Quote :

"Creating a bundle of exempt goods which have an extremely low income elasticity. The most obvious example is food. If you are doing a VAT then you can also exempt steel or cotton, or things that are a high percentage of "necessary" items."

The tax is still regressive, you're just trying to turn it into a luxury tax.

Quote :

"Give everyone a tax credit. Not an exemption or deduction but a credit. That is, a check. If everyone gets an equal rebate check then the check will more than cover the tax for poorer people, partially cover it for lower middle class and be all but irrelevant to the rich."

It's still regressive, you're just shifting the tax burden. Look at the graph I posted, it helps give you an idea of what I'm talking about. (tax burden = di/tax rate)

8/2/2005 5:39:29 PM

Quote :

"If everyone gets an equal rebate check then the check will more than cover the tax for poorer people, partially cover it for lower middle class and be all but irrelevant to the rich. "

With HB25 The FairTax bill, everyone would recieve a monthly rebate check which would cover the sales tax paid up to the poverty level. As I said before, this will remove the poor from the tax rolls, help the middle class a lot and have little helpful effect for the rich.

The FairTax is not a gov't spending reform bill, it is simply tax-gathering reform. Everyone gets their whole paycheck, no fed tax, no social security taxes, no capital gains, no death-tax, no AMT. You no longer have to confess your private financial affairs to the gov't. You are once again more secure in your person, papers, and effects as guaranteed in the 4th amendment.

The FairTax is transparent, progressive and a lot less complicated. But it will only pass if the regular people pressure their politicians. The powerful lobbyists on K-street will do everything they can to protect the high wages they get from gaming the income tax.

[Edited on August 2, 2005 at 10:45 PM. Reason : sp]

8/2/2005 10:45:05 PM

Quote :

"help the middle class a lot"

How? The middle class only has a slightly smaller consumption rate of that of the rich, and proportionally they are forced to carry most of the burden due to their large autonomous propensity to consume and their marginal propensity to consume. If consumption rose proportionally to disposable income you'd have a point, but it doesn't, so you're wrong.

Quote :

"effects as guaranteed in the 4th amendment."

How do you interpret this to outlawing income taxes? The government isn't seizing anything, it merely asks tax related information.

Quote :

"The FairTax is transparent, progressive and a lot less complicated."

It would also get completely worked over by businesses. It screws us proletariats over, and lets the capitalists go tax free. THERES A REASON WE HAVE CAPITAL GAINS TAX.

Quote :

" But it will only pass if the regular people pressure their politicians."

Actually it's never going to pass because it's dumb as hell, and to say it is progressive shows what little economics knowledge you have.

8/3/2005 1:17:30 AM

Quote :

"... The government isn't seizing anything, it merely asks tax related information."

The fourth amendment was included, in part, as a response to the British Stamp Act. As you recall, all papers had to bear the King's stamp. A tax was paid for every stamp. But the King had to make sure every one was paying the tax so he authorized his soldiers to write "self-written" warrants which allowed them to enter anyone's house and rummage through their stuff to make sure they had paid the tax.


The fourth amendment dis-allowed the gov't from snooping into people's personal finances without probable cause of a crime. With no income tax, there was also no reason to check people's records. This all changed with the income tax of 1913. Again, the gov't had to make sure people were paying tax on income and authorized itself to intrude, and inspect all of our personal finances.
One of the reason's people dislike the IRS is the expensive and wasteful audits it can perform at will. Powerful politicians sic the IRS on political enemies.

Interesting that today, the Patriot Act allows the FBI to once again write "self-written" warrants.

Quote :

"It screws us proletariats over, and lets the capitalists go tax free. ."

I will have to get some clarification on intermediate goods, but the Capitalists will eventually have to pay the FairTAx too when they buy things for personal use.

Quote :

"Actually it's never going to pass...."

Maybe...maybe not...but the bill currently has about 33 sponsors. We just have to get the word out there and keep trying!

8/3/2005 10:25:20 AM

Quote :

"The fourth amendment was included, in part, as a response to the British Stamp Act. As you recall, all papers had to bear the King's stamp. A tax was paid for every stamp. But the King had to make sure every one was paying the tax so he authorized his soldiers to write "self-written" warrants which allowed them to enter anyone's house and rummage through their stuff to make sure they had paid the tax."

Wow, what a great story, and better yet, what a great thing to base our national tax code on, something stupid that happened 200 years ago.

Quote :

"One of the reason's people dislike the IRS is the expensive and wasteful audits it can perform at will."

People have hated tax collector since biblical times, wow, what a change.

Quote :

"I will have to get some clarification on intermediate goods"

It's clarified, any business to business purchase.

