I think I have a little bit more than an average US person's experience with the tax codes of the Federal government and the several states, including practicing in the only US state with a Value Added Tax (VAT), aka the Michigan Single Business Tax (SBT) and working with clients in Canada, Mexico, and the UK which all have VAT taxes. I have been slow to respond because I wanted to go out and read some of the material before shooting my mouth off. Oops; too late. Here are my points:
There is no mathematical difference in the Federal/National sales tax proposed and every VAT I have ever seen. The only difference is the calculation used. I can guaranty that with any tax rate equal or greater than about 10%, the costs to administer the tax will skyrocket. When the tax rate is high enough the benefits of not paying it (legal or illegal) are too much for people to ignore. With just my cursory review I saw enough administrative and other loopholes that I could make good money as a tax advisor. The law does not get rid of the IRS, it just renames it by shifting some of the work to the states. Most states have sales taxes and tax agencies today, but this will balloon their size and power Do not worry; someone at the US Treasury has to monitor the states. There is nothing in the law that keeps Congress from "fixing" the tax law the next year after they pass it. After all they have to plug the loopholes that appeared when I started advising clients on how to game the system and I am sure they would find "needy" campaign contributors that deserve special dispensation. Instead of one IRS, you will have at least 54 of them depending on how you count the territories. And with more money at stake the fights at the state level will make administration harder, not easier. Any and every compliant about the old tax code will apply to the new tax code within 5 years, OK, maybe 10 years. Any problem temporarily solved by the new tax could be fixed in the old tax. For the record; Warren Buffet pays less tax as a percentage of his income than his administrative assistant. If you do not believe it, go ask him. At least I trimmed off 90% of the email trail at the bottom. ________________________________ From: [email protected] [mailto:[email protected]] On Behalf Of Larry Alster Sent: Monday, September 28, 2009 12:07 PM To: 'Mark Cookson' Cc: 'Will Erickson'; [email protected]; 'Rob Argento' Subject: RE: NMC - Healthcare Crisis Debate / Gay Marriage /Fair tax I didn't mean it to say you were a Democrat. I meant it to say that the facts you quote are exactly what the Democrats against the plan start out spewing. The first thing is the magic, "It will cost you 30%" Even factcheck.org has links posted to articles saying factcheck is wrong. http://www.factcheck.org/UploadedFiles/Fairtaxrebuttal1.doc The basics are No withholding taxes at all No taxes on anything but a completed product when it is sold for the first time. A prebate given to all to remove the tax burden on costs at the poverty level. There is just way too much to cover here but if you read something by the people who actually wrote the law instead of a think tank that is against it you will see it's a plan that should a lot to stimulate the economy without hurting the "poor". The problem is it does one thing the government would hate, it takes away the power of Congress to control taxes breaks for the special interests. Larry Alster 91 Miata White Knight 92 Miata Silver Bullet 92 Miata Honey B 04 MSM MX-5 Whooosh 06 WRX STi Subie
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