A "FAIR TAX" thread so U_D can "tear me to shreds..."

[Byron In Exile]

Government cheese or real cheese nachos?

Government cheese is real cheese.

 

[Saint Peter]

You mean cheddah or American...



It's not yo's!

Chinese cheese.

Just like Swiss without all of that nasty Nazi gold mixed in.

 

[Frisco_Slug_Esq]

Government cheese is real cheese.

It's free cheddah!

 

[Frisco_Slug_Esq]

Chinese cheese.

Just like Swiss without all of that nasty Nazi gold mixed in.

You mean Soylent Yellow #5...

 

[Saint Peter]

Government cheese is real cheese.

What the fuck do you know about a decent order of nachos?

 

[Byron In Exile]

What the fuck do you know about a decent order of nachos?

Your nacho stands once graced the plains of the GB.

If a poster wanted nachos, walk one block and there was a stand.

Where are they now?

You have to fly to Beijing. Even then, it's a coin toss.

 

[Frisco_Slug_Esq]

They had McDonald's, Planet Earth, and A&W in Beijing, but no nachos...

 

[firespin]

Bad math with it's first poor assumption being a zero-sum game. First off, most of the "rich" don't pay annual "income" taxes, capital gains, maybe...

This way they do pay taxes even in those years when they don't have Bill Ayers write their books.

Then, let's look at the money that comes back on-shore (and the companies that will relocate headquarters and factories to be more competitive) when the rich no longer have to hide it or flee. Then you have more rich paying more taxes, maybe proportionately not as much, you ol' envious type keeping his eye on that sort o'thingy, would like but in volume, more...

You're not making sense. Again. Or should I say "still"?

We know income taxes are paid by the top brackets, yes?

"# The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in 2002. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.
."

http://usgovinfo.about.com/od/incometaxandtheirs/a/whopaysmost.htm

However, in 2000, which was a big year for capital gains as these things go, capital gains accounted for only 12% of income taxes. So even if all of these were for the top 1%, which they clearly weren't, then the top 1% would still be paying about twice as much in earned income taxes as capital gains.

http://www.cbo.gov/doc.cfm?index=3856&type=0

So the sheltering income from taxes thing isn't going so well from them.

For the minuscule percentage that does go offshore, bringing it back onshore won't produce any more tax revenues since income wouldn't be taxed. But, if they could find a way to shelter income from taxes, surely they can find a way to shield an offshore purchase from taxes. That's got to be easier.

 

[RobDownSouth]

I accidently bumped the original thread...oops

Back in 2005, Frisco Slug_Esq (then posting as ********) agreed with me that the UnFairTax would give less money to home builders.

Lets look at some examples

Example 1: Current system

$40,000 Land cost (25%)
$48,000 Labor cost (30%)
$32,000 Material cost (20%)
$40,000 Misc overhead/compliance cost (25%)
===================================
$160,000 total cost of building house

The builder typically has gross profit margin of 20% :$40,000

The house would then be priced at $200,000

So Joe Homebuyer pays $200K, gets the homeowner deduction and builder gets $40K


Example 2: Flat tax

$40,000 Land cost (25%) (unchanged)
$33,600 Labor cost ($48,000 reduced by 30% flat tax)
$22,400 Material cost ($32,000 reduced by 30% flat tax)
$36,000 Misc overhead/compliance cost (compliance costs won't go away totally, I'll be generous and knock 10% of $40,000 due to flat tax)
===================================
$132,000 total cost of building house

The builder still has gross profit margin of 20% :$26,400
This makes the pre-tax price of the house $158,400
Add the 30% flat tax and you have a house priced at $205,920

So Joe Homebuyer pays $205K, gets NO homeowner deduction and builder gets $26K

So the homebuyer pays MORE, the builder makes LESS and the flat tax proponents claim this is a GOOD thing?

Must be something in the "mathmatical" sic calculations I am missing.

Throb, I would be for a flat tax too except for one thing.

That's how our present system started....

I don't dispute your math, I distrust the vehicle.

But I could go for it over what we have now. Agreed?

 

[Frisco_Slug_Esq]

You're not making sense. Again. Or should I say "still"?

We know income taxes are paid by the top brackets, yes?

