The Briefing Room
General Category => Economy/Business => Topic started by: Sanguine on January 10, 2019, 02:48:01 am
-
Finally, an article from CATO that I agree with.
By Chris Edwards
Share
Rep. Alexandria Ocasio-Cortez is making headlines calling for raising the top individual income tax rate to 70 percent to fund a Green New Deal. Sympathetic commentators are saying that such a high rate on the wealthy is no big deal because the top tax rate used to be 70 percent and above. Noah Smith at Bloomberg says the congresswomen’s plan would be “a return to the 20th century norm.â€
The problem is that globalization has dramatically changed the economy over recent decades. High tax rates were not a good idea back then, but they would be disastrous now.
Before the 1980s, capital controls under fixed currency exchange rate regimes kept money bottled up within countries, keeping taxpayers in national economic prisons. That regime broke down, and today trillions of dollars flows over borders under flexible exchange rate systems, while industries and entrepreneurs have become highly mobile. Tax bases are far too movable these days for governments to sustain yesteryear’s excessive tax rates, as I discuss in Global Tax Revolution....
https://www.cato.org/blog/high-tax-rates-wont-work-todays-economy (https://www.cato.org/blog/high-tax-rates-wont-work-todays-economy)
(https://object.cato.org/sites/cato.org/files/wp-content/uploads/oecd_tax.png)
-
Plus in many cases there was enough deductions that you did not pay 70%. We see when taxes get too high for anyone’s comfort level there’s pushback. A perfect example of this is people leaving high tax states to move to lower tax states
-
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!
Http://fairtax.org (http://Http://fairtax.org)
-
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!
Http://fairtax.org (http://Http://fairtax.org)
I agree. I'm a big fan of a consumption tax. Then everyone would have some "skin in the game". But how would it work?
-
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!
Http://fairtax.org (http://Http://fairtax.org)
That's right.
-
I agree. I'm a big fan of a consumption tax. Then everyone would have some "skin in the game". But how would it work?
A 30% tax on every consumer good in the country—which still probably wouldn't cover our federal budget—coupled with a basic income guarantee they like to call a "prebate."
Want to buy milk and bread? Tax.
Want to buy stock? No tax.
-
My problem with a consumption tax is that the incentive for the seller is to not report sales, whereas with an income tax, the incentive for an employer is to report income.
-
A 30% tax on every consumer good in the country—which still probably wouldn't cover our federal budget—coupled with a basic income guarantee they like to call a "prebate."
Want to buy milk and bread? Tax.
Want to buy stock? No tax.
You don't have to tax some basic items, and we haven't covered our federal budget in a long time.
-
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!
Http://fairtax.org (http://Http://fairtax.org)
No doubt.
-
My problem with a consumption tax is that the incentive for the seller is to not report sales, whereas with an income tax, the incentive for an employer is to report income.
Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.
However, I am against a federal tax at all - If they want money, have em get it from the state, and let the state tax me.
-
I agree. I'm a big fan of a consumption tax. Then everyone would have some "skin in the game". But how would it work?
And how do you implement it without screwing the people who already paid half their income under the income tax model?
-
Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.
However, I am against a federal tax at all - If they want money, have em get it from the state, and let the state tax me.
Yep. Let the state get it's hands on our money (aka "their" money) and they'll have an incentive to see less go to DC. Then repeal the 17th, increasing the power of the states.
-
Yep. Let the state get it's hands on our money (aka "their" money) and they'll have an incentive to see less go to DC. Then repeal the 17th, increasing the power of the states.
That's right - and legit.
And get rid of property tax too, btw... Straight up retail consumer tax only... that is te way it all stays transparent, and the whole government has skin in the game for keeping the economy roaring.
-
And how do you implement it without screwing the people who already paid half their income under the income tax model?
I don't understand the question. @InHeavenThereIsNoBeer
-
I don't understand the question. @InHeavenThereIsNoBeer
@Sanguine @InHeavenThereIsNoBeer
If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.
-
@Sanguine @InHeavenThereIsNoBeer
If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.
Oh, I see. Good point. That would include me in the "screwed" category. Sounds like it needs to be introduced on an age-adjusted basis.
-
And how do you implement it without screwing the people who already paid half their income under the income tax model?
@InHeavenThereIsNoBeer
Got to the link and read then get back to me.
http://fairtax.org/faq (http://fairtax.org/faq)
-
@Sanguine @InHeavenThereIsNoBeer
If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.
@thackney
How so?
-
@Sanguine @InHeavenThereIsNoBeer
If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.
Not if food, or at least basic food is not taxed, same with medicines.
You might get whacked on house repairs and buying a motor home or whatnot, but the living part of it should not be taxed anyway.
-
Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.
However, I am against a federal tax at all - If they want money, have em get it from the state, and let the state tax me.
Which is pretty much how the Fairtax would work.
https://fairtax-structure-psyclone.netdna-ssl.com/client_assets/fairtaxorg/media/attachments/56c4/aea2/6970/2d06/a71c/0000/56c4aea269702d06a71c0000.pdf?1455730338
-
@InHeavenThereIsNoBeer
Got to the link and read then get back to me.
http://fairtax.org/faq (http://fairtax.org/faq)
I'd forgotten that @Bigun.
-
Oh, I see. Good point. That would include me in the "screwed" category. Sounds like it needs to be introduced on an age-adjusted basis.
@Sanguine
Lots of people say things about this that are patently untrue in reality. Lots of relevant papers that you should read: https://fairtax.org/research-library/taxes-and-tax-reform
-
@thackney
How so?
Switching to a system that pays 30% tax at the retail counter will deplete the savings built up under a different system of taxing during the income producing days.
From http://fairtax.org/faq (http://fairtax.org/faq)
I know the FAIRtax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter?
30 percent. This issue is often confusing, so we explain more here.
When income tax rates are quoted, economists call that a tax-inclusive quote: “I paid 23 percent last year.†For every $100 earned, $23 went to Uncle Sam. Or, “I had to make $130 to have $100 to spend.†That’s a 23-percent tax-inclusive rate.
We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
Sales taxes, on the other hand, are generally quoted tax exclusive: “I bought a $77 shirt and had to pay that same $23 in sales tax.†This is a 30-percent sales tax. Or, “I spent a dollar, 77¢ for the product and 23¢ in tax.†This rate, when programmed into a point-of-purchase terminal, is 30 percent.
Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100.
You earn your income in the first system then pay the tax again in the second system.
-
Switching to a system that pays 30% tax at the retail counter will deplete the savings built up under a different system of taxing during the income producing days.
From http://fairtax.org/faq (http://fairtax.org/faq)
You earn your income in the first system then pay the tax again in the second system.
The problem with that is that you are already paying a consumption tax although they don't call it that. The Corporate income tax is a functional VAT! Every dollar that corporations spend to pay that tax, and ALL the costs associated with it winds up in the prices of every good and service manufactured in this country today. You pay in every loaf of bread or gallon of milk you buy whether or not you realize it.
I worked all my life under the income tax system and now retired I would give anything to be free of the income tax and the IRS!
-
The problem with that is that you are already paying a consumption tax although they don't call it that. The Corporate income tax is a functional VAT! Every dollar that corporations spend to pay that tax, and ALL the costs associated with it winds up in the prices of every good and service manufactured in this country today. You pay in every loaf of bread or gallon of milk you buy whether or not you realize it.
I worked all my life under the income tax system and now retired I would give anything to be free of the income tax and the IRS!
You clearly don't working in Ranching as a side income like I do. 30% tax on tractor, no way.
-
You clearly don't working in Ranching as a side income like I do. 30% tax on tractor, no way.
When you wring out all of the taxes and compliance costs you are currently paying, the cost of that tractor, including taxes, will be the same or less than you would pay for it today. Same for houses, cars, and any other long supply chain item.
-
Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.
A seller would have a big incentive to sell things out of the back of the store, off the books. I can see a thriving black market economy developing. Just like smuggling and selling Virginia cigarettes in New York.
-
A seller would have a big incentive to sell things out of the back of the store, off the books. I can see a thriving black market economy developing. Just like smuggling and selling Virginia cigarettes in New York.
Well, don't they now? What would be the difference?
-
Not only is capital highly mobile today, but the rapid pace of tech means continuous and often large capital reinvestment is required, something high tax rates kill faster than an orchid in Alaska in January.
