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.
... there he goes again ... trying to mis-frame what was being said.
Are you trying to argue that income taxes have not been embedded in some way into the costs going into the next level of production?
I see nothing to suggest that the discussion was about profit mazimization so the quiant little formulas of digitaleconomist do not apply so it's hard to understand why you throw them out except to put a little more of your mud on the wall.
Another red herring!
Are you trying to say that your pose #835 is not an endorsement of the IT when you say "As I have stated before, the Fairtax would reduce my current costs by about 4% and that is without considering any additional taxes imposed on my overhead costs including rent, advertising, utilities, fuel, and capital equipment. And without adding the NRST back on top of my prices."?
Sure sounds exactly like that to me, but of course I'm stupid. I don't even know what you refer to when you talk of "other options on the table". I take that to mean realistic ones ... what might they be? The Nightmare VAT/Flat perhaps?
Also, the "automatic" raising you mention to accomodate skyrocketing liberal spending is nowhere in the FairTax bill. There's no point in fighting the spending battle until the tax system can be brought under control since with the IT, the tax-raising can easily enough be hidden by a great variety of means - and the citizens needn't know so they blame the pols (as obviously you don't).
That's easy to see by thoroughly - not selectively as is your wont - reading all the papers and links on the FairTax website:
http://www.fairtax.org/index.html
Depends upon the definitions used but this thread is not about either "optimum price" or "equilibrium price" or "profit maximization".
It's about TAX LAW!! Never mind your red herrings.
So - what's your poin in this post???
Another off-track exercise it looks like.
Gosh, are you retarded or something? Just where in my post do you see the income tax mentioned?
Sure sounds exactly like that to me, but of course I'm stupid.
As you demonstrate again and again.
I don't even know what you refer to when you talk of "other options on the table". I take that to mean realistic ones ... what might they be? The Nightmare VAT/Flat perhaps?
Proud of your ignorance are you? You can remedy it at www.taxreformpanel.gov, if you are not afraid to do so.
Also, the "automatic" raising you mention to accomodate skyrocketing liberal spending is nowhere in the FairTax bill.
I suppose another demonstration of your ignorance must make you feel really good.
See Section 101 at http://www.govtrack.us/congress/bill.xpd?bill=h109-25 and then read the definition of the annual rates to be determined by the Social Security Administration. You might also want to read the section on the (at least) annual meetings to “improve” the system.
There's no point in fighting the spending battle until the tax system can be brought under control since with the IT, the tax-raising can easily enough be hidden by a great variety of means - and the citizens needn't know so they blame the pols (as obviously you don't).
Given up already, have you? Yes, the NRST is for those who have already surrendered to the socialist state.
There's no way to tame the spending beast under the income tax, flat or graduated.
Not using the phrase "income tax" is certainly no excuse for trying to pretend you're not attempting to defend it by trying to attack the fairtax. Looey and several others have been trying that for years and have never been successful. You won't either.
I've spent extensive amounts of time reviewing the Tax Panel papers AND resulting comments as have several others. What I find to clearly be the case is that the comments on the 2nd request name the FairTax more than any other single tax plan - by far. The VAT (and no Nightmare VAT is even offered) and/or Flat (and again, No Nightmare Flat is offered) receive a relative few comments plus a few othe marginal plans. It is clear than many Americans are "getting it" about the benefits of the FairTax even if some of you SQL-folk on this thread do not.
As for "automatic increases", read the bill again yourself. The Sec. 101 you refer to is about:
SEC. 101. INCOME TAXES REPEALED.
Subtitle A of the Internal Revenue Code of 1986 (relating to income taxes and self-employment taxes) is repealed."
It says nothing about the SSA determining your rate. NOTHING.
The spending battle will really begin after the FairTax is in place, not before.
"
And once again you demonstrate that you've never read the bill and are too stupid do a search of it.
"Given up already, have you? Yes, the NRST is for those who have already surrendered to the socialist state."
Sounds like Bruce Bartlett's advocacy of a VAT to me.
If one of us is "nuts" , friend it ain't me. You're the one who mentioned Section 101 and it is nothing like what you were referring to. If you intended something else, be specific since there's no point in my guessing what you mean.
... or perhaps you non't even KNOW what you mean ...
Not the section number, dumbass. Try addressing some content for a change.
You're kidding, right? This tells me it's been a really long time since you've opened up an economics book. That slope is for illustration only. That is very common when describing economic theory."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.No, it says that demand is not a factor in profit maximization. That happens when marginal revenue equal marginal costs.
That is because, as the above quote illustrates, this model is based on making labor the variable input factor and holding other factors constant.The quote above discusses how they "defined the profit maximization condition with respect the variable factor input" when they were "describing a producer optimum" on a completely different page! The page I linked to page isn't discussing "variable factor inputs."
"What business buys to produce a product."
Endless regulation to define a business and materials for producing a product. Legitimate business expenses are not now taxed so there is no change there. But defining these expenses requires pages of rules, regulations, and definitions. You've gained nothing.
"If it's sold in the US for retail consumption and it's never been taxed, the tax is due. The tax is collected at purchase. I don't know how items could be "diverted"."
Anything can be diverted. How do you know if the tax has been paid without documentation, ie, a tax stamp?
"This is secondary though. The amendment in question does indeed repeal the 16th - and it goes further to make unconstitutional the taxation of any type of income."
You mean the 'proposed' amendment.
"One obvious and completely predictable effect would be an exponential increase in enforcement costs. Can you imagine the bureacracy that would have to keep up with paychecks as reported by employers vs. tax remittances coming in from individual taxpayers?"
Nothing new. It's done now. Just try to run a business without following the law on witholding.
"That is not the conclusion that the President's Tax Reform Commission arrived at after about 3 months of hearing testimony from witnesses and inviting comments from Americans all over the country."
Well, of course not. Their mission was not to reduce taxes but to find a better way to collect the same or more taxes. I don't want to pay the same or more, I want to pay less.
"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."
Oh, but I have and I don't want a 'revenue neutral' form of taxation. I want less taxation. BTW, you'll only replace the IRS with another equally powerful and intrusive bureaucracy.
"It certainly would be repealed in short order ... especially once citizens tasted the benefits of the FairTax."
Reminds me of what they used to say about the income tax. It's only for the current emergency. We'll repeal it after the War is over. It will only affect the top 5% of wage earners and it will never be more than 2% of income. Yeah right.
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