6 ms·

What do you propose instead? A link is fine.

by moultano 16y ago

ars 16y ago
I assume he wants consumption (i.e. sales or vat tax) instead of income tax. Google "fair tax" for one such proposal.
- Locke1689 16y ago
  This doesn't seem to make sense to me as it almost seems a reverse progressive tax. People earning just enough to get by will be spending almost 100% of their income on goods, thus having a very high VAT tax as a proportion of their income, while people in the very high income brackets tend to spend far less on actual "goods" as a percentage of their income. My family, for example, puts far more money in the stock market than they do in groceries every month.
  - ars 16y ago
    Eventually the money gets spent. Might not be right away, but eventually. You have to tax services as well for it to work though.
    - Locke1689 16y ago
      Uhh, why would it eventually get spent? My inheritance is probably going to be very high.
      - ars 16y ago
        And what are you going to do with the money? You'll spend some, invest some, etc. You'll also have kids, so even if you save it all, it'll get divided amongst more and more people. Or you'll give it all away to charity. Just look historically - are they any wealthy families that kept all the money in the family and never spent it? I don't think there are any that even lasted 3 generations before it was spent or diluted among many children.
        Locke1689 16y ago
        The Rockafeller and Walton families come to mind. My sister and I know a half-dozen families that have kept millions in inheritance over the course of about 100-150 years. Remember that America isn't that old and "modern" America is even younger. My family tends to put a fair share of its yearly spending into family vacations, also, which wouldn't generate any taxes for the United States. This isn't really about my family though, it just doesn't make sense that you would rely on "eventual" wealth dissipation in order to collect taxes. Also, would you seek to tax different items differently? It seems like it would be more difficult to find and tax luxury items differently than simply using a progressive income tax. Would you have to establish VAT for items imported to the country? Would this be double taxation if you bought a good which has a VAT tax in another country?
        ars 16y ago
        The Rockefeller family is unusual in that the money is locked in a trust, but when it expires there are over 150 family members who will split the money. The Walton is just now reaching it's 3rd generation, so isn't that old. If this part really bothers you, you can have a sales tax plus estate tax, but no income tax. BTW, you are asking me a bunch of questions on the details, when none of this is my idea. I'm just parroting what the proponents of the "Fair tax" say.
        Locke1689 16y ago
        Fair enough. For what it's worth, according to the President's Advisor Panels and the Brookings institute, this would raise taxes for the bottom 90% of taxpayers and drop taxes for the top 10%. http://www.brookings.edu/papers/1998/03taxes_gale.aspx http://www.brookings.edu/papers/1998/03taxes_gale.aspx Reading his paper it seems like this idea has some merit but this implementation is also fairly suspect.
jackfoxy 16y ago
The right, even obligation, of the sovereign is to dip a straw in the stream of commerce and extract revenue. Tax farming was the way to do this in olden days, a highly inefficient and grossly unjust means. Today the income tax is the predominant means, and it is sold as the socially just alternative. I don't want to argue the social justice aspect. I pointed out some contradictions in another comment. I will argue for an alternative that is far more efficient and retains progressive elements. In the U.S. the tax collection points number in the 100s of millions. This incurs cost on the sovereign, reducing the value of the collected revenue, and on the taxpayers, increasing the burden of the tax. It makes much more sense to switch to a system where the tax collection points number in the 10s of thousands, and the rules are transparent. Public utilities are already extremely efficient tax collectors. Take a close look at your utility bill. The taxes may have confusing names, but they are there, and the utility collects them and remits them to the sovereign with very small staffs implementing very simple rules (compared to the IRS tax code). Bear with me, I am now getting to the meat. Think of an energy transformation tax. Whenever energy is transformed (in most cases combusted), it is taxed. Somewhat like a value added tax, but only for energy. For instance, coal at the electrical generator: taxed; natural gas to heat a building: taxed; gasoline or diesel pumped into a vehicle:taxed; electricity at a meter: taxed. Utilities are already set up to do this. Just bring on oil and coal companies and a few others. Those are your tax collectors. Social justice / progressive tax? The utilities are also already set up to do this. So-called life-line or base-line rates on bare minimum consumption don't get taxed. Likewise a minimum level of gasoline and diesel consumption could be tax free to individuals. Energy consumption underpins virtually all economic activity. There is no escaping taxes in the underground economy. Energy theft can be made a special case of crime with appropriately draconian punishment. And do you really want to soak the rich? What do you think their energy footprint looks like compared to the common man's? Even when all they do is clip coupons. Concerned about rising CO^2 levels? Tax hydrocarbon conversion higher than others. That which you tax you get less of. That which you subsidize you get more of. The economic analysis of tax rates on different fuels is very feasible compared to analyzing the entire economy. I don't underestimate the capacity of elected politicians to complicate and demagogue anything, but an annual debate on energy conversion rates would be far more transparent than the budget process. Of course it would be a big shock to jump to such a system in a single year, and this has only been a brief outline of such a plan. Better to implement over several years and dedicate the IRS to catching tax cheats from the old (income-based) system while it is mostly phased-out.

