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From: Greegor on 12 Jun 2010 01:56
On Jun 11, 8:54 pm, "JosephKK"<quiettechb...(a)yahoo.com> wrote:
> On Thu, 10 Jun 2010 19:28:53 -0700 (PDT), Greegor <greego...(a)gmail.com>
> wrote:
>
>
>
>
>
> >On Jun 10, 5:50 pm, "k...(a)att.bizzzzzzzzzzzz"
> ><k...(a)att.bizzzzzzzzzzzz> wrote:
> >> On Thu, 10 Jun 2010 10:06:20 -0400, Spehro Pefhany
>
> >> <speffS...(a)interlogDOTyou.knowwhat> wrote:
> >> >On Wed, 09 Jun 2010 20:37:37 -0500, "k...(a)att.bizzzzzzzzzzzz"
> >> ><k...(a)att.bizzzzzzzzzzzz> wrote:
>
> >> >>Of *course*.  The "Fair Tax" is only federal.  It would be UNCONSTITUTIONAL
> >> >>for the feds to dictate to the states how to raise revenue, or to do it for
> >> >>them.
>
> >SP  >Couldn't they voluntarily agree to do so?
>
> >krw > IMO, no.  That said, it's done every day.
> >krw > Think: highway trust fund.  Note the
> >krw > strings that go with that mess (e.g. seat belt laws).
>
> >You're touching on a very interesting twist
> >having to do with state's rights.
>
> >It's not the only area in which the Federal
> >Government basically BUYS a law from each
> >state in exchange for massive funding.
>
> >A few years back the Feds pushed every
> >state to lower the Blood Alcohol level
> >for the legal standard for intoxication to
> >be so low that a person having a single
> >glass of wine with a meal at a supper club
> >could be nailed for Drunk Driving.
>
> >When I drove taxi I watched drunks STAGGER
> >to their cars and saw how unwilling they
> >were to give up the keys.
>
> >I saw a large number of SEVERELY drunk
> >people drive off.  It occurs to me that Police
> >are now wasting a LOT of time on the
> >less severe cases and makes the reality
> >more about selective enforcement than
> >about addressing the more severe problems.
>
> >We have enough areas where laws are
> >set up to be enforced only when the
> >authorities have an axe to grind or
> >isn't related somehow to the "perp".
>
> >It's called "selective enforcement".
>
> >But the tactic of "buying laws" or "buying states rights"
> >has become much more common.
>
> >At some level it steam rollers over the
> >individuality of states and weakens
> >the distinction between states, trending
> >toward one huge nation state.

JKK > It seems that you remember the 55 mph game as well.

It's not restricted to highway laws either.

From: Joerg on 12 Jun 2010 11:10
dagmargoodboat(a)yahoo.com wrote:
> On Jun 11, 10:43 am, Joerg <inva...(a)invalid.invalid> wrote:
>> dagmargoodb...(a)yahoo.com wrote:
>>> On Jun 10, 9:37 pm, Joerg <inva...(a)invalid.invalid> wrote:
>>>> dagmargoodb...(a)yahoo.com wrote:
>>>>> On Jun 9, 8:37 pm, krw wrote:
>>>>>> On Wed, 09 Jun 2010 15:40:26 -0700, Joerg <inva...(a)invalid.invalid> wrote:
>>>>>>> Ah, so property tax remains. State sales tax remains. State income tax
>>>>>>> remains. No thanks, then I don't want the "fair tax".
>>>>>> Of *course*. The "Fair Tax" is only federal. It would be UNCONSTITUTIONAL
>>>>>> for the feds to dictate to the states how to raise revenue, or to do it for
>>>>>> them.
>
> [snip]
>
>>>> That is simply not true. It was discussed here ad nauseam that they will
>>>> still have to file their state tax returns as usual.
>>> Obviously, but that's STATE. Federal goes away.
>> So? What's the tangible benefit for Joe Q.Public in terms of compliance
>> effort and cost? Next to nothing ...
>
> All the time you spend tax planning and retirement planning to avoid
> tax, for one example. All the time and energy companies spend
> avoiding tax. Investment tax.
>

So state taxes don't need to be planned for? Why is that?

Retirement planning will all get upset and become rather intense if they
don't exempt savings beyond Roths et cetera. Because people would have
to find a decent place outside the country.


> Joe Q. isn't the guy who carries the burden, but at least he'd get his
> full paycheck, with *no* deductions.
>

Sorry, wrong again. Obviously, from what you and Keith have written
here, he will see state tax withholding.

