And all this deduction cr*p would not be necessary
Not that being so makes it bad. Our economy is consumption based economy therefore a tax system based on consumption would surely limit buying and reduce consumer spending. That would knock the wheels off of the economy as it is.
that no matter how you figure the rate, the government grows and spends more, so they'll just find other fees and taxes to continue to spend more and more per capita.
You have to limit spending which is also impossible. The only way to cut government spending is to cut government. That means people need to find other jobs....government people, I mean. When you consider that some insane percentage of the people work either for the government or are employed by projects paid for by the government, who's left to pay the bills? If 20% work for the government and don't add taxes since they dilute taxes by their net income, then you have only 30% really paying since 50% don't make enough to pay any taxes.
The growth in government is insane and no one really talks about it. I couldn't even find a decent site with numbers of how many work in government. But here's something:
"The upper rising curve (red) represents the actual number of government employees during the past 6 decades, rising from 3.3 million employees in 1946 to 19.5 million employees today - a 491% increase, while the national population increased just 110%."
Numbers were for 2006 and surely higher now.
The FairTax is not about government spending - it is designed to be revenue neutral relative to the current tax system. It would never be able to be passed if it was tied to limiting government. The FairTax is not a hidden tax like the income tax or payroll taxes - it is conspicuous and if changes it affects everyone above the poverty level.
The problem seems to be that they can't find any other way to make a living, and since a lot of them go to school forever because they can't get real jobs, their compatriots put them in high pay scale jobs due to their "credentials" and in an neverending cycle we pay more and more for less and less, just to keep these morons off the street. There are so many of them that they control a political party and when things go bad, like now, they elect public officials who are dedicated to increasing their numbers. And people wonder why you can't find anything made in America to buy anymore.
"Occasionally we list eccentrically, all sense of balance gone."
Do you remember the Dems road-blocking the creation of the Department of Homeland Security because they demanded that all of it's employees be "Federal Goverment Employees," as opposed to contract or private employees? Goverment employees, goverment bureacrats, govement pensioners -- whether city, state or federal -- overwhelmingly vote Democrat. You want more life-long, lock-step, Democrat voters? Just increase the number of goverment employees.
... they just transfer the regulated public functions to unregulated NGOs and "contracted" functions.
Private employess can be fired. Private contractors can be fired. Private enterprises, when they fail to provide a good or service in an economically efficient manner, go out of business. Government agencies can be as bloated and ineffective and economicially unviable as they want. They NEVER go out of business. The polticians just raise taxes to keep them running. Even worthless, recalcitrant employees cannot be fired without navagating a maze of bureacratic rules and regulations -- first stage warnings ... official write-up ... six month probationary period ... 6 month final warning period ...
If you don't pull your freight in a private enterprise, you're TOAST in short order.
"dave c., I'm afraid things haven't been working out as we expected. Pick up your two-weeks severance pay and prorated vacation overage, and clean out your desk."
the govt just prints more money when they need it to pay all the govt bloat of employees.
It doesn't matter how you stir
the pot, Bullshit in always equals Bullshit out!!
"Private enterprises, when they fail to provide a good or service in an economically efficient manner, go out of business"
Not if they have a defence contract.
You mean, when they are working in conjunction with the GOVERNMENT? Your point is?
... the USA? World's greatest country?
Free market capitalism?
Land of the free?
Individuals always seem to focus on what they earn as a measure of their wealth without understanding you must first spend way less than you earn to be in a position to create wealth. This is doubly true for governments!
Hah! You thought I was going to say a "balanced budget amendment." Nope! Why? Because the political whores that occupy the seats of Congress would never abide by it! What's the real solution?
Err ... check that. They would never vote for that either, would they?
We're screwed. No, wait. I have the answer!!!!
We all get pitchforks and torches and clubs and we throng the steps of the capitol building in Washington, DC and we drag Harry Reid out onto the streets and burn him at the stake in front of the Jefferson Memorial.
That might work!
The problem is that our federal politicians are no fools. They know how to get re-elected. In fact, the most remarkable aspect of Congressional encumbents is just how rarely they actually get defeated. Ted Kennedy. Stron Thurman. Jesse Helms. Arlen Spector. I could keep going and going. Once these guys and their donor/constituencies establish a beachhead in the Congress, they defend it to the hilt.
