Where is the US economy headed?

Can we please give the semantics argument a rest? I think everybody gets the picture already.

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Avatar ADV wrote:

Can we please give the semantics argument a rest? I think everybody gets the picture already.

Semantics?

The semantics should be clear. There is progressive, flat, and regressive, and also there are varying degrees of progressive and regressive. No tax is perfectly progressive or perfectly regressive, but any tax that tends to lessen the bite on poorer people vs the more wealthy, as groups, it would be progressive, and for the opposite scenario, regressive. In different words, if a tax skews the severity of taxing from the less wealthy vs the more wealthy, as measured by the income or wealth of the poor vs the wealthy, percentage-wise, it no longer is flat, but has some degree of being progressive or regressive. So if a tax is not flat, then it has to be considered some degree of progressive or regressive. Also, within a tax code, the provisions that cause the overall tax to tend one way or the other would also be thought of as progressive or regressive provisions or aspects of the tax. This is surely not only a widely held concept concerning taxes I would think, but also just plain common sense.

I am waiting for Parados to provide a link to what Adam Smith wrote that he believes disputes what I have presented here, which Parados disagrees with. A quote I dug up from Adam Smith, is as follows:

"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." [1]

Of course, none of that disagrees at all with what I have argued here, throughout the last several pages. And of course the above would totally support the idea of a sales tax exempting the "necessities" in order to make it a progressive tax.

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That is from Adam Smith's discussion on LAND taxes okie.

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A tax upon house-rents, therefore, would in general fall heaviest upon the rich

It has NOTHING to do with sales or excise taxes.

You didn't dig that quote up from Adam Smith. You took it from Wikipedia's poorly written article.

The first of Smith's 4 maxims on taxation says..

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I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expence of government to the individuals of a great nation is like the expence of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation..

All of Smith's quotes refer to revenue as the gauge by which taxes should be measured. Smith has an entire chapter defining what revenue is.

As for you argument about luxuries vs necessities, I doubt you would even agree with Smith on that one..

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By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt,

Under Smith's definition a phone is a necessity and one could consider a color TV to be one as well.

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Parados, good luck in attempting to translate Adam Smith's view of luxuries into today's luxuries. You are going to have a very tough time using Adam Smith to bolster your assertion that exempting necessities from the sales tax does not make it a progressive tax. In fact, your first Smith quote actually argues the opposite of what we now have with the income tax. Surely, poor people do have some interests in the state, in terms of protection, etc., and therefore under the definition, they should pay at least some income tax, so it looks to me like our current income tax is far more progressive than Smith's statement would appear to advocate. In fact, your first quote sounds more like a flat tax, based on a flat or proportional rate applied to income, which we for sure do not have now.

And are our interests in the state proportional to our income? Hmmmmm, maybe rich people should have more votes in elections, Parados? Maybe we should take a look at this "taxation without representation" issue? In fact, originally, was it only property owners allowed to vote? Maybe we are onto something here that could be applied to modern society?

Your second statement is fairly beside the point. I am sure politicians would have a tough time identifying exactly what a luxury is now, but surely nobody should argue that groceries would at least be one necessity, and just exempting one necessity makes the tax more progressive than it would be otherwise.

Parados, quote some more Adam Smith, as those quotes were interesting, but certainly did nothing to bolster your argument, and in fact seemed to detract from it.

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http://www.speculativebubble.com/images/homevalues1.gif

If this is a spike and the housing prices come back down to the 120 or 110 level we're in for a big crash.

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okie wrote:

Parados, good luck in attempting to translate Adam Smith's view of luxuries into today's luxuries. You are going to have a very tough time using Adam Smith to bolster your assertion that exempting necessities from the sales tax does not make it a progressive tax. In fact, your first Smith quote actually argues the opposite of what we now have with the income tax. Surely, poor people do have some interests in the state, in terms of protection, etc., and therefore under the definition, they should pay at least some income tax, so it looks to me like our current income tax is far more progressive than Smith's statement would appear to advocate.

No, Smith says they should pay some tax. He doesn't say they should pay some "income" tax. Under our current system people that don't pay income taxes pay other taxes so they clearly meet the standard set out by Smith. Smith adds ALL taxes together and ALL revenues. You should do the same.

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In fact, your first quote sounds more like a flat tax, based on a flat or proportional rate applied to income, which we for sure do not have now.

