Top Ten Civil Liberties Abuses of the Income Tax

http://www.cato.org/pubs/tbb/tbb-0204-2.html ^

[pigdog]

"... I am confident that we will discover just how creative and resourceful people can be ..."

You can be as "confident" as you like but that doesn't alter the facts that tax compliance under the FairTax is accomplished when the taxpayer purchases and gets the receipt for the things bought. That's it - he's complied.

Since 3.6% of the retailers collectively make 85.7% of all U.S. sales, there'll be damned little evasion going on no matter how much "confidence" you have in your lawbreaking pals - nor have you ever been able to offer a reasonable explanation of how this might occur.

[GregoryFul]

Many conservatives on FR oppose such a tax.. Why?

I, for one, have made past arrangements that were due to a calculation based upon the federal tax free nature of certain income in that arrangement. Changing that equation would cost my future stream of income a substantial amount of money.

Also, the after tax savings that I've accumulated over my lifetime (I'm very near retirement now) would see an immediate and drastic reduction in real value, due to the change in paying tax on income vs. paying tax on spending.

If the change would make provision for the lost value of savings, and the tax policy inducement to accept a tax free stream of income over a greater taxable stream of income (tax free municipal bonds for instance), it might be a "fair tax." Without provisions like that, it would be highway robbery of people so situated.

[Taxman]

Ping

[hosepipe]

[ How can they tax stuff you OWN?... Answer; they can't.. / Actually they can and probaly would. ]

You miss the irony of the question.. Kentucky and Missouri already have a tax like that.. probably a few other States too..

The irony is the american people totally freeping oblivious of all this.. Eye rolling tongue hanging out with spittle babbling oblivious..

[lewislynn]

How can they tax stuff you OWN?... Answer; they can't..

You miss the irony of the question..

I was responding to your answer ("they can't") to your own question ("how can they?").

Kentucky and Missouri already have a tax like that.. probably a few other States too..

Then you answer some states already do...sorry for my(?) confusion.

[lewislynn]

Since 3.6% of the retailers collectively make 85.7% of all U.S. sales

So much for that "broad tax base" we've heard so much about.

[hedgetrimmer]

Tariffs are Constitutional. Income and consumption taxes were never meant to be collected to fund the government under our constitutional system.

[lucysmom]

You said it was the Tax Panel. It was from the tax panel.

Now pigdog will say the figure is bogus because the tax panel's mission was to preserve the income tax, while the FairTax three's motives are pure.

[pigdog]

"... and the tax policy inducement to accept a tax free stream of income over a greater taxable stream of income ..."

I'm not sure your meaning is clear. Does this statement mean that you prefer to have taxable income rather than untaxed income - since that's what it seems to say???

Do you believe that there should be some "inducement" for you to "accept" a tax free income stream???

[pigdog]

Well, no ... that's not what I said at all. I said the figure was wrong because it was too high due to the technique used by the Tax Panel of assuming changes to a theoretical "tax system" which was tot the FairTax and pretending it was reviewing the FairTax - which it wasn't.

In addition, they made assumptions that there would be from 15 to 30% evasion to help boost the rate of the nNon-FairTax-ish plan they devised while having no information showing that to be a valid assumption at all. Under the FairTax, the act of buying the taxable item and receiving the receipt constitutes compliance in and of itself and beyond that no "evasion" is possible since the tax law would have been completely complied with at the point of purchase.

Theft of the government;'s tax money is a different sort of crime, but not "evasion". And it could be more easily dealt with than taxpayer evasion - which is the point of showing a small percentage of the retailers do a large percentage of he business.

[lewislynn]

Under the FairTax, the act of buying the taxable item and receiving the receipt constitutes compliance in and of itself and beyond that no "evasion" is possible since the tax law would have been completely complied with at the point of purchase.

Really? The retailer couldn't simply not remit the tax?

Would the state worker put on his federal tax collection hat and go knock down the door of the consumer and demand to see a receipt?

[lucysmom]

Since 3.6% of the retailers collectively make 85.7% of all U.S. sales, there'll be damned little evasion going on no matter how much "confidence" you have in your lawbreaking pals - nor have you ever been able to offer a reasonable explanation of how this might occur.

There have been many suggestions as to how the tax could be evaded. Business creating an income stream by purchasing items for their businesses and reselling a year later as used, for instance.

I know of someone who raises lamb for his family's use. He trades the surplus with neighbors for beef, pork, chicken and eggs. The FairTax would make it worth while for more people to do the same. Perhaps a local mechanic would like to get in on the deal, and a carpenter too. Farmer's markets are a big deal around here, seems that would be very difficult and costly to bring into compliance.

