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Congressmen Linder (Ga) and Peterson (Mn) have introduced HB 2525, The Fair Tax, which will accomplish all of this when passed. The plan repeals all personal and corporate income taxes, capital gains taxes, and estate and gift taxes. The plan also repeals all payroll taxes, including Social Security and Medicare taxes. This allows individuals to receive their paycheck without any federal deductions!
How then would we pay for government? Under HB 2525, a 23% tax inclusive rate imposed on the purchase of new goods and services would provide the same amount of revenue as this year's income and payroll taxes provided (as required by law).
Contrary to first impressions, prices will not rise under HB 2525. Here's why: Our current tax system causes all prices to be inflated by two things - the amount of the tax costs of the business that is selling the good or service AND by the amount of the tax costs of all businesses that had any part in producing the good or service! Did you know that for every $1.00 that you spend, about 30 cents goes to pay the aforementioned tax costs (federal tax and compliance costs) of the retailer? Since HB 2525 eliminates all income taxes on businesses, this "hidden" tax of 30 cents per dollar will no longer be a part of the price. Competition will then push prices down by about 30 cents per dollar, or 30%. Then, adding the retail sales tax, prices will stay about the same with one BIG difference: now you have your paycheck free of federal deductions to spend or save as you wish. You see, under HB 2525 tax costs do not accumulate at every step of production. Since business to business purchases are not taxed, goods will flow to the retailer with zero tax costs. Items are taxed only once, when they are sold the first time. Used items are not taxed.
You may hear an argument that HB 2525 unfairly treats poor or elderly persons on fixed incomes. That is certainly a legitimate concern. HB 2525 eliminates that concern by providing all families with a tax rebate (based on family size, NOT based on income) that is equal to the sales tax that they'll pay on essential goods and services. This way, citizens will not only have their paycheck free of federal deductions, they will also have a rebate check to ensure that they pay no tax on necessities. Also remember that since there is no income tax under HB 2525, Social Security, pensions, and retirement income from any source are not taxed.
Retailers who sell taxable items or services will collect the tax. These retailers will be paid 1/4 of one percent of tax remitted or $3000 per year, whichever is greater (and remember, with no income tax, $3000 is really $3000!) Since 45 states already have sales tax mechanisms in place, the collection of the tax will not be burdensome. Retailers are accustomed to collecting and remitting a sales tax; under HB 2525, they will be paid for doing so.
The plan treats everyone fairly. Every individual will pay the same rate. Every new product and service is taxed at the same rate. There are no loopholes and there are no exceptions. All individuals pay the tax on every applicable purchase. HB 2525 requires that the tax paid be shown on every receipt. All citizens will be reminded of the cost of government every time they buy a taxable good or service (instead of having taxes withheld which tends to minimize their impact on us). Individuals will be keenly aware of their tax burden. This will tend to reduce government spending and hence reduce government.
Last but certainly not least, HB 2525 eliminates the IRS, eliminates the entire income tax code, and destroys all existing income tax records. The plan also calls (via HJR 45) for the repal of the 16th amendment, which authorized the taxation of income as we now know it.
If you are just learning about HB 2525, the Fair Tax, or you are new to the concept of a national retail sales tax, you are sure to have many questions about this tax reform proposal. You may find many answers at www.fairtax.org. Our Republic needs tax reform. Find out about the options. Contact your representative with an opinion and make something happen.
I'm anxious to see what you think.....
Hello out there. A weekend discussion item? Any questions?
what do you think? questions?
What's a libertarian take on this? Questions? Concerns?
interested?
I like the idea! In fact I will do everything in my power to see that it gets done!
Glad you like it, bigun. I do too. I think our only obstacle to getting it done is educating the masses. With tax time coming up, it's a good time to talk to friends, neighbors, associates, etc.
All the feedback I've gotten has been positive once folks have their questions addressed. What's your experience?
H.R. 2525 sounds great but this thing is dead. It is sitting somewhere in the House Ways & Means Committee and with die a very silent death at the end of this year. They haven't done anything with it since July of 1999.
I saw the Congressmen's presentation of their proposal on C-Span sometime back. It made absolute sense AND is the only constitutional way to raise revenue. Therefore, it should be borderline impossible to get into law. That is not to say it wouldn't be a worthwhile cause, just a tough fight. As far as discussion goes, who can argue against the merits of the Fair Tax Act? There are no negatives!
I like the idea of a sales tax but why does it have to be 23%. If they start at 23% it should be wittled down to 15% or less.
Yeah, it's supposed to be discussed in Ways & Means in late March. Archer favors it strongly. Who knows what will happen? With supporters, it may get a lot of publicity creating a better opportunity for next year, or it may even pass...Non-supporters, however, will not help it at all to pass or get publicity for next time.
Is it your assertion that the bill has too many non-supporters and not enough supporters? If you like the bill, would you write your congress critter with an opinion?
Very well done Principled. It's what I'd call "Creative Loafing". LOL!
As far as discussion goes, who can argue against the merits of the Fair Tax Act? There are no negatives!
Good point, wait and see what folks say....there is no better alternative, so supporters of the status quo can only attack the bill. They'll be here soon. But the fact remains: no tax bill is a good bill, but there is no better alternative to tax systems than HB 2525.
I am against turning retailers in to tax collectors and I know from my
own experiance it fairly easy for anyone willing to put forth a little effort to buy holesale.
Some things are worth fighting for.
"Nothing is so powerful as an idea whose time
has come."
-- Victor Hugo
Now, get rid of the frivilous and outrageous damage amount lawsuits and the cost of everything will come down.
"I like the idea of a sales tax but why does it have to be 23%. If they start at 23% it should be wittled down to 15% or less."
Once we privatize the social security ponzi scheme...15% WILL be the NRST rate. The 23% has been calculated to be revenue neutral...as any "replacement tax system" is required by law to be.
I like the idea of a sales tax but why does it have to be 23%. If they start at 23% it should be wittled down to 15% or less.
It has to start at 23% tax inclusive to even be cosidered by congress...there is a requirement that any new tax system raise the same amount of revenue as the old system in its first year of being implemented.
The rate will decrease due to the reasons in the article and other reasons.
Interest rates will decrease by 25% overnight when this is passed. Mortgage payments and car payments and cost of capital will decrease significantly. The resulting economic expansion will be unprecedented.
Not to mention this bill makes American mand goods far more competitive in the world market...goods manufactured here would no longer include the tax costs of our antiquated tax system, lowering prices by 30 cents on the dollar; further, any imports would be required to pay the 23% tax inclusive sales tax. That's a big advantage for US goods!
In the final analysis, the rate will be much, lower within a few short years....
You made some money, paid taxes on it, and put it in the bank. Then comes the NST and you go and by something and pay taxes on the same money a second time. Fix this, without having to disclose every cent you have, and I go along with the program
No tax collectors would be best, Pontiac. But to make a step in the right direction, this bill is ideal.
Retailers in 45 states already are "tax collectors"; under HB 2525 they would actually be paid to do what they're doing now for free (unfunded mandate).
Regarding wholesale purchases; business to business purchases are not taxed, however; if an item is purchsed for retail consumption it is taxed. If an individual poses as a business in order to avoid paying the tax, he would be breaking the law (similar to someone presenting a false sales tax exempt form today). Further, under our present system it only takes one person breaking the law to skirt paying the sales tax....under HB 2525 it would take two law-breakers colluding to avoind the tax; and it is even less likely when you consider that a retailer/wholesale would be risking its very existence just to avoid the tax on an individual sale....not likely that Joe's Heating and Air Cond sales would risk its existence just to allow a customer to illegally avoid paying tax. Places like Kmart that'll make millions on the collection fee are even less likely to cheat.....
"I am against turning retailers in to tax collectors and I know from my own experiance it fairly easy for anyone willing to put forth a little effort to buy holesale."
No tax plan will eliminate crooks! 45 states already collect a sales tax and it's worked well for 60 years. In order to buy "wholesale" a person would have to have a legit business and provide a resale certificate to the seller.
The great thing about the FairTax is that finally, all the non-filers, crooks and illegal aliens that have avoided paying any income tax will be FORCED into becoming taxpayers with every purchase. I doubt that people will purchase milk from the milk dealer on the corner...or meet in an abandoned warehouse at midnight to buy porterhouse steaks!
bump
The trouble with stupid proposals like this is that it presumes that politicians are logical and rational. THEY ARE NOT!!! This concept is presented as a "substitute" for income tax. If adopted, it would start as such. But the politicians would quickly reinstate a very modest income tax ('to make the wealthy pay their fair share") and we would have both. You heard Willie's SOTU speech. There are no limits on the ability of politicians to spend our money. Should we ever provide an adequate life style for all America's children and poor, we would then be called upon to support the UN to spread equal blessing to the rest of the world. The effort shouldn't be to find an alternative, the effort should be to limit the existing system!
What's your experience?
I have yet to encounter one single individual (other than the TP twerps on this forum) who, once they understood what this bill does, did not want to get solidly behind it! Many have joined the National Retail Sales Tax Alliance as a result of our discussions.
I believe strongly that it is just a matter of time given our continued efforts!
Or, as a previous poster on this thread so rightly said, "who can argue against the merits of the Fair Tax Act? There are no negatives!"
You made some money, paid taxes on it, and put it in the bank. Then comes the NST and you go and buy something and pay taxes on the same money a second time. Fix this, without having to disclose every cent you have, and I go along with the program.
Right, aspiring.hillbilly (you from Georgia?), the nrst will tax when money is spent on new goods or services, even if us responsible folks saved this money prior to implementing the nrst. That seems like a negative until you stop to realize that your savings are already being double taxed in our current system. You see, there are "hidden" tax costs in the price of EVERY good or service you buy, whether for wholesale or retail consumption. These "hidden" taxes amount to 30 cents per dollar of the price....so this 30 cents per dollar is already being assesed on your previously taxed savings. The nrst places no additional tax burden on those of us who have spent a significant prtion of our lives saving taxed dollars.
So with no additional tax being assessed, think about the other advantages of th nrst....lower interest rates (down to 6% overnight), rebate check monthy to avoid tax on necessary purchases, you receive your whole check with no federal deductions, SS and pensions are NOT taxed......
now watcha think?
As surprising as it may sound, prices at the cash register will not go up under the FairTax. The price of every good or service we buy today is inflated by the cost of income and payroll taxes paid by workers and businesses. These costs are passed on to consumers in the form of higher prices. When income and payroll taxes are repealed prices will come down 20 to 30 percent according to Dr. Dale Jorgenson, Chairman of the Harvard University Economics Department.
You'll have an instant pay raise...Then there's that nice little Family Consumption Allowance you'll receive in the mail each month.
No longer will you have income or payroll taxes taken out of your paycheck. You will receive 100% of the money that you earn and you will be able to decide what you want to do with that money. You will not be taxed when you make your money - save it or invest it. You will only be taxed when YOU decide to spend it.
If you earn $39,312 per year, you will receive an automatic pay raise of approximately $200 per week, because you will have nothing taken out of your pay.
Some people claim that a 23% NRST is too high. If you are in the smallest tax bracket of 15% today, you also have 7.65% taken in payroll taxes...that's 22.65% right there! Under the FairTax plan you will receive a "Family Consumption Allowance", [FCA] based on family size, mainly to assist the poor and elderly, but it is universal for everyone. Every year the Dept. of Health and Human Services determine what the "poverty level" is. In 1999 they determined the poverty level for a family of four has a yearly income of $22,120. Using the table below, you will see that the family will receive $424 per month, paid in advance which will cover 100% of the NRST on the income of $22,120.
The "FairTax" 1999 Rebate Figures |
|||
Household |
Household |
Annual |
Monthly |
Size |
Allowance |
Rebate |
Rebate |
One |
$8,240 |
$1,895 |
$158 |
Two |
$16,480 |
$3,790 |
$316 |
Three |
$19,300 |
$4,439 |
$370 |
Four |
$22,120 |
$5,088 |
$424 |
Five |
$24,940 |
$5,736 |
$478 |
Six |
$27,760 |
$6,385 |
$532 |
Seven |
$30,580 |
$7,033 |
$586 |
Eight |
$33,400 |
$7,682 |
$640 |
A person that earns $39,312 will receive an instant pay raise of $200 per week X 4.3 = $860 per month plus (if he has a wife and two kids) he'll receive another $424 FCA for a total of $1,284 per month!
Look at your pay stub...how much of your money is confiscated? What will your FCA be? How much do you save under the FairTax plan?
Yes this bill is a nice dream especially if it were to elliminate corporate
income tax (not mentioned in the article).
The savings to industry in eliminating federal income tax would likely increase economic growth 10% per annum.
However the chances of congress passing such a bill are minute.
For that would be killing the goose that laid the golden egg.
No more big stick and carrot with which to extort campaign contributions. (pardon my rant)
The effort shouldn't be to find an alternative, the effort should be to limit the existing system!
You didn't read carefully! Shame on you. {g}
This is a replacement plan. HR2525 does impose a new tax, but at the same time, it defunds the IRS (i.e. takes all it's money away), requires all current income tax records to be destroyed, and calls for a repeal of the 16th amendment as proposed in H.J.Res. 45. Click on the link. Not only is the 16th abolished, but future income taxes (except in times of war as declared by Congress) are prohibited.
When H.R. 2525 passes, the 16th will become obsolete, much like the Prohibition amendmends. In the meantime, HR2525 specifically eliminates income taxes. I'd call that a pretty good limit on the current system.
"The plan also calls (via HJR 45) for the repeal of the 16th amendment, which authorized the taxation of income as we now know it."
The concept is exciting as long as the repeal of the 16th amendment is 100% sure.
"These retailers will be paid 1/4 of one percent of tax remitted or $3000 per year, whichever is greater"
A sound idea...rewards retailers for their extra work load, although if they operate a high volume business, even $3000 dollars may not come close to reimbursing their actual cost to maintain these records.
"HB 2525 eliminates that concern by providing all families with a tax rebate (based on family size, NOT based on income) that is equal to the sales tax that they'll pay on essential goods and services."
A tax rebate would involve more government red tape, more more bookkeeping, more government employees, etc. Why not just code grocery and medical items (or whatever the government deems essential (scary thought)) so that no tax is paid on essential items at all. Also, if there were a rebate, poor families would still be hurt because they'd have to pay the tax up front and wait for the government rebate to come in the mail (or however the plan would work).
Despite the listed objections, HB 2525 sounds like a much fairer system than the one under which we currently live. HB 2525 would certainly end a couple of the greatest instigation points between the government and the people--tax time and the IRS.
