August 11, 2007

Here's the GOP debate on the "Fair Tax" and getting rid of the IRS. One day this will happen. The only question is when.

I believe the Great Housing Crash will make people think twice about the mortgage interest deduction, the great sacred cow. Our tax system is broken, unfair and inefficient, and now even mainstream candidates for President are talking about "crazy" ideas like a flat tax or fair tax.

It's about damn time.

I don't have much confidence our incompetent and corrupt leaders will do anything radical, but with the US $50 Trillion in debt, only radical changes are going to get us out of this mess.

Enjoy the video, and it'll be interesting to hear your thoughts on our tax system and that damn REIC-lobby-wet-kiss mortgage interest deduction

63 comments:

Bitter Renter said...

A flat tax or national sales tax is unfair. The poor will be paying a huge percent of their income just to live while the rich will be paying nearly nothing. The middle class (what's left of it after 40 years of conservative economic policies) will do little better than the poor. But the rich will do GREAT.

We wouldn't need an IRS if it weren't for stingy conservatives and selfish libertarians. You think they'd pay for any of the services they use voluntarily? Are you NUTS? Those people would eat their mothers if they thought they'd shit money.

Daniel (the other one) said...

The mortgage deduction leads people to pull as much equity as possible out of their houses. In fact I know people who have pulled equity out of their houses to invest in the stock market, because they can more than make up the interest they are paying. The interest rate may only be 6%, which can be equivalent to less than 4% on a post-tax basis. If you take that money and buy a stock that returns 8% a year, that's equivalent to 7% after paying long term capital gains tax. Voila--a 3% return on that home equity.

This sort of tax arbitrage may not be that widespread. What is more common is tapping home equity to pay off credit card debt. Sounds great since it reduces the interest rate on the debt. But it enables irresponsible spending on stupid consumer crap. And it trades unsecured debt for secured debt. That's how we get elderly people who have been "homeowners" for 40 years losing their homes to foreclosure.

Minimum Wage said...

If you think renters are bitter now, just wait. Under the FairTax, homeownership (for existing homes) will be even more tax-preferenced than it is now.

Where a lifetime renter and a lifetime homeowner have equal housing consumption, the renter will pay five times as much tax (or more) than the homeowner on housing consumption.

While the FairTax has a universal "prebate" on poverty-level consumption which reduces income-related regressivity, the divide between renters and homeowners will become the new regressivity.

And while the Big Bad IRS will be gone, there will be an ascendancy of 50 state mini-IRS tax collection agencies. The state tax collectors will want to require registration of all rental properties to prevent informal (e.g. renting to family members at favorable rates) and unreported rentals from falling through the cracks. From there, it's a short step to licensure, annual inspection, and increased regulation of rental properties.

Anonymous said...

@daniel said:

The mortgage deduction leads people to pull as much equity as possible out of their houses.

Oops, that interest for the increased mortgage debt ain't necessarily deductible, folks!

Read IRS Pub 963 "Home Equity Debt" very carefully. You can't just willy-nilly deduct unlimited Heloc interest. You are limited to the maximum of deducting the interest on $100,000 only, and only under "perfect" conditions. There are limits based on the difference between FMV and the original home acquisition debt. In a declining market if the FMV is less than the home acquisition debt, there is no deduction on that portion under basis; it isn't allowed as the interest is reclassified and treated as personal debt. In other words, if your house isn't worth what you paid for it and you Heloc it and buy matching jet skis and a diamond necklace, your related mortgage interest deduction will be limited by the difference in the principal between the FMV and the decresed value of your home. And in any case, the mortgage interest deduction cannot exceed the interest generated by Heloc debt of more than $100,000. In the case of investing in a business or an investment, unless you can trace the funds directly to the investment or business expense, any interest deduction related to the Heloc of up to $100,000 will be disallowed by the IRS.

Anonymous said...

Bitter Renter...

YOU are an idiot liberal making assertions with no facts or logic.

There was no IRS and there was no income tax 100yrs ago. Your gross pay = you net pay. look what the gov't has done with our tax money.. not only wasted it, but gotten us in debt.

For many years i was paying 50% of my income... for what?

For some crack whore welfare mom on Maury? For some dumb illegal war? For some criminal gang memeber illegal alien? For what?

