Fair Tax

[Whoozyerdaddy]

Originally posted by: HomerJS
I like the basic premise except the "Prebate check". Instead of spending more money issuing checks do the following.

Exemptions...
Unprepaired food (grocery store)
Clothing with a cap (i.e. fur coats)
Necessary medical
Auto with a cap
Housing (buy or rent) with cap

Since the poor spend the overwelming majority of disposal income on these items they are covered.

The point is they are covered for those expenses with the pre-bate check. Everyone on here seems to want to drag teh filthy rich into this so I will too... Imagine some gazillionaire wants to throw a party and buys $20,000 of food for his party. He won't pay one penny of tax on that.

All the rest of the items on your list already have an embedded tax built into their cost RIGHT NOW anyway. Poor people are paying this embedded tax right now. Switching the collection method doesn't change the price of these items. (Actually, medical care currently carries a 26% embedded tax so the sales tax would actually lower these costs) It only changes the method by which these taxes are collectred.

By eliminating the payroll tax poor people lose their biggest tax liability and get their entire paycheck. Then they get the prebate check. It's absolutely fair. It puts them in a position to start saving! Think about it. It'a a great deal for them.

Once congress starts creating an exemption here and an exemption there where do they stop? Every lobby group in the country will want their product exempted. Then what? In order for it to work you have to tax everything without exception.

 

[Dissipate]

Originally posted by: Whoozyerdaddy


Once congress starts creating an exemption here and an exemption there where do they stop? Every lobby group in the country will want their product exempted. Then what? In order for it to work you have to tax everything without exception.

Exactly. It is going to end up as confusing as the income tax code eventually, once the exemptions start up.

It doesn't matter what tax it is: income tax, sales tax, flat tax, VAT... The question is does Uncle Sam own your working life? I would say no. Hence, we need to do away with the income tax and payroll taxes entirely and NOT replace them with anything else. The government already brings in billions of dollars of revenue from other sources.

 

[Whoozyerdaddy]

Originally posted by: Dissipate

Originally posted by: Whoozyerdaddy


Once congress starts creating an exemption here and an exemption there where do they stop? Every lobby group in the country will want their product exempted. Then what? In order for it to work you have to tax everything without exception.

Exactly. It is going to end up as confusing as the income tax code eventually, once the exemptions start up.

It doesn't matter what tax it is: income tax, sales tax, flat tax, VAT... The question is does Uncle Sam own your working life? I would say no. Hence, we need to do away with the income tax and payroll taxes entirely and NOT replace them with anything else. The government already brings in billions of dollars of revenue from other sources.

Unfortunately the government isn't spending billions.. they are spending trillions. I'm with you. In a perfect world we'd eliminate the waste and redundancy that exists in the system now (thus killing 1/3 of the budget) and move toward smaller, cheaper government.

We don't live in that world. The first step toward that goal however is to put people's tax burden right in front of their face. Show them just how much the government costs them every day. Without that most people will never wake up.

Witholding is the bigget scam ever. Our current system will never get ri of it. The flat tax won't either.

 

[ToeJam13]

Originally posted by: 5LiterMustang
Low income folks still pay ZERO taxes because everyone has the same deductions. Thats the beauty of the flat tax. Its not an annoyance for a rich person its money lost, taken by the government. Money they could just as easily create economic growth with, in fact more than others the upper class create jobs, wealth, and capital.

I agree on the loophole stuff too...loopholes are ridiculous something that would be eliminated with a flat tax.

But they aren't paying zero tax. They pay sales tax, car tab taxes, and if homeowners, property tax. They pay use taxes on phones and TV.

Even with tax credits, they may end up paying taxes overall.

 

[Whoozyerdaddy]

Originally posted by: ToeJam13

Originally posted by: 5LiterMustang
Low income folks still pay ZERO taxes because everyone has the same deductions. Thats the beauty of the flat tax. Its not an annoyance for a rich person its money lost, taken by the government. Money they could just as easily create economic growth with, in fact more than others the upper class create jobs, wealth, and capital.

I agree on the loophole stuff too...loopholes are ridiculous something that would be eliminated with a flat tax.

But they aren't paying zero tax. They pay sales tax, car tab taxes, and if homeowners, property tax. They pay use taxes on phones and TV.

Even with tax credits, they may end up paying taxes overall.

