Posted on 04/23/2004 4:39:23 AM PDT by Remember_Salamis
It isn't just the price, it is the loan to value ratio. That 30% can't be financed since few houses can be profitably built for 23% less than market value.
Yeah, it would kill the housing market deader than a doornail.
That is because they are seeking to make it revenue neutral. Even with the inclusive-exclusive shell game it is exhorbitant.
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Another classic lewislynn lie
So if "of the gross payment" doesn't really mean "of the gross payment" who's really the liar?
YEP, I was right, "gross payments" means "gross payments" without exceptions.
Add in that people will have more take-home pay (no income tax or FICA taken out of their checks) and lower interest rates, and I'd be more worried about the fate of landlords, because all of their customers will be flocking to buy houses.
FICA Might be repealed but the "compliance cost" of reporting the income to SS isn't.
You're wrong once again.
Give the salesperson the 10 bucks you owe them, and tell the government of eat s***
`SECTION 1. PRINCIPLES OF INTERPRETATION. `(a) IN GENERAL- Any court, the Secretary, and any sales tax administering authority shall consider the purposes of this subtitle (as set forth in subsection (b)) as the primary aid in statutory construction.
`(b) PURPOSES- The purposes of this subtitle are as follows:
`(1) To raise revenue needed by the Federal Government in a manner consistent with the other purposes of this subtitle.
`(2) To tax all consumption of goods and services in the United States once, without exception, but only once.
`(3) To prevent double, multiple, or cascading taxation.
LOL!
You're making up rules as you go...Land along with all the improvements on it is "real property" and subject to tax AS defined in the bill.
You really should read it.
But when you describe a sales tax with the language of income tax, you are doing exactly that. People aren't going to relate inclusive to exclusive, they are going to relate exclusive to exclusive.
We've had this discussion before. Just imagine trying to explain this inclusive-exclusive thing to a Jay-walking type person who is about to go vote.
How do you figure? If the rate were 23%, your bill would be $12.30. If it were 17%, your bill would be $11.70. How do you get $13?
As to the price of homes rising by a rate equal to the sales tax rate, if income tax and compliance costs on you and your suppliers were eliminated, wouldn't the costs of building a house for you and your competitors also decrease? Wouldn't the market force you to drop the retail price accordingly?
Have you ever tried to figure out how much income tax and compliance costs are hidden in the price of dry wall, plywood and concrete?
It's very easy. If you make $100, and pay $20 in taxes, what is your tax rate? If you spend $100, $20 of which is taxes, what is your tax rate?
Any sane person is going to say 20% both times -- the tax-inclusive method is acually the simpler and more intutitive form. It is also a fair comparison -- if you took the above example, and said that the former is 20% whaile the latter is 25%, it makes it sound like the latter is more, even though it is the same amount of money ($20) in each case.
2) If the land in question is not in use for business purposes on the day prior to implementation of the act, (i.e. the NRST), it is residential and the sale of it cannot be taxed by the NRST act as it is defined as used property not subject to the NRST.
`Section 2(a)(16) USED PROPERTY- The term `used property' means--
`(A) property on which the tax imposed by section 101 has been collected and for which no credit has been allowed under section 203, and
`(B) property that was held other than for a business purpose (as defined in section 102(b)) on December 31, 2004.
Thus residential land, is not taxed under the NRST
The most that can be taxed under the NRST HR25, as regards residential property, is the sale of a new construction house. And once taxed by the NRST, that cannot be taxed again in future resales of the same house or property it sits on.
Refer: definitions and implementation of the sales tax sections in:
H.R.25, S.1493
SPONSOR: Rep Linder, John
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.
The only person making things up around here is you, Lewis. Any property that has already been subject to tax prior to the enactment of the NRST is exempt from being taxed again by the NRST.
You really should read it.
I have. The difference between you and me is that I understand it.
You're making up rules as you go...Land along with all the improvements on it is "real property" and subject to tax AS defined in the bill.
You really should read it.
It is obvious you haven't.
If the land in question is not in use for business purposes on the day prior to implementation of the act, (i.e. the NRST), it is residential and the sale of it cannot be taxed by the NRST act as it is defined as used property not subject to the NRST.
`Section 2(a)(16) USED PROPERTY- The term `used property' means--
`(A) property on which the tax imposed by section 101 has been collected and for which no credit has been allowed under section 203, and
`(B) property that was held other than for a business purpose (as defined in section 102(b)) on December 31, 2004.
Except that in some places (Texas) illegals currently build houses and they don't pay taxes. That is why you can occasionally find a new home for $50/sf here. Plus the amount of untaxed cash deals is staggering. As much as preventing drugs, civil forfieture is probably meant to increase the cost of doing business tax free, but that is another subject.
I support the idea behind a national sales tax, I am just skeptical of this proposal.
He's right in that if the pre-tax price was $10.00, the post-NRST price would be just under $13.00 ($12.99 to be exact) -- because $2.99 (the tax) is 23% of $12.99 (the total inclusing tax). In "tradtional" sales tax terms, the 23% NRST rate would be the same as a 29.87% sales tax. The 23% ("tax-inclusive") form is used so it can be equitable compared to the income and payroll taxes it replaces.
Where the example is misleading is the assumption that today's $10.00 item will remain $10.00 pre-tax under the NRST. That assumption requires the fallacy that the post-tax price today equals the pre-tax price under the NRST -- when in reality, the embedded cost of taxes and compliance will keep post-tax prices roughly the same under both systems.
And thanks for the example that the cost of taxes does indeed affect the price of the finished product -- there are some who frequent these threads who delude themselves into thinking that sales price and tax costs to the producer have no relationship.
You're being fooled.
`(b) Rate-
`(1) FOR 2005- In the calendar year 2005, the rate of tax is 23 percent of the gross payments for the taxable property or service.
$10.00 plus 30% = $13.00
$3.00 is 23% of $13.00(gross payment).
Yeah, but I don't see how it will work to the advantage of NRST. The tax is being paid whether it is coming out of income or consumption, and to be revenue neutral it has to be the same amount. You can't recoup those income taxes by cutting pay, because the guy whose pay you would be cutting still has to pay taxes.
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