Taxing consumption versus taxing earnings?

[Oddball]

Who pays for the military?

Imposts and duties.....As opposed to tariffs, which are protectionist.

Then, we can greatly reduce the spending on a standing military by closing the scads of bases America is maintaining on foreign soil, and returning to a state militia based form of national security and border enforcement.

Please tell us the difference between duty and tariff. They're both imposed on things from abroad, so how can one be protectionist and the other not?

Intent.

Imposts and duties are levied for the purpose of funding specific legitimate federal functions, while tariffs are imposed to curry favor with and mollify whiners who can't compete.

 

[Immanuel]

You are right, the fair tax does nothing to address government spending. Neither does the current income tax system nor the flat tax.

I don't understand why that is your reason for being against The Fair Tax.

Immie

Because it's an unapportioned direct federal tax.

Because it's WAY too high.

Because its claim of being "revenue neutral" assumes that the feds will keep running idiotic welfare wealth redistribution scams, which need to be ended altogether.

Because it does absolutely nothing to address the massive bloat of federal spending and bureaucracy.

And that's just off the cuff.

Way too high? Then cut spending and lower it.

Revenue Neutral? All that means is that it is not designed upon inactment to be a tax cut or an increase in taxes. It is designed to provide roughly the same amount of taxes in the year after it is inacted as the year before. It has nothing at all to do with assuming what the government will or will not do. Unfortunately, it does not address the redistribution of wealth.

If welfare should be eliminated or modified then that needs to be done separately from a change in the tax laws.

And, yes, you are right, it does nothing to address the overblown behemoth we now call our government. Again, that is something that should be addressed in other bills.

But you are right, Congress won't enact the Fair Tax. That is because under the current income tax system they can sell tax incentives to the highest bidder. They will never give that up and unfortunately, we the taxpayers won't lift a finger to stop them. That means you and me together.

Got a better idea? I'm all ears. But please don't tell me that the current system is the best just because it is the current system.

Immie

 

[gallantwarrior]

The fairest are user fees...Fuel taxes and hunting/fishing licenses, for example.

That's already being done.

 

[g5000]

The oxymoronic "fair tax" is a big fat joke, that does absolutely nothing to address the completely out of control spending that's going on at all levels.

If the Fair Tax is revenue neutral, Congress would have to raise taxes to pay for increased spending. And as I said, the best part about the Fair Tax is that everyone would immediately know their taxes have been raised, and would feel the effects immediately. There would be no way to sneak a tax increase on the people.

You don't think that would amplify the feedback loop?

 

[Oddball]

The oxymoronic "fair tax" is a big fat joke, that does absolutely nothing to address the completely out of control spending that's going on at all levels.

If the Fair Tax is revenue neutral, Congress would have to raise taxes to pay for increased spending. And as I said, the best part about the Fair Tax is that everyone would immediately know their taxes have been raised, and would feel the effects immediately. There would be no way to sneak a tax increase on the people.

You don't think that would amplify the feedback loop?

Don't care...It's an unapportioned direct federal tax, that is too damned high in the first place.

Secondly, we need to get the feds completely out of the economic meddling and manipulation business altogether...Something that the "fair tax" also continues to fund.

 

[gallantwarrior]

Income taxes tax good behavior (production).

I am coming around to the Fair Tax, which taxes consumption. I kind of support something like the GST they have in Canada, but the Fair Tax seems a lot simpler, cheaper, and more transparent, and tougher to cheat.

The Fair Tax is a national sales tax of sorts.

Under the Fair Tax, everyone gets a "prebate" to offset the regressive nature of a sales tax.

The Fair Tax eliminates the need for Social Security tax, income tax, Medicare tax, death tax, capital gains tax, EVERY tax. Therefore, it eliminates a shitload of collection points. Less paperwork for employers and everyone else except retailers. And the IRS can shrink to a tiny fraction of its current size. And you don't need H&R block to do your taxes any more.

It also gives exporters an advantage since exports aren't taxed at all. Business to business transactions are not taxed like they are in a VAT.

To cheat on the Fair Tax, both the buyer and seller would have to agree to cheat, and I don't see that happening at Best Buy.

Plus, anyone who earns their income illegally would have to pay a sales tax.

The best part is that everyone would know instantly when Congress had raised their taxes, and would feel the effects immediately.

There would be no hidden tax increases.

And nobody, not even Big Oil or Wall Street, gets a carve-out.

You get the message. The Fair Tax is NOT regressive. The Fair Tax is unavoidable (no way to get around paying it). The Fair Tax would drastically reduce the size of the IRS. The Fair Tax would eliminate the need for the government to know how much income you make.

