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phil on 04 January 2008

You've provided not one single economic analysis to show that the FairTax would actually be fair. All you've done is made claims. I doubt your claims, but in an attempt to be fair, I tried looking up some data for you. All of the data I found suggests that tax burden would increase for everyone making between $15,000 and $200,000 a year, with the tax burden on those making over $200,000 falling off quite a bit.

You've made claims that this simply isn't true, but I doubt your claims, and without hard numbers my mind won't change. Yes, that's right, I'm calling you on your bullshit. Get crackin.

Edit: Mike Huckabee thinks the Earth is 6000 years old.  8 years of that kind of crap has been more than enough.



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Eomund on 04 January 2008
phil said:
Sqrl said:
Just for the record, a lot of very wealthy Americans are already moving out of the country to various non-extradition South American countries. The rich have the means to pick up and leave, all you have to do is give them a motive.

This whole idea that 10% of people should pay for 90% of the taxes or whatever the percentages are is going to fail once that 10% says "F this!". I actually know people who plan on moving to Ecuador, they invited me to come down and help pick a house with them. These people aren't filthy rich either, together they make about 240k a year. Where did they get the idea? Other wealthy people they are friends with.

The idea that the minority pay for the majority is great so long as you're majority. Just keep on pushing these people away, lets see what that does to the economy.

Seeing as to how the top 20% of America controls over 90% of the country's wealth, it's only fair that they pay over 90% of the taxes. If they wanna move offshore and say "F This," then the state can go ahead and say "F you back." I'm sure there's someone who wouldn't mind doing their job for half their pay.

 You see our current income tax taxes/punishes achievement. The higher you climb, the more you get stolen from you. Under the FairTax it taxes how much you spend, and in order for you to spend you must have wealth to spend. If you only make $20,000 a year then you can only spend $20,000 a year plus credit, but you eventually have to pay credit back too which cuts out of future wealth. So the more money you have the greater oppurtunity to spend and get taxed. So if the top 20% have 90% of the wealth (probably a myth, but I do recognize that they top bracket controls a good portion of the wealth in the country) they can get taxed more as well under the FairTax. 

Now if you say that the top 20% won't spend much money but instead invest or save it as tax free income, then who gets the invested or saved money? The company that they buy stock in, allowing them to do more R&D or more advertisement or more production. Or the savings account in a bank would allow the bank to loan more money out to start up businesses or as home mortages, who would offer products or services that would be taxed. So eventually their investment or savings get taxed in one form or another. Not only that but there would be an economic boom because of the investments and savings. Interest rates could drop because lenders would have a larger pool of money to pull from. There are many other benefits to the economy from the FairTax. I will get into those later.



I want my WHOLE paycheck! I support the Fair Tax!

http://www.fairtax.org/

Eomund on 04 January 2008
phil said:

You've provided not one single economic analysis to show that the FairTax would actually be fair. All you've done is made claims. I doubt your claims, but in an attempt to be fair, I tried looking up some data for you. All of the data I found suggests that tax burden would increase for everyone making between $15,000 and $200,000 a year, with the tax burden on those making over $200,000 falling off quite a bit.

You've made claims that this simply isn't true, but I doubt your claims, and without hard numbers my mind won't change. Yes, that's right, I'm calling you on your bullshit. Get crackin.

Edit: Mike Huckabee thinks the Earth is 6000 years old. 8 years of that kind of crap has been more than enough.


This was an unprovoked attack and is not going to get any friendly response from me. I have not criticised you for any beliefs you may have, I have simply been expressing this grand idea of a FairTax that will benefit everyone. I will show this in my next post. So sit down and listen.



I want my WHOLE paycheck! I support the Fair Tax!

http://www.fairtax.org/

Eomund on 04 January 2008

From FairTax.org link:

http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#14

  FairTax Current tax
Expenditures = income $50,000 $50,000
Net tax $6,803 $7,918
Effective tax rate 13.6%

15.8% 

 

  

 



I want my WHOLE paycheck! I support the Fair Tax!

http://www.fairtax.org/

phil on 04 January 2008
Eomund said:
phil said:
Sqrl said:
Just for the record, a lot of very wealthy Americans are already moving out of the country to various non-extradition South American countries. The rich have the means to pick up and leave, all you have to do is give them a motive.

This whole idea that 10% of people should pay for 90% of the taxes or whatever the percentages are is going to fail once that 10% says "F this!". I actually know people who plan on moving to Ecuador, they invited me to come down and help pick a house with them. These people aren't filthy rich either, together they make about 240k a year. Where did they get the idea? Other wealthy people they are friends with.

The idea that the minority pay for the majority is great so long as you're majority. Just keep on pushing these people away, lets see what that does to the economy.

Seeing as to how the top 20% of America controls over 90% of the country's wealth, it's only fair that they pay over 90% of the taxes. If they wanna move offshore and say "F This," then the state can go ahead and say "F you back." I'm sure there's someone who wouldn't mind doing their job for half their pay.

