At first glance, this appears to be an annual net loss of $299.94, making a national sales tax a bad choice, but what about those hidden embedded income taxes and the cost of collection?
When spending money for necessities the family pays directly for the goods and services received, and pays indirectly all of the hidden embedded costs of the income tax. The hidden embedded cost of the income tax affects all purchases. Assuming the national sales tax system is a mere 2.5% more efficient than the current income tax system (a conservative estimate), this family will avoid an additional $535.60 of hidden embedded taxes (2.5%×$21,424), providing an annual net savings of $235.66 per year (-$299.94 + $535.6). As does every family and person, people near or below the poverty line, about 14% of the nation, daily pay income taxes and their associated collection costs hidden in the price of necessities. Eliminating these hidden embedded costs effectively increases everyone’s standard of living by at least 2.5%. Furthermore, replacing the current income tax with a 14% national sales and use tax provides an approximate 5% rise in true purchasing power for every additional 25¢ per
Related Questions
- Will I still benefit if I am subject to the passive loss rules (PAL), net operating losses (NOL), or the alternative minimum tax (AMT) or because I am a nonprofit entity that doesn pay income taxes?
- At first glance, this appears to be an annual net loss of $299.94, making a national sales tax a bad choice, but what about those hidden embedded income taxes and the cost of collection?
- What is the difference between ‘Capital growth/(loss)’ and ‘Return on investment’ that appears on my Annual Statement or Periodic Statement?
