the fraud in the white house was not elected president..he was appointed...and aftr 9/11 i don't think it mattered who was in the white house people were not going to change presidents because of the fear factor amongst women and republicans...much like their leader they were cowards not willing to look past the fog of the world trade center tragedy ..and this administration played them like a fiddle..i have ask myself many times what kind of a person would respect and admire the likes of the fraud in the white house..i myself do not know of a single trait or accomplishment that i respect in him...i know a lot of people and i say this in all honesty ...i do not know of a single person that i truly respect that thinks he is a man of integrity..not one...i know people who believe in him..but no one i personally respect....so who are his followers and what do they believe in??..i can only guess that they are people much like him...empty and devoid of empathy...
Posted by dennis at August 3, 2005 02:55 AMDennis, you would be very surprised who the people are that support and admire Bush, I was. Although I will never understand them, I have five friends who are Bush supporters. All five are rich, middle aged, educated, intelligent, and hate liberals. The only way I can maintain a relationship with them after all these years is to NEVER discuss politics. These are lovely people whom I have a great amount of respect for, except in the area of their politics. The one thing of importance they all have in common is the belief that liberals are the cause of many of our social ills. They hold fast to the concept of survival of the fitest, and firmly believe that if you are not rich it's your fault. I once told one of them that I was glad they had been so successful, because being the Democratic leech that I am, I could enjoy the fruits of their labor. They are all blinded by their allegance to the Republican Party. I love these people, but hate their politics.
Posted by Judith at August 3, 2005 04:05 AMThat's survival of the fittest and allegiance. God, I wish I had spell check.
One more thought, I suspect that their are Republicans out there who think Bush is an idiot, but would never admit it, at least not in public.
Posted by Judith at August 3, 2005 04:15 AMWell, actually I had two more thoughts. None of the five are religious. Two were born Catholic, but haven't seen the inside of a church since their marriage 35 years ago. All five are avid Fox believers.
Posted by Judith at August 3, 2005 04:19 AMjudith...wouldn't worry about spell check..happens all the time..to everybody
i too..know many wealthy republicans..and for the most part am cordial with them..tending to stay away from politics as discussion ..i have said many time that there are two kinds of republicans..stupid or selfish..or both..i am sure there are exceptions..but generally i believe that to be true...i cannot tolerate people who believe in fox news or rush limbaugh as most of them do...the fraud in the white house is an empty suit..all you have to do is objectively look at his life and accomplishments and make a judgment about him..if you conclude that he is a man of character and integrity..then there is something the matter with you...if you look at the facts around 9/11 and the iraq war ..and look at them pragmatically..i think you have to conclude that 9/11 could have been avoided and the iraq war didn't have to be...if you don't come to those conclusions..there is something the matter with you....so...i can't repect anyone believes in the fraud..because that makes they themselves frauds....either stupid of selfish ones..
Dennis, perhaps you are right and these people are the exceptions, because they are not stupid or selfish, well, one is selfish. Actually, come to think of it, I don't have a whole lot of respect for the selfish one, but not because of his politics, but because he is a selfish.
Posted by Judith at August 3, 2005 05:12 AM(8/3/05)Toon of the Day:Educating Diversely
Posted by jjoats at August 3, 2005 05:23 AMvltn s nt vn thry. t's l, whch s why lbrls dfnd ts mpstn s vgrsly. Smply cn't lt th kdds lrn th trth n th clssrm lst thy dvlp dvtn t thr Crtr.
[Editor: ignore=off]bendito..did karl rove lie?
evolution..you're living proof
who is the creator?..is there only one? or are most of the planets inhabitants all wrong?.or is it just you guys who are right?
Posted by dennis at August 3, 2005 05:47 AMIf someone wants to teach intelligent design, let them: in Sunday School. Creationism does not belong in science class.
