Cal Thomas Praises Maverick Liberal For Backing Consumption Tax

Discussion in 'Politics' started by NATO AIR, Sep 26, 2004.

  1. NATO AIR
    Offline

    NATO AIR Senior Member

    Joined:
    Jun 25, 2004
    Messages:
    4,275
    Thanks Received:
    282
    Trophy Points:
    48
    Location:
    USS Abraham Lincoln
    Ratings:
    +282
    good note from cal thomas about a maverick liberal in the House

    http://www.foxnews.com/story/0,2933,132900,00.html

    'I Am About to Praise a Liberal'
    Monday, September 20, 2004
    By Cal Thomas

    No, there's nothing wrong with your TV and you have not inadvertently tuned to one of the broadcast networks. This is still FOX News Channel.

    Congressman Chaka Fattah (search) of Pennsylvania has proposed eliminating the cumbersome and to most of us indecipherable tax code and replacing it with a consumption tax. Instead of individuals and corporations paying a tax on earnings, Fattah wants to tax what we buy, sell, trade or acquire.

    He estimates the current system costs the government $200 billion because of people who evade or break the law. And he notes that the top 27,000 earners of $500,000 or more pay little or no taxes legally.

    The Congressional Research Service estimates more than $53 trillion changes hands through transactions or purchases every year. That's more than 20 times the 2004 federal budget.

    Congressman Fatta says in order to protect the poor, transactions of $500 or less would be exempt and there may be other exemptions such as food. I like this idea.


    House Speaker Dennis Hastert has proposed eliminating the income tax and replacing it with a flat tax or value added tax. President Bush has said it's an interesting concept worth studying.

    Congressman Fattah criticizes Republicans for breaking decades of promises to make the tax code simpler. He is right to do so. Democrats, like Republicans, enjoy talking about reform, but don't do much about it. The tax code has allowed Members of Congress to perpetuate themselves in office by doling out tax breaks to campaign contributors and buying votes.

    And that's a tax-free Column One for this week.

    What do you think? Send your responses to: afterhours@foxnews.com
     
  2. Merlin1047
    Offline

    Merlin1047 Senior Member

    Joined:
    Mar 28, 2004
    Messages:
    3,500
    Thanks Received:
    449
    Trophy Points:
    48
    Location:
    AL
    Ratings:
    +450
    Bah. Have to give this one an emphatic thumbs-down.

    We already have consumption taxes. They're called sales taxes and they run around ten percent in many places.

    A consumption tax is an even more simple-minded approach than a flat tax. Neither will work. Consumption taxes are as regressive as sales taxes because they are the same thing. They tax low and middle income consumers at a much higher rate than the rich. Not only that, they are easily avoided by the rich, who will simply resort to purchasing luxury goods from overseas sources. Setting a threshold limit of $500 is simply window dressing to fool those who aren't paying much attention. Although it provides limited relief, its effect will be to make it even more difficult for the poor to purchase things like automobiles, appliances, furniture and homes.

    I agree that the current tax code is complex and convoluted. But it is still better than any of the proposed alternatives.

    Want to increase federal revenues? Institute a federal lottery. Yes, it has all the shortcomings of a sales or "consumption" tax, but at least it is voluntary and those with very limited incomes are not required to participate.
     
  3. NATO AIR
    Offline

    NATO AIR Senior Member

    Joined:
    Jun 25, 2004
    Messages:
    4,275
    Thanks Received:
    282
    Trophy Points:
    48
    Location:
    USS Abraham Lincoln
    Ratings:
    +282
    merlin, how can we fix or at least repair somewhat the tax code?
     
  4. MissileMan
    Offline

    MissileMan Senior Member

    Joined:
    Sep 11, 2004
    Messages:
    2,939
    Thanks Received:
    223
    Trophy Points:
    48
    Ratings:
    +223
    I've been in favor of eliminating the IRS and replacing income tax with a national sales tax for a long time. There are a lot of people out there who do not pay income tax, and not just rich people. Prostitutes, drug dealers, illegal aliens are all making money and not contributing to the tax base. All of these people spend money though. Get their taxes from them when they purchase goods. It also goes right to the heart of every Dems dream: higher taxes for the rich. If the rich man spends a million dollars, he will definitely be paying more tax than someone who spends a thousand.

