Ex'Tax – The big idea
ex-tax.com
ex-tax.com
edit: Downvotes? Seriously? FairTax shifts the burden dramatically onto the middle class. A rich person pays no capital gains, and as long as they don't go buying billion dollar yachts, they'll pay next to nothing percentage-wise.
If you give someone the opportunity, but they choose to remain poor then it is not the government's job to take care of them.
If however you do not give them that opportunity then we are just encouraging the poor to stay poor and depend on the government.
I have to imagine no capital gains would have more meaning to the middle class saving for retirement as compared to a wealthy person netting 15% more.
Lastly - expenditures are at least linear with regards to income if not exponential past $150k looking at a recent census. If you read the FairTax proposal it states that the rich would end up paying more tax overall then they do today.
FactCheck.org has a well researched and well citied piece at http://www.factcheck.org/2007/05/unspinning-the-fairtax/. Among the findings - anyone making between $15-30k and $200k suffers under the plan, while the rich see their tax burden drop dramatically.
A consumption tax is optional. Meaning I only pay that tax if I consume above a poverty level. An income tax however is not. If I earn an income, I pay the tax.
The reason this is such a big deal is that it empowers the individual to change their financial situation. For example my taxes may decrease by 50% under FairTax, simply because I live a simple life style.
If someone chooses to improve their situation, they can take all the extra money, save, invest without capital gains, and see the turnaround much quicker.
This is in contrast to today's system which penalizes saving & investment and HEAVILY penalizes those who go out and start a business (I pay quite a bit more tax as a self employed individual).
It is also much more logical to be penalized for consumption vs. contributing to society (similar to the OP).
[1]I've yet to see a sane argument for why you'd want to give property speculation a massive tax advantage over buying and selling consumer goods
The reason why I supported the FairTax because of the prebate and it increases the purchasing power of the poor. When the poor can keep 100% of their pay, they control what they can spend on. For the middle class, the same deal: we can have families improve their lives, save up for college, be masters of their spending, and pave the way for more charity. The rich will continue being rich, regardless but if we can ease the tax burden on the middle class and the poor by removing income taxes it'd be a big break.
Or does your "artificial scarcity" phrase really just mean "regulations keeping me from selling water with white food coloring in it and calling it milk?"
http://www.cato.org/publications/commentary/milk-cartel-econ...
Not sure why I'm getting a shit-ton of downvotes. A lot of negativity on HN lately.
Everything about .gov manipulation of farmers is controversial. Milk's been a free-er market than most for about 15 years now. Corn for example is still corrupt as all heck leading to everything from obesity to anti-biotic resistances. But milk is currently a free-er market than most.
It was such an out there statement that it seemed like trolling to me, which is why I didn't even bother to downvote, and assumed that others would take care of it.
* Counterfactual in the sense is that it is about a world that does not currently exist.
Just because you tax labor less, does not mean salaries necessarily go down. The cost of labor is primarily a function of supply and demand + overall competitiveness of your economy on the global stage.
In fact if you increase the cost of consumer goods by pushing up the cost of manufacturing inputs, you're going to have to pay workers more to maintain the same standard of living. Their cost to drive to work goes up; their cost to feed themselves goes up; their cost to buy a house goes up; etc.
Because income tax is taken out of a worker's gross pay, the Ex'tax plan is not going to substantially impact how much companies pay their workers. It will simply increase take-home pay. Assuming it's a revenue-neutral tax shift, three things happen:
- Workers with low incomes get a little bit more take-home money every month.
- Workers with high incomes get a lot more take-home money every month.
- Milk and eggs are uniformly more expensive.
That's why this is a regressive move that hurts people with low incomes.
The costs of some things that you mention (oil, electricity) might well go up, but the costs of others might stay the same or drop depending on how much of their cost if attributable to labour costs. Locally sourced food might go down in price.
These price changes are exactly what the tax aims to achieve (e.g. lower energy use)
As some other commenters have pointed out, those particularly hard up can be compensated in some other way (e.g. tax credits).
OK, come be poor in eastern Montana, with no public transit (hello, increased gas tax!), food that has to be trucked in (hello, increased gas tax!), long dark winters (goodbye, solar!), and cold winters (hello, increased propane tax!).
Just because a group is a minority doesn't mean it deserves to get screwed over. It's MLK Day here in America, so it surprises me that this even needs to be said anymore.
