Billionaire Warren Buffett says stop coddling the super-rich

No, it's not like a VAT at all; that's one of the big misconceptions about it. It is a national sales tax, however it does provide a prebate for all americans to offset what they would spend on basic necessities. The prebate would be made in monthly installments. The size of the prebate is based on the governments published poverty levels for various households.

The VAT from what I've read and understand, taxes at every level (manufacturing, sales etc..) The FairTax is a consumption tax, that taxes only when you purchase something. It doen't apply to used sales.

The tax is 23%. The tax replaces the embedded tax that we pay already at the sales counter (In addition to income tax). This embedded tax is passed down to us from the corporations, through loopsholes and other stuff you guys talk about.

The FaitTax is also inclusive. For example, if you wanted to buy some shoes and, they cost $100.00, that's what you will pay. $77.00 goes to the retailer and, they send the other $23.00 to the government.

Also remember, there will be no income tax. Social Security and medicare are also not withheld from your check either, but these programs will still be funded through the FairTax like many others.

I hope I explained it well enough, I've only read the book about it recently. There is more to it and, I've wanted to start a thread on it, when I had a better understanding but, the more I read about it, the more I like it. I also couldn't help mentioning it because, a lot of the stuff you guys argue/debate about on the forum could be solved with the FairTax IMO.

I've talked to several different people (democrat & Republican) and, once they truly understood what the FairTax was about , they liked the idea.

 

The poverty levels need to be seriously revisited before anything like that could work, especially at a 23% rate. US Poverty Line

Poverty line for a family of 4 in 2011 is $22,350. Which is a joke. You'd have to more than double that in a lot of places for it to come close to reality.

The Fair Tax still sounds regressive to me - and as for the $100 shoes, the seller would simply jack the price to $125, to cover the tax, and the paperwork associated with it.

 

I don't know what to say about the poverty level. Admittedly I'm ignorant of that but, from my understanding, the FairTax can be adjusted ( that would be something the government and politicians could decide on, if it's passed).

One thing for sure, that $23,350 or double that would be actually that amount under the FairTax, not just your gross; it would be your net pay. We would have 25-30% more income in out pocket in addition to whatever prebate we get.

In your example of the retailer jacking up the price, I don't agree. The $100.00 was just a example. No matter what the retailer charged, 23% of that would go to the government. If the price is $125.00, $28.75 would still go to the government. That's not covering the tax because, the retailer will still be paying it no matter what he decides to charge.

TreePixie, your the first person I've come across who didn't like the FairTax. I'm sure there are other people who don't like it but, I had always assumed it would be people who profit from our current system.

I would like to know your opinion about why you think it would still be regressive. I would like to know from your personel experience why you believe this. I'm not trying to argue, I honestly would like your opinion. There was a time in my life when I lived at what would be considered the poverty level and, I would have still loved this system. Being able to keep my whole paycheck and, get a prebate on top of that would have been awesome IMO.

 

In regards to the hundred dollars I think her point was that the business won't take the hit they'll just increase prices to ensure profits.

 

I hear you, and I don't think you're trying to be difficult. It just seems to me that people at a lower income level would suffer, because they'd have no options on what *not* to buy,if you follow. It's all necessary, prebate or not.

I'd like to see a luxury tax imposed on higher-value items, because people buying yahts, Lamborghinis and airplanes are far better able to afford that level of taxation that someone who is buying his bus pass, or food for his kids or shoes to work in.

 

Yes. You're getting to understand me too, DK

 

It's also true that I'm a cynic, and that I do not trust my government in a way which I think is specific to people in my age cohort. Civil rights, Vietnam, assassinations and Watergate were our childhood, and left us with an enormous mistrust not only of specific politicians but of the mechanisms inherent in our government.

I believe a Fair Tax is likely to be no less manipulated by the Power That Be to screw over the poor and middle class than our current tax system.

 

amen sister

 

Cool, I understand that. That would be a good question to ask the proponents of the program.

Yeah, I kinda got what she was saying. It's one of the questions I had myself. From my understanding from reading the book is, the corporations get taxed by the government and, they pass that down to us, in the price of their products. The number they came up with was 22% , which is the embedded tax we already pay. In theory the fairTax will replace this embedded tax when the corporations stop having to pay the taxes themselves.

