Skip to comments.Income taxes - The fool's game
Posted on 08/29/2004 7:17:58 PM PDT by det dweller too
Income Taxes - The fools game
The political season is heating up again and the politicians are busy playing the fools game of appealing to our darker instincts. They call on us to tax the rich and everyone cheers, except a few that are immediately labeled as selfish and thereafter ignored. In the end, the politicians usually get their way by convincing the majority to raise income taxes on the rich.
The reason it is a fools game is the sad fact that the income tax operates as a hidden fixed cost on domestic business. If you put a large income tax load on the business owners, even if you deduct 100% of the income taxes from the workers, the price of the products they make still goes way up. In the past this was met with a yawn and a shrug as everyone paid the new price, but today there are alternatives. The businessman today that loses profitability because of higher taxes simply can turn to sources outside the US for products that are beyond the reach of our income tax laws. In this way, the businessman can support the tax change voted in by the majority while at the same time maintaining his profit margin by switching to imported products that undercut the pricing from domestic businesses. As the domestic businesses try to compete, they look for ways to cut costs. Since the tax costs cannot be avoided, the only area left to cut is the cost of their domestic labor. In the end it is the majority who voted on taxing the rich that end up losing their jobs, benefits, and wages.
The only effective way to quit this fools game is to stop hiding the cost of income taxes in our domestic products. Instead of income taxes, we should consider a simple excise tax on all products sold in this market, regardless of where they are made. Note that this is not a sales tax or value added tax, which can be abused by taxing the same product multiple times. Taxing a product once when it is brought to market takes the cost out of the product itself and puts it into the act of marketing the product here. Import and domestic products marketed here would be taxed at the same rate and exports would not be taxed at all. This will remove the hidden cost penalty that have been causing the loss of jobs in the US and immediately improve US global competitiveness.
Fair Tax Act of 2003 (Introduced in House)
`SECTION 1. PRINCIPLES OF INTERPRETATION.
A Taxreform bump for you all.
If you would like to be added to this ping list let me know.
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 retail sales tax:
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 trouble I see with sales tax is that it rubs the tax in the face of each purchasing consumer at the point of purchase. There are people who will see that the taxes go to pay for our infrastructure and that is the price we pay for a civil society, but there is a very large group who will not see that, They will focus on the added charge to the bill in front of them and they will freak. they are typically democrats BTW.
An excise tax, on the other hand, we have had for over 200 years and is a much more digestable tax for the average citizen. Everyone knows at some level that there are large taxes on liquor, but nobody has the fact that the liquor bottle they are buying for $20 has about $18 in taxes in it. People have gotten used to the tax, they don't object too loudly to it and life goes on.
If you want to focus on a sales tax as the method, it will work and everything said in that video is true, except that it will never get beyond a pep rally of republicans, because the democrats will kill it every time.
I just want to be practical, and maybe see motion towards this concept before the parasitic losses to taxes destroys my kids America.
That is why I like it, I want every citizen to be fully aware of the cost of government because that is the best way to get them to try and reign it back in.
Look at the swift boat vets. Kerry tried to ignore them, but they struck a big nerve and eventually Kerry had to confront the problem they created. He still is dodging the issues, but he is having a hard time because they are hanging on their simple truths and not being drawn into a big fight that they would lose.
You have a good night. I gotta 5AM wakeup to go back to the daily grind.
