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

  1. #41
    A Blue Dog Jets Fan Jets's Avatar
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    Sales taxes are not more regressive than income taxes.

    Quote Originally Posted by Babba View Post
    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.
    I understand that, but let’s break this down. Either the government gets the first cut thru income tax or the government collects the second cut thru consumption. In either situation one is paying something, the difference is the order of the collection.

    That said, onerous is a subjective term. For example, if a person pays $400 or more in federal taxes per check many would consider that onerous and would prefer to have that money up front and in their check.

    IMO

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    Quote Originally Posted by Jets View Post
    I understand that, but let’s break this down. Either the government gets the first cut thru income tax or the government collects the second cut thru consumption. In either situation one is paying something, the difference is the order of the collection.

    That said, onerous is a subjective term. For example, if a person pays $400 or more in federal taxes per check many would consider that onerous and would prefer to have that money up front and in their check.

    IMO
    The other thing I haven't seen mentioned is the perspective. For example I see people who fume at paying federal taxes but are more agreeable to local and sales taxes since they see something for their money. Schools, roads, police, fire etc. So its all how its packaged as well. Which is why many states are able to have very high local taxes yet they rile at any mention of higher federal taxes.
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  3. #43
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    Quote Originally Posted by splansing View Post
    Literally, by definition:
    You would literally have to propose tax brackets that go down as your income goes up to come up with something more regressive than a sales tax, especially one on basic necessities.
    Quote Originally Posted by OldGaffer View Post
    But the poorer you are the bigger percentage of your income must be spent to provide food, shelter and clothing, approaching 100%, whereas Buffet only needs to subject less than 1% of his income to sales taxes, the other 99.9% would remain as saving or investment and tax free, exacerbating income inequality to the French and Russian Revolution levels. Unless you favor a hereditary aristocracy unlike the Founders who thought it was a great evil.
    Quote Originally Posted by One View Post
    So you have to sit on your money to avoid taxes. And now the government has lost revenue because people avoid spending to avoid taxes. Now they are going to have to make up that shortfall somewhere else. Hmm...good excuse to institute a new tax somewhere.
    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.
    Quote Originally Posted by Æthelfrith View Post
    No way of proving you wrong? I've referred to published evidence that refers to regressivity: i.e. it necessarily harms lower and middle incomes. You seem to think that, if some don't effectively pay tax, all's well. That is bollocks
    Reducing the 15.3% tax to 6.2% of payrolls and more than replacing the lost tax revenue with a 4.55% general sales tax would not harm any employee with non-wage revenues not exceeding 1/3 0f their total revenues and their wages not exceeding $84,932 per year.
    It would not harm any employee and their dependents if their individual revenues did not exceed $127,400 and wages accounted for no less than 2/3 of their total revenues.

    It would not reduce the purchasing power of social security retirement benefits.

    Respectfully, Supposn
    Last edited by Supposn; 20th October 2017 at 08:04 AM.

  4. #44
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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.
    You think ShopRite and Home Depot and WalMart want their consumers paying more for everything with no profit for them? It's a non-starter, impossible, will never see more than bullshit to rant about on blogs and "news" shows filling content in the middle of the day for the profoundly bored people who watch that crap.

  5. #45
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    Quote Originally Posted by Supposn View Post
    It would not reduce the purchasing power of social security retirement benefits.
    How does cutting taxes on businesses that currently retired people do not pay anything for from their benefits, and replacing it with a sales tax that they will pay every time they buy toilet paper...how does that NOT impact the purchase power of retiree's savings, and not just social security?

    You have simply stated the exact opposite of the truth, obviously. You may as well tell me cancer is good for me. That's how obviously silly this is.
    Thanks from Babba and labrea

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    Quote Originally Posted by Supposn View Post
    Reducing the 15.3% tax to 6.2% of payrolls and more than replacing the lost tax revenue with a 4.55% general sales tax would not harm any employee with non-wage revenues not exceeding 1/3 0f their total revenues and their wages not exceeding $84,932 per year.
    It would not harm any employee and their dependents if their individual revenues did not exceed $127,400 and wages accounted for no less than 2/3 of their total revenues.

    It would not reduce the purchasing power of social security retirement benefits.
    So if a sales tax could be dialed such that revenue would not be significantly impacted and there would be no significant change to progressivity/regressivity of federal taxes, what would be the point of revamping the tax structure?

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    Quote Originally Posted by Supposn View Post
    Reducing the 15.3% tax to 6.2% of payrolls and more than replacing the lost tax revenue with a 4.55% general sales tax would not harm any employee with non-wage revenues not exceeding 1/3 0f their total revenues and their wages not exceeding $84,932 per year.
    It would not harm any employee and their dependents if their individual revenues did not exceed $127,400 and wages accounted for no less than 2/3 of their total revenues.

    It would not reduce the purchasing power of social security retirement benefits.

    Respectfully, Supposn
    please show how your assumptions are based on the actual fairtax plan.

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    Quote Originally Posted by splansing View Post
    You think ShopRite and Home Depot and WalMart want their consumers paying more for everything with no profit for them? It's a non-starter, impossible, will never see more than bullshit to rant about on blogs and "news" shows filling content in the middle of the day for the profoundly bored people who watch that crap.
    In exchange for becoming tax collectors for the federal government, they will get to keep a percent of the fairtax collected.

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    Quote Originally Posted by Jets View Post
    I understand that, but let’s break this down. Either the government gets the first cut thru income tax or the government collects the second cut thru consumption. In either situation one is paying something, the difference is the order of the collection.

    That said, onerous is a subjective term. For example, if a person pays $400 or more in federal taxes per check many would consider that onerous and would prefer to have that money up front and in their check.

    IMO
    And a rich person who pays even more in income tax will find it to be even more beneficial. A person earning a lot in salary is paying 35% in federal taxes. A person earning very little is paying nothing or close to it.

    The sales tax would flip that over, because it is regressive. Poor people would pay more, rich people would pay less, and then they would keep it, and the government will slowly go fucking broke.

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    Quote Originally Posted by labrea View Post
    But just think - the fairtax double taxes the savings retirees have managed to accumulate. That must be a plus for you.
    Any reform that would address the crippling unfunded pension liability problem in this nation would have to constitute some sort of taking from DB beneficiaries.

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