Easy! Warren Buffet pays 35% now. He would pay 23%(arbitrary) with the Flat Tax.
He would get a tax cut. Theres no doubt about that, is there?
(Mind you, he can afford it)
if the total income stays the same, and the Wealthy pay less, then quite obviously the POOR pay more. How simple can that be?
Yes, there is doubt. He pays 35% on his INCOME, under the Fair Tax plan he would pay 23% (not arbitrary, it was set to ensure a revenue neutral change, if it turns out not to be neutral it will be adjusted) of what he CONSUMES. You're comparing apples to oranges so it's not really that simple. Also, don't you realize how easy it is for rich people like Warren Buffet to pay big bucks to accountants to manipulate the tax code to find every single loop hole that exists to virtually eliminate his own tax burden? Are you really trying to ensure that all of those tax avoiding benefits that the rich have and the poor don't are preserved?
Something that is a little easier to grasp is this; the poor get all of their payroll taxes returned to them at the end of the year but they still pay Social Security and Medicare tax. Their employer pays a payroll tax for them to work effectively lowering their wages. They also pay the embedded tax on every item they purchase. Under the Fair Tax plan, they would not pay one penny in taxes. So, their tax burden would go down to ZERO. Now that's simple!
So brining thirty-five (the income tax rate on the rich) closer to zero (the income tax rate of the poor) would not, in your opinion, qualify as "fair"??? I'm curious, what's your definition of "fair"?
Don't forget, the poor are paying Social Security and Medicare taxes today at the exact same rate that the rich are. They would not pay anything under the Fair Tax.
The purpose of taxation is for the government to levy funds to serve the public.
Anything I have said regarding savings is a by product of a new taxation system.
Ok. But you don't justify doing things with "by products". Our current system of taxation is one built upon justified "by products", and that's why it's broken.
I figure I'm going to pay 5500 to 6600 bucks a year regardless of the system. The fair tax simply drags it out in the open rather than hiding it in witholdings. How many Americans actually know what they pay in taxes each year? Most talk about "take home pay" and think that they "got money back" after their tax returns.
All fair. But if you think this "Fair" Tax thing isn't going to seriously modify the taxation levels of most people, you're being sold a bag of crap. The "Fair" Tax would cause my personal taxes to shrink and my corporate taxes to almost nothing. Furthermore, it would cause a lot of margin-sensitive business's taxes to skyrocket, and a lot of middle class taxes to increase greatly or shrink greatly, all depending on consumption habits. Overall revenue neutrality may be possible, but individual tax neutrality isn't going to be.
Despite the personal financial benefits of this plan, I think linking taxation to consumption is a poor idea. It would be better than the current system wherein taxes are linked to little more than political whims, but that's not a tough standard to beat.
Yes, there is doubt. He pays 35% on his INCOME, under the Fair Tax plan he would pay 23% (not arbitrary, it was set to ensure a revenue neutral change, if it turns out not to be neutral it will be adjusted) of what he CONSUMES.
Mr Buffett can only "consume" so much. Lets just say he's got expensive taste (he doesn't). He lives extravigantly, and spends tens, HUNDREDS of millions of dollars a year on Yachts, Hookers, Blow, and Pearl Jam posters.
The dude makes several Billion dollars a year.
For your arguement, he would need to CONSUME 1.52 times his income.
MSG 9/11/98, Jones Beach 8/24/2000, Saratoga 8/30/2000, Albany 4/29/03, Boston 7/2/03, Philly 7/5/03, MSG 7/9/03, Boston 9/29/04, Montreal 9/15/05, Albany 5/12/06, Hartford 5/13/06, Boston 5/24/06, Boston 5/25/06, Hartford 6/27/08, Boston 6/30/08, EV Boston 8/2/08
Its not an arguement that can be won or lost by either side. It all depends on your world view.
Do you believe in Social justice or "Dog eat Dog".
And obviously you feel differently than I.
I believe in helping people, I take time out of my life to do so. I feel this is going to help people especially average people. Hell I'm not rich I have two jobs and I make almost 40K a year. Simply put the fair tax does far more to help people than the current system and the current system actually punishes success and maintains the status quo.
This is social justice, this is not taking away government programs at all not one bit, and it's effectively giving the people most burdened by taxes...(the lower middle class) more money to use on the various costs of life.
