Fiscal Cliff (Page 4)

To be sure, it would be a pretty scary proposition of actually implementing it. Even if it was revenue neutral. A restructuring of that proportion would be interesting to say the least.

even more directly, how many accountants would no longer have a job?  how big would the IRS really need to be to manage a flat consumption tax?  i think corporate accounting MIGHT still exist, would B2B sales function on a flat consumption tax as well?  could you imagine a car manufacturer's raw material cost going up 26% tomorrow?

How 'bout we just tax you on the post count in this thread alone. Talk about proportion...

Perhaps you can head up a government agency to tell me what my "fair share" should be.

Or maybe we could just tax you on how many times you use the sarcastic font.

Awwww watch me cry for the laid of IRS agents.....

As I said I think it would be a huge shock to the system but I do think we would come to a new equilibrium fairly quickly.

Though the raw materials cost goes up the tax burden goes away so with the right structure it balances out.  Those taxes are already reflected in the price of the car so any huge price increase would be bogus.

Excutive Decision:  42 that is the fair share #

so if ford pays a 26% consumption tax on sheet metal panels, i don't have to pay a 26% tax on my car?  i'm not following this logic at all.

I use the sarc font way less than that

No if Ford pays 26% corporate tax and that goes away to be replaced by the 26% consumption tax you are paying the same 26% tax you were paying before.

Maybe so, but I know you think it!

There is not a font for what I think sometimes

Some say to only charge sales tax at POS of final good. So a car would be taxed at 10% at sale, but not on all the parts that made it up. I don't know how you do that because the parts makers are supplying a good. This get's into VAT though.

But bottom line is that if Ford pays tax on goods, then it will still be 10% of the care price, but then at POS it would actually be 20%.

In the end it does not matter. All taxes are passed on to the consumer, so we pay no matter what. So point of sale of final goods or services is appropriate AFAIC. All sales would still have to equal current revenue to be neutral, and it has to come from somewhere.

This depends on the type of consumption tax (there has been discussion about it through the thread).

A consumption tax, in is truest form, is probably an end user tax, so whoever "consumes" the product, would pay the tax.  The idea being that products would probably be produced with little or no added taxes, which would actually make them cheaper to produce, and cheaper to sell.  The buyer would pay the tax, which would put it in line with today's $$.

On the other hand, I believe a VAT is more of a "tax" along the way, where items are taxed at stages of "value" being added or produced.  That would most likely be much less than 26%.

And, you ask, on the consumption tax, well that corporation isn't going to pay any tax, they are  greedy, etc.  Well, the prices would be reflected with the end purchase price and tax.  It's still supply and demand at any given price.  Company's would have to produce their product at a competitive rate, and have to figure in the consumption tax as to where that true price would be, once purchased.

It's a totally new way of thinking.  Consumers would automatically have extra money, because of no deductions from their paycheck, they would simply be paid in "gross".  But, the items they are used to buying (especially at first) would probably rise a bit in overall dollars.

Of course, take my comments for what they are worth, which may not be much.

http://news.yahoo.com/much-fiscal-cliff-cost-210019674.html

According to the above article this is how taxpayers will be impacted in congress can't get off their arses and deal with the budget.

--Lowest fifth of households (average income: $11,239): $412

--Second-lowest fifth (average income: $29,204): $1,231

--Middle fifth (average income: $49,842): $1,984

--Second-highest fifth (average income: $80,080): $3,540

--Highest fifth (average income: $178,020): $14,173

--Top 1 percent (average income: about $1.3 million): $120,537

edited to delete the "?"

So I know this got derailed into let's have a new tax scheme but for those of you who think "Oh, yeah, let's go over the fiscal cliff" consider this, the government is the largest employer, including yours truly, and here's some sobering wallet impacting news for you to consider if YOU were the one in MY shoes, I will be scheduled to TEN WEEKS of furlough next year, if we indeed go over the fiscal cliff.  So yet again, it's the "little guy" IMHO who will be impacted.

And the insanity of it all is my one co-worker and I are considered discretionary (subject to the furlough) while my boss, the judge, along with his immediate staff, highly paid law clerks and his judicial assistant are considered MUST PAY, so they'll continue to be paid.

Sound fair to you?

Does the course we are on of spending more than we have seem fair? How fair will it seem when we implode and this 20% cut looks like the good ole' days?

I don't know about fair, not much in life is other than the amount of time in a day for everyone.

It sounds reasonable for the situation we are in financially.

After all we need to make sure Big Bird and Elmo keep getting subsidized don't we?

Believe me, I get life is not fair, but really you think furloughing the worker bees, putting the judiciary at a standstill while b/c we won't be able to operate, while judges & law clerks continue to get paid is the way to go -- just in one tiny fractional example.  The judiciary is something like less than .10% of the entire federal budget, so imagine multiplying this scenario throughout with "must pays" & discretionary.  So all the people who really need to worry about getting the budget in order really aren't going to feel the pinch.  Wow, it'll work really well I'm sure.

I work for a fed contractor...guess I could be looked at as "expendable" should congress not get their act together.  Should that happen, I can look at a lot of other places they should cut before taking me out.  But the decision makers don't cut themselves.  I don't have much faith that congress is going to come together on this.  On the other hand, Mr. Obama was just elected a 2nd term and he is well aware that he has not performed well on employment and the economy during his first term.  It's time he shows some leadership skills and motivates congress to work together and do the right thing.  If he can't, his next 4-years will be brutal.

I don't think there is much Obama can do to motivate both sides to work together. They have to both decide they want to. I would hope Rep's got the message that their policies still aren't favored by a lot of people, and that Dem's got the message that the House is still not in their control so they both need to compromise.

I don't think there is much Obama can do to motivate both sides to work together. They have to both decide they want to. I would hope Rep's got the message that their policies still aren't favored by a lot of people, and that Dem's got the message that the House is still not in their control so they both need to compromise.

You said that already.

It's both. If you cut ALL spending by 33% we still wouldn't have a balanced budget.

I just can't believe we can't live on 2.7- 2.9 trillion or there about, depending on the source you look at.  I say keep cutting, its not going to be easy or painless.