This is hilarious - Stephen King is F'in mad about taxes

Until someone can come up with a better plan, the Fair tax is the only good one out there.

As far as the poverty line question, minimum wage is set nationally and people scrape by working at Mcdonalds there. How is that any different than setting the poverty line as a mean for the whole country? No one twist anyone's arm to move to NYC and struggle. There would be plenty of jobs in other places. I have had a few friends move to NYC and loved the city but hated living in an apartment the size of a dog kennel.

The flaw in the logic is assuming that ANY politician actually wants a taxation system that is fair.

Why would they want that?

It is beneficial to them when nobody understands the details and they can get large groups of people discontent and arguing. That brings people to the polls.

The best thing that ever happened to politicians was the development of a taxation system with so damned many layers of BS that EVERYBODY can have something to b!tch about.

They spent decades perfecting the whole thing. What in the world makes foolish people think they can vote politicians in who would change something that is so fundamentally beautiful to the careers and livelihoods of politicians?

You caint fix stoopid, sheople.

It isn't stupid. It is manipulation. Because it works. Do you really think the people who brought you nuclear energy could not deliver simple instructions for paying fair share?

pawns arguing is good. They aren't fighting the overlords. Next topic... Why does your govt think marriage is a good idea?

touche

I wasn't suggesting they were stupid.

I was suggesting we are.

SVreX wrote: I wasn't suggesting they were stupid. I was suggesting we are.

You were right. Not to mention- they are we.

sadly GPS got it right... would you like bread next or would you prefer to go to a circus?

Anti-stance wrote: Until someone can come up with a better plan, the Fair tax is the only good one out there.

It sounds kinda reasonable until you realize that a consumption based tax shifts the burden to the non-wealthy who actually have to spend all or most of the money they earn. Not to mention the effects of disincentivizing spending on new goods and services, or the "loopholes" inherent in that arrangement (Megarich Dude: "only new goods are taxed? I'll just buy a used Gulfstream, a used 300' yacht and 12 used vacation homes! Yaaaaay, no taxes for meeee!").

Anti-stance wrote: Now where are all those other "not fair" things about the Fair tax you are talking about?

You have still failed to address the very unballanced tax burdon, that goes toward the people who have to spend more of their money to survive on, and even minus the "prebate", there will be an income that the income minus the prebate will have the highest tax rate thanks to the fact that it takes quite a bit of money to survive.

And a follow up to that, it also burdens families more than it does a person who can live alone. Since it takes money to raise kids, now we have families who will have more of a burdon paying taxes. Rich couples with no kids will end up with the lowest rate.

So not only does the "Fair tax" put the burdon on the middle-ish class, it also puts an extra burdon on families.

BTW, I don't see how your answer to my question about not vacationing in the US applies to anything. My point is that I make money in the US, and have just enough means to spend it outside of the country. There are a LOT of people who make more than I do, so the more means you have, the more ways that you can spend money and not pay this "fair tax".

Ok, some more holes- the whole "border" issues repsonse is funny. It's not an answer, and basically ignores the fact that border people will try to consume where the cost is less. Cost neutral is very untrue- just claiming it will be is dis-ingenuous. If a US company makes stuff in the US, and then sends it to Canada for sale, how does that magically become cost neutral? And if you believe that Canada will do nothing or help the US with this new law, recall prohibition- drinking was not legal in Canada, or was at least very restricted, but making was very legal- which resulted in Canada Club in Windsor Ontario. And lots of smuggling across the border. If Canada can profit by this law, they will.

Next up- I'm a corporation of one. Being a company, I can buy stuff from other companies without tax. Who is going to monitor my usage to prove that it's for corporarte use? You use the example of a plane- I can buy a corporate jet, and fly all over the place without paying a cent of tax on it. Or I need a Ferrari to get to work, and show a good corporate image for my dentist job- again, no tax- the corporation bought it. The FAQ says that it will be risky, but the big claim is that there won't be an IRS, but to effectively monitor this, we will be forced to pay for such service to prevent this kind of very easy fraud. Again, the bigger the company, the more reasons why it can be corporate, and again, a benefit to those with means to avoid paying taxes.

Then there's the whole black market. Since we already have one for cigarrettes, and a long standing one for moonshine, to pretend that there won't be a very big one is ignoring historical avoidance of taxes.

So to make "fair tax" really work well, you'll need a bunch of people looking over shoulders, making sure there are no cheaters, and a bunch of regulations to make sure that we don't find a lot more holes in the system to avoid paying taxes. which will be worse than what we have now.

Yea, that sucks.

The only reason what we have now doesn't work is because it has been manipulated to find more and more holes to avoid paying taxes. And it also gives advantages to certain ways to make money- both of which are bad. Fix the loop holes and keep all sources of earnings equal, and it will go back to working fine. Not perfect, but much easier to apply than the "fair tax".