Fock those people. Fock them all.

I earn my money, and it is the fruit of my labor.

Fock you Bitter Renter... you marxist commie lib. Go move to venezueala and join your hombres.

Anonymous said...

Minimum Wage said...
And while the Big Bad IRS will be gone, there will be an ascendancy of 50 state mini-IRS tax collection agencies.

-----

Bring that on... 50 states doing what THEY want is better than our facist fed gov that you can't escape unless you mail in the old passport.

with 50 states, they would soon realize that they have to compete for people and biz... there for competing to keep taxes lower and govt more efficent. some would be like Sweden, some would be like Grand Cayman... but atleast we'd all be happier than the crap we have now.

ron paul revolution

realgirl said...

I'm all about the fair tax. Do you think rich people pay taxes now? They hire a fancy CPA to hide their assets & income. They pay basically nothing. Right now, it's middle America that pays. A fair tax ensures that EVERYONE (rich, poor, middle class, even criminals on the street) pays a share. Just my two cents.

Anonymous said...

I have a huge problem with income tax , social security tax, taxes on savings accounts, etc. and NO problem with a sales tax.

The notion that the poor will be negatively impacted by sales (minus food) tax, in absense of all other taxes, is wrong.

1) if you are poor (and I have been in the past), you do not consume as much as someone who's rich. So no problem there.

2) there are ways to work around the sales tax for people who are poor: ever heard of yard sales?

BRING ON the SALES TAX and GET RID of all the other taxes. It's a sweet, simple, solution and is fair for EVERYBODY, those who consume a lot (the rich) and those who consume little (the poor).

Taxing people's labor is just plain wrong. People are supposed to get paid for their work, not pay someone else (the gov.) for the priveledge of working.

anonymous wimp said...

Flat tax? Fair tax?
How will the politicians be able to guide/control society and at the same time pay off their greedy corporate masters if they have a flat or fair tax?
Keep dreaming, Keith, keep dreaming.

Anonymous said...

The mortgage deduction's got to go. What a racket.

Bitter renter- just how much do you buy in a year that you'd be done in by a sales tax?

It is disenguous to think that the poor would be hurt more by a consumption tax than all the other taxes they currently pay combined.

Poor people do not consume nearly as much as the rich.

And once the ctedit bubble explodes, they'll be consuming even less than they do now.

Consumption taxes are inherently fair. Consume more, pay more. Consume le, pay less.

Anonymous said...

A big benefit to a consumption - only tax is that the government does not have reams of files on every citizen, as they now do.

Think about that- it's huge.

Anonymous said...

The "Big Business" party has finally decided to kick around the subject of our pathetic tax code geared for business and the wealthy. Why now? Because they have sucked the wealth out of the economy? No matter what, if a conservative wins the election (with the exception of Ron Paul), it is a guarantee under a different label for our tax system that big business and the wealthy will still be the winners at the expense of the middle-class and poor. And as for the greatest mistake of their lives, boy Romney was really kissing up. Gagh ..... he really looks like a cardboard cutout.

UK said...

@bitterrenter

Actually, the Fair Tax is actually more progressive than our current system. Everyone gets a rebate so that the poor pay no tax. The wealthy end up paying more tax because all of their current wealth is taxed as they spend, including money transferred to heirs, etc.

I strongly support the FairTax.


http://www.fairtax.org/PDF/FairTax-Fundamentals_and_facts-070122.pdf

Anonymous said...

"from there" it's a short step to revolution!

bitter idiot lies said...

Bitter Idiot claims that Ron Paul is in favor of a bailout but won't give any links or quotes to support his lies. I haven't heard of any Libertarians who have called for a bailout of the banks. In fact, the Fed wouldn't even exist to bail out the banks under the Libertarians.

Hey Bitter Idiot, I'm calling you out. Be a man and answer, or be discredited.

bitter idiot lies said...

Replublicans give more to charity than Democrats. It is the selfish liberals who are stingy. How many charities were founded by athiests?

Gray said...

