Posted on 05/12/2005 12:25:08 AM PDT by FairOpinion
WASHINGTON - A presidential commission looking into how to make income taxes fairer and simpler heard pitches Wednesday from experts with ideas about revamping or replacing the current system.
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The commission examined plans to base taxes on spending rather than income, which could mean a national sales tax or a European-style value-added tax.
As for transforming the income tax, the commission heard proposals for comprehensive change and minor tinkering.
"Not one person who we encountered as we traveled the country told us that our current tax system was good for America and that we should leave it alone," said the commission's chairman, former GOP. Sen. Connie Mack of Florida.
After hearing complaints about tax laws, the President's Advisory Panel on Federal Tax Reform used this meeting to consider ways to replace the system.
Michael Graetz, a Yale Law School professor, offered an outline of how to meld income taxes with a value-added tax. That tax, used widely in Europe, imposes a levy on the increased value of a product at each stage of production.
Under his plan, consumers would see a 13 percent to 14 percent value-added tax appear on their purchases.
Individuals earning less than $50,000 and families making under $100,000 no longer would pay income taxes under such a plan. Those still paying income taxes would get a simplified system and a top tax rate of 25 percent.
"I am very skeptical that you can fix the income tax," Graetz said.
Federal Reserve Chairman Alan Greenspan has told the commission that he supports some combination of income and consumption taxes as a catalyst for economic growth. Others have warned about the dangers of a poorly designed hybrid.
A consumption tax could take the form of a national retail sales tax, a potential replacement for income, estate and payroll taxes. Americans for Fair Taxation offered a plan setting a 23 percent sales tax on purchases, with exemptions for the poor.
An alternate plan, offered by David Burton of the Free Enterprise Fund, would reduce the rate to 8.4 percent for individuals by also levying the tax on businesses.
In the event the current income tax was retained, experts made the case for ways to promote savings and to simplify credits and deductions.
That could mean letting businesses immediately expense their investments and expanding individuals' ability to save money tax free.
"Why go searching for some new, magic elixir with unknown results?" said Ernest Christian, director of the Center for Strategic Tax Reform. He said the value-added tax was an "exotic import" at odds with the U.S. tax experience.
Others endorsed keeping the incentives for homeownership and charitable giving that President Bush wants preserved, while reducing the many other deductions and credits now available.
The commission, which expects to make final recommendations this summer, discussed options for a flat tax that eliminates deductions and credits, reduces income tax rates and erases taxes on investment income.
"There's not a human being alive today who knows what's in the code," said Steve Forbes, a one-time presidential contender who favors the flat tax.
Commission members asked about how the country could shift to such a tax, wanting to make sure the government got the revenue it needed during that transition.
Former Sen. John Breaux (news, bio, voting record), D-La., the commission's vice chairman, asked whether people could accept a system that taxes wages but not investment income. Others raised questions about eliminating the current system's progressive tax rates.
Former Rep. Dick Armey, R-Texas, said it is a "big job" to convince voters that the poor and wealthy could benefit from a flat tax.
"What's fair is to treat everybody exactly the same as everybody else," he said.
You've been peeking, haven't you???
I have no idea what that means.
As I've noticed,
BTW, the tax base isn't 100% of your income.
Neither is the taxbase of an NRST.
The following, however, is a table of effective total tax rates based on what is commonly perceived as spendable income, as measured by TaxFoundation:
refer Tax Freedom Day 2005 report PDF: Special Report No.134, April 2005
|
Total Effective Tax Rates by Level of Government |
|||
| Year | Federal | State | Total |
| 1996 | 21.3% | 10.4% | 31.6% |
| 1997 | 21.8% | 10.3% | 32.1% |
| 1998 | 22.4% | 10.4% | 32.8% |
| 19990 | 22.5% | 10.4% | 32.9% |
| 2000 | 23.1% | 10.4% | 33.5% |
| 2001 | 22.2% | 10.5% | 32.7% |
| 2002 1 | 19.6% | 10.2% | 29.8% |
| 2003 2 | 18.8% | 10.1% | 28.9% |
| 2004 3 | 18.4% | 10.2% | 28.6% |
| 2005 | 19.0% | 10.1% | 29.1% |
| Notes: Leap day is omitted to make dates comparable over time. Since depreciation is not available to pay taxes, GDP is an overstatement of spendable income for the purpose of measuring tax burdens. Depreciation is netted out of NNP. "Overall, NNP provides the best statistical representation of the common notion of “spendable” resources. In 2004 NNP was $10,371.6 billion. Like GDP and PI, NNP is a component of the National Income Product Accounts (NIPA). These accounts are computed and compiled annually by the Commerce Depart-ment’s Bureau of Economic Analysis (BEA)." 0 First year introduction of HR2525(Fair Tax legislation). 1 Economic Growth and Tax Reform Reconciliation Act of 2001 Sources: Office of Management and Budget; Internal Revenue Service; Congressional Research Service; National Bureau of Economic Research; Treasury Department; and Tax Foundation calculations. |
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"No, I am arguing against lies. Keeping track of income (which is reported to you) and a handful of receipts is much easier to account for than maintaining records for every penny you spend. Remember, if you don't have proper reciepts you are liable for sales tax on all your purchases. Where is all the freedom that they profess???"
