Yeah, there seems to be a battery breakthrough story every couple weeks. I bit really hard on the 10X boost over lithium that was described as "nanowire batteries" in I think Dec 2007 issue of Spectrum, but the scientists were scooped up by offers from I think it was a Saudi University where the thing was probably suppressed for what it would do to the Arab oil business.
It was about 14 miles to work, and 14 miles back, and I was not about to waste an hour or more each way just to arrive all grody / sweaty both at work and at home for as long as I could do that, which would be until I got run over on some of the more dangerous roads I know of. Hilly, curvy, narrow, a bicyclist has a death wish if he rides those roads. And of course I retired 6 years ago at 64 years of age, and have doubts about really being able to pedal that far anyway every day even if the roads were safe.
"Of course with electric cars, no more "road trip" vacations or driving the kids off to college because it can only go 100 to 200 miles on a charge and then it takes 8 hours to recharge."
And if it won't do "road trip", I'm not going to buy it, so someone needs to figure out road trip with or without a supercapacitor. 1st leg of my vacation last month was >800 miles.
The thing is, if your car is giving up its charge to the grid, and you suddenly want to go somewhere, that's not ideal. But if the car has a supercapcitor that can charge in 10 minutes, then it works much better. The power wall for storing charge could come into play by charging the car quickly, since drawing that kind of amperage through the grid wouldn't be possible - 200 amp service at 240 volts is only 48 KwH an hour, so with the best electric car mileage currently being around 4 miles per KwH, that's about 192 miles of electrical energy per hour available to charge the car's battery. Fine if you have an hour to kill before you leave, but if you want to go right now, you can't. But a battery charging a supercapacitor, especially several batteries in parallel, could charge in several minutes - just set it to charge 10 minutes or so before you leave, and it's done when you're ready.
So this could be the storage that the grid really needs to go renewable.
Problems? If there's a disaster on the way, such as a hurricane, everyone is going to want to be leaving at once. Most home batteries will be supplying current to charge cars, not supply the grid. If the weather is bad, which it ought to be with a hurricane on the way, the solar isn't helping, and if the wind is too fast for wind turbines, does the whole thing fail at the worst possible time? Maybe.
Its just one thing after another with these guys. You'd think that a company would do everything that they could to make sure everything worked for the customer. That would include publishing specs so aftermarket manufacturers could provide alternative screens and then ensuring the software works with that spec. But when they don't, customers expectations are not met, and you get people like me, that long ago stopped doing anything "i".
You are simply wrong. Europe is riddled with both VAT taxes and income taxes. United Kingdom as 19% corporate income tax rate, 20% personal income tax rate, 45% high-end personal income tax rate, and a 20% VAT tax rate with a discounted 5% VAT tax rate for home energy and renovations while life necessities such as food, medicine, etc have no VAT at all. See:
No, VATs are generally done IN ADDITION to income taxes. The FairTax totally replaces the income taxes. VAT doesn't do a thing for removing individual income taxes, payroll taxes, capital gains taxes, gift taxes, self-employment taxes, alternative minimum taxes, inheritance taxes, and so forth.
Also VAT isn't typically forgiven for business-to-business purchases. If VAT is applied to a Boeing 757, it doesn't matter whether Donald buys it or American Airlines buys it, the tax hurts American Airlines by increasing their costs, and hurts Boeing by making them less competitive in the marketplace when compared to, say, Airbus where the VAT _is_ forgiven for export items from France. This isn't what we want. We want American Airlines to do better and expand, hiring more people and we want Boeing to do better and expand, and hire more people. We especially want them to hire people HERE in the USA, rather than some other country. Boeing has some composite wing parts coming from Italy. Really think the Italians can make wing parts that much better than Americans? I don't, I think its the Federal corporate income taxes (and all those other income taxes) that cost Boeing money only if they build that wing part in the USA. If the build it in Italy, none of those income taxes from the Feds apply, but the Italian gov't removes VAT from their exports, so the Italian stuff is simply cheaper.
VAT is also a bookeeping nightmare, costing lots of money simply to keep track off how much tax is applied at each "value added" operation. The FairTax, by contrast, simply taxes all products, both foreign and domestic, at the same rate over the counter and is applied at the cash register. The big difference is that the American-manufactured thing arrives at the cash register without any manufacturing income taxes having been charged to it, so it is suddenly somewhere between 10% and 20% less expensive than it used to be, while the foreign-manufactured stuff arrives at the cash register at its old price. It is blindingly simple to charge them both the same sales tax rate under the Fair Tax, but the American stuff comes out much cheaper than it used to be.
Also, unlike VAT, thee tax rate is starkly visible to the purchaser. Its right there on the sales receipt, and not buried in the multiple applications of VAT along the manfacturing process. Sure, the Europeans can see that final number, but they don't know where it came from what the tax rates were at each stage, and so forth.
And will the bonehead US gov't remove a VAT for our export market? They don't do it for the embedded income taxes that the American manufacturers endure, so will they do it for the VAT? Its not an issue under the FairTax, since no additional tax is added at the factory, it is added at the cash register. Shouldn't be a problem, and so our exports get cheaper as well.
"One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically. "
This part, however, is true. Corporations used to pay 35% on their business profits, now it's 21% due to the Trump tax cuts. If either of these numbers were to be reduced to 0, then the corporation would benefit greatly.
"That is nonsense. The taxes you pay on your earnings/income have nothing to do with the cost of production."
Yes, the businesses are not going to benefit from the taxes going away for employees' personal income tax. However, technically, that income tax makes labor more expensive. The employees who cease to pay individual income taxes will benefit from the income taxes being abolished.
