Politics, religion: was 2008 Elections...? - enter at your own risk

[Miodrag Popovic]

I would wote for senator Barack Obama,
I hope that my wote is not minus for him :innocent:

Cheers
Pop

 

[Matthew Rogers]

Read my post. It says "30% sales tax which works out to 23% after the necessary calculations". It's still a 30% sales tax on the price of goods. Calculating backwards after taxes is incredibly difficult. Adding 30%... is mathematically easy also with things such as long term loans the added 30% is actually more damaging than a reduction in wages by 23% because of interest.

You mean 30% exclusively. Oh by the way, they are predicting that interest rates will fall by 25%. Everything, will be getting cheaper because all the hidden business taxes disppear.

"Everybody will fill out a prebate form." Wow! So everybody will be getting a tax break. Now by how much and what for... that's up for debate... and once again you have loop holes left and right. "Ohhh I have 2 kids but I'm also blind so I need the blind person deduct...err prebate... That's EXACTLY the same as the system right now except instead of it coming out of your paycheck it's balanced out so that you spend exactly the same amount through a check. And what happens if your prebate goes missing and doesn't show up on time? What if you aren't getting all the prebate you deserve? That requires an agency to ensure everybody gets their Welfa--errrr...prebate check.

Actually, it's very simple. And because it's so simple, everyone in the country should be able to understand exactly what they would be getting each month in prebates. You want to find out how much you'd get? visit: http://www.fairtax.org/PDF/FairTaxPrebateExplained2007.pdf

My family would receive $391. Wow, that was so hard to figure out. If your not getting the correct prebates and can't figure out exactly what you should be getting, then I'm surprised you can hold down a job. It's SOOO simple to calculate!

It's not at all the same system! One is taxing you on every penny you earn, the other is taxing you on every penny you spend at the retail level. You should be mad at the current system because every penny is getting taxed twice...when you earn it and when you spend it through the hidden taxes.

While I'm sure most millionaires are pretty clever I would imagine everybody in the 100,000 through 18 billion range pays more than the 24,000 -> 100,000 range as a percentage. I've experienced the transition through brackets in the past and it's quite noticeable... and I've been told by friends in the know it keeps happening.

Let's see, I am currently being taxed at 15% for Federal taxes (25% when I reach $30k) Social Security and Medicare cost almost 17% also (as I am self employed.) So currently I paying 32% on every dollar I make. Wow, that must mean I'm making over $100,000 a year right? Nope, I made under $35,000 last year. And yet when I go and buy something that the store wants to make $1 on (after taxes), I actually had to make at least $1.32 to pay for it. OH WAIT!! They want to MAKE $1 on it, so that means they have to figure out how much more they have to charge to pay their taxes (23% of the cost of any retail item, or in this case, about $0.30), so that means I actually had to make $1.62 to pay for my $1 item... (and that doesn't calculate the 25% income tax if I were making over $30k!) So when I buy something at the retail level I am paying at least a 55% tax... (figuring that out now makes me very depressed....sigh....)

Under the fair tax, the most the feder government could tax me is 23%--and only that when I spend over my poverty level!

I do know quite a few rich people... and you they have several universal trait. They all have health care. They all save for retirement and they all invest a lot of money in the stock market. A person who lives on minimum wage (and is actually above the poverty line). Spends almost $0 on insurance of any form. Spends $0 on retirement. And spends $0 on investments. All 3 of those are untaxed by sales tax. That means the rich person gets a complete tax break on easily up to 33% of their income in investments and insurance while the minimum wage employee spends 100% of their income on retail items.

Funny, all three of those things you mentioned help everybody. They pay into health care--which the more people we have in health care, the more the costs are spread around (good for you and me.) Saving for retirement means they are putting money into banks that can be loaned out to people like you and me, wow! The stock market? Yep, that helps companies which provide jobs for you and me! However, when you are taxing the income, many of those people will move their money outside of the US--where it is not helping any American! Oh, and all those items you just mentioned also have tax built into them. So actually your friends are paying tax and are not getting off scott free.

That's just one of the ways that taxes would go up on everybody. It would go up (inherently before prebates) on everybody who pays less than 23% on taxes right now. If I payed hypothetically 20% I would be seeing a 15% increase in taxes. If I were super rich and payed (I hear this from rich friends bitching all the time that this is how 'rediculous' their taxes are.) more than 35% in taxes I get a 34% tax break. But since this has to remain income neutral and the revenue just dropped by such a system by easily 50% we have to increase everybody's taxes to reach previous revenue systems. The US Government has looked into how much a National Sales Tax would have to be in order to work and they've figured it would have to be in neighborhood of 60% (before taxes) in order to be revenue neutral. THe FairTax systems says 23% because that's the national average right now for every single individual. But that's not fair because some people don't pay taxes... so Revenue/Individual/GDP doesn't work because some people are paying 0. The only way to make that work is to charge 23% to EVERYBODY (since it's a national average.) including the 0% tax people. This is all very basic math. If the average is 23% but then you apply a "progressive" cut-off for people below the poverty line. Then you've just 'cut taxes'. The Revenue has reduced. Then we see a magic price reduction in everything. (YAY! RIGHT!?) Nope. That means people are now paying (let's just go with your COMPLETELY WRONG number of 23% deflation as a result of no income tax.) All of a sudden the US Government sees a second reduction in Revenue as 30% of 23% cheaper goods is less than currently. Once again the US government either is giving out a tax break and losing revenue.

