TAX DAY! Is Everybody Happy? [Archive]

missouriboy

04-16-2005, 03:41 AM

The reason I asked, "Is Everybody Happy?" was to get a sense of how people feel about how the current system intrudes into your personal life, and privacy, and the way you must keep records, and reveal to outsiders your own personal business. The way the IRS can audit your activities, demand more money, take your property, put you in prison. The way tax consequences influence your saving, investment, spending, and other important decisions that should be private. We're all under the thumb of a highly repressive Gestapo agency of the sort America was never meant to have. This is NOT freedom!

We could be free from all that, and pay about the same amount of tax, without all the record-keeping, harassment, deadlines, fear of prosecution, and humongous compliance costs that the old system has morphed into.

The opportunity is now, to abolish the IRS, the payroll tax and the income tax, repeal the 16th Amendment, and replace all that with a simple, fair, single-level national sales tax that's paid at the cash register just like the state sales tax is done now in 45 states.

The present system rewards consumption and punishes production. This is backwards!

The FairTax reverses that, to encourage education, savings, investment, and productivity, by NOT taxing those things at all, and instead taxing all consumption that is over and above the basic essentials of day to day life.

This is about the big question, folks, not the little details.
(For those, read and digest the letter at the link, and find the details at the website.)

The question is, wouldn't you and yours be happier if all of America would be out from under the chains of this oppressive monster once and for all? And our country would return to being the Free Country it was intended to be?

Nude in the North

04-16-2005, 05:33 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Isn't this just another "sales tax"? Which would then hit the poorer people harder than the rich people. </div></BLOCKQUOTE>

Poor people Rarely buy a 2 million dollar lake home. Or a $50,000 car.
Yet Rich people seem to manage to get these things and use them for a Tax Write off.

If the Rich were forced to pay their fair share of tax on EVERYTHING, the poor wouldn't have to pay any. And the Middle Class income people wouldn't have to carry the entire burden.

I can see a positive side to that.

Steve

missouriboy

04-16-2005, 05:53 AM

"the poor wouldn't have to pay any"

Right. Under the FairTax, they DON'T pay any federal tax. Not even Social Security tax, the most regressive part of the current system, yet they will still have the same SS benefits as now.

Paniga

04-16-2005, 06:02 AM

come to canada my dad pays 40% income tax. then when we go shopping we pay another 15% sales tax
http://clothesfreeforums.com/groupee_common/emoticons/icon_mad.gif

missouriboy

04-16-2005, 06:54 AM

Yes, Paniga, socialism tends to be like that. And then our friend Croydon has the temerity to tell us that "in Canada, healthcare is free."

(EDITED to rectify an incorrect attribution.)

Trailscout

04-16-2005, 07:47 AM

Somewhere in Canada is a moneypot where all of Paniga's Dad's money and all other Canadians is spirited away.

Anyone got a treasure map or seen any good rainbows lately?

For those of you boasting of tax refunds. I hate to say it, but you need to adjust your withholding. That money could have earned interest. Your refund is your money that you gave to the government as an interest-free loan. http://clothesfreeforums.com/groupee_common/emoticons/icon_eek.gif

NudeTopher

04-16-2005, 08:45 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Yes, Paniga, socialism tends to be like that. And then our friend NudeTopher (Christopher) has the temerity to tell us that "in Canada, healthcare is free." </div></BLOCKQUOTE>

No doubt you like putting words into other peoples' mouths. I never said that health care in Canada was free. I said that the Canadians believe in universal healthcare for everybody. Those are two different statements.

If you look at Paniga's statement you will see the numbers tell a different story. Most of the middle class in America pays about 30% for Federal taxes. State taxes in NYS add about another 8%. The real estate taxes paid on our house are about $1,000/month, and the sales tax is 8.75% in Suffolk County. If you add all of that up it is greater then the 40% paid up in Canada. Now, add the cost of your health care insurance to that total. In contrast, it actually costs less in Canada!

NudeTopher

04-16-2005, 08:56 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
It's April 15, the traditional Pay Your Taxes Day in the U.S., so I thought I'd start a new topic about the FairTax,] </div></BLOCKQUOTE>
------------------------------------------------

Support the troops.
We need a better defense.
We need better roads.
We want more parks.
We need to fund more reaserch into __________.

Isn't it funny. Everybody wants something from our government. Everybody like making money. But nobody wants to pay for what they get.

If you had a huge income tax bill it means that you made a lot of money. Instead of b******g that you had to pay your fair share of taxes be glad that you made a lot of money for the year!

We, the middle class could have lower tax bills. Too bad Bush, and the Republican legislature don't feel that way. Just this week they are eliminating the inheritance "death tax". That tax applies to less then 1% of the American population. It only applies to those that inherit $7,000,000 or more. If that tax was left in place, Social Security could be funded for the next 75 years. It could have even paid back the IOU that Bush wrote out when he raided the Social Security surplus to fund his tax cuts for the wealthy and to fund his war in Iraq.

Every dollar the gov't provides in corporate welfare is another dollar the middle class has to fund. If the corporate tax rate is 30% how come so many of the largest corporations get to pay between 0-15%? Corporate handouts aren't free!

Qikdraw

04-16-2005, 01:05 PM

http://www.workingforchange.com/article.cfm?itemid=18898&area=ivins

Fifty years ago, corporations paid 60 percent of all federal taxes. But by 2003, that was down to 16 percent. So individual taxpayers have to make up the difference, as corporate profits soar and wages fall.

http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=9505

http://www.ctj.org/pdf/epishel.pdf

The statutory corporate rate is 35 percent. The fact that the taxes actually paid were less than half that amount reflects a blend of special-interest laws, shelters, and outright tax-cheating. As McIntyre observes, in the 1950s, U.S. corporations paid 4.8 percent of the gross domestic product in taxes. By 2004 that had fallen to 1.6 percent.

How about corporations quit using loopholes to avoid paying taxes. How about the government stop giving tax insentives, or even contracts to companies that have offshored to avoid paying taxes. How about they shut off the SS cap, so that everybody pays the same percentage, instead of a dollar amount?

By the by, Canada is not a socialist country, we are a capitalist country with many social programs. We are also a country that runs a surplus every year, and we pay down the national debt each year.

Qikdraw

NudeTopher

04-16-2005, 02:00 PM

[By the by, Canada is not a socialist country, we are a capitalist country with many social programs. We are also a country that runs a surplus every year, and we pay down the national debt each year.

Qikdraw[/QUOTE]
--------------------t----------------------------
Ah, if only Bush wasn't a spend and borrow economist. We used to have a surplus...but he spent it. We used to have a balanced budget...but he blew it. There was even a surplus in the Social Security fund..but he issues a multi-billion IOU againt it.

missouriboy

04-17-2005, 03:11 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by NudeTopher (christopher):
No doubt you like putting words into other peoples' mouths. I never said that health care in Canada was free. </div></BLOCKQUOTE>You are correct. It was our friend Croydon who said that, and then you corrected him. My mistake. Please accept my apologies. <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by NudeTopher (christopher):
Support the troops.
We need a better defense.
We need better roads.
We want more parks.
We need to fund more reaserch into __________.

Isn't it funny. Everybody wants something from our government. Everybody like making money. But nobody wants to pay for what they get.

If you had a huge income tax bill it means that you made a lot of money. Instead of b******g that you had to pay your fair share of taxes be glad that you made a lot of money for the year! </div></BLOCKQUOTE>Whaaat?? Excuuuuse meee?? Where did I say one word about what taxes are needed for? Where did I say one word to b***h about how much tax I pay? If you'll actually read my words, you might find this...<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">We could be free from all that, and pay about the same amount of tax, without all the record-keeping, harassment, deadlines, fear of prosecution, and humongous compliance costs that the old system has morphed into. </div></BLOCKQUOTE>This topic is about the method of paying our tax, not about the amount of tax. It's not about government spending, budgets, or anything other than the question: Income Tax vs. Consumption Tax. Period.

I am also NOT going to debate your hatred of Bush! There are already plenty of threads open for that, including your very own. Take it there, please. If you'll re-read my first post, you'll see the word BIPARTISAN!

Now, if you'll be so kind as to DELETE all your posts so far, I'll delete this one too, and then we can stay ON TOPIC! If you want to then discuss the topic in positive terms, whether pro or con, I'd be happy to respond. http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

missouriboy

04-17-2005, 03:38 AM

hm0504

04-17-2005, 11:40 AM

While the tax burden in different countries may be part of a general discussion on the economic status of individuals, it can only be part of the discussion. At the end of the day, it comes down to what percentage of a nation's population live in inhuman conditions. (And by inhuman, I'm not talking about whether one owns a TV or not, I'm talking slum-level living.)

Based on my direct experience and the stats, it would seem to me a lot more people in the U.S., per capita, live in abject poverty than in Canada or West European countries. While the U.S.A.'s overall economic power may be due partially to its not having to support a tightly-knitted social safety net, there is a major downside to that strategy as well.

Qikdraw

04-17-2005, 01:21 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Qikdraw:
How about corporations quit using loopholes to avoid paying taxes.
</div></BLOCKQUOTE>Huh? Did you happen to read the letter behind the LINK in the opening post? It was about changing the present income tax to the FairTax, under which corporations will pay NO federal taxes at all. </div></BLOCKQUOTE>

I did read it, and I disagree with it. Its a regressive tax.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Only real live, breathing people pay taxes. Corporations don't "pay" any taxes now, they just collect those taxes from the people who do pay them, and forward the money to the government. (At considerable unnecessary expense, I might add.) </div></BLOCKQUOTE>

Corporations pay tax, or at least are supposed to, based on their income, just like you. Or should I say that your employer pays your taxes for you, and you just pass those on to the government?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The present so-called "Corporate Income Tax" is just an illusion, one that we must get out of our heads in order to seek a better idea. </div></BLOCKQUOTE>

There is such a thing as coroporate income tax, you're just saying 'we' are paying it through the purchase of their goods or services. Well of course we are, to think otherwise is silly, we also pay their salaries, their overhead, etc... But so what? That doesn't mean that corporations don't pay a tax on their income. They are supposed to, but in the last 50 years the tax burdon has shifted from the corporations to the people. And we still pay high prices at the counters.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">When corporations no longer have the expense of collecting those taxes from us, those expenses, and the amount of the taxes themselves, will come out of the prices we pay for their goods. </div></BLOCKQUOTE>

Kind of like how the new medicare bill was supposed to reduce the amount perscription drugs cost old people, but actually raised the prices, cause nothing in the bill actually said the pharmaceutical companies had to lower the prices. ALthough thats what they promised.
Or like the Workers Comp "reform" here in California that takes away almost all protections from the workers, and gives the insurance companies all the power. This was to battle the supposed massive amount of fraud in WC claims. They said it would also reduce teh cost of insurance for comapnies. Yet again, nothing in the bill actually said the insurance companies had to lower the premiums, and they haven't. Although thats what they promised.

You're basing your idea that companies will willingly lower their prices once they don't have to pay taxes. Well many companies already don't pay taxes through loopholes or whatever, yet their prices are still the same or higher. If companies did not have to pay tax, they would not lower the price at all, it would just mean larger profits for them. Companies are not altruistic, they care about profits, that is all.

This country loses hundreds of billions of dollars of legal taxes from corporations that don't get paid every year. Through one reason or another. That is wrong. Companies need to start paying their FAIR share of taxes. I don't ask them to pay more than their share, but I do expect them to pay a fair share, just like we do.

Qikdraw

TimO\'C

04-17-2005, 09:48 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Qikdraw:
How about corporations quit using loopholes to avoid paying taxes. </div></BLOCKQUOTE>

Corporations will do the same thing you do: take advantage of every possible legal way under the tax code to reduce their taxes. If you do it, why blame them for doing the same thing? If you think there are "loopholes," talk to your Congressman about it. Don't blame the corporations. They don't write the tax laws.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"> Corporations pay tax, or at least are supposed to, based on their income, just like you. Or should I say that your employer pays your taxes for you, and you just pass those on to the government? </div></BLOCKQUOTE>

Taxes are simply a cost of doing business, one that corporations pass on to their customers like anything else. I have worked with CFOs and Controllers, trust me on this.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"> This country loses hundreds of billions of dollars of legal taxes from corporations that don't get paid every year. Through one reason or another. That is wrong. Companies need to start paying their FAIR share of taxes. I don't ask them to pay more than their share, but I do expect them to pay a fair share, just like we do. </div></BLOCKQUOTE>

Qikdraw, when was the last time you volunteered to pay more taxes than you were legally obligated to? Why should a corporation be any different? A corporation is nothing more than a group of people doing business under certain legal formalities. And who would determine a corporation's "fair" share? Sounds like you have some other reason for hating big business. But don't blame corporations for displaying normal human behavior when it comes to taxes. Again, if you think those big evil faceless companies are getting away with something, don't blame them. Blame Congress, and start pestering your Congressman to do something about it.

Qikdraw

04-17-2005, 11:27 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by TimO'C:
Corporations will do the same thing you do: take advantage of every possible legal way under the tax code to reduce their taxes. If you do it, why blame them for doing the same thing? If you think there are "loopholes," talk to your Congressman about it. Don't blame the corporations. They don't write the tax laws. </div></BLOCKQUOTE>

But they do influence politicians to give them more tax breaks. You should know that by now. Corporations are runnign the US, not the people. An example is the new bankruptcy bill. Thats good for corporations, not for people.

By the way, don't assume I try and cheat on my taxes, because I don't. I pay what I am supposed to pay, without complaint.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Taxes are simply a cost of doing business, one that corporations pass on to their customers like anything else. I have worked with CFOs and Controllers, trust me on this. </div></BLOCKQUOTE>

Well as I said to think otherwise is just silly. But they also pass on all the other costs of doing business too. But to say that businesses will willingly give up profits if they don't have to pay taxes is just plain wishful thinking and has nothing to do with reality.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Qikdraw, when was the last time you volunteered to pay more taxes than you were legally obligated to? Why should a corporation be any different? </div></BLOCKQUOTE>

Who said I asked corporations to pay more than their fair share? Don't put words in my mouth. I'm not asking businesses to pay MORE than their fair share, I'm asking them to pay their fair share, which they get away with doing.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">A corporation is nothing more than a group of people doing business under certain legal formalities. </div></BLOCKQUOTE>

Actually, technically, a corporation is a living entity. Legally a corporation is a person.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And who would determine a corporation's "fair" share? </div></BLOCKQUOTE>

Uhmmm How about the government? Like they determain my fair share?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Sounds like you have some other reason for hating big business. </div></BLOCKQUOTE>

I have nothing against big business, as long as they stop passing on the tax burdon onto me, like they have been doing. They get politicians to pass laws that are friendly to them, not to the people. Which is why money should get out of politics.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">But don't blame corporations for displaying normal human behavior when it comes to taxes. </div></BLOCKQUOTE>

Corporations and normal human behaviour do not belong in the same sentence. Watch a film called "The Corporation", in it they have a phsycologist study corporation's behaviour and figure out what type of human it would be. He determaned that a corporation is a phsycopath personality.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Again, if you think those big evil faceless companies are getting away with something, don't blame them. </div></BLOCKQUOTE>

Sorry, but that falls into the category of "just because I can", which doesn't make it right.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Blame Congress, and start pestering your Congressman to do something about it. </div></BLOCKQUOTE>

I do blame congress, but I also blame corporations for pushing congress into passing laws that benifit corporations over people.

My wife & I want to start a business, and we have talked about taxes with our business, and even if the accountant we get startes telling us we should move money around, or buy more things to get out of paying taxes, we won't. I have no problem with paying taxes, the government needs tax money to run, and I have zero quibbles with paying them.
I don't think that, "everybody else is doing it", makes it ok for me too. I don't cheat, nor lie to advance myself. I won't advocate other people to do it, like you seem to be.

Qikdraw

missouriboy

04-18-2005, 04:45 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Qikdraw:
I did read it, and I disagree with it. Its a regressive tax. </div></BLOCKQUOTE>Regressive? How so? The letter that you read states it's a progressive tax, just as progressive as the current income tax. And I do not disagree with that.

The letter says progressive; you say regressive. Both cannot be right, so I believe it's incumbent upon you to demonstrate your claim.
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">There is such a thing as coroporate income tax, you're just saying 'we' are paying it through the purchase of their goods or services. Well of course we are, to think otherwise is silly, we also pay their salaries, their overhead, etc... But so what? That doesn't mean that corporations don't pay a tax on their income. </div></BLOCKQUOTE>First you say 'we' are paying their tax, then you say 'they' are paying their tax. Round and round you go, but I can't even call it 'circular logic,' because that phrase at least contains the word 'logic' and what you're saying is impossibly illogical. Either we the people pay all the tax, through their prices, or we don't. Which is it? I assert that we do, as I originally described.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">You're basing your idea that companies will willingly lower their prices once they don't have to pay taxes... </div></BLOCKQUOTE>It's not my idea, it's an economic reality wherever a free market is allowed to operate. It's known as "competition."

