How about this for a tax plan.

[neil0311]

Originally Posted by killer2021

Oh yea. I was reading the fair tax entry and it sounds amazing

Unfortunately, it will never pass, at least not with this government in place. You see it's truly a fair tax, so it doesn't do what some in our government feel taxes should do.....reward or punish people for behaviors or success.

Many in our government don't want fair; they want a way to reward people and punish others.

[wheelsup]

Originally Posted by bls5555

I don't know anything about Chinatown in NYC but that seems to me to be a pretty unimportant concern for all the rest of the cheats that would HAVE to pay taxes under this system.

Here's a good example. I need my mechanic to install a transmission. Quote is $600 in labor + 30% tax so $900.

Instead I pay him $750 in cash and he doesn't report any of it. We both make out.

This happens every day. Not only that but you can bet it will increase exponentially if we are paying a 30% tax on things. Maybe that will be a good thing? Then people won't rack of debt.

You might disagree but there are studies in the book that state it is true. Im not saying you need to agree or disagree but the fair tax people have done a tremendous amount of leg work. So I would generally tend to believe them.

Here's why I don't believe it.

Let's say you're a retail store. You sell tools made out of steel. Here is the supply chain:

Iron ore mine sells $1 in iron ore to a steel refinery. Cost: $1.30 ($1 + $0.30 tax)
Steel refiner refines steel, sells $2 to Ampro tool company. Cost $2.60 ($2 + $0.60 tax)
Ampro tool company makes $4 wrench out of steal to sell to retail store. Cost: $5.20 ($4 + $1.20 tax)
Retail store sells $8 wrench to customer. Cost $10.40 ($8 + $2.40 in tax)

$4.50 in tax on an $8 item. Much more than 30% wouldn't you say?

[bambam0084]

Originally Posted by wheelsup

Here's a good example. I need my mechanic to install a transmission. Quote is $600 in labor + 30% tax so $900.

Instead I pay him $750 in cash and he doesn't report any of it. We both make out.

This happens every day. Not only that but you can bet it will increase exponentially if we are paying a 30% tax on things. Maybe that will be a good thing? Then people won't rack of debt.



Here's why I don't believe it.

Let's say you're a retail store. You sell tools made out of steel. Here is the supply chain:

Iron ore mine sells $1 in iron ore to a steel refinery. Cost: $1.30 ($1 + $0.30 tax)
Steel refiner refines steel, sells $2 to Ampro tool company. Cost $2.60 ($2 + $0.60 tax)
Ampro tool company makes $4 wrench out of steal to sell to retail store. Cost: $5.20 ($4 + $1.20 tax)
Retail store sells $8 wrench to customer. Cost $10.40 ($8 + $2.40 in tax)

$4.50 in tax on an $8 item. Much more than 30% wouldn't you say?

I have never seen so much misguided(purposely) **** in my life. First off 30% of 600 isnt 300 so your 900 total should be 780. I guess in your china town world you just saved 30 bucks and risked jail time over it. Smooth move.

Now on to your 30% figure. Thats applying the fairtax in an exclusive fashion in which case your iron ore is 77 cents then tax it 30% then you have you 1$ total. It, however, an inclusive tax. 77 cents to the business 23 to the government. Its a 23% rate of the SHOWN price. What you will see is what you will pay. The tax is already figured in.

Also the fair tax goes much deeper than that. Far beyond just the end product of each company. It eleminates their need to pay and match employee social security and medicare. It also eliminates corporate taxes! It cuts the operation costs of companies there by allowing the to cut their prices at the consumer level. And yes this will happen. Market share is huge to companies and if they can cut cost and still make money they will.

The fair tax was designed to be a simple, more fair, and stimulative replacement to our current sytem of taxation. It you think in terms of the fair tax as an addition to our current system then ok choose to be ignorant to what it is really all about.

However if you would like to educate yourself go to www.fairtax.org and you will find that it promotes investment, savings, and all things that would help to right our economy and better our lives.

-bam

[wanneroo]

I'm all for fairtax just for the simple reason it cuts the tax code from almost 60000 pages to less than 200, gets rid of much of the irs, and chops off millions of lawyers, bureaucrats, lobbyists and accountants all sucking the teat of an overly complicated tax code.

[70Ford]

Originally Posted by bambam0084

I have never seen so much misguided(purposely) **** in my life. First off 30% of 600 isnt 300 so your 900 total should be 780. I guess in your china town world you just saved 30 bucks and risked jail time over it. Smooth move.

Now on to your 30% figure. Thats applying the fairtax in an exclusive fashion in which case your iron ore is 77 cents then tax it 30% then you have you 1$ total. It, however, an inclusive tax. 77 cents to the business 23 to the government. Its a 23% rate of the SHOWN price. What you will see is what you will pay. The tax is already figured in.

