posted
Here's what the website has to say in the Research section, though be skeptical because they also claimed that tuition wasn't tax deductible and it is.
quote:Revenue Neutrality
The FairTax is designed to be revenue neutral. In other words, it is not meant to increase or reduce the amount of money flowing to the federal government. Most of the data necessary to analyze the size of the FairTax base and the required revenue neutral rate are available either in the National Income and Product Accounts (NIPA) published by the Department of Commerce or the Federal Budget.
A number of adjustments to NIPA personal consumption expenditures need to be made to arrive at the base which the FairTax actually would tax. NIPA personal consumption expenditures include as consumption by homeowners the amount for which owner-occupied housing would rent. This imputed amount of consumption is not taxed by the FairTax and, therefore, it is subtracted for purposes of calculating our base. Similarly, NIPA treats education expenses as a consumption item but under the FairTax education is treated as an investment and not placed in the taxable base. Conversely, because the FairTax would tax all consumption, not only personal consumption but also consumption through government, government consumption is added to the tax base.
The FairTax would replace individual and corporate income taxes, payroll taxes and the estate and gift tax. Accordingly, the amount that these taxes raise ($1.7 trillion) is the amount that the FairTax would need to raise. Therefore, the rate required is 23%.
posted
"Free market competition will do the rest."
That is an incredibly naive statement.
Just look at the way the oil companies are getting investigated for price manipulation. Again, you underestimate the power of greed.
Posts: 410 | Registered: Apr 2005
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quote:This will almost certainly drive the use of corporations as not only tax shelters but purchasing agents for luxury items; the rich will be buying houses and helicopters, for example, through shell companies.
Also addressed in the FAQ. I would point out that when moving to a new system it must be compared to the current system, not to some perfect fool proof system that does not exist. Do you think that the rich do not avoid taxes under the current system? I assure you that they do.
"Does the FairTax improve compliance and reduce evasion when compared to the current income tax? The old aphorism that nothing is certain except death and taxes should be modified to include tax evasion. Tax evasion is chronic under any system so complex as to be incomprehensible. As a percentage of gross domestic product (GDP), tax evasion is beyond 2.0 percent, compared to 1.6 percent in 1991. Tax evasion continues to be in the range of one quarter of income taxes collected. Almost 40 percent of the public, according to the IRS, is out of compliance with the present tax system, mostly unintentionally due to the enormous complexity of the present system. These IRS figures do not include taxes lost on illegal sources of income with a criminal economy estimated at a trillion dollars. All this, despite a major enforcement effort and assessment of tens of millions of civil penalties on American taxpayers in an effort to force compliance with the tax system. Disrespect for the tax system and the law has reached dangerous levels and makes a system based on taxpayer self-assessment less and less viable.
The FairTax reduces rather than increases the problem of tax evasion. The increased fairness, transparency, and legitimacy of the system will induce more compliance. The roughly 90-percent reduction in filers enables tax administrators more narrowly and effectively to address non-compliance and increases the likelihood of tax evasion discovery. The relative simplicity of the FairTax promotes compliance. Businesses need answer only one question to determine the tax due: How much was sold to consumers? Finally, because tax rates decrease, tax evasion is less profitable; and because of the dramatic reduction in the number of tax filers, tax evaders will be more easily monitored and caught under the FairTax system."
Posts: 127 | Registered: Feb 2005
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It will make it laughably easy for the rich to hoard, buy luxury items through shell companies; and place a large burden on the poor, especially the transient poor.
This plan was devised by someone well-off, and boy does it show.
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holden, is there any reason for your support of this tax system other than it would be less complicated?
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posted
Tom, as I'm sure you know, only people can pay taxes. The corporate tax is paid by corporate customers. If there were no corporate tax prices would fall based on competition.
Posts: 127 | Registered: Feb 2005
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I clearly see not-for-profits that make a living on corporate assistance taking a hit. Many choose to donate money and while I assume they choose based on ideals that they support, communities they live in, whatever, it is clear they do so for the tax relief, not the good feelings or advertisement. Unless you are active with any given not for profit, it is rare to know how folks donate unless they make a big deal out of it. Some do, but many more do not.
