One "flaw" of the tax system? (1 Viewer)

[snogger]

I may have misspoke on the services part as it has been a couple of years since we've had a full blown out discussion about it here..

But sooner or later those cash payments will get used to purchase items that do pay the tax. Also, current lost tax revenue from illegal immigrants, ladies of the night,drug dealers,etc. Will now be captured when they buy their shiny new items.

But in regards to the cost of items.. There is already a 23% tax include in all items you buy now.. it's currently added as the price you see on the shelf... once enacted the "hidden" taxes now become upfront knowledge.. So in theory the price will be relatively the same..

Again it us "in theory" but many reviews have been made by many that seem to point to it being "revenue neutral " while keeping the cost of goods close to what we pay now.

I'll add a link to the FairTax thread where we've had thus discussions before tomorrow as I have it bookmarked.

?

Please show your work...are you just talking about corporate taxes?

As posted above.. Corporate Tax rate is around 35% ( it varies based on Revenue).. so removing that rate, which is added to the price of services and goods you purchase now, should keep prices relatively close to what you pay now.

I'm no economists, nor did I stay at Holiday Inn Express last night , so just going off previous discussions and articles I've read.

 

[matttyl]

In a much, much larger sense, my one "flaw" would be that the current system is almost completely "income" based, rather than "asset" based. A person is taxed on how much (or little) they add to their wealth, not on how much wealth they have. So a guy with $10m in asset but only $50k of income (extreme case, granted) pays less tax than a guy with no asset but $100k of income.

A tax blending both would be nice.

While a nice idea, seems like it would complicate the hell out of things even more than they already are.

Just forget all incomes and assets, increase sales tax to X amount, and make sales tax the ONLY tax that there is. Easy peezy, lemon squeezy. That's one way to combine both assets and income into the tax scheme while simplifying it quite a bit in the process.

How would it do that if the person isn't consuming? Maybe my mind is just so ingrained with the workings of an income tax that I can't wrap my head around anything else.

Does anyone out there not consume?

If the answer is yes, chances are they are not making money and being taxed anyway.

Not sure if that was what you meant or not.

edit.....also something to think about. Quite a few people out there do not pay taxes. Unless they decide to never spend any money on anything ever, there would really be no way for people not to pay taxes.

Maybe "not consuming" wasn't the proper wording. But I, for instance, really don't consume much at all (nor does my family). I mean, we live in a very nice house and have two cars (both purchased used) and all that jazz - but we don't go out to eat much at all, we've only gone out for a movie once in the past 2-3 years (new Star Wars movie), my wife telecommutes 95% of her work days, neither of us spend lavishly (hell, we even "coupon" for groceries), and I hit up our local salvation army thrift store quite often (our local one gets very nice items often). Maybe we're just "boring" - I'd call us thrifty. We save for retirement and kid's future educational needs and such - we're just not really big consumers.

Currently, though, with our income (and me being self employed where I don't have an employer matching my tax contributions) - we pay roughly a third of our combined income in some form of tax - be it federal, state, real estate, or personal property. So from the sounds of it, this type of tax would save a family like ours quite a lot of money, so I would think we'd be all for it.

On the other hand (assuming people think like me), wouldn't this lead to far less consumption - which wouldn't be a bad thing on the surface, but would hurt businesses as well as tax revenues?

 

[snogger]

In a much, much larger sense, my one "flaw" would be that the current system is almost completely "income" based, rather than "asset" based. A person is taxed on how much (or little) they add to their wealth, not on how much wealth they have. So a guy with $10m in asset but only $50k of income (extreme case, granted) pays less tax than a guy with no asset but $100k of income.

A tax blending both would be nice.

While a nice idea, seems like it would complicate the hell out of things even more than they already are.

Just forget all incomes and assets, increase sales tax to X amount, and make sales tax the ONLY tax that there is. Easy peezy, lemon squeezy. That's one way to combine both assets and income into the tax scheme while simplifying it quite a bit in the process.

How would it do that if the person isn't consuming? Maybe my mind is just so ingrained with the workings of an income tax that I can't wrap my head around anything else.

Does anyone out there not consume?

If the answer is yes, chances are they are not making money and being taxed anyway.

Not sure if that was what you meant or not.

edit.....also something to think about. Quite a few people out there do not pay taxes. Unless they decide to never spend any money on anything ever, there would really be no way for people not to pay taxes.

