Re: conservation of Euros

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Obviously, but that's STATE. Federal goes away.

I beg to differ. States don't charge Social Security tax, Medicare Tax, etc. States usually have simpler rules too for things like capital gains.

If your state requires those, I guess so. Mine doesn't.

Oh please. We've got 76,000 pages now. Would it really kill the deal if it took two measly extra pages in the (very modest, easy-to- understand) Fair Tax bill to exclude Roth IRAs?

Taxation fosters misappropriation. That's just about our whole problem--giving the trust fund to the teenagers. And look what they've done with it...

-- Cheers, James Arthur

Reply to
dagmargoodboat
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So? What's the tangible benefit for Joe Q.Public in terms of compliance effort and cost? Next to nothing ...

Social, medicare and all that are one-liners. The effort in doing a tax return is all the other stuff and the rules aren't much simpler there, at least not in California. Sorry, but I don not buy the compliance cost reduction. Not at all, unless the states change as well but that'll be up to them.

Mine does. There's a reason that my clients send me the 1099s in triplicate :-)

As I said, many older people have savings and investments other than Roth. They do not wish those to be taxed again. How will all that be handled?

Yup :-(

And an increased consumption-based tax fosters an increase in underground economy. Big time.

--
Regards, Joerg

http://www.analogconsultants.com/
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Reply to
Joerg

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It seems that you remember the 55 mph game as well.

Reply to
JosephKK

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All the time you spend tax planning and retirement planning to avoid tax, for one example. All the time and energy companies spend avoiding tax. Investment tax.

Joe Q. isn't the guy who carries the burden, but at least he'd get his full paycheck, with *no* deductions.

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Look, this affects me far more than you can know. I still find it very interesting.

What do you suggest?

You don't get it--this is _your_ chance. You can just wait for someone else to do something you hate then grumble about it, or you can offer a solution.

I already suggested just freezing those accounts from further deposits and allowing their contents to be used without tax. It wouldn't be any harder than the restrictions we have now on IRA /

401(k), HSA, and so forth. I brought that idea directly to the Fair Tax people, in person. What do _you_ want?

ke

a) So does increased income tax. b) If not this, we'll be getting a VAT, plus higher income taxes, plus more. Do you like that better?

-- Cheers, James Arthur

Reply to
dagmargoodboat

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Sure they could, why not? The states can do most anything they want, unless it interferes with interstate commerce, etc.

-- Cheers, James Arthur

Reply to
dagmargoodboat

Because the Federal government has no authority to even ask. Not that that would stop them, but...

Reply to
krw

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JKK > It seems that you remember the 55 mph game as well.

It's not restricted to highway laws either.

Reply to
Greegor

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So state taxes don't need to be planned for? Why is that?

Retirement planning will all get upset and become rather intense if they don't exempt savings beyond Roths et cetera. Because people would have to find a decent place outside the country.

Sorry, wrong again. Obviously, from what you and Keith have written here, he will see state tax withholding.

I did that: Fix the current system. Roll back exemptions and pork, ditch AMT or at least properly inflation-index it, and so on. I cannot imagine that you seriously believe that a so-called "fair tax" won't get clobbered the same way the once simple income tax system has been. Just faster, because budget shortfalls will happen faster.

As an engineer I am used to not just completely toss a clients system and suggest a re-design from scratch. First I look at it, see what needs to be fixed and optimized, and then come up with detailed suggestions where, how, and what it's going to take.

That this shows up in the written proposals. What concerns me is that this rather important stuff wasn't mentioned at all in all the text I read (from your links). Meaning the whole thing doesn't appear to be that well thought out before going public.

What also needs to be in those proposals is just how exactly this is going to work. How can you use it without tax if there is, as is claimed, not to be any more paperwork? People have to give the Federales their account statement? I don't think that's going to fly with the people. And then what? You get a complete rebate? Must compile all receipts for that? Forced to deplete your savings? Where's the compliance cost going then?

Beside lofty goals there needs to be more meat: How exactly the whole stuff is done in practice and administered.

If spending is rampant we will get that anyhow and it doesn't matter what the tax is called. A flat sales tax isn't miraculously going to make such increasing debt go away. In fact, it makes it a whole lot more unpredictable. We have to start looking farther than our own borders. Case in point is Germany where for many years consumers have clamped down. They just kept a whole lot of their money, didn't spend it, and that has resulted in serious VAT shortfalls. If the VAT or "fair tax" or whatever is your only source you're screwed if that happens.

--
Regards, Joerg

http://www.analogconsultants.com/
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Reply to
Joerg

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State taxes are, by far, simpler than federal income tax. Goin to the "Fair Tax" would be a major simplification, even if the states didn't follow, which they will (pretty much have to).

James has conceded this point.

If the state doesn't follow, sure. Anyone living (or working) in a state with an income tax will still have withholding.

If it has *any* exemptions, yes it will. Washington likes to grease slippery slopes. If there are *no* exemptions it's harder to slide into the abyss we're in now. That said, before the Fair Tax could be implemented the 16th amendment needs to be repealed. That won't happen either.

...and if you came across a design as broken as the US is now you'd change some resistor values?

In high unemployment the income tax falls short, too. Many states are feeling this pinch (no, it doesn't explain CA). The "Fair Tax" does make funding government more obvious, which would tend to limit it more.

[*] I would suggest a straight sales tax or flat income tax for this purpose.
Reply to
krw

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Highway funding does tend to be the lever, though (21 drinking age, etc.).

Reply to
krw

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In CA and many other states they aren't simpler. They'll still want to know all your work income, investment income and all that stuff. Pretty much the same as federal now except that some deductions, exemptions and the standard deduction have different Dollar amounts.

Sorry, I do not see any significant compliance effort reduction and I bet the fee I'd pay my CPA would remain roughly the same.

To some extent, yes. But it goes on and on. Suppose a couple that retires wants to sell their house that, if they lived frugally, is largely paid off. From already taxed money. They want to buy that big RV, live in it and travel our country, one of those $150,000 Fleetwoods maybe. Now they would be socked with an extra $34,500 tax. Ain't nothing fair about that, is there?

Which means most states and, therefore, the majority of Americans.

Needs a lot more than that. But the same is true for many designs that get chucked onto my lab bench. Still it is much better not to completely place the apple cart upside down, hoping it'll miraculously fall onto its wheels and run again. In electronics I could do a brand-new design and it would work but the NRE might not be bearable for some clients. With a drastic tax system revamping there is a whole lot more risk than a shortage in the collection amounts. It could trigger a major stampede in the financial markets if we aren't very, very careful. The way the current proposals about the "fair tax" are written I'd venture to say that it will trigger one.

I am all for limiting.

A flatter income tax would certainly boost our economy. But ...

--
Regards, Joerg

http://www.analogconsultants.com/
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Reply to
Joerg

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