How should taxes be made equitable?

This may perhaps seem an odd question, but in several debates and discussions I've had of late, this issue has come up. It seems that there are about four real ideas for taxing people in a fair and equitable fashion, and I'd appreciate some input. I am not aware of any technical terms for these concepts, so bear with me, please.

Ideas for equitable tax burden distributions:
1)Tax people in proportion to the value they derive from society; this argument has generally been presented as equating to taxing the goods that a taxpayer consumes, e.g. a national sales tax.
Does not require an income tax, and is, in fact, antithetical to it, as it supposes that you only benefit from the money you spend, which will not by necessity be all that you earn.

2)Taxing everybody for the same absolute amount, i.e. the exact same amount of money. Everybody pays the same in this system, every shares the financial burden for the society "equally."
Does not require an income tax, and is diametrically opposed to it.

3)Taxing everybody for the same percentage of their wages. This says everybody owes the same portion of their work in exchange for the benefits of the society, not the same dollar amount, as the prior system means everyone contributes the same portion of their time and money to the system, and the latter does not.
Obviously requires an income tax.

4)Distributing the burden of taxation equally; that is, recognize that (hypothetical numbers here) a 5% tax on a person making subsistence level wages might be equivalent in terms of affecting the taxpayer's ability to purchase goods and survive as a 45% tax on a person at a much higher income level. In this concept, equal discomfort due to taxation is the ideal, not equal dollar values or equal time, etc.
Obviously requires an income tax.


So what do you all think? What's the best system? Why? How do you convince someone (particularly someone that favors the first system) that they're wrong?

Thanks.

because the taxes we pay now is the goverment telling people that we have to pay just to live here

Unless you're saying that the country should have a sales-tax system, which would only tax voluntary transctions, I'm afraid I don't understand that position. One benefits from being here; should not one pay for those benefits?

That is how long you will need to work next year to pay your federal, state and local taxes. I don't know about the rest of you but I can't take it any more. We are over taxed and while the government over spends.

why not have a sales tax

rich spend more

there for they will be taxed more

Do your homework or continue looking foolish.

its easier to hide purchase than income. plus, services and stocks dont get a sales tax.

ok, so rather than the government telling people that we have to pay just to live here, why not make taxes voluntary? then we could have california-style referendums to vote non-payers out of the country ("off of the island").

I'm all for the user fees, no taxes system.

Those who are able should pay the most.

Why?

Didn't Lenin propose the same system? Didn't seem to work so well....

John Galt is coming...

educate yourself please

When I see the word "socialism" I think of an economic system where the means of producing and distributing goods is owned collectively or by a centralized government. Is that your concept of socialism?

Socialism means that workers, not private owners, would own and control the means of production: factories, farmland, machinery, and so on. In democratic elections, workers would vote for 1) their supervisors, 2) their representatives to a local and national council of their industry or service, and 3) their representatives to a central congress representing all the industries and services. Socialism has been proposed in many forms, ranging from republics to direct democracies, from centralized state bureaucracies to free market anarchy. Political scientists do not view the "socialism" nominally practiced by the Soviet Union as true socialism -- this was, essentially, a dictatorship over workers by a ruling elite. - Steve Kangas.

the same basic question remains. That is, can socialism work in the real world, especially on a large scale? atlflyfisher's point seems to be that it has been tried but was unsuccessful. atlflyfisher made specific reference to the USSR but this is not the only example.

A true soschalist system has never been tried. And you are asking the wrong question. Its not weather it would work or not, but how would you make it work? A more important question is would you want to do this.

Libiral and progresive values imbrace capitlisem, not sochaolim as the Pig man might lead you to beleive.

I think a good argument can be made that the USSR (Russia being one part of the USSR) was not a true socialist system. The same argument perhaps can be applied to China, Cuba, Nazi Germany, and a number of other nations and regimes. But what these governments were in reality (dictatorships) does not change the fact that they presented themselves as "socialist" governments (for example, USSR = Union of Soviet SOCIALIST Republics).

Would I want to do this (socialism)? I presume you mean creating a socialist form of government in the U.S. My answer is no, I would not. My reason is less a function of ideological/philosophical disagreement with the concept (although there are issues there as well) than it is with my lack of confidence that such a system can be operated in the real world in a manner consistent with the theoretical concept of "socialism" as you describe it.

When's the paper due?

No, I've actually either heard or advanced myself in debate pretty much all of these points. They're all options that have been put forth seriously by one person or another. Take a look at the American Constitution: Before the 16th amendment, only sales taxes and taxes of the 2nd variety I mention were allowed.

Incidentally, there's no paper. I'm a sick and twisted individual that debates and discusses these things for what passes for fun in my diseased mind. While I may write, it is pretty much always only for my own benefit.

The bane of science, is always the "assumption." And a classic assumption is that when we classify different modes of different modes of taxation, that we must "pick one" and only one, when in fact all modes have strengths and weakness suitable for different things. Taxes are not just a means to fund government, but also can have a regulatory effect on the economy.

