Comments on: The Fair Tax will cause a depression http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html Documents that the world is becoming a demented delusional and dumb place Fri, 21 Nov 2008 18:01:31 +0000 http://wordpress.org/?v=2.6.2 By: nasrani http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2342 nasrani Wed, 19 Nov 2008 13:00:41 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2342 Tate, I think you've come to the right place. ;) Tate, I think you’ve come to the right place. ;)

]]> By: Don http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2339 Don Wed, 19 Nov 2008 05:11:53 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2339 Read my latest post. http://www.thepropheticyears.com/dddblog/2008/11/18/no-good-for-the-obama-years-just-bad-ugly-and-super-ugly.html Read my latest post.

http://www.thepropheticyears.com/dddblog/2008/11/18/no-good-for-the-obama-years-just-bad-ugly-and-super-ugly.html

]]> By: Tate http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2337 Tate Wed, 19 Nov 2008 01:08:42 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2337 I support a consumption tax over an income tax because it would encourage saving and investment, instead of an income tax that encourages tax evasion. I agree that a flat tax would be much better than our current socialist graduated income tax. I am looking for tax reform, but its not going to happen with President elect Obama. Everyone that I know supports Obama simply because of this "change". They have no idea what kind of "change" is coming. We may have to take a page out of Thomas Jefferson's book and have a revolution... I support a consumption tax over an income tax because it would encourage saving and investment, instead of an income tax that encourages tax evasion. I agree that a flat tax would be much better than our current socialist graduated income tax. I am looking for tax reform, but its not going to happen with President elect Obama. Everyone that I know supports Obama simply because of this “change”. They have no idea what kind of “change” is coming. We may have to take a page out of Thomas Jefferson’s book and have a revolution…

]]> By: nasrani http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2331 nasrani Tue, 18 Nov 2008 19:29:11 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2331 Yes, I agree. Also, I'm not dogmatically against either taxes on consumption or personal income. I prefer a system that is just and doesn't bring a lot of government intervention or intrusion on one's life. Most importantly, it should not distort the markets much and should not actually provide the State a lot more than is actually necessary for it to perform the jobs it is constitutionally qualified for. In certain European countries there have been proposals similar to the FairTax but it was evident that the reason they supported this had to do with its simplicity and most of all the fact that it would lead to higher State revenues. It was not actually driven by a belief in more consumer freedom or less government. In fact, some stated that they supported these proposals because it would raise more funding for government welfare programs. So you can exploit virtually any type of taxes, even those with a flat rate. What is really at stake here is the principles of economic freedom, man's right to the fruits of his labor, and limited government. Yes, I agree. Also, I’m not dogmatically against either taxes on consumption or personal income. I prefer a system that is just and doesn’t bring a lot of government intervention or intrusion on one’s life. Most importantly, it should not distort the markets much and should not actually provide the State a lot more than is actually necessary for it to perform the jobs it is constitutionally qualified for. In certain European countries there have been proposals similar to the FairTax but it was evident that the reason they supported this had to do with its simplicity and most of all the fact that it would lead to higher State revenues. It was not actually driven by a belief in more consumer freedom or less government. In fact, some stated that they supported these proposals because it would raise more funding for government welfare programs. So you can exploit virtually any type of taxes, even those with a flat rate. What is really at stake here is the principles of economic freedom, man’s right to the fruits of his labor, and limited government.

]]> By: Don http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2330 Don Tue, 18 Nov 2008 19:01:27 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2330 Actually I do not support a flat sales tax as in the "Fair Tax" because like I said it would end up being 50 percent not 23 as advertised and it would cause a depression. You are correct that all different tax proposals are really just shifting the tax burden somewhere else. The reality will be quite different than what they propose because the same people who put all the exemptions and give away programs in the the progressive incoming tax system would do the same thing with the sales tax system. They will shift back the burden so that poor pay nothing and the middle-class picks up their tab. The rich largely escape the burden of a sales tax because their consumption as a percentage of income is far less then the middle class. There has to be a general tax revolt before we can reign in the Federal government. Some State and local taxes are also out of control. None of us are for carbon taxes or energy taxes that will redistribute money from working methods to produce low cost energy to experimental high cost renewable energy systems and energy taxes to force us to conserve. But you can be sure they are coming with Obama. Should oil prices be low when Obama takes office I will bet they will tax it back up. Actually I do not support a flat sales tax as in the “Fair Tax” because like I said it would end up being 50 percent not 23 as advertised and it would cause a depression.

You are correct that all different tax proposals are really just shifting the tax burden somewhere else. The reality will be quite different than what they propose because the same people who put all the exemptions and give away programs in the the progressive incoming tax system would do the same thing with the sales tax system. They will shift back the burden so that poor pay nothing and the middle-class picks up their tab. The rich largely escape the burden of a sales tax because their consumption as a percentage of income is far less then the middle class.

