How would you reform taxes?

[Patton3]

Self explanatory question really, but just a few things before I let you all go at it:

- It will have to be relatively short, given the amount of space we're allotted here.

- Let's lock away the little troll inside us all.

- One topic I think could be a starting point is the Bowles-Simpson Plan. Briefly, it is reducing rates across the board while eliminating loop holes and tax breaks.

Go at it.

[Tony-DarkGrave]

If I could reform taxes I would install a Flat Tax everyone pays the same amount I would probably go with a tax of 10%-15%

[All-American-Badass]

At 12/23/10 03:53 PM, Tony-DarkGrave wrote: If I could reform taxes I would install a Flat Tax everyone pays the same amount I would probably go with a tax of 10%-15%

I too would implement this plan. And at 15% our tax revenues would go up noticably compared to the old tax system, There's a total of 130 million taxpayers paying in $886 billion in income tax revenue in the US. that's an average of $6,800 per taxpayer. The average salary is roughly $50,000 so at 15% it would pump in an average of $7500 per taxpayer, thus our income tax revenue would go up to $975 billion

[gumOnShoe]

No loop holes or tax breaks. Use a progressive system where the more money you make the more you have taken away. Instead of having brackets, you'd use a mathematical formula to determine how much you owe. The point would be to make earning obscene amounts of money relatively useless on the part of the individual.

The theory being that the less incentive there is for being rich, the more people would invest their money or distribute it downward. You don't want money to become like points in a video game, where you get to a certain point and they only matter for top score and you stop caring about the game.

Additionally, speculative trades would be taxed to prevent unnecessary inflation.

There would be no loop holes. Corporations would be taxed as well. They'd also loose "personhood."

As far as taxing savings. I'd be completely for it, so long as it was negative taxation at the bottom and positive at the top. There would be a plane in the middle where it wouldn't be too steep in either direction. And it would be flexible to the age of the owner of the money as well. Less taxes if you are retired or if you are in between jobs. Savings taxes wouldn't kick in until you were saving over $1,000,000 most likely.

The point being that this would make sure there was a safety net no one fell through, while ensuring that the people at the top have to continue to be inventive and productive members of society. There would be no free rides for anyone. But the people who could afford to pay would pay more.

Additionally, complaints about this being a redistribution of wealth are spot on. All taxes are a redistribution of wealth. Suck it.

[Tony-DarkGrave]

At 12/23/10 05:51 PM, All-American-Badass wrote:

At 12/23/10 03:53 PM, Tony-DarkGrave wrote: If I could reform taxes I would install a Flat Tax everyone pays the same amount I would probably go with a tax of 10%-15%

I too would implement this plan.

exactly it would be much better, plus why should I pay more taxes than other people?

[ScytheCutter]

At 12/23/10 06:24 PM, gumOnShoe wrote:

Additionally, complaints about this being a redistribution of wealth are spot on. All taxes are a redistribution of wealth. Suck it.

This, very much so this.

[Gorgonof]

At 12/23/10 05:51 PM, All-American-Badass wrote: I too would implement this plan. And at 15% our tax revenues would go up noticably compared to the old tax system, There's a total of 130 million taxpayers paying in $886 billion in income tax revenue in the US. that's an average of $6,800 per taxpayer. The average salary is roughly $50,000 so at 15% it would pump in an average of $7500 per taxpayer, thus our income tax revenue would go up to $975 billion

What? Most people pay above 15%, tax revenue would simply drop.

At 12/23/10 06:48 PM, Tony-DarkGrave wrote: exactly it would be much better, plus why should I pay more taxes than other people?

Because you earn more than other people, you've benefited more from society more than other people have.

