A sales tax is a way of shifting the burden of taxation onto those groups in society who spend a large proportion of their income.
Guess which groups those might be.
A sales tax is a way of shifting the burden of taxation onto those groups that spend the largest dollar amounts. It has nothing to do with proportions. A person who spends $39,000 of their $40,000 per year pays less than someone who spends $500,000 of their $1.5M per year.
And the burden would hurt the lower and middle classes the most because the upper class generally doesn't spend all of their money while the lower and middle classes often do. The income tax is less of a burden on the middle class than a "fairtax" would be. Because of a lack of tax on businesses, the large business owners would benefit and have to pay less overall than the much larger middle class.
fairtax?
Newspeak doubleplusgood!
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
Yes, I'm sure there won't be any issues with collecting money at all if we use the honor system.
You don't know what the fair tax is then. I didn't say flat tax. The fair tax gets rid of income tax, therefore removing the need for the IRS. Duh.
It's because you're using dumb fucking sloganeering terms instead of calling your national sales tax what it is. Just a few years ago, the "Fair Tax" mantle was being used for a flat tax. In both cases, it's absolutely retarded to use talking points to describe the tax system you're advocating.
A sales tax is a way of shifting the burden of taxation onto those groups in society who spend a large proportion of their income.
Guess which groups those might be.
A sales tax is a way of shifting the burden of taxation onto those groups that spend the largest dollar amounts. It has nothing to do with proportions. A person who spends $39,000 of their $40,000 per year pays less than someone who spends $500,000 of their $1.5M per year.
Math really kicked your ass in school, didn't it? Yes, person A pays less than person B. But the cost of a sales tax weighs heavier on person A.
No, I did pretty well, thank you. Which means I understand what a proportion means. It has nothing to do with proportions, but overall spending.
Dude are you a moron? Itylus says the burden of a sales tax system is unfairly most of a burden on people who spend most of their income (who usually don't make much money).
You then say he's wrong because the people who don't make as much and spend greater percentages aren't contributing as much of a dollar amount as those who are rich... wtf?
the burden of tax-paying in a national sales tax system still falls hardest on poorer people who are spending large portions of their income.
A sales tax is a way of shifting the burden of taxation onto those groups in society who spend a large proportion of their income.
Guess which groups those might be.
A sales tax is a way of shifting the burden of taxation onto those groups that spend the largest dollar amounts. It has nothing to do with proportions. A person who spends $39,000 of their $40,000 per year pays less than someone who spends $500,000 of their $1.5M per year.
Math really kicked your ass in school, didn't it? Yes, person A pays less than person B. But the cost of a sales tax weighs heavier on person A.
No, I did pretty well, thank you. Which means I understand what a proportion means. It has nothing to do with proportions, but overall spending.
Fuck. Let's go over this one more time.
We have two people - Joe Poor and John Rich. Joe makes approx. $35,000/year, while John makes $150,000. Now, since Joe and John are humans, they have certain needs, like food, shelter, clothes. transportation, and so on. Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income. This expenditure is non-negotiable - its all essentials. In comparison, John has to spend money on the same things, but since he makes almost four times as much, he opt to buy higher quality items - he has a house in the suburbs, he buys food from a smaller upscale grocer that is of better quality, he has a car that is of recent vintage. This doesn't come cheap - John pays twice what Joe pays for these things. In addition, John spends about $10,000 a year on luxuries, while Joe spends only $1,000.
So, for Joe, he's spending $31K, while John is spending $70K. Now, let's toss a 10% sales tax on them both. For Joe, this means that he is assessed $3100 in tax. In other words, Joe is suddenly paying almost all his salary out. And he has few options to reduce that load - cutting out luxuries is only going to save him $1100, and because he's spending the absolute lowest he can, there's nowhere else he can go to save money. In comparison, John pays signifigantly more in tax - he pays $7000, over double. But when you look at the resources that John has, that $7000 is at worst only a moderate hit. Plus, if John really needed to, he's got a lot of places he can tighten his belt.
So yes, it's absolutly about proportions. It's about the proportion of one's income that the sales tax costs, and the simple fact that for the wealthy, even though they pay out more, it is MUCH less.
A sales tax is a way of shifting the burden of taxation onto those groups in society who spend a large proportion of their income.
Guess which groups those might be.
A sales tax is a way of shifting the burden of taxation onto those groups that spend the largest dollar amounts. It has nothing to do with proportions. A person who spends $39,000 of their $40,000 per year pays less than someone who spends $500,000 of their $1.5M per year.
Math really kicked your ass in school, didn't it? Yes, person A pays less than person B. But the cost of a sales tax weighs heavier on person A.
No, I did pretty well, thank you. Which means I understand what a proportion means. It has nothing to do with proportions, but overall spending.
Fuck. Let's go over this one more time.
We have two people - Joe Poor and John Rich. Joe makes approx. $35,000/year, while John makes $150,000. Now, since Joe and John are humans, they have certain needs, like food, shelter, clothes. transportation, and so on. Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income. This expenditure is non-negotiable - its all essentials. In comparison, John has to spend money on the same things, but since he makes almost four times as much, he opt to buy higher quality items - he has a house in the suburbs, he buys food from a smaller upscale grocer that is of better quality, he has a car that is of recent vintage. This doesn't come cheap - John pays twice what Joe pays for these things. In addition, John spends about $10,000 a year on luxuries, while Joe spends only $1,000.