There has to be a general tax revolt before we can reign in the Federal government. Some State and local taxes are also out of control.

None of us are for carbon taxes or energy taxes that will redistribute money from working methods to produce low cost energy to experimental high cost renewable energy systems and energy taxes to force us to conserve. But you can be sure they are coming with Obama. Should oil prices be low when Obama takes office I will bet they will tax it back up.

]]> By: nasrani http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2329 nasrani Tue, 18 Nov 2008 18:26:08 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2329 Then I suppose what you'd support is a flat sales tax. I wouldn't have a problem with that either. However, I hear so much talking about raising or lowering taxes, abolishing certain taxes altoghether, or introducing new taxes to replace older ones, and I think people are really just missing the point. Lowering or abolishing certain taxes would mean less government revenue, and how many people actually really want that at the end of the day, especially in our welfare states? Virtually none. They either support taxes or just want THEIR taxes lowered and have someone else pay for the government. Governments likewise are generally not truly willing to shrink the state and their powers, having less tax revenues. So what they do is propose alternative systems that sound better but really are aimed at eventually producing just as much if not more revenue for them. When are people going to understand that? Then I suppose what you’d support is a flat sales tax. I wouldn’t have a problem with that either. However, I hear so much talking about raising or lowering taxes, abolishing certain taxes altoghether, or introducing new taxes to replace older ones, and I think people are really just missing the point. Lowering or abolishing certain taxes would mean less government revenue, and how many people actually really want that at the end of the day, especially in our welfare states? Virtually none. They either support taxes or just want THEIR taxes lowered and have someone else pay for the government. Governments likewise are generally not truly willing to shrink the state and their powers, having less tax revenues. So what they do is propose alternative systems that sound better but really are aimed at eventually producing just as much if not more revenue for them. When are people going to understand that?

]]> By: Don http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2328 Don Tue, 18 Nov 2008 18:11:49 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2328 Good article Narani, Tate is right about the Fair Tax not being a VAT it is consumption tax type three in that article. The facts are for Federal taxes to be revenue neutral it will be about $22,000 for each family in the U.S. for any tax system. If we were actually charged what the government has been spending the last few years it would $40,000. Try putting that price on consumption and see what happens. Not to mention that they would have to exempt or rebate basic foods, medical etc. for the poor. That means some families would pay nothing forcing others to pay even more. The only reason we have income tax at all is to pay for big government and its programs. I would support a "Fair tax" if it were 10 percent on everything with no exceptions and the Federal government budget could not exceed the revenue. However, a Fair Tax today will start at about 30 percent and after the liberals got through with all the exceptions and tax rebates it would climb to 50 percent or more. Try buying that car or house then. It is a sure recipe for a downward spiral in consumption and wages - In other words it would bring a great depression. Good article Narani, Tate is right about the Fair Tax not being a VAT it is consumption tax type three in that article.

The facts are for Federal taxes to be revenue neutral it will be about $22,000 for each family in the U.S. for any tax system. If we were actually charged what the government has been spending the last few years it would $40,000. Try putting that price on consumption and see what happens. Not to mention that they would have to exempt or rebate basic foods, medical etc. for the poor. That means some families would pay nothing forcing others to pay even more.

The only reason we have income tax at all is to pay for big government and its programs. I would support a “Fair tax” if it were 10 percent on everything with no exceptions and the Federal government budget could not exceed the revenue. However, a Fair Tax today will start at about 30 percent and after the liberals got through with all the exceptions and tax rebates it would climb to 50 percent or more. Try buying that car or house then. It is a sure recipe for a downward spiral in consumption and wages - In other words it would bring a great depression.

]]> By: nasrani http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2327 nasrani Tue, 18 Nov 2008 17:54:29 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2327 Tate, I sure know that the Fair Tax is not a VAT. The reason I brought up the VAT issue is that you are arguing in favor of taxing consumption. I don't like progressive taxation and I am not convinced that taxing consumption of goods is a moral alernative to income taxation. After all, your income is meant to provide you a living. Consumption is a vital part of the economy, and whether you're rich or poor, you will always consume. What will happen if people get a choice by either buying a new high quality but taxed product or a 2nd handed product? It seems to me like this FairTax would reduce incentive for innovation. Also, what you buy and consume should not anybody's business - especially not that of the government. I'd rather have a flat income tax rate and be entirely free to buy whatever I want without having to get taxed progressively for what I buy and how much. Paying 23% to the state per product is still a heck of a lot, frankly, and even here in Europe with these high VATs we are not paying that much per product we buy either. In some cases it is 12% or 6%, though it varies from country to country. Yet despite all these taxes, our governments still progressively tax income up to over 40% and take part of your income away for social security/redistribution, not to mention what other special taxes apply to all sorts of other things. That being said, I believe the real problem is government overspending. I'm afraid the FairTax you propose will simply create a whole lot more bureaucracy. Sure glad we agree on the climate change topic though. Tate, I sure know that the Fair Tax is not a VAT. The reason I brought up the VAT issue is that you are arguing in favor of taxing consumption. I don’t like progressive taxation and I am not convinced that taxing consumption of goods is a moral alernative to income taxation. After all, your income is meant to provide you a living. Consumption is a vital part of the economy, and whether you’re rich or poor, you will always consume. What will happen if people get a choice by either buying a new high quality but taxed product or a 2nd handed product? It seems to me like this FairTax would reduce incentive for innovation. Also, what you buy and consume should not anybody’s business - especially not that of the government. I’d rather have a flat income tax rate and be entirely free to buy whatever I want without having to get taxed progressively for what I buy and how much. Paying 23% to the state per product is still a heck of a lot, frankly, and even here in Europe with these high VATs we are not paying that much per product we buy either. In some cases it is 12% or 6%, though it varies from country to country. Yet despite all these taxes, our governments still progressively tax income up to over 40% and take part of your income away for social security/redistribution, not to mention what other special taxes apply to all sorts of other things. That being said, I believe the real problem is government overspending. I’m afraid the FairTax you propose will simply create a whole lot more bureaucracy. Sure glad we agree on the climate change topic though.