"But I don't see how you would have a country where the state has a tax income and can pay things with that income."
I don't know how to parse that statement.
The country would run on the proceeds of the FairTax equally well with the proceeds of the income taxes it uses now. The FairTax is designed to generate the same amount of revenue.
"Your summary sounds as if you want to replace taxes on earnings with VAT.."
Nooooo.... I don't want to burden US businesses (since you can't do a VAT on overseas factories) with another tax to make our products more expensive. I want to replace ALL the income taxes with taxes on new goods at retail and services, and give everyone in the country enough money each month so they don't pay FairTax on basic living expenses up to the poverty level. That's all we need. We don't need to burden our industries. Our industries are our weapons in internation trade (a competition) so everything we do to damage them, like taxes, hampers our side, allowing foreigners to capture more of the market. I want American business to capture as much of the market as it possibly can, so jobs are created HERE, not in China and Mexico and Canada an Korea and Europe.
Like I said, the FairTax is an extremely simple tax that is devilishly difficut to understand. Took me 3 months just to realize the major benefits. I keep finding small ones even yet, and it's been 10 years of reading / contemplating it.
That's understandable, I forgot how difficult it is to understand this otherwise extremely simple tax system. It took me about 3 months to really get my mind around what it actually was, and that was just basically.
The best thing to do is to read the book, "The Fair Tax Book: Saying Goodbye to the Income Tax and the IRS." Don't know whether it is available at libraries or not, but is extremely cheap otherwise, $4.95 used at Amazon right now.
Basically, the FairTax completely replaces all income taxes, including personal, corporate, capital gains, payroll, gift, self employment, inheritance, alternative minimum, and maybe 1 or 2 others I may be forgetting, there's lots of them. The FairTax, as described in House Bill HR25 and Senate bill S18, replaces all these income taxes with a simpler tax on new goods and services sold at retail. Tuition is exempt because it is treated as an investment. It takes a while to realize what is and what is not taxed - medical services received and paid for by your insurance is not taxed because that is not "retail", but a business-to-business transaction between the medical people and the insurance company. Your premiums to the insurance company are what is taxed. Things that are bought to conduct business are not taxed - the airlines' aircraft are not taxed because when being sold to the airlines, they are not sold at retail, but in a business-to-business transaction. If that airliner is ever sold to private parties, then that is a "conversion" from business to private use, and that sale is taxed at the market value of the airliner at the time of sale. One of the most significant features of the FairTax is the "prebate" that send, each month, a check from the federal government to each legal resident of the USA that is just large enough to pay the FairTax on spending up to the poverty level. The amount of the check is keyed to the size of the family - a single person would get 23% (the FairTax's inclusive rate of taxation) of the poverty level spending as defined by the government for a single person (around $12K right now, or $1K / month so the check would be $230 / month for a single person) and increases for marrieds, marrieds with X dependents, and so forth. I think the poverty level for a family of 4 is somewhere around $24K right now, so their monthly check would be $460.
There are many subtlities of the FairTax that take a while to realize. One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically. The FairTax book relates that 22% of the price of domestically manufactured goods is composed of income taxes at all levels, including increased costs of labor due to the individual's expense of personal income taxes and the "employee's share" of the payroll taxes. And a bit more obviously, the "employer's share" of the payroll taxes goes away too, so that frees up money for the business to use to lower prices or raise wages or raise dividends on their stocks. Fortunately, recipients of those benefits are US as consumers, US as employees, and US as stockholders.
Significantly, foreign manufacturers who manufacture goods outside the USA receive no such benefit when the income taxes go away, since they aren't paying US income taxes. So, while the prices of US goods are expected to fall by 10% - 20%, foreign manufactured goods will not fall in price at all, giving an advantage to US manufacturing. It is a great incentive for foreign companies to manufacture in the USA, which should skyrocket the number of jobs available and probably create a labor shortage which would create an upwardly spiraling wage rate.
There are websites for the FairTax, but the book is a basic read that explains things better for someone starting out learning the FairTax. One of the better websotes is:
Yes, the studies are old because the initial proposal for the income tax was about 20 years ago and financed by a group of businessmen who wanted to change the tax system to promote prosperity for everyone. Since then, money to redo the studies for more modern times has not been available. Maybe we could talk Donald into financing it?
It is not true that half of American workers do not pay income taxes because those so stating wish to ignore the payroll taxes as income taxes. Authorized under the 16th Amendment, and abolished by the FairTax if passed, the payroll taxes actually place a tremendous burden on the poor and those others that supposedly don't pay income taxes.
Those not paying income tax are still paying the 22% embedded taxes of anything they buy new that is made in America, and those prices would expected to be reduced by about 14% of the income tax expense to American manufacturers that can actually be recovered by them. So, while the not-poor but otherwise no-individual-income-taxes-owed person loses the actual tax burden of the payroll taxes he's been paying, he can expect a moderate rise in the new goods and services that he purchases from American manufacturers. Foreign manufacturers stuff would go up about 30%, but that's just a nice incentive to buy American and promote American jobs.
Which brings us to the jobs. There will be vastly more jobs available under the FairTax because of being able to manufacture without companies having to pay income taxes. Bill Archer, former chair of the house ways and means committee, conducted a survey of 500 foreign CEO's and asked them what they would do if America passed the FairTax. 400 of them said they would build their next factory in the USA, and 100 of them said they would move their headquarters to the USA. That seems pretty definitive of what to expect out of the manufacturing sector under the FairTax. So, with good manufacturing jobs becomnig plentiful, a worker shortage will almost certainly be created, so manufacturers will have to boost wages to keep their people from walking out to the next factory paying more money, as well as enabling those who are currently sitting at home with insufficient academic skills to support child care for multiple offspring and be able to make enough to live well on, so they just stay home and either live off a spouse or welfare. Those people would be able to afford the child care, which would open 1000's of new jobs in child care while they work in a factory to achieve prosperity.
