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Mike Huss
Advanced Member
Username: Mikhu

Post Number: 684
Registered: 03-2003
Posted on Thursday, June 02, 2005 - 12:37 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

The latest conversations in the liberal thread has prompted me to to query you all about the Fair Tax. Since you liberals all hate GWB with a passion, and therefore by default seem to now hate all Republicans/right leaners and conservatives (what ever happened to being the party of open mindedness?), will you support something that makes as much sense as the Fair Tax, or will you just hate it by default because it's authored and co-sponsored by Republicans?

I mean c'mon, all you liberals want to tax the hell out of the rich and make them pay more than their fair share "because they can afford it", so you should love this plan. (Egads class envy disgusts me and I'm what you would call low-mid middle class.)

Ok, now that I got my digs in, I'm curious to see responses to this. I think it's an excellent concept that merits some serious consideration in Congress. Feel free to comment if you feel like taking the time to review the information.

http://www.fairtax.org/
 

Wykowski
Senior Member
Username: Bigearl

Post Number: 1271
Registered: 12-2002
Posted on Thursday, June 02, 2005 - 03:11 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

It's only fair if your rich,

for example:

my dad who makes 4-5 times more than I do, still lives a 'common' lifestyle, his day to day expences are about the same as mine, yet he would pay about the same amount in taxes as I would...fair?

...life is too short to be greedy,

I'm an Ex-Republican, you can be one too !!!
get on the 12 step program, get 'the monkey off your back'
we'er goin' Honky Tonkin' round this town
 

Phil Lapp
New Member
Username: Phil_lapp

Post Number: 1
Registered: 06-2005
Posted on Thursday, June 02, 2005 - 03:41 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

First, could you imagine the business community, which is entirely averse to drastic change, embracing this even though it appears to give them a free ride? It may be your ultimate goal, but it would have to be instituted in many stages for the market not to totally freak out upon its institution.

Second, before any coherent person could sign on for this, they would need to understand how the tax burden really would fall. We all understand theoretically that taxing people based on what they want versus what they have or get seems fair enough. But, remember that when tax burdens are not fairly distributed the result tends to be revolution (see 1776 war in your history book).

So, I appreciate that shifting the tax burden sounds nice, but the amount of money we currently spend on prisons could be a pittance next to the security costs the haves will spend if the have nots are not placated (see every sci-fi movie about the future of a overly stratefied society).

Overall, its interesting. I am not opposed, I just think the difference between this thing in a vacuum signed by the academics and the reality of it in practice is a pretty big difference.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 686
Registered: 03-2003
Posted on Thursday, June 02, 2005 - 03:46 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

I don't follow how the fair tax favors the rich, as they would pay more than their "fair" share through a consumption tax via the purchases they make. That is IF they choose to spend their money, which by far the vast majority of the "rich" is likely do do on a regular basis. The poor get all their tax money back every month, vs getting it all back in the spring. So how does this favor the rich?

I never understood accusing the rich of being greedy when they don't want to follow the socialist line of thinking (your money belongs to everyone). They earned that money, whether through hard work, investing, inheritance, real estate, lottery, whatever. Why should that money belong to anyone but them? Social programs benefit greatly from donations from the rich, much more so than government programs.

So yes, I think if your Dad chooses to live a lifestyle where he spends 1/4 what he could be freely spending, then he should be paying the same in taxes. Heck, if he's not spending that much that means he's probably investing and saving for retirement which means the government won't have to support him. Good for him! Not to mention, if he is indeed investing his money instead of spending it, that money is in turn being used to fund loans via financial institutions so small business owners can build and grow and hire the poor. Everyone wins.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 687
Registered: 03-2003
Posted on Thursday, June 02, 2005 - 03:52 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Phil, I couldn't begin to explain all the intricacies of the plan, but these guys have done their homework. I've heard them confronted with numerous objections and questions and they always have an answer. They know what they are talking about.

There is a book coming out very soon on it, check it out if you get a chance.
 

Wykowski
Senior Member
Username: Bigearl

Post Number: 1274
Registered: 12-2002
Posted on Thursday, June 02, 2005 - 04:12 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

I never understood accusing the rich of being greedy

I'm not accusing 'the rich' of being greedy, I'm accusing Republicans of being greedy

...anyhoo, screw the rich, because why not !!!
we'er goin' Honky Tonkin' round this town
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 688
Registered: 03-2003
Posted on Thursday, June 02, 2005 - 04:33 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

If being greedy means that I get to keep the money that *I* earned and *I* get to choose which causes and people I would like to support, then so be it! I WANT to be a greedy bastard then!

Let me say again, I have no problem setting aside money for people that get down on their luck. Heck, I used it when I got downsized about 1.5 years ago as I was on unemployment for a month or so. But when Joe Lazy Ass who doesn't feel like working needs money and the government tells me I have to support him, I take issue with that.

