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To: taxcontrol

Oh, & please enlighten us all with your research that leads you to believe the Fair Tax is a VAT. I’d be most interested in your sources.


33 posted on 01/31/2008 10:40:31 AM PST by Mister Da (The mark of a wise man is not what he knows, but what he knows he doesn't know!)
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To: Mister Da
Simple understanding of how it is IMPOSSIBLE to apply the Fair Tax as stated.

Example:

Propane deal sells 1,000 gallons of propane to a farmer. The propane is used to:

heat the house - retail consumption
heat the barn - component expense to the final product or wholesale consumptions
drive the tractor - wholesale expense
drive the family pickup - both retail and wholesale

If the propane vendor taxes the propane the tax becomes a VAT. If he does not, it is a consumption tax that never gets collected. There are easily a dozen or more examples of how something that sounds simple, is not understood until you think through the problems.

Also ...

Under the Linder-Chambliss bill, the federal government would have to pay taxes to itself on all of its purchases of goods and services. Thus if the Defense Department buys a tank that now costs $1 million, the manufacturer would have to add the FairTax.... The tank would then cost the federal government $300,000 more than it does today, but its tax collection will also be $300,000 higher.

Likewise, Similarly, state and local governments would have to pay the FairTax on most of their purchases. This means that it is partly financed by higher state and local taxes.

That means when you purchase services, you will pay for the basic cost of the service, from the city, plus the Fair tax on that service. Included in that basic cost is the tax cost that the city had to pay. So you are paying taxes on taxes ... the classic definition of a VAT.

35 posted on 01/31/2008 11:14:52 AM PST by taxcontrol
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