The Benefits of the Fair Tax
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13-02-2014, 10:42 AM (This post was last modified: 13-02-2014 10:49 AM by Stephen Eldridge.)
RE: The Benefits of the Fair Tax
(13-02-2014 10:24 AM)toadaly Wrote:  
(13-02-2014 07:51 AM)Stephen Eldridge Wrote:  What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) - See H.R. 1040, but with changes as noted here (IRS is neutered, 1 page tax filing, everyone pays - more evolutionary). Call your representatives in Congress and let them know that this is what you want.

The prebate aspect of the Fair Tax is certainly idiotic. But, the idea of replacing income taxes completely with consumption based taxes is not. A national sales tax could exempt basic necessities, and tax luxury items at a higher rate. Since there would not be the gimmicky prebate to fund, the overall rate could be less than the Fair Tax.

The poor would end up paying tax only to the extent they chose to purchase non-necessities, just everyone else, and the not poor could choose to lower their own tax bite by sticking to the basics, if for example, they were trying to save up to start their own business, or to retire early. If they were simply saving for a new car, they'd pay the tax when they bought it.

REPLY;

FYI,

The US Treasury tried to come uo with exactly the approach that you outline. One problem the impossibility of projecting the rate of evasion/avoidance and so Treasury usd 2 illustrative rates.

Using a 30% evasion/avoidance rate, the sales tax rate needed to replace the 3 taxes that the FairTax would replace is an astounding 150%!

That points up that the problem is as stated by a FairTax -paid econmst, Harvard's Dale Jorgenson that in trying to replace the 3 taxes, the FairTax (or nay other NRST) takes on far to great a burden for it to carry,
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13-02-2014, 11:25 AM (This post was last modified: 13-02-2014 11:41 AM by Cathym112.)
RE: The Benefits of the Fair Tax
Frank - I'm only gonna say this and then I'm finished with this conversation because we keep talking past each other.

You want to blame the economy on a single theory of economics: Keynesian Economics. You do so in favor of Libertarianism with the assertion that if we just went back to this certain time in history, we could replicate it and fix alllllllll the problems of the economy.

Except you forget a few fatal flaws in this mindset:

1) If we go back to the way it was, you eliminate everything that brought you to this point in the first place, including the positive aspects. Roads. Infrastructure. These are things brought to you by Keynesian theory. Which was, you have to SPEND money in order to MAKE money. So in order to grow the economy, you had to spend money that you didn't have. Kinda like starting a business. You have to spend money to start it up, in order to grow it to make money. Sometimes it works, sometimes it doesn't. But without these roads and infrastructure, my business wouldn't be around. Customers get to my business through the roads that our government built. Sure, we can save the money over time and built the roads as savings allows, or we can print money to pay for it on credit. This of course has its downsides, but its like the preverbal cat in the hat stories. The more you try to clean up the pink slime, the more it just spreads around. This is unavoidable because this is how cause and effect works . Everything we do has an effect, we cannot escape this concept.

2) you completely forget that the variables that were present during the point in history you would like to replicate are forever gone now. Society isn't the same. mindset isn't the same. What was acceptable in the 1970s is no longer accepted now, as what wasn't acceptable now is. So this la-la fantasy land you live in where we can replicate parts of history that went well for us is just.....shortsighted. CJ and others have tried endlessly to get you to recognize this to no avail. Variables are important. Economics does not exist in a vacuum. And these variables have now changed. Going back in time, even with those same economic theories, are likely to produce DIFFERENT RESULTS.

