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Thread: Taxes!!!

  1. #1
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    Taxes!!!

    I believe our tax system is broken. You shouldn't have to cut taxes in order to grow the economy.
    The tax system should reflect the economy not control it.

    I have heard talk of a Flat consumption tax.
    The more you consume the more tax you will pay.
    If you don't spend money then you don't get taxed on it.

    I have only heard this idea mentioned in passing, so I'm not sure of the #'s involved.
    Some perks I have heard is that products wouldn't be taxed multiple times..
    for example oil.. it is taxed when it is drilled.. taxed when it is shipped in.. taxed when it is refined.. and taxed when you pump it into your car. A flat tax would stop this multiple taxing thing.

    The questions.
    What are some pro's you can think of to this consept
    What are the Con's to this concept.
    What should such a concept look like when implemented.

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  2. #2
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    Re: Taxes!!!

    You referenced Fair Tax actually...which is what I'm in favor for.

    www.fairtax.org
    http://www.fairtaxvolunteer.org/smart/index.html for all the info on it. Makes sense and cents. The numbers support it.
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  3. #3
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    Re: Taxes!!!

    Limit taxes to a fixed % of your annual income - that would be fair.
    While laughing at others stupidity, you may want to contemplate your own comedic talents. (link)
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    Re: Taxes!!!

    Quote Originally Posted by Snoop
    Limit taxes to a fixed % of your annual income - that would be fair.
    The poor guy and the rich guy on a level playing field - hmmmn. The poor guy who only earns enough to scratch a living would be paying in moral and ethical terms MORE than the rich guy with loads of 'disposable' assets. I don't know whether you have VAT or Purchase tax over in the States as well.) Here in Europe we also have 15% (Value Added Tax) on most purchases. (Some items are zero rated or exempt, as are some businesses. This in effect means that at the base level of need the poor often are paying more in relative terms than those who earn into the higher income tax band.

    The topic of taxes will always be contentious and in the main highly subjective. The Internal/Inland Revenue CANNOT please all of the people all of the time! EVER
    Last edited by FruitandNut; May 12th, 2006 at 07:16 AM.
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    Re: Taxes!!!

    A fair tax systems that taxes what you purchase at a flat rate. I've heard reports that if the U.S. implemented a 10% flat tax for everyone that it we would pull in more taxes money than we currenty do. It also gets rid of many tax loops and tax avoiders. I've heard of two downsides. It's not fair for the poor. I say that can be circumvented with a few rules like no tax on basic staples like bread and milk and such and tax breaks on low income homes and what not.
    The other problem is that is would put a lot of accountants out of work since it would simply the tax laws.

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    Re: Taxes!!!

    If it were up to me government revenue would come primarily from a flat income tax and a value-added goods and services consumption tax. As has been mentioned, the flat income tax removes a great many loopholes and also drastically cuts administration costs. If were relatively low, say 10 or 12 percent, then the burden on the poor would not be hugely increased. This could be counteracted by exempting essentials from the value-added tax.

  7. #7
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    Re: Taxes!!!

    Quote Originally Posted by Apokalupsis
    You referenced Fair Tax actually...which is what I'm in favor for.

    www.fairtax.org
    http://www.fairtaxvolunteer.org/smart/index.html for all the info on it. Makes sense and cents. The numbers support it.
    The so-called "fair" tax is a joke, for many reasons.

    1. Like any sales tax, the "fair" tax attacks those who consume, echoing throughout the economy a disincentive to spend money. It seems as if it would be evident that a disincentive to spend leads to stagnation of the economy, due to insufficient flow of capital, but apparently the "fair" tax proponents have overlooked the decrease in personal spending that will result as a product of the tax's implementation. Our economy depends on people earning and consuming, and while the "fair" tax allows us to earn freely it creates a clear disadvantage to consumption.

    2. All saved capital in the US economy has already been taxed once by income tax and will face "fair" tax when used for any sort of consumption. The fact that all of the equity in the US can now buy eighteen percent less will send the markets into turmoil, as the real purchasing power of pre-taxed equity holdings is eroded.