    P.S. I'm not a Dem! :happy2:
     
  5. Merlin1047
    Offline

    Merlin1047 Senior Member

    Joined:
    Mar 28, 2004
    Messages:
    3,500
    Thanks Received:
    449
    Trophy Points:
    48
    Location:
    AL
    Ratings:
    +450
    HOLY MACKEREL! Trying to answer that question would have given Einstein an Excedrin headache.

    The problem with the current tax code is that it has become confusing and convoluted in an effort to nail down and detail those items of income which are exempt from taxation or those that are taxed at different rates. In other words, the devil is quite literally in the details.

    Those who support a flat tax claim that switching to that system would simplify the tax code. Personally, I believe that it will do no such thing, it will merely switch the emphasis of the code from stipulating what is not taxable to spelling out in great detail that which IS taxable. Proponents of the flat tax tend to ignore the fact that DEFINING INCOME will be even more difficult than defining which income is not taxable. Unless a strict and detailed code defining income is written, a flat tax will help the rich avoid taxation. For example, the CEO of ACME corporation makes five mil a year. When the flat tax kicks in, he simply reduces his "income" to 500,000. The balance he takes in "perks". His 34 room mansion is purchased for him by the corporation, his utilities, domestic staff, automobiles, yachts, vacations, medical & dental expenses and his children's tuition at Vassar and Princeton are paid by the corporation. The corporation even purchases his Mont Blanc pen sets. The result is that his actual income is the same, now it is simply in a different form.

    So, the next logical comment would be, "Well, that's easy, we'll just count all that as income". Ah, but not so fast, Gertrude. First, in order to quantify all those bennies as income, the tax code will have to be just as detailed and just as voluminous as the one we currently "enjoy". And remember the law of unintended consequences? Basically it says that if you adopt a law to target one specific area, it inevitably screws some innocent bystander. Here's what will happen - in an effort to get Mr. Rich's perk's into the tax code, many of the benefits working Americans enjoy will get sucked into the black hole along with Rich's hidden income. Does your employer provide health care benefits? Now they're taxable. Does your employer provide safety equipment at no cost? Could be taxable. How about that free meal you had at the company picnic? Ridiculous, you say? Remember, this is the IRS we're dealing with. Paid travel, per diem, expense accounts, company sponsored day care, perhaps even free parking in the company lot are all examples of things that will probably be taxable under the "flat" tax proposal.

    Which brings me to the other "benefit" claimed by supporters of a flat tax - equity, fairness and a lower rate for everyone. Poop. Mr. Rich can create an overseas corporation as a "consulting firm". The corporation can send Rich's multi-million dollar salary to that corporation. Sure, that's illegal, but so what? If Rich sets up his straw man in a country whose banking laws encourage these types of accounts, who will prove where that money really went?

    Next let's discuss the other myth about the "flat" tax - that we will pay less in taxes. Yes, we will pay a smaller percentage rate, but we will pay that percentage on far more income than most people suspect. The average value of an employer-provided family health care policy is between six hundred and eight hundred dollars PER MONTH. Add that to your income and see what you get. Now add all those other little bennies that most people think nothing about - and tax them. An annual income of fifty thousand can easily balloon to 75 to 80 thousand for "flat" taxation purposes.

    National sales tax - well that's regressive. Low-income wage earners pay a far greater percentage of their income than the rich. Let's say that Phillip Poorboy, making an annual salary of $20,000 buys a modest car for $15,000. He also pays a ten percent national sales tax, bringing the total to $16,500. The $1,500 tax Phil paid represents 7.5% of his annual income. Let's do the same transaction with Richard Rich. Dicky's income is 5 mil per year. He pays the same $1,500 tax on the same car. What could be fairer than that? Do the math. $1,500 is only .03%. That's three hundredths of one percent of Rich's annual income. That type of tax leads to class warfare. It taxes the poor at a disproportionate rate of their earnings and makes life even more difficult for those who can least afford it.