Maybe "not consuming" wasn't the proper wording. But I, for instance, really don't consume much at all (nor does my family). I mean, we live in a very nice house and have two cars (both purchased used) and all that jazz - but we don't go out to eat much at all, we've only gone out for a movie once in the past 2-3 years (new Star Wars movie), my wife telecommutes 95% of her work days, neither of us spend lavishly (hell, we even "coupon" for groceries), and I hit up our local salvation army thrift store quite often (our local one gets very nice items often). Maybe we're just "boring" - I'd call us thrifty. We save for retirement and kid's future educational needs and such - we're just not really big consumers.

Currently, though, with our income (and me being self employed where I don't have an employer matching my tax contributions) - we pay roughly a third of our combined income in some form of tax - be it federal, state, real estate, or personal property. So from the sounds of it, this type of tax would save a family like ours quite a lot of money, so I would think we'd be all for it.

On the other hand (assuming people think like me), wouldn't this lead to far less consumption - which wouldn't be a bad thing on the surface, but would hurt businesses as well as tax revenues?

Your family seems to be the abnormal, rather then the normal "American Family".. probably not worded correctly but you get the point

Most American family's have debt and yet continue to buy things that are not "necessities"..

If it wasn't that way you wouldn't see people lining up for a day or two outside stores to get the latest iPhone.. It's the "American way" to have the latest and greatest toy to show off..

IF prices stayed roughly the same with a FairTax, as they are now, I don't see the current consumption by most Americans changing.

 

[humpback]

Snogger, the numbers just don't add up. Corporations don't pay taxes on their sales, they pay them on their profits, which is a very small percentage of sales- Fair Tax would be on sales.

Think about it- Fair Tax is supposed to be revenue neutral. Even if you think that all of the savings from these corporate "hidden taxes" will be passed onto the consumer in terms of lower prices (which we know won't happen), how is it going to make up for the revenues lost from all of the taxes it gets rid of? Personal income taxes, capital gains taxes, estate and gift taxes, the employee portion of SS and Medicare taxes, etc.?

There are definitely positives of Fair Tax, but prices simply can't be the same if it's going to be revenue neutral (unless of course you expect other unrealistic scenarios to occur, like consumption skyrocketing).

 

[snogger]

Snogger, the numbers just don't add up. Corporations don't pay taxes on their sales, they pay them on their profits, which is a very small percentage of sales- Fair Tax would be on sales.

Think about it- Fair Tax is supposed to be revenue neutral. Even if you think that all of the savings from these corporate "hidden taxes" will be passed onto the consumer in terms of lower prices (which we know won't happen), how is it going to make up for the revenues lost from all of the taxes it gets rid of? Personal income taxes, capital gains taxes, estate and gift taxes, the employee portion of SS and Medicare taxes, etc.?

There are definitely positives of Fair Tax, but prices simply can't be the same if it's going to be revenue neutral (unless of course you expect other unrealistic scenarios to occur, like consumption skyrocketing).

IMO, I do think prices would stay relatively the same.

I'm not an economist, nor do I pretend to be one. just over the years of discussing this avenue it is what I've concluded..

Let's just say for the sake of argument that at the end of the day a large company saves 30% when switching to the FairTax by removing the Corporate tax and other costs associated with complying with the current Tax code.

If they dropped the price of the goods they sell by only 23%, then in theory they have actually increased profits by 7%..

. From the FairTax site:

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax.

These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases.

When the FairTax removes income, capital gains, payroll, and estate and gift taxes, the pre-FairTax prices of these goods and services will fall.

The removal of these hidden taxes may also allow wages to rise.

Exactly how much prices will fall and wages will rise depends on market forces.

 

[matttyl]

In a much, much larger sense, my one "flaw" would be that the current system is almost completely "income" based, rather than "asset" based. A person is taxed on how much (or little) they add to their wealth, not on how much wealth they have. So a guy with $10m in asset but only $50k of income (extreme case, granted) pays less tax than a guy with no asset but $100k of income.

A tax blending both would be nice.

While a nice idea, seems like it would complicate the hell out of things even more than they already are.

Just forget all incomes and assets, increase sales tax to X amount, and make sales tax the ONLY tax that there is. Easy peezy, lemon squeezy. That's one way to combine both assets and income into the tax scheme while simplifying it quite a bit in the process.

How would it do that if the person isn't consuming? Maybe my mind is just so ingrained with the workings of an income tax that I can't wrap my head around anything else.

Does anyone out there not consume?

