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Forums - General Discussion - Tax discussion thread (U.S. focused)

TheRealMafoo said:

Final-Fan is right about corruption. It would be hard to keep people from bartering or just out right buying things under the table. But aside from that, I think it's a good idea.

Oh, and it's not my idea. I shared a cab ride once, on the way to the airport from a tax convention, with the head accountant from Disney. It was his idea. I am guessing he knows more about the economy then both you and I combined.

I was skeptical of the idea at first, but he made some very good points. Sadly, I was flying first class, and due to the free alcohol, I can't remember all the talking points :p

 

Lol, its alright, I forgive you.  Any idea can sound good under the right circumstances, and you have to look pretty far ahead to see the complications of this one.

 



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

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TheRealMafoo said:
NJ5 said:
TheRealMafoo said:

It was his idea. I am guessing he knows more about the economy then both you and I combined.

 


He probably also knows less than the Federal Reserve guys, and look where those guys got us.

 

 

I am guessing the guy at Disney didn't have lobbyist telling him what to do.

I guess according to his calculations he'd make more money with his proposed rules. This takes us back to square zero.

My point is "appeal to authority" doesn't work. We need believable arguments.

 



My Mario Kart Wii friend code: 2707-1866-0957

Final-Fan said:
cool down, akuma587. And you may be wrong about prices going up -- wages might go down by the amount of income tax there isn't and prices stay the same.

As for crippling the economy, I haven't studied enough to know and -- I strongly suspect -- neither have you.

I am not really sure where you are getting that I said prices would go up, the taxes would go up, but I didn't say prices would go up.  But the end price will go up however you look at it.  Otherwise producers would be absorbing some of the cost of the tax, which they would very likely not do if the tax was on everything as there is no incentive to absorb that cost.

Why would incomes drop if people are essentially being taxed the same amount in the long run (assuming the government collects the same amount of revenue from the sales tax)?  I see where you might think that would happen, but wouldn't that be an even worse thing for the economy as many employees (generally spend higher perecentages of their income than their employers) would be spending less.  Your point about wages going down doesn't really seem relevant.

As to the last point of it crippling the economy, yes, it is an obvious conclusion.  Putting an artificial price floor in place (which a 30-40% tax would do) disrupts natural supply and demand.  The higher the price floor, the more extreme the effect becomes.

This may work in one or two sectors of the market, but putting an artificial price floor on the entire market would really hurt everybody.  I could buy my goods online from Canada and avoid the tax.  Foreign countries could buy their goods from other places than America and avoid the tax.  U.S. manufacturers would shut down because U.S. companies would buy all their component parts abroad because that is cheaper.  Anytime I wanted to buy a car or get some kind of expensive service I could drive across the border to Mexico and do it a lot cheaper.  This may not have been as big of a deal before the internet was around, but if people can get around a ludicrously high tax without too much effort on their part, they will do it.

Front-end taxes influence people's monetary decisions much more than back-end taxes do.  While this is not true for everyone, the average person sees taxes they pay immediately before they see taxes they will pay a few years from now, like yearly property tax or income taxes.  When people see large front-end taxes (like a sales tax), they adjust their purchasing habits accordingly.

 



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

akuma587 said:
Final-Fan said:
cool down, akuma587. And you may be wrong about prices going up -- wages might go down by the amount of income tax there isn't and prices stay the same.

As for crippling the economy, I haven't studied enough to know and -- I strongly suspect -- neither have you.
I am not really sure where you are getting that I said prices would go up, the taxes would go up, but I didn't say prices would go up.  But the end price will go up however you look at it.  Otherwise producers would be absorbing some of the cost of the tax, which they would very likely not do if the tax was on everything as there is no incentive to absorb that cost.

Why would incomes drop if people are essentially being taxed the same amount in the long run (assuming the government collects the same amount of revenue from the sales tax)?  I see where you might think that would happen, but wouldn't that be an even worse thing for the economy as many employees (generally spend higher perecentages of their income than their employers) would be spending less.  Your point about wages going down doesn't really seem relevant.

As to the last point of it crippling the economy, yes, it is an obvious conclusion.  Putting an artificial price floor in place (which a 30-40% tax would do) disrupts natural supply and demand.  The higher the price floor, the more extreme the effect becomes.

This may work in one or two sectors of the market, but putting an artificial price floor on the entire market would really hurt everybody.  I could buy my goods online from Canada and avoid the tax.  Foreign countries could buy their goods from other places than America and avoid the tax.  U.S. manufacturers would shut down because U.S. companies would buy all their component parts abroad because that is cheaper.  Anytime I wanted to buy a car or get some kind of expensive service I could drive across the border to Mexico and do it a lot cheaper.  This may not have been as big of a deal before the internet was around, but if people can get around a ludicrously high tax without too much effort on their part, they will do it.

