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 Prime95 2008-01-06 19:55

The Fair Tax is revenue-neutral. This is a debate over how to collect taxes rather than how much tax to collect.

The basics of the Fair Tax is to replace all income tax, corporate tax, inheritance tax, Social Security tax, etc. with a national sales tax. To protect the poor, each month everyone receives a check that covers the sales taxes for the basic necessities.

The upside is lobbyists and politicians can no longer pass tax breaks for special interests. Businesses make decisions based on economic sense rather than tax sense.

The downside is politicians cannot "fine-tune" the economy using tax policy. No home mortgage deductions to spur home ownership. No more tax breaks for impoverished oil companies to spur oil exploration. We'd have to repeal our big gas and carbon tax that fights global warming. Uh, wait a minute, maybe those last two examples weren't very good...

The other downside for some is the tax isn't graduated. Yes, the wealthy pay more because they spend more, but some feel they should shoulder even more of the burden.

There is also the previously mentioned worries over transitioning from one system to the other.

 jinydu 2008-01-06 22:26

[QUOTE=tha;122322]If the government (the guys YOU elected) spend the money wisely, for causes the people endorse, what does it matter how much taxes you have to pay? Else you would have to pay for it yourself anyway.[/QUOTE]

(I'm only commenting on these sentences, not the whole post)

But what about those cases when an individual does not endorse the causes of the government or the majority? What if 99% of the population believes that something is worth spending money on, but the other 1% disagrees? Wouldn't it be better to have the 99% spend and the 1% not spend, instead of forcing all 100% to spend? Remember, in an election with millions (or even thousands) of voters, the impact of a single vote is almost certainly negligible.

Ultimately, the argument's downfall is that it treats the populace as if it were a unified entity. Phrases like "the people want ___" are very misleading. When I say I want something, what I really mean is that there is a certain pattern of electrical and chemical activity going on in my brain. That is not at all the case when the people "want" something. In fact, "the people" doesn't even have a brain; although it is made up of individuals that each individually have brains. I see this mistake made over and over; logically speaking, it is just plain wrong to assume without further scrutiny that characteristics which hold for individuals even make sense for collections of individuals. If one insists on using the same word for individual wants and collective "wants", it would be more correct to call the former want$$_1$$ and the latter want$$_2$$, since they are fundamentally different.

Here is an example from math:

$$\mathbb{R}$$ (the set of real numbers) has the property that for any $$a,b\in\mathbb{R}$$, either $$a<b$$, $$a=b$$ or $$a>b$$.

However, this is the case for $$a,b\in P(\mathbb{R})$$ (the power set of the real numbers) because the relation $$<$$ doesn't even make sense on $$P(\mathbb{R})$$. Of course, one could try to define an order relation on $$P(\mathbb{R})$$. One could even call it $$<$$ (although one must then be careful not to confuse it with the $$<$$ defined on $$\mathbb{R}$$). But even then, there is no guarantee that all the properties of the old $$<$$ can be extended to the new $$<$$.

Caveat: I'm not saying I'm completely against the idea of high taxes to support large government programs. I just think that if such a thing is justifiable, that argument won't do it.

 jinydu 2008-01-07 01:02

[QUOTE=Prime95;122326]
The other downside for some is the tax isn't graduated. Yes, the wealthy pay more because they spend more, but some feel they should shoulder even more of the burden.[/QUOTE]

Does that necessarily have to be the case? Why not charge no tax for the first $$$x_1$$, $$y_2$$% for the next$$$x_2$$, $$y_3$$% for the next \$$$x_3$$, etc.?

 Prime95 2008-01-07 03:19

[QUOTE=jinydu;122345]Does that necessarily have to be the case??[/QUOTE]

No. In theory one could modify the Fair Tax in any number of ways. However, once you start modifying it you open the door wide for it to fall apart politically - and it doesn't have a very good chance of ever becoming law to begin with.

 garo 2008-01-07 11:38

[QUOTE]But what about those cases when an individual does not endorse the causes of the government or the majority? What if 99% of the population believes that something is worth spending money on, but the other 1% disagrees? Wouldn't it be better to have the 99% spend and the 1% not spend, instead of forcing all 100% to spend? Remember, in an election with millions (or even thousands) of voters, the impact of a single vote is almost certainly negligible.[/QUOTE]

The first problem with that argument is that some things can only be done collectively and when done benefit everyone including those who did not want it done in the first place.

The second problem is that it allows certain sections - namely the rich who pay most of the taxes - to dictate government spending possibly to the detriment of other poorer sections. You only have to look at the whole property taxes funding schools muddle in the US to see what I mean. That law simply entrenches the privileges of the rich and reduces social mobility.

Hence your proposition violates a fundamental principle which is the equality of opportunity.