If that was the ONLY thing Smith said then it might be true. But it's not. Smith goes on to elaborate later to say that the rich should pay more. That brings us to today. If there was only one tax then a flat tax might meet Smith's maxim. There isn't only one Federal tax though. You continue to break the taxes down into segments and say that the segment is the measure. It isn't. It is the TOTAL of taxes compared to the TOTAL of income. Smith is pretty clear on this in spite of your inability to understand it.

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And are our interests in the state proportional to our income? Hmmmmm, maybe rich people should have more votes in elections, Parados?

Smith says nothing like that. He only refers to taxation in relationship to revenues meaning income.

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Maybe we should take a look at this "taxation without representation" issue?

Taxation without representation? It seems you don't know the meaning of "without representation." Who is taxed without the ability to have representation?

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In fact, originally, was it only property owners allowed to vote? Maybe we are onto something here that could be applied to modern society?

Benjamin Franklin lampooned those who claimed only property owners should vote when he wrote:

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Ben was right. Jackasses do have the right of suffrage. Only today they vote then claim they have no representation because their vote is not equal to their property.

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Your second statement is fairly beside the point. I am sure politicians would have a tough time identifying exactly what a luxury is now, but surely nobody should argue that groceries would at least be one necessity, and just exempting one necessity makes the tax more progressive than it would be otherwise.

Deciding what is a luxury is beside the point? What kind of nonsense is that? If you can't define what is a luxury vs a necessity then your tax proposal is nothing but BS. Defining one necessity doesn't make the tax progressive. It might make it less regressive but you don't seem to understand how a scale works. Adding 2 to -20 makes it a number closer to being positive but doesn't make it positive. The same thing with your "progressive" silliness. Because something is less regressive does NOT make it progressive. You might try reading Adam Smith's section on the taxation of luxuries.

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Parados, quote some more Adam Smith, as those quotes were interesting, but certainly did nothing to bolster your argument, and in fact seemed to detract from it.

When you completely ignore the meaning of what Smith wrote then perhaps. Others seem to be more capable of understanding than you are okie.

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parados wrote:

okie wrote:
Parados, good luck in attempting to translate Adam Smith's view of luxuries into today's luxuries. You are going to have a very tough time using Adam Smith to bolster your assertion that exempting necessities from the sales tax does not make it a progressive tax. In fact, your first Smith quote actually argues the opposite of what we now have with the income tax. Surely, poor people do have some interests in the state, in terms of protection, etc., and therefore under the definition, they should pay at least some income tax, so it looks to me like our current income tax is far more progressive than Smith's statement would appear to advocate.
No, Smith says they should pay some tax. He doesn't say they should pay some "income" tax. Under our current system people that don't pay income taxes pay other taxes so they clearly meet the standard set out by Smith. Smith adds ALL taxes together and ALL revenues. You should do the same.

Nor does he say they should not pay some income tax. If he says they should pay proportionately and according to their interests, then it would be quite logical that they should pay proportionately all types of taxes. At least, I see nothing in your argument, Parados, where Smith would object to it, and in fact what he said would seem to indicate a proportionate tax across the board, not just in certain taxes.

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In fact, your first quote sounds more like a flat tax, based on a flat or proportional rate applied to income, which we for sure do not have now.
If that was the ONLY thing Smith said then it might be true. But it's not. Smith goes on to elaborate later to say that the rich should pay more. That brings us to today. If there was only one tax then a flat tax might meet Smith's maxim. There isn't only one Federal tax though. You continue to break the taxes down into segments and say that the segment is the measure. It isn't. It is the TOTAL of taxes compared to the TOTAL of income. Smith is pretty clear on this in spite of your inability to understand it.

Smith saying the rich should pay more proves nothing about paying a higher percentage. Paying more does not necessitate paying a higher percentage. A flat tax would result in the rich paying more, without even making the taxes progressive. Sure, all the different taxes make up the whole, but each tax can be evaluated by themselves. To understand the whole, you need to understand the parts, obviously. The nature of each tax can and should be judged in terms of being progressive, flat, or regressive.

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And are our interests in the state proportional to our income? Hmmmmm, maybe rich people should have more votes in elections, Parados?
Smith says nothing like that. He only refers to taxation in relationship to revenues meaning income.

What spurred my comment was your quote about the comparison of interests in government, comparing rich and poor. I was being flippant, and I do not propose rich people having more votes, but it did cause me to wonder about the degree of influence, in terms of voting, if it is measured by our interests and by how much tax we pay. I think it is an interesting question. Perhaps people should appreciate the fact that the government is mostly supported by rich people.

