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Author Topic: Tom Davidson
Automath
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In the thread, "In Defence of the FairTax", every robuttal to my argument seem to hold themes along the lines of how the rich need to be pubished and made to support the majority (everyone else), and that allowing people to save, generate wealth, and work hard tax free was a bad thing.

So I've decided that instead of debating the merits of the FairTax, we'll debate the merits of the things its critics are so confounded about it replacing.

.
..
...
..
.

This was a post by you, Tom, quoting me:

quote:
quote:

Under the Fairtax, you can climb to whatever your comfort level of wealth is tax free.

This is, by the way, why I support a wealth tax.
Later, you argued that the FairTax was not a tax on accumulated wealth, but a "a tax on sales, which are not in fact a reliable indicator of wealth".

Fair enough, if you want to argue that stocks and assets are not cash (spendable), but those can not be used to create additional advantage until they are turned into cash and then spent; hence my argument that the FairTax is indeed a tax on accumulated wealth.

But no. For you, this isn't simply a matter of wealth. It's a matter of who should be taxed, and how many times.

quote:
Accumulated wealth is reflected in things like appreciated homes, capital gains, etc
If I'm reading you correctly (not just that post) you believe the rich should not only be taxed on the dollars they earn, but at a higher percentage rate for each. Why?

You also seem to think any business they create should have imposed on it taxes on all degrees of profit. Why?

You also seem to think when they die, part of what they pass on should be taken by the government. Why? Oh, and how much?

Now, these three ideas (by no means new) happen to be on a very old list a friend recently pointed me too, and all three, as well as a few others on this list, are oddly familiar.

This is the list:

1. Abolition of private property and the application of all rent to public purpose.

2. A heavy progressive or graduated income tax.
(That's one of them. No denying that.)
3. Abolition of all rights of inheritance.
(You're leaning in favour of this one, are you not?)
4. Confiscation of the property of all emigrants and rebels

5. Centralization of credit in the hands of the State, by means of a national bank with state capital and an exclusive monopoly.

6. Centralization of the means of communication and transportation in the hands of the State.

7. Extention of factories and instruments of production owned by the State, the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal liablity of all to labor. Establishment of Industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country by a more equable distribution of the population over the country.

10. Free education for all children in government schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. etc.
(By the way, when someone says "etc, etc" it means they've run out of ideas)

Now number two on my list aint on this persons list (though number one seems to be treading along these lines), but I'd like you to defend it anyway, if you will, since you're against the FairTax because of it.

So, would you please defend all three of the matters on my list. Some of the other ideas on this persons list are often used to critizen the FairTax, but you havn't personally done so, so it's up to you whether you'd like to now or not.


Note: I'm 17, so I never saw the rise and fall of communism. In fact, I was born the year the Berlin Wall fell.

Oh, and the other Tom, if you want to debate a tax system based on a fairer distribution of happiness [Roll Eyes] start your own thread.

[ August 03, 2006, 03:44 PM: Message edited by: Automath ]

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TomDavidson
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quote:
If I'm reading you correctly (not just that post) you believe the rich should not only be taxed on the dollars they earn, but at a higher percentage rate for each.
Nope. I'm not actually a huge fan of income tax. I support a combination of sales taxes and asset taxes.

quote:
You also seem to think any business they create should have imposed on it taxes on all degrees of profit. Why?
Nope. See above.

quote:
You also seem to think when they die, part of what they pass on should be taken by the government. Why? Oh, and how much?
If an asset tax were in place, estate taxes would be completely unnecessary.
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Automath
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Hmph. Maybe you are a Libertarian, after all.

By asset tax do you mean property?

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Automath
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quote:
quote:
You also seem to think any business they create should have imposed on it taxes on all degrees of profit. Why?
Nope. See above.
I was referring to your comment about capital gains taxes.
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TomDavidson
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Yep. Which is probably one of the two or three points on which I'm most un-libertarian.

But I'm closer to being a libertarian than much of anything else, nowadays.

-----

I don't consider capital gains to be the only way in which a business can accumulate profit. [Smile] But I do believe that any fair asset tax will take appreciation and depreciation of assets into account, which puts you directly into capital gains territory. Besides, capital investment is and should be its own reward, not a profit engine based on speculation.

[ August 03, 2006, 03:52 PM: Message edited by: TomDavidson ]

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Automath
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Well I'm not actually against property taxes.