I am against turning retailers in to tax collectors and I know from my
own experiance it fairly easy for anyone willing to put forth a little effort to buy holesale.
In otherwords you would rather maintain an abusive and coercive system of taxation that places you in constant legal jeopardy and infringes upon your 4th and 5th amendment protections agains search and seizure without warrant, and being required to provide evidence under oath that can be held against you in criminal action.
You are aware, Karl Marx selected the graduated/progressive income tax as the 2nd plank of the Communist manifesto for its ability to provide the levers of control and coersion over the individual. That is also why I refer to the current system of income tax as the Karl Marx Social Engineering Tax.
What specifically do you think is stupid about the bill, Tacis?
Regarding your (and everyone's!) concern of having a sales tax AND an income tax:
There is nothing, nothing that prevents congress from implementing a sales tax on top of our existing income tax right now. Indeed, overnight, without fanfare or anouncement they could hit us with both (look what they're trying to do with e-commerce now!). Your fear is real, Tacis; we must avoid the possibility of having both systems at once. What does HB 2525 do to avoid this nightmare?
1) HB 2525 eliminates the entire income tax code. Of course it could be re-written with significant effort, but it would take time, time in which we could fight.
2) HB 2525 destroys all existing income tax records. Of course they could start again from scratch, but that would also take significant time and effort, not to mention the coerced cooperation of us citizens.
3) HB 2525 defunds the IRS. Of course, the IRS could be rebuilt; but that would take signifcant time and effort also;
So HB 2525 provides 3 formidable speed-bumps to re-insituting the income tax on top. These are not guarantees, but hey, it's 3 speedbumps which currently do not exist! HB 2525 actually helps prevent the nightmare of having both systems. Our current situation is fragile...we could wake up tomorrow with both systems in place (remember e-commerce!). Passing HB 2525 would make it less likely to happen and more difficult to accomplish this nightmarish task.
Also, there is a sister bill to HB 2525, it's HJR 45. It's a constitutional amendment that would repeal the 16th amendment AND make unconsititional the taxation of ANY type of income. So passing HB 2525 gives us some protection against having both systes (protection which we currently do not enjoy), and by passing HJR 45, the taxation of income becomes unconstitutional! That's one helluva speed-bump. Indeed, another constitional amendmen would be required to ever tax income again (in addition to the 3 speed-bumps constructed by HB 2525).
So you see, passing HB 2525 actually helps prevent the very situation you feared it may cause!
Feedback?
You make a good point. Which is why we need to get the dumbasses-- er, dumb masses-- educated. Remember the proposal to requre OSHA regs for work-at-home types? Or the Know Your Customer programs? Public outrage made those proposals die a quick and necessary death. If enough popular support can be generated, NOT voting for the bill would be tantamount to political suicide. The only thing we have to hold over our reps is out vote. Make enough noise, and they risk finding themselves out of a job.
Yes this bill is a nice dream especially if it were to elliminate corporate
income tax (not mentioned in the article).
The savings to industry in eliminating federal income tax would likely increase economic growth 10% per annum.
However the chances of congress passing such a bill are minute.
For that would be killing the goose that laid the golden egg.
No more big stick and carrot with which to extort campaign contributions. (pardon my rant)
Yes this bill is a nice dream especially if it were to elliminate corporate
income tax (not mentioned in the article).
The savings to industry in eliminating federal income tax would likely increase economic growth 10% per annum.
However the chances of congress passing such a bill are minute.
For that would be killing the goose that laid the golden egg.
No more big stick and carrot with which to extort campaign contributions. (pardon my rant)
"The effort shouldn't be to find an alternative, the effort should be to limit the existing system!"
There ain't no magic wand......no more big gvmnt.
Here's proof that we just can't get there (SMALLER GOVERNMENT) from here (income tax system):
Even with a GOP Congress with a firm grasp of the nation's purse-strings...taxes and spending have increased.
The "Price of Civilized Society" Surges to $10,298 Per Person in the U.S.
"Americans will spend more money per capita in 1999 on taxes ($10,298) than on food ($2,693), clothing ($1,404), and shelter ($5,833) combined," according to Patrick Fleenor, senior economist at the Tax Foundation and author of the new report titled "The Price of Civilized Society."
This chart looks promising for
your children's financial future, doesn't it?
Until you and I get FED UP with the manner in which government can confiscate YOUR money,
within another 18 years expect your children and grandchildren to spend over $20,000 per year to
"feed-the-beast"!
The Internal Revenue Service employs more investigative agents than the FBI and the CIA combined, and with 115,000 employees, employs more people than all but the 36 largest corporations in the United States.
The FairTax will effectively shut-down the thousands of lobbyists in DC whose only reason for existence is to garner favor for their clients through the manipulation of the tax code. Just let'em try to raise the NRST rate! It would be political suicide, because it would affect EVERY VOTER!
SCRAP-THE-DAM-CODE...ABOLISH-THE-GESTAPO-IRS!!!
Congressmen Linder (Ga) and Peterson (Mn) have introduced HB 2525, The Fair Tax, which will accomplish all of this when passed. The plan repeals all personal and corporate income taxes.
Yeah, it's gonna be tough to pass, but if the bill has support, it will gain publicity. With publicity, it gains momentum; maybe not for this year but for next year....if you support the bill, let your critter know. It won't hurt anything. What will be a detriment to the bill is not indicating your support to your critter. Don't worry about its chances this year....think about your children and grandchildren....and think about writing your congresscritter in support of this freedom-enhancing bill.
"Nothing is so powerful as an idea whose time has come.". -- Victor Hugo
Yes, CHIEF negotiator, some things ARE worth fighting for!
Sure, why not ask for another tax increase?. In fact why don't we just guarantee that the federal government get bigger. There is nothing in this bill which reduces the chunk that the federal government eats from the economy despite it's proponents assumptions. The ruse of this bill is that the statistics used to support the bill are valid. As well, what the hell is "Fair" about 23%?.
It's advocates will argue that this bill will eliminate the IRS and the income tax. Well it might eliminate the IRS, but in it's wake will the be new administrations to administer excise and sales taxes as well as to ensure smooth relations with each of the states. Do you really think that the federal government would put people out of work?. The bureaucrats union would have a conniption.
The income tax as it is currently defined is lawful because it is written into the Constitution via the 16th Amendment. It will take another amendment to the Constitution and the approval of 35 states legislatures to eliminate the 16th amendment and the income tax. (Althought this might be my oversight, I could not find in the bill where the the text for the consitutional amendment to repeal the 16th Amendment was.). I'm sure this will be accomplished at a rapid pace. It only took 203 years to ratify the 27th Amendment. In the meantime, we'll be stuck with both a brutal income tax on top of a more brutal federal sales tax.
Another argument of this bills proponents is that the tax MUST be "revenue neutral" as that is the law, more BS with bogus arguments as support. It would be much easier to change this law than it will be to amend the Constitution.
Corporations will love this bill as well since it is most probable that the amount of taxes paid to the federal government by corporations will be reduced more than it already is. Whom do you think will make up the difference?. The vending machine industry will love this as well, they have their exemption written into the bill.
The only entity which would consider this bill "fair" is the federal government. In all likelihood as real personal income decreases, the feds will be guarantee'd their cut of the economy, including that of the internet.
If we want to reduce the chunk of dollars that the feds take out of your pocket, demand that they (congress) lower the income tax rate, or cut some jobs from the federal government, or do something that doesn't take an amendment to the Constitution like eliminate the Department of Education.
---max
Yes this bill is a nice dream especially if it were to elliminate corporate
income tax (not mentioned in the article).
You must of missed this, the first paragraph of the article.
"The plan repeals all personal and corporate income taxes, capital gains taxes, and estate and gift taxes. The plan also repeals all payroll taxes, including Social Security and Medicare taxes. This allows individuals to receive their paycheck without any federal deductions!"
I recommend reading the bill for yourself to ascertain that it will do as the article states.
H.R.2525
SPONSOR: Rep Linder, John (introduced 07/14/99)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.
The Linder/Peterson Bill (FAQ)
NO corporate income taxes under H.R. 2525 Income tax is ELEMINATED remember? Corporations don't pay taxes anyway, they just pass them on to the guy that buys whatever thay are selling!
"A tax rebate would involve more government red tape, more more bookkeeping, more government employees, etc. Why not just code grocery and medical items (or whatever the government deems essential (scary thought)) so that no tax is paid on essential items at all."
The family consumption allowance approach has several effects. First, it makes the sales tax applicable only to consumption beyond the necessities of life. Second, it makes the tax in effect progressive, not only because it is based on consumption, a better index of true ability to pay, but because--if one wants to continue to view progressivity through an income tax lens--it entirely exempts lower income workers. Third, unlike most state taxes, it does not undertake the complex and politicized task of determining what to tax and what to exempt, thereby minimizing administrative and compliance questions and economic distortions.
"Also, if there were a rebate, poor families would still be hurt because they'd have to pay the tax up front and wait for the government rebate to come in the mail (or however the plan would work)."
The "rebate" is paid in advance.
Hey...this is phun...you're gettin' all the fire today! LOL!
ONe question....how is social security financed if not through payroll tax? I am confused on that. But I have become a supporter of this bill....and I hate social security anyway...I am against the gov't taking from A to give to B...and trust me, I aint a millionaire by any stretch.
To all naysayers:
This very day I have become a supporter of a bill, H.R. 2525, which I previously was not aware of. How did this happen?By people raising awareness and promoting something they believe in and trying to make a difference. It will work if we continue to put out the effort. Look at what the founders were up against! They left us the means to change things without having to die for it...we should be thankful and we should do our duty as americans to uphold the Constitution and the principals upon which it was founded.
Keep up the good work, folks. Give me liberty or give me death!!!!
How about a convenient link, conspicuosly placed, in your posts?
Folks,
find out about the Retail tax bill currently in the House by going here.
National Retail Sales Tax Info
For a list of what you can do, go here:What Can I do???
And finally, check out this thread, which explains why the courts will not solve this problem. It must be done through the Congress, first by changing the existing statutes, then by ammendment to the Constitution.
Here's the link.Why we must go through the Congress to change the tax code.
Hope this is useful. I am going to do what I can, writing congressmen, newspapers, etc. When I feel too lazy to do it, I will refamiliarize myself with the founders, whose works, words, and deeds should be inspiration enough for us all! Take care.
BUMP
"Third, unlike most state taxes, it does not undertake the complex and politicized task of determining what to tax and what to exempt, thereby minimizing administrative and compliance questions and economic distortions."
Good point.
The plan also calls (via HJR 45) for the repeal of the 16th amendment, which authorized the taxation of income as we now know it." The concept is exciting as long as the repeal of the 16th amendment is 100% sure.
The only thing that is sure is death and taxes (Ben Franklin?), but your support will help it pass.
"These retailers will be paid 1/4 of one percent of tax remitted or $3000 per year, whichever is greater" A sound idea...rewards retailers for their extra work load, although if they operate a high volume business, even $3000 dollars may not come close to reimbursing their actual cost to maintain these records.
Yeah, bu a high ovlume business like Kmart would clealy get paid the 1/4 of one percent per month...let's see; kmart has, hell, i dunno, say 10 million of sales every month...that a fee of $25,000 per month. That would sure help! After all, kkmart's getting nothing right now, and they're passing their costs of comlpliance to US in the prices of goods!
"HB 2525 eliminates that concern by providing all families with a tax rebate (based on family size, NOT based on income) that is equal to the sales tax that they'll pay on essential goods and services." A tax rebate would involve more government red tape, more more bookkeeping, more government employees, etc. Why not just code grocery and medical items (or whatever the government deems essential (scary thought) so that no tax is paid on essential items at all.
Yeah, red tape. Tough to avoid. In this case, some of the red tape is optional (you don't have to take a rebate. Also, the red tape required is nothing more than what already exists...the Social Security Administration. So the additional red tape will likely be nothing, or perhaps a small increase....negligible. Also, if we open the door to exempting specific items from taxation, we open the door to lobbyists and special interests to exempt their pet product or service. THAT, sir, would be red tape. The tax previously earned on exempted items would then have to be replaced by putting a higher rate on the remainder of taxed goods. No, the rebate idea is the best option IMO.
Also, if there were a rebate, poor families would still be hurt because they'd have to pay the tax up front and wait for the government rebate to come in the mail (or however the plan would work).
Nope, the rebate is paid IN ADVANCE every month.
Despite the listed objections, HB 2525 sounds like a much fairer system than the one under which we currently live. HB 2525 would certainly end a couple of the greatest instigation points between the government and the people--tax time and the IRS.
Yep. I hope you show your support to your congress critter; I hope you don't allow your congress critter to believe you have no interest in tax reform. Go for it...write him, call him...let your position be known!
The funding of SS and MC is done through the revenue generated through the NRST.
Welcome aboard...what if Thomas Jefferson were to revisit America today?
-- Would Thomas Jefferson Think We Are Free?
Here ya go Huck straight info straight from the bill!
Fair Tax Act of 1999 (Introduced in the House)
How about read the artticle, and maybe even a few replies, before you look silly again.
Tell you what, pchuck, rather than tell us how this idea is going to die out, why don't you educate yourself about the National Retail Sales Tax reform idea, and pick up the cudgel FOR it?
I got involved with the NRST movement on April 17, 1991. Many (in the thousands) have said "I like it, but there is no chance in Hell of the politicians allowing it to become law." My comeback has always been consistent: "If you like the idea, then help us." Some do, some don't help us. But if everyone DID help us, the legislation probably would not be stuck in committee! It might even be law!
So here is my challenge to you and those naysayers like you: Get involved. Become a citizen activist. Join the National Retail Sales Tax Alliance (link to our website is below -- check it out). Educate yourself. Educate others -- your friends, neighbors, relatives, business associates, golfing & hunting buddies. Get them involved.
You see, this is about Freedom. For you, for your family, for your kids and grandkids, and for your country.
If you value your Freedom, you will get involved. I believe that we can never be a truly free people so long as we have an income tax and the IRS.
And I further believe that there are more people like me than there are of those who oppose Freedom. We outnumber the Bastards! And we can prevail, if you, and others like you will help us.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
I am not against this bill, I simply do not think it has a prayer of passing (probibly won't reach the floor).
Because it is in the entrenched interest of congress not to mention the
lobby industry that exist to provide congress with the funds necessary to run for re-election.
It would take supprt of near revolutionary scale to pass this bill.
