Death and Taxes

[cannon_fodder]

You seem to be confusing the major premise on which you argue.  You asked what happens if prices do not fall - I answered VERY VERY VERY VERY clearly.  If you dont understand the answer, I can draw a picture.

Now you are changing the subject to what real income will be, fine.  But you need to signify your change in direction.  Jumping from one argument to another without any direction is pointless, confusing, and will certainly not yield a meaningful result.  No one would be expected to understand what you were trying to say.

SO... I assume you are not attempting to inquire as to the effects on real income if prices remained high.

Again, the question I am answering is:
What is the effect on real income if prices remain high and the tax rate is cut?

When the tax rate is cut real income will go up, as it always does when taxes are cut.  More money in pocket = real income up.  When money in pocket goes up AND cost of goods goes down, as would result in the scenario you invented, real income goes up exponentially.  

The previous explanation did not require an analysis of INCOME because the question was about what happens to PRICE.  Price is not correlative to INCOME.  If you actually read this, let me know.  Price is correlative to cost of goods sold and demand, in our scenario it must be considered as the net of taxes.  There is NO, none, zero inclusion of income in setting a price.  One more time, INCOME HAS NOTHING TO DO WITH PRICE.  

I figure I'll just type things three times in a single post instead of having to repeat myself in additional posts.

Now we are talking about income and the effect of taxes on real income.  Real income is effected by the purchasing power of money in pocket.  So either purchasing power or money in pocket can change.  Purchasing power is directly related to real income - if you can purchase more your income went up.  Money in pocket is also directly related to real income - if you have more money in your pocket it can go up.

Income taxes are negatively correlated to money in pocket.  Sales taxes have no effect on money in pocket.

Income taxes do not directly effect purchasing power.  Sales taxes are negatively correlated to purchasing power (net cost of goods rises).

So if an income tax is replaced with a sales tax money in pocket goes up and purchasing power of that money goes down.  If the tax system is realizing the same income, the actual effect on purchasing power of a dollar is NET zero.  However, when you factor in efficiencies in the system the net effect is a gain in purchasing power.

Short Answer:
Tax go down, real income go up.


Perhaps that does not answer:

quote:If the sales tax + cost versus income, is greater than the relative rate of Cost vs Income: the assumed perfect rate (30% sales tax to cover the Income Tax) gets cut.

which mistakenly assumes a "perfect rate" and states an illogical equation.   But it is the closet to coherency I could make of the statement.  You can paste the same thing 9 or 10 more times if you like - it will still be meaningless.

If you continue to fail to raise any substance my answers are likely to cease being meaningful.  Not that you read them anyway, or that you care.  

I am even more convinced you have no interest in this topic and only wish to waste my time.

[MichaelC]

quote:Originally posted by cannon_fodder

Short Answer:
Tax go down, real income go up.

That's an answer.  Please continue, moving now into revenues.  Given that a 30% sales tax replaces the "Progressive Tax"  What are the effects of a sales tax rate cut on US tax revenues?  For drama, let's assume it's cut down to a rate of 1%.

Your answers are leading me in a direction, we'll get there when we get there.

[cannon_fodder]

quote:Given that a 30% sales tax replaces the "Progressive Tax" What are the effects of a sales tax rate cut on US tax revenues?

Short Answer:
Tax Rev. stay same.

You're welcome to just make you're point instead of wasting my time.  I assume you are going to try to make a brilliant point by taking my forced over simplifications out of context or inserting another ridiculous hypothetical.

I'd also like to point out that my previous post had buried within in it the line:

quote:If you actually read this, let me know.

Clearly, you are not even interested in the Fair Tax and just want to waste my time.  You have shown nothing, done nothing, and proven nothing.  You have wasted your time, mine and anyone who has read this.  I grow bored of your antics, if you wish to have a serious discussion I would be happy to.  If you want to continue discussing things on the basis of incomplete sentences - you will have to find someone else to play with.  I chose not to reduce myself any longer to that level.

[MichaelC]

quote:Originally posted by cannon_fodder

Short Answer:
Tax Rev. stay same.

No matter what the sales tax rate, sales tax revenue in comparison to income tax revenue stays the same.  Correct?

[cannon_fodder]

Incorrect.

It's like a drug.  I suppose its because I'm killing the rest of Friday while I wait for a phone call.  I'd explain more, but you dont even read posts and dont care anyway, so why bother.  

But your statement is false.