-
Well, don't they now? What would be the difference?
A federal sales tax on top of a state sales tax would push the overall sales tax upward 25%. Saving 25% is a much better incentive over saving 7%. Which is why people smuggle Virginia cigarettes into New York instead of Pennsylvania or New Jersey.
-
A seller would have a big incentive to sell things out of the back of the store, off the books. I can see a thriving black market economy developing. Just like smuggling and selling Virginia cigarettes in New York.
The cash economy is already there and thriving... to include labor, so what's the difference?
-
Well, don't they now? What would be the difference?
Zackly. GTMA
:beer:
-
A federal sales tax on top of a state sales tax would push the overall sales tax upward 25%. Saving 25% is a much better incentive over saving 7%. Which is why people smuggle Virginia cigarettes into New York instead of Pennsylvania or New Jersey.
There is only state tax. The feds would have to get their rake out of the states... Giving the states the power, not the feds.
-
You clearly don't working in Ranching as a side income like I do. 30% tax on tractor, no way.
Most every business has gamed the deduction system already. Corporations do not operate under the same income tax system as most Americans do. The deductions and loopholes available to them are far different than what is available to someone making a middle-class income.
The FairTax has no deductions. That's why they propose the Basic Income as a substitute, disguised as a "prebate." It is a recipe for rampant inflation.
-
There is only state tax. The feds would have to get their rake out of the states... Giving the states the power, not the feds.
So what is to stop the state of Illinois from implementing a 27% sales tax, and then not turning over a penny of that to the federal government? Or why should a state like New Hampshire which soundly rejects a sales go against the will of the people and start charging one?
-
So what is to stop the state of Illinois from implementing a 27% sales tax, and then not turning over a penny of that to the federal government? Or why should a state like New Hampshire which soundly rejects a sales go against the will of the people and start charging one?
Exactly. That is how it is supposed to be. And if folks don't like it, go where it's better.
Can't hardly do that now. You'll pay Fed no matter where you go.
-
Title and premise:
"High Tax Rates Won’t Work in Today’s Economy"
The article misses the point. That point is: it doesn't matter whether the economy can support higher taxes. All that matters is that taxes be higher.
We've reached the point in history where the takers nearly outnumber the makers. Where tax-revenue consumers almost outnumber the tax-revenue generators.
The "constituency" of the occassional-communist doesn't care about low tax rates, because many of them have never PAID taxes. Quite the contrary, the higher tax rates are on the revenue-producers, the MORE money for "benefits" there is for them to use up.
So... the higher the rate of taxaton she wants to impose, the MORE likely they are to support and vote for her.
Kabish...?
-
When you wring out all of the taxes and compliance costs you are currently paying, the cost of that tractor, including taxes, will be the same or less than you would pay for it today. Same for houses, cars, and any other long supply chain item.
Are you really trying to claim prices would be the same, but no income tax would be collected?
You forget all that business buys, that would now have a sales tax attached.
I tell you what, I won't vote for anyone pushing this nonsense.
-
Are you really trying to claim prices would be the same, but no income tax would be collected?
You forget all that business buys, that would now have a sales tax attached.
I tell you what, I won't vote for anyone pushing this nonsense.
Oh, there'll be an income tax. But a small percentage, and only for the highest earners.
At first.
-
Are you really trying to claim prices would be the same, but no income tax would be collected?
You forget all that business buys, that would now have a sales tax attached.
I tell you what, I won't vote for anyone pushing this nonsense.
You must enjoy being a slave! Enjoy!
PS: I didn't forget anything but YOOU are apparently too lazy to read and learn. The Fairtax would be collected at the point of final retail sale only!
-
You don't have to tax some basic items, and we haven't covered our federal budget in a long time.
IMHO, just don't tax what the prebate would cover, and do away with the prebate and eliminate another bureaucracy. No tax on food, primary housing purchase, clothing, energy (heating/cooling/cooking/refrigeration), and medical care. Motor fuels and electricity for cars could still be taxed (as it is now).
-
The cash economy is already there and thriving... to include labor, so what's the difference?
There is a disincentive in place for not reporting income. Income is a cost to the employer. A sale is a benefit. If an employer fails to report income, then he is failing to report a write-off. Not so with sales. Sales are not write-offs, but instead something requiring taxes be paid.
-
There is a disincentive in place for not reporting income. Income is a cost to the employer. A sale is a benefit. If an employer fails to report income, then he is failing to report a write-off. Not so with sales. Sales are not write-offs, but instead something requiring taxes be paid.
Point well taken. One of the big selling points for the legalization of pot in Colorado was the revenues from taxes on the sales. Problem is, off the books sales continue, and by some sources account for 50% or more of actual sales--and that doesn't count 'hard' drugs.
-
IMHO, just don't tax what the prebate would cover, and do away with the prebate and eliminate another bureaucracy. No tax on food, primary housing purchase, clothing, energy (heating/cooling/cooking/refrigeration), and medical care. Motor fuels and electricity for cars could still be taxed (as it is now).
You want the government to determine what your necessities are? I don't! I think I can do that FAR better than they could or would.
-
You want the government to determine what your necessities are? I don't! I think I can do that FAR better than they could or would.
They have to do so to determine what the prebate is anyway. The categories I mentioned are intentionally broad and would be exempt. No tax. And there would be one less government bureaucracy, 'The Ministry of Prebates' would never happen.
Otherwise, someone has to determine how much will be 'prebated', someone has to distribute those prebates, keep track of address changes, etc., handle complaints, track/prosecute fraud, etc.
Just stop that before it starts.
Don't tax the basic necessities: Food (Whatever you eat, no tax), Shelter (just one home to live in--you want ten, pay the tax on the other nine, You want a huge house, fine, no tax---even a really big house is going to be filled with taxable stuff), Medical care, clothing (because they won't let you run around naked, and you'd freeze to death without it here), and the energy to heat/cool your home.
Whether you use more or less of those, is up to you, but it isn't taxed. and no army of gubmint employees to determine how much you get prebated on however much they think you need.
-
The only thing the FairTax is any good for doing is selling books for a horribly flawed scam that will never get passed into law.
-
The only thing the FairTax is any good for doing is selling books for a horribly flawed scam that will never get passed into law.
You're right. Our Income Tax system is so much better, and Constitutional to boot.
-
They have to do so to determine what the prebate is anyway. The categories I mentioned are intentionally broad and would be exempt. No tax. And there would be one less government bureaucracy, 'The Ministry of Prebates' would never happen.
Otherwise, someone has to determine how much will be 'prebated', someone has to distribute those prebates, keep track of address changes, etc., handle complaints, track/prosecute fraud, etc.
Just stop that before it starts.
Don't tax the basic necessities: Food (Whatever you eat, no tax), Shelter (just one home to live in--you want ten, pay the tax on the other nine, You want a huge house, fine, no tax---even a really big house is going to be filled with taxable stuff), Medical care, clothing (because they won't let you run around naked, and you'd freeze to death without it here), and the energy to heat/cool your home.
Whether you use more or less of those, is up to you, but it isn't taxed. and no army of gubmint employees to determine how much you get prebated on however much they think you need.
Sorry @Smokin Joe but you are just plain wrong about that. Please watch the short videos https://fairtax.org/about/how-fairtax-works (https://fairtax.org/about/how-fairtax-works)
Sorry... (http://www.youtube.com/watch?time_continue=92&v=HTOOw7u_lsI#)
-
The only thing the FairTax is any good for doing is selling books for a horribly flawed scam that will never get passed into law.
Really? Why are you so in LOVE with the Marxist Income tax and it's necessary attendat IRS?
-
There is a disincentive in place for not reporting income. Income is a cost to the employer. A sale is a benefit. If an employer fails to report income, then he is failing to report a write-off. Not so with sales. Sales are not write-offs, but instead something requiring taxes be paid.
You are kidding right? VERY large jobs are often paid in lunch buckets of cash every two weeks... In such cases, the entire job is off the books... The single major problem working a cash job, is that the parts for those jobs also must be cash, and are never delivered direct - the reason being that sales are uniquely tracked far more successfully than labor is.
How do you think the cash labor market works, and why? How is it that the hordes of illegal aliens continue to find work? Because labor is the most expensive aspect of most jobs, and cash labor costs literally half of the cost of legit labor, simply by avoiding the taxes and 'withholding', even when paying a good hourly wage.
