Tax Plan Aims for 25% Cap

You fail to understand the existence of imports, and while you pat yourself on the back because you recognize some compliance costs, US industry is still hampered by massive regulatory compliance costs outside of the IRS. I also call BS on the 23% gross income corporate tax rate. If you have to tell a very large lie to sell your argument, you are likely selling something that no one wants.

You need to read more thoroughly. I addressed the issue of imports in my previous post: Prices will increase by the range you cite for foreign goods since they currently don't have a consumption tax imposed on imported goods to the U.S. but will have it imposed under The Fair Tax.. You also misinterpreted the issue regarding embedded costs. The nearly 23% figure I stated included compliance costs and corporate taxes passed onto the consumer, not just a 23% corporate tax rate you erroneously cite.

And that is where the "Fair Taxers" leave reality world and enter in to the same place static analysis Demoncats go when they think that they can raise taxes without consequences. Reasonable people see the 23% tax on everything and consider, theft, barter, fraud and the already burgeoning underground economy (you know, the one that can already buy and sell billions of $ in drugs, guns, services and other contraband without any tax oversight).

The reality is people who don't pay under the income tax code will pay the tax under The Fair Tax. They include illegal aliens, foreigners either living in the country temporarily or are visiting. The under ground economy will shrink considerably with the Fair Tax as people will have greater purchasing power due to no federal taxes being deducted from paycheck, dividend checks, capital gains and estates.

The Fair Tax is a foreigner's dream tax, and a citizen's nightmare tax. Only someone who is ignorant of this or hates America would advocate it. Let me briefly explain.

You neglect to consider people like Sally will no longer have taxes imposed on their income, capital gains, interest in savings, estates along with the embedded corporate taxes and compliance costs passed onto the consumer at each stage of production. Consequently people are taxed multiple times. All those taxes go away with the Fair Tax. The amount of savings over time with those taxes eliminated will more than offset Sally paying taxes on consumption. Moreover opposing conversion to The Fair Tax is to ignore the increasing income tax burden and control the federal government will have over Sally's progeny. The Fair Tax will ensure her offspring will be able to accumulate more wealth than she.

Corporations leave the united States for a myriad of reasons outside just the tax burden, since you correctly observed that they can pass on the additional tax. The US consumer market would shrink because everything now costs significantly more, so corporations would still be outside the US since that is where the growing market is.

The U.S. market has been shrinking for decades. The single biggest reason corporations leave the U.S. is due to U.S. having the highest corporate income tax rate in the world. No longer taxing productivity will reduce the rate to zero will encourage U.S. firms to return more of their plant assets to the U.S. thereby bringing jobs back to the country.

This is a fundamental misunderstanding of the relationship of the FedGov to the "people". Your complaint isn't really about the FedGov capriciously making up tax laws, that is absurd. Your complaint is that organized special interests, in effect, decide the tax code. The reason why we have a mortgage interest deduction is not because the Tax and Spenders had a rare moment of benevolence towards the serfs, its because the home real-estate industry worked the system to get it. Over a few generations of competing interests we have this convoluted mess of a tax code that is universally hated.

My complaint is with a federal income tax code that gives the federal government control over our income by taking our hard earned money before we see our paychecks along with the influence of lobbyists who have caused the tax code to balloon to more than 67,500 pages. The Mortgage interest deduction will be a moot point under The Fair Tax since the deduction is against a person's income, however income will no longer be taxed rendering the MID unnecessary.

If anything, your Fair Tax could never be a reality because of the WTO and world courts.

If this were to be true then there would be a far greater problem than the federal income tax code. This scenario would essentially void our Constitution in place of a world order government that has control over how Americans would be taxed.

Lets say you had your wet dream of punishing the retirees and wealthy with double taxation and lets say every lie about how domestic industry would benefit were to be true.

People are being taxed far more than twice with the federal income tax code for the reasons I stated in my previous post to you. The Fair Tax will eliminate all the multiple taxation that occurs with the federal income tax, will instead tax them only once at the point of sale and will prevent the increasingly oppressive income tax burden on future generations.

You dream about not having a government inspect your income - we all would love that dream; but it is foolish to think that government tax regulators would be a thing of the past.

Please show me where in my previous posts I stated there will not be any federal government monitoring of The Fair Tax! The government will still be collecting the tax but will not be monitoring every aspect of people's personal lives as they will no longer be filling out tax forms since they will be paying the tax at the point of sale!

Think about the sandwich shop or the diamond broker. In the former, each and every sandwich will have to be accounted for, audited and taxed. n the former, each and every sandwich will have to be accounted for, audited and taxed. Unannounced and frequent inspections of books would be the rule. In the latter, how do you prove a diamond is "new" as opposed to "used", or a consignment?

Think about the fact 45 states already have a state sales tax. The amount of tax collected with The Fair Tax will be recorded on an additional line on the form businesses fill out for collection of state sales taxes. A used item(already taxed) will be confirmed by the receipt. Businesses already keep records of their sales.

You are trading in one imposing government inspector for another. Furthermore, how does this work out for the majority of states that depend on an income tax at the state and often local level?

The trade off will be the IRS and its 100,000 employees and $11.7 billion budget to a much smaller agency as the the number of filers will be reduced by approximately 90%. Most importantly there will be no federal agency looking over our shoulders to determine if we have complied and people will no longer be presumed guilty until proven innocent by a tax court.

You are trading in one imposing government inspector for another. Furthermore, how does this work out for the majority of states that depend on an income tax at the state and often local level?

Have you actually read the bill? If you bothered you would realize this is federal legislation. It doesn't address state taxes.

Your bags will be relentlessly torn apart and searched for any valuable purchased elsewhere, any and all cargo containers will have to be heavily audited to make sure you didn't import a gray market car, or ship to yourself a plasma TV purchased outside the country. Organized crime will flourish in ways that would humble the days of Prohibition and government will of course accuse you, the peasant, of being a participant in the underground market where you will have to prove that absolutely everything in your home, at any given surprise inspection, was legally purchased and appropriately taxed.

Now you're just being nonsensical. It will be a far smaller agency for the reasons stated above. They won't be auditing individuals as they will no longer be filling out tax forms and people will already be complying when they make a purchase! Any underground economy will be far less than we have currently since people will have greater purchasing power!

I've seen this claim multiple times but never any backup. Do you have any?

The following link is to testimony provided by Dr. Karen Walby(PH.D in Economy) to the House Ways and Means Committee: Testimony of Karen Walby, Ph.D.

An excerpt from her testimony:"Paperwork is the most visible compliance cost, but it is clearly not the only cost, and perhaps not the largest cost. Return processing, determining liability, record keeping, and other burdens are an estimated 13 to 22 percent of the total revenue raised by the income tax system."

Add to the compliance costs, at least some of the taxes levied on corporations they in turn pass onto the consumer at each stage of production and the total is approximately 22%.

Are you saying that after the income tax is eliminated and the Fair Tax is put in place, prices will be (roughly) equivalent?

As I stated in post #77 price increases will vary by industry. However imported products will rise by the amount of The Fair Tax rate as they are currently not subject to the U.S. embedded taxes domestic products incur. Any price increase, at least on domestic goods, will be offset by the gain in purchasing power.

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