01-19-2014 01:50 PM
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  1. NoYankees44's Avatar
    Ok first off sales tax is a regressive tax. There is no getting around that issue.

    Regressive tax means the less you make the more of your income goes to taxes.
    I am calling it unfair because I believe you should be tax on disposable income and would say it is fair if your disposable income is tax flat.
    A regressive tax it is impossible to do that as cost of living is not linear with income.

    You have not address that fact. How is it fair that the less you make the more of your total income goes to taxes. You have yet to address that issue.

    My issue with the so called "fair tax" is it is a regressive tax. A regressive tax is fundamentally unfair.

    A fair tax is taxing disposable income at a flat rate. Please provide a system in which that can be done.

    Every post defending the so fair tax has been trying to explain how it is not a fancy sales tax.
    This is a post i can respond to. Thank you.

    Actually, by design it is a linearly progressive tax.

    Lets make up some numbers:
    Poverty level=20k
    Tax=10%

    Someone makes and spends 50k. First 20k of that is not taxed, so 10% of 30k is 3k.
    Effective tax rate of total income=3/50=6%

    Someone makes and spends 100k. First 20k of that is not taxed, so 10% of 80k is 8k.
    Effective tax rate of total income=8/100=8%

    Someone makes and spends 1million. First 20k of that is not taxed, so 10% of 980k is 98k.
    Effective tax rate of total income=98000/1000000=9.8%

    Reminder: These are completely hypothetical numbers.


    As you can see the tax rate is actually progressive. You can make large assumptions and play with people not spending all the money they make and force it to be regressive, but we have no idea how people of each bracket will actually react to this. Especially considering the huge bump cash that will come in with each paycheck when the income tax in abolished.
    12-13-2013 03:00 PM
  2. Timelessblur's Avatar
    This is a post i can respond to. Thank you.

    Actually, by design it is a linearly progressive tax.

    Lets make up some numbers:
    Poverty level=20k
    Tax=10%

    Someone makes and spends 50k. First 20k of that is not taxed, so 10% of 30k is 3k.
    Effective tax rate of total income=3/50=6%

    Someone makes and spends 100k. First 20k of that is not taxed, so 10% of 80k is 8k.
    Effective tax rate of total income=8/100=8%

    Someone makes and spends 1million. First 20k of that is not taxed, so 10% of 980k is 98k.
    Effective tax rate of total income=98000/1000000=9.8%

    Reminder: These are completely hypothetical numbers.


    As you can see the tax rate is actually progressive. You can make large assumptions and play with people not spending all the money they make and force it to be regressive, but we have no idea how people of each bracket will actually react to this. Especially considering the huge bump cash that will come in with each paycheck when the income tax in abolished.

    The problem with your numbers is no one spends 100% of their money. The more you make the more of your money percentage wise goes to savings. This is why sales tax is regressive.

    NIS had a post with a nice picture using made up numbers that gives you a better idea how it works. At a certain income level it will flip and the more you make the less you are taxed. All signs point to that falling in the middle class and chances are lower middle class at best. From that point on it become regressive at a very rapid rate.
    So again not progressive. Your entire argument fails on the assumption people speed 100%. Simple fact is they do not.
    The people at the bottom do. Middle class can and does save for retirement.
    12-13-2013 03:06 PM
  3. NoYankees44's Avatar
    The problem with your numbers is no one spends 100% of their money. The more you make the more of your money percentage wise goes to savings. This is why sales tax is regressive.

    NIS had a post with a nice picture using made up numbers that gives you a better idea how it works. At a certain income level it will flip and the more you make the less you are taxed. All signs point to that falling in the middle class and chances are lower middle class at best. From that point on it become regressive at a very rapid rate.
    So again not progressive. Your entire argument fails on the assumption people speed 100%. Simple fact is they do not.
    The people at the bottom do. Middle class can and does save for retirement.
    You cannot assume what percentage of income someone will spend/save. Someone that makes 1 million a year can live on 20k just like someone at poverty. Difference is now they are essentially punished for simply making more money and no other reason.

    That is why this is called the "fair" tax. It separates income and taxation.

    Also, money that is saved is eventually spent. All of it will be taxed eventually. No matter what. Thus the effective tax rate will eventually reach 100%.
    12-13-2013 03:16 PM
  4. Timelessblur's Avatar
    You cannot assume what percentage of income someone will spend/save. Someone that makes 1 million a year can live on 20k just like someone at poverty. Difference is now they are essentially punished for simply making more money and no other reason.

