Source
r/AskTrumpSupporters•
ButAleppo

What are your thoughts on the Fair Tax?

Taxes

" FairTax is a proposal to reform the federal tax code of the United States. It would replace all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a single broad national consumption tax on retail sales. The Fair Tax Act (H.R. 25/S. 18) would apply a tax, once, at the point of purchase on all new goods and services for personal consumption. The proposal also calls for a monthly payment to all family households of lawful U.S. residents as an advance rebate, or "prebate", of tax on purchases up to the poverty level. "

https://en.wikipedia.org/wiki/FairTax

Posted Aug 18, 2019, 12:31 PM UTC

22138
TriasmosTrump Supporter•

A flat tax for everyone at the point of sale is the appropriate way to tax people imo

5†
StringerBullUndecided•

Do you understand that flat tax schemes are inherently regressive and benefit the wealthiest and hinder the poor due to diminished marginal utility at higher income levels?

12
btcthinkerTrump Supporter•

Do you understand that flat tax schemes are inherently regressive and benefit the wealthiest and hinder the poor due to diminished marginal utility at higher income levels?

We're talking about what's morally right. It's not morally right to treat people differently, simply because the marginal utility of their income is lower.

3
IllKissYourBoobiesTrump Supporter•

How so?

Please explain.

2†
lannister80Nonsupporter•

How so?

Please explain.

People with low income spend a large portion of their income on "buying things". Food, gas, stuff like that. So almost every dollar out the door is used to buy something consumable/perishable, at best a short-term durable good that will last 5 years, and all of those transactions are being taxed. No investments are being made.

If you have much higher income, sure, you buy more expensive food than a poor person, more electronics, etc. But there is no way you spend the same percentage of your income on retail goods that a poor person does. You might buy another house (investment), you might sock more of that money away into retirement (investment), etc.

Once your basic needs are met (food, housing, clothes), the dollars spent after that are dollars with less "utility" because they aren't being spent on necessities. If someone makes $1000 / month, an extra $50 is a BIG DEAL. If someone makes $10K / month, an extra $50 is not a big deal at all.

That's what makes the tax regressive.

28
adamn45Trump Supporter•

What do you think about “The Flat Tax”?

1†
iMAGAnationsTrump Supporter•

The rich buy high priced luxury goods. Their tax is going to be much higher than yours.

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[deleted]•

[removed]

1
iMAGAnationsTrump Supporter•

"regressive" is just a leftist term for fair. AKA, everybody pays in their FAIR share of what they consume.

-1
j_laNonsupporter•

Doesn’t this incentivize black markets?

6
GardimusNonsupporter•

Do you think we should encourage people to spend less?

Do you think that at some point, you reach a level of wealth where you don't need to spend as much of your income?

2
[deleted]•

[removed]

1
ButAleppoOPNonsupporter •

What about the second portion I posted?

1
adamn45Trump Supporter•

The Flat Tax is a lot better imo.

Eliminate every tax and replace them with one flat income tax, 20% across the board

3
j_laNonsupporter•

Do you agree that taking 20% of the income that someone making 10k per year is a far greater burden in real terms than taking 20% from a person making a million per year?

4
adamn45Trump Supporter•

Yes but fair is fair

2†
j_laNonsupporter•

But isn’t a disproportionate burden to one person unfair? At least with scaling marginal rates, everyone is taxed equally on the equal amounts they earn. You and I both earn 10k? We are both taxed at the 10k level. You earn another 5k? That 5k is taxed at the 15k level.

So why is a flat tax more “fair” than this? How do you define fair? Is it based on numbers in the abstract or is it based on the real consequences that people face?

9
adamn45Trump Supporter•

Yeah you’re right

7
wingman43487Trump Supporter•

Someone making 10k a year wouldn't be paying taxes anyway. Current cutoff is 24k.

2
iMAGAnationsTrump Supporter•

You're right, disproportionate burden to one person IS unfair. Which is why the rich being taxed at a higher rate is unfair. They are being unfairly burdened.

0
r124124Trump Supporter•

I like it in general.

3
r124124Trump Supporter•

I like it in general.

3
RationalExplainerTrump Supporter•

I've always been a fan of the consumption tax. Shit, you can even make it progressive by bracketing it like you do income tax (for example no tax on first $20k, after that, 10% up to $50k....etc...just an example). I think its a fundamentally better way for the government to collect revenue. First off, its probably a smaller deadweight loss. Secondly, its fairer in my view to all people. Third, it incentivizes less mindless spending and more savings which might help keep Americans out of debt and money is better invested by the financial system than by consumerism in my view.