TimO\'C

04-18-2005, 07:46 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Qikdraw:

But they do influence politicians to give them more tax breaks. You should know that by now.
By the way, don't assume I try and cheat on my taxes, because I don't. I pay what I am supposed to pay, without complaint. </div></BLOCKQUOTE>

Of course I know that. And there are also lots of groups who lobby for individual taxpayers. And nobody's assuming you cheat on your taxes, though it sounds like you have lots of complaints.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Who said I asked corporations to pay more than their fair share? Don't put words in my mouth. I'm not asking businesses to pay MORE than their fair share, I'm asking them to pay their fair share, which they get away with doing. </div></BLOCKQUOTE>

Nobody said this. I'm simply pointing out that it is natural human behavior to try to use every legitimate means to minimize one's tax burden, and that corporations are no different than you or me in that regard.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Actually, technically, a corporation is a living entity. Legally a corporation is a person. </div></BLOCKQUOTE>

I know all this. But you missed my point. The technical legal existence of a corporation is one thing. But fact is that all its actions are taken as a result of decisions by "other" people whose human qualities--like a desire to avoid taxes and maximize profits--will be reflected in the decisions taken on behalf of the corporation.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And who would determine a corporation's "fair" share? . . . Uhmmm How about the government? Like they determain my fair share? </div></BLOCKQUOTE>

"The government" in this respect is Congress, who writes the tax laws. They are the very same people who have also written all these "loopholes" you complain about as giving corporations "unfair" advantages. Yet you trust them now to do what would be in your opinion a complete 180 turn?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I have nothing against big business, as long as they stop passing on the tax burdon onto me, like they have been doing. They get politicians to pass laws that are friendly to them, not to the people. Which is why money should get out of politics. </div></BLOCKQUOTE>

You wish for things that will never, I repeat NEVER, happen in the real world, and then get angry because your wishes aren't fulfilled. Companies will always pass the cost of their taxes on to their customers. Politicians will always pass laws that favor their political and financial supporters. And money will never stop playing a crucial role in politics. Anybody who thinks otherwise is ignorant of history and human nature.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Corporations and normal human behaviour do not belong in the same sentence. Watch a film called "The Corporation", in it they have a phsycologist study corporation's behaviour and figure out what type of human it would be. He determaned that a corporation is a phsycopath personality. </div></BLOCKQUOTE>

I suspected something like this would pop up. A single movie reflects a single director's or writer's point of view. It is no more universally applicable or honest or accurate than any other individual statement of perspective. Just because it happens to be conveyed through a movie or TV doesn't confer omniscience, though many people seem to think so. Do you give the same instant credibility to Michael Moore?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Again, if you think those big evil faceless companies are getting away with something, don't blame them. . . Sorry, but that falls into the category of "just because I can", which doesn't make it right. </div></BLOCKQUOTE>

You are confusing "legal" with "moral" or "fair." They are NOT the same thing. We hope they are, and our laws should ideally be written to foster the public benefit. But taxes are imposed because of tax LAWS, not some general sense of "fairness." And tax laws are specific, exhaustively detailed, and written by people, not God. What may not seem "right" to you may seem very right to a group of AARP members who hold shares in a corporation whose skillful tax planning enables it to pay more dividends to those retirees and thus reduces, say, their dependence on other government programs which you pay for. So what's "right" in that situation?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">My wife & I want to start a business, and we have talked about taxes with our business, and even if the accountant we get startes telling us we should move money around, or buy more things to get out of paying taxes, we won't. I have no problem with paying taxes, the government needs tax money to run, and I have zero quibbles with paying them. I don't think that, "everybody else is doing it", makes it ok for me too. I don't cheat, nor lie to advance myself. I won't advocate other people to do it, like you seem to be. </div></BLOCKQUOTE>

Nobody's suggesting you cheat. There is a huge difference between tax avoidance (legitimate use of the tax laws to reduce one's tax bill) and tax evasion (lying and cheating to reduce one's tax bill). I don't advocate that anyone cheat on their taxes. But by the same token, anyone who doesn't engage in tax avoidance to the extent the law allows is, in my opinion, possessed of more money than sense. But if you wish to pay more taxes than you are required to, then you're certainly free to do so. I can't help noting that John Kerry didn't, though he was quite keen to raise everyone else's taxes.

missouriboy

04-18-2005, 08:27 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The technical legal existence of a corporation is one thing. </div></BLOCKQUOTE>Yes. And a sentient (breathing) human being is another thing. I contend it is only the latter who (ultimately) pays all the taxes.

The FairTax plan recognizes this too, and proposes to align the taxation system to agree with this fact, by eliminating all those hidden taxes that we "think" someone else is paying. Which leads to a strong point in its favor: Visibility.

With this 100% visibility it'll be politically very difficult to ever sneak in any tax increases, or "revenue enhancements," the government-speak words for them. About the only way to do it will be to raise the one single rate, an action that couldn't be hidden from anybody.

TimO\'C

04-18-2005, 09:43 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The technical legal existence of a corporation is one thing. </div></BLOCKQUOTE>Yes. And a sentient (breathing) human being is another thing. I contend it is only the latter who (ultimately) pays all the taxes. </div></BLOCKQUOTE>

You are absolutely correct, couldn't agree more.

Qikdraw

04-19-2005, 12:26 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Regressive? How so? The letter that you read states it's a progressive tax, just as progressive as the current income tax. And I do not disagree with that.

The letter says progressive; you say regressive. Both cannot be right, so I believe it's incumbent upon you to demonstrate your claim. </div></BLOCKQUOTE>

Wow, so you believe everythign you read? Or you believe everything you read, as long as it conforms to your ideals?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">First you say 'we' are paying their tax, then you say 'they' are paying their tax. Round and round you go, but I can't even call it 'circular logic,' because that phrase at least contains the word 'logic' and what you're saying is impossibly illogical. Either we the people pay all the tax, through their prices, or we don't. Which is it? I assert that we do, as I originally described. </div></BLOCKQUOTE>

And you're being deliberately obtuse.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">It's not my idea, it's an economic reality wherever a free market is allowed to operate. It's known as "competition." </div></BLOCKQUOTE>

And apparantly you don't understand reality. Companies will not give up money willingly. Prices will not go down as you believe. Corporations will just increase profits and watch their stocks go up, that is all that will happen. To believe otherwise is living in fantasy.

Qikdraw

Qikdraw

04-19-2005, 12:55 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by TimO'C:
Of course I know that. And there are also lots of groups who lobby for individual taxpayers. And nobody's assuming you cheat on your taxes, though it sounds like you have lots of complaints. </div></BLOCKQUOTE>

I have complaints with corporations getting away with paying their fair share of taxes. In the last 50 years the tax burdon has shifted from the corporation to the people. I'm not happy with that. Apparently you are.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Nobody said this. I'm simply pointing out that it is natural human behavior to try to use every legitimate means to minimize one's tax burden, and that corporations are no different than you or me in that regard. </div></BLOCKQUOTE>

Maybe you, but not me. "Legitimate" is questionable.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I know all this. But you missed my point. The technical legal existence of a corporation is one thing. But fact is that all its actions are taken as a result of decisions by "other" people whose human qualities--like a desire to avoid taxes and maximize profits--will be reflected in the decisions taken on behalf of the corporation. </div></BLOCKQUOTE>

True, for good or bad.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">"The government" in this respect is Congress, who writes the tax laws. They are the very same people who have also written all these "loopholes" you complain about as giving corporations "unfair" advantages. Yet you trust them now to do what would be in your opinion a complete 180 turn? </div></BLOCKQUOTE>

I didn't say I trusted them. I just said they would be the ones to deterime taxes. I think they do a lousy job of it now, because they are all in the pockets of big business. Which is why I say that corporations should stay out of politics.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">You wish for things that will never, I repeat NEVER, happen in the real world, and then get angry because your wishes aren't fulfilled. Companies will always pass the cost of their taxes on to their customers. Politicians will always pass laws that favor their political and financial supporters. And money will never stop playing a crucial role in politics. Anybody who thinks otherwise is ignorant of history and human nature. </div></BLOCKQUOTE>

That is why I say that corporate sponsors should be out of politics. Because ultimatly what happens is not good for the people, which are who the politicians are supposed to be looking out for.
Plus, I'm not ignorant of history or of human nature, I just refuse to peacably allow these types of things to go on without me speakign out against them. If you don't speak out, no change can be made. Apathy is defeat, and I refuse to roll over.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I suspected something like this would pop up. A single movie reflects a single director's or writer's point of view. It is no more universally applicable or honest or accurate than any other individual statement of perspective. </div></BLOCKQUOTE>

Actually "The Corporation" views things from a few angles, its not completely anti corporation. Plus the phsycologist perspective was the head FBI phsycologist, not the directors.
I know what you are getting at, and I agree to a point. However, I've also read a lot of different articles from all over the world as well. I don't just base my views on one thing.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Just because it happens to be conveyed through a movie or TV doesn't confer omniscience, though many people seem to think so. </div></BLOCKQUOTE>

Yes, I wish peole would stop quoting Fox news and Ann Coulter, etc....

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Do you give the same instant credibility to Michael Moore? </div></BLOCKQUOTE>

Actually I don't. I'm not a fan of his work. I do think he is valuable in using the same types of tactics Coulter, O'Reily, Rush, Hannity, Savage, Malkin, etc... use though. In that I think he is good, but he puts as much bias into his work as some Republicans do theirs.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">You are confusing "legal" with "moral" or "fair." They are NOT the same thing. We hope they are, and our laws should ideally be written to foster the public benefit. But taxes are imposed because of tax LAWS, not some general sense of "fairness." And tax laws are specific, exhaustively detailed, and written by people, not God. </div></BLOCKQUOTE>

Very true. But I will hold responsible politicians, and corporations who pressure them, into making laws that allow a corporation to base offshore to avoid taxes, yet allow that company to get government contracts. Or giving corporations tax breaks when they outsource. (I'm all for giving companies tax breaks if they keep jobs in the US though.)
Maybe asking for "fairness" is a pipe dream, but I will hold onto it, because to do otherwise is to allow corporations to put their good, over the people's welfare. I don't agree with that, and I don't support it.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">What may not seem "right" to you may seem very right to a group of AARP members who hold shares in a corporation whose skillful tax planning enables it to pay more dividends to those retirees and thus reduces, say, their dependence on other government programs which you pay for. So what's "right" in that situation? </div></BLOCKQUOTE>

I don't know. I don't know what you are refering to, so I can't have an opinion on it. Can you give me a few links?

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Nobody's suggesting you cheat. There is a huge difference between tax avoidance (legitimate use of the tax laws to reduce one's tax bill) and tax evasion (lying and cheating to reduce one's tax bill). I don't advocate that anyone cheat on their taxes. But by the same token, anyone who doesn't engage in tax avoidance to the extent the law allows is, in my opinion, possessed of more money than sense. </div></BLOCKQUOTE>

LOL http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif Well that may be, but if the government says I owe such and such amount, I won't try and "avoid" it. I'll pay it. Taxes go to education, police, firemen, etc... Why would I wish to shortchange the government so they have to cut these services? Not only those services, but many other things as well. I may not use all the programs the government uses the tax dollars for, but I'll certainly help support the governments efforts to make America better.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">But if you wish to pay more taxes than you are required to, then you're certainly free to do so. I can't help noting that John Kerry didn't, though he was quite keen to raise everyone else's taxes. </div></BLOCKQUOTE>

I'm not John Kerry, what he does is his own business, not mine.
Who said he was going to raise taxes? I never once heard him say he was going to raise taxes. I heard it from Republican talking heads, but never with any verifiable proof. That was just another Republican talking point that had no basis in reality. Someone once said to me something that is very apt. I'll quote it for you... Just because it happens to be conveyed through a movie or TV doesn't confer omniscience, though many people seem to think so.

Something to think on eh? http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

Qikdraw

missouriboy

04-19-2005, 03:37 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Qikdraw:
Wow, so you believe everythign you read? Or you believe everything you read, as long as it conforms to your ideals? </div></BLOCKQUOTE>How does what I believe affect the truth of whether the FairTax is progressive or regressive?

Again, can you logically demonstrate how it's a regressive tax?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And you're being deliberately obtuse. </div></BLOCKQUOTE>There you go again. Can't refute the message? Attack the messenger!
I've heard it said that when people do this, it's because they know they've lost the point.

Remember, the question was:
"Either we the people pay all the (corporate) tax, through their prices, or we don't. Which is it?"
Do you have the answer? Feel free to consult with Tim O'C if you like.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And apparantly you don't understand reality. Companies will not give up money willingly. Prices will not go down as you believe. Corporations will just increase profits and watch their stocks go up, that is all that will happen. To believe otherwise is living in fantasy. </div></BLOCKQUOTE>If I don't understand reality, then obviously all those expert economists who signed that letter, don't understand it either. Perhaps you need to contact them all right away, and get them straightened out.

You've stated that you're considering starting a business. Now, I'm being honestly sincere when I recommend that you don't do it, because your (mis)understanding of natural economic law does not bode well for success.

But what if you did succeed? It might get to the point where you'd have no choice but to (gasp) incorporate! Then, by your convictions, you'd be forced to hate yourself. I wouldn't want to see that happen. http://clothesfreeforums.com/groupee_common/emoticons/icon_frown.gif

missouriboy

04-19-2005, 04:16 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
"the poor wouldn't have to pay any"

Right. Under the FairTax, they DON'T pay any federal tax. Not even Social Security tax, the most regressive part of the current system, yet they will still have the same SS benefits as now. </div></BLOCKQUOTE>

Qikdraw, if the FairTax is regressive, how come you didn't refute this post I made the other day? If you're correct, that post is obviously a lie.

hm0504

04-19-2005, 05:54 PM

Do I understand correctly that under a Fair Tax regime, corporations would NOT pay tax on the items they purchase, or would they? I cannot tell for sure from the material that I've read.

hm0504

04-19-2005, 06:38 PM

I think the topic of Fair Tax could make for an interesting and informative debate. Let's try to keep it calm so we can generate more light than heat.

Trailscout

04-19-2005, 08:16 PM

No, corporations are no different. Everyone would pay sales tax on what they purchase. What you are hearing about "corporations not paying tax" is true after a fashion. In order to make a profit, they must pass all costs, including sales tax on to you the consumer, so in a sense, corporations do not pay sales tax and will not under the Fair Tax. However, there would be no tax on corporate profits, capital gains, nor on inventory. The savings would be huge and corporations could charge you less for the product and still make a profit.

As to someone else's question as to whether such a tax would be regressive (i.e. tax the poor disproportionately), yes it would be, so systems must be put in place to either reimburse them for essential purchases or exempt essentials from taxation. This part of the Fair tax concept is on the table for negotiation. It could be an evil tax if the poor are not given some extra consideration. It's up to society to make it truly fair to all.

Trailscout

04-19-2005, 08:25 PM

There is the additional question (I did not see asked so far) but I am going to ask it and answer it:
Q: Will the Fair Tax be revenue neutral?
A: It's up to us, but most advocates think it would be good if it were.

For those not acquainted with the concept, it simply means that the government would, at least at first, take in the same dollar figure with the Fair Tax as it currently does with the present system of taxation.

So, what's the advantage?
Plenty! The cost of administering a Fair Tax system is far less for government, businessess and individuals than what we currently have.
The savings would really be enormous.

missouriboy

04-20-2005, 04:15 AM

Trailscout, thanks for your good and positive comments. Yes, the initial cutover IS designed to be revenue-neutral. This is politically important, as well as economically important. The revenue neutrality is intended to completely separate the proposal from any attempts to modify government spending, social programs, and any other such institutions. To keep it focused on only ONE thing, the total overhaul of the FEDERAL tax collection system. (Which is another thing: it does not, and cannot, address state taxes, so fretting about them is irrelevant to this proposal.)

However, Trail, you have two 180 degree-wrong impressions...<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Trailscout:
No, corporations are no different. Everyone would pay sales tax on what they purchase... The savings would be huge and corporations could charge you less for the product and still make a profit. </div></BLOCKQUOTE>No, corporations (and any other business) do not pay the tax; they will have exemption certificates for all purchases and expenses that are PRODUCTION INPUTS. Remember, it's a CONSUMPTION tax. The tax is charged only ONE TIME, when the final product or service is purchased by the Consumer -- that's the point where Consumption occurs.

What you're describing is similar to a VAT, a hugely complex and expensive system that's entirely rejected by the FairTax.

Your second sentence above is correct... 20 to 25 percent of production cost is the present income tax system, which would immediately come out of their prices. Then the purchaser (the living, breathing person who is already paying all taxes anyway, remember http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif ) pays the 23 percent Consumption Tax, resulting in us paying about the same amount we pay today. Without keeping records for the IRS!

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">As to ... whether such a tax would be regressive (i.e. tax the poor disproportionately), yes it would be, so systems must be put in place... </div></BLOCKQUOTE>No, it's NOT regressive, because such a system is already included in the bill, as written. And yes, it is a rebate mechanism, designed to approximate the present personal and dependent exemptions in the present system. The details may be under negotiation, I don't know, but the mechanism has always been there. And it IS briefly alluded to in the letter at the link.

It's the monthly rebate (some call it a PREbate) given to all citizens, which gives everybody the cash to pay the tax on all expenditures up to the Poverty Level determined (annually) by Dept. of HHS. Thereafter you pay your own tax, but only on expenditures above the exempted amount. Simple!

There are more details to that part of the system, all at the website: www.fairtax.org (http://www.fairtax.org)

Trailscout

04-20-2005, 06:48 AM

But what are we going to do with the millions of bookkeepers and accounts who are thrown out of work by the simpler tax system?

I hope that they can find useful roles in the new economy.

missouriboy

04-20-2005, 08:05 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Trailscout:
But what are we going to do with the millions of bookkeepers and accounts who are thrown out of work by the simpler tax system?

I hope that they can find useful roles in the new economy. </div></BLOCKQUOTE>Yep, that $225 Billion we're now wasting annually has gotta come from somewhere! Right?

But seriously, this IS a big question, one that is alluded to in the letter, where it pleads with Congress to resist the "special interests'" clamor to keep the status quo, because the benefits of this new system are too compelling to ignore.

Yes, it's a SEA CHANGE folks, and the transition is going to be pure hell for awhile.

But this problem is addressed by the experts behind the proposal, and several essays about it can be found at the website.

In general, it's believed that this new system would so greatly boost the economy that many new positions would be created that would benefit from the expertise of the type of people who now spin their wheels in a totally NON-productive activity. Of course, it will take time, and social assistance for the displaced must be carefully considered. Those people are the victims of a bad system, through no fault of their own. (Except the politicians who created the whole damn mess!)

hm0504

04-21-2005, 11:27 AM

Two aspects of the Fair Tax (which I think should be more properly named something like the "Federal Consumption Tax") that intrigue me are its possible benefits to

a) the environment

b) regulating the stability of the economy because spending and tax levels are closely bound; eg. would there be less need to do so using interest rates?

missouriboy

04-22-2005, 04:08 AM

a) I'm not aware of any impact on the environment. Less paperwork, and mail, maybe? Oh YES! Tons and tons less of that.

b) ??? Whose spending, the Government or the Private Sector? Federal government spending is only loosely bound to tax levels, because they can, and do, "deficit" spend. (I generally believe the federal government does too much that the states should do, because the federal does it with debt, while the states are generally prohibited by their constitutions to run deficits, and would have to collect enough tax to pay-as-you-go or just not do it. But that's another subject.)

Interest rates: I seem to recall some discussion at the website about these, and possible impacts upon them, but I don't recall any details. I'll defer to those who know...

In general, this proposal just changes the method of transferring about the same amount of money from the Private to the Public sector, at about the same, or even smoother, rate of flow. Sure, this is bound to have an effect on the details of economic interaction, but that's not the primary intention. Economic activity will still have its historic cyclical ebb and flow, independent of this change.

missouriboy

04-22-2005, 04:26 AM

"...the Fair Tax (which I think should be more properly named something like the "Federal Consumption Tax")..."

