Join the Online Tax Revolt

[loki]

http://www.onlinetaxrevolt.com/


I would tell people to read this and join if they agree. I believe that it would be a good thing if this was to come to light.

[Vekseid]

Dick Armey, oi.

To me it just comes off as an attempt at disruption.  After eight years of 'deficits don't matter' and then claiming that they matter during a liquidity crisis and deflation. Anyone who says that the flow of money should be slowed down when the flow of money is in fact the fundamental problem does not grasp what money is.

Beyond that, where is the discussion regarding what to cut, or how to reform our tax policy? Few people deny that this needs to be done - but a general protest provides no discussion. It's useless.

[loki]

Then are you saying that a place where everyone regardless whether or not they are a citizen will pay tax is a bad thing?

Right now, only the people who are citizens pay tax in the USA. That leaves out all the immigrants, illegals and anyone else who comes over here and don't become a citizen. With something like this in place anyone who purchase something will pay. There will be no more bickering about how much money someone makes or why the rich gets more tax breaks than the poor and so on. Everyone will pay, it's a simple concept where if you buy a lot then you will pay a lot and if you don't then you won't pay as much. It also would take out all the bickering about who is and isn't in the USA working and not having to pay taxes.

Another thing to think about would be that the business wouldn't have to pay more taxes. So all the ones that have left the USA to go to cheaper countries would most likely come back. Which would result in more jobs. As for the other small business, like myself, would thrive and the fact that the USA's economy hasn't completely collapsed is because of small business, like me and many others like me out there.

Also if you actually stop and think about it, a tax that everyone has to pay will generate more money for  the government besides of the fact that it would be a "better one" than we have in place. I mean, right now there are only a few compaired to the actual masses that are out there that pay. Reguardless of all the tax breaks and stimulas money that they try to get going, in the end it is just the small people and mom and pop places that seem to keep things going. So why not change things for the better or you could just sit back and complain about what is happening and not bother doing anything to help.

[DarklingAlice]

Beyond that, where is the discussion regarding what to cut, or how to reform our tax policy? Few people deny that this needs to be done - but a general protest provides no discussion. It's useless.

The people paying for this have already had the discussion, have a plan, and are now just trying to use the internet to dupe a bunch of people into basically signing a petition for a passage of the <a href=http://en.wikipedia.org/wiki/FairTax>Fair Tax Act</a>. The act is a largely absurd (to the point that it is probably unimplementable) plan to tax the rich significantly less, via charging everyone an equal 30% sales tax on all new goods they purchase in lieu of an income tax, funny how they fail to mention that...

[Schrödinger]

The people paying for this have already had the discussion, have a plan, and are now just trying to use the internet to dupe a bunch of people into basically signing a petition for a passage of the <a href=http://en.wikipedia.org/wiki/FairTax>Fair Tax Act</a>. The act is a largely absurd (to the point that it is probably unimplementable) plan to tax the rich significantly less, via charging everyone an equal 30% sales tax on all new goods they purchase in lieu of an income tax, funny how they fail to mention that...

I never quite got this. What's the exact problem Republicans have with progressive taxation of higher pay scales, anyway? Explain this to a European with a so-so understanding of economics. While I can wholly understand people hating to pay taxes, this is fair taxation of upper income brackets to get more or less the same amount of money from the same population while taxing the lesser incomes less. Why turn this around?

EDIT: VVV So it's a terrible scheme altogether. Gotcha.

[Vekseid]

Then are you saying that a place where everyone regardless whether or not they are a citizen will pay tax is a bad thing?

Right now, only the people who are citizens pay tax in the USA. That leaves out all the immigrants, illegals and anyone else who comes over here and don't become a citizen.

Everyone pays sales tax who lives in a state corrupt enough to have it. Everyone who owns property pays property tax. Everyone who works while claiming to be a citizen pays into social security and Medicaid/Medicare.

How much did you genuinely pay in income tax this year, compared to the above? I know I pretty much never have.

With something like this in place anyone who purchase something will pay. There will be no more bickering about how much money someone makes or why the rich gets more tax breaks than the poor and so on. Everyone will pay, it's a simple concept where if you buy a lot then you will pay a lot and if you don't then you won't pay as much. It also would take out all the bickering about who is and isn't in the USA working and not having to pay taxes.

Are you talking about a national sales tax? A.k.a. "The rich pay no tax, the poor pay a 50% tax, and small businesses die a slow and painful death?"

?

I pay double the sales tax rate. I pay it on a chunk of what I earn (because to my customers, it's still a cost), and I pay it again when I buy goods. A national program would basically force this to propagate across all trades - completely and utterly impossible for some businesses to even exist in such a model, as long chains which were once feasible would be destroyed.

As a fundamental barrier to trade, a sales tax effectively acts as an interperson tariff. It forces savings rather than liquidity - I'd challenge anyone to come up with a more economically destructive form of tax.

The people paying for this have already had the discussion, have a plan, and are now just trying to use the internet to dupe a bunch of people into basically signing a petition for a passage of the <a href=http://en.wikipedia.org/wiki/FairTax>Fair Tax Act</a>. The act is a largely absurd (to the point that it is probably unimplementable) plan to tax the rich significantly less, via charging everyone an equal 30% sales tax on all new goods they purchase in lieu of an income tax, funny how they fail to mention that...

No one benefits from that tax in the long run. Some rich folk with no clue about economics probably look at this: http://www.itepnet.org/wp2000/text.pdf and dream about what would happen if we did that nationally.

It'd be the collapse of America - the price of your average good would go through the roof and commerce would shut down. But at least the rich wouldn't pay taxes to the United States anymore.

[Vekseid]

I never quite got this. What's the exact problem Republicans have with progressive taxation of higher pay scales, anyway? Explain this to a European with a so-so understanding of economics. While I can wholly understand people hating to pay taxes, this is fair taxation of upper income brackets to get more or less the same amount of money from the same population while taxing the lesser incomes less. Why turn this around?

EDIT: VVV So it's a terrible scheme altogether. Gotcha.

Businesses would have the option of sourcing their goods and services outside of the United States (thank you NAFTA), paying the tax twice, or not paying the tax on income (since it would be self reported). It's like the secret plot of a foreign power to destroy America, or something. It's fundamentally horrible.

[Ket]

Then are you saying that a place where everyone regardless whether or not they are a citizen will pay tax is a bad thing?

Right now, only the people who are citizens pay tax in the USA. That leaves out all the immigrants, illegals and anyone else who comes over here and don't become a citizen.

This is not totally true. Many immigrants who are not yet full citizens but who do have work visas pay taxes. Many pay double the tax rate of the average worker because they are basically considered self-employed or contract employees, as they receive 1099's instead of W-2s. As for illegals - of course they avoid paying income taxes. One, you can't even file without a social security number or employee identification number. Attempting to attain either one would force them to make public their illegal status and risk deportation.

US Tax Code is by far from simple, and even a seasoned professional tax preparer/accountant is constantly learning as the code is ever changing. People always say "Oh, the rich pay less taxes."  No, they don't. They pay their share. Think about when you've done your taxes in the past.  Was that final amount actually that much?  I know for myself, filing single with no itemized deductions and my only credits coming from retirement account savings, I pay a mere fraction of my income.

During my years as a tax preparer I saw people from all income ranges, with all sorts of income, deductions and credits. Let me tell you about the working 'poor'. They rarely, if ever, pay taxes. Their income is so low that their personal deductions plus the standard deduction takes their adjusted gross income down to zero. Which means any and all monies they have paid into the system are refunded to them. Not only that, but those with children are offered additional credits in the form of Earned Income Credit, Child Tax Credit and Additional Child Tax credit. Which can amount to several thousand dollars in a refund, of monies that they didn't pay in (technically money coming from the pocket of the 'rich'). This doesn't account for the self-employed. That is a whole different ball game. I'm talking about those that work one or two minimum wage jobs.

When it comes to the 'rich', many of their deductions and credits are limited to certain amounts. Many people who make over a certain amount a year are forced to pay at the highest tax rate without deductions on those income overages. In all ways, the 'rich' do pay more taxes. Income, sales, property. They typically buy higher prices items which results in more sales tax. They own property worth more money, which results in higher property taxes.

I have no issues with paying income tax, federal or state. These are the monies that provide me with luxuries I enjoy every day such as city parks, roads, interstates, national parks.  They provide our federal, state and local police, fire and emergency personnel. They pay for our standing army and navy. For all that, I don't mind paying around $1,000 a year in income taxes. To me, that's a pretty good deal.

[RubySlippers]

The government could do a great deal first to keep decent jobs here or return them its called a TARIFF. See lets say Nike an American company makes a pair of shoes in China why not ,oh, slap on $50 a pair if they are imported and not if made in the US. Same for outsourcing services to India penalize the company for the lost work high enough to make sure having their services done here makes it cost effective. Taxing is well within the nations power. Same for other goods if ACME Widgets Company wants to import them slap on a Tariff and if they make them here no Tariff. Tada ... more jobs and money to get taxes from here or more taxes from imports its win win. I never liked free trade as that free its fine with peer nations where salaries and the like are mostly equal and the other nation offers something we can't make here. But unfettred borders and imports.exports forget it.

As for current taxes people want a Nanny State then pay for it, I for one don't want to reduce taxes but they should be raised say 2-10% based on their tax bracket the richest should pay 50% it won't kill them. And provide for all that is needed to live for all Americans. I never understood why Socialism is bad its a simple philosophy and seems to work you make sure everyone gets taken care of and tax sufficient to spread the wealth to make this happen. I would love a nation as stable and provides for all like some EU nations. In fact Jesus was a Socialist so as a Christian it can be seen as the most Christian form of government.

[loki]

Everyone pays sales tax who lives in a state corrupt enough to have it. Everyone who owns property pays property tax. Everyone who works while claiming to be a citizen pays into social security and Medicaid/Medicare.

How much did you genuinely pay in income tax this year, compared to the above? I know I pretty much never have.

Are you talking about a national sales tax? A.k.a. "The rich pay no tax, the poor pay a 50% tax, and small businesses die a slow and painful death?"

Actually I live in a state that I have to pay sales tax and I also pay property taxes, as for the other two I am self employed and I pay every year. Roughly I have to pay around three thousand a year each year in income taxes and sadly I am below the poverty line. But if you think it's corrupt to live in a state that makes you pay taxes with everything that you buy, then I'm a bit confused because it isn't just me that has to pay. Everyone that comes through our fair state and decides to buy something gets to pay that same tax. No questions asked, no I have money so I shouldn't have to pay or no exceptions to the rules. I don't see that tax as a bad thing since it pays for the roads, the parks and much much more.

Also I am not sure where you are getting that the rich doesn't have to pay and the poor pay more. The tax is for everyone, rich or poor. It is the same. If you want something and buy it you get the tax, if you don't want to pay the tax then don't buy anything. Plus the small business won't die a slow painful death if they have money in their pockets and people buying their goods.

Ken Hoagland on Fox News' "Huckabee" - April 3, 2010

This should explain more, but most seem to think that the rich doesn't get taxed when they do. They just make more money and have a heck of a lot more taxes on them now that it looks like that they would pay nothing. But in truth of it is that the ones with the money buy the most stuff. The rich, the illegals, heck even the drug dealers would have to pay the tax if they bought things and I can tell you that most of those people love buying things.

Also with that type of tax in place there would be no tax evasion. No one cheating on their taxes. No one would be able to pull a stunt like Wesley Snips did by saying that he wasn't a citizen and running with his money. The taxes would be paid up front, no chasing anyone down or trying to collect anything. It sounds like a damn good fix to me since about 20% of Americans really pay their taxes, the rest fall through the cracks in one way or another.


Besides this quote is something that I truly believe in ....   "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and provide new Guards for their future security."

[Serephino]

Sure, this would give people more money in their paychecks, but it would make everything cost a lot more.  Would manufacturers have to pay the tax on the materials they need?  If that's the case, then they would have to up their prices to continue to make a profit, then add the tax the buyer pays on top of that.  Would anyone be able to afford anything anymore?  And what about food?  We all have to buy that, which is why it isn't currently taxed in most states. 

My boyfriend makes a little above minimum wage, so really, he wouldn't be getting that much more.  I'm disabled, so my income wouldn't change.  Right now we can't afford to pay attention.  If you tax food which we have no choice but to buy, that would really screw us over.  It would be even worse when buying a car or an appliance.  We need a car to get around, and ours is dying.  Our washing machine is only working right now because of duct tape and a popsicle stick.  Our microwave can't melt butter.  All these things need replaced, and paying an extra national income tax will only make it harder for us to do so. 

I like the idea of taxing outsourcing and imports.  It really pisses me off that perfectly good jobs are being sent to India and China because they'll work for less.  We obviously need those jobs here.   

[Trieste]

*rubs temples* My god, it's like the "ten guys in a restaurant" all over again.

Okay, try to stay with me. Poor people don't pay into the system. They get benefits from the system. Whether it's via tax credits or simply not having to pay taxes while taking the city bus, the poor benefit from the tax system.

The rich people pay taxes, and they pay lots of them. Even if they stayed in the same percentage as the poor people, they would pay more money. As it stands, they are actually taxed at a higher percentage. So they pay lots. If they get a tax break, it's only enough to make them pay less into the system, and it's not nearly enough to offset the amount they pay in. The reason you don't get a 5% tax break like Bill Gates or whoever is because you aren't in a tax bracket that expects you to pay 25% of your income into taxes (hypothetically; I don't know the actual percentages). So Bill Gates pays 20% of his income into the system instead of 25%, Mary Jane Poverty Line pays 2% of her income into the system instead of, uh, 2%, and still gets the benefit of public servants and services. Mary Jane Poverty Line is not getting a tax break. Mary Jane Poverty Line doesn't NEED a tax break to convince her not to take her 900,000 per year salary to live happily in Mexico or something (because, in my hypothetical world, Mexico doesn't tax the wealthy). Mary Jane Poverty Line just needs to make sure she's got enough to feed her family - and because Bill Gates pays 20-fuckin'-%, she can go get food stamps if she really needs to feed herself or her kids. Not to be offensive, because there is nothing wrong with food stamps or other social subsistence programs, but do you really think they'd be funded as well as they are if the rich paid no taxes?

I personally pay in very few taxes myself, and I'm in line to get tax credits for being a student - which will probably go directly toward my education as well. Which is the point. Does the tax system need reform? Of course it does, and that is why it's always changing as mentioned above. But the current system is not as horrible as it's made out to be, and if I, with my hatred of all things mathlike, can understand it and follow what's up, I really have a hard time understanding why so many people can't seem to keep up...

[Callie Del Noire]

Here's another example.

My brother and his wife were a dual income family as he finished the bar and started working for a firm where he lives. He made points with the senior partners, got a cut of a VERY large pie and in one year went up SEVERAL TAX brackets. (as well as paying off his student loan, his wifes, their house and setting two trust funds for their kids with a very large number of zeroes)

In that year he went from paying taxes at the level my parents to the gross SALARY of my sister-in-law the year before (which is nearly six figures at the time).

He explained why and pretty much all the reasons Trieste mentioned are part of them.

[Vekseid]

Actually I live in a state that I have to pay sales tax and I also pay property taxes, as for the other two I am self employed and I pay every year. Roughly I have to pay around three thousand a year each year in income taxes and sadly I am below the poverty line. But if you think it's corrupt to live in a state that makes you pay taxes with everything that you buy, then I'm a bit confused because it isn't just me that has to pay. Everyone that comes through our fair state and decides to buy something gets to pay that same tax. No questions asked, no I have money so I shouldn't have to pay or no exceptions to the rules. I don't see that tax as a bad thing since it pays for the roads, the parks and much much more.

Are you not deducting your business expenses or something? Yes, I know it's hard being self employed, but if you are below the poverty line
http://aspe.hhs.gov/poverty/09poverty.shtml
http://www.moneychimp.com/features/tax_brackets.htm

To even owe $3k with the standard deductible you need to be making some $30k per year after all deductible business expenses. Not even counting any credits or deductions for dependents. So either you have a lot of children, or you're not doing your taxes remotely properly.

Yes, lots of aid programs are calculated from how much you earn in total - that's the crimp self employed face - but taxes should not be your problem if you are below poverty. At all.

Also I am not sure where you are getting that the rich doesn't have to pay and the poor pay more. The tax is for everyone, rich or poor. It is the same. If you want something and buy it you get the tax, if you don't want to pay the tax then don't buy anything. Plus the small business won't die a slow painful death if they have money in their pockets and people buying their goods.

People who buy their goods from Canada or Mexico instead, how much will they pay in taxes?

At 30%, it becomes cheaper for me to host in Canada. It is no longer cheaper for a Canadian to host in the United States, however, so they will also move their hosting elsewhere. You are advocating a 30% tariff on our exports. There are no words for how mindbogglingly stupid that is.

I know how the 'Fair tax' (a lie) works.

This should explain more, but most seem to think that the rich doesn't get taxed when they do. They just make more money and have a heck of a lot more taxes on them now that it looks like that they would pay nothing. But in truth of it is that the ones with the money buy the most stuff. The rich, the illegals, heck even the drug dealers would have to pay the tax if they bought things and I can tell you that most of those people love buying things.

When we refer to the rich paying nothing, we generally talk about things like Exxon Mobile's tax havens - companies that invest overseas and write them off for deductions here.

Above and beyond that though, the rich don't buy goods - they invest and build wealth. And get many of their goods for free. See the pdf I linked.

Also with that type of tax in place there would be no tax evasion. No one cheating on their taxes. No one would be able to pull a stunt like Wesley Snips did by saying that he wasn't a citizen and running with his money. The taxes would be paid up front, no chasing anyone down or trying to collect anything. It sounds like a damn good fix to me since about 20% of Americans really pay their taxes, the rest fall through the cracks in one way or another.

You are self employed, you know that your sales taxes are self reported, first and foremost. All I need to do to legally avoid the tax is buy from Canada instead. Or Mexico, but I live in Minnesota.

