Rep vs. Dem Differences

In article , "Peter Gottlieb"
writes:


The result is that taxes most definitely DO affect businesses, and since
they cannot pass along all additional expenses to their customers, part of
the tax decreases their profit and so effectively the business owners DO pay
taxes (separate from their personal income taxes, that is).


A tax placed on bakers with names starting with the letters A to M could not be
passed on to the customers because of competition from bakers with
alphabetically later names, but a tax placed on ALL bakers simply raises the
cost of bread, since there are no alternate sources for the product unaffected
by that cost.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG

"Wdtabor" wrote in message
...
In article , "Peter
Gottlieb"
writes:


The result is that taxes most definitely DO affect businesses, and since
they cannot pass along all additional expenses to their customers, part of
the tax decreases their profit and so effectively the business owners DO
pay
taxes (separate from their personal income taxes, that is).


A tax placed on bakers with names starting with the letters A to M could
not be
passed on to the customers because of competition from bakers with
alphabetically later names, but a tax placed on ALL bakers simply raises
the
cost of bread, since there are no alternate sources for the product
unaffected
by that cost.


But it does not necessarily raise the price of bread by the full amount of
the tax. The increased price will reduce demand and to optimize profit the
bakers will absorb some of the increase. But why discuss microeconomics
when there are macroeconomic issues...

The general observation that consumers pay all the taxes paid by their
suppliers is of course completely correct. It is somewhat amazing to
consider the true amount of tax that we all pay when everything is accounted
for.

But tax "reform" can only do so much. You can shift the burden around, and
here you hear the various usual Republican and Democrat arguments for whom
should be paying how much, or you can work at reducing the need for the high
burden, which is more along the lines of what I would prefer. However,
there are a lot of very entrenched self and special interests who do not
want change of the latter type and I doubt that any of the present players
have the true desire or if so, the ability, to cause any significant change.

In article , "Peter Gottlieb"
writes:


The general observation that consumers pay all the taxes paid by their
suppliers is of course completely correct. It is somewhat amazing to
consider the true amount of tax that we all pay when everything is accounted
for.


More than merely amazing. The Americans for Tax Reform traced the taxes
imbedded in the cost of various goods. One was a Ford Taurus automobile, priced
at $23,000. They found the car could have been sold, at the same profit, for
$12,700 with the imbedded taxes removed. The buyer of that car, who might be
under the illusion all taxation has been successfully pushed off on "the rich"
pays and astounding $10,700 plus interest when he purchases that car.

Surprise!

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG

"Wdtabor" wrote in message
...
In article , "Peter
Gottlieb"
writes:


The general observation that consumers pay all the taxes paid by their
suppliers is of course completely correct. It is somewhat amazing to
consider the true amount of tax that we all pay when everything is
accounted
for.


More than merely amazing. The Americans for Tax Reform traced the taxes
imbedded in the cost of various goods. One was a Ford Taurus automobile,
priced
at $23,000. They found the car could have been sold, at the same profit,
for
$12,700 with the imbedded taxes removed. The buyer of that car, who might
be
under the illusion all taxation has been successfully pushed off on "the
rich"
pays and astounding $10,700 plus interest when he purchases that car.

Surprise!

Of course the big con with taxation and especially indirect taxation is that
it affects the middle classes the worst. The poor have no money so they
cannot spend much. However when they do spend they tend to go for branded
products because of the quality.
I was in India and given a choice of spending a days pay on a quality
branded soap or and hours pay on a local variation it was the quality
version that won out - why because poor people really want value for money
and in this case, the branded soap bar lasted 20 times longer that the cheap
bar.

The middle classes are hit the hardest as for them they are right in the
middle of the income bracket so they have a high marginal and overall tax
burden. As consumers, they also get hammered and with only a little
discretion over what to buy etc they have little choice about the taxes they
pay.

The best off are and always have been are the rich and the tax system is
geared to protect them. When you have more money than you know what to do
with it other than engage in conspicuous consumption then buying anything
not necessary a normal life become cheap. The $1m boat brings with it a
sales tax and a property tax. So what it is still cheap.
The marginal rate of income tax for these people and the overall tax burden
set against their income and wealth is also low. It may seem like a lot of
$s but is still proportionately smaller than the middle classes.