So, for Joe, he's spending $31K, while John is spending $70K. Now, let's toss a 10% sales tax on them both. For Joe, this means that he is assessed $3100 in tax. In other words, Joe is suddenly paying almost all his salary out. And he has few options to reduce that load - cutting out luxuries is only going to save him $1100, and because he's spending the absolute lowest he can, there's nowhere else he can go to save money. In comparison, John pays signifigantly more in tax - he pays $7000, over double. But when you look at the resources that John has, that $7000 is at worst only a moderate hit. Plus, if John really needed to, he's got a lot of places he can tighten his belt.
So yes, it's absolutly about proportions. It's about the proportion of one's income that the sales tax costs, and the simple fact that for the wealthy, even though they pay out more, it is MUCH less.
Thank you for detailing what I already understood. The comment originally made was it shifted tax burdens to those who spent more of their income. That is false.
That is not to say that the portion of their income spent on tax is the same, which is a different part all together. There's an argument to be made that a sales tax like this, which wouldn't be assessed on foodstuffs and other items of necessity, will be more balanced than the story you put forth. A person on a smaller income spends a greater proportion of their income on items that are non-taxable, which exempts a greater proportion of their spending from taxes.
The problem I have with a sales tax piece is this: it removes many incentives for ownership of property. A wealthy person buying a 1million dollar home is going to spend a shitload on taxes, likely as much or more than many people will spend on their home. In some parts of the country, a million won't buy you a mansion, but a 3 bedroom, 18 sq ft track home.
Please note, I'm not arguing that the sales tax is right, just that it has nothing to do with proportions of income in execution.
The easy reason pork wasn't but 2 percent is because defense was so high for the wars overseas.
Wait a minute. Aren't they not including war funding in spending bills? Does someone want to back me up, or did I just make this up?
You are not making things up. As far as i can remember, not one single iota of funding for this war has come in the form of standard budgetary proceedings. It has ALL been done on supplimentary funding.
That is how we are able to keep the "projected defecit" so low
Please note, I'm not arguing that the sales tax is right, just that it has nothing to do with proportions of income in execution.
You would be terribly wrong, in order for your hyopthesis to be true.
You would need a taxing authority to determine:
A: Which things were taxable.
B: The proportion of which things were taxable.
C: What is defined as luxuary.
Sales taxes have a terrible time of exempting "nessesary goods" and almost always end up taxing the little guy harder, since they spend more.
E.G. Poor guy buys a car, Rich guy buys a car.
They are both cars, one is worth 10k and the other worth 30k.
How much of each car is deductable? Is a car even nessesary? Do they deduct the costs of public transporation out of the car, since that is what they are spending over what is nessesary? Can they get by with public transportation?
How would you tax each individual item in this manner so as to not need an enforcement agency?
Because in order to make it right by your supposition, this is what MUST happen.
Please note, I'm not arguing that the sales tax is right, just that it has nothing to do with proportions of income in execution.
You would be terribly wrong, in order for your hyopthesis to be true.
You would need a taxing authority to determine:
A: Which things were taxable.
B: The proportion of which things were taxable.
C: What is defined as luxuary.
Sales taxes have a terrible time of exempting "nessesary goods" and almost always end up taxing the little guy harder, since they spend more.
E.G. Poor guy buys a car, Rich guy buys a car.
They are both cars, one is worth 10k and the other worth 30k.
How much of each car is deductable? Is a car even nessesary? Do they deduct the costs of public transporation out of the car, since that is what they are spending over what is nessesary? Can they get by with public transportation?
How would you tax each individual item in this manner so as to not need an enforcement agency?
Because in order to make it right by your supposition, this is what MUST happen.
Not necessarily. Certain items are already exempt from sales tax (see: food), and I don't think I ever argued that it would rid us of an enforcement agency. You've confused me with someone else.
My only point was this:
Poor guy buys 10k worth of car.
Rich guy buys 30k worth of car.
Their total incomes are not an issue when it comes to the taxation, just the value of the item. You could easily see a rich person buying a 10k car and a poor person buying a 30k car. Their incomes determine what is within their buying power, but is never used to determine how much they are taxed.
Their incomes determine what is within their buying power, but is never used to determine how much they are taxed.
:roll:
Also, food isnt taxed, but a large part of what being wealthy means is that you are able to purchase better and more expensive food.
The things that are nessesities[Home, Transportation, Food, Education, Clothing] doesnt just stay at a set level of cost for the rich and the poor. So you are either taxing all quality levels the same, or you have a monumental task ahead of you.
All of these things you have to pay for, so, for your stipulation to be correct, you need a system that will determine how much and of what is or isnt a luxary and so needing to be taxed.
Its the old "homeowners exemption" for bankruptcy again. Right before you go bankrupt, you but a 30 million dollar house.
Ooops, seems that debtors cant go after a primary residence in bankruptcy proceedings... Wonder how that happened.
The point is that you cant just say that you can tax the nessesities and not have an issue with the tax burden. Not to mention the savings incentives[something that rich folk are able to do much easier than poor folk]
Their incomes determine what is within their buying power, but is never used to determine how much they are taxed.
:roll:
Also, food isnt taxed, but a large part of what being wealthy means is that you are able to purchase better and more expensive food.
The things that are nessesities[Home, Transportation, Food, Education, Clothing] doesnt just stay at a set level of cost for the rich and the poor. So you are either taxing all quality levels the same, or you have a monumental task ahead of you.
All of these things you have to pay for, so, for your stipulation to be correct, you need a system that will determine how much and of what is or isnt a luxary and so needing to be taxed.
Its the old "homeowners exemption" for bankruptcy again. Right before you go bankrupt, you but a 30 million dollar house.
