http://www.opencongress.org/bill/111-h25/show

To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.

Wouldn't that be nice.

Yes but will never happen.

It would be nice...I actually believe that we might see something like this in the near future 10 years or so...but the Federal govt will take it all on..they won't cede control to the states.

I've been hawking this idea for years....Fairtax.org

It can and might happen sooner than you think as the grassroots support of this act has taken off.

Follow the link or I can give you an overview if you like.

I'm pretty sure we're all familiar with the idea by now. It usually doesn't get this much support in Congress though.

How can you tell how much support it's getting in Congress? Is that what the names are listed below it on the link?

Yes (assuming you clicked the "and 44 co-sponsors" link). Those are the bill's cosponsors.

Same list as listed on the site I linked. It's been gathering more and more support with the economy tanking and the apparent problems the IRS has collecting cooporate and individual taxes with all the damn shelters/loopholes.

So what would be the sales tax? 33 percent? 40 percent?

And this would remove all taxes on imports, alcohol, gambling, and stuff like that?

33-40%? That seems.... excessive, like on EVERY purchase? But, damn it that would mean all those people who don't have jobs and who don't pay income tax would feel a little pinch too wouldn't it? I rather like that idea but 33-40% on every purchase? Holymoly.

It would be up to the states (which it should be). I think this particular bill capped the max at 29% or so.

Imagine the tide of revenue from previously unreported money, not to mention no longer having to fund that money-pit-of-bureaucracy IRS.

Honestly though, this is probably a terrible time to put the Fair Tax in place. It would cripple already terrible consumer spending and impede our recovery.

33-40%? That seems.... excessive, like on EVERY purchase? But, damn it that would mean all those people who don't have jobs and who don't pay income tax would feel a little pinch too wouldn't it? I rather like that idea but 33-40% on every purchase? Holymoly.


LOL...did you actually say that those people who don't have jobs would feel the pinch? I wonder how pinched they felt when their companies closed or moved to China. There are people in this country who don't pay income tax...you are correct. Those who make less than 10k in income and those that are wealthy enough to buy their way out of paying taxes.

There are people in this country who don't pay income tax...you are correct. Those who make less than 10k in income and those that are wealthy enough to buy their way out of paying taxes.

Illegals? Drug dealers? Prostitutes and pimps?

There is a gigantic amount of unreported money. Some of the most profligate spenders too. Win-win.

Yes, that's what I said and meant. I have family members who think it's ok to cheat the gov't by getting their "check" and then working UTT as they call it. We have too much of that going on, meanwhile I'm paying thru the nose in taxes to insure my domestic partner but these people are getting a free ride.

Sadly, I foresee loop holes even in a program like this for people who make under $10k. They will get vouchers or maybe not have to pay tax if they use food stamps. Anyway to get one over. The lack of responsibility is disgusting to me.

Sadly, I foresee loop holes even in a program like this for people who make under $10k. They will get vouchers or maybe not have to pay tax if they use food stamps. Anyway to get one over. The lack of responsibility is disgusting to me.

There was an MTV show sometime in the 90s where ODB rode in a limo to pick up his welfare. On national TV!

Yes, that's what I said and meant. I have family members who think it's ok to cheat the gov't by getting their "check" and then working UTT as they call it. We have too much of that going on, meanwhile I'm paying thru the nose in taxes to insure my domestic partner but these people are getting a free ride.

Sadly, I foresee loop holes even in a program like this for people who make under $10k. They will get vouchers or maybe not have to pay tax if they use food stamps. Anyway to get one over. The lack of responsibility is disgusting to me.

Those who work and collect at the same time account for less than 1/10th of one percent of those that collect. Those in need of government assistance don't have paid lobbyists to push through laws allowing them to rip off the country like the healthcare industry or financial industry. You pay through the nose for insurance for Leah because of legal discrimination or we could just go by what seems to be part of the prevailing winds lately and say you choose to insure her quit whining, but there are people who understand that you are deserving of the same rights as every other American and that being gay is not a choice it is who you are.

I find it funny that someone who is discriminated against and vilified by what appears to be a majority in this country lacks the basic compassion for others in situations they might not have chosen.

I would hope that you will one day give out the same compassion you desire.

29 percent is surprisingly low. I pay 8 percent already on goods purchased PLUS a quarter of my income, so that is simply an additional 21 percent to cover the rest plus property taxes and so forth?

I wonder if this was passed how enforcement would work. Buying something online from Canada and getting it shipped would be interesting. Driving to Canada to make purchases much like how people drive to Delaware now would be even harder to worry about.

Not to mention what we'd do about incentives that may cost more but help the public interest (like fuel efficient vehicles and appliances now).

Its interesting, and clearly better, but I can't imagine it working less than a 35 percent tax.

Actually follow my link before you get too scared. There is a monthly "rebate" check cut based on your house income level + population of said family.

ALSO, second hand items aren't taxed at all. With the removal of the redtape sinkhole as the IRS you free up a metric ton of monies and also make the flow more transparent.

Under a certain annual income you are relatively free of any "taxes" as the rebate check covers your basics.

There's a lot to this bill, and I'm trying to recall the % sales tax without hitting the link (flipping between screens atm data entry) but I "think" it was between 27 and 29%. Figuring sales/IRS/state taxes puts you above the % I think.

We could completely eliminate the income tax and still operate the government just fine. In fact, if we cut the IRS and did nothing to replace it, the Federal government would still bring in as much revenue as it did in total in the early 90's.

We've just been anchored to the notion that we need these obscene taxes/revenues, so that the politicians can continue with the unrestrained spending.

But would a flat sales tax affect some of the other scams, like for instance a millionaire basketball player like Scottie Pippin owning farmland and collecting the annual subsidies not to grow certain crops, or whatever?

I like the idea of the flat sales tax, because everybody buys stuff. I do think that groceries should be exempt tho, to limit the severe impact that could face those who are at the poverty level.

I like the idea of the flat sales tax, because everybody buys stuff. I do think that groceries should be exempt tho, to limit the severe impact that could face those who are at the poverty level.

The Fair Tax does have those sort of exemptions.

But would a flat sales tax affect some of the other scams, like for instance a millionaire basketball player like Scottie Pippin owning farmland and collecting the annual subsidies not to grow certain crops, or whatever?

I like the idea of the flat sales tax, because everybody buys stuff. I do think that groceries should be exempt tho, to limit the severe impact that could face those who are at the poverty level.


Usually and I hope always in order to qualify for any benefits as a farm your land has to produce "X" in farm income. My Dad owned a farn in upstate NY and to qualify for farm taxes he had to show real income from the land. He cut and sold about 60 acres of hay and about 20 acres of feed corn in order to qualify.

Groceries are exempt now, so that wouldn't be a stretch. But all the really rich would just buy their jets in France AND not pay income tax.

Groceries are exempt now, so that wouldn't be a stretch. But all the really rich would just buy their jets in France AND not pay income tax.

Import tax!

Groceries are exempt now, so that wouldn't be a stretch. But all the really rich would just buy their jets in France AND not pay income tax.

For most things like that, if you want to bring it back home, you're going to be taxed.

They aren't paying income tax as it is anyway though, so no big deal.

There are likely provisions, overall though a Harvard Economist has said it'll actually drop prices overall after a time so maybe the rich folks will purchase here instead of outside our country.

I know sales tax is not a new idea so not sure they'd want to shop in areas where it's already used.

What is the FairTax plan?

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.
The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities.
The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.
The FairTax:

Enables workers to keep their entire paychecks
Enables retirees to keep their entire pensions
Refunds in advance the tax on purchases of basic necessities
Allows American products to compete fairly
Brings transparency and accountability to tax policy
Ensures Social Security and Medicare funding
Closes all loopholes and brings fairness to taxation
Abolishes the IRS
We offer a library of information throughout this Web site about the features and benefits of the FairTax plan. Please explore!

The FairTax Rate: a 23% tomato or a 30% tomato?

05/31/2007
http://www.fairtax.org/images/content/pagebuilder/12924.jpgAs the FairTax gains more national attention, questions have again arisen about whether the FairTax rate is 23 percent or 30 percent. In the toxic environment that often accompanies public policy debates, FairTax.org has even been accused by some of misleading the public, even though full descriptions of "tax-inclusive" and "tax-exclusive" calculations abound on our Web site. We hope the following explanation puts all such questions to rest -- at last.
Let’s use an example to illustrate the difference between tax-inclusive and tax-exclusive tax rates.
Assume there is a worker named Joe who earns $125 and spends all of his earnings. Let’s further assume that the government requires him to pay $25 in taxes.
If the government put a tax on Joe’s income, he would earn $125 before tax and would have $100 after tax to spend at the General Store. Thus, Joe has to earn $125 to have $100 to spend. Joe would also have to file an income tax return.
If the government put a tax on what Joe spends, he would earn $125 and would have $125 to spend at the store. Of the $125 paid by Joe to the storekeeper, $100 would be for the goods he bought at the store and $25 would be taxes that the storekeeper would send to the government. Joe would not have to file a tax return, as the storekeeper sends the tax in to the government.
Either way, Joe pays $25 in taxes and the government gets $25 in taxes. With a tax on income, Joe pays the $25 directly to the government, and with the tax on spending (sales tax), he pays the $25 in taxes indirectly when he buys something from the General Store. The General Store sends the tax that Joe paid to the government.
http://www.fairtax.org/images/content/pagebuilder/12920.jpg

We may report the tax rate as $25/$125 = 20 percent, which is the tax-inclusive rate (meaning that the tax is included in the base). Alternately, we may think of the tax rate as $25/$100 = 25 percent, which is the tax-exclusive rate (meaning the tax is excluded from the base). The 23 percent FairTax rate set out in HR 25/S 1025 is a tax-inclusive rate, as is the current personal income tax, whereas most state-level sales taxes are quoted on a tax-exclusive basis. For ease of comparison, FairTax.org gives the tax rate both ways. Both rates are relevant, since the FairTax is replacing an income tax system, and 23 percent correctly represents the tax burden compared to the current system.
To review some of the research that determined a 23% (inclusive) rate is correct, please read Taxing Sales Under the FairTax: What Rate Works (http://www.fairtax.org/PDF/Tax%20Notes%20article%20on%20FT%20rate.pdf)? This paper is a collaborative effort of 5 respected and independent economists.

Cut and pasting some answers from the site to help better answer ya'lls questions.

The FairTax will not be enforceable and evasion will be rampant"
The truth: More than 80% of all tax returns are eliminated under the FairTax--every individual filing. What remains are retail outlets collecting the FairTax. Of these, 80 percent of all retail sales now occur at large retail chains like Wal-Mart. The point is oversight will still reside under the Treasury Department but the government's responsibility will be over a far smaller "universe" of tax collection points making compliance oversight far less costly and far more effective than the current system which costs $265 billion a year in compliance costs and still comes up $350 billion a year short of what is owed.
Read more information about compliance in the FairTax white paper: FairTax Reduces Complexity, Compliance Costs and Noncompliance. (http://www.fairtax.org/site/DocServer/TheFairTaxReducesComplexityComplianceCostsAndNonco mplian.pdf?docID=601)
"The FairTax will not be revenue neutral (i.e. bring in the same revenue as the current system) at 23%"
The truth: The FairTax rate of 23% (when calculated inclusively like income tax rates) has been thoroughly researched to provide all the revenues now collected under both the income tax system and through FICA payroll taxes. Reports otherwise are largely based on the President's Advisory Panel on Tax Reform which declared the rate would have to be much higher. What the Panel failed to make clear in an amazingly shameless sleight-of-hand is that they never studied the FairTax legislation as it exists in pending legislation. They ignored $22 million of FairTax research and, instead, quietly devised their own national consumption tax which they loaded with the exemptions and deductions they felt were "politically realistic". They also failed to calculate the effects of elimination of the FICA tax on annual taxpayer burdens or on the distributional effects of the FairTax across the income spectrum. Upon completion--and after declaring a national consumption tax flawed--they then refused to publish their underlying assumptions.
For more information on this topic, see these research papers.

Taxing Sales Under the FairTax - What Rate Works? (http://www.fairtax.org/PDF/Tax%20Notes%20article%20on%20FT%20rate.pdf)
A Comparison of the FairTax Base and Rate (http://www.fairtax.org/site/DocServer/A_Comparison_of_the_FairTax_Base_and_Rate.pdf?docI D=761)
Comparing Average and Marginal Tax Rates under the FairTax and the Current System of Federal Taxation (http://www.fairtax.org/PDF/Comparing%20AverageandMarginalTaxRates-110206.pdf)

"The FairTax is not politically viable"
The truth: Great public policy changes do not happen easily. We believe, however, in the promise of the Founding Fathers that this is a nation, "of, by and for the people". In the last year we have seen more Congressional co-sponsors come on board faster than ever before. We have seen five of eight GOP candidates and one Democratic candidate embrace the FairTax. With increased media coverage, as at least one candidate has made this a central plank of his campaign, more and more Americans have come to understand the powerful benefits the FairTax offers the nation. They are, in turn, joining our growing citizen army and are beginning to communicate their wishes to their elected officials. All of this progress is a consequence of the body politic first learning about and then accepting the FairTax. As our ranks grow such pressure will increase on Members of Congress and at some point, the voice of the people will eclipse the voices of the relatively small number of Washingtonians who profit working the income tax system at great cost to the nation. Enactment of the FairTax will require an activist citizenry and a resurgence of what has been too often forgotten--public policy can and should be driven by the public. All that is required is that we all dare to be fair and remind our elected officials that they work for their constituents--not for the narrow self-interests of the tax writing committee, the lucrative tax lobby business or the academicians who have built careers around the complexity of the tax code.
For more information on this topic, see these research papers:

Tax Administration and Collection Costs (http://www.fairtax.org/site/DocServer/TaxAdministrationandCollectionCosts.pdf?docID=621)
A Macroeconomic Analysis of the FairTax Proposal (http://www.fairtax.org/PDF/MacroeconomicAnalysisofFairTax.pdf)
An Open Letter to the President, the Congress and the American People (http://www.fairtax.org/PDF/Open_Letter.pdf)
Fiscal Federalism - The National FairTax and the States (http://www.fairtax.org/site/DocServer/Fiscal_Federalism_-_The_National_FairTax_and_the_States.pdf?docID=801 )

"The FairTax is regressive and shifts the tax burden onto lower and middle income people"
The truth: The FairTax actually eliminates and reimburses all federal taxes for those below the poverty line. This is accomplished through the universal prebate and by eliminating the highly regressive FICA payroll tax. Today, low and moderate income Americans pay far more in FICA taxes than income taxes. Those spending at twice the poverty level pay a FairTax of only 11.5 percent -- a rate much lower than the income and payroll tax burden they bear today. Meanwhile, the wealthy pay the 23 percent retail sales tax on their retail purchases.
Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower-income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. Retaining the present tax system makes economic progress needlessly slow and frustrates attempts at upward mobility through hard work and savings, thus harming low-income taxpayers the most.
In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower-income families and individuals. In addition to receiving the monthly FairTax prebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more business taxes hidden in the price of goods and services, and used goods are tax free.
How can the FairTax generate lower net tax rates for everyone and still pay for the same real government expenditures? The answer is two-fold. Firstly, the tax base is dramatically widened by including consumer spending from the underground economy (estimated at $1.5 trillion annually), and by including illegal immigrants, those who escape their fair share today through loopholes and gimmicks. In addition, 40 million foreign tourists a year will become American taxpayers as consumers here. Secondly, not everyone's average net tax burden falls. For households whose major economic resource is accumulated wealth, the FairTax will deliver a net tax hike compared to the current system.
Consider, for example, your typical billionaire, of which America now has more than 400. These fortunate few are invested primarily in equities on which they pay taxes at a 15 percent rate, whether their income comes in the form of capital gains or dividends. In addition to having the income from their wealth taxed at a low rate, the principal of their wealth is completely untaxed either directly or indirectly. Assuming they and their heirs spend only the income earned on the wealth each year, the tax rate today is 15 percent. In contrast, under the FairTax, the effective tax rate is 23 percent. Hence, the very wealthy will pay more taxes when the FairTax is enacted. In a nutshell, those who spend more will pay more but low, moderate and middle income taxpayers will benefit from the greatest gains in reduced tax liabilities.
For more information on this topic, see Why the FairTax Will Work. (http://www.fairtax.org/site/News2?page=NewsArticle&id=9321&news_iv_ctrl=1521)

Hope those posts help answer some basic questions.