OF COURSE there is a massive attraction toward using cash labor.
Sales, on the other hand, are tracked from manufacture right to your shelves, entirely beyond your control... Every single piece on the store shelves are individually serialized, and often 'floored' (sorta like leasing) by secondary sources - The only way out of today's sales tracking is called 'shrinkage', which allows for a certain small amount of loss due to damage on the shelf or from theft, and even that is guarded by algorithms... Or a planned burgling of one's own inventory, where a staged break-in can convert that inventory into street level cash, and the flooring gets paid by insurance... There are not many other ways to keep sales off the books...
-
Don't tax the basic necessities: Food (Whatever you eat, no tax), Shelter (just one home to live in--you want ten, pay the tax on the other nine, You want a huge house, fine, no tax---even a really big house is going to be filled with taxable stuff), Medical care, clothing (because they won't let you run around naked, and you'd freeze to death without it here), and the energy to heat/cool your home.
Whether you use more or less of those, is up to you, but it isn't taxed. and no army of gubmint employees to determine how much you get prebated on however much they think you need.
I am inclined the same way - I think one's primary property should not be taxed, and should be able to be moved... IOW, that first property you own, and then sell to buy another, and all the way onward till death, that chain of residence should not be taxed in any way, and should be wholly inheritable likewise.
Reasonable levels of food and clothing also should not be taxed - what it takes to live in moderate quality should be considered as subsistence. That should not extend to 1500 dollar shoes or kobe beef - I don't know where that line is exactly, but you get what I am saying here, no doubt. Roughly, what you can buy from the Safeway or Wally World, or Kmart in the way of clothing and food should just be 'means of living' and withheld from the taxable structure... That, I think would be controlled at the point of retail sale.
Medical should never be taxed - from Bandaids and Bactine on up. To include services of hospitals and doctors.
What it takes for a man and his family to 'be' should be out of the loop.
-
I am inclined the same way - I think one's primary property should not be taxed, and should be able to be moved... IOW, that first property you own, and then sell to buy another, and all the way onward till death, that chain of residence should not be taxed in any way, and should be wholly inheritable likewise.
Reasonable levels of food and clothing also should not be taxed - what it takes to live in moderate quality should be considered as subsistence. That should not extend to 1500 dollar shoes or kobe beef - I don't know where that line is exactly, but you get what I am saying here, no doubt. Roughly, what you can buy from the Safeway or Wally World, or Kmart in the way of clothing and food should just be 'means of living' and withheld from the taxable structure... That, I think would be controlled at the point of retail sale.
Medical should never be taxed - from Bandaids and Bactine on up. To include services of hospitals and doctors.
What it takes for a man and his family to 'be' should be out of the loop.
The instant you put a single exemption in the law you open the door for the K Street bastards to return to Washington @roamer_1 ! IMHO it is MUCH better to let YOU decide what YOUR necessities are!
-
I am inclined the same way - I think one's primary property should not be taxed, and should be able to be moved... IOW, that first property you own, and then sell to buy another, and all the way onward till death, that chain of residence should not be taxed in any way, and should be wholly inheritable likewise.
Reasonable levels of food and clothing also should not be taxed - what it takes to live in moderate quality should be considered as subsistence. That should not extend to 1500 dollar shoes or kobe beef - I don't know where that line is exactly, but you get what I am saying here, no doubt. Roughly, what you can buy from the Safeway or Wally World, or Kmart in the way of clothing and food should just be 'means of living' and withheld from the taxable structure... That, I think would be controlled at the point of retail sale.
Medical should never be taxed - from Bandaids and Bactine on up. To include services of hospitals and doctors.
What it takes for a man and his family to 'be' should be out of the loop.
It is the same fundamental objection I had to Obamacare (and the tax/penalty) for simply being alive.
As to Kobe beef and 1500 dollar shoes, who decides what is 'luxury' and what is 'necessity'? If you sell yachts, you aren't going to show up in cheap walmart sneakers. (The boat gets taxed). In the end, an ostentatious lifestyle will have plenty to tax, without taxing what ultimately becomes poo. Let 'em eat cake, chances are it won't be off a paper plate. (which would be taxed, too).
When we start talking sliding scales, it is only a question of when the scale slides down. that's what happened with the income tax, and then the wealthy and connected wrote in loopholes. So, don't invite any corruption in that sense, just don't tax it. In the big picture, the amount of Kobe beef and pairs of 1500 dollar shoes will be minor, anyway. Most people will be eating hamburger and wearing much cheaper shoes.
-
The instant you put a single exemption in the law you open the door for the K Street bastards to return to Washington @roamer_1 ! IMHO it is MUCH better to let YOU decide what YOUR necessities are!
That's why I like clearly defined exemptions form the tax, regardless of what in those classes would be considered exorbitant. Beluga caviar and chicken eggs would be taxed the same--zero, they are both food. Make exceptions to tax something, and that bar will move.
Lest we forget, originally, the books were balanced (admittedly for a much more Constitutionally constrained government) with tariffs on what amounted to be luxury goods from overseas. So worrying about how money is raised is only half of the equation.
On this we may have our disagreements, but we both want to free the exchange of labor for goods or media of exchange from the notion that it is "income" and taxable. It is a value for value trade. Similarly, the government regards barter exchanges as taxable income, If I give you a dozen eggs for some tomatoes, it isn't income, it's a trade. Otherwise, If I give you ten ones and you give me a ten dollar bill, that'd be "income".
-
It is the same fundamental objection I had to Obamacare (and the tax/penalty) for simply being alive.
As to Kobe beef and 1500 dollar shoes, who decides what is 'luxury' and what is 'necessity'? If you sell yachts, you aren't going to show up in cheap walmart sneakers. (The boat gets taxed). In the end, an ostentatious lifestyle will have plenty to tax, without taxing what ultimately becomes poo. Let 'em eat cake, chances are it won't be off a paper plate. (which would be taxed, too).
When we start talking sliding scales, it is only a question of when the scale slides down. that's what happened with the income tax, and then the wealthy and connected wrote in loopholes. So, don't invite any corruption in that sense, just don't tax it. In the big picture, the amount of Kobe beef and pairs of 1500 dollar shoes will be minor, anyway. Most people will be eating hamburger and wearing much cheaper shoes.
@Smokin Joe
@Bigun
We ain't afar off on all this... And I do not see a sliding scale, I see a bottom somewhere, and only on the things it takes to subsist (to include the homestead).
But I DO see your point, the both of you, that putting a scale on things invites abuse from K street and DC... I get it. A 'no wiggle room', retail only, flat tax may be the only way to bolt em down and nail the coffin shut. I get it.
-
One of the valuable points to a consumption tax would be to NOT tax labor. I don't think the feds should even know how much money I bring in. Why should they know that?
-
One of the valuable points to a consumption tax would be to NOT tax labor. I don't think the feds should even know how much money I bring in. Why should they know that?
I call that F R E E D O M ! ! !
-
One of the valuable points to a consumption tax would be to NOT tax labor. I don't think the feds should even know how much money I bring in. Why should they know that?
That's right... And it would encourage savings - What you make is not taxed until you spend it... SO saving up would be a no-brainer... Putting folks back in the attitude that made us great for so many years, kinda herding folks away from materialism.
But more than anything, it makes the government a literal stakeholder in keeping the economy robust, and that may be the most important benefit. Right now, Uncle gets his rake regardless.
-
"A capitation is more natural to slavery; a duty on merchandise is more natural to liberty, by reason it has not so direct a relation to the person."
--Thomas Jefferson: copied into his Commonplace Book.
-
That's right... And it would encourage savings - What you make is not taxed until you spend it... SO saving up would be a no-brainer... Putting folks back in the attitude that made us great for so many years, kinda herding folks away from materialism.
But more than anything, it makes the government a literal stakeholder in keeping the economy robust, and that may be the most important benefit. Right now, Uncle gets his rake regardless.
:thumbsup:
-
“The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person, so that the tax payer is not put in the power of the tax gatherer.â€
Adam Smith, The Wealth of Nations, 1776
-
“The greatest tool Communism has in our toolbox is the progressive income tax.â€
Karl Marx
-
"What the income tax does is lead the people of this country down a path to where actual control of their resources, which in the end is the control over their will, is handed off to the government.
The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system.