>
>>>> _That_ is what
>>>> causes all the effort and compliance costs. It makes no difference
>>>> whether you file state or federal or both. One alone will generate
>>>> nearly all the compliance works and costs all by itself, the other
>>>> simply follows a similar pattern.
>>> I beg to differ. States don't charge Social Security tax, Medicare
>>> Tax, etc. States usually have simpler rules too for things like
>>> capital gains.
>> Social, medicare and all that are one-liners. The effort in doing a tax
>> return is all the other stuff and the rules aren't much simpler there,
>> at least not in California. Sorry, but I don not buy the compliance cost
>> reduction. Not at all, unless the states change as well but that'll be
>> up to them.
>>
>>>> You have to get all your 1099s in
>>>> order, all you interest income, all your deductions.
>>> If your state requires those, I guess so. Mine doesn't.
>> Mine does. There's a reason that my clients send me the 1099s in
>> triplicate :-)
>>
>>
>>
>>>> If the states do
>>>> not change their system as well then the claim that a "fair tax"
>>>> eliminates compliance costs is a big old joke. Because it doesn't.
>>>>> [*] So, theoretically, your employer could pay you more.
>>>>> That's a significant step forward. (A giant leap forward?)
>>>>> Joerg's concerned about potential double-taxation. I brought that
>>>>> concern personally to the actual people, and they're very receptive to
>>>>> doing that. Those things happen as amendments to bills as said bills
>>>>> get debated and perfected in Congress. (In normal times, anyhow.)
>>>> And then, pretty soon, we are on our merry way again to a goliath
>>>> 70,000+ page tax code :-)
>>> Oh please. We've got 76,000 pages now. Would it really kill the deal
>>> if it took two measly extra pages in the (very modest, easy-to-
>>> understand) Fair Tax bill to exclude Roth IRAs?
>> As I said, many older people have savings and investments other than
>> Roth. They do not wish those to be taxed again. How will all that be
>> handled?
>
> Look, this affects me far more than you can know. I still find it
> very interesting.
>
> What do you suggest?
>
> You don't get it--this is _your_ chance. You can just wait for
> someone else to do something you hate then grumble about it, or you
> can offer a solution.
>

I did that: Fix the current system. Roll back exemptions and pork, ditch
AMT or at least properly inflation-index it, and so on. I cannot imagine
that you seriously believe that a so-called "fair tax" won't get
clobbered the same way the once simple income tax system has been. Just
faster, because budget shortfalls will happen faster.

As an engineer I am used to not just completely toss a clients system
and suggest a re-design from scratch. First I look at it, see what needs
to be fixed and optimized, and then come up with detailed suggestions
where, how, and what it's going to take.


> I already suggested just freezing those accounts from further
> deposits and allowing their contents to be used without tax. It
> wouldn't be any harder than the restrictions we have now on IRA /
> 401(k), HSA, and so forth. I brought that idea directly to the Fair
> Tax people, in person. What do _you_ want?
>

That this shows up in the written proposals. What concerns me is that
this rather important stuff wasn't mentioned at all in all the text I
read (from your links). Meaning the whole thing doesn't appear to be
that well thought out before going public.

What also needs to be in those proposals is just how exactly this is
going to work. How can you use it without tax if there is, as is
claimed, not to be any more paperwork? People have to give the Federales
their account statement? I don't think that's going to fly with the
people. And then what? You get a complete rebate? Must compile all
receipts for that? Forced to deplete your savings? Where's the
compliance cost going then?

Beside lofty goals there needs to be more meat: How exactly the whole
stuff is done in practice and administered.


>>>>> My greatest qualm is the prebate. The idea of everyone getting
>>>>> government checks just bugs me--it reeks of nanny-state. John
>>>>> suggested exempting necessities; I like that better.
>>>> That can be risky because it fosters misapproriation. What really blew
>>>> my mind was what some French folks did back in the late 70's: They broke
>>>> a piece off of a baguette and wiped the table with it. Cheaper ...
>>> Taxation fosters misappropriation. That's just about our whole
>>> problem--giving the trust fund to the teenagers. And look what
>>> they've done with it...
>> Yup :-(
>>
>> And an increased consumption-based tax fosters an increase in
>> underground economy. Big time.
>
> a) So does increased income tax. b) If not this, we'll be getting a
> VAT, plus higher income taxes, plus more. Do you like that better?
>

If spending is rampant we will get that anyhow and it doesn't matter
what the tax is called. A flat sales tax isn't miraculously going to
make such increasing debt go away. In fact, it makes it a whole lot more
unpredictable. We have to start looking farther than our own borders.
Case in point is Germany where for many years consumers have clamped
down. They just kept a whole lot of their money, didn't spend it, and
that has resulted in serious VAT shortfalls. If the VAT or "fair tax" or
whatever is your only source you're screwed if that happens.

