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Your edit refers to something like the "Fair Tax", http://en.wikipedia.org/wiki/FairTax http://en.wikipedia.org/wiki/FairTax. It's been a while since I've read

by drhodes 12y ago

Your edit refers to something like the "Fair Tax", http://en.wikipedia.org/wiki/FairTax http://en.wikipedia.org/wiki/FairTax. It's been a while since I've read about it. From what I recall, some people are against it because they think it will disproportionately burden low income people.

snowwrestler 12y ago
Fair Tax is the worst of all worlds. On its face, a sales tax is highly regressive, so it disproportionately harms poor and middle class citizens. So the Fair Tax answer is for the government to refund to everyone a stipend for the basic costs of living. This creates a collection of personal data the same size as the IRS (they need to know where to send the check), AND a government entitlement program larger than Medicare and Social Security put together.
- talmand 12y ago
  Why not a progressive sales tax based on the pricing of the individual item? As for the data collection, for most people the government already has all that info anyway. The stipend would open the door for the possibility of the guaranteed basic income some people have been going on about lately. People would already be accustomed to the government sending them a monthly check for essentially being alive.
  - nitrogen 12y ago
    If prices were taxed progressively (which AIUI they are in some cases, e.g. expensive imported cars), you might see large items split into many small parts sold separately, with an on-site assembly service that costs less than the saved taxes.
    - talmand 12y ago
      Then you simply tax the service. But on the other hand, higher taxes don't always result in higher revenues. In fact, you might see an uptick in revenues. If people see they might save money with that method then more people might be likely to buy the item they, otherwise, may not have. It all depends on how the taxes are structured. Of course, we then slide into complicated tax code like we have now.
- dnautics 12y ago
  Most fair tax proposals come with a flat rebate, so if you're spending, say, under 20k you are exempt. I'm not a fan of the fair tax but a more sophisticated understanding of it might be warranted.
  - snowwrestler 12y ago
    While there are a number of federal sales tax proposals, there's only one Fair Tax proposal (they've even trademarked the name). While my short comment obviously does not encompass every detail, the basics are: 1) A flat federal sales tax. 2) A "prebate" to offset the regressiveness, which is a check sent by the federal government to every U.S. household every month. http://www.fairtax.org/ http://www.fairtax.org/
evunveot 12y ago
I can't find the link, unfortunately, but the Congressional Budget Office released an analysis a few years ago comparing the FairTax with a flat tax and I believe another proposal (possibly a VAT system) and found that, while the FairTax would greatly benefit the poor (via the flat "prebate" checks) and the rich (because of the elimination of capital gains taxes and the fact that they spend a smaller proportion of their income), it would increase the burden on the middle class substantially. That kind of killed it for me. Edit: Found it. It wasn't the CBO, it was a Bush-appointed advisory panel. See the "Chapter Eight - Nine" pdf, page 20: http://govinfo.library.unt.edu/taxreformpanel/final-report/index.html http://govinfo.library.unt.edu/taxreformpanel/final-report/i...

by drhodes 12y ago

snowwrestler 12y ago

Fair Tax is the worst of all worlds. On its face, a sales tax is highly regressive, so it disproportionately harms poor and middle class citizens. So the Fair Tax answer is for the government to refund to everyone a stipend for the basic costs of living. This creates a collection of personal data the same size as the IRS (they need to know where to send the check), AND a government entitlement program larger than Medicare and Social Security put together.

talmand 12y ago
Why not a progressive sales tax based on the pricing of the individual item? As for the data collection, for most people the government already has all that info anyway. The stipend would open the door for the possibility of the guaranteed basic income some people have been going on about lately. People would already be accustomed to the government sending them a monthly check for essentially being alive.
- nitrogen 12y ago
  If prices were taxed progressively (which AIUI they are in some cases, e.g. expensive imported cars), you might see large items split into many small parts sold separately, with an on-site assembly service that costs less than the saved taxes.
  - talmand 12y ago
    Then you simply tax the service. But on the other hand, higher taxes don't always result in higher revenues. In fact, you might see an uptick in revenues. If people see they might save money with that method then more people might be likely to buy the item they, otherwise, may not have. It all depends on how the taxes are structured. Of course, we then slide into complicated tax code like we have now.
dnautics 12y ago
Most fair tax proposals come with a flat rebate, so if you're spending, say, under 20k you are exempt. I'm not a fan of the fair tax but a more sophisticated understanding of it might be warranted.
- snowwrestler 12y ago
  While there are a number of federal sales tax proposals, there's only one Fair Tax proposal (they've even trademarked the name). While my short comment obviously does not encompass every detail, the basics are: 1) A flat federal sales tax. 2) A "prebate" to offset the regressiveness, which is a check sent by the federal government to every U.S. household every month. http://www.fairtax.org/ http://www.fairtax.org/

evunveot 12y ago

I can't find the link, unfortunately, but the Congressional Budget Office released an analysis a few years ago comparing the FairTax with a flat tax and I believe another proposal (possibly a VAT system) and found that, while the FairTax would greatly benefit the poor (via the flat "prebate" checks) and the rich (because of the elimination of capital gains taxes and the fact that they spend a smaller proportion of their income), it would increase the burden on the middle class substantially. That kind of killed it for me. Edit: Found it. It wasn't the CBO, it was a Bush-appointed advisory panel. See the "Chapter Eight - Nine" pdf, page 20: http://govinfo.library.unt.edu/taxreformpanel/final-report/index.html http://govinfo.library.unt.edu/taxreformpanel/final-report/i...