Author Topic: Thoughts on Fairtax.org?  (Read 13220 times)

Desertman

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Re: Thoughts on Fairtax.org?
« Reply #25 on: April 02, 2014, 10:38:55 AM »
It would be kind of funny really.

When you get pulled over in your luxury car for speeding or something you could look the officer dead in the eye and say, "I pay your salary with this car!"

I do love the idea of this system, I would get to keep so much more of my money this way, and if there is one thing I love, it is money.
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Patuk

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Re: Thoughts on Fairtax.org?
« Reply #26 on: April 02, 2014, 12:25:22 PM »
How does the fairtax system take into account that imposing far higher taxes on products will make it much more attractive for people to smuggle things now seen as too mundane to bother with smuggling?

That's something for law enforcement to figure out.

I.. I don't even know where to begin.



Proposal one: I hereby ensure that, in order to feed our nation, all potatoes must be €1/kilo.

Rebuttal: wouldn't that put extreme stress on our nation's farmers?

Proposer: That's something for agriculture to figure out.



Proposal two: in combating pollution, cars will be banned henceforth.

Rebuttal: how exactly is our economy going to function without cars?

Proposer: That's for the citizenry to figure out.



I could try and keep this up, or I could not and point out that while fairtax might be a good idea, not addressing its flaws is an awfully weak way of trying to prove that you are in the right. 'Let the other people fix it, I like my idea' shouldn't be an argument that works anywhere, and it certainly won't with me.
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Patuk

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Re: Thoughts on Fairtax.org?
« Reply #27 on: April 02, 2014, 12:50:56 PM »
I'm against providing further incentive for people to hoard wealth.

Hoarding wealth his how anything happens in the world. Matter of fact the only reason money exists is because you can't hoard enough ears of corn long enough to buy a car without them rotting first. A fundamental function of economics you are against? Odd.

That's a strawman. The incentive that is there doesn't mean anyone has to like it. It certainly doesn't mean more of it is a good thing, or needs to be encouraged.

How does the fairtax system take into account that imposing far higher taxes on products will make it much more attractive for people to smuggle things now seen as too mundane to bother with smuggling?

Because businesses aren't taxed. And because components aren't taxed for manufacturing, building products in the USA will be cheaper. For instance I used to sell crowns and bridges for teeth. It cost $30 in materials and about $60-70 of labor and I'd sell them for $110. Well later I starting buying the finished product from china. It was $25 including the material and labor!!!!!!! Just the materials alone are far more expensive in the USA because each business that provides materials gets SLAMMED with taxes, and so do the people working for those companies.

Therefore except for some rare circumstances it will be break even just buying whatever "smuggled" thing here. Imports would be more expensive however because the cost of manufacturing them would remain the same. But a system like this would make USA a tax haven for industry to come here and manufacture to then EXPORT things without our sales tax. How cool is that? It would make us marginally more efficient than the rest of the world.

I do not think you understand what I mean by smuggling in this case, or, more specifically, how this smuggling would work. I also do not think you realise what the chief reason Chinese goods are cheaper is, but seeing as that isn't the point of what I'm saying here, I'm going to focus on smuggling.

Put simply, not charging anything but buying goods is going to increase domestic smuggling. If such an immense part of any product's cost is going to be in the taxes placed on it, it simply is going to be much more viable to sell goods under the table that as of right now, nobody at all would bother smuggling because it's not worth the effort. If your business could increase its turnover by enormous margins by simply evading the sales tax, I'm going to bet you here and now that the smuggle of mundane goods is going to be a thing.
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janeshephard

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Re: Thoughts on Fairtax.org?
« Reply #28 on: April 02, 2014, 12:56:28 PM »
How does the fairtax system take into account that imposing far higher taxes on products will make it much more attractive for people to smuggle things now seen as too mundane to bother with smuggling?

That's something for law enforcement to figure out.

I.. I don't even know where to begin.

So I read your examples and I guess I don't understand what you're getting at. We already have tariffs and import taxes in place and smuggling isn't a huge problem as far as I know.

Naturally people will try to hide sales in order to offer goods at a cheaper price and entice more consumers. Cops need to deal with that.

I live in a province with a 13% sales tax. I've never known anyone to run off to some sleazy black market to buy stuff... I mean I'm sure it exists but it's not a huge problem.

