Possible New Fair Tax System...

[Rudee]

People would be so tight with their money that it would affect the economy. Business's would shut down and many people would be out of work.

 

[upsciLLion]

Originally posted by: Rudee
People would be so tight with their money that it would affect the economy. Business's would shut down and many people would be out of work.

Probably not as tight as you'd think. The difference between the revenue generated from income tax and sales tax would be as neutral as possible. However, there would be some inevitable change in spending habits. Hopefully that would lead to more investment. As long as investment goes up as much as spending goes down, GDP would change minimally. Sudden increases in investment push economies into accelerated growth periods (at least according to some economic models). The only type of investment that has shown to permanently increase GDP growth rates is investment in R&D. With so many promising technologies just over the horizon, an increase in investment in the companies developing these technologies might be one of the best directions in which this nation could go.

 

[Ryan]

I hear Neil Boortz talk about it all the time - makes sense. IIRC, isn't his new book out, dealing with the Fair Tax? Might pick it up or something.....

 

[SagaLore]

I'm not sure a 23% base tax on all purchases would help poor people much. The poorest people I know do not work, so their income isn't taxed anyway - but they are the most wasteful spenders I have ever known.

 

[Rudee]

Originally posted by: upsciLLion

Originally posted by: Rudee
People would be so tight with their money that it would affect the economy. Business's would shut down and many people would be out of work.

Probably not as tight as you'd think. The difference between the revenue generated from income tax and sales tax would be as neutral as possible. However, there would be some inevitable change in spending habits. Hopefully that would lead to more investment. As long as investment goes up as much as spending goes down, GDP would change minimally. Sudden increases in investment push economies into accelerated growth periods (at least according to some economic models). The only type of investment that has shown to permanently increase GDP growth rates is investment in R&D. With so many promising technologies just over the horizon, an increase in investment in the companies developing these technologies might be one of the best directions in which this nation could go.

What about the many people who will save money and go across the border into Canada to buy goods and services? That will hurt the economy.

 

[SagaLore]

My opinion is that there should be a Income Flat Tax of 10%, a National Sales Tax of 10%, and a National Property Tax of 1%. The new plan would have NO exemptions.

The IRS would be dissolved, and a new smaller committee would be dedicated to cutting budget items that weren't seen as a need.

 

[m2kewl]

i'd wish we just DO IT. i'm tired of talking and hearing about it.

 

[Kalbi]

Originally posted by: Juice Box

Originally posted by: PawNtheSandman
Sounds good, but it looks like I would be buying everything on eBay in order to get around the taxes.

knowing the government...they'd enforce that too...seeing as though it would be a FEDERAL tax rather than a state tax

i think the tax would be added on at the wholesale/distributor/possibly manufacturer level. too many people would cheat that system if they don't.

 

[Kalbi]

Originally posted by: dullard

Originally posted by: Juice Box
So they are trying to tax the people that want to live lavishly

Except those people buy the purchases without the 20+% tax out of the country and then pay 0% US taxes.

Originally posted by: JJWalker
So now all drug dealers and illegal immigrants would pay taxes? I like it!

Except that the black market will boom to avoid the 20+% tax, so these people will just continue their illegal ways and pay no taxes. Plus many variations of the fair tax (yes, there are others, not just the one linked above) give tax credits to the poor people. Thus the drug dealers with $0 income are considered poor and may get those tax credits (depending on the fair tax version).

i guess you've never heard of import duties...

Like i said, the tax would be added on at a higher level, not at the retail consumer end level. too much risk of black market like you said.

 

[Juice Box]

Originally posted by: SagaLore
I'm not sure a 23% base tax on all purchases would help poor people much. The poorest people I know do not work, so their income isn't taxed anyway - but they are the most wasteful spenders I have ever known.

well a lot of people refrain from working becuase they feel that their time is not worth getting 50% of their pay deducted....give people 100% of their pay...you will see un-employment go down by a TON

 

[upsciLLion]

Originally posted by: Rudee

Originally posted by: upsciLLion

Originally posted by: Rudee
People would be so tight with their money that it would affect the economy. Business's would shut down and many people would be out of work.