Quote :

"but the Capitalists will eventually have to pay the FairTAx too when they buy things for personal use"

Unfortunately they never consume proportional to their income, thus placing the tax burden on the working class. This is reason a federal sales tax would be regressive.

Quote :

"Maybe...maybe not...but the bill currently has about 33 sponsors. We just have to get the word out there and keep trying!"

Maybe you'll come across someone else who will tell you how stupid it is, and then you can ignore them and write them off as a communist.

8/3/2005 2:48:56 PM

Quote :

"Unfortunately they never consume proportional to their income,"

if thats the case, then where is that unused money going? into the mattress?

8/3/2005 5:04:08 PM

investment, savings, etc. but those things aren't consumption

[Edited on August 3, 2005 at 6:35 PM. Reason : and it is the case, look at any consumption chart]

8/3/2005 6:34:35 PM

Quote :

"thus placing the tax burden on the working class. "

The working class is already paying the 23% embedded tax. Let's bring it out into the sunshine. And the current payroll tax is extremely regressive on the poor.

Quote :

"Maybe you'll come across someone else who will tell you how stupid it is,"

Maybe...as long as they aren't stupid.

Quote :

"People have hated tax collector since biblical times, wow, what a change."

Perhaps, but the FairTax will rein him in a bit more. I understand that you want a highly progressive income tax that will punish high achievers. We can't move into that wonderful world of gov't conditioning towards communism as long as people still have free will and individual rights.

8/3/2005 11:21:41 PM

Investment and Savings SHOULD be considered consumption.

Excempt intermediate products, fine, but don't exempt machine tools for goodness sakes!

8/3/2005 11:22:02 PM

Quote :

"The working class is already paying the 23% embedded tax."

No they aren't.

Quote :

"And the current payroll tax is extremely regressive on the poor."

Prove it.

Quote :

"I understand that you want a highly progressive income tax that will punish high achievers."

I think the government works the most for the rich, so the rich should pay the government more.

Quote :

"as long as people still have free will"

People have never had free will. For every action there is an equal and opposite reaction. Do you think that your brain somehow magically works outside of that scientific law? Nothing you do is "free" of the outside environment.

Quote :

"Investment and Savings SHOULD be considered consumption."

Are you kidding? Savings is the opposite of consumption. Please, it's econ101, take it.

8/4/2005 12:02:06 AM

Quote :

"The tax is still regressive, you're just trying to turn it into a luxury tax."

If the percentage of consumption spent on non-exempt goods rises faster than the percentage of income spent on consumption falls then then the tax can be progressive. For an exteme example imagine the only good taxed is yachts. It may in fact be the case that yacht expenditures are a stable or even increasing function of disposable income even on up into to the billions of dollars in income.

Quote :

"It's still regressive, you're just shifting the tax burden. Look at the graph I posted, it helps give you an idea of what I'm talking about. (tax burden = di/tax rate)"

It is true that as long as disposbale income grows faster than consumption the tax must at some point become regressive. However, that point can be way off in the tails. This is because the credit causes the effective tax rate to increase with disposbale income. It has a linear assumptope at the nominal tax rate but it may be a while before the tax burden (as you define it) decreases.

8/4/2005 12:25:27 PM

Quote :

"If the percentage of consumption spent on non-exempt goods rises faster than the percentage of income spent on consumption falls then then the tax can be progressive."

It has to be relative to disposable income. Consumption doesn't really matter when determining if a tax is regressive or not.

Quote :

"However, that point can be way off in the tails."

I don't see that happening if you are just getting a rebate check for the poverty line. You are getting far to theoretical to be practical here. In order to have a working tax system we actually have to tax people.

8/4/2005 12:34:29 PM

Quote :

"investment, savings, etc. but those things aren't consumption"

so, you are saying it just goes into a magic bank account and never comes out, right?

its gotta go somewhere eventually. and, when it goes there, it will be taxed. thus, it doesn't get taxed today, but it might get taxed tomorrow...

8/4/2005 5:44:05 PM

Investment and saving is not consumption.

8/4/2005 6:01:07 PM

Quote :

"so, you are saying it just goes into a magic bank account and never comes out, right?"

It gets reinvested. You are arguing agianst economics here.

Quote :

"its gotta go somewhere eventually. and, when it goes there, it will be taxed. thus, it doesn't get taxed today, but it might get taxed tomorrow..."

That's stupid. If it's sitting in a bank and it's not being taxed by capital gains then the government gains less revenue than if that money is in circulation. Money doesn't just get taxed once, the government would make all it's taxes in one day. Money is constantly taxed as it circulates. Please learn the basics here.

http://highered.mcgraw-hill.com/sites/0072875577/student_view0/chapter9/interactive_graphs.html

8/4/2005 6:07:03 PM

The savings rate as a portion of income in the US right now is .02%, which is pretty negligible.

