Posted on 06/25/2009 4:20:47 AM PDT by Man50D
The article can't be posted due to copyright complaints. The link to the article is below.
'Fair Tax Book' makes a surprisingly strong case
Perhaps they'll use the money to invest in a politician or two.
What do you suggest we do?That sounds like the hate Bush/Republicans hope and change nitwits.
Consumers will continue to pay hidden corporate taxes under the present system.Not in every purchase. I don't pay GE's corporate taxes when I buy groceries. Corporations and businesses don't add their income tax to their prices. To suggest that is beyond naive to ignorant. Don't take my word for it. try adding your personal taxes to your wages. Even if you could what would happen? You'd increase your taxable income that's what. Then what? Add more?
Why not raise corporate taxes from 39% to 95% to erase the deficit in ten years?Even more ignorance. The (top) 39% tax rate is not on their entire income. it's on their profit.
A company making (a really good)10% profit paying 39% tax would save less than 4% to pass on in price reductions...Reduce the price 4% then add a 30% tax to the gross and what do you have? Simple grade school math and logic tells you it's a price increase.People will continue to use service industries after the fair tax system is in place.
I have a service business so this is something I know.
If I, like everyone else, am able to "keep what I earn" and let's say I earn $100 an hour. After the Fairtax the law would require I send 23% of my gross earnings to the feds. If I get to keep what I earn ($100 an hour) then I would have to increase my price 30% to $130 an hour, then send the feds $30 keeping the $100 I earned ($30 is 23% of $130 rounded).
So Service businesses would either raise prices or take it in the shorts...get it?There will continue to be a demand for new homes.
The 30% tax on new homes VS no tax on "used" homes will kill the building industry...period.Retirees will pay taxes on their after tax savings under the present system. It is embedded in what they buy.
Oh please! Will you people stop making yourselves look like ignorant fools parroting that Fairtax garbage? In the next breath you're going to tell me how drug dealers and illegals don't pay any tax "under the present system". What incentive do we have now to save after tax dollars for retirement? Don’t we just get penalized when they tax us for any interest earned?
Interesting you should make that point. Once again your ignorance of the Fairtax is exposed. The Fairtax taxes interest, both earned and paid...Yes that's a fact. The Fairtax imposes a 30% tax on interest both earned and paid. It taxes any interest (earned or paid) that is above an applicable fed fund rate. And that includes savings accounts, mortgages, car loans, leases etc...Sorry, there's no free lunch. Local and State governments will no longer be paying SS, FICA taxes for their employees. Why exempt them from paying the Fartax?
30% ?Oh brother, are you really that dense?...Suddenly, when it's convenient for your argument it's the other guy, not the consumer paying the tax. Typical Fairtaxer.
Won't government employees be getting their 100% paychecks too? Isn't the whole idea of 100% paychecks to pay the taxes the Fairtax replaces? The 30% tax is in addition to their 100% paychecks...Much of what lobbyists do is manipulate the tax code.
And the Fairtax creates a new excise tax bureaucracy just for that resaon...so what's your point again?You give me ten thousand reasons why it can’t be done.
I don't beleive there's anything that can't be done. I'm giving you reasons why it shouldn't be done and I'm using information the Fairtax isn't telling you (for some reason) to prove it.I’ll discard Fairtax in a heartbeat if I find a group or organization that has more potential to roll back government.
Sorry I missed the part where "revenue neutral" rolls back government. Even AFFT doesn't claim to reduce government...It's not even their goal. What gives you the right to say otherwise?
It's not like yesterday you couldn't vote, tomorrow you can...Yesterday you were a slave, tomorrow you aren't I hope you know better than that. How hard is it to collect sales taxes?
You people can't even properly convey what the sales tax rate is let alone collect it.
Every material used in the construction of the house has an embedded tax of at least 15.3% due to the FICA or payroll tax. How much this adds to the cost of the house is beyond my capability to calculate it. Number of man hours involved in manufacturing each item/material used x pay rate x 15.3%. Plus the number of man hours to build the house x pay rate x 15.3%. Care to take a stab at the cost?WOW! Really? I can and have priced the construction of buildings but guess what. If you added up the % of the entire workforce of every industry of every business of the nation it's 15.3%
Now consider the income tax if an S-corporation or the corporate tax paid by each vendor plus the income tax or corporate tax of the builder of the house.Tax rate:
If each one reduced their price 10% what is the total percentage the price can be reduced?
