Tax help for liberals

It's suspected that some random and still unknown student of T. Davis, Professor of Accounting and & Chair Division of Accounting and Business Law said, and I quote:
"Suppose that every day, ten people go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth person (the richest) would pay $59.
So, that's what they decided to do. The ten people drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes, so the first four people were unaffected. They would still drink for free. But what about the other six people – the paying customers? How could they divide the $20 windfall so that everyone would get their 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth person and the sixth person would each end up being paid to drink their beer. So, the bar owner suggested that it would be fair to reduce each person's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth guy, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, they began to compare their savings.
'I only got a dollar out of the $20,'declared the sixth man. He pointed to the tenth man,' but he got $10!' 'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!'
'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'
'Wait a minute,' yelled the first four in unison. 'We didn't get anything at all. The system exploits the poor!'
The nine surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill.

But the rich man had a hired man to find him loopholes so that he got his drinks half price again. Then he declared the others dependants and got another cut in price. Then he talked his political pals into giving him huge subsidies so that in the long run he was a bum like the first few guys and the ones in the middle paid out the biggest percentage of their money to cover it all and got shit on by both rich and poor as a thank you.

Now my fears are rested. With the republican tax cuts poor destitute Lebron James will get a $600,000 plus tax cut. And I was so worried the poor dear wouldn't be able to afford his next mansion payment.

Let's see.... You make $30K a year and get a few hundred in cuts, or you make 100 million a year and get a few hundred thousand in cuts. Oh I see it now. Those poor millionaires. "sniff sniff" Please oh please tax me more so they won't have to suffer.

Don't mistake my disdain for a multimillionaire getting tax breaks with preferring the democrats. I prefer a flat tax paid by everyone with absolutely zero deductions allowed.

That's another option I like EP. And you can't get more fair than paying an even tax as you buy. But as it says, it would eliminate all the IRS employees, not to mention all the tax consultants and their employees. I suspect alot of under the table deals would be made in attempts to prevent that.

Ratzilla wrote:

That's another option I like EP. And you can't get more fair than paying an even tax as you buy. But as it says, it would eliminate all the IRS employees, not to mention all the tax consultants and their employees. I suspect alot of under the table deals would be made in attempts to prevent that.

Most of those people are accountants. There would be a large job market for accountants to help people wisely invest the extra money they would have.

I have long been a supporter of the Fair Tax issue. And the abolishment of the Fed Reserve

I have my doubts about this whole Fair Tax business. Like most (or all?) Republican proposals, it benefits only the wealthiest and most powerful Americans (i.e. nobody on this forum).

But lots of ya'll are convinced that you share some common interest with billionaires. I think that blacks who fought for the Confederacy would identify with your slavish devotion to the people who are screwing you daily.

How would a tax based upon what you buy be geared towards helping the wealthy Bighead? I realize that if all the current "business deductions" were allowed it'd let them get by with alot of crap, but is that how it is intended since of course there wouldn't be anything fair about it? Quite honestly I havn't studied up on it in detail since I never figured a truly fair tax would ever be permitted.

Well it seems obvious to me... but it won't be to most on this site, as you won't hear this line of reasoning no Fox News or your local talk radio station.

Pretty much everybody on this forum will fall within the realm of the working poor, working class, or lower middle class. And people within this income range (say, less than 100k per year household income) SPEND most of their money just getting by. Maybe they save 10% if they're good with money... maybe 20% if they're spectacular. But they will still SPEND the majority of what they earn.

Whereas wealthy people who make a million+ per year don't SPEND nearly the same percentage of their income just to get by. They invest. And under this 'fair tax' plan, income from said investments will not be taxed at all. Hence Bill Gates will pay FAR less tax as a percentage of income than you or I will. Matter of fact that's already the case (google Warren Buffet's rant about income taxes)- capital gains are ALREADY taxed at a lower rate than most of us pay in income taxes. See, by some folks reasoning, income that is EARNED via a man's own labor should be taxed at a higher rate than income generated by investments, requiring no actual WORK on the part of the 'earner'.

The 'fair tax' would only shift MORE of the tax burden away from the upper class, and onto the working/middle class. Yes, there have been assorted deductions/rebates proposed for 'living expenses' to make the whole thing a little more palatable- but that doesn't change the basic math, and it doesn't change the fact that the wealthiest Americans would ultimately benefit from this plan at the expense of pretty much everybody on this forum. Feel free to do the math if you don't believe me... but the fact that the 'fair tax' is promoted by the likes of Fox News should tell you all that you need to know about it.

