[Chrysostom]

Originally Posted by Victus Mortuum

That is why I put a 'true' consumption tax.

If we're talking about the US government, though, remember that the poor are going to be getting much more (by percent) than the rich out of social security, govt healthcare, and welfare. Their tax dollars are "investments" in the sense that they will get much more out than they will ever pay. By percent, this tips the scales significantly in favor of the poor, and it's the middle class that gets screwed (Jerry mentioned small business owners).

Also, there has to be some sort of business tax or everybody would just set up a personal dummy corporation and have it buy everything for them.

Originally Posted by Victus Mortuum

Person 2 - $50,000 - 100% - $50,000

If a lone individual who makes $50k isn't investing anything then it's his own fault, but I'm guessing you were just trying to use simple numbers? Or, to put it another way, why would only the wealthy be able to invest? I can think of plenty of easy programs that the lower- and middle-classes could sink 10-20% of their income into. A friend of mine even started buying houses to rent them out while he was a bachelor making 60. When I made $1200 (gross) a month I was making $100 in debt payments that I could have shifted to investments if I were out of debt.

Originally Posted by Victus Mortuum

And so it turns out that a flat rate all sales tax is the equivalent of a flat rate income tax.

Actually, your definition of 'regressive' (and the assumption that it's bad) require a flat income tax. Anything other than that would have been "regressive" by your usage, since by your own math the poor would actually pay no taxes, but you still called it regressive.

Originally Posted by Victus Mortuum

supremely complicated and would require a big government to monitor.

I made a similar argument above. The FairTax sounds simple but so long as you're looking to produce the huge budget the federal government needs you'll have to have a serious tax bureaucracy. But even if you can get taxes to a smaller level, where the FairTax might be feasible, I still think it's as weird as the property tax or the death tax.

[comitatus1]

Fair Tax

That's an oxymoron if I ever heard one.

Chris

[Victus Mortuum]

Originally Posted by Chrysostom

If we're talking about the US government, though, remember that the poor are going to be getting much more (by percent) than the rich out of social security, govt healthcare, and welfare. Their tax dollars are "investments" in the sense that they will get much more out than they will ever pay.

I was analyzing the tax in and of itself, welfare is something entirely different that would change things quite a bit. Welfare after taxation would need to be analyzed separately and then the two would analyses would need to be put together.

By percent, this tips the scales significantly in favor of the poor, and it's the middle class that gets screwed (Jerry mentioned small business owners).

Agreed. That is why I showed what the 'welfare rebate' would do to the percents. It regresses the most, as you said, on the income just above the rebate line (typically the middle income).

Also, there has to be some sort of business tax or everybody would just set up a personal dummy corporation and have it buy everything for them.

??? I never said there should or shouldn't be any kind of business tax or any other tax. I was only analyzing consumption and sales tax...

If a lone individual who makes $50k isn't investing anything then it's his own fault, but I'm guessing you were just trying to use simple numbers?

You guessed correct. The point was made the same though.

Or, to put it another way, why would only the wealthy be able to invest? I can think of plenty of easy programs that the lower- and middle-classes could sink 10-20% of their income into. A friend of mine even started buying houses to rent them out while he was a bachelor making 60. When I made $1200 (gross) a month I was making $100 in debt payments that I could have shifted to investments if I were out of debt.

Again, simplification. Obviously, though, the wealthier you are, the higher percentage of your income is going to be in investment rather than consumption, which makes the point just as valid.

Actually, your definition of 'regressive' (and the assumption that it's bad) require a flat income tax. Anything other than that would have been "regressive" by your usage, since by your own math the poor would actually pay no taxes, but you still called it regressive.

No. I think you misunderstood me somewhere, though I'm not sure where or how.

A regressive tax is a tax where the poor pay a higher percent out of their income than the wealthy do.
A proportional tax is a tax where the poor pay the same percent out of their income that the wealthy do.
A progressive tax is a tax where the poor pay a lower percent out of their income than the wealthy do.

Source.

With the 'welfare rebate' of the consumption tax, I was saying that it was still regressive on everyone except the very poorest (so it regresses on all income but 'poverty level'.).

[Chrysostom]

Originally Posted by Victus Mortuum

I was analyzing the tax in and of itself, welfare is something entirely different that would change things quite a bit. Welfare after taxation would need to be analyzed separately and then the two would analyses would need to be put together.

Originally Posted by Victus Mortuum

Again, simplification. Obviously, though, the wealthier you are, the higher percentage of your income is going to be in investment rather than consumption, which makes the point just as valid.

And the poorer you are the more you'll get from govt benefits, so if you're going to count investments you ought to count entitlements too -- my only point being that the tax isn't regressive so much as it is weighted toward the middle-class.

Originally Posted by Victus Mortuum

No. I think you misunderstood me somewhere, though I'm not sure where or how.

A regressive tax is a tax where the poor pay a higher percent out of their income than the wealthy do.
A proportional tax is a tax where the poor pay the same percent out of their income that the wealthy do.
A progressive tax is a tax where the poor pay a lower percent out of their income than the wealthy do.

Source.

With the 'welfare rebate' of the consumption tax, I was saying that it was still regressive on everyone except the very poorest (so it regresses on all income but 'poverty level'.).

You didn't include this caveat (that the poor are untaxed) in your original post so I thought you were glossing over it.

[Victus Mortuum]

Originally Posted by Chrysostom

You didn't include this caveat (that the poor are untaxed) in your original post so I thought you were glossing over it.

My Apologies.