Fair Tax

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Are you in favor of the Fair Tax Proposal..aka...National Sales Tax?

Yes
19
79%
No
5
21%
 
Total votes : 24

Fair Tax

Postby S2M » Sat Aug 07, 2010 3:28 am

Are you in favor of the Fair Tax Proposal?

I'm totally in favor of it in a general way. I have no idea how the final National Sales Tax proposal will look, but in principle seems like an excellent idea...some of the pros and cons are:

PRO - will be easier to understand than current tax code.
PRO - will eliminate tax on investments.
PRO - in taxing consumption rather than production workers would have incentive to work harder, since they wouldn't be taxed more for more hours, and there would be no such things as 'tax brackets'
PRO - the biggest pro being a larger tax base that illegals wouldn't be able to dodge....no problem that they don't work...when they want to buy something...SLAM! 25% National Sales Tax...lol
PRO - elimination of IRS..

CON - the sales tax would have to be rather high to offset elimination of income tax, to keep revenue stable...some estimates ranging from 23%-30%....are you willing to walk into a Department of Motor Vehicles after buying a $20,000 car and dropping down another $6000 in sales tax? Which brings me to another CON...
CON - taxes on big ticket items would be astronomical. Houses, vehicles, and luxury items will be egregiously expensive...
CON - Tax industry would collapse, leading to mass unemployment..
CON - THE Fair Tax would increase entitlements...not quite sure how...I plan on looking into it.
CON - the biggest CON I see is people not spending as much, choosing to save, and/or paying off debt instead...which could really be a PRO at the same time. But with increased sales tax folks may hoard money...

I'm sure the more politically savvy can explain it better...I just think the pros outweigh the cons...
Last edited by S2M on Sat Aug 07, 2010 3:38 am, edited 1 time in total.
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Postby Sarah » Sat Aug 07, 2010 3:33 am

Would it replace local sales tax or add to it? I wouldn't be too jazzed to add another 25% onto LA County's current 10%.
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Postby S2M » Sat Aug 07, 2010 3:49 am

Those voting NO...please explain....
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Postby RedWingFan » Sat Aug 07, 2010 3:57 am

I voted yes! Now I know how it feels to have a meaningless vote like a Californian! :lol:
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Postby artist4perry » Sat Aug 07, 2010 3:57 am

S2M wrote:Those voting NO...please explain....


The federal government is already taking too much and spending is out of control..............How will the poor survive it? Have you ever thought of that? So many are unemployed and cannot make it now as it is. What happens when they get their hands on more money? They need more................they want more..............and they pass legislation to get more. Don't give me it is all Bush's fault agenda. Yes he started the whole ugly mess, and he was an idiot.............but why did they continue doing more of the same crap, why follow the behavior of an idiot? Greed. Look how much pork is attatched to every blamed bill! Money for earth worm studies and other useless pocket lining garbage that is killing our country and draining it totally dry. :evil: :evil: :evil:

Will that suffice? :D :wink: :lol: :lol: :lol: :lol:
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Postby conversationpc » Sat Aug 07, 2010 3:59 am

I've been a supporter of the Fair Tax for a few years now...

First off, the proposed rate is 23%. This would eliminate all other federal taxes and you would have no deductions from your check. That means most people's income would go up by about the same amount as the taxes they would be paying when they purchase goods and services. People would also get a monthly prebate check equivalent to the fair tax amount paid on essential goods and services up to the poverty level. This essentially eliminates the tax burden for the poor.

In my opinion, it would stimulate tons of economic growth and still be able to fund our government at current spending levels. Their official web site can answer the questions better than me, though... http://www.fairtax.org/site/PageServer? ... aq_answers
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Postby conversationpc » Sat Aug 07, 2010 4:01 am

artist4perry wrote:
S2M wrote:Those voting NO...please explain....