And I don't consider myself a Republican, although I do consider myself a conservative leaning libertarian type. Our current Republican government is too big and similar to the Democrats in that they haven't met a spending bill they didn't like. Both parties are terrible at that now, the Dems tax and spend, the GOP spends and lowers taxes, therefore increasing the deficit. Here's a thought, how about we DECREASE spending? Because you know, we really need that rainforest dome in North Dakota and things like that.
 

Nathan Eddy
Junior Member
Username: Nathan_eddy

Post Number: 31
Registered: 03-2005
Posted on Sunday, June 05, 2005 - 03:54 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Mike, sorry you haven't received any intelligent or thoughtful responses to this fascinating subject. I suspect that no one is going to the link and actually LEARNING what the Fair Tax is.

People, check out the link. Go to "Thumbnail Scetch of Fair Tax." Take 5 minutes (or 10 if you're slow) to teach yourselves something about the world you're living in, and how it could be better.

People's paychecks would instantly increase by 20% or more, and goods/services will quickly experience a decrease in price (through ending the hidden corporate taxes involved in payroll taxes, which are presently added to the price of goods and passed on the consumer). Once our goods cost less to produce, their price on the world market will go down 20%-30%, increasing the demand for U.S. produced goods, which will increase manufacturing jobs in America.

Also, there will be no way to evade taxes. No tax shelters, no failure to report income, etc. When you spend, you pay. The rich will finally, REALLY pay their fair share, not benetting from all the loopholes you and I miss out on.

And drug dealers or other criminals in the black market will finally see their money taxed because even though they deal largely with cash, they have to spend it sometime. This is a trillion dollar "industry" which is currently not being taxed on the federal level.

So, in review: more pay, cheaper products, stronger position in the world economy, more jobs, less tax fraud, perpetual utopia.

Okay, just kidding with that last one. But this is at least worth checking out and becoming familiar with it. Don't cheat yourself some valuable knowledge because you're biased politically.
 

Okierat
Junior Member
Username: Okierat

Post Number: 65
Registered: 05-2003
Posted on Monday, June 06, 2005 - 01:28 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

To be honest, the only real sure way to get something like this going is if they did not do any deductions from your paycheck through out the year and you got to write a check on 04/15. Then and only then would people really see what they pay in federal and state taxes. Right now, it gets taken out, and we have been condiitioned that is the "painless" way of doing it. Personally, I would love for us all to have to feel some "pain" at tax time and cut one check a year to Uncle Sam.

But lets face it, something lke that will never happen as too many people would be against something like that.
 

Chumley
Senior Member
Username: Chumley

Post Number: 3254
Registered: 02-2003
Posted on Monday, June 06, 2005 - 02:10 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Hmmm...I guess I just don't understand it...this fair tax proposal is supposed to be so simple, but when you start looking at it, it doesn't make any sense.

It abolishes the IRS, yet someone is going to have to oversee how businesses collect sales tax and turn them over to the government, aren't they? And who's going to figure out and cut the rebate checks to the lower income folks? If you get a rebate check based on your income, then that by de facto requires the government to monitor your income.

I agree with Wykowski, this idea would only seem to benefit the rich. Why buy your yacht in the U.S. when you can buy it in Acapulco and save 23% sales tax? Sounds like a great way of increasing sales of high-end items in other countries.

No way to avoid taxes? How about this - "barter economy". I'll do this for you if you give me that, lets just not exchange any money.

If something seems too good to be true, it probably is. Are there any nations who have enacted such a concept, that we can look at and see how well its working? Sort of like W's social security proposal - at least we can look at Great Britain and see how well that worked.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 691
Registered: 03-2003
Posted on Monday, June 06, 2005 - 02:59 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

And what's to stop a millionaire from buying that same yacht in Acapulco and writing it off as a business expense today? Remember, yes, there will be a higher cost sales tax, but the cost of the products will be that much less and then some because you aren't paying corporate taxes through your purchase. So net cost is about the same.

How is today's economy any different? How many people do work for cash nowadays, or do this for that? That's no different than today?

The something like 7th and 9th largest economies in the world, Texas and Florida, operate on this principle already, so it works.

Ah yes, social security. So you think the goverment can manage your money better than you can too, eh?
 

Joseph Listan
Advanced Member
Username: Poonstab

Post Number: 700
Registered: 03-2003
Posted on Monday, June 06, 2005 - 04:17 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

The IRS is just the unfortunate face of the system. People get all bent out of shape about the friggin' IRS. With some exceptions where laws are actually broken by individual employees, they are just doing what they are supposed to do and are allowed to do by law. Don't blame the IRS for the laws, save that for your "friends" in Congress.
 

Chumley
Senior Member
Username: Chumley

Post Number: 3256
Registered: 02-2003
Posted on Monday, June 06, 2005 - 04:20 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

>>So you think the goverment can manage your money better than you can too, eh?

Than me, personally, no. Than the people I saw walking around Wal-Mart yesterday, yes.
 

