Taxes

[steve dave]

also what about my Roth investment mention earlier? everyone just get a gigantic one time tax refund from uncle sam?

[puniraptor]

massive universal sales tax like that would absolutely bone the low income people to death and totally let the rich off the hook.

[wetwillie]

massive universal sales tax like that would absolutely bone the low income people to death and totally let the rich off the hook.

Yep, pretty great. 

[steve dave]

massive universal sales tax like that would absolutely bone the low income people to death and totally let the rich off the hook.

it would eff most rich people equally as hard when whatever they sell is now being purchased somewhere else. it's just a stupid idea. people who clamor for it can usually only think far enough ahead to get to the part where you only pay for whatever you buy.

[yoman]

also, how do you deal with the tourism industry? nobody's coming to the ole' usa if they have to pay inflated amounts for stuff. let crotch grabbing bird flipping foreignors get everything at a 30% discount? somehow force US citizens to pony up 30% of whatever they spent overseas now that they do 100% of their leisure travel outside the US?

Under this they'd pay the tax. Also, all imports would at least be hit by the 23%. Exports are tax free.

[bubbles4ksu]

the black market would flourish in yoman's world.

[steve dave]

the black market would flourish in yoman's world.

well that's one plus. one negative is the economy would go in the shitter and everyone that could afford to do so would move to another country.

[Rage Against the McKee]

I guess I just don't see what is so bad about the current tax code.

[yoman]

the black market would flourish in yoman's world.

To be fair, I brought it here for critique. SD pointed out a major flaw.

[K-S-U-Wildcats!]

http://www.fairtax.org/site/PageServer

I'm just gonna leave this here and let you guys go to work.

EDIT: Before you guys look at this and say it is a flat tax, let me explain that isn't technically correct. It does provide the prebate changing the effective tax rates of all people. I know this isn't necessarily a perfect system one way or another but I figured I would let gE take a look at it and critique it.

A 23% federal sales tax is just way too much.

In exchange for zero income taxes? I'll take it.

What tax rate are you paying on federal income taxes?

For 2012, I paid an effective federal income tax rate of 15.6%. Add in FICA, and that takes me up to right around 23%. I pay a higher effective income tax rate than 95% of the country so, yeah, I'm in favor of tax reform. I work my ass off, make a nice income that's almost all wages, and for that, I get mumped over.

[steve dave]

I pay shitloads of taxes. would love to not do so.

[K-S-U-Wildcats!]

massive universal sales tax like that would absolutely bone the low income people to death and totally let the rich off the hook.

It might actually collect more from "the rich," depending upon how much they consume and how much they currently pay in income tax. Some of "the rich" don't have significant income taxed at normal rates. I believe Obama has bitched about this, about a million times or so.

And as for screwing the poor, the fairtax incorporates a rebate system that refunds sales tax paid up to a certain "poverty level" line.

[K-S-U-Wildcats!]

I pay shitloads of taxes. would love to not do so.

I'd be happy with just paying a percentage that's more in line with the rest of the country. This isn't about abolishing taxation.

[K-S-U-Wildcats!]

eff that, I'm just buying everything in countries with non-ridiculous sales tax. anything to declare? nope, already had all this awesome crap when I left.

So you're saying we'd also have to beef of border security? Sounds like a win-win.

[steve dave]

yes, confirmed that customs and tsa can both go eff themselves. quit being nazis.

[Rage Against the McKee]

http://www.fairtax.org/site/PageServer

I'm just gonna leave this here and let you guys go to work.

EDIT: Before you guys look at this and say it is a flat tax, let me explain that isn't technically correct. It does provide the prebate changing the effective tax rates of all people. I know this isn't necessarily a perfect system one way or another but I figured I would let gE take a look at it and critique it.

A 23% federal sales tax is just way too much.

In exchange for zero income taxes? I'll take it.

What tax rate are you paying on federal income taxes?

For 2012, I paid an effective federal income tax rate of 15.6%. Add in FICA, and that takes me up to right around 23%. I pay a higher effective income tax rate than 95% of the country so, yeah, I'm in favor of tax reform. I work my ass off, make a nice income that's almost all wages, and for that, I get mumped over.

When you add FICA to what I pay, it's right around 20%. This would just create a huge hit to the economy, though. I'd rather earn more and pay more than earn less and pay less. The way I look at it is that everything I make will eventually get spent, whether it is by me or the people who inherit my money. This fair tax would ensure that everything I make is eventually taxed at 23%. Capital gains? 23%. Ordinary income? 23%. Money in the Roth IRA tax shelter? 23%. I just don't see how that is better than the current system, where I get taxed every year in a way that ensures that I'm not going to struggle due to government taxation, and I get to pay little to no taxes when I retire.

[michigancat]

I guess I just don't see what is so bad about the current tax code.

I don't really care for the mortgage interest deduction. I'm sure there's other things I wouldn't like if I thought about it more. Overall, it's not bad, though.

[Rage Against the McKee]

I guess I just don't see what is so bad about the current tax code.

I don't really care for the mortgage interest deduction. I'm sure there's other things I wouldn't like if I thought about it more. Overall, it's not bad, though.

Yeah, to me you should either be able to deduct all interest paid or none at all. There are plenty of problems with it, but not nearly as many problems as there are with some enormous sales tax.

[michigancat]

I guess I just don't see what is so bad about the current tax code.

I don't really care for the mortgage interest deduction. I'm sure there's other things I wouldn't like if I thought about it more. Overall, it's not bad, though.

Yeah, to me you should either be able to deduct all interest paid or none at all. There are plenty of problems with it, but not nearly as many problems as there are with some enormous sales tax.

agreed

[06wildcat]

I guess I just don't see what is so bad about the current tax code.

I don't really care for the mortgage interest deduction. I'm sure there's other things I wouldn't like if I thought about it more. Overall, it's not bad, though.

For regular income/interest/dividends it's relatively straight forward, just tedious. It's when you get into income from partnerships/rents/oil and gas leases that things get complicated. Still it's not like the average CPA can't handle it for under a grand.

Though I'm interested to hear why KSU believes he's in the top 5 percent of tax payers with an effective rate of 15 percent, because that's actually pretty damn low for someone still working and being at 5 percent earner.

[steve dave]

I have the most stud accountant in the world fwiw. This crap is handled.

[EMAWmeister]

Remember when income taxes were like 60% and crap?

THAT DAMN OBAMA AND HIS TAXES

[john "teach me how to" dougie]

I guess I just don't see what is so bad about the current tax code.

I don't really care for the mortgage interest deduction. I'm sure there's other things I wouldn't like if I thought about it more. Overall, it's not bad, though.

What don't you like about the mortgage interest deduction? I suppose you could argue that it may inflate home prices some, but I don't think it has that big an effect.

[steve dave]

Rus rents

[michigancat]

Rus rents

Well, the mortgage interest deduction also encouraged the subprime/interest-only loans that were a major catalyst for the recession. And higher home ownership rates made the workforce less mobile, thereby making the recession worse. Also it is primarily a benefit for the very rich, especially where I live.