Ron Paul takes the lead in Iowa.

[Felch]

Let me get this straight. 50 million households in the US have an average credit card debt of over $15,000. And you guys think that we need more spending and less saving?

[giblets]

You haven't given any reason to think a switch from income tax to sales tax would reduce credit card debt, aside from your suggestion that some people accumulate money for reasons other than the ability to exchange that money for goods and services. I guess some people just want to roll around in it instead...?

[Al B. Sure!]

Has this been posted?

http://graphics.thomsonreuters.com/11/12/Solicitation2.pdf

[Aeson]

Is the new money the bills that are tinted slightly less green and more other-color-ish than they were before?

consumption taxes
income taxes

[Felch]

You haven't given any reason to think a switch from income tax to sales tax would reduce credit card debt, aside from your suggestion that some people accumulate money for reasons other than the ability to exchange that money for goods and services. I guess some people just want to roll around in it instead...?

I assumed you were joking when you asked that. In fact, I still suspect that you're joking. It's hard to believe that a cognizant human being would need this explained.

We already have ways of encouraging savings in the tax code. Individual Retirement Accounts allow people to defer taxation on their income. They are very popular. So the idea of somebody accumulating money isn't outrageous. Yes, eventually they'll probably spend it, but they might pass it down to their heirs, or give it to charity, or use hundred dollar bills to light cigars. It's reasonable to believe that the same sort of people who take advantage of IRAs would take advantage of a consumption tax to pay down debt, and increase their savings. I'm not talking about Scrooge McDuck swimming in gold coins. I'm talking about letting regular families get out of the serfdom of perpetual debt, and start building nest eggs, by shifting taxation from when they earn their money to when they buy things.

[DaShi]

You do realize that sales taxes are regressive, don't you?

[Boris Godunov]

Boris, profits are not the same as capital. Please learn basic economic terms.

Don't play dense. Where does capital come from, if not from profit? Isn't part of the "Capital Drives the Economy!" myth that these corporations need to have low taxes so they can have increased profits so they can turn those profits around and invest them back into the economy? Yes.

Ignoring the very basic fact that a reduction in consumer spending inhibits economic growth is baffling. And instituting inherently regressive taxation would just drive the already tepid consumer spending down even further and wreak havoc on the economy.

[Boris Godunov]

I'm talking about letting regular families get out of the serfdom of perpetual debt, and start building nest eggs, by shifting taxation from when they earn their money to when they buy things.

Yeah, I'd love to hear how that family with $15,000 in credit card debt is going to get out of serfdom when you've just made everything they need to buy more expensive.

You're ignoring the fact that a large portion of the consumers who drive the economy don't pay income taxes, too. You're advocating one of the biggest possible dicking-over of the poor that's possible in our economy.

[HalfLotus]

Despite the smears, Paul continues to gain national popularity:

Five days ago, on Sunday, December 18, Gallup had Iowa frontrunner Ron Paul trailing Gingrich by 18% nationally among registered GOP voters, and Romney by 14%.

Today, Gallup shows that Gingrich’s lead over Paul has shrunk to 13%, and Romney’s to the single digit range — 9%.

In other words, Ron Paul has gained 5% on both Gingrich and Romney among Republican voters nationally over the past 5 days, despite aggressive and fraudulent attempts by the Establishment media to discredit and marginalize him.

Here's a brief timeline to put it in context...

He's still #1 in Iowa as well.

Next step for the establishment? Probly time for good old-fashioned senior citizen fear-mongering by welfare state apologists.

[Felch]

You do realize that sales taxes are regressive, don't you?

The regressive nature can be balanced by exempting basic necessities and issuing tax rebates to qualifying households. It's a legitimate concern, but it's also easy to fix.

Don't play dense. Where does capital come from, if not from profit? Isn't part of the "Capital Drives the Economy!" myth that these corporations need to have low taxes so they can have increased profits so they can turn those profits around and invest them back into the economy? Yes.

Capital comes from the accumulation of wealth. This can be profit, or it can be raised from wage earners who invest in a company. Profits can just as easily be disbursed to stock holders as they can be saved by the company. In fact, if I were an investor, I'd be happy supplying the capital myself, and receiving dividends from the profits. That way, I could decide what to do with the return on my own investment.

Ignoring the very basic fact that a reduction in consumer spending inhibits economic growth is baffling. And instituting inherently regressive taxation would just drive the already tepid consumer spending down even further and wreak havoc on the economy.

