AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 17, 2011 14:26:19 GMT -5
This is a great video-- go ahead, just try selling the current tax code...
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 17, 2011 14:29:30 GMT -5
BTW-- The Fair Tax is up for a FULL HEARING in the House on July 26th.
“First they ignore you, then they laugh at you, then they fight you, then you win." - Mahatma Gandhi
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 17, 2011 14:33:43 GMT -5
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ugonow
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Post by ugonow on Jul 17, 2011 14:45:37 GMT -5
Shame he can't have subsidies and loopholes like others do. I think a fed sales tax on consumption will be hard to sell also.
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steff
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Post by steff on Jul 17, 2011 14:48:37 GMT -5
Goes to show he shoulda kept the ball and sold it.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 17, 2011 16:46:00 GMT -5
Shame he can't have subsidies and loopholes like others do. I think a fed sales tax on consumption will be hard to sell also. Did you even watch the video? I don't think keeping everything you earn, having necessities not merely excluded from taxation, but covered by a monthly "pre-bate", and having income, savings, and investments protected from taxation is not that hard a sell. It's only a matter of Americans embracing the idea of eliminating the IRS and keeping everything they earn. And of course- we'd have to overcome the demagoguery, the threats and intimidation of an entire class of people dependent on the ginormous tax code. So, people would have to understand the somewhat more difficult to explain features like "revenue nuetral"-- which is a complete joke, btw. It would EXPLODE revenue to the treasury. The United States would become the number one place to work and do business overnight. Unemployment would be at 4% within a year. Revenue to the treasury would EXPLODE, and provided spending could be controlled- we'd have a balanced budget in 2 years, and in 10 years, we'd owe 50% of what we owe today. We would enter a period of mind-boggling, explosive economic growth. And it would be global in scope.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 17, 2011 16:47:00 GMT -5
Goes to show he shoulda kept the ball and sold it. Goes to show you, he should support www.fairtax.org
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Post by robbase on Jul 17, 2011 18:03:28 GMT -5
thing is, no one has to sell you on the current tax code, we (including you) already brought it
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ungenteel
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Post by ungenteel on Jul 17, 2011 21:21:02 GMT -5
lots of folks wouldn't want to see the mortgage interest deduction go away
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djAdvocate
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Post by djAdvocate on Jul 17, 2011 23:14:56 GMT -5
BTW-- The Fair Tax is up for a FULL HEARING in the House on July 26th. “First they ignore you, then they laugh at you, then they fight you, then you win." - Mahatma Gandhi oh yeah. Gandhi would be a real fan of the GOP, i am sure.
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pappyjohn99
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Post by pappyjohn99 on Jul 17, 2011 23:39:49 GMT -5
Congress will never go for the fair tax. Tax breaks for their buddies is the way Washington repays favors. They will never give up that power.
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djAdvocate
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Post by djAdvocate on Jul 17, 2011 23:43:14 GMT -5
Congress will never go for the fair tax. Tax breaks for their buddies is the way Washington repays favors. They will never give up that power. not only that, but progressive income tax is based on the principle that disposable income is what should be taxed- that this concept is fair. but furthermore, i have never seen a flat tax that was remotely realistic. when i do, i will get enthusiastic.
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mwcpa
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Post by mwcpa on Jul 18, 2011 5:39:11 GMT -5
so, if the IRS will magically disappear, who will be the ones to police the fair tax?
who will administer the "pre-bates" and how will it be handled.... will it be based on the COL of an area...
as most states have sales taxes (another word for the fair tax.... as is VAT) on various items (not all states charge tax on the same things or the same rates) how much will it cost a small business to administer these new rules... states and local governments are not going to give up their business (or personal) income tax regime because the Congress gave it up at the federal level....
while I am all for "simpler" tax rules, maybe it would be "fairer" if Congress focused on eliminating or reducing the corporate welfare in the current system or the social engineering for individuals......