Why do you think "earmarks" continue to spiral out of control despite our deficits? It's usually nothing more than a self-serving, career politician rewarding his or her supporters at home. In fact, because of the seniority system in Congress, the longer these charlatans remain in office, the more powerful they become, and, in a self fulfilling prophesy of sorts, the more willing interested parties at home are willing to pony up still more to buy their influence.
That's why our "political class" is on the verge of becoming an effective oligarchy. And that's why, despite its own disadvantages (eliminating legistlative and policy experience the chief among them), we would be better off, net/net, if term limits were imposed on these self-serving leeches.
Today, they don't vacate office via the ballot box, but in a coffin in a box -- probably paid for by the US taxpayer.. That's why, though it pains me to say it, methinks there is something rotten in the state of denmark.
What on earth is fair about taxing the poor on everything they earn... which is what they spend, whilst taxing the rich on a tiny fraction of what they earn... which is what they spend?
Another great idea from a right wing think tank... cess pit... whatever.
The poor don't pay taxes.
In the FairTax the poor don't pay taxes. Actually they, and everyone, get a prebate (money before they need it) to cover the taxes they would pay monthly on the necessities of life. (rent, food, utilities, etc.) If the poor can live a bit cheaper than the minimum level - then they can use the prebate to cover tax on additional items they wish to purchase. Once everyone uses up their prebate funds from the government then they will be responsible for all taxes. To make things simple, the prebate funds will be able to be used for any purchase - not just the tax portion.
I have some spare cardboard boxes if anyone needs housing.
What a wonderful contradiction: Americans who love to proclaim how wonderful America is and yet have absolutely no sense of "society".
I don't really care what protestations or claims to religion or spirituality that may be made, these are clearly the ultimate reductive materialists.
Hey, wait.. the poor get all the assistance they currently do... The FairTax is just a different way to collect funds. The price of goods does not change and as they pay no income tax now and will only pay taxes on goods and services purchased over about $24000/year (for a family of four) I don't see that as being any kind of punishment. At 50 years old, my usable income after taxes ($80k/year salary) is only about twice that! And I pay for three cell phones, own three cars (outright - but they were all purchased used) even a big screen TV and satellite service and pay on a $120K mortgage. Don't tell me $24K/yr is Poverty. I could do that in a moment!
"MY family used to live in a cardboard box in the middle of the road."
"Road? You had a road?"
If no prices will rise then I assume this sales tax is already in place.
But, wait, it's not.
So perhaps that was a finger misplacement error...
As for $24,000 a year being easy to live on, well, it might be possible for you, but as you have NO IDEA of other people's circumstances then it sounds pretty insensitive and arrogant to state everyone could live on that income.
Just for one example I would think $120,000 doesn't get you much property in many parts of the USA. Guessing I would say $10,000 a year in interest payments (forgetting capital repayments) and can you rent for that?
I wouldn't know.
Yes, let those lazy bastards pick up more of the tab.
They spend every dollar they get so let's tax everything they have as opposed to the rich who would only be taxed on a fraction of what they get.
Brilliant idea, pay less percentage tax the more you make.
research will make you - well - uninformed. Read up first - comment afterward. Most of those you mention will be subject to NO tax - NONE!!
"Man is the only animal that blushes - or needs to" Mark Twain
People should realize that the taxing method used is not as critical to out bottom line as is the amount of the tax burden. The amount of our taxes is based on the spending rate. So let's focus our attention on spending. Simple as ABC.
Well spending is another problem and the reason gas prices are so high - The Euro price of gas has been fairly constant - but over the last 3 years the dollar has fallen 35% in value relative to the Euro - and gasoline and oil are valued compared to US Dollar - most of the decrease in the dollars value can be traced directly to the increase in debt the US government hold. And government spending has gone up 45% in three years, while inflation as only driven up prices 10.5% over the same period. Shame on the Republicans - Shame on the Democrats - Shame on the President for not leading - Shame of the Press for not understanding something so simple. Thank goodness my oil stocks have done OK....
Yes, but only new houses - and remember those that build the houses will not be paying an income tax and neither will you, so the combination of the reduced house cost to build and the increase in your take home pay will make it about a wash! Experts say that the housing market will probably be a bit enhanced (slightly reduced prices on new homes) because the big money investors that speculate for a tax write-off basis - won't have to worry about that - there will be no income taxes to write-off against!