I. M. Curious
Unregistered guest
Posted on Thursday, June 09, 2005 - 05:10 am:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Are retail prices of goods and services in Texas and Florida generally lower than those in states that finance their governments through an income tax rather than solely through a sales tax?
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 694
Registered: 03-2003
Posted on Thursday, June 09, 2005 - 12:33 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

No, because in Texas and Florida you are still paying the corporate taxes when you buy the product. Eliminate the corporate taxes (that get passed down through product costs) and you'll see the price of products go down.
 

I. M. Curious, Jr.
Unregistered guest
Posted on Thursday, June 09, 2005 - 04:47 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

One of the common criticisms of sales taxes is that they tend to be regressive ("poor" and "middle class" pay more, as a percentage of income than the "rich").

Are the tax systems in Texas and Florida generally viewed as fair or regressive?
 

R. U. Skeptical, II ?
Unregistered guest
Posted on Tuesday, June 14, 2005 - 05:08 am:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Should we eliminate the federal income tax, social security tax, medicare tax and federal corporate taxes and replace them with a 30% national sales tax?

I will not argue against the fact that our current tax system is an appalling mess, but what strikes me most about the FairTax website is the absolute certainty it attaches to the success of the FairTax act. This is economic theory we’re talking about here, where uncertainty reigns supreme and where small tweaks in variables can result in large, often unexpected, consequences. If hundreds of years of economic thought have taught us anything it should be that the behavior of large-scale economies are enormously hard to predict and that, to date, nobody, has really got the whole thing figured out. Yet the FairTax folks are contemplating a huge change in the way our economy works and seem to be 100% confident that only positive changes will result. Someone else dredged up the obvious response by relating the old maxim of “if it seems too good to be true, it probably is”. I think this particularly applies to economic theory. Let’s not forget another old maxim: “there’s no such thing as a free lunch”. The FairTax folks ultimately give me the impression that they’re trying to sell me a free lunch.

At any rate, a policy change such as this should be preceded by reasoned debate with information and ideas presented from both sides of the argument. For anyone who’s interested, here’s a different take on the FairTax proposal:


http://www.itepnet.org/sale0904.pdf



“The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities.”---Adam Smith
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 697
Registered: 03-2003
Posted on Tuesday, June 14, 2005 - 12:57 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

I wondered who this ITEP group was so I ventured into their funding information. Barbara Streisand's foundation, George Soros, the NEA, etc. Yeah. Sure. There are some unbiased fair evaluators funding that group.

How about we have a neutral and UNBIASED evaluation of the FairTax if you want to debate the merits of it?
 

Wayne Faris
Member
Username: Bugeaterbrewing

Post Number: 172
Registered: 12-2004
Posted on Tuesday, June 14, 2005 - 02:01 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

The so called FairTax sounds good in theory. However, you need to consider the distribution of the tax burden under such a system. Look at the millions of Americans that live from paycheck to paycheck. Virtually all of their income is spent on the basic necessities (housing, food, medical, etc.) thus their entire income would be subject to the 30% (or whatever percentage) tax. Higher income folks don't have to spend as much of their income their income (and have some discretion on how they spend that) and thus pay a lower total percentage of their income on taxes. The rich folks will only spend a miniscule portion of their income on non-discretionary expense items, and pay very small percentage on taxes.

The argument is made that the upper brackets, invest the money, and stimulate the economy, etc., i.e. the old "trickle down theory" (actually 'the poor get trickled on' theory).

The reality is that the lower income folks see very little of the benefits of this investment, and the so called FairTax ensures that they won't have enough discretionary income to raise themselves out of that bracket.

The FairTax will widen the gap between the haves and have nots even further that our current bad tax system.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 699
Registered: 03-2003
Posted on Tuesday, June 14, 2005 - 02:22 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Wayne, how do you see it that way? You do realize the people who live paycheck to paycheck will also have paychecks that are significantly bigger, right? No more federal income, FICA, Medicare, and hopefully state income taxes will be taken out anymore. Each paycheck would be larger, and you would be paying the same net price for goods because the cost of said goods would be reduced by approximately the same amount as the tax adds to the cost once you remove the imbedded corporate taxes.
 

Tim Wi
Member
Username: Riverkeeper

Post Number: 103
Registered: 03-2005
Posted on Tuesday, June 14, 2005 - 02:31 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

“The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities.”---Adam Smith

Nice tag line. Seems that a proportional tax is what Adam Smith advocates here.

Everybody pays 10% on their income.

Incomes of $10,000,000 pay $100,000.

Incomes of $50,000 pay $5,000. (Cut it off at the poverty line, or some other level if you want).

Everybody is happy. It can be said that everybody pays the same, yet the rich still pay more.