My thinking was, what's going to stop them from continuing to charge that extra 22% to make even more money. The theory is, through the fair market, to gain a competitive advantage, some companies will lower their prices. This will force the other companies to do the same if they don't want to lose customers.

A lot of my opinions on this, is based on what I'd do in my business so, it's probably not entirely correct or accurate compared to big corporations. If I build a server for a company, I will pay the embedded 23% on the parts I buy. I will then add my markup and, that will be the final price. I've already payed my 23% extra for the parts to build the server so, the 23% would already be in the price, no matter what I charged.

I wouldn't charge a extra 23% on top of that, to ensure profits; because I already made the profit through my calculated markup. If I did that, I wouldn't sell many servers or computers and wouldn't be in business very much longer.

It's hard enough competing with companies like Dell & HP, who can purchase their parts in mass quantities and, get the parts at a much cheaper price than I do. I have to keep my prices competitive which is difficult to say the least, even though my server & computers are superior.

 

Yeah, and that theory underlies capitalism, unfortunately it appears when I look around, there's some flaws in the theory. Like unbridled corporate greed.

I think you have more faith in the reasonability of corporations than I do.

 

Has anyone calculated the projected federal revenue generated under these proposed tax compared to federal revenues under the current sales and income tax??

I was always under the impression federal revenues would be significantly lower and more vulnerable to volatility in the economy/job market under some of these tax options.

I just don't think there's a reasonable way to eliminate the federal income tax and expect the U.S. government to function anywhere near its current level.

 

The federal government already can't function at its current level lol

 

You don't say, lol

 

They say that with the FairTax, it would support the current government. I had wondered that myself. They have studied and consulted with economist and, 23% was the number they came up with, that would allow the government to be funded.

 

That's so true. That's why I think something else should be tried. I hate the current tax system and, think causing a lot of problems. The income tax was never supposed to be the way it is now. There didn't even used to be a tax on labor years ago. I'm not that trusting of the government either and, IMO the income tax is a way for the government to be in your business (personel business not company business).

 

http://www.youtube.com/user/TheYoungTurks#p/u/3/6c-hgUM_Qjw

 

Did any of ya'll motherfuckers actually read the article. How did this turn into a debate about raising income taxes? Buffet is talking about hedge fund managers and other wealthy high-level investors who benefit from the carried interest loophole paying their fair share. We're talking about investors who make tens of millions of dollars a year not upper middle-class people. This is why these motherfuckers get away with screwing the non-wealthy majority. People don't even care enough to pay attention to the issue.

If you aren't a multi-billionaire and you're defending the tax loopholes for the super-rich, then you're a fucking idiot. Of course, in Paniro's case that goes without saying.

That's not what Buffet's editorial was about you ignorant motherfucker. You're regurgitating talking points that you misheard from the debate about extending the Bush tax cuts last year.

Tell me that you're a crack baby or that you got kicked in the head by horse when you were a youngin. It'd be a damn shame if nature made you this fucking stupid. Individuals who earn over $250,000 are in the top 2% of wage earners in the this country. Even in a high-rent, high-income market like NYC, they're the top 6% of wage earners. If you think that they're living paycheck to paycheck, how do you imagine that people who earn minimum wage scrape buy? Since you want to make this a debate about income taxes, I'll tell it to you straight. The top marginal rate needs to be raised. It used to 90% during the 50s and was close 70% until Reagan cut it. People who make that much money can handle an increase of the top rate to 40 or 50 percent where it should be. And before you come back at me with some bullshit about half their money being taken, I'm going to school your ignorant ass on graduated taxation. The tax increase would only be on the money that they earn above $250,000. So if the Bush tax cuts were allowed expire and the top marginal rate reverted to 39% from 35%, a person who earns $280,000 would pay an extra $1,200 a year. You really think that would be the difference between a person who makes that much money living in a house and living on the street?

 

Yall better listen to my man Fred!!!:smt038

 

I gotta agree with this.

 

Killer post.

:smt071