From the NYTimes today:
Mr. Bush can find a lively clash of ideas already under way about that Bible course. A biblical studies professor at Southern Methodist University has found it riddled with such outlandish notions as a claim that NASA scientists have accumulated evidence of two days missing in time, thereby confirming biblical text about the sun standing still.
Posted by ann at August 3, 2005 05:54 AMNatural selection should take care of bengay in due course. Useless mutations tend to die off fast, thank Darwin.
Posted by iamcoyote at August 3, 2005 06:06 AMAdd 14 more marines killed this morning, Wed.
Posted by Judith at August 3, 2005 06:12 AMUgggh, Maybe this is one of the explanations for it. More powerful roadside bombs....damn.
Posted by at August 3, 2005 06:18 AMthe fraud leaves for a 35 day vacation at the cowboy ranch..yahoo..hope he reads the daily griefings this time....what a piece of shit he is
Posted by dennis at August 3, 2005 06:24 AMMy thought in the shower this morning:
It's no wonder half the country can't get frickin' along with the other half of the country. Nobody in the executive has been elected in the last 12 years without some sort of fraud, indecision, 3rd party candidate, or other crap happening.
It's not a brilliant thought, but just seemed relavent while trying to scrub my hair.
Posted by idiosynchronic at August 3, 2005 06:40 AMi have said many time that there are two kinds of republicans..stupid or selfish..or both..i am sure there are exceptions...
Try being married to one. My husband is far from stupid and far from selfish, but he voted for Bush because he thought Kerry was an idiot and dangerous for our national security. I kept telling him that a real republican wouldn't vote for Bush. Aren't republicans supposed to be for fiscal responsibility (haven't seen that anywhere in the Bush admin) and small gov't (NCLB is a huge intrusion of fed gov't into state matters) and I thought the small gov't thing was about privacy too (though maybe I'm wrong on that) and all you need to do is look at the Patriot Act to know they're not for privacy (not to mention them being against abortion-rights, another privacy issue.) My husband was vehemently against the Patriot Act and went so far as to say he'd vote for Kerry if Kerry would overturn it. Anyway, I guess my point is, that at time, I can almost lean right on some issues, but this admin doesn't look truly republican to me at all.
Posted by CG at August 3, 2005 06:48 AMCG
don't mean to offend you but your husband sounds pretty stupid to me....anyone who thinks a coward and shirker of his duty during a time of war..is better for our national security ..then someone who served his country with valor and distinction...is stupid
Posted by dennis at August 3, 2005 07:17 AM"but this admin doesn't look truly republican to me at all."
Well, my opinion is that it is not truly a Republican Party today as we have known it. It has been hijacked by the far-right religious zealots, the power, greed and control freaks, and the criminal element.
What a great idea! Not to mention about damn time.
With the poor spending all of their income on goods and services, this is another way to tax the fuck out people with very litte so that those with excess cash pay nothing. Enjoy! People like you are flushing America.
Simply can't let the kiddies learn the truth in the classroom lest they develop a devotion to their Creator.
What the fuck do you talk to your kids about at home? You ever take them to church? Why must you jackoffs attempt to abdicate the entire parental responsibility to others? I care that your children are healthy, educated and well-fed. Beyond that it's your responsibility. You want them indoctrinated, do it at home.
Now, as far as teaching creation myths, I'm all for it. Kids should know how all the various religions view creation. Hindu, Islam, Judeo-Christian, etc. Philosophy classes are a good thing.
With the poor spending all of their income on goods and services, this is another way to tax the fuck out people with very litte so that those with excess cash pay nothing.
Everyone pays their fair share of taxes, and with the FairTax rebate, spending up to the poverty level is tax free.
Who's wrong here?
Everyone pays their fair share of taxes, and with the FairTax rebate, spending up to the poverty level is tax free.
OK, everybody: what would constitute spending "up to the poverty level"? Just think about that for a moment.
Posted by dj moonbat at August 3, 2005 08:54 AMIn this great fucking country of ours, why is it alright that a fulltime worker needs tax breaks because he's in poverty? Living wage, dammit!
