05-30-2013 06:21 AM
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  1. Mooncatt's Avatar
    It's going to take me a bit to gather my thoughts, but I think I can address most of your points from my understanding of the proposal. I'll post them when I can (will try being concise, but don't be surprised if it turns out long). I will go ahead and quickly address where I got my info from and the website. I haven't really visited the site much, but it's more or less supposed to be the central place to get info. A better option may be the Fair Tax Book by Neal Boortz and John Linder (the Congressman that spearheaded the proposal as a bill). That's where I pulled most of my info from, and they have a sequel the addresses even more concerns that I haven't got yet. I got the audio book version of that first book free as part of a promotion Audible.com was doing where your first book is free. It's written and narrated in a no nonsense way that keeps it entertaining.

    I have a feeling those videos you found may be meant as short talking point pieces like you'd get in a commercial. Meant for the masses and not taking the time to fully explain the reasons behind their statements because most people wouldn't bother to find out our care. They want to hear the expected results, not how to get there.
    05-08-2013 02:46 AM
  2. Aquila's Avatar
    It's going to take me a bit to gather my thoughts, but I think I can address most of your points from my understanding of the proposal. I'll post them when I can (will try being concise, but don't be surprised if it turns out long). I will go ahead and quickly address where I got my info from and the website. I haven't really visited the site much, but it's more or less the supposed to be the central place to get info. A better option may be the Fair Tax Book by Neal Boortz and John Linder (the Congressman that spearheaded the proposal as a bill). That's where I pulled most of my info from, and they have a sequel the addresses even more concerns that I haven't got yet. I got the audio book version of that first book free as part of a promotion Audible.com was doing where your first book is free. It's written and narrated in a no nonsense way that keeps it entertaining.

    I have a feeling those videos you found may be meant as short talking point pieces like you'd get in a commercial. Meant for the masses and not taking the time to fully explain the reasons behind their statements because most people wouldn't bother to find out our care. They want to hear the expected results, not how to get there.
    I'll check out the books
    05-08-2013 02:50 AM
  3. Mooncatt's Avatar
    I'm still struggling with the difference between the billionaire and the person only making $100,000... because the former will spend a tiny portion of their income relative to the latter who will spend almost their entire income. Yes, they could buy 2nd hand things to mitigate that disproportion, but there is a certain level, just like in today's system, where once you're past a certain income/spending threshold, the tax becomes completely regressive.
    This was a bit rough for me to try and follow through on and I can't remember off hand if the book addressed it specifically, so my answer to this is based on my own thinking about society in general and is more or a rationalization I think than anything. I believe that no matter what kind of societal structure we have, there will always be people that are very well off, those in the middle, and those that don't do well at all. I don't care what the reasons are, it just happens and there is little that can be done about it from a policy standpoint. Sure, you sometimes hear the rags to riches story or rich house to poor house tale, but those are rare and I'm speaking in generalizations here anyway. So I don't think this is something the Fair Tax is meant to try and even out, because the rich will always have more disposable income left over. Even if taxes didn't exist in any level, the poor would still be spending a higher percentage of income to basic living than the rich. It may help if you seperate that from the concept of pure tax collection, as the plan is about. So while what you say may be technically true, the rich are still paying the greatest portion of the tax burden, both in raw numbers and as a percentage of spending. Your statement isn't an invalid point to think about on its own terms, but I don't think it fully applies to a tax plan.

    Assuming that, similar to today and this plan, there is a level of income, below which we would not expect any contribution, then the advantage here seems to be that it taxes everyone, not just those who are lawfully employed.
    Bingo! And that is something they took into consideration already as I mentioned earlier. Though you also have to remember it's also tied to the poverty level tables that dictate where that line is. If you have a low income but are single with no dependents, you may still be above poverty line and be paying more net tax than someone making a littler more but married with 3 kids because their poverty line is higher.

