RadioBanter - View Single Post - Financial wealth, or JUST WHO SHOULD PAY FOR ALL OF THIS?

RD Sandman

"Scout" wrote in
:

"Gray Ghost" wrote in message
. 97.142...
gfn wrote in
news:ef9eff13-5301-4e82-b5c0-66f67997c9d6
@v8g2000yqb.googlegroups.com:

On May 27, 10:09 am, "SaPeIsMa" wrote:
"gfn" wrote in message

news:c0d226e9-3004-49e2-9639-
...
On May 26, 8:03 pm, "Scout"

wrote:
"gfn" wrote in message

news:5e36036b-9c38-4449-8578-
...

On May 26, 1:05 pm, RD Sandman
wrote:
gfn wrote
innews:6b95e91a-138f-49b0-a7bd-e8e44a57e311
@e35g2000yqc.googlegroups
.com:

On May 25, 5:42 pm, RD Sandman

wro
te:
gfn wrote
innews:7c91830c-c968-4f08-9c9e-77bc0350d428@
y19g2000yqk.googlegroups.com:

Sure I do. The "flat tax" has the government deriving
its revenue from the income tax.

Yep....at a flat rate for everybody.

As does the FairTax. Best part is the consumer pays it
only
whe
n
the
y
buy something. They decide when to pay it, not when the
governm
ent
decides you owe it on payday.

It looks like they are trying to mix sales tax with the old
luxur
y
tax.

The FairTax is effectively a replacement of the compliance
costs
t
hat
are already built in to every product and service you buy.

Not quite since those compliance costs are not the same
revenue
sour
ce
as
the income tax. For your Fair Tax to work, that revenue source
from income needs to be added.....so it isn't simply the
'before' costs added
to the price of purchase.

No it doesn't need to be added. It's already part of what you
are paying anyway. Here's a very simplified example:

Product costs $100, broken down as follows:

Under current system
- wholesale = $50
- compliance costs = $23
- sales and other taxes = $27
- Grand total = $100

Under the FairTax
- wholesale = $50
- compliance costs = - $23
- FairTax = $23
- sales and other taxes = $27
- Grand total = $100

Sorry, but how can you totally eliminate compliance costs, since
there would
still be costs to complying with the FairTax as well as the sales
and other
taxes.

As such simply saying it's not going to cost anything to comply
with
th
e
tax
laws is an utterly false assumption.

Indeed since NOTHING else has changed the compliance costs would,
at minimum, stay the same, and given that the need to comply with
the
Fair
Tax
would require some expense, the compliance cost would likely
increase.

So in reality, what would happen would be more like:

Under the FairTax
- wholesale = $50
- compliance costs = $26
- FairTax = $23
- sales and other taxes = $27
- Grand total = $126

#
# Let me ask you a real simple question. What cost do you incur to
pay # a sales tax at the point of purchase?

The buyer ?
The buyer is paying for the cost which is built into the sale
pri
ce

There's no compliance cost to him with paying the sales tax. They
just pay it. Unlike the fed income tax compliance means CPAs,
TurboTax, manuals, etc.

The seller ?
The seller has the cost of managing and reporting the taxes
that
were

Oh, you mean like they already do with state sales taxes? By the
way, merchants and sellers are reimbursed for those costs. But, you
knew that already, didn't you?

Which is never enough.

Even if so, doesn't alter anything. That they pay the collection costs
via the tax collected doesn't alter ANYTHING.

Since that cost is simply buried in the tax in the form of a higher
tax rate.

Effective tax rate - 20%
compliance costs for the retailer - 3%
Fairtax = 23%

or we can not pay the retailed for his costs

Tax rate - 20%
Retailers compliance cost - 3%
Tax and costs passed on to the consumer - 23%

Either way, the government collects the same revenue, and the costs of
compliance are still passed on to the consumer.
The ONLY difference is where that cost is added in to the final price.

Indeed, I would tend to think the government model (first) would incur
a higher final cost since there would be yet more forms to fillout &
process, more people to handle those forms and more transfers of money
back and forth. All of which means MORE expense, not less.

Don't forget that Fair tax also includes your FICA taxes, personal income
taxes, etc...

--
Sleep well tonight....RD (The Sandman)

If you woke up this morning....
Don't complain.