hwt 0 #1 February 8, 2009 Our tax structure in America needs a total overhaul.Why? It is set up with loop holes and in a way that discourages investment. I think a consumption tax would be the fairest way.if everyone paid a 10% tax on every good purchased, and eliminated all other taxes we would avoid cheating With our ability to track virtually anything, this would be a simple way to eliminate fraud. This way the wealthy people of America will pay their fair share without discouraging others from getting rich.. Just a thought.. Quote Share this post Link to post Share on other sites Andrewwhyte 1 #2 February 8, 2009 The problem with that is that goods make up a decreasing portion of our economy. This is why Canada, Europe, Australia, New Zealand etc. went to Goods and Services Taxes. This better captures the concept of consumption you are describing. The problem with it is you have to capture the value added all along the way, this becomes a very expensive process as every business in the country is conscripted into the tax collector business. Although I agree with you that it is a good policy, it tends to be very unpopular. Canada brought it in in the 80s and the ruling Tories were reduced from 169/295 seats to 2/295. In 1993 the Australian Liberal-National (right of centre) coalition lost an "unloseable election" largely due to their unpopular proposal for a GST. I just cannot see any congress implementing it. Certainly this congress will not because it is flat; it taxes the rich at the same rate as the poor. Quote Share this post Link to post Share on other sites likearock 2 #3 February 8, 2009 Whether or not it's a good idea in theory, this is the worst possible time for a consumption tax. Nobody's buying anything and that's leading to more people getting laid off. The more people laid off the less people with disposable income who are able to consume. We need to encourage consumption, not discourage it. Quote Share this post Link to post Share on other sites nanook 1 #4 February 8, 2009 It is set up with loop holes and in a way that discourages investment. Why does it discourage investment? Why don't you use these "loopholes" yourself?_____________________________ "The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln Quote Share this post Link to post Share on other sites lawrocket 3 #5 February 8, 2009 Indeed. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites Ron 10 #6 February 8, 2009 Plus a major issue is how it hurts the poor more than the rich. Lets say you make 1 million a year and I make 10,000 a year. We both buy toilet paper. The X% tax on the goods is MUCH more a part of my income than yours. Some try to say that certain goods would be exempt (OK) or that lower incomes would be assisted with checks from the gov each mth. YIKES!!!! the largest entitlement system ever. The best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites DrewEckhardt 0 #7 February 8, 2009 QuotePlus a major issue is how it hurts the poor more than the rich. Lets say you make 1 million a year and I make 10,000 a year. We both buy toilet paper. The X% tax on the goods is MUCH more a part of my income than yours. Some try to say that certain goods would be exempt (OK) or that lower incomes would be assisted with checks from the gov each mth. YIKES!!!! the largest entitlement system ever. A poor person is going to get up to 4.5X the pay-out for each dollar they put into Social Security than a wealthy once the tax side effects are considered. A poor person's income taxes don't cover the government services they use. A higher tax rate on the poor is fair but arguably not just. Quote The best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. The fairest is capitation, a flat per-head tax. You want a interstate highway system? Divide the cost by 300M and multiply by the number of people in your family. Modifications so that people aren't taxed into starvation and have an incentive to work more (why work 80 hours a week for no additional gains when 10 run you up to the poverty limit tax free?) are needed to make it practical. The biggest problem with the out of control American government is that we're an indirect democracy where the 50% of the country paying only 5% of the income tax (the average tax rate in the bottom two quintiles is actually negative) get to decide how 95% of the money not coming out of their pockets gets spent. A flat percentage tax would make it better since the bottom quintiles would feel some pain but not eliminate the problem. Where you have a simple percentage, it's still in the lower earning peoples' best interest to vote for benefits they don't bear the full burden of. Most people would vote for food subsidies if it meant sashimi grade tuna steaks and Kobe for dinner when their share of the tab was just enough for Tilapia and ground chuck. Quote Share this post Link to post Share on other sites TankBuster 0 #8 February 9, 2009 Quote Our tax structure in America needs a total overhaul.Why? It is set up with loop holes and in a way that discourages investment. I think a consumption tax would be the fairest way.if everyone paid a 10% tax on every