What if consumption goes off-shore, or to illegal activities, because the cheaper goods and the bigger money can be made that way instead of keeping it in America?
extending my earlier argument further: one can resort completely to that alternative currency (coupons) and trade exclusively with them instead of government backed currency. in that case, there would be no income (only coupon income which has no value in the real world but only acknowledged by the participants of the cooperative) and hence no income tax!! and even if the govt comes and takes away 35% of these coupons, we can simply print and give back to the people what was taken away!
excellent! but i have one BIG doubt: people can resort to BARTER to avoid a consumption tax. for eg. the milkman selling a litre of milk to the baker in return for a kilo of bread, thus avoiding any cash flow or sales tax... of course, this idea can be extended by people forming cooperatives and cartels to make sure no movement of cash is involved or issuing and accepting coupons which can be redeemed later (something like an alternate currency)... is my argument flawed? please let me know :)
What if there was already right now a big percentage of fairly healthy people that, whatever they'd die, no matter how hard they tried, no matter how much they studied or improved themselves - they could not make enough to live, eat, house. clothe and receive medical care. Would this be the fault of these people, or might the world we live simply no longer need the labor of these people? There simply is no demand for anything these people might do? What if this percentage of people was GROWING?
Some of the ideas of a consumption tax are fine. He really doesn't use good arguments for his positions though. I'm not saying that some of his ideas aren't good, just poorly constructed. Most of the arguments are emotional or circular. One example is when he talks about all of the accountants and accounting business dedicated to the income tax. He states that it is a waste of resources, but he never says why. Those are all jobs, some of them pretty high paying. They're all taxed as well.
@moxenrider You need to have a knowledge of economics to understand that argument. He is basically saying that if those accountants weren't wasting their time dealing with tax codes, they would be able to work in other fields of the economy that actually create wealth.
Where do you think tax money goes, Pete? Okay, a lot may be wasted or even misappropriated, but that's another issue. A lot of taxes go toward funding public services and facilities. Where does investment money go? Mostly to the high end of town, and often overseas. And the whole charity argument was just a red herring.
I'd rather tax the high earners and use the money to provide services and facilities to everyone, to build a fair and just society that supports those that need it most.
@imroy264 except you failed to realize bill gates and warren buffett has an army of accountants help them escape taxes, they want high taxes in place so small businesses cant compete with big corporations because they dont have the lobbyist
@imroy264 That's like communism. 'fair and just' encourages those that are 'under producers' to enjoy the benefits of those that do produce. National Socialism only worked so well in say Germany because the culture was unified. today's forced multiculturalism would not allow socialism a chance: too many unproductive with bias against the productive. either force the unproductive to become productive or end multiculturalism. I don't believe both together can be accomplished.
oh please drop the income tax, but my god you want to have a flat tax. How come you see people talking about taxing food? I have tried to find articles saying that food will still be not be tax but still not luck. So if you want everything you buy "fair taxed" (at roughly 21% being said) like food, cloths, and well everything grab your ankles and enjoy it. Oh and look at your weekly grocery store recipes and see how much in taxes you spent and compare it to taking the total times 23% and see.
@peapodsss You wouldn't even need to place the consumption tax on food or clothing. The way the rich spend on luxury items would be enough to fund government programs.
@peapodsss Of course it would but that is not the concern of those who support such a proposal. The interest is not a productive and stable society but one where individuals are allowed to maintain control of every penny they obtain. If that means people who are less adept at obtaining said pennies go homeless, forgo lifesaving operations, or cannot afford to pay to educate their children then it "sucks to be them".
@peapodsss Nope. Because the income tax is already built in to the price of all goods, with a consumption tax just added on top. So it would be no worse for the poor then it is now. And if you made necessities such as food tax excempt, then they would be much cheaper to the poor then they are now. Furthermore, the only reason anyone should hate the rich, is if they think they consume more then they produce for society. If they produce more then consume, then this benefits everyone.
Now I know who you speak for. The dead wealthy aristocratic slave owners of the 18th century who created a constitution to put down revolts from the bitter inequality of such an unregulated system.
Lets think of what I'd do if I made 1 million dollars tax free. I'd invest it in china. Or I'd buy stock on the stock exchange that invests in china. Who's economy you want to be growing?
@rezek71 that depends completely on politics and if there is any profound change in society. If we continue to allow free trade w/ corporate interests garnishing the major share of benefits from it while allowing/ forcing developing countries to invest in financial instruments and paper promises to keep their currency undervalued it is a bad assumption that a corporation will invest in a country that is democratic, unpredictable, or has no consumers to buy goods.
But wouldn't a consumption tax just promote a type of tax evasion in the form of rich people travelling, as you said they would, spending their money abroad and paying no tax whatsoever.
Once we get the FairTax, we'll wonder why it took us so long. It'll eliminate the $300? billion wasted on compliance. Poor people won't pay any taxes because of the Prebate. Criminals and illegals will finally contribute to the tax collection. Prices will likely stay the same, but you'll be able to buy a lot more with your pay check. Do the research. Watch the "Its Time"? FairTax video.
The income tax is bullshit. All the money that was taken by the income tax could've been invested wisely with aspiring entrepreneurs OR at the very least be used for soup kitchens, instead it being wasted on senseless wars
I agree with Schiff, philosophically, but here is what WILL actually happen if we go to national sales/consumption tax: when it is passed, we will be told that income taxes are to be "phased out". But, they never will be, and we will end up paying both. Then, a cap will be put on the sales tax, and the rich will not be paying it on all of their consumption. I expect it will end up, after all the BS, that people will only pay on the first $100K consumed, and once again, the middle class will pay.
I support the FairTax. Prices won't rise, because taxes are only paid by consumers, and the FairTax replaces tax, not add to tax. The net change will be zero, so prices will remain constant. The poor will be totally untaxed, by the prebate, and 350 billion $ will be eliminated in overhead expenses. OH! And criminals and illegals will finally be paying taxes. Your purchasing power ill rise, under the FairTax.
This is nonsense. You want to punish those who invest (spend) in new production capability and reward those who lend (save).
Consequence? In the end only those who have absolutely no choice will take a loan, and when they do, it will be to spend on a short term day-to-day basis. Noone will invest in long term production capability or research.
So no progess for the economy in terms of the amount or the quality of goods produced. Just an economy which will keep contracting until collapse.
@monkeychess How does taxing spending and rewarding saving lead to less people taking loans? Your conclusion does not follow your points. You reward investment so that new businesses can grow, which leads to more quality goods being produced. Is it that hard to understand?
4) Fascist plundering of the American people ("bailouts")
5) Unconstitutional wars
....then the government wouldn't need to tax income OR consumption! Excise taxes would provide all the funds needed to run a legitimate, constitutionally limited government.
@BRYAN351 We don't need to get rid social programs. I say cut the military industrial complex and foreign aid. You need to still have taxes for roads, police and fire fighters etc. We could do all of this with the consumption tax instead of an income tax.
@xxdiogenescynicxx yes, we do need to get rid of socialist entitlement programs, because they are incompatible with a free society. Roads should be entirely funded by gasoline taxes. The more you drive, the more you wear the roads, the more you pay to maintain them. That's as fair as a tax can get. You can choose to not drive, so it's not forced upon anyone, either.
But, taxing income (property) is incompatible with freedom. Taxing all consumption isn't much better, and also unnecessary.
@BRYAN351 Who said anything about taxing property? And yes gasoline taxes is a wonderful idea to help maintain the roads. If we had a consumption tax we would still be able to keep some of our social programs.
@xxdiogenescynicxx your money is your property. There's really no such thing as "income." People trade their labor services for a sum of money. It's an even exchange. Then, the money becomes their property. So, to tax one's "income" is to tax one's property.
peter You live in a liberal state with liberal ideals, If you want to seriously help america and bring your ideas into law and get into gov. You have to leave the N east. go to texas or AZ were your ideas are accepted. Middle america is were you will get elected not the peoples socialist republic of conneticut. just food for thought. Thank you for your efforts and concern, just understand the majority of your ideas are middle america not yuppie america!
9:11 i agree ... BUT the rich got rich already -the poor are getting richer with slight of hand ideas...................what we need is more transparent paper pushers........that and bush in jail -then we can soundly gain confidence- and get rid of cheep products
re stand corrected, Hong Kong also does not provide for its national defense, have a space program, contribute to the IMF or the UN, does not supply foreign aid to anyone and has never been nor is now a sovereign nation.
A sales tax in place of the current income tax will be another huge systemic disadvantage to the poor. The rich and the retired will lobby for and receive tax deductions and exemptions for the kinds of consumption the rich and the retired prefer. This has been coming since the baby boom, and will be implemented as they begin to retire. It will complement higher inflation and it will be a gold mine for the federal government. So.. don't be poor.
I like your opinion and it reminds me of a discussion I had with a fellow accountant a few years back where he just as you proposed a sole consumption tax. I pointed out that people will be able to buy things outside of the country and not pay tax. Here in Sweden we've got very high taxes but that's not the main issue, as an example I take the booze tax, people drive from Sweden to Germany (~800km) just to buy booze there to avoid the tax. How would you avoid it?
Mr Schiff avoids the true issue here, sadly, and as long as that is done then the country WILL go bankrupt, there is mechanically no other outcome possible. Until people know why and understand that then you are all f*cked. Same for Europeans (Article 104 of the Maastricht rip-off Treaty, and Law 73-7 for France).
