4 ms·

Taxes are fundamentally different from other expenses. I'm not opting to purchase a service (or not, just saving the money) when paying taxes, I'm facing the im

Taxes are fundamentally different from other expenses. I'm not opting to purchase a service (or not, just saving the money) when paying taxes, I'm facing the implication of a gun to my head (the ultimate enforcement of government power). No other expense comes directly from simply how much I earn, and is not compulsory based thereon. If there's going to be deductions at all, the first should be taxes paid to other levels of gov't.

smsm42 9y ago
I do not see how compulsory nature of the expense matters in this particular case. You need to eat to live - should food expenses be deducted? What if you're sick and need to pay for medicine - should that be deducted? You need to be clothed to go on the street - should clothing expenses be deducted? You can find argument for many of those, but ultimately the decision is arbitrary based on preferred policy by state. If the state police would favor improving the clothing situation of the population - you may very well get clothes deduction. Depending on what the government wants to promote or suppress, you may get various policy deductions.
- dragonwriter 9y ago
  > You need to eat to live - should food expenses be deducted? Reasonably necessary ones should be, or a value to cover them rolled into blanket deduction everyone gets, sure. > You need to eat to live - should food expenses be deducted? That's why there is a medical costs deduction. (It only cuts in at costs above 10% of AGI, which is a bit wonky, though.) > You need to be clothed to go on the street - should clothing expenses be deducted? Same answer as for food.
- ctdonath 9y ago
  Income earned for mundane food/clothing/shelter/healthcare costs SHOULD be deductible. That's basically what the poverty line is: the minimum income necessary for basic sustenance in national standard culture. If you're functioning at that level, you shouldn't pay taxes - precisely because you can barely care for yourself & your own, so you shouldn't be compelled to pay for others (with a bureaucracy siphoning off a significant percentage for themselves). Insofar as sales taxes are a thing, all documentable taxes paid should be refunded if your income is below the poverty line[1], and even those above that line should be able to deduct "mundane sustenance" costs including taxes paid. [1] - exactly how the transition from "below poverty line" to "above" should be handled, to mitigate the tax cost transition, will require a bit more thought than this casual comment. Suffice to say we pay representatives to sanely figure out such things.
  - smsm42 9y ago
    > Income earned for mundane food/clothing/shelter/healthcare costs SHOULD be deductible That gets into a rabbit hole pretty quickly. What's mundane? Am I allowed to shop in Whole Foods or only eat at McDonalds? What if I care about my health - should I be penalized by taxes for wanting to eat heathy (and therefore more expensive) food? What if I don't eat a lot but I must buy very expensive clothes because of peculiar set of allergies? Managing all those would make each tax return like a PhD thesis and make handling 300M of those infeasible. > If you're functioning at that level, you shouldn't pay taxes That is what is happening for low income people in US right now. Lowest quintile pays virtually no federal income tax. > , all documentable taxes paid should be refunded if your income is below the poverty line Since it's impossible to prove who bought certain thing, this would be huge motivation for abuse. Do you want to pay 10% sales tax on $100K car or pay a poor person $500 and have them "buy" that car, get the tax refunded and save $10K? Of course, you say, there are title records. For cars. Which need now to be checked (welcome another thousand of government employees, with their salaries, pensions, etc.). And how many expensive things don't even have formal ownership registration? These things get very complex and expensive to handle very quick. > That's basically what the poverty line is Poverty line is usually defined as percentage of median income. This is largely arbitrary and handwavy, and used because people need to use something. But it's a flimsy base for the tax policy. > exactly how the transition from "below poverty line" to "above" should be handled, This is called "poverty trap". It's a well-known phenomenon, especially in a welfare state. > Suffice to say we pay representatives to sanely figure out such things. We do pay them, and pay them very well, but their delivery on the "sane" part is very short of the desired, so far.
    - dragonwriter 9y ago
      > Poverty line is usually defined as percentage of median income. Not in the US. The main US measure is based on three times the cost established for a ”minimun food diet” in 1963, adjusted by the standard inflation measure (CPI-U) since then.

smsm42 9y ago

I do not see how compulsory nature of the expense matters in this particular case. You need to eat to live - should food expenses be deducted? What if you're sick and need to pay for medicine - should that be deducted? You need to be clothed to go on the street - should clothing expenses be deducted? You can find argument for many of those, but ultimately the decision is arbitrary based on preferred policy by state. If the state police would favor improving the clothing situation of the population - you may very well get clothes deduction. Depending on what the government wants to promote or suppress, you may get various policy deductions.

dragonwriter 9y ago
> You need to eat to live - should food expenses be deducted? Reasonably necessary ones should be, or a value to cover them rolled into blanket deduction everyone gets, sure. > You need to eat to live - should food expenses be deducted? That's why there is a medical costs deduction. (It only cuts in at costs above 10% of AGI, which is a bit wonky, though.) > You need to be clothed to go on the street - should clothing expenses be deducted? Same answer as for food.
ctdonath 9y ago
Income earned for mundane food/clothing/shelter/healthcare costs SHOULD be deductible. That's basically what the poverty line is: the minimum income necessary for basic sustenance in national standard culture. If you're functioning at that level, you shouldn't pay taxes - precisely because you can barely care for yourself & your own, so you shouldn't be compelled to pay for others (with a bureaucracy siphoning off a significant percentage for themselves). Insofar as sales taxes are a thing, all documentable taxes paid should be refunded if your income is below the poverty line[1], and even those above that line should be able to deduct "mundane sustenance" costs including taxes paid. [1] - exactly how the transition from "below poverty line" to "above" should be handled, to mitigate the tax cost transition, will require a bit more thought than this casual comment. Suffice to say we pay representatives to sanely figure out such things.
- smsm42 9y ago
  > Income earned for mundane food/clothing/shelter/healthcare costs SHOULD be deductible That gets into a rabbit hole pretty quickly. What's mundane? Am I allowed to shop in Whole Foods or only eat at McDonalds? What if I care about my health - should I be penalized by taxes for wanting to eat heathy (and therefore more expensive) food? What if I don't eat a lot but I must buy very expensive clothes because of peculiar set of allergies? Managing all those would make each tax return like a PhD thesis and make handling 300M of those infeasible. > If you're functioning at that level, you shouldn't pay taxes That is what is happening for low income people in US right now. Lowest quintile pays virtually no federal income tax. > , all documentable taxes paid should be refunded if your income is below the poverty line Since it's impossible to prove who bought certain thing, this would be huge motivation for abuse. Do you want to pay 10% sales tax on $100K car or pay a poor person $500 and have them "buy" that car, get the tax refunded and save $10K? Of course, you say, there are title records. For cars. Which need now to be checked (welcome another thousand of government employees, with their salaries, pensions, etc.). And how many expensive things don't even have formal ownership registration? These things get very complex and expensive to handle very quick. > That's basically what the poverty line is Poverty line is usually defined as percentage of median income. This is largely arbitrary and handwavy, and used because people need to use something. But it's a flimsy base for the tax policy. > exactly how the transition from "below poverty line" to "above" should be handled, This is called "poverty trap". It's a well-known phenomenon, especially in a welfare state. > Suffice to say we pay representatives to sanely figure out such things. We do pay them, and pay them very well, but their delivery on the "sane" part is very short of the desired, so far.
  - dragonwriter 9y ago
    > Poverty line is usually defined as percentage of median income. Not in the US. The main US measure is based on three times the cost established for a ”minimun food diet” in 1963, adjusted by the standard inflation measure (CPI-U) since then.