Worse, it additionally becomes a tax on all exports (or else there's a rather slick loophole).

The Fair Tax act is horribly, mind-bogglingly stupid. I hate income tax as much as most everyone - I'm a firm believer in property tax and tariffs for such things - but the fair tax act is economic suicide in a nutshell.

[Asuras]

At 30%, it becomes cheaper for me to host in Canada. It is no longer cheaper for a Canadian to host in the United States, however, so they will also move their hosting elsewhere. You are advocating a 30% tariff on our exports. There are no words for how mindbogglingly stupid that is.

Wouldn't the pre-tax price fall because of that, something like:

With income tax: $100 purchase price, $30 to government (income tax withholding), $70 after-tax income to employees/shareholders
With sales tax: $70 purchase price, $30 sales tax, $70 to employees/shareholders

[loki]

All I'm promoting is for the people sign up for the tax revolt to start a change in the tax system. There are at least three different groups that planned this with three different plans. The fair tax is only one of them. But they are all working for change and they will work out something to change into, however if people don't start taking a stand and sign up then nothing will ever change.


Veks: I actually make 1300 a year and my CPA is very good at her job. But what you may have forgotten that there are taxes in a employees check that are half taken care of for them. I have to pay the full amount because I am self employed. I am not below the line to where I don't have to pay taxes but I am below the 2500 mark that make me a poverty person. I have no children and am single so I only take care of myself without help from a spouse or anyone else. As for my expenses, well being a dog groomer for ten years you seem to have all you personal equipment already bought and don't really need much besides some regular sharpening that doesn't come close to making the cut off for expenses. Though I still put them in there.

But I do have to wonder if you employ anyone or if you are self employed to know how to try and get around the tax laws. Because I don't want to be audited for anything. Plus I am just wondering if you had actually read the book about the fair tax laws and how everything would work under just that one act.


Sparkling Angle: Actually your income would change due to the fact that it would be his gross income not the one after everything is taken out. So you would make more money. Plus if more good jobs come back into the USA then there would be a high likelyhood that he would be able to get an even better job that would pay more money. As for your income, if they take any taxes out of it then even you would bring in more money as well.






*and no I don't really care about how much money I do or don't make. I love my job and am very very very happy with it,but things need to change and I would like to see change happen*

[Jude]

All I'm promoting is for the people sign up for the tax revolt to start a change in the tax system. There are at least three different groups that planned this with three different plans. The fair tax is only one of them. But they are all working for change and they will work out something to change into, however if people don't start taking a stand and sign up then nothing will ever change.

There isn't a single Democrat listed on their "leaders" page, but there is a ridiculous amount of Republicans.  If you're trying to bill this as non-partisan, you're being extremely dishonest.

[Vekseid]

Wouldn't the pre-tax price fall because of that, something like:

With income tax: $100 purchase price, $30 to government (income tax withholding), $70 after-tax income to employees/shareholders
With sales tax: $70 purchase price, $30 sales tax, $70 to employees/shareholders

No.

My hosting provider would pay the additional 30% directly to all of their suppliers, who pay the additional 30% to all of theirs - on up the chain until someone leaves the country. Then I pay 30% on top of that. Any exemption you make for this becomes a loophole

The thing about income tax is it's ideally charged once on the sum total of all transactions over the course of the year. I make a purchase, someone else makes a purchase with the money I gave them for the original purchase - a dollar is circulated dozens of times over the course of the year. This multiplier is a critical factor in the strength of our economy - the slower money circulates, the more people suffer.

Now, the response is pretty straightforward - the 30% tax would rapidly drop to 15% say (including the state portion). But it's still massive, and would utterly destroy numerous industries that depend on extended chains (and disrupt innovation based on them), while at the same time propping up gray markets based on imports from Canada or Mexico.

I really wonder what upstanding economists support this mess.

[loki]

There isn't a single Democrat listed on their "leaders" page, but there is a ridiculous amount of Republicans.  If you're trying to bill this as non-partisan, you're being extremely dishonest.

I never said anything of the sort. As for all the names being republic, well as I said before they are pushing to get this whole thing into the  mix so both sides can work out a deal to make it a bill. It isn't just about the fair act proposal, it actually has many groups with different ways to fix the taxes coming together and trying to get it started. Unless you all want to just sit by and just complain about how bad the taxes are then I guess nothing will ever come to change. Sad, because it is change that people live on all the time.

[Jude]

I never said anything of the sort. As for all the names being republic, well as I said before they are pushing to get this whole thing into the  mix so both sides can work out a deal to make it a bill. It isn't just about the fair act proposal, it actually has many groups with different ways to fix the taxes coming together and trying to get it started.

The roster is overwhelmingly Republican and they're the only party on the roster with actual political power.  If this idea takes off, who's sails do you think the wind is going to be blowing into?  It may as well be a Republican anti-tax rally.  It's true you never said it was non-partisan, but you've been trying to make it sound as if this event is a gathering point for anyone who wants the tax code to change.  That's not really the case.  This event is a focal point for anyone who wants the tax codes to become more conservative.  No other outcome will result from this.

Unless you all want to just sit by and just complain about how bad the taxes are then I guess nothing will ever come to change. Sad, because it is change that people live on all the time.

Showing up to this rally because you want a more progressive tax system, to close the loopholes, or just to make the tax code simpler would be stupid.  Unless you want to add political clout to the opinion of the majority of protesters (which is your prerogative to do if you so choose), you're better off rallying under a different banner.

Personally I'd like a lot of tax deductions removed and much of the tax code reworked.  I don't think paying offering at church on Sunday should count for charity nor do I think people should get special tax brackets simply for being married.  Giving families and people with dependents a break makes absolute sense to me, but you can do that without rewarding straight couples for tying the knot (which I don't think the government should be in the business of).  And I'd be OK with the tax code including writing off expenditures which lead to an improvement in health (gym expenses and such)--maybe even giving people a small deduction for losing weight (since this would affect our healthcare system positively).  But I don't want the government to be in the business of encouraging a certain lifestyle unless that lifestyle is absolutely necessary for the perpetuation and health of our society.

If I was to show up at this event, do you think any of the pro-family conservatives would be for removing the marriage tax bracket, religious donations counting as charity, etc.?

This is a conservative tax revolt, and calling it anything else is misleading.

[Asuras]

My hosting provider would pay the additional 30% directly to all of their suppliers, who pay the additional 30% to all of theirs - on up the chain until someone leaves the country. Then I pay 30% on top of that. Any exemption you make for this becomes a loophole

This would be the scenario if, for some wacky reason, all businesses refused to cut their prices in short order:

- US hosts competing with Canadian hosts become 30% more expensive over night
- US hosts cut prices 30% to compete with Canadian hosts, even if it means running at a loss for a while, because the alternative is to go out of business.
- US hosts start demanding much cheaper supplies so that they can remain profitable.
- US suppliers cut prices because US hosts strongly demand cheaper products, because the alternative for them is also to go out of business.
- And on up the chain...

And actually none of that would happen because everyone would read the writing on the wall that they have to cut prices by 30% the day that the tax comes into effect.

And foreigners actually do pay our income taxes indirectly - US exporters have to charge more for goods because their employees demand more to make up for the income taxes that get withheld from their paychecks. Same with property taxes - landlords pass on the property taxes on to renters through higher rents, even though renters (and importers) don't pay these taxes directly. Even corporate income taxes and capital gains taxes are passed on like this. This is why (at this level) it doesn't matter whether you have sales taxes or income taxes - they all get passed on to the consumer eventually.

[Vekseid]

This would be the scenario if, for some wacky reason, all businesses refused to cut their prices in short order:

- US hosts competing with Canadian hosts become 30% more expensive over night
- US hosts cut prices 30% to compete with Canadian hosts, even if it means running at a loss for a while, because the alternative is to go out of business.

And some will go out of business, because hosting is rather slim margins, especially starting up.

- US hosts start demanding much cheaper supplies so that they can remain profitable.
- US suppliers cut prices because US hosts strongly demand cheaper products, because the alternative for them is also to go out of business.
- And on up the chain...

Well, let's look at the suppliers.

Ideally, a host is either renting DC space or owns their own. Hosts owning their own DC would have an immediate advantage in that they would no longer be paying property taxes. Large companies will like that. Small to midsized hosts won't, of course.

The host's DC (whether their own or rented) needs to provide power, supplied by the local monopoly. Something will need to specifically happen in order to guarantee a price reduction in power costs.

They'll also maintain fuel reserves for backup generators, which are diesel, the price of this is no longer driven by American demand. This is a price guaranteed to go up. Futures markets will probably ensure a smooth transition, but the price of diesel will still be ~30% higher.

They need to maintain peering agreements, which have the same limitations in regards to the market value of power commodities. The peering structure already favors megacorps, so that may be a moot point.

Labor costs are assumed to be able to be cut by 30% de facto.

Hardware, though, is largely commodity based for anything produced in the United States (things such as processors and other high-value items the US produces in the tech arena are often reimported through the gray market). Prices would not increase, since you could just source everything from Canada or Mexico. But the willful encouragement of a bad trend is certainly not a good thing.

And actually none of that would happen because everyone would read the writing on the wall that they have to cut prices by 30% the day that the tax comes into effect.

You misunderstood three quarters of my point.

When I pay income tax, now, it's once for the sum total of all transactions my business does over the course of a year. Income comes after taking expenses into account. This means that businesses with more vertical integration by definition have an edge, and businesses that handle fewer, higher margin transactions will have an easier time over businesses that handle many small margin (fast moving) transactions. Businesses with no vertical integration (IE, most startups) will have another hurdle to jump. Businesses that need to generate a lot of transactions daily - or even hourly - to sustain operations are also at risk, because they end up paying more taxes than their brethren, even if they start losing money.

For example, going back to the hosting scenario again.

One (rather ridiculous - though I've seen it) possibility to enter into is having a person by a hosting account from an account reseller, who bought the reseller account from a VPS owner, who rents the machine from a guy who bought a server from a server reseller, who bought the machines from the upstream host, who rents their datacenter space.

You might argue that that sort of insanity ought not to be reasonable and I would agree, I'm just illustrating that this gives a lot more power to vertically integrated businesses, as they aren't transactions in these cases, just, at best, differing levels of service.

The final portion you are missing:

If I do not make money, I do not pay income tax.

If I do not make money, I still have to somehow pay my self-reported sales tax.

No one will honestly tell you that tax evasion is not going to occur in this case. This isn't going to be any less disruptive - what will the policy be when a business is incapable of paying its tax obligation? In the US as is, that's not a common occurrence. But under this policy, it's going to be a concern for every single bankruptcy.

[Callie Del Noire]

Just look at the mess NAFTA did to us.

It KILLED the textile industry in the US. PERIOD. (One current Sec of State once said only 'Low paying blue collar' jobs would be lost).

Making it cost effective to outsource production has only made profits for the companies while screwing our production base.  My folks grew up in Kannapolis NC, when I was growing up the mills only stopped working for Christmas and New Years, every other time it was at least SOME spinning being done. It was though them that my dad paid for college, ditto my old brother, and several other relatives. Before the NAFTA-lypse, they were making a good living wage for that area of the state. Hell, the mills ran at least 2 shift days a week even during the worse parts of the depression.

Suddenly it was cheaper to do the work in mexico (or running production even further south and shipping it to Mexican companies. Hell the company sold the equipment off to the mexican companies after the mills were forced to shut down.

The mind BOGGLES at what would happen to what little textile production we have left if you tack a 30% sales tax on each step of the sale of materials.

[DarklingAlice]

The final portion you are missing:

If I do not make money, I do not pay income tax.

If I do not make money, I still have to somehow pay my self-reported sales tax.

This! This alone should show how absurd Fair Tax is. Hell, even if you make money up to a certain point you still don't pay income tax (although you will pay a 7.5% medicare/social security, which becomes 15.3% for the self-employed because they pay both the employers and employees sides; however, that 7.5% or 15.3% still scales with your profits).

As an extension of this you get the vastly unfair situation where now the poor are being taxed an absurd percentage of their income and the rich are being taxed almost nothing. To whit: We bought a  car this year. That car cost ~$15,000. Under FairTax we would pay taxes on that car ~$4,500 (which would be deceptively included in the car price). This is ~12% of our income. Let's say someone right at the poverty line bought that same car after much saving, they would be taxed the same amount, which is to say ~40% of their income. Now let's say someone who makes $100,000 a year buys said car and their tax becomes ~4.5% of their income. And the more money you make the smaller a percentage you pay until you in essence have no substantial portion of your income taxed. Its disgusting.

And Loki, if this is as much of a multi-group issue as you say why are the words: "Paid for by Americans for Fair Taxation" printed right at the bottom of the page? And why does the big banner at their website www.fairtax.org read: "FAIRTAX SPONSERS ONLINE TAX REVOLT". Where are the other names, other plans, etc? FairTax is not footing the bill out of some democratic idealism to open a forum for discussion they are doing this because they think they will directly benefit.

[Vekseid]

The Fairtax system includes a 'prebate' for needed goods and services. With that, it genuinely reduces the burden on the poorest (those earning under $25k per year) - from a small negative portion to something like -6%. It actually encourages the welfare state more than the current system does. I get $9k per year so long as I have a valid SS#, no questions asked.

Those making over $200k per year also save. Everyone else will be paying more.

[Asuras]

And some will go out of business, because hosting is rather slim margins, especially starting up.

Presumably adjustment issues could be minimized by implementing the sales tax gradually.

Ideally, a host is either renting DC space or owns their own. Hosts owning their own DC would have an immediate advantage in that they would no longer be paying property taxes. Large companies will like that. Small to midsized hosts won't, of course.

Landlords pass property taxes on to renters through higher rents. Everyone effectively pays property taxes, so this really doesn't have distributional implications.

The host's DC (whether their own or rented) needs to provide power, supplied by the local monopoly. Something will need to specifically happen in order to guarantee a price reduction in power costs.

All of the people who would end up paying 30% more for power (i.e., everyone) would adamantly lobby for that. It also wouldn't be an issue in places with deregulated utilities (i.e., Texas...although not New York).

They'll also maintain fuel reserves for backup generators, which are diesel, the price of this is no longer driven by American demand. This is a price guaranteed to go up. Futures markets will probably ensure a smooth transition, but the price of diesel will still be ~30% higher.

Hardware, though, is largely commodity based for anything produced in the United States (things such as processors and other high-value items the US produces in the tech arena are often reimported through the gray market). Prices would not increase, since you could just source everything from Canada or Mexico. But the willful encouragement of a bad trend is certainly not a good thing.

The impact on imports is a significant difference from the current tax regime.

When I pay income tax, now, it's once for the sum total of all transactions my business does over the course of a year. Income comes after taking expenses into account. This means that businesses with more vertical integration by definition have an edge, and businesses that handle fewer, higher margin transactions will have an easier time over businesses that handle many small margin (fast moving) transactions. Businesses with no vertical integration (IE, most startups) will have another hurdle to jump. Businesses that need to generate a lot of transactions daily - or even hourly - to sustain operations are also at risk, because they end up paying more taxes than their brethren, even if they start losing money.

For example, going back to the hosting scenario again.

One (rather ridiculous - though I've seen it) possibility to enter into is having a person by a hosting account from an account reseller, who bought the reseller account from a VPS owner, who rents the machine from a guy who bought a server from a server reseller, who bought the machines from the upstream host, who rents their datacenter space.

What kind of tax was that? The FairTax is only supposed to be paid at the final point of sale.

If I do not make money, I do not pay income tax.

If I do not make money, I still have to somehow pay my self-reported sales tax.

Which is why God said, "Let There Be Alternatives To Sole Proprietorships."

No one will honestly tell you that tax evasion is not going to occur in this case.

Whereas income taxes are a monument to transparency...

This isn't going to be any less disruptive - what will the policy be when a business is incapable of paying its tax obligation? In the US as is, that's not a common occurrence. But under this policy, it's going to be a concern for every single bankruptcy.

Businesses have ridiculous amounts of wacky tax obligations as it is - which bankruptcy courts do regularly sift through - what makes this different?

[Vekseid]

Presumably adjustment issues could be minimized by implementing the sales tax gradually.

Which at least would  point out the nonpayment issues early. It still doesn't address the overpayment issues small businesses face.

Landlords pass property taxes on to renters through higher rents. Everyone effectively pays property taxes, so this really doesn't have distributional implications.

Property taxes are frequently small compared to the loans held. There might be a small reduction in price as property taxes and insurance adjustments get handled through escrow but it will not be 30% across the board.

All of the people who would end up paying 30% more for power (i.e., everyone) would adamantly lobby for that. It also wouldn't be an issue in places with deregulated utilities (i.e., Texas...although not New York).

Why would deregulation help? This is the same industry that gave birth to the California crisis, for crying out loud.

What kind of tax was that? The FairTax is only supposed to be paid at the final point of sale.

I don't even need to leave the hosting example here: So I can get out of $100/month of tax by reselling space on each of my servers?

Which is why God said, "Let There Be Alternatives To Sole Proprietorships."

What does incorporating improve, here?

The IRS expects new businesses to operate at a loss. It actively gives you a leg up. That's not the case here - new business costs and revenue are taxed under FairTax whether you sink or sink.

Whereas income taxes are a monument to transparency...

Which is why they're withheld.

I'm still waiting to hear why this system would beat replacing all taxes with property taxes.

Businesses have ridiculous amounts of wacky tax obligations as it is - which bankruptcy courts do regularly sift through - what makes this different?

Magnitude.

[Callie Del Noire]

Name one good thing (for the consumer) that came of deregulation.

-They deregulated the Airlines and it turned to utter crap.
-I was in California when they deregulated the Power industry out there. I got to see businesses go under because they couldn't pay power bills (which EXPLODED over a very short time). I know of at least a dozen families who had to move back onto Navy housing because they couldn't afford to pay the power bills.
-How much of the current mortgage stupidity came from the lessening of regulations?

Oh yeah, deregulation is just the way to go.