The problem is the artificially created exponential date that can never be refunded, ie the US Federal Reserve System,designed to impoverish & enslave the people until they've nothing.
Because the fractional banking system we are all in since the gold standard was abolished in favor of valueless paper money will allow those banks to increase the cashflow without the creation of riches therefore causing inflation. We're talking about a massive rate of creation here, at least 10-1, so for 800k$ in the bank that bank can create millions from thin air that it will then lend to enrich itself from inflation.
I don't think Schiff's idea can work at all.He avoids the true issue.
Mr Schiff assumes that the rich guy used as an example will invest his unused 800K$ a year in a smart productive way... How exactly? Will he not invest it in shares? Don't shareholders simply push for more profitability, short term profitability, regardless of any human/ethical aspects?
And if the rich guy puts it in the bank, all he is doing is creating more wealth for the richest (the banks), therefore impoverishing the poor further.
The GDP stands at $11.3trillion (excl. spending), and we have 3/4(approx. $8.5trillion) of the economy based on consumption. With a consumption-tax of 10 % would generate about $850 billion, what is somewhere between $250 and $300 billion less revenue compared to the income tax. It's not a big difference, but a smarter way to collect money in a harmonized fashion. Besides, 10 % is way below average if you compare it to Canada, and European countries which have a rate of 15-20 and 25 %.
I was arguing this in a Yahoo chat room the other day. You want to give incentive to save money, and invest money. Taxing savings, and investments is ridiculous. Saving your money is an act of discipline, thus why I favor a consumption based tax more than any other taxes. Saving money for the future is an act of responsibility as well, since you have the foresight for the future of some kind.
Mr. Schiff, I hope you realize that your argument regarding charitable donations is completely failed because donations are exempt from income tax. What makes your reasoning even worse is that many taxpayers donate or increase their donation amount in order to reduce their overall income tax payment...
@GohanMH1 That is the dumbest thing that only uneducated can believe. What is the point of 'hoarding' cash and not using it to grow it or to spend it on something?
HOWEVER Even if someone did that: hoarded the cash and never spent it, what would be the total effect on economy? Money sitting in a bank and not even working on a stock market or making more income some other way just gets eaten by inflation. That's the dumbest thing.
@GohanMH1 Money, that does not grow, diminish in value due to inflation.
If you have 100 dollars in a bank, just sitting there, due to even slight 3% inflation, 10 years after you put the money into the bank, your purchasing power falls by a factor of 2. This means that you can now buy half the things with the same amount of money now than if you spent it 10 years ago.
It's not productive to hoard cash and never re-invest it and it's not fun to hoard cash and never spend it.
I was thinking what the impact on the economy would be. By hoarding I meant saving or investing (stocks, bonds) instead consumption. If people were to save and invest but not consume much in a long term, would that not result in an excess capacity buildup...? I guess the subsequent layoffs would make people reach into their savings and the economy would than stabilize?
@GohanMH1 Wherever people find new efficiencies (for example we create new electrical devices that use less energy or we build cars that use less gas), the people fill in this new niche with new demand. So in case of devices that need less energy it does not mean that we use less energy. It means that we start using excess energy in a new different way.
Same with money. If there is more money in investments, it means more can be spent on creating new innovative things, this moves progress.
OMG! I have never heard it put any better than that. Everybody should hear this. I have never heard so much common sense uttered in such a short time. Bravo!!!
@mattgeb84 I'm not sure about all the founding fathers, but I'm aware of a view expressed by Alexander Hamilton. From his Federalist Paper 21, It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess.
@mattgeb84 Hamilton's Federalist Paper 21 continued: He continued by saying that the system has a built-in limit since if government taxed in excess, consumption would lessen which would lessen the tax revenue raised and that, the product to the treasury is not so great as when they are confined within proper and moderate bounds.
@mattgeb84 The evidence is that that is exactly how we DID run the country for the first 150 years. Tariffs were the means by which the federal government operated until 1913.
tariff taxes are not the same thing as a flat out sales tax, only imported goods are taxed, since much of what we consumed back then was manufactured in this country the government would not have received much income from tariffs, the federal government back then also issued lottery tickets to raise revenue similar to how many states do it today
@mattgeb84 No, they are not the same thing, but the point is, that's how it was done. Close enough for government work. It wasn't until 1913 that the government , get this, had to pass a CONSTITUTIONAL AMENDMENT to impose an income tax. Repeal it. Get the government back on a constitutional footing.
Amen! Amen! and Amen! The system is irrational, unfair and unsustainable. I paid almost $4000 in extra taxes. I refuse to go with the housing scheme. For the next year I'm considering to do something radical. Either to buy real estate and join the party of spend till doom. Or donate $17000 to get even. If you are older and have any pension plan consider to retire. Why to work for 100k and get 50K when you can retire with 30K and don't work at all.
Here's an idea for a consumtion tax that makes it fair for different income levels. The govt knows how much everyone earns each year based on their SS#, right? We could have a national sales tax and charge low income individuals less tax by running their SS# at the cash register. We'd gradually charge more tax to higher income people. If anyone found it too invasive they could choose to pay the full tax. It would be voluntary to anyone who wanted to save some money at the register.
Giving businesses that kind of unbridled access to a crucial piece of identity information would be outrageous. Peter's right: food and other living essentials wouldn't be taxed under a consumption tax, and those are things which people in lower income brackets mostly spend their money on (at least, more of their income than folks in higher income brackets). So the consumption tax would essentially do what you just described through the nature of the taxation.
@leemil4 Privacy protection is a good point to bring up but we already surrender our credit card numbers to businesses every time we use them. But perhaps the businesses wouldn't have to have access to our social security numbers though. Eventually the cards could be equipped with magnetic stripes and the numbers could be encrypted within the stripe. Plus, like I said, the system would be voluntary. Most people would just be paying the full tax. And I think food should still be tax exempt.
If less people consume, how will an increase in investments become profitable? In other words, how can capital grow if people are not willing to consume such capitable? Increased savings may increase investments, but it also stifles consumption, something which investments depend on in order to be profitable and worthwhile.
The free market creates wealth and prosperity, all the goodies and services we enjoy each day, socialism, communism and marxism on the other hand destroys it. Freedom and liberity is a beatfiul thing. Without it we're left with a centralized gov't, ruling our lives and destroying the economy. It is fair for the "rich" to be taxed the same as the poor. Freedom is better than tyranny. Natrual Law states that you control your own body and what it creates. So let the CEO's have there milions.
Peter, I agree with you 99%, this is the 1%. The key thing is reducing the extortion/theft that is taxation by gradually eliminating compulsion and limiting government spending. If people approve of a government program they will pay for it voluntarily or on a user pays basis. Shifting to a so called consumption tax is just more robbing Peter to pay Paul more efficiently. Besides it's a tax on productive business by another name - a business tax. Why not a simplified flat tax in the transition?
If you don't like the system, then don't be productive nor responsible for yourselves. Just shut down and collect every kind of government handout you can get. You have to go with the behaviour that gets the rewards and right now, that behaviour is NOT to BE PRODUCTIVE or HARDWORKING.
To restore the original tax system the federal government would have to put a flat tax on the states. I like the idea of nothing but a sales tax on a state level.
schiff's consumption tax would lead to the rich getting richer and richer and richer and the poor as usual staying the same or lower. No one should have more than 20k a year leftover after paying taxes should all be going to society, welfare, schools, roads, programs etc.
@tonybeir That worked so well in Russia. If you pay people the same for succeeding as for failing, people fail, because it so much harder to succeed. People work their ass off trying to make something of themselves and then here comes the government riding in to steal the result of their labor. That might cause a little bit of disillusionment don't you think?
People are not altruists. People do not work because they want to benefit others, people work because it earns them money.
@fluff125 basically people are selfish assholes is what you saying. We need to pass anti selfish laws then. Teach children from babies to be selfless to think of others and make everyone conform to the idea that success = helping others. not helping yourself. Punish selfish behavior very hard too. like all the greed bankers and thief inside corporations should be in prison for life.
What I'm saying, Tony, is that someone isn't going to spend 25 years of their life in school, if they get the same pay as the janitor down the street. Someone doesn't work 60 hour weeks because they want to help society. They do it because they expect a personal reward. After all, they earned it.
The beauty about capitalism is that there is no central authority telling people what to do. The only thing necessary for capitalism to work is FREEDOM.
@fluff125 right freedom. except that who decides which school you go to for 25 years? Can you choose where you're born? who decides what business you start at what time? and what makes it successful?
The hardest workers in this country are poor people and middle class people. Capitalism does not reward how hard you work it rewards luck.
If you're born into a rich family you're likely to be rich and if you're born into a poor family you're likely to be poor. just facts you can't dispute facts.
@tonybeir What the hell are you talking about? If you succeed in school and get good grades you can go to any university in the country. Even the child of a poor immigrant day laborer can grow up to be a multimillionaire entrepreneur. All it takes is hard work.
There are thousands of stories of rich kids who grow up spoiled and end up blowing their entire fortunes on wine, women and gambling. In America, anyone can succeed, anyone can fail. This is a country where you make your own destiny.
total bs. the hardest working people are professionals in the finance industry - everyone puts in 90+ hour weeks before they can make it to the top.
the caboose are the 200m+ consumerist main street workers who relative to their compensation, are negative value compared to workers in other countries such as china, but still expect to live like kings.