I grew up in a family where money was not the sort of plentiful it is now for me as a retired engineer, and I can tell you that the FairTax would work to the advantage of the not-well-to-do. Why? Because those working in factories and just making ends meet typically don't buy new cars, they buy used. Used items for sale are not taxed by the FairTax. They also typically don't commission general contractors to build them houses, they find one already on the market, that is also considered used and not taxable under the FairTax. Dad repaired our cars himself in most cases, and sometimes with parts from junkyards, which would also be untaxed by the FairTax. Mom shopped at thrift and 2nd hand stores for used things that were cheaper than new, and those things also would be untaxed under the FairTax. Dad installed things like our whole-house air conditioner, and built things such as a detached garage, and of course only the materials would be taxed. I doubt if any workman made a dime off doing things around our place, as Dad was a journeyman workman in a local factory and capable of doing most everything that was considered maintenance. Our FairTax hit would have been extremely low. Dad never bought a new car until retirement.
And taxes would be lower for most everyone except the rich because the tax burden is spread out to many that really aren't paying these taxes now, those that are working "under the table" and those working illegally such as the illegal aliens. Those in the count
Hey, I've seen accounts of the situation where there are pretty much hordes of people that are perfectly healthy, but have faked disabilities in order to qualify for enough money so they're not living in a refrigerator carton under a bridge, nor actually going to the welfare office and getting handouts. You see it every now and then on the news, some guy on disability gets filmed dancing up a storm, and is then either cut off from disability payments or prosecuted for fraud or both. I wasn't talking about people with ACTUAL disabilities.
"Unless you can cite a reputable study, the proposition that the Fair Tax drives "dramatically increased business opportunities in the USA" is opinion stated as fact. Your passionate belief doesn't make it true."
Its not the wages, its the taxes making our stuff expensive.
For instance, cars. It takes about 30 - 33 hours of labor to build each car in the USA. The auto companies claim $78 / hr for labor, the unions say less but lets go with the auto companies, and multiplying that out gives us about $2,500 worth of labor expense to build a car.
The research into the FairTax has yielded a figure that, on average, 22% of the price of goods manufactured in the USA are composed of the effects of embedded income taxes. So, if those workers assemble a $40K SUV, their expense in labor is still $2,500, but the expense in taxes is about $8,800. Not all of that expense is recoverable even if the incomet taxes go away, because the company can't access the worker's individual income taxes which belong to them if the income tax collection goes away, but it is expected by some economists that about 14% will go away. So $5,600 would be the decrease in the price of the SUV from losing the income taxes. That's way more than if you decided to pay the workers $0, made them slaves and chained them to the machines to work for free. You could only recover their costs to the company, the $2,500, but the tax cost recovered could be around $5,600.
That's what I mean about taxes being the big driving force in our disadvantage with overseas competition. Foreign factories don't work under the same high tax rates Americans do, or at least they didn't until the Trump tax cuts. While corporate taxes were cut under the Trump tax cuts, there's still a whale of a lot of other income tax based taxes that harm American companies and that foreign manufacturers avoid. Additionally, taking Trump's 21% down to 0% would have a great effect too, if the FairTax were passed and all Federal income taxes eliminated.
But as JFK said way back when the income taxes were only 50 years old:
"“The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive.” John F. Kennedy, Jan. 24, 1963 "
He cut taxes and pretty wild prosperity ensued. If we eliminated income taxes, the boost would be tremendous.
That's funny... why did they start the income taxes? Because the rich were paying almost all of them, where tired of it, and acted to be able to steal it from the average American instead of them paying almost all of it, that's why. And if you're of the persuasion that the rich are in control of everything as some are, and we still have the income taxes, then you have to ask yourself why that is. Its because the rich get to skate on the income taxes, with guys like Warren Buffet bragging that he pays less income taxes than his secretary. Its true, of course, because his secretary is paying payroll taxes that account for a much higher percentage of her earnings that they do for WB's earnings. But... it was a plot of the rich, over 100 years ago, that got the government stealing directly from us. That's why.
The 16th Amendment authorizes the income taxes and the payroll taxes are enabled by the 16th Amendment, therefore the payroll taxes are the identical form of government stealing as are the personal income taxes. Capital gains, alternative minimum, corporate, inheritance, gift self-employment are also all income taxes and should be abolished just on moral grounds, as well as to eliminate the damage to prosperity that they cause.
The 15% - 19% over 65 are existing on pensions, 401K's, social security (SS is NOT welfare, people paid into that their whole lives and now they are withdrawing), and indeed SOME will probably deem that they are able to do some basic things in a factory in order to draw the kind of wages that factory work will spiral up to. Can an over-65 be climbing up and down ladders all day, repairing plumbing, compressed air, and sprinkler pipes, as well as laying electrical conduit, repairing electrical faults, and drawing wire thru the conduits? Probably not. But they can probably sweep up, they can do office-style work, etc., and some may decide that more money at a job is better than living on SS while sitting home alone.
