Originally posted by: Dissipate
Originally posted by: ironwing
Originally posted by: Dissipate
Food is essential but last time I checked I didn't need to be taxed and have some government bureaucracy dole it out to me though.
Bet? You do know that the US food supply is run on a socialist system don't you? Without taxpayer subsidies the system would collapse.
There is hardly any human endeavor now that the state doesn't subsidize or interfere with in some way. But the truth is that food is still largely a free market enterprise.
Originally posted by: ironwing
Originally posted by: Dissipate
Originally posted by: ironwing
Originally posted by: Dissipate
Food is essential but last time I checked I didn't need to be taxed and have some government bureaucracy dole it out to me though.
Bet? You do know that the US food supply is run on a socialist system don't you? Without taxpayer subsidies the system would collapse.
There is hardly any human endeavor now that the state doesn't subsidize or interfere with in some way. But the truth is that food is still largely a free market enterprise.
Except for the subsidies to grow the food, store the food, market the food ,ship the food, and if all that doesn't work the gov will outright buy the food or pay the farmers to stop growing it. Plus subsidies for pest eradiation ,ag research, paying farmers to refrain from trashing their own land, rural electification, etc. Agriculture is about the most socialized portion of the US economy.
You can check out some of the direct payments here:
http://www.ewg.org/farm/
Originally posted by: Dissipate
Who needs a government to do something as mundane as run traffic lights? I know I don't need the government to run the lights in my house. I certainly don't need it to run lights for my car.
But in any event, most of the government today is welfare and warfare. Cut those out and the government could subsist on corporate taxes alone. No more income tax, no more sales taxes etc. etc.
Who do you expect to run the traffic lights? Or are you trying to say we don't need traffic lights? Or are you comparing traffic lights to electric service, which BTW is state regulated, and saying that corporation can do all the stuff a government does now? The thing is, yes probably could do with out the state getting into a lot of the economy, but we still need the state in many places. Who exactly will run the military if not the government? That is not really something you want a corporation controlling, they might just sell you to the highes bidder instead of useing their really expensive missiles defending you, or use their weapons to make slaves of you. Who would uphold the laws, or are we talking about anarchy? Anarchy works great if you have population of about 3 people, much over that and anarchy turns amazingly quickly into dictatorship. Maybe we are going to have a pay-per-protection system? That works great, unless, of course, someone steals your money so you can't pay to get it back. Please let me know how your 'no tax' system would work for real issues. I would love not to have to pay taxes, but I also love being a free man. Given the choice, I'll take freedom every time.
Originally posted by: Dissipate
Originally posted by: SMOGZINN
Originally posted by: Dissipate
Who needs a government to do something as mundane as run traffic lights? I know I don't need the government to run the lights in my house. I certainly don't need it to run lights for my car.
But in any event, most of the government today is welfare and warfare. Cut those out and the government could subsist on corporate taxes alone. No more income tax, no more sales taxes etc. etc.
Who do you expect to run the traffic lights? Or are you trying to say we don't need traffic lights? Or are you comparing traffic lights to electric service, which BTW is state regulated, and saying that corporation can do all the stuff a government does now? The thing is, yes probably could do with out the state getting into a lot of the economy, but we still need the state in many places. Who exactly will run the military if not the government? That is not really something you want a corporation controlling, they might just sell you to the highes bidder instead of useing their really expensive missiles defending you, or use their weapons to make slaves of you. Who would uphold the laws, or are we talking about anarchy? Anarchy works great if you have population of about 3 people, much over that and anarchy turns amazingly quickly into dictatorship. Maybe we are going to have a pay-per-protection system? That works great, unless, of course, someone steals your money so you can't pay to get it back. Please let me know how your 'no tax' system would work for real issues. I would love not to have to pay taxes, but I also love being a free man. Given the choice, I'll take freedom every time.
Who do I expect to run traffic lights? Homeowners associations, business associations, private-for profit road companies etc. Just about any entity that doesn't steal from people would do.
National defense is a difficult problem in both theory and practice. I would be one of the first to admit that. But difficult problems do not necessarily require coercion to be solved and the government's solution to the problem (creating a HUGE centralized bureaucracy) is far far from perfect.
