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"The reason to have income tax is to have people who can afford it contribute to society." I don't think this is why we have income tax. All taxes are artifici

by jp555 12y ago

"The reason to have income tax is to have people who can afford it contribute to society." I don't think this is why we have income tax. All taxes are artificial. They're artificial rules inserted into the natural market, like how we put a bit into a horse's mouth so we can influence it's behaviour. I think the better question for any tax is: are we putting the bit into the horse's ass? It seems to me this proposal to tax bandwidth was more like that; it's just bad policy.

lmm 12y ago
Income tax is the exception to that. We tax income not to change behaviour but to not change behaviour; if we need x amount of revenue, a progressive tax on income is the way to collect that that has the least impact on the populace.
- JoeAltmaier 12y ago
  Taxation is about plucking the goose so as to get the most feathers, with the least squawking. Nothing more. So the goose squawked, and they backed down.
  - deleted 12y ago
    [deleted]
- jp555 12y ago
  Then why do we tax consumption and capital as well? I agree with you but feel it's more a balancing of policy to manage the complex mix of our intentions as a society.
  - xyzzyz 12y ago
    We tax consumption because it's easy to collect, and also sometimes to discourage some types of consumption, like alcohol, tobacco or gas. Capital is taxed in small number of countries (which is in my opinion unfortunate). However, most countries tax capital income, and if one agrees that taxing regular personal income makes sense, one should also tax capital income.
    - jp555 12y ago
      "if one agrees that taxing regular personal income makes sense, one should also tax capital income." I don't see this as logical, because agreeing that it makes sense has nothing to do with whether it's effective or not. Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. I'm not saying we have it right, but that it's really very complicated.
      - GFK_of_xmaspast 12y ago
        Not taxing capital gains does wonders for concentrating wealth on the rich and ultra-rich.
      - dragonwriter 12y ago
        > Taxing capital gains reduces the amount that can be allocated into generating new wealth So does taxing any other form of income. Preferentially low taxes on capital gains favors wealth accumulation by people who already derive income from capital and, at any given present revenue level, relatively disfavors wealth accumulation by people who derive income through means which are more heavily taxed, notably labor income.
        jp555 12y ago
        I didn't mean to suggest only capital taxes incure opportunity cost, you're right that all taxes do. I have been thinking lately as well that we have probably shifted to taxing labour too heavily, but as it is really complicated, Im sure there's a lot that I don't know that I don't know.
      - AnthonyMouse 12y ago
        > Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. This is really true of all taxes. The tax money comes out of someone's pocket and that person may have otherwise invested the money or done some other economically productive thing with it.
- john_b 12y ago
  There is nothing in your comment to support your claims. You claim an exception to a rule but provide no argument to support this exception. And then say that the largest revenue producing tax in the U.S. has the least impact on the populace.

by jp555 12y ago

lmm 12y ago

Income tax is the exception to that. We tax income not to change behaviour but to not change behaviour; if we need x amount of revenue, a progressive tax on income is the way to collect that that has the least impact on the populace.

JoeAltmaier 12y ago
Taxation is about plucking the goose so as to get the most feathers, with the least squawking. Nothing more. So the goose squawked, and they backed down.
- deleted 12y ago
  [deleted]
jp555 12y ago
Then why do we tax consumption and capital as well? I agree with you but feel it's more a balancing of policy to manage the complex mix of our intentions as a society.
- xyzzyz 12y ago
  We tax consumption because it's easy to collect, and also sometimes to discourage some types of consumption, like alcohol, tobacco or gas. Capital is taxed in small number of countries (which is in my opinion unfortunate). However, most countries tax capital income, and if one agrees that taxing regular personal income makes sense, one should also tax capital income.
  - jp555 12y ago
    "if one agrees that taxing regular personal income makes sense, one should also tax capital income." I don't see this as logical, because agreeing that it makes sense has nothing to do with whether it's effective or not. Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. I'm not saying we have it right, but that it's really very complicated.
    - GFK_of_xmaspast 12y ago
      Not taxing capital gains does wonders for concentrating wealth on the rich and ultra-rich.
    - dragonwriter 12y ago
      > Taxing capital gains reduces the amount that can be allocated into generating new wealth So does taxing any other form of income. Preferentially low taxes on capital gains favors wealth accumulation by people who already derive income from capital and, at any given present revenue level, relatively disfavors wealth accumulation by people who derive income through means which are more heavily taxed, notably labor income.
      - jp555 12y ago
        I didn't mean to suggest only capital taxes incure opportunity cost, you're right that all taxes do. I have been thinking lately as well that we have probably shifted to taxing labour too heavily, but as it is really complicated, Im sure there's a lot that I don't know that I don't know.
    - AnthonyMouse 12y ago
      > Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. This is really true of all taxes. The tax money comes out of someone's pocket and that person may have otherwise invested the money or done some other economically productive thing with it.
john_b 12y ago
There is nothing in your comment to support your claims. You claim an exception to a rule but provide no argument to support this exception. And then say that the largest revenue producing tax in the U.S. has the least impact on the populace.