In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation."
ALAN KEYES IS MAKING SENSE Television Show Monday, Jan. 28, 2002
-
"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue.
When applied to this object, the saying is as just as it is witty that, in political arithmetic, two and two do not always make four. If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."
Federalist #21
-
"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed - that is, an extension of the revenue.
When applied to this object, the saying is as just as it is witty that, in political arithmetic, two and two do not always make four. If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them."
Federalist #21
All well and good, because no one then ever thought of a "Carbon Tax".
Food wasn't taxed, nor doctors (such as they were), nor the fuels used to heat a home and cook.
Most of those duties were on imported items that were considered luxuries.
Some consumption is not optional. Tax it enough and people die.
-
You're right. Our Income Tax system is so much better, and Constitutional to boot.
Behind that veil of sarcasm is a false dilemma.
That the current system is preferable to the one being proposed is a testament more to the awfulness of the FairTax than any perceived greatness for the current, likewise flawed and unbalanced system. Trading one bad system for a worse system won't get us anywhere but backward.
-
Behind that veil of sarcasm is a false dilemma.
That the current system is preferable to the one being proposed is a testament more to the awfulness of the FairTax than any perceived greatness for the current, likewise flawed and unbalanced system. Trading one bad system for a worse system won't get us anywhere but backward.
No, but trading our current horrible one for a better one will move us forward.
Why do you think this is such a bad plan?
-
It is the progressive (i.e. regressive) nature of our current income tax that make it so heinous. Eliminate that by reducing the number of brackets down to one - a flat tax. Everyone pays. Everyone. If you earn $5,000, you pay a flat percentage. If you earn $50,000, you pay the same flat percentage. And if you earn $50 million, you still pay the same flat percentage.
Everyone who earns income pays. Everyone becomes vested in our government. Everyone begins to care about upward spending spirals. Everyone becomes concerned with where our tax dollars are going. Everyone begins to hold government accountable.
And for those who don't pay? They don't get to vote. Voting is for taxpayers only.
-
No, but trading our current horrible one for a better one will move us forward.
Why do you think this is such a bad plan?
Because the end results combine the worst of capitalism (the rich get richer and the poor get poorer) with the worst of socialism (guaranteed government income rebates). Because its proponents have no grasp on the consequences of this scheme. Because it will invariably lead to one of two results: a litany of exemptions and loopholes making it no different than an income tax system, or widespread income inequality that would make today's already-strained situation look like an egalitarian paradise. The high-income earners would pay nothing while they profit off their stocks and investments, while the single mother struggling to get by is paying 30% to feed her children. Does that sound like a good idea to you?
I do not consider myself a socialist, but just as I don't think it's the government's job to soak the rich to pay the poor just for its sake, neither do I think they should soak the poor. Equal protection is in our Constitution. Our tax code should reflect that.
The poor spend more, as a percentage of their income. That's not because of irresponsibility; it's because, at a baseline, we all have the same essential needs. A consumption tax alone would thus hurt the already hurting.
I was a fan of Herman Cain's 9-9-9 plan: it was broad-based and diverse in its approach to taxes. Everyone pays in. The FairTax does not; instead, it disproportionately hurts people who can least afford it.
-
Because the end results combine the worst of capitalism (the rich get richer and the poor get poorer)
That is not a tenet of capitalism. There is always mobility across economic lines. It is not uncommon for a person to be in the lowest quintile at one point in their lives and find themselves in the highest or second highest at another point. Likewise, someone in the highest quintile at one point in their life can find him/herself in the lowest or second lowest at a later point.
Consider the struggling college student. A sizeable percentage of the Palo Alto, CA population find themselves in the lowest quintile. Zero income. Deep in debt. Yet within 15-20 years, many of these Stanford graduates find themselves earning top-quintile incomes.
The key to capitalism is that the pie grows. A rising tide lifts all boats, and even those choosing to endure in that bottom quintile can now enjoy smart phones, internet access, wide screen TVs, refrigeration, hot water, microwaves, etc. - all unattainable luxuries to the bottom quintile a century before.
-
A rising tide only lifts the boats that are afloat. The rest just go under water or get in deeper.
-
Because the end results combine the worst of capitalism (the rich get richer and the poor get poorer) with the worst of socialism (guaranteed government income rebates). Because its proponents have no grasp on the consequences of this scheme. Because it will invariably lead to one of two results: a litany of exemptions and loopholes making it no different than an income tax system, or widespread income inequality that would make today's already-strained situation look like an egalitarian paradise. The high-income earners would pay nothing while they profit off their stocks and investments, while the single mother struggling to get by is paying 30% to feed her children. Does that sound like a good idea to you?
I do not consider myself a socialist, but just as I don't think it's the government's job to soak the rich to pay the poor just for its sake, neither do I think they should soak the poor. Equal protection is in our Constitution. Our tax code should reflect that.
The poor spend more, as a percentage of their income. That's not because of irresponsibility; it's because, at a baseline, we all have the same essential needs. A consumption tax alone would thus hurt the already hurting.
I was a fan of Herman Cain's 9-9-9 plan: it was broad-based and diverse in its approach to taxes. Everyone pays in. The FairTax does not; instead, it disproportionately hurts people who can least afford it.
I had to go visit with the neurosurgeon who performed my surgery today so I'm late getting to this @jmyrlefuller but would you mind explaining to me just how allowing you to keep your entire paycheck (zero federal deductions period) favors the rich over the poor?
Then perhaps you can tell me how being able to earn all you want to earn, from any source you want, without having to think about taxes, even for a second, favors the rich over the poor.
Then maybe you can explain how the federal government not knowing how much, or from what sources, you derive your income favors the rich over the poor. And then you can tell me how protecting you from paying ANY taxes what so ever up to whatever the DHS says the poverty level is favors the rich over the poor.
After you get done with that, you might tell me how wringing out ALL of the taxes and compliance costs currently hidden in the prices of every thin produced in this country favors the rich over the poor.
I have MANY more such question should you be willing to answer them.
And BTW: Herman Cain is a HUGE proponent of the Fairtax!
-
All well and good, because no one then ever thought of a "Carbon Tax".
Food wasn't taxed, nor doctors (such as they were), nor the fuels used to heat a home and cook.
Most of those duties were on imported items that were considered luxuries.
Some consumption is not optional. Tax it enough and people die.
I'm sorry @Smokin Joe but that is incorrect as well! I do believe we revolted over a tax on Tea which is considered a food where I come from.
As to Some consumption not being optimal, that is precisely why the Fairtax would put consumers back in the driver's seat and is EXACTLY what was being discussed in the excerpt from Federalist 21 I posted!
I just wish the same understand of such things that the founders possessed were around today! If it were, The Marxist income tax would have been history already and I could move on to something else!
And BTW: Obamacare would have been and impossible dream had the Fairtax been in place at the time!
-
I'm sorry @Smokin Joe but that is incorrect as well! I do believe we revolted over a tax on Tea which is considered a food where I come from.
As to Some consumption not being optimal, that is precisely why the Fairtax would put consumers back in the driver's seat and is EXACTLY what was being discussed in the excerpt from Federalist 21 I posted!
I just wish the same understand of such things that the founders possessed were around today! If it were, The Marxist income tax would have been history already and I could move on to something else!
And BTW: Obamacare would have been and impossible dream had the Fairtax been in place at the time!
With all due respect, heat is not f***ing optional in North Dakota. YOU MUST have it or die. Yet some dweeb in DC might decide (in the face of the enviro jihad) that people in ND didn't need any more natural gas or electricity than someone in Key West. What you need depends on where you live, and one size fits all policy only means some benefit and others still get screwed.
Just don't tax it. and the problem goes away. :shrug:
The colonists rebelled over about 3% total taxes. America missed that boat long ago.
-
With all due respect, heat is not f***ing optional in North Dakota. YOU MUST have it or die. Yet some dweeb in DC might decide (in the face of the enviro jihad) that people in ND didn't need any more natural gas or electricity than someone in Key West. What you need depends on where you live, and one size fits all policy only means some benefit and others still get screwed.
Just don't tax it. and the problem goes away. :shrug:
The colonists rebelled over about 3% total taxes. America missed that boat long ago.
