Fair Tax

[IUBillsFan]

I haven't seen this talked about on here and just wondered what everyone thought.

 

I will hold off on my views for a little bit.Fair tax?

[_BiB_]

I haven't seen this talked about on here and just wondered what everyone thought.

 

I will hold off on my views for a little bit.Fair tax?

8860[/snapback]

 

I know next to nothing on finance, so I pre-qualify my uninformed opinion.

 

I had thought this a great idea before-then backed up. Wouldn't a strictly consumption tax make it a crap shoot as to how much money came in every year? The government at least can make projections based on each years take. And for those with the means, especially in border states, why not go to Canada or Mexico for your bigger "consumptions?"

[IUBillsFan]

I know next to nothing on finance, so I pre-qualify my uninformed opinion.

 

I had thought this a great idea before-then backed up. Wouldn't a strictly consumption tax make it a crap shoot as to how much money came in every year? The government at least can make projections based on each years take. And for those with the means, especially in border states, why not go to Canada or Mexico for your bigger "consumptions?"

8879[/snapback]

 

Good point with regards to knowing the amount that will be brought in but the government has a pretty good idea how much people spend every year.

 

Also things will actually be cheaper here than in Canada or Mexico. You are only paying tax on NEW items also. Buy a used car no tax.

[KD in CA]

I haven't seen this talked about on here and just wondered what everyone thought.

 

I will hold off on my views for a little bit.Fair tax?

8860[/snapback]

 

 

 

There isn't any question that consumption based taxes is the only "fair" way to tax people. How the hell did we ever come up with the concept of taxing people for EARNING money? Punishing people for working? Worst idea in US history.

[stuckincincy]

Sounds like a variation (or is) a nat'l sales tax. It's been tried elsewhere IIRC (Europe?), and results in a very large black market barter economy. You give me food I fix your car, and so forth.

 

Congress would never do it because it greatly reduces their power - if they cannot punish this one with taxes, cannot favor that one with deductions, who would even bother sending them a Christmas card?

[IUBillsFan]

Sounds like a variation (or is) a nat'l sales tax.  It's been tried elsewhere IIRC (Europe?), and results in a very large black market barter economy. You give me food I fix your car, and so forth.

 

Congress would never do it because it greatly reduces their power -  if they cannot punish this one with taxes, cannot favor that one with deductions, who would even bother sending them a Christmas card?

8946[/snapback]

 

The difference is they kept at least part of their "income" tax...IIRC. The black market thing is a concern but that will be one of the jobs of the IRS.

[Alaska Darin]

Congress would never do it because it greatly reduces their power -  if they cannot punish this one with taxes, cannot favor that one with deductions, who would even bother sending them a Christmas card?

8946[/snapback]

That, in itself, makes it worth looking at.

[Captain America]

I think its called an oxymoron Fair and Tax yea right

[Mickey]

Basically a sales tax and no, it isn't fair. It sounds fair and it even sounds plausible but it is neither. A dollar to you may not be worth as much as a dollar to me. If all you have is a single dollar, that dollar is worth more to you than a person who has dollars to spare. This is a basic ecomonic principle, it is nothing new. Eat one candy bar and you are a happy camper, eat 50 candy bars and you end up vomiting away the afternoon in an emergency room somewhere. That last candy bar was not worth quite as much as the first.

 

Such taxes can spur the development of a large scale black market. Cigarette taxes are so high that there is great deal of cigarette smuggling going on. The generated revenues are very difficult to predict and so budgeting becomes even more difficult.

 

Why not just get rid of all deductions of every kind and retain the progressive system? Getting rid of deductions would mean increased revenues so the rates themselves could be lowered. All sources of income should be taxed at the same rate so that investment income is not favored over wage income. That would also lead to lower, albeit still progressive, tax rates. There are better ways to resolve the problems of our tax code than a sales tax.

[KD in CA]

Why not just get rid of all deductions of every kind and retain the progressive system? Getting rid of deductions would mean increased revenues so the rates themselves could be lowered. All sources of income should be taxed at the same rate so that investment income is not favored over wage income. That would also lead to lower, albeit still progressive, tax rates. There are better ways to resolve the problems of our tax code than a sales tax.