And they pay embedded tax on every purchase they make.

 

[Stunt]

Originally posted by: 5LiterMustang
By its very nature progressive taxes are the least fair...why?

Because the harder you work, the more you contribute to society and to our economy they higher percent of your money you have to give to the government.

For example
One of my best friends makes 22k a year, not much money I think we'd all agree, his tax bill each year is 0, in fact he gets back money. Not necessarily a bad thing he does have a kid and 22k a year doesn't cut it. So he's got a negative tax rate

I make 50k a year, and pay roughly 5k/yr in taxes, or 10% of my income, I dont get money back, I dont usually get a refund

My uncle makes 125k/yr he pays roughly 30k/yr in federal taxes...not on ALL of this it is just INCOME taxes, not SS or medicare deductions...

now why should my uncle have to pay roughly 25% of his income in taxes?

Lets assume everyone here is single...

My best friend pays -10% in taxes because he usually gets back about 2k in addition to his money he paid in throughout the year.
I wind up paying about 9065 or almost 20% of my income

My uncle winds up paying 29569 or 25% of his income

Now a theortical person making 500,000 yr would pay 155532.50 or 31% of his income...

Why does it do this? because of a progressive tax, every dollar that my uncle makes above 71k he gets taxed 28% on. Every dollar the guy making 500k makes over 326k he gets taxed 35%...this is ridiculous and truly not fair

We need set deductions for everyone of say 14k (28k married filing jointly) personal exemption and 7k child deductions. EVERYONE could claim these deductions, they're not phased out at certain income levels, they're available for everyone. The EITC could still remain in effect so lower income folks get x back each year in addition to their tax burden, this way the change in tax code wont hurt them. But this way lets say my personal exemption is 14k, and my uncles personal exemption is 14k and the guy making 500k has a personal exemption of 14k, and we have a FLAT tax of 15% we all pay 15% tax on our income ABOVE 14k. The guys making more wont get penalized for making more. They'll have incentive to work harder knowing they'll make more money.

Teh same is true for corporations. IF they know they dont have a monsterous tax bill coming at them because they made money (something business are SUPPOSED TO DO) they'll be more apt to hire people, and invest in R&D.

To start considering the term "fair" you must first understand the principles in forming this term of equality. If by fair you mean equal, then equal is always going to involve no tax, either in a communist or anarchist environment. These are the only points where tax levels are "equal".

Now fast forward to today's system; you have said in the other thread you support military spending and vote dem and rep; this displays your support for government servces and at the same time economic considerations inherent in a capitalist focused marketplace.

This environment is driven by the commodity called money, it is want we use to give tax, buy products, improve life, etc. Now many conservatives out there like to think "flat tax" is the most "fair", but no it is not. 20% of $100,000 is way more than 20% of $50,000.

So if money is determining the equation, how does money change with income? As people become more wealthy, it becomes easier for them to accumulate more wealth. Investing in the stock market (which I have no problem busting out who owns the fast majority of the shares), investing in property, etc.

In today's world where money is the commodity, a progressive tax is the only logical "fair tax".

Using your own example, your friend takes in 22K, you 50K, uncle 125k, where taxes are 0%, 10%, 30% respectivly. You and your uncle *could* and have access to all the same products as your friend. Therefore you and your uncle are able to save, invest and accumulate wealth to retire, etc. Your uncle without adding more "work", by investing can generate wealth faster than any of you two. He deserves a higher rate to be "fair".

PS. Your work incentive crap is useless dribble...the tax rates are bracketed, so if the worker works harder and longer hours, they will always make more money. It will be taxed at one rate until the new rate kicks in, and then the next dollar is at the barely larger tax rate. I have never heard of people thinking of it as a "penalty".

 

[Whoozyerdaddy]

Paying a higher tax rate for making more money = penalty

 

[Stunt]

Originally posted by: Whoozyerdaddy
Paying a higher tax rate for making more money = penalty

Reaching higher levels of wealth creates an environment where you have far more opportunity to save, invest and accumulate more wealth.

 

[Zebo]

I can't believe people think we have progressive taxes. There is only one progressive tax in the united states, income.. all other taxes and fees are regressive. It's quite possible your average family making $125,000 pays more in taxes as a percentage than Bill Gates/Waldens and other billionaires-- since he only pays 10% on LTCG when he sells billions in stock. He pays no SS, no Medicare or income tax on this stock sales.. while Jane and john doe do pay them on thier wage income.


