Is it time for revolution?

[therealUT]

United States Consumer Spending | 1950-2015 | Data | Chart | Calendar

Consumer spending average around 11100 billion in 2014, 15% would be roughly 1.6 trillion

That cannot be your low assumption. Your low assumption has to factor in that individuals will be less inclined to purchase, especially large purchases, when facing a 15% tax on top. Individuals will hold on to cars, computers, televisions, boats, etc. for longer.

I have you my low-ball. Your low-ball cannot be this.

 

[OrangeWayOfLife]

Despite the spirited debate, I will say it's an interesting proposal. I personally feel the income tax is the most burdensome tax for the general population, so it's nice to see alternatives.

I think it would need tweaking to encompass additional asset classes though. Otherwise, the wealthy would just change their investment strategy and dump land.

And one of my arguments is, nobody can skip the sales tax. Not the rich, not the illegals

 

[OrangeWayOfLife]

That cannot be your low assumption. Your low assumption has to factor in that individuals will be less inclined to purchase, especially large purchases, when facing a 15% tax on top. Individuals will hold on to cars, computers, televisions, boats, etc. for longer.

I have you my low-ball. Your low-ball cannot be this.

People of lower income will need to live more within their means but middle class citizens at the end of the year, will bring home more money at their current rate of pay under my system compared to current income taxes, which in turn would drive up spendable income for the middle class.

So it's possible we could see a increase in that consumer expense number, at the very least stay the same. And plus you have the incentive to save more income when what you save is essentially tax free

 

[therealUT]

People of lower income will need to live more within their means but middle class citizens at the end of the year, will bring home more money at their current rate of pay under my system compared to current income taxes, which in turn would drive up spendable income for the middle class.

So it's possible we could see a increase in that consumer expense number, at the very least stay the same. And plus you have the incentive to save more income when what you save is essentially tax free

Sure it's possible, but that doesn't mean I grant you this low-ball figure.

 

[OrangeWayOfLife]

Sure it's possible, but that doesn't mean I grant you this low-ball figure.

Tax reform is just one step to the revolution. Reviving our manufacturing industry would bolster the middle class and push these numbers way towards the positive.

 

[Danl]

Tax reform is just one step to the revolution. Reviving our manufacturing industry would bolster the middle class and push these numbers way towards the positive.

Fed sales tax wouldn't work for me or about a brazillian other retired folks as I have a sizable portion of my nest egg in post tax dollars. To now ask me to be taxed on that money again when I spend it won't work.

 

[OrangeWayOfLife]

Fed sales tax wouldn't work for me or about a brazillian other retired folks as I have a sizable portion of my nest egg in post tax dollars. To now ask me to be taxed on that money again when I spend it won't work.

The FairTax continues to fund Social Security.
Social Security taxation is eliminated.
Gift taxes and estate taxes are also eliminated.
There are no capital gains taxes should you sell your home or your investments.
Seniors are no longer required to file taxes or keep records of any kind.

 

[therealUT]

The FairTax continues to fund Social Security.
Social Security taxation is eliminated.
Gift taxes and estate taxes are also eliminated.
There are no capital gains taxes should you sell your home or your investments.
Seniors are no longer required to file taxes or keep records of any kind.

The FairTax, as the FairTax, also doesn't tax secondhand goods. This encourages buying used which encourages industry. One response by FT advocates for this is that a consumption tax that taxed secondhand goods would just encourage a large black-market. How would your approach address this problem (another reason I won't grant your number as a low-ball)?

 

[therealUT]

Tax reform is just one step to the revolution. Reviving our manufacturing industry would bolster the middle class and push these numbers way towards the positive.

I have no problem with the desire for systematic changes. However, you have consistently objected to my idea along the lines of how it wouldn't work with the current status quo. Now, you want me to grant you your non-status quo angle? You're stacking the deck.

 

[Rasputin_Vol]

The same. Currently, roughly 1,125 million acres of land are privately owned in the US. If the government taxed $1,000 an acre/year, the government would pull in over a trillion dollars in tax revenue.

I admit that $10,000 on 10 acres is oppressive. Let's imagine that if such a property tax scheme were implemented, private ownership would rise to 1,500. Further, let's assume government requires half a trillion a year to operate (these assumptions are less than I would expect in the first case and way more than what I see as necessary expenses in the second). Now, let's cut the tax to $335/acre. Over half a trillion in revenue.

For a farmer who farms 10 acres: $3,350 in total federal taxes. Again, what's the problem?