[All-American-Badass]

At 12/23/10 07:26 PM, Gorgonof wrote:

At 12/23/10 05:51 PM, All-American-Badass wrote: I too would implement this plan. And at 15% our tax revenues would go up noticably compared to the old tax system, There's a total of 130 million taxpayers paying in $886 billion in income tax revenue in the US. that's an average of $6,800 per taxpayer. The average salary is roughly $50,000 so at 15% it would pump in an average of $7500 per taxpayer, thus our income tax revenue would go up to $975 billion

What? Most people pay above 15%, tax revenue would simply drop.

But 99% all the income tax revenue comes from those people making more than $40,000k a year and since the median is around that most of those making below that much get a tax refund, with the flat tax system there will be no tax refunds. In theroy though trickle down effect would apply here.

[SadisticMonkey]

At 12/23/10 06:24 PM, gumOnShoe wrote: Additionally, speculative trades would be taxed to prevent unnecessary inflation.

BAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA hAhAHAHAHAHAHAHAH'

The person who thinks that the federal reserve is "vital" is worried about investments causing INFLATION?

OMG HAHAHAHA

The point being that this would make sure there was a safety net no one fell through, while ensuring that the people at the top have to continue to be inventive and productive members of society.

Because people earn large wages by sitting on their asses OH WAIT it's called being productive to begin with.

There would be no free rides for anyone.

So...massive wealth redistribution with negative tax rates for some..oh but yeah no free riding okay guys

Additionally, complaints about this being a redistribution of wealth are spot on. All taxes are a redistribution of wealth. Suck it.

Suck on sub-optimal aggregate utility, you economic illiterate retard

[poxpower]

At 12/24/10 02:40 AM, SadisticMonkey wrote:

Because people earn large wages by sitting on their asses

Yeah, they're called "managers", also known as "CEOs".
Also politicians.

I think it was John Boehner who went out for like 100+ golf trips last year. You know, that one with the orange face?

And a bunch of dudes during the financial collapse just sat around with their thumbs up their asses not even inquiring as to what the fuck "derivatives" were, as long as it made them money they were fine with it.

Sometimes I get the feeling that Michael Scott is a representative specimen of the higher echelons of management...

[Camarohusky]

I would raise taxes on the upper ends. Each tax bracket would be raised by compunding 2% starting at 60%. Example:
$60,000 + 2%
$120,000 + 4%
$250,000 + 6%
$350,000 + 8%
$500,000 + 10%

Then I would give the IRS the teeth it needs to make up the 200 some billion dollar shortfall caused by unpaid taxes each year.

[wwwyzzerdd]

At 12/23/10 03:53 PM, Tony-DarkGrave wrote: If I could reform taxes I would install a Flat Tax everyone pays the same amount I would probably go with a tax of 10%-15%

Roughly 60-70% of taxpayers in the US pay into the 10 or 15% brackets already. So effectively, you're giving a tax break to about 30% of people who honestly don't need it that much, and potentially implementing a tax hike on the lowest of the low.

[Gorgonof]

At 12/24/10 12:51 AM, All-American-Badass wrote: But 99% all the income tax revenue comes from those people making more than $40,000k a year and since the median is around that most of those making below that much get a tax refund, with the flat tax system there will be no tax refunds. In theroy though trickle down effect would apply here.

Oh yeah, tax returns would make a deference. >.>

But still, you would be shifting taxes on to the lower class, and a LOT of people are already struggling with low paying jobs because of the poor economy. Also, I think the trickle down effect is bullshit, you don't get wealthy by spending money, why should I expect people who deal with money to start spending large sums of their income rather than saving the majority of it?

[Patton3]

A few links you all might want to check out:
A short summary of the flat tax, ala heritage Foundation

"From each according to his ability, to each according to his need" - Karl Marx

The Progressive tax

Just a few summary articles, for anyone who doesn't quite grasp what's being discussed.
And this is not patronizing anyone here, it's just laying out some definition for anyone who's looking at this thread going "Post optimum... What?"

[sharpnova]

At 12/23/10 06:24 PM, gumOnShoe wrote: No loop holes or tax breaks. Use a progressive system where the more money you make the more you have taken away. Instead of having brackets, you'd use a mathematical formula to determine how much you owe. The point would be to make earning obscene amounts of money relatively useless on the part of the individual.