I notice there is a full court press going on with this subject throughout the net. Good to see the word is getting out there though I highly suspect the special interest groups wouldn't want this to go through.

I find it funny that someone who is discriminated against and vilified by what appears to be a majority in this country lacks the basic compassion for others in situations they might not have chosen.

I would hope that you will one day give out the same compassion you desire.


Just b/c I am gay does not mean I am perfect or give away my opinions. That's retarded even for you. What gives man? You're attacking everyone these days?

For households whose major economic resource is accumulated wealth, the FairTax will deliver a net tax hike compared to the current system.
Consider, for example, your typical billionaire, of which America now has more than 400. These fortunate few are invested primarily in equities on which they pay taxes at a 15 percent rate, whether their income comes in the form of capital gains or dividends. In addition to having the income from their wealth taxed at a low rate, the principal of their wealth is completely untaxed either directly or indirectly. Assuming they and their heirs spend only the income earned on the wealth each year, the tax rate today is 15 percent. In contrast, under the FairTax, the effective tax rate is 23 percent. Hence, the very wealthy will pay more taxes when the FairTax is enacted. In a nutshell, those who spend more will pay more but low, moderate and middle income taxpayers will benefit from the greatest gains in reduced tax liabilities.
How is this reconciled with the argument that lower taxes on capital gains increases taxes collected and encourages economic growth? If it's beneficial to tax capital gains at a higher rate, why don't we increase the capital gains tax?

Unless I'm misunderstanding Palarran part of the process here is to ditch all forms (read layers and layers) of various taxes to help get rid of loopholes/shelters. That way the rich , who might seem heavily taxed, don't have eleventy two ways to hide their wealth and avoid the taxes.

There would be no capital gains tax under the Fair Tax prop.

Just b/c I am gay does not mean I am perfect or give away my opinions. That's retarded even for you. What gives man? You're attacking everyone these days?

Rofl. I am telling you, he snapped. Every post is either a personal attack, a conspiracy theory about "fat cats" or a skewed interpretation of the law/politics.

Just wait till you ask him about the weather.

Fandros, how does the bill address online sales? I know I purchase a lot of things online to avoid CA sales tax. Seems like canada and the internet might swipe up all the revenue if there are no provisions.

I'm sure there will be multiple provisions dealing with online sales specifically for that purpose.

Yay we will have our own VAT!

But the claim is that the wealthy, who primarily make money through capital gains, will pay more taxes with the Fair Tax in place. How is that different from increasing the current capital gains tax? I'm assuming that not all of their income can currently be hidden from taxation--if that were the case, they would have no objection to raising the capital gains tax, because it wouldn't affect them.

You pay Sales Tax through purchase of new items. I don't know a better way of handling your question Palarran other than to say it's visible as opposed to the overall shadiness I see in today's system.

Let's experiment, suppose you give us extra DKP for tonights very tough raid.....

Okay , has nothing to do with Fairtax....just me wanting dkp for a rough raid tonight ;P

Fandros, how does the bill address online sales? I know I purchase a lot of things online to avoid CA sales tax. Seems like canada and the internet might swipe up all the revenue if there are no provisions.

As I understand it Weolf if you buy it , the residing point of transaction inside the US, you are taxed.

It doesn't fall on you to pay the tax, it's the company that's selling that tacts on the tax ( I guess this is where all the old IRS folks would go, to work for individual companies ;p ).

But the claim is that the wealthy, who primarily make money through capital gains, will pay more taxes with the Fair Tax in place. How is that different from increasing the current capital gains tax? I'm assuming that not all of their income can currently be hidden from taxation--if that were the case, they would have no objection to raising the capital gains tax, because it wouldn't affect them.

Keep raising cap gains and people will stop investing, meaning no revenue.

You can hide A LOT of money in the current system. You can't hide ANY money with VAT.

It is completely different. A rise in cap gains would discourage investment as I just mentioned, which would lower the amount raised. Should it be solely sales tax, they would not hide their money, and just spend it as normal. The VAT would already be included in the price. They will have more money to spend, so higher revenue. They also would not be hiding their money off shore and using it off shore, bringing even more money to the table.

Keep raising cap gains and people will stop investing, meaning no revenue.

You can hide A LOT of money in the current system. You can't hide ANY money with VAT.

It is completely different. A rise in cap gains would discourage investment as I just mentioned, which would lower the amount raised. Should it be solely sales tax, they would not hide their money, and just spend it as normal. The VAT would already be included in the price. They will have more money to spend, so higher revenue. They also would not be hiding their money off shore and using it off shore, bringing even more money to the table.

Thanks Weolf, much better explanation than I was able to give.

VAT? Is that what they have in Europe? It sounds vaguely familiar. Can someone explain it in layman's terms b/c I am totally lost.

As I understand it Weolf if you buy it , the residing point of transaction inside the US, you are taxed.

It doesn't fall on you to pay the tax, it's the company that's selling that tacts on the tax ( I guess this is where all the old IRS folks would go, to work for individual companies ;p ).

Yah I figured in the US, but my main concern would be canada. There would have to be a trade agreement. I do not think people will buy things from europe to save money. Shipping would kill most deals. The prices are also usually higher. Not to mention convenience.

The government would still have some oversight and enforcement I would think, so that probably would not be necessary. It would be almost the same routine as now just with a higher % collected, no?

The number tossed about on the site is actually 23% taxed.

Fil basically , in a nutshell I can understand the following takes place.

You receive your paycheck free of FICA, Social Sec or any such tax (state/fed included).

When you purchase an item, at a 23% increase, those monies are collected by the store and given to the govt.

Every month a prebate check would come to your house based on your income and household size. Below a certain $$ figure the rebate check is fairly decent and help those below the poverty level survive.

Did that help?

VAT? Is that what they have in Europe? It sounds vaguely familiar. Can someone explain it in layman's terms b/c I am totally lost.

Valued Added Tax I think is the exact definition. It is already included in the price. The price on the tag is the price you pay. So instead of paying $10.85 or so for a $10 product in CA, you would pay only the $10 shown.

I think it is psychologically more appealing. If people went to the register with a $300 ipod and then see the $65 in taxes, it would be a bit of a turn off. Especially knowing so beforehand. If the price is just $365 when rung up, same as tag shown, they probably will not even realize it.

I lived in South Africa for a while and the VAT is like 15% or something. For the first 2 weeks I didn't even realize I was paying taxes. I also rationalized impulse purchases much easier since I just looked at the tag and then did not have the same second thought I have while in the states "oh, and how much is tax going to be?" So it did kind of spur by buying.

So giving a gift of money in exchange for a gift of services or goods would be tax free with a system like that?

This graph will help explain what I was talking about as well.
http://static.howstuffworks.com/gif/trickle-down-economics-1.gif

So giving a gift of money in exchange for a gift of services or goods would be tax free with a system like that.

I believe so, infact the receiving party would receive more since the IRS wouldn't get their sticky paws during the transaction.

So giving a gift of money in exchange for a gift of services or goods would be tax free with a system like that.

I don't think anything is taxed second hand so I doubt that will be a problem. I don't foresee the major retail stores "gifting" you goods after you "gifting" them money. It may happen under the table a bit, but the vast majority of purchases occur in Walmart, Target, Kmart, Apple, etc.

It would happen in possibly smaller stores under the table, but I bet they included that into their 23%.

I don't think anything is taxed second hand so I doubt that will be a problem. I don't foresee the major retail stores "gifting" you goods after you "gifting" them money. It may happen under the table a bit, but the vast majority of purchases occur in Walmart, Target, Kmart, Apple, etc.

It would happen in possibly smaller stores under the table, but I bet they included that into their 23%.

Correct, second hand items are virtually invisible to the system. So second hand cars/tvs/etc wouldn't have the tax and should be cheaper for folks looking for more bang on their buck.

Re: Capital gains. In this case, it would be a win-win. The wealthy couldn't get away with not paying, and it would give incentive to more investment since that would be tax-free.

Question I have, and am unsure how to best phrase it is:

If we all have more money in our pocket won't that actually cause inflation of a sort? More spending in a gold rush sort of mentality would cause a rise in prices no?

Question I have, and am unsure how to best phrase it is:

If we all have more money in our pocket won't that actually cause inflation of a sort? More spending in a gold rush sort of mentality would cause a rise in prices no?

There might be some re-balancing in the short-term. Depending on their previous tax setup and what percentage of their purchases were tax-free, different groups might gain/lose long-term buying power, but it shouldn't be a significant shakeup for most.

Re: Capital gains. In this case, it would be a win-win. The wealthy couldn't get away with not paying, and it would give incentive to more investment since that would be tax-free.

You also would eliminate the double tax (taxing the corporation for profits, and THEN taxing the same profits for the investor) giving people more money to spend in the retail shops.

This would also allow for companies to blow away their past earnings, meaning larger dividends, meaning more money in every investor's pocket. Not to mention create more jobs, limit layoffs, give more bonuses, etc.

For those who say this only effects rich people blah blah blah, in 2002 49.5% of Americans owned stock one way or another.

Question I have, and am unsure how to best phrase it is:

If we all have more money in our pocket won't that actually cause inflation of a sort? More spending in a gold rush sort of mentality would cause a rise in prices no?

I don't think so. Inflation is usually caused by increasing the money supply. There will be the same amount of dollars as before.

I think more importantly stores will be cautious to raise core prices because the initial shock of seeing all products with a 23% increase will be discerning enough. Any additional price increases could result in loss of business.

The ultimate way inflation would be stemmed would be if people also saved a portion of their earnings. That is kind of wishful thinking though.

For those who say this only effects rich people blah blah blah, in 2002 49.5% of Americans owned stock one way or another.

That's a misleading statistic, and you probably know it.

edit: To clarify for those who don't know the numbers:

The wealthiest 1% of Americans receive roughly 70% of all capital gains income. The top 10% receives ~90%.

If you drop down to the median American earner, they average about $500 in capital gains each year and pay less than $100 tax on that.

This issue of the capital gains tax cuts truly is an issue of the wealthy getting one over on us all. It's cut and dried when you look at the numbers. At this point, it's so obscene that even some of the wealthy have called for higher taxes on themselves (NetFlix founder, Warren Buffet, etc).

Of course, I'm sure Obama has capital gains high on his TODO list, so it's basically a non-issue to debate.

I should correct that it is 49.5% of American households. Other than that, how is it misleading? Not including all the retirement and savings plans offered by businesses, 20% households owned individual stocks in their personal portfolio.

If you drop down to the median American earner, they average about $500 in capital gains each year and pay less than $100 tax on that.



That seems a little low, do you have a link? I thought I once read they spend $300-400 in cap gains tax.

IF that number is correct, with no cap gains, and no company taxes, the average American would save $500-700 annually. Compounded over time that is a pretty hefty sum.

Hopefully the edit makes it clear. It's misleading because the number (purposely) doesn't discuss the extreme divergence in the magnitude of those 49.5%'s holdings. For the vast majority of them, the difference between 0 and 100% capital gains tax would be trivial, yet some use the 49.5% number to paint a capital gains increase as something that would hurt the middle class. That's grossly misleading.

edit: Don't have a link. I think it's actually lower than that, but I rounded up when I memorized it. Google to corroborate (should be easy).

That's not the relevant point. Only a tiny fraction receives most of their income via capital gains, and they're very happy about barely getting taxed on it.

That's not the relevant point. Only a tiny fraction receives most of their income via capital gains, and they're very happy about barely getting taxed on it.

I was merely stating that no cap gains/corporate tax would be additional money in many American's pockets. Between higher dividends, and not being taxed twice, I wouldn't be surprised if the average stock holder saved $500/yr. If that WAS the case, reinvested yearly that would be probably $80-100k after 30 years.

The Laffer curve doesn't give us any useful information unless we also know which side of the curve we are on. Notice how the x-value for the revenue maximizing point is not given--that's because we don't know what it is.

Back to my original point, essentially my question is, should the wealthy be paying more in taxes? From my limited experience, most people that favor the FairTax oppose raising the capital gains tax. Both actions would raise the effective tax rate on the wealthy, and I'm trying to understand why one method is good while the other is bad (and not just "less good").

Right now, the top 5-10% should definitely be paying more taxes, or we should be paying a lot less. Higher income should not mean you pay a lower tax rate, but that's what's currently happening somewhere in the mid six-figures and up.

I think I already explained it, Palarran.

Edit: I also think Art thinks 28% is the X. I can't recall for sure though. I am basing it off memory from a previous interview.

---------------------------

Keep raising cap gains and people will stop investing, meaning NO revenue.

You can hide A LOT of money in the CURRENT system. You can't hide ANY money with VAT.

It is completely different. A rise in cap gains would discourage investment as I just mentioned, which would lower the amount raised. Should it be solely sales tax, they would not hide their money, and just spend it as normal. The VAT would already be included in the price. They will have more money to spend, so higher revenue. They also would not be hiding their money off shore and using it off shore, bringing even more money to the table (capital accessible to US banks, which would encourage more lending and cheaper lending).

If that's the case, since 15% is less than 28%, shouldn't we be raising the capital gains tax towards 28%?

I think you are over complicating a singular portion of todays tax code when in fact the entire system needs to be leveled and a Sales Tax added.

It's a codependent system with reems of checks and balances Palarran and part of the healing process is a level line for everyone.

Not to be confused with a flat tax mind you, it's not a flat tax per se.

Keep raising cap gains and people will stop investing, meaning NO revenue.

What do you think Warren Buffet would do if capital gains were 29%, Buyza? Not invest? Would he hold his money in hard currency and watch inflation erode it? Unlikely.

There is a whole set of talking points that you're bouncing back to us that are designed to resonate with the upper middle class, but actually only benefit the top 5%. Don't fall for that (I used to myself).

If that's the case, since 15% is less than 28%, shouldn't we be raising the capital gains tax towards 28%?

