The Benefits of the Fair Tax
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14-02-2014, 04:50 PM
RE: The Benefits of the Fair Tax
(14-02-2014 04:34 PM)toadaly Wrote:  
(14-02-2014 04:20 PM)wazzel Wrote:  Was in Texas. I got the opportunity to move home to Louisiana and took it. Taxes are probably part of the picture but not the picture. I do not think any form of taxation, if applied properly, are counter to productive labor. The specific mechanism of collection is unimportant. Functionally they all do the same thing.

How can you properly apply taxes to productive labor, without acting as a disincentive to productive labor? No matter the nuances, it's going to be a disincentive. Taxation is not exempt from market forces. If taxes cause a reduction in take home pay, there is then less incentive to work in the first place, particularly if on the other end, there are also incentives not to work - such as never ending unemployment payments. If taxes cause milk to cost more, people will buy less milk. This is basic economics. There's nothing controversial about these statements.

Did you pass up your last raise that put you in a higher tax bracket? I did not and I will not if it comes around agin. That is my point about proper taxation as opposed to the extreme examples or taxation to discourage behavior.
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14-02-2014, 04:53 PM
RE: The Benefits of the Fair Tax
(14-02-2014 04:17 PM)frankksj Wrote:  
(14-02-2014 02:31 PM)wazzel Wrote:  You are also compareing a country that is the size of a small US state in size and population. Not really a valid comparison to me.

YES!!!!

100% correct. There is NO comparison. A small tax jurisdiction is orders of magnitude more efficient than a big one! YES!!! That's why you get some value from your tax dollars when taxation is at the local level, and as the size of the jurisdiction grows, there are so many layers of bureaucracy and middle men that by the time it reaches, say, 300m people, like the US Fed Gov't, you're not getting anything for your tax dollar! That's why I keep saying taxation should be done on smaller, local scales. You seem to concede the point that there's no comparison between the efficiency of small, local taxation vs. big, huge national taxation. So why are you defending big, huge tax jurisdictions?

(14-02-2014 02:31 PM)wazzel Wrote:  Yes really, it does not matter if they get the money when you earn it or spend it or they sends you a bill for owning property they will get the money. Quit using stupid examples.

These are actual, real-life examples!! Why do you think they have a tax on cigarettes, but not bread??? Explain that, if, as you say, it makes no difference what you tax and people are going to pay it regardless?? Why is it that when Europe places 400% taxes on gasoline, suddenly people stop driving so much and take public transport? Why is it that when Denmark places a 100% on cars, nobody buys new cars?

You're argument that it doesn't matter what you tax because will never change their behavior to avoid taxation is ABSURD! OF COURSE whatever is taxes, people avoid. The more you tax, the more people avoid it. The more you tax hard work, the more people avoid it. The more you tax property, the less people spend on their property. This is a no-brainer. You're really grasping at straws to insist it makes no difference what you tax because it won't change people's behavior.

I am not even talking about taxing to change behavior. I am stating that the method of collecting taxes will not significantly change the tax burden if the tax payer. I never even touched on that other stuff
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14-02-2014, 05:20 PM
RE: The Benefits of the Fair Tax
(14-02-2014 04:50 PM)wazzel Wrote:  Did you pass up your last raise that put you in a higher tax bracket?

Heck, yeah. I went a lot further than that. I actually fled the country, and started two businesses abroad, both of which I've now sold, each employing hundreds of people--none of those jobs are in the US. And I married a non-US citizen ages ago, and ever since my spouse owns everything. We actually DO pay fairly high taxes abroad, but the IRS doesn't get a penny. So, yes, absolutely, people will rebel when big brother is too invasive, coming at you with guns and laws demanding to control everything you do every waking moment of the day.

(14-02-2014 04:50 PM)wazzel Wrote:  I did not and I will not if it comes around agin.

Like I said, everybody's threshold is different. If you're making $100k/year, and the marginal rate on income over $100k is, say, 35%, MAYBE that's not enough to discourage you for putting in overtime. BUT, surely if you kept raising up at some point you too would simply say it's not worth it. Conversely, even if you lower it to 0%, some people will never put in overtime.

