FairTax

[timwhit]

Has anyone read about FairTax before? It sounds like an interesting idea in concept. I have my doubts that the federal income tax will ever be eliminated in my lifetime though.

 

[Bozo]

Riiiight. so a person living on $1000.00 a month Social Security and pays no income tax, now has to pay $0.30 on every dollar to buy FOOD. Most states exempt sales tax on food.
The rich get richer and the poor get poorer while the middle class pays all the bills.

And, you can't honestly think any company will lower their prices because of the removal of taxes. That extra money will go into the CEO's and board members pockets. Which means higher payoffs to the politicians.

Bozo :joker:

 

[timwhit]

Based on the below chart wouldn't a single person earning $1000/month get almost their entire earnings exempted from any taxes?

 

[ddrueding]

While I can appreciate the concept of eliminating the IRS, and agree that the current system is irreparably broken, I think an income tax is still preferable to a consumption tax. Didn't we have a discussion of a flat tax a couple years ago?

The problem with consumption taxes are that the rich spend a smaller amount of their earnings than the middle class do and therefore would have an effectively lower tax rate. We can ignore the poor, since every reasonable plan out there either doesn't tax them or gives it back.

We just need something simple. Hell, just take the current system and remove all deductions, loopholes, and exceptions. Have your taxes evaluated by your employer and deducted during each pay period. No annual re-evaluation where those in the know save and those who don't get screwed.

 

[jtr1962]

Riiiight. so a person living on $1000.00 a month Social Security and pays no income tax, now has to pay $0.30 on every dollar to buy FOOD. Most states exempt sales tax on food.

And food would be exempt under the FairTax as well, as would anything else currently exempt under most state tax laws. This myth of the poor being taxed more comes up every time the idea of a national sales tax is floated. Fact is a single person making $10 an hour in a place like NYC currently pays a good 25% of their income in income, FICA, and other taxes. If anything, that sounds even worse than a FairTax.

And, you can't honestly think any company will lower their prices because of the removal of taxes. That extra money will go into the CEO's and board members pockets. Which means higher payoffs to the politicians.

The free market will ensure that sooner or later someone will lower their prices once their expenses (i.e. taxes) go down. What you said only applies in the case of a monopoly.

Look at it this way-we've tried the income tax and it's been a massive failure. It's inherently complex, it's inherently unfair (the working poor still pay as much as 25% of their wages in income and FICA taxes), it invades your privacy, it requires a huge beaurocracy, etc. We have a whole army of accountants and tax lawyers who drain the economy without creating any real wealth. We have armies of drug dealers who don't pay a dime in taxes but would under FairTax. What's good about FairTax is that you go from about 300 million tax payers filing complex tax returns (counting all individuals and businesses) to some tens of millions of businesses simply sending in some percentage of their gross sales. Much simpler to implement and to catch cheaters. More importantly, there's less incentive to cheat since the customer pays the tax, not the business collecting it.

Just to be sure, I would only be in favor of the FairTax if income taxes on all levels of government are made unconstitutional. The EU passed the VAT some years ago under the promise of eliminating income taxes. Unfortunately, once politicians got their grubby paws on the extra money they were reluctant to give up the extra money. We don't need this happening here.

I'll also note that taxes on trade, which is really what the FairTax is, inherently keep government smaller. If trade is taxed too money, it withers and with it so do the taxes on trade. Higher income tax rates on the other hand don't cause a reduction in income and in turn less taxes. Rather, they allow government to get more revenue and become too large. Regardless of how taxes are collected, sooner or later we're going to have to start reducing entitlements and welfare (including corporate welfare). Medical entitlements alone threaten to bankrupt us. By eventually starving the government of revenue, the FairTax will force politicians to rethink how they spend our money very carefully.

 

[jtr1962]

We just need something simple. Hell, just take the current system and remove all deductions, loopholes, and exceptions. Have your taxes evaluated by your employer and deducted during each pay period. No annual re-evaluation where those in the know save and those who don't get screwed.

