The FairTax

[Avinor]

What proof do you have the government will collect less money? The point of the 23% sales tax is that it will collect the amount of money it needs.

Did I state somewhere that my goal was to cut government funding to social programs? The sales tax replaces how they are funded, it does not get rid of the programs.

You said stuff will cost the same, because the sales tax is replacing the corporate taxes. And then there is no income/capital gains/etc taxes. Well the upper class will have a lot more money. The middle class will have more. And the lower class will have about the same. The money has to come from somewhere - and its coming from the government not getting it. Do you seriously not realize the principle goal of the people pushing this fair/flat/whatever tax is to strangle the government's funds in order to remove just about every social program instituted since FDR?

Now about that last paragraph. If the ONLY way you measure the success or failure of the Fairtax is the dollar amount a rich person gains versus the amount of dollars gained by a poor person, then your right, the Fairtax is not better. I can't argue that no one can. But I disagree thats the only way it should be measured. If a rich person has 10 million dollars and then the Fairtax gets passed and they can suddenly increase their wealth to 20 million in a short time, so what? Now they can get a bigger yacht, they can get a more expensive car, and an even bigger house. I believe the real success in the Fairtax should be measured in how much easier it will be for a poor person to become at least middle class, and that is what the Fairtax does. Prices will be the same, and poor people will have more money than they did before, (whats wrong with everyone getting more rich?) however it's up to them to decide what to do it. JFK said it best when he said, "Our present tax system...exerts to heavy a drag on growth...It reduces the financial incentives for personal effort, investment, and risk-taking...the present tax load...distorts economic judgments and channels an undue amount of energy into efforts to avoid tax liabilities." The American Dream is a lot of things, I believe one of them is financial security, and under the Fairtax that will be much easier for everyone.

The last thing this tax system does is foster the hopes of the American Dream for the lowest classes. It caters directly to those who have the most money now, and ensures it stays that way.

[simozene]

The money has to come from somewhere - and its coming from the government not getting it.

I am sure to make a bold statement like that you have done a lot of research on the FairTax. I would be curious to read your sources as everything I have read states that the 23% inclusive fairtax rate is designed to generate the same amount of revenue for the government as it does now with income tax, social security tax, medicare tax, capital gains tax, death tax, and everything else is replaces.

I think another way to look at it is to say the money is coming from somewhere... all the untaxed markets in our current system: Illegal immigrants, foreign tourists, and underground markets.

[SwampdonkeyPLD]

What proof do you have the government will collect less money? The point of the 23% sales tax is that it will collect the amount of money it needs.

Did I state somewhere that my goal was to cut government funding to social programs? The sales tax replaces how they are funded, it does not get rid of the programs.

You said stuff will cost the same, because the sales tax is replacing the corporate taxes. And then there is no income/capital gains/etc taxes. Well the upper class will have a lot more money. The middle class will have more. And the lower class will have about the same. The money has to come from somewhere - and its coming from the government not getting it. Do you seriously not realize the principle goal of the people pushing this fair/flat/whatever tax is to strangle the government's funds in order to remove just about every social program instituted since FDR?

Now about that last paragraph. If the ONLY way you measure the success or failure of the Fairtax is the dollar amount a rich person gains versus the amount of dollars gained by a poor person, then your right, the Fairtax is not better. I can't argue that no one can. But I disagree thats the only way it should be measured. If a rich person has 10 million dollars and then the Fairtax gets passed and they can suddenly increase their wealth to 20 million in a short time, so what? Now they can get a bigger yacht, they can get a more expensive car, and an even bigger house. I believe the real success in the Fairtax should be measured in how much easier it will be for a poor person to become at least middle class, and that is what the Fairtax does. Prices will be the same, and poor people will have more money than they did before, (whats wrong with everyone getting more rich?) however it's up to them to decide what to do it. JFK said it best when he said, "Our present tax system...exerts to heavy a drag on growth...It reduces the financial incentives for personal effort, investment, and risk-taking...the present tax load...distorts economic judgments and channels an undue amount of energy into efforts to avoid tax liabilities." The American Dream is a lot of things, I believe one of them is financial security, and under the Fairtax that will be much easier for everyone.

