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Ask HN: Putting aside your political views – do you support the Fair Tax?

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Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#11

Post by no-s »

kstenerud wrote: post #3

The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. The rich spend between 1 and 10% of their income on goods and services, whereas the poor spend upwards of 100% of their income, and even more by going into debt to cover life expenses. All this tax would do is ensure that the wealth of the rich remains locked up and out of circulation forever, multiplying tax fre…

> The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest.

So there are some provisions to address this:

- basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it.

- tax only first sale: only new goods and services are taxed. resale is not taxed. However this does mean direct services are taxed and that may be unpleasant for those who earn by invoicing for service (lawyers, truck drivers, etc). OTOH consumable things like food, disposable diapers, etc will always be taxed

- Only the federal individual income tax is repealed and outlawed. There’s plenty of taxation schemes left and some even applies to wealthy individuals and corporations.

I question your explanation of “rich get richer, poor pay for everything”, it doesn’t seem obvious. Hedge funds serve a purpose or they wouldn’t exist, but you seem to imply they only serve to pull money out of the economy. That at least would be deflationary, but AFAICT it seems like the appreciation of hedge funds at least creates wealth that gets put to some use in further capitalization. Which grows the economy, so I scratch my head at your characterization.

Furthermore “the poor pay for everything” seems like it could be substantiated only if the actual amount corresponding to the 100%+ you claim the poor will pay exceeds the amount corresponding to the 1%-10% the rich will pay such that the latter is lost in the noise. The reality even in the current tax scheme is the rich pay for everything eventually (even more so in California, the pinnacle of benevolent taxation, up yours Franchise Tax Board).

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#12

Post by no-s »

codemonkeysh wrote: post #10

I find it very interesting that people can't put aside political views and speak about whether or not having a consumption tax, in their opinion, is a good or bad idea when compared to the current system. This question isn't about a persons view of Biden or Trump. I think kstenerud did a great job at expressing their views without having to speak about politics. Is this an indicator at how toxic social media has beco…

> I do agree with kstenerud that such a tax could hurt the poorest people. This begs the question of is there a way to introduce such a tax that allows the poor to transition into a Fair Tax? e.g., Allowing people making under X 2 years not to pay any income taxes?

Fair Tax addresses that point with the rebate to alleviate the impact on the poverty-stricken. It is debatable as to whether this is a fair solution; OTOH it is also debatable as to whether the current system is fair to the poor.

It’s not so clear that Milk would go to $20 a gallon under the Fair Tax and not so in the current regime ( Sudden Inflation Now Syndrome seems mostly unchecked ).

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#13

Post by anigbrowl »

no-s wrote: post #11
kstenerud wrote: post #3

The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. The rich spend between 1 and 10% of their income on goods and services, whereas the poor spend upwards of 100% of their income, and even more by going into debt to cover life expenses. All this tax would do is ensure that the wealth of the rich remains locked up and out of circulation forever, multiplying tax fre…

> The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. So there are some provisions to address this: - basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized a…

- basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it.

How are you going to minimize the bureaucracy? Poor people are still going to have document all their income/assets to qualify for a rebate, richer people who hate taxes will channel their income through some sort of trust while claiming that their designer suits are owned by the trust and administrators are required to wear them like any other employee.

Hedge funds serve a purpose or they wouldn’t exist

As does Fentanyl, but I bet you don't think it's a good idea to sprinkle it on your cornflakes. As does fentanyl, but that doesn't mean it's a good idea to sprinkle it on your cornflakes.

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#14

Post by kup0 »

I support the abstract idea of replacing our convoluted tax code with an extremely simple, straight-forward one that avoids negative impact on the poor and maintains an appropriate level of taxation on those (individuals and businesses) with millions/billions of dollars who are not personally impacted the same way (when you have a billion dollars, no reasonable amount of even "high" tax is going to affect your ability to have shelter, food, etc like it would when levied on lower income classes). I am even okay with setting that threshold relatively high.

But this will never happen, and even if it did, it will only affect things at the federal level. The very way our country is designed and divided by states, counties, local jurisdictions makes me feel like we're doomed to complexity forever. However, simplification on the federal side would be a huge step forward. I don't claim to know exactly what that solution would look like but I think it is possible. I am not convinced "Fair Tax" is it, however.

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#15

Post by nindalf »

codemonkeysh wrote: post #8
nindalf wrote: post #5

Firstly, you don't specify what the Fair Tax is > The Fair Tax would repeal the current tax code and replace it with a single national consumption tax that is pro-growth and allows Americans to keep every cent of their hard-earned money. Source: https://buddycarter.house.gov/news/documentsingle.aspx?Docum... Secondly, what do you think "political views" are? Politics is how we mediate social interactions. Our politic…

Something tells me that you love to critique things to hear yourself speak before actually answering a question. P.S. it's spelled "paycheck" not "pay check". ;)

When asked a loaded question, I point out its loaded before answering it. I could be wrong though. Perhaps you were merely ignorant of what “politics” means. In that case, I’m sorry for calling your question loaded. I hope you’ve found this educational.

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#16

Post by no-s »

anigbrowl wrote: post #13
no-s wrote: post #11

Earlier quoted context omitted.

