I stopped by the doctor's office to see that all my immunizations were up to date, then went off to attend one of Congressman Bridenstein's town hall meetings. This one was in Owasso. There are more scheduled.
He made some brief remarks, then took written questions. It was the usual litany of complaints: Obamacare, gun control, immigration, and taxes. The latter brought up an unusual exchange about the Fair Tax proposal. Bridenstein supports it. The idea is to eliminate nearly all federal taxes; income, capital gains, corporate taxes, inheritance, and so on. According to the congressman, this would cause prices to go down by 23%, so by substituting a national sales tax of 23%, we can both eliminate federal taxes and keep prices the same. It's astounding in its simplicity, and that very simplicity is appealing to our low information electorate. They turned out in force for this meeting, almost uniformly elderly and 100% white.
I pointed out that he voted against federal disaster funds for the northeast after its devastating storm, and asked if he would vote against similar disaster funds for Oklahoma. After a long riff about the problems faced by the federal flood insurance program, he conceded that if a disaster relief bill for Oklahoma had provisions he opposed (mass transit seems to be a favorite target) he would oppose relief here too. But the signal was nearly drowned in the noise and the concession was quickly passed over.
Oh, one of the questions was about 'forcing' those 48% who do not pay taxes to pay at least 10% of their income. On one hand, these folks object to the federal government 'forcing' them to pay their own taxes, yet happily propose using federal power to make others do so. It's a wonderment.
So I've had more than my share of Alice-In-Wonderland surrealism for this week.
Sounds like it is about what I expected for that clown.
Heard some of those same lies being rehashed there during the 'right to work' campaign. The big thing then was how it was going to lead to raises - higher pay - all around to the tune of 50 to 100% or more!! Several of the guys I worked with at the time actually believed that carp, and spread it around trying to convince all who worked there that it was true!!
After the election, I waited a reasonable time - about 5 months - then asked by boss about those increases he had said were going to occur. Wanna guess how that worked out...?
I actually like Fair Tax (but I don't buy that prices will go down 23%, prices never go down)
What I do buy is that a proper Fair tax only places a tax on new goods and services, excluding necessities like groceries and medical care. By doing this it will mean that the tax very much effects the "haves" more than the "have nots" and the "haves" will be paying far more in taxes than they do now.
Not saying that their aren't eleventy billion ways this could go wrong, just saying it's a good idea in principle.
Quote from: sgrizzle on February 19, 2013, 07:41:38 AM
I actually like Fair Tax (but I don't buy that prices will go down 23%, prices never go down)
What I do buy is that a proper Fair tax only places a tax on new goods and services, excluding necessities like groceries and medical care. By doing this it will mean that the tax very much effects the "haves" more than the "have nots" and the "haves" will be paying far more in taxes than they do now.
Not saying that their aren't eleventy billion ways this could go wrong, just saying it's a good idea in principle.
You are wanting a European style VAT tax then
Quote from: swake on February 19, 2013, 08:11:37 AM
You are wanting a European style VAT tax then
...which is in-addition to the other taxes.....
Quote from: Ed W on February 18, 2013, 08:04:58 PM
So I've had more than my share of Alice-In-Wonderland surrealism for this week.
Nah, just one more:
The high court ruled unanimously that a Florida police officer's use of a drug-sniffing dog to search a truck during a routine traffic stop was appropriate, even though the drugs found were not what the pooch was trained to detect.http://www.usatoday.com/story/news/nation/2013/02/19/supreme-court-drug-sniffing-dog/1930219/
He must be friends with Neil Boortz. I also like the Fair Tax proposal. It just won't ever happen because it makes sense.
The fact that it makes sense is only partially the reason it will never happen. Fair or usage based taxes threaten the core modern American politics. Currently people are not required to acknowledge what their taxes pay for or the amount of tax taken from them every day in the form of payroll taxes. In fact, most voters are strikingly ignorant of government, its programs, and the amount of money spent. Many actually view a tax refund as somehow "making money" and actually are willing to brag about the fact that "they got $XXXX from the government this year," instead of being embarrassed for miscalculating what they should have been paying.
Fair or usage based taxes force ALL consumers to be tax payers, and the disparity between price and price+tax forces them to be more aware of their government system and the value of what they are paying for. It also forces politicians to design programs and platforms that provide the best value for the money they will request, instead of burying or embedding expenses. Usage taxes are very visible and changes or fluctuations cannot be manipulated or shifted to other members of the population through thousands of deductions, loopholes, and witholding tricks.
This level of transparency threatens the way our politicians have learned to game the system. It would cause a mostly ambivalent population to take an unwelcome interest in politics.
Quote from: Gaspar on February 19, 2013, 01:58:23 PM
Usage taxes are very visible ...
They can be disguised somewhat by forcing merchants to display only the tax included price.
:(
Quote from: Red Arrow on February 19, 2013, 02:10:51 PM
They can be disguised somewhat by forcing merchants to display only the tax included price.
:(
The idea is to reduce "force." :)
Quote from: Gaspar on February 19, 2013, 02:19:05 PM
The idea is to reduce "force." :)
Good luck with that.
Only 93 million income tax payers will see a tax increase with the Fair Tax. But hey, 9 million people will get a cut. Why not do it?
Anyway, as I've said before, I can't really support it, although I could with a sufficiently large "pre"bate for people on the low end of the income scale.
Quote from: nathanm on February 19, 2013, 04:26:51 PM
Only 93 million income tax payers will see a tax increase with the Fair Tax. But hey, 9 million people will get a cut. Why not do it?
Anyway, as I've said before, I can't really support it, although I could with a sufficiently large "pre"bate for people on the low end of the income scale.
I could do with the Oklahoma state tax withholding tables to have something remotely to do with actual state tax rates.
Quote from: sgrizzle on February 20, 2013, 06:45:37 AM
I could do with the Oklahoma state tax withholding tables to have something remotely to do with actual state tax rates.
BWAHAHAHAHA!
Fair Tax is 30%, not 23%
A $1 Can o' Corn would be $1.30 under that scheme (prior to state & local sales tax)
The BS spin is that 30 cents is 23% of $1.30
After all of the other unintended consequences of a 30% sales tax, we would probably end up cannibalizing state & local revenues in protest of high taxation. Currently the city and state rely heavily on sales tax to fund crucial services. What happens when we are paying 38.517% sales tax and the third penny comes up for vote?
