And this is why it's pointless to debate, you guys refuse to educate yourself.
The FAIRTAX is NOT A FLAT TAX! You'd know this if you spent 10 minutes reading the FAQs on their site.
I'll repeat the FAIRTAX is NOT A FLAT TAX.
And this is why it's pointless to debate, you guys refuse to educate yourself.
The FAIRTAX is NOT A FLAT TAX! You'd know this if you spent 10 minutes reading the FAQs on their site.
I'll repeat the FAIRTAX is NOT A FLAT TAX.
It's gets murky because the rich often own companies, and they can register them offshore where taxes are much lower and the rules are difference. They can also "make" and store their money outside of the US, even though they spend it here.
SVreX said:In reply to GameboyRMH :
That's not true.
There is nothing about a flat tax that would necessitate charging tax for necessities. They could easily be exempted, or discounted for people under certain income brackets.
That is a common (ill-founded) argument.
The benefits far outweigh the negatives. Unless you are counting the political benefits of an overly complicated tax structure. If that's the goal, well then yeah, a flat tax wouldn't work too well.
And lower income brackets have specific exemptions under the FAIRTAX.
SVreX said:In reply to GameboyRMH :
That's not true.
There is nothing about a flat tax that would necessitate charging tax for necessities. They could easily be exempted, or discounted for people under certain income brackets.
That is a common (ill-founded) argument.
The benefits far outweigh the negatives. Unless you are counting the political benefits of an overly complicated tax structure. If that's the goal, well then yeah, a flat tax wouldn't work too well.
No a sales tax on everyone buying anything is what we need. No exception.
The progressive portion can be the income tax. Under say $50,000 per person / year no income tax.
$50,000- $250,000 5%.
$250,000- &1,000,000 10%.
$1,000,000- ? 15%.
The FAIRTAX eliminates ALL PAYROLL TAXES.
Flat tax does not mean the same tax on all products. It means everyone pays the same tax on the same products.
A flat tax could easily also be progressive.
For example, if groceries and clothing were taxed at 0%, most consumer products were taxed at 15%, luxury boats, cars and planes were taxed at 35%, and vices were taxed at 75%, we would instantly have a progressive flat tax system. The rich and the poor would all pay the same tax rate, but we could direct the progressiveness by the products selected. Most of us would pay 15% on the majority of our purchases except groceries.
It would NOT be a greater impact on the poor.
Progressive tax rates and flat tax are NOT mutually exclusive.
z31maniac said:And this is why it's pointless to debate, you guys refuse to educate yourself.
The FAIRTAX is NOT A FLAT TAX! You'd know this if you spent 10 minutes reading the FAQs on their site.
I'll repeat the FAIRTAX is NOT A FLAT TAX.
I was aware of this, even though I did mention flat taxes in the same post.
z31maniac said:And lower income brackets have specific exemptions under the FAIRTAX.
SVreX said:In reply to GameboyRMH :
That's not true.
There is nothing about a flat tax that would necessitate charging tax for necessities. They could easily be exempted, or discounted for people under certain income brackets.
That is a common (ill-founded) argument.
The benefits far outweigh the negatives. Unless you are counting the political benefits of an overly complicated tax structure. If that's the goal, well then yeah, a flat tax wouldn't work too well.
Exemptions for lower income brackets only exempt those brackets from the problem of a sales tax being regressive, it doesn't solve the root problem. It still affects the rest of society, until you have different brackets all the way through, at which point you've almost turned it into a progressive income tax.
SVreX said:Flat tax does not mean the same tax on all products. It means everyone pays the same tax on the same products.
A flat tax could easily also be progressive.
For example, if groceries and clothing were taxed at 0%, most consumer products were taxed at 15%, luxury boats, cars and planes were taxed at 35%, and vices were taxed at 75%, we would instantly have a progressive flat tax system. The rich and the poor would all pay the same tax rate, but we could direct the progressiveness by the products selected. Most of us would pay 15% on the majority of our purchases except groceries.
It would NOT be a greater impact on the poor.
Progressive tax rates and flat tax are NOT mutually exclusive.
OK, fair point. Although this tax system is getting rather complicated, and wasn't the point of the flat tax to be simple?
frenchyd said:Tax that’s progressive assumes it’s tax equally. 77,000 pages of the tax code that apply only to the rich makes nonsense out of the progressive argument.
Only 30-40 pages of the tax code apply to 90% of the population.