And what do you do for businesses? There's just no simple way to have an income tax on businesses. If you tax solely by gross income (revenue) then a business with huge income and huge expenses, but little profit, would pay an enormous amount in taxes. Another business with less income, but far less expenses, and hence more profit, would pay way less. And once you start taking business expenses into account when figuring taxable income, the whole thing blows up in your face again. There is just no such thing as a simple income tax. A sales tax, on the other hand, is easy. Send in x% of your gross receipts of taxable items. The government can decide which items are exempt from sales tax. This adds a little complexity, but nothing like even the simplest income tax. And let's face it, do you really want the government knowing your income? I sure as heck don't. The less the government knows about me the better. Picture in some future time the US government gets overthrown, and the masses are out to punish the upper classes. Don't laugh-the upper classes usually fair worst in any coup d'etat. Very easy to look through IRS files to find out whose house to go to. Any government records can be misused. The fewer records kept by governments on individuals, the better.

 

[Mercutio]

Any tax based on sales rather than income is regressive - placing an unfair burden on those who make less money. The only people who will actually pay less under the proposed fairtax than the current system are those who either make less than $15,000 (mostly they aren't paying taxes already) or make more than $200,000 (Hmm...). That's pretty much the opposite of fair.

 

[jtr1962]

You could get around the smaller percentage tax burden on higher income people by taxing luxury items at a higher rate. Sure, it adds complexity, and it's probably not in keeping with the FairTax philosophy of simplicity, but if milking the rich is your goal, then an income tax is not the only way to do it.

Even assuming that the middle class end up paying a higher percentage of their taxes than they do now, the FairTax would grow the economy enough so they would still be better off. Another thing to look at also are employer taxes. Under the current system, a person making $500 a week costs their employer an additional ~30% in FICA, unemployment, disability and other taxes. Under FairTax, this entire $650 (salary plus employer taxes) can be paid directly to the employee at no additional cost to the employer. That's already an instant 30% raise for most people.

Another important factor here is the time saved each year by not having to file tax returns. Most people hate doing so with a passion. Any change which eliminates that burden would have widespread popular support.

 

[Bozo]

Another thing to look at also are employer taxes. Under the current system, a person making $500 a week costs their employer an additional ~30% in FICA, unemployment, disability and other taxes. Under FairTax, this entire $650 (salary plus employer taxes) can be paid directly to the employee at no additional cost to the employer. That's already an instant 30% raise for most people.

Maybe all that snow you got is clouding your thinking. There is no way in hell any company is going to give an employee the extra money from not paying taxes. It will all go to CEOs, upper management, and board members.

Bozo :joker:

 

[timwhit]

Maybe all that snow you got is clouding your thinking. There is no way in hell any company is going to give an employee the extra money from not paying taxes. It will all go to CEOs, upper management, and board members.

Bozo :joker:

Let's say John Doe makes $100k/year. He is currently paying 7.65% of his salary for FICA, his employer is paying the same amount on his behalf. This is equal to $7,650/year each or $15,300 total. Let's say the government eliminates FICA and goes with FairTax or some other tax system. Don't you think John would wonder what happened to the $7,650 he should be getting from his company? This isn't peanuts, the average person would notice this. So, John gets pissed and leaves this job for another company that knows better and John gets paid his full amount. Let's say this happens a few hundred thousand times, well the majority of corporations will learn a lesson. It's very expensive for companies to have high turnover. Something like 30% of that person's salary. I don't think most companies are dumb enough to make this kind of error more than a few times. Remember that the labor market is a free market also, wages will follow if FICA is eliminated.

And if you are that worried, how hard would it be to write into the bill that employers have to tack on 7.65% to everyone's paycheck that they are paying that tax for the day the law is passed?

 

[jtr1962]

Maybe all that snow you got is clouding your thinking. There is no way in hell any company is going to give an employee the extra money from not paying taxes. It will all go to CEOs, upper management, and board members.

Funny but something just occurred to me. All that managerial dead weight you mentioned can no longer be written off as a business expense. I tend to think the FairTax will make companies streamline their operations as much as possible. That includes getting rid of all those do-nothing top management positions which the government now partially pays for. Maybe we'll actually go back to a system where the people whose labor brings in the revenue see the bulk of the profits.

