The 9-9-9 Plan

[Erasmus]

..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.

[Rebel]

Go with the Fair Tax, that's fine with me.  Just get your math corrected.

Is it a 23% inclusive tax? Yes or no?

[Erasmus]

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.

[Rebel]

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?

[Rebel]

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.

[Erasmus]

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

[Rebel]

$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.

[Rebel]

I'm down with it one way or the other. The current system is broke.

[Erasmus]

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.

[Rebel]

Ok, what's your solution?

[Eupher]

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.

[Texacon]

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

[Rugnuts]

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?

[Eupher]

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.

[Erasmus]

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.

[Erasmus]

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.

[Texacon]

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

[Texacon]

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!!!

[Rugnuts]

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.

[Erasmus]

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.

[Eupher]

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.

[thundley4]

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.

[Erasmus]

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.

[rich_t]

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.

[Rebel]

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.