That only leaves one real conflict between you and the US FairTax Bill and its proponents. It promises to eliminate the IRS and replace it with something along the lines of a "Sales Tax Bureau". This name says to me they don't ever want the Federal government to instate any other tax alongside the FT sales tax. So adding in asset/property taxes would require them to change their name, and logically back to Internal Revenue Service, which would make the book and thousands upon thousands of FairTax signs, t-shirts, etc look very very stupid.

Why can't State and local governments just do the asset/property taxing?

[ August 03, 2006, 04:03 PM: Message edited by: Automath ]

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DonaldD
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Adding in asset/property tax will (depending on implementation) no longer de-tax the wealthy as HR25 would, and would continue to tax every step along the manufacturing/sales cycle.

Those potential efficiency gains that HR25 proponents tout would disappear, as would any related price reduction. Enforcement would also remain a complex affair requiring a large bureaucracy.

Having an asset tax would defeat the whole purpose of HR25, which is meant to be a replacement of all other taxes (replacing those 'unfair' taxes with this 'fair' one). This would not actually be a terrible thing IMO.

[ August 03, 2006, 04:44 PM: Message edited by: DonaldD ]

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RickyB
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Wait, Automath, are you *really* saying that money doesn't translate into advantage until you buy something with it?
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Automath
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How about stick to the matter of how many times you think a person should be taxed on the same dollar of income?
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Automath
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quote:
Having an asset tax would defeat the whole purpose of HR25, which is meant to be a replacement of all other taxes (replacing those 'unfair' taxes with this 'fair' one). This would not actually be a terrible thing IMO.
You assume that's all there is to the FairTax? How about broadening the tax base, bringing down the general rate for each individual. Sales taxes, historically, have been very successful because of this.

Let's go over what else there is to the "whole purpose" of HR25:

- Completely untax the poor
- Have no tax burden whatsoever on exports
- Have a tax burden on imports equal to that of domestic products, allowing domestic products to compete fairer
- Lower the maximum tax burden, which is inevitably on the rich
- Untax investments and savings
- Eliminate the tax disincentive/punishment for employees who work overtime
- Make the underground economy pay taxes the same as everyone else
- Provide a steady revenue flow (consumption fluctuates steadier than income, since even when without income people will still borrow to cover the cost of neccessities and debts)
- Allow loans to be paid off debt free
- Eliminate all loophopes in the tax system
- Allow people to work for their comfort level of wealth tax free
- Make tax voluntary
- Simplify domestic business overhead; costs that are paid for by those who pay their income-- consumers
- End the ability of politicians to use the tax code for vote buying and pandering from special interest lobbies
- Give everyone a shared interest in keeping the tax rate low by making it completely transparent

Shall I go on?

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RickyB
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I asked a simple question. do you stand by that assertion? I'm not engaged in an all-encompassing debate about taxation, just asking you a question about something you said which caught my eye and seems important to me. You got an answer?

And if you mean "paying income tax on a dollar and then paying capital gains tax on what that dollar yeilds in the stock market" - yes, that's fair, provided you can deduct the principle from the cap gains, so you only pay on the earnings.

And BTW - "completely untaxing the poor" is NOT a good thing. It's a first step on the road to disenfranchising them. The truly impoverished should be exempt for humanitarian reasons, but working poor have a right to feel they have a stake, however small, in the machine of government.

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Automath
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Before I can answer your first question, elaborate on other ways to gain advantage (yes, I can think of some, but you should be more specific and less "all-encompassing", IMO) and I'll have a go at refuting them.

quote:
And BTW - "completely untaxing the poor" is NOT a good thing. It's a first step on the road to disenfranchising them. The truly impoverished should be exempt for humanitarian reasons, but working poor have a right to feel they have a stake, however small, in the machine of government.
Well, by my standards "poor" means someone who can only afford the bare neccessities, not "someone who isn't quite as wealthy as [your pick [Wink] ]". The FairTax untaxes neccessities. What exactly is wrong with that?
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Automath
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quote:
And if you mean "paying income tax on a dollar and then paying capital gains tax on what that dollar yeilds in the stock market" - yes, that's fair, provided you can deduct the principle from the cap gains, so you only pay on the earnings.
It's a form of income. Income from employment is not taxed under the FairTax. Why should income derived from investment be any different? It's all taxed when it's taken to retail, so again, that would be double taxation.

Now I'll ask again. How many times you think a person should be taxed on the same dollar of income?