As this so called "idea' says you will take home your whole paypacket, where is the reduction in costs?
In fact, any reduction would be as the developer would not pay tax on his profits, but as the new tax falls on the whole price and not just the profit, it sounds as if prices for new houses would be massively increased...
OK let's make this simple - instead of making it a Developer - lets' make is an individual - the concept is the same. $100,000 House, OK?
Individual builder the house it costs him $90,000 in materials and labor, so he makes $10000, pays himself about $6000, pays the government $1650 for SS and Medicare, and figuring a middle income 35% income tax bracket - minus deductions - gets him to maybe 23.5% or $2350 for a total income tax of $4000. The materials also had labor costs involves and even the management of his suppliers products paid some income tax. Buy the time we get all those that are involve in the construction of the home - the embedded tax comes to an average of about 22%.
Under the FairTax, the Builder and his suppliers don't have to contribute their portion if income and Payroll taxes - but the builder does have to pay a FairTax on his supplies that he later can write off against the 23% tax ($23,000) he owes the government as the completion of the sale of the house. Simple right?
Same holds for corporations that just pass their income tax burden onto the products they sell anyway! Another hidden tax done away with by the FairTax! All the taxes are exposed!
Going back the the Builder and his income tax, he pays the highest percentage of tax (on his income) 40% and has invested the most labor, the most risk - how fair is that? Some supplier just touched the sale for a moment and he only now pays a small 15-20% embedded income tax on his value added to the project.
The housing market is going to love the FairTax - except for the illegal immigrant labor and independent, cash only, income tax dodging, subcontrators that will now have to pay their FairTax when ever they pay rent or purchase something.
Let's assume that new homes cost less and that at least the tax on new homes helps old homes by not devaluing them by 23%. You still have a real problem with home prices because of mortgage deductions.
Since most regular people's wealth is in their home, they'd be creamed by loss in thaty equity. I can't see how home prices don't go down by 25-30% at least. Right now, a $2,000 mortgage is reduced to an effective $1,400 or $1,500 after tax savings at a marginal 30-35% rate. So now, I'm only willing to pay $1,500 per month, so the house has to be less.
New home prices stay about the same, used home prices stay about the same. only about 40% of home buyer's use the itemized home mortgage deduction. But wait! Today, A renter looking to move into a house has save a little nest egg for the down payment, and looks at his rent and says - gee for the same monthly payment - the person makes 40K/Year and is in the 15% tax bracket the monthly payment on an 80K loan @6% is 480/month and lets assume 450/month is the interest. That is $5400 interest/year at least for the early years of the loan. The person will be able to deduct 15% of $5400 of of his income or $810 or $67.50 per month.
With the Fair Tax he will not be able to deduct anything from nothing - because he pays no income tax! The Fair Tax is equally Fair to homeowners and renters!
Also note: renter pay 23% tax on their rent - a new home buyer amortizes that 23% over the life of the loan. But remember the price of the home is the same with or without the FairTax!
"The housing market is going to love the FairTax - except for the illegal immigrant labor and independent, cash only, income tax dodging, subcontrators that will now have to pay their FairTax when ever they pay rent or purchase something"
Ummm.....I assume you weren't aware that most General Contractors "Sub" everything out.
Now, let's make this simple. I'm an "illegal immigrant labor and independent, cash only, income tax dodging, subcontrator" and so are the rest of my brethren. In a market that needs stimuli, I'm now driving my own cost of doing business up to absorb these new tax duties I have, which means passing that on to the General Contractor, who in turn will pass that on to the market, which as I said, is seeing their homes worth less.
It's interesting......many could be put out of work, but older homes in more affordable markets could come into greater demand.
This, by the way is what my wife and I are experiencing with our home. The McMansion owners are taking a hit, but the value of our home is actually rising.
It's a great time for bargains.
So people today have decades of money they've saved on which they have paid income tax already. So is this supposed to now be taxed again with a 23% tax on purchases? What is fair about double taxation?
If not, is there going to be some system to indicate which dollars have already come post-income-tax and which have not? How is this going to work?
I always question simple answers to complex problems. The more you look, the less simple they are.