Tim
 

Dan Listermann
Senior Member
Username: Listermann

Post Number: 1155
Registered: 03-2004
Posted on Tuesday, June 14, 2005 - 03:00 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

I started to read about the so-called "Fair-Tax" and it occurred to me that what I was reading was all about how wonderful it would be. There is very little in there about any downsides. Would one be charged tax( 23% ? )on the purchase of a home? How about stocks and bonds? Business equipment? I see some real drags on the economy here.
Listermann Mfg.,Co. www.listermann.com

 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 700
Registered: 03-2003
Posted on Tuesday, June 14, 2005 - 03:18 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Dan, I'll be honest, I'm not sure on the home purchase or investment purchases, I'll see what I can find. However, business to business transactions are not taxed, that one I know.
 

Even More Skeptical
Unregistered guest
Posted on Wednesday, June 15, 2005 - 07:40 am:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

First let's answer some of those pesky questions.

The "FairTax" is a 30% sales tax. At least in terms that most of us think in when we hear the phrase "sales tax". If you buy something for $100, you will pay $30 (that's 30% of 100) in tax. The 23% figure touted by the "FairTax" proposal comes from the fact that to purchase your $100 dollar item you actually must spend $130, $30 of which is tax. Hey, 30/130 is about .23 or 23%. What does this all mean? The "FairTax" is a 30% sales tax. But, if you wanted to compare it to our current income tax (typically expressed as a percentage of income) it would be correct to say that if the "FairTax" were law, then no american would be paying more than 23% of their income in taxes. If the "FairTax" folks were more upfront about this and left it at that, I'd have nothing to argue with them about. However, their insistence on pushing this as a "23% sales tax" is at best misleading and at worst a dishonest attempt to deceive the american public. The math lesson for the day is that anytime someone mentions a percentage the first question you should ask is "percent of what?".

Dan asks about houses, stocks and bonds and Business equipment. Excellent questions, Dan! When I first read about the "FairTax" houses and cars immediately came to mind. To quote from the FAQ on the website Mike originally posted: "The FairTax is a single-rate, federal sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed.". What does this mean? Buy a new car from a dealer, pay 30% federal tax on the purchase. Buy a used car, pay no federal tax at all. Think that'll have a positive impact on the new car market? Buy a newly built home, pay 30% federal tax. Buy a "previously owned" home, pay no federal tax. Some folks think the housing market in the U.S. is a bubble waiting to pop. Might the "FairTax" be the pin that pops that bubble? A debateable point. Could a destabilized housing market throw our entire economy into a serious tizzy? Another debateable point. Business equipment is easy; it's a business to businees purchase and not "personal consumption" so it's not taxed. Couldn't find anything about stocks and bonds, but if you take a literal interpretation of the statement from the FAQ quoted above it would appear that the best we could hope for is that the only opportunity to apply the "FairTax" to stock and bond purchases would be to original issues. Most stock/bond purchases in this country are purchases of "used" products that the "FairTax" would tax at 0%. The more cynical side of me thinks that the "FairTax" would not view stocks and bonds as either a "good" or a "service" and as such no tax would ever be paid on purchases of financial instruments.

Mike,

You are very quick to paint the ITEP with a liberal brush. I notice you're a bit slower at actually addressing any of their concerns (or mine, for that matter) regarding the "FairTax". Tsk, tsk; bad form. Correct me if I'm wrong but by dismissing the opinions of this group simply by proclaiming them "too liberal" without actually addressing their arguments are you not engaging in exactly the partisan politics that you seem to want to condemn this group for?

For the record here's the gist of what the rebuttal of the ITEP statement that can be found on the website you orignally posted says (http://www.fairtaxvolunteer.org/smart/ITEPRebuttal.pdf):

The ITEP (Isntitute on Taxation and Economic Study) is closely aligned, if not a functioning arm of the Citizen's for Tax Justice (CJT) think tank, which is perhaps the most liberal, blah, blah, blah... Then something somewhat remarkable happens when it is grudgingly confessed that CJT is "technically non-partisan". Now, I'm not sure what "technically non-partisan" means but I'm guessing it translates into something like "they're non-partisan but don't agree with what we believe in so they can't really be non-patisan now can they".

But, if you want to play partisan games, anyone who looks around a little will quickly find out that the "FairTax" seems to be closely connected to a group called Americans for Tax Freedom. Anyone interested can check out the following website and draw their own conclusions:

http://www.rightdirectory.homestead.com/Fair-Taxation.html

Looks real neutral and unbiased to me.


Here's a couple of other sites that people interested in the "FairTax" might want to visit:


http://economics.about.com/cs/taxpolicy/a/fairtax.htm

http://www.jpfo.org/fairtax.htm

The first seems like a pretty moderate viewpoint that actually tries to balance possible benefits with possible liabilities of implementing the "FairTax" written by a guy who doesn't seem convinced that he knows exactly what will happen if this thing becomes law.

I include the second just because I'm truly interested in where the participants on this forum decide to place "Jews For The Preservation of Firearms Ownership, Inc." on the political spectrum.}
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 701
Registered: 03-2003
Posted on Wednesday, June 15, 2005 - 12:58 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Correct me if I'm wrong but by dismissing the opinions of this group simply by proclaiming them "too liberal" without actually addressing their arguments are you not engaging in exactly the partisan politics that you seem to want to condemn this group for?

