Final-Fan said:
Eomund said:
WHAT? I never said that the FairTax will only equal 22% of income taxes. The 22% of the embedded taxes are business taxes we pay for every item. This is not including income taxes at all. The FairTax rate of 23% will effectively replace all income taxes and corporate taxes. The confusion I believe you are having is when you rip out the corporate taxes you have been thinking that I am including the taxes on the paystub of every paycheck of every employee. This is simply not the case. The price of goods needs to be related to the 22% embedded current tax VS. the 23% FairTax, and that is all that comparison is good for. What the 23% FairTax collects will be equal to the entire current tax system. Does the FairTax rate need to be much higher to be revenue neutral?
The proper tax rate has been carefully worked out; 23 percent does the job of: (1) raising the same amount of federal funds as are raised by the current system, (2) paying the universal rebate, and (3) paying the collection fees to retailers and state governments. Unlike some other proposals, this rate has been independently confirmed by several different, nonpartisan institutions across the country. Detailed calculations are available from FairTax.org. (source: http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#6) Again I understand this is from American's for Fair Taxation, but just accept it for now. |
"WHAT? I never said that the FairTax will only equal 22% of income taxes." You are correct of course, other people were putting words in your mouth and I have already edited to make this more clear after I saw your last explanation. What I am asking now is whether this (earlier) statement: Look, even SUPPOSING that there is a 22% "hidden tax" ON TOP OF the income tax etc., in that case how can you expect to replace it all with a 23% flat sales tax and come out with the government making the same amount of money?
22% tax + big income tax =/= 23% tax
Except if by magic. also reflects a misunderstanding of what you are saying. |
Thanks for clearing that up for me.
This 22% hidden tax, as you correctly called it, is indeed on top of the income taxes. The 22% is embedded in the price of each item we buy. So we pay those taxes when we buy anything really.
The FairTax would replace our current tax code lock, stock, and barrel. It has been researched and found that the 23% covers the revenue-neutral amount of tax, PLUS the Prebate, PLUS the bonus granted to the tax-collectors for their trouble (businesses and State governments). There is MORE money spent than earned through legitimate income sources. This extra taxbase will help cover the amount of tax being replaced.
