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.
I beg to differ! The information is NOT currently there!
Were do I go to find out how much tax and, even more importantly, other costs imposed by the Marxist income tax are hidden in the prices of the goods and services I purchase?
I support the bill as it is currently written. If it were to be modified very much at all I would not and neither would any other Fairtax supporter that I know including the bills sponsor!
Total nonsense. Europe, for example, has higher taxes than us. Their economies are stagnant because of the tax burden.
If we exported much more the inflation rate would soon bring us back to the stagflation of the 70s.
Taxes are cash outflows......and are no different than other factors of production. Profit planning is sophisticated, and immediate, mid and long range. Any absorption rate that does NOT include taxes is just WRONG.
LOL! I have no need to say anything further as you have just made my case for me! Thank you!
Exports are BAD! LOL!
I guess he's given up on this silly assertion.
See my #660 in response to your #608 as some of the answers are there and I see no need repeat them.
You don't seem to have read HR25 or, if so, you seem to ignore some of it. One of the precepts of the bill is that there are no exemptions or esceptions but instead certain specific provisions with the prebate being one. That prebate is clearly defined. Exempting certain products and/or charging higher or lower rates are nowhere part of the picture.
You merely presuppose such things can automatically and quickly and easily be dumpted into the bill and fool us all --- SHAME ON US!! if we let that happen. That's what votes are for and perhaps making some wholesme changes in the COngressional makeup is indeed in order.
One reason the IT is so screwed up is the fact that it is an IT replete with all the government control that allows with easily-hidden provisions stashed away out of sight of the voters (you and me).
Even your check stub doesn't tell the whole story due to ehat I mentioned in #660 but also to increased prices caused by the IT's operation. And that does not include compliance costs or non-compliance/evasion revenue loss. Even self employed do not see all their tax burden - it is virtually not possible.
Spending is another matter and needs to come down, certainly, but that is an issue that must be addressed by spending bills. Once taxpayers clearly see their entire tax burden, I believe they will more than likely make their wishes knowm to the pols. I think, too, that the pols will respond since they wish to keep their jobs.
Agreed. But having everyone have to pull green money cash out of their pocket daily to feed the government beast will make us all a lot more sensitive to taxes and hence spending.
This tax bill, although not a spending bill, will indeed affect spending...JMHO.
See my post #660 that addresses these things you call "major problems". They aren't.
Thank you for taking the time to write it and for being willing to suffer these fools so graciously!
So ancient_geezer's prescription for Economic Happiness is to just RAISE everyone's wages. LoL. If only.
Interesting how you take the hypothetical scenario and claim it to be my position, That my friend in out of context as well as an attempt to raise a strawman.
The point of my reply being reduction of tax related overhead costs on business is the occasion for increased efficiency and productivity resulting in rising purchasing power for the household, how ever it may manifest, whether it be in price reductions, implementation of technological improvements in production of product, increased wage, return on investment to the stockholder/retirement account, and/or any combination of the forgoing.
Consumer electronics price reductions fit quite well into the economic models we have. NONE of those reductions had anything to do with tax policy.
Tell us then, what is the difference in reduction of costs from a tax relief from reduction in cost from other factor that make a difference in how that the savings in reduced costs will be applied in the quest of highest profit?
Your worst case scenario is not even close to what I foresee which is wages going up but prices going up more.
On the basis of what? Manufacturing and business overhead costs fall with the removal of the tax system currently in place misdirecting resources into economically sterile activites taking away from productive capacity.
At any rate companies select outputs to maximize profits and that will not change under FT.
Obviously, and they maximize profits by striving to find that equilibrium price that yields greatest profit, not highest possible price or wage in competative markets.
They would select the same point of production since maximum After Tax Earnings are achieved at that point whether we are taxed at 38% or 0%.
You are overlooking the fact that a change in how tax is collected is what actualized reduction of overhead costs, not changes in tax rate. Repeal of the tax system results in lower overhead by removing the misallocation of resources into non-productive tax related activities.