And as Tim mentioned, the job market is a free market system as well. If one company doesn't add in the benefits to your pay, others certainly will.

 

[Bozo]

Hmmm... the only "Tax" that I am aware of that is jointly paid by the employee and employer is Social Security. I don't think that Social Security will go away because of a Fair Tax program, for Income Tax.

Bozo :joker:

 

[timwhit]

Hmmm... the only "Tax" that I am aware of that is jointly paid by the employee and employer is Social Security. I don't think that Social Security will go away because of a Fair Tax program, for Income Tax.

Bozo :joker:

You are thinking of FICA, which covers Social Security and Medicare.

Social Security and Medicare wouldn't go away with FairTax, but it's revenue source would change. The money would come out of the general tax fund, rather than being levied individually.

From the Wikipedia article I linked to in the first post:

The Fair Tax Act (H.R.25/S.1025) is a bill in the United States Congress for changing tax laws to replace the Internal Revenue Service (IRS) and all federal income taxes (including Alternative Minimum Tax), payroll taxes (including Social Security and Medicare taxes), corporate taxes, capital gains taxes, gift taxes, and estate taxes with a national retail sales tax, to be levied once at the point of purchase on all new goods and services.

 

[sechs]

First, let's stop calling it "FairTax." There's nothing inherently fair about taxation; some people will always pay less when they should pay more, and vice versa -- with nothing said about gain from the spending of the proceeds.

The problem that I see with a sales tax is that it is regressive. Income tax can (and, if you throw out the baloney in our system, is) progressive. And the fact of the matter is, once we switch systems, the lobbies will get in there and put in the same kinds of loopholes and deductions that we have now.

So, why spend all of the time and money to switch to a system which initially will be the opposite of what most people consider good and eventually won't be any better than what we have now?

 

[Howell]

Once basic needs are exempted is it really important that the sales tax isn't "fair"?

 

[timwhit]

Once basic needs are exempted is it really important that the sales tax isn't "fair"?

It's not fair unless everyone can afford a 50" 1080p LCD television. ;-)

 

[jtr1962]

Even if in the end it's no more "fair" than the income tax (which isn't really very fair) it'll be a heck of a lot simpler to implement. And finally April 15 will be just another day on the calender for most people. Sure, accountants and lawyers will fight this tooth and nail for obvious reasons, but in the end it'll benefit just about everyone else.

BTW, the notion that the working poor currently don't pay taxes under our system is a myth. Maybe they don't-if they happen to have enough kids and get a decent amount of EIC. If you're single, forget it. At best the EIC equals the amount you pay in FICA taxes. And after roughly $5500 it starts phasing out. A single full-time worker earning minimum wage can't claim a dime in EIC because they make too much. When I used to earn $7 an hour (equivalent to maybe $10 an hour now-basically working poor) I saw $220 of my $280 paycheck. And I more or less broke even come tax time. Add in sales tax I paid over the course of the year and an easy 30% of my low wages were gone.

All those who are against a sales tax because of its "regressive effect on the poor" should push to reform the income tax so that anyone making under about $25K (more in a high cost of living area like NYC), including single people, don't have to pay a dime in taxes. No federal, state, local, or FICA deductions whatsoever.

 

[Howell]

Even the accountants I know are for a "fair" or flat tax. Haven't asked any lawyers.

 

[Mercutio]

All those who are against a sales tax because of its "regressive effect on the poor" should push to reform the income tax

Any sales tax is regressive. I'm not suggesting that tax codes shouldn't be reformed. I am suggesting that taxation based on sales as the sole method of funding government programs is going to result in a shifting of burdens away from the people who can best afford to pay taxes.

Even 10% of your $10/hour means a lot more to you than 30% of (say) my $45/hour. That's just math. I've got $31.50 of my money to cover expenses and saving while you're worried about basic needs whether you have $9 or $10 of your income. That's just math, man. I'm saying that those of us who can buy a $4 cup of coffee every morning on the way to work without considering what that's going to do to our personal finances (or, in my case, 40 or so $3.50 comic books a month) probably ought to face a little more of the burden than a guy who notices when the price of his favorite cereal goes up $.50.

 

[Howell]

"Regressive" is not automatically bad just like progressive is not automatically good.


Main Entry:
re·gres·sive Listen to the pronunciation of regressive
Pronunciation:
\ri-ˈgre-siv\
Function:
adjective
Date:
1634

1 : tending to regress or produce regression 2 : being, characterized by, or developing in the course of an evolutionary process involving increasing simplification of bodily structure 3 : decreasing in rate as the base increases <a regressive tax>

 

[Mercutio]

"Increasing simplification of bodily structure " would be acceptable. However, the use in question here is definition #3: decreasing in rate as the base increases, which I think we can agree in fact and in practice to be a bad thing.

 

[jtr1962]

Any sales tax is regressive. I'm not suggesting that tax codes shouldn't be reformed. I am suggesting that taxation based on sales as the sole method of funding government programs is going to result in a shifting of burdens away from the people who can best afford to pay taxes.

Even 10% of your $10/hour means a lot more to you than 30% of (say) my $45/hour. That's just math. I've got $31.50 of my money to cover expenses and saving while you're worried about basic needs whether you have $9 or $10 of your income. That's just math, man. I'm saying that those of us who can buy a $4 cup of coffee every morning on the way to work without considering what that's going to do to our personal finances (or, in my case, 40 or so $3.50 comic books a month) probably ought to face a little more of the burden than a guy who notices when the price of his favorite cereal goes up $.50.

OK, let's do it a little different. We agree that the poor shouldn't be taxed at all, and those who make well above average should be taxed more than those who are middle class. How about a sales tax with the following characteristics:

1) Basic necessities like food and items of clothing costing under $100 are exempt.

2) Rent under a certain amount per month ($1500?) is exempt.

3) Luxury items, defined as those costing at least 50% more than the average retail price for a particular item, are taxed at twice the regular rate, or 46% in the case of the proposed Fair Tax.

4) Luxury housing is subject to the regular sales tax. Non-luxury housing isn't. The determination of whether housing is luxury or not is based on its sales price relative to a lowest cost unit of the same square footage in the same area. Or perhaps you could subject entire neighborhoods to the luxury tax. Hard to argue that all of midtown Manhattan isn't luxury housing, for example. Sure, this part gets complicated, but it's nowhere near as bad as any income tax system.

I also think a wealth tax in conjuction with a sales tax might not be a bad thing. Nobody can reasonably use more than, say, $10 million unless they spend it on expensive, nonsense items. Have a progressive tax on all net worth in excess of $10 million. Perhaps 10% of the first $90 million over $10 million, eventually rising to 100% for any wealth in excess of $1 billion. Is it fair? I think so. Nobody with that kind of wealth earned it in the conventional sense. Rather, they gamed the system in their favor or got very lucky. Blind luck shouldn't be rewarded under any system, at least not to the extent of tens of millions of dollars. The net effect of a wealth tax would be to drop salaries on the high end (no more $600 million CEOs), discourage the very rich from working (and thus give someone else a shot a making money), drop the price of luxury housing (and to some extent regular housing, making it more affordable), plus a bunch of other things. Any money taken here could be used to reduce the sales tax burden on the middle class by lowering the rate.

[rant]

Don't get me wrong. I'm not against disparities of wealth in society. It gives people something to strive for. What I am against is the disgusting current situation where the wealthiest 1% hold thousands of times more wealth than the poorest 10%. I agree multimillionaires have a place in society. However, 100 people with $10 million each will do far more good than a single person with $1 billion. Nobody should be worth tens or hundreds of billions. Nobody should be earning $20 million a year like many celebrities. There's a difference between striving to be financially independent and naked, unmitigated gluttony. As a person of modest means, I'd honestly be dumbstruck if $1 billion fell into my lap. Probably the only thing I could reasonably think to do with it would be to keep $10 million for myself, and give a few million each to several hundred people who either spent their lives working their asses off, or who were poor due to a perpetual run of bad luck. I sure as sh*t wouldn't go buy a yacht or a private plane or an island or even a luxury automobile. I need those like a hole in the head. Three months down the road none of that crap would do squat for me. The only thing of value money could ever give me is freedom from having to punch a clock and do someone else's bidding.

