TPolicy: Congressman Steve King Invites FairTax Activists to Iowa Straw Poll

[djc1309]

See Mr. Congressman - There is no supporting evidence showing that there is 23% embedded taxes in the current selling price of a new product. You are promoting one of two things - Either a cut in the employees gross pay (same net as now) OR 20%+ higher prices at the pump and grocery store. Since a lot of salaries are fixed by contract, you must be supporting the higher selling prices. Please tell us WHY you support this method of taxation when it is obvious it will cripple the economy.

[shipprecked]

Once you understand it (the FairTax), You will demand it! If you don't see the advantages, Please go to fairtax.org and read. Once you understand it, you will demand it.

[RGeorgeDunn]

For charts on questions you have Garner, go to FairTax.org to ask questions ask to join facebook Group 'Fairtax 2012'. Your right that the 22% hidden federal tax is not all tax but employee pay that is taxes. However, the bottom line is on average, w/ all facotrs determined, 22% is an average reduction in product expense. It is figured the employer pays 12% federal tax on average. Charted.

[djc1309]

@RGeorgeDunn The employer pays 12% compared to what - Sales or Expenses? I have looked at a lot of figures and the average that I arrived at is that the Corporate income tax and the matching employers SS/HI comes out to 2.2% of sales. Even with 3 or 4 layers of distribution you only have a 5% or 6% reduction in price. $100.00 item less 5% = $95.00 plus 30% for the FairTax equals $123.50. Where are the supporting papers from STUDIES showing 23% embedded taxes?

[lfriedrichsen]

MerlinYoda - Even if there was a 0% reduction in the cost of an item due to the elimination of the current massive, complex, and wasteful federal income and payroll tax systems (for sake of argument!), would you really rather pay 23% on only new items or 35% on every $1 earned?

As for the millionaires...do you mean the farmer or small business that owns enough property to actually run a business? Perhaps you mean the teacher who is a guaranteed millionaire @ $50K/year x 20 years.

[LRAYBIRD]

Under the consumption Fair Tax, no federal income tax or SS/Medicare is withheld/matched by employers. Employees receive their entire wage, 100%. Employers no longer incur the expenses of complying with IRS regulations for their employees, vendors or themselves. Employers will pay sales tax on new materials, supplies and services used in the conduct of their business.

A smart business will see the competitive pricing opportunities these savings allow. If they don't, their competitors will.

[djc1309]

@LRAYBIRD Employers don't pay a dime in taxes under the FairTax. That is what is supposed to make them more competitive.

[LRAYBIRD]

@djc1309 You are correct. Under the current version of HR 25, Employers will not pay a dime in income taxes on their own business income. And, they will no longer have to match any FICA tax. And, their accounting and reporting cost will be drastically lowered. These eliminated and reduced costs give them the ability to lower the price of their products and services.

However, employers, like everyone else, will have to pay sales tax on new merchandise and services which they consume.

[djc1309]

@LRAYBIRD Sorry - But HR25 has been drafted up so that Business to Business pays no FairTax either. It does not matter whether the product is for consumption or for resale, business's under the FairTax will pay no taxes. Business's are the only entity that does not have to pay the FairTax. Individuals and Governments will.

[LRAYBIRD]

@djc1309 Refer to HR25, Sec 102 (c) "Conversion of Business or Export Property" ambiguously states that property purchased tax free for business purposes shall be subject to the sales tax if converted to personal use. What purchases does a business (sole proprietor to corporate conglomerate) make that would be for its final consumption and not included in the cost of producing its products or services? If your interpretation is correct, business can really lower prices of their wares.

[djc1309]

@LRAYBIRD Personally, I consider the purchase of printers, computers, paper, toilet paper, hand soap, etc. etc to be items that are consumed. The whole idea behind the FairTax is to relieve business of all taxes and push those taxes over to the consumer. That part of the FairTax I agree with. The consumer ultimately pays ALL taxes. The part that makes the FairTax not work is that you are shoving more of the tax burden over to the middle income by raising prices on goods by 20+%.

[LRAYBIRD]

@djc1309 How are prices raised? If you produce and then sell a product (wheat, houses, cars, anything) you set a selling price to cover all your expenses plus a profit. If suddenly you and your competitors were no longer required to pay income taxes on profit, would you raise the price of your product by 20%? If so, you're crazy because your competitors will probably lower their prices since they no longer have to pay an income tax or related administrative expense. This is a simple concept.