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Automath
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And why do you define poor and impoverished as two different things? Poor doesn't equal impoverishment? So it simply means "poor compared to that lucky bastard" does it?
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RickyB
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quote:
Before I can answer your first question, elaborate on other ways to gain advantage (yes, I can think of some, but you should be more specific and less "all-encompassing", IMO) and I'll have a go at refuting them.
If you had well formed opinions on the subject, you wouldn't need me to do so. But anyway - having control over a large sum of liquid cash and or assets worth same gives you much greater access, much greater credit (which is probably the leading financial factor in being able to conduct business of any kind), much more favorable terms in many transactions, much greater ability to accept risks that would force other to "fold their hand"... It goes on and on.

Um, define "bare necessities". Also, it would be good if you tried to define what you think people should be able to afford if they're emplyed full time.

Impoveished is a more severe condition. Just like I distinguish "under-nourished" from "mal-nourished" and "mal-nourished" from "actually starving to death on current caloric intake". Degrees. Shades. Persepctive.

You cite the "fair tax" as though it's some sort of accepted standard. I'm not familiar with the details of this proposal and don't need to be to discuss general taxation issues. You of course may offer it as illustration of your pov, but you can't negate my point by saying that it doesn't follow the "fair tax" idea. Under the current taxation policy, income from employment is indeed taxed. I was, of course, referring to that and not to this piece of suggested legislation you seem to like.

So, again: One dollar of income should, ideally, be taxed only once. You seem to favor it being taxed at the point of spending. I dispute the, um, fairness of this, as I have just explained a few paragraphs up why a guy doesn't have to spend his money to gain by having it.

[ August 03, 2006, 07:29 PM: Message edited by: RickyB ]

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Automath
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quote:
If you had well formed opinions on the subject, you wouldn't need me to do so. But anyway - having control over a large sum of liquid cash and or assets worth same gives you much greater access, much greater credit (which is probably the leading financial factor in being able to conduct business of any kind), much more favorable terms in many transactions, much greater ability to accept risks that would force other to "fold their hand"... It goes on and on.
Oh gee, they've got good credit history, and a lot of accumulated wealth, so they have more financial mobility? And then you take a guy working at McDonald's at middle age with a horrible credit history, and he's screwed. Boo hoo.

quote:
Um, define "bare necessities".
http://aspe.hhs.gov/poverty/04poverty.shtml Or did you think they just worked out those for fun?

quote:
Impoveished is a more severe condition. Just like I distinguish "under-nourished" from "mal-nourished" and "mal-nourished" from "actually starving to death on current caloric intake". Degrees. Shades. Persepctive.
That's what welfare is for. What exactly is your point? Under the current system they pay no income taxes... eventually. Under the FairTax, they pay no income taxes and no witholding.

You say "The truly impoverished should be exempt for humanitarian reasons". If they're in that state, welfare (with no witholding under the FairTax) will help them with that, not the tax code. If they then use that to buy the neccessities up to the poverty level, thanks to the prebate they pay no taxes. They are "exempt for humanitarian reasons". If they spend above poverty level, then either the poverty levels too low (which wouldn't be the fault of the FairTax), or they're living above their taxpayer-funded means.

quote:
You cite the "fair tax" as though it's some sort of accepted standard. I'm not familiar with the details of this proposal and don't need to be to discuss general taxation issues. You of course may offer it as illustration of your pov, but you can't negate my point by saying that it doesn't follow the "fair tax" idea. Under the current taxation policy, income from employment is indeed taxed. I was, of course, referring to that and not to this piece of suggested legislation you seem to like.
The FairTax started when a small group of businessman decided to stop complaining, and put their money towards actually remodelling the crappy tax system. They had focus groups conducted about what Americans wanted from a new tax system, and in one of these focus groups a participant came up with the name "fair tax".

That's the idea. Why would you put through a tax reform proposal if it's unfair? Currently there are 700,000 supporters, and about 60 co-sponsors in the US Congress for this Bill. Looks like it might just be fair.

And if it doesn't get through, then it is unfair. But let's not play semantics over the name, thanks.

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pickled shuttlecock
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quote:
Originally posted by Automath:
In the thread, "In Defence of the FairTax", every robuttal to my argument seem to hold themes along the lines of how the rich need to be pubished...