--
Regards, Joerg

http://www.analogconsultants.com/

"gmail" domain blocked because of excessive spam.
Use another domain or send PM.
From: krw on 12 Jun 2010 12:50
On Sat, 12 Jun 2010 08:10:42 -0700, Joerg <invalid(a)invalid.invalid> wrote:

>dagmargoodboat(a)yahoo.com wrote:
>> On Jun 11, 10:43 am, Joerg <inva...(a)invalid.invalid> wrote:
>>> dagmargoodb...(a)yahoo.com wrote:
>>>> On Jun 10, 9:37 pm, Joerg <inva...(a)invalid.invalid> wrote:
>>>>> dagmargoodb...(a)yahoo.com wrote:
>>>>>> On Jun 9, 8:37 pm, krw wrote:
>>>>>>> On Wed, 09 Jun 2010 15:40:26 -0700, Joerg <inva...(a)invalid.invalid> wrote:
>>>>>>>> Ah, so property tax remains. State sales tax remains. State income tax
>>>>>>>> remains. No thanks, then I don't want the "fair tax".
>>>>>>> Of *course*. The "Fair Tax" is only federal. It would be UNCONSTITUTIONAL
>>>>>>> for the feds to dictate to the states how to raise revenue, or to do it for
>>>>>>> them.
>>
>> [snip]
>>
>>>>> That is simply not true. It was discussed here ad nauseam that they will
>>>>> still have to file their state tax returns as usual.
>>>> Obviously, but that's STATE. Federal goes away.
>>> So? What's the tangible benefit for Joe Q.Public in terms of compliance
>>> effort and cost? Next to nothing ...
>>
>> All the time you spend tax planning and retirement planning to avoid
>> tax, for one example. All the time and energy companies spend
>> avoiding tax. Investment tax.
>>
>
>So state taxes don't need to be planned for? Why is that?

State taxes are, by far, simpler than federal income tax. Goin to the "Fair
Tax" would be a major simplification, even if the states didn't follow, which
they will (pretty much have to).

>Retirement planning will all get upset and become rather intense if they
>don't exempt savings beyond Roths et cetera. Because people would have
>to find a decent place outside the country.

James has conceded this point.

>> Joe Q. isn't the guy who carries the burden, but at least he'd get his
>> full paycheck, with *no* deductions.
>>
>
>Sorry, wrong again. Obviously, from what you and Keith have written
>here, he will see state tax withholding.

If the state doesn't follow, sure. Anyone living (or working) in a state with
an income tax will still have withholding.

<snip>

>> You don't get it--this is _your_ chance. You can just wait for
>> someone else to do something you hate then grumble about it, or you
>> can offer a solution.
>>
>
>I did that: Fix the current system. Roll back exemptions and pork, ditch
>AMT or at least properly inflation-index it, and so on. I cannot imagine
>that you seriously believe that a so-called "fair tax" won't get
>clobbered the same way the once simple income tax system has been. Just
>faster, because budget shortfalls will happen faster.

If it has *any* exemptions, yes it will. Washington likes to grease slippery
slopes. If there are *no* exemptions it's harder to slide into the abyss
we're in now. That said, before the Fair Tax could be implemented the 16th
amendment needs to be repealed. That won't happen either.

>As an engineer I am used to not just completely toss a clients system
>and suggest a re-design from scratch. First I look at it, see what needs
>to be fixed and optimized, and then come up with detailed suggestions
>where, how, and what it's going to take.

....and if you came across a design as broken as the US is now you'd change
some resistor values?

<snip>

>>> And an increased consumption-based tax fosters an increase in
>>> underground economy. Big time.
>>
>> a) So does increased income tax. b) If not this, we'll be getting a
>> VAT, plus higher income taxes, plus more. Do you like that better?
>>
>
>If spending is rampant we will get that anyhow and it doesn't matter
>what the tax is called. A flat sales tax isn't miraculously going to
>make such increasing debt go away. In fact, it makes it a whole lot more
>unpredictable. We have to start looking farther than our own borders.
>Case in point is Germany where for many years consumers have clamped
>down. They just kept a whole lot of their money, didn't spend it, and
>that has resulted in serious VAT shortfalls. If the VAT or "fair tax" or
>whatever is your only source you're screwed if that happens.

In high unemployment the income tax falls short, too. Many states are feeling
this pinch (no, it doesn't explain CA). The "Fair Tax" does make funding
government more obvious, which would tend to limit it more.

