Pres. LWW talks the Fair Tax to his CFO

[Soflasnapper]

In a happy event in the future, the Fair Tax as proposed is implemented as of the following January 1st.

A couple of executives at one retail outlet are discussing the plans they need to make. (By a major coincidence, the president of this firm is LWW.) Let's listen in!

President LWW to the CFO: Are we ready to go on this one?

CFO: Yes, it's pretty easy, actually. Out of every sale we make, 23 cents of each dollar is due back to the government as the Fair Tax amount.

Pres LWW: And we're keeping the prices where they are, right? Thank God for that! Repricing everything in the store would be ridiculous busy work.

CFO: No, actually boss, we're going to be adding about 30% to our prices so that this will work. You know, divide 23 by 77, and...

(interrupting) President LWW: WHAT!!! The people will not buy these products at a 30% markup! We must keep the prices the same. We're going to save a lot of money from the elimination of the payroll tax, and...

(interrupting) CFO: Our gross payroll expense is 30% of our gross sales revenue. We'll save 7.65% of 30%, which is only 2.3% of our gross in savings, and we're talking about sending 23% of every dollar we earn. This is only 1/10th enough savings to afford that.

Pres LWW: Wait! Don't forget-- we also don't have to pay any corporate tax! We'll be saving a bundle with that one!

CFO: Our profit margin is 8%, among the highest in our industry. Saving 35% of 8% is just 2.8% of our gross income. Still way short. We must raise the price at the checkout stand. It's the only way.

Pres LWW: Well, that's two savings right there! What's the total savings to us from both of them?

CFO: 5.1%.

Pres LWW: Now wait a minute. That's not right! What did I hear them say? Oh, yes! ALL OUR SUPPLIERS will have savings, and pass all of them along to us! That will make up the difference! You know, you really are a negative statist, the way you pretend to be all neutral and only look at the numbers! What a tool!

CFO: As you say, sir. (cough) However, probably the most any of them will save will be around the same 5.1%, depending on how much their payroll and profits are as a percentage of their total gross business. More or less around that amount.

As our cost of sales is 40%, saving 5% there will save us another 2% to the bottom line.

Pres LWW: Now we're getting somewhere. What's the total of all these three savings?

CFO: Well, that would be 7.1%. But sir, we cannot be sure we will even receive that savings from our vendors. Certainly, we have no current offers to drop their prices by that much. Even if we did receive all this savings, and dropped our expenses by 7.1%, we will go broke sending off 23 cents out of every dollar we earn if we keep the same prices. Assume we make no profit, and the 8% is added to the 7.1%, = 15.1% in savings. By sending off 23% of the gross, we lose 8% on each dollar of sales. We cannot survive.

Pres LWW: I can't believe this! What you're saying is we really must re-price everything in the store 30% up or else we'll run in the red? Those price increases will ruin our sales!!

CFO: Not exactly. Considering the payroll tax savings is a certainty, and we really will be saving the corporate tax as well, we can hold the increase to 25% and we should be ok. Maybe if the vendors drop their pricing the 5% as well, we can eventually drop the increase to 23%, but we'll have to see whether that happens or not.

Pres LWW: Well, I'm shocked. I wouldn't have supported this if I knew all the prices would have to go up. Listen, we ALREADY priced things where the sweet spot would be, to maximize volume and profits. When these prices are increased, you know what that means-- lower sales volume. Automatic.

CFO: Not entirely, sir. The people will have a lot of extra money as well, so they'll be happy to pay the extra, and able to as well!

Pres LWW: As in, how much extra money?

CFO: Sorta like us, but better. ALL of their income will be saved the 7.65% in payroll tax, and the income tax as well.

Pres LWW: Don't get me started on that one. You know most people don't pay any federal income tax! Savings from non-existent income tax is zero! How are they going to afford a 30% jacked up price by saving under 8% of their income?

CFO: Remember, all excise taxes will also be eliminated, so there's that.