If the answer is yes, chances are they are not making money and being taxed anyway.

Not sure if that was what you meant or not.

edit.....also something to think about. Quite a few people out there do not pay taxes. Unless they decide to never spend any money on anything ever, there would really be no way for people not to pay taxes.

Maybe "not consuming" wasn't the proper wording. But I, for instance, really don't consume much at all (nor does my family). I mean, we live in a very nice house and have two cars (both purchased used) and all that jazz - but we don't go out to eat much at all, we've only gone out for a movie once in the past 2-3 years (new Star Wars movie), my wife telecommutes 95% of her work days, neither of us spend lavishly (hell, we even "coupon" for groceries), and I hit up our local salvation army thrift store quite often (our local one gets very nice items often). Maybe we're just "boring" - I'd call us thrifty. We save for retirement and kid's future educational needs and such - we're just not really big consumers.

Currently, though, with our income (and me being self employed where I don't have an employer matching my tax contributions) - we pay roughly a third of our combined income in some form of tax - be it federal, state, real estate, or personal property. So from the sounds of it, this type of tax would save a family like ours quite a lot of money, so I would think we'd be all for it.

On the other hand (assuming people think like me), wouldn't this lead to far less consumption - which wouldn't be a bad thing on the surface, but would hurt businesses as well as tax revenues?

Your family seems to be the abnormal, rather then the normal "American Family".. probably not worded correctly but you get the point

Most American family's have debt and yet continue to buy things that are not "necessities"..

If it wasn't that way you wouldn't see people lining up for a day or two outside stores to get the latest iPhone.. It's the "American way" to have the latest and greatest toy to show off..

IF prices stayed roughly the same with a FairTax, as they are now, I don't see the current consumption by most Americans changing.

Sorry, I guess that's me just trying to add logic to a market - supply and demand type stuff. As a price goes up (due to the increased tax), demand/consumption will go down. Now, we'd also be removing another "price", in the form of no more income tax - so that would have to be factored in somehow.

 

[snogger]

In a much, much larger sense, my one "flaw" would be that the current system is almost completely "income" based, rather than "asset" based. A person is taxed on how much (or little) they add to their wealth, not on how much wealth they have. So a guy with $10m in asset but only $50k of income (extreme case, granted) pays less tax than a guy with no asset but $100k of income.

A tax blending both would be nice.

While a nice idea, seems like it would complicate the hell out of things even more than they already are.

Just forget all incomes and assets, increase sales tax to X amount, and make sales tax the ONLY tax that there is. Easy peezy, lemon squeezy. That's one way to combine both assets and income into the tax scheme while simplifying it quite a bit in the process.

How would it do that if the person isn't consuming? Maybe my mind is just so ingrained with the workings of an income tax that I can't wrap my head around anything else.

Does anyone out there not consume?

If the answer is yes, chances are they are not making money and being taxed anyway.

Not sure if that was what you meant or not.

edit.....also something to think about. Quite a few people out there do not pay taxes. Unless they decide to never spend any money on anything ever, there would really be no way for people not to pay taxes.

Maybe "not consuming" wasn't the proper wording. But I, for instance, really don't consume much at all (nor does my family). I mean, we live in a very nice house and have two cars (both purchased used) and all that jazz - but we don't go out to eat much at all, we've only gone out for a movie once in the past 2-3 years (new Star Wars movie), my wife telecommutes 95% of her work days, neither of us spend lavishly (hell, we even "coupon" for groceries), and I hit up our local salvation army thrift store quite often (our local one gets very nice items often). Maybe we're just "boring" - I'd call us thrifty. We save for retirement and kid's future educational needs and such - we're just not really big consumers.

Currently, though, with our income (and me being self employed where I don't have an employer matching my tax contributions) - we pay roughly a third of our combined income in some form of tax - be it federal, state, real estate, or personal property. So from the sounds of it, this type of tax would save a family like ours quite a lot of money, so I would think we'd be all for it.

On the other hand (assuming people think like me), wouldn't this lead to far less consumption - which wouldn't be a bad thing on the surface, but would hurt businesses as well as tax revenues?

Your family seems to be the abnormal, rather then the normal "American Family".. probably not worded correctly but you get the point

Most American family's have debt and yet continue to buy things that are not "necessities"..

If it wasn't that way you wouldn't see people lining up for a day or two outside stores to get the latest iPhone.. It's the "American way" to have the latest and greatest toy to show off..