The theory being that the less incentive there is for being rich, the more people would invest their money or distribute it downward. You don't want money to become like points in a video game, where you get to a certain point and they only matter for top score and you stop caring about the game.

Additionally, speculative trades would be taxed to prevent unnecessary inflation.

There would be no loop holes. Corporations would be taxed as well. They'd also loose "personhood."

As far as taxing savings. I'd be completely for it, so long as it was negative taxation at the bottom and positive at the top. There would be a plane in the middle where it wouldn't be too steep in either direction. And it would be flexible to the age of the owner of the money as well. Less taxes if you are retired or if you are in between jobs. Savings taxes wouldn't kick in until you were saving over $1,000,000 most likely.

The point being that this would make sure there was a safety net no one fell through, while ensuring that the people at the top have to continue to be inventive and productive members of society. There would be no free rides for anyone. But the people who could afford to pay would pay more.

Additionally, complaints about this being a redistribution of wealth are spot on. All taxes are a redistribution of wealth. Suck it.

First off, you're a socialist.. liberal piece of filth.
Secondly, I've also considered an assets tax in the past. The way the system works now, the middle class (the primary breadwinners of america) are hit the hardest. the poor get handouts, the rich don't specialize in income, they specialize in assets, and the middle class have a huge bite taken out of their paycheck because of those too lazy and stupid to provide for themselves.

Finally, and this is the best tax system that could be implemented because it's the most FAIR.

Eliminate income tax. Bump up sales tax to 25% across the board on ALL purchases.

Eliminate the IRS. There goes a bunch of need for tax revenue right there.

If you can find a flaw in this strategy that can't be solved by shutting your mouth and thinking for two more seconds before you post it, then think a little longer because there isn't a flaw.

I'm smart enough to know that if I see a tax solution, it is probably the mathematically best tax system possible.

[TheMason]

At 12/23/10 06:24 PM, gumOnShoe wrote: No loop holes or tax breaks. Use a progressive system where the more money you make the more you have taken away. Instead of having brackets, you'd use a mathematical formula to determine how much you owe. The point would be to make earning obscene amounts of money relatively useless on the part of the individual.

The theory being that the less incentive there is for being rich, the more people would invest their money or distribute it downward. You don't want money to become like points in a video game, where you get to a certain point and they only matter for top score and you stop caring about the game.

Gum...this has been tried over and over again. Greece, Rome, Spain, etc have all played the "obscene rich" class war card well before Karl Marx first sucked his thumb.

It does not work.

See your theory is self-defeating. By taking away the "incentive to be rich"...you take away the incentive to invest and this leads to tax evasion and the hoarding that Keynesians and progressives are so afraid of.

What you want is every incentive to be rich b/c the way you get rich is through investing not saving money in accounts that barely keep up with inflation.

There is no reason for social tinkerers to try and "incentivize" investment through taxes...that is very twisted logic.

As far as taxing savings. I'd be completely for it, so long as it was negative taxation at the bottom and positive at the top. There would be a plane in the middle where it wouldn't be too steep in either direction. And it would be flexible to the age of the owner of the money as well. Less taxes if you are retired or if you are in between jobs. Savings taxes wouldn't kick in until you were saving over $1,000,000 most likely.

The point being that this would make sure there was a safety net no one fell through,..

Again...twisted logic. You need to encourage savings...to lessen the need for a public safety net. Instead we have a system where ppl have been partying on borrowed money and when the business cycle constricts they begin loosing everything. It feels like a noose around your neck...trust me I'm feeling it right now.

If I hadn't bought into the "credit for everything and everything on credit!" philosophy of the '90s I'd be a lot better off financially right now and perhaps the crash of '08 wouldn't have been as bad if ppl had saved rather than borrowed.

