The Benefits of the Fair Tax
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17-02-2014, 03:14 PM
RE: The Benefits of the Fair Tax
(17-02-2014 10:29 AM)frankksj Wrote:  
(17-02-2014 10:05 AM)Cathym112 Wrote:  Hmmmmm...wonder why in 2000-2005, the gain fell while the rate remained the same....

Jeez, you're a "professional economist" and you don't know this???? It's because during the 90's Alan Greenspan fueled a huge dot com bubble, which burst. As I said, you'll see from the chart, there's a perfect opposite correlation between tax rates and tax revenue EXCEPT during the dot com bubble, when the revenues shot up, and then during the bust when they plummeted. If you average out the bubble and bust, you'll see the correlation remains perfect for 40 years. Every notch you raise the tax rate people reduce their work effort accordingly.

So, when people call for a return to a 40% ltcg rate, which means tax revenue would plummet again from $850b to $40b, it's undeniable this is going to wipe out government's tax revenue and make the economy even worse, but they call for it anyway because it satisfies an emotional need to see rich people get punished.
The point, Frankie 5, was that other factors contribute. It's not just one reason.

And dot com was not a factor during this as most of the dot com bubbles were over

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17-02-2014, 03:17 PM
RE: The Benefits of the Fair Tax
(17-02-2014 10:58 AM)GirlyMan Wrote:  That's bullshit Frank. I could make 3x my salary if I went to work as a Beltway Bandit....

Agreed, but that's still the point. Beltway bandits means private companies located next to Washington DC that bilk the taxpayers for shitloads of cash and can pay salaries that are extraordinarily high. The point was that Maryland and Virginia's unusually high salaries come from their proximity to Washington DC--whether the employees work directly for the Federal gov't, or for a gov't contractor.

The only thing I was disputing is that this is a model for the other 48 states to follow.
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17-02-2014, 03:23 PM
RE: The Benefits of the Fair Tax
(17-02-2014 10:10 AM)GirlyMan Wrote:  
(17-02-2014 10:04 AM)toadaly Wrote:  The correlation coefficient is very strong - states with high state income taxes lag, and those with low or none, lead, other factors being equal.

The Peoples Republic of Maryland with the highest median income per capita as well as some of the highest taxes in the US would beg to differ. The Free State don't lag behind, we fucking lead. Tongue

...or you can look at all 50 states, instead of just one. Wink

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17-02-2014, 03:45 PM
RE: The Benefits of the Fair Tax
(17-02-2014 10:04 AM)toadaly Wrote:  
(17-02-2014 08:19 AM)wazzel Wrote:  Historical data does not back that up. Tax revenue regardless of rate is around 19% of GPD, fairly consistently. GPD growth has happend in time of both low and high top marginal rates. While there may be some relation it is not the only cause.

Sure, but the argument is not really about marginal rates, that was used as a demonstration of principle that income taxes are a disincentive to productivity. At 100% taxation productivity will drop to zero. At 0% it's maximized, all other factors equal.

There was a metastudy completed recently, reported in the latest issue of Reason, showing a direct correlation between state income tax levels and state economies. The correlation coefficient is very strong - states with high state income taxes lag, and those with low or none, lead, other factors being equal. I don't think I can link it, as it's a paid source. But outside this thread, it's not really a controversial claim anyway.
IMO that holds true if the rates become punitive in nature, but not for small marginal increases like we have now. If my next promotion put me in a 100% tax bracket I would tell them to keep it, but if it took me to a tax rate that was 5%-10% more than I pay now I would take it. IMO that is how most people would view it also.

As far as the state thing, I have no idea I never looked into it. Figured things were all over the board and really depended on what industry was doing well at the time.
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17-02-2014, 04:08 PM
RE: The Benefits of the Fair Tax
(17-02-2014 03:45 PM)wazzel Wrote:  IMO that holds true if the rates become punitive in nature, but not for small marginal increases like we have now. If my next promotion put me in a 100% tax bracket I would tell them to keep it, but if it took me to a tax rate that was 5%-10% more than I pay now I would take it. IMO that is how most people would view it also.

As far as the state thing, I have no idea I never looked into it. Figured things were all over the board and really depended on what industry was doing well at the time.

You keep talking about receiving promotions. Taxes have nothing to do with that. At any rate, this conversation has hit a brick wall. It seems pointless to continue it.

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18-02-2014, 08:23 AM
RE: The Benefits of the Fair Tax
(17-02-2014 04:08 PM)toadaly Wrote:  
(17-02-2014 03:45 PM)wazzel Wrote:  IMO that holds true if the rates become punitive in nature, but not for small marginal increases like we have now. If my next promotion put me in a 100% tax bracket I would tell them to keep it, but if it took me to a tax rate that was 5%-10% more than I pay now I would take it. IMO that is how most people would view it also.

As far as the state thing, I have no idea I never looked into it. Figured things were all over the board and really depended on what industry was doing well at the time.

You keep talking about receiving promotions. Taxes have nothing to do with that. At any rate, this conversation has hit a brick wall. It seems pointless to continue it.

I just use promotion as a word to indicate a large raise. But anyway. I have lost interest too. Thanks for sharing your views and being nice about it.

Later
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18-02-2014, 07:14 PM
RE: The Benefits of the Fair Tax
(12-02-2014 05:57 PM)frankksj Wrote:  
(12-02-2014 05:39 PM)cjlr Wrote:  Literally anything.

So predictable. I've gone on the record, laying out my opinion clearly, subjecting it to criticism, saying that the best physical substance I can think of to use as a medium of exchange is gold. You say that's dumb, so I ask you what you think is a better medium of exchange, and you...
refuse to list anything specific, so that your answer can never be subjected to criticism.

