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Turd_Ferguson
4/14/2008, 11:40 AM
What say you?:pop:

SoonerInKCMO
4/14/2008, 11:41 AM
Improperly named. Regressive taxes aren't fair.

shaun4411
4/14/2008, 11:44 AM
shaun1144 is all about the fair tax.

soonerscuba
4/14/2008, 11:51 AM
Good luck with that whole taxing the poor at a greater percentage of income than the rich game. What we need to be talking about is a manned mission to Planet Hoth for the abundance of snow-cone materials, each are equally likely to happen.

Turd_Ferguson
4/14/2008, 12:21 PM
Good luck with that whole taxing the poor at a greater percentage of income than the rich game. What we need to be talking about is a manned mission to Planet Hoth for the abundance of snow-cone materials, each are equally likely to happen.

Taxing the poor at a greater percentage of income than the rich......hmmm. So, if you have a dollar, and I have fitty cent, and we both buy something for a quarter, then I got screwed:confused:

sooner_born_1960
4/14/2008, 12:45 PM
Quit putting things in their proper perspective.

shaun4411
4/14/2008, 01:02 PM
i asy, no more income tax, period. just tax consumption and dont give tax breaks to billion dollar corporations. if you want a break on prices, negotiate with the one youre buying it from. prices may even drop a small bit because it suddenly becomes cheaper to sell (no tax on that income). with that in mind, maybe americans would be better spenders (get us out of the national average of $8000 in credit card debt) because 23% more for every thing you buy isnt worth charging to buy something you dont really need.

SoonerInKCMO
4/14/2008, 01:09 PM
Taxing consumption at a rate that would provide tax revenues equivalent to what is collected now would push a large proportion of commerce to the black market. Also, for better or worse, our financial markets are built on the premise of an ever expanding economy; taxing consumption would drive the wrong kind of behavior for economic growth. No growth -> plummeting stock values -> bad.

Ike
4/14/2008, 01:19 PM
What I really love is the slight of hand the fair taxers use to convince you that a 30% tax is a 23% tax.

soonerscuba
4/14/2008, 02:22 PM
Taxing the poor at a greater percentage of income than the rich......hmmm. So, if you have a dollar, and I have fitty cent, and we both buy something for a quarter, then I got screwed:confused:
No, because it assumes that income equivalent tax (in this case a national sales tax) is the only tax that one pays and ignores state and local. Think about it this way if a gallon of milk is $1.30 with 11% worth of state and local in addition to the national tax and you make $10,000/y if your neighbor makes $100,000/y, a greater percentage of your income is spent on tax, thus making it regressive. I'm not saying the current tax system is just, but at minimum it at least tries not to spit in the face of the poor. Also, the administrative costs for this gamble of a scheme would be astronomical, not to mention the reformulation and training of the agency that writes the monthly redistribution checks that in no way would be ripe with fraud, and repealing the 16th amendment, and the black market influx, and the disruption of labor policies, and the stifle to expansion. The reason that it hasn't gotten far isn't because people cling to the status quo, it's because it simply isn't a very good or practical idea.

Widescreen
4/14/2008, 02:49 PM
I seriously doubt we will ever see a major overhaul of our tax system. Why? Because congress derives most of their power from being able to manipulate the tax code. They're not going to vote to give that power away.

Stoop Dawg
4/14/2008, 03:01 PM
I'm not saying the current tax system is just, but at minimum it at least tries not to spit in the face of the poor.

That's quite an understatement.

JohnnyMack
4/14/2008, 03:04 PM
What we need to be talking about is a manned mission to Planet Hoth for the abundance of snow-cone materials

Now this would be an interesting thread. We could send Dean out to hunt the Wampas.

85Sooner
4/14/2008, 03:12 PM
All over it!!!!!!!!!!!! Fair tax all the way>

Stoop Dawg
4/14/2008, 03:12 PM
Think about it this way if a gallon of milk is $1.30 with 11% worth of state and local in addition to the national tax and you make $10,000/y if your neighbor makes $100,000/y, a greater percentage of your income is spent on tax, thus making it regressive.

Your math assumes that each family is going to buy the same amount of product. Which just ain't true.

Just to make the math easy, if the tax rate is 10% and Mr. 10K/y spends ALL of his income then he'll pay 10% of his income in taxes - or $1K. If Mr. 100K/y spends ALL of his income then he'll pay 10% of his income in taxes - or $10K. So, as you can see, if they both spend ALL of their income then they both pay the SAME percentage of income on tax.

In fact, Mr. 50K/y has probably maxed out his credit cards thus spending MORE than his income and paying an even HIGHER percentage of income than Mr. 10K/y.

Oh, and as I watch my income climb higher and higher every year, I watch the percentage of taxes I pay go up and up. I keep thinking that eventually I'll hit some "magic number" where all these "tax cuts for the rich" kick in and my taxes will start going back down. All I've seen so far are "if you make more than X then your deductions may be LIMITED".

85Sooner
4/14/2008, 03:12 PM
Good luck with that whole taxing the poor at a greater percentage of income than the rich game. What we need to be talking about is a manned mission to Planet Hoth for the abundance of snow-cone materials, each are equally likely to happen.

Obviously havn't read the Bill huh.

Stoop Dawg
4/14/2008, 03:13 PM
We could send Dean out to hump the Wampas.

Careful.

85Sooner
4/14/2008, 03:16 PM
What I really love is the slight of hand the fair taxers use to convince you that a 30% tax is a 23% tax.