[end rant]

 

[jtr1962]

BTW, if anything I just wrote above sounds incoherent, it's because I spent 18 hours today assembling regulator boards full of components the size of fleas. In other words, I can't even see straight right now.

 

[Tannin]

the upper classes usually fair worst in any coup d'etat

Errr .... Which planet are we discussing here? It's certainly not Planet Earth. The number of coups in which the upper classes have suffered worse than the poor are few, very few. In all of recorded history, you could count them on your fingers. Thinking about it a little more, it occurs to me that you could probably count them on your thumbs. I was going to cite the two obvious examples where the rich lost out - the French and Russian Revolutions - but then I though a bit harder and remembered that the upper classes, in both cases, fell into three groups: those that got killed (a quite small number, in point of fact), those that were reduced to poverty, and those that managed to retain a lot of wealth either offshore or through some influence peddling (by far the majority, certainly the case in the French Revolution, which was the bloody one). Compare this with the fate of the poor: millions - and I do mean millions died. Mostly they starved to death, but the other great killer of the nameless poor was war. And remember that here I am thinking of the worst[/i[ examples I can bring to mind, the ones least favourable to my case. Whichever way you slice it, it's the poor that suffer most.

 

[Stereodude]

I also think a wealth tax in conjunction with a sales tax might not be a bad thing. Nobody can reasonably use more than, say, $10 million unless they spend it on expensive, nonsense items. Have a progressive tax on all net worth in excess of $10 million. Perhaps 10% of the first $90 million over $10 million, eventually rising to 100% for any wealth in excess of $1 billion. Is it fair? I think so. Nobody with that kind of wealth earned it in the conventional sense. Rather, they gamed the system in their favor or got very lucky. Blind luck shouldn't be rewarded under any system, at least not to the extent of tens of millions of dollars. The net effect of a wealth tax would be to drop salaries on the high end (no more $600 million CEOs), discourage the very rich from working (and thus give someone else a shot a making money), drop the price of luxury housing (and to some extent regular housing, making it more affordable), plus a bunch of other things. Any money taken here could be used to reduce the sales tax burden on the middle class by lowering the rate.

Wow, I think I can officially label you a socialist. It must be nice to live in some delusional utopia where you think life is a big lottery and some people get lucky and make it big. The people who make it big aren't generally lucky. Generally they're people who took big risks and made it big. Punishing success is a very dangerous thing to do because someone has to foot the bill for all the "poor" people who aren't paying their fair share.

Even if we assumed you have half a clue what you're talking about, you don't take into account human nature. If you tax 100% of the wealth over 1 billion dollars do you know how much you'll get in taxes. $0. No one will sit by and let 100% wealth over $1 billion dollars get taken away. They will find a way to shield it from the taxes, they will move to another country with their money, they will do something, but they're not going to sit by and take that.

For example, lets say you tax income over $1 million a year at 100%. No one is going to make more than $1 million a year. They will instead make $1 million a year, and get a ton of perks from the company to compensate for the lower salary. People will always find a way around the system.

Here's a little graph for you to choke on.

 

[ddrueding]

Nice graph, stereodude.

 

[jtr1962]

The graph shows the upper 25% with much of the tax burden. That's upper middle class, a group I'm not concerned with here as they usually get there through hard work. The upper 1% has a relatively small share of the tax burden compared to their ability to pay. Under Hong Kong's system I think the upper 1% pay almost all the taxes (and the top rate is only 15% IIRC).

The people who make it big aren't generally lucky. Generally they're people who took big risks and made it big.

"Taking a risk and making it big" is the very definition of luck. And unfortunately thanks to the hoarding of wealth by the upper 1% few people are in a position to have much to risk, even if they wanted to. Basically what I'm interested in here is increasing the opportunties for the lower classes to acquire wealth. In a society where most of the wealth and the means of production is controlled by a few, it's practically impossible for an average person to become even wealthy enough to quit their job if they're pre-Social Security age. Indeed, hourly wages are just another form of indentured servitude given the level of average wages relative to the cost of living.

