Obama '08?

rjb, Actually, Cyclo would be able to get away with it. As in most retail business, it's not difficult to depreciate items to (almost) zero value. When I worked for Florsheim Shoe Company, we used to depreciate shoes down to $5 (it could have been marked down to zero), except we would lose control of inventory if we did that.

That's one of the reasons why I had to laugh when outside auditors (CPAs) came to the company to perform audits; they really didn't know what they were looking at. It was easy to play games with retail value on almost every product in the store, and it would be practically impossible for outside auditors to catch it. Markdowns were taken twice a year, and written off at the end of the fiscal year.

How would you know that I was transferring my business property for my personal use? You don't have an IRS to look into that.

What about foreign purchases? How would you prevent people from ordering stuff from abroad and pay no taxes?

You say that we need 'further study,' and I agree. But it's hard to see why we should switch to a system which has problems with very simple question.

Cycloptichorn

Okie- Your comment on tax rates reminded me of a site which showed that the bottom 50% of taxpayers just don't do very much to support the country with their tax and that the 1% at the top bear a disproportionate share of the burden.

I really believe that the left's frantic drive to increase the tax burden on the top 10% stems from ENVY. They are jealous that they have not achieved as much as the top 10%

Among the most envious are people like Cyclops. As an academic,he probably agrees with his colleagues that academics are the most brilliant people around and that the world would bebetter off it they, the academics, were running things.

Note:

Summary of Federal Individual Income Tax Data, 2006
(Updated July 2008)


Number of Returns with Positive AGI
AGI ($ millions)
Income Taxes Paid ($ millions)
Group's Share of Total AGI
Group's Share of Income Taxes
Income Split Point
Average Tax Rate

All Taxpayers
135,719,160
$8,122,040
$1,023,739
100%
100%
-
12.60%

Top 1%
1,357,192
$1,791,886
$408,369
22.06%
39.89%
> $388,806
22.79%

Top 2-5%
5,428,766
$1,185,828
$207,311
14.60%
20.25%


17.48%

Top 5%
6,785,958
$2,977,714
$615,680
36.66%
60.14%
> $153,542
20.68%

Top 6-10%
6,785,958
$865,430
$109,060
10.66%
10.65%


12.60%

Top 10%
13,571,916
$3,843,144
$724,740
47.32%
70.79%


> $108,904 18.86%

Top 11-25%
20,357,874
$1,692,686
$158,413
20.84%
15.47%
9.36%

Top 25%
33,929,790
$5,535,830
$883,153
68.16%
86.27%
> $64,702
15.95%

Top 26-50%
33,929,790
$1,569,769
$110,023
19.33%
10.75%


7.01%

Top 50%
67,859,580
$7,105,599
$993,176
87.49%
97.01%
> $31,987
13.98%

Bottom 50%
67,859,580
$1,016,441
$30,563
12.51%
2.99%
< $31,987
3.01%


Source: Internal Revenue Service,

How do sales tax collectors do it now? The local treasurers could look into reports of abuse pretty easily it seems to me, and if the abuse is so small as to avoid proof, it is not going to matter. Every day in this country, probably millions of transactions occur with cash for merchandise or work done, and wages paid to employees in cash, and so on. The current system is being gamed in a very big way. So you are implying that we would be abandoning a system with no abuse to one that has abuse, and that is simply not the case at all. The key to enforcement is to make punishment severe enough on those that abuse the system, fitting to the degree of abuse, to deter anyone from becoming involved in abuse.


There are ways to check merchandise entering the country, especially large amounts, I think, to enforce compliance. I don't see this problem as much different than the problem we currently have in this regard.


The current system is riddled with abuse, cyclops, that is a point you seem to forget. I have not claimed a retail sales tax is without kinks and problems, and it would also suffer some abuse, but the key is whether the abuse would be less than the current one. I can't say that for sure, but is seems to me it should be. I admit I should read Bortz's book, I haven't, but I have heard him explain the different facets of the plan in interviews.

Cyclops, to back up, I have never argued that I was for sure in the tank for switching to the retail sales tax, but I have argued that it seems to have alot of potential, I have pointed out the apparent advantages, and I have pushed for seriously considering it. Count me as one needing more absorption of information on this as well, but I think you are dismissing it out of hand without justification. I admit that such a radical change in how we collect taxes is cause for being very nervous about the potential change and transition, and every available resource and skill would be required to do it efficiently, if that should be the decision. But again, we already have a track record for sales taxes, with states and local, so its not as if we know nothing about this.

On a different note, in regard to Obama's vetting process, did he vet his own vice president properly?

"Rogue Financier Stanford Linked to Fund Run by Bidens"

http://www.foxnews.com/story/0,2933,499067,00.html

P.S. Did he vet himself?

"Obama's Vetting Process Draws Scrutiny After Cabinet Withdrawals"

http://www.foxnews.com/politics/first100days/2009/02/04/obamas-vetting-process-draws-scrutiny-cabinet-withdrawals/

I agree that the idea merits further study; I just think that the actual implementation of it would be much more like the VAT than it would the traditional sales tax, due to the various problems which must be addressed.

Cycloptichorn

Just to wrap up, perhaps, this discussion of a Retail Sales Tax or VAT:
Cyclops suggested setting up a phoney company that would buy stuff for personal use w/o paying sales tax and then offering a minimal amout of the stuff at his on-line store. A red flag will go up when you file your monthly sales tax returns and you report virtually no sales. That is going to be noticed by the local or state people.
Secondly, you will not be able to order from a wholesaler (at least in my industry) unless you have a physical store and/or buy in really big quantities. You would have to buy from "other retailers," like, for example, me. In order for you to be exempt from tax, you have to give me, in VA, an ST-10 form with your business ID#. The state could ask me to file the equivalent of a 1099 form each year showing how much you bought from me. Even the newest store clerk could be trained to punch in the amount of your purchase and that would be reported and a computer in City Hall could detect that your purchases far outstrip your sales. You would get a call asking to see your inventory.
Your scam could, I contend, be pretty easily foiled.
Thanks for the discussion, Okie and Cyclops. Sorry to others for cluttering up the Obama thread. This idea will never go anywhere, but I do hope it continues to be explored.
-johnboy-

Realjohnboy wrote:

Cyclops suggested setting up a phoney company that would buy stuff for personal use w/o paying sales tax and then offering a minimal amout of the stuff at his on-line store. A red flag will go up when you file your monthly sales tax returns and you report virtually no sales. That is going to be noticed by the local or state people.

Absolutely correct--Cyclops has never run a business. He is an academic. They don't know much about the real world in those Ivory Towers.

It seems that you have run a business, realjohnboy. Many of these posters have never met apayroll so they don't know how difficult it is to be an entrepreneur.

rjb, You point out some of the "handicaps" of creating a false store in order not to pay sales tax. The cost of the store alone will be prohibitive; it'll be alot cheaper to pay the sales tax. To start a business, you must first get a business license, then order the products to be sold. If you don't hire salespeople, you must be available as the sole proprietor, salesman, bookkeeper, and janitor. Rent and utilities alone will eat you alive.

Who would go through all the trouble just to skip on paying sales taxes?

Okie's overlooked link---It should be addressed since it suggests an important question--Since Obama's group can't even do a simple vet job, how can they be expected to handle the much more difficult and complex stimulus package and bank rescue without, as Obama said--"Screwing up"?


Note: quote from Okie's link

President Obama won praise for overseeing a White House transition that started off smoothly and proceeded at record pace, with most of his Cabinet nominated within two months of the election.

But after three of his nominees withdrew their nominations over embarrassing revelations, questions have been raised about Obama's vetting process.

Tax problems forced former Sen. Tom Daschle, who would have headed the Department of Health and Human Services, and Nancy Killefer, nominated as a government performance officer, to withdraw their names Tuesday. And a pay-to-play investigation in New Mexico knocked Gov. Bill Richardson out of contention for commerce secretary last month.

Obama aides said Wednesday the president made more than a simple mistake in trying to save Daschle's nomination.

"I think in the interest of getting those appointments, the president trumped the principles he laid out in the campaign and he took responsibility for that," White House spokesman Robert Gibbs said.

end of Okie's link.

Very good points, rjb, in regard to the sales tax. I would make the observation that as the overall sales tax rates rise to 20 or 30%, the inclination to avoid it, for black markets to attempt to operate, they would increase. And I have heard that bartering might proliferate. However, in this age of mass produced goods, and the inherent economy of mass production, I doubt that bartering on an individual basis with whatever you could make, grow, or provide, could be profitable enough to overcome the economy of mass produced goods purchased from large retailers, even with sales tax attached. And if this practice was done on a large scale, it could easily be found out and eliminated.

In another issue, Obama decides to extend policies of prisoners in Afghanistan. Question, why are these prisoners different than Gitmo? Why not just ship Gitmo prisoners to Afghanistan? Problems solved.

"Obama's Refusal To Reverse Bush Policy In Afghanistan Angers Human Rights Groups"

http://www.huffingtonpost.com/2009/02/22/obamas-refusal-to-reverse_n_168952.html

Okie- Say it isn't so!!!!Obama deserting the left wing that did so much to put him into power? Maybe Obama is a hypocrite. Maybe he isn't a hypocrite but rather just a politician who will say ANYTHING before he is elected and then will operate as a Machiavellian after he is in power. Your link to the far left Huffington Post is too good not to print( in part)

Less than a month after signing an executive order to close the Guantanamo Bay prison camp, President Barack Obama has quietly agreed to keep denying the right to trial to hundreds more terror suspects held at a makeshift camp in Afghanistan that human rights lawyers have dubbed "Obama's Guantanamo".

In a single-sentence answer filed with a Washington court, the administration dashed hopes that it would immediately rip up Bush-era policies that have kept more than 600 prisoners in legal limbo and in rudimentary conditions at the Bagram air base, north of Kabul.

Now, human rights groups say they are becoming increasingly concerned that the use of extra-judicial methods in Afghanistan could be extended rather than curtailed under the new US administration. The air base is about to undergo a $60m (£42m) expansion that will double its size, meaning it can house five times as many prisoners as remain at Guantanamo
****************************************************

A GREAT PHRASE--OBAMA'S GUANTANAMO!!!!!

Obama looks good tonight.

Cycloptichorn

Obama made a few decent statements, I will give you that, but the speech does not change the reality of what is happening in regard to spending and all the other policies.

Yeah, yeah. This is like you saying you loved it!

Cycloptichorn

I wonder why we are not talking about this speech....my suspicion is that we are all thinking about the Bill Clinton speeches that sounded so great but at the end of the day meant nothing at all and the fact that just about no one has any faith in Washington's ability to deal with this economic crisis nor just about anything else. It is a speech, so what....we are thinking something like "come talk to be after that crowd does something wise and worthwhile....and I won't hold my breath waiting"

You suspect wrong, I would bet.

Cycloptichorn

so what is your explanation for the lack of traffic on a2k about the speech?

I don't have an explanation for that. Do you honestly believe this is some sort of determiner?

It was a momentous speech with a large amount of new programs and plans announced. It will take some time to digest.

During the president's speech, MSNBC had this "audience reaction" meter for both McCain voters and Obama voters, represented by red and blue lines.

The dial has been consistently pinned to the top, so the red and blue are almost making things purple.

Cycloptichorn