The Conservative Cave
Current Events => Archives => Politics => Election 2012 => Topic started by: Rebel on October 12, 2011, 12:48:46 PM
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https://www.hermancain.com/999plan
It's a transition to someplace I've wanted to be for years, THE FAIR TAX. :rocker2:
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https://www.hermancain.com/999plan
It's a transition to someplace I've wanted to be for years, THE FAIR TAX. :rocker2:
Me Too. I am glad you introduced me to Mr. Cain. Hi5!
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https://www.hermancain.com/999plan
It's a transition to someplace I've wanted to be for years, THE FAIR TAX. :rocker2:
What happens when President Cain, after 8 years in office, goes into a well-deserved retirement and Congress takes the 9% National Sales Tax and doubles it?
Don't say it can't happen. Congress is capable of all kinds of evil. Look at what happened to Europe. VAT taxes are double what they started out to be. All it takes is a socialist government (much like we've got now).
I'm all for revamping throwing out our tax code. But I'm not convinced that enacting a national sales tax is in our best interests.
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What happens when President Cain, after 8 years in office, goes into a well-deserved retirement and Congress takes the 9% National Sales Tax and doubles it?
Since it's across the board, it'll affect EVERYBODY. How likely is that to happen? Hell, they can't even get a 1% sales tax increase in my own town. It's why we have SPLOST, which has a beginning and end time.
Remove the class warfare, and all the sudden its not so easy to increase taxes. With all these different brackets, well, no one gives a shit if the other guy's taxes get increased.
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"2/3 senate vote to increase rates" amendment first
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"2/3 senate vote to increase rates" amendment first
Forgot about that. Thanks. :cheersmate:
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"2/3 senate vote to increase rates" amendment first
Invalidate the 16th Amendment first. I don't mind giving Washington a sales tax, so long as they don't ALSO have their left hand in my other pocket taxing income simultaneously. One or the other; we've seen too much of the kind of damage these retards inside the Beltway could do with BOTH.
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Invalidate the 16th Amendment first. I don't mind giving Washington a sales tax, so long as they don't ALSO have their left hand in my other pocket taxing income simultaneously. One or the other; we've seen too much of the kind of damage these retards inside the Beltway could do with BOTH.
If it's written like the Fair Tax, it will be before implementation. The Fair Tax, HR-45, is written to state that, even if passed, it will not come into effect until one business day after the 16th Amendment is repealed. Herman is very close to Boortz; I'm pretty sure that came up in the discussions.
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Invalidate the 16th Amendment first. I don't mind giving Washington a sales tax, so long as they don't ALSO have their left hand in my other pocket taxing income simultaneously. One or the other; we've seen too much of the kind of damage these retards inside the Beltway could do with BOTH.
Absolutely, that has to happen. I like the 9/9/9 plan but only as a precursor to the Fair Tax.
KC
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Since it's across the board, it'll affect EVERYBODY. How likely is that to happen? Hell, they can't even get a 1% sales tax increase in my own town. It's why we have SPLOST, which has a beginning and end time.
Remove the class warfare, and all the sudden its not so easy to increase taxes. With all these different brackets, well, no one gives a shit if the other guy's taxes get increased.
As I said, I'm all for throwing out the current tax code - and if that means tossing the 16th Amendment first, hey all the better.
I simply don't trust Congress to do the right thing consistently, if ever. Couching 999 (or at least any kind of national sales tax) in the form of an Amendment to the Constitution as opposed to mere legislation gives at least the semblance of consistency.
I didn't mention it in my first response, but all of this doesn't take into account city and state income taxes and local sales taxes. Gotta take a long, hard look at that shit before I'm comfortable with any kind of national sales tax.
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I didn't mention it in my first response, but all of this doesn't take into account city and state income taxes and local sales taxes. Gotta take a long, hard look at that shit before I'm comfortable with any kind of national sales tax.
It doesn't take those taxes into account because they're irrelevant to the topic of federal taxation. What it does take into account are a 35% corporate tax, 22% embedded tax consumers pay that are passed on by businesses on every good purchased, payroll taxes, income taxes, estate taxes, and capital gains taxes. If you pay 25% in federal income tax every year, you also pay an additional 22% on every new good you purchase. That's before you even reach the state and local level. This is a simple 9% income tax (ALL workers currently pay 7.6% of a 15.2% payroll tax, the employer generally picks up the other 7.6% JUST FOR SS, Medicare, etc.), a 9% sales tax on new goods (you currently pay 22% embedded tax on every good you purchase), and a 9% corporate tax (Currently it's at 35%, making it the highest in the industrialized world and killing jobs, including our lost manufacturing base).
This is not only a tax restructuring, it's a jobs plan. The numbers work. People that say they don't add up have no clue as to what they pay in embedded taxes on good, because it's built into the cost of the product. That 22% would come out and essentially drop to 9%. Don't think companies will do it, and opt for pocketing that additional income? Well, it would suck for them because their competitors damn sure will to gain marketshare.
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one thing i havent heard yet about 999
is the standard deduction system still in place for the income part? do the 47% still get off??
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one thing i havent heard yet about 999
is the standard deduction system still in place for the income part? do the 47% still get off??
No.
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It doesn't take those taxes into account because they're irrelevant to the topic of federal taxation. What it does take into account are a 35% corporate tax, 22% embedded tax consumers pay that are passed on by businesses on every good purchased, payroll taxes, income taxes, estate taxes, and capital gains taxes. If you pay 25% in federal income tax every year, you also pay an additional 22% on every new good you purchase. That's before you even reach the state and local level. This is a simple 9% income tax (ALL workers currently pay 7.6% of a 15.2% payroll tax, the employer generally picks up the other 7.6% JUST FOR SS, Medicare, etc.), a 9% sales tax on new goods (you currently pay 22% embedded tax on every good you purchase), and a 9% corporate tax (Currently it's at 35%, making it the highest in the industrialized world and killing jobs, including our lost manufacturing base).
This is not only a tax restructuring, it's a jobs plan. The numbers work. People that say they don't add up have no clue as to what they pay in embedded taxes on good, because it's built into the cost of the product. That 22% would come out and essentially drop to 9%. Don't think companies will do it, and opt for pocketing that additional income? Well, it would suck for them because their competitors damn sure will to gain marketshare.
I'm familiar enough with 999, Reb, to know all of this, though not to the actual percentages (good job in bringing that up, btw). While you're technically correct in saying that state/local/city income and sales taxes are irrelevant to 999, they are NOT irrelevant to the subject of taxes at hand. No doubt you know that in most larger cities, the city income tax takes an already large bite out of someone's paycheck that's already getting raped by the feds and the state and while some states, like Tennessee, don't have a state income tax, the state and local sales tax gets real close to 10% -- and the bastards tax EVERYTHING, including food and medications.
Whatever comes out of 999 does NOT speak toward the levying of taxes by state and local pols. THAT's my point. And this is the stuff that needs to be ironed out in lurid detail before I sign onto to any kind of national sales tax. Just call me skeptical when it comes to the ****ing politicians getting slaphappy with our money.
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very well then
change the name to the 1-29-2013 plan
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No.
No mortgage deduction either.
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No mortgage deduction either.
with no deductions at all
it will mean a loss of 30,000 jobs....
from the IRS! :newyear:
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No mortgage deduction either.
That deduction is nothing more than a false bonus at the end of the year anyway, money you've already paid through taxation, letting the government draw interest on your money. I'd rather keep my money every paycheck and collect my own interest.
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That deduction is nothing more than a false bonus at the end of the year anyway, money you've already paid through taxation, letting the government draw interest on your money. I'd rather keep my money every paycheck and collect my own interest.
True, but the fallout to that is less incentive to buy a home.
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True, but the fallout to that is less incentive to buy a home.
I don't know if I'm just the odd one on this issue, but when I purchased my homes the mortgage deduction played no part of my decision.
I've spoken to multiple home owners over the years and only a very few stated that the deduction was a big issue in their purchasing decision.
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I don't know if I'm just the odd one on this issue, but when I purchased my homes the mortgage deduction played no part of my decision.
I've spoken to multiple home owners over the years and only a very few stated that the deduction was a big issue in their purchasing decision.
Well, I bought my first home at the tender age of 42. And yes, I agree that the mortgage deduction shouldn't really play a part in the actual purchase of a particular home, but in comparison to renting and having to pay taxes on your rent money, owning a home and being able to deduct the mortgage interest is attractive.
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Well, I bought my first home at the tender age of 42. And yes, I agree that the mortgage deduction shouldn't really play a part in the actual purchase of a particular home, but in comparison to renting and having to pay taxes on your rent money, owning a home and being able to deduct the mortgage interest is attractive.
Apparently, we need more renters than homeowners. The idea that everyone deserved to own their own home didn't work out too well for us last time.
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Apparently, we need more renters than homeowners. The idea that everyone deserved to own their own home didn't work out too well for us last time.
Ah-yup. Can't argue with you there. But we ain't talking about offering $300,000 mortgages to someone who makes $10 an hour -- if he's employed at all. Short story time.
Mrs. E worked with a guy once who was (like her) probationary -- meaning that he was making $1,500 per month which had to be paid back after the first year of employment -- if he survived. It was a strictly commission kind of arrangement in recruiting.
Anyway, the guy didn't even have enough money to afford a car. He had to get a ride to work, which was sometimes iffy.
Yet the sumbitch managed to qualify for a $300,000 mortgage.
THAT kind of shit is beyond the pale. But for somebody whose income is sufficient to qualify for a reasonable loan within their means, hey, that shouldn't be beyond that person's reach.
(The guy bailed after about 4 months. I think he bought, and promptly lost, that house.)
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I'm familiar enough with 999, Reb, to know all of this, though not to the actual percentages (good job in bringing that up, btw). While you're technically correct in saying that state/local/city income and sales taxes are irrelevant to 999, they are NOT irrelevant to the subject of taxes at hand. No doubt you know that in most larger cities, the city income tax takes an already large bite out of someone's paycheck that's already getting raped by the feds and the state and while some states, like Tennessee, don't have a state income tax, the state and local sales tax gets real close to 10% -- and the bastards tax EVERYTHING, including food and medications.
Whatever comes out of 999 does NOT speak toward the levying of taxes by state and local pols. THAT's my point. And this is the stuff that needs to be ironed out in lurid detail before I sign onto to any kind of national sales tax. Just call me skeptical when it comes to the ****ing politicians getting slaphappy with our money.
Euph, why should a federal tax plan have anything to do with state and local taxes? The 9/9/9 plan and the Fair Tax are both nothing more than a simpler more transparent way of paying your federal tax burden.
Neither of these plans are promising to actually lower the taxes you pay (well at least the Fair Tax isn't and I don't think the 9/9/9 is either) they are just a different way of collecting those taxes.
You will have to deal with your state and local governments to do anything about those taxes and that is the way it should be.
KC
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Euph, why should a federal tax plan have anything to do with state and local taxes? The 9/9/9 plan and the Fair Tax are both nothing more than a simpler more transparent way of paying your federal tax burden.
Neither of these plans are promising to actually lower the taxes you pay (well at least the Fair Tax isn't and I don't think the 9/9/9 is either) they are just a different way of collecting those taxes.
You will have to deal with your state and local governments to do anything about those taxes and that is the way it should be.
KC
I think it's fair to look at the overall tax burden -- irrespective of where the taxes come from and who assesses them. That's not unrealistic and I think it's relevant to the issue. As to actually reducing taxes, isn't that our end goal? Apart from reshuffling the deck and dealing out the same old cards, I'd like to see actual reduction as a result of 999. Otherwise, what's the point? Either way we go, the government still spends money like drunken sailors and we're footing the bill.