Saved money is never taxed, just as invested money is never taxed. And, of course, with the FairTax, the returns on investments are not taxed - whether it is capital gains or dividends or interest. The only thing that is taxed is when you purchase something new! Say you are an older person and you've saved and saved for years and you have a little nest egg, you are ready to enjoy the fruits of your self control, and buy that McIntosh System you always dreamed of. First, you could buy it used and pay no FairTax because is is used, the tax was already paid on it (either by the Fairtax paid by its original owners or the embedded income tax by those who bought it if purchased by origionally before the FairTax came into effect. This embedded tax concept is key to understand this scenario.
No, you want to buy a Brand Spanking New MC402, Control Center and all the accessories from your favorite audio dealer, About $20K price. You go to the dealer and pay him $20K - the Tax is embedded in the price, just like the income tax now is is embedded in the price of goods and services. Only now the embedded income tax is hidden through the maze of suppliers, the manufacturer, and distributer and even your favorite dealer - all those that touch the item you wish to purchase. With the FairTax the tax rate is 23% and if government wants to raise it it will be obvious to everyone. The Republicans want to fund another war and say they need another one percent - all hell will break loose. Same thing for Hillary or Obama Care! It's TOTALLY FAIR!
Money on which income tax has been paid should not be taxed again. This is blatantly unfair. This amounts to an instant inflation rate of 23%.
For people who did not pay income tax on income in the first place, maybe they would be willing to accept this instant inflation. I guarantee savers like myself would not accept this for a second.
Unless you provide a means to avoid double taxation, this proposal is dead in the water.
It is fantasy anyway. No tax is "fair" to everyone. Someone always wins, someone always loses.
Wrong, since the price paid on the goods is the same - not 23% higher. Who cares! In the current system - a person buying a object for 100 dollars is paying a portion of that money to cover the income tax payments of others - you could argue that is double taxation, too! except that the income tax is (like a VAT) is hidden through the maze of labor leading up to the sale of the product. With the FairTax it is visible on the receipt!
You are imposing a new 23% sales tax and the price is going to be the same?
Let's get real here. I know my income and my spending and I will end up paying about 1/3 of my current federal taxes under the fair tax. That's great right? But this is supposed to be revenue neutral, so that means someone else will end up paying more taxes than they do now.
So you have winners and losers. The winners will think this is fair. The losers won't. You don't get a free lunch. You don't get the same amount of tax revenue with everyone paying less taxes.
Winners are those that spend comparable or less than their income, losers are those that spend at a higher rate than their income. The prices will more or less remain the same because competitive pressure will force companies to reduce the price to match demand - and they can do so because they will not have the embedded cost of income and payroll and corporate taxes. My salary will be adjusted downward toward my take home pay, for instance.
At least you admit there are winners and losers. People with high taxable incomes and low spending will be big winners. I would be a big winner. Then again, if salaries reduce downward as you suggest, then we're not as big winners as I first thought.
People with low taxable income and required spending (shelter, transportation, food, clothes) are the losers.
In dollars, there have to be as many losers as winners.
I'm not sure what you're so hyped up about anyway. I live in a state with an income tax and a sales tax and I can't say one seems any more fair or unfair to me. I'd like to see responsible government spending rather than tax gimmicks.
Only if you believe it's a zero-sum game.
"Man is the only animal that blushes - or needs to" Mark Twain
What economic growth is a 23% national sales tax supposed to provide measured against an equivalent income tax burden? Why would a sales tax be any cheaper or easier to administer than an income tax? Do you think savings will accrue due to the different nature of the tax? If so, why?
The main economic growth is because of the elimination of on of the highest corporate income tax rates in the the world that forces our prices higher - in Ireland where tax rates have been reduced dramatically business is booming. Here in the US corporations make many business decisions based in the tax consequences instead of the business case... for instance moving a manufacturing operation to another country or state that provides tax relief - this alienates the local workers and adds to government relfare costs through unemployment insurance or reduced (shall I say it) income tax revenue.
As for winners and losers - the current system rewards losers and penalizes those that are conscientious. The FairTax reverses that while maintaining a constant "safety net" that eliminates the cost of the basic taxes.
Yeah, just those nasty rich folks. And a few million thrify grandmothers.