Quote from: YoungTulsan on February 20, 2013, 11:39:05 AM
Fair Tax is 30%, not 23%
A $1 Can o' Corn would be $1.30 under that scheme (prior to state & local sales tax)
The BS spin is that 30 cents is 23% of $1.30
Got a link for the claim that the price would be $1.30 instead of $1.23?
State and local sales tax should get on your bandwagon. Something costing $100.00 should be jacked up to $109.31 instead of $108.52. $9.31 is 8.517% of $109.31.
http://www.factcheck.org/taxes/unspinning_the_fairtax.html
Even the FairTax Troy McClure Q & A page admits this 75 pages down...
http://www.fairtax.org/site/PageServer?pagename=about_faq_answers
QuoteI know the FairTax rate is 23 percent when compared to current income and Social Security rate quotes. What is the rate of the sales tax at the retail counter?
30 percent. This issue is often confusing, so we explain more here.
When income tax rates are quoted, economists call that a tax-inclusive quote: "I paid 23 percent last year." For every $100 earned, $23 went to Uncle Sam. Or, "I had to make $130 to have $100 to spend." That's a 23-percent tax-inclusive rate.
We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
Quote from: Gaspar on February 19, 2013, 01:58:23 PM
The fact that it makes sense is only partially the reason it will never happen. Fair or usage based taxes threaten the core modern American politics. Currently people are not required to acknowledge what their taxes pay for or the amount of tax taken from them every day in the form of payroll taxes. In fact, most voters are strikingly ignorant of government, its programs, and the amount of money spent. Many actually view a tax refund as somehow "making money" and actually are willing to brag about the fact that "they got $XXXX from the government this year," instead of being embarrassed for miscalculating what they should have been paying.
Fair or usage based taxes force ALL consumers to be tax payers, and the disparity between price and price+tax forces them to be more aware of their government system and the value of what they are paying for. It also forces politicians to design programs and platforms that provide the best value for the money they will request, instead of burying or embedding expenses. Usage taxes are very visible and changes or fluctuations cannot be manipulated or shifted to other members of the population through thousands of deductions, loopholes, and witholding tricks.
This level of transparency threatens the way our politicians have learned to game the system. It would cause a mostly ambivalent population to take an unwelcome interest in politics.
Let's look at the math. The top 1% of wage earners earn 20% of the total income earned in the US (and hold 80% of the wealth) and currently will pay an effective tax rate (post tax increase) of about 39%. Currently the bottom 45-50% of tax payers pay little or no income taxes but do pay 17% of their income on payroll taxes.
Under this 23% plan the top tax payers will see their taxes fall almost by half. In 2010 the top 1% paid 37% of all taxes, which should go up with the recent tax increases on the rich. But, if you cut their tax rate by 41% (39% down to 23%) you will lose more than 15% of total revenue. Where is the government going to make up that money? By raising everyone else up to 23%, or 30% or whatever. Last year the feds got 2.45 Trillion in tax revenue. A 15% cut in federal tax revenue would be cut of $368 billion a year right into the pockets of the wealthiest Americans and that money is going to have to be made up somewhere. 99% of American would be shouldering a $368 billion tax increase.
That would be an increase in taxes of $1,172 per person for every single person in the bottom 99%, every year. How many people you have in your family Gasp? Think about that.
Math is fundamental.
Quote from: Red Arrow on February 20, 2013, 12:12:46 PM
Got a link for the claim that the price would be $1.30 instead of $1.23?
State and local sales tax should get on your bandwagon. Something costing $100.00 should be jacked up to $109.31 instead of $108.52. $9.31 is 8.517% of $109.31.
The opponents of the fair tax always try to confuse the issue (by using the inclusive method) when comparing Fair tax to Income tax, however sales taxes are always calculated using the "exclusive" method, just as we do today. So the sales tax (under a fair tax system) would indeed be calculated at 30% at the reatail counter (which is exactly 23% of the income used to pay for such goods and services).
This is how it is explained:
When income tax rates are quoted, economists call that a tax-inclusive quote: "I paid 23 percent last year." For every $100 earned, $23 went to Uncle Sam. Or, "I had to make $130 to have $100 to spend." That's a 23-percent tax-inclusive rate.
We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
Sales taxes, on the other hand, are generally quoted tax exclusive: "I bought a $77 shirt and had to pay that same $23 in sales tax." This is a 30-percent sales tax. Or, "I spent a dollar, 77¢ for the product and 23¢ in tax." This rate, when programmed into a point-of-purchase terminal, is 30 percent.
Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100.
Spend that same $100 under a sales tax, you pay that same tax of $30, and the rate is quoted as 30 percent.
Perhaps the biggest difference between the two is that under the income tax, controlling the amount of tax you pay is a complex nightmare.
So, Fair Tax is a 23% tax as compared to the income tax you pay now, but the biggest difference is that you get to decide wether or not to spend that money, and you cannot avoid paying taxes or take advantage of loopholes, deductions, or other methods to escape tax liability.
(http://www.fairtax.org/images/content/pagebuilder/10456.jpg)
The very simplicity of the system is the biggest threat to politicians.
Quote from: YoungTulsan on February 20, 2013, 12:20:51 PM
http://www.factcheck.org/taxes/unspinning_the_fairtax.html
Even the FairTax Troy McClure Q & A page admits this 75 pages down...
http://www.fairtax.org/site/PageServer?pagename=about_faq_answers
QuoteWe choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.
At least they admit they are playing the semantics game, even if it is on page 75 where no one will look. I disagree with their logic since income taxes are taken from what you have already made rather than added to what you make.
It may still be a better deal overall but I would insist on not taxing some items like food, clothing, and prescription drugs. Determining which items would be tax free would incur some bureaucracy, lobbying and corruption but probably no where near as much as the present system. A tax pre-bate like some suggest would most likely not reduce the bureaucracy much, if any, since each individual taxpayer's income would still need to be determined. Additionally, would a pre-bate need to be returned if ones financial condition improved during the year? Pre-bates would be a whole new tax industry to replace the one we presently love so well.
Edit:
A tax pre-bate for everyone, without means testing, would not last 37 nanoseconds.
Quote from: Gaspar on February 20, 2013, 12:35:50 PM
(http://www.fairtax.org/images/content/pagebuilder/10456.jpg)
The very simplicity of the system is the biggest threat to politicians.
So simple they didn't use the much simpler you make $130 you keep $100 comparison because it more easily shows people that it is 30% than the 77/23 split.