Also, it stands to be repeated...rich people spend less of their money as a percentage than poor people. Most poor folks spend most or all of their money every month and wait desperately for the next paycheck or welfare check (some spend MORE than they have...see rising personal debt in US). Rich people, as a rule, do not. A loaf of bread to someone who makes a million a year is no more expensive than to those who make $10,000 a year and they probably eat just as much or as little on average. But as a percentage of their income, it is huge difference.
I also wonder are Corporations not paying any tax or are they charged at point of purchase, too? Meaning, if they have to pay 23% at point of purchase for materials to be made into the products we buy, I don't see them lowering prices. I see them increasing them by, oh, 23% or so. So far, I don't see corporations adjusting prices based on costs when it benefits consumers. Oil prices go up and that day you see it in the gas stations. Oil prices go down...and maybe we will see it go down weeks later. And if they don't pay purchase taxes as point of purchase, then I see wealthier business folks living in corporate condos, driving corporate cars and eating corporate dinners...or, as I see it, tax-free stuff by the bucket load.
Posts: 896 | Registered: Apr 2003
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posted
"Conversely, because the FairTax would tax all consumption, not only personal consumption but also consumption through government, government consumption is added to the tax base."
If I'm reading this correctly, under this plan, the government would pay taxes to itself when purchasing items from businesses, but other businesses would not. And if government consumption is as large as I recall, I suspect that this is a key component of the target 23% rate; were the government exempted in the same way that businesses are, I doubt the plan would be feasible.
Note that the plan does not in fact tax all consumption. It specifically excludes consumption by corporations, which -- quite oddly -- it says does not and will never exist. Intriguingly, the government is considered a consumer under this plan.
posted
"Tom, as I'm sure you know, only people can pay taxes. The corporate tax is paid by corporate customers."
Ah. I suspected they meant something ridiculous like this.
By the same logic, my employer currently pays my real estate taxes. And if I no longer paid real estate taxes, my employer would realize those savings, right? *grin*
quote: holden, is there any reason for your support of this tax system other than it would be less complicated?
Yes. Complication is actually way down the list for me.
1. Politics. No more would politicians be able to promise tax cuts to certain demographics while raising taxes on others. No more class warfare.
2. Fairness. I don't think that the truly poor should pay taxes while they are truly poor. Under this system they pay nothing. I believe the rich should pay more in $s than the middle class. The rich spend a lot more money and thus would pay more in taxes. (Again before you say they will avoid taxes, I am comparing this to the current system, not a hypothetical perfect system)
3. Economics. I urge you to read the FAQ about economic growth as well as the signed letter from Economists on the site.
I believe this system would be better for everyone. Not just the rich, not just the poor, everyone.
Posts: 127 | Registered: Feb 2005
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quote: By the same logic, my employer currently pays my real estate taxes. And if I no longer paid real estate taxes, my employer would realize those savings, right? *grin*
What? Corporations don't have any money. Corporations are owned by people. I own one myself. Every dime of taxes that my company pays comes out of my pocket. This is true of every company no matter how large or small. If those taxes were eliminated I could and would be forced to charge less for my services because my competitors would lower prices on their services. Prices in general would fall. My profit margin would remain the same.
Posts: 127 | Registered: Feb 2005
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"Corporations don't have any money. Corporations are owned by people. I own one myself. Every dime of taxes that my company pays comes out of my pocket."
This is remarkably naive -- or willfully blind. I can't tell which. The whole point of corporations is that, for legal and financial purposes, they are people.
I "own" a number of publicly-held corporations, for example, through stock purchases. And, yes, the taxes paid by these corporations ultimately affect their bottom lines, and thus the value of the stock I own.
But what you are missing here is that I am not contacted by the government to pay, say, Microsoft's taxes out of my own pocket. I don't even have to mail in the teensy amount for which I would in theory be responsible.