There are several proposals out there, some of which may involve a consumption tax as well, in combination with other methods, possibly. The FairTax (sm) {one word, service-marked} is the formal name of this particular proposal, and is used to differentiate it from any other proposal.

If adopted, that proposal name would probably disappear, and the new federal tax system would most likely become known as something along the lines you suggest.

TimO\'C

04-22-2005, 07:22 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Qikdraw:
I may not use all the programs the government uses the tax dollars for, but I'll certainly help support the governments efforts to make America better. </div></BLOCKQUOTE>

Your statement is a classic example of the fundamental shift that has occurred over the last few decades as to what the proper role of government should be. For most of our country's history, consensus was that the federal government had certain clearly defined and limited functions to perform, and beyond those (as the 10th Amendment says) all political power was left to the states, or to the people. Now it seems there is no area of life, no matter how minuscule, over which people are not willing to cede power to the Feds.

In short, we have moved away from the Founders' original principle that government should protect the people's ability to live their lives freely to the belief that government has an active duty to step in and regulate and "fix" what IT thinks are defects in the WAY people live. That is a HUGE shift with no basis in our founding documents and profound consequences for our economy and our society.

James Madison, uniformly acknowledged as the Father of the Constitution, and who thus ought to know what the Founders intended, wrote "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." In modern terms, the Constitution DOES NOT authorize the Federal government to take money from the citizens and spend it on others, or on pet pork projects. That many people today believe to the contrary does not change the fact that their belief is a 180 degree perversion of the Founders' intent.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I'm not John Kerry, what he does is his own business, not mine. Who said he was going to raise taxes? I never once heard him say he was going to raise taxes. </div></BLOCKQUOTE>

He said he would reverse all of Mr. Bush's tax cuts. That is a tax hike no matter how you slice it. In addition, an analysis of the tax plan on his own Web site showed that in order to pay for all the new spending he wanted, taxes on everybody making over 80K a year would unavoidably have to rise. In my state, at least, due to the high cost of living, 80K is nowhere near "wealth."

missouriboy

04-23-2005, 07:19 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">a) I'm not aware of any impact on the environment. Less paperwork, and mail, maybe? Oh YES! Tons and tons less of that. </div></BLOCKQUOTE>Well, I AM aware now, after thinking it over.....

Environment? YES!!

I've long pondered the general eonomic impact this would have on the habits of the majority of citizens. And after mulling it some more, I see the connection with the environment. To the same very positive benefit! How so?

Well, when you start punishing (taxing) consumption, you're going to get less of it. Long-known economic fact of human nature, right? I think we'll consume less, and still improve our standard of living, under the FairTax system. Huh? How? Follow along as I attempt to explain it. I'll number the paragraphs so I can refer back to them; I don't know where this is going, yet.

1. The FairTax advocates state something like, "You can earn all you want, and still control the amount of tax you pay, because you'll have the choice of how you spend your income." And remember, only NEW items are taxed, one time only; used goods are not taxed.

2. We have become a wasteful, throwaway society, have we not? We used to fix things, use good stuff longer, etc., but lately we discard everything quickly and buy a new one, gotta have the latest, right? Excessive consumption, I'd say.

3. Everyone laments that only the rich can pay less taxes, by using "loopholes" (a silly word, I think, for lawful actions) that aren't accessible to the little guy. Well, this is going to be reversed completely! With #1 above in mind, the byword for "legal tax avoidance" is going to be "Buy Used, Not New!" This option of legal tax avoidance will become foremost in the minds of all poor and middle class consumers as they make their purchasing decisions. This won't be as much a consideration for the Rich (all our Senators?) and the SuperRich (all our favorite Hollywood Idiots?), they'll continue to consume as much new stuff as now.

4. This will greatly increase the demand for good used stuff. Whole new cottage industries will sprout up to recycle items we now throw away, because the difference in price will be at least that 23% tax. Displaced people with time on their hands will Fix it, Repair it, Paint it, so they can Sell it. TAX FREE!

5. The buyers for all this recycled stuff will be everybody, everywhere, because their first thought will be "Can I avoid the tax by getting a used one?" Sure, they'll still have to buy New also, like that new CD that just came out, because there are no secondhand ones yet, and that can of pork and beans for the kids, because the garden isn't producing yet.

6. To the extent that people can keep more of their money for their own benefit, by the legal avoidance of taxes, their standard of living will go up.

7. Thus, this new proliferation of activity in the Used Goods Market will result in less waste, less landfill usage, better utilization of scarce resources (for making so much new stuff), and would be very positive for the environment.

Environment? YES!!

hm0504

04-23-2005, 10:49 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">a) I'm not aware of any impact on the environment. Less paperwork, and mail, maybe? Oh YES! Tons and tons less of that. </div></BLOCKQUOTE>Well, I AM aware now, after thinking it over.....

Environment? YES!!
</div></BLOCKQUOTE>

Well, put; this is much along the lines I was thinking of.

missouriboy

04-25-2005, 04:43 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And remember, only NEW items are taxed, one time only; used goods are not taxed. </div></BLOCKQUOTE>I'm surprised only one person has questioned this radical new aspect of taxation; I know I certainly did, too. It doesn't seem fair, at first glance, does it? You buy a $100,000 home, and with tax it costs you $123,000; you live there 4-5 years, move, and the next guy only pays $100,000, right? NO FAIR! But... (today's installment follows).

The above situation may be true for little stuff, but I don't think big-ticket items like homes, cars, boats, planes, etc., will play out that way at all. Not if the free-market is allowed to flourish as it should.

I think the 23 percent is such a huge difference, that the free-market will come to value goods at their after-tax cost, not their pre-tax price, and will depreciate (or appreciate) from that point, not from the point of the producer's selling price.

For example, say you buy a new $20,000 car, pay the $4,600 tax, and trade again after it has depreciated 30 percent. Current thinking indicates the trade-in value would be 20,000 x .7 = 14,000. But what I think will happen instead is that it'll be 24,600 x .7 = 17,220. This means you only paid 30 percent of the tax, the same as 30 percent of the car price. Then, as the car cycles down through its lifespan, each successive owner will pay his proportionate share of the original $4,600 tax.

I think this will occur with all high-$ purchases under the FairTax system. Comments?

MJ_KC

04-25-2005, 05:13 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
4. This will greatly increase the demand for good used stuff. Whole new cottage industries will sprout up to recycle items we now throw away, because the difference in price will be at least that 23% tax. Displaced people with time on their hands will Fix it, Repair it, Paint it, so they can Sell it. TAX FREE!
</div></BLOCKQUOTE>
The parts and materials used to do the repairs will be new, so they will be subject to the tax. Don't expect the government to let anyone off the hook this easily.

missouriboy

04-25-2005, 05:52 AM

It's not about the government "letting anybody off the hook." What I meant was, it's tax free to the buyer, independent of the price set by the reseller. That price will of course be based on all his costs, including any taxed materials. UNLESS the reselling business has obtained an exemption certificate for production inputs, remember?

Of course, what you say is true. But I couldn't include every tiny detail in my already-long post. http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

missouriboy

05-04-2005, 03:41 AM

Here is an excerpt from Bill Bonner's free e-letter, The Daily Reckoning. <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">*** In the United States, household consumption is 71% of GDP. People think they are getting richer because they have money to spend - borrowed money. But what makes a person (or a nation) rich is not spending - it's NOT spending. We wouldn't think it necessary to say so except that so many people still seem to believe the opposite. They see the GDP numbers as signs of a "healthy, growing" economy. But what is growing in the United States is the very thing that makes the economy unhealthy - consumption. For every dollar of product that the U.S. sells abroad, it buys $1.60 worth of imported items, almost all of it consumer goods.

China, as we all know, is on the opposite side of the planet. Over there, people make the things that we buy and don't buy the things we make. American households are rich and buy a lot. Chinese households are poor and buy little. Americans save little; the Chinese save a lot. Only 42% of Chinese GDP is domestic consumption. Another 35% is devoted to exports. And nearly half of all the money spent in China, according to Stephen Roach, is for fixed investment. (This number seems impossibly large...)

Both economies are preposterously imbalanced. Both will probably fall down and break apart. But when the pieces are picked up, the Chinese will find themselves with the ability to produce wealth - things that people are willing to buy. America will find itself with less money to buy them with...and fewer people willing to provide credit. {snip} {emphasis added} </div></BLOCKQUOTE>(Note, this letter is purely about economics and investing, not about taxation. I'm not even sure if Mr. Bonner is aware of the FairTax proposal.)

Now, if you'd like to tie the significance of this to our national method of taxation, please go back and re-read my long post in the middle of Page 1, especially the single sentence right in the center of it.

If our great nation is to survive economically, we'd better stop punishing productivity, and instead take serious steps to promote it, while curbing the demon that's leading to our downfall!

missouriboy

05-13-2005, 06:13 AM

Another, more recent, missive...<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">In the financial markets, too...we have the impression that the earth is beginning to rumble. Here in Britain, every day seems to bring more bad news. The day before yesterday, factory output was at a 10-year low. Yesterday, retail sales took their biggest plunge in 10 years. And in the United States, we have this stunning news from The Financial Times:

"Real wages fall at fastest rate in 14 years."

We are tempted to stop right there. We have been saying for years that consumer spending cannot make people rich; instead, it makes them poor. You don't get rich by spending; you get rich by saving...and building new businesses, new factories, and new and better products. You get rich by foregoing consumption in favor of production - so you can produce better automobiles, for example, than your competitors. But the United States has done just the opposite. It consumes...and allows its competitors to invest and produce. That's why GM and Ford are now facing bankruptcy (not immediately)...while Toyota is reporting the strongest sales and highest profits ever.
</div></BLOCKQUOTE>I've often heard that democracies only last about 200 years or so. It's caused by the apathy that results from the great wealth produced by the democratic system of governance...

hm0504

05-13-2005, 07:14 AM

Though I generally strongly disagree with Democratic Senator Zell Miller, I was glad to hear him promote moving exclusively to a consumption tax on Jon Stewart's Daily Show several days ago. (It was just a one line comment; he did not expound on it.)

missouriboy

05-17-2005, 07:17 AM

Yes, moving exclusively to a consumption tax is a very important point. The Presidential Panel is currently studying all proposals, and the FairTax is the only one that REPEALS the income tax, to my knowledge. Others may propose piggybacking a consumption tax onto the present system, a disaster we must be vigilant against ever happening.

This commentary (http://www.nctimes.com/articles/2005/04/25/opinion/commentary/42405195913.txt) bears witness to the reasons why.

Excerpt: <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">So, if you like big government and want to see it grow ever bigger, then the VAT is for you. A system including both an income tax and a VAT amounts to a perfect storm, whereby government's growth could be dramatically accelerated, with entrepreneurship and the economy in general suffering. </div></BLOCKQUOTE>

missouriboy

06-06-2005, 03:50 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy, April 23:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">a) I'm not aware of any impact on the environment. Less paperwork, and mail, maybe? Oh YES! Tons and tons less of that. </div></BLOCKQUOTE>Well, I AM aware now, after thinking it over.....

Environment? YES!!

I've long pondered the general eonomic impact this would have on the habits of the majority of citizens. And after mulling it some more, I see the connection with the environment. To the same very positive benefit! How so?

Well, when you start punishing (taxing) consumption, you're going to get less of it. Long-known economic fact of human nature, right? I think we'll consume less, and still improve our standard of living, under the FairTax system.
...
{snip} ... See above, midpage, for original post. </div></BLOCKQUOTE>Well! A senior editor at the Free Liberal agrees with this. Click here (http://www.freeliberal.com/archives/001054.html) to read his commentary.

missouriboy

06-08-2005, 06:51 AM

Click here (http://www.newstarget.com/002358.html) for another commentary by someone who takes a level-headed look at the proposal, in a non-partisan spirit.

However, it contains a slightly erroneous statement about the rebate. He says... <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">...the national sales tax would eliminate taxes on the poor by sending every low-income wage earner a bonus check each year that covered the sales taxes for basic cost-of-living items like food, clothing and rent. </div></BLOCKQUOTE> This only serves to mislead people about the FairTax rebate, because it gets sent to everybody, not just the "low-income wage earner." If you are a citizen with a Social Security number, you're entitled to your exemptions regardless of your income level; in fact income level would not even be asked. Also, the rebate is paid monthly, not yearly, though it's based on the yearly-updated poverty level determined by HHS.

The guy also claims it's a Republican idea, which ain't necessarily so... it was developed during the Clinton administration, and was introduced as a bill in those years too. It's just that Bush has now raised tax reform to a higher priority, that's all.

ALL thinking politicians, Democrat and Republican alike, recognize that the current income tax system is an untenable monster, that must be dealt with soon. It's a bipartisan issue!

At the bottom of the page at the above link, there is a link to another, later, more detailed article written by the same author, which gives a very good catalog of reasons to adopt the FairTax. LINK (http://www.newstarget.com/003592.html)

usuallylurk

06-09-2005, 02:23 PM

The "Fair Tax" is not a fair tax at all. It's a regressive tax (a national sales tax) that will affect the poor more than the rich.

Wealthier people would be taxed on their SPENDING, not their earnings.

I've got news for you. Wealthier people don't spend what they earn. Poor people do.

Let's say this kooky "fair tax" went through.

Let's say it's set at seven percent. Joe and Alice are trying to make ends meet. They're retirees living on a fixed income of $30,000 per year. They also are living off of their retirement savings and draining that at $10,000 per year. $40,000 spent.

Now to allow this "fair tax" - they would lose all write-offs on their homes. All exemptions for being over 65. The low income exemption. So they would pay $2800 on an income of $30,000. They are penalized for saving.

Now - someone earning $100,000 per year. A married couple filing jointly pays around $27,000 a year in taxes. Let's just say I know this for a fact.

Hmm, let's say that someone lives off of $40,000. they would still only pay $2800 a year. Or roughly 10 percent of what they pay now.

It might shock you that people earn $100,000 or more a year and don't spend everything that they make. They're the ones that won't pay taxes. But those living hand-to-mouth would.

Stinks to me. And I would stand to personally benefit by it....

Naturist Mark

06-09-2005, 05:02 PM

I've studied the "fairtax" proposal. On the whole I don't think it is too bad. I would support it wholeheartedly if it replaced ALL taxes.

I would not support it if it only replaced progressive taxes like the Income tax.

At present only about half of federal income is from the progressive Income taxe, the rest of the income is from predominately regressive taxes. As it is the "Fairtax" would only replace the (progressive) income tax (the "fairest" tax we now have), and some (regressive) payroll taxes. In exchange the very wealthy who get most of their money from unearned income (investments, capital gains, anything not "wages") will get an even greater free ride than they do now. A "Fair" comsumption tax will have to have a way to tax funds that are transferred out of country where the "consumption" would not be taxed.

And that doesn't even begin to take into account State and Local taxes, which are overwhelmingly dominated by regressive taxes.

So how about a Real Fairtax, that replaces all Federal, State and Local taxes with a single adjustable consumption tax coupled with a sizable rebate. - By adjustable I mean that State and Local governments would add their own rates to the Fairtax as collected in their areas, with a single tax authority returning the proceeds to them.

No more property taxes, no more gasoline taxes, no more sales taxes (other than the Fairtax), no more Social Security, Medicare or Workers Compensation taxes.

THAT would be so fair that Washington would never allow it.

-Mark

usuallylurk

06-09-2005, 06:23 PM

Frankly, if you study out the tax codes of all industrialized nations - the United States is a TAX HAVEN.

And a "consumption tax" would not just cut down revenues to the government - it would shift the burden of taxes primarily to those making under $100,000 a year.

This sounds crazier than Steve Forbes' infamous "flat tax" of 15 years ago - a standard 17 percent tax rate. Which would have resulted in =

1) People making under $30,000 would pay higher taxes

2) He also wanted to abolish capital gains and dividend taxes. Guess which element of society that would have benefitted most?

3) Kiss your children's chances of home ownership good-bye. To pay for the "flat tax", one of the things would have been dumped is the mortgage interest deduction. A huge chunk of families would no longer be able to purchase homes if that were scrapped. I would bet this misnomered "fair tax" also calls for flushing home mortgage interest down the toilet as well.

missouriboy

06-10-2005, 03:16 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
I've studied the "fairtax" proposal. On the whole I don't think it is too bad. I would support it wholeheartedly if it replaced ALL taxes. </div></BLOCKQUOTE>Mark, the FairTax is only at the federal level, the same as the current federal income tax. It does not, and CANNOT, address state and local taxes. How could it? In communist China maybe it could, but not in America.

Someday, sometime, maybe, after Tyranny becomes total. But not today, God forbid.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">At present only about half of federal income is from the progressive Income taxe, the rest of the income is from predominately regressive taxes. As it is the "Fairtax" would only replace the (progressive) income tax (the "fairest" tax we now have), and some (regressive) payroll taxes. </div></BLOCKQUOTE>Nope, not just "SOME (regressive) payroll taxes," ALL (federal) payroll taxes. This is a large part of how the working poor get completely UNtaxed by this system. In fact, people who spend LESS THAN the poverty level, on new goods, will get more money back in their rebates than the tax they pay. This roughly equates to the Earned Income Credit in the income tax system of today.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"> In exchange the very wealthy who get most of their money from unearned income (investments, capital gains, anything not "wages") will get an even greater free ride than they do now. </div></BLOCKQUOTE>Hmmm, do I detect a bit of "class envy" here? Everybody who wants to can save and invest, not just the "very wealthy." Savings are used for Production, Production creates Jobs and Wealth, and is to be encouraged. So it's not taxed to death, like it is today.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">A "Fair" comsumption tax will have to have a way to tax funds that are transferred out of country where the "consumption" would not be taxed. </div></BLOCKQUOTE>Now there's a good point. But let's think about it some more...

The money spent for consumption elsewhere would be taxed by the country where it's spent. (To the extent those other countries have consumption taxes, like the VAT, which many do have.) By the same token, WE would now tax foreigner's expenditures in this country, that are NOT being taxed now. So it would be a trade-off; you can't have it both ways. <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And that doesn't even begin to take into account State and Local taxes... </div></BLOCKQUOTE>Again, no it doesn't. Neither does the current federal income tax. Remember, this is a proposal to replace that federal income tax, only, not every tax in the world. ONE step at a time, right? Rome wasn't built in a day, either. <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">So how about a Real Fairtax, that replaces all Federal, State and Local taxes with a single adjustable consumption tax coupled with a sizable rebate. </div></BLOCKQUOTE>Ibid. <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">By adjustable I mean that State and Local governments would add their own rates to the Fairtax as collected in their areas, with a single tax authority returning the proceeds to them. </div></BLOCKQUOTE>It would work real close to that already. Backwards, though: the states now collect sales tax at the cash register (45 of them, anyway). The federal rate would be added to that, and forwarded to Washington by the states, who would be compensated for that service. I think the retailer gets a little cut, too.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">No more property taxes, no more gasoline taxes, no more sales taxes (other than the Fairtax), no more Social Security, Medicare or Workers Compensation taxes. </div></BLOCKQUOTE>One step at a time, one step...

