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Would it be a good idea to replace the sales tax with a flat rate "luxury" tax?
yes
Side Score: 11
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no
Side Score: 12
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Why not just have a flat tax rate on all commodities The poorer you get, the greater proportion of your income you must spend on consumption. Some of these goods are simply demanded to keep people fed. Taxing all commodities puts much more duress on the middle and lower classes. instead of favoring some companies over others by applying different tax policies to different products I think that you mean for the purpose of favoring certain industries over the other? I suppose that for some this might be enough, but I'd favor it as an incentive to save whatever wealth isn't spent on necessaries. Side: yes
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The poorer you get, the greater proportion of your income you must spend on consumption. Some of these goods are simply demanded to keep people fed. Taxing all commodities puts much more duress on the middle and lower classes. It wouldn't put much more duress on the middle and lower classes if the tax rate was reasonable. I suppose that for some this might be enough, but I'd favor it as an incentive to save whatever wealth isn't spent on necessaries. What do you mean by save wealth? Side: no
It wouldn't put much more duress on the middle and lower classes if the tax rate was reasonable. (Define reasonable?) We don't have a flat tax on all commodities, largely because that would include all services as well. On goods it varies, as some nations do discriminate in which physical goods to tax. What do you mean by save wealth? You have to produce goods to receive cash, you need cash to demand "luxury" items, by not demanding those goods you're holding onto your fruits of labor, although it could be invested or spent on something else later, it must always be saved from expenditure first for that to happen. Thus, you are saving. Side: yes
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(Define reasonable?) Well, I don't think a reasonable or unreasonable rate is something that can really be defined. There's a lot of gray area, but I feel that a 3-6% tax would be reasonable. We don't have a flat tax on all commodities, largely because that would include all services as well. On goods it varies, as some nations do discriminate in which physical goods to tax. Couldn't you solve that by just having a flat tax on transactions? All sales and services would fall under the same policy then. Side: no
Well, I don't think a reasonable or unreasonable rate is something that can really be defined. There's a lot of gray area, but I feel that a 3-6% tax would be reasonable. Just because a pitfall is shallow does not mean that it's reasonable to have it there in the first place. Couldn't you solve that by just having a flat tax on transactions? All sales and services would fall under the same policy then. How would that incentivize any particular type of consumption or saving to occur? They certainly would fall under the same policy, I do not place an emphasis on this. Even still, this is going beyond my point of wanting to keep division of income gravitated towards savings, by way of keeping it from "luxury" items. Taxing all transactions would not incentivize this, it would only have gov't treat everyone equally in rate of taxation. The sales tax rate is well below the income tax rate, if we were to equalize them, then the lower classes would be getting less gov't funds for ever dollar that they pay in taxes. Side: yes
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How would that incentivize any particular type of consumption or saving to occur? People have their own personal consumption/saving habits. I'm not attempting to incentives any particular financial policy, what people do with their money is their business, not mine. Even still, this is going beyond my point of wanting to keep division of income gravitated towards savings, by way of keeping it from "luxury" items. And why should it be kept away from luxury items? If a nation is able to export luxury items to foreign nations at cost higher than that of the cost of production and resources why take a dislike to the industry? If the industry is bringing more wealth and activity to the economy, intern giving people more money to save, then what is the reason for going against it. The sales tax rate is well below the income tax rate, if we were to equalize them, then the lower classes would be getting less gov't funds for ever dollar that they pay in taxes. Your point? If the lower class is producing less wealth than the middle and upper classes how is fair that the middle and upper classes have to pay a higher percentage to the government, especially when the government is using to essentially subsidize poverty? Side: no