You are, as you've pointed out, incorporated. You choose to pay your corporate taxes out of your pocket because you do not maintain a distinction between your pocket and the pocket of your corporation. That's fine, although it would get you in trouble -- eventually -- if you ran Tyco. But the important thing here, for the purposes of this conversation, is this scenario:
1) You buy a chair. It costs you $25. 2) Your corporation buys a chair. It costs $20.
Which one -- you or the corporation -- buys the chair? I'm guessing, since you're not stupid, that the corporation will do it. It'll be the corporation's chair. But since you are, as you've pointed out, your corporation, the chair is for your exclusive use. The only difference here is that $5 did not go to the government. (Note: I assume that there's going to be paperwork involved in this step, presumably as some sort of rebate or pre-established tax immunity through purchase orders.)
Now imagine this result rippling across everyone in America who knows how to incorporate. That $5 the government's not getting adds up quickly, and I guarantee you the rich aren't going to line up to pay it.
posted
I guess it all comes back to your world view. If you believe we should punish the rich for being rich than yes this is not the right system for you. A system like the current system but with much higher marginal brackets is more your cup of tea.
Posts: 127 | Registered: Feb 2005
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quote: I "own" a number of publicly-held corporations, for example, through stock purchases. And, yes, the taxes paid by these corporations ultimately affect their bottom lines, and thus the value of the stock I own.
You just conceded my point. If you feel better by calling it naive before admiting it is a fact, I guess that is fine by me.
How stupid do you think the sponsors of this bill are? Do you really think that in practice everyone could just go form a corporation and use it to buy everything and thus avoid taxes? Give me a break Tom. There would have to be a mechanism in place to prove that your purchases were for legitimate corporate purposes. No system is perfect but as stated in the FAQ the incentive for tax avoidance/evasion under this system is much less than the current system. Once again that has to be the comparison. You can't compare it to some perfect system that does not exist.
Posts: 127 | Registered: Feb 2005
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posted
"There would have to be a mechanism in place to prove that your purchases were for legitimate corporate purposes."
What mechanism would that be, exactly? Because, see, I'm seeing paperwork again. And, frankly, I'm hard-pressed to identify the distinction between a chair purchased for holden the corporation and holden the homeowner; it's difficult to imagine the form that would somehow manage to nail down the distinction.
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As a side note, I don't think the sponsors of this bill are stupid. I think they're deliberately trying to bankrupt the government, as they feel taxes are immoral in principle.
quote: But what you are missing here is that I am not contacted by the government to pay, say, Microsoft's taxes out of my own pocket. I don't even have to mail in the teensy amount for which I would in theory be responsible.
You are, as you've pointed out, incorporated. You choose to pay your corporate taxes out of your pocket because you do not maintain a distinction between your pocket and the pocket of your corporation. That's fine, although it would get you in trouble -- eventually -- if you ran Tyco
This is a logical fallacy. It even has a name. Mental accounting. People have a tendency to classify activities into separate categories or accounts. You pointed out that it was my corporation (the seperate legal and financial entity) that paid the taxes. On a very superficial meaningless level this is true. In reality my company, that I own 100% of now has less money. I have less money. I paid the taxes.
The same is true of your stock ownership. While you did not write a check to pay your share of MSFT's taxes, your stock is worth less, you have less money, you paid the taxes.
Posts: 127 | Registered: Feb 2005
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quote:What mechanism would that be, exactly? Because, see, I'm seeing paperwork again
Tom when I buy a chair now if I were dishonest and wanted to call it a "corporate" chair I could do so and write it off. If I did this and were audited I would be penalized. There would have to be a similar mechanism.
One more time. I have never said the system would be perfect, only better. We would have to maintain some kind of enforcement agency for corporations. There would be none for individuals however, thus significantly less resources would be required than under the current system.
Posts: 127 | Registered: Feb 2005
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quote:As a side note, I don't think the sponsors of this bill are stupid. I think they're deliberately trying to bankrupt the government, as they feel taxes are immoral in principle.
Gold star for Tom.
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quote: As a side note, I don't think the sponsors of this bill are stupid. I think they're deliberately trying to bankrupt the government, as they feel taxes are immoral in principle.
Gold star for Tom.
If you get gold stars around here for baseless speculation I hope I never earn one.
