(02-19-2016 11:26 AM)stinkfist Wrote:  

(02-19-2016 10:59 AM)vandiver49 Wrote:  

(02-19-2016 10:27 AM)Owl 69/70/75 Wrote:  Tiering a consumption tax will create more problems than it will solve. The simplest and best solution is the Boortz/Linder prebate/prefund or its cousin, Milton Frieman's negative income tax.

This works as well. I'll support a system that does not require an extensive gov't apparatus to run. The tiered idea just seems rife for 100,000 gov't workers to move out by Dulles.

any way you cut it, taxing consumption needs to become the end solution....and not one electable candidate has mentioned it (to my knowledge)

You're right, not one candidate has mentioned it. And I'd be fine with a consumption tax if not for the very minute you mention such a plan that everyone start submitting items that such be exempted.

(02-19-2016 01:49 PM)vandiver49 Wrote:  You're right, not one candidate has mentioned it. And I'd be fine with a consumption tax if not for the very minute you mention such a plan that everyone start submitting items that such be exempted.

That's why you do the prebate/prefund or the negative income tax. Either one takes care of the problem, a whole lot more simply and efficiently.

(02-19-2016 10:27 AM)Owl 69/70/75 Wrote:  Tiering a consumption tax will create more problems than it will solve. The simplest and best solution is the Boortz/Linder prebate/prefund or its cousin, Milton Frieman's negative income tax.

This. I'm going to do some research into Friedmans proposal. I admit I lack knowledge of it to have much of an opinion.

(02-19-2016 09:15 AM)Owl 69/70/75 Wrote:  If they could increase their votes from the poor by 10%, it would drastically alter the election calculus.

The problem (rather demonstrably) isn't with the poor. Democrats often point out how Republicans win poor and uneducated states. It IS a problem with blacks (and arguably Hispanics).

Unfortunately for the black population, generally what gets the Hispanic vote (which is growing) isn't always good for them.

(02-19-2016 09:37 AM)stinkfist Wrote:  that's the 64k question as the wealth gap continues to widen....I've been toying with a tiered consumption tax in my head lately....

You can't tax your way out of the wealth gap. The reason you can't is because the wealthy have 'risk capital' and the poor have none of that... and the 'tax adjusted' return on risk capital will ALWAYS be bigger than the 'tax adjusted' return on non-risk capital. Change the tax rates and watch the required return for that investment increase to offset it. What I mean is, if the current rate of wage inflation is 1% and the rate on risk capital is 10% with a 25% tax (7.5% net) and you double the tax on risk capital, investors will now require 15% (still 7.5% net).

FO... The reason the pre-fund works is that it is the only thing that counters this.

Let's say the consumption tax is 25% and everyone gets a prefund up to their first $50,000 in spending.

That means that someone making $50,000 gets an additional $12,500 in his pocket... but prices essentially rise to where it now costs him $62,500 to get that same $50,000 in goods right? (actually it's better than that, but I'm being conservative)

He had no reason to only spend $49k before and save $1k because his return on that 1k was essentially zero.

But now if he spends only 49k (pre-tax) his tax bill is only 12,250 and he received a prefund of $12,500. He gets a 'bonus' return of $250 on his $1,000 in savings. The bigger you make the VAT, the better his return on his savings. Those are rates of return that the wealthy generally can't get. For the person that still can't save, he isn't getting better, but he also isn't getting any worse.

Of course I can already envision ways for the wealthy to try and capitalize on this, but it's an awful lot of work for relatively (to them) small amounts of money. They'd have to do it on massive scales (which would be hard to do in secret) to get any traction.

(02-19-2016 04:54 PM)Hambone10 Wrote:  

(02-19-2016 09:15 AM)Owl 69/70/75 Wrote:  If they could increase their votes from the poor by 10%, it would drastically alter the election calculus.

The problem (rather demonstrably) isn't with the poor. Democrats often point out how Republicans win poor and uneducated states. It IS a problem with blacks (and arguably Hispanics).