Quote from: swake on February 20, 2013, 12:31:50 PM
Let's look at the math. The top 1% of wage earners earn 20% of the total income earned in the US (and hold 80% of the wealth) and currently will pay an effective tax rate (post tax increase) of about 39%. Currently the bottom 45-50% of tax payers pay little or no income taxes but do pay 17% of their income on payroll taxes.
Under this 23% plan the top tax payers will see their taxes fall almost by half. In 2010 the top 1% paid 37% of all taxes, which should go up with the recent tax increases on the rich. But, if you cut their tax rate by 41% (39% down to 23%) you will lose more than 15% of total revenue. Where is the government going to make up that money? By raising everyone else up to 23%, or 30% or whatever. Last year the feds got 2.45 Trillion in tax revenue. A 15% cut in federal tax revenue would be cut of $368 billion a year right into the pockets of the wealthiest Americans and that money is going to have to be made up somewhere. 99% of American would be shouldering a $368 billion tax increase.
That would be an increase in taxes of $1,172 per person for every single person in the bottom 99%, every year. How many people you have in your family Gasp? Think about that.
Math is fundamental.
That would be fairly correct without the prebate. With the prebate however the scale actually looks like this for the various income groups.
Under the FairTax, all Americans consume what they see as their necessities of life free of tax. While permitting no exemptions, the FairTax (HR25/S122) provides a monthly universal prebate to ensure that each family unit can consume tax free at or beyond the poverty level, with the overall effect of making the FairTax progressive in application. There is no marriage penalty as the couple gets twice the amount that a single adult receives.
While everyone pays the same tax rate at the cash register, the prebate results in effective tax rates (annual taxes paid divided by annual spending) that increase as the level of spending increases a progressive tax rate structure. For example, a person spending at the poverty level has a 0% effective tax rate, whereas someone spending at twice the poverty level has an effective tax rate of 11.5%, and so on.
(http://www.fairtax.org/images/prebatefigure1.png)
Additionally:
Most people are paying that much or more today -- much of it is just hidden from view. The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. That's 23 percent right there, without taking into account the 7.65 percent employer matching! On top of that, you have to add in the business taxes and associated compliance costs passed on to consumers in higher prices.
Effective tax rates vs. stated tax rates
Because the 23-percent FairTax rate of $0.23 on every dollar spent is not imposed on necessities, an individual spending $30,000 pays an effective tax rate of only 15.5 percent, not 23 percent. That same individual will pay 17.3 percent of his or her income to federal taxes under current law. See effective tax rates for a family of four at various spending levels in Figure 2.
Math
is fundamental.
Quote from: Gaspar on February 20, 2013, 12:43:54 PM
That would be fairly correct without the prebate. With the prebate however the scale actually looks like this for the various income groups.
Under the FairTax, all Americans consume what they see as their necessities of life free of tax. While permitting no exemptions, the FairTax (HR25/S122) provides a monthly universal prebate to ensure that each family unit can consume tax free at or beyond the poverty level, with the overall effect of making the FairTax progressive in application. There is no marriage penalty as the couple gets twice the amount that a single adult receives.
While everyone pays the same tax rate at the cash register, the prebate results in effective tax rates (annual taxes paid divided by annual spending) that increase as the level of spending increases a progressive tax rate structure. For example, a person spending at the poverty level has a 0% effective tax rate, whereas someone spending at twice the poverty level has an effective tax rate of 11.5%, and so on.
(http://www.fairtax.org/images/prebatefigure1.png)
Additionally:
Most people are paying that much or more today -- much of it is just hidden from view. The income tax bracket most people fall into is 15 percent, and all wage earners pay 7.65 percent in payroll taxes. That's 23 percent right there, without taking into account the 7.65 percent employer matching! On top of that, you have to add in the business taxes and associated compliance costs passed on to consumers in higher prices.
Effective tax rates vs. stated tax rates
Because the 23-percent FairTax rate of $0.23 on every dollar spent is not imposed on necessities, an individual spending $30,000 pays an effective tax rate of only 15.5 percent, not 23 percent. That same individual will pay 17.3 percent of his or her income to federal taxes under current law. See effective tax rates for a family of four at various spending levels in Figure 2.
Math is fundamental.
If this is to be revenue neutral and you cut the taxes of the top 1% by 40% which removes 15% of total federal revenue, or whatever cut you give them, the other 99% have to pay more to make up for the loss in revenue. Prebates or not, everyone else is going to have to pay more. It's really simple.
Quote from: swake on February 20, 2013, 12:51:33 PM
If this is to be revenue neutral and you cut the taxes of the top 1% by 40% which removes 15% of total federal revenue, or whatever cut you give them, the other 99% have to pay more to make up for the loss in revenue. Prebates or not, everyone else is going to have to pay more. It's really simple.
The super wealthy aren't filling the IRS's coffers with taxes off of wages on a W2 form. A sales tax would actually ensure that there would be no loophole, trust, charity, whatever to launder wealth around. You buy something you pay in. What about capital gains?
Quote from: swake on February 20, 2013, 12:31:50 PM
Let's look at the math. The top 1% of wage earners earn 20% of the total income earned in the US (and hold 80% of the wealth) and currently will pay an effective tax rate (post tax increase) of about 39%.
What happened to the richest 1% paying a less effective rate than Warren Buffet's secretary? (Or is WB's secretary better paid than we are led to believe?)
Quote from: swake on February 20, 2013, 12:51:33 PM
If this is to be revenue neutral and you cut the taxes of the top 1% by 40% which removes 15% of total federal revenue, or whatever cut you give them, the other 99% have to pay more to make up for the loss in revenue. Prebates or not, everyone else is going to have to pay more. It's really simple.
Top earners, and businesses will indeed enjoy a lower rate of taxation. In fact tax payers at all levels will enjoy a lower total effective tax rate, however the revenue generated remains the same, because more taxes will actually be collected. There are a great many who pay no income tax now. In fact that is nearly half of the population. Of the "Top 1%ers" you speak of, many of them are businesses who escape paying taxes in many ways, and others are extremely wealthy people who claim NO annual income or use various shelters and trusts to exempt their income from taxation. Under a Fair Tax they too would pay taxes on the goods and services they purchased. There would be no new Mercedes S550 purchased every year under the family trust, without the payment of a 30% sales tax.
Everyone, except those at or below the poverty level, will not only be expected to pay their Fair Share, they will have no way to escape it.