The federal government is already taking too much and spending is out of control..............How will the poor survive it? Have you ever thought of that? So many are unemployed and cannot make it now as it is. What happens when they get their hands on more money? They need more................they want more..............and they pass legislation to get more. Don't give me it is all Bush's fault agenda. Yes he started the whole ugly mess, and he was an idiot.............but why did they continue doing more of the same crap, why follow the behavior of an idiot? Greed. Look how much pork is attatched to every blamed bill! Money for earth worm studies and other useless pocket lining garbage that is killing our country and draining it totally dry. :evil: :evil: :evil:

Will that suffice? :D :wink: :lol: :lol: :lol: :lol:


Ginger, it eliminates all federal taxes paid by the poor and the monthly prebate check covers essential goods and services up to the poverty level.
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Postby artist4perry » Sat Aug 07, 2010 4:02 am

conversationpc wrote:I've been a supporter of the Fair Tax for a few years now...

First off, the proposed rate is 23%. This would eliminate all other federal taxes and you would have no deductions from your check. That means most people's income would go up by about the same amount as the taxes they would be paying when they purchase goods and services. People would also get a monthly prebate check equivalent to the fair tax amount paid on essential goods and services up to the poverty level. This essentially eliminates the tax burden for the poor.

In my opinion, it would stimulate tons of economic growth and still be able to fund our government at current spending levels. Their official web site can answer the questions better than me, though... http://www.fairtax.org/site/PageServer? ... aq_answers


What will keep the rate from hiking when the Medical stuff starts coming to a pocketbook near you? And the stimulus bill, and the other new stimulus bill they want..................I hate congress. :evil:
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Postby lights1961 » Sat Aug 07, 2010 4:03 am

IF IT REPLACES THE IRS... it will be worth it... if the National Sales TAX, replaces the FICA, STATE and local sales tax and property tax then yes it would be an awesome thing... WE WOULD HAVE MORE in our paycheck to actually pay for the big ticket items... thats how I see it... look at what your pay check is each week or month now and see how much is taken out... then look at your property tax if you own a house how much it is... if you dont have those expenses... WOW... but if the national sales tax... doesnt take the place of any other taxes... then this the national sales tax is BS...

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Postby conversationpc » Sat Aug 07, 2010 4:06 am

artist4perry wrote:
conversationpc wrote:I've been a supporter of the Fair Tax for a few years now...

First off, the proposed rate is 23%. This would eliminate all other federal taxes and you would have no deductions from your check. That means most people's income would go up by about the same amount as the taxes they would be paying when they purchase goods and services. People would also get a monthly prebate check equivalent to the fair tax amount paid on essential goods and services up to the poverty level. This essentially eliminates the tax burden for the poor.

In my opinion, it would stimulate tons of economic growth and still be able to fund our government at current spending levels. Their official web site can answer the questions better than me, though... http://www.fairtax.org/site/PageServer? ... aq_answers


What will keep the rate from hiking when the Medical stuff starts coming to a pocketbook near you? And the stimulus bill, and the other new stimulus bill they want..................I hate congress. :evil:


From what I understand, it requires an amendment to the constitution to enact it. I'm not sure on the requirements for changing the rate.
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Postby artist4perry » Sat Aug 07, 2010 4:07 am

conversationpc wrote:
artist4perry wrote:
conversationpc wrote:I've been a supporter of the Fair Tax for a few years now...

First off, the proposed rate is 23%. This would eliminate all other federal taxes and you would have no deductions from your check. That means most people's income would go up by about the same amount as the taxes they would be paying when they purchase goods and services. People would also get a monthly prebate check equivalent to the fair tax amount paid on essential goods and services up to the poverty level. This essentially eliminates the tax burden for the poor.

In my opinion, it would stimulate tons of economic growth and still be able to fund our government at current spending levels. Their official web site can answer the questions better than me, though... http://www.fairtax.org/site/PageServer? ... aq_answers


What will keep the rate from hiking when the Medical stuff starts coming to a pocketbook near you? And the stimulus bill, and the other new stimulus bill they want..................I hate congress. :evil:


From what I understand, it requires an amendment to the constitution to enact it. I'm not sure on the requirements for changing the rate.


