Posted on 11/06/2002 1:39:57 PM PST by Tree of Liberty
Neil Cavuto just interviewed Mitchell E. Daniels, Jr., the director of the OMB, and Neil let it be known that he's hearing rumblings that Pres. Bush is considering a total re-write of the tax code and that SecTreas O'Neill is strongly pushing a national retail sales tax!
(e.g., LewisLynn linked to a study from a reputable source that showed the opposite of NRST contentions).
I've seen Lewislynn's sources, they usually end up saying opposite of what he contends, or has a heavy political agenda in favor of the status quo or a VAT. Neither of which I care to support.
You find anything different and we will discuss it.
It may be spent on fine art, existing mansions, etc.
Improvements on existing homes(i.e. making the mansions) are taxable consumption. etc. Any money spent on investement whatever it nature goes where it will be spent for more mundane consumption in any case.
Somehow I fail to worry over apparent concerns of where rich folks put there money. Seems to be a personal problem for you though.
I have repeatedly asked you for material dealing with distributional effect
None exist in the form you wish, Mastromarco and Jorgensen's studies address the issues via model and links to that material has been provide which you say you have not studied.
I can lead a horse to water, not much more than that.
This may be true, but to date it bears more on the issues of interest to me
That's good but when you get something that actually bears on the issues of others in regard to the NRST and it impact through "consuption expenditure" as opposed to ill defined measures of "income" let me know.
I have compared average effects by income level.
How do you manage that without detailed information about expenditure levels as they relate to pre-earned as well as currently earned income.
If you are wondering whether I recognize that any given group contains a range of separate situations the answer is, of course, yes. Analyses of this kind all draw conclusions from aggregated data with that understanding.
Remember the tables you pointed out to me as applicable to distribution of the tax burdent, showing expenditure of more than $17,000 on a avg income of $1,500 by persons owning homes worth $40K. I would like to know how those in what could be termed real "poverty" fair in comparison to those how could be considered to be better off than poverty level.
How those forced to a life of poverty as opposed those capable of living at high expenditure levels is your concern as regard distribution of the tax burden isn't it?
Knowing that you only work with snapshot data, I would like to know how you separate groups into classifications that are meaningful, without using lifetime income/expenditure measures? That seems key to leaning about the NRST tax burden in comparison with other tax systems.
Hmmm "does" or "can"?
A necessity is by definition that which is necessary. So how can you avoid buying necessities? They are necessary, required, essential, compulsory, obigatory, indispensable, etc.
There can be no accumulation of the rebate to an individual for this reason. Hence the "redistribution" you appear fixated upon is not germane.
Every single family who wished to receive the "prebate" may do so. The prebate is simply the tax money that a family will spend on necessities. Hence necessities become untaxed. I don't think the necessities of life should be taxed, do you? You realize, of course, that the necessities of life ARE being taxed right now?
If some individual starves himself in order to pocket a few bucks, he'll start a mass wave of "hungry for dollars" campaigns across the nation!
BTW I obviously don't think there's any redistribution of wealth going on with this proposal. Redistribution is the policy of taking from one in order to give to another. I am violently opposed to redistribution schemes such as, say, I don't know....maybe THE FEDERAL INCOME TAX CODE!
Anything I can do to minimize redistribution I dang well do.
If the real reason is just to offset the tax on "necessities", why not simply make them tax free in the first place
If the objective is to not tax necessities, then why not simply not tax those items in the first place?
Who gets to define necessity for you?
The FCA mechanism allows you the individual to define your necessity by your situation and actual purchases. Exempting particular goods leaves the choice to the government via lobbyists pushing advantage for their client's particular "necessity."
Personally I prefer to make the choice of what constitutes necessity by what I actually purchase than by what Politicians or worse bureaucrats by arbitrary regulation choose to allow for "tax free" purchase.
The existence of such a system (and the associated bureaucracy, which would have a scope just as wide as that of the IRS
The bureaucracy and data already exists with no addition to scope, and without the IRS. The Social Security Administration, where the legislation places that responsibility of receiving application for the FCA in accord with household size measured by number of legal residents in the household.