EDIT:

Patuk people aren't going to buy their denims and video games from a black market. They'll go to a mall and stuff and pay the sales tax.

How silly :)



« Last Edit: April 02, 2014, 12:58:09 PM by janeshephard »
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boog

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Re: Thoughts on Fairtax.org?
« Reply #29 on: April 02, 2014, 01:02:40 PM »
No.

How shitty. I already buy second hand shit to save money when I need to. Making me pay extra tax...

Just no.

Keep shitting on the poor more. It's already hard enough!
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Patuk

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Re: Thoughts on Fairtax.org?
« Reply #30 on: April 02, 2014, 01:06:28 PM »
How does the fairtax system take into account that imposing far higher taxes on products will make it much more attractive for people to smuggle things now seen as too mundane to bother with smuggling?

That's something for law enforcement to figure out.

I.. I don't even know where to begin.

So I read your examples and I guess I don't understand what you're getting at. We already have tariffs and import taxes in place and smuggling isn't a huge problem as far as I know.

Naturally people will try to hide sales in order to offer goods at a cheaper price and entice more consumers. Cops need to deal with that.

I live in a province with a 13% sales tax. I've never known anyone to run off to some sleazy black market to buy stuff... I mean I'm sure it exists but it's not a huge problem.

EDIT:

Patuk people aren't going to buy their denims and video games from a black market. They'll go to a mall and stuff and pay the sales tax.

How silly :)

If you'd read the entirety of my post, you'd actually realise smuggling does not only take place across borders.

People smuggling mundane, semi-inflexible goods isn't even unheard of. The 1950's had people smuggling butter. Fucking. Butter.

Regardless. Yes, if the price is sufficiently low, and with a sales tax this high it will be, people are going to buy their denims and video games on the black market.
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manonfire

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Re: Thoughts on Fairtax.org?
« Reply #31 on: April 02, 2014, 01:24:20 PM »
No.

How shitty. I already buy second hand shit to save money when I need to. Making me pay extra tax...

Just no.

Keep shitting on the poor more. It's already hard enough!

You actually end up paying less net tax overall.

I imagine even unemployment checks are untaxed, since it's technically classified as income.



Brytta Léofa

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Re: Thoughts on Fairtax.org?
« Reply #32 on: April 02, 2014, 01:25:10 PM »
Keep shitting on the poor more. It's already hard enough!

http://en.wikipedia.org/wiki/Distribution_of_the_FairTax_burden

Uh, it might save you money, boog. If your income's low enough, you might presently be paying no "federal income tax," or even getting paid back a bit in refundable credits.  But you're for darnshore paying your 12.4% FICA, the regressivest tax there is.
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boog

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Re: Thoughts on Fairtax.org?
« Reply #33 on: April 02, 2014, 01:38:17 PM »
That's what the new NC tax policy is supposed to do, too. It doesn't work as intended.
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janeshephard

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Re: Thoughts on Fairtax.org?
« Reply #34 on: April 02, 2014, 01:41:11 PM »
I'd like to know one thing. Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?

I know I'm going to get flamed by this, but aren't both groups using the same roads? Defended by the same military? Under the same set of laws?

That's one thing I never quite grasped. I understand we don't want to 'shit on the poor' and I agree, but the tax code shouldn't be changed in order to cater to any specific group. There should be a flat tax on everyone. Put it on spending and it makes more sense.
And there was some dwarf smoking spice, and I thought that was so scandalous because I'd only been playing in 'nak.


boog

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Re: Thoughts on Fairtax.org?
« Reply #35 on: April 02, 2014, 02:19:34 PM »
You don't think the tax on 'stuff'  you're proposing will work out well for the poor?

I don't think it's fair, because rich people can, weirdly enough, afford to buy. But if I'm gonna have to pay even more for food, clothes, or other essentials, that seems a little... skewed.
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Desertman

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Re: Thoughts on Fairtax.org?
« Reply #36 on: April 02, 2014, 02:20:40 PM »
You don't think the tax on 'stuff'  you're proposing will work out well for the poor?

I don't think it's fair, because rich people can, weirdly enough, afford to buy. But if I'm gonna have to pay even more for food, clothes, or other essentials, that seems a little... skewed.

