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Getbig Main Boards => Politics and Political Issues Board => Topic started by: shootfighter1 on November 25, 2008, 12:55:06 PM
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I have heard a few more politicians discussing the flat tax recently. So...what if everyone above the poverty line paid 18-25% of their wages in tax to the federal gov. With a flat tax, there are no deductions so creative accountants could not work their magic for the super rich. Some experts say that a flat tax would bring in more federal revenue and still be fair to the poor because most plans would only tax above the poverty line.
http://www.heritage.org/Research/Taxes/bg1866.cfm
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I have heard a few more politicians discussing the flat tax recently. So...what if everyone above the poverty line paid 18-25% of their wages in tax to the federal gov. With a flat tax, there are no deductions so creative accountants could not work their magic for the super rich. Some experts say that a flat tax would bring in more federal revenue and still be fair to the poor because most plans would only tax above the poverty line.
http://www.heritage.org/Research/Taxes/bg1866.cfm
It's a fair system and simple.
Absolutely ZERO deductions and ZERO tax credits.
Everyone pays the same percentage (unless you're under the poverty line).
The tax form would be as big as a 3x5 index card. That should make all the tree huggers happy due to all the trees that would be saved.
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I am for it. Finally get the people on welfare to contribute to society instead of being leeches.
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It's a massive tax hike on the poor and a massive tax cut for the wealthy.
Is it an income tax or a consumption tax?
The Heritage Foundation is garbage. Daniel Mitchell is insane.
I'll look at the proposal later. It's probably the same shit repackaged--full of promises that just don't add up.
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It's a massive tax hike on the poor and a massive tax cut for the wealthy.
Is it an income tax or a consumption tax?
The Heritage Foundation is garbage. Daniel Mitchell is insane.
I'll look at the proposal later. It's probably the same shit repackaged--full of promises that just don't add up.
Decker, I can always count on you to rail against the flat tax. ;)
It's a much fairer system since it does not penalize income earners for being successful. There would be zero tax credits and zero deductions and more money would be pumped into the economy since people would have more disposable income to buy more useless crap they don't need.
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Decker, I can always count on you to rail against the flat tax. ;)
It's a much fairer system since it does not penalize income earners for being successful. There would be zero tax credits and zero deductions and more money would be pumped into the economy since people would have more disposable income to buy more useless crap they don't need.
Securing the ability to pay, i.e., to pay without sacrificing the necessities/quality of life, is one of the reasons a flat tax should fail. If you define fairness along those lines, the flat tax is not very good as either an income tax or a consumption (natl. sales) tax. Which people would have more disposable income? The rich? They already have that. The poor would end up paying more. Most flat tax plans I've seen have a rate between 19-23% (consumption flat taxes are 30+%). How is that not a crushing tax increase on the poor?
It's not a revenue neutral tax. The government would take a huge hit in tax revenue. Maybe we can cut the defense budget in half to help pay for this shortfall?
Also all lobbyists will disappear from planet earth, giving up in the face of the uncorruptable flat tax. It's goodness washes over all.
Oh there are the promises of good things and infinite growth. And always, the supply side wish fulfillment saves the day for these dubious scams.
No thanks, I'll stick with what we got.
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Securing the ability to pay, i.e., to pay without sacrificing the necessities/quality of life, is one of the reasons a flat tax should fail. If you define fairness along those lines, the flat tax is not very good as either an income tax or a consumption (natl. sales) tax. Which people would have more disposable income? The rich? They already have that. The poor would end up paying more. Most flat tax plans I've seen have a rate between 19-23% (consumption flat taxes are 30+%). How is that not a crushing tax increase on the poor?
I define fairness as everyone paying the same percentage and why should it be 19-23 percent? Why do we have to give up so much to a government that has proven time and time again it spends the people's money poorly? People should not be penalized on success. Robbing Peter to pay Paul is still theft no matter now pretty a spin the far left wants to put on it.
It's not a revenue neutral tax. The government would take a huge hit in tax revenue. Maybe we can cut the defense budget in half to help pay for this shortfall?
