Income Tax & IRS are a JOB KILLER!!

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Our federal income tax system is the job killer.

With a national retail sales tax, people go back to work.

Would you put lead weights on Michael Phelps in Athens? Would you hitch a trailer to Jeff Gordon's car at Daytona? Would you tie Tom Brady's right hand behind his back at the Superbowl? No, not if you want winners.

What keeps American workers from being winners in the international marketplace? Not our efficiency. Not our work ethic. Not our willingness. Not our talent. Not our flexibility. Our American workers and farmers are handcuffed by the internal revenue code; chained down by the income tax. We must replace the income tax with a national retail sales tax so people can go back to work.

Here's how it works today. Under the current tax regime, if Oneida or Carrier or Smith Corona need supplies to manufacture their latest products, the supplier has to pay corporate taxes on its profits as well as spend money to ensure compliance with the tax code. Even if the suppliers earn no profit, they still have high tax compliance costs as do these former New York manufacturers' other suppliers for silver, paint, or ink. This continues down a long list of thousands of parts and supplies. None of these taxes add any value to the products; they only add cost. By their very nature, these income tax and compliance costs are very hard to identify and track in a complex economy, but top economists peg them at around 22 percent for goods and 25 percent for services.

Now, let's look at New York manufacturers' international competitors. Instead of income taxes, they pay a value-added tax (VAT), carefully tracked from supplier to supplier. When value is added - such as making raw chemicals into paint - at each stage of manufacturing, a bit of tax is applied and recorded. By the time their product is ready to export to the US, they know exactly how much tax has been paid. Upon export, all taxes are deducted from the price. It arrives in the US a net – 22-percent lower cost than the flatware, compressors, or typewriters manufactured here. It is no wonder that we lose jobs given the income tax handicap imposed on hard goods and farm products produced in the United States. To add insult to injury, our country has signed trade treaties in which we promise not to deduct our income tax costs, even if we could isolate them. Alternatively, we allow international competitors to deduct their VAT costs.

The solution is to make the United States more competitive on the international playing field by enacting the FairTax, also known as the national retail sales tax. This would make the United States more competitive than nations with a VAT tax because there are no taxes hidden in the cost of manufactured or grown products, as the tax is applied only at retail. The FairTax levels the field with VAT countries, their manufacturers, and farmers. Compliance costs are reduced because there is no tax at all on business-to-business transactions. This provides a competitive advantage to American manufacturers and farmers.

Under a national retail sales tax, manufacturing comes home bringing its corporate headquarters and offshore capital to America with it. Jobs are created at all levels.

It is time we released our American workers from the chains of the income tax and unleashed a new era of American competitiveness with the FairTax national retail sales tax. Is your congressman a co-sponsor of the FairTax act? Your senators? They should be.

Steve King represents Iowa's 5th district and is a co-sponsor of HR 25, the FairTax (www.fairtax.org). For more information on Congressman King, go to www.house.gov/steveking.

Contact Information:

Genie Hayes

[email protected]

FairTax.org

Americans For Fair Taxation

713-963-9023 #137

Or

Brenna Findley

Deputy Chief of Staff

Rep. Steve King (IA-5)

202-225-4426

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Have you heard about AMWAY products?

I wonder if you can still sell those.
You don't actually sell the product. You sell selling the product.

Don't steal the pen from a potential employer and walk out the door with it.

This is true, whether it is a ball point or a fountain pen.

And you don't tune a Mercedes by exchanging an injection system for a carbeurator. You could. But why would you?

We like you. Don't worry about that. Rumor has it you're well liked all over and that your mistress misses you.

And give my regards to Biff.

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Re: Income Tax & IRS are a JOB KILLER!!

chugalugalug wrote:

What keeps American workers from being winners in the international marketplace? Not our efficiency. Not our work ethic. Not our willingness. Not our talent. Not our flexibility. Our American workers and farmers are handcuffed by the internal revenue code; chained down by the income tax. We must replace the income tax with a national retail sales tax so people can go back to work.

Actually high wages are the primary reason for outsourceing.

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Here's how it works today. Under the current tax regime, if Oneida or Carrier or Smith Corona need supplies to manufacture their latest products, the supplier has to pay corporate taxes on its profits as well as spend money to ensure compliance with the tax code. Even if the suppliers earn no profit, they still have high tax compliance costs as do these former New York manufacturers' other suppliers for silver, paint, or ink. This continues down a long list of thousands of parts and supplies. None of these taxes add any value to the products; they only add cost. By their very nature, these income tax and compliance costs are very hard to identify and track in a complex economy, but top economists peg them at around 22 percent for goods and 25 percent for services.

So?

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Now, let's look at New York manufacturers' international competitors. Instead of income taxes, they pay a value-added tax (VAT), carefully tracked from supplier to supplier. When value is added - such as making raw chemicals into paint - at each stage of manufacturing, a bit of tax is applied and recorded. By the time their product is ready to export to the US, they know exactly how much tax has been paid. Upon export, all taxes are deducted from the price.

Which is dumb, we ought not to refund the VAT uppon export. If we didn't do that we wouldn't have to tax incomming goods. Not refunding the VAT combined with not taxing imports would produce the same results while saving us administration costs.