Everybody can see this means you're backed into a corner again. If you really were able to think of a better substance to use, you'd obviously have told us what it is and showed us how smart you were.

Regarding the attributes, like melting, like I said, please enlighten us and tell us WHAT substance you propose would make a good medium of exchange, and, in an old low-tech society, how to divide your substance into smaller units that are easily recognizable.

Pick a substance, or admit that, despite your bashing me for picking gold, you honestly can't think of a better one.

How about silver, platinum, palladium, rhodium, ruthenium, palladium, osmium, or iridium?

We don't actually use gold as a medium of exchange though.

U.S. coinage has no precious metals whatsoever. It used to be primarily silver (and some gold) but always included copper and nickel, and often manganese, tin, and zinc. Even steel has been used.

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19-02-2014, 11:04 AM
RE: The Benefits of the Fair Tax
(18-02-2014 07:14 PM)Chas Wrote:  How about silver, platinum, palladium, rhodium, ruthenium, palladium, osmium, or iridium?

I promised not to derail the discussion by returning to monetary policy, but quickly why do you think those are better than gold?

Are they harder to counterfeit? I looked at pictures of most of them, and they most are gray and look alike, so it seems it would be hard to know what was real.

Also, have you checked the scarcity? If it's too scarce, like iridium, how will you get enough of it to have coins for everybody to use? Also, have you confirmed that the deposits are scattered in tiny amounts, not big chunks, and that the total quantity of the stuff increases at roughly 1-2%/year, the same as the economy and population in general? If it's too hard to find, then you'll have deflation, and people will sit on the money and not spend it since the money grows in value, and nobody will be willing to make loans. If it's too easy to find and the supply grows more than 1-2%/year, you'll have inflation, and then people won't save for their future or make wise investments or execute long-term contracts since the value of the money will go down.

Money makes the world go round, as they say. Without it, we'd still be hunter gatherers spending each day just foraging for food. And if you use money that doesn't maintain a steady value, like Germany after WWI, it leads to economic meltdown and horrific tragedies. So it's important to pick the right medium of exchange.

What do you think would be the best medium of exchange? Currency that is tied to a commodity (gold, etc.), or one that the central bank can print what they want? If a commodity, what do you feel would be the best commodity to use?
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19-02-2014, 11:12 AM (This post was last modified: 19-02-2014 11:19 AM by Chas.)
RE: The Benefits of the Fair Tax
(19-02-2014 11:04 AM)frankksj Wrote:  
(18-02-2014 07:14 PM)Chas Wrote:  How about silver, platinum, palladium, rhodium, ruthenium, palladium, osmium, or iridium?

I promised not to derail the discussion by returning to monetary policy, but quickly why do you think those are better than gold?

Are they harder to counterfeit? I looked at pictures of most of them, and they most are gray and look alike, so it seems it would be hard to know what was real.

Also, have you checked the scarcity? If it's too scarce, like iridium, how will you get enough of it to have coins for everybody to use? Also, have you confirmed that the deposits are scattered in tiny amounts, not big chunks, and that the total quantity of the stuff increases at roughly 1-2%/year, the same as the economy and population in general? If it's too hard to find, then you'll have deflation, and people will sit on the money and not spend it since the money grows in value, and nobody will be willing to make loans. If it's too easy to find and the supply grows more than 1-2%/year, you'll have inflation, and then people won't save for their future or make wise investments or execute long-term contracts since the value of the money will go down.

Money makes the world go round, as they say. Without it, we'd still be hunter gatherers spending each day just foraging for food. And if you use money that doesn't maintain a steady value, like Germany after WWI, it leads to economic meltdown and horrific tragedies. So it's important to pick the right medium of exchange.

What do you think would be the best medium of exchange? Currency that is tied to a commodity (gold, etc.), or one that the central bank can print what they want? If a commodity, what do you feel would be the best commodity to use?

Did you miss this?

U.S. coinage has no precious metals whatsoever. It used to be primarily silver (and some gold) but always included copper and nickel, and often manganese, tin, and zinc. Even steel has been used.

We used to have silver dimes, quarters, half dollars, and dollars. Their values were fixed and not tied to the value of the metal.
The metal itself does not change the face value of the coin - regardless of the metal, it is fiat currency.

We have seen, in recent decades, the melting down of silver coins because the coin's metal content had a higher value than the face value. And recently, even older U.S. pennies are melted down for their copper. So maybe scarce metals are not a good choice.

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19-02-2014, 11:46 AM
RE: The Benefits of the Fair Tax
(19-02-2014 11:12 AM)Chas Wrote:  Did you miss this? U.S. coinage has no precious metals whatsoever.

First, that's wrong. Article one of the US Constitution says "shall not... make any Thing but gold and silver Coin a Tender in Payment of Debts". The original US $ coins WERE gold, and anything else is actually a violation of the constitution. Regardless, even when the US was minting coins of copper for convenience, since gold was too scarce, such as the 50's and 60's, it still was NOT a fiat currency, because 3,500 copper pennies were convertable on demand into 1 oz. of pure 24-carat gold (the 1 oz of gold was pegged at $35). So, in 1970, all coins, no matter what they were made of, could be converted into pure gold. That's representative currency, meaning it represents a commodity, so whoever is issuing it, and whether it's made of paper or some cheap metal, the issuer must exchange it for the commodity that backs it up.

The whole point of a representative currency is one thing: to prevent the issuer from just making more of it. So, all this discussion is really irrelevant until you answer the core question: Should the central bank (in the US, it's owned by the big banks) be able to make as much currency as they want so that if they want money they just print it and devalue the money that's already in circulation (fiat currency)? Or should they be required to convert it into a commodity at a set price to ensure that if they want money, the have to get it from the people transparently (representative currency)?

You still haven't answered. Which is a better system? fiat or representative?
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