Support the Fair Tax! No more taxes on your poker winnings!

[Smockstack]

This idea sponsored by congressman John Linder is getting alot of attention. I love the idea, there is a book coming out co-authored by Radio Talk Show host Neal Boortz that explains everything, from implementation to impact.

Link 1 (http://www.fairtax.org/)

link 2 (http://search.barnesandnoble.com/booksearch/isbninquiry.asp?userid=R22vMXcBm5&cds2Pid=5576&isb n=0060875410)

I'd like to hear anyone else's thoughts on the subject and if anyone has heard any pros or cons of a national retail sales tax type system.

[tomdemaine]

It's another example of taking something horrible and naming it th exact opposite of what it is to decieve people into supporting it. A consumption tax is one of the most regressive (unfair) taxes in history that is until they decide to try and bring back the poll tax.

[Smockstack]

I just can't imagine anything more "regressive" than a tax that punishes hard work and accomplishment such as the system in place now.

Amercans spend billions of dollars and thousands of hours anually preparing for the income tax....something is obviously broken in the current sytem....so what is the best option?

I can't tell you how many times I've heard a fellow worker say that "I can only work 8 hours of overtime a week because anything more than that just goes to taxes" or heard the "expert" financial analysts advice to retain mortgage debt because of the tax impact.

In addition to all that, the income tax allows the imperial federal government to keep every citizen under their constant scrutiny and fear of "audits".

I would love to see a system that encourages hard work and *gasp* savings instead of selling your life to the bank becuase you're going to save some money in taxes.

Just my thoughts......

Thanks for the input!

[tomdemaine]

See my recent plan for fixing the tax system. I hope the same people jump on you with the opinions and a$$holes comments, would hate to think that they were biased in some way.

[superleeds]

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I just can't imagine anything more "regressive" than a tax that punishes hard work and accomplishment such as the system in place now

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Then you havn't much of an imagination

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I can't tell you how many times I've heard a fellow worker say that "I can only work 8 hours of overtime a week because anything more than that just goes to taxes"

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You work with some amazingly stupid people then.

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or heard the "expert" financial analysts advice to retain mortgage debt because of the tax impact.

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Have a guess, I'd really be interested in the amount of times.

[Smockstack]

I truly hope you aren't referring to the 100% estate tax post.......

[MMMMMM]

[ QUOTE ]
It's another example of taking something horrible and naming it th exact opposite of what it is to decieve people into supporting it. A consumption tax is one of the most regressive (unfair) taxes in history that is until they decide to try and bring back the poll tax.

[/ QUOTE ]

This is a wrong way to look at it because the Fair Tax would completely exempt or credit the tax on amounts required for basic living expenses. In other words, people would pay NO consumption tax whatsoever on things like food, rent, basic clothing, etc.

So, it would just be a tax on consumption beyond necessary living expenses.

Hard for me to see how that would be hard on the poor or on anyone else, or how it would be regressive. A lower or middle income person could pay NO tax and bank some money just by choosing to not spend money on unnecessaries.

My only concern would be, would the revenues raised be adequate for the government to run effectively? Probably so but I am not aware that it has been proven that it would be.

[JackWhite]

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A consumption tax is one of the most regressive (unfair) taxes in history that is until they decide to try and bring back the poll tax.

[/ QUOTE ]

Then naturally you are staunchy against cigarette taxes, gas taxes, alcohol taxes, existing retail sales taxes etc... You are correct, they are regressive. Just want to confirm how much you despise raising taxes on cigarettes because it hurts poor people (which it does).

[Smockstack]

From the studies posted on the fair tax page by Harvard economists, the fair tax would create a 25% growth in the present economy.

1: by brining businesses operating overseas back home
2: by encouraging increase in work and income
3: by collecting tax from monies presently being earned "under the table"

There are numerous points made on the site, but what I found most interesting was the list of 200+ persons that endorsed the program that were non-partisan.

[lehighguy]

From the info on the website, it is a different structure from the flat consumption tax sometimes discussed on the talk shows. But I'm guessing you didn't read the website or the plan.

[tomdemaine]

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A consumption tax is one of the most regressive (unfair) taxes in history that is until they decide to try and bring back the poll tax.

[/ QUOTE ]

Then naturally you are staunchy against cigarette taxes, gas taxes, alcohol taxes, existing retail sales taxes etc... You are correct, they are regressive. Just want to confirm how much you despise raising taxes on cigarettes because it hurts poor people (which it does).

[/ QUOTE ]

I'd ban all regressive taxes on cigs petrol and alcohol. I would however still have a >0 tax so that these goods are used efficiently. These goods create externalities which are not addressed within the marketplace so to achieve the efficient level of consumption thay should be taxed so that people face the true social marginal cost for each purcahse rather than than their private marginal cost.

[tomdemaine]

"People screw a lot of things up and they especially screw things up for other people. Just...leave others alone...why is that so hard for so much of the human race to understand (throughout the ages)??? Why do people want to "rule" the world?"

MMMMMM on changing tax laws, or have you changed your mind now that the people doing the meddling want to help you specifically?

[MMMMMM]

What the hell are you talking about? Seriously I don't understand what your point is.

[tomdemaine]

My point is that when someone expresses the view that the system should be changed in a way you don't agree with you say you shouldn't take these ideological views and try to force them onto other people, however when someone suggests something you agree with it's ok try force their/your ideology onto others.