There's not much anybody could do to make it any fairer.

Since it reduces the size of government and reduces the control that government has over the people...IT WILL NEVER HAPPEN! Liberals will fight tooth and nail to maintain BIG government! Liberalism is a mental disorder.

I'd fight it because the rich wouldn't be paying their fair share. If lower taxes really led to more jobs, sure. There's just no evidence that that's the case.

How do you figure? Since the "rich" would be most likely buying more stuff, and more high-dollar items, their share of the tax would reflect that increase in consumption. People with less money spend less, and subsequently pay less tax.

 

[Oddball]

The fairest are user fees...Fuel taxes and hunting/fishing licenses, for example.

That's already being done.

Yes, it's already being done....Point being that taxes on sales, consumption and productive activities, as a baseline argument, continues with the assumption that funding needs to be continued for programs that are entirely beyond the bounds of the legitimate functions of governance.

 

[Dont Taz Me Bro]

At present, both consumption and earnings are subject to taxation (in most cases). And as both are structured presently, consumption taxes are regressive and earnings taxes are progressive.

Why do you feel consumption taxes are regressive?

 

[Oddball]

You are right, the fair tax does nothing to address government spending. Neither does the current income tax system nor the flat tax.

I don't understand why that is your reason for being against The Fair Tax.

Immie

Because it's an unapportioned direct federal tax.

Because it's WAY too high.

Because its claim of being "revenue neutral" assumes that the feds will keep running idiotic welfare wealth redistribution scams, which need to be ended altogether.

Because it does absolutely nothing to address the massive bloat of federal spending and bureaucracy.

And that's just off the cuff.

Way too high? Then cut spending and lower it.

Revenue Neutral? All that means is that it is not designed upon inactment to be a tax cut or an increase in taxes. It is designed to provide roughly the same amount of taxes in the year after it is inacted as the year before. It has nothing at all to do with assuming what the government will or will not do. Unfortunately, it does not address the redistribution of wealth.

If welfare should be eliminated or modified then that needs to be done separately from a change in the tax laws.

And, yes, you are right, it does nothing to address the overblown behemoth we now call our government. Again, that is something that should be addressed in other bills.

But you are right, Congress won't enact the Fair Tax. That is because under the current income tax system they can sell tax incentives to the highest bidder. They will never give that up and unfortunately, we the taxpayers won't lift a finger to stop them. That means you and me together.

Got a better idea? I'm all ears. But please don't tell me that the current system is the best just because it is the current system.

Immie

The better idea is to cut spending to the point that a direct federal tax isn't even needed.

We won't even need to pass any constitutional amendments to do it.

 

[gallantwarrior]

Peace out, gang! (sigh)
I gotta go teach my class.
Back later....

 

[manifold]

At present, both consumption and earnings are subject to taxation (in most cases). And as both are structured presently, consumption taxes are regressive and earnings taxes are progressive.

Why do you feel consumption taxes are regressive?

It's not a feeling, it's a fact.

The $30 in taxes a laborer pays to gas up his car is a considerably higher percentage of his take home pay than it is for the millionaire investment banker.

 

[Dont Taz Me Bro]

At present, both consumption and earnings are subject to taxation (in most cases). And as both are structured presently, consumption taxes are regressive and earnings taxes are progressive.

Why do you feel consumption taxes are regressive?

It's not a feeling, it's a fact.

The $30 in taxes a laborer pays to gas up his car is a considerably higher percentage of his take home pay than it is for the millionaire investment banker.

That's not the same thing. You're talking about a flat figure in your example. A consumption tax is a percentage. 10% of $30,000 is far less than 10% of $300,000.

 

[Immanuel]

The oxymoronic "fair tax" is a big fat joke, that does absolutely nothing to address the completely out of control spending that's going on at all levels.

If the Fair Tax is revenue neutral, Congress would have to raise taxes to pay for increased spending. And as I said, the best part about the Fair Tax is that everyone would immediately know their taxes have been raised, and would feel the effects immediately. There would be no way to sneak a tax increase on the people.

You don't think that would amplify the feedback loop?

Don't care...It's an unapportioned direct federal tax, that is too damned high in the first place.

Secondly, we need to get the feds completely out of the economic meddling and manipulation business altogether...Something that the "fair tax" also continues to fund.

I'm not so certain... oh the hell with, I know I don't agree with you here.

The way it is now Congress meddles in and manipulates our economy by brokering tax incentives. If everything was taxed, then this particular benefit of Congress would be eiliminated completely. That happens to be one of the most valuable aspects of the Fair Tax in my book.