I just don't trust them. :evil:
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Postby conversationpc » Sat Aug 07, 2010 4:09 am

artist4perry wrote:
conversationpc wrote:
artist4perry wrote:
conversationpc wrote:I've been a supporter of the Fair Tax for a few years now...

First off, the proposed rate is 23%. This would eliminate all other federal taxes and you would have no deductions from your check. That means most people's income would go up by about the same amount as the taxes they would be paying when they purchase goods and services. People would also get a monthly prebate check equivalent to the fair tax amount paid on essential goods and services up to the poverty level. This essentially eliminates the tax burden for the poor.

In my opinion, it would stimulate tons of economic growth and still be able to fund our government at current spending levels. Their official web site can answer the questions better than me, though... http://www.fairtax.org/site/PageServer? ... aq_answers


What will keep the rate from hiking when the Medical stuff starts coming to a pocketbook near you? And the stimulus bill, and the other new stimulus bill they want..................I hate congress. :evil:


From what I understand, it requires an amendment to the constitution to enact it. I'm not sure on the requirements for changing the rate.


I just don't trust them. :evil:


Here's what the Fair Tax FAQ says on this...

Yes, of course Congress can raise the FairTax rate just as it could raise the flat tax rate or can and does raise the income tax rate. And if we in the grass roots allow them to do it, shame on us!

However, the FairTax is highly visible. And because there is only one tax rate, it will be very hard for Congress to adopt the typical divide-and-conquer, hide-and-disguise strategy employed today to ratchet up the burden gradually, by manipulating the income tax code. Ultimately, the tax rate will be dictated by the size of government. If government gets larger, higher tax rates will be required. If government shrinks relative to the economy, then the tax rate will fall. Federalist 21, by Alexander Hamilton, is a great read on the futility of government raising a consumption tax too high, and thus reducing revenues.
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Postby artist4perry » Sat Aug 07, 2010 4:15 am

conversationpc wrote:
artist4perry wrote:
conversationpc wrote:
artist4perry wrote:
conversationpc wrote:I've been a supporter of the Fair Tax for a few years now...

First off, the proposed rate is 23%. This would eliminate all other federal taxes and you would have no deductions from your check. That means most people's income would go up by about the same amount as the taxes they would be paying when they purchase goods and services. People would also get a monthly prebate check equivalent to the fair tax amount paid on essential goods and services up to the poverty level. This essentially eliminates the tax burden for the poor.

In my opinion, it would stimulate tons of economic growth and still be able to fund our government at current spending levels. Their official web site can answer the questions better than me, though... http://www.fairtax.org/site/PageServer? ... aq_answers


What will keep the rate from hiking when the Medical stuff starts coming to a pocketbook near you? And the stimulus bill, and the other new stimulus bill they want..................I hate congress. :evil:


From what I understand, it requires an amendment to the constitution to enact it. I'm not sure on the requirements for changing the rate.


I just don't trust them. :evil:


Here's what the Fair Tax FAQ says on this...

Yes, of course Congress can raise the FairTax rate just as it could raise the flat tax rate or can and does raise the income tax rate. And if we in the grass roots allow them to do it, shame on us!

However, the FairTax is highly visible. And because there is only one tax rate, it will be very hard for Congress to adopt the typical divide-and-conquer, hide-and-disguise strategy employed today to ratchet up the burden gradually, by manipulating the income tax code. Ultimately, the tax rate will be dictated by the size of government. If government gets larger, higher tax rates will be required. If government shrinks relative to the economy, then the tax rate will fall. Federalist 21, by Alexander Hamilton, is a great read on the futility of government raising a consumption tax too high, and thus reducing revenues.