Ooops, seems that debtors cant go after a primary residence in bankruptcy proceedings... Wonder how that happened.
The point is that you cant just say that you can tax the nessesities and not have an issue with the tax burden. Not to mention the savings incentives[something that rich folk are able to do much easier than poor folk]
The thing is, I don't think you and I disagree. My argument was on the wording of the original comment (and I don't even think you were the one to make it), not whether it's a good choice or not.
Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income.
If you feel you're "poor" and you're spending 30k on "essentials" you're not doing it right, short of some kind of major medical problem. I could live quite comfortably on 35k a year, assuming I was supporting only myself.
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HachfaceNot the Minister Farrakhan you're thinking ofDammit, Shepard!Registered Userregular
Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income.
If you feel you're "poor" and you're spending 30k on "essentials" you're not doing it right, short of some kind of major medical problem. I could live quite comfortably on 35k a year, assuming I was supporting only myself.
That's quite an assumption.
Also, these numbers are more or less arbitrary meant to illustrate a point. Don't get too hung up on them.
Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income.
If you feel you're "poor" and you're spending 30k on "essentials" you're not doing it right, short of some kind of major medical problem. I could live quite comfortably on 35k a year, assuming I was supporting only myself.
That's quite an assumption.
Also, these numbers are more or less arbitrary meant to illustrate a point. Don't get too hung up on them.
Agreed. We were just using them as illustrations. 35K for a single person is nearly 4 times the poverty line.
Not necessarily. Certain items are already exempt from sales tax (see: food), and I don't think I ever argued that it would rid us of an enforcement agency. You've confused me with someone else.
My only point was this:
Poor guy buys 10k worth of car.
Rich guy buys 30k worth of car.
Their total incomes are not an issue when it comes to the taxation, just the value of the item. You could easily see a rich person buying a 10k car and a poor person buying a 30k car. Their incomes determine what is within their buying power, but is never used to determine how much they are taxed.
A lot of the issue is where people end up on the debt wheel. If you get into much debt then that is going to constantly drain your money and make it difficult to move upwards, while if you have more growth in your assets than your debts then you will start moving up without having to directly work for it.
There's a lot to be said for living under your means and getting on the plus side of debt, but when you are at the bottom end of the spectrum there is a lot less room for you to do that. A national sales tax like this would worsen the problem as it magnifies the proportion of the spending on goods of the total income of the lower classes, and gives them less room to deal with debt/investment. It definitely hits the rich a lot easier than a progressive income tax without too many holes.
Of course you can have exemptions for those in poverty and for certain types of spending so the most poor don't have to pay, but all that does is shift the "most screwed" point a little higher into the lower middle or middle classes.
Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income.
If you feel you're "poor" and you're spending 30k on "essentials" you're not doing it right, short of some kind of major medical problem. I could live quite comfortably on 35k a year, assuming I was supporting only myself.
That depends heavily on where you live. The cost of living has a pretty high variation over the breadth of the country.
The thing is, I don't think you and I disagree. My argument was on the wording of the original comment (and I don't even think you were the one to make it), not whether it's a good choice or not.
The original comment was mine.
If you have a progressive income tax system, and you reduce the amount of tax you collect through that income tax, and make up the shortfall by collecting a sales tax, so that you are collecting the same amount of tax in total, you will shift the burden of taxation away from those who spend less of their income and toward those who spend more of their income. If you include exceptions on that sales tax for food, the picture becomes a little more complex, but in terms of what is happening at the top of the scale it will be basically the same. I can show this with hypothetical numbers if you like but I imagine it's self-evident enough that I don't need to.
I suspect your objection was to the word "shift", which assumes a progressive income tax system is the thing that is being replaced by the sales tax, which, given that a progressive income tax is the main form of tax collection where we each variously live, seems like a reasonable assumption to me, but I did leave it unstated. If your objection is to some other part of the wording, let me know and I'll see what I think. :P
I'll admit I've only read the last few pages, so pardon me if this has been mentioned...but doesn't the FairTax (at least generally the way I've heard it described) deal with the whole regressive aspect by using a set refund for everybody? So instead of exempting things like food or clothing (and then maybe trying to differentiate between JC Penny/Mac and Cheese and Nordstrom/Caviar) you'd just tax everything and refund everybody for some set amount based on how much a person generally has to spend on "essentials" (cheap clothing, food, etc.) each year.
At which point most in the middle class (particularly the lower end) would end up with a small tax burden (since most of the sales tax they pay over the year would be offset by this fixed refund) and many in the lower class would end up with no tax at all...or even a negative tax rate.
Especially since this refund would be fixed per-person (I believe differentiating between minors and adults), not based on actual tax paid...so if somebody could find a way to live for less than the assumed cost of "essentials" (or had to find a way, because they're just that poor) they'd actually be able to get back more than they paid. And given that the supposed appeal of this system is simplicity, it'd make no sense to waste any effort trying to prevent this.
Not that I think this system would work overall, but the idea of fixed refunds (which could actually be sent out at the beginning of each year, or every six months, or whatever we wanted to do) would probably alleviate the main problem I'm seeing mentioned here, which is the regressive nature of it.
You would then need to define how much the average person needs. Are we assuming that people need a healthy diet, or can they just live off of ramen noodles? The money would almost certainly not be enough for expenses such as car troubles and similar stuff. In order to determine what to give and prevent fraud such as people claiming more dependents than they have, there would still need to be a large IRS.
