The Magnitude Of The Problem

[Teahive]

Anyhow it's simple. A 30% flat sales tax on a person living on borderline poverty will push them into poverty by raising the costs of goods to a level above what their capable of paying. This is because the poor person is spending 100% or near 100% of their income just to survive, they don't have much of any disposable income. As their spending 100% of their income your now taking all 100% at a 30% rate.

You're still ignoring the prebate.

Let's assume a person's income/spending is at the poverty line (defined elsewhere), and they're paying no income tax at that level. Let's further assume the government introduces the FairTax, and the immediate effect is that prices on all new consumer goods rise 30%. Is the person worse off? No, because the prebate adds 30% to this person's income.

(In reality the price of domestic goods would rise substantially less than 30%, used goods would not be taxed, and I'm not entirely sure what would happen with rent and mortgage payments.)


Before I address taxation at other income/spending levels, I'd like to know your view on capital gains taxation. Tax is imposed on profits when an asset is sold, considering the actual price it was bought and sold. You don't take the price of the asset in between those points into account. The price a week before the sale could have been ten times higher or ten times lower, that doesn't affect the tax owed. Do you think this is a fair principle?

[choff]

There's a funny at Max Keiser where he compares current policy makers to a cargo cult of primitive islanders after WW2 trying to bring the airplanes back. They discourage savings and investment and real economy growth.


http://maxkeiser.com/

[ladajo]

Why do these things need to be percentage based?

[JLawson]

There's a funny at Max Keiser where he compares current policy makers to a cargo cult of primitive islanders after WW2 trying to bring the airplanes back. They discourage savings and investment and real economy growth.


http://maxkeiser.com/

Bank of America regular savings interest: 0.01%

No, that's not a mistype. Their platinum Money Market is 0.20%
https://www.bankofamerica.com/products/ ... tes.go#sav

A deposit of $10,000 would earn you a whopping buck in interest in regular savings, $20 in a Platinum Money Market account.

ING Direct (Capitol 360, now) savings interest: .75%

Woo-hoo, that's $75 per $10k.

Rate of inflation: 2.07% for last year.

Literally doesn't make much sense to save money in a bank any more. There's the stock market, or there's Vegas. You pick...

[Jccarlton]

I find it amazing that this discussion has devolved into how to get more blood from a stone. The fact is that we are taxed out. Any additional taxes will only in a very short time cause economic dislocations, a shrinking economy and lost, not gained overall revenue. There needs to be massive spending cuts. The country cannot keep spending 160% of tax revenue and expect it to end well. somebody is going to have to tell the elderly and the "disabled" that the gravy train has departed and they are the ones left holding the bag. It's either that or watch all the fun as the whole country goes down the tube in about seven or eight years or so at best.

[Diogenes]

I find it amazing that this discussion has devolved into how to get more blood from a stone. The fact is that we are taxed out. Any additional taxes will only in a very short time cause economic dislocations, a shrinking economy and lost, not gained overall revenue. There needs to be massive spending cuts. The country cannot keep spending 160% of tax revenue and expect it to end well. somebody is going to have to tell the elderly and the "disabled" that the gravy train has departed and they are the ones left holding the bag. It's either that or watch all the fun as the whole country goes down the tube in about seven or eight years or so at best.

Just saw this quote today:


The most fundamental fact about the ideas of the political left is that they do not work. Therefore we should not be surprised to find the left concentrated in institutions where ideas do not have to work in order to survive. — Thomas Sowell



Sums it up IMO.

[Teahive]

Literally doesn't make much sense to save money in a bank any more. There's the stock market, or there's Vegas. You pick...

Why would anyone expect a positive return from a deposit that is meant to be practically risk-free? You can only gain if you take a risk. The only reason banks can pay interest on deposits is fractional reserve banking, but that creates risk (hidden from the saver).

If you store material goods, the price of those goods may go up or down, but there's always a storage cost. Money shouldn't be fundamentally different. Either you take a risk, or you get no interest.

[MSimon]

Literally doesn't make much sense to save money in a bank any more. There's the stock market, or there's Vegas. You pick...

Why would anyone expect a positive return from a deposit that is meant to be practically risk-free? You can only gain if you take a risk. The only reason banks can pay interest on deposits is fractional reserve banking, but that creates risk (hidden from the saver).

If you store material goods, the price of those goods may go up or down, but there's always a storage cost. Money shouldn't be fundamentally different. Either you take a risk, or you get no interest.

Why? Well to encourage people to invest in banks. Unless banks no longer need investment capital.