People have their own personal consumption/saving habits. I'm not attempting to incentives any particular financial policy, what people do with their money is their business, not mine. They do, but you're missing my point. The richer someone is, the greater proportion of their income that they save. Nations with higher mean (and median) incomes have residents that save a greater proportion of their wealth. As for the point that it's their business, this is turning matters into a discussion of morality. "people have their own personal consumption/saving habits" only focuses on a very small aspect of this. This is by and large irrelevant. And why should it be kept away from luxury items? If a nation is able to export luxury items to foreign nations at cost higher than that of the cost of production and resources why take a dislike to the industry? When did I say that I dislike such industries because they are able to prosper? If the industry is bringing more wealth and activity to the economy, intern giving people more money to save, then what is the reason for going against it. The reason for going against it is that expenditure on these goods encourages the fruits of labor to be consumed, rather than reinvested to produce more goods. Your point? If the lower class is producing less wealth than the middle and upper classes They're not producing less wealth, they've just failed to develop skills where there is a generous amount of demand compared to supply. how is fair that the middle and upper classes have to pay a higher percentage to the government It's not fair at all, did I say that it is? Is gov't treating all individuals equally something that you value? especially when the government is using to essentially subsidize poverty? Unless you're sure that want to get into a long drawn out debate about this, I'm just going to agree to disagree with you here. Side: yes
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Unless you're sure that want to get into a long drawn out debate about this, I'm just going to agree to disagree with you here. I think I'm going to agree to disagree as well. I really don't feel like getting into a long debate about something as trivial as tax incentives. Side: no
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Rich people but more, so they would pay more. Let me paint you a picture. A hypothetical picture: in America, the Fair tax has been enacted. All other taxation is gone. The Fair Tax is a National sales tax of 23%. I am low income. Pretend person Susie is high income. Since I buy less due to my financial status, I pay less in taxes. Susie pays more because she buys more. Even though I am low income, more of my money is left over due to taxation being limited so I can afford things better. It is easier to pay for food and supplies, healthcare and books, than in a non Fair Tax America. In our picture I am painting, America is more economically stable because their is more economic freedom while providing just enough for a civil society. Side: no
Rich people but more, so they would pay more. They would not be paying a greater ratio of their income. A hypothetical picture: in America, the Fair tax has been enacted. All other taxation is gone. The Fair Tax is a National sales tax of 23%. Mkay. I am low income. Pretend person Susie is high income. Since I buy less due to my financial status, I pay less in taxes. Susie pays more because she buys more. You do pay less, but not in respect to the ratio of money spent on consumption to your income. Even though I am low income, more of my money is left over due to taxation being limited so I can afford things better. Yes, it is. And more of the upper class's money is left over to, you know, not pay for free stuff for everyone else. It is easier to pay for food and supplies, healthcare and books, than in a non Fair Tax America. Let's break out some numbers 1) US gov't taxes ~25% of GDP. 2) The GDP is 15.68 trillion. 3) ~65% of these taxes are social services that can be assumed to be placed squarely on the bottom 50% of income earners. 4) 25% of 15.68 trillion is 3.92 trillion (gov't "size") 5) So, 65% of this is 2.55 trillion 6) 2.55 trillion/150,000,000 is ~26k That's.... 17k (per person on average) that the bottom half of america is receiving each year in social services. And we apparently need to do away with all of that and tax them to a degree that would definitely be higher than before. What you are asking for is to literally do away with this and replace if with a system that taxes 23% of what they spend on most everything, to operate gov't on presumably only a rather small fraction of our military. This is like 50% more awful than I thought it would be when I picked up the calculator. In our picture I am painting, America is more economically stable because their is more economic freedom while providing just enough for a civil society. I'm not trying to be mean here, but... This is the sort of stuff that would cause civil war. This is completely unrealistic. ~~~~~~~~~~~~~~~~ (You're talking to an ex-libertarian) ~~~~~~~~~~~~~~~~ Side: yes
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False cause fallacy. Libertarian beliefs do not cause civil war, tyranny does. You what? I didn't say that the proposition is wrong because it is clearly a libertarian one. It's wrong for reasons that I already illustrated. Tyranny does often lead to civil war, bu it's worth noting that it's not the only thing that does. Side: yes
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