good purchased, and eliminated all other taxes we would avoid cheating With our ability to track virtually anything, this would be a simple way to eliminate fraud. This way the wealthy people of America will pay their fair share without discouraging others from getting rich.. Just a thought.. You are exactly right, and obviously very intelligent. I urge you to read about the "FairTax." www.fairtax.org The website is good, but the book is much better. It explains just how such a consumption tax would work and encourage investment in our economy. It also gives a good history of how the income tax came about. (It's a great example of how a temporary government program can never be temporary, it can only get larger.)The forecast is mostly sunny with occasional beer. Quote Share this post Link to post Share on other sites kelpdiver 2 #9 February 9, 2009 Quote I think a consumption tax would be the fairest way.if everyone paid a 10% tax on every good purchased, and eliminated all other taxes we would avoid cheating Given that Californians already pay 7-9% on all (non food) goods, plus state income taxes, plus all the federal taxes, I'm pretty sure that 10% figure is a fantasy that makes the consumption tax sound a lot better than it really would be. Any proposal that promises to shift the tax burden away from you and me is likely a load of crap. Unless the nature of our government and what we expect from it changes, the dollar total remains high. Quote Share this post Link to post Share on other sites quade 4 #10 February 9, 2009 Quote The fairest is capitation, a flat per-head tax. You want a interstate highway system? Divide the cost by 300M and multiply by the number of people in your family. That ought to cut down on the octuplets problem. Seriously, you can't tax per head, you can only do it by wage earner. Now, while I'll agree that all these "off the book" people are an extra burden to society that really ought to be paid for by the "parents" of them, currently we give the parents a tax break for having them. There is no way in hell you're going to reverse that and start taxing them for an equal share.quade - The World's Most Boring Skydiver Quote Share this post Link to post Share on other sites Andy9o8 2 #11 February 9, 2009 QuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. Quote Share this post Link to post Share on other sites Andy9o8 2 #12 February 9, 2009 Quote Quote The fairest is capitation, a flat per-head tax. You want a interstate highway system? Divide the cost by 300M and multiply by the number of people in your family. That ought to cut down on the octuplets problem. Seriously, you can't tax per head, you can only do it by wage earner. Now, while I'll agree that all these "off the book" people are an extra burden to society that really ought to be paid for by the "parents" of them, currently we give the parents a tax break for having them. There is no way in hell you're going to reverse that and start taxing them for an equal share. Lets assume Family X has 5 kids and pays for its own kids' s expenses. In a sense, that family already pays more tax than the family with 2 kids, for it already pays sales tax on all the goods it buys for each kid. And in states where tax is added on to utility bills, the same principle applies to consumption of resources provided by utilities, too. Quote Share this post Link to post Share on other sites mnealtx 0 #13 February 9, 2009 QuoteQuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. The "with an exemption for poverty level" part of his post would make your argument moot, would it not?Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites hwt 0 #14 February 9, 2009 The poor buy less and the rich buy way more,that is the fairness of this idea.Ask any poor person if he would like to contribute and most would reply yes. Exclude food that you purchase( like they already do). Why are there less incentives in our system now?. The very tax that bush lowered is one example. If that investment tax was dropped zero, What do you think it would do to stimulate our economy? Taxing the rich and supporting freeloaders on social programs,Simply penalize people who are successful and rewarding people for doing nothing.. You call that incentive?........Blue Skies! Quote Share this post Link to post Share on other sites shropshire 0 #15 February 9, 2009 um..... Have I missed something? Don't we already have 'consumption' tax, in the form of Purchase Tax (or VAT)? (.)Y(.) Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome Quote Share this post Link to post Share on other sites mnealtx 0 #16 February 9, 2009 Quoteum..... Have I missed something? Don't we already have 'consumption' tax, in the form of Purchase Tax (or VAT)? The US doesn't do VAT. The fair tax proposal basically replaces the various sales tax with a flat consumption tax on non-essential items with either a rebate or a prebate to adjust for economic level. In essence, people living at or below the poverty line wouldn't pay any tax at all.