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Thread: Presidential Tax Politics & the "Fair Tax" [split from 2008 Presidential Election thread]

  1. #51
    Cyburbian Brocktoon's avatar
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    Quote Originally posted by mgk920 View post
    Remember that cynicism NEVER wins debates against me.

    Anyways, following your suggestion of a 30% reduction in taxes on GM, if that is done GM might then have the cash to pay their pensioners.

    Mike


    The Fairtax proposal, as introduced in Congress, includes provisions for taxing the conversions of 'business' purchases to personal use, as well as provisions for tax credits for items that were purchased for 'personal' use being converted to business use.

    And yes, those records will be 'auditable'.

    Mike
    And those that duck question in favor of flip response don't win debate against anyone.

    Some years corporations pay taxes and other years they get substantial refunds but the price of their product rarely fluctuates. Pepsi lost money at the end of the 1990's and was making money and paying taxes a few year later but the cost of their product did not change.

    On to another point... don't you think that the fair tax will cripple the durable products industry? You buy a new car or sofa and pay 30% tax when I can buy a second hand one or refurbish my existing products? I could pay someone off the books to reupholster my sofa. I avoid the tax on his labor and since he did not pay tax to buy the new fabric then no tax revenue is collected. The black market and tax avoidance are large problems of the fair tax. That and it currently violates the Constitution.
    .
    "If you don't like change, you're going to like irrelevance even less" General Eric Shinseki

  2. #52
    Cyburbian mgk920's avatar
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    Quote Originally posted by Brocktoon View post
    Some years corporations pay taxes and other years they get substantial refunds but the price of their product rarely fluctuates. Pepsi lost money at the end of the 1990's and was making money and paying taxes a few year later but the cost of their product did not change.

    On to another point... don't you think that the fair tax will cripple the durable products industry? You buy a new car or sofa and pay 30% tax when I can buy a second hand one or refurbish my existing products? I could pay someone off the books to reupholster my sofa. I avoid the tax on his labor and since he did not pay tax to buy the new fabric then no tax revenue is collected. The black market and tax avoidance are large problems of the fair tax. That and it currently violates the Constitution.
    .
    What's to prevent someone from doing all of that (and paying cash under the table) in today's income tax and state sales tax climate?

    Remember, under the Fairtax, business books will certainly be auditable for tax purposes, as they are now under current income and state sales and taxes.

    And again, businesses do NOT pay taxes, PEOPLE pay taxes. They are passed along in the form of higher product prices and they work to reduce the dividends that anyone whom holds shares receives (and yes, pretty much all retirement plans hold shares in oodles of corporations, corporate taxes reduce their values and the amounts of money available to their holders at retirement).

    Mike

  3. #53
    Cyburbian TexanOkie's avatar
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    Quote Originally posted by Brocktoon View post
    The black market and tax avoidance are large problems of the fair tax. That and it currently violates the Constitution.
    .
    Please provide evidence that the proposed Fair Tax violates the Constitution. One catch, though: provide evidence that does not also implicate the current Federal Income Tax to also be a violation of the Constitution...

  4. #54
    Cyburbian Plan-it's avatar
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    Quote Originally posted by TexanOkie View post
    Please provide evidence that the proposed Fair Tax violates the Constitution. One catch, though: provide evidence that does not also implicate the current Federal Income Tax to also be a violation of the Constitution...
    Well, the current income tax has been validated by the Supreme Court as lawful when it was initially proposed. Some induvuduals sued and the law was deemed constitutional. I am not getting into the Fair Tax portion of this argument.
    Satellite City Enabler

  5. #55
    Cyburbian Brocktoon's avatar
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    Quote Originally posted by mgk920 View post
    What's to prevent someone from doing all of that (and paying cash under the table) in today's income tax and state sales tax climate?

    Remember, under the Fairtax, business books will certainly be auditable for tax purposes, as they are now under current income and state sales and taxes.

    And again, businesses do NOT pay taxes, PEOPLE pay taxes. They are passed along in the form of higher product prices and they work to reduce the dividends that anyone whom holds shares receives (and yes, pretty much all retirement plans hold shares in oodles of corporations, corporate taxes reduce their values and the amounts of money available to their holders at retirement).

    Mike
    The difference is services are not taxed at this time. The person that recovers a couch time and labor is not taxed. For services that are taxed their overall contribution to the tax system is very small. When adding a tax increase on every service it provides incentives to cheat since it is difficult to prove. Also who is going to man this army of auditors if there is no IRS?

    Thank you for the no response on people purchasing second hand goods and the black market. It proves that the fair tax advocates do not have answers to this.

    Also thank you for not answering my sticky prices question. Stating that consumers pay taxes and not businesses still does not address that businesses are rarely able to pass along 100% of a price increase to consumers regardless of the cause of the increase. As for your dividend argument I suggest you look at the history of dividend payments of publicly traded companies the past 50 years. As for retirement savings most of that is accrued through price appreciation and not dividend income or interest on debt securities.