A lot of people use the word "loopholes" when they really mean "complicated tax rules that I don't understand". As I'm getting older and the way I make money gets less simple, I'm coming to understand that most of the complication in our tax system is really there to prevent people from avoiding taxes, not the other way around. People who say they want an easy-to-understand code without loopholes often actually mean they want a simplistic code that they can more easily avoid. They want the loopholes to be big enough that they can sail their yachts right through them :).

ronholm wrote: I think you misunderstand.. I don't think we should be forcing people to give. We should be teaching them to give. http://www.swarthmore.edu/SocSci/rbannis1/AIH19th/Carnegie.html Thus is the problem of Rich and Poor to be solved. The laws of accumulation will be left free ; the laws of distribution free. Individualism will continue, but the millionaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself.

It's not the statistical anomalies; the Carnegies, the Buffetts, the Gates', the Jobs', the other multi-billionaires that I worry about. Most of those people seem to understand at some point in their lives that hoarding their wealth is sort of pointless and ultimately use it to do a lot of good for humanity. I don't think we're worse off for their existence, not at all.

What worries me are the thousands and thousands of folks who were probably all in the same secret clubs at yale or princeton or where-ever that spend the rest of their lives sitting on the boards of each others companies handing out a couple million here and a couple million there to each other while begging for tax breaks for all the "job-creatin'" they're doing. These guys have figured out that it's a lot more cushy to live in that echelon of rich where you still have as much money as you can reasonably spend, but not so much that people actually take notice and expect you to do something meaningful with it. These are the guys that are sucking the middle class dry but aren't going to take responsibility to help solve any problems, and their ranks are growing year after year.

Truthfully, I'd rather have one guy make $100 million he didn't earn than 100 guys make a million they didn't earn. At least with the first guy the world might get a new hospital or school out of it, rather than a hundred more tacky houses and a hundred more Range Rovers.

Josh wrote: Truthfully, I'd rather have one guy make $100 million he didn't earn than 100 guys make a million they didn't earn. At least with the first guy the world might get a new hospital or school out of it, rather than a hundred more tacky houses and a hundred more Range Rovers.

Word.

alfadriver wrote: So to make "fair tax" really work well, you'll need a bunch of people looking over shoulders, making sure there are no cheaters, and a bunch of regulations to make sure that we don't find a lot more holes in the system to avoid paying taxes. which will be worse than what we have now. Yea, that sucks.

How do you reach this conclusion?

Only businesses that sell directly to consumers would have to be audited. The number of such businesses is a fraction of the total number of those who currently file taxes. The chances of getting audited now are (statistically) very low; those chances dramatically increase when there are fewer targets.

IIRC, it was estimated that about 20 million businesses would be subject to audits. That's a lower number than the 140 million (or so) who file tax returns now.

alfadriver wrote: The only reason what we have now doesn't work is because it has been manipulated to find more and more holes to avoid paying taxes. And it also gives advantages to certain ways to make money- both of which are bad. Fix the loop holes and keep all sources of earnings equal, and it will go back to working fine. Not perfect, but much easier to apply than the "fair tax".

Much of what you write here is all too true. The problem is that you expect those who created the problems to actually fix them. That seems a bit idyllic, at best.

If you want to remove the politics used in creating the tax code, you have to remove the politicians.

oldsaw wrote: How do you reach this conclusion? Only businesses that sell directly to consumers would have to be audited. The number of such businesses is a fraction of the total number of those who currently file taxes. The chances of getting audited now are (statistically) very low; those chances dramatically increase when there are fewer targets.

Easy- since it's a very obvious way to get around paying a consumption tax, there will have to be a pretty stringent way to monitor it.

If I'm a car salesman who sells a car to a business, and they have the paperwork to back up that they are a business, who, then, is going to monitor them that the vehicle they use will not be for personal use? They did have the paperwork proving they were a company... So if they drive the car home and back, and take the family shopping, is the responsibility on the car sales company? I doubt it.

You can't correlate current chances of getting audited to this future way- it's so easy to get around paying the consumption tax that there would have to be many rules and many monitors to make sure it's not being violated.

In reply to alfadriver:

Those are valid points.

I am a little lost on one thing. Are there not duties paid by the places receiving the items to be retailed in Canada? Hell, I sold some race tires to a guy in Nova Scotia that were used that he had to pay duty on. Oh and for new items, don't forget that Canadian sales tax.

As far as people that spend more of their money on survival products, they currently pay the imbedded taxes and income taxes without the prebate. So how would the Fairtax be more taxes than they currently pay?

I guess we should stick with the current tax system which is completely berkeleyed instead of implementing a tax system that has to be tweaked a little. It would be much easier to fix a border issue like that than give corporations even more reason to leave the states by taxing them even more. Like previously stated, its not perfect.

This debate is all for naught anyways because Congress would never pass this through the House or Senate, or even bring it up on the floor of the House.

Looking at the "prebate" question, it appears that there's some odd math that' going on there.

Everyone gets money back each month, depending on marriage status and number of kids.... So a family of 4, 2 kids, gets back almost $7000 annually. Now, the graph right above that claims that if you earn $15k, you will get back 23%. Wait- if I'm a family of 4, earning $15k, and you give me $7000 back, and I sitll have to spend taxes on what I spend, how is that getting back 23%?