The idea is you will have more to pay for those things because you won't be paying any income tax.
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Patuk

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Re: Thoughts on Fairtax.org?
« Reply #37 on: April 02, 2014, 02:28:17 PM »
I'd like to know one thing. Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?

I know I'm going to get flamed by this, but aren't both groups using the same roads? Defended by the same military? Under the same set of laws?

That's one thing I never quite grasped. I understand we don't want to 'shit on the poor' and I agree, but the tax code shouldn't be changed in order to cater to any specific group. There should be a flat tax on everyone. Put it on spending and it makes more sense.


Because it is the one way to actually keep society from running into the ground.
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manonfire

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Re: Thoughts on Fairtax.org?
« Reply #38 on: April 02, 2014, 02:38:14 PM »
Some numbers to crunch to for illustrative purposes.

mof's bi-weekly paycheck, before taxes: $7108

mof's bi-weekly paycheck, after federal, state, and local taxes: $4621 (effectively 35%)

biweekly delta: $2487

yearly delta (26 biweekly pay periods per year): $64662

I'll trade that extra $64k a year for a bump in sales tax. If Fairtax removes the capital gains tax, that frees up another $10k or so.

Siiiiign me up.




Desertman

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Re: Thoughts on Fairtax.org?
« Reply #39 on: April 02, 2014, 02:38:17 PM »
I'd like to know one thing. Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?


Please note, I just snagged $65,000 as "middle-class" from the wiki (I find a lot of people have different opinions on what middle-class is, depending on how much they make personally usually) and $20,000 is pretty poor in my own personal experience.


Current "Scaled" System Example:


"Poor Person": $20,000 a year - 10% tax rate - $2,000 paid in taxes. ($18,000 a year to survive. Been there, it sucks.)

"Wealthy/Middle-Class Person": $65,000 a year - 30% tax rate - $19,500 paid in taxes. ($45,500 a year to survive. Easily done.)

Current System Tax Revenue for the Government: $21,500.


Proposed "Flat Rate" Tax System Example: (Assuming everyone pays minimal flat rate 10% taxes across the board)

"Poor Person": $20,000 a year - 10% tax rate - $2,000 paid in taxes. (No change for the poor, their life stays the same.)

"Wealthy/Middle-Class Person": $65,000 a year - 10% tax rate - $6,500 paid in taxes. (See who is the real winner here?)

Flat Rate System Tax Revendue for the Government: $8,500
(This is why the government doesn't do this. The country couldn't run.)



Proposed "Flat Rate" Tax System Example: (Assuming everyone pays higher flat rate 30% taxes across the board)

"Poor Person": $20,000 a year - 30% tax rate - $6,000 paid in taxes ($14,000 a year to survive. This is why this isn't done.)

"Wealthy/Middle-Class Person": $65,000 a year - 30% tax rate - $19,500 paid in taxes. ($45,500 a year to survive. Easily done.)

Proposed Government Tax Revenue: $25,500. The money is good, but they also have an entire class of poverty stricken human beings who are just going to start living off of the system anyways and possibly be prone to insurrection.



Of course these numbers are just examples and not a perfect representation of the current tax code. But this is why the wealthy pay "more". Because the government gets more tax revenue with a scaled system than a flat rate system and it doesn't extremely improve the life of the wealthy or make being poor almost a death sentence.


Now, that is the "why".

Now, is it unfair to the wealthy? Without a doubt. I fully agree on that front. It isn't fair for Johnny Money to pay a higher percentage of his income in taxes than Jack Broke just because Johnny Money has managed to be more successful in life. It is kind of like a punishment for being more successful, and that is really sort of "Anti-American", ironically.  

If you are going to have a "flat tax" system, putting it on spending does seem the most "fair" way to go about it without running the entire country into the ground.
« Last Edit: April 02, 2014, 02:56:32 PM by Desertman »
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lordcooper

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Re: Thoughts on Fairtax.org?
« Reply #40 on: April 02, 2014, 03:20:04 PM »
Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?

In 2013 the US brought in an estimated 5.4 trillion dollars in tax revenue.  With the current US population being 317,493,212 that averages out as $17,008 per person (we'll ignore that the existence of minors, students, the 14.9% unemployment rate, the retired, the disabled etc will drive the required amount per financially independent individual significantly higher for the time being).  Joe McPoorguy works a typical 40 hour workweek at a minimum wage ($7.25) job, meaning he earns $15,080 a year.

