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Old 11-26-2012, 09:51 AM   #521
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As stated before, a consumption tax would be a HORRIBLE idea in the real world due to the heavily weighted distribution. The bulk of taxes are paid by the top 10%. But the consumption rate by that bracket is not nearly as high as the lower 90%. The lower 90% spends most if not all of it's income in order to "survive". While the amount spent by the top 10% is massive in comparison, the percentage spent in comparison to their income is much lower. And making it progressive would more likely than not result in a very complicated system no better than what we currently have.
Why would it need to be complicated? There need not be 12000 rules about corporate entities and what you and they can and can't take deductions for, instead it's simple. Say financial transactions of up to $1000 are taxed at 10%, purchases above $3k have a marginal rate of 11% and so on. At the end of the year send low-mid income people back a check for the first $12k or so for their "survival" purchases.

That is a simple computer algorithm that any business person's cash register or invoicing system could use to account for the tax they must collect and remit to Uncle Sam.

Right now there is a massive underground economy selling sex, drugs, gambling, home improvements etc. These people pay nothing into the system. That alone is worth making the system consumption based. We would all get a tax break if they paid into their own future incarcerations assuming we must continue to incarcerate Americans for sinning.

Keep in mind, that all of us with income would now be getting it tax free. That is an offsetting factor that you seem to be overlooking.
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Old 11-26-2012, 10:18 AM   #522
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As stated before, a consumption tax would be a HORRIBLE idea in the real world due to the heavily weighted distribution.

The only thing Lance has ever typed that I can agree with is that spending needs to be cut. A big chunk can and should come from the military.
I agree with both these things. It seems that both local and State tax agency's seem to think that adding another penny here or there would not hurt anything but the problem is that those pennies add up. When I was young, we had something like a 2 or 3% tax on things. Now it's 8% and growing QUICKLY towards nearly 10% which is INSANE!!!

Why not cut it ALL from the Military? There are SO MANY black buckets in that particular expenditure that we don't even know where much of it is going. I am all for black ops programs but I think the percentage we spend on them is getting...well, ,VERY excessive. My other problem with the Military bucket is that the Bush's used it as their "piggy bank". Need higher employment, just declare a war and put more unemployed US citizens into the Military and pay their salaries through THAT branch of government. Now that there is no single enemy, we are spending MORE than we EVER did when we were up against USSR. Bring the boys home and stop "declaring" artificial wars on anyone who's not christian. It's the United States of AMERICA NOT the USC (Christians). Put god in currency & school & I don't care. Use (false) Christianity as a reason for military action and I have a HUGE PROBLEM with that. What we are doing in other countries is NOT CHRISTIAN. It may be attempts at promoting democracies but who ever said we had to FUND other countries conversions to democracies? The US people did NOT vote for that!
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Old 11-26-2012, 10:22 AM   #523
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Why would it need to be complicated? There need not be 12000 rules about corporate entities and what you and they can and can't take deductions for, instead it's simple. Say financial transactions of up to $1000 are taxed at 10%, purchases above $3k have a marginal rate of 11% and so on. At the end of the year send low-mid income people back a check for the first $12k or so for their "survival" purchases.

That is a simple computer algorithm that any business person's cash register or invoicing system could use to account for the tax they must collect and remit to Uncle Sam.

Right now there is a massive underground economy selling sex, drugs, gambling, home improvements etc. These people pay nothing into the system. That alone is worth making the system consumption based. We would all get a tax break if they paid into their own future incarcerations assuming we must continue to incarcerate Americans for sinning.

Keep in mind, that all of us with income would now be getting it tax free. That is an offsetting factor that you seem to be overlooking.
In regards to the last statement, I have taken that in to account. As for the progressive portion being complicated, I took it from a different angle. i.e. the more you spend cumulatively versus on a per expenditure stance. That would simplify it, but it still would likely not work due to the spending differences in comparison to income.
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Old 11-26-2012, 10:40 AM   #524
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Rich people spend way way more than poor people. The fair tax is quite progressive by its very nature.
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Old 11-26-2012, 11:25 AM   #525
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Rich people spend way way more than poor people. The fair tax is quite progressive by its very nature.
You don't understand the math. If two people on different ends of the income spectrum are paying an equal tax rate, there is nothing progressive about it.

For instance.

