United States Heading towards a Depression?

Everyone must spend money. Everyone needs clothes, food, and a roof over their head. Last I checked, all those things cost money.

 

If the capital gains tax is raised by a good bit you all might as well kiss your 401k and all that shit goodbye.

 

And that my friend is the whole point of a national sales tax.... This way EVERYONE PAYS THEIR FAIR SHARE!!!!!!!!!!

 

No. You really don't get it.

What is a fair share? A fair share of the corporate tax breaks? A fair share of public education for other people's kids? A fair share of abortion on demand (which I do not agree with)?

And besides, you're missing the point. A consumption tax is a penalty on capitalism. It says, if you spend more money (presumably because you have more money) then you owe more back to society.

How is this any more logical than an income tax, which is not logical at all?

 

Because when you tax income you define income by breaking it up into brackets/classifications. Depending on what you make, you could pay more or less, ie., higher or lower percentage based on income, deductions, etc.

When you tax consumption, everyone pays the same fair / flat rate, no matter what. A consumption tax is not a penalty. It already exists, and its fair. When I buy product I pay the same rate of sales tax as someone that makes less or more than me. We all pay the same rate.

Taxing income especially at the corporate level takes money out of the pockets of the working man before he/she has the chance to decide how to spend it. Let people spend their money before the government does and you'll find a lot more money being generated.

Those that save their money should not be penalized for doing so. Their savings and earnings on their savings should be tax free. What better incentive to promote saving than to let those that save keep THEIR MONEY!

When you spend, you pay, when you don't you save.

 

So you're going to tax me again on my savings that were already taxed. You're not going to hurt those who spend alot, you're going to hurt those that have saved a lot.

The retirees who saved $2 Million, will have $1.5 Million in spending power with a 25% sales tax. The best part about it, they probably already paid another $400,000 just to save up that much. Tax me twice, please.

 

AH NO, I believe I said, DO NOT tax savings, and DO NOT tax the interest made off savings....

 

Sure we all pay the same rate. I get that. My point is, you can't avoid the tax, because you will have to pay it on food and shelter, which I consider essential for human survival.

In essence, it is a "living tax". Besides, I reject the notion that we should be paying such taxes anyway. We need to cut government spending, end entitlements and the warfare state, and let people keep their earnings.

Ok, but I don't want the government to generate more money. I'm beginning to rethink what may be a supply sider fallacy that the lower the rate, the more taxes are collected. As the rate trends towards zero, I refuse to believe that revenues climb. There is something funny about collecting more at 0.1% than at 10%.

I do not believe that lower taxes ALONE can so dramatically stimulate economic activity. Some, perhaps. But not the primary or sole driver of gains.

Absolutely. Let's lower or remove taxes, and cut government spending. We'll still have the same amount of money, but more of it will be in the hands of the poor and middle class, without bureaucrats skimming off the top for waste and foreign aid.

 

How do you switch to this national sales tax system without taxing someone's savings.

If a national sales tax was enacted at 25%, your $2 Million would only have $1.6 Million in spending power. If you were to withdraw it, you could buy $1.6 Million worth of goods and $400,000 would go to taxes.

If you worked your whole life in the 28% tax bracket and saved that much money, you would have also earned almost $2.8 Million. Total paid in taxes, $1.2 Million on $2.8 Million of income. Thats a 42% hit, ouch.

 

BREAKING NEWS

Jobless rates jumps to 5.5 percent — biggest rise since `86

The unemployment rate jumped to 5.5 percent in May from 5% in April.

The Dow Jones industrials dropped more than 200 points in morning trading.

The government said the number of unemployed people grew by 861,000 in May — rising to 8.5 million.

http://news.yahoo.com/s/ap/20080606/ap_on_bi_go_ec_fi/economy;_ylt=AhHzB8pUZyoqBTIqjFX0ErSs0NUE

 

I saw this shit this morning and laughed at how stupid this report is. How do we only lose 49,000 jobs and then unemployment jumps to 5.5%? Apparently they are forgetting their own lies.

I hear CNBC trying to blame it on teenagers coming out of school wanting jobs, hahahaha. The shit is seasonally adjusted for a reason, and unless kids got out of school a month early that is all BS.

What it boils down to is that people are out of work.

 

The subprime crisis is not over. More people unemployed means more defaults on overvalued houses. You can't bail out people with no jobs and no money. A lot of big banks are sinking now and a recession will trigger a run of bank failures not seen since the great depression.

One out of every four homeowners now have negative equity and a 20-30% drop in home prices is on the way.

BREAKING NEWS

Foreclosures hit a record high — and more coming

Both the rate of new foreclosures and late payments were the highest on record going back to 1979.

Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter.

The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high.

Nearly 8.5 million homeowners had negative or no equity in their homes at the end of March, representing more than 16 percent of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.

http://news.yahoo.com/s/ap/20080605/ap_on_bi_ge/home_foreclosures;_ylt=AimHVdt1ucVwShkLSqfJIYqyBhIF

 

There is always a three tier system of joblessness. One is the new people to the workforce, another is transitional workers (changing jobs) and finally there are those that are laid off or fired.

Furthermore unemployment is a status - and it can lapse and no longer be counted.

 

Good news for people who want to invest in American real estate

 

I appreciate the optimism, but when you consider a dollar index drop like we've had and the largest 12 month real estate decline - ever - the term "trying to catch a falling knife" comes to mind.

 

The multiplier effect of unemployment on subprime mortgages may lead to another Great Depression.

There is an existing 12 months of supply of homes. This suggests price declines of around 5% in 2008 Q2. Of 129.3 Million Homes in the US., 18.5 Million are Vacant. High unmemployment in California is causing 1000 forclosures per day. Many morgages were made with "piggyback" second loans that borrowers used to cover down payments. At the end of 2007, there were approx. 5.6 million homes with negative equity.

This is bound to set the stage for more bank failures. Some banks are already in trouble. If housing prices decline an additional 10% in 2008, the number of homeowners with no equity will rise to 10.7 million.

 

Man, I think we're in it.

 

Difference in my fairly long life is the issue of housing. The past recessions were not fostered by housing. This one is to a large extent. Recessions meant less food on the table, but you had a table. Recessions meant no improvements on your home, but you had a home.

Depression for so many meant losing their homes. Ring any bells?