Posted on 08/27/2014 6:19:26 AM PDT by Kaslin
I repeat: the rebate mechanism is not a show-stopper. Far less complex than procedures already in place for other federal payments, as noted.
You can’t have it both ways. Replacing the income tax with a VAT is a disaster waiting to happen. Replacing the income tax with an income tax is a zero sum game.
As to your other comments, you are conflating your general distrust with government (which I share) to the problems the income tax and the IRS create for American businesses and residents.
I am about replacing the income tax with the FAirTax and abolishing the IRS.
The other stuff comes after we get this done.
You just don’t understand VAT.
Read this: http://www.heritage.org/research/reports/2005/05/beware-the-value-added-tax and then let’s talk.
I lived with a VAT in Germany for a total of 7 years. I’m not saying I understand their system perfectly, but I do understand taxing a product at each level of transmission. In fact, we could file paperwork as Americans to receive something like 16% VAT taxes returned on items purchased on the local economy. When you went to the register, you didn’t have the sales tax ring up at 16%.
You did not have to pay the VAT because you were not a German citizen. German citizens pay both an income tax AND the VAT.
You really, really don’t want the German tax system in America!
“Income tax is imposed at progressive rates using complex tables. The lowest rate in 2014 is 14%. It goes up to 42% for income up to EUR 250’730.”
Source: http://www.capitaltaxconsulting.com/international-tax/germany/german-income-tax/
“German VAT is called Mehrwertsteuer (MwSt). It is also sometimes known as Umsatzsteuer (UST, or UmSt). The standard rate of German VAT is 19%, but a reduced rate of 7% may apply to some supplies.”
Source: http://www.brighton-accountants.com/blog/vat-uk-germany/
FairTax is imposed on ALL retail purchases of goods and services. There are no exemptions or exceptions; everyone pays (i.e., if a new item is purchased in the USA, the buyer, irespective of citizenship, will pay the FairTax), and at the same rate.
That is why we call it the FairTax.
Isn’t the current proposed tax rate for the fair tax about 20%?
FairTax legislation proposes a 23% rate.
HST, keep in mind that by removing the tax cost of government FRom goods and services, over time, the retail price of goods and services will decline by roughly 20%.
The after tax cost of new goods and services under the FairTax will be roughly the same as it is under the income tax. If your after-tax market basket of goods costs you $100.00 today, under the FairTax, that same market basket of goods will cost roughly $100.00, tax inclusive.
But, each consumer will have FReedom of choice in respect of how much tax they will pay, and when.
I don’t see what difference it makes if you get that 23% through 4 stages of production each time someone sells to someone else. JMHO.
There is no law that says you MUST have an income tax if you have a VAT. That is no more true than saying you MUST have an income tax if you also have a sales tax.
The income tax is what I want to get rid of. And property taxes. I hate those, too. Something should be taxed once, and then it should belong to you. Period.
You have not read the legislation, have you? Under the FairTax, business to business sales are not taxed! VAT taxes EVERY sales transaction! Can you imagine the paperwork nightmare?
The 23% FairTax is levied on NEW products ONLY at the point of the final retail sale.
EVERY country that has a VAT also has an income tax. It is the nature of ALL governments to tax and tax and tax and spend and spend and spend.
I agree with you re: property taxes. If I were king for a day, all we would have is a retail sales tax at the local, county, state and federal level AND NO OTHER TAXES!
But then, reason, logic and common sense are not virtues of government at ANY level.
And, it is for damn sure that no government at ANY level will promote policies designed to maximize citizen FReedom and minimize government!
If I hadn't read this before, I wouldn't know that the fair tax intends to tax only at the point of final retail sale.
That is what I'm suggesting be changed. Have it be taxed at ANY sale along the process of bringing it to the final customer.
It is very possible to have both a sales tax and an income tax. One of the problems with the fair tax is the willingness of so many to implement a national sales tax 'before' they eventually repeal the income tax. (A bit of a misdirection because the original constitution did allow for an income tax. It just had to be proportioned to the states on a per capita basis.)
Our conversation on this matter is over.
????
My point is that there is nothing to be gained by our continuing this conversation.
You are determined to keep advocating against the FairTax and for the VAT, and you have not done your homework.
You have not read the FairTax legislation.
Did you read Dr. Mitchell’s piece about the VAT I referenced?
Despite my best efforts, I have not been able to convince you of the errors in your thinking, and no longer wish to spend time “dialoging” with you.
It is that simple.
The Fair Tax is a sales tax only approach. No income tax. Only a sales tax.
A VAT is a sales tax.
So, I’m a supporter of the Fair Tax, a sales tax only approach. All I’m suggesting is the type of sales tax used be reviewed. There are advantages (and disadvantages) to a VAT sales tax instead of the end-point-of-sale sales tax.
That’s all I’ve said, and it’s never been against the Fair Tax.
IMHO, if you advocate for a VAT, you are opposed to the FairTax.
IMHO, there are NO advantages to a VAT.
Upthread, I asked you to read read Dr. Dan Mitchell’s paper entitled “Beware the Value Added Tax.” Obviously, you did not.
How can we have an intelligent two-way conversation about a subject you appear to be woefully ignorant about?
And then do not read a scholarly article which will provide you with expert information about the subject?
Go read the article, and then get back to me: http://www.heritage.org/research/reports/2005/05/beware-the-value-added-tax
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