Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Always Right

AR, do understand what I'm saying?


1,107 posted on 06/13/2005 1:17:59 PM PDT by Your Nightmare (::tick:: ::tick:: ::tick::)
[ Post Reply | Private Reply | To 1104 | View Replies ]


To: Your Nightmare
AR, do understand what I'm saying?

I think so. The NIPA numbers which exclude any part of the economy that has to do with income tax avoidance does not really impact the NIPA numbers which has to do with the tax base for the sales tax, personal/government consumption numbers. I agree partially. I think service providers who probably are more likely to cheat the income tax and business that currently keep two registers, like restaurants, will do so in similar rates. Those are businesses with high profit margin on their gross, so an income tax has a similar effect on them as a 30% sales tax. So in that way, I think the NIPA numbers might accurately reflect tax avoidance under both systems

However, other retail business with tighter profit margins that income tax was not as big of a chunck of their gross sales, will have a much bigger incentive to cheat the system under the sales tax. Also with fewer cross reporting, it will be much easier to buy personal items under the business name, which will lower the personal consumption numbers, increasing tax avoidance. So yes, I think using the NIPA numbers without some adjustment is extremely optimistic.

1,111 posted on 06/13/2005 1:41:40 PM PDT by Always Right
[ Post Reply | Private Reply | To 1107 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson