Transaction Tax?

• BoatShoes

  QuakerOats;495263 wrote:At least 25% of government could be eliminated in a heartbeat, and no one would notice it was gone.
  
  Let's get on with it.

  
  Specific examples please.
• cbus4life

  QuakerOats;495263 wrote:At least 25% of government could be eliminated in a heartbeat, and no one would notice it was gone.
  
  Let's get on with it.

  
  Which areas?
  
  Of course there is waste in our government, but these sorts of comments mean nothing.
  
  And, what organizations do you want to get rid of that exist at the federal level but should instead exist at the state level?
  
  Which ones do you want to trim, and not get rid of entirely?
  
  I'm honestly curious. I understand and agree that there is a tremendous amount of waste in our current system, but i don't know which areas we could instantly get rid of and have no one notice.
• BoatShoes

  jmog;494234 wrote:1. The government likes to spend (both Rs and Ds), I highly doubt this would replace our income tax, it would end up being on top of the income tax. Most of us who have watched government tax/spend would probably agree with this.
  2. I do NOT want the government to have access to my bank account, period. No ifs ands or buts about it.

  
  If this guy got his bill passed it'd be akin to passing the FairTax....a total upheaval of our tax system....none of these conservatives clamoring for the FairTax complain that it will just be added to current income tax.
  
  I'm not advocating for this guys tax...I'm just shaking my head at people immediately dismissing it when on its face it's a consumption tax that would, like all consumption taxes as a general rule, reduce the overall tax base and consequently be preferable in theory to the tax hating conservatives on here. I'm not arguing that it is good or bad.
  
  Fwiw this bill doesn't seem to be serious and is merely just a political statement with little economic evidence supporting the claims the other makes.
• BGFalcons82

  

  BoatShoes;495786 wrote:If this guy got his bill passed it'd be akin to passing the FairTax....a total upheaval of our tax system....none of these conservatives clamoring for the FairTax complain that it will just be added to current income tax.
  
  I'm not advocating for this guys tax...I'm just shaking my head at people immediately dismissing it when on its face it's a consumption tax that would, like all consumption taxes as a general rule, reduce the overall tax base and consequently be preferable in theory to the tax hating conservatives on here. I'm not arguing that it is good or bad.
  
  Fwiw this bill doesn't seem to be serious and is merely just a political statement with little economic evidence supporting the claims the other makes.

  
  So if it's indeed a sham, is he trying to mock those that favor a "Fair Tax" or "Flat Tax"? What's the point of the legislation if indeed they truly don't want to pass it?
  
  The "Fair Tax" is an awesome idea that would REPLACE IN ITS ENTIRETY THE INCOME TAX. It's not "in addition to" and "will eventually replace". Those are words to get people to buy-in and then get hoodwinked when the elitists say something like, "we didn't know it was this bad, so we have to change it and keep the IRS in office and also the consumption tax."
• BoatShoes

  BGFalcons82;495789 wrote:So if it's indeed a sham, is he trying to mock those that favor a "Fair Tax" or "Flat Tax"? What's the point of the legislation if indeed they truly don't want to pass it?
  
  The "Fair Tax" is an awesome idea that would REPLACE IN ITS ENTIRETY THE INCOME TAX. It's not "in addition to" and "will eventually replace". Those are words to get people to buy-in and then get hoodwinked when the elitists say something like, "we didn't know it was this bad, so we have to change it and keep the IRS in office and also the consumption tax."

  
  I'm sure he believes that this tax is the cat's pajamas in the same way you feel about a national retail sales tax.
• BGFalcons82

  

  BoatShoes;495792 wrote:I'm sure he believes that this tax is the cat's pajamas in the same way you feel about a national retail sales tax.

  
  Think of how many lobbyists, lawyers and corporate tax accountants who spend every working hour contemplating and manipulating themselves out of paying taxes and into shelters that would be out of work should the Fair Tax be enacted. That should make you smile.
  