If you're an exec looking for ways to inflate your bottom line without doing anything new.

[loki]

And Loki, if this is as much of a multi-group issue as you say why are the words: "Paid for by Americans for Fair Taxation" printed right at the bottom of the page? And why does the big banner at their website www.fairtax.org read: "FAIRTAX SPONSERS ONLINE TAX REVOLT". Where are the other names, other plans, etc? FairTax is not footing the bill out of some democratic idealism to open a forum for discussion they are doing this because they think they will directly benefit.

Tell me what does it really matter who started or is trying to start the ball rolling on this project? If it was done by democrats then would you do okay with it going to congress and being worked out there? The fact of the matter is that republicans are trying to start the ball rolling, however it will take BOTH parties or approve the final bill and put it into law. I mean, the health care was done that way and was rammed through by the democrats, and personally I didn't want it and I am a democrat because I am the working public. But I have found that through the years that if you see someone better to run or do things than your own party then you chose them. So I am having a big problem with caring who started this push for change since it takes both parties to mostly agree to get it anyhere. Plus in the link that I posted before, he gives the names of a few other groups in his interview.

Just look at the mess NAFTA did to us.

It KILLED the textile industry in the US. PERIOD. (One current Sec of State once said only 'Low paying blue collar' jobs would be lost).

The mind BOGGLES at what would happen to what little textile production we have left if you tack a 30% sales tax on each step of the sale of materials.

Well first off, if the drop all taxes on business and not make them pay taxes on their employees then there would be a ton of companies that would come back to the states. It would be cheaper for them to do business here then elsewhere. As it stands right now the companies that buy stuff to sell to the public are tax exempt and only the public pays tax on the items that they buy. However, they do have to pay taxes on things that they aren't selling to the public and using for themselves. It wouldn't change much except for how much the people pay and how much they have to pay for their own personal use. So they would actually make money due to the fact that they don't have to pay taxes on their business or taxes on their employees.

If I was to show up at this event, do you think any of the pro-family conservatives would be for removing the marriage tax bracket, religious donations counting as charity, etc.?

This is a conservative tax revolt, and calling it anything else is misleading.

Well actually, it would take out all the taxes on marriage and take out all the brackets. If there is no IRS then there is not taxes on people and their marriages. Plus once again, the fair tax isn't the only tax plan out there, if you really look into it you would find out that there is also the flat tax and the regan tax plans, though I'm not sure of the name of the last one I know that there are a few more different plans that are being put together. As for what other ones there are, I am not sure of their details so I can not say. But things can and will change one way or another.







Once again, there is more than one plan behind this push.

[Jude]

Tell me what does it really matter who started or is trying to start the ball rolling on this project? If it was done by democrats then would you do okay with it going to congress and being worked out there? The fact of the matter is that republicans are trying to start the ball rolling, however it will take BOTH parties or approve the final bill and put it into law. I mean, the health care was done that way and was rammed through by the democrats, and personally I didn't want it and I am a democrat because I am the working public. But I have found that through the years that if you see someone better to run or do things than your own party then you chose them. So I am having a big problem with caring who started this push for change since it takes both parties to mostly agree to get it anyhere. Plus in the link that I posted before, he gives the names of a few other groups in his interview.

Pushed through...over the course of a year.  Gee, that must've been a really tight hole the Dems shoved their Health Care Package into (I couldn't resist).  By the way, you're not a Democrat if you buy into Republican ideas in practice (as far as we can tell) and believe Republican Propaganda/Rhetoric.  The working public is not entirely Democratic, so I'm not really sure what sort of logical relationship you're claiming there.

But to answer your point, I don't care who's sponsoring the idea of tax reform, I'd only back them if I agree with the particular version that is being pushed by the people in charge.

Well first off, if the drop all taxes on business and not make them pay taxes on their employees then there would be a ton of companies that would come back to the states. It would be cheaper for them to do business here then elsewhere. As it stands right now the companies that buy stuff to sell to the public are tax exempt and only the public pays tax on the items that they buy. However, they do have to pay taxes on things that they aren't selling to the public and using for themselves. It wouldn't change much except for how much the people pay and how much they have to pay for their own personal use. So they would actually make money due to the fact that they don't have to pay taxes on their business or taxes on their employees.

Even if you dropped all taxes on business, hell lets just get rid of taxes entirely and let the government pay for services with monopoly money and assume somehow this works, the businesses STILL aren't coming back.  They went overseas because production is so much cheaper over there because manpower is cheaper.  Lower standard of living means that you can pay people lower wages and get the same work (if not more) out of them.  If you want to make America competitive again, you'd need to gut employment regulation, get rid of unions, and finally cut the wages of workers throughout the country across the board.  For as much as populists like to claim, jobs aren't exported to India because of taxes, they're exported there because labor is cheaper.  Indians are both willing to work for less money and can work for less money (because things are cheaper there).

Sure, we could tax the crap out of companies that use oversea labor or charge them ridiculous amounts to import it, but that's going to mean rising prices on goods and services throughout the country as industry switches over to using American Workers who get paid a lot more than what they're used to.  We'll get some industries back, but end up paying more for everything that's made here, so we'll have more jobs, but the dollar will buy us a lot less, and everyone's standard of living will go down.  Getting manufacturing jobs back here will raise the price of manufactured goods and services, there's no two ways about it.

The solution is obvious, high-tech industry and a college educated workforce.  The third world will always do a better job of unskilled/uneducated labor, this is just a new reality that needs to accepted in lieu of reminiscing about the past when your dad supported your entire family working in the automobile plant for GM straight out of high school.  That America is gone, the global economy killed it.

Well actually, it would take out all the taxes on marriage and take out all the brackets. If there is no IRS then there is not taxes on people and their marriages. Plus once again, the fair tax isn't the only tax plan out there, if you really look into it you would find out that there is also the flat tax and the regan tax plans, though I'm not sure of the name of the last one I know that there are a few more different plans that are being put together. As for what other ones there are, I am not sure of their details so I can not say. But things can and will change one way or another.







Once again, there is more than one plan behind this push.

But the largest plan will win out.  It's the voice of the leaders and majority that will be heard.

You're right that a 30% sales tax would cut away the marriage things I don't agree with, but it would also eliminate the idea of a dependent.  Parents would pay more taxes simply for having children (by needing to purchase things for them) instead of getting assistance for perpetuating our society.  And that's just one example of the things that hatchet-job would do.  All the other legitimate incentives would vanish as well.

[Vekseid]

The reason businesses went overseas is it's a method of tax evasion. The thing is - that same method and reasons for that tax evasion still work under Fairtax. You have a 30% tariff on all US made goods, and a legal 0% tariff on Canadian and Mexican goods.

[RubySlippers]

Its simple bring back Tariffs you know you import some good or service you pay a fat tax on it, I would do this only on companies that sent their factories overseas and enough to encourage them to bring them back. It might help making say Nike pay a $100 tariff on each pair of shoes or return that production to the United States.

[Jude]

Its simple bring back Tariffs you know you import some good or service you pay a fat tax on it, I would do this only on companies that sent their factories overseas and enough to encourage them to bring them back. It might help making say Nike pay a $100 tariff on each pair of shoes or return that production to the United States.

You'd have to get the U.S. out of every fair trade agreement it's signed in the past 20 years.

Sure we'd get jobs, but it would cost more to buy everything.

How do you think other countries will react?  They'll put tariffs on our goods as well.  Severing the ties of the Global Economy is not progress.

[loki]

Pushed through...over the course of a year.  Gee, that must've been a really tight hole the Dems shoved their Health Care Package into.

Well at least it took a year *rollseyes* but it should of and most other things do take a lot longer to get through the process, without having to have other things put in after it was pushed through to make it workable. Right now there is a stack of papers with different ideas sitting on a desk collecting dust while most of the people are complaining about tax reform. One of the ideas is the Fair Tax idea, but once again it isn't the only idea there. Also even if say they did use the Fair tax idea as a base to start from. When have you ever seen an idea that was presented to congress, the house of representatives or even the president look the exact way that it was turned in when it was signed into action? They will take the fair tax idea and pick and choose what they will keep and what they will get rid of, adding and taking away things that won't work. Heck, they could even decide to not even us the fair tax idea at all and go with another plan for their base idea. The point is that those papers are sitting there doing nothing and there are people out there that want change and want things to start now. That is what they are really pushing for, for things to stop sitting on the back burner and get moving in the right direction. How do you eat an elephant? One bite at a time, well this is the first bite. Several groups including the Fair Tax Campaign, Tea Party Express, Americans for Tax Reform and FreedomWorks are banding together physically and digitally to urge Congress to overhaul the tax code.

Even if you dropped all taxes on business, hell lets just get rid of taxes entirely and let the government pay for services with monopoly money and assume somehow this works, the businesses STILL aren't coming back.  They went overseas because production is so much cheaper over there because manpower is cheaper.  Lower standard of living means that you can pay people lower wages and get the same work (if not more) out of them.  If you want to make America competitive again, you'd need to gut employment regulation, get rid of unions, and finally cut the wages of workers throughout the country across the board.

Here's the thing, jobs will come back if the taxes would be lifted. People aren't stupid and they will go where they can make a profit, if that is in their own back yard then they will move back there. You also mention that they have a lower stander of living, well what about us now? Without jobs people are loosing their homes, people loosing everything that they have and yet you think that our stander of living hasn't changed? As for the unions, well that's a huge can of worms that I don't want to open, but I will say this. If they are given a job that actually pays verses staying unemployed, most will choose the job. If they chose not to then they have no one to blame if they loose everything because of their pride. Most want money so that they can live life and no taxes will help them with a bit more money to do that and make more jobs.

Getting manufacturing jobs back here will raise the price of manufactured goods and services, there's no two ways about it.

The solution is obvious, high-tech industry and a college educated workforce.  The third world will always do a better job of unskilled/uneducated labor, this is just a new reality that needs to accepted in lieu of reminiscing about the past when your dad supported your entire family working in the automobile plant for GM straight out of high school.  That America is gone, the global economy killed it.

That first statement is far from true. While it might raise the price of goods only 30% you keep forgetting that that government takes out more than that in your taxes. Look at you paychecks and tell me just how much more money you would get if they didn't take it out and then think about only 30% on top of something that you would buy. I can tell you that it would turn out to be less in the end to pay the 30% then it would be to pay all the taxes that we have to pay. Both the ones that you know about and all the hidden ones that they have you paying now and calling it something else.

Also you add that high-tech and college workforce would fix it? I would love to see how that would help when most people with college degrees are working in a different field than the degree is for. Plus you can't high-tech everything. There are things that can't, shouldn't and most people don't want to be high-tech. I was also wondering how you could say that keeping people in school anywhere from four to eight more years would help? School isn't cheap, so where would all that money come from if there were less jobs out there and the jobs that were you had to have college degrees for? Look at the number of college students now who will graduate and not have jobs because there isn't any out there or if they are they are already taken.

You're right that a 30% sales tax would cut away the marriage things I don't agree with, but it would also eliminate the idea of a dependent.  Parents would pay more taxes simply for having children (by needing to purchase things for them) instead of getting assistance for perpetuating our society.

Well that's the beauty of things, since the taxes would be gone they would have more money to raise their kids. Plus if you took out that little perk on the kids then you wouldn't have all the people who are on programs because they just want the breaks and just keep having kids. It would make people stop and really think about having families. They would need to actually think instead of just having kids. I'm sorry, but I am tired of people adopting kids overseas and wanting money sent to them when we have kids in our own contry who are starving, neglected and unwanted as well. I'll not go into more about this since it would get off the tax debate.

You'd have to get the U.S. out of every fair trade agreement it's signed in the past 20 years.

Sure we'd get jobs, but it would cost more to buy everything.

How do you think other countries will react?  They'll put tariffs on our goods as well.  Severing the ties of the Global Economy is not progress.

It wouldn't matter how the other contries reacted, we would have the ability to take care of our own once again. Did you know that there was a time not that long ago that we didn't need to import stuff here and that other countries bought our products? Well the best part of this would be the jobs would be back and if the jobs are back there are more product out there that would lower the demand on things which would lower prices of things so that the tax on them would weigh out nicely. It wouldn't cost more to buy everything if it's in your own back yard. The supply would be high and the demand would be lower than it is now making things cheaper. If we get back to making just about everything that we need then would could also go back to selling things to other contries and become self sufficient once again. That is what did make this country strong and it can once again. If we don't first take care of ourselves then we will collaps from the inside out and will be preyed upon by others. Jobs are very important, they will come back if the taxes are lifted and things won't cost so much that no one could afford them. That way of thinking is just unheard of. While there might not be millionairs on every corner, we will live very comfortably and become a strong nation once again. Saying things like that way is dead is far from the truth, it is still alive and well in the small business out there and the big business will come back and follow us to making a stronger nation.


http://www.huckpac.com/?Fuseaction=Blogs.View&Blog_id=3049
This is just a link, whether you totally agree with it or not, this gives you a look into the fair tax act. But please remember, THIS ISN'T THE ONLT TAX IDEA AND WON'T NECESSARILY BE THE ONE THAT WILL TRY TO BE PUT THROUGH. There will always be things changed to anything that will come up to be a bill.

[Jude]

Every group you named is a conservative group which is promoting a flat tax.  Not sure where this supposed diversity of opinion comes from.  At least one of them is a Republican organization masquerading as a grassroots effort (freedom works).  Show me a single quote where these organizations have said they don't support the fair tax and I will personally join this group.

The one part of your last post I agree with is this:

People aren't stupid and they will go where they can make a profit

Tell me, where is there more potential for profit when it comes to manufacturing?

A developing nation with citizens struggling to get by that has few regulations and cheap labor or a first-world country with a high standard of living, $8 minimum wage, unions, the EPA, and a consumption-driven society?

Whenever an employer hires someone in America, they're paying for their car, the first and second mortgage, their internet, the copious amounts of food they eat, their cellphone, cable bill, etc.  If you hire someone in India, you just have to pay for their food and the upkeep of their shanty (< exaggerated language).

How do you even propose that the U.S. goes about lowering their taxes so they can meet India's tax rates anyway?  We have more entitlements, more overhead, more social welfare programs.  Do you want to slash all of that too?

We can play the economic limbo and see if we can reduce ourselves to third world status so that we too can work long hours in a crowded factory for, or we can look towards industries that the rest of the world has yet to expand into and make money like we always have:  innovation and technology.

[Vekseid]

Several groups including the Fair Tax Campaign, Tea Party Express, Americans for Tax Reform and FreedomWorks are banding together physically and digitally to urge Congress to overhaul the tax code.

Several corporatist groups uniting under one banner to further the cause of their sponsors at your expense. No thanks.

Here's the thing, jobs will come back if the taxes would be lifted.

You could support your assertion by proving Europe doesn't exist. Most EU nations we have a trade deficit with have higher taxes, after all. Our balance of trade deficit is actually largely a factor of 1) Our need to import oil and 2) Chinese currency manipulation. Just go here: http://usdebtclock.org/

Pretty clear what the two biggest components of our deficit are! The United States would still possess a trade surplus if we ended China's currency manipulation and our dependence on foreign oil.

Taxes are not some magic vacuum cleaner that sends money off to a black hole for no conceivable purpose. By acting as a giant insurance company responsible for the entirety of its citizenry, the government promotes the development of value adding services (such as actual factory workers) over value neutral services (guards, security) and hopefully eliminating value destroying services (the health care industry as it currently exists in the United States).

People aren't stupid and they will go where they can make a profit, if that is in their own back yard then they will move back there. You also mention that they have a lower stander of living, well what about us now? Without jobs people are loosing their homes, people loosing everything that they have and yet you think that our stander of living hasn't changed?

Twenty million homes stand empty, two million people have no home. What, pray tell, is the problem, aside from protecting some greedy useless leech's score in the magic dollar game?

That first statement is far from true. While it might raise the price of goods only 30% you keep forgetting that that government takes out more than that in your taxes.

No it doesn't and you know it.

I can tell you that it would turn out to be less in the end to pay the 30% then it would be to pay all the taxes that we have to pay. Both the ones that you know about and all the hidden ones that they have you paying now and calling it something else.

For anyone making between $25k and $200k per year, this is a lie.

America's middle class will pay more, and the Fairtax proponents even admit to this.

Also you add that high-tech and college workforce would fix it? I would love to see how that would help when most people with college degrees are working in a different field than the degree is for. Plus you can't high-tech everything. There are things that can't, shouldn't and most people don't want to be high-tech. I was also wondering how you could say that keeping people in school anywhere from four to eight more years would help? School isn't cheap, so where would all that money come from if there were less jobs out there and the jobs that were you had to have college degrees for? Look at the number of college students now who will graduate and not have jobs because there isn't any out there or if they are they are already taken.

The more appropriate question is "Why is school no longer cheap?"

Another more appropriate question is "Why should people with no mathematical or economic understanding be allowed to dictate tax policy?"

I mean - seriously. It's fine if someone doesn't know the specific terms, but someone should understand basic issues like value-generating services versus value-neutral and value-destroying ones. They all add to the GDP, but they are not equal.

Well that's the beauty of things, since the taxes would be gone they would have more money to raise their kids.

Again, for anyone making between $25k and $200k per year, this is a lie.

It wouldn't matter how the other contries reacted, we would have the ability to take care of our own once again.

News flash: America can no longer act with impunity on the international scene.

There is a very legitimate reason for NAFTA.

We set it up to secure rights to Canada's and Mexico's oil. You want to cut that flow off? China will pay more with, with our dollars even.

Did you know that there was a time not that long ago that we didn't need to import stuff here and that other countries bought our products?

Yes, it would be nice to see people promoting that concept rather than antiprotectionism, China worship, Oil worship, and anti-intellectualism. That might have a chance at happening, then.

But not under your plan. You are actively sabotaging America's strength just by promoting this nonsense. It does no good to have the general American public think it's okay to violate treaties at will, some of which we get quite a lot of benefit from.