I apologize. I would have read your entire post and the rest of those on this thread, but I got hung up on this one word. What, exactly, does it mean when you "pubish" someone? Is it something Richard Dey would get all giddy over, or is it much less tame than that?
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LoverOfJoy
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the b is next to the n on my keyboard.
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RickyB
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Your belligerence towards the less fortunate seems to totally miss the simple economic necessities for a sucessful consumer society. Also, your use of extremes indicates that you have no idea of the financial realities of many millions of functioning adults with totally respectable jobs who pay their bills regularly in America today.

I also find it quite amusing that you would use a supremely proagandish euphemism for this bill and then say "let's not play semantics with the name".

You also completely ignored the gist that paragraph. Or perhaps didn't get it. The point is not that so-an-so many Americans profess to support this bill. The point is not the press release story of how "a few people nobly got together yada yada". The point is that we're not talking about the fairtax. I asked you a question which you evaded. In the course of evasion you asked me one. My answer shoul not be expecte to reference the fairtax.

So, when I make a point based on comparison with the current situation, it is a non sequitor for you to answer with "well, this doesn't happen under the fairtax".

Yah?

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DonaldD
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quote:
Having an asset tax would defeat the whole purpose of HR25, which is meant to be a replacement of all other taxes (replacing those 'unfair' taxes with this 'fair' one). – DonaldD

You assume that's all there is to the FairTax? - Automath

Ignoring for the moment that you evaded the actual meaning of that sentence by focusing on trivial word usage, let’s first focus on that word usage: when someone says “That’s the whole purpose” or something similar, it generally means “That’s by far the main purpose” or sometimes “that’s by far the most important point from which most other points can be extrapolated”. If you want to argue I should have explicitly used a less hyperbolic term, enjoy. However, let me just point out that fully 9 of the 15 points you then listed in rebuttal to my statement are actually about the removal or reduction of taxation. Thank you for making that completely secondary argument for me.

Now on to the actual gist of my post – that having a total asset tax in the way that Tom envisions it (or my understanding of that) in concert with HR25 would inevitably negate or reduce significantly the most important purported benefits of HR25. It would also completely change what I consider to be the main provable benefits of that tax. In no particular order:

  • Having such a tax would require an IRS-like entity, probably similar in size, scope and in the public’s hatred towards it.
  • By the nature of certain assets, it will become difficult for auditors to account for/track their actual value (even their existence in many cases.)
  • Having such a tax will force all businesses to account for all assets (and their change in value) annually. This will entail significant efficiency costs. Those efficiency costs that HR25 supporters are betting on to reduce prices will be reintroduced by such a scheme.
  • Every person/household in the country would once again be on the hook for annual accounting – this time for asset taxation as opposed to income taxation.
  • An asset tax will not necessarily shift the tax burden from the wealthy to the less wealthy as HR25 will do. Depending on how such a tax is ‘tuned’ it could even increase the tax hit on the rich. Now, I’ve never seen any proponent of HR25 with the chutzpah to so baldly claim decreasing taxes specifically for the wealthy as a beneficial effect of this particular sales tax before, so although it is refreshing to hear, having an asset tax in place won’t give the same bang for the buck that you assume will be coming to the well off.

Shall I go on? [Smile]

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Automath
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"Ignoring for the moment that you evaded the actual meaning of that sentence by focusing on trivial word usage, let’s first focus on that word usage: when someone says “That’s the whole purpose” or something similar, it generally means “That’s by far the main purpose” or sometimes “that’s by far the most important point from which most other points can be extrapolated”. If you want to argue I should have explicitly used a less hyperbolic term, enjoy."

That's not an expression where I live. Get over it.

As for the rest of your post, where exatly did I say I supported federal asset taxes on top of the FairTax?

[ August 05, 2006, 11:43 AM: Message edited by: Automath ]

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Ivan
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What this debate amounts to is the fundamental question of taxation: Who pays and how much?

This is the most important thing to decide first. Once this has been decided you can go about decided how they will pay it and which method is most efficient for that.

Given that most of the people in this thread probably have different ideas about the first question, I find it premature to discuss the second.

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Automath
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quote:
This is the most important thing to decide first. Once this has been decided you can go about decided how they will pay it and which method is most efficient for that.
I'm not discussing the FairTax so much as a how issue, but more of when issue.

I think that's what most people here are discussing too. Should we tax people when they're saving? When they're earning? When they're investing? When they're spending? When they receive inheritence? and so on.

Also is taxing on what. We both seem to agree that neccessities shouldn't be taxed, for instance. And though I believe the FairTax prebate is the best way (how) to untax neccessities, we havn't really gone into any serious how questions, besides the basic my preferred plan versus their preferred plan(s).