Under the FairTax, households would receive a monthly tax rebate (known as a "prebate" as it would be paid in advance) equal to the estimated total FairTax paid on poverty level spending according to the poverty guidelines published by the U.S. Department of Health and Human Services.[23] The poverty level guidelines vary by family size and represent the cost to purchase household necessities. The rebate would be paid in twelve monthly installments equal to 23% of poverty level spending for each household size and is meant to eliminate the taxation of necessities and make the plan progressive.[2] The formula used to calculate rebate amounts would be adjusted for inflation. To become eligible for the rebate, households would register once a year with their sales tax administering authority, providing the names and social security numbers of each household member. The Social Security Administration would disburse the monthly rebate payments in the form of a paper check via U.S. Mail, an electronic funds transfer to a bank account, or a “smartcard” that can be used much like a bank debit card.[23] The Beacon Hill Institute estimated the overall rebate cost to be $489 billion (assuming 100% participation).[25]
I'll admit I've only read the last few pages, so pardon me if this has been mentioned...but doesn't the FairTax (at least generally the way I've heard it described) deal with the whole regressive aspect by using a set refund for everybody? So instead of exempting things like food or clothing (and then maybe trying to differentiate between JC Penny/Mac and Cheese and Nordstrom/Caviar) you'd just tax everything and refund everybody for some set amount based on how much a person generally has to spend on "essentials" (cheap clothing, food, etc.) each year.
At which point most in the middle class (particularly the lower end) would end up with a small tax burden (since most of the sales tax they pay over the year would be offset by this fixed refund) and many in the lower class would end up with no tax at all...or even a negative tax rate.
Especially since this refund would be fixed per-person (I believe differentiating between minors and adults), not based on actual tax paid...so if somebody could find a way to live for less than the assumed cost of "essentials" (or had to find a way, because they're just that poor) they'd actually be able to get back more than they paid. And given that the supposed appeal of this system is simplicity, it'd make no sense to waste any effort trying to prevent this.
Not that I think this system would work overall, but the idea of fixed refunds (which could actually be sent out at the beginning of each year, or every six months, or whatever we wanted to do) would probably alleviate the main problem I'm seeing mentioned here, which is the regressive nature of it.
I suppose. Though again, we're talking about actually taking money in through sales tax (rather than income).
You would then need to define how much the average person needs. Are we assuming that people need a healthy diet, or can they just live off of ramen noodles? The money would almost certainly not be enough for expenses such as car troubles and similar stuff. In order to determine what to give and prevent fraud such as people claiming more dependents than they have, there would still need to be a large IRS.
The COA does vary, but I believe most of the variation is in housing and transportation. I don't think a bottle of ketchup costs that much more in California than it does in Wyoming. So really, the largest thing you'd have to adjust for would be housing and the gov't theoretically already has data on the average cost for that by zip code. It could theoretically be done, though again at that point you're introducing complexity to the system and the ability for people to "cheat" (claiming residences in other zip codes, for instance).
But for dependents? Not really an issue. Issue a set amount for each SSN, based on whether they're an adult or minor. For minors, issue it to the legal guardian.
Really though, I'm wasting my time. Pulling in as much money as our government needs from the number of people we have with the income disparity we have without fucking over people that can't afford to be fucked over takes a more complicated system than the FairTax allows for.
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HachfaceNot the Minister Farrakhan you're thinking ofDammit, Shepard!Registered Userregular
I'll admit I've only read the last few pages, so pardon me if this has been mentioned...but doesn't the FairTax (at least generally the way I've heard it described) deal with the whole regressive aspect by using a set refund for everybody? So instead of exempting things like food or clothing (and then maybe trying to differentiate between JC Penny/Mac and Cheese and Nordstrom/Caviar) you'd just tax everything and refund everybody for some set amount based on how much a person generally has to spend on "essentials" (cheap clothing, food, etc.) each year.
At which point most in the middle class (particularly the lower end) would end up with a small tax burden (since most of the sales tax they pay over the year would be offset by this fixed refund) and many in the lower class would end up with no tax at all...or even a negative tax rate.
I'm woefully undereducated when it comes to economics, but it seems to me that the basic problem with this system is that it simply would not generate enough revenue for the federal government to function.
The COA does vary, but I believe most of the variation is in housing and transportation. I don't think a bottle of ketchup costs that much more in California than it does in Wyoming. So really, the largest thing you'd have to adjust for would be housing and the gov't theoretically already has data on the average cost for that by zip code. It could theoretically be done, though again at that point you're introducing complexity to the system and the ability for people to "cheat" (claiming residences in other zip codes, for instance).
Which would end up requiring a large IRS. Fairtax supporters expect the IRS to magically go away with a Fairtax and no cheating to occur. So the advantage of the Fairtax over the current system that allows us more control over what is taxed in order to make it less likely for poor people to get screwed is what? The only major thing I can think of is the whole "IT IS MAH MONEY!" stuff.
The COA does vary, but I believe most of the variation is in housing and transportation. I don't think a bottle of ketchup costs that much more in California than it does in Wyoming. So really, the largest thing you'd have to adjust for would be housing and the gov't theoretically already has data on the average cost for that by zip code. It could theoretically be done, though again at that point you're introducing complexity to the system and the ability for people to "cheat" (claiming residences in other zip codes, for instance).
Which would end up requiring a large IRS. Fairtax supporters expect the IRS to magically go away with a Fairtax and no cheating to occur. So the advantage of the Fairtax over the current system that allows us more control over what is taxed in order to make it less likely for poor people to get screwed is what? The only major thing I can think of is the whole "IT IS MAH MONEY!" stuff.
The federal government could function with a lot less cash.