3) Incentive incentivizes different people in different ways. Why? Because people are inherently different. What is valuable to me, is not valuable to you. Therefore, you seem to think that a blanket incentive is all one needs to create a perfect utopia. Except there IS no perfect utopia. It doesn't exist. And trying to create utopia is a tremendous waste of energy and time. I value playtime for my employees. This means that my company will ship out a few less shipments per week, but by allowing my employees to play a game of pool on company time, or play basketball, or participate in jam sessions is far more valuable in the long run because to me, a happy employee is a productive employee and less likely to steal from me. Here is the catch. I have employees who are not incentivized with play time. They are incentivized by money. Bonuses. Sooo..the employee who ships out those extra units instead of playing, gets a bigger bonus than those employees who opt to have a better work/life balance. The point is - no two people are alike, and further, no two SOCIETIES are alike. You want to jerk off to Sweden as though their incentives will produce the same results here. Nope.

4) Human nature - You can take the man out of the trailer park, but you can't take the trailer park out of the man. People are greedy, self serving assholes. Whether its libertarian or keynesian or anything in-between, there will always be people who lie, cheat, and hoard for their own personal gain. Therefore, this whole theory of "just leave everything alone, it will all work out and people will help each other for the betterment of society" is woefully ignorant of human psychology. Very few people do the right thing when they think no one is watching. Thats why there have been study after study that show that people behave differently when they think someone is watching them.

5) You never complain when something is unfair in your favor . Again, this is a part of human nature. Did the early investors of Bernie Madoff say, "hey, no fair, I got 16% return while everyone else only got 8%." No. It doesn't happen. Instead they reinvested their earnings to keep going. Except when that collapses...NOW its unfair that you got cheated. You wanna complain about the unfairness of taxes, except that those taxes built roads (with the help of money printing!), and fought wars to help you keep your precious white picket fence and whats the word..oh yeah..freedom. Sure..we may act like drama queens about our civil rights, but the reality is when you strip away all that shit, the United States is one of (not the only) freest countries in the world. Me, as a woman, has the ability to own my own business, drive my own car, and raise a family alllll by myself. I can do pretty much anything my little heart desires. And to me, thats worth FAR MORE, than the cost of inflation.

6) people always bitch about spending...until they actually need it for themselves . You hate the FDA, Frank. (and all regulation) I get it. But because you've never died or had someone die from taking a counterfeit drug (a BILLION dollar industry I might add), you seem to find it unnecessary. Except when it might affect YOU personally. Then you might sing a different song. You might be against drug laws....except when someone hopped up on bath salts murders your daughter. Suddenly you have a problem with these drugs and want them off the streets. My point is don't be too quick to jump on the Freedom bandwagon without understanding that you too, might want the restriction of certain freedoms for the betterment of society as a whole.

So go ahead, argue that your way will produce the best results, and any other way is stupid. The reality is, a happy medium is probably the best solution as there are positive aspects from both theories. Please keep in mind, that economic theories do not run EXACTLY true either. They don't meet number projections exactly because no one has a crystal ball. Except for you...since you know just how everything will work out and we will have utopia . But since you have this crystal ball...you wouldn't mind giving a few homeless people the winning lottery ticket numbers, would you? Ya know...cuz you are always a fan of doing the right thing.

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13-02-2014, 01:09 PM
RE: The Benefits of the Fair Tax
(13-02-2014 11:25 AM)Cathym112 Wrote:  Roads. Infrastructure. These are things brought to you by Keynesian theory.

You never read my posts about this. It's the OPPOSITE. In the century before the government took over providing transportation infrastructure, when it was free market, the pace of innovation was fast and furious. The US went from nothing to having modern roads, synchronized traffic lights, etc., in the course of 100 years. By the 1920's, there were 250,000 miles of rail, with air conditioned trains running at 100mph. And, the free market was building prototypes for the next technology to replace roads; vacuum-evacuated tunnels, which their models proved could transport us at hypersonic speeds, making the trip from LA to NY in about 30 minutes.

BUT, then the government took over, confiscated and nationalized roads and rail. Now we have 10% of the track we used to, trains are running at half the speed, the roads and bridges are falling apart. The technology has gone BACKWARDS since the government took over.

