Fair tax anyone?

Goslash,

Why is a percentage "fair". Do you really figure that someone who only makes $20,000 is affected the same by losing 20% of it as someone who makes $100,000?

Proportional doesn't equate to "fair". A poor persons food doesn't cost them 5 times less than someone affluent.


The current tax code at least reflects the fact that a tax on a low income citizen represents a bite into their living expenses, while a higher income person pays their tax and still has more descretionary funds than living expense left. Flat tax isn't very flat when you're living it.


Sales tax is very equitable because it taxes the USE of money, rather than the making or the saving. As long as food is not taxed the same way, it is fair because it accounts for living expense while not taxing savings.
 
Handy,
As Waitone said above, taxes are a part of living in a country. When that big bridge between me and my job needs fixed, I can't have them waking me up in the middle of the night to go and help fix it so I pay someone else to do it.
Yes, on the one hand $2,000 is alot to shell out for someone who's just getting by. But $200,000 ain't cheap for someone who made a million either.
Regardless of how much it may or may not strain the budget, nobody likes paying taxes but it's a necessity.
Treating different classes differently merely leads to class warfare.
 
I didn't say taxes were unnecessary. I'm saying that it is a myth that "proportional" implies "fair".

I think we've all been poisoned by statistics. Proportions don't tell the whole story. If 300,000 people in a city of 1,000,000 get sick, that's an epidemic. But if 3 people in a community of 10 get sick it is expected. You can't just lay every number on a scale of 1 to 100 and presume that you're making a reasonable comparison.


Hamburger and gas cost what they cost whether you're Rockafeller or homeless. Rockafeller doesn't eat proportionally to the other guy. He doesn't contribute as great a percentage of his income to the economy either. But when you want to tax, all of a sudden a percentage applied to both men makes sense when they haven't had ANY other portion of the incomes spent at all proportionally? That's ridiculous.


Want to tax proportionally? Fine. Just make sure Rockafeller buys 1,000,000 hamburgers for the homeless guy's one.
 
I read Neil Boortz's book, and after some reflection I think there are serious problems with it. I'd be curious to hear the supporters answer the following issues.

Boortz claims the new system will be so simple we can do away with the IRS, and end their digging into every private aspect of American's financial affairs. I am not so sure. The fair tax means the government collects 23% of the sale price of all new goods and services to consumers. Wholesale transactions and used goods are untaxed. Boortz claims tax fraud will drop since fraud will require two parties to conspire to commit a crime. But there are opportunities for fraud that do not require conspiring parties, by either claiming purchases as capital goods for one's "business", or, say, by returning new goods and then buying them back as untaxed used/refurbished products. The retail sector in particular will provide a lot tempting opportunities for a business owner to buy "one extra" for an off-the-books personal purchase. To prevent this fraud, will businesses be required to file inventory accounting reports to the government? Will the government be able to audit inventories for tax enforcement purposes? If so, how is this better than the current burden of filing income taxes?

If I buy some nails for home repair, they should be taxed. If a contractor buys nails for a new house, they shouldn't be taxed, since the nails become part of the house that is sold as new and taxed. How will businesses buy their capital goods untaxed? Let us stipulate that there must be some audit trail of purchases for enforcement purposes. I figure it will be implemented through a rebate program, either by manually filing receipts to the government, or a card that a business purchaser swipes at the register. What bureaucracy will process these rebates, and isn't this the same invasion of financial privacy that the FairTax was supposed to dispose of?

Even with the prebate program (do we really want to put every American household on the dole?), I cannot see how people will appreciate paying taxes on necessities, education, and medical care. Boortz claims our tax code is convoluted because of "K Street lobbyists" seeking subsidies, deductions, and exemptions for everything you could think of (except anything I could take advantage of, after looking at my 2005 return). I'm sure the income tax code looked pretty clean when it started in 1913. There isn't any guarantee special interests won't try to carve their own exemptions into FairTax, either.

I submit that the fair tax will require a significant amount of bureaucracy to implement, and that there are plenty of opportunities for fraud (which will justify the need for enforcement personnel). What agency will handle the bureaucracy and enforcement actions? I can think of one such agency that would be eager to take on a new role in the FairTax future.
 
Rockefellers caviar and lobster costs way more than Shmuckatellis cheeseburger does. C'mon! talk about fair comparisons.:rolleyes:
 
I've brought up the same point Telperion. No one has an answer for how you control the accounting and definition of "sales" when there is no longer even governmental monitoring of business income.

The day this system goes into affect I incorporate as a "general merchandise vendor" and buy everything for potential resale. Anything I can't buy wholesale I will attempt to rent, permanently.



You're right, Ruger. Lobster costs 20 dollars a pound, and hamburger 3. So Rockafeller's meal was 7 times more expensive, or the hamburger was 15% of the lobster. However, Rockafeller makes 1000 times more money than the hamburger guy, so he should still be eating 150 of lobsters per burger. :)
 
leadcounsel; let me get this straight:

One of the main arguments against our current system is that rich people really don't pay their fair share for the lavish lifestyle a free economy has allowed them. Sure they provide jobs, but many of those rich people became rich because somewhere down the line they have exploited the poor, exploited the environment, exploited the tax system, made profits on unhealthy or worthless products (ie big tobacco, professional sports, movies and entertainment, cola, candy, etc.) etc. Another argument against the current system is that it is completely inefficient. The manhours spent for each person around tax season is a wasteful number indeed.
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You're telling me because my dad works his %$@ off and makes good $$$$$$ , he should have to pay more for the privelege of working harder than others?? How has my father exploited the poor, leadcounsel? If by working 14 hour days he is exploiting that person who was too lazy to work hard, I guess he's guilty as charged. By my dad's company valet parking your car; is he "exploiting" the environment? Your view is one of a victo-crat. It's not the poor person's fault he's poor, it must have been some meany weany rich person who keeps "putting him down". That's the same crappy basis as affirmative action (which I know a little about, figuring my 2060/2400 on the new SAT and 4.2 cumulative GPA weren't enough to get my white skinned self into UCLA...). Most poor people's poverty is under their own control. Intelligence, hard work, and dedication get people rich. My dad worked his way up from literally parking cars to being the Senior V.P. of an international company. I find it disgusting that you think he should be penalized for that with higher taxation. I think we should tax those that are willingfully unemployed MORE. Those who don't work don't eat. That's life. Gov't isn't mommy and daddy who feed, clothe, and hold your hand throughout life.

One of the main arguments against our current system is that rich people really don't pay their fair share for the lavish lifestyle a free economy has allowed them
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Do you have friends named Micheal Moore and Rosie O'Donnell? Rich people enjoy that lifestyle because they EANRED it. I know that word isn't used a lot by some people, because they believe everything in life should be handed to them. The rich pay most of the taxes; and the poor benefit the most from gov't aid.

I work for one of the richest individuals in the country. You want to talk about how people SCREW the system... look at the legal loopholes of how rich people avoid taxation, hide their money, put it off shore, you name it and he does it. He was such a penny pinching cheapskate and screwed people over left and right. Schrewd businessman. Sure. And sure, it was all legal, just disgusting to me how rich people find ways to not pay. Should have have to pay millions in taxes. I think he absolutely should.
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Okay, so then he'd be paying three million dollars more a year in taxes than you.... that's fair. You both drive on the same road, right? Whatever expensive car he drives he paid for with his own money, so please don't even comment on that. "find ways not to pay" makes no sense. They already pay millions; it's not like he completely ignored any taxes.
 
gfen,
I'm not sure what myths that link dispels. If the author is griping that the flat tax would reduce the tax liability of the rich, doesn't that imply that they pay a higher percentage under the current system?
 
Adams is saying that the rich would pay less and nearly everyone else would pay more. While you are focusing on the idea that the rich pay too much, you would have to include a belief that the poor and middle class pay too little.

Is that the case? Does the poor and middle class pay too little tax?