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Maybe we should take a look at this "taxation without representation" issue?
Taxation without representation? It seems you don't know the meaning of "without representation." Who is taxed without the ability to have representation?

Nobody. I was not proposing anything, but merely making an observation that if representation is measured by taxation, why wouldn't a person that pays twice as much tax deserve 2 votes instead of 1? Parados, I am not proposing it, but I merely make an observation. Perhaps poor people should count their blessings instead of demanding the rich do more? Perhaps, rich people are already doing more than they should have to do under a fair system.

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In fact, originally, was it only property owners allowed to vote? Maybe we are onto something here that could be applied to modern society?

Benjamin Franklin lampooned those who claimed only property owners should vote when he wrote:

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Ben was right. Jackasses do have the right of suffrage. Only today they vote then claim they have no representation because their vote is not equal to their property.

Again, I am not proposing people vote according to land ownership. I am making an observation however that everyone receives the benefits of this country whether they are pulling their load or not. I am not rich, nor do I own any property besides my house, but I do appreciate those that work harder and provide jobs for the rest of us.

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Your second statement is fairly beside the point. I am sure politicians would have a tough time identifying exactly what a luxury is now, but surely nobody should argue that groceries would at least be one necessity, and just exempting one necessity makes the tax more progressive than it would be otherwise.
Deciding what is a luxury is beside the point? What kind of nonsense is that? If you can't define what is a luxury vs a necessity then your tax proposal is nothing but BS. Defining one necessity doesn't make the tax progressive. It might make it less regressive but you don't seem to understand how a scale works. Adding 2 to -20 makes it a number closer to being positive but doesn't make it positive. The same thing with your "progressive" silliness. Because something is less regressive does NOT make it progressive. You might try reading Adam Smith's section on the taxation of luxuries.

You misunderstood my point. Simply put, I believe discretionary spending, as a percentage of a family's income or wealth, which would be subject to sales tax, would be a higher percentage of their income than for the poor. I will concede that after the income rises to a certain level where the very rich or the very high income earners place more money into investments, which are not subject to sales tax, the percentage could drop, even though sales tax amounts stay high, but it is doubtful the percentage would drop below that of the spending of the poor. Further, taxes on investments would more than make up for the sales tax those people do not pay on their investments. So, such a sales tax would be progressive, although the degree of progressivity would be dampened as incomes or wealth rises above a certain level. I hope you follow that. It is difficult to explain without charts. I tried to find appropriate ones to link, but could not.

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Parados, quote some more Adam Smith, as those quotes were interesting, but certainly did nothing to bolster your argument, and in fact seemed to detract from it.
When you completely ignore the meaning of what Smith wrote then perhaps. Others seem to be more capable of understanding than you are okie.

You will need to bolster your statement that I ignored anything you quoted from Smith with some evidence, Parados. Simply providing your interpretation of Smith proves nothing. It needs to be backed up by what Smith wrote. You claimed to use Smith as the ultimate authority of your argument about progressive taxes vs regressive and flat, but instead the quotes you used proved nothing. That is why I asked for something more.

Parados, not an argument here, but if you can find some good charts of how typical households spend their budgets, perhaps one for low income, say 25,000, then one for 50,000, one for 100,000, and so on, which would show percentages spent on various necessities, such as food, etc., then for so-called luxuries or for more discretionary spending, we could actually start to prove who is correct here. I believe my argument has to be correct, given that the poor spend virtually everything on necessities, or at least in theory they should. I spent some time, but was unable to find any helpful charts or data.

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okie wrote:

Nor does he say they should not pay some income tax.

Perhaps you should read Smith before you make such ignorant comments. He makes a rather lengthy argument on taxes on the wages of the inferior classes of workmen and why it is a bad idea. At one point he states

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Absurd and destructive as such taxes are, however, they take place in many countries.

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Smith saying the rich should pay more proves nothing about paying a higher percentage.

No, it just shows that Smith was not for a regressive tax. You might want to look up the word "proportion". Now what is "proportion of revenues?" What is revenue as defined by Smith in his first book? What did Smith say about the rich paying a "larger proportion" of their revenues.

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Sure, all the different taxes make up the whole, but each tax can be evaluated by themselves. To understand the whole, you need to understand the parts, obviously. The nature of each tax can and should be judged in terms of being progressive, flat, or regressive.

Once again you are trying to argue from ignorance. Read Smith before you make such silly comments. He disputes you and did it 220 years ago. You have to look at the taxes as a whole to judge the equality or inequality of them.

