Originally posted by zappafan1
I was responding to the idea of taxes going to fund the various Social programs, which is definately Marxist.
State investment in the public good predates Marx, so I disagree with the contention that all investment in public good, even through "social
programs" as popularly defined, is necessarily Marxist.
That however may be a tangent issue because I believe you have misunderstood me.
When I said, " think if you cut unnecessary government spending in some areas to fund large and well-targeted tax breaks for college education,
medical insurance, housing, etc,..."
I was not suggesting government medical insurance or housing, etc. For America, as matters now stand, I would be against those ideas.
I was suggesting that the government should keep a tax code which promises never to take so much of a citizens own money that he would be unable to
acquire these things for himself, providing that he takes the initiative to earn and save the money for them.
Seems capitalistic enough to me, but not mercilessly so.
The progressive tax system currently in place is also based on Marxist principals.
Yes and no. I believe it comes down to rationale and effect.
If the rationale is that income must be redistributed to create equality of results, then a measure is Marxist. If the rationale is to fund a
collective investment, and to allocate the responsibility for costs according to share in the benefits, then it is simply fair.
I assume you would agree that the ruling in US v. Butler that money cannot be taken from one group and distributed to another and that later
circumvention of that ruling which made the Great Society programs possible were unconstitutional.
I submit to you that to tax a laborer equally in order to fund infrastructure which disproportionately benefits others is a de facto redistribution of
income from the poor to the wealthy.
While it is axiomatic that all costs, including taxes, are ultimately channeled to the consumer, income taxation which applies to business entities
retains certain subtle advantages.
A corporation is legally distinct from its owners, but this simply does not hold in reality. The money is obviously going somewhere. The cost flows
from the corporate accounting offices down to the cash register, but then is partially rebuffed by writeoffs, tax breaks, and above all, the
progressive tax code, channeling the balance of the government budget back to those whom actually end up in possession of the corporate entities'
So long as these people are not expected to shoulder a portion of the expense disproportionate to their stake in the government and its works, the
progressive tax code is not Marxist, but is merely the mechanism of correcting the phenomenon whereby those who benefit most from public works would
be able to pass the costs on to those least able to afford it and least benefited by the spending.
Now, this is obviously not perfect either. In a perfect world, the budget would be either itemized or at least categorized, percentage stake in the
spending would be assigned to sectors of the population, and each class would pay a flat tax for their bracket specific to each expenditure which pays
that class' stake in the government's work.
This opens up a very dangerous path to overtaxation which would require budget referenda. It is present impractical for a large and populous nation of
large expenditures, however it seems theoretically sound where conditions and/or technology allows.
REPLY: No, the Fair Tax does none of those things. First, it would eliminate the entire industry of lobbyists, as 95% of lobbyists go to D.C.
to try and get favorable tax breaks for those they work for.
The Black Market will always exist, but it will make it more difficult for it to exist.
I do not understand how a consumption tax would hinder the blackmarket. On the contrary, it seems obvious that if taxation is taking place at the cash
register, that many people will seek to circumvent the register. The substantial increase in prices will create a demand for cheap stolen and smuggled
That's the good news though.
The US has a GDP of 11.75 Trillion (CIA World Fact Book 2005). We have a Budget of 2.354755 Trillion
Divide the first number by the second, you get .20 and some change. That's 20 cents on the dollar consumption tax, and it gets much higher if you
don't assess a consumption tax to businesses on the wages they pay, which will of course flow to prices, and cannot be redirected back to the holders
of the corporation for lack of a tax code. So you've got a bare minimum 20% price increase, probably closer to 30% or more considering my point on
wages and yours on passing of costs. Remember, we still haven't added state and local taxes either. That's even more.
How does the price increase compare to the income increase for a poor family?
The bottom two tax brackets will see their taxes effectively doubled from 10-15% (before deductions) to approximately 30%. The third tax bracket
(which goes up to 70k, just shy of double the per capita GDP in this country, will see a slight increase.
The bottom two brackets would literally be ruined instantly. If you're making 29k, then your rent, car payment, car insurance, gasoline bill,
utilities, etc all go up 20-30%, while the income at your disposal only goes up 15%. What happens? If you're INCREDIBLY frugal, and don't live in
California, your disposable income is gone. If you do live in CA, and aren't very a monumental tightwad- you're now homeless.
Consumption will have to dramatically reduce just for people to survive. Producers will have to export, but who is going to buy that much American
merchandise considering where our currency is? We're definately going to have to import cheap, but that's not going to work either because there
aren't going to be any jobs in this country when consumption drops.
Hoarding won't happen because it removes the extreme costs a company pays to keep up with the tax laws (in fact the "taxes" themselves),
which would allow for a given company to invest and grow, which would create more jobs.
Wait, I thought companies didn't pay taxes. Their not saving any money because any money they are spending is being charged to the consumer.
Meanwhile, the consumers are hoarding. They can't afford to spend money. Those who aren't hording are going to be making the smart play and
investing in nations that haven't committed fiscal suicide.
The F.T. is VERY flexible to the individuals needs, as the only thing that is taxed at the consumer level are NEW items, not used.
"At the consumer level" is deceptive. If it's being taxed at other levels it gets passed down the line as a cost. If it's not being taxed it only
increases the share of the budget which must be borne on those new items, therefore you get fewer taxes of greater amount- zero sum.
"Unjustly burdened" would describe excessive corporate taxation, which the Fait Tax would eliminate.
This is where we differ. I believe that unjustly burdened refers to anyone who is forced to provide for the public to such an extent that they cannot
sufficiently provide for themselves. The businesses which thrive and make their owners billionaires under our current progressive tax system do not
A person who works his butt off just so he can have enough money to qualify as broke (rather than homeless) and at the end of it finds himself unable
to send his son to college because his money was spent by the NASA to develop technologies that will eventually make multi-billion dollar contractors
even richer as they use that technology to provide the luxury of slightly faster internet access to those who can afford to purchase it- all
ostensibly in the name of building a space station or some such business... that person would qualify as unjustly burdened in my mind.
Which "sectors" are you referring to?
Those which are strategically necessary to all Americans to maintain as a contingency, but could not survive without preferential tax treatment and in
some cases subsidies. Shipbuilding is a good example- the Navy has to order a certain number of ships, need them or not, to keep the industry afloat
so that they'll be there when we need them to build the next line of defense against a new threat. Farming in some cases qualifies. Etc.
The trade decifit would be reduced if companies are able to produce more here in America, which would happen if their operating costs are
lowered an avg. of 30%.
Where will this operating cost reduction come from? Their operating costs are already offset by prices. The Unfair Tax is just going to make it
impossible for any portion of that passed down cost to be reflected back to the shareholders and owners, thereby taking money out of the consumers
hands and reducing sales. Now if this does not completely crush our economy, we can export and the rich will make a ton of money on that (assuming
that foreign nations can afford to pick up the slack for the American consumer) but what good is a trade surplus which is bought at the expense of
quality of life? It might look good on the balance sheet (if nothing goes horribly wrong) but it's going to look like crap on main street.
And, although $1.00 per hour is almost criminal by most standards, it usually represents a dramatic increase in the wages one would normally
make in those countries.
It's OK to exploit the hell out people because they were in trouble before you showed up? You take a job from a fellow American, take it to the most
desperate people on Earth and don't pay them enough to live in human conditions, create a several-hundred percent profit margin, and pat yourself on
the back as a humanitarian?
By that rationale, I can import 12 year olds from Ethiopia to work in America as sex slaves. Hey, it's marginally better than what they had before-
at least they won't starve to death, and I'm making money. Everybody wins, right?
I'll give the website a little more combing over, but the general principle seems hopeless. They will need very detailed numbers to convince me.