Mike Gravel (Alaska Democrat) just said he is for the FAIR TAX.

[flashdebadge]

Is anyone familiar with the fair tax plan? Is it a good idea?

[MissWaverly]

1. no, it's not, it's flat tax, basically IRS sales tax

this allows the rich to buy overseas and gives the burden of mopping up this huge deficit
on the middle class and the lower class, it also encourages corporations to outsource to
avoid the tax on supplies they need to run their business. How the rich have a dream of
no tax burden at all while they watch the Gulf Coast starve irks me. It's called "fair"
because the rich would not be singled out to pay more, you would pay based on what you
consume.

[flashdebadge]

6. if you pay based on what you consume, wouldn't the rich pay more?

For me and my family we don't consume that much stuff. So if what you are saying is true, my family would save money.

[MissWaverly]

8. no, because they will import, buy on-line

have their rolls flown back to the US, you do consume, you will be paying an income tax every time you buy donuts at the 7-11 and you will get no deductions. It's the Income Tax with a twist, all the pain but no refunds. You will be paying huge surcharges on your phone bill,
while the rich use phone companies with broadband.

:-)

[flashdebadge]

11. That doesn't make sense. You and I can buy online now.

[MissWaverly]

15. yes, and we pay no sales tax for out of state purchases

but the rich will buy massive quantities of things on-line, they will make it a game, the rich
are determined to keep every penny, believe me.

[flashdebadge]

20. I don't care what they buy as long as I can buy what I need. Why do you

care about what the rich buy?

[MissWaverly]

26. Look, listen to me just for 5 minutes

we are in debt big time since George W. Bush started fighting catered wars on credit, if the
debt is broken down in simple terms, every family now owes $156,000.00 Now, they need to
pay the money back so do you really want to have to pay $6.00 bucks for a $1.00 hot dog,
that is what it is going to be. You and your family will be living on hot dogs and beans
while the rich will be driving by on the tax free rolls bought in Cancun with warbucks.
No, no and no. Do you think I can afford a 76% increase in my utility bill here in Maryland,
that is the crap they are trying to pull. Right now in Maryland, every month on my phone
bill I pay $66.00 for service and $34.00 for surcharges and taxes. My $19.00 sewage bill
is now $48.00 so I can clean up the Chesapeake, how about the corporations polluting it,
why can't they pay?

[KansDem]

81. Don't forget "fee," the GOP's answer to "tax"

Another 3-letter word.

A couple of years ago, I received a notice from the county that my wastewater removal would become "fee-based." It used to be handled through local taxes. Now the amount I pay is tied in with the amount of water I use. My water use would determine my fee. And to add insult to injury, the measure of water-use occurred in the months of January and February. What does this mean?

1) Wastewater removal should be tax based. It is a public service.
2) I'm paying more for this service than some of the rich, empty-nesters a few miles from me who live in estates (I have four in my family, therefore baths and showers would cost me more).
3) Since the recorded water-usage was for the coldest months of the year, the rich pay less Why? you ask; Imagine how much it would it cost to water the lawns of an estate. No need to water them in January and February. How about the swimming pools? No need to fill them in January and February.

Yeah, GOP is all for "reducing taxes"--for the wealthy--while increasing fees on the rest of us! :grr:

[GOTV]

92. If they must charge fees...

... the fees should be on a sliding scale based on income.

[MissWaverly]

136. You got it

the problem is that the middle class and the poor pay more than their share and get hypnotized
into thinking that their sacrifice is for moral government. The only morals this crowd
is interested in is what can pry money out of your wallet.

[flashdebadge]

146. how much in tax did you pay this year and what percent?

[MissWaverly]

149. I dunno, but I know Baltimore has very high real estate taxes

it's not just the federal tax, due to the "tax cuts" the support to the state and local
areas was cut which means higher state and local taxes, believe it, this fair tax is
just a snarky way of eliminating your tax refund. My sewage bill went from $19.00 to $48.00
and my tags for my car went from $75.00 to $125.00

[Telly Savalas]

28. Do poor people save a higher percentage of their income than

do the rich?

[blondeatlast]

30. Exactly the point. We put vastly more of our incomes back into the

marketplace than the rich do.

[blondeatlast]

29. Consider the percentage of your finances put back into the marketplace

as opposed to the mega-welathy.

They don't put near as much of their income into the economy as you and I do.

We drive the economy of the US, they drive the economies of France, Switzerland, and Barbados with the fraction ogf their income they do put back into the economy (as opposed to investment).

[GOTV]

37. Don't bet on it....

... the wealthy do not "consume" (buy taxable items) at the same rate as the middle class and the poor relative to their income. Consumption doesn't scale with income. More of their money goes into non-tax investments.

Thus a sales tax moves the tax burden down the income scale.

And yet, the government's bills will be paid eventually. So, if government spending does not change and the tax burden has moved closer to you, you will pay more to support the government and the rich will pay less.

[Solon]

2. Warning, "Fair Tax" is code for either the flat tax or national sales tax.

Both are bad ideas, no matter how you cut it. So call his office and tell him its a BAD idea.

[Virginian]

39. See www.fairtax.org. It is a national sales tax.

They write letters to the editor of my weekly paper all the time.

It is not a tax that is fair at all since it taxes consumption and not wealth. It is very regressive since the poor spend all their income on necessities and the wealthy spend a very small percentage of their income.

A flat tax, taxing the same percentage of what you make regardless of your income is better, but it still hurts the poor. Wealthy PNAC member, Steve Forbes, proposed this when he ran for President.

If we could remove some of the ceilings and loopholes, then a progressive tax, like the one we have is the most fair of all tax methods.

I also believe in the inheritance tax. Why should someone who wins the state lottery have to pay taxes, but someone who wins the birth lottery gets off. There should be a threshhold so that people don't have to sell family heirlooms, and small business exemptions so that people don't have to sell the family business or family farm.

[BootinUp]

3. Isn't that code for a RW non-progressive tax?

to replace progressive income taxes?

I guess its fair if you think that someone making 50000 a year should pay the same tax rate as a multi-billionaire.

