Then they expect us to praise them like heroes when they have a so called soulution to THEIR own doings?
Pffffttttt....
Posted on 02/09/2004 6:48:54 AM PST by ancient_geezer
Tax laws grown far too complex By THOMAS C. MORRISON - IR Your Turn - 02/05/04 I have spent more than 40 years working with the federal tax code, first as a tax law student, then as an I.R.S. tax attorney, and then as a tax lawyer in the private sector. As we approach a new tax season, I am compelled to reflect on the obscene complexity of our federal tax code. Over time, most taxpayers have become fatalistically conditioned to accept this hopeless quagmire, watching the federal tax code along with explanatory I.R.S. pamphlets grow not by the number of pages, but by the pound. Neither the tax lawyers, nor the tax professors, nor the CPAs, nor the accountants fully understand the federal tax code. No credible tax professional will tell you otherwise. We muddle through endless complexities, enhanced by exceptions upon more exceptions. How many taxpayers still feel comfortable in preparing their own tax returns? For instance, how many nonprofessionals think they can adequately understand the complexities of at least six different capital gains rates, or of the phase outs for itemized deductions, or of the alternative minimum tax rules or of the applicability of kiddie tax rates (for just a few).
Don't blame the I.R.S. It is stuck trying to figure out what Congress has given them and it is no more omniscient than the rest of us in trying to figure out what all those words mean. Worse yet, the I.R.S. lacks needed resources to administer our overly complex tax laws. Without adequate resources, these laws can not be effectively administered. Without effective administration, revenues are lost and inequity results from lack of uniform enforcement. Congress does need to provide the I.R.S. more resources, but doing so remains self-defeating, as long as more verbal tonnage is added to the tax code.
If Congress cannot get the federal income tax code straightened out and pretty soon, it will die from its own weight, and without regard to the obvious inequity of its likely substitute, an arbitrary flat tax. Perhaps, the only way to achieve true tax simplification is for Congress to pass a new "two for one" tax law, requiring the deletion of two words for each new word added to the tax code. Or even better, why not demand a "common sense" tax law that would require each Congressperson to prepare and file his own tax form without any professional help, and if a senator or representative should make more than three mistakes on his self-prepared 1040, he would have to vote to repeal the law and replace it with a simpler one. What do you think?
Thomas C. Morrison is a Helena lawyer.
Then they expect us to praise them like heroes when they have a so called soulution to THEIR own doings?
Pffffttttt....
when they have a so called soulution to THEIR own doings?
Hate to say it, but the only solutions that mean anything are going to have to come via the legislative process and those same Congress Critters we insist on electing year after year.
The key is making it hot for the ones not willing to make the necessary changes, and doing everything we can to replace those that continue the same old game.
That's what primaries & the caucus is all about. And that is where our greatest leverage lay, the selection of who runs for office. A vote in a primary has a hundred times the weight of a vote in the general election.
Push & support candidates that are willing to make changes.
Isn't it ironic that the former Soviet Union figured out how to develop a simple flat tax that citizens can file on a postcard
Well, not exactly. I don't think we really want what the rest of their tax system looks like:
|
RUSSIA: PART TWO OF THE RUSSIAN FEDERATION TAX CODE August 10, 2000
Alexander Chmelev and Evgeny Astakhov Baker & McKenzie, Moscow Office
Sent by BISNIS, U.S. Department of Commerce, http://www.bisnis.doc.gov Judith_Robinson@ita.doc.gov, Tel: 202-482-2293. BISNIS sends this report as a courtesy to the U.S. business community. This is not to be construed as endorsement or sponsorship of any information or group. On August 5, 2000, Russian Federation President Vladimir Putin signed into law four chapters of Part Two of the Russian Federation Tax Code and Federal Law No. 118-FZ ôOn the Implementation of Part Two of the Russian Federation Tax Code and Amendments to Certain Federal Laws on Taxationö (the "Implementation Law"). The chapters of the Tax Code signed into law by the President are Chapter 21 - VAT, Chapter 22 - Excise Taxes, Chapter 23 - Personal Income Tax, and Chapter 24 - Unified Social Tax. These four Chapters and the Implementation Law were officially published in