Front-end taxes influence people's monetary decisions much more than back-end taxes do.  While this is not true for everyone, the average person sees taxes they pay immediately before they see taxes they will pay a few years from now, like yearly property tax or income taxes.  When people see large front-end taxes (like a sales tax), they adjust their purchasing habits accordingly.

I meant the tax-inclusive price.  Sorry for not being clear.  Most places with a high sales tax include the tax in listed prices AFAIK. 

To further clarify what I said:  there are two or three ways that this plan could affect wages and prices: 

(1) Wages stay the same.  The removal of income/payroll tax is reflected by a huge jump in paychecks and the addition of the sales tax is reflected by an equally huge jump in (tax-inclusive) prices.  This is what you are talking about. 

(2) Wages are adjusted downward to the point that take-home pay is about the same, and prices are adjusted downward equally as much, resulting in (tax-inclusive) prices that are about the same.

(3) Something between (1) and (2). 



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Final-Fan said:
(1) Offhand, I'd say that harm would be the decrease in quality of living. I haven't given this deep thought, but that seems like a reasonable definition to me if we assume that basic needs are taken care of in any case.

(2) I don't have a formula for this. I'm not an economist. I guess I could make something up, but it would just be me throwing numbers together until it felt good.

(3) I realize that I'm kind of nebulous on this, but I think it would be a big mistake to say "I don't know what the ratio is so we'll just pretend there isn't any". Unless you're saying that you think I'm wrong that there IS any difference.

(4) The reason I don't favor that is that it would be disastrous for people with very little income who are living off their existing wealth, such as seniors. This is why I don't want to tax the wealth itself until the person dies. People with high incomes, on the other hand, are obviously able to compensate for the loss.

Plus I think that tax evasion would become a much bigger problem in a direct wealth-taxing system because the government would obviously have to go out and assess all of everyone's assets. It's bad enough with property taxes, and you can't hide a house or land like you can jewelry.

If it WAS practical, I would probably still favor a progressive wealth tax but not nearly as progressive as the income tax.

(5) I'm not sure what you're asking here. But the first amounts of income after paying for basic necessities improve the quality of life much more than an equal increase (even percentage increase) does for already very high income, unless I am GREATLY mistaken. Do you disagree with that statement?

(6) I agree.

(7) This is not a problem inherent to progressive taxation. I haven't studied that issue but I imagine arguments can be made on both sides. There are many special rates and exemptions, however, that should be removed from the tax code as it stands today. I think we can all agree on that.

(8) I can see the logic of your argument, but I don't think that it's plausible that government would react in the way you suggest. Anyway, wouldn't the government also want to improve the income level of lower classes as well? There are so many more people who make little money that cost-effective programs could cause the overall increase in tax receipts from them to outweigh the benefit of paying special attention to a small group of rich folks.

Anyway, are you really suggesting the government doesn't ALREADY do plenty of things that help the rich get richer?

1)  See "quality of living" is in of itself a tough thing to measure i'd say when your talking about a society where needs are met.

2&3)  What i'm saying is... that unless someone actually comes up with a direct ration it's basically just something based on "thought" and even then i doubt any ratio would be possible to create.  It's just a matter of opinion... not based by numbers.  Basicly trying to prove god to an atheist.

4)  That's why it doesn't make sense to use wealth as an indicator for this sort of thing however... which is my point.  When you base off of wealth you are basically saying "Those who are good at saving are punished vs those who aren't.

In a wealth based system... my friend and I could make the same amount of money... and he would spend it all on beer.  I would save my money.  I would pay more taxes.  I would be punished for this.  Now this anyone would qualify as unfair.

Now, say I and my friend get paid the same amout of money.  I save up my money, he spends it on beer... and I buy a property which I rent.  Now I'm paying a higher percentage of my income because i was smart and I saved my money.  Why isn't that unfair?

5) With all basic needs covered... people don't need to buy anything.  The rich pay less compared to their wealth because food, shelter etc are needed purchases meaning that it's harder for the poor and middle class to save.  If done correctly healthy food shelter etc could be provided by the government much cheaper via things like goverment restruants and foodbanks. (Big if i realize) meaning the poor have more money to spend... an no needs to spend it on. (Outside of transportation.)  There will be nothing stopping those who want to save there money from saving it... unlike the problems currently that make this impossible.

6) Good.

7) How isn't it?  How would you fix this in a progressive tax system?  Two people could just decide to not get married and live together instead then they would reap all the benefits of a lower bracket.  Tax it per household then people who room together because they're poor get blasted with higher taxes.

