No, it doesn't do the same thing. The IRS regulates everybody who earns an income. The "new" agency would just regulate retailers.
Question(s) for Fair Taxers
- Thread starter What Would Jesus Do?
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No, it doesn't do the same thing. The IRS regulates everybody who earns an income. The "new" agency would just regulate retailers.
But it is still, in fact, progressive. Calling it anything else seems either ignorant or delusional.
It costs X to fix/repair/replace/whatever the roads that Person A and B drive on, and they drive equally (because the rest is ignored), so why is one paying a much higher PERCENTAGE of X for the identical use?
And you pretend that means the IRS no longer exists?
I think we should shutter the local Sheriff department and replace it with a police department, that makes a difference.
Because income doesn't always correlate with ability to pay. Wealth would be better, but there's not a good way to go after that, except with a consumption tax, because only rich guys can afford a $150,000 car.
I think Tradition has admitted more than once that the IRS abolishment is overblown by proponents. He likes it for other reasons.
Because at our current govt spending levels doing so would make certain that those of lower means would have even less to take care of their basic needs and would, in fact, be given more govt assistance.
Once you decide a service is a right - in the sense that mail is a right, or education through high school is a right, or clean water is a right - then we have to move away from the free market notion of letting people charge whatever the traffic will bear. That only works when it's OK that some do without. Because unless we are willing to let some people (even a lot of people) do without, demand will drive prices to ridiculous levels.
Figuring how to restrain prices is the tricky part.
So, how does that not fly directly in the face of the fairness you were hollering for earlier in the thread?
It is based on the logical extension of income/wealth: spending. The more that is spent is necessarily tied to the amount earned/held. It is further progressive by how I posted above:
It costs X to fix/repair/replace/whatever the roads that Person A and B drive on, and they drive equally (because the rest is ignored), so why is one paying a much higher PERCENTAGE of X for the identical use?
That's not what defines a progressive tax to my knowledge. Paying the same percentage without regard to income isn't progressive. Paying a graduated percentage that increases with ability to pay is what is meant by progressive taxation.
Someone doesn't understand history or politics. If you think that states will simply pack their bags and go home on the income tax, then I can't help you.
You also don't understand how state tax codes work. They literally piggyback off of federal taxable income. They don't have definitions of income or of particular deductions. They rely on the federal tax code (except for certain additions and subtractions). They also have to decide whether to conform to changes to the federal tax code. Theoretically, they could continue to conform to the federal tax code as it existed before the FairTax, but it is silly to presume that they would never change it. The same reasons that drive changes to the federal tax code each year would drive changes to state tax codes.
Finally, even if states used the same tax code, individuals would still have the exact same burden of determining their income tax liabilities annually. They'd just do the calculations for a state return rather than a federal return. The idea that tax compliance would be meaningfully simpler for individuals is only true to the extent that you assume states will simply get rid of their income taxes. It doesn't take a hard look at reality to see that states are unlikely to do so. (As another side impact, we'd no longer get a federal tax deduction for state income taxes paid, so there is a tax increase in and of itself.)
Ignoring all of this....the case being made is that so many things will just happen to fall in line with a Fair Tax that we should scrap the whole system and hope. Screw everyone in the interim. Screw retirees who already paid income taxes and now have to pay an additional xx% on a fixed income. Screw the real estate market....Let's just roll this out there on a prayer.
Interesting. I'm not sure how I managed to design systems for three states that handle their DOR's processing.
It's you that are lost here.
No one is currently forcing him to earn enough to purchase that car either. What a weird position to take.
Why not? All "fair tax" does then is establish a new class of "tax exempt" businesses. Tax exemptions enterprises are certainly a HUGE part of the tax code today. If it is truly a "fair tax"...then EVERYTHING, except payroll expenses need to be taxed, EVERYTHING. No exceptions. Don't parse....Fair is Fair...regardless of how unfair it may be.
The idea is, everything is only taxed once. Stuff that business buys are either inputs or an ancillary expense to a final good or service that will be taxed.
How is it not "graduated" with "increased ability to pay"?
Scenario 1: Your "true" progressive tax scenario: You pay 10% on $10,000, 20% on $50,000, 40% on $150,000. For this I'm not sure it matters if income/sales tax.
Scenario 2: You always pay 23%. You buy a $10,000 car you pay $2,300, you buy a $50,000 car you pay $10k+, you buy a $150,000 car you pay $34,000.
That, in the logical definition I see, "graduates" with the person's "increased ability to pay".
But, I'm fine acknowledging that maybe this is the wrong definition. The outcome is the same. High incomes/wealth pay more taxes than lower, which is necessary for our "system" to work, imo. BUT, if we are acknowledging that....then what makes this tax plan more "Fair"?
And what is fair about that? Capital (money) works because it RECYCLES itself time and time again. That is how economies grow, New growth, new capital means new tax. Do we just use "money" once and then remove it from circulation?
Ok, another simplistic question:
If it is determined that, in year #8, the tax rate needs to be 84%....you will be ok with that?
I'm failing to see where "used" stores would not have to collect sales tax. Can you link me to that provision? Like no sales tax on "used" cars?
Mathematically impossible without huge increases in government spending. But since tax revenue is basically tied to retail sales, the government won't be able to exceed that, so I'm back to mathematically impossible.
THe point IS that today, those who choose to "live large" do not pay taxes. We don't have to solve a problem on getting a lot of us to pay our "fair share"...the problem is to get EVERYONE to pay their fair share.
The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A prebate makes the effective rate progressive. - See more at: http://fairtax.org/faq/what-is-taxed#sthash.3lwJZq4M.dpuf
For those concerned about the perceived inequity of a system where everyone is paying the same percentage of tax on their purchases, you are forgetting that the Fair Tax has a prebate schedule that basically provides an annual consumption allowance based on family size. So, a family of four does not really have an income hit because of taxes until they spend more than approximately $32,000 per year. This is of course proposed and who knows how it would shake out if the plan actually made it into law. Bottom line is the more you make, the higher percentage of taxes you pay.
But not in a fair, progressive rate. The rich will pay less when all is said and done.
You can get all of this info at the website. I really don't understand how people can feel right about arguing a subject without doing at least a bit of preliminary research.
http://fairtax.org/index
Yes, that is the wrong definition. Only scenario 1 is a progressive tax by definition. I already answered your question. Proponents think the flat rate of this tax is one way this tax is more fair. Some argue it's also more fair for other reasons such as you are more in control of when you are getting taxed or only being taxed once they will claim. I personally disagree, but that is what they feel.
Not how it works. If the fair tax is 23% then 23% of your purchase price IS tax. So your $10,000 car has a $2,300 tax embedded in the price. That makes the effective tax rate closer to 30%. Your $10,000 car will cost you nearly $13,000.
What is your plan for a better tax system? One that is not used to club the citizens of the country over the head and to reward the industries and unions who have paid for access to Congress? I see many posts on here about why something different and very creative will not work, but rarely do I read about an intriguing alternative.
How is this not already the case? And doesn't this, specifically, encourage hoarding money and removing it from circulation?
No, it encourages trillions of off shore money to pour back into the country for investing. The economy will soar if the burden of the current system was removed.
I'm fairly happy with the current system with minor tweaks. I prefer carrots to sticks. The main problems with these overly simplified fair or flat tax plans are two fold. First as we already explored they aren't progressive and shift the tax burden to the lower income citizens. Second, they remove the government's ability to persuade by rewarding good behavior which will necessitate more punitive regulations.
No it doesn't. All citizens, poor and rich alike, control the amount of tax they'll pay by making consumption decisions. You can control THAT a lot easier than you can control your income.
What's the difference between a tax penalty and a fine? Nothing. You're still having money extracted from your wallet. I guess people are happier saying "the IRS took it" instead of "the judge took it."
How so? tIH thought he would pay $2,300 on a $10,000 purchase. That's incorrect. I corrected him. So tell me who it is who's trying to "mislead" here. Why didn't YOU correct him?
Every model shows these types of plans lowers what the top earners would pay into the system. To keep it revenue neutral, that necessarily means the lower classes will pay more. It's a fact you can't escape.
You're forgetting the power of tax credits to persuade through rewards beneficial behavior. If you no longer give tax credits for going green as an example, we will have to mandate factories do it and fine them to achieve the same results.
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