Posted on 12/18/2005 4:46:00 PM PST by FairOpinion
YES! 83% (8832 votes) A consumption tax would be great for the American economy. Do away with complicated income taxes!
NO! 17% (1761) A consumption tax would not be fair for low-income households. Keep the current income tax system!
We'll send your vote to your congressional representative and senators.
Me too. But the flat tax proposals are problematic;
-they all continue withholding
-they all continue payroll taxes of 15.3% split between EE and ER in addition to the income tax amounts.
-they all continue business taxes - which are actually hidden taxes on individuals.
I will only support a reform/replacement that eliminates withholding and eliminates "business" taxes. If a flat tax comes up that meets those criteria, I wanna know about it!
Agreed. That's why I'm here... I do think the nrst is the best option, but I continue exploring - usually I get called stupid, etc but I continue exploring.
I urge you to remain - reasoned voices may not always agree, but information is welcome. JMHO.
Great! That is exactly the point and purpose of the Fair Tax and its supporters! It can only happen if enough people, including yourself, work now to make sure the politicians cede to our demands. No task has been or will be accomplished if we all wait for someone else to do the job.
All we need is a filibuster by the liberals or some linquini-spined States to refuse to ratify the amendment to eliminate the IT and we'll stuck paying 2 taxes when we only had 1 before. Don't EVEN try to tell me it can't happen.
It could happen only if too few people get involved. Many people already pay a sales tax and an income tax in the 45 states that impose a sales tax. Passing the Fair Tax will eliminate the income tax and if a state chooses to conform to the federal tax base, they will raise the same amount of state sales tax with a lower tax rate, since the FairTax base is broader than their current tax base. States may also consider the reduction or elimination of property taxes by keeping their sales tax rate at or near where it is currently. Also conforming states that are part of the FairTax system will find collection of sales tax on Internet and mail-order retail sales greatly simplified.
When their lips move, they lie.
I can't argue with that statement. That's all the more reason to keep after them.
Profit is the residual from business production and sale. You are confusing profit with your personal income which is derived from profit. They are not the same thing though with S Corporations the profit flows directly into the owner's income tax return. C Corps must pay a tax on the net profits before anything is distributed to stockholders.
There is a difference between gross return and after tax return but that is not the same as an expense or cost.
It is the great confusion wrt economic theory which weakens the arguments of this new tax scheme.
No I'm not.
ANd it is the after tax return business strives to reach - which means they build as much of the anticipated tax into prices as they can.
There is great confusion when book livers don't realize the real world is what the theory intends to model, not the reverse.
My job sometimes requires me to evaluate certain businesses income tax returns. There is never any claim by them that income taxes are an expense or cost. Certain sales taxes are claimed as well as property taxes but never income taxes.
Such costs are deducted from gross receipts to arrive at profits. If you were to try and claim income taxes as a business cost or expense I don't believe the IRS would let you get away with it.
The only thing which can be "built" into prices are true costs.
Using IRS rules? Oh my, you are stuck in an office!
So the IRS doesn't see that anticipated reductions in profit are expenses... so what? Any business owner does! The fact that the IRS does or does not permit it is immaterial wrt decisions on pricing, wages, and ROI.
Those who examine business tax returns in the real world will confirm that income taxes are never claimed as a cost.
Businesses rarely have the ability to set prices based upon what they WANT. They are determined by market conditions and costs not income taxes.
A business wants $100,000 after-tax profit; It must adjust the selling price of the product to bring in more than $100,000 pre-tax profit. If the inclusive income tax is 20% the business will adjust the price of the product so that it brings in $125,000 pre-tax profit. Subtract the 20% income tax from $125,000 and the after-tax profit is $100,000. The projected $25,000 inclusive income tax at 20% is embedded into the price of the product and passed on to the consumer.
As for the guy who has all of his money in after tax accounts (why would he, anyway?) his necessities are already tax free because of the pre-bate. There would be some softening of prices in lieu of embedded taxes and compliance costs. He would have a choice of when and where to pay his taxes. His earnings on his acount would now become tax free.
If you make something which has cost you $90 and you can account for that (say 10 rent, 20 materials, and 60 in labor) you have no guarantee that you will be able to sell it for enough to recover your costs much less be able to have a profit. Then you have to add 38% onto the profit to make what you want so instead of selling it for $100 you must get $103.80?
This is simply not how businesses work no matter what you do. They do not have the ability to do this in theory or the real world.
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