[stevedeshazer]

4. Perhaps it's Ron Wyden's proposal?

http://wyden.senate.gov/media/2005/12152005_wyden_emanuel_tax_plan.html

Where did Mr. Gravel mention this?

[flashdebadge]

7. he mentioned it live on Hannity and Colmes a few moments ago

[Idioteque]

5. I support it, but a lot progressives don't.

The FairTax is a national sales tax. It replaces ALL federal income, payroll, gift, estate, and capital gains taxes with a 23% inclusive (30% exclusive) sales tax.

While ordinarily this would be EXTREMELY regressive, the fairtax fixes it by giving each family a monthly "prebate" of the tax rate times spending up to the poverty level. This essentially untaxes the poor and makes the tax progressive.

Right now the only cosponsers in the Congress are Republicans. Democrats were cosponsering it before but Pelosi made them stop which is unfortunate.

Here are some good links.

FairTax Website
Wikipedia Article


Edit: Although the FairTax is mostly supported by conservatives, there are several progressive arguments in favor of it. Here are just a few.

1. Simpler Tax Code - The wealthy can't use loopholes and deductions to avoid paying taxes.
2. It only applies to new items. It encourages recycling and effecient use.
3. It gets rid of the regressive payroll taxes for SS and Medicare and ensures that they are fully funded. It will get rid of the need for "reform".
4. Items manufactured in the US and shipped abroad won't have the tax while items from others countries in the US will carry it. This means that American businesses will be more competetive and less jobs will be outsourced.
5. Families who only spend up to 30,000 year will pay ZERO taxes.

[flashdebadge]

10. thanks for the links. I will read up on it.

[BootinUp]

13. There was an opinion piece

in the NYTimes a few weeks ago, written by a conservative too. Explained how there would not be near enough revenue at those rates and it would be closer to 50% IIRC.

[Idioteque]

18. That does worry me a bit...

Most calculations pinpoint the rate between 23% and 24% to be revenue neutral but some groups have found higher percentages. The likely economic growth caused by implementing the Fairtax will likely increase the revenue allowing the rate to decrease.

I would actually be interested in lowering the rate and implementing some sort of direct tax on wealth to make it a bit more progressive. I don't the the purists would like that idea though. ^_^

[Finder]

65. If they use a rate schedule akin to sales tax...

for different types of goods then it would work.

[Finder]

131. I am concerned on that point as well...

but until we see an actual plan(there are several versions) there is no way to run actual number projections.

[flaminbats]

134. purists are not connected with reality..

neocon purists would say.."lets have the sales tax, but no others."

some liberal purists might say.."lets have the estate tax, but no others."

some Jerry Brown followers might say.."lets have the flat tax, but no others."

some like Zell Miller have argued.."lets abolish the sales tax in states, but no others."


No purist, regardless of his ideology, can successfully collect taxes. No government can rely on only one method to bring in revenue. :thumbsup:

[gristy]

14. The fix you describe may accomodate the poor, but is certainly not

"fair". A progressive tax in my view includes tax rates that increase progressively with income across the entire range of incomes.

[Idioteque]

21. The rebate makes it progressive...

Everybody gets the check at the beginning of every month. At lower spending levels, that check will pay for most of the tax, making the tax percent very low. At higher spending, the check represents a much smaller percent of taxes paid so the tax rate is higher, although it never gets higher than 23%.

[gristy]

25. The rebate makes the tax rate progressive at the lower end only.

It's virtually flat at the high end.

[Inland]

44. Ends up a small break for poor and huge break for rich. MIddle dies off.

Of course, to make it a small break for the poor, there's all sorts of hoops to jump through and argumetns to have. If the "poverty rate" is set too low, then they are fucked. But the rich are going to get billions and billions of breaks guaranteed, and the middle class might as well move to Mexico.

I understand the frustration, but a sales tax just gives everything the rich want and makes sure that they are never taxed again. It's a Bush wet dream.

[Finder]

63. I support it.

I hope others look closer and see the benefits rather than dismissing it just because the repubs like it too.

[Lochloosa]

147. I also support it. The more you learn about it the more it makes

sense. Read the book "The Fair Tax" by Boortz and Rep. Linder. If you buy it, all of the profit goes to charity. (Boortz gave over 500,000.00 away recently)

The best part is the "Prebate". That is the money everyone would receive at the first of the month to cover the tax up to the poverty level of their dependents. It would also eliminate the IRS and cripple the lobby industry as it is now. Everything is about tax rebates to K Street.

This plan was poured over by the best economist in the country for over 10 years before being proposed.

I like it.

[Chemical Bill]

151. That doesn't help with regressive local taxes.

How about a tax on all wealth and holdings? Give it a floor, so we don't force people out of their homes. Replace all state and local taxes too. And eliminate all the fees that we pay for government services.

BTW, I don't trust the current crop of DCites to mess with the tax code.

Bill

[Newsjock]

9. Yes, I'm all for the same fair tax that the Republicans used in 1959

http://www.truthandpolitics.org/top-rates.php
The top marginal federal income tax rate in 1959 for a joint return was 91% on taxable income over $400,000.

http://www.westegg.com/inflation/infl.cgi
Let's bring back the income taxes that were good enough for that great Republican, Dwight D. Eisenhower. In today's dollars, that's a 91% marginal rate on all taxable income over $2.5 million.

Sounds entirely fair to me. Or weren't the Eisenhower Republicans fair?

[MissWaverly]

12. forget about taxing the guy and gal with 2 kids and a mortgage

I am saying this from Maryland where BGE is trying to raise our electric bill with a 76% increase, this is after gouging us all winter.

[flashdebadge]

16. You should protest in front of their offices. Make a scene!

[MissWaverly]

24. well this is an election year in Maryland

this has not made Bob Ehrlich (R) very happy since he is running for reelection and it was
his bright idea to deregulate the utilities here in Maryland.

[gristy]

17. Keep in mind that your electric company is not an oil company.

They have to pay for the energy to generate that electricity.

