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| Posted: 12 Sep 2011 05:01 |
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That was fairly short but kind of dense and complex at the same time. It's probably my fault but I'm having a rough time figuring out the exact points you're trying to get across to me.
I do get what you're saying about prices being relatively fixed, so if each of these example groups utilized the exact same markets, services, products & relative options, not to mention the exact same spending habits, the poorer a person is would make it more and more unbalanced against them. The thing is, the poorer the family is, the less they were looking at steak and more at that hamburger in the first place. The middle class is more capable right from the start of having the occasional steak at least maybe once or twice a week, while the wealthy can not only have steak as much as they want, but higher quality cuts of it as well, which would be more expensive than the skirt or shell steaks the middle or even lower income family would. Let's also expand on the rest of the meal. The lower income family is more like to bulk up their hamburger with things ranging from bread crumbs to corn flakes to rice, or maybe use Manwich or Hamburger Helper to stretch out that hamburger to feed their family better. On a good day, you maybe get some bread and a vegetable with it. The middle income family can still do those things but they also are more likely to use items like Manwich and Hamburger Helper, with the sides of a starch and a vegetable more like than the lower income. The wealthy not only are more likely to have better and more expensive cuts, but better and more expensive accompaniments to it, up to and including a wine selection. Also while we consider this one meal, we also have to factor in how these groups are spending on the service end. The lower income is more likely to hit a drive thru, while the midddle income is more likely to do diners or an Outback steakhouse or Sizzler, while the wealthy are more likely to go to nicer restaurants or employ help to do their shopping, prepare and serve their meals.
The cost of that meal is more than just the meat, and the nicer that meal gets is the more a person is going to get taxed for it. The lower income family is likely to pay a lot less in tax for that one meal than the wealthy family is. Now expand that to encompass all the meals that these families have over the course of a day, week or year and the less likely that these different groups will spend on taxes in equal percentages, and all this is before we even get to the prebate and the effect that has on each of these groups separately, which is the lower income group getting mush more of a boost from it than the wealthier groups.
On to the underground economy. As for the unaccounted and lower level criminals, whether or not they produce tax income would depend on their spending. You have to account for spending habits, and because of this you can't immediately dismiss the possibility of any tax income from anyone just because of what group they might belong to.
As for the laundering schemes, not being able to tax something we aren't able to tax already doesn't seem to be a good reason not to switch gears. There's no gain, fine and well, but there's no loss in this one particular aspect either. The same thing applies to money spent on illegal activities. We're not taxing it now and we won't tax it then. By these standards alone there's no reason to bother because there's nothing to gain by them alone. When we start going after their spending however, there is something to be gained there that we are not currently gaining.
Again, I'm not 100% sure of what points you specifically wanted addressed, so I hope I responded to the right things.
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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| Posted: 12 Sep 2011 07:21 |
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As to the underground economy, the point is for lower level criminals, they are more likely to be living at or below the poverty line (and often have excess funds going back into the underground economy via untaxed criminal purchases)as such, if the prebate does what it should there would be no revenue generated by these people because their consumption would not likely exceed the the poverty line level that the prebate is designed to prevent taxation on.
As to the money laundering schemes, the point wasn't that we shouldn't tax it, the point was that we are already taxing it as much as we are likely to (with some lee way one way or the other).
The point is, this sales tax plan would not likely generate a great deal of additional revenue from the underground economy.
As to relative spending, the point is, even when you start talking about McDonalds vs. Outback or even the French Laundry, the cost as a function of your income is going to peak out at a relativly low level.
So even if you are eating out everyday that spending as a function of your total earnings is going to be lower than the person who simply can't afford that kind of spending.
Think about it like this, everytime you buy a luxury, there is a cost benefit consideration you make based on how much money you have any how much you want what you are about to spend it on. Because we see money as having instrinsic value, and the larger the cost the more concerend wea re with it's value, the higher end the luxury the more concern you put towards it as a fucntion of your total income.
Think about how much money you make right now, and think about how much you allow yourself to spend without concern. Whether it is a $2.00 coffee and butter roll each morning, or $5.00 starbucks, there is probably certain regular indulgences you have that are a function of your overall income. Now, think about doubleing that ammount, and consider how much you would have to make on a regular basis to double that unthinking purchase from 2 - 4 or 5 - 10 a day. Then how much to double it agian, 4 - 8 10 - 20 dollars a day on one purchase. What you are likely to find is that although your expenditures are increasing as a function of income, they are actually decreasing.
That is how it goes for everyone because no matter who you are, money has value, and the higher the cost of the individual purchase the more we weigh it's cost vs. the value of the purchase to us.
So by the time you are willing to spend $100 a day on dinner out, the portion of your income you are acutally spending on food is likely to be far lower than the person who is spending $10 a day on dinner in because that's their only option.