Pundits will come out of the wood work and scour the bottom of the barrel for plausable senarios of
doom and gloom to pursuade the for electorat that this is foolhardy and dangerous.
how is social security financed if not through payroll tax
SS is financed thru the retail sales tax revenue, as is MC. However, the nrst does nothing to interfere with SS reform efforts. It only changes the source of revenue from payroll tax to retail sales tax. ...good question
Nobody said it was gonna be easy! It won't!
Liberty never has been easy and it never will be!
You make a great point, Condorman.
Where is the outrage?
Wake up, America!
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
Of course it won't pass, if people meekly twiddle their thumbs and say, "Oh well".
From the Jefferson link above:
"Our people fought a revolution because of government intrusion far less than this," Jefferson says. "It is inconceivable that any of us would have tolerated this type of government tyranny. A government that has to enforce a tax on its people will not willingly pay is a government that should be immediately overthrown. In a letter to James Madison in 1787 I said, 'I hold it that a little rebellion, now and then, is a good thing, and as necessary in the political world as storms in the physical. It is a medicine necessary for the sound health of government.' Are you sure that I am in the right country? There must have been a revolution. Real Americans would never have given up their rights without a fight."
Seeing your bowed head, he knows the answer. There was no revolution. Now deeply ashamed, you try to excuse yourself by explaining to him that people who refuse to obey the tax laws are often sent to prison, sometimes for 25 to 30 years.
Jefferson just stares at you. In a low, anguished voice he says, "Is this what we risked our lives for? We thought we were giving future generations a free country ruled by the people for the people. What you have done is taken our idea and twisted it. You have freely submitted to despotism much worse than we faced. You may think that you are free, but that is because you choose not to see your chains or the walls that imprison you. No, my friend, you live in a prison. You work for the government, not for yourselves. Your ancestors would not know you. I am sorry for my country and I am sorry for you." Without another word, Jefferson walks out the door. As you see his tall figure disappear into the mist, you are sadder than you can remember ever being. You now must admit to yourself what you have been trying to explain away. What Jefferson said is true. What has happened to us is what Thomas Paine predicted would happen if Americans lost their freedom. Our freedoms have not been taken away all at once but a little at a time.
Jefferson could see it. If you really look, you can see it too.
...I simply do not think it has a prayer of passing (probibly won't reach the floor)....Because it is in the entrenched interest of congress not to mention the lobby industry ...
And this is a reason to ignore the plan????
No, what you listed are reasons that it's so important that we do make our opinion known.
The fact that it drives a stake into the very heart of what is destroying our country is not a reason to ignore it! Indeed, it's a call to action.
Yo, Huck, welcome aboard! Glad to have you with us.
Any others out there! Lets get this job done!
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
Welcome aboard Huck. Your commitment to freedom does not go unnoticed. Thanks.
So whatcha think about this plan?
And finally, check out this thread, which explains why the courts will not solve this problem. It must be done through the Congress, first by changing the existing statutes, then by ammendment to the Constitution.
Gee its nice to know my efforts are occasionally read and understood for what they are.
Greets Max! There's something about your post that looks familiar, but I'm not sure why...
Oh well, let's get down to it! We'll break this apart piece by piece.
Sure, why not ask for another tax increase?. In fact why don't we just guarantee that the federal government get bigger. There is
nothing in this bill which reduces the chunk that the federal government eats from the economy despite it's proponents
assumptions. The ruse of this bill is that the statistics used to support the bill are valid. As well, what the hell is "Fair" about
23%?.
This is not a tax increase. This is a brand new tax. The current federal taxes on income (from whatever source derived) are eliminated. This bill will also remove from the economy corporate income taxes, which only serve to a) increase prices, b) lower wages, or c) reduce investment returns to the owners and shareholders. In addition, no longer will business have to pay to comply with the income tax code. In order to correctly remit the tax they have collected, business need only answer one question: How much product was sold to consumers?
I'll let CHIEF or geezer defend the stats. They've been doing a fine job so far and are far more familiar with the numbers than I. What specifically is your beef with the numbers? I generally hate to speak for others, but in this case I'm pretty sure they'd be happy to field you questions. On the fairness issue: 23% is fair because all federal income taxes are repealed, there are no exceptions, and there is no tax on poverty-level spending, which means that the people who can "afford to pay their fair share" (e.g. the rich) are now the big spenders. And since investing and saving is now done with pre-tax money, and returns are not taxed until they are spent, AND the cost of the federal government is explicitly delineated on each receipt, AND any tax increase affects all taxpayers, there will be rather a good incentive to keep government spending controlled.
It's advocates will argue that this bill will eliminate the IRS and the income tax. Well it might eliminate the IRS, but in it's wake
will the be new administrations to administer excise and sales taxes as well as to ensure smooth relations with each of the states.
Do you really think that the federal government would put people out of work?. The bureaucrats union would have a
conniption.
But that administration will no longer have jurisdiction over individuals. Individuals will longer be audited. Income will no longer have to be calculated, exempted, and the ordinary citizen will have no more IRS hoops to jump through.
The income tax as it is currently defined is lawful because it is written into the Constitution via the 16th Amendment. It will take
another amendment to the Constitution and the approval of 35 states legislatures to eliminate the 16th amendment and the
income tax. (Althought this might be my oversight, I could not find in the bill where the the text for the consitutional amendment
to repeal the 16th Amendment was.). I'm sure this will be accomplished at a rapid pace. It only took 203 years to ratify the
27th Amendment. In the meantime, we'll be stuck with both a brutal income tax on top of a more brutal federal sales tax.
Nope. HR2525 destroys the tax code. Defunds the IRS. Destroys income tax records. The amendment you're looking for is H.J.Res 45. There's a link to it a couple of posts back. Or you can go to the Library of Congress and search for it.
Another argument of this bills proponents is that the tax MUST be "revenue neutral" as that is the law, more BS with bogus
arguments as support. It would be much easier to change this law than it will be to amend the Constitution.
You are attempting to both juggle torches AND ride a unicycle. One at a time. Linking a tax cut to a tax reform is the surest way to see them both fail. One step at a time, friend. And I have not seen a proposal to change the revenue law. Point one out to me and I'll review it. In the meantime, HR2525 stays within the current confines of the law, exorcises the IRS, and replaces it with a fair, economical, socially responsible, and workable alternative. A Constitutional amendment is a further safeguard; the final bouquet on the grave of the income tax. Since currently BOTH income and sales taxes are legal sources of revenue under the Constitution, there is nothing protecting us from a double-whammy now. Once Congress gets its collective twitchy nose pointed in that direction, and figures out a way to weasle it past the sleeping citizens, you'll see one sooner than you think.
Corporations will love this bill as well since it is most probable that the amount of taxes paid to the federal government by
corporations will be reduced more than it already is. Whom do you think will make up the difference?.
Who do YOU think pays corporate income tax? About a year ago, Winn Dixie released it's 1998 annual report. On the front cover was the following:
Winn-Dixie
Stores,
Inc.
1998
Annual
Report
Earnings per diluted share $1.33
Taxes
per diluted share $2.03
Where do YOU think those taxes came from?
The vending machine
industry will love this as well, they have their exemption written into the bill.
You must be talking about section 501 of the bill:
According to the section I just read, vending machines are not required to provide a reciept detailing the tax charges. So, either a honest misreading of the bill (possible) or a deliberate attempt to misconstrue the specifics of the bill (likely). Unless you want to clear up the mystery, I'll leave it to the readers to be the judge.
If we want to reduce the chunk of dollars that the feds take out of your pocket, demand that they (congress) lower the income
tax rate, or cut some jobs from the federal government, or do something that doesn't take an amendment to the Constitution like
eliminate the Department of Education.
And your proposal to do that would be....?
Wide-eyed, idealistic, feel-goodisms are all well and good, and they amount to exactly squat as a means to an end. (And ya would've gotten away with it, too, if it hadn't been for those stinkin' kids!!)
Intellectual honesty can be refreshing sometimes, can't it...?
I am not against this bill, I simply do not think it has a prayer of passing (probibly won't reach the floor).
Because it is in the entrenched interest of congress not to mention the
lobby industry that exist to provide congress with the funds necessary to run for re-election.
It would take supprt of near revolutionary scale to pass this bill.
Let's see Ronald Reagan could possibly win back in early 81 as I remember.
Every one likes Alan Keyes but were going to vote for X because we're told X can win.
Do you always wait for the other guy to do it for you? That's the kind of person the income tax was designed to control maybe ole Karl will have the last laugh after all.
Slaves actually wanna be slaves. It's a secure and comfortable life when every thing is decided and done for you, though master's do expect a little return now and then. But hey, the rancher takes care of his cattle very well, and The good farmer certainly appreciates his horse. I have seen to many of either complain much.
Ah but support of a bill that others won't pass for you is obviously not worth your efforts. So you may continue living with the status quo.
Confound those dratted kids!
Nicely done, Condorman. Thanks for the help! I've got way too much to do today!
Hey, I do what I can. (And I've been waiting for an excuse to drag out that Winn Dixie thing... heheh)
bttt
A saturday pm BTTT!
SCRAP THE CODE!
You've done a yoeman's job with your post, Principled. I'm not "against" the NRST but I'd sure like to know more about it before I fire my accountant.
As I understand it there is an exemption on food. As I understand it there is an exemption on housing.
As I understand it there will be certain government approved levels of expenditures that will be exempt and anything above that the tax will apply. For example a pair of shoes may be except up to the government established price of say $40. I'm sorry but $40 shoes don't fit my feet so I'm paying a tax on my shoes and my peers aren't.
Suppose I am a business man and I incur certain business expenses, who determines what is taxable and what isn't?
Without the deduction for capital improvements where's my incentive to improve?
More importantly, if I were rich where is the incentive for me to buy plant and machinery to start a business? Without the tax incentives or exemptions, or depreciation allowances, I'd likely never recover the initial cost of breaking into a manufacturing field.
I think another poster mention this but I have forgone certain pleasures in life to save for my retirement. Now my nest egg is worth 23% less than I figured.
What do you do about the disparity between living on Central Park West and Milledgevill, Ga.? The bottom line is that the person trading labor for wages will always be the person paying the bills. It can't be any other way.
When robbing Peter to pay Paul one can count on the support of Paul.
"As I understand it there is an exemption on food. As I understand it there is an exemption on housing. As I understand it there will be certain government approved levels of expenditures that will be exempt and anything above that the tax will apply."
You need to clean your glasses Gramps...no exemptions, no exclusions and no loopholes.
The NRST will be paid only at the retail level and only on new goods and services...used [previously taxed] items will not be taxed again. Period
Just think...no longer would you face penalties, interest, searches, seizures, audits, garnishment of wages or PRISON.
The retailers who are supposed to be the tax collectors will be audited and will face penalties, interest, searches, seizures, garnishment of wages and prison. Nothing new here, except even more paperwork and scutiny.
As I understand it there is an exemption on food. As I understand it there is an exemption on housing.
As I understand it there will be certain government approved levels of expenditures that will be exempt and anything above that the tax will apply. For example a pair of shoes may be except up to the government established price of say $40. I'm sorry but $40 shoes don't fit my feet so I'm paying a tax on my shoes and my peers aren't.
To give you a brief answer, there are no exemptions on new products of any kind. The NRST is charged at the Retail register in precisely the same manner as a state retail sales tax only it is across the board and indeed would use the state agencies to administer collections portion of the tax.
Please refer to the following links for the Bill HR2525 and its associated FAQ, they will answer those questions more adequately than I ever can.
H.R.2525
SPONSOR: Rep Linder, John (introduced 07/14/99)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.
The Linder/Peterson Bill (FAQ)
However, If you can accept that there is a minimum level(that which sustains life) which should not be taxed as necessary to Life, one of the protected rights of all men, then a rebate or consumption allocation follows. It is not a freebee, it is a necessary part of the premise that Life, Liberty, and Property are protected; that such not be taxed at subsistance level and compensation must be made for that.
The NRST in H.R.2525 pays a monthly Family Consumption Allowence(FAC) which provides that minimal protection leaving its use strictly to the individual and his best judgement.
Where income is Gross less necessity/capital on which income is generated, the FAC compensates the tax that would be expended to sustain a minimal living consumption necessary to sustain sufficient life on which to generate income in the first place.
The FAC is strictly a function of family size(single persons are a family of 1) and all families who apply for it annually will receive it across the board. Rich, Poor, young or old every individual gets a monthly allotment based on the tax rate time the poverty-line income in effect for that year.
How you spend or save the FAC is entirely up to you. Whatever is a necessity in accord with your estimate thereof will be tax free, from potato chips & dip to porter house steaks. At least up to the limit of tax on the statistical povertyline income for the size of one's family.
In this way every family is treated in precisely the same many with no favored status, ever new product and service taxed with neither preference nor exclusion beyond educational service which are seen as an investment towards economic productivity and not taxable.
The retailers who are supposed to be the tax collectors will be audited and will face penalties, interest, searches, seizures, garnishment of wages and prison. Nothing new here, except even more paperwork and scutiny.
Only those choosing to be involved in retail sales and services have any legal liability which is a condition of their charter and license to do retail business in a state. You expect a state government not to administer and collect the retail sales taxes that businesses collect from their customers, nor prosecute retailers who steal and defraud customers of the tax paid by them? Get real!
Ain't no free lunch friend, and you certainly are not forced to be a retailer now are you. That is something you accept as part of being engaged in that business. Your choice, certainly no one around to force it on you.
Read my response to pchuck, #52, Pontiac (BTW, I own a nifty Pontiac -- '65 GTO), and become part of the "supprt of near revolutionary scale to pass this bill."
Others have, are and will join with us. You can too!
And be a part of history in the making.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
Suppose I am a business man and I incur certain business expenses, who determines what is taxable and what isn't? Without the deduction for capital improvements where's my incentive to improve?
More importantly, if I were rich where is the incentive for me to buy plant and machinery to start a business? Without the tax incentives or exemptions, or depreciation allowances, I'd likely never recover the initial cost of breaking into a manufacturing field.
I would like to see these points sufficiently addressed/rebutted.
Let me add that in order to comply with the regs, the only thing business need to provide are receipts for sales to consumers. Period. No business-to-business sales are taxed. There are no deductions. There are no taxes imposed on interest, dividends, or capital gains. Tax is a function of sales by business, not of profits. Since the tax is stated on the reciept and explicitly charged to the consumers, rather than hiding the tax as part of the price, exeryone is more aware of the tax, the tax is simpler to administer than the current code.
