8 ms·

This is insane. Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states? I'd love to spend

• efnx 8y ago
  That sounds dangerous.
  • idiocratic 8y ago
    Dangerous in what way? I'm European and baffled by this sentence.
    • cylinder 8y ago
      Americans are deathly afraid of government. It's not just the lower or extreme classes. As you can see it's pervasive even on HN. The irony is that Europe, Australia etc are much less "dangerous" than the US
      • isostatic 8y ago
        Have you seen who they elect?
      • deleted 8y ago
        [deleted]
      • chlvsl 8y ago
        removing danger is not the primary goal lol. better to die a lion than live as a sheep.
        • cylinder 8y ago
          Keep believing you live in a movie, works great for society.
          • chlvsl 8y ago
            I don't live in a movie, but I definitely don't want to remove anything remotely dangerous to my person (see: everything) because it has the capacity for danger.
    • oblio 8y ago
      We have a different mindset and tend to see the state as a big, albeit slow and annoying, institution that's meant to work for us (minus corruption). See Rousseau's "social contract". From what I've noticed Americans tend to lean more towards "state = bad; state = tyranny". There is a certain irony, seeing that bar outright dictatorships (China), the US state is and has been the strongest one for over half a century...
      • miscreanity 8y ago
        The US as a nation was/is strong thanks to its people, not the government. This has been due to the fact that the US Constitution is restrictive - individual freedoms are expressly permitted and functions of the state are explicitly limited. In effect, the government was disciplined as opposed to incredibly overbearing; individuals were allowed to grow, learn and create for themselves instead of relying on government. That system has been attacked from the beginning and the US is rapidly becoming a nation where government replaces the family as social structure. What is now will not always be - the trend is of far greater importance than momentary status.
        • s73v3r_ 8y ago
          "individuals were allowed to grow, learn and create for themselves instead of relying on government." Individuals are not able to do any of that when they're stuck working 3 jobs just to get by, or when they go bankrupt due to a simple medical procedure.
          • miscreanity 8y ago
            Death was more of a concern in the 1800s regarding medical procedures. Multiple jobs just to get by sounds a lot like today yet plenty of people still grow, learn and create.
    • miscreanity 8y ago
      Concentration of power inevitably leads to abuse - the only question is how long it will take until the taxation burden becomes overwhelming. It appears we're fast approaching that point and the next decade will break many Western nations while what are currently considered developing or emerging markets will rise to prominence.
      • oblio 8y ago
        1. US had the longest period of high growth when taxation was "overwhelming" (post-war boom). 2. Several developed countries have "overwhelming taxation", yet quite high economic growth and are among the world's top 10 regarding human development. 3. Developing countries will have to increase their taxation. That's how development works: you get a bigger and more effective state that can offer advanced services reliably. 4. Almost all underdeveloped countries, on the contrary, have weak states that can barely collect taxes.
        • miscreanity 8y ago
          1. There are numerous cyclical factors that affect the productivity of a population. Growth in the US post-WWII was strong enough to offset taxation. Additionally, the US has enjoyed a status of economic core which has helped to prop up the tax regime. However, it is plain to see that has been crumbling since the early 2000s. 2. Name some countries - are they growing more than 10%? 3. Increasing taxation is how the strangulation of a population works, so in that sense you are correct. The state always fails. If it didn't, and taxation "worked", we would be living in a utopia. 4. Weak States that cannot enforce taxation are the ones where the population has freedom to grow without onerous tax burdens and corporate protectionism. A static view of the world assumes taxation is necessary. A nonlinear view recognizes the destruction it causes.
          • oblio 8y ago
            1. Ok. 2. Sustained growth at more than 10% is not realistic, especially for developed countries. I'm from a developing country and turning dirt farmers to office workers consistently will grow your economy by 10%. At some point you're going to run out of dirt farmers. This point is moot. Regarding high, realistic growth (2-3%) for developed countries: Singapore, Sweden. 3. States tend to fail far more often due to external factors. In the modern era that's becoming rarer and rarer as the cost of destabilizing a foreign state generally outweighs the benefits. 4. I'd be very happy if you could show me some examples. Which "weak states" are developed states? I wouldn't call any state in a developed country a "weak state".