You see our current income tax taxes/punishes achievement. The higher you climb, the more you get stolen from you. Under the FairTax it taxes how much you spend, and in order for you to spend you must have wealth to spend. If you only make $20,000 a year then you can only spend $20,000 a year plus credit, but you eventually have to pay credit back too which cuts out of future wealth. So the more money you have the greater oppurtunity to spend and get taxed. So if the top 20% have 90% of the wealth (probably a myth, but I do recognize that they top bracket controls a good portion of the wealth in the country) they can get taxed more as well under the FairTax.

Now if you say that the top 20% won't spend much money but instead invest or save it as tax free income, then who gets the invested or saved money? The company that they buy stock in, allowing them to do more R&D or more advertisement or more production. Or the savings account in a bank would allow the bank to loan more money out to start up businesses or as home mortages, who would offer products or services that would be taxed. So eventually their investment or savings get taxed in one form or another. Not only that but there would be an economic boom because of the investments and savings. Interest rates could drop because lenders would have a larger pool of money to pull from. There are many other benefits to the economy from the FairTax. I will get into those later.


Here you go again with assertions not backed up with numbers. First, the top 20% do in fact control 90% of the wealth, maybe you should GO AND READ before you make guesses:

Financial Wealth
Top 1 percentNext 19 percentBottom 80 percent
198342.9%48.4%8.7%
198946.9%46.5%6.6%
199245.6%46.7%7.7%
199547.2%45.9%7.0%
199847.3%43.6%9.1%
200139.7%51.5%8.8%

 

Table 3: Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-1998.


Bottom 99 percentTop 1 percent
192263.3%36.7%
192955.8%44.2%
193366.7%33.3%
193963.6%36.4%
194570.2%29.8%
194972.9%27.1%
195368.8%31.2%
196268.2%31.8%
196565.6%34.4%
196968.9%31.1%
197270.9%29.1%
197680.1%19.9%
197979.5%20.5%
198175.2%24.8%
198369.1%30.9%
198668.1%31.9%
198964.3%35.7%
199262.8%37.2%
199561.5%38.5%
199861.9%38.1%

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

In addition, as graphs posted earlier in the thread show, the top 25% see a REDUCED tax burden from the FairTax. Also, if you think that a greater income disparity isn't a bad thing, check out the last time it was a 60/40 split. 1929. The income disparity certainly didn't help our economy out then, did it?



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phil on 04 January 2008
Eomund said:

From FairTax.org link:

http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#14

  FairTax Current tax
Expenditures = income $50,000 $50,000
Net tax $6,803 $7,918
Effective tax rate 13.6%

15.8%

 


Wow, so the people who want the tax passed are showing that it'll work.  I'm sure everyone who has ever proposed a bad idea would do exactly the same.  How about some independent analysis?



phil on 04 January 2008
Eomund said:
phil said:

You've provided not one single economic analysis to show that the FairTax would actually be fair. All you've done is made claims. I doubt your claims, but in an attempt to be fair, I tried looking up some data for you. All of the data I found suggests that tax burden would increase for everyone making between $15,000 and $200,000 a year, with the tax burden on those making over $200,000 falling off quite a bit.

You've made claims that this simply isn't true, but I doubt your claims, and without hard numbers my mind won't change. Yes, that's right, I'm calling you on your bullshit. Get crackin.

Edit: Mike Huckabee thinks the Earth is 6000 years old. 8 years of that kind of crap has been more than enough.


This was an unprovoked attack and is not going to get any friendly response from me. I have not criticised you for any beliefs you may have, I have simply been expressing this grand idea of a FairTax that will benefit everyone. I will show this in my next post. So sit down and listen.


The bold statement was an unfair ad hominem attack and off topic.  Sorry.  The rest of my point still stands, though.

Eomund on 04 January 2008

phil:

"Wow, so the people who want the tax passed are showing that it'll work.  I'm sure everyone who has ever proposed a bad idea would do exactly the same.  How about some independent analysis?"

 

Most of the independent analysis by the government is not independent either. The chart that Final Fan used earlier:

 

is not a valid chart and I explained it earlier, but I think I may have mis-stated my response. Here it is again. This chart is using data not based on HR-25 (aka The FairTax Bill). They used data that a council of sentors put together. HOWEVER they played with the numbers before they ran the data. The exempted food and medical expenses from the tax. They increased the rate to compensate for this effect. BUT THEY FAILED TO UNDERSTAND THAT THE PREBATE TAKES CARE OF THE TAX EXEMPTIONS! So this chart is an invalid representation of what the FairTax will represent.

The FairTax itself is the most researched tax proposal to date. The original idea of the FairTax came from an independent study put together by two business men that wanted to know what the best way to reform our tax code would be. They researched the Flat Tax, which the business men thought would win, and the current tax code, the FairTax, the VAT, and others too. The FairTax come out as the winner. That group of economists were INDEPENDENT TO START WITH! Therefore your argument that "We need to see independent data" is no longer necessary.



