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Libertarians recognize the necessity of a state. They simply want it to be as minimalistic and non-invasive as possible. One baby step that could be taken in t

Libertarians recognize the necessity of a state. They simply want it to be as minimalistic and non-invasive as possible. One baby step that could be taken in the US would be to abolish the IRS and income tax, and use a consumption tax in its place. Imagine life without the annual ritual of Form 1040, and revealing every detail of your financial life. I don't believe every American should have to be an accountant, or turn their private data over to the government.

tptacek 12y ago
That's a weird reply, since the parent commenter wasn't talking about tax policy. Also: I'm not sure how a gigantic tax increase on the bottom 95% of all earners is a "libertarian" concept.
- ElectronCharge 12y ago
  The main part of the reply was disagreeing with the idea that libertarians don't want a "state". The IRS comment was just pointing out one constructive move towards a smaller, better government. The "tax increase" you mention is not an increase, read up on the Fair Tax. The prebate is designed to eliminate the potentially regressive nature of the tax. The benefits would vastly outweigh the downside.
  - tptacek 12y ago
    This FairTax? http://www.factcheck.org/2007/05/unspinning-the-fairtax/ http://www.factcheck.org/2007/05/unspinning-the-fairtax/ Even if Kotlikoff is correct that a 31.2 percent rate is revenue-neutral, there remains some reason to doubt that the rate actually would be that low. The FairTax proposal assumes a 100 percent tax base on consumption. By way of contrast, most states that have sales taxes have roughly a 50 percent tax base. With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include: Purchases of new homes Rent Interest on credit cards, mortgages and car loans Doctor bills Utilities Gasoline (30 percent in addition to current taxes, which would not be repealed) Legal fees Wow.
    - ElectronCharge 12y ago
      So? There would be no federal income tax. Further, there would be no corporate income tax, so in general prices will fall and wages will rise. Money invested or saved would not be taxed, lowering the overall rate. Finally, the prebate makes up the difference for low-income folk. From the article you linked: "Moreover, even FairTax critics like Gale agree that consumption taxes increase the size of the economy. Many studies show that long-term incomes would rise under a consumption-based tax system. Optimistic accounts show a 10 percent rise in income over time, but even the more cautious studies show gains of 5 percent to 7 percent. Because the FairTax will grow the economy, workers will eventually see increases in their income." There are difficulties in implementing the Fair Tax (income tax must once again be made unconstitutional) but overall it's an extremely good idea. Imagine the gains just from the recovered productivity of everyone employed at the IRS, the myriad tax accountants, and individuals relieved from dealing with the entire mess. The billions spent on the IRS every year would also be used for something better.
      - tptacek 12y ago
        Did you read the article? The conclusion is that anyone making between 20,000 and 200,000 would see their share of the federal tax burden rise, and those making over 200,000 would see it fall. The paragraph you're quoting from is in a section that could have been titled "Fuck It, It's A Regressive Tax But It's Still Good". You wrote: The "tax increase" you mention is not an increase, read up on the Fair Tax. The prebate is designed to eliminate the potentially regressive nature of the tax. You were incorrect. You cannot now move the goalposts.
        tptacek 12y ago
        (I'm asking seriously about you reading it, not being snarky, about that bit.)
        ElectronCharge 12y ago
        'The paragraph you're quoting from is in a section that could have been titled "Fuck It, It's A Regressive Tax But It's Still Good".' (Sorry it's been so long since I replied last, I hope you notice this.) That's exactly right, 'regressive' is not necessarily bad. The top 10% of earners right now pay something around 70% of all income tax: http://taxfoundation.org/article/summary-latest-federal-income-tax-data http://taxfoundation.org/article/summary-latest-federal-inco.... Is that 'fair'? What is the 'correct' number? Food for thought. At any rate, the reason the Fair Tax's 'regression' isn't bad, is the estimated increase in tax burden for the middle class is around 2-3%. HOWEVER, the estimated wage benefits of the Fair Tax total 5-10%. So, even though the middle class is paying a higher share than now, its net income would go up 2-8%. That's a win, plus the entire IRS and income tax apparatus is gone - another huge win. Given the political abuses the IRS has facilitated lately, it needs to go. We don't need an American Gestapo.

tptacek 12y ago

That's a weird reply, since the parent commenter wasn't talking about tax policy. Also: I'm not sure how a gigantic tax increase on the bottom 95% of all earners is a "libertarian" concept.