Immie

 

[Immanuel]

Because it's an unapportioned direct federal tax.

Because it's WAY too high.

Because its claim of being "revenue neutral" assumes that the feds will keep running idiotic welfare wealth redistribution scams, which need to be ended altogether.

Because it does absolutely nothing to address the massive bloat of federal spending and bureaucracy.

And that's just off the cuff.

Way too high? Then cut spending and lower it.

Revenue Neutral? All that means is that it is not designed upon inactment to be a tax cut or an increase in taxes. It is designed to provide roughly the same amount of taxes in the year after it is inacted as the year before. It has nothing at all to do with assuming what the government will or will not do. Unfortunately, it does not address the redistribution of wealth.

If welfare should be eliminated or modified then that needs to be done separately from a change in the tax laws.

And, yes, you are right, it does nothing to address the overblown behemoth we now call our government. Again, that is something that should be addressed in other bills.

But you are right, Congress won't enact the Fair Tax. That is because under the current income tax system they can sell tax incentives to the highest bidder. They will never give that up and unfortunately, we the taxpayers won't lift a finger to stop them. That means you and me together.

Got a better idea? I'm all ears. But please don't tell me that the current system is the best just because it is the current system.

Immie

The better idea is to cut spending to the point that a direct federal tax isn't even needed.

We won't even need to pass any constitutional amendments to do it.

And you say that the Fair Tax isn't going to happen?

Immie

 

[manifold]

Why do you feel consumption taxes are regressive?

It's not a feeling, it's a fact.

The $30 in taxes a laborer pays to gas up his car is a considerably higher percentage of his take home pay than it is for the millionaire investment banker.

That's not the same thing. You're talking about a flat figure in your example. A consumption tax is a percentage. 10% of $30,000 is far less than 10% of $300,000.

The rate may be flat, but an apples to apples determination of regressive/progressive is based on the result, which is calculated by dividing the taxes paid by one's disposable income. For example: $30 in gas taxes, times one fill per week = $1,560 in gas taxes per year, paid by both the laborer and the investment banker.

$1,560 / $30,000 = 5.2% for the laborer
$1,560 / $300,000 = 0.52% for the investment banker

^That's regressive, and coincidentally the oft stated and strongest argument for a progressive income tax structure to balance things out a bit.

 

[Oddball]

Way too high? Then cut spending and lower it.

Revenue Neutral? All that means is that it is not designed upon inactment to be a tax cut or an increase in taxes. It is designed to provide roughly the same amount of taxes in the year after it is inacted as the year before. It has nothing at all to do with assuming what the government will or will not do. Unfortunately, it does not address the redistribution of wealth.

If welfare should be eliminated or modified then that needs to be done separately from a change in the tax laws.

And, yes, you are right, it does nothing to address the overblown behemoth we now call our government. Again, that is something that should be addressed in other bills.

But you are right, Congress won't enact the Fair Tax. That is because under the current income tax system they can sell tax incentives to the highest bidder. They will never give that up and unfortunately, we the taxpayers won't lift a finger to stop them. That means you and me together.

Got a better idea? I'm all ears. But please don't tell me that the current system is the best just because it is the current system.

Immie

The better idea is to cut spending to the point that a direct federal tax isn't even needed.

We won't even need to pass any constitutional amendments to do it.

And you say that the Fair Tax isn't going to happen?

Immie

I'd say it ranks higher on the scale of likelihood -howsoever unlikely that may be- than first repealing then passing two constitutional amendments.

 

[asaratis]

Income taxes tax good behavior (production).

I am coming around to the Fair Tax, which taxes consumption. I kind of support something like the GST they have in Canada, but the Fair Tax seems a lot simpler, cheaper, and more transparent, and tougher to cheat.

The Fair Tax is a national sales tax of sorts.

Under the Fair Tax, everyone gets a "prebate" to offset the regressive nature of a sales tax.

The Fair Tax eliminates the need for Social Security tax, income tax, Medicare tax, death tax, capital gains tax, EVERY tax. Therefore, it eliminates a shitload of collection points. Less paperwork for employers and everyone else except retailers. And the IRS can shrink to a tiny fraction of its current size. And you don't need H&R block to do your taxes any more.

It also gives exporters an advantage since exports aren't taxed at all. Business to business transactions are not taxed like they are in a VAT.

To cheat on the Fair Tax, both the buyer and seller would have to agree to cheat, and I don't see that happening at Best Buy.

Plus, anyone who earns their income illegally would have to pay a sales tax.