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At least the 9-9-9 plan makes sure that everyone has some skin in the game.
We 53% are getting tired of carrying the load of the other 47%.
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At least the 9-9-9 plan makes sure that everyone has some skin in the game.
We 53% are getting tired of carrying the load of the other 47%.
Yep, I'll go for that. Except I don't trust the bastards -- there'll be weasel wording along the way and some rat**** shitstain liberal out there will whine about having to pay taxes, and the assholes will be writing in exemptions and deductions and there again, we're off to the same ol' game.
I dunno. I think I'm going to have to study this in more detail, and there's no doubt the system is brokedick and needs to be thrown out, but I see a need to rein in government spending AND cut taxes AND making sure that the shitstain 47% are carrying their load.
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I think it's fair to look at the overall tax burden -- irrespective of where the taxes come from and who assesses them. That's not unrealistic and I think it's relevant to the issue. As to actually reducing taxes, isn't that our end goal? Apart from reshuffling the deck and dealing out the same old cards, I'd like to see actual reduction as a result of 999. Otherwise, what's the point? Either way we go, the government still spends money like drunken sailors and we're footing the bill.
I'd like to see some serious attempts at spending cuts by the Fed Gov't. not the lame ass mouth service we've been seeing.
I understand your point on looking at the over all tax situation as a whole, but the fed has no control over state and local taxes, nor should they.
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Yep, I'll go for that. Except I don't trust the bastards -- there'll be weasel wording along the way and some rat**** shitstain liberal out there will whine about having to pay taxes, and the assholes will be writing in exemptions and deductions and there again, we're off to the same ol' game.
I dunno. I think I'm going to have to study this in more detail, and there's no doubt the system is brokedick and needs to be thrown out, but I see a need to rein in government spending AND cut taxes AND making sure that the shitstain 47% are carrying their load.
I don't trust the bastards either, but we have to start somewhere. The status quo simply won't work much longer.
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From HotAir.com:
Herman Cain got what he wanted from this week’s debate — he drew attention to his 9-9-9 plan for tax reform, and he proved that he could handle attacks from the field and maintain his aggressiveness. But now that Cain has drawn attention to the plan he says will jump start the economy, he will find more questions and challenges as well as supporters. In the latter camp, Art Laffer has given his supply-side stamp of approval:
Famed supply-side economist Art Laffer told HUMAN EVENTS that Cain’s “9-9-9″ plan was a pro-growth plan that would create the proper conditions for America’s economy to grow and thrive again.
“Herman Cain’s 9-9-9 plan would be a vast improvement over the current tax system and a boon to the U.S. economy,†Laffer told HUMAN EVENTS in a statement. “The goal of supply-side tax reform is always a broadening of the tax base and lowering of marginal tax rates.â€
Added Laffer: “Mr. Cain’s plan is simple, transparent, neutral with respect to capital and labor, and savings and consumption, and also greatly decreases the hidden costs of tax compliance. There is no doubt that economic growth would surge upon implementation of 9-9-9.â€
Laffer also said that “such a system provides the least avenues to avoid paying taxes, yet also maintains the strongest incentives for work effort, production, and investment.â€
On the other hand, ABC News walked through the implications for a household of four earning the average national wage of “just under $50,000,†and finds that these middle-class voters will get squeezed, and squeezed hard. That’s largely due to the third “nine,†the new federal sales tax that Cain’s proposal would create in tandem with flat taxes on personal and corporate income (also see update below):
If you have a family of four with an income of just under $50,000, they would pay more under the Cain plan. Currently, they are taxed at just less than 7 percent and pay $3,400 in income tax. Under Cain’s plan, they would be taxed at 9 percent or pay $4,500.
That’s $1,100 more.
Although the family would save almost $4,000 in Social Security taxes, it would have to give up the child tax credit of $4,000. Furthermore, it would pay an additional national sales tax of 9 percent on everything purchased, including groceries and clothes, which totals about $2,000.
That means under the Cain plan that family would be almost doubling its taxes, going from $3,400 to $6,500.
Most of the damage in this case comes not from the flattening of the tax code and the elimination of deductions — which would be almost entirely offset by the elimination of other tax streams, as Cain promises — but from the national sales tax. In my column for The Fiscal Times today, I question whether conservatives want to champion a new tax that almost by definition will have a regressive impact on voters — and could open a constitutional Pandora’s Box that will undermine arguments against creeping federal encroachment. But first, let’s be clear as to what exactly 9-9-9 is — and isn’t:
End quote
The rest of the article talks toward the differences between Romney's plan (which is much more comprehensive) versus Cain's 999 (which is touted as tax reform rather than an overall budget plan).
And then there's the constitutional issue to contend with. It's a long article, but well worth the read.
HotAir (http://hotair.com/archives/2011/10/13/should-conservatives-back-the-9-9-9-plan/)
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Well, since the Fair Tax is actually a 30% sales tax, I can't support it, and the people promoting it should be ashamed of themselves for being dishonest.
For the same reason as others have mentioned, I'm not in favor of the 9-9-9 plan because it adds a third leg to the taxing ability of Washington. Anyone who thinks it would stay at 9-9-9 is kidding themselves. The very last thing Washington needs is one more lever to pull and knob to turn in their taxing authority.
I do like Herman Cain, though, and I'm impressed that he, unlike any of the other candidates, actually has floated a plan.
Also, a national sales tax will inevitably require additional IRS staff. Sales taxes aren't really that simple outside of buying things at the grocery store or the mall. So, manyof the positions that could be eliminated in the income tax department will have to be refilled in a sales tax division. Contractors and retailers often get state audits of sales tax and determining first use, second use, etc., is always an issue. The sales tax would have to be carefully drafted and won't be nearly as transparent and simple as people make it out to be.
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Well, since the Fair Tax is actually a 30% sales tax, I can't support it, and the people promoting it should be ashamed of themselves for being dishonest.
For the same reason as others have mentioned, I'm not in favor of the 9-9-9 plan because it adds a third leg to the taxing ability of Washington. Anyone who thinks it would stay at 9-9-9 is kidding themselves. The very last thing Washington needs is one more lever to pull and knob to turn in their taxing authority.
I do like Herman Cain, though, and I'm impressed that he, unlike any of the other candidates, actually has floated a plan.
The HotAir article I quoted just above your post talks about Cain's tax reform 999 (he calls it Phase 1, which goes out to the "final" phase when the Fair Tax kicks in -- so that right there tells you where Cain is headed with a national sales tax).
Romney's own "comprehensive" budget plan at some 160 pages is beefier, but I've not read any part of it. The HotAir article summarizes it as a budget reduction plan, deficit reduction, and energy and trade policy.
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Well, since the Fair Tax is actually a 30% sales tax, I can't support it, and the people promoting it should be ashamed of themselves for being dishonest.
That's because it's NOT a 30% sales tax. This is a tax that replaces all federal taxes. It's at 23% and would be by law. I don't give a damn what your state sales tax is; take it up with them. This is a replacement for payroll, income, corporate, capital gains, and estate taxes. There is also a 22% embedded corporate tax on every good you purchase, which will be removed. People will wind up paying between 1-2% over what they're paying now for goods while keeping their entire paycheck, minus what your state takes. Don't conflate state and federal and don't tell me I should be ashamed because you're too ignorant to do your own ****in' research on the matter. Have you read the book? Either of'em? How about the condensed version, "Answering the critics"? That seems to be right up your ally.
The bill is also authored to where it won't take effect until 1 day after the 16th Amendment is repealed. It also comes with a prebate up to the poverty level, about 150 per month per person.
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As for the 9-9-9 plan, here's a post from someone I know elsewhere that goes by "Owl69/70/75":
OK, let's run the numbers. They're easy to find, and the math's not hard.
9-9-9 replaces the individual and corporate income taxes, social security taxes, and the estate tax. Let's look at 2005, because of quirks in some tax laws ofter that. Per the historical tables in the 2012 budget request prepared by Obama's OMB, receipts for 2005 were $927 billion from individual income taxes, $278 billion for corporate taxes, $794 billion for social security, and $27 billion for estate and gift taxes, total $2.026 trillion.
For the same year, per the IRS, individual AGI was $7.422 trillion, less $166 billion in dividends and $20 billion in partnership/S Corp income (taxed elsewhere under 9-9-9) for a net of $7.236 trillion. Business income was $3.346 trillion. GDP was $12.398 trillion, and the studies that I've seen have indicated a consumption tax base would range from 80-85% of GDP, so let's say $10 trillion. That makes a total 9-9-9 tax base of $20.582 trillion, and 9% of that is $1.852 trillion.
That's an apparent shortfall of $174 billion, except that we have run these calculations with income defined under current tax law, including loopholes variously estimated as having a tax effect approximating $1 trillion, and those loopholes are eliminated. You wouldn't pick up the full $1 trillion in tax effect, because the additional income would be subjected to lower marginal rates. Assume half the loopholes are outright credits (no impact on this analysis) and half are from deductions defining taxable income. So you have $500 billion in additional tax at existing rates, say 30% on average, or approximately $1.7 trillion in additional taxable income. At 9% that gives another $150 billion in revenues, essentially closing the gap. $24 billion is about as close as you can get to revenue neutral in this kind of analysis.
My 15-15-15 approach works similarly but at a higher rate because I want to incorporate the Boortz-Linder prefund at 30% and I also want to narrow the budget deficit. So I take the $22.3 trillion tax base ($20.582 trillion plus $1.7 trillion) times 15% to give me $3.345 trillion in revenues. The Boortz-Linder prefund costs about $700 billion, so I'm at $2.6 trillion net. I also want to do French health care which costs $900 billion. The combination of the prefund and French health care means that nobody, not a single person, is more than a minimum wage job away from being above the poverty line. That's about as good a welfare safety net as we want or need, comparable to Europe and way better than what we have now. I fund that by ending Medicaid (now redundant) to save $350 billion, offsetting $150 billion of Medicare cost (the first $3,000 for each of 50 million seniors), and getting $300 billion of the rest from cuts in "means tested" social welfare programs because the prefund essentially disqualifies everyone. That leaves $100 billion to come from the additional tax revenues and $500 billion to go to deficit reduction.
Now I have to chop $500 billion off the spending side to balance the budget. I get $100 billion by bringing the troops home from Germany and Japan, and converting the majority of those slots to reserve billets (save 80% of personnel costs associated). Cato, Rand Paul, Tom Coburn, and CBO have all identified cost savings well in excess of the remaining $400 billion. Pick and choose the best from their offerings.
I ran this before with slightly different numbers for a different base year, but it pretty much always falls in this range. There are a lot more sophisticated analytical techniques to try to nail down the numbers more precisely, but this approach is close enough--and good enough--for a discussion board or a political campaign. The one thing that those more sophisticated analyses typically show is that this sort of tax structure will generate something on the order of a 1-2% uptick in economic growth, and that solves a LOT of problems.
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Now that you're hot under the collar, Reb, it's probably a good time to ask the question:
This corporate tax you mention, that's embedded in goods and services - where is it written that this tax will just "go away"?
Do you mean that since the government isn't taxing the shit out of corporate America, that corporate America will be dropping their prices accordingly?
They're supposed to do this on the honor system? Or is there some other mechanism that compels those actions, other than supply and demand and the marketplace?
