I used to be a huge proponent of the "Fair Tax" (FT), which is essentially a national retail sales tax. Not to be confused with a VAT. Although it is a sales tax, it is progressive in nature. Tax policy is something I have not seen discussed much in this forum, but it is a topic which I believe the US currently has major problems with. Not hat I think this tax system ever stands much chance of implementation, I will give a brief overview for those who don't know much about it. The plan calls for the abolition of the IRS, repeal of the 17th Amendment (I think) which grants the Federal Government the right to tax the income of its citizens, and the establishment of an inclusive 23% sales tax on new goods and services. Unlike most sales taxes ran by state governments, the FT is progressive in nature to the extent that it offers a "prebate" to each individual or family each month of the calculated cost of the tax based on the poverty level. In other words, whatever the poverty level is deemed to be, the tax payer would get a government benefit card or check each month that would essentially preimburse them for the taxes that would be charged to them that month. To avoid a TL;DR I wont go into much more detail here, but at one point not too long ago I had done a lot of research on this, and would almost consider myself to be very well informed on this issue, so I would be happy to answer any questions or respond to any criticism of this tax policy. Be mindful, that this is not a perfect plan, no plan is, but I really do feel that this would be such a huge leap forward for the US if this were to be implemented. So, in short, All current corporate, individual (income, capital gains, inheritance et al), and other misclianious taxes would be abolished and replaced with one simple progressive sales tax. Thoughts?
Thoughts on the "Fair Tax"
- Thread starter BigNBushy
- Start date
ilikecheetoes
Well-Known Member
this is where buck jumps in and says its not fair to poor people...
im all for a sales tax as long as it replaces the theft of my labor. i worry that they will give us a sales tax and then keep the irs and income tax.
it gets rid of the graduated income tax and at least one plank of the communist manifesto gets rolled back in this country.
im all for a sales tax as long as it replaces the theft of my labor. i worry that they will give us a sales tax and then keep the irs and income tax.
it gets rid of the graduated income tax and at least one plank of the communist manifesto gets rolled back in this country.
UncleBuck
Well-Known Member
LOL!
no tax on consumption is progressive, as the poor spend a disproportionately larger share of their income on purchases.
and with aggregate demand accounting for about 2/3 of our economy, slapping a massive tax on the practice is about the stupidest idea ever for everyone who enjoys a strong economy.
lol, prebate.
what could ever go wrong with that?
you were looking for the 16th amendment, by the way.
UncleBuck
Well-Known Member
Any criticism by UB is welcome. Is it fair to poor people, well, not perfectly, but neither is our current system. The legislation thus far that has been brought to the house or senate has had a sunset provision whereby if the amendment that is necessary for the taxation of income is not repealed than the fair tax is taken down. I really feel that the poor could benefit the most from this. Lets face it, the very rich in this country don't pay a lot of income tax. There are multiple reasons for this, but mainly it is because their income is often capital gains, which is taxed at a much lower percent than regular earned income. The poor and middle class very often have a much higher actual tax rate than the wealthy. The medicare and social security taxes are flat, and I think around 7% of ones income, up to around $110,000 per year. No one pays any of those FICA taxes after the first 110k. So a person making $120k and a person making $120 mill annually pay the exact same in FICA taxes, not just rates, but actual dollars. Also, for business owners, a lot of the costs of employment, which go far beyond what they actually pay their employees is removed by the FT. This could easily mean more and better paying jobs because the cost of having an employee would decrease. For instance, the FICA taxes are actually 14%, this cost is split between employee and employer, so not only is the employee not taxed, the employer is not taxed. This is where a lot of knee jerk opposition comes to the FT. Because it removes the social security and medicare taxes a lot of people think it alters those programs. It does not, it simply eliminates the specific taxes for these programs, but the programs would continue to be funded as if nothing had changed.
The prebate would not be anything that could be screwed up, really. A mechanism is already in place, it could be distributed in much the same way as food stamps are, by simply giving each family or person a card that has X amount of dollars on it reloaded each month. Or a direct deposit into a bank account like social security. The amount of the prebate would be determined by the poverty level and the number of persons in a household. Pretty simple stuff really. And you are correct, it isn't perfectly progressive, but it has been designed to be much more progressive than current state sales taxes many of us are familiar with. The prebate accomplishes some degree of progressivity. Assume the poverty level for a family of 4 is deemed to be $30k, im not sure what the actual figure is, the exact number isn't important for our purposes. The prebate would be calculated based on that. Distributed in 12 monthly allotments. This would cover the taxes that would be paid by that family on new goods and services. The monthly prebate would be close to $600.
