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Taxing consumption, not income.

Rockylightning
Posts: 2,862
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5/3/2010 8:41:06 PM
Posted: 6 years ago
Can someone explain this debate topic to me? This is a somewhat odd topic and i'm having trouble understanding it. Please explain.

"The US should tax consumption, not income"

State sources too if you can

Thanks ;D
Rezzealaux
Posts: 2,251
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5/3/2010 8:43:22 PM
Posted: 6 years ago
Sales tax not income tax? Kinda simple.

Did you want arguments for either side or something?
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
Reasoning
Posts: 4,456
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5/3/2010 8:45:43 PM
Posted: 6 years ago
At 5/3/2010 8:41:06 PM, Rockylightning wrote:
"The US should tax consumption, not income"

This is an impossible feat. All taxation is income taxation.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Rezzealaux
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5/3/2010 8:46:53 PM
Posted: 6 years ago
At 5/3/2010 8:45:43 PM, Reasoning wrote:
At 5/3/2010 8:41:06 PM, Rockylightning wrote:
"The US should tax consumption, not income"

This is an impossible feat. All taxation is income taxation.

I like this.
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
Ragnar_Rahl
Posts: 19,297
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5/3/2010 8:51:39 PM
Posted: 6 years ago
Let's put a tax on politicians who don't vote to abolish taxes.

Something on the order of 9001 percent.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Rezzealaux
Posts: 2,251
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5/3/2010 8:56:49 PM
Posted: 6 years ago
At 5/3/2010 8:51:39 PM, Ragnar_Rahl wrote:
Let's put a tax on politicians who don't vote to abolish taxes.

Something on the order of 9001 percent.

Or, we could just tax the Fed. At .0006%. Doubles tax revenue.
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
JustCallMeTarzan
Posts: 1,922
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5/3/2010 8:57:25 PM
Posted: 6 years ago
A consumption tax basically works like this...

Let's say you make $100,000 a year, or about $75,000 after normal income taxes. Everything you buy at Wal Mart is taxed, say, another 10% (it really is in Illinois). So you spend roughly 20,000 on consumables (DVDs, clothes, some foods, a new grill, pens, pencils, condoms, etc...). You now have ($75,000 - [20,00 * 1.1]) or $53,000 left over to pay the mortgage, bills, etc...

A consumption tax would have you keep your $100,000, but now when you go to the store, your 20,000 would be taxed at (and perhaps I made a poor example) roughly 241% to come out even...
Reasoning
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5/3/2010 9:00:58 PM
Posted: 6 years ago
At 5/3/2010 8:57:25 PM, JustCallMeTarzan wrote:
A consumption tax basically works like this...

Let's say you make $100,000 a year, or about $75,000 after normal income taxes. Everything you buy at Wal Mart is taxed, say, another 10% (it really is in Illinois). So you spend roughly 20,000 on consumables (DVDs, clothes, some foods, a new grill, pens, pencils, condoms, etc...). You now have ($75,000 - [20,00 * 1.1]) or $53,000 left over to pay the mortgage, bills, etc...

A consumption tax would have you keep your $100,000, but now when you go to the store, your 20,000 would be taxed at (and perhaps I made a poor example) roughly 241% to come out even...

This post shows great illiteracy of economics. Taxes cannot be shifted forwards.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Ragnar_Rahl
Posts: 19,297
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5/3/2010 9:02:55 PM
Posted: 6 years ago
At 5/3/2010 8:56:49 PM, Rezzealaux wrote:
At 5/3/2010 8:51:39 PM, Ragnar_Rahl wrote:
Let's put a tax on politicians who don't vote to abolish taxes.

Something on the order of 9001 percent.

Or, we could just tax the Fed. At .0006%. Doubles tax revenue.