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It arrives in the US a net - 22-percent lower cost than the flatware, compressors, or typewriters manufactured here.

This is not true, exchange rates adjust to cancel out the difference.

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It is no wonder that we lose jobs given the income tax handicap imposed on hard goods and farm products produced in the United States. To add insult to injury, our country has signed trade treaties in which we promise not to deduct our income tax costs, even if we could isolate them.

Doesn't matter either way, exchange rates adjust to cancel out the difference.

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Alternatively, we allow international competitors to deduct their VAT costs.

Again, no effect.

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The solution is to make the United States more competitive on the international playing field by enacting the FairTax, also known as the national retail sales tax. This would make the United States more competitive than nations with a VAT tax because there are no taxes hidden in the cost of manufactured or grown products, as the tax is applied only at retail.

First, taxing exports, (present system) and taxing imports, (when sold in retail) both have the same effect.

Second, taxing exports, (as a VAT would if not coupled with refunds and import taxes) and taxing imports, (as our VAT does since it is coupled with refunds and import taxes) both have the same effect.

Third, taxing imports, (as you would be doing with the retail thingy) and taxing imports, (as we are doing with the VAT with refund and import tax)
certainly have the same effect.

Fourth, you claim taxes are hidden in the cost of manufactured and grown products exported from nations with a VAT, refund and import tax system, explain.

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The FairTax levels the field with VAT countries, their manufacturers, and farmers. Compliance costs are reduced because there is no tax at all on business-to-business transactions. This provides a competitive advantage to American manufacturers and farmers.

Not really, because retail tax on imports have the same effect.

Would you agree that a non refundable VAT coupled with same percentage tarrifs on exported services would be preferable to a retail tax? If not, why.

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The "same effect" measures that you suggest would be far, far more complicated and cumbersome to administer than a simple one-time-only, one-place-only sales tax.

At the check-out register the sales tax is done by a computer program.

The taxes collected by the computer program are then sent to the taxing authority by electronoc transfer.

The costly labor of human hands is not needed in this process and it is done LIGHTNING FAST!!

The only cost is for the personnel who audit and police the retailers.

There are one-tenth as many retailers as there are tax filers now. that means they can be policed TEN TIMES AS WELL.

We don't need a MORE EXPENSIVE!! way of generating revenue when we can do it on-the-cheap by using the far more EFFICIENT Fair Tax (national sales tax).

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Thing is, with the sales tax people would simply post order items rather than buy them retail. This would make it necessary to raise taxes in order to preserve revenue, more people would buy things post order, or avoid the sales tax in other ways, and the whole system would spiral out of controll.

A sales tax would spawn a logit black market selling used goods bought outside the country, and which has therefore evaded taxation. Taxing production and service exports would avoid this problem, and the tax would still be easy to enforce.

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Einherjar,

45 of the 50 states use a sales tax to generate revenue.

Why haven't all of your dire predictions occurred in those states???

I live in Texas where there has been an 8.75% state sales tax for decades and I see none of your predictions happening.

Well over 90% of the sales tax owed in Texas is being regularly collected.

If anyone in Texas were significantly eveding the sales tax, there would be news media stories about it.

There are not enough used goods to "keep the world going" and evade all sales tax. What is bought is constantly being consumed or worn-out.

A constant flow of new goods "feeding" into the system is necessary to keep it going.

Have you noticed that e-bay hasn't replaced conventional retailing or even come close to doing so???

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chugalugalug wrote:

Einherjar,

45 of the 50 states use a sales tax to generate revenue.

Why haven't all of your dire predictions occurred in those states???

My dire predictions will only come to pass with a signifficant taxburden.

And I belive people are avoiding sales tax in those states by buying goods by postorder, although not to the extent I predict in the event of a heavy taxation of retail sales.

Quote:

I live in Texas where there has been an 8.75% state sales tax for decades and I see none of your predictions happening.

I'm sure some people are buying things by postorder, although due to time delays this only becomes lucrative with a higher sales tax.

Besides, like with the canadian drug buisnes, media atention is a required catalyst for people to start exploiting the opportunities.

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Well over 90% of the sales tax owed in Texas is being regularly collected.

How is that calculated? Define "sales tax owed".

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If anyone in Texas were significantly eveding the sales tax, there would be news media stories about it.

Perhaps, and if there were news stories about it everybody would soon be evading the sales tax. At least if there was enough of a tax to evade to justify the wait that comes with post order.

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There are not enough used goods to "keep the world going" and evade all sales tax. What is bought is constantly being consumed or worn-out.

You seem to have missed my point, my point was that goods would be retailed outside of the country, and therefore be classified as "used goods" thus avoiding the sales tax. It's a loophole.

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A constant flow of new goods "feeding" into the system is necessary to keep it going.

And if this goods is fed into the system by post order, or by eny other means which outsources retailing, the sales tax would fail to generate revenue.

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Have you noticed that e-bay hasn't replaced conventional retailing or even come close to doing so???

Have you noticed that your "fair tax" would make it considerably more compeditive? Have you considered that news stories about loopholes in the sales tax would serve as free advertising for them?

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Income Tax & IRS are a JOB KILLER!!

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