The "General Consumption Tax" (Bill O'Reilly)

[Jryan]

While I was browsing the internet today, I came across this jewel spoken by Bill O'Reilly.

The reason I want the consumption tax is because I pointed out that almost half, HALF (of) American workers don’t pay any federal income tax. With a consumption tax, everybody would chip in. That seems to be kind of fair. Pay your fair share.

While (anyone who has read my posts) everyone knows that I disagree with this because it abandons the poor and carries the rich. What do you think about this.

News Hounds: O
(This is definitely a republican biased article just FYI, I'll try to find a more balanced one, or maybe not, seeing as how Fox News is "fair and balanced".)

 

[TurtleDude]

While I was browsing the internet today, I came across this jewel spoken by Bill O'Reilly.



While (anyone who has read my posts) everyone knows that I disagree with this because it abandons the poor and carries the rich. What do you think about this.

News Hounds: O
(This is definitely a republican biased article just FYI, I'll try to find a more balanced one, or maybe not, seeing as how Fox News is "fair and balanced".)

everyone should pay and everyone should pay more when the government wants to spend more

the worst system is where a majority can continually demand a minority pay more and more while that majority wants more and more

 

[Jryan]

everyone should pay and everyone should pay more when the government wants to spend more

the worst system is where a majority can continually demand a minority pay more and more while that majority wants more and more

This didn't get a response because it did not make sense. (Re-write?)

 

[molten_dragon]

The only people who shouldn't pay taxes are those who cannot bear any tax burden without it interfering with their ability to provide for the basic necessities of life, such as food, clothing, shelter, transportation to a job, etc.

One of the reasons I'm not completely sold on a consumption tax is because I'm not entirely sure that it won't harm the extremely poor.

 

[1Perry]

A consumption tax would be very regressive without tons of new exemptions. That's the last thing we need. We need a simplier tax system. I support the idea that all should be invested in the country but this would place a larger burden on the lower incomes.

 

[cpwill]

A consumption tax would be very regressive without tons of new exemptions

or a prebate

That's the last thing we need. We need a simplier tax system.

and no witholding. flat rates, 1 tax credit for kids, and you pay your annual taxes two days before election day.

 

[washunut]

The only people who shouldn't pay taxes are those who cannot bear any tax burden without it interfering with their ability to provide for the basic necessities of life, such as food, clothing, shelter, transportation to a job, etc.

One of the reasons I'm not completely sold on a consumption tax is because I'm not entirely sure that it won't harm the extremely poor.

Most consumption taxes I have seen exempt basic necessities like food.

 

[Deuce]

Most consumption taxes I have seen exempt basic necessities like food.

What about clothing? Toilet paper? The electric bill? Glasses for the kid with bad eyes? Doctor's visits?

You can see how this gets complicated.

 

[DrunkenAsparagus]

A consumption tax will be far more regressive than an income tax, because the poor tend to spend more of their income than the rich. I like a largely flat income tax as long as it's coupled with a very small tax burden. I can understand arguments that it's unfair to make the rich pay a larger percentage of their income. I cannot figure out why it would be fair to have the poor pay a larger percentage than the rich.

 

[rathi]

A consumption tax decreasing spending consumer spending and thus the demand for consumer goods. Consumption taxes thus come with probably the worst economic consequences of any sort of tax. It also has serious problems with handling internet based business, as we see with amazon. Finally, increasing the cost of living with high unemployment will cause social unrest.

 

[imagep]

Most consumption taxes I have seen exempt basic necessities like food.

What about prime rib?

 

[imagep]

While I was browsing the internet today, I came across this jewel spoken by Bill O'Reilly.



While (anyone who has read my posts) everyone knows that I disagree with this because it abandons the poor and carries the rich. What do you think about this.

News Hounds: O
(This is definitely a republican biased article just FYI, I'll try to find a more balanced one, or maybe not, seeing as how Fox News is "fair and balanced".)

I saw on TV O'Reilly and Beck both arguing that we should immediately start a consumption tax, not as a alternative to income tax, but as a way to put the burden of our budget deficit on the backs of the poor and middle class. Beck said that his plan was better than O'Reilly's plan because Beck was proposing a HIGHER consumption tax. The next day both were saying that this is not a time to raise taxes. I went on the Fox website, trying to find links to them saying that we should immediately have a consumption tax, both segments had been cleansed from the site. I frequently watch O'Reily and I have seen many many episodes of Beck. They both do and say whatever they think will get them ratings. They are both hypocrits.

 

[DrunkenAsparagus]

What about prime rib?

Luxury taxes often hurt the poor and middle class more than the rich. This is because, the rich can spend their money in more ways than the rest of us and will spend their money somewhere else if their luxuries are too highly taxed. It may seem like they won't notice a few extra hundred or thousand missing, but with increased wealth, these people have increased options; they will take them. The rich respond to prices just like everyone. They can just spend their money on something else that is just as nice, but not as highly taxed. The demand for luxuries, are almost by definition, very elastic. When the price goes up by a little bit, a lot fewer people want to buy it. When a luxury tax is imposed, the sellers of these products don't want to raise prices much higher, because this will create far fewer buyers for their product. Instead they bear much of the tax burden, often forcing them to downsize. The workers are faced with the brunt of it. When a tax was imposed on luxury yachts, those hit hardest, were not the rich, but the people who built these yachts, people who would never be able to afford the one.