Good stuff Principled!! Keep up the good work!!
Little Willie is "The Worst President In American History".
Most of your Qs were answered already, but I'll stab at this one....
if I were rich where is the incentive for me to buy plant and machinery to start a business? Without the tax incentives or exemptions, or depreciation allowances, I'd likely never recover the initial cost of breaking into a manufacturing field.
Profit.
Without any tax on your income, you will not be in need of any exemptions, depreciation allowances, etc. Your incentive to start or expand a business is pure and simple profit, not govenment tax policies. The free market would drive the market, not government tax policies.
Another poster can help me here with a quote...a recent survey of the top 100 international companies were asked, "if the US went to an nrst like HB 2525, how would you react?" The responses were telling. 81% said they would build their next plant/HQ/factory in the US. The other 19% said they would relocate their entire operation to the US.
Business loves this plan, Gramps. Check our www.fairtax.org and particularly the FAQ section.
Anyways, glad you're interested in learning about the nrst. I welcome your further questions and concerns.....
And thanks for the kind welcome. As a young adult, having finally achieved, not easy means, but self-sufficiency, savings, investments, and so on, I am able and willing to turn my attentions to nobler pursuits. And lo and behold, I find there are pursuits which are both noble and self serving. What a bargain! But this is how it was for the Founders. They achieved liberty not just for posterity, but for themselves!
It is 23% because it also replaces payroll tax withholding (as well as income tax withholding). Without the payroll tax withholding, its rate is 14.91% just as you wish, but why have the government confiscating all the payroll taxes and have the compliance costs therewith apply??
Little Willie is "The Worst President In American History".
Under either NRST plan, the business are paid for the work they do ... it is not an unfunded mandate as at present. And the businesses are ALREADY tax collectors, but for the federal government - what do you think the withholdings from your wages are??
Little Willie is "The Worst President In American History".
Suppose I am a business man and I incur certain business expenses, who determines what is taxable and what isn't?
Business's do not pay a Federal tax under the NRST. Business to business sales for production and future re-sale is not subject to the NRST tax. That is the "Retail" part of the National Retail Sale Tax.
Businesses do not pay tax for that which is necessary to the conduct of business under the NRST. No tax to reduce for which to apply a deduction/exception or anything else. How do you go lower than 0 Federal tax owed?
All Federal Business/Corporate income and payroll taxes are repealed under H.R.2525.
Without the deduction for capital improvements where's my incentive to improve?
You need a tax incentive to improve your business when you have full use of untaxed capital and revenue to do it with?
That's your choice friend, what more incentive do you need, customers to buy your products perhaps, or lowered costs of doing business and growth when you do capital improvements.
That seems to be plenty of incentive to me.
Suppose I am a business man and I incur certain business expenses, who determines what is taxable and what isn't? Without the deduction for capital improvements where's my incentive to improve?
These are both good questions, Huck. They are clouded by your being accustomed to a tax on income.
Suppose you're a business, and you incur certain business expenses. If the expense was incurred to produce a particular good to be sold, then the item is not taxed. If the expense is a retail consumption, the item is taxed.
Perhaps an example or two would help. Say you manufacture widgets. You buy legs for your widgets from a leg manufacturer. That purchase is not taxed.
Now, say you want to kiss some butt to get someone to do business with you and you take them to lunch. That purchase is taxable cuz it didn't go into the production of your product.
Perhaps you could think of an example or two, and let's hash it out....
Regarding the 2nd Q, look above a few posts...
That's a no-brainer, aspiring.hillbilly, just keep the money in a savings account (or invest it in something else). Income is not taxed (from investments or otherwise). Another way would be to use that money (or any other) to buy used things, which are not taxed.
The NRST will bring many economic benefits to our country and to most of its citizens.
Little Willie is "The Worst President In American History".
More importantly, if I were rich where is the incentive for me to buy plant and machinery to start a business? Without the tax incentives or exemptions, or depreciation allowances, I'd likely never recover the initial cost of breaking into a manufacturing field.
You mean you recover the cost from not paying taxes because of the deductions allowed for depreciation allowences, tax incentives, etc. Under the NRST there is no tax for investment, you recover full untaxed revenue all the time. You can't build a company on that?
Exemption for what? Incentive for What? To go out build a business with tax free capital receiving tax free revenues, to build more tax free earnings.
What more do you want, besides a slave customer to buy your product. Those the NRST will not provide, that is up to you to win through price competition and better products.
"fair tax"
I'm curious about one thing - which party are the law's writers from?? Although you mentioned their state, you did not mention which party they belong to. If these people are dems, I am against it; because there will be a loophole in there somewhere. If they are reps, I would possibly be for it; only because they tend to be more fiscally sound and usually want tax laws (or tax breaks) to be universal, not "targeted" (you know, you're only eligible if you're married with 2 children and a gandparent, etc.). If this is really the whole of this bill, and I will check it out on the net (where I can get an actual print out of the bill), I really think I would be in favor of it. I'd much rather put my extra money in my investment accounts. Also, my boss is a small business owner and it would be a real boost to our office not to have to pay payroll taxes. We would be able to expand sooner. All in all, it sounds good. I'll have to study it further. My only first objection is the rate; I think it's too high. More like 17-18% seems adequate to me. After all, if the rate going to the government NOW is producing all that SURPLUS, why do they need to continue it. With a lower rate, you would reduce the rate of surplus. Just a thought.
There are an equal # of Ds and Rs co-sponsoring this bill. In fact, it's a requirement that for every R, there must be a D. First time I've ever heard of this but it's a fact. Bob Barr is looking for a D right now.
You need to clean your glasses Gramps...no exemptions, no exclusions and no loopholes.
The NRST will be paid only at the retail level and only on new goods and services...used [previously taxed] items will not be taxed again. Period
If that's the case, I am totally opposed to the tax. I am opposed for the following reason. If I have to pay 23% more for my materials I'll have to go out of business because I don't operate on a 23% profit margin.
I buy a widget for $1, paint it and sell it for $1.25. For that quarter I pay for the paint and my labor, shipping, payroll taxes, (twice, self-employed) etc. If I have to pay $1.23 for my widget I can't compete in the market place because experience has proven that my painted widget will not sell at the new price of $1.54.
I spend 1/2 my income for shelter and food. Some folks have to spend 100% of their income for these too items. How are they going to clothe themselves? Buy medicine, etc.?
My house would now cost me $361,350 to replace, my wife's car $44,280 and my car would cost me $47,970.
This would be from money that I have already earned because I don't make these kind of wages anymore.
Let me see if I can help you understand, Gramps. (BTW, if you have grandchildren (and I envy you if you do), the NRST will be very beneficial for them -- freedom, economic growth, and equality of treatment under the law -- not to mention being able to keep all they earn).
Your concerns were:
1."Suppose I am a business man and I incur certain business expenses, who determines what is taxable and what isn't?"
ANS. No business expenses are taxable.
2. "Without the deduction for capital improvements where's my incentive to improve?"
ANS. Do you really believe that business decisions are made solely on the basis of the tax implications thereof? Having said that, since no business expenses are taxed under the NRST, and since the cost of capital goods and interest rates will decrease roughly 25%, we can predict with some certainty that businessmen will increase, not decrease, their capital expenditures. That assumes that there is some demand for the products they manufacture.
3. "More importantly, if I were rich where is the incentive for me to buy plant and machinery to start a business? Without the tax incentives or exemptions, or depreciation allowances, I'd likely never recover the initial cost of breaking into a manufacturing field."
ANS. You really don't believe this, do you? Please tell me that you don't believe that investment in plant and machinery is made on the basis of tax deductions. I have always believed that a decision to invest in plant and machinery was made to make more money by producing more products, at less cost to the consumer. Read this carefully: Plant and equipement expenses will not be taxed under the NRST. The savings companies realize by the elimination of business income taxes and tax compliance costs will get passed on to three groups; the owners, the workers and the customers of the business. What a deal! Eliminate business income taxes and three groups of people win!
4. "I think another poster mention this but I have forgone certain pleasures in life to save for my retirement. Now my nest egg is worth 23% less than I figured."
ANS. Think in terms of "purchasing power." Your purchasing power or ability to consume, that is, provide for yourself and family is limited to your available resources -- earnings, savings, borrowing, etc. In today's income tax environment, with those AFTER TAX resources, you purchase a "marketbasket" of goods and services. Prominent economists have demonstrated that "marketbasket" costs of goods and services will decrease as much as 25% under the NRST. Then you add back the tax. Now, I'm no dummy -- businesses will sell their products, in the NRST environment for the same price, INCLUSIVE OF THE NRST, in the sales tax environment as they do in the income tax environment. Thus today's $20,000 Ford will be a $20,000 Ford in the NRST environment, INCLUSIVE OF THE NRST. When you understand that in order to buy a $20,000 Ford today, a person in the 15% marginal tax bracket must earn $23,530 to have $20,000 left after taxes, you can readily grasp that our hypothetical consumer is $3,530 better off under the NRST than the income tax. And that is before the Family Consumption Allowance. Combine the FCA with the fact that you will get to keep all you earn (interest, SS, capital gains, gifts, etc., etc.) and suffer no penalty of taxation until you consume, and your purchasing power will actually increase by the additional disposable income realized by 100% take home pay plus the FCA. And by the way, since goods and services will be cheaper to you, and since the owners of businesses will not pass all of their savings along to the consumer, workers and owners of domestic businesses will take home more money in the form of higher wages and higher returns to capital. Looks like a "threeper" to me: workers win, owners win and consumers win.
5. "What do you do about the disparity between living on Central Park West and Milledgevill, Ga.? The bottom line is that the person trading labor for wages will always be the person paying the bills. It can't be any other way."
ANS. What is done about the cost of living disparity in the income tax world? Area wages and prices are adjusted to accomodate for that disparity. It is for certain that the tax code doesn't do a good job of adjusting for COLA differences. Having said that, the NRST is self adjusting for COLA differences: those who live in lower cost of living areas will pay less taxes on the same goods that are priced higher in high COLA areas, but the rate will be the same. The FCA is not adjusted for COLA -- maybe it ought to be.
Almost forgot. Retired persons are advantaged in several ways by the NRST over the income tax. 1. Gift taxes are repealed. You can give as much as you want to who you want without government interference. 2. Estate (DEATH) taxes are repealed. You can leave you estate to your family without penalty of death taxes. 3. The tax on Social Security is abolished, and the penalty for working while drawing SS is abolished. 4. And most importantly, you will leave a legacy of freedom to you kids and grandkids.
We can never be a truly free people so long as we have an income tax and the IRS in place.
Hope this helps. Please contact me toll free @ 877-YES-NRST (877-937-6778) if you would like to discuss the issue. Or email me @ fdavis@salestax.org.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
All goods [like homes] and services already contain the embedded costs of the current tax system in their prices. When these embedded taxes are removed, prices will come down. Dr. Dale Jorgenson, Chairman of the Economics Department at Harvard University, has projected a producer price reduction of 20 to 30 percent in just the first year after the adoption of the FairTax. In addition, the FairTax will lower compliance costs by more than 90% and the removal of these costs will force prices down even lower.
Look here for lots of info, including the full text of the bill (legislative news). GLad you're interested in learning more, Sueann....
Aha ha ha, prices will come down, oh, that's rich, did you learn that in sunday school last week? Ah ha ha, where's my knee!
Come with me, little boy, to the nearest "tax free" indian reservation, see the price of gas and other items unburdened in the way you dream about doesn't relect your theories and suppositions, and those tax free prices are still high without your added 23+%!
Human nature and the way the "real world" operates are notably absent from your bandwidth exhausting repeated insertions of dream world post hoc ergo propter hoc.-Doc-
Gramps, you have a valid concern; but you missed a MAJOR component of the nrst. That component, Gramps, is that prices will not increase. Go back and read the article...
Contrary to first impressions, prices will not rise under HB 2525. Here's why: Our current tax system causes all prices to be inflated by two things - the amount of the tax costs of the business that is selling the good or service AND by the amount of the tax costs of all businesses that had any part in producing the good or service! Did you know that for every $1.00 that you spend, about 30 cents goes to pay the aforementioned tax costs (federal tax and compliance costs) of the retailer? Since HB 2525 eliminates all income taxes on businesses, this "hidden" tax of 30 cents per dollar will no longer be a part of the price. Competition will then push prices down by about 30 cents per dollar, or 30%. Then, adding the retail sales tax, prices will stay about the same with one BIG difference: now you have your paycheck free of federal deductions to spend or save as you wish.
So your concern about rising prices is adressed. What else?
What the hell are you talking about?
Add something to the discussion, norraad, other than self-stimulating. We'd all like some thought, not crap from a drunken sailor.
The FCA is not adjusted for COLA -- maybe it ought to be.
In essence it is adjusted annually by HHS.
I buy widgets for $1. If, as you say, the price of my widget drops to $.70 I still have to pay $.86 after tax. I add my $.25 cents for labor and paint and market it for $1.11. The price to the consumer is $1.37. The consumer has refused to pay one penny over $1.25 in the past. Why now is he going to pay $1.37. I buy my widgets retail because there is a retail outlet near me that sells them for less than I can buy them wholesale + shipping, etc.
Bottom line, I currently pay less than 23% in payroll taxes. To pay 23% on what I spend doesn't relieve me from all the other taxes I have to pay locally.
I think the breakdown in communications here is you folks idea of what kind of profit margin businesses operate on. Couple that with my ignorance of the plan and it's practically hopeless.
Thanks for trying though.
Without any tax on your income, you will not be in need of any exemptions, depreciation allowances, etc. Your incentive to start or expand a business is pure and simple profit, not govenment tax policies. The free market would drive the market, not government tax policies. O.K. I spend $65,000,000 for a plant and fixtures. I pay $79,950,000 with your tax. I'd have to be processing cocaine to recover the cost of the plant and fixtures in my lifetime. Under your program none of my expenses could be exempted so I'm paying $1.23 for a dollars worth of electricity, sewage, water, etc. I currently write off the cost of my car as a business expense. There is now nothing to write off and I have to add the cost of the vehicle to my debt + the 23% sales tax on the car. Yeah, that's a plan I'd embrace. Exempt nothing and pay extra for everything.
I buy widgets for $1. If, as you say, the price of my widget drops to $.70 I still have to pay $.86 after tax.
What tax, neither the NRST nor is any sales tax I know of charged to business for the materials for a product.
I add my $.25 cents for labor and paint and market it for $1.11. The price to the consumer is $1.37.