    • oever 8y ago
      Germany goes even further. The authorities collect tax for the religious organizations since 1919. If you're a Roman Catholic moving to Germany, suddenly you're faced with 8-9% of extra income tax. https://en.wikipedia.org/wiki/Church_tax#Germany https://en.wikipedia.org/wiki/Church_tax#Germany
      • taejo 8y ago
        8-9% of the income tax. Since income tax is substantially less than 100%, the church tax is substantially less than 8% of income.
        • isostatic 8y ago
          With income tax of say 30%, that's still well over 2% of your income funding a cult? How is that possible?
          • michaelt 8y ago
            People who aren't members of a church-tax-collecting denomination don't have to pay it. So it's entirely voluntary. Much like signing up for Netflix, except more expensive and a slightly different collection mechanism. And if you think that's weird, look at the British "Chancel repair liability"
            • isostatic 8y ago
              That I think comes from various claims to the land which, while freehold, has certain obligations (just like you may have covenants for neighbours to be able to access their land over yours). It was particularly bad until recently, as the obligations were often hidden. They no longer are - if there's an obligation it's right there on the land register, just like covenants, and show up in the standard searches during the conveyancing process. It's effectively a land tax to support a local amenity -- churches are part of the cultural background of British villages. I'd rather a formal land tax system to support all local amenities. A larger concern to me are faith schools.
      • 8y ago
    • boobsbr 8y ago
      It's how it's done in Brazil and it does not work out. States constantly pleading for more money while the Federal Government wants to spend it itself, or gives preferential treatment to certain states, while others languish.
    • efnx 8y ago
      Dangerous because I don’t trust our current federal government to appropriately redistribute those taxes.
• labster 8y ago
  The whole point of a federal government is to decentralize authority. If the taxation power rests with a single authority in the United States, then federalism would be dead and the central government would have all the power. It's not necessarily wrong (though I believe it would be a bad idea), but this is one of those questions where the answer to "Why can't the world be simple?" is "Because the world is complex."
  • cylinder 8y ago
    Works pretty well in Australia.
    • meddlepal 8y ago
      Just because it works in Australia doesn't mean it would work in the US. Different people, different culture.
    • labster 8y ago
      OK, I'll bite. Australia has a population of ~25 million, similar to Texas. So let's work with something of a similar scale to the U.S.: Would you be okay with having all of Australia's taxes being collected by the Commonwealth, and then getting your portion that way?
      • tzs 8y ago
        The population is pretty much irrelevant to scaling for this problem. The relevant parameter is the number of political subdivisions that the national entity would be distributing taxes to, which would be ~50 in the US and ~6 in Australia.
        • tzs 8y ago
          ...to elaborate, population is irrelevant because the national government is going to collect taxes nationwide for itself regardless of whether or not collecting taxes for the states is added to its duties. The "this problem" that we are talking about here is the problem of the national government handling state taxes in addition to national taxes. For this problem the national government is dealing with states, not individuals, and so it is the number of states that it has to deal with that is the main factor affecting complexity and scaling.
• ajdlinux 8y ago
  That's the Australian approach, where the federal government collects all income taxes (courtesy of some interesting legal maneuvering in WW2) as well as sales taxes, leaving the states only able to collect payroll taxes, land taxes, mining royalties and a few other limited types of revenue. All sales tax revenue is 100% distributed back to the states - but it's done under a principle of "horizontal fiscal equalisation" (https://www.cgc.gov.au/index.php?option=com_content&view=article&id=258&Itemid=536 https://www.cgc.gov.au/index.php?option=com_content&view=art...) which means that richer states subsidise poorer states. Income tax is used to cover federal expenditure but also pays for a lot of federal grant money which is paid to the states. In general, the Australian approach to federalism is a lot more federal-heavy than in the US, and some part of that is driven by how the feds have completely taken over most forms of taxation and thus control all the purse strings.