I fail to see any new, and infact a reduction in bureaucracy under the FCA mechanism of the NRST. Making specific items exempt instead of FCA, does nothing to change the bureaucracy required whatsoever. Exempting particular good through political processes does ,however, assure that you'll be paying taxes on things that you personally consider a necessity in your particular situtation.
When I suggest adjustments to merely make the NRST more comparable to the current distribution of tax burden, you consider it a full blown attack on the essence of NRST. How come?
1)Technogeeb is not suggesting that we should hide the tax burden from view of the general electorate nor treat one individual different from another such as the Tobin Tax would.
2) Technogeeb is not suggesting that we increase the tax/FCA rate to compensate for what you feel to be insufficient progressivity.
I can live with particular items tax free, I do however expect that everyone perceive the tax burden equally in terms of rate paid at the register.
Your system would maintain a defacto division in society, those who pay the Tobin Tax and can perceive its effect on their livelyhood, and those who do not. A perceive "Poor" against the perceived "Rich". Such distinctions are tearing this nation apart and warping the judgement of the electorate as a whole.
The NRST is applied the same with every person regardless of economic station. All pay the same rate of tax, all receive the same per person FCA. No artificial distinctions of one group of citizens over another.
That is also known as equal protection of the law. A fundamental concept in our constitution.
Im curious. When Technogeeb worries that one of the two establishment parties may actually have a communist intent with regard to FCA, you consider him, perhaps, overly hyperbolic but otherwise aligned with your support of NRST. When I suggest adjustments to merely make the NRST more comparable to the current distribution of tax burden, you consider it a full blown attack on the essence of NRST. How come?
I didn't read his response at all like you apparently have chosen to, then again, I retained the context. I understand your mischaracterization. Not as bad as Technogeeb mischaracterization of the FCA as a "redistribution mechanism"877 -- despite having it previously explained to him that it's not redistribution because every household receives an equal size check each month. That is, all single-person households get the same check as do all two-person house holds get the same check as do three-person households get the same check, etc. The distribution is equivalent and not even mandatory. Any person can chose not to receive the monthly checks and mostly that will be the upper income persons that will let their equal share remain as tax revenue. In that sense people by free choice can volunteer to pay more taxes which is very different than having the government with gun-to the-head forcing upper-income persons to pay more taxes.
Taxation is necessary to gain revenue but honest principle, integrity, honoring and protecting individual life-and-property rights are primary unit. All those in bold are violated when taxes are imposed greater on one group than another. It sacrifices a portion of the individual for the supposed betterment of the group. It is collectivist groupthink. Like voting for the lesser of evils always begets evil -- how so many people thinking they're right can be so wrong. Politics, and especially reflected in politics of taxation, suck. Politics suck objectivity out and insert irrationality in. Individual life-and-property rights are primary and must be protected, honored and respected -- not sacrificed.
In practice the FCA is this: For each single-person household the government acknowledges that each of those persons is going to pay $170 in NRST on the necessities they buy each month. Thus, because the government doesn't know which specific necessities each of those millions of single-person households are going to buy rather than exempt a slew of different items that would cause even more politicians and bureaucrats committing "look busy" partisan bickering (work) and special interests' "bribery" forever fighting over what should be exempt and not exempt the government won't exempt anything and just send each single-person household a $170 check each month. Thus cutting out the partisan bickering and special interest bribes that are partially responsible for creating the leviathan government in the first place.
I feel the middle class already carries a disproportionate share of the burden.
You are welcome to your opinion.
The data suggests that the upper income class pays more tax in proportion to their income than any other class. It also supports the conclusion that the middle class pays less tax in proportion to their income than the average rate would provide.
Obviously I do not agree with your assessment.
In any case, my prime guide is not who pays the most or least for that matter, rather what is the effect upon liberty privacy and the ability of the electorate to hold government accountable for its excesses through their knowlegable assessment of government burden vs government benefit.
The current system is severly skewed in perception of the electorate in favor of growth and ever more powerful government at the expense of a minority of citizens.
