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[The Bookerman]

this man is not happy with the republicans.

 

[Lathentar]

And I'll reiterate, is that a joke post or a troll? Because quite frankly, if you think people who make $100,000+ of their income are spending roughly equal amounts of their budget on basic necessities like food and transportation as people below the poverty line (of which there are over 32 million in this country), anyone with any basic grasp of personal finance isn't going to take you seriously.

Infact... this report will take me seriously and prove my point.

http://www.bls.gov/opub/ils/pdf/opbils26.pdf

Almost IDENTICAL spending as a percentage of income. Could you please provide a report supporting your statements?

 

[Hitokage]

While tax rates are levied as percentages, living expenses are spent as numeric figures. Nobody has to pay rent in the form of 40% of their income, they pay an amount independent of their exact income. Thus, given a flat tax, the blow to a poor person's balance sheet from taxes will be far greater than the blow to a wealthy person's balance sheet. Also, the ratio of earned income to unearned income gets lower the higher one goes up the income scale. "Hard work" may indeed be a virtue, but that doesn't jive with a regressive tax. The ability to simply coast on existing assests becomes far greater in the top tax bracket.

Oh, and food is taxed, but depending on the state it may be a different rate than nonfood products, or even prepared food. In NC, the food grocery tax is 2%, but AFAIK prepared food is taxed about the same as nonfood goods... at 7%.

 

[Hitokage]

Infact... this report will take me seriously and prove my point.

http://www.bls.gov/opub/ils/pdf/opbils26.pdf

Almost IDENTICAL spending as a percentage of income. Could you please provide a report supporting your statements?

Uh, do you even read your own links?

 

[OmniGamer]

Charge the rich $59.99 for a gallon of milk

 

[Lathentar]

Uh, do you even read your own links?

On average, high-income households
spent about $15,000 more on housing than other
households. However, the share of total spending
on housing by the two groups was very
similar—about 31 percent each.

Food. Households with annual incomes of
$90,000 or more allocated just over 11 percent
of their total expenditures on food and 51
percent of that on food away from home. The
figures for the other households were 14
percent and 37 percent, respectively.
and 5.6 percent, respectively.

On average, high-income
households spent more than twice as much
($12,521) on transportation than did other
households ($5,690). These outlays, however,
reflected less than 16 percent of the high-income
household’s total expenditures and
almost 19 percent of the other household’s total
spending.

The graph at the bottom with total income/total expenditures seems to contradict what I'm saying. I will admit that.

 

[DJ_Tet]

The main advantage I've heard that hasn't been mentioned about a VAT is this.

Not everyone even pays taxes. Drug dealers don't pay taxes. Millions of people don't file income tax unless they will be getting something back.

The reason this system adds up to less taxes per person is because EVERYONE pays. It cuts some fat from the govt (always a good thing), saves money there. I've even heard talk that there will be monthly reimbursements for the poor for taxes on their food etc.

I hope and pray this would pass, but I'm skeptical like the rest of you.

 

[AirBrian]

Oh, and food is taxed, but depending on the state it may be a different rate than nonfood products, or even prepared food. In NC, the food grocery tax is 2%, but AFAIK prepared food is taxed about the same as nonfood goods... at 7%.

In only about a 1/3 of the states are food items taxed. And just to add, prepared foods (like fast food and normal restaurants) are treated like non-food items and are taxed. But prepared foods in a grocery store (like frozen meals) are not taxed unless the grocery store prepares the item.

Also, I'm pretty sure NC doesn't have a state food tax -- it is however subject to local taxes (which in your case is 2%).

 

[Hitokage]

No, it's a state tax, that much I know for sure.

 

[Ignatz Mouse]

This is all smoke and mirrors, even the talk of regressive taxes.

If you cut out most of the incentives and loopholes and other relatively-hidden payouts to various groups or classes, you could drop tax rates (be they flat or progressive) a ton.

The allure of a flat tax, to me, is the abolishment of loopholes, so that the wealthier *will* and up paying more, becuase they aren't getting the breaks they once did.

