Posted on 08/24/2005 9:40:44 PM PDT by RobFromGa
Your lack of formating is only exceeded by your total lack of comprehending of what was said.
you and I know that Jorgenson is not going to appear on Boortz's show because Neal Boortz is not going to go through that embarrassment.
OTOH, he might. Jorgenson should have the capacity to rerun his simulation with an output for "takehome" wage with time. It might prove enlightening in light of the high 10%+ economic growth indicated by his study. Such conditions are not generally associated with falling discretionary income.
I'm not sure who is exploding what, but this is sophistry of the first order.
The only questions I can't answer is who is behind it and why.
"Their complete paycheck" is fraudulenty defined, because in the real world, the employee never has seen and will never see the withholding, other than taxes, that is part of his "total" pay.
All I care about is my "gross" pay. Will that remain unchanged? If the answer is "yes", I'm happy.
As soon as someone argues that everybody should get what is effectively a raise my BS and demagogue meter pegs.
If wages are on a "net" basis, the effective rate of income would go down initially, as the worker is not getting "back" his taxes (they are all going into my pocket as his employer), yet he has a new set of sales taxes. I can guarantee the unions would raise hell about this, as the negotiated wages are gross, not net. Also, the health insurance industry would clearly be affected, as the benefits no longer have tax consequences (group health rates are unbelievable!).
All that said, it still sounds like a good deal.
You WILL let us know if you hear from Boortz and Linder, won't you?
I reject the notion that is a new "lower" salary.
That makes sense only for a mind attuned to words like proletariat and the new man.
Well the arguement should be made in terms of freedom and not in terms of phoney economic benefits. I am a home builder, and this few percentages one way or the other, amounts to the prices of new homes being 17% greater than what existing homes are selling for. Over time, the prices of existing home will rise, but the immediate impact is I am out of business as new homes will not be competitive with existing homes. Just keep the arguement honest is all anyone is asking.
Sounds like furious backpedaling to me.--RobFromGa
Actually he has stated the case in that same way before. Mainly the issue presented being that you don't get out of paying taxes, afterall 23% of your payment at the cash register is taxes going to the government out of the earnings that you spend on consumption. For many folks that's often the entirety of their check and more (counting them credit purchases).
The answer no. The analysis which says price will fall 20% assumed your gross pay would be reduced, but your net pay would stay the same.
Thats a stretch. By that reasoning, all workers are providing a "service,"Yes they are, even by IRS rules. The difference is their "independence" from their employer. Do they punch a time clock? Would they be fired or reprimanded because they have another job to go to that day? Are they required to be at their work station? Required to show up everyday at a given time? Can't take a one hour lunch? Etc.
I have both worked as and hired independent contractors. Independent contractors typically are performing a service. I don't make up the rules I obey them.
Dear chronic_loser,
"Also, the health insurance industry would clearly be affected, as the benefits no longer have tax consequences (group health rates are unbelievable!)."
This is potentially a deal-breaker, especially in states that have high health insurance premiums (like mine).
Our average family policy (we offer a cafeteria plan with four choices) is over $800 per month. $10,000 per year.
I pay the bulk of that, and the employee must pay the rest. In both cases, because we have a cafeteria plan, payments are made with pre-tax dollars.
Under the NSRT, our average policy will now include a bit of sticker shock, with a $3,000 per year NSRT.
In that Dr. Jorgenson's model does not give back any of income or payroll taxes to the worker, this comes out directly out of the pocket of the worker.
We can hope that the cost of the health insurance plan falls 20% (and I think it's quite possible) to $8,000. Then, the tax is only $2,400, and the total bite is only $10,400, only a little more than what it's costing the worker now (because don't let anyone fool anyone else - even though I "pay" for most of the premium, the worker really pays for it in the form of significantly lower wages).
But to the degree that the employer pays the worker's premium, it becomes problematic. Here's why:
If the employer is paying 75% of the premium (pretty common in this area), then that's $7,500 of additional compensation that the worker is currently getting, even though it shows up nowhere on his check or his paystub.