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 18, 2011 6:45:20 GMT -5
so, if the IRS will magically disappear, who will be the ones to police the fair tax? who will administer the "pre-bates" and how will it be handled.... will it be based on the COL of an area... as most states have sales taxes (another word for the fair tax.... as is VAT) on various items (not all states charge tax on the same things or the same rates) how much will it cost a small business to administer these new rules... states and local governments are not going to give up their business (or personal) income tax regime because the Congress gave it up at the federal level.... while I am all for "simpler" tax rules, maybe it would be "fairer" if Congress focused on eliminating or reducing the corporate welfare in the current system or the social engineering for individuals...... Read the Fair Tax book.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 18, 2011 6:48:49 GMT -5
Congress will never go for the fair tax. Tax breaks for their buddies is the way Washington repays favors. They will never give up that power. not only that, but progressive income tax is based on the principle that disposable income is what should be taxed- that this concept is fair. but furthermore, i have never seen a flat tax that was remotely realistic. when i do, i will get enthusiastic. The Fair Tax taxes disposable income above what is considered to be a subsistence level-- that is lower income families would continue to have an effective tax rate of zero. The fair tax isn't a flat tax, the fair tax isn't an income tax. Under the fair tax, taxation is shifted AWAY from the production of income, savings, and investment; and instead we are only taxed on what we consume. The economic benefits again, are way understated-- but as Ronald Reagan famously noted: the best welfare program on earth is a job.
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ugonow
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Post by ugonow on Jul 18, 2011 7:17:44 GMT -5
Wouldn't that make America's favorite pastime, tax avoidence, only tool then become to avoid patronizing business? I fear an underground economy would crop up as state,county,and local sales taxes continue to spiral.
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Post by privateinvestor on Jul 18, 2011 7:34:52 GMT -5
Congress has been talking about Tax Reform or Tax Systems Overhaul and the only one doing anything about this is Congressman Paul Ryan who includes tax system changes in his so called "Roadmap" .....however none of his colleagues want to take on tax changes right now so it sits in the back of the priority list in the House..I guess??
And as you can imagine the Liberals are opposed to these changes proposed by Ryan???
This plan discards a needlessly complex and manipulative tax code, replacing it with a simplified mechanism that promotes work, saving, and investment. •Provides individual income tax payers a choice of how to pay their taxes – through existing law, or through a highly simplified code that fits on a postcard with just two rates and virtually no special tax deductions, credits, or exclusions (except the health care tax credit). •Simplifies tax rates to 10 percent on income up to $100,000 for joint filers, and $50,000 for single filers; and 25 percent on taxable income above these amounts. Also includes a generous standard deduction and personal exemption (totaling $39,000 for a family of four). •Eliminates the alternative minimum tax [AMT]. •Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax. •Replaces the corporate income tax – currently the second highest in the industrialized world – with a border-adjustable business consumption tax of 8.5 percent. This new rate is roughly half that of the rest of the industrialized world.
TO LEARN MORE: CLICK HERE
Related Documents:
Articles - New York Times: State debt woes grow too big to camouflage
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ugonow
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Post by ugonow on Jul 18, 2011 7:41:26 GMT -5
Sounds somewhat like 1040 ez and 1040.•Provides individual income tax payers a choice of how to pay their taxes – through existing law, or through a highly simplified code that fits on a postcard with just two rates and virtually no special tax deductions, credits, or exclusions (except the health care tax credit). So the wealthy not drawing a check,but living well off investments and inherientences don't pay taxes?•Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax. The stated rate means nothing.•Replaces the corporate income tax – currently the second highest in the industrialized world – with a border-adjustable business consumption tax of 8.5 percent. This new rate is roughly half that of the rest of the industrialized world.
Sounds great...we all can live here free.A utopia.
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Bluerobin
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Post by Bluerobin on Jul 18, 2011 7:59:07 GMT -5
I am still a fan of the flat tax.
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henryclay
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Post by henryclay on Jul 18, 2011 10:02:50 GMT -5
Not sold on the fair tax? Sell me on the Current.The wealthiest few percent of taxpayers contribute the majority of taxes. The bottom forty percent pay no tax. The bottom 20 percent actually get a reverse tax so thet their salaries are not a picture of thei income because the current tax structure adds government money to what they make on the job. The only people who will benefit from a "fair' or "flat", or "VAT" tax will be the ones who pay the majority of taxes now. Those 12 dollar words that are used to describe proposed tax law changes, , , each and every one of them , , , shift the tax burdens from the wealthiest down and shift everybody else's up. And I came to that conclusion because I once thought the current system was too burdensome. I defy anyone to run some actual numbers, take into consideration the entire federal budget srtucture, and show how any of the "new" tax proposals will reduce taxes on anybody except the wealthiest current taxpayers. Here is a realistic analogy of just one single situation a "fair tax" would create. It is based on the last serious effort in Congress to change the tax code. It was based on a 23% "inclusive" tax rate that was actually a 30% tax rate. They just used fancy word games to try to sell it: TAXES, LOOPHOLES and SECOND HAND GASOLINE by anonymous.
Some have said we Americans are a capitalistic society, thriving on capital assets, fueled by consumption, which is produced by labor and oiled by liquid assets.
