Fixing Tax Loopholes, 51% of Americans Pay NO Incomes Taxes

[Big Fitz]

The poor would be hit just as hard as the rich, as they consume, by nature, less and cheaper items.

That's one of the main reasons why a 21% sales tax would never work. You want to complain about high taxation on corporations and the rich but don't mind implementing a system where the poor would be systematically destroyed. 21% of the poor's income and 21% of the rich's income are not even nearly the same.

So for you to say they would be hit just as hard is such a pathetic joke that I can't even laugh at how stupid it is.

It's even worse than that. Poor people spend a much higher percentage of their income, so the effective rate paid by the poor would be significantly higher.

So we have a slightly regressive tax. What a surprise. Aren't ALL sales taxes and consumption taxes somewhat regressive?

Are you now going to argue for the elimination of sales taxes?

 

[Polk]

No. The taxes it would replace are already baked into the price that you pay. You realize corporate taxes are actually in the price of the product? Your income taxes are paid to you through your salary, which is generated by your company's sales, they actually charge for that. Investment taxes ditto. It would actually lower prices because so are all the tax lawyers and disincentives to economic efficiencies created by our tax code. And everyone would pay when they spend, including those who currently evade income taxes.

Talk about magical thinking.

What did I say that's wrong?

All of it. Saying that the transition to the "Fairtax" would leave price levels unchanged would mean that money is appearing from nothingness.

 

[kaz]

Wow, going to a message board and rather then arguing and backing up your points you tell everyone to prove theirs. You live a very frustrated life, don't you?

There's nothing to argue or back up when she accuses me of sourcing something. All I can say is that I didn't because I didn't. It's up to her to prove her claim in the first place, something she never did.

I argue and back up my points all the time. So no need to worry about my life.

All the time doesn't include now because I challenged you that you don't understand the Fair Tax and asked you a simple question to establish it.

Name a tax other then the death tax which is not currently baked into the price of products that you buy today. That is the basis of the entire discussion.

 

[WillowTree]

Talk about magical thinking.

What did I say that's wrong?

All of it. Saying that the transition to the "Fairtax" would leave price levels unchanged would mean that money is appearing from nothingness.

How much does it cost us to run the IRS?

 

[Moonglow]

13.3 billion

 

[Polk]

good incentive to SAVE

Without getting in to the negative economic impact of a huge shift toward saving, it's also worth noting that it's not practical. Someone making 20k a year doesn't have any other choice but to spend the vast majority of their income.

I guess you assume you're talking to someone who has never been dirt poor? Right? Because you are wrong. But,, I managed to save a little money and I'll tell ya right up front.. I didn't piss it away on wall street or in the gambling halls,,, every red cent I've ever saved is still in da bank. I'll never be rich, but I'll hopefully never be dirt poor again.

Being able to save a few pennies here and there isn't really relevant. Poor people face tradeoffs the wealthy don't face. Not matter how strong your desire to save, rent/mortgage was still due every money and you still had to feed yourself.

 

[Big Fitz]

Flat tax and Fair tax.

21% regressive sales tax, that's fair alright.

Are you speaking of a VAT? Sure why not? As long as it replaces Federal Income Tax. worth a try. No rebates, no subsidies. Everyone has skin in the game. We could do away with the entire IRS. Think what a savings that would be.

Good question. The Fair Tax isn't a VAT because the Fair Tax is only charged to end consumers in the primary market sale of the product. No steps are taxed and no secondary market sales of items are taxed. The problem with a VAT is that it taxes every step in the development of a product, which would be double taxation since the end product is taxed again. The VAT also is counter to the Fair Tax in that you once again start having advantages or disadvantages in production driven not by efficiency but by tax law. The purpose of a Fair Tax is not to reduce taxes collected, it's to make our economy more efficient.

The thing is about the 'fair tax' is that I don't trust it to be properly administered and become a massive VAT.

 

[Polk]

No. The taxes it would replace are already baked into the price that you pay. You realize corporate taxes are actually in the price of the product? Your income taxes are paid to you through your salary, which is generated by your company's sales, they actually charge for that. Investment taxes ditto. It would actually lower prices because so are all the tax lawyers and disincentives to economic efficiencies created by our tax code. And everyone would pay when they spend, including those who currently evade income taxes.

Talk about magical thinking.