Quote from: Gaspar on February 19, 2013, 01:58:23 PM
The fact that it makes sense is only partially the reason it will never happen. Fair or usage based taxes threaten the core modern American politics.
Interesting how you refer to something as "modern" American that began 100 years ago....
Quote from: Red Arrow on February 20, 2013, 01:03:50 PM
What happened to the richest 1% paying a less effective rate than Warren Buffet's secretary? (Or is WB's secretary better paid than we are led to believe?)
That's not on wages. Romeny's effective tax rate was more like 15% for example due to capital gains and deferments.
His admin making say 60k would pay 17% payroll tax on everything and depending on deductions may 10-15% on most of the rest. Probably an effective total rate of ~30% or something like that.
Quote from: Gaspar on February 20, 2013, 01:15:42 PM
Top earners, and businesses will indeed enjoy a lower rate of taxation. In fact tax payers at all levels will enjoy a lower total effective tax rate, however the revenue generated remains the same, because more taxes will actually be collected. There are a great many who pay no income tax now. In fact that is nearly half of the population. Of the "Top 1%ers" you speak of, many of them are businesses who escape paying taxes in many ways, and others are extremely wealthy people who claim NO annual income or use various shelters and trusts to exempt their income from taxation. Under a Fair Tax they too would pay taxes on the goods and services they purchased. There would be no new Mercedes S550 purchased every year under the family trust, without the payment of a 30% sales tax.
Everyone, except those at or below the poverty level, will not only be expected to pay their Fair Share, they will have no way to escape it.
Who will those "more taxes" be collected from? The great many who pay nothing still pay payroll taxes and the bottom 50% of earners only make something like 20% of the money in the US. There's not a lot there to take. If you give the rich back more money, someone has to make up for it.
Quote from: swake on February 20, 2013, 01:45:37 PM
Who will those "more taxes" be collected from? The great many who pay nothing still pay payroll taxes and the bottom 50% of earners only make something like 20% of the money in the US. There's not a lot there to take. If you give the rich back more money, someone has to make up for it.
You don't get it.
Quote from: swake on February 20, 2013, 01:40:37 PM
That's not on wages. Romeny's effective tax rate was more like 15% for example due to capital gains and deferments.
His admin making say 60k would pay 17% payroll tax on everything and depending on deductions may 10-15% on most of the rest. Probably an effective total rate of ~30% or something like that.
Then where did you get your 39% number?
Warren Buffett, Bill Gates, and Mit Romney will not be collecting Social Security benefits based on their entire income so it doesn't bother me at all when the payroll tax portion of their taxes becomes a number down in the dirt regarding their overall tax
rates. I know others here disagree.
Quote from: swake on February 20, 2013, 01:45:37 PM
If you give the rich back more money, someone has to make up for it.
It's magic. Actually, the idea is to switch over and then just cut spending enough at some point in the future to make it revenue neutral.
The problem with the income tax isn't the income tax itself, it's transfer pricing and other loopholes that allow the lucky duckies to "earn" their money in offshore trusts that don't get taxed. The wonder of stupid accounting tricks. Keep that in mind when companies complain about how much money they have "trapped" off shore. It's not generally that they're getting favorable tax treatment of their offshore manufacturing operations, it's that they "sold" all the business' IP to a shell company in Ireland or where ever that "charges" the real business almost all of its profit for use of said IP. It's a complete scam, but we continue to let them get away with it.
Quote from: Red Arrow on February 20, 2013, 02:17:33 PM
Then where did you get your 39% number?
Warren Buffett, Bill Gates, and Mit Romney will not be collecting Social Security benefits based on their entire income so it doesn't bother me at all when the payroll tax portion of their taxes becomes a number down in the dirt regarding their overall tax rates. I know others here disagree.
You only collect based on the amount you pay. And when that amount stops at just over $100,000, that is the basis used for calculation. If it was $200,000, then the benefit would be calculated on that amount.
Quote from: Gaspar on February 20, 2013, 01:56:30 PM
You don't get it.
I'm not the one not getting here, you are wanting something from nothing.
Quote from: Red Arrow on February 20, 2013, 02:17:33 PM
Then where did you get your 39% number?
Warren Buffett, Bill Gates, and Mit Romney will not be collecting Social Security benefits based on their entire income so it doesn't bother me at all when the payroll tax portion of their taxes becomes a number down in the dirt regarding their overall tax rates. I know others here disagree.
39% is the estimated new effective tax rate on wages for the top 1%. Romney made almost no wages.
Are non-tangible purchases "taxable" in the fair tax model?
Yacht = Taxable
Stock = Non-taxable
Quote from: swake on February 21, 2013, 09:24:43 AM
39% is the estimated new effective tax rate on wages for the top 1%. Romney made almost no wages.
So you are using a rate that almost no one will pay to argue that the 23% (30%) that almost everyone will pay will produce less income to the federal treasury than the 39% would.
Quote from: Red Arrow on February 21, 2013, 09:44:24 AM
So you are using a rate that almost no one will pay to argue that the 23% (30%) that almost everyone will pay will produce less income to the federal treasury than the 39% would.
So capital gains would be considered plain earnings in this plan? The Koch brothers would have kittens. This is their idea, and I don't believe that for a second.
Quote from: carltonplace on February 21, 2013, 09:41:32 AM
Are non-tangible purchases "taxable" in the fair tax model?
Yacht = Taxable
Stock = Non-taxable
Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax.
Since most of the stock market is comprised of individual retirement savings, this represents a huge boom to the average person.
Everyone's doing a great job of convincing themselves of their own opinions.
Has anyone switched?
Consider this: Facebook paid $0 in federal taxes this year (maybe even got a refund, depending which site you read) other than payroll contributions.
Under fair tax, Facebook would have paid taxes on every server they bought, every pen and every piece of office furniture. They wouldn't pay less because their IPO went bad. They wouldn't pay less because they created "quality jobs." They wouldn't pay less because they choose to lease and write the assets off as O&M expense. They would pay the set rate period.
Quote from: Townsend on February 21, 2013, 10:38:40 AM
Everyone's doing a great job of convincing themselves of their own opinions.
Has anyone switched?
I heard ttownclown goes both ways sometimes.
Quote from: swake on February 21, 2013, 09:54:01 AM
So capital gains would be considered plain earnings in this plan? The Koch brothers would have kittens. This is their idea, and I don't believe that for a second.
