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The results are in on social security

Quote cpwill

only if we wanted to see investment go elsewhere, and job creation lowered even futher
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Amazing!!! Seems like they would be clamoring at our borders then doesn’t it.:shock:


Canada is currently lowering their corporate tax to 15%, precisely because they know it will make them more competitive than the US.
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Good for them…gotta pay for that commie healthcare when they get there though.:mrgreen:
 
washunut said:
The talk about taking social security funds to maintain tax cuts for the rich. Social security was dropped into the "unified" budget decades ago. Now I do consider it a theft, but the reason in my view was to sugarcoat deficits, not for any specific tax cut.
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SS plays cover for the ridiculous amount of money that we spend on "defense" and the military conflicts that having a military that is unsustainable is bound to incur in order to justify itself.

If we destroy SS and Medicare like the right-wingers so badly want, then the payroll tax just becomes another one of those regressive taxes that are so beloved by the right.
 
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toddwv said:
SS plays cover for the ridiculous amount of money that we spend on "defense" and the military conflicts that having a military that is unsustainable is bound to incur in order to justify itself.
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Adults know that defense is an enumerated Constitutional responsibility of government. Those educated in government schools by public sector union teacher might not know this. Which side are you on? Are you a Constitutionalist or a Statist?
 
donc said:
Amazing!!! Seems like they would be clamoring at our borders then doesn’t it.
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not if we increased the cost of doing business here. then quite the opposite occurs.

Good for them…gotta pay for that commie healthcare when they get there though
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actually Canada currently scores higher than the US on the Heritage's Economic Freedom Index.
 
cpwill said:
That is incorrect. Clinton raised taxes and it helped produce a Republican takeover of the House. Then Clinton cut capital gains taxes and what do you know? Investment increased.
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Because it was "cheaper" to invest the money and spend it later than keeping it and spending it right away. The reason that was the case is because personal income taxes were also raised. Smart tax code ftw.
 
well.... no. the tax code still rewarded consumption over investment - just less so.
 
cpwill said:
well.... no. the tax code still rewarded consumption over investment - just less so.
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Can you link the numbers because I'm under the impression, from what I've read, that if you invest your money the net taxes you paid were less.
 
xpiher said:
Can you link the numbers because I'm under the impression, from what I've read, that if you invest your money the net taxes you paid were less.
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if you invested your money and got a return, the taxes you paid were less; but (on a federal level) if you spent your money at the mall, the taxes you paid were zero



one of the many reasons (imo) why we need to replace the income tax with a sales tax.
 
cpwill said:
if you invested your money and got a return, the taxes you paid were less; but (on a federal level) if you spent your money at the mall, the taxes you paid were zero



one of the many reasons (imo) why we need to replace the income tax with a sales tax.
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But the net tax rate was lower when you invested your money because part of your income tax was "forgiven"

A National Sales tax is a very promising venture; however, it has to be done correctly. The way the Fair Tax is written is not the proper method.
 
xpiher said:
But the net tax rate was lower when you invested your money because part of your income tax was "forgiven"
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what? you got a credit for investing that was greater than the capital gains tax rate?

A National Sales tax is a very promising venture; however, it has to be done correctly. The way the Fair Tax is written is not the proper method.
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the Fair Tax is the best method that I've seen put forth. Notably, most the strongest criticisms of it tend to come from groups which don't actually grade the legislation as written, but have to change it in order to make it fail.
 
cpwill said:
what? you got a credit for investing that was greater than the capital gains tax rate?
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You can deduct certain investments from tax liability thus reducing net taxes.


the Fair Tax is the best method that I've seen put forth. Notably, most the strongest criticisms of it tend to come from groups which don't actually grade the legislation as written, but have to change it in order to make it fail.
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The problem with the fair tax is that it too greatly reduces purchasing power while disproportionately adversely affects the poor due to taxes being levied on things like rent, thus forcing a good percentage of power to rely on the prebate. Instead the sales tax should exempt food (if it can be bought with food stamps it doesn't get taxed), medical (plastic surgery and similar things get taxed), rent of primary residence (or tax rent less), and tax water, heat, and electricity less. Combine this with Friedman's reverse income tax would be a much more equitable system.
 
xpiher said:
You can deduct certain investments from tax liability thus reducing net taxes.
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reducing certainly. below zero (which is the federal tax rate for consumption) I would like to see.