Call it what you want. A 1.00 item today becomes a 79 cent item and the final price is 1.02. However you recieve all of your check. No Deductions.
Those deemed poor would recieve refunds for food clothing etc.......equal to the amouny of the tax. Only newly purchased items would be taxed. No tax on used items including but not limited to cars.

soonerscuba
4/14/2008, 03:49 PM
Your math assumes that each family is going to buy the same amount of product. Which just ain't true.

Just to make the math easy, if the tax rate is 10% and Mr. 10K/y spends ALL of his income then he'll pay 10% of his income in taxes - or $1K. If Mr. 100K/y spends ALL of his income then he'll pay 10% of his income in taxes - or $10K. So, as you can see, if they both spend ALL of their income then they both pay the SAME percentage of income on tax.

In fact, Mr. 50K/y has probably maxed out his credit cards thus spending MORE than his income and paying an even HIGHER percentage of income than Mr. 10K/y.

Oh, and as I watch my income climb higher and higher every year, I watch the percentage of taxes I pay go up and up. I keep thinking that eventually I'll hit some "magic number" where all these "tax cuts for the rich" kick in and my taxes will start going back down. All I've seen so far are "if you make more than X then your deductions may be LIMITED".
That is a lot of hypotheticals. Point being, it's regressive, otherwise people wouldn't care and as great as people think it is, it's simply replacing one boondoggle with another. Also, it will never, ever, ever, ever happen. I think that there should be a license to have children, but you don't see me extolling the virtues of such as system, mainly because I am aware that it cannot, and will not ever happen.

JohnnyMack
4/14/2008, 03:50 PM
Careful.

My GIS for "hump wampa" turned up some disappointing results.

Stoop Dawg
4/14/2008, 04:34 PM
That is a lot of hypotheticals.

Perhaps, but they are more realistic hypotheticals than your "both families are only going to buy one gallon of milk with their entire income" example.


Point being, it's regressive, otherwise people wouldn't care and as great as people think it is, it's simply replacing one boondoggle with another. Also, it will never, ever, ever, ever happen. I think that there should be a license to have children, but you don't see me extolling the virtues of such as system, mainly because I am aware that it cannot, and will not ever happen.

I don't know anything about "Fairtax", I was just commenting on your faulty example.

I think all males should be "fixed" at birth and then have to pay to get it reversed if/when they want to have children. If you can't afford the minor surgery to get it reversed then you certainly can't afford to have a kid. That idea will never, ever fly either - but that doesn't make it a bad idea.

soonerscuba
4/14/2008, 04:48 PM
Perhaps, but they are more realistic hypotheticals than your "both families are only going to buy one gallon of milk with their entire income" example.



I don't know anything about "Fairtax", I was just commenting on your faulty example.
I think that you are missing my example. I'm not saying that everybody spends all of their money on one item, just that if you impose a national flat tax, state and local taxes don't go away. And all things being equal, people who make less money will give a higher percentage in the form of tax because a gallon of milk or butter or anything else cost the same no matter how much you make. Unless, you have a rebate system, which would be even more of a boondoggle than the IRS because instead of dealing with professional services associate with the top 5% of wage earners, you start dealing with local yahoos who are out to fleece the system. The net gain simply isn't worth it in my opinion even if everything went off without a hitch.

Stoop Dawg
4/14/2008, 05:27 PM
I think that you are missing my example. I'm not saying that everybody spends all of their money on one item, just that if you impose a national flat tax, state and local taxes don't go away.

So state and local sales taxes are already "regressive". No change there.


And all things being equal, people who make less money will give a higher percentage in the form of tax because a gallon of milk or butter or anything else cost the same no matter how much you make.

One more time: The percentage of income that would go to taxes depends on how much a person SPENDS, not how much they EARN. If spending is limited to a single gallon of milk, then you are absolutely correct - the person who makes less money pays a higher percentage of income. However, if the person who makes more money also goes out and buys a brand new F150 and the person who makes less goes ahead drives his old beater (i.e. his two year old F150), now what happened to those percentages?

Your assumption in comparing Mr. 10K/yr and Mr. 100K/yr is that they will both spend 10K/yr. I say your assumption is wrong.

I'm not advocating "Fair Tax" or "National Sales Tax" or anything else. I happen to agree with you that it would get fubar just like the current system. Hillary would be proposing bills that raise taxes on "luxury" items (like your brand new F150) and right-wing nut jobs would be imposing a new "sin tax" every time you turn around. Then we would need rebates for people below a certain income level for certain purchases, and based on number of children, but not if it's a "business" expense, unless it's for a non-profit, or maybe a farm, but not railroad, but maybe utility as long as it's not internet. Blah, blah, blah, blah.

soonerscuba
4/14/2008, 05:33 PM
So state and local sales taxes are already "regressive". No change there.



One more time: The percentage of income that would go to taxes depends on how much a person SPENDS, not how much they EARN. If spending is limited to a single gallon of milk, then you are absolutely correct - the person who makes less money pays a higher percentage of income. However, if the person who makes more money also goes out and buys a brand new F150 and the person who makes less goes ahead drives his old beater (i.e. his two year old F150), now what happened to those percentages?

Your assumption in comparing Mr. 10K/yr and Mr. 100K/yr is that they will both spend 10K/yr. I say your assumption is wrong.