Property taxes are NOT federal.

Gasoline taxes are a user fee, paid PROPORTIONALLY by those who do the USING. They're in addition to the income tax now, aren't they? No change here.

Workers Compensation is, again, a State Tax. Off-topic!

FICA and Medicare Tax: GONE! (Included in the consumption tax rate, paid by everybody who SPENDS for consumption: rich people, foreign visitors, drug dealers, hookers, gamblers, everybody who pays income tax now, plus everybody WHO DOESN'T! Everybody except poor people, that is: remember it's now the POOR who get the free ride, not the "very wealthy."
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">THAT would be so fair that Washington would never allow it. </div></BLOCKQUOTE>My fear is that you are exactly correct about that. http://clothesfreeforums.com/groupee_common/emoticons/icon_frown.gif

missouriboy

06-10-2005, 03:52 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
The "Fair Tax" is not a fair tax at all.
...snip...
Let's say it's set at seven percent.
...snip... </div></BLOCKQUOTE>Everything in your post indicates you don't even know what the FairTax is. Indeed, you haven't even availed yourself of the few important details presented in this thread.

Therefore, it's pointless to respond to anything you wrote. Sorry. http://clothesfreeforums.com/groupee_common/emoticons/icon_frown.gif

Naturist Mark

06-10-2005, 05:09 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Mark, the FairTax is only at the federal level, the same as the current federal income tax. It does not, and CANNOT, address state and local taxes. How could it? In communist China maybe it could, but not in America. </div></BLOCKQUOTE>1) China is not Communist anymore, it is Fascist. It is not a reasonable argument to dismiss something by calling it "commie", especially when there is no logical connection.
2) under Federalism it is quite common for taxes to be collected by the federal govt and distributed to State and Local jurisdictions, happens all the time. I am suggesting that since the Fairtax would be a single tax, it should be administered by a single agency, but that local and State governments would have the authority to levy a portion of the Fairtax in their jurisdictions, which would be distributed to them. Under the current system in Ohio sales taxes can differ by county, city and township, but all sales taxes go to Columbus and are returned to their local jurisdictions in accordance with their individual additional levies to the sales tax rate.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">

Someday, sometime, maybe, after Tyranny becomes total. But not today, God forbid. </div></BLOCKQUOTE>Again, this is non-sequitor. Some argue that all taxes are tyranny, but a necessary one. A unified Fairtax system would not usurp local and State prerogatives to levy the Fairtax as its citizens deem necessary<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">At present only about half of federal income is from the progressive Income taxe, the rest of the income is from predominately regressive taxes. As it is the "Fairtax" would only replace the (progressive) income tax (the "fairest" tax we now have), and some (regressive) payroll taxes. </div></BLOCKQUOTE>Nope, not just "SOME (regressive) payroll taxes," ALL (federal) payroll taxes. This is a large part of how the working poor get completely UNtaxed by this system. In fact, people who spend LESS THAN the poverty level, on new goods, will get more money back in their rebates than the tax they pay. This roughly equates to the Earned Income Credit in the income tax system of today. </div></BLOCKQUOTE>you are mixing the rebate with the payroll taxes. Not ALL payroll taxes are in the current proposal, because a significant portion of payroll taxes are from State and Local governments - such as some unemployment taxes and worker compensation taxes, also I'm not certian that Fairtax would replace medicare payroll taxes.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"> <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
In exchange the very wealthy who get most of their money from unearned income (investments, capital gains, anything not "wages") will get an even greater free ride than they do now. </div></BLOCKQUOTE>Hmmm, do I detect a bit of "class envy" here? </div></BLOCKQUOTE>Simple statement of fact. It is a common tactic to dismiss discussion of tax effects on income levels as Class envy or "Class warfare" without addressing the issues.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
Everybody who wants to can save and invest, not just the "very wealthy." Savings are used for Production, Production creates Jobs and Wealth, and is to be encouraged. So it's not taxed to death, like it is today. </div></BLOCKQUOTE>The very wealthy are the only group who have significantly increased their income in the past 5 years, so I suggest they are not being "taxed to death" to their detriment. The working poor on the other hand are losing effective income, as are a large portion of the middle class, meanwhile tax burdens shift down the income scale and are shifted from progressive income taxes to regressive (largely state) taxes. That is a major reason that a universal "Fairtax" would be such a good thing <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">A "Fair" comsumption tax will have to have a way to tax funds that are transferred out of country where the "consumption" would not be taxed. </div></BLOCKQUOTE>Now there's a good point. But let's think about it some more...

The money spent for consumption elsewhere would be taxed by the country where it's spent. (To the extent those other countries have consumption taxes, like the VAT, which many do have.) By the same token, WE would now tax foreigner's expenditures in this country, that are NOT being taxed now. So it would be a trade-off; you can't have it both ways. </div></BLOCKQUOTE>Since "investment" is not taxed, foreigners would not be taxed on much of the money they bring here and take away. Since the balance of trade is so lopsided, America would forego far more consumption taxes than it would gain by foreign purchases of US goods.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">And that doesn't even begin to take into account State and Local taxes... </div></BLOCKQUOTE>Again, no it doesn't. Neither does the current federal income tax. Remember, this is a proposal to replace that federal income tax, only, not every tax in the world. </div></BLOCKQUOTE>And I am saying that as JUST a replacement for the Federal Income Tax, the "Fairtax" is a pig in poke. Bad idea. But as a universal tax replacement it is defendable.

-Mark

missouriboy

06-10-2005, 06:02 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
1) China is not Communist anymore, it is Fascist. It is not a reasonable argument to dismiss something by calling it "commie", especially when there is no logical connection. </div></BLOCKQUOTE>So? Unrelated detail... you're ignoring the real point, which is:

"...the FairTax is only at the federal level, the same as the current federal income tax. It does not, and CANNOT, address state and local taxes. How could it?"

The rest of your post mostly ignores it too, such that it's barely on-topic anymore.

Mark, you disdain the FairTax mainly because it stops short of where you want it to go. But consider this: if it attempted to do all you say it should, in a single step, do you think it would EVER get done? I think not.

You want us to jump to the top of the (your) ladder in one fell swoop, bypassing the lower rungs. You won't settle for the necessary first steps, so your vote is to do nothing at all, I guess. Well, if that's your vote, you're certainly entitled to it.

Cheers! http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

Naturist Mark

06-10-2005, 04:23 PM

missouriboy

06-11-2005, 01:01 AM

"...that only replaces the Income Tax...just eliminating the only progressive facet of the tax structure..."

FairTax 101.

The current individual Income tax is progressive.
The current individual Social Security tax is regressive.
The current individual Medicare tax is regressive.

The FairTax replaces ALL THREE, the progressive and REGRESSIVE alike, with a PROGRESSIVE sales tax, which results in removing all low-income people from the Federal Individual Tax burden completely. Unlike the current system, in which they are taxed about 15% on the first and every dollar earned.

( Sigh. I said I wasn't going to repeat repeat repeat all the basics in this thread, instead I gave the links where they can be found, but here I go anyway... frustration!)

Naturist Mark

06-11-2005, 05:17 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:

FairTax 101.

The current individual Income tax is progressive.
The current individual Social Security tax is regressive.
The current individual Medicare tax is regressive.

The FairTax replaces ALL THREE, the progressive and REGRESSIVE alike, with a PROGRESSIVE sales tax, which results in removing all low-income people from the Federal Individual Tax burden completely. Unlike the current system, in which they are taxed about 15% on the first and every dollar earned.

( Sigh. I said I wasn't going to repeat repeat repeat all the basics in this thread, instead I gave the links where they can be found, but here I go anyway... frustration!) </div></BLOCKQUOTE>

What you left out is a comparison of the rates of progressivity. The Fairtax is only mildly progressive in the middle income ranges due to the rebate structure. Due to the fact that the working poor and lower quintile of the middle class spend essentially all of their available income on taxable goods and services while the the wealthy do not the Fairtax becomes more regressive in the upper quintiles. The progressive effect of the rebate asymptotally approaches zero as you move up the income scale - the mild "progressivity" it introduces for low wage earners dissappears in the upper income ranges. The inevitable result is that a Fairtax designed to be revenue neutral while replacing the Income Tax and FICA taxes (SS and Medicare) would substantially shift tax burdens from the top quintile to the middle class. Sure, there would be no more IRS returns to fill out, but the very wealthy would get yet another massive gift and the middle class would once again get the shaft.

Unless of course this initial limited Fairtax were to be set usuriously large, such as 50% to 60% of sales coupled with a truly gigantic individual rebate. I don't see that happening. Most advocates expect a Fairtax to be about 30% (or 23% on a 'tax inclusive basis': i.e. 30 cents on the dollar is 23% of $1.30)- which would be a tax increase on the middle class and far less progressive than the current mess.

-Mark

usuallylurk

06-11-2005, 10:32 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
The "Fair Tax" is not a fair tax at all.
...snip...
Let's say it's set at seven percent.
...snip... </div></BLOCKQUOTE>Everything in your post indicates you don't even know what the FairTax is. Indeed, you haven't even availed yourself of the few important details presented in this thread.

Therefore, it's pointless to respond to anything you wrote. Sorry. http://clothesfreeforums.com/groupee_common/emoticons/icon_frown.gif </div></BLOCKQUOTE>

Then fill me in.

I want to know more.

If the tax burden is shifted to those making under $30,000 and away from those of us in the six-figure range, I want to know more!

Now seriously, this sounds like a Libertarian stunt, and your response is typically Libertarian = if someone corners you, imply that they're stupid and ignorant.

... and they wonder why no one takes them seriously.....

usuallylurk

06-11-2005, 01:20 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">For those of you boasting of tax refunds. I hate to say it, but you need to adjust your withholding. That money could have earned interest. Your refund is your money that you gave to the government as an interest-free loan. http://clothesfreeforums.com/groupee_common/emoticons/icon_eek.gif </div></BLOCKQUOTE>

I agree! I am surprised at the number of people who are overjoyed at receiving a monstrous tax refund.

The game I try to play (I have to file quarterly) is to pay enough so I don't incur a penalty, but on the other hand I still have to pay. I've managed to do that successfully for the last five years - up until this year, I wound up overpaying by $800 ... (fume).... and I did make an error, because I thought I was getting a refund of #26.00 ....

NudeTopher

06-12-2005, 12:15 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
FairTax 101.

The current individual Income tax is progressive.
The current individual Social Security tax is regressive.
The current individual Medicare tax is regressive.
) </div></BLOCKQUOTE>
------------------------------------------------
From your replies MB, I realize that you don't like being corrected. But, Social Security (FICA) isn't a tax. Social Security is an insurance policy that provides for minor children when a parent dies, provides for disability income, and guarantees a minimum standard of living in the older years.

usuallylurk

06-12-2005, 06:30 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"> Unlike the current system, in which they are taxed about 15% on the first and every dollar earned. </div></BLOCKQUOTE>

Not true at all.

A couple filing jointly pays no federal tax on the first $15,900 earned. Yes, there are SSA taxes of 6.2% but this certainly renders your 15 percent statement isn't true.

Perhaps if you consider EMPLOYER contributions, your statement would be accurate. But if you abolished SSA and Income tax - do you really think your EMPLOYER will give his mandator SS contribution to you?

Naturist Mark

06-12-2005, 08:43 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
Perhaps if you consider EMPLOYER contributions, your statement would be accurate. But if you abolished SSA and Income tax - do you really think your EMPLOYER will give his mandator SS contribution to you? </div></BLOCKQUOTE>

This is a quibble. I would say the actual payroll taxes on the first dollar earned are more like 19% (this varies a bit by locality).

It is entirely correct that the employer pays most of the payroll tax, while the employee only sees 6.3% deducted for SS, and another 1.45% for medicare, meanwhile your employer pays a matching amount for those, plus probably pays the state for unemployment and worker's compensation in addition. However - I maintain that this is just an accounting gimmick, what you really see is a partial shielding of income paid for these taxes from further income taxes, but they actually DO represent income earned by the employee because they are part of the compensation obligation of the employer and part of his cost of labor. Those employer paid portions of payroll taxes still need to be covered by value the employee provides to the enterprise. I.E. the employee earns that money even though it falls on the employer side of ledger. Just because most payroll taxes are hidden from the employee doesn't mean that it isn't paid by money the employee earned - for proof, just ask any self-employed person.

-Mark

missouriboy

06-13-2005, 04:23 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by NudeTopher (christopher):
...But, Social Security (FICA) isn't a tax. Social Security is an insurance policy that provides for minor children when a parent dies, provides for disability income, and guarantees a minimum standard of living in the older years. </div></BLOCKQUOTE>I know that's technically true, but that exchange was about the fact that: it IS extracted from workers' paychecks, based on their productive labor. Under the FairTax it will not be, yet the same benefits will be provided to everyone, unchanged, (still based on their earnings) but funded by the consumption tax paid by everybody.

So, the result is the replacement of regressivity by progressivity, which completely UNtaxes poor people as concerns the individual Federal tax burden (for doing labor). That's the point Mark and I were discussing: the extent of regressive transfers that get replaced by progressive transfers.

missouriboy

06-13-2005, 04:31 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Those employer paid portions of payroll taxes still need to be covered by value the employee provides to the enterprise. I.E. the employee earns that money even though it falls on the employer side of ledger. Just because most payroll taxes are hidden from the employee doesn't mean that it isn't paid by money the employee earned - for proof, just ask any self-employed person. </div></BLOCKQUOTE>Exactly. And that's why they're included in this grand plan to stop taxing productivity, and shift that taxation to consumption instead. It's not primarily about who gets taxed, it's about what activity gets taxed.

missouriboy

06-13-2005, 04:54 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">If the tax burden is shifted to those making under $30,000 and away from those of us in the six-figure range, I want to know more! </div></BLOCKQUOTE>I don't see the tax burden being intentionally shifted from any group to any other group. Instead, each individual is taxed on how much they choose to spend, for consumption over and above the poverty level, on taxable items. Their income level may be an enabling factor, but it's no longer the government-dictated determining factor.

This decoupling of taxation from income levels is what's difficult to comprehend at first, but it's what we have to open our minds to, in order to understand the rest of it.

missouriboy

06-13-2005, 05:27 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
What you left out is a comparison of the rates of progressivity. The Fairtax is only mildly progressive in the middle income ranges due to the rebate structure. Due to the fact that the working poor and lower quintile of the middle class spend essentially all of their available income on taxable goods and services while the the wealthy do not the Fairtax becomes more regressive in the upper quintiles. The progressive effect of the rebate asymptotally approaches zero as you move up the income scale - the mild "progressivity" it introduces for low wage earners dissappears in the upper income ranges. The inevitable result is that a Fairtax designed to be revenue neutral while replacing the Income Tax and FICA taxes (SS and Medicare) would substantially shift tax burdens from the top quintile to the middle class. Sure, there would be no more IRS returns to fill out, but the very wealthy would get yet another massive gift and the middle class would once again get the shaft.

Unless of course this initial limited Fairtax were to be set usuriously large, such as 50% to 60% of sales coupled with a truly gigantic individual rebate. I don't see that happening. Most advocates expect a Fairtax to be about 30% (or 23% on a 'tax inclusive basis': i.e. 30 cents on the dollar is 23% of $1.30)- which would be a tax increase on the middle class and far less progressive than the current mess. </div></BLOCKQUOTE>Good discussion, Mark. I'd love to see you share this with those 100+ economists who signed the letter. Would it influence their opinions, after all their own deep studies? Who knows...

But, "...the very wealthy would get yet another massive gift and the middle class would once again get the shaft..." strikes me as strange thinking; progressivity does have to end somewhere, does it not? The FairTax ends it just under 23% to avoid any system of punitive, confiscatory rates. What's fair? 50, 75, 95%? 100%? More? There's still all this animosity, and yes I call it "class envy," toward those who produce the most wealth. All this derisive "free ride" talk.

Sure, rich people can afford more filet mignon steaks than poor people. Does this mean they're getting a free ride from the cattle industry?

Sure, rich people can afford more Cadillacs and Ferraris than poor people. Does this mean they're getting a free ride from the automobile industry?

Everybody would still be paying for the services they're getting from the federal government (except the very poor get theirs free). Rich people don't get any more on average than middle class people do, so why should they pay more? Why should the price they pay for what they get, be any higher than it is for everyone else? That's Marxism, circa 1848.

Which system succeeded, and which one failed? If we can all agree that American democracy produced a better system than those other failed systems, then why can't we also give gool ol' American ingenuity credit for coming up with a better system to fund its necessary governmental functions?

missouriboy

06-13-2005, 06:20 AM

I'd like to comment further on a previous exchange...:<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">by Naturist Mark:<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">by missouriboy:<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">by Naturist Mark:
A "Fair" comsumption tax will have to have a way to tax funds that are transferred out of country where the "consumption" would not be taxed. </div></BLOCKQUOTE>Now there's a good point. But let's think about it some more...

The money spent for consumption elsewhere would be taxed by the country where it's spent. (To the extent those other countries have consumption taxes, like the VAT, which many do have.) By the same token, WE would now tax foreigner's expenditures in this country, that are NOT being taxed now. So it would be a trade-off; you can't have it both ways. </div></BLOCKQUOTE>Since "investment" is not taxed, foreigners would not be taxed on much of the money they bring here and take away. Since the balance of trade is so lopsided, America would forego far more consumption taxes than it would gain by foreign purchases of US goods. </div></BLOCKQUOTE>Balance of trade, yes.

One of the major things we have exported, due to globalization, is a huge portion of our good manufacturing JOBS. The effect is that we have farmed out the labor component of most hard-goods consumed by Americans today. This results in lower revenues for our own government because the Income Tax on that labor is lost.

Under the FairTax, all those imported consumer goods will have the 23% consumption tax applied, just like our own domestic goods and services will. And that will recapture the revenue now being lost on the labor component .

