4 ms·

I liked the FairTax proposal - subsidy is given to everyone regardless of income level or spending and is enough to cover the tax on necessities. Of course it'

I liked the FairTax proposal - subsidy is given to everyone regardless of income level or spending and is enough to cover the tax on necessities. Of course it's never going to happen.

ceejayoz 12y ago
FairTax's motto: "because the rich don't have enough advantages already" edit: Downvotes? Seriously? FairTax shifts the burden dramatically onto the middle class. A rich person pays no capital gains, and as long as they don't go buying billion dollar yachts, they'll pay next to nothing percentage-wise.
- hipsterrific 12y ago
  The FairTax replaces all taxes and the prebate makes it progressive. The rich actually have no net benefit because in the income tax world, they're still rich and in the fairtax world, they're still rich. What progressive income taxation says is that you want to pull down the rich to bring up the poor. We need to pull up the poor and leave the rich alone. The rich have their wealth and will continue to maintain it. A tax plan should be transparent and it should allow the poor to save money and invest their way out of being poor.
  - ceejayoz 12y ago
    If the rich aren't pulling up the poor, who is? The middle class? I like the "it's progressive! progressive is bad!", incidentally.
    - nightski 12y ago
      I'd vote for any system that gives the poor more opportunity to pull themselves up. With FairTax they would have more income, pay no tax on essentials, could save/invest more, and reduce dependence on the government. That combined with no capital gains makes investment attractive to all classes. If you give someone the opportunity, but they choose to remain poor then it is not the government's job to take care of them. If however you do not give them that opportunity then we are just encouraging the poor to stay poor and depend on the government. I have to imagine no capital gains would have more meaning to the middle class saving for retirement as compared to a wealthy person netting 15% more. Lastly - expenditures are at least linear with regards to income if not exponential past $150k looking at a recent census. If you read the FairTax proposal it states that the rich would end up paying more tax overall then they do today.
      - ceejayoz 12y ago
        The poor don't tend to have the money to invest in things that generate capital gains in any meaningful capacity. That such a thing is touted as a benefit for the poor is indicative of either disingenuousness or naïveté on the part of FairTax backers. FactCheck.org has a well researched and well citied piece at http://www.factcheck.org/2007/05/unspinning-the-fairtax/ http://www.factcheck.org/2007/05/unspinning-the-fairtax/. Among the findings - anyone making between $15-30k and $200k suffers under the plan, while the rich see their tax burden drop dramatically.
        nightski 12y ago
        I read the article in its entirety. While what they propose (a very small fractional increase in taxes among the middle class) is entirely plausible, it misses the point entirely. A consumption tax is optional. Meaning I only pay that tax if I consume above a poverty level. An income tax however is not. If I earn an income, I pay the tax. The reason this is such a big deal is that it empowers the individual to change their financial situation. For example my taxes may decrease by 50% under FairTax, simply because I live a simple life style. If someone chooses to improve their situation, they can take all the extra money, save, invest without capital gains, and see the turnaround much quicker. This is in contrast to today's system which penalizes saving & investment and HEAVILY penalizes those who go out and start a business (I pay quite a bit more tax as a self employed individual). It is also much more logical to be penalized for consumption vs. contributing to society (similar to the OP).
notahacker 12y ago
Every redistribution of the tax burden has winners and losers. With the FairTax, it's not poor people who consume very little because they get a bigger subsidy than before. It's not those people who make far more money in a year than they can possibly spend (especially once you cut the now tax-free real estate[1] and lavish consumption on foreign holidays out of the picture). It's the average working person. [1]I've yet to see a sane argument for why you'd want to give property speculation a massive tax advantage over buying and selling consumer goods
- hipsterrific 12y ago
  The issue of tax burden is that the only loser are the people. Government issues taxes and can enforce it violently, so Government is the only winner in the tax game. For the wealthy, the move to a FairTax is neutral they don't benefit from it just as they don't have the same negative effects that a progressive system has with its loopholes. Also, we need to stop thinking that our economy will get better if we somehow increase the tax burden on the rich. What we need to start thinking is how to improve the plight of the poor and the needy. The reason why I supported the FairTax because of the prebate and it increases the purchasing power of the poor. When the poor can keep 100% of their pay, they control what they can spend on. For the middle class, the same deal: we can have families improve their lives, save up for college, be masters of their spending, and pave the way for more charity. The rich will continue being rich, regardless but if we can ease the tax burden on the middle class and the poor by removing income taxes it'd be a big break.
hipsterrific 12y ago
Same here, the FairTax is a pretty good idea. I believe that Bill Gates even advocated that the US shift away from income based taxation to consumption base. If there's anything our economy that we can bank on, it will be consumption.

