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Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. Consumption taxes destroy the middle class by acting as vehicle to transport

by criley2 11y ago

Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. Consumption taxes destroy the middle class by acting as vehicle to transport wealth from the middle to the ultrawealthy, which makes it surprising that people continue to suggest it. Now perhaps a consumption tax combined with a large capital gains tax and inheritance tax -- to keep taxes going in the oligarchs economy AND the regular economy, and prevent capital from being tied up between generations in the least productive way possible, then you might get some of them on board.

clarkmoody 11y ago
What about the consumption taxes we have on the books? Gas tax? Hugely regressive. Wouldn't liberals support additional carbon taxes? Value-added tax? Wouldn't those continue to "destroy the middle class"? What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government) Also interesting how you know better than others how they should arrange their financial lives. Would like to hear your thoughts on the "productive ways" the "oligarchs" could better deploy their capital.
- marknutter 11y ago
  Or cigarettes? Or lottery tickets? Or the AMA penalty?
- skybrian 11y ago
  It depends. If the proceeds from the carbon tax get paid out equally to all citizens (similar to basic income) then it's not regressive.
- dragonwriter 11y ago
  > What about the consumption taxes we have on the books? The broader they are, the more likely liberals are to oppose them, and oppose expanding them. Replacing the progressive income tax system with something regressive isn't something that's going to get support on the left. > Gas tax? Hugely regressive. But very narrow. > Wouldn't liberals support additional carbon taxes? Many liberals support the concept of carbon taxes as a behavior control mechanism, but not as the main way of funding government, and many raise concerns about the regressive impact. But, with them, the goal is to limit the thing being taxed and fund efforts to improve our ability to avoid it, not be the primary funding method for government. > Value-added tax? Virtually all the support I've seen on this in the US is on the right (often competing against flat tax proposals.) > What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government) While the classical middle class (e.g., Marx's petit bourgeoisie) are net holders of assets, the "middle class" as the term is used in modern discussions in the US (which is largely the middle income segment of wage laborers) aren't really net savers.
  - nightski 11y ago
    Having studied the fair tax in a fair bit of depth I can say that it probably would not penalize net spenders. In fact, they would probably be better off. Not only would you have more money to spend, but goods and services would likely cost less. There are numerous reasons for this given in easily accessible sources on the fair tax proposal.
- prostoalex 11y ago
  If you followed recent headlines, tax on sugary drinks has been a subject in Democratic primaries. Even though high-fructose corn syrup has been linked to obesity, diabetes and myriad of other problems related to that, some members of liberal community oppose a consumption tax on sugary drinks on the basis that it hits lower-income families disproportionally http://www.csmonitor.com/Business/Tax-VOX/2016/0430/Bernie-s-case-against-soda-taxes http://www.csmonitor.com/Business/Tax-VOX/2016/0430/Bernie-s... Apparently obesity and diabetes hit lower-income families disproportionally as well http://www.livescience.com/37923-type-2-diabetes-low-income-inflammation.html http://www.livescience.com/37923-type-2-diabetes-low-income-... (who would have thunk), but we can always create a government program to conduct more research on causes.
  - hfsktr 11y ago
    Why is the new tax needed? What are we trying to fund that other taxes don't already cover? Don't we (the government) subsidize HFCS? Wouldn't not doing that raise the prices and not require a tax then? I will oppose a 'sugar' tax because I don't think the government should be deciding what foods I consume, especially when I think taxes should be for raising money. I am aware it's not the full picture and I haven't explained it well but I hope I got a little bit of my view across.
    - mjevans 11y ago
      Maybe we should stop subsidizing unhealthy sugar (because it is in -everything- cheep as a result).
      - hfsktr 11y ago
        I agree with this. Then there would be no need for a new tax right?
    - prostoalex 11y ago
      From the tax simplification point of view you're right. But removing the subsidy would still raise the prices on soft drinks, and affect lower income households disproportionally, so it's a regressive measure as well.
- ori_b 11y ago
  > Wouldn't liberals support additional carbon taxes? With the goal of eliminating carbon use (and through this, eliminating the carbon tax), yes. The key understanding is that destroying the environment is a significantly worse problem than a regressive tax. And destroying the environment also has a highly regressive impact; The impact on livability is not uniform, and people that can afford to relocate will have a much better time of it.
ageek123 11y ago
European countries, which are quite to the left of the US, have much higher consumption taxes than the US. So I don't think it's fair to say it's "crazy to think liberals will EVER support" consumption taxes. They already do.
- dragonwriter 11y ago
  European countries that are quite to the left of the US also tend to have higher (both nominal and effective) income taxes and more sharply progressive income taxes than the US (especially when all taxes on income, including social security taxes, are considered); supporting a consumption tax in such a regime can still leave the aggregate more progressive than the US. What liberals aren't likely to support is replacing the current federal tax system with a consumption tax. Making it much more progressive and including a consumption tax alongside, they might, but probably not (just because that might look like what exists in some more leftish European states, there are path dependencies.)
