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 do no disagree with this as far as it goes but I would assert the there is plenty of room for production capacities to increase given the right incentives for it to do so. All of this however has very little, if anything, to do with the subject of this thread.
Companies can remain in business without profits for as long as they have assets to convert to cover the difference between revenues and costs. Short run unprofitability is not uncommon.
I do not disagree with this either but would contend that NO company sets out to not make a profit and thus any company which fails to take the prospect of taxes on those profits into account in setting prices is quite foolish regardless of whether or not they actually make a profit!
That's my position too. So why can't I pay my income tax out of sales revenues? Or are you now saying I can, since my businesses are "small". Aren't small business the vast majority of our economy?
If these status quo defenders (and even those on the Panel talking like this) would bother to check they's soon see that the 133 countries that have the VAT (I believe one of the SQ defenders on the thread claimed), they'd soon see that almost all of them also have income and sales taxes PLUS the VAT.
Even the Nightmare VAT/Flat guy likes to pretend that's not true and wouldn't even check the links I gave to show that to be the case. The links were in #97 on this thread:
http://www.freerepublic.com/focus/f-news/1401516/posts?q=1&&page=97
If you'd like to know the typical experience with a VAT, for example, here's an editorial from a Phillipine Star by Federico D. Pascual, Jr.:
* * *
"VAT DIDN'T WORK: Then there is also the VAT, the value added tax. Its aggressive proponents were saying VAT would vastly improve tax collections because of this and that reason.
VAT was all theory gone haywire. It looked good in textbooks and in the lecture notes of some foreign experts, but was never adapted to the Filipino's psychology and his human situation.
Garcia also warned that, as written in the law, VAT would not work as envisioned. Sure enough, it did not work.
The imposition and collection of VAT is now one big racket: Everybody claims dubious tax credits and reduces his tax payments, depriving the government of legitimate revenue.
Nobody keeps track of the cascading tax credits at various levels from the sources of raw materials, to the manufacturers, the merchants and all the way to the consumers.
Stores and business offices, especially the small ones, give the consumer a choice of asking for an official receipt and paying 10-percent VAT or foregoing the receipt and getting a hefty discount (discount meaning “no VAT”).
This is merrily going on in full view of a lazy, corrupt bureaucracy.
Will President Arroyo, who seems to be on her uneasy way to a full six-year term, let this tax drain called the VAT stay as is?"
* * *
Don'cha' just love that "... all theory gone haywire ..."???
Maybe he doesn't know how to spell it?
With a light bill, you can't plug in the KWH until the bill arrives. Nor can you always know what rate is being used, as the rates vary for a number of reasons.
With a copier bill, you can't plug in the # of copies until the bill is arrives either.
So how is it different besides being it being something you want to think isn't paid with sales revenues?
Put your texbook away for a moment.I'm in the real world - why don't you join us? I'm not confusing any variables.
I'm telling you that I would charge less if I didn't have to pay income related taxes and costs. You haven't argued with that yet.....
The definition is wrong then. Because my income tax is a cost I pay with sales revenues.
It boggles the mind. How could anyone think income taxes are not a cost? It must be that they've lived in a textbook for so long that they only remember book definitions that don't happen out here. Seriesly, how could anyone who lives in the real world think that a tax bill isn't cost??? Really?
OK, one more time, how does your plan save business owners 30% so they can reduce their costs to offset your tax? Are you telling me you guys never say that prices are not going up. I just want some hard numbers to show me how on earth this is possible. So far all I have gotten is elimination of business taxes and compliance costs. Is that the story you are sticking to? If so you are almost a couple trillion short. I know what 30% of $8 Trillion is, but you guys certainly don't.
The problem with that is that 99%+ could not give 1 hoot in hell about micro, macro, or any other theory! What they know is that the income tax is HIGHLY intrusive into their private affairs and HIGHLY unfair to those who earn legitimate incomes. They also understand that, regardless of what any economic theory might suggest, that the money to pay taxes, and the costs of complying with them has to come from somewhere or they are out of business!
Guess you missed part of the sentence - you're getting more like looey all the time.
Somehow I knew that would be the case. Don't know how I just knew it!
you're getting more like looey all the time.
You're more like principled...
Guess you missed part of the sentence - you're getting more like looey all the time.No. The same product in different markets was an illustration of how off y'all's theory of pricing is.
You keep wanting to leave off part of the sentence. But, no, that's not what we were discussing.
You'd better get back to your Nightmare VAT/Flat cycle of repetition. At least it was more entertaining.
That's no insult at all, looey - quite the opposite.
It's been done a gazillion times, but each time you omit/gloss over/miss the parts you don't seem to understand.
So far all I have gotten is elimination of business taxes and compliance costs.
Wrong. Business taxes and compliance costs (90% of them anyway) will go away. But that's not all. It is incomprehensible that you don't remember any of the other costs that are going to be reduced or eliminated. You really think someone is telling you that $200 billion is 30% of $8 Trillion? That would be stupid. Of course nobody is saying that.
Of course some products have more federal tax-related costs built in than others - not all are the same. Generally speaking the more links in the chain of production, the more federal tax-related costs are built into the price.
You keep wanting to leave off part of the sentence. But, no, that's not what we were discussing.We are discussing pricing. I'm sorry if you don't understand the Third Degree Price Discrimination illustration. But it's OK. I don't understand "cascading costs".
he he ... hands behind back, shuffling toetips...
shucks
Perhaps you'll soon be up to studying his advanced course in taking things out of context and posting them.
That's another of your incessant lies, otherwise you'd include you're usual post # for reference.
Weren't you the one saying something about posts not relevant to the issue?
I'd rather stay on the main intent of the thread - trying to educate peoplr about the FarTax.
Fraud.
I understand enough about the link you posted to see that it is an off-topic red herring which you keep trying to drag into the thread.
It's not what was being discussed no matter how you try make it smell like a rose - it's still a red herrring.
If it pleases you to keep saying you don't understand cascading costs go right ahead and get it off your chest. That much is clear from your postings.
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