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 Post subject: Consumption Tax?
PostPosted: Mon Feb 01, 2010 6:07 pm 
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Might not be such a good idea. Just ask Colorado Springs how it's working out for them in this recession.

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PostPosted: Mon Feb 01, 2010 6:25 pm 
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How is this the fault of the sales tax model, as opposed to any other taxation model they might have chosen? There are thousands upon thousands of municipalities in the U.S. that operate on the sales tax revenue, and most of them are not in as dire a state as Colorado Springs apparently is. What makes Colorado Springs different? How have they been managing their finances in recent years? There are just way too many unknowns to conclude anything about the causes of Colorado Springs' specific situation.

Or in short:

1) You're trying to draw broad conclusions from a single point of data.

2) You don't have enough information about your single data point to support your conclusions even if we wish to overlook point #1.

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Last edited by Stathol on Mon Feb 01, 2010 7:06 pm, edited 1 time in total.

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 Post subject: Re: Consumption Tax?
PostPosted: Mon Feb 01, 2010 6:44 pm 
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I've been thinking about this lately, actually. In theory, income taxes should be a disincentive to earn money and the sales taxes should be a disincentive to spending money. In practice, though, I don't really see income taxes having much of an impact on people's career choices, how hard they work, etc., but I do see people curtailing consumption based on sales tax.

*shrug* Just an observation. Occurred to me the other day when I bought a lower-tier model of TV than I had planned because sales tax pushed the price of the one I wanted above the amount I'd budgeted.


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PostPosted: Mon Feb 01, 2010 6:59 pm 
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consumption tax is only bad when you make it obvious. like "This food is only $30, but your bill is $35!"

Over here they just include the tax in the actual price so you know what you're paying for... I hated the fact that they caught you at the end of meals with the stupid tax thing.


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PostPosted: Mon Feb 01, 2010 7:03 pm 
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Well, I think that might be more of a VAT tax vs. sales tax argument. ... Which is not something I've really spent enough time studying to have a solid opinion about one way or another.

Edit: In other words, what Lydiaa just said.

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PostPosted: Mon Feb 01, 2010 7:29 pm 
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Never should have had a parks department in the first place, thats 3.1 million more for cops.

When times are tought, they should be tough for everyone, not rise government jobs above others making it even harder on the others.

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PostPosted: Mon Feb 01, 2010 8:06 pm 
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Elmarnieh wrote:
When times are tought, they should be tough for everyone...


How socialist of you! ;)


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 Post subject: Re: Consumption Tax?
PostPosted: Mon Feb 01, 2010 8:21 pm 
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A tax system designed to discourage spending doesn't mesh well with an economy that runs on spending and debt.


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PostPosted: Mon Feb 01, 2010 8:24 pm 
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Uh, really? Because it seems it would work exceptionally well at generating tax revenues in such a scenario.

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PostPosted: Mon Feb 01, 2010 8:25 pm 
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The US economy falls apart if people are discouraged from spending money. It's why the Fed takes such drastic measures to avoid deflation at all costs.


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PostPosted: Mon Feb 01, 2010 8:30 pm 
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Except deflation doesn't discourage spending - it makes investment instruments that are denominated in the dollars even more attractive, even with low interest rates.

And when you have an economy based no debt and spending, a consumption tax model does exceptionally well generating tax revenues.

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 Post subject: Re: Consumption Tax?
PostPosted: Mon Feb 01, 2010 9:49 pm 
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RangerDave wrote:
In practice, though, I don't really see income taxes having much of an impact on people's career choices, how hard they work, etc. ...


Career choice? Probably not.

Whether to pick up an extra shift on the weekend or to have your spouse work v. not work, etc. I definitely have seen or experienced.

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PostPosted: Mon Feb 01, 2010 10:15 pm 
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Monte,

California. Broke by April. It doesn't matter which side of the spectrum you're on - poor management is poor management.


