Dare I ask what this capitalized Fair Tax entails?
That's Feo . . . He's a disgusting, mysoginistic, paedophilic asshat who moonlights as a shitty writer—Something AwfulVia Secretist in the Downgraded thread:
tl:dr,
you eliminate the IRS, income tax, and property tax in exchange for an across-the-board tax rate, independent of income bracket, and a 23% (really 30%) sales tax.
edited 8th Aug '11 5:46:21 PM by johnnyfog
I'm a skeptical squirrelAnd that isn't a flat tax, how?
Everyone gets a "prebate" as well.
Very big Daydream Believer. "That's not knowledge, that's a crapshoot!" -Al Murray "Welcome to QI" -Stephen FryFlat taxation has never been implemented in the US. You can't call it failed when it was never given a chance to begin with.
The cause is lost, Tom. It was never implemented because the conservatives got nowhere with it. Fair has a nicer ring.
I'm a skeptical squirrelHm, I guess it's just the current buzzword name for this concept of sales-tax-only world. I've actually seen this concept for a long time in economics, mostly as a thought experiment, because they believed that only consumption should be taxed.
It's an interesting idea, although I have no idea what the effects are. It's a little harder to judge the effects when it's just "throw out our whole tax system and put in this one and let's see what happens!" But I'll run with the thought experiment for now.
Investments: So the idea is that it'll spur investments although investing is already not taxed. Holding wealth is also not taxed at all. However, income off holding wealth is taxed. In this case, since all capital gains, income and other taxes are gone then I would be silly not to just shove as much money as possible into savings.
Consumption: At a 30% rate (by today's way of calculating), it would seriously affect my purchase of new goods (I presume resale of used goods is not taxed then?) This would likely severely curb consumption.
Government: I have this feeling that government tax revenues would decrease substantially which would hamper most government services. This would be healthcare, police, fire protection, military and also very importantly, infrastructure. I don't think we can expect businesses to pick up the slack here. If the government doesn't build the roads, the lost efficiency is only going to be partially paid for by businesses that have more money (due to lack of taxation).
I think the concept exacerbates two problems already present in the United States:
Lack of non-residential business investment: Corporate taxes apply only to profit and thus if they invest, less of the money they earn is taxed. So actually, counter-intuitively, raising corporate tax rates should spur employment and capital investment. Dropping corporate income tax to zero would then likewise actually kill jobs and capital investment.
Wealthy don't spend: Well if the wealthy don't spend now, they would most certainly spend even less once parking money isn't taxed whatsoever. So just watch that wealth move into the hands of the few and then never ever leave because you can only tax it through consumption.
What does it solve? I have no idea.
edited 8th Aug '11 6:01:16 PM by breadloaf
Sales tax is inherently regressive. Poor people have to spend almost all their income on basic necessities, and the middle class only has limited capacity to save. Meanwhile, the richest people can afford to save large amounts of their wealth and possibly never have to pay taxes on it. I can't support such a tax regime on principle without some way to make sure the rich pay at least a proportional amount of their income.
Flat tax is a horrible idea, and the US is probably the worst Western country for it.
edited 8th Aug '11 8:53:29 PM by Erock
If you don't like a single Frank Ocean song, you have no soul.Erock@Hey,I have seen worse nations before us and believe me there has been worse.
Ok,Let's give to ceasar what is ceasar.However,let's hope ceasar doesn't blow our money on stupid stuff.I'd say lets find a way to make everyone equal in the tax system which does need a lot of reform.
edited 8th Aug '11 8:54:08 PM by jazzflower14
Sorry I didn't finish the sentence :S
If you don't like a single Frank Ocean song, you have no soul.I think it all comes down to if you think this is a good thing, a bad thing or a neutral thing. My own thoughts?
HOLY CRAP THE BUBBLES!!!!
Needless to say I don't even see it as a neutral thing, I see it as an actively bad thing. A very bad thing. Not only are bubbles bad when they pop, but bubbles give incentives to bad behavior. Now, a fair tax combined with an aggressive capital gains tax? Maybe I can get behind that. Maybe. Doesn't change the fact that generally they advertise a 30% rate as 23% meaning that I trust them about as much as I can throw them.
Democracy is the process in which we determine the government that we deserve"Investments: So the idea is that it'll spur investments although investing is already not taxed. Holding wealth is also not taxed at all. However, income off holding wealth is taxed. In this case, since all capital gains, income and other taxes are gone then I would be silly not to just shove as much money as possible into savings. "
Good for you!
DO you think your money just sits in a vault and magically comes back increased when its invested?
"Sales tax is inherently regressive. Poor people have to spend almost all their income on basic necessities, and the middle class only has limited capacity to save. Meanwhile, the richest people can afford to save large amounts of their wealth and possibly never have to pay taxes on it. I can't support such a tax regime on principle without some way to make sure the rich pay at least a proportional amount of their income. "
Read the damn bill. It's shorter than everything out of congress now-days. That's what the prebate is for.