Then you have to figure out what the impact to the economy of losing those breaks and loopholes really is. The obvious one is the break homeowners get on their mortgage interest. That's pretty hardcore middle class. I'm sure the beefier ones are better disguised.

 

[JoshuaJSlone]

I think it's unfair to tax the rich a higher percentage. I don't see how you countered that in any form.

One little example: Gov. McGreevey of NJ is planning to raise taxes for the richest 26,000 families in New Jersey by 3%, bringing their total tax rate to 8 or 9%. The money gained from this is going directly to senior citizens and the poor. I really don't see what's fair about that. It seems to be straight-up stealing to me.

That's the main difference here... many of us don't agree with that. I might similarly word my position as "I think it's unfair to tax the lower class when the wealthier can more easily bear the burden."

If there was a community of 50 people making $20K a year and one guy making $1 million a year, and there were two tax proposals:

A) Take 25% of everyone's income. This would leave 50 people with $15K and one guy with $750K, with total tax revenues of $500K.

B) Take 22% of the poorer people's income and 28% of the wealthy guy's income. This would leave 50 people with $15.6K and one guy with $720K. Total tax revenues of $500K.

Absolutely B seems fairer to me.

The graph at the bottom with total income/total expenditures seems to contradict what I'm saying. I will admit that.

I think the problem is that the parts you quote show that the spending habits are similar... it's just that the percentages for the wealthier are only considering the portion that they actually spend, which the chart shows to be about 60% of the income.

 

[Hitokage]

Food. Households with annual incomes of
$90,000 or more allocated just over 11 percent
of their total expenditures on food and 51
percent of that on food away from home. The
figures for the other households were 14
percent and 37 percent, respectively.

On average, high-income
households spent more than twice as much
($12,521) on transportation than did other
households ($5,690). These outlays, however,
reflected less than 16 percent of the high-income
household’s total expenditures and
almost 19 percent of the other household’s total
spending.

There's also the bit about pension/investment expendetures. At any rate, while the difference between 16 and 19 percent may not be huge, it's certainly not identical.

Oh, and one more thing... it only compares those who make over $90k a year and everyone else, combining the middle and lower classes, yet the argument you were trying to respond to was comparing the upper and lower classes exclusively.

 

[Lathentar]

I think the problem is that the parts you quote show that the spending habits are similar... it's just that the percentages for the wealthier are only considering the portion that they actually spend, which the chart shows to be about 60% of the income.

Yes yes, good point. I obviously misread.

 

[AirBrian]

No, it's a state tax, that much I know for sure.

Recheck your source.

The State levies a general retail sales and use tax of 4.5% (the rate increased from 4% effective
October 16, 2001 and is scheduled to return to 4% effective July 1, 2005). By July 1, 2003, all 100 North
Carolina counties had adopted the one-half cent county tax increasing the local sales and use tax to 2.5%.
As a result, the combined general State and county tax rate is 7% in all counties except Mecklenburg
County, which has a rate of 7½% (due to a ½% Public Transit Tax). The State exempts food from sales
and use tax except for certain classifications, however a local sales and use tax of 2% still applies to all
food. (Food items subject to taxation include dietary supplements, food sold from vending machines,
alcoholic beverages, soft drinks, and prepared food. Candy is subject to taxation unless it is purchased for
home consumption and would be eligible for purchase with food stamps under the Federal Food Stamp
Program; all candy will be exempt after 2003.)

http://www.dor.state.nc.us/publications/2003stateandlocal.pdf

 

[LuckyBrand]

Wow, just wow. No offense, but this is JUST PLAIN WRONG

What percent of your budget goes to paying groceries? To paying rent? To paying fees like car repair and the gas / mass transit fare for the daily commute? If you're like most people, that is the vast majority of your budget. And guess what - that amount of money stays the same whether you're rich as all hell or living day-to-day. Because in the end, Dick Cheney and John Kerry eat roughly the same as the poor single mother of two who lives in the housing projects. And under a flat national sales tax, they all pay the same in taxes for that food. A flat tax is a perfect way to tax the poor into starvation.

Only someone who is too rich to have to worry about managing enough money to pay for groceries would think a flat sales tax or VAT would be fair.

really? millionaires eat the same exact food as poor people in the projects?

damn, i always assumed if i was to be rich one day, i'd eat lobster every day, 3 times a day... and other nice food items...

but i guess it will be processed cheese sammiches forever.

 

[Gruco]

This is all smoke and mirrors, even the talk of regressive taxes.

If you cut out most of the incentives and loopholes and other relatively-hidden payouts to various groups or classes, you could drop tax rates (be they flat or progressive) a ton.

The allure of a flat tax, to me, is the abolishment of loopholes, so that the wealthier *will* and up paying more, becuase they aren't getting the breaks they once did.

Then you have to figure out what the impact to the economy of losing those breaks and loopholes really is. The obvious one is the break homeowners get on their mortgage interest. That's pretty hardcore middle class. I'm sure the beefier ones are better disguised.

Well the problem is that an application of a flat rate itself won't end all the different credits, deductions, loopholes and exemptions that make those problems. But I agree that efforts to lower rates and limit base reductions are A Good Thing. They already try to do this by creating phaseouts for people with higher income(stealth tax!), which is good, but it still doesn't always get the job done, and it makes the code much more complicated.

Fun numbers

[b]Company          Income       Tax(Refund)   Rate[/b]
Enron             1,785        (381)       (21.34)%
El Paso Energy    1,638        (254)       (15.51)%
Goodyear          442           (23)       (5.2)%
Navistar          1,368         28        2.05%
GM                12,468        740        5.94%

Millions, those are various years between '96 and 2000.

 

[Nerevar]

really? millionaires eat the same exact food as poor people in the projects?

damn, i always assumed if i was to be rich one day, i'd eat lobster every day, 3 times a day... and other nice food items...

but i guess it will be processed cheese sammiches forever.

Obviously simple logic is beyond some people here.

 

[Hitokage]

Recheck your source.


http://www.dor.state.nc.us/publications/2003stateandlocal.pdf

Bah, I could have sworn I saw reports of discussions about it in the state legislature in the newspaper... maybe it was that they were phasing it out from the state level.

 

[McLesterolBeast]

If this passes, I'll be loving it. Especially as someone who doesn't live in america. This would be tantamount to cayman islands part deux, only a lot closer to where i live. It'd make for a pretty convenient tax shelter.

really? millionaires eat the same exact food as poor people in the projects?

damn, i always assumed if i was to be rich one day, i'd eat lobster every day, 3 times a day... and other nice food items...

but i guess it will be processed cheese sammiches forever.

You're a fucking retard. Sorry. The point he was making is in regards to the proportion of income spent on the cost of living and that would be clear as day to anyone who.... isnt a fucking retard. There's a substantial difference in what a wealthy individual spends on every day life to a poor person, but not relative to the income gap.

 

[Fjord]

A VAT isn't a bad idea, but wages need to be normalized first. Until you draw some parity in what people earn, then a VAT is only going to benefit the rich and screw the little guy. But all things being equal, a VAT is a good thing IMO. As for getting rid of the IRS, yeah right. A cheap ploy. PEACE.

The more equal the pieces, the smaller the pie.

 

[Bizarro Sun Yat-sen]

The more equal the pieces, the smaller the pie.

So I guess the corollary would be the less equal the pieces, the bigger the pie? Most South American and African countries have awfully unequal pieces, where are the rest of their pies?

 

[Lathentar]

http://en.wikipedia.org/wiki/Value_Added_Tax

 

[teh_pwn]

I'm all for flat tax.

Liberal guilt. As for the hungry, cry me a river. Bleeding money isn't going to help.

I haven't seen anyone thin, pale and starving anywhere. I do see some people using welfare that are big enough to be 3 healthy people at walmart.