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites wmw999 2,587 #17 February 9, 2009 OK, let's say we need 1.1 trillion a year to run the government (yeah, not accurate, but such is life). Broken down by household (2000 had 105 million, so let's grow it a little) , that's roughly $10,000 each. Let's say that the consumption tax on subsistence-level taxable goods is $5000. a. That's 20% of the income of a household making $25000/year, above the poverty level for a family of less than 5. Pretty hefty chunk, huh? That's 2 % of the income of a household making $250,000/year. You can expect them to spend more than the very poor, but it's likely that the tax will end up being regressive: i.e. it will charge a larger percentage from the poor (on average) than from the rich. Yeah, sucks to be poor. Let's make it worse. The hole gets deeper. As long as it's not us. The tax system is fucked up. Making it easy for every single person in the US is not the answer. Yes, there are plenty of lazy people in the US. But, ya know, taking an action that's got a high likelihood of penalizing the poor (who want to ascend the ladder) over the rich (who are already at the top) won't help the concept of upward mobility. And upward mobility is what the US is made of. Everyone wants their kids to be able to do better. No one wants their kids to do worse. But someone has to be at the bottom, and for damn sure the rich will make sure it won't be their kids. Wendy W.There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites shropshire 0 #18 February 9, 2009 Cheers Mike. (.)Y(.) Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome Quote Share this post Link to post Share on other sites Capt.Slog 0 #19 February 9, 2009 QuoteThe poor buy less and the rich buy way more,that is the fairness of this idea.Ask any poor person if he would like to contribute and most would reply yes. Exclude food that you purchase( like they already do). Why are there less incentives in our system now?. The very tax that bush lowered is one example. If that investment tax was dropped zero, What do you think it would do to stimulate our economy? Taxing the rich and supporting freeloaders on social programs,Simply penalize people who are successful and rewarding people for doing nothing.. You call that incentive?........Blue Skies! How many people are "freeloaders" as opposed to people who want to work but can't for one reason or another (like over a million jobs lost in the last 2 months of Bush's presidency). How much taxpayer money goes to buy SUVs and plasma TVs for welfare queens? Didn't Gingrich's (R) congress eliminate "welfare as we know it"? Don't you think Gingrich(R) and E. Clay Shaw Jr (R)knew what they were doing when welfare was reformed? Quote Share this post Link to post Share on other sites mnealtx 0 #20 February 9, 2009 Quotebut it's likely that the tax will end up being regressive: i.e. it will charge a larger percentage from the poor (on average) than from the rich. When you look at the amount paid for SUBSISTENCE-LEVEL goods, you may be right. However, the 25k family would receive 'prebates' that cancel out the tax on subsistence-level goods. 2% of 250k > 0% of 25k.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites Andy9o8 2 #21 February 9, 2009 QuoteQuoteQuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. The "with an exemption for poverty level" part of his post would make your argument moot, would it not? No, it really doesn't (and it's the logic behind the graduated income tax rates that have been in effect for decades). A graduated tax rate schedule is intended to adjust for the varying "burden" of taxes on people of divergent gross income levels. A flat rate fails to take this into account. Let's take two 4-person families, each being taxed at a 25% flat rate. Family A has a gross income of $50K (which I think we can agree would currently be above the poverty level). Family B has a GI of $250K. After taxes, Family B still has $187,500 remaining to work with, while Family A only has $37,500 remaining to work with, thereby making the equivalent burden of a 25% flat tax rate more onerous on the lower earner than the higher earner. At least that's the idea. Quote Share this post Link to post Share on other sites wmw999 2,587 #22 February 9, 2009 So get rich. It's the only answer -- if we're all rich.Of course, as compared with a whole lot of people throughout the world, nearly everyone in the US is rich. Gotta remember that. Wendy W. There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites mnealtx 0 #23 February 9, 2009 QuoteQuoteQuoteQuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. The "with an exemption for poverty level" part of his post would make your argument moot, would it not? No, it really doesn't (and it's the logic behind the graduated income tax rates that have been in effect for decades). A graduated tax rate schedule is intended to adjust for the varying "burden" of taxes on people of divergent gross income levels. A flat rate fails to take this into account. Let's take two 4-person families, each being taxed at a 25% flat rate. Family A has a gross income of $50K (which I think we can agree would currently be above the poverty level). Family B has a GI of $250K. After taxes, Family B still has $187,500 remaining to work with, while Family A only has $37,500 remaining to work with, thereby making the equivalent burden of a 25% flat tax rate more onerous on the lower earner than the higher earner. At least that's the idea. More onerous? 