Posted by Sharon at August 3, 2005 08:55 AMMy thought is "spending up to the poverty level" is, or should be, when all your income goes to food, clothing, shelter, etc.(the essentials of life) and you have no discretionary income. Wasn't that the promise of the income tax in the first place; that only those with excess cash would pay income taxes?
Posted by Cosrai at August 3, 2005 09:10 AMJudith raises an interesting point about her Republican friends not being church goers. I think the Republican party is often mischaracterized as a Fundamentalist party, and it is far from it. There are Fundamentalists within the Republican party, but the majority are fiscal conservatives not social conservatives.
Yes, it is your fault if you're not rich. Not that many people are rich. It takes drive, determination, and risk taking. Most of us aren't like that. Most of the rich folks I know went to college, worked 2-3 jobs at a time, and work 60-80 hours a week. They don't take many vacations. They love to work. They are self-employed or have small businesses. They're smart at investing in stocks, bonds and real estate, which comes with self educating.
Most folks choose safety over risk taking. Being safe won't pay many financial rewards.
The easiest way for folks to become rich is by investing over the long term. That doesn't require the drive to work 60-80 hours a week. And self-educating is easy on that one. It just takes patience and dilligence.
Most of these folks aren't selfish. In fact, many of them are great philanthropists. They give money to colleges, start scholarships, donate to food banks, etc.
Regarding the tax code, I think a consumption tax is better than an income tax. But I'm afraid we'd just get some combination of taxes and it'd get really complicated for taxpayers, and really easy for politicians to increase taxes for this special cause or that special cause. Like they do with state sales taxes. .25 cents for this or that. Etc.
Posted by muckdog at August 3, 2005 09:15 AMMy thought is "spending up to the poverty level" is, or should be, when all your income goes to food, clothing, shelter, etc.(the essentials of life) and you have no discretionary income.
You're still not getting it: The "fair tax" is a cash on outgoing funds. How can you tell when a person's spending has gone up to a level above poverty?
Let's say a person who lives in a fancy house, and has all their luxury items they want, spends $20K in a given year. How much of that spending was below the poverty level, and how much was below? Similarly, a person living in Section 8 housing with four kids, spending only on necessities, spends $18K. How much of that spending was above the poverty line?
This tax is a shell game.
Posted by dj moonbat at August 3, 2005 09:16 AMDennis,
Well, he's not stupid, but let's just say that we don't discuss politics too much in our house. It stuns me that this person I love, who is very intelligent, can be so unthinking sometimes. To be honest, I didn't think that highly of Kerry either, and only voted for him as "not Bush." We need someone better than that. When we watched the Democratic Convention, my husband was very impressed with Barak Obama. He's not a staunch republican or anything, but he grew up in a military family. Gawd, you should see some of the emails his dad sends me (pro-Bush crap that circulates on the internet.) I don't even read them anymore. His mom is a democrat though. Anyway, my husband is a fiscal conservative, worries about national security (since we don't talk about this stuff, I don't know what he thinks now) but is liberal on social issues and very generous when it comes to charity. He's not religious at all, and is perfectly willing to make fun of Bush. Just giving you a different look at a republican. My very liberal friend also has a republican husband, so we commiserate a lot. If we get a decent democratic candidat for prez in 2008 and the republicans choose another right-wing whacko, I hope my husband will vote dem. However, while he's not religious, he doesn't seem to worry about the religious right like I do.
Posted by CG at August 3, 2005 09:19 AMSharon is right. A 40 hour week at $5.25 an hour equals $210.00 before taxes. Try living on that amount and pay all your expenses and support a family. Minimum wage needs to be raise and substantially, not .25 cents or .50 cents.