That's gotta be the strangest avatar I've ever seen

I would describe a fair tax as a sales tax with an equal percentage of tax regardless of whether it's spent on a $1 McDonald's burger, or the finest resturant in NYC. The same percentage on the dollar for a well used and rusted out pickup, or a top model Lamborghini.

A fair tax would not allow business deductions, nor would it treat buying a mansion in upscale California any differently than buying a trailer house with beer box skirting in Alabama any differently.

Oh, and while I'm on the subject of fairness. I don't think Walmart should get a candy bar or truckload of gasoline one penny cheaper than for example NB's parents store just because they buy a million at once. As I see it, if a supplier can sell an item to Walmart for 50 cents and still profit they can sell it to everyone for 50 cents.

And I don't want to hear any free market competition BS. When big companies can sell things cheaper than small companies can buy them for it is no longer free market. It is a biased market based on who has the most dollars. Our government has decided that it is wrong and made it illegal to overcharge for plywood during a hurricane, yet they allow this to continue. Our nation has become the same money makes right world our founders came here to escape.

And I agree, that is a weird AV. Seen it before, but it's still weird.

Well Ratzilla, if you believe in a regressive tax structure, I reckon that's your business. Personally I think that those who have benefited the most from our system should pay the most for it... and our current tax structure isn't NEARLY progressive enough.

But that's 'cause I'm an anti-american pinko-commie. YMMV.

So then Bighead, why doesn't everyone making less than 100K a year just go on welfare and let the wealthy pay for all of us?

If you base taxes on spending say at 20% for everyone just for example, then the guy who buys a $1000 junker pays $200 and the guy who buys the $200,000 Lamborghini pays $40,000 in taxes. Buy a $10,000 shack and it's $2000 taxes, buy a million dollar home and pay $200,000. Just property alone being taxed like that would eliminate the need for alot of our current taxes and the ones who could afford the most would be paying the most. But nobody would get a free ride.

Right. But you'll end up paying say 19% of your annual income in taxes. Bill Gates on the other hand will pay about 1% of his annual income in taxes. Not sure why you'd prefer that. I wouldn't.

Quote :

So then Bighead, why doesn't everyone making less than 100K a year just go on welfare and let the wealthy pay for all of us

Sure, why not?

Remember Bighead, that's a sales tax on everything you buy, not just personal items. Every single business related item Gates or his companies had to buy would be subject to the same tax. Maybe not Gates, but some big companies spend a large amount of their income on restocking, maintaining, and development. And yes, I know they often hike the prices to cover that.

I'm not interested enough to look it up and quote it, but I seriously doubt that the so-called fair-tax includes sales taxes at the wholesale level. Like ALL sales taxes, this will be a tax at the RETAIL level. Meaning that businesses- including those owned by Bill Gates- will pay exactly ZERO sales tax on business expenses. And Warren Buffet will pay exactly ZERO sales tax on his stock purchases, sales, capital gains, etc.

RETAIL. That's the key here.

You spend much MUCH more of you income, percentagewise, at a retail level than any billionaire. Therefore you would be taxed at a far higher RATE than any billionaire. I don't understand why you think this is an attractive option... and I can only assume that you have no idea what you're talking about.

What disturbs me about all this, Ratzilla- is that you're one of the brightest people on this forum. If YOU don't understand something as simple as how sales tax works... then there's no hope for the rest of these fools.

I'm talking about what a "true" fair tax would be. I didn't say I expected one. As I said before, the lack of expectation of a truly fair tax is why I havn't looked into any mainstream political ideas on one.

Well Jesus fuking Christ. If you're just fantasizing about what we'd consider "fair", then I guess that "fair tax" could be anything you want it to be. Let's legalize weed and tax it. That'd be 'fair'.
But the fact is that a so-called "Fair Tax" has been proposed, and that's exactly what we're talking about in this thread. It's a RETAIL sales tax. And if such a thing were to ever become law, you and I would be taxed at a far higher rate than Obama, Gates, Ginghrich... you name the mil/bilionaire.

And I've no doubt that many of your fellow Haycites would support it.

A "fair" tax is just a fantasy. So I was right on topic. Now if you want to talk about taxes that might eventually be enacted I'm sure the current breed of politicians will look out for their rich pals no matter what kind of tax you call it.

Would I be upset to see higher taxes on the rich? No in some ways, but I'd prefer a completely fair tax and that would be similar as I described because if we stick it to the rich too hard we'll be the ones to pay in the form of skyrocketting inflation to fund their gluttonous habits.

