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Taxing Sales under the FairTax – What Rate Works?
Boston University ^ | September 2006 | Laurence J. Kotlikoff et al

Posted on 10/19/2006 5:11:50 PM PDT by pigdog

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To: GregoryFul
".. accumulated what I expected to be, savings that will allow me a comfortable 20-30 years of non-income earning (retirement) life, should I be able to buy things at only inflation adjusted prices through those years ..."

I'm perplexed as to why you would go 20-30 years with a non-income earning life I guess. It seems inexplicable. If you have enough salted away to spend for 20-30 years, why not put it to earning in savings and/or investments and use the proceeds to live off of?

For example let's say you've planned for a 25 year retirement spending $50,000 per year. With no income this would mean you've set aside 25 x $50,000 = $1,250,000. Even as little as a 5% return would result in $62,500 per year or the $50,000 with another $12,500 each year added to savings. You might very easily do better that the 5% without great risk to your capital.

Perhaps I'm missing something. Could you explain ... and please knock off the personal attacks.

And BTW, have you used the Calculator to assess your effective tax rate???

481 posted on 10/22/2006 3:23:26 PM PDT by pigdog
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To: GregoryFul

In other words, If you have been clever and successful, earned a great living, put away a large nest egg, taken care of your kids, never cheated on your taxes, invested well, earned the right to live the good life, you're either going to take it right up the wazoo, or have to learn to live like a hermit. After all, piggy poo says it's all about the spending ... I hope they invent better tasting dog food and waterproof refrigerator boxes by then.


482 posted on 10/22/2006 3:25:30 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: lewislynn
"You can look at your savings or you can sit and count it but it has no value untill you spend it and that is exactly when it loses it's value under the Fairtax scam."

You have other more productive options too. You can save or invest the money and put it to work for you - earning more.

Only when you choose to spend some part of the money for taxable things is it taxed ... and as you have may have noticed there are many things under the FairTax that are not taxed at all.

Then again, maybe you haven't. Have you figured out your FairTax effective tax rate with the Calculator???

483 posted on 10/22/2006 3:31:21 PM PDT by pigdog
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To: pigdog
... and this once again from Mr. "nothing inherently wrong with and income tax".

There is nothing inherently wrong with an income tax. It may become perverted, twisted, oppressive and abusive - to my knowledge, no system devised by man that is safe from the same fate.

484 posted on 10/22/2006 4:09:30 PM PDT by lucysmom
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To: lucysmom
I disagree ... there is lots wrong with an income tax and that is what will cause it to be changed.

The discussion here, however, is about the FairTax, not your beloved income tax.

485 posted on 10/22/2006 4:24:14 PM PDT by pigdog
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To: xcamel
"... you're either going to take it right up the wazoo, or have to learn to live like a hermit ...."

Actually the data in #481 shows that that taxpayer would live quite well indeed and nothing at all like a hermit or any other quaint description you might have.

And, once again, knock off the personal attacks.

486 posted on 10/22/2006 4:29:04 PM PDT by pigdog
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To: lucysmom; GregoryFul
one look at this and you would think people like piggy-poo would just fade away in disgrace. But I guess if he just wants to keep beating his head against a brick wall, it's his (or its) choice.

(I guess he just likes setting himself up then whining about imaginary 'personal attacks')

487 posted on 10/22/2006 4:34:14 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: GregoryFul
How would you know that?

Because EVERYONE gains in the world of fairytaxers. Its a plan that takes the same amount of money out of the economy, but everyone who checks with the handy dandy fairytax calculator comes out way ahead. It is a miracle.

488 posted on 10/22/2006 4:37:03 PM PDT by Always Right
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To: Mojave
As has been pointed out to you about 3.000 times, the prebate is not an entitlement.

The prebate is a rebate which is:

"... a return of a part of a payment ..."
Merriam-Webster Online

An entitlement is a completely different word with a completely different meaning. It is not at all a rebate.

489 posted on 10/22/2006 4:37:16 PM PDT by pigdog
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To: xcamel
Your link is meaningless and doesn't apply to me at all.

And once more you continue your personal attacks.

490 posted on 10/22/2006 4:39:35 PM PDT by pigdog
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To: Mojave
excrement by any other name...
491 posted on 10/22/2006 4:39:42 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: Always Right
It was never said that everyone gains under the FairTax and you know it. Why intentionally present misinformation as you like to do? Most taxpayers will benefit under the FairTax however. You don't seem to realize that, being too blinded by your own bias against it.