Well raising cap gains now would be retarded. Besides the fact no one has gains, you would only accelerate the collapse of the stock market.

Apparently I was way off haha. That was his idea for income tax I guess.

http://corner.nationalreview.com/post/?q=ZGI2ZWUzYzBkZGY1ZjdkYWNmYTFjZDQxMGJlOGRjMTI=

According to that interview, he supported the cap gains cut to 15%.

I don't think anything is taxed second hand so I doubt that will be a problem. I don't foresee the major retail stores "gifting" you goods after you "gifting" them money. It may happen under the table a bit, but the vast majority of purchases occur in Walmart, Target, Kmart, Apple, etc.

It would happen in possibly smaller stores under the table, but I bet they included that into their 23%.

If nothing is taxed second hand, we'd never pay taxes if we shopped at Walmart, Target, or Kmart. They purchase the items from a smaller company, which often purchases the items from another smaller company. Its not as cut and dry as you are making it out to be.

If nothing is taxed second hand, we'd never pay taxes if we shopped at Walmart, Target, or Kmart. They purchase the items from a smaller company, which often purchases the items from another smaller company. Its not as cut and dry as you are making it out to be.

Private party is what he's saying. It is pretty simple (until you have to file one of those mfer forms to the state).

Ummm Kelraz I'm sorry but you are setting a false example there.

Walmart and Kmart and such are considered primary. They are not second hand stores by any means.

For this Act the original sales of an item to John Q Public will have a 23% sales tax added. No additional layers of tax are included at any step. It doesn't matter if Walmart purchased the lot of items from a smaller vendor or directly from the factory.

It's the sale to the end user that matters. Does that help clarify that sticking point there?

Well raising cap gains now would be retarded. Besides the fact no one has gains, you would only accelerate the collapse of the stock market.

Apparently I was way off haha. That was his idea for income tax I guess.

http://corner.nationalreview.com/post/?q=ZGI2ZWUzYzBkZGY1ZjdkYWNmYTFjZDQxMGJlOGRjMTI=

According to that interview, he supported the cap gains cut to 15%.

Here's Laffer for you:

IU6PamCQ6zw

I wouldn't bet anything on his ideas.

What do you think Warren Buffet would do if capital gains were 29%, Buyza? Not invest? Would he hold his money in hard currency and watch inflation erode it? Unlikely.

There is a whole set of talking points that you're bouncing back to us that are designed to resonate with the upper middle class, but actually only benefit the top 5%. Don't fall for that (I used to myself).

I think if you doubled his rate it would greatly change his investment strategy.

The way I see it is that investing in stocks is a risk. If you double the cap gains rates, you decrease the reward without equaling decreasing the risk. I view it as a risk/reward ratio.

Investors might find other forms of investment. For instance:

Invest off shore
Invest in Commodities (inflation hedge)
Invest in TIPS (inflation hedge)
Private corporation

This is nothing to do with the upper class. I think the lower and middle class should pay 0% cap gains. They should be encouraged as much as possible to invest in the stock market. Not just for retirement purposes, but to further invest in the country as a whole.

As someone who generates nearly half of his income from investments, I can tell you it would be a huge help to me if I didn't have to pay the few thousand I do annually.

On another topic, no taxes related to buying a house would probably help fight the housing bubble bust.

Here's Laffer for you:

IU6PamCQ6zw

I wouldn't bet anything on his ideas.

I'm in class so can't really watch the video. Is that the one where he bets peter schiff a penny about whether the US goes into a recession or not?

Just because he makes mistakes, doesn't mean his idea is wrong.

Peter Schiff was dead on about the collapse of the financial markets. People are hailing him as a genius and following his every word as if we was Obama. The only problem is his investors are down 50-60% in 2008. More than those who invested in the US, lol.

wow, so much circlejerking in one thread, i am truly amazed.

didnt really read all of it, but the fair tax is a terrible terrible idea. it would be a de facto regressive tax system, since the people who spend nearly all or all of their pay check would in fact be paying more percentage wise than rich people, which would be great for the billionaires, i guess.

also: i loel at your laffer curve

Peter Schiff was dead on about the collapse of the financial markets. People are hailing him as a genius and following his every word as if we was Obama. The only problem is his investors are down 50-60% in 2008. More than those who invested in the US, lol.

And Laffer managed to be even more wrong than Schiff!

Point being, supply-side economics is something that is far from proven valid. According to the CBO, the last 8 years may have driven another nail in the idea's coffin.

Following a Laffer curve around today, instead of using some common sense, is probably about as good an idea as following his investment advice in 2006.

wow, so much circlejerking in one thread, i am truly amazed.

didnt really read all of it, but the fair tax is a terrible terrible idea. it would be a de facto regressive tax system, since the people who spend nearly all or all of their pay check would in fact be paying more percentage wise than rich people, which would be great for the billionaires, i guess.

also: i loel at your laffer curve

Apparently you've put ....well no research into this subject as you're way off base. That's all well and good but if you're going to be lost don't come wading in and act the fool.

wow, so much circlejerking in one thread, i am truly amazed.

didnt really read all of it, but the fair tax is a terrible terrible idea. it would be a de facto regressive tax system, since the people who spend nearly all or all of their pay check would in fact be paying more percentage wise than rich people, which would be great for the billionaires, i guess.



Of course you didn't read it, or you would have read this part:

The FairTax actually eliminates and reimburses all federal taxes for those below the poverty line. This is accomplished through the universal prebate and by eliminating the highly regressive FICA payroll tax. Today, low and moderate income Americans pay far more in FICA taxes than income taxes. Those spending at twice the poverty level pay a FairTax of only 11.5 percent -- a rate much lower than the income and payroll tax burden they bear today. Meanwhile, the wealthy pay the 23 percent retail sales tax on their retail purchases.

Consider, for example, your typical billionaire, of which America now has more than 400. These fortunate few are invested primarily in equities on which they pay taxes at a 15 percent rate, whether their income comes in the form of capital gains or dividends. In addition to having the income from their wealth taxed at a low rate, the principal of their wealth is completely untaxed either directly or indirectly. Assuming they and their heirs spend only the income earned on the wealth each year, the tax rate today is 15 percent. In contrast, under the FairTax, the effective tax rate is 23 percent. Hence, the very wealthy will pay more taxes when the FairTax is enacted. In a nutshell, those who spend more will pay more but low, moderate and middle income taxpayers will benefit from the greatest gains in reduced tax liabilities.

I loelz at your failure to read before posting.

Of course you didn't read it, or you would have read this part:



I loelz at your failure to read before posting.

so youre lowering the tax on poor and working classpeople, and hoping rich people are going to spend enough money so that the revenue from the VAT will cover it? yea, good luck with that.

I'm still trying to grasp how a 23% sales tax on all items favors the rich?

23% is 23% to everyone, it's not as though they ask for your annual income when you purchase a tv at the check out line.

so youre lowering the tax on poor and working classpeople, and hoping rich people are going to spend enough money so that the revenue from the VAT will cover it? yea, good luck with that.

Wiggo, before you look even more foolish than usual do yourself a favor and actually read what we're talking about eh?

Not really a VAT so much as a national sales tax. Our current tax code is a joke, no if an or buts about it.

Laffer is pretty loelzable. While seemingly logical he's never provided any hard data on where X is isolated for other factors. Given the existence of investors in much higher tax markets, X could be as high 95%.

I'm still trying to grasp how a 23% sales tax on all items favors the rich?

23% is 23% to everyone, it's not as though they ask for your annual income when you purchase a tv at the check out line.

because they spend nowhere near the same percentage of their monthly (or yearly, whatever) income. this should not be hard to understand.

so youre lowering the tax on poor and working classpeople, and hoping rich people are going to spend enough money so that the revenue from the VAT will cover it? yea, good luck with that.

What do rich people do with their money? They spend it.

The 23% is based on current spending by the rich. The rate of spending is in fact expected to increase due to higher incomes.

Though I will gladly review the research you have to support your claims. Or do you oppose the idea strictly on ideology?

Wiggo, before you look even more foolish than usual do yourself a favor and actually read what we're talking about eh?

Not really a VAT so much as a national sales tax. Our current tax code is a joke, no if an or buts about it.

a VAT IS a sales tax, and yes, sweden has one.

because they spend nowhere near the same percentage of their monthly (or yearly, whatever) income. this should not be hard to understand.

How much do they spend?

Just ignore him Weolf, he freely admits he isn't going to bother reading the links nor does anyone rank him up there with the Economists that are signing on to this idea.

If he's not going to read the info he's nothing but one of those two old men from the Muppet show throwing insults and tomatos out just for their own laughs.

What do rich people do with their money? They spend it.

The 23% is based on current spending by the rich. The rate of spending is in fact expected to increase due to higher incomes.

Though I will gladly review the research you have to support your claims. Or do you oppose the idea strictly on ideology?

i do oppose it based on ideology, but i also oppose it based on it being fucking stupid.

a VAT IS a sales tax, and yes, sweden has one.


So Wiggo did you bother to read about the prebate and targeted poverty line?

No, really take the time

What do rich people do with their money? They spend it.

You don't get rich by spending money. People in normal income situations spend 50-80% (or 150% if they live here!). People with more money than most individuals see in their whole lives spend more like 10%.

I'm not opposed to FairTax but there are some serious implementation questions that still need to be answered on it. That being said it can't be much, if any, worse than our current clusterfuck.

You don't get rich by spending money. People in normal income situations spend 50-80% (or 150% if they live here!). People with more money than most individuals see in their whole lives spend more like 10%.

I'm not opposed to FairTax but there are some serious implementation questions that still need to be answered on it. That being said it can't be much, if any, worse than our current clusterfuck.

im not really that informed on your current tax system, but why not take some time and figure out a good one instead of this abomination?

Loelz @ wiggo for opposing it solely based on ideology. I forgot how funny the gay eurofucks were on this board :) Is wearing sunglasses inside still all the rage?

I really would like to see some documented research on how much the "rich" spend of their income. Just based on personal experience, going to a high school where the parents probably were collectively worth 5 billion, I saw the "rich" spending money like crazy.

You'll note you don't gain much traction when you won't bother to read it. It is a good one and millions of dollars and tons of thinking have went into it.

Quit throwing out baseless bs and read it, link is there.

Loelz @ wiggo for opposing it solely based on ideology. I forgot how funny the gay eurofucks were on this board :) Is wearing sunglasses inside still all the rage?

I really would like to see some documented research on how much the "rich" spend of their income. Just based on personal experience, going to a high school where the parents probably were collectively worth 5 billion, I saw the "rich" spending money like crazy.

solely? learn to read, you dumbfuck.

solely? learn to read, you dumbfuck.

pot/kettle/black since you can't bother to read it and just throw out your judgements here bub.

solely? learn to read, you dumbfuck.

Yes, svenne, it is only based on ideology. Unless you have other research than "it's dumb" haha.

I am pretty sure I have read everything :)

I guess I would be bitter too if I was some lower class european :(

Yes, svenne, it is only based on ideology. Unless you have other research than "it's dumb" haha.

I am pretty sure I have read everything :)

I guess I would be bitter too if I was some lower class european :(

why dont you go ahead and hit us with another meaningless anecdote brosef?

edit: im not sure why you consider me having an ideology an insult, do you even know what the word means?

why dont you go ahead and hit us with another meaningless anecdote brosef?

edit: im not sure why you consider me having an ideology an insult, do you even know what the word means?

Sorry, Bög, did you miss the part where I said document research was needed, and I was merely sharing my personal experience?

Once again, I know english is your second language, but try to keep up :)

Being an ideologue is an insult. Clearly YOU don't know what it means.

Here, let me help you.

http://www.merriam-webster.com/dictionary/ideologue

1 : an impractical idealist : theorist (http://www.merriam-webster.com/dictionary/theorist)
2 : an often blindly partisan advocate or adherent of a particular ideology (http://www.merriam-webster.com/dictionary/ideology)

Sorry, Bög, did you miss the part where I said document research was needed, and I was merely sharing my personal experience?

Once again, I know english is your second language, but try to keep up :)

Being an ideologue is an insult. Clearly YOU don't know what it means.

Here, let me help you.

http://www.merriam-webster.com/dictionary/ideologue

1 : an impractical idealist : theorist (http://www.merriam-webster.com/dictionary/theorist)
2 : an often blindly partisan advocate or adherent of a particular ideology (http://www.merriam-webster.com/dictionary/ideology)

yes, i am neither of those, but thanks again for trying mate.

once again, anyone with a brain understands that rich people spend less of their income percentage wise than poor people, i know you seem incapable of logical thought, but come on...atleast give it a shot.

You probably don't realize how little tax the wealthy are currently paying here.

yes, i am neither of those, but thanks again for trying mate.

once again, anyone with a brain understands that rich people spend less of their income percentage wise than poor people, i know you seem incapable of logical thought, but come on...atleast give it a shot.

Loelz at you backing away from being an ideologue after realizing what it actually meant haha.

I never suggested that the rich spend more or equal to poor people. I just said I wanted to see documented research of how much they did in fact spend. 10% seemed pretty low.

Have you considered hooked on phonics?

yes, i am neither of those, but thanks again for trying mate.

once again, anyone with a brain understands that rich people spend less of their income percentage wise than poor people, i know you seem incapable of logical thought, but come on...atleast give it a shot.

Quite wrong actually and beside the point. Point of fact it doesn't change the arguement one iota.

23% of any of the monies they spend is still better than the monies they hide in shelters/dodges/questionable charities.

If everyone knows that everyone pays I think it might actually bridge a few gaps around here.

You're more than welcome to rail and bitch at the Americans as you see fit. You and yours have been messy far longer than we've been around.

Loelz at you backing away from being an ideologue after realizing what it actually meant haha.

I never suggested that the rich spend more or equal to poor people. I just said I wanted to see documented research of how much they did in fact spend. 10% seemed pretty low.

Have you considered hooked on phonics?

loelz at you accusing me of being an ideologue without backing it up like a drooling retard, for the reading impaired among us, naming no names (buyza), having an ideology != being an ideologue.

Quite wrong actually and beside the point. Point of fact it doesn't change the arguement one iota.

23% of any of the monies they spend is still better than the monies they hide in shelters/dodges/questionable charities.

If everyone knows that everyone pays I think it might actually bridge a few gaps around here.

You're more than welcome to rail and bitch at the Americans as you see fit. You and yours have been messy far longer than we've been around.

yes, it might be better (i freely admit i dont really know what the tax structure currently enables them to dodge)...but you know what might be even better? removing the loopholes.

what gaps are you talking about btw?

Good luck with that. Look at your own IKEA.

Thing is, our tax code is so unweildy as to make a gordien knot appear to be a simple game of jump rope (without the double dutch!!).

There are layers, and exceptions and special interest groups on top of reams and reams of tax code for nearly each and every tax code.

Truth is, and it's part of the solution, the IRS has become such a red tape monster that it no longer serves a purpose except to feed itself and it's machinations with the cash it's supposed to be gathering for our govt's use.

Good luck with that. Look at your own IKEA.

questionmark

questionmark

Do some research on what IKEA's effective tax rate is.

Do some research on what IKEA's effective tax rate is.

from memory IKEA is owned by a holding company based in holland, so i dont know what your point is.