"# The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in 2002. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.
."

http://usgovinfo.about.com/od/incometaxandtheirs/a/whopaysmost.htm

However, in 2000, which was a big year for capital gains as these things go, capital gains accounted for only 12% of income taxes. So even if all of these were for the top 1%, which they clearly weren't, then the top 1% would still be paying about twice as much in earned income taxes as capital gains.

http://www.cbo.gov/doc.cfm?index=3856&type=0

So the sheltering income from taxes thing isn't going so well from them.

For the minuscule percentage that does go offshore, bringing it back onshore won't produce any more tax revenues since income wouldn't be taxed. But, if they could find a way to shelter income from taxes, surely they can find a way to shield an offshore purchase from taxes. That's got to be easier.

Lets agree that expanding the tax base is the goal, bringing in revenue in a sane and "fair" manner. Let us also agree that it's not fair to look at ANY citizen as an individual or part of a group, as Justice is blind, so should taxation be blind.

Let me take a shot first at some of what you say above.

There won't be any capital gains at all under the fair tax. This stimulates investment. This grows the pie (of wealth). Similarly and wealth, and more importantly any business that has been off-shored to avoid an onerous, punitive, progressive tax structure now has a reason to return and this further grows the pie. This is all going to result in increased economic activity. Increased economic activity will result in increasing purchases and tax revenues.

Now, let's move on a bit.

When each citizen gets to keep his entire paycheck, then each citizen has increased spending power, this too will grow the pie. As I have shown MANY times mathematically, when you take the 23% overhead out of the cost of producing your good and then taxing it at 23% then the cost of that good actually goes down, this too increases purchasing power and increases economic activity thusly again growing the pie.

Now, let's talk about a business cycle freed from the tyranny of shifting government. MOST of our current recession right now would be over and done with if business was not afraid of what was going to be done TO them in the future by their government. No?

By allowing them to plan in the best interests of their business cycle and not the tax cycle (and its implications) you further allow the pie to grow.

So, in the long run, the percentage the "rich" pays increases greatly as the goods they consume to produce (not the raw materials, but the machinery, the plant, etc.) goods get taxed and it's all voluntary, no need to try and inflate expenses and otherwise try to cheat their way out of the tax burdens, they get to do what they do best, grow business not calculate government.

The middle-class has upward mobility and many will join the ranks of the "rich" and they will spend. The poor will spend. Can they avoid taxes? Yes they can. It's a win-win for everyone involved as I see it.

The only people who lose are those consumed with more envy than ambition that want to see Igor's goat dead rather than to have a goat of their own.

 

[firespin]

When each citizen gets to keep his entire paycheck, then each citizen has increased spending power, this too will grow the pie. As I have shown MANY times mathematically, when you take the 23% overhead out of the cost of producing your good and then taxing it at 23% then the cost of that good actually goes down, this too increases purchasing power and increases economic activity thusly again growing the pie.

While you're figuring out what went on with the end of this post, let me point out how proponents love to double count something here...

They claim that, e.g. building a house, that labor will cost less because we're removing the 22%+ taxes on that labor. Well...a big part of that 22% is the difference between an employees net and gross income. If we're removing that, it means we are paying employees closer to their net income, so they're taking a big pay cut. (Meaning their new gross and net are like their old net, and smaller than their old gross.)

Yet everything they buy...food, rent, clothing...costs 30% more.

I don't think people want to take a pay cut and then pay 30% more.

Even with a prebate.

 

[Frisco_Slug_Esq]

Back in 2005, Frisco Slug_Esq (then posting as ********) agreed with me that the UnFairTax would give less money to home builders.

Go back and quote my subsequent answers. Don't cherry-pick...

I do remember dealing with that point in a much more substantial manner.

I believe it is one of the points specifically addressed in the FairTax book.

 

[Ishmael]

You really should get out of your grandma's basement more often.

The "rich" pay most of the federal income taxes, the percentage depending on where you think "rich" starts.

The "rich" also bankrolled the "fair" tax, because they consume less of their income on a proportional basis so come out ahead if consumption is taxed, rather than income.

And if the rich come out ahead, and it's revenue-neutral, then somebody is paying more.

First of all the 'rich' that you speak of are actually businesses. The taxes that they pay are nothing more than the taxes that they collected on behalf of the government and those taxes have always come primarily from the middle class. There is no great secret or conspiracy here, it has always been thus.

