Taxes

[sys]

it's revenue neutral, dumbasses, it isn't going to tank the economy or raise prices.  you'd handle foreigner purchases just like vat countries do, with a rebate offer than only a small % of tourists take advantage of.  poor don't get soaked any more than now, look at the rebate tables - they correspond very well to current tax obligations.

jfc, you'd think the level of debate would be more sophisticated than this crap.

[steve dave]

lol no. Would never work unless every country implemented. Your largest earners aren't going to purchase a single domestic product or service. Even medium earners who are smart won't. Comparing a tiny VAT to a 25% country wide sales tax is extremely Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!).

[steve dave]

I'm telecommuting from London personally. I can now afford it and can't afford not to at the same time.

[steve dave]

And this should be much cheaper and easier for the gov. to enforce.

[06wildcat]

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.

Yeah, now that I'm married our mortgage interest/property taxes aren't enough alone to itemize deductions. I could maybe see a need for it in the early 80s when a mortgage was 18 percent or something, but houses are also going to cost a shitload less if it gets back to that too.

[Dugout DickStone]

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

 

[catzacker]

VAT system is just the stupidest rough ridin' system ever created.  It's not something to move towards.  It is a burden on every individual in the supply chain.  You just add more government because now some organization has to track all that crap.

You should just get taxed without any of the bullshit.  Lower rates, remove most if not all deductions, eff poor people.  And then don't mess with it for like 30 years.

[06wildcat]

Also tons of crap get left out of sales/VAT taxes. If every good/service in Kansas was subject to sales tax, the rate would be about 2 percent. Instead you get all these exclusions and it's currently 6.3 and probably staying they to pay for income taxes, which as zacker points out is a test case for rough ridin' the poor

[K-S-U-Wildcats!]

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.

Effective tax rate is lower than marginal rate. You simply divide total FIT paid by gross income. As you can see below, a 15.6% effective rate is pretty damned high. It's higher than approximately 95% of all Americans.



Because I'm a relateivly high wage earner, I'm in prime fleecing position. Obama would say I'm "rich," but I'm not rich enough to derive most of my income from capital gains or otherwise shelter my income from ordinary income tax rates.

[john "teach me how to" dougie]

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.

I don't think any of that is true. I'm pretty sure stated income loans and reckless bank investments were the main catalyst for the recession.

[sys]

lol no. Would never work unless every country implemented. Your largest earners aren't going to purchase a single domestic product or service. Even medium earners who are smart won't. Comparing a tiny VAT to a 25% country wide sales tax is extremely Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!).

you should be smarter than this.  you claim to be.  i'm very disappointed.

[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.

I don't think any of that is true. I'm pretty sure stated income loans and reckless bank investments were the main catalyst for the recession.

Yeah, I guess those two things are completely unrelated to home ownership rates.

[GCJayhawker]

Interesting caveat to the sales tax discussion. I was privy to some information from the Department of Revenue that ran a legislative request to see what the sales tax would need to be to maintain current revenue levels if all sales tax exemptions were done away with. The number was 4.7%. Take that FWIW

[steve dave]

Interesting caveat to the sales tax discussion. I was privy to some information from the Department of Revenue that ran a legislative request to see what the sales tax would need to be to maintain current revenue levels if all sales tax exemptions were done away with. The number was 4.7%. Take that FWIW

that is a much better idea than the Fair Tax 23% (which is an awful idea)

[bubbles4ksu]

lol no. Would never work unless every country implemented. Your largest earners aren't going to purchase a single domestic product or service. Even medium earners who are smart won't. Comparing a tiny VAT to a 25% country wide sales tax is extremely Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!).

It wouldn't just be an issue of inter-country competition. A 23% sales tax would instantly make everything 15% more expensive. That 15% would create a black market for just about every good and service imaginable. You wouldn't have to be rich to take advantage of that market. Anyone who says such a system would be revenue neutral is a huge and complete dumbass.

[Rage Against the McKee]

it's revenue neutral, dumbasses, it isn't going to tank the economy or raise prices.  you'd handle foreigner purchases just like vat countries do, with a rebate offer than only a small % of tourists take advantage of.  poor don't get soaked any more than now, look at the rebate tables - they correspond very well to current tax obligations.

jfc, you'd think the level of debate would be more sophisticated than this crap.

I think staying revenue-neutral by taxing the 40-some percent of the country who is currently paying 0% income taxes and then taxing them at 23% would drastically reduce the purchasing power of a large number of Americans and tank the economy.