A lot of your questions can be answered in this book here: For a New Liberty. Click the chapters on The Public Sector II and The Public Sector III.
As for national defense check out the book (downloadable in .PDF) The Myth of National Defense. Check out Chapter 9.
A couple of recent articles as well:
The Possibility of Private Law
and
But Wouldn't Warlords Take Over?
Originally posted by: piasabird
If you have a period during which money is tight and people quit buying cars and houses and other big ticket items what happens to this tax boon from sales. Seems like it would amplify the pain felt during a recession.
Originally posted by: ToeJam13
I like the idea of a simple tax code. However, a national sales tax or a value added tax is still more complicated than an income tax. It can also be abused.
The problem with a sales tax is that you have trillions of transactions per year, a difficult thing to audit. Furthermore, it can be bypassed by purchasing items outside of the tax authority. You?ll begin to see the rich buying even more of their boats, jewelry and other luxury items outside of the States. Others will turn to Canadian or Mexican mail-order shop, thanks in part to NAFTA.
A sales tax is also more aggressive towards the poor. The submitter?s idea of a monthly check for each citizen to cover tax for basic needs is a nice idea, but too easy to abuse. How about a cheque for my dog or 3-year old niece?
The only good thing a national sales tax would fix is taxing income that might normally go unreported, such as youth jobs, tips and gains from illegal activities. However, that fix would be largely countered by the non-commercial resale market, which can never properly be taxed.
I would actually like to see both sales taxes and service taxes abolished. The price you see is what you get. It?s far too easy to create new sales or service taxes that affect people who have little say over them.
Ever rent a car or stay in a hotel when on vacation? You?ve just been hit with a tax that you never voted on, yet affects you. Taxation without representation.
Taxes should also be incredibly easy to calculate. For filers, taxable income starts at four times the poverty line for your status (single/joint). Additional dependants will raise the minimum taxable income up by the poverty line threshold placed by additional persons ($3,140 in 2004). Money beyond the taxable threshold would be taxed on a two-tier level. The second tier would begin at fifty times the poverty line.
Using 2004 figures, here is how it would come out:
[*]Single person: $8,980 poverty line - $35,920 income tax threshold
[*]Joint couple: $12,120 poverty line - $48,480 income tax threshold
[*]Additional dependant: income tax threshold increases $3,140
[*]Second tier: $449,000
Income over the income tax threshold but under the second tier calculated at x%
Income over the second tier calculated at y%
If you simultaneously reside in multiple states, your state tax for each locale is calculated and then divided by the number of states you claim residence to. So if I lived in State-A and State-B with 20% and 10% state taxes respectively, I?d only pay State-A 10% and State-B 5%, for an effective tax rate of 15%.
Originally posted by: BoberFett
This would place an undue burden on the average American.
Originally posted by: EatSpam
Originally posted by: BoberFett
This would place an undue burden on the average American.
That's the general idea. There are many people, not all of them rich, that believe the rich pay far too many taxes and are burdened by the system.
I don't know about you, but I somehow doubt Bill Gates, Michael Dell, Paris Hilton, etc are truly burdened by any financial hardships.
Originally posted by: BoberFett
Originally posted by: EatSpam
Originally posted by: BoberFett
This would place an undue burden on the average American.
That's the general idea. There are many people, not all of them rich, that believe the rich pay far too many taxes and are burdened by the system.
I don't know about you, but I somehow doubt Bill Gates, Michael Dell, Paris Hilton, etc are truly burdened by any financial hardships.
I feel that the rich in this country do already pay more than they should under the current system. A progressive tax system such as the one we currently have penalizes success.
First, stop using the obscenely rich to justify income confiscation. Everyone always brings up Bill Gates when they talk about a progressive tax. Yeah, you're right. Bill Gates doesn't have to worry about how he's going to pay the phone bill every month. But the number of people who have that kind of wealth are a tiny minority of the people being taxed into oblivion. The 33% tax bracket starts at $150K. Do you really consider a couple with two working parents and a few kids bringing home $150K per year combined to be insanely wealthy?
What would be fair is a flat tax that covers all personal income, interest income, divdends, capital gains, etc. with a decent allowance per taxpayer and dependant. I would probably also support some combination of that flat income tax along with a small federal sales tax. It makes no sense that people are allowed to live in this country without paying any tax, even a token amount.
