Comeptitive businesses will be under pressure to reduce prices, if
the tax is applied to government sncation monoplies like utilities in
some areas the monoplies will have an incentive to not cut
prices.
Of course it is highly likely many small business will cut
their prices because they will not collect the sales tax, the under
ground economy will get larger not smaller but I don't necessarily
think that is bad.--- In [email protected], "kiddleddee"
<[EMAIL PROTECTED]> wrote:
>
> Another problem that I see with the "fair" tax is this: According
to
> even the "Fair Tax" people, since businesses pass their tax burden
on
> to consumers in the form of higher prices, income taxes (directly
or
> indirectly) make up more than 20% of the retail price of products -
> others say MUCH more! Does that mean that with the passage of
> the "fair" tax, retail prices will immediately come down 20% (or
> more)? Or does that mean that the "fair" tax will mean a 20%(or
> higher) government-mandated boondoggle for businesses at the
expense
> of consumers?
>
>
> --- In [email protected], "Thomas L. Knapp"
> <thomaslknapp@> wrote:
> >
> > Quoth Boyd W. Smith:
> >
> > > There is an old saying that says that the perfect is the enemy
of
> > the better. The fair tax while not perfect is clearly much
better.
> >
> > Only if by "clearly much better" you mean it:
> >
> > - Results in the theft by government of just as much money as the
> > income tax (the "Fair" Taxers boast that their proposal
is "revenue
> > neutral");
> >
> > - Results in the same amount of, or perhaps more, redistribution
of
> > wealth than the income tax (the "Fair" Taxers boast that their
> > proposal is at least as "progressive" as the income tax);
> >
> > - Puts every American on the dole so that they're recipients of
> > monthly government welfare checks which the majority will likely
> fight
> > tooth and nail to keep coming in perpetuity (the "prebate"); and
> >
> > - The "Fair" Taxers arguments about eliminating the IRS aside,
> _will_
> > require a bureaucracy to administer (both to collect and to send
out
> > the welfare checks).
> >
> > The "Fair Tax" is at _least_ as bad as the income tax in every
way,
> > and worse in some ways. It's not a tax cut. It's not a tax
> > elimination. It's just a strengthening of the tax system by
linking
> it
> > to a welfare program -- just like Social Security, which has been
a
> > "third rail" issue in American politics for half a century
precisely
> > because millions of Americans have a vested interest in keeping
the
> > checks coming.
> >
> > It may not be politically possible to get the income tax straight-
> out
> > eliminated right now, but it is politically possible to get it
CUT,
> > which would be a far superior alternative to the "Fair" Tax.
> >
> > The Boston Tea Party's program calls for universal, bottom-up tax
> cuts
> > as follows:
> >
> > "The Boston Tea Party calls for legislation adopting an annual,
> > regularized increase in the personal exemption to the federal
income
> > tax of $1,000 or more, and the additional application of said
> personal
> > exemption to all FICA/Social Security taxes paid by employees and
> > employers."
> >
> > Members of Congress (mostly Democrats) routinely propose and vote
> for
> > increases to the personal exemption, so it's politically doable.
> >
> > Increases to the personal exemption give EVERYONE who pays taxes
a
> tax
> > cut, from the janitor at the local factory to Bill Gates.
> >
> > Increases to the personal exemption remove people from the tax
rolls
> > and withholding treadmill entirely (every time the exemption goes
> up,
> > more people's income falls below the taxable amount).
> >
> > Applying the personal exemption to Social Security payments would
> > address the extreme regressivity of the Social Security system.
The
> > poorest people pay proportionately the most in Social Security
taxes
> > (since the requirement to pay is capped at a certain income level
> in,
> > I believe, the $60K range), and they receive the fewest benefits
> (due
> > to shorter lifespan).
> >
> > Eliminating the income tax is the best option. Failing that,
cutting
> > it is. Replacing it with a tax that doesn't cut taxes, doesn't
> remedy
> > redistribution problems, doesn't eliminate (or probably even
reduce)
> > the associated bureaucratic and administrative costs, and puts
every
> > American on government welfare is just a scam if the goal is to
> reduce
> > or eliminate taxation.
> >
> > Tom Knapp
> >
>
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