The last thing this tax system does is foster the hopes of the American Dream for the lowest classes. It caters directly to those who have the most money now, and ensures it stays that way.

The social programs themselves are another issue, but the 23% tax rate was concluded upon in order bring in the same amount of revenue for the government. And if the government is bringing in the same amount of revenue how is that strangling social programs?

I really don't understand your reasoning that this only helps the people who have money now. Poor people WILL HAVE MORE MONEY under the Fairtax system. Right now poor people still have to pay taxes, under the Fairtax system they will only have to pay taxes on things they don't need. With the capital gains tax gone little gains in the stock market will mean a lot more. When I was born my Aunt stuck $100 in a mutual fund, prior to 9/11 that $100 had turned into $6,000. Now what if I had only stuck $100 in there every month for 18 years? If I was poor, I think I would be much better off. My girlfriend makes $16,000 a year, pays for 3 of her 5 classes a semester at college and still can afford to put away $100 a month. Simply because the poor suddenly don't turn into bazillionares does not mean the Fairtax does not help them. If we were under the Fairtax now, I bet my girlfriend could put away a hell of a lot more than $100 a month. Oh, and for the first 150+ years of our country we were under a system pretty much like the Fairtax and our country did just fine.

[Avinor]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

Untaxed elements? Again, if the corporate taxes were already being reflected in the prices of everyday products, then we were already getting taxes from those illegal immigrants and foreign tourists. And I don't think you're gonna get any more money out of those two groups. Certainly not enough to offset the taxes you've axed. So again - where is the money coming from? At this point you're supposed to go hypothetical and say the economy will boom, causing vastly more wealth to spring up, but its not any more convincing.

I'm glad you and your girlfriend save. More people need to do that. Not everyone can and not everyone is smart/disciplined enough who needs to be. And they're going to be pretty screwed when they realize the government can't afford to give them social security anymore. But think about this - while you're putting away 100 a month, wealthier people are putting away 1000. Or 10,000. Or 100,000. Vastly larger sums, and vastly larger percentages of their income. The gap between you and them is getting a lot bigger, a lot faster. You think you'll catch up with your 100 a month? You'll survive, you'll get by. But thats not upward mobility, and thats not the American Dream.

[Fyrie]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

What's so good about a welfare state that we need all these social programs? I rather keep more of my money and spend it the way I want then to have to government spend it for me.
And before you go, "oh what about the poor people?" Charity should be left to churches and donations. The government should not be stealing your money and giving it to other people.

[SwampdonkeyPLD]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

Untaxed elements? Again, if the corporate taxes were already being reflected in the prices of everyday products, then we were already getting taxes from those illegal immigrants and foreign tourists. And I don't think you're gonna get any more money out of those two groups. Certainly not enough to offset the taxes you've axed. So again - where is the money coming from? At this point you're supposed to go hypothetical and say the economy will boom, causing vastly more wealth to spring up, but its not any more convincing.

I'm glad you and your girlfriend save. More people need to do that. Not everyone can and not everyone is smart/disciplined enough who needs to be. And they're going to be pretty screwed when they realize the government can't afford to give them social security anymore. But think about this - while you're putting away 100 a month, wealthier people are putting away 1000. Or 10,000. Or 100,000. Vastly larger sums, and vastly larger percentages of their income. The gap between you and them is getting a lot bigger, a lot faster. You think you'll catch up with your 100 a month? You'll survive, you'll get by. But thats not upward mobility, and thats not the American Dream.

Ok, I see your reasoning behind the government having less money now. The tax percent on the sales of goods will not be equal to just the income tax, or corporate taxes, or the Social Security Tax, or the Medicare Tax, etc etc, it will be equal to all of those put together so the government will be bringing in the same amount.

