Posted on 12/18/2005 4:46:00 PM PST by FairOpinion
They just attack the leading threat to their little game, magnifying every defect (real or imagined), all the while pretending that they actually support tax reform, just not this type of tax reform.
It can easily be concluded that K street lobbyists respond the same way.
Just not on these threads. But perhaps I'm mistaken and some do. In the end, is there a difference? Only by degree.
Fear and Loathing of the Status Quo Lobbyists.
HA! HA! HA! HA! HA! HA!
HA! HA! HA!
Laughing them out of existence.
"I am just telling you why congress isn't entertaining it."
No, you aren't. Compliance under the FairTax would be higher than the current system. The reason that many in congress resist the idea is that the FairTax would be the largest single transfer of power out of DC back to the American people in the history of the republic. The political ruling class could no longer use the tax system to reward friends and punish enemies. That chills some of them to the bone.
"Lets say a hard working, prosperous couple worked and saved all their life. They paid all their taxes and lived on the cheap, saving all their after-tax money for retirement."
Several points come to mind here.
1. With an individual savings rate of almost zero now, your hypothetical couple would seem in the extreme minority.
2. One of the economic benefits of the FairTax would be an increase in savings rates, as the punitive treatment of savings and investment of the current system would be eliminated.
3. To the extent that that hard working couple had invested in the equities of US corporations with some of the presumably substantial savings they had amassed, they would do extremely well under the FairTax. In fact, a couple of nationally known money managers have predicted a doubling of the DJI within 24 months of the FairTax going into effect. If we get even half of that, that would dwarf any differences in what this couple would pay for their groceries, clothes and other consummables.
4. How many people do you know who are in this category? By that I mean people who have been financially successful, have lived WAY below their means in order to accumulate retirement income, and when they retire, they expect their standard of living to go way up. I don't know anyone like that. Most of the people that I know become accustomed to a certain standard of living that is based on their earning capacity during their working years, and they hope to maintain somewhere close to that standard when they retire.
5. I don't know what percentage of retirement savings is in tax deferred vehicles, but it has to be substantial. Those people would not have to pay income taxes on those savings when they retire under the FairTax. That has to be factored into the equation. Also, they won't have to pay estate taxes when they pass on.
"The 'Prebate' might be a good deal for poverty level people that likely never paid taxes, or even worked. It kinda screws over those that have."
Incorrect. The prebate lowers the effective rate for everyone who elects to recieve it, although that effect becomes less and less at higher and higher consumption levels. However, for someone consuming at twice the poverty level, it has the effect of reducing the effective rate by 50%. For a family of 4, let's say the poverty level is $24K per year. For a family of 4 consuming at $48k per year, their (tax inclusive)effective rate would be 11.5% - half the stated rate of 23%. That compares pretty favorably to the FICA rate of app. 7.5% (not even counting income taxes and not even counting the imbedded taxes that they don't realize they are paying now).
In fact, a couple of nationally known money managers have predicted a doubling of the DJI within 24 months of the FairTax going into effect.
Great. Do you have a link to a quote(s)? Along similar lines, about a year ago there was mention of a few large corporations saying that they would endorse/support the FairTax in writing. Something about moving their operations onshore.
"It is the great confusion wrt economic theory which weakens the arguments of this new tax scheme."
LMAO!!!!!
(I can't believe he said that!! The SQLs don't know what they don't know and they are arrogant as hell, too. I can deal with ignorance and I can deal with arrogance. I have a hard time dealing with those who are both.)
"Such costs are deducted from gross receipts to arrive at profits. If you were to try and claim income taxes as a business cost or expense I don't believe the IRS would let you get away with it."
You are confusing financial accounting with tax accounting. The difference that you point out is only one of many.
Do you understand what a financial statement is?
LMAO!!!!!
(I can't believe he said that!! The SQLs don't know what they don't know and they are arrogant as hell, too. I can deal with ignorance and I can deal with arrogance. I have a hard time dealing with those who are both.)
IMO, laughing is an appropriate response and way to deal with them For in the end the Status Quo Lobbyists will be laughed out of existence.
I credit you with your 268 post for seeding my thoughts to to identify the phrase: Status Quo Lobbyists See post 281.
"Business income taxes of 90% would not affect pricing decisions other than accomodating elasticities. If you believed you had to increase your price to account for the tax you might conclude that there was no way you could increase your price that much because the elasticity of demand is such that it would cause your sales to drop drastically thus it could mean you would LOWER the price to prevent demand from falling too much."
Business taxes suddenly going up to the 90% level would typically mean that previously profitable businesses would now be unprofitable, all other things considered. If the taxes affected all businesses in a given market equally, then those businesses would attempt to increase their prices to pass those costs along and remain at least marginally profitable. If the market would not bear that price increase, then these unprofitable companies would go out of business.