The problem with the fair tax is that it too greatly reduces purchasing power while disproportionately adversely affects the poor due to taxes being levied on things like rent, thus forcing a good percentage of power to rely on the prebate.
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the prebate simply makes all spending up to the poverty line tax free - the Fair Tax is actually better for our poor than our current tax system, as our current tax system hits them with the payroll tax straight out of the gate.

Instead the sales tax should exempt food (if it can be bought with food stamps it doesn't get taxed), medical (plastic surgery and similar things get taxed), rent of primary residence (or tax rent less), and tax water, heat, and electricity less.
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doing that will simply require you to raise the rates on other things to make up for the lost revenue.

Combine this with Friedman's reverse income tax would be a much more equitable system.
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running a dual-system like this only begs politicians to make names for themselves monkeying back and forth with each - increasing uncertainty, degrading growth, and making it easier for politicians to raise taxes. A single rate at the retail level is something that you can only raise when you are willing to admit that you are raising it.
 
cpwill said:
the prebate simply makes all spending up to the poverty line tax free - the Fair Tax is actually better for our poor than our current tax system, as our current tax system hits them with the payroll tax straight out of the gate.
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It does not because it doesn't cover the taxes laid on health care and rent.

doing that will simply require you to raise the rates on other things to make up for the lost revenue.
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I realize that, but that's not necessarily a bad thing. It would prompt people to buy used goods.

running a dual-system like this only begs politicians to make names for themselves monkeying back and forth with each - increasing uncertainty, degrading growth, and making it easier for politicians to raise taxes. A single rate at the retail level is something that you can only raise when you are willing to admit that you are raising it.
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Its not a dual system. The prebate is based on income, the difference being that its not designed to make up completely for taxes spent on life necessities and is given to everyone. Combining not taxing life necessities with the reverse income tax you only give money to the poor.
 
xpiher said:
It does not because it doesn't cover the taxes laid on health care and rent.
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the poverty line is the poverty line - the Prebate covers all taxes paid up to that point, and yes, indeed, does make for a better tax system for our poor than the current one. you are forgeting that the costs of healthcare and rent have the current tax code already embedded in them

I realize that, but that's not necessarily a bad thing. It would prompt people to buy used goods.
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the government should not be in the business of trying to tilt the market towards particular winners or loser - and engaging in such will simply have every industry spending millions on getting their "vital" product tax-free as well.

Its not a dual system.
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running a sales and an income tax regime? could have sworn "dual" meant "two"

The prebate is based on income
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no, it is based on the poverty line. you get the prebate irrespective of your income.

the difference being that its not designed to make up completely for taxes spent on life necessities
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given that we define that by "the poverty line", yes, it does.
 
cpwill said:
given that we define that by "the poverty line", yes, it does.
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No, it does not. Thats why we won't agree because, after reading the fair tax book, I came to the conclusion that it doesn't cover all the taxes due mainly to taxing rent

the government should not be in the business of trying to tilt the market towards particular winners or loser - and engaging in such will simply have every industry spending millions on getting their "vital" product tax-free as well.
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You do realize that the fair tax, as it is written, does not tax any used good?
 
xpiher said:
No, it does not. Thats why we won't agree because, after reading the fair tax book, I came to the conclusion that it doesn't cover all the taxes due mainly to taxing rent
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I don't know how to put it to you other than the stupid-sounding "yes, it does". it takes the poverty line, takes the amount of taxes that would be paid on spending up to that line, and sends you a check for that amount. I don't even know how you would figure that Rent would somehow magically be special or make a difference to the poverty line, here.

You do realize that the fair tax, as it is written, does not tax any used good?
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yes. that does not detract from the point that once the government ceases to tax all goods at the retail level, it has to spike taxes for some items in order to make up for the loss of revenue in others. this places government in the position of tilting spending in favor of some sectors of the economy and away from others. tell me, how well did the policy of government encouraging (say) home purchasing work out for us?
 
