Hey!! Who's pulling the Bandwagon????

That worry about you and I'll worry about me mentality is exactly what's wrong with this system. We don't even have a society of people that will take care of their family. We should worry about each other - not because the government tells us to, but because it's the right thing to do.

A CEO shouldn't get generationally wealthy based on poor performance of his/her company while they have thousands of people struggling. The government shouldn't have to step in and regulate that kind of stuff. It should just be different. Societally, we have really jacked up priorities IMHO.

FWIW, I work really hard, and pay in a whole lot more than many opining here I'd wager. I'm not talking about sour grapes, I'm talking about having some regard for other people...

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Originally Posted by gugi

One other point about progressive taxation that I didn't see mentioned.
If you already have say $100 000 you will be taxed higher percentage on each additional dollar you get than if you have only $10 000.
However I think most people would agree that (in absence of taxes) it's also easier to make extra dollars if you already have $100 000 than if you have $10 000.

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Yeah, but there's another issue here. First, wealthy people aren't hit by the taxes as they were intended to be. High Wage earners are. There is a huge difference. If I have $1 million, I can make long term capital gain investments and pay a significantly lower amount of tax on that those gains than someone who earns a $1 million salary. The wealthiest among us are not stupid, and they pay people a lot of money to avoid the taxes. So, what happens is they start lowering the threshold at which someone is declared "rich" and start coming at those in the upper-middle class. They are the ones being taxed disproportionately the hardest as a whole (except for the rare occasions that there are really high wage earners).

If anyone thinks making $100K, even $200K, makes you rich (not talking to you Ivan), you couldn't be more wrong.

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Originally Posted by richmondesi

Yeah, but their's another issue here. First, wealthy people aren't hit by the taxes as they were intended to be. High Wage earners are. There is a huge difference.

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Its the wealthy who oversee the tax laws that are being written and instituted, those of us who have to work don't have the time and cannot afford the lobbyists, we do not have the influence.

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Originally Posted by Wildtim

I'm not sure it would be "unfair" The poorer tend to buy cheaper things in general so would pay less tax per item as well as buying fewer items. Really it is up to each consumer how much tax they would be willing to pay.

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And this is exactly one of the main problems with a sales tax-based system. While it is true we would all pay basically the same tax on essential living items (food, clothing, etc.) the problem is this: let's say I'm a very wealthy guy and earn $750,000 this year. There's no income tax, so I keep everything I earn. If I was to decide just to "take it easy", not buy a new car, or a boat, etc--just live a very moderate lifestyle for the year, I'd pay no more in taxes than someone earning $75,000 a year. So under this set of facts, someone who earns $750,000 pays the same amount in taxes as someone who earns 1/10 of that amount. Now I understand the guy who earns $750,000 is likely to spend more money than the $75,000 earner, but there would be a significant incentive for the higher earner not to spend on things subject to a national sales tax, and simply save his money so it's not taxed. The less he spends on purchases, the more he shields his income from taxation. I don't think this would lead to the kind of income system that would work too well. The higher earner could also decide to "buy, buy, buy" everything he needs in one year, and then take a spending hiatus for the next 2 years, which again would mean he wouldn't be paying any more in taxes during the 2 non-spending years than someone earning far less.
The other problem with a national sales tax system is that the amount of revenue into the government would wildly fluctuate depending upon how the economy is performing. Revenue would drop sharply under the kind of economic conditions were are currently experiencing; taxing income provides a more stable and predictable revenue stream. That's why we've been doing what we're doing for so long.
Unfortunately, there are no easy answers.

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Originally Posted by billyjeff2

And this is exactly one of the main problems with a sales tax-based system. While it is true we would all pay basically the same tax on essential living items (food, clothing, etc.) the problem is this: let's say I'm a very wealthy guy and earn $750,000 this year. There's no income tax, so I keep everything I earn. If I was to decide just to "take it easy", not buy a new car, or a boat, etc--just live a very moderate lifestyle for the year, I'd pay no more in taxes than someone earning $75,000 a year. So under this set of facts, someone who earns $750,000 pays the same amount in taxes as someone who earns 1/10 of that amount. Now I understand the guy who earns $750,000 is likely to spend more money than the $75,000 earner, but there would be a significant incentive for the higher earner not to spend on things subject to a national sales tax, and simply save his money so it's not taxed. The less he spends on purchases, the more he shields his income from taxation. I don't think this would lead to the kind of income system that would work too well. The higher earner could also decide to "buy, buy, buy" everything he needs in one year, and then take a spending hiatus for the next 2 years, which again would mean he wouldn't be paying any more in taxes during the 2 non-spending years than someone earning far less.
The other problem with a national sales tax system is that the amount of revenue into the government would wildly fluctuate depending upon how the economy is performing. Revenue would drop sharply under the kind of economic conditions were are currently experiencing; taxing income provides a more stable and predictable revenue stream. That's why we've been doing what we're doing for so long.
Unfortunately, there are no easy answers.

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One of the strengths of the Fair Tax is that the price of goods wouldn't really go up all that much because of the embedded costs of taxes in the goods we buy. So, the incentive to not consume would be lesser than you might fear. Combined with prices staying pretty much the same, the increased buying power by removing the payroll taxes would really stimulate the economy.

