Posted on 05/12/2005 7:46:54 PM PDT by Your Nightmare
Members of the President's Advisory Panel on Federal Tax Reform on May 11 expressed concerns over the FairTax national retail sales tax, a plan that has emerged as an alternative with a major grass-roots push.
Panel chair Connie Mack, vice chair John B. Breaux, and other members worried the plan would be difficult to enforce, would be regressive, and would require a high rate in order to take in enough money to fund the government.
Breaux raised concerns that the proposed 23 percent (tax-inclusive) rate would not be sufficient to raise the revenue necessary to fund the government. The Joint Committee on Taxation estimated that it would take as much as a 57 percent (tax-exclusive) rate to be revenue-neutral. Further, Breaux said he thought exemptions that would be carved out to make the sales tax progressive would also complicate it.
Mack, who raised concerns similar to his fellow panelists', said he was "intrigued" by the plan. "But if it's such a great idea, why haven't other political entities around the world pursued it?" he asked.
Americans for Fair Taxation Executive Director Tom Wright emphasized that the plan emerged after "thorough academic research" and "thorough polling" The strong grass-roots push has resulted in some of the group's 600,000 members appearing at each of the panel's hearings and has inspired a large comment-writing campaign to the panel in support of the plan.
Sales tax advocates were among the 20 witnesses who gathered before the panel for a full day of testimony on tax reform proposals. Although the group has held several other hearings in Washington and around the country, the May 11 meeting was its first hearing on specific reform plans since Bush appointed the panel in January. The panel has been charged with identifying tax reform proposals that are progressive, encourage charitable giving and home purchases, and are revenue-neutral. The proposals are due by July 31.
Among the tax replacement and reform plans presented to the panel were the value added tax, consumption-based tax, and the flat tax, as well as proposals that would use the current income tax as the foundation.
Witnesses generally claimed that theirs was the fairest, simplest, most flexible, most transparent revenue-neutral proposal that would improve economic growth and savings while meeting the president's criteria of encouraging charitable giving and home buying. Witnesses presenting consumption-based plans praised their overhaul as taking millions of low-income taxpayers off the rolls, being easy to transition to on a worldwide basis, and including safeguards to prevent new loopholes that would result in increased complexity down the road.
Tax reform panel members, who agree the current tax system needs to be fixed, grilled witnesses without revealing whether they will ultimately endorse a consumption- or income-based tax or a different mixture of the two.
"How many of you would like to have your corporation make your purchases so your effective tax rate is 0%"
Oh boy, you sure got me there, Louie. I can't imagine how we would ever catch Turner if he started paying for his lavish lifestyle through his corporation.
LOL!! Are you serious?
So you don't want to answer. This is where it always happens.LOL! I did answer in #454. Take off those FairTax-colored glasses. They blockout the truth.
One of the reasons stated and argued for the farttax is that the present system isn't broad enough, that is, all too few people pay most of the tax.
Do not confuse visible participation that the NRST demands for tax burden that imposed. The visible particpation is what is required and the negative act of everyone paying out 23% of their dollars, when buying their goodies and necessities, however they come by the those dollars is a wonderfully focusing attention getter.
Then you say the farttax will be more progressive which makes me believe that even though a few more may participate the burden is more disproportionate.
Participation in paying a visible rate of tax at the retail counter is the key to alerting the electorate to excercise that "eternal vigilance."
Today a welfare mother receives a dole from the government, and perceives no cost of government to herself inspite of the fact that what she buys is fully embedded with taxes from throughout the entire chain of productions for her goodies.
Afterall if you don't perceive the burden of a tax, theirs not much incentive there to vote to help reduce burdens on anyone else.
Walter Williams nails that one the best: "It's like me in the restaurant: What do I care about extravagance if you're footing the bill?"
Under an NRST, even though a check covering payment of tax is paid to that welfare mother and everyone else, the negative act of paying 23% for that next goodie more than offsets any impression of a totally free ride on that new taxpayer.
In reality, the farttaxers are looking for any argument to justify the addition of another layer of broadbased tax expressly to tax again what the Boomers have saved for retirement as the generations coming after them are jealous and weak
Lets see, I'm a boomer, I have saved a lifetime for my retirement and I support the FairTax National Retaill Sale Tax, because I intend to see the end of such blatent class rhetoric.
I'm tired of listening to the boomers of my generation belly aching about how bad they have had it with taxfree investing into IRA and 401ks and taxfree receipt of employer paid retirement packages and then complaining that they might have to pay some tax on the backend while even the penalties for early withdrawl out of such vehicles are wiped out with the repeal of income tax law.
Once again it becomes clear as a bell why Karl Marx and company put their bets on graduated & progressive income taxes. The perfect formula for perpetual class warfare between those who perceive paying taxes and those who do not.
It is interesting that those best able to gain advantage from taxfree growth of investments now, cry that they may have to pay a tax when they spend it instead of continuing there perpetual dream of avoiding it altogether.