Farming out the labor for the production of our own goods has been a significant contributor to that imbalance of trade lately, and has to also be part of the increases in the federal deficit. To restore tax revenue on the value of that labor would be positive for the deficit situation.

The FairTax would have a huge influence on the competetiveness ratio of domestic/imported goods. Several studies about the positive effects of this are alluded to in the http://www.FairTax.org website.

usuallylurk

06-13-2005, 06:47 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Everybody would still be paying for the services they're getting from the federal government (except the very poor get theirs free). Rich people don't get any more on average than middle class people do, so why should they pay more? Why should the price they pay for what they get, be any higher than it is for everyone else? That's Marxism, circa 1848.

Which system succeeded, and which one failed? If we can all agree that American democracy produced a better system than those other failed systems, then why can't we also give gool ol' American ingenuity credit for coming up with a better system to fund its necessary governmental functions? </div></BLOCKQUOTE>

I've got news for you.

Again, study your economics.

Marxism failed. Unbridled capitalism as practiced in 1848 ALSO failed.

The economic system that has emerged incorporates elements of both.

Would I like to see the upper middle class and the wealthier people pay lower taxes? Perhaps. But not at the cost of breaking our societal structure. I don't want to go back to 19th century capitalism where the United States had two classes - the haves and have-nots.

I don't think it's unfair to tax the upper end of incomes. After all, it is the infrastructure in this country - that encourages investment and growth. So they can MAKE that money. Shifting the tax burden to consumption? NO. I cannot accept that one.

Smells like a libertarian platform, disguised as being "Fair".

I live in Massachusetts - where socialist views abound. Some regard us as whacko. But you know, it's a funny thing.

We have some of the best public schools in the country. And public universities. We have the best health care system IN THE WORLD. Not the country. THE WORLD. In Massachusetts you will find some of the lowest violent crime rates in the country. Our cities, for the most part, differ from the rest of the country -- yeah, they're safe. You can walk around most of Boston at night without fear.

We don't go carrying guns around. We don't need our bang-bangs to feel secure, although we can have them if we like.

Now - those states that don't have the "radical socialist views" - e.g., Texas and Florida. Middle class and above live in gated communities. Bars on your windows. People carrying guns. Dead inner cities at night (man, downtown Tampa is a creepy place at night). Schools stink. And an increasing portion of those states' budgets goes to = PRISONS. Violent crime reigns supreme.

And my 5.25 percent state income tax goes to provide an infrastructure that encourages job creation and development as well. You should hear those who live in "tax free" (ha ha) New Hampshire pi$$ and moan about Mass state income tax that they have to pay because -- all the jobs are in Massachusetts! They have to leave their "paradise" state to work every day!

I will pay my state income tax, and my federal taxes. This upper-middle class nudist will pay his higher percentage, live frugally, and pay his taxes. I don't think our socialism/capitalism mix is all that weird, it's worked for the last 70 years. Post-war Europe adopted it. It works for them as well.

Even though I pay more, we ALL enjoy a greater quality of life -- or the opportunity to attain it if we DON'T have it.

So yeah, I cannot and won't accept taxing consumption. I think it will have a negative effect on the economy - we need the wealthier folks to spend their income as well as invest it -- not provide them with disincentives to do so.

When the millionaire buys that new boat or RV, guess what? We ALL win.

missouriboy

06-13-2005, 07:20 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Shifting the tax burden to consumption? NO. I cannot accept that one. </div></BLOCKQUOTE>Okay, fine. But please re-read my long post in the middle of Page 1 and contemplate the broad impacts listed there. If you still can't accept it, it's still fine.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">When the millionaire buys that new boat or RV, guess what? We ALL win. </div></BLOCKQUOTE>And we still would, under the FairTax. Remember, all the hidden taxes, and costs of complying with them, will have been wrung out of the price of that boat or RV before you buy it. And you'll have all of your gross paycheck, plus the rebate, in your pocket with which to pay your tax.

But maybe you prefer dicking around with those quarterly estimated tax returns, and worrying about penalties (and worse, if your mistakes, even honest ones, are big enough), and making sure you get your annual 1040 done exactly right and filed on time, etc... that's okay too.

usuallylurk

06-13-2005, 09:48 AM

.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">When the millionaire buys that new boat or RV, guess what? We ALL win. </div></BLOCKQUOTE>And we still would, under the FairTax. Remember, all the hidden taxes, and costs of complying with them, will have been wrung out of the price of that boat or RV before you buy it. And you'll have all of your gross paycheck, plus the rebate, in your pocket with which to pay your tax.

But maybe you prefer dicking around with those quarterly estimated tax returns, and worrying about penalties (and worse, if your mistakes, even honest ones, are big enough), and making sure you get your annual 1040 done exactly right and filed on time, etc... that's okay too.[/QUOTE]

Apparently you don't know the procedure.

A quarterly tax is a matter of filling out a payment voucher and sending it into the IRS with a check. It takes one minute to do. As I said, it's an approxmation. If in doubt, overpay.

My taxes - and I file two schedules and a long 1040 - takes me approximately two hours a year to do. I do it by hand, but if there's any confusion, you can buy software to help you. It costs around $10 and its cost is deductable.

I have to compile the information ANYWAY - because I have a stock portfolio. A "fair tax" would not assist me, I need those schedules to level set my stock bases.

Again, when someone has extra jingle in their pocket, the taxes could prevent them from spending it.

I also see this Fair Tax scheme as a screw job on the elderly.

Those who saved their entire lives - for a comfortable retirement - as I am doing now - will be retaxed on the money they have already been taxed on during their working lives!

In other words, their earnings and investments were already taxed -- and will be taxed AGAIN when they spend it. That doesn't seem like a "fair tax" to me.

With the baby boomers about to enter retirement, it's a ripoff for them.

Let's say I build up an estate of $1 million. Which has already been taxed through the years. I choose to live off of $50,000 per year. I get taxed again for spending the earnings I've already been taxed on for 40 years.

Uh.... phew.

missouriboy

06-13-2005, 03:33 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
Apparently you don't know the procedure. </div></BLOCKQUOTE>Of course I do. I've filed quarterly estimated taxes, both federal and state, many times.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">It takes one minute to do...a long 1040 - takes me approximately two hours a year to do. </div></BLOCKQUOTE>Let's stop exaggerating, shall we? OTOH, if you can comply with your reporting obligations in only 2 hours and 4 minutes per year, kudos to you; no one else I ever heard of can do that.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I also see this Fair Tax scheme as a screw job on the elderly.

Those who saved their entire lives - for a comfortable retirement - as I am doing now - will be retaxed on the money they have already been taxed on during their working lives! </div></BLOCKQUOTE>AHA! Someone finally detected that problem, one that I've been aware of for at least a couple years. Congratulations! http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">In other words, their earnings and investments were already taxed -- and will be taxed AGAIN when they spend it. That doesn't seem like a "fair tax" to me. </div></BLOCKQUOTE>And of course you're right. It wouldn't be fair. But you need to be informed of the whole problem...

It's NOT a problem with the FairTax itself; it's just a problem with the transition from the old system to the new, and it HAS been addressed. I don't know all the details, and I'm sure they need more work, which would surely occur when the final law is hammered out in Congressional debate.

What I've learned so far is that there will be a Declaration form to fill out for this transition, which claims all current assets that have already been taxed, and there will be some form of exemption for this amount. I don't know how it will work, perhaps a prepayment of the tax on that amount, but I'm not sure about that... it hasn't come to pass yet.

But you're right, the double-tax MUST be avoided during the transition, and will probably require a separate legislative act to accomplish.

Thanks for bringing this to everyone's attention, so I won't have to. But please don't assume it's a scheme "to screw everybody," OK? I think we can give the proponents credit for knowing the populace is not that stupid. http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

Naturist Mark

06-13-2005, 04:28 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:

What I've learned so far is that there will be a Declaration form to fill out for this transition, which claims all current assets that have already been taxed, and there will be some form of exemption for this amount. I don't know how it will work, perhaps a prepayment of the tax on that amount, but I'm not sure about that... it hasn't come to pass yet.

But you're right, the double-tax MUST be avoided during the transition, and will probably require a separate legislative act to accomplish. </div></BLOCKQUOTE>

Oh boy, this is getting more and more complicated. I thought the Fairtax was supposed to be simple?

OK, so you get to shield anything you buy with old savings, investments, or proceeds from previous possessions from the new tax. So if you have plenty of assets already, all you have to do is buy everything with your "old" money taxfree, and replace your investments with your "new" money (remember, investments are now tax free). Wow.

Also corporations are no longer taxed, only the purchases of individuals, and only of "new" products, not "used" products. So if you happen to own a corporation, or ARE a corporation (S corporation), no taxes for you. Or if you have a compliant corporation that is willing to buy new products taxfree, and then sell them to you "used", you are still taxfree. So not only are those of means going to get a great big tax rate reduction, they will have the means of being tax free. Sweet.

Why is this so much better than VAT?

-Mark

missouriboy

06-13-2005, 05:25 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
Oh boy, this is getting more and more complicated. I thought the Fairtax was supposed to be simple? </div></BLOCKQUOTE>The one-time transition will be quite an ordeal, yes. But for the ongoing FairTax itself, find the number of pages in the current Internal Revenue Code, and the number (someday) in the Fairtax law, and the number of people involved with compliance requirements for each system. The answer will become obvious.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">OK, so you get to shield anything you buy with old savings, investments, or proceeds from previous possessions from the new tax. So if you have plenty of assets already, all you have to do is buy everything with your "old" money taxfree, and replace your investments with your "new" money (remember, investments are now tax free). Wow. </div></BLOCKQUOTE>If that's a problem, I'm sure the experts have discovered it already, in the past ten years of its development. See next paragraph.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Also corporations are no longer taxed, only the purchases of individuals, and only of "new" products, not "used" products. So if you happen to own a corporation, or ARE a corporation (S corporation), no taxes for you. Or if you have a compliant corporation that is willing to buy new products taxfree, and then sell them to you "used", you are still taxfree. So not only are those of means going to get a great big tax rate reduction, they will have the means of being tax free. Sweet. </div></BLOCKQUOTE>What you've described is fraud. It would be interesting to see the consequences for trying it. Remember, only "production inputs" are tax-free for corporations; this would have to be provable to auditors, right?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Why is this so much better than VAT? </div></BLOCKQUOTE>Why is fraud better than a VAT? I dunno. http://clothesfreeforums.com/groupee_common/emoticons/icon_confused.gif

I posted a link to a good commentary about VATs, a page or so back. And there are plenty more where that came from. Search! http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

Naturist Mark

06-13-2005, 05:45 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Remember, only "production inputs" are tax-free for corporations; this would have to be provable to auditors, right? </div></BLOCKQUOTE>

Please explain, I thought the Fairtax was only levied on new goods and services for personal consumption when bought by the consumer. Are you saying that corporations DO have to pay the Fairtax on their purchases too? Do the corporations get the rebate too?

-Mark

missouriboy

06-14-2005, 04:12 AM

I suppose I parroted "corporations" in response to your inclusion of that word in your question. Actually, it's the activity that gets taxed, not any particular entity. For any person or entity to purchase tax-free would require possession of an exemption certificate for those items. The application process would involve demonstrating legitimacy, I'd say, and I also think we could assume the persons administering the process won't be dummies. They know fraud will always be attempted; that's no different from today.

Corporations, "S" corporations, etc., are largely products of the current tax code, aren't they? The need for them will be different in the new environment created by such a landslide change in the tax law. Don't ask me how the needs will change, but it's obvious that they would.

I know, you're going to say all this administering will require a whole new bureaucracy, and that's true. I think I read that in total size and cost, it would be only 10 to 20 percent of what we have now. Remember, the forecast for annual savings in compliance costs is $225 to $250 BILLION!

Naturist Mark

06-14-2005, 05:38 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
For any person or entity to purchase tax-free would require possession of an exemption certificate for those items. </div></BLOCKQUOTE>

The Fairtax website flatly states that businesses are not taxed. There is no class of exempt items - not even food or medicine. I would assume every business would get an exemption certificate of some sort just like present exempt organizations like schools and charities get for exemption from State sales taxes (in some States). No one is going to be doing puchase by purchase oversight, although the tax authority may very well come in afterward to do an audit. Sounds rather familiar.

The Fairtax site states that all consumption ultimately is purchased by individual consumers. But that is plain wrong. Businesses are end consumers of a vast percentage of consumer goods that do not directly become part of their product offerings. From private jets to coffee creamers these items are used by employees but not purchased by them and at no point enter the Fairtax revenue stream. If a Fairtax is passed, you'll see a huge increase in such non taxed consumption.

-Mark

usuallylurk

06-14-2005, 05:52 AM

Ah... looks like a tinge of the old "Steve Forbes flat tax" is creeping into the misnomered "fair tax".

No corporate taxes. Hmmmm....

Forbes' kooky plan was to eliminate all lower- and middle-class perks, such as the mortgage interest deduction, child care, etc. - wipe 'em out and replace it with an across the board 17 percent tax.

Of course, investment dividends (heh, heh) would be exempt. Which means that most small entrepeneurs would vote and pay themselves in "stock dividends" rather than salary.

Well, I knew this scheme had hidden aromas...

usuallylurk

06-14-2005, 05:56 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
I don't see the tax burden being intentionally shifted from any group to any other group. . </div></BLOCKQUOTE>

Look, if simple analysis - just banter on a BBS - shows that the tax burden will be shifted from one group to another -- which, under this dubious proposal, it will be -- the shift then becomes INTENTIONAL.

missouriboy

06-14-2005, 05:58 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
The Fairtax website flatly states that businesses are not taxed...The Fairtax site states that all consumption ultimately is purchased by individual consumers. </div></BLOCKQUOTE>Yeah, I know it does. But I think those are general philosophical statements used to sell the conceptual idea. The actual law itself is much more detailed.

I agree with you that there'll be lots and lots of stuff that slips through the cracks, just as there is in the current system. The question is: which system would have the most of that? I dunno...

For one thing, the present system contends with millions and millions more tax-paying "entities" than the new system would (100 million individuals filing tax returns annually, would be ended). This is a huge reduction in the opportunities for evasion, but of course new ones will crop up to replace them. Each system has its own unique problems in this regard, so again, the question is: which system would be more easily managed and controlled? Good question!

usuallylurk

06-14-2005, 06:11 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
The Fairtax website flatly states that businesses are not taxed...The Fairtax site states that all consumption ultimately is purchased by individual consumers. </div></BLOCKQUOTE>Yeah, I know it does. But I think those are general philosophical statements used to sell the conceptual idea. The actual law itself is much more detailed.

I agree with you that there'll be lots and lots of stuff that slips through the cracks, just as there is in the current system. The question is: which system would have the most of that? I dunno...

For one thing, the present system contends with millions and millions more tax-paying "entities" than the new system would (100 million individuals filing tax returns annually, would be ended). This is a huge reduction in the opportunities for evasion, but of course new ones will crop up to replace them. Each system has its own unique problems in this regard, so again, the question is: which system would be more easily managed and controlled? Good question! </div></BLOCKQUOTE>

We have computers to handle the 100 million individuals filing tax returns. The IRS has greatly simplified its tax reporting procedures in the last 10 years.

But a new bureaucracy would replace the old one.

When I ask the question - "what about the elderly living off of savings and past investments" -- it's like, oh, you will get a rebate, or exemptions, that's a teensy problem that has to be worked out. Not so trivial considering that tens of millions who HAVE done just that would be affected by it if anyone ever took this plan seriously.

It's stimulating food for thought - but the more I hear, the less I like of it. Mr. Forbes came up here (well, New Hampshire, my backyard) looking to run for President but ended up looking like a fool. He was skewered by a bunch of junior high students who had done the arithmetic and learned that people making under 30k would pay a LOT MORE and those at the upper end of the scale would pay little or no income tax at all.

missouriboy

06-15-2005, 05:26 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
We have computers to handle the 100 million individuals filing tax returns. </div></BLOCKQUOTE>Computers are dumb machines that just verify the math across the multiple reporting lines. That doesn't detect whether the initial reported income numbers are in fact true (except where documents like W2s and 1099s exist). If you get a tip, or win a couple bucks playing poker, you're supposed to report it, but computers can't tell if you do. So, 100 million tax returns = 100 million opportunities for evasion.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">When I ask the question - "what about the elderly living off of savings and past investments" -- it's like, oh, you will get a rebate, or exemptions, that's a teensy problem that has to be worked out. Not so trivial considering that tens of millions who HAVE done just that would be affected by it if anyone ever took this plan seriously. </div></BLOCKQUOTE>I never said it was teensy or trivial; it's NOT.

I myself am not satisfied with what I've been able to learn about it. For example, I bought my house and made major improvements over the years, and it's all paid for with after tax dollars. So, if I sell that house I don't want any of the proceeds to be taxed again when I spend them. That's the way it would be in the current system, but I'm not sure about after the transition. Same goes for other already-taxed assets. The "Declaration" mechanism is there, but I don't know enough about it yet, and it bothers me.

However, I've stated in another thread last year that I'm still more or less in favor of the proposal even though I know it disadvantages me, because I think it would be better for the overall good of the country. For the reasons given in that long post in the center of Page 1; did you read that? What are your opinions about that, if I may ask, instead of skipping the broad basics and jumping to the problems in the details?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">It's stimulating food for thought - ... </div></BLOCKQUOTE>Well, yes, I'm glad to hear that. Yep, thinking is good... http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif

usuallylurk

06-15-2005, 08:36 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
The "Declaration" mechanism is there, but I don't know enough about it yet, and it bothers me.

</div></BLOCKQUOTE>

Every time a new plan comes up that might help one group of people and harm another group, you can easily note a couple of things. I was a poly sci major - this is part of public opinion and effective propaganda.

One thing is a possible misnomer = "Fair Tax". Implying that this will be fair to all. Another thing, they hide the flaws (of course you would do that, if you're selling Yugos, you talk "economical and good gas mileage" - and don't talk about durability or comfort).

The problem is, with any radical plan, the flaws are exposed. The uncertainties are revealed.

Even this plan's proponents don't know how the plan will work. Apparently there aren't even any talking points prepared for those.

Sometimes, if you approach a topic or proposal with an open mind, the more you hear, the less you like about it.

missouriboy

06-15-2005, 09:13 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">One thing is a possible misnomer = "Fair Tax". Implying that this will be fair to all. </div></BLOCKQUOTE>There probably never will be a tax system that's "fair" to all. The current one certainly isn't. I think they're calling it the FairTax because they're trying to make it more fair than the current mess, and more fair than all the other proposals out there. You've just exposed the unfairness of the old Forbes "Flat Tax," right? So it's really just a relative name.