Which become $.70+$.25 = $0.95 we add $0.28tax for $1.23
The consumer has refused to pay one penny over $1.25 in the past. Why now is he going to pay $1.37.
He won't have too, he can purchase more a $1.23 tax included, besides that customer has around a 30% increase in tax free takehome pay from no witholding. As a consequence he has more money to buy more of your widgets.
I buy my widgets retail because there is a retail outlet near me that sells them for less than I can buy them wholesale + shipping, etc.
As a business under the NTST you receive a certificate allowing you to purchase business materials tax free from retail businesses. So the price for your materials is $0.70
Does anyone have a clue as to how huge the "underground economy" is? Check cashing stores don't exist as a public service. Check cashing stores profit from people who wish to remain outside of the current system. The NRST will tap that resource. I think you guys would be astounded at the revenue generated with the NRST, and I'm all for it!
Secondly, the billions of dollars spent on IRS compliance would be eliminated. I don't see a downside to this.
"Why now is he going to pay $1.37."
I think the answer to that is that if I, formerly taking home 700 a week, am now taking home 1100, for the same work, I am now willing to pay a 12 cent mark up on my widget.
I don't see a downside to this.
That's cause there ain't one!
Sorry we couldn't make contact, Gramps. Many of us own a small business too. In fact I owned a consulting company that catered to banks and mortgage companies. I'm out of there now, business sold. But I say this to let you know that small business owners who investigate the plan like it.
I encourage you to got to www.fairtax.org to find out about it on your own. In your case, look for the endorsements from the small business affinity groups (you may even be a member of one of them).
I can clearly see that your approach to investigating this issue is clouded by your being accustomed to the income tax. You will continue to be confused until you can let go of the whole idea of income of ANY kind being taxed. No payroll tax. No FICA. No self-employment tax. Folks will have more cash in hand to spend....
If you are interested in learning, go to the link above. You'll find lots of answers there that we are unable to provide....
happy Freeping
Businesses do not pay tax for that which is necessary to the conduct of business under the NRST.
Bingo! Are you saying that anything that I determine to be a business expense is automatically exempt from the sales tax? If so, sign me up. That's all I wanted to hear. You say there is no IRS or penalty for cheating (but wait, I can't cheat, I determine what I need to do business) I think I can make this thing work.
I've got my eye on a nice 34' fixed keel sloop that would get me more sales than anything else I could do. Heck, I'd even put a graphic of one of my widgets on the mainsail.
And lord knows I'd be able to put forth a better "business" image if I sold this crackerbox and bought a home over on Lake Drive.
Everyone in America will have some kind of home business to write off any and everything he buys (each being the determiner of what is a business expense).
Sorry, I just had to jerk your chain a little. But you see my point. The government is going to be in this up to their eyeballs. They would lose their strangle hold on the populace if this passed. You'll be older than I am now before that happens. Thanks for the chuckle though.
Maybe, your momma was a drunken sailor?
You know what I'm talkin'bout, your slow, but not that slow.
Respect your elders, listen to Gramps!
Secondly, the billions of dollars spent on IRS compliance would be eliminated. I don't see a downside to this.
Good call, Fizzie!
No, Gramps, that's not quite right. You've made the assumption that you have to pay 23% on the items you buy and incorporate into your product. You do not have to do that; those items are non-taxable to you - in fact it might even be against the law for the seller to charge you sales tax.
The price of your widget would remain $0.70 to you; adding $0.25 to it as you say would mean an untaxed price of $0.95 or for purposes of the tax-inclusive calculation, or a selling price of approximately $1.23 to your customer (assuming you are making a taxable sale to an end-user and not selling to another business).
You have also not taken into consideration a reduction in the price of the raw materials you use (the paint in this case); assuming the same 30% price reduction, it would drop to $0.18 if it were $0.25 to start with, giving you an even greater margin.
Could you explain more fully what your comment about paying less that 23% for payroll tax refers to? Are you employed by someone else? Self employed? Are you ignoring income tax withholding in that figure?
Little Willie is "The Worst President In American History".
The NRST will tap that resource. I think you guys would be astounded at the revenue generated with the NRST, and I'm all for it!
H*ll Fizzie thats just the begining! Can you imagine what would happen to our economy when our USA produced products are allowed (finally!) to compete on an even basis in the world market without all these hidden taxes rolled up into their prices? Why noone will be able to keep up with us! In fact, I suspect you would soon see WHOLESALE tax cutting world wide!
I've got my eye on a nice 34' fixed keel sloop that would get me more sales than anything else I could do. Heck, I'd even put a graphic of one of my widgets on the mainsail.
Buy it used, and you don't even have to pretend your a business, you purchase it tax free as the taxes have previously paid on it. Under the NRST things are taxes once but only once. Then you can put a widget on the mainsail with a $ logo embossed over it as well.
. The government is going to be in this up to their eyeballs. They would lose their strangle hold on the populace if this passed.
Right now the Feds are up to their eyeballs in everyone's financial affairs whether a business or not.
The government that will be up to its eyeballs in this thing is your local & state government and not the Feds, You no longer required to file Corporate Payroll, or Personal income tax returns.
If you have a licensed retail business the only reporting done is that necessary to pass tax collection on to state agencies along with the normal state retail sale tax (already done in 45 of the states).
If you have another kind of business your business is certificated as a wholsale buyer. Yes there can be cheats and yes states have a great deal of experience with detecting and dealing with them. Its easier to just pay the taxes and have em out of your affairs unless you really are a legitimate business purchasing for production and sale of resale of products.
If you are a fraudulant business the state will have a hammer on you in no time from what I have seen in my own state which does have a sales tax and has little problem with assuring compliance.
Nope, wrong again. It is true there would be no IRS, but none of the NRST proponents that I've read have ever said there'd be no penalty for cheating. Indeed if you had read the bill you would see very clearly that is not true. I'd urge you to read HR2525.
As a business collecting taxes, you must be licensed by the state (and also as a reseller, presumably). The sort of definitional problem of what is a business expense might be is no different that the situation presently with the same question except that it would be the state making the determination and both they and you would be paid for the collection and administration work you do.
Little Willie is "The Worst President In American History".
Whoa! Easy on the drunken sailor talk! Some of us served proudly in the U.S. Navy.
Norrad is a disruptor, not a drunken sailor. Drunken sailors know the NRST is Right for America. Disruptors disrupt by being what their puppet masters tell them to be, and saying what their puppet masters tell them to say.
All together now: Disruptor Alert! Disruptor Alert!
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
Aside from the fact that your arithmetic is messed up in this post, you are completely missing the point that "deductions" are a meaningless concept under the NRST as income is not taxed (business or personal). Therefore there is nothing to deduct from. You can make your business decisions based upon business and economic considerations and not be concerned with what the government might and might not allow you to do (i.e., take a "deduction" to get back only a small percentage of your expenditure - and that after quite possibly complying with some arcane reporting and accounting requirements and noting that under penalty of perjury to the IRS).
Decuctions are a last century concept - get with the program; they are neither required nor desireable. In addition to those facts, as a purchaser of this sort of capital equipment (plant and fixures) you are not taxed on it at all. You do not understand the NRST concept - read the link I gave you to the bill itself or some of the other links and information presented to you in this thread. Why remain purposely ignorant? The NRST will help you much more than you realize
Since you seem to prefer the status quo, please tell us "What's so fair about a tax on income?"
Little Willie is "The Worst President In American History".
Used to be a flat taxer (ala' Herschensohn 92 Calf Senate campaign) but after much thought I'm for a national sales tax...especially in terms of ending the IRS, making more people pay equally (rich and poor alike will pay a tax for goods & services received no matter the price, which for "the rich" would naturally be higher), and making all the alien & foriegn rat bastards pay towards the government services they benefit from. Actually, that's the best part. THIMMESCH
You're on the ball once again, pigdog. Nice analysis. Gramps is still clouded by the income tax virus. He must get well (eliminate the income tax from his reckoning) before he sees the light.
Your analysis was helpful, to be sure.
Glad you saw the light, Nick Thimmesch. I hope you'll contact your congress critter an make your posiiton known!!!
Sorry about the drunken sailor bit, Taxman! Perhaps I should clarify: nobraain was cogitating as if he were drunken, and he portends to be living on a boat, connected via satellite. Hence the reference.
That being said, I assure all sailors, whether they were ever drunk or not (hehehe) that nobraain is only a pretender!
Ah, blackcat, but there are big differences. Firstly the businesses are paid for the work they do in collecting the sales taxes (that's not true presently - anything the business does with income/payroll tax withholding is paid for by the business; a hidden tax right there ... called an "unfunded mandate" in Beltwayeese).
The audit for a sales tax is an order of magniture or two simpler than for an income tax audit. There is also no chance of the business (intentionally or unintentionally) misinterpreting some arcane tax code rule or principle (such as depreciating multiple classifications of assests with differing rules) since all the reporting is based upon taxable sales and the business is required to keep the receipts showing this for several years. The content of the receipt given the customer is very specific and called out in HR2525, the FairTax bill.
And most people will never even have the possibility of a sales tax audit at all; only those selling to end-consumers. That's a far different thing that the way it is presently - with anyone potentially liable for an audit and any possible penalties. There will be far fewer people and businesses involved in any auditing.
Little Willie is "The Worst President In American History".
I love it. BUMP!
Glad you're in, zevonfan. I like Clapton myself. ANyway, I hope you'll contact you rep and make your posiiton known...
Hey, no problem. I knew you weren't talking about real sailors. Like I said, real sailors know the NRST is Right for America.
nobrain lives on a boat? Offshore? Hey, there you have it. nobrain is a tax protester and with the NRST, his ox gets gored, but good. That is as it should be and explains why he keeps trying to disrupt these NRST threads.
But he's not a real sailor. He may be drunk, but he's not a real sailor.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
Anything BUT dead, pchuck. It was never expected to have been passed until we can get a new President in office. The intent was always to move it along educating people as we go and get the bill into position to be passed into law probably early next year (after the W. H. is fumigated).
The bills will begin to grind through committee probably starting sometime in March of this year. It's a slow process, though.
Little Willie is "The Worst President In American History".
Then you might read this link.
Little Willie is "The Worst President In American History".
Great job on this thread today, guys. Seems like this here NRST is beginning to get some traction, whaddya think?
I know that by presenting facts and straight talk like we have been, we'll keep winning folks to our point of view. Today proves that point. What is the count on "yeas for the NRST" today? Anyone keep track?
Good work, gents, good work. I believe that we can never be a truly free people so long as we have an income tax and an IRS.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
The NRST bills do away with the income tax and the IRS and call for the repeal of the 16th amendment to boot. There is already a bill before congress (H.J. Res. 45) to repeal the 16th amendment. In view of all that it would have to be a mighty stupid congressman who would suggest putting an income tax back into place with a bill like the FairTax (HR2525) that requires the destruction of the income tax records. In addition, the taxpayers will come quickly to see the NRST is a fair and better way to obtain tax revenues and they will not wish to return to the income tax.
Little Willie is "The Worst President In American History".
Anything BUT dead, pchuck. It was never expected to have been passed until we can get a new President in office. The intent was always to move it along educating people as we go and get the bill into position to be passed into law probably early next year (after the W. H. is fumigated).
The bills will begin to grind through committee probably starting sometime in March of this year. It's a slow process, though.
Little Willie is "The Worst President In American History".
The 106th Congress ends this year; remember we are in the 2nd session. Come on, HR 2525 is dead for the 106th Congress. Congress isn't going to pass a bill like this in the year 2000. Sure, in the 107th Congress a new bill might come along that may have a chance with a new President but that is all dependent on the November election.
I bet a bill like HR 2525 gets proposed every Congress. Remember, there are literally thousands of bills proposed by Congress each Congress and only a couple hundred are passed during that 2 year period. I might add that a bill like this now stands a better chance of passage than during D's rule of Congress but we are in the 5th year of R rule of Congress.
As far as I'm concerned the government can eliminate S/S completely (Medicare, too). And I am a recipient of both. The funding in HR2525 (the FairTax bill) for the entitlements comes from the sales tax. In the bill, the General Revenue Rate is defined as (tax-inclusive) 14.91%. The other 8.09% is the sales tax rate that covers the entitlement funding (which is the equivalent of 12.9% or the wage base for S/S and the balance the percentage of the wage base for Medicare - both percentages required by current law and based on wages).
Due to current law, wages (but not income) will still need to be reported to the SSA (by with no payment withheld) so that their records can be kept as at present. The money, however, will come out of the 23% tax-inclusive rate and allow there to be NO withholding of payroll or income taxes. This, combined with the family rebate, will give each wage earner a more than 30% takehome pay increase (which he, not the government, controls).
Little Willie is "The Worst President In American History".
So, like, you guys work together?...'cause, the way you guys circle jerk each other one can only think, eh? Are'nt you afraid people will talk?
Well, an NRST is one of those ideas that sounds good in theory, especially if the FIT is eliminated in the trade. However, there is one big downside:
When you are imposing a sales tax of at least 23% (and remember that many states will have their own sales taxes on top of that, and some goods -- like alcohol, tobacco, gasoline -- have some very steep excise taxes as well), then you start to create a powerful incentive for smugglers, especially where high-value/low bulk products are concerned. Smuggling is a problem wherever two adjacent jurisdictions have large differences between their sales tax rates.
Do you like the airport security & customs gauntlet that you have to run through now when you fly back into the country? You haven't seen anything yet. Just wait until you have to prove that EVERYTHING that you are bringing in with you -- down to and including your underwear that you have on (had on, that is, until they did the strip search) -- has had the NRST paid. Forgot your receipt? Well, you will have to pay up then, even if you claim you already have paid it. Plus penalties.
Do you like the way that the current "war on drugs" is being run? Do you like those 2AM no-knocks at the wrong address and civil asset forfeitures for trivial (and possibly planted) "evidence"? Well, imagine that it is not just drugs which are contraband, but ANYTHING which is imported without paying the NRST.
While the thought of getting rid of the IRS by abolishing the FIT is nice, the reality is that there would still be a revenue agency to administer and enforce the NRST. We have a federal agency doing that type of administration on a small scale now. It is called the BATF. Like those guys? Then imagine what life would be like if they were the size of the IRS.
While there are some definite advantages to the NRST proposal, lets look at this open-eyed and clear-headded, for there are some definite disadvantages as well.
Yeah it's been a real kick freepin' today...I wish I had more time to post & reply!
I think we educate more folks than we could ever "count" here. Of course, FR is small, but the education and information that leaves FR is disseminated throughout the US by lurkers and FReepers alike. We may never know how much we do; but one day it will pay off....that's enough for me!
damn those italians..!