You missed my point. I can't take anything they say seriously because being supported as they are they will oppose anything introduced by a Republican NO MATTER WHAT. A Repub could introduce legislation that would generate world peace, eliminate the deficit, grow our economy by 50% annually, and that group would oppose it "just because". Politics truly has gotten to that point nowadays.

Also, I didn't say the FairTax group was neutral and unbiased, I said in my first post that it was introduced by Republicans. I didn't say it was introduced by a bipartisan committee. I just asked the Republican haters out there to attempt to open their minds and evaluate it for what it is, not just immediately dismiss it because of who introduced it into Congress. If you had a group of Democratic Congressmen who opposed it and had a legitimate beef with it, I'd listen. But when you post a site that's supported by crackpot moonbats like Soros and Streisand, and one of the first things they say is it's a tax on the poor and a windfall for the rich, I tend to immediately dismiss it. They obviously haven't read anything about it if that's what they think it is.

In regards to housing and cars, what's the difference I buy a new house or a new car with my after tax paycheck dollars or if I pay a sales tax on them instead? Isn't the net cost basically the same? Or am I looking at this too simply?

I'll look at the other reviews in a bit and post again if I find anything interesting.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 702
Registered: 03-2003
Posted on Wednesday, June 15, 2005 - 01:34 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

The one thing I immediately noticed on the about.com analysis is he assumes the pre-tax cost of goods will go down due to people working more and the post tax cost of goods going up due to the sales tax. He completely blew it by forgetting to include the cost of goods going down because the consumer is no longer paying the embedded corporate taxes.

He also says the poor will pay more in taxes and the rich will pay less. I don't follow that when the plan plainly states that if you are poor you won't pay taxes just like you don't now. What is the difference?

He also states that families will lose because they don't get to claim exemptions like they do with an income tax. When you claim exemptions and reduce your tax liability are you eliminating your tax liability? NO! You are reducing what you pay in taxes, but you are still paying a buttload. (And that's the technical term!)

But whatever. I guess by all the opposition here you are are all happy paying too much income tax and we'll just continue to do so and not attempt to change our tax system for the better. It's easier to leave it status quo and just complain about it.
 

More Skepticism
Unregistered guest
Posted on Wednesday, June 15, 2005 - 02:43 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Another interesting thing about the "FairTax" proposal is that it may find itself to very simply be unable to deliver on one if its promises. It claims to eliminate the federal income tax. Unfortunately we have this thing in our country called The Constitution, the sixteenth amendment to which reads: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." So, the only way one could truly guarantee the absolute elimination of the federal income tax is through the repeal of a constitutional amendment. Last I checked, that's a bit tougher than simply passing legislation through congress.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 703
Registered: 03-2003
Posted on Wednesday, June 15, 2005 - 02:53 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

That's part of the "plan" on the FairTax, to repeal the 16th amendment. And unfortunately I believe that will be the FairTax's demise. The career politicians in Congress are more worried about scoring political points than making changes for the good so none of them would have the balls to actually try to repeal an amendment, even one as appalling as the 16th.
 

Okierat
Junior Member
Username: Okierat

Post Number: 66
Registered: 05-2003
Posted on Wednesday, June 15, 2005 - 03:06 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

As I have said in my post above, the only way to make a change is to make everyone write a check on 04/15 for their total tax bill so they can see what they actually pay. We have been conditioned to not feel the tax bite pain right now with the current system. Most people don't even look at their paychecks. Also, how many do you know get excited when they get a refund. To them its like a gift from Uncle Sam and not really thier money.

Remove the witholding system and you change the tax code.

Wether or not this is the best change I really don't know.
 

Phil Lapp
New Member
Username: Phil_lapp

Post Number: 3
Registered: 06-2005
Posted on Wednesday, June 15, 2005 - 04:02 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Just to look at this from a different perspective: the plan is to be revenue neutral, which means that overall, the same tax dollars are collected, right? We haven't changed the population of the US, so essentially the same people are paying taxes, right? So, all we are talking about is the distribution of the tax burden, right? Oh wait, is this one of those plans that generates so much economic growth that we grow our way out of a deficit?

Why is it that the "party of fiscal conservatism" believes this crap and runs record deficits every time they take over (see Reagan years and Bush II years)? I disagree with the Repubs largely on social policy, not economic policy. But, come on Mike, show me one thing the republicans have done that shows some level of fiscal restraint and conservatism?

But really my point is that this is a redistribution of the tax burden. I won't tip my hand as to who will pay more, but I bet we can figure it out. The short answer is ME. Oops, I tipped my hand.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 704
Registered: 03-2003
Posted on Wednesday, June 15, 2005 - 04:24 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Phil, those are different issues. I agree the bigger/biggest issue is government spending. That needs to change. Dems get all over the GOP for running up the deficit due to spending, whereas the Dems keep spending as well and just look for more creative ways to tax us more to make up the difference. To me I don't see the difference. They both spend to much, the GOP runs a deficit, and the Dems tax the hell out of us so they don't run a deficit. Either way I'm screwed. Neither party is fiscally conservative.

