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 ...
Under the income tax products and services have embedded taxes that raise the consumer cost by 20 to 25%. Thus, money that has already taxed is taxed again at the cash register to the tune of about 22%. Those embedded costs are eliminated with the NRST. So it's essentially a wash -- the cost at the register will be the same.I don't suppose you have any reasonable evidence of this, do you? The only thing anyone else can provide is one line in one paper by one economist. And even that economist states that the results are probably overstated because of the peculiarities of his model.
The government WILL NOT know how much money you earnYes they will. Earnings are still required to be reported to the Social Security Administration.
I'd happily trade my mortgage,educational,child, and
charitable contribution deductions for getting rid of the IRS. My guess is all the people ever audited would,too.
While we are pushing a national sales tax, lets push to have requests for increases to the sales tax to be put before the voters. Taxes may not be increased without at least 60% of the American electorate approving said increase.
I'd happily trade my mortgage, educational, child, and charitable contribution deductions for getting rid of the IRS. My guess is all the people ever audited would, too.The IRS only does Congress's bidding. The same Congress that would implement a NRST.
While we are pushing a national sales tax, lets push to have requests for increases to the sales tax to be put before the voters. Taxes may not be increased without at least 60% of the American electorate approving said increase.Actually, just the opposite would happen. The FairTax has the rate changing every year (the 29.87% rate is just for the first year) based on rates set by the SSA without a vote by Congress.
The only thing anyone else can provide is one line in one paper by one economist.
Several economists have weighed in. People on these threads have given you links to research papers. You assume that people should take your word rather verifiably-honest economists. Also, granted that politicians and bureaucrats in general are on the mid to low end of the one-to-ten-integrity scale, FWIW, 53 of the 54 congresspersons supporting HR25 are republicans. While republican politicians may not be of high integrity, they're not stupid.
With impunity the IRS steals people's wealth and destroys their lives. IRS Abuse Reports -- The Case Against the IRS.
TABOR-taxpayer bill of rights
getting more common in states all the time.
DeMint won by the landslide proportion of 10 percentage points.
Coburn won by the landslide proportion of 12 percentage points.
All were endorsed by the Club for Growth, and all won in landslides.
They article is very encouraging. The typical person -- whatever typical is -- can readily understand the benefits of the NRST. And do so despite having disinformation thrown in their face.
With the latest "shenanigans" of the old media I foretell that in covering the NRST they'll again severely discredit themselves.
"I don't suppose you have any reasonable evidence of this, do you? The only thing anyone else can provide is one line in one paper by one economist. And even that economist states that the results are probably overstated because of the peculiarities of his model. When I do the math, the numbers don't add up."
I wonder the same thing. I also would tend to believe that those have hiked the price to cover said taxes would just love to keep the product price the same and just wallow in the profits. I do have to say though I would love to be able to save my money and spend it how I choose incurring taxes only when I did spend it.
Several economists have weighed in. People on these threads have given you links to research papers. People on these threads have given you links to research papers.I've only ever seen one paper. If you've seen other people have given me links, I must have missed them. Can you point out the posts?
You assume that people should take your word rather verifiably-honest economists.Verifiably honest? What does that mean? Are you suggesting the results of a certain economist's model have be verified?
With impunity the IRS steals people's wealth and destroys their lives.No they don't. They just do what Congress tells them to do.
Well, that "was" the original plan, but it "has" been changed over time. They even amended the Constitution to do so.
"I hear all of the NRST people salivating over "getting rid of the IRS" when in fact, from everything I've heard, they'll just get redirected at a smaller number of victims. This is not rocket science."
I think you mis-understand what the NRST folks mean by "getting rid of the IRS". In actuality, what they are referring to is GETTING THE IRS OUT OF THE FINANCES OF INDIVIDUALS, which the NRST will do. The much smaller IRS (of course it will never completely go away, even if the name gets changed to something else) will then be talking to the state's "departments of revenue" about money issues.
Most excellent point. Thanks.
"They" are ignoring the Family Consumption Allowance. The FCA rebate/prebate effectively makes all spending up to the poverty level tax free.
Of course the vast majority of people spend their entire wad every month, ...