You and your beloved government roads have cost millions of lives, created pollution, congestion, reduced mobility. If it had remained a free market service there's no reason to believe the progress wouldn't have kept pace with the previous century, and with all the other technologies that remained in the free market domain.
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13-02-2014, 01:20 PM
RE: The Benefits of the Fair Tax
(13-02-2014 09:39 AM)cjlr Wrote:  [the German mark going fiat] wasn't 100 years ago.

Sorry, I know I said I'd stay on topic, but it was bugging me to let such a glaring false statement lie. Not that cjlr will admit he misspoke. But the Mark went fiat in 1914. Since you obviously can't do the math, get out a calculator and type in 2014-1914. What do you get genius? Oh yeah, it WAS 100 years ago.

And WHY did it happen in 1914? Oh yeah, Germany needed to pay for WWI, and a fiat currency is an essential component of any stupid, wasteful war of aggression. If the motherland is attacked, the people will give the shirts off their back to support the war effort. But, if it's a stupid, aggressive war just to satisfy power-crazed politicians, it's impossible to get the people to part with the money willingly through taxation. You NEED a fiat currency, so you can stealthily confiscate the people's money without them knowing it. Similarly, during WWI, the US ALSO switched to fiat currency to pay for the war.

Fast forward to 1971. What did Nixon do when the Pentagon Papers came out and the American public grew weary of Vietnam? Oh yeah, switch to a fiat currency to pay for it. Fast forward to 2003. Imagine if the US didn't have a fiat currency, so GW Bush would have said: "My fellow Americans, we found this document. We can't verify its authenticity, but it suggests Saddam is trying to buy yellowcake. So we need to budget $6 trillion for this war. I need every American family to write a check for $60,000 payable to 'Iraq War Effort'. Please remit asap, so we can get this war underway". Come on, there could never have been an Iraq war were it not for a fiat currency that let Bush fund the war without having to go hat in hand to the taxpayers. In the case of Iraq, the fiat currency was not only a necessary component for the war, like in WWII, it was actually the CAUSE of the war; it's not coincidence that Bush decided to take Saddam out the moment he started selling oil in Euro's, and the first thing the military did was seize the oil fields and return all Iraq's oil sales to US dollars to preserve the dollar's status as the world's reserve currency.

So, I did NOT say a fiat currency causes all wars, although it often does, as in the case of Iraq and WWII, but it is a necessary component for stupid wars that the people won't willingly fund. That's how it started in the 11th century, and that's how it continues today.
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13-02-2014, 01:57 PM
RE: The Benefits of the Fair Tax
(13-02-2014 10:42 AM)Stephen Eldridge Wrote:  REPLY;

FYI,

The US Treasury tried to come uo with exactly the approach that you outline. One problem the impossibility of projecting the rate of evasion/avoidance and so Treasury usd 2 illustrative rates.

Using a 30% evasion/avoidance rate, the sales tax rate needed to replace the 3 taxes that the FairTax would replace is an astounding 150%!

That points up that the problem is as stated by a FairTax -paid econmst, Harvard's Dale Jorgenson that in trying to replace the 3 taxes, the FairTax (or nay other NRST) takes on far to great a burden for it to carry,

Ok, so it's 150% instead of 30%, so what? The total taxes collected are the same, and the total burden is thus the same, and it can be as progressive as we desire.

Also, what is your source? It's my understanding that the Treasury has refused to make their analysis on the Fair Tax public.

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13-02-2014, 02:12 PM (This post was last modified: 13-02-2014 02:28 PM by Cathym112.)
RE: The Benefits of the Fair Tax
(13-02-2014 01:09 PM)frankksj Wrote:  
(13-02-2014 11:25 AM)Cathym112 Wrote:  Roads. Infrastructure. These are things brought to you by Keynesian theory.

You never read my posts about this. It's the OPPOSITE. In the century before the government took over providing transportation infrastructure, when it was free market, the pace of innovation was fast and furious. The US went from nothing to having modern roads, synchronized traffic lights, etc., in the course of 100 years. By the 1920's, there were 250,000 miles of rail, with air conditioned trains running at 100mph. And, the free market was building prototypes for the next technology to replace roads; vacuum-evacuated tunnels, which their models proved could transport us at hypersonic speeds, making the trip from LA to NY in about 30 minutes.