This is getting really silly. I don't think it is worth wasting any more bandwidth on.
I think that the issue will be what is better and will also sell.
My guess is that a 3 or 4 tiered flatter tax, with deductions for house and retirement nest egg, will sell.
"If they recieve lots of packages from foreign countries, it is highly likely that they are trying to avoid paying sales tax and would raise red flags to tax auditors."
How would the "sale tax police" know how many packages from foreign countries individuals are receiving?
Your paranoia is really quite amusing. Do you have any rational arguments against the FairTax?
I don't know what that has to do with exclusive tax rates on income so I guess you concede I'm right. It is not possible to calculate exclusive tax rates ON income.
However, from your link:
"However, an intermediate measure, net national product (NNP) is a superior mea-sure when calculating tax burdens. It best represents the “spendable” income earned by taxpayers (individuals and businesses). This is the income that is available to taxpay-ers for the payment of taxes.Funny, you, and apparently the Tax Foundation, call "spendable income" as money "available to taxpay-ers for the payment of taxes"
I call "spendable income" as money I can spend AFTER taxes....
I don't know what that has to do with exclusive tax rates on income
Nothing at all, other than a rhetorical device to help you around to the capacity of recogizing the basis of the tax exclusive rate as regards income.
so I guess you concede I'm right.
Not quite but with just a little effort and thought on the matter, you too can be right.
I call "spendable income" as money I can spend AFTER taxes....
Great, now it is clear you grasp the base of an exclusive tax rate with regard to income.
The base of the tax exclusive rate is a specified amount of net income on which taxes are added to determine the gross income one must earn to receive a specified net income.
The tax exclusive rate is calculated from a specified tax inclusive rate as demonstrated in:
| The Wrong Camera: The Denominator of the Tax Incidence Equation. Dan R. Mastromarco; LLM, Argus Group, Washington D.C. Tax Analysts Document Number: Doc 1999-32575 Citations: (October 8, 1999) B. Use a Consistent Size Screen to Portray It. [120] Presentation of a rate of tax on a tax-exclusive basis simply means that the rate of the tax is expressed as the tax paid over a base determined after the tax was already imposed (for example, taxable income under our personal income tax system that is net of the tax). In other words, a tax-exclusive rate would be defined as: $ tax paid [121] The rate therefore reflects the ratio of taxes paid to what is left in the base, such as net of tax income. |
Glad you finally figured it out.
Amazing. This is a statement from an unfortunate indidvidual who accepts the status quo. Ll you have an affinity for after tax income. This speaks volumes about your agenda. It is easy as hell to see the agenda of Always Right, a little more difficult to see the agenda of YN, and it has been incredibly difficult to understand your agenda. Of course I am assuming that you and YN have an agenda to keep the status quo but I don't think that is such a stretch. I can't, for the life of me, understand how you and YN can oppose something that is so good for the economy and so good for business. But, then again, you have a propensity to use little stingers like "get it" and often use personal slurs. You dwell on incredibly minute items that have not even been finalized. You are condemning a law that hasn't been written. Could that be called paranoia?
It certainly can. I really don't know why we are wasting our time with you on this board but I do give you the waste of time of debate. It is valuable. But it seems to me that when you debate a prevaricater you only get frustrated. Are you going to continue to harp on the grosss vs. net payment? Are you going to continue to use subtle insults at the end of all your posts? If so I will remind you once again that you are in my crosshairs. I will do everything I can to discredit you and I am finding that task easy.
to #69:
“At most the provider of labor collects the tax from the purchaser at time of sale, for remittence to government,”
And that’s the rub. The only way that the government will turn me into their tax collector, IS at the barrel of a gun, heh he.
“So? You figure taxes collected from you on the basis of property owned or used is in some way any better?”
Huh? Didn’t I already say that ANY tax that prohibits true ownership is criminal?
“Sorry, that's just the way it is. Couple that with the fact that the constitution provides direct authority”
Just the way it is? Well why are we talking about changing the system at all then? I was actually under the impression that we were all here talking about the way it “should be” because the “way it is” sucks..? And also, with your impressive archival knowledge of the federalist papers, founder intents and constitution et al, you should know that income tax was flatly illegal for the better part of our nations history. Actually, it was found unconstitutional a few times before 1913. We have only been drowning in this terrible system for 85 years or so.
