The FairTax, Join in!

[Sqrl]

phil said:

Sqrl said:

Uhm you do realise that a lot of the people we are talking about have job titles of "investor" right? I don't know many people who are willing to take over another investors stake at half the profits considering they would still be responisble for the same amount of risk. Which really this is what this boils down to. Investors are what keep economies from stagnating, put up money for new business, and new products, or ideas.

I don't think you really understand what the 20% of Americans do with their wealth that makes them so wealthy or you would have gotten this point to start with. If a meaningful percentage of that 20% decides to head for greener pastures then this country is in serious trouble. The simple fact is that if 90% of this countries wealth picks up and leaves there aren't going to be jobs for many of us. But to be clear I don't think all of them are actually going to leave.

I'm simply making the point that we need them a lot more than they need us and they are actually willing to pay more than the average person. Thats part of the disconnect here. Anyone who doesn't recognize that the rich need to pay more for the system to work is deluding themselves, so lets be clear on that. I disagree that they should have to pay more but basic economics dictates that they have to..they absolutely must. What isn't so clear cut however is the amount they should be paying.

@topic at large:

Here is my problem with the anti-FairTax position:

It seems the major idea behind the opposition is picking at the details, and I actually think this is a good thing if the intentions are fair-minded. A tax system needs to be picked apart and rebuilt time and again before it is ready to be instated. But what I don't get is that just about everyone (let me know if you don't) thinks that the current system is awful.

So, to me it seems that we should be looking for a new system, we should be tearing apart the FairTax and pointing out its problems, and we should then fix those problems and put it back together in a way that will work.

The key a lot of people are missing(imo) is to realise that not every market sector is going to benefit from a new system. A tax system is going to favor some market sectors over others and there is no way around that. A change in tax systems is going to require some people to find new jobs..again, no way around it. But neither of those things by themselves should be a detterant to not implementing a better system. Both of those things are going to cause short-term issues as the market rebalances itself in its new environment...but after that its life as usual.

Really I don't want to argue about the nitty gritty details, its enough for me to leave it up to the experts so long as everyone can agree that what we have now is simply atrocious. Hopefully they can come up with something a lot simpler than what we have now.

To everyone in the thread: Are you happy with the current system or do you think we need a new system (even if that new system isn't the fair tax)?

I know precisely what it is this 20% does: resource/capital allocation. They don't actually make anything, they try to decide where it goes, that's all "investment" is. They're a beauracracy by another name.

Partially correct, they are capital investors and you can  call it "allocation" if you wish but people who allocate money aren't allocating their own money and putting it in jeaopardy of losing it so that name is absolutely wrong.  And there is no beauracracy here, investors are actually quite the opposite of bureaocratic and quite swift in their movements and decisions as they attempt to make their investment worthwhile and turn profits.

This is an important job and it needs to be done, but I don't buy your contention that they're the only ones willing and able to do it. There's no reason to believe that if you told someone you'll give em a salary of a million dollars a year if they did a reasonably good job of resource allocation(taking into account downtuns and all of that, of course) that noone could do it.

They are the only ones able..perhaps others are willing but don't have the capital but the rich are the only ones able...by definition almost actually.  As for this concept of a salary..are you proposing that people who invest money only earn a set wage from their investment?  If so expect nobody to invest ever again.  If you're proposing that we set up a bunch of "resource allocators" well then where the money coming from?  Again if it is their own money they are allocating nobody is going to be interested because that deal BS. 

In regards to capital flight due to rich people leaving, first off, I highly doubt it. Even with higher taxes, the combination of the deal they have here along with the most robust economy makes that unlikely to happen on a large scale. It's simply too difficult for another country to give the same incentives as the US can.

Doubt it all you want, in the meantime I will work on my passport application, I have a nice vacation planned this summer now..first to Jamaica then to Ecuador.  As for these other countries..your dead wrong...they have been setting up their system specifically to attract these people from the US so that they can stablise their economies and get an influx of cash into their system..see they understand their importance where as we seem to take them for granted. 

Second, you're assuming that the state has to stand idly by while an economic disaster happens. If such a devestating blow to the economy were coming, you'd probably have large attitude adjustments favoring arrests and asset confiscations.

Ok so what are you proposing, that the government arrest the rich and sieze assets of citizens who have done nothing but attempt to immigrate to another country? Besides the effect won't be felt right away anyways, a lot of these rich aren't looking at completely removing investment ties in the US...just moving to a country that has sane tax laws (although in some cases these countries have put together some real sweetheart deals that aren't fair to the lower and middleclass).  The problem will be when their tax dollars dissapear.

In regards to the FairTax vs the current tax system, I'm not of the opinion that the current system is at all good. I do believe it's too complicated and further believe it allows for too many loopholes. However, I believe the FairTax to be worse. It may not be as complicated, but economically I believe it to be a clusterfuck.

See I would describe our current system as the clusterfuck, and the fairtax as needing work.

Ok well I'll just repond above. 

If I am being honest I don't think you have a very good grasp on what it is that investors do.  The reasons they do it, and how much it accounts for the vitality of our economic system. The simple fact is that investment at its highest level boils down to risk and reward management...included in that is often setting up and executing deals and loans as well as running the businesses and in general get the business to the point that it is profitable...do you know the percentages on getting a business profitable from the ground up?  They aren't pretty...