"make sure the rich pay at least a proportional amount of their income. "
The rich are alreddy paying a greater percent of the tax bill than they make a percent of the income!
The rich spend more than the poor on luxury goods, which are taxed.
Income taxes hurt the poor the most, they insure they never have a reason to not be poor.
edited 9th Aug '11 1:30:04 AM by deuxhero
What kind of Moron wants to end taxes?
I will admit its a pain in the arse to see money disappear from your wallet, but think of it this way: "If the government gets most of their money from taxation the people who are most in charge is the average man in the street". No taxation should be associated with government refusal to be anything other than oligarchy because the people have no ability to cut off funds to the government.
Are you saying that poor people are choosing to stay poor in order to keep their income taxes down?
That's Feo . . . He's a disgusting, mysoginistic, paedophilic asshat who moonlights as a shitty writer—Something AwfulIn a way, yes. You punish them working hard.
Well that is a truly stupid idea. "The poor don't WANT to be rich, they just aren't working hard enough and getting enough incentives". Really? REALLY? Do you honestly believe that people would rather live in a council flat than a mansion because the workload is "harder" and the taxes "higher" for the rich? (and the truth of those statements is none too good)
When politicans push the idea the success is evil and the fact that you lose taxlessness and the many government hand outs if you do work to the middle class, yes, a lot of people would rather do the bare minimum than exceed, because that doesn't require work.
edited 9th Aug '11 1:55:26 AM by deuxhero
Proove it.
Also, for better or worse, we need there to be people willing to do the jobs that most people aren't. Do you want to operate a kebab house at 2 in the morning? Or to empty rubbish bins and sort out scrap metal? These are all jobs that need doing, often by hand for no respect and not a lot of money.
They still need to be done though, and just saying that the poor are too "lazy" because "they get benefits of being poor" is absolutely daft, not least because it's rather hard to live on minimum wage.
...
Yeah, getting rid of the thing that services the rich too is a good idea.
The rich, indunstrialist has most to gain from taxes. Lets take Bob. An office worker in an urban area in Britain.
Bob drives his car to work. The road is paid for by the city council through his income tax.
Bob finishes work. He gets shoved into a ditch while going to his car, and is transported to hospital, on the roads his income tax paid for, in an ambulance national taxes paid for.
Then, he gets treated, sent back to work.
His children visited him in hospital, and their education was funded by Bob's taxes.
When he returns to work, he switches on his computer, where the power comes from a plant, which whizzes through cables... set down by the government paid for by space monkeys. The same with the water.
Now, if the company had to pay for the maintainance of Bob (through sick days missed), the power, water, the company would turn less profit. And that means less money in the pocket of Mr. Industrialist.
Now think... Bob works in an office, where there are 100 people.
Yeah. Like them or not, taxes are essential. And more on the rich.
Deux, it is 4 in the morning, so I'm going to be quick: You are wrong.
The idea that people try not to make less so that they aren't taxed more is a myth, and someone else has the link for that.
The idea that the poor want to be poor, or that they are lazy and thus don't want to work harder is the peak of wrongness. It blames the victims and minimizes the facts about how hard it is to get a job, keep a job, get a raise, get a promotion, anything worthwhile, just so you can say "The government encourages people to be poor with welfare and subsidies!"
It is truly disingenuous and wrong.
Edited for civility.
edited 9th Aug '11 2:24:43 AM by Enkufka
Very big Daydream Believer. "That's not knowledge, that's a crapshoot!" -Al Murray "Welcome to QI" -Stephen FryI concur with Enku. You think that students want to live on jobseekers' forever? You think that young people work hard and keep their heads down through school, just to stay on the dole?
Dude, your vision of the world is screwed. Go visit a poor part of town, and ask how many people want a job for sure. Go ask how many kids would like to go to uni. Go ask how many people used to be office workers. Go ask. Go fucking ask.
The worst thing about it is that it ignores the reality of the working poor.
How many people work 60+ hours a week and barely make enough to support a family? How many welfare applicants have a job in addition to welfare and are STILL below the poverty line? Christ.
Share it so that people can get into this conversation, 'cause we're not the only ones who think like this.
The majority of our leaders have acquainted, rightly or wrongly, their own self-preservation with freedom from taxation. This is a topic which requires you think outside the box - it proposes a re-structuring of our society. Whether it's prudent to test-drive a new political theory during a recession is well, besides the point.
The current buzz is that a FairTax will save us. Even opponents of the GOP and the mostly-failed Flat Tax are supportive of it, if only because the current setup is beyond repair. Are there any other alternatives?
I'm a skeptical squirrel