Posted on 10/10/2006 8:59:26 AM PDT by cryptical
The majority of taxes show up on your pay stubb every week. Truely hidden taxes like corporate taxes are a small portion of federal taxes.
I have not been trained in economics(or spelling for that matter) but I did stay in a holiday inn express one night.
I was thinking about the life of a $. It is given birth by the US Government and then paid out to people/ companies providing something for the goevernment.
Once paid, it is TAXED say 20%. So that $1 is now $.80. If it was paid to a company that company will probably to pay it to an employee and share holders. Either way that $.80 is now taxed again as income for that person, say another 25% so now it is $.60.
Well John Q's now $.60 is going to be spent on something, say a pack of thumb tacks at Walmart. He has to pay State tax(most states) on his purchase.
So now Walmart has $.57 left after a 5% state sales tax. They have to pay for the product say 25%. Leaves them with about $.42 left.
Now Walmart has to pay their employees' wages and insurance(10%). So buy the time Jane Q. gets paid it is only $.38.
Guess what Jane Q. is taxed at a lower rate of say, only 15% for her income bracket. So her actual after tax is $.32.
What will she do with her money? She will buy something with it. and again taxed. Eventually, that $1 is taxed out of existence.
My point is while it seems that money keeps going around and around it always ends up back in Washington or a state capital in the form of taxes.
If you spend your dollar will die a slow death of taxation.
I know I am missing some major stuff like when taxes are collected they are respent back into the economy. But I think it stinks that it always will end up in Washinton or Bejing.
Nah - too radical."
I can think of one function: to coin money and make nothing but gold and silver coin a tender in the payment of debt. But that is too radical as well.
"The Fraudulent Tax Currency, there fixed it.
The twin truths that taxation is theft (no matter how the (1)money is collected) and that the US government should never be given a budget that is in the (2)trillions (no matter how the (1)money is collected) are concepts that FairTax proponents have never grasped."
(1.) Money? What kind of money, please? We use a money substitute as money, not 'primary money.' Not even a money substitute as in a silver or gold certificate redeemable in coin. No, it is more pathetic than that. Our money substitute is a substitute for legitimate money substitutes. It is a second-degree money substitute. The money substitute that we pass as money is all debt, comprised slightly as base metal tokens and paper slips, but mostly of deposits and "securities." The money is nowhere and everywhere. It is everwhere someone's bank balance is positive. But if everyone were to try and withdraw his and her deposits all at the same time, we would find out that our money is nowhere. My wife has an account at the credit union, and the teller fussed because she wanted to withdraw $1,000.00 FRN. Need to phone in first so they can order it. Thanks! That'll be a lot of help in a panic.
(2.)Trillions...of what, please? What were you going to say? Dollars? The United States has been fooled into regarding paper coupons which redeem nothing and which represent someone else's debt, as dollars. Real dollars contain about an ounce of silver, and have "heft." Or a real dollar can contain gold that is of the value of the silver dollar, and also has "heft." Papers that sport the word dollar, no matter where they come from, no matter how official they look, are no more dollars than a piece of paper that reads "Cow," is a cow. But if you can be made to believe anything it is amazing what people can get away with!
The fair tax is a laudable mission. But until control of credit is wrenched from the state where it is centralized, and returned back to the private sector where it belongs, there is not much hope of restoring economic liberty to this land, fair tax or not.
The Mises Institute has been trashing the FairTax for years. So now they have a junior college teacher, cued by Rob Northrup, writing a missive that he obviously researched on Free Republic tax threads. I'm not impressed. Yawn.
Since there are only 18 clauses under Section 8 of Article 1 of the US Constitution, I submit that the federal budget should be divided into 18 parts, with 1/18th of each funding each of the 18 clauses.
Anyone who (positively) cites Gale in a critique of the NRST can be safely classified as someone who isn't serious in the first place.
And you could say the same for the paid for economists who the NRST quotes and puts on their website. Economists are a dime a dozen and you can find any number to say whatever you want to.
At least the NRST economists analyze the ill as written and don't change the underlying assumptions to prove a pre-determined point, as Gale does.
That is because the bill claims to raise money by having government tax itself. Silly assumptions like that are just stupid. It doesn't take a PhD from MIT to realize that is just fraudulant analysis by fairtaxers.
Yeah, it's so much easier to get people to buy your BS when you get them focused, as the author tries to do, on marginal rates rather than effective rates.
But thanks for pointing out another area where the author does his own misrepresentation. How many times does he go back to some variation on how everything will cost 30% more? He's trying to scare people with a marginal rate "sticker shock" rather than dealing with what the actual effect is.
Look, I can blow apart his "everything will cost dramatically more" thesis even with dealing only in marginal rates.