The fair tax simply replaces the current system we have with a new revenue system for the government. Being revenue neutral not one less dime will be collected, and in the consumer driven economy that we are in, more than likely the money coming in will actually be higher than it is currently.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
If you work 2 jobs and make 40K a year, I am glad you aren't in charge of Tax policy.
MSG 9/11/98, Jones Beach 8/24/2000, Saratoga 8/30/2000, Albany 4/29/03, Boston 7/2/03, Philly 7/5/03, MSG 7/9/03, Boston 9/29/04, Montreal 9/15/05, Albany 5/12/06, Hartford 5/13/06, Boston 5/24/06, Boston 5/25/06, Hartford 6/27/08, Boston 6/30/08, EV Boston 8/2/08
Don't forget, the poor are paying Social Security and Medicare taxes today at the exact same rate that the rich are. They would not pay anything under the Fair Tax.
Yes, but they're also collecting Social Security at the same rate and Medicare at a much higher rate than the rich are. The so-called "Fair" Tax will not address this problem. Furthermore, the poor would pay much under this tax. They'll pay increased prices for most low-margin goods, as well as their own taxes for consumption on above poverty-level expenditures.
That was my wording not his, I said it was something to that effect. I was just trying to generalize, point out the gist of it. You're assuming way too much I think. You can read that declaration, even with my crappy wording, and answer yes and not be considered a "crazy liberal." Is it more important to provide roads to drive on, yes, is it more important to provide spinach subsides, no. Had I changed the phrase "their families" to "themselves" would that be better? If so, do that, it's still the same point that people in government tend to think they can take our money without being accountable for providing something useful to the greater society. Democrats or Republicans, it doesn't matter. That's just one method to force public accountability on everyone in an elected office.
But we disgress... The Fair Tax is where it's at. Wouldn't it be nice to know how much you're actually paying in taxes rather than having 3 or 4 levels of taxation embedded into the price of a product? Hell, do we even realize that the government makes more money off of a gallon of gasoline than the oil companies themselves do? Is that right?
No adding anything to the end of the statement. I would have simply phrased it "I believe that it is more important to the greater good of society to tax the citizens to pay for X rather than allowing them to keep the money." For liberals, the "X" is assumed to be for the benefit of families and their future - and for conservatives, "to provide for their families and their future" is implied, as they often believe these things are being hurt whenever money is taxed.
if you only pay 5500 a year in Federal taxes, then you really dont make a ton of money (even with a mortgage and kids, you cant make more than 75K)
You will ABSOLUTELY pay more under the "Fair" tax. Thats called math.
Such a big proponent now?
Absolutely. I actually only earn about 39K a year and I would be a Hell of a lot better under the Fair Tax. Actually because I don't live paycheck to paycheck and I am pretty smart with my money I could potentially even decrease that tax burden because I'd be buying a lot of used goods.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
Yes, but they're also collecting Social Security at the same rate and Medicare at a much higher rate than the rich are. The so-called "Fair" Tax will not address this problem. Furthermore, the poor would pay much under this tax. They'll pay increased prices for most low-margin goods, as well as their own taxes for consumption on above poverty-level expenditures.
Once the embedded taxes are removed free market competition will drive the prices down.
you are not paying social security or medicare out of your paycheck anymore either I believe. I think that's included in the 23%
about social security
{
Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.
Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received. }
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
Despite the personal financial benefits of this plan, I think linking taxation to consumption is a poor idea. It would be better than the current system wherein taxes are linked to little more than political whims, but that's not a tough standard to beat.
What about the effects on businesses? We all know that businesses don't pay taxes, they pass them on to their consumers. We also know that most other governments don't tax companies for their sells overseas, we do. Establishing the Fair Tax plan would put US companies in the ultimate advantage. They would be able to sell their products at a competitive price and may change America's number one export, manufacturing jobs to something else.
Once the embedded taxes are removed free market competition will drive the prices down.
Huh? This makes no sense. The "Fair" Tax introduces embedded taxes. It doesn't remove them. Right now corporate taxes are paid on profits. Effectively, you will now quadruple taxes on a corporation's cost of goods sold. So if a business is high-margin like my own, you basically eliminate my tax burden since my cost of goods sold is largely just untaxed salaries. However, a business whose products are dependent on taxable widgets gets ass-raped by your 20% tax or whatever it is, thereby forcing them to dramatically increase prices. And since the majority of the products purchased by the poor are low-margin items like food and disposable products rather than services, they'll bear the brunt of those price increases.
