Non partison econmic debate.

Free market vs Econmic regulation.
High taxs and government services vs low taxs private enterpise. This is a broad econmic debate.


First of I am a supporter of the free market. The biggest fault of the free market econmy isnt the idea but the way governments practice it. One need look no future then the fact that people are still paying the same amount of tax and are having to pay for more services.

Do Americans pay less tax for private health care? A mix picture appears.

info
more complex answer

Half the problem is there are to many hidden taxs can you even buy a bottle of sugar without paying a sugar tax? Surely if hidden taxs were rid of goods and services would be cheaper and the quality of living would improve. The only danger is that over spending can lead to high inflation and high interest rates.

Im a selfish person why should I have to pay for someone elses health care?
Why waste tax dollars on huge waiting lists?
Why should I pay for some one elses education?

I also want deal with the likes of low wages. Lower wages dosnt = more jobs and international econmic compitiveness. NZ is proof of this if the former was true NZ would be would be out doing Aust in the econmic stakes.

Trade unions are great in threoy but do they work in practice? In practice unions seem to be more intrested in power then people. When I went to school in Aust teachers seem to spend more time on strike then teaching. I have never met someone who has benfited from a union. I remember seeing an interview with a aussie who workes in NZ he said he use to spend all day in Aust dealing with unions.

Half hearted attepts at a free market econmy only lowers the standard of living governments must aboilsh or lower income tax and aboilsh hidden taxs for the free market to function.

Note in NZ the measuring stick is the
OECD

If this becomes a liberal vs consertive slug fest I will requst this thread be closed.
Can increased government spending on health and education be put to good use and not get flushed down the toilet?

Do you get value for your tax dollar?

I am looking foward to hearing from Socialists and from other people whos ideas differ from mine.

Originally posted by xpert11
Free market vs Econmic regulation.
High taxs and government services vs low taxs private enterpise. This is a broad econmic debate.

Indeed it is, and please forgive me if some of my reply isn't perfectly relevant to the aspects you have discussed. This is a great topic though and we should try to promote activity on it.

First of I am a supporter of the free market. The biggest fault of the free market econmy isnt the idea but the way governments practice it.

Lassiez Faire isn't very well practiced anymore but in some cases isn't adviseable. Economics isn't purely science. The "viewers" interaction with the work comes into play, making it an art in some regards. Thus it may be impossible to perfectly manage the economy.
There is a related problem with economics which rivals this first problem you mention. The suppliers and employers are more coordinated than consumers and workers. This makes their end of the bargain a little more scientific and can work to defeat or manipulate market forces in their favor. This is why I'm a huge fan of private organization- such as labor unions.

At this point I will still be touching on issues you have raised such as education, healthcare, and the effectiveness of unions, but I will be doing it according to the flow of my own post so I won't be able to quote you.

At the most basic level, the strength of an economy is gauged by the movement of needed goods and services which consumers can obtain by the movement of that money. If money is moving too much and not getting enough for it- that's inflation. If money isn't moving enough to get the things people need- that's stagnation.

Before I go further I will explain my view of the circulation of money. In short- money floats. Goods and services are purchased from corporations, which are held primarily by the wealthy. Therefore when money flows it inevitably ends up back in their hands. It must by some means be channeled back to the bottom so that it can float again and keep moving or you will have stagnation. There are two ways to accomplish this. The first is through wages and the second is through taxes which are spent on public goods which the working people will use. Too much of the first can result in inflation. Too much of the second can stagnate industries which do not recieve business from tax dollars, resulting in layoffs, lower wages, reduced tax income from those sectors, and a net loss to the economy.

So the question here is how to achieve an appropriate flow of wages and tax revenue to keep the economy moving without relying too much on taxation and without letting consumers go crazy and create inflation.