I have no problem with the government taking a big hit in tax revenue. They could stand to learn some fiscal discipline. I'd also have no problem with big cuts to the defense budget. We should not play Team America "World Police". There are a lot of cuts to the budget that can be made.
Also all lobbyists will disappear from planet earth, giving up in the face of the uncorruptable flat tax. It's goodness washes over all.
Lobbyists going away is a bad thing?
Oh there are the promises of good things and infinite growth. And always, the supply side wish fulfillment saves the day for these dubious scams.
No thanks, I'll stick with what we got.
The IRS accepts checks, Decker. You can always send them more money if you think you're not paying enough.
Happy Thanksgiving, buddy.
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It's a massive tax hike on the poor and a massive tax cut for the wealthy.
Is it an income tax or a consumption tax?
The Heritage Foundation is garbage. Daniel Mitchell is insane.
I'll look at the proposal later. It's probably the same shit repackaged--full of promises that just don't add up.
Holy shit...
You mean the 'poor' having to contribute their fair share is not a good thing??
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I define fairness as everyone paying the same percentage and why should it be 19-23 percent? Why do we have to give up so much to a government that has proven time and time again it spends the people's money poorly? People should not be penalized on success. Robbing Peter to pay Paul is still theft no matter now pretty a spin the far left wants to put on it.
That's the rate at which the tax becomes revenue neutral...allegedly. It's an argument dependent on the magic of supplyside economics--a thoroughly discredited junk science.
I have no problem with the government taking a big hit in tax revenue. They could stand to learn some fiscal discipline. I'd also have no problem with big cuts to the defense budget. We should not play Team America "World Police". There are a lot of cuts to the budget that can be made.
Defense spending is about as corrupt and wasteful as any I've seen. That would be #1 on my list.
Lobbyists going away is a bad thing?
No, they won't go away. The will have the flat tax twisted to fit their ends
The IRS accepts checks, Decker. You can always send them more money if you think you're not paying enough.
Happy Thanksgiving, buddy.
Same to you Bud. Enjoy your day off. I wonder if the NFL games will suck again this year. As for the IRS, I can't do it alone. Paying one's taxes to support our great country is about as patriotic a thing you can do. And I'm frickin Captain America on that one.
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Holy shit...
You mean the 'poor' having to contribute their fair share is not a good thing??
Isn't it enough that the poor pay the same payroll tax as the rich? Those payroll dollars fund the IRaq disaster, the corporate bailouts etc.
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It isn't a direct tax to the poor as people under the poverty line wouldn't pay it. This progressive tax system has also been proven to be wasteful, expensive, and punitive(to everybody).
Second, a flat tax is different than the fair tax as was discussed before. I would like to see more info on this proposal as I'm a supporter of some sort of flat/fair tax hybrid. This progressive system we have just isn't cutting it.
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It isn't a direct tax to the poor as people under the poverty line wouldn't pay it. This progressive tax system has also been proven to be wasteful, expensive, and punitive(to everybody).
Second, a flat tax is different than the fair tax as was discussed before. I would like to see more info on this proposal as I'm a supporter of some sort of flat/fair tax hybrid. This progressive system we have just isn't cutting it.
So if the flat tax is an income tax, the poor are exempt? The poor pay taxes right now. How does the flat tax remain revenue neutral if people aren't paying it and the rich get a healthy tax cut? How about a flat national sales tax? How do the poor avoid paying that tax?
The Fair Tax is a scam pushed by 'grass roots' millionaires from Houston.
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Under the poverty line Decker, not everybody else. Just because you are "poor" does not exempt you from at least paying your part. I don't understand this defense of the poor. If you enjoy the services provided by the government, then you pay your share of those taxes.
I still don't think the Fair Tax is a scam...like I have said before I have read a couple of books on the issue...while not perfect and I by no means agree with it 100%, it is still better than what we have now. Also, it is at least a solution to a problem. The Fair Tax is a well thought out plan that can make a difference. What do you propose?
So because it comes from self made millionaires then the plan is a scam?
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The poor would get a better deal under the flat tax. no taxation at all at or under the poverty line. People making $40,000/yr would pay $8,000 in fed tax. People making $500,000 would pay $100,000 in tax. Why is that not fair? People making less than $10,500/yr pay no taxes.