However, the problem with this is that the government loses the ability to influence behavior to the extent that the current tax code allows them to... That's why it'll never happen

You know, I can't take the government seriously when they cry and moan that they don't have any money but don't impose any immigration quotas. At least not on our southern border. Then bestow all the benefits that American citizens have access to to children of illegal immigrants. It's insane.

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Originally Posted by gugi

That's actually quite easy to answer.
At least that how the representative democracy is meant to work and I think in US it's working quite well. If you don't like the results I think you need to reevaluate the fundamentals.

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It is not working quite well. If it were, there would not be so many PO'd people on both sides of the equation with a government that sells itself to the highest bidder sitting in the middle.

And no, we do not need to reevlauate the fundamentals. We need to reevaluate the execution of the fundamentals. The framer of the constitution had it right, but we screwed it up generationally screwed it up.

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Originally Posted by billyjeff2

And this is exactly one of the main problems with a sales tax-based system. While it is true we would all pay basically the same tax on essential living items (food, clothing, etc.) the problem is this: let's say I'm a very wealthy guy and earn $750,000 this year. There's no income tax, so I keep everything I earn. If I was to decide just to "take it easy", not buy a new car, or a boat, etc--just live a very moderate lifestyle for the year, I'd pay no more in taxes than someone earning $75,000 a year. So under this set of facts, someone who earns $750,000 pays the same amount in taxes as someone who earns 1/10 of that amount. Now I understand the guy who earns $750,000 is likely to spend more money than the $75,000 earner, but there would be a significant incentive for the higher earner not to spend on things subject to a national sales tax, and simply save his money so it's not taxed. The less he spends on purchases, the more he shields his income from taxation. I don't think this would lead to the kind of income system that would work too well. The higher earner could also decide to "buy, buy, buy" everything he needs in one year, and then take a spending hiatus for the next 2 years, which again would mean he wouldn't be paying any more in taxes during the 2 non-spending years than someone earning far less.
The other problem with a national sales tax system is that the amount of revenue into the government would wildly fluctuate depending upon how the economy is performing. Revenue would drop sharply under the kind of economic conditions were are currently experiencing; taxing income provides a more stable and predictable revenue stream. That's why we've been doing what we're doing for so long.
Unfortunately, there are no easy answers.

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You make some good points based on the supposition you made. But in reality, wealthy people buy stuff. They buy expensive stuff. And they will continue to buy expensive stuff. Oh sure, not all of them and not all the time, but buy they will, and pay taxes they will.

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Originally Posted by billyjeff2

And this is exactly one of the main problems with a sales tax-based system. While it is true we would all pay basically the same tax on essential living items (food, clothing, etc.) the problem is this: let's say I'm a very wealthy guy and earn $750,000 this year. There's no income tax, so I keep everything I earn. If I was to decide just to "take it easy", not buy a new car, or a boat, etc--just live a very moderate lifestyle for the year, I'd pay no more in taxes than someone earning $75,000 a year. So under this set of facts, someone who earns $750,000 pays the same amount in taxes as someone who earns 1/10 of that amount. Now I understand the guy who earns $750,000 is likely to spend more money than the $75,000 earner, but there would be a significant incentive for the higher earner not to spend on things subject to a national sales tax, and simply save his money so it's not taxed. The less he spends on purchases, the more he shields his income from taxation. I don't think this would lead to the kind of income system that would work too well. The higher earner could also decide to "buy, buy, buy" everything he needs in one year, and then take a spending hiatus for the next 2 years, which again would mean he wouldn't be paying any more in taxes during the 2 non-spending years than someone earning far less.
The other problem with a national sales tax system is that the amount of revenue into the government would wildly fluctuate depending upon how the economy is performing. Revenue would drop sharply under the kind of economic conditions were are currently experiencing; taxing income provides a more stable and predictable revenue stream. That's why we've been doing what we're doing for so long.
Unfortunately, there are no easy answers.

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So you are saying that if you made 3/4 of a million a year you wouldn't live the lifestyle you had earned by having that kind of salary?

Why would it be so wrong to reward even a millionaire for being willing to save?

Revenue should drop sharply during a recession, mine has, so has everyone else's, except the governments who is insulated from such realities.

Geeze, I would think you had the idea that the government "deserves" our money for some reason.

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Originally Posted by Alembic

It is not working quite well. If it were, there would not be so many PO'd people on both sides of the equation with a government that sells itself to the highest bidder sitting in the middle.

And no, we do not need to reevlauate the fundamentals. We need to reevaluate the execution of the fundamentals. The framer of the constitution had it right, but we screwed it up generationally screwed it up.

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OK, I think you probably have somewhat different definition of fundamentals than I do, but for the sake of having a rational argument, let's not rely on postulates (framers had it right) and false substitutions (the desired results with the actual framework).

As far as I can tell especially nowadays it is extremely rare that people are denied their right to vote (and of course that's different than it once was, but it was changed within the proscribed process of doing it).
And the different branches of the government still function as prescribed, so there are various 'checks and balances' in place.

If you would to convince me everything is set up properly, but somehow somebody didn't do it as it was meant to be done you will have to point out who, when and what was done wrong and then you'll have to answer my first question, why wasn't that (self)corrected, if the system is really set up well.

From what I can see the current result is just a natural outcome of the way the political system is designed to work. And I have thought about this for several years now, it's not something I decided to post because it just occurred to me.