[*] I would suggest a straight sales tax or flat income tax for this purpose.
From: krw on 12 Jun 2010 12:51
On Fri, 11 Jun 2010 22:56:35 -0700 (PDT), Greegor <greegor47(a)gmail.com> wrote:

>On Jun 11, 8:54�pm, "JosephKK"<quiettechb...(a)yahoo.com> wrote:
>> On Thu, 10 Jun 2010 19:28:53 -0700 (PDT), Greegor <greego...(a)gmail.com>
>> wrote:
>>
>>
>>
>>
>>
>> >On Jun 10, 5:50�pm, "k...(a)att.bizzzzzzzzzzzz"
>> ><k...(a)att.bizzzzzzzzzzzz> wrote:
>> >> On Thu, 10 Jun 2010 10:06:20 -0400, Spehro Pefhany
>>
>> >> <speffS...(a)interlogDOTyou.knowwhat> wrote:
>> >> >On Wed, 09 Jun 2010 20:37:37 -0500, "k...(a)att.bizzzzzzzzzzzz"
>> >> ><k...(a)att.bizzzzzzzzzzzz> wrote:
>>
>> >> >>Of *course*. �The "Fair Tax" is only federal. �It would be UNCONSTITUTIONAL
>> >> >>for the feds to dictate to the states how to raise revenue, or to do it for
>> >> >>them.
>>
>> >SP �>Couldn't they voluntarily agree to do so?
>>
>> >krw > IMO, no. �That said, it's done every day.
>> >krw >�Think: highway trust fund. �Note the
>> >krw > strings that go with that mess (e.g. seat belt laws).
>>
>> >You're touching on a very interesting twist
>> >having to do with state's rights.
>>
>> >It's not the only area in which the Federal
>> >Government basically BUYS a law from each
>> >state in exchange for massive funding.
>>
>> >A few years back the Feds pushed every
>> >state to lower the Blood Alcohol level
>> >for the legal standard for intoxication to
>> >be so low that a person having a single
>> >glass of wine with a meal at a supper club
>> >could be nailed for Drunk Driving.
>>
>> >When I drove taxi I watched drunks STAGGER
>> >to their cars and saw how unwilling they
>> >were to give up the keys.
>>
>> >I saw a large number of SEVERELY drunk
>> >people drive off. �It occurs to me that Police
>> >are now wasting a LOT of time on the
>> >less severe cases and makes the reality
>> >more about selective enforcement than
>> >about addressing the more severe problems.
>>
>> >We have enough areas where laws are
>> >set up to be enforced only when the
>> >authorities have an axe to grind or
>> >isn't related somehow to the "perp".
>>
>> >It's called "selective enforcement".
>>
>> >But the tactic of "buying laws" or "buying states rights"
>> >has become much more common.
>>
>> >At some level it steam rollers over the
>> >individuality of states and weakens
>> >the distinction between states, trending
>> >toward one huge nation state.
>
>JKK > It seems that you remember the 55 mph game as well.
>
>It's not restricted to highway laws either.

Highway funding does tend to be the lever, though (21 drinking age, etc.).
From: Joerg on 12 Jun 2010 15:31
krw(a)att.bizzzzzzzzzzzz wrote:
> On Sat, 12 Jun 2010 08:10:42 -0700, Joerg <invalid(a)invalid.invalid> wrote:
>
>> dagmargoodboat(a)yahoo.com wrote:
>>> On Jun 11, 10:43 am, Joerg <inva...(a)invalid.invalid> wrote:
>>>> dagmargoodb...(a)yahoo.com wrote:
>>>>> On Jun 10, 9:37 pm, Joerg <inva...(a)invalid.invalid> wrote:
>>>>>> dagmargoodb...(a)yahoo.com wrote:
>>>>>>> On Jun 9, 8:37 pm, krw wrote:
>>>>>>>> On Wed, 09 Jun 2010 15:40:26 -0700, Joerg <inva...(a)invalid.invalid> wrote:
>>>>>>>>> Ah, so property tax remains. State sales tax remains. State income tax
>>>>>>>>> remains. No thanks, then I don't want the "fair tax".
>>>>>>>> Of *course*. The "Fair Tax" is only federal. It would be UNCONSTITUTIONAL
>>>>>>>> for the feds to dictate to the states how to raise revenue, or to do it for
>>>>>>>> them.
>>> [snip]
>>>
>>>>>> That is simply not true. It was discussed here ad nauseam that they will
>>>>>> still have to file their state tax returns as usual.
>>>>> Obviously, but that's STATE. Federal goes away.
>>>> So? What's the tangible benefit for Joe Q.Public in terms of compliance
>>>> effort and cost? Next to nothing ...
>>> All the time you spend tax planning and retirement planning to avoid
>>> tax, for one example. All the time and energy companies spend
>>> avoiding tax. Investment tax.
>>>
>> So state taxes don't need to be planned for? Why is that?
>
> State taxes are, by far, simpler than federal income tax. Goin to the "Fair
> Tax" would be a major simplification, even if the states didn't follow, which
> they will (pretty much have to).
>

In CA and many other states they aren't simpler. They'll still want to
know all your work income, investment income and all that stuff. Pretty
much the same as federal now except that some deductions, exemptions and
the standard deduction have different Dollar amounts.