In the end, we need to start educating ourselves on how to live within the laws of economics rather trying to beat the laws of economics. It's kinda like Vegas...the house always wins.

[sharpnova]

Income tax is unethical.

The only way someone can see a need for income tax is if they are polluting their opinion by basing it entirely on their own poverty-stricken situation and failing to look at the system as a whole.

No one should be forced to work for the poor. That's what charity is for.

For me, charity exists so that when I'm asked for it, I can laugh and slam the idiot who dared ask for it in his eager greedy hungry face.

The day I volunteer a cent to poor people who are too lazy and stupid to work for themselves is the day the outer layers of the ever expanding helium-phase sun have passed the orbital radius of earth and burned every last potential recipient to a flaky crisp. In other words never.

And I hope that takes each and every liberal who found his brainless way into the pitfall of thinking income taxes and mandatory subsidizing of poor/lazy/stupid behavior are ethical, responsible, and necessary, and transforms that self-satisfied visage they call a smile into an enraged glare, prompting their roar to the heavens.

[poxpower]

At 12/24/10 11:58 AM, TheMason wrote:

See your theory is self-defeating. By taking away the "incentive to be rich"

What if I told you that by working 70 hours a week this year, you could make 300k next year, but you'd have to give 150k to taxes?

How bout that?
How about if you'd be making 20 million?

Man I sure wouldn't want to be rich if I'd be TAXED!!!

[MattZone]

Abolishing the income tax and instituting a national sales tax would have several benefits:

1. The only ways for the federal government to raise revenues would be to:
a.) increase the tax rate, which would be unpopular.
b.) enact policies that would increase the national GDP, which would be very popular.

2. Tax policy would no longer be a battleground for class warfare. Everyone would pay the same rate whether they were buying a gallon of milk or a yacht.

3. The corruption of the political system by special interests and corporations would be greatly reduced. Politicians could no longer reward their supporters with tax breaks and punish their opponents with tax increases.

4. The IRS could be greatly reduced in size, which would save several billion dollars.

5. Tax evasion would be far easier and more lucrative to detect, investigate, and prosecute as it is far easier to find a business that is not paying its sales taxes than it is to find a person who is hiding income or refusing to pay.

6. There would be no tax shelters for the rich or for corporations. The only way for the rich to avoid paying taxes would be to go overseas and spend their money there, and not come back with anything they bought because the national sales tax would also be an import tax. Corporations would be unable to avoid the tax because anything they imported, exported, or sold in the United States would be taxed.

[SadisticMonkey]

At 12/24/10 09:50 AM, poxpower wrote: Yeah, they're called "managers", also known as "CEOs".

CEO wages are inflated by government action, and Austrians don't particularly like "managers". This, of course, does not make a compelling case for letting people keep their money, but the point obviously is that government action in order to remedy the side effects of government action is foolish.
Further, when people like gum talk about "the rich", they're including those with incomes as OBSCENELY HIGH as $250,000 a year. You know, doctors, engineers, entrepreneurs. Those unproductive sorts.

Also politicians.

Ooooooooobviously when you work for an organisation that is literally a coercive monopoly (ie no competition, payment isn't voluntary) then of course you're not going to be productive.
But this is not a great argument for taxation, because it's circular, in that these unproductive politicians receive their income from taxation in he first place.

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Just out of interest, just some proof that America is a free market:

[SadisticMonkey]

And some more:

[All-American-Badass]

At 12/24/10 10:45 AM, Gorgonof wrote:

At 12/24/10 12:51 AM, All-American-Badass wrote: But 99% all the income tax revenue comes from those people making more than $40,000k a year and since the median is around that most of those making below that much get a tax refund, with the flat tax system there will be no tax refunds. In theroy though trickle down effect would apply here.

Oh yeah, tax returns would make a deference. >.>

But still, you would be shifting taxes on to the lower class, and a LOT of people are already struggling with low paying jobs because of the poor economy.

Well for the most part those people just wouldn't be getting their tax refund after filing taxes.