    But it seems to fail in a few other areas... business taxes, taxes we currently collect from citizens abroad and it creates heavy incentive for one to purchase new high end goods directly from out-of-country sources, where shipping may be less than the amount of taxes they would pay.
    Business to business transaction taxes, capital gains taxes, et. al. for every business is elimitated, but economics 101 pretty much says that businesses don't pay taxes anyway. They pass that cost to the consumer, so all products we buy already have all those taxes embedded in them. As for the buying off shore, I don't know off hand if that was covered directly. It did cover some issues with where companies locate in the world and how they sell to various other places, so I'd have to go back to the book or maybe ask in their Facebook group for more info there. I do know they addressed internet sales taxes, and YES, those will be taxed. So that may tie in to some of that off shore purchasing.

    The FAQ says it's price neutral because it's revenue neutral, but that seems like nonsense. In what world do business not protect margins by passing additional costs on to the consumer, even if there are windfall savings to be had later on?
    They gave a real world example in the book (and in thinking about owning my own business some day, I'm familiar with how this concept works) involving a tax that was removed from the airline industry a while back. The fear was all the airlines would hold ticket prices at the current rates and just pocket the difference. That lasted all of about a day before prices plumeted to pretty much even with the cost without that tax. What happens is even if there is some insider agreement to hold prices high, someone somewhere is going to drop their price a little to get greater market share. That forced all the other airlines to drop their prices to remain competitive. From there it was a race to the bottom as everyone had to lower prices to keep or gain customers, and so they never got to keep any of those imagined profits. That's what they expect to happen if the Fair Tax is inacted. They figure that the price you currently see on the shelf is about 20-22% tax already that is made up of those embedded taxes mentioned above. Those vanish instantly under the plan and prices of the product will drop. BUT(!) with the sales tax in the plan being inclusive, the shelf price after inacted will reflect the cost of the product and its associated tax. I.E. a $100 shelf price now means after the plan is enacted, the product itself costs $78 with $22 in tax included for about the same $100 shelf price. That's what they mean by being price neutral, and just so happens that is also the tax rate needed to make it revenue neutral thanks to the additional revenue sources/purchasers.

    Under this plan, what would Facebook as a company owe to the government in Taxes? Are they paying taxes on supplies for their company or is it just consumer goods? The FAQ seems to indicate they'd pay 0. How about states where sales tax is currently illegal. I'm assuming this would override their law?
    You are correct again, Facebook's taxes would be zero. Taxes are only paid at the retail level to the end consumer, or for consumer services like getting a haircut. I'm not familiar with any states where having a sales tax is explicitly illegal. Not saying it isn't true, just not something I've heard of. That being said, the Fair Tax being a federal plan would supercede it. It also requires amendments to the U.S. Constitution to fully enact and also repeal the current income tax rules, so any questions about state issues would be dealt with there. They did say in the book that they expect states to follow suit with state specific plans for their own state revenues.

    Sorry if this seems like I'm attacking the plan or you, I'm really not. I am trying to grasp how it works in it's entirety and you seem to understand it with more context than the website you linked does (which is odd). There are some very strange implications of this plan, most of which are positive, but it also has what feel like dangerous assumptions in it. I'm absolutely sure someone has thought through it all, so I'm checking online for answers to these questions too.
    No worries. I can tell by your questions and such that you're looking to learn and not attack me.

    Edit: Other question which this system doesn't address... our current revenue is not enough. 23% of spending isn't enough and realistically, 46% might not be.
    As I stated in my first post on this and as the title of the thread indicates, the Fair Tax plan isn't meant to increase revenues. It's expected to as a side effect of how it influences the economy, but actually adressing the problems of government spending and revenues are not in the scope of the plan itself. Though, to help keep the government honest, the tax rate and how much you're paying on a purchase will be plainly shown on the reciepts, so they can't manipulate rates without the public knowing and UNDERSTANDING what the rate is doing. Unlike now where they can say they lowered taxes while the actual tax rates increased and being so complex that most people don't notice.