> The Fair Tax would increase inequality in the USA by shifting the burden of tax payment onto the poorest. So there are some provisions to address this: - basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized a…

- basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it. How are you going to minimize the bureaucracy? Poor people are still goin…

> Poor people are still going to have document all their income/assets to qualify for a rebate,

nope, no qualifications, no means test. Only one rebate per person, same amount for each person, computed from poverty line statistics. Children too, legal guardian collects.

> As does Fentanyl, but I bet you don't think it's a good idea to sprinkle it on your cornflakes.

I’m not sure how to construe your analogy. I would agree its inappropriate to eat hedge fund participants for breakfast, but OTOH Fentanyl does have a legitimate use even if some might abuse it as a cereal topping. Perhaps you should clarify your original point instead.

Fair Tax isn’t really intended to address wealth disparity and the outsize influence of the wealthy. The Fair Tax asserts the defects of the Income Tax outweigh the virtues, particularly WRT to transgressions against individual rights, costs vs benefits, and exceeding limited government. It's an alternative tax system. The macroeconomic impact is debatable, static analysis is probably an error due to the outsize influence of perverse tax incentives.

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#17

Post by codemonkeysh »

nindalf wrote: post #15
codemonkeysh wrote: post #8

Earlier quoted context omitted.

Something tells me that you love to critique things to hear yourself speak before actually answering a question. P.S. it's spelled "paycheck" not "pay check". ;)

When asked a loaded question, I point out its loaded before answering it. I could be wrong though. Perhaps you were merely ignorant of what “politics” means. In that case, I’m sorry for calling your question loaded. I hope you’ve found this educational.

Perhaps you're too ignorant to step out of emotions with politics and focus on the question. Sorry for thinking you might have common sense :)

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#18

Post by anigbrowl »

no-s wrote: post #16
anigbrowl wrote: post #13

Earlier quoted context omitted.

- basic rebate: every person gets a rebate corresponding to a base amount of tax paid; this is intended to ensure poverty-stricken folks are not taxed out of subsistence (HHOS). This is like earned income credit but it’s streamlined so the bureaucracy is minimized and there is no magical cutoff. It’s optional so progressive types can refuse it. How are you going to minimize the bureaucracy? Poor people are still goin…

> Poor people are still going to have document all their income/assets to qualify for a rebate, nope, no qualifications, no means test. Only one rebate per person, same amount for each person, computed from poverty line statistics. Children too, legal guardian collects. > As does Fentanyl, but I bet you don't think it's a good idea to sprinkle it on your cornflakes. I’m not sure how to construe your analogy. I would…

no qualifications, no means test. Only one rebate per person, same amount for each person

Ah, so by 'base amount of tax paid' you mean averaged across the population? A rebate generally implies a refund of prior payment, so I found your summary confusing.

I’m not sure how to construe your analogy.

That just because something has a purpose does not imply it is a net good. In general I think high concentrations of wealth are bad on a systemic level, like too much sugar leading to diabetes. So I'm not sure that the capital allocation performed by hedge funds is a necessity for an economy to operate sustainably.

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#19

Post by nindalf »

codemonkeysh wrote: post #17
nindalf wrote: post #15

Earlier quoted context omitted.

When asked a loaded question, I point out its loaded before answering it. I could be wrong though. Perhaps you were merely ignorant of what “politics” means. In that case, I’m sorry for calling your question loaded. I hope you’ve found this educational.

Perhaps you're too ignorant to step out of emotions with politics and focus on the question. Sorry for thinking you might have common sense :)

Ah, you missed the part where I answered your question in detail. :)

It couldn’t hurt to develop some reading comprehension. :)

Re: Ask HN: Putting aside your political views – do you support the Fair Tax?

#20

Post by no-s »

anigbrowl wrote: post #18
no-s wrote: post #16

Earlier quoted context omitted.

> Poor people are still going to have document all their income/assets to qualify for a rebate, nope, no qualifications, no means test. Only one rebate per person, same amount for each person, computed from poverty line statistics. Children too, legal guardian collects. > As does Fentanyl, but I bet you don't think it's a good idea to sprinkle it on your cornflakes. I’m not sure how to construe your analogy. I would…

no qualifications, no means test. Only one rebate per person, same amount for each person Ah, so by 'base amount of tax paid' you mean averaged across the population? A rebate generally implies a refund of prior payment, so I found your summary confusing. I’m not sure how to construe your analogy. That just because something has a purpose does not imply it is a net good. In general I think high concentrations of weal…

> A rebate generally implies a refund of prior payment, so I found your summary confusing.

Sorry, it is a “pre-bate”, intended to offset the first x dollars of tax that would be paid on “necessities”, determined by some poverty line/CPI related computation performed periodically. No means test or qualification except citizenship. Don’t recall if there was any effort to address non-citizens that were not dependents.

> In general I think high concentrations of wealth are bad on a systemic level, like too much sugar leading to diabetes.

I can’t quite dis-agree with you, but I’m not certain how to address it. Perhaps we should just have rules/criteria regarding breaking up concentrations of wealth/power or splitting up giant organizations. Meanwhile this happens under the current tax system, thus orthogonal WRT the objectives of FairTax.

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