The Glade 4.0

Yes, they are. I'd say they're more hindering the lower middle class, because food and some other necessities are exempt from sales tax, but they definitely screw the lower middle class over.

Except they don't, but obviously no one is going to convince you of that, which is why I won't bother with the long, in depth, pages and pages of explanation I've given on the subject in the past.

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As a point of order, it's Delaware with no sales tax. Florida has no state income tax.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

That was supposed to be ... "...shouldn't be flocking to Florida."

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And are tricky to define. Hence, my support of the Fair Tax with its prebate -- a rebate for the amount of tax you would pay to purchase goods to live at the poverty line. Thus, poverty line and lower pays no tax, everybody else pays a flat consumption tax on the difference between their lifestyle and the poverty line.

I prefer this to a flat tax with the first $X exempted because it incentivizes savings.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

Get your terms right. That's not the Fair Tax (which is an actual bill that's been tabled year after year for like half a decade now), that's a Flat Tax.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

A 25k exemption would not reduce the amount of people who pay no income tax.

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I prefer to think of them as "Fighting evil in another dimension"

Well then clearly the rich are all living in Florida and flying their private jets to Delaware to buy everything.

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Khross - there is a large segment of society that currently has no burden (other than state sales taxes). Establishing a consumption tax would therefore require them to start paying federal taxes, would it not? If the overall revenue was maintained the same, it would therefore shift the burden down.

If the consumption tax were set at 20%, poor people would pay 20% of their income to taxes. The wealthy would not. The wealthy would pay more in total taxes, but as a percentage of their income, they would pay less than the poor. This is why it is considered a regressive tax, as apposed to the progressive rates we have now.

There are ways to correct this, such as having different taxes on different types of items (no tax on food, huge tax on boats), but I'd only support something like this if it was kept as simple as possible.

... and a front-end sales tax on investment products.

Actually, the more I think about this, the more i think such a tax might not be a bad idea for economic stability. It would discourage speculative trading, stabilize the whimsical nature of the markets and encourage more long-term thought in investing...

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
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You're assuming a longterm investment strategy, across the board, is a good thing.

There's nothing wrong with quick return, high risk action, provided the entire economy isn't trying to do this (housing market anyone?)

I believe the primary cause of the ubiquitous sociopathic behavior among publicly traded corporations is that the shareholders are primarily interested in short-term stock values. Nobody thinks about where the company will be in 10 years, let alone 30. Long term investment mindsets would correct this.

I'm still mulling over the idea, I generally disapprove of taxing investments.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

That would wipe-out 401ks (403bs, etc) and pensions overnight. What vehicle would citizens have to save for retirement?

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First of all, it would wipe out nothing already existing. If you already own investments, you aren't going to buy those investments again--you're not going to pay retroactive sales taxes on things you already own. It would change the future investment strategies for 401ks and pensions, however, and ultimately, corporate strategies in the boardrooms and executive offices as well. If you can't turn over stock for a quick and easy profit, you've got to hold the existing stock longer and hope it does well.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

There's also the argument that speculative trades are an important/useful part of the price signaling provided by the market.

Oh, without question such a tax would drastically change the investment landscape. The upheavals would create a brand new system. I think it would be difficult to forsee all the effects, and as such it's hard to recommend. I do believe that something needs to be done to change the corporate strategic focus, however. While from a taxation perspective, I'm not sure the benefits outweigh the costs, the inexcusable and unhealthy sociopathic behavior of all publicly traded for-profit corporations is in my opinion a bigger issue to western society. This makes anything that might cure or improve the corporate behavioral problems very tempting to me.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

First, the only benefits to a 401k (or like account) or pension is that they are tax-deferred savings vehicles. If you remove that then you have no external incentive to invest.

Second, mutual fund managers buy and sell shares all day long to balance the portfolio and meet their stated investment strategies/blends (small cap stocks growing into mid-caps, extraordinary performance/growth in a single asset class, etc). They would no longer be able to do that as each purchase would result in a net loss due to taxation.

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I think the best way to solve those problems is to simply pierce the corporate veil, at least with regards to directors, senior officers, and majority shareholders. If members of the Board, the CEO, majority shareholders, etc. were all personally liable for the debts, crimes, and torts of the companies they run, we would very quickly see a lot less amoral and short-sighted behavior from those companies!

Well, that would happen with the elimination of income tax, regardless. You no longer need a "tax sheltered investment vehicle" if your income is not being taxed. You just invest.



I'm not sure that's a bad thing. Mutual funds would need to become longer-term thinkers just like any other investors. In fact, it's rather the point. Investment should be about owning something, not just flipping stock papers back and forth.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

If there is no tax-deferred benefit then there is no reason for 401Ks or pensions at all.



If I buy an emerging markets fund eventually the market is no longer emerging and is just a market. Same if I invest in small-caps, eventually they will grow to become mid- or large cap stocks. This is why every year you are supposed to review your 401k to make sure growth in any class doesn't throw off your target investments for the portfolio.

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I'm not sure you're getting what I'm saying: Part of the problem is you're looking at it as funds, diversification, etc. You may even be vaguely aware of some of company shares your mutual funds buy. However, that's the wrong way to look at things.

You aren't buying a vehicle to gaining equity for retirement. You're buying a peice of ABC company. As such, you should take an active interest in the affairs of ABC company and what it is doing, to ensure the peice of ABC company you own retains and grows in value. This is different than simply watching stock trends and seeing everything as piles of statistics and numbers. We've abstracted our investments the way we've abstracted currency, and I do not believe that abstraction is a good thing.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

I don't think you get what I am saying.

People have the option to purchase individual stocks/bonds/commodities now and don't. Why? Is it because they can't invest the time and effort to research each purchase they make? Or because they could not sufficiently diversify their own portfolio by purchasing individual stocks? Or is it because there is no tax-benefit to do so?

Right now retirement funds handle all three of those issues. However, if you tax movement from asset to asset then you destroy the ability to diversify, eliminate the value in researching stocks as overtime their classification will shift and you completely destroy the benefit of tax-deferred growth.

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...but in much the same way as eliminating the common cold would destroy the benefit of cold medication.

Regardless, I think you're missing that I'm suggesting that our current investment infrastructure is a bad idea in its entirety and we really would be better off with something new.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Not disputing that but I think you're missing my point that is not feasible through taxation. All you would do is cut out 90% of investors who don't feel it is worth the effort with no immediate benefit to themselves. Even with the tax-deferred benefit the number of contributors to the "market" is pitiful.

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With the exception of the very wealthy, investors would mostly still be far better off buying taxed investment vehicles without having to pay any income tax on anything than they would have been before. What would you rather pay, a tiny sales tax on your investments? Or a 30%-ish tax on all of your income apart from the small amount you are able to put into tax-deferred plans like you do now?

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █