# If The Tea Party Was Actually Serious **URL:** \ **Category:** Great Debates\ **Created:** [October 15, 2010, 3:37pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250 "2010-10-15T15:37:14Z")\ **Posts on this page:** 20\ **Page:** 17
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [October 22, 2010, 9:54pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/323 "2010-10-22T21:54:24Z")
> [@Magiver](#): > > The theory behind the tax is that costs will be reduced so the end cost to consumers remain the same. The specific cost to be reduced is the cost of income tax for the labor required to produce the goods or service. The manufacturer/distributer/retailer all have to pay their staff a gross amount, out of which income tax is then paid. If the workers no longer pay income tax, the salary costs go down and hence the price of the goods/services goes down correspondingly. Then at the retail level the Fair Tax gets added back on. According to the Fair Tax folk, these effects balance each other out so the end price will be much the same as it is now. > [@](#): > > What it will probably do is alter cross-state taxation on the internet so that products don’t get a free ride which currently represents a loss of state tax revenue. Can you explain what you mean? Presumably the Fair Tax will be added to all purchases on the Internet, but that is a Federal tax and does not affect state taxes. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 22, 2010, 10:39pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/324 "2010-10-22T22:39:05Z")
> [@amarone](#): > > The specific cost to be reduced is the cost of income tax for the labor required to produce the goods or service. The manufacturer/distributer/retailer all have to pay their staff a gross amount, out of which income tax is then paid. If the workers no longer pay income tax, the salary costs go down and hence the price of the goods/services goes down correspondingly. Then at the retail level the Fair Tax gets added back on. According to the Fair Tax folk, these effects balance each other out so the end price will be much the same as it is now. No, the salary cost remains the same (employees still need to pay taxes via purchases). The cost of taxes for the business go down as do the accounting costs associated with it. > [@amarone](#): > > Can you explain what you mean? Presumably the Fair Tax will be added to all purchases on the Internet, but that is a Federal tax and does not affect state taxes. products are sold tax free on the internet where they are not in a brick and mortar store. This represents an ever growing loss of tax revenue for states and IMO a federal tax would require a more structured mechanism for tracking and paying taxes. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [October 22, 2010, 11:24pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/325 "2010-10-22T23:24:39Z")
I’d vote for the fairtax only if we get to call the dude in charge of the anti-poverty disbursements the Master Rebater. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [October 22, 2010, 11:31pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/326 "2010-10-22T23:31:42Z")
> [@Magiver](#): > > No, the salary cost remains the same (employees still need to pay taxes via purchases). The cost of taxes for the business go down as do the accounting costs associated with it. The Fair Tax proponents theory is that the costs of goods will go down because of the removal of embedded taxes that the businesses have to pay. And that this reduction is almost exactly the same as the level of the Fair Tax (23% additive, 30% inclusive). Hence prices will stay the same (they say). I think we agree on that. So the difference between you and me is that I said that the embedded taxes include the income taxes of the workers, whereas you say that it is only the corporate taxes. I confess that I could not find this explained in the Fair Tax book - it may be there; I didn’t reread the whole thing in the last 15 minutes. If the Fair Tax on an item is only balancing out the corporate taxes, how does the government get paid the equivalent of the personal income tax that is no longer being withheld from the employee? I don’t see how that would work unless prices went up by 30%, although the Fair Tax people say that will not happen. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [October 22, 2010, 11:32pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/327 "2010-10-22T23:32:20Z")
> [@Magiver](#): > > …and IMO a federal tax would require a more structured mechanism for tracking and paying taxes. Good thing the Fair Tax gets rid of all the federal tax bureaucracy, eh? ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [October 23, 2010, 2:03am UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/328 "2010-10-23T02:03:08Z")
> [@Czarcasm](#): > > If your product is not in demand, you won’t sell much of it. If your taxes are cut, but you don’t reinvest it back into your company, it won’t grow. If your taxes are cut, and you reinvest it back into the shareholders instead of directly into the business, it won’t grow. > [My Name]It is really surprising that these examples, and many others, haven’t been pointed out before in this or any other thread.[/My Name] This will be confusing if you ever change your name from Czarcasm. ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [October 23, 2010, 3:18am UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/329 "2010-10-23T03:18:20Z")
> [@Magiver](#): > > products are sold tax free on the internet where they are not in a brick and mortar store. In fact, they are not. Sales taxes are _collected_ by internet vendors who have a brick and mortar presence in the state to which they are shipping the purchase. In states where the tax has not been collected and passed to the state by the vendor, sales taxes are still due, and need to be reported and paid to their state by the purchaser. Such purchases are by no means tax free, and people who do not pay the taxes on those purchases are tax evaders. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 23, 2010, 3:25am UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/330 "2010-10-23T03:25:44Z")
