Me too, let's get everybody together and meet at the harbor on April 15th. That is of course if you have a "permit" to host such a party.
Posted on 02/13/2005 10:41:05 AM PST by nsmart
The FairTax is the non-partisan national sales tax proposal that would replace all federal income taxes. These include personal, estate, gift, self-employment, alternative minimum, capital gains, FICA, and corporate and death taxes.
(Excerpt) Read more at WWW.FAIRTAX.ORG ...
So how much did you pay in income and payroll taxes imbedded in the prices of your consumption items? How much did you pay indirectly in compliance costs?I don't know, but it was certainly much less than the hidden federal taxes I would be paying through my state and local taxes when the FairTax charges them a tax on their purchases and the wages of their employees.
Can you show this to me? I have a hard time believing that a bill eliminating income tax (personal and corporate) being able to enforce an income tax.From the bill:
`SEC. 905. WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS.
`(a) In General- All persons, in whatever capacity acting (including lessees or mortgagors or real or personal property, fiduciaries, employers, and all officers and employees of the United States) having control, receipt, custody, disposal, or payment of any income to the extent such income constitutes gross income from sources within the United States of any nonresident alien individual, foreign partnership, or foreign corporation shall deduct and withhold from that income a tax equal to 23 percent thereof.
`(b) Exception- No tax shall be required to be deducted from interest on portfolio debt investments.
`(c) Treaty Countries- In the case of payments to nonresident alien individuals, foreign partnerships, or foreign corporations that have a residence in (or the nationality of a country) that has entered into a tax treaty with the United States, then the rate of withholding tax prescribed by the treaty shall govern.'.
Could each of you please provide us with your definition of wages?When I say wages would have to go down I mean nominal wages (pre-tax wages). Real wages (purchasing power) would stay approximately the same.
With all due respect, Dr. Jorgenson is a pointie headed professor who has been bought and paid for by FAIR and has never spent one hour in a real business. It is just the same old boilerplate crap that doesn't even specifically apply. He simply assumes prices on everything fall, interest rates drop, wages go up, yada yada yada. Not impressed. I can point to sources that says Clinton is an honest man, doesn't make it so.What Principled isn't saying (or, more likely, doesn't know) is that Dr. Jorgenson's mode is a full-employment model. Anyone who wants a job has a job. This can only happen if nominal wages can adjust freely to whatever level is required. Basically, Dr. Jorgenson's model allows for nominal wages to fall. Which is constant with what every other economist believes, if prices drop significantly, nominal wages must also drop.
Are you including the share of SS that the employer contributes out of sight of the employee? So, an employees wage would be something like (net pay + tax = gross pay + employee matching (ss+tax match) = total wage)?
If so, I might better understand your wage decrease statement. If not, clearly I'm still confused.
Thanks, I saw that later.
Me too, let's get everybody together and meet at the harbor on April 15th. That is of course if you have a "permit" to host such a party.
What makes you think that would change?
`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.
`(b) WAGES- For purposes of this section, the term `wages' means all cash remuneration for employment (including tips to an employee by third parties provided that the employer or employee maintains records documenting such tips) including self-employment income; except that such term shall not include--
`(1) any insurance benefits received (including death benefits);
`(2) pension or annuity benefits received;
`(3) tips received by an employee over $5,000 per year; and
`(4) benefits received under a government entitlement program (including Social Security benefits and unemployment compensation benefits).
`(c) SELF-EMPLOYMENT INCOME- For purposes of subsection (b), the term `self-employment income' means gross payments received for taxable property or services minus the sum of--
`(1) gross payments made for taxable property or services (without regard to whether tax was paid pursuant to section 101 on such taxable property or services), and
`(2) wages paid by the self-employed person to employees of the self-employed person.