Capital gains? That makes it even more difficult to believe your 39% effective rate on the rich.
I believe the subject is a 23% (30%) consumption tax vs 39.6% marginal rate on taxable income above $400,000.00 for a person filing single. ($450,000 married filing jointly and $425,000. head of household). A single person with $399,999. of taxable income would pay approximately $116,163 in Fed Income Tax, or about 29%. Taxable income above $400,000 (single person) would be taxed at 39.6%. It would take a taxable income of (approx) $7,039,500 to get an overall rate of 39%. That's the upper reaches of the "1%ers".
Quote from: Red Arrow on February 21, 2013, 11:24:39 AM
Capital gains? That makes it even more difficult to believe your 39% effective rate on the rich.
I believe the subject is a 23% (30%) consumption tax vs 39.6% marginal rate on taxable income above $400,000.00 for a person filing single. ($450,000 married filing jointly and $425,000. head of household). A single person with $399,999. of taxable income would pay approximately $116,163 in Fed Income Tax, or about 29%. Taxable income above $400,000 (single person) would be taxed at 39.6%. It would take a taxable income of (approx) $7,039,500 to get an overall rate of 39%. That's the upper reaches of the "1%ers".
Red,
Those lower numbers are only convenient when talking about the evil rich not paying their fair share. It's the other way around for this argument. Duh!
Quote from: Gaspar on February 21, 2013, 12:28:25 PM
Those lower numbers are only convenient when talking about the evil rich not paying their fair share. It's the other way around for this argument. Duh!
I am frequently surprised with the number of folks that don't (appear) to understand how the tax brackets work.
Quote from: Gaspar on February 21, 2013, 10:20:35 AM
Investors prosper greatly under this plan, since corporations face lower operating costs and individuals have more money to save and invest. The reform significantly enhances the retirement savings and/or retirement spending power of most Americans. The purchase of stocks is considered a purchase for investment purposes and not personal consumption so they are purchased tax free. The service fees charged by the broker, however, are personal consumption and therefore subject to tax.
Since most of the stock market is comprised of individual retirement savings, this represents a huge boom to the average person.
So no tax on service purchases either, only on tangible goods.
Oil Filter <--23%
5W40 <--23%
Labor <--not taxable
Quote from: carltonplace on February 21, 2013, 03:01:00 PM
So no tax on service purchases either, only on tangible goods.
Oil Filter <--23%
5W40 <--23%
Labor <--not taxable
Geeze! Where do you get your info?
Oil Filter <--23%
5W40 <--23%
Labor <--23%
Services are taxed at the same rate.
Service providers are not exempt from the income tax today, and should not be exempt from the FairTax. Services now account for well over one-half of the gross domestic product (GDP). Neither consumption of services nor consumption of goods should be tax preferred. And it is economically foolish not to tax the fastest growing segment of our economy. Competition, not politics, should determine what goods and services cost.
Keep trying. Eventually you will find something that will stick.
Quote from: Gaspar on February 21, 2013, 10:20:35 AM
Investors prosper greatly under this plan, since corporations face lower operating costs
That's weird. I thought you said that corporate income tax was effectively paid by the company's customers through increased prices. Not sure how anyone's operating cost is going to be reduced if it's a revenue neutral scheme.
Quote from: nathanm on February 21, 2013, 04:04:13 PM
That's weird. I thought you said that corporate income tax was effectively paid by the company's customers through increased prices. Not sure how anyone's operating cost is going to be reduced if it's a revenue neutral scheme.
That's the fun part. The massive expenses corporations pay to comply with the federal tax code and payroll taxes is simplified. So while revenue remains neutral, operating expenses and the uncertainty that continuous changes in tax code produce are greatly decreased. Compliance costs also become far less of a burden for small businesses and emerging companies too.
Here's a way you can look at it. Currently Americans spend 6.6 billion hours per year filling out tax forms—including 1.6 billion hours on the 1040 form alone.
That represents about a hundred billion dollars (or more depending) injected back into the economy. Actually, even better, thats billions not taken out of the economy!
Also. . .when you think about it, all free market exchanges (both goods and services) produce value.
The only exchange that produces no value is one that is derived out of force (not free market). The time you spend doing taxes, or the money you spend on tax software, or the fees you pay for tax attorneys, and tax accountants, produces no value for you. It is a one-sided transaction. Sure the accountant, or software company makes money, as do the printers, and pulp mills that make the paper, but they do, not because you are gaining value from the service they provide, but because you are required to pay for their services through force.
In essence, compliance with the current tax code involves slavery.
Quote from: Gaspar on February 21, 2013, 04:52:30 PM
In essence, compliance with the current tax code involves slavery.
And of course, since corporations are good citizens, they'd pass along all those savings in the form of lower prices rather than use them to pad the bottom line, boost profits, and satisfy their shareholders.
I thought it was the Communists who were supposed to have an unrealistic ideal for human behavior.
Quote from: Ed W on February 21, 2013, 05:43:46 PM
And of course, since corporations are good citizens, they'd pass along all those savings in the form of lower prices rather than use them to pad the bottom line, boost profits, and satisfy their shareholders.
I thought it was the Communists who were supposed to have an unrealistic ideal for human behavior.
Haven't you heard? All the Communists are gone, so we are left with Gaspar for unrealistic ideals.
Quote from: Ed W on February 21, 2013, 05:43:46 PM
And of course, since corporations are good citizens, they'd pass along all those savings in the form of lower prices rather than use them to pad the bottom line, boost profits, and satisfy their shareholders.
I thought it was the Communists who were supposed to have an unrealistic ideal for human behavior.
The heck with being good citizens. They're dirty SOBs that want to steal their competition's business. The "first" guy will lower his price just a bit since he has now some margin to play with. Then the second guy will follow trying to steal business back. And so on until the real new price happens. I believe most businesses would rather have 10% of something than 15% of nothing. Of course this only works in a free market.
Quote from: Red Arrow on February 21, 2013, 06:33:08 PM
The heck with being good citizens. They're dirty SOBs that want to steal their competition's business. The "first" guy will lower his price just a bit since he has now some margin to play with. Then the second guy will follow trying to steal business back. And so on until the real new price happens. I believe most businesses would rather have 10% of something than 15% of nothing. Of course this only works in a free market.
You're describing the airline business and its race to the bottom. Each lowers their price in an attempt to gain market share until they reach an unsustainable level that doesn't offer much profit. Then they complain that they're paying too much in taxes, putting pressure on government to reduce their taxes even further.
