MyDD :: Fair Tax - Progressive?

Fair Tax - Progressive?

by Classical Liberal, Mon Oct 06, 2008 at 12:30:26 AM EST

I have been on this "Fair Tax" kick as of late and I am having problems finding issues with it. What do you guys think?

Permalink :: 50 Comments :: Post a Comment

Re: Fair Tax - Progressive? (2.00 / 1)

From FactCheck.org:

"...the bipartisan Advisory Panel on Tax Reform had "calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax." ...H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them."

McSame '08: Against All Hope - and Proud of It

by Its All So Goofy on Mon Oct 06, 2008 at 12:36:30 AM EST

URL to FactCheck.org article (none / 0)

http://www.factcheck.org/taxes/unspinnin g_the_fairtax.html

McSame '08: Against All Hope - and Proud of It

by Its All So Goofy on Mon Oct 06, 2008 at 12:37:30 AM EST

Re: URL to FactCheck.org article (none / 0)

Thank you for additional reading. Interesting choice for a resource of information. Still haven't changed my mind, though. That isn't a fact check sort of thing, you see there are about a billion "facts" that need to be looked at on this issue and much like any science these types of things are more of theories than facts.

Do you not like it then? Why?

by Classical Liberal on Mon Oct 06, 2008 at 12:55:28 AM EST
[ Parent ]

Re: URL to FactCheck.org article (none / 0)

I'm not all that emotional about taxes like the obsessive Republicans are. And I also don't mind taxing the wealthy. The fact is that they've benefited the most from this nation, so it seems perfectly fair to me that those who benefited the most should also owe the most back.

When the GOP starts whining about higher taxes, I really don't think about it all that much. I'm far, far more concerned about what it's cost when I've had to pay for my own health care coverage and when I'm paying several dollars more for the same groceries and the same amount of gas pre-sales tax.

As for paying taxes, I prefer it to starving old people, homeless veterans, and illiterate children. I'm patriotic that way.

McSame '08: Against All Hope - and Proud of It

by Its All So Goofy on Mon Oct 06, 2008 at 02:16:02 AM EST
[ Parent ]

Re: URL to FactCheck.org article (none / 0)

What does your comments have to do with the Fair Tax? Do you think the Fair tax is about paying less in taxes?

by Classical Liberal on Mon Oct 06, 2008 at 02:27:44 AM EST
[ Parent ]

It would be. . . (none / 0)

For the top 5% of income earners, as proposed by Huckabee it would be an enormous tax cut.

by shalca on Mon Oct 06, 2008 at 04:21:02 AM EST
[ Parent ]

Re: It would be. . . (none / 0)

According to the people which developed the fair tax, this would be a 0.9% decrease. Even if I accept your premise they only pay less if they buy less than they make, but money that is not spent(and taxed) goes back into the economy in the form of investment.

by Classical Liberal on Mon Oct 06, 2008 at 11:46:57 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

I like that you brought it up. We have to unshackle ourselves from the concept that Democrats are "Tax and Spend". Our message on taxes even this time is unclear.

Everyone should pay taxes because everyone uses gov't services. The concept of just nailing "the rich" on taxes is stupid and damages the economy and frankly, this kind of class warfare always hurts us at the polls.

What's wrong with a re-think on taxes for our party?

by OurYear2008 on Mon Oct 06, 2008 at 01:06:27 AM EST

Re: Fair Tax - Progressive? (none / 0)

This is a Republican troll trying to push a Huckabee-backed, incredibly regressive tax plan with a nightmare for administration.

This tax plan will greatly increase taxes on the poor and greatly decrease taxes on the wealthy.

Change has come to America.

by the mystical vortexes of sedona on Mon Oct 06, 2008 at 01:34:15 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Acctually according to FactCheck.org Americans for Fair Taxation project the very rich only get a 0.9% percent in tax reduction while the while the poorest actually get money back. Even with the Treasury Departments analysis which doesn't include the removal of payroll taxes the poorest get more money back.