Rossijskaya Gazeta on August 10, 2000, and, with few exceptions, will become effective on January 1, 2001. The most sweeping changes introduced into the Russian tax system by this new legislation are as follows: 1. VAT (Chapter 21 of the Tax Code) Although Chapter 21 of the Tax Code does not change VAT rates or the general VAT structure, it contains numerous provisions, which will significantly affect most businesses in Russia. Most notably, Chapter 21 substantially modifies the "place of service" rules, which generally determine whether for VAT purposes a particular transaction has occurred in Russia and is, therefore, subject to Russian VAT. Effective from July 1, 2001, Chapter 21 also will treat export sales to CIS countries in the same way as sales to all other foreign countries, and will exempt them from VAT. On the downside, Chapter 21 will repeal a number of long-standing and important VAT exemptions, including an exemption for license fees for the use of intellectual property (such as, patents, copyrights, and trademarks), and will significantly narrow the VAT exemption for pharmaceuticals. 2. Personal Income Tax (Chapter 23 of the Tax Code)
Chapter 23 of the Tax Code will replace the current progressive tax rates ranging from 12% to 30% with a flat tax rate of 13%. This 13% rate will apply to almost all categories of income earned by individuals who are Russian tax resident. A 30% rate will apply to dividends, and to any Russian source income received by individuals who are not Russian tax resident. A 35% rate will apply to income from gambling, lottery prizes, deemed income from low-interest or interest-free loans, certain insurance payments, and excessive bank interest. 3. Unified Social Tax (Chapter 24 of the Tax Code) Chapter 24 of the Tax Code will replace the existing employersÆ contributions to four separate social benefit funds (which currently are imposed at an over-all rate of 38.5%) with one unified social tax. This unified social tax will have a regressive tax scale from 35.6% to 2% of an employee's salary with the lowest rate applicable to the portion of an employeeÆs annual salary in excess of 600,000 Rubles (approximately US$22,000 at the current exchange rate). It should be noted that under the Implementation Law, as a transition rule, the lower rate of this tax will be 5% rather than 2% during 2001. 4. Excise Taxes (Chapter 22 of the Tax Code) As a countermeasure to reducing rates of other federal taxes, Chapter 22 of the Tax Code provides for an increase in excise tax rates for gasoline and other oil products by almost 300%. It also provides for a less dramatic increase of excise tax rates for tobacco products and certain passenger cars. 5. The Implementation Law a. Turnover Taxes Effective from January 1, 2001, the Implementation Law repeals the Housing Fund Tax of 1.5% and reduces the Road Users Tax from 2.5% down to 1% and completely repeals the Road Users Tax effective January 1, 2003. These taxes are imposed on gross sales and have been among the most onerous taxes on business in Russia. b. Regional Tax Concessions The Implementation Law reconfirms the right of regional authorities to provide tax exemptions for the regional portion of federal taxes retroactive to April 1, 1999. This reconfirmation resolves an issue that arose in 1999 as to whether the regional portion of profits taxes could be reduced pursuant to regional incentive laws. c. Profits Tax Rate Apparently in compensation to local budgets for the cancellation of turnover taxes, the Implementation Law authorizes municipal governments to introduce an additional "municipal" profits tax of up to 5% of a taxpayer's taxable profits. Thus the maximum overall profits tax rate may be increased from 30% to 35%. This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS) |
Take Clinton's much vaunted college education tax deduction--you get nothing for the first year your kid is in school because of the way the law was written. In subsequent years you get a paltry deduction that hardly makes up for the dependent tax credit you lose when your kid turns 17.
Every year when I do my taxes (by computer program)my blood pressure goes up when I see all the special interest tax credits handed out to various groups, but not accessible to the average Joe.
Texan's in the 5th Congressional district have got a good one to support.
Hensarling stumps in Cherokee County
Republican Congressman Jeb Hensarling was in Jacksonville and Rusk Friday, stumping for the votes he'll need if he's to become Cherokee County's first Dallas-based representative since courts approved the state's controversial redistricting plan.
***"Hensarling also said he has co-sponsored a bill that would "abolish the IRS, and move us to a flat tax or national sales tax."
