Re: My take on the flawed "Fair Tax" (repost)


AllYou! wrote:
> "js" <jonathansmith99@xxxxxxxxx> wrote in message
> news:1128377454.830925.178880@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
> > AllYou! wrote:
> >> "js" <jonathansmith99@xxxxxxxxx> wrote in message
> >
> > snipped all the superfolous crap.
>
> Well, to be honest, I never saw that coming from you. You've made a bunch of
> arguments which I didn't think held together, I showed where they did not,

That's the problem. I can't work my way through the thread and find
where you made any argument other than to say, repeatedly, it is a
circular argument. Because we have PITAX we work to pay ot. Or is it
because we work we pay PITAX. Well, I guess that isn't too tough a
conclusion to reach. If you are unemployed, you don't pay income tax
on wages you don't earn. I tought that was ap pretty simple concept.
Its hardly an argument.

> and
> so you snip all of it. OK, I can play by whatever rules you wish. Onward.

What I did is snip everything adn start from scratch - consolidating
what I pereive to be the difference of opinion.

> > Under the assumption of converting all PITAX to NST, you argue that
> > wages will fall to "net" and prices will fall accordingly.
> >
> > I argue that under conversion, wages will remain the same (gross) and
> > prices will
> > rise equivalent to the offset.
> >
> > We both agree that in no case is the employee or employer any better
> > off in the short run.
> >
> > In support of your proposition you argue that net wages are the only
> > "real" cost to employers
>
> That's not true, you know it's not true, and you snipped everything wherein I've
> repeatedly said that's not true. What I have said is that the gross wage is the
> real cost to employers, however, the real compensation to the employee is the
> net wage.

The real benefit in terms of purchasing power for commodities is indeed
what is left after all taxes are paid. There is no question about
that. But that still doesn't change the fact that part of gross
compensation goes to paying PITAX.

> as such, the difference between net and gross remains the cost to the
> employer.

Of course it does, as are all the wages and benefits used to extract
value from labor. On the income statement of an employer you will find
an entry for LABOR cost. This LABOR entry is the sum of all gross
wages and benefits paid. This is not in dispute.

Carry on.

> > and as such under NST employees will continue
> > to get their "net" salary and prices will drop as employers no longer
> > pay PITAX.

And again, I ask - WHY? Employers don't pay PITAX now. The employee
does. All the employer does is fulfill a tax collection obligation.

> > You then asked:
> >
> > "Wages are a cost to employers. We agree.
>
> See? There's just one example of where I agree that all wages are a cost to the
> employer.

OK - what exactly do you mean "just one"?

>
> > But it's irrelevant to this
> > situation. What's relevant is which of the costs to the company go to
> > the
> > employee, and where do the rest go."
> >
> > The correct answer is, unfortunately for you - In both cases (pre and
> > post NST) ALL the wages go to the employee.
>
> Then why were you so afraid to continue the details of the debate wherein I show
> your argument for this assertion of yours to be lacking any logic or reasoning?

I'm not. But, unfortunately for you, you continue to insist that the
act of administration of tax policy by acting on behalf of the
government as a collection agent somehow makes that agent a payer of
such taxes.

Who pays sales tax? You the consumer or Joe the 7-11 store manager?

> Why did you attempt to erase all of that and simply repost your assertion?

I tried, perhaps in vain, to focus the question back to what I thought
was the question.

> > Then some goes to pay
> > rent, and some goes to buy groceries and under PITAX today, some goes
> > to pay personal income taxes.

> And once again, I addressed this in detail too.

See, that's the problem. You think you did but I can't see. I am
hardly unskilled in the area of economics, mathematics, and the law. I
am not a tax accountant (I hire those), I am not a banker (I hire
those), but I have been in business in three countries and owned and/or
operated both small and medium size concerns (semi-retired now).

> Yet by snipping everything of
> the debate wherein I've shown this assertion to be devoid of logic, you think
> that simply reasserting it makes it true. I've got to say that your debating
> style isn't all that far off from Paul Thomas.

Now you are just being mean. To Paul I would think.

I tried to direct the debate by restating the issue, restating what I
believe your position is, and by restating what mine is. This is, by
the way, exactly what debaters don't do - because it leaves them wide
open to rebuttal without recourse.

> If you want an honest debate,
> then you need to abandon this penchant you have of just reasserting your
> position when you can't come up with any response to being shown where your
> logic is flawed.

WHERE IS IT FLAWED? And reasserting that it is circular just doesn't
cut it.

Wage earners earn gross income and pay expenses. Incluxded n these
expenses are taxes. That's what happens every April 15th. You file a
personal income tax return detailing out what your GROSS wages are,
deducting the tax codes available deductions leaving a taxable gross
(AGI) and then pay taxes accordingly.

If you completely eliminated ther withoholding responsibility of
employer firms, this would not change. Yet your argument would.

> Why should I once again respond to this flawed assertion of yours when I've
> already done so just for you to call it crap, snip it, and repeat the flawed
> assertion?

Because you haven't done it effectively?

> and if you don't think it's flawed, and if you think you've shown my
> response to this assertion to be flawed, then why didn't you want to follow
> through on the debate?

What debate?

At the top of tis thread I stated the proposition and the arguments on
both sides and for the last 500 words you've done nothing more than
whine about how I won't debate you.

> Anyway, as I said the first time you posted this crap, the income tax is
> different than those other personal expenses because the PIT is a direct result
> of the employement,

No - PITAX is a direct result of INCOME irrespective of its source. It
is the way government funds its operations (in part). The government
can fund its operations through a variety of ways - including pillaging
and plundering neighboring countries.

> and because, unlike those other personal expenses, the
> employee gains no direct benefit from paying the tax .

