View Poll Results: Fair tax

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  • Fair

    7 87.50%
  • Unfair

    0 0%
  • Just crazy

    1 12.50%
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Thread: Fair Tax

  1. #28

    Default Re: Fair Tax

    factcheck.org is one of my favorite websites and they did a large piece on the fair tax...

    http://www.factcheck.org/taxes/unspi...e_fairtax.html

  2. #29
    National Finalist leglace's Avatar
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    Default Re: Fair Tax

    Quote Originally Posted by mkm670 View Post
    factcheck.org is one of my favorite websites and they did a large piece on the fair tax...

    http://www.factcheck.org/taxes/unspi...e_fairtax.html

    Try reading this after reading Factcheck. http://www.fairtax.org/site/News2?ne...rticle&id=8249

  3. #30

    Default Re: Fair Tax

    Quote Originally Posted by leglace View Post
    Try reading this after reading Factcheck. http://www.fairtax.org/site/News2?ne...rticle&id=8249
    Thanks for this, provided some great info to rebut the other post.
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  4. #31

    Default Re: Fair Tax

    Quote Originally Posted by matclone View Post
    The manufacturers are taxed on the pieces they use, and they pass on that cost on us the consumer.

    Simplistic and misleading argument. There is no direct correlation between what an entity is taxed and what they charge. Moreover, manufacturers (or let's say corporations) benefit, as a corporation (not as a collection of individuals), from public services. Their presence imposes certain costs on a community. Why shouldn't they be taxed?
    What makes you think there is no correlation between what a company is taxed and what price they ask for their product? Taxes are a cost, just like materials, capital, labor, etc. In basic economics, we learn that businesses do not pay taxes -- that cost is included in the purchase price of the product, just like the price of the materials and labor is included.

    I do like the basis of what you're saying, though. It is good for people to remember that prices are reached as an equilibrium of the supply and demand curves. But, we should remember that the quantity supplied takes into account manufacturer costs. Quanitity supplied at a given price always decreases at manufacturing costs increase. If quantity demanded decreases, the price will remain similar. If quantity demanded remains the same or increases, the price will increase. So, you are correct that taxes by themselves do not directly correlate to quantity supplied at a given price, but when combined with other costs, higher taxes will decrease quantity supplied.

    Corporations do use some public services, but we all do, so that point is moot. Even so, you contend that they should pay for it. As previously demonstrated, if you tax them you are only taxing those who buy those products -- that is where the money the business uses to pay the tax is coming from.

    What the flat tax (I hate the term "fair" tax) does is it allows people to keep more of their income up front and pay taxes based on consumption. Would you agree that those who consume more (the rich, since they can buy more) should pay more? The flat tax does that, but does it indiscriminately, based on how much you spend, rather by some arbitrary amount a group of people in Washington think you should pay.

  5. #32

    Default Re: Fair Tax

    Quote Originally Posted by contini View Post
    The problem I have with this is people are making sound like everybody benefits, when this cannot possibly happen. The government needs money to operate, and right now we are over-spending as it is. If everybody is paying less taxes, then the government is receiving less, meaning we are going in more debt. Sure, you can say that the government will save money from getting rid of the IRS, but that is a small percentage of the budget (the dominant costs are the military and interests on the federal debt). So the government needs to make up these funds in another way. That suggests that this fair tax is going to be a lot larger than people expect, and you may find that you can actually buy less than you expected.

    As I said before, I am skeptical of the fair tax and think it is a big risk to try it, but other than that, I like Huckabee.
    Contini, I'm glad to see that you like Huckabee. I do, too. He was governor when I lived in Arkansas and he seems to be a great guy.

    In your argument, you start right off saying that ther ecan not be a system in which everyone benefits. I must disagree. I think a flat tax (I hate the term "fair" tax) can benefit everyone. The system can promise lower taxes because much of the waste of the older system is cut out. BEcause the flat tax is consumption based, those who spend more will pay more. The rich usually spend much more than the middle class, so they will pay more. Tax loopholes will be non-existent, so the tax rate will come down, but receipts may rise, since deductions will be nil. Sound good so far?