FactCheck.org: Unspinning the Fair Tax

by Classical Liberal on Mon Oct 06, 2008 at 03:07:41 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (2.00 / 1)

So, according to that graph, the rich receive a tax cut, albeit a small one, and the lower middle class and median middle class receive a tax increase.

I'd love to see a graph of the tax cut on those making above $200,000 as opposed to lumping everyone that makes above $75,223 together.

by shalca on Mon Oct 06, 2008 at 04:24:29 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

I would love to see the graph you mentioned as well. I do see in increase to the middle class albeit a small one. Me how would fall into that category still feels it is worth it for transparency in Washington and simplicity. Once again, if I spend less, buy used(help the environment) I can control my taxes due.

by Classical Liberal on Mon Oct 06, 2008 at 11:50:16 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

More interesting than a wikipedia article?

by JENKINS on Mon Oct 06, 2008 at 02:14:10 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (2.00 / 1)

The "fair tax" is a legitimate idea, but I think it's a bad idea for a plethora of reasons.

The first being that it hurts purchasing. When everything gets more expensive, then people buy less. When they buy less, the economy slows down. This won't affect the very rich, but they don't drive the majority of the economy with their purchases. It WILL effect those on the very lowest levels of the tax scale because they aren't taxed all that much, but the new sales tax will FAR outstrip any additional income.

In addition, state taxes wouldn't be affected by most variations on the "fair tax", so you STILL have income tax and State and local level sales taxes tacked on top of whatever the new sales tax becomes.

The question also goes to what we do with imports and with goods purchased outside the U.S. and transported INTO the U.S.

It's one of those things that looks good at first glimpse, until you realize that the implications are both enormous and almost completely unknown.

Personally, I see it as a sledgehammer solution to a scalpel problem. There is no REAL way to tell what the effect would be on a WIDE variety of issues. It even reaches into our criminal justice system. Remember, Al Capone was busted on tax evasion.

by EvilAsh on Mon Oct 06, 2008 at 01:30:51 AM EST

Re: Fair Tax - Progressive? (none / 0)

I agree with some concern, change is always scary for some and this bill would make serious change in Washington.

Dammit people should buy less. Have you noticed we all spend more than we make. When did you become an advocate for consumerism?

Who cares what the states do, this is a federal policy. I am not trying to avoid paying taxes and the people of each state will decide how they want to be taxed.

Think about your arguement on imports. With the current system businesses pay taxes on the production of goods that increases the price for us and the people we export to. With the fair tax we tax new purchases on imports from all countries including those who do not invest as much in their labor force. The fair tax puts the US worker on the same playing field as the Chinese. We used to produce a lot more in the US and we can again.

Once again, I know this is a hugh change and there are many questions about it. It still sounds like something that would be good for America.

by Classical Liberal on Mon Oct 06, 2008 at 02:47:00 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (2.00 / 1)

People shouldn't buy "less", they shouldn't buy what they can't afford. That's a big problem with the "Fair" tax, it taxes what ultimately drives the economy, purchasing stuff. Not to mention that only Draconian rates would make up the lost revenue in the budget, and the fact that it is extremely Regressive in nature.

by JENKINS on Mon Oct 06, 2008 at 02:53:09 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

People should buy what ever the hell they want. The government should not be in the business of supporting people who prioritize their spending to their own detriment.

I can see your argument that the Fair Tax people may be underestimating the revenue generated by the program, but to say Draconian makes it sound like you have some clear understanding of what the rate will have to be. Is the 30% the number you are referring to?

Again I ask how is it "extremely" regressive in nature? No one pays taxes on their money spent up to the poverty line. This is equality.

If I can sum up the regressive argument. Basically it is regressive because the poor spend more of their income as a percentage than do the rich, but by that same measure they get much more of a rebate. For example all familys of four don't pay any taxes on the first $35,000 spent per year. This is handled through a "prebate" of $675 per month.