Anyway, you have some misconceptions about the bill Stefan, really. A purchaser is never liable for a receipt. ANd your "adjacent jurisdiction" idea is why states will conform to each other (or darn close) in order to compete.
And don't let state and local taxes keep you away from the nrst...you're ALREADY paying those taxes. The nrst only replaces the FEDERAL income taxes you're paying. Of course you'll still pay state and local. Your assertion that the combined rate will be too high is only a buttress to a common nrst argument that folks just don't know how much they pay in tax! Clearly, you are one of those folks. You won't be paying more under an nrst, you'll just be able to see it....you see, your realization of the overall combined tax rate made you mad...well you should be! And you should be mad right NOW! THe nrst doesn't add tax, it just makes tax visible....that way we'll all be psyched about lowering taxes...get it?
Imagine no income taxes to pay.
Imagine no federal deductions from your paycheck.
Imagine no individual tax filing.
Imagine no IRS.
Imagine April 15th as just another day of spring.
Imagine if John Lennon had used THESE lyrics to his song!
Burble, burble number nine,
ole' norraad's running along just fine.
His problem is he (like many a lout)
just doesn't know what he's talking about.
Little Willie is "The Worst President In American History".
Now you know why he's D E A D !
Actually he died for a lot less, it was the song "John Sinclair" that sealed his fate.
Now calm down circle club, do your research before you go off prematurely.
You know, you guys are very rigid about things, did you know that?
You're not alone Nick!
GO HERE and read what one of the guys who helped INVENT the flat tax idea now has to say about it!
Your reply #130 is just a piece of scare doggerel, and your #133 is not just imagining. Those things in #133 will happen with the FairTax; they are built into the law. I'd suggest you read it before popping off with ill-founded statements. In fact, I'd suggest you read this link first of all having to do with compliance under the FairTax. Your "issues" are greatly and dramatically overstated.
Let's take state sales taxes first. To administer the NRST (and be paid for doing so), a state must conform its sales taxes to the NRST law (except for the rate). Most states will not only opt to do that - they're paid, remember - but they will most likely get rid of their income taxes to boot, instead relying on the NEW state sales tax.
Current state sales taxes do not tax services which are actually larger than the income tax base, dropping the rate to less than half the current rate. In addition, all states have huge numbers of exemptions and exceptions in their sales taxes whereas the NRST has none, further reducing their NRST-conforming state sales tax rate. This would mean that a state with, say, a 7.5% rate now would be able to reduce the rate to perhaps 2 to 2.5% for the same revenue. This would be even further lessened by the payment to the state for administering the tax. So your "big state sales tax on top of NRST sales tax" bogeyman is actually not very frightening at all.
Theoretically things you bring into this country are taxed now by customs so that doesn't represent a big bogeyman either.
There has never been a perfect tax and most probably never will be, but the NRST is a massive improvement over what we have right now - which contains everyone of the "issues" you mention along with police powers of the IRS to enforce them abusively to boot. In fact, your remarks are probably more appropriate in that milieu than in any other. Most of them are off base in the NRST environment as most taxes will be collected in the normal existing retail establishments.
Little Willie is "The Worst President In American History".
Burble, burble number ten,
looks like he'll start over again
and burble, burble through the night
without knowing that he's not right.
Little Willie is "The Worst President In American History".
So that spreadsheet is so simple, yet effective...have you seen it yet?
Hey, pal, people are talking. And, they are taking positive action.
What they are saying is: "The NRST is an idea whose time has come. We are gonna get involved and help Scrap the Code and Scrap the IRS!"
And what they are doing is backing up those words with action -- they have become engaged in a classic battle of good (the NRST) vs. evil (the income tax and the IRS). And, the number of good guys keeps on increasing. Make no mistake about it: We will abolish the evil income tax and the evil IRS.
It is your choice. You can become part of the solution or remain part of the problem. I care not what you do. If you choose to educate yourself and join with us, you will be welcomed. My experience is that hard core income taxers, when converted to the NRST, become even more hared core supporters of the NRST. But, if you choose not to, don't get in our way. IOW, "Lead, follow or get out of the way."
I believe that we can never be a truly free people so long as we have an income tax and an IRS.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC!
I love the way you change the font style, in order to make your posts seem important.
Perhaps next time you might add some color...so we can be even MORE impressed!?
Get a life!
"Buy it used, and you don't even have to pretend your a business, you purchase it tax free as the taxes have previously paid on it. Under the NRST things are taxes once but only once."
I asked this question on another "National Sales Tax" thread and never got an answer--if something is only taxed once when sold "as new", how does this affect real estate/home sales??? Are all sales of "other than new" homes tax exempt??
I'd buy almost anything to get rid of the IRS! However, what about State, County and City taxes and "fees" (really more taxes)? If I'm to pay 23% to the Feds through a sales tax, the locals will probably increase their tax rates as they did in California after property taxes were lowered by law. Will I still end up paying more than 50% of my meager income in total taxes as I'm now doing?
"I asked this question on another "National Sales Tax" thread and never got an answer--if something is only taxed once when sold "as new", how does this affect real estate/home sales??? Are all sales of "other than new" homes tax exempt??"
Once the FairTax is the law of the land, existing homeowners are considered to have paid their taxes on that home (in the cost of goods, hidden in the retail price of that home).
Education is the key my friend.
Glad you're in, zevonfan...
I've been in.I have thought about this for years. I've educated and debated folks since Forbes came out with the flat tax proposal in during the 1996 election. IMO, Keyes articulates the case for the National Sales Tax better than anyone.I think that the pinko that came up with the payroll deduction method of tax collecting deserves the Commie of the Century Award.If this national Sales Tax Bill doesn't pass, I think a bill forcing people to write out a check each month to pay their federal income tax would make all taxpayers realize that it is their money Washington is spending.
Keep it up folks...this is great...I go away, and when I come back...more answers to questions that inevitably pop up. I am skeptical by nature...so keep it up. This is an interesting idea. Anything that has as its goal eliminating the IRS/Income tax can't be that bad...especially if the effect is to create incentive to reduce(drastically) the size of government. Keep it up! I am with you. I gotta let it gestate in my mind..but I am with you, and soon enough my representatives will be hearing from me. This is a great thing, because it is focused and real, so that folks who may disagree on abortion rights, or drug laws, or immigration, don't have to struggle to find a President who matches them...they can instead build consensus for a single issue upon which we agree on many things, and try to get it done. The effect it would have on those afformentioned issues would be positive as well. Eventually we have to take back the government, shrink it back down to its intended purposes, and heave the rest. Keep it up!
Noorad you worthless punk, why don't you go watch some cartoonies and leave the adults to talk. Thanks.
"I'd buy almost anything to get rid of the IRS! However, what about State, County and City taxes and "fees" (really more taxes)? If I'm to pay 23% to the Feds through a sales tax, the locals will probably increase their tax rates as they did in California after property taxes were lowered by law. Will I still end up paying more than 50% of my meager income in total taxes as I'm now doing?"
For the first time, you will be able to choose how much you pay in taxes by what you purchase. See table above. You will receive a Family Consumption Allowance, based on family size. Plus you will bring home 100% of your paycheck. Look at your pay-stub...how much is confiscated? That figure will be your automatic pay raise!
The above table shows that a person that earns 39K, married with two children will have an additional 12 hundred a month!
Service providers are not exempt from the income tax today, and should not be exempt from the FairTax. States that choose to conform the NRST laws, there will be a larger tax base.
Example: They will now charge a tax on service businesses which account for over half the GDP. So if you have a 7% state sales tax, expect it to drop to 2 or 3% in short order. It would be unfair and economically foolish to tax only goods. Neither consumption of services nor consumption of goods should be tax preferred. Competition, - not politics - should determine what goods and services cost. This lower state sales tax rate will raise the same amount of revenue.
..oh,geez, you only been here since 2-3-2000 & now your upset..
OK Chief, I'm willing to believe you since I also believe that if we don't trash and burn the present tax code we'll soon end up just like the ancient Romans. They taxed the Empire to its death.
The NRST would also obliterate most CPAs, the tax preparer business and the computer tax prep programs. Are their powerful lobbiests going to scream bloody murder to the Reps and Senators DC and ruin the chances of passage of the bill? You can be sure all the dumocraps would vote against its passage. They regard all tax money as "their money" and would frantically oppose any attempt to cut off normal methods of collection(the IRS)
The First Felon would surely veto the bill if he were still in office at the time of House and Senate approval. Perhaps Igore or W would veto it too (?) That's a worrisome thought.
I asked this question on another "National Sales Tax" thread and never got an answer--if something is only taxed once when sold "as new", how does this affect real estate/home sales??? Are all sales of "other than new" homes tax exempt??
Taxed once and only once is the rule in the bill. If you are purchasing an older home no sales tax, presumptively the tax has been paid through income taxes.
If you build new that's a different story but you will find that interest rates are expected to drop as well by a 1/4 point or more. And you will be purchasing that home with untaxed dollars(i.e. nothing witheld no payroll taxes) so you have more to work with towards getting that new home built.
Thats why these bill need all the help we can give em. To convince those Congress Critter's that it is in there own interest(politically if not economically) to get the NRST passed
Remember that HR2525, is being build with a equal cosponsership of Dem's & Reps. There really is something there for everyone, and if we manage to maintain a Conservative majority in House & Senate, with Bush or Keyes in the seat. It's a virtual lock.
By the way you will notr that Bush has not made that e-commerce pledge forbidding collection of sales taxes through net businesses. He is aware of the NRST, and for once using his brain, by not setting hisself up for the kind of fall his Daddy pulled. OTOH, McClintok has has pretty much locked him self out of that issue by binding himself to the no e-commerce sales tax pledge.
I have no problem with the status quo for a couple of years to get the NRST passed, I do object to locking it out for another decade, I might miss out on the big party when it gets signed into law!!
Yep, seen it but haven't had much chance to work with it yet. Good work. More later on.
Little Willie is "The Worst President In American History".
See reply #137.
Little Willie is "The Worst President In American History".
You'd find it very interesting to see what the "Commie of the month" who was the main force in originating withholding had to say about taxes. The last part of the article about taxing businesses is especially enlightening.
Just go sit at the feet of Beardsley Ruml, a New-Deal Democrat through and through.
Little Willie is "The Worst President In American History".
The NRST plan will do a lot more than just get rid of the income tax and the IRS. It will expose for the lie it is just exactly how much has been hidden from taxpayers to keep them from know their total tax burden. Most of the status quo soldiers haven't a clue as to how great their total tax burden really is.
And don't tell me you think the total tax burden just became hidden by accident - it didn't but was a series of calculated, knowing actions on the part of liberal and tax-and-spend politicians in both parties to keep the truth hidden. It is now coming out into the sunlight blinking and bobbing it monstrous, ugly hear ... it ain't pretty!
In addition to putting the true cost of government before people in a simple, unambiguous way, the NRST will create a great burst of increased economic activity for this country and the people OTHER THAN the politicos.
Little Willie is "The Worst President In American History".
I deal with a number of CPA's. Without exception, ALL of them would like to be rid of the income tax and the IRS. They know that they can do much better for themselves and their clients by getting into true accounting and financial advice instead of playing "fiddle with the tax statutes and regs" while trying to keep from exposing either themselves or their clients to various serious types of liabilities.
Even the tax firm H&R Block has said they would be just fine and would swing into the advisory business - no income tax holds no terror for them. The software companies will just no longer have that line of business; that's not the end of the world. There's plenty of software out there yet to be written.
In fact there are Democrat co-sponsors of both the bills. In spite of what you might think, a number of Democrats very much know that the present system is broken and cannot continue. One of the original sponsors of the FairTax bill (Peterson) is an accountant who ran on a position of planning to get rid of the income tax.
The legislative push on the NRST is timed to prevent it from going before the Current Occupant.
Little Willie is "The Worst President In American History".
Of the many good things about this proposal, I think my favorite is that it makes the tax burden real again to the public. No more withholding and H&R Block, you will see a big red 23% at the bottom of every receipt. Whether that 23% should go up or down will be a key issue in every election, and it will go down.
Great day's work, people! This is one of the most positive TRTs I've read in a long time. Glad to have been a part of it.
There's something about your post that looks familiar, but I'm not sure why..
Your paranoia is showing.
This is not a tax increase. This is a brand new tax.
Ok, we'll call it a "brand new tax", hell let's call it the "fun in the sun" tax. Either way, it's another tax isn't it?. Once again, there is nothing in this bill denying the federal government the legal standing to tax income of which the authority is derived from the 16th Amendment. Correct or incorrect?. The point of discussion is HR2525 is it not?.
I'll let CHIEF or geezer defend the stats.
No need for them to defend anything, I've made no contention with them or the statistics. They've done a fine job assembling them.
But that administration will no longer have jurisdiction over individuals. Individuals will longer be audited. Income will no longer have to be calculated, exempted, and the ordinary citizen will have no more IRS hoops to jump through.
Oh, I get it, we get rid of the IRS and now we'll have state and federal agencies to deal with and thats OK?. Of course they won't be the IRS, the new agencies will be called some different acronym. But the function that the IRS fulfills will still remain and stay the same (collection of federal revenue and compliance) and new new burueacracies in it's place will still have the legal authority to reach out and touch us the same way the IRS currently does won't they?.
What in this bill ensures that qualifying individuals would not be audited to ensure/verify compliance?. If not an audit, how else will the governments (federal or state) verify compliance to those obliged to pay?. As well, what part of it makes you think wages (one form of income) won't be reported to the feds?. For most of us, wages are the primary form of income. As well, if individuals will no longer have to worry about the tax collector, why do the "new" tax compiance agencies need the legal authority to garnish wages?.
Nope. HR2525 destroys the tax code. Defunds the IRS. Destroys income tax records. The amendment you're looking for is H.J.Res 45. There's a link to it a couple of posts back. Or you can go to the Library of Congress and search for it.
Regardless of what this bill does to the current code, without the repeal of the 16th Amendment, the federal government will still be legal in taxing income. This bill does not change that fact one iota, admit it. This being the case, should HJR45 not pass congress; the senate or 35 state legislatures, we'll have an open book on taxing income on top of a 23% sales tax. If this in incorrect conclusion, please let me know why.
You are attempting to both juggle torches AND ride a unicycle. One at a time. Linking a tax cut to a tax reform is the surest way to see them both fail.