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...and this plan would UNLEASH the entrepreneurial spirit in this nation and bring manufacturing back to the US. Our corporate tax is at 35%, highest in the industrialized world. What do you think will happen when it's dropped from 35% to 9%, and they don't have to pay millions to lobbyists to get loopholes, which won't exist? Not to mention, the stability of a tax that takes 2/3rds of Congress to increase?
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That's because it's NOT a 30% sales tax. This is a tax that replaces all federal taxes. It's at 23% and would be by law. I don't give a damn what your state sales tax is; take it up with them. This is a replacement for payroll, income, corporate, capital gains, and estate taxes. There is also a 22% embedded corporate tax on every good you purchase, which will be removed. People will wind up paying between 1-2% over what they're paying now for goods while keeping their entire paycheck, minus what your state takes. Don't conflate state and federal and don't tell me I should be ashamed because you're too ignorant to do your own ****in' research on the matter. Have you read the book? Either of'em? How about the condensed version, "Answering the critics"? That seems to be right up your ally.
The bill is also authored to where it won't take effect until 1 day after the 16th Amendment is repealed. It also comes with a prebate up to the poverty level, about 150 per month per person.
Not to pick a fight, but it is a 30% tax. Sorry. Do the simple math. Buy something for $1.00 and it will cost you $1.30. If they want to do the math and involve the other savings as selling points, I'm fine with that. Just stop calling it a 23% tax, because it simply isn't one. Call it what it is, a 30% sales tax with the following benefits, and list the savings. That would actually be honest.
And I don't recall saying anything about my state sales tax rate.
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This corporate tax you mention, that's embedded in goods and services - where is it written that this tax will just "go away"?
Sorry about that getting "hot under the collar", and I wanted to discuss this in a civil manner, but when someone tells me I should be ashamed of something I've been supporting, AND STUDYING, Erasmus, for years, I get pissed.
As for your question, the market. It happened once before between a few airlines. When that liability is removed, a liability they pass on to the consumer, a company's CEO or owner would be a FOOL not to lower it and pass those savings on to a consumer. Why? Well, if they don't, you can bet your ass their competitor will. It's all about gaining marketshare. Making money isn't the only goal of a company, it's about stability and staying power. They damn sure don't want to ruin any foothold in a market and will use anything to their advantage to gain more marketshare.
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Sorry about that getting "hot under the collar", and I wanted to discuss this in a civil manner, but when someone tells me I should be ashamed of something I've been supporting, AND STUDYING, Erasmus, for years, I get pissed.
As for your question, the market. It happened once before between a few airlines. When that liability is removed, a liability they pass on to the consumer, a company's CEO or owner would be a FOOL not to lower it and pass those savings on to a consumer. Why? Well, if they don't, you can bet your ass their competitor will. It's all about gaining marketshare. Making money isn't the only goal of a company, it's about stability and staying power. They damn sure don't want to ruin any foothold in a market and will use anything to their advantage to gain more marketshare.
I've studied it, too. And it's a 30% tax. The math is pretty straightforward.
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Not to pick a fight, but it is a 30% tax. Sorry. Do the simple math. Buy something for $1.00 and it will cost you $1.30. If they want to do the math and involve the other savings as selling points, I'm fine with that. Just stop calling it a 23% tax, because it simply isn't one. Call it what it is, a 30% sales tax with the following benefits, and list the savings. That would actually be honest.
And I don't recall saying anything about my state sales tax rate.
Where the hell are you getting 30%? The people making that dumbass claim are adding in a state tax.
Link to it.
...waiting...
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I've studied it, too. And it's a 30% tax. The math is pretty straightforward.
Yeah, I SERIOUSLY doubt that.
Now link to it. Post your proof. This isn't DU. If you make a claim, back that shit up, B.
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Where the hell are you getting 30%? The people making that dumbass claim are adding in a state tax.
Link to it.
...waiting...
Nope. I'm not including any state sales tax. I thought you had studied this? If you buy something for $1.00, it will cost you $1.30 under the Fair Tax Plan (at least the latest version that I read at their web site, which admittedly was a few months ago). They arrive at the 23% number by dividing the $0.30 by the $1.30.
0.30/1.30=23%. But the total tax is still 30% of the original price of the purchase, similar to how most people think about and calculate sales taxes.
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Not to pick a fight, but it is a 30% tax. Sorry. Do the simple math. Buy something for $1.00 and it will cost you $1.30. If they want to do the math and involve the other savings as selling points, I'm fine with that. Just stop calling it a 23% tax, because it simply isn't one. Call it what it is, a 30% sales tax with the following benefits, and list the savings. That would actually be honest.
No, that's tard math. Something that costs you a dollar today, has a 22% embedded tax. Removing that, it'll be 78 cents. Adding the 23% Fair Tax, it'll be $1.01.
How can that work? Because you increase your tax base from about 60 million to about 330 million. That's how.
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Sorry about that getting "hot under the collar", and I wanted to discuss this in a civil manner, but when someone tells me I should be ashamed of something I've been supporting, AND STUDYING, Erasmus, for years, I get pissed.
As for your question, the market. It happened once before between a few airlines. When that liability is removed, a liability they pass on to the consumer, a company's CEO or owner would be a FOOL not to lower it and pass those savings on to a consumer. Why? Well, if they don't, you can bet your ass their competitor will. It's all about gaining marketshare. Making money isn't the only goal of a company, it's about stability and staying power. They damn sure don't want to ruin any foothold in a market and will use anything to their advantage to gain more marketshare.
Okay, I just wanted to be clear on that. For the record, I happen to believe in the market and the forces of supply and demand. There's probably an economic model that can predict this type of behavior -- I'll need to dig to see what that might be. Of course, there are examples of corporations and companies passing on savings to their customers, while bolstering stock prices and investors' interests, but I'm trying to gauge behavior here.
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Yeah, I SERIOUSLY doubt that.
Now link to it. Post your proof. This isn't DU. If you make a claim, back that shit up, B.
This is their page discussing in part what a tax-inclusive rate is. I really was goingt to give you the benefit of the doubt, but if you'd studied this, you'd know this already.
http://www.fairtax.org/site/News2?news_iv_ctrl=1541&page=NewsArticle&id=8248
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http://www.fairtax.org/site/PageServer?pagename=about_main
I see "someone" believes the Annenberg-funded and completely left-leaning Factcheck.org.
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This is their page discussing in part what a tax-inclusive rate is. I really was goingt to give you the benefit of the doubt, but if you'd studied this, you'd know this already.
http://www.fairtax.org/site/News2?news_iv_ctrl=1541&page=NewsArticle&id=8248
You typed in Fair Tax and 30% and posted their link that shows them disproving the 30%, you realize that, right?
http://www.fairtax.org/PDF/Tax%20Notes%20article%20on%20FT%20rate.pdf
The Fair Tax Act of 2005 (H.R. 25 and S. 25), would
replace most existing federal taxes with a comprehensive
consumption tax in the form of a national retail sales tax
levied at a tax-inclusive rate of 23 percent, effective
January 1, 2007. The act would repeal the federal income
tax (including the capital gains tax and the alternative
minimum tax), the corporate income tax, federal payroll
taxes, the self-employment tax, and the estate and gift
tax. The act is intended to be revenue neutral.
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...and this plan would UNLEASH the entrepreneurial spirit in this nation and bring manufacturing back to the US. Our corporate tax is at 35%, highest in the industrialized world. What do you think will happen when it's dropped from 35% to 9%, and they don't have to pay millions to lobbyists to get loopholes, which won't exist? Not to mention, the stability of a tax that takes 2/3rds of Congress to increase?
I absolutely agree that the 35% corporate tax rate is obscene and that it's hobbling our ability to be and stay competitive.
I'm just not so sure that manufacturing jobs are really what we need back in the U.S., unless the economics make it feasible to do so -- and I'm not convinced of that.
Manufacturing is almost -- not quite, but almost -- a thing of the past. Instead of manufacturing, we produce services, ideas, and intellectual property. And we do pretty well at that, comparatively speaking. While manufacturing will never be dead, we shouldn't necessarily look at manufacturing gigs as some sort of benchmark. Let's look at what brings money in.
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Now that you're hot under the collar, Reb, it's probably a good time to ask the question:
This corporate tax you mention, that's embedded in goods and services - where is it written that this tax will just "go away"?
That's the problem with calling 9-9-9 horrible and Fair Tax good, they are both equally changeable as Congress wishes. Saying it's "By law" doesn't mean anything, since both would be laws and therefore both can be changed with equal ease by subsequent laws.
As far as 9-9-9 or any other alternative tax plan goes, neither Cain nor anyone else who gets elected can do more than propose the plan once they're in office, all they can do is ask Congress to turn it into legislation and pass it, after that it's a crapshoot.
I salute Cain for HAVING a plan at all, and having the guts to advocate for it, even if I'm not necessarily nuts about it myself (Though it probably wouldn't change my total tax bill that much one way or the other), which greatly distinguishes him from the rest of the pack (I don't include Ron Paul in that as I just don't see him getting into the finals).
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No, that's tard math. Something that costs you a dollar today, has a 22% embedded tax. Removing that, it'll be 78 cents. Adding the 23% Fair Tax, it'll be $1.01.
How can that work? Because you increase your tax base from about 60 million to about 330 million. That's how.
As I said, if you want to advertise the benefits and savings of removing additional taxes, do it. But call it what it is. Even in your example, I'm still paying 30% in taxes on top of the purchase price of the item. What they should be saying is that they are replacing corporate income taxes, personal income taxes, and the estate and gift tax with a 30% national sales tax. Because that's what it is. The incremental change in the purchase price may or may not make it less than 30%. Lots of corporations have a very low effective tax rate. You'd have to know for each product precisely what percentage of corporate income taxes were being passed through before you could accurately tell, and people buy thousands of products a year from thousands of different companies. Your example is too high level to be realistic on every single purchase. GE didn't pay income taxes. Can't I assume that when I buy a GE product that I'm not paying any corporate income taxes on my purchase? Further, by eliminating the payroll tax, it's not entirely clear that prices would fall, especially if companies let the employees have much of this benefit. There's just know way of knowing this for every product I purchase. The 22% embedded tax might be the national average, and mine might be 30% or 10%. We have no way of knowing.
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That's the problem with calling 9-9-9 horrible and Fair Tax good, they are both equally changeable as Congress wishes. Saying it's "By law" doesn't mean anything, since both would be laws and therefore both can be changed with equal ease by subsequent laws.
The difference being, it would effect every single American and you wouldn't have people saying, "screw this group, I'm not in it, so I support an increase", also it would take 2/3rds of Congress to get it increased. We can't even get a 1% sales tax increased in my city, hence why we have SPLOST. Class warfare is one of the most devastating tactics that's been used in this nation. This would end a lot of that.
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As I said, if you want to advertise the benefits and savings of removing additional taxes, do it. But call it what it is. Even in your example, I'm still paying 30% in taxes on top of the purchase price of the item. What they should be saying is that they are replacing corporate income taxes, personal income taxes, and the estate and gift tax with a 30% national sales tax. Because that's what it is. The incremental change in the purchase price may or may not make it less than 30%. Lots of corporations have a very low effective tax rate. You'd have to know for each product precisely what percentage of corporate income taxes were being passed through before you could accurately tell, and people buy thousands of products a year from thousands of different companies. Your example is too high level to be realistic on every single purchase. GE didn't pay income taxes. Can't I assume that when I buy a GE product that I'm not paying any corporate income taxes on my purchase? Further, by eliminating the payroll tax, it's not entirely clear that prices would fall, especially if companies let the employees have much of this benefit. There's just know way of knowing this for every product I purchase. The 22% embedded tax might be the national average, and mine might be 30% or 10%. We have no way of knowing.
