Re: conservation of Euros

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California couldn't do much worse as regards driving away jobs.

All taxation drags down economies, but we need some. And the *type* of taxation will have huge differential effects. Sales tax, instead of corporate income tax, could collect the same amount of revenue but have a hugely beneficial effect on domestic employment. People would ultimately pay the same for the stuff they buy, but they'd be buying more American stuff and so have jobs to make the paychecks to buy the stuff.

John

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I don't think it's remotely possible to produce a pair of jeans in America that retails for $20-30, or a pair of sneakers for $30, or a DVD player for $49, or ...

And do you honestly believe the 2000% pension cost increase that certain elements have brought upon us will ever go away? It's just going to get worse, and while states with a reasonable political crew may be fine with their share of a 23% flat tax CA most certainly won't be. Because that share won't be more than a fifth of thise 23%, and the feds won't give CA more just because the budget is eternally screwed up.

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Of course not; those industries are gone and won't come back. But we might build differentially more cars, airplanes, plywood, electronics. The alternative is to build nothing in the USA.

As I said, taxes will happen. The *types* of taxes have huge differential effects. Taxing business exports business. Taxing productivity reduces the incentive to be productive. Taxing consumption restores some competitive advantage to US industries.

John

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We already build and export world-class airplanes but Joe Q.Public will be hard-pressed to get a loan to buy a Boeing 777. Plywood? I don't think so. Cars? With stuff like jobs banks going on? I don't think so. Electronics? T750 high voltage drivers, yes, of course. TV sets, radios, gadgets? No.

We need to realize that we are a high-wage country and thus will never be able to compete with countries like China when it comes to mundane technologies. You are right that businesses are over-taxed as it is. But the reality is that we need to fix the spending side of it, not shift the tax load from one source to another to another.

To illustrate the point I recently had tested a custom part from China here in the lab, for a switch mode converter. Yeah, there was a form-fit-function compatible catalog part (non-custom) from the usual sources here but the custom part came in at about 25% of the cost. How is the flat tax going to bring that back?

I am against such a rapid switch if it taxes saved income twice. So will a whole lot of other people. Then, they and their dough might move to Cabo San Lucas.

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So what's different?

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That the US high-tech sector is more healthy IMHO. But that can change for the worse, and I am sure we all don't want that to happen. More nonsensical bureaucracy = bad.

Yes, I believe that. You can raise the rate, but people will notice. That's not currently true for more than half of us.

The Fair Tax assiduously avoids making those political judgements. The Fair Tax is just a simpler way to collect the same amount of money we currently collect. What the money is used for is up to the politicians, as usual.

-- Cheers, James Arthur

Jeorg, Let me chime in, here.

Now, I have a bit of savings. Yes, those earning were all taxed when I saved them, but they are in the bank now. They are earning a (very) little interest.

Now, they implement this fair tax. That money doesn't go away, it is still in the bank. Now, you can tell me that it was just de-valued by the amount of the tax, lets say 23%, but that doesn't happen right away. It only happens when I pull it out and spend it. Now, we never agreed on what that 23% meant. Did it replace the existing sales taxes? Or just add to them? If it added to them, then every think I now have to buy just got a third more expensive. Not a good thing.

But, if I don't spend that money, it is still there and making interest. If I wait, it doesn't loose any additional value. If I make additional money, then I save on those funds.

I would probably do just fine on the fair tax, but they will never do it... :(

Charlie

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It hasn't been healthy in decades and is swirling the drain. Since our economy is becoming Europeon, it's not surprising.

But it *does* make political judgments. The "rebate" is such a judgment.

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either side.

Oh, it was Joerg and I making the argument in this thread.

If prices fall to where they are now, after taxes have been paid and I keep my salary, I just got a free lunch. I *really* don't believe in a free lunches.

Well, 80% of my liquid (non-home, non-pension) investments are deferred, but I still don't believe in a free lunch.

I did buy Apple, but sold it after it only double twice. Not greedy.

I'm still on the fence, as proposed. I'm sure I'll be against anything that makes it through Congress, like the current mess.

I liked the Reagan "cuts". If only Congress took a shave too.

A flat tax would do nearly the same.

I liked "Obamanomics: Trickle up poverty"

Sorry, but I don't expect that much from politicians. When they screw up the budget like they did in CA they'd simply raise the rate. I don't believe they care much about what people think.

Seriously, in this morning's paper there was an article where a certain politician basically said "We should lower the pension fund estimates and bill the balance to the taxpayer". That's how low it's gotten.

A former assembly speaker fessed up on our local TV, quite candidly which really surprised me, here (they make you sit through one ad ...):

So, back to the question above: Does this mean states would slap on an extra "fair tax" at whatever rate they want?

Which, as you get older, you eventually will have to do. And then stuff is going to be more expensive because of this new tax. Your savings will get taxed a second time, by shriveling up some of its purchasing power. Unless you move to Cabo or some other place :-)

It's meant to replace pretty much all the taxes. But we all know how that goes "But, but, we need that sales tax revenue", and so on.

I hope not. And they don't want it anyway because it would make tax blatantly visible to people. Old saying: "Taxation is the art of plucking a goose while alive, with the least amount of hissing" :-)

Hmm, I can't say that yet. My clients are often looking for talent and some is as hard to find as it was 10 or 20 years ago. Not just analog. For example, right now we are looking for a transducer array engineer, an ultrasound guy that knows ceramics such as PZT5 and backing materials. If anyone is aware of a good candidate we could hire please let me know.

Not dead yet, no, but it's on its way, by design. I'm sure there are pockets in Europe, too.

=A0Every one of

Um, make that: "Flood up poverty", please. With lots of "sucker punch" fish, that go around sucker punching previously sea worthy boats into being state re-floatable sinkers.

I doubt it. The US has always been a country of inventors and entrepreneurs, more so than many other. However, the recent legislative changes do not bode well at all and if that continues to fester you could be right :-(

Because of the relative lack of government intervention into your life.

It's been getting worse for a couple of decades. It's just more obviously South. Recoverable?

Added to them. The 23% replaces *federal* taxes, including income and employment taxes. State bureaucrats still gotta live.

How would it? It's not taxed until it's spent.

There are a *lot* of assumptions with the fair tax. One of which is that Congresscritters will give up the power of the tax code. You're right - not happening.