 

[Gregory]

I`ve never understood your tax politics. Where I come from the average people pay around 30% tax and the wealthiest up to 50%. We have great welfare and social programs, free healthcare for everyone, free college for everyone, 5 fully paid weeks of vacation every year, and overall the best standard of living on the world, atleast according to UN.

But I guess this isn`t exactly the american dream, which seems to be about grabbing as much as can you for yourself.

 

[Lathentar]

I`ve never understood your tax politics. Where I come from the average people pay around 30% tax and the wealthiest up to 50%. We have great welfare and social programs, free healthcare for everyone, free college for everyone, 5 fully paid weeks of vacation every year, and overall the best standard of living on the world, atleast according to UN.

But I guess this isn`t exactly the american dream, which seems to be about grabbing as much as can you for yourself.

Norway right? You also have the benefit of being a rather small country population and size wise compared to America.

 

[Gregory]

Yep.

Sure it`s propably easier when you`re a small country but Canada is pretty similar I believe. So it shouldn`t be impossible for larger countries.

 

[teh_pwn]

California has a greater population than Canada.

 

[ConfusingJazz]

California, if it decided to seperate from the US today, would have the 5th largest GDP in the world.

 

[AntoneM]

well, that settles this argument... California > Cananda. Thread over.

 

[Azih]

Thing is sure, Canada and Norway are much smaller countries than the U.S but the U.S has a ginormous economy that more than compensates. The U.S *can* if it chooses use that GDP to create Universal Healthcare and improve the quality of its public education system from kindergarden right up to post graduate. Thing is this costs money and the only way a government can raise funds is through taxes. Canada and Norway etc. decided that high quality public education and universal health care are important enough to dedicate our GDP too, so we have higher taxes than the U.S. Americans have decided otherwise. Population size is simply not an issue.

The thing that concerns me in this thread is that nothing is said about the amount of revenue that all these tax alternatives are going to generate. Everything is focused on the individual and not on the responsibilites of government. How much VAT would have to be charged so that the government can take in the same amount as revenue as it does currently? In the end would the VAT increase or decrease government revenue? And if it decreases revenue, then how would you decrease government spending to compensate?

Edit: Since California has a bigger economy than Canada and has roughly the same number of people, than California could provide better services to its population that Canada does.

 

[Lathentar]

Edit: Since California has a bigger economy than Canada and has roughly the same number of people, than California could provide better services to its population that Canada does.

If it was its own country.

 

[Azih]

Two things

1) California can tax its citizens as much as it wants, so it can indeed provide services (that california is responsible for) that is superior to those that Canadian provinces provide at the very least. I mean hell, California has an advantage because it doesn't have to spend cash on foreign policy and millitary (that Canada does) and devote all of it's money to education, health care, etc.

2) the U.S has much higher per capita GDP than Canada and slightly higher than Norway. The U.S is its own country isn't it? There is no practical reason why the U.S can't provide public services that are better than even Norways's, only idealogical ones.

 

[Loki]

Edit: Since California has a bigger economy than Canada and has roughly the same number of people, than California could provide better services to its population that Canada does.

You're neglecting the 2.5-5.5 million illegal immigrants (estimates vary) who drain California's healthcare (go read some accounts of ER/Ob-Gyn docs in Cali; Cali hospitals had to be bailed out by the gov't for precisely these reasons) and educational resources without contributing anything to the tax base which subsidizes such provisions. Does Canada as a nation have 3M+ illegals? It's doubtful, since as of Canada's 1991 census, there were only 4.3M immigrants total (legal+illegal) comprising 16% of the population. I doubt that 75%+ of these were illegals (i.e., non-tax paying; after a good 10-15 minutes of searching, I couldn't find an accurate figure for this). Even assuming that the number has increased since '91, California's numbers dwarf Canada's in terms of the actual number of illegals, and, hence, the percentage of the population they comprise (since the populations are relatively equal).

