You should read the proposed national consumption tax plans before assuming that.

 

There would be huge credits per person that would exempt basically all spending for lower income people/families and much of the spending of middle class families.

 

http://www.fairtax.org/site/PageServer?pagename=FAQs#3

 

If you're interested, read that linked page. And pay close attention to the bar chart.

 

Didn't know you were talking about the Fair Tax specifically. That's a pretty heavily modified consumption tax. But yes, under their plan it's far less regressive. It still leaves the problem of having annual returns to establish the tax rate at which everyone receives a "prebate" doesn't it?

Consumption taxes aren't progressive, they're frequently regressive; a higher percentage of a poor person's total income would likely go to taxes even though she would pay less in total tax than a wealthy person.

 

You just said it . It depends on how you define progressive. By % or total dollar. Neither of you are wrong.

Yes it still requires work. The only way for it to be progressive is most likely to have us report our income to the govt so they can establish the prebates.

 

I'm not necessarily in favor of the Fair Tax over other consumption tax plans, it's just "a" plan. And I'm not making any kind of political argument. I couldn't care less about the political impact and which party, if any, might agree.

 

I'm really for simplifying and encouraging good decision making.

 

A straight consumption plan with no progressiveness would just be a set sales tax % that we all would pay at the register. The only way to make that type of plan somewhat progressive (though not as progressive as the Fair tax) would be to exempt food, clothing,etc. But you're exempting it for rich people too. Is that ok with you?

 

It's a tough sell to congress because they love controlling who gets what and pitting groups against each other. The straight sales tax with exemptions for certain expenditures is probably a harder sell than the Fair tax or something like it.

 

I dont know. What do you think?

Actually, Bash, I could be you! Did you notice we have the exact same join dates?!

 

:puke:

You just said it . It depends on how you define progressive. By % or total dollar. Neither of you are wrong.

 

Right, since he was talking about the Fair Tax. A consumption tax without those changes is going to be regressive as it would create an inverse relationship between the tax rate and the taxpayer's ability to pay. We're getting it figured out.

Consumption taxes aren't progressive, they're frequently regressive; a higher percentage of a poor person's total income would likely go to taxes even though she would pay less in total tax than a wealthy person.

 

That's the argument I always hear...but I just don't see it that way. People with more money buy more...and usually more expensive things. For instance, I bought a used 2010 Ford Focus. Mr. Money bags muti millionaire aint rolling that way...he buys a Rolls Royce...AND a 70 foot yacht...and with a consumption he pays a LOT to be able to do that. I live in a 1,300 sf vinyl sided single family home. Mr. Money lives in a 18,000 sf mansion...complete with personal security guards, maids, groundskeepers, etc. With a consumption tax...sure rich people can by more...but they also pay to do it, and there's no way/loophole around it that's prevents them from paying that tax. You keep more of the money you earn...makes conservatives happy. You pay your tax when you purchase stuff and there is NO way around it for the rich to get out of doing that...makes Liberals happy...I would think anyway.

 

With all that said...the rich will ALWAYS have more buying power than the poor and the middle class. And why shouldn't they? I mean, isn't that the way it's supposed to work?

 

Just saw the post on the fair tax. That I like and would back.

Didn't know you were talking about the Fair Tax specifically. That's a pretty heavily modified consumption tax. But yes, under their plan it's far less regressive. It still leaves the problem of having annual returns to establish the tax rate at which everyone receives a "prebate" doesn't it?

 

Like the idea of the fair tax...like you said a somewhat modified consumption tax.

Why are we discussing 'fair' taxes. Because taxes (revenue) is not keeping up with expenditures. Why is that happening. Mainly due to the impact of Medicare/Medicade on the budget. Its a hard truth. But it is the truth. The financial 'model' for those programs has been broken for over a decade. Unlike Social Security Medicare/Medicaid are 'on-budget' and they are swamping the budget, creating massive borrowing that increase interest that must be legally paid -to the (private entity) Fed mostly, of course.

 

No one wants to deal with Gorilla in the room. So we argue what is fair in an environment where more taxes are needed. Double everyone's taxes, start to tax those who do not pay any Federal tax at all to some modest extent. Guess what? The ship still takes on water and still sinks. Its the proverbial 'rearranging of the deck chairs on the Titanic.'

Why are we discussing 'fair' taxes. Because taxes (revenue) is not keeping up with expenditures. Why is that happening. Mainly due to the impact of Medicare/Medicade on the budget. Its a hard truth. But it is the truth. The financial 'model' for those programs has been broken for over a decade. Unlike Social Security Medicare/Medicaid are 'on-budget' and they are swamping the budget, creating massive borrowing that increase interest that must be legally paid -to the (private entity) Fed mostly, of course.

 

No one wants to deal with Gorilla in the room. So we argue what is fair in an environment where more taxes are needed. Double everyone's taxes, start to tax those who do not pay any Federal tax at all to some modest extent. Guess what? The ship still takes on water and still sinks. Its the proverbial 'rearranging of the deck chairs on the Titanic.'

 

Very true...we have a spending problem more so than a tax problem. Problem with that, though, is that you have a very large portion of those in charge who think the solution is...MORE TAXES, rather than less spending/cuts.

Why are we discussing 'fair' taxes. Because taxes (revenue) is not keeping up with expenditures. Why is that happening. Mainly due to the impact of Medicare/Medicade on the budget. Its a hard truth. But it is the truth. The financial 'model' for those programs has been broken for over a decade. Unlike Social Security Medicare/Medicaid are 'on-budget' and they are swamping the budget, creating massive borrowing that increase interest that must be legally paid -to the (private entity) Fed mostly, of course.

 

No one wants to deal with Gorilla in the room. So we argue what is fair in an environment where more taxes are needed. Double everyone's taxes, start to tax those who do not pay any Federal tax at all to some modest extent. Guess what? The ship still takes on water and still sinks. Its the proverbial 'rearranging of the deck chairs on the Titanic.'

 

Good post...:clap:...except I thought it was an elephant in the room.

Good post...:clap:...except I thought it was an elephant in the room.

 

Elephant, 800 lb Gorilla...I am not up on my sayings....

 

But all the politicians are ignoring it. Another 3rd rail in the political game.