9085[/snapback]

 

 

No deductions and keep discriminatory rates??? That is simply absurd. If you want to eliminate deductions and have a single flat rate for EVERYBODY, that might be reasonable.

[Gavin in Va Beach]

No deductions and keep discriminatory rates???  That is simply absurd.  If you want to eliminate deductions and have a single flat rate for EVERYBODY, that might be reasonable.

9167[/snapback]

 

I could go for 2 rates, something like 10% for everyone making under a 100 grand, and 15% for everyone making over.

[Guest RabidBillsFanVT]

There isn't any question that consumption based taxes is the only "fair" way to tax people.  How the hell did we ever come up with the concept of taxing people for EARNING money?  Punishing people for working?  Worst idea in US history.

8936[/snapback]

 

It was voted in by the AMERICAN PEOPLE in 1913!! hahaha

 

They happened to have voted for Taft, so there must have been some kind of crazed lunacy that affected the country in those years.

 

I like the fair tax idea!!! It makes a LOT of sense, but how would you enforce non-US purchases?? UH-OH. ANOTHER regulation problem!!

[OGTEleven]

Basically a sales tax and no, it isn't fair.  It sounds fair and it even sounds plausible but it is neither.  A dollar to you may not be worth as much as a dollar to me.  If all you have is a single dollar, that dollar is worth more to you than a person who has dollars to spare.  This is a basic ecomonic principle, it is nothing new.  Eat one candy bar and you are a happy camper, eat 50 candy bars and you end up vomiting away the afternoon in an emergency room somewhere.  That last candy bar was not worth quite as much as the first.

 

Such taxes can spur the development of a large scale black market.  Cigarette taxes are so high that there is great deal of cigarette smuggling going on.  The generated revenues are very difficult to predict and so budgeting becomes even more difficult.

 

Why not just get rid of all deductions of every kind and retain the progressive system?  Getting rid of deductions would mean increased revenues so the rates themselves could be lowered.  All sources of income should be taxed at the same rate so that investment income is not favored over wage income.  That would also lead to lower, albeit still progressive, tax rates.  There are better ways to resolve the problems of our tax code than a sales tax.

9085[/snapback]

 

I agree that a VAT, sales or consumption tax (call it what you like) is not very plausible at this point. Perhaps it will become more plausble over time through technology.

 

I don't really agree that it is unfair. The diminishing returns example you use, in my view, is not valid for two reasons. 1. I can 237.4 candy bars before I puke. 2. The whole point of a currency is that it levels the playing field between goods and services. Your 2nd dollar is no less valuable than your first. The products it can acquire may end up having a different mix. You may buy a soda or a stomach pump after you've had you're limit of candy, but it hasn't changed the value of the currency. I'm sure you wouldn't want to cap someone's total assets beacuse dollrs have ceased to have meaning.

 

There are "unfair" components of any tax system because A) They are designed by people and B ) they are "consumed" by people.

 

The design of today's code has certainly become broken. The fact that there are so many lines in a tax return and its adjunct forms is proof.

 

The comsumption of today's tax (and related) system is what tends to bug me the most. Here's an example: Take Mr. Jones and Mr. Smith. Each makes 100k a year in 1986 (right after college) and they get identical raises over time to 150k. Between 1986 and 2004, each has made an aggreagate of 2.25 million (average of 125k per). They both lost their job last month and took 50k positions. By coincidence, each started a family with twins in 86, and each have had identical, medical, income and necessity expenses over the last 18 years.

 

Mr. Jones likes fast cars, fancy dinners, expensive wine, HDTV, and season tickets to the 50 yard line of the fish (further proof of his stupidity). He decided he could do better in the market than any old 401k plan and he's going to start investing any day now. He's on his 3rd mortgage and has a very low net worth, but he has lived in a huge house since 87.