ElectronCharge 12y ago
The main part of the reply was disagreeing with the idea that libertarians don't want a "state". The IRS comment was just pointing out one constructive move towards a smaller, better government. The "tax increase" you mention is not an increase, read up on the Fair Tax. The prebate is designed to eliminate the potentially regressive nature of the tax. The benefits would vastly outweigh the downside.
- tptacek 12y ago
  This FairTax? http://www.factcheck.org/2007/05/unspinning-the-fairtax/ http://www.factcheck.org/2007/05/unspinning-the-fairtax/ Even if Kotlikoff is correct that a 31.2 percent rate is revenue-neutral, there remains some reason to doubt that the rate actually would be that low. The FairTax proposal assumes a 100 percent tax base on consumption. By way of contrast, most states that have sales taxes have roughly a 50 percent tax base. With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include: Purchases of new homes Rent Interest on credit cards, mortgages and car loans Doctor bills Utilities Gasoline (30 percent in addition to current taxes, which would not be repealed) Legal fees Wow.
  - ElectronCharge 12y ago
    So? There would be no federal income tax. Further, there would be no corporate income tax, so in general prices will fall and wages will rise. Money invested or saved would not be taxed, lowering the overall rate. Finally, the prebate makes up the difference for low-income folk. From the article you linked: "Moreover, even FairTax critics like Gale agree that consumption taxes increase the size of the economy. Many studies show that long-term incomes would rise under a consumption-based tax system. Optimistic accounts show a 10 percent rise in income over time, but even the more cautious studies show gains of 5 percent to 7 percent. Because the FairTax will grow the economy, workers will eventually see increases in their income." There are difficulties in implementing the Fair Tax (income tax must once again be made unconstitutional) but overall it's an extremely good idea. Imagine the gains just from the recovered productivity of everyone employed at the IRS, the myriad tax accountants, and individuals relieved from dealing with the entire mess. The billions spent on the IRS every year would also be used for something better.
    - tptacek 12y ago
      Did you read the article? The conclusion is that anyone making between 20,000 and 200,000 would see their share of the federal tax burden rise, and those making over 200,000 would see it fall. The paragraph you're quoting from is in a section that could have been titled "Fuck It, It's A Regressive Tax But It's Still Good". You wrote: The "tax increase" you mention is not an increase, read up on the Fair Tax. The prebate is designed to eliminate the potentially regressive nature of the tax. You were incorrect. You cannot now move the goalposts.
      - tptacek 12y ago
        (I'm asking seriously about you reading it, not being snarky, about that bit.)
      - ElectronCharge 12y ago
        'The paragraph you're quoting from is in a section that could have been titled "Fuck It, It's A Regressive Tax But It's Still Good".' (Sorry it's been so long since I replied last, I hope you notice this.) That's exactly right, 'regressive' is not necessarily bad. The top 10% of earners right now pay something around 70% of all income tax: http://taxfoundation.org/article/summary-latest-federal-income-tax-data http://taxfoundation.org/article/summary-latest-federal-inco.... Is that 'fair'? What is the 'correct' number? Food for thought. At any rate, the reason the Fair Tax's 'regression' isn't bad, is the estimated increase in tax burden for the middle class is around 2-3%. HOWEVER, the estimated wage benefits of the Fair Tax total 5-10%. So, even though the middle class is paying a higher share than now, its net income would go up 2-8%. That's a win, plus the entire IRS and income tax apparatus is gone - another huge win. Given the political abuses the IRS has facilitated lately, it needs to go. We don't need an American Gestapo.