Here's 43 more worthy of our support NRST co-sponsors
The only way to get this done is to start by scraping the incumbents/liberals/socialists. That would mean just about all of them.
Isn't it time to scrap the progressive income tax and just have a federal consumption
tax and nothing else?
More than past time. The vehicle to do precisely that has been out there since '97.
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.S.1493
Sponsor: Sen Chambliss, Saxby [GA] (introduced 7/30/2003)
Title: A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.Refer: http://www.fairtax.org
I think it is prime time to push hard on getting more Congress Critters willing to make that change in the the law. Then push for enactment of the above as well as an Amendment to the constitution to expressly prohibit income and payroll taxes forever.
The only way to get this done is to start by scraping the incumbents/liberals/socialists. That would mean just about all of them.
If that's what it takes, then we had better get working on it. Course we have 43 now co-sponsoring the bill that would replace the income & payroll tax systems we know have in place. So that means we only need to replace or change the minds of less the 200 more to assure the job gets done.
That's what primary politics is all about. The time to put out the garbage.
As I see it, a Federal Sales Tax would have exceptions for foods, clothing items to a certain price (I think New York does this already) and medical treatment/supplies.
The "poor" would have exemptions in that the necessities are not taxed at all (should they be modest in their expenditures).
Neither necessary nor desirable. Let's try to keep it simple, and the exception here, execption their mentality out of it. Why should Congress be legislating what our necessities are?
Here is what is in HR25 to address that issue:
All legal residents will receive a FCA equivalent to the FairTax paid on essential goods and services. The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate.
Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size.
|
The 2001 "FairTax" Family Consumption Allowance Figures |
|||
|
Family Size |
HHS Poverty Level |
Annual FCA |
Monthly FCA |
|
One |
$8,590 |
$1,976 |
$165 |
|
Two |
$17,180 |
$3,951 |
$329 |
|
Three |
$20,200 |
$4,646 |
$387 |
|
Four |
$23,220 |
$5,341 |
$445 |
|
Five |
$26,240 |
$6,035 |
$503 |
|
Six |
$29,260 |
$6,730 |
$561 |
|
Seven |
$32,280 |
$7,424 |
$619 |
|
Eight |
$35,300 |
$8,119 |
$677 |
1) Federal Register: February 16, 2001, Pages 10695-10697).
[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer
A family of four, for example, could spend $23,220 per year free of tax because they will have received over the course of the year rebates totaling $5,341. $5,341 is the amount of sales tax paid on $23,220 in expenditures. A family spending double the "poverty level" or $46,440 per year will effectively pay tax on only half of their spending and, therefore, have an effective tax rate of 11 ½ percent or half the FairTax rate.
The beauty of the FairTax is that you can control how much you pay in taxes. If you happen to save, invest or spend a portion on used [previously taxed] items, you can get your effective tax rate below 9%.
[71] To illustrate the plan's progressive nature we can examine the tax burden that a family of four will have at various annual income levels (or in this case, annual spending levels).
Not only does every family receive a FCA based on family size, not income, but they will also receive 100% of their paycheck:
Fedup Smith makes $39K per year...once the FairTax is the law of the land he will receive an instant increase in pay of $200.00 per week. Since he has a family of four, he will receive a FCA of $445 per month, for a total of $1,305.00 additional income per month that he can do with as he sees fit
No it won't. Congress likes it the way it is, because...
"Did you really think we want those laws observed?" said Dr. Ferris. "We WANT them to be broken. You'd better get it straight that it's not a bunch of boy scouts you're up against... We're after power and we mean it... There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted -- and you create a nation of law-breakers -- and then you cash in on guilt. Now that's the system Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with." -- Ayn Rand, Atlas Shrugged
The tax code is the primary way the political class has of ruling the entrepreneurial class. Without it, Bill Gates would rule America, and the Kerrys and Kennedys would be relegated to sitting on the front porch in Martha's Vineyard, complaining about the weather making their arthritis act up.
The tax code is the primary way the political class has of ruling the entrepreneurial class.
Replace the political class that doesn't get it, got it? One at a time, if that is what it takes then that is what we need to do.
Simply put, investment is not taxed while consumption of new goods and services are taxed. Education is an investment.