Also the fair tax goes much deeper than that. Far beyond just the end product of each company. It eleminates their need to pay and match employee social security and medicare. It also eliminates corporate taxes! It cuts the operation costs of companies there by allowing the to cut their prices at the consumer level. And yes this will happen. Market share is huge to companies and if they can cut cost and still make money they will.

The fair tax was designed to be a simple, more fair, and stimulative replacement to our current sytem of taxation. It you think in terms of the fair tax as an addition to our current system then ok choose to be ignorant to what it is really all about.

However if you would like to educate yourself go to www.fairtax.org and you will find that it promotes investment, savings, and all things that would help to right our economy and better our lives.

-bam

From that site: Myrick: Abolish the income tax, other taxes and the IRS

Right. Just abolish the IRS. Because everyone will pay their taxes without a watchdog to make sure they pay their taxes. Just like we don't need a watchdog now, we won't need one then.

To think we would, would be so misguided.

*************
Just because you hate something, doesn't mean it isn't needed.

[bambam0084]

Originally Posted by 70Ford

From that site: Myrick: Abolish the income tax, other taxes and the IRS

Right. Just abolish the IRS. Because everyone will pay their taxes without a watchdog to make sure they pay their taxes. Just like we don't need a watchdog now, we won't need one then.

To think we would, would be so misguided.

*************
Just because you hate something, doesn't mean it isn't needed.

I am a consumer of goods. I do not sell anything. It is up to the retailers to apply and collect the fairtax. I doubt wallmart or target or any other major company is going to be willing to cut you a break and not tax you. Now joe the car guy or tim the lawn mowwing man may just charge you cash with no tax, but dont they already do that now?

This system will stimulate growth, it actually promotes that you invest!!

Unless of course you like our current progressive tax code...

"A heavy progressive or graduated income tax", straight from the communist manifesto on how to transition to a communist society.

[colleeng47]

Originally Posted by janetvj

You are talking about a national sales tax. If you handled it like state and local sales tax, it could also become quite complicated. For example, to be fair to those who make less money, you would have to exempt things like groceries, medical items like prescriptions and OTC drugs, and other necessities. You would also most likely have exceptions, such as sales for resale, in order to not pyramid the tax to the point that a consumer would never be able to afford the item. If not, imagine if at each step of the process a tax would apply - let's say you were buying a chair. If the guy who chopped down the tree had to collect tax on the sale of the wood to the lumber yard, and then the lumber guy had to collect tax on the sale of the lumber to the lumber finisher, and then he collected tax on the sale to the chairmaker, and then he collected tax on the sale to the wholesaler, and he collected on the sale to the retailer, by the time you bought the chair the price would be through the ceiling.

If you talk to experts in the state and local tax area, most will tell you that sales and use tax law is a lot more complicated than it seems on it's face. Not that I think this is necessarily a bad idea. Just that it isn't as simple as it seems.

Sales and use tax doesn't have to be complicated. I worked for the NJ Division of Taxation and re-sale items were taxed by the end user. So I'm buying wool to make blankets for sale, I don't pay sales tax on the wool, but the person who buys the blanket does. You would get a certificate that you would present to your suppliers which keeps you from paying taxes on your supplies used for re-sale.

This sounds like a great idea, actually. Think of how easy our lives would be without all the records necessary to file income taxes?

[chuck22b]

Originally Posted by colleeng47

Sales and use tax doesn't have to be complicated. I worked for the NJ Division of Taxation and re-sale items were taxed by the end user. So I'm buying wool to make blankets for sale, I don't pay sales tax on the wool, but the person who buys the blanket does. You would get a certificate that you would present to your suppliers which keeps you from paying taxes on your supplies used for re-sale.

This sounds like a great idea, actually. Think of how easy our lives would be without all the records necessary to file income taxes?

So, basically only consumers pay taxes? And the businesses don't? I want a business license so I can buy all I need and hoard those certificates!

Anyhow, isn't that already how it is?

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

Study says most corporations pay no U.S. income taxes | U.S. | Reuters

Also, relative to income, poorer people spend more of their incomes on consumption than the wealthy. Essentially, the "fair" tax, allows the wealthy and the rich to get rid of business costs at the expense of the poor.

I'm more for the progressive tax, income AND sales tax.... the wealthy and businesses already find ways to evade income and corporate taxes. With taxes solely directed toward consumers, they'd be able to runaway scott free.

Those who keep on saying that it'll improve investments... sure... there are two sides to the equation (supply AND demand). Perhaps it'll be cheaper to run a business, but how much demand is going to be spurred when there aren't as much consumption?

-chuck22b