Posted on 10/07/2005 8:39:52 AM PDT by SolidSupplySide
Jharkhand, the latest state to announce its decision to switch to the State VAT, must be commended. Despite being a BJP-ruled state at a time when the BJP leadership is preventing its states from joining the Vat regime, Jharkhand has chosen to do the sensible thing. It indicates either a change in the stance of BJP’s leaders, or some creditable independence on the part of Jharkhand’s leaders. This leaves six major states out of the system — Rajasthan, Chhattisgarh, Madhya Pradesh, Gujarat, Tamil Nadu and UP. Talks have been taking place with political leaders to get them to join in.
By staying out of the State Vat regime, the BJP has a political point to make. But what is UP’s excuse? The arguments against the State Vat are, in any case, getting weaker by the day. The performance of state revenues in the first five months of 2005 — April to August — has been encouraging. Revenues have grown at 16 per cent — higher than the 12 per cent historical average. Some states like Karnataka, Punjab and Delhi, have witnessed even stronger revenue growth at 25 per cent. The resistance that was to be expected from the trader community, which now cannot evade taxes as easily as it could under the earlier system [of sales taxes], has been a token one. This is also because of many sensible changes made to the VAT rules which ensured that small traders did not get unnecessarily burdened under the new administration. The self-assessment system in the State VAT also reduced the scope for harassment of traders by sales tax officials. An information network, allowing states to cross-check payment information has been put to trial and is expected to improve compliance and reduce evasion further. The Central Sales Tax (CST), which has to go by 2007, will now be reduced from 4 per cent to 2 per cent in the next fiscal year. Moreover, the Centre has assured any state worried about revenue loss of compensation. With Jharkhand and Uttaranchal joining in, the case in favour of the VAT has been further strengthened. It is important that all states join the system, otherwise the unscrupulous could exploit the differences in the tax regime between states. This would be unfair to all honest tax payers.
Also, we need to remember that the State VAT is an intermediate step towards the proposed Goods and Services Tax, which is a value added tax on all goods and services produced in the country. When 130 countries, including India’s neighbours like Pakistan, Bangladesh, Sri Lanka and China, have implemented the VAT, making their manufacturing more competitive, we need to join up or get left behind.
Most of the items you speak of for buying are with a closed network and many are donated.
In all my experience I have seen churches constructed on the donation of time and materials by its members.
Most Church organizations have their own printing presses.
Building materials are often donated or financed by members.
Church bazaars or cake sales are almost always done by suggested donations. So there is no VAT or sales tax added. Even state sales taxes are not collected at Church dinners.
Most Churches really don't operate as businesses. They operate as goodwill structures.
I can't think of anything else that is really an expense that is not donated or handled by a pledge committee. Even utilities are often picked up by members.
No disrespect intended but I think your argument is weak.
The real issue is what is a Church?
That the government sought to impose the threat of taxation on Churches is disturbing but sometimes understandable in some cases. Scientology presents itself as a church. It is viewed by many as a tax evasion scam.
But such abuses could be minimized by eliminating the income tax. For then donations to organizations such as Scientology would have no tax benefit.
Don't get me wrong, I don't think I will see an elimination of the income tax in my lifetime because I think it will take a revolution which is still 25 years in the future. The revolution will be caused by demographics and cultural shifts and their impact on government structures as they currently exist. Government will attempt to adapt to avoid extremes in policy changes but the trend is clear and the momentum of the trend I believe is unstoppable.
Most of the items you speak of for buying are with a closed network and many are donated.
I don't know what you mean by "closed network." And it wouldn't matter if the items are donated, the tax still must be paid.
In all my experience I have seen churches constructed on the donation of time and materials by its members.
If a business donated time or materials, the tax would still have to be paid (if it were time, i.e. services, it would be the fair-market value of those services) - either by the business or the church.
Most Church organizations have their own printing presses.
And they bought (or somebody did) the press and the ink and the paper. That would all be taxed under the FairTax.
Building materials are often donated or financed by members.
And the sales tax would be paid on it
Church bazaars or cake sales are almost always done by suggested donations. So there is no VAT or sales tax added. Even state sales taxes are not collected at Church dinners.
The states might not collect sales taxes, but the FairTax would. Those cakes and dinners would be taxed. The FairTax specifically states that "if a qualified not-for-profit organization provides taxable property or services in connection with contributions, dues, or similar payments to the organization, then it shall be required to treat the provision of said taxable property or services as a purchase taxable pursuant to this subtitle at the fair market value of said taxable property or services."
Most Churches really don't operate as businesses. They operate as goodwill structures.
And they would be taxed under the FairTax.
I can't think of anything else that is really an expense that is not donated or handled by a pledge committee. Even utilities are often picked up by members.
It doesn't matter who picks them up, the FairTax would still have to be paid.
No disrespect intended but I think your argument is weak.
The real issue is what is a Church?
And the FairTax avoids the issue of what is a Church by taxing them all.