Sorry, no savings there.
point of agreement
One thing I have noticed when people discuss the Fair Tax is that they forget about their paycheck. People are so conditioned by the government to think only about their take home pay (ie the money that the government lets you keep after confiscating their cut)that they forget about the sizable raise that they would get by ELIMINATING INCOME AND PAYROLL TAXES!! It seems the argument here is whether prices would go down due to the pressure of competition. It seems to make sense that they would. Take away the burden of corporate tax and compliance costs and this makes sense. One guy is going to lower his prices to go after a bigger share of the market and all of his competitors will be forced to follow suit or go out of business. The 20-30% anticipated drop in prices will be countered by the 23% NRST paid on new goods. Therefore prices will likely stay the same. Nothing wrong with this being a wash in my book and here's why. The part that everyone seems to forget is that on the day income tax and FICA stop taking their cut, you get a 20-40% raise. That is the beauty of this thing. You get a big raise and prices stay the same. Not to mention the fact that WE make the decision on how much tax we pay, not the government. I can remember thinking "man, I sure wish I could keep all of the money I make every two weeks" when looking at my paycheck. That is what the Fair Tax will do. Granted, the state will still get their cut (if you live in a state with state income tax) but the rest of that money is yours to do with what you want. It's your decision, not Washington's.
Take away the burden of corporate tax and compliance costs and this makes sense.Just how much do you think the corporate tax and compliance costs are?
from a self-employed standpoint that's exactly what would have to happen.
A self-employed person providing a service would have multiple taxation (something they claim to eliminate)...S/he would first have to remit 23% of thier gross income then face an additional 30% tax when they spend what's left.
Un-principled says it isn't multiple taxation because I'd collect it from the comnsumer (LOL)...then that means at least a 30% price INCREASE.
Are you including the share of SS that the employer contributes out of sight of the employee? So, an employees wage would be something like (net pay + tax = gross pay + employee matching (ss+tax match) = total wage)?I think (I could be wrong) most economists include the employer portion of the payroll tax in nominal wages because it is part of the "wage bargain" (I am going to pay you X for Y output). I believe they also include other benefits like insurance.
If so, I might better understand your wage decrease statement. If not, clearly I'm still confused.
Sorry, but filling out and mailing a report as to what I paid each employee in wages and possible benefits is much less than compliance as we know today.
I don't have any data to argue with this post, nor do I have any motivation to argue with it. What I read (hear) you saying is that the after tax price is constant and real wages are constant (spending power). That leads me to believe that you're saying the net effect to the individual is that there is no change as a result of the method of revenue collection.
Assuming that is correct, I still would support the NRST over the current income tax system. Why wouldn't we want to bring the cost of government into the plain view of the citizens being governed? In my opinion, that would be the single biggest step towards spending reductions that could be taken.
Sorry, but that is a huge problem. If I still have to pay you the same, I can not lower the price of my goods. That is the problem with much of the anaylsis. You can't have both. If I have to cut 30% off the price of my goods, I need to save 30% and that include cutting my employees wages in the amount of tax that is paid. If they pocket the savings, the price of the goods stay the same PLUS have a 30% tax. My compliance cost for taxes is less than 1% of my gross sales. It is not gonna save me much.
I am an S-corp, pay ZERO corporate tax. I pay my book keeper $50K per year, plus another $2500 for a CPA to file my taxes. My gross receipts are $7.5 million. I still have to pay my book keeper just to pay the 200 plus bills each month. My savings from th fair tax system at most would be $2500 (but I still have filings). Regardless, I still need someone to tell me where I am going get the other $1.7225 million dollars in savings so I can keep the price of my homes the same. Compliance costs/Corp. Taxes just ain't that big of a deal to me. The Fair Tax will kill my business, I know this for a fact.
Not to mention the fact that there would no longer be and agency of the federal government with the power to destroy any citizen it chooses, any time it chooses, with nothing more than an allegation!
The Fair Tax will kill my business, I know this for a fact.These talking about the home market need to remember that people would be paying tax on a portion of the interest, too. So home buyers would have to finance their taxes and then pay taxes in the interest they are charged to finance those taxes. Not technically double taxation, but the effect is the same.
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