That's my whole point. Every human is not the same. It's a wide, infinite spectrum of millions of people responding to incentives. At 0% you have the maximum incentive, at 100% the least. As you change the incentives, people's behavior starts changing. It's very common that people say "Well, this is how _I_ will behave", and you build a whole system around the assumption that everybody else is exactly like you.
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14-02-2014, 06:11 PM (This post was last modified: 14-02-2014 06:15 PM by GirlyMan.)
RE: The Benefits of the Fair Tax
(14-02-2014 05:20 PM)frankksj Wrote:  Like I said, everybody's threshold is different. If you're making $100k/year, and the marginal rate on income over $100k is, say, 35%, MAYBE that's not enough to discourage you for putting in overtime. BUT, surely if you kept raising up at some point you too would simply say it's not worth it. Conversely, even if you lower it to 0%, some people will never put in overtime.

That's my whole point. Every human is not the same. It's a wide, infinite spectrum of millions of people responding to incentives. At 0% you have the maximum incentive, at 100% the least.

You characterization of incentives assumes that monetary compensation continues to be an incentive even after the marginal utility of money has been reduced to the noise level. I work with a shitload of research scientists and engineers who make a decent living, enough money for their purposes, are ineligible for overtime and work 60 hour weeks anyway. The work is what incentivizes them, not the money. Hell when we got furloughed for a week or so last year they broke Federal law and risked their jobs by illegally continuing to work for free anyway. Everyone looked the other way. They couldn't help themselves, it's in their nature. Once you have enough and the marginal utility of anything more is disinteresting and in the noise, incentives change. They evolve.

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14-02-2014, 06:16 PM
RE: The Benefits of the Fair Tax
(14-02-2014 06:11 PM)GirlyMan Wrote:  Once you have enough and the marginal utility of anything more is disinteresting and in the noise, incentives change. They evolve.

True. All I'm asking is a concession that everybody's different. While you and your colleagues may have no desire to earn more than $150k/year, to some people $150k isn't even to refuel the jet. So, will you concede that in a population of 300m there will always be SOME people who change their behavior as their incentives are reduced? I imagine you're not advocating public policy based on the assumption that everybody reacts the same way you do to incentives, right?
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14-02-2014, 06:49 PM (This post was last modified: 14-02-2014 06:55 PM by GirlyMan.)
RE: The Benefits of the Fair Tax
(14-02-2014 06:16 PM)frankksj Wrote:  
(14-02-2014 06:11 PM)GirlyMan Wrote:  Once you have enough and the marginal utility of anything more is disinteresting and in the noise, incentives change. They evolve.

True. All I'm asking is a concession that everybody's different. While you and your colleagues may have no desire to earn more than $150k/year, to some people $150k isn't even to refuel the jet. So, will you concede that in a population of 300m there will always be SOME people who change their behavior as their incentives are reduced?

Of course it's individual. Don't mean I ain't allowed to look askew at someone feeling the need for a yacht in the first place and questioning their priorities. Something about a camel and the eye of a needle or somesuch shit. And the US current tax system incentivizes rich fuckers NOT to work. Capital gains at 15%, top income tax at 39.6%. Consider ... Nope. I ain't fucking working. Not gonna do it. I got no income. I got people for that. Hell if I play this shit right and shuffle these cards properly I might even qualify for Medicaid and the Earned Income Credit. In the immortal words of the late, not so fucking great, Leona Helmsley, "We don't pay taxes. Only the little people pay taxes".

(14-02-2014 06:16 PM)frankksj Wrote:  I imagine you're not advocating public policy based on the assumption that everybody reacts the same way you do to incentives, right?