    I'm still watching the videos on the Fair Tax, but the guy presenting them is coming off as incredibly naive... Within 20 seconds he said companies would lower prices if their expenses were reduced... the only thing that lowers price is competition... otherwise, you're only increasing profits
    If this didn't already click by now, reference my airline example above.

    and he said that if we don't tax our exports it'll be great for overseas trade... which is true, definitely! ... but it also means that our government has incentive to increase imports because we tax those, as opposed to increasing our exports. There can be many good reasons for making this the case, but it's also really dangerous to remove our interdependence and replace it with dependence on foreign markets.
    Imports wouldn't be affected much because those overseas companies wouldn't be taxed. With no business taxes, there's nothing to get from those companies and no real incentive from the government's standpoint I think to increase the imports. Whether you buy a shoe made in the U.S. or from China, the government still gets the tax income at the point of sale. You are correct that with removing OUR business taxes, our products are now cheaper for other countries to buy from and I think it's about time China bought some of our stuff for a change. lol So expect to see a more even import/export rate instead of one that's so lopside like we have now.

    I have the new tax plan and it will work and is fair:

    1-4 *stuff*
    5. If 1 through 4 do not work, take control of the government away from corporations and return it to the People.
    Since companies don't pay taxes and they all are passed on to the consumer anyway, your plan should just jump straight to #5.

    Ok, bedtime for me. XD
    Aquila and jdbii like this.
    05-08-2013 04:55 AM
  4. Fairclough's Avatar
    What's interesting in the USA your allowed to do LIFO accounting. Last stock in first out. Which since the economies inflat 70% of the time, 70% of the time your paying less tax then you really should.

    Posted via Android Central App
    Aquila likes this.
    05-09-2013 01:28 AM
  5. Mooncatt's Avatar
    Yet another reason to not simply modify the tax system, but to rip it and the IRS out by their roots. The only two purposes accounting serves is 1) Uncle Sam forces businesses to do so for taxes, and 2) So companies can judge how well they are doing financially. If you just modified the current structure to force them to use Fifo (which I agree is probably the more accurate way in my limited knowledge of it), they would just spend millions to find another way to lower profit reporting to lower taxes. In my suggestion, it's dealt with by default. With no reporting to the IRS, companies could use whatever accounting method they want to that works best for them without affecting tax revenues.
    05-09-2013 02:41 AM
  6. Fairclough's Avatar
    GST (Tax on products) actually doesn't generate as much revenue as normal Tax, we have both over here and income tax definitely generates more.
    05-09-2013 06:41 AM
  7. Mooncatt's Avatar
    I tried to do a little digging on your claim but it seems there are several places that use a GST, and wasn't exactly sure where "over here" is for you. But going by your signature and France being one country that has it, and at almost the same rate as proposed in the Fair Tax, I went with that. From what I saw, it looks like France has a lot more government supplied healthcare than the U.S. does, which is going to increase government spending on a per capita basis. Even if I'm a bit off on any of that, it's the concept of what works in one place may not work in another that's at play. The topic of government spending deserves a thread all on its own and not what I'm debating here, but it is what it is and different countries have different revenue needs. Also take into account how active the consumer purchasing is, pricing levels, size and density of the populace, etc, and you can see how a needed tax rate could change from country to country to remain solvent.
    05-09-2013 09:51 AM
  8. Tall Mike 2145's Avatar
    When your country's income tax rates are at or about 50%, it's not surprising you're taking in more money that way.

    Then again, if your country (and surrounding ones) have 50% - 80% employment in government jobs, you need to confiscate as much private sector wealth as possible.
    05-10-2013 02:44 AM
  9. Fairclough's Avatar
    My countries unemployment rate is 5% not 50% and not even close to 50% in gov. Most our employment is financial services, services and resources. Our tax has brackets so the lowest economic demographics pay less.

    Close I am Australian. The signature is was place for Anzac DAC (aus / nz military service comemorence ) who destroyed half a French city to free it then after the war the soldiers came back and rebuilt the school out of guilt.