Its not always the case that less money in circulation leads to decreased tax revenue. Revenue often goes up as a result of increased savings and investment, because of the positive economic influence.

[Edited on August 4, 2005 at 6:27 PM. Reason : !]

8/4/2005 6:22:33 PM

Quote :

"The savings rate as a portion of income in the US right now is .02%, which is pretty negligible."

You are looking at it far too simplistically.

Quote :

"Its not always the case that less money in circulation leads to decreased tax revenue."

I never said that, I said if more money is saved and savings is not taxed then there is less tax revenue.

Quote :

"Revenue often goes up as a result of increased savings and investment, because of the positive economic influence."

Savings isn't always a economic accelerator, look at europe.

8/4/2005 6:45:39 PM

Quote :

"It gets reinvested."

thats great. it still has to come out somewhere. unless, of course, you are pretending that it goes into a magic investment mattress, never to appear again...

But, I've got another question, this time for EarthDogg... It seems to me that the main intent of FairTax is to get rid of the income tax. Everything else "positive" that it does or eliminates is just gravy, really. The main argument for getting rid of the income tax after "DON'T PUNISH ACHIEVEMENT!@!!!" is "omg, the income tax causes so much beauracracy and is difficult to implement!!! ITS INVASIVE TOO!!!"

Only one problem: If you tax consumption but give a rebate or have a floor of consumption that is not taxed , how the fuck is the gov't gonna know what amount to give back to each person? It sounds great initially, but how do you implement this system? Now, instead of one or two main things you have to give the gov't (W-2s), you have to give them all your receipts for the year?[quote] I mean, that is hardly simpler than sending in a W-2 and the related paperwork. Furthermore, its a fuckton more invasive! The gov't now knows everything you bought!

So, how does FT plan to address that problem?

8/4/2005 7:43:34 PM

Quote :

"thats great. it still has to come out somewhere. unless, of course, you are pretending that it goes into a magic investment mattress, never to appear again..."

It doesn't matter if it appears agian or not. The fact is that it is not being taxed. You are tax exempting something that only the rich use extensively, savings and investment, and placing it's tax burden on something that the poor and middle classes are forced to devote most of their income towards, consumption. Surely you can see how irrelvant and stupid your point is.

Quote :

"If you tax consumption but give a rebate or have a floor of consumption that is not taxed , how the fuck is the gov't gonna know what amount to give back to each person?"

They give a rebate equal to the poverty line.

Quote :

"Furthermore, its a fuckton more invasive! The gov't now knows everything you bought!"

Good point.

8/4/2005 8:13:44 PM

Quote :

"It doesn't matter if it appears agian or not."

actually it does... From the standpoint of FT, no, it doesn't. But logically it does... If you are trying to suggest that that money never appears again, then it has effectively disappeared from circulation. That is counterintuitive. Money simply doesn't disappear unless someone sticks it in their mattress, and even then, they eventually pull it back out (except in the case of coin and currency collectors."

More than likely, this money gets spent during retirement. In theory, I suppose that a retiree would be considred to have "no income," and as such would be below the poverty level. Thus, they'd never pay taxes... Unless, of course, their retirement plan is considred a source of income. Then, assuming it is greater than the poverty level or whatnot, it would be taxed... I dunno how to figure that into the equation, though...

8/4/2005 9:10:50 PM

Quote :

"actually it does..."

No it doesn't, what it matters is that it isn't used to consume at that point in time. The future of that particular single dollar bill doesn't matter at all.

Quote :

"If you are trying to suggest that that money never appears again, then it has effectively disappeared from circulation."

I never said it doesn't appear agian, that doesn't matter. What matters is if that dollar is invested or spent at that point in time.

Quote :

"More than likely, this money gets spent during retirement."

That doesn't matter. The future of the money DOESN'T FUCKING MATTER. It doesn't matter when one dollar is spent or even if a particular dollar bill is ever spent agian, it doesn't fucking matter. What matters is the relative consumption and investment rates.


It's like we are having a conversation about insect evolution and you talk about one specific ant. It doesn't matter.

8/4/2005 9:54:31 PM

Quote :

"how the fuck is the gov't gonna know what amount to give back to each person?"

This info is from the newly published "FairTax Book" available now...

Every head of household would file one simple report with the gov't. Just a list with your name and ss# and the names and ss#s of everyone in that household. The gov't creates a database of those who will receive the monthly prebate. Debit cards could be issued to make it even easier. Each month, your card would be re-charged with the amount due your household size.