I do not get the math and I'm not watching 10 minutes of video for it. :)
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Rezzealaux
Posts: 2,251
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5/3/2010 9:03:58 PM
Posted: 6 years ago
At 5/3/2010 9:02:55 PM, Ragnar_Rahl wrote:
At 5/3/2010 8:56:49 PM, Rezzealaux wrote:
At 5/3/2010 8:51:39 PM, Ragnar_Rahl wrote:
Let's put a tax on politicians who don't vote to abolish taxes.

Something on the order of 9001 percent.

Or, we could just tax the Fed. At .0006%. Doubles tax revenue.


I do not get the math and I'm not watching 10 minutes of video for it. :)

It doesn't explain the math, it's just some guy who is cool and talks about things :D

He just mentions it. I don't understand the math either, but it sounds plausible.
: If you weren't new here, you'd know not to feed me such attention. This is like an orgasm in my brain right now. *hehe, my name is in a title, hehe* (http://www.debate.org...)

Just in case I get into some BS with FREEDO again about how he's NOT a narcissist.

"The law is there to destroy evil under the constitutional government."
So... what's there to destroy evil inside of and above the constitutional government?
wjmelements
Posts: 8,206
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5/4/2010 5:15:09 PM
Posted: 6 years ago
At 5/3/2010 9:00:58 PM, Reasoning wrote:
Taxes cannot be shifted forwards.

Sure they can. It depends on demand elasticity.
in the blink of an eye you finally see the light
Reasoning
Posts: 4,456
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5/4/2010 5:21:48 PM
Posted: 6 years ago
At 5/4/2010 5:15:09 PM, wjmelements wrote:
At 5/3/2010 9:00:58 PM, Reasoning wrote:
Taxes cannot be shifted forwards.

Sure they can. It depends on demand elasticity.

This is false.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
mongeese
Posts: 5,387
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5/4/2010 5:25:16 PM
Posted: 6 years ago
At 5/4/2010 5:21:48 PM, Reasoning wrote:
At 5/4/2010 5:15:09 PM, wjmelements wrote:
At 5/3/2010 9:00:58 PM, Reasoning wrote:
Taxes cannot be shifted forwards.

Sure they can. It depends on demand elasticity.

This is false.

This is false.
Rockylightning
Posts: 2,862
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5/4/2010 5:27:54 PM
Posted: 6 years ago
At 5/4/2010 5:25:16 PM, mongeese wrote:
At 5/4/2010 5:21:48 PM, Reasoning wrote:
At 5/4/2010 5:15:09 PM, wjmelements wrote:
At 5/3/2010 9:00:58 PM, Reasoning wrote:
Taxes cannot be shifted forwards.

Sure they can. It depends on demand elasticity.

This is false.

This is false.

I'm getting no where...

Say this was a debate topic, what would the points be for either side.
Reasoning
Posts: 4,456
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5/4/2010 5:28:57 PM
Posted: 6 years ago
At 5/4/2010 5:25:16 PM, mongeese wrote:
This is false.

Show this supposed forward shifting of the tax burden.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Xer
Posts: 7,776
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5/4/2010 5:32:08 PM
Posted: 6 years ago
Taxes can not be shifted forward unless the taxes caused the supply of the good to decrease. Prices are determined by demand, not by the cost of production.
Reasoning
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5/4/2010 5:33:41 PM
Posted: 6 years ago
At 5/4/2010 5:32:08 PM, Nags wrote:
Taxes can not be shifted forward unless the taxes caused the supply of the good to decrease. Prices are determined by demand, not by the cost of production.

Wow. This post is ftw. I take back everything bad I may have said about you.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Xer
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5/4/2010 5:35:30 PM
Posted: 6 years ago
At 5/4/2010 5:33:41 PM, Reasoning wrote:
Wow. This post is ftw. I take back everything bad I may have said about you.

Awwww. Thanks!
Reasoning
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5/4/2010 5:40:09 PM
Posted: 6 years ago
At 5/4/2010 5:35:30 PM, Nags wrote:
Awwww. Thanks!