Posted by Judith at August 3, 2005 09:20 AMschmidt 52% hacket 48% + iraq lies = impeachment
Posted by dennis at August 3, 2005 09:34 AMIronic as it might be, the Fair Tax appears to determine poverty level based on annual income. Through this the outgo by the poor for essentials is assumed to be protected by taxation by the monthly rebate.
Any consumption tax scheme is based on the idea of voluntary taxation. You don't spend money, you don't pay taxes. However, with the rebate on poverty-level income only, it would appear those making more than that would pay tax on all their outgo, including that for essentials. In that sense, the Fair Tax is regressive.
Posted by Cosrai at August 3, 2005 09:38 AMLook, the chart that maps the rebates to the poverty level proves that the selling point about sparing poor people the need to worry about taxes is false. To determine poverty, we'd still need to track everybody's income, even though we wouldn't be taxing it anymore. It's just not a good plan.
Posted by dj moonbat at August 3, 2005 10:23 AMWha'daya gotta do? Save every ga' damn receipt ya get all year to get ya rebate?
Sounds like a pain in the ass.
Posted by Joe at August 3, 2005 10:40 AMAnyone find it interesting that the NRA is boycotting Philips Conoco because it supports the overturning of an Oklahoma law preventing companies from banning firearms from company parking lots but they are not boycotting Halliburton who has also filed papers with the court supporting the overturning of that same legislation?
Wonder why that is?
Posted by muckcat at August 3, 2005 10:44 AMSounds like a pain in the ass.
Getting reamed by the rich usually is.
Posted by dj moonbat at August 3, 2005 10:46 AMIt's just not a good plan.
status quo then huh? Everyone seems to be doing great with the system we have now!!
To determine poverty, we'd still need to track everybody's income
They do that now. At least for everyone that files. Look, the number is an average. How else do you do it? Knock on everyone's door. Hey how much did you make today? The chart proves that the system will tax less. You must like paying higher taxes or are you just opposed to change in general?
Posted by Centrist at August 3, 2005 10:47 AMAir America and the Race Hustlers. Interesting read for those of you following the Air America scandal.
Posted by muckdog at August 3, 2005 10:59 AMYou must like paying higher taxes or are you just opposed to change in general?
I like paying progressive taxes. This tax is regressive.
Posted by dj moonbat at August 3, 2005 11:01 AMBased solely on opinion, no facts.
It's not opinion at all--it's definitional. A tax that disproportionately impacts the low end of the scale is regressive. Consumption-targeted taxes always impact the poor more than the rich, because the poor have to spend all their money to live. The rebates may offset the regressivity inherent in a consumption tax, but they don't make it just go away; it's the nature of the beast.
If you're going to take a firm stand in favor of a regressive tax, that's fine. But at least admit that's what you're doing; emphasize the simplicity of the proposal (which it admittedly has going for it) instead. Otherwise, you just look like an idiot.
Posted by dj moonbat at August 3, 2005 12:13 PMBlack market anyone?
Posted by at August 3, 2005 12:25 PMBlack market anyone?
<snark>No way, man! Oh, sure, people nowadays get paid under the table, and we don't get the income tax on those transactions (just ask our tireless right-wing tax-reform advocates). But nobody would ever think to buy anything but labor in cash to avoid being taxed.</snark>
Posted by dj moonbat at August 3, 2005 12:28 PMThe rebates zero out the "regressiveness" of it. No downside.
And I'm the one who's just offering opinions? Puhleeze.
Posted by dj moonbat at August 3, 2005 01:22 PMAlso, you "Fair Tax" advocates may not realize that you've got a constitutional problem on your hands.
See, the federal income tax came into being because of a constitutional amendment to tax incomes, not to tax in any way they saw fit. They certainly do not have the power to tax consumption under the Sixteenth Amendment.