As a foreigner, I simply can't understand why so many Americans still think a flat tax or the fair tax is even a viable option. The US is currently spending much more than it earns. At the same time, the top tax rate is at a very low point, looking at past decades (in the 60s/70s, 70%! Now it's 35%).This can't go on forever. Very soon, you will have to raise tax revenue. Now, how do you want to do this? Tax the low and middle incomes even more? Not a chance. Where can the feds get the money? The rich and superrich have it stashed away. So a flat tax or the fair won't help at all, the only solution is the good old progressive tax. Everything else is just wishful thinking.

Gray said...

Especially the fair tax is a bad idea. Look, low and middle incomes typically spent a much higher percentage of their incomes for consumption. Under the fair tax, even workers earning the minimum wage would have to pay 23% taxes, they spend all their income, and it all will be taxed. Rich households may only consume 50%, so their effective tax rate will be 11.5%. You think that's fair? You think the nation should finance itself by the lower and middle class taking a much more pressing burden?

And remember, with a sales tax of 23%, everything in Mexico and Canada will be much cheaper than in the US. Smuggling will reach new heights. And people will want to spend their money where they get more for it. Expect a boom for international tourism and a lot of money leaving the US this way.

The flat tax and the fair tax are simply for the rich. They love it. Everybody else would have to pay more, so that they can afford another Ferrari. It makes sense from their point of view, but should low and middle class earners support that? No way.

Anonymous said...

No it will not happen. If you idiots keep voting for Osaba Barack Obama, Hitlery, Garry Reid, Nancy Pelosi etc it will never happen.

Wise up.

Anonymous said...

The current mortgage deduction is a tax shelter for wealthy people. You can currently deduct interest on up to a $1M mortgage. Plus, people are allowed to deduct mortgage payments on more than one home.

All you need to do to make it more fair is stop allowing people to deduct mortgages on their second homes and limit the interest deduction allowed to up to $500,000 mortgage.

Anonymous said...

The "Fair Tax" is hardly fair. Well, I guess it's "fair" to the wealthiest americans, who are no doubt the ones pushing it the hardest. It is the most regressive tax possible and it would hurt the lower and middle classes.

Anonymous said...

I wouldn't call any of these Republicans "mainstream." It's a collection of racists, religious zealots , and/or corporatist opportunists. With the exception of Ron Paul, who is out of the mainstream just by being a Libertarian.

Budvar said...

I agree with the across the board sales tax on everything you buy with the exemption of raw/staple foodstuffs. (ie all non processed food like raw meat, fish, vegetables, flour, sugar and processed things like bread)

For those that say "All this will do is force the rich to buy elsewhere", I say fine let them, only if they want to use/keep them here, they can only use/keep them here for a total of 6 weeks in any 12 month period, then they're liable for the taxes due.

Anonymous said...

minimum wage,

Many good points. Many.

You could be describing Oregon? We could well be heading that direction given the current trend of micro-management?

However... I invite you to join me... in taking heart, being of good cheer and driving a stake through the heart of this thing once and for all.

Surprisingly, I'm "o.k" with MID (mortgage interest deduction). Where "I" part company is when we so very generously extend it SECOND HOMES!!! Oh and gosh... not to be a real drag but (as in the case of Oregon) when one "buys" a place "out on the coast" or "up on Hood" there's... reasonable plausibility that it "could" be your "primary" home?

Where's the enforcement? Seriously, do you know ANYONE that's been busted for selling their "vacation" flip? Anyone?

Uh... what SO MANY bubble bloggers utterly fail to realize in the frenzy to vilify someone... anyone, is that typically "second homes" are about 3-5% of home sales. Yeah, uh.. in 2005 estimates are as high as 40%!!! 40%!!!

Now I realize that good folks like SoCalMortGuy and legions of others like Aaron Krowne at Mortgage Implode-O-Meter love doing "victory laps" and taking bows. But the truth is the non-taxability of RE transactions is what CREATED THE DEMAND for cheap money, loose lending standards and floosie appraisals. NOT... vice versa.

Trust me, when people have to pay taxes... a whole different level of sobriety sets in. Rather than luxuriate in our "victory" bubble bloggers should be pro-actively seeking solutions to prevent the exact same thing from happening again.

Why do you think so many of us have screen names like "Keeping my powder dry" and "Bottom Feeder"?

DinOR

alan's butt boy said...