Probably not as tight as you'd think. The difference between the revenue generated from income tax and sales tax would be as neutral as possible. However, there would be some inevitable change in spending habits. Hopefully that would lead to more investment. As long as investment goes up as much as spending goes down, GDP would change minimally. Sudden increases in investment push economies into accelerated growth periods (at least according to some economic models). The only type of investment that has shown to permanently increase GDP growth rates is investment in R&D. With so many promising technologies just over the horizon, an increase in investment in the companies developing these technologies might be one of the best directions in which this nation could go.

What about the many people who will save money and go across the border into Canada to buy goods and services? That will hurt the economy.

People already do that. I know people that live in Washington along the Oregon border that regularly drive to Oregon to buy things without paying income tax. It's such a small percentage that it hardly affects the overall tax revenue of the state.

There is no perfect solution to the problem with the way the federal government taxes its citizens. There are, however, far better solutions than what is already in place.

 

[Kalbi]

Originally posted by: Juice Box

Originally posted by: SagaLore
I'm not sure a 23% base tax on all purchases would help poor people much. The poorest people I know do not work, so their income isn't taxed anyway - but they are the most wasteful spenders I have ever known.

well a lot of people refrain from working becuase they feel that their time is not worth getting 50% of their pay deducted....give people 100% of their pay...you will see un-employment go down by a TON

i don't think it will go down by a ton considering we're at 5% unemployment (3% being considered "full employment")

 

[upsciLLion]

Originally posted by: Juice Box

Originally posted by: SagaLore
I'm not sure a 23% base tax on all purchases would help poor people much. The poorest people I know do not work, so their income isn't taxed anyway - but they are the most wasteful spenders I have ever known.

well a lot of people refrain from working becuase they feel that their time is not worth getting 50% of their pay deducted....give people 100% of their pay...you will see un-employment go down by a TON

Not necessarily unemployment, but at the very least the supply of labor would go up.

 

[cjgallen]

Originally posted by: SagaLore
My opinion is that there should be a Income Flat Tax of 10%, a National Sales Tax of 10%, and a National Property Tax of 1%. The new plan would have NO exemptions.

The IRS would be dissolved, and a new smaller committee would be dedicated to cutting budget items that weren't seen as a need.

I think something like this would work better, flat PERCENT income tax. I don't see a pure consumption tax being able to fund the entire government.

We taxed millionaires upwards of 90% of their income to help fund WW2 (Dye: Politics in America).

 

[noob in a box]

this is actually reccomended by a lot of economists because our current tax system deterrs earning and saving money and encourages spending. this is why americans have so much debt. this system would encourage saving and fix a lot of our SS and national debt problems

 

[orton]

Wealth redistribution must be redone

How about just getting rid of this immoral concept all together. .

 

[birdpup]

It seems as if no one who has yet commented has taken an economics class. A flat tax is a "regressive tax", which means it taxes the poor heavier than it taxes the rich. The purchases required to sustain a moderate life would cost a far larger percentage of a poor person's income than it would of a rich person's income.

Please go to school and pay more attention in your classes. I am tired of having my life affected by uneducated people's opinions, which allow lawmakers to continue to acquire more methods of control over the people of America with their propaganda. This is a good example why the rest of the world laughs at the stupidity of Americans.

EDIT: there may be one or two people who touched on the idea of a regressive tax.
EDIT: went too far crapping over everybody. I formally apologize for that, since it is not my style. It upsets me greatly to see so many people taken over by our government's propaganda.

 

[Juice Box]

Originally posted by: upsciLLion

Originally posted by: Juice Box

Originally posted by: SagaLore
I'm not sure a 23% base tax on all purchases would help poor people much. The poorest people I know do not work, so their income isn't taxed anyway - but they are the most wasteful spenders I have ever known.

well a lot of people refrain from working becuase they feel that their time is not worth getting 50% of their pay deducted....give people 100% of their pay...you will see un-employment go down by a TON

Not necessarily unemployment, but at the very least the supply of labor would go up.

right!

