It also shut down the screening office for Homeland. No junk mail today.

Or it means the IRS decided to audit God or one of his emissaries.

It's been raining like crazy here. I'd hate to see what a hurricane does.

Are there any good arguments against the Fair Tax, other than it would put a lot of accountants and lawyers out of business??

vernonFL
Are there any good arguments against the Fair Tax, other than it would put a lot of accountants and lawyers out of business??

More black markets

More black markets

Probably, but then you could also tax things like Ebay or other online sales that you don't tax now.

vernonFL

Probably, but then you could also tax things like Ebay or other online sales that you don't tax now.

That would discourage people from using Ebay. Also, you probably couldn't anyway because a large portion of items on Ebay are all second-hand things that people have already purchased, which can't be taxed again.

vernonFL

Regressive taxes limit individual spending and encourage black markets. Lower income families spend more, percentage-wise, of their earnings on saleable goods. Putting more people in the situation where they can't afford to carry on normal life increases homelessness and crime.

Progressive taxation is a price the rich must pay for a low crime, stable society that encourages value in things that cannot be easily liquidated, such as land. It keeps those most likely to riot because they realize they're being screwed six ways from Sunday fed and happy. The Romans understood the utility of bread and circuses.

And really, if you're trying to make up for an umpty-ump trillion dollar debt, why would you ever tax the poor? They don't have any money!

Progressive taxation is a price the rich must pay for a low crime, stable society that encourages value in things that cannot be easily liquidated, such as land. It keeps those most likely to riot because they realize they're being screwed six ways from Sunday fed and happy. The Romans understood the utility of bread and circuses.

Tocqueville understood this concept also. . .

Gwendolyn: I'd hate to see what a hurricane does.

Not hurricane, but tropical storm. In 1994, a tropical storm came to Georgia, and just sort of sat over us, not moving at all. It rained for a few days straight. During such time, the Flint River, one of Georgia's major rivers, flooded. The effects of this were felt downriver.



This is a picture of the Baker County courthouse in the city of Newton, GA in 1994, after the rain ended. This storm sumped an impressive 21.1 inches of rain in 24 hours in the city of Americus, GA.

Anyway, that's what a tropical storm can do. No clue about a hurricane.

sozeRegressive taxes limit individual spending and encourage black markets. Lower income families spend more, percentage-wise, of their earnings on saleable goods. Putting more people in the situation where they can't afford to carry on normal life increases homelessness and crime.

I'll agree that it would encourage more black markets, but I don't understand why it would cause widespread riots or unrest?? How would it screw poor people again? If they spend more of their income on saleable goods - (like ding dongs, faygo, cigarettes and lotto) then that is their problem.

Maybe along with a Fair Tax we could have seminars or free classes for poor or irresponsible people. I'd volunteer to teach one.

soze

I see another point - lets say you are a waiter, and most of your income is tips which are not taxed.

Officially you make $2 per hour, which is taxed. Under the Fair Tax, you would not have to pay taxes on your $2 per hour, but you would end up paying more out of your pocket because you would be taxed with everything you buy with your tip money.

So yeah, in that case the Fair Tax would be worse for the waiter.

I spent an hour sitting in my car because of the flooding, and I consider myself lucky. Maybe this is biblical.

vernonFL

f they spend more of their income on saleable goods - (like ding dongs, faygo, cigarettes and lotto) then that is their problem.

Try conceiving of a poor family just trying to make it sometime over some stereotyping. People have to eat, they have to have clothing to wear, and they have to buy household goods like mops and toilet paper. If your household pulls in $30k/yr, you're going to be spending a lot more of your income percentage-wise on sales tax than the guy pulling in $300k/yr (this is, of course, assuming both households spend rationally). That's income that could have been going to savings or house payments or heaven forbid an occasional bag of M&Ms.

I agree that the $300k/yr guy is still paying more in tax than the $30k/yr guy, but that money doesn't mean as much to him. That's why we have progressive taxation, it taxes the people who can more afford to pay it. Sure, $5k/yr in taxes sucks for the $300k/yr guy, but not like it does for the $30k/yr guy.

Try being right on the razor's edge sometime. $10 can mean a hell of a lot.

soze

I see your point.

I hope my calculations are correct here:

I paid $4500 net in federal taxes last year. I generally spend $100 - $200 per week in saleable goods (mostly food and beer). At a 23% FairTax rate, that would be $23 - $46 dollars a week extra or over a year $1196 - $2392.

I would not be paying the $4500 in federal taxes though, so I would actually have more money than I did before.

