxation of income is nil as the last 100 yrs of income tax and legislative history demonstrate.

[HawaiianGecko]

Sounds a bit to Zen for me.
1. Are you saying that if I buy shares of stock I should pay or not pay sales tax?
2. If I have money in an account of any type earning interest,dividends,bond payout, whatever; Am I not consuming capital?
3. A Tax-a-phrenic is someone that believes that the home mortgage interest writeoff actually pays them money. Or that buying a customer a $250 lunch and writing it off is somehow cheaper than letting them buy you that same lunch.

4. I'm totally in favor of a national sales tax. I didn't spend a quarter of what I made for 20 years. I just don't want to pay taxes again on money I earned and paid taxes on during that 20 years.
a) Can I get a refund on the tax I paid over the amount that would have been collected in sales tax? Better yet how do I prove that?
b) Will I be able to spend my after tax dollars without paying tax again? Or, how do I prove that I am spending "old already taxed" money to a merchant?

[HawaiianGecko]

I can never get my effective tax rate down to 9% as I have already paid an amount approaching 39% on the monies I have and am living on. I may be able lower my rate under your presumptions to 48% (the original 39% + 9%) if for some reason I decided to move and change my lifestyle radically to fit your model. I personally don't think I should buy used cars and boats to get to 9%.

A. I would be happy for the government to keep the current 39% that they took from me, so long as I don't have to pay sales tax on the first X amount of dollars I spend up to the amount I have in liquid assets at the point in time this national sales tax is inacted.
B. I would be tickled half to death if they gave me back that 39% and I paid the complete 23% NST on that same money as though I spend the entire wad, even though I didn't.
C. What I need to avoid paying is .39X$ + .23(.61X$)
D. I've had 2 personal audits and 2 business audits in my career and I found the IRS to NOT be intrusive at all, and in fact quite pleasent to work with, they were not the huns that most make them out to be. (admittedly I'd rather be mowing my neighbors' lawn than being getting an audit, but at the same time I'd rather go through another audit than have a tooth pulled)

E. I particularly like your early dismissal of "life not being fair." LOL, you're right! Therefore, I will lobby to keep the current system with, oh let's say, a flat tax rate on income. I realize that will be MORE fair to ME than it is to YOU, but like you said, "life isn't fair."

[ancient_geezer]

1. Are you saying that if I buy shares of stock I should pay or not pay sales tax?

Under H.R.25, as a causal investor, you pay retail sales tax only on brokers fees (a service) not on the capital invested nor on dividends or any capital gains on sale of investment assets. You do not pay the NRST on investment capital itself.

2. If I have money in an account of any type earning interest,dividends,bond payout, whatever; Am I not consuming capital?

In what way are you consuming capital? You are investing/saving capital that others are using.

3. A Tax-a-phrenic is someone that believes that the home mortgage interest writeoff actually pays them money. Or that buying a customer a $250 lunch and writing it off is somehow cheaper than letting them buy you that same lunch.

Yep!! Just costs you as well as assures Uncle still gets his cut out of his favorite tax collector the business.

4. I'm totally in favor of a national sales tax. I didn't spend a quarter of what I made for 20 years. I just don't want to pay taxes again on money I earned and paid taxes on during that 20 years.

Sorry my friend no way out of it, you are going to pay again now when you pay for goods and services under corporate & business income/payroll taxes that exist today. It is all embbeded and financed out of the price paid for products. In the end only a human being, the individual citizen can pay a tax, any tax.

However under H.R.25's FCA, you will be compensated for the taxes up to the povertylevel of your expenditures. And you will be paying lower prices for goods and services such that your dollars expended including the NRST will be no more than what you pay for the same thing today with its embedded tax burden.

a) Can I get a refund on the tax I paid over the amount that would have been collected in sales tax? Better yet how do I prove that?

No. But then you can't do that under the current system either. No way to get a refund on the taxes embedded into the prices of goods and services.

b) Will I be able to spend my after tax dollars without paying tax again?

No. But then you can't do that now either. When you buy something today you finance the embedded business tax burdens that exist to the tune of 20-25%. So not only did you get whacked up front on the dollars you put in, you are getting whacked again when you spend it.

Sorry, but where the Ross IRA is concerned, the government sold you a bill of goods if you figured that there was no tax consequence on money spent out of those accounts under the current tax system or any conceivable tax system. And that my friend is an economic fact of life.

The best you can do, is recover some tax paid back through the the Fair Tax Act, FCA, which under the current tax system you do not have the advantage of. That way you will have the advantage of the personal exemptions and deductions taken when taxed under the individual income tax when you invested/saved, and the NRST FCA as well. To that degree and the benefits of a better economy encouraging additional growth and returns on you investments, you are better off under HR25.

