GOOGLE RON PAUL

Originally Posted by Watts

So does Huckabee and a lot of other conservatives. The Fair Tax is something a lot of left and right wingers can agree on. Just for different reasons.

That does not make the Fair Tax any less crazy.

Why is the Fair Tax crazy again, Brady?

The primary appeal of the Fair Tax to conservatives is the opportunity to get rid of the IRS, and while the eradication of the IRS has its own utility, the problem is that it necessitates a new bureaucracy to monitor reported consumption and transfer the necessary payments. That would be the case if we implemented tax credits for perishables, but even if we simply did not place excise taxes on edible goods, you'd still need a new agency to monitor and collect the excise tax.

Yet even with the absence of a belligerent tax collection agency (belligerent to the average joe maybe), the concept of a Fair Tax along with any other tax on consumption runs into an inevitable problem: it's regressive. The wealthy do not consume their incomes the same way that the poor or middle income earners do, and even if you except the poor from taxation you've effectively shifted the tax burden to those who earn a middle income.

Not saying you're wrong here (even though I've read Boortz' tax book, I'm still not convinced that this is the greatest idea after a bit of thought), but what makes you believe that the tax burden will magically be shifted upon the middle class instead of the rich?

Do the rich not spend more than the middle class?

Originally Posted by Night Phoenix

Do the rich not spend more than the middle class?

They spend a far lower percentage of their income. The lower classes spend much more of their income, and so taxes on consumption (sales taxes et. al) affect them much more than the upper class when compared to an income tax.

Ok -- I understand that, but you didn't answer the question. I asked if the rich spent more than the middle class. With the Fair Tax, as I've come to understand it, the sales taxes on spending up to the poverty level on the essentials of life (though I'm interested on how the government would define 'essentials of life') are offset by a monthly prebate.

So I really fail to see how the FairTax becomes a regressive tax given what you and Brady have said.

Addendum:

Quote:

Economist William Gale analyzed a National Sales Tax (though different from the FairTax in several aspects[35][42]) and reported that the overall tax burden on middle-income Americans would increase while the tax burden on the top 1% would drop.[6] According to the President's Advisory Panel for Federal Tax Reform report, which compared the individual and corporate income tax (excluding other taxes the FairTax replaces) to a sales tax with rebate,[7][28] the percentage of federal taxes paid by those earning from $15,000 – $50,000 would rise from 3.6% to 6.7%, while the burden on those earning more than $200,000 would fall from 53.5% to 45.9%.[7] FairTax supporters argue that replacing the regressive payroll tax — a 12.4% Social Security tax on wages up to $97,500 and a 2.9% Medicare tax (a 15.3% total tax that is often split between employee and employer) and capital gains tax (not included in the Tax Panel study) greatly changes the tax distribution and that the FairTax would relieve the tax burden on middle-class workers.[7][2] The FairTax would broaden the tax base to include all 300 million Americans and an estimated 30 million to 40 million foreign tourists and visitors.[43] In a study on tax base and rate, the Beacon Hill Institute concluded that the FairTax would offer the broadest tax base and increase the federal government's net base to $9.355 trillion from $7.033 trillion of taxable income, which allows the FairTax to have a lower tax rate than current tax law.[44] A study on marginal and average tax rates by Kotlikoff concluded that the FairTax would reduce most households’ average lifetime tax rates.[45] Economists from Boston University and the Centre for European Economic Research concluded that the long term effects of the FairTax would reward low-income households with 26.3% more purchasing power, middle-income households with 12.4% more purchasing power, and high-income households with 5% more purchasing power

This is only a somewhat mildly related question, but I admit I'm not very learned in the area of economics, and a flat tax has always seemed like a great idea to me. You just flat up pay a certain portion of your income, and that's it. That goes to the government to be redistributed, and you keep everything else. One tax, period. I know a lot of people think this is a bad idea, but why? Even with the different spending habits of people of different income classes, it seems as though it would work. I mean, sure, maybe it'd get a bit iffy on what you call income, but we'd certainly get around all the sick loopholes, and solve at least a few of the problems with the current tax system. A flat tax may not be without it's problems, but I can't forsee any being so bad as to not want to switch to a system like that.

Because liberals argue that a flat tax increases the tax burden of the poor and middle class, because a person earning $30k a year paying 20 percent of his income feels that much more than a person earning over $200,000 paying the same rate.

Liberals love progressive taxation because it allows them to effectively buy the votes of the lower classes by promising them new gov't benefits at the expense of the upper classes. You can't do that if everyone pays the same tax rate.

Of course the same is true in reverse. Tax cuts for the rich help buy campaign funding quite nicely.

Except that ever since the inception of the income tax, the wealthy have always paid the overwhelming majority of income taxes. In truth, even though you liberals always cry about 'tax cuts for the rich' you neglect the fact that an ever-increasing portion of the population has virtually no tax burden whatsoever.

The idea is that people should not be taxed so heavily that they are unable to meet basic requirements for living. Is this a bad idea? Is this an idea you want to abolish?

What the fuck are you talking about? Resorting to attributing arguments to me that I never made isn't a valid debate tactic.

Even if the wealthy HAVE paid the majority of income taxes in terms of gross numbers, that still doesn't change the fact that they pay a lot less of their total income out to Uncle Sam.