The rich only pay less if they do not spend their money in which case it is put toward creating jobs through investment, expanding businesses, etc.

by Classical Liberal on Mon Oct 06, 2008 at 03:27:06 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

If that is the case, that families of four get a 675 dollar check every month from the government, then the "fairtax" doesn't generate enough income by a even larger factor then what I said earlier. Also, what about things like health care? Is that taxed also?

How does the government support people who spend over their limits now? If anything, the arguement can be made that due to the newly strigent bankruptcy laws, it is actually harder now on people who are in debt then ever before.

by JENKINS on Mon Oct 06, 2008 at 03:48:01 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

I agree that the ammount of money the tax will generate is still in question and would need to be looked at even more. It does seem that is can be made up by everyone paying in.

The Fair Tax does tend to lean towards the MSA's approach where people pay for their own health care and insurance. Both are taxed and subject to additional tax credits. Additionaly all for profit health care and insurance companies will be not have to pay any corporate or payroll taxes, etc.

As far as supporting people who are spending more than they can afford, I am not sure their is any government insititution that can correct that problem. Debt is killing us all.

by Classical Liberal on Mon Oct 06, 2008 at 12:51:15 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Don't you see how your argument for the "fair tax" is now expanding to every corner of the economy and entitlements?
And your earlier argument about "being on the same footing as the Chinese" is nonsense. The reason we're not competitive with the Chinese is because our work-force has a standard of living several degrees above the Chinese workforce, not because of payroll taxes. To be on "equal footing", we would need to pay our workers roughly 2 dollars per hour with no health benefits.
I'm not saying that the idea isn't without merit, but it's an ENORMOUS gamble with little to no benefit. This "simple" system, in just the discussion here, is now rife with "prebates" and tax credits, which will in turn force the fair tax to rise, which will in turn increase the amount of the credits and "prebates". With a little more discussion, I'm sure we can turn this system into as big a mess as the current tax system. The argument that this tax will create jobs when the rich don't spend their money isn't far from the supply-side economics that have served us so miserably for the past thirty years. (Rich keep more money, so therefore they make more jobs for the rest of us.)

It's an attractive idea in the abstract, but the potential downside to this approach nears catastophic. And the upside is . . . what? Simplicity?

And finally, there's nothing wrong with a progressive tax rate. It's not as if taxing the mega-rich more is going to make people decide that they don't want to be mega-rich.

by EvilAsh on Mon Oct 06, 2008 at 10:34:01 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Sorry, but if there is ONE tax rate, the government will have to convience the entire public to support the new spending they want to do and my guess the number will come down. Right now have the country doesn't pay any taxes and has little investment or interest in how our country is run.

The upside is it cleans up about 75% of the corruption in Washington. Why do you think companies need lobbyists? Other than controlling regulation, they are arguing for all of the special tax breaks the politicians are handing out. No more of that.

by Classical Liberal on Tue Oct 07, 2008 at 06:49:23 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

"Why do you think companies need lobbyists? Other than controlling regulation, they are arguing for all of the special tax breaks the politicians are handing out. No more of that."

No, then they'd all just be arguing for special prebates and credits and earmarks and, as you said, lax regulation.

Yes, the tax code needs to be rewritten. But ANY system of taxes can be corrupted by lobbyists. Whether it be the Fair Tax or the current system. Until we limit lobbyist influence, it's all just tilting at windmills.

Regardless, instituting the Fair Tax would have ramifications so widespread that it is impossible to take them all into account. Could it work? Sure. It could also devastate the country in bizarre and unpredictable ways. It could stifle innovation from anyone but the already-wealthy due to the heightened cost of starting a business.
And we STILL wouldn't have solved the core problem, that lobbyists simply have too much influence over tax policy.

But back to your original question. "Fair Tax - Progressive?" The answer is 'no'. Because a progressive tax rate, by definition, increases the burden on those who can best afford it.

The Fair Tax primarily shifts the burden to the middle and lower classes. Granted, you've mentioned prebates for the poor, so the burden shifts even more heavily to the middle class, while the rich keeps more.