25% is 25%. Each person still has 75% of what they've earned. Add in the poverty level exemption you're still ignoring and the tax rate for the 50k family becomes less than 25%. This is similar to the argument over the dividend tax and people saying it was unfair because Warren Buffett gets more of a break than Joe SixPack due to economy of scale, when each are paying the same rate.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites rehmwa 2 #24 February 9, 2009 QuoteMore onerous? 25% is 25%. Each person still has 75% of what they've earned. Add in the poverty level exemption you're still ignoring .... If you except (for everybody) $xxx of the top - then your 'flat rate' automatically becomes a progressive rate. The question is really two: 1 - what is the exemption amount (ie. how many people are we putting in the 0% tax bracket) 2 - what is the tax rate above the exemption? if you take both those numbers and JACK THEM UP HIGH - you can still satisfy a need to make half the people get off completely free and stick it to the rest ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites Andy9o8 2 #25 February 9, 2009 So you & I have basically summarized the debate that been going on for about the past 100 years between graduated taxation and flat taxation. In the US, the system (at least the federal system; each state has its own system) has virtually always been graduated tax rates; and the rationale I gave above is really just a repetition of the original legislative rationale. Most views of "fairness" tend to be strongly influenced by whose ox is getting gored. In this case (tax rates), it's really all about "net effect". Advocates of graduated tax rates argue that a graduated system best levels-out the net effect of tax rates between higher and lower gross income earners. Anyhow, we can all go round and round about this. The points are clearly made. Edit: I've been using the term "graduated rate"; but I think it's more commonly referred to in the US as a "progressive rate." I meant the same thing. Quote Share this post Link to post Share on other sites Prev 1 2 Next Page 1 of 2 Join the conversation You can post now and register later. If you have an account, sign in now to post with your account. Note: Your post will require moderator approval before it will be visible. Reply to this topic... × Pasted as rich text. Paste as plain text instead Only 75 emoji are allowed. × Your link has been automatically embedded. Display as a link instead × Your previous content has been restored. Clear editor × You cannot paste images directly. Upload or insert images from URL. Insert image from URL × Desktop Tablet Phone Submit Reply 0
Andrewwhyte 1 #2 February 8, 2009 The problem with that is that goods make up a decreasing portion of our economy. This is why Canada, Europe, Australia, New Zealand etc. went to Goods and Services Taxes. This better captures the concept of consumption you are describing. The problem with it is you have to capture the value added all along the way, this becomes a very expensive process as every business in the country is conscripted into the tax collector business. Although I agree with you that it is a good policy, it tends to be very unpopular. Canada brought it in in the 80s and the ruling Tories were reduced from 169/295 seats to 2/295. In 1993 the Australian Liberal-National (right of centre) coalition lost an "unloseable election" largely due to their unpopular proposal for a GST. I just cannot see any congress implementing it. Certainly this congress will not because it is flat; it taxes the rich at the same rate as the poor. Quote Share this post Link to post Share on other sites
likearock 2 #3 February 8, 2009 Whether or not it's a good idea in theory, this is the worst possible time for a consumption tax. Nobody's buying anything and that's leading to more people getting laid off. The more people laid off the less people with disposable income who are able to consume. We need to encourage consumption, not discourage it. Quote Share this post Link to post Share on other sites
nanook 1 #4 February 8, 2009 It is set up with loop holes and in a way that discourages investment. Why does it discourage investment? Why don't you use these "loopholes" yourself?_____________________________ "The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln Quote Share this post Link to post Share on other sites
lawrocket 3 #5 February 8, 2009 Indeed. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
Ron 10 #6 February 8, 2009 Plus a major issue is how it hurts the poor more than the rich. Lets say you make 1 million a year and I make 10,000 a year. We both buy toilet paper. The X% tax on the goods is MUCH more a part of my income than yours. Some try to say that certain goods would be exempt (OK) or that lower incomes would be assisted with checks from the gov each mth. YIKES!!!! the largest entitlement system ever. The best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