Funny how you or really anyone else here can defend the current system under which your chances of becoming even moderately wealthy are close to zero. You and probably everyone else here will be working until their 70s at least just to get by. I don't plan to officially retire at all because I doubt I would ever be able to.

You might want to read this piece on the failings of capitalism. I can't say I like their solution of "participatory economics" much though. I think distributism without the religious overtones is a better, fairer system.

P.S. I'm not a socialist. One of the cornerstones of socialism is an income tax to redistribute wealth. I hate any and all taxes on income. My proposed tax on wealth was designed simply to correct a massive inbalance of wealth which currently exists, not to distribute it evenly as is done under socialism. Nothing is more stupid or encouraging of laziness than to distribute wealth evenly. Under my system people can still get rich, just not billionaires. That's plenty of incentive for most of us.

 

[Stereodude]

It's not the job of the gov't to correct an imbalance of wealth. Not to mention the US is far more balanced than most countries.

 

[Stereodude]

The graph shows the upper 25% with much of the tax burden. That's upper middle class, a group I'm not concerned with here as they usually get there through hard work. The upper 1% has a relatively small share of the tax burden compared to their ability to pay. Under Hong Kong's system I think the upper 1% pay almost all the taxes (and the top rate is only 15% IIRC).

I don't think you understand where the threshold is for the 25% or 1% or whatever category you're talking about.

Here are the income split points (AGI) and the average tax rate paid by each from 2005:
1% - $364,657 - 23.13%
5% - $145,283 - 20.78%
10% - $103,912 - 18.84%
25% - $62,068 - 15.86%
50% - $30,881 - 13.84%
Bottom 50% - $0 - 2.98%

Exactly how much more lopsided can we make the tax system?

 

[Stereodude]

Here are some interesting statistics about the 37 million "poor" people we have in the US:

* Forty-three percent of all poor households actu*ally own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

* Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

* Only 6 percent of poor households are over*crowded. More than two-thirds have more than two rooms per person.

* The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

* Nearly three-quarters of poor households own a car; 31 percent own two or more cars.

* Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

* Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

* Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

Another Chart letting us know how bad the poor really have it

 

[jtr1962]

Here are some interesting statistics about the 37 million "poor" people we have in the US:

* Forty-three percent of all poor households actu*ally own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

* Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

* Only 6 percent of poor households are over*crowded. More than two-thirds have more than two rooms per person.

* The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

* Nearly three-quarters of poor households own a car; 31 percent own two or more cars.

* Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

* Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

* Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

Another Chart letting us know how bad the poor really have it

Most of those trinkets aren't terribly expensive, and quite of bit of them are probably bought used, especially the car, or even taken from dumpsters in richer neighborhoods. And I'm sure a fair amount is stolen. Also, maybe you and I have a different definition of "poor". To me poor is someone making $3 an hour, or perhaps minimum wage if they're lucky enough to get a job on the books. A family of four making $30,000 a year might be considered statistically poor, but they still are better off than a lot of others.

Also, if these poor are forced to go to a job they hate every single day until their bodies are so worn out they just can't any more, exactly how good is that? That's such a great life even if they have a few scraps from the king's table? Heck, I wanted to jump in front of the train every day when I was working shitty jobs I hated. Between the low pay, the amount of my free time it took, the pains in my body from repetitive exertions, and the boring work itself the whole situation was an existence. And incidentally how many of these poor have to work two or even three such crappy jobs to get the kind of lower-middle class lifestyle you described? Not being in charge of your own destiny, or even contemplating a time when you can be, is what is so very wrong nowadays.

 

[jtr1962]

Oh, I forgot to mention, as far as the poor "owning" their own homes, I have two words-subprime loan. Between these shady loans, and borrowing what little equity there was in their homes, many "poor" managed to live above their means, at least up until now. Look for lots of foreclosures soon as these loans come due, and there's no more equity to borrow as home prices fall. Fact is the poor never owned their homes. The banks did. Nobody making $30K a year can afford a $300K home.

