The FairTax Crowd Answers Jerry Bowyer

realclearmarkets.com ^ | January 11, 2008 | Louis R. Woodhill

[foxfield]

... changes in inventory and AD without a negative impact on the Balance Sheet and the subsequent ramifications on the P&L

This is an interesting question. Let me get back to you later.

[robertpaulsen]

"hehe you’re really trying to avoid stating the 23% rate in any form, aren’t you?"

If I purchase a $100 item today at the store, I pay $6.75 in Illinois sales tax and the receipt shows I paid $106.75.

Now, if I avoided the sales tax, how much would I think I saved? My perceived savings would be 6.75%. No?

Sometimes stores in Illinois have a sale -- "We pay the sales tax" they say. What's the perceived savings?

(Yeah, right. Joe six-pack is going to sit down with Mary Beth and explain to her that she's really only "saving" the tax rate divided by one plus the tax rate or 6.23%.)

Perception.

[Mojave]

The history of the income tax in America is an interesting read. Those control freak bastards

The history of retail sales taxes in America is an interesting read. Those control freak bastards weren't able to impose the taxes until the 20th Century.

[robertpaulsen]

"Now, use of the item DOES exempt one from paying income tax on it."

Today. Yes. The government does not collect that money today.

But they will under the Fair Tax, huh? I'll have to look that up.

[Mojave]

Please quote my entire statement, liar.

You didn't quote ANY of my post. Can you say "hypocrite"?

[ovrtaxt]

You have a habit of picking a clause and launching into your propaganda. It doesn’t help your credibility. Now I don’t have a problem being civil with people I disagree with, but you’re just being a jackass.

[robertpaulsen]

(from fairtax.org)

"When a business purchases items for business use from a retail vendor, they have to pay the tax on the purchase and take a credit against the tax due on their monthly sales tax return."

So it is tax-free.

[lucysmom]

In the short term, this could be disastrous to the economy. People who are now only paying an average of 13.84% will be paying a lot more and since the Federal sales tax will apply to every day necessities like food, rent, gas, utilities and medical care, average average people will be forced to eliminate any other goods or services not an absolute necessity.

That was Australia's experience with a 10% Goods and Services Tax, implementation of the tax precipitated a recession.

FairTax supporters will argue that the GST is not the same as the FairTax because it left the income tax in place, and that's true; however the income tax was lowered to compensate for the GST, and the 10% rate was much lower than the proposed FairTax.

It is irrational to assert that the FairTax bestows freedom on the taxpayer to choose when and if he pays the tax while presuming all those individual choices wouldn't add up to negatively impact the economy.

[Mojave]

You have a habit of picking a clause and launching into your propaganda.

The salient one, with your red herrings and other propaganda omitted.

[Mojave]

So it is tax-free.

Funny how the Fair Taxers don't have a clue about what their scheme actually does.

[Mojave]

BTW, the first state sales tax in the United States went into effect in West Virginia on July 1, 1921.

[mysterio]

30% to start with, with no cap.

For the first time, we agree.

The tax system could be fixed by making it two tiered and eliminating withholding. Everybody writes the government an actual check for their tax burden every year. We'll see how much everyone wants "free" stuff from the government when it makes their check to the government even larger.

[ovrtaxt]

Oh cool! Thanks for the info.

[lucysmom]

"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."

Alexander Hamilton was referring to taxes on imports at a time when most Americans could live their lives without ever paying the "consumption tax" (except on salt) by consuming goods produced themselves or by purchasing domestically produced items.

In fact, the consumption tax, as envisioned by Hamilton, was a tax that fell almost exclusively on the rich.

[ovrtaxt]

You want me, you know you do. email me some pics.

[Mojave]

Already had you several times on the thread. Too easy.

[ovrtaxt]

ha! You have delusions of grandeur. Anyway, I’m bored. But like I said, your half truths hurt your credibility. seeya

[robertpaulsen]

"Funny how the Fair Taxers don't have a clue about what their scheme actually does."

How many cheerleaders do you think know what going on behind them on the playing field? Touchdown, safety -- six points, two points -- who cares? The crowd roars. The cheerleaders cheer.

[foxfield]

"When a business purchases items for business use from a retail vendor, they have to pay the tax on the purchase and take a credit against the tax due on their monthly sales tax return."

It appears that you are correct. Thank you for pointing out this error.

[foxfield]

Funny how the Fair Taxers don't have a clue about what their scheme actually does.

And you do? Pardon me, but some of us are a little slow. It's hard enough to get one's mind around the existing tax code, the existing state income and sales tax laws, and all of the various hypothetical tax reform proposals of which the Fair Tax is but one. May I suggest that you have a little patience with your fellow FReepers while we explore ideas and solutions to this nagging issue of taxation.