Re: [MLUG - DISCUSSION] Flat Tax

["Christian M. Cepel" <EMAIL:PROTECTED>]

Just a general reply to your mention of cars and homes, but reality is 
of the kind outlined in the fair-tax book, than none of those prices 
would increase at all.  There's reasons why it pretty  much balances 
out...  It is also suggested that we will see a boom in US production 
and a much better and more stable economy.  I've read the book and don't 
recall seeing 40% anywhere.

Mike Miller wrote:
> On Thu, 4 Jan 2007, Christian M. Cepel wrote:
>
> > Mike Miller wrote:
> >
> > > One major problem will be to make sure that item sales are 
> > > documented accurately.  Suppose there is a 40% tax and someone is 
> > > selling a car for $20,000.  The seller could tell the buyer that 
> > > he'll write it up as a $10,000 sale to save $4,000 in taxes and 
> > > split that savings with the buyer.  How will we stop them from doing 
> > > this?  We can't stop all income tax fraud, but we do have a 
> > > government agency investigating it. We will need a new agency to 
> > > investigate the new kinds of fraud that arise with a new tax system.
> > Two problems here Mike.  The first is that people have been doing 
> > that forever.  I mean, duh.  I would say that the majority of private 
> > vehicle sales are fraudulently undervalued when taxed and licensed.
>
> Private vehicle sales don't seem to be a problem for your proposal 
> because the private sale will be of a used vehicle.
>
>
> > Also, there is no luxury tax or special tax...  the amount is 23%... 
> > flat.. for everything.
>
> You hope it will be 23%.  There is no guarantee of that.  It will have 
> to be increased if it isn't high enough.  The value of 40% was 
> suggested by in the book review.
>
>
> > You've also misread my earlier post so there are even additional 
> > problems.
> > 1.  You and the dealer would not be taxed on the vehicle I believe.  
> > I believe the taxes have already been paid at a lower level if you will.
> > 2. In a private sale of a previously owned vehicle, you would not be 
> > paying tax on the sale since there would be no double taxation.
>
> This will massively increase the selling price of used cars because 
> new cars will be overpriced due to the new tax.  That will be 
> interesting.
>
>
> > > Will the massive tax apply to home purchases?  Only to new homes and 
> > > not to used homes?  New cars but not used cars?  How will "new" be 
> > > defined? Again, you need rules and investigative bodies to deal with 
> > > "newness" fraud.  If I build a house, then "live in it" (however 
> > > that is defined) for a week before selling it, is it "new" or 
> > > "used"?  When Ford sells a new car, can they call it used if the 
> > > lend it to an employee for a week before selling it?  How will you 
> > > deal with these kinds of problems.  Of course you will need a large 
> > > federal government bureaucracy with thousands of hated investigators 
> > > snooping all over the place.
> >
> > Yes only to new homes.. It doesn't matter if it's a roll of toilet 
> > paper or a luxury business jet... the tax rate is 23% and no taxes 
> > would be paid on it by the purchaser.  The tax has already been 
> > extracted on the component pieces.  Again.. if I'm understanding this 
> > correctly.
>
> The massive boost to the price of new homes will make the price of 
> used homes go up too, but not as much.  People will avoid buying new 
> homes because of the tax.
>
> There are so many implications of this kind of enormous rewrite of tax 
> law that it is an extremely risky proposition.  Be wary of anyone who 
> claims to know for certain that it is a good idea.  They are gambling 
> with our futures.
>
> Mike
>
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--
Christian M. Cepel - Thistledowne Productions - http://thistledowne.org
Computer Support Specialist, Sr. - University of Missouri - Columbia
College of Education - School of Info Science & Learning Technologies
VRCbd, KidTools & StrategyTools Support Systems Projects, and Truman,
Library Whistlestop Project - Web Design & Programming - 573.999.2370


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