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Thread: Stelly Plan

  1. #16
    Super Moderator PawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond repute PawDawg's Avatar
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    Good post Turbo. Your point is well taken.

    The problem is that our politicians didn't go far enough down the ladder to recover the loss in revenue. The claim to be increasing taxes on only the top 20%, but their numbers don't agree. They knew that if they gave the real numbers that it would never pass. Once again, people are being mis-lead and will vote for something they only THINK won't affect them. Until we get an honest plan that will protect people like your Granny, but spread out the rest I won't be for it. They are selling that plan now, but this ain't it.

  2. #17
    Champ Champ967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond repute Champ967's Avatar
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    Monty & Turbo:

    Here's a proposal -- How bout a sales tax on everything BUT essentials like food, clothes, and prescriptions. (Of course that would mean that taxes on other stuff would need to be a little higher.)

    What would you say to elimination of all income taxes and the institution of a 15% natl sales tax, not including food, clothing or medical? (15% is just a number ... you can tweak it.)

    That way grandma is protected and the drug dealers make the same (proportional) contribution as the CEO's. Furthermore, conservatives wont be able to complain about stifling ambition.

  3. #18
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    I like the idea of a "flat consumption tax", such as you propose (minus food, prescriptions, and clothing). I personally would be in a better mood at the end of the year.

    That would make buying a car fun! 8O

  4. #19
    Super Moderator PawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond reputePawDawg has a reputation beyond repute PawDawg's Avatar
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    It would be a good thing Champ, but don't look for it. The "expert" economists will say that it won't create enough revenue during the "down" times. They will refuse to take into account the fact that the tax savings will go right back into the kitty in another form of tax. It is exactly the sort of thing that Louisiana could do to gain the favor of folks like me, but they are so afraid of losing some of their pork that they insist on raising my income taxes to make up the difference and they don't have ANY CLUE as to what that difference will be. Only the true politicians are in favor of this plan. Vic Stelly is a good man, but he has been blinded by his mission to do away with the sales tax and refuses to see the big picture.

  5. #20
    Administrator AustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to beholdAustinDawg is a splendid one to behold AustinDawg's Avatar
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    I can (believe it or not) go along with that Champ.

    Common ground, who'd a thunk it.

  6. #21
    Champ Champ967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond repute Champ967's Avatar
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    Galdja like the idea, maddawg & AD. This actually exists is some states!

    When I lived in PA, i paid a hefty sales tax (9% I think ... more in some locales). But most food & clothing was exempt.

    The state supplemented this with a flat 2.8% income tax, of which your first $20K was exempted. (And more for your dependents.)

    Ironically, one Philly-area politico once described to me the Commonwealth's pursuit of balance between sales & income tax as similar to a football offense's need to find the best balance between running & passing plays to maximize scoring (revenue).

    The Skelly proposal reminds me of a Crowton offense.

  7. #22
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    In Texas, as everyone here knows, there is no income tax. As a matter of fact, the mere mention of the word is enough to disqualify a candidate. Even the democrat lite gov. candidate uses the tag line, "Fought hard to prevent a state income tax". State revenues are garnered through property taxes. It can be argued that this method taxes disproportionately (i.e. regressive as well). I think that some of the revenues are also garnered through sales tax. I know that in Austin, there is NO tax whatsoever on unprepared food. If you go to a restaraunt, or buy fried chicken and a potato log from the grocery store, you pay your 9.25%. But if you go to the grocery store and buy a carton of eggs marked $1.99, you pay $1.99. Clothing is taxed.

    It would be interesting to see how a 15% sales tax goes over. I know that from my point of view, it would make me think a little harder before buying something that falls under the umbrella of the tax. If I buy a car for $15,000, I pay $2,250 in taxes--basically a year's worth of car notes. So I would think really hard before purchasing that car. Multiply that by 280 Million me's, and you could have a sizable drop in consumerism, which could cripple the economy. It's a catch-22; you have to get the tax revenue from somewhere in order to build roads and fund universities, but you have to do it in such a manner as to not destroy the revenue base that you get your funding from. In other words, you can't make people feel that they are getting screwed for the sake of getting screwed.