Mr Buffett can only "consume" so much. Lets just say he's got expensive taste (he doesn't). He lives extravigantly, and spends tens, HUNDREDS of millions of dollars a year on Yachts, Hookers, Blow, and Pearl Jam posters.
The dude makes several Billion dollars a year.
For your arguement, he would need to CONSUME 1.52 times his income.
What about the rest of my argument? Are you trying to ensure the loopholes of the rich are ensured while acting like you're for the poor? I'm citing real examples of how the poor will be helped, you're citing examples of how the rich won't be hurt. I think it's a guise to ensure the privileges afforded to rich are not screwed up. You're not even acknowledging any of the benefits to the poor I mentioned. I'm not convinced that's your main concern.
The question still lingers: What's the official purpose of taxation? To provide services to society or to manipulate income disparity?
Heres the reality.. it lowers the tax rate of the rich, and raises the rate on the poor.
Thats the bottom line.
The only reason it has more than scant public support is because Americans are tought from birth that if you work hard, you can make it rich. And when they make it rich, they dont want to be "unfaily" taxed.
But the reality is, in this country, societies biggest ill (beside social conservatism) is income disparity and the social stresses it brings. The "Fair" Tax does nothing but increase the problem.
what the fuck is a gini coefficient? and if the taxes for both go down, that's a good thing. the wealth divide might increase somewhat (or it might not, rich people buy a lot more expensive shit that would be taxed), but those at the bottom would pay nothing in taxes. nothing. how does that hurt the poor?
Huh? This makes no sense. The "Fair" Tax introduces embedded taxes. It doesn't remove them. Right now corporate taxes are paid on profits. Effectively, you will now quadruple taxes on a corporation's cost of goods sold. So if a business is high-margin like my own, you basically eliminate my tax burden since my cost of goods sold is largely just untaxed salaries. However, a business whose products are dependent on taxable widgets gets ass-raped by your 20% tax or whatever it is, thereby forcing them to dramatically increase prices. And since the majority of the products purchased by the poor are low-margin items like food and disposable products rather than services, they'll bear the brunt of those price increases.
FFG, I'll talk about it later, It's easier to explain if you get a chance to read the book or check out the website, I've got to do some work now. Cheers.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
What about the effects on businesses? We all know that businesses don't pay taxes, they pass them on to their consumers.
This is an overstatement that is entirely dependent on perspective. Right now, my business is taxed on its profits. Those profits come out of the pockets of consumers, so you could say that consumers are just paying those taxes. But at the same time, other business are paying those consumers, so you can just say that other businesses are paying my taxes. And so on and so on.
Labor pays for taxation, and to differentiate between corporate labor and consumer labor is kind of silly since both are effectively the same thing.
We also know that most other governments don't tax companies for their sells overseas, we do. Establishing the Fair Tax plan would put US companies in the ultimate advantage. They would be able to sell their products at a competitive price and may change America's number one export, manufacturing jobs to something else.
If you want to put US companies at the ultimate advantage, just stop taxing them altogether. But do that because corporations aren't actually people. They can't vote, they don't have rights. Their votes and their rights extend from the votes and rights of the people who work for them, and those people are already paying taxes - corporate taxation is redundant taxation. Eliminating a corporate tax system makes a hell of a lot more sense than just trying to rig a contrived system in their favor, especially when the unintended consequences of this plan will screw over a lot of businesses.
All fair. But if you think this "Fair" Tax thing isn't going to seriously modify the taxation levels of most people, you're being sold a bag of crap. The "Fair" Tax would cause my personal taxes to shrink and my corporate taxes to almost nothing. Furthermore, it would cause a lot of margin-sensitive business's taxes to skyrocket, and a lot of middle class taxes to increase greatly or shrink greatly, all depending on consumption habits. Overall revenue neutrality may be possible, but individual tax neutrality isn't going to be.
Despite the personal financial benefits of this plan, I think linking taxation to consumption is a poor idea. It would be better than the current system wherein taxes are linked to little more than political whims, but that's not a tough standard to beat.
what is wrong with that? consumption seems to be a helluva good way to base the tax system. you wanna throw your money around on lots of luxury items, fine, you can clearly afford a larger tax burden. you wanna pinch pennies and amass fortunes eating nothing but ramen for decades, more power to you. that seems infinitely better than an arbitrary income tax. it's probably as close to a use tax as we can get.
you keep saying that, but you show absolutely zero math to support it. again, how do the poor lose money on this tax?
he said he lives "paycheck to paycheck" which means he is consuming all of the income that me makes every pay period. He consumes 100% of his income. That means he pays 23% of 40K which is 9200
Thats more than 5500 that he pays now, correct?