    Posted via Android Central App
    05-10-2013 04:36 AM
  10. Mooncatt's Avatar
    Ok, well my point is still valid in that there are a number of variables that would dictate what a tax rate should be in any given situation.
    Fairclough likes this.
    05-10-2013 04:58 AM
  11. Tall Mike 2145's Avatar
    The attitude on the part of the public as to what Government's proper role in the lives of the citizenry dictates at a fundamental level the amount of financial resources needed to be allocated for its operation. And while I agree that there have been some things that have come along in the decades since the constitution was contemplated and written, I don't think it should be anywhere near as big and intrusive as it is. But, we also have to have some public solidarity on this, or we'll never resolve this issue.
    05-10-2013 05:57 PM
  12. Fairclough's Avatar
    Simple thing is we need tax. Whether its to pay for the army, roads, for some countries free health care, wealth fare and hopefully paid parental leave.

    Posted via Android Central App
    05-11-2013 01:31 AM
  13. Mooncatt's Avatar
    I don't think anyone has tried to argue that we don't need any taxation at all. It's understood that governments have to be funded somehow, we just debate on what the money should and shouldn't be spent on, and how to collect it.

    Here's another nugget to chew on: What if instead of withholding, EVERYONE had to pay in quarterly estimated taxes (or monthly, or some other regular time period). In the current U.S. system, companies simply withhold a percentage of your check so you never see the tax money in your pocket. It gets paid for you directly to the government. This creates a false mentality at tax time when we file our yearly returns.

    Ask someone how much tax they paid for last year, and they will answer with how much of a refund they got, or how much they paid in at filling. Even though you asked how much they paid in, they don't think about how much was being withheld during the year and are only concerned with getting that refund. If that person had $1000 withheld during a year and got a$100 refund, they don't think of it as paying $900 in tax. They only know the $100 "gift" from Uncle Sam.

    So if instead, everyone paid the taxes themselves, out of their own checking accounts, I'm willing to bet there would be a lot more outcry against government spending. Simply for the fact that people are forced to see just how much they are actually paying in an start paying attention to how it's being used.
    Tall Mike 2145 and met.watts like this.
    05-13-2013 04:17 AM
  14. Tall Mike 2145's Avatar
    We need more competition and more freedom, not more government growth and spending. This whole "the government should take care of me from the cradle to the grave" mentality will prevent us from ever going anywhere.
    05-13-2013 10:56 AM
  15. ItnStln's Avatar
    A percentage. If everyone paid the same percentage it probably would be less than what we pay now. Hell make it %8 for everyone regardless of what you make and for capital gains as well. And do away with claiming gambling losses, mortgage interest. The only people I know that can claim it can barely afford their house to begin with. In my mind only business should have write offs.

    But what do I know? I just know paying %20 to federal is bs IMO.

    Sent from my Nexus 4 using Tapatalk 2
    I agree, a flat percentage is best. Having brackets is discriminatory.
    Okay, so if you make $10,000,000,000 you pay $800,000,000 regardless of how it was earned and if you make $100,000 you pay $8,000, etc? That seems pretty fair, but, to play devil's advocate, also somewhat regressive in that, while both percents are equal, one could $8,000 means more to someone barely squeaking by at $100,000 than $800mm does to someone who still has $9.2 billion more to spend. The example is starker if you say the lower of the two makes $20,000. $1,600 is a big deal when you're living in poverty, even if it's about $130 a month, if every dollar counts, not having that extra $130 every month can really hurt. I believe that's the justification for the progressive tax... not sure I buy it entirely, but I can see how it seems, "unfair" to people getting hit on both sides of the spectrum. From the go-go-billionaire's perspective, "wtf, I just paid you $800 million and you want more?!" and for the poorest people, it's "wtf, I have to quit my job because I can't afford daycare (this type of paradoxical scenario)...
    Hey, $130 a month in taxes is a lot less than I pay now!
    05-20-2013 12:01 AM
  16. ItnStln's Avatar
    Tax brackets, e.g 1st 20,000 is untaxed, next 30,000 lets say at 5% then the next $30,000 10% etc. Not a flat rate across the whole thing but parts of it untaxed while other parts taxed.
    E.g If I earned 100K, the first 20k will be untaxed, the next 30k will be taxed 5% and then next 30K at 10% then so on. However, the % would be a big larger since the starting base figures aren't taxed.

