Taxing consumption versus taxing earnings?

[g5000]

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

Now you are really reaching and becoming disingenuous. Do you think no new yachts will ever be made again?

 

[Immanuel]

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

Now you are really reaching and becoming disingenuous. Do you think no new yachts will ever be made again?

Remember, I am for the Fair Tax.

No, I think new yachts will continue to be made and sold, however, to compete with that little aspect of the law that I mentioned, I believe that there will be an adjustment in the costs of those new yachts.

Immie

 

[manifold]

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.

Actually, I wasn't responding to you nor was I addressing the Fair Tax rebate at all.

But thanks all the same.

 

[g5000]

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

Now you are really reaching and becoming disingenuous. Do you think no new yachts will ever be made again?

Remember, I am for the Fair Tax.

No, I think new yachts will continue to be made and sold, however, to compete with that little aspect of the law that I mentioned, I believe that there will be an adjustment in the costs of those new yachts.

Immie

Why would there be? With all other taxes eliminated, the wealthy would have more disposable income.

 

[Immanuel]

Now you are really reaching and becoming disingenuous. Do you think no new yachts will ever be made again?

Remember, I am for the Fair Tax.

No, I think new yachts will continue to be made and sold, however, to compete with that little aspect of the law that I mentioned, I believe that there will be an adjustment in the costs of those new yachts.

Immie

Why would there be? With all other taxes eliminated, the wealthy would have more disposable income.

Do you really not understand the idea of competition?

Do you really think that rich men are not frugal with there money?

If they can purchase a used vessel for $3.46 million that has more amenities than a brand new yacht costing $3 million plus sales tax for a total of $3.46 million they're simply going to buy the used vessel. New yacht dealers will have to adjust their sales price to whatever the market will bear.

If I can buy a used vessel for $3.25 million dollars that is the same vessel as the new one maybe a year older that is going for $3 million plus tax, I'm going to buy the used vessel and not pay the tax and save money. It's really not all that difficult to understand.

Immie

 

[konradv]

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.

Would there be a tax on labor? People with money don't just buy things with that extra money, they also pay people to do things for them.

 

[Oddball]

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.

Figures that you'd be good with corrupt politicians, using the public treasury to hand out favors.

 

[Immanuel]

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.

Would there be a tax on labor? People with money don't just buy things with that extra money, they also pay people to do things for them.

It has been a while since you made this post and I don't think anyone responded.

It has also been a long time since I read up on The Fair Tax. I am not 100% certain, but I do believe that services were taxable, such as if you paid a CPA to do your taxes or a lawn service to mow your lawn. I can't swear to it, so if someone posts something different with back up, I will take their word for it... unless I look it up and find out otherwise.

There would not, however, be a tax on what you pay your employees. They would not have any payroll taxes nor would the employer.

Hope that helps a little.

Immie

 

[konradv]

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.

Figures that you'd be good with corrupt politicians, using the public treasury to hand out favors.

Got a problem with that, let's go to public financing of elections. I'll bet the amount the average voter benefits from "favors" is far out weighed by those bought by corporations and unions.

 

[konradv]

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.

Would there be a tax on labor? People with money don't just buy things with that extra money, they also pay people to do things for them.

It has been a while since you made this post and I don't think anyone responded.

It has also been a long time since I read up on The Fair Tax. I am not 100% certain, but I do believe that services were taxable, such as if you paid a CPA to do your taxes or a lawn service to mow your lawn. I can't swear to it, so if someone posts something different with back up, I will take their word for it... unless I look it up and find out otherwise.

There would not, however, be a tax on what you pay your employees. They would not have any payroll taxes nor would the employer.

Hope that helps a little.

Immie

So, in essence, the income tax would be paid by the employer instead of the employee.

 

[Immanuel]

Would there be a tax on labor? People with money don't just buy things with that extra money, they also pay people to do things for them.

It has been a while since you made this post and I don't think anyone responded.

It has also been a long time since I read up on The Fair Tax. I am not 100% certain, but I do believe that services were taxable, such as if you paid a CPA to do your taxes or a lawn service to mow your lawn. I can't swear to it, so if someone posts something different with back up, I will take their word for it... unless I look it up and find out otherwise.

There would not, however, be a tax on what you pay your employees. They would not have any payroll taxes nor would the employer.

Hope that helps a little.

Immie

So, in essence, the income tax would be paid by the employer instead of the employee.

No, not sure where you got that.