The worker is paying $2,500 of his pre-tax gross as his contribution to the premium.
After the NSRT, assuming a price decline of 20%, the employer will be paying $6,000 + 30%, or $7,800. However, to keep things equal, the employer will need to shift the tax to the worker. Otherwise, the employer did not receive a 20% cut in this very significant part of compensation, and he becomes unable to lower his rates by 20% through payroll savings.
So, the worker's initial contribution of $2,500 is reduced to $2,000 (20% price drop), but increased by the tax to $2,750 PLUS the $1,800 tax on the employer's part of the premium, for a total of $4,550. The worker is screwed out of over $2,000 per year, because of the fact that this part of compensation was never taxed in the first place.
sitetest
if the sales tax applies to new as well as old homes, this one flew right past me, unless you are saying that the 17% is not the sales tax itself on the purchase of the home but rather on the materials......
Ahhh, memories of being a gc. Bailing my drunk and disorderly subs out of jail, having drunk women show up on the jobsite screaming about no child support, and taking a roofer to the hospital for falling off a roof...... those were the days!
No. The FairTax supporters claim I get the gross for my paycheck with no federal taxes withheld. Therefore income tax and 7.65% SS and Med tax are my taxes and not the employers. If you want to claim that they are embedded tax for the employer, then I can only claim that my net income is really mine.
My 9% estimate came from assuming that 10% of the aggregate price of goods and services are imports at essentially 0% tax, 10% are corporate profits at 30% tax and 80% are wages at 7.65% SS and medicare. Each company's costs of goods sold, equipment, other companies' services, etc. are made up of the same components. Take 0 x 10% (imports) + 0.30 x 10% (profits) + 0.0765 x 80% = 9.12%.
Shortcomings of my assumptions are 1. There is a small total tariff (about 2%) I left out of imports, 2. aggregate profits are probably a little lower than 10%, 3. I made no effort to figure out how much of wages are above the $90k SS cap, 4. I left out the cost of unimproved land for things like mines and farms, 5. I made no effort to calculate indirect costs attributable to current federal taxes (accounting, filing forms, etc) - I was only calculating direct costs.
All of these shortcomings don't change 9% to 23%. This thread pointed out the missing link: Jorgenson's embedded tax calculations include the employee's taxes as an employer expense, but the FairTax supporters who claim that employees will get their current gross left out that part.
Really:
Boortz (8/25/05): "We aren't promising you extra dollars in your pocket "
Boortz: (8/13/05): "With the passage of HR25, you would receive 100 percent of your bi-weekly paycheck. If you make $1,000 a week, your paycheck would be $2,000 every two weeks."
He was promising extra dollars in your pocket before.
Dear chronic_loser,
Nothing "used" gets taxed.
Currently occupied homes sold by their owners (with or without the assistance of a Realtor) will not have the 30% retail tax applied to their sale.
Just new homes.
sitetest
Let's all remember that the Fair Tax Act of 2005 does not call for lower salaries. It calls for an end to withholding. So even if prices don't come down at all (which is unlikely), consumers would still have more money in their pockets to pay the tax.
If you are so right, then why don't you call Neal's talk show?Who's Neal?
Neal Boortz. Have you been following the thread?
Why do you persist in trying to make the spurious argument that the only costs imposed by the income tax system are the taxes themselves when you KNOW that to be untrue?
"All goods and services produced in the United States already contain the embedded costs of the current tax system in their prices." is a far cry from embedded taxes only!
"Your vote has been duly recorded in the 'I hate the IRS, and I don't give a crap what we replace it with or what happens to the country as long as we abolish the IRS right now' column. Thanks for participating."
I was tempted to commend you for your objectivity and maturity as displayed in previous posts on this thread, even though you and I are on opposite sides on this issue. That went out the window with this post, which was childish. That isn't what she said and it isn't what she meant and you know it. Since you won't even take the time to read the interim report of the President's panel, I guess this is to be expected. Too bad.
The current system is a national disgrace. Deny that all you want.
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