 

[Bozo]

The problem with that report on the poor, it doesn't give details.
I know a few people that live on $900.00 a month Social Security. That is classified as poor. They live in a house that they bought when they were working. They drive the last car they bought when they were working. They have the same color TV that they bought when they were working.
Most have a part time job but they can only work 28 hours a week or lose their SS. They work to pay the property taxes on their home so they don't have to sell it.
They don't pay income tax as they are below the taxing threshold. And the Fair Tax plan wants to take $0.30 of every dollar they spend. Not to "Fair" to me.
And, they are on Medicare, which they must pay deductables and 'co-pay'. Medicare does not cover eyes or teeth. Have a tooth ache? Tough. Need new glasses? Sorry. all that has to come out of your $900.00 a month.
The censes statistics are bogus, misleading, and waaay off the mark.

Bozo :joker:

 

[Clocker]

Oh, I forgot to mention, as far as the poor "owning" their own homes, I have two words-subprime loan. Between these shady loans, and borrowing what little equity there was in their homes, many "poor" managed to live above their means, at least up until now. Look for lots of foreclosures soon as these loans come due, and there's no more equity to borrow as home prices fall. Fact is the poor never owned their homes. The banks did. Nobody making $30K a year can afford a $300K home.

I'm sure our tax dollars will bail them out.

 

[Stereodude]

Oh, I forgot to mention, as far as the poor "owning" their own homes, I have two words-subprime loan. Between these shady loans, and borrowing what little equity there was in their homes, many "poor" managed to live above their means, at least up until now. Look for lots of foreclosures soon as these loans come due, and there's no more equity to borrow as home prices fall. Fact is the poor never owned their homes. The banks did. Nobody making $30K a year can afford a $300K home.

If you say so...

As the chart shows, some 43 percent of poor households own their own home. The typical home owned by the poor is a three-bedroom house with one-and-a-half baths. It has a garage or carport and a porch or patio and is located on a half-acre lot. The house was constructed in 1969 and is in good repair. The median value of homes owned by poor households was $95,276 in 2005 or 70 percent of the median value of all homes owned in the United States.

 

[Stereodude]

Also, maybe you and I have a different definition of "poor". To me poor is someone making $3 an hour, or perhaps minimum wage if they're lucky enough to get a job on the books. A family of four making $30,000 a year might be considered statistically poor, but they still are better off than a lot of others.

Well, there aren't 37 million of them.

Also, if these poor are forced to go to a job they hate every single day until their bodies are so worn out they just can't any more, exactly how good is that? That's such a great life even if they have a few scraps from the king's table? Heck, I wanted to jump in front of the train every day when I was working shitty jobs I hated. Between the low pay, the amount of my free time it took, the pains in my body from repetitive exertions, and the boring work itself the whole situation was an existence. And incidentally how many of these poor have to work two or even three such crappy jobs to get the kind of lower-middle class lifestyle you described? Not being in charge of your own destiny, or even contemplating a time when you can be, is what is so very wrong nowadays.

America lets people become whatever they want to be. People aren't stuck in the "caste" they're born into. If someone doesn't want to be "poor" they can change their circumstances. The constitution doesn't promise everyone to be rich. It doesn't promise that we'll all have the same amount of money or success. The gov't isn't supposed to ensure equal outcomes for everyone. That's not their job, and the tax code isn't supposed to be used to accomplish that.

 

[sechs]

It's not the job of the gov't to correct an imbalance of wealth.

So, what is the job of the government?

 

[ddrueding]

So, what is the job of the government?

Not much.

 

[Stereodude]

So, what is the job of the government?

You aren't really going to sit there and try to argue with me that the government is supposed to take money from the rich and give it to the poor?

As ddrueding points out the job of the gov't isn't much. Other than protecting the people in the country from outside influences and aggression (like other countries) they don't have many jobs.

 

[Mercutio]

I'd be more than happy to argue that the job of any worthwhile government is to create and enforce social justice.

Also, one of the jobs of the US government is to regulate interstate commerce, which covers an enormous amount of ground.