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Old 09-17-2008, 02:01 PM
 
Location: Lake Arlington Heights, IL
5,481 posts, read 10,069,183 times
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There is the brain part of the equation; the logical part. Then there is the emotional side that says: if you're on the lower part of the net worth/earnings ladder you are likely to say-Yes it's fair. If you are getting to or on the higher rungs you would most likely say definitely not fair. Interesting how the political parties "pander" to the opposite sides of the ladder.

Seperate question: Is anyone else bothered that non retirement interest income is taxed? It peeves me because I think works against developing a national mindset of building savings.
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Old 09-17-2008, 06:37 PM
 
Location: Cary, NC
31,650 posts, read 55,416,037 times
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Quote:
Originally Posted by cubssoxfan View Post
There is the brain part of the equation; the logical part. Then there is the emotional side that says: if you're on the lower part of the net worth/earnings ladder you are likely to say-Yes it's fair. If you are getting to or on the higher rungs you would most likely say definitely not fair. Interesting how the political parties "pander" to the opposite sides of the ladder.

Seperate question: Is anyone else bothered that non retirement interest income is taxed? It peeves me because I think works against developing a national mindset of building savings.
Well, CSF,
Obviously I am peeved that ANY income is taxed.

"Unearned income" is one of the linch-pins of envy-based wealth seizure, and a necessity for those who buy the votes of those who envy and covet your income and don't respect the source of your income.
Taxing capital gains of after-tax capital plays well with folks who are kept in poverty by their "saviors."
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Old 09-17-2008, 07:09 PM
 
Location: Cary, NC
31,650 posts, read 55,416,037 times
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Quote:
Originally Posted by saganista View Post
The Politics & Other Controversies forum is just down the hall from this one. It is as moderated as this one is, though on different standards. In neither case do moderators filter out "waste points". In pointing to the earlier Fair Tax thread, I was not intending it as a general reference, but as a location where some of my own reasons for believing the Fair Tax idea to be substantially flawed could be found, which is what I had been asked to provide. At 12:30 in the morning, I wasn't going to spring into op-ed mode on the matter.
Fine.

Quote:
Originally Posted by saganista View Post
As proposed, the Fair Tax cannot achieve revenue neutrality (i.e., $-for-$ replacement of the revenues currently collected under the taxes it means to replace). Independent estimates of the rate that would in practice be required in order to accomplish revenue neutrality can run into the 50% and 60% range, not the 30% proposed. What you are saying when noting -- quite properly -- that the rate isn't set in stone is that the Fair Tax authors actually have no idea of what the actual Fair Tax rate would need to be in order to achieve revenue neutrality. It's a pig in a poke that they have dressed up as a 30% rate and that they then call 23%. No one can say with precision what the actual rate would need to be, but it can be categorically stated that 30% estimate is too low.
How many angels can dance on the head of pin? That is nearly as compelling a question.
The focus should be on the revenue collected. As in "revenue neutral."
The rate is moot, as it will be set annually to provide that "revenue neutral" sum.
This isn't hard to understand. The government seizes the wealth it wants, once it quantifies the desired amount.

Quote:
Originally Posted by saganista View Post
The Fair Tax rate is hardly a moot point. The ability of national government to function depends upon it, as do the degrees of dislocation that would be introduced into the economy at large as the result of it.
"How many angels can dance on the head of pin? That is nearly as compelling a question.
The focus should be on the revenue collected. As in "revenue neutral."
The rate is moot, as it will be set annually to provide that "revenue neutral" sum.
This isn't hard to understand. The government seizes the wealth it wants, once it quantifies the desired amount."
The reduction in cost of collection and waste inherent in our envy-based system will offset the "dislocation" demagogue point.

Quote:
Originally Posted by saganista View Post
The latter point on the other hand is an important one (though one rarely raised by Fair Tax proponents), as it further undermines the notion of a 30% rate. Lawmakers will over time be subject to the same political pressures (many of them quite legitimate) to tinker with the Fair Tax variables as they have been to tinker with the variables of the existing income tax. No one can imagine that there will not be revisions adopted, and every single concessionary adjustment or modification that is adopted will drive the prevailing Fair Tax rate higher.