Want a really flat, 'fair' tax? Take the budget, divide it by the number of citizens, send out a bill for that amount. What could be more fair than every citizen, rich or poor, paying like $20,000 a year? Think how it would motivate people to get better jobs!;)
 
I'm surprised that you didn't pick up on it, GoSlash, as you tend to be one of the progressive thinkers around here.

A flat tax is a nifty idea on paper, and easily sold to everyone but at heart it works as a regressive tax, hitting people at the lower end of the scale harder than the top. So does a concept like a national sales tax. These are taxes that are aimed at those who earn less, whereas taxes with names I don't know like estate and capital gains taxes are aimed towards the more wealthy. In the end, the vast maze of laws and shelters ends up levelling the playing field rather nicely. When you pull one type of tax from the mix and hold it up as an example, its easy to make it look bad.

I think the most telling issue with all of these sweeping tax reformation packages is that the people who are always pushing them are at the upper end of the range, and can razzledazzle the proles into agreement by giving us a good sell. I'm a suspicious character by nature, when megamillionare Steve Forbes is pushing a tax plan, I have a hard time believing that its going to be better for the little guy over the megamillionaires.

In its way, convoluted and messy, the tax systems in place work remarkably well. Surely it could use some cleanup and some holes plugged in it, but in that respect most of the dodges are used by the wealthiest Americans, who have the lawyers and CPAs and tax types at their beck and call, and have the resources to pull off many tax dodges that a workign stiff like myself can't afford to do.

post script: I had to come BACK to the thread and edit my post to say that "feminist chicks dig me" made me pause, think, and laugh out loud. Score for Mr. Handy. :)
 
OneInTheChamber:

Let me clarify a few points. "Poor" OFTEN people include those who services NECESSARY to RUN the nation. Enlisted soldiers start at about $24,000; fire fighters and police starting salaries are often $30,000; teachers (with years of formal education) often start at less than $30,000; doctors and lawyers (each with 7-10 years of education costing upwards of $200,000) OFTEN start at less than $40,000; shall I continue? In my book that ain't rich, but these people sure are bustin' their butts working for a living and paying about 50% of their money to Federal and state taxes, gasoline taxes, income taxes, tolls, use taxes, food preperation taxes, parking tickets, phone bill taxes, you name it. So a teacher who is CRUCIAL to the success of our nation gets to take home about $15,000 per year. On that, s/he has to juggle a car payment, housing, food, medical bills, and the occassional entertainment. These are the working poor, the ever shrinking middle class who is living literally paycheck to paycheck and is one disaster from not making it.

Meanwhile... Kobe Bryant can sure dribble a basketball and makes tens of millions doing it, and man that Barry Bonds can juice up and sure hit a ball and make millions doing it, Rosie Odonnel and Oprah Winfrey have a rather large following, how about those Enron executives....? If you look at executives salaries for fortune 500 companies, the EXECUTIVES salaries have increased by some absurd percent like 400% over the last couple decades while the companies have gone through layoffs, cutting benefits, cutting pensions, etc. How much harder can Kobe Bryant work at something than joe schmoe doctor? There are only 24 hours in a day, afterall, and I bet that doctor works about 12-14 of them YEAR ROUND.

Now, who adds more value to the nation, the Kobe Bryants of the world, or the plain ole' teacher who instructs your kids how to read?

The point I'm trying to make is that I honestly don't have ANY sympathy for how "painful" a large tax is for those making millions of dollars. You know why, because I don't think they add nearly the BENEFIT to the society as the working poor. And, because in order to get that fabulously rich in the world, you either haven't earned it legitimately (illegal activity, inheritance, etc.) OR you aren't selling a product with REAL value (because nobody pays much for products with REAL value), meaning you're scamming people, exploiting people, or an entertainer who adds little value to the nation. Bottom line, the fabulously rich are generally also the fabulously overpaid (yes, this is a generalization and there are fabulously rich people who have earned every penny, but I have known loads of fabulously rich people and they didn't get rich by starting with nothing and working hard -- they were either lucky, exploited others, or inherited it, which was money earned by either exploiting others, getting lucky, or scams -- true "old money" generally comes from slavery, drugs, harmful products that were legal but then made illegal, etc.).

What's my point? My point is that if we continue to "under" reward teachers, doctors, soldiers, lawyers, etc. of the world we will continue to lose a lot of bright talent who chose to do other professions so that they won't be the working poor. Tax the heck out of the worthless professions and those that make millions simply based on the fact that they've made their millions because of the freedoms our society provides for them to be so successful and they should contribute back.
 
gfen,
Perhaps it's because I'm not as 'progressive' as you assume.
I am very socially libertarian but also believe in the responsibility that comes with freedom.
I realize that a flat tax will increase the tax burden on the working poor, but I also believe that it's because they're not paying their share. And a flat tax is alot more scaled than an equal liability scheme.

Handy,
I'm not focused on the concept that the rich pay too much. I'm focused on the concept that 1) the poor don't pay any, 2) The rich hire tax attorneys to slip them through the loopholes intended for the poor, and 3) the tax code is so convoluted that people are forced to shell out money just to avoid getting in trouble.
I realize that the equal liability scheme you mentioned was in jest, but I'm gonna respond anyway.
If we were to tax every citizen the same amount whether or not they are earning money it would bankrupt the country. Can't get blood from a stone and all that.
 
Some poor don't pay taxes. But many poor and all very low middle class do pay taxes - and flat tax raises taxes for those people.

So back to that - do you feel that the people on the bottom of the system are currently paying too little tax? Because that's the implication of changing the tax to flat.
 
How bout NO tax?

1) Dump the IRS, dump income tax, go to pure federal sales tax. No more filing, no more corps getting around paying taxes through various loopholes.

1a) I agree with this. You control what you get taxed on. You dont wanna pay cigarette tax? Dont buy cigs! That simple... Yes it is!

2) That doesn't sound very fair to me, If I make 50,000 spend 40,000 I get taxed on 80% of my money

2a) Sounds fair to me... You pay tax on 100% of your income right now! When I get taxed on my income, they dont take x% off of x%. Its x% on 100% of my income! Then I have to claim any taxes I was rembursed the year before as income on this years return! Its not income, it was mine to begin with.

3) Another problem is that rich people, proportionally speaking, don't spend as much of their income on goods as poorer people do. I think they would end up paying a lot less tax than they do now

3a) rich folk use as much if not more resources than the average Joe.. They just pay people to buy them for them!

In all, I dont know if a flat tax is the answer. I prefer the Federal, and State sales tax. Thats about it! No Income tax, no ss tax, just sales tax!
 
I don't like having a tax rate as I can never see it being fair.

The gov't should figure out it's budget, divide it by the population and then everyone in the country pays their percentage of the bill. If you want to be a citizen then it cost $X this year. No other business says "oh, you make $x so your meal will be twice that guy's meal".

We should not pentalize people for being successful. Also, Bill Gates (or whichever rich guy people want to use today) doesn't use 100 times more stuff than a less wealthy citizen.

Also, after the first set of bills were sent out and the American people saw that they were paying $x to some BS program or some corrupt country then we might really get a better representative government. I think the budget would fall by at least 25% if people saw all the waste that was in it. Also, the politicians would know that people were actually watching their pork.
 
All I can say, lead, is you have a helluva lousy opinion of people. The reality is most of the rich got there by working for it. OTOH most of what you appear to cite as "poor" are a long way from it, if they have used their heads in managing the money they have. As for the real poor, the majority of them are there because they aspire to nothing better. My wife and I have to employ all too many of them and the excuses and failures and lies and ignorance get old fast. They certainly add nothing to society, while the rich continue to provide all the jobs(except, oddly, most of those you mention which come from the gooberment on the back of taxes).

Right now the real poor pay nothing and the lower middle class pay little or nothing. ALL the tax burden is on the middle class to the rich. That's me. I suspect it might also be you. So let's spread the joy, or let's eliminate it entirely. But let's stop with this class-warfare mentality. There's nothing honorable about being poor, nor ignoble about being rich and the real problems, as usual, lie with government.
 
