But money isn't spent propotional to income, thus the rich are taxed proportionally less than the poor, thus making the system not progressive. Whether or not money is taxed is irrelevant.

8/8/2005 8:41:34 PM

i already addressed that. The rich eventually spend all their money. so do the poor. all money gets taxed.

8/8/2005 8:54:37 PM

That doesn't matter.

What matters is if the rich are taxed proportional to their income. And a tax on consumption does not do that. Period. The savings and stuff has confused you. Just think to yourself "does a tax on consumption tax the rich proportional to the poor?" The rich spend much less than the poor proportionally.

8/8/2005 9:17:34 PM

BUT THEY SPEND IT ALL! thus, no matter how much money you make, YOU SPEND IT. so, if there is a blanket tax on consumption, then every dollar you spend has been taxed. And, if every dollar spent is taxed, and every dollar earned is spent, no matter what your income, then every dollar earned is taxed.

8/8/2005 9:32:17 PM

It doesn't matter if the dollar is taxed eventually! THAT HAS NOTHING TO DO WITH THE TAX RATE PROPORTIONAL TO INCOME.

What matters is what the tax rate is proportional to their income. HOW MANY WAYS CAN I SAY THAT?

Here look at this hypothetical chart.

Poor Guy
Disposable Income: 50,000
Consumption: 45,000
Tax: 4,500

Rich Guy
Disposable Income: 500,000
Consumption: 100,000
Tax: 10,000

Now let's look at the tax rate proportional to income (tax burden). We'll calculate TB = tax/DI.

Poor guy: 9%
Rich guy: 2%

The numbers are made up, but you can check any statistics for the rate of consumption to disposable income.

[Edited on August 8, 2005 at 10:57 PM. Reason : ]

8/8/2005 10:56:48 PM

And the $400,000 in income that the rich guy saves in his bank account gets invested somewhere else and is eventually taxed or leads to some productive part of the economy.

8/8/2005 11:26:05 PM

that doesn't matter

we are discussing whether a tax is regressive or not

Discussing whether savings or consumption do more for the economy is a complicated issue, because it's usually both and very dependant on the situation. But it's easy to see that progressive income taxes stablize the economy.

8/8/2005 11:50:02 PM

Ok..we're all in agreement that communists want to keep the progressive income tax in place and growing.

But for the rest of us who still want to give capitalism another chance..consider the FairTax.

This is the only tax plan that completely removes the poor from federal tax responsibilites. For instance, a family of four can spend up to $25,660 a year free of all federal taxes. In addition, they get to keep 100% of their paycheck. No income tax, no payroll tax, so death tax, no capital gains tax, and no AMT.

Off-shore money will flock to the U.S. creating more jobs. The shadow economy will be pulled into paying taxes. Foreign tourists will help fund our social security program. Politicians will no longer be able to game the tax system to pit one class against the other in order to get elected.

Americans, no longer having to comply with a mountain of tax-code, will save $400 billion a year..money that can be spent on investing and saving.

8/9/2005 12:20:55 AM

Quote :

"Ok..we're all in agreement that communists want to keep the progressive income tax in place and growing."

Ad homeniem. the fact is you can't argue agianst ANY of the points I've put forth, eahc representing a huge flaw in fairtax.

Quote :

"This is the only tax plan that completely removes the poor from federal tax responsibilites."

Really?

I'm thinking of one that does just that a bit closer to home...

Quote :

"Off-shore money will flock to the U.S. creating more jobs."

Sure it will, because people just love to pay our taxes.

Quote :

"Foreign tourists will help fund our social security program."

A drop in the bucket.

Quote :

"Americans, no longer having to comply with a mountain of tax-code, will save $400 billion a year..money that can be spent on investing and saving."

Far more economic damage would be done after putting your flawed system in place.

8/9/2005 12:30:59 AM

guess who wins?

Kris






AMT still sucks though...

8/10/2005 11:28:25 PM