I don't, nor did I, assume that all companies pay the full 35%....THAT is part of the damn problem and the Fair Tax would remove a lot of that political chicanery. The tax is a 23% inclusive sales tax. That is in the legislation. If you want to believe in a 30% tax, Leprechauns, or ****ing Pink-haired Pixies on angel dust, that is your prerogative. You can have your own opinions; you cannot, however, have your own facts.
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You typed in Fair Tax and 30% and posted their link that shows them disproving the 30%, you realize that, right?
http://www.fairtax.org/PDF/Tax%20Notes%20article%20on%20FT%20rate.pdf
I know what page I linked to, and no, they don't successfully disprove anything on their site. What they do is describe the manner in which they use to calculate the 23%, which is not how anyone who pays state sales taxes calculates the tax on a purchase. In fact, when they program the computers to calculate the Fair Tax, they will use the simplest formula, which is purchase price x 1.3. That's the difference in calculating a tax-inclusive vs. tax-exclusive tax rate. I would venture a guess that 100% of Americans who are familiar with calculating sales tax use the tax-exclusive manner, and Fair Tax proponents use the tax-inclusive, which was explained on this page, which you apparently didn't bother to read.
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I think, at least in the short term, congress realizes that people are pretty damn pissed off, and wouldn't be able to increase it from 9/9/9 without severe electoral consequences. And, as Rebel said, with everyone having skin in the game, we'd all pay much closer attention, at least in theory.
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I don't, nor did I, assume that all companies pay the full 35%....THAT is part of the damn problem and the Fair Tax would remove a lot of that political chicanery. The tax is a 23% inclusive sales tax. That is in the legislation. If you want to believe in a 30% tax, Leprechauns, or ****ing Pink-haired Pixies on angel dust, that is your prerogative. You can have your own opinions; you cannot, however, have your own facts.
I call it a 30% tax because when I pay sales tax in my state or any other state, and their rate is 5%, I pay $5 in sales tax on a $100 purchase (total of $105). The same is true of the Fair Tax. 23% vs. 30%. If I buy something that costs $100, I will need $130 (not $123) when I check out. That is the math, it is the fact. Saying that something I purchase has a 22% embedded corporate tax is an average, untrue of probably 99% of the products we buy. Some might be higher, some might be lower. Since the products I buy don't come with that disclosed, there's really no way to know whether I personally am paying a lesser, equal, or higher rate than before on any given product.
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The difference being, it would effect every single American and you wouldn't have people saying, "screw this group, I'm not in it, so I support an increase", also it would take 2/3rds of Congress to get it increased. We can't even get a 1% sales tax increased in my city, hence why we have SPLOST. Class warfare is one of the most devastating tactics that's been used in this nation. This would end a lot of that.
Unless it's a Constitutional Amendment (Not gonna happen) that 2/3 thing goes away on a simple majority vote in both houses, then the next day - or even in the same bill - the simple majority changes it to whatever it feels like, up or down. And even if by wildly-unlikely chance the Courts made Congress halt on that, the Congress has the power to go around, over, or through any previous law they've passed no matter how ironclad it seems by less direct means.
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I call it a 30% tax because when I pay sales tax in my state or any other state, and their rate is 5%, I pay $5 in sales tax on a $100 purchase (total of $105). The same is true of the Fair Tax. 23% vs. 30%. If I buy something that costs $100, I will need $130 (not $123) when I check out. That is the math, it is the fact. Saying that something I purchase has a 22% embedded corporate tax is an average, untrue of probably 99% of the products we buy. Some might be higher, some might be lower. Since the products I buy don't come with that disclosed, there's really no way to know whether I personally am paying a lesser, equal, or higher rate than before on any given product.
After the Fair Tax is implemented, if you see a product for 100 bucks, you pay 100 bucks for the product, plus maybe another 5 for state taxes, which we're not talking about. The Fair Tax is an inclusive tax. If it says 100 bucks, the 23% is already included, meaning the wholesale cost of the product was $77. You're pulling the $130 from your nether regions.
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Unless it's a Constitutional Amendment (Not gonna happen) that 2/3 thing goes away on a simple majority vote in both houses, then the next day - or even in the same bill - the simple majority changes it to whatever it feels like, up or down. And even if by wildly-unlikely chance the Courts made Congress halt on that, the Congress has the power to go around, over, or through any previous law they've passed no matter how ironclad it seems by less direct means.
Wouldn't the Senate have to go nuclear for a simple majority? I still don't see it being easy when, unlike now, it can't be passed for one group, while another group unaffected is on the sidelines cheering it on.
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The 23% and 30% are derived from either doing the figure inclusively or exclusively.
Bottom line; IT DOESN'T MATTER!
I couldn't give one damn if it is 23% or 30% or 60%. Really. The Fair Tax was NEVER designed to be a tax CUT. You will be paying the SAME taxes you've always paid just on a more transparent scale.
If congress wants to RAISE that tax then they have to ask US.
If you don't want to pay the same tax you simply consume less. Hell, when it is all said and done the Fair Tax could end up being 15%. Would it matter? Nope because it would be the same taxes you're paying now.
KC
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The 23% and 30% are derived from either doing the figure inclusively or exclusively.
Bottom line; IT DOESN'T MATTER!
I couldn't give one damn if it is 23% or 30% or 60%. Really. The Fair Tax was NEVER designed to be a tax CUT. You will be paying the SAME taxes you've always paid just on a more transparent scale.
If congress wants to RAISE that tax then they have to ask US.
If you don't want to pay the same tax you simply consume less. Hell, when it is all said and done the Fair Tax could end up being 15%. Would it matter? Nope because it would be the same taxes you're paying now.
KC
It would be a lot less for me, and the rest of the middle class. Not to mention, the job creation engine would be running on nitrous.
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After the Fair Tax is implemented, if you see a product for 100 bucks, you pay 100 bucks for the product, plus maybe another 5 for state taxes, which we're not talking about. The Fair Tax is an inclusive tax. If it says 100 bucks, the 23% is already included, meaning the wholesale cost of the product was $77. You're pulling the $130 from your nether regions.
You can hide the tax like they do in England, where the tax is already reflected in the price tag in the store. That doesn't change the math. It just hides the taxes.
And I'm not pulling it from my butt. Did you follow the math I did? It's rather simple. But we can use your example. If I buy something that is $77, I will pay $23 in taxes. 23/77=30% (or 29.87%). That you hide the amount of tax in the price tag doesn't change the math. It is accurate to say that it is a 23% tax-inclusive rate, which I've already pointed out, but that's not how anyone familiar with calculating sales tax on a purchase in a store does it.
And the $77 would be what we would think of as the retail price, not the wholesale price.
I could take FairTax.org's calculation and apply it to my local tax rate of 7.25% and advertise the sales tax here as being low compared to other states by using the tax-inclusive rate of 6.76%. It's just playing with numbers to make it look smaller, which, to me, is less than honest, especially the way they rabidly defend a calculation method that nobody else uses.
I'll let you have the last word. Aside from this issue, I normally agree with a lot of what you say.
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It would be a lot less for me, and the rest of the middle class. Not to mention, the job creation engine would be running on nitrous.
Not really. It would depend on how you consume. If you have more money in your pocket your consumption is likely to go up.
KC
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You can hide the tax like they do in England, where the tax is already reflected in the price tag in the store. That doesn't change the math. It just hides the taxes.
And I'm not pulling it from my butt. Did you follow the math I did? It's rather simple. But we can use your example. If I buy something that is $77, I will pay $23 in taxes. 23/77=30% (or 29.87%). That you hide the amount of tax in the price tag doesn't change the math. It is accurate to say that it is a 23% tax-inclusive rate, which I've already pointed out, but that's not how anyone familiar with calculating sales tax on a purchase in a store does it.
That's just lazy math on my part, subtracting 23 from 100. If the wholesale cost of a product was 77 dollars, you would pay 94.71. (77+17.71, 23%), not the 30% you're talking about. They add taxes to the wholesale cost of a product.
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Not really. It would depend on how you consume. If you have more money in your pocket your consumption is likely to go up.
KC
I'm already paying income taxes, payroll taxes, embedded taxes, etc. I would pay less then for products than I do now.
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That's just lazy math on my part, subtracting 23 from 100. If the wholesale cost of a product was 77 dollars, you would pay 94.71. (77+17.71, 23%), not the 30% you're talking about. They add taxes to the wholesale cost of a product.
I hate to reneg on my promise to let you have the last word, but this post is factually inaccurate.
"The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive."
It's not a tax on the wholesale price. It's a tax on the retail price at the final point of purchase.
Oh, and if you buy a new home, you'll pay the 30% on the price of the home as well.
"Under the FairTax, the purchase of a home, just like the purchase of a car, food, or any good or service for personal use is seen for what it is: An item of consumption. Since the FairTax taxes all consumption without exception (except previously taxed goods and services), the FairTax imposes a 23 percent (tax-inclusive rate) tax on the purchase price of new homes."
http://www.fairtax.org/PDF/PromotingHomeOwnership.pdf
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I'm already paying income taxes, payroll taxes, embedded taxes, etc. I would pay less then for products than I do now.
Yes, you would pay less for the products thereby having more money for other products. If you chose not to purchase the other products then you would effectively be paying less taxes.
Hey, I'm on your side in this. I'm a huge proponent of the Fair Tax! I would LOVE to see it enacted.
KC
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Oh, and if you buy a new home, you'll pay the 30% on the price of the home as well.
"Under the FairTax, the purchase of a home, just like the purchase of a car, food, or any good or service for personal use is seen for what it is: An item of consumption. Since the FairTax taxes all consumption without exception (except previously taxed goods and services), the FairTax imposes a 23 percent (tax-inclusive rate) tax on the purchase price of new homes."
http://www.fairtax.org/PDF/PromotingHomeOwnership.pdf
Yes and they go on to conclude that if you purchase that new home the 22% embedded taxes would come out. I'm going off of memory here but I think the cost of a $100,000 in todays market would cost you around $102,000 or $106,000.
In other words it wouldn't cost you $130,000.
KC
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I hate to reneg on my promise to let you have the last word, but this post is factually inaccurate.
"The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive."
It's not a tax on the wholesale price. It's a tax on the retail price at the final point of purchase.
Oh, and if you buy a new home, you'll pay the 30% on the price of the home as well.
"Under the FairTax, the purchase of a home, just like the purchase of a car, food, or any good or service for personal use is seen for what it is: An item of consumption. Since the FairTax taxes all consumption without exception (except previously taxed goods and services), the FairTax imposes a 23 percent (tax-inclusive rate) tax on the purchase price of new homes."
http://www.fairtax.org/PDF/PromotingHomeOwnership.pdf
You're not getting the point and I may have misstated when I said "wholesale". I'm referring to retail. If the business is selling the product for 1.00, you'll pay 1.23 (which will be on the tag), but it'll already be shown in the price. If it's labeled 1.00, the business is actually selling it for .81. The receipt will say .81 cents, .19 cent Fair Tax, Total 1.00. The tag will say 1.00. You won't pay anything over that, with the exception of a state sales tax.
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I don't think you're getting the "inclusive" part, or maybe you're not understanding it.
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Yes and they go on to conclude that if you purchase that new home the 22% embedded taxes would come out. I'm going off of memory here but I think the cost of a $100,000 in todays market would cost you around $102,000 or $106,000.
In other words it wouldn't cost you $130,000.
KC
What 22% embedded tax? I have no way of confirming this at all. This mysterious 22% embedded tax is some form of national average for all corporations. Homebuilders might be completely different. Do you have a link to homebuilders' average tax rates? What about custom builders who don't even operate as C-corporations and have smaller profit margins? You simply cannot say 22% and be accurate. PLUS, I'd like to see them update the 22% based on the past 5 years of corporate earnings and taxation. Lots of homebuilders didn't have to pay income taxes because they had losses. Relying on 22% for any type of analysis of this sort is unreliable and dangerous, because it varies from company to company, product to product, and from year to year.
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What 22% embedded tax? I have no way of confirming this at all. This mysterious 22% embedded tax is some form of national average for all corporations. Homebuilders might be completely different. Do you have a link to homebuilders' average tax rates? What about custom builders who don't even operate as C-corporations and have smaller profit margins? You simply cannot say 22% and be accurate. PLUS, I'd like to see them update the 22% based on the past 5 years of corporate earnings and taxation. Lots of homebuilders didn't have to pay income taxes because they had losses. Relying on 22% for any type of analysis of this sort is unreliable and dangerous, because it varies from company to company, product to product, and from year to year.
http://www.fairtaxblog.com/20090116/the-cost-of-taxes/
Do you expect those businesses to just suck up those taxes they pay into the government? There is only one entity in this country that pays taxes, the individual. You can tax the businesses at 80%, and it won't affect them a bit, unless you stop buying, because you are the ones they're going to be recouping it from.
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You're not getting the point and I may have misstated when I said "wholesale". I'm referring to retail. If the business is selling the product for 1.00, you'll pay 1.23 (which will be on the tag), but it'll already be shown in the price. If it's labeled 1.00, the business is actually selling it for .81. The receipt will say .81 cents, .19 cent Fair Tax, Total 1.00. The tag will say 1.00. You won't pay anything over that, with the exception of a state sales tax.
and
I don't think you're getting the "inclusive" part, or maybe you're not understanding it.
If the business is selling the product for $1.00 (before adding the Fair Tax), you will pay $1.30, not $1.23. The 23% comes from taking the $0.30 in taxes and dividing it by the tax-inclusive price of $1.30 ($0.30/$1.30=23.077%). Tax-inclusive means that the amount of tax is included in the base (denominator) of the calculation. Tax-exclusive means that the tax is not included in the base (denominator) of the calculation (this is the way virtually all states calculate their sales tax rates, and thus how most people think about what the sales tax rates are). Again, read the link I provided you earlier and you will see that they do actually explain this.
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http://www.fairtaxblog.com/20090116/the-cost-of-taxes/
Do you expect those businesses to just suck up those taxes they pay into the government? There is only one entity in this country that pays taxes, the individual. You can tax the businesses at 80%, and it won't affect them a bit, unless you stop buying, because you are the ones they're going to be recouping it from.
No, what I am saying is that the 22% is (or was) averaged over such a large amount of industries that you cannot legitimately use it as an example in big ticket purchases where we have no clue as to what the specific company's tax burden is. I'm saying that the 22% is most likely not even 22% anymore, given corporate losses during the past few years. I'm saying that it's such a pie-in-the sky, constantly changing number that it's useless for in-depth analysis.
And no, I do not believe that corporations ultimately bear the burden of the taxes they pay, consumers do. Why you brought this up is bizarre and irrelevant. But battle the strawmen all you like.
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and
If the business is selling the product for $1.00 (before adding the Fair Tax), you will pay $1.30, not $1.23. The 23% comes from taking the $0.30 in taxes and dividing it by the tax-inclusive price of $1.30 ($0.30/$1.30=23.077%). Tax-inclusive means that the amount of tax is included in the base (denominator) of the calculation. Tax-exclusive means that the tax is not included in the base (denominator) of the calculation. Again, read the link I provided you earlier and you will see that they do actually explain this.
http://www.fairtax.org/site/PageServer
http://www.taxpolicycenter.org/briefing-book/improve/retail/exclusive-inclusive.cfm
...and a product that cost 1.00 now, won't cost 1.00 when it's passed. Businesses will remove what they factor in to the cost of their goods they want to sell.
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But battle the strawmen all you like.
..and you stick with the "pound me in the ass, Mr. Fed Man" system we currently have in place.
I'll go with the Fair Tax.
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..and you stick with the "pound me in the ass, Mr. Fed Man" system we currently have in place.
I'll go with the Fair Tax.
Go with the Fair Tax, that's fine with me. Just get your math corrected.
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Go with the Fair Tax, that's fine with me. Just get your math corrected.
Is it a 23% inclusive tax? Yes or no?
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Is it a 23% inclusive tax? Yes or no?
Why yes it is, as I already stated. Do you know what a denominator is? Is it the same as your local 7% tax rate in the way that 23% is calculated? Nope. Will something that retails for $1.00 cost you $1.23 as you stated? Nope. It will be $1.30.
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Why yes it is, as I already stated. Do you know what a denominator is? Is it the same as your local 7% tax rate in the way that 23% is calculated? Nope. Will something that retails for $1.00 cost you $1.23 as you stated? Nope. It will be $1.30.
Question for you, because it would appear you, and many of the detractors, are playing with words.
A) Business purchases an item for 73 cents wholesale.
B) Their markup is 10%, or 7.3 cents.
C) Their retail is 80.3 cents rounded up to 81 cents (Businesses generally round up).
D) When they add the 23% Fair Tax, what is the final price?
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Not to mention, I think you're under the false assumption that a product that cost 1.00 now, will cost 1.00 when the Fair Tax is enacted and all corporate taxes are removed. For the sake of it being fair to the "less fortunate", you're also not factoring in the prebate.
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Question for you, because it would appear you, and many of the detractors, are playing with words.
A) Business purchases an item for 73 cents wholesale.
B) Their markup is 10%, or 7.3 cents.
C) Their retail is 81 cents rounded up to 81 cents (businesses round up).
D) When they add the 23% Fair Tax, what is the final price?
$1.053
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$1.053
Still going with that? Let's say you're right, you think that's enough to keep people away? I still don't buy the way they're stating it. It's not what I've read, or researched. I've seen it on sites that are extremely anti-Fair Tax/Pro-current shit sandwich, but no where else.
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I'm down with it one way or the other. The current system is broke.
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Not to mention, I think you're under the false assumption that a product that cost 1.00 now, will cost 1.00 when the Fair Tax is enacted and all corporate taxes are removed. For the sake of it being fair to the "less fortunate", you're also not factoring in the prebate.
That's because the price after the Fair Tax is enacted, or whether or not there is a prebate, is wholly irrelevant to whether or not the tax rate is being advertised in a misleading manner, which was one of my points. Again, go back and read what I wrote. Nowhere have I argued that prices won't go down, only that I question the 22% decrease that Fair Tax folks quote as being useful for true analysis.
Again, it is more honest to me to say that we're eliminating corporate income taxes, personal income taxes, and the estate and gift tax and adding a 30% national sales tax, just to make sure that people are comparing apples to apples with the math. And you can add that prices will come down because corporations will save some amount of taxes that are passed through to consumers. We have no idea if it's 15% or 26% or 5% or 30%. We just won't know until after it's passed, and that savings will vary by year.
And I'm still not excited about including new homes in the list of items taxed at 30% (or 23% inclusive), seeing as it is one of the last large production industries in the US.
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Ok, what's your solution?
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I'm down with it one way or the other. The current system is broke.
I'll buy that the system is broken. It benefits only the government and the current tax infrastructure, i.e., tax attorneys, corporate attorneys, and the Mom & Pop tax preparation services.
But as Congress never met a tax it didn't like (history shows that regardless of the tax level -- whether it's 23% or 30% or anything in between), it will inevitably raise that tax to the point of sustainability.
Every red flag on the planet is waving in my face that implementation of a national sales tax is bad juju.
Unfortunately, I don't have a better idea right now except dismantling the current tax code, shit layer on top of shit layer.
Oh, and I would favor a plan that is actually designed to REDUCE taxes. Those advocating the Fair Tax freely admit that the current tax load would not be reduced under the Fair Tax and since I believe I'm bleeding enough for the ****ing government, I'd like a ******* tourniquet for the hemmorhage.
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Erasmus to answer one of your questions;
It doesn't matter what the home builders income (or any corporations income) is to be taxed. That is not where the 22% embedded tax comes from.
What they are saying is all the items you use to build a house (or make your product) have taxes built into them as they move along and since there will no longer be taxes from business to business then THOSE taxes will go away, hence the 22% figure.
No, it's probably not exact but don't equate it with the income taxes or corporate taxes that went down due to the economy.
KC
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i was kinda waiting for erasmus and rebel to finish their lengthly back n forth but i have a few questions.
1. would GE products go up 23% since there is no embedded tax with a 0% tax liability company?
2. what would not be included in a "national RETAIL sales tax"? if i buy from a wholesaler, no tax? car, house, corporate purchases like buildings and such, taxed?
3. do the sales in the used market get taxed again? if not, resale value increases and decreases the new sales numbers that in essence means less gdp growth, no? dont see how that would help jobs.
4. waiting for the free market to whittle out the price of the embedded tax through competition, means prices would go up at first, then fall to new "market" rates, some of which will be up and some down. agree?
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Erasmus to answer one of your questions;
It doesn't matter what the home builders income (or any corporations income) is to be taxed. That is not where the 22% embedded tax comes from.
What they are saying is all the items you use to build a house (or make your product) have taxes built into them as they move along and since there will no longer be taxes from business to business then THOSE taxes will go away, hence the 22% figure.
No, it's probably not exact but don't equate it with the income taxes or corporate taxes that went down due to the economy.
KC
The 22% figure is, at best, an assumption. The OMB is rife with assumptions, which explains why government figures traditionally are a lot less accurate than they should be.
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Still going with that? Let's say you're right, you think that's enough to keep people away? I still don't buy the way they're stating it. It's not what I've read, or researched. I've seen it on sites that are extremely anti-Fair Tax/Pro-current shit sandwich, but no where else.
I'm going with that because that is exactly how the calculations on their web site work. I even provided you with a link that has examples. I normally don't post wiki articles, but here's what they have to say (since you won't read the link I provided to you):
The sales tax rate, as defined in the legislation for the first year, is 23% of the total payment including the tax ($23 of every $100 spent in total—calculated similar to income taxes). This would be equivalent to a 30% traditional U.S. sales tax ($23 on top of every $77 spent—$100 total).[5]
I'm normally not a wiki fan, but they at least have the math correct. The Fair Tax site even has the math correct, and explain that they do not calculate this tax the way states and locals calculate their sales tax. I simply don't know how to restate this any clearer so that you will understand the math, even providing you with links from Fairtax.org itself. Of course, that their examples don't actually use the tax rates that they're proposing only adds to the confusion (I think they use 20% and 25% in the example). I can't help but think that this was intentional.
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Erasmus to answer one of your questions;
It doesn't matter what the home builders income (or any corporations income) is to be taxed. That is not where the 22% embedded tax comes from.
What they are saying is all the items you use to build a house (or make your product) have taxes built into them as they move along and since there will no longer be taxes from business to business then THOSE taxes will go away, hence the 22% figure.
No, it's probably not exact but don't equate it with the income taxes or corporate taxes that went down due to the economy.
KC
Most of those business to business taxes are state and local sales and use taxes, are they not? The Fair Tax won't do anything to affect those, and where applicable, they will still be paid. Business to business taxes on lumber or shingles, for example, are virtually all state and local taxes. You might have other obscure taxes like telephone and utility taxes or FCC taxes or user fees, but I didn't see where the Fair Tax eliminated these. I would think the largest savings would come from payroll taxes that the corporations remit and from their federal income taxes. Correct me if I'm wrong. I also believe that at least one version of the Fair Tax has an inventory credit of like 23% to try to remove embedded taxes on inventory, but that's a one-year deal.