Pres LWW: But the gasoline tax is only 18 cents a gallon, or 5% of the pump prices lately.

CFO: Don't forget, no state sales tax.

Pres LWW: Another 6%?? You're killing me here!

CFO: I know that doesn't seem like much, but then there's the monthly prebate checks everyone gets on top of that.

Pres LWW: And that would amount to?

CFO: About $115 a person a month.

Pres LWW (exploding): Are you trying to tell me that people saving under 8% on their payroll tax and getting another $115 a month are going to just LOVE paying these 30% higher prices??!?!?! Are you some kind of moon-bat??!?!

CFO: Well, of course, we expect sales resistance-- at first. Eventually, as the savings get redistributed, and prices rebalance, the old sales levels will return. There was that retailer study done back in the day that showed it will.

Pres LWW: And how long did they say that would take?

CFO: About 4 years, sir (looking down at his feet and away).

Pres LWW: Oh my God, shoot me now!

[cushioncrawler]

Pres LWW: Hey -- kanna we gedrounda diss 23% bullshit????

CFO: Sura boss, eezy. But dare ainta no needta boss.
Our prezen margin iza 8%, mucha higha danda eastside mob. So, ifa we can turnover da goodsa oncea weeka -- we canna maka 416% profit ina year.

Pres LWW: Ok -- earsa whaddawedo -- we only pudda da one sale trooa da books, dat leevsa us 393% -- heara whadda i'm sayen.

[jimmyg]

The serfs have always paid, and the current group will change nothing. Razzle dazzle, again and again.

Where is Braveheart?

J

[Sev]

Funny how people fear the Fair Tax.

[LWW]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">In a happy event in the future, the Fair Tax as proposed is implemented as of the following January 1st.

A couple of executives at one retail outlet are discussing the plans they need to make. (By a major coincidence, the president of this firm is LWW.) Let's listen in!

President LWW to the CFO: Are we ready to go on this one?

CFO: Yes, it's pretty easy, actually. Out of every sale we make, 23 cents of each dollar is due back to the government as the Fair Tax amount.

Pres LWW: And we're keeping the prices where they are, right? <span style='font-size: 11pt'><span style="color: #3333FF">You lost right there when you told the first lie.</span></span></div></div>

http://funingallery.com/wp-content/uploads/Images/Epic%20Fails2/24.jpg

[LWW]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Sev</div><div class="ubbcode-body">Funny how people fear the Fair Tax. </div></div>

Good question.

Hard core statists are much like zoo animals that have never lived in the wild.

Although they have the physical ability to hunt and survive ... they have never had to learn the skills required to live free.

Hence, after a lifetime of being beholden upon the state for their survival ... most of them won't leave the safety of their confinement if the cage is left open. Of those that do leave, almost all return.

[jimmyg]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Sev</div><div class="ubbcode-body">Funny how people fear the Fair Tax. </div></div>

Fear (reject) everything the politicians and the government push onto the serfs.

J

[Soflasnapper]

What's a lie about that? In what respect?

It can't be 'a lie,' it is a fictional dialogue.

Perhaps it is mistaken, but it even seems to follow your position. Explain to me if it doesn't.

I have complained to you that the FAIR TAX would necessarily put all of that tax or most of it onto the current retail price, and you have consistently denied that it will. Are you now quibbling that some of it will have to be added, and you are acknowledging that?

Or is it my other claim, that with a considerably higher price, people will buy less?

[LWW]

Who said prices would stay where they were?

What's that?

Just you ... and the statists who hate the FAIRTAX?

How many times has it been explained to you that it's not true?

What's that?


Several?

You just don't want to believe it because it doesn't fit the party agenda?

But ... I already knew that.

[Soflasnapper]

I have never said prices would stay where they are.

I have said the opposite, that prices would rise 30%.

When I said that, you said I was mistaken, or ruder words to that effect. That's why I put that position in your voice in this thread.