DrewEckhardt 0 #7 February 8, 2009 QuotePlus a major issue is how it hurts the poor more than the rich. Lets say you make 1 million a year and I make 10,000 a year. We both buy toilet paper. The X% tax on the goods is MUCH more a part of my income than yours. Some try to say that certain goods would be exempt (OK) or that lower incomes would be assisted with checks from the gov each mth. YIKES!!!! the largest entitlement system ever. A poor person is going to get up to 4.5X the pay-out for each dollar they put into Social Security than a wealthy once the tax side effects are considered. A poor person's income taxes don't cover the government services they use. A higher tax rate on the poor is fair but arguably not just. Quote The best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. The fairest is capitation, a flat per-head tax. You want a interstate highway system? Divide the cost by 300M and multiply by the number of people in your family. Modifications so that people aren't taxed into starvation and have an incentive to work more (why work 80 hours a week for no additional gains when 10 run you up to the poverty limit tax free?) are needed to make it practical. The biggest problem with the out of control American government is that we're an indirect democracy where the 50% of the country paying only 5% of the income tax (the average tax rate in the bottom two quintiles is actually negative) get to decide how 95% of the money not coming out of their pockets gets spent. A flat percentage tax would make it better since the bottom quintiles would feel some pain but not eliminate the problem. Where you have a simple percentage, it's still in the lower earning peoples' best interest to vote for benefits they don't bear the full burden of. Most people would vote for food subsidies if it meant sashimi grade tuna steaks and Kobe for dinner when their share of the tab was just enough for Tilapia and ground chuck. Quote Share this post Link to post Share on other sites
TankBuster 0 #8 February 9, 2009 Quote Our tax structure in America needs a total overhaul.Why? It is set up with loop holes and in a way that discourages investment. I think a consumption tax would be the fairest way.if everyone paid a 10% tax on every good purchased, and eliminated all other taxes we would avoid cheating With our ability to track virtually anything, this would be a simple way to eliminate fraud. This way the wealthy people of America will pay their fair share without discouraging others from getting rich.. Just a thought.. You are exactly right, and obviously very intelligent. I urge you to read about the "FairTax." www.fairtax.org The website is good, but the book is much better. It explains just how such a consumption tax would work and encourage investment in our economy. It also gives a good history of how the income tax came about. (It's a great example of how a temporary government program can never be temporary, it can only get larger.)The forecast is mostly sunny with occasional beer. Quote Share this post Link to post Share on other sites
kelpdiver 2 #9 February 9, 2009 Quote I think a consumption tax would be the fairest way.if everyone paid a 10% tax on every good purchased, and eliminated all other taxes we would avoid cheating Given that Californians already pay 7-9% on all (non food) goods, plus state income taxes, plus all the federal taxes, I'm pretty sure that 10% figure is a fantasy that makes the consumption tax sound a lot better than it really would be. Any proposal that promises to shift the tax burden away from you and me is likely a load of crap. Unless the nature of our government and what we expect from it changes, the dollar total remains high. Quote Share this post Link to post Share on other sites
quade 4 #10 February 9, 2009 Quote The fairest is capitation, a flat per-head tax. You want a interstate highway system? Divide the cost by 300M and multiply by the number of people in your family. That ought to cut down on the octuplets problem. Seriously, you can't tax per head, you can only do it by wage earner. Now, while I'll agree that all these "off the book" people are an extra burden to society that really ought to be paid for by the "parents" of them, currently we give the parents a tax break for having them. There is no way in hell you're going to reverse that and start taxing them for an equal share.quade - The World's Most Boring Skydiver Quote Share this post Link to post Share on other sites
Andy9o8 2 #11 February 9, 2009 QuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. Quote Share this post Link to post Share on other sites