Some math, though- Dartmouth did a study of savings rates, and it makes sense that what you don't save, you spend, yes?

bottom 1/5- saves 2.2% (use 97.8% of income)
2-5 saves 9.4% (use 90.6% of income)
3-5 saves 10.6% (use 89.4% income)
4-5 saves 16.7% (use 83.3% income)
5-5 saves 24.6%. (use 75.4% of income)

and IRS data suggests income rates of roughly:
1-5- upper 15k, average 10k
2-5- upper 25k, average about 20k
3-5, upper 50k, average 40k
4-5, upper 100k, aveage 80k
5-5, average about 250k.

So going through the math that you save income + prebate and spend the rest, the effective tax rate becomes (which is tax vs actual income):
1-5- 30.5%
2-5 28.1%
3-5 24.3%
4-5 20.8%
5-5 17.8%.

hmm.

So lets change it so that you have to spend the prebate, your savings is based on only your income, and then the effective tax rate is tax vs income + Prebate.

1-5- 10.5%
2-5- 15.4%
3-5- 17.5%
4-5- 17.6%
5-5- 16.8%

this is for a family of 4's $7000 annual prebate.

I suspect reality will be somewhere inbetween, but clearly, when doing basic calculations of income vs. spending and how that relates to tax, at least most of the burden will be on the middle class or on the lower classes.

What's misleading on the 'fairtax' charts is that it's SPENDING vs. tax. Not income vs. tax. that's incredibly misleading on who has to spend their income on just surviving and living. They should be putting that out in INCOME vs. effective tax and not spending vs tax. Rich don't spend NEARLY the percentage of income as lower or middle classes have to.

Anti-stance wrote: In reply to alfadriver: Those are valid points. I am a little lost on one thing. Are there not duties paid by the places receiving the items to be retailed in Canada? Hell, I sold some race tires to a guy in Nova Scotia that were used that he had to pay duty on. Oh and for new items, don't forget that Canadian sales tax.

Possible. But when prohibition rolled around, Canada changed the laws so that they could profit by the law in the US. I would guess that if they could make more money selling American products to Americans, they would lift the duty some. And American companies would be happy to export more product, for sure.

As far as people that spend more of their money on survival products, they currently pay the imbedded taxes and income taxes without the prebate. So how would the Fairtax be more taxes than they currently pay?

I just did the math above. Just a simple family of 4, basic savings rate, and applied that to just the income or the income + prebate. Eitherway, the buden is very lifted the less you spend on living.

I guess we should stick with the current tax system which is completely berkeleyed instead of implementing a tax system that has to be tweaked a little. It would be much easier to fix a border issue like that than give corporations even more reason to leave the states by taxing them even more. Like previously stated, its not perfect. This debate is all for naught anyways because Congress would never pass this through the House or Senate, or even bring it up on the floor of the House.

I never said that. For the fairtax to be fair and to be implemented reasonably well, it would take more than a few tweaks, as well as a whole host of people looking over your shoulder, as well as sending out monthly checks.

Second, the current system could stand a few tweaks to make it work effectively- such as making all sources of income be treated exactly the same, and eliminating deductions where you can afford them. Most of the pages were added way after the current code was implemented the last time.

The reason tax systems don't work is the ease of getting around them. If we close the holes in the current system, especially when the tax rates should be going up as your income goes up, as opposed to levels out, that would take us a LONG way. Pretty simple tweak, if you ask me.

alfadriver wrote: Looking at the "prebate" question, it appears that there's some odd math that' going on there. Everyone gets money back each month, depending on marriage status and number of kids.... So a family of 4, 2 kids, gets back almost $7000 annually. Now, the graph right above that claims that if you earn $15k, you will get back 23%. Wait- if I'm a family of 4, earning $15k, and you give me $7000 back, and I sitll have to spend taxes on what I spend, how is that getting back 23%?

Wait, what?

You are not getting 23% back on you $15K. If you are a couple with two kids(family of four), your expected basic living cost would be $28K per year. Your prebate would be 23% of that living cost($6,440) no matter what your income would be, $15K or $50K. That would cover your cost of the sales tax for the basics and you still do not have income tax.

alfadriver wrote: Second, the current system could stand a few tweaks to make it work effectively- such as making all sources of income be treated exactly the same, and eliminating deductions where you can afford them. Most of the pages were added way after the current code was implemented the last time. The reason tax systems don't work is the ease of getting around them. If we close the holes in the current system, especially when the tax rates should be going up as your income goes up, as opposed to levels out, that would take us a LONG way. Pretty simple tweak, if you ask me.

Making the current system far easier would be my second choice to the fair tax. I just think the idea of taxing someone on what they make is stupid. Why penalize someone for making money? It should be on what they buy. There are plenty of people in this country getting paid under the table that do not get taxed. Why should they have a free ride?

Wouldn't a sales tax only set up make the country extremely vulnerable to recessions? If we're going to budget what we spend, seems like we need a reliable stream of income. In a recession, people spend a lot less. So just when we hit tough times, we make it a double whammy by decimating the government's income.