Posted on 08/24/2005 9:40:44 PM PDT by RobFromGa
I haven't read this book, um, I have followed the FairTax debates on FR, well, up until 2003 when the level of discourse fell off a cliff on this subject.
So I've been away from it for a while, you have any other forums/discussions/blogs/whatever where I can read the deeper numbers. I'm working on a masters in economics, and am an accountant, and have too much time on my hands until Sept. 1st, so the more complex the better.
He was promising extra dollars in your pocket before.
I don't see that he has changed that with the statement that RobFromGa highlighted as backing down. Which is the point I am making.
I doubt very much that Boortz has read this thread yet, much less adjusted his presentations in any response to it.
I always knew my wife was a fraud.
She has three e-mail addresses..........
Nothing "used" gets taxed.
Understand the definition of "used" under the legislation means tax has previously been collected on the taxable property being sold. Items are only taxed once. If they have been previously sold with taxes collected, they are not taxed again.
Currently occupied homes sold by their owners (with or without the assistance of a Realtor) will not have the 30% retail tax applied to their sale.
Correct, as property and goods not held for business purpose prior to implementation of the national retail sales tax are grandfathered. Tax is presumed to have been paid via income and payroll taxes paid by the owner of the home.
Just new homes.
Which do not consititue inventory qualifying for transitions inventory credit, (again a situation of tax payed under the tax system being replaced by the FairTax legislation)
Thus only homes and goods that are newbuilt after implementation of the FairTax are subject to it.
Is that plain enough for you?
The costs imposed, outside the taxes themselves, are quite significant and would allow very significant price reductions.
What part of "used" do you not understand?
Most employees will not have their wages cut by their employere when/if the Fair Tax is enacted. So they would receive 100% of their paychecks. In addition, the employer would be relieved of its additional obligations to pay taxes that are to be repealed by the Fair Tax. How wages and prices would be adjusted in the immediate and intermediate period after enactment would depend upon the pressures of the market. We can agree there is no free lunch in terms of the full paycheck and the cut in manufacturing costs duplicating each other. But the employee will come out ahead financially under the Fair Tax.
His costs of complying with the income tax will be eliminated. He will get the use of all his wages all year long. His wages will increase with the increased investment in capital and equipment by his employer makes him more productive. His wages and hours of employment will increase as manufactured goods in the U.S. become more competitive in world markets as embedded tax costs are stripped out of our products. All of that (and more) will put real growth back into the American standard of living. This ought to be acknowledged by those who spend all of their time contending their objections require maintain the status quo.
"The costs imposed, outside the taxes themselves, are quite significant and their removal would allow very significant price reductions.
http://fairtaxvolunteer.org/pdf/BROCHURE.pdf
Page 11 states that $225 billion is spent complying with the income tax. That's about 2% of the GDP. Even if (big if) that is all for business and doesn't include individuals tax calculation expenses or imputed value for the time individuals spend on IRS forms, it is still only a small part of the 23% embedded taxes assumed by FairTax.org.
Very significant price reductions? No, maybe a couple of percent.
That assumes a business pays little or no income tax to the Feds.
That's the most easily provable NRST claim of all. All you need do to convince yourself of the drop in interest rates is to examine the existing rates of taxable vs. tax-free bonds.
Indeed! Do you suppose that to be the ONLY cost imposed outside the tax itself?
What are the other costs? I've already estimated 9% direct costs for the employer's half of SS and Medicare plus corporate income tax on the profits. Now I'll add 2% (to be generous) for compliance costs. That still leaves 12% more (or about $1.2 trillion in total) to get to the point where embedded taxes and the NRST figures match so there is no net change in prices as FairTax.org claims.
Some of it is going to be in time and effort wasted in trying to avoid or defer income taxes. Also add some foolish investments promoted by the tax code. Some Senator likes Guatemalan fruit bats, so he puts a deduction in the tax code for investing in Guatemalan fruit bat farms and a lot of money gets wasted on those bats. Go to an NRST and you get rid of those stupid investments. Do those add up to the remaining 12%? Or do you have to count the employee's SS, Medicare and income taxes like Jorgenson said but FairTax.org claims you don't (because employees take home their entire paycheck)?
Dr. Jorgenson's model does not permit giving the employee side of payroll taxes back to the employee.
price of labor = household value of time / (1 - marginal tax rate on labor)No, that is a fact. I know in my business, there is no way I am going to save more than a few percent of gross. Unless I can ring out all the employment taxes of my workers, my subcontractors and their workers, and my suppliers and their workers, the savings of the fair tax is insignficant. I know my books. You can call me a liar all you want, but you guys are the ones with your hands caught in the cookie jar and have in fact been grossly misrepresenting facts for over 6 years.
I have not tried to quantify them as I doubt that they CAN be quantified, either by me or Dale Jorgenson. That is in fact one of the MAJOR problems with the communist inspired progressive income tax.
Have you ever heard anyone say something to the effect that "I'm not able to work any more overtime this week as I won't see a penny after the government get's through with it"? That IS a cost imposed by the income tax system!
I am not assuming anything. The vast majority of federal taxes in the country are individual income tax and payroll taxes. Corporate income tax is only about 10% of the federal government revenues.
Bad communicating on my part. The tax rate necessary to generate the same amount of tax reveune will be lower.
I'll say that if retail prices are decreased, then that means the receipts that go into the federal treasury will be reduced..
Same misconception going on here. You will have more economic activity taxed and therefore more revenue for the same tax rate.
Retail prices are subject to market forces. You also assume that if prices are lower, total sales will therefore be lower. That's not true.
But I'm not going to accuse you of being dishonest. I think you should drop that tactic.
Certainly if you have a sales tax, tax revenue goes up and down with total sales activity. And this varies with the economy. But a tax on income also varies with the economy. So your problem here exists in both systems.
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