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.
Over and over I have told you the payment comes from PROFITS. PROFITS. PROFITS. PROFITS.
Lol can't recognize scarasm either it looks like. That is the way you TREAT those who do not have FAITH in the FT.
Because it will be seen as a 30% addition obviously. "Well Joe that will be a dollar plus thirty cents." NO one will see this in its Inclusive form. Another reason it will never happen.
LOL, whatever YN. It is a distinction without a difference.
Thus the need to amend the Constitution! LOL!!!
LOL, indeed, as the reason the 16th was proposed was as political ploy gone bad and and supported as political cover not Constitutional necessity. As history of the proposal for the 16th amendment clearly shows, which was only proposed as an impediment to a proposed full fledge income tax, the 1909 Bailey Bill, that was well on its way to enactment without a 16th amendment in sight.
| The Bailey Bill In April 1909, Senator Joseph W. Bailey, a conservative Democrat from Texas who was also opposed to income taxes, decided to further embarrass the Republicans by forcing them to openly oppose an income tax bill similar to those which had been introduced in the past. He introduced his bill expecting it to get the usual opposition. However, to his amazement, Teddy Roosevelt and a growing element of liberals in the Republican party came out in favor of the bill and it looked as though it was going to pass. Not only was Bailey surprised, but Senator Nelson W. Aldrich of Rhode Island, the Republican floor leader, frantically met with Senator Henry Cabot Lodge of Massachussetts and President Taft to work out a strategy to demolish the Bailey tax bill. Their own party was split too widely to permit a direct confrontation, so the strategy was to pull a political end run. They announced that they favored an income tax but only if it were an amendment to the Constitution. Within their own circle, they discussed how it might get approval of the House and the Senate, but they were quite certain that it could be defeated in the more conservative states-three-fourths of which were required in order to ratify the amendment. Thus, the Democrats were off guard when President Taft unexpectedly sent a message to Congress on June 16th, 1909, recommending the passage of a consitutional amendment to legalize federal income tax legislation. The strategy threw the liberals into an uproar. At the very moment when their Bailey bill was about to pass, the Republicans were coming out for an amendment to the Constitution which would probably be defeated by the states. Reaction to the Amendment Congressman Cordell Hull (D-Tenn., and later Secretary of State under FDR) saw exactly what was happening. He took the floor to excoriate the Republican leaders. Said he: "No person at all familiar with the present trend of national legislation will seriously insist that these same Republican leaders are over-anxious to see the country adopt an income tax...What powerful influence, what new light and deepseated motive suddenly moves these political veterans to 'about face' and pretend to warmly embrace this doctrine which they have heretofore uniformly denounced?" {1} He went on to expose what he considered to be a political trick. He needn't have been so concerned. The slogan of "soak the rich" automatically aroused Pavlovian salivation among politicians both in Washington and the states. The Senate approved the Sixteenth Amendment with an astonishing unanimity of 77-0! The House approved it by a vote of 318-14. When Republican Congressman Sereno E. Payne of New York, who had introduced the amendment in the House, saw that this end run was turning into a winning touchdown for the opposition, he was horrified. He went to the floor and openly denounced the bill he had sponsored. Said he: "As to the general policy of an income tax, I am utterly opposed to it. I believe with Gladstone that it tends to make a nation of liars. I believe it is the most easily concealed of any tax that can be laid, the most difficult of enforcement, and the hardest to collect; that it is, in a word, a tax upon the income of honest men and an exemption, to a greater or lesser extent, of the income of rascals; and so I am opposed to any income tax in time of peace...I hope that if the Constitution is amended in this way the time will not come when the American people will ever want to enact an income tax except in time of war." {2} The end run of the Republican leadership did indeed backfire. State after state ratified this "soak the rich" amendment until it went into full force and effect on February 12, 1913 |
See also:
Over and over I have told you the payment comes from PROFITS. PROFITS. PROFITS. PROFITS.
Geee, I could'a sworn them "PROFITS. PROFITS. PROFITS. PROFITS" came from "SALES, SALES, and more SALES."
"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."
So you are only considering the taxes themselves and not the inefficiency of the system that is used to collect them. IOW, you are interested in tax relief, which is a completely separate and distinct issue, rather than tax reform. In addition, if there were a way to save American taxpayers hundreds of billions of dollars collectively in compliance costs, that would be of no interest to you, either, since that would not, in and of itself, change the total amount of taxes that you pay.
"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."
Not really. Businesses make expenditures for two basic purposes
1. personal consumption, typically on behalf of employees, or
2. business purposes.