IF prices stayed roughly the same with a FairTax, as they are now, I don't see the current consumption by most Americans changing.

Sorry, I guess that's me just trying to add logic to a market - supply and demand type stuff. As a price goes up (due to the increased tax), demand/consumption will go down. Now, we'd also be removing another "price", in the form of no more income tax - so that would have to be factored in somehow.

Sure.. IF the prices increased by 23% then BOOM... Used goods skyrocket, new goods dive and the economy tanks..

As I've posted above though... I do believe removing the cost to corporations due to complying with tax code+ removing the Payroll and Corporate taxes would allow them to drop their prices to a point that the 23% tax would make the prices relatively the same the day after FairTax was enacted compared to the day before.

here is my very simple way I look at it...

There are two burger joints in town..

One takes the reduction in cost, keeps prices the same as today, at the register adds the 23% tax and says "Sorry, taxes man, what are you going to do??"

The other Burger joint reduces their price by 23%, so that the total cost at the register is roughly the same as today..

Which company do you think people will spend their money at?

 

[humpback]

Snogger, the numbers just don't add up. Corporations don't pay taxes on their sales, they pay them on their profits, which is a very small percentage of sales- Fair Tax would be on sales.

Think about it- Fair Tax is supposed to be revenue neutral. Even if you think that all of the savings from these corporate "hidden taxes" will be passed onto the consumer in terms of lower prices (which we know won't happen), how is it going to make up for the revenues lost from all of the taxes it gets rid of? Personal income taxes, capital gains taxes, estate and gift taxes, the employee portion of SS and Medicare taxes, etc.?

There are definitely positives of Fair Tax, but prices simply can't be the same if it's going to be revenue neutral (unless of course you expect other unrealistic scenarios to occur, like consumption skyrocketing).

IMO, I do think prices would stay relatively the same.

I'm not an economist, nor do I pretend to be one. just over the years of discussing this avenue it is what I've concluded..

Let's just say for the sake of argument that at the end of the day a large company saves 30% when switching to the FairTax by removing the Corporate tax and other costs associated with complying with the current Tax code.

If they dropped the price of the goods they sell by only 23%, then in theory they have actually increased profits by 7%..

. From the FairTax site:

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax.

These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases.

When the FairTax removes income, capital gains, payroll, and estate and gift taxes, the pre-FairTax prices of these goods and services will fall.

The removal of these hidden taxes may also allow wages to rise.

Exactly how much prices will fall and wages will rise depends on market forces.

I don't think you're reading my posts. Again, a corporation only pays tax on it's profits, so that 30% rate is only on a small fraction of their sales. Take WalMart, for instance. Their tax bill is less than 2% of their sales. Even if they pass all of that tax savings on the consumer, it's less than a 2% decrease in prices. All of the other "savings" won't add up to a lot either, not even close to 30%, and if wages rise like they predict, that would just offset those savings and be passed on to the consumer.

 

[cincredfan]

The problem is they get both. The tax credits give them free money to do whatever they want with no stipulations. Not only that but they aren't considered taxable. That is what makes the least sense to me. Many people have little incentive to work.

If you don't mind me asking, what are some credits you're referencing here?

Not many child and earned income but ends up being a ton of money. I don't think people should make money on their taxes and if they do sure don't give them money that is nontaxable. Don't get me wrong I think there a tons of issues on the other end of the spectrum just chose the lower end as "1 flaw". I think it is great when people choose to work and there needs to be more differentiation between non-working and working but low skill low pay (less incentive to not work)

 

[snogger]

Snogger, the numbers just don't add up. Corporations don't pay taxes on their sales, they pay them on their profits, which is a very small percentage of sales- Fair Tax would be on sales.

Think about it- Fair Tax is supposed to be revenue neutral. Even if you think that all of the savings from these corporate "hidden taxes" will be passed onto the consumer in terms of lower prices (which we know won't happen), how is it going to make up for the revenues lost from all of the taxes it gets rid of? Personal income taxes, capital gains taxes, estate and gift taxes, the employee portion of SS and Medicare taxes, etc.?

There are definitely positives of Fair Tax, but prices simply can't be the same if it's going to be revenue neutral (unless of course you expect other unrealistic scenarios to occur, like consumption skyrocketing).

IMO, I do think prices would stay relatively the same.

I'm not an economist, nor do I pretend to be one. just over the years of discussing this avenue it is what I've concluded..