But what if some greedy sorry excuse for a congress..........like the one we have now..........goes on a massive shopping spree and Big Government........cradle to grave...........pocket lining...........sorry excuse of a group hikes it way up? I don't see anything too fair about that. I see trouble brewing down the line for us all. I am afraid we need to pay off any debts and save as much as we can. We may lose our shirts before it is all said and done. :(
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Postby AlteredDNA » Sat Aug 07, 2010 4:17 am

artist4perry wrote:But what if some greedy sorry excuse for a congress..........like the one we have now..........goes on a massive shopping spree and Big Government........cradle to grave...........pocket lining...........sorry excuse of a group hikes it way up? I don't see anything too fair about that. I see trouble brewing down the line for us all. I am afraid we need to pay off any debts and save as much as we can. We may lose our shirts before it is all said and done. :(


You don't think that happens now? :)

The big difference would be that your tax burden would not be tied to your income, but your spending, which you ultimately would have more control over...
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Postby artist4perry » Sat Aug 07, 2010 4:32 am

AlteredDNA wrote:
artist4perry wrote:But what if some greedy sorry excuse for a congress..........like the one we have now..........goes on a massive shopping spree and Big Government........cradle to grave...........pocket lining...........sorry excuse of a group hikes it way up? I don't see anything too fair about that. I see trouble brewing down the line for us all. I am afraid we need to pay off any debts and save as much as we can. We may lose our shirts before it is all said and done. :(


You don't think that happens now? :)

The big difference would be that your tax burden would not be tied to your income, but your spending, which you ultimately would have more control over...


Yes, but how much will our cost of living go up? Truly I just don't trust the present congress. I see a slippery slope ahead. Maybe it will be fine. But do you want to have less and less because they want more and more? I think it would be fine if we get the ones who just cannot wait to spend more than what China can loan out of there! :evil:

It might be fine. But if they have their way, the loopholes will start to kill us. We will be like Europe, where they tax your home for every peice of furniture you own in your house, and groceries wich are already sky high, will be unaffordable. I need to think about making my back yard a garden. And shoot the squirrels and rabbits for food. I would hate that. The rabbits and the squirrels are cool. 8)
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Postby Gin and Tonic Sky » Sat Aug 07, 2010 6:40 am

I would suppport a consumption tax only if the introduction mandated by law the elimation of the federal income tax and was accompanied by the abolishment of the IRS (and whilst they are at it the Deptartment of Education, Deptartment of Energy, and the National Endowment for the Humanities, etc etc)

Unfotunately in European countries you have a income tax which has rates that are equal or higher than the US Federal income tax , then pay consumption taxes of around 23 on top of it. I would fear that this would happen in the US given current spending trends.
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Postby steveo777 » Sat Aug 07, 2010 6:42 am

I'm in favor of eliminating the tiered tax system and going with a flat 10% across the board. No deductions, just a flat tax and they could fire 2/3 of the IRS that way. :D
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Postby brywool » Sat Aug 07, 2010 7:13 am

steveo777 wrote:I'm in favor of eliminating the tiered tax system and going with a flat 10% across the board. No deductions, just a flat tax and they could fire 2/3 of the IRS that way. :D


BINGO.

10% for all. No deductions. No Loopholes. 10% for ALL including churches.
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Postby Ehwmatt » Sat Aug 07, 2010 7:20 am

The flat tax is about as fair as it can get. Is it regressive? Yes. But in the aggregate, it's the fairest theoretical system out there.

The fair tax is nice, but even I think it has the potential to be overly regressive, and for me to think that... well I think most of you know my politics.

Either way, it'll never happen. Too many corrupt politicians, lawyers, accountants, etc rely on the complex system of taxation in place. What a goofy system we've developed.
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Postby brywool » Sat Aug 07, 2010 7:24 am

yeah, ya wouldn't want it to be fair now, would ya?

ridiculous. I used to think my parents were just cranky. No, they had just had a bellyfull of THE MAN f'ing things up.
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Postby Melissa » Sat Aug 07, 2010 7:27 am

All for it, have been always, but it'll never happen unfortunately! :lol:
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Postby Don » Sat Aug 07, 2010 7:34 am

Countries currently using a flat tax.