 Brian-E 2008-01-07 15:06

In complete agreement with garo here, and I would go further and say that the things which can only be done collectively should also be done even when only some people would benefit from them - if it is a necessity for those people (not a luxury) in order for them to have a standard of living which meets basic requirements. In this category would fall for example public transport in areas where it cannot run profitably on affordable fares, and medical treatment for people with conditions which are expensive to treat. Public money is for necessities such as these which have nothing to do with "what the public wants".
On the other hand, if the government is mis-using public funds on unwise invasions of foreign countries and the like, then a change of leadership is long overdue.

 jinydu 2008-01-07 16:21

So your point is that it extremely important for all individuals to have a basic standard of living, so important that it is worth taking resources from some to accomplish this aim. Or in other words, there is a standard by which to evaluate the state of a collection of individuals that is independent of individual wishes. That seems to be self-consistent.

I wasn't intending to make a broad-based attack on this whole philosophy. Mainly, I was taking issue with the claim that an individual shouldn't be upset about high taxes because the tax money will be spent on causes the individual endorses. My point is that you cannot expect to accurately predict an individual's wishes based on those of the government, i.e. the argument "You elected them, therefore you agree with them" is inaccurate because the overwhelming majority of individuals have (individually) only an $$\epsilon$$ say in who gets elected. And as for the long paragraph that came after... well, it strictly speaking wasn't necessary but it seemed like as good a time as any to bring it up.

 ewmayer 2008-01-07 16:43

[quote=M29]Maybe if she wasn't married to Bill no one would have ever heard of him?[/quote]

Nice ... but I doubt you'll get many takers for it.

[QUOTE=Zeta-Flux;122252]I don't hate Huckabee. I just won't vote for him.

If you meant to ask why I won't vote for him, here are a few reasons:[/QUOTE]

At a purely primal-instinct level, you left off "fake smile which doesn't reach his eyes."

Watched about 30 seconds - as much as I could stand - of Hucksterbee vs the Massachusetts Moron in NH over the weekend - heh, those two so deserve each other. In a purely cynical [i]Schadenfreudlicher[/i] way I almost hope one of them wins, so he can inherit the economic and political sh*tstorm caused by 8 years of Bush's Divinely Guided [by God, at least the Texas-oil-baron version of such] presidency and Greenspan's Divinely Guided [by Greenspan's God, i.e. Ayn Rand] helm at the Fed.

[i][Of course the Maestro was also running the Fed during the Clinton years, but he didn't completely sell out to the notion of unfettered Randian Übercapitalism until he found his True Master. "Feel the power of the Dark Side you will..."].[/i]

 ewmayer 2008-01-07 18:04

Rupert Murdoch's efforts to rig the election

[url=http://www.seekingalpha.com/article/59228-ron-paul-supporters-claim-hand-in-news-corp-rout]SeekingAlpha.com: Ron Paul Supporters Claim Hand in News Corp 'Rout'[/url]

And a couple of nice articles on the history and mechanics of the Fair Tax:

[url=http://money.cnn.com/2008/01/05/pf/taxes/fair_tax.moneymag/index.htm?postversion=2008010710]CNN/Money.com: Behind Huckabee's radical 'Fair Tax'[/url]

Note that the idea is not in fact due to Huckabee or his economic advisors, as the second article explains:

[url=http://time-blog.com/curious_capitalist/2008/01/the_fair_tax_has_its_moment_in.html]Time.com: The Fair Tax has its moment in the sun. Could there be more to come?[/url]

 R.D. Silverman 2008-01-07 18:27

[QUOTE=Brian-E;122384]In complete agreement with garo here, and I would go further and say that the things which can only be done collectively should also be done even when only some people would benefit from them - if it is a necessity for those people (not a luxury) in order for them to have a standard of living which meets basic requirements. [/QUOTE]

And what do we do with lazy people who are content to live off the
public dole?

I DO want my taxes to go to people with legitimate needs. There are people
who can't work because they have legitimate medical problems. They
deserve help.

I DON'T want my taxes going to welfare recipients who failed to
educate themselves and who continue to fail at getting a job. I don't
want my taxes going to unwed teenage mothers who got pregnant so
they could "get away from mama", etc. etc.

I do not agree that everyone is entitled to a basic standard of living.
Some people are simply irresponsible. IMO, they can work or starve.

 S485122 2008-01-07 20:08

[QUOTE=garo;122375]... - namely the rich who pay most of the taxes - ...[/QUOTE]This is a misconception. In most european countries there is a gradual income tax system that should have the biggest incomes pay the highest rate of taxes. But that does not work well : it has been calculated in France for instance that a couple of minimum wagers pay a higher percentage of their income in taxes (income, sales and other taxes) than a couple where both are in middle management. Another mitigating factor that is often forgotten, is that the number of people in each income range decreases VERY rapidly with income, this means that the main share of taxes comes from lower to median revenues. Those are the categories to tax if you want some income as a government ! Finally people with higher revenues have many ways to avoid income taxes, wage earners have almost none.

Jacob

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