Of course heat is not optional and the fuel to produce it would be one hell of a lot easier to obtain if it were free of all the taxes and compliance costs the producers and distributors are compelled by basic economics to include in it's price under the current system! In other words, it's already being HIGHLY taxed but in a manner that is hidden from consumers! Get it out into the sunshine and see what rate they will stand for!
-
I'm sorry @Smokin Joe but that is incorrect as well! I do believe we revolted over a tax on Tea which is considered a food where I come from.
As to Some consumption not being optimal, that is precisely why the Fairtax would put consumers back in the driver's seat and is EXACTLY what was being discussed in the excerpt from Federalist 21 I posted!
I just wish the same understand of such things that the founders possessed were around today! If it were, The Marxist income tax would have been history already and I could move on to something else!
And BTW: Obamacare would have been and impossible dream had the Fairtax been in place at the time!
Tax on tea was one of many things the colonists were unhappy about.
The revolt started when the crown tried to take the guns.
-
Tax on tea was one of many things the colonists were unhappy about.
The revolt started when the crown tried to take the guns.
This is true! That was the last straw and, IMHO will be again soon.
-
I'm sorry @Smokin Joe but that is incorrect as well! I do believe we revolted over a tax on Tea which is considered a food where I come from.
As to Some consumption not being optimal, that is precisely why the Fairtax would put consumers back in the driver's seat and is EXACTLY what was being discussed in the excerpt from Federalist 21 I posted!
I just wish the same understand of such things that the founders possessed were around today! If it were, The Marxist income tax would have been history already and I could move on to something else!
And BTW: Obamacare would have been and impossible dream had the Fairtax been in place at the time!
THe Marxist Income tax would never have happened, nor most of the programs it supports.
However, Tea (imported) was subject to duties as an import. People drank all sorts of things, and still do, and call them tea. However, the stimulant beverage was a mainstay (and still is) among the English, among other peoples worldwide. Americans, in response to that tax (and out of rebellion) became coffee drinkers (my drug of choice). Other items taxed included paper, and virtually anything imported--which became a bone of contention over tariffs 80 years later to the point that helped ignite another war. However, the Congress had the Constitutional authority to levy tariffs.
Study the history of our marxist income tax, and you will find that initially, it was a tax on profit from investments, not common labor. It was the jump in reasoning which led to the exchange of time and skill for something more readily traded for other things or those things themselves being defined as "income". If I trade you a five dollar bill for five ones, is that taxable (generally, no, because we have only exchanged items of equal value. If you trade me a weaner pig for doing a valve job on your pickup, is that income? According to the Government, it is! Even though we mutually set the value of those things as equal and made an exchange. Ther's the rub--wages were not 'income'--yet today, in order to inadequately finance growing socialist programs and control the masses, such exchanges ("barter") are considered "income".
Tea, while nice, was not a necessity, despite being a drink heavily entrenched in English tradition. And the total tax levied was small--far smaller than most states' sales taxes today (if the state has a sales tax).
I;m not against the consumption tax model, but I do have issues with "prebates" because that is a decision to refund the taxes on something that may well be a necessity, something not all NEED in equal measure, and something people cannot live without (like heat in North Dakota in Winter). "Prebating" a portion of the taxes levied on heat is to decide that the surplus taxed is somehow not a necessity, when in fact it is, based on some formula that some bureaucrat concots. That is the government deciding how much you need, arbitrarily, and only refunding the tax on that fraction they consider essential.
That requires studies, bureaucracy, just to set the prebates which should vary from year to year depending on temperature. which would require more study, and if the people doing the studies are using AGW doctrine to predict the future, the gap between real needs and refunded taxes will increase, while those in more tropical latitudes are allotted more prebate for cooling. Heat kills, sure, but cold will get you quicker. I knew a couple of people who froze to death, one right in town.
Now, there is a way around all that. To reduce the allotment bureaucracy to a mere sliver of itself, and that is to not tax the broadly defined categories of food, clothing, shelter (one domicile), medical care, and energy, things which universally are understood as necessities, whether energy be defined locally as electricity from nuclear power or a dung fire.
That permits the person in Minnesota with Reynaud's Syndrome to heat their house adequately, the person in Corpus Christi to run the AC, without fear of going over their limit and having to pay taxes on it. People can eat what and as much as they see fit. They can see the doctor and not have to pay 30% tax on their chemo drugs or Cardiac Cath. They can live in as nice a house as they can afford, (not 30% less), and buy or sell that primary house without fear of losing 30% every time. They can wear clothing adequate to their climate, whether that be for subzero weather or a sunny day at the beach, again without being penalized for the needs imposed locally. ANd there is a bonus.
Any time the government issues payments, there are things to keep track of. Who died, who moved,who never existed. There will be those who are intent of defrauding that payment system, those who won't get their payment because someone typed in the wrong number or address. That takes an army of people to sort out, facilities and equipment to do so.
You an vastly reduce those needs by not collecting that tax on things which fall into the categories above. In fact, what you would need is only a smaller group to decide what does and doesn't fit under those headings and levy the taxes accordingly.
People would keep more of what they make, would not be taxed on the basics needed to live and stay alive, and the other items, the durable goods, the televisions, the appliances, automobiles, the hangers in the walk-in closet (or the ikea dresser) would be taxed. If someone wanted to scrounge pallet lumber and make furniture rather than have a house full of valuable antiques, that would be up to them.
My biggest problems with consumption taxes are that:
1 Some people will need more than others, simply to live. If the necessities aren't taxed,then the tax is more fair, and more of a tax on egregious and optional consumption instead of a tax on living (my biggest objection to the ACA, too).
2 Prebates will mean the government has to assign a level of sustenance expenditures to refund the tax on. In essence, this is the government telling us what we need to live, without any regard for the needs of the individual--an arbitrary and possibly capricious number. With the government's track record for getting things right, someone is going to get seriously screwed, and others will benefit. The government will pick winners and losers based on nutritional requirements, location (weather), and body size, as well as caloric output during the average day. (Workouts are optional, work is not. A large man who does heavy manual labor will need as much as three times the caloric input as someone who weighs 100 lbs soaking wet and has an office job. Yet the large guy who sweats for his money will pay three times the tax, just to fuel his efforts. Food, clothing, shelter (primary residence), medicine, energy, all vary wildly depending on the needs of the individual. They aren't, at some point, optional. Don't tax them.
3 Prebates also mean the government will have to have an administrative bureaucracy with armies of employees to administer, monitor for fraud, change addresses, keep the systems running, issue the payments, etc. Doing away with the prebate does away with that need. Only the enforcement division need remain, and those who count the money coming in.
So, I'm not against the consumption tax, written carefully, but I am against the prebate scheme.
Having everyone on a hunt for their government check is not the answer to being more free.
-
THe Marxist Income tax would never have happened, nor most of the programs it supports.
However, Tea (imported) was subject to duties as an import. People drank all sorts of things, and still do, and call them tea. However, the stimulant beverage was a mainstay (and still is) among the English, among other peoples worldwide. Americans, in response to that tax (and out of rebellion) became coffee drinkers (my drug of choice). Other items taxed included paper, and virtually anything imported--which became a bone of contention over tariffs 80 years later to the point that helped ignite another war. However, the Congress had the Constitutional authority to levy tariffs.
Study the history of our marxist income tax, and you will find that initially, it was a tax on profit from investments, not common labor. It was the jump in reasoning which led to the exchange of time and skill for something more readily traded for other things or those things themselves being defined as "income". If I trade you a five dollar bill for five ones, is that taxable (generally, no, because we have only exchanged items of equal value. If you trade me a weaner pig for doing a valve job on your pickup, is that income? According to the Government, it is! Even though we mutually set the value of those things as equal and made an exchange. Ther's the rub--wages were not 'income'--yet today, in order to inadequately finance growing socialist programs and control the masses, such exchanges ("barter") are considered "income".
Tea, while nice, was not a necessity, despite being a drink heavily entrenched in English tradition. And the total tax levied was small--far smaller than most states' sales taxes today (if the state has a sales tax).
I;m not against the consumption tax model, but I do have issues with "prebates" because that is a decision to refund the taxes on something that may well be a necessity, something not all NEED in equal measure, and something people cannot live without (like heat in North Dakota in Winter). "Prebating" a portion of the taxes levied on heat is to decide that the surplus taxed is somehow not a necessity, when in fact it is, based on some formula that some bureaucrat concots. That is the government deciding how much you need, arbitrarily, and only refunding the tax on that fraction they consider essential.
