How to tax the rich. - Page 2

Kerostasis · 07-20-2007, 01:57 AM

The last time the Fair Tax came up I ran some math and figured that the actual rate would be closer to 40%. Part of that is due to the way that sales taxes are calculated differently than income taxes--with a sales tax and in income tax on the same quantity of money, the sales tax % has to be noticeably higher to yield the same amount of revenue as the Income tax %.

Still, a 40% sales tax is way more than I'm willing to pay for the privelege of removing my income tax. The fact that I'm in a low % bracket might have something to do with that, but that plays into Nordens reminder that it is the middle class who gets solidly smacked in the face with this plan.

**CingularDuality** · 07-20-2007, 07:09 AM

Quote:

Originally Posted by Kerostasis

The last time the Fair Tax came up I ran some math and figured that the actual rate would be closer to 40%. Part of that is due to the way that sales taxes are calculated differently than income taxes--with a sales tax and in income tax on the same quantity of money, the sales tax % has to be noticeably higher to yield the same amount of revenue as the Income tax %.

Still, a 40% sales tax is way more than I'm willing to pay for the privelege of removing my income tax. The fact that I'm in a low % bracket might have something to do with that, but that plays into Nordens reminder that it is the middle class who gets solidly smacked in the face with this plan.

I think you're severely underestimating the number of people that don't pay taxes at all. Like Squid mentioned, criminals, tourists, illegal aliens, and other folks that otherwise don't pay income tax will now be contributing. That's a LOT of people that would start to pay taxes!

Kerostasis · 07-20-2007, 11:57 AM

That requires the assumption that this plan will eliminate the potential to run untaxed "black market" operations. Black markets will have to change in character, but they won't disappear. A universal sales tax is every bit as complicated and difficult to enforce as an income tax.

And I think you overestimate how much illegal aliens spend on taxable goods. You realize the primary reason for most of them to be here is to send that money back to their homeland, right?

Judge_Leo · 07-20-2007, 12:02 PM

Wouldn't it make more sense to try to get more out of the taxes we currently pay before more cash is surrendered to the money burning machine in Washington?

This obsession with taxing those "evil rich people" is bogus, they already pay multitudes more on a per capita basis. Not to mention the millions they donate to reduce their tax burden, without those donations for hospitals, schools and other public facilities we would either have to go without or pick up the tab. Give those same dollars to the government and see what you would get in return - more bureaucrats and a process that takes 3 times as long and costs 5 times as much.

**sordavie** · 07-20-2007, 12:41 PM

Yes, the problem isn't with taxes per se. The problem is how inefficient the government is at spending.

xTYBALTx · 07-20-2007, 01:09 PM

Inefficient government spending is a good thing.

When someone is doing something bad, it is good that they be inefficient at it.

It is also good that they have less money with which to do these morally reprehensible things.

**CingularDuality** · 07-20-2007, 02:31 PM

Quote:

Originally Posted by Kerostasis

And I think you overestimate how much illegal aliens spend on taxable goods. You realize the primary reason for most of them to be here is to send that money back to their homeland, right?

Absolutely wrong, although that used to be the case. Most of them are now saving it to bring their family here, instead of sending it to them there.

Kerostasis · 07-20-2007, 02:48 PM

So your primary argument for the "fair tax" is presumed reduction in the size of untaxed black markets, right? It's arguable whether tax evasion would be any easier to identify on a sales basis than an income basis, but even if that turns out to be true, there's an awful lot of side-effects of the plan which outweigh the minor benefits of limited taxation of black markets.

If pre-retail production transactions are taxed, then products with more intermediate steps become vastly more expensive than products with fewer steps. If pre-retail production is not taxed, then we collect no tax at all from overseas operations of US companies. Thats just off the top of my head...it gets far more complicated.

Steeler · 07-20-2007, 03:01 PM

At TG, all tax policy threads are Fair Tax threads.

Kerostasis · 07-20-2007, 03:14 PM

I'd be more than happy to participate in a tax-thread free of Fair Tax promotions, but I haven't seen one yet.

**CingularDuality** · 07-20-2007, 03:32 PM

Quote:

Originally Posted by Kerostasis

So your primary argument for the "fair tax" is presumed reduction in the size of untaxed black markets, right? It's arguable whether tax evasion would be any easier to identify on a sales basis than an income basis, but even if that turns out to be true, there's an awful lot of side-effects of the plan which outweigh the minor benefits of limited taxation of black markets.