If you're one of those crazy anti-gov't militia conspiracy types, simply don't file a report. The gov't won't know your information...but you won't get a rebate check.

The FairTax uses a formula based on the gov't poverty figures (no..I don't know the formula). According to the FairTax book, for 2005 a single person could spend up to $9570 ($797/month) for the year tax-free. He/She would get a monthly rebate of $183 ($797/month x 23%). No slips to send in, you just get the prebate. A single mother raising one child would get a $246 monthly rebate to cover the tax she would pay according to the formula.

Let's say she is paying $45 a week on groceries. The FairTax will remove the 22% embedded taxes lowering the price of her groceries to $35.10. Add the FairTax and her groceries go to $45.58..just a little higher than before. And remember, she is keeping 100% of her paycheck...no fed tax, social security or medicare deductions anymore.

Looking at the FairTax bill (HR 25), It looks like receipts will be required to be kept for business to business purchases. A seller will need to get a copy of the buyer's certificate allowing him to not pay the tax. Both sides of the purchase will have to keep receipts for 6 years. So private individuals will not have to show the gov't what he/she is buying, but businesess who don't want to pay the tax will if audited.

8/5/2005 12:33:05 AM

Quote :

"Let's say she is paying $45 a week on groceries. The FairTax will remove the 22% embedded taxes lowering the price of her groceries to $35.10. Add the FairTax and her groceries go to $45.58..just a little higher than before. And remember, she is keeping 100% of her paycheck...no fed tax, social security or medicare deductions anymore."

You really believe everything they tell you don't you?

How can you honestly believe that payroll taxes account for a quarter of everything you buy?

Where do you think that money goes to? It disappears? I'm sure you'd like to think that .25 of each dollar you spend is eaten up in government red tape, but it isn't.

You know nothing about taxes
You know nothing about economics
You know nothing about money
You believe whatever they tell you because you want to believe it

8/5/2005 1:11:39 AM

Quote :

"How can you honestly believe that payroll taxes account for a quarter of everything you buy?"

It's not red-tape...it's taxes.

Think for a moment about the vast number of people it takes to produce each good we buy. The producers of each part of the product, the manufacturers, the shippers, the advertising, the packaging, the retailing, health care, utilities, all those people are paying taxes. Those taxes are being rolled into everything we buy. On average, 22% of the price of all goods and services is to cover the taxes paid by all of the intermediary contributors.

Do you believe along with Karl Marx that a progressive income tax is one of the key ingredients to the proletariat revolution?

8/5/2005 1:31:54 AM

Quote :

"Think for a moment about the vast number of people it takes to produce each good we buy. The producers of each part of the product, the manufacturers, the shippers, the advertising, the packaging, the retailing, health care, utilities, all those people are paying taxes. Those taxes are being rolled into everything we buy. On average, 22% of the price of all goods and services is to cover the taxes paid by all of the intermediary contributors."

Well that money is going to come from somewhere unless you are suggesting lowering taxes or cutting spending.

Quote :

"Do you believe along with Karl Marx that a progressive income tax is one of the key ingredients to the proletariat revolution?"

No, I believe along with Keynes that it takes a progressive income tax system to keep a government running smoothly. Pretty much every industrialized country in the world agrees with it as well, explaining why they also all have a progressive income tax.

Throwing the little snippets of the CM you see mentioned by other liberitarians isn't going to throw me off. My views differ with marx quite a bit. Like any good scientific theory it has needed to advance and change over the years.

8/5/2005 2:13:03 AM

Quote :

"Pretty much every industrialized country in the world agrees with it as well"

Not really... Russia seems to have found a reason why a flat 15% income tax is reasonable, they hope it will help reduce tax evasion.

And Hong Kong had a flat income tax for 50 years until just recently, and it seemed to do pretty well.

So a progressive income tax system is by no means necessary for a government to function, you just might have to limit yourself to all the government you can afford. You may like a progressive income tax, you may consider it immoral not to have one, but that does not make it a necessity.

8/5/2005 8:58:38 AM

Quote :

"The future of the money DOESN'T FUCKING MATTER."

Actually it does matter IF THE MONEY WILL GET SPENT AND THUS TAXED. thats the entire fucking point. A blanket tax on consumption(which would be regressive) would tax every dollar spent, no matter when it is spent. Thus, personal savings and investments (excluding your half-assed idea of incorporating yourself and only making a "profit" of $1) would get taxed whenever they get spent. The only question then would be the retirement question...

On the whole, though, after thinking about it, FT seems a bad idea, because it is more complicated than the system it is supposed to replace (FICA).

Quote :

"The gov't creates a database of those who will receive the monthly prebate."

