I no longer believe in capitalism. At all.

[Hauldren Collider]

There's another great advantage to a consumption tax, in my view--it's very visible to taxpayers. It's hard to hide a consumption tax. People internalize exactly how much government costs.

[Kidlicious]

Not when rent is exempt.

I'm I to assume that you mean rent and mortgage payments, because otherwise you are going to discourage home ownership big time. You will additionally discourage it by eliminating the tax deduction for the interest.

[Ben Kenobi]

I'm I to assume that you mean rent and mortgage payments, because otherwise you are going to discourage home ownership big time. You will additionally discourage it by eliminating the tax deduction for the interest.

Yes, when we take out payments for housing, the poor spend less of their income than rich people.

[Ben Kenobi]

it's very visible to taxpayers. It's hard to hide a consumption tax. People internalize exactly how much government costs.

Yep. Plus, instead of collecting taxes when you get paid - you get to keep that money, it only comes out when you spend it. No withholding is all kinds of awesome.

[Kidlicious]

No, we're talking about replacing the income tax with a consumption tax, moving from taxing wages to taxing spending. Rather than chasing after employers and making sure their workers are in compliance - you get the money when it comes out - to buy things. It's a much cheaper way of doing business, and the savings are enormous.

But what do I know? It works here. As special as Texas is - I'm sure it would work in other parts of the country. Maybe not California.

As I was saying. A lot of states have sales (consumption) tax. It's around 10% at most states as far as I can tell. Adding a consumption tax for the federal government of around 25% is a whole different ball game. That's around 35% of people's income. That adds 35% to the prices people pay. I'm sure retailers will love that one.

[Ben Kenobi]

As I was saying. A lot of states have sales (consumption) tax. It's around 10% at most states as far as I can tell. Adding a consumption tax for the federal government of around 25% is a whole different ball game. That's around 35% of people's income. That adds 35% to the prices people pay. I'm sure retailers will love that one.

Eliminating the income tax nationwide for a 25 percent consumption tax? Do you know how much money the US would make.

Ok, let me put it this way. Do you know how much money is spent worldwide by Americans outside of America trying to lower their American tax burden? Gobs. Eliminate that altogether, and what does that mean to American businessmen trying to do business anywhere else in the world? They will come to America. So will the Euros, the Canadians, the Australians, the Kiwis, etc.

You want to drive the point home that America is open to business? Do this.

[Kidlicious]

Yes, when we take out payments for housing, the poor spend less of their income than rich people.

Do you have a source? At a certain point rich people tend to save any extra money. Some rich I'm sure save 50% of their income.

[Kidlicious]

Eliminating the income tax nationwide for a 25 percent consumption tax? Do you know how much money the US would make.

If you want to eliminate rent (and I'm sure that's just the beginning) 25% is a low figure.

Ok, let me put it this way. Do you know how much money is spent worldwide by Americans outside of America trying to lower their American tax burden? Gobs. Eliminate that altogether, and what does that mean to American businessmen trying to do business anywhere else in the world? They will come to America. So will the Euros, the Canadians, the Australians, the Kiwis, etc.

You want to drive the point home that America is open to business? Do this.

And who are they going to produce for? You have to have consumers spending money for businesses to produce.

[Ben Kenobi]

And who are they going to produce for? You have to have consumers spending money for businesses to produce.

They already produce for Americans. They just have their head offices 'somewhere outside the USA' for tax purposes. You could tax their asses off in the USA and they'd still come. They'd happily pay 25 percent and come here. They go and make money all over the world, and they'd be spending it right here in the USA.

Sure, some rich people save about 50 percent of their income, and so do some not-so-rich people. The general savings rate is practically nothing. Assuming rich people on average spend almost all of their income, and spend less on housing, the tax is still progressive.

[Kidlicious]

They already produce for Americans. They just have their head offices 'somewhere outside the USA' for tax purposes. You could tax their asses off in the USA and they'd still come. They'd happily pay 25 percent and come here. They go and make money all over the world, and they'd be spending it right here in the USA.