I liked the FairTax proposal - subsidy is given to everyone regardless of income level or spending and is enough to cover the tax on necessities. Of course it's never going to happen.

ceejayoz 12y ago

FairTax's motto: "because the rich don't have enough advantages already" edit: Downvotes? Seriously? FairTax shifts the burden dramatically onto the middle class. A rich person pays no capital gains, and as long as they don't go buying billion dollar yachts, they'll pay next to nothing percentage-wise.

hipsterrific 12y ago
The FairTax replaces all taxes and the prebate makes it progressive. The rich actually have no net benefit because in the income tax world, they're still rich and in the fairtax world, they're still rich. What progressive income taxation says is that you want to pull down the rich to bring up the poor. We need to pull up the poor and leave the rich alone. The rich have their wealth and will continue to maintain it. A tax plan should be transparent and it should allow the poor to save money and invest their way out of being poor.
- ceejayoz 12y ago
  If the rich aren't pulling up the poor, who is? The middle class? I like the "it's progressive! progressive is bad!", incidentally.
  - nightski 12y ago
    I'd vote for any system that gives the poor more opportunity to pull themselves up. With FairTax they would have more income, pay no tax on essentials, could save/invest more, and reduce dependence on the government. That combined with no capital gains makes investment attractive to all classes. If you give someone the opportunity, but they choose to remain poor then it is not the government's job to take care of them. If however you do not give them that opportunity then we are just encouraging the poor to stay poor and depend on the government. I have to imagine no capital gains would have more meaning to the middle class saving for retirement as compared to a wealthy person netting 15% more. Lastly - expenditures are at least linear with regards to income if not exponential past $150k looking at a recent census. If you read the FairTax proposal it states that the rich would end up paying more tax overall then they do today.
    - ceejayoz 12y ago
      The poor don't tend to have the money to invest in things that generate capital gains in any meaningful capacity. That such a thing is touted as a benefit for the poor is indicative of either disingenuousness or naïveté on the part of FairTax backers. FactCheck.org has a well researched and well citied piece at http://www.factcheck.org/2007/05/unspinning-the-fairtax/ http://www.factcheck.org/2007/05/unspinning-the-fairtax/. Among the findings - anyone making between $15-30k and $200k suffers under the plan, while the rich see their tax burden drop dramatically.
      - nightski 12y ago
        I read the article in its entirety. While what they propose (a very small fractional increase in taxes among the middle class) is entirely plausible, it misses the point entirely. A consumption tax is optional. Meaning I only pay that tax if I consume above a poverty level. An income tax however is not. If I earn an income, I pay the tax. The reason this is such a big deal is that it empowers the individual to change their financial situation. For example my taxes may decrease by 50% under FairTax, simply because I live a simple life style. If someone chooses to improve their situation, they can take all the extra money, save, invest without capital gains, and see the turnaround much quicker. This is in contrast to today's system which penalizes saving & investment and HEAVILY penalizes those who go out and start a business (I pay quite a bit more tax as a self employed individual). It is also much more logical to be penalized for consumption vs. contributing to society (similar to the OP).

notahacker 12y ago

Every redistribution of the tax burden has winners and losers. With the FairTax, it's not poor people who consume very little because they get a bigger subsidy than before. It's not those people who make far more money in a year than they can possibly spend (especially once you cut the now tax-free real estate[1] and lavish consumption on foreign holidays out of the picture). It's the average working person. [1]I've yet to see a sane argument for why you'd want to give property speculation a massive tax advantage over buying and selling consumer goods

hipsterrific 12y ago
The issue of tax burden is that the only loser are the people. Government issues taxes and can enforce it violently, so Government is the only winner in the tax game. For the wealthy, the move to a FairTax is neutral they don't benefit from it just as they don't have the same negative effects that a progressive system has with its loopholes. Also, we need to stop thinking that our economy will get better if we somehow increase the tax burden on the rich. What we need to start thinking is how to improve the plight of the poor and the needy. The reason why I supported the FairTax because of the prebate and it increases the purchasing power of the poor. When the poor can keep 100% of their pay, they control what they can spend on. For the middle class, the same deal: we can have families improve their lives, save up for college, be masters of their spending, and pave the way for more charity. The rich will continue being rich, regardless but if we can ease the tax burden on the middle class and the poor by removing income taxes it'd be a big break.

hipsterrific 12y ago

Same here, the FairTax is a pretty good idea. I believe that Bill Gates even advocated that the US shift away from income based taxation to consumption base. If there's anything our economy that we can bank on, it will be consumption.