This is just a link, whether you totally agree with it or not, this gives you a look into the fair tax act. But please remember, THIS ISN'T THE ONLT TAX IDEA AND WON'T NECESSARILY BE THE ONE THAT WILL TRY TO BE PUT THROUGH. There will always be things changed to anything that will come up to be a bill.

Come up with something that's not so damned regressive and promoting of class division and it may be considered. Or point to something. But we've already read up on Fairtax. It's a war on small business, on startups, and on the middle class. If you have something else, show it.

[DarklingAlice]

That first statement is far from true. While it might raise the price of goods only 30% you keep forgetting that that government takes out more than that in your taxes. Look at you paychecks and tell me just how much more money you would get if they didn't take it out and then think about only 30% on top of something that you would buy. I can tell you that it would turn out to be less in the end to pay the 30% then it would be to pay all the taxes that we have to pay. Both the ones that you know about and all the hidden ones that they have you paying now and calling it something else.

Let's just nip this in the bud.

Unites States median household income is $44,389 (source: US Census Bureau). For the sake of simplicity we will assume that they only have standard deductions. This means that the median taxable income for a single person household would be $38,689; and the taxable income for a married (filing jointly) household would be $32,989.

So if you are single you would pay: $5,856 in income taxes. Or ~13%

If you are married (filing jointly) you would pay: $4,111 in income taxes. Or ~9%

In addition everyone pays an extra $3,395 or 7.65% for FICA and SECA.

If these households were self employed they would have to pay both sides of FICA and SECA, which is to say: $6,791 or 15.3%. However in this case they would also deduct half their self employment tax from their taxable income. Making the single household taxable income $35,294; and the married household taxable income 29,594. This would reduce their income tax owed to $5,006 (~11%)and $3,601 (~8%)respectively.

So we can see that if they aren't self employed half of all American households pay either 20.65% or 16.65%. If they are these percentages rise to 26.3% and 23.3% respectively. And this is with only standard deductions, no itemized deductions, no schedule L, no credits, no children, etc.

Thus loki's claim is demonstrably false for over half of all American households.

[loki]

Once again everyone wants to attack the fair act tax when the whole point to this thread was to get together and make a change in the tax laws as it stands now. You all said that change is necessary but everyone of you are tearing apart just one idea. A idea that might change things in the future, but right now all it is a pile of papers sitting somewhere on a desk doing nothing. You all said that you want something to stand behind though we haven't even taken the first step in a direction to make a change. Yes, we could stand here all day and tear up the fair tax when in all reality you and I both know that if the fair tax is even one of the ideas that makes it to congress it will be changed in more ways than one to make it work. Hell, it may not even be a 30% tax it may lower and only be 20% or even 15%. You don't know because nothing has happened yet. I want some change and to get that it needs to start somewhere, if not here and now then when and where? If not the way that they are providing then how? Any of you have any ideas as to how to do it, because I am almost sure that there are some Democratic ideas out there but none or no one is will to bring forward. It's always easier to tear apart someone else idea then it is to come up with one that will actually fix things and from what I have been reading you all would kill anything that might even begin before it starts.

So that leaves us where? Still in a lot of trouble, still with a ton of unemployed, still with a government that wants to increase taxes with health care. still with business leaving all the time. Where's the fix when the life that you have know falls down around you and you have no way out? It will happen if change doesn't. I would argue/debate with you until I was blue in the face, but debating an act of tax that is just an idea and not the only one out there is almost pointless. We don't know what will come of change unless you let it start. This whole debate about the fair tax idea might just be moot if they don't even decide to use it at all and even if they did you still know that things in it would change to get it past all the people that it has to get past. We all want change in things but where do we start? I believe that this is a start of something and would like to see how, if it even does, it will progress. If you want change then stand up and be counted, if you don't then you can do what you have been doing and just complain about everything.



On a personal note, in the past five years I have went through a divorce and got hit with a ton of taxes because I am self employed. I am below the standard of living poverty line and am now going to be forced to buy health insurance that I can't afford. And now even with the governments supposed help with the banks and all the hoops that you have to jump through to try and get your house redone so that you can keep it, I still lost my house. I am beyond tired of playing by their rules, doing everything right and still coming out on the shitty end of things. I want change, it's plan and simple. I still have my work and I am still making money to pay things but I have been shafted by the government enough times now that I want change. I don't blame anyone, I know the rules in place are wrong and I work hard for everything that I have gotten. But I also know that there is a time for change and that time is now.

[Jude]

I simply do not believe that a change in the tax code can make up for the difference in living wages between a third-world worker and a first-world worker, no matter how we change our tax system.

The third-world and the first-world each have their respective strengths and weaknesses.

Third-world laborers are unskilled, poorly educated, and difficult to manage.  Even if they do speak English, they have a hard time communicating with native English speakers and there are difficulty cultural boundaries for them to cross.  They will work for very little because they don't need much to support themselves and their family, and they typically do not demand the sort of benefits that usually come with full-time American Employment.

First world laborers are educated, proficient communicators with professional attitude that are versed in business culture.  You don't need to go to college to fit this group, there are many ways to receive training (tech schools, etc.) that can set you apart from unskilled laborers.  The reason a business would hire a first-worlder over a third, is that they can do things that thirders simply can't, they're easier to manage because they speak English better, there's less of a cultural barrier, and the quality of their work tends to be higher.  This is even true when you compare computer programmers from India to American Programmers; while they're both skilled, the American is going to be a better employee (who will tend to work for higher wages).

We need to play to our strengths rather than trying to compete with nations that are set up for a more Industrial-age manufacturing society.  Most of the jobs that we've lost were that type of work, and I see no reason to believe that they're coming back.  That doesn't mean we can't replace them with other jobs or that there is no room in our society for manufacturing or physical labor-based enterprises, I just don't see that ever becoming such a large source of employment in the United States again.

Manufacturing cars worked for us in the past because we were the only people who did it, now we've got the rest of the world to compete with because they've caught up in that sector.  We have the wealth and affluence that we do because we created new Industries and sold our products to the world, something that we haven't done since the Internet boom in the 90s.  Innovation is how our economy sustains itself, it's why we are where we are, Americans have always been the first to either come up with new technological trends or popularize them (in the case of the automobile); we amass our wealth by being an entrepreneurial state.

We should be focusing our resources on inventing the energy sources of the future, reducing carbon footprints, and creating a more pollution-free world.  That's clearly the next technological step, and these so called green jobs are exactly what our President thinks we should be focusing on.

Oh, and by the way?  If we find an alternate energy resource, improve energy efficiency, etc. then we will have less dependence on foreign oil.  That'll help fix the trade deficit, allow us to extract ourselves from the middle east, and give us valuable commodities to sell worldwide.

This has very little to do with taxes (though entrepreneurial and research grants/tax credits do help) and everything to do with the state of our society culturally and educationally.  If you'd like to discuss what the faults I see there are, I'd be happy to drag this to another thread, but it isn't relevant here.

EDIT:  One final point...  You've jumped around from point to point every time someone presents a decent argument against what you've said.  You're basically blanketing the thread with different claims.  First you tried to make it sound non-partisan, I showed that it isn't.  Then I pointed out that the majority of leaders are Republican, then you said it's made of different groups.  Then I pointed out that a lot of the groups are republican or at least shills for republicans and then you said that the bill change through congress so it doesn't matter.  This is a classic moving the goalpost fallacy; every time you say something that can be argued against, you just move it further out of reach.

Another example:  you make the argument that taxes can create employment, I respond, then you respond and someone else refutes some of your factual claims there to the point that it shows that taxes actually go up on the middle class (which is completely counter to the basis of your claims).  Then, after defending and arguing for the fair tax, you claim that it doesn't matter because it probably won't actually be used in that form after it goes through congress.  Do you support it or not?

[RubySlippers]

You'd have to get the U.S. out of every fair trade agreement it's signed in the past 20 years.

Sure we'd get jobs, but it would cost more to buy everything.

How do you think other countries will react?  They'll put tariffs on our goods as well.  Severing the ties of the Global Economy is not progress.

No we won't just to this to American companies and its an internal matter, to encourage companies to stay here or return factories here. And I say if China can be all protectionist we shouldreturn the favor. And what Fair Trade agreements we just sign away our security to nations with an often crappier standard of living and labor laws doing this might encourage they raise it. We could base the Tariff on the other nations labor laws and workers rights making it a tool to kick the asses of these government to treat workers better. Or lose the US as an importer.

[DarklingAlice]

On a personal note, in the past five years I have went through a divorce and got hit with a ton of taxes because I am self employed. I am below the standard of living poverty line and am now going to be forced to buy health insurance that I can't afford.

Please check your facts. The poverty line in this country, for an unmarried person, is ~$11,201 (source: Department of Health and Human Services) . The self-employment tax is not overly burdensome, and the so called 'employer's half' of it is deducted from your taxable income. Through no manipulation of the tax code can you pay 'a ton of taxes' if your income is below that amount, even if all of that income is self employment.

[Jude]

No we won't just to this to American companies and its an internal matter, to encourage companies to stay here or return factories here. And I say if China can be all protectionist we shouldreturn the favor. And what Fair Trade agreements we just sign away our security to nations with an often crappier standard of living and labor laws doing this might encourage they raise it. We could base the Tariff on the other nations labor laws and workers rights making it a tool to kick the asses of these government to treat workers better. Or lose the US as an importer.

It's probably not a good idea to enact a policy of economic aggression against a country that we owe trillions of dollars to.

[Asuras]

Which at least would  point out the nonpayment issues early. It still doesn't address the overpayment issues small businesses face.

They do anyway. Little people always suck. To compensate, we have a progressive tax structure.

Why would deregulation help? This is the same industry that gave birth to the California crisis, for crying out loud.

You were arguing that regulated utilities would not necessarily respond to structural changes in the market in setting prices...deregulating regulating utilities seems to erase this distinction, no?

Now, to go down this rabbit hole, the California energy industry was not completely deregulated. There were pricing schemes (floors mainly) that the legislature left in place that Enron manipulated...which is why this never happened in Texas (which is where Enron was based!) where the industry was completely privatized and prices floated.

I don't even need to leave the hosting example here: So I can get out of $100/month of tax by reselling space on each of my servers?

They called them "reseller permits" when I was in WA, and they call them "resale certificates" in NY and TX.

The IRS expects new businesses to operate at a loss. It actively gives you a leg up. That's not the case here - new business costs and revenue are taxed under FairTax whether you sink or sink.

Again - the main point here is that businesses either pay the tax visibly, when they pay the sales tax, or they pay it invisibly - through income taxes that they have to cough up to compensate their employees, or through sales taxes passed back up the supply chain. So if they operate at a loss here "because of the sales tax" they'd be operating at a loss anyway because of the income tax that their employees get, or the income taxes that their partners on the supply chain pay.

Which is why they're withheld.

I'm still waiting to hear why this system would beat replacing all taxes with property taxes.

It would mainly be a difference in distribution. Anything property intensive vs. anything people actually buy, so it is a question of equity.

And the import/export question is completely different if you rely on property taxes too.

Businesses have ridiculous amounts of wacky tax obligations as it is - which bankruptcy courts do regularly sift through - what makes this different?

Magnitude.

Prove this.

[loki]

A letter sent out to the Tax revolt with this info that everyone should know.

Much of the media coverage called your Online Tax Revolt Rally, a Tea Party Event. That is fine, this is the name the public knows best, the Tea Party Express was among the many organizations that participated in the rally. But we delivered hundreds of thousands of your Online Tax Revolt Demands on Congress in the morning before your event, so the Senators and Members of the House of Representatives--which is where we wanted and needed to deliver the message loud and strong--know all too well that it was you and your Avatar that delivered the biggest Tax Revolt Event ever!

And we are committed to staying together until:
Congress delivers a real, meaningful change in our tax laws, ones that deals with the ever mounting deficits which are committing our children, grandchildren and generations of Americans yet unborn to an intolerable level of taxation.
Congress delivers a tax code that can be understood by the average taxpaying American, and short enough to make reading feasible for a taxpayer--the 67,500 pages of the current tax code probably cannot be understood by the Secretary of the Treasury, the I. R. S., CPA's, economists or anyone else! Who profits from it? Lobbyists, their special interest clients, and most Members of Congress who really do not want us to understand what they are up to!
Congress delivers a system of taxation which does not cost us millions of jobs, which does not make foreign companies more competitive than American companies, which does not cost our taxpayers more than $300 billion (that's $300,000,000,000.00!) in calculation and paperwork costs just to file our taxes! Studies actually show that it small businesses pay far more to file their taxes than they pay in actual taxes. Small business drives our economy, creates most of the new jobs, and millions of Americans start or work to start to move up the economic ladder.
Congress delivers a tax system that does not restrict the Freedom of Religion by telling our pastors and other religious leaders what they can or cannot say in a House of Worship or face the loss of their tax-exempt status--a power which enables the Internal Revenue Service to utterly destroy a place of worship or even a religion with a tax ruling!

We will stick together, we will continue to be the worst nightmare of the politicians and candidates and banks and special interests and lobbyists who make billions of dollars making deals for their fat cat clients.

And we will reward those in the Congress who have the courage to stand up for the average, hard working Americans, and defeat those who will not, until these changes are made and the promises kept!



Keep the drive alive and join for change.

[Vekseid]

They do anyway. Little people always suck.

What, pray tell, is that supposed to mean?

To compensate, we have a progressive tax structure.

We have a progressive tax structure because it is a proven fact that income disparity leads to instability. Because some corporatist snob manipulates what a dollar is worth to pay his workers, does not mean they aren't paying their share, if only in the unpaid value of their labor.

You were arguing that regulated utilities would not necessarily respond to structural changes in the market in setting prices...deregulating regulating utilities seems to erase this distinction, no?

I made no distinction between regulated local monopolies and unregulated. Your second phrase makes no sense.

If the state has no ability to bar local municipalities from managing their own power arrangements, there won't be many issues, no, but that sort of thing is not ipso-facto regulation versus deregulation - anyone who attains a monopoly over delivering power in a region has full control over the market and thus is not subject to free market forces.

Now, to go down this rabbit hole, the California energy industry was not completely deregulated. There were pricing schemes (floors mainly) that the legislature left in place that Enron manipulated...which is why this never happened in Texas (which is where Enron was based!) where the industry was completely privatized and prices floated.

As a guess, Texas doesn't have local monopolies as with California, then?

They called them "reseller permits" when I was in WA, and they call them "resale certificates" in NY and TX.

That would be an issue depending entirely on what the qualifications were. In my own personal case, the state of Minnesota requires that I charge sales tax for my services, so I have no such fallback, and that's why I pay it twice.

Again - the main point here is that businesses either pay the tax visibly, when they pay the sales tax, or they pay it invisibly - through income taxes that they have to cough up to compensate their employees, or through sales taxes passed back up the supply chain. So if they operate at a loss here "because of the sales tax" they'd be operating at a loss anyway because of the income tax that their employees get, or the income taxes that their partners on the supply chain pay.

That doesn't compensate for the regressive (and welfare-sponsering) nature of the tax. I hate income, payroll, and other random taxes and fees that get levied for everything under the sun - but at least the 90% income tax bracket effectively forced reinvestment (and it showed).

There is a more subtle question about what happens if/when the fabrication and algaculture economies take off. At least with a property-based tax structure there is a natural segue into some future system there, rather than "Whoever starts with the most land wins."

It would mainly be a difference in distribution. Anything property intensive vs. anything people actually buy, so it is a question of equity.

And the import/export question is completely different if you rely on property taxes too.

With property-intensives you can deal with externalities at the source, though (assuming it's in addition to tariffs). Doing that at the sale end is difficult enough already (and by definition impossible with a flat sales tax).

Prove this.

Prove? Right now my expenses are subtracted from my income before I pay taxes. Depreciation, startup deductions... The IRS as it is now is extremely eager to see new businesses get on their feet.

Sales taxes have no such grace. You pay your monthly, quarterly or annual obligation, lie about it, get fined or go to jail. It adds a 30% cost to the startup of each and every new business.

To me, that actually looks like the intent of it - to freeze currently extant businesses in place and make it that much harder for new ones to start up.

[Asuras]

We have a progressive tax structure because it is a proven fact that income disparity leads to instability. Because some corporatist snob manipulates what a dollar is worth to pay his workers, does not mean they aren't paying their share, if only in the unpaid value of their labor.

This "instability" is due to the poor and middle class and small businessmen demanding their fair share...which was my point - they are provided compensation. Isn't that what I said?

I made no distinction between regulated local monopolies and unregulated.

A) How many unregulated monopolies are there?
B) Are there so many as to be substantial to this argument?
C) Even monopolies have to respond to demand.

As a guess, Texas doesn't have local monopolies as with California, then?

Neither Texas nor California had energy monopolies.

That would be an issue depending entirely on what the qualifications were. In my own personal case, the state of Minnesota requires that I charge sales tax for my services, so I have no such fallback, and that's why I pay it twice.

There is no resale certificate in MN?

There is a more subtle question about what happens if/when the fabrication and algaculture economies take off. At least with a property-based tax structure there is a natural segue into some future system there, rather than "Whoever starts with the most land wins."

With property-intensives you can deal with externalities at the source, though (assuming it's in addition to tariffs). Doing that at the sale end is difficult enough already (and by definition impossible with a flat sales tax).

Setting aside how fanciful and far-off that is, a sales tax would still be more equitable than a property tax. A reasonable example is a rich yuppie who buys expensive organic food vs. a cash-strapped working-class American who buys what he can at Wal-Mart...the property taxes will be the same acre for acre, and thus profoundly regressive against the working class.

Fine by me though.

Prove? Right now my expenses are subtracted from my income before I pay taxes. Depreciation, startup deductions... The IRS as it is now is extremely eager to see new businesses get on their feet.

Sales taxes have no such grace. You pay your monthly, quarterly or annual obligation, lie about it, get fined or go to jail. It adds a 30% cost to the startup of each and every new business.

To me, that actually looks like the intent of it - to freeze currently extant businesses in place and make it that much harder for new ones to start up.

