5 ms·

Ask HN: Putting aside your political views – do you support the Fair Tax?

3 points by codemonkeysh 4y ago

blamestross 4y ago
I can't think of anything more "political views" than tax policy. Literally any opinion on the matter is inherently political. And no I don't support it, it is regressive. Just another rhetorical trap for the rich and powerful to push tax burdens onto the poor. It's "simplicity" a slight of hand to further the demonization of the IRS. Does tax code need cleaning up, YES. It has caught up in a "starve the beast" strategy for decades. Make the tax codes too complicated for individuals to actually comply with, under-fund and hobble the IRS but mandate them such that they can only practically hound poor people and can't audit the rich. No political party has incentive to make anything but superficial progress in pursuit of popular goals and continue to move actual policy in support of the rich and powerful regardless of which political party has power.
kstenerud 4y ago
The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. The rich spend between 1 and 10% of their income on goods and services, whereas the poor spend upwards of 100% of their income, and even more by going into debt to cover life expenses. All this tax would do is ensure that the wealth of the rich remains locked up and out of circulation forever, multiplying tax free in hedge funds (basically sucking even more money out of the economy), while the poor pay for everything.
- anigbrowl 4y ago
  Just according to keikaku. (Translator's note: keikaku means plan.)
  - kstenerud 4y ago
    It's not really a plan per se; it's just a natural consequence (or emergent phenomena, if you will) of a political system where one must already be rich and connected in order to become a senator and thus affect the laws of the land. Not all countries have this problem.
    - anigbrowl 4y ago
      My post was more bleak sarcasm than analysis, but I think it's about 50-50. Perverse incentives are part of the issue, but there are networks that diligently and patiently work to maximize their number and perversity, eg applying the lessons of selectorate theory in a maximally adversarial rather than diagnostic way. https://en.wikipedia.org/wiki/Selectorate_theory https://en.wikipedia.org/wiki/Selectorate_theory
- no-s 4y ago
  > The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. So there are some provisions to address this: - basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it. - tax only first sale: only new goods and services are taxed. resale is not taxed. However this does mean direct services are taxed and that may be unpleasant for those who earn by invoicing for service (lawyers, truck drivers, etc). OTOH consumable things like food, disposable diapers, etc will always be taxed - Only the federal individual income tax is repealed and outlawed. There’s plenty of taxation schemes left and some even applies to wealthy individuals and corporations. I question your explanation of “rich get richer, poor pay for everything”, it doesn’t seem obvious. Hedge funds serve a purpose or they wouldn’t exist, but you seem to imply they only serve to pull money out of the economy. That at least would be deflationary, but AFAICT it seems like the appreciation of hedge funds at least creates wealth that gets put to some use in further capitalization. Which grows the economy, so I scratch my head at your characterization. Furthermore “the poor pay for everything” seems like it could be substantiated only if the actual amount corresponding to the 100%+ you claim the poor will pay exceeds the amount corresponding to the 1%-10% the rich will pay such that the latter is lost in the noise. The reality even in the current tax scheme is the rich pay for everything eventually (even more so in California, the pinnacle of benevolent taxation, up yours Franchise Tax Board).
  - anigbrowl 4y ago
    - basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it. How are you going to minimize the bureaucracy? Poor people are still going to have document all their income/assets to qualify for a rebate, richer people who hate taxes will channel their income through some sort of trust while claiming that their designer suits are owned by the trust and administrators are required to wear them like any other employee. Hedge funds serve a purpose or they wouldn’t exist As does Fentanyl, but I bet you don't think it's a good idea to sprinkle it on your cornflakes. As does fentanyl, but that doesn't mean it's a good idea to sprinkle it on your cornflakes.
anigbrowl 4y ago
I support the Even Fairer Tax, and anyone who doesn't is a monster. It's right there in the name! Putting aside my political views is impossible to do on a question of how a polity should finance itself. This submission is submarine-style PR for a conservative initiative that aims to 'promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.' If you want to argue that this system would be superior because Reasons then I would be interested in hearing your argument (although I probably won't agree with it), but you didn't even bother to articulate what you find interesting about it. Perhaps delete this and try again with more substance.
