Re: conservation of Euros

And that seems to be a-changin' :-(

Depends. Some stuff gets so deeply embedded into law that the damage is all but irreversible. Like the California pension problem. Even people that have defrauded or done other bad things have an iron-clad guarantee to keep receiving their fat pension.

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Exactly.

Bankruptcy courts can alter contracts, too. That *is* happening.

For a whole state? Never heard of that one but quite frankly for CA I don't see any other way out. According to credible studies the pension costs have already ballooned 2000% over a time frame of 10 years (that's two thousand ...). And this is most likely just the tip of the iceberg.

So you would still have to do a state income tax return? Then the whole notion of doing away with compliance costs would be a joke and the whole thing would become a non-starter.

Wow.

Perhaps I should change my retirement plans to becoming a California civil servant? Amazing that even in the face of such massive debt that's going to really, really hurt for years to come, they're unwilling to make changes so that at least their grandkids (or maybe great grandkids) aren't saddled with such massive debts.

---Joel

From reading the news, it'll happen one city at a time. It *has* to happen.

It *has* to happen.

Sure. The feds have no interest in paying state obligations. The "Fair Tax" addresses the feds only.

I'm sure some states would follow, since they're based on the fed now.

I'm just really kind of at a loss. We're talking about replacing 26 op-amps, a few a/d's, a mess of power supplies, a handful of uC's and a bag of trimpots with ... a resistor.

You'd rather re-tweak the trimpots on the kludge? Re-program the break-points? That just ... well, I scarcely know what to say.

I guess the thing is this: ignoring the many other taxes eliminated under the Fair Tax, our current income tax system all by itself is as complicated as it is because everyone wants it that way. Each wants their special part of it. To reform that, you'd have to win battles with each and every one of them, which is impossible.

That's why a visible tax is good. It discourages shenanigans. It's not perfect, but far more accountable than a thousand hidden taxes.

Oh, now I see your point. But wouldn't that be great, a real, honest "stimulus package"? That seems a darn sight better than bribing them with taxpayer dollars to buy houses.

Not income--that's the same. The overall tax rate is the same, it's just superbly easier to pay.

We already discussed that. They'd compromise, and exempt Roth IRAs, etc.

Yes.

Fine, but that's when the people get engaged and say "No." Like with property tax in California.

Right now the changes are so complicated, we get hornswoggled and hardly even know who bit us. (Who can read the 76,000 pages of current IRS code and regulations that are amended, on average, twice a day?)

That issue is unrelated--it's Fair Tax neutral.

(Sorry for the late post--I'm swamped.)

-- Cheers, James Arthur

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Businesses that sell to the public have to collect Fair Tax, just like they collect slaes tax today. Can they cheat? Sure, I guess, especially if they're small. Not if they're large--they'll get caught.

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Rebate: for all the middlemen in the supply chain.

But things people buy in store _will_ be taxed, offsetting that.

I met a crew doing some work the other day. Of taxes, the chief said "I don't pay those mthr'f'r's one f'n dime." He pays his crew, um, discretely, too.

-- Cheers, James Arthur

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Joan Q. Public doesn't have to--the customer pays Fair tax. Airplanes, paying tax. That's really cool, isn't it? I mean, the implied resources used in producing the airplane, taxed at sale. That's elegant.

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Yes, the Fair Tax makes that concession to "progressivity" so as to be politically equivalent to our current system. That's on the collections side.

The Fair Tax does not, however, tell politicians how to spend the money they collect. That'll still be politics as usual.

-- Cheers, James Arthur

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More signs:

"I can't believe we still have to protest this crap" "Spread your own wealth"

Green paper plate, hanging from cute collie's collar: "I didn't read the bill either."

-- Cheers, James Arthur

Sorry, those links didn't work for me, but there's a classic YouTube of Bill Lockyear(sp?), CA Treasurer, speaking about their spending. "Just STOP!" He says it several times.

The Fair Tax has nothing to do with states. It's a federal tax, that replaces virtually all the other federal taxes, including the Medicare tax, Social Security Tax, self-employment tax, payroll deduction taxes, personal and corporate income taxes, to name a few.

The states are completely unaffected. They'd continue doing whatever they want, as now.

-- Cheers, James Arthur

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I think Charlie means he wouldn't have to pay income tax on the new money, or pay any deductions, so he gets ahead on that.

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Can't happen if no one tries, that's for sure, right?

-- Cheers, James Arthur

He gets ahead, but it'll catch up when he uses the money. No free lunch here either.

Not sure it's the right thing, yet. OTOH, I'd love to see the debate, if such a thing were possible anymore.

That elegance quickly fizzles when the big foreign airlines then buy the Airbus instead because that is now a much better deal. A lot of the cost in an airplane is materials.

Of course, you could also say "Ok, we don't tax it when it's delivered in Dubai" but then you'd be looking at even worse deficits.

I'd imagine that most of the cost of an aircraft is money. Many never turn a profit.

Given your unproven assumption above, maybe.

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Again:

It would be the _installation_ that isn't taxed. The guy I mentioned earlier certainly did not look like he was running an "official" business, he'd most likely never collect any tax and also won't remit any.

That would be the theory. The reality is that in many cases there's going to be no middleman. There is the guy who buys all the materials at a HW store, pays the tax on that, installs it, collects cold hard cash, whistles innocently and drives home. It is sad that people do such things but they will. Guaranteed. I've seen it in Europe where taxes on services are the same as the VAT and very high.

You'd be surprised how widespread the underground economy could get. All the way back to a farmer selling milk or half a pig "on the side". On a hiking trip in Europe our group bought fresh milk, right from the farmer's tank. The money went straight into a bucket. There was no cash register, there was no paper ...

And that'll get worse. Because now we are already talking 23%.

That's why by now a lot of people say that "starving the beast" is the only way out of this mess.

So you'd have the same state tax returns to file, with the same bureaucratic effort by the taxpayer? Or like in my case paying a licensed CPA to do it? And the states collecting income taxes from employers like usual? There goes the much harped about illusion of getting rid of compliance costs. Sorry, that alone makes the whole thing a non-starter, IMHO.