And right now you pay 30% more in wages (if you have employees) or in costs (which eventually are paid out as wages). This tax is there regardless of where it's paid, it's just hidden in your invoices and payrolls.

[Vekseid]

This "instability" is due to the poor and middle class and small businessmen demanding their fair share...which was my point - they are provided compensation. Isn't that what I said?

No:

They do anyway. Little people always suck. To compensate, we have a progressive tax structure.

The instability is due to the increased spread of illness, the increased funding for the protection of wealth rather than the production of new wealth, the support of nonproductive classes beyond the need for them, etc.

A) How many unregulated monopolies are there?
B) Are there so many as to be substantial to this argument?
C) Even monopolies have to respond to demand.

The point was that it would need to be addressed, not that it couldn't be, and that many of them will fight it. It's still a cost without a guaranteed trivial outcome.

There is no resale certificate in MN?

It's still a retail exemption certificate. A naive transference of the rules there would give me a rather easy out for a chunk of my hosting fees.

But still - as a service provider in my original business, it's useless. I don't maintain inventory, I provide a service that Minnesota requires me to pay a sales tax for. Serious pain.

Setting aside how fanciful and far-off that is, a sales tax would still be more equitable than a property tax. A reasonable example is a rich yuppie who buys expensive organic food vs. a cash-strapped working-class American who buys what he can at Wal-Mart...the property taxes will be the same acre for acre, and thus profoundly regressive against the working class.

Huh? Property tax in Minnesota at least is based off of market value, in addition to homesteading, which would certainly carry up to a national system (like Fairtax's 'prebate'). Ideally, the exemption would carry into a second property and promote small business development. The self-reinforcing strength of local economies is also important to stability, after all.

The idea being, paying taxes for what you are actually having protected

And right now you pay 30% more in wages (if you have employees) or in costs (which eventually are paid out as wages). This tax is there regardless of where it's paid, it's just hidden in your invoices and payrolls.

Erm. I would only pay about 15% more (payroll tax) for an employee unless I paid her enough that her deductions and credits did not nearly wipe it all out in her refund. She'd get more via the prebate, yes, but if I wanted to pay her a decent wage (much more than $2k/month), her tax burden eventually increases under Fairtax.

Which seems to be the point.

In addition, I'm not paying 30% of everything I take in terms of revenue, either. The number this year was negligible in comparison (almost as if EIC and MWP were designed to take the pain out of the self employment tax period), while I would under Fairtax, and I'd still be paying for it in goods and services.

[Noelle]

Just thought I'd drop this here.

[RubySlippers]

There was talk eariler we should focus on college level, hit-techor skilled jobs over labor heavy. I have to point out a simple fact if you take 99 students of the same social background and economic background lets say middle class tradespeople and mid-level professionals this is very likely going to happen:

33 in any one area will be above average they may have better skills in math, or read better, or be socially outgoing or be a good athelete or more artistic etc.

33 will be average maybe struggle a bit or not but fall into the median level in areas above.

33 will be below average and its not even fair to look at them being considered for that area.

But not all are equal in our society over say the 50's for the major ones now mathematics skill, use of language and literacy and science are all elevated over other areas since these are college focus and say being socially gifted or artistic is not.  So saying EVERYONE will be able to go to college leaves out two thirds of students who may have some talent or not but not on par with the needs of a bachelors degree or higher education. What is going to happen if this trend continues we will have a third doing well, a third getting by maybe in a skilled trade or a profession demanding a two-year degree and shitting on the rest. This bottom group used to go to work in factories and make a decent living not anymore. And the jobs they can get amount to bottom dead end jobs even if they work hard and are good employees. What is this fact going to do on taxes when half of our students and workers fall into lower wage employment permanently. Taking out those to this 33 low performers in math say that includes thos that have middling math skills and might get a two-year degree earning more but still might be dead end in employment long term at some point.

This tax situation for me is simple we have a government doing lots of things, we have a safety net and we must pay for that with taxes one way or another. I would favor a VAT over what we have now and measures to keep or bring back factory work here regardless of what other nations do. Free trade is a stupid concept that is not realistic when we have a higher standard of living than some third world shit hole. It may work with two nations roughly equal in a standard of living.

I have another idea over a tariff, just have a Comparable Income Loss Tax say they Could make a Widget here for $20 a unit but make one in Acmestan for $2, just take the difference to the American company if $18 since they could have offered the job here but opted not to. If they build them in Germany and its also $20 or more than fine no tax.

[Asuras]

The instability is due to the increased spread of illness, the increased funding for the protection of wealth rather than the production of new wealth, the support of nonproductive classes beyond the need for them, etc.

What "nonproductive classes?" What "protection of wealth?" What does this have to do with instability?

Now on health....fine, I'm completely for health care reform.

The point was that it would need to be addressed, not that it couldn't be, and that many of them will fight it. It's still a cost without a guaranteed trivial outcome.

Is there ever a "guaranteed trivial outcome" in politics?

It's still a retail exemption certificate. A naive transference of the rules there would give me a rather easy out for a chunk of my hosting fees.

But still - as a service provider in my original business, it's useless. I don't maintain inventory, I provide a service that Minnesota requires me to pay a sales tax for. Serious pain.

I don't understand - do you resell or don't you?

Huh? Property tax in Minnesota at least is based off of market value, in addition to homesteading, which would certainly carry up to a national system (like Fairtax's 'prebate'). Ideally, the exemption would carry into a second property and promote small business development. The self-reinforcing strength of local economies is also important to stability, after all.

The idea being, paying taxes for what you are actually having protected

You are protected for more than real estate. If there were a national property tax, I would:

A) Move back to Texas, where land is fucking cheap.
B) My business would also move back to fucking Texas.
C) We'd pay virtually nothing in property taxes since office space costs half as much
D) Meanwhile, the tax burden would be passed on to people who purchase real estate-intensive items...food would be a good example.
E) Luxury goods like...really big fancy TVs wouldn't be so affected since more of the cost goes to engineering, which is not real estate-intensive.

Hence the regressiveness of a property tax.

Erm. I would only pay about 15% more (payroll tax) for an employee unless I paid her enough that her deductions and credits did not nearly wipe it all out in her refund. She'd get more via the prebate, yes, but if I wanted to pay her a decent wage (much more than $2k/month), her tax burden eventually increases under Fairtax.

Which seems to be the point.

I don't really care about the size/structure of the prebate - that can be changed to make the tax more or less progressive. I agree that the FairTax programme that the nuts in Congress suggested raises the tax burden on the middle class and that isn't justified.

In addition, I'm not paying 30% of everything I take in terms of revenue, either. The number this year was negligible in comparison (almost as if EIC and MWP were designed to take the pain out of the self employment tax period), while I would under Fairtax, and I'd still be paying for it in goods and services.

Right, but I'll say it again:

You may not be paying these taxes yourself, but in the costs of the goods and services you purchase, you are paying these taxes indirectly. So, yeah, maybe it's 5% for you personally, but the other 25% is hidden in the cost that you pay out to employees and in your personal expenses.

[DarklingAlice]

Asuras, you seem to be repeatedly citing this 25-30% "hidden tax" figure. However you are very vague on it's source. What does this tax, specifically, consist of? What is the source of your information? Maybe you have mentioned, and I just missed it. But if you are going to keep insisting on this figure some data would be nice.

[Asuras]

US GDP is about $15 trillion, total government revenue (i.e., taxes) is about $5 trillion (from here)...5 divided by 15 is around...

The reason I say these taxes are "hidden" (and I'm not saying that conspiratorially) is because they are reflected downstream in the supply chain. It's simple: a tax raises the cost of something. An income tax raises the cost of labor. If the cost of an input (labor) goes up, businesses will raise the price of what they sell. You won't see it, but that difference in price is the hidden income tax.

[Jude]

I always see the argument put forth that if taxes on businesses went up, they would raise their prices correspondingly to reflect that increased tax, thereby passing on the tax to the consumer.  It makes sense on a very guttural level, but I'm not sure it's actually valid.  Corporations do very careful research to determine what they can get away with when it comes to pricing their products, if they could raise the price and keep their sales consistent, they would even without the tax being in the picture.

When a new tax is introduced, would they like to increase prices and pass it along the consumer?  Yes.  Is it always viable to do so?  No.  Sometimes doing so would mean a cut in the percentage of units they can move, and thus an overall drop in profitability caused by a price increase.  They use market research and mathematical modeling to find the "sweet spot" between supply and demand so that they can charge the optimum amount to lure in the perfect amount of people; too many customers priced out means fewer sales and too cheap of a product means too little profit per item sold.

There's a decent chance that an increase of taxes wouldn't effect the prices on commodities and entertainment products at all (along with everything else it's priced in the favor of business), and that a tax decrease wouldn't lead to falling prices.

Everytime someone proposes doing something to help businesses be more profitable because it's going to somehow create jobs I roll my eyes.  Could they use that increased profitability to invest new infrastructure and hire more employees?  Yes.  They could also turn it around and pay a percentage of it in bonuses, dividends, and raise wages of their executives--or use it in other dubious means.  Sometimes more profit just means more profit.

[Asuras]

I'm not arguing that the entire tax is passed onto the consumer - the deadweight loss of a tax is borne by both producer and consumer. But the part that's borne by the producer is still a hidden tax that the shareholders pay through reduced dividends and equity.

[Vekseid]

What "nonproductive classes?" What "protection of wealth?" What does this have to do with instability?

Pension class, financial class, celebrity class, etc. People who either produce nothing or nearly nothing compared to the amount of income they 'earn', so their wealth is artificially propped up by the remainder of society.

Is there ever a "guaranteed trivial outcome" in politics?

Sure - a lot of political measures are enacted or avoided based on the amount of perceived resistance they will generate.

I don't understand - do you resell or don't you?

I don't, but I'm still required to charge sales tax. Not sure what's difficult to understand about that, beyond 'that sucks'.

You are protected for more than real estate. If there were a national property tax, I would:

A) Move back to Texas, where land is fucking cheap.
B) My business would also move back to fucking Texas.
C) We'd pay virtually nothing in property taxes since office space costs half as much
D) Meanwhile, the tax burden would be passed on to people who purchase real estate-intensive items...food would be a good example.
E) Luxury goods like...really big fancy TVs wouldn't be so affected since more of the cost goes to engineering, which is not real estate-intensive.

A, B & C: So? That's not going to be true for everyone. That is actually part of the intent, somewhat. Combine with a suitable tariff and externality-based exemptions and penalties, and people are paying directly for what they do and receive in terms of benefits.
D & E: A major part of the idea is to directly tack externality costs onto the property used, both pro and con - credits for garden areas, farms, areas left to nature, penalties for environmental costs. We need to rethink our agricultural system anyway.

Hence the regressiveness of a property tax.

Not sure why you're even making the argument considering Fairtax openly admits that it is in fact regressive and intends to address it in much the same manner. The reason I argue for property tax instead is it prevents evasion issues and the justification for providing things like homestead exemptions, etc. are much more straightforward and logical than promoting the welfare class still further.

I don't really care about the size/structure of the prebate - that can be changed to make the tax more or less progressive. I agree that the FairTax programme that the nuts in Congress suggested raises the tax burden on the middle class and that isn't justified.

To me it comes across as simple welfare promotion and active class division.

Right, but I'll say it again:

You may not be paying these taxes yourself, but in the costs of the goods and services you purchase, you are paying these taxes indirectly. So, yeah, maybe it's 5% for you personally, but the other 25% is hidden in the cost that you pay out to employees and in your personal expenses.

I think that if/when the day comes that I'd be paying a ~30+% tax burden to an employee I'd be doing pretty well for myself.

Regarding goods and services - right now those are all based off of an income - expenditures model, minus the state sales tax. So a random Hollywood actor or football star pays their ~40%, but given my consumption of the goods and services they produce (effectively zero) - I'm not paying 30% for those. The same goes for most high-markup items, come to think of it.

I'm not arguing that the entire tax is passed onto the consumer - the deadweight loss of a tax is borne by both producer and consumer. But the part that's borne by the producer is still a hidden tax that the shareholders pay through reduced dividends and equity.

That's only going to be fully true if the company and consumer in question have no commiserate gain from the tax they spend, which to a degree is somewhat the point of having taxes in the first place. The US government is a giant insurance company with an army.

[Asuras]

Pension class, financial class, celebrity class, etc. People who either produce nothing or nearly nothing compared to the amount of income they 'earn', so their wealth is artificially propped up by the remainder of society.

By "pension class" I'll assume you're talking about trust fund babies and not retirees, who I figure probably deserve retirement...fine.

With celebrities...if they didn't produce millions of dollars of value for customers, film companies, record companies, whoever - they'd hire someone else. There is no shortage of people wanting to be actors or rock stars. So what I think you mean is not that they produce nothing, but that their wealth is serendipitous. Fine.

As someone who works in finance and just got home from a 14-hour day, I think that our usefulness to society is somewhat misunderstood.

Sure - a lot of political measures are enacted or avoided based on the amount of perceived resistance they will generate.

And I would argue that a 30% increase in price on something consumed by every voter controlled by a government-sponsored monopoly would provide such provocation.

I don't, but I'm still required to charge sales tax. Not sure what's difficult to understand about that, beyond 'that sucks'.

Because if you resold you could use reseller certificates to get out of the sales tax. Otherwise I don't understand your complaint. If you're the end user and you can't be bothered to resell it, then yeah - "that sucks."

A, B & C: So? That's not going to be true for everyone. That is actually part of the intent, somewhat. Combine with a suitable tariff and externality-based exemptions and penalties, and people are paying directly for what they do and receive in terms of benefits.

D & E: A major part of the idea is to directly tack externality costs onto the property used, both pro and con - credits for garden areas, farms, areas left to nature, penalties for environmental costs. We need to rethink our agricultural system anyway.

Sure - the goal of fees and subsidies is to penalize and compensate externalities. Excellent principle. Let Congress get a hold of it and you have an insanely complicated tax code full of loopholes for anyone who can buy a legislator. Do you have prebates for people with low incomes? Remember that these property taxes will be passed onto them through higher rents.

Not sure why you're even making the argument considering Fairtax openly admits that it is in fact regressive and intends to address it in much the same manner. The reason I argue for property tax instead is it prevents evasion issues and the justification for providing things like homestead exemptions, etc. are much more straightforward and logical than promoting the welfare class still further.

Whereas you'll have a miasma of subsidies for farmers and whoever else to make your tax less regressive. The sales tax actually reflects what people purchase.

And I don't know where you get this notion that it "prevents evasion issues" - property appraisal is a crapshoot. Ask any realtor.

To me it comes across as simple welfare promotion and active class division.

And the alternative is...what? This is an unavoidable consequence of making a tax more progressive.

That's only going to be fully true if the company and consumer in question have no commiserate gain from the tax they spend, which to a degree is somewhat the point of having taxes in the first place. The US government is a giant insurance company with an army.

Yes, and you miss the point entirely...the deadweight loss is the economic cost of the tax alone, obviously there is some intended benefit on the other side. The matter is to minimize those economic costs and arrive at an equitable distribution of the burden.

[Vekseid]

By "pension class" I'll assume you're talking about trust fund babies and not retirees, who I figure probably deserve retirement...fine.

Both, really. Whether or not they deserve retirement is a different facet than the fact that they are not producing, yet still consuming resources.

My main concern with the retirees as a class is their relative size versus the workforce. As the average lifespan creeps towards infinity, if the labor time devoted to maintaining them remains constant, there will be a problem unless we move to a fully automated economy (which brings us back to the 'whoever starts with the best land wins' problem).

With celebrities...if they didn't produce millions of dollars of value for customers, film companies, record companies, whoever - they'd hire someone else. There is no shortage of people wanting to be actors or rock stars. So what I think you mean is not that they produce nothing, but that their wealth is serendipitous. Fine.

As someone who works in finance and just got home from a 14-hour day, I think that our usefulness to society is somewhat misunderstood.

I'm primarily referring to people like John Paulson and other sorts who profited from actually helping to engineer the last economic collapse. Even still, that's no justification for the usury of the modern banking system. It's not meant to be for buying a company, selling off its assets and letting the husk fall into bankruptcy while getting off the hook for intentional mismanagement and to hide behind 'tort reform' to protect from legal ramifications.

To whit, the purpose of the financial sector is to be useful to society and not make use of it.

Because if you resold you could use reseller certificates to get out of the sales tax. Otherwise I don't understand your complaint. If you're the end user and you can't be bothered to resell it, then yeah - "that sucks."

I'm still making business use of many of said goods, however. But it moves from being an expense to a direct tax liability in this case.

Sure - the goal of fees and subsidies is to penalize and compensate externalities. Excellent principle. Let Congress get a hold of it and you have an insanely complicated tax code full of loopholes for anyone who can buy a legislator. Do you have prebates for people with low incomes? Remember that these property taxes will be passed onto them through higher rents.

Not sure what the point of that is - this is all indulging in fantasy until we can quash the corruption inherent in Congress in the first place. In the case of rent, the intent would be to heavily incentivize rent-to-own programs. Nothing promotes stability quite like land ownership.

Whereas you'll have a miasma of subsidies for farmers and whoever else to make your tax less regressive. The sales tax actually reflects what people purchase.

And I don't know where you get this notion that it "prevents evasion issues" - property appraisal is a crapshoot. Ask any realtor.

At least it requires a third party as-is and has an industry already developed around that, and is generally normalized to actual sales going on at the time.

And the alternative is...what? This is an unavoidable consequence of making a tax more progressive.

There are plenty of ways to go about it without handing out potentially inflationary cheques for no productive labor. Flat income tax starting at $50k (ie, 0% below 50k) + some exemption from children comes to mind. Progressive != rewarding people whether or not they work. There is also a difference between providing needed goods and services for the poor, and just giving them the flat cash value.