    That is why this is called the "fair" tax. It separates income and taxation.

    Also, money that is saved is eventually spent. All of it will be taxed eventually. No matter what. Thus the effective tax rate will eventually reach 100%.
    So your entire argument to be blunt is sales tax is not regressive which is wrong.
    And yes one can make those assumptions. We have research backing that. You make 10k a year you will more than likely spend 100% of each extra dollar you get in. At a 100k you might spend 90 cent on the dollar other 10% goes into savings. Savings are not always spent. Just look at endowment funds. Not savings.
    Fair tax is a sales tax and as I already explain a sales tax is fundamentally a sales tax. Sales tax are very regressive and unfair.

    The "fair tax" as I already explain shift the burden of funding the government on the poor. I already pointed out my reasoning for my problem with it. Your argument do not address the fundamental problem with the "Fair Tax"

    Fair tax is a sales tax as you agreed. Sales Tax is unfair and regressive. Read the article I posted earlier about sales tax. It should give you my issue with it very nicely with real numbers.
    12-13-2013 03:24 PM
  5. Mooncatt's Avatar
    Basic reading for why I call the "Fair tax" unfair. Since it is established that the fair tax is a sales tax.

    the article is on sales tax and its imbalance in tax rates on rich vs poor.
    'Fundamentally Unfair': How States Tax The Richest 1 Percent At Half The Rate Of The Poor | ThinkProgress
    The problem with this article is it is using current tax structures in no-income tax states like Texas, where I used to live, to predict what would happen under the Fair Tax. In said states, everything sold through a retailer is taxed. Under the Fair Tax, second hand items are not taxed. Some states have exemptions for things they deem necessities, which is also not part of the Fair Tax in lieu of having the prebate.

    So yes, if everything sold at the retail level is taxed, you could have a valid argument. As I've said before under the Fair Tax, the individual can essentially opt out of paying taxes, and by how much, buy looking into used items or simply avoiding optional purchases. Every study out there is assuming everything is taxed, like in your link. That methodology doesn't work for the Fair Tax.
    12-13-2013 03:36 PM
  6. Mooncatt's Avatar
    Oh, and just to be facetious if you still think the Fair Tax is regressive...

    That's just more incentive for people to get off their lazy bums and go make something of themselves, is it not?

    12-13-2013 03:38 PM
  7. NoYankees44's Avatar
    So your entire argument to be blunt is sales tax is not regressive which is wrong.
    And yes one can make those assumptions. We have research backing that. You make 10k a year you will more than likely spend 100% of each extra dollar you get in. At a 100k you might spend 90 cent on the dollar other 10% goes into savings. Savings are not always spent. Just look at endowment funds. Not savings.
    Fair tax is a sales tax and as I already explain a sales tax is fundamentally a sales tax. Sales tax are very regressive and unfair.

    The "fair tax" as I already explain shift the burden of funding the government on the poor. I already pointed out my reasoning for my problem with it. Your argument do not address the fundamental problem with the "Fair Tax"

    Fair tax is a sales tax as you agreed. Sales Tax is unfair and regressive. Read the article I posted earlier about sales tax. It should give you my issue with it very nicely with real numbers.
    There you go putting words in my mouth again...

    My point is that income and taxes should not be directly connected. Punishing people for no reason other than the fact that they are successful and make money is not in any way fair. The connection between income and taxation needs to be lessened if not severed completely.

    Sales tax, by definition is not regressive. In fact, it has nothing to do with income what so ever. If you start making assumptions, you can connect it to income and debate it either way. But both arguments for and against are making assumptions that cannot be known.

    A side point I also made is that ALL money made is eventually spent and thus eventually taxed. No on puts all their money in a bank and never spends it. Even if they did, they will eventually die and then someone else will spend it. No matter what, effective tax rate will eventually be 100%. Every dollar made is eventually transfered and taxed.
    12-13-2013 03:48 PM
  8. Timelessblur's Avatar
    There you go putting words in my mouth again...

    My point is that income and taxes should not be directly connected. Punishing people for no reason other than the fact that they are successful and make money is not in any way fair. The connection between income and taxation needs to be lessened if not severed completely.