Discussions with focus groups of Americans showed that what citizens want is a tax system that provides Simplicity, Uniformity, Visibility and Fairness. The FairTax achieves these objectives through:
Simplicity - one rate for everyone; no tax filings
Uniformity - all benefits, all regulations, all exceptions, imposed on all citizens equally
Visibility - any change in the tax rate shows on every cash register receipt
Fairness - it is progressive, protecting the poor through a tax rebate on the necessities of life; no loopholes, therefore everyone pays the same rate on every purchase
And in addition, the FairTax produces the following:
* It lets every worker keep their entire pay check - no payroll or income taxes
* It allows those at/below the poverty level to have zero or negative taxes
* It lets retirees keep their full pension or Social Security checks - untaxed
* It lets everyone keep their capital gains and investment income - untaxed
* It encourages savings & investment - creating greater national growth & productivity
* It encourages repatriation of wealth from tax havens
* It stimulates exports - leading to greater U.S. employment
* It stimulates economic growth and job formation
* It eliminates gift and inheritance taxes
* It taxes spending of gifted and inherited wealth more fairly
* It has a lower cost of enforcement
* It makes the federal tax rate very visible, and therefore, politically risky to increase
* It ends all personal and corporate income tax filings
* It eliminates the IRS and frees $8 Billion
* It frees the $250 Billion tax accounting/law industry for more productive employment
* It eliminates tax loopholes - no filings, no exemptions, no loopholes
nice list, Bad. i will steal it!!
"The trouble I see with sales tax is that it rubs the tax in the face of each purchasing consumer at the point of purchase. There are people who will see that the taxes go to pay for our infrastructure and that is the price we pay for a civil society, but there is a very large group who will not see that, They will focus on the added charge to the bill in front of them and they will freak. they are typically democrats BTW."
And just what is the negative aspect of making EVERY citizen aware of the cost of the entitlements they demand from the politicians? What is wrong with pointing out the blatant hypocricy of the moochers?
"If you want to focus on a sales tax as the method, it will work and everything said in that video is true, except that it will never get beyond a pep rally of republicans, because the democrats will kill it every time."
With all three branches controlled by "Republicans" why would this be an issue? Could it be because the Republicans are no longer conservative and are just as interested in bribery of the electorate as the Democrats?
The NRST is not only a tool to restore the freedom to enjoy the fruits of our effort, it could also be a tool to take back the Republican party! Vote for true Conservatives, and utilize HR25 as one of the identifiers available!
It completely untaxes the poor, saves SS/MC, and creates jobs.
But the repubs got hold of it first - so Dems automatically oppose based on politics (not the good of their constituents). Also, the measure would eliminate the class warfare weapon.
I can see most of what you're saying, however, how do you "untax" a group of people that are currently not taxed, and in fact benefit by receiving payment from the government in the form of the EIC?
The EITC is a horrible thing - it is in place to buy votes IMO. But those people are indeed paying invisible tax at the counter. The EITC should be gone. The nrst does eliminate it.
Those people pay no payroll taxes and often (usually) pay no income tax and are even at times are net tax recipients. They do, however, pay taxes in the prices of goods they buy whether they're necessities of life or not.
Taxes on necessity level spending should be gone IMO. The nrst does eliminate it.
Your point about the EITC is well taken. Nevertheless, the nrst prevents necessity level spending from being taxed.
You can view this in two ways - that it's bad to untax necessities or that it's good.
IMO it's bad b/c some people will not be net payers - this is mitigated by the fact that folks will have to cough up the cash at the register...so they will at least feel the cost of the beast. As it is now, they have no idea that they're paying tax and so clamour for more services.
OTOH it's good because it makes the nrst politically viable.If it were regressive it would be far more difficult to pass.
It's a bitter pill... increase the rate by 1.9% to make it possible to attain the vast improvement of eliminating the income taxes, payroll taxes, and withholding.
my 2 cents.
We're in agreement here. I think I'm leaning to the "good" side of the proposed payments, just because they are sent to everyone, regardless of social status, therefore eliminating the tool of class warfare. Plus it allows each individual to chose what is necessary, instead of allowing for special interest groups to lobby for their commodities to be classified as necessary.
One problem I have is the classification of "# of persons in a family" qualification. We all DECIDE what lifestyle to participate in(single, married, children, etc.) and we should all be responsible for those choices. I do, however, see the political cards that this gives to the NRST. I can accept the changes one step at a time........
I tend to forget about the imbedded taxes when initially looking at things, thanks to these threads I am changing the automatic responses to the logical responses (I think).