 

Mr. Smith started investing right away, lived below his means and has already paid the mortgage on his modest but comfortable house. His only indulgence is seasons to the Bills in the end zone.

 

Now that the twins are going to go to college, guess what? Mr. Smith has enough to pay their tuition despite his recent job woes. Mr. Jones is ok because his moderate income and lack of assets help him easily qualify for assistance which will be partially paid by Mr. Smith's tax bill.

 

When it's time to retire, it is probable that Mr. Smith's social security benefits will get hampered by "means testing" while Mr. Jones, who is poor, will receive increased benefits.

 

Long winded, I know, but my point is that no system can be completely fair without an in depth audit and value judgement of every transaction that every person ever makes. I doubt anyone is in favor of that. We should all be open to any system that closely mirrors its results without undue government oversight. At some levels a consumption tax might be able to do this, at least in theory. Implementation is another matter.

[Mickey]

I agree that a VAT, sales or consumption tax (call it what you like) is not very plausible at this point.  Perhaps it will become more plausble over time through technology. 

 

I don't really agree that it is unfair.  The diminishing returns example you use, in my view, is not valid for two reasons.  1. I can 237.4 candy bars before I puke.  2. The whole point of a currency is that it levels the playing field between goods and services.  Your 2nd dollar is no less valuable than your first.  The products it can acquire may end up having a different mix.  You may buy a soda or a stomach pump after you've had you're limit of candy, but it hasn't changed the value of the currency.  I'm sure you wouldn't want to cap someone's total assets beacuse dollrs have ceased to have meaning.

 

There are "unfair" components of any tax system because A) They are designed by people and B ) they are "consumed" by people. 

 

The design of today's code has certainly become broken.  The fact that there are so many lines in a tax return and its adjunct forms is proof.   

 

The comsumption of today's tax (and related) system is what tends to bug me the most.  Here's an example:  Take Mr. Jones and Mr. Smith.  Each makes 100k a year in 1986 (right after college) and they get identical raises over time to 150k.  Between 1986 and 2004, each has made an aggreagate of 2.25 million (average of 125k per).  They both lost their job last month and took 50k positions.  By coincidence, each started a family with twins in 86, and each have had identical, medical, income and necessity expenses over the last 18 years. 

 

Mr. Jones likes fast cars, fancy dinners, expensive wine, HDTV, and season tickets to the 50 yard line of the fish (further proof of his stupidity).  He decided he could do better in the market than any old 401k plan and he's going to start investing any day now.  He's on his 3rd mortgage and has a very low net worth, but he has lived in a huge house since 87. 

 

Mr. Smith started investing right away, lived below his means and has already paid the mortgage on his modest but comfortable house.  His only indulgence is seasons to the Bills in the end zone. 

 

Now that the twins are going to go to college, guess what?  Mr. Smith has enough to pay their tuition despite his recent job woes.  Mr. Jones is ok because his moderate income and lack of assets help him easily qualify for assistance which will be partially paid by Mr. Smith's tax bill.

 

When it's time to retire, it is probable that Mr. Smith's social security benefits will get hampered by "means testing" while Mr. Jones, who is poor, will receive increased benefits. 

 

Long winded, I know, but my point is that no system can be completely fair without an in depth audit and value judgement of every transaction that every person ever makes.  I doubt anyone is in favor of that.  We should all be open to any system that closely mirrors its results without undue government oversight.  At some levels a consumption tax might be able to do this, at least in theory.  Implementation is another matter.

9192[/snapback]

 

Taxes are a burden that has to be carried. Some people are bigger and stronger than others and can carry more weight than those who are smaller and weaker. Lets say you have 10 people and a tax burden of 100 pounds to be carried by them. An equal distribution, equal not fair, would be 10 pounds each. However, if 5 of them can carry 15 pounds just as easily as the other 5 carries 5 pounds, wouldn't a "fair" distribution be 15 pounds for the stronger 5 and 5 pounds each for the weaker 5?

 

What is actually done with that tax money in terms of government expenditures is a different issue from distribution of the tax burden.