    Sales tax, by definition is not regressive. In fact, it has nothing to do with income what so ever. If you start making assumptions, you can connect it to income and debate it either way. But both arguments for and against are making assumptions that cannot be known.

    A side point I also made is that ALL money made is eventually spent and thus eventually taxed. No on puts all their money in a bank and never spends it. Even if they did, they will eventually die and then someone else will spend it. No matter what, effective tax rate will eventually be 100%. Every dollar made is eventually transfered and taxed.
    And their we have the disconnect.
    In simple terms those arguing for the fair tax are for punishing people for making less and rewarding people for making more.

    As we agree the fair tax is a sales tax. Sales tax is regressive. That is the fundamental issue. Fair tax is anything but fair.
    12-13-2013 03:55 PM
  9. Aquila's Avatar
    I think we all agree that a sales tax is regressive relative to income. Is there merit to the idea that taxes should be fully separated from income? Another question... does the Fair Tax raise enough revenue to make significant progress on downsizing the debt? Obviously a crucial issue here is less revenue. Marginal tax rates decrease, by a lot, pretty much across the board. Corporate taxes disappear and the middle class is paying the highest portion of taxes relative to income, providing an incentive to not push capital into the markets for consumer goods (or at least not for new ones). We do get mitigation in that those currently untaxed will begin to be taxed, but where are the expense cuts at to make the budget balance? What specifically is being cut and by how much is critical to the viability.

    I would disagree that all income is taxed eventually. Each dollar may be (and more than once) but it depends on it's course. It's certainly not taxed by every party that touches it, only the one(s) that spin it into the consumer market. Reinvestment is not taxed.
    12-13-2013 04:06 PM
  10. NoYankees44's Avatar
    And their we have the disconnect.
    In simple terms those arguing for the fair tax are for punishing people for making less and rewarding people for making more.

    As we agree the fair tax is a sales tax. Sales tax is regressive. That is the fundamental issue. Fair tax is anything but fair.
    If you would actually address my logic instead of repeating the same "sales tax regressive" sentence, we might actually be able to have a discussion. But unfortunately you have devolve into not reading posts or addressing points again, so we are done here. Good day.
    12-13-2013 04:08 PM
  11. Timelessblur's Avatar
    If you would actually address my logic instead of repeating the same "sales tax regressive" sentence, we might actually be able to have a discussion. But unfortunately you have devolve into not reading posts or addressing points again, so we are done here. Good day.
    Seem like it. You refuse to follow any logic on sales tax being regressive or reading anything arguing for it.

    But I see no way around the fundamental issue. The only way the fair tax is fair is by ignoring the simple fact that sales tax is regressive in relationship to income. That is the key factor to even remotely make your argument work.

    We agree the fair tax is a sales tax. But you keep arguing that a sales tax is not regressive and have not provide any data proving that it is not regressive. I provided data it is regressive.
    There is no getting around the fact that a sales tax is regressive.

    Are you for a regressive tax yes or no?
    12-13-2013 04:14 PM
  12. NoYankees44's Avatar
    Seem like it. You refuse to follow any logic on sales tax being regressive or reading anything arguing for it.

    But I see no way around the fundamental issue. The only way the fair tax is fair is by ignoring the simple fact that sales tax is regressive in relationship to income. That is the key factor to even remotely make your argument work.

    We agree the fair tax is a sales tax. But you keep arguing that a sales tax is not regressive and have not provide any data proving that it is not regressive. I provided data it is regressive.
    There is no getting around the fact that a sales tax is regressive.

    Are you for a regressive tax yes or no?
    Last chance to not waste my time...

    Sales tax is only regressive if you force a connection between sales and income and then assume the majority of income is saved.

    Sales tax by definition has nothing to do with income. It is completely unbiased about what is made by those spending money. It can effectively be regressive or progressive depending what is spent. It is the exact opposite of the current system that only factors income instead of money spent.

    Honestly, in the perfect world, taxes would be neither regressive or progressive. The fair tax would put us closer to that perfect world. The only real thing to decide is how it would effect the spending in the economy as Nothingistrue was talking about
    12-13-2013 04:32 PM
  13. Timelessblur's Avatar
    Last chance to not waste my time...

    Sales tax is only regressive if you force a connection between sales and income and then assume the majority of income is saved.

    Sales tax by definition has nothing to do with income. It is completely unbiased about what is made by those spending money. It can effectively be regressive or progressive depending what is spent. It is the exact opposite of the current system that only factors income instead of money spent.