First off, there are many comments in this thread about how horrible our current government is, and how they can't do anything right. So let me ask why you believe the government could correctly calculate what it would to keep it afloat? If you call three different IRS agents about written tax code you will get three different answers on what it means!

As I said before, not everything that we pay in the hidden taxes actually goes to the government. I am figuring that at least 5% is towards companies complying with the government tax code. 5% is a ton of money!

The Fair Tax.... which is code I think for 'huge tax breaks'... either has to Raise taxes dramatically above 23% over time in order to live up to its promise of "Tax Neutral" or else is a complete lie.

Not when you consider how much money people spend (both poor and rich.) You've got to remember economists came up with this idea. They considered many different ideas (including the flat tax), but decided this was the best approach. Why do I NOT believe the government, but I do believe independent researchers?...hummmm....

Oh of course... the super rich illegal immigrants. They'll pay my taxes! Perfect! I'm sure that 23% taxes on the $20,000 they make will just fill the national coffers to the brim!

It doesn't take super rich immigrants to help. The figure on what an illegal immigrant makes each year is roughly $8,000---$15,000 for a family. So even 50% of that $8k=$4k x .23 = $920 a year in "taxes" So let's see, they think there's somewhere between 8-20 millions aliens, so we'll go with 8 million. 8 million x $920 = $7,360,000,000 (that's 7 billion.) Ummm, that's nothing to sneeze at since that's 7 billion that you are currently helping to pick up the tab on (thanks to all our services that BY LAW cannot refuse service to someone in "need".)

Again not taxing illegal immigrants is a problem but one that isn't inherently impossible to fix with the currrent system. How about by punishing the people who are hiring illegal immigrants and not paying the propper medicare/social security deductions from their paychecks.

That would be great. However, it's not happening and probably won't happen anytime soon. How long are we going to PATCH the hole instead of ripping the whole thing up and repaving?

 

[Matthew Rogers]

If I were a business and I just got a tax break I would happily make more profit for my share holders. Businesses always promise to pass along the savings to the consumer and rarely do they. If I got a 10% revenue tax break I would happily pocket 10% and watch my stock soar.

That works right now because none of us "consumers" know about those breaks. Whereas with this, EVERYONE knows exactly how much of a break companies are getting and will be expecting the prices to go dow. Personally, there is a VERY small list of items that I would need to live. If the other items I won't don't come down in price, then I will stop using them until they do, or find another brand that has not pulled the same stunt. This is where the Wal-Marts of the world will actually help--thanks to their desire to have the absolute lowest prices. Besides, if you lower your prices, and people have more money to spend, won't you possibly have more sales? "Yes, we shipped 28% more product this year than last!" That kind of report is encouraging to an investor and helps the stock gain value.

So let me get this straight. Businesses magically save 20+% on compliance. BUT... they have to fill out forms to get all the tax breaks they get right now anyway. If Businesses can deduct razors they sure as hell are going to deduct razors and they're going to fill out the form. That's the problem with the FairTax system. It = exactly what we have now after an enormous upheaval and restructuring that results in 10 years of nobody have any idea what's going on. The destruction of the IRS and the creation of an identical organization to make sure people arne't cheating the new system. PEOPLE WILL ALWAYS CHEAT. And as a result the government will always have to spend time and money making sure they don't. Hence the IRS. The dream of the sales tax is that people won't find ways around it and won't have to fill out paperwork. But people who want to save money are going to have to fill out the same amount of paperwork and keep track of the same amount of receipts etc to prove that all of their new deductions and savings were legal.

Business/people aren't going to cheat in that way because it will be FAR too easy to get caught now. I don't know about your state, but the state of Tennessee Revenue department is VERY good about catching people who use tax free forms incorrectly. Why spend $30 an hour on someone to fill out the forms to save $10 on an item? It doesn't make sense. That's why I was saying earlier that it would be BIG buys that people would try to cheat on. Those big buys are very easy to spot. Also, it's going to be almost impossible for the average citizen to cheat now.

Two reasons why the IRS is as big as it is right now. The first reason is the amount of tax returns that have to be processed each year. 100 million+ personal returns and 20 million+ business returns. If you are only having to process business returns then that drops to 1/6th of what you were doing before. But wait, the states are going to handle the base collection from businesses, so that means you don't still need as many people because they will only be dealing directly with 50 "businesses." Yes, you will need agents to go after cheaters. However, it's FAR easier to go after them now.

Currently, one reason it is so hard (and takes so long) for the IRS to go after cheaters is that they have to figure out if the person actually cheating. I tried to find out how long our tax code is, but all I could find out was that it's somewhere between 2,500 and 2.5 million pages long. Even at 2,500 pages, that's alot of information to poke through to findout how someone is cheating. With the FairTax it's pretty simple.

