To: K-oneTexas
>>>Your logic eludes me. You seem to be all over the map with your questions and comments.
Let me review:
1. The author cited an issue with the large number of households who pay no income tax or even receive back more than they pay in.
2. The author proposed a consumption tax to make it so that more households participate in paying taxes.
3. I noted that since 47% of households currently pay no net income tax, then a consumption tax would likely result in some of those households, paying higher taxes, otherwise the author's reason for going to a consumption tax does not resolve the problem cited in point 1.
4. You presented an example of the effects of consumption tax on a middle class family, and I pointed out that the example would result in an additional family getting a net gain from the government that had been a net payor before.
5. I further noted that this would only enhance the problems cited by the author in point 1.
6. You noted that wealthy housholds not previously paying taxes will be added to the tax rolls.
7. So in summary, you are saying that a consumption tax will move more wealthy households onto the tax rolls than it removes middle class households.
Is that correct?
42 posted on
04/23/2010 12:21:24 PM PDT by
NC28203
To: NC28203
Definitely. Since some (wealthy) do not pay tax, in the same way the rest of the country does, they will now be on the same level. Big plus is that social security and medicare can now be funded.
I guess I proved your point but I wonder why I needed to prove it for you. Why couldn’t you have done the same as I did.
Remember the FairTax is 23%. Current the the Income Tax varies (on a graduated stair stepping scale with the various brackets - http://www.moneychimp.com/features/tax_brackets.htm). Then add the Social Security Tax of 12.4% (6.2% paid by employee and 6.2% matching by employer). On top of that add 2.9% (1.45% paid by employee and 1.45% matching by employer). That is a grand total of 15.3% in payroll tax.
23% minus 15.3% is 7.7% left for the general fund. Using today’s method as Social Security and Medicare are expenditures of the General Fund. Something called the unified budget which has been used since Johnson’s time. No Social Security Trust fund, but now there could be.
43 posted on
04/23/2010 12:37:52 PM PDT by
K-oneTexas
(I'm not a judge and there ain't enough of me to be a jury. (Zell Miller, A National Party No More))
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