Posts: 127 | Registered: Feb 2005
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posted
holden, it's a simple matter of something not adding up. The faq says that most people are paying as much as, if not more than a 30% flat sales tax right now. This implies that the average joe will see no change or maybe a decrease in the amount of taxes he is paying over the course of a year under the new system. We also know that corporations aren't paying any taxes, there is no estate tax, etc. And yet, all social programs, the military, etc. are still going to be funded? How? Everyone cannot win and since this is being sold as big savings for corporations and individuals only one other thing can collapse.
It is also ignoring the fact that it assumes the corporations are not going to cooperate to keep prices high, something we've seen them do in the past. This plan offers them no more incentive to do that than the have now, why would they not do it then? Especially considering the gains are astronomical. You may argue that they wouldn't do that as competition would drive prices down. But as there are already examples where this has not been the case I have no choice but to think you're naive.
It also glosses over trade by saying that all products will be on an equal playing field as all imported and domestically produced goods will have the same 30% sales tax applied to them. Offshore companies, of course, are still paying taxes to their own countries, where American companies are paying none. This will not exactly stimulate a desire to sell products to the US, and no, that isn't a good thing.
Posts: 3243 | Registered: Apr 2002
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posted
"This is a logical fallacy. It even has a name. Mental accounting. People have a tendency to classify activities into separate categories or accounts. You pointed out that it was my corporation (the seperate legal and financial entity) that paid the taxes. On a very superficial meaningless level this is true. In reality my company, that I own 100% of now has less money. I have less money. I paid the taxes."
I submit that this is not meaningless, as one of the legal entities capable of buying a chair would do so, under the other plan, at a discount. Clearly, which entity is doing the buying matters a great deal.
Frankly, I'm a little disturbed by your "I am my corporation" attitude, as it's exactly this philosophy that leads to terrible corporate malfeasance.
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Looking at your list of advantages that you perceive for the new system, I can't help wondering how you'd feel about charging tax on ALL purchases, regardless of whether corporations bought things or not. This change to the plan would not invalidate any of the advantages you listed, and would substantially reduce the 23% rate to something less onerous for individuals. We could still send a $3K check to Microsoft every year, too.
quote:Especially considering the gains are astronomical. You may argue that they wouldn't do that as competition would drive prices down. But as there are already examples where this has not been the case I have no choice but to think you're naive.
Bob there are indeed examples of corporate collusion. These examples are the exception not the rule. The vast majority of industries have many many participants making collusion impractical and in many cases impossible. If you are arguing that most prices for goods in America are set by companies colluding as opposed to the free market it is you that are naive or at least ignorant of basic economics.
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posted
I would say that I'm cynical However, I might be willing to concede that point, but can I assume you agree with my others?
Posts: 3243 | Registered: Apr 2002
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quote: I submit that this is not meaningless, as one of the legal entities capable of buying a chair would do so, under the other plan, at a discount. Clearly, which entity is doing the buying matters a great deal.
Out of context Tom. I never said that which entity buys the chair is meaningless. I said both under out current system and the Fair Tax system we would have to enforce rules about corporate purchases.
What is meaningless is which entity pays the taxes. Whether it comes out of the corporate account or my personal account, my personal net worth is lower by the exact same amount.
quote:Frankly, I'm a little disturbed by your "I am my corporation" attitude, as it's exactly this philosophy that leads to terrible corporate malfeasance.
Why don't you try and come up with a logical point instead of questioning my integrity. Corporate malfeasance is due to greed and dishonesty. It has nothing to do with the fact that people not companies pay all taxes.
Posts: 127 | Registered: Feb 2005
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posted
No Bob, I don't agree with your other points, that was just the quickest to respond to. I have a phone meeting in 5 minutes so I will respond to the others as soon as I can.
Posts: 127 | Registered: Feb 2005
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quote: So why not make ALL purchases taxed? Only people can buy things, not corporations.
The fact the corporation are exempt to me is not a key part of the plan. If an alternate plan was proposed with a lower rate to reflect the fact that many things would be double triple quadruple taxed etc. that would be fine, but more complicated and thus to me less desirable for the same outcome. However if it would make people feel better that somehow "big corporations" were paying their fair share it would be fine with me.
