The 9-9-9 Plan

[Texacon]

Texacon,

Can you give me an example of some of the federal business-to-business taxes that the Fair Tax would eliminate?  I'm drawing a blank.

No I can't.  I have to take their word for it.  From what I've read and studied.

The other thing I really like about the Fair Tax is picking up all the slouchers who pay absolutely ZERO tax.  I mean NONE.  Drug dealers, hookers, people who work under the table, etc ...

it's time for everyone to have some skin in the game.  If you aren't paying taxes you shouldn't be allowed to vote.  Hell, I wish I could vote myself a pay increase.

KC

[rich_t]

it's time for everyone to have some skin in the game.

Amen.

[docstew]

I am against TAX CUTS!!!!

until we majorly reduce spending!
now we either straighten out what we are going to fund with taxes first and then tax accordingly or we reform to tax more fairly (keeping revenue ~same) to get everyone to feel the PAIN of taxes so that we can then lower spending.

Rugnuts, do you know what has happened every time the federal income tax rates were lowered? Tax revenues went up, in some cases by almost 100%.

Milton Friedman (ya know, that Nobel Laureate for economics) used to say "If you lower tax rates and revenue goes up, you didn't lower them enough."

[Rugnuts]

doc, with todays congress, revenue going up is their reason to justify new spending

and, you can raise taxes and revenue can go up
you can cut taxes and revenue can go down
you can raise taxes and revenue can go down

BUT you cant make the 15trillion go away with less revenue than expendtures. unless HYPERinflation sounds good to you. this is why i am more concerned with spending cuts over tax cuts. i could even endorse a 10-10-10 tax plan if it guaranteed debt reduction. we cant get major spending cuts pushed through until 100% of teh population has a stake in it. so we need tax reform startign with somehting that is tax neutral: fair tax, 9-9-9, even a flat tax gets us close enough.

[Rebel]

doc, with todays congress, revenue going up is their reason to justify new spending

and, you can raise taxes and revenue can go up

That never happens. You need to think about who pays the taxes and what they do when you raise their taxes. I.e., it isn't going out and continuing their spending patterns.

[docstew]

doc, with todays congress, revenue going up is their reason to justify new spending

and, you can raise taxes and revenue can go up
you can cut taxes and revenue can go down
you can raise taxes and revenue can go down

BUT you cant make the 15trillion go away with less revenue than expendtures. unless HYPERinflation sounds good to you. this is why i am more concerned with spending cuts over tax cuts. i could even endorse a 10-10-10 tax plan if it guaranteed debt reduction. we cant get major spending cuts pushed through until 100% of teh population has a stake in it. so we need tax reform startign with somehting that is tax neutral: fair tax, 9-9-9, even a flat tax gets us close enough.

You make a valid point, but Congress having no budgetary discipline shouldn't have a dog in this fight. Personally, I'd like to see 999 or FairTax enacted simultaneously with an across the board rewriting of the budget, only "mandatory spending" items are those mandated by the Constitution, everything else is on the table. Cap spending at 90% of previous years tax revenues after first full fiscal year after this is completed. Budget the other 10% to paying down debt.

[Erasmus]

None. They're passed on to the consumer.

So, instead of misreading my question intentionally and providing a smarmy non-answer, can you give me an example of direct business-to-business taxes that are passed on to consumers?  We talked about payroll and corporate income taxes, but the previous claim by Texacon was that those are not what constitutes the 22% number.  Those "don't matter" as he said.  So what are these other mysterious taxes? 

Question for you, are you opposed to a national sales tax to replace an income-based tax?

Not specifically, no.  It has to replace it, the 16th amendment has to be repealed, and 30% is way too high.  It should be advertised as what it is, a 30% sales tax, so that people know just how much money our government takes from us instead of calling it a 23% tax by switching around the math.  I'm thinking it will damage the housing market the way it's curently drafted as well.  People who buy homes will be financing taxes, which is horribly wasteful., even with a 20% down payment.  A flat tax seems more equitable to me than the way the Fair Tax is drafted.  You're even still exempting the bottom part of society from paying taxes with the prebate.  You claim that you don't like progressive taxes, but the Fair Tax has a progressive component.  Some portion of the people who aren't paying taxes now still won't be paying taxes under the Fair Tax.

If so, are you content with the current tax structure? Are you content with it being graduated AKA "progressive" which, IMO is REgressive?

No, it's not an either-or false dilemma you're trying to wedge me into.  Just because I'm not particularly happy with the "Fair" tax doesn't mean that I like the current system.  I've already told you this.

What are your plans, other than cutting spending and keeping the same BS structure in place?