"Markets set prices. And they do so without reference to income taxes. Any competent and coherent microeconomic text can explain this to you."
An equilibrium is formed where the supply and demand curves intersect. The graph compares price to quantity. The higher the price, the higher the supply curve, but the lower the demand curve. Suppliers want to sell for as high a price as possible and will increase production at higher sales prices. Suppliers don't want to sell at a loss, however, and won't produce on a long term basis if market prices don't allow them to meet costs (ALL COSTS) and make at least a small profit. Capital dries up for unprofitable businesses (both debt and equity).
Any competent and coherent microeconomic text can explain this to you.
"You obfuscate...."
I never knew what obfuscation was until I encountered SQLs on FR. It seems they are all masters at it. Just look at how much time and energy has been wasted on this thread debating whether or not income taxes are an expense.
Well, DDDUUUUUHHHH ... they sure aren't an asset!!
"I heard a similar scenario happened in Wisconsin dealing with the state sales tax. I think the visible goods and services would remain about the same with only minimal swing up or down."
Perhaps the most vivid example of the power of the average voter/taxpayer is what happened in Tennessee a couple of years ago. Tennessee hasn't had an income tax for some time - they use a sales tax as their primary revenue source. Some in the state leglislature decided that the state needed an income tax, too. A local talk show host got wind of the fact that a bill was being debated to do just that. He alerted his listeners and they showed up in mass at the state capital. The guards locked them out, but they raised so much hell outside that the legislators could hear them and the measure failed - I think by a fairly wide margin. Believe it or not, legislators do listen to constituents, but constituents have to speak up loud and clear.
Well, DDDUUUUUHHHH ... they sure aren't an asset!!
I second that DDDUUUUUHHHH
Labor, material and utilities, those components are assets with attached costs. Assets that when competently managed create efficiencies. Income tax costs have what underpinning component, and is that an asset? The component is government protection, which is an asset. Is it competently managed to create efficiencies? Unequivocally, no!
Implementing the FairTax is the first step to rectifying no!
"I credit you with your 268 post for seeding my thoughts to to identify the phrase: Status Quo Lobbyists"
Actually, pigdog used the term SQL first (Status Quo Lover, not lobbyist) on prior threads. I used to use the term "Guardians of the Status Quo", but his phrase seems to have stuck.
The guards locked them out, but they raised so much hell outside that the legislators could hear them and the measure failed - I think by a fairly wide margin. Believe it or not, legislators do listen to constituents, but constituents have to speak up loud and clear.
Thanks. Now I remember the threads. Hide away out of sight out of mind and we politicians can do what ever we want. Oblivious to what our constituents want.
Not only do they attempt, often successfully, to hide their dirty deals from prying eyes, they try to hide from the reality outside their closed chambers.
In my mind, a frightening place for some people, in context of the status quo lobbyist is accurate where lover is not. Also, in context of the Status Quo it's dynamic. I prefer my lovers to be dynamic in bed and generally oblivious to status quo.
Just trying to get the metaphors properly aligned/complementary.
"I , and many others, have posted many reasons why we don't seem to be sold on the fair-tax plan.
It always seems to fall of deaf ears of the proponents of the plan."
For some reason, this comment stuck with me and I decided to add some additional thoughts.
My first response is that most, if not all of us who support the FairTax, do so after spending a significant amount of time studying it and asking questions. I doubt that any of us decided to support the FairTax the first time we heard about it. I know that I had a lot of questions, probably more so than most because I have a background in accounting and finance. OTOH, I had an aversion to our tax system from the first tax classes I had to take in grad school. I was immediately struck with what a colossal waste of human and financial resources our current system is. Another supporter with a background in software development said that the word that came to mind for him when he first learned about the proposal was "efficiency".
Therefore, I don't find it at all surprising that FairTax supporters don't abandon ship just because they log onto FR and a few naysayers voice objections. In most cases, they are issues that we raised ourselves, or heard others raise in the past, and we are reasonably comfortable with the responses. That isn't to say that the FairTax is perfect. Most of us simply believe that it is vastly superior to the current system (which isn't saying much IMHO) and better than any of the alternatives proposed so far.
I have to also say in all candor that the naysayers in many cases aren't all that persuasive. My experience is that many (not all) fall into one of several categories:
1. they have some vested interest in the perpetuation of the current system. They may have carved out a special niche for themselves in the current tax system, think they are getting a special deal, or that they know how to game the system so that they personally recieve a disproportionate benefit. Efforts to convince them that our economy would perform much better for a number of reasons fall on deaf ears. They may work in tax preparation or be close to someone who does. I even had one admit on FR that he would support the FairTax (in spite of his constant criticisms of it) if he could figure out a way to game it to receive a bigger advantage than he was getting under the current system.