 

[HomeBrewerDude]

Originally posted by: noob in a box
this is actually reccomended by a lot of economists because our current tax system deterrs earning and saving money and encourages spending. this is why americans have so much debt. this system would encourage saving and fix a lot of our SS and national debt problems

perhaps from a purely economic point of view... but seriously I doubt anyone could predict the changes in spending and consumer behavior that something like this would lead too.

 

[Ryan]

Originally posted by: birdpup
The stupidity is rampant in this thread since it is obvious no one who has yet commented has taken an economics class. A flat tax is a "regressive tax", which means it taxes the poor heavier than it taxes the rich. The purchases required to sustain a moderate life would cost a far larger percentage of a poor person's income than it would of a rich person's income.

Please go to school and pay more attention in your classes. I am tired of having my life affected by uneducated people's opinions, which allow lawmakers to continue to acquire more methods of control over the people of America with their propaganda. This is a good example why the rest of the world laughs at the stupidity of Americans.

Educate yourself and then discuss ideas intelligently. Until then children, it is better to be seen than heard.

Did you learn how to read in school?:

How does the FairTax protect low-income and lower middle-income families and individuals? Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level will pay a tax of only 11.5 percent ? a rate much lower than the income and payroll tax burden they bear today.

Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. The FairTax dramatically improves economic growth and wage rates. Retaining the present tax system makes economic progress needlessly slow, thus harming low-income people the most.

In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more hidden taxes on goods (averaging 22 percent) or services (averaging 25 percent), and used goods are tax-free.

 

[dirtboy]

It'll never happen.

 

[ElFenix]

Originally posted by: cjgallen
I think something like this would work better, flat PERCENT income tax. I don't see a pure consumption tax being able to fund the entire government.

We taxed millionaires upwards of 90% of their income to help fund WW2 (Dye: Politics in America).

upwards of 90% with deductions and exclusions so big you could sail a battleship through them. real tax rates as a % of income were probably no where near that.


now, if they would start at a proper definition of income (that only things that add to wealth, not merely change the form of it are income) and then work from there a lot of the problems with the tax system could be solved.

 

[tw1164]

Originally posted by: Juice Box

Originally posted by: dullard

Originally posted by: Juice Box
perhaps they will create heavy import duties to prevent this?

That is politically and economically quite dangerous. Anytime a tarriff is imposed, you run the risk of angering the international community. They often respond with similar taxes on US goods. Say goodbye to any US company that exports (and the jobs with them).

That's very true, Japan is pretty pissed at us right now (Steel tariffs).

 

[tw1164]

Originally posted by: birdpup
The stupidity is rampant in this thread since it is obvious no one who has yet commented has taken an economics class. A flat tax is a "regressive tax", which means it taxes the poor heavier than it taxes the rich. The purchases required to sustain a moderate life would cost a far larger percentage of a poor person's income than it would of a rich person's income.

Please go to school and pay more attention in your classes. I am tired of having my life affected by uneducated people's opinions, which allow lawmakers to continue to acquire more methods of control over the people of America with their propaganda. This is a good example why the rest of the world laughs at the stupidity of Americans.

Educate yourself and then discuss ideas intelligently. Until then children, it is better to be seen than heard.

EDIT: there may be one or two people who touched on the idea of a regressive tax.

STFU, have you even looked over the proposed plan?

 

[birdpup]

Originally posted by: Ryan

How does the FairTax protect low-income and lower middle-income families and individuals? Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level will pay a tax of only 11.5 percent ? a rate much lower than the income and payroll tax burden they bear today.

...

In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more hidden taxes on goods (averaging 22 percent) or services (averaging 25 percent), and used goods are tax-free.

It is still a regressive tax, just with an artifically set lower limit. That lower limit is present with the current tax system. Thus, my comments still apply. A flat tax will remain a regressive tax irregardless of its conditions and will therefore remain an inappropriate tax for the majority of people.