Page 2 of 3 FirstFirst 123 LastLast
Results 21 to 40 of 49
  1. #21  
    Quote Originally Posted by meyerweb
    Especially lowering their expenses. Hence the explosion in tax shelters of questionable legality.

    Why? OK, let's say it takes X dollars to fund governent programs. Call it 1 Trillion, only because that's a nice round number. Now say that in the year 2000 the top quintile payed 22% of that 1 Trillion. That left 78%, or 780 billion dollars, to be paid by the rest. Now say that a consumption tax, replacing taxes on income, interest, dividends and capital gains, reduces the share the rich pay to 18%. That means the remaining 80% now pay 820 billion dollars in taxes. In very simple terms: if the wealthy pay less, the rest of us pay more.
    Your math is simply wrong! While you reduced the "percentage" of tax paid by the wealthy you didn't apply the percentage the higher income that they get by reducing taxes on capitol gains etc..
  2. #22  
    Quote Originally Posted by sxtg
    We keep hearing that, but have yet to hear how!
    Probably the best study to date on the subject, from the CATO institute, concludes that the flat rate national sales tax as you all are discussing it, would indeed be quite regressive.

    http://www.cato.org/pubs/pas/pa-289.html
  3. #23  
    Quote Originally Posted by sxtg
    Your math is simply wrong! While you reduced the "percentage" of tax paid by the wealthy you didn't apply the percentage the higher income that they get by reducing taxes on capitol gains etc..

    Huh?

    I don't understand what you're trying to say. Are you implying that reducing capital gains taxes raises a person's taxable income? Not so. Reducing taxes on captial gains effectivly increases a persons after tax income, but it has no impact on other income taxes.

    And a consumption tax will eliminate all taxes on captial gains, which is another benefit to the wealthy, since much of their income is from gains, whereas the typical worker has relatively little income from capital gains.

    Just what are you trying to say?
    Bob Meyer
    I'm out of my mind. But feel free to leave a message.
  4. #24  
    Quote Originally Posted by meyerweb
    Huh?

    I don't understand what you're trying to say. Are you implying that reducing capital gains taxes raises a person's taxable income? Not so. Reducing taxes on captial gains effectivly increases a persons after tax income, but it has no impact on other income taxes.

    And a consumption tax will eliminate all taxes on captial gains, which is another benefit to the wealthy, since much of their income is from gains, whereas the typical worker has relatively little income from capital gains.

    Just what are you trying to say?

    That is exactly what I am trying to say. Eliminating income tax would effectively raise income. So when you apply 18% (as opposed to 22%)remember to apply to the higher income this would raise the wealthy actual chunk of the needed funds. Thereby reducing the burden by the rest.
  5. #25  
    I'd have to say a flat tax is the best. Everyone is taxed exactly the same that way. Tired of hearing how the rich should pay more because they can. Everyone should be taxed equally.

    The idea that "the poor" would suffer is an emotional response. The tax has limits and many things (basic neccesities) would not be subject to tax. It should also be pointed out that this would replace the income tax. Again everyone would be taxed the same and everyone would have the same advantage/disdvantage.

    Why do some folks feel the ned to punish people because they make money? Instead of attacking them, try learning from them.
  6. #26  
    Now what I don't know is rather or not implying a consumption tax would have a negative effect on consumption itself, which would obviously create an negative impact on our economy in general.
  7. #27  
    Actually I dont think it would. Without an income tax people would have more money. What do they do when they have larger paychecks? Spend more.

    Yes there would be some slowdown as people got used to it but by and large I think it would level out.

    The biggest downside I see is for folks who are selfemployed and pay their taxes quarterly or annually with any withholding being done. We essentially have our money now and so it would hurt immediately. I also wonder if all the business deductions would go away or how that would be handled.
  8. #28  
    Quote Originally Posted by Woof
    Actually I dont think it would. Without an income tax people would have more money. What do they do when they have larger paychecks? Spend more.

    Yes there would be some slowdown as people got used to it but by and large I think it would level out.

    The biggest downside I see is for folks who are selfemployed and pay their taxes quarterly or annually with any withholding being done. We essentially have our money now and so it would hurt immediately. I also wonder if all the business deductions would go away or how that would be handled.

    These biz probs are the ones I was talking about. Corps would pay the same as everyone, they would pay taxes on equip, etc.. Eventually the bean counters would get involved and less and less would be spent on equipment. Right now its the opposite, Corps spend money on equip to reduce tax. I can see where that would create enormous probs, not only on the imediate economy but in relation to more injuries on the job, lost time and then less consumption on the whole, etc...

    I am glad its not up to me to figure these things out.
  9. #29  
    Quote Originally Posted by meyerweb
    Especially lowering their expenses. Hence the explosion in tax shelters of questionable legality.