BUT, then the government took over, confiscated and nationalized roads and rail. Now we have 10% of the track we used to, trains are running at half the speed, the roads and bridges are falling apart. The technology has gone BACKWARDS since the government took over.

You and your beloved government roads have cost millions of lives, created pollution, congestion, reduced mobility. If it had remained a free market service there's no reason to believe the progress wouldn't have kept pace with the previous century, and with all the other technologies that remained in the free market domain.

I read it. I don't agree with your conspiracy theorist ramblings....or your mischaracterization of history.Hobo


..."the 1920's, there were 250,000 miles of rail, with air conditioned trains running at 100mph."...thats interesting. Since air conditioning for automobiles and other transportation didn't start occurring until the 1950s. Shit. Large buildings weren't air conditioned until 1932.


seriously. There is no point in talking with you. Factual accuracy is hard. Making shit up is easy. Drinking Beverage

the construction of railroads after the great depression was from the "New Deal" of President Franklin Roosevelt sought to stabilize the economy in a number of ways. The Reconstruction Finance Corporation had been chartered during the Hoover administration to loan money to essential businesses, including banks and railroads, but had accomplished little before 1934. Despite Roosevelt's skepticism about the economic benefit of federal public works spending, his new Public Works Administration funded schools, courthouses, hospitals, highways, bridges and other transportation improvements. Though thousands of miles of highways were built, the largest railroad project of the era was the RFC/PWA-financed electrification of the Pennsylvania Railroad between New York City and Washington, D.C.

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13-02-2014, 02:19 PM
RE: The Benefits of the Fair Tax
(13-02-2014 10:36 AM)frankksj Wrote:  This is tiresome, and totally off the topic of this thread. And you're STILL throwing out silly, false statements, like claiming that Pyrite mimics the attributes of gold. Pyrite: "a superficial resemblance to gold, hence the well-known nickname of fool's gold." Speak for yourself. YOU may not able to tell the difference between a coin make of gold vs. pyrite, but lots of people, myself included, can tell the difference without even needing any tools.

Nice job disingenuously ignoring pretty much everything I said and obsessing over a misinterpretation of a triviality.

That's how the pros debate.

Once upon a time I merely commented on what I thought would be an uncontroversial proposition: that value is a human construct, and that this applies to any form of currency by definition.

Your gold fetish notwithstanding.

Would you care to address anything substantial of what I said?

(13-02-2014 10:36 AM)frankksj Wrote:  The bottom line is that the one who understands the system best is the one who can accurately predict the result.

The bottom line is that you are so ignorant you don't know how ignorant you are.

(13-02-2014 10:36 AM)frankksj Wrote:  Austrian economists and Libertarians are predicting that there is no way out of this indefinite QE so that within the next 10 years we will again have a collapse of fiat currencies so they are either abandoned or of little value and the dollar will lose it's place as the world's reserve currency. On the other side, Keynesian economists and Democrats, Republicans believe the QE is temporary, it will stimulate the economy, and that this time, for the first time ever, today's fiat currencies will prevail.

Just go on the record, state which side you're on. Time will tell who understands the system better, and if I'm wrong, I'll have no problem admitting it.

I said I don't expect anything to last forever because nothing lasts forever.

This is an answer you reject, because it does not fall within your overly-narrow and obsessively confined parameters.

(13-02-2014 01:20 PM)frankksj Wrote:  
(13-02-2014 09:39 AM)cjlr Wrote:  [the German mark going fiat] wasn't 100 years ago.

Sorry, I know I said I'd stay on topic, but it was bugging me to let such a glaring false statement lie. Not that cjlr will admit he misspoke. But the Mark went fiat in 1914. Since you obviously can't do the math, get out a calculator and type in 2014-1914. What do you get genius? Oh yeah, it WAS 100 years ago.