I mean, I know this is state rather than federal, but have you been to a DMV lately? Do you realize how much those people get paid?
Has there ever been a clear cut case of the system being made to function for a great deal less? I know it might seem a little demanding to desire a broad conviction like this to have some emperical backing.
The federal government could function with a lot less cash.
I mean, I know this is state rather than federal, but have you been to a DMV lately? Do you realize how much those people get paid?
Has there ever been a clear cut case of the system being made to function for a great deal less? I know it might seem a little demanding to desire a broad conviction like this to have some emperical backing.
I've seen stats here and there about the amount of money per dollar taxed that is lost to bureaucracy, but it seems to vary. I was able to find some findings from a congressional education committee that referenced some of the overhead issues:
- There are more than 760 federal education programs. The Subcommittee assembled the most comprehensive list of federal education programs to date. At least 39 federal agencies oversee more than 760 education programs, at a cost of $100 billion a year to taxpayers.
- Even after accounting for recent reductions, the U.S. Department of Education still requires over 48.6 million hours worth of paperwork per year - or the equivalent of 25,000 employees working full-time.
- The state of Ohio completed a study that found that 50 percent of their paperwork was attributable to federal programs, even though they only received six percent of their funds from the federal government.
- States like Georgia and Florida have found that it takes four to six times as many employees to administer a federal dollar as it does a state dollar.
- A "shadow" Department of Education exists. The Department of Education touts that it is one of the smallest federal agencies with 4,637 employees. What many people do not realize, however, is that there are nearly three times --13,400 -- as many federally funded employees of state education agencies administering federal education programs, as there are U.S. Department of Education employees.
- As little as 65 to 70 cents of each federal education dollar actually reaches the classroom. According to several studies, about 85 cents out of every federal education dollar is returned to local school districts.
- Although these studies provided information not previously available on federal education spending, they only examined what was returned to school districts. This is still several layers of bureaucracy away from the classroom.
- Given the 48.6 million paperwork hours required to receive federal education dollars, not to mention the cost of state and local administration of programs, it is not unreasonable to assume that another 15 to 20 cents is spent outside of the classroom. This would mean a net return of 65 to 70 cents to the classroom.
It takes 487 steps to approve grant applications.
- In 1993, Vice President Gore’s National Performance Review discovered that the Department of Education’s discretionary grant process lasted 26 weeks and took 487 steps. The Department over the last few years has been attempting to "streamline" this to 216 steps, but the process is not complete.
- The federal government spends tax dollars on television shows like Baywatch and Jerry Springer. The Department of Education also funds closed captioning for other "educational " programs such as Ricki Lake and The Montel Williams Show.
Admittedly, this is nearly 10 years old, but since education spending has increased since these findings, I assume they are still valid to a point.
To your point though, I don't think there's ever been a clear cut case of the government making do with less, because it doesn't really have to. Aside from times of national crises (WWII?), the government spends whatever it takes in, and sometimes borrows more to meet its needs.
You act as though we've never had a balanced budget.
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
edited July 2007
Stop saying "fairtax." I swear to god it's like fifty flavors of retarded. It's not like saying "flat tax" or "national sales tax" or hell even "NST" is going to give you the carps.
Also, Sal, the central expenditures on the federal budget are things that are difficult to cut. Social Security isn't going anywhere anytime soon, and neither is Medicare (unless it gets rolled into something larger, actually). The defense budget could be trimmed by a fair margin in theory, but it won't happen in large part because the cut-big-gummint crusaders are largely made up of people who also love defense spending and foreign wars. In general, government work pays less than industry work and is often a fair amount more demanding and risky.
This thread is full of so much misunderstood bullshit about the FairTax.
We already have tons of data on poverty level, spending at the poverty level, factors affecting the poverty level, price indicies by geography, and so on. This type of economic data is practically ubiquitous.
It's called the FairTax because that's the name of the bill. I wish they had called it something else myself, but that is what it is called.
The poor have no tax liability at all in it. It is therefore not a regressive tax. It removes tax burden from the poor.
The entire design of it is to fund the government. It is not going to reduce funding. It is predicted to increase funding, but this can be adjusted by adjusting the rate.
It spreads taxation across one's life, instead of just during income earning years. This improves capital/labor ratios and reduces the effective rate at the same revenue level.
We could take all the effort spent in current IRS expenditures and just put 1/10th that back into tax enforcement and auditing and it would create an unprecendeted level of tax compliance. No one magically thinks anything about compliance or cheating. It happens now, it will probably still happen. But a simpler plan that is easier to collect makes it much easier to audit and enforce.
1. It doesnt reduce the effective tax rate at the same revenue level.
2. It doesnt change capital/labor ratios.
It does incent savings, but the poor dont really benefit from that anyway. And as well, money you dont spend today, is money someone doesnt get to use.
The poor have no tax liability at all in it. It is therefore not a regressive tax. It removes tax burden from the poor.
I am extremely suspicious of this idea. Specifically, I'm afraid that the law's crafters have no idea how much the poor spend in each paycheck just to survive, and that a 23% retail sales tax will hit them hard. Monthly tax rebates are perfectly fine for people pulling in enough salary to take a 23% hit, but the vast majority of the working poor are already spending all or most of each paycheck to pay the bills and desperately need that money, not a monthly rebate check when it's too late.
1. It doesnt reduce the effective tax rate at the same revenue level.
2. It doesnt change capital/labor ratios.
It does incent savings, but the poor dont really benefit from that anyway. And as well, money you dont spend today, is money someone doesnt get to use.
That last line is funny.