Consumer spending helps certain sectors, like retailers, but it isn't the only basis for economic growth. Creating things is what makes the economy great. If we took our earnings and spent them on ephemeral goods, while our economic competitors spent them on capital investments, then who is going to have the better economy in the long run? Consumption is for colonies, production is what makes an economy strong.

As far as making things more expensive, you're right. But they'll have more money if they're not getting it taken out of their paychecks. And everybody pays income taxes, through their FICA withholdings. We need to eliminate payroll taxes along with income taxes, and let the programs be funded from the general treasury, just like Imran said. With the elimination of FICA and exemptions for basic necessities, working class families should come out ahead. And that would give them the money they need to pay down debt.

[kentonio]

Despite the smears, Paul continues to gain national popularity

I posted links above which prove that Paul has previously admitted to writing the things which he now says he didn't write. How exactly is any of this a 'smear'? Why does Paul get this magic free pass from you guys that you would never give to any other politician?

[Jon Miller]

The regressive nature can be balanced by exempting basic necessities and issuing tax rebates to qualifying households. It's a legitimate concern, but it's also easy to fix.

I would be a lot easier with this solution if people who proposed it included tax rebates (to qualifying households, or a set amount to everyone) in their initial presentation. As it is, it is just what some include when you point out the regressive nature.

Considering all the people who are against any sort of 'wealth distribution' (which always is happening, the question is should it be progressive or regressive?) I am very hesitant to support this (despite the fact that it could work in some way).

JM

[giblets]

I assumed you were joking when you asked that. In fact, I still suspect that you're joking. It's hard to believe that a cognizant human being would need this explained.

We already have ways of encouraging savings in the tax code. Individual Retirement Accounts allow people to defer taxation on their income. They are very popular. So the idea of somebody accumulating money isn't outrageous. Yes, eventually they'll probably spend it, but they might pass it down to their heirs, or give it to charity, or use hundred dollar bills to light cigars. It's reasonable to believe that the same sort of people who take advantage of IRAs would take advantage of a consumption tax to pay down debt, and increase their savings. I'm not talking about Scrooge McDuck swimming in gold coins. I'm talking about letting regular families get out of the serfdom of perpetual debt, and start building nest eggs, by shifting taxation from when they earn their money to when they buy things.

I can't believe a cognizant human being wrote this. The only reason an IRA provides an additional incentive to save is because people normally have to pay taxes on interest and capital gains so if they do save their income gets double taxed. And if we can let people save their earned income through an IRA so that they don't get double taxed then switching from income tax to sales tax does not provide any additional incentive to save.

Also, the reason they get into credit card debt is because their buying power is less than what they currently wish to consume. Income tax and sales tax both reduce buying power. Of course, as already pointed out it's much easier to make an income tax progressive which means it has a much smaller impact on the buying power of the poor who are credit card "serfs".

[Felch]

I can't believe a cognizant human being wrote this. The only reason an IRA provides an additional incentive to save is because people normally have to pay taxes on interest and capital gains so if they do save their income gets double taxed.

You're ignoring the fact that contributions to traditional IRAs are tax deductible. If you're making 50,000 dollars, and you put 5,000 into an IRA, you'll only be taxed as if you earned 45,000. Which was the whole point of what I was saying. Tax codes can influence savings.

And if we can let people save their earned income through an IRA so that they don't get double taxed then switching from income tax to sales tax does not provide any additional incentive to save.

IRAs are limited in how much you can contribute per-year. Sales tax would let you save as much as you want, tax free. Therefore, it does provide an additional incentive to save.

Also, the reason they get into credit card debt is because their buying power is less than what they currently wish to consume. Income tax and sales tax both reduce buying power. Of course, as already pointed out it's much easier to make an income tax progressive which means it has a much smaller impact on the buying power of the poor who are credit card "serfs".

Every dollar spent paying credit card debt would be untaxed. That gives debtors a subsidy to help them get out of debt. And I've already pointed out two simple methods of alleviating the regressive nature of a sales tax.

[Felch]

I posted links above which prove that Paul has previously admitted to writing the things which he now says he didn't write. How exactly is any of this a 'smear'? Why does Paul get this magic free pass from you guys that you would never give to any other politician?

Paul gets a free pass from me because he's the only guy who wants to end the war on drugs. It's why I don't care about his gold standard obsession, or his history of racist newsletters. I only care about issues, and the most important issue to me is ending this stupid drug war. Every other candidate is as repulsive to me as Rick Santorum is to Asher.