Not quite. Kaz makes a valid point. With taxes reduced on manufacturers and suppliers, it could end up being a wash in MOST cases, but not all if the consumption tax was commiserate with the ingrained taxes from our current system (payroll, FICA, Unemployment on all parties involved from resource to sale).

So, there's something to it.

There is something to it, but Kaz widely overstates the case. It would certainly be true that the proposal would increase the price by a lower percentage than the percentage of the tax, but it's not true that prices would remain stable. What would be peeled out of prices are taxes firms pay (corporate income tax, employer share of FICA).

 

[Polk]

What did I say that's wrong?

All of it. Saying that the transition to the "Fairtax" would leave price levels unchanged would mean that money is appearing from nothingness.

How much does it cost us to run the IRS?

Not much. The IRS operated on a $12 billion budget in FY2010.

Besides, how much of a bureaucracy do you think it will take for the government to monitor every sales transaction in the nation?

 

[kaz]

That's one of the main reasons why a 21% sales tax would never work. You want to complain about high taxation on corporations and the rich but don't mind implementing a system where the poor would be systematically destroyed. 21% of the poor's income and 21% of the rich's income are not even nearly the same.

So for you to say they would be hit just as hard is such a pathetic joke that I can't even laugh at how stupid it is.

It's even worse than that. Poor people spend a much higher percentage of their income, so the effective rate paid by the poor would be significantly higher.

So we have a slightly regressive tax. What a surprise. Aren't ALL sales taxes and consumption taxes somewhat regressive?

Are you now going to argue for the elimination of sales taxes?

All taxes are regressive. They are built into the price of products that we buy, which means the higher a percent of your income you spend the higher your real tax rate is. Liberals think when you squeeze a balloon that your fingers go in and nothing happens to the rest of the balloon. People don't get degrees and skills and in order to give the money to government, they do to increase their take home pay. That means when you raise their taxes, their wages go up across the board to compensate for it. They pay the taxes that were collected by their company and paid to them, but the company paid it by charging it to their consumers. So however much of your money you spend, the higher your taxes are as a percent. It's unavoidable. That means the poor are paying the most for the economic inefficiency of our current system as well. So eliminating that disproportionately helps the poor. The Fair Tax is actually fairest to the poor. And it's least fair to liberals engaging in class warfare because it takes their weapons away.

 

[iamwhatiseem]

Meanwhile, a large portion of Corporations also don't pay taxes due to loopholes and exemptions. But we can't close those.

Certainly not with Obama as President.
Consider:
G.E. (which paid zero taxes) - their CEO Jeffery Immelt who during his tenure has shipped 39,000 jobs overseas...not one CEO in America can claim this high dishoner - YET - Obama put him as chairman on his "jobs council" - whose responsibility is to give advice to the President on CREATING jobs.

Can you say...what??

Baked into GE's prices are all their employees income taxes, social security taxes, medicare taxes, unemployment taxes, the taxes they paid for the products they buy with their salaries, the taxes of GE vendors who paid corporate taxes as well as all the other taxes I mentioned. Taxes on dividends, capital gains, debt payments are also all in GE prices and GE collected massive sales taxes. To say they "didn't pay" any tax is what's tripping. They generated hundreds of billions in tax dollars.

So your saying they should pay no income taxes?
Personally - I believe businesses should have zero income tax burden - am I getting you confused with someone else?

 

[kaz]

Talk about magical thinking.

Not quite. Kaz makes a valid point. With taxes reduced on manufacturers and suppliers, it could end up being a wash in MOST cases, but not all if the consumption tax was commiserate with the ingrained taxes from our current system (payroll, FICA, Unemployment on all parties involved from resource to sale).

So, there's something to it.

There is something to it, but Kaz widely overstates the case. It would certainly be true that the proposal would increase the price by a lower percentage than the percentage of the tax, but it's not true that prices would remain stable. What would be peeled out of prices are taxes firms pay (corporate income tax, employer share of FICA).

As I said, those taxes are part of the Fair Tax as well and they are part of the price you pay for products today. There is no difference between that and other taxes.

And prices would go down because of the reduction of economic inefficiency. Even moreso over time.

 

[kaz]

Certainly not with Obama as President.
Consider:
G.E. (which paid zero taxes) - their CEO Jeffery Immelt who during his tenure has shipped 39,000 jobs overseas...not one CEO in America can claim this high dishoner - YET - Obama put him as chairman on his "jobs council" - whose responsibility is to give advice to the President on CREATING jobs.