Take a look at one of them. A semi-trailer truck. Who owns it is not important. It is a capital asset. The owner bought it with liquid assets, and deducted the price of it from his tax returns through depreciation. In effect, when he bought the truck all the people who had been involved in building and getting it to him were paid. Since the truck is bought and used by the owner in a business, the business of hauling things, (a capitalist enterprise), and since his buying it removes the manufacturer and seller from the picture, he can "write it off" on his tax returns through loopholes that permit such write-offs.
While transporting consumable goods and other capital assets to other capitalists the owner of the semi has operating costs. The other capitalists, in turn, either make those goods available to their costomers or add them to their own assets in individual efforts to make other goods available to those customers in exchange for the customer’s liquid assets.
Similar to writing off the initial cost of the truck, the owner pays for his operating needs out of his pocket and then writes them off on his tax returns. The end result is, if his truck brings in enough for him to have anything left after he pays for his operations, he has a profit and he pays income tax on that profit.
I use a semi-trailer truck as an example. But a short glance around us, no matter where we are, we'll see the same picture, just with different players. What we see are capital assets; buildings, cars, boats, ships, trains, taxicabs, telephone lines, cellphone towers, (lots of cellphone towers), pumps, airplanes, machinery, (oodles of machinery), company uniforms with logos on them, carpenter tools, steel worker's safety straps, and the list is mind bogglingly endless, , , we see assets, all being used to produce what we can be proud of, and call, a robust economy. In fact, even with all of its ups and downs it is still about the most robust economy in the world.
And every bit of it is paid for through depreciation or other write-offs on tax returns. Which means of course, to the tax professional at least, that the owners didn't have to pay anything for any of it. In fact, all those assets were obtained at absolutely no cost, as in zero dollars, because of one little bitty word. That word is dpreciation, which to many people is an undeserved loophole.
Not withstanding the loophole, it works pretty well, wouldn't you say? I mean we can walk into any little old out of the way place, or the busiest hallway in the biggest building in town, and find a fresh, clean supply of life's most important requirement, drinking water. All paid for through tax write-offs, loopholes, on somebody's tax return.
Now comes along an end to tax write-offs and loopholes.. No more semi-trailer trucks being depreciated on tax returns. In fact, by golly, let’s do away with tax returns, too. If somebody wants a stinking semi-trailer truck, let him, (or her), pay for it. Like they do in Mexico. You DO know about Mexican trucks don't you? (Thanks to NAFTA they’re all over American highways lately.) Same-same all the taxicabs, busses, cars, (whoops, mine too?), boats and airplanes they can turn out. No more free stuff. Nada. Zip. We have something better. It's called a "Fair Tax".
Under Fair Tax we won’t have to worry about tax write-offs because there won’t be any. There won’t even be any tax returns to write things off on. Instead we will just pay a 23% tax in the price of everything we buy that is new, and be done with taxes entirely. Old secondhand or used items won’t be taxed. So the semi-trailer truck owner will not only get no depreciation on his new asset, he will also be taxed on it at 30% of the purchase price. ..Oh, did somebody say "No! No!, No!", it's not 30%, Why can’t I convince you, it’s only 23%?
Let's look at that 23% a minute. Under the 23% Fair Tax a new $100,000 semi, plus 8% state sales tax, (which won’t be removed but may get increased), now costs $108,000, will then cost $140,400, of which 23%, or $32,400, is the new "Fair" tax. All well and good. Except the $108,000 truck will now have $32,400 tax included in the $140,400 price and that $32,400 is 30% of $108,000. ...ahem! Please explain that 23% tax to me again.
Then, in order for the owner to use the truck, the new rules will also include the same Fair Tax add-on to the price of gasoline, (and everything else the owner buys new). So, where gasoline now costs $3.00 a gallon, it will then cost $3.90 a gallon. As with the purchase price of the truck, no current taxes will be removed, but under Fair Tax that extra 90 cents is only a 23% tax" because 23% of that $3.90 gallon of gasoline puts the price back at $3.00. Never mind that 90 cents is 30% of the price of $3.00 gasoline. (Get it?) And while under the old rules the gasoline was deductible, through a loophole as an operating cost, under the new rules it is not. The truck owner either makes up the extra cost by raising his fees, or he can park the truck. . . Some choice.
And if he does succeed as a truck operator, but has to buy his trucks on a payment plan, he can expect to pay the (ahem), 23% tax on the interest on each payment, too. And if he has to have it worked on, or washed, he can just pay the 23% (), tax on those things too.