[MissWaverly]

22. 5 midwest states did a study on pricing for natural gas

this winter, they said it was caused by greed not need, they said the utilities
bilked consumers out of millions of dollars, but they could not take action
because they were states and not federal regulatory agencies. Read what they said,
this is not tin hatted bloggers but the Wisconsin Dept. of Justice testifying in
the US senate.

Attorney General Lautenschlager Testimony on Natural Gas Pricing Before the U.S. Senate Judiciary Committee

The wellhead price of natural gas in the six-year period of 2000-2005 increased by over $400 billion dollars compared to the previous six years Winter heating bills in the Midwest this winter are projected to be up by $250 per household, or 28 percent, compared to last winter, despite a 5 percent decline in consumption and record levels of gas in storage. They are up by over $600 compared to five years ago.
Our investigation does not support the commonly repeated mantra that “soaring” demand is driving natural gas prices. Both demand and supply have been relatively flat and steady over the past decade. The price of natural gas, meanwhile, has been all over the place, with peaks and valleys that constantly ratchet upwards.


http://72.14.203.104/search?q=cache:NXDY0h1CG08J:www.doj.state.wi.us/news/nr031406_PL.asp+5+midwestern+states,+price+natural+gas&hl=en&gl=us&ct=clnk&cd=6

[flashdebadge]

23. Sort of like the Oil company execs.

[acmejack]

19. Oh those boys of Ike's were just wonderful!

That is why Nixon swept the 1960 election and that loser John Kennedy slunk back to Massachusetts or wherever he was from and was never heard from again.

[MissWaverly]

27. Kennedy won on his youth and charm

[Solon]

31. Just a little historical perspective...

The Progressive Income tax really went into full swing during WW2, to pay for the war effort, in addition to the Great Depression, to pay for many of his social and public works programs. The Rich feared him so much that they plotted to overthrow the President and replace him with a Fascist dictator. The progressive Income tax maxed out at 91% or so for the highest income rates because of a combination of the Marshall Plan and also paying back all war debts. It actually was reduced, to about 85% during the Kennedy and Johnson years, and stayed at about that level until Reagan entered office. All of the sudden, there was a big burst of SKYROCKETING incomes for CEOs during the 80s and into the 90s, having the tax reduced to less than 50% helped a LOT with that.

I would say we should reinstate it to about late 1940s to early 1950s levels, so that the rich can pay back the debt, plus to help fund the rebuilding of our infrastructure, and also to pay reparations to Iraq and Afganistan(a New Marshall Plan). This includes closing the loopholes, and also reinstating Capital Gains and Estate taxes as well, neither of which apply to 85% of the people in this country to begin with.

[1932]

32. I believe I read in Richard Parker's biography of JKGalbraith that...

there were so many deductions and exemptions with the Truman/Eisenhower tax rates that nobody really paid those rates anyway.

We could probably get by with a true progressive rate that doesn't tax anyone at 91% and also doesn't allow any multi-millionaire to pay a lower percentage than his secretary pays.

[Solon]

106. That's true, however...

Telling the Rich they have to pay 91% tax rate, and they are able to reduce it to 85% or so is still better than today, where they are TOLD to pay a 50% or so tax rate, and reduce it to less than 10% or so.

[flaminbats]

120. in the Truman/Eisenhower days, the federal debt was insignificant..

even when inflation is considered! Unlike Eisenhower, who left office with several surpluses, Reagan lived in a dream world. His dream wasn't to win the Cold War, balance the budget, or even to reduce government spending. His objective was the same as our current President, to reduce taxes for the economic elites..regardless of the cost!

Eisenhower, Truman, Roosevelt, LBJ, Kennedy, Carter, Clinton...even Nixon and Ford understood that peace and prosperity have a price. A government like ours, controlled by the people, isn't free. Why have so many people in both parties forgotten this hard fact? :shrug:

[ima_sinnic]

33. selfish greed-head Neal Boortz loves it, therefore it must be bad

Daily he expresses his sneering disdain for the poor, for kindness and human charity, for "bedwetting liberals," for HRC, Katrina victims, "Islamofascists," Mexicans, and everybody else who he sees as beneath contempt. He is in some stratospheric income bracket already, yet hates Al Franken because Al "gets 2 million a year" from AAR, more than he gets.

If he is for it, I am 120% against it. Whenever these greed-heads get excited about anything you can believe it is the opposite of what would be for the "common good," of which they have no concept. They could care less about anything "fair." They would just as soon privatize basic services such as police, fire, and highway departments so that only the rich could be served.

Fight this tooth and nail.

And by the way, how are low-income people "exempted"? Everytime I go in a store I have to bring a paystub to prove I make less than some minimum? I have to carry around a ledger to prove how much I've spent (and also reveal what it was for)? It just so happens I'm almost 100% freelance now, so I don't even get "paystubs."

[av8tor05]

34. This country had a "flat tax" or "VAT" for its first 150 years.

Do away with income tax, tax loop holes, corporate welfare, make food exempt and the first $1,000 you spend each month on mortgage or rent and sign me up.

This will eliminate the need for individual tax filings. Solves the problem of them "illegals not pay'n their share." No more tax cheats.

I'm willing to support that system. But do away with the income tax first, I do not want both.

[Inland]

42. Dream world.

If the "first one thousand dollars" is exempt, individuals would still have to file something.

And all the burdens of enforcement and collection just get dumped on businesses, including the distinctions between buying food and eating out. Why?

[av8tor05]

53. You have everyone pay a flat tax on everything.

To offset the first $1000 per month everyone would be entitled to a monthly check from the government. No burdens on collecting or on enforcement. Who is enforcing the state and local sales taxes you are paying now? A national sales tax would be no different. Think about how nice it would be to get that check every month instead of paying an income tax. It is fiscally possible.

[Inland]

61. And how determine who gets a monthly check?

Why, they fill out a piece of paper establishing what they paid for rent or mortgage. Isn't that a "return"? Doesnt' someone check it? Doesn't someone prosecute cheaters? You realize that EITA receipients are being audited, right? Same will happen for those poor people. You take the burden of recordkeeping and enforcment off the rich and put it on the dirt poor.