  8. #23
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    If I buy a car for $15,000, I pay $2,250 in taxes ... Multiply that by 280 Million me's, and you could have a sizable drop in consumerism
    Let's presume that the 280MM Austins average $35K/yr. Without a federal income tax, that's an extra $7,700 cash in their pockets each year! Those car taxes dont look quite as daunting now.

    Furthermore, your assertion that sales taxes drive down spending is not always vaild. The spikes in petroleum prices we've seen over the last few years illustrate this. We're not buying any less gas than we were before. Prices have to get ludicrous (like in the 70's) before people start to cut back on something they consider a "necessary luxury". Cigarrette smokers will tell you the same thing.

  9. #24
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    Yep - I can agree with Champ's idea as well, but that's not what the Stelly Plan is.... so, I vote NO

  10. #25
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    Quote Originally Posted by Champ967
    If I buy a car for $15,000, I pay $2,250 in taxes ... Multiply that by 280 Million me's, and you could have a sizable drop in consumerism
    Let's presume that the 280MM Austins average $35K/yr. Without a federal income tax, that's an extra $7,700 cash in their pockets each year! Those car taxes dont look quite as daunting now.

    Furthermore, your assertion that sales taxes drive down spending is not always vaild. The spikes in petroleum prices we've seen over the last few years illustrate this. We're not buying any less gas than we were before. Prices have to get ludicrous (like in the 70's) before people start to cut back on something they consider a "necessary luxury". Cigarrette smokers will tell you the same thing.
    You may be onto something. Given a choice of being taxed 22% of what I EARN versus 15% of what I SPEND, I'll take the latter, thank you.

    Steve Forbes for President.

  11. #26
    Champ turbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond reputeturbodawg has a reputation beyond repute turbodawg's Avatar
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    This is quickly getting over my head. My educational understanding of real economics consists of exactly one class (Econ 202 I think) that I took my (first) freshman year at Tech. Pretty interesting really, yet infinitely baffling to me. The only class I ever had in the CAB building, now that I think about it...

    I will say that, kinda like the old judicial definiton of porn, (and especially because I'm real limited in my understanding of it all), I can't define a fair tax structure, but I'll know it when I see it. And a national sales tax ain't it.

    Here's what Dick "I have the best name in politics" Armey says about it. Marinate on this...


    The case for a sales tax begins with one highly appealing applause line. It will allow us, supporters argue, to eliminate the income tax altogether, possibly even repealing the 16th Amendment, which authorized it and made Big Government possible in the first place.

    Even if that goal were politically feasible -- and I don't think it is -- the exchange would come at a high price. We would give up the income tax for a more intrusive and pervasive tax system.

    The reason is simple. If the government sets out to collect a new tax at the cash register, it will soon have no choice but to extend that tax beyond the retailer to every level of production, as it desperately tries to stop inevitable and massive tax evasion. Any sales tax will become a complex, pervasive, multi-rate, value-added tax. We will soon be living under a VAT -- possibly the most insidious tax scheme ever devised.

    Sales-tax backers often oppose a VAT. But that's what they'll get. To generate sufficient revenue by taxing goods only at the retail level, the government would need to impose a sales tax of at least 20 percent, which means that consumers would suddenly find that everything they buy appears to be 20 percent more expensive. But people will not pay such a high tax. They will either find ways to label their consumer goods tax-exempt wholesale items, they will purchase goods in a cash black market, or they will evade it some other way. A sales tax, in other words, will be immediately undermined by a silent tax revolt, and the government -- following the pattern of European countries -- will respond by imposing a VAT.

    A VAT is assessed at each stage of production and is much easier to collect and enforce for a host of reasons. You can hear the bureaucratic lament in a 1993 report by the Organization for Economic Cooperation and Development, which noted: "Governments have gone on record as saying that an RST [retail sales tax] of more than 10 percent to 12 percent is too fragile to tax evasion possibilities, and it is probably not entirely accidental that in OECD counties, VAT rates are nearly always above 12 percent and that, except in Canada and Iceland, RST rates have always been well below 12 percent."

    These unhappy governments were speaking from sad experience. In 1967, 21 developed countries had retail, wholesale, manufacturer, or multi-stage sales taxes. Today, 20 out of 21 of these sales taxes have become value-added taxes. Every developed country except Australia that has had a sales tax now has a VAT. (Even Canada and Iceland, mentioned as exceptions when the OECD report was written, have since replaced their retail-tax-only systems with VATs.)