Ok... buy a used house. "Problem solved." Less Taxes to pay. Less US Revenue. Whoops. Tax Break not Tax Neutral!

Oh wait, if your like most americans, you will spend the money you saved somewhere else (or actually save it and help our economy through loans.)

What incentive to the states have to find these cheaters? States don't give a flying trout about tracking down these cheaters. This just once again pulls of the classic libertarian. "If the states do it. It won't cost you any money!" True. It won't cost you any money at the federal level but it means the states have to raise their taxes to ensure that they're gathering the propper funds for the federal government. Which is just transfering the location of the cost not actually reducing it.

Geez wiz, I don't know...if they are not paying FairTax, then they are not paying state sales tax!!! You realize that only 5 states don't have sales tax? So currently 95% of the states would have a vested interest in hunting down those people since it's costing them money!

Just a question here...have you fully read the FairTax plan? I ask this because the last part of the above statement says to me that you have not fully read it. States will receive 1/4 of 1% of what they "bring in" to help offset the cost of collecting and remitting the FairTax to the Federal government. Business will also receive the same to offset their time spent collecting and remitting the tax.

Matthew

 

[Matthew Rogers]

I'm going to try and cut the quoting down so I can fit everything in one post for everyone's sanity.

It's not a question of MAILING the CHECK. It's a question of how much check you get in the first place. IF computers are going to automagically calculate this prebate and send it off without being done on a case by case basis... then why dont' we just automatically calculate our income tax with such a system.

See, the problem with our system now is it's entirely based on a, if this, then that system. You need a computer with turbo tax to figure everything out. Not to mention that just because you have turbo tax means you are going to get all the deductions that you deserve. The FairTax is trying to make the system so simple that a 5th grade class will be able to study it for math.

Well if by "Work hard and wise with their money" you mean. "Am doing very well financially" the answer is: Because you've been rewarded even more than you're being punished and it's your moral imperative just as it is mine to take care of those less fortunate than yourself. If it's so PUNISHING AND TERRIBLE stop making so much money go live on minimum wage. I'm sure you could cut your wages and stop being punished so much by your affluence.

I say punished because when I am being taxed 55% in reality on everything I buy in the store, that is being punished. I am a firm believer that NO ONE should be taxed more than 25% of their income. I don't care if you make $1 a year or $1 billion a year-it's your money that you've made, and at $250,000,000, you are giving up alot of money. I know it's easy to think, oh when you've got more money it won't be so bad to pay more taxes--but that doesn't make it any easier when the tax bill comes. Fair is treating everyone the same--which in this case equals out to the same tax rate. I am glad there are people like Jim who decided that it wasn't too punishing, because that helped build Oakley up, and now the RED. Actually, Jim is a prime example. Here was someone who took very little and made it ALOT. Just because he makes more a year than me, he's in a different tax rate--that is not fair. I don't want to have to tell my kids that they are going to be treated differently by the government (really put in the crosshairs) just because they are successful.

So I'm foolish for suggesting that a monthly welfare check for every single American is going to be an administrative disaster! First off I couldn't find anywhere in the entire FairTax documentation and sales pitch that said "everybody gets a prebate". They mentioned over and over that people living below the poverty line get a prebate but mentioned nobody else. And even with a prebate how do the know everything about you?

Uhhh, try this link: http://www.fairtax.org/PDF/FairTaxPrebateExplained2007.pdf
And they know everything about you and your family because you supplied all of your SS numbers.

Income tax only gets complicated if you want to make lots and lots specific deductions... exactly the sorts of deductions that an automatic computer wouldn't add on or even necessarily know about you. EXACTLY THE SAME sort of paperwork that you're filling out now. Only instead of getting a tax refund you prebate... after the fact.. which is really a rebate, but we'll just call it a prebate for the next month since the previous month wasn't right.

And because the tax code is so complicated, many people do not take the time to fill it out fully, and therefore pay more in taxes than they should.
I think I understand what your saying, but you've got to remember that for an individual, there are no deductions or anything. I'm not sure how often you would have to fill out the form for your family (whether it's once a year, or only one a situation changes (aka: a child turning 18, spouse dying.))

Oh the joys of filling out paperwork every time you want to purchase a stapler and get the sales tax back. Completely different from deducting it at the end of the year.

Umm... at least in Tennessee it's really not that difficult to buy stuff on a tax form. For most businesses all they have to do is enter your tax resale ID number and your good to go. It takes about all of 3 seconds to input. If the business you are dealing with can't take a number like that, all they have to do is make a photocopy of your Tax ID form, and write down what the item was (takes about 15 seconds.) IT'S NOT HARD! And for 45 of the states, the system is already in place and working fine.

Not to mention what a nightmare it would be for the states to try and figure out how they're supposed to administer this new state program. They'll have to raise taxes to create their own agencies to investigate that.

Answered in my other reply.

So the price of everything drops by 23%. What stops a weeks later from the dollar depreciating by 23%? Nothing! And that's of course assuming that we only pay a 30% sales tax. (A number which the US Government disagrees as being viable.)

Because we (everyone who has some kind of income) instantly has 23% (or 30% depending on how you calculate it) more buying power. It encourages all this hidden money overseas ($100+ billion) to come back into the US.

