Replace All Federal Taxes on Income with the Fair Tax Act , HR 25
Wealthy people do not pay all the taxes
Businesses do not pay taxes, their customers do. The taxes collected and forwarded to the government are a cost of doing business. It is built into the price of the goods or services provided by the business. This is one of the key issues of the Fair Tax ---EMBEDDED COSTS
Carry this concept a step further. Wealthy people are the owners of these businesses. They get the funds to pay their self-employment tax (Social Security and Medicare) and their personal income taxes out of the business profits. They set the prices and fees for the business to include these taxes! The customers of their business are also paying the personal taxes of the wealthy people. It is just another EMBEDDED COST.
What does this mean? EVERYONE including the low income and middle class pays the taxes in the end.
The politicians are not being truthly when they say "they are only taxing the wealthy."
Carry this concept a step further. Wealthy people are the owners of these businesses. They get the funds to pay their self-employment tax (Social Security and Medicare) and their personal income taxes out of the business profits. They set the prices and fees for the business to include these taxes! The customers of their business are also paying the personal taxes of the wealthy people. It is just another EMBEDDED COST.
What does this mean? EVERYONE including the low income and middle class pays the taxes in the end.
The politicians are not being truthly when they say "they are only taxing the wealthy."
Replies to This Discussion
-
Permalink Reply by Sean Fagan on
-
Hmmm, well ummm, gee...
While I agree with your basic premise, I have to disagree with your overall argument Chief. My wife and I own a small business, but we are not wealthy by any stretch of the imagination. I'm afraid that I can't site specific details and numbers, but I would have to say that an overwhelming majority of small businesses are "mom and pop" kind of stores like ours - again, not really wealthy, just good hard working American people trying to earn an honest living.
That being said, you are right in saying that businesses set their prices based on all factors - which include the EMBEDDED COSTS of all the taxes and it is the consumer that ends up paying for the taxes in the end; after all, for a business to remain successful it must maintain a profit margin - a concept that seemingly few people fully understand.
I'm sure my friend Randy Stone would be amongst the first to agree with me that he is not wealthy either, but rather just another small business owner working untold hours to eek out a decent and honest living for his family.
Lose the tone about the wealthy owning/driving what makes America great - it is all of us little people that fuels the economy.
-
Permalink Reply by chiefcook on
-
I did not say that this applies only to the wealthy. It also applies to any size business.
Both you and Randy Stone set your business profit margin to produce the after tax money you want in your pocket. (Based on a particular level of business) If you meet your business plan, you reach your personal income goal. As a small business, this is an honest living as you state. The difference between you and a wealthy business owner is the amount of business each does. The profit margin for similar businesses are most likely the same.
My point is that your customers are funding your personal income taxes and your personal self-employment tax. That is why you are in business.
Small business is the backbone of the Country. The wealthy business owners are just the expanded small business owners.
This is different from those individuals that have received their wealth from others and have not worked for it.
-
Permalink Reply by Randy Stone on -
Chiefcook, as I have replied to Sean, I agree with how it all works but also agree with Sean on the fact that small business owners should not be considered as wealthy.
ALL taxes are passed on to the consumer and that means that the tax burden is still on the poor and middle class (a dying class at that).
I know what you are saying and that you did not mean to stipulate big or small business or to assume that all business owners are wealty. Your point of exposing the government for mis-leading the people of who has the highest tax burden is in fact true.
Fair Tax 101, the embedded taxes
-
Permalink Reply by Randy Stone on
-
Sean!
So glad that you remember me (and sadly my struggles in this economy).
I am well schooled in the Fair Tax and the description Cheifcook gave was correct in how it works. The Govmt will state that they want to tax the wealthy and they can prove it with the percentage of tax burden with their numbers. What they fail to convey is that ALL embedded taxes from big or small businesses are really paid by the consumer. So the poor are still taxed at a high rate, and they say they have reduced the tax burden away from the poor (which in fact I am a poor man running a small business).
In America, the small businesses are the heart and soul of the economy because the mere numbers of them that provide jobs and therefore money into the economy.
I agree with Chiefcooks assesment but also agree that we are not rich as most small business owners are not and should not be considered so.
Thanks again for thinking of me and mostly for knowing I would agree with you.
-
-
Randy (and you too Walt),
In all honesty, I have to admit that I might have over-reacted just a little bit to Chiefcooks posting. Since I had recently heard statistics that 80% of our economy comes from small businesses like yours and mine, I guess I didn't like being put into that "wealthy" category without actually being a member of that club.
Again, Chiefcook's main point is well founded and accurate. I find it difficult to believe that so many people don't understand how this economy really works and fall into that "tax the wealthy" trap every time. However, I do think that Chiefcook could have made his argument equally as well without generalizing that business owners are wealthy.
-
Permalink Reply by Randy Stone on
-
Our real focus is on educating America on the truth. The Fair Tax has been a very popular topic in my store of late and it has been a pleasure getting people to understand the need for the Fair Tax.
I too will get a little frustrated when some make assumptions that are not true. Mostly on looking for faults in the FT that are not there, like it can be full of loop holes and they can get out of paying taxes.
Chiefcook was really making points for the Fair Tax and how govmt mis-leads the people on taxing the classes.
© 2025 Created by Marilyn Rickert.
Powered by