Unfortunately for the black population, generally what gets the Hispanic vote (which is growing) isn't always good for them.

(02-19-2016 09:37 AM)stinkfist Wrote:  that's the 64k question as the wealth gap continues to widen....I've been toying with a tiered consumption tax in my head lately....

You can't tax your way out of the wealth gap. The reason you can't is because the wealthy have 'risk capital' and the poor have none of that... and the 'tax adjusted' return on risk capital will ALWAYS be bigger than the 'tax adjusted' return on non-risk capital. Change the tax rates and watch the required return for that investment increase to offset it. What I mean is, if the current rate of wage inflation is 1% and the rate on risk capital is 10% with a 25% tax (7.5% net) and you double the tax on risk capital, investors will now require 15% (still 7.5% net).

FO... The reason the pre-fund works is that it is the only thing that counters this.

Let's say the consumption tax is 25% and everyone gets a prefund up to their first $50,000 in spending.

That means that someone making $50,000 gets an additional $12,500 in his pocket... but prices essentially rise to where it now costs him $62,500 to get that same $50,000 in goods right? (actually it's better than that, but I'm being conservative)

He had no reason to only spend $49k before and save $1k because his return on that 1k was essentially zero.

But now if he spends only 49k (pre-tax) his tax bill is only 12,250 and he received a prefund of $12,500. He gets a 'bonus' return of $250 on his $1,000 in savings. The bigger you make the VAT, the better his return on his savings. Those are rates of return that the wealthy generally can't get. For the person that still can't save, he isn't getting better, but he also isn't getting any worse.

Of course I can already envision ways for the wealthy to try and capitalize on this, but it's an awful lot of work for relatively (to them) small amounts of money. They'd have to do it on massive scales (which would be hard to do in secret) to get any traction.

I never said that taxing would narrow the wealth gap....I was responding to a post about how to get more red votes from the poor and implied that it will get tougher for the red side to get votes moving forward if something doesn't change.....better paying jobs are the only thing that can narrow the gap....

here's the entire post...why respond to something taken out of context? just respond to the entire post....it's not that difficult.....

Quote:vandiver49 Wrote:
(Today 08:15 AM)Owl 69/70/75 Wrote:
(Today 07:52 AM)vandiver49 Wrote:
I would say that if you changed the narrative associated with the handout that the GOP might better positions themselves with the poor. But I'm doubtful that such a move could work.
__________
Republicans have to change the narrative. As far as working, it doesn't have to succeed spectacularly. If they could increase their votes from the poor by 10%, it would drastically alter the election calculus.
__________
How do you get 10% of people to acknowledge that the reason for part of their misery is self inflicted?
__________
that's the 64k question as the wealth gap continues to widen....I've been toying with a tiered consumption tax in my head lately....

(02-18-2016 10:10 AM)gsu95 Wrote:  And Republicans and conservatives always seem to think that what is best for them is best for the country and everyone in it -- and what is best for Republicans and conservatives is also best for the world, and everyone in it.

So do Democrats and liberals.

The one you support is determined by which of your civil liberties you can live with having trampled.

So if the religious right is 30% of the GOP and the GOP abandons them, I guess they start a 3rd party. But how does the GOP make up that 30%?

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(02-19-2016 10:03 PM)stinkfist Wrote:  I never said that taxing would narrow the wealth gap....I was responding to a post about how to get more red votes from the poor and implied that it will get tougher for the red side to get votes moving forward if something doesn't change.....better paying jobs are the only thing that can narrow the gap....

here's the entire post...why respond to something taken out of context? just respond to the entire post....it's not that difficult.....

Quote:vandiver49 Wrote:
(Today 08:15 AM)Owl 69/70/75 Wrote:
(Today 07:52 AM)vandiver49 Wrote:
I would say that if you changed the narrative associated with the handout that the GOP might better positions themselves with the poor. But I'm doubtful that such a move could work.
__________
Republicans have to change the narrative. As far as working, it doesn't have to succeed spectacularly. If they could increase their votes from the poor by 10%, it would drastically alter the election calculus.
__________
How do you get 10% of people to acknowledge that the reason for part of their misery is self inflicted?
__________
that's the 64k question as the wealth gap continues to widen....I've been toying with a tiered consumption tax in my head lately....