I wonder what % the super-rich actually pay. If everyone paid a 20 or 22% flat tax, with no deductions or credits, would the gov really take a big hit on revenue? Possibly not. The super-rich take tons of deductions. Our current tax system rapes the upper middle class.
Steve Forbes has a book our entitled "The Flat Tax Revolution"
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Businesses would save lots of $ on K-1 preparation for owners and individuals would save $ because they wouldn't have to hire people to prepare taxes. Our current system is very wasteful. I don't have the figures, but with all the paperwork, time spent, the huge IRS, and tax preparations, tons of $ is wasted.
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Consumption tax would catch all people who don't report taxes, which is a huge #. It would make immigrants, travelers, criminals, and dishonest people pay their share. My only concern is would it encourage less spending.
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Consumption tax would catch all people who don't report taxes, which is a huge #. It would make immigrants, travelers, criminals, and dishonest people pay their share. My only concern is would it encourage less spending.
Which in turn will encourage more saving. Not a bad thing in my book. There are a lot of factors that obviously need to be considered.
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True, personal saving is wise and I am farily conservative...but spending encourages economic growth. I used to view people with big cars, big houses, and material goods with disdain but I now realize, those people are spreading their wealth and supporting companies, worker's jobs and the economy by buying these things.
The problem is irresponsible people who spend when they should be saving!
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That's the rate at which the tax becomes revenue neutral...allegedly. It's an argument dependent on the magic of supplyside economics--a thoroughly discredited junk science.
Defense spending is about as corrupt and wasteful as any I've seen. That would be #1 on my list.
No, they won't go away. The will have the flat tax twisted to fit their ends
Same to you Bud. Enjoy your day off. I wonder if the NFL games will suck again this year. As for the IRS, I can't do it alone. Paying one's taxes to support our great country is about as patriotic a thing you can do. And I'm frickin Captain America on that one.
Thanks for the constructive feedback. Even though we disagree you still challenge me and make me analyze my position and principles on this matter.
Go Cowboys!!! ;D
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Same here, i appreciate Decker's well thought out responces. Maybe we can get him more to the center one day ;D
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Consumption tax would catch all people who don't report taxes, which is a huge #. It would make immigrants, travelers, criminals, and dishonest people pay their share. My only concern is would it encourage less spending.
I tend to think (and this is just me) that even with a slightly higher consumption tax in lieu of income tax, people would tend to spend more since they would have more disposable income on a regular basis. People are just always gonna want that big TV, SUV, boat, waverunner, whatever else.
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It's a massive tax hike on the poor and a massive tax cut for the wealthy.
Is it an income tax or a consumption tax?
The Heritage Foundation is garbage. Daniel Mitchell is insane.
I'll look at the proposal later. It's probably the same shit repackaged--full of promises that just don't add up.
yeah - it's a suckers gambit. All you have to do is look who supports (as with most stuff) to figure out if it make sense or not.
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Well as is typical with most things concerning taxes...
Those who actually produce want to make it at least fair, and those who consume want to get (steal via forced taxation) as much as they can from others because they themselves don't come even close to holding up their end of society.
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yeah - it's a suckers gambit. All you have to do is look who supports (as with most stuff) to figure out if it make sense or not.
I agree with Decker and Straw man on this.
Flat taxes are not a good form of taxation.
It is much better to have a higher consumption tax.
Followed by a good progressive tax system.
Rebates should be given to low income payers of the consumption tax to ensure that they are not penalized.
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Under the poverty line Decker, not everybody else. Just because you are "poor" does not exempt you from at least paying your part. I don't understand this defense of the poor. If you enjoy the services provided by the government, then you pay your share of those taxes.
I still don't think the Fair Tax is a scam...like I have said before I have read a couple of books on the issue...while not perfect and I by no means agree with it 100%, it is still better than what we have now. Also, it is at least a solution to a problem. The Fair Tax is a well thought out plan that can make a difference. What do you propose?
So because it comes from self made millionaires then the plan is a scam?
I do believe that all citizens should pay taxes so that they are not disenfranchised. And that is happening.