Andy9o8 2 #12 February 9, 2009 Quote Quote The fairest is capitation, a flat per-head tax. You want a interstate highway system? Divide the cost by 300M and multiply by the number of people in your family. That ought to cut down on the octuplets problem. Seriously, you can't tax per head, you can only do it by wage earner. Now, while I'll agree that all these "off the book" people are an extra burden to society that really ought to be paid for by the "parents" of them, currently we give the parents a tax break for having them. There is no way in hell you're going to reverse that and start taxing them for an equal share. Lets assume Family X has 5 kids and pays for its own kids' s expenses. In a sense, that family already pays more tax than the family with 2 kids, for it already pays sales tax on all the goods it buys for each kid. And in states where tax is added on to utility bills, the same principle applies to consumption of resources provided by utilities, too. Quote Share this post Link to post Share on other sites
mnealtx 0 #13 February 9, 2009 QuoteQuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. The "with an exemption for poverty level" part of his post would make your argument moot, would it not?Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
hwt 0 #14 February 9, 2009 The poor buy less and the rich buy way more,that is the fairness of this idea.Ask any poor person if he would like to contribute and most would reply yes. Exclude food that you purchase( like they already do). Why are there less incentives in our system now?. The very tax that bush lowered is one example. If that investment tax was dropped zero, What do you think it would do to stimulate our economy? Taxing the rich and supporting freeloaders on social programs,Simply penalize people who are successful and rewarding people for doing nothing.. You call that incentive?........Blue Skies! Quote Share this post Link to post Share on other sites
shropshire 0 #15 February 9, 2009 um..... Have I missed something? Don't we already have 'consumption' tax, in the form of Purchase Tax (or VAT)? (.)Y(.) Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome Quote Share this post Link to post Share on other sites
mnealtx 0 #16 February 9, 2009 Quoteum..... Have I missed something? Don't we already have 'consumption' tax, in the form of Purchase Tax (or VAT)? The US doesn't do VAT. The fair tax proposal basically replaces the various sales tax with a flat consumption tax on non-essential items with either a rebate or a prebate to adjust for economic level. In essence, people living at or below the poverty line wouldn't pay any tax at all.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
wmw999 2,587 #17 February 9, 2009 OK, let's say we need 1.1 trillion a year to run the government (yeah, not accurate, but such is life). Broken down by household (2000 had 105 million, so let's grow it a little) , that's roughly $10,000 each. Let's say that the consumption tax on subsistence-level taxable goods is $5000. a. That's 20% of the income of a household making $25000/year, above the poverty level for a family of less than 5. Pretty hefty chunk, huh? That's 2 % of the income of a household making $250,000/year. You can expect them to spend more than the very poor, but it's likely that the tax will end up being regressive: i.e. it will charge a larger percentage from the poor (on average) than from the rich. Yeah, sucks to be poor. Let's make it worse. The hole gets deeper. As long as it's not us. The tax system is fucked up. Making it easy for every single person in the US is not the answer. Yes, there are plenty of lazy people in the US. But, ya know, taking an action that's got a high likelihood of penalizing the poor (who want to ascend the ladder) over the rich (who are already at the top) won't help the concept of upward mobility. And upward mobility is what the US is made of. Everyone wants their kids to be able to do better. No one wants their kids to do worse. But someone has to be at the bottom, and for damn sure the rich will make sure it won't be their kids. Wendy W.There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites
shropshire 0 #18 February 9, 2009 Cheers Mike. (.)Y(.) Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome Quote Share this post Link to post Share on other sites
Capt.Slog 0 #19 February 9, 2009 QuoteThe poor buy less and the rich buy way more,that is the fairness of this idea.Ask any poor person if he would like to contribute and most would reply yes. Exclude food that you purchase( like they already do). Why are there less incentives in our system now?. The very tax that bush lowered is one example. If that investment tax was dropped zero, What do you think it would do to stimulate our economy? Taxing the rich and supporting freeloaders on social programs,Simply penalize people who are successful and rewarding people for doing nothing.. You call that incentive?........Blue Skies! How many people are "freeloaders" as opposed to people who want to work but can't for one reason or another (like over a million jobs lost in the last 2 months of Bush's presidency). How much taxpayer money goes to buy SUVs and plasma TVs for welfare queens? Didn't Gingrich's (R) congress eliminate "welfare as we know it"? Don't you think Gingrich(R) and E. Clay Shaw Jr (R)knew what they were doing when welfare was reformed? Quote Share this post Link to post Share on other sites