Of course. The tax/seizure industry will lobby to maintain the stature they lose with a moral and efficient system in place. Unfortunately, legislators will still be "For Sale" to those who place their personal interests above that of the well-being of the country.

Quote:
Originally Posted by saganista View Post
It would be that simple if the Fair Tax were an income tax. It is a sales tax. More honest to define it as a sales tax, except that consumer research showed that it would garner much less support with a rate stated at 30% than at 23%, so publicizing the lower rate was the way to go. That the authors would engage in what are essentially deceptive practices with so basic a notion as the applicable rate does not suggest that high degrees of honest and independent analysis will be found underlying the rest of the proposal. And if you start to pick it apart, you soon find that indeed they aren't.


All of this is wrapped up in what the authors call "embedded taxes", and both the level of them and a net ability to recapture them into the economy is overstated. It isn't me that is allowing anything. It's that the Fair Tax numbers and assumptions don't add up.
Again:
"How many angels can dance on the head of pin? That is nearly as compelling a question.
The focus should be on the revenue collected. As in "revenue neutral."
The rate is moot, as it will be set annually to provide that "revenue neutral" sum.
This isn't hard to understand. The government seizes the wealth it wants, once it quantifies the desired amount."

Quote:
Originally Posted by saganista View Post
Even though the number of prebate checks would be nearly triple the number of Social Security checks, the monthly mailout function (currently being replaced by direct-deposit and related schemes in any case) is not the issue. The issue is the level of personal information that will need to be collected and maintained on an on-going basis concerning every household in the country. Whatever new or existing bureaucracy (and whether in the public or private sector), it will need to know all about you in order to establish your actual and continuing eligibility for monthly prebate checks of a certain size. When my son leaves home in Virginia to attend school in New England, they need to know. When my daughter at last divorces that no-account husband of hers, they will need to know that. Anyone who takes a liking to the Fair Tax idea because it will do away with that privacy-invading IRS had better take a second look. Anyone suspecting that the costs of running the IRS will be saved had better have a second look as well. The new bureaucracy will need to take on very similar functions with respect to individuals as the IRS now has, and it will need to add a new facility to monitor the compliance and accounting of every business in the country -- large or small -- that carries out any final point-of-sale transactions. The prospects for actual realization of net cost savings from "abolishing the IRS" are quite questionable.
At last, You have pointed out one material, but tangential, weakness in the plan, that it allows for the continuation of Social Security.
But it was not the goal of the Fair Tax authors to use the Tax model to dismantle Social Security.
The task of reforming taxation with a Fair Tax is difficult enough, requiring defeat or recruitment of entrenched special interests who are deeply invested in envy-based taxation; who only view individuals uncompassionately as "groups;" that it was sensible to leave the issue of Social Security modification/elimination for another time.
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Old 09-17-2008, 07:34 PM
 
Location: Cary, NC
31,650 posts, read 55,416,037 times
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Quote:
Originally Posted by saganista View Post
Envy-based? Please. To repeat one of the basic premises of tax policy, you can only tax the money. Whoever has the money will pay the taxes. Envy doesn't enter into it.
Envy is an absolute foundation of a graduated tax. Absolutely. The only way there can be enough votes to support it is to keep the bottom of the pyramid big enough to outvote the $$$ above.
The only way the income tax was ever allowed was because only the "rich" would pay.
If money is taxed, if a dollar is taxed, why does one dollar have more tax value than another dollar?
Because we tax PEOPLE. We punish those we can, to play "hero" to those from whom we withhold hope for improvement.


Quote:
Originally Posted by saganista View Post
To preserve revenue-neutrality, that shortfall has to be made up. That can only be done by further increasing the sales tax rate.
Again:
"How many angels can dance on the head of pin? That is nearly as compelling a question.
The focus should be on the revenue collected. As in "revenue neutral."
The rate is moot, as it will be set annually to provide that "revenue neutral" sum.
This isn't hard to understand. The government seizes the wealth it wants, once it quantifies the desired amount."

