Home » General Discussions » Heated Discussions and Debates » Scrap the income tax!
| Scrap the income tax! [message #151222] |
Sun, 24 April 2005 14:56   |
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warranto
Messages: 2584
Registered: February 2003
Location: Alberta, Canada
Karma: 0
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General (2 Stars) |
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2 evenutal problems (completely hypothetical, and if it were to occur, not for a very long time)
If you start outsourcing all manufacturing jobs, simply because it would make stuff cheaper, you get the two problems.
1. The power of everything you own is in the hands of another country. At a whm, they could stop exporting that material, and America would be into a bit of a bind.
2. Jobs would have to be created in other sectors to make up for the loss of the available income that the manufacturing industry would have made. It doesn't matter how cheap things are if people don't have the money to buy them anyways.
But like I said, completely hypothetical, and all that good stuff. Food for thought, not serious discussion.
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| Scrap the income tax! [message #151242] |
Sun, 24 April 2005 16:47 |
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Crimson
Messages: 7427
Registered: February 2003
Location: Phoenix, AZ
Karma: 0
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General (5 Stars)
ADMINISTRATOR |
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The day we stop outsourcing is the day we also have to kick Honda, Toyota, Meredes, etc... out of the country. Don't make their cars, don't sell their cars. Then we have to go to all the other foreign-based companies and close down all their US-based operations and lay off all those employees. Until you're willing to do that, shut the hell up.
I'm the bawss.
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| Scrap the income tax! [message #151268] |
Sun, 24 April 2005 18:28 |
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Hydra
Messages: 827
Registered: September 2003
Location: Atlanta, GA
Karma: 0
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Colonel |
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On the issue of outsourcing: if you want to stop businesses from outsourcing jobs to foreign countries, eliminate minimum wage laws.
Now, to bring the thread back on topic...
| "The Facts About The FairTax" brochure |
Price Stability
It may seem surprising that a sales tax of 23% won't raise prices, but it makes sense. Today, companies pass on their tax and compliance costs to consumers. Those costs are hidden in the price of everything we buy.
With the FairTax, businesses will no longer have any federal taxes to pay, will no longer have to devote money and manpower to compliance, and won't pay tax on the purchases they make (because the FairTax applies only once to the final purchase of goods and services). That savings will dramatically lower the costs of production in this country, keeping tax-inclusive prices at about where they are today.
In fact, Dr. Dale Jorgenson, Chairman of the Economics Department at Harvard University, has projected an average producer price reduction of 20% in the first year after adoption of the FairTax. That means that retailers will be able to maintain their current profit margins while lowering prices to consumers.
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| SuperFlyingLiberalTool |
All you've said is that an "embedded" tax would be removed because of the removal of income tax from companies. Would the prices of products really drop more than 23% before this new sales tax is applied? Somehow, I doubt that.
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Dr. Dale Jorgenson doesn't.
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And if adding a 23% sales tax to all products results in the overall cost of products going down, where does the government get its' money?
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If by asking, "Where does the government get its money?" you are asking how the government will be funded, the answer is from the sales tax gathered from the purchase of all new goods and services.
I must not be understanding your question clearly, because what you seem to be asking has already been answered in this thread.
| j_ball430 |
The largest spenders are not always the ones with the biggest incomes. Take for instance a family with several kids. They probably only make maybe $30,000 - $40,000 a year and have to support their kids. This FairTax plan will hurt them substantially. You said that there would be special rebates on necessities for this kind of situation, but I don't see how that will change much if anything at all.
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Single parent with two children making minimum wage
Annual income: $10,712
A couple living solely on Social Security
Annual income: $25,944
Married couple with two children
Annual income: $32,136
Single mother with two children and mortgage
Annual income: $45,000
Married couple with two children and mortgage
Annual income: $65,000
Married couple with two children and a homeowner
Annual income: $100,000
All the previous links were found on this page.
How does the rebate work?
After reading all that...
| j_ball430 |
This FairTax plan will hurt [the family with several kids] substantially.
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How so?
Walter Keith Koester: September 22, 1962 - March 15, 2005
God be with you, Uncle Wally.