[choff]

I saw a report from an Adair Turner, CASS business school, talking about OMF, or Overt Monetary Financing. More people in the banking profession are talking about having the government directly print money and distribute it(drop if from a helicopter or put it in bottles for people to dig up), (or more realisticly to directly fund government), as an attempt to get the economy going again. He talks about the risk of inflation and how to control it, says other bizarre things like how central banks play an important role in telling democratically elected governments what they're not allowed to do. I swear banker types have their brains washed out with ditch water. But I find it interesting that they are slowly feeling their way toward the Bradbury Pound and Greenback solution.

[Teahive]

Why would anyone expect a positive return from a deposit that is meant to be practically risk-free? You can only gain if you take a risk. The only reason banks can pay interest on deposits is fractional reserve banking, but that creates risk (hidden from the saver).

If you store material goods, the price of those goods may go up or down, but there's always a storage cost. Money shouldn't be fundamentally different. Either you take a risk, or you get no interest.

Why? Well to encourage people to invest in banks. Unless banks no longer need investment capital.

If you're talking about investment there should be no pretense that it's risk-free.

And I suppose it's fair to say that banks aren't looking for people to put more money in savings accounts at the moment. Why would they?

[hanelyp]

More people in the banking profession are talking about having the government directly print money and distribute it ... , as an attempt to get the economy going again.

Anyone who thinks that would be a good idea should be allowed nowhere near handling other people's money.

[Stubby]

Zimbabwe comes to mind.

[Diogenes]

More people in the banking profession are talking about having the government directly print money and distribute it ... , as an attempt to get the economy going again.

Anyone who thinks that would be a good idea should be allowed nowhere near handling other people's money.

And there are other people with different opinions. Take your typical Democrat Voter for example.
(From the Carteret County News-Times)





Beaufort, N.C.

Jan. 17, 2013

TO THE EDITOR:

Republicans and “so-called” conservatives are at it again. They are claiming that the Constitution gives people the right to have guns without the permission of the government. If that were true, then how could New York and Chicago have laws against it?

We Democrats are sick and tired of Republicans constantly using the Constitution to cover up their true plans, which are to make us all afraid of everyone else. Our great president came from a civilized part of the country where there is strict gun control, and he is only trying to bring the benefits of that more modern way of living to the rest of us. I don’t know the exact statistics, but I’m quite certain that Chicago is a lot safer than Morehead City, when it comes to gun violence.

But do Republicans and conservatives listen to the voice of reason? No, of course not. All they want to do is whine and complain about how gun control and wealth redistribution violate the Constitution, as if the Constitution were all that great, anyway. There are a lot of things that need to be changed about the Constitution, I’d say, and President Obama needs to change it.

The Republicans are just trying to stand in the way, because the president is black. They even dared to question whether he was born in this country. I think all this demonstrates that the Constitution needs to be amended when it comes to the qualifications for being president. Right now, it says that a person has to be 35 years old and be a natural born citizen. Well, that is obviously unfair because there are a great many otherwise qualified people who cannot run for president because their mothers had to have a C-section. But because the Constitution was written a hundred years ago, nobody even thought of the discrimination that would result from a doctor having to deliver a baby in this unnatural way. Now that we Democrats are in control of the government, that’s just one more thing we should change in our drive to make life fair.

Please withhold my name because I don’t want to get crank calls.



PROUD TO BE A DEMOCRAT

[ladajo]

Please withhold my name because I don’t want to get crank calls.

Or come to a rapid and abrupt realization of how much of an idiot they really are when the majority of comments point it out.

Thank god for another stupid-ass claiming Democratic alignment.

What a moron.

[choff]

Zimbabwe comes to mind.

Canada between 1938 and 1974 also comes to mind, and in that time frame, the national debt went up from $16 Billion to a whopping $18 billion. After we stopped covering deficits with printed money and started borrowing from banks the national debt went up to $600 Billion. Of that national debt, only $166 Billion represents a shortfall in revenue, Canadian taxpayers have paid out $1.5 Trillion in debt servicing costs, and still owe $500 Billion. That $166 Billion only represents 9% of the debt, the principle, the rest is all compound interest. That's $38 Billion in bank borrowed and created money every year to cover the deficit. We would be deflating the currency by a fraction that much if we had created the $166 Billion by printing it over the same course of time, and wouldn't have that stupid debt and the austerity that goes with it.

But they have been printing the money in the U.S., it's called quantative easing, only they give it to the banks for next to nothing and then borrow it back at much higher rates of interest, compounding the debt problem, why not cut out the middle man and save on interest charges. So long as printed money goes directly to growing the economy there is no inflation, the problem comes when the money gets used to buy everything from China and Japan, then it stimulates their growth, not yours. Lincoln did it with greenbacks, if he had funded the civil war with bank loans they would have charged between 24 and 36% interest, even the south did it, only they lost.