IT Growth: Exponential No More

BreadMan writes "The Economist has has an article about growth in the IT industry coming off a period of unsustainable growth. Compares IT to growth industries of the past like railroads and automobiles."

Comments

Re:Bla Bla Bla

[Amon Re]

Mod this up, it isn't entirely offtopic.

Re:Lots of problems with this

[hagbard5235]

I'd love to answer your questions to the best of my ability. Whenever possible I'll try to provide references. When I refer to HR 25 ( the actual bill embodying the proposal ) you can check it out at thomas.loc.gov. Follow the link and type in "H.R. 25" in the "Search by Bill Number" box.

You asked:

1) The site repeatedly emphasises that you will now take home 100% of your paycheck - no taxes deducted. How does the split between federal and state taxes work? Are all states now required to take thier income solely from sales tax, and is the percentage they get fixed? Either way, is this an infringement on state's rights?

There is no requirement in the legislation ( HR 25 ) that the states do anything with regard to how they choose to tax their residents. You are correct that to do so would be an infringement on states rights. There are provisions in the bill though to allow states to voluntarily perform the sales tax collections if their sales taxes are in conformance with the retail sales tax in HR 25, and it allows them to keep 0.5% of the take for their troubles. I suspect this would tend to encourage states that do have sales taxes to bring them into conformance, and to perform the collections.

So in summary, you would only keep 100% of your paycheck if you live in a state/locality that doesn't level an income tax of its own.

2) How does this affect retirement/pension plans other than social security? Personally, I don't pay into social security, but I do pay into a state retirement plan which is IMO much better; would this plan force me to switch to social security?

HR 25 in no way forces you from your state retirement plan into social security. To the extent that your pension income would have been taxed as income by the federal government before ( I think all such pensions are taxed as income currently, I know military pensions are ) it would not be so taxed now.

3) According to the website, everything would be taxed at 23% (with a refund for "necessities"). Given that, as a college student on a very limited income, I pay almost no taxes, wouldn't I be voting to have less money if I approved this?

First, the refund for 'necessities' is a simple refund of 23% of the poverty line for your household size. For a single person the poverty line is about $8000 ( I'm pulling this from memory, but it's close). So as a household of one you'd get back:

$8000*0.23 = $1840 per year

$1840 per year / 12 months = $153.33 per month

So you'd only be paying sales tax on every dollar beyond about $8000 ( the taxes on the first $8000 you spend having been refunded to you ). Please also keep in mind that you're college tuition is exempt from the Fair Tax ( education is the only exempted retail good/service exempted). I don't know how much you spend a year, or how you get the money you spend, but if you earn it, you pay 7.5% from the first dollar for payroll taxes ( even if you owe no income tax ). So you're break even point as a single person ( just on payroll taxes ) is $11870.96:

$11870.96 * 0.075 = $890.32 payroll tax

or

( $11870.96 - $8000 )* 0.23 = $890.32 Fair Tax

So if you're making less than $11870.96 ( or so, keep in mind the $8000 is close but a little low ) you'll do better just based on not paying payroll taxes ( never mind income tax ).

4) Wouldn't this increase the rate at which society fractures into the "haves" and "have-nots", as those earning {m/b}illions would have almost none of it taxed unless they choose to spend?

This is an interesting question, and one that it's very hard to give a definitive answer to. Clearly someone with a very high income who doesn't spend will pay less taxes in this instance. However folks in the middle class who are working hard and saving rather than consuming in an attempt