Top 11 Secrets of a National Retail Sales Tax

Various | 6-10-05 | Always Right

[ancient_geezer]

If he has to drop the price 20% to get 10% more volume, guess what a rational businessman is going to do?

He will optimize his profit as will his upstream suppliers.

The consumer will go for the most he can get for his dollar, whether that be in taxfree earnings on his investments to increase income so he can live better in the future, or choose to purchase and be taxed now where the trade off is advantage to him today.

Just the way a competitive economy works.

[Principled]

But still I only see 8% of hard savings and a potential for 2-4% more.

Well I see more. Hell just eliminating the employer payroll tax is a good chunk. If you're self employed, it's twice as big a chunk. ANd it's for every link in the chain, passed up to retail.

[newgeezer]

LOL. Yeah, say it again.

The United States government was not set up to be in the business of redistribution of income. Charity is supposed to be charitable, not mandated by the government. Walter E. Williams says it a lot purtier than I do.

[Always Right]

Lets assume for simplicity that yes, the out the door price on a widget would go up 17%. Now, by what % is your take home pay going to increase?

I would say some will go up 20-25%, but others will go up 0. Some will be better off with a sales tax and others will be much worse. The ones who will really be hurt are those on fixed incomes and/or rely on things like Social Security Income.

[AzaleaCity5691]

For a $100 stereo, no.

For a $50,000 car, well, thats when things start to get real tricky.

[Principled]

You are saying that folks will look at their invoice - but won't look at their paystub? What kind of half-assed excuse is that?

No I wasn't. That would be the same stupid thing as today. Simply listing it isn't what puts downward pressure on taxes - it's having to pay it. Pay it by pulling $10s and $20 out of your pocket. Let me reprint:

But if witholding were gone and we had to pay taxes with cash out of our pockets, would it increase resistance to higher taxes?"

So how about a little more time reading and a little less on the choice words?

And I will call anyone who peddles this scam as a way to reduce the tax burden of the average working family a baldfaced liar.

Good. You should do so if you have any reason whatsoever for thinking it. Do you care to share any of them?

[Always Right]

That's a lot more than the "no record" claimed. If it were changed to "minimal record" then I would not argue with it. But as it is written it is a lie.

That's one of my biggest beefs with the 'fair tax' proponents. They make extreme claims that aren't true. They say they eliminate the IRS, technically true I suppose, but there is still a federal revenue collection agency, just not called the IRS. Is that really an improvement?

[Principled]

From this site:

Did you know that hidden income taxes and the cost of complying with them currently make up 20 percent or more percent of all retail prices? It's true. According to Dr. Dale Jorgenson of Harvard University, hidden income taxes are passed on to the consumer in the form of higher prices - from an average 22 percent on goods to an average 25 percent on services - for everything you buy.

The link has a quick faq, link to the bill, and other info. Enjoy.

[Principled]

Then what's your point?

I thought you had posted that someone was lying. I then said take it up with him. What indicates to you that I am defending him or desiring an argument?

[ancient_geezer]

Now tell me something, what do you think an El Pasoite would do in this situation. Stay in the good ole US of A and pay an extra $29, or, go shopping in Ciudad Juarez and get a great bargain.

Actually, the border patrol gets beefed up, cutting down on illegal aliens as well as assure the proper tax is collected or use and consumption of goods and services in the United States.

That my friend is a two-fer, gotta find jobs for all those laid off IRS agents you know. Border Patrol and Customs seems to be a profession right up their alley.

 

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

---

 

SEC. 101. IMPOSITION OF SALES TAX.

• `(a) In General- There is hereby imposed a tax on the use or consumption in the United States of taxable property or services.

*** SNIP ***

• (c) Coordination With Import Duties- The tax imposed by this section is in addition to any import duties imposed by chapter 4 of title 19, United States Code. The Secretary shall provide by regulation that, to the maximum extent practicable, the tax imposed by this section on imported taxable property and services is collected and administered in conjunction with any applicable import duties imposed by the United States.

 

[Principled]

Dream on. Better yet, try it on the Doctor and see what he thinks!