120%
10%
I hope you said 10%
BTW, if employers are going to use employee's pay for price reductions doesn't that make the "bring home your whole paycheck with no deductions" an outright lie?...And if they don't use employee's pay, there won't be 23% reductions. So which one is the lie?You fail to account for these costs going away and assume that a new house will cost 23% or 30% more than a house built under our present day tax code.
23% or 30%? You can't even figure out the basics and you're trying to lecture me?
Sorry to burst your new home price reduction bubble but a lot of building materials aren't even produced here anyway. Lumber and plywood from Canada. Copper pipe from Mexico, Hardware, appliances, plumbing fixtures even sheetrock from China.
Apparently you're not aware that their prices won't be affected by our tax code.
"Costs going away" and tax cuts aren't a guaranteed price reduction. Maybe you could list the products that had reduced prices as a result of the Bush tax cuts...I don't remember any workers offering their tax cuts for price reductions, maybe you do.Point out any flaws in my attempt to give you an answer.
You mean besides your attempt at an answer ....to a question I never asked?
Those taxes are cost which must go somewhere Lewis. If they aren't passed on in prices where do they go? Where CAN they go?
You would have to know at the front end what profits for the year will be before you can add the tax liability to the price of a product or service. In order to do that, you'd have to employ the services of a psychic.
I read sometime back (UC Davis report) that if agricultural worker's pay were increased by 50% a family of four would pay $7.00 more for food a year. If that's true then reducing the cost of labor by eliminating embedded taxes on labor would not be noticed at the market, however the 30% tax would.
Those taxes are cost which must go somewhere Lewis. If they aren't passed on in prices where do they go?Reduced profits...Just like reduced take home in a paycheck or you know, just like when you buy something on sale Mr Johnny one note.
If a company can just willy nilly raise their price for tax costs, why can't they just raise their prices willy nilly to increase their profits?
Yes! You are making progress Loouie!
Business costs must be recovered if a business is to remain solvent those cost can accrue to any one of or any combination of the following:
Reduced ROI for owners of the business.
Reduced wages and salaries of workers in the business.
Increased prices for the good or service produced.
In all three cases they wind up being paid by individuals. The business does not and can not pay them.
In all three cases they wind up being paid by individuals.Following that lunacy from someone who obviously never had, does not have or never ran a business that filed and paid taxes you could say you do not and can not pay your own taxes...worse yet, you likely believe it.The business does not and can not pay them.
Say a company buys $9,000 worth of raw logs, adds $1,000 of labor to process it and sells the lumber for $15,000.In Toddsterpatriot's example the miller had a ridiculous 50% gross profit on the sale.
Even with that and a 39% tax on $5,000 gross profit the tax savings that could be used for price reduction would be $1950 or 13%...No where near the absurd 23% assertions of the Fairtax...and they know it.
Pretty interesting thread. The SQLs are out in force ..... LOL
This thread is pretty much like every FairTax thread I have seen on FR in that the SQLs don’t offer any solutions at all to the broad array of adverse economic trends which we face as a nation. These include
1. the trade deficit and associated demise of our manufacturing sector,
2. the federal budget deficit
3. the crisis in Social Security & Medicare
4. the anemically low personal savings rate
5. ongoing increases in the complexity of the tax system and the higher compliance costs which result
6. the AMT (Alternative Minimum Tax)
What do these trends all have in common?
1. They are unsustainable, and
2. They are exacerbated by the current highly dysfunctional tax system.
How do the SQLs prefer that we approach these challenges? Are they comfortable with congress’s penchant for ignoring adverse trends until the inevitable correction occurs and then spending trillions of $$$ that we don’t have and passing the bill off to future generations? When that response is challenged, the retort is that “doing nothing is not an option.” Is that really the best that we can do as a nation?
Your plan for attracting supporters looked more like a whack-a-mole game for children and your tactics for handling dissenters IS right out of the Obama/liberal playbook.
If you want to know why it will never happen, look in a mirror.
It has long been my opinion that all of the SQL’s on FR are folks who make their livings off the current income tax system in some way and don’t give a flip about the long term financial health of our country so long as they continue to get theirs right now.
The trade deficit doesn't worry me. Our manufacturing sector is still, by far, the largest in the world. We could manufacture even more if we reduced our corporate income tax rate from the second highest in the world.
2. the federal budget deficit
I'm all in favor of cutting government.
3. the crisis in Social Security & Medicare
We need to privatize Social Security.
4. the anemically low personal savings rate
Privatizing Social Security would raise the private savings rate.