The Honorable James DeMint (R-SC)
United States House of RepresentativesTHURSDAY, APRIL 5, 2001
12:00 noon"In 1996, Congress passed a historic welfare reform law that has dramatically reduced the number of Americans who depend on welfare. In spite of this positive development, Representative DeMint is concerned about the steady growth of a welfare/entitlement state that extends well beyond the poor and is forcing millions of middle income Americans into dependency.
There has been a shift in the relationship between individuals and government, he argues, such that fewer and fewer are paying taxes at the same time that more and more are receiving increasingly generous benefits. If it becomes the case that most voters do not bear a financial burden for this largess, then there will be little to restrain--and significant political incentives to encourage--the continued growth of government. And at that point, DeMint warns, we have reached a major crisis in our democracy."
Milton Friedman as quoted by Northwest Florida Daily News, 10-16-2000:
If that is really true, then it is self-evidently the most idiotic thing any member of Congress has ever proposed.
You leaving out the personal exemptions and standard deductions of the income tax, and EITC in your reconning?
Congress has always been rather idiotic. If they weren't I would prefer no FCA or excepted goods under the NRST at all.
Problem is, a strong majority of Congress is rather idiotic in what they do, at least mercenary in their intent.
A government which robs Peter to pay Paul can always depend on the support of Paul.
-George Bernard Shaw
Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting public clamors for more from government looking for the top 40% of income earners/producers to foot the bill. That perception continues to grow ever stronger by eliminating even more participants from the Federal Individual Income Tax rolls as proposed in the tax reduction proposals through changes in personal exemption limits and other mechanisms such as the EITC.
Congress plays both ends against the middle; hiding the real burden in inflation, higher prices on all goods and services, lower takehome pay, lower return on investment, and higher interest rates. All keeping the poor right where they are and pushing for more freebees.
That shell game has to end. The NRST is a solid means to achieve that.
I think you're being a bit naive to believe it would eliminate such. Instead, I see the "partisan bickering" moving to the subject of the amount of the "prebate", with continual increases in this amount (automatic cost of living adjustments, increases to special interest groups such as people that need to purchase AIDS medicines, etc)
With an increased tax rate for baby diapers, AIDs medications, etc. to go right along with it.
Perceived cost vs benefit to the majority, will be the rule of elections. Not cost vs benefit to minority interest as it is today where most taxes are hidden from view from the majority of the electorate.
until the worst fears of a socialist state are realized.
And exemption of specific goods and services selected by special interest pressure and desire to social engineering is going to prevent this how?
The real issue comes down to what the American people will allow given knowledge of cost of government intimately in their lives as opposed to special interest benefits they can garner.
FCA allows perception of the cost when NRST is paid at the register by everyone all the time.
Exemption of goods and services creates classes of folks who perceive little to no cost with respect to received benefit.
Under the current system, those receiving the benefits are not those who perceive the burden and out vote the burdened minority. Exemption of tax payment of any sort perpetuates that creation of taxpayers vs benefit receivers whether under an goods exempted NRST or Income/Vat system.
The FCA/NRST system requires payment of the tax regardless of benefit, thus provides a clear perception of cost, as well as perception of benefit.
If the burden is not perceived by certain groups of voters, how can they possibly be motivated to hold government accountable for excess.
"Let virtue, honor, the love of liberty ... be ... the soul of this constitution, and it will become the source of great and extensive happiness to this and future generations. Vice, ignorance, and want of vigilance, will be the only enemies able to destroy it."
-- John Jay, co-author of the Federalist Papers and, later, Chief Justice of the supreme Court
"Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives."
-- James Madison (Letter to W.T. Barry, August 4, 1822)
That is the purpose of assuring that everyone pay a tax at the register on all goods and at rates equal to those of everyone else, that the burden be perceived as well as any benefit or largess arising of ones own particular situtation.
Since the (supposed) desired purpose of this mechanism is merely to offset taxes paid on "necessities",
Merely to offset, is not true. The FCA helps prevent a class of citizen from not paying any tax at all, by assuring everyone pays the same tax rate on all the retail goods and services they purchase.
