The 9-9-9 Plan

[Rebel]

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.

[Rebel]

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.

[Erasmus]

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.

[Splashdown]

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.

[Erasmus]

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.

[DumbAss Tanker]

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.

[Rebel]

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.

[Rebel]

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.

[Texacon]

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

[Rebel]

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.

[Erasmus]

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.

[Texacon]

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

[Rebel]

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.

[Rebel]

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.

[Erasmus]

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

[Texacon]

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

[Texacon]

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

[Rebel]

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.

[Rebel]

I don't think you're getting the "inclusive" part, or maybe you're not understanding it.

[Erasmus]

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.

[Rebel]

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.

[Erasmus]

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.

[Erasmus]

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.

[Rebel]

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.

[Rebel]

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.