As far as the untaxed elements go heres how that works. We are not currently collecting taxes from tourist and illegal immigrants. Corporate income taxes are reflected in the price of everyday products in that companies consider all of their tax expenses and tax in the determination of the price of a product, which is one reason why prices will drop. So yes, illegals and tourists are paying taxes indirectly, but under the Fairtax they would paying taxes directly. That may sound like cemantics, but illegals and tourists paying taxes now is not the same as they would under the Fairtax.

Again, yes rich people and middle class will have more money under the Fairtax, but so will poor people. Rich people already have large sums of money so of course its easier to create more money. However, I think a poor person moving from poor to middle class is a far greater benefit to the poor person than is the benefit to a rich person who goes from rich to richer. Under the Fairtax it will be much much easier to go from poor to middle class. It will not happen over night and it will not be easy. People will still need to be smart.

[evilbau]

Oh, and for the first 150+ years of our country we were under a system pretty much like the Fairtax and our country did just fine.

Ok, I had to say something about this one. There is no comparison in the complexity of the economy and the financial markets now from 100 years ago. You would be better off citing Eastern European countries.

Again, yes rich people and middle class will have more money under the Fairtax, but so will poor people. Rich people already have large sums of money so of course its easier to create more money. However, I think a poor person moving from poor to middle class is a far greater benefit to the poor person than is the benefit to a rich person who goes from rich to richer. Under the Fairtax it will be much much easier to go from poor to middle class. It will not happen over night and it will not be easy. People will still need to be smart.

The main point is the it will accelerate the widening the gap between poor and rich. I suppose its a valid position to not care about that.

In your mind you see everything balancing out, but some of the stats I provided before should clue you in to how unlikely that is. So the sales tax will offset corporate income taxes which are priced into the retail goods we buy. Well, the government collected 250-ish billion in corporate income tax. 1.1 trillion in individual income tax. So all things being equal (same levels of consumption), the tax would need to be closer to 5x what they propose. I don't think people will suddenly be buying 5x the amount of goods, and I don't think illegal immigration and tourism are going to come close to making up the difference. The end result is the government will be underfunded without an easy mechanism to adjust it (i.e. under income taxes it is easy to increase upper tax brackets with the least amount of social impact, here we will have to raise the National Sales tax...).

[SwampdonkeyPLD]

Hmm, 10-4, but I think that statement is sorta justified. If our country can operate under the tax system now which is complicated as hell, I think we could do just fine under something much more simple that we operated on before.

[evilbau]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

What's so good about a welfare state that we need all these social programs? I rather keep more of my money and spend it the way I want then to have to government spend it for me.
And before you go, "oh what about the poor people?" Charity should be left to churches and donations. The government should not be stealing your money and giving it to other people.

lol i love comments like these. All you have to do is quote them and laugh.

[Fyrie]

Again, yes rich people and middle class will have more money under the Fairtax, but so will poor people. Rich people already have large sums of money so of course its easier to create more money. However, I think a poor person moving from poor to middle class is a far greater benefit to the poor person than is the benefit to a rich person who goes from rich to richer. Under the Fairtax it will be much much easier to go from poor to middle class. It will not happen over night and it will not be easy. People will still need to be smart.

The end result is the government will be underfunded without an easy mechanism to adjust it (i.e. under income taxes it is easy to increase upper tax brackets with the least amount of social impact, here we will have to raise the National Sales tax...).

Yes, there is. Stop government spending. Stop giving Israel 30 billion dollars. Stop giving Saudi Arabia 20 billion dollars. Stop giving Egypt 13 billion dollars. Stop giving Qatar, Bahrain, Oman and the United Arab Emirates 20 billion dollars. Stop living in a welfare state. People should be less dependent on the government and more dependent on themselves. Yes, some social programs are great, but not all of them. We should not be living in a nanny state.

