The FairTax, Join in!

[Andir]

cleveland124 said:

Andir said:

Entroper said:

Sqrl said:

Paragraph by paragraph:

No they do spend their money, but they don't spend it on frivolous things, they invest it in business, real estate, bonds, etc.... and it is very healthy for the economy. There aren't rich people who simply have a giant vault of $100 bills or anything. Now, Ideally there would be incentives to get all people to invest some of their extra cash but those details can get sticky very quickly.

You would very likely pay less taxes because the government would be spending less. The government would be spending less because they would not be propping up one of the most expensives beaurocracies in the world...the I.R.S.. I'm sure someone could rustle up the expenditure statistics for the IRS, and I bet they aren't pretty.

As ugly as the IRS expenditure sheets are, I don't think they make a significant dent in the overall budget.

I agree about rich people spending their money and helping the economy, though.  Also, I don't understand why rich people getting richer by saving their money is a bad thing for the economy.  Sure, they're accumulating wealth by saving most of their money, but they're still spending more money than the middle class, and as long as their wealth continues to grow, they'll continue to spend even more money.

 $11 - 11.6 billion to run the IRS each year according to: http://www.gao.gov/new.items/d07719t.pdf  (page 7)

 One of the proposed Federal budget numbers I've seen for 2008 is $933 billion.  IRS would be 1.2% of that ($11.6 billion.)  The sad part is that 54% of that is given to the Pentagon, but we won't even get into that here.

This is more negative than positive I feel.  While tax is too complicated, and I'm all for a smaller government.  The biggest expense in that $11 billion is salaries of IRS individuals.  To have that many individuals lose their job all at once will create a negative effect on our economy and worsen the credit crisis that currently affects our country.  Not just IRS individuals either though.  How many corporations accross the country have tax accounting staffs that are in 10s, 20s, or higher individuals?  These people will lose a job overnight.  Whether or not you feel they add any value to society this is alot of individuals to become jobless all at once. 

Notwithstanding with that many accounting/finance people looking for jobs, expect existing jobs in accounting/finance to have significant pay decreases as the market goes from excellent to poor all in one fell swoop. 

I also think that even a fair tax will eventually have most of the deductions/exemptions that current law has.  It starts out simple enough, just a tax on sales with an exemption for families (i.e. standard deduction).  But what happens when charities start complaining?  Well, it wouldn't hurt to add an exemption for 10% giving would it?  Even the old tax law had that.  What happens the housing market continues its downward spiral?  Well it wouldn't hurt to give individuals paying taxes a benefit for the interest they are paying on a house would it?  The old system had that too after all.  Taxes are too complex, and often on the surface don't make much sense.  But when you did into the details a lot of thought has gone into the laws.  Not always the best reasons for certain exemptions/deductions, but no system is going to be perfect. 

 That's discretionalry spending.  That's basically money that is used for things not entitled (Salaries).  Sorry for the confusion.  I'm getting the Total costs now.