Fair Tax Act

[The Don]

Disagree.
The concept makes sense when properly implemented (for starters, it would be necessary to exactly know who owns what at any time), and would come with protections for renters. Already in most countries, new owners can't just evict previous tenants or raise rents quickly or massively.


The point is that such a system would incentivize the rich to screw each other rather than the poor or State.

Actually, they can screw whoever they please.

You value your house, entirely accurately and reasonably at $200k. It's the smallest and cheapest house in town. I decide that I want your house because I want the empty lot, I want to get rid of "your sort" from town or simply to **** with you because of some grudge, real or imagined.

I compulsorily purchase your house for $200,001. You cannot afford to buy another house in town and so you're out on your ear through no fault of your own.

Of course you could choose to value your house well over its true value to try to prevent this kind of thing but that means that you're paying well over the odds on your property taxes and it still might not prevent me from purchasing your house out from under you for what I consider pocket change.

 

[gnome]

Even if it's not about getting the tax value honest... what if I'm completely honest about the tax value of my home, but I simply don't want to move? Why should I be forced to?

 

[The Great Zaganza]

Actually, they can screw whoever they please.

You value your house, entirely accurately and reasonably at $200k. It's the smallest and cheapest house in town. I decide that I want your house because I want the empty lot, I want to get rid of "your sort" from town or simply to **** with you because of some grudge, real or imagined.

I compulsorily purchase your house for $200,001. You cannot afford to buy another house in town and so you're out on your ear through no fault of your own.

Of course you could choose to value your house well over its true value to try to prevent this kind of thing but that means that you're paying well over the odds on your property taxes and it still might not prevent me from purchasing your house out from under you for what I consider pocket change.

There is never any protection if Rich people are willing to throw their money away to feel powerful - it's the basis of the US judicial system.

But remember that the rich twerp has to pay you at or above market price to get your house, meaning you can find something similar.
It's better than what's happening now

 

[TragicMonkey]

There is never any protection if Rich people are willing to throw their money away to feel powerful - it's the basis of the US judicial system.

But remember that the rich twerp has to pay you at or above market price to get your house, meaning you can find something similar.
It's better than what's happening now

No, it's not. If I buy a house it's because I want to live in the damn thing. I don't want to have to play games with guessing values and trying to outbid somebody else to keep my own damn house, nor do I want to move. If I buy something it's mine and I'll keep it as long as I like, and where I live I'm legally permitted to blow your head off if you try to take it from me against my will. There is nothing more un-American than taking away the right to own personal property.

 

[The Don]

There is never any protection if Rich people are willing to throw their money away to feel powerful - it's the basis of the US judicial system.

There's currently no easy path if they want my house and I don't want to sell. Under the tax plan you outlined there is

But remember that the rich twerp has to pay you at or above market price to get your house, meaning you can find something similar.

No, they have to pay me one dollar over the price I have set - let's assume that I've set the value to be the fair market value. It doesn't mean that I can afford another property and in any case, I don't want to have to move.

It's better than what's happening now

No it isn't. Currently there's no easy way for someone to force me to sell my house.

 

[lobosrul5]

Expensive houses, cars and yachts would simply be bought by corporate entities - who would be exempt or discounted when it came to consumption tax otherwise there'd be no investment.

Yeah, executive compensation would probably include a house... also the FairTax as written only seems to tax new items. So, that would probably depress the market for new home sales while driving up the cost of existing homes. Great for everyone that already owns a home, horrible for people saving to buy a first home.

 

[lobosrul5]

doesn't matter - it's the purchase being taxed, not the entity buying it.
If a corporate entity wants to offset the tax it paid for a private plane, it would have to write off other assets.

But yeah, this is not the best way to tax the rich, as it would be IMMENSLY profitable to find ways around it.


a better idea would probably be the Common Ownership Self-Assessed Tax (COST): the principle being that there is a fixed tax rate for real estate by type and grade, but each owner can assess by themselves how much the object is worth. This could drastically reduce your tax burden, but the flipside is that you HAVE TO SELL AT THAT PRICE if someone offers to buy.
This would make it almost impossible to cheat on your taxes, as any deliberate undervaluation would mean you lose your property.

I'd value my home at 0 dollars and then rent it out.

ETA: oh wait, I got behind on this thread and missed the anyone can buy it at that amount... wow that'd be a nutty system.

 

[Random]

I'd value my home at 0 dollars and then rent it out.

ETA: oh wait, I got behind on this thread and missed the anyone can buy it at that amount... wow that'd be a nutty system.

Value it at $1, then set up a shell corporation to put a $50 million lien on the property...

 

[The Great Zaganza]

Yeah, no.
The concept is sound and would prevent the current excesses of companies buying homes and overcharging renters.
Which is also the reason why it will never be enacted.

 

[JoeMorgue]

I think the entire concept is a highly over-idealized misconception about what taxes in a democracy are.

Open secret people. "Paying for the society" is like... 1/4th of their actual purpose.

Taxes are bribes given to demographics that can swing elections.

Our huge, complicated tax code with rules and exceptions existing and not some simple "Everyone pay X or X%" plan is a feature, not a bug.