Say I make $1 million/yr and buy $500k in goods at 10%. I pay $50k in taxes. $50k/$1mil = 5% tax rate

Say you make $50k/yr and buy $40k in goods at 10%. You pay $4k in taxes. $4k/$50k = 8% tax rate

So even though I spent "way way more" than you, I still paid a lower effective tax rate. That's why progressive marginal rates would be necessary to make the Fair Tax fair.
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Old 11-26-2012, 11:28 AM   #526
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Rich people spend way way more than poor people. The fair tax is quite progressive by its very nature.
No one has denied that rich people spend way more than poor people. The issue is what percentage of their income are they spending. Homes earning under $25K/yr spend nearly everything they make in one way, shape or form. Double that (a bit more than the average in the US) and the percentage drops a bit but not by much. Get up to $100K? Now a small amount more is going in to retirement/investments. Once you start getting in to the higher reaches of the top 10/5/1% and the percentage spent of their income drops dramatically. A much larger amount is going in to investments, retirement and flat out savings.
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Old 11-26-2012, 11:32 AM   #527
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You can't spend a "percentage". Such frivolous arguments contribute little to solving the problem. They serve only to preserve our current bullshit tax code.
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Old 11-26-2012, 12:09 PM   #528
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You can't spend a "percentage". Such frivolous arguments contribute little to solving the problem. They serve only to preserve our current bullshit tax code.
What do you mean you can't spend a percentage? If you earn $100,000/yr and have no savings at the end of the year, you spent 100% of your earnings. If you have $10K left over, you spent 90% of it. And so on. When you're dealing with much larger amounts, that number gets lower and lower. Hence the terms "new money" and "old money". I've never denied the current code is BS. If anything, that sums up what I've said in the past. I'm simply stating that a consumption based tax would unlikely improve the current situation. Frankly, it'd likely worsen it.
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Old 11-26-2012, 05:50 PM   #529
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There are only 4 ways to reduce the debt and deficit. 1st raise taxes, this seems to be going nowhere. 2. Cut spending, not in my backyard as these politicians don't want to cut anything that benefits their state or they will lose their next election. 3. Inflate your way out of it. This is the trickiest and can blow up ala the Carter era. 4th makes the most sense and that is to grow the economy so more people are working, spending and paying taxes. The trick here would be to use a combo plan that would do the first 2 gently and then really put some incentive plans to create job growth.
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Old 11-26-2012, 06:28 PM   #530
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There are only 4 ways to reduce the debt and deficit. 1st raise taxes, this seems to be going nowhere. 2. Cut spending, not in my backyard as these politicians don't want to cut anything that benefits their state or they will lose their next election. 3. Inflate your way out of it. This is the trickiest and can blow up ala the Carter era. 4th makes the most sense and that is to grow the economy so more people are working, spending and paying taxes. The trick here would be to use a combo plan that would do the first 2 gently and then really put some incentive plans to create job growth.
Who are you and what have you done with Dave!?

Just taxing the rich more isn't going to cut it though. That would only be a drop in the bucket so obviously the middle class, still the largest population segment of America I think, would have to also bear the brunt. A really big brunt.

The 47% will be unaffected by taxes on the front end but on the back end, when prices of everything go up, they too will pay more in taxes because the cost of an item is never absorbed by a company; it is always passed along. This what the Marxist manifesto doesn't seem to get.

Also, the 30% of the population who smoke, mostly in the lower income bracket, will see a huge hit in taxes by obamacare. You know; the obamacare they voted for when they voted for obama.

No one will be exempt in the long run. It's just a facade from the left that implies all this free money, phone, food, whatever will continue to come in.

Eventually the money will run out and the very first thing to be cut will be welfare. Not all at once of course but it will be phased out again. Maybe this time it will faster and less generous that last time. Clinton and the republican congress actually got this one right when they fixed it to make welfare a 5 year lifetime program or 2 years per kid. I think think they put the extra year in there in case someone who was poor was stupid enough to have another kid; at least the kid would not suffer completely for the first year assuming the mother used the money as was intended. Most don't though.

None of this is going to happen because obamao wants to destroy America. He has no intention of helping it prosper. Nothing he has done over the last 4 years is any indication he cares one whit about this country and its people.

Oh, he may throw a bone out there to make a show of it, but he has no real intention of trying to fix anything. Never has; never will.

This entire conversation is completely moot.
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