Do you have a better idea? Or is this new idea worthy of trying to fine tune it and make it work?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Even this plan's proponents don't know how the plan will work. Apparently there aren't even any talking points prepared for those. </div></BLOCKQUOTE>Of course they know how it'll work! But the transitional double-tax problem isn't fully solved yet, in my opinion. I don't think it solves enough situations, and that's one reason why it's still in the court of public opinion and debate. Is that a reason to pooh-pooh the whole plan entirely?

Qikdraw

06-15-2005, 03:34 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
I think they're calling it the FairTax because they're trying to make it more fair than the current mess, and more fair than all the other proposals out there. </div></BLOCKQUOTE>

Actually I think they call it a "Fair Tax" just like they call it "Healthy Forests", "Clear Skies", "Death Tax", or "Patriot Act", etc...

Its all in marketing, and little to actually do with what it does, or does not do.

Qikdraw

missouriboy

06-16-2005, 05:04 AM

Back to this one again..........
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
What I've learned so far is that there will be a Declaration form to fill out for this transition, which claims all current assets that have already been taxed, and there will be some form of exemption for this amount. I don't know how it will work, perhaps a prepayment of the tax on that amount... </div></BLOCKQUOTE>OK, so you get to shield anything you buy with old savings, investments, or proceeds from previous possessions from the new tax. So if you have plenty of assets already, all you have to do is buy everything with your "old" money taxfree, and replace your investments with your "new" money (remember, investments are now tax free). Wow. </div></BLOCKQUOTE>So far, I've only studied the proposal details that would apply to me. Perhaps others can think of situations I haven't thought about, but here's my situation:

My major assets are an IRA and my (paid for) residence, plus a small (after tax) mutual fund account.

The IRA is fully taxable upon withdrawal, in both the old and new systems. No quibble there.

For the mutual fund, I'd bet I'll only be able to declare my cost, not the current value. Any gain would then be taxed when spent. Not a Wow.

If I sell the house and shield the proceeds, I then have to aquire a new house. If I do that with new money, the purchase is taxable, so that's not a Wow. If I rent with new money, the rent is taxable; again, no Wow. But what if I buy a non-new, non-taxable house with new money? Yup, that appears to be a Wow as Mark said. However, I think the market will quickly re-value such assets based on their now-increased replacement cost, but that doesn't mean the government will get any of the new, higher value. But if such a house is in fact higher now, there'd be no incentive to do this just for tax purposes, would there?

Yes, major changes to existing procedures are always rife with sticky problems. Anybody know of other such situations?

usuallylurk

06-16-2005, 07:42 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Back to this one again..........
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
What I've learned so far is that there will be a Declaration form to fill out for this transition, which claims all current assets that have already been taxed, and there will be some form of exemption for this amount. I don't know how it will work, perhaps a prepayment of the tax on that amount... </div></BLOCKQUOTE>OK, so you get to shield anything you buy with old savings, investments, or proceeds from previous possessions from the new tax. So if you have plenty of assets already, all you have to do is buy everything with your "old" money taxfree, and replace your investments with your "new" money (remember, investments are now tax free). Wow. </div></BLOCKQUOTE>So far, I've only studied the proposal details that would apply to me. Perhaps others can think of situations I haven't thought about, but here's my situation:

My major assets are an IRA and my (paid for) residence, plus a small (after tax) mutual fund account.

The IRA is fully taxable upon withdrawal, in both the old and new systems. No quibble there.

For the mutual fund, I'd bet I'll only be able to declare my cost, not the current value. Any gain would then be taxed when spent. Not a Wow.

If I sell the house and shield the proceeds, I then have to aquire a new house. If I do that with new money, the purchase is taxable, so that's not a Wow. If I rent with new money, the rent is taxable; again, no Wow. But what if I buy a non-new, non-taxable house with new money? Yup, that appears to be a Wow as Mark said. However, I think the market will quickly re-value such assets based on their now-increased replacement cost, but that doesn't mean the government will get any of the new, higher value. But if such a house is in fact higher now, there'd be no incentive to do this just for tax purposes, would there?

Yes, major changes to existing procedures are always rife with sticky problems. Anybody know of other such situations? </div></BLOCKQUOTE>

Currently your IRA may or may NOT be taxable.

If you have a traditional IRA, and only made tax-deductable contributions, yes, it will all be taxable when you withdraw it.

If you have a traditional IRA and made non-deductable contributions - and filed an 8606 statement (and retained a copy) stating how much of the basis contributed was taxed, that portion can be deducted from taxable amount when you withdraw it.

If you have a Roth IRA (recommended way to go today for most people investing for retirement) the contribution is never non-taxable, but it's ALL non-taxable at withdrawal time.

As far as mutual funds go, your basis (your investment- the money you put in ) has already been taxed and is non-taxable. Short term capital gains - often listed as dividends, that were taxed through the years but may have been re-invested - are also non-taxable -- those become part of your basis because you should have received a 1099-D every year and declared it on your 1040.

Time to brush up on your financials!

missouriboy

06-17-2005, 03:05 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
Time to brush up on your financials! </div></BLOCKQUOTE>Excuse me? Who would know my financial status better than I?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Currently your IRA may or may NOT be taxable. </div></BLOCKQUOTE>Not true. MY IRA is just ONE IRA, and it's either taxable or not taxable. I've already stated which one it is.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">..snip..
If you...made non-deductable contributions - and filed an 8606 statement (and retained a copy) stating how much of the basis contributed was taxed, that portion can be deducted from taxable amount when you withdraw it. </div></BLOCKQUOTE>I know. I once accidentally over-contributed, and now I'm saddled with that pesky Form 8606 every year for the rest of my life.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">As far as mutual funds go, your basis...has already been taxed and is non-taxable. </div></BLOCKQUOTE>I know that! That's what I meant when I said "For the mutual fund, I'd bet I'll only be able to declare my cost, not the current value. Any gain would then be taxed when spent. Not a Wow."<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Time to brush up on your financials! </div></BLOCKQUOTE>The subject was how the Declaration process will work during the transition to the new taxation method, not the boring details of MY financials.

BTW, you could brush up on your posting technique... people don't need to re-read my whole post verbatim every time you add a comment directly beneath it. http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif

Oh, and the question was: "Anybody know of other such situations?"

usuallylurk

06-17-2005, 07:55 AM

When I said "your financials" I did not mean your personal financial status, but financial terms.

1) You won't have to file the 8606 every year unless you keep making post-tax contributions. That's what the IRS told me. If you are making post-tax contributions to a traditional IRA, you may want to consider opening a **ROTH** IRA. Read on.

2) I crossed the tax-deferrable limit some time ago, but we converted one of our traditional IRAs and rolled the money into a Roth IRA. As you roll it over, you have to pay tax on it. Since I have to pay tax on the money I contribute anyway -- I don't have to pay it on withdrawal from the Roth.

As I said, anything put into a Roth IRA, are post-tax dollars. No write-off. But when you withdraw that money - it is NOT taxed like the "traditional IRA". That's one of the examples I gave, and since millions of Americans have Roth IRAs now, they will get SCREWED under this plan.

3) A "Gain" on a mutual fund is not necessarily (re)taxable. If you had short-term capital gains and paid the tax on them already, those specific gains are calculated as part of the basis.

3) When you asked for other examples - how about individual stocks where the dividends were reinvested through the years? You would have paid tax on those dividends for the years they were paid out and rolled back in. Now I cash in, and I get taxed AGAIN when I SPEND the money? Uh, that's not too "Fair" of a tax now, is it?

4) Many Americans are encouraged to build or buy homes. Home ownership is a critical part of the American lifestyle and investment cycle. There are capital gains exceptions for sale of a house. Many use that as part of their retirement base. For instance, I sell my house in Massachusetts and get $450,000. I move to Florida and scale down - buying a house for $200,000. Now should I be taxed as I live off of the extra $250,000?

The entire scheme is much more complicated than a "Fair Tax", as far as I can see.

But this discussion is interesting because we are probing - and some details "need to be worked out".

missouriboy

06-20-2005, 04:42 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:

1) You won't have to file the 8606 every year unless you keep making post-tax contributions. That's what the IRS told me. </div></BLOCKQUOTE>Well, they told you wrong. It's been well-known that the IRS help-lines give the wrong answer most of the time. Because even the people who work there cannot always decipher the ungodly complex Internal Revenue Code correctly.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
2)..snip.. since millions of Americans have Roth IRAs now, they will get SCREWED under this plan. </div></BLOCKQUOTE>There you go, always assuming you already have the (always negative) answer to what should be a question!

The general purpose of the "transitional Declaration form" is to prevent double taxation -- er, I mean SCREWING http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif . Therefore ALL legitimate already-taxed assets would be eligible to declare. Why do you assume Roth IRAs wouldn't be eligible for this shielding?

Now, isn't it true that IRAs of ALL types are just one more complex record-keeping mess created in reaction to the messy IRS system we have today? They would become obsolete and useless under the new system, where all savings would be "pre-tax." No more years and years of record-keeping dictated by the government. You would only keep records to serve your own family purposes, if desired, not as a perjury-penalty hazard of living under hobnail boots.

So the purpose of the Declaration is to terminate them (the IRAs), and compensate the owner for the consumption tax that will be charged later upon spending the proceeds.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
3)(both of them http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif ) When you asked for other examples - how about individual stocks where the dividends were reinvested through the years? You would have paid tax on those dividends for the years they were paid out and rolled back in. Now I cash in, and I get taxed AGAIN when I SPEND the money? Uh, that's not too "Fair" of a tax now, is it? </div></BLOCKQUOTE>Individual stocks are no different from a mutual fund of stocks. We've already determined that your "basis" is declarable. How that basis got created is irrelevant, though it is up to you to keep track of it. Remember, under the new system, you won't have to keep track of it for tax purposes anymore. Won't that be great? http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">4) Many Americans are encouraged to build or buy homes. Home ownership is a critical part of the American lifestyle and investment cycle. There are capital gains exceptions for sale of a house. Many use that as part of their retirement base. For instance, I sell my house in Massachusetts and get $450,000. I move to Florida and scale down - buying a house for $200,000. Now should I be taxed as I live off of the extra $250,000? </div></BLOCKQUOTE>Yes, I broached that when I wrote: "I bought my house and made major improvements over the years, and it's all paid for with after tax dollars. So, if I sell that house I don't want any of the proceeds to be taxed again when I spend them. That's the way it would be in the current system, but I'm not sure about after the transition. Same goes for other already-taxed assets. The "Declaration" mechanism is there, but I don't know enough about it yet, and it bothers me."
So, that's nothing new. What we gotta do is learn how it's going to work.

usuallylurk

06-20-2005, 04:07 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:

1) You won't have to file the 8606 every year unless you keep making post-tax contributions. That's what the IRS told me. </div></BLOCKQUOTE>Well, they told you wrong. It's been well-known that the IRS help-lines give the wrong answer most of the time. Because even the people who work there cannot always decipher the ungodly complex Internal Revenue Code correctly.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">

This was not from a help line. This was from the IRS, also backed by a CPA.

2)..snip.. since millions of Americans have Roth IRAs now, they will get SCREWED under this plan. </div></BLOCKQUOTE>There you go, always assuming you already have the (always negative) answer to what should be a question!

So, that's nothing new. What we gotta do is learn how it's going to work. </div></BLOCKQUOTE>

The reason I'm asking these questions is everytime I ask one - "we have to learn how it's going to work."

Record-keeping will be essential no matter what system comes into play. You think that with this system, there will be no more audits, 1040-type documents, filings, need for accountants ????

What will happen to the home interest deduction? Does anyone know?

missouriboy

06-21-2005, 06:37 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Record-keeping will be essential no matter what system comes into play. You think that with this system, there will be no more audits, 1040-type documents, filings, need for accountants ???? </div></BLOCKQUOTE>Those 100 million individual income tax payers of today will need to keep no records to satisfy the government; only whatever records they wish to keep for themselves. Auditing will involve only two main entities: retailers who must collect the tax, and producers who claim exemption from the tax. The reduction in required bureaucracy would be huge.

Employers must still keep earnings records on their employees, and report them quarterly to the SSA, just as they do today, except they'll no longer have to send money with the reports. The reports will be used to determine Social Security eligibility and benefit level just like today, but the funding for it will come from the consumption tax instead of payroll deductions.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">What will happen to the home interest deduction? Does anyone know? </div></BLOCKQUOTE>Yes, I know. http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif This is one where you have to really think about it.

Where is the "interest deduction" today? On some individual income tax reporting form, right? What will happen to those forms, and their function? Gone! Completely gone. So everything on those forms, including the deduction for interest, is gone too. The question becomes: What would you deduct the interest expense from? You have all your paycheck, with which to pay the interest. And the interest itself is not taxed when you pay it, because it's not considered consumption. Borrowing money will no longer involve taxation, so again, what would you deduct it from? You can't deduct it from nothing, right? http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif

missouriboy

06-21-2005, 07:30 AM

(About that Form 8606 for exempting already-taxed IRA contributions...)<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">This was not from a help line. This was from the IRS, also backed by a CPA. </div></BLOCKQUOTE>When you examine the line-by-line instructions on Form 8606, you find that you can only deduct a percentage of the excess contributions. That percentage is equal to the percentage of your total IRA that you took out that year: distribution / total value = .xxx percent (less than 1.000). The remaining excess contribution amount then becomes the basis amount with which to do the same thing next year. And the next, until you have finally "distributed" all the taxable assets; that's when you will have also deducted all the non-taxable portion. Maybe your informants meant, "Yes, you can deduct it all IF you also take ALL the taxable assets at the same time." This would be true.

missouriboy

07-18-2005, 09:18 AM

Click here (http://www.theweekly.com/news/2005/June/08/tax_reform.html) for a good read from a Georgia publication.

missouriboy

08-05-2005, 04:25 AM

There is now a book available from Harper Collins called The FairTax Book. Click here (http://www.harpercollins.com/global_scripts/product_catalog/book_xml.asp?isbn=0060875410&tc=bd) for a description, and a chapter excerpt describing the history of the income tax.

missouriboy

11-10-2005, 02:04 AM

Well, the Presidential Panel has made its recommendations for tax reform, and they are more of the same old useless claptrap, as usual. Some pundit called it "Tax Increases Disguised as Tax Reform." The Panel, being comprised of government people, obviously paid the most attention to other government people, who obviously want to keep the status quo, therefore the panel kept the status quo. Big surprise, right?

Many, many editorials are excoriating the Panel for being too timid, and for failing to recommend anything at all like a real reform, which is what the president requested. A long list of them can be found here. (http://www.fairtaxvolunteer.org/news/)

But first, I invite you to read this Progressive Democrat's opinion of the FairTax. (http://www.runningincircles.com/archive/2005/05/06/the_progressive_democrats_sale#tim-0510071703)

NudeTopher

11-10-2005, 03:12 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Well, the Presidential Panel has made its recommendations for tax reform, and they are more of the same old useless claptrap, as usual. </div></BLOCKQUOTE>

Actually, there are quite a few changes that have been proposed by the panel.

1. In many states the price of residential real estate is astromical; CA, CT, MA, NY, NJ, MD are a few states that immediately come to mind. For example, in my county (Suffolk Co., NY) virtually every new development has prices starting between $600,000 - $900,000. These are not for the rich - these are just average houses. Houses that once cost $500,000 now sell for $1,500,000 or more. In NYC studio apartments now cost in excess of $1,000,000. The prices for similar houses are even higher in Southern California.

It doesn't take a degree in advanced math to figure out that the interest on the mortgages are obscene. On reason that people can afford to live in these houses is because the interest on the mortgages have been tax deductible. Under the Bush plan this interest will no longer be deductible. If this ever happens the state economies will collapese due to the high number of forclosures.

2. Some states have residents that demand many goods and services from the state govt's. Those of us that live in states with excellent (public) educational systems have high real estate taxes to pay for them. Very high state income taxes are necessary in order to fund the goods and services that we demand from our states. So, in addition to paying high state taxes many of the houses have MONTHLY real estate taxes in the $1,000-2,000/month range. Up until now, these state/local taxes have been deductible from Federal Income Taxes. Under the Bush plan state/local taxes would no longer be deductible. Where would this have the most effect? Yup...back in CA, CT, MA, NY, NY, & MD.

Do you see a pattern here? The Bush plan is a direct taxation attack on those "blue states" that did not support him!

missouriboy

11-11-2005, 04:42 AM

Now, after reading all the items at my LINK of yesterday, I learned a couple things I never knew before. The biggest one is about mortgage interest, which I had written about before, to wit...<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">What will happen to the home interest deduction? Does anyone know? </div></BLOCKQUOTE>Yes, I know. http://clothesfreeforums.com/groupee_common/emoticons/icon_smile.gif This is one where you have to really think about it.

Where is the "interest deduction" today? On some individual income tax reporting form, right? What will happen to those forms, and their function? Gone! Completely gone. So everything on those forms, including the deduction for interest, is gone too. The question becomes: What would you deduct the interest expense from? You have all your paycheck, with which to pay the interest. And the interest itself is not taxed when you pay it, because it's not considered consumption. Borrowing money will no longer involve taxation, so again, what would you deduct it from? You can't deduct it from nothing, right? http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif </div></BLOCKQUOTE>So, it's true that all interest payments, not just mortgage interest, would be tax-free under the FairTax. Now, here is the kicker I discovered: after transition to the FairTax (unless it's addressed already in H.R. 25 someplace that I haven't seen) even the mortgage principle payments will be tax-free!! And not just home-mortgages either, but all existing time-payment contracts.

How so? Remember, all your income is tax-free, and only new purchases will get taxed. You already bought your home (or car, plane, boat, whatever) without the new consumption tax. You were going to make the payments with after-tax dollars, but after the transition to the FairTax you would make those payments with before-tax dollars.

Now, how could anybody with a large outstanding mortgage or other loan NOT be in favor of the FairTax?

missouriboy

11-11-2005, 04:53 AM

The other thing I saw was a thought-provoking response to the persistent objection that "The FairTax isn't perfect, it has (this, that, or the other) flaws!" or "It doesn't go far enough. What about the gasoline tax, property tax, tobacco tax, etc., etc., etc.?"

She (I think it was a she) responded with something like, "Of course it's not perfect; no tax system ever is. Is that a good reason to stay with a system that's known to be 99% wrong? Just because the new system is not 100% perfect?"