Labor unions are a great way to raise wages, provide medical coverage, retirement funds, etc while ensuring that employers get something out of the deal as well. The benefits we gain are paid for by our wages- its not a government handout that the unemployed or "undocumented" (read illegal) immigrants can abuse. We are well trained, do quality work, get appropriate wages, and out of those wages we pay as a group for the benefits that would cost us much more as individuals. Also, because it is not a government monopoly, but a group of private citizens moving as a group, insurance providers and medical professionals must compete for our business. A union is in some respects, especially when it comes to our medical care, a miniature socialist government, but because there are many we preserve competition to some extent and as I have already said, everyone pays their share. We all make roughly the same wages in the union (once we are journeymen) so you don't have the phenomenon that you see in government programs of people contributing unequally and getting the same benefits. In a government program, if person A goes to college and gets a job that pays 20 bucks an hour, he ends up picking up the slack for person B who chose not to go to school and worked at McDonalds his whole life. Union plans and private organizations which offer various levels of coverage depending on what you can pay are more fair than the socialist model.

Union wage agreements work far better than a minimum wage too. Minimum wages which the employer gets nothing out of, which blanket all industries and levels of training (the union pay scale is tiered- you don't make full wages until you've graduated a 2-3 year apprenticeship), and which aren't backed by any form of enforcement are too broad to be fair.

In practice unions seem to be more intrested in power then people. When I went to school in Aust teachers seem to spend more time on strike then teaching. I have never met someone who has benfited from a union.

You've met one now, and I can speak for 3 other members of my family as well as well as countless co-workers. I work with people of every stripe. We've got immigrants, reformed felons, and smart people who just don't like desk work, and plenty of others. We'd all be picking fruit or painting houses for minimum wage if there hadn't been an organization to teach us a trade and make it worth our while- the government wouldn't have helped us.

There is something wrong with teachers unions. They seem to be more political and less interested in accomplishing their jobs. It probably has something to do with working for the government. When I was in school my teachers hadn't recieved a cost of living adjustment in over a decade. They are the exception as far as I can tell though. Working with engineers, carpenters, and to a lesser extent teamsters (for some reason the few teamsters I've met were extremely accident prone) unions are a good thing.


I don't want to derail too far onto the union thing because they are not a panacea. At the end of the day though, my theory on economics is that you want high wages, low taxes- not withstanding the application of Keynesian economics- government intiatives which create jobs such as building infrastructure, and you want a government that is largely geared towards supervising and regulating, not trying to fill a niche in the market place.
This semi-socialist thing we do in America, where you have a government monopoly which doesn't provide enough to be useful and only saps the peoples ability to afford the free market answers to the things they need, is a disaster.

Now we have a much better appreciation of sustainability, ecology and finite resources it strikes me that a 'free market' is not exactly the most sensible way to be doing things.

The balance sheet (where so many of the real costs and expenses are absent) is hardly the be all and end all.

IMO we should be maximising the efficiency our efforts, not, for example as we do with cars, duplicating the various efforts ad infinitum (and with the smallest marginal differences).

We should also be forcing the total cost on to the agenda, selling me tyres at £30 a time is a lie when there are disposal costs of a further £5+ to account for.

As a friend once remarked to me, it's funny that just as we started to understand that a degree of 'command economy' was actually what we needed to be doing it disappeared.

Originally posted by sminkeypinkey


As a friend once remarked to me, it's funny that just as we started to understand that a degree of 'command economy' was actually what we needed to be doing it disappeared.

Thanks for the replys.

The command econmy is to ridged.
I dont think the government should decide the price of good and services.
Heres an example the railways were once profitable in NZ this was because any goods that travled over 18Km had to travel via rail. Note the NZ railways also employed lagre numbers of people.

Dont transport firms have the right to compete on equal terms with the railways?

Also if governments restrict imports to protect local jobs it limteds the consumers choice why shouldnt I be able to buy a prouduct from overseas ?
The government shouldnt decide how I can spend my money.

When the government controlls the export market it denys people the right to seek differnt markets for there prouducts.

The free market caused short term pain it terms of job loses but in the long term we are better off not living with econmic false hoods.

Originally posted by xpert11
The command econmy is to ridged.

- I don't see why this has to be.
We already have certain goods made effectively to order.

I dont think the government should decide the price of good and services.
Heres an example the railways were once profitable in NZ this was because any goods that travled over 18Km had to travel via rail. Note the NZ railways also employed lagre numbers of people.

Dont transport firms have the right to compete on equal terms with the railways?

- If all the costs are included in the calculation then perhaps so.

This is the point about sustainability. Only when you work out the total costs can you make informed judgements.

Also if governments restrict imports to protect local jobs it limteds the consumers choice why shouldnt I be able to buy a prouduct from overseas ?

- ......and if that consumer choice comes at the expense of our own society and environment?

The government shouldnt decide how I can spend my money.

- None of us live in a bubble. We 'tell' each other what to do all the time.

When the government controlls the export market it denys people the right to seek differnt markets for there prouducts.

- I'm not for restricting exports, imports or stopping efficient production where ever that may be per se; I am for people facing the real costs that such trade brings.

ie facing the consequences of the several thousand air miles flown to take a product which can be just as easily produced at home or the social impact of the collapse of a particular industry etc etc.

The free market caused short term pain it terms of job loses but in the long term we are better off not living with econmic false hoods.

- It may be that a 'free market' is in the longer term the biggest economic falsehood of them all.

Originally posted by sminkeypinkey

- I don't see why this has to be.
We already have certain goods made effectively to order.

The market not the government should decide supply & demand.



- If all the costs are included in the calculation then perhaps so.

- ......and if that consumer choice comes at the expense of our own society and environment?

At the end of the day most people choose lower prices over local jobs and the environment when given a choice.

- None of us live in a bubble. We 'tell' each other what to do all the time.

Aside from paying tax you decide how your money is spend.

ie facing the consequences of the several thousand air miles flown to take a product which can be just as easily produced at home or the social impact of the collapse of a particular industry etc etc.

Not really Countries were basic human rights exist cant compete with the likes of China. It is still cheaper to assemble goods in sweat shops in China and ship them around the world then it is to manufacture these goods in first world countries.

- It may be that a 'free market' is in the longer term the biggest economic falsehood of them all.

If the free market fails it will be due to government mismangerment not the idea. Governments need to aboilsh hidden taxs graudly in order to avoid high inflation. The free market will fail if governments only take half measures. I dont think there is one true free market econmy in the world.

"Redistribution" is another word for Socialist" and "marxist" principles, and they never work in their true forms. I can only speak froman American viewpoint, but there are things that exist in all countries, free market or not.
There will always be the haves and have-nots; the will and the will-nots and the do and the do-nots. There-in lies the largest portion of crime and social programs. Also... "poor" people in America don't pay any taxes.
America.... still a work in progress, has shown that the free market, along with liberty and freedom, has raised the baseline of human existance. As a percentage, there are very few homeless people here, and the "poor" have things that lower-middle class people 40 years ago could never have had.
America, like a lot of countries, is having a problem with goods from China, or our manufacturing base going there, too. The reason for this is the high cost of doing business because of taxes, both state and federal.

The "command economy" mentioned in this thread failed because it had Socialism and Marxism at it's core. When people have the liberty and freedom to act upon a resoirce, wealth is generated. However, it is only when the people, themselves, are allowed to keep much of the profits, with little or no government intervention, does it work to its best conclusion.

Countries trade between themselves because people "want" things, and other countries, especially up and coming economies, want to provide their people with jobd/income. After all, that is (or should be) one of the main jobs of governments, to allow their people the freedom to work and make a living.

Hhhmmmm it is indeed difficult not to make this a left or center issue.

Unions were a good idea in their day; most were formed because of worker safety issues. However, over the years, since the unions voted (mostly for the left) for big government, that government started beuracracies (sp) like OSHA, and others, which took the steam out of what unions were there to do. I used to belong to two unions, one of them the UAW, as a steward, then saw very clearly that negotiations weren't worker against the company, but worker against worker, on the supposition that only union workers could do a given job.

"......There is something wrong with teachers unions. They seem to be more political and less interested in accomplishing their jobs. It probably has something to do with working for the government. When I was in school my teachers hadn't recieved a cost of living adjustment in over a decade. They are the exception as far as I can tell though. Working with engineers, carpenters, and to a lesser extent teamsters (for some reason the few teamsters I've met were extremely accident prone) unions are a good thing."

REPLY:
High benefits and wages drove the cost of many products up (as seen now in what's happening with Ford and GM) and eventually we all pay the cost, as will our economy. A good example of this is the "job banks" at the big three automakers; 12,000 people paiud $23.00 per hour to go to work and, literally, do nothing.... that's over $574 million dollars per year, plus add in the benefits, and there goes another $350 million per year. One has only to add to divide that by the amount of vehicles produced yearly, and there you have how much extra people had to pay for each vehicle.... a benefit for the union workers, but the rest of America paid dearly. Now.... it's caught up with the companies and, as a result, our economy will suffer for many years to come.

You are indeed correct that teachers unions, as well as the Dept. of Education, are indeed political and, unfortunately, have ruined our education system, and the futures of three decades of young people.

Inflation is caused mainly by one thing...... printing more money than there is hard currency (precious metals) to back it up.

In short, free markets work quite well, when worked by free people; it is the intervention of government that things get messed up. The use of certain "socialist" programs fail for the same reason, IE: people who want "free money" will always vote for those who will give it to them.

One of Americas failings has been the socialist programs..... WIC; Welfare; Medicare; Medicaid, and on and on. There's a large difference between a hand up and a handout, and those who benefit most are the government agencies that control the programs, as it takes 25% to 50% of monies generated/collected to keep them operating.

Money taken away every week, at the point of a gun, would be better served by those who worked for it; money that could be saved and invested in ones-self or their families, to pay for medication, medical services, etc, which would negate the need for those government programs... which is exactly why the government will never get rid of them.

"...... Keynesian economics".
REPLY: ..... never work; doing the math proves that. Also, "government" can only create jobs by getting out of the way of the economy.. government intervention only creates a short-circuit in the flow of a free economy. One example is the "third-party" paayer health care system, which drives up the cost of health care like crazy. It is that very thing that will quickly surpass all other expendirures of our government.

Just so happens that Xpert and I got into another economic discussion so I'm back. Here is a quick brief on the discussion so far (started as a discussion of what a good political party ought to be advocating)

Xpert11

TheVagabondI don't believe in punishing success, but I also don't believe that the successful need the government's help. Money floats. You don't see wealth naturally accumulating in the hands of mechanics and walmart employees.
If you leave them more of their own money and empower them to earn more money (but not just give it to them mind you) they're going to spend it and they're going to invest it and that money will fuel the economy and find its way to the successful, inturn being paid back to employees and being recycled back up through consumption and investment.

First all I want say that I agree with your sentiments.
I have a question How are people spose to invest money when there wages have gone up about $2 in 10 years?
It would be hard enough for the average NZ worker little alone the American worker who may earn less.

Im not against taxs cuts but it seems to me that they are canceled out by rises in inflation when wages are stagnet.

I hope Xpert doesn't mind me posting the content of his U2U, but if I understand correctly we were only doing it by U2U so as not to interrupt the thread where this came up.

My answer would be that to keep inflation from killing a tax cut you'd have to target part of the tax cut to specific purposes, thereby keeping that money out of the reach of demand-driven inflation.
Stagnant wages aren't good, but you also don't necessarily want to increase wages on their own too dramatically (I'm all for high wages but something has to come out of it or you get a cycle of wage-price competition).

I 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, you get a quality of life increase without driving up inflation by pushing more money into the economy that can trigger a price increase.

Although I doubt the US can aspire to it, a trade surplus is always very nice. When your workers aren't consuming their own products you don't get the inflation from the wage vs price tug-of-war.