mnealtx 0 #20 February 9, 2009 Quotebut it's likely that the tax will end up being regressive: i.e. it will charge a larger percentage from the poor (on average) than from the rich. When you look at the amount paid for SUBSISTENCE-LEVEL goods, you may be right. However, the 25k family would receive 'prebates' that cancel out the tax on subsistence-level goods. 2% of 250k > 0% of 25k.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
Andy9o8 2 #21 February 9, 2009 QuoteQuoteQuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. The "with an exemption for poverty level" part of his post would make your argument moot, would it not? No, it really doesn't (and it's the logic behind the graduated income tax rates that have been in effect for decades). A graduated tax rate schedule is intended to adjust for the varying "burden" of taxes on people of divergent gross income levels. A flat rate fails to take this into account. Let's take two 4-person families, each being taxed at a 25% flat rate. Family A has a gross income of $50K (which I think we can agree would currently be above the poverty level). Family B has a GI of $250K. After taxes, Family B still has $187,500 remaining to work with, while Family A only has $37,500 remaining to work with, thereby making the equivalent burden of a 25% flat tax rate more onerous on the lower earner than the higher earner. At least that's the idea. Quote Share this post Link to post Share on other sites
wmw999 2,587 #22 February 9, 2009 So get rich. It's the only answer -- if we're all rich.Of course, as compared with a whole lot of people throughout the world, nearly everyone in the US is rich. Gotta remember that. Wendy W. There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites
mnealtx 0 #23 February 9, 2009 QuoteQuoteQuoteQuoteThe best, IMO, is still a flat rate tax on all income with an exemption for poverty level. So, say no tax till you make 13k (or whatever we call "poverty"), and then X% on every cent over that. Totally fair. Advocates of graduated tax disagree - the idea being that if everyone pays, say, 25%, someone with a gross income of $200K can more easily get by on the remaining $150K than someone with a GI of $20K can get by on $15K; so a single flat rate would be more onerous on the low earner than on the high earner. The "with an exemption for poverty level" part of his post would make your argument moot, would it not? No, it really doesn't (and it's the logic behind the graduated income tax rates that have been in effect for decades). A graduated tax rate schedule is intended to adjust for the varying "burden" of taxes on people of divergent gross income levels. A flat rate fails to take this into account. Let's take two 4-person families, each being taxed at a 25% flat rate. Family A has a gross income of $50K (which I think we can agree would currently be above the poverty level). Family B has a GI of $250K. After taxes, Family B still has $187,500 remaining to work with, while Family A only has $37,500 remaining to work with, thereby making the equivalent burden of a 25% flat tax rate more onerous on the lower earner than the higher earner. At least that's the idea. More onerous? 25% is 25%. Each person still has 75% of what they've earned. Add in the poverty level exemption you're still ignoring and the tax rate for the 50k family becomes less than 25%. This is similar to the argument over the dividend tax and people saying it was unfair because Warren Buffett gets more of a break than Joe SixPack due to economy of scale, when each are paying the same rate.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
rehmwa 2 #24 February 9, 2009 QuoteMore onerous? 25% is 25%. Each person still has 75% of what they've earned. Add in the poverty level exemption you're still ignoring .... If you except (for everybody) $xxx of the top - then your 'flat rate' automatically becomes a progressive rate. The question is really two: 1 - what is the exemption amount (ie. how many people are we putting in the 0% tax bracket) 2 - what is the tax rate above the exemption? if you take both those numbers and JACK THEM UP HIGH - you can still satisfy a need to make half the people get off completely free and stick it to the rest ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites
Andy9o8 2 #25 February 9, 2009 So you & I have basically summarized the debate that been going on for about the past 100 years between graduated taxation and flat taxation. In the US, the system (at least the federal system; each state has its own system) has virtually always been graduated tax rates; and the rationale I gave above is really just a repetition of the original legislative rationale. Most views of "fairness" tend to be strongly influenced by whose ox is getting gored. In this case (tax rates), it's really all about "net effect". Advocates of graduated tax rates argue that a graduated system best levels-out the net effect of tax rates between higher and lower gross income earners. Anyhow, we can all go round and round about this. The points are clearly made. Edit: I've been using the term "graduated rate"; but I think it's more commonly referred to in the US as a "progressive rate." I meant the same thing. Quote Share this post Link to post Share on other sites