UncleBuck
Well-Known Member
excellent, the people who hate communism and central government are now advocating for the central government to determine what is appropriate spending for nearly every family in america now.
the prebate is like a tic tac of*progressivity*in a pool or regressive mentos.
cannabineer
Ursus marijanus
When the choice is "sign or be denied the job", wouldn't you say Yes? cn
abandonconflict
Well-Known Member
[video=youtube;UW9Fiu9IlA4]https://www.youtube.com/watch?v=UW9Fiu9IlA4&feature=player_embedded[/video]
UncleBuck
Well-Known Member
he views taxation as "theft". if i want to avoid theft, i take measures to do avoid theft. if he wants to avoid "theft", he should take measures as well.
he sounds like he's entitled to have life work out easy and in the fashion he expects. but i bet he rails against the "entitlement attitude" and the like.
cannabineer
Ursus marijanus
I don't hold with the "theft of labor" concept, but I never had the impression of honest choice in re signing the W-2. If you were being offered (high-paying specialist job) with (the rather limited sort of firm that employs those specialists) and balked at signing the W-2, can you imagine the outcome? cn
UncleBuck
Well-Known Member
you'd have to find some other way to avoid the theft.
otherwise, "tax is theft" dude is stating that he's not only entitled to that position, he is entitled to benefit without footing any of the costs.
and normally, the "tax is theft" crowd is really eager to call other people moochers just looking for a handout with their entitlement attitudes, and why don't they just pull themselves up by the bootstraps? the world doesn't owe them anything.
The tax is theft argument is oversimplified, yet correct. Prior to the 16th Amendment, income taxes had been stricken down by SCOTUS on more than one occasion. Now, it isn't theft in the to the extent that something is taken from you and you get nothing in return. Sure, paved roads and all that jazz is great. But let us look at how that money is "taken" by our government. If the population at large wanted to 'revolt' by simply refusing to pay taxes, it would be unable. When your employer pays you, the government requires that the employer take out the governments share prior to you getting access to it. The payment of taxes are not voluntary, and the refusal to do so is met with force. It isn't theft in the strictest sense, but it is awful close. Back to an earlier point you made Buck, you seemed to equate the prebate with some sort of government entitlement/handout. I simply do not see this as the case. Are current tax refunds handouts? Sure it would be entitlement, but it isn't a social welfare entitlement. It is the same thing as we have now whereby the government refunds the taxes withheld at the end of each year via tax refunds. Since the mechanism of gathering revenue is different here, so is the method of refunding taxes. The reason for it is the same; that people ought not be taxed on poverty level income. So in the FT system, this is most easily accomplished by a prebate.
The constitutional amendment that enabled the federal government to collect those taxes was passed by the congress, which was elected by the people of the United States. It was then ratified by more than 3/4s of the state legislatures, which again were elected by the people of the respective states. How can you possibly call it theft at all?
If we don't like the income tax, all we need to do is change the constitution again. The people retain absolute control over that, since they elect the congress and the state legislatures.
Canna Sylvan
Well-Known Member
The only fair tax is the one I don't pay.
Julius Caesar
Active Member
I would support a flat tax on single items over $500 or something similar. Charging us poor folks a regressive sales tax on our groceries is not the answer. Let Mitt Romney and his caviar buddies pay a 25% luxury tax on their extravagant lifestyles and the budget starts getting balanced quicker. They can afford it - I cannot.
ginwilly
Well-Known Member
Exactly JC. We can make a consumption tax as progressive as we want. You can have different rates for different levels of items price. Groceries under 10 bucks, no tax. Clothing under 20 bucks, no tax, etc.. It doesn't have to be regressive.
Taxing consumption makes infinitely more sense than taxing production unless your economy is based on debt. Then it doesn't work. Presently, we need people to borrow as much as possible to keep our house of cards propped up.
Taxing consumption makes infinitely more sense than taxing production unless your economy is based on debt. Then it doesn't work. Presently, we need people to borrow as much as possible to keep our house of cards propped up.
nontheist
Well-Known Member
Hell if it isn't broke don't fix it. What could possibly go wrong with building a system that is progressively reliant on the top earners? I mean they would never use such a system to buy politicians and run our government. They're already footing 70% of the bill, hell lets make it a cool 80% and make them royalty, then they can stay in the white house since they're the ones really calling the shots anyway.
Rob Roy
Well-Known Member
someone forced you to sign the W2?
communists?
What happens if a person engages in an exchange of labor for wages and doesn't sign a w-2 ? Force is used. No wonder why you failed algebra, there are two sides to the equation.