It is not anyone's right to have everyone pay for their choice to live far from infrastructure that already has a sunk cost.
You can solve one problem by mandating universal veganism and banning the keeping of pets which are obligate carnivores (cats, mainly), but that just increases the demand for farmers and farming.
A lot of the time, responsible decision making just has to be thrown aside if you want to actually function.
Take owning a car as an example (UK perspective here; may differ in the US). With some effort, you can structure your life in such a way that one is not necessary and therefore get by via cycling/public transport.
That may mean huge sacrifices, though. Families are often spread far and wide, it's not rare for two cohabiting partners to be stuck in a situation in which living close to work is a 'one or the other' choice.
Would taxing fuel more fix that? I'm not sure. I think it's just considered a 'cost of doing business' (i.e. being employed).
Similarly, 40 hour+ work weeks are normal. This results in people either trying to maximise their use of downtime (and thus choosing the bus that takes 20 minutes over the walk that takes an hour), or simply being exhausted enough that more 'convenience' purchases feel justified.
I think we would all be far better off simply 'doing less' (for lack of a better term), and I think proposals like a basic income go quite far towards achieving that.
This is extremely tin-eared and utterly ignores the realities of farmers and ranchers. You know, the people who grow the food which the rest of the country relies on.
Just blandly stating that cars aren't necessary is wrong.
The point I'm trying to make, distilled, is that we live in a world that has people commuting tens of miles to work each day.
Could we fix that, preferably in a way that's not punitive?
I believe without proof that fuel is an inelastic good; doubling the price of fuel (for individual use only) would not result in a halving of its' use, because it's necessary for many.
Essentially; it takes effort for people to reduce their usage of some resources. For me to eat half as much cake is relatively trivial, it simply requires willpower. For me to use half as much energy than I do would require a very significant reshuffling of my life. My choices are limited, a tax hike would not change that.
I think some people seem to have this idea that taxes are magical beasts. They can work if replacements are actually viable. But taxing food won't mean I eat less, I need it to survive. Hopefully you see what I'm trying to get at here.
Not sure where I stand on this proposal yet, but policies don't have to be all or none, though administration is far easier if they are.
In the UK (and maybe everywhere else?) agricultural diesel ("red diesel") is taxed separately from consumer petrol/diesel.
http://www.irs.gov/publications/p225/ch14.html#en_US_2014_pu...
So far "green laws" like Germany Energiewende is not that successful: http://www.economist.com/blogs/economist-explains/2014/12/ec...
On the other tax, high taxes on oil encourage efficiency and public transport.
That's not a problem specific to all "green laws" as you seem to imply.
The Economist does seem to come across as slightly biased in its reportage (I'm surprised), when they say "renewables undercut relatively climate-friendly natural gas on price". Relative to what? It becomes clearer as you read further, relative to coal, but the quoted statement makes it sound like natural gas is more climate-friendly than renewables. Clearly not.
That definitely sounds like a no-brainer to me, unfortunately there's significant political resistance to even a fact-based debate on that one.
I'd say tax non-renewable resources and externalities (e.g. CO2) most of all, for the same reason you tax liquor and cigarettes.
The Simon-Ehrlich Wager showed how wrong this idea is: http://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager
There is an excellent book 'The Bet' about the wager. Over the course of the 20th century despite global population increasing by at least 200% and global GDP increasing even more prices of a bundle of metals decreased overall between 1900 and 2000.
Since 1950 the world has extracted more than the known reserves of tin, copper, iron ore, lead and zinc and yet known reserves are bigger than in 1950! http://www.econlib.org/library/Enc/NaturalResources.html
There is an energy problem. Fossil fuels are getting more expensive and anthropogenic global warming is a concern. However, Europe already has big taxes on fossil fuels.
What Europe, and the rest of the developed world don't do is spend enough on researching better forms of nuclear energy. ITER and others are something, but it's not enough. A better approach would be to increase funding on energy research.
So, you propose that because we keep improving extraction methods / keep finding new deposits of non-renewable resources, that these resources are infinite?
They're pointing out that the hysteria focused on resource scarcity is unfounded, has been proven to be unfounded over and over again for the past century, and will likely continue to be shown to be unfounded for the next century.
We're not going to run out of earth any time soon.