The FAIR tax is a dumb idea because at its base level, it's a tax on comsumption. Since 3/4 of U.S. GDP now depends on consumer spending, it would instantly throw our economy into depression. In the long run, a sales tax might be good to fix our unbalanced economy -- but like Keynes said, "in the long run, we are all dead".

A flat tax on income makes more sense for the economy we have today.

Anonymous said...

Just one problem

The crash coming will ensure a Dems sweep in 2008, and a flat tax is not on their agenda.

Another opportunity squandered by unchecked gop greed.

cvilletop said...

Bitter Renter is right: a flat consumption tax is inherently regressive. It is true that our current tax structure provides a dis-incentive to savings, and that perhaps the home owner mortgage interest exemption has grown to be the catchall abused tax shelter (I'm sure HELOCs evolved directly as a response to the dissappearance of the CC interest deductions in the '86 reforms).

Whether you agree they are worth the costs or not, there are desireable characteristics to communities made up of owner occupants versus majority renters - particularly in terms of crime and schools - which do generate government savings elsewhere.

Any tax policy is a social engineering policy by the government - you really can't get away from that.

I do think we are fast approaching an era where a serious reworking of our tax policy is needed - and I do agree with the central thesis that a shift away from "income" or "wage" taxes is needed - even Mike Gravel, Dem. candidate from the LEFT, is talking about a progressive consumption tax (something I see as unwield-ly complex).

Finally, the linkage between the evils of the IRS (personal disclosure: I just finally reached a settlement on a three year long trip to tax court fighting an overly zealous IRS inquisitor) and the 'proper' tax policy is completely false. There will have to be some kind of collection and enforcement mechanism, no matter what tax policy we pursue.

This is a classic bit of GOP sleight of hand - a false intellectual leap designed to link most American's (needless) visceral fear of the IRS to tax policy changes that favor the economic elite - including the gutting of the enforcement agencies. Joe 6 Pack carries, already, one hell of a lot higher tax burden than corporations or the economic elite (15% cap gains, 15% dividend - no FICA) as a percentage of his income.

The odds of the IRS auditing your typical 1040 filer, with a W-2 and maybe a couple of 1099's and a home mortgage deduction...are very low. Statistically, it's an insignificant number - of course, that doesn't mean that it never happens - and so, just like flying a commercial flight is statistically far safer than driving - you can still find gruesome examples of disastrous outcomes - to the point that people can have a distorted general perception of the risks. Even in the event such folks are flagged by the IRS computers, any audit is very likely to be relatively painless - the documents and records are very straightforward.

Anyone who's going to be sweating an audit already has a fairly complex return, and likely an accountant, who saves them far more on their tax returns than the cost of a CPA. They are very likely already engaged in some gaming of the system rules. I do have to say - the fact of the latter is evidence that the code is too complex - one should not need to apply game theory to effectively work the tax code.

bickerer said...

Bitter renter...

Eliminate stinginess and selfishness from the human genome? Good luck with that.

Good God man, you're an idiot.

Anonymous said...

the war is not helping.

almost half a trillion dollars so far:
http://theiraqinsider.blogspot.com/2007/07/how-much-does-iraq-war-cost-july-20.html

Anonymous said...

>> A flat tax or national sales tax is unfair. The poor will be paying a huge percent of their income just to live while the rich will be paying nearly nothing.

Here's my vote for "moron post of the day."

Anonymous said...

To Daniel (the other one) at 6:38am - DAMN GOOD POINT!

devestment said...

So does this mean I pay 28% fair, 8.25% state sales, and 50.4% gasoline tax in California?


I am a merchant and witness sales tax behavior every day.

A sales tax penalizes people for spending money and puts the responsibility of declaration on the merchant. This will criminalize merchants and create additional paperwork for them which will be passed on to the consumer. A new breed of consumer will emerge who buys items in a new underground economy. Items bought overseas will be heavily taxed at the border. Unreasonable demand will be put on exempt products which will cause spotty inflation. A new revenue enforcement squad will be established of militant police type cops who will break down doors to expose the non compliant straw traders. This is just a repackaging of an old broken idea.

This is not America; America had a Constitution and bill of rights.

Government is about control. Don't take the bait so easily. It never ends well.

Anonymous said...

the fair tax is a trojan horse

Anonymous said...