    So what solutions do we have? Well, first I would say that controlling spending is perhaps the best way to fiscal health. Unless spending is controlled, it does not matter how much money the government takes in. You can bet your ass that they will always find the means to fritter it away one hell of a lot faster than it ever comes in. So that has to be step one, otherwise there can be no solution.

    A healthy economy is always the best boon to governmental income. That's why there was a projected surplus during the latter years of the Clinton administration. Now before you libs get your panties wet - that was Reagan's and Bush Sr.'s economy we were enjoying - not Clinton's. Clinton's only economic strategy was to let Greenspan manage the economy while Clinton claimed the credit. Once the current economic trends bear fruit, federal income will improve to a healthier level.

    Increase tax on air travel. Currently air travel is so cheap that the folks who used to ride Greyhound are practically jet setters.

    Increase tax on public lands. Loggers and some large-scale cattle ranchers use huge tracts of publicly owned land and pay a mere pittance for the privilege. That land belongs to you and me and we should be getting market value for its use.

    Increase tax on heavy vehicles using our highways. Ever see those bragging signs on the back of 18-wheelers "This vehicle pays $50,000 in highway taxes every year"? Well whoopee-doo. It probably causes at least half a million in damage every year.

    Impose a federal sales tax on mail order and internet purchases. Keep it small, because it is a regressive tax, but two to three percent won't hurt most folks much.

    Force corporations with workers in foreign countries to pay a tax based on the number of workers employed offshore.

    Institute a federal lottery. Again, regressive but since participation is voluntary, I have no problem with that.

    Now there are lots of money savings devices we could employ such as dropping a nuke on the UN building but that is another topic.

    Anyway, that's some of my ideas. I freely admit I'm no economist and might be totally full of crap on the subject.
     
    • Thank You! Thank You! x 1
  6. NATO AIR
    Offline

    NATO AIR Senior Member

    Joined:
    Jun 25, 2004
    Messages:
    4,275
    Thanks Received:
    282
    Trophy Points:
    48
    Location:
    USS Abraham Lincoln
    Ratings:
    +282
    Those are some great ideas Merlin. Thanks for the explanation! I feel a bit more knowledgable about this now.
     
  7. MissileMan
    Offline

    MissileMan Senior Member

    Joined:
    Sep 11, 2004
    Messages:
    2,939
    Thanks Received:
    223
    Trophy Points:
    48
    Ratings:
    +223
    You really think Richy Rich is gonna buy the same $15,000 car as Phil? Probably not. In fact Dicky probably will buy 3 or 4 $60,000 automobiles. I also don't believe that a national sales tax would need to be any more than 1 or 2 % in order to be effective.
     
  8. Merlin1047
    Offline

    Merlin1047 Senior Member

    Joined:
    Mar 28, 2004
    Messages:
    3,500
    Thanks Received:
    449
    Trophy Points:
    48
    Location:
    AL
    Ratings:
    +450
    That's not the point. The point is that he pays far less in taxes when the tax is computed as a percentage of his income.
     
  9. CSM
    Offline

    CSM Senior Member

    Joined:
    Jul 7, 2004
    Messages:
    6,907
    Thanks Received:
    708
    Trophy Points:
    48
    Location:
    Northeast US
    Ratings:
    +708
    I agree with a lot of what Merlin said. I am no economist either, but it seems to me that government spending simply has to be brought under control. I know that when I look in my little checkbook, two things are very clear:

    1) I can only spend so much money because I only make so much money. I dont buy things based on the lottery ticket I bought this week or the raise I may get next month.

    2) I have to prioritize and put what is most important to me first. Those new computer games can really be enicing to me, but I know if I want them I have to SAVE for them.

    Obviously, I could buy a lot of stuff on credit card, but if I do, I know I will have to pay for them eventually and at a very high interest rate. The US government should have a checkbook with a public ledger. None of this "secret project" crap. The money they get is the money they have, PERIOD. No credit cards for the Federal budget.
     
  10. musicman
    Offline

    musicman Senior Member

    Joined:
    Mar 3, 2004
    Messages:
    5,171
    Thanks Received:
    533
    Trophy Points:
    48
    Location:
    Ohio
    Ratings:
    +533
    I agree. With the exception of clearly defined emergencies, they ought to have to live within their means, like everybody else.
     

Share This Page