The FairTax, Join in!

[Final-Fan]

Eomund said:

Final-Fan said:
I'll do a thorough response later, but for now: Your list neglects my objection that the FairTax gives a huge tax cut to the rich that's paid for by the middle (and lower-middle and upper-middle) class.

I'll be checking the posts for other possible oversights.

[edited out my little misunderstanding.]

Let me respond to this objection now. Sorry about not including it before, I just forgot about this objection.

First, what is wrong with a tax cut for the rich? They would still be paying the majority even under this chart:

I still maintain that this chart is inaccurate, but even so it proves my point. The "rich" still pay 45.9% of the taxes.

The rich pay more taxes because they have more wealth. What is the matter with this? In fact, according to wikipedia (I know, I know, but they stole it straight from an IRS report), "the top 1% pay 36.9% of federal tax (wealth 32.7%), the top 5% pay 57.1% (earning 57.2%), top 10% pay 68% (wealth 69.8%), and the bottom 50% pay 3.3% (wealth 2.8%)". So the wealthy already pay much less in taxes relative to their wealth than the bottom HALF of American taxpayers. .
Just for fun, here's a graph of wealth vs. income:

http://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/stratification/WealthIncome07.gif
I assume you can't see the right side, so I'll tell you that the bottom 40% only gets 12% of the income and has a shocking ZERO POINT TWO percent of the wealth. (Yes, this graph probably shows the bottom 50% having only 2.0 percent of wealth instead of 2.8. Either way...)

Now lets get to your next assertion, the "tax cut" would be paid for by the middle (upper and lower middle). Lets look at what happened under current law when the "Bush Tax Cuts" (PLEASE DO NOT GET INTO BUSH POLICY IN THIS THREAD). With the rates for the "top" were cut, revenue to the government increased dramatically. No group(s) paid for those tax cuts. The reason that government tax revenue increased was the tax base increased. The tax cut allowed for more investment and job creation. This employed more people, all of whom pay taxes thereby increasing revenue.

Actually, this is incorrect, according to FactCheck.org and all of their highly placed and very official sources, many coming right from the Bush Administration itself.
"The impact of the tax cuts on economic growth is a matter of debate among economists. We're not voicing a view on whether the tax cuts should have been enacted; that, too, is a separate discussion. But it is clear they did not "increase revenues."

To look at a private enterprise with a similar philosophy we will look at Wal-Mart. Wal-Mart makes money, lots of it. Why do they make money? They sell lots of things for cheaper than elsewhere. This is only to show that when you decrease the price, more people come to buy your inventory.

The same is true with tax policy. When you cut taxes, people have more to do with whatever they decide.

EXCUSE ME, BUT NO NO NO NO NO. You very recently conceded that prices will go up if people's paychecks do and to the same extent; and you JUST NOW admitted that everyone but the very rich and very poor will get a tax hike. Where are you pulling this out of?

Many people will decide to simply spend it. Others will invest or save it. Some will do some of both. All three will help stimulate the economy. The stimulated economy will pay more taxes than a higher rate would be able to do. Taxes are not a zero sum game. When you add more people to the tax base, by cutting taxes, you increase government revenue. It was shown under Reagan as well. He cut the highest tax rate from 70% to 28%! Then the government went from collecting about $500B to $1T! He doubled the revenue by cutting taxes.

I'm going to have to ask you to account for a decade of normal economic growth (as opposed to what Reagan's tax cuts are supposedly responsible for) into that analysis. Then we can discuss this further.

Now tell me again how tax cuts are a bad thing? I understand you will probably disagree with my point of view, but this is shown in the facts of the past.

Only not.

Now the FairTax. You claim that it will be a tax cut for the "rich" and it seems according to your chart that they would pay 7.6% less as a percentage of total taxes collected. This does not mean that the other groups will see a tax increase to remain at revenue neutral. These charts (I posted them earlier too) show the effective tax rate of current law and the FairTax:

and

These charts seem to me to be showing that the effective rates are going to decrease under the FairTax. Effective tax rates are rates people end up paying after the tax refund (Current law) and prebate (FairTax) are applied.

The FairTax will increase the tax base, similar to how tax cuts increase the tax base. Thereby increasing revenue to the government without raising tax rates on anyone.

So I disagree that your claim that the "huge tax [edit: misspelling] cut to the rich [that will be] paid for my the middle (and lower-middle and upper-middle) class," has validity based on past tax cuts and the effects they have had on government revenue and the economy.

I refer you to my earlier post (in fact, now that I look, it was right after the LAST time you whipped out thos two graphs):

Even if I were to grant that the graph that FactCheck.org uses wasn't properly fact-checked (which I emphatically do not), the trends still hold true. The extremely poor and very rich benefit at the cost of the middle class.

And, hey, you trust your precious Americans for Fair Taxation, right?

Notice the similarity in relative numbers, with two exceptions: the AFT graph shows less benefit to the poor in both "before" and "after", and THE EFFECT THE FAIR TAX WILL HAVE ON VERY HIGH INCOME LEVELS IS HIDDEN. They don't want you to see that the major benefits of the "FairTax" are to the very top earners.

You can argue about how much more efficient the FairTax will supposedly be, but trying to deny that the rich are the primary beneficiaries is just pathetic.

Also, I want sources on your allegations about the graph, and don't forget that the source has to specify that it is the data that THAT graph draws on that is incorrect.

I would like to add that the AFT's objection to the graph FactCheck uses is "but it doesn't count payroll taxes!" which fall only on the first $95,000 and are regressive anyway. So if those were factored in, it should show a MUCH, MUCH BIGGER tax cut on the upper end of the spectrum than the Treasury-data-based graph does. No wonder the AFT doesn't want you to see it.