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Oh, and I would favor a plan that is actually designed to REDUCE taxes. Those advocating the Fair Tax freely admit that the current tax load would not be reduced under the Fair Tax and since I believe I'm bleeding enough for the ****ing government, I'd like a ******* tourniquet for the hemmorhage.
Euph, no the Fair Tax isn't about lowering the tax rate and I absolutely agree with you about lowering taxes collected.
What the Fair Tax WILL do is make it one hell of a lot easier to see where your taxes are going the when the people want to reduce taxes it will be a simple matter of reducing the sales tax rather than letting some shithouse lawyer explain to you why letting X class of people have Y loophole will reduce your taxes. Screw that.
If we were under the Fair Tax we could simply take it to the people and ask to have the Fair Tax reduced to 20% (or whatever number worked.)
KC
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i was kinda waiting for erasmus and rebel to finish their lengthly back n forth but i have a few questions.
1. would GE products go up 23% since there is no embedded tax with a 0% tax liability company?
They paid no corporate tax. That doesn't mean they didn't pay 'embedded' taxes on the items they bought from other companies to produce THEIR product(s).
2. what would not be included in a "national RETAIL sales tax"? if i buy from a wholesaler, no tax? car, house, corporate purchases like buildings and such, taxed?
The tax is on only new goods and/or services. Used cars/used homes, no. Business to business purchases, no. Now a lot of people want to say well then a whole lot of people will start a business! People screw the system we have now and the Fair Tax won't stop that.
3. do the sales in the used market get taxed again? if not, resale value increases and decreases the new sales numbers that in essence means less gdp growth, no? dont see how that would help jobs.
No the sales on used items do not get taxed again. You will still have people who want the 'new and improved' stuff and those prices should remain static due to embedded taxes coming out.
4. waiting for the free market to whittle out the price of the embedded tax through competition, means prices would go up at first, then fall to new "market" rates, some of which will be up and some down. agree?
Yeah, it would probably take a while for prices to 'normalize' but I believe they would. You may see a slight increase in some goods/services (new only) but I don't think it would be much plus you get your WHOLE paycheck and April 15th is just another day of the year!!!
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Euph, no the Fair Tax isn't about lowering the tax rate and I absolutely agree with you about lowering taxes collected.
What the Fair Tax WILL do is make it one hell of a lot easier to see where your taxes are going the when the people want to reduce taxes it will be a simple matter of reducing the sales tax rather than letting some shithouse lawyer explain to you why letting X class of people have Y loophole will reduce your taxes. Screw that.
If we were under the Fair Tax we could simply take it to the people and ask to have the Fair Tax reduced to 20% (or whatever number worked.)
KC
I am against TAX CUTS!!!!
until we majorly reduce spending!
now we either straighten out what we are going to fund with taxes first and then tax accordingly or we reform to tax more fairly (keeping revenue ~same) to get everyone to feel the PAIN of taxes so that we can then lower spending.
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Texacon,
Can you give me an example of some of the federal business-to-business taxes that the Fair Tax would eliminate? I'm drawing a blank.
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I am against TAX CUTS!!!!
until we majorly reduce spending!
now we either straighten out what we are going to fund with taxes first and then tax accordingly or we reform to tax more fairly (keeping revenue ~same) to get everyone to feel the PAIN of taxes so that we can then lower spending.
Agreed. Tax cuts along with spending cuts must go hand-in-hand, otherwise we have more of the same bullshit -- too much going out, not enough coming in.
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One of the big obstacles to business expansion is not tax increases or a lack of tax cuts, but it is the uncertainty of the system we have now. I'd bet it would help to have a president say they will veto any and all tax increases for their their term and to only accept a budget that is 10% under current tax receipts.
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If you don't want to lower taxes now, which is understandable given the spendthrift nature of Congress and the debt they've accumulated giving money away, then part of the solution has to be decreased regulation. Compliance costs are expensive, and it's also expensive to have more EPA and IRS offices than Starbucks locations.
Shut down the Department of Education, at a bare minimum reduce the EPA to regulate joint waterways between states, outlaw government investment in private companies, repeal some of the ridiculous Frank Dodd legislation that is poised to severely crimp the capital markets in 2012 (that one was a slider hardly anyone knows about), actually enforce the SEC rules that would then remain instead of letting political friends slide, use the anti-trust legislation, outlaw the use of eminent domain to provide land to corporations, and many other things that would help. And for the love of God, stop studying gay penises with taxpayer dollars.
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If you have a family of four with an income of just under $50,000, they would pay more under the Cain plan. Currently, they are taxed at just less than 7 percent and pay $3,400 in income tax. Under Cain’s plan, they would be taxed at 9 percent or pay $4,500.
A family or 4 making just under 50K probably qualify for the EIC, thus offsetting if not completey eliminating their currrent tax burden.
I haven't actually run the numbers yet, so I might be wrong.
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Texacon,
Can you give me an example of some of the federal business-to-business taxes that the Fair Tax would eliminate? I'm drawing a blank.
None. They're passed on to the consumer.
Question for you, are you opposed to a national sales tax to replace an income-based tax? If so, are you content with the current tax structure? Are you content with it being graduated AKA "progressive" which, IMO is REgressive?
What are your plans, other than cutting spending and keeping the same BS structure in place?
I think an income-based tax is immoral. IMO, it is unAmerican that the federal and state governments get their cut before I do. It's immoral to have to pay to work. We're a consumer-based economy. At this nation's founding we had a consumption-based tax called tariffs...which were passed on to the consumer. The income-based tax is something straight out of the Communist Manifesto, and no, that's not just an overly emotional argument, it is what it is. I want to see a consumption-based tax. I want all other taxes gone. I'm tired of the shell game. I'm tired of having to search my balls off for little write-offs just to get more of my own money back at the beginning of each year. I want a transparent, one and done structure. Spending is a completely separate issue from taxation, in the terms of this argument. Of course we need to get spending down.
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Texacon,
Can you give me an example of some of the federal business-to-business taxes that the Fair Tax would eliminate? I'm drawing a blank.
No I can't. I have to take their word for it. From what I've read and studied.
The other thing I really like about the Fair Tax is picking up all the slouchers who pay absolutely ZERO tax. I mean NONE. Drug dealers, hookers, people who work under the table, etc ...
it's time for everyone to have some skin in the game. If you aren't paying taxes you shouldn't be allowed to vote. Hell, I wish I could vote myself a pay increase.
KC
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it's time for everyone to have some skin in the game.
Amen.
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I am against TAX CUTS!!!!
until we majorly reduce spending!
now we either straighten out what we are going to fund with taxes first and then tax accordingly or we reform to tax more fairly (keeping revenue ~same) to get everyone to feel the PAIN of taxes so that we can then lower spending.
Rugnuts, do you know what has happened every time the federal income tax rates were lowered? Tax revenues went up, in some cases by almost 100%.
Milton Friedman (ya know, that Nobel Laureate for economics) used to say "If you lower tax rates and revenue goes up, you didn't lower them enough."
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doc, with todays congress, revenue going up is their reason to justify new spending
and, you can raise taxes and revenue can go up
you can cut taxes and revenue can go down
you can raise taxes and revenue can go down
BUT you cant make the 15trillion go away with less revenue than expendtures. unless HYPERinflation sounds good to you. this is why i am more concerned with spending cuts over tax cuts. i could even endorse a 10-10-10 tax plan if it guaranteed debt reduction. we cant get major spending cuts pushed through until 100% of teh population has a stake in it. so we need tax reform startign with somehting that is tax neutral: fair tax, 9-9-9, even a flat tax gets us close enough.
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doc, with todays congress, revenue going up is their reason to justify new spending
and, you can raise taxes and revenue can go up
That never happens. You need to think about who pays the taxes and what they do when you raise their taxes. I.e., it isn't going out and continuing their spending patterns.
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doc, with todays congress, revenue going up is their reason to justify new spending
and, you can raise taxes and revenue can go up
you can cut taxes and revenue can go down
you can raise taxes and revenue can go down
BUT you cant make the 15trillion go away with less revenue than expendtures. unless HYPERinflation sounds good to you. this is why i am more concerned with spending cuts over tax cuts. i could even endorse a 10-10-10 tax plan if it guaranteed debt reduction. we cant get major spending cuts pushed through until 100% of teh population has a stake in it. so we need tax reform startign with somehting that is tax neutral: fair tax, 9-9-9, even a flat tax gets us close enough.
You make a valid point, but Congress having no budgetary discipline shouldn't have a dog in this fight. Personally, I'd like to see 999 or FairTax enacted simultaneously with an across the board rewriting of the budget, only "mandatory spending" items are those mandated by the Constitution, everything else is on the table. Cap spending at 90% of previous years tax revenues after first full fiscal year after this is completed. Budget the other 10% to paying down debt.
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None. They're passed on to the consumer.
So, instead of misreading my question intentionally and providing a smarmy non-answer, can you give me an example of direct business-to-business taxes that are passed on to consumers? We talked about payroll and corporate income taxes, but the previous claim by Texacon was that those are not what constitutes the 22% number. Those "don't matter" as he said. So what are these other mysterious taxes?
Question for you, are you opposed to a national sales tax to replace an income-based tax?
Not specifically, no. It has to replace it, the 16th amendment has to be repealed, and 30% is way too high. It should be advertised as what it is, a 30% sales tax, so that people know just how much money our government takes from us instead of calling it a 23% tax by switching around the math. I'm thinking it will damage the housing market the way it's curently drafted as well. People who buy homes will be financing taxes, which is horribly wasteful., even with a 20% down payment. A flat tax seems more equitable to me than the way the Fair Tax is drafted. You're even still exempting the bottom part of society from paying taxes with the prebate. You claim that you don't like progressive taxes, but the Fair Tax has a progressive component. Some portion of the people who aren't paying taxes now still won't be paying taxes under the Fair Tax.
If so, are you content with the current tax structure? Are you content with it being graduated AKA "progressive" which, IMO is REgressive?
No, it's not an either-or false dilemma you're trying to wedge me into. Just because I'm not particularly happy with the "Fair" tax doesn't mean that I like the current system. I've already told you this.
What are your plans, other than cutting spending and keeping the same BS structure in place?
Who said I want to keep the current system in place? I said there were lots of ways to simplify the current system with a flat tax and eliminating earned income credits and whatnot. Our government is, at this point, simply way too large. Don't expect me to get overly excited about a plan that simply changes who collects the taxes and files the returns, especially when misleading advertising is being used.
I think an income-based tax is immoral. IMO, it is unAmerican that the federal and state governments get their cut before I do. It's immoral to have to pay to work.
How is it logically immoral? If you don't pay to work, then you'll pay more to eat and buy things. I'm not sure it's immoral. I think it's fair that the more you make, the more you pay under an income tax structure, although it doesn't have to be progressive. You pay more when you make more under a flat tax, too. But as I mentioned, I'm not opposed to a national sales tax if it's not 30%. If the Fair Tax is revenue neutral, there's no logical way that things will cost less after the tax is enacted and relative to one's income without payroll and income taxes. I don't believe the math works that way. All things said and done, things will cost more for the average American, even though they're not paying income taxes and payroll taxes. That's not great for a "consumer-based" economy.
We're a consumer-based economy.
Which is a slight part of the problem. There's a happy medium between being consumer-based and producer-based.
