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Gutknecht pushing national sales tax
Pioneer Press ^ | 11-15-04 | ap

Posted on 11/15/2004 7:00:17 AM PST by 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.

(Excerpt) Read more at twincities.com ...


TOPICS: Constitution/Conservatism; Government; News/Current Events
KEYWORDS: fair; fairtax; gutknecht; nrst; tax; taxreform
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To: Your Nightmare

, but the flat tax is a consumption tax.

Only by equating an income tax to a sales tax in the size of taxbase. Not in the manner it which it is levied.

(Income - investment) = consumption

Income taxes/VATS are laid on the left while retail taxes laid on the right side of the relationship.

On the left side businesses are taxed as in a VAT or corporate tax removing visibility and citizen participation.

On the right side the citizen as a customer participates fully and visibly in the tax system.

261 posted on 11/17/2004 10:11:42 AM PST by ancient_geezer
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To: Your Nightmare

"Lots of people have been duped, but by the FairTax supporters. That's why I am so anxious for hearings."

You should be anxious for debates, as well, then. We are waiting for you to drop your protective cloak of anonymnity and come on out and debate in public. No need to wait on hearings.


262 posted on 11/17/2004 10:13:12 AM PST by phil_will1
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To: lewislynn

"I frankly don't care what happens. I survive and prosper just fine and always will."

I know, I know. You charge your customers whatever you damn well please and they have no choice but to pay up. Price competition doesn't exist in LL's world, does it?


263 posted on 11/17/2004 10:16:32 AM PST by phil_will1
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To: Rakkasan1

Unless the feds (and by the same token, a lot of state govs as well) start actually trimming not only the deadwood but the parasitic poison oak that OUR tax money supports, things will continue to spiral downward.

When you read lists of what OUR tax dollars are spent on, it's enough to toss your stomach contents, raise your blood pressure, and cause an embolism. Did I mention steam issuing from ears?


264 posted on 11/17/2004 10:23:13 AM PST by little jeremiah (Moral absolutes are what make humans human.)
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To: steve-b

"In other words, the effect would be to make new construction absolutely impossible to sell (since it would cost 23% extra)."

New homes have 22% or more imbedded in them now from the current system. Are new homes impossible to sell now? Why would making the tax component more visible cause sales to drop significantly??


265 posted on 11/17/2004 10:24:22 AM PST by phil_will1
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To: phil_will1
In terms of making our products competitive on the world market, one would rank the options in this order
1. FairTax (or some other type of consumption tax)
2. VAT
3. Flat or progressive income tax
Actually, there would be no difference between the FairTax and VAT and the flat tax could easily be structure to be the same as the FairTax and VAT.


In terms of minimizing compliance costs, an objective ranking would look like this
1. FairTax
2. Transaction tax
3. Flat income tax
4. Progressive income tax
I really don't see how filing a VAT 3-12 times a year to one entity (max 12 filings) or a flat tax once a year to one entity (1 filing) is more complex than filing a sales tax 12 times a year to 50 entities (600 filings).

Under a VAT, ~50-75% of businesses (all small businesses) would be exempt from filing. Under a flat tax, the vast majority of citizen wouldn't even have to file or, at least, a form no more complex than the FairTax's FCA requirement.


So tell us, YN, what criteria are you using in ranking the FairTax below that of these other tax systems?
The main issue is enforceability.
266 posted on 11/17/2004 10:25:22 AM PST by Your Nightmare
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To: little jeremiah

I get the NTU letter and vote on the 'outrage of the month'
. It's hard to decide which ones are the worst, based on
amount of $ wasted or how stupid the idea was.


267 posted on 11/17/2004 10:26:31 AM PST by Rakkasan1 (Justice of the Piece: Hope IS on the way...)
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To: ancient_geezer
Only by equating an income tax to a sales tax in the size of taxbase. Not in the manner it which it is levied.
A consumption tax is a tax on consumption, which is what the flat tax does, as does a sales tax or a VAT.
268 posted on 11/17/2004 10:31:16 AM PST by Your Nightmare
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To: steve-b

"...besides the obvious political impossibility of eliminating the mortgage interest deduction"

Perhaps we could make the income tax an option for those, like you, who believe the mortgage deduction is sacrosanct. You would be allowed to file a 1040 every year and pay a tax on your income if you chose. That way, you could keep your home mortgage (and charitable contribution) deduction.

For the rest of us, retaining a deduction for a tax that no longer exists would be foolish.