Quote:
Originally Posted by saganista View Post
You were given no reason to think so, as the topic I spoke of was the inadvisability of concentrating all tax collection at a single point in the production process on account of its concentraing the incentive for fraud as well. You didn't address that point, except to note that some fraud occurs now. An interest in fraud should therefore be assumed, and tax schemes that serve to incentivize fraud by upping the available jackpot should be looked at with a careful eye.
So, $350 billion in fraud currently can be winked at, because there is possiblity of fraud in The Fair Tax?
Well, maybe not. I think tax fraud in our envy-based system is likely currently underestimated.

Quote:
Originally Posted by saganista View Post
An income tax is imposed on a flow of funds. The details of those flows can in large part be determined from examining financial records that are kept in any case. The Fair Tax would be imposed on flows of goods and services. These by nature are more difficult to track and examine in detail, a process which will be necessary given the proposed tax-free nature of flows of used goods.
If I gave the lawn guy $40 a few weeks ago, would that have been more or less traceable under The Fair Tax? Will the IRS nail him for not reporting income? Should I send him a 1099?
Answer: I'm not required to. The current system winks at up to $600 in unreported income per person.
Attempting to paint the Fair Tax as convoluted and demanding fails rapidly when held up beside our current corrupt and convoluted system.

Quote:
Originally Posted by saganista View Post
I've refered previously to marginal utility theory which is the underpinning of any progressive tax structure. Is it that you both understand and disagree with that analysis? If so, where does the disagreement arise? If not, it might be worthwhile to look further into it.
We discussed the "Marginal Utility" scam already.
I understand it. Immorality is easy to understand, but "marginal utility" is an easy tool for selling graduated income tax on an envy basis.

The conceit to presume that one's wealth is fair game because someone has determined one doesn't need it so much plays well with the envy crowd. "Marginal Utility" sounds very clinically cool, although in practice it obviously is a very great evil perpetrated on the public.
A common thief uses the same rationale, albeit without the silverplated terminology, when he says, "I can take this. He has lots. He'll never miss it." THAT guy goes to lock-up when he is caught.
But we have respectable titles for that identical behavior when perpetrated by politicians and their appointees.

Last edited by MikeJaquish; 09-17-2008 at 07:44 PM..
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Old 09-17-2008, 10:17 PM
 
19,183 posts, read 27,760,559 times
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Given the special high standards that moderators have asked to see observed in this forum, I believe I shall simply let your comments stand as their own sad epitaph.
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Old 09-17-2008, 11:26 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,117,377 times
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Quote:
Originally Posted by saganista View Post
Given the special high standards that moderators have asked to see observed in this forum, I believe I shall simply let your comments stand as their own sad epitaph.
What particularly irks me about his posts is that he calls it an "envy" tax.

One thing those that have can't seem to get over is that they think that the rest of the world envies what they have.

Quite simply that is not the case. I , for one, am not materialistic and could care less about designer labels, sporty cars etc. I don't think no matter how much money I had I could buy a pair of pants that cost more than most make in a week.

It seems that the concept of marginal utility, which you have so eloquently explained isn't being grasped, IMO.

Let's get away from the money for a second and use a different example.

Let's say the community needs water... because for some reason their well has run dry or it's just a community void of any water. To the communities left there is a dessert, which you may be able to get some water from some cactus plant here or there or you may have an oasis or two but certainly there isn't enough water to be had there. To the right of the the community is are some rivers with some flowing water in which you can get quite a bit of water from, but you certainly don't want to take all of the water from those rivers so that they run completely dry. So you get what you can without draining the river and thereby killing the wildlife that relies on that river water to sustain life. Then to the NOrth there are some lakes .. much larger bodies of water where you can get some water and quite a bit and the lake will not diminish so much and wildlife dependent on that water to sustain may not notice at all.. and then to the south is a vast ocean of water and there you will certainly get all the rest of the water the community needs without ever having truly affected the balance in said ocean.