But wait. Did somebody say, "Wait a minute, the tax won't apply to the purchase of USED items. Not only used trucks, but used "anything and everything" will be exempt from the new "Fair" tax. If he buys a used truck none of it's cost will be taxed?" That's right, by golly. So, he'll be smart and buy a used truck next time. (Those people who build new trucks can go jump in the lake!)
So, what about that? How long will it be before there won't be any NEW trucks to buy. Or NEW anything else, like new HDTV’s, or other new inventions. What happens to Research and Development? Well, it can go right down the tubes just like everything else that is new.. Why would anything new get invented if everybody was buying up all the used stuff, because who wants to pay the tax on new stuff when they can make do on old stuff? So there goes the market for all the new things. Things like kid’s shoes and school books. (We’ll just recycle the old ones.) And what about new jobs, where people nake new things? Will there be any need for new things to be made at all?
And so it goes, with trucks, taxicabs, airplanes, boats, ships, , , and cellphone towers, , , until the undertaker that hauls you to the cemetery includes the same, (ahem), 23% tax, (??), onto his charge for burying you, too.
But, of course the survivors could order you a used coffin, and put you in a used hole. But, then, who wants to be put in a second hand hole just so their heirs can skimp on taxes?
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djAdvocate
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Post by djAdvocate on Jul 18, 2011 10:18:07 GMT -5
not only that, but progressive income tax is based on the principle that disposable income is what should be taxed- that this concept is fair. but furthermore, i have never seen a flat tax that was remotely realistic. when i do, i will get enthusiastic. The Fair Tax taxes disposable income above what is considered to be a subsistence level-- that is lower income families would continue to have an effective tax rate of zero. The fair tax isn't a flat tax, the fair tax isn't an income tax. Under the fair tax, taxation is shifted AWAY from the production of income, savings, and investment; and instead we are only taxed on what we consume. The economic benefits again, are way understated-- but as Ronald Reagan famously noted: the best welfare program on earth is a job. then please send me your social security checks, when you get there.
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mwcpa
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Post by mwcpa on Jul 18, 2011 11:27:45 GMT -5
the biggest issue for me, besides the increased compliance factor for small businesses who will still need to comply with State levels of income tax that won't go away and this new national sales tax is that proponents assume prices will go down....
There was big hoopla a few months back because GE paid no corporate income taxes..... did the price of a GE refrigerator decrease as a result of that..... nope..... GE just got to enjoy higher after tax profits.... so the supposed cost of tax passed on to the consumer from the manufacturing process will not just go away as suggested, real prices will just get higher (in my opinion)....
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txbo
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Post by txbo on Jul 18, 2011 12:00:48 GMT -5
This video is such a one-sided piece of crap, as a business owner please tells me how I’m going to pay the tax on my equipment and the maintenance without offsetting factors. Tell me how the consumer will benefit because I must increase the prices an everything that I produce and that you purchase. Also, tell me how can I afford to hire anyone with such tax burdens placed on my business.
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djAdvocate
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Post by djAdvocate on Jul 18, 2011 12:06:45 GMT -5
This video is such a one-sided piece of crap, as a business owner please tells me how I’m going to pay the tax on my equipment and the maintenance without offsetting factors. Tell me how the consumer will benefit because I must increase the prices an everything that I produce and that you purchase. Also, tell me how can I afford to hire anyone with such tax burdens placed on my business. here is the part i don't get. after WW2, they were worried that all of the increased capacity for war would go fallow without a new breed of consumer that would consume far more than he or she actually needed. and we have gone out of our way to make sure that the consumer's desires in the US are stimulated by making products which help them express their "individuality". and it worked. we consume far more than we need in this nation, and the trend is further in that direction. and this has fueled the growth of the greatest economy on Earth. how does a consumption tax continue to stimulate demand? or have we given up on this idea, and are we going to return to our rural roots? maybe grow a little tomato garden? i don't get it. Edit: it actually says what happens in the video, toward the end. it doesn't stimulate demand (3:24). it encourages savings, which draws money out of the economy. what a profoundly stupid idea, unless you want a 30 year recession, like Japan.
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fairlycrazy23
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Post by fairlycrazy23 on Jul 18, 2011 12:27:39 GMT -5
This video is such a one-sided piece of crap, as a business owner please tells me how I’m going to pay the tax on my equipment and the maintenance without offsetting factors. Tell me how the consumer will benefit because I must increase the prices an everything that I produce and that you purchase. Also, tell me how can I afford to hire anyone with such tax burdens placed on my business. If you think the Fairtax is more of a burden on you doing business than the current system, they you haven't read up on the Fairtax.