By the bye, who makes sure those same illegal aliens that don't pay income taxes aren't submitting those things that aren't returns?

[av8tor05]

115. Pink elephants are in the zoo. blah, blah, blah.

Now I'm making as much sense as you.

[Inland]

124. One born every minute.

Amazing how you haven't thought ANY of this through. But of course, the rich people have. They decided to lie to you about it.

[Finder]

129. Please research a bit...your questions make no sense...

Your refusal to even research what it is about is obvious.

[Finder]

70. The burden would be on businesses.

Which is where it belongs. IMO

I am in a pilot program now as a small biz...other than disorganization because it is a pilot system...I think it may work.

[Finder]

67. It is to be a replacement of income tax. n/t

[lumberjack_jeff]

96. No, it relied upon tariffs almost exclusively for the first 100 years. n/t

[sweetpotato]

35. My problem with the Fair Tax

is that if you are making $25,000 a year (as I am) $250 translates to 1% of my income. $250 to someone who makes $250,000 a year is only .1% of his/her income.

Also - I can't fly to Paris to buy my new Spring wardrobe. I have to shop locally, so I'll be paying sales tax and the person who can fly to Paris to shop will not.

How is that fair?

And do we really trust that the "pre-bates" will be permanent? Will the "pre-bates" take on the stigma of welfare and other government assistance? Will the next thing be to villify the "pre-baters?" Will we cut the pre-bates to cover budget short-fall?

What about any money I may have in savings? Hasn't that ALREADY been taxed? If I spend it, I'll be taxed again.

Will anything be exempt from this sales tax?

Food? No, that's what the pre-bate is for, right?

Medical care? Prescription drugs? Mortgages? Investments? Electronics? Anything?

In order to support myself, I have to spend almost 100% of my income every month. If I spend all my money, the a greater proportion of my income is going to taxes than a person who makes $50,000 a year. This is fair?

[av8tor05]

36. Your premise is flawed.

The person who flies to Paris to buy a spring wardrobe will be paying roughly 17% flat or VAT tax on the $1000 plane ticket to Paris or $170 in taxes before buying anything.

Someone making $250K will buy more or more expensive items than someone earning 25K. ergo they will pay roughly 17% the same as you pay. Fair.

[sweetpotato]

38. Interesting

What if they own their own plane?

I still maintain that if I make only 25,000 a year, then I will be spending ALL of it. It will ALL be taxed. The man that makes a large salary will not spend ALL of it. It will not ALL be taxed.

It will NOT trickle down.

You cannot tell me that someone making millions of dollars a year will spend it all in the US on consumer items. The rich SAVE and INVEST. They do not just spend.

[GOTV]

43. They will not spend all of it...

... you are correct. It's very simple.

[av8tor05]

48. Eventually it ALL gets spent.

Even if the money is invested, it is invested somewhere where it is spent. Unless someone is putting it in mason jars and burying it in the backyard.

[GOTV]

76. Eventually it is all spent...

... by the little guys and so it's the little guys who will foot the bill under a national sales tax system.

[av8tor05]

47. If they own their plane

they still have to pay for fuel (extremely expensive for Jet-A), parking fees, aircraft cost (hundreds of thousands), hangar fees, maintenance. Ain't saving any money there. Keep asking, I'll stay with you.

[Finder]

71. it does not trickle down now...

so who cares. Rather than obsess over what the evil rich do, look at the benefits for the average working person making under 100k.

[GOTV]

80. There is no advantage to earning less than 100k...

... the burden of taxation moves upwards

[av8tor05]

100. Since when is earning less an advantage?

[Inland]

40. So he goes to the Carribean and buys a small island instead.

Not taxed.

Moreover, I don't see the "fair" in everyone paying 17%. That's Bill Gates's island in the carribean that he'll see once every two years and will be appreciating, untaxed, while for an American of middle income it's the basics. He gives up another island, and I give up my kid's college, and the working class gives up food. Really fair.

[av8tor05]

49. Why buy an island in the Carribean?

If he wants to live in the United States he will pay taxes on everything he buys. If someone wants to leave the country today and work off shore the same premise will apply.

[Inland]

58. He wouldn't have to "live there". It;'s an intentional loophole for rich.

He can buy an island, stock it with a boat and a house, and not pay a dime on it to THIS country. Why would he give up his American citizenship?

Unlike with an income tax, he doesn't have to leave the country or give up citizenship. No, he can be as good a citizen as you and I and just spend all his money overseas. At a substantial price break.

It's pretty strange that the same tax scheme that is supposed to be so good because it's going to "catch" all the illegal income actually has a known, desired loophole that is only usable by the very, very rich. The poor can't leave the country. The poor aren't buying overseas. But the rich, that's THERE LOOPHOLE, as if dropping effectice marginal tax rates aren't enough.

[av8tor05]

64. Would you buy a house you were not going to live in

to save money? Or buy a car and all the furnishings if you were not going to use them. Rich people don't get rich or stay rich thinking that way.

[Inland]

68. Because. They. Are. Rich.

Fuck, you've clearly never MET a rich person.

They HAVE more than one home. They HAVE more than one VACATION home. With the money they save thanks to the lower taxes in the "fair tax", they'll be able to buy two out of the country.

At a savings of 17 to 23 percent over a home on Marco Island, of course they will.

People don't stay rich by not taking legal tax loopholes put there for their benefit. You WANT them to have the loophole. You WANT to cut their taxes by billions. Why pretend to quibble over their fifth home in the bahamas?
.

[Finder]

75. The rich you describe are only 1 percent...

and you are not focusing on the benefits to the other 99% who would benefit as well. We cannot have a tax code that punishes the rich out of spite.

[GOTV]

82. A progressive tax does not punish the rich...

... or you would see people working to be poor.

[Inland]

88. There's MUCH higher taxes for most people. Why punish them out of spite?

What did the middle class do to you? Why punish them, out of sheer hatred?

When people have children or pay tuition, they would pay the tax. Retired people would pay the tax. What did they do to you? Why do you hate them so much?

People with high medical bills would pay another 23% on top of that. But we can't just let them die, because their plots also cost 23% more. We can't send them to the hospital, either. Their insurance---it lapsed, it cost 23% more.