I'm 70. I think had I not gone into software and engineering, my other ideal job would have been railway engineer, as in locomotive driver. Could I do software and engineering yet? Yep. Could I do locomotive driving as a new career? I think my less-strong state of existence now would probably have me missing or losing a grip on a handhold on a railway car or engine and slipping under the wheels for a final slice and dice. While that job would seem to still be a great adventure and a lot of fun, I don't think I could do it any more and stand a good chance to survive it.
The savings of actual welfare will come from no longer having to shell out for unemployment, "disability" payments to working-age people that took that fraudulent route in order to avoid both starving and being a "welfare recipient" with the accompanying shame that goes with it amongst a lot of people. I mean, you can have a bad back and get "disability" and people won't think you're a lazy-ass lowlife like they will if you're on welfare, even if you've looked like crazy to find a job and just can't. And of course the actual welfare system will experience a great shrinkage as those people find they can make far more money building widgets in a factory than they can staying home and collecting what we pay for welfare now. Yeah, it can be pretty good, but factory work will be excellent once the proliferation of factories and the supporting businesses suck up all the labor and create a labor shortage. Wages spiral up during a labor shortage.
The USA was financed by consumption taxes before the 1913 passage of the income taxes, and had roads, libraries, fired departments, etc. The FairTax is just another way to collect the same amount of taxes as before (until the economy expands dramatically from all the new business opportunity) so revenues will remain the same until the economy expands, and then will exceed present day tax collection.
That number is 23% of the $1000 a month that a guy making $12K a year receives. The guy would thus be receiving $230 from the gov't every month. The FairTax rate is 23% inclusive, or 30% exclusive, but either way, the $230 will make sure that the guy making the $12K a year pays no FairTax. At the end of the month, if the guy buys new good and services with the entire $1000 he's making, he'll have paid $0 FairTax because he's using the money the gov't gave him to pay the FairTax charged on his purchases. If he's found a way to spend below the poverty line without starving, such as buddying-up with a bunch of people to rent a house and split the rent down to $100 a month each, he might actually make a few bucks off the check from the gov't. But no, it ain't UBI.
"If you believe that, you must also believe that if employers were relieved of the requirement to pay their share of payroll taxes, the savings would be passed on to the employees. Right?"
They might be used to lower the price of the product, they might be used to increase wages, they might be used to increase dividends of their stock. In each case, the beneficiaries of this is us, us, and us. We're the consumers, we're the employees, we're the stockholders assuming we have retirement savings, which many do.
The thing that controls wages is supply and demand. If the demand for labor exceeds the supply, which is almost certain under the Fair Tax because of the dramatically increased business opportunities in the USA, then the labor pay rates will rise as employers compete for people. If an employer doesn't raise his wages, and the factory down the street is paying $2 / hr more for the same job, then his employee is liable to walk. If he doesn't want that to happen, especially if the job has a learning curve at all, he's going to want to retain the employee so he doesn't have to do a training thing all over again, and will raise that wage in order to ensure his employee is happily compensated. Supply and demand, its simple, and works in the labor market too.
"You don't get to make up your personal definitions for words while expecting others to understand. Regressive taxation is explicitly taxing the poor more than the rich. That's it."
Yep, and the payroll taxes, enabled under the 16th Amendment and which vary at the rate of earnings of the taxed labor, are definitely income taxes and definitely regressive. As I stated in another post here, the poor sot making $12K a year is getting taxed at 15.3%, while Donald Trump, making $400,000,000 a year before he became President, was being taxed at 0.0049725% by the payroll taxes. So, the poor person was getting taxed at a rate 15.3 / 0.0049725 = 3076.92 times as much as Donald. That's regressive.
"And he still made more money. It appears you are unaware of the definition of "marginal tax rate" as well."
Dad didn't care about definitions, he just knew he was paid way less than what he should have been paid for that extra 8 hours of work on Saturday, and also knew that taxes were the reason.
We can fix all that with the Fair Tax, dramatically incentivizing working more, not less.
Payroll taxes are earned income taxes, and go away upon the repeal of the 16th amendment, which enables them. The payroll taxes, individual income taxes, capital gains taxes, gift taxes, self-employment taxes, corporate income taxes, inheritance (estate) taxes, are all taxes on income, and would be abolished under the Fair Tax.
And since the payroll taxes tax the poor at 15.3% (the poor are actually paying them "employer's share" of the payroll taxes whether they know it or not, because the employer simply lowers their wages to make up for the money he has to cough up to Washington for the payroll taxes he sends in) while those making millions are taxed at insignificant rates - 15.3% of $130K (approx where they payroll taxes stop taxing) would be $19,890 which would be all that the rich guy would ever have to pay. Donald Trump was making $400,000,000 a year before he became President, so his payroll tax rate was 19,890 / 400,000,000 X 100 = 0.0049725%. 15.3% vs 0.0049725%. How's that for regressive?
Abolishing income taxes would put virtually everyone back to work again, and "entitlements", which is a code word for welfare, would plummet. There wouldn't be many people left that actually need assistance, because they would have good jobs in factories or mines or in farming, and would be producing the world's goods, raw materials, and foods. The USA would become the major manufacturer of the world, have full employment, with wages spiraling up as the supply of jobs exceeded availability of workers. We might be able to tolerate open borders again - think Ellis Island - and accommodate anyone willing to work. Abolishing income taxes would make the USA insanely rich. The income taxes are suppressing that now.
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Yeah, there seems to be a battery breakthrough story every couple weeks. I bit really hard on the 10X boost over lithium that was described as "nanowire batteries" in I think Dec 2007 issue of Spectrum, but the scientists were scooped up by offers from I think it was a Saudi University where the thing was probably suppressed for what it would do to the Arab oil business.