Can you say...what??

Baked into GE's prices are all their employees income taxes, social security taxes, medicare taxes, unemployment taxes, the taxes they paid for the products they buy with their salaries, the taxes of GE vendors who paid corporate taxes as well as all the other taxes I mentioned. Taxes on dividends, capital gains, debt payments are also all in GE prices and GE collected massive sales taxes. To say they "didn't pay" any tax is what's tripping. They generated hundreds of billions in tax dollars.

So your saying they should pay no income taxes?
Personally - I believe businesses should have zero income tax burden - am I getting you confused with someone else?

I think you are confusing me. I oppose all corporate taxes as well. Yes, I am saying GE should pay no corporate tax.

 

[WillowTree]

Without getting in to the negative economic impact of a huge shift toward saving, it's also worth noting that it's not practical. Someone making 20k a year doesn't have any other choice but to spend the vast majority of their income.

I guess you assume you're talking to someone who has never been dirt poor? Right? Because you are wrong. But,, I managed to save a little money and I'll tell ya right up front.. I didn't piss it away on wall street or in the gambling halls,,, every red cent I've ever saved is still in da bank. I'll never be rich, but I'll hopefully never be dirt poor again.

Being able to save a few pennies here and there isn't really relevant. Poor people face tradeoffs the wealthy don't face. Not matter how strong your desire to save, rent/mortgage was still due every money and you still had to feed yourself.

It's relevant to me. And honey those pennies add up. And then you get to pay taxes on the interest.

 

[kaz]

All of it. Saying that the transition to the "Fairtax" would leave price levels unchanged would mean that money is appearing from nothingness.

How much does it cost us to run the IRS?

Not much. The IRS operated on a $12 billion budget in FY2010.

Besides, how much of a bureaucracy do you think it will take for the government to monitor every sales transaction in the nation?

The IRS does that today, it's part of corporate tax returns. But even if it didn't, you're seriously arguing it would be more expensive to track revenue of products sold, which is just the price charged for sales, then it is to actually calculate "profit" which involves both revenue and all costs and the formulas for calculating profit? And all personal returns are completely gone? Seriously?

 

[Wry Catcher]

The Fair Tax would cause an economic boom and restore our privacy which is being shredded by the IRS. The only downside of the Fair Tax is it can't be used as a tool to wage war on evil successful people and fascist corporations, but nothing's perfect.

I love the names you guys come up with this stuff. The Fair Tax isn't fair. A 21% sales tax is not going to cause an economic boom.

Thanks, but I didn't actually name it. All taxes come out of sales already. Corporate taxes, income taxes, investment taxes, sales taxes. If we replace a myriad of taxes and the overhead that go with them and replace them with a tax that raises the same revenue only without all the accompanying overhead, then yes, that will trigger a boom. The cost of people and businesses complying with all the tax laws and the disincentives our tax laws provide to efficiency alone would dramatically drop prices. It would also make our enormous cash based underground economy taxpayers.

What is fair?

I find it hard to believe taxes can generate so much ignorant speculation. Few want to pay taxes, and those that do want the taxes to benefit them, not necessarily anyone else.

Taxes and fees take up a good deal of the income of the average wage earner in America. Everyone whines about raising taxes yet there is no hue and cry when banks raise fees and interest rates on loans, and still pay historically low interest on savings.

Some want a simple tax, everyone pays 10% of all sources of income without any deductions. What might be the consequences of such a plan? Think real hard. How many people are employed in the financial services industry? Hell, Mitt Romney might have to actually work, yikes. Imagine the howl when organized religion is faced with obtaining donations when the donation is no longer deductable.

And what of the spread between the haves and have nots? Imagine in ten years how much wider the spread between what the Koch Brothers get to keep and you get to keep with this 'fair' tax. Not only wealth, but the influence brothers Kock will have thanks to the collective 'wisdom' of Messers. Roberts, Alito, Thomas, Scalia and Kennedy.

Fools march in and join the cocophony of thoughtless rhetoric from the New Right. Be careful what you wish for, plutocracy is not the way to greater freedom and liberty.