Why punish them out of spite?

[Finder]

91. I am not for punishing anyone...

I think taxes should be fair for everyone. I think generalizing about the rich is as silly as generalizing about the poor.

[Inland]

93. Huh. Taxing the rich = spite. Taxing the middle class = fair.

Why didn't I think of that? That's why it's the "Fair Tax"! Because it increases taxes on the middle class, which is fair!

Wonder why that's not the number one bullet point.

[Finder]

103. No raise in taxes for the middle class.

Honestly, play some numbers and compare them with what we pay today. Look at your pay stub and take the gross. That is what you would bring home weekly.

Remember, the prebate...that will be an annual check of about *SEE BELOW per individual.

*Edited for the second time to just past what the legistlation says the rebate would be.lol

Effect of FairTax on families
The FairTax would provide every family with a rebate of the sales tax equal to spending up to the federal poverty level. The rebate would be paid in advance and updated according to the Department of Health and Human Services poverty guidelines. Based on the 2003 guidelines, a family of four would be able to spend $24,240 annually tax free. They would receive a monthly rebate of $465 each and every month ($5,575 annually). Therefore, no family would pay tax on essential goods and services, and middle income families would be effectively exempt from tax on a large portion of their annual spending.

[Inland]

110. Impossible.

I don't have to play with the numbers. The fact of the matter is, it's impossible to a) maintain current revenues and b) keep the rates of the middle class the same and c) lower rates on the rich to the same as the middle class.

It doesn't matter WHAT the numbers are. You can't lower rates for the rich a lot and get the same revenues.

What the tax "reformers" sometime admit and sometime don't is that they plan on the new system brining in a lot less money. But you know, the income tax would be a lot more popular and less disliked if I could just assume that everyone gets a tax cut, too. It's just another set of lies set up to make people think there's something for nothing. If there were consumer protection laws that applied, a bunch of think tank people would be in jail.

[GOTV]

137. If the tax on the rich go down...

... the tax on the middle class will go up because, in the end, our bills will get paid. It's only a question of who. Our choices are between those who are most able to pay and those least able to pay.

[av8tor05]

98. Finally, a breath of sanity.

[GOTV]

41. Consumption rate does not track income...

As income rises, so does non-taxed investment. You make $25,000 a year you invest very little. You make $25,000,000 a year, you invest a high percentage on average. This is why consumption does not track income.

The rich will not match the poor in taxable spending on a percentage basis.

[av8tor05]

50. All money gets spent.

Even though your bank account says you 10K in the bank it is not really sitting in a drawer at Wachovia. It is being loaned and spent. When spent, it will generate revenue, about 17 cents on the dollar. Every time it is spent.

[GOTV]

78. It doesn't change the fact that...

... a smaller portion of the income of the rich will be stripped away in taxes than of the middle class.

Rich guys can sit around pouring money into non-taxed investments all year. Sometimes when a rich guy sells a stock he will give some of the money to pay his gardener who cannot afford to shield any income in investments.

It doesn't matter that each dollar will eventually fall to the ground to be used temporarily by the middle class before getting sucked back up into the tax free stratosphere. What matters is where does the government shave off their take. They will do so mainly at the bottom.

[GOTV]

85. Hey, check out my new tax plan...

... it's just like your's only with one change. I'm totally exempt. You will agree that it's completely fair sincle all dollars will eventually be spent by those that are taxed!

How about that? It passes your test!

[av8tor05]

99. Now your just being silly.

[GOTV]

133. It's your rationalization that is silly

Giving the rich a break on their taxes based on the fact that eventually all dollars are spent does not make it OK.

If my example is so silly perhaps you can explain what's wrong with it. You're the one that suggested the justification that as long as all dollars are taxed eventually then there's no ground for complaint.

[FormerDittoHead]

144. I like this example...

I've heard of this "it eventually will get taxed" argument already..

What these guys don't say is that it will eventually get taxed... *GENERATIONS* from now....

In the mean time YOUR money is taxed over and over and over again...

[bscottsmith]

45. underground economy

with a sales tax drug dealers will pay their share....right?

[Inland]

46. Not to mention services.

I'm sure the guy that is replacing my window will report and pay every penny of the labor he is charging.

[av8tor05]

52. Do you think he is not deducting expenses now?

Besides he will be charging you 17% on your new windows, not himself.

[Inland]

54. So he pockets it. Or cuts his price to compete with my implicit knowledge

The government is able to track sales of goods pretty easily. Services are going to be a completely different story. Many if not all of the verfication problems in an income tax on services are going to be present for a sales tax on services--yet more so, since it's a marginal rate of 17% (actually, at least 24% if there is a fed tax covering all federal tax receipts) and therefore all the more incentive to cheat.

[av8tor05]

56. Don't you pay a sales tax on services now?

We all pay state or local sales taxes. Services are not exempt.

[Inland]

59. Uh.....yes, services ARE exempt.

Here in Illinois, they are. I'm not sure if ANY state attempts to collect taxes on services generally.

[av8tor05]

73. I am not sure about Illinois, I don't live there.

But most elsewhere they are taxed. Just like buying a bottle of coke.

[Inland]

74. Can you name one? I think it's VERY uncommon.

The fed government is going to have to set up it's own enforcment system for services. Good fricken luck.

[av8tor05]

79. Have you ever had a service without purchasing a part?

I can't remember the last time I have. Maybe when I had my lawn cut. Anyhow, even Illinois residents pay taxes on tangible items associated with services performed.

[Inland]

86. Legal. Medical. Lawnmowing. ISP. Every fricken day.

I don't pay taxes on the services. Never have. Goods only.

Fact is MOST of our economy is the purchases of services. You're going to invent an entirely new tax system to catch that.

[av8tor05]

102. Your lawyers don't use paper,

you must have the only medical system that doesn't use tongue depressers or latex gloves. Man you got real nice system up there in Illinois.