I'm not advocating "Fair Tax" or "National Sales Tax" or anything else. I happen to agree with you that it would get fubar just like the current system. Hillary would be proposing bills that raise taxes on "luxury" items (like your brand new F150) and right-wing nut jobs would be imposing a new "sin tax" every time you turn around. Then we would need rebates for people below a certain income level for certain purchases, and based on number of children, but not if it's a "business" expense, unless it's for a non-profit, or maybe a farm, but not railroad, but maybe utility as long as it's not internet. Blah, blah, blah, blah.
Ah, I think that you are assuming what is likely, while I am assuming certainty of price per item. Yes, one who makes more is much more likely to spend more money, I just don't think that is a proper basis to set tax policy. And you are right about sin and luxury tax, I would be curious as to what would happen to the price of a pack of smokes in a sales tax environment.

Harry Beanbag
4/14/2008, 05:34 PM
I'm all for any system that will result in less of my money going to the government to be wasted.

olevetonahill
4/14/2008, 05:45 PM
Is this another Smart people Only thread ?
If so Can I have the rest of My crayons ?

Harry Beanbag
4/14/2008, 07:12 PM
Here ya go vet, I think there's a pink one in there for you. :)

http://flatographics.com/images/how_11.jpg

shaun4411
4/14/2008, 07:45 PM
Here ya go vet, I think there's a pink one in there for you. :)

http://flatographics.com/images/how_11.jpg

that smells realy good

shaun4411
4/14/2008, 07:53 PM
all i know, is that i am glad i dont live in europe where income taxes are ~15-20% more for my income bracket, and the VAT makes consumption ~10% more than it is here. so i am saving ~30% of my money just by being an american, in america. that more than covers the extra-cirricular costs such as health insurance that i wouldnt pay if i were a frenchman.

olevetonahill
4/14/2008, 10:09 PM
Here ya go vet, I think there's a pink one in there for you. :)

http://flatographics.com/images/how_11.jpg

Now I can draw the Pinko libs , Yea , Harry you da man :D

SoonerBBall
4/15/2008, 01:13 PM
What I really love is the slight of hand the fair taxers use to convince you that a 30% tax is a 23% tax.

I really like how you have no idea what the difference between an exclusive and an inclusive tax is.

Here's a hint, your income tax is calculated as an inclusive tax, like the FairTax. State sales taxes are calculated as an exclusive tax.

Do some research before you come over here and spew your ignorance.

SoonerBBall
4/15/2008, 01:15 PM
Ah, I think that you are assuming what is likely, while I am assuming certainty of price per item. Yes, one who makes more is much more likely to spend more money, I just don't think that is a proper basis to set tax policy. And you are right about sin and luxury tax, I would be curious as to what would happen to the price of a pack of smokes in a sales tax environment.

Why don't you think it is a proper basis to set tax policy? Go do some research, the rate of consumption in this country has been far more stable throughout history than the rate of income.

sooneron
4/15/2008, 01:29 PM
I really like how you have no idea what the difference between an exclusive and an inclusive tax is.

Here's a hint, your income tax is calculated as an inclusive tax, like the FairTax. State sales taxes are calculated as an exclusive tax.

Do some research before you come over here and spew your ignorance.

Wow, classy.

SoonerBBall
4/15/2008, 01:34 PM
Wow, classy.

Well, when you take a shot at something you clearly don't understand, you kind of open yourself up for it. Are you trying to act like his original comment was some bastion of class and tact?

sooneron
4/15/2008, 01:36 PM
Dude, where is the shot being taken? Your reading comprehension sucks, as do your manners.

Ike
4/15/2008, 01:36 PM
I really like how you have no idea what the difference between an exclusive and an inclusive tax is.

Here's a hint, your income tax is calculated as an inclusive tax, like the FairTax. State sales taxes are calculated as an exclusive tax.

Do some research before you come over here and spew your ignorance.

See I know the difference. But when you are selling a national sales tax, (oh, I'm sorry, a consumption tax) nobody in their right mind is going to think of it as an inclusive tax. There's a cost of an item, and then there's the tax thats tacked on at the end. People will be paying 30% more than they would without the tax. Thats the math that people understand about sales taxes. Why switch it around if not for the purposes of trying to sell the lower number?

Widescreen
4/15/2008, 01:44 PM
I really like how you have no idea what the difference between an exclusive and an inclusive tax is.

Here's a hint, your income tax is calculated as an inclusive tax, like the FairTax. State sales taxes are calculated as an exclusive tax.

Do some research before you come over here and spew your ignorance.

"Things I wouldn't say to your face in real life".

Appropriate avatar.

shaun4411
4/15/2008, 02:06 PM
See I know the difference. But when you are selling a national sales tax, (oh, I'm sorry, a consumption tax) nobody in their right mind is going to think of it as an inclusive tax. There's a cost of an item, and then there's the tax thats tacked on at the end. People will be paying 30% more than they would without the tax. Thats the math that people understand about sales taxes. Why switch it around if not for the purposes of trying to sell the lower number?

give it time. it works in europe. you see price, thats the price you pay. nothing on top of it. that would be nice. sure, things would cost more, but then again, some prices would go down because companies are saving money by not being taxed on that income.

SoonerBBall
4/15/2008, 02:08 PM
See I know the difference. But when you are selling a national sales tax, (oh, I'm sorry, a consumption tax) nobody in their right mind is going to think of it as an inclusive tax. There's a cost of an item, and then there's the tax thats tacked on at the end. People will be paying 30% more than they would without the tax. Thats the math that people understand about sales taxes. Why switch it around if not for the purposes of trying to sell the lower number?

Sorry about my tone earlier, this is just an issue I get worked up about and I posted in haste.

