Posted on 06/10/2005 11:13:37 AM PDT by Always Right
That is a cute belief, but logic says that can't and won't happen. If the money goes into the pocket of consumers, there is not enough savings to businesses to bring down prices 23%. More money will be in the pocket of consumers, but prices will go up. Basic Econ 101.
If the gross price is $130, the BP is $100 since 23% of $130 is $30. Hence the gross price is 1.3*BP.
I know it's weird, but that's the way the FT is.
In six years, I have never seen a sales taxer concede a point no matter how wrong they know they are.
No, they either weasel, change the subject, call names, or disappear for a while to avoid admitting a loss.
It has nothing to do with curbing, or even addressing, illegal behavior.
If you want to argue that angle, start another thread. All you're doing is clouding the issue. This adds nothing to the debate, brings nothing to the table.
When you're comparing apples and oranges, it doesn't make for your strongest argument.
I notice that most all of the people on this board who do things like this are continuely making arguments against the proposed NRST, seldom, if ever, arguing for the current system.
Given your approach to this subject, it is entirely reasonable for one to assume that that is your only option - the current system.
If tactics like this are deemed to be a necessary adjunct to your arguments, be prepared to be laughed off the planet. There's simply no other way to put it.
CA....
Dale Jorgenson's assumption is what most the NRST analysis is based on.
Dale Jorgenson's analysis(not assumption) is rooted the relationships of emirically measured changes in production and prices, in regard to changes in tax policy.
That includes the accumulative affects of repeal of the taxes per-se, change in overhead costs on business, business behaviour in response to repeal of income & payroll tax, consumer response to repeal of income/payroll tax witholding, consumer response to no taxes on savings & investment, consumer response to taxes on consumption, resultant growth in production due to increased efficiency of business activity, resultant growth in U.S. exports, resultant growth in GDP, resultant growth in personal income, ...
Strange how you seem to have missed that, as you had specifically requested information concerning his methodology, and were given such in reply #361 with a link to one of his papers describing his IGEM and methodology.
If you accept his assumption, you accept today that a drug dealer pays 20-35% tax on every purchase today.
Actually looking at your quote it appears more to be somebody's assumption's or guess about Dale Jorgenson's results, rather than Dale Jorgenson's actual analysis statements or conclusions.
The fact of the matter is, and you have been informed of this as well, the income/payroll tax per-se is but a portion of the factors the result in a decline of 20-25% in producer (i.e. prices excluding taxes) prices, the decline in prices is a result of a combination of increased production efficiencies, reductions in overhead costs, removal of taxes per-se, and changes in market demand in response to taxation of consumption expenditure vs not taxing savings/investments and production.
Sorry, your assumptions are flawed about Dale Jorgenson's studies and analysis. While he finds that production increases, and producer price average across the 35 producer sectors represented in his studies decrease, the amount price declines are not limited to merely the amount of tax revenue that government collects from businesses.
But you know that as well.
I can only assume you are trying to construct a strawman, that you think can stymie a response just because of an assumed position of a person about the Dale Jorgenson tax reform studies.
A flat cow pie...
Yes, that was, uh, a very graphic analogy...
CA....
Well, if you have this sales tax replacing your current income tax, and you currently pay existing state, local and property taxes, then how can you move to the "poorhouse"?
Unless, of course, you're already there?
CA....
That model was used to model business response to taxed induced price changes. It did not explain how Jorgenson determined embedded taxes or the compliance costs of the current tax system. That is what I wanted to know. The link did not work either, so I don't even know what that was.
I just cut and pasted from an article written by a fair tax supporter. If they misrepresented Jorgenson, maybe they did. But what you posted did not refute it. The model you reference has nothing to do with the embedded taxes or even compliance costs. How Jorgenson came up with those numbers is what I am interested in. His modelling of what happens after if a sales tax is enacted is a completely different issue.
No, not "earnings"; wages. Read the bill.
What do self-employed people report?
It's not a tax on labor at all but on services. "Labor" implies some sort of income taxation on the number of hours worked while services isn't linked to any specific work amount.
Let's see here. The retailer gets your 100 bucks. OK. Then, as you say, he sends off $30 of that to the taxing authority.
Hmmmm. Looks like he ends up keeping $70. And $30 goes to the taxing authority. Hmmmm.
If the original $100 were indeed the price of the good in question, looks like the tax rate is 30%. Or, if it turns out $70 were the price of the good in question, the it looks like the tax rate is 43%. Hmmmm....
What happened to 23%?
Of couse, in the above example which you've offered, the $70 kept by the retailer is more than likely the cost of goods sold, plus an allowance for profit. The figure, unlike today's prices, does not include provision for taxes. That's what the $30 is in your "argument".
If indeed his costs are $70, then at the proposed NRST rate of 23%, the (Federal) tax in question would be $16.10, for a total price of $86.10.
That's still quantatively better than $100.
Hmmmm.....
What did you say was your major in school again?
CA....
My accountant, lawyer, gardener, house worker charge me for their services by the hour. I am not sure I follow your point. For people who provide services, it is a tax on their labor charges.
Your skull is impermeable to reason.
It's not a "wash" at all since you merely assume that all such illegal income goes to a taxpaying firm and that the taxpaying firm has a huge marginal rate.
At best, that is exceedingly unlikely and any such illegal income ends up in the tax revenue as only a vanishing small percentage and certainly nothing like the figure you attempt to pass off. It is the price of goods that is inflated by embedded taxes rather than the taxes paid to government and that does NOT mean the taxes themselves paid are that great - they aren't.
With the FairTax OTOH, the retail taxable purchases will contribute 23% of the selling price into the tax revenue - truly a huge difference.
How about impenetrable?
CA....
It's YOU who are delusional, pitipat, to make the huge leap[ of faith that somehow the FairTax will be completely re-written during the legislative process.
It won't. Read the bill to see why not since we know you have not read it.
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