Fairer taxes to me means people paying their fair share. You cannot be more
than fair to one section of society without being less than fair to the
others.

Shift the sales taxes away from the things people need to have to live and
put tax on the things that are not essentials to live.

In article , "CB"
writes:


Shift the sales taxes away from the things people need to have to live and
put tax on the things that are not essentials to live.


THe FairTax addresses this not by exempting certain goods, but by rebating the
sales tax paid on spending up to the level determined as needed to cover basic
expenses.

Using a formula very similar to that currently used to determine the poverty
line, the tax paid on necessities for a given family size is determined and
each month you get a check (or more likely, an electronic deposit) to reimburse
you for that tax. The effect is that basic living spending is tax free to
everyone, rich or poor alike.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG

"Wdtabor" wrote

snip

THe FairTax addresses this not by exempting certain goods, but by rebating
the
sales tax paid on spending up to the level determined as needed to cover
basic
expenses.

The FairTax interests me, but I've been wondering why tax food and clothing
at all in the first place, instead of sending out rebate checks (or
deposits)? Is it because it is hard to classify certain items as "necessary"
and a rebate is just easier?

-Trent
PP-ASEL

In article , "Trent Moorehead"
writes:


The FairTax interests me, but I've been wondering why tax food and clothing
at all in the first place, instead of sending out rebate checks (or
deposits)? Is it because it is hard to classify certain items as "necessary"
and a rebate is just easier?


The FairTax will be collected by the States, which will get a commission for
collecting it. There will be no federal taxing authority. The States have their
own sales taxes already, and they differ from state to state as to what item
are taxable or not. To add a federal list of taxable and non-taxable items
would be very complicated to adminster.

It is adminstratively simpler, and equally fair, to simply estimate the cost of
essentials and allow for them uniformly.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG

"Wdtabor" wrote in message
...
In article , "CB"

writes:


Shift the sales taxes away from the things people need to have to live and
put tax on the things that are not essentials to live.


THe FairTax addresses this not by exempting certain goods, but by rebating
the
sales tax paid on spending up to the level determined as needed to cover
basic
expenses.

Using a formula very similar to that currently used to determine the
poverty
line, the tax paid on necessities for a given family size is determined
and
each month you get a check (or more likely, an electronic deposit) to
reimburse
you for that tax. The effect is that basic living spending is tax free to
everyone, rich or poor alike.


The trouble with all these great ideas is that the cost of administering the
taxes can out weight the tax benefit. In theory your idea sounds great, but
the beauracracy involved would be immense.

"CB" writes:

The trouble with all these great ideas is that the cost of administering the
taxes can out weight the tax benefit. In theory your idea sounds great, but
the beauracracy involved would be immense.

How would it compare to the current bureaucracy?

-jav

In article , "CB"
writes:


The trouble with all these great ideas is that the cost of administering the
taxes can out weight the tax benefit. In theory your idea sounds great, but
the beauracracy involved would be immense.



??

What bureaucracy? Other than those which already exist?

The tax will be collected by the States using their existing sales tax
bureaucracy, and the States will receive a commission to cover their small
costs for doing so.

The rebates will be sent out by the existing Social Security mechanisms, at the
cost of a bit more paper.

In return, the IRS will cease to exist. The day the FairTax goes into effect,
they turn off the lights at the IRS, and all of their records, other than those
needed for collection actions in progress, will be destroyed. That will save us
the $100Billion it costs us each year to operate the IRS, PLUS the $400 Billion
spent by businesses and individuals to comply with the IRS code.

The FairTax will reduce the total state and federal tax bureacracy by by at
least 90% over all, and the cost of collection will be built into the
collection mechanism.

Your personal tax compliance effort will be to send in a form once a year
telling the SS folks how many people are in your family and what their SS
numbers are.

Retail businesses will collect the tax as they do with sales taxes now and turn
them into the state, just as they do now. They will no longer have to withold
taxes from employees, calculate depreciation, or any of the other accounting
that is otherwise not needed in operating the business. Their monthly tax
return will look something like

Retail Sales X Tax Rate = Amount enclosed.

That's it.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG