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Thread: Sales taxes are not more regressive than income taxes.

  1. #31
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    Quote Originally Posted by Jets View Post
    The national sales tax (Fair Tax) could work if applied correctly. The prebate would need to be tweaked and increased for the lower and middle incomes to benefit.
    And once the tweaking begins, the fairtax is on the road to intrusiveness, and complication - the very things the fairtax creators claim their scheme avoids.
    Last edited by labrea; 20th October 2017 at 06:30 AM.

  2. #32
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    Sales taxes are not more regressive than income taxes.

    Quote Originally Posted by Babba View Post
    Not only would a national sales tax be regressive, no matter what the prebate is, and not only would it reduce tax revenues when we already have a debt and a deficit that is too high, but it would stifle economic activity. It would be a disaster all the way around.
    With all due respect, disagreed. If for discussion purposes the prebate was $1,000 a month. Everyone at some has to buy a good or service, even if itís food,clothing, and shelter. That alone will generate that economic activity. We can reasonably assume that people tend to spend beyond their means and now they have a larger take home paycheck.
    Last edited by Jets; 20th October 2017 at 05:39 AM.

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    Quote Originally Posted by Jets View Post
    Bullshit. If the lower incomes had higher prebates it means MORE money for them. It lowers the burden of the consumption tax. Whether itís labeled regressive or not is irrelevant. IT MEANS ALL PEOPLE TAKE HOME THEIR ENTIRE PAYCHECKS!!!!
    Define "entire paycheck".

  4. #34
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    Quote Originally Posted by Jets View Post
    I can explain how I would benefit as an example: Because I the worker get the first cut before the government does. My consumption to an extent determines my tax burden. If I save the money I do not get taxed nor if I invest it. The taxes do not get taken out till a good or service is purchased.
    How long do you think you can avoid purchasing a good or service? Just imagine the sales tax on a new home purchase, a car, the cost of drugs, a visit to the doctor, and dentist, the food you buy at the grocery store, farmers market (not much future in the used food department). The fairtax also taxes the rent you pay, but not the rent income your landlord collects.

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    Quote Originally Posted by labrea View Post
    Define "entire paycheck".
    Point taken. The state governments would have to have their own sales tax also. I should have said either more take home pay or used both together to define entire paycheck. I stand corrected.

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    Quote Originally Posted by labrea View Post
    How long do you think you can avoid purchasing a good or service? Just imagine the sales tax on a new home purchase, a car, the cost of drugs, a visit to the doctor, and dentist, the food you buy at the grocery store, farmers market (not much future in the used food department). The fairtax also taxes the rent you pay, but not the rent income your landlord collects.
    True, but the prebate and the higher take home amount put more in your pocket from the get go. Thatís why I believe the higher prebate is essential to offset that heavy tax burden. Why, because everyone has to buy a good or service.

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    Quote Originally Posted by Neomalthusian View Post
    I don't think there is any practical way, even with prebates, to make a consumption tax not-regressive when considered relative to our current income tax structure, unless if the rates escalated according to some determination of luxury qualities. Certain theorists sometimes advocate for this kind of thing, but it tends not to satisfy liberals because nothing prevents someone like Jeff Bezos from living in a 2-bedroom ranch, driving a Corolla and shopping at Old Navy while accumulating his billions. The mere right of anyone to possess billions is intolerable to leftists, no matter how everyone else is doing.

    So they are always going to advocate a tax structure that confiscates the most, whereas the success of a luxury (over-consumption) tax would be measured by how little it brings in, because it would indicate greater consumption equality.

    I always find it funny though, that those who squeal for the need to establish progressive taxation are often some of the fiercest opponents of welfarizing Social Security and Medicare, which are (partially) funded by a flat tax on income. To leftists, regressive taxation is just fine, as long as it's to pay unfunded pension liabilities.
    But just think - the fairtax double taxes the savings retirees have managed to accumulate. That must be a plus for you.

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    Quote Originally Posted by Jets View Post
    Point taken. The state governments would have to have their own sales tax also. I should have said either more take home pay or used both together to define entire paycheck. I stand corrected.
    The implication of the phrase "entire paycheck" is that you get to take home all the tax money that is deducted now, however there are no guarantees that that would be the case. Your take home pay could well be the same as it is now, but you will still have your Tax to pay at at nearly 30% when you pay your rent, buy gas for your car, new underwear, etc.

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    Quote Originally Posted by Jets View Post
    True, but the prebate and the higher take home amount put more in your pocket from the get go. That’s why I believe the higher prebate is essential to offset that heavy tax burden. Why, because everyone has to buy a good or service.
    You may believe the higher prebate is necessary, but it's not part of the plan, is it.

  10. #40
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    Quote Originally Posted by Jets View Post
    True, but the prebate and the higher take home amount put more in your pocket from the get go. That’s why I believe the higher prebate is essential to offset that heavy tax burden. Why, because everyone has to buy a good or service.
    But the average American's federal tax burden isn't onerous. In many cases state and local taxes are quite onerous. And that's partly because states and localities are so dependent on sales taxes. And so the wealthy pay a much lower percentage of their income in taxes than middle and lower income people. That's why state and local taxes are so regressive.
    Thanks from labrea

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