    Honestly, in the perfect world, taxes would be neither regressive or progressive. The fair tax would put us closer to that perfect world. The only real thing to decide is how it would effect the spending in the economy as Nothingistrue was talking about

    And there we have the problem.
    I addressed it up above. I believe in taxing disposable income at a flat rate. Cost of living is logarithmic function in relation to income. This means as you make more your disposable income goes up a percentage of your income.
    That part should be tax at flat rate. The fair tax does nothing on that. It taxes consumption only and in the end shift the tax burden to the middle class.

    The fair tax only is fair if you completely disconnect it from income but that is impossible to do because guess what poverty rate is based on income. It is still tied to income and your overall tax rate is based on income.
    Simple fact is you have not getting away from it but sweeping the problem that the "Fair tax" shift the tax burden on to the middle and lower classes meaning more of their disposable income has to go to paying taxes. you are effetely punishing people for making less.

    Fair tax is far from perfect world. It is a regressive tax. As explain before sales tax is regressive and you have been dodging that issue.
    12-13-2013 04:52 PM
  14. NoYankees44's Avatar
    And there we have the problem.
    I addressed it up above. I believe in taxing disposable income at a flat rate. Cost of living is logarithmic function in relation to income. This means as you make more your disposable income goes up a percentage of your income.
    That part should be tax at flat rate. The fair tax does nothing on that. It taxes consumption only and in the end shift the tax burden to the middle class.

    The fair tax only is fair if you completely disconnect it from income but that is impossible to do because guess what poverty rate is based on income. It is still tied to income and your overall tax rate is based on income.
    Simple fact is you have not getting away from it but sweeping the problem that the "Fair tax" shift the tax burden on to the middle and lower classes meaning more of their disposable income has to go to paying taxes. you are effetely punishing people for making less.

    Fair tax is far from perfect world. It is a regressive tax. As explain before sales tax is regressive and you have been dodging that issue.
    Fair tax does exactly what you describe. It only taxes disposable income after cost of living. It just does not collect the tax until the income is spent. Basically taxing on the back end instead of the front.

    I have made no assertions about the tax burden what so ever. That would require making baseless assumptions that cannot be known at this point in time.
    12-13-2013 05:06 PM
  15. Timelessblur's Avatar
    Fair tax does exactly what you describe. It only taxes disposable income after cost of living. It just does not collect the tax until the income is spent. Basically taxing on the back end instead of the front.

    I have made no assertions about the tax burden what so ever. That would require making baseless assumptions that cannot be known at this point in time.
    No it does not. Cost of living is not a the same. Cost of living has a directly relation to income.

    Someone making a 100K of year has a lower cost of living than someone making 1 million a year. The fair tax does nothing to balance that part out.
    The fair tax gives everyone the same amount of money but does nothing ZERO to address the fact how cost of living increases.
    It shift the tax burden to the lower classes.


    As you agreed The fair tax is more or less a fancy sales tax.
    'Fundamentally Unfair': How States Tax The Richest 1 Percent At Half The Rate Of The Poor | ThinkProgress
    That link cover the issue with sales tax. The fair tax does nothing to address that.
    12-13-2013 05:11 PM
  16. NoYankees44's Avatar
    No it does not. Cost of living is not a the same. Cost of living has a directly relation to income.

    Someone making a 100K of year has a lower cost of living than someone making 1 million a year. The fair tax does nothing to balance that part out.
    The fair tax gives everyone the same amount of money but does nothing ZERO to address the fact how cost of living increases.
    It shift the tax burden to the lower classes.


    As you agreed The fair tax is more or less a fancy sales tax.
    'Fundamentally Unfair': How States Tax The Richest 1 Percent At Half The Rate Of The Poor | ThinkProgress
    That link cover the issue with sales tax. The fair tax does nothing to address that.
    Cost of living is what it takes to live minimally. You can do things to increase your personal cost of living like buying and heating a 10000 Sq ft home, but that is your choice to increase. It has nothing to do with how much it actually cost to live in an area. The cost of living is the same for everyone in an area.

