Tax return money: How will you spend it?

[SwampdonkeyPLD]

So I looked some things in regards to our current system and the Fairtax system. Mortgages didn't seem to have an effect on the end result, just the difference between the amount left over.

Someone who makes 30k a year and is single will pay...

$1860 in social security taxes
$435 in medicare taxes
$4500 in income taxes leaving...
$23,205 to spend

Under the Fairtax they would get $2,348 in a rebate...
$32348 is the start...and the end.

A couple making 50k a year will pay...
$3100 in social security taxes
$725 in medicare taxes
$7500 in income taxes leaving....
$38675 to spend

Under the Fairtax even without the rebate they have more to spend with 50k.

As far as the 23% I wonder if he is basing that off Bush's government tax study. A tax panel did a study on a consumption tax but not the Fairtax, yet said the Fairtax wouldn't work based on this study.

[aurik]

So I looked some things in regards to our current system and the Fairtax system. Mortgages didn't seem to have an effect on the end result, just the difference between the amount left over.

Someone who makes 30k a year and is single will pay...

$1860 in social security taxes
$435 in medicare taxes
$4500 in income taxes leaving...
$23,205 to spend

Under the Fairtax they would get $2,348 in a rebate...
$32348 is the start...and the end.

A couple making 50k a year will pay...
$3100 in social security taxes
$725 in medicare taxes
$7500 in income taxes leaving....
$38675 to spend

Under the Fairtax even without the rebate they have more to spend with 50k.

As far as the 23% I wonder if he is basing that off Bush's government tax study. A tax panel did a study on a consumption tax but not the Fairtax, yet said the Fairtax wouldn't work based on this study.

So in the examples above, the 30k earner pays $6795 in tax, the 50k earner pays $11325, total of $18120 in revenue

Under fairtax, if the 30k earner spends all of his money, he consumes $26300 and pays $6049 in tax
If the 50k earner spends all of his money, he consumes $42560 and pays $9788 in tax.

So Fairtax has generated $15837 in revenue, or 13% less revenue. So who pays this "missing chunk"?
In addition, the 30k earner sees a tax reduction of $746, or 10.9%. The 50k earner sees a tax reduction of 13.6%. How is this "fair"?

If you apply the "higher income decreases APC" principle it becomes even more unbalanced and obvious where the flaws are.

[SwampdonkeyPLD]

So Fairtax has generated $15837 in revenue, or 13% less revenue. So who pays this "missing chunk"?

The people not paying right now, illegals, tourists, and tax evaders like drug dealers.

In addition, the 30k earner sees a tax reduction of $746, or 10.9%. The 50k earner sees a tax reduction of 13.6%. How is this "fair"?

How did you determine how much tax they pay under the Fairtax? The chart shows someone making 30k a year paying $5092 in Fairtaxes. My guess is it has something to do with spending and the poverty level.

[aurik]

So Fairtax has generated $15837 in revenue, or 13% less revenue. So who pays this "missing chunk"?

The people not paying right now, illegals, tourists, and tax evaders like drug dealers.

And what happens when I figure in an average propensity to not spend their whole income? That's a ton of missing revenue.

In addition, the 30k earner sees a tax reduction of $746, or 10.9%. The 50k earner sees a tax reduction of 13.6%. How is this "fair"?

How did you determine how much tax they pay under the Fairtax? The chart shows someone making 30k a year paying $5092 in Fairtaxes. My guess is it has something to do with spending and the poverty level.

(total_disposable_income / 1.23) * 0.23. I assumed they both spend all their income (which isn't true, but that assumption favors consumption taxes greatly).

[Anyway]

Because I can't allow these douches to post anymore pointless arguement posts that they basically cut and paste in any topic about taxes, without at least trying to put this thread back on track.

Well, with my tax return, I'm buying a plane ticket to Brazil. Best friend of 12 years got deported for no reason. Visiting in July. Very excited... also kind of worried someone will steal my organs a la Turistas

[SwampdonkeyPLD]

http://www.fairtax.org/site/PageServer? ... calculator Heres the calculator I used Aurik. Maybe you can see how they did it, or if it's BS.

[aurik]

If someone spends ~$5,092 in taxes, and the only tax is a 23% consumption tax, then they consumed

5092 / 0.23 = 22193

Or a total expenditure of $27285

But we earned $30k, and got a poverty rebate of $2300...Where did the extra $5,000 go

So I'm calling BS on their math.

[fantasticdan]

I haven't read to much into this, but wouldn't the "fair tax" plan cause a huge shift of domestic purchases to imports, or would they also plan on taxing imports? Either way, it seems totally fucked up in that regard.

[SwampdonkeyPLD]

Yea I didn't get it either Aurik, did you look at the calculator?

I haven't read to much into this, but wouldn't the "fair tax" plan cause a huge shift of domestic purchases to imports, or would they also plan on taxing imports? Either way, it seems totally fucked up in that regard.

Anything sold in the U.S. is taxed and because prices stay the same, if there is no incentive to change now, then there is no reason to change under the Fairtax.

[fantasticdan]

I haven't read to much into this, but wouldn't the "fair tax" plan cause a huge shift of domestic purchases to imports, or would they also plan on taxing imports? Either way, it seems totally fucked up in that regard.