1. Bulgaria
2. Albania
3. Czech Republic
4. Estonia
5. Georgia
6. Guernsey
7. Kazakhstan
8. Iraq
9. Jersey
10. Kyrgyzstan
11. Latvia
12. Lithuania
13. Macedonia
14. Mongolia
15. Montenegro
16. Mauritius
17. Romania


Now a different list, the countries with the highest percentage of taxes. I'll limit it to the top 17 to correspond with the first list.

Tax in % of GDP
1. Sweden 51.3
2. Denmark 50.3
3. Belgium 45.5
4. Norway 44.3
5. France 44.0
6. Finland 43.9
7. Iceland 42.4
8. Austria 42.0
9. Italy 40.6
10. Slovenia 40.5
11. Germany 38.8
12. Hungary 38.5
13. Luxembourg 38.2
13. The Netherlands 38.2
15. Brazil 37.4
16. United Kingdom 37.0
17. New Zealand 36.6


Now, cross reference both lists with Countries rated with the highest standard of living.



1. Norway
2. Australia
3. Canada
4. Ireland
5. Netherlands
6. Sweden
7. France
8. Switzerland
9. Japan
10. Luxembourg
11. Finland
12. United States
13. Austria
14. Spain
15. Denmark
16. Belgium
17. Iceland

As we can see, none of the Flat Tax countries have made it on to the last (and for most folks, the most important) list.
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Postby Saint John » Sat Aug 07, 2010 7:39 am

Ehwmatt wrote:The flat tax is about as fair as it can get. Is it regressive? Yes. But in the aggregate, it's the fairest theoretical system out there.

The fair tax is nice, but even I think it has the potential to be overly regressive, and for me to think that... well I think most of you know my politics.

Either way, it'll never happen. Too many corrupt politicians, lawyers, accountants, etc rely on the complex system of taxation in place. What a goofy system we've developed.


I'm with Matt. Everyone, especially minorities and the bottom feeders (which are often one and the same), preach "equality." Well, here's their chance to put their fucking money (or lack there of) where their mouths are. It's simple, everyone should pay the same percentage. And talk about a really uneducated party; I love it when the race hustlers and other trash-vote hunting democrats try to sell tax cuts as wrong because Joe Millionaire, who makes 3 million dollars annually, is going to get a "Lexus" as part of his tax cut, while Joe Democrat, who makes 18 thousand dollars annually, is going to get the "tire" of the aforementioned Lexus. Boy, do they assume the inner cities of America are filled with uneducated dumbfucks ... and, boy, are they ever correct. :lol:
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Postby AlteredDNA » Sat Aug 07, 2010 7:44 am

Don wrote:Countries currently using a flat tax.

1. Bulgaria
2. Albania
3. Czech Republic
4. Estonia
5. Georgia
6. Guernsey
7. Kazakhstan
8. Iraq
9. Jersey
10. Kyrgyzstan
11. Latvia
12. Lithuania
13. Macedonia
14. Mongolia
15. Montenegro
16. Mauritius
17. Romania


Now a different list, the countries with the highest percentage of taxes. I'll limit it to the top 17 to correspond with the first list.

Tax in % of GDP
1. Sweden 51.3
2. Denmark 50.3
3. Belgium 45.5
4. Norway 44.3
5. France 44.0
6. Finland 43.9
7. Iceland 42.4
8. Austria 42.0
9. Italy 40.6
10. Slovenia 40.5
11. Germany 38.8
12. Hungary 38.5
13. Luxembourg 38.2
13. The Netherlands 38.2
15. Brazil 37.4
16. United Kingdom 37.0
17. New Zealand 36.6


Now, cross reference both lists with Countries rated with the highest standard of living.



1. Norway
2. Australia
3. Canada
4. Ireland
5. Netherlands
6. Sweden
7. France
8. Switzerland
9. Japan
10. Luxembourg
11. Finland
12. United States
13. Austria
14. Spain
15. Denmark
16. Belgium
17. Iceland

As we can see, none of the Flat Tax countries have made it on to the last (and for most folks, the most important) list.