5. ongoing increases in the complexity of the tax system and the higher compliance costs which result
Going back to the rates we had after the 1986 tax reform would be a good start.
6. the AMT (Alternative Minimum Tax)
Kill the AMT now.
Glad I could help.
And their math skills have weakened with age.
It has long been my opinion that all of the SQL’s on FR are folks who make their livings off the current income tax system in some way and don’t give a flip about the long term financial health of our country...And you've probably been wrong on just about every other opinion you've ever had too. Especially on people you've never met...
“Reduced profits...Just like reduced take home in a paycheck or you know, just like when you buy something on sale Mr Johnny one note.
If a company can just willy nilly raise their price for tax costs, why can’t they just raise their prices willy nilly to increase their profits?”
There is a one word answer to your question: competition.
Your theory that investors don’t really care about profit margins and capital won’t flow into or out of businesses and industries in response to profit margins is clearly wrong and always has been. In today’s era of globalization where the competition for capital globally is more fierce than ever, it is just ridiculous.
“You would have to know at the front end what profits for the year will be before you can add the tax liability to the price of a product or service. In order to do that, you’d have to employ the services of a psychic.”
Using that same rationale, you really can’t price your product to cover any cost which is variable based on volume because you don’t know in advance what your sales volume is going to be. Gasoline prices can’t be raised or lowered in response to crude oil costs because you only know those in retrospect, not in advance. Companies don’t do annual budgets because that would require a crystal ball.
Do you see how ridiculous your argument is?
“The trade deficit doesn’t worry me.”
And it doesn’t worry most Americans, either, just as the tech stock bubble and the housing bubble didn’t - until the corrections set in and our economy was sent into turmoil.
“I’m all in favor of cutting government.”
Whoop de doo!! Aren’t we all? Cutting government without stimulating the economy would be some help, but I find it hard to imagine cutting government enough to address the magnitude of the problem by that approach alone.
“We need to privatize Social Security.”
Which would do nothing about the immediate problem in Social Security and no one has suggested privatizing Medicare, which is in even worse shape than SS.
“Privatizing Social Security would raise the private savings rate.”
The very small portion of SS that would be privatized would do little to change the overall savings rate.
“Going back to the rates we had after the 1986 tax reform would be a good start.”
It isn’t the rate schedule that is the source of most of the complexity in the system. I assume that you meant to say “going back to the rates and eliminating the deductions like we did in 1986 would be a good start”. The problem with that approach has been validated by time - the lobbyists thought they had died and gone to heaven. They immediately went back to work reinstating the special preferences which had been eliminated and today’s tax code is far worse than the one which was in place before that simplification.
“Kill the AMT now.”
As Boortz and Linder pointed out in their book, the AMT raises so much revenue (and that will be increasing over the next few years) that simply eliminating it is a budget-buster. That approach would hugely expand the deficit, already at very worrisome levels for many Americans.
“Glad I could help.”
So am I. You made my point that the SQLs have no practical solutions to the broad array of adverse economic trends which this nation faces.
People freely buying, selling and investing is a bubble?
but I find it hard to imagine cutting government enough to address the magnitude of the problem by that approach alone.
Imagine harder.
Which would do nothing about the immediate problem in Social Security
LOL!
The very small portion of SS that would be privatized would do little to change the overall savings rate.
I want to privatize a larger portion than you.
It isn’t the rate schedule that is the source of most of the complexity in the system. I assume that you meant to say “going back to the rates and eliminating the deductions like we did in 1986 would be a good start”.
Yes.
The problem with that approach has been validated by time
Require a supermajority vote to raise taxes.
As Boortz and Linder pointed out in their book, the AMT raises so much revenue (and that will be increasing over the next few years) that simply eliminating it is a budget-buster.
I want to bust the budget. Huge cuts in spending. Remember?
You made my point that the SQLs have no practical solutions to the broad array of adverse economic trends which this nation faces.
LOL! Keep smoking dude. You whined that people who oppose your bad math tax plan don't have any alternatives, your plan is the only one that will fix those issues. And then when I tell you my alternatives, you whine that they're not practical. LOL!
You're right, under the Fair tax, rates will never rise and there'll be no lobbyists.
Do you have the same doctor as Michael Jackson? Because it sounds like you're on some good drugs.
Do you see how ridiculous your argument is?
Companies often miss their quarterly projections by over or under estimating.
Speaking of gasoline; how much hidden tax in the price of a gallon of gas at $2.00 a gallon, how much at $3.00 a gallon?
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