Founding Fathers: The Answers to our economic Woes?

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_Gadianton
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Gadianton »

I'll chime in and say that while legalizing pot isn't obviously going to "solve a lot of problems" for our nation, legalize pot and maybe prostitution, and that will give the economy a pretty swift kick in the pants. Don't know if things would be all around better or worse ten years from now, but there is no question it would stimulate the economy.
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_Ezias
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Post by _Ezias »

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_Ezias
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Post by _Ezias »

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_Kevin Graham
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Kevin Graham »

No it isn't illegal, but don't try explaining that to Wesley Snipes.
_Nimrod
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Nimrod »

Ezias wrote:Come to think of it, isn't income tax illegal according to the constitution our founding fathers created? I know the federal reserve is for sure, since our money is not backed by gold or silver.


Yes, as the founding fathers crafted the constitution, an income tax was unconstitutional. That's why the 16th amendment was necessary to permit a federal income tax. Since 1913, the federal income tax has been both legal and constitutional.
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_Kevin Graham
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Kevin Graham »

I like the fairtax idea because it will tax anyone who buys anything in the country, even tourists. It would probably discourage consumer spending though, at least for the short run. But it is essentially just another way to ensure the poor pay much more than they are now, and the rich pay far less than they currently are.

It will NEVER happen.
_Black Moclips
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Black Moclips »

Kevin Graham wrote:I like the fairtax idea because it will tax anyone who buys anything in the country, even tourists. It would probably discourage consumer spending though, at least for the short run. But it is essentially just another way to ensure the poor pay much more than they are now, and the rich pay far less than they currently are.

It will NEVER happen.


Hey something we can agree on. I also really like the Fairtax idea. Imagine never having to file a tax return again, that would make it worth it right there. And it makes a large chunk of the tax voluntary. You don't want to pay more taxes? Then curb your consumption. But true, the reason they call it "Fair" is because everyone is treated equally, rich and poor, with the elimination of the progressive system. Though from what I've read, everyone gets a certain rebate back for necessity items based on the size of your family etc, but those amounts reduce as you make more. So there is a mechanism that does give the poor an advantage.

I think its a way better system than what we have now, and I think the studies show it would actually provide more tax revenues to the system, as now you capture tons of people out of the system who aren't contributing (tax dodgers, poor, illegals, etc). But I think that is a good thing, because I don't think you should have a say (in your vote) how Federal money is spent (i.e. - which candidate is promising me more of someone else's money) if you don't contribute.
“A government big enough to give you everything you want is a government big enough to take away everything that you have.”
_Black Moclips
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Black Moclips »

From the FairTax website

"The FairTax is regressive and shifts the tax burden onto lower and middle income people"

The truth: The FairTax actually eliminates and reimburses all federal taxes for those below the poverty line. This is accomplished through the universal prebate and by eliminating the highly regressive FICA payroll tax. Today, low and moderate income Americans pay far more in FICA taxes than income taxes. Those spending at twice the poverty level pay a FairTax of only 11.5 percent -- a rate much lower than the income and payroll tax burden they bear today. Meanwhile, the wealthy pay the 23 percent retail sales tax on their retail purchases.

Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower-income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. Retaining the present tax system makes economic progress needlessly slow and frustrates attempts at upward mobility through hard work and savings, thus harming low-income taxpayers the most.

In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower-income families and individuals. In addition to receiving the monthly FairTax prebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more business taxes hidden in the price of goods and services, and used goods are tax free.

How can the FairTax generate lower net tax rates for everyone and still pay for the same real government expenditures? The answer is two-fold. Firstly, the tax base is dramatically widened by including consumer spending from the underground economy (estimated at $1.5 trillion annually), and by including illegal immigrants, those who escape their fair share today through loopholes and gimmicks. In addition, 40 million foreign tourists a year will become American taxpayers as consumers here. Secondly, not everyone's average net tax burden falls. For households whose major economic resource is accumulated wealth, the FairTax will deliver a net tax hike compared to the current system.

Consider, for example, your typical billionaire, of which America now has more than 400. These fortunate few are invested primarily in equities on which they pay taxes at a 15 percent rate, whether their income comes in the form of capital gains or dividends. In addition to having the income from their wealth taxed at a low rate, the principal of their wealth is completely untaxed either directly or indirectly. Assuming they and their heirs spend only the income earned on the wealth each year, the tax rate today is 15 percent. In contrast, under the FairTax, the effective tax rate is 23 percent. Hence, the very wealthy will pay more taxes when the FairTax is enacted. In a nutshell, those who spend more will pay more but low, moderate and middle income taxpayers will benefit from the greatest gains in reduced tax liabilities.
“A government big enough to give you everything you want is a government big enough to take away everything that you have.”
_Kevin Graham
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Re: Founding Fathers: The Answers to our economic Woes?