Look up "tax incidence" in any search engine and you'll find taxes are already for the most part FLAT.

So why do we need to change anything?

 

[Whoozyerdaddy]

Originally posted by: Stunt

Originally posted by: Whoozyerdaddy
Paying a higher tax rate for making more money = penalty

Reaching higher levels of wealth creates an environment where you have far more opportunity to save, invest and accumulate more wealth.

That's true. But a higher tax rate is still a penalty against success.

 

[Zebo]

Paying a higher tax rate for making more money = penalty

We don't tax people, we tax dollars. In other words President Bush and me pay the same taxes on 15,000, 35,000, 55,000, 120,000 etc.

Besides you're arguement is beyond silly. Are you telling me you're going to turn down $333,000 because it suddenly put your earnings after that in the highest bracket? Pfft. Then everyone would be looking for jobs that kept them in the lowest bracket ~ 15K right? Why is'nt this so if it's such a penalty to make more money? Simple even in the highest backet, getting 65% of a dollar is better than 0% of a dollar. I have yet to meet a person not want a raise or more sales because it put them in the higher bracket..so much for penalty.

 

[Stunt]

"penalty" argument is totally bogus.

 

[Whoozyerdaddy]

Originally posted by: Zebo

Paying a higher tax rate for making more money = penalty

We don't tax people, we tax dollars. In other words President Bush and me pay the same taxes on 15,000, 35,000, 55,000, 120,000 etc.

Besides you're arguement is beyond silly. Are you telling me you're going to turn down $333,000 because it suddenly put your earnings after that in the highest bracket? Pfft. Then everyone would be looking for jobs that kept them in the lowest bracket ~ 15K right? Why is'nt this so if it's such a penalty to make more money? Simple even in the highest backet, getting 65% of a dollar is better than 0% of a dollar. I have yet to meet a person not want a raise or more sales because it put them in the higher bracket..so much for penalty.

Good lord... How did you get that out of what I posted? Of course you want to make more regrdless of that tax rate. But it doesn't change the fact that you are penalized with a higher rate for doing so.

 

[Zebo]

It's generally accepted once you can pay the basic needs of life- such as shelter, food etc taxes are leveied on the excess above that. Is it fair? Seems equitable to me. In fact seems like the only way since you can't get blood from a stone. At least 60% of americans are stones when it comes to income -- making not enough to even pay a dime in income tax.

 

[ToeJam13]

Originally posted by: Zebo
I can't believe people think we have progressive taxes. There is only one progressive tax in the united states, income.. all other taxes and fees are regressive. It's quite possible your average family making $125,000 pays more in taxes as a percentage than Bill Gates/Waldens and other billionaires-- since he only pays 10% on LTCG when he sells billions in stock. He pays no SS, no Medicare or income tax on this stock sales.. while Jane and john doe do pay them on thier wage income.

Exactly. Our sales tax is regressive since it is a flat rate for all purchases. A sales tax doesn't care if you're buying a $4 box of diapers or a $4000 plasma television. You pay x% of that sale as taxes.

Some would argue that it's a fair way to have the system since the rich would pay more tax since their items are more expensive.

I agree to a point. They do pay more tax since their purchases are more. However, they also have much, much more disposable income. Furthermore, wealth builds wealth, so they have an automatic advantage of earning more income long term through investments and savings.

So again the question comes back: where is the line between being more of an equitable chunk versus wealth redistribution? Should the rich be taxed in such a way that it pinches as do sales and exise taxes do to the poor today? Should everyone be on a more even playing field by eliminating all deductions? Should the tax rate for upper income be nearly the same as that of moderate income, or should it be much higher?

 

[Merovingian]

BAD economics all the way around. You need to tax the rich more. It would totally screw the economy not to redistribute the weath to some degree. BAD! I think taking away the ability for the government to stimulate certain parts of the population or economy is a bad idea. This libertarian free market/everybody is equal is simply a economic disaster to anybody who knows economics or politics at an advanced level. It wouldn't vote and it wouldn't work if it did. Libertarian pipe dream is to have flat tax, unregulated markets, etc. sounds great and it's economic suicide. Eitherway, the most effective way to pull off convincing the population to vote against their own best interest is to sell them a little god and restrict some social freedoms. Cough, attention all libertarians, the republican party is already selling god in exchange for economic benefit. It's all a little silly really, I mean how else are you going to convince the masses to vote against their own economic best interest?