No matter what flat tax proposal I look at, they all come down to covering the costs of government through the 'magic' of supplyside tax cut reasoning. That's why the flat tax plan is a scam. Unlike Bush, many millionaires make their millions b/c they are not stupid. The Houston grass roots people really don't give two shits about this country. They just want more dollars in their grubby little hands.
What do I propose? How about a graded income tax with more brackets? How about killing corporate loopholes that permit 67% of US coporations to pay zero taxes or receive payments from the gov?
There is no magic tax that suddenly makes us all a little richer. Unfortunately, the problem is too much wasteful spending.....that's why taxes are at the rate they are at....trillion dollar bail outs, trillion dollar wars.....
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Consumption tax would catch all people who don't report taxes, which is a huge #. It would make immigrants, travelers, criminals, and dishonest people pay their share. My only concern is would it encourage less spending.
It would encourage black markets and shopping in foreign countries. Why pay an extra 30% on goods if you don't have to pay it? Remember, the Fair Tax proposed by Huckabee also scrapped the IRS so there's no enforcement branch. No way to mark accountability.
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True, black market purchases would go up, that is a problem.
I don't believe in increasing our already progressive taxation system because if penalyzes many upper income families who try to follow the rules. There are many who propose the ultra-rich do not even pay 25% in federal taxes because of all the loopholes, creative accounting and deductions. A flat tax would eliminate all of that.
Taxes were never meant to equalize people. They were meant to pay for government services and programs. I still believe a flat tax without deductions and credits may be reasonable.
The best point is that our gov spends way too much f'n money. Its out of hand. Obama looks to be following in the same footsteps.
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True, black market purchases would go up, that is a problem.
I don't believe in increasing our already progressive taxation system because if penalyzes many upper income families who try to follow the rules. There are many who propose the ultra-rich do not even pay 25% in federal taxes because of all the loopholes, creative accounting and deductions. A flat tax would eliminate all of that.
Taxes were never meant to equalize people. They were meant to pay for government services and programs. I still believe a flat tax without deductions and credits may be reasonable.
The best point is that our gov spends way too much f'n money. Its out of hand. Obama looks to be following in the same footsteps.
The spending is the problem. Give a tax econometrician a goal and he can devise a tax arrangement to meet the need. He can't change gov. spending with his tax arrangement though.
Progressive tax rates make sense b/c they ask those with more money to kick in a little extra. We can't get those amounts from those who need the money for the merest subsistence can we? The ability to pay is a big issue in what fairness means in the tax game.
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It would encourage black markets and shopping in foreign countries. Why pay an extra 30% on goods if you don't have to pay it? Remember, the Fair Tax proposed by Huckabee also scrapped the IRS so there's no enforcement branch. No way to mark accountability.
That isn't entirely accurate by Fair Tax opponents. The plan does not intend to get rid of the IRS, it shrinks the responsiblity, but does not get rid of it. The IRS will still be needed to watch over service companies etc. to make sure they are paying their taxes. There is a way to mark accountability. The plan Huckabee proposed is the very plan that you and I are talking about(Houston millionaires). Not only does the Fair Tax plan call for reducing our corporate tax rate.(As you know is one of the highest in the world) There are so many variables for us to debate that we will still be here when we have grandchildren...the system we have now is just wasteful(beyond what politicians spend) I will reread the books that I have since I see your side of the arguement. When I read them it was before I was as informed as I am now...so now hopefully I will be able to see the bigger picture.
The Flat Tax...regarding income I don't see how that would be punitive as a tax of $500,000 would be more than $50,000 so the people that can pay would still be paying more.
By the way...while we "debate"(I put that loosely) I am learning something here. LOL Imagine that...learning on Getbig.
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That isn't entirely accurate by Fair Tax opponents. The plan does not intend to get rid of the IRS, it shrinks the responsiblity, but does not get rid of it. The IRS will still be needed to watch over service companies etc. to make sure they are paying their taxes. There is a way to mark accountability. The plan Huckabee proposed is the very plan that you and I are talking about(Houston millionaires). Not only does the Fair Tax plan call for reducing our corporate tax rate.(As you know is one of the highest in the world) There are so many variables for us to debate that we will still be here when we have grandchildren...the system we have now is just wasteful(beyond what politicians spend) I will reread the books that I have since I see your side of the arguement. When I read them it was before I was as informed as I am now...so now hopefully I will be able to see the bigger picture.