I want my WHOLE paycheck! I support the Fair Tax!

http://www.fairtax.org/

phil on 04 January 2008
Eomund said:

phil:

"Wow, so the people who want the tax passed are showing that it'll work. I'm sure everyone who has ever proposed a bad idea would do exactly the same. How about some independent analysis?"

 

Most of the independent analysis by the government is not independent either. The chart that Final Fan used earlier:

 

is not a valid chart and I explained it earlier, but I think I may have mis-stated my response. Here it is again. This chart is using data not based on HR-25 (aka The FairTax Bill). They used data that a council of sentors put together. HOWEVER they played with the numbers before they ran the data. The exempted food and medical expenses from the tax. They increased the rate to compensate for this effect. BUT THEY FAILED TO UNDERSTAND THAT THE PREBATE TAKES CARE OF THE TAX EXEMPTIONS! So this chart is an invalid representation of what the FairTax will represent.

The FairTax itself is the most researched tax proposal to date. The original idea of the FairTax came from an independent study put together by two business men that wanted to know what the best way to reform our tax code would be. They researched the Flat Tax, which the business men thought would win, and the current tax code, the FairTax, the VAT, and others too. The FairTax come out as the winner. That group of economists were INDEPENDENT TO START WITH! Therefore your argument that "We need to see independent data" is no longer necessary.

I don't care what two businessmen said. I want hard numbers from people who didn't invent the idea. If they're not offering up hard numbers as well as the methodology used to come up with said numbers, I'm not buying it.

That graph is the only independent data that we have. I trust the government to more reliably run the numbers than the people who are proposing the code.



Final-Fan on 04 January 2008

Eomund said:
The idea that the company will not reduce the prices once the FairTax is implemented is a myth. The capitalistic marketplace would ensure that the companies would keep prices as low as possible while still turning a profit.

Currently there is an embedded tax of about 22% in every thing we buy. This embedded tax is the Corporate Taxes, Payroll Taxes, etc. that the government collects from companies already. They want to make a profit so they pass the costs of the taxes and the cost of tax compliance on to the customers in the form of higher prices. This 22% is already an INCLUSIVE tax and would simply be replaced by the FairTax rate of 23% INCLUSIVE. Therefore the prices will stay about the same as they currently are. The cost of Tax Compliance is a fairly large portion is relation to how much income it provides to a company (hint: it helps bring in less than $1).

The cost of Tax Compliance for our entire country in the year 2005, 6 billion hours of individuals, businesses, and nonprofits. This effort added up to about $265 billion spent in COMPLIANCE ALONE! With this information we could assume that prices would go down since Compliance costs of the FairTax is a tiny fraction of what it currently costs. These costs would set off other price decreases for the consumer.


FactCheck.org says:
"But the FairTax Will Lower Prices"

Proponents of the FairTax point out that prices on consumer goods contain what are called “hidden taxes.” Under current law, corporations have to pay taxes on their earnings. Moreover, businesses have to pay social security taxes for each employee. The money to pay these taxes has to come from somewhere, and FairTax supporters argue that the cost is passed on to the consumer. In fact, the best-known proponent of the FairTax, talk-show host Neal Boortz, argues that 22 percent of the price of a consumer good is really a “hidden tax.” Get rid of corporate and social security taxes, Boortz argues, and consumer good prices would drop by 22 percent. Even with the 23 percent FairTax, prices stay the same, and with the elimination of income taxes, paychecks will get bigger. Everyone gets a raise and the federal government still gets its revenue. About 10 percent of the e-mail messages we received from FairTax proponents trumpeted this kind of magic act. It is easy to understand the confusion on the issue, as Boortz himself made similar assertions in the hardcover edition of his book. (He later issued a corrected version in paperback.)

A bit of critical analysis shows that this cannot be right. The FairTax is revenue-neutral. That means that for every tax dollar collected under the current system, the FairTax has to collect a dollar. If the FairTax exactly equaled embedded taxes, then it could not possibly be revenue-neutral, since embedded taxes do not take into account personal income or estate taxes. The FairTax rate would have to be high enough to replace embedded taxes plus income and estate taxes.

Chris Edwards, the Cato Institute's director of tax policy studies, points out that prices do not really matter; corporate, payroll, income and estate taxes currently generate approximately $2.4 trillion, and a revenue-neutral FairTax would still require that taxpayers pony up $2.4 trillion. Nor is it clear that the 22 percent embedded tax figure is particularly meaningful. David Burton, chief economist of the Americans for Fair Taxation, calls it "simplistic" to think that the entire cost of corporate taxes is borne by consumers. Cato's Edwards suggests that while consumers do pay at least part of the costs, producers also bear some of the burden. That is, employees pay part of the costs of hidden taxes (in the form of lower wages), and corporate shareholders pay another portion (in the form of lower returns on their investments).



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