    3. In the time between now and the implementation of the "fair" tax, there is a strong incentive for people to borrow money, buy untaxed goods and services and then pay off the debt with untaxed earnings after the "fair" tax is implemented. Not a difficult maneuver to pull off, and one that will cost the government billions in revenue.

    4. The "fair" tax evidently encourages black market trade. Taking one's tax-free income and buying goods from retailers with a profit incentive to avoid tax will encourage buying things not from taxable retailers, but from tax-free black market vendors.

    5. Encouragement to save is the primary effect of the "fair" tax. As I alluded to earlier, the disincentive to spend will create a large incentive to save and invest. The fact remains that one can only spend so much money, and people earning billion dollar incomes and spending only ten to fifteen percent of what they earn will receive a tax cut of around 99%, while families just over the income limit for "fair" tax rebates will pay much more than they did before.

    "Fair" tax? Not for me, thanks.

  8. #8
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    Re: Taxes!!!

    starcreator..
    Are you saying that a tax system that incurages personal savings is going to be bad for the economy?
    Where does the savings go but into the economy?
    And wouldn't all that money saved really just go to fixing the looming problem of retirement.
    With the baby boomer retiring they will basically break the federal bank. It seems to me that a "fair-tax" might help with this particular problem.

    Also, what is this black market? Are you talking about the local farmer on the side of the road selling strawberries? Is that the black market?

    As for getting around the tax code through the black market.
    I was told *though I don't know how accurate* that the top 5 companies making over a billion dollars. Don't pay any taxes at all. Why? Because of loop holes in the current tax laws.

    As for the lower-middle & middle class, aren't they getting screwed now?
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    Re: Taxes!!!

    Personally, No matter what you make you should pay the same as the lower levels. Like for example, if you make 20,000 or 100,000, you will pay the same 1,000 taxes in a year. Why dont we make it fair alright, make it so everyone pays the same, period.
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    Re: Taxes!!!

    The so-called "fair" tax is a joke, for many reasons.

    1. Like any sales tax, the "fair" tax attacks those who consume, echoing throughout the economy a disincentive to spend money. It seems as if it would be evident that a disincentive to spend leads to stagnation of the economy, due to insufficient flow of capital, but apparently the "fair" tax proponents have overlooked the decrease in personal spending that will result as a product of the tax's implementation. Our economy depends on people earning and consuming, and while the "fair" tax allows us to earn freely it creates a clear disadvantage to consumption.

    2. All saved capital in the US economy has already been taxed once by income tax and will face "fair" tax when used for any sort of consumption. The fact that all of the equity in the US can now buy eighteen percent less will send the markets into turmoil, as the real purchasing power of pre-taxed equity holdings is eroded.

    3. In the time between now and the implementation of the "fair" tax, there is a strong incentive for people to borrow money, buy untaxed goods and services and then pay off the debt with untaxed earnings after the "fair" tax is implemented. Not a difficult maneuver to pull off, and one that will cost the government billions in revenue.

    4. The "fair" tax evidently encourages black market trade. Taking one's tax-free income and buying goods from retailers with a profit incentive to avoid tax will encourage buying things not from taxable retailers, but from tax-free black market vendors.

    5. Encouragement to save is the primary effect of the "fair" tax. As I alluded to earlier, the disincentive to spend will create a large incentive to save and invest. The fact remains that one can only spend so much money, and people earning billion dollar incomes and spending only ten to fifteen percent of what they earn will receive a tax cut of around 99%, while families just over the income limit for "fair" tax rebates will pay much more than they did before.

    "Fair" tax? Not for me, thanks.
    1. Either way you look at it there is a disadvantage to earnings (under income tax) or consumption (fairtax). You also forget that consuption is basically an integral part of American culture. Yes some people will consume less, and invest but others will use their extra income to consume.
    2. Federal income tax will be abolished under the fair tax
    3. Prices are expected to remain similar to the current prices
    4. Under any system there are those who will evade taxes and the current complex system encourages tax avoidance moreso than a simplified system. Currently there are numerous loopholes for individuals and businesses that can be put to use in the current tax system.
    5. If they are paying more than before that is their choice, as they choose how much they consume and as necesities are not taxed the only way their taxes will increase would be from extravagant consuption.
    meep

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    Re: Taxes!!!