Do you really believe that a single Republican candidate would support a flat tax? Except for Ron Paul, they are all just grandstanding.

The moment the issue came up, the people who put them in office would make sure they never supported it. Would cost rich people too much money.

BB

Anonymous said...

Flat tax on income of 25%(12.5 for federal and 12.5 for state)... governments have to budget... no deductions (you bought it, tough shit!)... higher tariffs on imports to get America productive again.

Anonymous said...

Probably the code ($250,000) section 121 exclusion for sale of residence will bight the dust as a result of this housing meltdown.

I agree with major tax overhaul. Current system taxes production. New system should tax consumption to encourage savings.

Anonymous said...

A "fair or flat tax" would produce a garden in every back yard across North America. Let's do it!

You could avoid the 27% "flat tax" just by growing your own corn, potatoes, lettuce, apples, beer, wine, weed, etc.

Make your own bread, solar energy, fruit pies, etc, would become in style.

Generic brands of anything would also crush the expensive corporation brands overnight.

Hmmmm... Do I want to buy the generic brand of nacho chips at $3.98? Or, the large bag of Doritos at $8.95?

Anonymous said...

You think they'd pay for any of the services they use voluntarily? Are you NUTS?

As one of those "selfish libertarians" you don't like, I'd gladly pay for the services I use.

The problem is that socialists like yourself create entire new classes of welfare and entitlement that you exclude me and my family from, partially or fully -- like "marriage" and "social security" and then tell me I'm "selfish" for not wanting to pay your bills for you.

I greatly prefer a "pay as you go" system. Get rid of taxes, create user fees for roads, bridges, etc. and a small sales tax to pay for the military and effective government. My taxes will go way down, since I'm not a ward of the government like you are -- and you'll actually have to pay for your own consumption yourself, rather than handing the bill to the rest of us and advocating "services for me, bills for YOU."

bubbleyum said...

minimum wage:

where do you get the figure that renters would pay 5x more tax?

wouldn't the fair tax help everyone because it would reduce the reckless bubble spending that inflates prices and makes our money worth less? the fair tax, as explained in The Fair Tax Book, would be a 1 time tax on property sales. hence, the landlord of a renter, or an individual buyer, would pay tax on a new place but not on an existing place. this could benefit buyers AND renters. additionally, the large tax incentive to buy an existing place, instead of a new place, to avoid that 1 time tax could greatly reduce sub/urban decay, sprawl and ghost towns. home builders would have to rethink the mindless construction and sprawl that has been going on during this bubble.

how do you arrive at a 5x sales tax disparity? also, this isn't a crazy experiment. several states already have no income tax (e.g., Texas, Washington).

romney & rudy are NOT getting my vote b/c they don't support the fair tax.

Hard_Knocks said...

Well, I have known about the FairTax for some time, via their website. Personally, I can't see anything wrong with it, especially the part about getting rid of the IRS. My opinion is that economic activity (including real-estate transactions) should be primarily based on earned/saved dollars, not on speculation and excessive debt. The only down side I can see to the FairTax is that it'll put a lot of K-Street lobbyists and IRS employees out looking for more productive work.

Anonymous said...

The "Fair Tax" aint going to happen folks...

I've herd them talking about this for over 20 years... its just talk to get people interested in the debates. That's all.

This is not even my opionion. The was the opionion of my Attorney some 15 years ago, when he was in his late 60's. This man was very well politically connected both at a state and federal level. He explained it to me this way.

We are a union of 50 soverign states, each with our own constitution. We united with a single 'Federal' constituion, which we (each state) granted limited powers over ourselves to the Federal Government.

As a result, the Federal Government has no jurisdiction within any of the states, except to the extend permitted in the Federal Constition.

Plenty of existing U.S. Supreem Court case law exists, which clearly provides support to the position that the Federal Government does not have authority to enforce a national sales tax.

Any attempt to impose a massive 23% sales tax, like they are talking about... Would very shortly put out of business any and all businesses who attempted to enforce such collection. As retailers who refused to collect such a tax, would have a clear market advantage. They would also be making plenty of money to afford paying a good law firm to fight all attempts by government employees to enforce an illegal tax. What would make the tax illegal you say. Simply any law which reaches beyond the authority granted to the legislative body who passed it; is in legal fact null or void on its face.