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| Scrap the income tax! [message #151285] |
Sun, 24 April 2005 19:53 |
msgtpain
Messages: 663
Registered: March 2003
Location: Montana
Karma: 0
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Colonel |
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You're still assuming that companies will reduce their prices based on any operating expense decreases they see. Is there any guarantee that this will happen? because without it, the whole argument and presentation tables are meaningless. If the entire comparisons are based on some number which no one can accurately measure, and which no one can ensure will be removed, then there can be no true comparison.
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| Scrap the income tax! [message #151479] |
Mon, 25 April 2005 20:34 |
msgtpain
Messages: 663
Registered: March 2003
Location: Montana
Karma: 0
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Colonel |
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That's way to broad of an analogy to be applied across the board. It's true that any item which has an R&D price associated will typically have a downward curved lifecycle, especially if there is a copyright or patent involved. However, the majority of the products consumers buy do not fall under this roof. The clothes you buy, the food you eat, the vacations you take, electronics, small appliances etc are all priced by supply and demand. If there is no decline in demand, and no shortage of supply, there will be no logical reason for the producers to reduce the price, unless forced to do so by the G Man, and is this really want we want? Uncle Sam price capping our markets? How many times over the last year has the price of a barrel of oil gone down, but the price at the pump remained the same or increased? Only once in my lifetime that I can remember (1999) has the price of a gallon of gasoline gone down below the pre shortage price; do you believe you'll see $1.68/gallon gas again, even if the cost of a barrel returns to $28? only time will tell.
Consumers will only see price breaks if the largest of the corporations pass on the tax relief in the prices of their products and the smaller competitors are forced to follow. Custom products, niche markets and trends will always go for whatever the market can bear.
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| Scrap the income tax! [message #151489] |
Mon, 25 April 2005 22:30 |
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Oblivion165
Messages: 3468
Registered: June 2003
Location: Hendersonville, North Car...
Karma: 0
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General (3 Stars) |
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Hey hydra, ever see episode 33 of mighty max?
Hydra argues about life and oblivion between himself. Hehe
WOL: Ob165ion Skype: Oblivion165 Yahoo Instant Messenger: CaptainJohn165
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| Scrap the income tax! [message #151606] |
Tue, 26 April 2005 15:59 |
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Deathgod
Messages: 504
Registered: February 2003
Location: The House of B
Karma: 0
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Colonel |
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| Sir Phoenixx |
Why not? Almost all companies do it all the time. If they didn't, the games you buy would stay at $50 and never go down. After a while they've paid off enough of their debts, and can lower the price and still make a profit.
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That is untrue pretty much across the board. Taking your games example, the first few runs of a popular game will be sold at a set price from the manufacturer to the distrubutors who will push it out to retail. Most new games cost retail stores like EB, Gamestop, and Best Buy around $35-40 for a $50 game, so that store only makes about 20% profit, maybe 30% if they're lucky. That is of course BEFORE what it costs that store to ship it to their outlet and staff the store, and cover all other expenses. These stores don't make money on new games, that is why EB and Gamestop pimp the hell out of preowns (where the margins are at minimum 100% profit and go as high as 1000%) and Best Buy marks up their big-ticket items like TVs and their accessories to cover the difference (those Monster cables you buy? Best Buy buys those from Monster for about 5-10 bucks a cable, and sells them for 60-100 bucks each, as an example). The people in charge of dropping these prices are usually the retail outlets, not the middlemen delivering the supply to the retail outlets, because the retail outlets need to clear the space on their shelves for the newest and greatest items. They can afford to sell the older copies for less money because on average they're still making money if they sold a ton of copies at 50 bucks. It's called dollar-cost averaging and it is a very common practice at all retail stores, and allows for things like Walmart giving away Gameboy Advance SPs for $30 after Thanksgiving. They're selling those at a huge loss but they make it up elsewhere.
Anyhow, enough sidetracking. The issue at hand still remains; consumers will only see a benefit if corporations pass it on, and I imagine that most corporations will be rather reluctant to give up a 'free' invisible profit jump.
WOL: priestofb
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The preceding post was sponsored by FUD.
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