[Gavin in Va Beach]

Taxes are a burden that has to be carried.  Some people are bigger and stronger than others and can carry more weight than those who are smaller and weaker.  Lets say you have 10 people and a tax burden of 100 pounds to be carried by them.  An equal distribution, equal not fair, would be 10 pounds each.  However, if 5 of them can carry 15 pounds just as easily as the other 5 carries 5 pounds, wouldn't a "fair" distribution be 15 pounds for the stronger 5 and 5 pounds each for the weaker 5?

 

What is actually done with that tax money in terms of government expenditures is a different issue from distribution of the tax burden.

9302[/snapback]

 

 

"From each according to his abilities, to each according to his needs!"

- Karl Marx, Critique of the Gotha Program, 1874.

[Alaska Darin]

"From each according to his abilities, to each according to his needs!"

- Karl Marx, Critique of the Gotha Program, 1874.

9321[/snapback]

Yeah doggy!

[VABills]

"From each according to his abilities, to each according to his needs!"

- Karl Marx, Critique of the Gotha Program, 1874.

9321[/snapback]

 

Applause.

[KD in CA]

Taxes are a burden that has to be carried.  Some people are bigger and stronger than others and can carry more weight than those who are smaller and weaker.  Lets say you have 10 people and a tax burden of 100 pounds to be carried by them.  An equal distribution, equal not fair, would be 10 pounds each.  However, if 5 of them can carry 15 pounds just as easily as the other 5 carries 5 pounds, wouldn't a "fair" distribution be 15 pounds for the stronger 5 and 5 pounds each for the weaker 5?

 

What is actually done with that tax money in terms of government expenditures is a different issue from distribution of the tax burden.

9302[/snapback]

 

 

 

We already do that Mickey....that's why we tax a PERCENTAGE of income. If we had a TRUE fair and equal tax, each individual would be responsible for $XXXX (total federal budget / 280,000,000). It's pretty easy to defend why each individual should contribute an equal dollar amount to highways and nat'l security, etc. But since we allow for your "burden" theory, we decide to take a percentage of each person's earnings; thus, someone earning ten times more than you pays ten times more taxes. Of course, that isn't good enough for you, so we have to put in discriminatory rates so that someone who makes ten times more than you pays twenty times as much in taxes. And you STILL complain that it isn't 'fair' enough.

 

Your analogy is very nice, but what happens when someone decides they don't want to carry ANY of the weight? What happens when HALF the people decide they don't want to carry any of the weight? That is exactly what has happened in this country, with a tiny segment of the population carrying almost the entire load.

[DC Tom]

That is exactly what has happened in this country, with a tiny segment of the population carrying almost the entire load.

9334[/snapback]

 

Which is traditionally the way it was done, anyway. The NYC public health system was financed privately by the "evil, capitalist robber-barons" with little or no input from the masses, for example.

 

Difference being, of course, that the Vanderbilt's and Carnegie's, etc. contributions were voluntary. They chose to finance public works. Nowadays, they'd be legally required to...

[Alaska Darin]

We already do that Mickey....that's why we tax a PERCENTAGE of income.  If we had a TRUE fair and equal tax, each individual would be responsible for $XXXX (total federal budget / 280,000,000).  It's pretty easy to defend why each individual should contribute an equal dollar amount to highways and nat'l security, etc.  But since we allow for your "burden" theory, we decide to take a percentage of each person's earnings;  thus, someone earning ten times more than you pays ten times more taxes.  Of course, that isn't good enough for you, so we have to put in discriminatory rates so that someone who makes ten times more than you pays twenty times as much in taxes.  And you STILL complain that it isn't 'fair' enough.

 

Your analogy is very nice, but what happens when someone decides they don't want to carry ANY of the weight?  What happens when HALF the people decide they don't want to carry any of the weight?  That is exactly what has happened in this country, with a tiny segment of the population carrying almost the entire load.

9334[/snapback]

I agree with the equal percentage - after a certain portion of wage is excluded. No one should pay any taxes on the first $25K of their income. Then their wages only would be taxed at a certain percentage to infinity.