Who said I want to keep the current system in place?  I said there were lots of ways to simplify the current system with a flat tax and eliminating earned income credits and whatnot.  Our government is, at this point, simply way too large.  Don't expect me to get overly excited about a plan that simply changes who collects the taxes and files the returns, especially when misleading advertising is being used.

I think an income-based tax is immoral. IMO, it is unAmerican that the federal and state governments get their cut before I do. It's immoral to have to pay to work.

How is it logically immoral?  If you don't pay to work, then you'll pay more to eat and buy things.  I'm not sure it's immoral.  I think it's fair that the more you make, the more you pay under an income tax structure, although it doesn't have to be progressive.  You pay more when you make more under a flat tax, too.  But as I mentioned, I'm not opposed to a national sales tax if it's not 30%.  If the Fair Tax is revenue neutral, there's no logical way that things will cost less after the tax is enacted and relative to one's income without payroll and income taxes.  I don't believe the math works that way.  All things said and done, things will cost more for the average American, even though they're not paying income taxes and payroll taxes.  That's not great for a "consumer-based" economy.

We're a consumer-based economy.

Which is a slight part of the problem.  There's a happy medium between being consumer-based and producer-based. 

At this nation's founding we had a consumption-based tax called tariffs...which were passed on to the consumer. The income-based tax is something straight out of the Communist Manifesto, and no, that's not  just an overly emotional argument, it is what it is. I want to see a consumption-based tax. I want all other taxes gone. I'm tired of the shell game. I'm tired of having to search my balls off for little write-offs just to get more of my own money back at the beginning of each year. I want a transparent, one and done structure. Spending is a completely separate issue from taxation, in the terms of this argument. Of course we need to get spending down.

At this nation's founding, they didn't need 30% tariffs.  Taxes need to be lowered in total eventually.  The sooner the better.  Spending is part of the discussion because it's difficult to keep lowering taxes and financing the rest of the wasteful spending with debt.  A revenue-neutral tax structure, no matter how simple, isn't going to magically ramp up the economy.  Come back with a 15% national sales tax, calculated as one would calculate any other state or local sales tax, and I might get excited.

[Rebel]

So, instead of misreading my question intentionally and providing a smarmy non-answer, can you give me an example of direct business-to-business taxes that are passed on to consumers?  

All of'em. Costs include taxes, penalties, support, logistics, compliance fees, even the cost of a Ricoh printer contract is added somewhere into the cost of a good you purchase. A company is going to make their bottom line, regardless. If they go into the red, they'll redo their calculations and adjust the prices of their goods/services accordingly.

[Erasmus]

All of'em. Costs include taxes,

Okay, so you disagree with Texacon on that point.

[Rebel]

Okay, so you disagree with Texacon on that point.

That costs of operation go into the final price a company sells their product for? Of course. Why wouldn't they? Why would they sell it below what it cost them to make?

[Erasmus]

That costs of operation go into the final price a company sells their product for? Of course. Why wouldn't they? Why would they sell it below what it cost them to make?

No, you disagree with him when he says this:

It doesn't matter what the home builders income (or any corporations income) is to be taxed.  That is not where the 22% embedded tax comes from.

That's why I asked him the question that you attempted to answer.

Let me see if I can put this another way:  The Constitution says that taxes should be equitable.  Everyone should pay the same rate.  The Fair Tax does not accomplish this in the least, with it's progressive component and the tax break for those that have more money than they can spend.  You can accuse me of being liberal, but it makes more sense to me to say that everyone pays a 18% flat tax and call it a day.    Warren Buffett's taxes are then pretty much the same as mine and the same as the people making much less than you and I.  Then it's equitable.  I simply don't think that can be acheived with the progressive Fair Tax.  The middle class will bear most of the burden as a percentage of their income, just like they do under the current system.

[Rebel]

No, you disagree with him when he says this:
That's why I asked him the question that you attempted to answer.

Let me see if I can put this another way:  The Constitution says that taxes should be equitable.  Everyone should pay the same rate.  The Fair Tax does not accomplish this in the least, with it's progressive component and the tax break for those that have more money than they can spend.  You can accuse me of being liberal, but it makes more sense to me to say that everyone pays a 18% flat tax and call it a day.    Warren Buffett's taxes are then pretty much the same as mine and the same as the people making much less than you and I.  Then it's equitable.  I simply don't think that can be acheived with the progressive Fair Tax.  The middle class will bear most of the burden as a percentage of their income, just like they do under the current system.

Where are you seeing a progressive component in the Fair Tax? Everyone pays the same percentage. If some pay more money, its because they purchased more goods, but that's still the same percentage. There is no progressive component in the Fair Tax. It's a flat sales tax.