Naturist Mark

11-11-2005, 05:14 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Is that a good reason to stay with a system that's known to be 99% wrong? Just because the new system is not 100% perfect?" </div></BLOCKQUOTE>

Ahhh, but what if the question is Should we replace a system that is 98% wrong with one that is 99% wrong?

missouriboy

11-12-2005, 02:14 AM

Now Mark, you took the lady's 99% and changed it to 98%. Isn't that known as building a "strawman" so you can refute it? http://clothesfreeforums.com/groupee_common/emoticons/icon_wink.gif

But seriously, let's go back to my long post in the middle of page 1. Then, consider the current discussion about allowing the CIA to torture people, and your own very important contributions to that discussion. It's about government control of our lives versus the freedom of the people. I believe the Income Tax and the IRS is just as wrong as the Patriot Act in this regard. Each one is part of a larger 100 year trend to use government to usurp the freedom we established with our unique constitution. Indeed, to actually scrap that very constitution itself.

Now, I agree with those who say our government will never allow passage of the FairTax, because such would be anathema to the goals described in the preceding paragraph. If any kind of re-establishment of freedom is to be accomplished, it must be done by We the People because those in government will never act to reduce their own power. One of the ways to get started would be for the People to clamor for and force the abolition of the tyrannical Income Tax and IRS, and replace it with something that gets those hobnail boots off our necks. It would be a small start in turning the tide against the creeping growth of overwhelming government in this country.

Which way do you feel is the right way for the People to go?

missouriboy

11-19-2005, 06:48 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
But seriously, let's go back to my long post in the middle of page 1. Then, consider the current discussion about allowing the CIA to torture people... </div></BLOCKQUOTE>Sigh... one whole week, and no one seems to be interested in the BIG picture. Except maybe nacktman, who writes in that other topic... <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">This reflects the sorry state we have allowed our country to fall into and points to the need to take it back into our hands as it was established to be. Forget the labels of right/left, liberal/conservative its time to be real Americans again and use our brains and think for ourselves. Otherwise, prepare yourselves for the Jack Booted Goose Stepping Ideologues marching over you, Sieg Heil... </div></BLOCKQUOTE>Thanks, nacktman. I agree with you on that!

missouriboy

04-20-2006, 11:33 AM

Filing taxes a March madness for many

By Jack Markowitz
FOR THE TRIBUNE-REVIEW
Sunday, March 26, 2006

It's all over for me. Another income-tax season has come and gone. All that's left is warm memories and scraps of crumpled scratchpad.

Oh sure, for millions the season goes on. The lucky ones. They'll be playing right up to the April 17 deadline. They'll get that last Sunday in -- thanks to a quirk in the calendar. The usual season ends April 15. And then what do lovers of the game have to look forward to? Nothing, for months on end.

Of course, this is speaking for a small-market team. Not much income, no fancy shelters or razzle-dazzles. Just your basic, grind it out, block and tackle Form 1040 filing.

Yes, there were heart-stopping moments. Who could forget sitting up electrified when the accountant called? "Just a few questions," he said, but admit it, you couldn't breathe until he was off the phone.

Back in the pre-season of late 2005, there was a threat that the game might be altered beyond recognition.

The president named a Tax Advisory Panel. Its mission was to reform and simplify the tax code's 60,400 pages. Close call, but the Panel solved the problem as usual -- by adding pages.

People who lack appreciation of the game's finer points thought the Panel might recommend a "flat tax" simple enough to file on a postcard. Or a "FairTax" that could be paid at retail counters and cut out the Internal Revenue Service altogether.

The president never meant anything like that, though, and it won't happen on his watch. Millions would be for it, but powerful interests are against it -- lawyers, accountants, the unions, the professors and the politicians -- so it's no contest.

A good thing, too. Because there'd be unintended consequences, including cultural damage.

Some of the finest prose being written today would go out the window, like this sentence quoted word for word from Page D-1 of the IRS instruction booklet:

"If there is an amount in box 2b, include that amount on line 11 of the Unrecaptured Section 1250 Gain Worksheet on page D-8 if you complete line 19 of Schedule D."

Everyone has a favorite passage like that. But many enjoy the game's most dangerous moments, too, as when the IRS gets really menacing.

Congress passed a Paperwork Reduction Act sometime back, and "you are required to give us the information," Page C-7 sternly demands -- but only if your tax form has a government "control number" on it. In that case, your added paperwork won't be much -- an estimated three hours -- and in the best of causes: to help your government reduce paperwork.

It's always sad when a personal tax season is over. The form is all done, signed, ready to go into the mail.

Still, here's a piece of advice. Don't mail it yet. Not until the last day or so.

Apart from strategy reasons, this will stretch the season to its final pleasurable moments. It would be a long shot to draw a "wild card" -- an IRS audit -- but early finishers ought to always keep in mind the grand old consolation: "Wait till next year!"

++++++++++++
Retired business editor Jack Markowitz writes Sundays and Wednesdays. E-mail him at jmarkowitz@tribweb.com.

Naturist Mark

05-21-2006, 10:29 AM

Congress just passed another Bush tax cut - $69 Billion in cuts for wealthy investors, but one group of investors saw their tax bite tripled under the bill.

Teens (http://www.nytimes.com/2006/05/21/washington/21tax.html?_r=2&oref=slogin&oref=login) saving for college.

Yep.

I guess those teens just aren't spending enough on campaign contributions. <UL TYPE=SQUARE> <LI> The $69 billion tax cut bill that President Bush signed this week tripled tax rates for teenagers with college savings funds, despite Mr. Bush's 1999 pledge to veto any tax increase.

Under the new law, teenagers age 14 to 17 with investment income will now be taxed at the same rate as their parents, not at their own rates. Long-term capital gains and dividends that had been taxed at 5 percent will now be taxed at 15 percent. Interest that had been taxed at 10 percent will now be taxed at as much as 35 percent. [/list]

-Mark

usuallylurk

05-21-2006, 11:32 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
Filing taxes a March madness for many

</div></BLOCKQUOTE>

First of all, let me issue a disclaimer. I'm from Massachusetts, which is probably more of a socialist state than others across the country.

And, we have managed to go from being one of the higher tax states in the country to one of the lower ones. Neighboring - purportedly "tax free" New Hampshire nails its residents with the highest property tax burdens in the country and returns no services.

But I digress.

Would I make out big time on this misnomered "fair tax"? YOU BET I WOULD.

Any tax based on consumption burns the little guy. I did the arithmetic (as best I could with the spacey "fair tax" information) and a guy like me --

- empty nester
- reasonably good income
- no debts, no kids, no college loans
- invests over half of his income, lives relatively frugally

would pay considerably less in income tax than the guy who makes $50,000 a year and spends all of it supporting his family.

So, what's FAIR about that?

Steve "one trick pony/flat tax" Forbes ran on the "flat tax" platform - which would have cost Americans making below $50,000 a higher tax bill, and also would prevent young people from buying their first home.

"Wha... -- buying their first home? How's that?"

Oh, you didn't notice that the home mortgage interest deduction would go bye-bye under these plans?

Whither Social Security? "Oh yeah, it needs reform-- oh and it's in trouble, blah blah blah, and **I** should have the option..."

Sorry folks. Social Security is the LAST safety net. If you have a job, there already ARE options of choice --

- traditional IRAs
- Roth IRAs
- Keogh Plans (for the self-employed)
- 401K plans (if you work for someone else0

... THESE are the tax-benefit options. Already in place. And if you "enron" yourself out with these plans, Social Security is the last defense. If you mis-invested Social Security, we all STILL have to pick it up in the tax burden becaue you will be on welfare in your old age.

I don't like to give much financial advice to people, but to those who say "I can't afford IRA contributions" or "I can't afford to take part in my company's 401K" -- I've got a piece of advice.

YOU CAN'T AFFORD NOT TO TAKE PART IN THEM.

And those of you who voted Republican -- don't cry. You got what you asked for. The current administration may have lied about a lot of things, including Iraq's purported WMDs -- but they were upfront about tax cuts for the wealthy. Thankfully, attempts to turn over the Social Security system to Wall Street were rejected by a public outcry.

missouriboy

05-22-2006, 06:36 AM

Gosh, this thread lies dormant for a month and then gets some new postings bashing Bush and his (best Algore indignation here) "Tax Cuts For The Rich." I suppose that bodes in favor of the FairTax, right? Because under it, all such yearly-monthly-weekly fiddling with the tax code would disappear. If the tax rate were changed, it would be changed for everybody. NO MORE partisan favoritism for anybody.

So, how would those teens saving for college fare under the FairTax?

Their income is not taxed. Not even for FICA and Social Security.
The earnings on their savings, whether dividends or interest, are not taxed.
When the saved assets are spent for their education, they are not taxed.

Problem solved.

missouriboy

05-23-2006, 03:13 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">...a guy like me ... would pay considerably less in income tax than the guy who makes $50,000 a year... </div></BLOCKQUOTE>?? No, you wouldn't. BOTH of you would pay exactly the same in (federal) income tax: zero, zip, nada.

The rest of your post either ignores or revisits facts and details that have been fully set forth earlier in this thread. If you disagree with them, please quote them. Thanks. http://oakhurstonline.com/icon/happy.gif

missouriboy

06-13-2006, 01:27 AM

The truth about those "Tax Cuts For The Rich"...

Federal Income Tax paid by Percentage of individual taxpayers in 2003 -- as compiled from IRS data by the National Taxpayers Union Foundation:

Income Bloc...............Percent of Total Tax Paid

Top _1 percent.......................34+

Top 10 percent.......................66

Top 25 percent.......................84

Top 50 percent.......................96.5

Low 50 percent......................._3.5

The fact is, if you're going to cut Income Taxes, the only place you can cut them is where people actually pay them. If the top 50 percent of taxpayers are "rich," then so be it.

Naturist Mark

06-13-2006, 05:29 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The fact is, if you're going to cut Income Taxes, the only place you can cut them is where people actually pay them. If the top 50 percent of taxpayers are "rich," then so be it. </div></BLOCKQUOTE>

And yet Congress found it necessary to RAISE taxes on teenagers saving for college while it cut taxes for the very richest.

Priorities.

-Mark

missouriboy

06-14-2006, 05:30 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The $69 billion tax cut bill that President Bush signed this week tripled tax rates for teenagers with college savings funds, despite Mr. Bush's 1999 pledge to veto any tax increase.

Under the new law, teenagers age 14 to 17 with investment income will now be taxed at the same rate as their parents, not at their own rates. </div></BLOCKQUOTE>Does the bill increase tax rates for only those with college savings? Or does it apply equally to all savings, regardless of purpose? If the latter, then the lament in the first paragraph is just anti-Bush hyperbole. You could just as honestly say Congress raised taxes on kids saving for a new Corvette and that would be true too, but would also be just as irrelevant because it's an unintended consequence, not a specific target.

The second paragraph more honestly describes the intent of Congress, which is to tax a financial event, not the individual's future purpose of that event. I wonder why Mr. Johnston found it necessary to describe it two different ways? The first way was his personal opinion and feelings, and the second way was the intellectual honesty required of his position with NYT.

Not that I agree with what Congress is constantly doing to the Tax Code, mind you. It's all despicable; no one, business or individual, can make any useful long-term financial planning with the way things are done now. Switch to the FairTax, and end all that crappola! http://oakhurstonline.com/icon/happy.gif

jon71

06-14-2006, 08:09 PM

After Bush took office the I.R.S. was led by Bush appointees (Tres. sec. et al.) to greatly reduce the number of high income people they audit and investigate and to similarly increase the number of middle income people they audit. Since high income people have more money discrepancies are of greater benefit to the nations coffers. The catch is rich people are more likely to vote Republican and as a thank you for their votes the I.R.S. will "look the other way" if they don't want to pay all of their taxes. The rest of us will be expected to make up the difference. The right likes to complain whenever things like this is brought to their attention and yell "class warfare" when it is they who are engaging in class warfare.

Naturist Mark

06-14-2006, 08:21 PM

Jon,

Don't you know that it is engaging in class warfare to point out when the Republicans do things that help the priviledged and wealthy at the expense of the lower classes?

Don't you have any shame?

-Mark

usuallylurk

06-14-2006, 09:43 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by AlexisDanielle:
Hmmmm, tell that to those who work two and three minimum wage jobs just to survive. They cannot afford IRAs or 401ks. So, what is their alternative if not social security?

Allie </div></BLOCKQUOTE>

Thanks for supporting my hypothesis -- if you are that close to the belt, Social Security is the last safety net. It HAS to be maintained.

Exactly my point.

usuallylurk

06-14-2006, 09:52 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
[QUOTE]...a guy like me ... would pay considerably less in income tax than the guy who makes $50,000 a year... </div></BLOCKQUOTE>?? No, you wouldn't. BOTH of you would pay exactly the same in (federal) income tax: zero, zip, nada.

That's assuming you didn't butcher the key words out of my sentence - "and (the guy who makes $50K) spends all of it."

Now - straight question

- A guy who has kids and makes $50,000 and is forced to spend all of it to feed his family and keep them going versus

- A guy who makes $110,000, no debts, no mortgage, no loans, and only "consumes" $25,000 of it.

Who is going to pay more "Fair (consumption) Tax"?? Be honest now. I'd like to know.

jon71

06-14-2006, 10:43 PM

Sales taxes always hits poorer people harder. That's why rich people like it (easy on them) while poorer people like income tax (skewed towards the people who have money). At a minimum we should remove all tax from food and medicine, including non prescription. Tennessee considered that but the right wing got in a tizzy. People protest the proposed income tax and most of them would have pain LESS if it had come to be. It's sad how easily they were duped.

missouriboy

06-15-2006, 04:07 AM

Naturist Mark

06-15-2006, 04:47 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
But wait, there IS one change: poor working people will get their benefits without ever having any premiums deducted from their paychecks, like they do today. Their premiums will be picked up by (Gasp!) the "rich" people. Now, does that make it better, or worse, for the little guy? </div></BLOCKQUOTE>

That IS a point in favor of the so called FairTax, but as I pointed out ... gee, over a year ago? FairTax still represents a massive shift of tax burden from the wealthy to the middle class.

Still - I would accept it if it replaced ALL taxes rather than just Federal income and payroll taxes, and had a greater progressive effect.

Those just joining this discussion may want to go back to HERE (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/5390047943#5390047943) to see us debate some of the nitty gritty details and shortcomings of the FairTax scheme.

-Mark

missouriboy

06-15-2006, 04:59 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
- A guy who has kids and makes $50,000 and is forced to spend all of it to feed his family and keep them going versus

- A guy who makes $110,000, no debts, no mortgage, no loans, and only "consumes" $25,000 of it.

Who is going to pay more "Fair (consumption) Tax"?? Be honest now. I'd like to know. </div></BLOCKQUOTE>There's no way to know, since you are both free to choose how much you spend on new, taxable goods. Then too, you don't say how MANY kids the $50K guy has; the more kids, the larger the exemption provided by the tax prebate.

And what does "no debts, no mortgage, no loans" have to do with it? None of those transactions involve taxation under the FairTax, because they are not "consumption."

The FairTax doesn't "force" the $50K guy to do anything. But the present income tax systems forces him to pay Income Tax and Payroll Tax (Social Security & FICA on every dollar earned).

If your $25K "consumption" spending is believable, then it's also believable that the $50K guy might spend no more than $10-15K OVER AND ABOVE HIS FAMILY EXEMPTION AMOUNT on taxable "consumption" goods. So who would pay the most tax then?

But let's say the little guy does "choose" to spend more on taxable consumption than you do. What's wrong with that? The money you don't spend can only be savings, and that's the fuel that drives production, which creates the jobs for more of those little guys to earn more money, and improve their families' standard of living. The money in question IS going to be used in the economic engine, whether for government spending or for private sector transactions. And the question of which one of those does more to increase human benefit has long been established by historical experience.

missouriboy

06-15-2006, 06:20 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
FairTax still represents a massive shift of tax burden from the wealthy to the middle class. </div></BLOCKQUOTE>There will be a massive shift, all right, but why can't we quit letting Marxist dogma cloud our vision as to where that shift really is?

The massive shift is AWAY from taxing Production, which is positive for a country, and ONTO taxing Consumption instead, which is not so positive for the country.

That's the whole point of the proposal, to stop classifying PEOPLE and instead focus on ACTIVITY. And to ENCOURAGE the beneficial activity while DISCOURAGING the detrimental activity.

Now, if this inherently smart move causes another lesser "massive shift" in the status quo, maybe it's because there SHOULD be such a massive shift! Why should the most productive people be punished for being so productive? What's fair about that? If America is a whole new system, why is its tax system taken from Karl Marx, circa 1848?

(BTW, I've determined that I'd pay more under the FairTax than I pay now, but I believe the positive benefits for the country are bigger than my own concerns. So don't let it be said that I'm some "wealthy" guy trying to shift my obligations to someone else.)

Naturist Mark

06-15-2006, 05:06 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">There will be a massive shift, all right, but why can't we quit letting Marxist dogma cloud our vision as to where that shift really is? </div></BLOCKQUOTE>

Wanting a strong - and large - middle class is not Marxist. Indeed it is the opposite.

Tax policies that shrink the middle class, enlarge the ranks of low paid workers and benefits the very wealthy is just what Marxist ideology wants as a precursor to the 'dictatorship of the proletariat' (which in practice was just another dictatorship). It was the progressive movement (led by Republicans like T. Roosevelt) and the Unions that saved Captialism in America and made American Capitalism the strongest economic force in history.

The American middle class is endangered, under the present regime everone is losing ground except the top 5% (and it is really just the top 2% that account for nearly all of the growth in income). The deliberate policies that promote this increasing divide between the haves and the have nots is class warfare, and those policies are NOT in defense of capitalism, they are a return to feudalism.

Fairtax, as currently envisioned is just another way to exempt the elites from taxation at the expense of the middle class. Opposing that isn't Marxism - it is defending Capitalism.