Posts: 127 | Registered: Feb 2005
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posted
I am not sure why everyone paying tax at the point of purchase would be more complicated. It would be less. We wouldn't need a corporate watchdog group to see how they were spending their money and whether or not they were buying chairs for their shareholders or something like that.
I also would want to know what a "purchase" is. I got the goods part. Donuts, coffee, computers, etc. Are services taxed the same way? Medical appointments, counseling services, babysitting, etc. What about purchasing stocks? Purchasing real estate?
Posts: 896 | Registered: Apr 2003
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quote:It also glosses over trade by saying that all products will be on an equal playing field as all imported and domestically produced goods will have the same 30% sales tax applied to them. Offshore companies, of course, are still paying taxes to their own countries, where American companies are paying none. This will not exactly stimulate a desire to sell products to the US, and no, that isn't a good thing.
Are you saying that the goal of domestic economic policy should be to make other countries more competitive in our market? Who cares if foreign goods and services are more expensive here compared to domestic goods and services? That is not our problem, other countries would likely adopt a similar system to be able to compete.
Posts: 127 | Registered: Feb 2005
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quote:I also would want to know what a "purchase" is. I got the goods part. Donuts, coffee, computers, etc. Are services taxed the same way? Medical appointments, counseling services, babysitting, etc. What about purchasing stocks? Purchasing real estate?
It is my understanding that direct to consumer services like medical appointments would be taxed. I believe that the purchase of investments would not be taxed but that service fees to make those purchases would be. For example it is my understanding that stock commissions would be subject to the tax as well as real estate agent fees on real estate transactions.
By the way good point about it being simpler if all purchases including corporate purchases were taxed. I meant it would be more complicated to determine the rate that would need to be charged in order to be revenue neutral if the tax applied at all stages of production.
It would also be more difficult to know how much we are truly paying in tax when we make purchases and that is one of the primary benefits of the system. If the tax rate is 23% and everyone knows it the govt would have a difficult time raising the rate when it would effect EVERYONE. We would not let it happen unless there was a very compelling reason.
Posts: 127 | Registered: Feb 2005
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1) Groups will lobby to get special tax breaks, but it will be groups like the AARP demanding tax breaks for seniors purchasing things and the Asparagus Producers saying that with out a sales-tax break they will collapse so we had better pay it.
2) Black Market and resellers go wild. Picture this. I own a business that sell cars. I sell all my cars for $1. each to my brother. I pay the 25 cent charge on the car. He resells the cars at his lot for a retail price without the tax and makes a profit. My company then buys from him a widget who's price equals the cost of the cars he sold plus a small commision for me.
3) Prices will jump up the 23% immediately, and will only come down once increased profits allow for competition to lower the costs. That 23% increase however, will hurt sales creating a drop in profits which will slow down the competition. Where 20% is a predicted goal, it will not be uniform.
4) The poverty line will become difficult for congress to raise, so that people will be forced to live on less and less real money every year. When congress tries to raise it they will be met by the same people who complain that the minimum wage can not be raised.
5) Joe makes 10K a year. He spends it all on rent and food. He pays taxes on his entire income because it all goes into staying alive.
Mary makes $100,000 a year. She goes to Canada to buy her car, saving thousands in taxes, and Mexico to buy her jewelry. She pays taxes on only 1/3 her salary.
They both get 20K back for minimum poverty expenses. All of Joe's gets taxed again when he spends it. None of Mary's does because she puts it in the bank for her trip to Europe next year.
Is this a fair distribution of the tax burden?
Posts: 11895 | Registered: Apr 2002
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posted
And now your final point Bob. I'm not ignoring you.
quote:holden, it's a simple matter of something not adding up. The faq says that most people are paying as much as, if not more than a 30% flat sales tax right now. This implies that the average joe will see no change or maybe a decrease in the amount of taxes he is paying over the course of a year under the new system. We also know that corporations aren't paying any taxes, there is no estate tax, etc. And yet, all social programs, the military, etc. are still going to be funded? How? Everyone cannot win and since this is being sold as big savings for corporations and individuals only one other thing can collapse.