The best part is that everyone would know instantly when Congress had raised their taxes, and would feel the effects immediately.

There would be no hidden tax increases.

And nobody, not even Big Oil or Wall Street, gets a carve-out.

You get the message. The Fair Tax is NOT regressive. The Fair Tax is unavoidable (no way to get around paying it). The Fair Tax would drastically reduce the size of the IRS. The Fair Tax would eliminate the need for the government to know how much income you make.

There's not much anybody could do to make it any fairer.

Since it reduces the size of government and reduces the control that government has over the people...IT WILL NEVER HAPPEN! Liberals will fight tooth and nail to maintain BIG government! Liberalism is a mental disorder.

I'd fight it because the rich wouldn't be paying their fair share. If lower taxes really led to more jobs, sure. There's just no evidence that that's the case.

Incorrect! The rich would definitely pay their "fair share"....The tax would be roughly 23% on everything consumers buy.

Buy a $3,000,000 (tax included) yacht...pay $460,000 in tax! You sound as if you think the rich will stop buying the expensive things that the poor cannot afford.

The prices of almost everything would remain about the same as they are when the change begins. Imbedded taxes would go away...to be replaced by the 23 percent tax that would be included in the price of things.

 

[Decepticon]

The fairest are user fees...Fuel taxes and hunting/fishing licenses, for example.

They don't broaden the base much,but then people that don't fish,don't help support the ones that do.

Don't think we will ever have a tax thats completely fair to everyone.

This isn't about broadening the base...It's about keeping gubmint in its box.

Taxes on incomes and sales just give politicians more money to expand bureaucratic meddling and to try and buy votes.

At least when politicians "buy" votes they're responding to the needs of their CONSTITUENCY.
When corporations buy access to politicians through campaign funding, they short circuit WHO the politician is supposed to be responsive to.

I'd rather have politicians pandering to voters than politicians pandering to campaign contributors.
I can't compete in the area of funding campaigns, but I CAN compete with my vote.

 

[g5000]

It's not a feeling, it's a fact.

The $30 in taxes a laborer pays to gas up his car is a considerably higher percentage of his take home pay than it is for the millionaire investment banker.

That's not the same thing. You're talking about a flat figure in your example. A consumption tax is a percentage. 10% of $30,000 is far less than 10% of $300,000.

The rate may be flat, but an apples to apples determination of regressive/progressive is based on the result, which is calculated by dividing the taxes paid by one's disposable income. For example: $30 in gas taxes, times one fill per week = $1,560 in gas taxes per year, paid by both the laborer and the investment banker.

$1,560 / $30,000 = 5.2% for the laborer
$1,560 / $300,000 = 0.52% for the investment banker

^That's regressive, and coincidentally the oft stated and strongest argument for a progressive income tax structure to balance things out a bit.

You must have completely skipped several of my posts where I explained how the rebate system works to offset the regressiveness of a sales tax.

As I explained to someone else, a family of four would get back about $442 every month. Not just poor families. Everyone.

Using your own argument, that $442 is a larger percentage of the laborer's income than that of an investment banker, yes?

The laborer buys 30 bucks of gas and some groceries and gets back $442.

The investment banker buys a $50 million airplane and pays $11.5 million in tax on it, and gets back...$442.

See how that works?

 

[Immanuel]

You get the message. The Fair Tax is NOT regressive. The Fair Tax is unavoidable (no way to get around paying it). The Fair Tax would drastically reduce the size of the IRS. The Fair Tax would eliminate the need for the government to know how much income you make.

There's not much anybody could do to make it any fairer.

Since it reduces the size of government and reduces the control that government has over the people...IT WILL NEVER HAPPEN! Liberals will fight tooth and nail to maintain BIG government! Liberalism is a mental disorder.

I'd fight it because the rich wouldn't be paying their fair share. If lower taxes really led to more jobs, sure. There's just no evidence that that's the case.

Incorrect! The rich would definitely pay their "fair share"....The tax would be roughly 23% on everything consumers buy.

Buy a $3,000,000 (tax included) yacht...pay $460,000 in tax! You sound as if you think the rich will stop buying the expensive things that the poor cannot afford.

The prices of almost everything would remain about the same as they are when the change begins. Imbedded taxes would go away...to be replaced by the 23 percent tax that would be included in the price of things.

But, if the yacht is bought from a private owner then they would not be taxed on it. If instead of buying a new yacht from the manufacturer for $3,000,000, they bought a $3,450,000 yacht from their neighbor they can save $10,000 and presumably get a better yacht.

Immie