At this nation's founding we had a consumption-based tax called tariffs...which were passed on to the consumer. The income-based tax is something straight out of the Communist Manifesto, and no, that's not just an overly emotional argument, it is what it is. I want to see a consumption-based tax. I want all other taxes gone. I'm tired of the shell game. I'm tired of having to search my balls off for little write-offs just to get more of my own money back at the beginning of each year. I want a transparent, one and done structure. Spending is a completely separate issue from taxation, in the terms of this argument. Of course we need to get spending down.
At this nation's founding, they didn't need 30% tariffs. Taxes need to be lowered in total eventually. The sooner the better. Spending is part of the discussion because it's difficult to keep lowering taxes and financing the rest of the wasteful spending with debt. A revenue-neutral tax structure, no matter how simple, isn't going to magically ramp up the economy. Come back with a 15% national sales tax, calculated as one would calculate any other state or local sales tax, and I might get excited.
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So, instead of misreading my question intentionally and providing a smarmy non-answer, can you give me an example of direct business-to-business taxes that are passed on to consumers?
All of'em. Costs include taxes, penalties, support, logistics, compliance fees, even the cost of a Ricoh printer contract is added somewhere into the cost of a good you purchase. A company is going to make their bottom line, regardless. If they go into the red, they'll redo their calculations and adjust the prices of their goods/services accordingly.
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All of'em. Costs include taxes,
Okay, so you disagree with Texacon on that point.
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Okay, so you disagree with Texacon on that point.
That costs of operation go into the final price a company sells their product for? Of course. Why wouldn't they? Why would they sell it below what it cost them to make?
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That costs of operation go into the final price a company sells their product for? Of course. Why wouldn't they? Why would they sell it below what it cost them to make?
No, you disagree with him when he says this:
It doesn't matter what the home builders income (or any corporations income) is to be taxed. That is not where the 22% embedded tax comes from.
That's why I asked him the question that you attempted to answer.
Let me see if I can put this another way: The Constitution says that taxes should be equitable. Everyone should pay the same rate. The Fair Tax does not accomplish this in the least, with it's progressive component and the tax break for those that have more money than they can spend. You can accuse me of being liberal, but it makes more sense to me to say that everyone pays a 18% flat tax and call it a day. Warren Buffett's taxes are then pretty much the same as mine and the same as the people making much less than you and I. Then it's equitable. I simply don't think that can be acheived with the progressive Fair Tax. The middle class will bear most of the burden as a percentage of their income, just like they do under the current system.
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No, you disagree with him when he says this:
That's why I asked him the question that you attempted to answer.
Let me see if I can put this another way: The Constitution says that taxes should be equitable. Everyone should pay the same rate. The Fair Tax does not accomplish this in the least, with it's progressive component and the tax break for those that have more money than they can spend. You can accuse me of being liberal, but it makes more sense to me to say that everyone pays a 18% flat tax and call it a day. Warren Buffett's taxes are then pretty much the same as mine and the same as the people making much less than you and I. Then it's equitable. I simply don't think that can be acheived with the progressive Fair Tax. The middle class will bear most of the burden as a percentage of their income, just like they do under the current system.
Where are you seeing a progressive component in the Fair Tax? Everyone pays the same percentage. If some pay more money, its because they purchased more goods, but that's still the same percentage. There is no progressive component in the Fair Tax. It's a flat sales tax.
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That never happens. You need to think about who pays the taxes and what they do when you raise their taxes. I.e., it isn't going out and continuing their spending patterns.
you cant say revenue never increases when taxes go up. thats lunacy. when you do, your blending different taxes and the revenues they create.
1915-1916 income tax rates went up, income tax revenue tripled. (i used it because it was the first increase i could find using google)
to go from 0% sales tax to 1% sales tax, sales tax revenue increases.
also over all tax revenue will almost always go up with a general GDP increase, but revenue/GDP ratio will drop with tax cuts.
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Where are you seeing a progressive component in the Fair Tax? Everyone pays the same percentage. If some pay more money, its because they purchased more goods, but that's still the same percentage. There is no progressive component in the Fair Tax. It's a flat sales tax.
They have a carveout for low income folks. They exempt a certain amount from the Fair Tax. As you spend more money, your effective rate increases. Everyone will not pay the same percentage of total spending.
The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive.
LINK-FairTax.org (http://www.fairtax.org/site/PageServer?pagename=about_faq_answers)
I thought you researched this?
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They have a carveout for low income folks. They exempt a certain amount from the Fair Tax. As you spend more money, your effective rate increases. Everyone will not pay the same percentage of total spending.
LINK-FairTax.org (http://www.fairtax.org/site/PageServer?pagename=about_faq_answers)
I thought you researched this?
The PREbate goes to everyone, not just lower income. There is a progressive portion in the 9-9-9 with empowerment zones, but the Fair Tax is applicable equally. I'm not worried about effective tax rates. Effective tax rates are fluid, people's pay changes, there are uncommon purchases made at times, etc. I'm worried about actual tax rates. You're starting to sound like you believe in spreading the wealth out of fairness.
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I'm not worried about effective tax rates. Effective tax rates are fluid, people's pay changes, there are uncommon purchases made at times, etc. I'm worried about actual tax rates.
i agree with that
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to go from 0% sales tax to 1% sales tax, sales tax revenue increases.
It's actually a lot more complex than that, and the outcome therefore much more uncertain and so a huge creator of divisive arguments between people who are all fundamentally well-intentioned (Also between various sleazy liars too, but this isn't a Democrat board).
What you say is true IF the sales and pre-tax price of the goods remain constant. However, in the real world, that 1% increase raises the price of the goods to the end consumer by 1%, which changes buying behavior, and in a competitive market, possibly pricing behavior.
Ignoring the sliding frame of reference for value that inflation causes for now, on the buying side, that increase may lead to lower consumption by the consumers, which could even result in a loss of revenue.
On the pricing side, if the sellers have enough profit margin to support it, they may cut prices by 1% or otherwise try to neutralize the increase in the end price (Group discounts, etc.), and if the sellers succeed in keeping their sales constant through that, it would result in no net gain in revenue.
The classic Sim City game provides a great analog of what happens when you try to screw around with effective tax rates...too low and the problems get out of hand because you can't maintain infrastructure and fire/police services, so everyone leaves your sucky town and the tax revenues fall; too high and the Sims start moving out of town (Searching for alternatives to paying their taxes) and your tax revenue plummets as well.
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Liberals and liberal economists try to use that "effective tax rate" bullshit as a means to say people aren't paying their "fair share". I don't buy it. Neither does this "obvious" dumbass:
http://video.cnbc.com/gallery/?video=3000049765#
...but what does he know, he's just the founder and CEO of FedEx.
I'm going to use improper English here to make a point, but we have GOT to get our tax system down to where it belongs, the individual, and stop playing the damn shell game of taxing corporations, who pass them on to us, on top of our income tax. We're losing jobs for many of reasons, but one is we have the highest damn corporate tax rate in the industrialized worldand no, I don't give a damn about GE and their sweetheart Obama deal, I'm talking about businesses in general. The GE BS is part of the problem. Remove the loopholes by ending the corporate tax rate.
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It's actually a lot more complex than that, and the outcome therefore much more uncertain and so a huge creator of divisive arguments between people who are all fundamentally well-intentioned.
What you say is true IF the sales and pre-tax price of the goods remain constant. However, in the real world, that 1% increase raises the price of the goods to the end consumer by 1%, which changes buying behavior, and in a competitive market, possibly pricing behavior.
Ignoring the sliding frame of reference for value that inflation causes for now, on the buying side, that increase may lead to lower consumption by the consumers, which could even result in a loss of revenue.
On the pricing side, if the sellers have enough profit margin to support it, they may cut prices by 1% or otherwise try to neutralize the increase in the end price (Group discounts, etc.), and if the sellers succeed in keeping their sales constant through that, it would result in no net gain in revenue.
The classic Sim City game provides a great analog of what happens when you try to screw around with effective tax rates...too low and the problems get out of hand because you can't maintain infrastructure and fire/police services, so everyone leaves your sucky town and the tax revenues fall; too high and the Sims start moving out of town (Searching for alternatives to paying their taxes) and your tax revenue plummets as well.
i absolutely loved playing sim city
and i agree with what your getting at up above. easier said "when changes rates, there are changes in the tax base, and that affects the revenue total"
BUT, people who say "when you lower tax rates, revenue always goes up" and vice versa "when you raise tax rates, revenue always goes down" are either lunatics or lying. thats what i was getting at.
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Liberals and liberal economists try to use that "effective tax rate" bullshit as a means to say people aren't paying their "fair share". I don't buy it.
yes, there was an email back n forth with my state congressman and some dolt throwing effective tax rate numbers into the argument and my congressman rebutted with a stupid "well you see things your way and ill see things my way" personally i think it hurt him. he should have called out the reality of what the dolt was saying and WHY he was using "effective" rates. dolt's piece (http://mankatofreepress.com/letters/x1225303385/Your-View-Cornish-should-fight-for-the-lower-95-percent)
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i absolutely loved playing sim city
Me too! The sweet spot for the tax rate seemed to be 7% or under, FWIW.
And Rebel, "Effective tax rate" is a legit and useful term as long as you're not dealing with con artists (Such as Libs and DemonRats, but also a lot of corporate lobbyists too), since with our "Progressive" (cough) income tax scheme, only a tax accountant would have a clear idea what someone was actually paying given just their income and their tax bracket. It's very easy to misuse because the term isn't necessarily limited to just the income taxes involved, but can roll in FICA (which isn't progressive at all, but does have a roof on the amount from which it is collected), and even totally extraneous bullshit like estimated annual sales, use, excise, and other transactional taxes.
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The PREbate goes to everyone, not just lower income. There is a progressive portion in the 9-9-9 with empowerment zones, but the Fair Tax is applicable equally. I'm not worried about effective tax rates. Effective tax rates are fluid, people's pay changes, there are uncommon purchases made at times, etc. I'm worried about actual tax rates. You're starting to sound like you believe in spreading the wealth out of fairness.
Yes, just like the current income tax rates go to everyone, too, up to a point. The more you spend, the closer your rate gets to 30%. It's the way the math works. There will STILL be some people who spend less than the prebate and end up paying no federal taxes, just like there are people under the current system that don't pay any federal taxes. There will be some that spend 50% more than the prebate and their effective rate will be 10%. There will be some that spend 100% over the prebate and their rate will be 15%. Then there will be those that spend a ton (because they have a ton) and their rate is very close to 30%. That's progressive taxation. They admit this on their web site and here you sit, denying it, or at least misunderstanding it.
And you've been sounding like you simply don't know what you're talking about. It's painfully obvious you haven't researched it, aren't capable of doing basic math, and talk out of your ass even when provided links to the Fair Tax web site. I certainly hope you're not the typical Fair Tax supporter and that others who support it are at least familiar with it and know how it works and can do the math.
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Jeeze, guys, put the knives away, save it for the Democrats.
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Erasmus, I'm back! Heh. I had a lot on my plate yesterday and this morning. Work before play.
I haven't had a chance to read all the posts to bring me up to speed but I did a quick scan and I need to clarify something I posted;
No, I don't believe the builders taxes are what they are talking about in the 22% embedded tax. It goes further than that.
Take for example the lumber used to build the home. It wasn't always lumber. At one point it was a tree on someone's land and had to be purchased, cut down, hauled off, taken to mill, shipped to the lumber yard then ultimately sold to the builder.