 

[iamwhatiseem]

Baked into GE's prices are all their employees income taxes, social security taxes, medicare taxes, unemployment taxes, the taxes they paid for the products they buy with their salaries, the taxes of GE vendors who paid corporate taxes as well as all the other taxes I mentioned. Taxes on dividends, capital gains, debt payments are also all in GE prices and GE collected massive sales taxes. To say they "didn't pay" any tax is what's tripping. They generated hundreds of billions in tax dollars.

So your saying they should pay no income taxes?
Personally - I believe businesses should have zero income tax burden - am I getting you confused with someone else?

I think you are confusing me. I oppose all corporate taxes as well. Yes, I am saying GE should pay no corporate tax.

There is someone else that has a similar Avatar as yours I think I am confsing you with that person. They are one of the "tax the wealthy" advocates - thus why I was surprised to see your response thinking it was the other guy.

AT any rate - absolutely - corporations should have zero income tax liability in the same way they pay no sales tax on manufacturing processes. ...course this kind of talk sends liberals into convulsions.

 

[kaz]

Are you speaking of a VAT? Sure why not? As long as it replaces Federal Income Tax. worth a try. No rebates, no subsidies. Everyone has skin in the game. We could do away with the entire IRS. Think what a savings that would be.

Good question. The Fair Tax isn't a VAT because the Fair Tax is only charged to end consumers in the primary market sale of the product. No steps are taxed and no secondary market sales of items are taxed. The problem with a VAT is that it taxes every step in the development of a product, which would be double taxation since the end product is taxed again. The VAT also is counter to the Fair Tax in that you once again start having advantages or disadvantages in production driven not by efficiency but by tax law. The purpose of a Fair Tax is not to reduce taxes collected, it's to make our economy more efficient.

The thing is about the 'fair tax' is that I don't trust it to be properly administered and become a massive VAT.

I see your point, better to stick with the IRS...

 

[kaz]

So your saying they should pay no income taxes?
Personally - I believe businesses should have zero income tax burden - am I getting you confused with someone else?

I think you are confusing me. I oppose all corporate taxes as well. Yes, I am saying GE should pay no corporate tax.

There is someone else that has a similar Avatar as yours I think I am confsing you with that person. They are one of the "tax the wealthy" advocates - thus why I was surprised to see your response thinking it was the other guy.

AT any rate - absolutely - corporations should have zero income tax liability in the same way they pay no sales tax on manufacturing processes. ...course this kind of talk sends liberals into convulsions.

I'm for taxing the wealthy, but only as citizens like everyone else. I'm opposed to punishing the wealthy. I know that's what you mean, just poking you.

 

[kaz]

I love the names you guys come up with this stuff. The Fair Tax isn't fair. A 21% sales tax is not going to cause an economic boom.

Thanks, but I didn't actually name it. All taxes come out of sales already. Corporate taxes, income taxes, investment taxes, sales taxes. If we replace a myriad of taxes and the overhead that go with them and replace them with a tax that raises the same revenue only without all the accompanying overhead, then yes, that will trigger a boom. The cost of people and businesses complying with all the tax laws and the disincentives our tax laws provide to efficiency alone would dramatically drop prices. It would also make our enormous cash based underground economy taxpayers.

What is fair?

I find it hard to believe taxes can generate so much ignorant speculation. Few want to pay taxes, and those that do want the taxes to benefit them, not necessarily anyone else.

Taxes and fees take up a good deal of the income of the average wage earner in America. Everyone whines about raising taxes yet there is no hue and cry when banks raise fees and interest rates on loans, and still pay historically low interest on savings.

Some want a simple tax, everyone pays 10% of all sources of income without any deductions. What might be the consequences of such a plan? Think real hard. How many people are employed in the financial services industry? Hell, Mitt Romney might have to actually work, yikes. Imagine the howl when organized religion is faced with obtaining donations when the donation is no longer deductable.

And what of the spread between the haves and have nots? Imagine in ten years how much wider the spread between what the Koch Brothers get to keep and you get to keep with this 'fair' tax. Not only wealth, but the influence brothers Kock will have thanks to the collective 'wisdom' of Messers. Roberts, Alito, Thomas, Scalia and Kennedy.

Fools march in and join the cocophony of thoughtless rhetoric from the New Right. Be careful what you wish for, plutocracy is not the way to greater freedom and liberty.

No one's arguing we shouldn't have any taxes, this is completely irrelevant to the discussion.