IKEA is a Swedish company. Regardless of where the holding company resides, if you guys can't even patch up the loopholes in a country as socialized as Sweden, how would you expect that advice to work in a more Capitalist economy?

IKEA is a Swedish company. Regardless of where the holding company resides, if you guys can't even patch up the loopholes in a country as socialized as Sweden, how would you expect that advice to work in a more Capitalist economy?

The IKEA Group is the biggest franchisee of Inter IKEA Systems B.V. Inter IKEA Systems B.V. is not owned by INGKA Holding B.V., but by Inter IKEA Holding S.A. registered in Luxemburg (http://en.wikipedia.org/wiki/Luxemburg), which in turn is part of Inter IKEA Holding registered in the Netherlands Antilles (http://en.wikipedia.org/wiki/Netherlands_Antilles). The ownership of the holding companies has not been disclosed.[3] (http://en.wikipedia.org/wiki/Ikea#cite_note-2)

....

anyway, yes, i agree, tax dodging is awful and very very hard to deal with, especially when the perpetrator(s) uses tax havens. but that is something you deal with through international bodies (the imf, or the world bank, for example) and sanctions. what this has to do with loopholes in the swedish or american tax code is beyond me though, we cant really force companies to stay in a country, can we?

we cant really force companies to stay in a country, can we?

So now we should focus our efforts on an apparently unsolvable problem that will drive even more companies out of the country? Er?

Oh, and here's IKEA for you:

So now we should focus our efforts on an apparently unsolvable problem that will drive even more companies out of the country? Er?

well, i dont know why you brought in companies into this at all, isnt your corporation tax quite high already? i thought this was about personal income tax? fwiw, when i said loopholes i meant various capital gains loopholes.

well, i dont know why you brought in companies into this at all, isnt your corporation tax quite high already? i thought this was about personal income tax? fwiw, when i said loopholes i meant various capital gains loopholes.

Obviously, there isn't a tax shelter where you can turn your W2 in, enter the Konami code, and pay 0% tax. Corporations, trusts (hello IKEA), and other "company" structures are part of most tax shelters.

You can't easily separate them.

That's why a sales tax may end up being a vastly better solution. At least one that's fair. All the shell corporations in the world won't eliminate a sales tax at the register.

Obviously, there isn't a tax shelter where you can turn your W2 in, enter the Konami code, and pay 0% tax. Corporations, trusts (hello IKEA), and other "company" structures are part of most tax shelters.

You can't easily separate them.

That's why a sales tax may end up being a vastly better solution. At least one that's fair. All the shell corporations in the world won't eliminate a sales tax at the register.

so instead of dealing with the problem at the root, apply a half-arsed bandaid? yea, not buying it.

It's a solution, not a band-aid.

Income taxes just beg to be evaded. As long as there are wealthy, there will be entire industries dedicated to constantly finding new methods of legally evading taxes. You can't evade taxes charged at the register though.

Instead of having this huge bureaucracy to operate an income tax that isn't even effective, we should use and enhance the existing sales tax infrastructure.

Let's hear your ideas on how to magically fix the loopholes. How about how you'd suggest we collect taxes from illegals, drug dealers, etc?

It's a solution, not a band-aid.

Income taxes just beg to be evaded. As long as there are wealthy, there will be entire industries dedicated to constantly finding new methods of legally evading taxes. You can't evade taxes charged at the register though.

Instead of having this huge bureaucracy to operate an income tax that isn't even effective, we should use and enhance the existing sales tax infrastructure.

Let's hear your ideas on how to magically fix the loopholes. How about how you'd suggest we collect taxes from illegals, drug dealers, etc?

haha, because with the fairtax, a black market (where you can purchase shit without any sales tax..) wouldnt exist ?

your argument for this plan would hold more water if people actually spent a "fair" relative share of their income, unfortunately, reality disagrees with you.

That's why a sales tax may end up being a vastly better solution. At least one that's fair. All the shell corporations in the world won't eliminate a sales tax at the register.

Except if there is no register. Each and every year, more and more commerce moves to the internet.

You would need some sort of governmental control agency patrolling the internet, searching for sales. And the if the sales tax was significantly higher.... there has never been a better vehicle for a black market than the internet.

haha, because with the fairtax, a black market (where you can purchase shit without any sales tax..) wouldnt exist ?

your argument for this plan would hold more water if people actually spent a "fair" relative share of their income, unfortunately, reality disagrees with you.

You're just talking in circles here. Maybe you're too hung up on the word "fair".

The purpose of THE "Fair Tax" isn't to be absolutely fair. Do you think progressive income taxes are absolutely fair?

As others have said, you should really at least go read up on what this proposal actually is.

Except if there is no register. Each and every year, more and more commerce moves to the internet.

You would need some sort of governmental control agency patrolling the internet, searching for sales. And the if the sales tax was significantly higher.... there has never been a better vehicle for a black market than the internet.

Online wouldn't be an issue. They'd just require the credit card processors to report on each merchant's volume, similar to today's 1099. You'd be astonished at how much of that is already tracked in detail today anyway.

Cash at registers would probably be a bigger issue than online.

You're just talking in circles here. Maybe you're too hung up on the word "fair".

The purpose of THE "Fair Tax" isn't to be absolutely fair. Do you think progressive income taxes are absolutely fair?

As others have said, you should really at least go read up on what this proposal actually is.

if i say people spend a regressive amount every month relative to their income, would you agree, or disagree? and yes, i think progressive tax systems are superior to flat or regressive systems.

if i say people spend a regressive amount every month relative to their income, would you agree, or disagree? and yes, i think progressive tax systems are superior to flat or regressive systems.

People in the US have been spending more than 100% of their incomes well into the six-figures. That covers some 90% of the population here.

The wealthy have been paying less than half the effective tax rate of the middle class for years anyway.

What you're saying sounds truthy, but is orthogonal to the discussion at hand.

on the topic of tax evasion..

http://www.nytimes.com/2009/02/19/business/worldbusiness/19ubs.html?_r=1

UBS, the largest bank in Switzerland, agreed on Wednesday to divulge the names of well-heeled Americans whom the authorities suspect of using offshore accounts at the bank to evade taxes. The bank admitted conspiring to defraud the Internal Revenue Service and agreed to pay $780 million to settle a sweeping federal investigation into its activities

score baby.

if i say people spend a regressive amount every month relative to their income, would you agree, or disagree? and yes, i think progressive tax systems are superior to flat or regressive systems.

That's not saying much since everyone thinks progressive tax systems are better ... unless they personally can find a way around it anyway. The issue with eliminating tax evasion is not about the failure or success rates of enforcement, but by removing an entire class of crime from even being possible.

It's much harder to fake where your consumption is than where you put money and how much of it you got from where. Once you get off employer payrolls the whole thing is basically the honor system with minimal real cross-checking that is intentionally impeded by the byzantine layers of obfuscation possible when you're moving money around through investment services -- and we have seen how well that works.

If the Madoff case illustrates anything it is that the various offices at the SEC and IRS responsible for monitoring this sort of thing are all combinations of woefully understaffed or inept, since that's probably your Scams 101 textbook introductory case of fraud anyone can spot.

Online wouldn't be an issue. They'd just require the credit card processors to report on each merchant's volume, similar to today's 1099. You'd be astonished at how much of that is already tracked in detail today anyway.

Cash at registers would probably be a bigger issue than online.

Nailed it. I however think cash at registers really wouldn't be that big oa problem. It would happen, but be fairly minimal in the big picture.

You also are dead on about the illegal immigrants, drug dealers, and other black market dealings. There is a multi-trillion dollar black market when you factor all of that in. Those same people will spend their money in numerous legal locations (as they do today) resulting in billions of dollars of collected revenue.

Here is an excerpt I found which relates back to my previous point. It kind of explains it more clearly with actual numbers.

In addition, supporters state that the overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses.[42] (http://en.wikipedia.org/wiki/FairTax#cite_note-beaconhill-41) Economic Census figures for 2002 show that 48.5 percent of merchandise sales are made by just 688 businesses ("Big-Box" retailers (http://en.wikipedia.org/wiki/Big-box_store)). 85.7 percent of all sales are made by 92,334 businesses, which is 3.6 percent of American companies. In the service sector, approximately 80 percent of sales are made by 1.2 percent of U.S. businesses.[26] (http://en.wikipedia.org/wiki/FairTax#cite_note-thetruth-25)

Focusing on the individual citizen is largely pointless since the vast majority of those people already pay taxes more or less accurately anyway, being they're on payroll -- FairTax may be a net win for them but it's not going to fundamentally change their tax losses. The considerations are for appropriate tracking and tariffs of inter-corporation or trades around intangible assets like large amounts of money, which is where some of the FairTax ideas run into problems.

You obviously don't want to tax every single iteration of "consumption" otherwise long supply chain goods would get taxed far more than shorter ones, and while that would be a net win on a number of fronts in terms of localized economies, complex devices like cars or TVs or trains or whatever have potentially thousands of differently sourced components that go through dozens of different hands. With current income tax setups this basically only gets taxed at the source and destination since the rest is counted against end profits and acts as an implicit tax deduction (although there are of course numerous loopholes with the way this works as well). However adding too many exceptions like that completely defeats the idea of consumptive taxing. To the extent of my reading there has not been a clear proposal of how to handle the rebating of that sort.

The remaining issue is how to appropriately tax people who spend insignificant amounts of their real income. Warren Buffet certainly does not spend anything near a comparable amount of his income OR worth as anyone you will ever see working hourly. Whereas even in stable, tenable economies the "Working classes" spend upwards of 50% of their income in the immediate term and upwards of 90% of it during their lifetimes, anyone with billions of dollars in liquid assets is not spending their entire dividend check on food and lodging. Moreover many of their expenditures are in fact moving invested asset value around. These are not, strictly, consumption and often no good or service is tangibly exchanged. So not only should these people be paying well above the 23% idealized FairTax rate on any sort of purchases, some alternate means of taxing the social cost of their other activities (namely the near total control of production capital) must also exist.

They'd just require the credit card processors to report on each merchant's volume

Im not sure about international laws.... but....

If the point of purchase is offshore, or in another country can the US government tax that merchant? I can see a big company like Sony or something.. but what about smaller companies, using commercial mail instead of using easily tracked and scanned bulk.

Additionally, with a 30% mark up on items, you would see a black market the kind that has never been seen before. It would be like prohibition on steroids as organized crime would replace Walmart as the biggest retailers in the country.
Why not? Its not like Don Corleone has to report his income any more.

Flea Markets, Auction Sites, classified ads... uncontrollable. You would have to heavily rely on self reporting, and then you would need a enforcement agency.....

I would think multi-chain systems would not be taxed every transaction. That wouldn't make much sense.

Once again I would happily agree with your assumption of billionaires once I saw an actual study of what they spend annually. I am not saying they do spend the equivalent of the average joe, but I would wager most of the upper class still spends a hefty sum.

I am a bit queasy with the idea of "spend more of your income or we will take it from you" I would be more willing to accept a slightly higher tax on certain high ticket items. Assuming that they do NOT spend an adequate amount of money in relation to their income.

On the flip side, the money will EVENTUALLY get spent. Somewhere sometime it will be used. You can't hold onto it forever - or else it would be pointless to have it in the first place!

I do feel though overall this plan will encourage people to save. It will make financial planning FAAAAR easier. Everyone will know exactly what they make, exactly how much they should expect each paycheck (without any fluctuations in regards to taxes they don't understand), and exactly what it will cost them in the end game for their purchases.

The decline in savings for the average american has been a big problem.

US Personal Savings Rate - Yearly:
Year/ US Household Savings Rate (as a % of disposable income) 1991/ 7.3
1992/ 7.7
1993/ 5.8
1994/ 4.8
1995/ 4.6
1996/ 4.0
1997/ 3.6
1998/ 4.3
1999/ 2.4
2000/ 2.3
2001/ 1.8
2002/ 2.4
2003/ 2.1
2004/ 2.1
2005/ 0.4
2006/ 0.7
2007/ 0.6 Source: OECD

I do feel though overall this plan will encourage people to save. It will make financial planning FAAAAR easier. Everyone will know exactly what they make, exactly how much they should expect each paycheck (without any fluctuations in regards to taxes they don't understand), and exactly what it will cost them in the end game for their purchases.

Incredibly weak argument - I don't know anyone with a steady paycheck that doesn't know exactly to the penny what their paycheck is gonna be every other week. I on the other hand have an entirely flexible income weekly (really monthly) and yet I know exactly what I'm paying to the IRS even though I may make anywhere from $5,000 to $50,000 more or less than last year and managed to save quite a bit. Not having federal income taxes won't be a barometer for who can create a savings account.

You might have heard of a guy named Keynes --


The fundamental psychological law, upon which we are entitled to
depend with great confidence both a priori and from our knowledge of
human nature and from the detailed facts of experience, is that men are
disposed, as a rule and on the average, to increase their consumption as
their permanent income increases.

The share that they spend out of their permanent income depends on their relative permanent income, and the greater their relative income the smaller that share.”

Looking up anything on "relative permanent income" or "lifecycle expenditure/consumption/income theory" will net you a wealth of information unfortunately I don't have any neat graphs showing that as your net worth enters the billions, you're not spending 50% of it on your home, utilities, and food, but seriously, think about it. (if Xapp is still around he may have something as he can get into academic paper archives that I can not)


US Census Data on Expenditures -- all households above $150k average income are in a single group that averages (drum roll please) .. $128k.

http://www.census.gov/compendia/statab/tables/09s0666.pdf


By the same census data there were 7,669,000 families with over $150k reported annual income spent a total of $981.6 billion, compared to 70,784,000 families that spent ALL THE REST. $3,425 billion. Clearly there is a linear correlation here. Right.




As an interesting aside, I saw http://www.safehaven.com/article-8033.htm while looking and noticed it pegged the year that the current financial crisis REALLY started, with respect to the inability of consumers to spend money they actually had available, as 1999 -- but it's all the media's fault.

It's partially unrelated but http://web-xp2a-pws.ntrs.com/content/media/attachment/data/econ_research/0705/document/ec053007.pdf was also pretty interesting.

Yea.. the more I think about, the more Im certain that this wouldn't work.

The reality is that the current system is less intrusive and would require less population control than the Fair Tax. This system is just not feasible in a system where we use hard currency. Maybe in the future when everything is credit and there are no actual bills or currency being used... but not in our system.

For God sakes, its estimated that people dodge paying the sales tax where it is now (roughly 8%) about 10% of the time. If you increase the level of taxation another 25 - 30%, your rate of avoidance is going to increase exponentially because you have dramatically increased peoples motivation to not pay it. And at its core, its a voluntary taxation system. This country would collapse under the weight of the crime and corruption that this would generate.

Cash would be king and people would stop using credit. You would be able to walk into almost every corner store and buy black market with cash. It be would stupifyingly easy.