 

[TurtleDude]

A consumption tax will be far more regressive than an income tax, because the poor tend to spend more of their income than the rich. I like a largely flat income tax as long as it's coupled with a very small tax burden. I can understand arguments that it's unfair to make the rich pay a larger percentage of their income. I cannot figure out why it would be fair to have the poor pay a larger percentage than the rich.

because the rich pay far more actual dollars for absolutely no increased benefits

 

[DrunkenAsparagus]

because the rich pay far more actual dollars for absolutely no increased benefits

This is why I call for a largely flat tax but only if we shrink spending (and taxes) by a lot. Asking the poor to pay the same percentage as the rich right now, just is not feasible. They do not have that much extra money to spend on taxes at the same level as the rich. This has nothing to do with "fairness or "equality." It has to do with the fact that we are spending $3.7 trillion. I'm not saying that the poor shouldn't pay more, but let's wait until we shrink spending.

 

[molten_dragon]

Most consumption taxes I have seen exempt basic necessities like food.

The only serious national sales tax proposal I've ever seen is Fairtax, and it does not exempt food as far as I know. I ran the numbers on it a while ago, and a family of 4 living at the poverty level would end up paying more in taxes. That's my only real beef with it.

 

[lardbeetle]

Flat rates or a consumption tax would be bad for the economy, speaking from a purely practical standpoint. I would suggest a variable tax rate by income, but taxing portions of the income at different levels to eliminate the current worry of penalizing people for slipping into a higher tax bracket. For instance:

Income from $1-30,000 a year would garner a 5% flat tax.
Additional income from $30,000 - 60,000 a year would garner an additional 10% tax - meaning someone making $60,000 a year would pay, on average, 10% tax.
Additional income from $60,000-120,000 a year would garner an additional 10% tax
Et cetera.

I just threw out the numbers, by the by.

 

[Antiderivative]

Consumption tax does not have to be regressive. It can be progressive, as Robert Frank has been pointing out for years.

Under such a tax, people would report not only their income but also their annual savings, as many already do under 401(k) plans and other retirement accounts. A family’s annual consumption is simply the difference between its income and its annual savings. That amount, minus a standard deduction — say, $30,000 for a family of four — would be the family’s taxable consumption. Rates would start low, like 10 percent. A family that earned $50,000 and saved $5,000 would thus have taxable consumption of $15,000. It would pay only $1,500 in tax. Under the current system of federal income taxes, this family would pay about $3,000 a year.

Why Not Shift the Burden to Big Spenders? - New York Times
http://www.economia.unimore.it/bilancini_ennio/Frank-ProgressiveTaxation.pdf

Flat rates or a consumption tax would be bad for the economy, speaking from a purely practical standpoint.

I don't see how moving away from taxing income, savings, and investment and towards consumption would be bad for the economy. A consumption tax would help solve our savings deficiency. The personal savings rate in this country is all times low and hovering around 0%. By taxing consumption, this will give the incentive to save.

Where does investment (i.e. one of the main components of economic growth)comes from? Investment comes from the pool of savings. America would be better off if we invested more rather than continue in this groove of rampant consumption. If we actually invested more today, we would be able to consume even more in the future.

 

[1Perry]

The only serious national sales tax proposal I've ever seen is Fairtax, and it does not exempt food as far as I know. I ran the numbers on it a while ago, and a family of 4 living at the poverty level would end up paying more in taxes. That's my only real beef with it.

IMO taxing food is immoral.

 

[lardbeetle]

I don't see how moving away from taxing income, savings, and investment and towards consumption would be bad for the economy. A consumption tax would help solve our savings deficiency. The personal savings rate in this country is all times low and hovering around 0%. By taxing consumption, this will give the incentive to save.

Where does investment (i.e. one of the main components of economic growth)comes from? Investment comes from the pool of savings. America would be better off if we invested more rather than continue in this groove of rampant consumption. If we actually invested more today, we would be able to consume even more in the future.

It's really simple. Consumption taxes are designed to decrease consumption. Consumption fuels economic growth. More people buying Fords means more profit for Ford, which means that Ford can pay their workers, suppliers, and investors more, which means that those people spend more. Increasing savings are nice, that is, a nice way to start a depression.

 

[molten_dragon]

IMO taxing food is immoral.

Well, the thing with Fairtax is that you get a 'prebate' to cover basic necessities. Which I don't really think is a great way of doing it.

 

[lpast]

This topic just endlessly rages on and on here at dps....

The top 400 americans make more and have more than the bottom 50%...and they pay 40% less taxs then then did in 1995 and other tax besides income tax has been lowered for them....they are doing far better than they ever have.
The bottom 50% is doing worse than they ever have. The bottom 50% pay state income tax..SS tax, unemployment Tax...property tax even via rentals...sales tax and all the fees...they have nothing left...you cant get blood from a rock...the rich need to stop whining they have it ALL..

 

[cpwill]

The only serious national sales tax proposal I've ever seen is Fairtax, and it does not exempt food as far as I know. I ran the numbers on it a while ago, and a family of 4 living at the poverty level would end up paying more in taxes. That's my only real beef with it.

...since they are living at the poverty level, and since the Fair Tax includes a prebate to precisely that level, their effective taxation rate would be Zero...

 

[lpast]

...since they are living at the poverty level, and since the Fair Tax includes a prebate to precisely that level, their effective taxation rate would be Zero...

Flat tax...Fair tax should be rightfully name for what it really is...RichPayFarlessTaxOnEveryoneElse

 

[sawyerloggingon]

Consumption tax has merit and is fair if you exempt certain necessities like groceries. Average working man buys a new F-150 and pays a tax on it. The rich guy buys a BMW, then a Cessna, then an Audi for his wife, a Porsche for his daughter that just turned 16, a Honda Big Red for his 14 year old son and a new tux to go to some party in and pays tax on that stuff. Works for me.