Now.. imagine suddently you had to take an equal percentage of water from each source.. well you certainly are not going to get 25% of what the community needs by squeezing a cactus.. you'll drain all it has and it will wither and die as will the wildlife around it that needs it to sustain and you won't even come close to the 25%. Then you have the river, where you may be able to get most of the 25% but certainly those rivers will be reduced to very small puddles (and thereby turned into what the desert was before you drained it of all it's water). Lakes.. you'll get the 25% but they'll become the size of rivers.. and life will be affected. Oceans.. well you can get that 25% and no one will even know you're there!! Heck..you could have gotten 100% of what you needed from it and they would hardly notice... but we're not asking for 100% from the oceon.

Without the greater percentage of water from the larger bodies of water.. the whole of the communithy could not sustain.

Now apply that to the working poor, the middle class, the upper middle and then the upper most brackets and there you have a great analogy of why we have a progressive tax.
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Old 09-18-2008, 06:39 AM
 
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Good analogy. I don't suppose the ocean will be complaining about how hard it worked for all that water, how that's ITS water, and how you're a bleeping SOCIALIST *gasp*.

From those to whom much is given, much is expected...
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Old 09-18-2008, 06:51 AM
 
Location: Cary, NC
31,650 posts, read 55,416,037 times
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Quote:
Originally Posted by TristansMommy View Post
What particularly irks me about his posts is that he calls it an "envy" tax.

One thing those that have can't seem to get over is that they think that the rest of the world envies what they have.

Quite simply that is not the case. I , for one, am not materialistic and could care less about designer labels, sporty cars etc. I don't think no matter how much money I had I could buy a pair of pants that cost more than most make in a week.

It seems that the concept of marginal utility, which you have so eloquently explained isn't being grasped, IMO.

Let's get away from the money for a second and use a different example.

Let's say the community needs water... because for some reason their well has run dry or it's just a community void of any water. To the communities left there is a dessert, which you may be able to get some water from some cactus plant here or there or you may have an oasis or two but certainly there isn't enough water to be had there. To the right of the the community is are some rivers with some flowing water in which you can get quite a bit of water from, but you certainly don't want to take all of the water from those rivers so that they run completely dry. So you get what you can without draining the river and thereby killing the wildlife that relies on that river water to sustain life. Then to the NOrth there are some lakes .. much larger bodies of water where you can get some water and quite a bit and the lake will not diminish so much and wildlife dependent on that water to sustain may not notice at all.. and then to the south is a vast ocean of water and there you will certainly get all the rest of the water the community needs without ever having truly affected the balance in said ocean.

Now.. imagine suddently you had to take an equal percentage of water from each source.. well you certainly are not going to get 25% of what the community needs by squeezing a cactus.. you'll drain all it has and it will wither and die as will the wildlife around it that needs it to sustain and you won't even come close to the 25%. Then you have the river, where you may be able to get most of the 25% but certainly those rivers will be reduced to very small puddles (and thereby turned into what the desert was before you drained it of all it's water). Lakes.. you'll get the 25% but they'll become the size of rivers.. and life will be affected. Oceans.. well you can get that 25% and no one will even know you're there!! Heck..you could have gotten 100% of what you needed from it and they would hardly notice... but we're not asking for 100% from the oceon.

Without the greater percentage of water from the larger bodies of water.. the whole of the communithy could not sustain.

Now apply that to the working poor, the middle class, the upper middle and then the upper most brackets and there you have a great analogy of why we have a progressive tax.
Oh... I think "he" grasps. It is truly unfortunate that focusing on the fixation on others' wealth and property rights is irksome. But that fixation is a common crutch for "progressive" politicians to exploit.
I think "he" is willing to discuss the basis in envy that class warfare "progressive" wealth seizure depends on for "progressive" politicians to prosper.
Yes, "he" understands the effectiveness of clinical devaluation of another's assets through promotion of the concept of "marginal value." That "he" doesn't readily accept casual acceptance of the theft of wealth that has been "marginalized" for redistribution to buy votes does not indicate otherwise.
I think "he" grasps the concept well.
(Jeeze, "he" feels like a linebacker with an 8th grade education, using the third person to discuss "himself." )