Anything sold in the U.S. is taxed and because prices stay the same, if there is no incentive to change now, then there is no reason to change under the Fairtax.

How exactly did you manage to change my name into someone that hasn't even posted on this page?

Anyway, many people including myself ALREADY buy things from out of state, or import from outside the US, to avoid the CURRENT sales tax, which is only around 8% in new york. If a 23% sales tax was implemented, I would sure as hell be avoiding it by importing if it were possible on everything I could, and I'm sure many people would do the same thing, especially on expensive purchases.

On the other hand, if you start (trying) to tax imports in the same way, you open up an entirely different can of worms.

[SwampdonkeyPLD]

I haven't read to much into this, but wouldn't the "fair tax" plan cause a huge shift of domestic purchases to imports, or would they also plan on taxing imports? Either way, it seems totally fucked up in that regard.

Anything sold in the U.S. is taxed and because prices stay the same, if there is no incentive to change now, then there is no reason to change under the Fairtax.

Anyway, many people including myself ALREADY buy things from out of state, or import from outside the US, to avoid the CURRENT sales tax, which is only around 8% in new york. If a 23% sales tax was implemented, I would sure as hell be avoiding it by importing if it were possible on everything I could, and I'm sure many people would do the same thing, especially on expensive purchases.

On the other hand, if you start (trying) to tax imports in the same way, you open up an entirely different can of worms.

Under the Fairtax you will do the same then, prices will essentially stay the same because embedded costs disapear, so there is no reason for people to change buying patterns.

[Kyreth]

Kindly edit my (wrongly quoted) name out of this, you two. I see you fixed it on the first one already.

[fantasticdan]

Under the Fairtax you will do the same then, prices will essentially stay the same because embedded costs disapear, so there is no reason for people to change buying patterns.

Oh?

Most importantly, the FairTax does not burden U.S. exports the way the current income tax system does. The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries’ value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.

http://www.fairtax.org/site/PageServer? ... _thumbnail

You don't know much about this tax plan you're so fond of do you?

[SwampdonkeyPLD]

Under the Fairtax you will do the same then, prices will essentially stay the same because embedded costs disapear, so there is no reason for people to change buying patterns.

Oh?

Most importantly, the FairTax does not burden U.S. exports the way the current income tax system does. The FairTax removes the cost of corporate taxes and compliance costs from the cost of U.S. exports, putting U.S. exports on a level playing field with foreign competitors. Lower prices sharply increase demand for U.S. exports, thereby increasing job creation in U.S. manufacturing sectors. At home, imports are subject to the same FairTax rate as domestically produced goods. Not only does the FairTax put U.S. products sold here on the same tax footing as foreign imports, but the dramatic lowering of compliance costs in comparison to other countries’ value-added taxes also gives U.S. products a definitive pricing advantage which foreign tax systems cannot match.

http://www.fairtax.org/site/PageServer? ... _thumbnail

You don't know much about this tax plan you're so fond of do you?

Um...where did I say foreign goods wouldn't be taxed? You don't know much about reading do you?

[archibaldcrane]

Under the Fairtax you will do the same then, prices will essentially stay the same because embedded costs disapear, so there is no reason for people to change buying patterns.

Well, if current goods stay the same price, as "embedded" taxes are replaced with the fairtax, but imported goods, with no "embedded" taxes to be removed, are also under the 23% sales tax, they would cost considerably more then before, which would shift buying patterns towards domestic goods.

[aurik]

Which is protectionist, and ends up increasing the price of goods overall.

[SwampdonkeyPLD]

I thought companies that earn money here are subject to the taxes here.

[archibaldcrane]

I thought companies that earn money here are subject to the taxes here.

If you produce a good entirely in china, it won't have "american embedded taxes" in it. Those taxes would be removed under fairtax if the good was produced in america, but since it's not produced in america it would have "embedded chinese taxes" still intact. Once shipped to america and sold, the 23% fairtax would be put on top, therefore significantly increasing the price of imports. It would discourage some American companies from going overseas, as the competitive advantage of producing there, selling here would be reduced, but yeah. There would be many effects from this in regards to import/export.

[SwampdonkeyPLD]

I thought companies that earn money here are subject to the taxes here.

If you produce a good entirely in china, it won't have "american embedded taxes" in it. Those taxes would be removed under fairtax if the good was produced in america, but since it's not produced in america it would have "embedded chinese taxes" still intact. Once shipped to america and sold, the 23% fairtax would be put on top, therefore significantly increasing the price of imports. It would discourage some American companies from going overseas, as the competitive advantage of producing there, selling here would be reduced, but yeah. There would be many effects from this in regards to import/export.

So that would mean in order to compete foreign companies would need to relocate here right? If they did that there would be no embedded foreign taxes in the price of their goods, nor when they ship the goods from America to other countries would there be any embedded taxes, right?

[fantasticdan]

Um...where did I say foreign goods wouldn't be taxed? You don't know much about reading do you?

You implied it, when you responded to my questions about imports with statements like this:

Under the Fairtax you will do the same then, prices will essentially stay the same because embedded costs disapear, so there is no reason for people to change buying patterns.

Either that or you're enough of an idiot to think a 23% tax on top of imports that aren't currently taxed at all wouldn't change 'buying patterns'. Maybe I gave you too much credit.