[djc1309]

@LRAYBIRD I run into this a lot with supporters of the FairTax. After you deduct what you pay for the employees portion of taxes AND what you would pay in income taxes, a company is only saving about 2.5% of sales. Lets assume that there are three layers of distribution, so your TOTAL savings (if everyone passes on their 2.5% of sales price) is about 5%. Take a $100.00 item, deduct 5% in savings and then add 30% for the Fair Tax. 100 X .95 = 95. 95 X 1.3 = $123.50. A net increase of 23.5%.

[LRAYBIRD]

@djc1309 Would you please direct me to the source of your reasoning. What are the layers of distribution? It appears you have confused VAT with Fair Tax. And, if so, I think you are also not understanding a VAT.

[djc1309]

@LRAYBIRD Did you receive my message?

[djc1309]

@MerlinYoda If you actually get to keep the taxes that are deducted from your check, then the only "embedded" taxes left art the Corporate income tax and their matching SS/MCare contributions. Those two taxes only add up to about 2% of the sales price of a product. Add in a couple layers of distribution and you MIGHT get up to 5%. Discount the current price by 5% and then add 30% to pay for the FairTax and you get a 23% increase in price. And cutting prebate checks to millionaires?? Not Smart.

[djc1309]

@MerlinYoda If you get more take home pay, then the only "embedded" taxes are Corporate income taxes and a corporations matching SS/MCare. Together, those two taxes only add up to about 2% of the total sales price. Add in a couple layers of distribution and about the maximum decrease in price will be around 5%. Discount a product by 5% and then add 30% to cover the FairTax and you have a 23% increase in price. And issuing PreBate checks to millionaires?? Not smart. This bird won't fly.

[garner49]

@djc1309  Before you condemn it, understand it. Your post shows that you don't.

[djc1309]

@garner49 Then explain it to me. Where is your supporting evidence (something besides your sales pitch manual) that shows where there is actually 23% embedded taxes. If the employee gets that tax money added to their check, then the maximum embedded taxes is between 5 and 6%. The congressman is promoting one of two things - Either a cut in your gross pay (same net as now) OR 20%+ higher prices at the pump and grocery store. Higher prices at the pump will finish flushing this economy.

[blrmdncr]

Support the Fairtax. I have. Obama's plan nearly bankrupted us spending 4 billion a day, 4 times the amount that Bush did. Obviously his "change" has failed the American people miserably; more jobs lost, more homes lost, more debt which will fall on the shoulders of future generations. Now IS the time for the Fairtax.

[vtshadow314]

I really do find it funny that all these people are freaking out about the 20% to 25% tax increase. lol.

What they dont get is that ALL of the embedded taxes on items now which can be as HIGH as 40% will NOT be on goods and services anymore. So the prices will pretty much stay the same. maybe even be lower. And if you buy something used. You pay ZERO tax on it. Cars and houses and whatnot. A used item can NOT be taxed. As it has allready had the taxes paid for it Upon sale to the orig. owner.

[djc1309]

Are you REALLY in support of raising the price of product at the retail level by 20% to 25%? What is that going to do for our economy?

[MerlinYoda]

@djc1309 The FairTax *replaces* the federal income-based taxes (personal, corporate, FICA, estate, etc) so you'll have more take-home pay (all of it if you don't have a state income tax or employer deductions) and prices will go down some amount due to the embedded cost of corporate taxes going away. Also the FairTax *untaxes* consumption up to the poverty level w/ the "prebate". Research available on fairtax.org and the legislation for HR 25 (the FairTax legislation) at thomas.loc.gov.

[garner49]

@djc1309 The FairTax replaces those embedded taxes, does not add to.  The cost of all goods will go down. Business's pass along to the consumer all the taxes they pay to produce and deliver.

[urgener]

I'm all in favor of the FairTax. It'll spread the "base" of taxpayers to include criminals, tourists and illegals. $400 Billion will be eliminated from the "compliance costs" of doing business. Since all taxes are paid by the final consumer (companies simply embed taxes into their prices), prices won't hardly change when income tax is removed and replaced with the FairTax. All this and the poverty poor will be completely untaxed, too.