We're also assuming that businesses won't try to slowly reduce wages over time back to their pre-no-income-tax levels.

What the HECK are you talking about? Wages won't go up and won't cost the company any more money post FairTax. You've got to remember that the 7.5% SS that your employer pays on your wages is on TOP of what you are earning. Therefore, you will be getting 100% of your current wages. Yes, the employer could give you a slight raise, but I doubt they will.

Here, maybe this will make sense. Say you are getting paid $10 an hour. When the government goes to tax that they take 7.5% out of SS, 1.75% for FICA, and let's say 15% for federal tax. That equals out to $.75 SS, $.18 FICA, & $1.50 federal = $2.43. However, the business you work for has to pay the other 7.5% for SS. What that means is that you were actually making $10.75 an hour, not $10 (since it goes towards your future, I would say you are earning that money.) With that business not having to pay the 7.5% they are saving money and it doesn't touch your wages. What the current system does is actually force the business to pay you less because they know whatever they pay you, they are going to have to pay and extra 7.5% on top of that--it's your money that your not making.

The whole FairTax system is a complete load of crock.

I love the idea! I would love to see it happen! But it's fundamentally based on numbers which don't add up.

I'm glad to see that you think people like Alan Greenspan think such a system is a load of crock. Yep, he believes in it. http://www.theconservativevoice.com/articles/article.html?storyid=3552

Funny, the numbers seem to add up in Florida and Texas...yeah both of those states work on a consumption tax pretty well (and I believe they are the 3rd and 4th biggest economy's in the world.) Heck, even Tennessee is mostly a consumption tax. Our 9.25% sales tax accounts for, I believe, 80-90% of our state revenue. Actually study it some kind of depth and maybe you'll finally understand it.

Matthew

 

[Gavin Greenwalt]

I'm done quoting there is no more point counter/point which can be made since it'll be come about "What Matthew Rogers said vs What Gavin Greenwalt Said." Which is completely pointless.

The question at hand is:
"Does the the FairTax Code provide the same level of taxation with the current level of income tax taxation."

And my answer is: "No it 23% it does not."

You assert that people will save/invest more money and spend less. Ok fine. I have no problem with that assertion it's probably true and a good result of a sales tax (except for the poor who still will spend all their money on survival).
You assert that it's a progressive tax even though capping taxes at 23% is clearly a tax break for those in the higher tax brackets and pay more than 23% currently.
You assert that businesses will be effectively free from all taxation. (Removing businesses as a source of income for the US treasury).
You assert that there will be almost almost 100% compliance and very little fraud.

Ok so.... everybody is paying less taxes than they used to. Hooray! And now for the leap of plausibility: The US will still collect the exact same amount in tax revenue as they did previously. That my friend is an enormous leap of plausibility.

I don't have a problem with the FairTax Structure for the most part. I have a problem with it inherently being regressive (Whatever the sales tax is, is the highest tax rate anybody will pay including super billionaires and prevents us from taxing them at rates the public would find unacceptable (aka 35-40%)). And I have a problem with the notion that starting from the national average of 23% and working your way down through prebates etc... we somehow magically arrive at where we started. Tax cuts will hurt social services. If people want tax cuts they should be debated with all the consequences known to the voters. The Republican party constantly advances these massive tax cuts in disguise as an attempt to placate voters into thinking that they aren't actually seriously damaging the impoverished people our nation in the process.

It's also going to be a huge pain in the ass while shopping since no price tag will actually be how much it is encouraging gross overspending at the counter.

(Oh yeah and your 23% "business compliance cost" includes my taxes that I get deducted from my paycheck. That's not a business' compliance cost. That's MY complicance cost. Using it further I will consider a dirty rotten lie (I'm assuming you were previously unaware of that otherwise I would apply the same label to the user.) and is no longer useable in this debate.

Edit: I just found an article which I would rather hear a rebuttal to than my own response:
http://www.brookings.edu/papers/1998/03taxes_gale.aspx
[Disclaimer Brooking's Institute is a liberal leaning organization]

 

[Craig Ryan]

I'd say if there's ONE thing the next president needs to do regardless of party affiliation's, it is to re figure the budget! 20% on the military is completely unacceptable, especially with condition of health care in this country. 200 billion yearly on the war in Iraq? I mean thats a lot of dough that could be spent wisely elsewhere.

But out of the choices, presently I'd have to go with Barrack aka "BA-RACK" (if anyone else has noticed he sounds EXACTLY like Dwayne "The Rock" Johnson. He should start ending his speeches with "IF YA SMELL WHAT BA-RACK, is cookin''"

 

[Gavin Greenwalt]

What I want more than anything. And am certain not to get. Is a highspeed rail network.

Please for the love of God give us a highspeed rail system. At least from New York to Seattle (through chicago), LA (through Texas) and Florida (through Washington DC, Charollete and to Miami). And a Seattle to San Diego (through Portland, Sacramento, LA and San Francisco) connection.

250mph would be sufficient. But if it could be an elevated pneumatic maglev on the order of 600 -> 1000mph I would double my taxes for the sake of future generations.