The Death of Horatio Alger (http://www.thenation.com/doc/20040105/krugman)

For Richer (http://www.pkarchive.org/economy/ForRicher.html)

PAUL KRUGMAN: GRADUATES VERSUS OLIGARCHS (http://freedemocracy.blogspot.com/2006/02/paul-krugman-graduates-versus.html)

-Mark

usuallylurk

06-16-2006, 06:34 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
There's no way to know, since you are both free to choose how much you spend on new, taxable goods. Then too, you don't say how MANY kids the $50K guy has; the more kids, the larger the exemption provided by the tax prebate.
</div></BLOCKQUOTE>

So the "simple" Fair Tax still has a complex structure of deductions and exemptions and paperwork involved..... just like our good ol' 1040.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
And what does "no debts, no mortgage, no loans" have to do with it? None of those transactions involve taxation under the FairTax, because they are not "consumption."
</div></BLOCKQUOTE>

OK, I haven't reviewed that -- but it's my understanding that this is supposed to be SIMPLER than today's 1040. The more exempt vs. non-exempt spending, "that's not consumption but this IS" -- this seems to get more and more complicated, not simpler.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
The FairTax doesn't "force" the $50K guy to do anything. But the present income tax systems forces him to pay Income Tax and Payroll Tax (Social Security & FICA on every dollar earned).
</div></BLOCKQUOTE>

Social Security is a safety net which benefits us all. I believe that SS/FICA contributions should be increased for the wealthier ones on the scale -- the max limit should be higher than it is. As far as him being "forced" to do anything -- he IS forced to support and feed his family. So if he has one or two or three kids, he's "forced" to spend that money and he's forced into consumption.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
If your $25K "consumption" spending is believable, then it's also believable that the $50K guy might spend no more than $10-15K OVER AND ABOVE HIS FAMILY EXEMPTION AMOUNT on taxable "consumption" goods. So who would pay the most tax then?
</div></BLOCKQUOTE>

Trust me. There are people who make $100-120K a year - empty nesters, who have no financial obligations, who can live on $25-30K a year and after paying their taxes, save and invest the rest of it.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
But let's say the little guy does "choose" to spend more on taxable consumption than you do. What's wrong with that?
</div></BLOCKQUOTE>

A lot. He's paying to allow others to get rich on investments.

The false assumption is that all investment generates economic activity that helps us all. If some of my investment goes to fund a software mill in India or China, how does that help YOU?

missouriboy

06-17-2006, 05:42 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
There's no way to know, since you are both free to choose how much you spend on new, taxable goods. Then too, you don't say how MANY kids the $50K guy has; the more kids, the larger the exemption provided by the tax prebate.
</div></BLOCKQUOTE>

So the "simple" Fair Tax still has a complex structure of deductions and exemptions and paperwork involved..... just like our good ol' 1040. </div></BLOCKQUOTE>Well, here's an opportunity for you to contribute to that debate: Outline for us, please, that complex structure of paperwork that would be required for those 100+ million 1040 filers of today, to obtain their deductions and exemptions. Then we can all consider whether that's worse than, or not worse than, what's involved today. Good point!<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"><BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
And what does "no debts, no mortgage, no loans" have to do with it? None of those transactions involve taxation under the FairTax, because they are not "consumption."
</div></BLOCKQUOTE>

OK, I haven't reviewed that -- but it's my understanding that this is supposed to be SIMPLER than today's 1040. The more exempt vs. non-exempt spending, "that's not consumption but this IS" -- this seems to get more and more complicated, not simpler. </div></BLOCKQUOTE>If you haven't reviewed it... how can you know whether it's more complicated? Or less complicated?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"><BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
The FairTax doesn't "force" the $50K guy to do anything. But the present income tax systems forces him to pay Income Tax and Payroll Tax (Social Security & FICA on every dollar earned).
</div></BLOCKQUOTE>Social Security is a safety net which benefits us all. I believe that SS/FICA contributions should be increased for the wealthier ones on the scale -- the max limit should be higher than it is. </div></BLOCKQUOTE>Fine, but all that's under today's system. It's irrelevant in the FairTax system, except that those who consume more WILL pay more, in both SS/FICA contributions and general revenue, with NO upper limit.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">As far as him being "forced" to do anything -- he IS forced to support and feed his family. So if he has one or two or three kids, he's "forced" to spend that money and he's forced into consumption. </div></BLOCKQUOTE>OK, call it "forced" if you want to. Newborn babies are also "forced" to fill their lungs and begin breathing, if they want to survive. But in neither instance is this "force" affected by which method a nation chooses to transfer necessary revenue from the private to the public sector. NO connection whatsoever.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"><BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">If your $25K "consumption" spending is believable, then it's also believable that the $50K guy might spend no more than $10-15K OVER AND ABOVE HIS FAMILY EXEMPTION AMOUNT on taxable "consumption" goods. So who would pay the most tax then?
</div></BLOCKQUOTE>Trust me. There are people who make $100-120K a year - empty nesters, who have no financial obligations, who can live on $25-30K a year and after paying their taxes, save and invest the rest of it. </div></BLOCKQUOTE>Trust...??? Did you think I didn't believe you? What I meant was for you to believe that a guy making $50K can do likewise and spend less than his full income on "taxable" goods, just like you can. So each income level is free to choose how opulently or frugally they want to live, in relation to their own income.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"><BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">But let's say the little guy does "choose" to spend more on taxable consumption than you do. What's wrong with that?
</div></BLOCKQUOTE>A lot. He's paying to allow others to get rich on investments. </div></BLOCKQUOTE>...Paying to "allow" others...??? That's really bizarre thinking, akin to wailing about "tax cuts for the people who pay taxes" (the RICH) instead of "tax cuts for people who don't even pay taxes" (the POOR). Everyone is as free to get rich on investments as everyone else, it's mostly a matter of luck. The tax system should fund the necessary functions of the government, not micromanage every aspect of individual life.<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The false assumption is that all investment generates economic activity that helps us all. If some of my investment goes to fund a software mill in India or China, how does that help YOU? </div></BLOCKQUOTE>The other false assumption is that all tax revenue generates economic benefit that helps us all. If some of my tax payment goes to fund a bridge to nowhere in Alaska, how does that benefit ME? We could play this game all day, but what's the point? That stuff is irrelevant to the method of taxation.

usuallylurk

06-17-2006, 06:39 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">What I meant was for you to believe that a guy making $50K can do likewise and spend less than his full income on "taxable" goods, just like you can. </div></BLOCKQUOTE>

NO HE CANNOT. He has to feed, clothe, transport, and shelter that family of four.

The only way he can "choose" not to spend more is to move to a cabin in the woods and live off of the land.

But my point is, if there is a consumption-based tax -- which is also called a "progressive tax" -- he should not pay more "fair tax" than I pay. That's my point.

When challenged on this, all that comes back is "oh he doesn't have to choose to spend his income."

Living next to New Hampshire, where the Presidential race begins every four years, we saw Steve Forbes collapse touting his crazy "flat tax" scheme. He used the tactic of "razzle dazzle" -- asking a 16-year old "how would YOU like to have a million dollars to retire on?" knowing full well that that person (now around 23) won't possibly be able to survive with that when he's 65 (year 2048, $1 million will be nothing).

And in this day and age, where many "baby boomers" are on their final, and highest earning curves awaiting retirement, as I am -- it looks like a huge tax break for that class of people. Yes -- I'd benefit. GREATLY.

It took me a grand total of 2.5 hours to do my taxes. No, it isn't complicated at all. The old 1040, schedules A, B, and D as well. And Massachusetts state income tax. I could have cut that down to an hour if I used the $15 software I bought.

But my daughter, and her children, would struggle because they will "choose" (yeah right) to subsidize me. They buy a car, or clothing, and they will pay.

Yes, you cited the "bridge to nowhere in Alaska". That's an abuse of money, to be sure. There is and always will be some waste, and you will always be able to find an "Alaskan bridge" abuse someplace.

But that doesn't justify overhauling the tax system, pushing the burden of taxation onto those who "choose" (read = MUST) spend their entire income and are living hand-to-mouth.

This country emerged as a world power because it established a middle class. Western Europe is now more powerful economically, and overshadows the USA, because it, too, insisted on middle class development after WW2.

missouriboy

06-19-2006, 05:46 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
[QUOTE]What I meant was for you to believe that a guy making $50K can do likewise and spend less than his full income on "taxable" goods, just like you can. </div></BLOCKQUOTE>NO HE CANNOT. He has to feed, clothe, transport, and shelter that family of four.

The only way he can "choose" not to spend more is to move to a cabin in the woods and live off of the land.

When challenged on this, all that comes back is "oh he doesn't have to choose to spend his income." </div></BLOCKQUOTE>Please stop ignoring the rest of the statement, the key phrase of which is: "...on taxable goods." This is one of the parts that go a long way toward making the FairTax "fair." It's been discussed in some depth on prior pages of this thread, a good example of which is the discussion on Environmental Impact.

Naturist Mark

06-19-2006, 07:31 PM

Speaking of Razzle Dazzle. Flip back a few screens to see some of the nitty gritty details of the FairTax scheme not being addressed here: go back! (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/5390047943#5390047943)

-Mark

usuallylurk

06-19-2006, 11:09 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
Speaking of Razzle Dazzle. Flip back a few screens to see some of the nitty gritty details of the FairTax scheme not being addressed here: go back! (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/5390047943#5390047943)

-Mark </div></BLOCKQUOTE>

The two that weren't addressed --

1) Previously taxed savings -- particularly those of the large baby boomer segment - who are about to retire and have already paid taxes on that, will get whacked again on it when they spend it. Rebuttals to that include "well, um, there are some things, um, that will have to be worked out" and "oh, it wouldn't matter because the guy who formulated this plan (an Atlanta-based, or Florida-based, who knows, radio huckster named Boortz) thinks prices of everything will go down."

Uh-huh.

2) I said the guy making $50K and supporting a family of four will have to spend all of his income. OK, if he doesn't spend it on TAXABLE items, he'll pay less. But will he be able to do that?

Can anybody point me to a table or list of items that ARE and AREN'T taxable? How can I tell if this is "fair" if we can't see what is and what is not taxable?

And if the answer is "um, there are some things, um, that will have to be worked out" ... then I can tell you, the Fair Tax is misnomered.

missouriboy

06-20-2006, 05:24 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
Speaking of Razzle Dazzle. Flip back a few screens to see some of the nitty gritty details of the FairTax scheme not being addressed here: go back! (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/5390047943#5390047943)

-Mark </div></BLOCKQUOTE>Not being addressed here? Where? On this page? No, of course not, they were addressed back on Page 3 and thereabouts. Do they have to be repeated on Every Page?

I responded to much of that at the bottom of Page 3. To continue previous discussions, why not quote them and go from there?

From your recent link: <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the "eminence of excess," an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts. Still, even J.P. Morgan didn't have a Gulfstream. </div></BLOCKQUOTE>Under the FairTax, all of this "excess opulence" will be taxed to the purchaser, including the services of the architect, and the servants (unless you hire them as employees instead of contractors), and the yachts and the Gulfstream, etc., etc., ad infinitum. The "rich" will NOT get a (so-called) free ride!

Naturist Mark

06-20-2006, 05:38 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Do they have to be repeated on Every Page? </div></BLOCKQUOTE>

Sure, on page 7 when canards are reintroduced it is useful to refer back to page 3, 4 or 5 to see them examined.

Example "It's irrelevant in the FairTax system, except that those who consume more WILL pay more, in both SS/FICA contributions and general revenue, with NO upper limit." ignores the earlier analysis (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/5700081053#5700081053) which shows that those with the least income consume the most, and that the wealthy will have ample opportunity (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/9950058053#9950058053) to avoid consumption taxes.

-Mark

missouriboy

06-20-2006, 06:13 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by usuallylurk:
The two that weren't addressed --

1) Previously taxed savings -- particularly those of the large baby boomer segment - who are about to retire and have already paid taxes on that, will get whacked again on it when they spend it. </div></BLOCKQUOTE>This HAS been addressed! I responded in agreement with you, somewhat, at the bottom of Page 4. Have you forgotten?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Rebuttals to that include "well, um, there are some things, um, that will have to be worked out" and "oh, it wouldn't matter because the guy who formulated this plan (an Atlanta-based, or Florida-based, who knows, radio huckster named Boortz) thinks prices of everything will go down."

Uh-huh. </div></BLOCKQUOTE>Lurk, I cannot fathom why such a highly intelligent person as you must continually resort to such asinine strawman arguments like this. http://oakhurstonline.com/icon/sad3.gif First, no one person "formulated this plan." Especially not Boortz; he merely wrote a book about it after the fact.

Second, he isn't the one who states "prices will go down," instead he reports that fact in the book.

"Uh-huh?" So you don't believe they'll go down? Then why don't you do the intellectually honest thing and review the discussions about it (on Page 2 and thereabouts), quote any assertions you disagree with, then debate them with credible facts and logic to the contrary?<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">(2) I said the guy making $50K and supporting a family of four will have to spend all of his income. OK, if he doesn't spend it on TAXABLE items, he'll pay less. But will he be able to do that?

Can anybody point me to a table or list of items that ARE and AREN'T taxable? How can I tell if this is "fair" if we can't see what is and what is not taxable? </div></BLOCKQUOTE>The tax is charged one-time (the FIRST time only) on all NEW Consumer Goods and Services, at the point of retail sale. This means USED goods are not taxed again, the way they are under state sales taxes. Review my long, speculative post about the Environmental Impact in the middle of Page 3 to get an idea of the many implications of not taxing used goods. The upshot is that low-income people, indeed anyone who wants to, can reduce their taxes by consuming more used goods and less new goods.

Expenditures that are NOT taxed are those that are for things that are NOT consumption. Education, and I think books and supplies therefor, is one of the biggies. Investments. Interest payments of all kinds (this, too, has been discussed in depth on this thread). There may be a few others, but I can't recall them right now.

Entertainment tickets, for example, would be taxed. Anything you buy "new" from someone else, instead of producing it yourself. Haircuts from a barber? Gasoline? Yes, but think of it this way: before the change, didn't you buy these things with "already taxed" money?After the change, tax is collected when the money is spent instead of when earned... but not when spent for things other than "consumption."

I think medical service should not be taxed, but there are two arguments against that: it's now paid with after-tax dollars. And if not taxed, the rate for everything else would just have to be higher. I also don't know about Life Insurance premiums. Perhaps someone could find it at www.fairtax.org (http://www.fairtax.org) .

missouriboy

06-20-2006, 08:40 AM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Naturist Mark:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Do they have to be repeated on Every Page? </div></BLOCKQUOTE>

Sure, on page 7 when canards are reintroduced it is useful to refer back to page 3, 4 or 5 to see them examined.

Example "It's irrelevant in the FairTax system, except that those who consume more WILL pay more, in both SS/FICA contributions and general revenue, with NO upper limit." ignores the earlier analysis (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/5700081053#5700081053) which shows that those with the least income consume the most, and that the wealthy will have ample opportunity (http://clothesfreeforums.com/eve/forums/a/tpc/f/6500016152/m/5130053333/r/9950058053#9950058053) to avoid consumption taxes.

-Mark </div></BLOCKQUOTE>I reviewed your "analysis" again, and especially noted where you concluded that "the very wealthy would get yet another massive gift and the middle class would once again get the shaft." Massive gift? Shaft? Why the hyperbole? Since I see no credits for your analysis to indicate how valid it might be, I tend to give more credence to the 2-page .pdf synopsis of the same analysis at the FairTax website: Winners and Losers. (http://www.fairtax.org/pdfs/%20winners_and_losers.pdf) Notice how much they invested in that research, and the credentials of the economists to whom they paid the fees.

Then I also reviewed the post at your second link. I assume you intended for people to read my response to that post as well, a little further down.

Naturist Mark

06-20-2006, 05:22 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I tend to give more credence to the 2-page .pdf synopsis of the same analysis at the FairTax website: Winners and Losers. Notice how much they invested in that research, and the credentials of the economists to whom they paid the fees. </div></BLOCKQUOTE>

Here is a "progressivity" graph from the FairTax people:
http://releases.usnewswire.com/redir.asp?ReleaseID=34836&Link=http://www.fairtax.org/images/taxrates.jpg

I doubt the accuracy of the current tax effective tax rate line, but let's run with this anyway.

I find the analysis a bit suspect since they use a 'dynamic' methodology that assumes huge increases in economic activity, capital, and income over time. This is rather at odds with the known effect of increased consumption taxes LOWERING discretionary purchases, and it fails entirely to account for the 'dynamic' effect of reducing wages: <UL TYPE=SQUARE> <LI>Part of the problem is the way Boortz and Linder are using the idea of embedded taxes. In an eight-year-old study paid for by AFFT, Harvard economist Dale Jorgenson noted that because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped. The FairTax Book devotes an entire chapter to this idea.

What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.

Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out. [/list]

So let's adjust those progressivity promises in the 2-page .pdf synopsis to account for the dynamic 20% wage reduction. Of course, since wage income accounts for less and less of total income as you move up the economic ladder, the upper quintile would not see much reduction. The wage cuts would predominantly fall upon the poor and working classes - Perhaps the Prebate needs to be increased for them?
Now I don't believe the Fairtax "Effective Tax Rate" graph, but even if I accept it, and correct for only the 'dynamic' wage reduction effect, you can see the Fairtax tax burden shift to the working poor and middle class.

http://i75.photobucket.com/albums/i305/BlueHorde/FairTaxShift.gif
Money (http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/) magazine has more.

-Mark

usuallylurk

06-20-2006, 09:03 PM

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by missouriboy:
"formulated this plan." Especially not Boortz; he merely wrote a book about it after the fact.

Second, he isn't the one who states "prices will go down," instead he reports that fact in the book.

"Uh-huh?" So you don't believe they'll go down? Then why don't you do the intellectually honest thing and review the discussions about it (on Page 2 and thereabouts), quote any assertions you disagree with, then debate them with credible facts and logic to the contrary?
</div></BLOCKQUOTE>

OK, I will concede that I didn't spend extensive time study who wrote what. I do know that the radio huckster has written extensively about it.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">The tax is charged one-time (the FIRST time only) on all NEW Consumer Goods and Services, at the point of retail sale. This means USED goods are not taxed again, the way they are under state sales taxes. Review my long, speculative post about the Environmental Impact in the middle of Page 3 to get an idea of the many implications of not taxing used goods. The upshot is that low-income people, indeed anyone who wants to, can reduce their taxes by consuming more used goods and less new goods.
</div></BLOCKQUOTE>

Which will work "wonders" for the economy and slash production.

And you answered my question--

Unless he can feed his family previously used food, and restrict his kids' clothing to second-hand clothing, and restrict the fuel he puts in his car and uses to heat his home to used fuel, he's going to pay more.

Now - notice that I didn't mention a used car. That's because a great many people on the lower end of the economic scale are already driving used cars.

I guess if his stove blows out or his refrigerator dies, he can go out and find a used one and avoid the tax.

So he is being told -- cut back your standard of living, or face higher taxes.

Nice sell to a guy on the lower end of the scale.