Also, I think the trickle down effect is bullshit, you don't get wealthy by spending money,

Actually many people have gotten wealthy that way, some of the most noticeable would be Bill Gates and Warren Buffet, the two richest people in the county. And alot of those on the top end of income are private business owners, they invest their money into expanding their businesses and hiring more people.

[TheThing]

At 12/24/10 04:31 PM, MattZone wrote: Abolishing the income tax and instituting a national sales tax would have several benefits:

1. The only ways for the federal government to raise revenues would be to:
a.) increase the tax rate, which would be unpopular.
b.) enact policies that would increase the national GDP, which would be very popular.

Increasing GDP wouldn't do anything, at least in the long term. Short term, yes, people are buying more goods/services, which means more money for the government. Then more people are hired in order to keep up production, which in turn increases prices. Eventually, prices are going to outpace wages or people will just stop buying as much crap. Then GDP falls, the government loses money.

It's an unsustainable model that will cause recessions and depressions. Every time GDP rose drastically, it was followed by a recession or depression (1920's, 1980's, 2000's)

2. Tax policy would no longer be a battleground for class warfare. Everyone would pay the same rate whether they were buying a gallon of milk or a yacht.

But then the rich will say that this policy is unfair to them, since they're going to be paying more taxes because they buy more higher priced items, while the lazy poor people are paying less because they're buying cheaper goods and services. It's a different kind of class warfare.

3. The corruption of the political system by special interests and corporations would be greatly reduced. Politicians could no longer reward their supporters with tax breaks and punish their opponents with tax increases.

But earlier you said tax increases are frowned upon. Besides, you do understand that it's not all that easy to increase or decrease taxes, or at least as easy as it may seem. Besides, I can make a law that says any item costing over $50,000 will have a 20% tax on it. Suddenly, those who made huge donations to my campaign are getting breaks. Sure, it's a bit more broad, but the other politicians will be on board.

4. The IRS could be greatly reduced in size, which would save several billion dollars.

Initially, but if different sales tax rates could be applied to different products, you're going to need an IRS to make sure everything is collected properly.

And while people won't be paying taxes, you're going to crush businesses as they have to deal with all of the taxes and different rates. And then, most of the tax preparers and tax lawyers wouldn't have jobs, so you're destroying the industry.

5. Tax evasion would be far easier and more lucrative to detect, investigate, and prosecute as it is far easier to find a business that is not paying its sales taxes than it is to find a person who is hiding income or refusing to pay.

See above. But if that scenario doesn't play out, I'd agree.

6. There would be no tax shelters for the rich or for corporations. The only way for the rich to avoid paying taxes would be to go overseas and spend their money there, and not come back with anything they bought because the national sales tax would also be an import tax. Corporations would be unable to avoid the tax because anything they imported, exported, or sold in the United States would be taxed.

Well, that brings up an interesting point. Yeah, large items like cars would have to be bought in America, but if I buy a PS3 in Canada and ship it to my house, I'm avoiding the import tax. Or if I go to Costa Rica and buy a bunch of stuff there and carry on the plane with me, there wouldn't be any import or American sales tax on that.

And businesses would end up being tax-free. They would only have to pay if they import or export goods, or if they buy anything in America. And then you'd kill business's efficiency by having them duplicate their businesses - one for international, and one for domestic. Since it would be cheaper to have an American manufacturing plant for America and one for everywhere else, the managing end of the deal would be horrific. Not only that, but while it would create American jobs, it would raise prices with the increased labor costs, and create inflation.

[SadisticMonkey]

At 12/24/10 06:05 PM, TheThing wrote: Then more people are hired in order to keep up production, which in turn increases prices.

This would lead to price stability, actually. If more is being produced, prices fall. If more is being consumed, prices rise, and so the two counter-balance each other.

Eventually, prices are going to outpace wages or people will just stop buying as much crap. Then GDP falls, the government loses money.