What allows the tax to be fair imo is that each person with a SSN can choose to receive a "prebate" of tax that the average person will spend on necessities in the coming month. The effect is to make necessities of life tax-free. IMO they should be. Of course the level of necessity spending differs by family size and by family - but the average is used (avg as determined by HHS annually).
Geez can post the table, if he would be so kind!
Geez can post the table, if he would be so kind!
Beat yah!! LOL see reply # 17 ;O)
The problem with exceptions like that is that once you start making exceptions, special interests will keep pressing for more exceptions.
It is often argued that a consumption tax is regressive, i.e., it takes a bigger percentage of the income of the poor than of the rich, because a bigger share of the income of the poor goes for things like food. This is one reason for exempting "necessities."
I propose this alternative. First, no exceptions. Tax all retail purchases. I emphasize retail, because that excludes private sales between individuals. This has the advantage that enforcing the tax is simple. "How much gross income did your store/restaurant/enterprise have? Pay X% of that as tax." Note that this keeps the tax collectors from snooping into the financial affairs of anyone. Gross income doesn't get involved with things like whether an expenditure is a legitimate deduction. There are no deductions.
Then we need to take care of the poor. Take the official poverty level. Calculate how much sales tax a person at the poverty level would pay: PL*X%. Send EVERYONE, poor, rich, whatever, a rebate in that amount. Again, this keeps the tax collector from getting involved in how much you make, whether there should be deductions, etc. In this scheme, the government doesn't need to know how much income you had. Even if you're in business for yourself, as I am, all the tax collector would need to know is what your business's gross income was. How that was split up among various categories of expenses, and your net income, is irrelevant for tax purposes. If you have income not connected with the business (pension, annuity, interest on investments, whatever), the tax collector doesn't need to know that. It will be taxed when you spend it, whether on items for the business or on items for your own consumption.
I think this scheme answers all the objections againts a flat tax. It has the additional advantage that it doesn't give special interests a wedge to start complicating it. Neither does it give the tax collector any information about your personal affairs, or the internal operations of your business.
Then we need to take care of the poor. Take the official poverty level. Calculate how much sales tax a person at the poverty level would pay: PL*X%. Send EVERYONE, poor, rich, whatever, a rebate in that amount.
See reply 17, HR25, the Fair Tax legislation proposes precisely that, as part of of a pure retail only sales tax.
It's only slightly more complicated than that -- in order to avoid a VAT-like effect, an NRST would apply only on consumer purchases, business-to-business sales would not be taxed. This would require gross income to be reported only on sales to consumers, but will still require separate tracking of business vs. personal use of property. This should only be a real issue for someone who converts business property to personal use and vice-versa.
Good point. I hadn't thought of that.
Precicely WHY they HAD to have the damned thing as explained by Beardsly Ruml (former FDR advisor) to a group of New York lawyers some years ago in a speach titled Taxes for Revenue are Obsolete.
Quite understandable given the fact that the progressive income tax is item # 2 on a ten point list of things Karl Marx and Frederick Engels, in their Manifesto of the Communist Party, felt needed to be done in order for the "fellow travelers" to take over developed countries!
Mr. Morrison is EXACTLY on point!
I agree and have been working HARD on that. In fact, I spent this past saturday in a room full of folks running for U.S. Congress and, as a result of that meeting, can report to you that there will be MANY new co-sponsors on our bill next term.
The NRST would not abolish or change any state, county, or city taxes, even state or local income taxes. And it would be on top of any state or local sales taxes.
The real estate bug has long been known and tends to be ignored in discussion. The current problems with business-to-business and business-to-nonprofit-organization transactions is also ignored. And the requirement for employer income reporting for the low income level bribe rebate also seems to be ignored.
New homes purchases would be taxed, but not the materials used to build the home, correct? Used home purchases would not be taxed, correct?
Correct, since the rule it is based on "tax once but only once" requires that. In reality you are still taxed on the materials that go into the house that makes up part of the purchace price.
The contractor does not pay the tax on his supplies as those go into building the house that will be sold.
"Used" houses have already had taxes paid on them (grandfathered on the presumption that it was paid through income/payroll etc taxes) or resale where the NRST had been paid. The definition of "used" in the legislation is anything for which federal tax has already been paid.
