Teh stupid, it hurts.

[Gaspar]

I'm a proponent of the Fair Tax, but one thing I don't see is that the money spent on compliance is withheld from the economy now.  Ostensibly that's money that goes to tax attorneys and accounting firms which will recirculate that money throughout the economy via payroll, dividends for shareholders, and corporate expenses.

I mainly like the idea of the Fair Tax for getting rid of all the loopholes and gimmicks people employ for tax avoidance as well as you said, it takes it out of the hands of politicians and their special interests or power bases. 

Broken Window Fallacy. . .That which is seen, and that which is not seen.

The government forces compliance with tax code that requires billions of man-hours of labor.  Sure that travels up the chain for a short period, but it is not circular like free market exchanges.  There is no ultimate product or service that produces a benefit with value.

The government could do the same thing by requiring that every tax payer throw rocks through your windows once a year, and then pay to have them replaced.  Sure there would be quite a boom in the window industry, but overall it would represent an extraction of capital and labor from the free market at the very bottom. . .You the tax payer.

All of that effort on the part of the attorneys and CPA's and regular folks would be far more productive if engaged in market activities that were actually productive in nature.

[carltonplace]

Geeze!  Where do you get your info? 

Oil Filter <--23%
5W40    <--23%
Labor     <--23%

Services are taxed at the same rate.

Service providers are not exempt from the income tax today, and should not be exempt from the FairTax. Services now account for well over one-half of the gross domestic product (GDP). Neither consumption of services nor consumption of goods should be tax preferred. And it is economically foolish not to tax the fastest growing segment of our economy. Competition, not politics, should determine what goods and services cost.

Keep trying.  Eventually you will find something that will stick.

OK, is this right?

Stock Purchase-> 0%
Stock Broker -> 23%

Just trying to understand this scheme.

[Gaspar]

OK, is this right?

Stock Purchase-> 0%
Stock Broker -> 23%

Just trying to understand this scheme.

Exactly!  Why would you tax a stock purchase?

[nathanm]

Why would you tax a stock purchase?

Because it's a sale and you are advocating a national sales tax. Let the loopholes begin!

[dbacks fan]

Because it's a sale and you are advocating a national sales tax. Let the loopholes begin!

So you want to tax the purchase of stock, then tax the dividend, and also tax the capital gains on the stock?

[nathanm]

So you want to tax the purchase of stock, then tax the dividend, and also tax the capital gains on the stock?

IIRC, the Fair Tax proposal eliminates capital gains tax entirely. (as opposed to the current situation of only applying to US citizens/residents) Dividends would be taxed when/if they were spent.

[dbacks fan]

IIRC, the Fair Tax proposal eliminates capital gains tax entirely. (as opposed to the current situation of only applying to US citizens/residents) Dividends would be taxed when/if they were spent.

Thanks, will look into it.

[heironymouspasparagus]

The government forces compliance with tax code that requires billions of man-hours of labor.  Sure that travels up the chain for a short period, but it is not circular like free market exchanges.  There is no ultimate product or service that produces a benefit with value.

You are just reinforcing the case I have made here and elsewhere for years that NO personal tax situation should ever exist.  All taxes should go through corporations/companies, since they are already required to deal with that professionally anyway - no cost structure change at all - just moving numbers with computers.  The IRS could be miniscule compared to today, having to deal with only a few million entities versus 150 + million. 

[Gaspar]

Because it's a sale and you are advocating a national sales tax. Let the loopholes begin!

It is not a sale contingent on any form of usage.  It is a stake in a company or group of companies, and contingent on the success or failure of that company.  The idea is to encourage such activity in the economy.  Savings and investment should never be taxed.  We want to reward people for investing in the economy.

Investment is not something that just rich people do. 

[heironymouspasparagus]

It is not a sale contingent on any form of usage.  It is a stake in a company or group of companies, and contingent on the success or failure of that company.  The idea is to encourage such activity in the economy.  Savings and investment should never be taxed.  We want to reward people for investing in the economy.

Investment is not something that just rich people do. 

Parsing and rationalization.

Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!

As for that nonsensical crap about "discouraging investment" we hear so much about - that's a load of garbage.  Never stopped anyone at any time from trying the invest as much as they were going to anyway in hopes they could make as much as possible.  NO ONE ever in the history of the world EVER sat there looking at their portfolio and decided to take money out of an appreciating investment to let it set quietly doing nothing.  Just to avoid some tax.    What a crock for the liars advancing that notion on our national stage (Rupert Murdoch and his ilk for one group) to even make the noises of such a ridiculous idea!!

[Gaspar]

Parsing and rationalization.

Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!

As for that nonsensical crap about "discouraging investment" we hear so much about - that's a load of garbage.  Never stopped anyone at any time from trying the invest as much as they were going to anyway in hopes they could make as much as possible.  NO ONE ever in the history of the world EVER sat there looking at their portfolio and decided to take money out of an appreciating investment to let it set quietly doing nothing.  Just to avoid some tax.    What a crock for the liars advancing that notion on our national stage (Rupert Murdoch and his ilk for one group) to even make the noises of such a ridiculous idea!!

You officially make no sense, and this proves it.
There are two things that EVERY intelligent investor takes into consideration when choosing to buy, sell, or otherwise convert a stock.  First is if the stock pays a dividend that he/she will lose eligibility for by selling the stock at a premature time, and second is how tax liability affects the sale or the timing of the sale.

In discussing the Fair Tax we are not discussing INCOME tax.  We are discussing USEAGE tax. 

Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!

