Meet The Candidates: 2012 GOP Thread

[mlmpetert]

Originally Posted by dmek25

first problem is that 9% of someones pay thats making $25000.00 a year is a helluva a chunk compared to someone making $100000.00

Its not really 9%. Its more like 9% minus 7.65% (not exactly, but close enough). Whats so important to understand about the 999 plan (and maybe the Fair Tax) is that both employee and employer payroll taxes are eliminated and the payroll taxes the employer would otherwise pay becomes an instant bonus to the employee.


2 single people without kids currently:


Making 25k. Pays 7.65% (1,900) payroll taxes and around 12% (2,750) effective income tax rate for a total of $4,650 or about 19%

Making 100k. 7.65 (7,650) payroll and around 19% (19,000) effective income tax rate for a total of $26,650 or 26%


999 Plan:

Making 25k: Now makes 26,913 due to the 7.65% “bonus” from the elimination of employer provided payroll tax. Total taxes at 9% are now $2,422

Making 100k: The bonus pops him up to 107,650 and taxed at 9% brings his total to $9,688


The problem with the above comparison is that its completely flawed to think about these people as making different amounts but otherwise the same. There are hundreds of thousands of different tax situations that could make either person pay more or less than the other, due to credits and deductions. Plus there are family and cost of living factors to be considered. Should a person who only makes 25k but lives at home and has their parents pay for everything be taxed the same as the girl trying to make it on her own without any family support. And is someone’s financial situation the same as mine if we make the same amount but they live in NYC while im stuck in Richmond? How about the person who loves what they do and the person who hates their job, should one be taxed less if they make the same? Or manual vs. white collar or employer vs. employee. And retail vs. service vs. production vs. government? The responsible thing to do is to tax everyone the same percentage at the income level while giving support through training and temporary aid for the poor.


The only accurate comparison of the current tax vs. 999 plan is to first understand that only 53% of households actually pay income tax and those that do will automatically be better off plain and simple. The vast majority of the remaining 47% that pay no income taxes will also be better off, although 10% will not be (those who pay no income or payroll taxes due to refundable credits). My guess is that in addition to those 10 another 5% or so would also be adversely affect, although, at a greatly diminishing rate. However the entire 15% or so would only be worse off by extremely small amounts. Im thinking around 2-3% maybe less.


But there are still benefits for those techniqely worse off. Instead of forcing the poor to wait for their tax refund they will be getting 6.3% more each pay check and not have to worry about filing and being concerned how much theyre actually gonna get this year, being unprepared for the times they get significantly less then what they are used to, and being forced to wait to make certain purchases centered around tax refund time. Plus the “time value of money” alone will make up for a big part of that 2-3%. I do think you would have to coincide the 999 plan with welfare reform so some of the very poor don’t get screwed over, but the changes should be minimal and most would agree its time for reform anyway.


Basically the vast majority of people will be better off, although the rich may be “more better” off in a relative comparison. It sometimes seems like people are okay with being worse off as long as the rich are “more worse” off.

[saden1]

Few questions since you guys are to cowardly to ask and answer the obvious tough questions.


1. Are you planning on mandating the payroll tax be given to employees as bonuses as part of the tax code overhaul or will you leave that up to the employers?

2. What about grandma and grandpa who don't have income? Where are their bonuses going to come from or should I say their medicare and social security?

3. Let's not forgot about the future of our children too...where the hell is the money to pay down the debt going to come from? I am guessing not from the plummeting tax revenue.

4. What if you're disabled? Are you on your own or will there be any safety net for you?

[Slingin Sammy 33]

Originally Posted by saden1

1. Are you planning on mandating the payroll tax be given to employees as bonuses as part of the tax code overhaul or will you leave that up to the employers?

Up to employers. However keep in mind that these taxes are already embedded in the cost of all the goods/services we use today, costs of goods/services before the FairTax Tax is added will go down significantly.

2. What about grandma and grandpa who don't have income? Where are their bonuses going to come from or should I say their medicare and social security?

SS & Medicare stay as is. Social Security and Medicare programs are spending programs. FairTax is focused on revenues (tax collection) only. FairTax would be implemented to be revenue neutral, spending programs and fixing SS & Medicare are separate issues.

Also, for each Head of Household or each individual with SS card, a prebate check will be sent monthly to cover the cost of the embedded Federal tax on basic necessities using current HHS poverty level calculations.