They might have the power under the Interstate Commerce Clause, but it's not clear how purely intrastate commerce, like me buying nails at the hardware store, implicates interstate trade--especially after Lopez and Morrison. (Though the recent Raich decision casts some doubt on that.) At any rate, Congress would have to show that the Fair Tax was an attempt to regulate interstate commerce, and that taxing intrastate commerce was required to effectuate the interstate regulations. Because clearly the goal of the Fair Tax is not to regulate commerce, but to replace the income tax, they would have their work cut out for them.
Posted by dj moonbat at August 3, 2005 01:47 PMI earlier said I believe the Fair Tax is regressive, but I was getting my regressive mixed-up with my progressive (get in a hurry, shit happens). I meant to say the Fair Tax is progressive. The rebate allows the poor to spend all of their assumed income tax free. Every penny of it. At the same time, those who make more income will in all probability spend more, paying taxes on the difference between their poverty level outgo and their actual outgo.
To answer a specific example given by dj moonbat:
Let's say a person who lives in a fancy house, and has all their luxury items they want, spends $20K in a given year. How much of that spending was below the poverty level, and how much was below? Similarly, a person living in Section 8 housing with four kids, spending only on necessities, spends $18K. How much of that spending was above the poverty line?
The Fair Tax allows for both scenarios because the rebate is based on poverty level, which accounts for the difference in the sizes of the two families. And you're correct, the person in the fancy house, with all their luxury needs met, may not pay any taxes for the year. But then again, neither will the family in Section 8. The difference is the luxury items in the fancy house will probably not last forever, and will need to be replaced. When they are, the fancy house resident will pay taxes, but the Section 8 family will still pay none (unless they move up in financial status and buy luxury items themselves).
But, that doesn't mean I'm endorsing the Fair Tax. I can just see it may have merit. Along with any other tax scheme that limits legislative abuse of power and shrinks the staffing of the IRS. But I really don't give it a chance in hell to ever be enacted. Republican or Democrat, to maintain power both sides need a tool to reward and to punish with. The income tax code is the best tool they've got. Social engineering at its worst.
Posted by Cosrai at August 3, 2005 02:52 PMpower to tax consumption under the Sixteenth Amendment.
H.R. 25 deals with this issue.
Posted by Centrist at August 3, 2005 03:13 PMH.R. 25 deals with this issue.
Oh, y'all aim to amend the Constitution to go to a consumption tax? I strongly encourage the GOP to go down that road.
Posted by dj moonbat at August 3, 2005 04:59 PMIncidentally, I just looked over www.fairtax.org's position on the whole constitutional amendment thing. They are completely wrong about the necessity of an amendment to repeal the Sixteenth. The Sixteenth merely gives Congress the power to enact income taxes; it doesn't insist that they do so.
All the people at fairtax.org have to do is convince Congress to pass legislation outlawing the income tax, and then get a 'Fair Tax' amendment, and convince Congress never to enact an income tax or repeal a Fair Tax ever again. Hell, the Fair Tax will always be universally popular, except with irrational America-hating leftists, so that shouldn't be a difficult sale at all.
Enjoy, guys.
Posted by dj moonbat at August 3, 2005 05:14 PMsveiki!
Posted by michilines at August 3, 2005 06:11 PMOn income vs. consumption tax:
I don't have the time/energy to exhaustively hit all the points, so I'll just attack a few:
1. A consumption tax is regressive. Even with a rebate for the poor, the middle class is still being taxed more heavily, percentage-wise, than the rich. Thus, the middle class is bearing the greatest burden for supporting the government, while having the least amount of influence over it (the rich buy candidates; politicians throw bones to the poor). And as the middle class reduces in size as a result of this, the percentage burden grows ever greater.
2. This will slam the brakes on any economic growth. Ok, small businesses don't have to pay their employees as much to account for income tax, but those same employees will have to pay more for all their goods and services. Since those purchases will now constitute the bulk of the tax support for the government, the result will be net-negative. The economy will grind to a halt.
