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Replace the Income Tax System with a national sales tax? (Poll: 83% Yes)
Vote.com ^ | Dec. 2005 | Vote.com

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.


TOPICS: Business/Economy; Culture/Society
KEYWORDS: abjectstupidity; fairtax; shillsgetpaid; taxreform; unfairtax
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To: Beagle8U; Conservative Goddess
I didn't see it, but that doesn't mean I would've responded... but my take is...

Prices already include the costs of our income tax system. THose costs (depending on who you ask) come to about 22% of prices - alternatively our income tax system adds 28.2% to prices.

After passing the nrst, unnecessary costs are eliminated due to the drive to maximize profits. So then prices are appx 22% less...then add the nrst and prices are back to where they are today.

Purchasing power remains constant. Even the anti-reformers (the ones who know anything) will tell you that purchasing power will remain constant.

So today, prices are inflated by about 28% tdue to the tax system and its costs. Under the nrst, appx the same inflation occurs. Nobody will be worse off due to price changes or saved money. There will be a windfall for folks who have placed $ in tax deferred accts though.

Kick around here for a bit. Consider the source when evaluating.. but it's a good starting point for investigation.

I also pinged Conservative Goddess who is well informed to help with information on this....

221 posted on 12/22/2005 11:33:44 AM PST by Principled
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To: justshutupandtakeit
Those who examine business tax returns in the real world will confirm that income taxes are never claimed as a cost.

Nobody ever said that taxes were claimed on returns as a cost.

222 posted on 12/22/2005 11:36:16 AM PST by Principled
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To: Zon

That is simply not the way the world works. Prices are not subject to the wishes of CEOs. And such a theory flies in the face of ALL microeconomic concepts. Prices are set by the market not by tax rates.


223 posted on 12/22/2005 11:37:51 AM PST by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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To: Principled

But you are claiming that costs include them.


224 posted on 12/22/2005 11:38:39 AM PST by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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To: groanup
I am talking about those already retired, or those about to retire.

They wont get a "do over" to plan retirement under a new system.

They would just get screwed, and thats a big reason that the fair-tax plan could never pass in its current form.
225 posted on 12/22/2005 11:38:40 AM PST by Beagle8U (An "Earth First" kinda guy ( when we finish logging here, we'll start on the other planets.)
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To: justshutupandtakeit
You're getting closer.

If I have $90 cost then I damn well better price so that my costs are covered - do you deny that too?

Further, I have a threshhold of profits that I require in order to perform (just like any buyer of any investment). That threshhold considers taxes - denying such is purely preposterous. When a buyer of an investment property considers the purchase, does he consider future tax costs? Of course! When a buyer of a bond considers purchasing, does he consider after-tax yield? Of course he does! That you deny this is simply nuts. Does an owner of a business consider future tax liability when he's determining price? Of course!

I have no desire to convince you of anything - I am only replying in amazement as you deny this trivial truth.

226 posted on 12/22/2005 11:42:55 AM PST by Principled
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To: justshutupandtakeit
... 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.

Granted - but the plan and everything lines up to try to achieve the desired net 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?

38% where'd that come from? In order to give you what I'd try to charge, I'd need to know my marginal tax rate and my desired return.

227 posted on 12/22/2005 11:52:15 AM PST by Principled
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To: justshutupandtakeit
We (other people on these threads) have gone over this before. You are comparing apples to oranges.

Apples: If the business foresees that it can't make it's desired after-tax profit it will chose accordingly 1) not go forward into the market or, 2) accept less than the desired profit and enter the market.

Oranges: In either case the business will set their projected after-tax profit by including the projected tax due.

Suppose Wal-Mart -- or any business -- opts to under price competitors and seeks a 5% after-tax profit. It sets it's product prices so that it makes 7% pre-tax profit. The market will allow for higher price, say 10% after-tax profit, but Wal-Mart opts to gain a larger share of the market by setting a lower price. Wal-Mart factored the projected income tax to be paid into the price of its product. The difference 7% - 5% = 2%. That 2% is embedded into the price of the product.

228 posted on 12/22/2005 11:55:37 AM PST by Zon (Honesty outlives the lie, spin and deception -- It always has -- It always will.)
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To: Zon; justshutupandtakeit
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.
I wasn't aware prices were soleley calculated on after tax "wants".
229 posted on 12/22/2005 11:59:56 AM PST by lewislynn (Fairtax= lies, hope, wishful thinking and conjecture.)
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To: lewislynn
I wasn't aware prices were soleley calculated on after tax "wants".

Beside not being aware of much at all, you aren't aware that what you posted wasn't said.

230 posted on 12/22/2005 12:01:31 PM PST by Principled
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To: lewislynn
Gee, I can do that too. See: I wasn't aware that prices were solely calculated on pre tax "wants".

You know very well you are implying an apples to oranges compariosn. In other words, you presented a straw man.

231 posted on 12/22/2005 12:04:18 PM PST by Zon (Honesty outlives the lie, spin and deception -- It always has -- It always will.)
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To: Principled

I do not deny that unless you recover your costs you will be in trouble but that is no guarantee that you will do so. Much less another 38% to cover taxes.

Investment decisions within a class of investments are not affected by income tax considerations. You buy the 6% bond rather than the 4% bond though each faces the same percent of tax. You chose a business because it was predicted to be more profitable than another not because of income tax considerations.

If you have such power to decide a price why stop at $100 why not charge $200? Obviously you have no power to do that which theory and practice confirm. This is the same argument against setting a minimum wage why set it at $6.50 and not $15? Market forces restrict both the ability to set prices and wages on a whim.


232 posted on 12/22/2005 12:08:30 PM PST by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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To: Principled

I have been doing this tax stuff for about 30 years and no one is better predicting what will happen in congress than Kiplingers.

It is dead.


233 posted on 12/22/2005 12:09:14 PM PST by Raycpa
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To: lewislynn

Nor was I but these fellows apparently believe that to be the case.


234 posted on 12/22/2005 12:09:43 PM PST by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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To: justshutupandtakeit
Investment decisions within a class of investments are not affected by income tax considerations.

Alrighty then. Whatever. That is nuts, purely nuts. You're really telling this forum that tax consequences do not affect investment decisions. Wow.

If you have such power to decide a price why stop at $100 why not charge $200?

Because I want to maximize profit. Maximum price will not bring maximum profit. If it did, we'd unbounded price increases.

235 posted on 12/22/2005 12:12:30 PM PST by Principled
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To: Raycpa

It's not even gotten started yet.


236 posted on 12/22/2005 12:13:28 PM PST by Principled
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To: Principled

Thirty eight percent is the business income tax rate.

Still a mystery is why one would ever limit a price if one can just add whatever is desired to the cost to achieve any profit desired?


237 posted on 12/22/2005 12:13:58 PM PST by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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To: justshutupandtakeit
None of us thinks that is the case.

To me, it seems that you think tax considerations are not considered at all in pricing!

238 posted on 12/22/2005 12:15:10 PM PST by Principled
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To: Principled

How do we collect 35% of sales from the mom and pop retailers without creating a system where we have complete control over their finances, bank accounts etc?


239 posted on 12/22/2005 12:16:30 PM PST by Raycpa
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To: justshutupandtakeit
...why one would ever limit a price if one can just add whatever is desired to the cost to achieve any profit desired

One cannot - nobody ever said that. Besides, business wants to maximize profits. Maximum price does not fetch maximum profit.

240 posted on 12/22/2005 12:17:18 PM PST by Principled
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