Teh stupid, it hurts.

[Red Arrow]

That's not on wages. Romeny's effective tax rate was more like 15% for example due to capital gains and deferments.

His admin making say 60k would pay 17% payroll tax on everything and depending on deductions may 10-15% on most of the rest. Probably an effective total rate of ~30% or something like that.

Then where did you get your 39% number?

Warren Buffett, Bill Gates, and Mit Romney will not be collecting Social Security benefits based on their entire income so it doesn't bother me at all when the payroll tax portion of their taxes becomes a number down in the dirt regarding their overall tax rates.  I know others here disagree.

[nathanm]

If you give the rich back more money, someone has to make up for it.

It's magic. Actually, the idea is to switch over and then just cut spending enough at some point in the future to make it revenue neutral.

The problem with the income tax isn't the income tax itself, it's transfer pricing and other loopholes that allow the lucky duckies to "earn" their money in offshore trusts that don't get taxed. The wonder of stupid accounting tricks. Keep that in mind when companies complain about how much money they have "trapped" off shore. It's not generally that they're getting favorable tax treatment of their offshore manufacturing operations, it's that they "sold" all the business' IP to a shell company in Ireland or where ever that "charges" the real business almost all of its profit for use of said IP. It's a complete scam, but we continue to let them get away with it.

[heironymouspasparagus]

Then where did you get your 39% number?

Warren Buffett, Bill Gates, and Mit Romney will not be collecting Social Security benefits based on their entire income so it doesn't bother me at all when the payroll tax portion of their taxes becomes a number down in the dirt regarding their overall tax rates.  I know others here disagree.

You only collect based on the amount you pay.  And when that amount stops at just over $100,000, that is the basis used for calculation.  If it was $200,000, then the benefit would be calculated on that amount.

[swake]

You don't get it. 

I'm not the one not getting here, you are wanting something from nothing.

[swake]

Then where did you get your 39% number?

Warren Buffett, Bill Gates, and Mit Romney will not be collecting Social Security benefits based on their entire income so it doesn't bother me at all when the payroll tax portion of their taxes becomes a number down in the dirt regarding their overall tax rates.  I know others here disagree.

39% is the estimated new effective tax rate on wages for the top 1%. Romney made almost no wages.

[carltonplace]

Are non-tangible purchases "taxable" in the fair tax model?

Yacht = Taxable
Stock = Non-taxable

[Red Arrow]

39% is the estimated new effective tax rate on wages for the top 1%. Romney made almost no wages.

So you are using a rate that almost no one will pay to argue that the 23% (30%) that almost everyone will pay will produce less income to the federal treasury than the 39% would.

[swake]

So you are using a rate that almost no one will pay to argue that the 23% (30%) that almost everyone will pay will produce less income to the federal treasury than the 39% would.

So capital gains would be considered plain earnings in this plan? The Koch brothers would have kittens. This is their idea, and I don't believe that for a second.

[Gaspar]

Are non-tangible purchases "taxable" in the fair tax model?

Yacht = Taxable
Stock = Non-taxable

Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax.

Since most of the stock market is comprised of individual retirement savings, this represents a huge boom to the average person.

[Townsend]

Everyone's doing a great job of convincing themselves of their own opinions.

Has anyone switched?

[sgrizzle]

Consider this: Facebook paid $0 in federal taxes this year (maybe even got a refund, depending which site you read) other than payroll contributions.

Under fair tax, Facebook would have paid taxes on every server they bought, every pen and every piece of office furniture. They wouldn't pay less because their IPO went bad. They wouldn't pay less because they created "quality jobs." They wouldn't pay less because they choose to lease and write the assets off as O&M expense. They would pay the set rate period.

[sgrizzle]

Everyone's doing a great job of convincing themselves of their own opinions.

Has anyone switched?

I heard ttownclown goes both ways sometimes.

[Red Arrow]

So capital gains would be considered plain earnings in this plan? The Koch brothers would have kittens. This is their idea, and I don't believe that for a second.

Capital gains?  That makes it even more difficult to believe your 39% effective rate on the rich.

I believe the subject is a 23% (30%) consumption tax vs 39.6% marginal rate on taxable income above $400,000.00 for a person filing single. ($450,000 married filing jointly and $425,000. head of household).  A single person with $399,999. of taxable income would pay approximately $116,163 in Fed Income Tax, or about 29%.  Taxable income above $400,000 (single person) would be taxed at 39.6%.  It would take a taxable income of (approx) $7,039,500 to get an overall rate of 39%.  That's the upper reaches of the "1%ers". 

[Gaspar]

Capital gains?  That makes it even more difficult to believe your 39% effective rate on the rich.

I believe the subject is a 23% (30%) consumption tax vs 39.6% marginal rate on taxable income above $400,000.00 for a person filing single. ($450,000 married filing jointly and $425,000. head of household).  A single person with $399,999. of taxable income would pay approximately $116,163 in Fed Income Tax, or about 29%.  Taxable income above $400,000 (single person) would be taxed at 39.6%.  It would take a taxable income of (approx) $7,039,500 to get an overall rate of 39%.  That's the upper reaches of the "1%ers". 

Red,
Those lower numbers are only convenient when talking about the evil rich not paying their fair share.  It's the other way around for this argument.  Duh!

[Red Arrow]

Those lower numbers are only convenient when talking about the evil rich not paying their fair share.  It's the other way around for this argument.  Duh!

I am frequently surprised with the number of folks that don't (appear) to understand how the tax brackets work.