If this were to happen, people would just save more. More capital accumulation leads to more production, and things even out.

It's an unsustainable model that will cause recessions and depressions. Every time GDP rose drastically, it was followed by a recession or depression (1920's, 1980's, 2000's)

Uh, no. You're conflating credit-expansion driven booms with any instance in which GDP rises.

If the aforementioned GDP-raising policies are 'stimulus' kind of policies, like low interest rates, then sure.

But if is "supply-side" or laissez-faire minded policies, then no. But with this, it has to be long term policies. Although a temporary tax cut or refund may seem 'laissez faire', it's stimulatory.

But then the rich will say that this policy is unfair to them, since they're going to be paying more taxes because they buy more higher priced items, while the lazy poor people are paying less because they're buying cheaper goods and services. It's a different kind of class warfare.

In a sense, but a far better one. Being productive is no longer punished, but cosumption is.
I don't support this (any) tax system but it is far better.

But earlier you said tax increases are frowned upon.

On 'main street' families they are. But certainly not on corporations. Oh

And then, most of the tax preparers and tax lawyers wouldn't have jobs, so you're destroying the industry.

So? These individuals weren't being productive in the first place, so it's good their jobs are gone. Their jobs existed only because of government law, not a genuine market demand.

[fatape]

%u2022 Decrease taxes on the lowest 10 percent of country's earners to 0

%u2022 Remove sales tax entirely

%u2022 above 10 percent of the country earners income tax would basically be equivalent to how much you earn in comparison to the rest of the country. (after business spending)
aka
-top 20 percent would pay a 90 percent tax rate ,
-lower 80 percent would pay 20 percent tax rate

%u2022 Make it so large sums of saving would be taxed if not spent within a certain amount of time , this would be to get money moving through the economy.

[kijin678]

Eliminate the IRS. Its that simple

[Tony-DarkGrave]

At 12/24/10 06:52 PM, kijin678 wrote: Eliminate the IRS. Its that simple

ugh no.

[All-American-Badass]

At 12/24/10 06:44 PM, fatape wrote: %u2022 Make it so large sums of saving would be taxed if not spent within a certain amount of time , this would be to get money moving through the economy.

It would over saturate the economy is what would happen. They can only spend so much before they can't think of anything to buy or give to charity.

[poxpower]

At 12/24/10 04:37 PM, SadisticMonkey wrote:

CEO wages are inflated by government action, and Austrians don't particularly like "managers".

Hum, ok, though shit?
What are they gonna do about it?

Further, when people like gum talk about "the rich", they're including those with incomes as OBSCENELY HIGH as $250,000 a year. You know, doctors, engineers, entrepreneurs. Those unproductive sorts.

Yeah, and?

But this is not a great argument for taxation

Who said it was??

Just out of interest, just some proof that America is a free market:

Why are you posting those?

[gumOnShoe]

A) Flat Tax - The flat tax is highly regressive. The poor have to spend next to all of their money. So taxing it at the same rate as the rich means that you're taking money they need to survive. Whereas when you tax the rich, you're taking their play money. Its called a regressive tax. And while it "works" its not the "fair" tax that is implied.

B) Moreover, just because you are rich, doesn't mean you aren't making more with respect to those around you. The point is there needs to be a limit as to how rich an individual is allowed to get in order to keep the system balanced.

C) Rich people in America don't ever pay the taxes they are supposed to pay. Due to all of the loopholes, the average rich person pays about 15% of their income. Everyone is currently paying 25% - 35% depending on what their pay rate is and whether the bush tax cuts are in effect.

D) High tax rates don't hurt the economy. We know this because during the most prosperous period of time for the U.S. (Post WWII up to Reagan), tax rates were well above 50% for the wealthiest (almost 90% at times) and that was the time period when the middle class did the best, we expanded our infrastructure, and generally did better than we did today. Since Reagan cut taxes real income of the U.S. has gone down, not up. Your grandparents made more (inflation adjustment) than you ever will.