 

[Craig Ryan]

Seriously! I remember talks of a west coast bullet train of some sort going from Seattle to San Diego...don't remember if they got the funding though...I wonder how much a national fast-speed rail service would cost?

 

[Gavin Greenwalt]

http://www.fra.dot.gov/downloads/RRDev/cfs0997ch7.pdf

Seattle <-> San Diego.

~$700Million @ 110mph
~$3.7Billion @ 125mph
~$6.2Billion @ 150mph
~$38Billion @ 250+mph (Maglev)
Probably >$150Billion @ 1000mph (pneumatic Maglev) (Still less than #*(*&#$#@ Iraq per year)

(For comparison 1 new airport costs about 20Billion.)

 

[David Birdy]

No Rails

No Rails

What I want more than anything. And am certain not to get. Is a highspeed rail network.

Please for the love of God give us a highspeed rail system. At least from New York to Seattle (through chicago), LA (through Texas) and Florida (through Washington DC, Charollete and to Miami). And a Seattle to San Diego (through Portland, Sacramento, LA and San Francisco) connection.

250mph would be sufficient. But if it could be an elevated pneumatic maglev on the order of 600 -> 1000mph I would double my taxes for the sake of future generations.

The reasons we have no Passenger rail system in the U.S.

# 1 The influence the auto industry has over law makers.

# 2 The influence the OIL companies have over law makers.

# 3 The influence the Airline industry has over law makers.

# 4 The influence the Tire manufactures have over law makers.

Anybody see a pattern?

 

[Matthew Rogers]

You assert that it's a progressive tax even though capping taxes at 23% is clearly a tax break for those in the higher tax brackets and pay more than 23% currently.

And there will be many of those people who spend even MORE money in the year on things because they have more money and more buying power. I don't think you understand how much it will jump-start our economy.

You assert that businesses will be effectively free from all taxation. (Removing businesses as a source of income for the US treasury).
You assert that there will be almost almost 100% compliance and very little fraud.

Businesses are owned by people like you and me (privately like mine, or with stock like Apple Computers.) So taxing businesses is stupid because you are just taxing people. Why not just tax people directly and take out that layer of bureaucracy?!

Ok so.... everybody is paying less taxes than they used to. Hooray! And now for the leap of plausibility: The US will still collect the exact same amount in tax revenue as they did previously. That my friend is an enormous leap of plausibility.

Possibly, but many people who get all of their pay check will spend all of their paycheck (these people need to learn how to save so we don't have to bail them out when they go bankrupt.) What it does is applies the roughly 5% spent on compliance actually towards taxes/government revenue--that helps some right now. Then the massive amounts of people who don't taxed right now, but are making mucho money will be taxed. The key is that we include EVERYBODY no matter what they do legally or illegally.

I don't have a problem with the FairTax Structure for the most part. I have a problem with it inherently being regressive (Whatever the sales tax is, is the highest tax rate anybody will pay including super billionaires and prevents us from taxing them at rates the public would find unacceptable (aka 35-40%)). And I have a problem with the notion that starting from the national average of 23% and working your way down through prebates etc... we somehow magically arrive at where we started. Tax cuts will hurt social services. If people want tax cuts they should be debated with all the consequences known to the voters. The Republican party constantly advances these massive tax cuts in disguise as an attempt to placate voters into thinking that they aren't actually seriously damaging the impoverished people our nation in the process.

I see...the difference between you and me is that you believe that because someone is super successful they should be treated differently when it comes to taxes. On a matter of principle (not on how much you actually make right now) do you want someone saying, I'm going to take 40% of whatever make this year...? Less taxes stimulates growth because people have more money to spend (and they DO spend it.)

Let me ask you, how many people that the government calls "impoverished" are actually down on their luck by honest reasons and are trying to rebound? Most of the poor people I see in East Tennessee are poor because of laziness and poor decision making. They don't have a desire to work, and can do so by living on welfare (which won't kick them off eithe...arggg!) I have seen both sides of the gap because my dad is a teacher at a school that has the poorest and richest kids in the city. We are only enabling....it's time for a quick kick in the butt for most of these people. As for the person with MS that David mention...that's the kind of person that I want to help...because they want to better themselves.

It's also going to be a huge pain in the ass while shopping since no price tag will actually be how much it is encouraging gross overspending at the counter.

What are you talking about? Are you saying that people will be spending more than they make? Oh wait, that's already happening. Are you implying that people won't know how much FairTax they are paying when they buy something?

(Oh yeah and your 23% "business compliance cost" includes my taxes that I get deducted from my paycheck. That's not a business' compliance cost. That's MY compliance cost. Using it further I will consider a dirty rotten lie (I'm assuming you were previously unaware of that otherwise I would apply the same label to the user.) and is no longer useable in this debate.

Once again you are wrong. The taxes, SS, and FICA you pay are NOT included in the 23% and I never said they were. The 7.5% that they are paying for every hour you work is being put into the 23%.

Edit: I just found an article which I would rather hear a rebuttal to than my own response:

Please, don't cite a 10 year old article when trying understand policy. It's obsolete and the issues it raises have already answered.