And what about the stock market? How does that get taxed? Every time you trade? Instant profit recording and payment? Take 23% off all the money you deposit in an eTrade account? It seems to get complex in a hurry. I like the idea, but it ain't happening anymore than a flat tax will fly.
Butt why not legalize and tax marijuana? It'd be a huge windfall and do wonders toward winning the war on drugs and solving the gang problems that are strengthened by the drug trade.
There's no money in legal marijuana, It's too easy to grow your own.
"Occasionally we list eccentrically, all sense of balance gone."
The poor are still to be taxed on everything whilst the rich aren't.
In your world that may pass for fair, but not in mine.
If work was so good for you, the rich would do more of it.
No, every one, including the poor receive a stipend to cover the tax on the "necessities of life" - determined by the number of people in the household.
NOBODY, even the poor is taxed - in fact they receive that stipend - called a "prebate" prior to every month and are free to use it on any purchase and even carry over any left over from month to month.
Don't be lazy, go to the FairTax site or read either of Linder's books on the subject. This stuff is spelled out there.
For Americans from the right to be proposing such a system is an extremely odd event.
I would have thought vouchers for a sponsoring supermarket would be a more typical way to go.
Do you remember food stamps?
The more we change, the more we stay the same.
Dave, with the exception of those who inherited it, how do you think people get rich. Everyone that I personally know who is rich is a very hard worker and a SMART worker. Sure they don't physically work hard like a coal miner, but they sure work smarter than a coal miner. And most took risks that would have cost them everything they owned had their risks not succeeded, myself included.
You need to stop resenting those who have more than you and start focusing on why you don't. Come up with a good plan or product, take some risks and hold own. Assuming you work hard (probably harder than you've ever worked) and your idea is a good one, you may become rich also. But stop blaming others for your lack of initiative.
Let's say I'm very wealthy and don't hold a pay-for job anymore - I have investments that make money for me. Today I don't pay any social security or medicare tax (the payroll taxes) and my capital gains on my investments are taxed at only 25%. So the effective tax rate on someone wealthy is much lower than a typical worker that pays 16% up to $100K income on payroll taxes and 20% or so on the adjusted gross income.
The wealthy guy though buys stuff all the time....expensive stuff, too and he will not be able to avoid the FairTax consumption tax.
This Progressive part of the tax is where most of the 1% difference in embedded tax (22%) and the FairTax(23%) is made up.
Who else is similarly effected (no income tax payers but will be FairTax payer? Criminals - those that buy legal stuff with illegally gained funds. Undocumented workers, those that spend inherited money. The so called death tax takes effect only on the value of estates above $1 million or higher.
The FairTax is Fair!
If he is buying art (not the initial purchase), vintage or classic cars, motorcycles and boats, antique furniture, vintage collectible jewelry, vintage watches, antique oriental carpets, older houses, "used" champion eventing or cross-country horses, champion dogs if they have already changed hands at least once, archaeological or paleontology artifacts, ultra exotic audio gear as long as it is not purchased new, first printing collectible books, first pressing collectible records, etc. all those purchases are not taxed as I read the description. If I had it and was so disposed I could easily spend hundreds of millions without being touched by the tax.
Thank you for agreeing with me.I have no idea why the rich need you to speak for them but I guess they thank you anyway.
I have absolutely NO resentment towards "those who have more" than me.
But I do not despise those who have less, much less, and I can only speculate why you do or at least appear to.
Your final comments show exactly how little you are aware of.
Obviously you have not followed or joined in many threads here or you would know more about my background.
Perhaps that is not surprising though, as it may be too much like hard work for you to read much.
And I have no idea why ANYONE in America needs you speaking for them.
Oh, and BTW, I'm new around here. LOL
I doubt I speak for anyone except myself.
... sometimes the people who think them up in an attempt to cover their real agenda.
The rich would see their taxes go even lower while the majority of Americans would get screwed.
Before you embarrass yourself any further, do some research. It is not at all regressive and will change the economy for the better for every income class.
The "Fair Tax" is progressive only at the very bottom end.
Meanwhile those section 8ers who refuse to work will get 6 hundred back. Back? Don't you have to fist pay in to get back??? Name one street person that has invested in a company and provided jobs and I'll see it the left way. Flame on.
