Posted on 09/27/2004 2:41:31 PM PDT by LowCountryJoe
The most popular of the various national retail sales tax plans is called the FairTax. It is in both houses of Congress today as HB 25 and SB 1493. It is a replacement, not an add-on, for the federal income tax and for federal payroll taxes collected to fund Social Security and Medicare.
The FairTax provides a dollar-for-dollar replacement of all revenues now collected through such taxes and eliminates the need for annual and quarterly income tax filings, the surveillance by the federal government of wages and investment income and the need for anyone to hire an expert in order to comply with federal tax laws.
The FairTax is a progressive tax. The biggest-spending wealthy will pay an effective tax of $23 for every $77 they spend on new products and services. The poorest get money back. American families would receive a monthly refund equaling the amount of sales tax a poverty-level family would normally pay.
As such, the FairTax eliminates federal taxes on the poor, including highly regressive Social Security taxes. This automatic refund won't mean much to the wealthy but will be quite significant to low- and moderate-income families and to those on fixed incomes. Everyone receives the refund, including the wealthy, in order to eliminate both means testing for the poorest Americans and the need to track earnings for everyone.
The FairTax has no exemptions, no shelters and no complex tax dodges available primarily to the wealthy and special-interest groups. The only thing every taxpayer can know about the current tax code is that it is an 8-million-word mess that no one has ever read. But even a child can understand the 13 words that define the FairTax: "The FairTax is applied to all new goods and services delivered at retail."
The FairTax captures billions of dollars of revenues currently lost in the underground economy. Even drug dealers would pay their share of taxes when they purchase goods and services. The simple fact is, the more money one spends under the FairTax, the more consumption taxes one pays. Those who buy luxury items pay more; those who live more modestly pay less.
The FairTax also eliminates the IRS' unwelcome surveillance of every penny of income earned, loaned, won or invested by American citizens. In place of the huge bureaucracy created to collect federal taxes, the FairTax uses the states' sales tax infrastructure to collect taxes at the point of retail sale.
The intrusive interest from our government into citizens' financial status is eliminated overnight.
We can achieve the dream of upward economic mobility for all if we first believe our goal is attainable. The FairTax — truly an issue that delivers on the promise of individual liberty — will survive the distortions of presidential politics, and with a demanding public, the FairTax will achieve the congressional passage and a signature from the White House. It all starts with telling the public the truth and believing we can change things. I believe.
• Herman Cain also has served as chairman of the Federal Reserve Bank of Kansas City and as CEO of Godfather's Pizza. He recently ran for the U.S. Senate from Georgia.
There is no such thing as "imbedded" cost.
That is a marxist concept that wrongly assumes that companies merely "pass along" all costs and expenses to the consumer.
It is made worse by the false assumption that corporate income taxes are a "cost" when they are actually a confiscation of a portion of the profits (if any) that can only be calculated AFTER costs have been subtracted from revenues.
The "imbedded" arguement is based on absolutely bogus and fallacious theory.
Because of "pricing shifts", and the dollar declines to purchasing power parity with the peso, rupee and yuan, The American standard of living will also decline to the squalid poverty levels of third world nations like Mexico, India and China.
THAT is the outcome of your pathetic "tax reform".
Once again you have put your idiocy on display for all to see.
Once again you have put your idiocy on display for all to see.
You can't dispute the facts, so you resort to name-calling.
BTW, how is your bill coming to replace corporate income taxes with tariffs?
2nd request for an answer.
All costs of producing a product are imbedded in the product or the company wouldn't make any profit. Calling this concept "marxist" is simply absurd when almost the opposite is true.
Which happens all the time in a capitalist market economy.
QED
Businesses fail all of the time too.
Yet NRST shills insist that's the way it works in order to foist their convoluted scam on the American People.
You completely miss the point. A company that fails to make a profit goes out of business. A company that exists and is profitable is obviously embedding their costs into there products.
This isn't a rocket science.
It isn't rocket science, but it sure is a mystery to you marxists.
NO IT IS NOT A GREAT IDEA
GO to Canada and ask anyone there how they feel about their GST
they hate it with a passion usually found only in liberals
What I said was that you had, once again, put your idiocy on display for all to see and I will stand by that remark.
Any company which does not recover ALL it's costs, on anything other than a short term basis, will soon be an EX company. Most folks grasp that quite readily but YOU refuse in order to continue with your demagoguery.
Price is determined by supply and demand. Profit equals the price of the product minus the cost of the product. A company can not make products and sell them for less then the cost of making them, which includes taxes, and still stay in business. That isn't marxism, that is capitalism.
We have been over this ground a hundred times over the years and Willie STILL doesn't get it. Probably because he simply doesn't WANT to get it.
If Bush found a way to imply putting the IRS out of business permantly the whole debate would take on a different slant.. Remove the IRS; the democrat party would be naked... still dangerous but naked.. course ever democrat, RINO and other so-called moderates would fight that reality like the bubonic plague..
"There is no way the company could know what their tax obligation would be beforehand because market pricing does not guarantee a profit will be made."
Taking your logic to its conclusion, there is no way that a company could ever do a budget, since there are no guarantees that ANY budget assumption will be realized. Companies would just say to their investors "wait until the end of the year, and we will tell you what our financial performance has been. Don't expect us to give you or the market any predictions."
Take a look at a corporate income statement sometime,
corporate income tax obligations are NEVER included as part of "cost of goods sold".
What you WILL see is "Profit Before Income Taxes" and "Profit After Income Tax"
Corporate income tax is merely government confiscation of a portion of the profits (if any) that are earned, they are NOT a "cost" that can be "imbedded" and "passed along" to the consumer.
QED
Taxing consumption and not production is an ECONOMIC wet dream!!
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