Not that using inflation as a part of 'revenue' is in and of itself a diabolical horror to be avoided at all costs, just that for the United States, it is more politically risky. But everyone should be responsible for some minimum level of production until the required level of human participation in the labor market is in fact zero. And from a personal perspective, I'm more concerned about the existential risk that sort of development represents (whomever starts with the best wins and even if they mean well pray they don't fuck up), so I consider policy accordingly.

[Asuras]

My main concern with the retirees as a class is their relative size versus the workforce. As the average lifespan creeps towards infinity, if the labor time devoted to maintaining them remains constant, there will be a problem unless we move to a fully automated economy (which brings us back to the 'whoever starts with the best land wins' problem).

I will agree with you that seems quite odd that someone can accumulate enough wealth that they can literally stop working forever. It seems particularly egregious if the beneficiary had nothing to do with generating that wealth, and this generates and perpetuates inequality without any incentives for being productive. And I agree that sales taxes (or property taxes for that matter) do not address that problem.

I'm primarily referring to people like John Paulson and other sorts who profited from actually helping to engineer the last economic collapse.

If you mean outright fraudsters...okay, yeah, they're counterproductive, but I dispute that the class of fraudsters is the same as the financial class.

Even still, that's no justification for the usury of the modern banking system. It's not meant to be for buying a company, selling off its assets and letting the husk fall into bankruptcy while getting off the hook for intentional mismanagement and to hide behind 'tort reform' to protect from legal ramifications.

Typically if a firm does this - buys out a company and dismantles it - it's because that company was unprofitable to begin with. Otherwise they'd keep reaping in the profits that the company makes.

Not sure what the point of that is - this is all indulging in fantasy until we can quash the corruption inherent in Congress in the first place. In the case of rent, the intent would be to heavily incentivize rent-to-own programs. Nothing promotes stability quite like land ownership.

My point here is that all these programs intended to make the property tax less regressive end up A) complicating the tax code, which benefits anyone with a lobbyist and B) pretty much end up emulating the sales tax.

At least it requires a third party as-is and has an industry already developed around that, and is generally normalized to actual sales going on at the time.

Sure, but I'm not convinced that this is more transparent and less prone to abuse and avoidance than a sales tax. You can get the appraisal fudged in at least as many ways as you can hide sales receipts.

There are plenty of ways to go about it without handing out potentially inflationary cheques for no productive labor.

If the government were printing out cash to people, then yeah, that would be inflationary - but almost certainly this would be just like we do now with welfare payments (and any other spending) which is made out of tax receipts and borrowing. That wouldn't be inflationary.

There is also a difference between providing needed goods and services for the poor, and just giving them the flat cash value.

Right, but we're talking about more than just poverty relief, we're talking about making the tax progressive for working class and middle class people. For that I'm not sure that there's an alternative to cash.

But everyone should be responsible for some minimum level of production until the required level of human participation in the labor market is in fact zero. And from a personal perspective, I'm more concerned about the existential risk that sort of development represents (whomever starts with the best wins and even if they mean well pray they don't fuck up), so I consider policy accordingly.

I definitely like the principle - ironically none of these taxes - sales taxes, property taxes, or even income taxes and capital gains taxes - actually attack the issue that someone can accumulate enough wealth that they can live off the interest/dividends/capital gains indefinitely. The estate tax (which I really like) is almost the only one that does, but since it only applies when someone dies, it's still possible to have someone who can spend their entire life (or at least a substantial part of it) not working.

The only one that would do that would be a direct wealth tax - a tax that took some percentage of all assets. That would be a tax on savings. So that a trust fund baby with ten million dollars in the bank would lose a million in taxes each year just for having it there.

[Zakharra]

Quote from: Vekseid

   

But everyone should be responsible for some minimum level of production until the required level of human participation in the labor market is in fact zero. And from a personal perspective, I'm more concerned about the existential risk that sort of development represents (whomever starts with the best wins and even if they mean well pray they don't fuck up), so I consider policy accordingly.

I definitely like the principle - ironically none of these taxes - sales taxes, property taxes, or even income taxes and capital gains taxes - actually attack the issue that someone can accumulate enough wealth that they can live off the interest/dividends/capital gains indefinitely. The estate tax (which I really like) is almost the only one that does, but since it only applies when someone dies, it's still possible to have someone who can spend their entire life (or at least a substantial part of it) not working.

The only one that would do that would be a direct wealth tax - a tax that took some percentage of all assets. That would be a tax on savings. So that a trust fund baby with ten million dollars in the bank would lose a million in taxes each year just for having it there.

You are both assuming that the person isn't doing any actual work. They might have good stocks and accountants that take care of their money flow. The fact that a person can make enough money to live without having to do work for awhile, for years maybe, isn't a reason that person should be punished.

To have a tax on wealth per year would be prohibitive and punishing, especially if it is only applied to the 'wealthy'. Say that 'wealthy' starts at $150,000. By the 10% tax, that person looses $15,000 per year of their assets just because.  Assuming they make enough to earn that $15k back, they'd lose it again.

This is also assuming that income taxes are removed too. Add that in, the tax becomes even more of a burden.

[Secretwriter]

This, in theory, is a good idea.  But so was communism and look what that got everyone.  Everyone was supposed to work the same and get the same. It didn't work out...

[Vekseid]

If you mean outright fraudsters...okay, yeah, they're counterproductive, but I dispute that the class of fraudsters is the same as the financial class.

While I realize that, I'd point out that the proliferation of fraud and things that should be fraud in the financial sector is beginning to taint the entire industry (again).

To put it more bluntly, is the money you make (here I'm using 'you' as a hypothetical lender in a typical financial situation and pretending that the agents of SauronMonsanto and co aren't a bigger problem) on the spread of a loan for a farmer to buy seeds, fertilizer, etc. more important than the farmer's ability to make food for thousands of people?

The financial industry is supposed to provide liquidity, smooth out chaos, etc. The idea behind it is great - but it's a service. It is not more important than agriculture or manufacturing, much less the rest of the economy combined as is nearly the case right now.

My point here is that all these programs intended to make the property tax less regressive end up A) complicating the tax code, which benefits anyone with a lobbyist and B) pretty much end up emulating the sales tax.

Sure, but I'm not convinced that this is more transparent and less prone to abuse and avoidance than a sales tax. You can get the appraisal fudged in at least as many ways as you can hide sales receipts.

Not entirely. Eventually we're going to start using satellites to aid in apportioning land.

Then again you can do the same thing with currency by handling the tax at the transaction level itself, and controlling all or most transaction methods.

Or a combination (tax based on the distance involved in the transaction, etc).

If the government were printing out cash to people, then yeah, that would be inflationary - but almost certainly this would be just like we do now with welfare payments (and any other spending) which is made out of tax receipts and borrowing. That wouldn't be inflationary.

The thing is you don't need to work for the prebate, and it doesn't in and of itself involve ending or reforming the current issues with welfare. So we'll be supporting even more non-laborers, meaning less gets produced - not what we want to happen (avoiding the discussion of producing better things which is really 'other thread' material).

Right, but we're talking about more than just poverty relief, we're talking about making the tax progressive for working class and middle class people. For that I'm not sure that there's an alternative to cash.

Cash for cash earned I could stomach. Goal being to pull people out of poverty, not put a boot on their head when they start to make something.

I definitely like the principle - ironically none of these taxes - sales taxes, property taxes, or even income taxes and capital gains taxes - actually attack the issue that someone can accumulate enough wealth that they can live off the interest/dividends/capital gains indefinitely. The estate tax (which I really like) is almost the only one that does, but since it only applies when someone dies, it's still possible to have someone who can spend their entire life (or at least a substantial part of it) not working.

The only one that would do that would be a direct wealth tax - a tax that took some percentage of all assets. That would be a tax on savings. So that a trust fund baby with ten million dollars in the bank would lose a million in taxes each year just for having it there.

Not sure why property taxes wouldn't be able to do that? That was sort of the point - provide a very comfortable homestead exemption - the needed property taxes to actually support the government apparatus as is would reshape the ownership map rather drastically. Give lots of breathing room even - let people take loads of time off. We're at something insane ridiculous now like 10% of the able-bodied labor force supports the whole damned population's basic needs and that number is only going down unless the kooks get their way.

On a wealth tax, I would give them the same earned income breaks the poor should get. Managing a lot of resources is a needed skill, after all.

You are both assuming that the person isn't doing any actual work. They might have good stocks and accountants that take care of their money flow. The fact that a person can make enough money to live without having to do work for awhile, for years maybe, isn't a reason that person should be punished.

To have a tax on wealth per year would be prohibitive and punishing, especially if it is only applied to the 'wealthy'. Say that 'wealthy' starts at $150,000. By the 10% tax, that person looses $15,000 per year of their assets just because.  Assuming they make enough to earn that $15k back, they'd lose it again.

This is also assuming that income taxes are removed too. Add that in, the tax becomes even more of a burden.

You aren't even reading his argument. Not 'years'. Forever. $150k is such a trivially pointless amount of money in this scheme - no one who thinks a million dollars is a lot of money would be affected.

[Asuras]

To put it more bluntly, is the money you make (here I'm using 'you' as a hypothetical lender in a typical financial situation and pretending that the agents of SauronMonsanto and co aren't a bigger problem) on the spread of a loan for a farmer to buy seeds, fertilizer, etc. more important than the farmer's ability to make food for thousands of people?

Well, if the farmer needs a loan then (here comes the tautology) without the loan the food wouldn't exist either. So to a farmer that needs a loan to plant crops the financial sector is just as necessary as the seeds and fertilizer.

The financial industry is supposed to provide liquidity, smooth out chaos, etc. The idea behind it is great - but it's a service. It is not more important than agriculture or manufacturing, much less the rest of the economy combined as is nearly the case right now.

The way that I look at the financial sector (and naturally it is biased) is that it is the allocator of humanity's economic resources at the highest level, deciding which projects to invest in throughout the economy. That strikes me as of some importance.

The thing is you don't need to work for the prebate, and it doesn't in and of itself involve ending or reforming the current issues with welfare. So we'll be supporting even more non-laborers, meaning less gets produced - not what we want to happen (avoiding the discussion of producing better things which is really 'other thread' material).

Fine - I don't actually know what the structure of the prebate is but it should at a minimum be based on some kind of welfare-to-work program for its unemployed beneficiaries.

Not sure why property taxes wouldn't be able to do that?

Property taxes are based on the appraisal of real property. Wealthy people have most of their wealth in things like stocks which aren't real property. I also think that they'd get out of the property taxes - these people who have a second house can certainly go without and take up a timeshare or something instead.

You are both assuming that the person isn't doing any actual work. They might have good stocks and accountants that take care of their money flow. The fact that a person can make enough money to live without having to do work for awhile, for years maybe, isn't a reason that person should be punished.

(i'm often surprised how people treat "accounting" and "finance" as interchangeable...)

I don't think of this as "punishing" anyone. Society privileges people with wealth in order to reward them for their contributions. Someone who invents a better mousetrap deserves the privilege of spending ten years in luxury without lifting a finger. Fine.

If someone with "good stocks and accountants" takes a legitimate, active role in managing their assets, then I can abide it because they're contributing something. But there are plenty of trust fund babies who have perfectly "good stocks and accountants" who have absolutely no idea what a eurodollar is.

And yeah, I don't expect this to apply to someone earning $150K a year.

[Vekseid]

The way that I look at the financial sector (and naturally it is biased) is that it is the allocator of humanity's economic resources at the highest level, deciding which projects to invest in throughout the economy. That strikes me as of some importance.

Ultimately, it's a collection of applied algorithms, however you look at it.

Fine - I don't actually know what the structure of the prebate is but it should at a minimum be based on some kind of welfare-to-work program for its unemployed beneficiaries.

It's a "You get $xk dollars depending on the size of your household."

Property taxes are based on the appraisal of real property. Wealthy people have most of their wealth in things like stocks which aren't real property. I also think that they'd get out of the property taxes - these people who have a second house can certainly go without and take up a timeshare or something instead.

True, but I figure that the stock issue would be mitigated by the property tax in and of itself. At some point, no matter how much you implement a wealth tax, you're still dealing with people who have social capital in various forms and that's a lot harder to tax. "Please do what we say instead of what this person says 10% of the time..."

[Asuras]

Ultimately, it's a collection of applied algorithms, however you look at it.

That doesn't seem to distinguish finance from agriculture...every profession is an "algorithm" in some sense.

True, but I figure that the stock issue would be mitigated by the property tax in and of itself. At some point, no matter how much you implement a wealth tax, you're still dealing with people who have social capital in various forms and that's a lot harder to tax. "Please do what we say instead of what this person says 10% of the time..."

Those property taxes would be passed on to any stockholder, rich or middle class, and more importantly if those taxes were heavy enough that they actually reduced the value of the stock year after year after earnings...that would essentially make it impossible to do business in this country.

[Vekseid]

That doesn't seem to distinguish finance from agriculture...every profession is an "algorithm" in some sense.

There are rather few jobs that require humans specifically in any conceivable future. However, the difference between having robots perform all agricultural work versus setting up a financial sector run entirely by computer network is the difference between a massive technological barrier and a massive political one.

Those property taxes would be passed on to any stockholder, rich or middle class, and more importantly if those taxes were heavy enough that they actually reduced the value of the stock year after year after earnings...that would essentially make it impossible to do business in this country.

Which is why I'd want to make the homesteading rather generous. Wal Mart and McDonalds do not need to exist, but the services they provide do, at least for the next fifty years or so.

I won't deny that it's flawed, however.

[Zakharra]

I don't think of this as "punishing" anyone. Society privileges people with wealth in order to reward them for their contributions. Someone who invents a better mousetrap deserves the privilege of spending ten years in luxury without lifting a finger. Fine.

If someone with "good stocks and accountants" takes a legitimate, active role in managing their assets, then I can abide it because they're contributing something. But there are plenty of trust fund babies who have perfectly "good stocks and accountants" who have absolutely no idea what a eurodollar is.

And yeah, I don't expect this to apply to someone earning $150K a year.

So?  As lsong as the person has an active hand in their finances it's ok if they keep it, but as soon as it's passed on to someone that either doesn't know of care about it as long as there is money, it should be taxed at a higher rate? I'm sorry but that is seriously screwed up. 

That would penalize those who can afford to loaf for years.  It doesn't even have to be passed on. Say a person makes their fortune at a young age. About $10 million. They retire and live a comfortable life, yet they don't necessarily have to work again unless they want to.

To someone that makes $60k, $150k a year is a wealthy person. It's a subjective scale depending on your economic level. To someone that makes $150k, a person that makes $300k or more is wealthy, while they might not concider themselves wealthy.

You aren't even reading his argument. Not 'years'. Forever. $150k is such a trivially pointless amount of money in this scheme - no one who thinks a million dollars is a lot of money would be affected.

I was responding you your post that seems to want people to be taxed on ALL of their wealth. $150k might be pointless to someone that has a net total of $10-100 millon or more, but it IS a hell of a lot to someone that makes $60k.  That's a net tax on all wealth, per year. Which can do a lot of harm.

[Asuras]

However, the difference between having robots perform all agricultural work versus setting up a financial sector run entirely by computer network is the difference between a massive technological barrier and a massive political one.

Well, it's funny you put it that way because I actually work as a programmer for a quant fund which is essentially that: a network of computers which determine which stocks and equity derivatives to buy and sell.

But we work primarily in arbitrage which is a mathy, technical area of finance where there's a lot of hard data available which you can put into mathematical models and crunch. You make a computer do that and yeah, you have a money machine, at least until all the other firms do the same thing...and year after year the models get better and more complex, and yet even still things can go wrong. 2007-2008 was a terrible year for most quant funds which I think stands testament to how even the mathiest, most data-driven area of finance still can't be tamed by computation.

Other areas of finance are not so data-driven. For instance, a bank's decision to lend money to a company is a very complex decision that cannot (or at least has not) been reduced to a mathematical formula. The reason is that the variables involved are staggeringly complex; one has to understand the business's future prospects, its balance sheet, the entire company and its industry. It's not that banks wouldn't automate that process if they could - they'd be eager to do so, just as they've been eager to replace arbitrageurs with computers that do it with lightning speed - it's that the problem is hugely complex.

So?  As lsong as the person has an active hand in their finances it's ok if they keep it, but as soon as it's passed on to someone that either doesn't know of care about it as long as there is money, it should be taxed at a higher rate? I'm sorry but that is seriously screwed up. 

How is that seriously screwed up? I see a clear difference between the person who earns the money and the person who simply has it and contributes nothing to society.

That would penalize those who can afford to loaf for years.  It doesn't even have to be passed on. Say a person makes their fortune at a young age. About $10 million. They retire and live a comfortable life, yet they don't necessarily have to work again unless they want to.

That's exactly what I want - the kind of person who's able to earn $10 million at a young age should have an incentive to keep working. Those are the most talented and productive people in the world.

To someone that makes $60k, $150k a year is a wealthy person. It's a subjective scale depending on your economic level. To someone that makes $150k, a person that makes $300k or more is wealthy, while they might not concider themselves wealthy.

I'm not so concerned with how much money a person earns as that there is an incentive to work. Someone who has a trust fund that gets him $60K a year without lifting a finger is as offensive to me as someone who has a trust fund that gives him a $1M a year.

[RubySlippers]

There is a fallacy that lowering taxes will reduce the money businesses ask for goods or services. Sadly they will still charge wht the market will bear and just pocket any extra money there no assurance that they will create jobs.

As for changing government unless the Tea Party manages to kick out lots of incumbents its a dead movement and voters sadly have limited attention spans if say in six months they may refocus on other issues and how many will vote out a legislater that is senior and bring money and pork back to THEIR districts. Few I would think.

[Vekseid]

Well, it's funny you put it that way because I actually work as a programmer for a quant fund which is essentially that: a network of computers which determine which stocks and equity derivatives to buy and sell.

But we work primarily in arbitrage which is a mathy, technical area of finance where there's a lot of hard data available which you can put into mathematical models and crunch. You make a computer do that and yeah, you have a money machine, at least until all the other firms do the same thing...and year after year the models get better and more complex, and yet even still things can go wrong. 2007-2008 was a terrible year for most quant funds which I think stands testament to how even the mathiest, most data-driven area of finance still can't be tamed by computation.