Also, I've never stated it would "take the same amount of money out of the economy". That merely sounds like another of your fake charges.

492 posted on 10/22/2006 4:43:57 PM PDT by pigdog
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To: pigdog

oh... and the "data in #481" is based entirely on completely fallacious assumptions, but we already knew that.


493 posted on 10/22/2006 4:45:36 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: pigdog

Actually the link is quite informative. What happens when you CUT income taxes? People benefit greatly. WHY? The fruits of their labors are rewarded much more. What would happen if there were no income taxes? Per Jorgenson, 13% increase in GDP. The link informs us that income taxes are like a chain around out necks. Get rid of it and hold on for the ride.


494 posted on 10/22/2006 4:50:20 PM PDT by groanup (Limited government is the answer. What's the question?)
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To: lucysmom
Nope, you're wrong - I asked for no such quotes since they wee to/from others.

Actually there's no reason why you'd have to "buy necessities and pay the 30% sales tax" since a) there is no 30% sales tax, b) you will never have to bear more than the cost of the item plus your effective FairTax rate, and c) there is no "tax on interest on even should you borrow - and the rates at which you borrow will be reduced considerably from present rates.

495 posted on 10/22/2006 4:50:59 PM PDT by pigdog
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To: xcamel

If you "knew that" you're on pretty thin ground since the date was based upon what the poster had either stated or implied in past posts.


496 posted on 10/22/2006 4:53:23 PM PDT by pigdog
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To: pigdog

the fallacious assumption is that anything like the FT will ever come to exist


497 posted on 10/22/2006 4:54:46 PM PDT by xcamel (Press to Test, Release to Detonate)
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To: pigdog
As has been pointed out to you about 3.000 times, the prebate is not an entitlement.

That you lie frequently is well know.

The President's Advisory Panel noted that not only would it be an entitlement, it would be "the largest entitlement program in American history..."

498 posted on 10/22/2006 5:08:23 PM PDT by Mojave
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To: Principled
It is nonsense that losses in one class will be made up from "gains" in others. Under the "FairTax", after tax savings would be taxed at the 30% rate as they are spent - ultimately the only useful purpose for savings for the typical individual. Currently they are taxed at the difference between cost (basis) and realized value, usually a fraction of the total. Or for before tax savings, totally at the marginal income tax rate, likely to be less than the 30% rate imposed by the "FairTax" for your typical middle class retiree. Of course gains from long term holdings of before tax savings ought to fall under the long term capital gains tax rates, but because the US government already cheats the middle class taxpayer, they do not get this tax break on their "yuk-yuk" sheltered savings.

Yes, going forward, earnings from savings may accumulate tax free, a good thing, but currently so can assets that are not traded, or are traded into equivalent holdings. I can hold an investment in IBM or GE, a tax efficient index fund, or an apartment complex for 20 years without being taxed on anything but their dividend, or net income. I can decide when to take a gain or a loss on the holding, and be subject to the as low as 15% capital gains tax (again only on the difference between basis and realized value), or just borrow against the asset and pay no tax. The CG rate can change of course, but the public servants would be facing down the rich guy as well as the middle class guy if they wanted to change the capital gains rate - and hence would be less likely to pursue this option (as their campaign contributions would vanish). And the "FairTax" would never recognize a capital loss.

The "FairTax" favors the low asset wage/income earner, at the expense of the high asset holding individual at the time of enactment. Typically, the new worker vs. the prudent individual nearing or at retirement. So there are winners and loosers in this contest. I would be a looser, and so would vigorously (old guy vigor) oppose the change.

499 posted on 10/22/2006 5:09:45 PM PDT by GregoryFul (There's no truth in the New York Times)
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To: Always Right
Since you completely screwed up the use of the FairTax effective rate calculator as I explained in #464, reading your further showing of lack of understanding in this post is even funnier since these things are merely those in the calculator.

If I felt you honestly wished to learn more about it I might explain hem further, but since I know your only wish is to absolutely attack anything FairTax - or any FairTax supporter ... I won't waste the time, but will just point out for the record that your #1, 2, 3, 5, & 6 are quite wrong.

500 posted on 10/22/2006 5:14:08 PM PDT by pigdog
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