    But wht should they be punished for making more? Why should the citizens of this nation be punished more for making and earning more for their hard work? Just as much as the ones that dont shouldnt be punished because they cant make enough.
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    Re: Taxes!!!

    Very true, Dragon. Those who earn more mostly deserve it (in the cases of doctors, etc...). Obviously there's celebrities, who don't do all that much hard work, but then the government shouldn't abuse that fact to get more income.

    They'd have more income if senior members of parliament didn't have three morgages and two cars, all untaxed (in the case of the UK anyways...).

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    Re: Taxes!!!

    Quote Originally Posted by starcreator
    The so-called "fair" tax is a joke, for many reasons.

    1. Like any sales tax, the "fair" tax attacks those who consume, echoing throughout the economy a disincentive to spend money. It seems as if it would be evident that a disincentive to spend leads to stagnation of the economy, due to insufficient flow of capital, but apparently the "fair" tax proponents have overlooked the decrease in personal spending that will result as a product of the tax's implementation.
    Not true (on many levels). First of all, we have a sales tax NOW. The Fair Tax plan continues sales tax but only on non-necessity items and goods that are brand new. It removes income and other taxes. This means there is more money put into the wallets of individuals, thus they will have much more to spend. Those who spend more, will be taxed more. And only brand new items will be taxed...that is, goods are only taxed once. Resold or used items are not taxed, so there is a great incentive to buy used goods...like cars for example.

    Furthermore, it is not imposed on necessities (food for example).

    2. All saved capital in the US economy has already been taxed once by income tax and will face "fair" tax when used for any sort of consumption. The fact that all of the equity in the US can now buy eighteen percent less will send the markets into turmoil, as the real purchasing power of pre-taxed equity holdings is eroded.
    There ALREADY EXISTS SALES TAX. You act as if there isn't one. Your first 2 arguments are defeated by the mere existence of our current sales tax system. It MAY have a little weight if we didn't have sales tax, but it isn't the case. We have it, and no matter what, both of your objections exist in both the current system and in the proposed.

    3. In the time between now and the implementation of the "fair" tax, there is a strong incentive for people to borrow money, buy untaxed goods and services and then pay off the debt with untaxed earnings after the "fair" tax is implemented. Not a difficult maneuver to pull off, and one that will cost the government billions in revenue.
    What goods are untaxed? I want in! This argument is the same as the first 3.

    4. The "fair" tax evidently encourages black market trade. Taking one's tax-free income and buying goods from retailers with a profit incentive to avoid tax will encourage buying things not from taxable retailers, but from tax-free black market vendors.
    Crime exists in any market, in any system. Fairtax reduces tax crime and loopholes through simplicity. Black markets here won't affect taxation. Lastly, like the above arguments, taxes exist for the retailers already...yet we don't see black markets hosing the economy. There is no valid reason to think the sky will fall if we change, considering that not much will change in this area.

    5. Encouragement to save is the primary effect of the "fair" tax. As I alluded to earlier, the disincentive to spend will create a large incentive to save and invest.
    1) As shown already, this is not the case. We have consumer tax NOW.
    2) What is wrong with saving? You act as if it is a bad thing that consumers are more responsible with their money.

    The fact remains that one can only spend so much money, and people earning billion dollar incomes and spending only ten to fifteen percent of what they earn will receive a tax cut of around 99%, while families just over the income limit for "fair" tax rebates will pay much more than they did before.
    What? I don't think you understand FairTax. Those with big bux, spend big bux on taxes for those items bought. The rich actually spend more in taxes than they do currently...but this way, they have much more control over their taxes (through expenditures).

    Every one of your objections is answered in the FAQ which I linked to.
    http://www.fairtaxvolunteer.org/smart/faq.html

    The below text has been automerged with this post.

    Quote Originally Posted by Dragon
    But wht should they be punished for making more? Why should the citizens of this nation be punished more for making and earning more for their hard work? Just as much as the ones that dont shouldnt be punished because they cant make enough.
    In the FairTax system, they aren't. You are only taxed on new items that you BUY. How much you pay in taxes, is completely up to you as a consumer. YOU get to choose, not the government.