How do we change that? Well, we start with stopping pork, but I don't know how we stop it. We could start by having everyone follow a watchdog like CAGW and getting pissed off when they see bills passing that include such things as rainforest domes in North Dakota or whatever other crap they've pulled lately.

But anyway, runaway government spending is a different issue than how we supply them with money to waste.
 

Skeptic
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Posted on Wednesday, June 15, 2005 - 05:44 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

That’s a cute little double standard you got working for you there, Mike. On one hand when the liberal “crackpot moonbats“ over at the ITEP provide an analysis of the “FairTax” you freely admit that you dismiss it out of hand and apparently don’t consider it worthy of consideration. However, when the conservative “crackpot moonbats “ associated with ATF offer up the “FairTax” you urge us all to open our minds and see it for what it is. There’s at least a little inconsistency there.

And, yes, I do think you are looking at the cars and housing issues too simply. Consider this potential problem: If new cars are taxed at 30% and used cars are not, there is a pretty powerful incentive for folks to buy used instead of new. I don’t care how much disposable income is in your pocket, if two comparable items are offered up and one is significantly cheaper than the other, a rational consumer is going to give some serious consideration to the less expensive item. With respect to cars is it possible then that the implementation of the “FairTax” could have the unintended adverse effect of driving down demand for new cars? Given the financial condition of our nation's auto makers do we want to do that? Could similar problems occur in the housing market?

I don’t pretend to know the answers to these questions. I’ve said it before, I’ll say it again: noone really knows how tweaking certain variables will ultimately impact large scale economies. In economics, one needs to get used to the fact that, almost invariably, for every plausible economic explanation leading to a certain conclusion there tends to be another plausible explanation leading to a different conclusion.

Example:

On the website http://economics.about.com/cs/taxpolicy/a/fairtax.htm previously referenced in this thread the author analyzes the case of a worker who has the choice of working an hour of overtime at $25 per hour. Under the current tax system he’s only going to take home about $15 of those $25 while under the “FairTax” he gets to take home the whole nut. So, argues the author, the “FairTax” provides additional incentive for Joe Schmoe to work more which means he will earn more and hence spend more. Since he’s working more, our national production increases. All is well in the nation. I’d consider that a plausible argument. Here’s another: Joe Schmoe looks at all that extra disposable income he’s already taking home because of the “FairTax” and says to himself, “I don’t need no stinking overtime, I’m gonna go home and have me a beer” (begging of course the question of whether or not federal taxes on alcoholic beverages will disappear under the “FairTax”) . No increase in productivity, arguably no real increase in disposable income.

Two plausible scenarios with very different conclusions. Welcome to the wonderful world of economics. There’s a reason they call it the dismal science.

But, no, the “FairTax” people have it all figured out and only good things will result from its implementation. Quite frankly the absolute certainty that these people have regarding their proposal scares the hell out of me.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 706
Registered: 03-2003
Posted on Wednesday, June 15, 2005 - 06:33 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

You got that right, I have a good double standard going and I can admit it. However, I can see the difference because the creators of the FairTax have put the work into developing it, the other ones are just doomsday naysayers who want to keep the current system because it furthers their agenda of wealth re-distribution.

I don't know if the FairTax is the answer. But it sure looks a helluva lot better than what we have now.

I don't know if the new car issue is as big as you make it. There is already a huge discrepancy between the cost of new and used, especially with the typical 30% hit in the first year on "American" cars (which is another issue but that's for another day). Again, the theory behind the FairTax is the embedded corporate taxes would go away, so the cost of a car should be just like the cost of a screwdriver, it should net out around the same.

Bottom line, they are trying to sell their proposal, OF COURSE they are going to say it's the greatest thing since sliced bread!
 

Phil Lapp
New Member
Username: Phil_lapp

Post Number: 4
Registered: 06-2005
Posted on Wednesday, June 15, 2005 - 06:41 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

I still don't see how the nut gets carved. Same people, same total taxes. Someone here is paying more than they are now and someone is paying less than they are now. Any thoughts on who is who?
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 707
Registered: 03-2003
Posted on Thursday, June 16, 2005 - 12:55 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

One benefit of the FairTax that I forgot to mention is by switching to a sales tax from an income tax the millions of illegals in this country who pay no income tax but are a multi-billion dollar drain on our healthcare industry will finally start paying some taxes towards our economy.

I can't wait to see how many bleeding hearts this brings out...
 