Originally posted by: BoberFett
Originally posted by: EatSpam
Originally posted by: BoberFett
This would place an undue burden on the average American.
That's the general idea. There are many people, not all of them rich, that believe the rich pay far too many taxes and are burdened by the system.
I don't know about you, but I somehow doubt Bill Gates, Michael Dell, Paris Hilton, etc are truly burdened by any financial hardships.
I feel that the rich in this country do already pay more than they should under the current system. A progressive tax system such as the one we currently have penalizes success.
First, stop using the obscenely rich to justify income confiscation. Everyone always brings up Bill Gates when they talk about a progressive tax. Yeah, you're right. Bill Gates doesn't have to worry about how he's going to pay the phone bill every month. But the number of people who have that kind of wealth are a tiny minority of the people being taxed into oblivion. The 33% tax bracket starts at $150K. Do you really consider a couple with two working parents and a few kids bringing home $150K per year combined to be insanely wealthy?
What would be fair is a flat tax that covers all personal income, interest income, divdends, capital gains, etc. with a decent allowance per taxpayer and dependant. I would probably also support some combination of that flat income tax along with a small federal sales tax. It makes no sense that people are allowed to live in this country without paying any tax, even a token amount.
You didn't read the rest of the paragraph: "If the government gives "prebates" to offset this effect on the poor, it merely moves the greatest burden farther up the income scale, to the lower middle class. Either way, the wealthy pay the least in proportion to their income." It is a regressive class.Originally posted by: Whoozyerdaddy
Not true. Under the Fair Tax plan those with the lowest income would be completely free from taxation. Most tax cuts don't affect the poor because the poor don't pay income tax. They do, however, pay social security and medicare taxes. Under the Fair Tax plan they wouldn't even pay that. So now the poor have more money to spend on goods and services (that don't cost any more than they do now - even with the tax figured in) and with the prebate check they don't even pay the sales tax. This plan is more than fair to the poor.Originally posted by: Bowfinger
Sales taxes are fundamentally regressive. They place the greatest burden on people with the lowest incomes because they are the ones who have to spend the greatest percentage of their income. If the government gives "prebates" to offset this effect on the poor, it merely moves the greatest burden farther up the income scale, to the lower middle class. Either way, the wealthy pay the least in proportion to their income.
The point is these cheats bleed revenue out of the system. Suddenly, 23% isn't enough, so it increases to 25%, or even 30%. Now new goods cost more than they did before. The dishonest are saving lots of money; the honest are paying more.Come on... There have been tax cheats as long as there have been taxes. Five minutes after the world's first tax was levied there was a guy figureing out how to get around it. No tax plan will ever stop tax cheats. Tax evasion is not a reason to not try something else.Another problem with such a steep sales tax is it encourages people to evade taxes. The higher the price of an item, the more incentive there is to evade the sales tax. We already see this today on cigarettes, for example, where bootlegging is common and people in high-tax states slip across the border into lower-tax states to buy their fix. This will be magnified a hundred-fold when you start talking serious dollars.
With a guaranteed 10% to 15% margin? That's big money. It will happen all the time.See above about tax cheats. And relly, in an $11 trillion economy, how often is that going to happen?We would also see a boom in bartering, not just to evade taxes initially, but also as a business model. For example, Shady Guy A trades a new, $10K retail diamond ring to Shady Guy B for a new, $10K plasma TV. Both "open" the items, then sell them as used, tax-free, for $11K -- above the normal retail price, but below the after-tax price. Each makes an extra $1,000 (above the original retail profit) by gaming the tax system.