There are a few good gems in the article, such as:

Many other countries have attempted to implement a retail sales tax, or variants, and almost all have abandoned the tax and moved to a value-added tax. Governments have gone on record as noting that at rates of more than 12 percent, sales taxes are too easy to evade. The most optimistic assessment would be that there is no historical precedent for a country to enact a high-rate, enforceable, national sales tax. That does not mean it is impossible, but extreme caution would be appropriate.

Excuse me, if you are going to say Governments, then you need to mention WHICH governments! How am I supposed to research the history of the tax there, if I don't know where there is?!

Advocates also assert that the sales tax would be more effective than the current system at raising revenue from the underground economy. The classic example is that of a drug dealer who currently does not pay income tax on the money he earns, but would be forced to pay taxes under a sales tax if he took the drug money and bought, for example, a Mercedes. The problem with this argument is laid out best by Rep. Richard Armey (R-Texas): "If there is an income tax in place, he [the drug dealer] won't report his income. If there is a sales tax in place, he won't collect taxes from his customers" and send the taxes to government. In the end, neither system taxes the drug trade.

No, the drug dealers aren't supposed to charge sales tax on their drugs, but they will pay the tax when they buy the friggin Mercedes you mentioned! This whole paragraph lays out the situation correctly and then totally ignores it!

Finally, some sales tax advocates would eliminate the IRS and have the states administer the tax. Even though the states would keep 1 percent of the revenue they collect, they would have poor incentive to collect federal taxes adequately. Even the Wall Street Journal, no fan of big government, notes that "it is fantasy to think of 'getting rid of the IRS.'"

Wow, if the states aren't collecting the Federal taxes THEN THEY ARE NOT COLLECTING THEIR OWN TAXES! It's sooooo simple. The states need to collect their own money and will do so while they are collecting the federal.

Economic Growth section

Once again it's wrong because the 65 year old retiree would still be paying a 23/30% tax on everything they buy--so it doesn't make any difference! It's really a double taxation system with either system and money already earned.


The biggest problem I have with you quoting that article is that it's so out of date. The FairTax plan had not been release when it was written, but yet the FairTax answers all of the issues brought up.

I understand your main issue is that you don't believe enough revenue will come in. The whole idea is based on the average on consumer spending over the last 10-15 years. Plus, a safe estimate of the new revenue from people who are not currently paying taxes, but should be. Looking through all the number, they click for me.

Even if the government doesn't take in enough money, isn't that good? Maybe they should learn to do with less money and stop spending it like my wife with a credit card.

Matthew

 

[krd]

If I may, Macville's argument appears to come down to the following: 1) government should be collecting less money in general, so any shortfall which results from these proposals is to be desired; 2) the tax system ought to be regressive, taking a far higher portion of disposal income, relative to means, from the poor and middle-class than the rich; 3) poverty and hardship are the result of laziness and stupidity, and therefore the poor deserve no government support; and 4) businesses shouldn't pay taxes no matter what they receive from government, and despite the loss of revenue which will result, or the shifting of the burden to individuals who don't enjoy business subsidies or share in the profits which result.

So, with these objectives in mind, it makes perfect sense to support a flat or national sales tax. But if you don't happen to like this proposed vision of America, these tax proposals, as social policy, will be repugnant. Can it get any simpler than that?

 

[Matthew Rogers]

If I may, Macville's argument appears to come down to the following: 1) government should be collecting less money in general, so any shortfall which results from these proposals is to be desired;

You don't think the government shouldn't be spending less and therefore having to take in less? I don't believe the government would actually take in less money under the FairTax to be honest.

2) the tax system ought to be regressive, taking a far higher percentage of disposal income from the poor and middle-class than the rich;

Your argument doesn't make and sense. A person who doesn't make enough money to pay any income taxes STILL pays the 23/30% hidden tax/tax prep hidden in every item they buy. Under the fair tax system that stays the same EXCEPT that they would be getting tax that they currently pay on food, clothing, and other essentials back--upto the poverty line. So actually, a poor person would come out BETTER by AT LEAST $200 a month because they are no longer paying the hidden tax on essentials. All money is going to be taxed at some point. It's just tax when YOU decide to use it. As I have figured it up with what I currently make (lower middle class) and with what I will spend, I will pay pretty much the same in taxes as I do after all my deductions. However, I will have power to determine when I will be taxed and how much.

3) poverty and hardship are the result of laziness and stupidity, and therefore the poor deserve no government support

I would say that at least 50% of the poverty here in Knox county has to do with laziness and not hardship. I have talked to many of the homeless here when I've served meals and about 60% of them have said the reason they are homeless is because they don't want to work. The 40% really are mentally ill (and that's where our government should be helping.) Heck, my uncle who hurt his back about 10 years ago can do many other jobs, but choses not to because he can get a government check each month. Is it fair for you and I to pay for his lazy butt? That is why I am in an favor of of a graduated welfare system that encourages people to get educated, get better jobs, and have some respect for themselves. I want to help people who want to help themselves. Every american should desire that kind of person and despise those who are "enjoying" the system. It's the same reason that in starving countries we are showing people how to farm and irrigate instead of just giving them food. You've got to fix the problem instead of the symptoms.

