So I was reading up on "FairTax" (one word, not two) on
factcheck.org (which I believe is a reasonably accurate and unbiased
site) and was quite startled by how much I didn't like it.
It taxes things that have never been taxed before, like house
purchases, rent, and interest payments. I don't the idea of paying
30% more for my house, or then paying a 30% tax on the interest for
the loan (which would itself be 30% more than I would have needed to
borrow).
They believe that 15% of people will dodge this tax (just like 15%
of people currently dodge the current tax system), and that's
factored into the need for a 30% value to keep the federal
government's income level the same as before. But, if people stop
buying stuff, or stop borrowing stuff (isn't there like a couple
billion dollars in interest paid every year?), then the government's
income level falls and they'll need to raise the rate.
I worry that it would reduce the amount of consumption in the US,
and for an economy that runs on consumption, that's going to be a
problem for everyone.
I also worry that a lot of money out there wouldn't be taxed (which
might or might not currently be taxed) because it just sits in
stocks/bonds/mutual funds/savings and never gets spent. I don't
know if this money, or just the interest it's earning, would be
taxed, and if it's not taxed, then I think that's definitely missing
the idea of a "fair tax". At least with the current income tax that
money was taxed before it bought the stocks, etc., but now it won't
be and that means that they have to increase the tax rate on
everything else.
So, if Warren Buffet sits around with 40 billion dollars in the bank
and never buys a new house (which he hasn't done in like 30 years),
and generally doesn't buy much "stuff", how is this a "fair tax"?
After all, rich people really don't buy all that much more stuff
(after a while, all that extra money isn't really useful), in fact
some of them got rich by NOT spending their money (I know I would
have a lot more if I didn't keep dumping it into cars and computers)
I for one would love to make 20% more income and start living like a
pauper, not buying anything, just so that I could watch my bank
account grow, but if I'm not mistaken, that's what got Japan into
it's recession -- something that it's just now getting out of some
20 years later.
I like the idea of a flat tax on income without any loopholes.
Actually, come to think of it, I like a graduated tax without any
loopholes, which would be what we would have if we just removed the
loopholes.
Mark
On Sun, Sep 27, 2009 at 3:09 PM, Will Erickson <[email protected]
> wrote:
I have to say I'm kind of enjoying these emails. I think Bill's
right, the
FM turbo's are now so well sorted we just don't have many problems
to try
and solve. 3 years strong on my 94 FM2 and have yet to experience
any issues
other than bad plug wires and a blown off intercooler pipe.
Here's my contribution to the dialog: http://www.ronpaul.com/
Will
(going back to my quiet little corner)
----- Original Message -----
From: "Larry Alster" <[email protected]>
To: "'Rob Argento'" <[email protected]>; <[email protected]>
Sent: Sunday, September 27, 2009 1:52 PM
Subject: RE: NMC - Healthcare Crisis Debate / Gay Marriage /Fair tax
> Again you need to read the info on the bill. It's not the same as
a flat
> tax or a VAT for a number of different reasons.
>
> Not the least of which is the Prebate which allows the "poor" to
live
> virtually tax free.
>
>
>
>
> Larry Alster
>
> 91 Miata White Knight
> 92 Miata Silver Bullet
> 92 Miata Honey B
> 04 MSM MX-5 Whooosh
> 06 WRX STi Subie
>
>
> -----Original Message-----
> From: [email protected]
> [mailto:[email protected]] On Behalf Of Rob Argento
> Sent: Sunday, September 27, 2009 3:41 PM
> To: [email protected]
> Subject: RE: NMC - Healthcare Crisis Debate / Gay Marriage /Fair tax
>
> I have not taken part in the "debate" in that it hasn't been very
> informative. I have heard the same
> old arguments/accusations from all. But I DO believe that there
is a need
> for exchange and debate.
> I only wish it was a bit more civil and not a boxing contest to
see who
> can
> get in the quickest
> blows. If you guys have a hard time understanding the civil war in
> Yugoslavia, neighbor against
> neighbor, just reread your own exchange.
>
> Besides, I lurk here to read about Miata power issues, not
uninformative
> debates and verbal boxing
> matches.
>
> That being said, I found it interesting that the concept of the
"fair tax"
> was brought up. And Larry
> is, of course, right in saying that we should look at it before
simply
> throwing it out based upon
> its name or which politicians have brought it up.
>
> As I understand it the "Fair tax" is a tax paid on consumption of
> services,
> goods, whatever paid by
> the end buyer. Much like a sales tax or the European VAT or the
Swedish
> MOMS. Yes, there are
> differences, but for all practical purposes it is a tax not on
income but
> taken out when you USE the
> money for your own pleasure or need.
>
> While the American designers of this proposal probably mean well,
I have
> lived under this system
> and, quite frankly, it doesn't work and is far from being fair. In
Sweden
> (and Denmark) this tax is
> 25%. Something that would have cost $100 actually costs me
$125. It is
> a
> 25% added on tax - or
> counted backwards, 20% of all money I spend is tax. Well, sounds
fair
> but...
>
> What is created is an enormous black market. Someone comes to me
and
> wants
> to buy a computer for
> let us say $1000. Well, actually I only get $800. $200 is tax
which I
> will
> hand over to Uncle Sven.
> My company will make a profit on the $800 and this I pay a tax on.
My
> customer only HAS $800 to
> spend. Do I say no to the sale or just keep it off of the books.
In fact
> if
> I keep it off of the
> books, I will reduce my profit and thus my income tax (for in
Sweden we
> also
> have an income tax).
>
> The system creates an incentive to make one's major purchases
outside of
> the
> country. Why should I
> buy my BMW in Sweden if I can go to Poland and buy it there for
20% less?
> Or clothing, or
> electronics or food or gasoline if I live near a boarder? OK,
most people
> can't afford to travel
> that far, but those with the MOST money to spend most often have
even the
> means to travel and an
> even bigger incentive - in that richer people simply buy more stuff.
>
> So, the poor schmuck with not much money can hardly take advantage
of this
> part of the black market.
> Well, he can buy stuff that others smuggle in - like booze,
cigarettes,
> and
> whatever there are high
> profits and good demand for. In fact, the smugglers goods ARE in
higher
> demand. They cost 20%
> less!
>
> On top of that, I who may be trying to run a legit business,
simply can't
> compete with the black
> marketer. He will always be cheaper that I for the same goods or
the same
> service.
>
> OK, you guys might hate your income taxes and your IRS. That is
probably
> natural - but take another
> look at any suggestion to replace it. We all want a fair tax. If
you can
> make it any more fair,
> please do! I am open to all suggestions. But the current proposal
for a
> "fair tax" and its distant
> cousin, the "flat tax" both seems to me not to solve anything at
all.
>
>
> /Robban - who commutes sort of between Europe and Florida though
not in my
> MSM.
>
>
>
>
> Message: 1
> Date: Sun, 27 Sep 2009 14:16:45 -0400
> From: "Larry Alster" <[email protected]>
> Subject: RE: NMC - Healthcare Crisis Debate / Gay Marriage
> To: "'Dan Scolnick'" <[email protected]>, "'Casey Wheeler'"
> <[email protected]>, <[email protected]>
> Cc: [email protected]
> Message-ID: <05b101ca3f9e$ac667960$05336c...@net>
> Content-Type: text/plain; charset="us-ascii"
>
> Hey Dan
>
>
>
> Rather than just making stupid comments about it why don't you try
the
> concept about reading up on it before you mouth off.
>
> Larry Alster
>
>
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