“In fact under the current income/payroll system that taxes both business and individuals. In fact many individuals pay at the front when wages are earned, then again through embedded tax burdens in the price of goods and services that are paying for:”
You are preaching to the choir here. I already know how ridiculous the standing system is. That is why I want to return to something closer to the founders vision. Your losing me here when trying to establish that the current state of affairs is acceptable and reasonable.
What really gets me is that we are basically on the same team here, in wanting to see the current system die a fiery death. I just think that the Feds will screw up the sales tax system, six ways to Sunday before it gets implemented and they will never give up any level of control on commerce. They probably won’t even give up the income tax; just make it real low… for a while anyway.
I just do not want to have to have a microchip in my hand to buy/trade things because the poor poor federal government is having “compliance” problems with the new system. Do you see that point or just like to argue?
on #84
unfortunately, we are still a super minority that understand that issue of freedom. Under the styles and types of taxes we have today (as apposed to the three constitutional forms), true ownership is not possible. even if you do all the right things and "pay your taxes" while earning a small fortune over the span of your life... you still get hit with death taxes, ha! your whole estate that has had taxes taken out of it already as you earned it, gets whacked for another 40-50% just cause you died, Jeeze!
What I meant to say with the earlier point about having lost even the ownership of your own labor is that the government has set into law an entitlement to every third hour of your labor or, in a high tax bracket; every other hour of your labor and sweat. the only place this state ownership of a man's labor used to be legal was in communist countries but, those ideas have perculated through the years and now many have accepted that we are merely possesions of the government.
It's really depressing to think of sometimes when I know 80% or more of my nieghbors think that is totally fine. sheesh!
And that’s the rub. The only way that the government will turn me into their tax collector, IS at the barrel of a gun, heh he.
That's fine, simple alternatives exist to being a retail vendor under a NRST, sell to businesses, be employed by a business, invest to the point where returns are sufficient to support yourself, or a combination of all the above.
Huh? Didn’t I already say that ANY tax that prohibits true ownership is criminal?
In otherwords you object to a tax on any product, e.g any of the exises and tariffs ,that have been common thoughout our history non-payment of any of which would deny you the benefit of ownership of the taxed items.
Well why are we talking about changing the system at all then?
Primarily because the current income/payroll tax system severly retards production and the economic growth, discourages savings and investment, deeply intrudes into the financial privacy of the citizen, has as one of it main claims to glory is its capacity for social and economic engineering, ...
I was actually under the impression that we were all here talking about the way it “should be” because the “way it is” sucks..?
I'm primarily interest in what is within the realm of achievable over mere hopes that lack any feasible method of getting there.
Your losing me here when trying to establish that the current state of affairs is acceptable and reasonable.
Hardly holding a thing to be constitutional is in anyway associated with its being practical, acceptable or a reasonable thing to do. What is legal to do, has little to do with any of the above.
I just think that the Feds will screw up the sales tax system, six ways to Sunday before it gets implemented and they will never give up any level of control on commerce. They probably won’t even give up the income tax; just make it real low… for a while anyway.
Worrying over mightbes to the extent of not acting in supporting legislation that clearly does none of what you express as your fear is just another way of accepting status quo.
Conditions are never just right. People who delay action until all factors are favorable do nothing.
William Feather
"The only thing necessary for the triumph of evil is for good men to do nothing."
--Edmund Burke (1729-1797)
I just do not want to have to have a microchip in my hand to buy/trade things because the poor poor federal government is having “compliance” problems with the new system.
Fine, neither does anyone else that I know of. Preventing that however is what the reponsibility of being a participating citizen in this country and the citizen's obligation of "eternal vigilance" is all about.
Do you see that point or just like to argue?
Don't see a valid point in your worries as we would already have the conditions your fear expresses were it a politically feasible to achieve it by the government as it is constituted in this nation. From my perspective that fear ranks mostly in the realm of excess paranoia, especially where it may prevent instituting a substantive change away from taxation of income which has clearly established and proved its known capacity for economic and social mischief.
on #118
Ha! I think a little bit dripped on your shirt... better get that (drool). I think you asked about the rebates earlier?
That is one of the aspects of the bill I absolutely LOVE!!
no bothering with write off's; no bitching about how the poor folks pay too much. the only thing congress would have to figure every year is the rate of tax and the dollar amount of rebate. really a stroke of genious.
on #126:
Sorry, I replied to 'carnot' on your "pre-bate" question.