 

[Bowfinger]

Originally posted by: Whoozyerdaddy
Paying a higher tax rate for making more money = penalty

Not in the least. Taxes are NOT a "penalty". Much like a nice club, taxes are the dues one pays for membership. In general, the people who pay the greatest dues also receive the greatest benefits. Also like a club, membership is optional. Someone who feels the dues are too high can join a different club, i.e., move to another country with lower dues. Of course doing so means sacrificing some of the amenities and opportunities one takes for granted in the U.S., but life is a series of choices.

In a sense, taxes are an example of the free market at work. Set your taxes too high, and you lose customers, i.e., taxpayers, to your competitors. Cut your taxes too low -- cutting services and infrastructure to match -- and you lose customers who are willing to pay more for a better product. Unless the rich start fleeing the country to escape high dues, it seems obvious taxes are not too high at all.

(On a side note, I've always found it fascinating that the people who whine the most about "high" taxes on the rich are not themselves rich, but rich wanna-be's. They mostly seem to be people who think they could be rich too, if only "high" taxes weren't in the way. They're kidding themselves, of course, but they are useful tools for the greedy elite who have figured out how subsidize their bread and circuses from the pockets of the serfs.)

 

[Whoozyerdaddy]

Originally posted by: Bowfinger

Originally posted by: Whoozyerdaddy
Paying a higher tax rate for making more money = penalty

Not in the least. Taxes are NOT a "penalty". Much like a nice club, taxes are the dues one pays for membership. In general, the people who pay the greatest dues also receive the greatest benefits. Also like a club, membership is optional. Someone who feels the dues are too high can join a different club, i.e., move to another country with lower dues. Of course doing so means sacrificing some of the amenities and opportunities one takes for granted in the U.S., but life is a series of choices.

In a sense, taxes are an example of the free market at work. Set your taxes too high, and you lose customers, i.e., taxpayers, to your competitors. Cut your taxes too low -- cutting services and infrastructure to match -- and you lose customers who are willing to pay more for a better product. Unless the rich start fleeing the country to escape high dues, it seems obvious taxes are not too high at all.

(On a side note, I've always found it fascinating that the people who whine the most about "high" taxes on the rich are not themselves rich, but rich wanna-be's. They mostly seem to be people who think they could be rich too, if only "high" taxes weren't in the way. They're kidding themselves, of course, but they are useful tools for the greedy elite who have figured out how subsidize their bread and circuses from the pockets of the serfs.)

Did you read my explaination to your concerns about used vs. new goods under the Fair Tax?

 

[Dissipate]

Originally posted by: Bowfinger

Originally posted by: Whoozyerdaddy
Paying a higher tax rate for making more money = penalty

Not in the least. Taxes are NOT a "penalty". Much like a nice club, taxes are the dues one pays for membership. In general, the people who pay the greatest dues also receive the greatest benefits. Also like a club, membership is optional. Someone who feels the dues are too high can join a different club, i.e., move to another country with lower dues. Of course doing so means sacrificing some of the amenities and opportunities one takes for granted in the U.S., but life is a series of choices.

In a sense, taxes are an example of the free market at work. Set your taxes too high, and you lose customers, i.e., taxpayers, to your competitors. Cut your taxes too low -- cutting services and infrastructure to match -- and you lose customers who are willing to pay more for a better product. Unless the rich start fleeing the country to escape high dues, it seems obvious taxes are not too high at all.

(On a side note, I've always found it fascinating that the people who whine the most about "high" taxes on the rich are not themselves rich, but rich wanna-be's. They mostly seem to be people who think they could be rich too, if only "high" taxes weren't in the way. They're kidding themselves, of course, but they are useful tools for the greedy elite who have figured out how subsidize their bread and circuses from the pockets of the serfs.)

This guy cracks me up everytime. In Communist Russia they would have called him a "useful idiot" (i.e. someone who supports the 'cause' but really has no clue what is going on).

If this country is a 'club' and the government collects its 'dues,' tell me something. Were the men who were drafted into the Vietnam War and who came back in body bags, paying their 'dues?'