Taxation schemes provide vote-buying platforms. Efficient vote buying depends on enough voters believing that "someone else with more will foot the bill," and "marginal valuation" is a useful euphemism employed when supporting class warfare.
(Actually, in an Orwellian way, I really like the term, and its effective subtlety, to dehumanize individuals, devalue groups, and to depersonalize their wealth and their right to any of that wealth. It is appropriate in discussion regarding covetous contempt of others' wealth as a rationalization for self-righteous seizure.)
Without triggering and harnessing the envy and covetousness inherent in "someone else with more will pay," a graduated tax could not survive. It must be promoted as "making the rich pay their fair share."

There are two ways for a politician to buy votes to attempt to stay in power:
1. Throw enough money to corporate interests to garner "trickle-down" support.
2. Spread less money per vote among those who envy what others have to convince them that someone else will pay.

The second is commonly more economically productive/successful, and one reason radical fundamentalist votes are important to fiscal conservatives. Trickle-down vote buying is less effective than envy-based vote buying.
Neither vote buying scheme has much to commend it, but the fact is, votes are for sale to the highest bidder, and the best bang for the buck for the power hungry "progressive" is based on promised wealth transfer fueled by envy.

Congratulations on beating the materialism virus.
Me too.
Personally, I believe I have also licked the pernicious envy and covetousness bug.
I have liberated myself via that victory, and accept that some folks have much more wealth than I can imagine, and that I am blessed with a little more wealth than some have.

I recognize that some folks handle money differently from how I would.
But as long as they don't espouse overuse of the thuggery of government to marginalize and seize what little wealth I do have, let them have designer dogs, and ringtones, and tattoos, and designer clothes, and jewelry, and sports cars, etc. Thank goodness they are creating jobs through spending. That is much better than forfeiture of wealth for vote buying, IMO.
I support their right to make those choices.
It is not my business what is in their pockets.
It is MY business what is in MY pocket.

That is one of the very real hurdles for The Fair Tax: Reduction of knowledge to prying and envious eyes of what wealth others may have.
Privacy is a threat to the need to marginalize and seize.

So, again to the OP's original question:

No, it is not fair.
Yes, it is fair.

Either answer can be somewhat "right." Defending either answer is not simple and not always pretty.
That is what makes it a great question.

Last edited by MikeJaquish; 09-18-2008 at 07:39 AM..
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Old 09-18-2008, 07:39 AM
 
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I think the "reality" shows and the shows that show people's huge homes (like MTV cribs) and their outstanding success more than speaks for if there is class envy...and from what little I remember many years back it started with "life styles of the rich and famous"...and multiplied.

Last edited by BigJon3475; 09-18-2008 at 07:51 AM..
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Old 09-18-2008, 09:26 AM
 
7,367 posts, read 6,533,620 times
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Quote:
Originally Posted by TristansMommy View Post
What particularly irks me about his posts is that he calls it an "envy" tax.

One thing those that have can't seem to get over is that they think that the rest of the world envies what they have.

Quite simply that is not the case. I , for one, am not materialistic and could care less about designer labels, sporty cars etc. I don't think no matter how much money I had I could buy a pair of pants that cost more than most make in a week.

It seems that the concept of marginal utility, which you have so eloquently explained isn't being grasped, IMO.

Let's get away from the money for a second and use a different example.

Let's say the community needs water... because for some reason their well has run dry or it's just a community void of any water. To the communities left there is a dessert, which you may be able to get some water from some cactus plant here or there or you may have an oasis or two but certainly there isn't enough water to be had there. To the right of the the community is are some rivers with some flowing water in which you can get quite a bit of water from, but you certainly don't want to take all of the water from those rivers so that they run completely dry. So you get what you can without draining the river and thereby killing the wildlife that relies on that river water to sustain life. Then to the NOrth there are some lakes .. much larger bodies of water where you can get some water and quite a bit and the lake will not diminish so much and wildlife dependent on that water to sustain may not notice at all.. and then to the south is a vast ocean of water and there you will certainly get all the rest of the water the community needs without ever having truly affected the balance in said ocean.

