My fear is that a national sales tax would be "phased in"
rather than a radical full replacement advocated by the
Fair Tax people.

Then it would just be another tax in an already busy tax
system.

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"ed" <edcosoft[at]sbcglobal.net> wrote

- quote -

Let me take a moment to post a part of what I wrote for the
Athens Banner Herald back in April with regards to the
"prebate", and the effect of a national sales tax on a
specific family unit:

"We take a single parent of two, earning $20,000 a year, or
just $9.61 an hour. Under the existing income tax system,
they'll have $1,530 withheld for Social Security and
Medicare, no federal income tax needs to be withheld because
in 2007 they`ll receive a $256 child tax credit that will
erase the income tax amount, plus they'll receive $3,438 of
Earned Income Tax Credit and an additional child tax credit
of $1,305 and for 2007 a $50 telephone excise tax credit.
Their federal refund under the existing income tax system
would be $4793. Subtract from that the Social Security and
Medicare withheld and their net tax refund is $3,263.
Please note that the total family after tax disposable
income is $23,263, comprised of $20,000 gross wages, less
$1,530 of payroll taxes, plus the $4,793 refund.

Compare that with the proposed national sales tax. Same set
of facts. The sales tax rebate, according to fairtax.org,
gives the parent $3,949. In addition to their gross wages
of $20,000 they'll have $23,949 to spend, and you know a
single parent of two will spend every cent of that to raise
their kids. Note that the $23,949 is pre-tax. Take out the
23% inclusive tax (total of $5,508) and they have $18,441
after tax to spend. That's a net tax cost of $1,559
comprised of the 23% inclusive tax of $5508 less the rebate
of $3,949."

I'll note that this parent's after tax disposable income
decreased by $4,822 under the national sales tax program.
Maybe that didn't make it to the Boortz book.

It's fine to promote a book the way Boortz and Linder have,
but don't promote a tax program using the same methods.
Let's at least be honest about how it impacts people,
families, the economy, etc and so on.

- quote -

.....and services....all services.

Continuing with what I wrote a while back:

"Ah yes, 'they can buy used' chimes the pro 'sales taxers'.
Ever heard of 'used' rent? How about 'used' utilities?
'Used' gas? I know, they can buy 'used' food. The reality
is that some purchases can be used, but a majority of
expenses will be for new goods and services. In fact, for
the so-called 'fair' tax to not impose a tax cost on the
above single parent, they'll need to spend about 28.5% of
their disposable income on used goods."

- quote -

Look, a national sales tax has to be paid by the consumers,
who get the money to pay that from, in a large part, wages,
salaries and profits from business. Their salary and wages
comes from the gross price charged (and collected) from the
sales of goods and services and profits come from those same
gross sales of goods and services less all business expenses
(including I'll add, employee wages). How can anyone
honestly claim to have "removed" the tax from the end price
of goods and services when that is precicely where the money
comes from to pay the national sales tax that the employee
and business owner will end up paying on their personal
expenditures?

--
Paul A. Thomas, CPA
Athens, Georgia

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In my Post which went up Monday, August 6, I offered a link
for more info on the FairTax. Apparently, that link has
been converted into a commercial site, with sponsored links
to Amazon.com, etc. Mea culpa.

Here's a new site URL, for "FairTaxGroups" -- which offers a
clickable link to obtain a "Brief Summary of the FairTax
plan" at no charge:

http://fairtaxgroups.com/

Bill

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d <edcosoft[at]sbcglobal.net> wrote:

- quote -

Do you seriously expect wholesale and retail prices to
eliminate this 'silent VAT'. Untaxed management bonuses
should soar in the few few year of this 'unfair tax'.

- quote -

Where is the profit? It will not eliminate the auditors.
They should be in high demand as sales tax auditors.

- quote -

The automatic transmission was invented in the 20's. The
automobile industry didn't want to pay royalties and waited
for the patent to run out. Not to mention that the
automatic transmission getting lower gas mileage than a
stick shift.

As for the electric car, the problem was never the car.
The problem was distances and charging facilities.

Look at wind power and you will find some of the people
supporting consumption taxation, don't want windmills
within viewing distance of their house.

The problem remains that this is a society that is driven by
consumption. Tax something and you get less of it. Tax
consumption and watch the economy crumble.

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d <edcosoft[at]sbcglobal.net> wrote:

- quote -

Very good points and well put.

--
To email me directly, remove CLUTTER.

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se...[at]panix.com (Seth) wrote:
- quote -

These micro-economic negative responses do not reflect much
undestanding of the basis for the Fair Tax. Notably they
ignore the offsetting elimination of Social Security tax,
Federal income tax, AMT, excise taxes, and the cash credit
that forms a deducible, virtuality eliminating any net tax
on the poor. Also, the tax is levied only on new goods and
stripping our economy of the income tax layers woulld
immediately reduce the value of all new goods so the actual
cost would rebound when the FT is added. The actuall
percentage varies depending on whether you add it to cost,
or express it as a percentage of total sale. The book
adequately addresses all the negatives and might be
interesting reading, and certainly a must prior to
naysaying.

It should be considered that all our present taxes (SS,
FIT,AMT, etc) are already burried into the cost of goods
sold, like a silent VAT.

I would doubt any transition is smooth, but we should be
able to survive a few bumps with the right mind-set. But
first we should have an open mind to change in order to
profit from it. Look where we might be now with energy
conservation efforts had we expended as much time, money and
effort to develope a functioning electric car 80 year ago as
we did on the automatic transmission.

ed

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sethb[at]panix.com (Seth) posted:
- quote -

Everyone who has ever owned a boat knows the wisdom of the
observation that they simply bought a "hole in the water --
down which money flows."