3. This will likely spawn a major black-market economy. Self-explanatory.
4. This may be the most important of all: fairness is complex. And, conversely, simplicity is unfair.
I could go through a host of examples, from retail checkout lines, network routing protocols, to playground behaviors. But in taxes, what this ultimately means is that ANY system will become complex, even if it starts out simple. Take interest payment on home loans, for example. This money is deductable under the income tax, because it makes sense to encourage homeownership -- homeowners are tied to a community, are taking bigger risks to provide a better family environment, etc. etc. Under a consumption tax, a "rebate" for such expenses would inevitably be granted. Then you'd have rebates for farmers, and child-rearing costs, and on and on... just look to the current tax code for more examples. And you'd need to prove that you'd incurred these expenses, so there's a lot of paperwork. To help ensure the accuracy, companies taking mortgage payments, for example, would be required to report the interest collected (as they do now), etc. etc. And as any retailer will tell you, there can be an awful lot of work involved in accurately reporting sales tax collected.
Just look at the name of your consumption tax plan: "Fair tax". Why is it called "fair?" Because, with these rebate payments, the complexity has been increased in order to make it more fair!! More complexity will be sure to follow, to increase the fairness, and you'll end up with a "monstorously" complex tax system just as we have now. Only you'll have wrecked the economy and the society in the meantime (see points 1 thru 3).
DUMB FUCK
I meant to say the Fair Tax is progressive. The rebate allows the poor to spend all of their assumed income tax free. Every penny of it.
Income below a certain level is not taxed under the current system, either. I'd have to look up what the cutoff income is, but I do remember a statistic that says the majority of workers in this country are paying more in Social Security / Medicare witholdings than they are in income tax.
Those witholdings would not go away if you replace the income tax system, by the way. So your statement is false just based on that.
Posted by Doug at August 3, 2005 06:47 PMThe FairTax is a voluntary consumption tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.
This is a strange notion. By this logic, income tax is also voluntary: the more you earn, the more you pay in taxes, so you can just earn less and you'll automatically pay less taxes too.
Posted by Doug at August 3, 2005 07:14 PMIncome below a certain level is not taxed under the current system, either. I'd have to look up what the cutoff income is, but I do remember a statistic that says the majority of workers in this country are paying more in Social Security / Medicare witholdings than they are in income tax.
Those witholdings would not go away if you replace the income tax system, by the way. So your statement is false just based on that.
I don't know who the DUMB FUCK is here, Doug. The Fair Tax plan does away with withholdings, so you are the one completely wrong.
This is a strange notion. By this logic, income tax is also voluntary: the more you earn, the more you pay in taxes, so you can just earn less and you'll automatically pay less taxes too.
Give the boy a sucker! You just pointed out the major failing of any income tax scheme. It's counter productive because it rewards people for earning less, not for making more. And with a progressive tax, the benefits of climbing just slightly up the income ladder are even less desirable. Look at the number of people who earn raises each year only to find their net income lowered. Clilmb to an annual income of just over $100,000 a year and watch as all your deductions and credits get very quickly, and progressively, eaten away.
I'll also answer some of your other points from above.
1. A consumption tax is not regressive. It is progressive. Especially one which rebates a set amount to benefit the poor. Rich people tend to spend more (maybe not on a linear line to income, but still more) than the middle class, which spends more than the poor. And when you spend more, you pay more taxes under a consumption system; progressively more. And there is no facts I am aware of to support the premise a consumption tax would destroy the middle class any more than the current income tax. And anyway, we already have consumption taxes in this country, although most are collected at the local level in the form of sales taxes.
2. Where is your evidence (or explanation of how) a consumption tax would slam the brakes on economic growth? In what ways, lower wages?