[Fyrie]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

What's so good about a welfare state that we need all these social programs? I rather keep more of my money and spend it the way I want then to have to government spend it for me.
And before you go, "oh what about the poor people?" Charity should be left to churches and donations. The government should not be stealing your money and giving it to other people.

lol i love comments like these. All you have to do is quote them and laugh.

thanks for the great response

[evilbau]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

What's so good about a welfare state that we need all these social programs? I rather keep more of my money and spend it the way I want then to have to government spend it for me.
And before you go, "oh what about the poor people?" Charity should be left to churches and donations. The government should not be stealing your money and giving it to other people.

lol i love comments like these. All you have to do is quote them and laugh.

thanks for the great response

would you like a real one? Go watch Spike Lee's "When the Levees Broke: A Requiem in Four Acts" and tell me if you still believe we should NOT spend massive amounts of money on helping the lower class. Go visit some elderly living in poverty. Homeless children number 1.4 million, making up about about 40% of the homeless population. But you know what, they are taking OUR money, we should tell them to FUCK OFF. Your comments are so unsympathetic I am ashamed to be a fellow human being. If you didn't realize the ramifications of what you were saying, then you are merely ignorant (which is comparatively okay )

[evilbau]

Again, yes rich people and middle class will have more money under the Fairtax, but so will poor people. Rich people already have large sums of money so of course its easier to create more money. However, I think a poor person moving from poor to middle class is a far greater benefit to the poor person than is the benefit to a rich person who goes from rich to richer. Under the Fairtax it will be much much easier to go from poor to middle class. It will not happen over night and it will not be easy. People will still need to be smart.

The end result is the government will be underfunded without an easy mechanism to adjust it (i.e. under income taxes it is easy to increase upper tax brackets with the least amount of social impact, here we will have to raise the National Sales tax...).

Yes, there is. Stop government spending. Stop giving Israel 30 billion dollars. Stop giving Saudi Arabia 20 billion dollars. Stop giving Egypt 13 billion dollars. Stop giving Qatar, Bahrain, Oman and the United Arab Emirates 20 billion dollars. Stop living in a welfare state. People should be less dependent on the government and more dependent on themselves. Yes, some social programs are great, but not all of them. We should not be living in a nanny state.

I don't to derail this topic into foreign policy but that money is the price you pay for being the remaining superpower in the world (it also helps protect our interests, we aren't 'giving that money away', it has a purpose like an investment)

[Fyrie]

Its been stated by you that prices will remain the same because corporate taxes already lead to a markup on products equivalent to the rate of the new tax. The corporate taxes are now gone, so the sales tax is making up for that - but the income tax is also gone. So everyone has more money - and the government has less. No more funding for social programs. So clearly, things can not cost the same. Or the government can't have the same amount of revenue collected. Because you can't pull money out of thin air.

What's so good about a welfare state that we need all these social programs? I rather keep more of my money and spend it the way I want then to have to government spend it for me.
And before you go, "oh what about the poor people?" Charity should be left to churches and donations. The government should not be stealing your money and giving it to other people.

lol i love comments like these. All you have to do is quote them and laugh.

thanks for the great response

would you like a real one? Go watch Spike Lee's "When the Levees Broke: A Requiem in Four Acts" and tell me if you still believe we should NOT spend massive amounts of money on helping the lower class. Go visit some elderly living in poverty. Homeless children number 1.4 million, making up about about 40% of the homeless population. But you know what, they are taking OUR money, we should tell them to FUCK OFF. Your comments are so unsympathetic I am ashamed to be a fellow human being. If you didn't realize the ramifications of what you were saying, then you are merely ignorant (which is comparatively okay )

I did not say we shouldn't be helping the poor and lower class. I'm saying the federal government shouldn't be the one doing it. If you didn't know, we have a rule of a law called the constitution. The federal government technically, shouldn't even be allowed to have an income tax, much less social programs. Social programs should be left to churches, donations and the state. If your state has social programs, great, but if you don't like it, you can move. If your state doesn't have social programs, great, but if you don't like it, you can move.
All these jobs are up to the state, or suppose to, just like socialized health care, straight/gay marriage and a lot of other services that the federal government should have no hands in.