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Nobody. I was not proposing anything, but merely making an observation that if representation is measured by taxation, why wouldn't a person that pays twice as much tax deserve 2 votes instead of 1? Parados, I am not proposing it, but I merely make an observation. Perhaps poor people should count their blessings instead of demanding the rich do more? Perhaps, rich people are already doing more than they should have to do under a fair system.

Oh? You are saying it was nothing but a red herring? Or an appeal to emotion? You certainly are saying it had no logical basis. Now you are clamiing the rich are doing more than they should have to do? Based on what economic theory? Certainly not Smith. Cite your economic source for this ridiculous statement.

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such a sales tax would be progressive, although the degree of progressivity would be dampened as incomes or wealth rises above a certain level. I hope you follow that.

Yeah, you are arguing it would be progressive until it isn't progressive. That is complete nonsense. A tax can't be progressive AND regressive. It is one or the other. If the tax DECREASES as a percent of revenue with the more revenue the person has then it is by definition regressive. A regressive tax may seem progressive when you compare certain incomes but you have to measure it as a whole.

As for you argument about my not providing quotes from Smith. I provided Smith's definition of a necessity. You dismissed it without arguing against what Smith said. A necessity is something that an average person in a given country would be ashamed to be without.

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Parados, you are cherry picking and making your own interpretations of Smith to suit your position. I've yet to see any quotes that you have dredged up so far to support your argument.

The opinions on this site concerning Smith's ideas on taxes are more credible than what you present here, Parados.

http://www.progress.org/banneker/adam.html

If you look at the first of four different maxims they describe for Smith's writings on taxes, it appears Smith is advocating a flat and proportional tax, as nearly as possible, not necessarily a progressive tax.

This from the above link:
When examining the different forms of taxation, Smith adheres to four maxims which a good tax should conform to:

1. "The subject of every State ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the State."

2. "The tax each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, and the quantity to be paid, ought all to be clear and plain to the contributor, and to ever other person."

3. "Every tax ought to be levied at the time, or in the manner in which it is most likely to be convenient for the contributor to pay it."

4. "Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the State."

Bearing all these things in mind, there are two types of taxation which obtain Smith's recommendations: a tax on luxury consumables and a tax on ground-rents (the annual value of holding a piece of land).

Further Parados, it doesn't sound like Smith advocated taxing anyone's work, not just the work of poor people. From the above, it appears he mainly advocated property tax and sales tax on luxuries.

Concerning luxuries, you attempted to make the case that televisions or cell phones are not luxuries, according to Adam Smith. How do you propose to prove that, beyond the ridiculous statement that people might be "ashamed" of not having them. What if people are ashamed of not having $300 sneakers, Parados, or what if they are ashamed of driving old beat up cars? You use Smith's statement about linen shirts to support your sweeping statements, yet Smith did not advocate tobacco as a necessity, but what if people are ashamed to not smoke? I did not have a cell phone for a long time, and I certainly was not ashamed of it, nor should anyone be ashamed of not having a TV, perhaps they should be proud, considering what is portrayed there. I think being ashamed of how you dress in public is a different argument than being ashamed about what you might own in your house.

Obviously, a sales tax that excludes most necessities would be progressive, except for perhaps the most extreme cases at the top of the spectrum of income earners. I admitted the progressivity, as judged by the percentage of taxed items purchased by various households, might drop off when you reach the very, very high incomes, however, the tax would be progressive in the main spectrum of households, from poor to higher incomes, excluding the very, very high incomes. The very, very high incomes would still pay a very high amount of sales tax, much higher than the poor, but as a percentage of their income if they earn millions and invest most of it instead of spending it, the percentage could drop. This does not detract from the fact that for perhaps 90% or more Americans, the tax would most definitely be progressive. And in the case of the very, very high incomes, taxes on their income, investments, real estate, inheritance, etc. would more than make up for any deficiency of taxing their purchases in the form of sales tax.

Also importantly, some very, very high incomes probably would still fall within the progressive status, as some may simply spend most of it on luxuries. It is hard to fathom how some people, as sports stars, can spend that much money, but start considering the wine and dining, expensive cars, jewelry, and lavish vacations and other luxuries, the money they might pay in the form of sales tax would be astounding.

The other point to be made here, if Smith was so against regressive taxes, and you assert any sales tax is regressive, how come he apparently favors a sales tax over an income tax?