@trinomialtree bahahahahahahahhaahh BAHAHAHAHA "the hardest working people are professionals in the finance industry"
You must be on drugs son. the entire finance and banking industry is a heinous crime by the rich on the poor. the whole industry should be banned an a non-profit institution set up for their services. yea maybe the peons at the bottom of the finance industry work 90+ hours a week but the ceos and executives don't. EVEN IF THEY DID it does not justify millions dollars salary
@trinomialtree Man you are something else! But no worries, because when Economic crisis gets worse you're going to be one effected the most.See the middle class and Poor has pretty much lost everything,with the exceptions of the few!Who else is left? It's going to be People like yourself via Pensions, job loss and so forth.Good Luck in the future! You're going to need it!
err, sorry to pop your bubble lusty but i don't live in the US. neither do i need to worry about pensions. i gather that you are not very well versed in finance or else you would be able to infer from my handle that i work for an investment bank in quantitative trading.
its just that personally i'm a bit of a sadist and i like seeing poor people being squeezed between the twin towers we have developed - public sector monetary inflation coupled with private sector deflationary spiral.
@trinomialtree So I've come into this discussion at the end apparently. What is your stance again? Please explain to me what you suggest is your ideal government taxation method. I'd just like to know where you're coming from.
the ideal solution is to take unproductive americans (around 150m people) and re-introduce manufacturing slavery. in conjunction with this, lower taxes for corporates and banks to <10% and steer them to re-establish manufacturing bases in america to soak up the slave labor. then you will have a manufacturing environment that is competitive with china, but with a technology edge.
everyone makes money and fat lazy americans get to slim down for free.
now in case that is not possible, you can always corral these unproductive americans, stick them in california and run a giant particle beam across the faultline, and say they are seceding from the US.
the more conventional way is to inflate away the debt like the US is doing now, then press the reset button and then with no legacy debt issues, the government can then relax taxes and promote re-investment.
@888captainplanet assigns and rewards value? what the fuck are you talking about. I think what you're trying to say is that capitalism is a system in which things are as valuable as people are willing to pay for it? regardless of your stupidity that if that was just what capitalism is it's ridiculous.
@tonybeir No. If I build a car, and that car that I built is worth 10,000 dollars, I can be paid 10,000 dollars. I have created value and I can exchange it in the marketplace for an equivalent value.
People create wealth for themselves, and then convert that wealth from the form it was previously in, such as cars, into a form that is more useful to them, such as bananas, apples, beef. Whatever.
So yes, the free market assigns value. Your value is the amount of wealth you are able to create
@brothermikefan When you live here you enjoy the benefits that the govt provides such as security, education, roads, etc. These things help people succeed although they don't always think of it that way. So as a person succeeds monitarily they should give back to the community that supports them along the way. It's like paying rent. We tax based on one's ability to pay. This leaves everyone with the same relative buying power.
@brothermikefan Rich people have more buying power and they deserve it, because they earned it. They did the hard thing and created wealth, and they are rewarded by the ability to buy things.
Now when you talk about "the benefits the government provides" you miss something important. Most of these are, or should be LOCAL functions. Not federal. Each city or state can decide for itself how it wants to tax. The federal government has nothing to do with it.
@brothermikefan Also, EVERYTHING the government provides is done so inefficiently. For example the Post Office is the most lumbering inefficient dinosaur on the face of the Earth. Without massive taxpayer subsidies it would go out of business.
Our educational system, which used to be locally controlled, is now widely controlled by the Feds. Because of this our schools are now some of the worst in the world. A boring, expensive, hell that scars the mind of thousands of children.
@fluff125 I said "relative" buying power meaning a rich person could have a hundred dollars taken away from them and still be okay while a poor person could have ten dollars taken away and still be okay. I know where you're coming from with the local government argument but it's basically a moot point because I was talking about "government" and "taxes" in a general sense; not about whether things should be done locally or if they're being done well. I agree with some of your points though.
I believe that even when having consuption tax, you will need to use services of accountants too, as well as you will have to file tax forms. Why? Who is going to pay the tax? The one who sells, taking it from the money he/she got from a customer, right? So any business person will still have forms to file as well as accountants to employ. So what is the real difference?
Very much agree. I would suggest one alternative however. I think even better than a Consumption Tax (or at least a high one) is a Usury Tax. Our entire monetary system is based on debt. As small ~1% tax on all debts would cover a large portion of the revenue the federal government requires.
The idea of a consumption tax (fair tax) seems like a good plan. But I am a future college student, so I must ask: would my parents spending of my college tuition be included in the consumption tax?
Let's say we adopt the FairTax system, and get rid of all other taxes. The new sales tax would have to be around 50% for the government to have as much income as it does today. (It's government spending as % of GDP) We need to SHRINK the government first!
Also, the FairTax proposal DOES NOT exempt food and basic necessities. It uses some sort of tax welfare rebate system. The government NEEDS a welfare system - otherwise it won't have any pro-big-government voters.
The Fair Tax is not fair and the Flat Tax is not flat. Abolish the IRS, the income tax and replace it with nothing. A coercive direct tax on the fruits of my labor is theft and therefore immoral. What happen to "Thou shalt not steal"... its been turned into "Don't steal the government hates competition".
Schiff has proven himself to not be a libertarian. Taxes are theft. WE don't need them. The government and it's gang love taxes. I agree with Ron Paul. Get rid of the income tax and replace it with NOTHING. Let's be consistent here.
@escapethecollapse Replace it with nothing? How do you fund the military? How do you pay to warehouse our nuclear arsenal? This is, after all what the federal government was created for, national defense.
@fluff125 what happened before 1913? We are propagandized into believing that we need part of our incomes stolen from us at gunpoint. We don't need a military if the government doesn't mess around with other countries (back to my pre-1913 point). If you are for taxes you are for theft. If you want to voluntarily donate to support the nukes, fine with me. But this is not a voluntary system. If I don't pay, I get shot. Are you willing to pull the trigger to enforce your rules?
I can assure you that before 1913 we had taxes and we had a military.Sure we didn't have an income tax, and we don't need one. But, as Peter said, the only reason the federal government got the power to tax was in case of a war.
The idea of a donation model for government is very interesting. I'll have to think about that one, On the surface it doesn't seem like it would work, but who knows. I think the problem I have with it is that people who don't donate still receive protection
@fluff125 cool. well keep in mind that taxation is simply theft, so if we want to truly live in a free world where individual rights are truly respected, we can't have taxes. Peace.
@888captainplanet new ideas and change never come form the center they always come from the Fringe...I'm ok with that and so would Captain Planet HAHA FTW
Peter: I think I listened to this whole thing while I was doing other things. But everything you said seemed geared toward individuals. What about taxing corporations? Is it your position they should be taxed on their consumption of raw materials? Or just not taxed at all. And it's all fine and good that you say you're not looking to replace the entire revenue from our current system, but then HOW ARE YOU GOING TO PAY FOR THE WAR IN IRAQ ALL YOUR TEA BAGGING BUDDIES had no problem with???
I really hate to say this but the income tax wil be with us forever. Too many people have thier rice bowls tyed up in the income tax (Tax Lawers, accoutants ects) The Libs will never allow the income tax to be abolished. The Libs idealy would love of keep the present tax system and put a VAT on top of what we have. Mr. Schiff talks sense which is the reasion it will never become public policy.
Good post. I think you miss an important point. By switching to consumtion taxation you also tax the black economy. Drugdealers will have to pay out just as the honest worker will.
@shivan2418 How's that? Do drug dealers in your area keep records, have accountants, and have a storefront and do all their business above the table? I agree with everything Peter is saying here but I have never gotten the connection that drug dealers will somehow pay tax with a consumption tax. Please explain.
If a drug dealer makes some drugs in his basement and sells it - then he makes a profit. This is not taxed at all. If you have consumption taxation then the drugdealer will pay consumption tax on his food, his stuff from Target, Wallmart etc...
the only things he can buy out of nothing is more drugs and other illegal things.
NO IRS for a National Sales tax huh? Idiot! How many businesses cheat on their sales tax remissions? All of them. How many auditors? The IRS would grow not shrink. But this rant wasn't aimed at people who THINK about these problems but at people who walk around with a hammer trying to make every problem a nail. People like xpostal1289x.
The US citizen pays the among the lowest taxes in the industrialized world. Taxes are NOT a problem in the US. Trying to solve a problem that does not exist?
@Oraclereason The US capital gains taxes are among the highest in the industrialized world. And you've missed the point about IRS cheating entirely. A consumption tax would obviate the IRS filing requirement. Take your hammer and smack yourself a few times in the head, maybe it'll wake you up.
@4KnowWon Wow, I really like that. We exclude capital gains from income and tax it at a lower rate than income unlike Germany, France et al. who tax it as income at a much higher rate but they don't have capital gains tax per se.
So we take a perk for the rich and spin it into something that is a burden. Nice!
@4KnowWon BTW slick, I am not the one with the hammer. I don't need awakened, I have lived in 8 other countries. We have the among lowest tax burden of the industrialized democracies. Shall we discuss France?
Increasingly we have let this kool-aid mentality (like you opining on something on which you have no personal knowledge) take us from the most capable country in the world to one who begs for money from China and for scientists and engineers from india and China.