    I have no earthly idea what definition of cost of living you are using. Unless you are somehow comparing to income in some convoluted way.
    12-13-2013 05:19 PM
  17. Mooncatt's Avatar
    Is there merit to the idea that taxes should be fully separated from income? Another question... does the Fair Tax raise enough revenue to make significant progress on downsizing the debt?
    To answer your first question, I think the idea is like what NoYankees44 said. In that by taxing consumption, we are not taxing someone for being successful. We tax the choices of what they do with the money they earn. For the second question, the Fair Tax is designed to be revenue neutral. As you've seen, the plan alone has quite the debate going on. Trying to also add in deficit reduction measures would make it an even bigger hill to climb and is another battle all its own. That being said, it's reported many economists supporting the plan (and I tend to agree) think there will be a side benefit of budget and deficit reduction. For one, the government will have less expenditures to run the plan compared to the current system. Second, it would make the U.S. the most tax friendly country in the world for businesses due to no longer having any corporate taxes on top of our various resources. The expectation is businesses would move back in droves, employing lots more people, and there by reducing demand for social services while increasing tax revenues as these new/better employed people start spending more. So while it's conceivable to see deficit reduction and budget surpluses as a result, that is not the goal of the Fair Tax.

    As you agreed The fair tax is more or less a fancy sales tax.
    'Fundamentally Unfair': How States Tax The Richest 1 Percent At Half The Rate Of The Poor | ThinkProgress
    That link cover the issue with sales tax. The fair tax does nothing to address that.
    I already addressed the issue with that article the first time you posted it. Care to make a rebuttal?
    12-13-2013 07:08 PM
  18. Aquila's Avatar
    Food for thought: What if the Fair Tax was 50%, instead of 23% and the prebate were approximately 117% more as well? The scaling would eliminate nearly all of the argument against, as it increases the "standard of living" assumption relative to the poverty level. Many benefits consider applicants eligible at up to 4x the poverty level, and this would be approximately 2x the poverty level, in essence flattening the curve, while still claiming most, if not all of the benefits of the plan.

    What are the cons of that proposal and what are the actually most optimal values for "fairness"? Keep in mind, the 23% is arbitrarily based on the lowest income tax bracket + payroll taxes, rounded up from around 22.6 to 23%. That in itself is somewhat of an issue (not sure why it wouldn't have been something more like a weighted average of existing rate, normalized for cost saving opportunities), but plotting this out in an optimization model is pretty easy.
    12-13-2013 07:33 PM
  19. Aquila's Avatar


    An example of the above idea... I can totally buy into the idea of personal choices dictating % of revenue going out to taxes, and in a situation like this the average effective rate meets the 23% expected from the Fair Tax site. It's still regressive, but those who are in the middle class and want to pay less can either buy less stuff or a higher ratio of used goods, etc. The main reason for the jump and decline is actually related to that, in that thsoe in the lower class and lower middle class are expected to spend the prebate money, while those in the higher classes would not need to, and can contribute it (or part of it) towards savings or investments.

    *12,000 is approximately double the expectation from the site on a family with 1 child, but from our example yesterday it's an increase of 140%.
    12-13-2013 08:02 PM
  20. Mooncatt's Avatar
    Food for thought: What if the Fair Tax was 50%, instead of 23% and the prebate were approximately 117% more as well? The scaling would eliminate nearly all of the argument against, as it increases the "standard of living" assumption relative to the poverty level. Many benefits consider applicants eligible at up to 4x the poverty level, and this would be approximately 2x the poverty level, in essence flattening the curve, while still claiming most, if not all of the benefits of the plan.
    From my understanding, the sole purpose off the prebate is to not require people to pay tax on the necessities. Anything bought after the poverty line is assumed to be pure choice, regardless of the reasons, and to ensure the lower, classes aren't hurt by the tax. When you start raising it above that (and the tax as well as offset to it) and get into standard of living discussions, things get dicy. It then becomes a debate on what constitutes a standard of living and complicates things. As proposed and as I've pointed out earlier, any tax paid/avoided after the prebate amount is left up to the individual.

    What are the cons of that proposal and what are the actually most optimal values for "fairness"? Keep in mind, the 23% is arbitrarily based on the lowest income tax bracket + payroll taxes, rounded up from around 22.6 to 23%. That in itself is somewhat of an issue (not sure why it wouldn't have been something more like a weighted average of existing rate, normalized for cost saving opportunities), but plotting this out in an optimization model is pretty easy.
    I'm curious where you got the idea that the Fair Tax rate has anything to do with being based off that current brackets and rates.