A trade deficit on the other hand is a devious little thing, because consumers think they're getting it cheap, not realizing the money they could be making producing certain items, and of course not everyone can work in every industry, but everyone is affected by every job that goes overseas because every guy who ends up working at Walmart instead of manufacturing cars, repairing machinery in a VCR factory, or what have you is driving down tax revenues and therefore necessitating an increase in the tax rate.

So what you really want to do in my opinion is increase the overall quality of jobs by manipulating your tax code in a way that's going to create the right jobs, hedge out some import buying, enable better exporting, and increase the overall quality of life.

You target your tax breaks to help your export industries by helping people get through college and get in there, and perhaps also by investing some of the taxes that that particular industry pays back into infrastructure that supports that industry.

You target your tax breaks to create the right domestic jobs while also increasing quality of life. Give people a break for buying a hybrid car- even better break if its American made. Or you give a housing break, bigger break for new homes to stimulate demand in the construction industry.


This post would be longer, but I'm pretty ticked at the train of thought that's developing in my head right now, and I think I need to evaluate some of the stuff I'm thinking about before I expand on it too much (I've decided not to post a lot of it at all). Taxation, economics in general really, opens up a huge moral can of worms. It's almost enough to make a guy want to pull a Thoreau and withdraw from society and economics. Anyway, maybe more from me when I've hammered out a few things in my own mind.

The Vagabond I aprecheate the feed back in this thread. I agree with the ideas you have presented . I cant think of anything else it is new years day.
Cheers Xpert11.

While healthcare might be made cheaper on a case by case basis by some sort of socialization of the overall cost, the simple fact is that, on whole, it's axiomatically cheaper to pay health care professionals directly than it is to pay insurance companies and/or bureaucrats so that they will, in turn, pay the healthcare professionals.

Every insurance company employee and every bureaucrat who makes a living off of distributing money to healthcare professionals represents an addition to the overall cost of healthcare.

".... I think if you cut unnecessary government spending in some areas to fund large and well-targeted tax breaks for college education, medical insurance, housing...."

REPLY: That's been tried and, as usual, the government screws it up. Also, that's using Socialist/Marxist ideas, and math and history shows it never works. It also is against our Constitution and/or Bill of Rights.
Any type of third-party pay system only creates more government, and drives up the costs and taxes for everyone.

Tax breaks for "certain" industries? Businesses/corporations don't pay any taxes.... the cost of keeping with the tax laws (lawyers, CPA's, accounting, lobbyists) are included in the cost of goods and services.

What might have a chance in the near future, would be the "Fair Tax", info on which can be found at the following: www.fairtax.org...
It would totally get rid of the 9 million-word tax laws, and replace it with something far better. The American economy would literally explode, and drive down costs so that millions of jobs would return to, or be created in, america. Just think...... we could manufacture our own shoes again.
Of course, the EU would go through the roof, and it would put a real crimp on Chinas exports to the US (which would reduce the trade decifit to a great degree.

The best thing is all the tens of thousands of IRS workers wouldn't lost their jobs; we could turn them into border agents, where they could actually do something beneficial.

Bob LaoTse: You are absolutely correct in your post.


[edit on 2-1-2006 by zappafan1]

Originally posted by zappafan1
That's been tried and, as usual, the government screws it up. Also, that's using Socialist/Marxist ideas, and math and history shows it never works. It also is against our Constitution and/or Bill of Rights.

How is it marxist to allow a man to keep the income which he earned. I'm not talking about a handout. I'm talking about two perfectly constitutional ideas which are completely compatible with free markets.
1. Reducing Government Spending.
2. Allowing people who contribute to society by investing in themselves and their stake in society to write said investments off of their taxes.

Tax breaks for "certain" industries? Businesses/corporations don't pay any taxes

Are you denying that business revenues are taxed or are you trying to play a semantical game with me?

What might have a chance in the near future, would be the "Fair Tax", info on which can be found at the following: www.fairtax.org...

The consumption tax is regressive in nature, encourages blackmarket and smuggling activity, rewards hoarding and stagnation of capital, is redundant, and is inflexible to the needs of individuals, allowing the government no ability to provide tax relief to those who are unjustly burdened, nor to sectors which are vital to the nation but impossible without government support.
Taxation in general is an ugly thing- there's no perfect system.