nindalf 4y ago
Firstly, you don't specify what the Fair Tax is > The Fair Tax would repeal the current tax code and replace it with a single national consumption tax that is pro-growth and allows Americans to keep every cent of their hard-earned money. Source: https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=10824 https://buddycarter.house.gov/news/documentsingle.aspx?Docum... Secondly, what do you think "political views" are? Politics is how we mediate social interactions. Our political views are implicitly linked with how we think society should be governed and how that government should be funded. For many people, their view on taxation is their primary political view. Leaving aside the loaded, imprecisely specified question - I don't support regressive taxes. Regressive taxes mean more of the tax burden lies on the people who can afford it least. An income tax that scales with income leaves everyone with sufficient money to spend. People with higher incomes contribute more in absolute terms, but the same in % terms. Personally I don't mind paying 30% in taxes regardless of what I earn. Whereas a consumption tax is bananas. It benefits me, who saves a large chunk of my income. I would keep even more. But a person living pay check to pay check, that person spends almost all their money despite being taxed very little. For that person, their income wouldn't rise much, but the prices of everything they want to buy would rise. And second order effects are pretty bad. Consumption taxes reduce consumption. That's bad for growth, no matter how you look at it. The people who want this clearly learned economics from a work of fiction.
- codemonkeysh 4y ago
  Something tells me that you love to critique things to hear yourself speak before actually answering a question. P.S. it's spelled "paycheck" not "pay check". ;)
  - nindalf 4y ago
    When asked a loaded question, I point out its loaded before answering it. I could be wrong though. Perhaps you were merely ignorant of what “politics” means. In that case, I’m sorry for calling your question loaded. I hope you’ve found this educational.
    - 4y ago
codemonkeysh 4y ago
I find it very interesting that people can't put aside political views and speak about whether or not having a consumption tax, in their opinion, is a good or bad idea when compared to the current system. This question isn't about a persons view of Biden or Trump. I think kstenerud did a great job at expressing their views without having to speak about politics. Is this an indicator at how toxic social media has become and how people have become addicted to arguing vs. having a discussion? I was thinking about how a consumption tax aka Fair Tax does have some benefits, but in the case that kstenerud pointed out, depending on the percentage of the tax, it could hurt the poor. For instance, if a gallon of milk now goes for $20, it's going to hurt the lower class. I do agree with kstenerud that such a tax could hurt the poorest people. This begs the question of is there a way to introduce such a tax that allows the poor to transition into a Fair Tax? e.g., Allowing people making under X 2 years not to pay any income taxes? Hopefully those of you with strong political opinions take it easy on this thread because honestly, it's like the smell of your own shit... no one really wants to sniff it ;)
- no-s 4y ago
  > I do agree with kstenerud that such a tax could hurt the poorest people. This begs the question of is there a way to introduce such a tax that allows the poor to transition into a Fair Tax? e.g., Allowing people making under X 2 years not to pay any income taxes? Fair Tax addresses that point with the rebate to alleviate the impact on the poverty-stricken. It is debatable as to whether this is a fair solution; OTOH it is also debatable as to whether the current system is fair to the poor. It’s not so clear that Milk would go to $20 a gallon under the Fair Tax and not so in the current regime ( Sudden Inflation Now Syndrome seems mostly unchecked ).
kup0 4y ago
I support the abstract idea of replacing our convoluted tax code with an extremely simple, straight-forward one that avoids negative impact on the poor and maintains an appropriate level of taxation on those (individuals and businesses) with millions/billions of dollars who are not personally impacted the same way (when you have a billion dollars, no reasonable amount of even "high" tax is going to affect your ability to have shelter, food, etc like it would when levied on lower income classes). I am even okay with setting that threshold relatively high. But this will never happen, and even if it did, it will only affect things at the federal level. The very way our country is designed and divided by states, counties, local jurisdictions makes me feel like we're doomed to complexity forever. However, simplification on the federal side would be a huge step forward. I don't claim to know exactly what that solution would look like but I think it is possible. I am not convinced "Fair Tax" is it, however.

