U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-26-2017, 11:46 AM
 
Location: Paranoid State
12,685 posts, read 9,447,497 times
Reputation: 14950

Advertisements

Quote:
Originally Posted by Tonyafd View Post

This is a page out of the Koch brothers playbook.
No it isn't.

Quote:
Originally Posted by Tonyafd View Post
...It reduces the burden on employers and places the burden of Social Security funding on the purchasing public.
I don't understand. You say that as if it were a bad thing.
Reply With Quote Quick reply to this message

 
Old 08-26-2017, 11:55 AM
 
Location: Paranoid State
12,685 posts, read 9,447,497 times
Reputation: 14950
Quote:
Originally Posted by Supposn View Post
SportyandMisty, the topic’s title is “Replacing reduced FICA payroll tax rates with a federal general sales tax”. You’re posting your objections to our income tax system?
In a word, yes. More completely I was endorsing your proposal to replace regressive FICA taxes with a federal progressive consumption tax AND saying we should extend the concept to replace federal income taxes as well.
Reply With Quote Quick reply to this message
 
Old 08-26-2017, 03:31 PM
 
1,030 posts, read 561,267 times
Reputation: 300
Quote:
Originally Posted by Tonyafd View Post
This is a page out of the Koch brothers playbook. It reduces the burden on employers and places the burden of Social Security funding on the purchasing public.

Another scam brought to you by the Republican right always working in your best interest.
Quote:
Originally Posted by SportyandMisty View Post
No it isn't.
I don't understand. You say that as if it were a bad thing.
Tonyafd, I concur with SportyandMisty on this point. I’m a populist who generally finds myself opposed to conservatives’ political positions.

Shifting direct taxes from FICA payroll taxes to a general sales tax is not of net additional cost to employees and their dependents dependent upon taxed wages, but it increases taxes upon all others' incomes not subject to FICA payroll taxes or shielded by cost-of-living adjustments to incomes.
It certainly increases the net taxes paid among purchasers’ subject to sales tax that enjoy greater wealth or greater incomes.
Although both FICA payroll and general sales taxes are flat rated taxes, the payroll tax is more regressive than the sales tax.
Reply With Quote Quick reply to this message
 
Old 08-26-2017, 04:48 PM
 
1,030 posts, read 561,267 times
Reputation: 300
Quote:
Originally Posted by SportyandMisty View Post
In a word, yes. More completely I was endorsing your proposal to replace regressive FICA taxes with a federal progressive consumption tax AND saying we should extend the concept to replace federal income taxes as well.
SportyandMisty, the concept of the “Fair Tax” is to replace our entire federal taxes upon net incomes with a general federal sales tax while providing additional economic considerations to shield the poor and the working poor.
This proposal is ALMOST the same concept applied only to replacing a portion of FICA payroll taxes. The economic consideration is the reduction of FICA, the most regressive of all federal taxes.
I use the term “almost” because it does not shield the unemployed poor that are not recipients of cost-of-living adjusted incomes.

The proposal’s justified because the net economic and social benefits to our nation are greater than the detrimental effects due to the comparatively small price increases.

It’s politically more feasible to pass a reduction of employees’ FICA through the congress, if we’re willing to accept a similar reduction of the employers’ FICA.
Social Security retirement benefits are related to the beneficiaries’ wages and FICA taxes. It’s politically helpful to retain some logical indication of that relationship by reducing rather than eliminating the FICA taxes paid by employees and employers.
It’s proposed that FICA not fund any portion of Medicare.

The regressive FICA tax is low hanging fruit that should be eaten first. After we deal with FICA, I’m among the proponents for continuing to incrementally enact “Fair tax” legislation.
But I believe we will approach an unacceptable rate of sales tax and further such enactments would be contra-productive.
If I’m incorrect, federal income taxes will be eliminated.

Refer to the thread
Incremental enactment of a fair tax
Reply With Quote Quick reply to this message
 
Old 08-27-2017, 08:02 PM
 
1,030 posts, read 561,267 times
Reputation: 300
(To the extent that an enterprises’ expenses do not significantly exceed their competitors’ expenses per units of production), enterprises’ entire expenses are generally passed on through prices to their customers.

If USA’s payrolls are 1/3 of USA sales transactions:
Employers’ 7.65% FICA payroll tax: (1/3)(.0765)/(1.0765) = (1/3)(0.071) = 0.0255
USA’s current effective concealed sales tax exceeds 2.5% of all sales transactions.

[If USA’s payrolls are 1/2 of USA sales transactions, USA’s current effective concealed sales tax is 3.5% of all sales transactions].

Reducing employees FICA payroll tax would increase their net incomes.
Reducing their FICA by 4.55% of payroll,
1/(1 - 0.0455) = 1/0.9545 = 1.04766,
would effectively increase the vast majority of USA's employees net wages by 4.766 %, (almost 5%).
Reply With Quote Quick reply to this message
 
Old 08-29-2017, 01:50 PM
 
Location: Paranoid State
12,685 posts, read 9,447,497 times
Reputation: 14950
Quote:
Originally Posted by Supposn View Post
(To the extent that an enterprises’ expenses do not significantly exceed their competitors’ expenses per units of production), enterprises’ entire expenses are generally passed on through prices to their customers.
The issue is best analyzed at the margin: what happens when an incremental $1 of cost occurs?