No need to be snippy... honestly don't understand why you would be. I'm fully aware of the context and it changes nothing.

While you didn't say taxing would narrow the wealth gap, you certainly spoke about the widening of the wealth gap... as if it were a bad thing and/or something that someone thinks needs to be addressed... otherwise, why did you bring it up? Nobody else did...

and you also suggested a tiering of the consumption tax as a possible solution... but as I clearly explained, you raise the taxes, they raise the required return to offset it.... separate issue.

Whatever problem someone thinks the wealth gap is, the prefund is among the few things that remotely addresses it. I'm giving you an 'and', not a 'but'.

It's pretty difficult to have a consumption tax based on income... so I'd have to assume you're talking about something more akin to a luxury tax... which already exist and could still be included and separate from a consumption tax, but John Kerry rather famously demonstrated how they still try and get around such things. The pre-fund creates a tiered consumption tax. Yet from a functional standpoint, all that is happening is the IRS is adding 'up to' $12,500 to people's paychecks (through the same mechanism which they take it out for SSI etc) and the retailer is charging 'sales tax'. Very simple.

Anyone who earns less than the pre-fund has an effective tax rate of zero... actually as I demonstrated it could easily be negative... and the person who makes just over the threshold has an effective consumption tax rate of essentially zero. As incomes go up, the effective VAT approaches the nominal vat.

Simple math
-you earn and spend 50k or less, you get a prefund of 100% of the 25% vat... effective rate is zero
-you earn and spend 60,000, you get a prefund of 50k and pay 25% on the 10,000 excess. That's $2500 net tax on 60k or just over 4% net tax.
-you earn $1mm and spend $1mm and you get a prefund of 50k and pay 25% on the $950,000 excess. That's $237,500 tax or 23.75% net tax.

More importantly because of the way the wealthy don't have to classify 'earnings' as income, they often spend $10mm, but only report earnings of say $1mm. In that case, the person is paying income tax on the $1mm, and 25% VAT on the 9,950,000 in excess spending. Money we currently aren't touching. Currently he pays perhaps a net 20% on his $1mm or $200,000... but under this scenario he's paying closer to $2.4mm.

Why would he do this and not fight it? Because generally speaking, all of his alternatives have VAT as well. He's been avoiding paying their VAT by being an American. No VAT on exports. Sure, some can and will still get away with some.... but it's a far smaller number. No, I wouldn't expect to get 100% from many of them, but even $1 is $1 more than they're paying now... and the reality is that it will likely be far more than that for the primary reasons I suggested (the major alternatives also have VAT)

(02-20-2016 10:27 AM)EverRespect Wrote:  So if the religious right is 30% of the GOP and the GOP abandons them, I guess they start a 3rd party. But how does the GOP make up that 30%?

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I said nothing about disavowing them or making them feel like SCC's. I'm talking about no longer allowing them to control the message that the GOP wants to put out there. I would say that the SC voters - who have a significant evangelical block - have spoken. The flip side to your argument is by letting the 30% control things, the other 70% may feel disenfranchised and prefer an alternative.

(02-22-2016 06:53 PM)miko33 Wrote:  

(02-20-2016 10:27 AM)EverRespect Wrote:  So if the religious right is 30% of the GOP and the GOP abandons them, I guess they start a 3rd party. But how does the GOP make up that 30%?

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I said nothing about disavowing them or making them feel like SCC's. I'm talking about no longer allowing them to control the message that the GOP wants to put out there. I would say that the SC voters - who have a significant evangelical block - have spoken. The flip side to your argument is by letting the 30% control things, the other 70% may feel disenfranchised and prefer an alternative.

Or maybe the 70% can stop cucking to the SJWs and stand for something. Otherwise, the base stays home and the GOP loses every time.

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