3. A black market economy already exists for many products. Plus, we are already now a nation of liars every April 15th.
4. I will agree with you, fairness can be complex. It is also something that changes with the view of the beholder. You say a deduction for mortgage interest is good because it encourages home ownership, and go on to praise the value of homeowners in a community over that of renters. While I agree homeownership can make a good investment, and for many it's their only investment, I would point out the value of homeowners to the good of society over that of renters could be argued. And I'll also point out this is nothing more than social engineering through the income tax code to benefit certain groups of people, and to reward people to "fit in" to the expected norm by buying ever more expensive homes, on credit, to avoid taxation. And that in the current system the IRS can seize said home if you fail to pay income taxes; something that would most likely never happen in a consumption tax system. And lastly, as you so eloquently pointed out, the required paperwork burden is no greater than now.
A consumption tax will not surely spell economic ruin for the country, however it may certainly become very complex. But it does have the advantage over an income tax of being a voluntary tax and a tax scheme in which the government has less power, and influence, over our daily lives and personal property. Call me a DUMB FUCK if you like, but I don't see where that's a bad thing.
Posted by Cosrai at August 4, 2005 07:35 AM
Corsai -- first, thank you for the (mostly ;) )intelligent reply. And the, er... term of endearment I used was directed more at that "centrist" guy than you, as you showed evidence of critical thinking in your posts. I should have been more specific, so I apologize to you for that.
The Fair Tax plan does away with withholdings
I don't think it would affect Social Security and Medicare withholdings -- unless part of the "Fair Tax" plan is to do away with those programs. And as I said, IIRC those taxes are greater, dollar-wise, than income tax for a majority of wage earners.
You just pointed out the major failing of any income tax scheme. It's counter productive because it rewards people for earning less, not for making more.
I really think this sort of idea is a red herring. For example, as my income has risen through my career, I have never had any instance where my income was actually lowered due to a raise. Certainly, tax considerations have never interfered with my desire to earn more money!
Generally, deductions are phased out gradually with increasing income, in order to prevent just such occurences. Perhaps some of them are not set up quite right, so that would need to be fixed. But note that these are merely glitches in the system, not a reason to throw it away completely. And of course, the sooner the AMT is repealed or otherwise fixed, the better.
Also, I just want to be sure people reading this understand something: when your income rises into the next tax bracket, only the income above that level is taxed at the higher rate. All the income below that level is still taxed at the appropriate lower bracket. Thus, you can never have a net decrease in your income due to a raise, as a result of tax brackets.
A consumption tax is not regressive. It is progressive
Here your thinking is a bit muddled, I suspect.
Let's lay it out:
Linear taxation is one where the percentage is constant. e.g. you make $10, you pay $1; you make $100, you pay $10. etc.
Regressive taxation increases the percentage taken as income is lowered. e.g. you make $10, you pay $1.20; you make $100, you pay $8. Note that the dollar amount of the tax still goes up with income, even though it's regressive
Progressive taxation is where the percentage increases with income. e.g. you make $10, you pay $0.80; you make $100, you pay $12. Note that, even though the percentage is higher, there is still quite a bit more money left to the higher earner. e.g. you make $10, you have $9.20 left. You make $100, you have $88 left.
So your contention that because higher earners would spend more, it's progressive, is wrong. I mean, it could be correct if the numbers were right, but I believe the evidence is (and common sense dictates) that the higher earners spend less on goods and services as a percentage of their income than lower. Thus, with a constant consumption tax, they are paying less in taxes as a percentage of their income than those who earn less. So it works out to be a regressive tax system.
Where is your evidence (or explanation of how) a consumption tax would slam the brakes on economic growth?
It's just common sense.
That real-world fact comes in again: people with lower incomes spend a greater percentage of it on goods and services. As such, the bulk of our economy is based on the purchases of middle-class consumers. And if the tax burden on those consumers increases, as it would in a consumption-tax system (due to the real-world regressivity), their ability to make purchases decreases, and our economy takes a hit -- a big hit, I expect.
True, the rich folks would have more money available for investment in new companies -- but that will be useless if the investment market is already saturated. That's a limitation that a lot of Republicans refuse to acknowledge or recognise, judging by the fact that they're always saying we need to encourage more investment.