A thousand million is only a billion. You're off by a factor of a thousand on the math.

 

[Danl]

The FairTax continues to fund Social Security.
Social Security taxation is eliminated.
Gift taxes and estate taxes are also eliminated.
There are no capital gains taxes should you sell your home or your investments.
Seniors are no longer required to file taxes or keep records of any kind.

None of that helps me under the Fair Tax. I'm in my 50s. Any post tax funds that I would spend (and that is a large percentage) would be taxed again.

And I believe that THE Fair Tax is estimated to be 30%, not 15%.

 

[therealUT]

A thousand million is only a billion. You're off by a factor of a thousand on the math.

1,125 and 1,500 million are 1.125 and 1.5 billion, respectively. Where is the math error?

 

[OrangeWayOfLife]

The FairTax, as the FairTax, also doesn't tax secondhand goods. This encourages buying used which encourages industry. One response by FT advocates for this is that a consumption tax that taxed secondhand goods would just encourage a large black-market. How would your approach address this problem (another reason I won't grant your number as a low-ball)?

How much second hand selling would really be going on? 15% isnt going to drive the price of buying new completely through the roof. What would be examples of second hand selling that would cripple the economy?

 

[OrangeWayOfLife]

None of that helps me under the Fair Tax. I'm in my 50s. Any post tax funds that I would spend (and that is a large percentage) would be taxed again.

And I believe that THE Fair Tax is estimated to be 30%, not 15%.

It was actually 23% but I'm advocating it could be sustainable at 15%. Every bodies savings would essiantly be "retaxed" when spent. I'm going to admit I'm not well versed on taxes for retirees. So as you currently stand, do you not pay any federal taxes?

Edit: I have also stated several times I'm not using the FairTax verbatim, I'm advocating a much more simple 15% firm national sales tax.

 

[Danl]

It was actually 23% but I'm advocating it could be sustainable at 15%.


The 23% is a scam way of stating it. The scam goes like this: Of every 1.00 spent, .23 will be sales tax. Well, that's really .23 tax on a sale of .77. In the real world that's a 30% sales tax.


Every bodies savings would essiantly be "retaxed" when spent.

So you want 30% of my post tax dollar nest egg.

I'm going to admit I'm not well versed on taxes for retirees. So as you currently stand, do you not pay any federal taxes?

Most years, no, I don't.

EDIT: Having already paid federal and state income taxes on my funds as I earned them, I obviously don't pay those taxes again as I spend those funds.

 

[OrangeWayOfLife]

Most years, no, I don't.

EDIT: Having already paid federal and state income taxes on my funds as I earned them, I obviously don't pay those taxes again as I spend those funds.

I'm sure there's a way we could figure out to "grandfather" cases such as yourself. A tax exempt card possibly, you show at the register and only pay retail. The 15% I'm suggesting is on top of retail prices. I'm not advocating the fair tax act so please get off of that

Edit: any body currently retired gets a tax exempt card that you show at the cash register and taxes are excluded, everybody who retires for 5 years from date of implentation gets this benefit.

 

[Danl]

I'm sure there's a way we could figure out to "grandfather" cases such as yourself. A tax exempt card possibly, you show at the register and only pay retail. The 15% I'm suggesting is on top of retail prices. I'm not advocating the fair tax act so please get off of that

I'm only talking about The FairTax in response to your post about all the good things it would do for senior citizens.

How about this. Why don't we just spend 5% less across the board, as a gov, this year. And 5% less next year. And 5% less the following year and so on until we are running a surplus. Then cut continue to cut spending by an additional 5% for 2 more years. Hold it there till we pay off our national debt. Then reduce income taxes across the board to match that budget.

We have a spending problem, first, and a taxing problem, second. If you're in debt, you don't seek to cut your income. You seek to cut your spending!

 

[therealUT]

How much second hand selling would really be going on? 15% isnt going to drive the price of buying new completely through the roof. What would be examples of second hand selling that would cripple the economy?

15% added to anything $100 or more is going to drive me to Craigslist both for buying and, knowing that others will check secondhand non-regulated exchanges more, selling.

Secondhand non-regulated exchanges are already players that retailers now must compete with, since such exchanges, thanks to the Internet, are ubiquitous. Add a large sales tax, and they become even larger. This was a problem the FT took seriously a decade ago, and such exchanges have only grown since then.