I don't to derail this topic into foreign policy but that money is the price you pay for being the remaining superpower in the world (it also helps protect our interests, we aren't 'giving that money away', it has a purpose like an investment)

I'm sure you know China is catching up to us right? And don't you think we should cater to the citizens of the United States, before we go around trying to build their bridges while ours are falling?

[evilbau]

I did not say we shouldn't be helping the poor and lower class. I'm saying the federal government shouldn't be the one doing it. If you didn't know, we have a rule of a law called the constitution. The federal government technically, shouldn't even be allowed to have an income tax, much less social programs. Social programs should be left to churches, donations and the state. If your state has social programs, great, but if you don't like it, you can move. If your state doesn't have social programs, great, but if you don't like it, you can move.
All these jobs are up to the state, or suppose to, just like socialized health care, straight/gay marriage and a lot of other services that the federal government should have no hands in.

FYI, making statements like 'we have a rule of law called the Constitution' (capitalized if you didn't know) is not only presumptuous (as if I wouldn't know what it means), but it is also the incorrect way to use the phrase but meh. On to your points.

Ok, you have a valid point in that you can give this power to the states. 'The federal government technically, shouldn't even be allowed to have an income tax, much less social programs' do not reflect the reality of today's life, nor the interpretation of the Constitution. It does not disallow rights and powers which are not explicitly codified in the Constitution or its amendments. I wouldn't align myself with the crackpots that try to advocate getting rid of taxes based on its constitutionality. I suppose I just have a more optimistic view of our federal government; that it can rise the standard of living for all Americans. That you want to leave it up to the states is a perfectly valid point of view.

I don't to derail this topic into foreign policy but that money is the price you pay for being the remaining superpower in the world (it also helps protect our interests, we aren't 'giving that money away', it has a purpose like an investment)

I'm sure you know China is catching up to us right? And don't you think we should cater to the citizens of the United States, before we go around trying to build their bridges while ours are falling?

Like I said, I don't want to get into foreign policy, but that is part of my point as well. As long as China is gaining strength (politically, economically), that money maintains our relationships (renting out military bases we use, business relationships such as oil) which pays dividends in our economy. All things being equal, they probably would rather deal with China. They aren't going to berate them for their religion-backed government or for civil rights abuses. They just bring the money. You tell me what happens when China spends that money on those countries, gets their oil, while we spend that money domestically. How about in 10 years?

Its presumptuous myself to say this, but how will civil rights in those countries progress without our urging?

[evilbau]

Also I wanted to say that while leaving it up to the states to provide those services is a fine way to look at government, its also unrealistic to expect for the states to be able to pay for it. There is no way the South could have afforded the (mostly insufficient) aid that FEMA and the federal government provided Hurricane Katrina victims. There are also economies of scale by having a national social security, medicare, and welfare. Sure it creates a massive federal bureaucracy but would it be worse than seperate entities in each participating state? You probably think 'Yes' which is why I think its a valid viewpoint, if one I don't agree with.

[Fyrie]

It does not disallow rights and powers which are not explicitly codified in the Constitution or its amendments.

Actually, it does. Unless I'm not understanding that correctly.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved for the States respectively, or to the people.

Like I said, I don't want to get into foreign policy, but that is part of my point as well. As long as China is gaining strength (politically, economically), that money maintains our relationships (renting out military bases we use, business relationships such as oil) which pays dividends in our economy. All things being equal, they probably would rather deal with China. They aren't going to berate them for their religion-backed government or for civil rights abuses. They just bring the money. You tell me what happens when China spends that money on those countries, gets their oil, while we spend that money domestically. How about in 10 years?