There would be no "income tax". Whenever money was spent to purchase goods or services (obviously, employee labor not being considered a "service" in that statement) the tax would be collected and paid monthly to the government.

If Dell purchased chips from Intel, they would pay the tax to Intel and Intel would pay the government. If Intel paid its employees on payday they would not take out any payroll taxes nor would they pay unemployment tax, FICA or Medicare those are covered and replaced in the bill. When those employees go to Winn Dixie to buy groceries they pay a tax on the food they purchase.

Every month the government sends a check (actually I am sure this would be done electronically) to each household to cover what a household of that size at the poverty level would be expected to pay in taxes. This is done to reduce the burden on those living below the poverty level. As mentioned above a family of four would get approximately $442 per month. If they ate over at friend's houses every night and didn't buy any groceries or spend any money they could actually save that $442 or whatever portion they did not spend.

One plus that is mentioned is that would mean that any money spent in the country would be taxed whether or not it was spent by a criminal i.e. drug dealer, an illegal alien, a visitor to the country or what have you.

Immie

 

[Oddball]

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.

Figures that you'd be good with corrupt politicians, using the public treasury to hand out favors.

Got a problem with that, let's go to public financing of elections. I'll bet the amount the average voter benefits from "favors" is far out weighed by those bought by corporations and unions.

Yeah, right...As though politicians could handle election funding any better than they handle anything else.

Get real.

 

[manifold]

Let's imagine we could wipe the slate clean and start from scratch. We all agree that some level of government is necessary. The appropriate scope of government, at all levels, is a good topic for another thread, but for this exercise let's simply focus on how we're to fund this government. I submit that the fairest tax structure is one that draws equitably, from across the entire population, an amount sufficient to fund all government responsibilities. But what is equitable and what is the best way to achieve it?

 

[konradv]

It has been a while since you made this post and I don't think anyone responded.

It has also been a long time since I read up on The Fair Tax. I am not 100% certain, but I do believe that services were taxable, such as if you paid a CPA to do your taxes or a lawn service to mow your lawn. I can't swear to it, so if someone posts something different with back up, I will take their word for it... unless I look it up and find out otherwise.

There would not, however, be a tax on what you pay your employees. They would not have any payroll taxes nor would the employer.

Hope that helps a little.

Immie

So, in essence, the income tax would be paid by the employer instead of the employee.

No, not sure where you got that.

There would be no "income tax". Whenever money was spent to purchase goods or services (obviously, employee labor not being considered a "service" in that statement) the tax would be collected and paid monthly to the government.

If Dell purchased chips from Intel, they would pay the tax to Intel and Intel would pay the government. If Intel paid its employees on payday they would not take out any payroll taxes nor would they pay unemployment tax, FICA or Medicare those are covered and replaced in the bill. When those employees go to Winn Dixie to buy groceries they pay a tax on the food they purchase.

Every month the government sends a check (actually I am sure this would be done electronically) to each household to cover what a household of that size at the poverty level would be expected to pay in taxes. This is done to reduce the burden on those living below the poverty level. As mentioned above a family of four would get approximately $442 per month. If they ate over at friend's houses every night and didn't buy any groceries or spend any money they could actually save that $442 or whatever portion they did not spend.

One plus that is mentioned is that would mean that any money spent in the country would be taxed whether or not it was spent by a criminal i.e. drug dealer, an illegal alien, a visitor to the country or what have you.

Immie

If there's a tax on my labor, then you've just changed who pays the income tax. I got that from your post where you said there would be a tax on services. By your plan it would be a flat tax, but a tax on my income nonetheless.

 

[Immanuel]

So, in essence, the income tax would be paid by the employer instead of the employee.

No, not sure where you got that.

There would be no "income tax". Whenever money was spent to purchase goods or services (obviously, employee labor not being considered a "service" in that statement) the tax would be collected and paid monthly to the government.

If Dell purchased chips from Intel, they would pay the tax to Intel and Intel would pay the government. If Intel paid its employees on payday they would not take out any payroll taxes nor would they pay unemployment tax, FICA or Medicare those are covered and replaced in the bill. When those employees go to Winn Dixie to buy groceries they pay a tax on the food they purchase.

Every month the government sends a check (actually I am sure this would be done electronically) to each household to cover what a household of that size at the poverty level would be expected to pay in taxes. This is done to reduce the burden on those living below the poverty level. As mentioned above a family of four would get approximately $442 per month. If they ate over at friend's houses every night and didn't buy any groceries or spend any money they could actually save that $442 or whatever portion they did not spend.