    In my view the rich should get taxed more. Simple as that.
    That's discrimination, plain and simple! Why punish people for success? Why bust my *** while working to put myself through college just so I can be taxed higher? Seriously, that's a joke!
    I'm a big Fair Tax supporter (the actual named plan, not simply for a fairer plan). To type everything in my head out about it on my phone would be a pain, but I'll try to at least cover a list of the important points. I know I won't cover them all, but I think this is the best but underreported tax plan around.

    Millions of PRIVATE funds used to develop and research the plan with the sole goal of being the fairest plan for everyone. This isn't some government proposed idea laced with loopholes.

    Virtually does away with the IRS, the tax code is only about 100 pages (don't remember the exact number, but tiny compared to the current code none the less), and April 15th becomes just another day.

    Income tax eliminated and REPLACED with a single sales tax included within the shelf price of all new (so second hand/used items exempt) items at the retail level (many opponents try to say the sales tax is in addition to an income tax, or something like a value added tax, both of which is untrue)

    Billions saved on people and businesses not having to do tax preparation and able to make better decisions without worrying about tax implications.

    You keep 100% of your paycheck.

    The planned national sales tax rate of about 22-23% will keep shelf prices about the same as they are now since the current embedded taxes are now removed. Even if they are a little more, it is still more than offset by the extra you have from zero federal withholding (and expected state as they tend to follow the government lead).

    Everyone, from the minimum wage earner to billionaires get a prebate check equal to the tax they would pay for their family situation if living at the poverty level so NO ONE has to pay tax on the basic necessities (remember, this plan treats everyone the same, no favorites are played). So people living at poverty actually pay no tax to simply live, those living below poverty get extra money back. Those above pay a greater percentage of their spending to tax.

    You get control over how much tax you pay because buying used items and investing instead of spending doesn't get taxed.

    Since this is tax paid at the register, EVERYONE will now pay in, including tourists and people in underground/under the table/illegal jobs that now don't report income for taxation

    The tax plan is meant to be revenue neutral. It's designed to be a more efficient way of collecting taxes, and the debate over revenues and government spending is for another day.

    Investments would be able to skyrocket as capital gains and other similar taxes are eliminated, which also means we become the most tax friendly country in the world and would have businesses flocking back onto our shores.

    Corporate lobbying would be virtually eliminated because lobbyist will no longer be able to use the tax code to manipulate business.

    Can't think of the other points off the top of my head , but maybe this will be enough to chew on for now. I enjoy discussing this plan, so open to any questions. More info at www.fairtax.org
    So tax people on what they spend, and not what they make? That might work.
    I'm curious why you have this view. A graduated system like this and what we have now is like a punishment for success. And if you're going to go with they "have to pay their fair share" argument, who decides what's a fair share? I'm sure the people making less than you would think you should pay more as part of your fair share.
    Precisely, a punishment for success! When I graduate college, get my dream job and become successful, why should I pay a higher percent of my income to taxes versus the dude working a low end job who flunked out of high school, and can't keep a job? Seriously, why am I busting my *** to put myself through college if I'm just going to be punished for (hopefully!) being successful?
    05-20-2013 12:09 AM
  17. Mooncatt's Avatar
    While admittedly biased considering the source, here's a small pdf file comparing what we have in the U.S. today to both the Fair and Flat tax proposals.

    http://www.fairtax.org/flatfaircompare

    If it wasn't already so late, I'd see if there's anything like this promoting the Flat Tax over the Fair Tax. This just happened to pop up on my Facebook feed
    05-20-2013 02:11 AM
  18. Aquila's Avatar
    While admittedly biased considering the source, here's a small pdf file comparing what we have in the U.S. today to both the Fair and Flat tax proposals.

