This isn’t necessarily political, but I had to post something about this phenomenon of people being afraid of using (or re-using) plastic water bottles. I’ve always kind of rejected the idea that using a water bottle 4-5 times before you put it in the recycling bin is dangerous for me. Didn’t this chemical that was supposedly released need a stimulus like heat? Was it just old bottles with the problem?
Well, this stuff is very confusing and especially when filtered through your circle of friends, so I’ve sought out every article I could find… and now understand why people are confused. There is a lot of contradictory “studies” out there… but let me put out a few consistencies that you can count on:
1) the BPA chemical might be released at room temperature, but the real danger is with boiling water being put into them. That’s when it’s “potentially” dangerous. (note they don’t know if it’s actually dangerous)
2) supposedly non-disposable bottles like Nalgene makes are also susceptible to this. Damn!
3) the age of the bottle doesn’t seem to matter. Just the heat of the liquid.
Bisphenol A has been known to leach from the plastic lining of canned foods and, to a lesser degree, polycarbonate plastics that are cleaned with harsh detergents or used to contain acidic or high-temperature liquids
And even though this must be taken with a grain of salt, bisphenol-a.org (which is run by the chemical industry) says that polycarbonate bottles are perfectly safe… and while I’m inclined to believe them and that these reports of late are mostly scare stories, my big question is: “Are these safe levels set by the government really safe?”.
A complete review of the scientific data, as has been conducted by government and scientific bodies worldwide, reveals that polycarbonate bottles are safe for use and that migration levels of bisphenol A from polycarbonate plastic under real-life conditions are well within science-based safety limits.
The sales tax rate, as defined in the legislation, is 23% of the total price including tax (23¢ of every $1—calculated like income taxes), which is comparable to a 30% traditional sales tax (30¢ on top of every $1).
Replace the IRS? Yes! Sounds great! Only 23% tax on new goods? No other taxes? wow, sounds too good to be true! Wait, 23% is deceiving… It’s really 30% on TOP of the price of the candy bar! 23% is the number you get if you take the percentage of the TOTAL. Clever. They didn’t mention that in the book.
While the idea of a rebate given to everyone for some of their tax burden is very attractive, I do wonder about the feasibility of this whole thing.
The President’s Advisory Panel for Federal Tax Reformperformed an analysis to replace the individual and corporate income tax with a retail sales tax and found the rate to be 25% (34% tax-exclusive) for 2006 assuming at least 10% evasion.[8] The rate would need to be substantially higher to replace the additional taxes replaced by the FairTax (payroll, estate, and gift taxes). The Treasury Department has refused to release for peer review the detailed figures and methodology used in the tax panel analysis.[30][42] FairTax proponents, including the Beacon Hill Institute and Kotlikoff, have criticized the President’s Advisory Panel’s study as having altered the terms of the FairTax and using unsound methodology.[35][30][42]
so it seems that depending on who you ask, the rate we’ll need to tax goods and services at is between 31% and 55%, depending on the scenario. That is a very large range!(those are tax EXclusive numbers by the way)
When presented with an estimated effective tax rate, the low-income family above would pay a tax rate of 0% on the 100% of consumption and the higher income family would pay a tax rate of 15% on the 75% of consumption (with the other 25% taxed at a later point in time, as savings is tax-deferred).[44] The effective tax rate is progressive on consumption,[2] as a person spending at the poverty level would have an effective tax rate of 0%, whereas someone spending at four times the poverty level would have an effective tax rate of 17.2%.[44]
Again, the progressive aspect is cool, but has a dark side:My read of this chart is that the fair tax is better for you the lower or higher your income is. The tax burden would be shifted more to the middle class… which makes me REALLY wonder how negatively this could affect american spending. After all, the middle class spends the most money in this country overall and if they are facing paying high taxes on a new car, and making the old one work… what are they usually going to do? keep the old clunker, complete with it’s stinky tailpipe, noisy muffler et al. On the flipside, it would encourage us americans to save!
The FairTax would broaden the tax base to include all 300 million Americans and an estimated 30 million to 40 million foreign tourists and visitors.[46]
This might be the best part of this plan. It automatically taxes tourists and immigrants! Immigration debate over!
The efficiency cost of the current tax system—the output that is lost over and above the tax itself—is between $240 billion and $600 billion every year according to a 2005 report from the U.S. Government Accountability Office.[50][51] Supporters argue that the FairTax system would reduce these compliance and efficiency costs by 90% and return a larger share of that money to the productive economy.[2][52]Beacon Hill Institute of Suffolk University concluded that the FairTax would save $346.51 billion in administrative costs and would be a much more efficient taxation system.[53
Again, I like this idea. Cut out the fat. A lean machine runs better.