I don't think the flat tax in those countries you listed has anything to do with their lower standard of living. Also, what factors into determining a "standard of living"...

Statistics can be tricky... ;)
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Postby RossValoryRocks » Sat Aug 07, 2010 8:01 am

AlteredDNA wrote:

Statistics can be tricky... ;)


The exact statistical terminology is "Correlation does not equal causation."

Just because on the basis of one set of statistics there appears to be a correlation it doesn't mean that you have found the cause.

To the uneducated, ignorant and just plain head in the sand types though it is enough justification for their world view.
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Postby Don » Sat Aug 07, 2010 8:01 am

AlteredDNA wrote:
Don wrote:Countries currently using a flat tax.

1. Bulgaria
2. Albania
3. Czech Republic
4. Estonia
5. Georgia
6. Guernsey
7. Kazakhstan
8. Iraq
9. Jersey
10. Kyrgyzstan
11. Latvia
12. Lithuania
13. Macedonia
14. Mongolia
15. Montenegro
16. Mauritius
17. Romania


Now a different list, the countries with the highest percentage of taxes. I'll limit it to the top 17 to correspond with the first list.

Tax in % of GDP
1. Sweden 51.3
2. Denmark 50.3
3. Belgium 45.5
4. Norway 44.3
5. France 44.0
6. Finland 43.9
7. Iceland 42.4
8. Austria 42.0
9. Italy 40.6
10. Slovenia 40.5
11. Germany 38.8
12. Hungary 38.5
13. Luxembourg 38.2
13. The Netherlands 38.2
15. Brazil 37.4
16. United Kingdom 37.0
17. New Zealand 36.6


Now, cross reference both lists with Countries rated with the highest standard of living.



1. Norway
2. Australia
3. Canada
4. Ireland
5. Netherlands
6. Sweden
7. France
8. Switzerland
9. Japan
10. Luxembourg
11. Finland
12. United States
13. Austria
14. Spain
15. Denmark
16. Belgium
17. Iceland

As we can see, none of the Flat Tax countries have made it on to the last (and for most folks, the most important) list.


I don't think the flat tax in those countries you listed has anything to do with their lower standard of living. Also, what factors into determining a "standard of living"...

Statistics can be tricky... ;)



I do stats all days so I know all about lies, damn lies and statistics. :lol:
I'm going to just say I would prefer to live in any country on the high tax list as compared to the countries on the flat tax list.
Can you even picture the U.S. on that first list with those other countries. That isn't a random sampling, those are the only countries actually using flat tax. I know the UK flirted with the idea but even they realized it's not going to be the great cure all that people make it out to be. If it was, there would be other countries of at least comfortable living status on that list.

I have been to 10 of the countries on the standard of living top 17 and can say that I feel that living conditions are greater if not equal to what I enjoy here in the states so I feel pretty confident about the criteria used to compile those numbers.
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Postby AlteredDNA » Sat Aug 07, 2010 8:07 am

Don wrote:
AlteredDNA wrote:I don't think the flat tax in those countries you listed has anything to do with their lower standard of living. Also, what factors into determining a "standard of living"...

Statistics can be tricky... ;)



I do stats all days so I know all about lies, damn lies and statistics. :lol:
I'm going to go out on a hunch and say I would prefer to live in any country on the high tax list as compared to the countries on the flat tax list.
Can you even picture the U.S. on that first list with those other countries. That isn't a random sampling, those are the only countries actually using flat tax. I know the UK flirted with the idea but even they realized it's not going to be the great cure all that people make it out to be. If it was, there would be other countries of at least comfortable living status on that list.

I have been to 10 of the countries on the standard of living top 17 and can say that I feel that living conditions are greater if not equal to what I enjoy here in the states so I feel pretty confident about the criteria used to compile those numbers.