  But then....it also would eliminate ways for easily-corrupted politicians to be corrupted. I think this is the best attribute of all.
• Manhattan Buckeye

  "when on its face it's a consumption tax that would, "
  
  It isn't a freaking consumption tax. Me moving money among my various accounts consumes nothing. I made this point earlier in the thread. It is just paper moving.
• majorspark

  

  BoatShoes;495786 wrote:If this guy got his bill passed it'd be akin to passing the FairTax....a total upheaval of our tax system....none of these conservatives clamoring for the FairTax complain that it will just be added to current income tax.

  You are correct that the fair tax would be a total upheaval of our current tax system. But you are incorrect about the fair tax being added to the income tax.
  
  The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities
  
  http://www.fairtax.org/site/PageServer?pagename=about_main
• BoatShoes

  Manhattan Buckeye;495803 wrote:"when on its face it's a consumption tax that would, "
  
  It isn't a freaking consumption tax. Me moving money among my various accounts consumes nothing. I made this point earlier in the thread. It is just paper moving.

  
  Deeerrieorieppp....Your point is wrong guy regardless if it doesn't make sense to you. According to the definition of a consumption tax...a consumption tax is any tax that is levied on labor income only and not capital income as would be the case under this tax....This is consistent with the Schanz-Haig-Simons definition. For instance, if the U.S. eliminated totally the tax on capital gains and dividends we would effectively be living under a consumption tax as only labor income would be taxed and this is effectively the same as living under a cash-flow consumption tax.
  
  When you put your money into a savings account that you earned from your labor it is taxed just like your money from your labor that you use to purchase an ipod is taxed....in the shitty bill it even makes transfers of stock that would result in current capital gain exempt from tax to preserve that taxes only be levied on non-capital income.
  
  Theoretically, under this tax if you earned money from the sale of stock and this gain was exempt from tax and then you put it in a saving's account, it would be a deferred tax on income earned from capital on what you consider to be a non-consumption function but that is wrong because consumption is any and all economic activity that doesn't entail the design, production or marketing of goods and services. I didn't come up with that so don't be mad at me. i'm just a schmuck.
• BoatShoes

  majorspark;495805 wrote:You are correct that the fair tax would be a total upheaval of our current tax system. But you are incorrect about the fair tax being added to the income tax.
  
  The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities
  
  http://www.fairtax.org/site/PageServer?pagename=about_main

  
  My sentence was unclear....I apologize....agree...the Fairtax would not be added to the income tax....I understand this....my point was that you don't see conservatives saying "This is just a trick...when's the greedy bastards in the gubment ever actually gotten rid of a tax when they added one??? I don't believe it".....As some are saying in regards to this "transaction tax"
• majorspark

  

  BoatShoes;495816 wrote:my point was that you don't see conservatives saying "This is just a trick...when's the greedy bastards in the gubment ever actually gotten rid of a tax when they added one??? I don't believe it".....As some are saying in regards to this "transaction tax"

  I understand the point you are trying to make. But I don't believe the Fair Tax act supports your assertion. Its implementation is contingent on the repeal of all aforementioned federal taxes. The fair tax requires a constitutional amendment repealing the 16th amendment. So how can the feds trick us when the addition requires the elimination of the other forms of federal taxation? Let alone an amendment constitutionally preventing the income tax from easily resurfacing in the future. I have not thoroughly read up on this transaction tax bill, but I do have my doubts that it contains similar language. If it does you would have a point.
• jmog

  BoatShoes;495786 wrote:If this guy got his bill passed it'd be akin to passing the FairTax....a total upheaval of our tax system....none of these conservatives clamoring for the FairTax complain that it will just be added to current income tax.
  
  I'm not advocating for this guys tax...I'm just shaking my head at people immediately dismissing it when on its face it's a consumption tax that would, like all consumption taxes as a general rule, reduce the overall tax base and consequently be preferable in theory to the tax hating conservatives on here. I'm not arguing that it is good or bad.
  
  Fwiw this bill doesn't seem to be serious and is merely just a political statement with little economic evidence supporting the claims the other makes.

  
  I'm sorry, but there is nothing in this bill/tax scheme resembling a "fair tax". Anyone trying to compare the two needs to really read up on the differences. I'm sorry, but the government's hand in my everyday transactions with my BANK is not even close to a "fair tax".
• Footwedge

  Fair tax would be a great thing.....but will never pass because of the huge increase in unemployment.
• majorspark

  

  Footwedge;495913 wrote:Fair tax would be a great thing.....but will never pass because of the huge increase in unemployment.

  
  True. All the IRS agents, accountants, and tax lawyers will have to get busy finding new ways to use their skills to produce a tangible good or service for their fellow man. No longer will their industry be sustained by the federal tax code. It will never pass because of the huge decrease in federal power. The ability for politicians to coerce the people with a massively complex tax code will be greatly diminished.
• Manhattan Buckeye

  BoatShoes;495815 wrote:Deeerrieorieppp....Your point is wrong guy regardless if it doesn't make sense to you. According to the definition of a consumption tax...a consumption tax is any tax that is levied on labor income only and not capital income as would be the case under this tax....This is consistent with the Schanz-Haig-Simons definition. For instance, if the U.S. eliminated totally the tax on capital gains and dividends we would effectively be living under a consumption tax as only labor income would be taxed and this is effectively the same as living under a cash-flow consumption tax.
  
  When you put your money into a savings account that you earned from your labor it is taxed just like your money from your labor that you use to purchase an ipod is taxed....in the shitty bill it even makes transfers of stock that would result in current capital gain exempt from tax to preserve that taxes only be levied on non-capital income.
  
  Theoretically, under this tax if you earned money from the sale of stock and this gain was exempt from tax and then you put it in a saving's account, it would be a deferred tax on income earned from capital on what you consider to be a non-consumption function but that is wrong because consumption is any and all economic activity that doesn't entail the design, production or marketing of goods and services. I didn't come up with that so don't be mad at me. i'm just a schmuck.

  
  That made less sense than your initial post I responded to. A consumption tax is a tax on some sort of goods, services, or other transactional behavior that provides a benefit by a provider to someone. Hence, you are consuming something.
• BGFalcons82

  

  majorspark;496051 wrote:True. All the IRS agents, accountants, and tax lawyers will have to get busy finding new ways to use their skills to produce a tangible good or service for their fellow man. No longer will their industry be sustained by the federal tax code. It will never pass because of the huge decrease in federal power. The ability for politicians to coerce the people with a massively complex tax code will be greatly diminished.

  
  You are 100% correct in explaining why simplicity and common sense will never be in vogue...unless we make it so.
• gut

  Absolutely fucking ridiculous. If you tack-on a 1% fee to my ATM withdrawl I suppose I wouldn't cry too much, just seek out network ATM's much more to avoid that bank fee that I generally tolerate out of convenience. But tax me for moving money from one account to another online!!!! That costs the bank nothing and would penalize people for managing their money well. And every time I get direct deposit from work you'd hit me with another 1%!!!!
  
  And don't get me started on the consumption tax if you want to go down FairTax road. A consumption tax (most likely a VAT) in the US is probably inevitable, but research pretty much proves you cannot collect enough in revenues from a consumption tax to completely eliminate income taxes. In Europe 15-17% seems to be about the optimum with consumption taxes because as it gets higher people have more incentive to minimize/avoid it and you end-up actually losing revenues at higher rates.
• tk421

  

  A VAT in the U.S. would be a killer. On top of state and locals sales taxes, we can't take anymore taxes. The government is going to have to massively slash their budget, they can not tax enough to cover everything.
• gut

  tk421;496684 wrote:A VAT in the U.S. would be a killer. On top of state and locals sales taxes, we can't take anymore taxes. The government is going to have to massively slash their budget, they can not tax enough to cover everything.