We'll also ignore common human decency and any form of ethics, so it's okay to tax someone into financial destitution.  You physically can't take more money from people than they earn (assuming no savings, which Joe McPoorguy is unlikely to have).  Even if we were okay with someone paying 100% of their income in taxes, Joe McPoorguy would not be able to pay his 'fair' share.

Now, there are 3.6 million hourly paid workers in the US who earn minimum wage or below.  We somehow manage to take all their money in taxes, leaving a shortfall of $6,940,800,000.  Damn it, gonna have to cut that money from the budget.  Oh shit, we've also got to imprison all these people for tax evasion (bit of a catch 22 here, given that prison costs money).  And oh, millions of other people are left without enough money to feed, clothe and house themselves.

So my answer to that one is going to have to be 'basic maths'.
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Desertman

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Re: Thoughts on Fairtax.org?
« Reply #41 on: April 02, 2014, 03:25:35 PM »
Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?

In 2013 the US brought in an estimated 5.4 trillion dollars in tax revenue.  With the current US population being 317,493,212 that averages out as $17,008 per person (we'll ignore that the existence of minors, students, the 14.9% unemployment rate, the retired, the disabled etc will drive the required amount per financially independent individual significantly higher for the time being).  Joe McPoorguy works a typical 40 hour workweek at a minimum wage ($7.25) job, meaning he earns $15,080 a year.

We'll also ignore common human decency and any form of ethics, so it's okay to tax someone into financial destitution.  You physically can't take more money from people than they earn (assuming no savings, which Joe McPoorguy is unlikely to have).  Even if we were okay with someone paying 100% of their income in taxes, Joe McPoorguy would not be able to pay his 'fair' share.

Now, there are 3.6 million hourly paid workers in the US who earn minimum wage or below.  We somehow manage to take all their money in taxes, leaving a shortfall of $6,940,800,000.  Damn it, gonna have to cut that money from the budget.  Oh shit, we've also got to imprison all these people for tax evasion (bit of a catch 22 here, given that prison costs money).  And oh, millions of other people are left without enough money to feed, clothe and house themselves.

So my answer to that one is going to have to be 'basic maths'.

This isn't what Jane means.

She isn't asking why someone who makes $20,000 a year isn't paying as much in taxes as someone who makes $65,000 a year. The answer to that is obvious, for all of the reasons you have stated. Basic maths.

What she is asking is why do Johnny Money and Jack Broke both not pay an equal percentage of their income in taxes. (It is the same answer, basic maths, but for different reasons.)

Right now Johnny Money pays a higher percentage of his income in taxes than Joe Broke. (10% and 30% for example.)
« Last Edit: April 02, 2014, 03:27:32 PM by Desertman »
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Brytta Léofa

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Re: Thoughts on Fairtax.org?
« Reply #42 on: April 02, 2014, 03:26:25 PM »
To be a little more ezzact, the United States goverment spent about $22 000 per worker last year.  ($3.5 trillion with 155 million people working--lordcooper, Wikipedia shows $2.8 trillion in 2013 revenue.)

Boogster, you're still missing the part of the FairTax where the gummint sends you extra money each month to buy groceries with.  I mean, I still think it's a bad idea, but the system is quite fussily balanced to AVOID screwing the poor.  30% higher prices, but also 13% more income just from eliminating FICA, and a regular check from the government for whatever tax you're likely to pay up to the poverty line. And, heck, probably exemptions for essentials like foodstuffs, as is common now.


Or we could just drastically reduce government spending by providing Social Security and Medicare only to the poor, scrapping our aircraft carriers, and pinky-swearing to ourselves to no-kidding never again help England and Germany "negotiate."  Or possibly with magick.
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Desertman

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Re: Thoughts on Fairtax.org?
« Reply #43 on: April 02, 2014, 03:29:27 PM »
scrapping our aircraft carriers

Shut yourn un-American mouth! If'n you ain't love it you leave it!

Jesus, Apple Pie, and Aircraft Carriers.

In that order, by God.