Oh please, enlighten me with some more of your political wisdom. Where does this bill cut taxes? and again what is "fair" about 23%?. Why not just do something simple first (as you suggest) like lower the income tax rate say 5% and then see if the system of taxation needs reformed. Maybe I'm missing something here but as I see it, the amount of taxes I pay now to the federal government is a result of the size of the federal government, not a result of the tax system. My contention is that the federal government is to large which results in the oppressive level of taxation we currently have. Do you think the system of taxation is the problem or the size of federal government?. I see nothing in this bill which reduces the size, scope, or authority of the federal government. Again, if I am incorrect, please enlighten me as to which section of the bill does this.
And I have not seen a proposal to change the revenue law. Point one out to me and I'll review it.
Neither have I. And would it not be easier to do this?. All it would take is an act of congress wouldn't it?.
In the meantime, HR2525 stays within the current confines of the law,....
So what!, the revenue law can be anything that Congress wants to be can't it?. Again, why not simply change the existing law?. This is the way our system works is it not?.
...exorcises the IRS,...
Nice propaganda ploy. I'll just love when someone associates the enemy (in this case the IRS). It always helps when you can dem
... and replaces it with a fair, economical, socially responsible, and workable alternative. A Constitutional amendment is a further safeguard; the final bouquet on the grave of the income tax.
. A Constitutional amendment is a further safeguard; the final bouquet on the grave of the income tax.
A Constitutional Amendment would be the ONLY safeguard against any type of income tax.
Since currently BOTH income and sales taxes are legal sources of revenue under the Constitution, there is nothing protecting us from a double-whammy now.
If that is the case, then the point of this bill is simply to institute a 23% sales tax isn't it?. Besides, don't we already pay federal sales tax on any number of items such as long distance service, tires, gasoline....
Wide-eyed, idealistic, feel-goodisms are all well and good, and they amount to exactly squat as a means to an end. (And ya would've gotten away with it, too, if it hadn't been for those stinkin' kids!!)
I've always found that putting the cart in front of the horse to one of those feel-goodisms you seem to be familiar with.
The monster I see as the problem is the federal government. It would appear that you advocate changing the diet of the monster, but not it's appetite. I advocate lopping off the monster's tentacles. But then again, that might not be the idea, more than likely the purpose of this bill is to change who feeds to monster.
Don't count on the people not meeting in an abandoned wharehouse for a porterhouse. People well do almost anything for a 23% discount on goods regardless of how much income tax they don't pay. That's just that much more money they don't have to pay. The rate is just to high to create honest tax payers. The bigger the tax % the bigger the Blackmarket.
So is this like a flat tax ? I pay 23% on every purchase ?
"Once the FairTax is the law of the land, existing homeowners are considered to have paid their taxes on that home (in the cost of goods, hidden in the retail price of that home)."
Thanks! I become more and more convinced that the NRST is the way to go. Now if we could only get term limits in place too, we might yet save this republic.
As a business under the NTST you receive a certificate allowing you to purchase business materials tax free from retail businesses. So the price for your materials is $0.70
I haven't seen this anywhere. This answers a lot of my questions. It, however, raises questions about vehicle expenses and other legitimate expenses incurred by the business that don't directly go into the product.
I'll admit, my mind-set (now there's and oxymoron) is toward the current tax code. It impacts practically every decision I make. Thanks for the help.
Could you explain more fully what your comment about paying less that 23% for payroll tax refers to? Are you employed by someone else? Self employed? Are you ignoring income tax withholding in that figure?
Actually my wife runs her own company and I still works for da man. I process all debt through 2nd mort. to write off the interest. I have a lot of deductions, not the least of which are the current state and local taxes (over $10,000 a year). I also have a few tax shelters and tax deferred IRAs. When I divide my Fed, FICA, Medi, taxes into my gross I pay about 11%.
People well do almost anything for a 23% discount on goods regardless of how much income tax they don't pay
Yes, 23% tax inclusive seems high, of course we're already paying that much now, it's just hidden from sight. Prices will not be higher under the nrst, Mike G. The only change will be that federal taxes will be listed on the receipt as a line item....THAT will get everyone's attention in re the cost of government.
Secondly, in order to cheat the system, not only would you need a consumer willing to break the law, you would need a merchant willing to risk his existence as a business just to save YOU a few bucks of YOUR tax.
Of course it's possible. However, it is not as likely as your post asserts that it would be.
THe thread is long, so perhaps you haven't taken the 3 weeks needed to read it all (lol), but two important points:
1) prices will NOT change under the nrst
2) the nrst does NOT increase tax on you, it only makes the taxes VISIBLE to you
With visible taxes, we all will get pissed about high taxes and demand that our ELECTED rep do something about it....that's the plan.
'When I divide my Fed, FICA, Medi, taxes into my gross I pay about 11%.'
The analysist by the NRST people always seems to forget about the numerous deductions in our current tax code. For people who provide services, the NRST will hit them the worst. 100% of their gross income will be hit with the NRST tax, with not one penny of deductions. I run a business too, and I do my own taxes, and I know the value of deductions. A smart businessperson can legally cut their taxes substantially. It would be nice to get rid of the abusive IRS, but in reality the NRST audits on businesses will be just as intrusive. It is not the individual wage earner who fears an audit today, since their taxes as straight forward. It is the small business owners. Nothing will change under NRST.
So is this like a flat tax ? I pay 23% on every purchase ?
You pay 23% tax inclusive on purchases of NEW goods and services. So if you buy a home that someone else bought new, you pay no tax on it. If you buy a new TV, you pay the tax on it.
But prices won't rise, contrary to most folks first impressions. You see, by removing the "hidden" tax from prices, prices will fall by aorund 30 cents per dollar...then add the retail sales tax and prices are right back to where they were to begin with...But now, you have your whole paycheck (probly a 25% raise) to spend or save....
BTW investments are not taxed...like tuition or training...
oh yeah, "hidden" taxes disappear cuz business to business purchases are not taxed....
Re-read the article, Squantos...it's quite short and it addresses the questions you put forth...
Glad your interested....
I haven't seen this anywhere. This answers a lot of my questions.
[Click Here for Text of HR2525]
If it is a legitimate business purchase towards the production or sale of product or service, it is not taxed. There are no deductions/exemptions because it is Retail purchases being taxed, not income. There is nothing to apply a deduction or expemption to.
All businesses are sellers(goods or services), thus required to have certification under,
(convoluted thinking) Yes, I'm happy to pay taxes today, interest free gift to the government, in hopes that I'm smart enough to get a portion of that back next April 15th through exemptions, exclusions or loopholes. And if I don't like the outcome of my own figures, I'll simply slide my CPA a few hundred bucks to make it look legal.(/convoluted thinking)
"For people who provide services, the NRST will hit them the worst. 100% of their gross income will be hit with the NRST tax, with not one penny of deductions."
Service providers are not exempt from the income tax today, and should not be exempt from the FairTax. Services now account for well over one-half of the Gross Domestic Product (GDP). It would be unfair and economically foolish to tax only goods. Neither consumption of services nor consumption of goods should be tax preferred. Competition, - not politics - should determine what goods and services cost.
"I run a business too, and I do my own taxes, and I know the value of deductions. A smart businessperson can legally cut their taxes substantially. It would be nice to get rid of the abusive IRS, but in reality the NRST audits on businesses will be just as intrusive."
Since 45 states already collect a sales tax please provide ONE (1) article that discusses the abuse on business the state sales tax authority have caused.
"It is not the individual wage earner who fears an audit today, since their taxes as straight forward. It is the small business owners. Nothing will change under NRST."
BOVINE FECES! Why not talk to someone that is not a business owner why he fears the Gestapo IRS?
NOTHING WILL CHANGE UNDER NRST?
The FairTax Will:
The FairTax Won't:
It sounds as though the government has put you in the position of running many of your economic and business affairs based upon what the tax code urges and/or allows. That's too bad since it always leads to more inefficient use of resources than if you were not so controlled. With the NRST, there is none of that sort of government manipulation; you run your business as seems best to you economically.
But let's look at your 11% and your deductions ... and the taxes you don't see as well. If you're at a marginal rate of 11%, that means that your $10,000 deduction is only worth $1,100 to you. What gyrations and pertubations did you have to go through for that? What did you have to pay for accounting advice to comply with the various (and changing) depreciation laws and the reporting thereof. What is your peace of mind worth since everything you have reported to the IRS is potentially the subject of an audit where you can be fined (or worse). Isn't not being concerned about that worth something to you? All of these costs to comply with the tax code reduce the $1,100 value gained by your 10,000 deduction. At some point, they may easily exceed that value ... should you be audited for example, or called upon by letter audit to provide more extensive justification of some point.
In addition, you have probably considered the payroll taxes your wife pays to be 7.65% - they aren't; in fact most economists would tell you that the Employer (ER) portion is also borne by the employee in the form of lower wages. As economist Walter Williams says:
"According to the government, payroll taxes for Social Security and Medicare are "paid equally by both employees and employers," with each paying 7.65 percent. While that may be true for accounting purposes, economist Walter Williams explains how it really works:
You probably already believe . . . that your employer pays half your Social Security. This lie may be demonstrated by pretending that you're my boss. We agree to a wage of $7.00 an hour. You deduct 50 cents an hour as my Social Security contribution and add 50 cents as the "employer contribution," making your cost to hire me $7.50 an hour. My question is: If it costs you $7.50 to hire me, what is my minimum hourly output for you to keep me on the job and stay in business? If you said $7.50 an hour, go to the head of the class, because you also know who pays all of the Social Security tax. The worker does.
Williams observes that the government maintains the myth that employers pay half of Social Security and Medicare taxes because Americans would "go ape" if they knew the true tax burden these programs impose. "
If you choose not to believe that, you're not only in opposition to views of most economists, but you're still not off the hook since this additional payroll tax then becomes part of the hidden taxes that makes up from 20 to 40% of the cost of things that you buy.
The point of all this is that there are many parts of what are really your actual tax burden that you do not see or think about. Even your interest-free loan to the government is a hidden tax - it costs you something in the way of foregoing earning interest on that money, for example ... that's a cost. Do you think that it is an accident that so many of these taxes and costs are hidden from you?? Think again; they are the result of a calculated (and pernicious) series of ploys used by the liberal and tax-and-spend politicians to keep hidden the actual tax burden you bear. Almost all of these hidden taxes are eliminated by the FairTax. Wake up and think about it.
Little Willie is "The Worst President In American History".
Certainly deductions are worth something in the present income tax scheme. They are worth the deduction amount times the marginal rate. If your marginal rate is 20%, a $20,000 deduction is worth $2,000. But that's not the point, even. Why should a taxpayer be forced and coerced into jumping through the hoops of the tax code and the IRS just because the government considers him a criminal until he prooves otherwise? It costs a good deal to comply with those requirements which reduces the value of your deduction.
In addition, most businessmen such as yourself ignore the Employer (ER) portion of the payroll tax when they think about their tax burden. Most of them, like you, think that in calculating their 1040 they have figured out what their tax burden might be. That isn't true as you very well know (but refuse to admit) from being involved in many of these TRT's (Tax Reform Threads). There are other items involved in determining your tax burden as well.
Even the year's interest free loan is a hidden tax, not to mention the hidden taxes that we more commonly talk about. The inflation promoted and controlled by the Federal Reserve is also another form of hidden tax since it is intentionally done by the government/FRS combination. That robs of 4 to 5% of our purchasing power each year. Extend that out for a few years and add that to your hidden taxes.
Under the NRST any sales tax audits are hugely simplified compared to the income tax variety and much more simply complied with by the business by keeping the legally-required sales receipt information. Most people will not be involved - even potentially - in sales tax audits with the NRST.
Moreover, the NRST does NOT tax 100% of your income - not at all - it taxes only what you spend for new untaxed items. What you save and invest (which you determine) is not taxed at all. And you still haven't told us "What's so fair about a tax on income?"
Little Willie is "The Worst President In American History".
You made the absurd statement that “Nothing will change under NRST.”
Well, let us start a list of changes that will occur under the NRST, and then, based on fact, perhaps we can draw a meaningful conclusion that “A lot of things will change under the NRST, and all of them will benefit all Americans.”
I’ll start with a few observations of my own, and intentionally leave room for others to jump in here and add to the list. I expect that it will become quite long.
Freedom. We are slaves. Let’s face it, Americans do not have first dibs on their own money! When government (local, state and federal) impose income taxes on the citizenry (and take their cut before the paycheck is even cashed or deposited), the government is in effect saying “We will decide how much of your own money you can keep.” The NRST will allow all Americans to decide how much taxes they will pay based on what they consume, not how hard or how smart they work, save and invest. How much is your freedom worth? Under the NRST you will be able to work, save and invest without government interference in your economic life. That, my friends, is economic freedom. And, as you all know, economic freedom contributes to the growth of other freedoms. We will never be a truly free people so long as we have an income tax and the IRS.
Economic Growth. The NRST will fuel spectacular economic growth, without inflation. When Americans are encouraged to work, save and invest, and are not penalized for doing so, but are in fact rewarded, by all accounts the rate of GDP growth will double, and the (currently very anemic) rate of personal savings will triple. That spells Economic Growth. In the NRST environment, Americans will have more disposable income, and will both spend more and save more. Savings are the seed corn of economic growth, and increased consumption will fuel more business investment. In the NRST environment, savings and consumption are good for the economy, and neither is penalized by an obscene tax code. Not to mention all the businesses and jobs that will come back to America when we quit double and triple taxing businesses and the products they produce for both domestic and world consumption. Think Economic Growth.
Equality of treatment under the law. A basic founding principle of the United States of America is that we each are afforded equality of treatment under the law. It is the cornerstone of our society, and for years has been grossly violated in many respects. Here, we are concerned only with taxes. The income tax levied in 1913 as a result of passage of the 16th Amendment to the U.S. Constitution violated the equal protection clause of the Constitution. And set the stage for further outrages. The very concept of a “Progressive Income Tax” should outrage us all. Tell me, if you will, what is “equal” about dividing us into classes for the purpose of taxation? Punish those who work, save and invest by imposing even higher tax rates on higher incomes? Use class warfare and jealousy to formulate tax policy? Is this America? Targeted tax cuts? Did you get yours? My friends, the NRST, by taxing us all at the same rate on our consumption, will rekindle what should be a very bright American flame – the torch of equality of treatment under the law. I submit to you that tax policy should, nay, MUST be formulated ONLY to raise funds for the legitimate purposes of government, not to pick winners and losers; not for the purposes of “social engineering;” and most assuredly not for the purpose of inciting and exacerbating class warfare as the current code does. Tax policy should and must be neutral in these respects, and the NRST is decidedly neutral.