It's not my primary argument. The primary argument has got to be simplicity for the taxpayer and reduced government bureaucracy.

Your arguments regarding tax evasion and enforcement seem silly to me. Can you explain to me how exactly an individual is going to avoid a sales tax? Are there going to be entire neighborhoods where the grocery store, car dealership and Best Buy are all in cahoots to allow certain individuals to avoid tax? That's insane. I'm sure there will be isolated incidents, but just because you avoided tax at the electronics store where your buddy works doesn't mean you'll be able to avoid it anywhere else.

And so what if we have to keep the same levels of enforcement? IRS Agents make up a teeny tiny percentage of the IRS. If 75% of the IRS is no longer needed, that's fine with me! The Agents can stay.

Kerostasis · 07-20-2007, 03:51 PM

Quote:

Originally Posted by CingularDuality

It's not my primary argument. The primary argument has got to be simplicity for the taxpayer and reduced government bureaucracy.

Right. Except that argument doesn't hold any water, because compliance with these tax rules is no easier than compliance with old tax rules, and evasion of these tax rules is every bit as likely as evasion of old tax rules. The idea that you can substantially reduce government bureaucracy simply by changing the point of collection of taxes is, quite frankly, a pipe dream.

**CingularDuality** · 07-20-2007, 03:58 PM

Quote:

Originally Posted by Kerostasis

Right. Except that argument doesn't hold any water, because compliance with these tax rules is no easier than compliance with old tax rules, and evasion of these tax rules is every bit as likely as evasion of old tax rules. The idea that you can substantially reduce government bureaucracy simply by changing the point of collection of taxes is, quite frankly, a pipe dream.

Can you explain to me why, exactly, you think that? How many pages is our current tax code?

Kerostasis · 07-20-2007, 04:34 PM

Hundreds. Every one of them a work of art, refined through years of effort.

How many pages is your "Fair Tax" tax-code? Has it even been written yet?

ScratchMonkey · 07-20-2007, 04:53 PM

One difference is that the paperwork is done by vendors reporting sales, not by individuals reporting income. No more W2/W4/1040/Schedule XXX from every single wage earner.

This also eliminates all the tracking that the Feds do to individuals. No longer can they use tax paperwork to see what we're up to, which I consider a major privacy intrusion.

07-20-2007, 12:02 PM	#19 (permalink)
Judge_Leo Join Date: Mar 2007 Location: Northern Minnesota Age: 48 Posts: 83	Re: How to tax the rich. Wouldn't it make more sense to try to get more out of the taxes we currently pay before more cash is surrendered to the money burning machine in Washington? This obsession with taxing those "evil rich people" is bogus, they already pay multitudes more on a per capita basis. Not to mention the millions they donate to reduce their tax burden, without those donations for hospitals, schools and other public facilities we would either have to go without or pick up the tab. Give those same dollars to the government and see what you would get in return - more bureaucrats and a process that takes 3 times as long and costs 5 times as much.

07-20-2007, 12:41 PM	#20 (permalink)
sordavie Join Date: Nov 2005 Age: 27 Posts: 2,260	Re: How to tax the rich. Yes, the problem isn't with taxes per se. The problem is how inefficient the government is at spending. __________________

07-20-2007, 01:09 PM	#21 (permalink)
xTYBALTx Join Date: Aug 2005 Posts: 3,919	Re: How to tax the rich. Inefficient government spending is a good thing. When someone is doing something bad, it is good that they be inefficient at it. It is also good that they have less money with which to do these morally reprehensible things. __________________ A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek "$250,000 a year won't get me to Central Park West." Last edited by xTYBALTx; 07-20-2007 at 01:37 PM.

07-20-2007, 03:01 PM	#24 (permalink)
Steeler Join Date: Aug 2005 Location: Taxachusetts Age: 30 Posts: 2,952	Re: How to tax the rich. At TG, all tax policy threads are Fair Tax threads. __________________

07-20-2007, 04:53 PM	#30 (permalink)
ScratchMonkey Join Date: Aug 2005 Location: San Pablo, California Posts: 4,565	Re: How to tax the rich. One difference is that the paperwork is done by vendors reporting sales, not by individuals reporting income. No more W2/W4/1040/Schedule XXX from every single wage earner. This also eliminates all the tracking that the Feds do to individuals. No longer can they use tax paperwork to see what we're up to, which I consider a major privacy intrusion. __________________

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