Let me put it this way: The lower and middle classes pay a far, far higher opportunity cost than the wealthy in taxes, simply because the wealthy generally spend a far lesser amount of their total income. What they don't spend accrues interest (and in several cases, the interest from that wealth is what the person lives off of, not the wealth itself), and generally sits there doing nothing. Compare this to you or me. I make around 800 dollars a month working part-time delivering pizza (minimum wage plus tips and commission). Of that, 4-500 is immediately set aside for monthly expenses, most of it being gas due to my job. I'd say that's about $250 dollars a month (60 dollars a week, filling up the gas twice; and I drive a Honda Civic, which is fairly fuel efficient. Imagine if I drove a minivan or SUV). The rest of that 4-500 dollars is set aside as discretionary spending, and the remaining 300 dollars is deposited into savings (usually to be spent a few months later on books and tuition).

In other words, easily 95% of my income is eventually spent, compared to roughly 3-4% for your millionaire type (who, by the way, is also able to afford luxuries I could never dream of owning).

Basically, a fair tax places a much, much higher burden upon the lower/middle class (which already has trouble) than it does the wealthy.

I'm sorry, I thought I was fairly clearly responding to something you just said. Allow me to clarify:

Quote:

Even if the wealthy HAVE paid the majority of income taxes in terms of gross numbers, that still doesn't change the fact that they pay a lot less of their total income out to Uncle Sam

The top tax rate is 35 percent (for anything over 350k). A married couple that makes 48,201 (the median income in 2006) pays at the 25 percent rate.

However, now let's look at a real telling statistic: Who Pays America's Tax Burden, and Who Gets the Most Government Spending?

Quote:

While many studies answer the ques.tion of who pays taxes in America, the question of who gets the most government spending is often overlooked. Just as some Americans bear a larger portion of the nation's tax burden than others, some Americans also receive a larger share of the nation's government spending.

This report summarizes the key findings of a comprehensive 2007 Tax Foundation study of federal, state and local taxes and government spending. The results show that when we consider the distribution of government spending as well as taxes, it provides a dramatically altered view of how U.S. fiscal policy affects Americans at different income levels than is apparent from the distribution of tax burdens alone.

Overall, we find that America's lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America's highest-earning households received $0.41. Government spending targeted at the lowest-earning 60 percent of U.S. households is larger than what they paid in federal, state and local taxes. In 2004, between $1.03 trillion and $1.53 trillion was redistributed downward from the two highest income quintiles to the three lowest income quintiles through government taxes and spending policy.

These findings suggest tax distributions alone do not tell Americans how much the nation's fiscal system is helping or hurting low-income households. To answer that, we must look beyond tax burdens to government spending as well. Lawmakers who ignore the distribution of govern.ment spending risk making policy judgments based on an incorrect set of facts about the United States fiscal system.

Source: The Tax Foundation - Who Pays America's Tax Burden, and Who Gets the Most Government Spending?

So not only do the wealthy pay more gross income taxes, are taxed at a higher rate, but they receive $0.41 cents on every tax dollar they spend in government services. In contrast, the lowest levels of wage eaners receive over eight dollars.

But that's right...the burden is clearly upon the middle and lower class.

Originally Posted by Night Phoenix

The top tax rate is 35 percent (for anything over 350k). A married couple that makes 48,201 (the median income in 2006) pays at the 25 percent rate.

Let me rephrase that: under the Fair Tax, the lower/middle class would have a much higher burden of tax than the wealthy would.

Oh, so wealthy people should get their even share of government services. Okay, I guess you could give wealthy neighbourhoods first priority in fire situations, and maintain their roads better and shit. Maybe spend more on wealthy inmates than on poor inmates. We'll need some talent to figure out how to get the military to protect the wealthy better than the poor, but I'm sure it can be done.

What figure makes you believe that? See, tax burden means that the middle and lower classes would pay more in taxes than the wealthy would, but wait -- the Fair Tax is designed to tax not income, but WEALTH, because your wealth is what you take to the store to purchase items.

Even you say this in your previous post:

Quote:

(in reference to wealthy people) ...who, by the way, is also able to afford luxuries I could never dream of owning

Guess what? These luxuries get taxed under the Fair Tax, and since you and I both agree that wealthy people are more keen to spend their wealth on luxuries than the lower and middle classes, then why wouldn't their tax burden be more?

Now, in fairness I did post this statistic earlier:

Quote:

the percentage of federal taxes paid by those earning from $15,000 – $50,000 would rise from 3.6% to 6.7%, while the burden on those earning more than $200,000 would fall from 53.5% to 45.9%.

Now while the percentage of federal taxes for the lower and middle classes rises to just under 7 percent and the upper class drops to 45 percent, the fact still remains that the wealthy's tax burden is significantly higher.

Your argument just doesn't make sense.

Additional Spam:

Quote:

Oh, so wealthy people should get their even share of government services. Okay, I guess you could give wealthy neighbourhoods first priority in fire situations, and maintain their roads better and shit. Maybe spend more on wealthy inmates than on poor inmates. We'll need some talent to figure out how to get the military to protect the wealthy better than the poor, but I'm sure it can be done.

Your entire argument is mired in fallacy and bullshit.

Are you even going to attempt to actually address what I said or just try and attack my arguments with bullshit emotional distortions?

The fact of the matter is this: The wealthy receive less government services (by the dollar) than what they pay in, while everyone else receives substantially more per dollar than what they pay in -- ranging from 30 percent to over 800 percent depending on their income.

And yet you STILL complain that the wealthy aren't being soaked enough, you pompous bitch.