Posted on 08/19/2002 10:30:18 AM PDT by JohnHuang2
Since we're talking about a National RETAIL Sales Tax, there would be NO mechanism left for them to raise taxes sureptitiously...if they were going to raise taxes, they would have to do it right out in the open where everyone could see it every day at the cash register. That just one of the many beautiful features of the NRST.
I can't remember exactly which one of the Federalist papers it is, but Hamilton makes the salient point that a tax on consumption is self-leveling, like water. If they raise the rate too high, the effect is actually to reduce revenues. Hehehe... ;-) IMO, the Fairtax would create economic and political pressures to reduce taxes and big-government taxing and spending over time, actually beginning the process of putting government back within the boundaries of the enumerated powers.
EV
"As for Fairness, it is hard to understand why a tax system that determines a person's contribution to the cost of government based on his ability to pay is less fair than a system that is based on what he spends."
Better think again. You don't really think they can/will put together a revenue neutral tax bill while removing a select group of tax payers (corporations etc.) without taxing virtualy everything you do, do you?
From the faitax bill(HR2525):
`SEC. 801. DETERMINATION OF FINANCIAL INTERMEDIATION SERVICES AMOUNT.
`(a) FINANCIAL INTERMEDIATION SERVICES- For purposes of this subtitle--
`(1) IN GENERAL- The term `financial intermediation services' means the sum of--
`(A) explicitly charged fees for financial intermediation services, and
`(B) implicitly charged fees for financial intermediation services.
`(2) EXPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES- The term `explicitly charged fees for financial intermediation services' includes--
`(A) brokerage fees;
`(B) explicitly stated banking, loan origination, processing, documentation, credit check fees, or other similar fees;
`(C) safe-deposit box fees;
`(D) insurance premiums, to the extent such premiums are not allocable to the investment account of the underlying insurance policy;
`(E) trustees' fees; and
`(F) other financial services fees (including mutual fund management, sales, and exit fees).
`(3) IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES-
`(A) IN GENERAL- The term `implicitly charged fees for financial intermediation services' includes the gross imputed amount in relation to any underlying interest-bearing investment, account, or debt.
`(B) GROSS IMPUTED AMOUNT- For purposes of subparagraph (A), the term `gross imputed amount' means--
`(i) with respect to any underlying interest-bearing investment or account, the product of--
`(I) the excess (if any) of the basic interest rate (as defined in section 805) over the rate paid on such investment; and
`(II) the amount of the investment or account; and
`(ii) with respect to any underlying interest-bearing debt, the product of--
`(I) the excess (if any) of the rate paid on such debt over the basic interest rate (as defined in section 805); and
`(II) the amount of the debt.
Yea we can stop buying groceries, prescription drugs, paying rent, car payments/leases, credit card payments, house payments, haircuts, buying gasoline, using utitlities, including the telephone and computer phone lines, not to mention everyone else will stop consuming what ever it is you or your company offers too.
BTW, from the Congressional record:
The Republican-appointed Director of the Joint Committee on Taxation issued a report this very week noting that these new Republican tax proposals assume ``that retail sales through the Internet would be subject to the same Federal tax as other retail sales, notwithstanding the current moratorium.''This same report notes that in order to maintain the existing level of Federal revenues, the tax that Republicans would impose on Internet sales and on sales across America would be 59.5 percent over 10 years. That is 60 percent. Those are not my numbers, those are the Republican numbers. I know that it sounds unbelievable that a Republican Congress would try to do this, but that is exactly what they are proposing, a 60 percent tax, in addition to any State and local taxes on electronic commerce that might be imposed.
Mr. FROST. Mr. Speaker, I yield myself 30 seconds.Mr. Speaker, the previous speaker was asking about simplicity and how do we understand all of this. Let me read a memo from the Joint Committee on Taxation . This ought to be simple enough for the gentleman to understand.
The memorandum is in response to their request for an estimate of the budget neutral tax rate for H.R. 2525. That is the bill of the gentleman from Georgia (Mr. LINDER), a bill to replace the current U.S. corporate and individual income, estate and gift and Federal income contributions act, payroll taxes, with a flat tax on retail sales of all goods and services.
Then on the second page it has a little chart here, neutral over 5 years, 59.5 percent. That is what they want to do, neutral over 5 years, national sales tax 59.5 percent. I believe the American people can understand that.