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| Posted: 12 Sep 2011 14:40 |
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Not to ignore the fact that they're criminals, but putting it aside a second, we have people here that are living at or below the poverty line who won't be taxed more by the new system; isn't that what you wanted in the first place?
What about the mid-level to top tier guys who spend more on rims for their car than most of us do on a month's rent, or watches that cost more than a car? Wouldn't we be getting new tax money from them which we aren't now?
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The cost benefit consideration varies from person to person based on their spending habits, their beliefs about credit, their expectation of future income and their emotional attachment to things alongside other considerations. No two people seem to have the exact same attitudes or smarts about money or the same spending habits as the next person. Many people simply don't even think ahead past their present wants; look no further than the housing bubble for evidence of this.
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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| Posted: 12 Sep 2011 15:12 Last Edited By: Matches |
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Well, first off, I don't think people at the bottom would be taxed less under this system, I think we've shown that with the earned income credit people at the very bottom of the income ladder pay no taxes currently (much to the consternation of many a conservative) and would arguably do the same here. Secondly, I think you've bought into the media sterotype of criminal, by the time you get to a point where your income is significant you are also going to be laundering your money, and if you're not then you won't be a mid level criminal very long.
Beyond that, you are assuming that a guy who is a criminal is going to buy his flashy rims at sears and roebuck. Much more likely is that various items will fall off of a truck and find their way to these gentlemen's perview (especially if the mark up on such an item is below 23%).
If the prebate had a no criminals rule then you might get a considerable ammount of money, but I'd hate to think what kind of civil rights cases would be derived from such a rule.
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| Posted: 12 Sep 2011 19:06 |
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People at the bottom treated the same. Check. 
2nd. I never said criminals wouldn't be laundering their money.
3rd. Between surveillance, GPS, digital tracking and other loss prevention measures, it gets harder and harder for items to just fall off trucks and if a big time hustler has gone to the trouble of setting up a laundering system and storefront facade the less likely he's going to display stolen merchandise and compromise himself.
4th. The prebate has a no convicts rule. Convicts can't collect or be counted as dependents. A no criminals rule wouldn't make much sense. You'd stop a person from getting their monthly check because you could prove they were a criminal and yet they can't be locked up with the same proof. A good example of bureaucracy in action but not a likely example in the real world.
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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| Posted: 12 Sep 2011 23:08 |
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The No Convicts rule huh? So, I am guessing (since this conversation has no point of going forward if this isn't the case) that convicts refer only to those people in current federal or state custody, and only for the time that they are in custody. So that during probation they recieve the funds, and after their time has been served they likewise recieve the payment. Civil rights implications if it doesn't makes this entire prospect a non starter.
I never said that this plan doesn't work for people at the poverty line, (well actually I absolutely think it won't but that's more on the gut reaction to the plan, and knowledge of how these things will wind up working rather than how they are proposed to work) the issue is a) people above the poverty line, and b) the regivness of the tax.
As to some sort of perfect computerized system to prevent the illegal sale and purchase of items on the black and grey markets, I've limited faith in that, but it's not worth arguing, if you really believe that technology will eventually elimate such markets, then I won't argue the idea, though that to me seems like a bit of wishful thinking.
And finnally, actually as far as money laundering goes, under this scheme a great deal of money laundering probably would cease, as would a very useful tool for law enforcement. The purpose of money laundering is to provide a legitimate look to financnes, which for illigitmate finances it's actually not the easiest thing to do. As such finding where the books don't add up is a great tool for law enforcement. If the government has no business looking at your books since all tax is paid on the back end, then there is no reason to hid you finances in the first place. The net tax structure is probably the same (the laundered money is specifically raised at a point to provide cover for expenses), but it would make cops jobs harder for good or for ill depending on your view of cops.
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| Posted: 13 Sep 2011 12:14 |
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Quote:
So that during probation they recieve the funds, and after their time has been served they likewise recieve the payment.
That would appear to be how it's supposed to work.
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the issue is a) people above the poverty line, and b) the regivness of the tax.
That was you that got us talking about low level criminals, at or below the poverty line.
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As to some sort of perfect computerized system
I said the technology was improving, not perfect.
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but it would make cops jobs harder for good or for ill
Not necessarily a concern for the topic at hand?
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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| Posted: 13 Sep 2011 15:48 |
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I brough up the issue of low level criminals because of your implication that this plan would raise revenue by taxing the underground economy. My point was to show why there was not nearly as much money as sales tax proponents like to think is in the that economy to tax as they think.
Anyway, I've shown how this tax is regressive, and why don't trust the numbers provided by it's proponants.
If your committed to the idea, I really don't think there is anything else I can tell you about it that you don't really already know and have chosen to accept the counter arguments for.