I believe that our government should be in place to protect us from evil people and help build infrastructure--not provide a ton of social services. PEOPLE should be helping people, not government. This is why Habitat for Humanity works so well. It's people helping other people who want to better their lives. Name one government program that's done anything like Habitat?

If you think I'm uptight jerk with my money and helping people...then why do I give away at least 15% of my income to help non-profits? Why do I volunteer hundreds of hours each year for non profits? Why do I give away hundreds of hours of free video services to non-profits each year? People cause people to change, not government.

businesses shouldn't pay taxes no matter what they receive from government, and despite the loss of revenue which will result.

Well, considering that business are owned by PEOPLE, and the consumer (people) pay everything in the end, why do we bother with the middle man? Businesses are taxed so you, the consumer and everyday tax payer don't realize how much you are actually paying in taxes each year. By taxing a business you are only taxing every person who buys something from them-not the business itself. I know it seems like business are faceless robots, but they are owned by people like you and me (either privately or through stock shares.)

Matthew

 

[Radoslav Karapetkov]

There should be no homeless people in a civilized society. Every human has a right to a warm bed, food and means of hygiene - for free. NOTHING MORE!, but nothing less.

If a person wants more - a better apartment, a car, going to movies, dating - he\she has to work.

But there should be no homeless people on the streets, that is not civilized.

There are plenty in my country, but it's strange that there are also a lot in a rich country like the US.

 

[Craig Ryan]

Yup, its truly unacceptable.

 

[krd]

We could argue about what government spending should be -- it's probably obvious by now I believe in activist government. But it seems dishonest for you to be saying that these proposals won't reduce revenue, while simultaneously conceding that it would be good thing if they did. A bit too coy, no?

Every analysis of these proposals I've seen indicates that the top 10% would get large tax cuts, and the remaining 90% would see increases. I call that regressive taxation. You can argue until you're blue in the face about what portion of retail prices reflect an invisible tax on the poor, but in doing so, you seem to have jettisoned a prime free-market principle: competition. Clearly, if American businesses have to compete, particularly with foreign products, they aren't at liberty to pass these costs on to consumers (unless they're monopolies). Isn't that supposed to be the wonder of the free market? Besides, a lot of American businesses, including highly profitable ones, pay no taxes at all, or pay negative tax. This doesn't seem to reduce their prices.

As for business taxation, this idea that consumers pay "hidden" businesses taxes may be applicable for some simple transactions, but it's wholly inadequate in dealing with a modern industrial economy. There are a million ways to hide business income from individual taxation. And in some cases the only customer the business has is the government. The only sure result of eliminating business taxes would be to greatly reduce tax revenues, and make the rich richer. If the revenue has to be found elsewhere, it will impoverish the middle-class.

Anyway, I've said my last. I don't have the stamina of your former debating partner.

 

[Matthew Rogers]

There should be no homeless people in a civilized society. Every human has a right to a warm bed, food and means of hygiene - for free. NOTHING MORE!, but nothing less.

If a person wants more - a better apartment, a car, going to movies, dating - he\she has to work.

But there should be no homeless people on the streets, that is not civilized.

There are plenty in my country, but it's strange that there are also a lot in a rich country like the US.

See, this is where I, and seems like many people on this board, differer from. I believe the only rights every human have are, life until you die naturally, to practice your religion (as long as you don't physically harm other people.), and to find a way to feed yourself.

All those things you mention are exactly what any of the homeless here in my town can get. Because they have all they want they don't bother to work. BUT...they are causing people like me who volunteer time to help them to take it away from someone else who actually, truly needs help.

What you have suggested is actually socialism. So far it hasn't work and I doubt it will ever work. Any system will only work as far as there are honest people (which is WHY socialism doesn't work.) Remember, life ISN'T FAIR! I wish it was, but it's not

Matthew

 

[Gavin Greenwalt]

If I may, Macville's argument appears to come down to the following: 1) government should be collecting less money in general, so any shortfall which results from these proposals is to be desired; 2) the tax system ought to be regressive, taking a far higher portion of disposal income, relative to means, from the poor and middle-class than the rich; 3) poverty and hardship are the result of laziness and stupidity, and therefore the poor deserve no government support; and 4) businesses shouldn't pay taxes no matter what they receive from government, and despite the loss of revenue which will result, or the shifting of the burden to individuals who don't enjoy business subsidies or share in the profits which result.

So, with these objectives in mind, it makes perfect sense to support a flat or national sales tax. But if you don't happen to like this proposed vision of America, these tax proposals, as social policy, will be repugnant. Can it get any simpler than that?

There we go. Matthew finally came out and said it. (While he's not certain it'll happen.) It really doesn't matter if it's regressive, ends business taxes and results in cuts to social services because the poor are just lazy and need a swift conservative kick in the ass.

As I've been saying all along. This is "trickle down" "tax cuts spur economic growth to the point of increasing tax revenue to pay for them" etc etc etc. The same bullshit that has been tried over and over and over and over and over and over and hasn't worked. "The Economy is hot! Tax Cuts" "The economy is slowing! Tax Cuts!" "The Economy is picking up steam! Tax Cuts". It's the magic band aid that does nothing but good for economy! It makes our economy unstoppable. It'll pay for itself! (It'll pay for itself is interestingly enough the Iraq war cry.) With the Republican party no matter what you do it'll pay for itself!