The reason why it doesn't cover all the taxes spent on life necessities, and rent is the main culprit, because the base poverty line is different in each state and rent various between the different states. At least thats the way I read it.

cpwill said:
yes. that does not detract from the point that once the government ceases to tax all goods at the retail level, it has to spike taxes for some items in order to make up for the loss of revenue in others. this places government in the position of tilting spending in favor of some sectors of the economy and away from others. tell me, how well did the policy of government encouraging (say) home purchasing work out for us?
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If I was the person writing the change, I would simply tax everything else but those thing that I outlined as exempt more equally.
 
xpiher said:
The reason why it doesn't cover all the taxes spent on life necessities, and rent is the main culprit, because the base poverty line is different in each state and rent various between the different states. At least thats the way I read it.
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if the poverty line is different in each state... and rent is different in each state.... doesn't it seem to follow that the two will travel in the same direction?

If I was the person writing the change, I would simply tax everything else but those thing that I outlined as exempt more equally.
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then I worry you are just setting the system up for permanent malinvestment and failure - you are using tax policy to feed the boom/bust cycle.
 
cpwill said:
then I worry you are just setting the system up for permanent malinvestment and failure - you are using tax policy to feed the boom/bust cycle.
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How did you get promoting boom and bust cycles from just not taxing life necessities and then taking the revenue loss difference, and raising the tax on all other goods equally? According to the fair tax act, to be revenue neutral all new goods and services would have to be taxed at 23%. If you removed medical, food, shelter, and utilities (tax at a lower rate) from the equation then to be revenue neutral I think it would require the tax to be roughly 3% higher. However, I wouldn't make it revenue neutral. I'd cut government to make up for the short fall.
 
xpiher said:
How did you get promoting boom and bust cycles from just not taxing life necessities and then taking the revenue loss difference, and raising the tax on all other goods equally?
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issuing a prebate already handles taxes up to lifes' necessities. if you think it should be more, argue for increasing the poverty line.

however, favoritism between the various sectors of the economy on the part of government (especially via something as powerful as the tax policy under discussion) distorts market signals by distorting prices. It encourages over investment in some sectors, and under investment in others. The overinvestment in these sectors continues to grow (rewarded by preferential government treatment) until it become unsustainable due to the overvaluing of its' merits. Government thus creates a series of bubbles in various sectors of the economy through preferential treatment - and the malinvestment creates a boom/bust cycle.

According to the fair tax act, to be revenue neutral all new goods and services would have to be taxed at 23%. If you removed medical, food, shelter, and utilities (tax at a lower rate) from the equation then to be revenue neutral I think it would require the tax to be roughly 3% higher.
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given the large percentage of our spending that is done on those four things, you are wildly incorrect. think more than 50%.

However, I wouldn't make it revenue neutral. I'd cut government to make up for the short fall.
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that at least is something we can generally agree on.
 
is it really showing favoritism by simply not taxing things everyone actually needs?
 
yes - it provides preferential tax treatment of a particular sector of the economy which encourages overinvestment in that sector. we just went through something very similar due to the preferential tax treatment shown to debt.


:) that's why they call economics the "dismal science"
 
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cpwill said:
yes - it provides preferential tax treatment of a particular sector of the economy which encourages overinvestment in that sector. we just went through something very similar due to the preferential tax treatment shown to debt.
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1) Would over investment in food and medical be bad?
2) I don't believe it would lead to do over investment in those sectors. People aren't going to buy more food, more medical, and rent more houses just because they aren't tax as much.
 
xpiher said:
1) Would over investment in food and medical be bad?
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yes. in particular much of our currently spiraling healthcare costs are due to distorted price signals that create overconsumption.

2) I don't believe it would lead to do over investment in those sectors.
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then that's very nice, but the combined weight of economic history vehemently disagrees.

People aren't going to buy more food, more medical, and rent more houses just because they aren't tax as much.
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just like people didn't buy more house than they needed when the government and financial markets were working to reduce the prices of mortgages :)
 
cpwill said:
yes. in particular much of our currently spiraling healthcare costs are due to distorted price signals that create overconsumption.
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The distorted price signals occur largely because no one pays for health insurance themselves so hospitals get away from largely charging anything they want. Its not because of tax code.


cpwill said:
just like people didn't buy more house than they needed when the government and financial markets were working to reduce the prices of mortgages :)
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The price for the mortgage wasn't reduced or even tried to be reduced. They simply tried to get more people to get mortgages. Credit is a different animal by it very nature, it accures cost. With a national sales tax, no matter how it is written, downward pressure is applied to credit.
 
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