Fair Tax and financial instruments?
2011-04-14 21:20:55.900539+00 by
Dan Lyke
5 comments
Hey, Larry, off-the-cuff idea that I haven't dug into yet: Would the Fair Tax apply to financial transactions like the buying and selling of stocks and other finance instruments? [he said, steepling his fingers and raising his eyebrows suggestively]
I might support replacing the income tax with a national sales tax or VAT that applied to all transactions, suddenly a flat rate becomes progressive and we clamp down on some of the speculation that drains so much of our economy.
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comments in ascending chronological order (reverse):
#Comment Re: made: 2011-04-14 21:32:50.282585+00 by:
FnDragon
Isn't this assuming that the spedulation isn't multinational in origin? And that
our banks aren't "based" in places like the Cayman Islands?
You still only tax transactions that take place in the US. So therefore automated
speculation will still probably be dodgable as well.
#Comment Re: made: 2011-04-14 22:16:47.835891+00 by:
Dan Lyke
I suppose it would drive much of the speculation off-shore. Since that's where all the other online gambling sites reside, would that be so bad?
#Comment Re: made: 2011-04-15 00:42:13.429342+00 by:
Larry Burton
The FairTax would be applied to at least the commission portion of the
transaction. I'm not sure exactly how it would be applied to the resale of the
security since one of the aspects of it is that items only get taxed on the
first retail sale. Resales wouldn't be taxed but commissions on those sales
would be a service charge and those are taxable. If the security is repackaged
it would be a new sale, though. Right?
If the speculative stuff is driven off shore then why would we have any
responsibility to bale them out? If the company involved in the speculative
stuff maintains a presence in the US then I would think the same logic would
apply as with mail order or internet sales and state sales taxes.
#Comment Re: made: 2011-04-16 04:53:00.132063+00 by:
TheSHAD0W
The FairTax is supposed to be a consumption tax. Investments aren't consumption, so they wouldn't be taxable.
#Comment Re: made: 2011-04-16 16:29:02.170778+00 by:
Larry Burton
I think recent history has shown that securities can be consumed.