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.
Yeah riiight, why don't you show me an example of my "circular logic" or where I "evaded" any question or comment?
ONce again you elide "income taxes" into "taxes." This can never allow an accurate understanding of their impacts or natures.
Absolutely no need for that as this very thread is loaded with such examples for ALL to see! I'm happy to let them see for themselves.
Light bills are based upon a rate which is known before hand as are copier costs. Though I know you don't like it they are easily calculated because you know all the variables in the equation. You know the amounts the rates are applied to thus the total bill.
You do not know if there is a profit until the accountants do their work at the end of the year thus you do not know the income tax. However, that has not had the slightest effect on the determination of the price of a product as have all other costs.
It is not sales revenue which determines whether a profit is earned or tax owed. One must have the cost picture completed before profit, a residual, is known. Let's say you owe no I.T. on sales of 1 billion then the next year sales double to 2 billion. You still cannot say whether there is any profit or tax just from that information. (Although I never said that I.T. "cannot be paid with sales revenue" in any case.)
In realty 'cascading costs' = 'cascading profits'. They assume that each business adds a percentage profit on to their business taxes at each phase. Of course business taxes are only a small portion of the total tax bite, so they grossly overstate the impact of this alledged effect. The bottom line is, these are fudge numbers their economist use to create a benefit (lowering prices) while hiding any negative impact (ie, reduced profits). Their economists have unique methods of creating benefits out of thin air. The truth is their numbers don't add up.
In the first place "most" of Ford's customers were NOT Ford employees. No business could survive for long if that were the case.
In the second place I would say that the onset of WWI had a great deal to do with Ford's success at that time rather than his paying a higher than usual wage.
In the third place there are certainly reasons to pay your workers well: higher morale and productivity, less turnover in the labor force and lower costs of retraining etc., but the fact is that unless the marginal revenue product of the worker is higher than the wage rate the company becomes unprofitable and goes out of business.
And you evaded MY question.
So embedded taxes ARE small! Thank you for clarifying that for me. All along I have been told otherwise.
Just the thing to ensure a fluorishing black market (if the 30% exclusive rate won't do just that).
It may also tell me many other unrelated things. I don't care what you call it, it makes me charge more.
That is not what I said but I wouldn't expect accuracy or honesty from you. When someone who actually knows something about Economics tries to argue with someone who doesn't that is the kind of nonsense one must expect.
Such comments are the reason your side doesn't convince anyone who has actually studied these issues and cannot be convinced by mere rhetorical rodomontades. It takes honest and careful analysis something your friends are singularly incapable of doing.
By my real world experience, income taxes make me charge more than I would without it. Is that in opposition to your position?
It's good you're beginning to think (if you are) - and you're certainly welcome to think what you like.
Since you don't understand it and can't conceive of it, don't worry about it since as someone once "what you don't know won't hurt you".
I rather think that depends upon what you think "small" might be. I was using the poster's number of 30%.
This is what someone says when they have no idea how to explain it. You can't explain it and quantify it.
If you don't pay income tax, is it a cost?
Beyond that li'l gem, there are costs that business pays even if their income tax liability is zero.
Income taxes are based on rates which are known before hand too.
Again, for the fifth time, according to the IRS, Business Taxes are under $200 Billion. According to NIPA, US consumption is at about $8 Trillion. Only the fuzzy math of Fair Taxers tell us that $200 Billion is 30% of $8 Trillion. No one can refute these facts. From what I can tell, you are about $2.2 TRILLION short from telling me where all these costs reductions are coming from so businesses can lower their prices to offset your 30% tax.
That's not right. You don't know the amount of usage. Also, in some places, the kwh usage changes depending on usage level. So besides not knowing the value to use for the variables, you don't know which variables will be used in the calculation of your light bill.
How is it again that the light bill is an expense paid from sales revenue, but income taxes aren't paid from sales revenue? BTW, if the money to pay for income taxes doesn't come from sales revenue, where does it come from? Of course profits come from sales revenue too.
I cannot definitively state the value of division by zero either. Neither has anything to do with the fact that income taxes force my prices higher.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.