@macrhino The U.S. has the second highest corporate income tax in the world. Doesn't that count? You discuss France, I've been there, would you like to turn the U.S. into another France? "No personal knowledge (of U.S. taxes)"? It is true I live in London most of the time, but I'm an American citizen. Harvard grad, USMC veteran. And I pay U.S. taxes. (Work on your grammar, mac - sorry, I can't help it, I graduated Oxford, too.)
@4KnowWon Tell you what slick, I don't believe you. You have no knowledge of taxation (say you live in London but do not understand European tax systems). More than this you are boorish enough to make statements about grammar in a blog (stupid) while using incorrect grammar yourself. What punctuation joins two independent clauses, slick? I'll give you a hint, NOT A COMMA.
Now you think corporate income tax has something to do with this subject? Because you were so wrong on Capital Gains? Right!
@4KnowWon On top of all of this, I doubt you have been to France. You certainly have not lived there. What in particular, do you find so unappealing about France? The better than US health care? The higher standard education system? The 6 weeks a vacation a year? I have employees in France, UK too, so think really hard as I will call you out on deceptions. Did it bother you that you had a higher chance of going to a US jail as an American than a French jail as a French citizen, slick?
@macrhino No, I've never lived in France. What do I find so unappealing about France? The French. And mac, work on your grammar. You're not truly an American, are you?
I'll put my English degree against your degree anytime. I'll take your grammar comments with a grain of salt since your comments are inaccurate and non-specific. I asked you what you did not like about France and your answer is "the French" as if this was an answer. So you
@4KnowWon "Harvard grad, USMC veteran." Sentence construction, no verb.(F)
"You discuss France, I've been there, would you like to turn the U.S. into another France?" Independent classes joined by commas (F)
(Work on your grammar, mac - sorry, I can't help it, I graduated Oxford, too.) Incorrect use of a dash. More Independent classes joined by commas? (F) Guess Oxford doesn't have semicolons, do they?
I'd love to buy you for what you know and sell you for what you think you know.
Everytime Schiff goes to the bathroom to take a dump, he comes up with these hair brained ideas. No income taxes? Fire all accountants? Schiff, do us all a favour and stop going to the bathroom....we all know you are full of shit anyway. Nothing is free, Schiff, taxes need to be collected to pay for fireman, street cleaners, police, and welfare rolls for the now unemployed accountants.
@Rata4You Wow you are obviously a mental midget...."fireman (singular?), street cleaners, police" have absolutley NOTHING to do with the federal income tax (i.e. the 16th Amendment, which Schiff is addressing here) considering that they are all funded by State legislatures, NOT Congress, so that spew of crap was entirely irrelevant.
Mental midget. Yeah, good one. You ought to invest in Schiffs economic theories....check out what his angry investors are saying about his "no exit strategy" commitals.
All funded by state legislatures, really? Ask the people of California how thats going. Hmmm....only 9 States arent asking for bailouts. EVERYBODY is sinking. So, again, Peter is short-sighted and without a financial exit strategy...yet again.
@Rata4You What the fuck do Schiff's "angry investors" have to do with his views on the income tax? That's not at all what we're discussing here...and besides the only reason that these States are in debt and "sinking" is because they increase outlays in the "good times" due to artificial inflationary booms and moral hazard brought on by federal government spending which initiates from the looting of the citizenry via the income tax. So again, nothing you're saying is making sense.
@trinomialtree Ha what a stupid refutation to everything I just said...actually that wasn't even a refutation...it was just a retarded amalgamation of words.
@Rata4You Furthermore, even if we were to eliminate the federal income tax, our federal budget would be exactly the same as it was in year 2000, (we had firefighters then too, in case you can't remember things), so even if your off-topic, idiotic, and insulting income tax argument was true, we could still fund all of the vital services we need. Knowledge fail on your part...
What if consumption goes off-shore, or to illegal activities, because the cheaper goods and the bigger money can be made that way instead of keeping it in America?
ThusIsBrad 1 week ago
Amendments are inherently unconstitutional, you say?
ThusIsBrad 1 week ago
extending my earlier argument further: one can resort completely to that alternative currency (coupons) and trade exclusively with them instead of government backed currency. in that case, there would be no income (only coupon income which has no value in the real world but only acknowledged by the participants of the cooperative) and hence no income tax!! and even if the govt comes and takes away 35% of these coupons, we can simply print and give back to the people what was taken away!
ronymahatma 2 months ago
excellent! but i have one BIG doubt: people can resort to BARTER to avoid a consumption tax. for eg. the milkman selling a litre of milk to the baker in return for a kilo of bread, thus avoiding any cash flow or sales tax... of course, this idea can be extended by people forming cooperatives and cartels to make sure no movement of cash is involved or issuing and accepting coupons which can be redeemed later (something like an alternate currency)... is my argument flawed? please let me know :)
ronymahatma 2 months ago
This shows that Cain's 9-9-9 plan is WORSE!!!
grifteamgost 3 months ago
This has been flagged as spam show
What if there was already right now a big percentage of fairly healthy people that, whatever they'd die, no matter how hard they tried, no matter how much they studied or improved themselves - they could not make enough to live, eat, house. clothe and receive medical care. Would this be the fault of these people, or might the world we live simply no longer need the labor of these people? There simply is no demand for anything these people might do? What if this percentage of people was GROWING?
KhanneaSuntzu 3 months ago
Very well put!
mayyay1232 4 months ago
Some of the ideas of a consumption tax are fine. He really doesn't use good arguments for his positions though. I'm not saying that some of his ideas aren't good, just poorly constructed. Most of the arguments are emotional or circular. One example is when he talks about all of the accountants and accounting business dedicated to the income tax. He states that it is a waste of resources, but he never says why. Those are all jobs, some of them pretty high paying. They're all taxed as well.
moxenrider 5 months ago
@moxenrider You need to have a knowledge of economics to understand that argument. He is basically saying that if those accountants weren't wasting their time dealing with tax codes, they would be able to work in other fields of the economy that actually create wealth.
obtree 4 months ago
GREAT INFORMATION. EVERYONE PAYING TAXES SHOULD WATCH THIS.
anthonykrmzyan 6 months ago
I love this guy and I live in Canada!
dream431ca 6 months ago
Consumption Tax would also hit people like drug dealers, prostitutes, and everyone else who makes income and don't pay taxes on it now.
pdawg691 7 months ago
Where do you think tax money goes, Pete? Okay, a lot may be wasted or even misappropriated, but that's another issue. A lot of taxes go toward funding public services and facilities. Where does investment money go? Mostly to the high end of town, and often overseas. And the whole charity argument was just a red herring.
I'd rather tax the high earners and use the money to provide services and facilities to everyone, to build a fair and just society that supports those that need it most.
imroy264 8 months ago
@imroy264 except you failed to realize bill gates and warren buffett has an army of accountants help them escape taxes, they want high taxes in place so small businesses cant compete with big corporations because they dont have the lobbyist
trueconservatie33 7 months ago
@imroy264 That's like communism. 'fair and just' encourages those that are 'under producers' to enjoy the benefits of those that do produce. National Socialism only worked so well in say Germany because the culture was unified. today's forced multiculturalism would not allow socialism a chance: too many unproductive with bias against the productive. either force the unproductive to become productive or end multiculturalism. I don't believe both together can be accomplished.
rezek71 7 months ago
oh please drop the income tax, but my god you want to have a flat tax. How come you see people talking about taxing food? I have tried to find articles saying that food will still be not be tax but still not luck. So if you want everything you buy "fair taxed" (at roughly 21% being said) like food, cloths, and well everything grab your ankles and enjoy it. Oh and look at your weekly grocery store recipes and see how much in taxes you spent and compare it to taking the total times 23% and see.
Pallienak 9 months ago
Would this tax hit poor harder who spend more of their income on basic necessities?
peapodsss 9 months ago
@peapodsss
many basic necessities would be exempted, such as food etc.
tonybonez 9 months ago
@peapodsss You wouldn't even need to place the consumption tax on food or clothing. The way the rich spend on luxury items would be enough to fund government programs.
xxdiogenescynicxx 6 months ago
@peapodsss Of course it would but that is not the concern of those who support such a proposal. The interest is not a productive and stable society but one where individuals are allowed to maintain control of every penny they obtain. If that means people who are less adept at obtaining said pennies go homeless, forgo lifesaving operations, or cannot afford to pay to educate their children then it "sucks to be them".
siloria 4 months ago
@peapodsss Nope. Because the income tax is already built in to the price of all goods, with a consumption tax just added on top. So it would be no worse for the poor then it is now. And if you made necessities such as food tax excempt, then they would be much cheaper to the poor then they are now. Furthermore, the only reason anyone should hate the rich, is if they think they consume more then they produce for society. If they produce more then consume, then this benefits everyone.
daobagua 4 months ago
Now I know who you speak for. The dead wealthy aristocratic slave owners of the 18th century who created a constitution to put down revolts from the bitter inequality of such an unregulated system.