Of course not. But I am for public policy establishing a continually changing progressive tax rate system where the thresholds have a reasoned economic consensus basis behind them. Oh, and I am for seriously high luxury taxes on $150 million yachts and jets and shit. Conspicuous consumption should come at a price. "Yeah, you're gonna need to get a permit for that." Tongue

As it was in the beginning is now and ever shall be, world without end. Amen.
And I will show you something different from either
Your shadow at morning striding behind you
Or your shadow at evening rising to meet you;
I will show you fear in a handful of dust.
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14-02-2014, 09:48 PM
RE: The Benefits of the Fair Tax
Have I won the argument yet?

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Now with 40% more awesome.
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15-02-2014, 01:04 AM
RE: The Benefits of the Fair Tax
(07-02-2014 02:59 PM)Carlo_The_Bugsmasher_Driver Wrote:  I have to say, I'm becoming a proponent for this form of taxation.

For those who don't know, the Fair Tax is the abolishment of the existing Federal Income Tax and replacing it with a Federal sales tax on all purchased goods and services.

It seems to have a number of very good advantages. First off, it creates an incentive for people to save money. After all, the less you spend, the less you lose in tax. It also provides you with more money in your pocket come payday and you can control how much of that is lost in tax by what you purchase.

Second, as you save more, the banks benefit as they have more money to lend. This makes it easier for them to grant you a loan if you need money and raises the interest rates on savings accounts, allowing them to be more practical for retirement savings.

The amount of sales tax levied can be set according to the value of the good or commonidy. Expensive items such as exotic cars or private jets can have an additional 'sin tax' imposed upon them as could other vice such as alcoholic beverages, tobacco or marijuana.

Thoughts?

I find the prebate aspect of the fair tax to be both stupid and gimmicky. I like the idea of getting rid of income taxes and replacing them with consumption taxes, but since I am of the opinion that the wealthy benefit more than proportionally from the protection offered by government, we should in fact pay more on a proportional basis. But the right way to do this, IMHO, is to have graduated sales taxes. Certain basic items would be tax exempt - basic food staples, and thrift store clothing, for example.

Other items could be taxed progressively. To demonstrate the concept, new shoes under $20 might be tax free, or taxed at a very low rate. The rate of sales tax could then increase linearly with sales price for shoes prices $20 or over, until it peaks at ...say 200% for shoes priced $1000 and up.

Something like this would be as progressive as we want it to be.

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15-02-2014, 01:19 AM
RE: The Benefits of the Fair Tax
(14-02-2014 04:50 PM)wazzel Wrote:  Did you pass up your last raise that put you in a higher tax bracket? I did not and I will not if it comes around agin. That is my point about proper taxation as opposed to the extreme examples or taxation to discourage behavior.

Of course everyone would gladly accept *more* for the same product/labor, but if *less* if offered, because of taxes, then it's a dissincentive.

Softly, softly, catchee monkey.
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15-02-2014, 08:03 AM
RE: The Benefits of the Fair Tax
(15-02-2014 01:19 AM)toadaly Wrote:  
(14-02-2014 04:50 PM)wazzel Wrote:  Did you pass up your last raise that put you in a higher tax bracket? I did not and I will not if it comes around agin. That is my point about proper taxation as opposed to the extreme examples or taxation to discourage behavior.

Of course everyone would gladly accept *more* for the same product/labor, but if *less* if offered, because of taxes, then it's a dissincentive.

So you're saying a substantial raise in pay, (especially one significant enough to bump you in tax rate is usually accompanies a promotion) is a disincentive to work?

Oh no!! Your given a raise/promotion and expected to work more because of it? Poor poor employee!! More money = more responsibility.

Are you telling me people feel THAT entitled that expecting more work and more production out of more pay would disincentivize them to work?

If I offered you a raise and a promotion, and you turned it down because you would naturally now be required to work more and pay more taxes, I would actually begin to phase you out of a job with my company. Why? Because there are too many people unemployed who are dying to work, to make money, and will bend over backwards for anything I ask them to do. I wouldn't want anyone working for me who felt disincentivized because I paid them more money.

Why? As an employer I bend over backwards to make my employees happy. Because I know that happy people are more productive. I have rec rooms, onsite daycare, match 150% of your 401 contributions if you put 10% of your income in it.

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