Maybe because they don't see any reason to save it?
Keeping profit margins too high invites existing or new competitors to undercut you in price and take business away from you. The free market is truly a wonderful thing -- competition will exert downward price pressure.
I also would tend to believe that those have hiked the price to cover said taxes would just love to keep the product price the same and just wallow in the profits.
They may like the idea of keeping their prices at pre NRST levels. But the first company in every field that lowers its price by , say, 22% will gain a big increase in market share.
I'd love for my competitors to keep lofty prices You could undercut their lofty prices and make the same profit per sale that you made under the income tax.
Heck when you figure the lifetime value of a customer you make out "like a bandit" For example, The average sale is $100 gross of which $50 is profit. On average each new customer buys from you twice a year and stays with you for three years. So every new customer is worth $50 on the first sale and worth $250 profit to you on the back-end.
Plus, with your lower prices your customers may go from repurchasing twice a year to three times a year and stay with you for five years instead of three.
Not to mention there's a high probability that adjacent to your paid-for advertising campaign you'd get an avalanche of free advertising via word of mouth -- people love to talk about the great deal they got.
Since most first-time buyers move into a used house, that makes for a zero tax purchase (not counting taxes on the bank/mortgage company service fees).
Can you point out the posts?
I don't keep tabs/links on stuff you need. Perhaps somebody will repost them.
They just do what Congress tells them to do.
So the IRS is just following congress' orders?... Orders to financially ruin people and devastate their lives? Congress created the problem by empowering the IRS. Congress must fix the problem.
I wonder the same thing.
Actually it adds up quite well, what most folks don't consider is not only does government collect tax revenues for corportations and businesses, there significant direct overhead costs associated with the planning, accounting, reporting, and litigation associated with the current tax system as well as the effects of disincentives to production as a consequence of having to direct resouces away from production into overhead activities not mentioning the many obscure rules of deductibility acting to distort business decisions. On top of it all are the uncertainties in the tax law which necessitate raising prices to compensate to assure profitability against unknowable effects of ever changing tax regulations.
All told the overhead costs plus immediate taxes amount to a potential of 20-25% price declines, with repeal of just the income tax alone, not counting in effects of repealing the business side of SS/Medicare taxes.
An interesting read:
We must . . . End Tax Slavery Now; Nov '97
by Jarret B. WollsteinHOW 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%
Town Crier Staff Writer
Clyde Noel : http://www.losaltosonline.com/latc/arch/9528/
"In a book titled "Costly Returns," economist James Payne estimates the nation's bill for tax record-keeping, audits, filing tax attorneys and accountants totals an astonishing $593 billion. To put it another way, that's more than twice as much as last year's entire defense budget and $240 billion more than all 1996 Social Security outlays."
Killing the IRS, By Daniel J. Pilla, Reason Magazine July 1995
"There is little about a flat-tax system that will trim the staggering cost of tax law compliance. At present, this burden is estimated at $700 billion annually. Much of the cost is associated with recordkeeping and tax law enforcement, neither of which is reduced by a flat tax. A flat tax certainly involves a simpler tax return, but return preparation is the smallest component of tax law compliance.
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-hours 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.
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."
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.
I also would tend to believe that those have hiked the price to cover said taxes would just love to keep the product price the same and just wallow in the profits.
They might like to except for your own reaction as well as others
I do have to say though I would love to be able to save my money and spend it how I choose incurring taxes only when I did spend it.
to the fact that with the repeal of all income and payroll taxes, savings and invest is taxfree, and the NRST replaces taxes already going out today, The NRST doesn't magically create more money in the economy to support higher prices, the net result must be the same total payment with tax included.
Today for individuals to be able to purchase anything, they must first earn substantially more to pay the taxes on income, then pay again embedded in the prices for goods and services.
Under the NRST the same dollars go to a total payment (NRST plus base price) as opposed to (individual taxes + embedded taxes + base price).
With competition for the same amount of dollars in the system there is no place for shelf prices to go but to decline in response to the cost reductions received by business in response to competition for your dollars between taxfree savings & investment, competition between businesses to maintain market share at current profit levels.
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