Because, you know, one of the problems with not saving is that it keeps you poor, or makes you more succeptable to become poor.
But at least hippies could finally "stick it to the man" by continuing to not invest in the free market economy, thereby not paying any taxes to the politics they don't agree with. Their dung houses and soy gardens would finally pay off!
Because, you know, one of the problems with not saving is that it keeps you poor, or makes you more succeptable to become poor.
...Except that the working poor don't have enough money left over after each paycheck to actually start saving in the first place.
If you want people with very little money to spare to start savings accounts, the best thing you can do to both instill good saving habits and minimize the effects of poverty would be to have matching government contributions to those savings accounts up to an appropriate arbitrarily-determined limit.
The entire design of it is to fund the government. It is not going to reduce funding. It is predicted to increase funding, but this can be adjusted by adjusting the rate.
The only way it would actually increase funding is if it magically increased spending by a ridiculous amount like a few of the supporters say.
We already have tons of data on poverty level, spending at the poverty level, factors affecting the poverty level, price indicies by geography, and so on. This type of economic data is practically ubiquitous.
No one magically thinks anything about compliance or cheating. It happens now, it will probably still happen. But a simpler plan that is easier to collect makes it much easier to audit and enforce.
A "prebate" based upon that information would make it just as ripe for abuse than other social programs.
The only reason it seems simple is because it has never actually been passed. Once it was passed, it would be obvious about how complex it would have to be in order not to screw over the lower and middle classes. The "prebate" is just an example of how it would have to become much more complicated.
Because, you know, one of the problems with not saving is that it keeps you poor, or makes you more succeptable to become poor.
I am sure it is really easy for poor people to save money. Why, they just have a ton of extra money lying around!
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But at least hippies could finally "stick it to the man" by continuing to not invest in the free market economy, thereby not paying any taxes to the politics they don't agree with. Their dung houses and soy gardens would finally pay off!
Yes, it's principally the hippies who are big on bitching about taxes.
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Newspeak doubleplusgood!
It's because you're using dumb fucking sloganeering terms instead of calling your national sales tax what it is. Just a few years ago, the "Fair Tax" mantle was being used for a flat tax. In both cases, it's absolutely retarded to use talking points to describe the tax system you're advocating.
No, I did pretty well, thank you. Which means I understand what a proportion means. It has nothing to do with proportions, but overall spending.
You then say he's wrong because the people who don't make as much and spend greater percentages aren't contributing as much of a dollar amount as those who are rich... wtf?
the burden of tax-paying in a national sales tax system still falls hardest on poorer people who are spending large portions of their income.
Fuck. Let's go over this one more time.
We have two people - Joe Poor and John Rich. Joe makes approx. $35,000/year, while John makes $150,000. Now, since Joe and John are humans, they have certain needs, like food, shelter, clothes. transportation, and so on. Joe, on his meager salary, purchases the absolute least he can get away with - he has a cramped apartment in the bad section of town, he buys store-label food at the local mega-mart, he owns a 10+ year old car. In doing so, he spends $30,000 of his income. This expenditure is non-negotiable - its all essentials. In comparison, John has to spend money on the same things, but since he makes almost four times as much, he opt to buy higher quality items - he has a house in the suburbs, he buys food from a smaller upscale grocer that is of better quality, he has a car that is of recent vintage. This doesn't come cheap - John pays twice what Joe pays for these things. In addition, John spends about $10,000 a year on luxuries, while Joe spends only $1,000.
So, for Joe, he's spending $31K, while John is spending $70K. Now, let's toss a 10% sales tax on them both. For Joe, this means that he is assessed $3100 in tax. In other words, Joe is suddenly paying almost all his salary out. And he has few options to reduce that load - cutting out luxuries is only going to save him $1100, and because he's spending the absolute lowest he can, there's nowhere else he can go to save money. In comparison, John pays signifigantly more in tax - he pays $7000, over double. But when you look at the resources that John has, that $7000 is at worst only a moderate hit. Plus, if John really needed to, he's got a lot of places he can tighten his belt.
So yes, it's absolutly about proportions. It's about the proportion of one's income that the sales tax costs, and the simple fact that for the wealthy, even though they pay out more, it is MUCH less.
Thank you for detailing what I already understood. The comment originally made was it shifted tax burdens to those who spent more of their income. That is false.
That is not to say that the portion of their income spent on tax is the same, which is a different part all together. There's an argument to be made that a sales tax like this, which wouldn't be assessed on foodstuffs and other items of necessity, will be more balanced than the story you put forth. A person on a smaller income spends a greater proportion of their income on items that are non-taxable, which exempts a greater proportion of their spending from taxes.
The problem I have with a sales tax piece is this: it removes many incentives for ownership of property. A wealthy person buying a 1million dollar home is going to spend a shitload on taxes, likely as much or more than many people will spend on their home. In some parts of the country, a million won't buy you a mansion, but a 3 bedroom, 18 sq ft track home.
Please note, I'm not arguing that the sales tax is right, just that it has nothing to do with proportions of income in execution.
You are not making things up. As far as i can remember, not one single iota of funding for this war has come in the form of standard budgetary proceedings. It has ALL been done on supplimentary funding.
That is how we are able to keep the "projected defecit" so low
You would be terribly wrong, in order for your hyopthesis to be true.
You would need a taxing authority to determine:
A: Which things were taxable.
B: The proportion of which things were taxable.
C: What is defined as luxuary.
Sales taxes have a terrible time of exempting "nessesary goods" and almost always end up taxing the little guy harder, since they spend more.
E.G. Poor guy buys a car, Rich guy buys a car.