269 posted on 11/17/2004 10:33:03 AM PST by phil_will1
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To: lewislynn
Congress empowered the IRS. Congress must fix the problem.

Preliminary report shows that electoral candidates that supported the NRST won the people's vote by landslides. The voting public in those areas have demonstrated that they readily understand the NRST. And did so despite having disinformation shoved at them.

See post 80

DeMint won by the landslide proportion of 10 percentage points.

Coburn won by the landslide proportion of 12 percentage points.

Cathy McMorris... Louis Gohmert... and Ted Poe... All were endorsed by the Club for Growth, and all won in landslides. 

The Fair Tax calls for abolishing the IRS. 

The IRS is the muscle that enforces the parasite tax (income tax). While most people will never be the victim of IRS abuse the IRS steals -- under the color of law -- hundreds of people's savings each year. Leaving them financial ruined the IRS destroys people's livelihoods and lives.  IRS Abuse Reports 

"Warning: These IRS Abuse Reports start mildly and slowly. After a while, these reports build into such a crescendo of sickening horror, criminal destructiveness, and unbearable evil that a sedative may be required to read them all:"

You've been on these threads for years and while you may -- I repeat may -- have duped a couple of people into siding against the NRST there have been hundreds of people that have visited these threads and sided with the NRST.

After a bit of research people readily reach their own conclusion -- casting your post in the trash can. Ignoring you from then on. 

270 posted on 11/17/2004 10:36:01 AM PST by Zon
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To: Your Nightmare; phil_will1

The numbers I provided are personal consuption expenditures!

And include of course not only the busness taxes collected by federal govenment but the overhead costs to business and the economic activity that go along with those taxes all embedded in consumer prices, overhead costs and tax collected that go away with the repeal of income and payroll taxes on business as provided for in the Fair Tax Act, H.R.25 Title I, allowing for reduction of 20-25% in prices recieved by business with no decline in business profitability.

 

Edgar K. Browning, "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" in 1987

confirmed by Jane G. Gravelle and Laurence J. Kotlikoff when they "estimated that the corporate income tax costs more in lost output than it raises for the government." in 1989

Independantly supported by the findings of

James L. Payne, "For every tax dollar collected and spent, Americans pay an additional 65 cents" 1993

Daniel Pilla in '95, figuring "burden is estimated at $700 billion annually. " and
Ernest Christian Jr., figuring "true burden on the U.S. economy is probably closer to $1 trillion" for the $1,275 billion federal tax revenues collected in '94

Dr. Dale Jorgenson "found that each extra dollar the government raises in revenue through the current system costs the economy $1.39."

 

In the end,YN, it is you who was misleading.

271 posted on 11/17/2004 10:36:20 AM PST by ancient_geezer
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To: Your Nightmare

"Actually, there would be no difference between the FairTax and VAT and the flat tax could easily be structure to be the same as the FairTax and VAT."

Not true. A VAT would probably be border adjustable so that the tax burden would be removed from exports. That is certainly a step in the right direction. However, domestically produced goods with a tax burden would still be competing with imports which, in many cases, have no tax burden. IOW, a VAT helps a country compete in foreign markets, but it still creates an unfair advantage in its own domestic market.

If it is so easy to structure a border adjustable flat tax, why is it that none of the flat tax bills introduced into congress have that feature?


272 posted on 11/17/2004 10:41:00 AM PST by phil_will1
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To: Your Nightmare

A consumption tax is a tax on consumption, which is what the flat tax does, as does a sales tax or a VAT.

Each levied in a different manner.

The NRST is levied visibly on the citizen at retail sale, while the others are levied on business activity throughout the full chain of production not within the full congnizance of the electorate as they are embedded along with their exhorbitant overhead costs as an inflationary addition to consumer price.

In short, the amount of taxbase is not the determinate of whether or not the tax is a RETAIL sales Tax, Which is the is the fact you wish to obscure in using the economic meaning of the terms equating an income taxbase to "consumption" taxbase.

They may all tax the same amount of dollar transactions, they are not equivalent in visibility to the electorate, nor are they equivalent in the overhead burden imposed upon personal consumption and the economy.

273 posted on 11/17/2004 10:51:12 AM PST by ancient_geezer
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To: ancient_geezer
And include of course not only the busness taxes collected by federal govenment but the overhead costs to business and the economic activity that go along with those taxes all embedded in consumer prices, overhead costs and tax collected that go away with the repeal of income and payroll taxes on business as provided for in the Fair Tax Act, H.R.25 Title I, allowing for reduction of 20-25% in prices recieved by business with no decline in business profitability.
Uh..that's what I was calculating using your 22% figure. How is that misleading?
274 posted on 11/17/2004 11:15:02 AM PST by Your Nightmare
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To: phil_will1
However, domestically produced goods with a tax burden would still be competing with imports which, in many cases, have no tax burden. IOW, a VAT helps a country compete in foreign markets, but it still creates an unfair advantage in its own domestic market.
Sorry, but this is wrong. Imports are still charged the VAT but they don't get the credit for inputs (ie. the "value added" that is taxed is the full amount of the product). Imports and domestic products would be taxed equally under a VAT.
275 posted on 11/17/2004 11:17:48 AM PST by Your Nightmare
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To: Your Nightmare; phil_will1

So tell us, YN, what criteria are you using in ranking the FairTax below that of these other tax systems?

The main issue is enforceability.

Understandbly that would be your primary criteria.

Adam Smith, the father of modern economic thought, had a lot to say about that kind of taxation in his still great book Wealth of Nations pp. 561-64.:

A tax was bad that required a large bureaucracy for administration.

A tax was bad that "may obstruct the industry of the people, and discouraged them form applying to certain branches which might give maintenance and employment to great multitudes. While it obliges the people to pay, it may thus diminish, or perhaps destroy, some of the funds which might enable them more easily to do so."

A tax is bad that put the people through "odious examinations of the tax-gatherers, and exposes them to much unnecessary trouble, vexation, and oppression...It is in one or other of these four different ways that taxes are frequently so much more burdensome to the people than they are beneficial to the sovereign"


 

"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.

 


 

For others there are overiding considerations that are the issue, those dealing with personal liberty and freedom from coercion:

[Montesquieu wrote in Spirit of the Laws, XIII,c.14:]

Patrick Henry, Virginia Ratifying Convention June 12, 1788:

I discussed the importance of abolishing the income tax because of its tendency to form a habit of servility in the souls of a people that accepts it.

Servility of soul is bad not only in itself, it is also an open door through which will soon walk the abuses of ambitious government power.

Leaders who find themselves with governmental power over a servile people will be quick to conclude that such a people exist to serve them.

Alan Keyes 1999

 

"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)

And citizen empowerment:

Federalist #21:

They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue."

 

Taxes & Government Spending:


276 posted on 11/17/2004 11:24:13 AM PST by ancient_geezer
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To: ancient_geezer
Each levied in a different manner.
Yeah, and? That wasn't the issue, the issue was whether a flat tax is an income tax. It is not, it's a consumption tax.
277 posted on 11/17/2004 11:29:48 AM PST by Your Nightmare
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To: sarasotarepublican
To rid us of the income tax will keep Republicans in power for many years.

Forget the federal taxes, just rid me of my FICA taxes.

278 posted on 11/17/2004 11:31:54 AM PST by riri
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To: ancient_geezer
They may all tax the same amount of dollar transactions, they are not equivalent in visibility to the electorate, nor are they equivalent in the overhead burden imposed upon personal consumption and the economy.
A VAT is no different than a NRST from the customer's standpoint.

Example:

Input
Value
Added
Total
VAT
Credit
"Sticker"
Price
29.87%
VAT
Gross
Payment
Net Tax Paid
(Tax - Credit)
Raw Materials
$ 0
$ 155
$ 155
$ 0
$ 155
$ 46
$ 201
$ 46
Manufacturer
$ 201
$ 200
$ 401
$ 46
$ 355
$ 120
$ 475
$ 74
Wholesaler
$ 475
$ 225
$ 700
$ 120
$ 580
$ 209
$ 789
$ 89
Distributor
$ 789
$ 250
$ 1,039
$ 209
$ 830
$ 310
$ 1,140
$ 101
Retailer
$ 1,140
$ 375
$ 1,515
$ 310
$ 1,205
$ 453
$ 1,658
$ 142
TOTAL TAX PAID
$ 453



With a 29.87% VAT the customer paid $453 in taxes on a $1,205 item which is exactly what they would pay with a NRST.
279 posted on 11/17/2004 12:14:25 PM PST by Your Nightmare
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To: Your Nightmare
They also say the only way prices can drop is if wages go down.

Interesting.

You're claiming if wages go down, price goes down.
But when taxes go down, prices don't?

280 posted on 11/17/2004 12:26:39 PM PST by dread78645 (Truth is always the right answer)
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