    Because people will have more money to buy what they want and will pay no taxes on money they save, they may save more money. When they save more money, more money is available for loans, which can be used for items that are taxed. Since more taxable items can be sold because of the increase in the money supply, tax revenues will increase. Also, costs of products should decrease, because payroll taxes will no longer be a cost of producers and can not be passed on to consumers.

    The flat tax puts your money in the hands of the entity best qualified to spend it -- YOU! I don't know how we can argue with that.

  6. #33
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    Default Re: Fair Tax

    Quote Originally Posted by leglace
    huh?

    They create jobs, and you consider them as imposing?
    Uh, yes. If you, as an individual, contribute to the economy, should we likewise say (per your argument) that your contribution overrides any consideration of the costs you impose on a community?

    I want to revisit another point Contini made, which, predictably has gone unaddressed by those in love with a certain infomercial. If the cost to run the govt is x dollars, and we eliminate taxes on corporations (b/c of the dreaded "double" taxation), who contribute y dollars towards x, that means that we individuals have to pick up the slack, no? Either that or we make massive cuts in govt, no? Btw, this double taxation argument has been around awhile, at least since Milton Friedman. And since I'm sometimes a little slow on the uptake I think I finally see where the "fair"tax people are coming from.
    Last edited by matclone; 01-04-2008 at 10:30 PM.

  7. #34
    National Finalist leglace's Avatar
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    Default Re: Fair Tax

    My point is that you shouldn't tax corporations because you can. The fair tax is about tax based on what we consume.

  8. #35

    Default Re: Fair Tax

    Quote Originally Posted by matclone View Post
    Uh, yes. If you, as an individual, contribute to the economy, should we likewise say (per your argument) that your contribution overrides any consideration of the costs you impose on a community?

    I want to revisit another point Contini made, which, predictably has gone unaddressed by those in love with a certain infomercial. If the cost to run the govt is x dollars, and we eliminate taxes on corporations (b/c of the dreaded "double" taxation), who contribute y dollars towards x, that means that we individuals have to pick up the slack, no? Either that or we make massive cuts in govt, no? Btw, this double taxation argument has been around awhile, at least since Milton Friedman. And since I'm sometimes a little slow on the uptake I think I finally see where the "fair"tax people are coming from.
    Costs you impose on a community?? Where is your compassion, matclone? If you were so concerned about costs individuals imposed on a community, why not have services paid by the user, so that the cost is defrayed as soon as it is imposed? Still, not everyone imposes the same cost on a community -- I have imposed none, yet still pay. You are assuming that everyone relies on the government -- can't get along wihtout it. I don't think that's and accurate assumption.

    "Double taxation" is usually only associated with dividends of stock holdings, which are taxed when paid out as income and taxed again at the end of the year as capital gains. That is just like IRS payroll withholding taxes on the gross wages, then having to pay IRS taxes again on the net wages.

    Anyhow, we must remember that tax levels have particular effects on economic activity. Higher tax levels usually decrease economic production, because they impose extra costs on producers. This leads to slower production and fewer workers. Because there are fewer workers and those workers aren't making as much money (their employers are paying the cost of high taxes instead of payign wages), less money is available for tax receepts and our progrseeive system taxes those incomes less anyhow.

    But, lower taxes reduce costs on businesses, which employ people. When the cost of doing business is lower, business owners often take that opportunity to expand their ventures, so they can make more money. THis means hiring more people. When more people are employed at a lower tax rate, they pay more money into the government than when fewer people are employed at a higher tax rate.

    Because the flat tax system is driven by consumption, government revenues depend on people spending money, which is helped by not taxing their income, so they have more money to spend. When products are only taxed once, there are fewer costs included in the price, which makes them more affordable. If products are more affordable, people can spend more money on other things, which increases government revenues.

    Higher taxes have always slowed economic growth and governmetn revenues. Lower taxes, if perceived to be permanent, have increased government revenues each and every time they have been enacted.

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