Scrapping the Code and the IRS is part of both Huckabee's and Paul's fair tax proposals. Here's development in the FT proposal where the IRS is scrapped and replaced with another IRS:
"The Fair Tax Act is designed to replace all federal income taxes (including the alternative minimum tax, corporate income taxes, and capital gains taxes), payroll taxes (including Social Security and Medicare taxes), gift taxes, and estate taxes with a national retail sales tax. The legislation would remove the Internal Revenue Service (after three years), and establish an Excise Tax Bureau and a Sales Tax Bureau in the Department of the Treasury.[16] " http://en.wikipedia.org/wiki/FairTax
I think this matter can be cleared up this way: Taxes do not change gov. spending. There is no magic tax that creates wealth--that's supply side shenanigans. The tax cuts will free up more money to stimulate more business to cause an increase in tax revenues at the lower tax levels. That's just not reality.
The Flat Tax...regarding income I don't see how that would be punitive as a tax of $500,000 would be more than $50,000 so the people that can pay would still be paying more.
By the way...while we "debate"(I put that loosely) I am learning something here. LOL Imagine that...learning on Getbig.
The hardest part about debating this stuff is learning it. I've been analyzing flat tax proposals going back to Bill Archer's consumption tax proposal in the 1990s. Sometimes it'll wear you down but learning is its own reward.
I don't know. I saw that phrase written on the shitter wall in the metro station in Chicago. I memorized it and it sure came in handy today.
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The spending is the problem. Give a tax econometrician a goal and he can devise a tax arrangement to meet the need. He can't change gov. spending with his tax arrangement though.
Progressive tax rates make sense b/c they ask those with more money to kick in a little extra. We can't get those amounts from those who need the money for the merest subsistence can we? The ability to pay is a big issue in what fairness means in the tax game.
This is true.
The biggest problem with government isn't the collection of taxes but instead the amount of waste in their spending.
The problem with cutting spending though is that one persons waste is another's necessity.
An example of this is the bridge to nowhere. I am sure that the Alaskans and businesses that are cut of from the mainland view this bridge as one of the most important projects of there lifetime, while they could care less about the levees in Louisiana. The people in Louisiana would see the opposite. Wile the rest viewed both as wasteful. Now if that town got flooded out instead of the levees breaking you can guarantee that there would have been a large stink about how the bridge was a necessity.
The good news is that both projects will probably be done during the first round of the stimulus spending. Since it is supposed to be infrastructure.
Meanwhile billions go towards space research and yet the ISS is over 8 years behind schedule and billions of dollars over budget.
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The spending is the problem. Give a tax econometrician a goal and he can devise a tax arrangement to meet the need. He can't change gov. spending with his tax arrangement though.
Progressive tax rates make sense b/c they ask those with more money to kick in a little extra. We can't get those amounts from those who need the money for the merest subsistence can we? The ability to pay is a big issue in what fairness means in the tax game.
YES!!!
The current mindset seems to be "If there is a whole in your pocket, you just need to walk faster".
Spend less, and many problems will solve themselves.
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This is true.
The biggest problem with government isn't the collection of taxes but instead the amount of waste in their spending.
The problem with cutting spending though is that one persons waste is another's necessity.
An example of this is the bridge to nowhere. I am sure that the Alaskans and businesses that are cut of from the mainland view this bridge as one of the most important projects of there lifetime, while they could care less about the levees in Louisiana. The people in Louisiana would see the opposite. Wile the rest viewed both as wasteful. Now if that town got flooded out instead of the levees breaking you can guarantee that there would have been a large stink about how the bridge was a necessity.
The good news is that both projects will probably be done during the first round of the stimulus spending. Since it is supposed to be infrastructure.
Meanwhile billions go towards space research and yet the ISS is over 8 years behind schedule and billions of dollars over budget.