Exemption of payment of a tax creates tax privileged groups as readily under a retail sales tax as under a graduated income tax.
FCA assures the basics as determined by the citizen are covered. But all products remain taxed for all citizens regardless of personal circumstance. All citizens remain intimately cognizant of cost of government in their daily lives, from the poorest to the richest, from those who receive much from government to those who receive none. They all share in the payment of tax due at the retail register.
It is only in knowledge that we can exercise vigilence and hold government accountable. Everyone must participate in the tax system even the poorest among us.
Argue to get rid of the FCA, and I could agree as a matter of principle. Don't argue that we must relieve groups of folks from participation which the exemption of a broadrange of "necessity" goods and services would create.
Zon: Not as bad as Technogeeb mischaracterization of the FCA as a "redistribution mechanism"877 -- despite having it previously explained to him that it's not redistribution because every household receives an equal size check each month. 888
If every household receives an equal size check each month, then this is redistribution.
As I said and you, oh so conveniently omitted (in bold): "every household receives an equal size check each month. That is, all single-person households get the same check as do all two-person house holds get the same check as do three-person households get the same check, etc." Not all households receive the same size check because not all households have the same number of people.
Why not eliminate this problem and instead of creating a bureaucracy (which introduces the risk of overt socialism whenever some future administration decides to implement it), simply make things that are deemed "necessities" tax free?
Their will be no bureaucracy needed beyond a household telling the government how many people are in the household and the government sending them a check each month thereafter. As I said in my last post:
(which introduces the risk of overt socialism whenever some future administration decides to implement it), simply make things that are deemed "necessities" tax free?
I gave the rationale in my last post to you:
Zon: ...rather than exempt a slew of different items that would cause even more politicians and bureaucrats committing "look busy" partisan bickering (work) and special interests' "bribery" forever fighting over what should be exempt and not exempt the government won't exempt anything and just send each single-person household a $170 check each month. Thus cutting out the partisan bickering and special interest bribes that are partially responsible for creating the leviathan government in the first place. 888
That irrational will not exist with the rational FCA. But that's the irrationality and bureaucracy that you'd get by exempting necessities.
Instead, I see the "partisan bickering" moving to the subject of the amount of the "prebate", with continual increases in this amount (automatic cost of living adjustments, increases to special interest groups such as people that need to purchase AIDS medicines, etc) until the worst fears of a socialist state are realized.
You claim to argue against socialism while at the same time you either ignorantly or intentionally make arguments in favor of socialist/fascist tax-and-control mechanism -- controlled by bickering politicians, bureaucrats and special interest group/lobbyist bribery. The present graduated income tax is a socialist/fascist control mechanism. I won't stoop to your hyperbole and call it the worst socialist state already realized. The NRST is not a socialist tax-and-control system of collecting revenue. Yet you claim the NRST would be a socialist tax-and-control mechanism that would be worse than the present tax-and-control system.
(automatic cost of living adjustments, increases to special interest groups such as people that need to purchase AIDS medicines, etc)
That's what you get via exempting necessities from NRST: special interest groups "bribing" government officials to get AIDS medicines and etcetera exempt from the NRST. Plus, politicians campaigning on the benefits to specific groups of people rather than benefits to equals/individuals. As if any group can be proclaimed from on high to be more important or deserving then one person or one individual.
Your attempts to paint the FCA as a redistribution scheme and the NRST as a socialist tax-and-control mechanism is disingenuous or ignorance at best and intent to deceive at worst.
While you are working on the nominal issue of decreasing the rate, I am working on the important issue of decreasing the amount and keeping the distribution of tax burden as it is, currently. When I suggest increasing the FCA and the tax rate you oppose raising the rate as if you think a higher tax will be paid. Youre wrong. If FCA and rate\are both raised in proper proportions it merely changes distribution of the tax not the amount of it.
The state tax authorities, who charter and licenses retail businesses and keep track of em for tax purposes, don't seem to have much trouble with such. 80 percent of retail sales go through 10% of the businesses.
The shenanigans will be at all businesses not just retail businesses. For example, businesses can give cars to key employees as business expenses rather than give higher salaries so employees can buy their own cars (and hundreds of things like that). Also, are you not aware of the level of cheating on sales tax?