You have conitually railed against the Fair Tax on the premise that the middle class will pay proportionatley more. The fact of the matter is that they will be paying the same as they were paying before, the difference that you see in the figures you post are merely a change in the method of accounting. The 20 to 30% tax that is embedded in everything you buy evaporates and that tax that you see being shifted to the middle class is a clearer reflection of reality than that which currently exists. In other words the middle class is being taxed no more or less than it was before it is merely that those taxes are now visible. I would think that most people would see that as a good thing as opposed to prefering that the government engage in slight of hand. On the other hand I suppose there is a segment of the population that really likes to be fooled.

Further, dwelling on that point ignores all of the other very real benefits of the Fair Tax with regards to the overall economy and the resurrection of real manufacturing in the US and continues to foster the class warfare that feeds the political class. Divide et imperum.

Ishmael

 

[Ulaven_Demorte]

How many years has it been that the proponents of the "FairTax" have been trying to convince Americans that it's a good idea?

I addressed this issue with you years ago Cap'n Pavlov. All you do is echo Boortz's misinformation and ignore the facts.
Only a few of which are :

Any "sales tax" with a rate over 10% has been subject historically to rampant avoidance, studies have shown that the "FairTax" would be much more than 10% to remain revenue neutral. Avoidance schemes and black market deals would rule the day.

The "Fairtax" can only remain "revenue neutral" at the rate it's proponents claim if all social services are slashed to the bone and the federal government were reduced to nearly nothing. As if that would ever happen. Not to mention that there is no mention in the "fairtax" proposal of repealing the income tax, or of making it impossible to re-introduce at a later time in addition to the "FairTax".

The Fairtax would impact the middle class to a much larger extent than any of its proponents will admit. Many things that are currently not subject to sales tax, unprepared foods, medicine, insurance premiums, would be subject to the "FairTax".

The removal of capital gains taxes are a boon to those who can afford to invest heavily, again a bonus to the very wealthy and next to nothing for the middle class.

It sounds good to tell someone that they would take home ALL of the money they make every week (minus insurance premiums and various other non tax related expenses), but it's another thing entirely if you also tell them that prices on most things that they buy are going to be impacted by an "inclusive" tax.. The "inclusive" rate is used because it sounds like it's less than if they used the "exclusive" tax rate, the way normal sales tax is figured.

I told you years ago, the only people who support the "FairTax" are the very wealthy, and the very stupid. I'l leave it up to others to decide on which side of that fence you fall.

 

[Frisco_Slug_Esq]

While you're figuring out what went on with the end of this post, let me point out how proponents love to double count something here...

They claim that, e.g. building a house, that labor will cost less because we're removing the 22%+ taxes on that labor. Well...a big part of that 22% is the difference between an employees net and gross income. If we're removing that, it means we are paying employees closer to their net income, so they're taking a big pay cut. (Meaning their new gross and net are like their old net, and smaller than their old gross.)

Yet everything they buy...food, rent, clothing...costs 30% more.

I don't think people want to take a pay cut and then pay 30% more.

Even with a prebate.

No, goods will cost less. Take an onerous 30% tax rate for easier math. The FairTax is the result of a blind research into a better system of taxation (ironically, the people who paid for the research were flat-taxers hoping to have their position vindicated, and it wasn't and as businessmen, they decided not to hold fast to their desire, but to go with the best idea) where the 23% they calculate is the BUILT-IN cost due to the overwhelming tax code in every product or service (it's an average, obviously.)

$1.00 - $0.30 = $0.70 the new cost of the "widget."
$0.70*.30 = $0.21
Thus the Fairtax widget will cost $0.91

This is a benefit to the worker who adds the savings to his ENTIRE paycheck and prebate check.

Actually, the employee is getting a huge raise on every level. This increases his spending power and this increases, yes, TAX REVENUE...

Everyone can afford to buy more widgets. AND we WILL! We're Americans damnit!

 

[firespin]

First of all the 'rich' that you speak of are actually businesses. The taxes that they pay are nothing more than the taxes that they collected on behalf of the government and those taxes have always come primarily from the middle class. There is no great secret or conspiracy here, it has always been thus.

You have conitually railed against the Fair Tax on the premise that the middle class will pay proportionatley more. The fact of the matter is that they will be paying the same as they were paying before, the difference that you see in the figures you post are merely a change in the method of accounting. The 20 to 30% tax that is embedded in everything you buy evaporates and that tax that you see being shifted to the middle class is a clearer reflection of reality than that which currently exists. In other words the middle class is being taxed no more or less than it was before it is merely that those taxes are now visible. I would think that most people would see that as a good thing as opposed to prefering that the government engage in slight of hand. On the other hand I suppose there is a segment of the population that really likes to be fooled.