3
DeathToFPTPNonsupporter•

Third, it incentivizes less mindless spending and more savings which might help keep Americans out of debt and money is better invested by the financial system than by consumerism in my view.

With the caveat that I would like this part quoted above to happen, what do you see as the consequences to the economy if this were to occur?

1
RationalExplainerTrump Supporter•

I think there will be more GDP Growth and more productivity over all but it will come at a cost to some industries/sectors. For example with such a tax structure there will probably be less consumer spending on luxury goods or entertainment (and less consumer spending in general perhaps, though it depends how the brackets are structured and how much deadweight loss is eliminated). On the contrary there will be more corporate spending I think, and that money is generally spent in a better way (in my view) than consumer spending. That demand will come in the form of more CapEx largely.

1
rayrayheyheyNonsupporter•

How would you track consumption? That seems incredibly invasive, especially if you want to waive the first $20k.

1
Valid_ArgumentTrump Supporter•

Thanks for linking which Fair Tax, because I remember at least 4 proposals named "Fair Tax" in the last ten years.

Taxing income/labor was always a bad idea and we should never have taxed income in the first place. The payroll tax is the only income tax that makes sense at all (since it's basically an insurance plan based on your income). Taxes are a disincentive. Taxing income discourages labor, which is just stupid. Progressive taxation is even more stupid. Once you hit ~$160,000 household, you may as well stop, every dollar after that isn't worth making (unless you can clear the hurdle to stop paying the payroll tax).

Taxing consumption is much fairer, no question. The more shit you consume, the more you should pay.

The "prebate" should be a separate proposal.

3
btcthinkerTrump Supporter•

The flat point of sail tax would certainly be more efficient and more moral than the current tax system. The monthly payment to all (family) households is also better than welfare, so I'm all for that as a replacement of all the welfare schemes out there. It's more efficient, has fewer negative externalities, and is more moral than the other welfare schemes. However, it's not maximally moral, since it's still redistributive.

2
iMAGAnationsTrump Supporter•

You had me up until the rebate proposal.

I'd be fine with a VAT type tax as long as all other taxes were ended.

2
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1
Davec433Trump Supporter•

I’m a huge fan of the Fair tax even with its handout to the poor which IMO is a necessary evil because it is an regressive tax equal tax.

The thing I hate about Yang and the VAT, BUT I GET $1,000 A MONTH CLUB. Is it’s an additional tax vehicle, where the Fair Tax replaces all taxes and would erase the wealth envy we have going on in our country pushed by Democrats with , THEY’RE NOT PAYING THEIR FAIR SHARE!!!

1†
hiIamdarthnihilusTrump Supporter•

This hurts minorities. I am against it.

1†
ButAleppoOPNonsupporter •

How so?

13
[deleted]•

I can’t wait to hear the explanation for that claim.

11
lemmegetdatdickTrump Supporter•

I've never seen so many words unnecessarily hyperlinked to their wikipedia page in a single post. Gave me a chuckle.

Like the other guy says. First part is great. Last part could be awful if its implementation is vulnerable to abuse.

0†
DeathToFPTPNonsupporter•

Last part could be awful if its implementation is vulnerable to abuse

Isn't it just a UBI?

6
lemmegetdatdickTrump Supporter•

Seems that way.

1
DeathToFPTPNonsupporter•

What are your concerns about the UBI?

2
lemmegetdatdickTrump Supporter•

Despite its sophisticated sounding name, it's just a free money program. It raises the income floor, which consequently raises the price floor of goods and services. If we ignore the economic aspect, there's also a political slippery slope. Elections will become auctions where politicians can just buy votes with voters money by offering to raise the universal income or defined poverty level. Since the takers outnumber the makers in votes, this seems likely.

1
iMAGAnationsTrump Supporter•

That other people don't deserve a single penny of tax payer dollars. If the govt has so much extra of my money to pay other people then it should be taking less from me, not giving it away to others.

1
[deleted]•

[removed]

1
StringerBullUndecided•

Why is the last part awful? Is it because it's aimed to help those in abject poverty?

2
iMAGAnationsTrump Supporter•

Because it defeats the entire point of a fair tax to unfairly return money to only certain people.

0
[deleted]•

[deleted]

0
PaxAmericana2Trump Supporter•

The first half is fantastic, the handouts in the latter portion smack of entitlement creep. For context I also think the earned income tax credit in current form is wasteful.