[Inland]

112. What are you getting at now?

So my hundred bucks for fifteen minutes translates into the tax on one toungue depressor and one paper dress, that's, er, two cents of tax on me for services. Go to a lawyer, and get an email opinion and you don't even pay ANY tax for that. Yeah, that makes sense.

[av8tor05]

119. what are you getting at?

[GOTV]

83. In ohio some services are taxed.

[av8tor05]

84. Same here in Ga and Fla

[av8tor05]

51. Do drug dealers pay income tax now?

Hell no they don't. With a VAT or flat tax they would pay taxes every time they bought a new gold chain, got a tattoo, bought a new car, purchased gasoline, etc. It does just the opposite of creating an underground economy. It makes EVERYONE a taxpayer, even the criminals who are making money.

[Inland]

55. No. But then again, that's what they get prosecuted for.

So it all works out.

[av8tor05]

57. Not really.

Most drug dealers get busted for get this - dealing drugs. I would rather they pay taxes than not.

[Inland]

60. Then there's still no problem.

After all, they aren't collecting sales taxes on the drugs they sell, either. There's no taxes lost at all.

[av8tor05]

62. You don't get it.

1. they are not paying income tax now.
2. they are not paying sales tax now.
3. they are buying stuff now

that is where you tax them, when they buy stuff. Everyone, including the criminal underground element would get taxed that way. That is the only way where everyone can get taxed.

[Inland]

66. Well, sure, but what's the point?

Fact is, you lose trillions of taxes on the rich to tax a drug dealer at a 17 or 23% tax rate...but you still don't tax the purchase of the drugs themselves, meaning you really aren't putting the burden on them at all.

And all the really, really big drug dealers ahve to do is buy all their stuff out of the country, and use the legal loophole you give the rich of just spending their money abroad. I hear they have connections.

Really, you're going through a lot of work to give the super rich a super tax break. You've got to pretend enforcment problems go away and that fairness means merely that the drug dealers spend more for chains. Why bother?

[av8tor05]

69. Are the really big drug dealers going to buy their house

out of the country and sneak it in along with their car, boat, TV, refrigerator, clothes, CDs, DVDs, etc...

They rich ain't going to Paris to buy their DVDs and shoes etc.... If they are rich they aren't too worried about spending $75 on a pair pants in the good ol USA.

[Inland]

72. You don't even acknowledge the incentive. Incredible.

You aren't proposing a change of tax systems. You are proposing that Americans change their entire attitude on paying taxes and learn to enjoy them.

But if you've got the same old people living under the new regime, yes, that's what's going to happen.

Fact is, you've got a 17% to 24% incentive on top of state sales taxes. People already drive for hours across the borders to buy Canadian cigarettes. After the change, everything can fill the trunk. Then everyone can cross the border, buy three sets of clothes, put them on, fill the tank, get the repairs done, secret some jewelry, and make it pay.

And if you are really really rich, you don't even have to bring it "home". You just put it at your vacation home.

Problem with all tax "ideas" is that they compare apples and oranges. The apples is the current system where everyone is a cheating asshole and incentives distort behavior. The oranges is the future system where nobody cheats, nobody changes behavior according to incentives, and government trusts everyone and doesn't need returns.

[av8tor05]

77. I can't argue with your thinking

I can just imagine the long line of cars at the US-Canadian border for people stocking up on their Canadian made jeans and televisions. Man it sure would be economical for Cleatus and June to jump in the ole pick-em-up and head up I95 from Georgia to get in line (with gas at $3 per gal).

And all them rich folk going naked all year sitting in their empty cardboard box until they get to their vacation house and can let it hang out. I can see it now.

Can argue with your logic.

And since we have only had an income tax for 2-3 generations, switching back to a VAT would drive us all insane.

[Inland]

87. Of course you can't. You can't argue with economic incentives.

They are a prime driver of behavior. You think people wouldn't drive to Canada to save a few hundred bucks? How far away from the border ARE you?

And the rich don't have to wait. You just saved them kabillions a year even BEFORE the tax evasion. Thanks for that.

What's the point of all this, anyway? To make sure the drug dealer pays 24% on top of his gold chain?

[av8tor05]

89. Well, I live in Atlanta

and I am not going to drive to Canada to buy anything. And the purpose of this, if you had read from the beginning is to implement fair/flat tax. Poster 45 brought up the drug dealer thing. I am only trying to drive my argument from that perspective that you continue to lay out. Read the entire thread, don't just walk into the middle of a conversation. Like I originally posted, income tax is unfair. Not everyone pays. flat tax or VAT=fair

[Inland]

90. YOU don't have to. You just have to pay higher taxes.

To bad for you, huh? After all, every dollar that escapes means the tax rate has to be adjusted for you.

People already drive across the border for drugs and cigarettes.

Let's sum up.

1) the sales tax will be an enormous tax break for the rich and enormous tax hike on the middle class and poor. Particularly hard hit will be people in temporary spending periods, like people raising children, paying tuition, ill, or the retired.

2) any attempt to ameliorate it's effect on the poor, such as rebates, will require returns and verfication and enforcement, complicating the system putting those burdens on precisely the people who don't have the time or skills or money to hire someone else, to do them. Moreover, they simply raise the tax rates generally. The more you do for the poor, the more it looks like the same complications and problems of an income tax system, and the middle class REALLY gets it in the chops.

3) Purchases out of the country will be easy for the rich but widely copied, losing 23 cents for each purchase.

4) Nobody knows how to track sales of services without a burdensome reporting system and widespread cheating, making it look, again, more like an income tax.

So, what's the point? Fact is, the reason why it sounds so good is that everyone assumes problems of enforcement and cheating and buying overseas just go away. Hey, if I assume all those problems go away under an income tax regime, it too works pretty good: Everybody pays, nobody checks returns, no cheating, and there's no reason why an income tax isn't simple and MORE fair, as greater burdens would fall on people who can pay more and only do without a third vacation home as opposed to someone buying diapers.

And we haven't even talked about transition costs yet. I've paid income taxes on much of my savings. I'm supposed to pay tax as I spend it, too?

[av8tor05]

97. My head hurts

from banging it against a wall all day. You continue to pay or not pay your income tax, I'll continue to work for a flat tax.