Let's just say for the sake of argument that at the end of the day a large company saves 30% when switching to the FairTax by removing the Corporate tax and other costs associated with complying with the current Tax code.

If they dropped the price of the goods they sell by only 23%, then in theory they have actually increased profits by 7%..

. From the FairTax site:

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax.

These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases.

When the FairTax removes income, capital gains, payroll, and estate and gift taxes, the pre-FairTax prices of these goods and services will fall.

The removal of these hidden taxes may also allow wages to rise.

Exactly how much prices will fall and wages will rise depends on market forces.

I don't think you're reading my posts. Again, a corporation only pays tax on it's profits, so that 30% rate is only on a small fraction of their sales. Take WalMart, for instance. Their tax bill is less than 2% of their sales. Even if they pass all of that tax savings on the consumer, it's less than a 2% decrease in prices. All of the other "savings" won't add up to a lot either, not even close to 30%, and if wages rise like they predict, that would just offset those savings and be passed on to the consumer.

But there is more to what a corporation currently pays in taxes then just the Corporate tax.. There is the Payroll tax and other cost associated with complying with the current code.

I've mentioned many times that I'm not 100% behind this plan as there are legitimate questions that someone like myself cannot answer.. Not to mention I think this type of major change is just to daunting/scary for most to take a leap of faith in. I'd say I'm at about 70/30 for..

Thus, the reason I posted above the CBO plan from 2010 in which we get rid of most/all deductions and credits..

IMO, that is the "fairest" way to solve the current Tax code that favors those that know how to play the game.

 

[Steve Tasker]

The problem is they get both. The tax credits give them free money to do whatever they want with no stipulations. Not only that but they aren't considered taxable. That is what makes the least sense to me. Many people have little incentive to work.

If you don't mind me asking, what are some credits you're referencing here?

Not many child and earned income but ends up being a ton of money. I don't think people should make money on their taxes and if they do sure don't give them money that is nontaxable. Don't get me wrong I think there a tons of issues on the other end of the spectrum just chose the lower end as "1 flaw". I think it is great when people choose to work and there needs to be more differentiation between non-working and working but low skill low pay (less incentive to not work)

Just to be clear -

- The "additional" child tax credit is refundable if a person has earned income of at least $3,000 in a year. Earned income is roughly defined as self-employment income plus wages. So a taxpayer does need to work, at least a little bit, to be eligible for this credit.

- The standard child tax credit is not refundable; a taxpayer with no tax (which would include someone who didn't work) will get no standard child tax credit.

I won't really argue the earned income credit other than to say that a taxpayer does need to have earned income in order to qualify for the earned income credit. The EIC phases out very quickly for people without children and seems to be primarily directed at working poor families. There seems to be a lot of fraud and shady dealings with the EIC, however.

 

[humpback]

Snogger, the numbers just don't add up. Corporations don't pay taxes on their sales, they pay them on their profits, which is a very small percentage of sales- Fair Tax would be on sales.

Think about it- Fair Tax is supposed to be revenue neutral. Even if you think that all of the savings from these corporate "hidden taxes" will be passed onto the consumer in terms of lower prices (which we know won't happen), how is it going to make up for the revenues lost from all of the taxes it gets rid of? Personal income taxes, capital gains taxes, estate and gift taxes, the employee portion of SS and Medicare taxes, etc.?

There are definitely positives of Fair Tax, but prices simply can't be the same if it's going to be revenue neutral (unless of course you expect other unrealistic scenarios to occur, like consumption skyrocketing).

IMO, I do think prices would stay relatively the same.

I'm not an economist, nor do I pretend to be one. just over the years of discussing this avenue it is what I've concluded..

Let's just say for the sake of argument that at the end of the day a large company saves 30% when switching to the FairTax by removing the Corporate tax and other costs associated with complying with the current Tax code.

If they dropped the price of the goods they sell by only 23%, then in theory they have actually increased profits by 7%..

. From the FairTax site:

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax.

These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases.

When the FairTax removes income, capital gains, payroll, and estate and gift taxes, the pre-FairTax prices of these goods and services will fall.

The removal of these hidden taxes may also allow wages to rise.

Exactly how much prices will fall and wages will rise depends on market forces.

I don't think you're reading my posts. Again, a corporation only pays tax on it's profits, so that 30% rate is only on a small fraction of their sales. Take WalMart, for instance. Their tax bill is less than 2% of their sales. Even if they pass all of that tax savings on the consumer, it's less than a 2% decrease in prices. All of the other "savings" won't add up to a lot either, not even close to 30%, and if wages rise like they predict, that would just offset those savings and be passed on to the consumer.