The answer, of course, is it entirely depends on the price elasticity of supply and the price elasticity of demand. It is rare for all $1 of incremental costs to flow through to be borne by the consumer, just as it is rare for all $1 of incremental costs to be eaten by the enterprise. It is usually shared between enterprise and consume based on the slopes of the supply and demand curves.
Reply With Quote Quick reply to this message
 
Old 08-29-2017, 11:05 PM
 
1,030 posts, read 561,267 times
Reputation: 300
Quote:
Originally Posted by SportyandMisty View Post
The issue is best analyzed at the margin: what happens when an incremental $1 of cost occurs?

The answer, of course, is it entirely depends on the price elasticity of supply and the price elasticity of demand. It is rare for all $1 of incremental costs to flow through to be borne by the consumer, just as it is rare for all $1 of incremental costs to be eaten by the enterprise. It is usually shared between enterprise and consume based on the slopes of the supply and demand curves.
The short answer is that’s the reason for the qualifying word “generally”.
If the costs aren’t significant, why make waves? In other cases, you cannot afford not to confront the problem; you must bite the bullet.

SportyandMisty, but thanks for your input.
Reply With Quote Quick reply to this message
 
Old 08-30-2017, 01:04 AM
 
1,030 posts, read 561,267 times
Reputation: 300
Quote:
Originally Posted by Lowexpectations View Post
... You also for some strange reason keep ignoring the question of who saves more money in $/% a person earning 40k or 400k
LowExpectations, the purpose of this proposal is to increase tax revenues for retaining Medicare and Social Security retirements full future benefits.
The concept of this proposal is of interest not due to who gains or losses, but rather what’s its impact upon our nation’s economic and social wellbeing and to what extent is it detrimental or affordable to our nation’s entities.
This proposal’s of net benefit to employees and their dependents.
benefits, proportional to the wealth of recipient individuals’ and families of Medicare patients or Social Security retirees, are inversely related; (i.e. they’re of greater benefit to less wealthy recipients). The plans’ net benefits to USA’s economic and social wellbeing justify both Medicare and Social Security retirement plans.

I did some math but I haven’t been able to get it proof read. You indicated an interest in the numbers, I’d appreciate your checking it out.

Currently there’s a 7.565% FICA payroll tax upon every USA employer and their employee’s.
To the extent that an enterprises’ expenses do not significantly exceed their competitors’ expenses per units of production, enterprises’ entire expenses are generally passed on through prices to their customers. USA’s current FICA payroll tax of 7.65% upon employees reduces their net pay to 1 – 0.0765 = 0.9235.

If USA’s payrolls are 1/2 of a USA general federal sales tax’s revenue, that tax would effectively be equal to (1/2)(.0765) = 0.03825 .
My guesstimate is closer to 1/3 of a proposed general sales tax; (1/3)(.0765) = 0.0255 > 2.5% .
USA’s current FICA payroll tax of 7.65% upon employees reduces their net pay to 1 – 0.0765 = 0.9235.
USA’s current FICA payroll tax of 7.65% upon employers’ effectively increases prices by (1/3)(.0765) = 2.825%.
Due to FICA, USA’s current wage’s purchasing powers are (.9235)(1 -.02825) = 0.8974

It’s proposed we reduce each employers’ and their employees’ FICA to be 3.1%
and replace the 0.0455 FICA with a 4.55% general sales tax.
USA’s FICA payroll tax of 3.1% upon employees reduces their net pay to 1 – 0.031 = 0.969 .

Due to these modifications:
USA’s net wages have increased (1/1.031) - (1/1.0765) = 0.96993 - 0.92893 = .041 > 4%
USA’s wage’s purchasing powers are (0.969)(1 -.010333) = 0.91395; an increase of (0.91395 - 0.8974) = .01555 > 1.5%
USA’s gross price increases for products subject to the 4.55% sales tax are (0.0455 - 0.028250) = 1.725%

Wage’s purchasing powers for purchases subject to the sales tax has increased 1.5%
Wages purchasing powers for other goods have increased

Employees, employees’ dependents, commercial enterprises would gain slight advantage due to this proposal.
Those (such as Social Security retirees) with incomes annually cost-of-living adjusted are shielded.
All other individuals are paying a net price increases of 1.725%; would be losers.

Tax revenues increase to better retain Medicare and Social Security retirements full future benefits. Those benefits, proportional to the wealth of recipient individuals’ and families of Medicare patients or Social Security retirees, are inversely related; (i.e. they’re of greater benefit to less wealthy recipients). The plans’ net benefits to USA’s economic and social wellbeing justify both Medicare and Social Security retirement plans.
Reply With Quote Quick reply to this message
 
Old 09-05-2017, 08:36 AM
 
294 posts, read 155,712 times
Reputation: 324
I didn't read the entire thread and someone may have said it already: moving from income based tax to spending based tax encourages savings and reduced spending. US economy runs almost entirely on consumer spending, why would anyone want to mess that up?
Reply With Quote Quick reply to this message
 
Old 09-05-2017, 10:16 AM
 
1,030 posts, read 561,267 times
Reputation: 300
[quote=Bp25;49422726]I didn't read the entire thread and someone may have said it already: moving from income based tax to spending based tax encourages savings and reduced spending.
BP25, because:
our nation is in spiraling policy of increasingly greater deficit spending. Other nations are greatly reducing their distances behind our GDP leads, we're not properly educating our children, maintaining and improving our infrastructures, maintaining our public health, protecting our environment.

Income disparity only concerns me because the rich are again being ADDITIONALLY more able to to purchase a less populist government. A governmrnt of a nation's proportionally growing major segment of population existing in environments of comparatively much poorer life qualities.

Last edited by Supposn; 09-05-2017 at 11:13 AM..
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top