Your analogy is also deeply flawed in other places (such as how did the 'government' get the right to collect 'dues' without everyone's consent in the first place?), but I thought I would leave you with that little question.

Oh yeah. Also, I think we should get this guy a new bumper sticker that says: "Rape me again Uncle Sam, I really love it."

More on involuntary servitude

 

[5LiterMustang]

Originally posted by: Dissipate

Originally posted by: Bowfinger

Originally posted by: Whoozyerdaddy
Paying a higher tax rate for making more money = penalty

Not in the least. Taxes are NOT a "penalty". Much like a nice club, taxes are the dues one pays for membership. In general, the people who pay the greatest dues also receive the greatest benefits. Also like a club, membership is optional. Someone who feels the dues are too high can join a different club, i.e., move to another country with lower dues. Of course doing so means sacrificing some of the amenities and opportunities one takes for granted in the U.S., but life is a series of choices.

In a sense, taxes are an example of the free market at work. Set your taxes too high, and you lose customers, i.e., taxpayers, to your competitors. Cut your taxes too low -- cutting services and infrastructure to match -- and you lose customers who are willing to pay more for a better product. Unless the rich start fleeing the country to escape high dues, it seems obvious taxes are not too high at all.

(On a side note, I've always found it fascinating that the people who whine the most about "high" taxes on the rich are not themselves rich, but rich wanna-be's. They mostly seem to be people who think they could be rich too, if only "high" taxes weren't in the way. They're kidding themselves, of course, but they are useful tools for the greedy elite who have figured out how subsidize their bread and circuses from the pockets of the serfs.)

This guy cracks me up everytime. In Communist Russia they would have called him a "useful idiot" (i.e. someone who supports the 'cause' but really has no clue what is going on).

If this country is a 'club' and the government collects its 'dues,' tell me something. Were the men who were drafted into the Vietnam War and who came back in body bags, paying their 'dues?'

Your analogy is also deeply flawed in other places (such as how did the 'government' get the right to collect 'dues' without everyone's consent in the first place?), but I thought I would leave you with that little question.

Oh yeah. Also, I think we should get this guy a new bumper sticker that says: "Rape me again Uncle Sam, I really love it."

More on involuntary servitude

werd, anyone that can seriously argue higher taxes are good for the economy doesn't know economics...and comparing the country to a club is ridiculous, clubs are voluntary. Taxes are not, higher marginal rates punish those who produce the most, period, this thread is getting absurd, people can't seem to read, or grasp basic economics.

 

[Stunt]

Taxes while inhertently "worse" for the economy, there are some instances where taxes make sense as they are not money generators and ineffective distrobution of these low margin services would cripple the economy. Government is to offer services the people demand which private enterprise should not be involved for the sake of our citizens and sustainability.

 

[Whoozyerdaddy]

Originally posted by: Stunt
Taxes while inhertently "worse" for the economy, there are some instances where taxes make sense as they are not money generators and ineffective distrobution of these low margin services would cripple the economy. Government is to offer services the people demand which private enterprise should not be involved for the sake of our citizens and sustainability.

Where in the constitution does it say that government is responsible for providing services at the whim of public demand? That is not the government's job.

Edit: Now that I read it again... I'm not really sure what you were trying to say. What distribution of sevices would cripple the economy? And how does it make it less crippling for the government to do it as opposed to the private sector? The government is more efficient that the private sector? The only time the gov wins that race is when there is money to be lit on fire.

 

[Dissipate]

Originally posted by: Stunt
Government is to offer services the people demand which private enterprise should not be involved for the sake of our citizens and sustainability.

What services are those? Nothing comes to my mind.

 

[Bowfinger]

Originally posted by: Whoozyerdaddy
Did you read my explaination to your concerns about used vs. new goods under the Fair Tax?

Yes, and I'd already addressed them. Your explanation is good math but bad consumer psychology. You did not address either real-world example I gave of people shifting their buying patterns for far less than 23%: bootlegging of cigarettes and shopping on-line to avoid much more moderate sales taxes. Lacking a controlled environment where we can better test our competing theories, all we can do at this point is agree to disagree.

You also didn't address anything I said about your taxes == penalty theory.

 

[Stunt]

Safety Regulation, Roads, Traffic management, Drinking Water, Military, Border Patrol, Policing, Fire Protection.

And for the more compassionate: Adequate Healthcare, Schooling for those not born into fiscally sound families.