Flat tax blowback

[Ineedaride2]

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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.

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I considered responding to this in detail, but thought better of it. Honestly, you should read the wikipedia article on the FAIR Tax, and if you have further questions, please ask them. I had similar questions as you until I did some research, then I realized that this tax system has merit.

[Copernicus]

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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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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.

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Yeah, companies never grow by re-investing profits, its always from outside capital.

[pvn]

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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.

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Yeah, companies never grow by re-investing profits, its always from outside capital.

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lol you're like a caricature of yourself.

[Zygote]

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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.

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Yeah, companies never grow by re-investing profits, its always from outside capital.

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what is your point?

just out of curiosity, am i remembering correct or did you say that you trade billions of dollars for a fund once? If so, do you mind providing more information about your fund and what your involved with?

[Brainwalter]

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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.


[/ QUOTE ]

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.

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Yeah, companies never grow by re-investing profits, its always from outside capital.

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Reinvesting profits IS accumulating capital. It's also "saving some fraction of your productive capacity rather than consuming it". A dividend would allow the investors to either consume some of the profits or to reinvest it in some other venture.

[AlexM]

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This whole thread was about Neil Boortz's FAIR TAX.

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FYI it's Neal not Neil.

[xorbie]

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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.

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Where have I moralized saving? It's not wrong to spend all your disposable income (plus $10k in credit card debt) on crap that won't really make you or anyone else better off. It's just stupid.

I would say that I view most advertising campaigns as glorified forms of propaganda, but it's not that people are "wrong" to be tricked by them. Ad people get paid the big bucks because ads work, and they work by not acting on the conscious level at all, which is what makes them hard to resist (particularly when they have been incorporated into long standing cultural institutions, such as Christmas).

[Moseley]

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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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And if it's bad for the economy, it's bad for business, and if it's bad for business, it's bad for stockholders, who are baby boomers getting ready to retire. BOOM!