Originally Posted by Chan

What you're describing actually happened in the boat industry during the last luxury tax.

Originally Posted by Finny

Yeah.. it would apply to all luxury item industry..

Originally Posted by Chan

You're thinking of a future luxury tax. I'm referring to the previous luxury tax. The tax didn't harm the rich folks too much but it was very harmful to manufacturers and their employees. There was at least one yacht manufacturer that went out of business as a result of the luxury tax.

Online NewsHour: Effects of repeal of the federal luxury tax on boats -- January 1, 1996
New Luxury Tax Trimming Boat Sales - New York Times
Boating titles swamped by luxury tax | Folio: The Magazine for Magazine Management | Find Articles at BNET

Originally Posted by Finny

How would reducing taxes in another area help those workers who produce Luxury Items (say like Porsche or BMW or Lexus)? Increase taxes on Luxury items cause people not to buy that item as much (this is consisted with everybody and not those who buy luxury items). That means workers will have to be laid off.. or that Luxury company realigns and stops producing Luxury items. Which means negative income in taxes based on what was assumed for the income of a Luxury Tax.





It is a tariff. What you just said explained what a Tariff or Tax is designed to do.

Originally Posted by nerv14

No, it is a reverse tariff in that it is easy to see the harm in certain industries but it is more difficult to see the posititive outcome of lower taxes in other areas.

Originally Posted by nerv14

A luxury tax would not help people in that industry, I never said it would, but that the luxury tax would help people in other industries by lowering taxes in other areas.

Originally Posted by nerv14

I am thinking about a luxury tax because I support the "fair tax" and a luxury tax could generate revenue that could reduce a normal universal sales tax.

Originally Posted by nerv14

I am just trying to make the "fair tax" more progressive because it currently has a downside of taxing the poor too much.

Originally Posted by Finny

There is no such thing as a reverse tariff (unless you actually cut it) which would be reversing the tariff. You are harming one industry on purpose which effects the whole of industry. It has an effect over the whole of the economy. Not just the Luxury sector. As the Luxury sector buys from other industries to create their luxury product.

You will not see a positive outcome in any case dealing with Taxes. Once the Luxury industries are virtually taxed to death (like they were before when we had this stupid tax), it will end up not producing enough income from the tax to offset those taxes you want to cut. Which will end up causing a negative income thus leading to raising the taxes you decided to cut.




Do you understand business and how business works? A luxury company only produces the final product, they do not produce the electronics, steel, rubber or mine the item in question. So when the Luxury business cuts its output, it cuts the items it buys to produce their product. This causes a ripple effect in all Industries.




If you support the Fair Tax, then you should be rejecting a Luxury Tax as its counter productive to a Fair Tax. You are singling out 1 aspect of the Market and taxing it.



So you don't support fair tax. You support Progressive taxes. Fair Tax doesn't tax the poor too much. It taxes everyone equal. If we are all equal, then we should be equally taxed.

Originally Posted by nerv14

I am aware of that, but the extra revenue can be used to lower taxes in another area, as I have said many times.




No, it is a reverse tariff in that it is easy to see the harm in certain industries but it is more difficult to see the posititive outcome of lower taxes in other areas.

A luxury tax would not help people in that industry, I never said it would, but that the luxury tax would help people in other industries by lowering taxes in other areas.


I am thinking about a luxury tax because I support the "fair tax" and a luxury tax could generate revenue that could reduce a normal universal sales tax. I am just trying to make the "fair tax" more progressive because it currently has a downside of taxing the poor too much.

Originally Posted by nerv14

You are just bringing up the negative effects of taxing, which I agree with, but as i have said many times the luxury tax revenue would be used to reduce taxes in other areas. The question isn't if taxes are good or bad, but what type of taxes are the least harmful.

I wasn't really talking about a tariff but I was using it as an example of an economic policy where only some of its effects are obvious, and some of its effects aren't.

The problem is that I don't believe that we should all be taxed equally, I believe that the rich should be taxed more so the poor could be taxed less. It isn't that I support large taxes, but that the taxes on the poor should be reduced even at the lost of higher taxes on the rich.

just nm, I already stopped supporting a luxury tax because of what other people said about it being impractical for companies and just vague. lol your reasons about what is "fair" or how the rich shouldn't be taxed as much doesn't phase me very much. :D

Originally Posted by xjoe3x

The fairtax is already very progressive. The poor are the main beneficiaries of the tax. They are the ones getting the best deal from the tax and it is done fairly. One of the biggest things about the fairtax is that it eliminates other forms of taxation. It is important to keep it that way or we will just up back where we are now.

Originally Posted by nerv14

no that isn't completely true.

Even though the absolute poorest people pay less taxes, the middle class and poverty level class people pay more money. It is only the absolute rich and poorest who pay less. However, I can say that because the tax is on what is spent and not earned, the advantages to the economy will help everyone even those who are forced to spend more.

But most of the middle class and poor must pay more taxes, and that is why I would be happy if some form of completely progressive tax was used as well.

http://upload.wikimedia.org/wikipedi...percentile.png

Originally Posted by nerv14

I am aware of that, but the extra revenue can be used to lower taxes in another area, as I have said many times.