I meant the necessities of living--food, clothing or shelter and not really lucrative yet absurd business ventures.
There has to be a way to simplify the meaning of gov. debt and spending so that they are apparent to the ave. guy. Then by definition, gov. spending will be transparent. Then the People can voice their consent on particular pieces of spending. The annual budget is huge....voluminous. This is going to take a maximum effort.
And all of that is predicated on the assumption that once the People see the waste or the excess, they will want to change it.
That or we can just keep going along the way we have been.
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I would argue that its not "a little more". People who earn more pay so much more for the same goods and services at a constant tax rate. So, thats already more than a little more. Having a progressive tax rate makes it a lot more. Obama's and left wing proposals would add even more to the unfairness IMO. Who the hell wants to pay 40% of their money made to the gov to fund their wasteful ways. No one should have to give up nearly half their wealth no matter what they make.
Seems we all agree the gov spends way too much and its a disturbing trend the last decade, that doesn't look like its going to stop.
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I would argue that its not "a little more". People who earn more pay so much more for the same goods and services at a constant tax rate. So, thats already more than a little more. Having a progressive tax rate makes it a lot more. Obama's proposal would add more to the unfairness IMO. Who the hell wants to pay 40% of their money made to the gov to fund their wasteful ways. no one should have to give up nearly half their wealth no matter what they make.
Nobody pays 40% of their total income in taxes. The 39% rate Obama proposes applies to dollars earned in the top bracket only. Only the dollars earned above $357,000 are taxed at the 39% clip. http://taxes.about.com/od/2008taxes/qt/2008_tax_rates.htm
And that's just the nominal tax rate. The effective tax rate can be less.
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I wouldn't mind a progressive tax so much if it was:
1- less progressive
2- Capped tax rate of 25%.
By the time you take federal+state+local+whatever other taxes that are applied, its not hard to have 40% of your earnings taken from you. Thats just too much IMO. I don't think its right for anyone to be taxed more than one quarter of their earnings. If that means the gov has to spend less then they must work with a budget and prioritize (not whats happening now).
Also, there has to be a better way of capturing tax $ from everyone. So many people fail to report income so we are forced to pay more to cover their fraud.
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Thats just federal alone Decker, correct? (39%)
Then we have state and local taxes. Plus payroll taxes, property tax, sales tax, tolls, tarrifs, mandatory licensures, inheritance tax...it goes on and on. When you total all the $ the gov takes from you, its far more than just the federal income tax rate we often talk about.
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Thats just federal alone Decker, correct? (39%)
Then we have state and local taxes. Plus payroll taxes, property tax, sales tax, tolls, tarrifs, mandatory licensures, inheritance tax...it goes on and on. When you total all the $ the gov takes from you, its far more than just the federal income tax rate we often talk about.
State income taxes are fairly flat across the board. Sales taxes are flat.
I'm not arguing that taxes aren't excessive. I think the logic behind the prog. income tax is sound. It should be preserved and I'm glad that you see the wisdom in that.
Spending has to be reigned in. If it were up to me, I think we could get a lot more bang for our buck if the gov. stopped privatizing as many gov. services as possible.
The fed. gov. is a cash cow to private enterprise. The fraud is voluminous.
Here's just some of the military spending fraud: http://www.falseclaimsact.com/common_frauds_defense_contractor.php
Defense contractor fraud remains one of the most active areas of false claims litigation under the Federal False Claims Act. Billions of dollars have already been recovered from defense contractors, largely as a result of qui tam whistleblowers acting under the Federal False Claims Act. Below is a description of some of the more common ways in which defense contractors have tried to defraud the federal government:
Cross-Charging: Cross-charging has been one of the most common types of defense procurement fraud. Cross-charging occurs when a defense contractor improperly shifts costs and expenses from one defense contract to another in order to boost its profits. The United States typically awards one of two types of contracts in defense procurement: (1) the “fixed-price” contract; and (2) the “cost-plus contract.” In a “fixed-price” contract, the government pays the contractor a set price for the delivery of a weapons system or other product, no matter how much it costs the contractor to produce. In a “cost-plus” contract, the government pays the contractor a set price plus a percentage of the contractor’s costs for producing the weapons system or other product. Defense contractors that have both of these types of contracts have a strong financial incentive to shift costs from the “fixed-price” contract to the “cost-plus” contract, and thereby maximize the contractor’s profits. This illegal cross-charging is frequently accomplished by altering records to shift employee hours and equipment costs from the “fixed-price” contract to the “cost-plus” contract.