3 points by codemonkeysh 4y ago

I can't think of anything more "political views" than tax policy. Literally any opinion on the matter is inherently political. And no I don't support it, it is regressive. Just another rhetorical trap for the rich and powerful to push tax burdens onto the poor. It's "simplicity" a slight of hand to further the demonization of the IRS. Does tax code need cleaning up, YES. It has caught up in a "starve the beast" strategy for decades. Make the tax codes too complicated for individuals to actually comply with, under-fund and hobble the IRS but mandate them such that they can only practically hound poor people and can't audit the rich. No political party has incentive to make anything but superficial progress in pursuit of popular goals and continue to move actual policy in support of the rich and powerful regardless of which political party has power.

kstenerud 4y ago

The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. The rich spend between 1 and 10% of their income on goods and services, whereas the poor spend upwards of 100% of their income, and even more by going into debt to cover life expenses. All this tax would do is ensure that the wealth of the rich remains locked up and out of circulation forever, multiplying tax free in hedge funds (basically sucking even more money out of the economy), while the poor pay for everything.

anigbrowl 4y ago
Just according to keikaku. (Translator's note: keikaku means plan.)
- kstenerud 4y ago
  It's not really a plan per se; it's just a natural consequence (or emergent phenomena, if you will) of a political system where one must already be rich and connected in order to become a senator and thus affect the laws of the land. Not all countries have this problem.
  - anigbrowl 4y ago
    My post was more bleak sarcasm than analysis, but I think it's about 50-50. Perverse incentives are part of the issue, but there are networks that diligently and patiently work to maximize their number and perversity, eg applying the lessons of selectorate theory in a maximally adversarial rather than diagnostic way. https://en.wikipedia.org/wiki/Selectorate_theory https://en.wikipedia.org/wiki/Selectorate_theory
no-s 4y ago
> The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. So there are some provisions to address this: - basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it. - tax only first sale: only new goods and services are taxed. resale is not taxed. However this does mean direct services are taxed and that may be unpleasant for those who earn by invoicing for service (lawyers, truck drivers, etc). OTOH consumable things like food, disposable diapers, etc will always be taxed - Only the federal individual income tax is repealed and outlawed. There’s plenty of taxation schemes left and some even applies to wealthy individuals and corporations. I question your explanation of “rich get richer, poor pay for everything”, it doesn’t seem obvious. Hedge funds serve a purpose or they wouldn’t exist, but you seem to imply they only serve to pull money out of the economy. That at least would be deflationary, but AFAICT it seems like the appreciation of hedge funds at least creates wealth that gets put to some use in further capitalization. Which grows the economy, so I scratch my head at your characterization. Furthermore “the poor pay for everything” seems like it could be substantiated only if the actual amount corresponding to the 100%+ you claim the poor will pay exceeds the amount corresponding to the 1%-10% the rich will pay such that the latter is lost in the noise. The reality even in the current tax scheme is the rich pay for everything eventually (even more so in California, the pinnacle of benevolent taxation, up yours Franchise Tax Board).
- anigbrowl 4y ago
  - basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it. How are you going to minimize the bureaucracy? Poor people are still going to have document all their income/assets to qualify for a rebate, richer people who hate taxes will channel their income through some sort of trust while claiming that their designer suits are owned by the trust and administrators are required to wear them like any other employee. Hedge funds serve a purpose or they wouldn’t exist As does Fentanyl, but I bet you don't think it's a good idea to sprinkle it on your cornflakes. As does fentanyl, but that doesn't mean it's a good idea to sprinkle it on your cornflakes.

anigbrowl 4y ago

I support the Even Fairer Tax, and anyone who doesn't is a monster. It's right there in the name! Putting aside my political views is impossible to do on a question of how a polity should finance itself. This submission is submarine-style PR for a conservative initiative that aims to 'promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.' If you want to argue that this system would be superior because Reasons then I would be interested in hearing your argument (although I probably won't agree with it), but you didn't even bother to articulate what you find interesting about it. Perhaps delete this and try again with more substance.

