Posted on 04/20/2005 1:25:07 PM PDT by CHARLITE
you must be one of those trust fund babiesDamn, you found me out. I could own all of you!
HR25 is a progressive tax, wealth will be taxed...and right now it isn'tWealth has been taxed. That's the point.
The truly wealthy are not taxed under our current system.Sure they are.
Remember Teresa?--15%15%? I thought the wealthy weren't taxed.
Ok, we will leave state taxes out and replace them with the "corporate" (cost of doing business) taxes that are passed on to you when you buy goods and services. They will go away with the fair tax and they are being paid by proxy to the federal government. You do pay federal taxes on gas, so those still make you paying taxes to the same entity also.
"A switch to a sales tax is a tax on current wealth."
That criticism could be levelled at all consumption taxes, not just the FairTax. Therefore, it is interesting to see the point brought up by someone who claims that he favors a consumption tax.
"A switch to a sales tax is a tax on current wealth."
A switch to a consumption tax would also greatly expand the economy and significantly increase the value of equities. Guess who would benefit the most from that?
"You really need to understand real values. Today, if I get a $10,000 gift and pay no income taxes on it, I can buy $10,000 worth of stuff. It's real value is $10,000. With the FairTax, if I get a $10,000 gift, I can only buy $7,700 worth of stuff. It's real value is $7,700."
Of course, you ignore the fact that if that $7,700 worth of "stuff" were produced in the USA, it would have cost approximately $10,000 under the current tax system.
"That's significantly less than the 23% FairTax rate."
As you know the EFFECTIVE rate of the FairTax only approaches (but never quite reaches) 23% only for relatively high consumption levels. In fact, those consuming exactly at the poverty level will have a 0% effective rate - and that doesn't count the benefit of seeing pre-tax prices of US produced goods decline. In effect, there is an INCREASE in purchasing power up to the poverty level.
Two polls - Vote now!!
http://gogov.com/frpoll.htm
http://www.gopusa.com/
That criticism could be levelled at all consumption taxes, not just the FairTax. Therefore, it is interesting to see the point brought up by someone who claims that he favors a consumption tax.Explain to me how $100,000 in a bank right now would be taxed under a flat tax.
"Explain to me how $100,000 in a bank right now would be taxed under a flat tax."
You are right. I guess a flat tax isn't a consumption tax after all, is it?
Of course, you ignore the fact that if that $7,700 worth of "stuff" were produced in the USA, it would have cost approximately $10,000 under the current tax system.And you ignore the fact that the only way prices can drop like that is if wages are reduced. And since wages can't be reduced across the board, price almost certainly won't be going down.
As you know the EFFECTIVE rate of the FairTax only approaches (but never quite reaches) 23% only for relatively high consumption levels.They would have to be very poor to approach an 5.4% effective rate under the FairTax.
In fact, those consuming exactly at the poverty level will have a 0% effective rateThat's not true. People consuming exactly at the poverty level will have a higher than 0% effective rate. It's closer to 4%.
that doesn't count the benefit of seeing pre-tax prices of US produced goods decline.But they won't. Are you still singing that tune?
You are right. I guess a flat tax isn't a consumption tax after all, is it?Yes it is but it doesn't double tax money people have in the bank at transition. Don't you think that's a benefit of the flat tax?
BINGO!
You had to make 130,000 to wind up with that 100,000 in the bank. Under NRST the playing field is leveled for those still trying to create wealth. As Rush said on his show yesterday: "An income tax is a tax on the creation of wealth."
Under NRST you have to make 100,000 to have 100,000 in the bank. You spend it when you want, OR, you save it and never, ever, ever pay any taxes on it.
You had to make 130,000 to wind up with that 100,000 in the bank. Under NRST the playing field is leveled for those still trying to create wealth.But it is worth $100,000 of goods and services.
Under NRST you have to make 100,000 to have 100,000 in the bank. You spend it when you want, OR, you save it and never, ever, ever pay any taxes on it.But to get $100,000 worth of goods and services under the FairTax I would have to have/make $130,000. The real value is the same.
It doesn't matter if you spend it or leave it in the bank it's still only worth $77,000.
Technically it's not even worth $77,000 when you consider the gross payment tax taxes 30% on any other taxes, fees, excises etc. that might be included in a gross payment.
Agreed. But you miss one major point. If I am creating wealth I am not spending 100% of my income on goods and services. I am only spending a portion of that income. The portion that I save to create wealth compounds tax free (faster) and the portion that I spend generates the tax revenue at my convenience (over and above the poverty level).
As it is now I am penalized for creating the income that creates wealth and I am penalized for creating wealth from the remainder of that income that I have not spent. Even if I utilize the government's frickin' benevolence at letting me put only a statutory amount of money away tax deferred I still must pay taxes on it when I take it out. And don't give me that "your taxes will be lower when you retire" nonsense. If I am successful in creating wealth I should have a lot of income when I retire.
See my post #55.
And if it's not in a retirement plan, then will you admit that it is a double tax?
It doesn't change the fact that the wealth you created would be worth 23% less than it's face value...
You can run but you can't hide.
As it is now I am penalized for creating the income that creates wealth and I am penalized for creating wealth from the remainder of that income that I have not spent. Even if I utilize the government's frickin' benevolence at letting me put only a statutory amount of money away tax deferred I still must pay taxes on it when I take it out. And don't give me that "your taxes will be lower when you retire" nonsense. If I am successful in creating wealth I should have a lot of income when I retire.But the wealth is worth less because you will be taxed when you spend it. You will get a higher real return under a consumption tax (any consumption tax including a flat tax), but it's not as great as you think.
Are you stubborn as a mule? If I don't spend it it is not worth 23% less. It is worth 100% of its value as a base to build wealth off of. Wealth is built upon assets that compound or grow but a portion of one's income has to be the catalyst to germinate the growth. If I am creating wealth I am not spending a portion of my income.
You can run but you can't hide.
You can be snide but you are still wrong. I wish you had some breeding.
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