Some commentators have raised questions regarding the stability of a consumption tax as the principal source of federal revenue. They speculate that a tax on consumption might be a less steady tax base than our current income-based tax. Today, most theorists would expect to find that consumption, over time, is more stable than income. When income falls or even ceases, people borrow, dip into savings, or rely on gifts to maintain consumption levels. Similarly, when income is unusually high, people tend to either pay down existing debts, or to save more.It is indeed preferable to have a federal tax base that is relatively stable. A stable tax base gives rise to smaller variations in government revenue over time. A steady flow of revenue allows the government to more effectively budget and more easily avoid running deficits. . . .
Research [has] revealed that consumption varied less, and was therefore more stable over time than the current income tax base. This finding was confirmed using three different statistical measures.
(see http://www.fairtax.org/pdfs/stable%20government%20revenue.pdf)
It’s ironic, but the case could be made that an income tax is less stable than a sales tax. Granted, a dip in the market might have some effect on tax revenues under a sales tax, but what kind of tax revenues are collected when there’s unemployment under an income tax? And certainly trouble in the market leads to trouble in employment rates, so there's going to be less tax revenue under a stressed economy, no matter what the tax system might be.
"From each according to his ability, to each according to his need." -Karl Marx
Is that what you mean? LOL
The Federal Income Tax is nothing less than the implementation in America of one of the key planks in the Communist Manifesto. Your post defends that implementation.
I will give you this...you are the most persistent defender of the income tax status quo on FR. But you have sunk to a new low by defending marxist dogma.
I won't even start to address your other 'points' tonight. But suffice it to say they are just as twisted as the one I just pointed out.
As factual as it is, It's not my quote. That would be why there's quotation marks around it.
I won't even start to address your other 'points' tonight. But suffice it to say they are just as twisted as the one I just pointed out.
Of course you won't, "as twisted" as they are they're copied and pasted from your beloved sales tax legislation or the congressional record.
To "address" them would mean you'd have to explain them and you can't do that without exposing the fraud in your scam or your ignorance of their existence.
Why would I want to replace one fraud with another simply because it has a nice (dangling carrot) title...as fraudulent as the use of "sales tax" is in it, the rate is even a bigger fraud. Not to mention your use, or rather mis-use, of "retail" thrown in there. What else are you lying about?...
I will give you this...you are the most persistent defender of the income tax status quo on FR.
Actually you'll never be able to produce one time where I defended the income tax (only in narrow minds does opposing one bad thing constitute defending the other). However, oddly enough, there has been thread after thread, year after year of sales tax shills like pigdog, ancient geezer (and his income tax spam), kevkrom, (maybe even you and taxman) and on and on defending the income tax "status quo" and chastising income tax protestors in whatever form.
No. The tax on the fee for service is the explicit tax. The tax on the interest is the implicit tax. That's why you see the words like "interest", "investment" and "rate paid" in there.
Once again, the tax for sevices is explicit, the tax on interest is implicit.
`(3) IMPLICITLY CHARGED FEES FOR FINANCIAL INTERMEDIATION SERVICES-
`(A) IN GENERAL- The term `implicitly charged fees for financial intermediation services' includes the gross imputed amount in relation to any underlying interest-bearing investment, account, or debt.
`(B) GROSS IMPUTED AMOUNT- For purposes of subparagraph (A), the term `gross imputed amount' means--
`(i) with respect to any underlying interest-bearing investment or account, the product of--
`(I) the excess (if any) of the basic interest rate (as defined in section 805) over the rate paid on such investment; and
`(II) the amount of the investment or account; and
`(ii) with respect to any underlying interest-bearing debt, the product of--
`(I) the excess (if any) of the rate paid on such debt over the basic interest rate (as defined in section 805); and
`(II) the amount of the debt.
Linder doesn't know what's in his bill. He didn't know, when asked, that in his bill (the fairtax hr2525) "any government" employee's wages salaries and benefits is subject to the sales tax. That in his bill "any government" is considered a taxable employer..in other words "any government" (local , state, federal) payroll and benefits packages would increase by 30%. AND, the fairtax folks won't answer questions on this, they'd prefer you not even know what it is.
Believe what you want. But why would you think the big spending government will write a tax bill that favors the tax payer?...unless of course you're a corporation with big contributor dollars.
You will also pay "sales tax" on interest you pay out. Such as credit card, mortgage, car payments, etc.. Interest is the "implicit" purchase price you pay for buying money....interest you earn is the "implicit" price paid for someone else using your money....except they won't pay it, they (institutions) will collect, then remit it to the government. But pay it you will.
The tax is imposed on the differnce in rates times your balance and an arbitrary monthly (fed fund?) rate set by the government, refered to in the bill as "the basic interest rate".
The biggest difference was McCain was for Campaign Finance Reform and Bush said he was against it, remember?
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