It was about 14 miles to work, and 14 miles back, and I was not about to waste an hour or more each way just to arrive all grody / sweaty both at work and at home for as long as I could do that, which would be until I got run over on some of the more dangerous roads I know of. Hilly, curvy, narrow, a bicyclist has a death wish if he rides those roads. And of course I retired 6 years ago at 64 years of age, and have doubts about really being able to pedal that far anyway every day even if the roads were safe.
"Of course with electric cars, no more "road trip" vacations or driving the kids off to college because it can only go 100 to 200 miles on a charge and then it takes 8 hours to recharge."
Maybe not:
https://www.engadget.com/2018/...
And if it won't do "road trip", I'm not going to buy it, so someone needs to figure out road trip with or without a supercapacitor. 1st leg of my vacation last month was >800 miles.
Supercapacitors in cars instead of or in addition to batteries could be the hot setup:
https://www.engadget.com/2018/...
The thing is, if your car is giving up its charge to the grid, and you suddenly want to go somewhere, that's not ideal. But if the car has a supercapcitor that can charge in 10 minutes, then it works much better. The power wall for storing charge could come into play by charging the car quickly, since drawing that kind of amperage through the grid wouldn't be possible - 200 amp service at 240 volts is only 48 KwH an hour, so with the best electric car mileage currently being around 4 miles per KwH, that's about 192 miles of electrical energy per hour available to charge the car's battery. Fine if you have an hour to kill before you leave, but if you want to go right now, you can't. But a battery charging a supercapacitor, especially several batteries in parallel, could charge in several minutes - just set it to charge 10 minutes or so before you leave, and it's done when you're ready.
So this could be the storage that the grid really needs to go renewable.
Problems? If there's a disaster on the way, such as a hurricane, everyone is going to want to be leaving at once. Most home batteries will be supplying current to charge cars, not supply the grid. If the weather is bad, which it ought to be with a hurricane on the way, the solar isn't helping, and if the wind is too fast for wind turbines, does the whole thing fail at the worst possible time? Maybe.
Its just one thing after another with these guys. You'd think that a company would do everything that they could to make sure everything worked for the customer. That would include publishing specs so aftermarket manufacturers could provide alternative screens and then ensuring the software works with that spec. But when they don't, customers expectations are not met, and you get people like me, that long ago stopped doing anything "i".
You are simply wrong. Europe is riddled with both VAT taxes and income taxes. United Kingdom as 19% corporate income tax rate, 20% personal income tax rate, 45% high-end personal income tax rate, and a 20% VAT tax rate with a discounted 5% VAT tax rate for home energy and renovations while life necessities such as food, medicine, etc have no VAT at all. See:
https://en.wikipedia.org/wiki/...
All those European countries all have VAT and income taxes together.
The FairTax totally abolishes Federal income taxes, and runs the country strictly on the consumption tax that is the FairTax.
No, VATs are generally done IN ADDITION to income taxes. The FairTax totally replaces the income taxes. VAT doesn't do a thing for removing individual income taxes, payroll taxes, capital gains taxes, gift taxes, self-employment taxes, alternative minimum taxes, inheritance taxes, and so forth.
Also VAT isn't typically forgiven for business-to-business purchases. If VAT is applied to a Boeing 757, it doesn't matter whether Donald buys it or American Airlines buys it, the tax hurts American Airlines by increasing their costs, and hurts Boeing by making them less competitive in the marketplace when compared to, say, Airbus where the VAT _is_ forgiven for export items from France. This isn't what we want. We want American Airlines to do better and expand, hiring more people and we want Boeing to do better and expand, and hire more people. We especially want them to hire people HERE in the USA, rather than some other country. Boeing has some composite wing parts coming from Italy. Really think the Italians can make wing parts that much better than Americans? I don't, I think its the Federal corporate income taxes (and all those other income taxes) that cost Boeing money only if they build that wing part in the USA. If the build it in Italy, none of those income taxes from the Feds apply, but the Italian gov't removes VAT from their exports, so the Italian stuff is simply cheaper.
VAT is also a bookeeping nightmare, costing lots of money simply to keep track off how much tax is applied at each "value added" operation. The FairTax, by contrast, simply taxes all products, both foreign and domestic, at the same rate over the counter and is applied at the cash register. The big difference is that the American-manufactured thing arrives at the cash register without any manufacturing income taxes having been charged to it, so it is suddenly somewhere between 10% and 20% less expensive than it used to be, while the foreign-manufactured stuff arrives at the cash register at its old price. It is blindingly simple to charge them both the same sales tax rate under the Fair Tax, but the American stuff comes out much cheaper than it used to be.
Also, unlike VAT, thee tax rate is starkly visible to the purchaser. Its right there on the sales receipt, and not buried in the multiple applications of VAT along the manfacturing process. Sure, the Europeans can see that final number, but they don't know where it came from what the tax rates were at each stage, and so forth.
And will the bonehead US gov't remove a VAT for our export market? They don't do it for the embedded income taxes that the American manufacturers endure, so will they do it for the VAT? Its not an issue under the FairTax, since no additional tax is added at the factory, it is added at the cash register. Shouldn't be a problem, and so our exports get cheaper as well.
"One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically. "
This part, however, is true. Corporations used to pay 35% on their business profits, now it's 21% due to the Trump tax cuts. If either of these numbers were to be reduced to 0, then the corporation would benefit greatly.
"That is nonsense. The taxes you pay on your earnings/income have nothing to do with the cost of production."
Yes, the businesses are not going to benefit from the taxes going away for employees' personal income tax. However, technically, that income tax makes labor more expensive. The employees who cease to pay individual income taxes will benefit from the income taxes being abolished.