Example:
Today's item costs Joe Smith $100. We will accept Rob's thesis that prices will drop by 8% with the removal of corporate taxes and employer-side payroll taxes.And that's comparing the income/payroll tax's effective rate to the NRST marginal rate. When you actually figure in the NRST effective rate, even under Rob's numbers, "Joe" is paying less for that item in the post-NRST world than he was in the pre-NRST world.
Base item price: $92
NRST (29.87% exclusive): $27.48
Total Price: $119.48So, you're thinking, "see, the price went up by $19.48!" Not so fast, bucko. You see, Joe's current effective federal tax rate (income + payroll taxes) is 15%. That means he had to earn $117.65 to pay for that $100 item in the first place. Under the NRST, he has that entire $117.65 in his pocket.
So, that's a price increase in effective dollars of $1.83, or 1.83%. Given the rather vague nature of the assumptions, this is practically statistical noise, and quite consistent with the prediciton I've always made that effective prices will remain the same, plus or minus five percent.
The nest argument for the "Fair Tax" is that by combining all federal taxes into one clear percentage hit, many more people would be able to grasp what politicians are really doing with regard to taxes. Under the current system, politicians claim to have raised taxes or lowered taxes, but nobody but PhD economists can figure out if they really did, and the truth always boils down to one answer for some people and the opposite answer for other people. People would also have a much clearer picture of just how much of a hit the government is taking. A big chunk of our population is unable to do the math on their paychecks to determine what percentage of the gross is being confiscated in taxes. But a national sales tax would be clear to all but the truly retarded. If it's 20% one year, and 19% the next, it went down.
Fine. Let's exempt all federal employees from existing income and payroll taxes, since they are, according to you, fraudulent.
OK, I'll bite. This article (and reply number 7) are simply too long to digest here at work.
So I'm bookmarking for later.
(Altho, at first pre-read, the argument that fair-taxers are missing the point by not addressing government largesses is flawed since fair tax is aimed at addressing the separate problem of even-handed tax collection.)
Is that a bigger problem than out-of-control, Unconstitutional spending?
Besides, as much as everyone hates the current system, there are enough "beneficiaries" of the system that meaningful reform of any sort will be nearly impossible. Personally, I like the Steve Forbes plan of a flat tax that can be filed on the back of a post card. But good luck getting people to give up their tax credits for housing, children, education, medicine, etc. Our only hope is that technology will one day allow us to earn and manage our money out from under the watchful eye of big poppa gov.
While you may indeed THINK that (and while some -- like FairTax shills -- want you to believe that) it simply is not the case. ALL Federal taxes, embedded or not, wind up as Federal Tax Revenue. That number is easy to find; any report on the Federal Budget will provide the data for any year you choose.
As shown in Post #23 the combination of Personal Income Tax and FICA taxes represents about 80% of all Federal Tax Revenue ... and is growing as a consequence of the rise in Social Security funding/spending.
It is near impossible to know just how much of the cost of a good is inflated ...
Actually, it's not all that hard to figure it out. Data is available to anyone who wants to look that lays out what the components of the aggregate price level are ... taxes, labor, capital, profits, interest, etc. To summarize such analysys, which has been repeated countless times on these threads, Corporate Taxes represent less than 2% of the price of goods. The Employer part of FICA tax represents about 4% of the price of goods. Costs of compliance with the Tax Code represent about 1% to 2% of the costs of goods. In total, if ALL Corporate taxes, ALL Employer paid FICA taxes, and ALL compliance cost savings are returned to the Consumer through price reductions, price can only adjust, AT MOST, about 7.5% (before the addition of the 30% FairTax.) In reality, some portion of these sums will likely remain in price to be put to other business uses.
...due to the need to make a profit by each contributor to the production of a product, which is affected by taxation at each stage.
Actually you have the cause and effect backwards. The "need to make a profit" is not affected by taxation. Taxes are affected by profit: small profit, small tax. Large profit, large tax. The need to make a profit is what drives businesses to lower costs. The market drives prices. What's left over from the two is profit ... and a portion of profit is peeled off as tax ... just like your wages. Your wages are not "inflated" due to your need to have income; taxes affect the cost of labor in the same way they affect the cost of goods.
If you want to lower your tax burden (hidden or otherwise) you first need to lower government spending. The method of collection is secondary.
That makes the "net" price change for "Joe" $3.79 (3.79%) less than the current price. Again, still within the +/- 5% prediction.
The Mises Institute has been trashing the FairTax for years. So now they have a junior college teacher, cued by Rob Northrup, writing a missive that he obviously researched on Free Republic tax threads. I'm not impressed. Yawn.You would prefer a radio talk show clown?
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