If a business purchased a home, would that be tax-free? If so, what would keep that business from selling the home then to the owner of that business, thus avoiding the sales tax?
If a new home is used within the business the business would not pay a tax, if however it is diverted to personal use the tax would be collected same as a purchase of a "new" home. One on which federal taxes have not been paid.
If a business were renting the house, the tax would be collected with the rent. If the business sells the house as in a retail sense to a final consumer, the tax would be collected from the buyer and remitted at that time.
It is the final consumer that pays the tax, the retail business(seller renter etc.) acts only as a collection point for the tax.
A national sales tax would not abolish property taxes, since those are county taxes, and not federal?
Correct, we are talking about a federal tax, state taxes are totally independant of federal control per the constitution. In what a state does as regards taxing its one citizens the federal governent has no say.
It's "ignored" because that's a non-existant strawman. The rebate applies to everyone, regardless of income level or any other social status. The only reason income is used in any examples is to demonstrate the effect -- it is not a basis for the rebate. Bill Gates is just as eligible as anyone else.
Not exactly correct. Property taxes and the like are strictly local matters untouched by the NRST. Income taxes, however, are likely to go away since the NRST says that any state that administers it must conform their own tax codes to its definitions, which includes elimination of income taxes. It is possible, but unlikely, that some states will allow someone else to adminster the NRST colelction in their state -- in those cases, income taxes would be a matter for that state.
And it would be on top of any state or local sales taxes.
Change "on top of" to "in addition to" and you would be correct. The NRST does not tax taxes -- it is based on the retail prices of the goods or service, exclusive of taxes. The NRST and state/local sales taxes would each be based on the untaxed price of the item but not upon each other.
I am all for what this guy says, except for this part:
and without regard to the obvious inequity of its likely substitute, an arbitrary flat tax.
There is nothing arbitrary about a flat tax. We set a rate for everyone to pay that give the government the money it needs to pay its bills.
In contrast, what we have now is quite arbritray.
And the requirement for employer income reporting for the
low income level briberebate also seems to be ignored.
Read the bill, balrog. Your misinformed opinions are showing.
There is no employer reporting for individual income for purposes of the NRST or the Family Consumption Allowence.
The FCA is precisely the same amount for every legal resident from the poorest to the richest, there is no need whatever to report income to receivb it:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer: http://www.fairtax.org
The real estate bug has long been known and tends to be ignored in discussion. The current problems with business-to-business and business-to-nonprofit-organization transactions is also ignored.
What real estate bug is that?
New buildings sold by contractors directly to consumers are taxed.
New buildings held for resale by a business for that purpose are not taxed until they are sold to the final retail consumer.
New homes held for rentals, the tax is collected with the payment of the rent.
Used, (i.e. home on which federal tax has been paid once) homes are not taxed a second time under the NRST.
No business to business purchase are taxed, No business to non-profit is taxed.
Read the bill balrog.
Eligible? It's not automatic? Do I have to fill out a form? Do I have to be a citizen? Do I have to reside in the USA? Who will verify the count on my household? What penalties will apply if I fraudulently claim 99 dependents or live in Aruba? Who will investigate such "crimes" if not the current Gestapo IRS?
The existence of the rebate is a big flaw in this plan. Even here, the debate on what to include or exclude from taxation is always debated - politicians will manipulate the new tax code just like they do now.
And businesses and renters will scream like stuck pigs when their effective rent goes up 25% per month. Quick, send more lobbyists and bribers to our rescue in Washington, DC! Oh, my, I can't wait to see how this fast shuffle with the tax code will play out!
Yes, you have to fill out a form. I believe the information requied is name, address, and SSN of each person in the household. Verification is an issue for the SS Administration. I don't recall the penalties off the top of my head -- why don't you read the bill? (As this will also correct you on several other points.)
The existence of the rebate is a big flaw in this plan.
I don't consider it a big flaw. Personally, I think it is unecessary from a practical standpoint -- these are taxes already built into the price of goods, so no one will be paying a higher burden than they currently do -- but I do accept it as a political necessity to get enough support to pass the bill.
Even here, the debate on what to include or exclude from taxation is always debated - politicians will manipulate the new tax code just like they do now.