Further, imagine I wanted to move across town. Say I want to move from a relatively cheap house of a certain size to a nicer house of the same size. This is something persons do. So, I decide to move out of my $200,000 house for a $250,000 house. Except now I have to pay $45,000 extra? Why would anyone in their right mind make that move, when for $95,000 they could turn their current house into something better than the $250,000 house? Are you now going to tax services as well (something not done by the FT)? And, why wouldn't I then just offer subcontractors money under the table to do the work for less than I would pay in taxes, afterall, the is no IRS and no reportable income, right?

Same with a car. Say I want a nicer car, but now buying a new $40,000 car will cost an extra $6,000. Why not just spend money at a shop, money that mostly goes toward labor, and, again, pay under the table?

Sure, some might irrationally just want to pay exorbitantly higher prices just for something new, but why would I grant that as the norm and give you that as a low-ball figure?

 

[Rasputin_Vol]

1,125 and 1,500 million are 1.125 and 1.5 billion, respectively. Where is the math error?

The same. Currently, roughly 1,125 million acres of land are privately owned in the US. If the government taxed $1,000 an acre/year, the government would pull in over a trillion dollars in tax revenue.

1.125 million time $1000 is $1.125 billion, not trillion.

 

[therealUT]

1.125 million time $1000 is $1.125 billion, not trillion.

1,125 million is 1.125 billion. That times 1,000 is a trillion.

 

[OrangeWayOfLife]

15% added to anything $100 or more is going to drive me to Craigslist both for buying and, knowing that others will check secondhand non-regulated exchanges more, selling.

Secondhand non-regulated exchanges are already players that retailers now must compete with, since such exchanges, thanks to the Internet, are ubiquitous. Add a large sales tax, and they become even larger. This was a problem the FT took seriously a decade ago, and such exchanges have only grown since then.

Further, imagine I wanted to move across town. Say I want to move from a relatively cheap house of a certain size to a nicer house of the same size. This is something persons do. So, I decide to move out of my $200,000 house for a $250,000 house. Except now I have to pay $45,000 extra? Why would anyone in their right mind make that move, when for $95,000 they could turn their current house into something better than the $250,000 house? Are you now going to tax services as well (something not done by the FT)? And, why wouldn't I then just offer subcontractors money under the table to do the work for less than I would pay in taxes, afterall, the is no IRS and no reportable income, right?

Same with a car. Say I want a nicer car, but now buying a new $40,000 car will cost an extra $6,000. Why not just spend money at a shop, money that mostly goes toward labor, and, again, pay under the table?

Sure, some might irrationally just want to pay exorbitantly higher prices just for something new, but why would I grant that as the norm and give you that as a low-ball figure?

How many things do you buy in a year that you would be willing to buy 2nd hand? It might increase second hand sales a little but not enough for measurable difference. We currently pay state sales taxes on services, how many under the table transactions are going on with state sales tax?

 

[OrangeWayOfLife]

I'm only talking about The FairTax in response to your post about all the good things it would do for senior citizens.

How about this. Why don't we just spend 5% less across the board, as a gov, this year. And 5% less next year. And 5% less the following year and so on until we are running a surplus. Then cut continue to cut spending by an additional 5% for 2 more years. Hold it there till we pay off our national debt. Then reduce income taxes across the board to match that budget.

We have a spending problem, first, and a taxing problem, second. If you're in debt, you don't seek to cut your income. You seek to cut your spending!

100% agree but would like to see both implemented. And the only way were going to get the government to cut spending is revolution. They have grown too big for us to control.

 

[Rasputin_Vol]

1,125 million is 1.125 billion. That times 1,000 is a trillion.

Why did you multiply it by 1000 again???

Your original claim was:

1.125 million acres times $1000/acre = over a trillion dollars, which is not correct. It only comes to $1.125 billion of revenue.

Why would you multiply $1.125 billion by 1000 again???

 

[therealUT]

Why did you multiply it by 1000 again???

Your original claim was:

1.125 million acres times $1000/acre = over a trillion dollars, which is not correct. It only comes to $1.125 billion of revenue.

Why would you multiply $1.125 billion by 1000 again???

Original claim involved a comma not a period.

 

[OrangeWayOfLife]

Why did you multiply it by 1000 again???

Your original claim was:

1.125 million acres times $1000/acre = over a trillion dollars, which is not correct. It only comes to $1.125 billion of revenue.

Why would you multiply $1.125 billion by 1000 again???

So 10,000/acre to equal 1.125 trillion? Which is a third of what income tax brought in this year.