Lets think of what I'd do if I made 1 million dollars tax free. I'd invest it in china. Or I'd buy stock on the stock exchange that invests in china. Who's economy you want to be growing?
thefredsays 10 months ago
@thefredsays When western wages come down companies will begin investing in America again.
rezek71 7 months ago
@rezek71 that depends completely on politics and if there is any profound change in society. If we continue to allow free trade w/ corporate interests garnishing the major share of benefits from it while allowing/ forcing developing countries to invest in financial instruments and paper promises to keep their currency undervalued it is a bad assumption that a corporation will invest in a country that is democratic, unpredictable, or has no consumers to buy goods.
thefredsays 7 months ago
But wouldn't a consumption tax just promote a type of tax evasion in the form of rich people travelling, as you said they would, spending their money abroad and paying no tax whatsoever.
bomaoneuk 10 months ago
Once we get the FairTax, we'll wonder why it took us so long. It'll eliminate the $300? billion wasted on compliance. Poor people won't pay any taxes because of the Prebate. Criminals and illegals will finally contribute to the tax collection. Prices will likely stay the same, but you'll be able to buy a lot more with your pay check. Do the research. Watch the "Its Time"? FairTax video.
urgener 1 year ago
I like Peter Schiff 'cause he's a goofball.
erwinthehamsandwich 1 year ago
The income tax is bullshit. All the money that was taken by the income tax could've been invested wisely with aspiring entrepreneurs OR at the very least be used for soup kitchens, instead it being wasted on senseless wars
1XMarksSpot 1 year ago
Like this video? Go to fairtax.org
xTRAPJAWx 1 year ago
I agree with Schiff, philosophically, but here is what WILL actually happen if we go to national sales/consumption tax: when it is passed, we will be told that income taxes are to be "phased out". But, they never will be, and we will end up paying both. Then, a cap will be put on the sales tax, and the rich will not be paying it on all of their consumption. I expect it will end up, after all the BS, that people will only pay on the first $100K consumed, and once again, the middle class will pay.
nezpercenathan 1 year ago
If we tax the megarich they can no longer spend 200 million dollars on a whim like Carly Fiorina. How many permanent jobs did that create? ZERO!!
justinholt2000 1 year ago
Where is "Honk Kong"?
RetSquid 1 year ago
I support the FairTax. Prices won't rise, because taxes are only paid by consumers, and the FairTax replaces tax, not add to tax. The net change will be zero, so prices will remain constant. The poor will be totally untaxed, by the prebate, and 350 billion $ will be eliminated in overhead expenses. OH! And criminals and illegals will finally be paying taxes. Your purchasing power ill rise, under the FairTax.
urgener 1 year ago
Haven't his father told him that the states didn't ratified this incomes tax stuff ?
johnsenkenn 1 year ago
come to australia, we have a huge income tax and a 10% consumption tax on just about everything. i wonder ehat the government do with it
billychen13 1 year ago
Wasn't this Huckabee's idea first?
upinflamezzz 1 year ago
This is nonsense. You want to punish those who invest (spend) in new production capability and reward those who lend (save).
Consequence? In the end only those who have absolutely no choice will take a loan, and when they do, it will be to spend on a short term day-to-day basis. Noone will invest in long term production capability or research.
So no progess for the economy in terms of the amount or the quality of goods produced. Just an economy which will keep contracting until collapse.
monkeychess 1 year ago
@monkeychess How does taxing spending and rewarding saving lead to less people taking loans? Your conclusion does not follow your points. You reward investment so that new businesses can grow, which leads to more quality goods being produced. Is it that hard to understand?
dankfizzy 10 months ago
If we got RID of the:
1) Federal Reserve racket
2) Socialism (all of it!)
3) Worthless Federal agencies
4) Fascist plundering of the American people ("bailouts")
5) Unconstitutional wars
....then the government wouldn't need to tax income OR consumption! Excise taxes would provide all the funds needed to run a legitimate, constitutionally limited government.
BRYAN351 1 year ago 20
@BRYAN351 We don't need to get rid social programs. I say cut the military industrial complex and foreign aid. You need to still have taxes for roads, police and fire fighters etc. We could do all of this with the consumption tax instead of an income tax.
xxdiogenescynicxx 6 months ago
@xxdiogenescynicxx yes, we do need to get rid of socialist entitlement programs, because they are incompatible with a free society. Roads should be entirely funded by gasoline taxes. The more you drive, the more you wear the roads, the more you pay to maintain them. That's as fair as a tax can get. You can choose to not drive, so it's not forced upon anyone, either.
But, taxing income (property) is incompatible with freedom. Taxing all consumption isn't much better, and also unnecessary.
BRYAN351 6 months ago
@BRYAN351 Who said anything about taxing property? And yes gasoline taxes is a wonderful idea to help maintain the roads. If we had a consumption tax we would still be able to keep some of our social programs.
xxdiogenescynicxx 6 months ago
@xxdiogenescynicxx your money is your property. There's really no such thing as "income." People trade their labor services for a sum of money. It's an even exchange. Then, the money becomes their property. So, to tax one's "income" is to tax one's property.
BRYAN351 5 months ago
1. Tax me on what I spend not on what I earn. With a federal sales tax, everyone is paying taxes including organized crime.
2. Shrink government to lessen the demand on taxes. Start making cuts to foreign aid, arts funding, and especially the war
pdynamics1 1 year ago
peter You live in a liberal state with liberal ideals, If you want to seriously help america and bring your ideas into law and get into gov. You have to leave the N east. go to texas or AZ were your ideas are accepted. Middle america is were you will get elected not the peoples socialist republic of conneticut. just food for thought. Thank you for your efforts and concern, just understand the majority of your ideas are middle america not yuppie america!
johnywinslow 1 year ago
@johnywinslow I like how you say "people's republic", proving you have no clue what liberalism is.
madpaintbalerx 1 year ago
9:11 i agree ... BUT the rich got rich already -the poor are getting richer with slight of hand ideas...................what we need is more transparent paper pushers........that and bush in jail -then we can soundly gain confidence- and get rid of cheep products
sk8ingonfire 1 year ago
our quality of life can be much better if we realize what we're being taken advantage of by the gov't.
LeeRyan2930 1 year ago
It's a friggin pizzeria!
herzogsbuick 1 year ago
re stand corrected, Hong Kong also does not provide for its national defense, have a space program, contribute to the IMF or the UN, does not supply foreign aid to anyone and has never been nor is now a sovereign nation.
getnick77 1 year ago
A sales tax in place of the current income tax will be another huge systemic disadvantage to the poor. The rich and the retired will lobby for and receive tax deductions and exemptions for the kinds of consumption the rich and the retired prefer. This has been coming since the baby boom, and will be implemented as they begin to retire. It will complement higher inflation and it will be a gold mine for the federal government. So.. don't be poor.
WGS669 1 year ago
Hey Schiff, Sweden here ;)
I like your opinion and it reminds me of a discussion I had with a fellow accountant a few years back where he just as you proposed a sole consumption tax. I pointed out that people will be able to buy things outside of the country and not pay tax. Here in Sweden we've got very high taxes but that's not the main issue, as an example I take the booze tax, people drive from Sweden to Germany (~800km) just to buy booze there to avoid the tax. How would you avoid it?
nahiag 1 year ago
I always favored the sales tax instead of the income tax for the reasons Peter stated
jumpers3 1 year ago
Mr Schiff avoids the true issue here, sadly, and as long as that is done then the country WILL go bankrupt, there is mechanically no other outcome possible. Until people know why and understand that then you are all f*cked. Same for Europeans (Article 104 of the Maastricht rip-off Treaty, and Law 73-7 for France).
The problem is the artificially created exponential date that can never be refunded, ie the US Federal Reserve System,designed to impoverish & enslave the people until they've nothing.
ymsmusic 1 year ago
Part2
Because the fractional banking system we are all in since the gold standard was abolished in favor of valueless paper money will allow those banks to increase the cashflow without the creation of riches therefore causing inflation. We're talking about a massive rate of creation here, at least 10-1, so for 800k$ in the bank that bank can create millions from thin air that it will then lend to enrich itself from inflation.
I don't think Schiff's idea can work at all.He avoids the true issue.
ymsmusic 1 year ago
Part 1
Some good ideas & some bad ones...
Mr Schiff assumes that the rich guy used as an example will invest his unused 800K$ a year in a smart productive way... How exactly? Will he not invest it in shares? Don't shareholders simply push for more profitability, short term profitability, regardless of any human/ethical aspects?
And if the rich guy puts it in the bank, all he is doing is creating more wealth for the richest (the banks), therefore impoverishing the poor further.
ymsmusic 1 year ago
The GDP stands at $11.3trillion (excl. spending), and we have 3/4(approx. $8.5trillion) of the economy based on consumption. With a consumption-tax of 10 % would generate about $850 billion, what is somewhere between $250 and $300 billion less revenue compared to the income tax. It's not a big difference, but a smarter way to collect money in a harmonized fashion. Besides, 10 % is way below average if you compare it to Canada, and European countries which have a rate of 15-20 and 25 %.
ExhibitMan 1 year ago
The basic problem with tax is unintended consequence. With consumption tax, if too high, a black market flourishes
With income tax, the government controls the "black market" through subsidising pet industries, such as the real estate/bank lobby here in Australia.
greatwassim 1 year ago
Pizza in New Haven? Wow, way to avoid a fight. lol!
Omnis2 1 year ago
I was arguing this in a Yahoo chat room the other day. You want to give incentive to save money, and invest money. Taxing savings, and investments is ridiculous. Saving your money is an act of discipline, thus why I favor a consumption based tax more than any other taxes. Saving money for the future is an act of responsibility as well, since you have the foresight for the future of some kind.