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djAdvocate
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Post by djAdvocate on Jul 18, 2011 13:18:10 GMT -5
This video is such a one-sided piece of crap, as a business owner please tells me how I’m going to pay the tax on my equipment and the maintenance without offsetting factors. Tell me how the consumer will benefit because I must increase the prices an everything that I produce and that you purchase. Also, tell me how can I afford to hire anyone with such tax burdens placed on my business. If you think the Fairtax is more of a burden on you doing business than the current system, they you haven't read up on the Fairtax. i don't think he meant "paperwork". i think he meant "fiscal". would it not be the case that i would have to pay a consumption tax for purchasing materials for manufacture, fc, or would they be exempt?
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mwcpa
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Post by mwcpa on Jul 18, 2011 13:22:44 GMT -5
the whole premise of the Fair Tax is that milk that costs 1.00 today will cost the same dollar tomorrow.
They "assume" that the dairy, the farmer, etc., etc will reduce the price they charge the retailer since all of the taxes built into the system will evaporate.
So, for their premise to work, which I believe will fail or will not provide the great benefits it assumes is that prices to the consumer will not rise on a net basis..... other than market conditions, the net price paid at the register will be the same.....
So, if the retail price today of the truck noted in an example above is 100,000, the amount the manufacture spent for taxes will automatically be discounted from the price so the new price will drop to say 80,000 (their premise is that giants like GM, Ford, etc are going to pass all of their federal income and payroll tax savings right on to you the consumer)... then with the new fair tax you will pay rough the same 100,000 when you buy it.... I find it hard to believe that big corporate America will pass on the tax savings to consumer.... it will be a windfall for big corporate America....
while our current system is filled with flaws and to much welfare a national sales tax is not the solution.....
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henryclay
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Post by henryclay on Jul 18, 2011 13:24:23 GMT -5
If I plead guilty to not spending as much time on Fairtax as some think I should, perhaps someone who has done so will help us out here. Let's start off with answering the question, "What will the Fairtax apply to, and who will be exempt from the Fairtax?
Simply put, the proof of the pudding is in the recipe and that means the proof is in the details. So, what are some of the details? What will be taxed? Will Social Security be taxed? Will disability pay be taxed? Will the material and labor to reconfigure an assembly line be taxed? Will the interest on my municipal bonds be taxed? (they aren't now) Will businesses be able to deduct the cost of labor? Will my medical insurance reimbursement checks for my medicine and doctor bills be taxed? If I borrow money will I have to pay tax on it? Will I have to pay tax on the payments I make to pay the loan off? (Under the last proposal I would.)
So, what is in the details? Let's start by identifying what will be taxed.
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djAdvocate
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Post by djAdvocate on Jul 18, 2011 13:29:14 GMT -5
the whole premise of the Fair Tax is that milk that costs 1.00 today will cost the same dollar tomorrow. They "assume" that the dairy, the farmer, etc., etc will reduce the price they charge the retailer since all of the taxes built into the system will evaporate. So, for their premise to work, which I believe will fail or will not provide the great benefits it assumes is that prices to the consumer will not rise on a net basis..... other than market conditions, the net price paid at the register will be the same..... So, if the retail price today of the truck noted in an example above is 100,000, the amount the manufacture spent for taxes will automatically be discounted from the price so the new price will drop to say 80,000 (their premise is that giants like GM, Ford, etc are going to pass all of their federal income and payroll tax savings right on to you the consumer)... forgive me if i am mistaking you for a CPA, based on your screen name, but..... does this make any sense to you? if there is a consumption tax, it will become part of COGS, which means that it will migrate to the top line (in order to maintain Gross Margins) and people will pay for it in higher prices. that is NOT the case with corporate income tax, which is done after all other expenses have been made, and is a NET (aka "bottom line") item. furthermore, since the tax is at a fixed rate, it scales with income. if your gross income is +35%, your net will be, as well. so it has no impact on the YOY numbers, either. furthermore, a flat tax would penalize underperforming and struggling companies, because they would still have to pay the tax- wheras in the current system, they would not. this would favor larger, healthier businesses, which create far fewer jobs. if you are a CPA, please tell me what, if anything i just got wrong.
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djAdvocate
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Post by djAdvocate on Jul 18, 2011 13:31:44 GMT -5
If I plead guilty to not spending as much time on Fairtax as some think I should, perhaps someone who has done so will help us out here. Let's start off with answering the question, "What will the Fairtax apply to, and who will be exempt from the Fairtax? Simply put, the proof of the pudding is in the recipe and that means the proof is in the details. So, what are some of the details? What will be taxed? Will Social Security be taxed? . better yet- will social security EVEN EXIST?
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