    On a tight budget? That's fine...get 100% of your pay (untaxed) and buy less non-necessities to make ends meet. The poor get more money to save (or to spend if this is their choice). Have a lot of earnings and want that fleet of cars? Go for it, it's your money...but you will pay more taxes for more goods purchased.
    Last edited by Apokalupsis; May 15th, 2006 at 12:05 PM. Reason: Automerged Doublepost
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  14. #14
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    Re: Taxes!!!

    Why do people fall for this every time?

    Get a large stone tablet, engrave the following words on it then hit yourself about the head repeatedly with the finished tablet:

    "Governments add new taxes, they do not remove old ones"


    Any and all talk of how such a thing would replace anything is so much hot air, existing taxes would remain. Anyone believing otherwise is gullible beyond belief.

    On the topic of existing sales tax, I presume that is a local state thing, not federal?

    In the UK they have "Value Added Tax" or "vat" - though quite how any value is added by increasing the price is a mystery... a touch of Orwell-speak I think.

    The point about poor people is this:

    If you earn say $100 a week and pay 15% "vat' on everything, it costs you 15% of your income.

    If you earn $500 a week and buy the exact same goods it costs you 3% of your income.

    Realistically of course higher earners tend to buy more expensive items and more of them, so it is not much of an issue.

    Secondly, why the heck should a high earner pay more for the same products, which is what actually happens with income tax? So a good idea, right, this flat tax thing?

    In theory vat is a good idea, sort of, but bear in mind it places the burden of tax calculation and collection upon the retailer - is that not a form of forced labor?

    They have to pay your taxes every time you buy something.

    Wacky ideas about some things being taxed and other things not taxed just leads to government telling you what you should and shouldn't consume, with 'sin tax' added to goodies like booze, cigarettes etc.

    It just opens up the Pandora's box of favoritism, cronyism and general corruption as each industry vies to have it's products tax exempt because they are a "good" products etc.

    Wait for the sob stories of how various products are good for children, mothers, the elderly, the disabled, lesbians..



    Bottom line, the simple question to ask is "Does this increase the tax people pay?"

    Don't bother even asking about a decrease.

    There will be large admin costs - we all pay that, so calculate that in.

    There will be large change-over admin costs, allow for that too.

    I guaran-darn-tee you existing taxes would not be removed, just reduced to very low levels. Then start creeping back up again.

    And just why oh why do peeps think increasing the government's revenues is a GOOD thing?

    Do you expect them to tax you less or something? Hahahahaha! No no no, they will still seek to tax you more but will simply have even more money to get good at taxing you more, produce even slicker propaganda, wage more foriegn wars and grow even bigger, even more powerful.

    Put it this way, if you were paying protection money to the mob, would you consider it a good thing that their overall income were increased?

    Tip - you ARE paying protection money to a mob!



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  15. #15
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    Re: Taxes!!!

    Well I am in agreement with Wiggly...I mean Pibs on this one.

    First of all let us discuss the nature of taxes and how they are inherently unjust and coercive.

    If we agree that you have a right to your body and property, then we will find that any invasion of this property, be it by group consensus or individual action, is unjust. 99.9% of the people could vote to murder you, that would still not make it right.

    Taxation is extortion and theft, there is no way of getting around that; no matter how hard the politicians and bureaucrats try to label taxes with nice euphemisms like "fees" and "contributions", the fact remains that whenever the government gets any kind of revenue it is by coercion and the threat of violence.

    If I put a gun to your head and tell you that I am going to pull the trigger if you don't give me 25% of your income, then you would obviously fork over the dough.

    The point that I want to stress is that regardless of how many people are threatening to pull the trigger, the threat of violence and coercion in and of itself is unjust.

    Seeing how the state cannot support itself without coercion and extortion, then we must rationally conclude that the state, is inherently evil and brutal.

    This is not to say that there aren't better governments in the world, but that doesn't really prove anything. I would much rather be beat in America than stabbed in Mexico, but that still doesn't change the fact that both actions are wrong.

    There is a definite tendency among most atheists and smart people to fall into the put of ethical relativism. I feel that this is the flaw of utilitarianism.