nindalf 4y ago

Firstly, you don't specify what the Fair Tax is > The Fair Tax would repeal the current tax code and replace it with a single national consumption tax that is pro-growth and allows Americans to keep every cent of their hard-earned money. Source: https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=10824 https://buddycarter.house.gov/news/documentsingle.aspx?Docum... Secondly, what do you think "political views" are? Politics is how we mediate social interactions. Our political views are implicitly linked with how we think society should be governed and how that government should be funded. For many people, their view on taxation is their primary political view. Leaving aside the loaded, imprecisely specified question - I don't support regressive taxes. Regressive taxes mean more of the tax burden lies on the people who can afford it least. An income tax that scales with income leaves everyone with sufficient money to spend. People with higher incomes contribute more in absolute terms, but the same in % terms. Personally I don't mind paying 30% in taxes regardless of what I earn. Whereas a consumption tax is bananas. It benefits me, who saves a large chunk of my income. I would keep even more. But a person living pay check to pay check, that person spends almost all their money despite being taxed very little. For that person, their income wouldn't rise much, but the prices of everything they want to buy would rise. And second order effects are pretty bad. Consumption taxes reduce consumption. That's bad for growth, no matter how you look at it. The people who want this clearly learned economics from a work of fiction.

codemonkeysh 4y ago
Something tells me that you love to critique things to hear yourself speak before actually answering a question. P.S. it's spelled "paycheck" not "pay check". ;)
- nindalf 4y ago
  When asked a loaded question, I point out its loaded before answering it. I could be wrong though. Perhaps you were merely ignorant of what “politics” means. In that case, I’m sorry for calling your question loaded. I hope you’ve found this educational.
  - 4y ago

codemonkeysh 4y ago

I find it very interesting that people can't put aside political views and speak about whether or not having a consumption tax, in their opinion, is a good or bad idea when compared to the current system. This question isn't about a persons view of Biden or Trump. I think kstenerud did a great job at expressing their views without having to speak about politics. Is this an indicator at how toxic social media has become and how people have become addicted to arguing vs. having a discussion? I was thinking about how a consumption tax aka Fair Tax does have some benefits, but in the case that kstenerud pointed out, depending on the percentage of the tax, it could hurt the poor. For instance, if a gallon of milk now goes for $20, it's going to hurt the lower class. I do agree with kstenerud that such a tax could hurt the poorest people. This begs the question of is there a way to introduce such a tax that allows the poor to transition into a Fair Tax? e.g., Allowing people making under X 2 years not to pay any income taxes? Hopefully those of you with strong political opinions take it easy on this thread because honestly, it's like the smell of your own shit... no one really wants to sniff it ;)

no-s 4y ago
> I do agree with kstenerud that such a tax could hurt the poorest people. This begs the question of is there a way to introduce such a tax that allows the poor to transition into a Fair Tax? e.g., Allowing people making under X 2 years not to pay any income taxes? Fair Tax addresses that point with the rebate to alleviate the impact on the poverty-stricken. It is debatable as to whether this is a fair solution; OTOH it is also debatable as to whether the current system is fair to the poor. It’s not so clear that Milk would go to $20 a gallon under the Fair Tax and not so in the current regime ( Sudden Inflation Now Syndrome seems mostly unchecked ).

kup0 4y ago

I support the abstract idea of replacing our convoluted tax code with an extremely simple, straight-forward one that avoids negative impact on the poor and maintains an appropriate level of taxation on those (individuals and businesses) with millions/billions of dollars who are not personally impacted the same way (when you have a billion dollars, no reasonable amount of even "high" tax is going to affect your ability to have shelter, food, etc like it would when levied on lower income classes). I am even okay with setting that threshold relatively high. But this will never happen, and even if it did, it will only affect things at the federal level. The very way our country is designed and divided by states, counties, local jurisdictions makes me feel like we're doomed to complexity forever. However, simplification on the federal side would be a huge step forward. I don't claim to know exactly what that solution would look like but I think it is possible. I am not convinced "Fair Tax" is it, however.