I think we should both keep looking for some graphs that would show percentage of household budgets spent on various things, and that would show those percentages at various places on the economic ladder. I have looked but have not found any good ones yet.

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Well, lets see okie.

Again you ignore the term revenue which means income if you bothered to read Book 1. The main sources of revenue in Adam Smith's time were from property or stock of merchants, neither of which which were counted as wages. Again from Book 1.

Perhaps you should read Smith's maxims again in light of today.

1. Everyone should contribute in proportion to their revenues.(income)

If you bothered to read Smith you would know why he proposed what he did. He says repeatedly that some taxes exist because they appear to be the best way to tax revenues since it would be too intrusive at that time to figure incomes from stock and property. The ultimate goal of taxation should always be to tax revenues in an equitable fashion.

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Concerning luxuries, you attempted to make the case that televisions or cell phones are not luxuries, according to Adam Smith.

Who said anything about "cell phones?" Smith is pretty clear on his meaning of a necessary. Even the site you quoted lists it and makes the same point I did.

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On the subject of luxury consumables, he is adamant about the definiton of 'luxury' and of 'necessary.' By his definition, a 'necessary' may vary from place to place and from time to time.

"Adamant" that site says.

A necessary is something an average person would be ashamed to be without. Would you be willing to brag you can't afford a TV? Do you know anyone that has told you they can't afford a TV? I don't know of anyone that is ashamed they don't smoke. Do you? I know lots of people that BRAG they don't smoke. Many of them can be quite obnoxious. As for your argument that it doesn't matter what a person has in their house. Really? So you don't think running water and electricity are necessities? Heat isn't a necessity in the winter months? Smith thought it was. Since you don't think it matters what the person has in their house then why should it even matter if they have a place to stay. Your argument seems to be that shelter is a luxury.

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And in the case of the very, very high incomes, taxes on their income, investments, real estate, inheritance, etc. would more than make up for any deficiency of taxing their purchases in the form of sales tax.

Hmm.. when did you say that before? Why did you say it now? Why do you have to "make up for a deficiency" if the tax you proposed is already "progressive?" It appears you are admitting your "sales tax" idea isn't progressive.

Let me put it this way again. A tax that takes a larger percentage of income from the middle class compared to the rich and the poor is NOT a progressive tax. Make a chart, incomes on the bottom, percent of income paid in taxes. When it is a bell curve as percentage of tax to income it is NOT progressive and it is NOT a flat tax. It doesn't matter where the cut off on the curve is on the upper end. Once it dips it destroys any claim that it is progressive.

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http://www.bls.gov/cex/csxann05.pdf

The top 20%(quintile) earn 15 times more than the lowest 20% but only spend 4.5 times more.

The spend roughly the same on tobacco. The rich spend 4.5 times for alcohol. (Alcohol taxes are based on number of gallons, not the price per gallon.) They spend 2.5 times for utilities. They spend 5.5 times more for entertainment. They spend 5 times as much in eating out.

The only area where the top quintile comes close to spending 15 times the bottom quintile is in insurance and retirement savings.

Based on the numbers it appears there is NOTHING you could tax with a flat sales tax that would cost the top 20% more than the bottom or middle. We are not talking about a couple of millionaires here okie. We are talking about the average of everyone earning over $142,000 would not pay more in sales taxes in any general category than the bottom or middle earners. Your sales tax would have to be graduated based on earnings or very selective like yachts or other high end items that the middle class would never buy.

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I will address your points, but some questions that I wish to ask you, which really impact the argument here, as you seem to claim that a progressive tax has to be perfect over the entire economic scale of people.

Does income accurately reflect a person's wealth?

Does the income tax always tax the most wealthy person the most, or does it even always tax the highest incomes the most?

Is the current income tax system considered a progressive tax system?

Is a "progressive" tax designed to help less wealthy people vs. more wealthy people?

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No tax system is ever "perfect." Where do you get these ideas? jeeesh!

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Maybe we can learn something about economics from Iraq. Things there are so rosy that they are building gated communities.

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It's almost comical; our soldiere can't even secure the green zone, and we're trying to bring security to Iraq with 150,000 troops. Will somebody please tell Bush and Patreaus it can't be done with 150,000? PLEASE!

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okie wrote:

I will address your points, but some questions that I wish to ask you, which really impact the argument here, as you seem to claim that a progressive tax has to be perfect over the entire economic scale of people.