    Why? OK, let's say it takes X dollars to fund governent programs. Call it 1 Trillion, only because that's a nice round number. Now say that in the year 2000 the top quintile payed 22% of that 1 Trillion. That left 78%, or 780 billion dollars, to be paid by the rest. Now say that a consumption tax, replacing taxes on income, interest, dividends and capital gains, reduces the share the rich pay to 18%. That means the remaining 80% now pay 820 billion dollars in taxes. In very simple terms: if the wealthy pay less, the rest of us pay more.

    This is overly simplified of course, because it ignores deficits (already at all time highs during the Bush years, and likely to grow even larger), and potential budget cuts. But the Republican congress doesn't seem any more interested in cutting the overal budget any more than democrats did, nor does Bush seem even a little bit concerned with doing so. So don't expect overall tax receipts to drop very much, for very long. Eventually the deficit has to be payed for, one way or another.
    Would it be ok with you if the wealthy's percentage went up?

    We don't know if the percentage would go up or down. With flat tax, the percentage is based on taxable income. With consumption tax, the percentage is a function of spending patterns.

    And as to tax shelters. That type of foolishness could just go away.
  10. #30  
    What about retirees who have spent their whole lives paying income taxes, and now pay very little to the federal gov't. A consumption tax effectively taxes their income twice, right?
  11. #31  
    Well I'd say its just not a simple now we have a flat tax. It's going to be quite a bit more complex.
  12. #32  
    Only if they are living off their principle as opposed to dividends, interest, etc.

    But, the broader point is, yes the cut-over will be difficult. Behaviors will be adjusted.
  13. #33  
    Quote Originally Posted by Woof
    I'd have to say a flat tax is the best. Everyone is taxed exactly the same that way. Tired of hearing how the rich should pay more because they can.
    Woof I disagree with you, but I appreciate your honest approach to the subject.

    What I just do not understand is this song and dance about how the flat tax is somehow going to benefit the poor.
  14. #34  
    Quote Originally Posted by cellmatrix
    Woof I disagree with you, but I appreciate your honest approach to the subject.

    What I just do not understand is this song and dance about how the flat tax is somehow going to benefit the poor.
    i liked the first pre edit post you made.

    I guess it boils down to a fundamental difference in responsibility to the poor. I for one am a coldhearted ******* who thinks that the poor should help themselves. Those who try to better themselves are often rewarded with additional opportunities for advancement and success. Those who wait for someone else to help them often spend a lot of time waiting.

    Poor and rich are mind sets not economic or social conditions. People who choose not to be poor dont stay poor very long. It has been postulated in hundreds of financial texts by many different authors, that if you were to take all the money from the "rich" folks and give it to the poor it would be a short term change. Within a few years if not sooner, the money would have moved back to the rich folks. Why? because they know how to be rich. They can manage their money. They make smart choices, they invest etc. Poor people rarely do those things. What happens when most poor folk win the lottery? they go out and buy everything they ever wanted for themselves and their families and all their new friends and pretty soon whats left? Nada. Why? Because of bad choices.

    My brother-in-law will be poor his whole life because he makes crappy choices with his money. He makes 40K a year (60k if you count his wifes salary) and he has nothing. Spends every dime every payday and is broke 5 days before the next payday. He owns nothing outright, has no savings, doesnt contribute to his 401k at work and will always live paycheck to paycheck. No amount of tax manipulation will help him. Nor charity or handouts or social programs. Money is like sand through his fingers. That is why he is poor. That is why many poor people are poor.

    Now you may say they have disadvantages, but what about those who make it out of poverty? Did they do it because they finally got enough breaks and handouts and the tide finally turned in their favor? Nope. They made a mental change and did it themselves. I know you dont believe that but it's the truth. I've seen it happen.

    My point in all this is poor people will be poor no matter how the tax code is done. If the current code is so good for them why are they still poor? Because it is irrelevant. No taxes on anyone making less than 30k and they would still be poor. They would ahve more to blow and blow it they would.

    But as I was saying paragraphs ago, you want to help them anyway and punish those who actually work for what they have. I don't. People should not be penalized because they are better no should people be forced to pay because they can. Having money does not make you responsible to or for those that don't.
  15. g.711's Avatar
    Posts
    550 Posts
    Global Posts
    571 Global Posts
       #35  
    A flat tax is the fairest way to tax. It cares not if you are rich or poor, its what you buy. The trouble with the current tax table is loop holes to drop your effective taxable rate. The government should not be in the business of social engineering, home ownership or charity contributions. Flat tax is the fair way to go.
  16. #36  
    Woof, I agree with about 95%+ of your post. Spoken as a true capitalist and Republican, no offense meant.

    As someone in the "money business" my feeling is that we do a very poor job of educating our children to be more money smart. This is what leads to poor money choices. We need to do a better job in doing this, both at home and at school. But, we will still always have those that are poor. Just like we will always have people that are unemployed.