Post by _Kevin Graham »

I think a lot of these numbers are based on the assumption that consumer spending will simply continue as is ocne a 24% sales tax is implemented. I suspect many tourists, like those who come to America from Brasil to buy products to avoid the high tax back home, will simply do the math and see it really won't be worth the trip. Seriously, buying MP3s, Playstations, Wiis, any kind of electronic equipment is an incentive for many Brasilians to travel to the USA. Legally they can come back with $500 worth of purchased items without paying an extra tarrif while giong through customs. I also think the tourist industry will be hit quite hard once word gets our that traveling to the USA will be quarter more expensive than what it used to be.

Also, the wealthy are masters at dodging taxes, so I can't help but imagine the super wealthy buying their goods, including Yachts and private jets, etc., from overseas, as a way to avoid paying that extra 24% here. I mean really, what's to stop them? The people it will really hit hard are the poor. Those who are used to getting a month's worth of supplies at the Wal Mart Supercenter for $400, are now going to spend $500. When both Mom and Dad are making minimum wage, that extra $100 is a huge chuck of money, and affects their overall livlihood moreso than a multi-millionare who will be paying less than what he is used to.

A couple of years ago Analytics posted something I saved to the hard drive, because it made a lot of sense to me. I hope he doesn't mind if I repost it here:

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I am amused by the T.V. ads that show average working-class people severely distraught about the proposal of those making over $250,000 having their marginal tax rate increased from 36% to 39%. In united solidarity of how this will cause unconscionable wealth redistribution, they look the camera in the eye and solemnly declare, "I am Joe the Plumber."

One of the key insights of Karl Marx was that it isn’t just hard work and ingenuity that creates wealth—it is also a function of the natural resources, capital, and society. When workers and capitalists get together to create useful goods and services, the spoils aren’t necessarily divided fairly or wisely, but rather are divided according to what the various parties can negotiate for themselves. Too often, what the workers earned and deserve is less than what they can negotiate.

The most Marxist views of Obama that I could find are his views on taxation, which he happens to share with the ultra-successful capitalist, Warren Buffet. To shake this up a little bit, imagine a political ad that goes as follows:

Warren Buffet sitting in a sensible Omaha office: “I did a calculation the other day. Though I’ve never used tax shelters or had a tax planner, after including the payroll taxes we each pay, I’ll pay a lower effective tax rate this year than my receptionist. In fact, I’m pretty sure I pay a lower rate than the average American. And if McCain has his way, I’ll be paying even less.”

A sober, distraught announcer explains: “Buffet’s low rates are a consequence of the fact that, like most wealthy Americans, almost all his income comes from dividends and capital gains, investment income that since 2003 has been taxed at only 15%. The receptionist’s salary, on the other hand, was taxed at almost twice that rate once FICA was included.”

Buffet then says: “The free market’s the best mechanism ever devised to put resources to their most efficient and productive use; the government isn’t particularly good at that. But the market isn’t so good at making sure that the wealth that’s produced is being distributed fairly or wisely. Some of that wealth has to be plowed back into education, so that the next generation has a fair chance, and to maintain our infrastructure, and provide some sort of safety net for those who lose out in a market economy. And it just makes sense that those of us who’ve benefited most from the market should pay a bigger share.”

The distraught announcer weighs in: “But John McCain thinks the people who have benefited most from the market should pay an even smaller share than they already do and wants to make the capital gains tax even lower. But even worse, McCain wants to repeal the estate tax.”

Buffet: “When you get rid of the estate tax, you’re basically handing over command of the country’s resources to people who didn’t earn it. It’s like choosing the 2020 Olympic team by picking the children of all the winners of the 2000 Games.”

Sober announcer: “But John McCain wants to create a permanent aristocracy where command of the country’s resources is allocated to people who didn’t earn it.”

Buffet: “Not very many billionaires share my views. They have this idea that it’s ‘their money’ and that they deserve to keep every penny of it. What they don’t factor in is all the public investment that lets us live the way we do. Take me as an example. I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless. I can’t run very fast. I’m not particularly strong. I’d probably end up as some wild animal’s dinner.

“But I was lucky enough to be born in a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the financial system to let me do what I love doing—and make a lot of money doing it. The least I can do is help pay for all that.”

Distraught announcer: “But John McCain thinks that the CEOs and traders that made hundreds of millions of dollars looting Wall Street, Main Street, home owners, and American families deserve every penny they made, and should pay a lower tax rate than average Americans.”

Barack Obama: “I’m Barack Obama and I approve this message because Analytics adapted the content [sans the distraught announcer] from page 190-191 of my book The Audacity of Hope.” And I am Warren the Billionaire.

Analytics, staring somberly at the camera: I am Warren the Billionaire.
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I guess the point is that it is easy to call something "fair" based on the principle that every pays the same. But when a tiny percentage are reaping 80+% of the benefits, and teh system is rigged to insure they and their posterity continue to own most of the nation's wealth, then it kinda brings into question this concept of fairness.
_Ezias
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