Just don't screw around with the 60/40 rule for section 1256 contracts. They tried that two years or so ago. Nevertheless, I'm conflicted. I would like to see universal health care. But let me see the plan first. And if it's really all good, why not cut military spending, special interest (pork barrel) spending and corporate welfare to pay for it?
If such a capital gains tax is a realistic possibility won't everyone want to lock in their gains? If Obama wins shouldn't the S&P futs gap down 5%? Am I missing something?
Wrong. Huckabee's tax is not a VAT, but instead a tax on consumption at the end user. He claims that a 23% "Fair-Tax" would pay for our Federal Government's expenses . . . If you believe that, I have a "bridge" that I would like to sell you down in Arizona. Oh, and what kind of a "Black Market" do you think will develop as people try to circumvent a 39% consumption/sales tax? How big of a bureacracy will you have to create in order to enforce and account for such a tax? (A 2005 President's Advisory Panel on Federal Tax Reform study concluded that it would take a 34 percent tax-exclusive rate, not the fair tax's 30 percent, to keep the fiscal status quo. Brookings Institution economist William Gale has pegged the magic number at 39.3 percent. It could rise even higher if consumers seeking to avoid the high sales tax develop a strong black market that sucks money out of federal coffers. Buying in Canada or Mexico would have the same effect.) Some of you guys need to take Econ. 101A because you clearly do not have a basic understanding of the Facts. http://www.motherjones.com/news/update/2007/12/huckabee-fair-tax-fallacies.html
We had a similar discussion on another board, and the posts have expired but someone had a citation for a paper that listed the various evasion rates for the consumption / VAT's in Europe. I think the highest evasion rate was 30%.
I appreciate the article and open discussion about the fair tax, but the "fair tax" isn't as bad as you make it out to be either. Neither proponents or opponents are being fully honest about it. A couple points come to mind. First off, I've found almost no objective research that even suggests numbers in the 39% realm that you suggest. However, it is true that the 23% rate is actually 30%. Second, any tax reform plan should be accompanied by spending cuts and many fair taxers advocate such cuts. Third, most proposals that I've seen wouldn't tax essentials such as unprepared foods or housing cost, so the article makes a huge mistake in suggesting that a family making $70,000 annually spends more than it makes resulting in the fair tax becoming a regressive tax. If you are screaming for people to understand the facts then you need to represent the facts clearly. While it is true that low/middle income families do often spend more than their annual income, they spend a great deal of it on items that are tax exempt. If I make $50,000 and have a 40% debt ratio then it is very likely that about 60% of my spending will not be taxed each month as it would go towards groceries, housing, and other exempt bills. Assuming I spend 5% more than I make each month that would result in 45% of my income being taxed at 30%, which would result in a tax rate of 13.5% which isn't bad. OTOH, let's assume that I'm a saver and like to save 10% of my income. I would only pay an effective tax rate of 9% annually. Not to mention that fact that I have the ability to grow my investment much faster without having to jump through the hoops of tax sheltered plans. This is far from the dire situation that I hear so much from fair tax opponents. Fourth, you're correct that the system would promote black markets, but it would also bring revenues from typical tax evaders and illegals, so at the very least I would say it's a wash on that point. Sure it isn't a perfect plan. But people on both sides need to be honest about it if anything is going to be done to fix our current mess of a system.