    Quote Originally posted by TexanOkie View post
    Please provide evidence that the proposed Fair Tax violates the Constitution. One catch, though: provide evidence that does not also implicate the current Federal Income Tax to also be a violation of the Constitution...
    Here is the text of the 16th amendment to the Constitution: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
    Since the fair tax, taxes spending not income it violates the 16th amendment. Most supporters of the fair tax recognize a repeal would be necessary.
    "If you don't like change, you're going to like irrelevance even less" General Eric Shinseki

  6. #56
    Cyburbian mgk920's avatar
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    Quote Originally posted by Brocktoon View post
    The difference is services are not taxed at this time. The person that recovers a couch time and labor is not taxed.
    Have him tell that to the IRS on 04-15.

    Quote Originally posted by Brocktoon View post
    For services that are taxed their overall contribution to the tax system is very small. When adding a tax increase on every service it provides incentives to cheat since it is difficult to prove. Also who is going to man this army of auditors if there is no IRS?
    There will be plenty of state and federal revenuers to keep an eye on things.

    And please stop being cynical. Again, that tactic does not work against me.

    Quote Originally posted by Brocktoon View post
    Thank you for the no response on people purchasing second hand goods and the black market. It proves that the fair tax advocates do not have answers to this.
    As I have said before, the Fairtax assumes that used goods have already been taxed. Used goods in good condition will be more valuable on the resale market, encouraging thrift and recycling, a concept that is very proper and good, even to the lefty crowd.

    Quote Originally posted by Brocktoon View post
    Also thank you for not answering my sticky prices question. Stating that consumers pay taxes and not businesses still does not address that businesses are rarely able to pass along 100% of a price increase to consumers regardless of the cause of the increase. As for your dividend argument I suggest you look at the history of dividend payments of publicly traded companies the past 50 years. As for retirement savings most of that is accrued through price appreciation and not dividend income or interest on debt securities.
    If your business competitor lowers his/her prices, you will be hard pressed not to follow suit - at the peril of your sales and market share.

    Quote Originally posted by Brocktoon View post
    Here is the text of the 16th amendment to the Constitution: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
    Since the fair tax, taxes spending not income it violates the 16th amendment. Most supporters of the fair tax recognize a repeal would be necessary.
    The 16th amendment modified the clause in the Constitution prohibiting direct taxes that are not in proportion to a census or enumeration.

    The powers of Congress section in Article I, Section 8 states: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises... ...but all Duties, Imposts and Excises shall be uniform throughout the United States;"

    In Section 9, the clause "No Capitiation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken" is what the 16th Amendment was required to modify to legalize the income tax.

    Clearly, a uniform nationwide sales tax (considered an 'Excise') is allowed.

    Mike

  7. #57
    Cyburbian TexanOkie's avatar
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    Quote Originally posted by Brocktoon View post
    Here is the text of the 16th amendment to the Constitution: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
    Since the fair tax, taxes spending not income it violates the 16th amendment. Most supporters of the fair tax recognize a repeal would be necessary.
    Quote Originally posted by mgk920 View post
    The 16th amendment modified the clause in the Constitution prohibiting direct taxes that are not in proportion to a census or enumeration.

    The powers of Congress section in Article I, Section 8 states: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises... ...but all Duties, Imposts and Excises shall be uniform throughout the United States;"

    In Section 9, the clause "No Capitiation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken" is what the 16th Amendment was required to modify to legalize the income tax.

    Clearly, a uniform nationwide sales tax (considered an 'Excise') is allowed.
    We should still repeal the 16th Amendment, though.

  8. #58
    Cyburbian Brocktoon's avatar
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    Quote Originally posted by mgk920 View post
    Have him tell that to the IRS on 04-15.
    Small businesses are taxed on profits so with a good accountant they pay little corporate tax although they do pay FICA and income tax.

    There will be plenty of state and federal revenuers to keep an eye on things.
    The states enforce their tax laws not the federal tax laws. So if a state decides it is not going to tax medical care or pool cleaning then it will be the sole domain of the federal government. Since the fairtax creates a greater incentive to cheat you would have to assume the need for more auditors to investigate, especially the cash only businesses.

    And please stop being cynical. Again, that tactic does not work against me.
    If anyone is being cynical it is you my friend. Your retort to many of my questions are flip if best. All I am trying to do is have an open discussion onthe topic. For example your well worded and thoughtful response on how the excise tax in Article allows for the fair tax. I am not trying to work against you but I am trying to promote debate on the topic.