Its presumptuous myself to say this, but how will civil rights in those countries progress without our urging?

The thing is, you can't not talk about foreign policy when talking about domestic affairs, because it all ties in together. Do you know our economy is going to shit right now? All the borrowing and the Fed printing money is fucking us over.
Right now the Feds are increasing the money supply by the billions these few days to make wall street look all pretty and nice. But you believe we should police the world, I don't so that's that.

Also I wanted to say that while leaving it up to the states to provide those services is a fine way to look at government, its also unrealistic to expect for the states to be able to pay for it. There is no way the South could have afforded the (mostly insufficient) aid that FEMA and the federal government provided Hurricane Katrina victims. There are also economies of scale by having a national social security, medicare, and welfare. Sure it creates a massive federal bureaucracy but would it be worse than seperate entities in each participating state? You probably think 'Yes' which is why I think its a valid viewpoint, if one I don't agree with.

After seeing the FEMA failure, I don't know how anyone can still believe spending all that money on it is a good thing. The problem with Hurricane Katrina was that FEMA made the state serve them. FEMA made people not able to go to their own homes, took away their guns, which they had legally and more. FEMA shouldn't be the first response to disasters such as Hurricane Katrina. The state should be. I'm sure the state knows more about their own state than the federal government. The federal government should be serving the state, not the other way around. The federal government should helping the state by asking what they need, not telling them what to do. What I believe is, instead of wasting money on FEMA, we should have resources set aside for these disasters. When the disasters occur, the federal government would be there to assist the states, but what we have right now is the other way around and I think it's a failure.

[aurik]

Failing to be charitable to the lower class leads to poverty, poverty leads to crime. Enjoy spending all the money you save on armed guards and gated neighbourhoods.

[ozz]

Failing to be charitable to the lower class leads to poverty, poverty leads to crime. Enjoy spending all the money you save on armed guards and gated neighbourhoods.

and be safer from the criminals that already exist?

[SwampdonkeyPLD]

Oh, and for the first 150+ years of our country we were under a system pretty much like the Fairtax and our country did just fine.

Ok, I had to say something about this one. There is no comparison in the complexity of the economy and the financial markets now from 100 years ago. You would be better off citing Eastern European countries.

Again, yes rich people and middle class will have more money under the Fairtax, but so will poor people. Rich people already have large sums of money so of course its easier to create more money. However, I think a poor person moving from poor to middle class is a far greater benefit to the poor person than is the benefit to a rich person who goes from rich to richer. Under the Fairtax it will be much much easier to go from poor to middle class. It will not happen over night and it will not be easy. People will still need to be smart.

The main point is the it will accelerate the widening the gap between poor and rich. I suppose its a valid position to not care about that.

In your mind you see everything balancing out, but some of the stats I provided before should clue you in to how unlikely that is. So the sales tax will offset corporate income taxes which are priced into the retail goods we buy. Well, the government collected 250-ish billion in corporate income tax. 1.1 trillion in individual income tax. So all things being equal (same levels of consumption), the tax would need to be closer to 5x what they propose. I don't think people will suddenly be buying 5x the amount of goods, and I don't think illegal immigration and tourism are going to come close to making up the difference. The end result is the government will be underfunded without an easy mechanism to adjust it (i.e. under income taxes it is easy to increase upper tax brackets with the least amount of social impact, here we will have to raise the National Sales tax...).

Bah you edited after I responded. Some of the smartest economists beg to differ on that bolded part. Now let me provide some numbers for you. The underground economy accounts for 10% of our GDP. The IRS loses $345 Billion every year in lost taxes. On average Americans pay $2,000 extra to make up for this. One economist estimates that Illicit drugs, illegal labor, and pornography constitutes an underground economy that exceeds $1 Trillion, just from those 3 things alone. With the Fairtax all of those people will be paying taxes, so yes, I think it will be the same revenue collected.