There is a flat tax rally in Atlanta tommorrow. Come on down.

[Inland]

111. Sure. While your there, take some bucks and hand them to Ted Turner.

Same difference. After all, it's so unfair that he has to pay a tax rate that is higher than yours.

[av8tor05]

113. It is unfair.

If you want to get informed go to www.fairtax.org, if not it is up to you

[Inland]

117. Not unfair to Ted.

I also know all the stuff the fair tax people left out, including a dollop of truth, in order to gull the vast majority into accepting tax hikes so Ted can pay less.

Good luck. Don't take any more wooden nickles than you have to.

[av8tor05]

118. yes it is

[Inland]

122. Well, you could just ask that Ted's income taxes be lowered,

and skip all the sales tax bullshit. Huh, I wonder why the proponents of the "fair tax" don't just tell us that the REAL unfairness of the system is that the rich pay too much in taxes?

Why do they insist on all this guff about collections and being simpler, which isn't true, instead of just saying, "hey, Bill Gates DESERVES a tax break, and so do his kids and grand kids...."

Because it wouldn't win hearts and minds, so best to just LIE about things?

Whatever. I'm not buying any of it.

[av8tor05]

126. Gladly, you got his number?

Fair is fair. Whether it is on the play ground or in the board room.

[Inland]

130. Why not just go to a Buckhead country club and hand out fivers?

I mean, as long as we're pretending that it's not all bullshit.

[GOTV]

138. Fair is fair?

It's fair that we all pay the same tax rate? If you would exempt the single mom choosing between rent and food, you understand that we should not all pay the same tax rate.

If you would would have 2 tax rates, one for people like her (0%) and one for the rest of us you've got a problem. You can't very well say that 2 tax rates are fair but 3, 4 or more tax rates are unfair.

[av8tor05]

101. No, I can't argue with someone who argues canards and

dresses them up as "economic incentives."

[begley]

150. Yes. When they buy their cadillacs and jewelry, they will.

[Lochloosa]

148. Look at it this way. I make 55K a year and want to buy a boat.

I'm looking at one around 17K. $3900 tax at 23 percent.

I go fishing with a friend that makes over 500K a year and he is looking at buying a boat that cost around 300,000. 69,000 in taxes.

And he likes the plan also.

[AllieB]

94. Fair Tax is a Grover Norquist front group

so it definitely is NOT a good idea. It puts the burden on the middle class and poor.

[av8tor05]

104. Even a broke watch is right twice a day.

[lumberjack_jeff]

95. Shitty. F'ing. idea.

The state of Washington relies heavily on our sales tax. To get the money required, the state taxes the lowest quintile of the population at 17%. The top 1% of our population (read Bill Gates) pays 3%.

It is grossly regressive and those pushing the idea conveniently ignore the fact that it'll
1) unavoidably create a black market for everything.
2) create an instant 20%+ inflation on everything.

I live near a luxury yacht manufacturer. They conduct their sales on their $60 million yachts 200 mi offshore to avoid the tax. It's easy to see how rich people will avoid the tax.

It is the worst idea in a long line of bad ideas from the right wing.

[flaminbats]

105. nothing FAIR about increasing the national debt...

I might support a sales tax in addition to a repeal of Bush's tax cuts..

at least that would help us pay for this lost war in Iraq, balancing the budget, and to reduce how quickly the national debt is growing! Somehow I doubt the politicians who now back the "Fair Tax ACT" would go along with a Sales Tax in addition to the current income tax..it just makes too much since in a country with an eight trillion dollar debt, in which each person's share is now over $28,000!

http://www.brillig.com/debt_clock/

[Finder]

107. This would abolish the fed income tax. n/t

[flaminbats]

125. why?

our government is in debt, the cost of this war is growing, government spending is increasing, and the Social Security system is at risk. A sales tax may work alongside the income tax, but how could it possibly work in place of it!

[Lydia Leftcoast]

108. Simple math:

You earn $25,000 a year, and you spend every penny of it, especially if you live in an expensive area and/or have children. Your purchasing power drops by 17%-23% or whatever the tax is.

Meanwhile, the person who earns $250,000 a year or $2.5 million a year can easily get by with not spending his whole income. He can let it accumulate and earn interest on it instead of spending it.

He can also lean back and pontificate about those lazy poor people who are buying DVD players instead of saving their money. He can write newspaper columns bewailing the fact that we now have a negative savings rate.

No matter how much he buys, he will almost certainly have some left over at the end of the month.

Anyone who thinks a flat tax would be a great idea must have never been poor.

Oh, and by the way, Alaska is the state where everyone gets a bonus from the state due to oil revenues. That makes some of them dumb about taxes. I once read a LTTE in the Oregonian from a former resident of Alaska who complained about Oregon's state income tax (which is actually lower than Minnesota's state income tax, only Oregonians gripe more) and how awful it was, adding that in Alaska, the state actually paid her money every year instead of taking it away. She was actually of the opinion that every state should do that. :crazy:

[Finder]

109. FYI...

Effect of FairTax on families
The FairTax would provide every family with a rebate of the sales tax equal to spending up to the federal poverty level. The rebate would be paid in advance and updated according to the Department of Health and Human Services poverty guidelines. Based on the 2003 guidelines, a family of four would be able to spend $24,240 annually tax free. They would receive a monthly rebate of $465 each and every month ($5,575 annually). Therefore, no family would pay tax on essential goods and services, and middle income families would be effectively exempt from tax on a large portion of their annual spending.

[Inland]

114. So EVERYBODY pays less or the same! It's a MIRACLE

not seen since supply side tax cuts raised revenue, except we didn't really see that miracle either.

And the paperwork for rebates and such....it's all done by magic, just like my returns for 2006 were done by magic!

My guess is that people really, really want to make money appear out of thin air. There's one born every minute.

[av8tor05]

116. woopty hoopty doopty doo

[Finder]

121. No paperwork, the rebate is based on national poverty level. n/t

[Inland]

123. Sure, like magic. nt

[av8tor05]

127. I am in total agreement with you.

[Lydia Leftcoast]

145. You actually TRUST the Republicans?

A big weakness in this idea is that it doesn't touch income from investments and rents/leases, which is where the rich have most of their income.