[bubbles4ksu]

it's revenue neutral, dumbasses, it isn't going to tank the economy or raise prices.  you'd handle foreigner purchases just like vat countries do, with a rebate offer than only a small % of tourists take advantage of.  poor don't get soaked any more than now, look at the rebate tables - they correspond very well to current tax obligations.

jfc, you'd think the level of debate would be more sophisticated than this crap.

I think staying revenue-neutral by taxing the 40-some percent of the country who is currently paying 0% income taxes and then taxing them at 23% would drastically reduce the purchasing power of a large number of Americans and tank the economy.

economy would be great. would not be revenue neutral.

[K-S-U-Wildcats!]

lol no. Would never work unless every country implemented. Your largest earners aren't going to purchase a single domestic product or service. Even medium earners who are smart won't. Comparing a tiny VAT to a 25% country wide sales tax is extremely Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!).

It wouldn't just be an issue of inter-country competition. A 23% sales tax would instantly make everything 15% more expensive. That 15% would create a black market for just about every good and service imaginable. You wouldn't have to be rich to take advantage of that market. Anyone who says such a system would be revenue neutral is a huge and complete dumbass.

The goods and services we buy now already have tons of taxes included in the price. Corporate taxes, sales taxes at various stages of production, etc. are all rolled into the final price we pay. The fairtax eliminates all such taxes and imposes one sales tax that applies only to final retail sales (so, it's not like a VAT, that applies to all levels of production). So, in theory, the fairtax would reduce the price of goods and services, at least somewhat offsetting the new sales tax.

The black market issue is a valid concern, and that's one reason why the IRS couldn't be disbanded completely. Somebody has to make sure people aren't setting up sham businesses to purchase goods wholesale (not subject to tax) and then sell them on black market. And I suppose it's possible people will try carting crap over from Mexico, which is another reason for tighter border enforcement. I believe Canada already has a VAT, so I doubt any money would be saved by buying stuff there.

Yes, the people who put money in Roths will probably lose most of the benefit of that savings vehicle, but there's going to be winners and losers in any type of reform.

The poor do not get screwed, because of the rebate system. This rebate system would actually ensure that they pay zero federal taxes up to the poverty line. (Well, I guess if you're poor and the federal government is actually paying you in the form of tax credits, etc., then you're getting screwed a little, but you deserve it).

One concern I have is how the fairtax would actually be implemented. The transition seems like it would be a nightmare. First, you've got to repeal the 16th Amendment. Then, you're going to have massive runs on goods and services right before the fairtax goes into effect. Has that been addressed?

[steve dave]

The black market issue is a valid concern, and that's one reason why the IRS couldn't be disbanded completely.

that's actually why it (or whatever new gov. enforcement agency is put in charge) would have to be expanded significantly

[EllRobersonisInnocent]

In theory, the fair tax system is the best system but yes, it would be too difficult to implement

[Rage Against the McKee]

I would like to know how the 23% tax required to remain revenue-neutral is calculated. Is it just assumed that spending would stay at current levels with a 23% sales tax tacked on?

[Institutional Control]

In theory, the fair tax system is the best system but yes, it would be too difficult to implement

To easy to cheat.

[steve dave]

I would like to know how the 23% tax required to remain revenue-neutral is calculated. Is it just assumed that spending would stay at current levels with a 23% sales tax tacked on?

see the link earlier. everyone gets a gov. check at the beginning of each month based on their family situation to get to the poverty line or whatever. essentially making up for the tax for the first whatever figure you are going to spend. it goes up with every child you have. One person gets $2,643 annually. A couple with 7 kids gets $11,758 annually (lol at sys being pro this).

[bubbles4ksu]

I would like to know how the 23% tax required to remain revenue-neutral is calculated. Is it just assumed that spending would stay at current levels with a 23% sales tax tacked on?

see the link earlier. everyone gets a gov. check at the beginning of each month based on their family situation to get to the poverty line or whatever. essentially making up for the tax for the first whatever figure you are going to spend. it goes up with every child you have (lol at sys being pro this).

he's sophisticated and a pro in this area because he knows something about the tax systems of italy and spain and mexico. 

[Rage Against the McKee]

I would like to know how the 23% tax required to remain revenue-neutral is calculated. Is it just assumed that spending would stay at current levels with a 23% sales tax tacked on?

see the link earlier. everyone gets a gov. check at the beginning of each month based on their family situation to get to the poverty line or whatever. essentially making up for the tax for the first whatever figure you are going to spend. it goes up with every child you have (lol at sys being pro this).

Yeah, I saw that. I was just curious if they assumed spending levels would remain the same. I mean, I don't think I would buy as much stuff if there were a 23% tax added on.