To me, the major difference between renormalizing currency and taxing (in this simple case) seems to be that the government can inject money into specific industries and projects without causing inflation (as the money supply is held level). Is this correct? If so, how does this apply to the real world? Is it just a special case?
The major difference between taxing and renormalizing (or printing) money is stabilising the currency's value, but distributional effects are also important and mostly intended
An Ex'Tax also ends up being regressive like consumption taxes. The poor spend a lot larger percentage of their income on consumption (which are what those resources end up going into) then the rich do.
Would the money be rebated if the cars were exported, so they were competitive with cars from other countries, or would cars manufactured in the EU be more expensive than cars manufactured in other countries?
There is an assumption in the plan that labor is infinite and fungible and interchangeable and therefore quite worthless as a limitless pool, but reality is that "growing a doctor" takes a lot more time and resources than "growing a coal mine". As a strategy for centrally controlling a market, it would probably lead to more volatility in prices and supply and demand overall.
I'm not sure how the excise tax would be different from a carbon tax. That may be the whole point, here's a new marketing spin on a bad idea, look, its got a new name and everything...
It seems like decreasing taxes on labor (people) and increasing taxes on raw materials (things we dig out of the ground) would simply shift the tax burden away from urban areas (where people are) to rural areas (where the mines are).
Wouldn't this just make things worse for poorest parts of the country, like Appalachia, where the mining industry is typically the only provider of well paying jobs?
Its not like the mine owners are going to eat the tax losses out of their own pocket, LOL. The price of their product will increase.
As a side effect the more regulated an industry the more corrupt it'll be on average. So expect plenty of sweet tax loopholes to make up for it, so to be revenue neutral at the new higher tax rate the proles will have to pay even higher taxes.
Higher taxes always result in higher tax evasion, I'm guessing black market coal would be non-trivial to work, but black market charcoal or black market firewood would become a pretty serious issue under this carbon tax 2.0.
Nothing is perfect, and pretending that your proposal is simply flawless makes you look like a fool. Having the honesty to talk about weaknesses and drawbacks is what any sensible research should do (and not just so that they can hand-wave them away).
If you can't deign to admit you and your ideas are not perfect, your campaign website makes you look narrow-minded and foolish.
http://ex-tax.com/files/4314/1693/7138/The_Extax_Project_New...
Now, this, by in itself, is no reason not to support the idea (which I do, for the most part, esp. the lower taxes on wages), but I feel it should be addressed up front.
Of course, in reality, nobody is a real conservative. Everybody only wants to cut spending on things they disagree with but I doubt there's anyone who will advocate spending cuts across the board, even if they benefit from such spending (and therefore the spending cut would hurt them).
So what's "unneeded spending?" Voters have decided that our country should have a safety net. As long as that's true, even if you get rid of all other spending you'd save at most 30% of the tax bill. Still a huge need to think of better ways to raise the remaining 70%.
I'd argue we're not spending those Medicare dollars efficiently. Did you know you get a choice between expensive brand name drugs and generics, even if the generics have the same efficacy? Insanity. Cut the profit out of healthcare, and your Medicare health care dollars are going to go a lot futher.
Medicare might be somewhere between 33% and 50% efficient.
The amount of doctoring / healthcare consumed in the US is far beyond any other comparable first world system.
Far too expensive of procedures; too high of salaries for doctors and healthcare workers in general (eg the median radiologist salary in the US is $380k; in France it's ~$100k); drug prices that are drastically too high; and the over-consumption of all of it - the US Government's primary focus over the next 20 years should be to bring healthcare per capita costs in line with the rest of the first world.
Cutting the profit out of healthcare isn't going to make a difference unless you're willing to dramatically reduce: 1) the total consumption of healthcare services; 2) healthcare salaries; 3) drug costs.
Profit is a fraction of the problem. You might save 7%-10% by eliminating all profit from every company in the health sector, from hospitals to drug companies. Now how do you plan to deal with the other 30% to 40% of cost that needs to be eliminated?
Correct. Example: Watsi.org. They are amazingly efficient at delivering healthcare to people in the third world, and they run off donations. [+]
[+] Its true they are partially funded by YC now to run their ops, but I believe all of their healthcare provider spending is still entirely donation driven.
Their concept is genius. The emotional pull of helping a particular person in a powerful way is addictive feeling, it almost feels like playing slots.
Everyone has a different idea of which spending is unnecessary and what taxes are unneeded.