    I do have a modification to one of your statements about taking money from the rich and giving it to the poor. Those that are self made will always recover and get back to the place called "wealthy." Those that have inherited and have little regard for the wealth they were given will wallow in poverty because they don't know how to go out and get it. Their parents/grandparents or whomever, just sabotaged their lives by not making them work for it. I have seen it so many times before. For me, I know you could drop me in the middle of a town that I have no ties to and I will be back to my standard of living within a year or two. But I was taught how to do that by mentors.

    Personally I feel a consumption tax is the fairest tax of all. Let me explain it in a way I use with my clients. The government gives you certain tax breaks/advantages that permit you to do certain things they feel are "in the public good." The problem is that you must be proactive. You only get these breaks if you take steps to start them. A prime example you quoted was the 401(k) plan. You don't pay taxes on what you put in, nor do you when the money grows. But you have to put the money in. The benefit to the public is that, at retirement, you won't have to rely on just Social Security. The same would apply concerning the consumption tax. No taxes on food, shelter and clothing as they are essentials. No capital gains taxes or taxes on dividens from investments. This would encourage people to save, as the returns they get would be free from tax. When you buy things -- cars, furniture, boats, gadgets (like the treo ) etc., then you would pay a tax ... imo the US could get away with a tax of 1.5%.

    A family with an income of $100,000 would immediately receive a "raise" of about $20,000 with the elimination of the income tax. Assuming they would buy $50,000 of taxable items each year, they would pay about $750 in consumption tax. That money could be saved (my advice) or spent. In either event, the overall benefit to society and the economy would be large.

    This from a lifelong Democrat.
    << My command as we escape Palm HQ with a new Pre 3>>.

    Treo 300 >> Treo 600 >> Treo 650 >> Treo 755 >> Instinct >> Pre- >> TouchPad
  17. #37  
    Quote Originally Posted by tjd414
    A family with an income of $100,000 would immediately receive a "raise" of about $20,000 with the elimination of the income tax. Assuming they would buy $50,000 of taxable items each year, they would pay about $750 in consumption tax. That money could be saved (my advice) or spent. In either event, the overall benefit to society and the economy would be large.
    So the government, instead of getting $20,000, they would get $750. This is going to help to pay for the war in Iraq and the massive defecits we have? This seems like a pie in the sky scenario.

    The flat tax would hit poor people worse than rich people, even if everyone played by the rules. Poor people just spend a larger proportion of their income on consumable items, than rich people. Its a fact.

    And we all know, we are not going to have everyone playing by the rules. That is another pie in the sky scenario. Between offshore bank accounts, and out of the country purchases, and who knows what other creative methods, people in the know are going to find ways to cheat which poor people would not have access to.

    So basically we are talking about making the poor pay a higher percentage of their income on taxes than the rich, and then there will be the same types of opportunities to cheat that the rich will have greater access to, just like they do now, so that will further widen the discrepancy.

    No, I do not like the idea of a flat tax, sure I would benefit financially, but it would just make our society far more inequitable than it already is.
    Last edited by cellmatrix; 12/17/2004 at 10:11 AM.
  18. #38  
    The difference is the tax is levied on the sale and/or use of services, not income. And the GDP is much higer than the income of the US population. Buy a movie ticket, pay the tax. Lease a car, pay the tax. Buy jewelry, pay the tax. Buy a boat, pay the tax. Take a taxi, pay the tax. This will give enough tax revenue to the government to pay for everything, provided of course they reduce the out of control spending that the Republicans have taken to new highs. Thier irresponsibility in this area really grates on my nerves.
    << My command as we escape Palm HQ with a new Pre 3>>.

    Treo 300 >> Treo 600 >> Treo 650 >> Treo 755 >> Instinct >> Pre- >> TouchPad
  19. #39  
    "Why do some folks feel the ned to punish people because they make money? Instead of attacking them, try learning from them. " by woof.

    excellent point, woof. Im tired of hearing how bad the poor have it - you know, if they improve their choices and decisions in life they might be amazed at how much better their quality of life might become.

    its easy to criticize or believe in punishing the rich, until you realize what it took, in many cases to become that successful - hard work, discipline, dedication.... it doesn't come easy to all who are rich.

    you would think that, as woof said, rather than punish the rich, the poor would serve themselves better by learning from them. improve their financial status by making better choices - not simply staying in hopeless situations or worsening them by inactivity.
    in most cases, nothing comes free or easily in life. (0
  20. #40  
    in most cases, nothing comes free or easy in life. you would think that rather than staying in hopeless situations or worsening them, these people would improve their choices in order to better their stakes in life. you reap what you sow - this is true financially as well.
Page 2 of 3 FirstFirst 123 LastLast

Posting Permissions