Because to bring in the same amount of money, it's got to come from somewhere. So, if the rich keep more the burden has to shift somewhere. With your prebates and credits, that means middle class.

by EvilAsh on Wed Oct 08, 2008 at 09:30:18 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

You don't seem to understand the "Fair" tax. Eveyone gets the same "prebate". All corporate taxes are removed. There would be ONE number that gets adjusted and that is the national sales tax. Bye-bye lobbyists.

The am begining to agree that the Fair Tax is not progressive, but I don't think it is regressive. That is the idea of it. I don't think that the purpose of the tax code is to even out the take home income.

Yes some burden is shifted to the largest portion of our citizens, but how else to you suppose spending in Washington is going to be curbed? WE CAN NOT AFFORD TO CONTINUE TO SPEND MONEY WE DO NOT HAVE(AT HOME AND IN GOVERNEMENT)!

I am a little sick of this "The Rich keeps more". It is stupid. What is money worth to rich people if they don't spend it? Nothing. Give me a break - Money does not buy happyness.

by Classical Liberal on Thu Oct 09, 2008 at 05:09:41 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Like the man said, money doesn't buy happiness, but it makes misery a lot more comfortable.

Yes, the rich spend their money. But they spend it on toys like bigger and bigger yachts, or summer homes in the Cayman Islands. That may create a few jobs, in the luxury yacht industry or the gold-plated umbrella-stand industry, but not the kinds of things you can grow an economy on.
The notion that the mega-wealthy automatically use their vast income to create business and jobs and better wages has repeatedly been proven to be a myth. With a few notable exceptions, the mega-wealthy use their wealth to get MORE wealth any way they can. Or they get into pissing contests with other mega-wealthy people. (This doesn't just happen with the wealthy, by the way. People from all social classes compete with their neighbors. Better cars, cooler barbecue grills, etc.) The wealthy also donate to a number of wonderful causes, but that STILL doesn't make the economy any stronger.
Under Reagan and Bush, and then under Bush again, the mega-wealthy got a LOT richer while everyone else stayed about the same or sunk.
Under Clinton, the mega-wealthy STILL got wealthier, but everyone else did better as well.
And your notion that instituting the Fair Tax would involve a perfect pristine bill without the lobbyists getting their hands on it in any way, shape, or form is a little nuts. Credits for all variety of things would be introduced.
In addition, a significant problem even with your "clean" version of the Fair Tax is that it would also remove the government's ability to effectively leverage incentives to shape the free-market system. And the free-market has shown itself to be remarkably short-sighted. (If it weren't, GM and Ford wouldn't have spent the last ten years focused exclusively on giant-mega-trucks and not a dime on hybrid technology.) There are a lot of reasons for this (mercenary CEOs looking only at next year's balance sheet being a big one) but the Fair Tax effectively strips the government from being able to do ANYTHING about it.
Since it is painfully obvious that we can not trust the free market to watch out for our well-being, the only option LEFT is the government. And we know this. We know this on an instinctual level. It's why fire and police services aren't contracted out. It's why our military is run by the government. (And why hiring Blackwater to do the job of our military is both egregiously expensive and has resulted in an abundance of ethical and legal malfeasance.)
So by stripping the government of the ability to influence the free market, then any projects that must be done for our well being would have to be government-run. Forget using tax breaks for alternative fuels, or more efficient lighting, or refrigerators, the government would have to do it themselves, on OUR dime.

Look, I'm not saying that government does a great job with the tax code, and I'm also not thrilled with the idea of them being involved in the free market. But I trust the government MORE than I trust big business. At least we get to VOTE on government. Big-Business only has to answer to their stock-holders. And stock-holders aren't at all interested if the business hurts the environment or the public health as long as the stock price goes up. If they were, no one would buy Exxon Mobile or R.J. Reynolds stock.

by EvilAsh on Fri Oct 10, 2008 at 05:54:58 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Short of burning thier money it is hard to say the money wont go back to the government through the sales tax or to the economy through investment in their own or others companies - that leads to jobs.

Not sure if saying the bill will never pass is enough to make think it is not a great solution to so many of our problems.

