Text 14421, 39 rader
Skriven 2005-10-09 09:44:58 av Peter Knapper (3:772/1.0)
  Kommentar till text 14401 av Raymond Yates (1:3613/48)
Ärende: forever in debt
=======================
Hi Ray,

 RY> Businesses do not pay tax, they pass that along to /you/. These taxes are
 RY> called "embedded taxes" and average about 22%. With the 
 RY> FairTax these taxes
 RY> are /abolished/ and replaced with a sales tax that /everyone/ pays at
 RY> point-of-sale, business, government, tourists, 
 RY> everyone.. More people paying
 RY> into the system that were not doing so before, that's good.

I had a look at the Fairtax Web site last night and it looks pretty much like
what we (New Zealand) did about 20 years ago. We implemented GST (a consumption
tax titled as "Goods & Services Tax"), where only the end consumer of the
goods/services pays tax on them, there is no tax component added at each stage
of the production process as our prior tax system did. 

All the same fears arose that you are seeing, but the end result over 1-2 years
was that prices as seen by the end consumer generally went down, in some areas
quite markedly (most notable was Television sets, they dropped to 60% of what
they used to be). The other end consumer useful part here is that the retail
pricing for the end consumer must be displayed as GST inclusive (so that you
know the FINAL price of anything), although the invoice must clearly provide
both the GST exclusive price plus the GST content.

The main "issue" arose over declaring who the end consumer was, EG if you had a
business purchasing goods consumed WITHIN the business and not on-sold. GST is
paid for those goods BY the business as the business is the consumer of the
goods. Of course they can also claim bvack tax relief on that as part of their
business expense.......;-)

Overall it seems to work quite well, but it did introduce a small "gap" for a
few light fingered people try and work around the system but most of those gaps
are gone by now.......;-)

Cheers...........pk.


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