Some ways off the top of my head....
Way undercharging for various goods and services and taking the difference as cash under the table.
Reporting damage or lost goods, then selling them for cash.
Lets say I want to buy a Yacht, why wouldn't I hire a person from another country as a "consultant" pay them a large amount of cash, then have that foreign national purchase the yacht in, lets say, Bermuda then sell it to me for 1$ when he gets back. This is an extreme example, but it shows that in a Fair Tax system you would need a fantastic amount of Federal government control in the form of Price Controls. Food is an excellent example of this. The government would have to set floor levels for food, and make it criminal to sell for less.

Im a farmer. I grow Wheat. (to use the classic example from the SC case). People come to me and give me money for my crop, If I don't have to report my income, why wouldnt I sell some of my wheat for cash and avoid the 30% tax mark up of my product.... and could I afford NOT to do it?

Fair Tax would make corruption and criminal activity by merchants as necessary for their survival in a competitive free market. If the guy down the street has figured out a way to sell his goods at far less than I can, I either adjust or go out of business.


*edit
Oh and it just fucking came to me.
This bill calls for the destruction of the IRS and onus to be put on states for collection and, presumably, enforcement.

So basically, the Federal Government becomes 100% dependent on the state governments for its revenue. I thought we tried the Articles of Confederation already. This is just an end around for some Anti Federalist bullshit.

Double edit.
And what would you do with FICA?

Even in today's system, if you sell something for below your cost you still have to pay the sales tax on your wholesale cost. One way or the other, someone's going to pay the tax.

The flea market would be similar. You generally need a license and tax ID number for most of those things already. If not, it's a private party sale, which specifically isn't taxed under either system.

Most of these issues have long been solved, since sales tax isn't exactly new. Centralizing it on the consumption side doesn't create new problems, it just makes things more simple for everyone. What enforcement is needed could then be focused on one system and made more efficient and effective.

Oh and it just fucking came to me.
This bill calls for the destruction of the IRS and onus to be put on states for collection and, presumably, enforcement.

Who do you think is already collecting sales taxes now?

Sales Tax? Sure, the states... But the Federal Government would no longer be collecting its own money. It would be totally reliant on State Governments and their goodwill.
Unless did a direct tax on the states themselves based on apportionment.

But then that wouldnt work either. What would you do about states like South Carolina that at the Present, take in $1.85 dollars FROM the Fed than it pays.

And I dont think it has been solved San. It may have been solved in the current system, but everything completely changes if the rate of taxation on sales increases that dramatically. I dont see how you would avoid massive levels of scale and abuse that make what we see now laughable.

There's already a lot of money flowing up and then back down. Wouldn't be that large a change in that aspect.

Also don't forget, the Federal government would still have very significant revenues. Cut all income taxes (individual and business) and they still have about the same revenues as in 1994.

This bill calls for the destruction of the IRS and onus to be put on states for collection and, presumably, enforcement.

So basically, the Federal Government becomes 100% dependent on the state governments for its revenue. I thought we tried the Articles of Confederation already. This is just an end around for some Anti Federalist bullshit.

Double edit.
And what would you do with FICA?

You know that's kind of how it was for a long time. In any case the state enforcement agencies already exist, though they'd obviously need more funding and manpower to replace the IRS infrastructure. You really should read the bill, as those actually ARE addressed, as opposed to much more intractable policy questions.

And I dont think it has been solved San. It may have been solved in the current system, but everything completely changes if the rate of taxation on sales increases that dramatically. I dont see how you would avoid massive levels of scale and abuse that make what we see now laughable.

I really don't see a credible reason to expect that much fraud. There's going to be gray areas in any system, but the majority of transactions today are far too traceable to support any serious issues.

On top of that, the things that would be taxed are also tracked to the retailer when they're bought wholesale (specifically for this reason).

Most of the current "fraud" in sales tax is due to the states dropping the ball in collections. If it were their primary source of revenue, enforcement would drop the current fraud level by an order of magnitude in a heartbeat.

I don't get it, I think some folks are intentionally making this hard.

There is no escaping paying the sales tax by paying cash. Price is included in the sales tag...

Inventory controls already in place would demand X amount of cash transferred to State coffers.

Methinks some need to read the subject matter.

Well it would certainly cause a huge spike in sales in inventory control devices RFID, Bar Code etc...

You might have heard of a guy named Keynes --

By the same census data there were 7,669,000 families with over $150k reported annual income spent a total of $981.6 billion, compared to 70,784,000 families that spent ALL THE REST. $3,425 billion. Clearly there is a linear correlation here. Right.




Isn't Keynes that guy all the republicans tout? As well as Art Laffer? :D

If I am doing my math right (I won't lie, it's about late and I am bad at math as it is) then the upper class is spending 250% more than the lower? The sub 150k if you will.

On top of that, this lower class would get prebates up to 10k annually, which in some cases would come to nearly 25% of their income.

Seems relatively fair to me. As I said before, the money people make will EVENTUALLY get spent. I just don't see how we can punish saving. Especially since it would defeat the purposes of the fair tax to then go and additionally tax the wealthy.

I would love to see a controlled experiment done. Either in hawaii or alaska (no state lines to cross to get things easier). See how it plays out over 3-5 years.


For God sakes, its estimated that people dodge paying the sales tax where it is now (roughly 8%) about 10% of the time. If you increase the level of taxation another 25 - 30%, your rate of avoidance is going to increase exponentially because you have dramatically increased peoples motivation to not pay it. And at its core, its a voluntary taxation system. This country would collapse under the weight of the crime and corruption that this would generate.a whole 10%? How many "dodge" income tax in one form or another? 60%? 80%? 100%? lol. I rarely have met people who do not stretch deductions a little too much, or forget to report a few bucks. Not to mention the real criminals who hide away billions of gains.

I think you can just put in some good set parameters to fight the avoidance. Coupled with very stiff penalties, and a few public obliterations of these criminals, you could limit a lot of it I think.

How would we collapse under crime and corruption though? Mind elaborating?

This is just a ploy by the rich to further lower their already meager tax burden as a % of total income.

As Malse has already discussed, the wealthy spend far less of a % of their total income than the middle and lower class. If a billionaire only spends 50%(and I would think this is a very high figure for the super rich) of their total income for the year (AND spend all of that in the US, which we all know won't happen) than their tax burden is less than 12% of their income.

The middle class will take on most of the burden of a flat tax. The poor will avoid much of the taxation through their rebates. The rich will avoid the taxation because they don't spend near as much of their income as a % of income than the middle and lower class AND they are much more likely than either group to be able to skirt the system either through buying off shore or finding other loop holes. The middle class will get hit with most of this burden because the rebates won't offset much, but they still spend the vast majority of their income.

This isn't a flat tax Taleren and far more to it than you've read.

Read it, L2 apparently nor have a few of the other detractors.

I'm well aware that it's not a flat tax. It's a tax made on purchases. The simple fact is, it's more of a tax to people that spend a larger % of their total income, which is to say anyone below the upper 5% of our economy. It's just yet another way to write the tax code that will enable the filthy rich to avoid paying a proportionate amount like everyone else.

Sure the rich spend more money than someone who isn't rich. The rich spends less of a % of their total income though than the middle and the lower class. What that means, is they will have in effect a lower tax rate than those same groups of people (disregarding the effect that a rebate will have on a lower class person/family).

But what proportion of those purchases would be taxed under the Fair Tax for different groups? The poor would be buying predominantly untaxed necessities, right?

If you think paying tax on all purchases would be less tax for the wealthy than they're paying now, I think you misunderstand just how little tax they're currently paying. It's pretty damn easy to avoid taxes once you're off that W2.

I was being generous when I said the ultra rich would spend 50% of their income. Malse stated something like 10% earlier in the thread (it would be hard to prove either). Let's say for sake of discussion that Malse is right. If they spend 10% of their income, they have an effective tax rate on earnings of 2.3%. I somehow doubt they are paying less tax than 2.3% of their earnings currently. Even with my generous 50% of their earnings being spent, they have an effective tax rate of basically 11.5%.

So what I'm seeing here is the poor are going to be paying near no taxes with rebates (which being a 'liberal' I don't have a huge problem with, they are hit harder with unemployment burdens, inflation, etc., and they tend not to have much of a tax burden currently), the middle class with current spending habits having an effective tax rate of somewhere between (assuming current rates of consumption) 17.25% (23% on 30,000 (for a 40k earner after rebate) in purchases after rebate for a lower middle class individual consuming all they make, which isn't a stretch, and may be higher if they have to use credit to get by) and 21.46...% for an upper middle class person/family making 150,000 (deducting 10k in rebates), and then we have the upper class individuals paying somewhere between 2.3 and 11.5% tax rate.

How's that right? Why should I pay that much more of a higher % tax burden than the nations wealthy (for reference, the wife and I made a combined $132,000, so yes we would be in the hardest hit group under this proposed system)? Of course I have some bias being in the group with the highest burden, but why should I have a higher % of tax burden than someone that makes a huge amount more money than my family?

but why should I have a higher % of tax burden than someone that makes a huge amount more money than my family?

Because your group doesn't have the money to pay politicians to pass legislation that's favorable to them!


The best part is...that's the real answer.

How's that right? Why should I pay that much more of a higher % tax burden than the nations wealthy (for reference, the wife and I made a combined $132,000, so yes we would be in the hardest hit group under this proposed system)? Of course I have some bias being in the group with the highest burden, but why should I have a higher % of tax burden than someone that makes a huge amount more money than my family?

When do you think was the last time the wealthy paid a higher % tax burden than the middle class? Hint: You weren't alive then.

You seem to think that a consumption-side setup would shift the balance, but that's not accurate.

Forget about making the wealthy pay their fair share. Some are conscience bound and make up for the disparity through philanthropy. The rest, we can't force to do anything they don't want to. Period. With their resources, they can lobby/evade their way out of anything we throw at them. Especially problematic is that "they" includes many of those voting on the laws (on both sides of the aisle).

This is about making things better down here where most of us live.

When do you think was the last time the wealthy paid a higher % tax burden than the middle class? Hint: You weren't alive then.

You seem to think that a consumption-side setup would shift the balance, but that's not accurate.

Forget about making the wealthy pay their fair share. Some are conscience bound and make up for the disparity through philanthropy. The rest, we can't force to do anything they don't want to. Period. This is about making things better down here where most of us live.

So you're suggesting that the middle class is always going to pay a higher % and we just need to suck it up, then what is the point of changing the system at all? If the wealthy aren't paying more than now, and the poor aren't paying more than now, the middle class ultimately is going to have to pay the exact same amount now to keep funding all of the government's expenses PLUS the massive debt we just laid on ourselves.

How does increasing my tax burden while reducing the burden further for the wealthy help in 'making things better down here where most of us live?' How does increasing the tax burden on the non wealthy help us?

You will say it won't increase our burden I'm sure, but the money has to come from somewhere, and reducing a couple hundred billion in IRS spending won't make up that difference.

It won't reduce the burden on the wealthy. There's absolutely no proof of that. You're talking about the wealthy's current tax burden as if they get a W2 and pay a certain percentage of their money in.

In all likelihood, even all the partners at your law firm are paying a much lower percentage of their real income in taxes than you are. As wealth increases, ability to hide it only increases more with those resources.

Meanwhile, if you don't tax our income, you encourage us to save and/or invest instead of having an average negative savings rate. How do you think the wealthy become wealthy?

All this talk of "We'll make the wealthy pay their share instead" is not grounded in reality at all.

Oh, and you guys keep ignoring the massive amount of currently unreported illegal income that would begin being taxed. That is huge.

What I don't get is...

When did it become a crime to become wealthy? Why should they pay a higher % of their total to make you feel right?

Hint, their % dollar total will dwarf ours even if it is a smaller amount which equates to more money in the system.

It's absolute bullshit to equate having wealth with being a criminal of some sort.

Make the sales tax a set 23% and it's absolutely fair to everyone.

Christ right now they're dodging paying much of anything and ya'll swallow that load easily enough.

Heh, I think the bottom line on that one is that every single one of the people complaining about the wealthy would avoid the taxes too if they had the means.

Of course they would, and odds are they do what they can to avoid paying their full tax rate now. I get tired of having a heavier tax burden because Joe Downthestreet wants to pop out 5 plus kids. I weary of paying more because Sally Soandso says she pays cash to a charity.

Sure the answer is I could have more kids and fabricate more deductions and that is exactly what's wrong here.

Oh but yes let's focus on the % of thier income the wealthy would spend in the stores. How is this relevent, it's not it's a damn strawman.

Or better yet show you haven't read the material by saying the taxation at every level of the supply chain will really raise prices....jeeeeeze.

Its a better system by far than anything we have now. However keep listening to your own talking heads and swallow the status quo.

Or better yet, read a bit eh?

Of course they would, and odds are they do what they can to avoid paying their full tax rate now. I get tired of having a heavier tax burden because Joe Downthestreet wants to pop out 5 plus kids. I weary of paying more because Sally Soandso says she pays cash to a charity.

Sure the answer is I could have more kids and fabricate more deductions and that is exactly what's wrong here.

Oh but yes let's focus on the % of thier income the wealthy would spend in the stores. How is this relevent, it's not it's a damn strawman.



Oh the irony.

What I don't get is...

When did it become a crime to become wealthy? Why should they pay a higher % of their total to make you feel right?
I don't necessarily think they should pay a higher rate than me, but they definitely shouldn't pay a lower rate.

And no, adding a national sales tax won't make them pay the same rate as me. They don't spend near the % of their income each year as anyone of a lower socioeconomic scale than them. If taxation is all based upon purchases, the people that spend a higher % of their income obviously will face the higher tax burden. There's no way to avoid that fact.

What I don't get is...

When did it become a crime to become wealthy? Why should they pay a higher % of their total to make you feel right?

Hint, their % dollar total will dwarf ours even if it is a smaller amount which equates to more money in the system.

It's absolute bullshit to equate having wealth with being a criminal of some sort.

Make the sales tax a set 23% and it's absolutely fair to everyone.

Christ right now they're dodging paying much of anything and ya'll swallow that load easily enough.


It never became a crime to be wealthy.

Here's the difference. If you buy a computer for $1000.00 you bought it with money that you paid tax on. So you had to make $1280.00 to spend that $1000.00 dollars and then when you bought it you paid an additional...lets say 6% in tax on your purchase. so add $60.00 to that computer. so now you paid $340.00 in taxes just to buy a $1000.00 dollar computer.

If I buy a $1000.00 computer I spend $1060.00 dollars to buy that computer on top of that I now pay taxes on income reduced by $1060.00 and I have my new computer and did I mention the room in my house that I use that computer in becomes a write-off as does a portion of the electricity I use and did I mention when I order food to go that becomes a better write-off than when I actually eat out.


And it's legal.

That is one serious advantage I have over you income wise...that is why those making 200k a year or more should pay a tax rate consistent with those who don't...it's called fair.

Care to elaborate or just going to throw out a pithy comment after being shown you didn't read the source material? It's already apparent and frankly this is too dire of a subject to wade in and blast without reading. I might be a bit edgy after that Wiggotroll showing up and doing his usual rants.

Oh, and you guys keep ignoring the massive amount of currently unreported illegal income that would begin being taxed. That is huge.

That is a huge fallacy. Lets talk about my housekeeper. When she comes twice a week, I pay her in cash $100. How is she getting taxed despite me purchasing her service from her?