[cushioncrawler]

Free fairs
".....Some fairs were free; others charged tolls and impositions. At free fairs, traders, whether natives of the kingdom or foreigners, were allowed to enter the kingdom, and were under royal protection while travelling to and returning from the fair. The traders, their agents, and their goods were exempt from all duties and impositions, tolls and servitudes; merchants going to or coming from the fair could not be arrested, or have their goods stopped......"

If i were king, fairs wouldnt be taxed.
mac.

[cushioncrawler]

From Wikipedia
The GST (Goods and Services Tax) is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer.

It was introduced by the Howard Government on 1 July 2000, replacing the previous Federal wholesale sales tax system and designed to phase out a number of various State and Territory Government taxes, duties and levies such as banking taxes and stamp duty.

Introduction of the GST
1980s The idea for a broad-based consumption tax was first proposed by then federal treasurer Paul Keating at the 1985 Tax Summit but was dropped at the behest of then Labor Prime Minister Bob Hawke after pressure from the ACTU, welfare groups and business, which did not like its association with proposals for capital gains and fringe benefits taxes.

1990s The idea was refloated in 1991 by the opposition Liberal-National Coalition, and was the centrepiece of the opposition's "Fightback!" platform at the 1993 election, when Keating was Prime Minister. The opposition had difficulty explaining the policy, as illustrated in leader Dr John Hewson's Birthday Cake Interview, and Keating's campaign exploited public distrust of the GST. The GST was to varying degrees considered a factor in the opposition's surprise election loss of the 'unloseable election' in 1993. In 1994 The Liberals decided to discard the remnants of Fightback and Alexander Downer replaced Dr Hewson as Liberal leader.

John Howard was re-elected leader of the Liberal party in 1995, and pledged "never, ever" to introduce the GST.[1] Howard led the Liberal-National Coalition to a large victory in the 1996 elections.

Still, before the 1998 election, Howard proposed a GST that would replace all sales taxes, as well as applying to all goods and services. The Howard Government finished on a two-party-preferred vote of 49.02% at the election, suffering a swing of 4.61% to Labor on 50.98%. However, the incumbent government retained a parliamentary majority of seats in the lower house. Howard described the election win as a "mandate for the GST". Lacking a Senate majority, and with Labor opposed to the introduction of the GST, the government turned to the minor parties such as the Australian Democrats for support.

A prominent selling point of the legislation was that all revenues raised by the GST would be distributed to the states. As such, an agreement was enacted with the state and territory governments of Australia in 1999 that their various duties, levies and taxes on consumption would be removed gradually over time, with the budget shortfall being replaced by GST income from the Commonwealth Grants Commission. Furthermore, (federally levied) personal income tax and company tax was reduced to offset the GST.

During the 1998 election campaign, the Democrats leader Meg Lees stated that her party was opposed to the GST unless food, books and tourism packages sold offshore were exempt and other tax measures were implemented.[2] The government initially stated that these exemptions were not possible and looked more likely to win a compromise with independent Senator Brian Harradine, but eventually a compromise was reached with Lees, including most basic food items being exempt from the GST, library purchases of books being refunded the GST, a temporary 8% refund on school textbooks, increases to welfare payments, and greater powers to the ACCC. A proposal was made to exempt tampons from the GST but it was dismissed by the Prime Minister.[3] The legislation was passed on 28 June 1999 as A New Tax System (Goods and Services Tax) Act 1999. It gained assent on 8 July 1999 and came into operation on 1 July 2000.

[LWW]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">I have never said prices would stay where they are.

I have said the opposite, that prices would rise 30%.

When I said that, you said I was mistaken, or ruder words to that effect. That's why I put that position in your voice in this thread.

</div></div>

Nice spin.

What you clearly did was say that I said they would ... which I never did.

In reality they would drop.

Your idea that they would rise by 30% demonstrates a total lack of knowledge of basic economic principles.