Text 787, 96 rader
Skriven 2006-05-31 10:12:00 av BOB KLAHN (1:123/140)
     Kommentar till en text av JOHN MASSEY
Ärende: Fairtax part 2
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FORUM:   POL_INC                              HOST: DOCS
DATE:    May-27-06 5:30am                     MSG:  0
FROM:    Bob Klahn
TO:      John Massey
SUBJECT: Tax breaks

...

 JM>>> As long as the country has people that think negative like
 JM>>> you it won't. But it is picking up a following as a grass
 JM>>> roots movement. You could help by going to FairTax.org and
 JM>>> educating yourself then let others know.

 BK>>   I have, and I am letting others know. It's a fraud with great
 BK>>   potential to do harm to our country.

 JM> Explain why you think it is a fraud.

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 Ok, I reread the comparison between the flat tax and fairtax.
 This comparison is based solely on a single flat tax bill.
 Little of it applies to the principle of the flat tax.

 I do not like either proposal, so it's not a matter of a
 preference. Though I do see Fairtax as the more frightening
 possibility, as it would the the harder to recover from is it
 turned out to be the disaster I think it would.

 I don't see how they get to confusing the flat tax with a
 consumption tax, as every flat tax proposal I have seen is a
 flat income tax. In this case they seem to have taken a VAT bill
 and confused it with a flat income tax and a flat VAT at the
 same time. As a result, the pamphlet is a bit confusing, if you
 try to analyze it.

 For that matter, I object to the term 'consumption' tax. Call it
 a sales tax, that is what it is. The term "consumption" tax
 implies somehow it's better to tax consumption, that there is
 something wrong with consumption. If you don't consume you die.
 So, if taxing something is punishing it, if the fairtax
 supporters want to call taxing income the same as punishing hard
 work, then call the fairtax punishing you for being alive. None
 of that is meaningful or accurate.

 There are many points on the comparison between the flat tax and
 fairtax in which the comparison only works when applied to one
 specific flat tax proposal, and many where the fairtax people's
 interpretation must be accepted for the points to be valid.

 This is on fairtax.org from the doc realreform_vs_flattax.pdf.

 There is one point where they give 5 steps to go from a flat tax
 back to the graduated income tax. Of those 5, only the last is
 really necessary. All the others could be true of a graduated or
 flat income tax, or false for either.

 The idea of depreciating capital costs instead of expensing them
 for one. I have often thought it might be a better idea to
 expense them even under the current tax.

 The second one is making interest expenses deductible and
 interest income taxable. I see no reason income from interest
 should not be taxable under any income tax. It would be covered
 by fairtax also, as fairtax does not care where your money comes
 from, only how much and whether you spend it.

 Step three is to tax capital income. That should be taxed just
 like earned income anyway.

 Step four is not to allow inventory purchases to be deducted
 until the inventory is sold. That could be true under flat or
 graduated income taxes, and it's desirability is something I
 have never considered. That would take some research.

 Only step 5, to graduate the tax, is necessary to go from a flat
 tax to a graduated tax.

 Throughout the pamphlet they work with assumptions of their own
 that must be true for their comparison to have any validity.
 They say this is true or that must be true. The flat tax people
 merely need to say all that are technical matters that can be
 worked out as the plan is developed into law. With that the
 comparison becomes meaningless. In any event, it all applies
 only to one flat tax proposal, if that.



BOB KLAHN bob.klahn@sev.org   http://home.toltbbs.com/bobklahn

... Work gets in the way of my offline time!
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