There is no debate, only unfounded speculation by people who have not read the bill. All end-use goods and services are taxed. Period.
And businesses and renters will scream like stuck pigs when their effective rent goes up 25% per month. Quick, send more lobbyists and bribers to our rescue in Washington, DC! Oh, my, I can't wait to see how this fast shuffle with the tax code will play out!
Why would their effect rent go up at all? The landlord's costs will go down because he isn't paying income taxes on his profits (or shuffling money around unproductively to avoid income taxes) -- remember that the average price of goods and services is already 20-40% of the final price. The NRST substitutes one tax for another. If a landlord was dumb enough to try and just up the rent by 25%, he'd quickly find himself without tenants because his competitor would be charging 20% less and still making his profit.
There is nothing arbitrary about a flat tax. We set a rate for everyone to pay that give the government the money it needs to pay its bills.
LOL, how do you figure any tax rate is set? It's always arbitrary up to the point that a substantive proportion of the electorate screams about it being too high. That is what sets the rate of any tax.
The rule for any income tax is the larger the voting block that you can be collected into a voting block, the lower your tax rate. There are alot more poor people than rich people subject to paying income taxes. Think about it.
In a sales tax situation, the seller cannot distiguish one individual from another by income thus everyone, of necessity, is hit with the same rate at the retail register. Everyone gets to feel the burden equally which means the door squeeks sooner and louder resisting upward changes.
Purpose dosn't enter in to it. Reporting wages is still required:
H.R.25
Fair Tax Act of 2003 (Introduced in House)
`SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY ADMINISTRATION.
`(a) IN GENERAL- Employers shall submit such information to the Social Security Administration as is required by the Social Security Administration to calculate Social Security benefits under title II of the Social Security Act, including wages paid, in a form prescribed by the Secretary. A copy of the employer submission to the Social Security Administration relating to each employee shall be provided to each employee by the employer.
What is there to stop everyone in the market for a new home to set up their own "business", buy the home as a business asset, thus completely avoiding federal taxes
You wouldn't be able to live in it and the state tax authority will be watching what happens in the "new" home situations built by contractors and all certified businesses. The NRST does require "businesses" to be certified enabling them to purchase without tax.
If you build it yourself, as an individual, not a "licensed" contractor, guess what you pay the tax on all the stuff (purchased at retail) that goes into building that home. The tax is paid no, problem. Tax once but only once is the rule.
Now if you like just dumping money into an "investement" keeping repaired until you sell it. That's fine. The tax will be collected on your sale to that future consumer.
That is correct. Wages (not total income) are still required to be reported because they are used to determine future Social Security benefits. If Social Security can be massivley reformed or eliminated (and entirely separate issue), then this requirement can go away.
The discussion, however, was on income being a predicate for the FCA (a/k/a rebate) -- it is not.
He did, but might not have been sufficiently clear connecting the dots in your reply. One of the problems with a flat tax is that it still exempts a large portion of the population from paying the tax. The higher the tax rate, the smaller the portion of the people paying the tax becomes and the larger the group that doesn't pay taxes. As this second group gets sufficiently large, they have enough voting power to place the "paying" segment of the population completely at their mercy.
Holy cow! Have you ever rented an apartment or house? Have you ever run a business? Do you know what a lease is?
300 million leases are not going to be renegotiated overnight because a new law goes into effect. Nor is there any legal requirement (or even any reason) for a landlord to suddenly change his rent structure or let people out of their contractual obligations.
If you rent or lease anything, you will be subject to the tax on the rent you currently pay while the rent itself will not change. Thus, you will suffer a 25% increase in the amount you must pay to your landlord.
Now tell me this isn't a mystery to you ...
So much for all those "compliance cost" savings, huh?
Yes, I do know what a lease is, do you? The lease is a contract that says that the renter pays a particular (and typically fixed monthly) rate for the use of a piece of property. As you pointed out, the NRST would not change the terms of the lease -- if I paid $1000 before, I would still pay $1000 -- it doesn't give the landlord rights to change the terms. With the NRST in place, 23% of that $1000 ($230) would be remitted to the government in taxes, leaving the landlord with $770 after taxes.
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