That sounds wonderful. How does it know who to give the "prebate" to if it doesn't know their income?

Quote :

"Debit cards could be issued to make it even easier."

WOW! Salisburyboy would be all over this idea... a form of a national ID card, anyone? Furthermore, issuing debits cards would be fucking horrendous from the standpoint of reducing the red tape in the tax system.

Another problem I see w/ such a sizeable sales tax (30%) is that with so much to gain from price increases, the gov't will not be as concerned with controlling price inflation and might even try and influence price increases...

8/5/2005 9:09:20 AM

Quote :

"On the whole, though, after thinking about it, FT seems a bad idea, because it is more complicated than the system it is supposed to replace (FICA)."

Social sscurity today is paid out of the general fund basically. With the FairTax, all the revenue goes into the general fund. Social Security will be funded much better under the FT because the tax base of consumption is so much larger than the tax base of income. With the FT, the super-rich, with thier low income and massive wealth, will pay into the SS fund (through consumptio) whereas today they do not.

Quote :

".. How does it know who to give the "prebate" to if it doesn't know their income?"

Remember the FairTax does not tax income any longer. The gov't does not need to know how much you make, no more IRS filings. The only thing that determines the amount of the rebate is the size of your family. The head of each household gets the check. And everyone gets the rebate, what could be more egalitarian than that?

Quote :

"a form of a national ID card, anyone?"

Again, for the salisbury boys out there, simply not file a rebate form. And we already have national ID cards...issued by the folks at social security.

Quote :

"...would be fucking horrendous from the standpoint of reducing the red tape in the tax system."

How so? Currently the social security administration sends out millions of checks every month. And switching to cash-cards would make the process even easier and more cost-efficient.

Quote :

"Another problem I see w/ such a sizeable sales tax (30%) is that with so much to gain from price increases, the gov't will not be as concerned with controlling price inflation and might even try and influence price increases..."

Whether you use the 23% tax-inclusive rate or the 30% tax-exclusive rate...the actual tax you pay will be the same 23 cents for every dollar spent. For comparision, a 35% tax-inclusive income
rate (the one always used for discussion) is also a 54% tax-exclusive rate. So if you like a tax, use the tax-inclusive rate. If you are against it, use the tax-exclusive rate.

How is gov't controlling price inflation now? Inflation is a secret tax that confiscates the value from our money. With the FairTax, prices will fall about 22%. You will actually be paying about the same for things then as you are now, unless of course the gov't keeps inflating currency.

Quote :

"My views differ with marx quite a bit."

Oh..I thought you longed for the destruction of capitalism, of private property, of individual liberty, the forced mass reconditioning of children through gov't schools... my bad.

[Edited on August 5, 2005 at 10:27 AM. Reason : sp]

[Edited on August 5, 2005 at 10:44 AM. Reason : more sp]

8/5/2005 10:27:15 AM

Quote :

"Not really... Russia seems to have found a reason why a flat 15% income tax is reasonable, they hope it will help reduce tax evasion."

Russia is in economics shambles, hardly a great example for anything.

Quote :

"And Hong Kong had a flat income tax for 50 years until just recently, and it seemed to do pretty well."

Actually it was an alternative minimuim tax, much like this thread originally described.

Almost all of Hong Kong pays a graduated income tax just like us.
http://www.pwchk.com/home/eng/hktax_rates_card_2004.html

Quote :

"So a progressive income tax system is by no means necessary for a government to function"

I never said it was. The US made it through many years without it. Cars aren't a neccessity either, neither are microwaves or anything else. It does however make a government function better, and keeps it stabilized.

Quote :

"Actually it does matter IF THE MONEY WILL GET SPENT AND THUS TAXED."

No it doesn't, it matters how many times it gets taxed over a period of time.

Quote :

"A blanket tax on consumption(which would be regressive) would tax every dollar spent, no matter when it is spent."

Plenty of money doesn't get spent, look at a bond, you can't spend it until a certain amount of time, thus the interest you gain on that bond goes tax free.

Quote :

"Thus, personal savings and investments (excluding your half-assed idea of incorporating yourself and only making a "profit" of $1)"

Incorporating yourself allows you to avoid the consumption tax as things that you buy are a business to business purchase.

Quote :

"That sounds wonderful. How does it know who to give the "prebate" to if it doesn't know their income?"

It gives it to everyone, even millionares get a check from the government.

Quote :

"Oh..I thought you longed for the destruction of capitalism, of private property, of individual liberty, the forced mass reconditioning of children through gov't schools... my bad."

Not nearly. I know that the world will go through slow steps through socialism towards the ultimate goal of communism over many decades simply because it works better.

