My Prediction if the Fairtax is passed

[Cannoneer]

No, but they will be out of business when the competition prices them into oblivian. It is called free market economics.

[Cannoneer]

You are exactly right. We are attacking the carnivore at the wrong end. It would be better to severly limit the government’s ability to spend. No matter how much tax is collected, they are willing to spend whatever they wish. Thus the defecit. NO MORE GOVERNMENT RUN SOCIAL PROGRAMS, PLEASE!!!

[savedbygrace]

The Fairtax would put a 30% tax on my labor. As a small businessman, I earn $600/day for training my clients. If the FT somehow got passed, I’d have to charge about $780/day, and send about $180/day to the feds, leaving me the same $600.

You think I’m going to reduce my day rate by 30%? If I do, I’m not getting any benefit from the FT, if I don’t, my clients are suddenly paying 30% more.

So explain how the FT is a good thing for me.

[groanup]

I guess that's why the last time I flew across the country I got a sandwich in a paper bag rather than a hot meal on a plate.

Yeah, that explains it,...riiighhht.

Actually I think you got a sandwich because you were flying coach. Those of us in first class were dining on steak and lobster.

[groanup]

leaving me the same $600.

Which you don't have to pay ANY income tax on. And, if by choice, you make no purchases over and above the prebate percentage you'll NEVER pay any taxes on that money.

[Man50D]

Which you don't have to pay ANY income tax on. And, if by choice, you make no purchases over and above the prebate percentage you'll NEVER pay any taxes on that money.

Not to mention the elimination of hidden/embedded taxes and reduction in compliance costs will reduce prices approximately equal to the FairTax rate(23%). The end result is prices will remain about the same as they do with the income tax once the Fair Tax rate is included.

[navyguy]

“I guess that’s why the last time I flew across the country I got a sandwich in a paper bag rather than a hot meal on a plate.”

Yeah... it was because that tax was removed. It had nothing to do with rising fuel prices, increasing cost of aircraft parts, union negotiations and the cost of increased security. Nope, couldn’t be any of that...

[Man50D]

It would be better to severly limit the government’s ability to spend.


No tax code is or can be designed specifically to reduce spending. That is a separate issue. However The Fair Tax will reduce government spending to some extent once The Fair Tax abolishes the IRS and its 11 billion dollar price tag. It will keep spending in check. Government could only increase spending under The Fair Tax by increasing the Fair Tax rate. Doing so would result in a corresponding decrease in spending by consumers. Less spending by consumers will lessen the tax collected by the government and consequently force a reduction in spending. Congress can only maximize tax collection by keeping the tax rate and by association spending, within reasonable bounds. This concept was recognized by founding father and first Secretary Of The Treasury Alexander Hamilton. To quote:

"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed-that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."

[longtermmemmory]

Are these the Michael Dukakis Supporter Ecconomists or the John Kerry Supporter Ecconomists.

Perhaps we should look to the Algore ecconomists too.

please, if ecconomists knew anything, all ecconomists would be wildly rich instead of whoring a Tax Scam.

[lucysmom]

You think I’m going to reduce my day rate by 30%? If I do, I’m not getting any benefit from the FT, if I don’t, my clients are suddenly paying 30% more.

You will be free of those burdensome compliance costs. Nor will you have to fear the IRS agent under your bed.

[lewislynn]

And, if by choice, you make no purchases over and above the prebate percentage you'll NEVER pay any taxes on that money.

Or if he didn't want to wait for the Fairtax, he could, "by choice", quit his $600 a day job/business and work at Mcdonalds to live the same lifestyle as you suggest he live after the Fairtax.

[dirtbiker]

What's stopping them from doing that now?

What I'm talking about is after the tax is enacted, all embedded taxes are eliminated.

This will reduce the cost of doing business by around 20-30%, to everyone. They can either decide to keep their windfall, or reduce their prices BACK to what their profit margin was to begin with (a la the airline industry).

Nothing is stopping them from doing it now, and there is no "race to the bottom" (whatever the heck THAT means), except for prices.

[dirtbiker]

On top of that: ALL TAXES ARE PAID BY THE END USER!!!

Who pay them NOW?

NEWS FLASH! ALL TAXES NOW ARE BEING PAID BY THE END USER!

[dirtbiker]

Or if he didn't want to wait for the Fairtax, he could, "by choice", quit his $600 a day job/business and work at Mcdonalds to live the same lifestyle as you suggest he live after the Fairtax.

Speaking from experience?

[savedbygrace]

That’s a non-responsive reply to MY situation. Read my post again of you really want to answer.

[savedbygrace]

That’s a non-responsive reply to MY situation. Read my post again of you really want to answer.

[savedbygrace]

That’s a non-responsive reply to MY situation. Read my post again of you really want to answer.

[savedbygrace]

Excellent burn, lewislynn.

[Man50D]

That’s a non-responsive reply to MY situation. Read my post again of you really want to answer.

You should heed your own advice. My statement was on point.

Post #83: "You think I’m going to reduce my day rate by 30%? If I do, I’m not getting any benefit from the FT, if I don’t, my clients are suddenly paying 30% more."

You won't have to reduce your rate. The elimination of only those costs for taxes and compliance will reduce the price for you based on the reason in my post #86. It will not effect covering other business costs or profit margin factored into the price. The question is will you pass those savings onto your customers? If you don't, then you'll lose business to your competition.

[savedbygrace]

Maybe the reason your reply is non-responsive is because you do not understand this type of business, where nearly 100% of my income is a result of my labor.

I have a one to two percent compliance cost, and maybe one to two percent equipment cost, with the percentage depending on whether I’ve had a good year or only a so-so year.

So, I could either pass on the 30% tax to my clients or pay it out of my pocket. But I can’t do both; there’s only one 30% figure, not two.

I certainly would NOT be reducing my day rate immediately, by relying on the CLAIM that prices and costs will be reduced all over the place. That claim is yet to be proven in practice, no matter how many time FTers repeat it.