GM and FORD spend millions setting up the line to make a new car. Becauase the government, not the market decides so much of the cars we drive of course they are going to be slow to adapt. Becuase Hybrids are still expensive the only way Detroit can make a profit is to rely on Government kickbacks. In case you didn't notice the other bailout that happened recently is the 25 billion to the auto industry. They are not exactly shining examples of the free market at work.

I think you are completly wrong with blaming the free market for the current economic crisis. Your insticts are just plain wrong. The last form of deregulation I can find was one signed into law by Clinton. The government sponsored entities are the ones that needed more oversight. They loosened standards, and cooked the books. Ultimately creating a bubble that was bound to burst.

Stripping the government of its taxing arm of controlling the market is a good thing becuase it is the only way to remove the corruption from Washington.

I know I have this nieve notion that people who do others wrong will get what they have coming to them. They do have someone to answer to at sometime. As far being more afraid of business than government, I do not share your belief. What business has the means to take away your rights?

As far as the environment, you only need to look in the mirror if you are looking for someone to blame for Exxon Mobile's success. People want cheap energy, but do they need it?

by Classical Liberal on Fri Oct 17, 2008 at 02:41:18 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

The "fair tax" is incredibly REGRESSIVE, not PROGRESSIVE.

You aren't a "liberal" except with the truth. Go back to RedState or freeperville.

Change has come to America.

by the mystical vortexes of sedona on Mon Oct 06, 2008 at 01:35:36 AM EST

Re: Fair Tax - Progressive? (none / 0)

How is it regressive? Walk me through the steps. People are acutally paid monthly to cover their taxes with the Fair tax plan.

The percentage of non taxable spending does not change as you make more money.

Don't turn off your mind so soon in the discussion.

It may be more regressive than the current tax code, but the rich will still pay much more than the poor and the transfers between from the lower class to the middle class and the middle class to the upper class will be much less painful for all individuals.

If you believe the purpose of the tax code is to take from the rich and give to the poor, than I can't argue with you. Is that what you mean by a progressive tax code?

I am liberal with Freedom as my name would suggest. If you don't know what Classical Liberalism is then don't comment on it.

by Classical Liberal on Mon Oct 06, 2008 at 03:41:36 AM EST
[ Parent ]

A world of hurt is coming your way, CL.... (2.00 / 2)

Count the days, big guy.

Obama is going to BLAST your candidate right off the map...

Your GOP senators and Congress critters are going to fall like leaves from the fall trees...

Your era of lying punks like Bush and Cheney is over.

Your heros, Rush Limbaugh and Sean Hannity are going to crap their trow, it's going to be so bad.

Millions of kids coming out of school are being made into life long Democrats by the Obama wave.

Nixon and Reagan's southern strategy is just about out of gas....

It will be lovely.

On Nov 4th, Barack Obama officially ends the Southern Strategy....

by WashStateBlue on Mon Oct 06, 2008 at 02:15:06 AM EST

Re: A world of hurt is coming your way, CL.... (none / 0)

As always skirting the issues. Come on give it a whirl. You don't have to resort to name calling. Help me find the flaws on the "Fair" tax.

by Classical Liberal on Mon Oct 06, 2008 at 02:48:39 AM EST
[ Parent ]

Maybe you should read the article you linked. (2.00 / 1)

The wiki article you linked in your "diary" (Diaries shouldn't be one sentence, you should lay out your position on the Fair Tax so that people can respond intelligently and not have to guess at what you can't find wrong with it) has plenty of issues brought up by opponents of the bill. Can you seriously say that you don't see anything wrong with it?

I don't mind having you here. On redstate, the freepers are entirely against discussion and will name-call, edit and/or ban you for talking against the party line. So I say please go on with your arguments here since we can't go over there and have grown up discussions.

by shalca on Mon Oct 06, 2008 at 04:33:18 AM EST
[ Parent ]

Re: Maybe you should read the article you linked. (none / 0)

I can't go over there either, so I appriciate your candor. I am not loyal to any party, but I do love our country warts and all.

