Comments on: FairTax?

By: dad29

dad29 — Sat, 12 Apr 2008 01:44:39 +0000

You could be mistaken for Steve Forbes if it were really a dark night, you were 500 yards distant, and your driver was nicely turned out.

Trust me, a 23% hit on a typical weekly grocery bill IS noticeable–same as a 23% hit on (now) $100/week for gasoline.

I understand your concern that pay-go taxation is easier to absorb than WHAMMO taxation. And the purpose of reducing consumption is to increase savings, of course–which may just possibly make retirement a bit easier (not to mention put Red China back in its place.)

But you are correct when you doubt that the Feds will ever stop spending at a sickening pace.

By: steveegg

steveegg — Fri, 11 Apr 2008 23:55:08 +0000

Do I look like Steve Forbes? I do believe I said that everybody that works would pay the same amount, not the same percentage. Yes, that includes Bill Gates paying the same amount as me, even though I neither make nearly as much as he does nor “consume” the same dollar amount of government services. As for the FAA, I tend to defer to Asian Badger on that, since he deals with them on a regular basis, but it would seem that honestly should be covered on a fee basis by those that actually use it.

As for the spending that a sales tax would discourage, all it would do is discourage consumer spending. I don’t eat out nearly as much as I did 15 years ago, before either the stadium or convention center tax. The only thing that discourages government spending is a massive reduction of government revenues, and I don’t know if even that would work on the federal level.

The only way to accomplish that massive reduction is to make the tax bite as visible (and painful) as possible. FDR did us a great disservice by introducing withholding from the paycheck, which makes the tax bite nearly invisible. The same principle that FDR introduced applies to a sales tax. Even though it’s on the receipt, the amount is, in most cases, so miniscule that most times nobody thinks about it.

On the flip side are property taxes, specifically school property taxes. Even though school districts have from time to time conned the populace into accepting a larger-than-inflation increase in taxes, the twin facts of having them very visible and painful (at least for property owners) and requiring the districts to go before the public for said extravagant increases has had some impact on school spending.

By: dad29

dad29 — Fri, 11 Apr 2008 15:01:29 +0000

My ideal tax code would be an absolute-flat tax where everybody that works pays the exact same amount.

And:

my first objection to the FairTax; it does not do anything to begin the process of actually reducing the amount of money going to government. Indeed, at 23% of the gross sales, or if you prefer to use the traditional sales-tax percentage, 30%, it is expressly designed to not reduce the amount of money going to government

Are we to believe that a Flat tax WILL ‘reduce the amount of money going to Gummint’???

Unless you propose to reduce taxation, advocating “equal-dollar” taxation might mean that every single worker must pay (e.g.) $7,000./year in taxes.

Your position assumes that the overall mechanisms at work in the USA benefit all people equally. That will be difficult to defend, unless you wish to impose limits on such mechanisms (e.g., drop FAA services for Bill Gates’ private jet) to “equalize” the results of Gummint spending.

Yes, the “prebate” will require monitoring. But to imagine that the IRS will disappear under FlatTax is preposterous. Among other things, SOMEONE has to file the damn forms…

The philosophy behind Fair Tax is simple: it discourages spending.

And until Gummint learns not to spend, it makes almost no difference which system is used.