That distinction isn't hard to make at all. It doesn't require "pages of rules, regulations and definitions".
Judging from the number of pages in the two systems at present, you would gain about a 99% simplification. You may consider that "nothing", but I don't think most people would agree with that.
"I never argued that such a tax scheme would not have lower compliance costs. That is not my worry but the unintended conswquences of imposing a 30% tax given that there is a psychology of the consumer to deal with. But the crushing effect on Big Ticket items is the killer."
So you fully support a system which provides an advantage to foreign producers at the expense of our own domestic producers, sending many thousands of jobs overseas in the process? You believe that, as a matter of public policy, that is what our tax system should be about?
"My understanding of the "model" allows me to see through the inchoate quality of the FT. And it allows me to correctly interprete economic and financial events."
That is wonderful. Can you tell me, then, what will happen to our trade deficit if we continue with a tax system which puts our producers at a disadvantage to every other producer in the world in a marketplace that is going increasingly global? The trade deficit is already over $600 billion/year and, at current trends, should be over a trillion $$ in a few years.
"Since you obviously believe that an income tax is a 'cost' tell me what is it that is costing? What are we paying for with an income tax? What is it that can at times cost NOTHING?"
You are paying for the opportunity to earn an income in a society that is reasonably stable, has a stable currency, a reasonable level of physical security, a legal system that protects against anarchy and chaos, etc., etc.
We Fairtaxers deal with economic realities VERY credibly I would say but disingenuous, elitist, SQL types such as yourself, are another matter entirely.
Oh! One more thing! I, and many millions of others around these parts, have NO intention of just shutting up an taking it any longer!
And over and over you have been asked where PROFITS come from if not sales receipts you twit!
LOL, indeed, as the reason the 16th was proposed was as political ploy gone bad and and supported as political cover not Constitutional necessity.And 2/3rds of each house and 3/4ths of the state legislatures just played along! Please... you're sounding like a tax kook.
who also is in the SQL, or Status Quo Lover, modeFunny, I thought that was either an abbreviation of "Structured Query Language" or was short for Squeally.
And 2/3rds of each house and 3/4ths of the state legislatures just played along! Please...
Oh they were more than happy to go along, to tax them rich guys donch'ya know.
! Please... you're sounding like a tax kook.
And you are a bit hysterical, a paucity of material perhaps?
When you know longer have a reasoned argument, labels and names work too I guess.
| Genworth Financial Income Tax...Just Whose Idea Was It? Frankly, there are few people around today who can remember when there was no income tax. For many of us they've been a fact of our economic lives. Something to complain about. Something to try and minimize. Something most of us can't even begin to understand. And, something we're reminded about with every paycheck we receive, and every tax return we file.
So, how did we end up with the income tax? |
Income Tax...Just Whose Idea Was It?Totally irrelevant to our discussion. "Who" was not the issue. I guess you just couldn't help yourself.
Sales (or revenues) are not equivalent to profits. Revenues can skyrocket while profit plunges as revenues can plunge while profits skyrocket.
Fundamental misunderstandings of such basic points and no knowledge of pricing will assure that FT is never passed.
That is another falsehood produced from a lack of understanding of economics and pricing. Incomes taxes do not figure into a product's price and therefore do not affect foreign trade.
Foreign products pay the same sales taxes when sold here. And the other taxes paid are HIGHER than here. Why do you think Europe is in economic doldrums and has unemployment rates over 10%? Its version of the FT (VAT) does not help either.
We have about as low an unemployment rate as can be produced without inflation. It is so low that millions swarm across the border each year for a little piece of the pie.
However, you are right about one thing, the collapse of the American economy resulting from the FT will hurt Europe's exports to us.
Yep, you just need to look at the airline and auto industry to see that. I can imagine what fun it would be to take a loss on a sale and still have to remit 30% to the government.
One must understand a little International Economics before one can comprehend what a Trade Deficit was. That is an archaic term applicable to the era when there was a specie based monetary system of fixed exchange rates. Under that system when a country imported more than it exported specie (gold, silver) had to be surrendered to pay the difference. This was the typical condition of the US until the 1870s.
Since 1973 we have not had fixed exchange rates but floating exchange rates with no specie backing for the dollar. This means we have NO "trade deficits" anymore. NOW we exchange dollars for goods. These "deficits" are actually a measure of economic health and only possible when the economy is growing. We can tank the economy and watch those "deficits" shrink as the nation becomes poorer.
"Deficits" are a measure of relative wealth. At present it is about 6% of the GNP.
Our income tax system has no effect upon pricing and thus is not disadvantegous wrt the rest of the world.
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