The American economy would literally explode,

You say explode, I say meltdown.
How exactly will a consumption tax revive our economy and fix our trade defecit? Does the consumption tax eliminate the minimum wage? Or does it remove tax burdens from producers entirely (keeping in mind that producers must consume materials and equipment) thereby shifting all taxation to the common man?
If it does neither of those things, then it can't possibly give American business an advantage over sweatshop labor abroad.

If I have missed something, i am willing to listen with a completely open mind, but at my current understanding, I see no way that your assertions coudl be correct, and must stand by for your explanation.

That's been tried and, as usual, the government screws it up. Also, that's using Socialist/Marxist ideas, and math and history shows it never works. It also is against our Constitution and/or Bill of Rights.

".... How is it marxist to allow a man to keep the income which he earned. I'm not talking about a handout. I'm talking about two perfectly constitutional ideas which are completely compatible with free markets.
1. Reducing Government Spending.
2. Allowing people who contribute to society by investing in themselves and their stake in society to write said investments off of their taxes."

REPLY: I was responding to the idea of taxes going to fund the various Social programs, which is definately Marxist. The progressive tax system currently in place is also based on Marxist principals. The two points you make above are indeed Constitutional, and I have no problem with those ideas at all.

Tax breaks for "certain" industries? Businesses/corporations don't pay any taxes.

".... Are you denying that business revenues are taxed or are you trying to play a semantical game with me?"

REPLY: No semantics whatsoever.... it's basic economics. Corporate or business taxes are included in what consumers pay for any goods and services, then the company pays their taxes out of that money. Just as the costs to a company for, lets say raw materials, is included in the price of their final product.

What might have a chance in the near future, would be the "Fair Tax", info on which can be found at the following: www.fairtax.org...

".... The consumption tax is regressive in nature, encourages blackmarket and smuggling activity, rewards hoarding and stagnation of capital, is redundant, and is inflexible to the needs of individuals, allowing the government no ability to provide tax relief to those who are unjustly burdened, nor to sectors which are vital to the nation but impossible without government support.
Taxation in general is an ugly thing- there's no perfect system."

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.
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.
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.l
No, a VAT would be redundant.
"Unjustly burdened" would describe excessive corporate taxation, which the Fait Tax would eliminate.
Which "sectors" are you referring to?

".... The American economy would literally explode; You say explode, I say meltdown.
How exactly will a consumption tax revive our economy and fix our trade defecit? Does the consumption tax eliminate the minimum wage? Or does it remove tax burdens from producers entirely (keeping in mind that producers must consume materials and equipment) thereby shifting all taxation to the common man?"

REPLY: The F.T. will actually increase government income which will help the economy (which is booming right now, thanks to the reductions in the tax rates... which most mistakenly call "tax cuts".)
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%.
The taxes are ALWAYS shifted to the consumer, as described above.
You need to take the time to read everything on the Fair Tax website, as it will answer your questions better than I can.... although I've read through all of it a few times.

".... If it does neither of those things, then it can't possibly give American business an advantage over sweatshop labor abroad."

REPLY: There have been more than a few studies that show most "sweat shops" are nothing of the sort. 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.

".... If I have missed something, i am willing to listen with a completely open mind, but at my current understanding, I see no way that your assertions coudl be correct, and must stand by for your explanation."

REPLY: An open mind is quite refreshing (and would be a breath of fresh air in many threads 8^)
Again, a complete digesting of the information provided on the F.T. website would be very informative. True, no tax system is totally fair, but the F.T. is totally revenue neutral. Even those who are at the lower levels of income are reimbursed their taxes (which I don't agree with).

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' money.

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 goods.
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 (Wikipedia)
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 qualify.

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.

Originally posted by The Vagabond

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' money.

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 goods.
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 (Wikipedia)
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 qualify.

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.

I'm on a 14 hour shift, but I'll reply to this soon. Thanks.