MSG 9/11/98, Jones Beach 8/24/2000, Saratoga 8/30/2000, Albany 4/29/03, Boston 7/2/03, Philly 7/5/03, MSG 7/9/03, Boston 9/29/04, Montreal 9/15/05, Albany 5/12/06, Hartford 5/13/06, Boston 5/24/06, Boston 5/25/06, Hartford 6/27/08, Boston 6/30/08, EV Boston 8/2/08
Are you fucking kidding me? We're trying to have an intelligent conversation and this is where you go? Un-fucking-believable.
dont you know you can measure someone's intelligence and worth by their income? poor people are stupid, that's why they're poor! that's also why we have to have the government feed them and clothe them, becos they're incapable of doing it themselves.
he said he lives "paycheck to paycheck" which means he is consuming all of the income that me makes every pay period. He consumes 100% of his income. That means he pays 23% of 40K which is 9200
Thats more than 5500 that he pays now, correct?
he said he doesn't live paycheck to paycheck. and i was not asking about him, im asking how a person who pays tax now is worse off if they have to pay no tax at all?
Huh? This makes no sense. The "Fair" Tax introduces embedded taxes. It doesn't remove them. Right now corporate taxes are paid on profits. Effectively, you will now quadruple taxes on a corporation's cost of goods sold. So if a business is high-margin like my own, you basically eliminate my tax burden since my cost of goods sold is largely just untaxed salaries. However, a business whose products are dependent on taxable widgets gets ass-raped by your 20% tax or whatever it is, thereby forcing them to dramatically increase prices. And since the majority of the products purchased by the poor are low-margin items like food and disposable products rather than services, they'll bear the brunt of those price increases.
A business whose products are dependent on taxable widgets may be better off than the service industries. Imagine the raw product changes hands 4 times as it's crafted into the final widget. Each change of hands results in a tax. By the time it gets to the market, it's got 4 taxes embedded in it. The Fair Tax would remove all of the embedded taxes and slap 23% on at the end. That's the major reason the price of products are projected to decline under this plan.
dont you know you can measure someone's intelligence and worth by their income? poor people are stupid, that's why they're poor! that's also why we have to have the government feed them and clothe them, becos they're incapable of doing it themselves.
MSG 9/11/98, Jones Beach 8/24/2000, Saratoga 8/30/2000, Albany 4/29/03, Boston 7/2/03, Philly 7/5/03, MSG 7/9/03, Boston 9/29/04, Montreal 9/15/05, Albany 5/12/06, Hartford 5/13/06, Boston 5/24/06, Boston 5/25/06, Hartford 6/27/08, Boston 6/30/08, EV Boston 8/2/08
If you want to put US companies at the ultimate advantage, just stop taxing them altogether. But do that because corporations aren't actually people. They can't vote, they don't have rights. Their votes and their rights extend from the votes and rights of the people who work for them, and those people are already paying taxes - corporate taxation is redundant taxation. Eliminating a corporate tax system makes a hell of a lot more sense than just trying to rig a contrived system in their favor, especially when the unintended consequences of this plan will screw over a lot of businesses.
I'd be willing to engage in that debate. If a Congressman had a bill to implement this out there and there was a book describing the details etc, I'd be open to that discussion.
what is wrong with that? consumption seems to be a helluva good way to base the tax system. you wanna throw your money around on lots of luxury items, fine, you can clearly afford a larger tax burden. you wanna pinch pennies and amass fortunes eating nothing but ramen for decades, more power to you. that seems infinitely better than an arbitrary income tax. it's probably as close to a use tax as we can get.
What do "luxury items" and "ramen noodles" have to do with taxes? Seriously, between people who want to link taxes to behaviors and people who want to link taxes to wealth and people who want to link taxes to consumption, the perspective on taxes has become so bizzare.
I certainly agree that this plan is better than an abitrary income tax system. But that's like saying my mom is hotter than my grandma. Trust me, you don't want either one.
Taxation is inextricably linked to the value of rights and services. We can ignore this fact all we'd like, but we cannot escape it.
