> Maybe someone can recall the details of the consumption
>> tax that caused high unemployment in the yacht industry.
> "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.
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
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'.
Where is the profit? It will not eliminate the auditors. They should be in high demand as sales tax auditors.
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.
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.
....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."
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?
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