Think about it: what was the cause of the dot-com crash? At root, it was the fact that too many investment dollars were chasing too few good ideas -- hence the term "speculative bubble". And for the present day, think about this: why is the bond market still so high, even with high oil prices and all that? Why are long-term interest rates still at record lows (as a result of high bonds) despite the Fed increasing the short-term rates? The answer: there's too much unused capital sitting around. People aren't seeing enough good opportunities for investment, so they're leaving their funds in bonds. One statistic: silicon-valley venture capital firms alone are sitting on some $50 billion in uninvested capital. They're sending money like crazy to places like China, in search of opportunities.
More money in the hands of the rich will not offset the increased economic drag due to the increased taxation of the middle class.
A black market economy already exists for many products
Ok, a weak point on my part.
I would point out the value of homeowners to the good of society over that of renters could be argued ...
[such deductions are] nothing more than social engineering through the income tax code...
Ok, this point I cannot argue with. You can have your opinion on how valuable/hurtful/inappropriate such "social engineering" tactics are, and I can have mine -- this is an area with little data, and so it is very much subject to personal opinion.
But it has nothing to do with whether the taxation is based on income or on consuption.
As I outlined, these things can exist just as easily in a consuption tax code as they do now. There is nothing inherent to a consuption tax that would prevent or even supress it.
If you want to argue against the perceived social engineering, then do so. Don't hide it under the smokescreen of a consumption tax.
To sum up: the current tax code is certainly complex, in large part due to what I call fairness and you call social engineering, and there are bound to be glitches. A significant overhaul may even be in order. But changing to a consumption tax will not solve this, and will hurt the economy in the process.
Ok, I see this on the "Fair Tax" FAQ for Social Security:
How is the Social Security system affected? Like all federal spending programs, Social Security operates exactly as it does today, except that its funds come from a broad, progressive sales tax, rather than a narrow, regressive payroll tax. Employers will continue to report wages for each employee, though, to the Social Security Administration for the determination of benefits.
This will destroy Social Security. Not immediately, but it would undermine it and eventually spell its undoing.
Huh? Why?
Because the #1 reason that Social Security has survived, politically, for so long is that it is not charity. Beyond a small amount of progressivity in the payouts, there is really no grand redistribution of wealth from the rich to the poor here. Everyone gets out of S.S. an amount commensurate to what they put in. When you're retired and collecting your S.S. checks, you do so with the knowledge that you've earned it; you've worked towards it all your career, sacrificing earnings all the way. If your retired neigbor had put more into the S.S. system than you during his or her career, he will be receiving larger checks than you now.
So why would funding S.S. with this "Fair Tax" plan disrupt this?
Because benefits will still be paid out based on income, yet the poor will be getting a break on the payins. That means it will be a redistribution of wealth, from rich to poor. It will be charity. Social Security would be gone within a few decades.
Since this tax will hit the middle class most strongly, that means they're shouldering an unfairly large portion of the S.S. burden (along with everything else). The rich will potentially be paying into S.S. far more, in proportion, than they would be receiving in benefits, relative to the middle-class and poor. The upshot is a dramatically larger number of people with a personal incentive to see the program gone.
Posted by Doug at August 4, 2005 12:02 PMDoes the FairTax rate need to be much higher to be revenue neutral? The proper tax rate has been carefully worked out; 23 percent does the job...
Earlier in my career, when I was still single and had no house, and was making about $60,000/yr (this was around 1996), my real federal tax rate worked out to 21%.
My "tax bracket" was of course higher than that, but since most of my income still fell into lower brackets, the overall rate was as shown.
Just think about that. Think about how it works for people who are spending all their earnings. Ok, the rebate may help a bit, but it's probably more than offset by potential income-tax deductions for mortgage payments etc. Someone with such expenses in that income range or lower is likely to end up quite a bit worse off under this "Fair Tax" scheme than they are now.
Posted by Doug at August 4, 2005 01:10 PM