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

Congressman Steve King Invites FairTax Activists to Iowa Straw Poll

Category:

News & Politics

Tags:

• FairTax
• 2012
• Iowa Straw Poll
• election
• Steve King
• politics
• FairTax Nation
• taxes
• conservative
• tea party
• Herman Cain
• Mike Huckabee
• Gary Johnson
• invitation

[djc1309]

@LRAYBIRD Did you receive my message?

[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 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 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 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 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 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 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]

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.