One plus that is mentioned is that would mean that any money spent in the country would be taxed whether or not it was spent by a criminal i.e. drug dealer, an illegal alien, a visitor to the country or what have you.

Immie

If there's a tax on my labor, then you've just changed who pays the income tax. I got that from your post where you said there would be a tax on services. By your plan it would be a flat tax, but a tax on my income nonetheless.

Well, to clear that up... labor means the work an employee does for you. What you are talking about is services. I would pay my CPA a tax on the invoice he gave me, not his "labor". I would pay the guy that mows my lawn for the bill he gave me, not his "labor". I would not be taxed, nor would my employee be taxed for the labor they perform for me.

Immie

 

[Dont Taz Me Bro]

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're not talking about a tax. You're talking about a flat cost for a commodity.

If we have a 10% sales tax on items and a wealthy man buys a $100,000 car he's paying $10,000 in taxes. A lower income man isn't going to buy a car that expensive. He may buy a used car for $8,000 and pay only $800 in tax. The wealthier individual is paying incredibly more tax than the other guy, but they're both paying 10%.

 

[Dont Taz Me Bro]

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.

Exactly how much did you pay in taxes last year?

 

[Oddball]

Let's imagine we could wipe the slate clean and start from scratch. We all agree that some level of government is necessary. The appropriate scope of government, at all levels, is a good topic for another thread, but for this exercise let's simply focus on how we're to fund this government. I submit that the fairest tax structure is one that draws equitably, from across the entire population, an amount sufficient to fund all government responsibilities. But what is equitable and what is the best way to achieve it?

There's no equitable way to expropriate from the productive in order to feather the nests of the unproductive.

Sales/consumption taxes are regressive and income taxes will always be tinkered with, to reward "correct" behavior and political allies and punish "incorrect" behavior and political foes.

 

[pegwinn]

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.

Which method of taxation do you think is better/fairer and why?

I don't care about regressive or progressive at all. What I care about are your personal freedoms and how the income tax takes them away.

Consider:

In order to tax income, the fed must know (down to the penny) how much and what types of income you have brought in. They do this by forcing you to disclose what is essentially your own private business. And, just to be sure that you are not lying they will verify that via the employers reports as well as mandatory reporting from investment managers etc.

You are not only required to disclose your personal finances, but your own personally identifiable information goes in the pot as well.

With identity theft the newest kid on the up and coming crimes block.... all you need is to envision an IRS employee who desires to make some major cash.

They know who you are, who you are married to, your kids names/birthdays/ssn's, they know where you work and about how long you've been there. By simply graphing your w2 from that employer they can tell if you have been promoted or stagnated.

They know the average property values and annual incomes of you and everyone else on the block. Don't drive an escalade that is "above your means" unless you want to meet an auditor.

Tax court isn't structured like criminal court. You must prove you are innocent. Your assets can be seized without full and proper due process. And even if Perry Mason is your best friend, only certain attorneys are even allowed to sit in the court as official counsel.

The income tax system makes a mockery of the concept of individual privacy, the ideal that all men are created equal, and that funding the government is everyone's duty.

A consumption tax or sales tax is more to my liking since most, not all, purchases are anonymous as you slip out the check stand at Walmart.

Almost every state in the union has a sales tax. This eliminates the need for the majority of the IRS. Just have the states collect and remit. Let them keep half a percent for their additional bookeeping.

Everyone, rich/poor, legal/illegal, citizen or tourist, doctor or on-the-street drug dealer, or black/white/pink/green all pay the same rate. Yes, the poor will spend a higher percentage of income in this tax. So what? I work in some of the poorest parts of town. I install satellite TV's. Nowadays poor means you have the best and latest Nike Air (fill in the current name) on your feet. Poor means you drive a beater car with rims and a stereo that exceed four figures. Poor means you still have a cell phone, cable tv, air conditioning, enough to eat to the point of obesity, and pocket money for beer and smokes. So please excuse me for not being 100% sympathetic to the whole "regressive" sin of a sales tax.

Government spending is a discussion worthy topic in its' own right. But would be beyond the scope of the OP.

 

[konradv]

Figures that you'd be good with corrupt politicians, using the public treasury to hand out favors.

Got a problem with that, let's go to public financing of elections. I'll bet the amount the average voter benefits from "favors" is far out weighed by those bought by corporations and unions.

Yeah, right...As though politicians could handle election funding any better than they handle anything else.

Get real.

What would be so difficult about an even split? Who could **** that up? If people are that stupid, there's really no hope for your plan either.