If we want to reform welfare we need to reform welfare. If we need to balance our budget we need to balance our budget.

The funny thing about this is if the solution to getting people off welfare was a huge increase in the welfare budget something tells me a lot less conservatives would be saying "let's give them that incredibly expensive kick in their lazy butts."

Don't patronize me with "I care about the poor that's why I believe in giving myself a tax break." Jazz. You want tax cuts. You want to pay less. You want smaller government. Damn the consequences.


We fundamentally view wealth differently. If you have enough to buy a private Jet... and there are still people starving. I honestly don't give a shit if I tax you 50%. It's a question of personal responsibility. It's the moral obligation of those who have the means to take care of those who are struggling to survive.

There'll still be poor and there'll still be rich but there'll be a minimum level standard of living that we aspire to ensure. We're all the product of our upbringing and genetics. Even the 'lazy' 'stupid' 'poor' ones. We are the product of happenchance and circumstance. We can inspire people to make more of themselves and we can work to educate and motivate but it's going to take a lot more work than just giving them food stamps and serving them soup on saturday.

 

[Gavin Greenwalt]

What you have suggested is actually socialism. So far it hasn't work and I doubt it will ever work. Any system will only work as far as there are honest people (which is WHY socialism doesn't work.) Remember, life ISN'T FAIR! I wish it was, but it's not

Matthew

Actually socialism is working beautifully around the world right now. I think you're thinking of communism which hasn't worked...

If being rich is so terrible. Don't aspire to be rich! It sounds very much like despite even the current obstacles to wealth you're still pretty motivated to succeed. If I had the option right now between making $50k @ 25% taxes and $200,000 a year at 50% I would choose $200,000!

Bill Gates or Warren Buffet are very smart guys and very deserving guys. But to say that they're 10Billion times more worthy individuals is a bit rediculous (and both of them acknowledge that). Capitalism breaks down at the extremes. There are always going to be outliers (dentists for instance who are about as lazy as those people you see along the side of the road but make a rediculous amount of money. (Note this is what my dentist friends tell me.))

Clinton raised taxes and the economy surged. Bush lowered taxes and the economy plunged. Bush lowered taxes again and the economy picked up. Bush didn't adjust taxes and the economy came back up! Theoretically tax cuts make sense. In practice our economy is so complex and diverse historically they've had no long term effects.

 

[Matthew Rogers]

We could argue about what government spending should be -- it's probably obvious by now I believe in activist government. But it seems dishonest for you to be saying that these proposals won't reduce revenue, while simultaneously conceding that it would be good thing if they did. A bit too coy, no?

I said it would be a good thing, but that I didn't believe that it would. There nothing dishonest or coy about that!

Every analysis of these proposals I've seen indicates that the top 10% would get large tax cuts, and the remaining 90% would see increases. I call that regressive taxation.

How am I going to be paying more tax if I take home all my pay, everything is the same price and I get at least a $200 check each month? The rich spend ALOT of money on new products and services (well, the middle class spends more than we should) and because they do, will be taxed accordingly.

You can argue until you're blue in the face about what portion of retail prices reflect an invisible tax on the poor, but in doing so, you seem to have jettisoned a prime free-market principle: competition. Clearly, if American businesses have to compete, particularly with foreign products, they aren't at liberty to pass these costs on to consumers (unless they're monopolies). Isn't that supposed to be the wonder of the free market? Besides, a lot of American businesses, including highly profitable ones, pay no taxes at all, or pay negative tax. This doesn't seem to reduce their prices.

So are you saying that most businesses in america aren't passing on their business taxes to their customers? Somehow I highly doubt that. Besides, all those foreign products sitting on our shelves will be hit with the fair tax (which, I believe, most are not getting hit with any tax because of our free trade deals.) Where did you get the information that those businesses aren't paying any tax? I doubt that, and would love to see tax returns, proof, etc. that backs that statement up.

As for business taxation, this idea that consumers pay "hidden" businesses taxes may be applicable for some simple transactions, but it's wholly inadequate in dealing with a modern industrial economy. There are a million ways to hide business income from individual taxation. And in some cases the only customer the business has is the government. The only sure result of eliminating business taxes would be to greatly reduce tax revenues, and make the rich richer. If the revenue has to be found elsewhere, it will impoverish the middle-class.

Yes, under the current system it's easy to hide income. However, the FairTax is trying to make things simple so cheaters will be easy to spot.

I'm already paying 55% tax on every item I buy at the retail level once you figure in my Federal, SS, FICA, and hidden business taxes. There's no way that I would be paying a higher % than 23% with the FairTax. I'm lower middle class remember.....

I would suggest you actually read (well, listen to, it's much better with Neil Bortz side comments) the FairTax book. When you have questions about it, then read their new book that answers all the questions.

Matthew


Anyway, I've said my last. I don't have the stamina of your former debating partner.[/QUOTE]