"But I don't see how you would have a country where the state has a tax income and can pay things with that income."
I don't know how to parse that statement.
The country would run on the proceeds of the FairTax equally well with the proceeds of the income taxes it uses now. The FairTax is designed to generate the same amount of revenue.
"Your summary sounds as if you want to replace taxes on earnings with VAT .."
Nooooo.... I don't want to burden US businesses (since you can't do a VAT on overseas factories) with another tax to make our products more expensive. I want to replace ALL the income taxes with taxes on new goods at retail and services, and give everyone in the country enough money each month so they don't pay FairTax on basic living expenses up to the poverty level. That's all we need. We don't need to burden our industries. Our industries are our weapons in internation trade (a competition) so everything we do to damage them, like taxes, hampers our side, allowing foreigners to capture more of the market. I want American business to capture as much of the market as it possibly can, so jobs are created HERE, not in China and Mexico and Canada an Korea and Europe.
Like I said, the FairTax is an extremely simple tax that is devilishly difficut to understand. Took me 3 months just to realize the major benefits. I keep finding small ones even yet, and it's been 10 years of reading / contemplating it.
That's understandable, I forgot how difficult it is to understand this otherwise extremely simple tax system. It took me about 3 months to really get my mind around what it actually was, and that was just basically.
The best thing to do is to read the book, "The Fair Tax Book: Saying Goodbye to the Income Tax and the IRS." Don't know whether it is available at libraries or not, but is extremely cheap otherwise, $4.95 used at Amazon right now.
https://www.amazon.com/Fair-Ta...
Basically, the FairTax completely replaces all income taxes, including personal, corporate, capital gains, payroll, gift, self employment, inheritance, alternative minimum, and maybe 1 or 2 others I may be forgetting, there's lots of them. The FairTax, as described in House Bill HR25 and Senate bill S18, replaces all these income taxes with a simpler tax on new goods and services sold at retail. Tuition is exempt because it is treated as an investment. It takes a while to realize what is and what is not taxed - medical services received and paid for by your insurance is not taxed because that is not "retail", but a business-to-business transaction between the medical people and the insurance company. Your premiums to the insurance company are what is taxed. Things that are bought to conduct business are not taxed - the airlines' aircraft are not taxed because when being sold to the airlines, they are not sold at retail, but in a business-to-business transaction. If that airliner is ever sold to private parties, then that is a "conversion" from business to private use, and that sale is taxed at the market value of the airliner at the time of sale. One of the most significant features of the FairTax is the "prebate" that send, each month, a check from the federal government to each legal resident of the USA that is just large enough to pay the FairTax on spending up to the poverty level. The amount of the check is keyed to the size of the family - a single person would get 23% (the FairTax's inclusive rate of taxation) of the poverty level spending as defined by the government for a single person (around $12K right now, or $1K / month so the check would be $230 / month for a single person) and increases for marrieds, marrieds with X dependents, and so forth. I think the poverty level for a family of 4 is somewhere around $24K right now, so their monthly check would be $460.
There are many subtlities of the FairTax that take a while to realize. One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically. The FairTax book relates that 22% of the price of domestically manufactured goods is composed of income taxes at all levels, including increased costs of labor due to the individual's expense of personal income taxes and the "employee's share" of the payroll taxes. And a bit more obviously, the "employer's share" of the payroll taxes goes away too, so that frees up money for the business to use to lower prices or raise wages or raise dividends on their stocks. Fortunately, recipients of those benefits are US as consumers, US as employees, and US as stockholders.
Significantly, foreign manufacturers who manufacture goods outside the USA receive no such benefit when the income taxes go away, since they aren't paying US income taxes. So, while the prices of US goods are expected to fall by 10% - 20%, foreign manufactured goods will not fall in price at all, giving an advantage to US manufacturing. It is a great incentive for foreign companies to manufacture in the USA, which should skyrocket the number of jobs available and probably create a labor shortage which would create an upwardly spiraling wage rate.
There are websites for the FairTax, but the book is a basic read that explains things better for someone starting out learning the FairTax. One of the better websotes is:
https://fairtax.org/
There is much information there. Hope this helps.
The FairTax. We're eliminating all INCOME taxes. Tax consumption instead. Read back thru this thread.
Yes, the studies are old because the initial proposal for the income tax was about 20 years ago and financed by a group of businessmen who wanted to change the tax system to promote prosperity for everyone. Since then, money to redo the studies for more modern times has not been available. Maybe we could talk Donald into financing it?
It is not true that half of American workers do not pay income taxes because those so stating wish to ignore the payroll taxes as income taxes. Authorized under the 16th Amendment, and abolished by the FairTax if passed, the payroll taxes actually place a tremendous burden on the poor and those others that supposedly don't pay income taxes.
Those not paying income tax are still paying the 22% embedded taxes of anything they buy new that is made in America, and those prices would expected to be reduced by about 14% of the income tax expense to American manufacturers that can actually be recovered by them. So, while the not-poor but otherwise no-individual-income-taxes-owed person loses the actual tax burden of the payroll taxes he's been paying, he can expect a moderate rise in the new goods and services that he purchases from American manufacturers. Foreign manufacturers stuff would go up about 30%, but that's just a nice incentive to buy American and promote American jobs.