How did the so-called free market produce the recent spike in gas prices when the price of crude continues to decline?
Quote from: Ed W on February 21, 2013, 08:00:03 PM
You're describing the airline business and its race to the bottom. Each lowers their price in an attempt to gain market share until they reach an unsustainable level that doesn't offer much profit. Then they complain that they're paying too much in taxes, putting pressure on government to reduce their taxes even further.
How did the so-called free market produce the recent spike in gas prices when the price of crude continues to decline?
Because we don't have free market capitalism. We have capitalistic monopolism.
Quote from: heironymouspasparagus on February 21, 2013, 06:30:01 PM
...so we are left with Gaspar for unrealistic ideals.
What about me? I'm unrealistic too.
Quote from: guido911 on February 21, 2013, 10:36:48 PM
What about me? I'm unrealistic too.
You're special....you have your own category. Way beyond unrealistic...it's that rarified atmosphere you breath....
That's an interesting concept worth further exploration.
On the one hand we have a progressive tax system comprised of over 6,000 pages of regulations, restrictions, and forms that cost our economy hundreds of billions in compliance costs, and required a bureaucracy of 106,000 employees. Each year we add to the code and increase the number of employees necessary to enforce that code by thousands. While this code represents a rather simple progressive rate structure, it provides hundreds of deductions, loopholes, and requirements, that when met, reduce total tax liability and revenue. Only the most wealthy and powerful have the resources to use the tax code to their advantage, and an estimated 60% of taxpayers are currently out of compliance, and criminals according to the IRS (http://www.guardian.co.uk/books/2010/feb/20/ten-rules-for-writing-fiction-part-one). Constantly, the current progressive tax code becomes a political tool because it's increasing complexity, and the opportunity it affords various groups to loot or pillage the productivity of other groups. Every time this happens the word "REFORM" is used, however the system never becomes easier to comply with, less expensive to implement, or less burdensome on the economy. In fact, the opposite happens.
On the other hand, there is this idea of a Fair tax, that would still remain progressive, and keep revenue at the same levels, but would put the tax code out of the reach of politicians, and corporate manipulation. It would, not by force, but by choice, cause everyone to pay their fair share based on the share of the economy they participate in. It would emancipate 6 billion hours of unproductive forced labor every year, and introduce hundreds of billions of dollars back into the economy. No one could legally escape paying taxes as they do today. Those at or below the poverty line would still pay no taxes. Savings and investment would be encouraged, and all of the savings and investment people participated in would be free of double taxation. The burdon of uncertainty in forecasting tax liability and payroll liability from year to year would almost be eliminated.
To be realistic, you must be able to present concepts that offer some degree of sustainability. As long as our tax system grows in complexity at the hands of politicians and the corporations capable of complying and manipulating it to their advantage, and as long as tax policy is fueled by the narrow sighted belief that government has the ability and duty to successfully pick winners and losers, we will remain on a very unsustainable and exceptionally unrealistic path.
So, when liberals say that the simple concepts of freedom and self government that this country was founded on are unrealistic, that rings as a complement to me. Thanks!
Quote from: Gaspar on February 22, 2013, 08:48:28 AM
That's an interesting concept worth further exploration.
On the one hand we have a progressive tax system comprised of over 6,000 pages of regulations, restrictions, and forms that cost our economy hundreds of billions in compliance costs, and required a bureaucracy of 106,000 employees. Each year we add to the code and increase the number of employees necessary to enforce that code by thousands. While this code represents a rather simple progressive rate structure, it provides hundreds of deductions, loopholes, and requirements, that when met, reduce total tax liability and revenue. Only the most wealthy and powerful have the resources to use the tax code to their advantage, and an estimated 60% of taxpayers are currently out of compliance, and criminals according to the IRS (http://www.guardian.co.uk/books/2010/feb/20/ten-rules-for-writing-fiction-part-one). Constantly, the current progressive tax code becomes a political tool because it's increasing complexity, and the opportunity it affords various groups to loot or pillage the productivity of other groups. Every time this happens the word "REFORM" is used, however the system never becomes easier to comply with, less expensive to implement, or less burdensome on the economy. In fact, the opposite happens.
On the other hand, there is this idea of a Fair tax, that would still remain progressive, and keep revenue at the same levels, but would put the tax code out of the reach of politicians, and corporate manipulation. It would, not by force, but by choice, cause everyone to pay their fair share based on the share of the economy they participate in. It would emancipate 6 billion hours of unproductive forced labor every year, and introduce hundreds of billions of dollars back into the economy. No one could legally escape paying taxes as they do today. Those at or below the poverty line would still pay no taxes. Savings and investment would be encouraged, and all of the savings and investment people participated in would be free of double taxation. The burdon of uncertainty in forecasting tax liability and payroll liability from year to year would almost be eliminated.
To be realistic, you must be able to present concepts that offer some degree of sustainability. As long as our tax system grows in complexity at the hands of politicians and the corporations capable of complying and manipulating it to their advantage, and as long as tax policy is fueled by the narrow sighted belief that government has the ability and duty to successfully pick winners and losers, we will remain on a very unsustainable and exceptionally unrealistic path.
So, when liberals say that the simple concepts of freedom and self government that this country was founded on are unrealistic, that rings as a complement to me. Thanks!
I'm a proponent of the Fair Tax, but one thing I don't see is that the money spent on compliance is withheld from the economy now. Ostensibly that's money that goes to tax attorneys and accounting firms which will recirculate that money throughout the economy via payroll, dividends for shareholders, and corporate expenses.
I mainly like the idea of the Fair Tax for getting rid of all the loopholes and gimmicks people employ for tax avoidance as well as you said, it takes it out of the hands of politicians and their special interests or power bases.
Quote from: Conan71 on February 22, 2013, 09:54:08 AM
I mainly like the idea of the Fair Tax for getting rid of all the loopholes and gimmicks people employ for tax avoidance as well as you said, it takes it out of the hands of politicians and their special interests or power bases.
That's why the Fair Tax will never exist.
Quote from: Conan71 on February 22, 2013, 09:54:08 AM
I'm a proponent of the Fair Tax, but one thing I don't see is that the money spent on compliance is withheld from the economy now. Ostensibly that's money that goes to tax attorneys and accounting firms which will recirculate that money throughout the economy via payroll, dividends for shareholders, and corporate expenses.