Of course he does - he doesn't go to jail, for one. But moreover, he
benefits frm all the goods and services provided by the government with
that money. He benefits because there is a government to amintain law,
order, and an economically valid environment for commerce. If
government added no value, why have it?

> > And nothing you have said changes this.

> It's pretty interesting that instead of showing how what I've said is flawed,

Just did - AGAIN.

> you just snipped it and reasserted. It's transparent what happened here. You
> began to respond to what I had to say, you saw that you could not sustain your
> arguments because they were shown to have failed, and you got so frustrated that
> I didn't simply accept your assertions at face value that you snipped everything
> as a sort of a psychological attempt to erase your failures, and you've simply
> reposted what you asserted in the first place.

Pop psychologist?

Let me post a statement regarding the role of the firm with respect to
withholding of PITAX:

" It's [Withholding] to approximate your total lax liability so that
the amount you'll owe the Feds at the end of the year is minimal, if
any."

Do you agree that this statement is true?

> > Call it circular, fine - but
> > it is the process by which individuals pay (part of) their share of
> > taxes.
>
> Yet you've not been able to make the case that the process is nothing more than
> a mirage. You've never been able to challenge the case that what the benefits
> which the employee takes away from his employment is the sum total of his
> compensation.

I totally agree - that's not the issue. Perhaps this is where we view
the world a bit differntly, though, and why you insist that employers
pay PITAX and I insist employees do.

I am fine with the fact that the value of ones labor is reflected in
the sum of all benefits provided by the employer. Correct me if I am
wrong, but do you posit that PITAX transfer payments made by employers
on behalf of employees is NOT a benefit to the employee?

> Yes, I know that you've made the silly argument that his withholdings are a
> benefit because they go to offset the liability of the PIT <snicker>, but
> because that liability was only created by the PIT in the first place,

The liability is created BECAUSE someone has to pay for the workings of
government. It has been determined that some of this liability falls
on the individual and some of this liability falls on the firm.

> to claim
> that the credit is a benefit of the PIT is not only circular, it's just rather
> silly.

I disagree - and once again, you justify your position by calling it
circular and silly.

> You obviously agree, or you would've shown me how that logic is wrong.
> Isn't that so?

I have shown you that PITAX is exactly what it is - a PERSONAL income
tax. It is not a business tax. The amount of PITAX is a function of
all sorts of things and is unique and specific to the individual. The
extent of the liability is based on the magnitude of the income of an
indivisual adjusted for personal life situations. It is not a tax on
the firm. For that we have BUSINESS income taxes on profits.

> > And when NST goes into effect, ALL wages still go to the employee and
> > some goes to pay rent, some goes to buy groceries, and some goes to pay
> > NST. The only difference is whne the piper is paid and based on what.
> >
> >
> > Very simple.
>
> Then it amazes me why this very simple assertion of yours can't seem to
> withstand the simplest of challenges. Doesn't that amaze you too?

What challenge? Calling it circular and silly is hardly a challenge -
it is your opinion.

Here's one thing you wrote trying to differentiate between PITAX and
other expenses at the individual level:

"my response is that the tax only materializes as a direct result of
the employment
whereas the others essentially do not, and that it's very magnitude is
also a
direct result of the employment. Those other expenses did not spring
from the
employment itself."

This statement, in isolation as I have posted it here is valid. There
is no question that income tax is only levied on income. That does not
change the character of the liability. It is an expense borne by the
individual.

If you live at mom's you pay no rent. If you live in an apartment, you
do. So? Does that make rent different in some way? Rent only
materializes as a direct result of living in an apartment.

See the problem with that as the basis? And regardless, PITAX is NOT a
tax on a firm's gross wage payments, it is a tax on an individual gross
wage receipts.

If it were on the firms gross wages paid, then it would be a labor VAT.

> > Here are other thngs that are deducted from gross before you see the
> > cash. If in fact PITAX is a business tax because it is not in the pay
> > envelop, then these too must be a business tax.
> >
> > Employee share of 401K
> > Employee health insurance premium cost sharing
> > Employee share of SS
> > Employee share of life insurance
> >
> > More?
>
>
> Once again, you've never been able to address that point I made numerous times
> that you're simply using the complexities of the PIT to support it's existence.
> Why were you never able to answer the question that if your theory is correct
> that the employee really pays the income tax, then why can't you support that
> theory if it were a flat tax, with no exemption, and no progressivity?

I did. It is the same - UNTIL you make it a business labor VAT - and
hold the firm accountable and legally responsible for its payment.
Currently, that is not how the system works.

And, moreover, there still is this pesky issue of how to manage PITAX
on non-wage based income. So if in fact PITAX isa business vat as you
insist, how do you explain non-wage income on Schedule A? I'm thinking
your premise just sunk to the bottom of the ocean.

> Why'd
> you snip all the times I asked you that?

I've replied on a number of occasions to that -

Here, let me show you:

You wrote:
"I think that you're once again using the complexities of the income
tax system
to support your argument, when the underlying issue is the income tax
itself.
If your argument were valid, then it should apply just as well as if
there were
no such complexities, correct? "

" Again, that is correct in the absence of converting the PITAX to a
VAT
which, if you eliminated ALL complexities you could do since the
estimated future liability for the PITAX is no longer an estimate but a

reality and any adjustments would no longer be necessary. All you
would need to do is convert the tax law indemnifying the individual for

any aspect of the tax or its payment and pay people a straight net
amount. Unfortunately, in the absence of this first step, your second
step doesn't work - converting to an NST that results in a 100% price /

tax offset."

OK? You asked, I answered.

> Just more stuff to make you go hmmmmmmm.

You need to read what I wrote before you scratch your *** and go
Hmmmm.

But I noticed you have respionded elswhere and I have a few minutes
before heading off to the golf course for a bit of consulting.

js

.