8)  We currently have a progressive tax system... I think that is one reason Republicans and Democrats love to give gifts to big buisnesses.  Not just the campaign financing.  Because... tax raises get you out of office.  While nobody notices the rich getting richer. (Or do and don't care as much.)

 



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Jackson50 said:
bigjon said:
I wanna believe McCain when he says he will balance the budget. He said that, "I will balance the budget"

I think he is taking a massive cut in spending direction. This is basically the only reason I am voting for McCain, his fiscal conservatism. The rest of the reason for my voting is more against Obama.

 

McCain is not going to cut spending. The NTU (National Taxpayers Union) studied McCain's proposals and concluded that McCain would increase spending by nearly $100 billion. If you couple that with his tax cuts...that, my friends, is not fiscal responsibility. Obama will also increase spending, but he will at least raise taxes on the wealthy.

They only counted like... the Tax Plan though.  Not budgetary spending or anything.  He could cut taxes then have most departments in the government cut spending. (Theoretically.)

I mean wasn't he for a balanced buget ammendment?

 



Kasz216 said:
Jackson50 said:
bigjon said:
I wanna believe McCain when he says he will balance the budget. He said that, "I will balance the budget"

I think he is taking a massive cut in spending direction. This is basically the only reason I am voting for McCain, his fiscal conservatism. The rest of the reason for my voting is more against Obama.

 

McCain is not going to cut spending. The NTU (National Taxpayers Union) studied McCain's proposals and concluded that McCain would increase spending by nearly $100 billion. If you couple that with his tax cuts...that, my friends, is not fiscal responsibility. Obama will also increase spending, but he will at least raise taxes on the wealthy.

They only counted like... the Tax Plan though.  Not budgetary spending or anything.  He could cut taxes then have most departments in the government cut spending. (Theoretically.)

I mean wasn't he for a balanced buget ammendment?

 

He was also against the Bush tax cuts...

I agree McCain will do a much better job on fiscal responsibility than Bush II or Reagan, but the American public is totally full of crap.  If McCain starts slashing programs people will shit a brick.

They want:

1) The government to solve more of their problems

AND

2) The government to spend less of their money

Really people just need to quit bellyaching about taxes, because they will continue to bellyache about the government not doing enough regardless of what happens.



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

akuma587 said:
Kasz216 said:
Jackson50 said:
bigjon said:
I wanna believe McCain when he says he will balance the budget. He said that, "I will balance the budget"

I think he is taking a massive cut in spending direction. This is basically the only reason I am voting for McCain, his fiscal conservatism. The rest of the reason for my voting is more against Obama.

 

McCain is not going to cut spending. The NTU (National Taxpayers Union) studied McCain's proposals and concluded that McCain would increase spending by nearly $100 billion. If you couple that with his tax cuts...that, my friends, is not fiscal responsibility. Obama will also increase spending, but he will at least raise taxes on the wealthy.

They only counted like... the Tax Plan though.  Not budgetary spending or anything.  He could cut taxes then have most departments in the government cut spending. (Theoretically.)

I mean wasn't he for a balanced buget ammendment?

 

He was also against the Bush tax cuts...

I agree McCain will do a much better job on fiscal responsibility than Bush II or Reagan, but the American public is totally full of crap.  If McCain starts slashing programs people will shit a brick.

They want:

1) The government to solve more of their problems

AND

2) The government to spend less of their money

Really people just need to quit bellyaching about taxes, because they will continue to bellyache about the government not doing enough regardless of what happens.

Cause the economy was good.  When the economy is doing really good you don't need to cut corporate taxes... because the economy is already good.  It's throwing money away.

When the economy is bad however....

I mean your basically saying "McCain was against using an umbrella when it was a sunny day without a cloud in the sky.... but now it's raining and he has one!   OMG FLIP FLOP!"



Kasz216 said:

They only counted like... the Tax Plan though.  Not budgetary spending or anything.  He could cut taxes then have most departments in the government cut spending. (Theoretically.)

I mean wasn't he for a balanced buget ammendment?

No, they counted spending proposals from three candidates. The cost analysis for McCain's spending proposals indicates that he would increase spending by $92 billion.

http://www.ntu.org/main/page.php?PageID=141

 



Also... I actually think the president could both slash government programs and handle more of the peoples problems.

Neither president looks like they will however.

What would be best would be to get in one of the hardline libretarians in for 4 years, like Barr or even Ron Paul. Have them tear apart the entire national goverment bueracracy, then let everyone else start over.

With stuff people actually need like Healthcare.

We can't support healthcare right now... but we could if we got rid of all the waste.