I don't buy it. Regardless of whether new goods cost effectively the same as before -- a premise I don't really buy, but let's go with it for now -- the fact is new goods will now cost about 23% more relative to the price of used goods. This will inevitably shift purchasing patterns to more used and illicit goods, and fewer new goods. Thanks to supply and demand, the cost of used & illicit goods will rise, but the equilibrium point will still be more favorable to used (i.e., non-taxed) goods compared to the balance today. This drop in new goods sales will lead to production cutbacks and reduced employment.Let's not get too doom and gloom here. First, right now, on average 22% of every dollar you spend on a retail purchase or service goes to the IRS. By eliminating all federal tax from the business model, prices would efectively drop by 22%. (There are real world examples that show this is not only true, but that it happens very fast) Now, add in a 23% inclusive sales tax and you are right back where you started. New goods become no more expensive to the consumer than they were before the tax. Add to that the fact that people have more money to spend because they aren't paying incoe or payroll taxes and the items become, in effect, cheaper.In fact, now that I think about it, such a steep sales tax would hurt retail sales in general, and would probably damage the economy. Used goods would suddenly jump in value by 23% compared to new goods. There would be a surge in demand for used goods, and a corresponding drop in demand for their new counterparts. Retailers could justifiably complain about government interference in the free market. Americans would become less wasteful, a good thing in concept, except business depends on wasteful consumption. Production would drop due to lower demand, unemployment would increase, and the global economy would slump.
As for used goods being more popular than new goods. We have a flourishing used car market and a used home market right now. Bearing in mind that the sales tax doesn't increase the fianal cost of an item and you effectively have created a market where new goods are at no more disadvantage than they were prior to the tax.
First, the average person does NOT have more money to spend. To suggest otherwise requires we somehow get something for nothing. In fact, if they're planning to collect enough sales tax to balance the budget, the average person must have less to spend. That's the only way the numbers can add up.See above. The tax doesn't raise prices and people have more money to spend. How does this encourage theft?Finally, such a steep sales tax would also increase the incentive to steal and smuggle by 23%. There would be a surge in demand for off-the-books, tax-free illicit goods, with a corresponding increase in the number of enterprising capitalists willing to obtain them. One would expect to see a resurgence in organized crime, and an (ineffective) government "War on Theft" analagous to our current "War on Drugs". Welcome to Prohibition Release 3.0.
I agree with that. I don't think that benefit begins to outweigh the negatives of a sales tax.I think it's better to start over fresh. The thing with income tax (specifically the withholding part of it) that makes it so powerful to those in charge is that most people don't even know what they pay in income tax. If you asked 100 people how much they paid in income tax last year most of them would tell you they didn't pay anything.. They got a refund! Aaack. When people don't even know how much they are paying politicians can jack the system six ways from sunday and nobody will even notice.No thanks. I agree the income tax is a convoluted mess, terribly flawed, rife with loopholes for every special interest under the sun. It is, however, fundamentally the right approach. Much better to fix it than replace it with a fundamentally flawed system (which in a few years would be equally convoluted and rife with loopholes for special interests).
With a sales tax, the tax is printed right there at the bottom of the receipt. Everybody sees it when thy buy anything. History has proven that when their tax is placed right in front of their face, the people demand accountability.
I don't buy into trickle down economics. History has shown as that the guys at the top will glady lay off thousands of workers if it means a couple million in their pockets.Originally posted by: 5LiterMustangThink about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?
Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?
Originally posted by: EatSpam
Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?
Bill Gates isn't hurting for money. If he's not the world's richest man, he's in the top five. Employees are a pre-tax business expense, so if Bill Gates got a tax cut to increase his vast personal wealth, I doubt he'd have a change of hiring habits. If Bill Gates got another tax cut, he'd probably just buy more stock or another house or do nothing with it at all.
I have to ask though: Why do you think the rich guy needs more money so he can invest and create jobs? By definition, rich guys have an abundance of wealth, and with it, excellent credit. Why doesn't the rich guy just open or expand a business with his existing abudance of wealth and excellent credit? Why should he? Where's the profit? How are the middle and lower classes going to find money to make his expansion worthwhile? The rich guy might as well stick his tax cut in the stock market. This is what I see as the falacy of Supply-Side economics.
Contrast to the alternative. Give the tax cut entirely to the middle and lower classes. The lower and middle classes spend lots of money - if you give them more, they'll spend more. They don't have this abundance of extra funds that the rich guy does - they have more unfulfilled wants. In this case, what does the rich guy do? He uses his existing abundance of wealth and excellent credit and opens or expands his business because he wants some of that money that the lower and middle class have. Makes more sense in my head.
Originally posted by: EatSpam
Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?