Skeptical
Unregistered guest
Posted on Thursday, June 16, 2005 - 05:12 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Phil makes an excellent point. The rosy pie in the sky assessment of the "FairTax" offered by the AFT makes it sound like everyone's a winner, so who could possibly be against it? Yet, as Phil so wonderfully points out, if the "FairTax" is revenue neutral as its proponents claim, after all the gum flapping is over what we'll see is a simple redistribution of the tax burden. If it's revenue neutral, not everyone's effective tax rate can go down. Whose will go up? Given the well established regressive nature of a sales tax, you can bet it won't be the rich. Usually the poor lose out big time under a sales tax if you start comparing effective tax rates. The rebates offered up by the "FairTax" will cushion the usual regressive effect but isn't going to totally remove it. Who loses? My guess would be the middle and lower-middle class.

Meanwhile, Mike---staunch defender of the "FairTax"---chooses to ignore this issue and decides instead to engage in a bit of good old fashioned liberal baiting.

Since you've got your line in the water, Mike, I'll throw in mine.

It appears to be predominantly conservative republicans pushing the "FairTax". You all remember conservative republicans, right? They're the ones who want to limit government and keep government out of our lives (except of course when they want the government in your lives). Under the "FairTax", however, each and every household in America will be receiving a government rebate check each and every month. Poorer people will be depending on those government checks to make ends meet (oh the horror; that almost sounds like a welfare state). Talk about having government involved in your life. Better hope we never see another one of those pesky government shutdowns.
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 708
Registered: 03-2003
Posted on Thursday, June 16, 2005 - 05:49 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Victims, aren't we all.

I just don't understand how the naysayers can think that something like the FairTax is WORSE than what we have now? It just has to be pure anti-Republican/Conservative/whatever bias. Do you know of ANY significantly wealthy person that pays taxes now? No, they all have loopholes galore in our tens of thousands page tax code. I would like to think that a FairTax type system would cause more people to pay in, to pay their fair share, but I guess I'm just too stupid to understand it as well as you Rhodes scholar genius naysayers can.

Oh, and I didn't say I was a staunch defender, if you look back a couple posts I said "I don't know if the FairTax is the answer. But it sure looks a helluva lot better than what we have now." and I stand by that. Heck, ANYTHING has to be better than what we have now.
 

Skeptic
Unregistered guest
Posted on Thursday, June 16, 2005 - 11:23 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

"Do you know of ANY significantly wealthy person that pays taxes now?"

Actually I don’t anyone who would really qualify as being “significantly wealthy” so I’m not in a position to personally answer that question.

Do you really believe that wealthy people don’t pay any taxes?

All you’ve got to do is put the right combination of words into “Google” and you can find all sorts of data on the distribution of tax liability in America.

For example, in the year 2000, did you know that the upper 2.2% (by income) of all individual federal tax returns accounted for 20.9% of individual income in the U.S.and 42.7% of the total federal income tax liability?
 

Mike Huss
Advanced Member
Username: Mikhu

Post Number: 714
Registered: 03-2003
Posted on Friday, June 17, 2005 - 11:47 am:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

I tried to post that last one in a hurry, and obviously it came across wrong. Yes, and the top 15% pay like 90% of the taxes, I know. Now just think if there weren't all the loopholes of the current system and EVERYONE paid their fair share, including the rich who manage to pay less taxes than many middle class people (John and Tereezzza Kerry come to mind, look at their tax statement that came out during the election, their tax liability was similar to someone earning less than 100K IIRC).

What I wish is for everyone to pay their FAIR share. I don't want the rich to pay extra "because they can afford it". That's crap. They shouldn't have to pay extra, they should just have to pay what they owe. Some do, many don't.
 

bANKS mESSIAH
Unregistered guest
Posted on Friday, June 17, 2005 - 02:05 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Hmmmm . . .

Define "fair".

Discuss!
 

Phil Lapp
New Member
Username: Phil_lapp

Post Number: 5
Registered: 06-2005
Posted on Friday, June 17, 2005 - 03:34 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Mike, I know a lot of wealthy people who pay a lot of taxes. Your in-depth knowledge of tax loopholes is astounding. Please tell me more, or is this one of the things that you need the secret handshake to learn. Here is a freebie: invest in municipal bonds from the state you live in. In most states that means you don't federal or state tax on the income. Oh, and the rate of return is approximately 60% of the taxable rate. I guess maybe you just paid your tax after all?

I don't know what John Kerry paid in taxes, but I find it hard to believe that with all the scrutiny that today's politicians go through, there is anything on his return that is not kosher, otherwise you can bet it would have been news.

The Messiah really hits on the head. The issue is fairness. Is it fair to have a graduated rate, or is a flat tax more fair? I assert that a flat tax will further stratefy the country economically and ultimately create additional costs to the wealthy by way of security and insurance so that net, they may not be ahead at all, and the poorer people will certainly not be better off. Net, net, a graduated rate is more efficient and cheaper. Plus, based on the New Testament, I know that the Messiah would support it. Discuss.
 