You really should watch your "it seems", "I say", "I think", and keep the discussion to something less than total speculation.
You do the same thing but put forth your opinion as objective truth. Im being more honest and humble.
Somehow I fail to worry over apparent concerns of where rich folks put there money. Seems to be a personal problem for you though.
You conclude this from what? The fact that I prefer not to shift the tax burden from the upper incomes to the middle class?
Deuce: I have repeatedly asked you for material dealing with distributional effect
Ancient_Geezer: None exist in the form you wish, Mastromarco and Jorgensen's studies address the issues via model and links to that material has been provide which you say you have not studied.
I am interested in the distribution of tax burden. Most people are going to want to know this if this concept ever gets off the ground. Knowing that the tax burden is shifted downward, however much you welcome it, is not a feature likely to gain broad based popular appeal.
Upper income class pays more tax in proportion to income than any other class.
As a group, they also pay a smaller portion of their wealth and less than the benefits they receive.
There is nothing in the system to prevent an administration from increasing the default payout to every household to be equal to the average income of every citizen.
"The FCA will be paid in advance, in equal installments each month. The size of the monthly FCA will be determined by the government's Poverty Level for a particular family size, multiplied by the tax rate. Every year, the Department of Health and Human Services [HHS] determine the "poverty level" for each family size."
[ The monthly FCA for each adult is .23 * (HSS poverty level for a single person)/12 to assure no marriage penalty due to the manner in which the poverty level is dependant on family size. The monthly FCA for each child is .23 * (the incremental increase of HSS poverty level for a family with one child over no child) ] A. Geezer 68
There's the mechanism that prevents an administration from increasing the payout beyond the poverty level.
Zon: That's what you get via exempting necessities from NRST: special interest groups "bribing" government officials to get AIDS medicines and etcetera exempt from the NRST 895
So?
Ah, your true colors seep through. Dishonesty is okay with you. I already knew that but thanks for making it so clear.
Zon: Plus, politicians campaigning on the benefits to specific groups of people rather than benefits to equals/individuals. As if any group can be proclaimed from on high to be more important or deserving then one person or one individual. 895
Choosing not to charge taxes on some product does nothing to unequalize any consumer. There is nothing in a pure national sales tax that would require any particular group to pay a higher taxation rate, or give an exemption from taxation to any other group.
It certainly does when politicians campaign based on catering to special interest groups with the intent of pushing a Bill through congress to exempt certain items not based on necessity, but rather, based on a certain group of people as promoted by a special interest group's lobbyist lobbying members of congress. It "unequalizes" because only certain special interest groups get exemption and other groups and individuals do not get an exemption and/or certain procedures or medicines are exempt when others aren't exempt. For example, AIDS sufferers get exemptions but glaucoma and Alzheimer's suffers don't.
Also, as AG wrote: "Exemption of goods and services creates classes of folks who perceive little to no cost with respect to received benefit." 893
Zon: Your attempts to paint the ...NRST as a socialist tax-and-control mechanism is disingenuous or ignorance at best and intent to deceive at worst. 895
Now you're either confused or deliberately lying. I haven't said ANYTHING negative about a national sales tax; I just don't want the social welfare state that the "prebate" system naturally and inevitably provides.
Here, I'll quote you:
Technogeeb: "I think you're being a bit naive to believe it would eliminate such. Instead, I see the "partisan bickering" moving to the subject of the amount of the "prebate", with continual increases in this amount (automatic cost of living adjustments, increases to special interest groups such as people that need to purchase AIDS medicines, etc) until the worst fears of a socialist state are realized." 891
The FCA "prebate" is integral to the NRST and is not a socialist mechanism no matter how loudly you proclaim it is. I'm not lying. If I'm confused it's because of trying to cut through your hyperbole. Thus it is you that initiated the confusion. But then again you did say "until the worst fears of a socialist state are realized." Which you claim isn't hyperbole. You can't have it both ways -- either you meant it as hyperbole or you meant it seriously. I took it as serious.
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.