They are both cars, one is worth 10k and the other worth 30k.
How much of each car is deductable? Is a car even nessesary? Do they deduct the costs of public transporation out of the car, since that is what they are spending over what is nessesary? Can they get by with public transportation?
How would you tax each individual item in this manner so as to not need an enforcement agency?
Because in order to make it right by your supposition, this is what MUST happen.
Not necessarily. Certain items are already exempt from sales tax (see: food), and I don't think I ever argued that it would rid us of an enforcement agency. You've confused me with someone else.
My only point was this:
Poor guy buys 10k worth of car.
Rich guy buys 30k worth of car.
Their total incomes are not an issue when it comes to the taxation, just the value of the item. You could easily see a rich person buying a 10k car and a poor person buying a 30k car. Their incomes determine what is within their buying power, but is never used to determine how much they are taxed.
:roll:
Also, food isnt taxed, but a large part of what being wealthy means is that you are able to purchase better and more expensive food.
The things that are nessesities[Home, Transportation, Food, Education, Clothing] doesnt just stay at a set level of cost for the rich and the poor. So you are either taxing all quality levels the same, or you have a monumental task ahead of you.
All of these things you have to pay for, so, for your stipulation to be correct, you need a system that will determine how much and of what is or isnt a luxary and so needing to be taxed.
Its the old "homeowners exemption" for bankruptcy again. Right before you go bankrupt, you but a 30 million dollar house.
Ooops, seems that debtors cant go after a primary residence in bankruptcy proceedings... Wonder how that happened.
The point is that you cant just say that you can tax the nessesities and not have an issue with the tax burden. Not to mention the savings incentives[something that rich folk are able to do much easier than poor folk]
The thing is, I don't think you and I disagree. My argument was on the wording of the original comment (and I don't even think you were the one to make it), not whether it's a good choice or not.
That's quite an assumption.
Also, these numbers are more or less arbitrary meant to illustrate a point. Don't get too hung up on them.
Agreed. We were just using them as illustrations. 35K for a single person is nearly 4 times the poverty line.
A lot of the issue is where people end up on the debt wheel. If you get into much debt then that is going to constantly drain your money and make it difficult to move upwards, while if you have more growth in your assets than your debts then you will start moving up without having to directly work for it.
There's a lot to be said for living under your means and getting on the plus side of debt, but when you are at the bottom end of the spectrum there is a lot less room for you to do that. A national sales tax like this would worsen the problem as it magnifies the proportion of the spending on goods of the total income of the lower classes, and gives them less room to deal with debt/investment. It definitely hits the rich a lot easier than a progressive income tax without too many holes.
Of course you can have exemptions for those in poverty and for certain types of spending so the most poor don't have to pay, but all that does is shift the "most screwed" point a little higher into the lower middle or middle classes.
That depends heavily on where you live. The cost of living has a pretty high variation over the breadth of the country.
The original comment was mine.
If you have a progressive income tax system, and you reduce the amount of tax you collect through that income tax, and make up the shortfall by collecting a sales tax, so that you are collecting the same amount of tax in total, you will shift the burden of taxation away from those who spend less of their income and toward those who spend more of their income. If you include exceptions on that sales tax for food, the picture becomes a little more complex, but in terms of what is happening at the top of the scale it will be basically the same. I can show this with hypothetical numbers if you like but I imagine it's self-evident enough that I don't need to.
I suspect your objection was to the word "shift", which assumes a progressive income tax system is the thing that is being replaced by the sales tax, which, given that a progressive income tax is the main form of tax collection where we each variously live, seems like a reasonable assumption to me, but I did leave it unstated. If your objection is to some other part of the wording, let me know and I'll see what I think. :P
At which point most in the middle class (particularly the lower end) would end up with a small tax burden (since most of the sales tax they pay over the year would be offset by this fixed refund) and many in the lower class would end up with no tax at all...or even a negative tax rate.
Especially since this refund would be fixed per-person (I believe differentiating between minors and adults), not based on actual tax paid...so if somebody could find a way to live for less than the assumed cost of "essentials" (or had to find a way, because they're just that poor) they'd actually be able to get back more than they paid. And given that the supposed appeal of this system is simplicity, it'd make no sense to waste any effort trying to prevent this.
Not that I think this system would work overall, but the idea of fixed refunds (which could actually be sent out at the beginning of each year, or every six months, or whatever we wanted to do) would probably alleviate the main problem I'm seeing mentioned here, which is the regressive nature of it.
http://upload.wikimedia.org/wikipedia/en/7/7a/FTRebate.png
It is a load of shit considering how much the cost of living from place to place varies.
That's a 'negative income tax', more or less.
I suppose. Though again, we're talking about actually taking money in through sales tax (rather than income).
The COA does vary, but I believe most of the variation is in housing and transportation. I don't think a bottle of ketchup costs that much more in California than it does in Wyoming. So really, the largest thing you'd have to adjust for would be housing and the gov't theoretically already has data on the average cost for that by zip code. It could theoretically be done, though again at that point you're introducing complexity to the system and the ability for people to "cheat" (claiming residences in other zip codes, for instance).
But for dependents? Not really an issue. Issue a set amount for each SSN, based on whether they're an adult or minor. For minors, issue it to the legal guardian.
Really though, I'm wasting my time. Pulling in as much money as our government needs from the number of people we have with the income disparity we have without fucking over people that can't afford to be fucked over takes a more complicated system than the FairTax allows for.
I'm woefully undereducated when it comes to economics, but it seems to me that the basic problem with this system is that it simply would not generate enough revenue for the federal government to function.