(Jesus eating apple pie commanding an aircraft carrier for bonus points.)
« Last Edit: April 02, 2014, 03:32:35 PM by Desertman »
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lordcooper

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Re: Thoughts on Fairtax.org?
« Reply #44 on: April 02, 2014, 03:33:29 PM »
Wikipedia shows $2.8 trillion in 2013 revenue

That's just federal, I was including state and local government too.

http://www.usgovernmentrevenue.com/fed_revenue_2013US
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Mood

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Re: Thoughts on Fairtax.org?
« Reply #45 on: April 02, 2014, 03:44:00 PM »
I'd like to know one thing. Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?

I know I'm going to get flamed by this, but aren't both groups using the same roads? Defended by the same military? Under the same set of laws?

That's one thing I never quite grasped. I understand we don't want to 'shit on the poor' and I agree, but the tax code shouldn't be changed in order to cater to any specific group. There should be a flat tax on everyone. Put it on spending and it makes more sense.


you do it to keep the working class from slitting your (class') greedy (proverbial) throat, which was an increasingly potent threat to The Powers That Be when modern notions such as progressive income taxation and a strong safety net came into being.
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Desertman

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Re: Thoughts on Fairtax.org?
« Reply #46 on: April 02, 2014, 03:50:35 PM »
I'd like to know one thing. Why is it an imperative that the 'poor' pay less in taxes than the 'rich' ?

I know I'm going to get flamed by this, but aren't both groups using the same roads? Defended by the same military? Under the same set of laws?

That's one thing I never quite grasped. I understand we don't want to 'shit on the poor' and I agree, but the tax code shouldn't be changed in order to cater to any specific group. There should be a flat tax on everyone. Put it on spending and it makes more sense.


you do it to keep the working class from slitting your (class') greedy (proverbial) throat, which was an increasingly potent threat to The Powers That Be when modern notions such as progressive income taxation and a strong safety net came into being.

This isn't fair. Jane does not hate nor does she want to persecute or needlessly hinder poor people. She kind of comes off that way, but I don't think it is intentional.

She is actually a fairly decent person in my opinion, based on the limited information I have. Some people just aren't good at portraying themselves the way they would prefer.
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Sardaukar

  • Posts: 579
Re: Thoughts on Fairtax.org?
« Reply #47 on: April 02, 2014, 04:03:50 PM »
Please note, I just snagged $65,000 as "middle-class" from the wiki (I find a lot of people have different opinions on what middle-class is, depending on how much they make personally usually) and $20,000 is pretty poor in my own personal experience.


Current "Scaled" System Example:


"Poor Person": $20,000 a year - 10% tax rate - $2,000 paid in taxes. ($18,000 a year to survive. Been there, it sucks.)

"Wealthy/Middle-Class Person": $65,000 a year - 30% tax rate - $19,500 paid in taxes. ($45,500 a year to survive. Easily done.)

Current System Tax Revenue for the Government: $21,500.

You, like most people, don’t understand the marginal tax rates of the progressive income tax system.

I’ve had to explain this before:

Quote from: Sardaukar from 2 years ago
I don't think you understand progressive income taxation.  The highest income earners aren't paying 35% on all their income.  They pay the 35% rate only on that income that is in above a certain point.  I can't be bothered to look up the cutoff points, but let's say the top income tax bracket starts at $200,000 per year.  If I make $200,001 in a year I'm only paying 35% on that $1 over the cutoff.

So if you think about it, unless a marginal tax rate is over 100% there is no scenario where earning more income would then lead to you actually taking home less money after taxes.  You didn't say it explicitly in your post, but I think you may believe is the case.

So to use your example, lets say the marginal tax rate for the first $40,000 of income is 10% and lets say that the marginal tax rate for income above $40,000 is 30% then the “Wealthy/Middle-Class Person” pays the following:

First $40,000 taxed at 10% = $4,000
+
Next $25,000 taxed at 30% = $7,500
=
$11,500 (which is < $19,500)
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Brytta Léofa

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Re: Thoughts on Fairtax.org?
« Reply #48 on: April 02, 2014, 04:14:39 PM »
To really muddy the water,
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boog

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Re: Thoughts on Fairtax.org?
« Reply #49 on: April 02, 2014, 04:38:05 PM »
Sardaukar is here to fight for me. Squee.
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