SamuelMoralesJr 1 year ago
Mr. Schiff, I hope you realize that your argument regarding charitable donations is completely failed because donations are exempt from income tax. What makes your reasoning even worse is that many taxpayers donate or increase their donation amount in order to reduce their overall income tax payment...
tonybravada 1 year ago
@tonybravada Nonsense, if people did not have to pay income tax at all, their charitable donations could be larger in size.
romanmir01 1 year ago
What if the rich hoard the money and never spend it.
GohanMH1 1 year ago
@GohanMH1
When does that ever happen?
leemil4 1 year ago
@GohanMH1 That's the best thing they could do. Saved money provides capital for entrepreneurs which creates jobs.
SDS4BO 1 year ago
@GohanMH1 That is the dumbest thing that only uneducated can believe. What is the point of 'hoarding' cash and not using it to grow it or to spend it on something?
HOWEVER Even if someone did that: hoarded the cash and never spent it, what would be the total effect on economy? Money sitting in a bank and not even working on a stock market or making more income some other way just gets eaten by inflation. That's the dumbest thing.
romanmir01 1 year ago
@romanmir01
I do not know what the point is. I am curious about consequences of such action.
GohanMH1 1 year ago
@GohanMH1 Money, that does not grow, diminish in value due to inflation.
If you have 100 dollars in a bank, just sitting there, due to even slight 3% inflation, 10 years after you put the money into the bank, your purchasing power falls by a factor of 2. This means that you can now buy half the things with the same amount of money now than if you spent it 10 years ago.
It's not productive to hoard cash and never re-invest it and it's not fun to hoard cash and never spend it.
romanmir01 1 year ago
@romanmir01
I was thinking what the impact on the economy would be. By hoarding I meant saving or investing (stocks, bonds) instead consumption. If people were to save and invest but not consume much in a long term, would that not result in an excess capacity buildup...? I guess the subsequent layoffs would make people reach into their savings and the economy would than stabilize?
GohanMH1 1 year ago
@GohanMH1 Wherever people find new efficiencies (for example we create new electrical devices that use less energy or we build cars that use less gas), the people fill in this new niche with new demand. So in case of devices that need less energy it does not mean that we use less energy. It means that we start using excess energy in a new different way.
Same with money. If there is more money in investments, it means more can be spent on creating new innovative things, this moves progress.
romanmir01 1 year ago
OMG! I have never heard it put any better than that. Everybody should hear this. I have never heard so much common sense uttered in such a short time. Bravo!!!
orionstarman 1 year ago
wait wait wait ....... "it's how the founding fathers envisioned that the federal government would raise money" what evidence is their of this
mattgeb84 1 year ago
@mattgeb84 I'm not sure about all the founding fathers, but I'm aware of a view expressed by Alexander Hamilton. From his Federalist Paper 21, It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess.
cosmik21 1 year ago
@mattgeb84 Hamilton's Federalist Paper 21 continued: He continued by saying that the system has a built-in limit since if government taxed in excess, consumption would lessen which would lessen the tax revenue raised and that, the product to the treasury is not so great as when they are confined within proper and moderate bounds.
cosmik21 1 year ago
@mattgeb84 The evidence is that that is exactly how we DID run the country for the first 150 years. Tariffs were the means by which the federal government operated until 1913.
SDS4BO 1 year ago
@SDS4BO
tariff taxes are not the same thing as a flat out sales tax, only imported goods are taxed, since much of what we consumed back then was manufactured in this country the government would not have received much income from tariffs, the federal government back then also issued lottery tickets to raise revenue similar to how many states do it today
mattgeb84 1 year ago
@mattgeb84 No, they are not the same thing, but the point is, that's how it was done. Close enough for government work. It wasn't until 1913 that the government , get this, had to pass a CONSTITUTIONAL AMENDMENT to impose an income tax. Repeal it. Get the government back on a constitutional footing.
SDS4BO 1 year ago
he wants you to have more savings so you can invest with his brokerage firm
kevinrrr 1 year ago
Amen! Amen! and Amen! The system is irrational, unfair and unsustainable. I paid almost $4000 in extra taxes. I refuse to go with the housing scheme. For the next year I'm considering to do something radical. Either to buy real estate and join the party of spend till doom. Or donate $17000 to get even. If you are older and have any pension plan consider to retire. Why to work for 100k and get 50K when you can retire with 30K and don't work at all.
kotouc 1 year ago
Here's an idea for a consumtion tax that makes it fair for different income levels. The govt knows how much everyone earns each year based on their SS#, right? We could have a national sales tax and charge low income individuals less tax by running their SS# at the cash register. We'd gradually charge more tax to higher income people. If anyone found it too invasive they could choose to pay the full tax. It would be voluntary to anyone who wanted to save some money at the register.
brothermikefan 1 year ago
@brothermikefan
Giving businesses that kind of unbridled access to a crucial piece of identity information would be outrageous. Peter's right: food and other living essentials wouldn't be taxed under a consumption tax, and those are things which people in lower income brackets mostly spend their money on (at least, more of their income than folks in higher income brackets). So the consumption tax would essentially do what you just described through the nature of the taxation.
leemil4 1 year ago
@leemil4 Privacy protection is a good point to bring up but we already surrender our credit card numbers to businesses every time we use them. But perhaps the businesses wouldn't have to have access to our social security numbers though. Eventually the cards could be equipped with magnetic stripes and the numbers could be encrypted within the stripe. Plus, like I said, the system would be voluntary. Most people would just be paying the full tax. And I think food should still be tax exempt.
brothermikefan 1 year ago
If less people consume, how will an increase in investments become profitable? In other words, how can capital grow if people are not willing to consume such capitable? Increased savings may increase investments, but it also stifles consumption, something which investments depend on in order to be profitable and worthwhile.
whyohwhy815 1 year ago
@whyohwhy815 wow.... i said 'capitable'
whyohwhy815 1 year ago
@whyohwhy815 I was kinda thinking that too. Maybe a slowdown in economic expansion is a fair tradeoff for a moral tax system though.
brothermikefan 1 year ago
The free market creates wealth and prosperity, all the goodies and services we enjoy each day, socialism, communism and marxism on the other hand destroys it. Freedom and liberity is a beatfiul thing. Without it we're left with a centralized gov't, ruling our lives and destroying the economy. It is fair for the "rich" to be taxed the same as the poor. Freedom is better than tyranny. Natrual Law states that you control your own body and what it creates. So let the CEO's have there milions.
dellwon 1 year ago
Great video!
dellwon 1 year ago
Peter, I agree with you 99%, this is the 1%. The key thing is reducing the extortion/theft that is taxation by gradually eliminating compulsion and limiting government spending. If people approve of a government program they will pay for it voluntarily or on a user pays basis. Shifting to a so called consumption tax is just more robbing Peter to pay Paul more efficiently. Besides it's a tax on productive business by another name - a business tax. Why not a simplified flat tax in the transition?
sallydeb 1 year ago
If you don't like the system, then don't be productive nor responsible for yourselves. Just shut down and collect every kind of government handout you can get. You have to go with the behaviour that gets the rewards and right now, that behaviour is NOT to BE PRODUCTIVE or HARDWORKING.
jpmorgan62 1 year ago
go Hong Kong!
dengzhi 1 year ago
thumbs up
yougiberishtube 1 year ago
To restore the original tax system the federal government would have to put a flat tax on the states. I like the idea of nothing but a sales tax on a state level.
KenMacMillan 1 year ago
schiff's consumption tax would lead to the rich getting richer and richer and richer and the poor as usual staying the same or lower. No one should have more than 20k a year leftover after paying taxes should all be going to society, welfare, schools, roads, programs etc.
tonybeir 1 year ago
@tonybeir That worked so well in Russia. If you pay people the same for succeeding as for failing, people fail, because it so much harder to succeed. People work their ass off trying to make something of themselves and then here comes the government riding in to steal the result of their labor. That might cause a little bit of disillusionment don't you think?
People are not altruists. People do not work because they want to benefit others, people work because it earns them money.
fluff125 1 year ago
@fluff125 basically people are selfish assholes is what you saying. We need to pass anti selfish laws then. Teach children from babies to be selfless to think of others and make everyone conform to the idea that success = helping others. not helping yourself. Punish selfish behavior very hard too. like all the greed bankers and thief inside corporations should be in prison for life.
tonybeir 1 year ago
What I'm saying, Tony, is that someone isn't going to spend 25 years of their life in school, if they get the same pay as the janitor down the street. Someone doesn't work 60 hour weeks because they want to help society. They do it because they expect a personal reward. After all, they earned it.
The beauty about capitalism is that there is no central authority telling people what to do. The only thing necessary for capitalism to work is FREEDOM.
fluff125 1 year ago
@fluff125 right freedom. except that who decides which school you go to for 25 years? Can you choose where you're born? who decides what business you start at what time? and what makes it successful?
The hardest workers in this country are poor people and middle class people. Capitalism does not reward how hard you work it rewards luck.
If you're born into a rich family you're likely to be rich and if you're born into a poor family you're likely to be poor. just facts you can't dispute facts.
tonybeir 1 year ago
@tonybeir What the hell are you talking about? If you succeed in school and get good grades you can go to any university in the country. Even the child of a poor immigrant day laborer can grow up to be a multimillionaire entrepreneur. All it takes is hard work.