]]> By: Tate http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2326 Tate Tue, 18 Nov 2008 16:59:58 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2326 The FairTax is entirely different than the VAT. The VAT is a sales tax that is added at every step in the production of retail items. It is hidden from consumers and makes a huge amount of money for the government. Consumers have no idea how much tax they on each sale in countries that have a VAT. "The VAT is the most efficient way to raise revenue for the government. It is also the most effective way to increase the size of government." - Milton Friedman. The FairTax is added only once at the point of sale. "When you hear someone referto the FairTax as a VAT, you can be sure youre listening to someone who hasnt done their research." And I agree on the climate change topic. It infuriates me when the government has projects such as the ethanol plan that waste my money trying to save the world from junk science. The FairTax is entirely different than the VAT. The VAT is a sales tax that is added at every step in the production of retail items. It is hidden from consumers and makes a huge amount of money for the government. Consumers have no idea how much tax they on each sale in countries that have a VAT. “The VAT is the most efficient way to raise revenue for the government. It is also the most effective way to increase the size of government.” - Milton Friedman. The FairTax is added only once at the point of sale. “When you hear someone referto the FairTax as a VAT, you can be sure youre listening to someone who hasnt done their research.”
And I agree on the climate change topic. It infuriates me when the government has projects such as the ethanol plan that waste my money trying to save the world from junk science.

]]> By: nasrani http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2325 nasrani Tue, 18 Nov 2008 15:56:40 +0000 http://www.thepropheticyears.com/dddblog/2007/12/31/the-fair-tax-will-cause-a-depression.html#comment-2325 I'm not sure why you'd want to abolish the income tax and start taxing consumption exclusively instead. What will happen next? They'll start taxing the hell out of consumption if income tax doesn't give them enough revenue, as they do in Europe where we have a VAT (Value Added Tax) that can even be as high as 21% in Belgium. I don't see what's so fair about that. Consumption ensures that corporations get a revenue. Prices should reflect their actual value. These taxes distort prices and require a whole bunch of additional administration to keep VAT separate. That means more gov't regulation and control, and a lot more attempts at fraud - which is totally understandable from my point of view. Also, there's absolutely no reason to believe that they will eventually abolish all other taxes. You still have local taxes, state taxes, and God only knows what they're going to suck out of you next with people like Obama in charge that believe in the climate change hype. I think you might be better off with a flat sales and income tax. And more importantly, government reform aimed at preventing government from overspending and having to raise taxes as a result in the first place. This rather lengthy but interesting article from the Mises Institute offers an critical view on taxing consumption: http://www.mises.org/story/1768. I’m not sure why you’d want to abolish the income tax and start taxing consumption exclusively instead. What will happen next? They’ll start taxing the hell out of consumption if income tax doesn’t give them enough revenue, as they do in Europe where we have a VAT (Value Added Tax) that can even be as high as 21% in Belgium. I don’t see what’s so fair about that. Consumption ensures that corporations get a revenue. Prices should reflect their actual value. These taxes distort prices and require a whole bunch of additional administration to keep VAT separate. That means more gov’t regulation and control, and a lot more attempts at fraud - which is totally understandable from my point of view.

Also, there’s absolutely no reason to believe that they will eventually abolish all other taxes. You still have local taxes, state taxes, and God only knows what they’re going to suck out of you next with people like Obama in charge that believe in the climate change hype.

I think you might be better off with a flat sales and income tax. And more importantly, government reform aimed at preventing government from overspending and having to raise taxes as a result in the first place.

This rather lengthy but interesting article from the Mises Institute offers an critical view on taxing consumption: http://www.mises.org/story/1768.

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