[Kazan]

Holy freaking stupidity batman! Way to try and shift almost ALL of the tax burdeon onto the middle class.

Way to completely abandon the most conservative tenant of capitalizism - the progressive tax (yes it is a conservative tenant)


The repuglicans are trying to eliminate the income tax and replace it with a 23% national sales tax.

You read that right - 23% -- that means a $81 microwave costs $100 (99.63) after taxes


Sales taxes weigh entirely on the lower and middle classes


right now the only source i've seen is FuchsNews (So of course they're making this look like a great idea)

[Beowulf]

23% seems a bit... exorbitant...

[aldo_14]

What's the current US sales tax, BTW?  

(incidentally, UK VAT - which I guess is roughly equivalent - is set at 17.5% with exemptions for necessary goods)

[Kazan]

we have no national sales tax currently

and you should be fighting to destroy the VAT

[aldo_14]

Originally posted by Kazan
we have no national sales tax currently

and you should be fighting to destroy the VAT

Why? It'd only have to be replaced by some other tax.

 (even if it wasn't mandatory for all EU countries, which it is; part of the common market agreement)

EDIT; other european VAT rates; http://www.trade.gov/td/tic/tariff/eu_vat.htm Highest EU is Denmark at 25% (full rate)

[pyro-manic]

It's per-state sales tax IIRC, and not all states have it.

What's wrong with VAT? You'd just have to replace it with something else...

[aldo_14]

VAT's fine so long as it's moderated against the goods being taxed.... I couldn't find the full listing, but in the UK books and magazines in particular are untaxed (I think most staple food is, too), and some other items are charged at 5%.

It does seem bizarre to simply swap Income tax for VAT, though.  Really you need both.

[Kazan]

what's wrong with the VAT? the same thing that is wrong with all sales-tax-instead-of-income-tax schemes all the tax burdeon goes on to the lower and middle class

[aldo_14]

Originally posted by Kazan
what's wrong with the VAT? the same thing that is wrong with all sales-tax-instead-of-income-tax schemes all the tax burdeon goes on to the lower and middle class

Thats why there is a lower tax band and an exemption for necessary goods; like clothes and food.   Also banded income tax helps (or should help) to re-address the balance.

Not that the UK tax system is ideal, of course.   There are certainly a hell of a lot of ways it can be fixed up.

EDIT; VAT is not used instead of income tax, to be absolutely clear here.

[Liberator]

You forget though, Kazan, that with removal of Progressive Income Tax, most people's paychecks effectively double.  23% seems a bit high though.  The Fair Tax seems a better way to go and aliveates most of you're problems since spending up to the poverty level(~$20,000) is tax free.

[aldo_14]

The problem with an entirely purchase based tax is that it discourages spending, I think.  I also get the feeling that it'd surely be very unpredictable with relation to economic changes and trends.... and what I don't understand, is why not have both?  It seems to work over here... except for the stupidly confusing tax forms (gah!).

[redmenace]

I thought sales tax was an exclusive power of the states?

[pyro-manic]

That FairTax thing is... interesting. It seems like a good idea in theory, but I don't know enough (read: anything) about the American tax system to comment properly. It seems to avoid a big issue, though - the wealth gap. People in positions of power will still be paid obscene salaries, while the poorest will still struggle to pay for basic needs. That's the biggest problem that needs looking at. The richer people should pay more tax, since they can afford it. Poor people should pay much less.

[aldo_14]

Ah, but rich people = campaign contributors.

[Liberator]

Pyro, the essence of the Fair Tax is that people who live at or below the poverty line would not be taxed, period.  And without an income tax eating half their wages they would have more discretionary income.  Also, all purchases above poverty level are taxed, which means that if millionare A buy a $800,000 dollar yacht or a ferrari or something, and the tax rate is 10%, that purchase will be taxed $80,000 for a total purchase price of $880,000.  

IE, the more extravagant you're lifestyle, the more tax you pay, the more you scrape by the less tax you pay.

[pyro-manic]

Yeah, but the millionaire still has vast pots of cash, and the extra 80 grand isn't a lot to him so he buys the yacht anyway without a second thought. Whereas, if someone poor earns and spends, say $18000 in a year normally, they don't pay tax. That's all well and good, as they can just about manage on that amount. But if said person's car fails the MOT, or they get burgled, or something else happens, and they have to spend an extra $3000 on replacement parts/stuff/whatever, then they suddenly have to start paying tax on that $1000 they've gone over the limit by. Given that they earn less than they've already spent anyway, they're pretty much ****ed (sorry to be crude, but it's a big problem trying to pay money you haven't got).

My point is, people should be taxed on what they earn, so that yeah, the guy earning $18000 pays no tax at all, but the guy on a million dollars pays 40-odd percent (at the least. I dunno what the rates are in America). He has so much more, so he can (and should)  pay for the 18k guy.  


Gaaaaaaah. I'm about as eloquent as a housebrick. Bloody hell. I hope the above is understandable....

[Liberator]

Yes, but that's the thing, a progressive tax isn't fair.  It punishes a person, sometimes heavily, for being successful.

What drive do I have to work hard and get rich, if the government is going to take up to half of my money for no other reason than I've worked my ass off and become successful?

[Kazan]

liberator the "Fair Tax" doesn't work

the only "fair tax" in existance is taxation proportionaly to the margional utility of a dollar for a person.


You want to extract X 'utility' from every person (ie the tax burdeon on their purchasing power is the same)

you have to take their total income and apply the law of dimishing returns giving you equal dollars, we'll use a calculation based upon their income to determine the total number of dollars to tax to have taxed the same number of "Equal Dollars" from everyone, and make this into a proportion of their income - we'll call this operation the "Equal Dollar Function" EDF(x)

X=EDF(income)*income;

[Kazan]

Originally posted by Liberator
Yes, but that's the thing, a progressive tax isn't fair.  It punishes a person, sometimes heavily, for being successful.

wrong - see my previous post

you simply don't know economics, and neither does anyone who claims a progressive tax isn't fair

the only fair tax is taxation on equal dollars, so taxation as the same effect on everyone

[Liberator]

read the edit