Why is CA broke after having very high taxes (excpt Property)? (Sacramento: homes, employment)

[The_gateway]

I have heard its a large cash based workforce and cash based economy as well. People earning money under the table, then spending said money without paying taxes.

[revelated]

Originally Posted by The_gateway

I have heard its a large cash based workforce and cash based economy as well. People earning money under the table, then spending said money without paying taxes.

Which is exactly why FairTax or a comparable consumption tax instead of all of the others makes sense. If people would stop worrying about the prices of things and look at the bigger picture...

[SoCal35]

Originally Posted by revelated

Which is exactly why FairTax or a comparable consumption tax instead of all of the others makes sense. If people would stop worrying about the prices of things and look at the bigger picture...

Consumption tax is NOT a FairTax. Whatever the rate is...everyone pays the same rate.

Better to cut loopholes and tax breaks and lower income tax rates for everyone with 4 graduated (progressive) rates based on income.

[revelated]

Originally Posted by SoCal35

Consumption tax is NOT a FairTax. Whatever the rate is...everyone pays the same rate.

Better to cut loopholes and tax breaks and lower income tax rates for everyone with 4 graduated (progressive) rates based on income.

I just don't get this. Why are people so gung-ho about having your money taken from you just for the fact that you made it? Income taxation is an "honor system" where the rich can avoid paying their fair share. A consumption tax - WHICH IS A FAIR TAX - stops this behavior by making sure everyone is paying into the system, which they aren't now (evident by Wesley Snipes and Ron Isley, among others).

SO what if it's the same rate?

If I pay 23% of the price of a car that's $25,000, some millionaire should be required to pay 23% of the price of a Hummer that's $125,000. That's called FAIR taxation. It encourages them not to indulge so much.

[Curmudgeon]

Originally Posted by SoCal35

Consumption tax is NOT a FairTax. Whatever the rate is...everyone pays the same rate.

Better to cut loopholes and tax breaks and lower income tax rates for everyone with 4 graduated (progressive) rates based on income.

It's imminently fair. A poor person's tax is the same as a rich person's tax. One will spend less and the other more. Progressive tax rates are only a means to fill the state's coffers and punish/penalize people for their success. What's fair about that under the "equal protection" clause?

Flat tax is the fairest and most proportional.

[SoCal35]

Originally Posted by Curmudgeon

1) It's imminently fair. A poor person's tax is the same as a rich person's tax. One will spend less and the other more. Progressive tax rates are only a means to fill the state's coffers and punish/penalize people for their success.

2) What's fair about that under the "equal protection" clause?

Flat tax is the fairest and most proportional.

1) A flat tax would clearly shift the tax burden to the poor and middle class and make our modestly progressive tax system extremely regressive. Any half-way decent economist not on the payroll of the RNC will tell you that.

2) Have you never heard of the 16th Amendment to the constitution?

To quote the father of free markets Adam Smith, "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

[The_gateway]

Originally Posted by revelated

Which is exactly why FairTax or a comparable consumption tax instead of all of the others makes sense. If people would stop worrying about the prices of things and look at the bigger picture...

Agreed.

[revelated]

Originally Posted by SoCal35

1) A flat tax would clearly shift the tax burden to the poor and middle class and make our modestly progressive tax system extremely regressive. Any half-way decent economist not on the payroll of the RNC will tell you that.

This is bunk.

Right now, if a person makes $30,000 a year, survival in California is EXTREMELY difficult. By the time you're done you're down to around $25,000 take home. The reason:

• Federal income tax
• State income tax
• State sales tax
• Property tax
• Capital gains tax
• Use tax
• Luxury tax
• Health care tax

We must basically "justify" to each government why we don't owe the money they say we owe. The governments also would prefer a system where you overpay into the system and then "request" a refund based on having to justify why you overpaid. Additionally, the governments have brainwashed Americans into actually looking forward to refunds - the money that should never have left their pockets in the first place. I've heard people complaining about losing tax credits and deductions not realizing that they would no longer matter if we took away the requirement to file in the first place and negated the taking of income.

If that's not regressive, I don't know what is.

Compare that to FairTax. People pay higher sales tax on the goods and services they choose to use. The money is automatically reported as with current business operations that report sales taxes collected. No tax forms to complete = savings on paper generation costs and staff salaries. They also get an allotment every month for the "bare necessities" which offsets the expense for those. If your rated salary is $30,000, you take home $30,000, thus you have more to spend, and are more comfortable doing so. Spending would automatically increase - more spending, more commerce. More commerce, more jobs required to meet demands. More jobs, more income, and so the cycle continues.

Continually taxing people's income before they even touch it is criminal.

[smokingGun]

which other states have implemented a Fair Tax or Flat Tax? I'm not for California being the guinea pig for new speculative taxation schemes which may have unforseen negative repurcussions 10 or 20 yrs from now.

[revelated]

Originally Posted by smokingGun

which other states have implemented a Fair Tax or Flat Tax? I'm not for California being the guinea pig for new speculative taxation schemes which may have unforseen negative repurcussions 10 or 20 yrs from now.

In order for tax reform to work it must combine both Federal and State. Thus, no state has implemented anything like it. My point though is that it can be no worse than what we have now.