There are thousands of stories of rich kids who grow up spoiled and end up blowing their entire fortunes on wine, women and gambling. In America, anyone can succeed, anyone can fail. This is a country where you make your own destiny.
fluff125 1 year ago
@tonybeir
total bs. the hardest working people are professionals in the finance industry - everyone puts in 90+ hour weeks before they can make it to the top.
the caboose are the 200m+ consumerist main street workers who relative to their compensation, are negative value compared to workers in other countries such as china, but still expect to live like kings.
trinomialtree 1 year ago
@trinomialtree bahahahahahahahhaahh BAHAHAHAHA "the hardest working people are professionals in the finance industry"
You must be on drugs son. the entire finance and banking industry is a heinous crime by the rich on the poor. the whole industry should be banned an a non-profit institution set up for their services. yea maybe the peons at the bottom of the finance industry work 90+ hours a week but the ceos and executives don't. EVEN IF THEY DID it does not justify millions dollars salary
tonybeir 1 year ago
@tonybeir
i'm not on drugs, i'm high on money. in the form of x'mas bonuses. and champagne, for celebration.
and just plain joy while watching idiots like you suffer.
trinomialtree 1 year ago
@trinomialtree well I don't have to live with you. YOU have to live with yourself. good luck
tonybeir 1 year ago
@trinomialtree you are the clinical definition of a sociopath if you enjoy people suffering. do you know that? do you like that?
boombing1 1 year ago
@trinomialtree Man you are something else! But no worries, because when Economic crisis gets worse you're going to be one effected the most.See the middle class and Poor has pretty much lost everything,with the exceptions of the few!Who else is left? It's going to be People like yourself via Pensions, job loss and so forth.Good Luck in the future! You're going to need it!
MrJLusty 1 year ago
@MrJLusty
err, sorry to pop your bubble lusty but i don't live in the US. neither do i need to worry about pensions. i gather that you are not very well versed in finance or else you would be able to infer from my handle that i work for an investment bank in quantitative trading.
its just that personally i'm a bit of a sadist and i like seeing poor people being squeezed between the twin towers we have developed - public sector monetary inflation coupled with private sector deflationary spiral.
trinomialtree 1 year ago
@trinomialtree So I've come into this discussion at the end apparently. What is your stance again? Please explain to me what you suggest is your ideal government taxation method. I'd just like to know where you're coming from.
crispymidget 1 year ago
@crispymidget
the ideal solution is to take unproductive americans (around 150m people) and re-introduce manufacturing slavery. in conjunction with this, lower taxes for corporates and banks to <10% and steer them to re-establish manufacturing bases in america to soak up the slave labor. then you will have a manufacturing environment that is competitive with china, but with a technology edge.
trinomialtree 1 year ago
@crispymidget
everyone makes money and fat lazy americans get to slim down for free.
now in case that is not possible, you can always corral these unproductive americans, stick them in california and run a giant particle beam across the faultline, and say they are seceding from the US.
the more conventional way is to inflate away the debt like the US is doing now, then press the reset button and then with no legacy debt issues, the government can then relax taxes and promote re-investment.
trinomialtree 1 year ago
@tonybeir
capitalism doesn't reward hard work or luck it assigns and rewards value
888captainplanet 1 year ago
@888captainplanet assigns and rewards value? what the fuck are you talking about. I think what you're trying to say is that capitalism is a system in which things are as valuable as people are willing to pay for it? regardless of your stupidity that if that was just what capitalism is it's ridiculous.
tonybeir 1 year ago
@tonybeir No. If I build a car, and that car that I built is worth 10,000 dollars, I can be paid 10,000 dollars. I have created value and I can exchange it in the marketplace for an equivalent value.
People create wealth for themselves, and then convert that wealth from the form it was previously in, such as cars, into a form that is more useful to them, such as bananas, apples, beef. Whatever.
So yes, the free market assigns value. Your value is the amount of wealth you are able to create
fluff125 1 year ago
This has been flagged as spam show
@tonybeir
" I think what you're trying to say is that capitalism is a system in which things are as valuable as people are willing to pay for it"
or in other words capitalism assigns value.
and those who produce the object which is deemed valuable are rewarded through monetary gain. or capitalism rewards value
"if that was just what capitalism is it's ridiculous."
there exist no other economic systems which assigns value as efficiently.
888captainplanet 1 year ago
@fluff125 have you heard the expression "You have to spend money to make money?" It's like that in the US.
brothermikefan 1 year ago
@brothermikefan When you live here you enjoy the benefits that the govt provides such as security, education, roads, etc. These things help people succeed although they don't always think of it that way. So as a person succeeds monitarily they should give back to the community that supports them along the way. It's like paying rent. We tax based on one's ability to pay. This leaves everyone with the same relative buying power.
brothermikefan 1 year ago
@brothermikefan Rich people have more buying power and they deserve it, because they earned it. They did the hard thing and created wealth, and they are rewarded by the ability to buy things.
Now when you talk about "the benefits the government provides" you miss something important. Most of these are, or should be LOCAL functions. Not federal. Each city or state can decide for itself how it wants to tax. The federal government has nothing to do with it.
fluff125 1 year ago
@brothermikefan Also, EVERYTHING the government provides is done so inefficiently. For example the Post Office is the most lumbering inefficient dinosaur on the face of the Earth. Without massive taxpayer subsidies it would go out of business.
Our educational system, which used to be locally controlled, is now widely controlled by the Feds. Because of this our schools are now some of the worst in the world. A boring, expensive, hell that scars the mind of thousands of children.
fluff125 1 year ago
@fluff125 I said "relative" buying power meaning a rich person could have a hundred dollars taken away from them and still be okay while a poor person could have ten dollars taken away and still be okay. I know where you're coming from with the local government argument but it's basically a moot point because I was talking about "government" and "taxes" in a general sense; not about whether things should be done locally or if they're being done well. I agree with some of your points though.
brothermikefan 1 year ago
@fluff125 Oh it's even better... the Post Office is being known more and more as the Junk Mail Office.
godgunsncountry 1 year ago
I believe that even when having consuption tax, you will need to use services of accountants too, as well as you will have to file tax forms. Why? Who is going to pay the tax? The one who sells, taking it from the money he/she got from a customer, right? So any business person will still have forms to file as well as accountants to employ. So what is the real difference?
vraiser79 1 year ago
Very much agree. I would suggest one alternative however. I think even better than a Consumption Tax (or at least a high one) is a Usury Tax. Our entire monetary system is based on debt. As small ~1% tax on all debts would cover a large portion of the revenue the federal government requires.
transfire 1 year ago
Peter, I can not wait till the day that I can hear you on the floor of the Senate educating all those mislead individuals.
pakman0033 1 year ago
Wow.. Amazing video!
richarddbeck 1 year ago
Another great video, Peter! I will use this one to explain consumption tax to my "progressive" friends; really good! Thanks, Peter!
Eclecticity85 1 year ago
The idea of a consumption tax (fair tax) seems like a good plan. But I am a future college student, so I must ask: would my parents spending of my college tuition be included in the consumption tax?
jamarcus232 1 year ago
@jamarcus232 Id like to point out they already are paying taxes on the money that will be used for your schooling
They had to make a dollar for every 50 cents spent on the college with the system we have right now!
I highly doubt any national sales tax would be 50% of the cost of the goods and services
phantomcharger 1 year ago
Let's say we adopt the FairTax system, and get rid of all other taxes. The new sales tax would have to be around 50% for the government to have as much income as it does today. (It's government spending as % of GDP) We need to SHRINK the government first!
Also, the FairTax proposal DOES NOT exempt food and basic necessities. It uses some sort of tax welfare rebate system. The government NEEDS a welfare system - otherwise it won't have any pro-big-government voters.
BrassCarShed 1 year ago
The Fair Tax is not fair and the Flat Tax is not flat. Abolish the IRS, the income tax and replace it with nothing. A coercive direct tax on the fruits of my labor is theft and therefore immoral. What happen to "Thou shalt not steal"... its been turned into "Don't steal the government hates competition".
iFreedom4ever 1 year ago
Holy cow; you just won me over from the flat tax.
CountArtha 1 year ago
Peter love your ideas, but I mean they will never be implemented!
TheFishegg 1 year ago
Correct me if I'm wrong, but constitutionally, income tax is unconstitutional, while consumption tax is constitutional, correct?
RocknCorruptrepublic 1 year ago
Schiff has proven himself to not be a libertarian. Taxes are theft. WE don't need them. The government and it's gang love taxes. I agree with Ron Paul. Get rid of the income tax and replace it with NOTHING. Let's be consistent here.
escapethecollapse 1 year ago
@escapethecollapse Replace it with nothing? How do you fund the military? How do you pay to warehouse our nuclear arsenal? This is, after all what the federal government was created for, national defense.
fluff125 1 year ago
@fluff125 what happened before 1913? We are propagandized into believing that we need part of our incomes stolen from us at gunpoint. We don't need a military if the government doesn't mess around with other countries (back to my pre-1913 point). If you are for taxes you are for theft. If you want to voluntarily donate to support the nukes, fine with me. But this is not a voluntary system. If I don't pay, I get shot. Are you willing to pull the trigger to enforce your rules?
escapethecollapse 1 year ago
I can assure you that before 1913 we had taxes and we had a military.Sure we didn't have an income tax, and we don't need one. But, as Peter said, the only reason the federal government got the power to tax was in case of a war.
