Posted on 05/23/2013 7:42:09 AM PDT by EXCH54FE
I hire a fence guy to do it for me, he buys the fence at Lowes, installs it and charges me. The fence is not a retail transaction, but his bill for the completed work is.The Fairtax is NOT a retail sales tax.If my analysis is incorrect, please specify why.
The Fairtax rate is: "23% of the gross payments received". That is what the business (your fence guy) pays to the feds. To break even your fence guy would have to charge YOU an additional 30% to break even after taxes.
Your fence example:
Labor and materials: $1,000
(Fair)Tax: $298.70
Total (gross payment): $1298.70
$1298.70 minus 23% (fair)tax = NET $1,000
It taxes many things beyond retail sales including the materials and services(labor income)of your "fence guy" and any other kind of service with a tax "of the gross payment".
It taxes:
rent
Interest earned
Interest paid
Bartering
Gross service fee
"Any government" wages, salaries AND benefits.
Everything included in a "gross payment" including other taxes and fees to name a few non retail sales.
For the purposes of federal taxation under a national retail sales tax, the contractor is the 'end user' and pays the federal tax at the cash register.Contractors are end users of products they purchase? Interesting
Exactly - plus they would likely have to collect the money from State collection/clearinghouse agencies which would be a huge buffer between the Feds and the guy on the street.
I hear ya. But still favor a flat tax for it’s simplicity.
How much money did you make last year (add up all your W2s and 1099s).
Multiply that by .17. (The legislation would see to it that the .17 number would be almost impossible to raise. Lowering, no problem.)
Send in that amount.
Done.
Fair Tax is much more complicated than that.
Unfortunately, as I stated before, neither of these plans stands a chance. Way too much very high-powered opposition. So I’ll quit posting about this.
You’ll just exchange one form of monetary tyrrany for another.
Only this time you’ll have to account for every item in your house eventually.
Just to make sure all retail taxes were paid.
RFID + IPv6 == number of beast.
At the top of my list is;
IRS
EPA
More, but why waist the space.....(ObamaCare)
(Just Love spell check)
More, but why waste the space.....
So, bottom line is that FairTax proponents are spreading disinformation about it? Like the reductions in layers of taxation before the final product causing production costs to be reduced, resulting in lower prices at retail? And that prices would stay pretty much the same as now when the tax is added?
I would have to oppose the “Fair Tax” bill. The last time that I checked about 2 years ago, it still had a *major* flaw. It would *unfairly* double tax the Roth IRA and other post tax savings of individuals who have already paid the fed income tax on this money. Now we prudent savers would be double taxed when we use this *already taxed* money for new purchases under a new national sales tax.
Until the “Fair Tax” supporters acknowledge and find a *fair* solution to this major flaw, I will only support a change to a Flat Tax policy instead.
So, bottom line is that FairTax proponents are spreading disinformation about it?"It" doesn't exist. And yes disinformation about what would be is either willful or by ignorance, being spread.
Like the reductions in layers of taxation before the final product causing production costs to be reduced, resulting in lower prices at retail? And that prices would stay pretty much the same as now when the tax is added?There are no "layers of taxation" unless you want to include your wage as a layer of taxation and that is even minimal to retail prices.
Business/corporate taxes are on profits. A really good profit is less than 10% of the gross. The top rate is 35% OF THEIR PROFIT...35% tax on 10% profit amounts to 3.5% of the gross.
Ten businesses in a supply chain paying 3.5% tax is still ony 3.5% of the gross, NOT 35%
Simple logic and grade school math.
Yeah, there’s that with the Roth IRA (I have one) and there’s something I can’t remember about business inventory.
For the purposes of sales taxes, yes they are. What they do with the materials they buy is irrelevant to the sales tax transaction.
Any income tax means bad news. The tax we have now started as a "flat tax". Look what happened to it. A sales tax is the only way to go if we want the government out of our incomes. The founders made it illegal to tax individuals for a reason, the reason being it is evil and an easy way to tyrannize people.Sales tax, whether it is called fair tax or what ever is the only way to go. Abolish the 16th.
BTW, under the constitution the income tax is still illegal even with the 16th amendment.
If the government went with the constitution income taxes would be voluntary, That is why so many dems say the income tax is voluntary, regardless of the fact that we are penalized if we don't pay it.
Penalizing us for not paying income tax is unconstitutional, but the government has been breaking the law for so long, with the courts help, that the only way to stop this BS is to eliminate the income tax(abolish the 16th)and that includes an idiotic flat tax that will eventually lead us back to where we are now.
It's been a long time since I read through the Fair Tax website, but as I recall, there's almost no mechanism for interaction between the federal sales tax collection authority and the man on the street.
Audits? A thing of the past.
What they do with the materials they buy is irrelevant to the sales tax transaction.Untill they re-sell them to the real end user, then they are required to collect a tax again.
They could listen to people who don't know what they're talking about or they could get a resale permit and not pay any sales tax on purchases for resale.
I agree with you completely, except that even a sales tax can be levied/collected excessively, and any government will do so unless restrained by the people. The power to take other people’s sweat equity, ultimately at the point of a gun, is simply too tempting for the sorts of people who gravitate to government.
The Constitution is as close to an ideal plan for government as man has ever come up with, and it was not good enough to prevent the abuses of power that rage all around us now, a mere 250 years later. A sad statement. But your point is well taken. Thanks.
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