[ancient_geezer]

E. I particularly like your early dismissal of "life not being fair." LOL, you're right! Therefore, I will lobby to keep the current system with, oh let's say, a flat tax rate on income.

LOL, you are only fooling your self my friend. As to that Flat Income Tax, business pays that one too, as well as continue paying the employer's half of SS/Medicare you will be financing out of purchases of goods and services just as you do today.

Better read:

Flat Tax as Seen by a Tax Preparer
by Vern Hoven

Business costs under that Flat Income tax do not go down.

 

The Flat Tax is nothing more than a VAT that collects tax from you in price, coupled with a wage tax:

ttp://waysandmeans.house.gov/fullcomm/106cong/4-11-00/4-11kotl.htm

"Robert Hall, one of the originators of the proposal(Flat Tax), who describes his Flat Tax as, effectively, a Value Added Tax. A value added tax taxes output less investment (because firms get to deduct their investment.)"

"The Flat Tax differs from a VAT in only two respects. First, it asks workers, rather than firm managers, to mail in the check for the tax payment on that portion of output paid to them as wages. Second, it provides a subsidy to workers with low wages."

The Flat Tax; Chapter 3, by Robert Hall and Alvin Rabushka

In our system, all income is classified as either business income or wages (including salaries and retirement benefits). The system is airtight. Taxes on both types of income are equal. The wage tax has features to make the overall system progressive. Both taxes have postcard forms. The low tax rate of 19 percent is enough to match the revenue of the federal tax system as it existed in 1993, the last full year of data available as we write.

Here is the logic of our system, stripped to basics: We want to tax consumption. The public does one of two things with its income—spends it or invests it. We can measure consumption as income minus investment. A really simple tax would just have each firm pay tax on the total amount of income generated by the firm less that firm’s investment in plant and equipment. The value-added tax works just that way. But a value-added tax is unfair because it is not progressive. That’s why we break the tax in two. The firm pays tax on all the income generated at the firm except the income paid to its workers. The workers pay tax on what they earn, and the tax they pay is progressive.

To measure the total amount of income generated at a business, the best approach is to take the total receipts of the firm over the year and subtract the payments the firm has made to its workers and suppliers. This approach guarantees a comprehensive tax base. The successful value-added taxes in Europe work this way. The base for the business tax is the following:

Total revenue from sales of goods and services

less

purchases of inputs from other firms

less

wages, salaries, and pensions paid to workers

less

purchases of plant and equipment

The other piece is the wage tax. Each family pays 19 percent of its wage, salary, and pension income over a family allowance (the allowance makes the system progressive). The base for the compensation tax is total wages, salaries, and retirement benefits less the total amount of family allowances.

 

FLAT TAX, VAT TAX, ANYTHING BUT THAT TAX; Duke Law Magazine, Spring 96:

• "The flat tax is essentially a VAT, with a personalized element for wages. Thus, the business tax allows deduction of all purchases -- as does a VAT -- but also allows deduction of wages. The wage income that is taken out of the VAT base, however, is also taxed, but is assessed against the individual wage-earner, not against the business."

 

I realize that will be MORE fair to ME than it is to YOU, but like you said, "life isn't fair."

 

"As a matter of fact, what the income tax does — and this is the debate that I think we always try to get into in order to let you and him fight, see — and the people of this country are led down a path where the actual control of their resources, which in the end is the control over their will, is handed off to the government."

. . .

"The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system."

"In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation."

- KEYES TRANSCRIPT (01/28/02)

[HawaiianGecko]

 

	You may want to do some research before you.... well, as Mark Twain once said: "It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." There is another axiom that states basically the same thing only it refers to placing your fingers on the keyboard. It appears you are researching only one side of this debate.  Let's use a very simple example here: Knowns: Person A is living from paycheck to paycheck and spends his entire paycheck every month.  It doesn't matter if he makes 1,000/month or 100,000 per month, he spends it all. Person B is living off of previously earned monies that have been fully taxed at 40% (for calculations in your head) An item has a price of $100. National Sales Tax is 23%. OK, here we go... Person A has to earn $123 to buy the aforementioned item. ($100 price + $23 tax) Person B had to earn $205 to buy the very same aforementioned product. $205 x (1 - 40% tax) = $123, and therefore Person B paid $82 in tax 5 years ago, plus $23 in tax at the sales counter to buy the same $100 item. The statement "Thus, money that has already taxed is taxed again at the cash register to the tune of about 22%" is totally irrelevant. It doesn't matter if all $25 or $50 of the product price is due to corporate taxes being embedded.  Let's say 1/2 of that $100 is embedded corporate taxes, therefore, the product price would be lowered to $50 and Person A would have to earn $61.50 to purchase it while Person B would have to earn $102.50 in order to purchase the very same product. While the price may be a function of a combination of inflation, embedded corporate taxes or a myriad of many other costs, it is pointless with regard to these two different consumers. You can lower or raise the product price as much as you want and it effects both people the exact same way. What you are missing in all of your 'research' is that Person B paid $105 in Federal taxes to purchase a $100 product while Person A only paid $23.