Increased purchasing power for all Americans, irregardless of their current income level. The bottom line economic factor arguing in favor of the NRST is that we all will have an immediate and profound increase in our purchasing power. Our ability to provide for our family and enjoy a lifestyle commensurate with our contribution to society in the form of useful work will be increased by exactly the amount of money now withheld from our wages plus the Family Consumption Allowance. That is right: Every American will enjoy an increase in disposable income when the income tax is replaced with the National Retail Sales Tax. As has been demonstrated many times on these threads, prices will not go up under the NRST. Depending upon your current tax bracket, your disposable income will increase from 15% to 40%. What will you do with it? I know what I’m gonna do with my “National Retail Sales Tax dividend!”
OK, I have said quite enough. Knowing full well that I have convened a seminar, it is time for me to let others have a say.
So, what say you? I know I have left out many benefits of the NRST. Things will change dramatically for the better, and I know that there are those of you out there just itching to jump in here and add to the discussion. The ball is in your court.
We can never be a truly free people so long as we have an income tax and an IRS.
Scrap the Code!
Scrap the IRS!
Abolish the VLWC
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My poor 133 is dying here pulling in 171 replies! Can the article be reproduced and reposted on a fresh thread? It's gotten some good discussion, and I hate it if folks (like me!) turn away to due the download time! I'm html stupid, can you help?
I'll freely admit that. At first pass your post seemed typical of the many fans of the status quo, tax-protesters, and general bilge that seem to occasionally drift into these threads. If that is not the case, and you have genuine concerns that we can address, and honest misconceptions we can correct, let me offer you my apolgies for jumping to conclusions.
It's another tax isn't it?. Once again, there is nothing in this bill denying the federal government the legal standing to tax income of which the authority is derived from the 16th Amendment. Correct or incorrect?. The point of discussion is HR2525 is it not?.
The bill removes from the code the portions that gives the government the authority to tax income. From the bill:
I'll let CHIEF or geezer defend the stats.
Your contention was that the assumptions are flawed, and that the stats used to make those assumptions were somehow incorrect. What are the incorrect assumptions?
Oh, I get it, we get rid of the IRS and now we'll have state and federal agencies to deal with and thats OK?. Of course they
won't be the IRS, the new agencies will be called some different acronym. But the function that the IRS fulfills will still remain
and stay the same (collection of federal revenue and compliance) and new new burueacracies in it's place will still have the legal
authority to reach out and touch us the same way the IRS currently does won't they?.
No. The individual no longer falls within the jurisdiction of the tax collection authorities. Businesses are the ones who [get paid to] collect the tax and send it to the government. This is a fundamental change in the government-taxpayer relationship. Individuals will not be audited. In order to comply with the NRST, businesses need only track one thing: sales to retail customers. Furthermore, administration of the NRST is placed upon the states.
What in this bill ensures that qualifying individuals would not be audited to ensure/verify compliance?. If not an audit, how else
will the governments (federal or state) verify compliance to those obliged to pay?. As well, what part of it makes you think
wages (one form of income) won't be reported to the feds?. For most of us, wages are the primary form of income. As well, if
individuals will no longer have to worry about the tax collector, why do the "new" tax compiance agencies need the legal
authority to garnish wages?.
Have you read and understood the bill? Define "qualifying individuals?" Wages will be sent to the SSA for Social Security benefits, just like today. They will not be used for taxation purposes. This is not a tax on income. Federal income tax is removed. Gone. Out the window. Abolished. Kaput. But if a business is does not comply, there needs to be a mechanism by which to remedy. This does not affect individual citizens. From the bill:
Regardless of what this bill does to the current code, without the repeal of the 16th Amendment, the federal government will still
be legal in taxing income. This bill does not change that fact one iota, admit it. This being the case, should HJR45 not pass
congress; the senate or 35 state legislatures, we'll have an open book on taxing income on top of a 23% sales tax. If this in
incorrect conclusion, please let me know why.
Okay, let's play pretend. Let's say you are a Congressman. To make things interesting, you are also a Communo-Socialist and a fan of Karl Marx. HR2525 has passed. No one in the country pays income tax. All government revenues that used to be gather from income tax are now coming from the NRST. But this is not good enough for you. You think that too many people are earning too much money, and that the government should get first dibs on some of it. After all, you (as a socialist) certainly don't want the poor, and the homeless, and the CHILDREN to starve in the street. Now, what would you have to do to reintate the income tax? You would have to rewrite the income tax code. You would have to resurrect the IRS (or similar taxing authority). You would have to somehow secure funding for the new administration. And you would then have to convince more of your fellow congressmen to vote with you than against you.
Now play a different game. You are a taxpayer. HR2525 passes. You receive an effective pay raise of approximately 30%. Interest rates fall. You refinance your house. Every April 15th, you go outside and have a celebratory cookout with the neighborhood. Your (now) tax-free IRA and 401K increase in value. And some dumb schmuck in Congress decides that income ought to be taxed again. Assuming he survives the initial onslaught, and assuming you don't march downtown and personally convince him that it would be a bad idea, he might have until next election day to enjoy the title of "Congressman."
Where does this bill cut taxes? and again what is "fair" about 23%?. Why not just do something simple first (as you suggest) like lower the income tax rate say 5% and then see if the system of taxation needs reformed. As I see it, the amount of taxes I pay now to the federal government is a result of the size of the federal government, not a result of the tax system. My contention is that the federal government is to large which results in the oppressive level of taxation we currently have. Do you think the system of taxation is the problem or the size of federal government?. I see nothing in this bill which reduces the size, scope, or authority of the federal government. Again, if I am incorrect, please enlighten me as to which section of the bill does this.
How do you propose to cut the size of the federal government? EVERY YEAR, government expenditures have increased. We are operating under the highest tax burden in history. Nothing works. The presidential wannabes are not proposing to limit the size of the federal government. Why? Because they don't have to. They are proposing to shift the tax burden around, so that fewer people are aware of it. And they can do it because of all the wiggle-room in the current tax code. 23% is a flat tax on purchases. Everyone pay the same proportion, but those who can afford to spend more (e.g. the rich, if class warfare make you happy), pay more in total dollars. Figure in the FCA and it assumes characteristics of progessivity.
If you're worried about the actual percentage amount, consider that this is the number that has been calculated to generate the same amount in revenue through a sales tax as is currently generated through income, estate, and cap. gains taxes. Now consider further: lowest income tax bracket = 15%. Add 15.3% for SS and MC. That's 30.3% of income vs. 23% NRST. If we place that burden on each reciept, people begin to become aware of the tax burden. In psychology terms, the tax burden is more accessible to the average individual. I contend that the reason the federal government is so large is because people have no idea how much it actually costs them.
If the tax burden is raised, EVERY consumer is impacted. On April 16th of this year, ask your friends and co-workers how much they paid in taxes. Count the number of people who say, "I didn't have to pay any taxes, I got a refund." These are the people who are oblivious to the amount of money their goverment costs them.
And I have not seen a proposal to change the revenue law. Point one out to me and I'll review it.
Neither have I. And would it not be easier to do this?. All it would take is an act of congress wouldn't it?.
Yes. And then another act of Congress to pass a bill that limits spending. We already watched a GOP-controlled Congress crash through the spending caps like the tape at the end of a marathon. If they are able to hide the tax burden, they dramatically reduce their own accountability.
A Constitutional Amendment would be the ONLY safeguard against any type of income tax.
Here is the link: H.J.Res. 45
Is your congressman on the list? If not, call him up and demand to know why.
If that is the case, then the point of this bill is simply to institute a 23% sales tax isn't it?. Besides, don't we already pay federal
sales tax on any number of items such as long distance service, tires, gasoline....
From the bill, once again:
The monster I see as the problem is the federal government. It would appear that you advocate changing the diet of the
monster, but not it's appetite. I advocate lopping off the monster's tentacles. But then again, that might not be the idea, more
than likely the purpose of this bill is to change who feeds to monster.
Decent analogy. I would alter it slightly. While I agree with you that lopping off it's tentacles is a noble goal, currently there are too many to deal with. What this bill proposes is to include everyone in the process of monitoring it's food intake. The beast that lives now is in the habit of raiding the fridge in the middle of the night when no one's looking. And it still terrorizes the countryside looking for virgins if it doesn't get it's 3 squares a day. Starve it first by making sure everyone knows exactly how much it eats. Then we can cut it up one tentacle at a time.
To paraphrase the wise Mr. Reardon, in order to achieve power, a goverment will simply pass so many laws that everyone's a criminal.
H.R. 2525 is a step towards eliminating the legal liability of earning a living.
Thank You for posting this and for the individual help.
Regards..
Your wish is my command!
Principled: Really a nice job! The stuff is in the fan. Thanks and regards.
Howdy, NRST'ers:
I'm a newbie to this board... it's great!
...and the NRST is great! I'm surprised that everyone isn't on board... must be that they just
haven't looked it over very well.
The NRST is Common Sense, Simplicity and Fairness all wrapped up into a straight-forward
better way to raise the revenue needed to run the Gov't.
Glad I found this board and will come back again (and bring some friends).
The National Sales Tax: FAIRNESS & FREEDOM for all!
Cliff Cofer
West Des Moines, Iowa
Email: cmcofer@home.com
P.S. Today, February 20, 2000 is my 74th birthday. Hope to see the NRST replace
the Income Tax and IRS before my 75th.
Hi Cliff,
In your previous post you forgot to invite readers to visit your website and see
the list of
Benefits of the NRST! So, here's the URL...
http://www.geocities.com/~cmcofer/ben.html
Have a look... you'll like it!
Your pal,
Cliffie
........................................................
"I'm voting for the candidate who
backs the National Sales Tax!"
........................................................
OK, lemmee hear ya'...
Happy Birthday to me.
Happy Birthday to me.
Happy Birthday dear Cliffie.
Do you really like the NRST?
YUP!
One tiny correction in your fine post to max61. It is not wages that are sent to the SSA, but merely the REPORT of wages so that the SSA can do their "magic with numbers" as at present. They money for that comes from the sales tax revenue, not the payroll taxes, which are eliminated.
I think you knew that, but just got forgetful in the heat of battle. A fine post.
You might ask the poster the question none of the status quo toadies have been able to answer - "What's so fair about a tax on income?"
Little Willie is "The Worst President In American History".
I hope so, too, Cliff!! Welcome aboard to you and all your friends.
Little Willie is "The Worst President In American History".
Happy Birthday Cliff, and welcome.
You'd find it very interesting to see what the "Commie of the month" who was the main force in originating withholding had to say about taxes. The last part of the article about taxing businesses is especially enlightening.
Just go sit at the feet of Beardsley Ruml, a New-Deal Democrat through and through.
Thank you. I had forgot the Commie's name.What I love most about this site is the information exchange that occurs.It enables me to enter the arena of debate armed to the teeth.
My daughter's 7th grade Social Studies teacher refuses to debate me. Even though his under graduate degree is in U.S. History he knows I would whip his butt.My challenge was not accepted, but it did force him to tone down his pro-Clinton rhetoric.
Many thanks to all of you guys for being so patient with an old man. I printed the bill out and will take it to my tax guy next week.
I crunched the numbers on the Flat-Tax and it wasn't beneficial to me. I'm going to study up on this puppy and contact Jim Sensennbrenner (yeah, that's the one)and get him behind this. Thanks again. Regards,
I am all for a change in the tax laws and how we pay our taxes. But given the fact that there are billions of dollars worth of assets being hidden off-shore because of the present hidden tax rates. And corporations are devising new and clever tax dodges all the time to avoid paying more taxes. There are millions of tax payers not paying all they owe even now with the present system and rates. If this a natural tax shift and not a cut, and the deal is person to person. It won't take more than a week for the underworld to mobilize to supply the new 23% profit market. It would be handed to them by a retail sales tax of 23% and well be a whole new industry for them that would make prohibition look like a sunday school picnic. I can just imagine what it would be like to live where every product sold new had a potential profit of 23% to anyone wanting to take a chance, instead of just liguor and cigarettes. It would be a law enforcement nightmare. During prohibition, it is estimated that the consumption of alcohol was actually higher, per capita, than without it. Hundreds of trucks and rail cars are hi-jacked or broken into now to supply cigarretes and liquor tax free. Indian reservations are doing a thriving business selling cigarettes tax free and that's only one product. You're talking every product with this tax. The only way this retail tax can work is if it were under 10%. Then some of the incentive would be lost for Blackmarket transactions. I can just see the underworld bosses licking their chops waiting for this one. Something needs to be done about our income tax situation, no doubt. There is tax revolt evidence everywhere we look. But, I just think this National Retail Sales Tax is a disaster looking for a place to happen. I don't want something voted in that proves to be unworkable then have to be re-pealed. Because if that happens you'll never get another chance at some alternative measure short of a revolution.
Go here before you jump to conclusions. It seems you are concerned that folks will earn a greater profit under the nrst? And you're concerned about compliance? Look at the link under FAQ.
Regarding all the assests and cash located offshore...just why do you think the assets and cash are offshore? To avoid the steenkin' income tax! Repatriating these assets and dollars is just one more reason prices of capital will fall by 25% the instant an nrst is in place.
Bill Archer, CHM of House Ways & Means conducted a survey of major international companies...he asked, "if the US went to an nrst such as HB 2525, how would you react?". Astonishing results: 81% of the world's largest multi-nationals said they would build their next factory/plant in the US. THe other 19%?....well, they said they would relocate everything to the US.
Your concerns about compliance are real. You may find answers and information a the link provided. Go to FAQs. BTW there's a thread #2 alive now! THis one's too dang long!
Thank you all for the info.
You guys got Gramps on board? That man is a slim customer. Folks, if Gramps signs on, that means it is good for small businessmen, plain and simple. He is one straight shooter. I was waiting to see what would happen with him.
It is not wages that are sent to the SSA, but merely the REPORT of wages so that the SSA can do their "magic with numbers" as at present.
Of course! How silly of me. Thanks for keeping me honest...
If you're ever near Athens or Gainesville, I'll buy the first round!
Wow - pro Little Willie ... he's one sick dude. Makes me shudder to think the type of people teaching our kids and grandkids now.
Little Willie is "The Worst President In American History".
There are also a lot of other links with good information; here's just one example - here's another. Just ask.
Little Willie is "The Worst President In American History".
Nice links- you have a good library going.
bttt!
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