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Why do taxes have to be spread out everywhere? Why not just have an income tax and sales tax, or maybe only one (I've heard arguments for both sides, but don't

by pktgen 13y ago

Why do taxes have to be spread out everywhere? Why not just have an income tax and sales tax, or maybe only one (I've heard arguments for both sides, but don't want to get into that debate) to cover all this? It's the same thing with all the ridiculous fees governments charge for various things. For example, registering a vehicle at the DMV. Why does this cost anything? After all, your taxes already pay the salary of the person at the DMV, their office, etc. and the sales tax (in states that have it) paid on a vehicle purchase should take into account that the new owner will need to register it. It's just a ridiculous way of "not really increasing" taxes.

johnpmayer 13y ago
Two reasons. The first, to which you allude, is that those who make the rules are trying to stay in their jobs. It's a symptom of democracy. The second is that these are all knobs one can turn to fine-tune incentives of behaviors; cost complexity isn't inherently bad.
URSpider94 13y ago
One answer is that there is a philosophy that fees or taxes should only be levied on people who use them. Automobile ownership is a discretionary act that is already highly subsidized, so the government feels justified in levying specific fees against car owners. Another answer is that user fees are politically expedient, as you point out -- it's a way to increase government revenue without increasing taxes per se. In any case, if you buy a car, the DMV fees ARE generally rolled into the purchase, though as a separate item. Not to be too pedantic, but you can always buy a vehicle and not register it -- for example, if you are from out of state and plan to register it in your home state, or if you need to do some work on it before you put it on the road.
- jamesaguilar 13y ago
  Still a third answer: unwanted behavior is sometimes taxed to deter it.
mikeash 13y ago
People who use roads should pay for them, varying roughly according to how much they use them. This will ensure that the roads are used in the most efficient manner possible. Basic economics. Since it's not really practical to directly charge for road use (with the occasional toll road as an exception), taxes can serve as a decent substitute. Given that, it's good to line up the taxes with use.
brc 13y ago
Indeed. Why no 'flat taxes'? Flat taxes with no exemptions eliminate armies of tax collectors, accountants and lawyers. They would eliminate a host of nickel-and-diming taxes. A flat tax is beneficial to everyone but a politician who wants to punish one set of voters and reward another. So we get tax codes running to thousands of pages, millions of man-hours spent evading the rules and enforcing them, lobbyists spending all their waking hours trying to get their competitors taxed and their paymaster untaxed. A fixed tax rate on the size of the economy and a fixed government size to match the tax rate would solve a million problems, but simplicity is like anti-matter to governments.

by pktgen 13y ago

johnpmayer 13y ago

Two reasons. The first, to which you allude, is that those who make the rules are trying to stay in their jobs. It's a symptom of democracy. The second is that these are all knobs one can turn to fine-tune incentives of behaviors; cost complexity isn't inherently bad.

URSpider94 13y ago

One answer is that there is a philosophy that fees or taxes should only be levied on people who use them. Automobile ownership is a discretionary act that is already highly subsidized, so the government feels justified in levying specific fees against car owners. Another answer is that user fees are politically expedient, as you point out -- it's a way to increase government revenue without increasing taxes per se. In any case, if you buy a car, the DMV fees ARE generally rolled into the purchase, though as a separate item. Not to be too pedantic, but you can always buy a vehicle and not register it -- for example, if you are from out of state and plan to register it in your home state, or if you need to do some work on it before you put it on the road.

jamesaguilar 13y ago
Still a third answer: unwanted behavior is sometimes taxed to deter it.

mikeash 13y ago

People who use roads should pay for them, varying roughly according to how much they use them. This will ensure that the roads are used in the most efficient manner possible. Basic economics. Since it's not really practical to directly charge for road use (with the occasional toll road as an exception), taxes can serve as a decent substitute. Given that, it's good to line up the taxes with use.

brc 13y ago

Indeed. Why no 'flat taxes'? Flat taxes with no exemptions eliminate armies of tax collectors, accountants and lawyers. They would eliminate a host of nickel-and-diming taxes. A flat tax is beneficial to everyone but a politician who wants to punish one set of voters and reward another. So we get tax codes running to thousands of pages, millions of man-hours spent evading the rules and enforcing them, lobbyists spending all their waking hours trying to get their competitors taxed and their paymaster untaxed. A fixed tax rate on the size of the economy and a fixed government size to match the tax rate would solve a million problems, but simplicity is like anti-matter to governments.