As I told her, I love the pre-bate concept. I live in Alaska and if I can deal with the pre-bate at our cost of living then I will have no sympathy for the whiners down south who don't think it is enough.
As for your other points... couldn't agree more. If those yahoo's in D.C. try to give me a "fairtax" on top of a reduced incometax, they can expect torches and pitchforks! All of your predictions will come to fruition in that event.
oh, and no, never have seen a "legal" defenition of "fair", ha!
on #139
Ha!! Golden!! Never a more true statement!
the only thing congress would have to figure every year is the rate of tax and the dollar amount of rebate. really a stroke of genious.
Actually, under the Fair Tax legislation, the only thing Congress needs to worry about in the future is the tax rate. The FCA rebate is set as the tax rate times the HHS measure of poverty level as it has become entrenched and bound by political and legal stone through usage in competing programs throughout state and federal government.
Where the tax rate goes, with more voters visibly participating in paying the tax up front at the retail counter when the purchase their goodies, I suspect Congress Critter's main concern will be answering to irrate voters demanding the decrease of the tax rate as many learn, for the first time, the real tax burden that federal government places on the nation for the largess it passes around so indiscriminately.
#199
Good ol' Franklin! one of our brilliant founding minds.
I don't know how feaseble the lotto would be nationally but, anything that puts a tax collector with a gun out of business and lets me own my land and posessions for good... I'm willing to take a look at.
Thanks for the clarifications on some of my “fairtax” assumptions way back around #80 or #90 something. I really have not picked up a copy of the bills (past or present) in over 5 years. I had most of my info from presentations, Q&A’s and radio interviews.
It is a good plan. I’ve always thought so. The two drawbacks in my mind are A) the Federal control freaks (they will always screw it up); and, B) the revelation that they intend to tax “labor based” services. I can never support that for the reasons stated previously. Nevertheless, it is the best thing on the table for the moment.
As you can see, I just love getting into the underlying principle of what is right and just or what is compatible with true liberty.
p.s. PigDog; that UK article on VAT from #97 cracked me up! I only hope we can make that man’s conception that we are more efficient, come true.
Sorry that I am taking so long to get back to this stuff. My day is gobbled up paying taxes, he he.
Anyhow, Mr. 'geezer, on some of your "constitutional/that's the way it is" posts from a while back:
Frankly, I find your knowledge of the constitution and the underlying documents impressive while at the same time finding your reading flat out scary. You are quoting me constitutional powers in the “permissive” interpretation, when anyone with an ounce of sense knows that the Constitution was written and proposed to be implemented by the “restrictive” interpretation (except the supreme courts of the last hundred years).
Despite foolish court precedents, the constitution is just a fancy way of describing the overriding CONTRACT between the ‘governing’ and the ‘governed’. Most importantly, the contract was indirectly offered by the governed. Therefore, it is outside of rational reason to suggest that the totally free and sovereign states/people would have offered anything more than a restricted set of powers to the new government that they were agreeing to. Powers not to be exceeded. Permissive readings like yours and wrongheaded court precedents do not change the fact that the constitution was meant to be a cage that government could be contained in rather than a permission slip to exercise every conceivable power that was not expressly forbidden.
If you like the permissive reading of contracts (everything is ok except the few written restrictions) then you won't mind if we write up a contract for me to take care of you in your old age. You can write it and it should give me the basic authority to use your money as needed, make you subservient to me as needed (for your own safety) and whatever restrictions you can think of. Now be certain to remember that you are totally free before we enter this contract and after we enter the contract... I... retain all the useful authorities and will be reading the contract in the "permissive" manner. If you do not specifically prohibit me from doing something with you/your money/your property/or your freedom... it will be allowed by our "permissive" contract. After all, I'm your new one man contracted government and I'm just here to help ;)
Of course no free man or state would enter into a contract on those terms. That is why I have trouble with some of your assertions on the powers of the government to lay and collect any manner of tax it sees fit and the idea that it also allows for liberal powers to us force against the people.
In fairness, I may have read your posts wrong so feel free to set me straight if you actually agree with my constitutional understanding.
To #316
Ha! even better than I thought. The most attractive part of the whole proposal is the VISIBILITY to the voter. unfortunately, I think that is why it is still doomed or it will be hashed up with a hybrid income tax mess.
But, I'm still dreaming of a day when folks really know what government costs.
P.S. Tell mister "allways Right" that if the lowest tax bracket gets a 30% raise overnight... and the new goods tax is only 23%, it doesn't matter if the base prices for goods fail to drop at all. There will still be more money in the working man's pocket at the end of the day. If base prices fell (as you predict) it only gets better for us.
Anyhow... I really should not have stayed up all night. thank God it's sunday and I can just nap a lot. I'll check back later guys.
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