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And your point is? I still have yet to see anything in your argument that would logically suggest a national sales tax would create a $300,000 car. Sure things may become slightly more expensive under the fair tax, but that is offset for everyone except the wealthy by the increased purchasing power resulting from a lack of income tax.
Ok, I drill water wells. Last year I spent about $240,000 to my main supplier. My insurances were about $26,000. I wrote it all off my bottom line. If I could not have, it would have been on the cost of the wells to the customers. Plus, the cost to me would have been more because my suppler and insurance company also wrote their costs off. I just picked two bills, there are many more. Why would any one invest in a business if they could not write off the expense??
Ok, I drill water wells. Last year I spent about $240,000 to my main supplier. My insurances were about $26,000. I wrote it all off my bottom line. If I could not have, it would have been on the cost of the wells to the customers. Plus, the cost to me would have been more because my suppler and insurance company also wrote their costs off. I just picked two bills, there are many more. Why would any one invest in a business if they could not write off the expense??
How does writing it off your bottom line help you in regard to taxes? Does it allow you to claim less income and as a result pay less taxes? Or is there another reason you expense insurance and supplies. Additionally why do your suppliers write off their costs in regard to taxes?
What if (gasp) your income was and your suppliers incomes were not taxed?
Ok, I drill water wells. Last year I spent about $240,000 to my main supplier. My insurances were about $26,000. I wrote it all off my bottom line. If I could not have, it would have been on the cost of the wells to the customers. Plus, the cost to me would have been more because my suppler and insurance company also wrote their costs off. I just picked two bills, there are many more. Why would any one invest in a business if they could not write off the expense??
You are missing a lot.
Nothing to write off because you are not taxed on income.
Upi drill a well.
For all material, labor etc let's assume your cost is $1,000.
You sell the well for $1,200 making yourself $200 profit.
When you sell the well you sell it for $1,200 + $324 = $1,524.00.
The $324 is the tax, you pay this to the government.
Tax is paid by the end user or the consumer and not you. That $200 that you made is yours and it isn't taxed until you spend it.
There are no write off's for you because what you make is your business.
How does writing it off your bottom line help you in regard to taxes? Does it allow you to claim less income and as a result pay less taxes? Or is there another reason you expense insurance. Additionally why do your suppliers write off their costs in regard to taxes?
What if (gasp) your income was not taxed?
Because that is the way the system is set up. Why would anyone invest without it being that way??? And if people do not invest, there is no commerce.
Nothing to write off because you are not taxed on income.
Upi drill a well.
For all material, labor etc let's assume your cost is $1,000.
You sell the well for $1,200 making yourself $200 profit.
When you sell the well you sell it for $1,200 + $324 = $1,524.00.
The $324 is the tax, you pay this to the government.
Tax is paid by the end user or the consumer and not you. That $200 that you made is yours and it isn't taxed until you spend it.
There are no write off's for you because what you make is your business.
No, I would have ALL of the costs up to the well. It would be passed to me from every supplier. Not to bring up, it takes over one million dollars in equipment to drill a well. Now, it is written off in deprecation over years.
No, I would have ALL of the costs up to the well. It would be passed to me from every supplier. Not to bring up, it takes over one million dollars in equipment to drill a well. Now, it is written off in deprecation over years.
I know how much it costs to drill a well I was using the $1,000 to make it simple.
Let's say the material to drill a well cost you $800 today. That $800 cost INCLUDES the costs of everyone's income taxes up to the point you pick it up. Since nobody pays income taxes anymore, now it is all paid for by the end user, that same material would cost considerably less than $800... maybe $600 which imagine what lowered costs like that would do for the USA's exporting ability.
Boeing would kick Airbus right in the ass is what and you would see lots and lots of jobs come back to our shores.
You don't have depretiation anymore becuase you are not taxed on what you make just what you spend..
No, I would have ALL of the costs up to the well. It would be passed to me from every supplier. Not to bring up, it takes over one million dollars in equipment to drill a well. Now, it is written off in deprecation over years.
Again a fair tax is not a VAT tax. You say you would have all the costs up to the well from every supplier, but that is not true. You currently have all of the costs of the tax burden on supplies minus deductions, but if the fair tax was implemented you would not have any of the costs from your suppliers neither tax burdens or deductions.
Here is an example using the pork industry of how taxes our levied currently at each stage of production.
Feed producer sell feed to hog farmer makes gross deducts and passes net taxes on income costs to himself + other production costs to hog farmer---hog farmer sell hogs makes gross deducts and passes on net taxes on income costs to herself+ other production costs to slaughterhouse---Slaughterhouse sells meat to grocer makes gross deducts and passes net taxes on income costs on himself + other production costs to grocer---grocer makes gross deducts and passes net taxes on income costs to herself+ other production costs to consumer.
As you can see a lot of income tax expenses are being passed along so each party can make a reasonable after tax income. Now lets look at it after the fair tax.
Feed producer sells feed to hog farmer and passes cost of production on No Taxes levied---Hog farmer sells hogs to slaughterhouse and passes cost of production on No Taxes levied---Slaughterhouse sells meat to grocer and passes cost of production on No Taxes levied---Grocer sells meat to consumer taxes levied at final point of sale.
As you can see under the fair tax, tax expenses are NOTpassed on to you from your suppliers unless of course you are the final point of sale.
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