Sorry, I do not see any significant compliance effort reduction and I
bet the fee I'd pay my CPA would remain roughly the same.


>> Retirement planning will all get upset and become rather intense if they
>> don't exempt savings beyond Roths et cetera. Because people would have
>> to find a decent place outside the country.
>
> James has conceded this point.
>

To some extent, yes. But it goes on and on. Suppose a couple that
retires wants to sell their house that, if they lived frugally, is
largely paid off. From already taxed money. They want to buy that big
RV, live in it and travel our country, one of those $150,000 Fleetwoods
maybe. Now they would be socked with an extra $34,500 tax. Ain't nothing
fair about that, is there?


>>> Joe Q. isn't the guy who carries the burden, but at least he'd get his
>>> full paycheck, with *no* deductions.
>>>
>> Sorry, wrong again. Obviously, from what you and Keith have written
>> here, he will see state tax withholding.
>
> If the state doesn't follow, sure. Anyone living (or working) in a state with
> an income tax will still have withholding.
>

Which means most states and, therefore, the majority of Americans.

> <snip>
>
>>> You don't get it--this is _your_ chance. You can just wait for
>>> someone else to do something you hate then grumble about it, or you
>>> can offer a solution.
>>>
>> I did that: Fix the current system. Roll back exemptions and pork, ditch
>> AMT or at least properly inflation-index it, and so on. I cannot imagine
>> that you seriously believe that a so-called "fair tax" won't get
>> clobbered the same way the once simple income tax system has been. Just
>> faster, because budget shortfalls will happen faster.
>
> If it has *any* exemptions, yes it will. Washington likes to grease slippery
> slopes. If there are *no* exemptions it's harder to slide into the abyss
> we're in now. That said, before the Fair Tax could be implemented the 16th
> amendment needs to be repealed. That won't happen either.
>
>> As an engineer I am used to not just completely toss a clients system
>> and suggest a re-design from scratch. First I look at it, see what needs
>> to be fixed and optimized, and then come up with detailed suggestions
>> where, how, and what it's going to take.
>
> ...and if you came across a design as broken as the US is now you'd change
> some resistor values?
>

Needs a lot more than that. But the same is true for many designs that
get chucked onto my lab bench. Still it is much better not to completely
place the apple cart upside down, hoping it'll miraculously fall onto
its wheels and run again. In electronics I could do a brand-new design
and it would work but the NRE might not be bearable for some clients.
With a drastic tax system revamping there is a whole lot more risk than
a shortage in the collection amounts. It could trigger a major stampede
in the financial markets if we aren't very, very careful. The way the
current proposals about the "fair tax" are written I'd venture to say
that it will trigger one.


> <snip>
>
>>>> And an increased consumption-based tax fosters an increase in
>>>> underground economy. Big time.
>>> a) So does increased income tax. b) If not this, we'll be getting a
>>> VAT, plus higher income taxes, plus more. Do you like that better?
>>>
>> If spending is rampant we will get that anyhow and it doesn't matter
>> what the tax is called. A flat sales tax isn't miraculously going to
>> make such increasing debt go away. In fact, it makes it a whole lot more
>> unpredictable. We have to start looking farther than our own borders.
>> Case in point is Germany where for many years consumers have clamped
>> down. They just kept a whole lot of their money, didn't spend it, and
>> that has resulted in serious VAT shortfalls. If the VAT or "fair tax" or
>> whatever is your only source you're screwed if that happens.
>
> In high unemployment the income tax falls short, too. Many states are feeling
> this pinch (no, it doesn't explain CA). The "Fair Tax" does make funding
> government more obvious, which would tend to limit it more.
>

I am all for limiting.


> [*] I would suggest a straight sales tax or flat income tax for this purpose.


A flatter income tax would certainly boost our economy. But ...

--
Regards, Joerg

http://www.analogconsultants.com/

"gmail" domain blocked because of excessive spam.
Use another domain or send PM.
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