I know you do, that's what I put that... :)

My point is that it's too simple to say that the flat tax is the cause of those countries lower standard of living.
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Postby Saint John » Sat Aug 07, 2010 8:09 am

Europe Circles The Flat Tax
The success of a single tax rate in the East is spurring Western Europe to take a closer look


The flat tax. In the eyes of many fiscal conservatives, it's the Holy Grail of public policy: One low income tax rate paid by all but the poorest wage-earners, who are exempt. No loopholes for the rich to exploit. No graduated rates that take a higher percentage of income from people who work hard to earn more. No need for a huge bureaucracy to police fiendishly complex tax laws. U.S. conservatives have been pushing the idea for decades. But it has gotten its first real road test in the former Soviet bloc, where at least eight countries, from minuscule Estonia to giant Russia, have enacted flat taxes since the mid-1990s.

Most of these countries' economies are growing at a far-healthier clip than those of their neighbors to the west. So it's no surprise that calls for a flat tax are now being heard in Western Europe, the most heavily taxed zone on the planet. Angela Merkel, the Christian Democratic Union's candidate for Chancellor in Germany's Sept. 18 elections, chose a leading flat-tax advocate as one of her main economic advisers. In Britain, the opposition Conservatives on Sept. 7 announced they would set up a commission to study a flat-tax proposal.

Günther Fehlinger, president of Europeans for Tax Reform, a Vienna-based flat-tax advocacy group, says interest has picked up noticeably since last year, when a flat tax took effect in Slovakia: That country's booming automotive industry is luring billions in highly desirable investment away from Western Europe. "That changed everything," Fehlinger says.

SIMPLICITY RISING
The issue is so politically explosive that no Western European government is likely to impose a flat-tax regime anytime soon. German Chancellor Gerhard Schröder's center-left Social Democratic Party has scored points in the current election campaign by branding Merkel's pro-flat tax adviser, Paul Kirchhof, a radical who would cut taxes for the rich. Kirchhof, a professor of tax law at the University of Heidelberg, has in the past advocated placing a 25% tax on all income, both corporate and personal, above $22,000 a year and eliminating virtually all loopholes and deductions.

But tax simplification is clearly in the air. The platform of Germany's CDU, which Kirchhof now says he supports, calls for cutting the top personal income tax rate from 42% to 39% and eliminating tax shelters. France's center-right government says that it plans to reduce the number of tax brackets from seven to five, lower the top marginal rate from 48.1% to 40%, and limit individual deductions, starting in 2007. By yearend, Spanish Finance Minister Pedro Solbes is expected to propose cutting the top personal income tax rate, now 45%, and reducing the number of tax brackets, now five. Greece, after cutting the country's corporate tax rate, now is looking at reducing and simplifying personal income taxes as well.

What's driving this interest all of a sudden? It's a competitiveness issue, says Paul Mylonas, chief economist at the National Bank of Greece. "Our neighboring countries are reducing taxes, which provides them with a more attractive business climate."

Slovakia is a case in point. The country has been intent on building an investor-friendly climate. So in 2004 it swept away 21 categories of personal income taxes, five tax brackets, and scores of exemptions and deductions, replacing them with a flat 19% rate. Slovak officials say that their flat-tax reform was crucial in securing a $1.3 billion investment last year by Korean auto maker Hyundai Corp., which is building a factory for its Kia brand cars in the city of Zilina. Total foreign direct investment in Slovakia last year was $13.6 billion, a sixfold increase since 1998. Slovakia's attractively low 19% corporate tax rate is a big draw, too. But, says Martin Bruncko, chief economic adviser to Slovak Finance Minister Ivan Miklos, "the flat [personal income] tax has made Slovakia more attractive for highly paid expatriate employees. That's important for companies looking at an offshore operation."

Even without pressure from the East, many Western European governments face growing complaints about the complexity of their tax regimes. France, for example, offers a bewildering 560 tax breaks -- ranging from a special exemption for journalists to a deduction for taxpayers who happen to employ household help -- that cost the government more than $60 billion a year. The French government says that starting in 2007 it will cap such breaks at $9,400 per taxpayer per year.