I have never said that everyone will pay less in taxes under this system. In fact, I think that many people will pay much, much, more. For example, how about a person that has a $20 million dollar portfolio of muni bonds and no other income. Muni bonds are exempt from federal and often state taxes. Some are subject to the alternative minimum tax but many are not. Let's say that the yield on this portfolio is 3.5%. This person has an annual income of $700,000 tax free. Under the Fair Tax, they would pay tax on consumption. These kinds of people consume a lot. Criminals and tax evaders would also be added to the tax base. Some individuals not in these categories may end up paying marginally more than before but they will have much greater control over how much they pay. The poor that must consume all that they make would pay nothing. Everone else has a choice how much to consume and thus how much tax to pay.
You are also assuming this is a zero sum game. It is not. The former head of the economics department at Harvard predicts that GDP growth under such a system would be over 10% the year it is implemented (see the website). That means the tax base would be expanded significantly and the tax rate could be lowered. It is my understanding that the 23% revenue neutral rate includes only long term average economic growth.
Posts: 127 | Registered: Feb 2005
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quote: 1) Groups will lobby to get special tax breaks, but it will be groups like the AARP demanding tax breaks for seniors purchasing things and the Asparagus Producers saying that with out a sales-tax break they will collapse so we had better pay it.
2) Black Market and resellers go wild. Picture this. I own a business that sell cars. I sell all my cars for $1. each to my brother. I pay the 25 cent charge on the car. He resells the cars at his lot for a retail price without the tax and makes a profit. My company then buys from him a widget who's price equals the cost of the cars he sold plus a small commision for me.
3) Prices will jump up the 23% immediately, and will only come down once increased profits allow for competition to lower the costs. That 23% increase however, will hurt sales creating a drop in profits which will slow down the competition. Where 20% is a predicted goal, it will not be uniform.
4) The poverty line will become difficult for congress to raise, so that people will be forced to live on less and less real money every year. When congress tries to raise it they will be met by the same people who complain that the minimum wage can not be raised.
5) Joe makes 10K a year. He spends it all on rent and food. He pays taxes on his entire income because it all goes into staying alive.
I really have to go too but quickly: 1. How is this different than under the current system? If we start with a system with no tax breaks it will be much harder to get special treatment than under our current system where there are tax breaks for everything possible.
2. There are ways to game the system that would have to be dealt with. Do you have any idea what people do to game the system now? It would be less profitable and thus less frequent under the Fair Tax.
3. You are underestimating the free market. Information is digested almost instantly. If I am a retailer and I know I can gain market share and keep the same profit margin I am dropping prices today not in 6 months.
4. Since everyone receives the check based on the poverty line, not just the poor, I see no reason it would be difficult to raise. Small business does not want to raise minimum wages because it would hurt profits and thus employment levels. Again we are singling out one group in favor of another. In this case raising the poverty line would be the same for all.
5. No Joe pays no taxes. He receives a rebate for every dime.
posted
"I believe that the purchase of investments would not be taxed but that service fees to make those purchases would be."
Hm. You know, I find it suspiciously convenient that corporations and investment purchases are completely untaxed under this plan. Posts: 37449 | Registered: May 1999
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posted
Why would Corporations cut prices just because they're not paying taxes? Corporations have never shown any inclination to pass increased revenue onto the customer. They pocket the cash and that's exactly what they'd continue to do.
Posts: 16 | Registered: Apr 2005
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Say a local non-profit puts on a Golf Tournament (this happens a lot in the Napa Valley, where I live). The local businesses sponsor the tournament usually for these reasons:
a. Get free advertising b. This advertising is not in their normal operating expenses, which has a cap on what they can use for this purpose, but is counted as a charitable donation. Its all good when you can write off publicity without using it in the "loss" column.
This works well. Now, I, as a private individual donate to local causes that I love to support, but usually don't claim these on my taxes (I really can't afford to donate that much). It's great that people like us do this out of sheer altruism, but for most businesses, and there has to be some exceptions, it's all about the bottom line.