Someone posted it before and you decided to ignore it. When items are costing an extra 32% cash will become king and no one would use credit cards. There is going to be just as many people dodging the taxes then as there is now.

I don't necessarily think they should pay a higher rate than me, but they definitely shouldn't pay a lower rate.

They wouldn't pay a lower rate, they'd pay exactly the same.

wow, sir you earn more than 150K, you are guilty as charged and should work the rock pile!!! sorry!

Care to elaborate or just going to throw out a pithy comment after being shown you didn't read the source material? It's already apparent and frankly this is too dire of a subject to wade in and blast without reading. I might be a bit edgy after that Wiggotroll showing up and doing his usual rants.

So because I don't agree with you or your website you quote (which obviously has a stated goal, don't tell me it's not biased) I somehow am uneducated or didn't read it? Perhaps I just don't agree with you.

That is a huge fallacy. Lets talk about my housekeeper. When she comes twice a week, I pay her in cash $100. How is she getting taxed despite me purchasing her service from her?

Someone posted it before and you decided to ignore it. When items are costing an extra 32% cash will become king and no one would use credit cards. There is going to be just as many people dodging the taxes then as there is now.

You are one of those not bothering to read but have had someone think this for you.

Cash/credit doesn't matter as the price tag already reflects the monies needed to be spent. You don't skip by paying cash.

Fairtax.org read it or absent yourself from silly comments please.

Rover, those deductions are shit and should be ditched along with the rest of the tax code. Of course you don't want it to change, it's designed to be abused thusly.

My ex runs a daycare out of her home ( one I built her in the early 90's ) she writes off tons of shit. Makes jack compared to me but because she writes it all off has tons more spending cash than I do.

Sorry, it's abused and convulted and will change.

So because I don't agree with you or your website you quote (which obviously has a stated goal, don't tell me it's not biased) I somehow am uneducated or didn't read it? Perhaps I just don't agree with you.

Tale you've made several statements that are factually untrue so yes you are uneducated on the topic. Yes I am biased and yes I've spent years following this topic.

It'll work and if you want to climb out of this cesspool recession it could very well be a viable solution.

Oh wait, have our govt spend more of your kids future that way they'll never exceed their parents. Which is something every generation has wished for their children in the past. Maybe it's changed, sad.

Tale you've made several statements that are factually untrue so yes you are uneducated on the topic. Yes I am biased and yes I've spent years following this topic.

It'll work and if you want to climb out of this cesspool recession it could very well be a viable solution.

Oh wait, have our govt spend more of your kids future that way they'll never exceed their parents. Which is something every generation has wished for their children in the past. Maybe it's changed, sad.

Nice strawman there when you attempt to throw the term 'strawman' out like it's some meme when someone disagrees with you.

And how do you know my statements are factually untrue? They are no more untrue than the site you spout as gospel. Sure I haven't done the 'research' they have done, but any research can be molded to fit some desired result especially if they are trying to push forward their 'cause.'

Everything in this thread has been opinion. From everyone. Just because my opinion is different than your opinion doesn't make either of them more or less valid.

That is a huge fallacy. Lets talk about my housekeeper. When she comes twice a week, I pay her in cash $100. How is she getting taxed despite me purchasing her service from her?

Someone posted it before and you decided to ignore it. When items are costing an extra 32% cash will become king and no one would use credit cards. There is going to be just as many people dodging the taxes then as there is now.

Eh? You don't pay sales tax on labor. Bad example.

Why do people keep coming up with these irrelevant counter-examples of labor or private party sales that aren't supposed to be taxed? Hard to fathom a system where your income isn't immediately attacked by the jackals at the IRS?

You are one of those not bothering to read but have had someone think this for you.

Cash/credit doesn't matter as the price tag already reflects the monies needed to be spent. You don't skip by paying cash.

Fairtax.org read it or absent yourself from silly comments please.

Rover, those deductions are shit and should be ditched along with the rest of the tax code. Of course you don't want it to change, it's designed to be abused thusly.

My ex runs a daycare out of her home ( one I built her in the early 90's ) she writes off tons of shit. Makes jack compared to me but because she writes it all off has tons more spending cash than I do.

Sorry, it's abused and convulted and will change.


Oh no I think it should change...I'm all for a flat type equal tax. I've got no problem going to that.

And how do you know my statements are factually untrue? They are no more untrue than the site you spout as gospel. Sure I haven't done the 'research' they have done, but any research can be molded to fit some desired result especially if they are trying to push forward their 'cause.'

Everything in this thread has been opinion. From everyone. Just because my opinion is different than your opinion doesn't make either of them more or less valid.

Huh? Read the proposed legislation if you don't trust FairTax.org. You'll find it to be the same stuff, and very comprehensive.

That's why Fandros is annoyed. Everything you guys are bitching about is already covered in the bill, except the fallacy of thinking that the wealthy are currently paying tax as if they get a W2. It also doesn't cover the fact that there is no Easter Bunny either, FYI.

Because they've listened to someone on the radio/tv/newspaper spouting the great truths of the current code vs any change.

The special interest groups want all the murk surrounding the current tax code as it allows for shady money grubbing tactics.

Taleren, as opposed to your opinion I've read the site and followed it for years. Your statements about the rich not paying a big enough % under the suggested change show lack of understanding of the subject matter.

There are some might big names, non political, attached to the studies involving this proposal. Many with creds far and above you or mine.

So yes, tis a strawman to throw out that weak sauce. It isn't germane to the subject at hand which I do believe fits the bill. It's derailed the actual conversation to suit a topic having jack and shit to do with the topic at hand. I'm not rich by any means and I surely don't think it'll only be fair if more cash is taken out of a rich man's pocket because he has more.

Summon Robin Hood to rob from the rich and give to me!!

And what has been my biggest issue in every post I've made here? It's the wealthy not paying their fair share of the tax burden to the tune of lower actual tax rates than the lower/middle class.

I didn't say the system now was working well either. But taxing only on purchases helps the wealthy even more than the current sham of a system. Just because the wealthy aren't 'currently paying tax as if they get a W2,' doesn't mean we should just let them fuck over whatever solution we come up with to the current issues with the tax code.

Resigning ourselves to a situation where the wealthy rape the system while everyone else is more heavily burdened isn't a proper solution. Sanchek, you state constantly that people should speak about injustices, but you are telling me that here's an injustice that I should just accept? Don't you see the hypocrisy in that line of thinking?

Because they've listened to someone on the radio/tv/newspaper spouting the great truths of the current code vs any change.


I'm glad you know how I live my life, and make ASSumptions.

1) The only thing I listen to on the radio (outside of music) is sports talk radio. Mike and Mike on the way to work and whomever is on ESPN radio on the way home (right now it's Doug Gottleib, but that depends based upon whatever sports 'season' it is)
2) I haven't watched anything on the news really since the election. I have been avoiding ANY of the 24 hour news channels as they are ALL shit.
3) I only get the Sunday newspaper to cut out the coupons and throw the rest away.

People are able to form their own opinion without someone else making up their mind for them. Not everyone is willing to do this, but I know personally I can. You dismissing my opinion simply because it doesn't jive with your own is no better than those you are trying to slam with your posting style.

Great, you do your research at a website with a stated goal of passing 'fair tax.' How is that any less biased than a person that watches Fox News/CNN/or MSNBC to form their opinion?

How are they raping the system if they pay the same 23% sales tax regardless of your annual income?

They're not, and it's a tangental point at best since it's more of a peeve of yours rather than a central point.

Something you aren't taking into consideration. I don't know about you but I am more likely to do a bit of 2nd hand shopping (which wouldn't be taxed) than Mr Moneybagsonthehill.

It's wrong at some level I can't even fathom to say a rich person should pay more than the 23% to make it fair to you. That 23% they pay in a year will rack up to more than you can come close to spending. So in truth they are giving more to Washington overall.

I'm glad you know how I live my life, and make ASSumptions.

1) The only thing I listen to on the radio (outside of music) is sports talk radio. Mike and Mike on the way to work and whomever is on ESPN radio on the way home (right now it's Doug Gottleib, but that depends based upon whatever sports 'season' it is)
2) I haven't watched anything on the news really since the election. I have been avoiding ANY of the 24 hour news channels as they are ALL shit.
3) I only get the Sunday newspaper to cut out the coupons and throw the rest away.

People are able to form their own opinion without someone else making up their mind for them. Not everyone is willing to do this, but I know personally I can. You dismissing my opinion simply because it doesn't jive with your own is no better than those you are trying to slam with your posting style.

Great, you do your research at a website with a stated goal of passing 'fair tax.' How is that any less biased than a person that watches Fox News/CNN/or MSNBC to form their opinion?

Mainly because it happens to be one of the major talking points of those that oppose it without any sort of factual backing? Sorry if you're bearing the brunt here , but I hear it from the special interest groups ( and their paid mouthpieces in washington) bandy it about to appease those not informed on the subject matter.

Flat out doesn't matter 23% is ultimately fair to everyone. Perhaps not to your mindset of RichRevil (again I am assuming) but fair regardless.

Taleren, as opposed to your opinion I've read the site and followed it for years. Your statements about the rich not paying a big enough % under the suggested change show lack of understanding of the subject matter.

Are you delusional enough to think that the rich got rich by spending all their money? Do you really think they are going to pay anywhere close to the portion of their salary in taxes on a purchase based system than anyone middle class or lower that's spending the vast majority of their income?

Are you delusional enough to think that the rich got rich by spending all their money? Do you really think they are going to pay anywhere close to the portion of their salary in taxes on a purchase based system than anyone middle class or lower that's spending the vast majority of their income?

Have you been shit on by the big bad rich man to the point you think they should just throw good money after fair money just to make you feel better?

READ THE SUBJECT MATTER, specifically the prebate portion and it'll appease you I think. Otherwise you just are annoying me with your willful ignorance to think the rich will get away with something here.

Each month, and i've already posted this, a prebate check is cut to each househould based on income/householdsize. The poor will get a bigger/better check.

Not filing, not having dodges to hide thier income alone will mean the rich will pay more than they are now.

Have you been shit on by the big bad rich man to the point you think they should just throw good money after fair money just to make you feel better?

READ THE SUBJECT MATTER, specifically the prebate portion and it'll appease you I think. Otherwise you just are annoying me with your willful ignorance to think the rich will get away with something here.

Each month, and i've already posted this, a prebate check is cut to each househould based on income/householdsize. The poor will get a bigger/better check.

Not filing, not having dodges to hide thier income alone will mean the rich will pay more than they are now.

A prebate helps the poor for sure. And that was one of my biggest issues with a flat tax program as we've discussed it over the years. Notice that hasn't even been a talking point to me since we've been discussing it recently, because it DOES address that issue I had (see YES I did read about it).

Go back a page, I said this purchase based tax program burdens the middle class (not the upper class, and certainly not the lower class with the prebates).

I simply will never think that a middle class person paying a larger % of their income in taxes than a wealthy person is right. Period. A system that bases tax revenues specifically on purchases WILL tax a person that spends a higher % of their income a larger % of their income than someone who can save(or reinvest) huge portions of their income.

Sure middle class people can save more than they do now, and they should be encouraged to do so. And to a point this helps motivate said person to do so, BUT (and this is the key to me) regardless of what they are capable of saving will be HUGELY less as a % of their total income than a wealthy individual. This means they will pay a higher % of their income into taxes than said wealthy person.

Now, you ask when a wealthy person shit on me. That's not what this is about to me. I'd personally love to be rich, I'd love for everyone to be rich. What bothers me is (whether under the current system, or under a purchase based tax system) a wealthy person paying a lower % of their income to taxes than people that aren't nearly as well off.

So, let's increase the prices of goods for people who have a higher annual income?

Wow, that sounds fair....

Well, we'll just have to disagree on this one. They'll pay more per year than you or I will pay and that's as fair as it gets. They shouldn't pay more to assuage your feeling that they are paying a lesser % of their total. That's their good fortune since they are the one wealthy. Doesn't mean anything really in a Socialist state such as ours.

They'll pay more $$ that's fair.

btw you and I would also recieve prebate checks. For a family of 4 making 40k I think it was a 400 buck check. I can't recall atm.

Where did I say that? Nice strawman though.

If you think you can make the wealthy pay a percentage of their income equal to that the middle class pays, you really don't have any ability to participate in a discussion of feasible changes to our system.

I'd like it to rain cotton candy on Thursdays and vodka on Sundays. Probably about as likely.

Well, we'll just have to disagree on this one. They'll pay more per year than you or I will pay and that's as fair as it gets. They shouldn't pay more to assuage your feeling that they are paying a lesser % of their total. That's their good fortune since they are the one wealthy. Doesn't mean anything really in a Socialist state such as ours.



Being wealthy should not assure the person that they pay a lower % in personal taxes than someone not as well off.

If you think you can make the wealthy pay a percentage of their income equal to that the middle class pays, you really don't have any ability to participate in a discussion of feasible changes to our system.

Sure you could, but you'd actually have to prosecute white collar crime.

Sure you could, but you'd actually have to prosecute white collar crime.

The IRS does aggressively prosecute the people it can find who are breaking the law.

It is naive to think that will ever be effective against the wealthy. Not to mention, most of the best tax shelters are legal.

Continuing to complicate the tax code with the cat and mouse game of trying to close all the loopholes is futile. With the resources that the wealthy can bring to bear, it's trivial to find new loopholes anytime the old ones are closed. In fact, convolution the tax code only makes this process easier.

Being wealthy should not assure the person that they pay a lower % in personal taxes than someone not as well off.

So it's nothing to you that they'll actually pay a larger dollar amount annual than you'll ever pay? It's also not a salient point that you and I are likely to purchase second hand vehicles/items than they will and wouldn't pay taxes on them as opposed to the wealthy?

You're stuck on the % of annual income as opposed to the dollar figure. Okay well long as you realize no taxation system that I know of (outside a revolt!) has ever been in place anywhere.

Especially not here in the ole US of A where atm the middle class is overburdened with taxs.

The IRS does aggressively prosecute the people it can find who are breaking the law.

It is naive to think that will ever be effective against the wealthy. Not to mention, most of the best tax shelters are legal. Continuing to complicate the tax code with the cat and mouse game of trying to close all the loopholes is futile. With the resources that the wealthy can bring to bear, it's trivial to find new loopholes.

That's the case with the current system, and the proposed system here in this thread.

I just don't understand why some of the people here think it's an either/or? I don't understand why people that that either the current status quo or fairtax are the ONLY options.

Now I'm not an economist. It's not my lot in life to write tax code (just as it's not with anyone here on this forum). That doesn't mean I can't point out inequities without being branded a moron.

There are no loopholes with the proposed system. Please read.

That's the case with the current system, and the proposed system here in this thread.

The loopholes suggested here in a sales tax system have all been strawmen or flat-out inaccurate. Explain what you think these loopholes will be.

So it's nothing to you that they'll actually pay a larger dollar amount annual than you'll ever pay? It's also not a salient point that you and I are likely to purchase second hand vehicles/items than they will and wouldn't pay taxes on them as opposed to the wealthy?

You're stuck on the % of annual income as opposed to the dollar figure. Okay well long as you realize no taxation system that I know of (outside a revolt!) has ever been in place anywhere.