  
  I don't disagree. The govt is too fat and to say we could trim govt 25% is probably reasonable. No, I don't have specific examples off the top of my head although Obama's army of Presidential advisers is a place to start (every President has continued expanding that number). Just way too much fat and bloat in the govt and instead of annual budget increases if you slashed budgets across the board they would somehow manage. The massive expansion of social programs is going to bankrupt us - this has been a massive drag on the European economy for years.
  
  But the bottom line is while every other economic sector has been tightening the belt and trimming jobs the govt has been adding like a kid in the candy store. As part stimulus in a recession I may not have much problem, but that stuff is never cut back which is how we get where we are. Govt payrolls are both too large and govt workers are making too much these days - now paid as well as the private sector (used to be like 60-80%) with the same laughably generous benefits and pensions (the latter which few have in the private sector any more).
  
  Back to the VAT, it's going to happen as a way of passing on a consumption tax to the consumer as VAT is generally considered the most effective form of consumption tax. Corporate taxes are generally too high in the US already (despite what the Dems tell us, corporate taxes in the US are currently a competitive disadvantage) and a VAT, which generally gets passed on to the consumer, is a way of expanding revenues while reducing the effective corporate tax rates at the same time.
  
  We have a massive debt that we only get out of with higher taxes and reduced govt spending. That or we inflate our way out.
• gut

  Manhattan Buckeye;495803 wrote:"when on its face it's a consumption tax that would, "
  
  It isn't a freaking consumption tax. Me moving money among my various accounts consumes nothing. I made this point earlier in the thread. It is just paper moving.

  
  Agreed. I think the main goal of this is to bump income taxes with an "invisible" 1% increase. Actually, it's a 1% bump in income tax PLUS a 1% consumption tax. I.E., you get a direct deposit from work or a stock sale and it gets taxed 1%. Then when you take out cash to buy something or write a check to pay off your credit card bill you get hit with another 1%!!!
  
  This would be devastatingly stupid. If I understand correctly and stock sales would be taxed 1% (actually 2%, 1% when you buy and 1% when you sell?), that imposes a huge transaction cost on investing that would be very, very bad.
• tk421

  

  gut;496751 wrote:I don't disagree. The govt is too fat and to say we could trim govt 25% is probably reasonable. No, I don't have specific examples off the top of my head although Obama's army of Presidential advisers is a place to start (every President has continued expanding that number). Just way too much fat and bloat in the govt and instead of annual budget increases if you slashed budgets across the board they would somehow manage. The massive expansion of social programs is going to bankrupt us - this has been a massive drag on the European economy for years.
  
  But the bottom line is while every other economic sector has been tightening the belt and trimming jobs the govt has been adding like a kid in the candy store. As part stimulus in a recession I may not have much problem, but that stuff is never cut back which is how we get where we are. Govt payrolls are both too large and govt workers are making too much these days - now paid as well as the private sector (used to be like 60-80%) with the same laughably generous benefits and pensions (the latter which few have in the private sector any more).
  
  Back to the VAT, it's going to happen as a way of passing on a consumption tax to the consumer as VAT is generally considered the most effective form of consumption tax. Corporate taxes are generally too high in the US already (despite what the Dems tell us, corporate taxes in the US are currently a competitive disadvantage) and a VAT, which generally gets passed on to the consumer, is a way of expanding revenues while reducing the effective corporate tax rates at the same time.
  
  We have a massive debt that we only get out of with higher taxes and reduced govt spending. That or we inflate our way out.

  
  The VAT may happen, but like was said earlier, I don't ever see the government lowering or getting rid of a tax. If/when the VAT happens, it will be on top of/included with the other taxes we already have. Thus, it will completely destroy what is left of our economy.
• cosmosprivateer

  This bill has been around for awhile nothing new here. I am all for a consumption tax and elimination of all income taxes.
  
  
  This will never happen the only asset a government or ruler has is the peoples labor.