But there is more to what a corporation currently pays in taxes then just the Corporate tax.. There is the Payroll tax and other cost associated with complying with the current code.

I've mentioned many times that I'm not 100% behind this plan as there are legitimate questions that someone like myself cannot answer.. Not to mention I think this type of major change is just to daunting/scary for most to take a leap of faith in. I'd say I'm at about 70/30 for..

Thus, the reason I posted above the CBO plan from 2010 in which we get rid of most/all deductions and credits..

IMO, that is the "fairest" way to solve the current Tax code that favors those that know how to play the game.

Sure there are, but not anywhere close to 28% to get to your 30% savings number. They still would have to make up for all of the personal tax revenues lost as well, which combined are much larger than these corporate savings.

Again, I'm not arguing against the Fair Tax, just pointing out that there are some obvious negatives, just like there are with all plans. That doesn't mean that the positives don't outweigh the negatives, but supporters should be focusing on those positives instead of arguing that the negatives don't exist IMO. Prices will go up, which is fine if it's still a net benefit to consumers.

 

[Tom Hagen]

Snogger, the numbers just don't add up. Corporations don't pay taxes on their sales, they pay them on their profits, which is a very small percentage of sales- Fair Tax would be on sales.

Think about it- Fair Tax is supposed to be revenue neutral. Even if you think that all of the savings from these corporate "hidden taxes" will be passed onto the consumer in terms of lower prices (which we know won't happen), how is it going to make up for the revenues lost from all of the taxes it gets rid of? Personal income taxes, capital gains taxes, estate and gift taxes, the employee portion of SS and Medicare taxes, etc.?

There are definitely positives of Fair Tax, but prices simply can't be the same if it's going to be revenue neutral (unless of course you expect other unrealistic scenarios to occur, like consumption skyrocketing).

IMO, I do think prices would stay relatively the same.

I'm not an economist, nor do I pretend to be one. just over the years of discussing this avenue it is what I've concluded..

Let's just say for the sake of argument that at the end of the day a large company saves 30% when switching to the FairTax by removing the Corporate tax and other costs associated with complying with the current Tax code.

If they dropped the price of the goods they sell by only 23%, then in theory they have actually increased profits by 7%..

. From the FairTax site:

Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax.

These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases.

When the FairTax removes income, capital gains, payroll, and estate and gift taxes, the pre-FairTax prices of these goods and services will fall.

The removal of these hidden taxes may also allow wages to rise.

Exactly how much prices will fall and wages will rise depends on market forces.

I don't think you're reading my posts. Again, a corporation only pays tax on it's profits, so that 30% rate is only on a small fraction of their sales. Take WalMart, for instance. Their tax bill is less than 2% of their sales. Even if they pass all of that tax savings on the consumer, it's less than a 2% decrease in prices. All of the other "savings" won't add up to a lot either, not even close to 30%, and if wages rise like they predict, that would just offset those savings and be passed on to the consumer.

But there is more to what a corporation currently pays in taxes then just the Corporate tax.. There is the Payroll tax and other cost associated with complying with the current code.

I've mentioned many times that I'm not 100% behind this plan as there are legitimate questions that someone like myself cannot answer.. Not to mention I think this type of major change is just to daunting/scary for most to take a leap of faith in. I'd say I'm at about 70/30 for..

Thus, the reason I posted above the CBO plan from 2010 in which we get rid of most/all deductions and credits..

IMO, that is the "fairest" way to solve the current Tax code that favors those that know how to play the game.

Sure there are, but not anywhere close to 28% to get to your 30% savings number.

This. Corp. income tax is assessed on net not gross so a company with 10% net income would pay at most 3.5% of its revenue in tax. Employer payroll tax is 7.65% of wages, not sales. Companies would still have to get financial statements audited, prepare state income tax returns and administer Fairtax collection and remittance so compliance costs would be reduced but not eliminated. I don't see any way to get to 23% of revenue in savings.

 

[Peyton Marino]

Then you have yours truly who is stuck in an apartment (granted it's Bel Air) and can't afford (or rather refuses to pay 50% of our income) to buy a home that is larger in size/amenities in a similar neighborhood. Unfortunately, both of our jobs are in real estate and it doesn't make sense to move far from the west side.

oh wow, this is very specific information about where you live.