Bill Gates isn't hurting for money. If he's not the world's richest man, he's in the top five. Employees are a pre-tax business expense, so if Bill Gates got a tax cut to increase his vast personal wealth, I doubt he'd have a change of hiring habits. If Bill Gates got another tax cut, he'd probably just buy more stock or another house or do nothing with it at all.
I have to ask though: Why do you think the rich guy needs more money so he can invest and create jobs? By definition, rich guys have an abundance of wealth, and with it, excellent credit. Why doesn't the rich guy just open or expand a business with his existing abudance of wealth and excellent credit? Why should he? Where's the profit? How are the middle and lower classes going to find money to make his expansion worthwhile? The rich guy might as well stick his tax cut in the stock market. This is what I see as the falacy of Supply-Side economics.
Contrast to the alternative. Give the tax cut entirely to the middle and lower classes. The lower and middle classes spend lots of money - if you give them more, they'll spend more. They don't have this abundance of extra funds that the rich guy does - they have more unfulfilled wants. In this case, what does the rich guy do? He uses his existing abundance of wealth and excellent credit and opens or expands his business because he wants some of that money that the lower and middle class have. Makes more sense in my head.
Originally posted by: Dissipate
Originally posted by: EatSpam
Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?
Bill Gates isn't hurting for money. If he's not the world's richest man, he's in the top five. Employees are a pre-tax business expense, so if Bill Gates got a tax cut to increase his vast personal wealth, I doubt he'd have a change of hiring habits. If Bill Gates got another tax cut, he'd probably just buy more stock or another house or do nothing with it at all.
I have to ask though: Why do you think the rich guy needs more money so he can invest and create jobs? By definition, rich guys have an abundance of wealth, and with it, excellent credit. Why doesn't the rich guy just open or expand a business with his existing abudance of wealth and excellent credit? Why should he? Where's the profit? How are the middle and lower classes going to find money to make his expansion worthwhile? The rich guy might as well stick his tax cut in the stock market. This is what I see as the falacy of Supply-Side economics.
Contrast to the alternative. Give the tax cut entirely to the middle and lower classes. The lower and middle classes spend lots of money - if you give them more, they'll spend more. They don't have this abundance of extra funds that the rich guy does - they have more unfulfilled wants. In this case, what does the rich guy do? He uses his existing abundance of wealth and excellent credit and opens or expands his business because he wants some of that money that the lower and middle class have. Makes more sense in my head.
If that makes sense in your head, I feel sorry for you.
Originally posted by: Dissipate
Originally posted by: EatSpam
Originally posted by: 5LiterMustang
Think about what bill gates could do if his personal and business money wasn't taxed at 40+ percent. How many more employees would he have? How much more could he pump into the economy witht hat money?
Bill Gates isn't hurting for money. If he's not the world's richest man, he's in the top five. Employees are a pre-tax business expense, so if Bill Gates got a tax cut to increase his vast personal wealth, I doubt he'd have a change of hiring habits. If Bill Gates got another tax cut, he'd probably just buy more stock or another house or do nothing with it at all.
I have to ask though: Why do you think the rich guy needs more money so he can invest and create jobs? By definition, rich guys have an abundance of wealth, and with it, excellent credit. Why doesn't the rich guy just open or expand a business with his existing abudance of wealth and excellent credit? Why should he? Where's the profit? How are the middle and lower classes going to find money to make his expansion worthwhile? The rich guy might as well stick his tax cut in the stock market. This is what I see as the falacy of Supply-Side economics.
Contrast to the alternative. Give the tax cut entirely to the middle and lower classes. The lower and middle classes spend lots of money - if you give them more, they'll spend more. They don't have this abundance of extra funds that the rich guy does - they have more unfulfilled wants. In this case, what does the rich guy do? He uses his existing abundance of wealth and excellent credit and opens or expands his business because he wants some of that money that the lower and middle class have. Makes more sense in my head.
If that makes sense in your head, I feel sorry for you.
So anyone who doesn't buy into your redistributionist policies is "drinking koolaid"? Pathetic. Get over yourself.Originally posted by: EatSpamWell, what's wrong with what I said there? Why am I totally backwards on supplyside econ? Help me drink the koolaid.