consumption tax...

[AR182]

Yup, regressive tax basically means one in which "poor" people pay a larger portion of their income than "rich"

Social Security is one. Since you stop paying social security taxes at a certain point of earnings, it technically is regressive.

The income tax is progressive in that the more you make the higher your tax rate is.

One of the arguments I make when opposing taxes on things like cigarettes, is that they are regressive. A "poor" person who smokes a pack a day might spend 1% of their entire yearly income on cigarette taxes. Whereas for a "rich" smoker who spends the same dollar amount on cigarette taxes, it only comprises 0.25% of their income.

A consumption tax would do the same thing, as "poor" people spend all their money. Whereas "rich" people invest and save their money, shielding it from the consumption tax.

im...

thanks for trying to define this for me...

but still don't understand why will the poor pay a larger portion of their income than the wealthy. maybe i'm wrong but i would think that proportionally the wealthy will probably spend more than the poor..

 

[Jabberwocky]

AR, just look at it on a per dollar basis. If one family spends %20 of their income on food, and the other family spends only %2 of their income on food, family A is being hit harder. I know this might start a socialist debate, but the intention of regressive vs progressive taxation is to level the playing field.

 

[AR182]

AR, just look at it on a per dollar basis. If one family spends %20 of their income on food, and the other family spends only %2 of their income on food, family A is being hit harder. I know this might start a socialist debate, but the intention of regressive vs progressive taxation is to level the playing field.

but wouldn't a consumption tax cover more things than just the costs of basic items like cars, travel,etc...?

 

[bjfinste]

im...

thanks for trying to define this for me...

but still don't understand why will the poor pay a larger portion of their income than the wealthy. maybe i'm wrong but i would think that proportionally the wealthy will probably spend more than the poor..

I'm trying to figure out what part is confusing, assuming by "proportionally" you mean in terms of percentage of income. I thought the last line of The Fekster's post summed it up pretty clearly. Poor people live paycheck to paycheck and HAVE to spend all of their income. The rich do not. I believe that was the point that he was trying to make.

 

[bjfinste]

but wouldn't a consumption tax cover more things than just the costs of basic items like cars, travel,etc...?

Ah, I see what you're saying now.

 

[Jabberwocky]

but wouldn't a consumption tax cover more things than just the costs of basic items like cars, travel,etc...?

Possibly. If a "luxury" tax was imposed (which would piss me off at the times when I decided to make a big purchase) I would think it might even out. :shrug:

However, Im's point is very relevant and should be considered. I am not a socialist. But I do believe in compassionate capitalism.

 

[Jabberwocky]

"compassionate capitalism"

What an oxymoron I am.

 

[THE KOD]

but wouldn't a consumption tax cover more things than just the costs of basic items like cars, travel,etc...?

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my understanding is that the tax would be placed 0n everything. Travel tickets, food, cars, store purchases, oil, etc.

The reason we will never see it is the BobbyBluechips of the world.

Thousands of tax preparers, accountants, tax lawyers, would be without jobs immediately. The goverment would have to let 80 per cent of the IRS people go , not needed anymore.

Yeh fat chance they let all that money go down the tubes. They would much rather continue to screw us.

It really sucks. I used to know this guy that worked alot under the table and would take jobs with large companies for 8 mths or so and quit.

He never filed federal income tax and they never caught him. If that were me I would be in jail. It never ceases to amaze me what people can get away with. And if a middle income person can get away with paying no tax for years, what are people that earn millions able to hide ?

Geez Louise.

 

[redsfann]

"compassionate capitalism"

What an oxymoron I am.

yep. No such thing as "compassionate capitalism" There have to be winners and losers in a capitalistic system.

 

[ImFeklhr]

yep. No such thing as "compassionate capitalism" There have to be winners and losers in a capitalistic system.

Yup, and honestly, any leader or politician in ANY political system that promises otherwise, are lying.

It's just human nature to have winners and losers. And honestly, I'm ok with it. Life isn't perfect.

As long as it is balanced with some charity and human kindness (either through private, religious, or even some governmental programs). Cause helping people is human nature too.

 

[AR182]

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my understanding is that the tax would be placed 0n everything. Travel tickets, food, cars, store purchases, oil, etc.

that is my understanding also....& the more i think about the more i understand why my friend favors this tax....he's as cheap as they come. he never spends money on anything...:142smilie