According to the tax panel report: Empirical evidence suggests third-party reporting substantially improves tax compliance, particularly when tax rates are high. For the portion of income from which taxes are not withheld and there is no third-party reporting, income tax evasion rates are estimated to be around 50 percent. There is no third-party reporting in a retail sales tax. Retailers would add their retail sales tax to the pre-tax price for their goods and would remit that amount to the government, but shoppers would not separately report what they bought, and at what price, to the government. The government would rely on retailers alone to report their own taxable and exempt sales.

On one hand, FairTaxers admit that changing the way taxes are collected will change behavior, increase saving, for instance; while ignoring behavioral changes that would erode tax collections. For now, 3.6% of retailers make 85.7% of sales. In addition, ENRON alone should make it clear that even large corporations are capable of criminal behavior on a grand scale.

[pigdog]

"Really? The retailer couldn't simply not remit the tax?

Would the state worker put on his federal tax collection hat and go knock down the door of the consumer and demand to see a receipt?"

Certainly the retailer could "simply not remit the tax" but then he'd have a great amount of backing and filling and covering up to do at audit time since he's agreed in writing to collect the tax. I doubt that the large retailers who handle something like 86% of retail sales will get involved in that to destroy their business.

Of the smaller retailers left, that means there are more audit resources devoted to them. And states have a lot of ways to "audit through" a business to see if sales are reasonably correct and the paperwork exists. Even these smaller retailers have little reason to not handle the tax amounts correctly since it is the taxpayer (not the retailer) paying the tax and the retailer is paid to do this. the retailer would gain nothing but trouble should he take it upon himself to "help the customer" (for some unknown reason) since he, the retailer, is still liable for the tax and would gain nothing by doing so.

There's no reason for "demanding to see a receipt" from the consumer since he has already complied with the tax law by buying the item and receiving the receipt. It's the seller who would be the focus point - not for "evasion" since there would have been none - but for theft of the government's tax money the merchant contractually agreed to collect and forward. That's not "evasion" but "theft".

[lucysmom]

Certainly the retailer could "simply not remit the tax" but then he'd have a great amount of backing and filling and covering up to do at audit time since he's agreed in writing to collect the tax. I doubt that the large retailers who handle something like 86% of retail sales will get involved in that to destroy their business.

The retailer has agreed voluntarily?

The study found the average dollar loss per employee theft case to be $1,341.02 compared to $207.18 for the average shoplifting incident.

http://www.crimedoctor.com/employee_theft.htm

Now, prove how the loss occurred.

Of the smaller retailers left, that means there are more audit resources devoted to them.

So we assume the large retailer is honest and subject the small mom and pop store to increased scrutiny? Doesn't that increase the small business compliance costs? Nice!

[lucysmom]

Certainly the retailer could "simply not remit the tax" but then he'd have a great amount of backing and filling and covering up to do at audit time since he's agreed in writing to collect the tax. I doubt that the large retailers who handle something like 86% of retail sales will get involved in that to destroy their business.

Nobody gets involved in criminal activity to destroy their business, they think they can get away with it.

Ehibit A, ENRON; Exhibit B, Arthur Andersen

[Your Nightmare]

I doubt that the large retailers who handle something like 86% of retail sales will get involved in that to destroy their business.

This is another one of the FairTaxer's lies. Large retailers do 80% of the retail sale of all goods, but the FairTax taxes more than just goods - it taxes all services, too. It would be taxing my lawn guy, my house keeper, the guy that cuts my hair, my dentist, etc. Large retailers would not be collecting 80% of the FairTax.

[lewislynn]

But clearly $429 billion os much less than the $600 billion the Tax Panel dredged up out of nowhere.

Right, the president's hand picked tax panelists are all a bunch of baffoons. But you, the faceless clown using a phony name from god knows where on the internet are the expert....Got it.

[pigdog]

"The retailer has agreed voluntarily? "

Since you won't read the bill you'll never know I guess, but that's covered in the bill.

Employee theft is quite a different thing from the retailer stealing the government's tax money which he has agreed in writing to collect and forward and be paid for so doing. Your link isn't meaningful in this context.

Are you trying to take the position that the retailers should not be subject to audit at all but left to go their own way??? Weren't you the poster recently arguing about how dishonest everyone was and how many would "evade" the FairTax (without specifying what "evade" meant or how they might do that or how common this would be)???

[pigdog]

The discussion isn't about "criminal activity" but about stealing the government's tax money which the firm had agreed to collect in writing and which they'd be paid for doing.

As I recall, the two firms you mentioned weren't in that category but if you can demonstrate convincingly they WERE so involved, I'd be glad to hear about it.

[pigdog]

Certainly services are taxed under the FairTax.

Are you trying to claim that there are no dominant businesses in the services end of things??? I can think of quite a number and they'd fall into the category of large businesses not likely to chance destroying their businesses by failing to keep the agreement they make with the tax authorities to collect and forward the taxes.