The increase in overall purchasing power of the individual (wage earner, investor etc.) arises from the reduction of overhead costs, as the tax revenue burden on the economy remains constant in a revenue neutral tax reform. It is the reduction of tax related overhead associated with the system replaced that gives rise to increased purchasing power by fostering more efficient and productive utilization of production facilities and resources.
While the desire for transparency is laudable we are still faced with the fact that many pay no income taxes and they will essentially pay no sales taxes after the rebates etc. are implemented. This means the drive to spend other people's money will still dominate domestic politics.
You are overlook a simple factor that operates in human behaviour. It does not matter what the source of dollars coming in is, source is disconnected at the point of expenditure where the tax itself is visible. That visibility, sticker shock for lack of a better term is the dominant factor that will drive voter percptions, not the fact that it may all net out in the wash.
And it is a singular irony that it is in the higher income and higher taxed locales which are most supportive of bigger government and higher taxes.
More often that not said locales are also the haunts of inherited wealth more than earned wealth. The latter folks remain accutely aware of the burdens extract from them. The former will indeed not change much in there ingrained habits and often guilt/status driven concerns to support the causes of government, not to mention they are also often the same folks who are inimately enmeshed in the halls of government to the point where government growth is seen as advancement of there own power and fortunes.
Fortunately that group also represents a very small sector of the voting population and their main hold in power in government is their ability to have dominant say in policy in the face of apathy and and fostered ignorance of the general electorate that has been possible under the current income/payroll tax system:
| "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." |
Taxes are cash outflows......and are no different than other factors of production.Income taxes are different. They are not required to producing anything. They are not a factor of production.
Profit planning is sophisticated, and immediate, mid and long range. Any absorption rate that does NOT include taxes is just WRONG.I assume the point of a profit plan is to figure out how to make as much profit as possible? How would paying an income tax affect this goal? And how would it affect the price a company gets for it's products or services?
I guess he's given up on this silly assertion.It's not silly, it's basic microeconomics (really basic). Go pick up a text book (and read it).
Taxes are cash outflows......and are no different than other factors of production.Dividends are a cash outflow. Are they a factor of production?
You've said you don't understand it so I see no need at all to educate you. You may have to continue on in your blissful ignorance.
If I decide to, I'll be sure to let you know. I'd rather stay on the main intent of the thread - trying to educate peoplr about the FarTax.
Although I've been through the econ courses as many of us have, the real world is the true text. Words on pages make for interesting thoeries, but not so accurate sometimes.
My price would be way less if not for the taxes (income taxes included) I pay. There is absolutely no refuting that. Maybe I misunderstand your assertion - it is absurd as I understand it - that income tax is not paid from my sales revenues and does not affect my price.
You have pointed out nothing other than your inability to come up with sensible or understandable arguments for your position. Any comprehensible point has been responded to by me without the slightest "evasion"
You have made it clear that you don't have the slightest knowledge of economics in practice or in theory.
My heart will not be broken by your flight.
There is no book necessary to understand that my price must include all of my costs if I'm going to make my required return.A text book would tell you that income taxes are not a factor of production. Whether you pay them or not, it still costs the same to produce your products. Businesses are not able to price their products based on their "required return."
My price would be way less if not for the taxes (income taxes included) I pay.So you price your goods or services based on what you need, not what you can get? So you don't believe in maximizing profits.
I have described how profit is a residual and it is on this residual that income taxes are calculated. Income taxes do not enter into the calculations determining the cost of the product. However, the costs of determining the profit and income taxes ARE true costs as they are there whether there is a tax paid on not.
Prices are determined by market conditions thus one can never know whether there will be a profit or not. If the market does not allow a price high enough for a profit then there is no tax. Hence it is not a "cost" as are the components of the product which have been paid.
By your logic income tax would be a cost if there is a profit but NOT a cost if there is none. Hence it cannot be compared to a true cost which is a cost in either case.
You've said you don't understand it so I see no need at all to educate you. You may have to continue on in your blissful ignorance.I'm beginning to think your hesitance is because there is no "cascading costs" and is, therefore, impossible to illustrate. Is that it?
If I decide to, I'll be sure to let you know. I'd rather stay on the main intent of the thread - trying to educate peoplr about the FarTax.
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