8/5/2005 12:25:54 PM

Quote :

"Incorporating yourself allows you to avoid the consumption tax as things that you buy are a business to business purchase."

Thus, there would be a need for monitoring this very thing... *cough*more red tape ED,*cough*

Quote :

"Plenty of money doesn't get spent, look at a bond, you can't spend it until a certain amount of time, thus the interest you gain on that bond goes tax free."

Wrong. That money didn't get spent right away. When the bond matures, the person then has the opportunity to spend that money. Prices will be higher, and they may or may not equal inflation. Either way, even the interest earned on the bond gets taxed. Because no one just keeps investing and investing and never actually spends any of the investments, then we can logically assume that at some point the investment will get spent. Will all of get spent by the person who invested it? Who knows, but it all will likely get spent eventually, whether it be by the original person or to whoever he bequeaths it. It gets spent. And if it gets spent, it gets taxed...

Quote :

"How is gov't controlling price inflation now?"

Oh, I don't know, the little bit of business regulation that it actually does. Why shouldn't the gov't turn a blind eye once it has a 30% stake in the price of goods?

Quote :

"Remember the FairTax does not tax income any longer. The gov't does not need to know how much you make, no more IRS filings. The only thing that determines the amount of the rebate is the size of your family. The head of each household gets the check."

If thats the case, then how the fuck do those graphs account for the "poverty level?" There would be no poverty level as far as FT is concerned...

8/5/2005 5:22:30 PM

Quote :

"Thus, there would be a need for monitoring this very thing... *cough*more red tape ED,*cough*"

Even with monitoring they'res nothing you can really do. If this passed (which it never would) I would start my own business doing computer work, repairs and such, Normally it doesn't pay for my time I could work at my regular job, but in doing computer repairs and building, my car becomes my business vehicle I use to drive to jobs, and my house becomes my workshop where I do my work. Car and home purchases would now be tax free along with a good number of other purchases that could be business related.

Quote :

"Wrong. That money didn't get spent right away."

It doesn't get spent at all during that tax period if it's mature date is after the tax period.

Quote :

"It gets spent. And if it gets spent, it gets taxed..."

But it doesn't matter if it gets spent, it matters how much it gets taxed. Suppose I spend $20 on groceries. It gets taxed once. The grocer takes it and spends that $19 on a car repair. It gets taxed agian. The car repair man buys a new car using his $18. it gets taxed agian. etc. etc.

Now lets say I save that money. It stays in the bank for 50 years, then I spend it on my funeral. It gets taxed once over 50 years. In the other scenario the money got taxed many many times. Now do you see that working class people who can't afford to save get taxed many more times on their money than the rich who keep most of their money.

8/5/2005 5:42:04 PM

ok, so you spend it on your funeral. what income did you have THEN that you were being taxed on? probably nul. Thus, when you died, there was a tax that you wouldn't have paid then otherwise.

8/5/2005 5:55:37 PM

Quote :

"ok, so you spend it on your funeral. what income did you have THEN that you were being taxed on? probably nul."

The interest.

8/5/2005 6:06:39 PM

ok. now you are dead. who gets the interest? And what will they do with it? If you invested just enough to cover the cost of the funeral, then the interest all went to the funeral, so it got taxed then.

8/5/2005 6:21:56 PM

Quote :

"ok. now you are dead. who gets the interest?"

The interest compounded while you were alive.

Quote :

"then the interest all went to the funeral, so it got taxed then."

But the point is that you only got taxed once on that money for fifty years, whereas someone who isn't able to save money is constantly taxed.

8/5/2005 6:59:53 PM

Quote :

"But the point is that you only got taxed once on that money for fifty years, whereas someone who isn't able to save money is constantly taxed."

So you're saying the rich spend less than the poor? Give me a break. And the "poor" under the fairtax plan are not constantly taxed. Taxes for what everyone needs to live on are reimbursed to the people so in reality the poor would be carrying none of the tax burden. If the "poor" had any money left over at all, a consumption tax would encourage them to save, so maybe they wouldnt be poor anymore. The money anyone saves has to be spent sometime and it will be taxed. Your arguement holds no water. I dont understand why many people think since the rich earn more money, they should pay a progressively higher tax rate. Its like they feel jipped. This is a capitalisitic society; if you don't like it, leave. The rich shouldn't be punished for succeeding in the capitalistic society and in a progressive tax system they are. Give me a break. Before you say anything, I'm not someone from the "rich" bracket either. I just don't think the current tax system is fair at all.

8/5/2005 7:43:32 PM

Quote :

"So you're saying the rich spend less than the poor?"

Yes. Proportional to their income the rich spend much less than the poor.

