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Started By
Message
re: No income taxes. What would that look like?
Posted on 10/26/24 at 11:35 am to BCreed1
Posted on 10/26/24 at 11:35 am to BCreed1
Consumption taxes and tariffs.
If you and I get a 20% raise, we are probably going to spend it.
If we buy domestically that 20% extra the govt gets back 15% of the profit (currently) from the corporation that sold us it.
But to make more, they need to hie more.
So for example, you get $25k more now that you pay no federal taxes.
100 people do the same so USG -2,500,000
You all go buy 100 Bass Boats for $25k each.
That $2M is in the economy,
The boat costs $7000 in domestic parts and labor, and $5000 for a foreign parts, Generating $3,000 in profit.
So 15% of 3k for 100 boats is $45k recouped of the 2 Million in corp taxes
Old Price $15,000
Now there is a tariff, 30% on foreign parts, so its now $6500 in foreign parts, but they replace some of those parts with domestic parts to get back down in price
so now 2500 in foreign parts (plus 1250) in tariffs replaced with 3,000 (2500 cost, 500 profit) in US parts to get overall down to 6250
So we now add consumption taxes
the boats cost
9500 domestic, 2500 foreign, plus 3500 profit plus tax of 8,750 and 1250 tariff = $20k total
so USG makes 10k per boat plus the corp taxes of 15% of the 3500 profit(525).
10,525*100 boats would make back $1,052,500 of the $2.5 Million lost in income taxes.
Plus there are probably another $1 million in jobs which will then buy goods and so on.
Needless to say if you change numbers it collapses, and would be highly complex...
But that's the theory.
If you and I get a 20% raise, we are probably going to spend it.
If we buy domestically that 20% extra the govt gets back 15% of the profit (currently) from the corporation that sold us it.
But to make more, they need to hie more.
So for example, you get $25k more now that you pay no federal taxes.
100 people do the same so USG -2,500,000
You all go buy 100 Bass Boats for $25k each.
That $2M is in the economy,
The boat costs $7000 in domestic parts and labor, and $5000 for a foreign parts, Generating $3,000 in profit.
So 15% of 3k for 100 boats is $45k recouped of the 2 Million in corp taxes
Old Price $15,000
Now there is a tariff, 30% on foreign parts, so its now $6500 in foreign parts, but they replace some of those parts with domestic parts to get back down in price
so now 2500 in foreign parts (plus 1250) in tariffs replaced with 3,000 (2500 cost, 500 profit) in US parts to get overall down to 6250
So we now add consumption taxes
the boats cost
9500 domestic, 2500 foreign, plus 3500 profit plus tax of 8,750 and 1250 tariff = $20k total
so USG makes 10k per boat plus the corp taxes of 15% of the 3500 profit(525).
10,525*100 boats would make back $1,052,500 of the $2.5 Million lost in income taxes.
Plus there are probably another $1 million in jobs which will then buy goods and so on.
Needless to say if you change numbers it collapses, and would be highly complex...
But that's the theory.
1
Posted on 10/26/24 at 11:35 am to Taxing Authority
quote:
If you want to eliminate corporate taxes too, the required sales tax rate would be closer to 50%.
There's a couple of Nobel Prize winners in Economics who were commissioned to assist Rep. John Linder when the FairTax plan was developed who disagree with you.
Posted on 10/26/24 at 11:35 am to Taxing Authority
quote:
Are you thinking those that do not pay income taxes don't shop?
Indeed. It would be a tax increase on them.
Correct.
quote:
In order for your thought to be accurate you have to ignore who spend more money. Does the person who pays nothing spend more than those 10% responsible for 75% of the income tax?
This isn't releveant.
BS... It's totally relevant. We are talking replacing the income tax with a consumption tax. Yes. People who make more spend more. All you are wanting to talk about in your math is people who pay nothing.
That's not the complete picture. This is single and married tax bracket
12% $11,601 to $47,150 $23,201 to $94,300
22% $47,151 to $100,525 $94,301 to $201,050
24% $100,526 to $191,950 $201,051 to $383,900
32% $191,951 to $243,725 $383,901 to $487,450
Posted on 10/26/24 at 11:36 am to BCreed1
quote:It would look really bad for CPAs and the IRS
No income taxes. What would that look like?
This post was edited on 10/26/24 at 11:37 am
Posted on 10/26/24 at 11:37 am to Narax
quote:Indeed. We’ll spend it on…
If you and I get a 20% raise, we are probably going to spend it.
quote:
Consumption taxes and tariffs.
The unfortunate reality is a government that’s makes up 24% of our GDP will never be “cheap” or easy to pay for no matter what mechanism you choose.
Posted on 10/26/24 at 11:38 am to trinidadtiger
Send all the illegals back home, and the government requires less money to operate.
Schools
Prisons
Hospitals
Just to start with.
Schools
Prisons
Hospitals
Just to start with.
Posted on 10/26/24 at 11:38 am to BCreed1
We better come up with a workable plan, and soon, because our current debt-trajectory has us headed towards a financial collapse that may take generations to crawl out of.