I didn't say it had to be perfect. Where did you learn anything about making graphs? There are often outliers when it comes to plotting points but the average is what you are looking at. People making $10 million won't all pay the same tax but they should average at least the same percentage tax if not more than the average of those making $100,000.

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Does income accurately reflect a person's wealth?

We don't tax wealth at the Federal level (for living people at least). We tax income. Wealth normally creates income. Where did wealth come into the argument other than being introduced now as a red herring? Smith never dealt with taxing wealth. He talked about taxing revenue.

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Does the income tax always tax the most wealthy person the most, or does it even always tax the highest incomes the most?

For the income tax and income, yes, it normally taxes the highest incomes the most. There will be exceptions but they are the exceptions rather than the norm or average.

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Is the current income tax system considered a progressive tax system?

Is a "progressive" tax designed to help less wealthy people vs. more wealthy people?

What do you mean by "help"? And what does it have to do with wealth? We are talking revenues(incomes) and have always been talking revenues.

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parados wrote:

[ I didn't say it had to be perfect. Where did you learn anything about making graphs? There are often outliers when it comes to plotting points but the average is what you are looking at. People making $10 million won't all pay the same tax but they should average at least the same percentage tax if not more than the average of those making $100,000.

Fair enough.

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We don't tax wealth at the Federal level (for living people at least). We tax income. Wealth normally creates income. Where did wealth come into the argument other than being introduced now as a red herring? Smith never dealt with taxing wealth. He talked about taxing revenue.

True, we tax income, but I would submit to you that it is really wealth that this whole argument comes down to bottom line. Smith talked about revenue, but he also talked about wealth, and perhaps revenue is perceived to come closest to what I think is thought to be the real bottom line aspect of the financial conditions of society, which is wealth. So when you tax revenue, you are not totally mirroring the ultimate goal of the taxing system. So it is my argument that just as the income tax system, viewed as progressive, does not perfectly mirror the goal, neither should a relatively progressive sales tax system be expected to perfectly mirror the goal.

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For the income tax and income, yes, it normally taxes the highest incomes the most. There will be exceptions but they are the exceptions rather than the norm or average.

I think there are lots of exceptions, Parados, and if you measure the tax according to wealth, which I am arguing is the ultimate goal behind all of this here, there are widespread exceptions.

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What do you mean by "help"? And what does it have to do with wealth? We are talking revenues(incomes) and have always been talking revenues.

Here is where I think I have a fundamental disagreement. I think lurking in the shadows of this whole argument is the bottom line, which is wealth. Income does mirror wealth much of the time, and so that seems to be where the argument of progressive and regressive taxes is based upon most of the time, I would agree to that extent, but as I said, behind it all is the desire by government to re-distribute wealth by using the tax codes to do it. Surely you would not deny that this all comes back to wealth distribution among the citizenry?

I will try to look closer at your numbers above, but for starters, things like utilities, insurance, rent, and other essentials have no sales tax. And it is technically possible to exclude all necessities, in which case low income families could spent 0% of their income on luxuries, which would make it impossible for you to prove that even someone that makes millions would spend less percent on sales tax. Anything more than 0 is a higher proportion, obviously.

The other aspect of the fair tax, as the term is used for sales tax, that has not been mentioned, is a proposed rebate to the working poor, which would make the tax even more progressive than what I have been arguing here.

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cicerone imposter wrote:

No tax system is ever "perfect." Where do you get these ideas? jeeesh!

Bingo! Tell Parados that.

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okie wrote:

cicerone imposter wrote:
No tax system is ever "perfect." Where do you get these ideas? jeeesh!

Bingo! Tell Parados that.

What kind of crap is this okie? Did you not just say "fair enough" when I said the exact same thing?

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okie wrote:

parados wrote:
[ I didn't say it had to be perfect. Where did you learn anything about making graphs? There are often outliers when it comes to plotting points but the average is what you are looking at. People making $10 million won't all pay the same tax but they should average at least the same percentage tax if not more than the average of those making $100,000.

Fair enough.

BINGO.. Ding, ding, ding. Calling Okie.. Wake up okie....

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We don't tax wealth at the Federal level (for living people at least). We tax income. Wealth normally creates income. Where did wealth come into the argument other than being introduced now as a red herring? Smith never dealt with taxing wealth. He talked about taxing revenue.

True, we tax income, but I would submit to you that it is really wealth that this whole argument comes down to bottom line. Smith talked about revenue, but he also talked about wealth,

Oh, he did? Which book of "Wealth of Nations" does he talk about personal wealth?

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