 

[maharg]

That sounds like a bit of a tangent loki. I realize it impacts the practical implications of the argument, but it's still a separate issue that probably deserves its own, separate, debate. It's also worth noting that California actually has 5 million more people period, and that may have some impact on the validity of this problem to the debate at hand.

Check this out for what it looks like if you split *everything* up into its constituent regions. Look at Washington DC go.

 

[Loki]

That sounds like a bit of a tangent loki. I realize it impacts the practical implications of the argument, but it's still a separate issue that probably deserves its own, separate, debate. It's also worth noting that California actually has 5 million more people period, and that may have some impact on the validity of this problem to the debate at hand.

Check this out for what it looks like if you split *everything* up into its constituent regions. Look at Washington DC go.

Yes, it is a bit of a tangent, but it speaks to Azih's claim that since Cali and Canada are of roughly equal populations, and Cali has a greater GDP, that Cali should be able to provide better social services to its constituents than Canada does. Illegal immigration plays a large role in why they can't and don't, so I felt it pertinent. I didn't mean to wander off-topic, but this thread went from a discussion of the merits (or lack thereof) of value-added taxation, to social policy, and eventually to social philosophy (i.e., socialist vs. capitalist with all the shades of gray betwixt them)-- I didn't think it too much of a reach to bring this up.

 

[Alcibiades]

I think it's a good idea, as long as you don't tax essentials...

Can't there be rebates or tax-exempting vouchers/cards or something so that the 1st "thousand" or something people spend on something isn't taxed...

In my state, we stopped using food stamps and now have a card-system where people have a balance left, maybe a certain amount could go untaxed for stuff like certain foods, rent, household goods, etc by having a card keep track of how much is spent, and if under the limit they won't have to pay tax...

or you could do rebates or something, either way there is definitately a way to work around the whole idea that the poor are going to be death-gripped by a change in system of government taxing...

 

[Bishman]

Where is most of our tax money going to?

 

[Phoenix]

Sorry - bad idea.

The whole point of a graded tax system is to take a proportion of tax relevant to a persons means. In order to maintain the same amount of money in the budget (and don't think for a second we'll start having smaller budgets because of this), the tax rate across the board is going to be fairly large because while you may only pay 15-20% of 40K, you now have to -in tax revenue- make up for someone who was paying 33% of 2 million. The net is that in order to maintain that number, the people with more money will pay less and the people with less money will pay more. Averaging the national budget across all Americans just doesn't work... and don't forget that you also have to account for businesses falling into a flat tax system as well so now you relieve the burdon on Time Warner and smack the crap out of Bobs House of Natural Peas.

I have never ever ever seen any flat tax/ VAT system put on paper that actually worked out in the benefit of anyone other than the most wealthy that are paying in the highest bracket.

 

[Boomer]

Ladies and gentlemen, the solution to all of our problems:

http://www.fairtaxvolunteer.org/smart/faq-main.html#14

 

[fart]

You're neglecting the 2.5-5.5 million illegal immigrants (estimates vary) who drain California's healthcare (go read some accounts of ER/Ob-Gyn docs in Cali; Cali hospitals had to be bailed out by the gov't for precisely these reasons) and educational resources without contributing anything to the tax base which subsidizes such provisions. Does Canada as a nation have 3M+ illegals? It's doubtful, since as of Canada's 1991 census, there were only 4.3M immigrants total (legal+illegal) comprising 16% of the population. I doubt that 75%+ of these were illegals (i.e., non-tax paying; after a good 10-15 minutes of searching, I couldn't find an accurate figure for this). Even assuming that the number has increased since '91, California's numbers dwarf Canada's in terms of the actual number of illegals, and, hence, the percentage of the population they comprise (since the populations are relatively equal).

this is both off-topic and wrong.

happy hunting.

 

[DonasaurusRex]

this could work if they redifine what will be taxed. Like taxes on groceries and shit has to go, and wtf is going to happen with taxes you pay on your bills FCC taxes or whatever?