How does the FairTax protect low-income and lower-middle-income families and individuals?
Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level pay a tax of only 11.5 percent – a rate much lower than the income and payroll tax burden they bear today.
Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower-income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. Retaining the present tax system makes economic progress needlessly slow, thus harming low-income people the most.
In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower-income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more business taxes hidden in the price of goods and services, and used goods are tax free.
Back to FAQ Index
Is it fair for rich people to get the exact same FairTax rebate from the federal government as the poorest person in America?
Let’s look at a billionaire under the FairTax – if he spends $10,000,000 dollars he pays a tax of $2,300,000 and gets a rebate of $4,508 (assuming he is married and has no children). His effective tax rate as a percent of spending is 22.95 percent.
Now, let’s look at a middle-income married couple with no children under the FairTax – if they spend $40,000, they pay $4,692 net of their rebate for an effective tax rate of 11.7 percent. The effective tax rate increases as spending increases, but never exceeds 23 percent!
Figure 4: Comparison of effective tax rates: FairTax, Income tax
FairTax Current Tax
Expenditures = income $40,000 $40,000
Net tax $4,692 $5,870
Effective tax rate 11.7% 14.7%
In contrast, if this same couple earns $40,000 in wages today under the current tax system, they pay $2,810 in income taxes and $3,060 in payroll taxes for a total of $5,870 in taxes (14.7 percent). In addition, their employer pays another $3,060 in payroll taxes. Most economists agree that the employer payroll tax is actually borne by employees in the form of lower wages. Looked at this way, this couple is paying $8,930 (22.3 percent) in taxes today, which doesn’t even include the hidden taxes they pay every time they make a purchase.
Finally, let’s look at a low-income couple under the FairTax – they pay no net FairTax at all. Today, under the income tax system, they not only pay 15 percent in payroll taxes, but they also pay hidden taxes – arising from corporate taxes, private sector compliance costs, and payroll taxes passed on to consumers and embedded in the price of everything they buy.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
I'd be willing to engage in that debate. If a Congressman had a bill to implement this out there and there was a book describing the details etc, I'd be open to that discussion.
I'm confused. Do you want to debate this, or do you want to wait until I write a book about it and become a Congressman?
Comments
Yes, there is doubt. He pays 35% on his INCOME, under the Fair Tax plan he would pay 23% (not arbitrary, it was set to ensure a revenue neutral change, if it turns out not to be neutral it will be adjusted) of what he CONSUMES. You're comparing apples to oranges so it's not really that simple. Also, don't you realize how easy it is for rich people like Warren Buffet to pay big bucks to accountants to manipulate the tax code to find every single loop hole that exists to virtually eliminate his own tax burden? Are you really trying to ensure that all of those tax avoiding benefits that the rich have and the poor don't are preserved?
Something that is a little easier to grasp is this; the poor get all of their payroll taxes returned to them at the end of the year but they still pay Social Security and Medicare tax. Their employer pays a payroll tax for them to work effectively lowering their wages. They also pay the embedded tax on every item they purchase. Under the Fair Tax plan, they would not pay one penny in taxes. So, their tax burden would go down to ZERO. Now that's simple!
Don't forget, the poor are paying Social Security and Medicare taxes today at the exact same rate that the rich are. They would not pay anything under the Fair Tax.
Ok. But you don't justify doing things with "by products". Our current system of taxation is one built upon justified "by products", and that's why it's broken.
All fair. But if you think this "Fair" Tax thing isn't going to seriously modify the taxation levels of most people, you're being sold a bag of crap. The "Fair" Tax would cause my personal taxes to shrink and my corporate taxes to almost nothing. Furthermore, it would cause a lot of margin-sensitive business's taxes to skyrocket, and a lot of middle class taxes to increase greatly or shrink greatly, all depending on consumption habits. Overall revenue neutrality may be possible, but individual tax neutrality isn't going to be.
Despite the personal financial benefits of this plan, I think linking taxation to consumption is a poor idea. It would be better than the current system wherein taxes are linked to little more than political whims, but that's not a tough standard to beat.
Mr Buffett can only "consume" so much. Lets just say he's got expensive taste (he doesn't). He lives extravigantly, and spends tens, HUNDREDS of millions of dollars a year on Yachts, Hookers, Blow, and Pearl Jam posters.
The dude makes several Billion dollars a year.
For your arguement, he would need to CONSUME 1.52 times his income.