Improper Product Substitution: Defense contracts frequently specify that the contractor use a particular grade, type or quality of product or parts. There are often additional requirements that the parts be new (as opposed to used or refurbished), and that those parts be made in the United States. Defense contractors can often save costs, and maximize profits if they substitute cheaper or substandard parts. If a defense contractor does this without the permission of the government’s contracting officer, it can violate the Federal False Claims Act.
Improper Cost Allocation: In many forms of business, including defense contracting, the key to getting a lucrative private or government contract is often the ability to deliver the product or service at a price less than the competition. Defense contractors that provide products and services to the United States military also sell those products, in some form or another, to government and private businesses around the world. One way that some defense contractors have attempted to secure lucrative contracts from private businesses or governments outside the United States is to improperly allocate or shift costs from those contracts onto the “cost-plus” contracts they have with the United States government. As a result of this scheme, the United States ends up paying for the costs that should be paid by these private businesses or foreign governments.
Worthless or Substandard Products or Services: Due to the volume and complexity of the weapons systems, equipment and products the government purchases for national defense, it is near impossible for the United States Military to perform a quality check on each item it purchases. In many cases, the government relies upon the defense contractor to provide weapons systems, equipment and products that perform as promised in the contract. Although there can be cases of honest mistakes, there also can be instances where the defense contract knew, or was reckless in not knowing, and the products they were delivering would not perform as promised. Such worthless or substandard products can have devastating impact on the men and women of the military that use these items. Moreover, delivering worthless or substandard products or services can, in certain circumstances, violate the Federal False Claims Act.
Inflation or Costs and Charges: In “cost-plus” contracts, the government pays the defense contractor a set price plus a percentage of the contractor’s costs for producing the weapons system or other product. One common form of fraud has been for the contractor to improperly inflate their costs and charges to increase the revenue the company earns from the government. This form of fraud is often accomplished through inflated time records, inflated equipment and materials costs and fake purchase orders.
Violations of the Truth-In-Negotiations Act (TINA): Many of the weapons systems and equipment used by the United States Military are highly specialized and complex. Often times, there is only one company in the world producing that particular weapons system or equipment. The government, therefore, has no choice but to purchase this weapons system or equipment from this single-source supplier. The problem with purchasing from a single-source supplier is that the government does not know if it is paying a fair price, because other competitors are not bidding for the work. The Truth In Negotiations Act (TINA) attempts to prevent this problem by requiring defense contractors to honestly disclose all relevant information about its costs to the government in these types of single-source, no-bid contracts. Despite the requirement of TINA, single-source defense contractor can sometimes be tempted to inflate their costs and expenses because they know that another company will not under bid them for the work, and it is difficult for the government to discover the fraud. Inflating costs and expenses however can be a violation of the Federal False Claims Act.
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State income taxes are fairly flat across the board. Sales taxes are flat.
I'm not arguing that taxes aren't excessive. I think the logic behind the prog. income tax is sound. It should be preserved and I'm glad that you see the wisdom in that.
Spending has to be reigned in. If it were up to me, I think we could get a lot more bang for our buck if the gov. stopped privatizing as many gov. services as possible.
The fed. gov. is a cash cow to private enterprise. The fraud is voluminous.