According to Professor Dale Jorgenson of Harvard University's Economics Department, revenues to Social Security and Medicare would double as the size of the economy doubles within 15 years after passage of the FairTax.[58] Opponents offer a study commissioned by the National Retail Federation in 2000 that found a national sales tax bill filed byBilly Tauzin, the Individual Tax Freedom Act (HR 2717), would bring a 3 year decline in the economy, a 4 year decline in employment and an 8 year decline in consumer spending.[59]Wall Street Journal columnistJames Taranto states the FairTax is unsuited to take advantage of supply-side effects and would create a powerful disincentive to spend money.[43]
It’s this kind of HUGE difference of numbers that show partisan bias coming into these studies, which makes me worry. The “disincentive to spend money” intuitively feels very real to me, and that is bound to hurt consumer spending overall and therefore the economy. What am I missing here?
Bill Archer, former head of the House Ways and Means Committee, askedPrinceton University Econometrics to survey 500 European and Asian companies regarding the impact on their business decisions if the United States enacted the FairTax. 400 of those companies stated they would build their next plant in the United States, and 100 companies said they would move their corporate headquarters to the United States.[15][61] In addition, the U.S. is currently the only one of the 30 OECD countries with no border adjustment element in its tax system.[62] Proponents state that because the FairTax is automatically border adjustable, the 17% competitive advantage, on average, of foreign producers would be eliminated, immediately boosting U.S. competitiveness overseas and at home.[29]
Maybe this is that missing piece. Well, not on the consumer side anyway. So, according to this, we’ll have more big companies here! yay. I guess that’s a yay.
People living through the transition may find both their earnings and their spending taxed.[65] Critics have stated that the FairTax would result in unfair double taxation for savers and suggest it does not address the transition effect on some taxpayers who have accumulated significant savings from after-tax dollars, especially retirees who have finished their careers and switched to spending down their life savings.[66][65] Supporters of the plan argue that the current system is no different, since compliance costs and “hidden taxes” embedded in the prices of goods and services cause savings to be “taxed” a second time already when spent.[65]
This is another very interesting point about this plan. The idea of removing “hidden taxes” by eliminating business taxes altogether, thus making things (theoretically) cost less. The idea is that if Widgetmaker, inc. pays a million bucks in taxes each year now, under the fair tax they’d be paying none of that, which means they could (read: theoretically would) reduce the price of the goods, and thus make prices not seem to have gone up very much. Another argument that has funny numbers to back it up. Numbers that don’t often jive with those collected and added up by others.
During the transition, many or most of the employees of the IRS (105,978 in 2005)[67] would face loss of employment.[35]
awww. poor poor IRS employees. Why don’t I feel sorry for them? They’ll find new jobs!
Proponents believe environmental benefits would result from the FairTax through environmental economics and the re-use and re-sale of used goods.[73] The significant reduction of paperwork for IRS compliance and tax forms is estimated to save about 300,000 trees each year.[73]
The used goods market would surely surge and this can’t but help the environment. Less paper use is good too… but what else do we think it might do to the environment?
Advocates claim the FairTax would provide incentive for illegal immigrants to legalize as they would otherwise not receive the FairTax rebate.[5] Illegal immigrants would pay the maximum effective tax rate.[1]
This is a pretty cool, almost transparent way to help deal with illegal immigration. Almost genius it seems to me.
Based on a study conducted by Dr. Dale Jorgenson, proponents state thatproduction cost of domestic goods and services could decrease by approximately 22% on average after embedded taxes were removed, leaving the sale nearly the same after taxes (non-accommodation).[29] The study concludes that producer prices would drop between 15% and 26% (depending on the type of good/service) after the switch to a consumption based tax.[5][77]
Another too-good-to-be-true estimate. Really, this seems wonderful. The same price for goods with the 23% tax already in there? Because the corporations will lower their prices once they get to stop paying taxes? HA! I don’t think so. They may lower their prices, but not quickly and not at 100% of their own savings. I’m just too skeptical of big business to believe these numbers!
The overwhelming majority of purchases occur in major retail outlets, which are very unlikely to evade the FairTax and risk losing their business licenses.[35] Economic Census figures for 2002 show that 48.5% of merchandise sales are made by just 688 businesses (“Big-Box” retailers). 85.7% of all sales are made by 92,334 businesses, which is 3.6% of American companies. In the service sector, approximately 80% of sales are made by 1.2% of U.S. businesses.[6]
This begins to answer the question: how are we going to hold retailers accountable for their sales? But it looks like a very large percentage will be payers, if not also very clever avoiders…
FairTax opponents believe that compliance decreases when taxes are not automatically withheld from citizens, and that massive tax evasion could result by collecting at just one point in the economic system.[32]Compliance rates can also fall when taxed entities, rather than a third party, self-report their tax liability. For example, ordinary personal income taxes can be automatically withheld and are reported to the government by a third party. Taxes without withholding and with self-reporting, such as the FairTax, can see higher evasion rates.