 

[The Don]

Yeah, no.
The concept is sound and would prevent the current excesses of companies buying homes and overcharging renters.
Which is also the reason why it will never be enacted.

It's only sound if you completely ignore the wealth of arguments against it.

 

[ahhell]

Even if it's not about getting the tax value honest... what if I'm completely honest about the tax value of my home, but I simply don't want to move? Why should I be forced to?

Are you SURE that was a Never Keven demand? That's too sensible for the Q crowd.

Broken clocks and what not.

 

[novaphile]

doesn't matter - it's the purchase being taxed, not the entity buying it.
If a corporate entity wants to offset the tax it paid for a private plane, it would have to write off other assets.

But yeah, this is not the best way to tax the rich, as it would be IMMENSLY profitable to find ways around it.


a better idea would probably be the Common Ownership Self-Assessed Tax (COST): the principle being that there is a fixed tax rate for real estate by type and grade, but each owner can assess by themselves how much the object is worth. This could drastically reduce your tax burden, but the flipside is that you HAVE TO SELL AT THAT PRICE if someone offers to buy.
This would make it almost impossible to cheat on your taxes, as any deliberate undervaluation would mean you lose your property.

Robert Heinlein used to promote that idea, along with many of his naive economic ideas.

To a developer, my land is worth 1.5 million, but it only costs me $1000 per year in taxes to live here.

The assessed value is $600k (single house on a suburban block).

Should I be forced to sell my home to a developer?
(Who will get the profit from building four multi-storey homes on this block)

(Note I was recently offered $800k to sell, but if anyone gets the benefit of redeveloping my home, it's going to be me. Why should I be forced to hand over that profit to a developer?)

Capitalists hate people like me that have assets that they can't exploit.

 

[ZirconBlue]

Oh its been around for sometime:

https://en.wikipedia.org/wiki/FairTax

FairTax was a single rate tax proposal in 2005, 2008 and 2009 in the United States that includes complete dismantling of the Internal Revenue Service.[1] The proposal would eliminate all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes, replacing them with a single consumption tax on retail sales.

Indeed, if one were so inclined they could find discussions here on this forum dating back 15 years or so ago.

If the 23% really was on ALL personal spending in the United States, and spending did not go down as a result it would still be a net loss in revenue.

If this is the same plan that's been mooted out in the past, the 23% is the percentage of the total that is tax. It's actually a 30% add-on to the price.

 

[psionl0]

When Australia brought it in, it was in ADDITION to income taxes, not a replacement of income taxes.

That part is true but the original purpose of the GST was that states would use it to replace harmful "nuisance" taxes such as payroll tax and stamp duties.

Unsurprisingly, every state without exception opted to have bigger budgets instead.

 

[Norman Alexander]

That part is true but the original purpose of the GST was that states would use it to replace harmful "nuisance" taxes such as payroll tax and stamp duties.

Unsurprisingly, every state without exception opted to have bigger budgets instead.

It was also a sop to the states by the then conservative federal government (Howard). They had been pressing for more revenue from federal treasury. Howard appeased them by introducing a federal GST and saying that it would all be directed towards the states. It wasn't, of course. And even when some was, it wasn't equitably. Just like pre-GST.

 

[a_unique_person]

That part is true but the original purpose of the GST was that states would use it to replace harmful "nuisance" taxes such as payroll tax and stamp duties.



Unsurprisingly, every state without exception opted to have bigger budgets instead.

The cut of the GST for the states was never enough to allow the removal of stamp duty from the beginning.

 

[The Great Zaganza]

It's funny and sad that people judge an idea on the principle of "change this but leave everything else the same" instead of seeing it as part of a broader policy change.
Yes, implementing a COST scheme in the current system would be devastating, because taxation isn't the core problem when it comes to real estate development in the US.
Japan has figured it out, with rents in Tokyo being more affordable than in most big US cities.

But in order to get taxation from real estate, when need a system that can't easily be manipulated. If you are worried about low income renters getting evicted, just have the State own those properties, as is usual in many, many places: Singapore, for example, or the city of Vienna.

In short: don't be so quick to shoot the Messenger for problems that have nothing to do with the message.

 

[psionl0]

It was also a sop to the states by the then conservative federal government (Howard). They had been pressing for more revenue from federal treasury. Howard appeased them by introducing a federal GST and saying that it would all be directed towards the states. It wasn't, of course. And even when some was, it wasn't equitably. Just like pre-GST.

I understand that all of it did go to the states. John Howard even tried to argue that GST should be a states' tax instead of a federal tax (of course that didn't wash since the federal government had total control over how the GST was distributed).

Of course, the distribution wasn't equal and it was never intended to be. The idea was always to give more GST revenue to those states where the votes mattered most.

 

[Norman Alexander]

I understand that all of it did go to the states. John Howard even tried to argue that GST should be a states' tax instead of a federal tax (of course that didn't wash since the federal government had total control over how the GST was distributed).

Of course, the distribution wasn't equal and it was never intended to be. The idea was always to give more GST revenue to those states where the votes mattered most.

Anyone who knew Howard's Way knew THAT was the real reason.