Our side have a different approach where we have a flat tax rate. No loopholes for corporations to jump through, and everyone contributes according to their participation in the economy.

My opinion is that if everyone and every business had skin in the game, then we'd be more risk-averse and far less interventionist with respect to shitholes around the world.

-4†
ButAleppoOPNonsupporter •

Can you explain what you mean by 'our side have a different approach where we have a flat tax rate'?

7
StringerBullUndecided•

Our side have a different approach where we have a flat tax rate.

Do you understand that a flat tax is inherently regressive?

My opinion is that if everyone and every business had skin in the game, then we'd be more risk-averse and far less interventionist with respect to shitholes around the world.

I'm not following your logic. Also, do you view risk as always a bad thing? What are the "shitholes" you're referring to. Do you think it is a little unbecoming to start throwing that term around, especially when the United States has plenty of problems of its own and ranks pretty poorly against other countries on several different outcomes? Do you think countries that rank better should start referring to the US as a shithole?

5
jackbootedcyborgTrump Supporter•

Do you understand that a flat tax is inherently regressive?

A percentage is by its nature not regressive. A flat percentage automatically scales. It is inherently progressive, since the rich pay a greater amount of money than the poor.

A regressive tax would be if somehow the poor paid more in taxes than the rich. (I don't even know how that could work).

0†
StringerBullUndecided•

This just goes to show that you don't have a basic understanding of economics, no offense intended.

Do you understand what marginal utility is?

5
jackbootedcyborgTrump Supporter•

https://www.investopedia.com/terms/r/regressivetax.asp

A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners.

https://www.investopedia.com/terms/f/flattax.asp

A flat tax system applies the same tax rate to every taxpayer regardless of income bracket.

As you can see - a flat tax does not fit the definition of a regressive tax, since the rich are taking the same percentage based on income.

However, I've got to be honest, ANY tax where the rich are paying more simply because they earned more seems progressive to me, but that's fine if I'm just wrong on the definitions. It seems strange and arbitrary to ask people to pay more taxes just because they earned more. That doesn't seem fair at all. I don't really understand how we came up with that idea.

2†
j_laNonsupporter•

The rich pay a greater absolute amount, but the poor pay a greater share of what they have, when it comes to sales taxes. Thus, isn’t the individual burden to poor people greater than it is to the rich, making it regressive?

If you make 10,000 a year and I make 10,000,000, the tax we pay to fill our cars up with gas hits you harder than it hits me, but we each need to fill up the car to get to work and can’t avoid it.

Meeting basic needs, non-negotiable needs is easier for the rich. As we move out of the necessities and into the realm of luxuries, there is less pressure. Sure, buying a Ferrari would generate a lot of absolute tax revenue, but it is easy enough to choose to not spend that money. A poor person can’t choose whether they eat or not (well, no person can, but filling those needs brings the poor to the point of pressure far sooner).

3
jackbootedcyborgTrump Supporter•

The rich pay a greater absolute amount, but the poor pay a greater share of what they have, when it comes to sales taxes.

You're accidentally confused because someone switched the topic a couple comments up.

In this particular chain we are discussing a Flat Tax, which is where every person is taxed a flat percentage income tax (as opposed to having tax brackets that preferentially charge some people higher percentages than others).

So, let's say it's a 10% flat tax -

Someone who makes 10,000 a year would pay $1k in taxes, if you make 10,000,000, you would pay 1,000,000 in taxes.

1
PaxAmericana2Trump Supporter•

Do you understand that a flat tax is inherently regressive?

Personal responsibility is the key. The poor, in the US, stay poor because of their own choices. The safety net is for the invalid, elderly, and injured. Subsidy of the underclass is an awful persuasive argument for the government to steal more money from the people actually paying taxes.

do you view risk as always a bad thing?

Of course not. That's why I didn't write that.

What are the "shitholes" you're referring to.

Show me where we're intervening, I'll show you a shithole.

Do you think it is a little unbecoming...

The opinion of the shithole makes little difference to our glorious country.

-7
isthisreallife333333Nonsupporter•

Just to confirm, you don't mind if there are numerous more homeless walking the streets, lining your route to work each day, begging you for money, etc?

2
PaxAmericana2Trump Supporter•

The hell? Do you think I commute through a favela daily?

0
[deleted]•

[removed]

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[deleted]•

[removed]

1
j_laNonsupporter•

Why are the handouts a bad thing if everyone gets them?

1
iMAGAnationsTrump Supporter•

If the govt has extra money from me paying taxes then they should lower the tax rates, not give my money to somebody else.

1