So don't worry about this stuff or get to excited either. Besides congress loves the power to tweak the IRC in exchange for perks, why to much to ever really consider making major changes. Ohh and the special interest money from tax professionals is like a money wrench in any machinery of change.

Anonymous said...

You can bet the lazy moronic socialists will be crying like babies at the thought of working people being able to keep more of their own money

Anonymous said...

Keith,

As you can see, many, if not most, of the posters here are whining socialists. Americans are just as socialist as the Soviets were.

Tax policy won't change. The people like their chains.

i am anonymous said...

"selfish libertarians"?

You have a twisted view of libertarians.

Most self-proclaimed conservatives are actually corporatists and don't want a free market because they'd stop getting a free ride. Maybe you're confusing the two.

The fair tax ain't fair, just eliminate the income tax and replace it with NOTHING.

Ron Paul 2008!

stuckinthecity said...

The Fair Tax will NEVER NEVER NEVER happen. The federal gvt makes promises each and every day. Those promises are backed by the full faith and credit of the U.S. Gvt. Which means, us, the middle class working people. They have to tax our income! What if people don't buy anything or buy from underground business to dodge the 23% sales tax. Then the fed will not eat.

Libetarian day dream

Anonymous said...

Income tax will NEVER go away.

You know why? Sure, you can get tax revenues in many other ways. That's not the issue.

INCOME TAX IS A WAY TO KEEP YOUR TABS ON WHAT PEOPLE ARE DOING.

When people have to report all their money transactions, it gives you (if you are a government) the ideal way to spy on them. Follow the money, etc. Without income tax you wouldn't know who was getting rich doing what!

No, governments will never get rid of income tax, ever.

Paul E. Math said...

Pretty tough question.

No two ways about it, a flat sales tax is regressive in that poor people need to spend more of their money on consumption and therefore have a higher effective tax rate.

But Tom Tancredo made the most important point of the discussion, any tax is a way for the government to control your behaviour, the tax being an effective disincentive to engage in the taxed activity. Income tax discourages work and a sales tax discourages consumption - we don't want to discourage either of these.

I don't know, don't jump all over me guys but how about we just tax absolutely everything absolutely equally. So the incentive system would be the same as if there was no tax at all.

We tax income, we tax consumption, we tax savings/investment, we tax capital gains, everything, at a flat rate of, say, 11.5%.

Yes, it's double taxation because you're taxed on earning and on spending it but since the rate is half, the total amount would ultimately be the same as a 23% sales tax.

I realize it would kinda be like a triple tax if you're taxed on earning it, saving it and then on spending it. But, putting logistics and details aside, if you saved a dollar then the sales tax would not apply to the spending of that dollar. If you earned a dollar through capital gains then you would be taxed on the earning of that dollar and taxed again when you spend it.

So you would be taxed twice on every dollar and the incentive system would be exactly the same as if there was no tax at all.

Aside from logistical details which, hopefully, could be worked out through further discussion and perhaps some technological solution, isn't this what we want?

Government should absolutely be minimized but we need those bastards for certain things and, though it pains me, we have to pay for it somehow.

Anonymous said...

In response to Anon who said:

Taxing people's labor is just plain wrong. People are supposed to get paid for their work, not pay someone else (the gov.) for the priveledge of working.

August 11, 2007 7:37 AM


I would recommend that you re-read the U.S. constitution, which does contain a prohibition against peonage.

Peonage is the act of controlling a persons labor, or the proceeds thereof without thier consent. Did you know that?

Did you know that you volunteered to pay taxes on your labor?

It's so amazing to me all the people who 1st blindly sign legal documents they don't understand, have not researched; and then bitch when thier "labor" is taxed!

Wake up --- read that damn W4 form, read all the laws referenced in that document. Realize that its your act of signing that document that legally means that you volunteered to pay taxes on the proceeds of your labor. Get it now?

Wait a minute, you say that your employer refused to hire you, or keep you employeed if you refuse to sign that W4 form; you say that they told you that the goverment has a law that the have to ask you to sign. Your right the goverment passed a law that says that they have to "ASK" you to sign. No law exists that says that you HAVE to sign, in fact if you read the law there is a legal way to opt out. But here's the snag...