I have a hard time believing that so many people live somewhere because of the tax rate. If you were to say that they live there for work that would be another matter, but that they live there to pay a little less tax?

Sure, some rich people save about 50 percent of their income, and so do some not-so-rich people. The general savings rate is practically nothing. Assuming rich people on average spend almost all of their income, and spend less on housing, the tax is still progressive.

No. The reason why the rich save so much is because they don't have to pay rent and other expenses. Simply deducting rent is not going to make the tax progressive. The rich save in addition to rent.

[Kidlicious]

There are other things that cost the poor more, such as insurance. If you pay insurance by the month it costs you more than if you buy it semi-annually or annually. A consumption tax would tax the poor more with regard to those things.

[Ben Kenobi]

Yes, people do choose to live where taxes are low and they can stretch their dollar furthest. Is this really so hard to believe, kidicious? People usually live in the places they do for very specific reasons. Why do you think Florida and Texas attract so many folks? They both do not require residents to pay income taxes. This gives them a competitive advantage for folks in the United States. If your job doesn't require you to live in a specific place, or you can find a better job elsewhere - then there is incentive for Americans to move to these places.

No. The reason why the rich save so much is because they don't have to pay rent and other expenses. Simply deducting rent is not going to make the tax progressive. The rich save in addition to rent.

Again, and I'm repeating myself here. The rich are ahead every month because they are paying less of their income in rent or other housing costs. They do not have as great an incentive to save because their fixed costs are less of a proportion of their life. I know people who are very close to the line, over 50 percent of what they make goes to rent. It is very difficult for them to save, because so much of what they make is getting eaten up in fixed costs.

The wealthy do not have this. They pay less of a proportion in rent, and so are ahead every month at the start. Say if you're making 2 grand a month and spending 700 on housing (no wealthy by any means), or are making 1 grand a month and spending 400. Who's ahead? Is it easier to save 100 off 1300 a month income after housing, or 100 off of 600?

[Ben Kenobi]

There are other things that cost the poor more, such as insurance. If you pay insurance by the month it costs you more than if you buy it semi-annually or annually. A consumption tax would tax the poor more with regard to those things.

Second vehicle, etc. Most poor folks use public transportation.

[Kidlicious]

Yes, people do choose to live where taxes are low and they can stretch their dollar furthest. Is this really so hard to believe, kidicious? People usually live in the places they do for very specific reasons. Why do you think Florida and Texas attract so many folks? They both do not require residents to pay income taxes. This gives them a competitive advantage for folks in the United States. If your job doesn't require you to live in a specific place, or you can find a better job elsewhere - then there is incentive for Americans to move to these places.

California is another popular destination. Do they have an income tax? Yes they do. So people must move there for the weather or because they get a job there.

Again, and I'm repeating myself here. The rich are ahead every month because they are paying less of their income in rent or other housing costs. They do not have as great an incentive to save because their fixed costs are less of a proportion of their life. I know people who are very close to the line, over 50 percent of what they make goes to rent. It is very difficult for them to save, because so much of what they make is getting eaten up in fixed costs.

The wealthy do not have this. They pay less of a proportion in rent, and so are ahead every month at the start. Say if you're making 2 grand a month and spending 700 on housing (no wealthy by any means), or are making 1 grand a month and spending 400. Who's ahead? Is it easier to save 100 off 1300 a month income after housing, or 100 off of 600?

What does that have to do with a billionaire who doesn't pay any rent? Even if they did pay rent it would be a very small portion of their income. They save way more than the rest of us. (except for Buffet who is the exception)

[Kidlicious]

Second vehicle, etc. Most poor folks use public transportation.

What does second vehicle have to do with it? If you have two vehicles I think you can get an additional discount. Insurance is just one example. You don't seem to know how to be poor. Poor people have to make smaller payments for many things which decreases their savings rate.