    In essence, what they did was look at government spending. Then they said let's strip away all federal taxes and replace with a single national sales tax. The question then becomes what rate would be best to insure the net revenues to the government would be enough to cover those existing spending levels. It is accepted that with so little existing data to predict a true final rate that the rate could be changed as needed over time to maintain funding. But unlike our current complex system, the tax rate is very transparent. Just like any state sales tax is listed on a sales receipt, so would the Fair Tax rate. Any change to it would be easily noticed and challenged by the general public, forcing politicians to justify their actions.
    12-13-2013 08:11 PM
  21. Aquila's Avatar
    I'm curious where you got the idea that the Fair Tax rate has anything to do with being based off that current brackets and rates.
    It says it on the front page of their site (I think).

    Any change to it would be easily noticed and challenged by the general public, forcing politicians to justify their actions.
    Nothing wrong with this idea at all, as long as politicians have the courage to act when needed despite whining.

    It then becomes a debate on what constitutes a standard of living and complicates things.
    This is a conversation that ought to be had, because the current "poverty line" is far too low (IMO). Given that those at or below it, or typically up to 3x or 4x it are eligible for state and federal assistance with basic necessities, such as food, housing, childcare, education grants, etc.... my belief is that the poverty line should be drawn at a level of sufficient income to live very modestly without assistance from taxpayers. So I suppose I'd be in agreement with basing it on the poverty line, if we redefined the line to something that reduces (or eliminates) the burden on everyone else to help support them for survival needs.
    12-13-2013 08:19 PM
  22. Mooncatt's Avatar
    It says it on the front page of their site (I think).
    I found a link to their white paper on the front page, and in there they make a comparison between effective tax rates under the two plans. Yes, the 23% is roughly what the lowest tax bracket's effective rate is right now, but it looks like it was stated for purposes of comparison. Not trying to say that was the basis for the new rate. If you've seen something staying otherwise, I'd've happy to look at it.

    This is a conversation that ought to be had, because the current "poverty line" is far too low (IMO). Given that those at or below it, or typically up to 3x or 4x it are eligible for state and federal assistance with basic necessities, such as food, housing, childcare, education grants, etc.... my belief is that the poverty line should be drawn at a level of sufficient income to live very modestly without assistance from taxpayers. So I suppose I'd be in agreement with basing it on the poverty line, if we redefined the line to something that reduces (or eliminates) the burden on everyone else to help support them for survival needs.
    I don't know enough to debate where the poverty line should lie. But if you want to have such a debate, I say we also need a debate on those entitlements. Is a 4X the poverty rate a good guideline? When I hear stories like the one lady a while back in Pennsylvania that would have needed a 60k/yr job to offset all the entitlement funding she received (effectively paying her to be poor), I'm inclined to say we need to dial those back some.
    12-13-2013 08:56 PM
  23. nolittdroid's Avatar
    Different question: (and rant)

    We fought the revolutionary war primarily because of tyrannical practices relative to banking, currency and taxation. For over 100 years from the beginning of the United States, we fought a raging battle against having a centralized bank and/or any form of an income tax. Why on earth are we discussing the best way to be figuratively raped by the establishment, rather than discussing how to end their abuse? The concept of an income tax was insanity to most of our leaders and a centralized bank was a treasonous to install.

    In my opinion, the lowest risk plan for our long term outlook is to find a way to politely cancel the debt to the federal reserve banks, cancel any obligations to the IMF and cancel the debt to the Bank of England.

    Step 1, cut ties, deport their officers and be done with it. That one move eliminations 7-12% of our carried expenditures, eliminations 70-75% of our total debt, arrests inflation based on fractional reserve capital and puts an end to the greatest 100 year long theft of property and "money" ever conceived.

    Step two, new currency, based on something that actually exists. Issued by the treasury department and never inflated. If a dollar represents an ounce of silver, it's an ounce of silver. Whatever, use coconuts if it makes you happy, just pick a commodity, establish value and chain it to currency. Banks, if they want to play, have to make loans based on assets on hand, not create money out of thin air.

    Step 3, if we can't afford something, we don't buy it. If not being able to borrow money means we can no longer pay for millionaires (congress) to be paraded around the country in limousines and reside in some of the nicest offices ever constructed... maybe those millionaires can sustain themselves. If it means we can't have billions and billions in subsidies to companies that are billions and billions in the black... sorry, not sad. Expense needs to be at least 1 cent lower than adjusted revenue or we're failing.