We live under forced socialism in this country and here is how it works. Colleges get big grants to teach in a way which promots the current system. This means that people who run businesses are only taught how to process W4 forms and do the payroll taxes that the government and colleges (who benefit from grants) want. These stupit lemings are not taught to think or god forbid read the law and figure anything out for themselves. Therefore the system is setup so that they will only hire people who voluntarly sign that W4.

This is forced economic socialism for most people. You have a right not to sign, but then they have a right not to hire you.

The system is now so set in stone that even if 10% of the dolts woke up, they could not change a thing. Big business and Gov't ain't breakin any laws, so the sheeple are screwed!!!

Good luck

Anonymous said...

i am anonymous said...

"selfish libertarians"?
++++++++++++++

To a socialist, anybody who doesn't hand over his wealth to the state is "selfish."

Wake up, people: The US is going socialist. Get out now, or live in poverty and stress for the rest of your life.

Bitter Renter said...

If it weren't for socialism-minded liberals like me who fought to redistribute wealth, 99% of you people would still be shitting outdoors and paying your feudal Lord a fee to do so.

We tried that every-man-for-himself pardigm for centures which led some of us to progress to a more humane form of society. Though we had to kill lots of your ideological ancestors in the process.

Anonymous said...

Consumption Tax. Period. No other taxes needed.

No IRS needed, no government tracking of individuals needed, just buy your shoes and pay the tax.

12% tax, state gets 9 or 10%, Feds get 2-3%.

abb said...

It's not about keeping tabs on you. It's about slavery.

Regardless the type of tax, we spend 1/3 to 1/2 of our working days making money to pay government and banks. The percentage today is higher than it ever was under feudalism. We are serfs.

Governments like the income tax most of all because it provides so many ways to engineer society. Unlimited riches come with all those points of leverage.

westwest888 said...

realgirl said...

I'm all about the fair tax. Do you think rich people pay taxes now? They hire a fancy CPA to hide their assets & income. They pay basically nothing. Right now, it's middle America that pays. A fair tax ensures that EVERYONE (rich, poor, middle class, even criminals on the street) pays a share. Just my two cents.


You have no clue sweetheart. Let's do some simple math. Someone who earns $125,000 a year and lives in a city on the east coast pays about 33% in state and federal taxes, or $40,000. Someone in "middle america" (whatever that means) earns $37,000 a year, has a mortgage and three kids. That person ends up paying about $2000 in income tax, after all deductions. Does the person on the east coast get 20x more in government services? Hardly. Get your head on straight.

Stop obsessing over these fictional cases where someone who made $1,000,000 last year only paid 18% in income tax. Guess what? That's still $180,000. That's more than entire neighborhoods in "middle america" might pay.

What if it were the other way around? What if each taxpayer had to pay their share absolutely? Take the federal budget, divide it by the number of people paying in, and hold each person to that number. That's the fairest tax of all. But that's no good for the members of congress, because they can't spend as much. So they launch campaigns to convince people like 'realgirl' that making "rich people" pay more somehow benefits them. It's not like they're going to let you pay less!

Let's reset the whole thing to $5000 a taxpayer. That's all you owe, if you're Bill Gates or a bus boy. Waaaah - that means congress could only spend $750B a year (plus corporate income tax receipts) when they're used to spending $2.9T.

ron paul revolution

Love-that-Bush said...

I have never heard of a tax that "went away". You guys who think a consumption tax will replace the income tax are just blowing smoke up your ass.

Kenduffelsniffenspotzen said...

Anonymous said...
Bitter renter- just how much do you buy in a year that you'd be done in by a sales tax?
It is disenguous to think that the poor would be hurt more by a consumption tax than all the other taxes they currently pay combined.

Poor people do not consume nearly as much as the rich.
August 11, 2007 7:43 AM

I read some where (daily reckoning?) that the top 1 percent do 70% of the consuming.

auntiegrav said...

Whenever you mention the FairTax, you should make sure to mention the PREBATE, so that people realize that the poor would not be paying tax on necessities.

The current system is so bad, that the IRS tells companies how to cheat the system. That's when you know it's time to send it away.

auntiegrav said...

