Posted: 12 May 2008 03:22 pm
Post Subject: TAX MYOPIA - Re: FairTax good for real estate Read Article
Well, Rich, you've taken a small slice of the economy and found a silver lining for your national sales tax. All the advantages you enumerate about more money for down payments, more savings, more of everything will be more than counter-balanced by the more we'll be paying for everything else in our lives, from cars to refrigerators to power, to gasoline, clothing, etc.
The blunt fact of the matter is that for the majority of the public, this represents a big tax increase if you look at the tables I presented in my past post. Remember four fifths of American taxpayers make less than 68-thousand dollars and pay an effective income AND social insurance tax rate of between 1.8% and 15.7% depending on income.
In addition, what products or services will be exempt from taxation? Food? Medicine? Medical services? What other services? Everything you exempt will mean the sales tax rate goes higher on what is left. Remember, you have to produce roughly 3 trillion dollars just to break even on the federal budget. If those items are exempted, the rate for your tax soars past 30%. If you try to refund money to the poor, you'll need your dreaded IRS to keep track of incomes.
And all of this is to keep us from gathering our receipts once a year and going to H & R Block.
Posted: 12 May 2008 06:48 pm
Post Subject: Re: TAX MYOPIA - Re: FairTax good for real estate
Way to go Karen - The first thing everyone should be asking themselves is why our senators and representatives would call a 30% sales tax a 23% inclusive tax. The reason is many people do not understand percentages, do not know the difference between markup and margin and do not realize the difference between tax bracket percentages and effective tax rate percentages.
(12) TAXABLE EMPLOYER.—‘ (A) IN GENERAL.—The term ‘taxable employer’ includes— (i)any household employing domestic servants, and any government except for government enterprises (as defined in section 704).
This is a definition out of bill s1025 that was introduced in the senate and calls for the fair tax. The reason the above exists is because the homeowner becomes liable for the 23% of the payment to the gardener, domestic servants etc.
Now the bill also makes our state comptroller responsible for WEEKLY collection of the tax from businesses owing more than 100,000 per year in the tax and also must make WEEKLY remittances to the federal govt.
Texas will also responsible for auditing and enforcement. Now suppose you hire 'handyman harry' to build a deck for you and you pay 3000.00. Harry gives you a receipt for 3900.00 for 3003.00 for the deck and 897 for the 23% of the 3900.00. Problem is that Harry doesn't have a license.
Your neighbor, who hates your guts, sends in a letter to the state suggesting your deck was built by one of those 'illegal aliens' everyone complains about. The state routinely sends you a letter asking for a copy of the receipt showing you paid the tax. You comply. They check and cannot find a business license or a sales tax permit for good ole Harry. You are now responsible for the 897.00 (again) and by the way the bill gives the state the right to garnish your wages or to put a lien on your back account or other property; kinda like the IRS use to. What this bill will do is get rid of ONE IRS and create FIFTY MINI IRS DIVISIONS..
In addition to creating a bookkeeping nightmare for businesses the bill requires all businesses doing more than about 350,000 in annual sales to deposit up to $100,000 security deposit. Some states will audit more efficently than others and our state will surely have to hire more people to comply with another UNFUNDED federal mandate.
THIS BILL IS AVAILABLE OVER THE INTERNET AND CAN BE DOWNLOADED IN PDF FORMAT. Please read it! Don't rely on the special interests who are setting up the FAIR TAX SPIN SITES..
Posted: 15 May 2008 02:44 am
Post Subject: Re: TAX MYOPIA - Re: FairTax good for real estate
I get so tired of hearing the FairTax proposal is really a 30% tax not 23%. I don’t understand what is so difficult to understand. If you cut an apple into 100 pieces, and you give Bill 77 pieces and Joe 23 pieces, Bill got 77% of the apple and Joe got 23%. If something costs $1.00 the seller will receive 77-cents and Uncle Sam will receive 23-cents. Currently if the total amount of taxes withheld from your paycheck is 23%, your dollar just become a 77-cent dollar. If you buy something that cost $1.00 it will take one of your 77-cent dollars and 30% of another. If you say the FairTax is 30% then you must also say a 23% income tax is really 30%. If you say 23% is a deception of the FairTax, you must say a 23% tax under our current system is deceiving. When you add in all the imbedded taxes it really becomes deceiving. The bottom line is this; if we must pay taxes a consumption tax is the fairest way. It includes everyone and there is no double or triple taxation as there is under our current system. Yes, revenue will be lost because of cheats, but will the amount be greater than under our current system? I don’t think so. The only ones who can cheat are the ones selling the goods or services. The penalties will be stiff if they don’t send 23% of their gross sales it Uncle Sam. All you opponents of the FairTax remind me of everyone who said the automobile would never replace the horse and buggy.
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