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PostPosted: Mon Feb 01, 2010 11:27 pm 
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Without a doubt - poor management is poor management. I would argue that California's problem is actually being income-tax phobic. Colorado springs, as well. When a recession hits, you can't maintain basic services, you can't work on sanitation - everything goes to pot.

No one likes taxes. However, everyone likes their city to be well funded and functional. I think this shows that the consumption tax model is not the superior model it is made out to be by it's proponents. It limit's governments ability to do it's job in pretty significant ways.

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PostPosted: Mon Feb 01, 2010 11:46 pm 
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There are no superior model for tax or politics. There's just the best for the current situation.

During a recessions consumption taxes are a bad call.


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PostPosted: Tue Feb 02, 2010 10:28 am 
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Oh, I don't know, I think there are superior models for taxation. Consumption taxes are a regressive tax - they saddle those least able to handle such a burden with the majority of the overall tax burden. Now, don't get me wrong - there are uses for a consumption tax. If you want to cut down on the amount of emissions, you raise gas taxes. Of course, in America, that will cost you your political career. Sadly, we are not a long-term thinking society.

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PostPosted: Tue Feb 02, 2010 10:33 am 
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What do you think a debt-inflation tax structure does?

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PostPosted: Tue Feb 02, 2010 10:40 am 
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It's not actually a tax and more a possible economic outcome of inflation?

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PostPosted: Tue Feb 02, 2010 10:44 am 
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Monte wrote:
It's not actually a tax and more a possible economic outcome of inflation?


Except it is. When retired people's savings get sacked or their SS loses purchasing power, it literally was because that reduced purchasing power was used in lieu of other types of tax revenues.

That is a taxation. It has nothing to do with it being an "economic outcome". It doesn't even have anything to do with economics, it's just the way a fiat currency system works.

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PostPosted: Tue Feb 02, 2010 10:54 am 
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Taxes involve passing a law. Again, this is a little bit like saying a premium is a tax. No, it's a premium. I agree that it has a net effect similar to a tax, but it's not actually a tax.

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PostPosted: Tue Feb 02, 2010 11:07 am 
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Yea, that law was passed in 1913. It was called The Federal Reserve Act.

Your logic is absurd. We could take income, corporate payroll, capital gains windfalls etc. taxes to 0 and just use inflation through monetization to pay for everything. By your logic, we'd have no taxes and all social programs could be paid for for free.

You're just arguing the semantics of what's said because it's (rightly) stigmatizes something you like into being more representative of what it actually is.

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PostPosted: Tue Feb 02, 2010 11:10 am 
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Would you mind editing your post to remove the inflammatory and unnecessary personal attacks and accusations? Dash has asked us to be good, so would you mind contributing to that effort?

"Your logic is absurd" and the last line of your post are both personal in nature, and don't do anything to keep the level of tension down. I'd appreciate it. Thanks!

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PostPosted: Tue Feb 02, 2010 11:12 am 
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Fine, "that logic is absurd".

Besides which, if we call it not a tax, it still diminishes the personal purchasing power of the working class disproportionately compared to the weathy, who's wealthy is often held in non-currency denominated equities.

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PostPosted: Tue Feb 02, 2010 11:14 am 
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Rafael wrote:
Fine, "that logic is absurd".


Thank you. I appreciate the effort.

As to the meat of our disagreement, we will have to agree to disagree.

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Besides which, if we call it not a tax, it still diminishes the personal purchasing power of the working class disproportionately compared to the weathy, who's wealthy is often held in non-currency denominated equities.


I don't necessarily agree with that. That's why it's important to keep inflation relatively low.

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 Post subject: Re: Consumption Tax?
PostPosted: Tue Feb 02, 2010 11:23 am 
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Keeping inflation "low" (see 3-3.5% claims by the Government) still marginalizes the working class far more than it does those capable earning at rates which exceed the minimum cost of living and inflation. Currency should become more valuable over time as the cost of living decreases due to technology and improvements in resource management. The current system of economic policy defeats progress.

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