So let’s ensure that we at least get something.
But and this is the big but.... no exception!!!!! Tax companies buying material. Tax investors buying stock, tax churches and schools and government.
I agree that taxes need to be simplified but be careful with the removal of all those exceptions, many are in for good reasons including those you mentioned specifically. Churches get a break for presumed charitable work, but this leads to rich megacorp-religions like scientology and prosperity gospel, so I think that giving breaks to charitable origanizations in particular rather than just religions would be a better idea. The tax breaks on investors buying stock, and on capital gains, are again to encourage investment, although obviously the current capital gains setup is questionable. Schools and government - schools are generally public and government is the body collecting the taxes, this is to prevent a pointless circular flow of tax dollars.
frenchyd said:No a sales tax on everyone buying anything is what we need. No exception.
The progressive portion can be the income tax. Under say $50,000 per person / year no income tax.
$50,000- $250,000 5%.
$250,000- &1,000,000 10%.
$1,000,000- ? 15%.
Careful with those low upper brackets, historically that's a recipe for problems (again, look at my historical upper tax rate graph on the last page, particularly the '20s). I'm even watching a country, up close and personal, bankrupt itself Greece-style after instituting a 25% upper bracket that starts below US minimum wage, and apparently also collecting taxes on the honor system, which caused most wealthy people to opt not to file any taxes for a few decades.
SVreX said:Flat tax does not mean the same tax on all products. It means everyone pays the same tax on the same products.
A flat tax could easily also be progressive.
For example, if groceries and clothing were taxed at 0%, most consumer products were taxed at 15%, luxury boats, cars and planes were taxed at 35%, and vices were taxed at 75%, we would instantly have a progressive flat tax system. The rich and the poor would all pay the same tax rate, but we could direct the progressiveness by the products selected. Most of us would pay 15% on the majority of our purchases except groceries.
It would NOT be a greater impact on the poor.
Progressive tax rates and flat tax are NOT mutually exclusive.
I'm not even sure what you are talking about or to whom you are responding.
Every Flat Tax I've ever seen proposed by a politician is a Flat Tax on income. IE, everyone pays 12% of their income regardless of how much you make.
Interesting read, I think about this subject occasionally since I have seen it from all angles. Some of you even knew me back when I had almost zero income and now 20 years later I am firmly in the "rich" camp however you define it.
I pay taxes. Honestly, I have a two experts work on it and they have all the details but it is a very large amount of money. My effective tax rate is below the highest brackets because I exploit many (not all) of the options available under the current (overly compliated) code. I have always sought to maximize my advantages (within reasonable effort) no matter my income level.
In my basic, double-entry mental ledger annual taxes are approximately the same percentage of what I "made" that year regardless of income level. I have no stomach for complex legal gymnastics but also no love of feeding a bloated and ineffective bureaucracy so "good" year or "bad" the taxes are kinda a wash.
Sometimes I feel like I should keep more of my money but that feels too greedy since I have enough and it can greatly benefit everyone by funding useful government functions... I never come up with a great answer, myself.
In the past I have supported and lobbied for a flat (or less disparate) tax rate for all on the basis of equality and not equity but that argument relies on an educated, informed and altruistic populace... not holding my breath. It IS annoying when I am prejudged to be an unpatriotic tax dodging thief OR a completely ignorant idiot incapable of managing my own affairs.
Interesting red so far, and kudos for keeping it mostly civil.
I'm a financial idiot. My wife and I broke 100k combined income for the first time ever and have very few deductions (not counting pre-tax retirement contributions and such). Only mortgage and student loan interest. We take the standard deduction every year. We're taxed between 11 and 12%, just as a data point.
tb said:In the past I have supported and lobbied for a flat (or less disparate) tax rate for all on the basis of equality and not equity but that argument relies on an educated, informed and altruistic populace...
Regarding flat income tax rates, I recommend you give this article I linked to earlier a read:
Most important line from the article:
Thus, if we maintain the current tax revenue the government receives from income taxes, a flat tax means a tax increase for everyone making less than $200,000 a year and a tax decrease for everyone making more than $200,000 a year. Now that is a scam!
In reply to GameboyRMH :
Thanks, I will read the article soon.
That quote makes sense up until that last sentence... It doesn't seem like a scam. On its face, moving everyone toward the center seems likes a reasonable idea to me.