In the free-market regime of Britain, the tax code has become pretty gnarly as well. Under the ruling Labour Party's guidance, the government handbook of tax regulations has roughly doubled in volume since 1997. In early September, a parliamentary committee blasted the system of tax credits for the nation's poor households, calling it a complicated "nightmare." That prompted George Osborne, the Conservative shadow Chancellor of the Exchequer and a longtime flat-tax enthusiast, to appoint a commission to study the introduction of a single rate for all British taxpayers.

There's no guarantee, of course, that flat taxes would work as well in Western Europe as they have in the countries to the east. In the former Soviet bloc, most of the countries that enacted flat taxes gained revenue as people who had worked in the shadow economy began reporting their income and paying taxes. The former tax dodgers figured that with rates so low, it was no longer worth running the risk of breaking the law. Moscow, which introduced a flat tax in 2001, saw its income tax revenues more than double in real terms from 2000 to 2004.

Compared to citizens of the countries behind the old Iron Curtain, relatively few Western Europeans work in the shadow economy. But a flat or streamlined tax code could still go a long way toward restoring public trust in the tax system by wiping away loopholes and cutting out mounds of red tape. Lower top rates also could stanch the flow of "tax expatriates" -- for example, wealthy French people who move to Britain or Belgium to avoid high French income taxes. Flat-tax Europe? It won't happen overnight. But the conversation is getting under way.
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Postby Don » Sat Aug 07, 2010 8:11 am

AlteredDNA wrote:
Don wrote:
AlteredDNA wrote:I don't think the flat tax in those countries you listed has anything to do with their lower standard of living. Also, what factors into determining a "standard of living"...

Statistics can be tricky... ;)



I do stats all days so I know all about lies, damn lies and statistics. :lol:
I'm going to go out on a hunch and say I would prefer to live in any country on the high tax list as compared to the countries on the flat tax list.
Can you even picture the U.S. on that first list with those other countries. That isn't a random sampling, those are the only countries actually using flat tax. I know the UK flirted with the idea but even they realized it's not going to be the great cure all that people make it out to be. If it was, there would be other countries of at least comfortable living status on that list.

I have been to 10 of the countries on the standard of living top 17 and can say that I feel that living conditions are greater if not equal to what I enjoy here in the states so I feel pretty confident about the criteria used to compile those numbers.


I know you do, that's what I put that... :)

My point is that it's too simple to say that the flat tax is the cause of those countries lower standard of living.


Yeah, I know. I'm thinking a lot of those countries were under the sphere of Soviet influence back in the day also.
I'm just saying that for the U.S. to go that direction would be big departure from what the rest of the economic powers have ever done and there must be a good reason for avoiding that road.
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Postby AlteredDNA » Sat Aug 07, 2010 8:12 am

Don wrote:
AlteredDNA wrote:
Don wrote:
AlteredDNA wrote:I don't think the flat tax in those countries you listed has anything to do with their lower standard of living. Also, what factors into determining a "standard of living"...

Statistics can be tricky... ;)



I do stats all days so I know all about lies, damn lies and statistics. :lol:
I'm going to go out on a hunch and say I would prefer to live in any country on the high tax list as compared to the countries on the flat tax list.
Can you even picture the U.S. on that first list with those other countries. That isn't a random sampling, those are the only countries actually using flat tax. I know the UK flirted with the idea but even they realized it's not going to be the great cure all that people make it out to be. If it was, there would be other countries of at least comfortable living status on that list.

I have been to 10 of the countries on the standard of living top 17 and can say that I feel that living conditions are greater if not equal to what I enjoy here in the states so I feel pretty confident about the criteria used to compile those numbers.


I know you do, that's what I put that... :)

My point is that it's too simple to say that the flat tax is the cause of those countries lower standard of living.


Yeah, I know. I'm thinking a lot of those countries were under the sphere of Soviet influence back in the day also.
I'm just saying that for the U.S. to go that direction would be big departure from what the rest of the economic powers have ever done and there must be a good reason for avoiding that road.


Yeah - it would take too much power away from politicians... :)
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