    As I have said before, the Fairtax assumes that used goods have already been taxed. Used goods in good condition will be more valuable on the resale market, encouraging thrift and recycling, a concept that is very proper and good, even to the lefty crowd.
    This proves my point of a decline in tax collection although, reuse and recyling is good for the environment, removing many taxable transactions from the economic is not if you are trying to fund the government. The 30% rate was chosen to be revenue neutral. If it fails in that attempt do we raise the rate up to whatever the revenue neutral rate is? In Arizona at 30% tax on new home construction would kill the local economy where 1 in 10 jobs are related to the construction industry.
    "If you don't like change, you're going to like irrelevance even less" General Eric Shinseki

  9. #59
    Cyburbian michaelskis's avatar
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    I have been thinking a lot about the this, looking into the tax, and I personally think that it is a great idea.

    Letís face it, the federal government is not all that good at running most things, and the tax system is one of them. Look at social insecurity, FEMA, KGB (IRS), and just about every other program. While they would still be involved, it would be to a lesser extent.

    There was a concern regarding people selling things on a black market for used goods. You are completely correct. Itís the weekend garage sale. It already happens. I for one, spend much less than what I make. So for me, this is a wonderful thing. It is a chance to send the Government less money.

    But youíre right, they must have borrowed Al Goreís calculator to figure out the percent and they should tell it like it is. Furthermore, I think that this whole thing is a sad reflection on the federal government as a whole (and many state governments). They spend too much money on programs that are not necessary. I think that there needs to be a serious audit of the federal government to cut spending on wasteful stuff. First and foremost is what the former presidents get for offices and living expenses. Follow that up by eliminating the IRS. That alone will save quite a bit.
    Not my monkey, not my circus. - Old Polish Proverb

  10. #60
    Cyburbian mgk920's avatar
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    Quote Originally posted by michaelskis View post
    I have been thinking a lot about the this, looking into the tax, and I personally think that it is a great idea.

    Let’s face it, the federal government is not all that good at running most things, and the tax system is one of them. Look at social insecurity, FEMA, KGB (IRS), and just about every other program. While they would still be involved, it would be to a lesser extent.

    There was a concern regarding people selling things on a black market for used goods. You are completely correct. It’s the weekend garage sale. It already happens. I for one, spend much less than what I make. So for me, this is a wonderful thing. It is a chance to send the Government less money.

    But you’re right, they must have borrowed Al Gore’s calculator to figure out the percent and they should tell it like it is. Furthermore, I think that this whole thing is a sad reflection on the federal government as a whole (and many state governments). They spend too much money on programs that are not necessary. I think that there needs to be a serious audit of the federal government to cut spending on wasteful stuff. First and foremost is what the former presidents get for offices and living expenses. Follow that up by eliminating the IRS. That alone will save quite a bit.
    I have been seeing some chatter, too (and I am not sure how really serious it is), for enacting a Fairtax-style tax reform at the state level in Michigan. For a state stuck in a multi-year one-state recession like that one, it might not be a bad idea for them.

    Of all of the discussions and position papers on the Fairtax that I have read, though, IMHO the most striking point that has been made is that under the current income tax, the overall cost of compliance with the law, both in the public administration of it as well as in the private record-keeping, accountants, lawyers, filling out the forms, etc, is about equal to one half of what the tax brings in as revenue to the federal government - a HUGELY inefficient way of raising the money needed to run a government and a massive drain on the nation's economy.

    The Fairtax would be so much easier and more efficient to administer and comply with that it boggles my mind.

    Mike

  11. #61
    Cyburbian CJC's avatar
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    Quote Originally posted by mgk920 View post
    Of all of the discussions and position papers on the Fairtax that I have read, though, IMHO the most striking point that has been made is that under the current income tax, the overall cost of compliance with the law, both in the public administration of it as well as in the private record-keeping, accountants, lawyers, filling out the forms, etc, is about equal to one half of what the tax brings in as revenue to the federal government - a HUGELY inefficient way of raising the money needed to run a government and a massive drain on the nation's economy.

    The Fairtax would be so much easier and more efficient to administer and comply with that it boggles my mind.

    Mike
    So...should we tackle the largest national inefficiencies caused primarily by the Federal Government (the current tax system), or tackle the largest national inefficiencies caused primarily by private industry (the Healthcare disaster) first?

  12. #62
    Cyburbian The One's avatar
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    Nice....

    Quote Originally posted by CJC View post
    So...should we tackle the largest national inefficiencies caused primarily by the Federal Government (the current tax system), or tackle the largest national inefficiencies caused primarily by private industry (the Healthcare disaster) first?
    I say we go after health care first....cause I'm getting some $$ back from the Feds at least
    Skilled Adoxographer

  13. #63
    Cyburbian TexanOkie's avatar
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    Quote Originally posted by CJC View post
    So...should we tackle the largest national inefficiencies caused primarily by the Federal Government (the current tax system), or tackle the largest national inefficiencies caused primarily by private industry (the Healthcare disaster) first?
    So to solve these problems, it seems the plans on the table are merely going to reverse the causes of the inefficiencies. Socialized healthcare will make the healthcare the largest national inefficiency caused by the Federal Government and the Fair Tax would become the largest national inefficiency caused by private industry? Did I get that right? Flat tax, root cause, and market solutions. End of debate.

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