Your initial point with the two exclamation points is therefore misplaced.

[heironymouspasparagus]

You officially make no sense, and this proves it.
There are two things that EVERY intelligent investor takes into consideration when choosing to buy, sell, or otherwise convert a stock.  First is if the stock pays a dividend that he/she will lose eligibility for by selling the stock at a premature time, and second is how tax liability affects the sale or the timing of the sale.

In discussing the Fair Tax we are not discussing INCOME tax.  We are discussing USEAGE tax.  Your initial point with the two exclamation points is therefore misplaced.

Whew!  Always trying to deflect.  Yes, you do look at dividends and taxes related to the timing of investing.  What I actually said, though, was that NO one ever looked at an appreciating investment (and I will add the condition that many times a non-appreciating or declining investment) and decide to take the money out and let it do nothing.  That investor will always do something with the money.  Perhaps it is parked in a quiet little corner somewhere - not making much, which is why we are still able to sell treasuries - waiting for the right "next" investment to come along, like Buffet with his tens of billions in cash, or Apple with their hundred billion + in cash.  But they DO NOT and NEVER WILL stop investing just because it might cost them a tax.

The small number of eccentrics that you are thinking of right now who put their life savings in a "mattress" somewhere are the lunatic fringe that lead to a whole other discussion....and none of them would ever be considered investors anyway.


Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!
Which leads to the next comment regarding the whole premise of the falsely named "Fair Tax".  Especially as it is discussed in the RWRE media - always mentioning a number of 10% as the "Fair" rate.  Even though they know for a fact that the real level necessary would actually be very much higher to replace the current income levels we demand for our unfunded wars and bailouts of billionaires.  But that is ok, at least they will be able to transfer much of the load to the 47%ers that Romney made famous by his disdain and dismissiveness.

What is the 'retail' portion of our $15 trillion dollar economy that would be subject to this tax??  Maybe 1/2?  Or 2/3??  If we take 10% of that 2/3, we are talking about $1 billion in revenue going to fund all the things we are currently spending $3.6 trillion on (2012).  To actually PAY for the spending with this grotesque mockery of the word "Fair", we would need that rate to be 36%!!  Across the board for everyone.  That would be a huge increase in the financial load for everyone, including the 1%ers, who obviously can't do basic ratios and fractions. 









 

[Gaspar]

Whew!  Always trying to deflect.  Yes, you do look at dividends and taxes related to the timing of investing.  What I actually said, though, was that NO one ever looked at an appreciating investment (and I will add the condition that many times a non-appreciating or declining investment) and decide to take the money out and let it do nothing.  That investor will always do something with the money.  Perhaps it is parked in a quiet little corner somewhere - not making much, which is why we are still able to sell treasuries - waiting for the right "next" investment to come along, like Buffet with his tens of billions in cash, or Apple with their hundred billion + in cash.  But they DO NOT and NEVER WILL stop investing just because it might cost them a tax.

The small number of eccentrics that you are thinking of right now who put their life savings in a "mattress" somewhere are the lunatic fringe that lead to a whole other discussion....and none of them would ever be considered investors anyway.


Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!
Which leads to the next comment regarding the whole premise of the falsely named "Fair Tax".  Especially as it is discussed in the RWRE media - always mentioning a number of 10% as the "Fair" rate.  Even though they know for a fact that the real level necessary would actually be very much higher to replace the current income levels we demand for our unfunded wars and bailouts of billionaires.  But that is ok, at least they will be able to transfer much of the load to the 47%ers that Romney made famous by his disdain and dismissiveness.

What is the 'retail' portion of our $15 trillion dollar economy that would be subject to this tax??  Maybe 1/2?  Or 2/3??  If we take 10% of that 2/3, we are talking about $1 billion in revenue going to fund all the things we are currently spending $3.6 trillion on (2012).  To actually PAY for the spending with this grotesque mockery of the word "Fair", we would need that rate to be 36%!!  Across the board for everyone.  That would be a huge increase in the financial load for everyone, including the 1%ers, who obviously can't do basic ratios and fractions. 

You haven't been paying attention, however you are still willing to post.  I suppose that is ok.
Isn't there a "legalize marijuana" thread somewhere that requires your attention?

[nathanm]

It is not a sale contingent on any form of usage.

Fair Tax does not purport to create a use tax, it purports to create a sales tax. Whether or not an exemption for certain sales is a good idea, you're still advocating for a loophole. Extra irony is involved because a large part of the propaganda in favor of the Fair Tax is based on its lack of loopholes.

FWIW, I don't actually think a sales tax on stock is a good idea. (nor do I think the Fair Tax is a good idea) It gives even more tax advantages to debt over equity, which leads to less stable enterprises and a less stable overall economy.

[heironymouspasparagus]

You haven't been paying attention, however you are still willing to post.  I suppose that is ok.
Isn't there a "legalize marijuana" thread somewhere that requires your attention?

Sadness ensues.  You don't get it...!

Well, that's ok.  Just enough of the country does get it, so that we aren't stuck with another "tax cut Pollyanna" for at least the next 4 years on a national basis.  Now, if Oklahoma could just get a clue....

And as always, we can count on you to attempt to disparage rather than addressing the FACT that the "Fair Tax" would be fiscally catastrophic to the nation if we were so stupid as to enact such a thing.  And the great masses of "proponents" are either lying...a near certainty of the Murdochian inner circle or so horribly naive to think for even a second or two that there would NOT be a less than trivial income tax retained....well, it is literally breathtaking that seemingly rational people would actually have such elementary though processes.