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View Diary: Stimulus spending: Paul Krugman was right (210 comments)

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  •  Prey tell, how (0+ / 0-)

    Replacing an extremely regressive tax that inflates the cost of everything by 15% and replacing it with an increase in the FTT of a half point with an ad valorem tax on all sales no matter to who or where the sale is made, how can that be concidered even remotely regressive? A big corporation with $1 billion in sales remits $5 million of those sales to the federal treasury. The local store has sales of $100K for the same period. The local store remits just $5000. The cost of federal payroll taxes are already three times more than the replacement tax for the local store, but the big corporations will be paying far more with this tax than they currently pay. Bigger savings for small businesses and higher taxes for large corporations, that sounds progressive to me.

    Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

    by RMForbes on Mon Jun 14, 2010 at 03:17:54 PM PDT

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    •  So how does reselling work? (0+ / 0-)

      Company A build widget but doesn't maintain a store to sell those widgets to the consumer. Company B buys widget and resells it to consumer. Where is the ad velorem tax paid? Does Company A and Company B both pay the FTT on the good?

      Republican ideas are like sacks of manure but without the sacks.

      by ontheleftcoast on Mon Jun 14, 2010 at 03:40:01 PM PDT

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      •  It doesn't matter who buys the product or service (0+ / 0-)

        or where it's sold. The cost of the tax is included in the price and remitted to the treasury.

        Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

        by RMForbes on Mon Jun 14, 2010 at 04:00:08 PM PDT

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        •  So you do end up hurting the small stores (0+ / 0-)

          They can't afford to manufacture and sell their product. They have to buy their products from another source and the price goes up. Then they sell it with an effective double tax. The larger places like Wal*Mart could easily game the system buy directly owning the production and selling with one less tax increase.

          Republican ideas are like sacks of manure but without the sacks.

          by ontheleftcoast on Mon Jun 14, 2010 at 04:05:17 PM PDT

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          •  No it doesn't do that at all (0+ / 0-)

            It's just another cost that gets worked into the price. Just like the cost of labor or the cost of utilities but instead it's a easy to calculate consistant cost. It's not an added value tax that is calcualted all the way up through production and paid by the buyer at the register. No matter what the price the item or service is sold for, the cost of the tax is always already included. The business only needs to know how much they sold and then calculate the tax owed.

            Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

            by RMForbes on Mon Jun 14, 2010 at 04:27:52 PM PDT

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            •  Sorry, now you're making even less sense then (0+ / 0-)

              before.

              Take a cotton shirt.

              Farmer A grows cotton sells it to cloth manufacturer B.
              Cloth manufacturer B makes cloth sells it to shirt maker C.
              Shirt maker C makes shirt sells it to retail store D.
              Retail store D sells shirt to consumer.

              Seems that A, B, C, and D will all pay the taxes.

              Now look at this

              Farmer A grows cotton sells it to HyperMegaMart E who produces the cloth and makes a shirt from it.
              HyperMegaMart E sells shirt to consumer.

              You saying that if the cost of goods and labor are the same that the shirt from retail store D would be the same as HyperMegaMart E?

              Republican ideas are like sacks of manure but without the sacks.

              by ontheleftcoast on Mon Jun 14, 2010 at 04:36:47 PM PDT

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              •  Yes they all include the cost of the tax (0+ / 0-)

                in the price they charge. The cost is included. The cost of the tax is always the same rate but these costs are not cumlative. It doesn't matter how many levels of manufacturing and distribution a product goes through the seller alway includes the same 5% rate to cover the cost of the tax just like they must do to cover the cost of wharehousing or shipping. The only difference is shipping may add only 1% or upwards of 90% to the cost of an item this tax is always a constant rate. Much easier to work into the final price calculation.

                Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

                by RMForbes on Mon Jun 14, 2010 at 05:07:00 PM PDT

                [ Parent ]

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