[assuranceagent]

Originally Posted by WandererInFog

Unless the American government is willing to accept large cuts in spending, taxes will have to be raised if we're going to have a balanced budget. While Tax revenues have increased, they haven't come close to keeping up with expansions in spending.

Fixed that for you.

[billwald]

>Some of us already pay 36% on what we MAKE,

On the last increment, not the first 2, it is your marginal tax rate.

From Wikipedia

The FairTax is a proposed change to the federal tax laws of the United States that would replace all federal income taxes[1] with a single national retail sales tax. The plan has been introduced into the United States Congress as the Fair Tax Act (HR 25/S 1025). The tax would be levied once at the point of purchase on all new goods and services. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or 'prebate', of tax on purchases up to the poverty level.[2][3] The sales tax rate, as defined in the legislation, is 23 percent of the total price including the tax ($23 of every $100 spent—calculated similar to income taxes). This is equivalent to a 30 percent traditional U.S. sales tax ($23 on top of every $77 spent).[4]

All new goods and services including doctors, dentists, meds, and food?
A $1000 dental crown will cost $1300? Hospital cost $1000/day.


On a new car but not a used car? On a new house but not a used house?
Only the very rich will ever buy new stuff? It will make for an interesting car market.

[TomO]

Originally Posted by billwald

Only the very rich will ever buy new stuff? It will make for an interesting car market.

I don't buy new stuff now......waste of money. The last "new" car I bought was in 1992....now all the cars I buy are usually two to three years old and have 20,000-30,000 miles on them.

My current house was 13 years old when I bought it.

[chestertonrules]

Originally Posted by TomO

I thought it was like 25%......35% sounds kinda steep.

I think the Steve Forbes plan was 19% with the first 40,000 exempted.

[assuranceagent]

30% is still significantly less than the combined tax rate I'm paying now.

Not to mention that I currently pay 36% + on every dollar I make (not counting long term capital gains) whereas the fair tax would only require the payment of a 30% net rate on what I spend, which for any American who knows how to manage his money, ought to be less than his total income.

[TomO]

Originally Posted by chestertonrules

I think the Steve Forbes plan was 19% with the first 40,000 exempted.

Yeah, but Forbes plan is a Flat Income Tax isn't it?

The "Fair Tax" is a Sales Tax of sorts.

[assuranceagent]

Originally Posted by TomO

all the cars I buy are usually two to three years old and have 20,000-30,000 miles on them.

[WandererInFog]

Originally Posted by assuranceagent

Fixed that for you.

We live in representative Republic and as such we get precisely the government we deserve. If the citizens of this country really demanded from their government cuts in spending, it would happen. But that isn't really what people want. Oh sure, there is a minority that would want to see taxes massive reduced and our federal government actually brought back to it's constitutional limits. But it's a small minority, and an increasingly vanishing one.

And what do you really think is going to get cut, the top 5 categories, which represent 70%+ of our government's annual spending are Social Security, Medicare, Unemployment, and Medicaid. Which of these do you think people are going to agree with doing away with or seriously reducing? The next 10% represents the interest accrued annually on our national debt, which can't be dispensed with without first creating a budget surplus to begin reducing that debt. So now, with just these handful of programs (which are supported by the vast majority of the American public) and the interest on the debt we're already up to 80% of our national budget.

So, what about the other 20%? Next, on the list at $90 billion a year is Education. How many people do you think are going to vote for a candidate who says he wants to cut funding for Education? Then at $77 Billion a year we have Transportation, which unless people want more roads going unrepaired and more brides collapsing isn't going to be cut. Next at $72 Billion we have Veterans Benefits, which again no one is going to cut. Then at $43 billion we have Justice Administration which includes running the federal court systems and law enforcement. And so on.

When it comes right down to it, all of the "Bridges to Nowhere" and similar silly programs that people actually complain about fall under the category of "Community and regional development" which constitutes less than 1% of our annual federal budget. So even if every one of these projects were discontinued, it would do nothing to change our current situation.

So, I stand by my original statement, until the American public is willing to accept large cuts in spending directed at programs which they currently support, there is no way to achieve a balanced budget other than through increasing taxes.

[WandererInFog]

Originally Posted by chestertonrules

I think the Steve Forbes plan was 19% with the first 40,000 exempted.

Which was actually a good plan. I'm not sure about the figure of $40k, but essentially there was an exemption with increases based on number of dependents and then everything above that was taxed at a flat rate. So long as the threshhold was set high enough to exempt what equates to a living wage, Forbes plan represented a method of taxation that was simultaneously progressive and extremely simple.

[assuranceagent]

Originally Posted by WandererInFog

We live in representative Republic and as such we get precisely the government we deserve. If the citizens of this country really demanded from their government cuts in spending, it would happen. But that isn't really what people want. Oh sure, there is a minority that would want to see taxes massive reduced and our federal government actually brought back to it's constitutional limits. But it's a small minority, and an increasingly vanishing one.

And what do you really think is going to get cut, the top 5 categories, which represent 70%+ of our government's annual spending are Social Security, Medicare, Unemployment, and Medicaid. Which of these do you think people are going to agree with doing away with or seriously reducing? The next 10% represents the interest accrued annually on our national debt, which can't be dispensed with without first creating a budget surplus to begin reducing that debt. So now, with just these handful of programs (which are supported by the vast majority of the American public) and the interest on the debt we're already up to 80% of our national budget.

So, what about the other 20%? Next, on the list at $90 billion a year is Education. How many people do you think are going to vote for a candidate who says he wants to cut funding for Education? Then at $77 Billion a year we have Transportation, which unless people want more roads going unrepaired and more brides collapsing isn't going to be cut. Next at $72 Billion we have Veterans Benefits, which again no one is going to cut. Then at $43 billion we have Justice Administration which includes running the federal court systems and law enforcement. And so on.

When it comes right down to it, all of the "Bridges to Nowhere" and similar silly programs that people actually complain about fall under the category of "Community and regional development" which constitutes less than 1% of our annual federal budget. So even if every one of these projects were discontinued, it would do nothing to change our current situation.

So, I stand by my original statement, until the American public is willing to accept large cuts in spending directed at programs which they currently support, there is no way to achieve a balanced budget other than through increasing taxes.

That's a good response.

I personally would like to see some of those top categories cut, but it would require a lot of preliminary changes first like tort reform, healthcare reform, and eduction/privatization of Social Security, but I agree with you that most Americans wouldn't stand for those changes.

As for being a representative republic: we used to be. Now we're a rockstar democracy. Policy doesn't matter. Charisma and partisan rhetoric wins elections.

[chestertonrules]

Originally Posted by TomO

Yeah, but Forbes plan is a Flat Income Tax isn't it?

The "Fair Tax" is a Sales Tax of sorts.

Yes. My mistake.

[spider]

Is corporate tax the only or the direct cause of the problems? It may well be, but with Japan as having the highest corporate tax, it seems to be doing pretty well considering. What is Japan doing differently? Perhaps there's a way to keep capitalising on tax revenue coming in from corporations that make it big in the US without driving the jobs away.

Sure, in practice, it's really just a way of looking tough on Public Enemy Number 1.

Are corporations the only way to ensure good employment and income stats at this time, considering there are going to be lay-offs anyway given how the global economy is going? What about self-employment, trade and small business as part of the solution?

[chestertonrules]

Originally Posted by spider

Is corporate tax the only or the direct cause of the problems? It may well be, but with Japan as having the highest corporate tax, it seems to be doing pretty well considering. What is Japan doing differently? Perhaps there's a way to keep capitalising on tax revenue coming in from corporations that make it big in the US without driving the jobs away.

Sure, in practice, it's really just a way of looking tough on Public Enemy Number 1.

Are corporations the only way to ensure good employment and income stats at this time, considering there are going to be lay-offs anyway given how the global economy is going? What about self-employment, trade and small business as part of the solution?

We are in a world market. If our corporate tax rates are high, then our market is a less attractive location for new international businesses.

We want more businesses and jobs, right?

[WandererInFog]

Originally Posted by assuranceagent

That's a good response.

I personally would like to see some of those top categories cut, but it would require a lot of preliminary changes first like tort reform, healthcare reform, and eduction/privatization of Social Security, but I agree with you that most Americans wouldn't stand for those changes.

And there are many changes I would like to see to them as well. But I really see the first and most urgent step being at least getting our government to the point where it's paying its bills. Ending deficit spending at least buys us time to work further on other problems.

As for being a representative republic: we used to be. Now we're a rockstar democracy. Policy doesn't matter. Charisma and partisan rhetoric wins elections.

While I, always being a touch pedantic, would note that so long as we're electing representatives who make our laws, we remain a Representative Republic. I do understand what you're getting at.

As I mentioned on another thread, because of the way our modern media works (and by that I mean TV, Talk Radio, Blogs, etc as a medium) the US no longer selects its President on the basis of the ideas presented or even their charisma. On the contrary it's turned into a sort of bizarre Trial by Ordeal where whomever can better withstand the scrutiny of the campaign emerges the winner.

To continue with the analogy for moment, much like there are certain techniques that would allow one to walk over beds of hot coals or plunge their hands into boiling water without them blistering, there are techniques for handling and manipulating the scrutiny of the campaign, and just like in the actual Dark Ages when we had Trials by Ordeal there were people who, largely inadvertently, figured these tricks out and managed to make it through the ordeal, in the earliest part of the move away from a print based culture the candidate who was better at handling the media scrutiny ultimately won, but their being better at it was more luck than skill. This was essentially the nature of American politics from Kennedy through George HW Bush.

However, starting with the election of 1992, things changed a bit. Clinton had people like Morris and Carville running his campaign who understood that this was now the nature of American politics and embraced it and as such took an unknown small state governor to victory over a sitting President who had been successful in wartime and had enjoyed seemingly unassailable popularity up through the primaries. These same methods were employed in the Republican takeover of the Congress in 1994 and Bush's victories in 2000 and 2004.

Now I realize all of that sounds kind of bleak and more than a little cynical. But my point isn't to say "wow, things are really messed up. we should just give up and go hide our heads in the sand". Quite the contrary, I personally think that the more people understand how bad things have gotten, the better the chance there is of eventually changing them.

[WandererInFog]

What about self-employment, trade and small business as part of the solution?

Most of those trade and small business are corporations as well. When corporate tax rates go up, it hits them just as much (or more) than it hits the big companies trading on Wall Street.