Would arbitrage even exist with proper normalization on a temporal database, imposed across the entire market?

It's one thing when there are many banks and many markets, but one bank, one transactional system, one inhumanly managed market.

Though I do find it funny that you mention that after coming home from a fourteen-hour red queen's race saying that the financial sector is underappreciated. : )

Other areas of finance are not so data-driven. For instance, a bank's decision to lend money to a company is a very complex decision that cannot (or at least has not) been reduced to a mathematical formula. The reason is that the variables involved are staggeringly complex; one has to understand the business's future prospects, its balance sheet, the entire company and its industry. It's not that banks wouldn't automate that process if they could - they'd be eager to do so, just as they've been eager to replace arbitrageurs with computers that do it with lightning speed - it's that the problem is hugely complex.

The point being a full rewrite of our financial system. The numbers on a company's balance sheet, the trustworthiness of its individual decisionmakers, inventory, past performance, performance relative to its industries, etc. are all hard data. The lack of availability of a great deal of data is legal and political (not necessarily for reasons I disagree with). A fundamental understanding of the industry (including its future) is of course going to be a lot more difficult to model, but I'm not sure how much of a concern that will be if so much cruft is excised from the system by design.

In contrast the variables involved with agriculture are generally secondary to the necessity of physical action and having a keen awareness of the immediate environment (if only in large part because of computers doing the algebra in the first place).

[Asuras]

There is a fallacy that lowering taxes will reduce the money businesses ask for goods or services. Sadly they will still charge wht the market will bear and just pocket any extra money there no assurance that they will create jobs.

Prices move. I paid $200 for a computer display three weeks ago that would have cost me $500 three years ago. The same forces which caused this change in price would cause prices to move if the tax structure changed.

Would arbitrage even exist with proper normalization on a temporal database, imposed across the entire market?

The simplest example of arbitrage is spot FX arbitrage. This is when (for instance) $1 is trading for 100 yen in the US, but $1  is trading for 101 yen in Japan. Now trivially that form of arbitrage would be eliminated if you globally fixed the exchange rate, which I think is what you're saying.

But what is the "right price" for dollars in yen? What price would you fix to?

The arbitrageur doesn't really care - the arbitrage opportunity exists, which in this case is to buy dollars in the US and sell them in Japan - the price goes up in the US, and the price goes down in Japan until they're equal and the arbitrage opportunity is eliminated.

The reason that no one can come and say "It should be 100.5 yen" with certainty or "It should be 100.25 yen" with certainty is because as arbitrageurs make this trade, the price may rise faster in the US than it falls in Japan, or vice versa. No one can say for sure which because this is a reflection of the fundamental values of yen and dollars, which is (again) a hugely complex issue beyond the scope of arbitrage. Arbitrageurs let the market figure that one out.

The numbers on a company's balance sheet, the trustworthiness of its individual decisionmakers, inventory, past performance, performance relative to its industries, etc. are all hard data. The lack of availability of a great deal of data is legal and political (not necessarily for reasons I disagree with). A fundamental understanding of the industry (including its future) is of course going to be a lot more difficult to model, but I'm not sure how much of a concern that will be if so much cruft is excised from the system by design.

Much of this data is out there. There is an entire industry (Bloomberg, Thomson Reuters, etc) which has formed to provide it. Financial services companies thrive on information and have strong incentives to get it. Now if you think there still isn't enough information out there, fine - then the challenge is to increase transparency. As someone who works at a quant firm which crunches numbers, I'd love to have every receipt from every customer on earth on our machines.

But even if we had that data, we would not be able to come up with some definitive model for valuing a company's price or evaluating its creditworthiness. Maybe some day someone will, but at the moment, no. This remains an open question because projecting market conditions is, again, hugely complex. What we have now is decentralized, and this is a tremendous virtue. The firms with the best models - whether they're from computers or from people crunching balance sheets - win. If and when some firm can replace its people with a computer good enough to value a company, great, but if that happens it will happen organically.

The alternative you're suggesting is to place all central economic decision-making into the hands of a computer model which flatly doesn't exist. The financial system that we have, and that I support, strives toward improving its models organically; if we get there, we get there.

[Vekseid]

Prices move. I paid $200 for a computer display three weeks ago that would have cost me $500 three years ago. The same forces which caused this change in price would cause prices to move if the tax structure changed.

That's a horrifically bad example, considering the reason for the price collapse.

The simplest example of arbitrage is spot FX arbitrage. This is when (for instance) $1 is trading for 100 yen in the US, but $1  is trading for 101 yen in Japan. Now trivially that form of arbitrage would be eliminated if you globally fixed the exchange rate, which I think is what you're saying.

Not quite. Just one market, rather than one in the US and one in Japan, etc. If the database was also normalized to temporal relations, interest rates would be automatically considered in every single trade, for example.

The arbitrageur doesn't really care - the arbitrage opportunity exists, which in this case is to buy dollars in the US and sell them in Japan - the price goes up in the US, and the price goes down in Japan until they're equal and the arbitrage opportunity is eliminated.

The reason that no one can come and say "It should be 100.5 yen" with certainty or "It should be 100.25 yen" with certainty is because as arbitrageurs make this trade, the price may rise faster in the US than it falls in Japan, or vice versa. No one can say for sure which because this is a reflection of the fundamental values of yen and dollars, which is (again) a hugely complex issue beyond the scope of arbitrage. Arbitrageurs let the market figure that one out.

Right, but arbitrageurs are still basically human engines performing data correction.

Much of this data is out there. There is an entire industry (Bloomberg, Thomson Reuters, etc) which has formed to provide it. Financial services companies thrive on information and have strong incentives to get it. Now if you think there still isn't enough information out there, fine - then the challenge is to increase transparency. As someone who works at a quant firm which crunches numbers, I'd love to have every receipt from every customer on earth on our machines.

But even if we had that data, we would not be able to come up with some definitive model for valuing a company's price or evaluating its creditworthiness. Maybe some day someone will, but at the moment, no. This remains an open question because projecting market conditions is, again, hugely complex. What we have now is decentralized, and this is a tremendous virtue. The firms with the best models - whether they're from computers or from people crunching balance sheets - win. If and when some firm can replace its people with a computer good enough to value a company, great, but if that happens it will happen organically.

I've been under the impression that a major reason for that complexity in the first place is politics. One of my professors talked about having to abandon an oil exploration project because calculating the tax/license/etc burden involved was computationally impossible.

[Asuras]

Not quite. Just one market, rather than one in the US and one in Japan, etc. If the database was also normalized to temporal relations, interest rates would be automatically considered in every single trade, for example.

The global FX market is not exchange-traded because it actually requires the transfer of paper currency. (or at least the possibility that one could opt for paper currency) So A) you're talking about the creation of a single, global electronic market for all currency transactions and B) the elimination of physical currency, just to show the scope of the thing.

But you're right, doing that would eliminate the existence of arbitrage in the FX spot market (although practically speaking arbitrageurs in that market are so good at what they do and FX spot arbitrage is so stupid that no one makes money doing it, which is precisely why no one's succeeded in making a global forex exchange). In that case we move to the next level of arbitrage: triangular FX arbitrage.

In triangular FX arbitrage, let's say there are three currencies, yen, euros, and dollars. The spot yen/dollar rate is $1/100 yen; the spot yen/euro rate is 150 yen/1 euro. The spot euro/dollar rate should be $1.5/1 euro.

If the spot euro/dollar rate is not $1.5/1 euro, an arbitrageur will arbitrage the euro/dollar exchange rate. They will find euros and dollars and satisfy traders until the arbitrage opportunity is eliminated. So even on a single exchange you can have arbitrage opportunities.

Your exchange would have to find those dollars and euros because after all it can't simply make them out of thin air, because it's not the central bank for...any of these currencies. If your massive bank went finding traders, your bank is doing arbitrage. If it's not, then I will, and I still have a job then. :)

I've been under the impression that a major reason for that complexity in the first place is politics. One of my professors talked about having to abandon an oil exploration project because calculating the tax/license/etc burden involved was computationally impossible.

Seems like a wonderful argument for simplifying the tax code...sayy...with FairTax :)

[Vekseid]

But you're right, doing that would eliminate the existence of arbitrage in the FX spot market (although practically speaking arbitrageurs in that market are so good at what they do and FX spot arbitrage is so stupid that no one makes money doing it, which is precisely why no one's succeeded in making a global forex exchange). In that case we move to the next level of arbitrage: triangular FX arbitrage.

...

The idea though is that there would be a central standard for currency (I would use energy, personally, though that's rather borderline on the 'tech required' argument) - like I said, politics.

Anyway, a more interesting tangent...

B) the elimination of physical currency, just to show the scope of the thing.

...

Seems like a wonderful argument for simplifying the tax code...sayy...with FairTax :)

You don't need to eliminate physical currency when moving to an electronically based one, though yes, the scope is immense and would require replacing current currency with something where every individual 'penny' could be verified as genuine. One idea I had was to give currency units a half life, and have a floor for citizen accounts to guarantee a certain amount of savings as safe.

The result being a kind of economic hot potato.

[Asuras]

The idea though is that there would be a central standard for currency (I would use energy, personally, though that's rather borderline on the 'tech required' argument) - like I said, politics

The idea you've brought up is not a central standard but a central exchange...what does this have to do with energy?

You don't need to eliminate physical currency when moving to an electronically based one,

All exchanges of physical commodities (which practically includes currency) are based around the idea of a single point of delivery. The CME standardizes all futures contracts based on delivery to particular warehouses of that exchange in Chicago; same with the NYMEX and Euronext.

This is irrelevant for things that are electronically traded (god save the NASDAQ) but if it requires physical delivery (which is the case in FX) then there is market segmentation which makes the single exchange impossible because there will be a different practical price for physical delivery of currency X in Tokyo or London or Singapore or Dubai. Hence a different market hence arbitrage...

[Vekseid]

The idea you've brought up is not a central standard but a central exchange...what does this have to do with energy?

It has to include a central standard because of the three+ way arbitrages you were mentioning. It's not like I wasn't aware of that.

An energy production standard, rather than an Easter basket standard (gold/silver/coal/whatever), basically.

All exchanges of physical commodities (which practically includes currency) are based around the idea of a single point of delivery. The CME standardizes all futures contracts based on delivery to particular warehouses of that exchange in Chicago; same with the NYMEX and Euronext.

This is irrelevant for things that are electronically traded (god save the NASDAQ) but if it requires physical delivery (which is the case in FX) then there is market segmentation which makes the single exchange impossible because there will be a different practical price for physical delivery of currency X in Tokyo or London or Singapore or Dubai. Hence a different market hence arbitrage...

You can have a physical chip store a unique key pair, lose it, and take a new one just fine. The nice thing about numbers is that there are an infinite number of them.

[Asuras]

It has to include a central standard because of the three+ way arbitrages you were mentioning. It's not like I wasn't aware of that.

What kind of central standard are you talking about? I don't understand what it has to do with triangular arbitrage.

An energy production standard, rather than an Easter basket standard (gold/silver/coal/whatever), basically.

It's possible - if this is what you mean - to peg a currency to a basket of energy prices. No one does this because the value of consumer goods is based upon much more than the value of energy. Labor, commodities, -and- energy. Which is why we prefer the Easter basket.

You can have a physical chip store a unique key pair, lose it, and take a new one just fine. The nice thing about numbers is that there are an infinite number of them.

The issue about arbitrage is that markets are segmented. Someone in Dubai needs dollars in Dubai. Someone in New York needs dollars in New York. RFID, whatever - if it requires physical delivery this is the case, and it creates an arbitrage opportunity because these markets are separate.

[Vekseid]

What kind of central standard are you talking about? I don't understand what it has to do with triangular arbitrage.

All currency prices coming from a singular base. Rather than buy euros with yen, you sell your yen and buy the euros.

It's possible - if this is what you mean - to peg a currency to a basket of energy prices. No one does this because the value of consumer goods is based upon much more than the value of energy. Labor, commodities, -and- energy. Which is why we prefer the Easter basket.

For now anyway. I don't really think of it as something that would be implemented in a decade or three.

The issue about arbitrage is that markets are segmented. Someone in Dubai needs dollars in Dubai. Someone in New York needs dollars in New York. RFID, whatever - if it requires physical delivery this is the case, and it creates an arbitrage opportunity because these markets are separate.

The physical tokens are already present. They can make more on site as they need them. Activate and deactivate as necessary.

[Asuras]

All currency prices coming from a singular base. Rather than buy euros with yen, you sell your yen and buy the euros.

A) We had that for thirty years, and it fell apart
B) I don't know why you expect this to prevent triangular arbitrage, because it didn't when we had it.

The physical tokens are already present. They can make more on site as they need them. Activate and deactivate as necessary.

Wait - you're going to activate and deactivate the money in people's pockets? So I take money out of the ATM (or a bank takes money from the Fed) and they don't know if it's worth anything or not?

[Vekseid]

A) We had that for thirty years, and it fell apart

...there are some rather overwhelming differences between energy and gold. I think you shot down the shiny rock standard fairly well elsewhere - why would it apply to something that we are constantly producing more of and can transmit nearly instantly?

Wait - you're going to activate and deactivate the money in people's pockets? So I take money out of the ATM (or a bank takes money from the Fed) and they don't know if it's worth anything or not?

Nothing of the sort. It's just a reflection on what's going to have to happen with our physical currency in the next few decades anyway - the ability to immediately and securely tell which currency is legitimate, what isn't, and how much a pile of it is worth.

Keeping the wealth with the physical token in that case versus letting people print their own money and assigning value to it is mostly just a question of privacy versus security.

[Asuras]

...there are some rather overwhelming differences between energy and gold. I think you shot down the shiny rock standard fairly well elsewhere - why would it apply to something that we are constantly producing more of and can transmit nearly instantly?

Energy is only one part of what people consume - again, the stuff you consume is a product of labor, land, energy, commodities, etc. And the underlying of all of these - I think - ought to be labor and talent. Paying people for energy (and I come from Texas where we make some money on oil) is just paying the bastards you and I both don't want to be paid for owning an arbitrary plot of land.

Nothing of the sort. It's just a reflection on what's going to have to happen with our physical currency in the next few decades anyway - the ability to immediately and securely tell which currency is legitimate, what isn't, and how much a pile of it is worth.

Keeping the wealth with the physical token in that case versus letting people print their own money and assigning value to it is mostly just a question of privacy versus security.

Fine, but as you have physical currency you have arbitrage.

And my sorry ass has a job, thank you. :)

[Zakharra]

How is that seriously screwed up? I see a clear difference between the person who earns the money and the person who simply has it and contributes nothing to society.

So? It's their money. You're wanting to punish someone who you think isn't working. Is that person spending money? Yes. It just doesn't sit there completely unused. Some is spent. How much would vary from person to person and change over time. What they do with the money is their own business.

That's exactly what I want - the kind of person who's able to earn $10 million at a young age should have an incentive to keep working. Those are the most talented and productive people in the world.

No. You would be forcing someone to work when they wouldn't want to. That person might have decided they made enough money that year and retire to live comfortably for the rest of their life (or until they either get bored or find something else that interests them that they want to make money from). That person might have had a goal and met it. Why should they be forced to work when they have made the money they want legally?

I'm not so concerned with how much money a person earns as that there is an incentive to work. Someone who has a trust fund that gets him $60K a year without lifting a finger is as offensive to me as someone who has a trust fund that gives him a $1M a year.

Again, you're penalizing success. WHY should that person be forced to work?  Why should you care? The trust fund money is spent no matter what. How they spend it isn't our concern or business. As long as someone cares for the money, or even if no one cares for it, who cares? If it's spent unwisely, the person will have to find work sooner or later.

Basically, if someone wants to work, they can. If they have to work to earn a living, they will. If they can work, but don't need to, they shouldn't be made to.

[Trieste]

You're generally forgetting that if someone has the drive to make $10mil by the age of 20 or whatever, they often have their own drive to continue innovating.

Just sayin', guys. :P

[RubySlippers]

I happen to support the government being sure every citizen and legal resident has a roof over their head, clothing, food, shelter, education and health care at an adequete level and should tax accordingly to meet this need. A freedom from want that is equal to other freedoms and may be more important.

What good is freedom of speech when your homless with rain falling on you and your belly is empty, its a luxury for such a person? Now if that person has a small room, a full belly, access to health care and other needs of their body then they are free to enjoy other freedoms more fully.

[Asuras]

So? It's their money. You're wanting to punish someone who you think isn't working. Is that person spending money? Yes. It just doesn't sit there completely unused. Some is spent. How much would vary from person to person and change over time. What they do with the money is their own business

No. You would be forcing someone to work when they wouldn't want to. That person might have decided they made enough money that year and retire to live comfortably for the rest of their life (or until they either get bored or find something else that interests them that they want to make money from). That person might have had a goal and met it. Why should they be forced to work when they have made the money they want legally?

Again, you're penalizing success. WHY should that person be forced to work?  Why should you care? The trust fund money is spent no matter what. How they spend it isn't our concern or business. As long as someone cares for the money, or even if no one cares for it, who cares? If it's spent unwisely, the person will have to find work sooner or later.

Basically, if someone wants to work, they can. If they have to work to earn a living, they will. If they can work, but don't need to, they shouldn't be made to.

My view is that society should pay people to work. If it pays people more than they need to get paid to work, society is paying too much and should take the excess back. So, no, I fundamentally disagree that it's totally their money ever - I think it's society's and if we give it to them it's because society expects something from them. If they stop working for it then we can take it back.

Basically what I'm saying is that someone has to justify what society gives to him. I'm willing - even passionate - to say that society should richly reward someone who works hard, someone who justifies their  having wealth, even if it generates inequality. But if they stop working...at some point he can no longer justify why society supports him, let alone his offspring five generations later who had nothing to do with earning the privilege.