It's obvious after reading the comments that most people don't understand or even bother to read the FairTax proposal.
EVERYONE GETS A PREBATE to cover the cost of food and necessities!!! It is only regressive in the sense that it slows down the consumption of unnecessary goods. WE live on a diminishing planet, people!!

Enough yelling. Sorry about that.
Last point: Anonymity. You only have to file something if you want to get the prebate. If you are happy to give that up, then you don't have to tell anyone who you are or what you do or how much money you make. EVER. Think about it.
Think about the effect of having a company run by someone other than the bean counters who get promoted because they know the loopholes in the tax system. Think about working someplace and getting paid in cash, and getting evaluated by someone who knows what your job really does.
Think about how much influence the tax loophole system has on decision making at your company.

Minimum Wage said...

Sorry, but the FairTax is NOT a true consumption tax! Proof: a homeowner can consume MORE than a renter and pay LESS tax. In fact, many homeowners will get FREE money from the government while the renter next door consumes less and pays taxes.

ALL of a renter's housing consumption is taxed, but only SOME of a homeowner's housing consumption is taxed.

I want to avoid this tax on my housing consumption and also avoid the increased regulation of rental properties. So I want to buy a tiny piece of land and build a tiny house on it and thereby enjoy the tax preference homeowners get. Unfortunately my government won't let me do that.

Yes, because states compete for people and business, they have an incentive to screw the working poor. Why would I want a system which encourages my government to screw me?

Minimum Wage said...

Bubbleyum -

The FairTax treats rental properties oddly. Normally, purchase of a "used" or "existing" item is correctly NOT taxed, because the sales tax was previously paid and goods are taxed only ONCE.

Goods which are used as business inputs to a taxable output are correctly NOT taxed. In this case, the purchase of a rental property (used or new) is NOT taxed because it is used to produce a taxable output (rent).

So I had expected that if you rent an existing home (on which the sales tax has already been paid), the rent should be exempt from tax.

WRONG! The property owner is given a rebate of the amount of FairTax that would apply to a rental property purchase if it were taxable...and then ALL the future rents become taxable! This is because rent is considered a service and services are taxable under the FairTax.

PURCHASE of an existing home is NOT taxed. Specifically, the principal is not taxed, and part but not all of the interest is taxed. Interest up to (I think) the federal funds rate is exempt, and interest above that figure is taxed. Inputs added by a homeowner (repairs, capital improvements, etc) are taxed. Property taxes paid by a homeowner (I think) are not taxed, but property taxes embedded in rent are taxed.

Because rents typically increase over time while a homeowner's mortgage interest declines over time, a renter's taxable housing consumption will soar over time while a homeowner's taxable housing consumption will more likely decline.

Didn't mean to make this so long but it's complicated and I haven't found any easy sound bites to explain it.

moehong said...

Regressive taxes are stupid. Just more ways for the rich to pay a much smaller portion relative to the amount of resources they use than the poor.

People need to take responsibility for what they use, or they'll never be able to adjust to using less.

And for the hateful right-wingers cussing out everyone else here and accusing "welfare moms" of being tax leeches: you do realize that's an incredibly tiny portion of your tax dollar, right? Take a look at the actual spending on "welfare moms" and tell me what makes you angrier, the cost of 3 joint strike fighters or healthcare, housing and job training for 35,000 people.

Anonymous said...

Ron Paul is a crazy antisemitic nutjob.

Bitter Renter said...

Moehong:

You don't understand the mind of the selfish libertarian/conservative. They resent the 3% of the budget that goes to feeding and housing poor women and children in their OWN country but are more than willing to spend billions to build an Iraqi Utopia. To be fair, the libertarians are against spending on the war too, they're just against being part of civilized society.

I'm not sure there has ever been a group like the libertarians. Even in primitive times people didn't resent so strongly helping their fellow man or contributing to the greater good. Libertarians are a sick and twisted side effect of our spoiled, affluent, degenerate culture.

Anonymous said...

If you eliminate taxes, who will pay the benefits of all the useless government employees or all the retired 50 year old teachers?

I am busting my choo choos to pay some retired politicial and bureaucrat to sit his fat ass on a beach and some rich farmer to not grow some crops. Then I have to pay for a bridge to nowhere in Alaska that some corrupt hack snuck into a midnight bill.