[MichaelC]

quote:Originally posted by cannon_fodder

Incorrect.

Yeah.  Probably incorrect.  So, back to the question.

quote:Given that a 30% sales tax replaces the "Progressive Tax" What are the effects of a sales tax rate cut on US tax revenues?

We could probably assume that a higher tax rate would produce higher revenues, and lower tax rate would produce lower revenues.  Barring some strange event:  A 1% sales tax should produce less revenue than a 30% sales tax.  And there may be a "bell curve" (I'm not saying it would ever get there) where at some point the sales tax would become so high that it would produce less revenue. Example: a 400% tax rate may produce less than a 370% rate.  Is it reasonable to conclude that barring extremely high taxation, a higher sales tax rate means higher revenues?

[cannon_fodder]

This discussion has no bearing whatsoever on the Fair Tax.  The FairTax is designed to have the SAME LEVEL of taxation as the current system.  The SAME AMOUNT of revenue will be brought in. THUS, any discussion of diminishing returns of taxation without exterior influences is equally applicable to either an income tax or a sales tax and is moot.

Not to mention that is is a topic that could prompt another thesis and more debate.  Higher taxes not only slow the economy but lead to black markets and give greater incentives to avoid taxes - income or sales.  Hey, lets try this again, let me know if you read this. Higher taxes usually bring in more money until the populace decides it is not worth complying.  Again, not effected by the TYPE of tax collected.  From a demand on % of produce to an income tax.

Just state your point, I'm not wasting anymore time with you... its supposed to be too nice out this weekend.  State your point and I will happily read it.

[MichaelC]

quote:Originally posted by cannon_fodder

This discussion has no bearing whatsoever on the Fair Tax.  The FairTax is designed to have the SAME LEVEL of taxation as the current system.  The SAME AMOUNT of revenue will be brought in. THUS, any discussion of diminishing returns of taxation without exterior influences is equally applicable to either an income tax or a sales tax and is moot.

I'll simplify it for you.

Excluding the concept of diminishing returns, a 31% sales tax should yield more in tax revenue than 29% sales tax.  Correct?

[cannon_fodder]

I'll simplify it for you, state your point.  You have taken 3 pages and have yet to make a point.  I grow bored of your ceaseless banter, hypotheticals, back tracking, and clumsy direction.

[MichaelC]

quote:Originally posted by cannon_fodder

I'll simplify it for you, state your point.  You have taken 3 pages and have yet to make a point.  I grow bored of your ceaseless banter, hypotheticals, back tracking, and clumsy direction.

Grow bored then.  And please answer the following question:

quote:Excluding the concept of diminishing returns, a 31% sales tax should yield more in tax revenue than 29% sales tax.  Correct?

[cannon_fodder]

Excluding the law of gravity, an object in motion at a right angle to the Earth's surface will remain at that trajectory until impacting another object.

For god's sake, state your point.  You've had 4 days and have yet to make a point.  The suspense is killing me.

[Conan71]

Don't hold your breath, he's just yanking your chain for the sake of yanking your chain.

[MichaelC]

I guess that's that.

Conan, you're up.  

quote:Originally posted by Conan71

quote:Originally posted by MichaelC

quote:Originally posted by Conan71

Not true.

Link please.

http://www.irs.gov/newsroom/article/0,,id=109817,00.html

Here's the '07 tax table to see what the difference would be on this year's earnings when filing next year:

http://www.irs.gov/formspubs/article/0,,id=164272,00.html

Keep in mind, the actual net tax rate at the 15% federal tax level (families earning betw. $15K and $77K) actually works out to just over 30%, taking into account employer contribution for FICA and SSI.

Assuming that's true (since I can never tell for sure what the IRS is trying to say), the only people that would pay at those rates, would be dependents.  Everything else is adjustable.  If you want the IRS to take that amount, you can do that by claiming Zero deductions on the W-4.  Most people claim at least one deduction, a large number of people even if single with no dependents, can claim themselves twice.  With one or two, that drastically reduces payroll deductions on the individual.

On the SE tax, let's just say I'm fully aware of it.

[iplaw]

If only you could ask for a refund, eh CF....

[MichaelC]

quote:Originally posted by iplaw

If only you could ask for a refund, eh CF....

If there's no baseline for agreement on what is real and what is not, then there's really nothing to talk about.  I certainly could come at it from a different angle, but I'm really not looking for "The Fair Tax is 'Fair' because it has the word 'Fair' in it".