The reason it is calculated inclusively is so the price an item is listed at is the price you pay at the register, no taxes added on at the end because they are already included in the price. Besides, there isn't a FairTax supporter with any knowledge that will deny the way the tax is calculated. Regardless, it is still less than the government is taking now and far more transparent.

soonerscuba
4/15/2008, 02:18 PM
Why don't you think it is a proper basis to set tax policy? Go do some research, the rate of consumption in this country has been far more stable throughout history than the rate of income.
Why don't you try not to be a ******nozzle? Why don't you go do some research on how to interact with people and not make an *** of yourself?

Ike
4/15/2008, 02:24 PM
Sorry about my tone earlier, this is just an issue I get worked up about and I posted in haste.

The reason it is calculated inclusively is so the price an item is listed at is the price you pay at the register, no taxes added on at the end because they are already included in the price. Besides, there isn't a FairTax supporter with any knowledge that will deny the way the tax is calculated. Regardless, it is still less than the government is taking now and far more transparent.

See, I'd make the argument that calculating the tax inclusively is actually less transparent when you consider the whole of the transaction (clarification...still more transparent than it is now, less transparent than it would be if it were calculated exclusively). I'll grant you that it does make the calculation for the consumer somewhat easier. But then you get into the sticky problem of state sales taxes. Lets take the situation where the sticker price of an item is 1.00. Now you add in the state sales tax of 10% or whatever that number is so that you pay 1.10. Without a national sales tax, thats all fine and dandy and we understand where our money is going and why. But consider then the case of a 1.00 item in the regime of a national sales tax. Does the state sales tax get added to the sicker price (1.00) or the price without a national sales tax(.77)? Should people really have to pay tax on a tax (if the sales tax gets added to the 1.00? I'm sure most states will mandate it that way, because they do everything they can to ensure they get the most of your money that they can. But paying a tax on a tax ain't right...

and yes, I know we already do that now sort of, since overall business taxes are built into the cost of an item...but with the way it is now, it's obfuscated enough that you really have to look hard to determine how much tax on a tax you are really paying...and since people don't want to look very hard at things, most generally ignore it. But if we change the way it's going to be, that problem will be more apparent to people....


All I'm saying is, it seems like it's more trouble than it's worth to calculate the tax inclusively rather than exclusively, and the only reason I can think of to take on that trouble is for the ease of mind that comes with a lower number. The sticker price thing can easily be worked around by simply putting two prices on the sticker...the actual cost, and the tax.

yermom
4/15/2008, 02:27 PM
eBay would get HUGE

how would you handle retail internet sales from other countries?

would you get a rebate on food, etc... or just not have to pay?

seems like anything you could buy with food stamps should just be exempt, for example

SoonerInKCMO
4/15/2008, 02:35 PM
Meh, I'm loaded so I don't care.

;)

Ike
4/15/2008, 02:37 PM
give it time. it works in europe. you see price, thats the price you pay. nothing on top of it. that would be nice. sure, things would cost more, but then again, some prices would go down because companies are saving money by not being taxed on that income.

If thats the case, I can't see how republicans would ever support such a thing. In Europe, that works just fine for them because people don't care about how much of their money goes to the government...Because in the end, it's pretty much all of it. So having the sticker price being equal to what you pay at the register is a nice convienence. If our method of taxation went to an inclusive sales tax, I would think that it would help foster an attitude of not caring how much of your money is going to the government among people here, which would give them free reign to raise taxes little by little until we are essentially europeans.

;)

SoonerInKCMO
4/15/2008, 02:41 PM
Would we get to work 35 hours a week and get seven weeks of vacation then?

shaun4411
4/15/2008, 02:42 PM
dont get me wrong, i am not a big fan of all those taxes. our forefathers would laugh at us for all the tax we pay, on every little damn thing. but i would really be an avid proponent of a consumption-in-lieu-of-income-tax. over there, they pay a 19% VAT, AND 30-40% income. we would be going into that range if the dems get their way. national healthcare and all that. its expensive, and we'd end up paying for it. nothing is really free.

yermom
4/15/2008, 02:42 PM
Would we get to work 35 hours a week and get seven weeks of vacation then?


we're all gonna be teachers?

SoonerInKCMO
4/15/2008, 02:42 PM
'Cuz that'd be sweet.


eta: That's the 35 hours/7 weeks thing being sweet - not the teacher thing. Having to deal with punk-*** little kids would make 35 hours seem like 70. :D

shaun4411
4/15/2008, 02:43 PM
theyre actually paid kind of well in missouri. a lot of 'em make $50k+, but require a masters degree.

SoonerBBall
4/15/2008, 02:45 PM
See, I'd make the argument that calculating the tax inclusively is actually less transparent when you consider the whole of the transaction (clarification...still more transparent than it is now, less transparent than it would be if it were calculated exclusively). I'll grant you that it does make the calculation for the consumer somewhat easier. But then you get into the sticky problem of state sales taxes. Lets take the situation where the sticker price of an item is 1.00. Now you add in the state sales tax of 10% or whatever that number is so that you pay 1.10. Without a national sales tax, thats all fine and dandy and we understand where our money is going and why. But consider then the case of a 1.00 item in the regime of a national sales tax. Does the state sales tax get added to the sicker price (1.00) or the price without a national sales tax(.77)? Should people really have to pay tax on a tax (if the sales tax gets added to the 1.00? I'm sure most states will mandate it that way, because they do everything they can to ensure they get the most of your money that they can. But paying a tax on a tax ain't right...

and yes, I know we already do that now sort of, since overall business taxes are built into the cost of an item...but with the way it is now, it's obfuscated enough that you really have to look hard to determine how much tax on a tax you are really paying...and since people don't want to look very hard at things, most generally ignore it. But if we change the way it's going to be, that problem will be more apparent to people....


