CNN talking Fair Tax now.

[spacemaker2]

Originally Posted by Darkness

I would like to see a higher luxury tax, on cars over 30K, second homes, yachts, boats, recreational vechicles, TV's over 40 inches, guns, perfumes, jewlery, ect. Non-essential goods.

Car over 30K in a few years will be all of the new cars Luxury taxes are just class warfare and that needs to stop. Both Gerorgia and Russia went to the "fair tax and the economies surged. There is alot of business that happens outside of the normal business cycle, (Cash/offshore) that come back into the fold when taxes are not punitive. Businesses can bring business back here when that type of tax is not done. The problem is government spends too much.

[tuff bob]

Originally Posted by Darkness

Like ignkot said, ford pays tax on car parts, puts the car together, and charges tax again on car parts.

yep, just like we do now!

[wingfanjim]

Originally Posted by Todd Farkman

"used goods are tax free"

Hmmm, i wonder what the impact of that would have. That would be very good for the environment as ppl would be more prone to buying used and less waste would occur

also, buying an existing home rather than building one more massive McMansion subdivision in the exurbs would do wonders for cutting spending and propping up housing prices. The simple fact of the matter is that we have WAY too much housing stock already. Also, the more we spread out, the more infrastructure is needed to support it...thus bigger and more expensive government.

[New User]

Originally Posted by tuff bob

yep, just like we do now!

But instead of the 7% or so, it will be 22% twice.

[tuff bob]

Originally Posted by Darkness

But instead of the 7% or so, it will be 22% twice.

where do you get 7% from?

[SBSpartan]

Originally Posted by Ignignokt

I seriously doubt it would change behavior that much. The real effect would be that if there are any situations where the tax is not charged, people would come up with all kinds of loopholes to avoid paying the tax.

Seriously...let's say Ford sells a car. Who in the supply chain does and doesn't pay a tax? Does the company who makes the bolts used to weld metal together pay tax? How about the people who make windshields? Or the company that makes seat belt buckles? Do they all pay tax and then the consumer also has to pay on the final product? What about if a Ford employee drives it around for 500 miles? Is it then "used?"

There are just so many loopholes and edge cases that this thing will cause. It will replace today's accountants with people who are experts on when "Fair" Tax is and isn't owed. It's just trading one evil for another, AND it's a regressive tax to boot.

False, the FairTax is a progressive tax. Go back to the post that has a link to the "FairTax Five" and read about it. Or just go to Fairtax.org

[New User]

Originally Posted by tuff bob

where do you get 7% from?

7 or so, your sales tax depends on you live.

[SBSpartan]

Originally Posted by wingfanjim

also, buying an existing home rather than building one more massive McMansion subdivision in the exurbs would do wonders for cutting spending and propping up housing prices. The simple fact of the matter is that we have WAY too much housing stock already. Also, the more we spread out, the more infrastructure is needed to support it...thus bigger and more expensive government.

Does the FairTax tax used items? The FairTax does not tax “used” goods but it is important to note that HR25 has a legal definition of the term “used”. This is necessary to ensure that items are taxed only once and to prevent tax cheating. Under the FairTax, for an item to be considered “used” it must be: (1) purchased before the FairTax is enacted, or (2) the FairTax on the item must have been previously paid. Let’s look at (1) above. Assume that Joe bought a new car in January of 2005. Let’s further assume that the FairTax went into effect on Jan. 1, 2006. Since Joe owned the car before the enactment of the FairTax, it is considered a “used” car. It has the taxes from the existing tax system embedded in its price. Therefore, when Joe sells that car to Bill, Bill will not owe tax on the transaction. Now, let’s consider (2) above. The most common example is that Joe buys a new car for personal use and pays the FairTax on it. If Joe then sells his car to Bill, there would be no tax on it because the tax had already been paid. Let’s look at another example. Assume that Joe owns a flower shop business and buys a van to use when making deliveries to his customers. No tax is charged on purchases for business purposes so that the FairTax on goods sold to consumers does not double tax, or put a tax on a tax. If Joe decides to sell the van to his friend Bill (who is not in business) for use as his personal vehicle, then it would be a taxable sale to Bill. Why? Because Joe did not pay tax when he bought the van for his flower shop. Since no FairTax has been previously paid on that van; it is not considered used and the sale to Bill would be taxable. If later, Bill decided he did not like driving a van and sold it to someone else, it would not be a taxable sale. Why? Because the tax had been previously paid (when Bill bought it from Joe) making the item “used” and not subject to tax.

[SBSpartan]

Originally Posted by Darkness

7 or so, your sales tax depends on you live.

You are forgetting to add all of the taxes that are built into the cost of the product as well.

[tuff bob]

Originally Posted by Darkness

7 or so, your sales tax depends on you live.

but Ford is paying all the hidden taxes (eg payroll taxes) that the car part manufacturer adds into the price it charges Ford for the widget.

[Ignignokt]

Originally Posted by tuff bob

the fair tax is owed on the first sale of an item. easy.

Did you even read my post? Isn't it apparent that "first sale" isn't always so cut and dry? And that such a tax, if applied at every level in the supply chain, would equal FAR more than 22%?

Quick example:
Widget maker A makes a rivet-like product, of which Widget maker B uses 50 for each B widget.
Widget maker B uses 50 bolts to clamp together the B widget, along with some metal and other parts.
Widget maker C takes a B widget and uses its patented program to make widget B the best B widget ever!
Ford is extremely excited to include a C widget in each of its cars. You MUST have a C widget while driving!

So let's look at the pricing here. Currently, something like this would look like this:
Each A widget costs $1.

Each B widget costs $75. (they use another $20 in raw materials and
take $5)

Each C widget costs $135. (another $20 in raw materials, plus $25 for R&D, plus a decent profit)

Each car costs $25,000.

Now, let's apply a "Fair" Tax:
Each A widget costs $1.22 in order to get their $1.

The raw material on B's A widgets just went up from $50 to $61. The other $20 of materials now costs $24.4. This means that their raw costs just went from $70 to $85.4 per widget. To make the same profit margin, they must now charge about $92.

Now C is using the B widget as a base product, which now costs $92 instead of $75. And they have $20 of other costs, which we'll assume is only taxed once and costs $24.4. So their raw cost is now $116.4. They still have that $25 R&D cost, and to take an equivalent profit they need to take in about $159. Tack on the "Fair" tax and your C widget is now $194.

So our $125 widget is now $194. This is an increase of 55%. Let's assume this is a reasonable average increase in supply cost for Ford. This means that they would have to increase the price of the car pre-tax by 55% and THEN put the 22% tax on top of that. Your $25,000 car is now $47,275.

Still pumped about "Fair" tax?

[Ignignokt]

Originally Posted by SBSpartan

False, the FairTax is a progressive tax. Go back to the post that has a link to the "FairTax Five" and read about it. Or just go to Fairtax.org

You can try to call it whatever you want, but it is the exact definition of a regressive tax. Meaning that the more you make, the smaller percentage of that income is taxed.

[tuff bob]

Originally Posted by Ignignokt

You can call it whatever you want, but it is the exact definition of a regressive tax. Meaning that the more you make, the smaller percentage of that income is taxed.

Read up on the "pre-bate" and get back to us. thanks.

[tuff bob]

Originally Posted by Ignignokt

Now, let's apply a "Fair" Tax:
Each A widget costs $1.22 in order to get their $1.

this is where the flaw in your argument is. The widget would be less than $1 (before application of the fair tax) since company A is now not paying corporate and payroll taxes.





.

[Fritzdude]

damn.. I wish I would have been part of this discussion earlier. I just finished the Fair Tax book and have to say that I'm a believer in this philosophy.

It's brilliant and easy to understand.

That said - it's not perfect - but light years ahead of our current system.

The prebate is key (to allow poor individuals to purchase essentials and not be over-burdened with taxes). Therefore, it's not regressive, but progressive!! And awards work, savings, investment, and education.

[Venice Spartan]

Originally Posted by New User

yes, lots of loopholes, lots of double taxation and a product. Wouldn't it put more stress on individual business owners and open the door for faud at the retail level?

This is the obvious reason why this idea is absolutely insane and no one brings it up

So we're going to put the cost and burden of collecting the country's taxes on Mom and Pop small business owners and mega-corps? It will kill Mom and Pop and force the mega's to raise prices to cover the cost of being the new IRS

Fraud? OMG we'd need an enforcement bureau as big as the IRS and they still wouldn't touch most of it

In the name of fairness

This is as about as unfair as it gets in favor of the uberrich

And there is the double edged sword of spending and saving
When every purchase would cost one 30+% more in tax in CA
(slightly varied by state) people will think more about what they spend and what they need as opposed to want, which will hurt the economy, but what they don't spend is saved, which is good for the individual.

I don't think one need look further than Reagan's idea to raise taxes on luxuries like boats and planes to get some of his giveaway back from the rich. They just quit buying boats and planes

But then those fiscal, shift more of the burden to the middle class so I can buy a 10th house, conservatives love this crap. They earned that money after all

So they get the fair tax plan in and kill the death tax they're in like Flint. Never pay any tax on most of the earnings and pass em tax free to those ever deserving kids who won the sperm lotto. They earned that money after all

Let them eat cake !!!!!!!!!!!!

I want to see a debate between Warren Buffet and Steve Forbes and end all this fair tax nonsense



CNN is Dinosauric, when is Larry King on?

[Negotiator]

Originally Posted by New User

yes, lots of loopholes, lots of double taxation and a product. Wouldn't it put more stress on individual business owners and open the door for faud at the retail level?

It seems kind of ironic to me that free-market capitalism and communism as a way to run society both rely on honesty and a lack of greed that clouds judgment.

[Spartytruth]

Booze is the classic double tax. We pay sales taxes on the sin taxes.