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"And the "poor" under the fairtax plan are not constantly taxed."

Yes they are. The poor are forced to devote most of their disposable income to marginal consumption and autonomous consumption, while the rich are able to save and invest much of their money.

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"Taxes for what everyone needs to live on are reimbursed to the people so in reality the poor would be carrying none of the tax burden."

Autonomous propensity to consume is not the same as the poverty line, it is also not a striaght line.

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"I dont understand why many people think since the rich earn more money, they should pay a progressively higher tax rate."

Because it helps stabilize our economy.

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"The money anyone saves has to be spent sometime and it will be taxed. Your arguement holds no water."

That doesn't matter, what matters is how many times that money is taxed, and when it is saved it is taxed fewer times.

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"This is a capitalisitic society; if you don't like it, leave."

No, actually this is a progressive mixed economy, if you don't like it and you want a capitalist one then you can leave.

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"Before you say anything, I'm not someone from the "rich" bracket either."

You're just in the "economically ignorant" bracket.

8/5/2005 8:00:10 PM

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"That doesn't matter, what matters is how many times that money is taxed, and when it is saved it is taxed fewer times."

Then your argument should therefor be that no one should be allowed to save any money whatsoever, in order to give the gov't as much money as possible. Thats it, get rid of banks!

now that we see your true motivation, we can easily discount anything you say. Utlimately, every bit of money that the person made gets taxed, even w/ a tax on consumption, unless there is a prebate. Deal with it. If a person chooses to save his money, then thats his own fucking choice, and the gov't shouldnt assrape him for saving it, or being smart enough to actually focus on education in order to GET that money...

8/5/2005 10:34:49 PM

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"Because it helps stabilize our economy."

Getting smothered with a pillow eventually stabilizes you as well. That is what the current income tax is doing..slowly smothering our economy.

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"The poor are forced to devote most of their disposable income to marginal consumption and autonomous consumption, "

But that's not a gov't imposed tax..that's just being poor. Even though I dislike a system that rewards the poor and punishes the achievers, the FairTax is the only tax reform plan out there that completely removes all federal taxes off the poor...both income tax and the truly regressive payroll tax.

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"That doesn't matter, what matters is how many times that money is taxed, "

Right now, everytime you spend money, it becomes someone else's income and is taxed, when they spend it, it becomes another pesron's income and is taxed. With the FairTax, you decide when you pay fed tax with your spending habits.

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"I would start my own business doing computer work..."

Right now tax evasion on income taxes costs the country about $355 billion. You probably won't be alone in setting up a sham company for the purpose of evading taxes. You'll get your tax certificate and save all of your receipts. If you pass the inevitable audit, more power to you. Tax evasion is an American tradition since the beginning.

8/5/2005 11:02:40 PM

Quote :

"Then your argument should therefor be that no one should be allowed to save any money whatsoever, in order to give the gov't as much money as possible."

No, that's stupid, it's just obvious that capital gains should be taxed like all other income. The point is that by only taxing consumption you are taxing the poor (who are forced to devote most of their income to MPC and APC) and letting the rich (who have money to save and invest) get away with being taxed little.

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"Utlimately, every bit of money that the person made gets taxed, even w/ a tax on consumption"

IT MATTERS HOW OFTEN IT IS TAXED!

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"If a person chooses to save his money, then thats his own fucking choice, and the gov't shouldnt assrape him for saving it, or being smart enough to actually focus on education in order to GET that money..."

Saving money and investing is still economically to one's best interest, but it doesn't allow the rich to avoid their fair share of the tax burden. And education is not taxed, you would know that if you paid your own tution or taxes.

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"That is what the current income tax is doing..slowly smothering our economy."

Oh yeah, the economy has since after the great depression
Are you going to try and rewrite history? Things have been economically great (despite the best efforts of the gop) since the New Deal and the policies of our nation's greatest president, FDR. We tried it your way, it gave us an unstable economy with skyrocketing inflation one minute and starving depression the next. Keynesian economic policies have given the world the economic stabilization it needs. The US was especially lucky and especially stable thus leading to its position as the international reserve currency.

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"But that's not a gov't imposed tax..that's just being poor."

But the government imposes the tax on spending, something the poor are forced to devote most of its disposable income to, the rich, who spend much less proportionally are allowed to skirt their tax responsiblity.

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"regressive payroll tax."

You love to call it a tax, but it's really WITHHOLDINGS.

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"You probably won't be alone in setting up a sham company for the purpose of evading taxes."