[MMMMMM]

OK I see your point.

Let me try to address it, and mention a few other things as well.

The current tax stystem is extremely meddlesome in the lives of citizens and businesses, and very onerous in its complexity and compliance requirements.

I don't think the mere act of objecting to a system which so highly meddles in the lives of all citizens, is itself meddling.

The tax code is what, 65000 pages long? It costs billions in compliance requirements and enormous man-hours and these burdens falls on everyone. It is intrusive, it diminishes privacy--and "innocent until proven guilty" does not seem to apply in tax matters (rather the converse is presumed).

So, arguing for a less meddlesome, prying, onerous system is not itself "meddling", I should think.

Also, what makes you think I would benefit personally from implementation of the FairTax? That may be quite the unfounded presumption on your part. I might well benefit because it would help the economy, but personally would it benefit my position? That is actually unclear for me at present.

In real life I am probably one of the most non-political persons you would ever meet. I have been eligible to vote for about 25 years now, but I have only voted in TWO elections in my entire life. I am not mailing Congress expressing support for FairTax. I just discuss it, and some other things, on this forum.

I don't think I am likely to change anyone's mind here, and that is not really my goal (except with Cyrus /images/graemlins/smile.gif ). Rather, I view discussing such things as educational, and often an enjoyable exercise or challenge due of the complexity of things involved in politics/economics, morality, etc. Also, I have an instinctive distaste for irrational thought processes and sometimes feel "offended" by irrationality itself (no matter on WHAT subject or WHAT side someone takes). That said I am not immune to occasional conceptual errors nor to mis-speaking at times. I like to try to derive the TRUTH about various things. So I use this forum both to learn and as a challenging exercise--and sometimes it is fun, yet at other times it can be frustrating.

There are some very bright and knowledgeable persons who post on this forum. I have learned a lot from them, and from the process of participating in these discussions. Hopefully you will be able to derive similar benefits.

[tomdemaine]

I don't intend to offend and I do have a great respect for people who are prepared to discuss and debate and perhaps even change their opinons based on those discussions. The one thing which really galls me however is any kind of double standard or deception, I am no way way saying you are guilty of either as it is not my place. It is however all too common in the US republican party and the right wing US media.

I believe that markets work in most cases but that there should be government intervention to reduce externalities in inefficiencies where they exist. It pains me the hear George Bush saying other countries should open up to free trade while he imposes steel tariffs or that tax cuts for the top 1% will have a trickle-down effect, an effect which has been debunked by all independent economists and analysts. I also don't agree that a more equal tax system is neccessarily a more meddeling one, or why we shouldn't strive for a more equal society even if it is unachievable in absolte terms.

I think I've rambled for long enough and I have to get back to revising for my exam tomorrow. FWIW I am an undergraduate studying economics at the top university for economics in the UK. I look forward to more discussions as it feels good to talk politics with people who have opossing views to my own.

[nokona13]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
A consumption tax is one of the most regressive (unfair) taxes in history that is until they decide to try and bring back the poll tax.

[/ QUOTE ]

Then naturally you are staunchy against cigarette taxes, gas taxes, alcohol taxes, existing retail sales taxes etc... You are correct, they are regressive. Just want to confirm how much you despise raising taxes on cigarettes because it hurts poor people (which it does).

[/ QUOTE ]

I'd ban all regressive taxes on cigs petrol and alcohol. I would however still have a >0 tax so that these goods are used efficiently. These goods create externalities which are not addressed within the marketplace so to achieve the efficient level of consumption thay should be taxed so that people face the true social marginal cost for each purcahse rather than than their private marginal cost.

[/ QUOTE ]

Good point, though I thought I'd point out the funny fact that people who smoke regularly actually save the government money by dieing at 60 of lung cancer, relatively quickly, and save the government years and years of SS payments and medicare coverage.

I think the tax of gasoline should be at least $1/gallon higher. Regressive taxes on alcohol and cigarettes should be reduced, though a small tax on alcohol to cover increased police usage seems reasonable.

It's impossible to argue that the consumption tax isn't wildly regressive. It's interesting that the comeback to this point by tomdemaine was just a jab about consistency with other regressive taxes. I'm guessing you support the tax but know it's impossible to argue it's not just a way to transfer more of the tax burden onto the lower and lower-middle classes?

[MMMMMM]

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I also don't agree that a more equal tax system is neccessarily a more meddeling one,

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The current U.S. tax system is very meddling and intrusive. It is also extremely complex. and onerous in its required compliance.

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or why we shouldn't strive for a more equal society even if it is unachievable in absolte terms.

[/ QUOTE ]

It is commonplace for many to confuse equality of results, with equality of rights or equality of opportunity.

The history of trying to engineer equality of results is very tragic. Communism, for example, tried to achieve equality of results. What communism succeeded in doing, instead, was ensuring equality of misery.

On the other hand, protecting equality of rights is one of the most important functions of a good government.

The FairTax proposal exempts from taxation all spending up to the federal poverty level. Hence, only voluntary purchases over that level would be taxed. I really don't see how that could be considered unfair to anybody. And since it would be a totally voluntary tax, the label of "regressive taxation" would seem to be spurious.

http://www.fairtaxvolunteer.org/smart/index.html

http://cato.org/pubs/pas/pa-272.html