> [@emacknight](#): > > With regards to a “fair tax” proposal and this thread, the question is: will it balance the budget? If it does, it means at least one person is going to pay higher taxes. A balanced budget is a function of politicians spending money in accordance with the inflow of tax revenue. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [October 23, 2010, 3:45am UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/331 "2010-10-23T03:45:52Z")
> [@Magiver](#): > > A balanced budget is a function of politicians spending money in accordance with the inflow of tax revenue. Which is achieved by cutting taxes and cutting spending. Which one do responsible legislators do first? ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 23, 2010, 5:07am UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/332 "2010-10-23T05:07:12Z")
> [@Fear\_Itself](#): > > Which is achieved by cutting taxes and cutting spending. Which one do responsible legislators do first? If you mean this right now it would be to cut spending. Taxes have already been cut. Raising them during a recession would make things worse. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [October 23, 2010, 6:37pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/333 "2010-10-23T18:37:32Z")
> [@Euphonious\_Polemic](#): > > Look on the bright side. With lower taxes, you’d have more money to spend,and you could choose to spend it on building walls and gates, and hiring private security to keep the unemployed and crackheads out of your yard after the city’s infrastructure crumbles into dust. You joke, but I’ve lived in Haiti. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [October 23, 2010, 7:10pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/334 "2010-10-23T19:10:37Z")
> [@Northern\_Piper](#): > > I’m afraid you’ve got the players and timeline backwards in this. > > Canada returned to balanced budgets at the federal level in 1998, during the government of Prime Minister Chrétien and the Liberal Party - I assume they are the “high-tax high-service régime” you’re referring to? On assuming office in 1993, the Liberals led a sustained budget-cutting process, leading to balanced budgets for the first time in 30 years, and continuing well into this decade. > > However, with the recession and the perceived need for government infusions of liquidity into the economy, the federal government has slipped back into a deficit, and at the most optomistic predictions, won’t be back to balanced budgets for at least 5 years - so saith the Finance Minister, who’s part of the Conservative government - I assume that’s the “low-tax low-service party” you’re referring to? > > The concern, however, is that the new deficit budgets aren’t just temporary - that they actually mark a return to a structural deficit. > > See: > > [Federal Fiscal Policy in Canada: History, Operation, and Trends in the Global Recession](http://www.mapleleafweb.com/features/federal-fiscal-policy-canada-history-operation-and-trends-global-recession#history) > > [Canada Presents Balanced Budget, the First in Almost 30 Years](http://www.nytimes.com/1998/02/25/world/canada-presents-balanced-budget-the-first-in-almost-30-years.html) > > [Canada hits record deficit, Flaherty says balanced budget over five years away](http://ca.news.finance.yahoo.com/s/12102010/2/biz-finance-canada-hits-record-deficit-flaherty-says-balanced-budget.html) After posting this, I ran across an article in _Maclean’s_ mentioning the Conservative deficit. Turns out I should check my cites; my source was a vaguely remembered post by **Sam Stone** , who apparently is as unreliable in describing his own country as in describing mine. > [@Damuri\_Ajashi](#): > > The FAIR tax simply shifts tax burdens from one group to the next. It is no simpler than what we have now and even if it was a bit simpler to begin with, it would become complicated again within a couple of decades. > > We undoubtedly need comprehensive tax reform but the Fair tax is about the stupidest proposal out there (which means its probably the one we will end up going with) That’s horrifying. If this is in the wind, I need to get my plans for a nationalsocialist revolution ready to exploit the resultant widespread misery. Maybe read up on Hitler & Robespierre. > [@Damuri\_Ajashi](#): > > Anything above a 50% top marginal federal income tax rate should be reserved for special situations, butI’m OK with federal income tax rates up to about 50%. Can we consider that we are in special circumstance now? ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [October 24, 2010, 8:51pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/335 "2010-10-24T20:51:02Z")
> [@foolsguinea](#): > > That’s horrifying. If this is in the wind, I need to get my plans for a nationalsocialist revolution ready to exploit the resultant widespread misery. Maybe read up on Hitler & Robespierre. I often wonder how stupid top level conservatives are, and I don’t mean that in a snarky way, but as to question their understanding of history. Surely they are aware of what happens when the poor get truly destitute, and when the income gap gets too wide. Historically at least, there is very little incentive for aiming to achieve that sort of society where the rich get exceedingly wealthy at the expense of the poor. If my stated goal was to avoid socialism, providing the fuel for a socialist revolution would not be on the list. Which should then cause us to look at the capitalist revolution the Tea Party is trying to foster. A ground swell of people trying to get away from government oppression. It would then be in a liberal’s best interest to avoid feeding such a fire. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 24, 2010, 8:57pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/336 "2010-10-24T20:57:18Z")
