I don't know your basis for saying this, but it certainly comports with my gut feel. The NRST supporters' claim that prices would decline 20%-30% doesn't pass the smell test for me. However, the link you provided to a study paid for by opponents, appears to tilt the analysis in the other direction and is also suspect.
However, I'm very glad you linked me to the article because it cleared up a mystery for me. I have been trying to reconstruct a calculation that demonstrated that a 23% tax would raise sufficient revenues and I kept falling short. I now realize that the tax is actually a 30% tax not a 23% tax. NRST supporters should acknowledge that their proposal is a 30% tax (rather than calling it a 23% tax through mathematical subterfuge) and let it stand or fall on its actual merits.
Ancient_Geezer, did you know the tax is actually 30%? If so, why didn't you just point it out to me when I kept coming up short using 23%? It would have saved me lot's of time.
Ancient_Geezer, did you know the tax is actually 30%?
You were calculating distributions in regard to income, it is 23% of a tax inclusive measure same as the income tax is stated.
23% of total expenditure for NRST, 24.2% of gross income for income/payroll taxes.
29.87% added onto shelf prices for NRST, 31.93% added onto takehome pay for the income/payroll tax.
And your problem with the measure is??
One compares apples with apples not apples with oranges.
If your income tax rate is 23%, you earn $100 and you get to spend $77... paying $23 in tax. Most of the civilized world calls this a 23% tax. In fact, it's a 23% tax inclusive rate.
Under the nrst, if you choose to spend $100, $23 goes to tax and you get $77 worth of stuff. Most civilized beings call this a 23% rate. BTW this is also tax inclusive rate.
Your confusion likely lies in your preconceived notions of a sales tax being tax exclusive. Not a problem...
Suppose you earn the same $100 and pay $23 in tax. We already know how easy it is to figure the tax inclusive rate, as that's the way we've always figured income tax. But what rate would it be tax exclusive? It would be 29.87%.
If someone came to you and said he paid 23% income tax and later you found out that he earned $100 and paid $23 in tax, would you need some kind of clarification? Would you feel misled? Would you call it mathematical subterfuge?
Of course not.
There is no reason to think anyone but you is missing this. If this confuses you, please don't vote.
That's not exactly true either. The phony 23% is the teaser rate for the first year only.
Here is the copy and paste from the bill.(HR2525)
You'll notice they defined the general revenue rate but what are the other rates?
`(d) OLD-AGE, SURVIVORS AND DISABILITY INSURANCE RATE- The old-age, survivors and disability insurance rate shall be determined by the Social Security Administration. The old-age, survivors and disability insurance rate shall be that sales tax rate which is necessary to raise the same amount of revenue that would have been raised by imposing a 12.4 percent tax on the Social Security wage base (including self-employment income) as determined in accordance with chapter 21 of the Internal Revenue Code most recently in effect prior to the enactment of this Act. The rate shall be determined using actuarially sound methodology and announced at least 6 months prior to the beginning of the calendar year for which it applies.
`(e) HOSPITAL INSURANCE RATE- The hospital insurance rate shall be determined by the Social Security Administration. The hospital insurance rate shall be that sales tax rate which is necessary to raise the same amount of revenue that would have been raised by imposing a 2.9 percent tax on the Medicare wage base (including self-employment income) as determined in accordance with chapter 21 of the Internal Revenue Code most recently in effect prior to the enactment of this Act. The rate shall be determined using actuarially sound methodology and announced at least 6 months prior to the beginning of the calendar year for which it applies.
`(f) ASSISTANCE- The Secretary shall provide such technical assistance as the Social Security Administration shall require to determine the old-age, survivors and disability insurance rate and the hospital insurance rate.
So there you have it. After the first year of the teaser rate, bureaucrats at SS will be trusted to "determine" the tax rate(s) without any votes by elected representatives.
I'll bet you didn't know that "any government" is a "taxable employer" and that "any government" employees wages, salaries and benefits are subject to the 30% tax as well.
`For rules relating to collection and remittance of tax on wages by taxable employers, see section 103(b)(2)`(17) WAGES AND SALARY- The terms `wage' and `salary' mean all compensation paid for employment service including cash compensation, employee benefits, disability insurance, or wage replacement insurance payments, unemployment compensation insurance, workers' compensation insurance, and the fair market value of any other consideration paid by an employer to an employee in consideration for employment services rendered.`(2) CERTAIN WAGES OR SALARY- In the case of wages or salary paid by a taxable employer which are taxable services, the employer shall remit the tax imposed by section 101.
If we're going to have a sales gross payment tax, fine, but at least sell it for what it is. AG didn't inform you of the tax because he , like the other sales tax shills don't want you to know the truth...,I've gone past their rhetoric and read the bill...something most of the nst shills have never done, which is why they don't like me.
Oh yea, and how does SS know what to base the rate on?
`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.
Okie, dokie. I acknowledge that 23% (tax inclusive) is 29.9% (tax exclusive). Please note that 23% (or 29.9%, whichever way you cite it) is the maximum rate.
Will you acknowledge that the present Income tax maximum rate of 39.6% (tax inclusive) is 65.5% (tax exclusive)?
IOW, 23% compares to 39.6% as maximums (tax inclusive basis)
29.9% compares to 65.5% as maximums (tax exclusive basis)
Here's a website that discusses six(6) misconceptions about the FairTax. BTW, the info was supplied to me by the late CHIEF negotiator. He furnished me extensive info about the FairTax (and taxation) which I incorporated into my FairTax Facts! website.
SIX MISCONCEPTIONS! ...and... FAIRTAX FACTS!
Cliff Cofer - State Director, AFFT Volunteer Iowa Team