Especially not here in the ole US of A where atm the middle class is overburdened with taxs.

And that's my problem with the solution you prefer. It does nothing to correct the issue with the middle class bearing more of the burden.

And no it doesn't mean shit to me that the wealthy pay a larger monetary amount than me when the % of what they actually pay is negligible compared to what a larger portion of the US pays as a % of income.

I'd be much more likely to agree with a true flat tax system that builds in the rebates up to the poverty level for everyone. Then everyone (except for the poor and lower middle class) will pay a similar % of their total income in taxes.

He's going to go back to the % issue again.

The only way that will happen is with a flat tax.

And that ain't gonna happen, unless the Socialists take over....

*edit* income redistribution, Comrade?

And no it doesn't mean shit to me that the wealthy pay a larger monetary amount than me when the % of what they actually pay is negligible compared to what a larger portion of the US pays as a % of income.

I'd be much more likely to agree with a true flat tax system that builds in the rebates up to the poverty level for everyone. Then everyone (except for the poor and lower middle class) will pay a similar % of their total income in taxes.

Again, terribly naive. Good luck with that one anytime in our lifetimes (excluding actual revolt).

Maybe we can "hope" that into existence, because it sure isn't happening otherwise!

jesus...

You keep referencing that the upper class will pay a lesser % of a personal tax...

There is not such creature as personal tax in the system. You are only taxed on what you spend. To level out the playing field a monthly prebate check is cut to each household to help cover living expenses that will be taxed while making purchases that month.

Really doesn't get more fair than that. No the rich should not pay more, but having them pay, having everyone pay ( including tourists and such) when making purchases will take the burden off the middle class.

Personally, I'd far rather go after 29% of the trillions in unreported money due to illegal activities than hope and dream that we can over-tax the people who pay for the bills to be written in the first place. Love how everyone ignores that awesome advantage of a sales tax.

The loopholes suggested here in a sales tax system have all been strawmen or flat-out inaccurate. Explain what you think these loopholes will be.

Hell I'm not rich, I don't know all the current loop holes in the current tax system.

I could see people trying to buy things in other countries and trying to smuggle them in (much like drugs now) to attempt to save 23%.

The super rich will buy their yachts, planes, etc in other countries. Unless there's some form of usage tax, that will be a way to by pass taxes on those types of purchases.

How about earning money in the US but having residence in another country? Won't have to pay any taxes on any of the money you are earning in the US.

Anything I put here will have fallacies, because, no for a discussion on this level, I can't research each idea I have. Neither can any of the rest of you. You throw out 'ideas,' but I am the one with all the burden of proof when I have an idea.

Everything in this thread has been opinion. From everyone.

I take issue with that, I have math!

Huh? Read the proposed legislation if you don't trust FairTax.org. You'll find it to be the same stuff, and very comprehensive.

That's why Fandros is annoyed. Everything you guys are bitching about is already covered in the bill, except the fallacy of thinking that the wealthy are currently paying tax as if they get a W2. It also doesn't cover the fact that there is no Easter Bunny either, FYI.

Neither issue I brought up is adequately addressed in the bill. Taleren is beating around the bush on one, but here they are again:


There must be some secondary tax system for capital gains and the incomes of the very rich because otherwise the system becomes punitively regressive. These people do not consume directly anywhere near the relative level of their social impact (which is the reason people are taxed, if we recall, so the society itself can function) so there must be some other way their social "costs" are accounted. This isn't opinion, this is a known policy question to known economic realities[1]. I know you're all real big fans of huge, expansive, corpulent government, consider for a moment just how much Federal effort goes into programs that cater to people with control over capital or production versus all the rest versus how much of the population that is.

Secondly, there is a big gap regarding what happens to long chain sales system before something hits retail, which is also where the biggest black market opportunities are in the FairTax system. Under a VAT, every transaction stage is taxed and rebated, under FairTax, you have to reliably locate the end consumer for every taxable transaction. This is easy for Xboxes and cotton candy, it's not so easy for things like tracts of farmland. This particular problem is going to be the single largest source of complexity in any sort of consumption tax.



[1] You will not find any treatise in economics that is unaware that consumption taxes are inherently regressive, going back to as long as there have been consumption taxes. There was an argument over road tolls in Persia (hi Jedd!) thousands of years ago.

Again, terribly naive. Good luck with that one anytime in our lifetimes (excluding actual revolt).

Maybe we can "hope" that into existence, because it sure isn't happening otherwise!

No more naive than thinking we can go back to the gold standard.

There is also a potential massive tourism hit making this country effectively 20% more expensive to visit than it was previously to tourists who pay their own income tax to their own countries. I know this is small, and there is probably international trade issues as well which wouldn't be nearly as small. Its effectively adding a 20% price tag to any American good getting shipped outside of this country, and American goods are already too expensive.

Hell I'm not rich, I don't know all the current loop holes in the current tax system.

I could see people trying to buy things in other countries and trying to smuggle them in (much like drugs now) to attempt to save 23%.

The super rich will buy their yachts, planes, etc in other countries. Unless there's some form of usage tax, that will be a way to by pass taxes on those types of purchases.

How about earning money in the US but having residence in another country? Won't have to pay any taxes on any of the money you are earning in the US.

Anything I put here will have fallacies, because, no for a discussion on this level, I can't research each idea I have. Neither can any of the rest of you. You throw out 'ideas,' but I am the one with all the burden of proof when I have an idea.

So you've got a few, admittedly, shaky ideas of how a few people might risk jail time to circumvent a sales tax, but guess what? My savings and investments would still not be taxed.

I just bought a new(to me) Jeep from a guy the other day. I'm middle class, not wealthy. Under the Fair Tax, I would have benefited by not having to pay taxes on that money ever.

Meanwhile, the dumb CEO of my company would still have to pay tax on the new $115k Mercedes he drives.

Sounds good to me!

No more naive than thinking we can go back to the gold standard.

More strawmen? In a strawman mood today? A) How is that relevant, please? B) Show me where I've even suggested we go on the gold standard.

There is also a potential massive tourism hit making this country effectively 20% more expensive to visit than it was previously to tourists who pay their own income tax to their own countries. I know this is small, and there is probably international trade issues as well which wouldn't be nearly as small. Its effectively adding a 20% price tag to any American good getting shipped outside of this country, and American goods are already too expensive.

Sorry Kelraz, moot point there as Americans flock to Europe and it hasn't stopped them. A VAT ( or a National Sales tax, not necc the same thing) is in place in many european countries.

Malse, you referenced;

Secondly, there is a big gap regarding what happens to long chain sales system before something hits retail, which is also where the biggest black market opportunities are in the FairTax system. Under a VAT, every transaction stage is taxed and rebated, under FairTax, you have to reliably locate the end consumer for every taxable transaction. This is easy for Xboxes and cotton candy, it's not so easy for things like tracts of farmland. This particular problem is going to be the single largest source of complexity in any sort of consumption tax.

I don't see where it's hard to locate the end user. The burden is upon the company to account for their inventory as is. When said inventory is replenished they have to account for their items that are moved and a $$ amount charged to them to hand back to the State/Fed govt at this time.

I also think you're right about farmland and such and I also have questions here. Since farmland isn't "new" and therefore a used item would it be considered tax free?

I know I don't know everything about this proposal. I'm just not stuck on making the rich pay more when they'll pay more than me yearly as is as opposed to now.

Might even cut down on those illegal activities, somewhat.

Look, the advantages of the Fair Tax Bill far outweigh the current system. Does it make the rich give up their wealth to the poor? No, and it shouldn't. It should tap into the income spent by everyone on new goods. It puts money back into the hands of people that would need it the most, and gets rid of yet another part of the Bureaucracy that is antiquated.

The only down side? A lot of IRS workers looking for another job....

Might even cut down on those illegal activities, somewhat.

Look, the advantages of the Fair Tax Bill far outweigh the current system. Does it make the rich give up their wealth to the poor? No, and it shouldn't. It should tap into the income spent by everyone on new goods. It puts money back into the hands of people that would need it the most, and gets rid of yet another part of the Bureaucracy that is antiquated.

The only down side? A lot of IRS workers looking for another job....

eh, someone is going to have to do the taxwork for the Walmarts and such of the country.

It's also bad form to keep an agency afloat simply due to jobs as opposed to a reason for being....if that makes sense.

Secondly, there is a big gap regarding what happens to long chain sales system before something hits retail, which is also where the biggest black market opportunities are in the FairTax system. Under a VAT, every transaction stage is taxed and rebated, under FairTax, you have to reliably locate the end consumer for every taxable transaction. This is easy for Xboxes and cotton candy, it's not so easy for things like tracts of farmland. This particular problem is going to be the single largest source of complexity in any sort of consumption tax.

What's wrong with the way we currently handle sales tax? Each business' tax id waives the tax down the line until a transaction involves someone without a tax id. If you don't sell an item that you bought with a tax id, you must pay use tax on it (at the same rate).

Also of note currently cooporations have to pay a tax on their unmoved inventory once a year. This would be gone as well, which would actually help in the cost of the end item.

I was reading one report and althought you'd see a 23% increase in the item eventually that would decrease because the layers and layers of taxes from point a to z would be removed from the product.

S
Malse, you referenced;

Secondly, there is a big gap regarding what happens to long chain sales system before something hits retail, which is also where the biggest black market opportunities are in the FairTax system. Under a VAT, every transaction stage is taxed and rebated, under FairTax, you have to reliably locate the end consumer for every taxable transaction. This is easy for Xboxes and cotton candy, it's not so easy for things like tracts of farmland. This particular problem is going to be the single largest source of complexity in any sort of consumption tax.

I don't see where it's hard to locate the end user.

Where's the tax on recycling? Where's the tax on consulting services (no product changes hands) to a business -- they are not providing an end service. Where's the tax on education? Where's the tax on transportation? Taxes on cutting down trees -- most of which are now shipped out of the country for final assembly in Vietnam?

There are all kinds of shenanigans you can play with who the "end consumer" is once you're off the subject of boxed up consumer goods. And people will play those games. I guarantee you this will be an endless source of legislative bickering because it has been in EVERY OTHER COUNTRY that has implemented a similar sort of tax system, usually VATs. They all have massive corporate fraud concerns because any time you put a transactional exception in, there is a huge incentive to exploit it. The only solution is to have few exceptions, but then you hit the supply chain question. This isn't la-di-da theorizing either, most of white-collar crime in Europe in that last few decades has been ways people found to get around the VAT (just google VAT crime or look it up on Wikipedia. There are probably entire classes of crime I'm not even aware of you can pull by having your tax liability assigned to homeless dying grandmas who "own" all your tax-excepted shell companies).

My point is that FairTax, as written, does not adequately address this.


I know I don't know everything about this proposal. I'm just not stuck on making the rich pay more when they'll pay more than me yearly as is as opposed to now.

It's not about making the rich pay more. It's about making them pay Fair. While this may be a small benefit to people like you and me, who make somewhere between 40 and 150 a year, it's going to be Shangri-la for anyone who does not spend the majority of their annual income. You notice honest rich guys saying now they're in a 17% tax bracket versus your 30-something -- wait till they're in a 2% and you're still at 30%.

Any system that willfully ignores such a huge swath of its current tax base is certainly not truly "revenue neutral."

Keep in mind I think FairTax is a workable idea. But there are gaping problems that need to be addressed.

I'm not sure I understand the problem with no taxes on services. There aren't taxes on services now. That confuses the point of a consumption tax with income tax doesn't it?

Regardless of whether you, yourself, profit from selling a product or service, you're not going to subsist purely on services. Everyone buys lots of products which were bought wholesale with a tax id and tracked for purposes of sales tax collection.

What's wrong with the way we currently handle sales tax? Each business' tax id waives the tax down the line until a transaction involves someone without a tax id. If you don't sell an item that you bought with a tax id, you must pay use tax on it (at the same rate).

The current sales tax doesn't have this problem because other taxes are levied against all the other entities. When sales tax becomes the ONLY tax, then you start having problems. You guys really should read up on VATs, because FairTax is basically a modified VAT.

Yes, FairTax is written to address all the problems of end consumer citizens who hate income tax. But that's not the entire economy.

http://www.fairtax.org/PDF/Tax%20Notes%20article%20on%20FT%20rate.pdf

I'm still slogging through this at a rather painful pace but I know it covers some of your topic ( if not answers it out right).

I agree, it has issues but the incredible bullshit we live with ( have lived with ) makes it pale in comparision.

The current sales tax doesn't have this problem because other taxes are levied against all the other entities. When sales tax becomes the ONLY tax, then you start having problems. You guys really should read up on VATs, because FairTax is basically a modified VAT.

Yes, FairTax is written to address all the problems of end consumer citizens who hate income tax. But that's not the entire economy.

The Fair Tax wouldn't be the only tax. It would just replace the income tax.

Similarities with a VAT mostly end with them both being consumption tax. Is that why you keep bringing service/labor into it (VAT does tax labor, right?)?

Sorry Kelraz, moot point there as Americans flock to Europe and it hasn't stopped them. A VAT (or a National Sales tax, not necc the same thing) is in place in many european countries.


None of those countries are even close to the rate that is being proposed here, for one. And that doesn't even matter, because the VAT is included in their prices which are already fairly competitive to US prices. Now the proposition is adding another 30% on top of the cost of current US goods, making trips 30% more expensive - period. Some people will continue to visit, others won't. Some people will continue to purchase US goods, others won't. I'm sure that is exactly what we need - an incentive to not visit and not buy our goods.

You obviously haven't visited Europe recently.

Things are quite a bit costlier and if you read the info/link you'd see that the prices would quickly normalize.

You obviously haven't visited Europe recently.

Things are quite a bit costlier and if you read the info/link you'd see that the prices would quickly normalize.

So ... I've lived in Prauge, CZ for nearly a year just 4 years ago and my girlfriend (and family) are Irish citizens (her father is an economist for development for the World Bank here in DC) and we go at least twice a year ... try again.

I like the concept but i enjoy a state that has no income tax and gets a lot of its income from taxing the crap out of the tourism industry. Which i dont have a problem with.

As far as the dodging and the "black market cash rush" people avoid the system now and hide in the loopholes, so this makes things no different IMO, nor will it increase the people trying to shuffle and hide money.

Take a look at the Church of Scientology (based about 50 miles <----- taht way from me). They own a HUGE hotel, there is no vacancy at this hotel. People with in the church live there to avoid paying individual property tax and the like. The hotel then writes off its expenses by basically saying its residents are contractors....dont knwo the exacts of how it works but after i read the report about it i was amazed.

Next the middle income paying more total % of their income i can go with that but even if Millionaire X only spent 10% its all relative.

Millionaire X makes 11million (CEO of AT&T). 10% of his income he spends so $1.1million at 29% "VAT" equals $319,000.

Greystone makes $45,000, 60% of his income he spends or $27,000 at 29% "VAT" equals $7830.

So basically the CEO of AT&T pays the same tax doallars as ~41 Greystone's. While i agree i am paying more in percentage my overal dollar paid is in my opinion reasonable since i paid more than $7830 into the system last year.

I don't understand where the problem is?

Trying to understand your false statement then Kelraz.