 

[ancient_geezer]

D. I've had 2 personal audits and 2 business audits in my career and I found the IRS to NOT be intrusive at all, and in fact quite pleasent to work with, they were not the huns that most make them out to be. (admittedly I'd rather be mowing my neighbors' lawn than being getting an audit, but at the same time I'd rather go through another audit than have a tooth pulled)

After getting 39% out of you and another 20-25% coming when you spend it under the current system, Then to be audited and have to prove your income and expenditures taken as deductions as well.

Hmmmm!! a hun by any other name ... smells.

"a free people that pays slave taxes to its government is willingly training itself for bondage."

Alan Keyes 1999

[HawaiianGecko]

 

	Of course prices will drop 22-25%, just like all the taxes from riverboat casinos took care of the education budgets in those same states.

 

[Taxman]

Astonishingly, amazingly and publicly so!

[Your Nightmare]

Person A has to earn $123 to buy the aforementioned item. ($100 price + $23 tax)

Actually the tax would be $29.87 for a total of $129.87. You've been misled by the FairTax crowd into believing it's a 23% sales tax when it's actually a 29.87% tax. The 23% comes from the fact that 29.87 is 23% of 129.87. Clever of them, huh?

[phil_will1]

"A national sales tax will NOT benefit wealthy people in any way shape or form."

Interesting perspective, especially since democrats are attacking the FairTax because it is regressive and would be a way of shifting the tax burden away from wealthy individuals onto the middle class.

Here's the straight scoop. To the extent that wealthy individuals chose to purchase US produced goods, they would pay about what they would have under the old system for their consumption. To the extent that they chose to buy imports, they would pay a premium. In return, they no longer pay tax on any income, including capital gains, and no estate and gift taxes.

Primarily because of the price shifts which would make US producers so much more competitive on the world market (including our own), as well as the $5 - 6 trillion that would be free to move back into this country from overseas, the US economy would soar. A couple of nationally known money managers have predicted that the DJI would double with 24 months of passing the FairTax.

Here's a question for you: if the DJI doubles within 24 months of passing the FairTax, who would benefit more from that development - wealthy individuals or those living on welfare?

Care to retract your post now?

[phil_will1]

">>> this assumes I buy everything new(especially big ticket items-cars,boats,bikes) from a store rather than private owner. <<<"

"It will take the government about 2 minutes to figure this out if a lot of people do it and then the IRS won't be going away, which is one of the main savings inherent in a National Sales Tax."

Figure what out? Used goods aren't taxed under the FairTax and there won't be an IRS. The IRS is an agency that exists to collect an income tax.

Eliminating the IRS (which has an annual budget of about $10 billion) is actually small potatos compared to the enormous savings in compliance costs in the private sector. The estimates for compliance costs of the current system vary widely, depending on how expansive a definition of compliance costs you want to use, but the low end of the range is $150 - 200 billion per year. Almost all of those costs could be eliminated.

Did it ever occur to you to study and read a little about a proposal before making up your mind and posting misinformation on the internet about it?

[phil_will1]

"The 16th ammendment allows the federal government to collect income tax. Repeal of that ammendment would ensure that the government would never impose BOTH the sales and income taxes."

Not totally true. Certain types of income taxes were legal before the 16th was ratified. As KevKrom pointed out, the 16th simply expanded the types of income which could be taxed. The solution is not just to repeal the 16th, but to do what is called an "aggressive repeal" which would make ALL types of income taxes illegal. That would provide far more protection than we have today against having both.

That is exactly what FairTaxers will start to work on once the FairTax is enacted. Trying to repeal the 16th before a consensus is reached as to what proposal will replace the income tax is politically DOA.

[phil_will1]

"This is great because it will make all of the 'under the counter' employees (read illegal imigrants) start paying taxes too. The increase in tax revenue would be a windfall."

According to a respected economist, illegal labor, pornography, prostitution and recreational drugs comprise a $1 trillion/year sector of our economy. All those people become taxpayers under the FairTax.

[IllumiNaughtyByNature]

What are your thoughts on this making headway this year? It would seem that the paradighm is here and if we miss it then it might be a while before we get another chance.

Imagine another 1T in revenue and a decrease in spending (Bush using the veto) we could make ground fast on the deficit and the economy.

[phil_will1]

"I love your solution, an example of that old acronym, KISS. (I'm not calling you stupid.)"

I like Letterman's approach better. He says the Bush White House is working out the details of a tax reform proposal in which only the blue states have to pay income tax. I may even like that one better than the FairTax.

[phil_will1]

"When I do the math, the numbers don't add up."

You are a fierce defender of the status quo, YN. The numbers will never add up for you.