Grishnakh 11y ago
>Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. I just want to make one glib comment here about liberals and regressive taxes. The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"? I think some liberals make some good points about regressive taxes, but in practice, it seems like the liberals who actually get to power just love them.
- dragonwriter 11y ago
  > The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"? Because the Northeast was also the most heavily developed area of the country before the Interstate Highway System came about with a funding system that made non-toll roads the norm for new limited-access highways (funding rules which have since changed, weakening the financial incentive against new toll roads.) Modern political orientation has little to do with it: outside the Northeast, the people trying to introduce toll roads where they haven't been in the past are conservatives, the people opposing them are liberals.
  - Grishnakh 11y ago
    Ok, but that was well over a half century ago. The liberals have had more than enough time to eliminate these horribly regressive tolls which only hurt working class people, so why haven't they? Why are we still paying ridiculously-high tolls on bridges that are falling apart because they're so old?
- xiaoma 11y ago
  >The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). I sure don't think of the northeast that way. I see it as fairly conservative both in politics and business. One data point is that it wasn't anywhere in the northeast that first legalized weed. It was Colorado and Washington, followed by Oregon and Alaska. Another data point is that people wear jeans or shorts at work in Silicon Valley (or Socal, Oregon, Colorado, etc) whereas they're far more likely to be required to wear suits in the north east. The northeast is very urban, which has some overlapping effects with but is still very different from actually being liberal. Change is mostly driven by the west. It's just that the change reaches the dense cities of the northeast more quickly than the rural areas in between.
AnthonyMouse 11y ago
> Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. Consumption taxes destroy the middle class by acting as vehicle to transport wealth from the middle to the ultrawealthy, which makes it surprising that people continue to suggest it. So the proposal is to combine something like VAT with a basic income. Doing that would cause low income people to have a negative effective tax rate (basic income exceeds taxes), low-middle income people to have a near-zero tax rate (basic income equals taxes), high-middle income people to have a moderate tax rate (taxes exceed basic income by a little) and high income people to have a higher tax rate (taxes exceed basic income by a lot). In what sense is that regressive? It's the purest form of a progressive tax system. It even has a built in social welfare system for low income people. The fallacy which is usually put up against this is that the super rich don't spend as much as they earn. The problem is, that's not how income tax works either. Bill Gates doesn't have to pay tax on the appreciation of Microsoft stock until he sells the shares and he doesn't have to sell the shares until he wants to spend the money. "Super-rich don't pay tax on money they don't spend" is the status quo. And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars.
- dragonwriter 11y ago
  > "Super-rich don't pay tax on money they don't spend" is the status quo. Only if you ignore estate taxes...which FairTax eliminates. For the rich (defined here as anyone with enough wealth that, if they don't spend it down, they will face estate taxes) they either have to realize the gains (and be taxed) and spend down or leave an estate which will be subject to estate taxes, giving them a maximum time window on taxation equal to their lifespan. With "FairTax", which eliminates estate tax and goes to a strict consumption tax, there is no such maximum window. > And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars. Because it also changes the cost structures on which debt is occurred, this only is meaningful as a one-time effect on debts that exist at the time of the transition to a predominantly-consumption-tax system, not as durable feature.
someguydave 11y ago
I perceive the income tax as helping the rich roll rocks on the upper-middle labor class while getting the poor to cheer them on. Most rich don't want competition or independent power bases to develop from bourgeois power bases. Also how is taxing labor in any way liberal?
- thegp 11y ago
  What specifically makes you perceive that? And for your last question: 1. What is your working definition of liberal(positive vs. Negative freedoms)? 2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income.
  - someguydave 11y ago
    >What specifically makes you perceive that? The rates for long-run capital returns and dividends are such that they are very beneficial to owners of capital, and they like to keep it that way. The upper-middle class folks who are working have their labor and ordinary income taxed at increasingly higher marginal rates. The rich often fund demagogues who talk about handouts for the poor while ensuring that "progressive" tax rates remain high on their potential rivals who pay high labor taxes. >1. What is your working definition of liberal(positive vs. Negative freedoms)? Today, I think the word "liberal" means "someone who thinks that the poor should benefit at the expense of the rich, through government coercion" >2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income Why tax income? Why not your bodyweight? Or height? Why not tax consumption? If the answer is "to punish those with high _incomes_" you are in violent agreement with the ultra-rich.