Which brings us to the jobs. There will be vastly more jobs available under the FairTax because of being able to manufacture without companies having to pay income taxes. Bill Archer, former chair of the house ways and means committee, conducted a survey of 500 foreign CEO's and asked them what they would do if America passed the FairTax. 400 of them said they would build their next factory in the USA, and 100 of them said they would move their headquarters to the USA. That seems pretty definitive of what to expect out of the manufacturing sector under the FairTax. So, with good manufacturing jobs becomnig plentiful, a worker shortage will almost certainly be created, so manufacturers will have to boost wages to keep their people from walking out to the next factory paying more money, as well as enabling those who are currently sitting at home with insufficient academic skills to support child care for multiple offspring and be able to make enough to live well on, so they just stay home and either live off a spouse or welfare. Those people would be able to afford the child care, which would open 1000's of new jobs in child care while they work in a factory to achieve prosperity.
I grew up in a family where money was not the sort of plentiful it is now for me as a retired engineer, and I can tell you that the FairTax would work to the advantage of the not-well-to-do. Why? Because those working in factories and just making ends meet typically don't buy new cars, they buy used. Used items for sale are not taxed by the FairTax. They also typically don't commission general contractors to build them houses, they find one already on the market, that is also considered used and not taxable under the FairTax. Dad repaired our cars himself in most cases, and sometimes with parts from junkyards, which would also be untaxed by the FairTax. Mom shopped at thrift and 2nd hand stores for used things that were cheaper than new, and those things also would be untaxed under the FairTax. Dad installed things like our whole-house air conditioner, and built things such as a detached garage, and of course only the materials would be taxed. I doubt if any workman made a dime off doing things around our place, as Dad was a journeyman workman in a local factory and capable of doing most everything that was considered maintenance. Our FairTax hit would have been extremely low. Dad never bought a new car until retirement.
And taxes would be lower for most everyone except the rich because the tax burden is spread out to many that really aren't paying these taxes now, those that are working "under the table" and those working illegally such as the illegal aliens. Those in the count
Hey, I've seen accounts of the situation where there are pretty much hordes of people that are perfectly healthy, but have faked disabilities in order to qualify for enough money so they're not living in a refrigerator carton under a bridge, nor actually going to the welfare office and getting handouts. You see it every now and then on the news, some guy on disability gets filmed dancing up a storm, and is then either cut off from disability payments or prosecuted for fraud or both. I wasn't talking about people with ACTUAL disabilities.
"Unless you can cite a reputable study, the proposition that the Fair Tax drives "dramatically increased business opportunities in the USA" is opinion stated as fact. Your passionate belief doesn't make it true."
https://fairtax-structure-psyc...
Page 28 chart is supportive:
https://fairtax-structure-psyc...
Its not the wages, its the taxes making our stuff expensive.
For instance, cars. It takes about 30 - 33 hours of labor to build each car in the USA. The auto companies claim $78 / hr for labor, the unions say less but lets go with the auto companies, and multiplying that out gives us about $2,500 worth of labor expense to build a car.
The research into the FairTax has yielded a figure that, on average, 22% of the price of goods manufactured in the USA are composed of the effects of embedded income taxes. So, if those workers assemble a $40K SUV, their expense in labor is still $2,500, but the expense in taxes is about $8,800. Not all of that expense is recoverable even if the incomet taxes go away, because the company can't access the worker's individual income taxes which belong to them if the income tax collection goes away, but it is expected by some economists that about 14% will go away. So $5,600 would be the decrease in the price of the SUV from losing the income taxes. That's way more than if you decided to pay the workers $0, made them slaves and chained them to the machines to work for free. You could only recover their costs to the company, the $2,500, but the tax cost recovered could be around $5,600.
That's what I mean about taxes being the big driving force in our disadvantage with overseas competition. Foreign factories don't work under the same high tax rates Americans do, or at least they didn't until the Trump tax cuts. While corporate taxes were cut under the Trump tax cuts, there's still a whale of a lot of other income tax based taxes that harm American companies and that foreign manufacturers avoid. Additionally, taking Trump's 21% down to 0% would have a great effect too, if the FairTax were passed and all Federal income taxes eliminated.
But as JFK said way back when the income taxes were only 50 years old:
"“The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive.” John F. Kennedy, Jan. 24, 1963 "
He cut taxes and pretty wild prosperity ensued. If we eliminated income taxes, the boost would be tremendous.
That's funny... why did they start the income taxes? Because the rich were paying almost all of them, where tired of it, and acted to be able to steal it from the average American instead of them paying almost all of it, that's why. And if you're of the persuasion that the rich are in control of everything as some are, and we still have the income taxes, then you have to ask yourself why that is. Its because the rich get to skate on the income taxes, with guys like Warren Buffet bragging that he pays less income taxes than his secretary. Its true, of course, because his secretary is paying payroll taxes that account for a much higher percentage of her earnings that they do for WB's earnings. But... it was a plot of the rich, over 100 years ago, that got the government stealing directly from us. That's why.
The 16th Amendment authorizes the income taxes and the payroll taxes are enabled by the 16th Amendment, therefore the payroll taxes are the identical form of government stealing as are the personal income taxes. Capital gains, alternative minimum, corporate, inheritance, gift self-employment are also all income taxes and should be abolished just on moral grounds, as well as to eliminate the damage to prosperity that they cause.
The 15% - 19% over 65 are existing on pensions, 401K's, social security (SS is NOT welfare, people paid into that their whole lives and now they are withdrawing), and indeed SOME will probably deem that they are able to do some basic things in a factory in order to draw the kind of wages that factory work will spiral up to. Can an over-65 be climbing up and down ladders all day, repairing plumbing, compressed air, and sprinkler pipes, as well as laying electrical conduit, repairing electrical faults, and drawing wire thru the conduits? Probably not. But they can probably sweep up, they can do office-style work, etc., and some may decide that more money at a job is better than living on SS while sitting home alone.