I understand it perfectly well. There are roughly $2 Trillion in federal taxes collected. Approximately $1 Trillion comes from Individual Income Tax returns. Only $200 Billion come from Busniess Tax Returns, and approximately $700 Billion are FICA taxes. Roughly $8 Trillion is spent on personal consumption. If your hired guns tell me that there is 20-30% embedded taxes, they are telling me they are counting every penny of the $2 Trillion of taxes collected. There is no other way. But under the Fair Tax, employees will get to pocket $1.35 Trillion of the taxes you are eliminating. That means costs of goods will only be reduced by the remaining $650 Billion. Producers will only be able to reduce their costs 8% under your the Fair Tax Plan when all taxes are accounted for properly, not the 20-30% they lie about. Now what part of this don't you get?
"The more they have to refer to a 'bill' make it even more ridiculous because a bill never reports out of Congress the way it was read in and legislation almost never becomes law which represents the bills without reconciliation and compromise."
Your comment was directed toward YN, who certainly can't agree with your premise if he is being even slightly intellectually honest.
After all, YN has previously posted that it isn't even necessary to have a bill in congress at this stage of the process. In fact, one doesn't even have to decide between forms of taxation, such as the VAT vs the flat. Totally inconsequential, to hear YN tell it. It isn't even necessary to have a proposal committed to writing and have little details like the rate worked out.
So if it is inevitable that any proposal get modified and compromised during its passage through congress, what could we say about one that isn't even at the stage of discussion and analysis yet?
If you believe changing the tax scheme will forestall socialism you are delusional.
But those don't add up to $2 Trillion. If there is $8 Trillion in consumption and 20-30% in embedded taxes, they must add up to $2 Trilliion. Even assuming a ridiculously high number for compliance cost, there is still only about $1 Trillion. The only way you can possibly get to $2 Trillion is to add in the individual tax. Really, there is no other way.
How many of you would like to go to jail for tax fraud?
How would it be tax fraud? He's the CEO of a corporation. Part of his tax free compensation/wage is making his personal purchases.
What part of the fairtax dictates what, what form, or how much CEO compensation has to be?
Boy that really clears it up. LoL
This becomes more complicated with each question asked or objection raised.
In no way is this simple.
Outstanding copy and paste. BTW, who wrote that for you?
Collected everybit of it from economic analysis found throughout the web and plastered it right into my html editor/formatter along with hyperlink to source my own amplifing comments.
I certainly am impressed. How do you do it?
With an HTML editor/formatter just as anyone with a brain in their head would do.
Let's see, right click, ah, highlight...... man, this is too tough.
Not tough at all in fact, just find the analytical papers and providing excerpt of the point made with hyperlink, HTML is a perfect tool for presenting and disseminating facts and information.
Isn't the internet great with its hyperlink and editing/formatting tools to aid in clear presentation of facts and authoritative analysis. Web forums and blogging, the bain of demogogues and the MSM, and the downfall of demogogues and those who would use logical fallacy of adhominen when they have no substantive argument and fact to stand on.
I can't imagine how we would ever catch Turner if he started paying for his lavish lifestyle through his corporation.
Shows how smart you are. He wouldn't be paying for it, the corporation would as a cost of doing business.
Are you saying after your sales tax is enacted corporations not subject to the sales tax are still going to be audited for income VS spending?...By who?... You claim there won't be any IRS agents.
So how would you attempt to catch him without auditing both him and the business?
No it has not been explained. Only by accepting wildly unrealistic assumptions can this issue be dodged. There is no easy adjustment of wages and prices which MUST happen in order for equilibrium to be re-established. Even in the days of Classical Economics such adjustments were not as painless and easy as are expected under the FT.
And that does not even get into the nightmare raised by having no tax on existing homes and full tax on new homes. Anyone who tries to tell me that such a scheme will not collapse the home construction industry has no credibility since this would be the obvious result. While this would benefit current owners of homes such as myself it is not worth the destruction caused just to benefit me.
Imbedded costs are corporate income taxes, employER paid payroll taxes and associated compliance costs.And who says they are embedded in prices?
List them, go ahead.
Are you saying that ALL education expenses are untaxed? AND that this is a simplification? LoL impossible.
Paranoia is an irrational fear. My concerns may be mistaken but they are hardly irrational.
Implementation of Theoreticians' ideas rarely works as designed or intended. And this is totally theoretical.
But that's not what they're saying! Prices are inflated by taxes yes, but that isn't the only inflationary component in prices as a result of the income tax system. There are far more costs other than the hard taxes passed along in prices. At least you understand that taxes are expenses passed on in prices.
I think the chain of causation with respect to shifting taxes incident on the employee to the product cost is too attenuated to be seriously considered. In the real world, a raise it predicated on the value of the employee. If he/she isn't worth the additional money, they don't get it. More on this later.
List them, go ahead.Jesus, are you mental? I did in #454. Payroll and personal income taxes.
"they had better repeal the 16th amendment and destroy the IRS before making it law. If not, then god help us, the federal government will then have two taxes in which to tax us to death"
That is the problem. I think we should be concentrating on lowering current taxes and cutting the percentage of GDP devoted to government.
Deficit spending and inflation are actually the fairest tax system of all, no IRS and it is a flat tax. So, cut taxes, balloon the deficit (so they can't spend more) is really the way to go.
I think the chain of causation with respect to shifting taxes incident on the employee to the product cost is too attenuated to be seriously considered. In the real world, a raise it predicated on the value of the employee. If he/she isn't worth the additional money, they don't get it. More on this later.I think we are in perfect agreement on the way things are in regards to tax incidence. I was discussing, hypothetically, the way things could be.
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