I'll give you one more iteam as to why this tax will hit the poor and middle class harder than the current structure, and you can tell me what the answer is from it's proponants.
If this is a tax on all purchases by persons or companies, than the increase in cost of raw materials will be factored into the cost of the finished goods. Ontop of that will be added the additional 23% tax on the price of the finished good.
While the increase cost would be factored into the poverty line, and there by the prebate, that cost increase would still carry on beyond the poverty line.
As such, while you can create a mathmatical formula to determine whether an increase in your expenditures by 23% while eliminating your income taxes would actually provide a net +/- in your cash on hand, it is much harder to show that when the increase is actually larger than 23% and depending on the overhead on the product could be much larger.
Once you exhaust the prebate, this tax is going to hit people much much harder than you think. It's not something I can specifically show because I have neither the time nor the knowledge base to do so, but I've seen enough models of this nature to know how the curve looks. I don't expect you to accept my word for it any more than I would accept the word of the website, but I am curious if you have a response to the cumulive nature of the tax?
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| Posted: 13 Sep 2011 21:56 |
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Quote:
My point was to show why there was not nearly as much money as sales tax proponents like to think is in the that economy to tax as they think.
Why focus only on the low level ones then? Money starts showing up when you factor in the mid-level and top tier correct?
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If this is a tax on all purchases by persons or companies, than the increase in cost of raw materials will be factored into the cost of the finished goods.
Raw materials sold from one business to another would not be taxed actually. That in conjunction with the removal of other taxes would eliminate the already existing hidden cost on items and would drive down prices.
As for the cumulative nature of the tax, I see people with a few more dollars in their pockets on payday after expenses and prices dropping and what must follow is an increase in consumption which leads to job creation. I see eliminating all the taxes to do business being a great incentive to bring back many outsourced jobs, in at least factory work and warehousing if not customer service or tech support jobs, which will further eliminate costs for business due to transportation or tariffs which will regenerate jobs lost previously to outsourcing and as the unemployment base shrinks, competitive wages will be the norm again which will all fuel more innovation and more consumption and the gap between rich and poor will shrink back to the normal expanse we once basked in. We might even bring back the 'Made in America' label; imagine that.
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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| Posted: 13 Sep 2011 23:06 |
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The issue was (and now I'm actually just thinking your being intentionally obstenate)with regard to the underground economy that the money wasn't there, that it was as so much with this plan smoke and mirrors to fool people into thinking this plan would actually produce more revenue than it possibly could.
Along these same lines, if you aren't taxing the sale of materials between businesses you are cutting another huge chunck out of the economy from which to raise funds, as well as lowering the tax burden on corporations even further.
Basically, this plan will not under any circustances with between the prebate and the kickbacks raise anywhere near the money they claim.
I got to their numbers by taking 23% of GDP and subtracitng the prebate for the population, either they are counting on a huge number of people skipping the prebate (not likely) or expecting far more than realisticly is available from the underground economy (again not likely), and probably guessing a massive increase in economic output (again unlikely) to offset the loss the revenue.
It's not a good plan, it's math is bad at it's base, and it taxes the rich far less than the middle class there by likely increasing the gap between rich and poor further, and it starves the government of funds. In othewords it's a typical radical right wing plan meant to make the tax system "fairer" by sticking it to the shirkers.
Really, I don't think there is anythign left to say about this plan. It's a plan to shift the tax burden away from corporations and the investor class and put it squarely on the backs of the workers in the economy. If you can't see the problems with it, then either I am completely wrong (which is possible but then I guess that's my cross to bear) or your ignoring the points I've raised regarding funding and burden.
I may not know everything there is to know about this plan, but nothing you've offered off sets it's regressive nature, nor it's limited funds.
I've enjoyed the debate but I really have nothing left to say on this except what I already have.
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| Posted: 14 Sep 2011 00:46 |
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I'm basically in the same boat. The best I can offer is saying not to take my word for anything or even listen to the website, but judge by the bill itself if you wish to give it any further consideration.
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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| Posted: 14 Sep 2011 05:40 Last Edited By: Matches |
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No problem, and no hard feelings I hope. I really did enjoy the debate.
And I'll tell you what, once the bill gets marked up by the CBO, I'll happily eat some crow if it does produce funds the way it is supposed to.
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| Posted: 14 Sep 2011 12:58 |
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I wouldn't call it eating crow if one of us or both of us is wrong on this thing. I'd like a bit of the 'wizard math' clarified as well and I'd certainly like to see exactly how they arrived at that 23% instead of just being given an assurance.
In any case, I hope more people start talking about it and we actually get around to producing some results past the talking.
__________________But the backdrops peel and the sets give way and the cast get eaten by the play, there's a murderer at the matinee, there are dead men in the aisles
And the patrons and the actors too are uncertain if the show is through and with sidelong looks await their cue, but the frozen mask just smiles
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