What do you propose instead? A link is fine.

ars 16y ago

I assume he wants consumption (i.e. sales or vat tax) instead of income tax. Google "fair tax" for one such proposal.

Locke1689 16y ago
This doesn't seem to make sense to me as it almost seems a reverse progressive tax. People earning just enough to get by will be spending almost 100% of their income on goods, thus having a very high VAT tax as a proportion of their income, while people in the very high income brackets tend to spend far less on actual "goods" as a percentage of their income. My family, for example, puts far more money in the stock market than they do in groceries every month.
- ars 16y ago
  Eventually the money gets spent. Might not be right away, but eventually. You have to tax services as well for it to work though.
  - Locke1689 16y ago
    Uhh, why would it eventually get spent? My inheritance is probably going to be very high.
    - ars 16y ago
      And what are you going to do with the money? You'll spend some, invest some, etc. You'll also have kids, so even if you save it all, it'll get divided amongst more and more people. Or you'll give it all away to charity. Just look historically - are they any wealthy families that kept all the money in the family and never spent it? I don't think there are any that even lasted 3 generations before it was spent or diluted among many children.
      - Locke1689 16y ago
        The Rockafeller and Walton families come to mind. My sister and I know a half-dozen families that have kept millions in inheritance over the course of about 100-150 years. Remember that America isn't that old and "modern" America is even younger. My family tends to put a fair share of its yearly spending into family vacations, also, which wouldn't generate any taxes for the United States. This isn't really about my family though, it just doesn't make sense that you would rely on "eventual" wealth dissipation in order to collect taxes. Also, would you seek to tax different items differently? It seems like it would be more difficult to find and tax luxury items differently than simply using a progressive income tax. Would you have to establish VAT for items imported to the country? Would this be double taxation if you bought a good which has a VAT tax in another country?
        ars 16y ago
        The Rockefeller family is unusual in that the money is locked in a trust, but when it expires there are over 150 family members who will split the money. The Walton is just now reaching it's 3rd generation, so isn't that old. If this part really bothers you, you can have a sales tax plus estate tax, but no income tax. BTW, you are asking me a bunch of questions on the details, when none of this is my idea. I'm just parroting what the proponents of the "Fair tax" say.
        Locke1689 16y ago
        Fair enough. For what it's worth, according to the President's Advisor Panels and the Brookings institute, this would raise taxes for the bottom 90% of taxpayers and drop taxes for the top 10%. http://www.brookings.edu/papers/1998/03taxes_gale.aspx http://www.brookings.edu/papers/1998/03taxes_gale.aspx Reading his paper it seems like this idea has some merit but this implementation is also fairly suspect.

jackfoxy 16y ago

The right, even obligation, of the sovereign is to dip a straw in the stream of commerce and extract revenue. Tax farming was the way to do this in olden days, a highly inefficient and grossly unjust means. Today the income tax is the predominant means, and it is sold as the socially just alternative. I don't want to argue the social justice aspect. I pointed out some contradictions in another comment. I will argue for an alternative that is far more efficient and retains progressive elements. In the U.S. the tax collection points number in the 100s of millions. This incurs cost on the sovereign, reducing the value of the collected revenue, and on the taxpayers, increasing the burden of the tax. It makes much more sense to switch to a system where the tax collection points number in the 10s of thousands, and the rules are transparent. Public utilities are already extremely efficient tax collectors. Take a close look at your utility bill. The taxes may have confusing names, but they are there, and the utility collects them and remits them to the sovereign with very small staffs implementing very simple rules (compared to the IRS tax code). Bear with me, I am now getting to the meat. Think of an energy transformation tax. Whenever energy is transformed (in most cases combusted), it is taxed. Somewhat like a value added tax, but only for energy. For instance, coal at the electrical generator: taxed; natural gas to heat a building: taxed; gasoline or diesel pumped into a vehicle:taxed; electricity at a meter: taxed. Utilities are already set up to do this. Just bring on oil and coal companies and a few others. Those are your tax collectors. Social justice / progressive tax? The utilities are also already set up to do this. So-called life-line or base-line rates on bare minimum consumption don't get taxed. Likewise a minimum level of gasoline and diesel consumption could be tax free to individuals. Energy consumption underpins virtually all economic activity. There is no escaping taxes in the underground economy. Energy theft can be made a special case of crime with appropriately draconian punishment. And do you really want to soak the rich? What do you think their energy footprint looks like compared to the common man's? Even when all they do is clip coupons. Concerned about rising CO^2 levels? Tax hydrocarbon conversion higher than others. That which you tax you get less of. That which you subsidize you get more of. The economic analysis of tax rates on different fuels is very feasible compared to analyzing the entire economy. I don't underestimate the capacity of elected politicians to complicate and demagogue anything, but an annual debate on energy conversion rates would be far more transparent than the budget process. Of course it would be a big shock to jump to such a system in a single year, and this has only been a brief outline of such a plan. Better to implement over several years and dedicate the IRS to catching tax cheats from the old (income-based) system while it is mostly phased-out.