I mainly like the idea of the Fair Tax for getting rid of all the loopholes and gimmicks people employ for tax avoidance as well as you said, it takes it out of the hands of politicians and their special interests or power bases.
Broken Window Fallacy. . .That which is seen, and that which is not seen. (http://en.wikisource.org/wiki/That_Which_Is_Seen,_and_That_Which_Is_Not_Seen)
The government forces compliance with tax code that requires billions of man-hours of labor. Sure that travels up the chain for a short period, but it is not circular like free market exchanges. There is no ultimate product or service that produces a benefit with value.
The government could do the same thing by requiring that every tax payer throw rocks through your windows once a year, and then pay to have them replaced. Sure there would be quite a boom in the window industry, but overall it would represent an extraction of capital and labor from the free market at the very bottom. . .You the tax payer.
All of that effort on the part of the attorneys and CPA's and regular folks would be far more productive if engaged in market activities that were actually productive in nature.
Quote from: Gaspar on February 21, 2013, 03:25:32 PM
Geeze! Where do you get your info?
Oil Filter <--23%
5W40 <--23%
Labor <--23%
Services are taxed at the same rate.
Service providers are not exempt from the income tax today, and should not be exempt from the FairTax. Services now account for well over one-half of the gross domestic product (GDP). Neither consumption of services nor consumption of goods should be tax preferred. And it is economically foolish not to tax the fastest growing segment of our economy. Competition, not politics, should determine what goods and services cost.
Keep trying. Eventually you will find something that will stick.
OK, is this right?
Stock Purchase-> 0%
Stock Broker -> 23%
Just trying to understand this scheme.
Quote from: carltonplace on February 22, 2013, 12:04:17 PM
OK, is this right?
Stock Purchase-> 0%
Stock Broker -> 23%
Just trying to understand this scheme.
Exactly! Why would you tax a stock purchase?
Quote from: Gaspar on February 22, 2013, 12:59:02 PM
Why would you tax a stock purchase?
Because it's a sale and you are advocating a national sales tax. Let the loopholes begin!
Quote from: nathanm on February 22, 2013, 06:08:24 PM
Because it's a sale and you are advocating a national sales tax. Let the loopholes begin!
So you want to tax the purchase of stock, then tax the dividend, and also tax the capital gains on the stock?
Quote from: dbacks fan on February 22, 2013, 06:12:04 PM
So you want to tax the purchase of stock, then tax the dividend, and also tax the capital gains on the stock?
IIRC, the Fair Tax proposal eliminates capital gains tax entirely. (as opposed to the current situation of only applying to US citizens/residents) Dividends would be taxed when/if they were spent.
Quote from: nathanm on February 22, 2013, 10:08:57 PM
IIRC, the Fair Tax proposal eliminates capital gains tax entirely. (as opposed to the current situation of only applying to US citizens/residents) Dividends would be taxed when/if they were spent.
Thanks, will look into it.
Quote from: Gaspar on February 22, 2013, 10:03:35 AM
The government forces compliance with tax code that requires billions of man-hours of labor. Sure that travels up the chain for a short period, but it is not circular like free market exchanges. There is no ultimate product or service that produces a benefit with value.
You are just reinforcing the case I have made here and elsewhere for years that NO personal tax situation should ever exist. All taxes should go through corporations/companies, since they are already required to deal with that professionally anyway - no cost structure change at all - just moving numbers with computers. The IRS could be miniscule compared to today, having to deal with only a few million entities versus 150 + million.
Quote from: nathanm on February 22, 2013, 06:08:24 PM
Because it's a sale and you are advocating a national sales tax. Let the loopholes begin!
It is not a sale contingent on any form of usage. It is a stake in a company or group of companies, and contingent on the success or failure of that company. The idea is to encourage such activity in the economy. Savings and investment should never be taxed. We want to reward people for investing in the economy.
Investment is not something that just rich people do.
Quote from: Gaspar on February 25, 2013, 12:15:01 PM
It is not a sale contingent on any form of usage. It is a stake in a company or group of companies, and contingent on the success or failure of that company. The idea is to encourage such activity in the economy. Savings and investment should never be taxed. We want to reward people for investing in the economy.
Investment is not something that just rich people do.
Parsing and rationalization.
Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!
As for that nonsensical crap about "discouraging investment" we hear so much about - that's a load of garbage. Never stopped anyone at any time from trying the invest as much as they were going to anyway in hopes they could make as much as possible. NO ONE ever in the history of the world EVER sat there looking at their portfolio and decided to take money out of an appreciating investment to let it set quietly doing nothing. Just to avoid some tax. What a crock for the liars advancing that notion on our national stage (Rupert Murdoch and his ilk for one group) to even make the noises of such a ridiculous idea!!
Quote from: heironymouspasparagus on February 25, 2013, 01:07:33 PM
Parsing and rationalization.
Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!
As for that nonsensical crap about "discouraging investment" we hear so much about - that's a load of garbage. Never stopped anyone at any time from trying the invest as much as they were going to anyway in hopes they could make as much as possible. NO ONE ever in the history of the world EVER sat there looking at their portfolio and decided to take money out of an appreciating investment to let it set quietly doing nothing. Just to avoid some tax. What a crock for the liars advancing that notion on our national stage (Rupert Murdoch and his ilk for one group) to even make the noises of such a ridiculous idea!!
You officially make no sense, and this proves it.
There are two things that EVERY intelligent investor takes into consideration when choosing to buy, sell, or otherwise convert a stock. First is if the stock pays a dividend that he/she will lose eligibility for by selling the stock at a premature time, and second is how tax liability affects the sale or the timing of the sale.
In discussing the Fair Tax we are not discussing INCOME tax. We are discussing USEAGE tax.
QuoteSavings and investment income should be taxed exactly the same as other income..... it's INCOME!!
Your initial point with the two exclamation points is therefore misplaced.
Quote from: Gaspar on February 25, 2013, 01:17:58 PM
You officially make no sense, and this proves it.
There are two things that EVERY intelligent investor takes into consideration when choosing to buy, sell, or otherwise convert a stock. First is if the stock pays a dividend that he/she will lose eligibility for by selling the stock at a premature time, and second is how tax liability affects the sale or the timing of the sale.
In discussing the Fair Tax we are not discussing INCOME tax. We are discussing USEAGE tax. Your initial point with the two exclamation points is therefore misplaced.