All I'm saying is, it seems like it's more trouble than it's worth to calculate the tax inclusively rather than exclusively, and the only reason I can think of to take on that trouble is for the ease of mind that comes with a lower number. The sticker price thing can easily be worked around by simply putting two prices on the sticker...the actual cost, and the tax.

In fact, the FairTax actually calls for exactly what you want. There will be two prices listed for your purchase: the amount of the purchase and the total tax paid. Any state sales tax would be added to just the cost of the item, but that is how it is anyways.

About the tax obfuscation, one of the purposes of the FairTax is to make it readily apparent how much we pay in taxes. The idea is that it would motivate people to vote for politicians who don't treat tax funds as their personal piggy bank and actually look to reduce wasteful spending. It also aims to bring government back to the state and local level.

In the end, though, it is about fixing our ridiculously broken tax system that really is not sustainable long run and is mainly exploited by politicians for vote buying and to encourage class warfare.

soonerscuba
4/15/2008, 02:48 PM
eBay would get HUGE

how would you handle retail internet sales from other countries?

would you get a rebate on food, etc... or just not have to pay?

seems like anything you could buy with food stamps should just be exempt, for example
Well, part of the fun with the FairTax system is that we get rid of that pesky 140 year old institution that has and maintains relationships with professional service firms and create a new tiny office that writes checks and deals with lower income people which in no way opens a door for blatant fraud. To combat this fraud of course we would need a new agency, and so on. So the burden of the agency shifts to individuals (sounds awesome in that we know how smart the average person is) and doing this of course would be cheap, easy and in no way be a massive boondoggle.

As for eBay and internet sales, these of course are taken care of with wizardry. Oh wait, they won't be taxed, so of course we will need to cut spending; I purpose we shut down the government sponsored Unicorn farms. We do have Unicorn farms on the planet in which FairTax is actually installed.

SoonerBBall
4/15/2008, 02:50 PM
how would you handle retail internet sales from other countries?

That is an excellent question and one I haven't looked up, but those items aren't currently taxed anyways, so worst case it would be a wash.




would you get a rebate on food, etc... or just not have to pay?


This is where the idea of the prebate comes in. The prebate is a check the government sends each head of household every month. The calculation takes into account how many people are living in the house and refunds them the total amount of taxes up to the poverty level for that number of people in a household.



seems like anything you could buy with food stamps should just be exempt, for example

This would be taken care of by the prebate mentioned above, so no, they would not be exempt.

StoopTroup
4/15/2008, 02:53 PM
Our tax problems could all be fixed once they start taxing Ebay transactions. :D

yermom
4/15/2008, 02:54 PM
That is an excellent question and one I haven't looked up, but those items aren't currently taxed anyways, so worst case it would be a wash.

they aren't currently taxed, but i'd imagine you'd see a surge in buying stuff online from Canada or Mexico, or wherever if you could save some bucks on paying international shipping vs. sales tax.

man, i have to say, i haven't heard anything about this prebate business. that's sounds like bad **** waiting to happen. like you are trading one bureaucracy for another. not to mention the people that are going to just spend that cash on booze, lottery tickets, etc... :D

SoonerBBall
4/15/2008, 02:57 PM
Well, part of the fun with the FairTax system is that we get rid of that pesky 140 year old institution that has and maintains relationships with professional service firms and create a new tiny office that writes checks and deals with lower income people which in no way opens a door for blatant fraud. To combat this fraud of course we would need a new agency, and so on. So the burden of the agency shifts to individuals (sounds awesome in that we know how smart the average person is) and doing this of course would be cheap, easy and in no way be a massive boondoggle.

Because no one attempts to defraud the current system, let alone is successful at it, right?

The fact is, no system is foolproof, so of course there would be fraud attempted and some would be successful. However, under the FairTax, it would take two to fraud the system. The buyer and the seller would both be complicit or else it wouldn't work. Add this to the fact that over 80% of all sales in the US are made by less than 1% of retailers (those numbers are close, I don't have the exact figures in front of me), and you realize that there are very few retailers that will actually try to skip the tax. Or do you think Walmart is going to help its customers cheat the federal government?



As for eBay and internet sales, these of course are taken care of with wizardry. Oh wait, they won't be taxed, so of course we will need to cut spending; I purpose we shut down the government sponsored Unicorn farms. We do have Unicorn farms on the planet in which FairTax is actually installed.

Or you would realize that only new items are taxed under the FairTax, so if a value added retailer purchased an item to sell on eBay, then it was already taxed. I'll admit that I'm not sure how you would monitor someone selling a brand new product on eBay without making it eBay's problem, but seeing as eBay doesn't account for anywhere near a small percentage of new goods sales, I don't think it would matter all that much.

Ike
4/15/2008, 03:02 PM
In the end, though, it is about fixing our ridiculously broken tax system that really is not sustainable long run and is mainly exploited by politicians for vote buying and to encourage class warfare.

I don't think you can ever fix the exploitation of taxes by politicians for vote buying and class warfare. Even this is subject to such manipulation.

"Lets Tax cigarettes more"
"Lets put a higher tax on cars that cost more than X"
"Lets put a higher tax on yachts"

the list could go on and on...

