[clue-talk] Fair Tax

[Nate Duehr]

David Rudder wrote:
> This sounds a lot like the "Flat Tax" proposals that we've seen 
> recently.  I have the same problems with the so-called "Fair Tax" as 
> with the "Flat Tax".
> 
> 1) It's a regressive tax.  People with less income spend more of it, so 
> more would be taxed.  This is hardly fair.

Agreed.  It would be better to drop the loopholes for the ultra-rich, 
but that's not going to happen anytime soon.

> 2) The "loopholes for special interests" that the website is so 
> concerned with affect me.  I'm 3 special interest groups rolled into one;
>    *) A parent

As a non-parent, and in the minority, I'll never "win" this argument, 
but tax breaks for people who can't bother to make enough money to 
support their own children is ridiculous, and always will be.  Or maybe 
that's too harsh:  Let's say that they did plan and they CAN afford 
children without tax breaks -- is it then my social duty pay more to 
increase their standard of living???

Choose to have children, lower your standard of living... that should be 
the correct consequence to the action.  You took on a huge fiscal 
responsibility by having sex.  Your problem, not mine.

Under the current system, I'm happy to pay more in taxes to keep 
children from growing up to be idiots that I have to support (who also 
get a tax break when they have children) via education spending, but I'd 
like to see some proof that it garners results.  Cherry Creek school 
district sends me nice glossy "reports" on their status every year in 
multiple colors with lots of layout work, something that looks akin to a 
modern magazine.  Is that expense really justified?  How about a black 
and white document printed on paper, and a way to opt-out of having it 
sent at all?  (I can read it at the library, and anyone seriously 
interested in education can also.)

Most parents seem to be more interested in making sure their kids get to 
extracurricular activities vs. getting good grades and making something 
of themselves in the world.  This is a generalization, but the stories 
come out time and time again that kids who do "big things" do so because 
their parents EXPECTED them to.  The interview yesterday with Clarence 
Thomas on Rosen's show on KOA was yet another example.

The majority seem to know the kids will do "well enough" to pay for the 
same loans and debt that they are, so they leave it at that.  Teaching 
kids to stay debt-free (or even to balance a budget) and teaching what 
the level of work necessary to do that will be, in order to get ahead, 
gets little traction in modern education.

My wife's mom worked in an alternative public school for un-wed teenage 
mothers for many years.  They hated being told that they had to learn to 
balance their budgets and that their choices (and the choices of the 
slack-ass "fathers" who weren't around anymore, of course) had major 
financial consequences and that they couldn't have all the things their 
friends have anymore.  The only person telling them this, was the 
teachers.  Where these girls parent's heads were (most had parents and 
were living with them, but obviously the parents were not teaching 
anything useful as far as life skills go -- as evidenced by the pregancy 
in the first place, I suppose), was anyone's guess...

You would have thought she was the Wicked Witch of the West for even 
mentioning that a parent's lifestyle couldn't match that of a non-parent 
at the same age.

As people get older, this sentiment becomes even stronger in our 
culture, for some reason.  Parents talk about "sacrifice" and I'm 
certain it's there... no doubt!  But it's cushioned by our society, and 
I contend un-fairly so.  (But as my fiscal mentor taught me... "There 
goes another person, trying to make life fair.  Isn't that nice?"  He 
retired with enough money to support himself to 91 years old, at age 56.)

I don't find it particularly "fair" that people who choose (or don't 
have a choice) not to have children have to shoulder more of the tax 
burden overall, for things like infrastructure.

The only good news for me (another "special interest group") is that 
someone somewhere decided that saving for retirement is also a good 
reason to get out of the majority of your taxes... so I can plow money 
into tax-deferred systems set up for that, and hopefully make it to 
whatever ripe old age that the legislature deems "retirement age" so I 
get a discount on those taxes, lifetime wise.  I'm taking advantage of 
that.  But here's a wild idea...

I'd give up the retirement tax break if all the parents also gave up 
their dependent tax breaks... if I thought the politicians would 
actually pay of the U.S. debt and lower taxes as a result.  (Not going 
to happen, so ... as you say... why change a broken system for a broken 
system?)

>    *) A home owner

Another fallacy -- only a very small percentage of Americans actually 
OWN their home.  A mortgage is not real "home ownership", it's just 
leveraging debt with an asset you don't own yet.  It's renting to own.

The only way to "win" the rent to own game is to keep your house VERY 
modest, and pay on it the majority of your adult life.

(And yeah, I'm in that boat too.)

Henry Ford was a genius... people typically bought cars for cash before 
Ford started offering installment payments... and the rest, as they say, 
is history.  Americans don't even flinch when presented with the option 
of driving a beater that's paid off, or taking out a $20,000 loan over 
five to six years, nowadays.  (Car loans keep getting longer, and longer...)

>    *) A small business owner

This one I might agree with, given the track record of large corporations.

Small businesses on average, tend to give better service on products 
that are below a certain price point.  Above that point, they can't 
adequately service the customer, and have to become a large business.

But on the flip side, it's just a game again... like the children.  If 
you can't afford to run a business without tax breaks, the business 
shouldn't be in business.

> 3) We want to *encourage* spending, not *discourage* it.  Granted, the 
> same thing can be said about income, but the purpose of replacing an 
> existing system is to do something *measurably better*.   Replacing bad 
> with bad doesn't make much sense.

Encourage spending of one's own money earned, or of loaned money?

That's the ultimate long-term problem facing the U.S. -- Will our dollar 
continue to fall because its perceived worth continues to drop in the 
world monetary market?  No offense to my Aussie friends, but when 
Australia is kicking your ass on the world monetary stage, something big 
is happening that not too many folks are paying attention to.  Or are 
hiding from and/or ignoring... depending on how observant they are.

http://feedthepig.org

Nate