I think the Fair Tax is good on so many levels from curbing consumerism, to removing power from Washington, to helping with trade deficiets. Maybe it is too simple to achieve all it seems(to me at least) to do.

I respect contructive critism and believe the Internet will be the tool we will all take back our country with. It takes open discussion on the issues. You are right, I really left it open ended, sorry.

by Classical Liberal on Mon Oct 06, 2008 at 11:55:31 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (2.00 / 1)

Actually, it seems rather dangerous to me.
Say we implement the fair tax. What happens to the other taxes we pay in state- excise taxes, property taxes, sales taxes, etc or the federal taxes on things such as gasoline?
The rate promoted by the fair tax advocates is 30%, what's to prevent the government from raising that to 40% should the need arise?
When you go to buy a car, you pay the tax on a new car, but not on a one year old car. What would happen to the new car market?
Same with housing- the tax is only on newly constructed homes, not on homes already built, that could kill the new home construction (not that I have a problem with it, but it certainly would hurt the job market).
Those are just a few of the problems I have with the "fair tax" (a misnomer, imo).

"Who are you for? That is the wrong question. It should be who is for you?" HRC

by skohayes on Mon Oct 06, 2008 at 07:24:41 AM EST

Re: Fair Tax - Progressive? (none / 0)

There are dangers and it is a radical change. They have been rolling around in my head alot.

1. State taxes don't change(at least that is what I think)

The people are the only thing controlling Washington from bringing that number up to 40%. Spending needs to be controlled in Washington and through the current system it is impossible.
New cars obviously would have to compete with used cars that much more, but I don't think that is a problem. They compete now. We don't need our landfills full of old cars.
New construction: Same thing.

Poeple who build houses are already screwed. There is a hugh surplus of houses on the market and no one is building. I do get your point though, new homes will be affected by this.
5. One new problem I am going to have to look into is the service industry, what is being taxed in this arena?

by Classical Liberal on Mon Oct 06, 2008 at 12:03:12 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Spending needs to be controlled in Washington. No kidding.

As for the cars thing, new cars will not be able to compete with used cars.
For example, say a dealer has two Ford trucks on his lot. One is a 2008 with 150 miles, listed at a $21,000 base, or $27,300 with the fair tax added in. The truck sitting next to the 2008 is a 2007, with 25,000 miles, and say it's marked down 15% for depreciation, it's listed price is $17,850 with no taxes added on.
Which one would you buy?

"Who are you for? That is the wrong question. It should be who is for you?" HRC

by skohayes on Mon Oct 06, 2008 at 06:37:09 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Ah, but look at it this way. The Toyota from Japan will be 30% more expensive for the American, but the Chevy will be 30% cheaper for the Japanese. Cars are a bad example, but since only American's pay the tax manufacturing will get the needed boost and will be put on a more even playing field with other countries which do not support their labor force.

Consumerism does need to be curbed in this country and buying used accross the board is a good thing for the people of the country and the planet as a whole.

by Classical Liberal on Mon Oct 06, 2008 at 06:58:23 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Consumerism needs to be curbed? For what reason?
Maybe easy credit needs to be curbed, but I think if people have the money, they should be able to buy anything on the legal market.
Consumerism is about the only thing keeping us from sliding into a recession right now.
A lot of people promote the fair tax as some sort of solution to our current tax laws, but all it does is create more problems.

"Who are you for? That is the wrong question. It should be who is for you?" HRC

by skohayes on Tue Oct 07, 2008 at 09:25:52 AM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

Really, what problems does the fair tax create? Maybe you are right about consumerism, but it just seems stupid to coninually buy crap we don't need. I agree that people can buy what ever they want, maybe the American people should be on the hook for their neccessities than.

by Classical Liberal on Tue Oct 07, 2008 at 06:40:54 PM EST
[ Parent ]

Re: Fair Tax - Progressive? (none / 0)

For one thing, it's commonly said that the tax on new goods only would create a black market or people would simply travel into other countries to purchase goods (this option is certainly for wealthier people), and it does little to solve the problems we have with the current tax code (you don't think we could just pass a bill that says we only pay a 30% tax on new goods and leave it at that, do you?)which is unwieldy and has too many loopholes.
The claim that it would eliminate the IRS is also ridiculous as you still will need someone to enforce the laws and audit for compliance. The only thing that changes is you have forced the burden of tax collector on the businessman instead of the IRS.
And I don't know about you, but I pay cash for just about everything and have no debt except for my mortgage, but that doesn't give me the right to tell other people what they need and don't need.