  • BigJono 8y ago
    Shouldn't the fiscal equalisation strategy result in better infrastructure and more incentives for businesses and people to move to smaller states? It seems like the market is focused entirely on Sydney and Melbourne, and it's orders of magnitude more difficult to find a good job elsewhere.
    • ajdlinux 8y ago
      I imagine the answer to that is that it does result in better infrastructure and more incentives to move to smaller states, and if we didn't base our tax policy around HFE then it would be even worse than it is now.
  • consp 8y ago
    While not a federation or federally instituted, this is exactly how it works in the Netherlands. The central government collects income tax, VAT and social security taxes, etc. The local government (e.g. municipalities mostly, provinces sometimes) get grants and spend it. Example: Healthcare is locally instituted by the municipalities/cities ("gemeenten") while the tax (social securities) are collected nation wide together with income tax. Please note that only the executive part is local. The municipalities can also levy taxes but usually only on common goods like sewage, water and on home ownership or equivalent for people who rent. The provinces do the same but it is far less than the central government does.
• toomanybeersies 8y ago
  That's what's done in Australia. I'm not sure of the specifics of how the tax money is doled out, but all my income tax and sales tax goes to the federal government, which then divvies it out to the states. There are additional taxes in some states though, which are collected by the states, such as payroll tax, but I don't see that on my payslip.
• keithpeter 8y ago
  UK: local authorities charge a property tax based on the value of homes determined some time ago. The amount raised is insufficient to cover costs so central government provide a 'revenue support grant' to each of the local authorities in the UK country in question. That money comes from income tax which is paid to the central government in the UK. The formula used to calculate the level of revenue support changes, some would say that the changes are politically based. My feeling is that, given the robust politics that appears to exist in the US, coupled with what again appears to be frequent recourse to litigation between levels of government, you don't want to go down that route.
  • isostatic 8y ago
    Now that Scotland can collect income tax separately, I wonder if we'll start seeing similar anomalies.
• raverbashing 8y ago
  This is how it works pretty much everywhere, state taxes are only for specific things (not income tax). Or at least the states should have a double taxation treaty (but of course that would make sense so it's not going to be implemented)
• boobsbr 8y ago
  It's the approach in Brazil, and it does not work out. States heavily depend on the Federal Government and have to constantly plead for funds. It's a mess, and I guess taking into account the size the of the US, the higher number of states, and a huge difference in their wealth/GDP, the situation will likely repeat itself.
  • taejo 8y ago
    There are anyway US states that are dependent on federal funds: the transfers are just sneakier and less efficient than in places where this is a constitutionally recognized process.
• patrickmay 8y ago
  > Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states? That would give far too much power to a federal government that already far exceeds its constitutional mandate. I suggest the inverse: The federal government should get its funding only from the states. Each state can decide how much to contribute and how to raise the money. That would decentralize power significantly.
  • s73v3r_ 8y ago
    The Articles of Confederation want their failed idea back.
    • patrickmay 8y ago
      It was only a failure if you think a strong federal government is a good idea. I offer the current situation as evidence against that.
      • s73v3r_ 8y ago
        Or a failure if you want a functioning government. There's a reason the Articles were thrown out, and the inability of the Federal government to raise revenue so it could actually do stuff was one of the major reasons.
      • dragonwriter 8y ago
        > It was only a failure if you think a strong federal government is a good idea. No, a stronger federal government was a solution that was proposed (and adopted) for it's manifest failure. It wasn't the idea that a strong federal government was good that led to the belief the Articles had failed, but exactly the reverse.
• s73v3r_ 8y ago
  Do you want the Trump administration to be the arbiter of what states are able to spend their revenues on?
  • everdev 8y ago
    I wouldn't want it changing every election cycle, so I'd say it should be some combination of population or area. If states want more revenue than that, they they can add other consumption taxes like bridge tolls, sales tax, etc. that is collected at PoS. I just don't like having a complex math problem to do every year.