SoonerBBall
4/15/2008, 03:03 PM
If thats the case, I can't see how republicans would ever support such a thing. In Europe, that works just fine for them because people don't care about how much of their money goes to the government...Because in the end, it's pretty much all of it. So having the sticker price being equal to what you pay at the register is a nice convienence. If our method of taxation went to an inclusive sales tax, I would think that it would help foster an attitude of not caring how much of your money is going to the government among people here, which would give them free reign to raise taxes little by little until we are essentially europeans.

;)

Luckily, shaun is wrong. The FairTax is specifically not a VAT. VATs just serve to hide the true cost of the tax, and the FairTax is specifically against that. VATs also hide true revenue gained by tax increases becase a very small percentage increase in the tax ends up being a huge tax increase due to the fact that the VAT is applied at multiple steps along the way.

yermom
4/15/2008, 03:04 PM
I don't think you can ever fix the exploitation of taxes by politicians for vote buying and class warfare. Even this is subject to such manipulation.

"Lets Tax cigarettes more"
"Lets put a higher tax on cars that cost more than X"
"Lets put a higher tax on yachts"

the list could go on and on...

how about gas? :mad:

SoonerBBall
4/15/2008, 03:06 PM
I don't think you can ever fix the exploitation of taxes by politicians for vote buying and class warfare. Even this is subject to such manipulation.

"Lets Tax cigarettes more"
"Lets put a higher tax on cars that cost more than X"
"Lets put a higher tax on yachts"

the list could go on and on...

I agree, and to this end, the FairTax bill in its current form states that all goods are taxed equally so that lobbying is not a factor for the tax. The creators of the bill are also trying to add a clause stating that it would take a super-majority in congress to exempt any good or service from the tax in any way. One view of the FairTax is that the tax should be the same on every single thing you purchase to make it totally and completely fair.

SoonerBBall
4/15/2008, 03:10 PM
they aren't currently taxed, but i'd imagine you'd see a surge in buying stuff online from Canada or Mexico, or wherever if you could save some bucks on paying international shipping vs. sales tax.

man, i have to say, i haven't heard anything about this prebate business. that's sounds like bad **** waiting to happen. like you are trading one bureaucracy for another. not to mention the people that are going to just spend that cash on booze, lottery tickets, etc... :D

I was going to explain the prebate more to you, but I'm at work, and Wikipedia did it nicely :D.



Under the FairTax, households of citizens and legal resident aliens would receive a "Family Consumption Allowance" (FCA) based on family size (regardless of income) that is equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines (http://en.wikipedia.org/wiki/Poverty_in_the_United_States#Current_poverty_rate_ and_guidelines) published by the U.S. Department of Health and Human Services (http://en.wikipedia.org/wiki/U.S._Department_of_Health_and_Human_Services).[1] (http://en.wikipedia.org/wiki/FairTax#cite_note-billtext-0) The poverty level guidelines vary by family size and represent the cost to purchase household necessities. The FCA is a tax rebate (known as a "prebate" as it would be paid in advance) paid in twelve monthly installments equal to 23% of poverty level spending for each household size. The rebate is meant to eliminate the taxation of necessities and make the plan progressive (http://en.wikipedia.org/wiki/Progressive_tax).[3] (http://en.wikipedia.org/wiki/FairTax#cite_note-money-2) The formula used to calculate rebate amounts would be adjusted for inflation (http://en.wikipedia.org/wiki/Inflation). To become eligible for the rebate, households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member. The Social Security Administration (http://en.wikipedia.org/wiki/Social_Security_Administration) would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer (http://en.wikipedia.org/wiki/Electronic_funds_transfer) to a bank account, or a “smartcard (http://en.wikipedia.org/wiki/Smartcard)” that can be used much like a bank debit card.[1] (http://en.wikipedia.org/wiki/FairTax#cite_note-billtext-0)
Opponents of the plan criticize this tax rebate due to its costs. Economists at Suffolk University (http://en.wikipedia.org/wiki/Suffolk_University) and Boston University (http://en.wikipedia.org/wiki/Boston_University) estimated the overall rebate cost to be $489 billion (assuming 100% participation).[30] (http://en.wikipedia.org/wiki/FairTax#cite_note-taxpanelrebuttal-29) In addition, economist Bruce Bartlett (http://en.wikipedia.org/wiki/Bruce_Bartlett) has criticized that the rebate would create a large opportunity for fraud,[31] (http://en.wikipedia.org/wiki/FairTax#cite_note-TFBarlett-30) treats children disparately, and would constitute a welfare-payment-regardless-of-need.[32] (http://en.wikipedia.org/wiki/FairTax#cite_note-Bartletttaxnotes-31)
The President's Advisory Panel for Federal Tax Reform (http://en.wikipedia.org/wiki/President%27s_Advisory_Panel_for_Federal_Tax_Refor m) cited the rebate as one of their chief concerns when analyzing their national sales tax, stating that it would be "the largest (entitlement program) in American history", and contending that it would "make most American families dependent on monthly checks from the federal government".[8] (http://en.wikipedia.org/wiki/FairTax#cite_note-finalreport-7) Based on the advisory panel's tax rate (which differs from the FairTax legislation),[30] (http://en.wikipedia.org/wiki/FairTax#cite_note-taxpanelrebuttal-29) "the Prebate program would cost more than all budgeted spending in 2006 on the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Housing and Urban Development, and Interior combined."[8] (http://en.wikipedia.org/wiki/FairTax#cite_note-finalreport-7) Proponents point out that income tax deductions (http://en.wikipedia.org/wiki/Tax_deduction), tax preferences, loopholes (http://en.wikipedia.org/wiki/Tax_avoidance), credits (http://en.wikipedia.org/wiki/Tax_credit), etc. under the current system was estimated at $945 billion by the Joint Committee on Taxation (http://en.wikipedia.org/wiki/United_States_Congress_Joint_Committee_on_Taxation ).[30] (http://en.wikipedia.org/wiki/FairTax#cite_note-taxpanelrebuttal-29) This is $456 billion more than the FairTax "entitlement (http://en.wikipedia.org/wiki/Entitlement)" (tax refund) would spend to cover each person's tax expenses up to the poverty level. In addition, it was estimated for 2005 that the Internal Revenue Service was already sending out $270 billion in refund checks.