That requires studies, bureaucracy, just to set the prebates which should vary from year to year depending on temperature. which would require more study, and if the people doing the studies are using AGW doctrine to predict the future, the gap between real needs and refunded taxes will increase, while those in more tropical latitudes are allotted more prebate for cooling. Heat kills, sure, but cold will get you quicker. I knew a couple of people who froze to death, one right in town.
Now, there is a way around all that. To reduce the allotment bureaucracy to a mere sliver of itself, and that is to not tax the broadly defined categories of food, clothing, shelter (one domicile), medical care, and energy, things which universally are understood as necessities, whether energy be defined locally as electricity from nuclear power or a dung fire.
That permits the person in Minnesota with Reynaud's Syndrome to heat their house adequately, the person in Corpus Christi to run the AC, without fear of going over their limit and having to pay taxes on it. People can eat what and as much as they see fit. They can see the doctor and not have to pay 30% tax on their chemo drugs or Cardiac Cath. They can live in as nice a house as they can afford, (not 30% less), and buy or sell that primary house without fear of losing 30% every time. They can wear clothing adequate to their climate, whether that be for subzero weather or a sunny day at the beach, again without being penalized for the needs imposed locally. ANd there is a bonus.
Any time the government issues payments, there are things to keep track of. Who died, who moved,who never existed. There will be those who are intent of defrauding that payment system, those who won't get their payment because someone typed in the wrong number or address. That takes an army of people to sort out, facilities and equipment to do so.
You an vastly reduce those needs by not collecting that tax on things which fall into the categories above. In fact, what you would need is only a smaller group to decide what does and doesn't fit under those headings and levy the taxes accordingly.
People would keep more of what they make, would not be taxed on the basics needed to live and stay alive, and the other items, the durable goods, the televisions, the appliances, automobiles, the hangers in the walk-in closet (or the ikea dresser) would be taxed. If someone wanted to scrounge pallet lumber and make furniture rather than have a house full of valuable antiques, that would be up to them.
My biggest problems with consumption taxes are that:
1 Some people will need more than others, simply to live. If the necessities aren't taxed,then the tax is more fair, and more of a tax on egregious and optional consumption instead of a tax on living (my biggest objection to the ACA, too).
2 Prebates will mean the government has to assign a level of sustenance expenditures to refund the tax on. In essence, this is the government telling us what we need to live, without any regard for the needs of the individual--an arbitrary and possibly capricious number. With the government's track record for getting things right, someone is going to get seriously screwed, and others will benefit. The government will pick winners and losers based on nutritional requirements, location (weather), and body size, as well as caloric output during the average day. (Workouts are optional, work is not. A large man who does heavy manual labor will need as much as three times the caloric input as someone who weighs 100 lbs soaking wet and has an office job. Yet the large guy who sweats for his money will pay three times the tax, just to fuel his efforts. Food, clothing, shelter (primary residence), medicine, energy, all vary wildly depending on the needs of the individual. They aren't, at some point, optional. Don't tax them.
3 Prebates also mean the government will have to have an administrative bureaucracy with armies of employees to administer, monitor for fraud, change addresses, keep the systems running, issue the payments, etc. Doing away with the prebate does away with that need. Only the enforcement division need remain, and those who count the money coming in.
So, I'm not against the consumption tax, written carefully, but I am against the prebate scheme.
Having everyone on a hunt for their government check is not the answer to being more free.
Mostly wroong across the board but I'll take it up tomorrow.
-
I had to go visit with the neurosurgeon who performed my surgery today so I'm late getting to this @jmyrlefuller but would you mind explaining to me just how allowing you to keep your entire paycheck (zero federal deductions period) favors the rich over the poor?
Because 40 percent of Americans pay no income tax at all. And how are you going to pay Socialist Security if you're eliminating FICA? Payouts are based on what they put in. So, if we stop tracking what goes in, how do we know what to give out? We don't.
Then perhaps you can tell me how being able to earn all you want to earn, from any source you want, without having to think about taxes, even for a second, favors the rich over the poor.
That's not an argument, that's a sales pitch.
The poor do not have enough money to make substantial income from investment. At a generous 7% APR, one would need to have a seed of $300,000 invested to have even a meager $21,000 a year from investment, a level of savings it would take the typical working-class person in this country decades to achieve. Yet someone who is already wealthy can make that kind of money doing nothing.
Someone without those kinds of resources has to rely on unskilled labor (easy to find but is woefully inefficient), skilled labor (not always accessible) or luck (e.g. winning the lottery). And when you have less income to work with... then we get back to my original point.
Then maybe you can explain how the federal government not knowing how much, or from what sources, you derive your income favors the rich over the poor. And then you can tell me how protecting you from paying ANY taxes what so ever up to whatever the DHS says the poverty level is favors the rich over the poor.
That is not even remotely feasible. To do that, you'd have to 1) centralize a person's entire spending system into one, centralized government-monitored account (bye bye cash), then 2) track each account's every expenditure, PLUS 3) monitor whether each person is married, cohabiting, having children the same way the welfare system does now, because poverty is defined differently in each case.
Of course the FairTax doesn't propose anything of the sort. They propose universal basic income. They call it a prebate, but it's the same thing. You want to tax everything, then let the government hand you a free paycheck to compensate for the taxes they want to take from you.
After you get done with that, you might tell me how wringing out ALL of the taxes and compliance costs currently hidden in the prices of every thin produced in this country favors the rich over the poor.
Again, corporate taxes and personal income taxes are two totally different sections of the tax code. What they pay is already nowhere near what an individual making the same amount of money pays. The rates are lower and the deductions are a lot higher.
I have MANY more such question should you be willing to answer them.
Don't waste your time.
And BTW: Herman Cain is a HUGE proponent of the Fairtax!
Which even he knew was not workable in the short term, hence why he promoted 9-9-9 instead. The only reason he claims to be is because he got his job from Neal Boortz, the primary charlatan behind this scheme, and got commissions from every book sold.
-
Mostly wroong across the board but I'll take it up tomorrow.
Good. you'll have plenty of time to come up with something more believable than just saying "Wroong."
Make your case, support it in your own words, right here.
-
Good. you'll have plenty of time to come up with something more believable than just saying "Wroong."
Make your case, support it in your own words, right here.
If I'm still breathing you can count on me doing EXACTLY that!
-
If I'm still breathing you can count on me doing EXACTLY that!
Good. I'm looking forward to you being able to disabuse me of what I have said, with rational and reasonable argument, and not jingoism. We agree on many things, but in no wise does the prebate make sense to me, except as a sales gimmick to have stupid and greedy people looking forward to a check in the proverbial mailbox. They do that already, once a year, getting back a fraction of the money they let the government have for a year for free (a no interest loan), and act like the Government 'gave' them money when it just gave them their own money back. :shrug:
I'm also waiting for you to tell me how this will function without a whole 'nother bureaucracy. (Another government agency). How that will be more efficient than any other government agency in history.
And how the amount of prebate will be set, considering most Americans live well south of this latitude, in a way that will be fair to those who cannot live without heating their homes.
How that prebate will be figured,and how that isn't government telling us what we need and don't. (like the ACA).
See ya tomorrow. :seeya:
-
THe Marxist Income tax would never have happened, nor most of the programs it supports.
My biggest problems with consumption taxes are that:
1 Some people will need more than others, simply to live. If the necessities aren't taxed,then the tax is more fair, and more of a tax on egregious and optional consumption instead of a tax on living (my biggest objection to the ACA, too).
Are your necessities the same as mine @Smokin Joe? Do you REALLY want some government beauracrat deciding what a "necessity" is and getting rich in the process due to K Street bastards being MORE than willing to compensate him handsomely in order to get THEIR pet good or service deemed a "necessity" just as they currently do defining the word "income" in the tax code! The ACA could NEVER have happened with the Fairtax in place as the law of the land!
2 Prebates will mean the government has to assign a level of sustenance expenditures to refund the tax on. In essence, this is the government telling us what we need to live, without any regard for the needs of the individual--an arbitrary and possibly capricious number. With the government's track record for getting things right, someone is going to get seriously screwed, and others will benefit. The government will pick winners and losers based on nutritional requirements, location (weather), and body size, as well as caloric output during the average day. (Workouts are optional, work is not. A large man who does heavy manual labor will need as much as three times the caloric input as someone who weighs 100 lbs soaking wet and has an office job. Yet the large guy who sweats for his money will pay three times the tax, just to fuel his efforts. Food, clothing, shelter (primary residence), medicine, energy, all vary wildly depending on the needs of the individual. They aren't, at some point, optional. Don't tax them.