Yeah, man. That's a stumbling block for a lot of people, I'm quite impressed.

I recently saw a commercial for Wal-Mart about their more efficient shipping practices, "which let's us offer you lower prices". I lol'd.

The cost of production fallacy is amazingly widespread.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Xer
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5/4/2010 5:49:44 PM
Posted: 6 years ago
At 5/4/2010 5:40:09 PM, Reasoning wrote:
Yeah, man. That's a stumbling block for a lot of people, I'm quite impressed.

Indeed. A lot of people argue against consumption taxes on the basis that the price will simply be passed on to the consumer. The tax is shifted backwards, not forwards.

I recently saw a commercial for Wal-Mart about their more efficient shipping practices, "which let's us offer you lower prices". I lol'd.

Tehe. Wal-Mart probably already knows that they're lying. The commercial is to attract consumers. Which it most likely does.

The cost of production fallacy is amazingly widespread.

True. Even some free-market guys get this wrong sometimes too.
wjmelements
Posts: 8,206
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5/4/2010 5:50:41 PM
Posted: 6 years ago
If demand for the product is inelastic, then the cost is absorbed by the consumers (forward). If it is elastic, then the cost is absorbed by the producing factors (backwards).
See: Power and Market by Murray Rothbard, your hero, under the chapter regarding Binary Intervention.
in the blink of an eye you finally see the light
wjmelements
Posts: 8,206
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5/4/2010 5:52:39 PM
Posted: 6 years ago
At 5/4/2010 5:32:08 PM, Nags wrote:
Taxes can not be shifted forward unless the taxes caused the supply of the good to decrease.

This is wrong. Taxes are shifted forward if the consuming agents pay the tax. If demand is inelastic, then the producing factors can shift the cost forward. This is particularly easy when a tax affects the whole population.
in the blink of an eye you finally see the light
Xer
Posts: 7,776
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5/4/2010 5:59:02 PM
Posted: 6 years ago
http://mises.org...

"It is true that a tax can be shifted forward, in a sense, if the tax causes the supply of the good to decrease, and therefore the price to rise on the market. This can hardly be called shifting per se, however, for shifting implies that the tax is passed on with little or no trouble to the producer. If some producers must go out of business in order for the tax to be "shifted," it is hardly shifting in the proper sense but should be placed in the category of other effects of taxation."

I don't have the book, but thanks for refuting yourself. I already covered this as well.
Xer
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5/4/2010 6:06:33 PM
Posted: 6 years ago
And since when do firms change the price of goods because of taxes? There is already an ultimate price of revenue at which to set prices. It's not like raising taxes would cause firms to raise prices. The firm would lose consumers.
wjmelements
Posts: 8,206
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5/4/2010 6:07:19 PM
Posted: 6 years ago
At 5/4/2010 6:04:37 PM, Nags wrote:
At 5/4/2010 6:00:28 PM, wjmelements wrote:
http://en.wikipedia.org...

Since when are consumers inelastic.

Think gasoline. Are you going to use less gas between 2.45 and 2.55? How about 2.55 and 2.65?
How about cigarettes? Am i going to smoke less if the carton costs 2.50 or 2.60? Not particularly.

The inelasticity is not perfect, but it is there.
in the blink of an eye you finally see the light
wjmelements
Posts: 8,206
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5/4/2010 6:10:46 PM
Posted: 6 years ago
At 5/4/2010 6:06:33 PM, Nags wrote:
And since when do firms change the price of goods because of taxes? There is already an ultimate price of revenue at which to set prices. It's not like raising taxes would cause firms to raise prices.

http://upload.wikimedia.org...(consumer).svg <<<Broken link

You can't fool me. I'm in Microeconomics. The more inelastic the demand, the more of the tax is shifted to consumers.

The firm would lose consumers.

To whom would the firm lose these customers if it happens all over the market?
in the blink of an eye you finally see the light