by criley2 11y ago

clarkmoody 11y ago

What about the consumption taxes we have on the books? Gas tax? Hugely regressive. Wouldn't liberals support additional carbon taxes? Value-added tax? Wouldn't those continue to "destroy the middle class"? What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government) Also interesting how you know better than others how they should arrange their financial lives. Would like to hear your thoughts on the "productive ways" the "oligarchs" could better deploy their capital.

marknutter 11y ago
Or cigarettes? Or lottery tickets? Or the AMA penalty?
skybrian 11y ago
It depends. If the proceeds from the carbon tax get paid out equally to all citizens (similar to basic income) then it's not regressive.
dragonwriter 11y ago
> What about the consumption taxes we have on the books? The broader they are, the more likely liberals are to oppose them, and oppose expanding them. Replacing the progressive income tax system with something regressive isn't something that's going to get support on the left. > Gas tax? Hugely regressive. But very narrow. > Wouldn't liberals support additional carbon taxes? Many liberals support the concept of carbon taxes as a behavior control mechanism, but not as the main way of funding government, and many raise concerns about the regressive impact. But, with them, the goal is to limit the thing being taxed and fund efforts to improve our ability to avoid it, not be the primary funding method for government. > Value-added tax? Virtually all the support I've seen on this in the US is on the right (often competing against flat tax proposals.) > What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government) While the classical middle class (e.g., Marx's petit bourgeoisie) are net holders of assets, the "middle class" as the term is used in modern discussions in the US (which is largely the middle income segment of wage laborers) aren't really net savers.
- nightski 11y ago
  Having studied the fair tax in a fair bit of depth I can say that it probably would not penalize net spenders. In fact, they would probably be better off. Not only would you have more money to spend, but goods and services would likely cost less. There are numerous reasons for this given in easily accessible sources on the fair tax proposal.
prostoalex 11y ago
If you followed recent headlines, tax on sugary drinks has been a subject in Democratic primaries. Even though high-fructose corn syrup has been linked to obesity, diabetes and myriad of other problems related to that, some members of liberal community oppose a consumption tax on sugary drinks on the basis that it hits lower-income families disproportionally http://www.csmonitor.com/Business/Tax-VOX/2016/0430/Bernie-s-case-against-soda-taxes http://www.csmonitor.com/Business/Tax-VOX/2016/0430/Bernie-s... Apparently obesity and diabetes hit lower-income families disproportionally as well http://www.livescience.com/37923-type-2-diabetes-low-income-inflammation.html http://www.livescience.com/37923-type-2-diabetes-low-income-... (who would have thunk), but we can always create a government program to conduct more research on causes.
- hfsktr 11y ago
  Why is the new tax needed? What are we trying to fund that other taxes don't already cover? Don't we (the government) subsidize HFCS? Wouldn't not doing that raise the prices and not require a tax then? I will oppose a 'sugar' tax because I don't think the government should be deciding what foods I consume, especially when I think taxes should be for raising money. I am aware it's not the full picture and I haven't explained it well but I hope I got a little bit of my view across.
  - mjevans 11y ago
    Maybe we should stop subsidizing unhealthy sugar (because it is in -everything- cheep as a result).
    - hfsktr 11y ago
      I agree with this. Then there would be no need for a new tax right?
  - prostoalex 11y ago
    From the tax simplification point of view you're right. But removing the subsidy would still raise the prices on soft drinks, and affect lower income households disproportionally, so it's a regressive measure as well.
ori_b 11y ago
> Wouldn't liberals support additional carbon taxes? With the goal of eliminating carbon use (and through this, eliminating the carbon tax), yes. The key understanding is that destroying the environment is a significantly worse problem than a regressive tax. And destroying the environment also has a highly regressive impact; The impact on livability is not uniform, and people that can afford to relocate will have a much better time of it.

ageek123 11y ago

European countries, which are quite to the left of the US, have much higher consumption taxes than the US. So I don't think it's fair to say it's "crazy to think liberals will EVER support" consumption taxes. They already do.

dragonwriter 11y ago
European countries that are quite to the left of the US also tend to have higher (both nominal and effective) income taxes and more sharply progressive income taxes than the US (especially when all taxes on income, including social security taxes, are considered); supporting a consumption tax in such a regime can still leave the aggregate more progressive than the US. What liberals aren't likely to support is replacing the current federal tax system with a consumption tax. Making it much more progressive and including a consumption tax alongside, they might, but probably not (just because that might look like what exists in some more leftish European states, there are path dependencies.)

Grishnakh 11y ago

>Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. I just want to make one glib comment here about liberals and regressive taxes. The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"? I think some liberals make some good points about regressive taxes, but in practice, it seems like the liberals who actually get to power just love them.

dragonwriter 11y ago
> The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"? Because the Northeast was also the most heavily developed area of the country before the Interstate Highway System came about with a funding system that made non-toll roads the norm for new limited-access highways (funding rules which have since changed, weakening the financial incentive against new toll roads.) Modern political orientation has little to do with it: outside the Northeast, the people trying to introduce toll roads where they haven't been in the past are conservatives, the people opposing them are liberals.
- Grishnakh 11y ago
  Ok, but that was well over a half century ago. The liberals have had more than enough time to eliminate these horribly regressive tolls which only hurt working class people, so why haven't they? Why are we still paying ridiculously-high tolls on bridges that are falling apart because they're so old?
xiaoma 11y ago
>The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). I sure don't think of the northeast that way. I see it as fairly conservative both in politics and business. One data point is that it wasn't anywhere in the northeast that first legalized weed. It was Colorado and Washington, followed by Oregon and Alaska. Another data point is that people wear jeans or shorts at work in Silicon Valley (or Socal, Oregon, Colorado, etc) whereas they're far more likely to be required to wear suits in the north east. The northeast is very urban, which has some overlapping effects with but is still very different from actually being liberal. Change is mostly driven by the west. It's just that the change reaches the dense cities of the northeast more quickly than the rural areas in between.

AnthonyMouse 11y ago

> Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. Consumption taxes destroy the middle class by acting as vehicle to transport wealth from the middle to the ultrawealthy, which makes it surprising that people continue to suggest it. So the proposal is to combine something like VAT with a basic income. Doing that would cause low income people to have a negative effective tax rate (basic income exceeds taxes), low-middle income people to have a near-zero tax rate (basic income equals taxes), high-middle income people to have a moderate tax rate (taxes exceed basic income by a little) and high income people to have a higher tax rate (taxes exceed basic income by a lot). In what sense is that regressive? It's the purest form of a progressive tax system. It even has a built in social welfare system for low income people. The fallacy which is usually put up against this is that the super rich don't spend as much as they earn. The problem is, that's not how income tax works either. Bill Gates doesn't have to pay tax on the appreciation of Microsoft stock until he sells the shares and he doesn't have to sell the shares until he wants to spend the money. "Super-rich don't pay tax on money they don't spend" is the status quo. And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars.

dragonwriter 11y ago
> "Super-rich don't pay tax on money they don't spend" is the status quo. Only if you ignore estate taxes...which FairTax eliminates. For the rich (defined here as anyone with enough wealth that, if they don't spend it down, they will face estate taxes) they either have to realize the gains (and be taxed) and spend down or leave an estate which will be subject to estate taxes, giving them a maximum time window on taxation equal to their lifespan. With "FairTax", which eliminates estate tax and goes to a strict consumption tax, there is no such maximum window. > And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars. Because it also changes the cost structures on which debt is occurred, this only is meaningful as a one-time effect on debts that exist at the time of the transition to a predominantly-consumption-tax system, not as durable feature.

someguydave 11y ago

I perceive the income tax as helping the rich roll rocks on the upper-middle labor class while getting the poor to cheer them on. Most rich don't want competition or independent power bases to develop from bourgeois power bases. Also how is taxing labor in any way liberal?

thegp 11y ago
What specifically makes you perceive that? And for your last question: 1. What is your working definition of liberal(positive vs. Negative freedoms)? 2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income.
- someguydave 11y ago
  >What specifically makes you perceive that? The rates for long-run capital returns and dividends are such that they are very beneficial to owners of capital, and they like to keep it that way. The upper-middle class folks who are working have their labor and ordinary income taxed at increasingly higher marginal rates. The rich often fund demagogues who talk about handouts for the poor while ensuring that "progressive" tax rates remain high on their potential rivals who pay high labor taxes. >1. What is your working definition of liberal(positive vs. Negative freedoms)? Today, I think the word "liberal" means "someone who thinks that the poor should benefit at the expense of the rich, through government coercion" >2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income Why tax income? Why not your bodyweight? Or height? Why not tax consumption? If the answer is "to punish those with high _incomes_" you are in violent agreement with the ultra-rich.