Now.. imagine suddently you had to take an equal percentage of water from each source.. well you certainly are not going to get 25% of what the community needs by squeezing a cactus.. you'll drain all it has and it will wither and die as will the wildlife around it that needs it to sustain and you won't even come close to the 25%. Then you have the river, where you may be able to get most of the 25% but certainly those rivers will be reduced to very small puddles (and thereby turned into what the desert was before you drained it of all it's water). Lakes.. you'll get the 25% but they'll become the size of rivers.. and life will be affected. Oceans.. well you can get that 25% and no one will even know you're there!! Heck..you could have gotten 100% of what you needed from it and they would hardly notice... but we're not asking for 100% from the oceon.

Without the greater percentage of water from the larger bodies of water.. the whole of the communithy could not sustain.

Now apply that to the working poor, the middle class, the upper middle and then the upper most brackets and there you have a great analogy of why we have a progressive tax.
Please excuse the lengthy post, but I couldn't convey my thoughts without doing so.

Your analogy was quite thoughtful and convincing, however, I believe it is incomplete and a bit flawed. Please allow me to explain.

The first flaw in your analogy, assuming that you’re equating a lack of water with a lack of resources and/or money to live, is that no one is “dry” but can better be analogized as being low on water, IMO. Since these are the “working poor”, the water they are currently consuming either from cacti or the oasis is enough to sustain themselves but certainly not enough to save for a dry spell and may be drying up because they failed to recognize the dangers of consuming water without planning for increased future needs. So, they have a few options, as you described, to sustain themselves and store for future use. One other flaw, as I see it, is the analogy of the river that would dry up if too much water was taken from it. In most cases rivers are supplied constant water from other sources, i.e. upriver streams and rainfall. In your analogy I believe this could be better considered those who are wealthy through no effort of their own, i.e. inheritances, silver-spooned children. Considering this, let’s analogize the middle class as having small ponds instead.

Now, other than the river communities, we can assume that the ponds, lakes, and oceans, in most cases were created from the efforts of these communities, i.e. drilling wells, storing rainwater, and good planning. So, when evaluating where would be best to get more water, the “dry” communities approach the governing body with their plan and suggest they force all communities to chip in but that the ocean communities should provide the highest percentage of water for them since they have the most and can most afford to lose a bit of it. The ocean communities, in response, are willing to help the dry communities by showing them how to drill wells and store rainwater and even voluntarily offer to provide some additional water to them to help until they can reap the benefits of their new-found knowledge even though a portion of the oceans have been used to provide water to all of the communities up to this point. But, not knowing their own future needs, the ocean communities do not want to be permanently responsible for making sure the current dry communities have a constant flow of water since they have the ability of creating their own ponds and lakes, if not oceans.

The dry communities, claiming that they have done the best they could with what knowledge they had, decide it would be much easier to have the governing body force the ocean communities to provide a constant flow of water than to learn to drill their own wells and store their own rainwater efficiently, regardless of the future needs of the ocean communities and the efforts they put into creating the oceans to provide for themselves. The governing body realizes that they could keep a bit of extra water for themselves by administering this process, though they themselves live in the lake and ocean communities, and not be affected by the mandate. They agree with the dry communities and implement their request.

This, IMO, is a better analogy for a progressive tax system. The Fair Tax would allow all of the communities, including the river communities, the discretion of providing water to all of the other communities with little being administered by the governing body. Also added to the mix would be those lake and pond communities who had moved away (companies who moved offshore) because they were being forced to provide what little they had to the dry communities. These would be able to move back since they realized that the lands they moved to weren’t requiring them to provide water to dry areas but water wasn’t as abundant. The Fair Tax would also require rogue communities that were hoarding water, unknown to the governing body (the underground economy) to participate in the process of making certain everyone could have water, could store some for dry periods, and even have the opportunity to develop into ocean communities.
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