[ August 05, 2006, 01:39 PM: Message edited by: Automath ]

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DonaldD
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quote:
where exatly did I say I supported federal asset taxes on top of the FairTax?Automath
I'm not sure why you think federal vs state-level implementation of an asset tax is important, because if an asset tax is actually implemented as Tom described (at either level) it will have the same effect. As for where you say you support asset taxes, you don't; you do say that Tom and proponents of HR25 (which if I'm not mistaken includes you) have only one real conflict: getting rid of the IRS. You also implicitly accept such a tax as long as it is implemented in conjunction with HR25 by suggesting that it be implemented at the state level.
quote:
I do believe that any fair asset tax will take appreciation and depreciation of assets into account, which puts you directly into capital gains territory - TomDavidson

That only leaves one real conflict between you and the US FairTax Bill and its proponents. It promises to eliminate the IRS and replace it with something along the lines of a "Sales Tax Bureau".

<snip>

Why can't State and local governments just do the asset/property taxing? - Automath

So just to restate; if you accept Tom's proposal of a wealth/asset tax, even if at the state level (which you have done implicitly in that last question) you reintroduce most if not all of the complexity removed by replacing all current taxes with a retail sales tax. No more efficiency gains, no reduction in prices.

If you did not mean to imply that you would support such a tax, we're still left with that "That only leaves one real conflict between you and the US FairTax Bill and its proponents" bit: proponents of HR25 (even if you are not one of them) would have many problems with such a tax if implemented as Tom suggests.

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Automath
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quote:
I'm not sure why you think federal vs state-level implementation of an asset tax is important, because if an asset tax is actually implemented as Tom described (at either level) it will have the same effect.
Not if States, under the Federal FairTax, get the choice of what they want their own tax code. If they didn't (and you seem to be implying they shouldn't in that scenario), that would defeat the whole point of it being a state tax. If it's federally enforced, it's a federal tax, whether called so or not.

So, these individual States could have just the FairTax. Or they could have just the asset tax Tom proposed. Or they could have a whole bunch of other things.

And then maybe you'd end up with some states just FairTax, and some FairTax and asset tax, and we could see for ourselves which is better.

So yes, I stand by my statement you've quoted in your last paragraph. Leave the States to have individual tax codes and the federal FairTax wouldn't conflict with them, or any asset taxes imposed by them.

[ August 05, 2006, 03:32 PM: Message edited by: Automath ]

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Automath
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Here, I'll quote you and add in the bit you conveniently left out:

quote:
Having an asset tax would defeat the whole purpose of HR25, which is meant to be a replacement of all other taxes [at the federal level] (replacing those 'unfair' taxes with this 'fair' one). This would not actually be a terrible thing IMO.
You don't think much of individual State rights, do ya?

[ August 05, 2006, 03:36 PM: Message edited by: Automath ]

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Automath
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Originally posted by RickyB

quote:
And if you mean "paying income tax on a dollar and then paying capital gains tax on what that dollar yeilds in the stock market" - yes, that's fair, provided you can deduct the principle from the cap gains, so you only pay on the earnings.
"...and then paying capital gains tax on what that dollar [minus the income taxes imposed on it] yields in the stock market"

You don't see a double taxation here? Or do you think dollars invested and dollars earned come from two completely different sources?

Now let me quote you:

quote:
So, again: One dollar of income should, ideally, be taxed only once. You seem to favor it being taxed at the point of spending. I dispute the, um, fairness of this, as I have just explained a few paragraphs up why a guy doesn't have to spend his money to gain by having it.
[Smile]

[ August 05, 2006, 03:57 PM: Message edited by: Automath ]

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DonaldD
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Ahh, so you're fine with an asset tax as long as it's not implemented. Gotcha. Tom can correct me if I get this wrong, but part of a fair asset tax that he is thinking of is one that is actually applied to assets, as opposed to one that remains purely theoretical, i.e., one that is applied to everyone in the country.

I suppose HR25 proponents are also all for non-implemented income tax, too. Cool.

As for the states' rights dig, I'm a bit unclear on why foisting HR25 on all states is respecting their individual rights, but doing the same with an asset tax is not.

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Automath
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quote:
Well I'm not actually against property taxes.
That statement, from me, was based on having the wrong idea of what he meant by property taxes. In Australia at least, we pay land rates/property taxes to pay for local government. This isn't a tax on profit or appreciated value.

But that's not even what you're continually quoting me on. This is:

quote:
That only leaves one real conflict between you and the US FairTax Bill and its proponents. It promises to eliminate the IRS and replace it with something along the lines of a "Sales Tax Bureau". This name says to me they don't ever want the Federal government to instate any other tax alongside the FT sales tax. So adding in asset/property taxes would require them to change their name, and logically back to Internal Revenue Service, which would make the book and thousands upon thousands of FairTax signs, t-shirts, etc look very very stupid.

Why can't State and local governments just do the asset/property taxing?

Where in there do I actually even suggest I like the idea of taxing appreciated value/profit?

[ August 05, 2006, 04:20 PM: Message edited by: Automath ]

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RickyB
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No, there isn't a double taxation. You go cut squid for an hour at Chin Qi's, and make 2 dollars. You are taxed at 10% an left with $1.80. You take one dollar out of that and invest it in the market. Your stock doubles its worth. You sell your stock for $2. You only pay 10 cents as tax on the liquidated stock. Why? Because one of the two dollars is your principle, which has already been taked and is therefore exempt. Upi only pay tax on the dollar you earned in the market. Where's the double taxation?

(And let's see who gets the literary allusion [Smile] )

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Automath
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This is why when people speak of "the tax on a dollar of income" they're talking in regards to purchasing power.

First, with the income tax, their ability to invest has been taxed. Purchasing power of that dollar goes down.

Then, whatever profit is made off this cut ability to invest is taxed. Purchasing power of that dollar goes up, and then brought down some by more tax.

So the difference between you and I is you prefer a disincentive on capital generation, and I prefer a disincentive on extravagance (as is the folly of the spendthrift).

[ August 05, 2006, 04:45 PM: Message edited by: Automath ]

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LetterRip
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Haven't followed the fair tax discussion, but i'll put in a few comments. First you should check the archives, the weaknesses and impacts of the fairtax have been discussed before.

Here are some other points

a) Without government spending reduction if the tax plan is revenue neutral their can't be a reduction in taxation for anyone.

b) any borrowing used for purchasing has the 30%, thus emergency borrowing will be even more devastating than its current impact

c) given that the plan is revenue neutral this amounts to a drastic increase in taxation on the poor and middle class and a drastic decrease in taxation on the wealthy. Ie assume no change in consumption

c1) the poor by necessity spend all of their income - thus a real rate of 30% taxation before transfers

c2) the middle class currently borrows heavily to support its spending - see the impact on borrowing above. Even assume all borrowing is eliminated what percentage of income would still be spent? Probably at least 90% - with 50-60% in required purchases and the rest in optional spending - at .9*.3 = 27% taxation.

c3) The wealthy even with high dscrectionary spending can often spend far less than half of their income. .5 *.3 = .15% Of course the wealthier you are the less as a percentage of income is spent easily allowing some individuals to spend less than 1% of their income .01*.3 = .03%

d) Tax avoidance and evasion - those of adequate means (or who live near a border, or even take vacations to other countries) can make their purchases elsewhere where the tax doesn't exist. Also, this high rate of single point taxation gives huge incentives for tax evasion with a major incentive for a black market. The only way to significantly reduce this would be to track the ownership of all assets.

e) The tax has no relation to what benefits are derived from government expenditure - the primary beneficiaries of military spending, infrastructure spending, as well as human resource expenditures (ie education), foreign aid spending, and market regulation are the wealthy. Currently the effective tax rate for the wealthy is substantially less than the benefit derived from these expenditures. This tax system would further this with even less of the burden of these expenditures falling on the wealthy. Note that the benefit of these expenditures is generally in proportion to net worth, and current taxation is largely tied to income.

f) There is no taxation based on externalities - many products have associated negative costs to society and the government. For a market to act efficiently the negative (and positive) externalities must be incorporated into the price of the product.

g) There is an assumption of reduced overhead from accounting and attorneys, however almost all of these expenditures are neccessary for other purposes including prevention of corporate fraud, preparation of statements for shareholders, tracking of inventory, etc.

LetterRip

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Jesse
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Automath

Can you describe a consumer economy for me in one paragraph?

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RickyB
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Encouraging capital investment is important, but the government has other, concurrent objectives it must meet when formulating economic policy. You think government exists solely to encourage the investor. It doesn't.
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Jesse
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Investors need markets.
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