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quote: Hm. You know, I find it suspiciously convenient that corporations and investment purchases are completely untaxed under this plan.
Try not to be so cynical Tom. Every idea that you don't agree with is not necessarily an evil plot to make the rich richer and help those dastardly corporations.
I have never heard of a sales tax that taxes investment purchases (various state sales taxes for example). I don't know why you expect this sales tax to be different. As to corporations, it is obvious that you will continue to insist that taxing corporations is somehow different than taxing the PEOPLE who buy corporate products and the PEOPLE who own corporate stock so I can't help you with that particular hang up.
quote:Why would Corporations cut prices just because they're not paying taxes? Corporations have never shown any inclination to pass increased revenue onto the customer. They pocket the cash and that's exactly what they'd continue to do.
WW, they have no choice. I am not suggesting that corporations would want to share potential profits with consumers, they would be forced to by competition. This is a very basic economic principle that holds in the vast majority of cases.
Posts: 127 | Registered: Feb 2005
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posted
"I don't know why you expect this sales tax to be different. As to corporations, it is obvious that you will continue to insist that taxing corporations is somehow different than taxing the PEOPLE who buy corporate products and the PEOPLE who own corporate stock so I can't help you with that particular hang up."
Because, as I've pointed out, corporations do an enormous amount of buying and selling on behalf of the corporation. The PEOPLE in those corporations don't buy stuff. When I order a server for Edgewood, I don't rush out and put it on my VISA -- even if I personally place the order.
The money comes from a different bucket, both legally and ethically.
And this plan acknowledges this fact, by saying that all money which comes from a corporate bucket is untaxed, but money which comes from a personal bucket will be taxed. The mere fact that they make the distinction concedes my point.
And as a consequence, we will see more people putting money into -- and using money from -- corporate buckets.
Posts: 37449 | Registered: May 1999
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posted
You live in a fantasy world, holden. What percentage of individuals hire lobbyists to manipulate legislators? Do you think that corporations would waste money on ineffective lobbying? On lobbying that didn't make them even more money than they spent?
And you haven't a clue as to economics. Economic activity -- ie resource use, especially including use of government services and publicly-owned properties&rights-of-way -- is directly measured by cash flow. And nearly all corporate entities have higher cash flow than nearly all individuals. TANSTAAFL : There Ain't No Such Thing As A Free Lunch This plan is solely a way of charging individual workers to provide the non-working wealthy with free three-martini corporate lunches.
quote: This plan is solely a way of charging individual workers to provide the non-working wealthy with free three-martini corporate lunches.
How ironic Aspectre. The non working wealthy are exactly the people that would have the largest tax increase under this plan. See my example above of the person with the municipal bond income.
Tom I have never said that it doesn't matter whether corporations or individuals make purchases. It cleary does under either tax code. I have said that whether the corporate entity or you personally PAY THE TAXES, your net worth will be exactly the same. You keep trying to make the switch Tom and it isn't working. Besides I don't even care about the corporate exemption. It just makes it a true retail sales tax as opposed to a hybrid sales/VAT tax. Why don't you spend some time at the web site and come to a logical conclusion. I am certain that you did not do so before your initial negative response based on your ignorance of the basic structure of the plan.
quote: Economic activity -- ie resource use, especially including use of government services and publicly-owned properties&rights-of-way -- is directly measured by cash flow. And nearly all corporate entities have higher cash flow than nearly all individuals.
What does this have to do with anything? I have never made any comparisons about cash flow of indidviduals and corporations. That bordered on meaningless mumbo jumbo in the context of this discussion.
This is not a free lunch, only a better system. Taxes will still be paid by everyone but the very poor.
quote:And you haven't a clue as to economics.
Oh really? I'd wager my economic education/experience against yours any day.
edit (removed reference to my educational background, brought it up only to respond to above quote but decided my motives could be misinterpreted)
Printer-friendly view of this topic
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Intriguingly, the government is considered a consumer under this plan.![[Wink]](wink.gif)
However, I might be willing to concede that point, but can I assume you agree with my others?