3. Let's not forgot about the future of our children too...where the hell is the money to pay down the debt going to come from? I am guessing not from the plummeting tax revenue.

The FairTax is designed to be revenue neutral. I would argue that with no corporate, capital gains, death, etc. taxes the climate for business expansion will be excellent and we will see increased revenues to the Fed. Worst case, the percentage of the FairTax would have to be increased to cover debt reduction. A balanced budget ammendment and fiscal discipline will allow us to put our financial house in order without increases to the FairTax % IMO.

Another revenue stream that FairTax catches is the underground economy. Folks getting paid "under the table", money from illegal activities, people paid in cash/tips that aren't claimed as income. Since the FairTax is embedded in products sold, when anyone buys a prodcut/service pays the tax, no matter where/how they made their money.

4. What if you're disabled? Are you on your own or will there be any safety net for you?

see #2

Wasn't "cowardly", just had to contribute to GDP this morning and help cover the costs of Obama's spending programs and Solyndra loans.

I did make an error in a previous post in the thread. The FairTax wouldn't be added on the price of a product at the cash register as an additional cost (exclusive), like a state sales tax. The FairTax would already be an embedded cost in the price of a good/service (inclusive).

[saden1]

Originally Posted by Slingin Sammy 33

Up to employers. However keep in mind that these taxes are already embedded in the cost of all the goods/services we use today, costs of goods/services before the FairTax Tax is added will go down significantly.

SS & Medicare stay as is. Social Security and Medicare programs are spending programs. FairTax is focused on revenues (tax collection) only. FairTax would be implemented to be revenue neutral, spending programs and fixing SS & Medicare are separate issues.

Also, for each Head of Household or each individual with SS card, a prebate check will be sent monthly to cover the cost of the embedded Federal tax on basic necessities using current HHS poverty level calculations.

The FairTax is designed to be revenue neutral. I would argue that with no corporate, capital gains, death, etc. taxes the climate for business expansion will be excellent and we will see increased revenues to the Fed. Worst case, the percentage of the FairTax would have to be increased to cover debt reduction. A balanced budget ammendment and fiscal discipline will allow us to put our financial house in order without increases to the FairTax % IMO.

Another revenue stream that FairTax catches is the underground economy. Folks getting paid "under the table", money from illegal activities, people paid in cash/tips that aren't claimed as income. Since the FairTax is embedded in products sold, when anyone buys a prodcut/service pays the tax, no matter where/how they made their money.

see #2

Wasn't "cowardly", just had to contribute to GDP this morning and help cover the costs of Obama's spending programs and Solyndra loans.

I did make an error in a previous post in the thread. The FairTax wouldn't be added on the price of a product at the cash register as an additional cost (exclusive), like a state sales tax. The FairTax would already be an embedded cost in the price of a good/service (inclusive).

Are we talking about the 999 plan or the FairTax? Regardless of which plan we are talking about I am under the impression that they would both eliminate the payroll tax which means there will be no deposits Medicare, Medicaid, and Social Security bank accounts. Ore maybe we're talking about the SS33 hybrid plan?

If one thing is fairly certain it is that if given the option of not matching employee payroll contribution most employees would probably choose to count the money and put it in their back pockets much like the airline companies did with the airline surcharge. I am not interested in doing going to do Arthur Anderson accounting here so unless you are fairly certain individuals are going to get that money in their pockets for sure you shouldn't count that money as income.

The idea of the cost of goods going down is also far fetched. It is more likely that companies would invest their savings in expanding their business or rewarding its investors. That's what I would do and if I were to lower the prices of my goods it wouldn't be by much and for long. Now if if business is booming and my demand grows I can see my price being elastic but where is this new consumption going to come from? Maybe China and India.

Another revenue stream that FairTax catches is the underground economy. Folks getting paid "under the table", money from illegal activities, people paid in cash/tips that aren't claimed as income. Since the FairTax is embedded in products sold, when anyone buys a prodcut/service pays the tax, no matter where/how they made their money.

To think the FairTax can capture revenue from under the table payments is ludicrous. This is by far the stupidest selling point I have ever heard regarding the FairTax. How are you going to count this money if it's unclaimed?

The FairTax is designed to be revenue neutral. I would argue that with no corporate, capital gains, death, etc. taxes the climate for business expansion will be excellent and we will see increased revenues to the Fed. Worst case, the percentage of the FairTax would have to be increased to cover debt reduction. A balanced budget ammendment and fiscal discipline will allow us to put our financial house in order without increases to the FairTax % IMO.

Designed to be revenue neutral? At what percentage and what date is this revenue nutrality to be had? What do we do in times of war? Increase that tax rate? The details is all in the math. I am not comfortable signing on unless we have credible figures in place.

[Slingin Sammy 33]

Originally Posted by saden1

Are we talking about the 999 plan or the FairTax? Regardless of which plan we are talking about I am under the impression that they would both eliminate the payroll tax which means there will be no deposits Medicare, Medicaid, and Social Security bank accounts. Ore maybe we're talking about the SS33 hybrid plan?

I am talking about FairTax, this is a documented plan that's been on the table for a few years now. Cain supports FairTax. I haven't read enough about this 9-9-9 to know all the details, but I believe Cain should just go straight to FairTax without all the 999 mess.

Anywho, we could go back and forth with page long posts here but I suggest you go to the FairTax site and take a look at the books I mentioned to read the details of each. They will explain much better than me.

In short, FairTax is simply a replacment for the current system of collecting federal taxes, nothing more. The current estimated percentage of embedded federal sales tax needed to be revenue neutral is approximately 23%. Currently there are approximately 22%, of embedded federal taxes in the final cost of a good/service today. That's how the final cost of an item to the retail consumer only raises slightly with FairTax.

If one thing is fairly certain it is that if given the option of not matching employee payroll contribution most employees would probably choose to count the money and put it in their back pockets much like the airline companies did with the airline surcharge. I am not interested in doing going to do Arthur Anderson accounting here so unless you are fairly certain individuals are going to get that money in their pockets for sure you shouldn't count that money as income.

The SS & Medicare payroll taxes are part of the embedded tax in a good/service. These will be filtered out by the market, if companies want to remain competitive.

To think the FairTax can capture revenue from under the table payments is ludicrous. This is by far the stupidest selling point I have ever heard regarding the FairTax. How are you going to count this money if it's unclaimed?

Remember FairTax is an embedded tax collected at the point of sale. Everyone has to buy goods/services.

What do we do in times of war? Increase that tax rate?

In the case of a declared war, approved by Congress, yes. It's been done before. If not, then POTUS/DoD need to figure it out with their yearly appropriations.

[mlmpetert]

Originally Posted by saden1

Few questions since you guys are to cowardly to ask and answer the obvious tough questions.


1. Are you planning on mandating the payroll tax be given to employees as bonuses as part of the tax code overhaul or will you leave that up to the employers?

2. What about grandma and grandpa who don't have income? Where are their bonuses going to come from or should I say their medicare and social security?

3. Let's not forgot about the future of our children too...where the hell is the money to pay down the debt going to come from? I am guessing not from the plummeting tax revenue.

4. What if you're disabled? Are you on your own or will there be any safety net for you?

Ill answear a little differently:

1) Absolutely it has be a mandate when initially rolled out.

2) Currently 50% or 85% (depending on AGI) of SS, and i think medicare, income is counted towards your current taxable income and then taxed. These numbers would have to be adjusted to reflect a "bonus" to seniors, simply because AARP and the senior voting block is powerful enough to dictate it.

3) Revenues may not go down like some say. Some reports say its going up, some say going down while Cain says it will be revenue neutral. The thing missing from Cain's plan are details, which he can finalize based off of the current public reaction. I will also add that capital gains and estates are currently not taxed under 999, so he has a couple easy revenue boosters to employee if needed. Plus if need be you could always tax income of the wealthy higher, nobody likes those guys anyways. So maybe 9/9/9 up until you make like 250k then its 20/9/9.

4) Im not really sure what you mean? Entitlement programs not part of the tax code will continue for disabled people just like food stamps will continue for poor people. Maybe youre talking about SS and Medicare. Though 999 doesn’t detail how these are funded theyre not going away, it would be politically impossible. As long as it’s a revenue neutral event and still pulls in 2.2 trillion then neither will go away and everyone’s happy. Cain also touts the Chilean Model for SS for fixing SS. Medicare is the much bigger issue but that will have to be dealt with anyways.