In that process there were taxes added along the way that EVERYONE pays for as they move along but in the end the only person paying all those taxes (and other embedded costs like permits) is the person who paid to have the home built.
Yeah, you might include the paltry sum of taxes the builders paid. (I know it's not paltry if coming out of your pocket) but there are a whole slew of things that go into building a home. The lumber was the easy pick. All the rest of them have the same 'road to travel' so to speak. A lot of that could be removed.
KC
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http://videosift.com/video/Not-a-Single-Person-Alive-Knows-How-to-Make-a-Pencil
Milton Friedman explains how there is not a single person on earth who knows how to make a pencil.
You may or may not find this video relevant. I think it fits.
KC
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Erasmus, I'm back! Heh. I had a lot on my plate yesterday and this morning. Work before play.
I haven't had a chance to read all the posts to bring me up to speed but I did a quick scan and I need to clarify something I posted;
No, I don't believe the builders taxes are what they are talking about in the 22% embedded tax. It goes further than that.
Take for example the lumber used to build the home. It wasn't always lumber. At one point it was a tree on someone's land and had to be purchased, cut down, hauled off, taken to mill, shipped to the lumber yard then ultimately sold to the builder.
In that process there were taxes added along the way that EVERYONE pays for as they move along but in the end the only person paying all those taxes (and other embedded costs like permits) is the person who paid to have the home built.
Yeah, you might include the paltry sum of taxes the builders paid. (I know it's not paltry if coming out of your pocket) but there are a whole slew of things that go into building a home. The lumber was the easy pick. All the rest of them have the same 'road to travel' so to speak. A lot of that could be removed.
KC
Right, and that whole chain of federal taxes consists of nothing materially more than payroll and income taxes. So, A stick of wood that went from tree to lumber mill to lumber yard to builder will have a couple of layers of taxes, taxing the product at different rates, assuming that ALL of the companies in the chain are having a year in the black and paying a crapload of taxes. I still question the usefulness of the 22% number in calculating any savings whatsoever. Here recently, it's very likely that EVERY company in the supply chain is having a bad year with respect to housing products and that 22% might be 15% or 10%, or in the case of cars, could be less than 10%, since steel makers and the car companies aren't doing so hot now. I think with the mess that is our current system, you'd need perfect information for every company along the supply chain, updated at least annually, to calculate that rate. The 22% has been around quite some time at FairTax.org, it could very well be from the height of the internet bubble. I honestly don't know. I do know that it isn't 22% year-in and year-out for every single final consumable product. Using 22% is so high level that it is like saying that everyone in the US pays 22% in income taxes annually, knowing full well that lots of people don't pay anything.
On top of this issue, I'd like to know of the payroll taxes and income taxes I pay, how much will I keep and how much will my company keep? If my gross salary is $150,000, and I pay $22,000 in federal income taxes out of that, and pay my 7.65% up to the cap (after which I pay 1.something%). The employer pays the other 7.65% up to the cap and the 1.something% afterwards. If the company decides to give me my ENTIRE $150,000, then the company has NO savings on payroll and income taxes and thus the consumers will pay what used to be taxes now as labor costs. If the company decides to keep some of the money (which will, I'm sure, be negotiated company by company), say the 7.65% that they kick in and half of the income taxes, then the company can only reduce the price of goods a bit more. Has the 22% been checked to make sure we're not double counting? I have no idea. It seems like Fair Tax proponents are talking out of both sides of their mouth - products will be cheaper and you'll have your whole paycheck to take home. Can't have it both ways, because that's double counting the savings.
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Has the 22% been checked to make sure we're not double counting? I have no idea. It seems like Fair Tax proponents are talking out of both sides of their mouth - products will be cheaper and you'll have your whole paycheck to take home. Can't have it both ways, because that's double counting the savings.
That is where I have to trust they've ran the numbers correctly. I can't do it all. That's not my specialty. All I can do is advocate for a program I've read about and really like.
As to talking out both sides of my (our) mouths, I haven't seen anywhere where the Fair Tax proponents have claimed products would be cheaper. All of us have said the price would actually go UP but not by much.
If you haven't read the book(s) on the Fair Tax I would highly recommend you do that to see if it answers your questions. They are in paperback and easy to find.
They freely admit there will need to be some things ironed out but overall I think it is a far superior plan to what we've been operating under.
KC
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That is where I have to trust they've ran the numbers correctly. I can't do it all. That's not my specialty. All I can do is advocate for a program I've read about and really like.
I'm not positive that they are run correctly, or that they've been updated appropriately.
As to talking out both sides of my (our) mouths, I haven't seen anywhere where the Fair Tax proponents have claimed products would be cheaper. All of us have said the price would actually go UP but not by much.
Pre-Fair Tax prices is what I am referring to - the claim is that they will go down before the Fair Tax is added due to eliminating the 22% embedded tax. Then, others claim that you'll get to keep your entire paycheck. You simply cannot do both 100% at the same time.
If you haven't read the book(s) on the Fair Tax I would highly recommend you do that to see if it answers your questions. They are in paperback and easy to find.
I've perused their web site about a half dozen times now over the past two years, and I'm not convinced that buying a book will help me see the light.
They freely admit there will need to be some things ironed out but overall I think it is a far superior plan to what we've been operating under.
KC
With this I agree. Any new system will have it's kinks. I'm just completely missing how this will be that much superior. I can see marginally reduced compliance costs. I can see the transparency, IF it were advertised at the 30%. But that's about it. I mean, it's revenue neutral, there's not a whole lot to be excited about.
But we can agree to disagree. I in no way question the conservatism or love of country of you or Rebel, or anyone else who supports the Fair Tax. I simply question the math and the unintended consequences.
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I've perused their web site about a half dozen times now over the past two years, and I'm not convinced that buying a book will help me see the light.
I don't know that the book would help you 'see the light' but it might answer some questions you have. Hell, the book might completely drive you away from the idea and that is ok too, it's still a free country.
^5 for the passion in your arguments!
KC
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I don't know that the book would help you 'see the light' but it might answer some questions you have. Hell, the book might completely drive you away from the idea and that is ok too, it's still a free country.
^5 for the passion in your arguments!
KC
Back at ya.
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when you mention "the book"
your talking about the neal boortz book, right?
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I don't know that the book would help you 'see the light' but it might answer some questions you have. Hell, the book might completely drive you away from the idea and that is ok too, it's still a free country.
^5 for the passion in your arguments!
KC
Although I did just get 55 bitch slaps in one day. Did I set a record?
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Although I did just get 55 bitch slaps in one day. Did I set a record?
You'll have to ask that Canadian guy that posts here.
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Although I did just get 55 bitch slaps in one day. Did I set a record?
Not even close, when you can garner hundreds at a whack! :rotf:
(Uh....I think that's happened to me once or twice.......) :lmao:
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I think that I gathered over 50 in one day
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Although I did just get 55 bitch slaps in one day. Did I set a record?
Is that why your bitchass bitchslapped me today and yesterday? Thinking I did it? I don't bitchslap people unless they're trolls. It's something I simply do not do.
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And you've been sounding like you simply don't know what you're talking about. It's painfully obvious you haven't researched it, aren't capable of doing basic math, and talk out of your ass even when provided links to the Fair Tax web site. I certainly hope you're not the typical Fair Tax supporter and that others who support it are at least familiar with it and know how it works and can do the math.
I know exactly what I'm talking about. 23% inclusive or exclusive, I do not give a **** as long as it's across the board and it's the only federal tax I pay. They didn't lie to you, they said it's a 23% tax, which it is. A 23% inclusive tax. It's in the legislation. ...but you stick with the fuken status quo and start talking this shit about the "effective tax rate" etc. Libs love that kind of talk.
No, DAT, it doesn't mean shit. I may not be a tax expert, but I did graduate cum laude with a Bachelor's of Science degree in Business Administration and have a few classes towards my MBA before I had to drop due to personal reasons. Neither businesses nor individuals plan their patterns on a ****ing fluid "effective" tax. That's a term created in the economic world by the equivalent of a Sociologist.
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when you mention "the book"
your talking about the neal boortz book, right?
Yeah, the Fair Tax book by Neal.
It's a really easy read. When I bought it I thought it would be tough to read due to the subject but it goes quickly and is very interesting.
KC
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Yeah, the Fair Tax book by Neal.
It's a really easy read. When I bought it I thought it would be tough to read due to the subject but it goes quickly and is very interesting.
KC
..and if that's not enough, there's "Answering the Critics".
http://www.amazon.com/FairTax-Answering-Critics-Neal-Boortz/dp/0061540463
This plan wasn't contrived in a bar by local drinking buddies, there were millions pumped into a study about how to simplify the tax code, this was their answer. Until we get a "fair" tax structure, I.e. one where EVERYONE has skin in the game, this nation is toast and de Toqueville or Tytler, whoever you want to contribute the prophecy to, will have been right. I'll add two more that I'd love to see, term limits and the repealing of the 17th Amendment so we can get BACK to being a Republic.
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I'll add two more that I'd love to see, term limits and the repealing of the 17th Amendment so we can get BACK to being a Republic.
H5
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I know exactly what I'm talking about. 23% inclusive or exclusive, I do not give a **** as long as it's across the board and it's the only federal tax I pay. They didn't lie to you, they said it's a 23% tax, which it is. A 23% inclusive tax. It's in the legislation. ...but you stick with the fuken status quo and start talking this shit about the "effective tax rate" etc. Libs love that kind of talk.
More accusations that I'm liberal. Whatever. I don't accuse you of that shit. 30% is not an "effective" rate. It is the rate calculated like most Americans calculate sales tax in their states. The effective rate is actually different, and like the income tax, would have to be calculated on an individual by individual basis, which brings up another point - it will be much more difficult to determine one's effective rate under the Fair Tax unless you save receipts and track used purchases, savings, etc., and add every one up at the end of the year for every penny you spend.
No, DAT, it doesn't mean shit. I may not be a tax expert, but I did graduate cum laude with a Bachelor's of Science degree in Business Administration and have a few classes towards my MBA before I had to drop due to personal reasons. Neither businesses nor individuals plan their patterns on a ****ing fluid "effective" tax. That's a term created in the economic world by the equivalent of a Sociologist.
I have a BBA in accounting and a Masters in Taxation and a CPA license, and I spend 5 years in public accounting doing tax work, and I still do tax work on the side. I've done north of a few thousand tax returns, about half of which business returns. And you don't have to slightest @#%!ing CLUE if you think that nobody pays attention to their effective rate. You're talking 100% out of your ass. For every one of our businesses we provided them with a report showing them their effective rate, because they wanted to know. Investors in public companies also want to know, so it's typically a financial statement disclosure. If you're buying or selling a business and trying to assign a value to it, effective rate absolutely mathematically matters. If you're doing specific tax planning, sometimes it's the marginal rate that matters, sometimes it's the effective rate. One uses both.
The Fair Tax has two marginal or stated rates, depending on if you're using the customary sales tax calculation (30%) or the tax-inclusive rate (23%), which nobody in America uses. Then different people will have different effective rates, even on what they spend, because there is (despite your obstinate denial in the face of links provided) a progressive component to the tax. On the low part of the scale, under the proposed "Fair Tax" there WILL be people who have effective rates of 0%. There will be lots more people who have effective rates between 0% and 30%. This is simple, provable FACT which is DISCLOSED on the Fair Tax web site.
None of this is rocket science, but you're willing to stay ignorant about it I suppose. Whatever. You haven't sold me in the slightest on it, because you can't answer questions about it, deny facts from their own web site, get basic accounting facts DEAD WRONG, and you don't appear to even want to learn more about it.