Yet tax evasion could be even worse than it is now… which is kinda hard to believe… but not really. After all it is companies who will be paying it… and we know how honest most big companies are!
Underground economy
Opponents of the FairTax argue that imposing a national retail sales tax would drive transactions underground and create a vast underground economy.[3][92] Under a retail sales tax system, the purchase of intermediate goods and services that are factors of production are not taxed, since those goods would produce a final retail good that would be taxed. Individuals and businesses may be able to manipulate the tax system by claiming that purchases are for intermediate goods, when in fact they are final purchases that should be taxed.
This seems like another potential problem. A big one.
As you can see, the main question for me is whether the potential risks and pitfalls of this plan outweigh it’s obvious charms… like getting rid of the IRS… and taking tax returns off everyone’s April to-do list. I’d love to see it debated in the new C-Span congressional hearings Obama (as president) will open up to the public.
Justin here. One of my top issues for the 2008 Presidential election is the Environment. It’s getting swept up and away in most people’s top lists because of other important issues like Iraq and Health Care, but I put it #2, right behind Iraq. With this in mind, I use environmental voting records as a factor in determining my support.
A prominent environmental watchdog group is The League of Conservation of Voters. They have a website that essentially “scores” senators and congressmen on their environmental voting record. Do a search for your state or your favorite senator to find out how they voted on key issues in 2007:
The thing that struck me the most when I looked at these lists (I did a lot of looking by state) was 2 things:
First, the voting divide among Democrats and Republicans is HUGE. Republicans are OVERWHELMINGLY more hostile to the environment that Democrats. Hands down. The thing here that is sad to me is that protecting our natural resources should not be a partisan thing… and it is. And until Republicans get that we can’t just shit on our Earth forever and expect it to stay healthy, I will not vote for them.
Second and back to the topic, let’s look at the “score” for the top presidential hopefuls:
Hillary Clinton: 73%
Her only negatives are for votes she missed.
Barack Obama: 67%
His negatives were mostly for missed votes, but one was an anti-environment vote.
John McCain: 0%
YES, he got ZERO PERCENT! not a single pro-environment vote! NOT ONE! See what I mean about the Republican/Democratic divide here? It’s crazy.
Anyone who says they care about the environment and votes Republican is a hypocrite!
There, I said it. Is there any evidence to refute this? I’d love to see it!
Why is it that every presidential race inevitably has negative campaigning? It really says something about human nature. Justin and I debate this issue as it relates to today’s race and why this phenomenon just won’t go away. Comments welcome.
“Last year the U.N. Human Rights Council adopted a resolution against “defamation of religion,” calling on governments around the world to clamp down on cartoonists, writers, journalists, artists and dissidents who dare to speak up.”
In my view, this is the result of when political correctness and sensitivity goes too far. Free speech is now threatened in Europe. Consider this opinion piece from the WSJ. I have a hard time understanding what the other position is on this issue. Issuing death threats and death sentences for words, or pictures, or art seems slightly uncivilized to me. What could possibly be the defense of the UN’s decision?
Democrats getting civil in their debates? What is the world coming to? Justin and I talk about this and Justin’s upcoming sailing trip in the Caribbean. This show was recorded on Justin’s phone and gave Justin the false impression that I was leaning toward voting for Obama. It would be a cold day in hell…
Our mission is to bring back civil discourse in today’s world by initiating, soliciting, and promoting respectful dialogue between people who disagree on issues of politics, religion, and philosophy. All too often, these topics are taboo and are to be avoided at all costs in social conversations between family members and friends; we all know they can be too emotionally charged! Our belief is that one of the best ways a person can grow in his or her own position is through respectful and honest interaction with others who disagree. In this way, our diversity of thought enriches our understanding and appreciation of life.
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Justin and I debate the differences between absolute and relative truth and how these differences feed our different world views. This discussion was sparked by the Curious vs. Fundamentalist post from several days back. Enjoy.
My read of this chart is that the fair tax is better for you the lower or higher your income is. The tax burden would be shifted more to the middle class… which makes me REALLY wonder how negatively this could affect american spending. After all, the middle class spends the most money in this country overall and if they are facing paying high taxes on a new car, and making the old one work… what are they usually going to do? keep the old clunker, complete with it’s stinky tailpipe, noisy muffler et al.