Here's just some of the military spending fraud: http://www.falseclaimsact.com/common_frauds_defense_contractor.php
Defense contractor fraud remains one of the most active areas of false claims litigation under the Federal False Claims Act. Billions of dollars have already been recovered from defense contractors, largely as a result of qui tam whistleblowers acting under the Federal False Claims Act. Below is a description of some of the more common ways in which defense contractors have tried to defraud the federal government:
Cross-Charging: Cross-charging has been one of the most common types of defense procurement fraud. Cross-charging occurs when a defense contractor improperly shifts costs and expenses from one defense contract to another in order to boost its profits. The United States typically awards one of two types of contracts in defense procurement: (1) the “fixed-price” contract; and (2) the “cost-plus contract.” In a “fixed-price” contract, the government pays the contractor a set price for the delivery of a weapons system or other product, no matter how much it costs the contractor to produce. In a “cost-plus” contract, the government pays the contractor a set price plus a percentage of the contractor’s costs for producing the weapons system or other product. Defense contractors that have both of these types of contracts have a strong financial incentive to shift costs from the “fixed-price” contract to the “cost-plus” contract, and thereby maximize the contractor’s profits. This illegal cross-charging is frequently accomplished by altering records to shift employee hours and equipment costs from the “fixed-price” contract to the “cost-plus” contract.
Improper Product Substitution: Defense contracts frequently specify that the contractor use a particular grade, type or quality of product or parts. There are often additional requirements that the parts be new (as opposed to used or refurbished), and that those parts be made in the United States. Defense contractors can often save costs, and maximize profits if they substitute cheaper or substandard parts. If a defense contractor does this without the permission of the government’s contracting officer, it can violate the Federal False Claims Act.
Improper Cost Allocation: In many forms of business, including defense contracting, the key to getting a lucrative private or government contract is often the ability to deliver the product or service at a price less than the competition. Defense contractors that provide products and services to the United States military also sell those products, in some form or another, to government and private businesses around the world. One way that some defense contractors have attempted to secure lucrative contracts from private businesses or governments outside the United States is to improperly allocate or shift costs from those contracts onto the “cost-plus” contracts they have with the United States government. As a result of this scheme, the United States ends up paying for the costs that should be paid by these private businesses or foreign governments.
Worthless or Substandard Products or Services: Due to the volume and complexity of the weapons systems, equipment and products the government purchases for national defense, it is near impossible for the United States Military to perform a quality check on each item it purchases. In many cases, the government relies upon the defense contractor to provide weapons systems, equipment and products that perform as promised in the contract. Although there can be cases of honest mistakes, there also can be instances where the defense contract knew, or was reckless in not knowing, and the products they were delivering would not perform as promised. Such worthless or substandard products can have devastating impact on the men and women of the military that use these items. Moreover, delivering worthless or substandard products or services can, in certain circumstances, violate the Federal False Claims Act.
Inflation or Costs and Charges: In “cost-plus” contracts, the government pays the defense contractor a set price plus a percentage of the contractor’s costs for producing the weapons system or other product. One common form of fraud has been for the contractor to improperly inflate their costs and charges to increase the revenue the company earns from the government. This form of fraud is often accomplished through inflated time records, inflated equipment and materials costs and fake purchase orders.
Violations of the Truth-In-Negotiations Act (TINA): Many of the weapons systems and equipment used by the United States Military are highly specialized and complex. Often times, there is only one company in the world producing that particular weapons system or equipment. The government, therefore, has no choice but to purchase this weapons system or equipment from this single-source supplier. The problem with purchasing from a single-source supplier is that the government does not know if it is paying a fair price, because other competitors are not bidding for the work. The Truth In Negotiations Act (TINA) attempts to prevent this problem by requiring defense contractors to honestly disclose all relevant information about its costs to the government in these types of single-source, no-bid contracts. Despite the requirement of TINA, single-source defense contractor can sometimes be tempted to inflate their costs and expenses because they know that another company will not under bid them for the work, and it is difficult for the government to discover the fraud. Inflating costs and expenses however can be a violation of the Federal False Claims Act.
The bigger problem is why was government in these business to begin with.
Private business in many cases would have provided adequate services.
The problems in government spinning of business is that many times it creates monopolies owned by people with no interest in the common good.
Another major issue is regulation as can be seen from many government service contracts be cause of unregulated Oligopolies. Like Banking and Oil.
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Good info. I can see that defense spending can be a huge problem, particularly since it is our largest expense.
Where in our budget is the total foreign aid amount? I was listening to a program where an Indian American was talking about how much aid we have given the Pakistanies and how they have been completely unable to control terrorism in their own country (and they have nuclear weapons).