2. they are sincerely and genuinely afraid of change - and this is a BIG change. The current system has wrapped its tentacles around every aspect of our financial lives, and unleashing that grip is scary to some - including many policy makers. However, as I previously pointed out, sticking with the current system is hardly a low risk option. The fact that most Americans don't understand what a grave danger our ever expanding trade deficit is, for example, and how tax policy contributes to it, does not make that danger any less real.
3. those who make decisions before learning all the facts. AFFT's research indicates that among those who haven't had our proposal explained to them, we lose by wide margins. However, after hearing an explanation and having their questions answered, those numbers turn around. It stands to reason, then, that those who formulate a position early on before becoming educated on the proposal are overwhelmingly opposed. I can think of several of the naysayers on FR who fall into that category. They focus on what they perceive as negatives when they first hear of the FairTax, become fixated on that, and that is where they stay.
4. they support an alternative form of tax reform. There is nothing wrong with that; in fact, FairTaxers have long said, we need a national debate and to arrive at a consensus we need everyone to feel they have a seat at the table. Flat taxers, transaction taxers, VAT guys, everyone needs to be heard. However, when they attempt to push their preferred approach forward by denigrating the FairTax, exaggerating its deficiencies and, in some cases outright lieing about it, then we have to object. I must also say that as the FairTax has moved ahead of some of the other alternatives over the past couple of years, their criticisms have become more irrational, emotional and strident. A couple of FReepers come to mind who have been attacking the FR on here for years now. They have their own versions of tax reform that they have been extolling the virtues of and have not convinced a single other soul (that I am aware of) of the efficacy of their preferred approaches. Left to them, tax reform would never happen. They are among the most virulent critics of the FairTax and can cite chapter and verse from the bill itself.
In addition to all of the above, I find many of the naysayers (SQLs if you wish) arrogant and/or disengenuous. I know that the SQLs find some of us objectionable as well. However, it is my sincere opinion that the other FairTax supporters genuinely and sincerely want to leave a much freer and less economically destructive system than we have now to future generations and we are generally frustrated that this process is taking so long. I frequently have to answer a question like this from newcomers: "this is a no-brainer, why haven't we passed it before now?"
I have a campaign flyer from the 1976 presidential campaign in which the Democratic nominee referred to the Internal Revenue Code as "a disgrace". I think most Americans would agree that Mr. Carter was correct back then (almost 30 years ago now) and that the system is far worse today than it was then. For example, according to CCH, the total tax system has more than doubled in page length and compliance costs have probably risen proportionately during that span of time. We have a system which seems to grow like a cancer, have a will of its own and to be totally and completely out of control. No one understands it (and I can cite chapter and verse to prove that assertion), and yet each year it gets worse. The IRS is by far the most abusive and un-American federal agency that we have and it should surprise no one that, as Bob Novak is now reporting, congress may have to open up hearings on IRS abuses yet again.
This all begs the question: we have the greatest country in the world and we can put a man on the moon and win two world wars but we can't figure out a simple and efficient way to tax ourselves? What is wrong with this picture? That is the question that the naysayers cannot answer.
I wonder why some posters hide their real reason for opposing tax reform?
Could it be that juststayinatextbook has such minimal experience in the real world that he really didn't know this? No, nobody is that ignorant. He's just lying about his real reason for rejecting reform.
"Odd that justanidiotliar hasn't replied to this.
I wonder why some posters hide their real reason for opposing tax reform?
Could it be that juststayinatextbook has such minimal experience in the real world that he really didn't know this? No, nobody is that ignorant. He's just lying about his real reason for rejecting reform."
That is possible, but I wouldn't rule out the possibility that he is sincere and that he really doesn't know what an expense is. The fact that he seems so smug and arrogant is what leads me in that direction. If I were espousing a position that I knew to be incorrect, I sure as heck wouldn't be smug and arrogant about it. However, I'm not good at duplicity, so maybe that's just me.
Who knows. I just know that his attempts to bend accounting and economics to fit his animus for the FairTax are laughable. But hey, as the Ancient One says, they keep the thread going. Perhaps they also make all the SQLs look irrational and desperate.
Banks generally secure their loans with collateral and make them based upon cash flow projections which are not the same as profit projections.
Be that as it may the descriptions of pricing from advocates of this new tax scheme are utterly at odds with those who study microeconomics. Believe the former if you like just don't expect those who have actually bothered to study these things to follow you.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.