You did not just go full pedant! Oh, snap!

Except the Mark was removed from the gold standard in August 1914 after the war began. That's more than 100 years. PRECISION BURN.

(13-02-2014 01:20 PM)frankksj Wrote:  And WHY did it happen in 1914? Oh yeah, Germany needed to pay for WWI, and a fiat currency is an essential component of any stupid, wasteful war of aggression.

So, every other war that happened before then in which one or more participants maintained the use of metal-backed currency throughout: not data points in your analysis?

(I am being generous with the word 'analysis')

(13-02-2014 01:20 PM)frankksj Wrote:  If the motherland is attacked, the people will give the shirts off their back to support the war effort. But, if it's a stupid, aggressive war just to satisfy power-crazed politicians, it's impossible to get the people to part with the money willingly through taxation. You NEED a fiat currency, so you can stealthily confiscate the people's money without them knowing it. Similarly, during WWI, the US ALSO switched to fiat currency to pay for the war.

Are you sure it's not a plot by shapeshifting reptiloid aliens?

(13-02-2014 01:20 PM)frankksj Wrote:  Fast forward to 1971. What did Nixon do when the Pentagon Papers came out and the American public grew weary of Vietnam? Oh yeah, switch to a fiat currency to pay for it. Fast forward to 2003. Imagine if the US didn't have a fiat currency, so GW Bush would have said: "My fellow Americans, we found this document. We can't verify its authenticity, but it suggests Saddam is trying to buy yellowcake. So we need to budget $6 trillion for this war. I need every American family to write a check for $60,000 payable to 'Iraq War Effort'. Please remit asap, so we can get this war underway". Come on, there could never have been an Iraq war were it not for a fiat currency that let Bush fund the war without having to go hat in hand to the taxpayers.

You seem not to understand the nature of credit.

It is fully possible to go into debt no matter what currency is based on.

Did they not mention that in economics school Wikipedia?

(13-02-2014 01:20 PM)frankksj Wrote:  In the case of Iraq, the fiat currency was not only a necessary component for the war, like in WWII, it was actually the CAUSE of the war; it's not coincidence that Bush decided to take Saddam out the moment he started selling oil in Euro's, and the first thing the military did was seize the oil fields and return all Iraq's oil sales to US dollars to preserve the dollar's status as the world's reserve currency.

So, I did NOT say a fiat currency causes all wars, although it often does, as in the case of Iraq and WWII, but it is a necessary component for stupid wars that the people won't willingly fund. That's how it started in the 11th century, and that's how it continues today.

You should probably read a history textbook.

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13-02-2014, 03:15 PM
RE: The Benefits of the Fair Tax
(13-02-2014 02:12 PM)Cathym112 Wrote:  ..."the 1920's, there were 250,000 miles of rail, with air conditioned trains running at 100mph."...thats interesting. Since air conditioning for automobiles and other transportation didn't start occurring until the 1950s. Shit. Large buildings weren't air conditioned until 1932.

Once I provide the proof that your history and facts are all wrong, will that change your opinion? When you read, say, about the Pioneer Zephyr that was travelling at speeds up to 112mph, and yes, it was air conditioned, will you reconsider your ideology? Of course not. Your ideology is not based on the facts, so the facts can change, and your ideology will forever remain set in stone. You hunt for facts to support your ideology, but when the facts contradict it, you just ignore the facts.
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13-02-2014, 03:29 PM
RE: The Benefits of the Fair Tax
(13-02-2014 02:19 PM)cjlr Wrote:  Once upon a time I merely commented on what I thought would be an uncontroversial proposition: that value is a human construct, and that this applies to any form of currency by definition.

Yes. But it's irrelevant, and I'm not disputing it. What you say is self-evident, but what does it have to do with the subject at hand? As I've said repeatedly, we're debating if the medium of exchange should be something that (a) whoever issues it can make as much of it as he wants with no hard costs (ie fiat currency), or (b) is tied to a tangible commodity, and thus, if the government wants your money, they have to take it from you transparently through taxation.

