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View Full Version : Economics State taxes tell us why some in the GOP fight hard for a "FAIR tax."


Direckshun
02-03-2013, 12:24 PM
The Institute on Taxation and Economic Policy looks over all 50 states and their tax systems:

http://www.itep.org/whopays/#map

The take-away? Every single one of them, all 50 states plus DC, are regressive tax systems.

Here in Missouri, the poorest quintile pays 9.6% of their income to state/local taxes. The middle quintile pays 9.0%.

The top 1%? 5.4%:

http://www.chiefsplanet.com/BB/picture.php?albumid=148&pictureid=1294

But why? Here's why (http://www.itep.org/pdf/mo.pdf):

http://www.chiefsplanet.com/BB/picture.php?albumid=148&pictureid=1293

And that, right there, is why the GOP pushes for the FAIR tax, which for those of you out-of-the-know, is a complete replacement of the income tax (which is built to be progressive) with sales taxes (which are naturally regressive).

Here's Missouri's income tax % by comparison:

http://www.chiefsplanet.com/BB/picture.php?albumid=148&pictureid=1292

So in a wide ranging plan, from the Paulites to the Tea Partiers to the GOP establishment in states like Louisiana (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/01/bobby-jindal-wants-to-swap-louisianas-income-tax-with-a-sales-tax-good-luck-with-that/), the plan is to eradicate the income tax altogether, and replace it with an all-funding consumption tax.

Which would cement our taxing structure as regressive, and shift the burden of taxes to the middle and lower classes.

Brainiac
02-03-2013, 12:40 PM
You and I disagree on many things.

However, we are in complete agreement on this issue. I've always thought the "Fair" Tax is the unfairest tax of all, and it's simply a gimmick to shift the tax burden away from those who have the best ability to pay.

SNR
02-03-2013, 01:20 PM
I've never been a fan of the fair tax.

That being said, I don't see anything wrong the set up you posted in the OP. Poor people have less money. If they pay any kind of taxes, it will represent a far greater hit to the household than a rich guy paying the rate he does.

That doesn't mean you make those percentages equal, though. Rich people can and should only pay so much. They play PLENTY of income taxes.

Direckshun
02-03-2013, 01:35 PM
I've never been a fan of the fair tax.

That being said, I don't see anything wrong the set up you posted in the OP. Poor people have less money. If they pay any kind of taxes, it will represent a far greater hit to the household than a rich guy paying the rate he does.

That doesn't mean you make those percentages equal, though. Rich people can and should only pay so much. They play PLENTY of income taxes.

By that logic, poor folks pay twice of plenty.

Do you think our taxing structures should be regressive?

mnchiefsguy
02-03-2013, 02:21 PM
As I recall, most fair tax proposals that I have seen do not start taxing income until around the 40-50K mark, meaning that the first 40-50k are exempt from tax. In that particular instance, the poor pay no income tax at all.

I notice, as usual, that Direckshun appears to have omitted some key factors in his argument. Having a portion of income being exempt from tax clearly waters down the regression factor of the tax itself.

I like the idea of the fair tax, although I would need to see a concrete proposal before voting yay or nay.

mnchiefsguy
02-03-2013, 02:22 PM
Here is a prime example of what I was talking about in the last post--Stever Forbes flat tax plan, which is one of the most well known of the plans out there, does not tax income until the 46k mark:


http://www.forbes.com/forbes/2005/1017/042.html

Note that this is an opinion piece, and the writer of it is actually in favor of a flat tax that would qualify as more regressive. Was merely posting the article as evidence that there is an income exemption factor in the flat tax plan that was not considered in Direckshun's analysis.

Brainiac
02-03-2013, 03:52 PM
As I recall, most fair tax proposals that I have seen do not start taxing income until around the 40-50K mark, meaning that the first 40-50k are exempt from tax. In that particular instance, the poor pay no income tax at all.

I notice, as usual, that Direckshun appears to have omitted some key factors in his argument. Having a portion of income being exempt from tax clearly waters down the regression factor of the tax itself.

I like the idea of the fair tax, although I would need to see a concrete proposal before voting yay or nay.

Here is a prime example of what I was talking about in the last post--Stever Forbes flat tax plan, which is one of the most well known of the plans out there, does not tax income until the 46k mark:


http://www.forbes.com/forbes/2005/1017/042.html

Note that this is an opinion piece, and the writer of it is actually in favor of a flat tax that would qualify as more regressive. Was merely posting the article as evidence that there is an income exemption factor in the flat tax plan that was not considered in Direckshun's analysis.
You're seeing the term "fair tax" and assuming that it's a generic term that could describe some very reasonable flat tax proposals. It's not.

It's a sales tax that would replace all income and payroll taxes. It's a truly idiotic scheme championed by Neal Boortz, a conservative radio talk show host. Republican congressman John Linder of Georgia has introduced more than one bill in Congress over the years proposing it.