My company isn't a scam. My car really is used to get to my work sites. This is all legal. And you can be damn sure I won't be alone, there are absolutely no drawbacks or illegality, you'll just have to deal with some government paperwork, which I'll gladly do to avoid paying a substantial portion of my federal taxes. I'm not evading taxes, I'm merely taking advantage of the HUGELY UNFAIR advantages of incorporation since you've removed almost all of the drawbacks.

8/6/2005 1:24:48 AM

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"Things have been economically great (despite the best efforts of the gop) since the New Deal and the policies of our nation's greatest president, FDR."

Yes, things have been great since then, but it wasn't FDR's new deal that did it. It was the systematic destruction of all of the world's major economies except ours by WWII that did it. We let everyone else bomb the fuck out of their economic infrastructure, and we even sold them all the fucking guns and tanks that some of them needed in order to do it. Then, we went joined the war, which boosted our war production even more, and we proceeded to destroy even more industry in europe and japan. When all was said and done, our country was the only economic superpower in the world.

Don't act like the New Deal did it all. It might have helped some, but war profiteering and production are the main things to point the finger at for our economic strength since WWII.

8/6/2005 1:46:53 PM

^ exactly. Statistics I've seen...I'll try to find them show that most economists outside of the political spectrum believe that a consumption tax would spark economic growth. Hell, even Greenspan testified to this.

8/6/2005 2:02:00 PM

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"It was the systematic destruction of all of the world's major economies except ours by WWII that did it."

Economies can bounce back unbelieveably fast after war, look at japan. Every world economy jumped right back into place within a few years, except for the USSR, which grew with leaps and bounds.

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"When all was said and done, our country was the only economic superpower in the world."

Our country was the most powerful superpower in the world before WW2.

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"Don't act like the New Deal did it all."

It did. The war had little impact on the world economy outside of it's span. Every nation pretty much picked right back up where they left off.

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"I'll try to find them show that most economists outside of the political spectrum believe that a consumption tax would spark economic growth. Hell, even Greenspan testified to this."

Greenspan is most definately not outside the political spectrum. He has his political motives just like everyone else. Income tax has proven itself to work thus why every civilized nation in the world uses it.

8/6/2005 2:35:03 PM

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"Economies can bounce back unbelieveably fast after war, look at japan"

give me a fucking break! WE REBUILT JAPAN OURSELVES. America had nothing from which to bounce back, so we were pretty much the only fucking "competitor." Thus, we assraped everyone. All of the money that we grabbed then allowed us to set up the sytem that is still going strong today. New Deal did little if anything...

8/6/2005 3:08:57 PM

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"give me a fucking break! WE REBUILT JAPAN OURSELVES. America had nothing from which to bounce back, so we were pretty much the only fucking "competitor.""

International trade is what fueled the post WW2 economy, and international trade isn't a one player game. You can pick any country involved in WW2 and they all bounced right back. England, France, Germany, Japan, and the USSR. All decimated by war, all back to their places as economic giants in only a few years.

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"All of the money that we grabbed then allowed us to set up the sytem that is still going strong today."

It isn't money that makes us powerful, it's CREDIT.

8/6/2005 3:13:31 PM

and in those few years where they were shit, we had no competitors, like I said before. we just kicked everyone's ass for a few years and got rich off of it...

8/6/2005 3:20:01 PM

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"and in those few years where they were shit, we had no competitors"

And those few years didn't mean shit. Those countries were free of that debt in no time.

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"like I said before. we just kicked everyone's ass for a few years and got rich off of it..."

No we didn't everyone bounced right back. It was keynesian economic policies ruled the post ww2 world. It was those policies that sped the recoveries of the other world superpowers. It was those policies that have stablized the world economy.

8/6/2005 3:35:32 PM

BTW, Kris, are you trying to say that a progressive tax would tax money as many times as possible? Because if so, then no tax would be progressive when it came to taxing savings. Your argument that the fairtax is not progressive because it doesn't tax savings very often is therefor m00t. all that matters is that the money gets taxed as far as being progressive is concerned...

8/8/2005 3:16:09 PM

Quote :

"Kris, are you trying to say that a progressive tax would tax money as many times as possible?"

Of course not. We are not discussing a change in revenue, it is assumed that the revenue would be the same under both. It's where the burden of the tax lies that is pertinent to this discussion.

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"Because if so, then no tax would be progressive when it came to taxing savings."

It doesn't tax savings, it taxes interest, just like any other form of income.

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"all that matters is that the money gets taxed as far as being progressive is concerned..."

No, being progressive means that things are taxed proportionally to income. Surely it's easy to see why income comes into play.

8/8/2005 5:47:20 PM

but thats just it. if every dollar of that income is spent eventually, then every dollar effectively gets taxed, whether it is spent by the person who earned it or his heirs.

8/8/2005 7:42:32 PM