That's the issue. You refuse to commit to any side, and keep throwing out irrelevant and uninteresting side points. Pick a fucking side. Do you think a fiat currency is a better medium of exchange, or a commodity?

When I pressed you to answer this you wrote:

"I said I don't expect anything to last forever because nothing lasts forever. This is an answer you reject, because it does not fall within your overly-narrow and obsessively confined parameters."

I reject that answer because you, as always, refuse to take a side or state an opinion. You like to criticize other people's opinions, but won't subject yours to criticism. Sure, nothing lasts forever. That's irrelevant. Do you favor fiat currency, or commodity (representative currency)?

(13-02-2014 02:19 PM)cjlr Wrote:  You did not just go full pedant! Oh, snap! Except the Mark was removed from the gold standard in August 1914 after the war began. That's more than 100 years. PRECISION BURN.

I don't even know what you're saying. The mark had been on a gold standard for a very long time. World War I broke out in July, 1914. WITHIN ONE MONTH, Germany dropped the gold standard and went fiat. Are you (a) debating that 1914 was 100 years ago, (b) debating that Germany went fiat to fund the war effort.... What, specifically, are you saying?

(13-02-2014 02:19 PM)cjlr Wrote:  So, every other war that happened before then in which one or more participants maintained the use of metal-backed currency throughout: not data points in your analysis?

I'll put it to you. How many major, unpopular wars can you think of this past century that did could be financed with a commodity (like gold) and did NOT require financing with fiat currency?

WWI, WWII, Vietnam, Iraq, etc., etc., all required the war mongers to switch to a fiat currency to fund the war. The Korean War was not. But, more often than not, when you look at the major unpopular wars, the warring nations switched to a fiat currency around the same time.

(13-02-2014 02:19 PM)cjlr Wrote:  You seem not to understand the nature of credit.
It is fully possible to go into debt no matter what currency is based on.

No shit. But if you don't have a fiat currency, you'll ultimately have to pay the debt. And the higher the debt gets, the more interest you'll pay. So, without a fiat currency, issuing debt STILL IS spending money--it's just deferred spending.

With a fiat currency, however, you can never default. The government can take on debt that is 100x the nations gdp, and when it's time to pay, just hit 'print'. And if nobody will loan them money anymore, they just have the central bank buy up all the debt. So, with a fiat currency, "debt" never gets repaid--it gets printed, and when it does, the wealth gets confiscated from the people without them knowing about it.
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13-02-2014, 03:56 PM (This post was last modified: 13-02-2014 05:07 PM by Cathym112.)
RE: The Benefits of the Fair Tax
(13-02-2014 03:15 PM)frankksj Wrote:  
(13-02-2014 02:12 PM)Cathym112 Wrote:  ..."the 1920's, there were 250,000 miles of rail, with air conditioned trains running at 100mph."...thats interesting. Since air conditioning for automobiles and other transportation didn't start occurring until the 1950s. Shit. Large buildings weren't air conditioned until 1932.

Once I provide the proof that your history and facts are all wrong, will that change your opinion? When you read, say, about the Pioneer Zephyr that was travelling at speeds up to 112mph, and yes, it was air conditioned, will you reconsider your ideology? Of course not. Your ideology is not based on the facts, so the facts can change, and your ideology will forever remain set in stone. You hunt for facts to support your ideology, but when the facts contradict it, you just ignore the facts.

Directly from the source you just cited (again, Wikipedia) "The Pioneer Zephyr is a diesel-powered railroad train formed of railroad cars permanently articulated together with Jacobs bogies, built by the Budd Company in 1934 for the Chicago, Burlington and Quincy Railroad (CB&Q), commonly known as the Burlington. "

1934. It's the new 1920s eh? Further, your source says nothing of air conditioning... Want some Ice for that burn?

So. I ask you the same "Once I provide the proof that your history and facts are all wrong, will that change your opinion? "

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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