Maybe I need to hire a tax guy. I am not rich, but I pay enough in Federal taxes each year that is more than some people make in a year. It adds up to a decent chunk of money. If I tally up Federal and State income tax, social security and medicare (plus the portion paid on my behalf by my employer), sales tax & real estate taxes I find no way to not conclude that I pay more than enough in taxes. If I could pay just 2% of my income in Federal taxes as Frenchy suggested was legally possible, then the savings would more than pay for a tax expert and I would have more money in my pocket.
To answer the original question, it depends a bit on how you define 'rich' I guess. There is a huge difference between someone who earns in the low six figures compared to a Bill Gates or Jeff Bezos, but a lot of people would classify some who makes say $150k/yr as rich. It is all relative.
GameboyRMH said:racerdave600 said:It's a touch subject. Sure there are those that abuse it, but for the most part those with money already pay large percentages.
Check the graphs I posted above. The people making tens or hundreds of times more than us mere mortals are paying less than 3x the percentages we are on income alone, which makes up from 3/4 to less than half of their total income vs. capital gains. That's not a large percentage of such astronomical amounts of money given to just one human to spend. Many of these annual incomes are more than a normal person could earn in a lifetime of hard and clever work.
No disrespect or sarcasm meant, but I've got some first hand experience with this, do you? Most of the rich people I know pay far, far more than 3%. Most end up with close to 60% plus once you include state and local taxes. I would imagine there are those that can get by with little, but you would have to show almost no income in order to do so, or do it illegally. Ironically I had this conversation with my dad yesterday as he living it tax hell right now, and as his comment was that he had no idea how people could pay those quoted tax brackets and get away with it if you have any stated earnings at all, even investment earning. I can tell you for a fact that his tax bracket is so far above what you mentioned that you would gasp for air at the amount of taxes he has to pay. And it's not like someone is there taking it out of a check you get every week, he has to write a lump sum check quarterly. It really hits home when you have the money and have to give it away rather than it be something you never see. As to his company, he and his partner put in huge amounts of money to pay the employees when times got tough in 2009 though 2012. They could have closed the doors and been better off, but chose instead to tough it out for those that worked there. Millions they will never see again. Yet we demonize these people and say they never pay enough. So again, what's enough? Remember it is their money, not the governments. There are far more of these types of people in this bracket than are those that claim on pay 3%, yet you want to penalize all of them for those that game the system. I'm a little touchy about this subject because I've seen first hand the struggles, hardships, long hours, dedication and financial outlays taken to get to the point, and I know at least in this town, there many more just like him.
But why is it whenever this topic comes up we do not question why the government spends the amount of money it does and always want to start point fingers at the money source or lack of money source? Where is the accountability? And I do not care if you play on the blue team or red team, they both take care of themselves and friends first, using taxpayer funds like a personal piggy bank. Why do agencies have such huge operating expenses with only a fraction of their money spent going to the reason the agencies exist? If the government were a business it would have ceased long ago.
I know when my mother used to work in the city attorney's office, the mayor would put people on staff, give them big offices, 6 figure salaries, and they would show up for about an hour a week, not speak to anyone, and go home. And that's just one office on a local level. How many years of taxes from you and me does it take to pay for ONE of those people. This was local, on the federal level this is child's play.
What we need is accountability in government, with those on the inside having to document everything they spend and justify it as well. You know, like most of us that work in the real world. And I do believe we need to overhaul the tax code. The problem with that is, congress uses the tax code like a punishment / reward system for those it likes and dislikes. To get them to overhaul it would take a major miracle.
I've lived in the US for 18 years now and I still find it amusing to watch people go on about taxes. I still giggle when I do mine because they're so low. Carry on folks!
SVreX said:Flat tax does not mean the same tax on all products. It means everyone pays the same tax on the same products.
A flat tax could easily also be progressive.
For example, if groceries and clothing were taxed at 0%, most consumer products were taxed at 15%, luxury boats, cars and planes were taxed at 35%, and vices were taxed at 75%, we would instantly have a progressive flat tax system. The rich and the poor would all pay the same tax rate, but we could direct the progressiveness by the products selected. Most of us would pay 15% on the majority of our purchases except groceries.
It would NOT be a greater impact on the poor.
Progressive tax rates and flat tax are NOT mutually exclusive.
You want to know how you move manufacturing offshore? This way.
I suspect a mass exodus of luxury cars, boats and planes to non US jurisdictions. It would be a win win for the anyone making even just a little money. Less taxes, mo money for the rich...the government loses.
SVreX said:
For example, if groceries and clothing were taxed at 0%, most consumer products were taxed at 15%, luxury boats, cars and planes were taxed at 35%, and vices were taxed at 75%, we would instantly have a progressive flat tax system.
...which leads directly to boat, small aircraft, and luxury car manufacturers going out of business or reducing employee counts when sales inevitably dip.
It's happened before.
The thing that appeals to me about sales tax is it's ability to be tuned locally.
Small town grocery store can't compete with the Wal-Mart 30 miles away? If the town wants they can adjust their local sales tax rate to help it compete.
Your town wants to promote using fewer plastic bags? Add a tax on any purchase that needs one.
It's all about the perspective. When I was stationed in CT I lived in a little town off base that had free trash pickup. Thing was, they would only pick up trash in a certain type of bag, and those bags were only available at a couple of places and pretty expensive, like over $1 each. Recycling in the bin was free. People who generated very little landfill waste bought and used very few bags, but wasteful people spent a lot more.
Compare that to the $40/month dumpster at my house now. It's the same amount no matter how much I stuff in it between pickups. Do you imagine I generate more or less waste?
Anyone who lives on a border town where there are different rules near enough together to be able to choose can tell you how influential it can be. With a sales tax model we open a lot of those doors, and I think I would like to see how it plays out.
In reply to oldopelguy :
Agree in concept but disagree with your grocery store example. First, the town wants its money, so taxing a store less is not going to help them. It also introduces the opportunity for the government to be choosing which industries it wants to subsidize and therefore lobbying just got that much more powerful. It would be better to level the playing field by not subsidizing the walmarts in the first place which gives them the economic advantage over the small grocerers.
I don't know much about taxes, but I know I'm still angry.
tb said:In reply to GameboyRMH :
Thanks, I will read the article soon.
That quote makes sense up until that last sentence... It doesn't seem like a scam. On its face, moving everyone toward the center seems likes a reasonable idea to me.
Have to disagree on that. Consider that there are hard costs involved with basic survial and participation in the economy - food, shelter, clothing for basic survival, communication and transportation for participation in the economy. As your income increases, those costs become a smaller portion of your income, to the point that a person making $1M/yr could live on 3~6% of their annual income in most places vs. someone making minimum wage who will spend almost all or possibly more than all of their money on those things. So people who make more have far more discretionary income and that's why I think they should be taxed more.
But there's a more fundamental problem at play here, more of a moral question, and that is how much should people make? I for one think that a person's income should reflect the value of the work they do. Now I'm not sure what this economy is rewarding but it's definitely not work - it would be more believable if it were fame or economic class. More seriously, it probably rewards the ability to control capital, which makes sense because it's in the name, but I'm getting off topic.
Obviously Jeff Bezos isn't a zillion times more productive than a young construction worker busting his ass all day, he's one dude who spends a good chunk of his time nitpicking the fine details of his website from what I hear. Obviously Karl Lagerfeld's cat isn't tens of times more productive than most of us on here. So I think the spread of incomes should reflect the spread of productive ability. Let's say it's 10x. So on a very basic level, there should be a livable minimum wage and it should be practically impossible for a person to make more than 10x that. To me that sounds good morally. Yes it would take rules to make an economy like this, but personally I like rules more than what the absence of rules brings, which we can see in most countries around the world. Mexico has especially few rules. They have a small, hyper-rich ownership class and the people manning the support lines of their companies live in slums made from scrap and take dumps in garbage cans. Morally I don't like that.
Duke said:SVreX said:
For example, if groceries and clothing were taxed at 0%, most consumer products were taxed at 15%, luxury boats, cars and planes were taxed at 35%, and vices were taxed at 75%, we would instantly have a progressive flat tax system....which leads directly to boat, small aircraft, and luxury car manufacturers going out of business or reducing employee counts when sales inevitably dip.
It's happened before.
To extend on my moral argument in my previous post, there are some things that I think it's wrong for an individual person to be able to afford. They take so much of the work of other people, that the ability for one person to afford them indicates a level of inequality that is morally unjustifiable. Megayachts of the sailing or flying varieties, obviously, along with large boats. Medium to large aircraft or those with multiple jet engines. High-end supercars. Basically anything that costs more than a minimum-wage worker could make in their lifetime, as a rule of thumb.
I think the damage to these industries could be far more than compensated for by the improvements to other parts of the economy if inequality were reduced.
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