I follow what you are saying and don't particularly like the prebate feature either. I would be just as happy without it in the bill and tried to get it outl but was told no dice! The prebate is what makes the fairtax "progressive" and it hs zero chance of seeing the light of day in today's Washington without it. Doesn't matter now either way with the Democrats running the House.
Let's look at some things here and use Jim, Joe, Jack, and Juan as models. The Health and Human Services department says that earnings up to $20K is poverty level.
Jim is a clerk at the local Grocery store and earns $20K. Joe is an engineer making $200K. Jack dropped out of school in the 8th grade and has no visible means of support and "survives" by selling drugs to your kids down by the Jr. HS. Juan is in the country illegally and works at whatever he can find that will pay him in cash under the table.
Under the current system:
Jim pays $0.00 income tax but gets hit on every dollar of his $20K for with FICA and Medicare deductions amounting to 7.65% off the top of his $20K before he sees a dime leaving him with $18,470 from which he must purchase everything he needs to get by. In truth, he really pays his employers 7.65% share as well because his employer is compelled to consider that a part of his wage and benefit package.
Joe is in the 28% income tax bracket and has the same 7.65% deducted from his pay before he sees a single dime to do his personal business leaving him with 128,700 after his Uncle Sam gets done with him.
Jack took in $300K, paid not one dime of tax, and get's every form of public assistance payment known to man!
Juan also pays nothing and gets all manner of public support payments.
Under the Fairtax without the prebate feature:
Jim, Joe, Jack and Juan all pay the same 17% (What the Sales tax rate would be without the prebate feature) on every purchase they make.
Jim spends his entire $20K just making ends meet and pays $3400 in taxes to his Uncle for the privilege of living in the good ole USA! Joe is a frugal man and manages to spend the same $20K on his necessities of life leaving him $180K to invest, or just save for a rainy day.
Jack and Juan are crying like babies because, for the first time ever, the tax man hits them HARD like he does everyone else including Mr. Billionaire who lives large and paid next to nothing under the income tax because most of his revenue did not meet the definition of "Income" under that code.
Under the Fairtax WITH the prebate feature:
Jim and Joe pay $0.00 in taxes while Jack and Juan get hit with the full $.23 of every dollar they spend going to uncle sugar! If Joe decided to live twice as well and spent $40K he would wind up having paid his uncle 11.5 cents of every dollar to his uncle.
Jack pays on every dollar he spends after the first 20K and Juan gets hit for the full $.23 on every single dollar he spends because he is not eligible for the prebate.
3 Prebates also mean the government will have to have an administrative bureaucracy with armies of employees to administer, monitor for fraud, change addresses, keep the systems running, issue the payments, etc. Doing away with the prebate does away with that need. Only the enforcement division need remain, and those who count the money coming in.
They already do! It's call the Social Security Administration and that's who would handle it under the fairtax.
So, I'm not against the consumption tax, written carefully, but I am against the prebate scheme.
Having everyone on a hunt for their government check is not the answer to being more free.
As I said earlier, I don't much care for it either but the SAD fact is it HAS to be there to make it remotely palatable to the income redistribution artists in Washington these days! God forbid we all just paid the same flat rate without the gooberment knowing a single thing about how much or from what source(s) we derive our income!
-
The prebate alone is reason not to accept this system.
The government knowingly overtaxes and then decides how much to give back. And then it will be to who...
-
I would argue that high tax rates do work in today's economy since the effect of taxes is to inhibit growth. Subsidize something, you get more of it. Tax something, you get less of it. And it still holds true that high tax rates are spectacularly successful at destroying economic growth.
-
The prebate alone is reason not to accept this system.
The government knowingly overtaxes and then decides how much to give back. And then it will be to who...
So, don't just reject it out of hand; propose something else, and/or identify parts that need to be changed. To simply reject it has the effect of supporting the current system.
-
So, don't just reject it out of hand; propose something else, and/or identify parts that need to be changed. To simply reject it has the effect of supporting the current system.
I did!
-
I did!
I wasn't talking to you. :tongue2:
-
Quote from: Bigun on January 16, 2019, 08:17:34 PM
I had to go visit with the neurosurgeon who performed my surgery today so I'm late getting to this @jmyrlefuller but would you mind explaining to me just how allowing you to keep your entire paycheck (zero federal deductions period) favors the rich over the poor?
@jmyrlefuller responds:
Because 40 percent of Americans pay no income tax at all. And how are you going to pay Socialist Security if you're eliminating FICA? Payouts are based on what they put in. So, if we stop tracking what goes in, how do we know what to give out? We don't.
Bigun responds:
40% don't pay any INCOME tax but, if they have a job, they pay 7.65% on the very first dollar they earn, and every single dollar they earn afterward! (In reality, they pay the full 15.3%)
Employers would report your WAGES the Social Security Administration to allow for benefit determinations.
Quote from: Bigun on January 16, 2019, 08:17:34 PM
Then perhaps you can tell me how being able to earn all you want to earn, from any source you want, without having to think about taxes, even for a second, favors the rich over the poor.
jmyrlefuller responds:
That's not an argument, that's a sales pitch.
The poor do not have enough money to make substantial income from investment. At a generous 7% APR, one would need to have a seed of $300,000 invested to have even a meager $21,000 a year from investment, a level of savings it would take the typical working-class person in this country decades to achieve. Yet someone who is already wealthy can make that kind of money doing nothing.
Someone without those kinds of resources has to rely on unskilled labor (easy to find but is woefully inefficient), skilled labor (not always accessible) or luck (e.g. winning the lottery). And when you have less income to work with... then we get back to my original point.
Of course the FairTax doesn't propose anything of the sort. They propose universal basic income. They call it a prebate, but it's the same thing. You want to tax everything, then let the government hand you a free paycheck to compensate for the taxes they want to take from you.
[/color]
Bigun responds:
No, it's not! It an absolutely TRUE statement of FACT! WHY on earth do you think you should be limited in your earnings?
You are right to say that the rich can take in tons to money under the current system while paying little to no INCOME tax! They pay their K Street people handsomely to ensure that remains so. They would, however, pay through the nose for their extravagant lifestyles with the sales tax in place!
The prebate is just what it says it is! A rebate of taxes paid up up front!
Quote from: Bigun on January 16, 2019, 08:17:34 PM
Then maybe you can explain how the federal government not knowing how much, or from what sources, you derive your income favors the rich over the poor. And then you can tell me how protecting you from paying ANY taxes what so ever up to whatever the DHS says the poverty level is favors the rich over the poor.
jmyrlefuller responds:
That is not even remotely feasible. To do that, you'd have to 1) centralize a person's entire spending system into one, centralized government-monitored account (bye bye cash), then 2) track each account's every expenditure, PLUS 3) monitor whether each person is married, cohabiting, having children the same way the welfare system does now, because poverty is defined differently in each case.
Bigun Responds:
Absolute BS! Under the Fairtax, the States would do the tax collecting and be compensated for doing so as would every single merchant. 45 of them already have those mechanisms in place and those that don't can easily implement them! In addation, those states that currently have sales taxes could conform their states base to the Fairtax base and lower the state rate substantially while taking in the same revenue. Under the fairtax the State wouldn't have to know even so much as your name! Receiving the prebate is NOT mandatory!
Quote from: Bigun on January 16, 2019, 08:17:34 PM
After you get done with that, you might tell me how wringing out ALL of the taxes and compliance costs currently hidden in the prices of every thin produced in this country favors the rich over the poor.
jmyrlefuller responds:
Again, corporate taxes and personal income taxes are two totally different sections of the tax code. What they pay is already nowhere near what an individual making the same amount of money pays. The rates are lower and the deductions are a lot higher.
Bigun responds:
Yes! The corporate Income tax is indeed a separate section of the tax code but beyond that, you simply have NO idea as to what you are talking about!