I'll chalk it up to bs 101.

As far as buying stuff overseas and bringing it back, there HAS to be a way to tax that. Naval Licensing Fee based on wholesale value of the boat or something...

Life in rural Ireland costs about the same as rural Indiana. Urban Prague costs a quarter of the cost of urban Washington, DC. Athens costs similar to life in Philadelphia, PA. If I were to move to Vienna, Bratislava, Krakow, Dresden I could live like a king on $50,000 a year. Just because you've only visited London doesn't mean an ENTIRE FUCKING CONTINENT costs more.

As far as buying stuff overseas and bringing it back, there HAS to be a way to tax that. Naval Licensing Fee based on wholesale value of the boat or something...

I'm pretty sure you'd already pay sales tax on that when you brought it back to a US state.

So, let's increase the prices of goods for people who have a higher annual income?

Wow, that sounds fair....

Yah we can put little gold stars on their sleeves so the stores can identify them and proceed with action.

not to disturb the insane ramblings of fandros, but VAT in sweden is 25% unless otherwise specified (food, printed media and certain home electronics etc are lower iirc).

apparently whoever said, earlier in this thread, that 'everyone prefers a progressive tax system' (paraphrasing) was utterly wrong since people have been arguing that having money is not a crime (what the fuck?) and shouldnt be punished for a few pages now.

So ... I've lived in Prauge, CZ for nearly a year just 4 years ago and my girlfriend (and family) are Irish citizens (her father is an economist for development for the World Bank here in DC) and we go at least twice a year ... try again.

Prague is dirt cheap. Nice try. I live in Rome right now. It is FAR more expensive than the US. Even after the Euro fell 25%.

Adding 23% tax (only a 15% jump in CA), won't change much in tourism.

Why are you using AT&T DSL to post this then?

please, stop with the anecdotal shit. living expenses in a country or area is dependent on so much more than the VAT in said area, for the love of all that is holy, please just stop.

apparently whoever said, earlier in this thread, that 'everyone prefers a progressive tax system' (paraphrasing) was utterly wrong since people have been arguing that having money is not a crime (what the fuck?) and shouldnt be punished for a few pages now.

You're misunderstanding. Everyone here, if it was presented in the right way, would agree that having poor people paying more of their relative income than rich people in taxes is a bad idea. What they're arguing is that the rich shouldn't pay MORE of their relative income, which is a different question.

Some of them also just don't understand the implications of what they're saying, too :> Math being hard and all.

people have been arguing that having money is not a crime (what the fuck?) and shouldnt be punished for a few pages now.

Are you saying having money IS a crime? I am confused as to which part of the argument you are saying "what the fuck."

I don't get this whole class warfare thing. I think the problem is envy. All these people complain about the rich and blah blah blah, but they would kill to be in their shoes in a second. They would then rationalize all the same actions as fair.

I think if someone is wildly successful they should be rewarded by actually getting to keep their money. As I have pointed out before, the money will eventually be completely taxed unlike the current system. Once they have funneled the movie through the current system at a pittance, they won't ever be taxed on it again. With this system it will eventually be spent, and eventually be taxed.

Also what about those people who make 150k-1million that DO spend most of their income living lavish lifestyles? The ones who also help keep the economy a float? Are we not going to punish them with additional taxes because they do not save their money? Only punish the ones who are more frugal with their money?

Prague is dirt cheap. Nice try. I live in Rome right now. It is FAR more expensive than the US. Even after the Euro fell 25%.

Adding 23% tax (only a 15% jump in CA), won't change much in tourism.

London, Rome, and Paris are the only 3 cities you'll find that are vastly more expensive than life in this country and its purely because of their cost of living. Venice or Florence aren't nearly as expensive (comparable to cities in this country), and the rural parts of Italy are comparable to rural areas in this country. One city doesn't make up an entire continent. If you don't think adding another 15% to the cost of goods here which are already too expensive compared to foreign counterparts AND to the cost of tourism in this country isn't significant I don't think you'll ever be able to really comprehend it so I'll stop trying.

Why are you using AT&T DSL to post this then?

Home for break from school. I am doing winter session here until March 1st. I then go back until june.

London, Rome, and Paris are the only 3 cities you'll find that are vastly more expensive than life in this country and its purely because of their cost of living. Venice or Florence aren't nearly as expensive (comparable to cities in this country), and the rural parts of Italy are comparable to rural areas in this country. One city doesn't make up an entire continent.

oslo is by far the most expensive city in europe last i checked.

and buyza...please, stop with the tired shit. having money is not a crime, and progressive taxation is not a punishment, it is a system based on 1. reality and 2. an idea of fairness.

I think if someone is wildly successful they should be rewarded by actually getting to keep their money.

lol.

London, Rome, and Paris are the only 3 cities you'll find that are vastly more expensive than life in this country and its purely because of their cost of living. Venice or Florence aren't nearly as expensive (comparable to cities in this country), and the rural parts of Italy are comparable to rural areas in this country. One city doesn't make up an entire continent.

Venice is pretty damn expensive. I would say its comparable with most major cities in the US.

It also depends on what commodity. Food is typically more expensive, entertainment is usually a little cheaper.

Scandanavia is also much more expensive I think. I spent a month in Copenhagen, Gothenburg, and Oslo all of which were much more expensive than the US. Keep in mind I live in Los Angeles.

I don't get this whole class warfare thing. I think the problem is envy. All these people complain about the rich and blah blah blah, but they would kill to be in their shoes in a second. They would then rationalize all the same actions as fair.


While you're right that any of us would take that gilded cage in a heartbeat, that's because we know how much better it is.

It's not a crime to be rich. But you're a dumbass if you think that the rich do not have substantially higher social impact due to their massive economic clout than a regular guy on the street. And that's why they should be getting taxed more rigorously than they invariably are. And if they're honest, anyone with lots of money knows it. And admits it.

This "class envy" thing is just neocon propaganda. Of course we envy the rich. But that doesn't mean a system that undercuts everyone else for their benefit is wrong because of that envy.

oslo is by far the most expensive city in europe last i checked.

and buyza...please, stop with the tired shit. having money is not a crime, and progressive taxation is not a punishment, it is a system based on 1. reality and 2. an idea of fairness.

lol.

If it is not a crime, why are you so concerned with making sure they pay so much more than everyone else, lol. Fair for who? The guy who went to Medical for a decade and finally makes a lot of money after working his ass off? Or for the lady who has 14 kids with no daddy?

Look, if you want to blatantly tax rich people more, fine. Just don't call it "fair" If you want to do it because you think it is in the best interest for the country and admit they are getting somewhat screwed, then so be it.

oslo is by far the most expensive city in europe last i checked.

I'll trust you, you live there I just visit. Haven't ever made it anywhere up near Oslo ... I tend to stay away from the north, I hate the cold :)

I'll trust you, you live there I just visit. Haven't ever made it anywhere up near Oslo ... I tend to stay away from the north, I hate the cold :)

Don't bother going to Oslo and Copenhagen. They are overrated.

Sweden was by far the coolest. At least Helsingborg and Gothenburg.

If it is not a crime, why are you so concerned with making sure they pay so much more than everyone else, lol. Fair for who? The guy who went to Medical for a decade and finally makes a lot of money after working his ass off? Or for the lady who has 14 kids with no daddy?

Look, if you want to blatantly tax rich people more, fine. Just don't call it "fair" If you want to do it because you think it is in the best interest for the country and admit they are getting somewhat screwed, then so be it.

well, to expand on what malse said..

A common contribution is essential for the maintenance of the public forces and for the cost of administration. This should be equitably distributed among all the citizens in proportion to their means.

of course this isnt the case in most nations today (i.e rates go up at certain intervals), many nations use it as a means to reduce income inequality, which i shouldnt need to mention is horrendous in the U.S.

and this..
Some believe that the wealthy have a disproportionately greater interest in maintaining societal goods typically supported by taxation such as security of property rights, defense (http://en.wikipedia.org/wiki/Defense) and infrastructure (http://en.wikipedia.org/wiki/Infrastructure), as they have much more to lose if these fail than do the poor. Public investments in defense and foreign aid often support assets abroad whose expropriation (http://en.wikipedia.org/wiki/Expropriation) is a far greater risk than is the risk involving domestic investments.

tl;dr: they use more of societies functions, so they pay more for them.

Don't bother going to Oslo and Copenhagen. They are overrated.

Sweden was by far the coolest. At least Helsingborg and Gothenburg.

dude, helsingborg = denmark :D.

dude, helsingborg = denmark :D.

Copenhagen = Turkey :(

I took the boat back and forth. Was really cool. We spent most of our time on the peer and around the small town shops.

Copenhagen = Turkey :(

I took the boat back and forth. Was really cool. We spent most of our time on the peer and around the small town shops.

now youre learning, everything south of halland = denmark, everything north of bohuslan = norway, everything east of boras = russia

tl;dr: they use more of societies functions, so they pay more for them.

I have to disagree that they have more to lose. I think they have just as much to lose as most Americans. No one benefits from a collapsed country. In fact the the rich have less to lose because they can just take their private jets to another country :D

I also think it balances in a sense that most the rich pay for the benefits of the poor (welfare, food stamps and other social programs). God knows they don't benefit from it.

Like I said though, if people want to say it's in the best interest of the country that is fine. I just don't think it is "fair"

The funny thing about income taxes is that we didn't even have them for the majority of this country's existence. Yet, here we are talking about them as if they're a necessity to keep the entire country from falling apart.

Perhaps that is indicative of the entire country already haven fallen apart!

I have to disagree that they have more to lose. I think they have just as much to lose as most Americans. No one benefits from a collapsed country. In fact the the rich have less to lose because they can just take their private jets to another country :D

I also think it balances in a sense that most the rich pay for the benefits of the poor (welfare, food stamps and other social programs). God knows they don't benefit from it.

Like I said though, if people want to say it's in the best interest of the country that is fine. I just don't think it is "fair"

well, undoubtedly it is fair in the way that it lessens income inequality, is it not?

well, undoubtedly it is fair in the way that it lessens income inequality, is it not?

That isn't what we do here.

I'm offiicially free of my burden of insuring Leah :) We found another way to insure her at a more cost effective rate than the many thousands a year I'm paying to carry her. Maybe this administration will do something about making domestic partners pay premiums on health insurance, maybe not but I don't have to worry about it anymore.

That isn't what we do here.


HAHAHA...right on! Wiggo doesn't understand the amount of money we pay to make sure there is nothing near income equality.

I have to disagree that they have more to lose. I think they have just as much to lose as most Americans. No one benefits from a collapsed country. In fact the the rich have less to lose because they can just take their private jets to another country :D


You can disagree all you want, but you're better off arguing that up is down and war is peace and deserve just as much attention for doing so. This isn't proletariat Marxist whining, it's economic reality, and anyone who has a clue, has heard of a clue, or maybe touched somebody who had a clue at a party knows it. Anything else is trolling.

You can disagree all you want, but you're better off arguing that up is down and war is peace and deserve just as much attention for doing so. This isn't proletariat Marxist whining, it's economic reality, and anyone who has a clue, has heard of a clue, or maybe touched somebody who had a clue at a party knows it. Anything else is trolling.

I once touched somebody who had a clue. I had to take penicillin for a week.

Fact of the matter is, there will always be people who work thier butts off to become successful, and those that don't, and wont.

Why should there be income/resource distribution from the ones that work hard, to the ones that do not? I'm not talking about basic living means. I mean someone with a successful idea/strategy to make a success out of themselves, versus someone barely scraping by?

Why should I work at all, if the Government is gonna give me Bill Gate's wealth?

Fact of the matter is, there will always be people who work thier butts off to become successful, and those that don't, and wont.

Why should there be income/resource distribution from the ones that work hard, to the ones that do not? I'm not talking about basic living means. I mean someone with a successful idea/strategy to make a success out of themselves, versus someone barely scraping by?

Why should I work at all, if the Government is gonna give me Bill Gate's wealth?

http://www.endlessdawn.com/screenshots/psyduck.gif

You have no chance of any government giving you Bill Gates' wealth. You are constructing moronic strawmen because you don't understand what the adults are talking about.

Progressive taxes do not mean the rich give all their money to the poor. Progressive taxes mean that in order to keep taxation equitable and fair, the rich are taxed numerically higher in nominal terms to keep their tax burden more closely tied with their social impact.

As for income redistribution, how much is a good idea has been the great question of the last hundred years and no one here can explain it to you in short sentences. There also exist the converse qusetion --

Why are you letting the rich take your tax money for their benefit? They're getting a lot more of it than imaginary crackbaby moms.

http://www.endlessdawn.com/screenshots/psyduck.gif


PERFECT! Something I can relate to you with.

Our current tax system is your psyduck. Notice the headache and confusion?

The flat tax is my gold duck - EVOLVED! Notice the lack of confusion as well as 3rd eye for better perspective?


http://www.dltk-kids.com/pokemon/adoptions/golduc21.jpg

As for income redistribution, how much is a good idea has been the great question of the last hundred years and no one here can explain it to you in short sentences. There also exist the converse qusetion --

Why are you letting the rich take your tax money for their benefit? They're getting a lot more of it than imaginary crackbaby moms.

I'm not sure if I asked before, but If I did, please remind me. What is your definition of rich? In dollars. I am curious if you consider these people who make 150k as rich or people who are in 7 figures and up.

thanks.

Are you only wanting to define rich in yearly income or in accumulated wealth? That would vary my answer quite a bit.

Are you only wanting to define rich in yearly income or in accumulated wealth? That would vary my answer quite a bit.

Yearly income. Accumulated wealth is a bad example generally. It would have to be case by case. My grandma is a millionaire, but her and my grandpa worked middle-class jobs (soldier and factory worker/homemaker) for 40 years and saved every penny.

You then have people who inherit their fortune.

I don't think my grandma needs to be taxed any more.

I'm not sure if I asked before, but If I did, please remind me. What is your definition of rich? In dollars. I am curious if you consider these people who make 150k as rich or people who are in 7 figures and up.

thanks.

It was as general a term as was being used by other people, which was largely undefined.

My own personal definition of "rich" comes in several points: Making more than 5x median household income for their area (around 220k annually in most places) would place you in the highest end of what I would consider middle class. Having the majority of your income from a non-wage source (ie, capital gains or some other indirect capital instrument) would also qualify you.

In general terms I usually leave rich as the top few percentile of wealth or income, which covers both of those groups. Whether or not any specific individual is "rich" is beyond the realm of analysis since there is no way to factor in various liabilities or gross incompetence in money management.

Most serious treatises don't use the term at all, but barring Palaran or Xapp swooping in there's little point to getting into strict definitions.

If your grandmother has a million dollars in invested assets returning a reasonably amount, her overall income is still lower middle class and unless she decided to get extremely risky in her investment she can not use the power of the capital itself to substantial effect, so no, she's not rich, and no tax scheme is going to aggressively tax her in any case.


To clarify a little further since it's highly relevant, one of the common indicators of being well off is how much of your income is dedicated to cost-of-living versus luxury items versus invested. As mentioned, while spending often exceeds 80% of the income of lower end earners, that's not always by choice and is the basis for why consumption taxes are implicitly regressive.