Further, dwelling on that point ignores all of the other very real benefits of the Fair Tax with regards to the overall economy and the resurrection of real manufacturing in the US and continues to foster the class warfare that feeds the political class. Divide et imperum.

Ishmael

Sorry to break it to you, big guy, but most of the income taxes are individual and payroll taxes, not so much corporate income taxes.

"Estimated receipts for fiscal year 2009 are $2.7 trillion (+7.1%).

* $1.21 trillion - Individual income tax
* $949.4 billion - Social Security and other payroll taxes
* $339.2 billion - Corporate income tax
* $68.9 billion - Excise taxes
* $29.1 billion - Customs duties
* $26.3 billion - Estate and gift taxes
* $47.9 billion - Other"

And while some of the individual income is taken out of businesses, it's still individual income, not corporate.

But let's assume your other points are correct. Tell us then the answers to these two riddles:

- if the rich pay less, and clearly they do, since the fair tax is less than the top income tax rate, and they don't spend all their income, and the poor pay the same (not much), how do the middle class NOT pay more if it's revenue neutral? It's not just me that notes this.

- the reason we save by "evaporating" the costs in the supply chain is because we pay those poor guys less, right? Since they're not getting their income taxed, it's only fair. But now they're screwed when everything they want to buy costs more. [restatement of post just above.]

 

[Frisco_Slug_Esq]

How many years has it been that the proponents of the "FairTax" have been trying to convince Americans that it's a good idea?

I addressed this issue with you years ago Cap'n Pavlov. All you do is echo Boortz's misinformation and ignore the facts.
Only a few of which are :

Any "sales tax" with a rate over 10% has been subject historically to rampant avoidance, studies have shown that the "FairTax" would be much more than 10% to remain revenue neutral. Avoidance schemes and black market deals would rule the day.


The "Fairtax" can only remain "revenue neutral" at the rate it's proponents claim if all social services are slashed to the bone and the federal government were reduced to nearly nothing. As if that would ever happen. Not to mention that there is no mention in the "fairtax" proposal of repealing the income tax, or of making it impossible to re-introduce at a later time in addition to the "FairTax".

The Fairtax would impact the middle class to a much larger extent than any of its proponents will admit. Many things that are currently not subject to sales tax, unprepared foods, medicine, insurance premiums, would be subject to the "FairTax".

The removal of capital gains taxes are a boon to those who can afford to invest heavily, again a bonus to the very wealthy and next to nothing for the middle class.

It sounds good to tell someone that they would take home ALL of the money they make every week (minus insurance premiums and various other non tax related expenses), but it's another thing entirely if you also tell them that prices on most things that they buy are going to be impacted by an "inclusive" tax.. The "inclusive" rate is used because it sounds like it's less than if they used the "exclusive" tax rate, the way normal sales tax is figured.

I told you years ago, the only people who support the "FairTax" are the very wealthy, and the very stupid. I'l leave it up to others to decide on which side of that fence you fall.

This is a replacement for the dreaded income tax and the feared IRS. I have a feeling that a lot of people, once they got past the knee jerk demagoguery and outright lies and lies of omission would welcome this as much as they would getting their entire paycheck and prebate check.

That's your "opinion" and it's an opinion that assumes tax collections will shrink rather than expand, not to mention the fact that DC is out of control with its growing overhead for already shrinking "services."

Did you miss the prebate check part that covers the taxes on all foods and basic necessities? Did you miss the part where they have a whole check, more spending power and cheaper goods to purchase?

And to everyone with a pension or a 401K! HELL YES!!!
HEY, here's an idea! They might even spend more, pay more taxes, and HIRE more. Greed can be useful!

If you lie to them and refuse to show them the math.

Yes, let's indeed let them make up their minds...

They know, for a fact, that it's usually the weaker argument that resorts to name-calling and daring the reader to "be stupid."

 

[firespin]

No, goods will cost less. Take an onerous 30% tax rate for easier math. The FairTax is the result of a blind research into a better system of taxation (ironically, the people who paid for the research were flat-taxers hoping to have their position vindicated, and it wasn't and as businessmen, they decided not to hold fast to their desire, but to go with the best idea) where the 23% they calculate is the BUILT-IN cost due to the overwhelming tax code in every product or service (it's an average, obviously.)