Am I wrong or missing something?

vernonFL

FairTax also taxes services at that same 23% rate.

Also, your math fails because you cannot account for the unexpected. Your washing machine breaks? A new one costs more than what you spend on food+beer every week. Also, new clothes? Did you get gasoline on your shoes? Do you see where I'm going with this?

vernonFL

Don't forget gas in there, unless you're a crazy cyclist like me. :)

I'd actually be more concerned, in your case, about what FairTax does to living wage. If employers have to pay their shop kids more, we both end up paying more for it in the end. It's a nice little feedback loop. Minimum market wage has this really neat little balancing act it does with price of goods.

People who argue that the fair tax "punishes the poor who spend more" forget that it also includes a rebate for essential goods and services. A couple with three children get to spend $30,000 on such goods tax free.

Yeah, I guess someone who right now makes so little that they pay little or no federal taxes would get screwed.

Maybe there is some kind of way we could mitigate that though and still keep the simpler tax system.

soze: I'd actually be more concerned, in your case, about what FairTax does to living wage.

*blink* They're not directly related to each other.

vernonFL: keep the simpler tax system.

BWAHAHAHAHAHAHAHAHAHA
You...you aren't saying this current tax system is.... simpler... are you?

Today has been full of laughs. Thanks, guys.

*blink* They're not directly related to each other.

Instantaneously making everything cost 1/4th more than it does now clearly has an imapct on the "living wage" as that is a measure of the ratio of income to spending necessary to live.

stiletto_the_wise

Why not post the whole chart?



And btw, I think Warren Buffett has consistently rebutted a flat tax system much better than I could.

dj4aces

No I am saying that there has to be a simpler way than right now.

Abagadro: Instantaneously making everything cost 1/4th more than it does now clearly has an imapct on the "living wage" as that is a measure of the ratio of income to spending necessary to live.

But it occurs at the same time as the take-home paycheck goes up by 1/3. The inherent increase in take-home pay is greater than the rise in costs.

soze: If your household pulls in $30k/yr, you're going to be spending a lot more of your income percentage-wise on sales tax than the guy pulling in $300k/yr (this is, of course, assuming both households spend rationally).

1) Almost every sales-tax proposal ever put forward exempts food, shelter, and medical-care.
2) Almost every sales-tax proposal ever put forward provides a monthly rebate for the standard deduction. For people on the extreme low end, this rebate will actually be more than they spend in taxes. In other words, it's more progressive than our current system.

But it occurs at the same time as the take-home paycheck goes up by 1/3. The inherent increase in take-home pay is greater than the rise in costs.

You must have filled out your W-4 really badly if your federal income tax takes 1/3rd of your paycheck.

Almost every sales-tax proposal ever put forward provides a monthly rebate for the standard deduction. For people on the extreme low end, this rebate will actually be more than they spend in taxes. In other words, it's more progressive than our current system.

So the only people who have to deal with onerous filing requirements are now the poorest people. And they get the added bonus of having to pay a bunch of money out of pocket and then wait for a rebate. Sounds real "fair."

Abagadro: So the only people who have to deal with onerous filing requirements are now the poorest people.

??? Nobody has to do onerous filing requirements - they just have to register their address. Everybody gets the rebate, not just the poor. No onerous filing.

And they get the added bonus of having to pay a bunch of money out of pocket and then wait for a rebate. Sounds real "fair."

The trick to the transition is that the first rebate has to come right before the tax takes effect :)

Even though I'm all in favor of redoing the tax system, I'm not sure a national sales tax is the way to go. The costs fall too disproportionately on the middle and lower classes.

I think the best proposal would be a flat income tax, one that would apply to all income (wages, tips, interest, stock dividends, capital gains, etc.) and without any deductions or credits except one for yourself ($10-15K or so) and one for your kids ($3-5K or so). After that, everyone pays a single rate (say, 15%) on all the income they've earned.

Our tax system went off the rails when people started using it to implement social policy by taxing things they didn't like (inherited wealth) and subsidising things they did (home ownership). The sole purpose of taxation should be to allow governments to get the money it needs to function. Leave the social engineering out of it.

Seriously.


I cannot get home today.


No really. Every road home is flooded.

SW VA Farker here... this rain is something reminiscent of when Ivan and Charlie blew thru here.. Nasty shiat.

Dick Cheney told me that Ebay was spawning a millionaire a day. Then he got the Navy to pay his electric bill.

Richmond Hwy at Ft. Belvoir is a lake from Backlick Rd. to Telegraph.

Normally, it's a six-mile commute home for me, but I'll have to wrap 7100 around 95 today.

