Text 1099, 85 rader
Skriven 2006-06-12 23:24:00 av BOB KLAHN (1:123/140)
     Kommentar till en text av JOHN MASSEY
Ärende: Tax breaks
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">>   The lobbyists are much more into the spending side, than the
 BK>>   taxing side. On the taxing side, with the fairtax, the lobbyists
 BK>>   declare victory and go home.

 JM> I don't know about declareing victory but the going home
 JM> part I agreee with.

 RS>>> Will it increase or decrease prices?
 RS>>> I don't know.

 BK>>   Not much, if at all.

 RS>>> But it does appear to be a good idea.

 BK>>   Not if you want to run a government.

 JM> Care to explain why?

 There are two problems I am looking at. The first is the
 transition, which I think will be a whistling bitch. Nothing
 that big ever goes off without a hitch. These days, really big
 hitches seem to be the norm. Comes the first month, and the
 poverty rebates are supposed to be sent out, and the treasury
 dept will tell the president, "We can't send them out, we don't
 have the money." Unless you keep both systems running in
 parallel, which will really be trouble. Of course, it could be
 done in a phased conversion, which would be much less trouble,
 but that also allows them to stop the whole thing and go back
 if, as I expect, it doesn't work.

 The second part is the long term collection. With the rich not
 paying as much, and the very poor paying nothing, to reach that
 "average" 23%, the middle class is going to have to pay more. A
 lot more. There will be your tax revolt. When the actual sales
 tax rate starts going up from the promised 23%, the middle class
 will demand it all be reversed.

 Your own figures give an average of 23%, combined Social
 Security and income taxes. That money has to be collected. That
 is not even counting all the business type taxes you plan to get
 rid of. I do not see it likely that the middle class will get
 away with paying the "average". It just doesn't add up.

 RS>>> The biggest hurdle to anything like the fair Tax being
 RS>>> enacted, is the fact the lobbyist/politician cabal is
 RS>>> simply too entrenched in governments.

 BK>>   The lobbyists would consider the fairtax a total victory.

 JM> Care to explain why?

 Most lobbyists I have ever heard of are on the spending side.
 Those who are interested in reducing taxes are not interested in
 doing so for the benefit of the working class or poor. They are
 looking out for the wealthy. Even the rich.

 With a switch to fairtax the rich will no longer pay tax on what
 they earn. Since the rich can put more of their income into
 investments, they will wind up paying less in taxes. The poverty
 rebate will be trivial to them, but the reduction from 35% or
 whatever, to 23%, will represent a significant benefit. The best
 they can expect to do. They already enjoy benefits on reduced
 capital gains, and dividends, but that can be reversed. By
 fairtax, that will never happen.

 Oh, and the portion put into investments will escape taxation,
 and, at retirement, they can just buy a nice little beachfront
 home in Mexico and that income will go untaxed forever. Or buy a
 yacht, made in some foreign country, and sail the ocean, with
 the same result.

 Then their children can inherit what is left, as forever untaxed
 income.

 All your "expert" claims are based on "models" and suppositions.
 Until it's proven in practice, it's just guesswork. I don't see
 it working. If it works, fine, but then it's too late if it
 doesn't work.

BOB KLAHN bob.klahn@sev.org   http://home.toltbbs.com/bobklahn

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