$1.00 - $0.30 = $0.70 the new cost of the "widget."
$0.70*.30 = $0.21
Thus the Fairtax widget will cost $0.91

This is a benefit to the worker who adds the savings to his ENTIRE paycheck and prebate check.

Actually, the employee is getting a huge raise on every level. This increases his spending power and this increases, yes, TAX REVENUE...

Everyone can afford to buy more widgets. AND we WILL! We're Americans damnit!

Mr. Wizard,

You're trying to make money by making math mistakes.

Nobody thinks there is 30% hidden tax in everything. Even the simplest minded think it's like 23%. So your $.70 is really $.77, and your new cost is $.77 + 30% of that ($.23) = $1.00.

And that of course assumes that everything involved in making the widget goes down 23%, and businesses think it's a great idea to reduce their gross receipts by 23%, even though they still need to repay their capital costs at the previous schedules.

 

[Frisco_Slug_Esq]

Mr. Wizard,

You're trying to make money by making math mistakes.

Nobody thinks there is 30% hidden tax in everything. Even the simplest minded think it's like 23%. So your $.70 is really $.77, and your new cost is $.77 + 30% of that ($.23) = $1.00.

And that of course assumes that everything involved in making the widget goes down 23%, and businesses think it's a great idea to reduce their gross receipts by 23%, even though they still need to repay their capital costs at the previous schedules.

I said I was using 30 so we could do the math in our head...



So, when you use your calculator and .23, you still see a savings.

And when your widgets are cheaper...

YOU SELL MORE WIDGETS!

ESPECIALLY since the buyers now have more purchasing power.

 

[firespin]

Just as an aside, a lot of this stuff is pretty obvious...it's not about people's behavior or predcting the future, it's just math.

Here's a summary from factcheck, which has its own issues, but they see the same math issues pointed out by me and others...and I hadn't seen this article when I wrote what I did (or I would have just linked to it).

http://www.factcheck.org/taxes/unspinning_the_fairtax.html

 

[RobDownSouth]

Go back and quote my subsequent answers. Don't cherry-pick...

I do remember dealing with that point in a much more substantial manner.

I believe it is one of the points specifically addressed in the FairTax book.

I have neither time nor inclination to attempt to assemble a coherent response from your rambling commentary. If you have a point to make, man up and make it Nancy. Find it yourself and bump it, if in fact it exists (it doesn't, but we'll go through this charade again for your benefit).

If you truly believe you dealt with that point in a much more substantial manner, then by all means share it with us. You couldn't do it then, perhaps you can foment a rational response now.

The above exchange illustrates one of the key reasons you change userids from time to time: there's documentation of you agreeing with me that you now want to distance yourself from.

I didn't cherry-pick, that was the sum and substance of your response.

 

[firespin]

I said I was using 30 so we could do the math in our head...



So, when you use your calculator and .23, you still see a savings.

And when your widgets are cheaper...

YOU SELL MORE WIDGETS!

ESPECIALLY since the buyers now have more purchasing power.

Well, except that:

a) the widgets cost the consumer the same final amount, so no more purchasing power, and
b) that assumes the costs go down, which most people who look at this think won't happen in the manner postulated.

Other than that, yeah, it's great.

 

[Frisco_Slug_Esq]

Well, except that:

a) the widgets cost the consumer the same final amount, so no more purchasing power, and
b) that assumes the costs go down, which most people who look at this think won't happen in the manner postulated.

Other than that, yeah, it's great.

No, the widgets are CHEAPER!

*sigh*

$1.00-$1.00*.23= $0.77
$0.77*.23= .1771
Fairtax Widget = $0.95

 

[Frisco_Slug_Esq]

Most people is a classic red herring used currently most often by Barack Obama, sometimes he moderates it with "some people..."






And when it comes to your "concerns" about the middle-class, as long as you don't have to have the newest house and the newest care for the status of the thing, you can purchase both, used, sans tax...



THAT ought to buy some widgets!

 

[firespin]

No, the widgets are CHEAPER!

*sigh*

$1.00-$1.00*.23= $0.77
$0.77*.23= .1771
Fairtax Widget = $0.95

The new tax rate is 30%, not 23%, if the hidden cost is 23%. Sorry. It goes down by 23 cents, and up by 23 cents. (External vs. internal computations, if that makes sense.) Even the proponents admit to this.

I know the math is hard for many.