[Rugnuts]

That never happens. You need to think about who pays the taxes and what they do when you raise their taxes. I.e., it isn't going out and continuing their spending patterns.

you cant say revenue never increases when taxes go up. thats lunacy. when you do, your blending different taxes and the revenues they create.

1915-1916 income tax rates went up, income tax revenue tripled. (i used it because it was the first increase i could find using google)
to go from 0% sales tax to 1% sales tax, sales tax revenue increases.
also over all tax revenue will almost always go up with a general GDP increase, but revenue/GDP ratio will drop with tax cuts.

[Erasmus]

Where are you seeing a progressive component in the Fair Tax? Everyone pays the same percentage. If some pay more money, its because they purchased more goods, but that's still the same percentage. There is no progressive component in the Fair Tax. It's a flat sales tax.

They have a carveout for low income folks.  They exempt a certain amount from the Fair Tax.  As you spend more money, your effective rate increases.  Everyone will not pay the same percentage of total spending.

The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive.

LINK-FairTax.org

I thought you researched this?

[Rebel]

They have a carveout for low income folks.  They exempt a certain amount from the Fair Tax.  As you spend more money, your effective rate increases.  Everyone will not pay the same percentage of total spending.
LINK-FairTax.org

I thought you researched this?

The PREbate goes to everyone, not just lower income. There is a progressive portion in the 9-9-9 with empowerment zones, but the Fair Tax is applicable equally. I'm not worried about effective tax rates. Effective tax rates are fluid, people's pay changes, there are uncommon purchases made at times, etc. I'm worried about actual tax rates. You're starting to sound like you believe in spreading the wealth out of fairness.

[Rugnuts]

I'm not worried about effective tax rates. Effective tax rates are fluid, people's pay changes, there are uncommon purchases made at times, etc. I'm worried about actual tax rates.

i agree with that

[DumbAss Tanker]

to go from 0% sales tax to 1% sales tax, sales tax revenue increases.

It's actually a lot more complex than that, and the outcome therefore much more uncertain and so a huge creator of divisive arguments between people who are all fundamentally well-intentioned (Also between various sleazy liars too, but this isn't a Democrat board). 

What you say is true IF the sales and pre-tax price of the goods remain constant.  However, in the real world, that 1% increase raises the price of the goods to the end consumer by 1%, which changes buying behavior, and in a competitive market, possibly pricing behavior.

Ignoring the sliding frame of reference for value that inflation causes for now, on the buying side, that increase may lead to lower consumption by the consumers, which could even result in a loss of revenue.

On the pricing side, if the sellers have enough profit margin to support it, they may cut prices by 1% or otherwise try to neutralize the increase in the end price (Group discounts, etc.), and if the sellers succeed in keeping their sales constant through that, it would result in no net gain in revenue.

The classic Sim City game provides a great analog of what happens when you try to screw around with effective tax rates...too low and the problems get out of hand because you can't maintain infrastructure and fire/police services, so everyone leaves your sucky town and the tax revenues fall; too high and the Sims start moving out of town (Searching for alternatives to paying their taxes) and your tax revenue plummets as well.   

[Rebel]

Liberals and liberal economists try to use that "effective tax rate" bullshit as a means to say people aren't paying their "fair share". I don't buy it. Neither does this "obvious" dumbass:

http://video.cnbc.com/gallery/?video=3000049765#

...but what does he know, he's just the founder and CEO of FedEx.


I'm going to use improper English here to make a point, but we have GOT to get our tax system down to where it belongs, the individual, and stop playing the damn shell game of taxing corporations, who pass them on to us, on top of our income tax. We're losing jobs for many of reasons, but one is we have the highest damn corporate tax rate in the industrialized worldand no, I don't give a damn about GE and their sweetheart Obama deal, I'm talking about businesses in general. The GE BS is part of the problem. Remove the loopholes by ending the corporate tax rate.

[Rugnuts]

It's actually a lot more complex than that, and the outcome therefore much more uncertain and so a huge creator of divisive arguments between people who are all fundamentally well-intentioned. 

What you say is true IF the sales and pre-tax price of the goods remain constant.  However, in the real world, that 1% increase raises the price of the goods to the end consumer by 1%, which changes buying behavior, and in a competitive market, possibly pricing behavior.

Ignoring the sliding frame of reference for value that inflation causes for now, on the buying side, that increase may lead to lower consumption by the consumers, which could even result in a loss of revenue.