/waaah.
//oh, and they're calling for more flooding tonight.
///Hold 'em Poker by candlelight, anyone?

But it occurs at the same time as the take-home paycheck goes up by 1/3

Not if you are in a lower tax bracket

Instead of debating how we get the tax money to run the government why don’t we just make the government small enough that nobody really gives a shiat how we pay for it?

Karma from New Orleans?

I guess I better cut the bathtub down from the roof of the barn then.

/should not be obscure.

MasterThief: I think the best proposal would be a flat income tax

Nope, a proportional tax is best we just need to remove the red tape and simplify the code. The reason this proposal you bring up won't work is that 10% to 20k a year is a hell of a lot of money, but 10% to 200k a year is not near as much as a hardship.

vernonFL: Am I wrong or missing something?

Yes. The Fair Tax is an inclusive tax, not exclusive as you've calculated it.

The theory is this:

all consumer goods have embedded taxes in the price - about 22%. removal of the income tax would, due to market pressures, remove these taxes, decreasing the cost of a $100 item to approximately $78 (reduced by the 22%).

So... the real price of the item is $78. From here you can calculate the Fair Tax one of two ways. The way most people are used to is to do it like a regular sales tax - exclusively: itemPrice X taxRate = totalPrice.

The FT, however says that an item that costs $100 today will continue to cost about $100 (maybe a dollar more) - the difference being that the tax is already included in the $100. So, when you walk up to the cash register with an item that says $100 on the price tag, the FEDERAL tax portion of it is already included (you still have to pay state sales tax like now).

The Fair Tax gets a bad rap because it gets compared to the sales tax when it isn't really the same. It's a fair comparison, but the taxRate number has to be different if you calculate it this way. That's why you see people biatching about the FT being a 30% tax rather than a 23% tax.

The FT is calculated as an inclusive tax (tax built in to the price) because that's how the taxes it replaces - the most obvious of which is the income tax - is calculated. For example, consider your salary and the tax rate that applies. If (hypothetical numbers) you make $50,000 and you are in a 20% tax bracket, what is your tax? Well, that tax rate is an "exclusive tax rate", so you pay $10,000. With me? After taxes that means you cleared $40K.

Calculated like a sales tax, however, the income tax looks different. Then, your salary would equal $40,000 (the price without tax). If you pay $10,000 in taxes on that same $40K you have paid an "inclusive tax rate" of 25% for a total of $50,000.

/hope i've muddied the water for you
//www.fairtax.org

vernonFL - It's been a long time since I was a waiter, but theoretically, all of our tips had to be claimed as income, and were taxed. Our restaurant was audited at one point, and I had a huge ordeal convincing the IRS that as a new waiter, the amount of tips I made at that time were substantially less than someone with 10 years of experience. They eventually reduced my penalties, but I definately paid federal, state, and local taxes on my tips.

/I am all in favor of the Fair Tax!

vernonFL: Yeah, I guess someone who right now makes so little that they pay little or no federal taxes would get screwed.


Not really. The "prebate"(pops) mitigates this.

So you basically have checks going out to everyone? What sets the rate? Why would you have a universal rebate instead of just not having people pay that amount of tax? That makes absolutely no sense. It also undercuts your "progressively" argument if everyone gets the same rebate.

The "fair tax" is just a repackaging of the flat tax that no one supports any more and tries to do so in the form of a VAT. Ask some Europeans how much they like their VAT over there. Putting all the taxes on the consumption side is really stupid too. No one has ever turned down a raise because of the tax they would have to pay on it but increasing the cost of a good by that much will have a severely depressive effect on consumption, thereby being a disincentive to spending and having negative effects on the economy. You also lose the ability to incentivize other things that are public goods through the tax code.

Well, it's gonna be a biatch and two thirds getting home, so I'm leaving now. Have a safe trip home, everyone.

Would god put this down as a business expense?

Is there an online list or map with what's flooded road-wise? I don't wanna get stuck somewhere on the way home. Washington Post site doesn't seem to have anything.

Anyone stuck in the Baltimore area can stay with me,

*cough*TwoBitFratWhore *cough* :)

anyone else welcome too.

I'm an accountant and I support the Fair Tax. You folks get it passed and let me worry about finding a new job, should it come to that.

/knows damn well SOX and HIPAA will give him plenty of work

If I spend another "bonus" hour on the Orange line, I am going to go postal

/how hard is it to use a portable water pump?

If you think the "embedded" taxes in the costs of goods will magically disappear when this VAT gets put in place you are dreaming.