I believe in helping people, I take time out of my life to do so. I feel this is going to help people especially average people. Hell I'm not rich I have two jobs and I make almost 40K a year. Simply put the fair tax does far more to help people than the current system and the current system actually punishes success and maintains the status quo.
This is social justice, this is not taking away government programs at all not one bit, and it's effectively giving the people most burdened by taxes...(the lower middle class) more money to use on the various costs of life.
The fair tax simply replaces the current system we have with a new revenue system for the government. Being revenue neutral not one less dime will be collected, and in the consumer driven economy that we are in, more than likely the money coming in will actually be higher than it is currently.
Yes, but they're also collecting Social Security at the same rate and Medicare at a much higher rate than the rich are. The so-called "Fair" Tax will not address this problem. Furthermore, the poor would pay much under this tax. They'll pay increased prices for most low-margin goods, as well as their own taxes for consumption on above poverty-level expenditures.
Absolutely. I actually only earn about 39K a year and I would be a Hell of a lot better under the Fair Tax. Actually because I don't live paycheck to paycheck and I am pretty smart with my money I could potentially even decrease that tax burden because I'd be buying a lot of used goods.
Once the embedded taxes are removed free market competition will drive the prices down.
you are not paying social security or medicare out of your paycheck anymore either I believe. I think that's included in the 23%
about social security
{
Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits. The transition to a reformed Social Security system is eased while ensuring there is sufficient funding to continue promised benefits.
Meanwhile, Social Security/Medicare funds are no longer triple-taxed as under the current system: 1) when payroll taxes are initially withheld; 2) when those withheld payroll taxes are counted as part of the taxable base for income tax purposes; and 3) when the promised benefits are finally received. }
What about the effects on businesses? We all know that businesses don't pay taxes, they pass them on to their consumers. We also know that most other governments don't tax companies for their sells overseas, we do. Establishing the Fair Tax plan would put US companies in the ultimate advantage. They would be able to sell their products at a competitive price and may change America's number one export, manufacturing jobs to something else.
One of my jobs is nearly free. I'm working in Sports Talk Radio. I only earn about 2G's a year on that right now because it's mostly promotions.
My other pays about 40K.
I appreciate your patronization though.
Come up with a better idea and we'll talk.
Huh? This makes no sense. The "Fair" Tax introduces embedded taxes. It doesn't remove them. Right now corporate taxes are paid on profits. Effectively, you will now quadruple taxes on a corporation's cost of goods sold. So if a business is high-margin like my own, you basically eliminate my tax burden since my cost of goods sold is largely just untaxed salaries. However, a business whose products are dependent on taxable widgets gets ass-raped by your 20% tax or whatever it is, thereby forcing them to dramatically increase prices. And since the majority of the products purchased by the poor are low-margin items like food and disposable products rather than services, they'll bear the brunt of those price increases.
What about the rest of my argument? Are you trying to ensure the loopholes of the rich are ensured while acting like you're for the poor? I'm citing real examples of how the poor will be helped, you're citing examples of how the rich won't be hurt. I think it's a guise to ensure the privileges afforded to rich are not screwed up. You're not even acknowledging any of the benefits to the poor I mentioned. I'm not convinced that's your main concern.
The question still lingers: What's the official purpose of taxation? To provide services to society or to manipulate income disparity?
what the fuck is a gini coefficient? and if the taxes for both go down, that's a good thing. the wealth divide might increase somewhat (or it might not, rich people buy a lot more expensive shit that would be taxed), but those at the bottom would pay nothing in taxes. nothing. how does that hurt the poor?
Are you fucking kidding me? We're trying to have an intelligent conversation and this is where you go? Un-fucking-believable.
FFG, I'll talk about it later, It's easier to explain if you get a chance to read the book or check out the website, I've got to do some work now. Cheers.
you keep saying that, but you show absolutely zero math to support it. again, how do the poor lose money on this tax?
This is an overstatement that is entirely dependent on perspective. Right now, my business is taxed on its profits. Those profits come out of the pockets of consumers, so you could say that consumers are just paying those taxes. But at the same time, other business are paying those consumers, so you can just say that other businesses are paying my taxes. And so on and so on.
Labor pays for taxation, and to differentiate between corporate labor and consumer labor is kind of silly since both are effectively the same thing.
