Flat tax blowback

[xorbie]

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Neil?

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Do you not think the psychological effect of a 25 or 30% sales tax would make people less willing to shop as they currently do? This may be good if people actually invested this money instead, but nonetheless it would be bad for the economy.

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The idea that people not spending money would be "bad for the economy" is a blatant lie perpetuated by those who benefit from the masses burning all their money on crap. It would be bad for the "economy" of corporate America, but it would be amazing for the "economy" of the average American.

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I'm glad there are still things we can agree on. [img]/images/graemlins/smile.gif[/img]

[TomCollins]

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According to Neil, the flat tax would basically mean a 22-30% sales tax. I have yet to read the manual for this proposed tax plan, but I think it may have a practical problem for the economy. Our economy is ever-growing largely because of our consumer society and people's constant buy, buy, buy, spend, spend, spend mentality. Do you not think the psychological effect of a 25 or 30% sales tax would make people less willing to shop as they currently do? This may be good if people actually invested this money instead, but nonetheless it would be bad for the economy.

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"Fair Tax" != Flat Tax.

It is much better than the current system since 1) it is more visible, 2) less time is wasted doing tax compliance work

However, I still prefer Ron Paul's Flat tax over it by a long shot, something like 0%.

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RP would have to institute some kind of national sales tax if he wanted anything like a balanced budget.

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The income tax provides about 40% of federal revenue. Paul would probably do things similar to what the LP would do after eliminating the income tax. reduce defense spending by at least half, pardon all non-violent drug offenders in federal prisons, which would enable the closing of half the federal prisons.

It would actually be pretty easy to balance the budget with no income tax. Well, at least for someone willing to return the federal budget to, say, 1960 levels.

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Actually, he just needs to bring it to 2000 levels.

[ConstantineX]

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Neil?

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Do you not think the psychological effect of a 25 or 30% sales tax would make people less willing to shop as they currently do? This may be good if people actually invested this money instead, but nonetheless it would be bad for the economy.

[/ QUOTE ]

The idea that people not spending money would be "bad for the economy" is a blatant lie perpetuated by those who benefit from the masses burning all their money on crap. It would be bad for the "economy" of corporate America, but it would be amazing for the "economy" of the average American.

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I'm glad there are still things we can agree on. [img]/images/graemlins/smile.gif[/img]

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There is no moral difference between spending and consumption. In a perfect economy, the economy would aggregate everyone's preferences according to their utility curves is determining the optimal amount of investment or consumption. If all we preferred instant gratification, our economy SHOULD be 99% consumption and 1% investment. There's alot of wonderful stuff out there being produced by our economy and I don't blame Americans one bit for spending as much as they do with their distorted incentives. Instead, the logical libertarian ideal is to blame government policies for distorting our "true" preferences that forces resources are misallocated.

When you argue to politically unsophisticated people, this is the kind of thinking that understandably makes them wary. This is the exact same fallacy that many liberals make when they decry rising health care spending as a percentage of the economy - we are valuing health care spending higher as the potential rewards of health advances grow. There's nothing WRONG to soon having 30% of GDP spent on healthcare, or people take more time for leisure and consuming as much as they want, as long, again, as they are facing the right incentives. And in fact both of those things are happening. Moralizing saving is no better than moralizing debt.

[Borodog]

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Our economy is ever-growing largely because of our consumer society and people's constant buy, buy, buy, spend, spend, spend mentality.

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No, it isn't. In fact, it's precisely the opposite.

[KikoSanchez]

OMG, I'm so sorry responders. This whole thread was about Neil Boortz's FAIR TAX. I wrote this on zero sleep and accidentally typed FLAT TAX. So yes, please keep in mind I mean this as a critique of the fair tax proposal.

[KikoSanchez]

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Our economy is ever-growing largely because of our consumer society and people's constant buy, buy, buy, spend, spend, spend mentality.

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No, it isn't. In fact, it's precisely the opposite.

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To this post:
Could you please explain what you mean? I'm not well-versed in economics so I'm curious.

To earlier posters:
Why is the personal spending of people not an important drive in the economy? I'm not saying it's everything, but it seems very important. If we took away the whole christmas season each year, would the economy not feel anything from this? What if people spent half of what they spend now every year? Thanks for any intelligent replies.

[TomCollins]

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Our economy is ever-growing largely because of our consumer society and people's constant buy, buy, buy, spend, spend, spend mentality.

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No, it isn't. In fact, it's precisely the opposite.

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To this post:
Could you please explain what you mean? I'm not well-versed in economics so I'm curious.

To earlier posters:
Why is the personal spending of people not an important drive in the economy? I'm not saying it's everything, but it seems very important. If we took away the whole christmas season each year, would the economy not feel anything from this? What if people spent half of what they spend now every year? Thanks for any intelligent replies.

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The basic problem is you are using GDP as a way of defining "The Economy". There are numerous problems with this measurement, but I'll defer to others who have posted about this in the past.

[AlexM]

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It would actually be pretty easy to balance the budget with no income tax. Well, at least for someone willing to return the federal budget to, say, 1990 levels.

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FYP

[AlexM]

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Neil?

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Do you not think the psychological effect of a 25 or 30% sales tax would make people less willing to shop as they currently do? This may be good if people actually invested this money instead, but nonetheless it would be bad for the economy.

[/ QUOTE ]

The idea that people not spending money would be "bad for the economy" is a blatant lie perpetuated by those who benefit from the masses burning all their money on crap. It would be bad for the "economy" of corporate America, but it would be amazing for the "economy" of the average American.

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I'm glad there are still things we can agree on. [img]/images/graemlins/smile.gif[/img]

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I'm sure there are plenty of things we can agree on. They're just not things worth talking about. [img]/images/graemlins/tongue.gif[/img]

[Borodog]

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Our economy is ever-growing largely because of our consumer society and people's constant buy, buy, buy, spend, spend, spend mentality.

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No, it isn't. In fact, it's precisely the opposite.

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To this post:
Could you please explain what you mean? I'm not well-versed in economics so I'm curious.


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Economic growth is dependent on savings, not consumption. Economic growth (i.e. increasing productivity) requires capital accumulation. To accumulate capital you must save some fraction of your productive capacity rather than consuming it. The more you consume, the less you can save, the less the economy can grow.