soonerscuba
4/15/2008, 03:13 PM
I agree, and to this end, the FairTax bill in its current form states that all goods are taxed equally so that lobbying is not a factor for the tax. The creators of the bill are also trying to add a clause stating that it would take a super-majority in congress to exempt any good or service from the tax in any way. One view of the FairTax is that the tax should be the same on every single thing you purchase to make it totally and completely fair.
Are we scrapping the depreciation system under FairTax? Honest question, I really don't know.

On another point, you mentioned that you want to shift the government powers back to the states, a lot of people feel that way. I can tell you though that dealing with the IRS is way better than dealing with state agencies, and dealing with state agencies is way better than dealing with local agencies. I just think that the current system has flaws, but the costs and risks associated with FairTax just don't float, IMO.

swardboy
4/15/2008, 03:13 PM
I'm for anything that puts IRS employees on the bread line where I can kick them senseless, spit on them, and kick them again.

Fair Tax sounds great to me....end of the American Gestapo.

yermom
4/15/2008, 03:14 PM
I was going to explain the prebate more to you, but I'm at work, and Wikipedia did it nicely :D.


that did not quell my fears

it would certainly hose teh illegals though

r5TPsooner
4/15/2008, 03:19 PM
What I really love is the slight of hand the fair taxers use to convince you that a 30% tax is a 23% tax.


If we dropped the IRS and the crap that we have to endure around April 15th, I'd gladly pay 30% for everything that I purchase. That way, the people who really can't afford the stuff they're purchasing in the first place, MIGHT think twice before doing so. For instance, you purchase a new car but can't afford the tag, tax, and title (some states referred to license) in the 30 days given to you, so you drive around with an expired "new car" tag for months after the purchase!

If you can't afford to purchase the tag, tax, and title, what makes you think that you can afford a car note over a 3-6 year time frame? I have seen at least six cars this month with expired tags who just purchased there vehicles.

Amazing! Then folks wonder why out economy is in the shi**er?

yermom
4/15/2008, 03:25 PM
hey, some of us are just lazy :O

shaun4411
4/15/2008, 03:35 PM
if you get rid of income tax, all the lonely fools with accounting degrees may need to find new careers. poor irs.

soonerscuba
4/15/2008, 03:42 PM
if you get rid of income tax, all the lonely fools with accounting degrees may need to find new careers. poor irs.
You have no idea what accountants do, do you?

SoonerBBall
4/15/2008, 03:44 PM
Are we scrapping the depreciation system under FairTax? Honest question, I really don't know.

The FairTax gets rid of every federal tax on the books, so there is no longer a tax consequence associated with decpreciation or even captial goods at all. The only place the federal government gets money is at the tax register to the tune of 23% (inclusive, 30% exclusive) past the poverty level.



On another point, you mentioned that you want to shift the government powers back to the states, a lot of people feel that way. I can tell you though that dealing with the IRS is way better than dealing with state agencies, and dealing with state agencies is way better than dealing with local agencies. I just think that the current system has flaws, but the costs and risks associated with FairTax just don't float, IMO.

But isn't this problem because local governments don't have any actual power anymore? Their power has been usurped by state government which has been usurped by the federal government. Keeping government local makes it easier for the citizens to hold their representatives accountable for their actions. All the state and local representatives for Oklahoma live here in Oklahoma, and it is much harder for them to get away with passing shady bills then it is for the Oklahoma representatives who deal and work in Washington D.C.

I disagree with you, though, about it being smoother to deal with the federal government than with the state or local. I think it is far harder because of the layer upon layer of bureaucracy that you have to go through. The layers are not as deep in state and local government, but annoying and confusing none the less.

Vaevictis
4/15/2008, 03:52 PM
The FairTax gets rid of every federal tax on the books, so there is no longer a tax consequence associated with decpreciation or even captial goods at all. The only place the federal government gets money is at the tax register to the tune of 23% (inclusive, 30% exclusive) past the poverty level.

If what you're saying is true, and I'm interpreting what you said correctly, under FairTax, capital investment is taxed instead of being given a tax break like it currently is.

Wow. That's retarded.

I mean, seriously. That's unbelievably retarded.

You think income tax is bad? FairTax in effect shifts taxes from profits earned to taxation on the means of making profits in the first place. Horrible, horrible, HORRIBLE policy.

EDIT: Okay, I see that I misinterpreted what you said. I read the Wiki more carefully, and business purchases are untaxed. Gonna mull on that awhile, but I will say that that sounds like it's going to create more bureaucratic hurdles for starting a business.

soonerscuba
4/15/2008, 03:54 PM
The FairTax gets rid of every federal tax on the books, so there is no longer a tax consequence associated with decpreciation or even captial goods at all. The only place the federal government gets money is at the tax register to the tune of 23% (inclusive, 30% exclusive) past the poverty level.
Would the government lose the ability for point and industry specific business incentive by this? I mean, one of the things that I thought was a good idea on the part of the Bush admin post 9/11 was the bonus depreciation placed upon specific industries to promote investment and partnership.