    Actually I am going to start a new thread on the secularization of natural law theory.l
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

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  16. #16
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    Re: Taxes!!!

    My anti-"fair" tax post, which took a significant amount of time to compose, mysteriously disappeared from this thread (possible server rollback?). Unfortunately right now I'm too pressed for time to create a complete recreation, but I'll certainly repost it later when I find the time.

    Regards,

    Star

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    Re: Taxes!!!

    Basically my opposition against a "fair" tax attacks the notion that the state somehow owns all your money and when you try to keep some of it, you are going through a "loop hole"

    Just because other people are coerced into paying their "flat" taxes, does not mean that you should not try to prevent as much government extortion from you as pragmatically possible.

    I mean when we get down to it:

    Do you really want the IRS to be as efficient as McDonalds or Wal Mart?

    In feudal England, the king would sell the right to collect taxes in a specific area to a tax collector...this was known as "tax farming"...

    The practice had to be abandoned because of the absolute hatred that the common man had toward this unproductive parasite.
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

    "There are a thousand hacking at the branches of evil to one who is striking at the root." -Henry David Thoreau

  18. #18
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    Re: Taxes!!!

    Congressman Ron Paul gave this great speech on the shell game that is tax reform:

    Tax reform is back in the news, brought to the political forefront by a recent meeting of the president’s advisory panel on tax reform. Once again, politicians and former politicians are lamenting the complexity of our tax laws, as though their own spending measures have nothing to do with it. But we’ve heard this song before. In fact, we’ve been promised a simpler, fairer, and better income tax system many times, most recently in 1997 and 1986 when Congress made relatively significant changes to the tax code. Yet the federal tax system remains an embarrassment, both in terms of the tax burden itself and the outrageous compliance costs engendered by its complexity.

    One tax reform idea tacitly endorsed by Federal Reserve chairman Alan Greenspan calls for a national retail consumption tax to replace the existing income tax. Absent the outright repeal of the 16th Amendment, however, we cannot be sure that an income tax would not reappear at some point. One can easily imagine popular support for retaining the income tax on the “very rich,” which of course is how the 16th amendment originally was sold to a gullible public in the 1910s.

    The president has thrown cold water on the consumption tax proposal, however, by announcing he opposes any reform that eliminates mortgage and charitable deductions. This leaves us with variations on the flat tax concept, which was savaged by the political left when advocated by the likes of House Majority Leader Dick Armey and Steve Forbes in the 1990s.

    Lew Rockwell of the Ludwig von Mises Institute offers a very simple test for any tax reform proposal: Does it reduce or eliminate an existing tax? If not, then it amounts to nothing more than a political shell game that pits taxpayers against each other in a lobbying scramble to make sure the other guy pays. True tax reform is as simple as cutting or eliminating taxes. No studies, panels, committees, or hearings are needed. When reform proposals seem complicated, they almost certainly don’t cut taxes.

    The reform debate is strictly about politics and not serious economics. Both sides use demagoguery but don’t propose truly significant tax reductions. Both sides use the outrageous expression “cost to government” when talking about the impact of tax legislation on revenues. This implies that government owns everything, and that any tax rate less than 100% costs government some of its rightful bounty.

    Government spending is the problem! When the federal government takes $2.5 trillion dollars out of the legitimate private economy in a single year, whether through taxes or borrowing, spending clearly is out of control. Deficit spending creates a de facto tax hike, because deficits can be repaid only by future tax increases. By this measure Congress and the president have raised taxes dramatically over the past few years, despite the tax-cutting rhetoric. The real issue is total spending by government, not tax reform.

    Who wants a 40% flat tax? Who wants a national sales tax if it adds 35% to the retail price of everything we buy? In other words, why change the tax structure if spending stays the same? Once we accept that Congress needs $2.5 trillion from us – and more each year – the only question left is from whom it will be collected. Until the federal government is held to its proper constitutionally limited functions, tax reform will remain a mirage.
    "If you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place." -Murray Rothbard

    "There are a thousand hacking at the branches of evil to one who is striking at the root." -Henry David Thoreau

 

 

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