> [@Magiver](#): > > The theory behind the tax is that costs will be reduced so the end cost to consumers remain the same. What it will probably do is alter cross-state taxation on the internet so that products don’t get a free ride which currently represents a loss of state tax revenue. Unless you believe that the corporate tax is carrying the entire tax burden in this country, corporations will not be saving enough money (in the form of elimination of the corporate tax) to cut costs 23%, I doubt corporate profit margins at even a small percentage of corporations is at high as 23%. A 23% consumption tax seems to be certain to increase price levels. On the other hand, after tax wage levels will increase as income taxes are abolished. The effect of abolishing those income taxes is HIGHLY regressive. Perhaps the really rich will step up to the plate and start consuming a LOT more to make up for th drop in consumption by the poor through upper middle class but even then, unless they consume ALL their income, 23% is probably not revenue neutral. And don’t forget, one of the advertised outcomes is that people will save more, IOW spend less. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 24, 2010, 8:59pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/337 "2010-10-24T20:59:02Z")
> [@amarone](#): > > The specific cost to be reduced is the cost of income tax for the labor required to produce the goods or service. The manufacturer/distributer/retailer all have to pay their staff a gross amount, out of which income tax is then paid. If the workers no longer pay income tax, the salary costs go down and hence the price of the goods/services goes down correspondingly. Then at the retail level the Fair Tax gets added back on. According to the Fair Tax folk, these effects balance each other out so the end price will be much the same as it is now. Except for the extra 23% you pay at the register. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 24, 2010, 9:02pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/338 "2010-10-24T21:02:28Z")
> [@Fear\_Itself](#): > > Which is achieved by cutting taxes and cutting spending. Which one do responsible legislators do first? I think you mean increassing taxes or cutting spending. A responsible legislator right now has to do both. They don’t get to pick one poison, they have to drink a poison cocktail, we are THAT deep in the hole. Cutting spending simply can’t do it alone and increasing taxes alone won’t do it either. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 24, 2010, 9:05pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/339 "2010-10-24T21:05:01Z")
> [@foolsguinea](#): > > Can we consider that we are in special circumstance now? Well, the period following WWII was a “special circumstance” when we had to pay off war debt and the deficit spending that pulled us out of the Great Depression. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [October 24, 2010, 9:22pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/340 "2010-10-24T21:22:33Z")
> [@emacknight](#): > > I often wonder how stupid top level conservatives are, and I don’t mean that in a snarky way, but as to question their understanding of history. Surely they are aware of what happens when the poor get truly destitute, and when the income gap gets too wide. Historically at least, there is very little incentive for aiming to achieve that sort of society where the rich get exceedingly wealthy at the expense of the poor. If my stated goal was to avoid socialism, providing the fuel for a socialist revolution would not be on the list. I don’t think it’s stupidity, I think they actually believe their rhetoric about the rich being benefactors of society because of all the jobs they selflessly create. And the richer they are, the more good they must be doing. The problem being, of course, that they’re not selfless at all. Nobody needs extra encouragement to go out and become rich. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [October 24, 2010, 9:25pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/341 "2010-10-24T21:25:43Z")
> [@Damuri\_Ajashi](#): > > Unless you believe that the corporate tax is carrying the entire tax burden in this country, corporations will not be saving enough money (in the form of elimination of the corporate tax) to cut costs 23%, I doubt corporate profit margins at even a small percentage of corporations is at high as 23%. > > A 23% consumption tax seems to be certain to increase price levels. On the other hand, after tax wage levels will increase as income taxes are abolished. The effect of abolishing those income taxes is HIGHLY regressive. Perhaps the really rich will step up to the plate and start consuming a LOT more to make up for th drop in consumption by the poor through upper middle class but even then, unless they consume ALL their income, 23% is probably not revenue neutral. > > And don’t forget, one of the advertised outcomes is that people will save more, IOW spend less. Looking again at [federal revenue sources](http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png), cutting corporate taxes entirely really wouldn’t do much to the deficit. On the grand scheme of things, it’s almost small enough to be insignificant one way or another. As far as stimulus goes, if what employers claim is true, for $140billion would could completely eliminate corporate taxes, and then I assume unemployment goes to zero. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [October 24, 2010, 9:28pm UTC](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250/342 "2010-10-24T21:28:06Z")
> [@foolsguinea](#): > > You joke, but I’ve lived in Haiti. I’ve lived in Jamaica. I could see you from my front yard! I think living in a country that is experiencing low taxes and a non-existent government should be a requirement for any one espousing a Libertarian philosophy. [Previous page](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250.md?page=16) [Next page](https://boards.straightdope.com/t/if-the-tea-party-was-actually-serious/557250.md?page=18)