But isn't this problem because local governments don't have any actual power anymore? Their power has been usurped by state government which has been usurped by the federal government. Keeping government local makes it easier for the citizens to hold their representatives accountable for their actions. All the state and local representatives for Oklahoma live here in Oklahoma, and it is much harder for them to get away with passing shady bills then it is for the Oklahoma representatives who deal and work in Washington D.C.

I disagree with you, though, about it being smoother to deal with the federal government than with the state or local. I think it is far harder because of the layer upon layer of bureaucracy that you have to go through. The layers are not as deep in state and local government, but annoying and confusing none the less.
Simply a matter of opinion, I have no hard data, I just deal with various agencies day in and day out, and have actually found the IRS easiest to deal with. I cannot speak to other departments.

tommieharris91
4/15/2008, 03:59 PM
Amazing! Then folks wonder why out economy is in the shi**er?

No, no, no. We know why the the economy is in the ****ter, we just don't know how to get the economy out of the ****ter. I don't think current US poilcies to fight recession are doing too much either.

Vaevictis
4/15/2008, 04:02 PM
No, no, no. We know why the the economy is in the ****ter, we just don't know how to get the economy out of the ****ter. I don't think current US poilcies to fight recession are doing too much either.

Oh, I dunno, the fact that we've thus far avoided a complete failure credit market and any bank runs say that some of the stuff we're doing is pretty successful.

tommieharris91
4/15/2008, 04:38 PM
Oh, I dunno, the fact that we've thus far avoided a complete failure credit market and any bank runs say that some of the stuff we're doing is pretty successful.

Well, I think everybody sees a 1% or less interest rate coming. That's a given. I just think, in the long run, across the board tax cuts and increased government spending are going to bite this country in the *** sometime soon. Maybe it's already started.

SoonerBBall
4/15/2008, 04:39 PM
Oh, I dunno, the fact that we've thus far avoided a complete failure credit market and any bank runs say that some of the stuff we're doing is pretty successful.

BearSterns would beg to differ. ;)

SoonerBBall
4/15/2008, 04:44 PM
Would the government lose the ability for point and industry specific business incentive by this? I mean, one of the things that I thought was a good idea on the part of the Bush admin post 9/11 was the bonus depreciation placed upon specific industries to promote investment and partnership.

Yes. There would be no way for the government to provide industry specific business incentives. That is one of the reasons the income tax is such a mess as it is because lobbyists have been gaming the system getting tax breaks for their industry making it a huge mess. There would be no preference given to any industry, but at the same time, none of them would be paying income or payroll taxes, either.

SoonerBBall
4/15/2008, 05:10 PM
If what you're saying is true, and I'm interpreting what you said correctly, under FairTax, capital investment is taxed instead of being given a tax break like it currently is.

Wow. That's retarded.

I mean, seriously. That's unbelievably retarded.

You think income tax is bad? FairTax in effect shifts taxes from profits earned to taxation on the means of making profits in the first place. Horrible, horrible, HORRIBLE policy.

EDIT: Okay, I see that I misinterpreted what you said. I read the Wiki more carefully, and business purchases are untaxed. Gonna mull on that awhile, but I will say that that sounds like it's going to create more bureaucratic hurdles for starting a business.

Well, I haven't had an accounting class in several years, but my understanding that depreciation of capital goods was used to offset part of a companies income tax consequence. If we are getting rid of their income and payroll taxes completely, then why would this matter? Now they aren't paying these things out at all, so there is no need for the tax adjustment. Am I missing something major here?

Vaevictis
4/15/2008, 05:51 PM
Well, I haven't had an accounting class in several years, but my understanding that depreciation of capital goods was used to offset part of a companies income tax consequence. If we are getting rid of their income and payroll taxes completely, then why would this matter? Now they aren't paying these things out at all, so there is no need for the tax adjustment. Am I missing something major here?

Essentially, the tax break for capital investment (eg, depreciation being deductable) encourages capital investment. This is generally considered a good policy.

FairTax does away with that. I originally thought that businesses would end up paying tax on goods they purchased, actually adding tax to capital investment (I was clearly incorrect on this count).

The other concern that I have is the effect on the optimal capital structure of companies; go look up the WACC equation and its implications, and set the income tax rate at 0%. This would result in an absolutely massive change in how businesses would operate and be valued.

If I'm thinking correctly (and I'm doing this quickly, so I may not be), current circumstances result in highly levered companies being optimal for the investor; elimination of the income tax would result in 100% equity being the optimal capital structure. IOW, it would be a kick in the balls of a whole hell of a lot of companies and their investors. Worse, it would be a kick in the balls of highly levered companies -- their valuations would probably tank, causing some or many of them to default on their loan covenants and be forced to seek bankruptcy protection (a la Enron, but because of a governmental change, not because of any fraud.)

Now that I'm thinking about it a little harder, FairTax would be a radical change in the financial system, and is certain to have nasty unintended consequences. If we were to decide to go that route, we'd have to phase it in very, very slowly, probably over 10-20 years.

Turd_Ferguson
4/15/2008, 07:10 PM
If we were to decide to go that route, we'd have to phase it in very, very slowly, probably over 10-20 years.I say we do it now....like today....can I tear my IRS check up:confused::D:D