On the pricing side, if the sellers have enough profit margin to support it, they may cut prices by 1% or otherwise try to neutralize the increase in the end price (Group discounts, etc.), and if the sellers succeed in keeping their sales constant through that, it would result in no net gain in revenue.

The classic Sim City game provides a great analog of what happens when you try to screw around with effective tax rates...too low and the problems get out of hand because you can't maintain infrastructure and fire/police services, so everyone leaves your sucky town and the tax revenues fall; too high and the Sims start moving out of town (Searching for alternatives to paying their taxes) and your tax revenue plummets as well.   

i absolutely loved playing sim city
and i agree with what your getting at up above. easier said "when changes rates, there are changes in the tax base, and that affects the revenue total"

BUT, people who say "when you lower tax rates, revenue always goes up" and vice versa "when you raise tax rates, revenue always goes down" are either lunatics or lying. thats what i was getting at.

[Rugnuts]

Liberals and liberal economists try to use that "effective tax rate" bullshit as a means to say people aren't paying their "fair share". I don't buy it.  

yes, there was an email back n forth with my state congressman and some dolt throwing effective tax rate numbers into the argument and my congressman rebutted with a stupid "well you see things your way and ill see things my way" personally i think it hurt him. he should have called out the reality of what the dolt was saying and WHY he was using "effective" rates. dolt's piece

 

[DumbAss Tanker]

i absolutely loved playing sim city

Me too!  The sweet spot for the tax rate seemed to be 7% or under, FWIW.

And Rebel, "Effective tax rate" is a legit and useful term as long as you're not dealing with con artists (Such as Libs and DemonRats, but also a lot of corporate lobbyists too), since with our "Progressive" (cough) income tax scheme, only a tax accountant would have a clear idea what someone was actually paying given just their income and their tax bracket.  It's very easy to misuse because the term isn't necessarily limited to just the income taxes involved, but can roll in FICA (which isn't progressive at all, but does have a roof on the amount from which it is collected), and even totally extraneous bullshit like estimated annual sales, use, excise, and other transactional taxes.

[Erasmus]

The PREbate goes to everyone, not just lower income. There is a progressive portion in the 9-9-9 with empowerment zones, but the Fair Tax is applicable equally. I'm not worried about effective tax rates. Effective tax rates are fluid, people's pay changes, there are uncommon purchases made at times, etc. I'm worried about actual tax rates. You're starting to sound like you believe in spreading the wealth out of fairness.

Yes, just like the current income tax rates go to everyone, too, up to a point.  The more you spend, the closer your rate gets to 30%.  It's the way the math works.  There will STILL be some people who spend less than the prebate and end up paying no federal taxes, just like there are people under the current system that don't pay any federal taxes.  There will be some that spend 50% more than the prebate and their effective rate will be 10%.  There will be some that spend 100% over the prebate and their rate will be 15%.  Then there will be those that spend a ton (because they have a ton) and their rate is very close to 30%.  That's progressive taxation.  They admit this on their web site and here you sit, denying it, or at least misunderstanding it.

And you've been sounding like you simply don't know what you're talking about.  It's painfully obvious you haven't researched it, aren't capable of doing basic math, and talk out of your ass even when provided links to the Fair Tax web site.  I certainly hope you're not the typical Fair Tax supporter and that others who support it are at least familiar with it and know how it works and can do the math.

[DumbAss Tanker]

Jeeze, guys, put the knives away, save it for the Democrats.

[Texacon]

Erasmus, I'm back!  Heh.  I had a lot on my plate yesterday and this morning.  Work before play.

I haven't had a chance to read all the posts to bring me up to speed but I did a quick scan and I need to clarify something I posted;

No, I don't believe the builders taxes are what they are talking about in the 22% embedded tax.  It goes further than that.

Take for example the lumber used to build the home.  It wasn't always lumber.  At one point it was a tree on someone's land and had to be purchased, cut down, hauled off, taken to mill, shipped to the lumber yard then ultimately sold to the builder.

In that process there were taxes added along the way that EVERYONE pays for as they move along but in the end the only person paying all those taxes (and other embedded costs like permits) is the person who paid to have the home built.

Yeah, you might include the paltry sum of taxes the builders paid.  (I know it's not paltry if coming out of your pocket) but there are a whole slew of things that go into building a home.  The lumber was the easy pick.  All the rest of them have the same 'road to travel' so to speak.  A lot of that could be removed.

KC

[Texacon]

http://videosift.com/video/Not-a-Single-Person-Alive-Knows-How-to-Make-a-Pencil

Milton Friedman explains how there is not a single person on earth who knows how to make a pencil.

You may or may not find this video relevant.  I think it fits.

KC