Strong, reasoned reply.

[Always Right]

Well I see more. Hell just eliminating the employer payroll tax is a good chunk.

That's a good part of the 8%. $350 Billion on the employer side, $350 Billion on the employee side. I did include the $350 Billion on the employer side only since the $350 Billion on the employee side will be pocketed by the employee. That accounts for 4.3% of the hard savings Businesses will see.

[coloradan]

10. Government Taxes Itself. One amazing thing is under the Sale Tax is that government somehow raises money by taxing itself. Whereas this is an interesting way to reduce government, it is typical of the smoke and mirrors the fraudulent analysis of the so-called fair taxers use.

Do government agents pay income tax? E.g. George Bush?

Yes they do.

Talk about fraudulent analyses.

[JeffAtlanta]

The simplest solution is almost always the best(pace, William of Ockham).

How is Flat Tax any simpler? The current system is very complex and just reducing the tax rate tiers doesn't make it any less complex.

[AzaleaCity5691]

That doesn't make it any better.

That just means people have no way to avoid being jipped.

Once again, the sane answer, is a flat tax, with an addendum that the law cannot be touched for 200 years, just to avoid the risk of reinvigorating the old system

[coloradan]

11. Auto and Housing Industry Hit Hard. As the luxury taxes have proven in the past, adding a large sales tax on item deters people from buying. In 1991, after the Democrats snuckered Bush Sr. into signing the Luxury Tax, Yacht retailers reported a 77 percent drop in sales that year, while boat builders estimated layoffs at 25,000. And that was only for a 10% tax! With new homes and autos having to compete against existing homes and used cars, paying the additional 30% sales tax will be hard to swallow for most consumers.

That was on top of income and business taxes, not instead of them which is the proposal at issue here.

Another fraud in your list.

[Always Right]

Do government agents pay income tax? E.g. George Bush? Yes they do. Talk about fraudulent analyses.

Government agents do, but not governments. If a state has 100 employees and pay them $1 billion, under the sales tax they will now have to come up with $1.3 billion to keep the same number of employees? Where does that extra money come from? Maybe it is a tricky way to try to get governments to cut, I would be all for that. But the reality is it will just lead to governments have to tax more to keep the same level of so-called services.

[Always Right]

That was on top of income and business taxes, not instead of them which is the proposal at issue here.

And that matters because? The purchase of yachts did not go down because rich people all of a sudden could not afford to pay the extra 10% because they also pay income tax, but they just saw it as a waste and could not rationalize throwing 10% down the drain. Many probably went overseas and bought yachts to avoid the sales/luxury tax.

[ancient_geezer]

My non-employed wife and kids each have a SSN. We all live in the same household. Do we each get a check, each for the same amount? It seems like the 'poverty level of expenditures' is different if we're all in one household vs. having two, three, or four.

In applying for it you designate one person in the household to recieve the check and list the persons in the household.

The monthly rebate is based on the HSS povertylevel tables for number of person in household, adjusted to assure the same amount is received for each adult to get rid of any marriage penalty that would otherwise be present.

Basically currently it works out to be about $178 per adult and $65 per child each month.

[Marak]

Been there - read it. I also think the figures are totally bogus. While it may be true for large corporations that require hordes of people to comply with complex regulations, it certainly not true that small companies devote 20% - 25% of their gross sales on taxes and compliance.

I guess my biggest complaint about the fair tax is the deception that is being used to sell it. Adding 30% to the cost of an item and calling it 23% is the starting point. Yes, I realize what the numbers mean and how they are derived, but it is a dishonest portrayal, as much as your 20-25% is.

The fact is, the people pushing the fair tax are those who are currently getting clobbered by the income tax. I can understand that and I don't blame them one bit, but there will be winners and losers in any change of policy, and it is the retirees that will suffer under a consumption tax.

That is, unless we all move to Costa Rica and spend our bucks there, but then your percentage of fair tax will most certainly have to increase to make up for the shortfall.

In my mind, the correct solution is to rid government of its excesses. If we cannot accomplish that, then it matters little what form of taxation we have because our contributions will continue to skyrocket.