Getting back to the FairTax, Phil Marti asked if there had
been a bill introduced in Congress. The answer is, "Yes, as
there has been for the last several Congressional sessions."

This plan has more involved, than a simple shift to a sales
tax. Cong. Lindner of GA and radio commentator Neal Boortz
co-wrote a high-selling book on the subject, published last
year, I believe.

Anyone interested or curious can find info at
http://www.fairtax.com.

Bill

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- quote -

ZERO? I seriously doubt that. For example, the Viking Yacht
Co. reported that its sales fell 84 percent over two years
to $16 million, which is somewhat more than zero.

<http://seattlepi.nwsource.com/local/...atshome11.html
Also, the luxury tax was TEN percent on new boats costing
more than $100,000, _not_ 30 percent.

--
D.F. Manno | dfmanno[at]mail.com

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"Dick Adams" <rdadams[at]panix.com> wrote

- quote -

Or.....they could just buy things for their business....as
supposedly business purchases are exempt from the 30% tax.

- quote -

Naaaaa.....people will still want money.

What would happen though, is a resurgence of personal
financial statements, prepared and/or audited by CPA's for
loans of all types.

- quote -

Nothing so sinister......just the Dems.

--
Paul A. Thomas, CPA
Athens, Georgia

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- quote -

"Starting next year, yachts have 30% sales tax." Yacht
sales peaked that year, then hit 0 when the tax went into
effect, and stayed there.

Seth

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As an optimist, I should be looking at the bright side of
the Fair Tax. It could plant seeds for the rebirth of the
Smuggling and Moonshine industries and a resurgence of
organized crime. Best idea since Prohibition.

OTOH to avoid this 30% federal sales tax on the the retail
price of goods and services, people could start growing their
own crops, raising their own animals, trapping rabbits, and
poaching deer in residential neighborhoods. It would be a
rebirth of the self-reliant way of American life ala 1807 or
a 200 year setback.

Since income would not be tax, we could also observe a
massive expansion of the barter system with bathtub gin
being used in lieu of currency.

Who is supporting this "return to yesteryear" tax? It's
the National Taxpayers Union founded by the author of "The
Soveriegn Individual". Does Quasimodo ring a bell?

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- quote -

I will start to consider all the "concerns" when someone
explains to me how they will handle muni bonds. There are
some constitutional questions about whether or not the feds
CAN tax them and there are more political questions about
that possibility. In addition to all the other dislocations,
I doubt that my property taxes would stay the same if muni
bonds had to pay roughly the same interest as corps and
others. I don't see a whole lot of reason to suspect I would
be better off in the final analysis.

Moderator:
Don't worry about property taxes with a consumption tax,
we'll all be better off selling our property and migrating
to a countries with low consumption taxes. Hell, such a
tax would make being a shepherd in Andorra look good. <g
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"Dick Adams" <rdadams[at]panix.com> wrote
- quote -

On my CD's?

Yee Haw......

--
Paul A. Thomas, CPA
Athens, Georgia

Moderator:
This just proves my point that the wealthy support
consumption taxation. <g
Maybe someone can recall the details of the consumption
tax that caused high unemployment in the yacht industry.

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Dick Adams <rdad...[at]panix.com> wrote:

- quote -

Well said, Dick.

Moderator:
Merci beaucoup. I should take this to the unmoderated
"nitwit stockyard" where it is acceptable to name names
and I could vent on the unhousebroken presidential
candidate who supports this drivel. But then I'd have
to go there to read the replies. Fortunately he couldn't
win even he was allowed to count the votes in his bathroom.

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"Phil Marti" <prm20...[at]verizon.net> wrote:
- quote -

C'mon Phil, give the Moderator a break. There is already an
ongoing discussion of the Flat tax on misc.taxes.unmoderated
with 397 responses (and growing!). If you want to "discuss"
the pros and cons of the proposal take it there.

Moderator:
Thank you for your consideration, but I haven't even read
'nitwit central' in a few years.

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Phil Marti wrote:

- quote -

Thank you, Phil. You have opened the door for me to
express my contempt for the alledged "Fair Tax".

What a great idea it would be to invert the U.S. taxation
system?

People with incomes below current minimum tax levels would
pay additional taxes without additional income.

High income taxpayers would be paying a fraction of the
taxes they currently pay. Plus they could enjoy
investments with zero capital gains taxes.

Without the deduction for mortgage interest, housing values
would drop decreasing the net worth of the middle class.

Just think about paying additional taxes on your retirement
savings.

We live in a consumption-based society. So a consumption
tax would would slow down the economic engine of our society
and that would increase both unemployment and interest
rates. We could go back to the days of 14% interest rates!!

Dick

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Phil Marti wrote:

- quote -

The short ``cons'' argument is that you can't move the point
of taxation to later in the earn-spend cycle without taxing
somebody's savings twice (once as earned, under the old
income tax ; and then later again as spent, under the new
fair tax).

So it amounts to instantly confiscating (say) 25% of your
savings, for people with (cash or equivalent) savings, when
it's imposed.

That's a heavy political headwind against it.

--
rhhardin[at]mindspring.com

On the internet, nobody knows you're a jerk.

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The Moderator wrote:

- quote -

To borrow from a recent President, that depends on what you
mean by "under consideration." Being a morning C-SPAN
junkie I can tell you that there's popular support for it,
and there is a somewhat organized movement. I don't know
whether a bill is currently pending in Congress, but most
bills addressing taxes get dropped every Congress and never
formally discussed. There is no active consideration in Ways
& Means.

I wouldn't find a discussion of the pros and cons of a
consumption tax out of place in this forum. I probably
wouldn't participate, but it wouldn't bother me if people
wanted to.

Phil Marti

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