Ratzilla wrote:

A "fair" tax is just a fantasy. So I was right on topic. Now if you want to talk about taxes that might eventually be enacted I'm sure the current breed of politicians will look out for their rich pals no matter what kind of tax you call it.

Would I be upset to see higher taxes on the rich? No in some ways, but I'd prefer a completely fair tax and that would be similar as I described because if we stick it to the rich too hard we'll be the ones to pay in the form of skyrocketting inflation to fund their gluttonous habits.

I hear that line repeated over and over by Republicans. Every single day. Think maybe that argument is a little self-serving on their part?

I think I'd be willing to take my chances. Soak the rich!

In this recession, the rich are getting richer and the poor are getting poorer. Really, that's been the trend ever since the days of Reagan... and it's massively accelerated in the past couple years. How many generations does it take to prove the trickle-down economics is a farce?

IMO, economics don't 'trickle down' at all. They trickle UP. And the wealthy and powerful are killing the golden goose that made them their fortunes (that being the middle class).

Bighead wrote:

I'm not interested enough to look it up and quote it, but I seriously doubt that the so-called fair-tax includes sales taxes at the wholesale level. Like ALL sales taxes, this will be a tax at the RETAIL level. Meaning that businesses- including those owned by Bill Gates- will pay exactly ZERO sales tax on business expenses. And Warren Buffet will pay exactly ZERO sales tax on his stock purchases, sales, capital gains, etc.

RETAIL. That's the key here.

You spend much MUCH more of you income, percentagewise, at a retail level than any billionaire. Therefore you would be taxed at a far higher RATE than any billionaire. I don't understand why you think this is an attractive option... and I can only assume that you have no idea what you're talking about.

What disturbs me about all this, Ratzilla- is that you're one of the brightest people on this forum. If YOU don't understand something as simple as how sales tax works... then there's no hope for the rest of these fools.

Bignose is right on this. The taxing at every level would be a Value Added Tax (VAT). What he didn't mention was that a VAT was kicked around as a possibility by the last Congress. That trial balloon didn't float.

However, if you take the time to read the FairTax book, you'll discover that there is actually a deduction based on the size of your family, which would actually be PRE-bated to you. Without getting into specific numbers, because they change all the time based on how big the percentage of taxation would need to be in order to balance the budget (yeah, it all comes back to entitlements), each family would get a check for a predetermined amount each year, based on the amount that a family of the same size would typically be taxed if their income was at the poverty level. This means that those at the poverty level and below would have a zero tax liability at the end of the year. For purposes of discussion, let's say that the poverty level is $30,000 for a family of four. If your family makes $100,000 and spends every penny, as Bignose would, you would be paying tax on $70,000. If the rate was 20%, that liability would be $14,000, or 14%. The system would also encourage saving, so if that same family saved 5% of their income, they would still have the same prebate, making their tax $13,000, or 13%. How could this be more clear and simple?

EP, unless loopholes for those with the cash to buy them are abolished there can't be a fair tax. And it's not a fair tax if I as a single man without dependants make 30k or less and have to pay in, while a lazy crook gets deductions for their 4 juvenile delinquents. Only a straight across the board tax based on income or buying with no deductions for anyone could remotely be fair.

Bighead wrote:

IMO, economics don't 'trickle down' at all. They trickle UP. And the wealthy and powerful are killing the golden goose that made them their fortunes (that being the middle class).

On this we agree completely. Reagan's economics were a kick in the head that never healed. I said long ago that trickle down meant Reagan pissed on us. The republican view has been for some time that if you keep the rich man fat he will be just generous enough to keep throwing peanuts to the monkeys so they might continue to entertain. And in return he will let his political puppets enjoy the money with him.

nitromaxx98 wrote:

http://fairtaxcalculator.org/

The first thing I see is "What are your deductions?" You can't have a fair tax if you allow loopholes to avoid paying or some loser family with ten kids, or a millionaire with a sharp tax consultant will never pay a dime.

They say most of us pay about half our income out on various taxes. If I figure in all the things government already bleeds me dry on such as cigarettes, beer, gasoline, and all their other added taxes I figure they owe me a few thousand this year. That I'll rot in my grave waiting for......

Before we even discuss a "fair" tax we need to abolish all other taxes and completely abolish deductions. If you have ten kids or a brand new Dodge Ram and work saying "Ya want fries with that?" that's tough shit. If you can't pay for things, it's no one elses fault that you have them.