When I was stationed in Germany, we were able to get the German VAT refunded to us if we purchased a major item through a German vender. A little bit of paperwork and we got something in the neighborhood of 20%....I forget the % exactly.
What about Church potlucks? What about Church potlucks with a donation jar on a table by the entrance?
I think you are so hung up on your argument that no reasonable questioning of it or challenge to it is going to deter you from forcing your point however weak it might be.
What about Church potlucks? What about Church potlucks with a donation jar on a table by the entrance?If the parishioners brought the food, they would have paid the tax on it when they bought the ingredients.
I think you are so hung up on your argument that no reasonable questioning of it or challenge to it is going to deter you from forcing your point however weak it might be.You questioning doesn't take into account the reality of the FairTax as it is written. You are arguing based on what you believe it says, not what it actually says.
When taxpayers start having to write out quarterly or monthly checks, some form of 'tax reform' will be passed within the year. The big advantage of the withholding is that it would finally get people to realize what government is costing them.
If we can't even eliminate withholding, then why bother with meaningful 'tax reform'?
That's not a selling point of the VAT. Check the U. S. Treasury Dept. which has estimated that the sales tax (as opposed to the VAT) and the VAT would have the same rate. Or perhaps you prefer to believe the Indian government which is trying to get a country-wide VAT???
BTW, Nightie, what has happened to your beloved Nightmare Flat Tax??? Now that you see it is finished, have you now switched to a Nightmare VAT?
Please take me off your ping list again.
Moreover with every VAT system despite the theoretical "purity" such a system always embeds taxes into the prices of goods much as does the present income tax. The tax system breaks down in practice and is not the beautiful, wonderful system you envision in theory. It degrades into something a lot like the income tax which is why almost all of the VAT countries have added other forms of taxes to supplement it.
This despite the post earlier on the lead-in post by SSS stating that
"The so-called "Fair Tax" has a non-tax-inclusive rate of 30%. This is double the rate that any country has found sustainable due to evasion. Because of sales tax evasion, those countries are converting their sales taxes to VATs."
Absolutely incorrect and without foundation. His claim about double the rate has no documentarty proof to back it up and was only presented by a single individual in testimony before Congress without any form of documentation (he used the number 10% - which is ridiculous in and of itself since present income/payroll tax rates are much higher than that). Offering such unsupported claims as that does nothing for you anti-FairTaxers (and, yes, it is written as one word, not two so you're wrong on that also).
Done!!
The FairTax obviously since under that system there is no government review of the church and/or no control over it by tax law manipulation.
BTW, Nightie, what has happened to your beloved Nightmare Flat Tax??? Now that you see it is finished, have you now switched to a Nightmare VAT?The thread wasn't about the Flat Tax, it was about a VAT, so I was discussing the VAT. Unlike FairTaxers, I try to stay on topic and don't hijack every tax thread.
But prices of things the church buys for operation would decline as would compliance costs.
IOW, they'd have more unused funds to operate and do their churchly-thing. AFAIC that's a benefit of the FairTax. Additionally, people would have more takehome pay to allocate at their discretion which would almost undoubtedly boost church income.
Sounds as though you've flip-flopped back to the Nightmare VAT since the Nightmare Flat isn't going anywhere. A tip ... the Nightmare VAT isn't either.
And there was no "hijacking" since the lead-in poster stated misinformation about the FairTax.
But prices of things the church buys for operation would decline as would compliance costs.Are you still trying to spread that lie about lower prices? And their compliance costs would go way up because they would have to account for their taxable purchases (many) vs. their untaxable ones (few) and collect the sales tax on their taxable "sales." The complexity of a Church's tax accounting increases dramatically.
Sounds as though you've flip-flopped back to the Nightmare VAT since the Nightmare Flat isn't going anywhere. A tip ... the Nightmare VAT isn't either.You don't know what you are talking about (as usual).
And there was no "hijacking" since the lead-in poster stated misinformation about the FairTax.You can prove it's "misinformation" by giving us an example of a country that has been able to sustain a national sales tax at a rate of 15% exclusive otherwise you are the one stating misinformation (which is your M.O.).
Please post for us the exact sections of the FairTax bill that you believe require churches to pay taxes on all that you claim in this post.
Especially those "... cakes and dinners ..." you delineate.
It is quite true that prices of the things the churches buy would decline. Most of your cronies agree that is the case but you seem to disagree with them. You're more than welcome to prove how prices would increase to churches.
Post the sections from the FairTax bill that back up your claim about this nonsense (as well as the other):
"And their compliance costs would go way up because they would have to account for their taxable purchases (many) vs. their untaxable ones (few) and collect the sales tax on their taxable "sales." The complexity of a Church's tax accounting increases dramatically. "
`(d) TAXABLE TRANSACTIONS- If a qualified not-for-profit organization provides taxable property or services in connection with contributions, dues, or similar payments to the organization, then it shall be required to treat the provision of said taxable property or services as a purchase taxable pursuant to this subtitle at the fair market value of said taxable property or services.Try reading the bill yourself sometime.
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