The Corporate income tax is a functionally a VAT and every person in this country pays it along with all of the costs of compliance whether or not they understand that they are doing so! It is a MAJOR reason why most of the jobs that were once here no longer are. And every one of those jobs would come back virtually overnight IF we created an environment where anyone could open or expand a business without having to give even one second's worth of consideration to the tax implications of doing so!
Quote from: Bigun on January 16, 2019, 08:17:34 PM
I have MANY more such question should you be willing to answer them.
jmyrlefuller responds:
Don't waste your time.
Bigun responds:
OK! Your wish is my command! You can reamin as ignorant as you want for as long as you want!
Quote from: Bigun on January 16, 2019, 08:17:34 PM
And BTW: Herman Cain is a HUGE proponent of the Fairtax!
jmyrlefuller responds:
Which even he knew was not workable in the short term, hence why he promoted 9-9-9 instead. The only reason he claims to be is because he got his job from Neal Boortz, the primary charlatan behind this scheme, and got commissions from every book sold.
MORE bovine fecal matter! 9-9-9 was supposed to be the short term bridge to the fairtax! It just so happens that I am acquainted with the economist who wrote it if you would like to hear it from him instead of me I can probably arrange that!
-
I would argue that high tax rates do work in today's economy since the effect of taxes is to inhibit growth. Subsidize something, you get more of it. Tax something, you get less of it. And it still holds true that high tax rates are spectacularly successful at destroying economic growth.
@Hoodat
Indeed! And that is especially true of taxes that are hidden in prices and put every single good or service produced in that economy at a competitive disadvantage in the marketplace.
-
The poor do not have enough money to make substantial income from investment. At a generous 7% APR, one would need to have a seed of $300,000 invested to have even a meager $21,000 a year from investment, a level of savings it would take the typical working-class person in this country decades to achieve.
Putting away $21/wk every week from age 20 to age 65 would yield just over $300,000 at age 65, which would yield a retirement income 39% higher than minimum wage. This is pretty stout considering that a minimum wage worker working full time already gives up $37 in Social Security taxes. If that $37 was invested instead at the above rate, that minimum wage worker would have over half a million dollars when they turn 65, yielding a retirement income of $37K - 2½ times greater than their minimum wage income.
-
@jmyrlefuller
One more little thing before I go.
EVERYONE I know does their taxes, Takes a look at the bottom line, and says something like this "I made 100K last year and the Government took $23K of it (23%)! That is the tax expressed as a tax inclusive rate.
I don't know anyone who says " I made $100K last year, the gooberment took $23K of it leaving me with only $77K. WOW! $23K is 30% of $77K(the tax exclusive rate) but if you want to be the only guy in America that does that be my guest! The gooberment still got $23K either way.
-
So, don't just reject it out of hand; propose something else, and/or identify parts that need to be changed. To simply reject it has the effect of supporting the current system.
If the option is a consumption tax with a prebate, then I support the current system.
-
Putting away $21/wk every week from age 20 to age 65 would yield just over $300,000 at age 65, which would yield a retirement income 39% higher than minimum wage. This is pretty stout considering that a minimum wage worker working full time already gives up $37 in Social Security taxes. If that $37 was invested instead at the above rate, that minimum wage worker would have over half a million dollars when they turn 65, yielding a retirement income of $37K - 2½ times greater than their minimum wage income.
Absolutely right! 100% 888high58888
-
If the option is a consumption tax with a prebate, then I support the current system.
That fine! You are perfectly entitled to do that but I'll tell you this, you will never again be a TRULY free man for so long as the Marxist income tax and the IRS remain in existence.
-
I don't know anyone who says " I made $100K last year, the gooberment took $23K of it leaving me with only $77K. WOW!
I have actually had liberals tell me that all of your income belongs to the government and out of their paternal generosity, they let you have some of it. They justify this by saying that you wouldn't have the ability to earn anything without the government. Dead serious.
-
I have actually had liberals tell me that all of your income belongs to the government and out of their paternal generosity, they let you have some of it. They justify this by saying that you wouldn't have the ability to earn anything without the government. Dead serious.
@Hoodat
Unfortunately, under the Marxist income tax system that would be a true statement. There is nothing in the law that limits how much they can take if they want to.
-
That fine! You are perfectly entitled to do that but I'll tell you this, you will never again be a TRULY free man for so long as the Marxist income tax and the IRS remain in existence.
Yes, nothing says "free" like paying 30% tax on food and basic necessities for your entire life. And waiting for your government check to coming in...
-
That fine! You are perfectly entitled to do that but I'll tell you this, you will never again be a TRULY free man for so long as the Marxist income tax and the IRS remain in existence.
You are exactly correct @Bigun This morning I heard Stephen Moore (co-author “Trumponomics: Inside the America First Plan to Revive Our Economy," with Art Laffer and Larry Kudlow) say to Mark Simone that the income tax was the worst mistake lawmakers ever made.
No doubt the legislation changed society for the worse.
-
That fine! You are perfectly entitled to do that but I'll tell you this, you will never again be a TRULY free man for so long as the Marxist income tax and the IRS remain in existence.
And you won't be free without those things, either. The oppressors will just be of a different sort.
-
And you won't be free without those things, either. The oppressors will just be of a different sort.
So, what's the solution, @jmyrlefuller?
-
And you won't be free without those things, either. The oppressors will just be of a different sort.
I suppose you are right @jmyrlefuller. We should just spit on the graves of our ancestors and submit! Maybe so, but you'll NEVER find me in that crowd!
-
All in all, the most interesting part of this discussion has been that it is over funding a Government grown far beyond those limited Constitutional duties and powers it was to have.
Certainly, returning to that limited Federal Government, to the confines of its originally intended powers, would drastically reduce the need for funding, and that could be collected from the tariffs and duties which that government may levy without the 16th Amendment. There can be no meaningful and appropriate modification of the tax structure without eliminating that Amendment, and once more freeing the fruits of the labors of the individual from the clutches of the Government.
Otherwise, all we're arguing about is the color of our chains.
-
@Smokin Joe
Here's a link to section 401 of HR25, commonly known as the fairtax act. It address the subject of your most recent post.
https://www.congress.gov/bill/116th-congress/house-bill/25/text#toc-H4FD7CC96F903402B83325A9C9A86D7B3 (https://www.congress.gov/bill/116th-congress/house-bill/25/text#toc-H4FD7CC96F903402B83325A9C9A86D7B3)
And the entire bill is here: https://www.congress.gov/bill/116th-congress/house-bill/25/text (https://www.congress.gov/bill/116th-congress/house-bill/25/text)
Enjoy
-
@Smokin Joe
Here's a link to section 401 of HR25, commonly known as the fairtax act. It address the subject of your most recent post.
https://www.congress.gov/bill/116th-congress/house-bill/25/text#toc-H4FD7CC96F903402B83325A9C9A86D7B3 (https://www.congress.gov/bill/116th-congress/house-bill/25/text#toc-H4FD7CC96F903402B83325A9C9A86D7B3)
And the entire bill is here: https://www.congress.gov/bill/116th-congress/house-bill/25/text (https://www.congress.gov/bill/116th-congress/house-bill/25/text)
Enjoy
With all due respect, the prebate is a deal killer for me.
-
With all due respect, the prebate is a deal killer for me.
That truly saddens me but doesn't lesson my respect for you at all @Smokin Joe. I am convinced that this, warts and all, is the key to unravelling the federal leviathan.
-
That truly saddens me but doesn't lesson my respect for you at all @Smokin Joe. I am convinced that this, warts and all, is the key to unravelling the federal leviathan.
Repeal the 16th Amendment.
Repeal the 17th Amendment.
That right there will get you a lot closer to unravelling it.
-
Repeal the 16th Amendment.
Repeal the 17th Amendment.
That right there will get you a lot closer to unravelling it.
I never really cared much about the 17th until I thought about it in the context of the 16th.
Now I think it's critical that we gut them together.
-
I never really cared much about the 17th until I thought about it in the context of the 16th.
Now I think it's critical that we gut them together.
If we repeal the 17th, we also have to ratify the Dirksen Amendment allowing for representation of a state legislature by a measure of other than population alone; i.e. counties.
-
I am definitely on board for killing the 17th. But there is no way two-thirds of the Senate will go along.
-
I am definitely on board for killing the 17th. But there is no way two-thirds of the Senate will go along.
They would most certainly do what is best for their cushy careers and not what is best for the future of America. Gutless politicians. But I repeat myself.