Oh, and it was not "cooked up by Republicans" Democrats, Republicans, Independent are all involved and support the FairTax. It originated in discussions between businesses and politicians as a "better way" to collect payroll taxes, because of the large administrative and compliance burden they place on businesses. They said "Why can't it be as simple as a sales tax!" Well, it can and it will, if all us individuals can persuade the power hungry Republican and Democrat politicians that the masses would like a better way for the government to collect taxes!
The so - called "Fair Tax" is just another Republican scam to lower taxes for the wealthy and screw the middle and working classes. The Brookings Institute - not what anyone would call a liberal organization - has studied the proposals for a national sales tax extensively. Brooking's William Gale concluded:
If households are classified by annual income, the sales tax is sharply regressive. Under the AFT proposal, taxes would rise for households in the bottom 90 percent of the income distribution, while households in the top 1 percent would receive an average tax cut of over $75,000.
The right wing idiots who are pushing the national sales tax can't even get the math right. In a second paper, "The National Retail Sales Tax: What Would the Rate Have To Be?" , Brooking's Gale shows that "the commonly cited 23 percent tax inclusive
rate in H.R. 25 was derived using a set of assumptions about changes in the price level that are not consistent with each other and that lead to an estimated tax rate that is systematically and substantially too low."
Further, national sales tax advocates are conning Americans with talk of a 23% sales tax rate. Yes, someone would pay $23 in tax for every $100 dollars spent ($23/$100 = 23% tax inclusive rate), but you would actually be paying $23 for $77 of pre - tax goods. That's almost a 30% tax exclusive rate ($23/$77 = 29.8%). Sales taxes in the US have always been quoted as tax exclusive rates (for example, my state's 6% sales tax means that I pay $6 tax on $100 of goods) while income taxes are expressed as tax inclusive rates. By using the tax inclusive formula for their national sales tax rate, the "Fair Tax" crowd makes the rate appear lower than what most people will perceive it to be. It's dishonest.
Go to Brookings' web site and do a search for Gales' papers on a national sales tax. He effectively demolishes all of the ridiculous claims made for the sales tax.
As for the silly claim that Democrats support the national sales tax, if that were true then surely there would be more than one single solitary Democratic congressman co - sponsoring HR25.
Oh and as far as the presenting a tax as inclusive or exclusive, If income taxes were presented relative to take home pay (exclusive) instead of inclusive (relative to gross pay) the payroll taxes (SS and Medicare) instead of being 16% would be 19% and the maximum 37% income tax rate would be almost 59% for a combined tax rate 78% that is, you would pay 78 cents Taxes for every dollar you were able to spend on goods and services. To state the FairTax rat at 23% (inclusive) is just being consistent with the way the income tax rate (which it would replace) is presented!
Rob, you are just plain wrong. William Gale did not evaluate HR25 - the FairTax - where there is a Prebate for households and Businesses and even Government has to pay the FairTax on goods and services it purchases. That's what make the FairTax a progressive - not regressive tax. And as for the amount other independent research - read the reports - confirm the 23% level. Democrats should love the FairTax - just because it penalizes the rich that purchase more than they need! It prevents the rich from offsetting capital gains with losses - making investment decisions for tax purposes - playing games that most of us can't. The FairTax doesn't penalize those that live within our means and invest what little is left over for long term economic gains. It would bring more investment into the US - and (even the FairTax folks hide this from the Republicans) act as an immediate import tax on good produced outside the US (where the embedded US income taxes don't exist) of up to 23%!
Rob, You need to read up on the Fair Tax don't spread missinformation..
The FairTax a progressive tax - the poor pay no taxes and (the "Fair" part) everyone pays no taxes on the basic needs of living.
Those greedy rich folks would pay taxes on their expensive planes and boats, just like the workers for those companies that make the expensive planes and boat pay income taxes now.
Those of moderate incomes will pay more taxes if they spend beyond their income. Or, if you save a portion of your pay - just like 401K's now - you don't get taxed on it.
Those "undocumented workers" will be forced to pay into the system unlike the current system.
And, as April 15 approaches..., no individual will have to spend any effort to comply with the income tax because the 1040 will be GONE FOREVER!
Post a Message!
This post is made possible by the generous support of people like you and our sponsors: