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.
My error - I stand corrected. Can't come too soon to suit me.
From an economic standpoint, the FairTax is the most thoroughly researched tax proposal ever put forth in this country.We've been through this before. This is a statement without proof. Maybe you would like to list economic studies of the FairTax.
This is a statement without proof. Care to list the times you've been through this with Philwill1.
BTW, are "liabilities" paid with money from sales? From what pile of money are business income taxes paid anyway?
Good to know that income taxes are not a cost ... I'll have to fix that in my computer since it generally thinks that writing checks is associated with costs. Dumb computer.
In our present tax system it does not hold true universally that those with higher incomes pay taxes at higher rates - despite the theoretical notions you offer. In fact, some with incomes (even high ones) pay no taxes at all, so I'm afraid your points aren't too well founded.
Incorrect. The optimum price is achieved at the intersection of the supply and demand curves.No, that's the equilibrium price. A business's point of profit maximization occurs when their marginal cost of production is equal to the price they get for their products.
In a nutshell, it is a LOT easy to fire a state worker for abuse of power, than a federal worker, making the Fairtax system much more cleaner.
easy = easier
You've missed the key point (of course) looey - it is:
"...the compensation for collecting the Fair Tax that would be provided to states under H.R. 2525 would likely cover our projected costs ...".
You had every opportunity to read and understand what was being said and yet STILL tried to warp its interpretation to be something different that what was actually said.
I won't even comment on your erroneous looey-rithmetic aside from just mentioning it. Those interested can waste their time fiddling with it.
"BTW, a business's profits are considered maximize when 'the revenue from selling one more unit of output is exactly equal to the cost of producing that last unit of output.'"
From the link:
"In describing a producer optimum, we have defined the profit maximization condition with respect the variable factor input (labor) as:"
Please note on the graph that the revenue line is a straight 45 degree angle from the graph axis. IOW, there is a one-to-one relationship between price increases and revenue changes, which is to say that the elasticity of demand is ignored. That is because, as the above quote illustrates, this model is based on making labor the variable input factor and holding other factors constant.
IOW, this is a deliberately simplistic model to isolate a single variable and analyze it. This isn't the real world, nor is it intended to be.
This is coming from the same poster who just a couple of posts above made a comment about how FairTaxers don't understand economic principles. Then he posts a quote out of context and attributes relevence to this thread which clearly its author would not have given it.
Amazing. Such arrogance and incompetence combined. I would suggest you stick with graphic design, YN.
Now they're calling income taxes a "liability".... I still haven't gotten an answer on if and how they are paid... they may still be saying that they aren't paid with revenues from sales... anticipating that, I've asked them where the money to pay "liabilities" comes from... it's really absurd....
And they wonder why their posts are parsed...
You haven't paid attention to what the FairTax bill does. It not only creates a workable, simple revenue neutral system, it also eliminates the portions of the tax code relating to income tax in addition to de-funding the IRS and requiring all iT records to be destroyed.
Years ago when the Brits were getting rid of their first IT, gleeful bonfires were held by the citizens to do the burning of such records. Perhaps we should do something similar so you naysayers will be able to realize that the IT has died a very deserved death. The 16th amendment repeal is merely a stem to help make it harder to return.
The real killer, though, for the return if the IT is the preference of the American people for the FairTax once they have tasted its many benefits. If you think a simple majority vote would bring back the IT, you are quite mistaken or merely one of he naysaying fearmongers on the thread that cannot conceive of something they have not known in their lifetime - freedom from government oppression via the income tax.
ANd he wonders why everything he posts is questioned and parsed.
Thanks pigdog, I omitted this from the other formidable obstacles to having both taxes that will only exist by passing the Fair Tax.
After all, how difficult would it be to recreate all of the requiste forms and infomration AND get everyone to agree to fill them out...after they were erased when the income tax code was erased?
BTW, are "liabilities" paid with money from sales? From what pile of money are business income taxes paid anyway?From wherever the busines gets it revenues so it could be sales, but so what? That doesn't make it a cost of sales or production. According to your logic, no business could make a profit because everything is a cost of production.
Since a service business has no "factors of production", does that also mean that it has no costs?[cough]labor[cough]
I think in some respects you have the cart before the horse. Certainly spending is a horrible problem, but the FairTax is a tax bill, not a spending bill (nor can it be). To repeal the 16th, there must be an practical tax bill in operation else you'd be exp[ecting the Congresscats to eliminate the taxes on income with no replacement - very few in Congress are THAT foolish (and if so, they deserve to be ousted).
So trying to get rid of the 16th first cannot possibly happen while once the FairTax is operating as a revenue neutral tax bill, the 16th becomes an anachronism much like the Prohibition amendment and serves no useful purpose. It certainly would be repealed in short order ... especially once citizens tasted the benefits of the FairTax.
Also, I think you missed the point that the FairTax REDUCES the costs of exports - no tax stamps required since the exports are not taxed.
"... squawking the loudest ... ignorant of basic economic principles ..."???
Those who live in stone houses shouldn't throw glasses.
Seems I recall you're the one who (not so long ago) was arguing for a Nightmare VAT/Flat tax which existed only in your mind in theory and which you refused to delineate in any detail. That qualifies you on both of the above counts.
Off-base again, looey ... see post #929.
YN: From wherever the busines gets it revenues ...
For hundreds of replies on this thread, you have been saying that business income taxes do not make prices higher because bus inc taxes are not a "cost" and since it's not a "cost", it cannot be included in prices. You say this as a result of refusing to agree that income taxes are anticipated and built into pricing and collected in sales revenue...and that income tax on business does not inflate prices. The question still remains then... where does the money to pay the "liability" come from? Until now, there has been no answer - deafening silence indeed.
Quite the absurd postion, yes. Perhaps that's why you now say well, they're a liability and are paid with sales revenues after all!
Eyes Rolling.
So you now agree that business income taxes ARE paid with revenues from sales.... drum roll... are you still saying that business income taxes don't make prices higher (not holding breath).
At least you've already agreed that other costs, er uh, liabilities ARE included in prices, so this is progress.
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