The idea of a donation model for government is very interesting. I'll have to think about that one, On the surface it doesn't seem like it would work, but who knows. I think the problem I have with it is that people who don't donate still receive protection
fluff125 1 year ago
@fluff125 cool. well keep in mind that taxation is simply theft, so if we want to truly live in a free world where individual rights are truly respected, we can't have taxes. Peace.
escapethecollapse 1 year ago
@escapethecollapse
let's be pragmatic here.
advocating for the abolition of taxes is a sure fire way to be classified as a loon fringe group and be ignored.
one step at a time, and a consumption tax would be good first step.
888captainplanet 1 year ago
@888captainplanet new ideas and change never come form the center they always come from the Fringe...I'm ok with that and so would Captain Planet HAHA FTW
rez3 1 year ago
Peter: I think I listened to this whole thing while I was doing other things. But everything you said seemed geared toward individuals. What about taxing corporations? Is it your position they should be taxed on their consumption of raw materials? Or just not taxed at all. And it's all fine and good that you say you're not looking to replace the entire revenue from our current system, but then HOW ARE YOU GOING TO PAY FOR THE WAR IN IRAQ ALL YOUR TEA BAGGING BUDDIES had no problem with???
stevejust 1 year ago
@stevejust
Schiff doesn't want to fund the war in iraq.
dleksen 1 year ago
Another superb video. Thanks again, Peter.
alphabeets 1 year ago
I really hate to say this but the income tax wil be with us forever. Too many people have thier rice bowls tyed up in the income tax (Tax Lawers, accoutants ects) The Libs will never allow the income tax to be abolished. The Libs idealy would love of keep the present tax system and put a VAT on top of what we have. Mr. Schiff talks sense which is the reasion it will never become public policy.
LAMOE2012 1 year ago
At least with a consumption tax you can decide not to consume if you don't want to pay it. I like that better than what we have now.
tesla921 1 year ago
Good post. I think you miss an important point. By switching to consumtion taxation you also tax the black economy. Drugdealers will have to pay out just as the honest worker will.
shivan2418 1 year ago
@shivan2418 How's that? Do drug dealers in your area keep records, have accountants, and have a storefront and do all their business above the table? I agree with everything Peter is saying here but I have never gotten the connection that drug dealers will somehow pay tax with a consumption tax. Please explain.
alphabeets 1 year ago
@alphabeets
If a drug dealer makes some drugs in his basement and sells it - then he makes a profit. This is not taxed at all. If you have consumption taxation then the drugdealer will pay consumption tax on his food, his stuff from Target, Wallmart etc...
the only things he can buy out of nothing is more drugs and other illegal things.
shivan2418 1 year ago
@shivan2418 Got it. Thanks for the clarification. It does make perfect sense.
alphabeets 1 year ago
@alphabeets
but acutally... Couldnt the drugdealer buy bonds and stocks for that money?
But is it even a problem?
shivan2418 1 year ago
Peter, that's way too logical to ever happen here. :P
MillerOutdoors1 1 year ago
would the majority of rich people spend their money over seas if you have consumption tax?
LordMigit 1 year ago
NO IRS for a National Sales tax huh? Idiot! How many businesses cheat on their sales tax remissions? All of them. How many auditors? The IRS would grow not shrink. But this rant wasn't aimed at people who THINK about these problems but at people who walk around with a hammer trying to make every problem a nail. People like xpostal1289x.
The US citizen pays the among the lowest taxes in the industrialized world. Taxes are NOT a problem in the US. Trying to solve a problem that does not exist?
Oraclereason 1 year ago
@Oraclereason The US capital gains taxes are among the highest in the industrialized world. And you've missed the point about IRS cheating entirely. A consumption tax would obviate the IRS filing requirement. Take your hammer and smack yourself a few times in the head, maybe it'll wake you up.
4KnowWon 1 year ago
@4KnowWon Wow, I really like that. We exclude capital gains from income and tax it at a lower rate than income unlike Germany, France et al. who tax it as income at a much higher rate but they don't have capital gains tax per se.
So we take a perk for the rich and spin it into something that is a burden. Nice!
macrhino 1 year ago
@4KnowWon BTW slick, I am not the one with the hammer. I don't need awakened, I have lived in 8 other countries. We have the among lowest tax burden of the industrialized democracies. Shall we discuss France?
Increasingly we have let this kool-aid mentality (like you opining on something on which you have no personal knowledge) take us from the most capable country in the world to one who begs for money from China and for scientists and engineers from india and China.
macrhino 1 year ago
@macrhino The U.S. has the second highest corporate income tax in the world. Doesn't that count? You discuss France, I've been there, would you like to turn the U.S. into another France? "No personal knowledge (of U.S. taxes)"? It is true I live in London most of the time, but I'm an American citizen. Harvard grad, USMC veteran. And I pay U.S. taxes. (Work on your grammar, mac - sorry, I can't help it, I graduated Oxford, too.)
4KnowWon 1 year ago
@4KnowWon Tell you what slick, I don't believe you. You have no knowledge of taxation (say you live in London but do not understand European tax systems). More than this you are boorish enough to make statements about grammar in a blog (stupid) while using incorrect grammar yourself. What punctuation joins two independent clauses, slick? I'll give you a hint, NOT A COMMA.
Now you think corporate income tax has something to do with this subject? Because you were so wrong on Capital Gains? Right!
macrhino 1 year ago
@4KnowWon On top of all of this, I doubt you have been to France. You certainly have not lived there. What in particular, do you find so unappealing about France? The better than US health care? The higher standard education system? The 6 weeks a vacation a year? I have employees in France, UK too, so think really hard as I will call you out on deceptions. Did it bother you that you had a higher chance of going to a US jail as an American than a French jail as a French citizen, slick?
macrhino 1 year ago
@macrhino No, I've never lived in France. What do I find so unappealing about France? The French. And mac, work on your grammar. You're not truly an American, are you?
4KnowWon 1 year ago
@4KnowWon Slick,
I'll put my English degree against your degree anytime. I'll take your grammar comments with a grain of salt since your comments are inaccurate and non-specific. I asked you what you did not like about France and your answer is "the French" as if this was an answer. So you
1. Don't understand the US tax system
2. Don't understand the European tax system
3. Don't understand Capital gains.
4. and don't have a grasp on English grammar.
One thing is for sure, the USMC part, DFJ.
macrhino 1 year ago
@4KnowWon "Harvard grad, USMC veteran." Sentence construction, no verb.(F)
"You discuss France, I've been there, would you like to turn the U.S. into another France?" Independent classes joined by commas (F)
(Work on your grammar, mac - sorry, I can't help it, I graduated Oxford, too.) Incorrect use of a dash. More Independent classes joined by commas? (F) Guess Oxford doesn't have semicolons, do they?
I'd love to buy you for what you know and sell you for what you think you know.
macrhino 1 year ago
Everytime Schiff goes to the bathroom to take a dump, he comes up with these hair brained ideas. No income taxes? Fire all accountants? Schiff, do us all a favour and stop going to the bathroom....we all know you are full of shit anyway. Nothing is free, Schiff, taxes need to be collected to pay for fireman, street cleaners, police, and welfare rolls for the now unemployed accountants.
STFU!!!
Rata4You 1 year ago
@Rata4You Wow you are obviously a mental midget...."fireman (singular?), street cleaners, police" have absolutley NOTHING to do with the federal income tax (i.e. the 16th Amendment, which Schiff is addressing here) considering that they are all funded by State legislatures, NOT Congress, so that spew of crap was entirely irrelevant.
xpostal1289x 1 year ago
Mental midget. Yeah, good one. You ought to invest in Schiffs economic theories....check out what his angry investors are saying about his "no exit strategy" commitals.
All funded by state legislatures, really? Ask the people of California how thats going. Hmmm....only 9 States arent asking for bailouts. EVERYBODY is sinking. So, again, Peter is short-sighted and without a financial exit strategy...yet again.
Rata4You 1 year ago
@Rata4You What the fuck do Schiff's "angry investors" have to do with his views on the income tax? That's not at all what we're discussing here...and besides the only reason that these States are in debt and "sinking" is because they increase outlays in the "good times" due to artificial inflationary booms and moral hazard brought on by federal government spending which initiates from the looting of the citizenry via the income tax. So again, nothing you're saying is making sense.
xpostal1289x 1 year ago
@xpostal1289x Rata4You is barely literate don't waste your time. Your explanation of why States are in trouble is beyond his ability to comprehend.
strongbadXCP 1 year ago
@xpostal1289x
and again all you are doing is talking like a peter schiff mouthpiece. ***yawn***
trinomialtree 1 year ago
@trinomialtree Ha what a stupid refutation to everything I just said...actually that wasn't even a refutation...it was just a retarded amalgamation of words.
xpostal1289x 1 year ago
@xpostal1289x
what did you expect? i'm talking to a moron like you.
trinomialtree 1 year ago
@trinomialtree Are you serious? What a stupid fucking twat you are...grow up some day and try to understand basic economic knowledge.
xpostal1289x 1 year ago
@xpostal1289x
as if a peasant like you knows anything about economics and finance.
trinomialtree 1 year ago
@Rata4You Furthermore, even if we were to eliminate the federal income tax, our federal budget would be exactly the same as it was in year 2000, (we had firefighters then too, in case you can't remember things), so even if your off-topic, idiotic, and insulting income tax argument was true, we could still fund all of the vital services we need. Knowledge fail on your part...
xpostal1289x 1 year ago