I don't know about a "fair" tax. What I suggest is a sales tax, a tax on consumption. It could easily exempt capital gains, which isn't sales or consumption.
At a bare minimum, in the tax receipts that the store reports (by sale). They may not know just who paid, but they do know it _got paid_ on those items.
Except for the minor nuisance that i know P.E.s that have never done any work in their field. (Not academics, but supposedly working engineers) What made galling is that were proud of it.
Even the dealerships that stay afloat on their shop cannot get by on that little. You have to pay rent and taxes on the lot, plus utilities and commissions or salaries. That money doesn't come from nowhere, it comes from retail markup. Now, the corporate net on each car sold is nearly zero for sound business reasons.
First, start rolling back all those myriad deductions and special treatments. Of course only for new events (such as investments), I don't want to unfairly treat people who acted in good faith, like the "fair tax" would. Now, you can gradually reduce the tax rates.
Then, get rid of the state tax systems. If a state wants to collect state income tax let them be honest and simply tell their population (and voters ...) "We will collect 6% on top of your fed taxes. Period." That brings clarity and a large number of bureaucrats are no longer needed, they could do other things.
Treat everyone fairly. For example thanks to the Bush administration we self-employed can deduct health premiums, before that we had to pay it all after-tax and employees didn't. We still pay FICA tax on that and employees don't, not fair, so get rid of that. Also, why must I enter this on my tax return and employees don't? Generates compliance costs and bureaucracy. Get rid of all those unnesessary bureaucratic steps. Simplify, simplify, simplify.
I could go on and on but it's moot, nobody on the hill or in Sacramento will listen. One owner of a large electronics company (now gone, could have been Max Grundig) did such streamlining and problem solving this way when it really had to be accomplished: He got all the folks into the meeting section of the building, locked the door and chucked the key out the window. "Now listen up, guys, I will call my wife to come by and toss it back up but only after we've fixed what's before us tonight".
As a consultant I am confronted with a lot of designs where a client says "It can't do XYZ or this and that part has become unobtanium, can you do something non-drastic about it?". Often after they've been to other consultants who basically told them that it has to be completely scrapped and designed from scratch. Then I sit down and see what can be done with modest efforts and without throwing their production a major curve. Upsetting the apple cart is ok but it can also lead the apple cart to tip and crash. With engineerring as well as with fiscal policies.
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Regards, Joerg
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Not this one. It was high-tech and the market expected major new features at every key trade show, and those happen yearly. Losing half your engineers (and we would have likely lost even more) can then be catastrophic.
True, financial things matter much less in our lives compared to higher callings.
other
car.
I am not at all convinced about the fairness of it. I am especially against anything that conveys the message "Squander everything, we'll just sock it to the guys who didn't and you'd be whole again". It's not the American way. Or at least it wasn't ...
As said before, the Asian corporations that make the bulk of our goods will keep paying all that, so prices won't come down nearly as much as hope. You can't turn time back, let's face it, we've lost manufacturing of most non-industry good. Whether it's shoes or TV sets. This is why there is a trade deficit.
I did, many times over in this thread, but hardly anyone understands :-(
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This definitely does not work for most people. You might be lucky like my great grandpa who died shortly before his 103rd birthday in his sleep, and never saw a hospital as a patient (other than MASH units during war time). Most of us will eventually have to sell their homes or that nice cabin in Truckee or give it to the kids, then buy a place in an assisted living village. Since such a "fair tax" will likely trigger a stampede out of cash all the exisiting units there will have been snapped up already so you must buy a newly constructed one. Meaning you'll be socked with tax and fictitious rent tax.
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On some models it looks even more grim for the dealers:
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Of course, they'll make that up on luxury models such as the Corvette although even there people now do Internet shopping and have no problems picking it up 300 miles down the state. The Internet has all but crushed fat mark-ups.
[...]
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The current tax system is destroying jobs. If we keep it forever because some retirees like things the way they are, their kids and grandkids will live under the current mess. Any change will inconvenience someone.
Taxing consumption and not income or profits will create jobs and encourage people to keep working.
You're wrong. They make their money in the back, as you say, and in used car sales. Carrying new cars 1) gives them a supply of good used cars, 2) a ready supply of repair customers (warranty work), and 3) credibility for both used car sales and repair. Dealers haven't made money on new car sales since the '60s, when everyone found out about the "Invoice Price" (Edmunds, et. al. published it). I've never paid more than a few hundred dollars over invoice.
If you're going to claim the dealer "hold back" as profit, you'd better also figure in the average time a car sits on the lot and the interest paid. Hint: that often goes negative.
What is destroying jobs is not the tax system per se, although tweaks by certain political interests will. Such as the temp worker crackdown that was announced. How that can possibly be announced at these economic times is beyond me.
What needs to be done is reel in spending. Case in point: CalPERS just sent the state a bill upping the payment by the state by (IIRC) 18%. Largely because they had screwed up. By law (!) the state must pay whatever they please to bill. How sick is that?
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Again you're missing the point. The point is that these folks have used their house as savings - the *largest* part of their life's savings for most. Currently this savings is exempted from taxes (up to 1/2M for married). Put in a consumption tax and this savings is now taxed the same as income. ...even the after-tax part (principal) of this savings.
That's how we got in this mess; Congress "tuning" the tax code.
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