Money Magazine published an interesting critique of the "Fair Tax" several years ago called "Just how fair is the Fair Tax? (http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/)".

The answer is that it's not fair at all, and there's no way in hell that the plan proposed by Neal Boortz would raise the same amount of revenue that the current income tax does (despite his protestations over the years that it would).

I'm sure there are several people on this site who will argue vehemently that the "Fair Tax" is both fair and will solve all of our economic problems. They're wrong. The "Fair Tax", as proposed by Neal Boortz, is simplistic and asinine.

SNR
02-03-2013, 03:55 PM
By that logic, poor folks pay twice of plenty.

Do you think our taxing structures should be regressive?

All we can do is adjust the rates. Democrats and Republicans both created the rates that exist today.

Monitoring how many people are poor and what percentage of the rich population makes up the state and its tax dollars is a line I'm not willing to cross. And that's not even a psycho anarcho libertarian argument. Most Democrats would agree with me.

RedNeckRaider
02-03-2013, 03:56 PM
You're seeing the term "fair tax" and assuming that it's a generic term that could describe some very reasonable flat tax proposals. It's not.

It's a sales tax that would replace all income and payroll taxes. It's a truly idiotic scheme championed by Neal Boortz, a conservative radio talk show host. Republican congressman John Linder of Georgia has introduced more than one bill in Congress over the years proposing it.

Money Magazine published an interesting critique of the "Fair Tax" several years ago called "Just how fair is the Fair Tax? (http://money.cnn.com/2005/09/06/pf/taxes/consumptiontax_0510/)".

The answer is that it's not fair at all, and there's no way in hell that the plan proposed by Neal Boortz would raise the same amount of revenue that the current income tax does (despite his protestations over the years that it would).

I'm sure there are several people on this site who will argue vehemently that the "Fair Tax" is both fair and will solve all of our economic problems. They're wrong. The "Fair Tax", as proposed by Neal Boortz, is simplistic and asinine.

Oh yeah, Neal Boortz says you have never had a higher score than 300 and never will, so there~

Brainiac
02-03-2013, 03:59 PM
Oh yeah, Neal Boortz says you have never had a higher score than 300 and never will, so there~

Quality post.

RedNeckRaider
02-03-2013, 04:17 PM
Quality post.

Thank you~

HonestChieffan
02-03-2013, 04:19 PM
There is so much bullshit built into these sorts of charts and "data" its amazing people with any understanding fall for this shit.

patteeu
02-03-2013, 04:29 PM
I don't see any connection between the Fair Tax and the tax analysis presented in the OP. What was the point of this thread?

HonestChieffan
02-03-2013, 04:40 PM
I don't see any connection between the Fair Tax and the tax analysis presented in the OP. What was the point of this thread?

Rich Missouri folk are the debil....

Comrade Crapski
02-03-2013, 09:02 PM
The Institute on Taxation and Economic Policy looks over all 50 states and their tax systems:

http://www.itep.org/whopays/#map

The take-away? Every single one of them, all 50 states plus DC, are regressive tax systems.

Here in Missouri, the poorest quintile pays 9.6% of their income to state/local taxes. The middle quintile pays 9.0%.

The top 1%? 5.4%:

http://www.chiefsplanet.com/BB/picture.php?albumid=148&pictureid=1294

But why? Here's why (http://www.itep.org/pdf/mo.pdf):

http://www.chiefsplanet.com/BB/picture.php?albumid=148&pictureid=1293

And that, right there, is why the GOP pushes for the FAIR tax, which for those of you out-of-the-know, is a complete replacement of the income tax (which is built to be progressive) with sales taxes (which are naturally regressive).

Here's Missouri's income tax % by comparison:

http://www.chiefsplanet.com/BB/picture.php?albumid=148&pictureid=1292

So in a wide ranging plan, from the Paulites to the Tea Partiers to the GOP establishment in states like Louisiana (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/01/bobby-jindal-wants-to-swap-louisianas-income-tax-with-a-sales-tax-good-luck-with-that/), the plan is to eradicate the income tax altogether, and replace it with an all-funding consumption tax.

Which would cement our taxing structure as regressive, and shift the burden of taxes to the middle and lower classes.

We get it, Drek. You're a leach who doesn't work and you want more transfer payments.

Bewbies
02-03-2013, 10:35 PM
There shouldn't be any income tax. And there shouldn't be any Americans exempt from contributing to the gov't, no matter how rich or poor.

chefs fan in omaha
02-04-2013, 06:04 AM
Just define what is fair. Why should I be penalized for being successful (taxes) while some lazy person lays around smoking pot and watching springer all day.
Talk about fair, he is in need of more government resources and should pay more than I do.