I'm 70. I think had I not gone into software and engineering, my other ideal job would have been railway engineer, as in locomotive driver. Could I do software and engineering yet? Yep. Could I do locomotive driving as a new career? I think my less-strong state of existence now would probably have me missing or losing a grip on a handhold on a railway car or engine and slipping under the wheels for a final slice and dice. While that job would seem to still be a great adventure and a lot of fun, I don't think I could do it any more and stand a good chance to survive it.
The savings of actual welfare will come from no longer having to shell out for unemployment, "disability" payments to working-age people that took that fraudulent route in order to avoid both starving and being a "welfare recipient" with the accompanying shame that goes with it amongst a lot of people. I mean, you can have a bad back and get "disability" and people won't think you're a lazy-ass lowlife like they will if you're on welfare, even if you've looked like crazy to find a job and just can't. And of course the actual welfare system will experience a great shrinkage as those people find they can make far more money building widgets in a factory than they can staying home and collecting what we pay for welfare now. Yeah, it can be pretty good, but factory work will be excellent once the proliferation of factories and the supporting businesses suck up all the labor and create a labor shortage. Wages spiral up during a labor shortage.
The USA was financed by consumption taxes before the 1913 passage of the income taxes, and had roads, libraries, fired departments, etc. The FairTax is just another way to collect the same amount of taxes as before (until the economy expands dramatically from all the new business opportunity) so revenues will remain the same until the economy expands, and then will exceed present day tax collection.
That number is 23% of the $1000 a month that a guy making $12K a year receives. The guy would thus be receiving $230 from the gov't every month. The FairTax rate is 23% inclusive, or 30% exclusive, but either way, the $230 will make sure that the guy making the $12K a year pays no FairTax. At the end of the month, if the guy buys new good and services with the entire $1000 he's making, he'll have paid $0 FairTax because he's using the money the gov't gave him to pay the FairTax charged on his purchases. If he's found a way to spend below the poverty line without starving, such as buddying-up with a bunch of people to rent a house and split the rent down to $100 a month each, he might actually make a few bucks off the check from the gov't. But no, it ain't UBI.
"If you believe that, you must also believe that if employers were relieved of the requirement to pay their share of payroll taxes, the savings would be passed on to the employees. Right?"
They might be used to lower the price of the product, they might be used to increase wages, they might be used to increase dividends of their stock. In each case, the beneficiaries of this is us, us, and us. We're the consumers, we're the employees, we're the stockholders assuming we have retirement savings, which many do.
The thing that controls wages is supply and demand. If the demand for labor exceeds the supply, which is almost certain under the Fair Tax because of the dramatically increased business opportunities in the USA, then the labor pay rates will rise as employers compete for people. If an employer doesn't raise his wages, and the factory down the street is paying $2 / hr more for the same job, then his employee is liable to walk. If he doesn't want that to happen, especially if the job has a learning curve at all, he's going to want to retain the employee so he doesn't have to do a training thing all over again, and will raise that wage in order to ensure his employee is happily compensated. Supply and demand, its simple, and works in the labor market too.
"You don't get to make up your personal definitions for words while expecting others to understand. Regressive taxation is explicitly taxing the poor more than the rich. That's it."
Yep, and the payroll taxes, enabled under the 16th Amendment and which vary at the rate of earnings of the taxed labor, are definitely income taxes and definitely regressive. As I stated in another post here, the poor sot making $12K a year is getting taxed at 15.3%, while Donald Trump, making $400,000,000 a year before he became President, was being taxed at 0.0049725% by the payroll taxes. So, the poor person was getting taxed at a rate 15.3 / 0.0049725 = 3076.92 times as much as Donald. That's regressive.
"And he still made more money. It appears you are unaware of the definition of "marginal tax rate" as well."
Dad didn't care about definitions, he just knew he was paid way less than what he should have been paid for that extra 8 hours of work on Saturday, and also knew that taxes were the reason.
We can fix all that with the Fair Tax, dramatically incentivizing working more, not less.
Payroll taxes are earned income taxes, and go away upon the repeal of the 16th amendment, which enables them. The payroll taxes, individual income taxes, capital gains taxes, gift taxes, self-employment taxes, corporate income taxes, inheritance (estate) taxes, are all taxes on income, and would be abolished under the Fair Tax.
And since the payroll taxes tax the poor at 15.3% (the poor are actually paying them "employer's share" of the payroll taxes whether they know it or not, because the employer simply lowers their wages to make up for the money he has to cough up to Washington for the payroll taxes he sends in) while those making millions are taxed at insignificant rates - 15.3% of $130K (approx where they payroll taxes stop taxing) would be $19,890 which would be all that the rich guy would ever have to pay. Donald Trump was making $400,000,000 a year before he became President, so his payroll tax rate was 19,890 / 400,000,000 X 100 = 0.0049725%. 15.3% vs 0.0049725%. How's that for regressive?
Abolishing income taxes would put virtually everyone back to work again, and "entitlements", which is a code word for welfare, would plummet. There wouldn't be many people left that actually need assistance, because they would have good jobs in factories or mines or in farming, and would be producing the world's goods, raw materials, and foods. The USA would become the major manufacturer of the world, have full employment, with wages spiraling up as the supply of jobs exceeded availability of workers. We might be able to tolerate open borders again - think Ellis Island - and accommodate anyone willing to work. Abolishing income taxes would make the USA insanely rich. The income taxes are suppressing that now.