Whew! Always trying to deflect. Yes, you do look at dividends and taxes related to the timing of investing. What I actually said, though, was that NO one ever looked at an appreciating investment (and I will add the condition that many times a non-appreciating or declining investment) and decide to take the money out and let it do nothing. That investor will always do something with the money. Perhaps it is parked in a quiet little corner somewhere - not making much, which is why we are still able to sell treasuries - waiting for the right "next" investment to come along, like Buffet with his tens of billions in cash, or Apple with their hundred billion + in cash. But they DO NOT and NEVER WILL stop investing just because it might cost them a tax.
The small number of eccentrics that you are thinking of right now who put their life savings in a "mattress" somewhere are the lunatic fringe that lead to a whole other discussion....and none of them would ever be considered investors anyway.
Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!
Which leads to the next comment regarding the whole premise of the falsely named "Fair Tax". Especially as it is discussed in the RWRE media - always mentioning a number of 10% as the "Fair" rate. Even though they know for a fact that the real level necessary would actually be very much higher to replace the current income levels we demand for our unfunded wars and bailouts of billionaires. But that is ok, at least they will be able to transfer much of the load to the 47%ers that Romney made famous by his disdain and dismissiveness.
What is the 'retail' portion of our $15 trillion dollar economy that would be subject to this tax?? Maybe 1/2? Or 2/3?? If we take 10% of that 2/3, we are talking about $1 billion in revenue going to fund all the things we are currently spending $3.6 trillion on (2012). To actually PAY for the spending with this grotesque mockery of the word "Fair", we would need that rate to be 36%!! Across the board for everyone. That would be a huge increase in the financial load for everyone, including the 1%ers, who obviously can't do basic ratios and fractions.
Quote from: heironymouspasparagus on February 25, 2013, 02:30:08 PM
Whew! Always trying to deflect. Yes, you do look at dividends and taxes related to the timing of investing. What I actually said, though, was that NO one ever looked at an appreciating investment (and I will add the condition that many times a non-appreciating or declining investment) and decide to take the money out and let it do nothing. That investor will always do something with the money. Perhaps it is parked in a quiet little corner somewhere - not making much, which is why we are still able to sell treasuries - waiting for the right "next" investment to come along, like Buffet with his tens of billions in cash, or Apple with their hundred billion + in cash. But they DO NOT and NEVER WILL stop investing just because it might cost them a tax.
The small number of eccentrics that you are thinking of right now who put their life savings in a "mattress" somewhere are the lunatic fringe that lead to a whole other discussion....and none of them would ever be considered investors anyway.
Savings and investment income should be taxed exactly the same as other income..... it's INCOME!!
Which leads to the next comment regarding the whole premise of the falsely named "Fair Tax". Especially as it is discussed in the RWRE media - always mentioning a number of 10% as the "Fair" rate. Even though they know for a fact that the real level necessary would actually be very much higher to replace the current income levels we demand for our unfunded wars and bailouts of billionaires. But that is ok, at least they will be able to transfer much of the load to the 47%ers that Romney made famous by his disdain and dismissiveness.
What is the 'retail' portion of our $15 trillion dollar economy that would be subject to this tax?? Maybe 1/2? Or 2/3?? If we take 10% of that 2/3, we are talking about $1 billion in revenue going to fund all the things we are currently spending $3.6 trillion on (2012). To actually PAY for the spending with this grotesque mockery of the word "Fair", we would need that rate to be 36%!! Across the board for everyone. That would be a huge increase in the financial load for everyone, including the 1%ers, who obviously can't do basic ratios and fractions.
You haven't been paying attention, however you are still willing to post. I suppose that is ok.
Isn't there a "legalize marijuana" thread somewhere that requires your attention?
Quote from: Gaspar on February 25, 2013, 12:15:01 PM
It is not a sale contingent on any form of usage.
Fair Tax does not purport to create a use tax, it purports to create a sales tax. Whether or not an exemption for certain sales is a good idea, you're still advocating for a loophole. Extra irony is involved because a large part of the propaganda in favor of the Fair Tax is based on its lack of loopholes.
FWIW, I don't actually think a sales tax on stock is a good idea. (nor do I think the Fair Tax is a good idea) It gives even more tax advantages to debt over equity, which leads to less stable enterprises and a less stable overall economy.
Quote from: Gaspar on February 25, 2013, 04:32:17 PM
You haven't been paying attention, however you are still willing to post. I suppose that is ok.
Isn't there a "legalize marijuana" thread somewhere that requires your attention?
Sadness ensues. You don't get it...!
Well, that's ok. Just enough of the country does get it, so that we aren't stuck with another "tax cut Pollyanna" for at least the next 4 years on a national basis. Now, if Oklahoma could just get a clue....
And as always, we can count on you to attempt to disparage rather than addressing the FACT that the "Fair Tax" would be fiscally catastrophic to the nation if we were so stupid as to enact such a thing. And the great masses of "proponents" are either lying...a near certainty of the Murdochian inner circle or so horribly naive to think for even a second or two that there would NOT be a less than trivial income tax retained....well, it is literally breathtaking that seemingly rational people would actually have such elementary though processes.
Quote from: nathanm on February 25, 2013, 05:15:14 PM
Fair Tax does not purport to create a use tax, it purports to create a sales tax. Whether or not an exemption for certain sales is a good idea, you're still advocating for a loophole. Extra irony is involved because a large part of the propaganda in favor of the Fair Tax is based on its lack of loopholes.
FWIW, I don't actually think a sales tax on stock is a good idea. (nor do I think the Fair Tax is a good idea) It gives even more tax advantages to debt over equity, which leads to less stable enterprises and a less stable overall economy.
We have chosen over the last 30+ years to encumber our children and grandchildren with a fiscal catastrophe. Now, we are making noises about this or that way to tax ourselves is the best way to go about it. Most of the most audible is the same plaintive bleats we have been hearing for those decades....cut the taxes of the richest amongst us and the economy will make all the poor people rich, too. And for those years we have almost convinced ourselves to believe it.
The real solution will be to have economic activity and growth at an overall noticeably slower rate than we have had since WWII....with higher taxes all around. Hopefully, there will still be growth involved.... And obviously, these two things are the most distasteful of solutions, but Congress hasn't been able to actually fix things when fixing was possible, we are probably stuck with what is likely on the way.
The kids are gonna bear the brunt of it. They are gonna be the ones that take the big hit of our irrational behaviour. They are gonna be real pissed off at what has been done to them. Rightfully so.