You and I certainly couldn’t run our household such as our government currently does.
You and I certainly couldn’t run our household such as our government currently does.
This post was edited on 10/26/24 at 11:39 am
Posted on 10/26/24 at 11:38 am to VoxDawg
quote:
There's a couple of Nobel Prize winners in Economics who were commissioned to assist Rep. John Linder when the FairTax plan was developed who disagree with you.
muh appeal to authority.Posted on 10/26/24 at 11:40 am to Taxing Authority
quote:
pretty sure paying something is more than paying nothing. But maybe you disagree?
You are so wrong man. You are saying that 95% of all the people in the USA don't pay income taxes. That's BS. We both know that's not true!
As to those who actually do pay nothing, oh friggin well. Now you do.
Posted on 10/26/24 at 11:41 am to BCreed1
more money in our pockets....unfortunately there will be more demand which will drive up prices and inflation...but I'll take it 100%
Posted on 10/26/24 at 11:41 am to BCreed1
quote:Only if your in favor of a flatter less progressive tax system (I am as well). But you don’t need inflationary tariffs and consumption taxes to do it.
BS... It's totally relevant.
You can simply flattening the tax brackets.
Guess why Congress doesn’t want to do that? Its no different for any other taxation scheme.
Posted on 10/26/24 at 11:43 am to BCreed1
quote:Nope. That’s not what Ives said. About 46% pay nothing, but… but the gap from there to the top 5-10% pay very little in therms of the total taxes paid. And that is unassailable true.
You are so wrong man. You are saying that 95% of all the people in the USA don't pay income taxes.
This post was edited on 10/26/24 at 11:44 am
Posted on 10/26/24 at 11:52 am to Taxing Authority
quote:It's about revenue. These calculations fail to account for associated changes in GDP.
The unfortunate reality is a government that’s makes up 24% of our GDP
Would increasing reliance on tariffs (or the threat of them) expand GDP?
Posted on 10/26/24 at 11:54 am to BCreed1
quote:
To have no income taxes, we would need to replace 2.18 trillion dollars. Where could the gov make that up at?
I believe it was Rush Limbaugh who always used to speak about a Fair Tax. You would eliminate the income tax and raise taxes on goods. It would capture revenue from illegals who don’t contribute to income taxes but spend money in our country. It was called the Fair Tax because everyone paid the same rate essentially. I hate taxes, but I do like the idea of gaining revenue from those here illegally who are benefiting from working in our country.
Posted on 10/26/24 at 11:56 am to BCreed1
Who knows, because it will never happen
Posted on 10/26/24 at 11:57 am to NC_Tigah
quote:
Would increasing reliance on tariffs (or the threat of them) expand GDP?
Likely would do the opposite
We already had this discussion. Based on historical tax returns (which will be about 20% of GDP), we can't increase our GDP enough to make up these expenditure.b
Devolving our economy and SOL with tariffs will shrink our GDP
Posted on 10/26/24 at 11:59 am to NC_Tigah
quote:No. I wouldn’t, since so many industries are reliant on the lower cost of imported goods, tariffs will go direct to COGS with the marginal cost going to government. No different than any other tax really.
Would increasing reliance on tariffs (or the threat of them) expand GDP?
Even if one argues that the increased costs are recycled through the economy due to some mythical explosion in domestic production… that’s just a variation on the broken window fallacy.
This post was edited on 10/26/24 at 12:02 pm
Posted on 10/26/24 at 12:03 pm to Taxing Authority
quote:
Even if one argues that the increased costs are recycled through the economy due to some mythical explosion in domestic production… that’s just a variation on the broken window fallacy.
It also ignores the redistribution that tariffs create to fund those jobs.
The money diverted to that manufacturing comes from more productive, higher margin, and more valuable areas of the economy
Posted on 10/26/24 at 12:16 pm to SlowFlowPro
quote:Of course we could. Along w/ the tariff hypothetical, simply assume a hypothetical one-time concomitant inflation jump of 20% coinciding with the same amount of available consumer spending money d/t zero IC tax.
We already had this discussion. Based on historical tax returns (which will be about 20% of GDP), we can't increase our GDP enough to make up these expenditure.
The same would be true of any consumption tax.
Posted on 10/26/24 at 12:16 pm to SlowFlowPro
quote:Its worse than that. So, let’s presume tariffs spur all sorts of increased demand for domestic industry. That would require lots of capital expenditures to build factories, infrastructure all sorts of things. Where will the capital going to come from? Either we’ll have much higher interest rates in respond to the demands for capital, or the Fed will have to print more money.
The money diverted to that manufacturing comes from more productive, higher margin, and more valuable areas of the economy
Both cases are inflationary.
But the first case is particularly bad. If interest rates reverted to something like 10,12,15% servicing the federal debt alone would exceed current tax receipts. So, no doubt the fed would have to print to keep the supply up—the very definition of inflation.
Combine that with upward price pressure and the result is as terrible as it is predictable.
This post was edited on 10/26/24 at 12:17 pm
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