    http://www.fairtax.org/flatfaircompare

    If it wasn't already so late, I'd see if there's anything like this promoting the Flat Tax over the Fair Tax. This just happened to pop up on my Facebook feed
    Very useful chart. The more I think about this, the more I think they're all going to be regressive and be excessive to the poor, even on a "progressive" system, it's a huge burden on the lower and middle class, and punitive to the upper class. The key benefits of the flat and fair taxes are that they're less punitive to high earners, but they're still incredibly excessive when you think about the impact of even 5% to a lower class worker, at $30k/year for example. It's possible people could be responsible and buy 2nd hand stuff, etc. but I don't think I know anyone who does that not and I'm not sure they'd change just for tax purposes. I like that the fair tax system is trying to think outside the box, but I'm starting to believe that we need to be thinking so far outside the box that we can't even see the planet that the box is on.
    05-20-2013 02:20 AM
  19. iAndroid4ever's Avatar
    There's no tax in Dubai... but without tax, you can't provide for the poor... that's why you see 10 workers sleeping in 1bedroom property in Dubai :S

    So taxation is a good thing, but only the rich should be taxed and I think the percentage of tax should remain the same, regardless if you earn 100,000 or 1,000,0000.
    05-20-2013 05:23 AM
  20. Mooncatt's Avatar
    Then we're back to the argument of who defines what "rich" is. What is considered rich in one area could be barely scraping by in due to cost of living. Then you have the ongoing battle of making the "evil rich" pay more or increase the level of income to qualify for little or no taxation. All to do no more than for the political party fighting for it to essentially buy votes.
    Aquila likes this.
    05-20-2013 12:12 PM
  21. Aquila's Avatar
    Then we're back to the argument of who defines what "rich" is. What is considered rich in one area could be barely scraping by in due to cost of living. Then you have the ongoing battle of making the "evil rich" pay more or increase the level of income to qualify for little or no taxation. All to do no more than for the political party fighting for it to essentially buy votes.
    Definition of "rich".... in 2012 Apple was expected to contribute $10.5 billion in taxes to the US and another $6 Billion to the state of California. In reality, they paid $0 to both. How many textbooks or road repairs or safer food processing plants does $16.5 billion buy? I think that amount could cover all of the new textbooks needed in public schools for 1-2 years. Or cover 210,000 full ride scholarships to a 4 year college, etc. Not saying that's the best way to spend money, but we're crying about not being able to afford important stuff, while purposely minimizing our revenue intake and pushing as much money as possible out in the form of subsidies to a handful of corporations that control the media, oil and defense industries.
    05-20-2013 07:03 PM
  22. Mooncatt's Avatar
    Along those lines, I heard a report on the radio the other day about companies like Apple and others that are holding billions in earnings made outside the U.S. in offshore accounts that are lobbying for a tax break on that revenue so they can bring it back into the country. Just imagine the amount of research, innovation, and jobs that could be created if our tax structure wasn't so punishing.
    Aquila likes this.
    05-20-2013 07:39 PM
  23. ItnStln's Avatar
    Then we're back to the argument of who defines what "rich" is. What is considered rich in one area could be barely scraping by in due to cost of living. Then you have the ongoing battle of making the "evil rich" pay more or increase the level of income to qualify for little or no taxation. All to do no more than for the political party fighting for it to essentially buy votes.
    Yeah, rich is a relative term.
    Aquila likes this.
    05-20-2013 09:44 PM
  24. Aquila's Avatar
    05-23-2013 02:50 PM
  25. Serial Fordicator's Avatar
    The definition of rich to anyone is someone who makes more money than themselves. I agree its not fair to punish success. Everyone thinks that other people should pay more, just not themselves. That the government should cut subsidies, just not their's.
    Its almost like people complain about invasion of privacy, when they read tabloids and meddle in famous peoples lives or put their own lives all over Facebook.

    I think we should tax everyone 17-19% on pay. A percentage affects everyone equally.

    ΜΟΛΩΝ ΛΑΒΕ
    Aquila likes this.
    05-23-2013 03:18 PM
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