The rich don't just put their money in a bank and draw chunks of it out to spend--they leave the majority in investment accounts and draw only the interest, but usually not all of the interest, which then gets folded into their principal to generate yet more interest. That's how they get and stay rich. Any millionaire who spends his entire annual income on big houses and fancy cars doesn't stay a millionaire for long. Ask any number of now-broke lottery winners.

Also, I read somewhere (can't remember where) that to equal the current federal budget, the national sales tax would have to be 23% on all goods and services. That's WITHOUT the givebacks to low income families. And you can bet that the Republicans would cut food stamps, sell the national parks, and eliminate Social Security before they'd cut one penny from the military.

Listen, I don't trust ANYTHING the Republicans propose. There's always a catch in there somewhere that gives a major advantage to either the rich or the Puritanical. Sometimes the catch isn't obvious, but it's always there.

Whether it's vouchers or eliminating the minimum wage or outsourcing jobs or No Child Left Behind or the flat tax, the Republicans and Libertarians ALWAYS say that they're helping the poor. They're canny enough to know that the American people would never stand for their coming out and saying, "We're doing this because we rich people need even more of our money."

Don't be fooled.

[sweetpotato]

128. Fair tax book reviews

Read some of the book reviews of The Fair Tax.

They are explaining the problems with this idea fairly well.

http://www.amazon.com/gp/product/customer-reviews/0060875410/ref=cm_rev_sort/002-1229435-7056860?customer-reviews.sort_by=%2BOverallRating&x=12&y=16&s=books

"It seems that proponents of this bill do not understand how inflation works. Either that, or they're purposely not addressing the inflation issue because the additional income promise is a wonderful selling point for them. Imagine for a moment that every "middle-class" consumer had 25 percent more money. This would mean that every run-of-the-mill consumer would have more wealth to buy more goods. When this happens, the demand for everyday consumer goods increases. Price follows demand very closely; the result is that prices would go up to satisfy consumer equilibrium. So you'll have more money to spend, but things you want to buy will cost more, a wonderful net result of zero.

It's not a coincidence that, on the other hand, capital goods go unscathed by this whole proposition. A wealthy individual is free to invest as much as she wants --- and to make as much money as she wants --- from capital goods without having to pay a cent for her gain. This seems wrong to me. If an individual is blessed enough to have the faculties and the proper guidance to make considerable wealth from a country, it is her duty to take greater part in supporting the continued prosperity of that system."

and:

"FairTax proponents also downplay the rampant tax evasion that would result under the FairTax system. Since purchases for business and investment purposes would be exempt from the tax, it wouldn't be long before we all opened our own small businesses (such as network marketing or vacation home management) and made sure that all of our major purchases were for "business" or "investment" reasons.

But even honest people would find plenty of ways to avoid paying the FairTax since only the purchase of new items would be taxed. Prudent folks would naturally tend to buy used cars, existing homes and pre-owned furniture in order to avoid paying taxes on those high-dollar purchases. All that buying of used goods might be great for eBay, but it would have a disastrous effect on our manufacturing, retail and construction industries."

[Finder]

132. A good debate point, (effect on manufacturing)...

and one that I would want to research historically. The point regarding business use is a bit of a spin though. Only businesses that would eventually be selling retail would be exempt...akin to the state sales tax system.

[FormerDittoHead]

135. Here's a challenge for fair tax advocates...

It's understood that the FairTax SCHEME would NEED to be "revenue neutral".

Simply, the total amount raised under the FairTax would need to be no less than the amount raised under the current system...

Here's the challenge:
Would someone who wants the Fairtax say that they're for it even though it will mean that THEY PERSONALLY will probably end up paying more taxes under such a new system?

Please explain how you would end up paying more taxes under the FairTax SCHEME.

The problem is that they all think they'll "make out" on the deal somehow and pay LOWER taxes.

These people don't give a SHIT about "fair" taxes, they want LOWER taxes, and everyone here acknowledges that the poorest will pay more taxes under this SCHEME than they do now, and the richest will pay less, so who's kidding who?

PS: Here's a very good article, although the website is not of my interest...
http://www.jpfo.org/fairtax.htm

[Finder]

139. Without the breeder tax cuts and credits, I would prob pay more...

but frankly, I don't have a problem with that. I am sure lower taxes would be the deciding factor for many others though.

[flaminbats]

141. How would Social Security and Medicare be kept solvent?

eliminating the payroll taxes at a time when the baby-boomers are approaching retirement sounds like a disaster to me!

[FormerDittoHead]

143. and let's not forget this little detail...

People getting ready to retire and present retirees HAVE ALREADY PAID INCOME TAXES on much of their savings....

It's been mentioned above...

But the fact is that it would mean retirees would have to pay DOUBLE (and REAL double, not 'fake' double like corporate tax) taxes!

[FormerDittoHead]

142. Two honest questions...

...if you would end up paying higher taxes, why in the world would you want it?

Secondly, using rough figures, how do you figure you'd pay more taxes without the "breeder" deductions?

[Inland]

140. We know that the proponents sell the "fair tax" as a tax cut

Granted, every time someone uses the word "reform" what they mean is "better for me". But tax reform is pernicious, because it's not revenue neutral or, in a term I just made up, participant neutral.

The fair tax isn't revenue neutral, so it looks better than it is. I can make the present system seem a lot better, if it only brings in a fraction of what it brings in now so that I can give everyone a big cut.

The fair tax isn't participant neutral. The reason why we have all the paperwork in the income tax system today is because we know people cheat. We could have today's tax returns on a postcard if the government wanted to take our word for how we got to the final number. So when the flat taxers suggest that paperwork is less under their system, it's because of an implicit assumption that the government is simply going to believe that people are going to behave better than they do now. The government is going to simply hand out refunds to the poor without returns or verification because there's nobody cheating. Even legal outs, like rich people simply buying offshore, are assumed to disappear. That isn't tax reform, it's moral reform, and nobody thinks THAT'S coming.