You're generally forgetting that if someone has the drive to make $10mil by the age of 20 or whatever, they often have their own drive to continue innovating.

Well...we'll see what Mark Zuckerberg does with the rest of his life.

[Zakharra]

My view is that society should pay people to work. If it pays people more than they need to get paid to work, society is paying too much and should take the excess back. So, no, I fundamentally disagree that it's totally their money ever - I think it's society's and if we give it to them it's because society expects something from them. If they stop working for it then we can take it back.

  No. It's not society's money. It is NEVER society's money. The closest it should come to that is tax money. What each person keeps is their own money. Not society's. The person earned it through hard work and effort. You're saying that it's not theirs? Why? Why is it society's money? It's not the society that paid for what this person produced. It's not society that  made a demand for the service the person provided. It was people and companies. 

What gives society the right to steal (yes, steal is exactly the correct word for this) the person's money? They earned it. It's not doing anyone any harm if that person isn't working. The person is spending  their money. It's not like it is sitting doing absolutely nothing.

Society isn't handing out money to people saying, 'Good work there. Keep it up.' The money a person earns is, for the most part, honestly earned and is legally that person's.  Your view  is more in mind of a government control of wealth since you seem to think that a person;s money isn't theirs and if that person isn't doing enough 'work' for your tastes, you would feel justified in taking that money away.

Basically what I'm saying is that someone has to justify what society gives to him. I'm willing - even passionate - to say that society should richly reward someone who works hard, someone who justifies their  having wealth, even if it generates inequality. But if they stop working...at some point he can no longer justify why society supports him, let alone his offspring five generations later who had nothing to do with earning the privilege.

So what? As long as he has the money and is spending it, it's not hurting you. It is his money. Could he and his descendants make money later? Sure, if they wanted  to or had to if the money ran out. Why should someone who doesn't have to work and has a trust fund that is well managed by accountants, be forced to work if they don't want to?

Justify to who? To you?  To some board that has an arbitrary level that every person must meet in order to keep their money? Why do you think every person has to 'contribute' to society? If the person has worked for it and thinks they have enough to satisfy them, why should that money be taken away. 

[Jude]

Money only has value because society recognizes that it has value though.  You forget that money is a tangible object with intangible value.  Everyone agrees to pretend that it's a fundamental unit of exchange, that's part of joining this club called the USA, but in reality it does not.

If we're going to keep pretending that your money holds value while you contribute nothing (if that is the case), I don't think it's at all unreasonable to ask for some of it.

We're all just passing around IOUs on fancy paper after all.  Consensus of imagination is the glue that holds society together.  If a bunch of people sat around demanding purely tangible products for another item with completely intangible value on a smaller scale, how long do you think it would take for the people who the demands are being made of to say, "I quit this game."

[Zakharra]

Money only has value because society recognizes that it has value though.  You forget that money is a tangible object with intangible value.  Everyone agrees to pretend that it's a fundamental unit of exchange, that's part of joining this club called the USA, but in reality it does not.

That much it true. It has worth because people believe it does.

If we're going to keep pretending that your money holds value while you contribute nothing (if that is the case), I don't think it's at all unreasonable to ask for some of it.

  This is where we run into a problem. You seem to be assigning money value, only as long as a person works. The moment they stop working for their money, they somehow no longer earn it? That is seriously screwed. One of the reasons people work for money is to pass it onto their children.  Why should the fact a person who doesn't earn money (inherited it) or no longer needs to work stop them from having the money?

If you're headed that route, of determining who can and cannot have money, why not just nationalize all businesses and set pay rates? You've already decided  how much money a person can have.

We're all just passing around IOUs on fancy paper after all.  Consensus of imagination is the glue that holds society together.  If a bunch of people sat around demanding purely tangible products for another item with completely intangible value on a smaller scale, how long do you think it would take for the people who the demands are being made of to say, "I quit this game."

It's not imagination that gives paper money value. It's a belief that the paper note has an actual value. It's the same with electronic money. It has worth because people believe it does.  How long do you think it would take for people to say, 'I quit this game,'  if the money they or a parent earned is taken away from them for some arbitrary reason?

[Jude]

This is where we run into a problem. You seem to be assigning money value, only as long as a person works. The moment they stop working for their money, they somehow no longer earn it? That is seriously screwed. One of the reasons people work for money is to pass it onto their children.  Why should the fact a person who doesn't earn money (inherited it) or no longer needs to work stop them from having the money?

Why should someone have their every need attended for them their entire life simply because they were lucky enough to be born to the right parents while everyone else has to bust their ass to survive?

If you're headed that route, of determining who can and cannot have money, why not just nationalize all businesses and set pay rates? You've already decided  how much money a person can have.

Well... if that wasn't a gigantic logical jump.  You seem to be implying that if you support a tax against people who do not work and are in their prime, you support Communism.  Are we going to argue about Obama's birth certificate next?

It's not imagination that gives paper money value. It's a belief that the paper note has an actual value. It's the same with electronic money. It has worth because people believe it does.  How long do you think it would take for people to say, 'I quit this game,'  if the money they or a parent earned is taken away from them for some arbitrary reason?

Oh no, the people who don't work will say "they quit this game" and go play with some other people.  Guess what, this is not a loss.  They're not contributing anything real to the pile to be divided up amongst us using the monetary standard.

EDIT:  P.S. I'd like to see you quote to me where I decided how much money a person can have, like you said I did.  Or even where I determined who can and cannot have money.

[Zakharra]

Why should someone have their every need attended for them their entire life simply because they were lucky enough to be born to the right parents while everyone else has to bust their ass to survive?

Because it is THEIR money. How they got the money has absolutely no meaning if it was done legally. What they do with it is none of our business. If that person feels like they have no reason to work and doesn't have tom they shouldn't be made to work.

Well... if that wasn't a gigantic logical jump.  You seem to be implying that if you support a tax against people who do not work and are in their prime, you support Communism.  Are we going to argue about Obama's birth certificate next?

Not really. You're setting an arbitrary limit on how much time people can have to not work. A 'You have X amount of money and can stay unemployed for x amount of time. Past that we start stealing/taking your money through higher taxes since you obviously can work, but are not working', situation.  It's punishing success. It's not that big of a leap to go from saying how long you can't work to saying how much you can earn for how long.

I have no idea why brought in the President's birth certificate....

 

Oh no, the people who don't work will say "they quit this game" and go play with some other people.  Guess what, this is not a loss.  They're not contributing anything real to the pile to be divided up amongst us using the monetary standard.

Want a bet? If the money a person earns through hard work is going to be taxed at a higher or much higher rate simply because that person or their descendants are not 'earning' it later in life, why should that person put out the effort to succeed? No matter what, a good portion of what he earns will be taken away. There's very little incentive to make tons of cash when it will be taken away by the government.

EDIT:  P.S. I'd like to see you quote to me where I decided how much money a person can have, like you said I did.  Or even where I determined who can and cannot have money.

I was mainly responding to Asuras, but you were in the same area as he is from your statements of wanting to take money from those who you think are not doing enough to earn it.

[Asuras]

No. It's not society's money. It is NEVER society's money. The closest it should come to that is tax money. What each person keeps is their own money. Not society's. The person earned it through hard work and effort. You're saying that it's not theirs? Why? Why is it society's money? It's not the society that paid for what this person produced. It's not society that  made a demand for the service the person provided. It was people and companies.

What gives society the right to steal (yes, steal is exactly the correct word for this) the person's money? They earned it. It's not doing anyone any harm if that person isn't working. The person is spending  their money. It's not like it is sitting doing absolutely nothing.

Society isn't handing out money to people saying, 'Good work there. Keep it up.' The money a person earns is, for the most part, honestly earned and is legally that person's.  Your view  is more in mind of a government control of wealth since you seem to think that a person;s money isn't theirs and if that person isn't doing enough 'work' for your tastes, you would feel justified in taking that money away.

Let me turn this around - why is it theirs? They worked for it, but so what?

This is the reality - society can come in and take whatever from whoever it wants whenever it wants. What really is bizarre is the idea that we think that an individual can have a right to something when that's the case. Why should society respect his "right" to something when society can take it?

And my argument actually coheres with that - society "gives" - or rather "lets someone have" - something when it gets something from them. It takes it back when it's no longer getting something from them. This is an emanation of society's self interest. All the "rights" we have are no more than that - and basically it's a tautology - the rights we have exist solely because society lets us alone and lets us have those rights.

[Jude]

Because it is THEIR money. How they got the money has absolutely no meaning if it was done legally. What they do with it is none of our business. If that person feels like they have no reason to work and doesn't have tom they shouldn't be made to work.

A modest tax on their money won't force them to work.  It will encourage them to, and I don't see the problem with encouraging people to work by taxing them for not doing so.  I guess this is a matter of philosophy here though.

Not really. You're setting an arbitrary limit on how much time people can have to not work. A 'You have X amount of money and can stay unemployed for x amount of time. Past that we start stealing/taking your money through higher taxes since you obviously can work, but are not working', situation.  It's punishing success. It's not that big of a leap to go from saying how long you can't work to saying how much you can earn for how long.

I have no idea why brought in the President's birth certificate....

We already have taxes that punish people who get money without putting in the effort of working for it.  Capital gains, anyone?  This isn't as revolutionary of a concept as you're pretending it is.

Want a bet? If the money a person earns through hard work is going to be taxed at a higher or much higher rate simply because that person or their descendants are not 'earning' it later in life, why should that person put out the effort to succeed? No matter what, a good portion of what he earns will be taken away. There's very little incentive to make tons of cash when it will be taken away by the government.


I was mainly responding to Asuras, but you were in the same area as he is from your statements of wanting to take money from those who you think are not doing enough to earn it.

1)  I didn't endorse taking so much away that, gasp, all of your efforts were for naught.  You make it sound like someone still couldn't retire ridiculously rich or go through their life without working if they had enough.  It would just force the people who tried to actually contribute in the way people who pay income taxes do.

2)  Wouldn't it encourage them to work harder to save up that extra bit to be able to handle those additional expenses incurred?  Thus working a bit longer.

3)  It could encourage people to continue working when they would've retired, which would keep talented individuals working longer.  Isn't that good for the country?

4)  There could always be exemptions for people who donate certain amounts of money to charity, or better yet, do certain acts of community service.

There isn't much of a point in debating this though, it seems we have a fundamental disagreement.  I think it's unjust that some people can inherit vast amounts of money simply by being born as the son or daughter of someone wealthy, do nothing with their life, and still live a better life than people who work hard.  As far as I can tell, and correct me if I'm wrong here please, you seem to be perfectly OK with this.

[Zakharra]

A modest tax on their money won't force them to work.  It will encourage them to, and I don't see the problem with encouraging people to work by taxing them for not doing so.  I guess this is a matter of philosophy here though.

Then let the current taxes do that. There is no need to increase the tax on someone that can work and doesn't need to.

We already have taxes that punish people who get money without putting in the effort of working for it.  Capital gains, anyone?  This isn't as revolutionary of a concept as you're pretending it is.

Yes, but once they earn the money, it's not taxed. Cap gains is a tax on earned income I believe.

1)  I didn't endorse taking so much away that, gasp, all of your efforts were for naught.  You make it sound like someone still couldn't retire ridiculously rich or go through their life without working if they had enough.  It would just force the people who tried to actually contribute in the way people who pay income taxes do.

2)  Wouldn't it encourage them to work harder to save up that extra bit to be able to handle those additional expenses incurred?  Thus working a bit longer.

3)  It could encourage people to continue working when they would've retired, which would keep talented individuals working longer.  Isn't that good for the country?

4)  There could always be exemptions for people who donate certain amounts of money to charity, or better yet, do certain acts of community service.

1, I'm saying that because you and Asuras appear to be fine on taxing all wealth.  In an effort to force someone to work. Any 'encouragement' is force in the end if you are taking away what they made.

2, Then let that person decide what they want, not some arbitrary level set by a board or society. It's no one's business  if they person wants to for for decades to make a ton of money. It's also no one else's business if that person makes a couple of million and decides to retire at age 30.

3, No. You're -forcing- people to work when they don't necessarily want to or need to. If a person doesn't have to work, they should be made to work.

4, So as long as they spend the money in ways you approve of, they get a pass?  As long as it  goes away by either taxation or 'donations' it's fine? I'm sorry, but that is no better than pointing a gun at their head and saying  'Give me the money or send it to the charities.'

There isn't much of a point in debating this though, it seems we have a fundamental disagreement.  I think it's unjust that some people can inherit vast amounts of money simply by being born as the son or daughter of someone wealthy, do nothing with their life, and still live a better life than people who work hard.  As far as I can tell, and correct me if I'm wrong here please, you seem to be perfectly OK with this.

I have absolutely no problem with people having money. If they spend it unwisely, they'll either be forced to work or starve. If people who inherited wealth are smart, they do learn to manage and earn more. Just because you are born poor or rich doesn't mean you cannot improve your means if you have the ambition or drive, or sit on your butt lazing away.

What a person does with their money is their business. NOT 'society's' business. No matter what, the money is spent.

You are right we do have a difference of opinion. I believe in a person being able to keep the fruits of their effort and for that person to do with their wealth, what they want to. As long as it's not illegal, it's none of our business.

[Zakharra]

Let me turn this around - why is it theirs? They worked for it, but so what?

This is the reality - society can come in and take whatever from whoever it wants whenever it wants. What really is bizarre is the idea that we think that an individual can have a right to something when that's the case. Why should society respect his "right" to something when society can take it?

It is theirs because they either did the work to earn it, or inherited it. Anyways it is theirs. Why are you wanting to steal that person's money when you didn't earn it? It's not yours, it's not society's. It is the sole property of the person that earned/owns it.

Right now, the laws of society support the view that what a person makes is theirs. To take it in any manner is considered stealing.

And my argument actually coheres with that - society "gives" - or rather "lets someone have" - something when it gets something from them. It takes it back when it's no longer getting something from them. This is an emanation of society's self interest. All the "rights" we have are no more than that - and basically it's a tautology - the rights we have exist solely because society lets us alone and lets us have those rights.

Your argument is somewhat flawed. Society makes laws which support some rights. Other rights are considered to not be changeable or removable.  Now the definition of those 'rights' can and have changed over time, but they are still there.  Currently, and correct me if I'm wring, but aside from some taxation, everything a person makes in their lifetime is considered the property of the person that made it or inherited. We are not forced to work if we do not have to. As long as WE are comfortable with what we have, we're happy.

People want to earn enough so they don;t have to work anymore. They want to earn enough they can give their children a better start than they had in life. They -want- to be wealthy and not have to work.

Your idea is taking that away by excessive taxation and forcing that person to work. Stealing the benefits of their labors.

Why should society respect his "right" to something when society can take it?

Rereading this, that line caught my eye. That line right there is gods damned scary. You are essentially saying that 'society' can for any reason take something away when it wants to? Society is bound by laws to p[prevent that very thing. If it wasn't, then nothing would prevent a society from deciding, that for the 'good of all' to take the wealth of all wealthy people and put them back to work. To do anything it decided benefits 'society'

[Asuras]

It is theirs because they either did the work to earn it, or inherited it. Anyways it is theirs. Why are you wanting to steal that person's money when you didn't earn it? It's not yours, it's not society's. It is the sole property of the person that earned/owns it.

And I'm asking, simply why. Maybe they worked for it, but why does that make it theirs?

Right now, the laws of society support the view that what a person makes is theirs. To take it in any manner is considered stealing.

First, our laws also allow for things like income taxes, estate taxes, and eminent domain, which don't exactly say "everything you have is yours." At any rate, we could change the laws to anything and there's no reason that they're inspired by righteousness in the first place so...I don't see the point in bringing them up in an argument about justice.

Society makes laws which support some rights. Other rights are considered to not be changeable or removable.  Now the definition of those 'rights' can and have changed over time, but they are still there.  Currently, and correct me if I'm wring, but aside from some taxation, everything a person makes in their lifetime is considered the property of the person that made it or inherited. We are not forced to work if we do not have to. As long as WE are comfortable with what we have, we're happy.

Again, the laws we have are not necessarily a reflection of justice. And even if many people may consider some rights which are laws to be part of some higher moral law, the physical reality is that the right actually exists only because society chooses to respect that right. And personally I think that the word "right" in any sense other than the practical, morally void legal sense is meaningless.

I already mentioned eminent domain, but add to that antitrust law and the battery of regulations that corporations work under...we don't treat property as inviolable.

People want to earn enough so they don;t have to work anymore. They want to earn enough they can give their children a better start than they had in life. They -want- to be wealthy and not have to work.

They may want that, but society wants something else.

Rereading this, that line caught my eye. That line right there is gods damned scary. You are essentially saying that 'society' can for any reason take something away when it wants to? Society is bound by laws to p[prevent that very thing.

The physical reality is that society can take anything it wants. Any individual can be overpowered by society; it's as good as a physical law.

If it wasn't, then nothing would prevent a society from deciding, that for the 'good of all' to take the wealth of all wealthy people and put them back to work. To do anything it decided benefits 'society'

There are reasons not to take wealth arbitrarily from all wealthy people. Society benefits from many or most wealthy people - they're productive, they work, they continually justify having their wealth.

[RubySlippers]

People that have more should simply pay more its the duty of the rich to make sure those they make their money on the backs of pay accordingly. But I do feel taxes should be fair say everyone paying a flat percentage on their incomes regardless if its a wage slave or a member of the elite of our society. Then use this to provide for all citizens what is needed at a modest level.

And I will add you can't take it with you, an old saying but true.

[Oniya]

Right now, the laws of society support the view that what a person makes is theirs. To take it in any manner is considered stealing.

It's more ingrained than that.  I was doing some googling on vague things I remembered from my high-school Civics class, and finally got directed to a place I wasn't expecting.

* Fifth Amendment – due process, double jeopardy, self-incrimination, eminent domain.

    No person shall be held to answer for any capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

(Bolding used to untangle exceptionally complex sentence structure)