"Who are you for? That is the wrong question. It should be who is for you?" HRC

by skohayes on Tue Oct 07, 2008 at 07:02:29 PM EST
[ Parent ]

Ah the fair tax. (2.00 / 1)

The new idea that the rich are trying to push on the American people. Also happens to be one of the biggest giveaways to the rich. Not a good idea to tie government revenues with the state of the economy considering it is public spending that is the proven way of getting us out of a recession/downturn. The fair tax only hurts the poor because it raises the cost of goods while not addressing purchasing power. The cost of gas, healthcare, and even food will more than make up for any gains made by not taxing income. I'd actually prefer a system similiar to what the UK has. Half the revenues from income taxes, and the other half from a national sales tax. I think either extreme of either/or is a bad idea on it's head. I can't believe progressives would fall for this. The rich would get WAY less of their taxed if taxation was based off consumption. Thus we would lose massive amounts of gov't revenues. Not to mention we would need put a tariff on imports so as to make American products more enticing.

by SocialDem on Mon Oct 06, 2008 at 09:12:40 AM EST

Re: Ah the fair tax. (none / 0)

I see you mention 3 main points:

1. Public Spending gets us out of a downturn: I would be interested in what "proven" ways government has help to spend us out of a depression. The only example we have is the New Deal and it took 25 years for the Dow to return to its pre-crash levels.

2. Purchasing Power of the Poor - This is addressed by sending the "prebate" checks. Basically every American gets back according to a schedule:
2008 prebate schedule

3. Cost of gas, healthcare, food - not taxing these items would disporportionettly benefit the wealthy. That is why they high level of initial spending which is not taxed.

4. Wealthy wont be paying enough: I would argue the wealthy that spend a lot will be paying alot. Those that keep their money in thier businesses or their investment portfolios will be adding to the job market. I know it borders on "trickle down", but if they can't spend it what can they do? Only sitting on it will not contribute to the economy or government.

The UK plan sounds interesting. I will have to check it out.

by Classical Liberal on Mon Oct 06, 2008 at 12:19:12 PM EST
[ Parent ]

Re: Ah the fair tax. (none / 0)

I forgot to touch on your tariff on imports. My understanding is if American buys the good it gets the tax whether in or out of the country. No people living outside the country purchasing US goods do not have to pay the tax.

It does work beautifully with correcting the trade imbalance and brings more production to the US.

by Classical Liberal on Mon Oct 06, 2008 at 12:34:00 PM EST
[ Parent ]

Endorsed by Ron Paul and Mike Huckabee (none / 0)

Listen, I think Paul and Huckabee are great guys that stand by their ethics no matter what, but their policies are completely disasterous, and the "Fair Tax" is just another way of screwing the poor while benefitting the rich.

When you're poor, you have to buy things in larger numbers but smaller portions. Example: a 2 liter of soda costs on average $1.40. A bottle of soda from the pop machine (less than half of the liquid) costs between $1.00 and $1.25 these days. So, for less than half of the liquid refreshment, you're paying about 30% less. This "Sam's Club" principle scales upward quite a lot.

The wealthy in this country are, for the most part, spending a far smaller percentage of their money on goods that would be taxed by the "Fair Tax," both because they are able to buy in bulk and for the simple truth that the system is currently set up so that rich people tend to make drastically more money than the poor or the middle class, and there's almost no way that their purchases could keep up unless they partied like Keith Richards.

