Obama '08?

okie wrote:

The thing I love about the last posts of cyclops was that he inadvertantly admitted that Republicans promoted huge tax rebates to the working poor!!! I thought I would never see this amount of honesty here, after all, Democrats always claim that Republicans only give tax breaks to their rich friends. That rare bit of honesty in regard to tax policy, we should not allow Cyclops to forget it.

Haha, Okie.

While Republicans do support the Child Tax credit, the amount of money that this saves people is dwarfed by that of the tax cuts Republicans would like to see directed towards the rich.

But you are correct, Republicans do support the refundable child tax credit. And this is a little odd. B/c on one hand, you guys bitch about people who 'pay no tax' or 'get back more than they put in,' and on the other, you support tax laws which are directly responsible for this.

How do you square that?

I will ask the question again, Okie - why do you think people live in CA, despite the high prices?

Cycloptichorn

Hi Okie,

Got to make sure that we apply that 25-27% sales tax to ALL transactions, and that includes the buying and selling of stock. For the Fair tax to work, it needs to impact the activities of the rich at each and every point, not just those of the poor.

Other than that I think the proposal is worth looking into; I would start by studying the VAT in England and see how it works for them.

Cycloptichorn

Cycloptichorn wrote:

Hi Okie,

Got to make sure that we apply that 25-27% sales tax to ALL transactions, and that includes the buying and selling of stock. For the Fair tax to work, it needs to impact the activities of the rich at each and every point, not just those of the poor.

Other than that I think the proposal is worth looking into; I would start by studying the VAT in England and see how it works for them.

Cycloptichorn

All transactions, not so fast. I don't think so on used stuff, or stuff thats already been taxed once. That may include stocks, cyclops.

I do not profess to be an expert on this, there are lots of kinks to work out, and decisions to make in regard to its structure, and you are right, I need to look at similar systems elsewhere, but I don't believe I like the idea of a VAT, which may tax everything every time something is sold, I rather favor only taxing the end product at the retail sales level.

But again, the tax is applied, and if its 25%, thats scary, but only because it is now visible, the 25% tax has been there all along but its hidden into the cost. I like the visibility of the tax, and again, the products should be cheaper to start with, and people will have more disposable income with which to buy.

What you describe IS a VAT. And it has to be applied at every step, otherwise you're leaving gigantic loopholes for people to avoid paying any taxes at all.

Cycloptichorn

Cycloptichorn wrote:

What you describe IS a VAT. And it has to be applied at every step, otherwise you're leaving gigantic loopholes for people to avoid paying any taxes at all.

Cycloptichorn

No, the Fair Tax is not a VAT. A Vat destroys much of the advantage of the retail sales tax. Cyclops, existing state and local sales taxes are not VATs, so you cannot claim that taxing at only the retail level is unfeasible.

A VAT would begin to punish manufacturers at every turn, throughout the entire process, and would therefore negate the one big advantage that I talked about, reducing the price of manufacturing of products in this country. I would staunchly oppose that I believe.

But a local or state auditor of sales tax could punch a few buttons and find out about your fraud in a pretty short time.

You missed Cyclops' scam example, Okie. He is suggesting that he could open a business - The Cyclop Store - on line offering to sell Raman Noodles, Pabst Blue Ribbon beer and anything else Cyclop's uses personally. The business would buy stuff tax-free because it was for resale. He would offer similar stuff in his on-line store hoping no one would buy anything. He was making the argument, if I read it right, that a VAT is preferable to a Federal Sales Tax, neither of which he is advocating.

realjohnboy wrote:

You missed Cyclops' scam example, Okie. He is suggesting that he could open a business - The Cyclop Store - on line offering to sell Raman Noodles, Pabst Blue Ribbon beer and anything else Cyclop's uses personally. The business would buy stuff tax-free because it was for resale. He would offer similar stuff in his on-line store hoping no one would buy anything. He was making the argument, if I read it right, that a VAT is preferable to a Federal Sales Tax, neither of which he is advocating.

For cyclops to operate an operation for resale, to avoid paying the sales tax himself, he needs to show that he has a tax license. If he has a tax license, then he will be in the system as a licensed reseller. A licensed reseller would show up very very easily in the system, if he shows no payment of sales tax collections.

There is little doubt that some fraud would be attempted, and a very small percentage of uncollected sales tax, or black market activity, would likely exist, however, I have trouble foreseeing that it would be anywhere near the magnitude of the current problems of noncollection. A couple of things here, first there is already a mechanism of local and state authorities watching local activities, which I've already mentioned. Secondly, since retailers would get very very animated over somebody giving them illegal competition, anybody that sells on a significant scale that does not collect sales tax, thus taking the business away from legitmate businesses, this would probably get reported for investigation pretty rapidly. As it is, one taxpayer has little reason to suspect, or even care whether other tax payers are obeying the law.

cyclops, I think your scheme would be easily checked out and you would be convicted.

What easier system is defrauded than the one we have now?