    Whether or not the sales tax evolves into a VAT, the government would become intimately involved in almost every economic transaction between consenting adults. The simplest exchange, from a vegetable farmer selling his produce to the corner grocer selling a loaf of bread, would be under the shadow of a government tax collector taking his cut. In fact, every businessperson in America would become a tax collector for the government.

    "But businesses already collect taxes for the government," sales-tax supporters counter. There's a big difference. Today, businesses collect a relatively small share of the income tax, since three quarters of the income in the economy is labor income, paid by individuals. But under a sales tax, there is no direct tax on individuals, so businesses will be responsible for collecting several times what they collect today. That means IRS scrutiny of American businesses could be expected to rise proportionately. Since the 10-12 million businesses in America have fewer rights under law than individuals, we can expect IRS abuses to rise exponentially as well.

    It would be an administrative mess. A national sales tax may well exempt many basic necessities from tax --beginning with food and clothing. This would lead to bitter disputes over the difference between food and candy, between real clothes and costume accessories. Congress and the courts would likely find themselves debating the nutritional value of Twinkies, the body coverage of sportswear, and much else, just as state governments do today, but on a larger scale.

    Worse, the federal sales tax and the dozens of different state sales taxes -- aside from having different tax rates -- would likely exempt different items. That means a small businessperson would need to look up the correct state sales-tax rate, apply the federal rate, subtract the state tax rate from items exempted only by the state, or subtract only the federal rate from items federal-only exempted. Then he would need to do separate calculations for each of the states in which he does business. (And he would need to catch any mistakes before the tax enforcer appears.)

    The likely consequence would be a slowdown in business activity -- and a loss of jobs and drop in wages for millions of American workers.

  12. #27
    Champ Champ967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond reputeChamp967 has a reputation beyond repute Champ967's Avatar
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    A compelling argument. But much of it relies on "slippery-slope" scare tactics.

    The guy is right that people try to evade taxes, and that administration will be difficult. And he's right. But we cant know how much more cumbersome this would be than the existing income tax structure.

    I, for one, propose a natl sales tax, not because it would be easier, but rather because it would be (more) fair and equitable.

    Given a choice of being taxed 22% of what I EARN versus 15% of what I SPEND, I'll take the latter, thank you.
    AD -- the 15% was just a starting point. Ideally, we would need some political mechanism by which to adjust the rate in a timely fashion.

  13. #28
    Champ Reddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of lightReddawg is a glorious beacon of light
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    Turbo,
    This is from the advocate about the Stelly plan. Please just take a look at the things I have highlighted.


    No. 2 -- "Swap" taxes by raising state income taxes for many people and banning state sales taxes on groceries, residential utilities and prescription drugs.

    Voter approval of No. 2 would do three things:

    Ban state sales taxes (ie local taxes are still there)on groceries, residential utilities and prescription drugs. The state currently collects a 4 percent sales tax on groceries and utility bills but does not tax drugs. Local taxes on those items would remain. The change would amount to a 4 percent savings on consumers' grocery and utility bills.

    Eliminate state income-tax breaks on federal excess itemized deductions such as mortgages and charitable donations. This change affects only people who itemize on their federal income taxes. The other changes affect just about every household in the state.

    The Public Affairs Research Council of Louisiana says married couples filing jointly would break even if they earn about $72,500 to $78,000 a year. Generally, those who earn less would pay less overall tax, and those who earn more would pay higher taxes overall.

    The approximate break-even income for single filers with no dependents would fall between $36,500 and $37,500, according to PAR.

    The way they are promoting this is absurd!! VOTE NO

    Reddawg

  14. #29
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    Reddawg,
    I'm still convinced. I'm still going to vote NO!

    I've heard so much baloney on this thing, that it is getting to the point where I know there's some deception going on. One of the other engineers in my office who clearly falls in the category of those paying more said he ran the plan and he will actually save a little money according to the calculator link that is going around and linked to many websites. So, he's going to vote for it. I told him there's no way that he's going to pay less, but he believes the bogus calculator.

  15. #30
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    Markay,
    I am worried this might pass. Several people I have talked to said "it sounds pretty good on tv". When they get all the details however, they quickly change their mind. I have told as many people as possible to vote no, but its going to be close.

    Reddawg

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