2ndAmendment:

Those with incomes over a million per year are the vast MINORITY of people. So you're really fighting for the rights of the MINORITY here. Sure, you can argue principal all day, but I don't feel sorry for the rich people that might have to buy one less house this year or go on one less cruise or take one less private jet trip.

Are you aware that MOST of Americans live paycheck to paycheck, the middle class is shrinking fast and most of those who were middle class are moving toward the "poor" end of the spectrum? People are becoming strapped with debt just to compete or get decent jobs. My education cost $80,000 for college (thankfully I had scholarships and grants to pay much of it) and another $65,000 for lawschool (which has gone up to over $90,000 in just a few years). I WORKED my A** in school and lawschool and held part time jobs from 15-21 and then full time jobs since, even through law school. During lawschool I worked 40+ hours per week at a professional job, then took 10 law school credits and the accompanying homework and studying. That's about 60 hour weeks for several years. My tuition was about $2000 per month while is school. Tell me I haven't paid my dues!

I use almost no social services. I've called the police for myself once in my life. I've never used the fire department. I drive on the roads an average amount. I doubt I'll see SS money. I've never collected government aid. I've never gotten free medical care. So, I definately am not strapping the system with my problems.

While I'm not going to tell you my income, I'm certainly not rich. If I were rich I would be very thankful and gladly pay my higher share of taxes because money buys EVERYTHING in this world and really does take care of just about every worry a person could have (except health to some degree).

While pure capitalism is a fun ideal, the problem is that hard work doesn't always equate to high income for whatever arbitrary reason that society deems professional basketball players (and even collegiate ones that squander their free education) more important than teachers by a factor of 1000.

I look at taxes as a mere "correction" of what society SHOULD value vs. what society DOES value. There are CORE values that we should pay higher salaries for (eg teachers) and other professions which are a mere diversion or not as important to the function of society (eg. actors, musicians, athletes, TV personalities, etc. who make astronomical salaries). So, I'd say tax 'em for their luck of being good at a worthless profession which pays handsomely and redistribute that money into professions that are needed (like the 911 dispatcher making $8 per hour who may dispatch an emergency service to save your families life, or may foul it up and send it to the wrong place).
 
Handy,
do you feel that the people on the bottom of the system are currently paying too little tax?
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Yes I do. Certainly the phrase "from each according to his ability" should apply here. And it would at worst even out for the folks who are in the lower-middle tiers since the government can scale back IRS and we don't have to pay H&R Block to do our returns just to make sure we haven't done something wrong.
 
My education cost next to nothing. I bet I make more than you. Point not being that I am oh so great, but that the opportunities are out there, still, for those who use their brains. You don't have to be rich nor incur massive debt to succeed.

You seem to have changed your definitions. You don't have to make a million a year to be rich. Don't think either of us said that, though you did seem to previously be addressing your concerns more towards the hyper rich. For me "rich" is a millionaire(worth a million or more). Hell, a guy who owns his on home and business and isn't buried in credit card debt is rich. And that leads to something else: The middle class is "dissolving" mainly because they have created their own hole. Rather than save and refrain from every toy offered by a shallow materialistic society they have the "Want it all, want it NOW" mentality.

You don't get rich that way. OTOH you can't really expect much sympathy when you can't pay the bills on the BMW, the Lexus, the 3 four wheelers and the Harley and the trophy home and the pool and the watches and jewelry and the million things you don't even remember charging...

Lastly, just because I have things I have to do, I see taxes as the reason for poor and for the theoretically increasing class divide. The more you make, the more the government gets. The more the government takes the less is available to We the People(government contributes nothing that could not be better accomplished by the private sector ar at least local government). Taxes of the sort we are talking about are a tool to equalize alright. Equalize at the lowest common denominator, while funding abloated buraeucracy designed to actually reward the richest of the rich, the ones who actually ARE the kind of amoral criminal element you speak of.

But my solution works for me: Cash and barter are wonderful things. :)
 
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