    Step 3B, serious consideration and thought leadership needs to be devoted to the concept of a sustainable optimization of available resources. Our current strategy seems to be to pray that we're hit by a meteor that ends all life prior to everything collapsing because we run out of some critical resources which we could easily replace if we stopped wasting all of our money further entrenching the industries that restrict progress.

    Step 4, if we fail at step 3, if the nation is not profitable, congress does not get paid (elected members), nor reimbursed for expenses. In addition, contracts will be awarded based on economically sustainable value optimization formulas, not on, "Bill's brother", "cheapest", whatever. Favoritism is cancer.

    Step 5, if we are going to have an income or sales tax, it will be fully accountable and, in the case of income tax withholding, interest will be paid to citizens who loan money to the government.


    /end rant

    nevermind, I'm starting my own country and there will be no taxes except sin taxes (based on the whims of the emperor).
    May I join? I propose everyone stops paying taxes until this corrupt administration and the losers in the House and Senate figure out how to balance a budget. This is why politicians ruin the country...I wonder how many CPAs, tax lawyers, financiers etc are elected to public office.

    FWIW I don't approve of the flat tax, it doesn't seem to factor for cost of living. $200k in NY & new england is barely middle class, but considered wealthy in some southern states.

    ✌SG3/iPad2
    12-15-2013 06:22 PM
  24. Mooncatt's Avatar
    This is mainly for NothingIsTrue, but anyone can of course chime in.

    http://www.fairtax.org/YoungLowIncome
    (Hope this linked right. It's a pdf and my phone just starts the auto download)

    To summarize the pdf, there was a new study published comparing lifetime expected tax burden under the current system and the Fair Tax. They are claiming that not only would everyone's burden go down over their life, but low and middle income families would see a greater percentage reduction. This addresses the whole regressive/progressive debate we were having.

    NIT, you've got a head for numbers. What do you think of this?
    01-03-2014 08:45 PM
  25. Aquila's Avatar
    This is mainly for NothingIsTrue, but anyone can of course chime in.

    http://www.fairtax.org/YoungLowIncome
    (Hope this linked right. It's a pdf and my phone just starts the auto download)

    To summarize the pdf, there was a new study published comparing lifetime expected tax burden under the current system and the Fair Tax. They are claiming that not only would everyone's burden go down over their life, but low and middle income families would see a greater percentage reduction. This addresses the whole regressive/progressive debate we were having.

    NIT, you've got a head for numbers. What do you think of this?
    Without their data or an outline of their assumptions, this is hard to compare to other models. For example, my understanding is that currently a family of four at 20k would be well below the poverty line, and would currently have a negative tax burden for the duration that they are in that category, but there is nothing outlining the assumptions about income mobility, etc to try to validate. If the numbers displayed are accurate, there are still two issues. 1. Is the difference between marginal and effective tax rates compounded with types of income sources and 2. the amount of discount isn't a static comparison, but involves scaling. I have no doubt that the calculations are correct, however whether they are correctly modeled is a totally different question.

    This is where the presentation of analytics towards a marketing message versus the presentation of analytics to troubleshoot optimization issues becomes annoying to people that don't like math, because Dr Walby is a brilliant figure in quantitative tax theory, however she's well aware of the issues that come from not presenting an impartial analysis of data or the actual data. So the parts that are obviously misleading, are misleading on purpose, the parts that are fuzzy are fuzzy on purpose and the parts that are clear, are mostly clear because they back up the underlying point of the marketing campaign, while some that seem clear are actually spun from impartial to on message prop while omitting mitigating context. Is the actual whitepaper available or just the summary? That might have the details needed to answer all of the questions that the sales pitch brings up. I can check the math based on the table provided to see if it actually makes it more progressive or not. (Will follow up)

    For example, I can write a paper that is 100% factual that shows mathematically that social security is both secure in cashflows and immune to market flux, however if I leave out some key facts, such as raiding, contribution projections and don't discuss caps at all, despite being 100% factual, I'm not telling the truth. This is why 3 or 4 different companies have either the largest or fastest "4G" network in the United States. Obviously, only one is actually the biggest and/or the fastest, but they all make that claim and are simply changing the meaning of the words without ever defining them to people not in the conversation.
    palandri likes this.
    01-03-2014 11:11 PM
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