The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Mon Oct 06, 2008 at 10:39:28 AM EST

Re: Endorsed by Ron Paul and Mike Huckabee (none / 0)

Why are the poor buying individual cans of soda? Don't you think they should be buying in bulk? Look I grew up with a single mom pennyless for most of her life. When we got pop it was the cheap generic becuase money was tight and was needed for health care, gas, etc.

I think that an arguement that the tax code helps people who pioritize their spending habits effectly is an argument for the Fair Tax.

I disagree with you comment on the spending habits of the wealthy, if the wealthy aren't spending their money, what are they doing with it? I think a large problem is these people are putting this money in tax shelters anyway. This money needs to be back flowing in our economy.

Over all I am having a problem with the "screwing" the poor statement. The current system is screwing the poor. This give them a chance and a clear path to getting out poverty.

by Classical Liberal on Mon Oct 06, 2008 at 12:30:05 PM EST
[ Parent ]

Hey bucko (none / 0)

It's not about individual sodas, that was an example of how buying more costs less per volume, and how rich folks can more comfortably buy more at a time than poor folks, who have to make everything fit within a paycheck-to-paycheck budget.

Since you don't see fit to actually address the content of my argument, I'm done addressing the content of yours, which is essentially the same hypothetical "the poor wouldn't be poor if only they would just plan better" blaming-the-victims BS.

The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Mon Oct 06, 2008 at 02:56:30 PM EST
[ Parent ]

Re: Hey bucko (none / 0)

whoa - you don't need to get defensive. Help me to understand what the poor are victims of?

I am not calus and uncaring, what has the current tax code done for the poor?

by Classical Liberal on Mon Oct 06, 2008 at 05:06:58 PM EST
[ Parent ]

I'm not defensive (none / 0)

I don't need to defend anything; you're the conservative sock puppet trying to sell a regressive tax.

The current tax code isn't perfect, but your suggestion would be worse. Most economists agree that the Fair Tax is a bad idea, and the very fact that it's only supporters are Mike Huckabee and Ron Paul is evidence enough that it's not an attractive policy to hawk on a progressive site.

The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Mon Oct 06, 2008 at 05:59:40 PM EST
[ Parent ]

Re: I'm not defensive (none / 0)

It is supported by over 90 current legislators. Has far as your claim that most economists think the fair tax is a bad idea, it is unfounded. Many disagree on what the final rate would be, but it is far from any consensus that it is a bad idea.

Our tax code is horrible, it rewards the wrong things and perpetuates the problems many people are facing.

We can agree to disagree on the issue, I just am happy to at least have the discussion. The plan seems to be gathering steam, both amoung legislators and citizens and deserves the discussion. Thanks Again.

by Classical Liberal on Mon Oct 06, 2008 at 06:31:09 PM EST
[ Parent ]

Re: Endorsed by Ron Paul and Mike Huckabee (none / 0)

As far as Ron Paul and Huckabee. I have to admit there is little support from the DFL on this topic and actually not much from the GOP. My guess it is the same group of house members which voted against the bailout that are in support of the "Fair" tax.

by Classical Liberal on Mon Oct 06, 2008 at 01:00:26 PM EST
[ Parent ]

It's only libertarians (none / 0)

Minnesota's finest libertarian, Jesse Ventura, supports the Fair Tax, but not enough to try to push it through the state legislature when he had a chance.

His version of the tax, which was more compassionate than most (clothing and food not taxed), would have starved the government drastically and caused more infrastructure chaos than Minnesota already faces.

The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Mon Oct 06, 2008 at 03:00:51 PM EST
[ Parent ]

Re: It's only libertarians (none / 0)

Are you from MN? Bloomington, MN here

It is supported in MN by:
Rep. Collin Peterson (D)
Rep. John Kline (R)

Jessie was a fruit cake, but part of me did love him.

by Classical Liberal on Mon Oct 06, 2008 at 05:13:59 PM EST
[ Parent ]

You are not logged in.

In order to post a comment, you must be logged in. If you have a member account, please log in to comment.

If not, you can make an account right here. It's quick and free.