Skeptic
Unregistered guest
Posted on Friday, June 17, 2005 - 05:19 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Fact check time. Turns out that in 2003, Kerry's federal income tax paid was just over $90,000. That's not even close to being similar to someone making less than 100K. Kerry and his very rich wife file seperate returns (I'm sure there's a liberal conspiracy in there somewhere). As his wife is a private citizen not running for public office I would hazard a guess that the only people who know how much she pays in taxes are herself, her husband and the IRS.
 

P.S.
Unregistered guest
Posted on Friday, June 17, 2005 - 11:38 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

"Now just think if there weren't all the loopholes of the current system and EVERYONE paid their fair share, including the rich who manage to pay less taxes than many middle class people"

You've got some serious 'splaining to do here, Mike. If "the rich" manage to pay less taxes than many middle class people, how could it possibly be the case that the top 2% income earners account for over 40% of all federal income tax collected? That doesn't even come close to adding up.
 

Nathan Eddy
Junior Member
Username: Nathan_eddy

Post Number: 41
Registered: 03-2005
Posted on Saturday, June 18, 2005 - 06:57 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Well, I read the ITEP document. One of its main points was that the tax payments would go up for poor and down for the rich. When making this point, however, it completely ignores the fact that everyone will be receiving a bigger paycheck; it also ignored the price drop in goods/services from removing hidden corporate payroll taxes. Thus, their point may be correct--that lower income brackets would end up paying more in sales tax than they were paying in income tax--however, if goods/services are cheaper and income is more, this point is not that impressive; it may in fact be completely misleading since net cash after taxes + spending could be greater under the Fair Tax. Unfortunately, we can't do the calculation to determine this becuase they completely failed to address extremely this relevant issue. However, it is a claim of the Fair Tax proponants. Curious that this claim isn't addressed (possibly because they can't debunk it?).
 

Skeptic
Unregistered guest
Posted on Saturday, June 18, 2005 - 09:13 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

It's really not a matter of "debunking" anything. It's a matter of competing economic theories. Some folks seem to think retail prices would drop (by 22% according to someone quoted on the "FairTax" webiste) if the "FairTax" is enacted. If you search and read a bit, others seems more skeptical about this point. Remember,noone really knows what will happen; it's all theory. Worse than that, it's all economic theory (the dismal science, remember).

But, none of this back and forth about what assumptions in whoever's scenarios are correct and which are incorrect addresses Phil's excellent point. If, as the "FairTax" folks contend, implementation of their plan is to be revenue neutral, then it is not possible for everyone's effective tax rate to go down. If one group's rate goes down, someone else's has to go up. So whose go downs and whose goes up? There still hasn't been a whole lot of discussion on this issue. If tax payments for the rich go down while everyone receives a bigger paycheck, then it's pretty clear to me that the rich are getting a lower effective tax rate. Whose is going to be higher to make up for this?

If anyone wants more reading on the subject here's another link that I don't think has been posted yet:

http://economics.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=economics&zu=http% 3A%2F%2Fwww.brookings.org%2Fcomm%2Fpolicybriefs%2Fpb31.htm
 

Wayne Faris
Member
Username: Bugeaterbrewing

Post Number: 173
Registered: 12-2004
Posted on Sunday, June 19, 2005 - 01:35 am:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

If anyone thinks prices will drop 22% (or whatever)after implementation of a fair tax, they must be smoking something other than tobacco. The biggest portion of that savings in taxes will go to company shareholders as increased profits, not lower prices.
 

Nathan Eddy
Junior Member
Username: Nathan_eddy

Post Number: 42
Registered: 03-2005
Posted on Sunday, June 19, 2005 - 01:38 pm:   Edit Post Delete Post View Post/Check IP    Ban Poster IP (Moderator/Admin only)

Wayne, you may be right . . . until the first WalMart or McDonalds within each market decides to use this enormous, unprecidented reduction in production costs (cut in payroll taxes) to enable them to undercut the competition with lower prices. At first, maybe many companies will choose to simply offer greater profits for shareholders. But once one company in each sector of the economy starts dropping prices, a price war will ensue. It would just be plain crazy NOT to take advantage of such an historic drop in production costs to position your company in a more competitive price range--ESPECIALLY if most of the other companies are failing to due so. Literally, a company would have to be insane not to take advantage of such an opportunity to increase their market.

Skeptic, sure it's possible for everyone's effective tax rate to go down, IF this drop in tax rate stimulates the economy such that a) more jobs are created (generating more tax PAYERS rather than tax RECIPIENTS), and b) American goods are exported at higher rates, thus reversing the trade deficit and increasing the amount of taxes paid into our economy, rather than some other country's economy. Both of these claims are part of the Fair Tax proposal.

Now, whether or not you believe these two things will happen is up for debate. But you can't say that it's impossible to drop tax rates for everyone and still achieve the same tax revenues. That's like saying that a store can't drop prices and increase it's profits. Sure it can.

Anything that grows our economy and increases our productivity creates the possibility of lower taxes and greater revenues.

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