If you want to put US companies at the ultimate advantage, just stop taxing them altogether. But do that because corporations aren't actually people. They can't vote, they don't have rights. Their votes and their rights extend from the votes and rights of the people who work for them, and those people are already paying taxes - corporate taxation is redundant taxation. Eliminating a corporate tax system makes a hell of a lot more sense than just trying to rig a contrived system in their favor, especially when the unintended consequences of this plan will screw over a lot of businesses.
what is wrong with that? consumption seems to be a helluva good way to base the tax system. you wanna throw your money around on lots of luxury items, fine, you can clearly afford a larger tax burden. you wanna pinch pennies and amass fortunes eating nothing but ramen for decades, more power to you. that seems infinitely better than an arbitrary income tax. it's probably as close to a use tax as we can get.
he said he lives "paycheck to paycheck" which means he is consuming all of the income that me makes every pay period. He consumes 100% of his income. That means he pays 23% of 40K which is 9200
Thats more than 5500 that he pays now, correct?
dont you know you can measure someone's intelligence and worth by their income? poor people are stupid, that's why they're poor! that's also why we have to have the government feed them and clothe them, becos they're incapable of doing it themselves.
he said he doesn't live paycheck to paycheck. and i was not asking about him, im asking how a person who pays tax now is worse off if they have to pay no tax at all?
A business whose products are dependent on taxable widgets may be better off than the service industries. Imagine the raw product changes hands 4 times as it's crafted into the final widget. Each change of hands results in a tax. By the time it gets to the market, it's got 4 taxes embedded in it. The Fair Tax would remove all of the embedded taxes and slap 23% on at the end. That's the major reason the price of products are projected to decline under this plan.
Thats True, George Bush makes $400K.
But here's the cold hard numbers:
http://www.usatoday.com/news/nation/census/2002-07-18-degree-dollars.htm
I'd be willing to engage in that debate. If a Congressman had a bill to implement this out there and there was a book describing the details etc, I'd be open to that discussion.
What do "luxury items" and "ramen noodles" have to do with taxes? Seriously, between people who want to link taxes to behaviors and people who want to link taxes to wealth and people who want to link taxes to consumption, the perspective on taxes has become so bizzare.
I certainly agree that this plan is better than an abitrary income tax system. But that's like saying my mom is hotter than my grandma. Trust me, you don't want either one.
Taxation is inextricably linked to the value of rights and services. We can ignore this fact all we'd like, but we cannot escape it.
How does the FairTax protect low-income and lower-middle-income families and individuals?
Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level pay a tax of only 11.5 percent – a rate much lower than the income and payroll tax burden they bear today.
Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower-income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. Retaining the present tax system makes economic progress needlessly slow, thus harming low-income people the most.
In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower-income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more business taxes hidden in the price of goods and services, and used goods are tax free.
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Is it fair for rich people to get the exact same FairTax rebate from the federal government as the poorest person in America?
Let’s look at a billionaire under the FairTax – if he spends $10,000,000 dollars he pays a tax of $2,300,000 and gets a rebate of $4,508 (assuming he is married and has no children). His effective tax rate as a percent of spending is 22.95 percent.
Now, let’s look at a middle-income married couple with no children under the FairTax – if they spend $40,000, they pay $4,692 net of their rebate for an effective tax rate of 11.7 percent. The effective tax rate increases as spending increases, but never exceeds 23 percent!
Figure 4: Comparison of effective tax rates: FairTax, Income tax
FairTax Current Tax
Expenditures = income $40,000 $40,000
Net tax $4,692 $5,870
Effective tax rate 11.7% 14.7%
In contrast, if this same couple earns $40,000 in wages today under the current tax system, they pay $2,810 in income taxes and $3,060 in payroll taxes for a total of $5,870 in taxes (14.7 percent). In addition, their employer pays another $3,060 in payroll taxes. Most economists agree that the employer payroll tax is actually borne by employees in the form of lower wages. Looked at this way, this couple is paying $8,930 (22.3 percent) in taxes today, which doesn’t even include the hidden taxes they pay every time they make a purchase.
Finally, let’s look at a low-income couple under the FairTax – they pay no net FairTax at all. Today, under the income tax system, they not only pay 15 percent in payroll taxes, but they also pay hidden taxes – arising from corporate taxes, private sector compliance costs, and payroll taxes passed on to consumers and embedded in the price of everything they buy.
I'm confused. Do you want to debate this, or do you want to wait until I write a book about it and become a Congressman?