Which suits some people just fine, I guess.
I mean, I know this is state rather than federal, but have you been to a DMV lately? Do you realize how much those people get paid?
If I was going to take a red pen to the federal budget, I'd go straight for defense expenditures, not bureaucrats' paychecks.
So when your employer figures that you're making too much money, you just take that reduction stoically, right?
It benefits the haves.
Has there ever been a clear cut case of the system being made to function for a great deal less? I know it might seem a little demanding to desire a broad conviction like this to have some emperical backing.
I've seen stats here and there about the amount of money per dollar taxed that is lost to bureaucracy, but it seems to vary. I was able to find some findings from a congressional education committee that referenced some of the overhead issues:
- Even after accounting for recent reductions, the U.S. Department of Education still requires over 48.6 million hours worth of paperwork per year - or the equivalent of 25,000 employees working full-time.
- The state of Ohio completed a study that found that 50 percent of their paperwork was attributable to federal programs, even though they only received six percent of their funds from the federal government.
- States like Georgia and Florida have found that it takes four to six times as many employees to administer a federal dollar as it does a state dollar.
- A "shadow" Department of Education exists. The Department of Education touts that it is one of the smallest federal agencies with 4,637 employees. What many people do not realize, however, is that there are nearly three times --13,400 -- as many federally funded employees of state education agencies administering federal education programs, as there are U.S. Department of Education employees.
- As little as 65 to 70 cents of each federal education dollar actually reaches the classroom. According to several studies, about 85 cents out of every federal education dollar is returned to local school districts.
- Although these studies provided information not previously available on federal education spending, they only examined what was returned to school districts. This is still several layers of bureaucracy away from the classroom.
- Given the 48.6 million paperwork hours required to receive federal education dollars, not to mention the cost of state and local administration of programs, it is not unreasonable to assume that another 15 to 20 cents is spent outside of the classroom. This would mean a net return of 65 to 70 cents to the classroom.
It takes 487 steps to approve grant applications.
- In 1993, Vice President Gore’s National Performance Review discovered that the Department of Education’s discretionary grant process lasted 26 weeks and took 487 steps. The Department over the last few years has been attempting to "streamline" this to 216 steps, but the process is not complete.
- The federal government spends tax dollars on television shows like Baywatch and Jerry Springer. The Department of Education also funds closed captioning for other "educational " programs such as Ricki Lake and The Montel Williams Show.
Admittedly, this is nearly 10 years old, but since education spending has increased since these findings, I assume they are still valid to a point.
To your point though, I don't think there's ever been a clear cut case of the government making do with less, because it doesn't really have to. Aside from times of national crises (WWII?), the government spends whatever it takes in, and sometimes borrows more to meet its needs.
Also, Sal, the central expenditures on the federal budget are things that are difficult to cut. Social Security isn't going anywhere anytime soon, and neither is Medicare (unless it gets rolled into something larger, actually). The defense budget could be trimmed by a fair margin in theory, but it won't happen in large part because the cut-big-gummint crusaders are largely made up of people who also love defense spending and foreign wars. In general, government work pays less than industry work and is often a fair amount more demanding and risky.
We already have tons of data on poverty level, spending at the poverty level, factors affecting the poverty level, price indicies by geography, and so on. This type of economic data is practically ubiquitous.
It's called the FairTax because that's the name of the bill. I wish they had called it something else myself, but that is what it is called.
The poor have no tax liability at all in it. It is therefore not a regressive tax. It removes tax burden from the poor.
The entire design of it is to fund the government. It is not going to reduce funding. It is predicted to increase funding, but this can be adjusted by adjusting the rate.
It spreads taxation across one's life, instead of just during income earning years. This improves capital/labor ratios and reduces the effective rate at the same revenue level.
We could take all the effort spent in current IRS expenditures and just put 1/10th that back into tax enforcement and auditing and it would create an unprecendeted level of tax compliance. No one magically thinks anything about compliance or cheating. It happens now, it will probably still happen. But a simpler plan that is easier to collect makes it much easier to audit and enforce.
And stuff.
Yeah, what he said.
Wii Code: 1040-1320-0724-3613 :!!:
2. It doesnt change capital/labor ratios.
It does incent savings, but the poor dont really benefit from that anyway. And as well, money you dont spend today, is money someone doesnt get to use.
I am extremely suspicious of this idea. Specifically, I'm afraid that the law's crafters have no idea how much the poor spend in each paycheck just to survive, and that a 23% retail sales tax will hit them hard. Monthly tax rebates are perfectly fine for people pulling in enough salary to take a 23% hit, but the vast majority of the working poor are already spending all or most of each paycheck to pay the bills and desperately need that money, not a monthly rebate check when it's too late.
That last line is funny.
Because, you know, one of the problems with not saving is that it keeps you poor, or makes you more succeptable to become poor.
Wii Code: 1040-1320-0724-3613 :!!:
...Except that the working poor don't have enough money left over after each paycheck to actually start saving in the first place.
If you want people with very little money to spare to start savings accounts, the best thing you can do to both instill good saving habits and minimize the effects of poverty would be to have matching government contributions to those savings accounts up to an appropriate arbitrarily-determined limit.
A "prebate" based upon that information would make it just as ripe for abuse than other social programs.
The only reason it seems simple is because it has never actually been passed. Once it was passed, it would be obvious about how complex it would have to be in order not to screw over the lower and middle classes. The "prebate" is just an example of how it would have to become much more complicated.
I am sure it is really easy for poor people to save money. Why, they just have a ton of extra money lying around!