Take a centrifugal/gravity valve as an example. You probably has seen them in action on steam engines. A(The internal combustion engine used a similar version, that you couldn't see, that regulated the timing before electronic ignition was developed.) A centrifugal/gravity valve consisted of two weighted balls on a pare of arms, mounted on top of a rotating shaft. As the shaft would spin, the balls would be throw out, lifting the arms, in tern moving a rod that would in turn close a steam valve, making the turban or piston spin slower. This in turn slows the shaft and the balls drop, in turn opening the valve, and speeding things up. It's a process called negative feed back. This regulator can automatically compensate for things that it can not know, such as if a hose should spring a leak some where and let the pressure drop, the regulator will compensate to keep the engine running at the same speed.

A good example of this is the progressive income tax. Conservatives love to paint this as some kind of "soak the wealthy" seam. But in truth, a progressive income tax has been show to be one of the most powerful regulatory forces for macro-economics. For one, it resist extremes of. The poorer pollution has vary little taxation, permitting them to keep more of what they earn, and turn around and invest those earnings into personnel capital. While those who have excessive have an incentive to cut back in their incomes. Both the poor and the rich will be regulated into a middle range, which has to be set by public policy. An ideal condition in a democracy that would treat "all persons equally."



Vertical = Taxation rate.

100% taxation ++++++++++++++++++ + ++++++++++++++++++++++++++++++
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0% taxation +++++++++++++++++++++++++++++++++++++++++++++++++++
0$ <-- Income level --> infinity


Conservatives feign ignorance over why we would want to rain in the top end. But look at the job loss situation we are faced now. Corporations are looking for the cheapest labor they can find (and that means slave labor) so they can prop up corporate earnings. Then draw down those same earnings by huge compensation packages for themselves. It has become routine for workers to see wage freezes, and even wage cuts, while the vary next day the CEOs vote themselves a pay raise.

A progressive tax structure also insures an adequate money supply remaining in circulation. One definition of deflation is "too few dollars chasing too many goods." But when vast sums of dollars are directed to one person, to be locked up in a privet stock portfolio, this has the same effect of deflating the money supply. A progressive tax will tax out this excess, placing it in government coffers, and then back into circulation, resisting deflation.

Thus. Coming to understand this, probably one of the most effective ways we can fight the off shoring of American jobs, would be reinstating the progressive income tax.

But this approaches for other sectors of the economy may work at all. Road maintenance for example, now to pay for it? Here you want the taxes to be proportional to need. The best way to do this is to tax fuel. This is also one reason why Europe taxes a lot more for gas than the US, because they chose to let the fuel tax more directly reflect the actual cost of road maintenance & construction, while we here in the US subsidize roads from other sources. This has forced European cities to evolve to be more efficient. Workers will not live closer to work, closer to schools and shopping areas, walking when ever possible. Which in turn could be argued promotes a better quality of live. While American cites evolved to being extremely spread out, and building road systems that far exceeds the districts ability to support them.

But ideally, as road usage goes up, so will your fuel tax revenue. And you want these two to be proportional to each other. Again, its a regulatory effect, but this time its the budget being regulated by usage.

Sales and property taxes however, let you target a specific geographical region. One way to support public parking garages, is by issuing a sales & property tax to the shops & owners that directly benefit from the parking garage, either directly, or indirectly.

Taxes can also regulate human behavior. Such as a sin tax or tax right off.

Of course, problems accrue when these conditions are not respected. Take Kansas for example that decided to levee a cigarette "sin" tax for school funding. The tax was high enough the folks, especially the poor, simply could no longer afford it, and quite smoking. Mean while, in creeps those "illegal smokers," namely the high school students who became addicted. Arguably, they were paying for their own education. This placed the state school board in a conflicting position. They actually found themselves trying to accommodate, or even encouraging, student smokers, so as not to hurt school revenue. State budget cuts have only made them more dependent on this revenue. The public anger over this however is secondary to the real and pressing fiscal necessity. The school board will continue to suffer this conflict of interest until the state over turns this particular sin tax.


But the mistake is to incorrectly inject philosophy where it doesn't belong. Arguing that one tax mode is better than the other, without subject of context, assumes that one tax mode is more "evil" than the other. And even though we make these arguments in an effort to be "fair," it ties the hands of government, and inevitably results in a system that is inherently unfair to some one. Governance is not a "one size fits all" situation. Instead, each tax mode should be seen as a tool, to be pulled out when this particular tool is called for. A hammer for a nail, a screwdriver for a screw, a wrench for a bolt, and so forth.

And one for which I shall take the time to give it the consideration that it deserves. Thanks for your time and effort!

I myself used to vote GOP and even Libertarian. But if you take some time to really read some of the ideas behind social democracy, you might have second thoughts. Try these URLs:

http://www.american-pictures.com/english/racism/articles/welfare.htm

It tells the story of how the Danes have fought time and time again for their welfare state. And it tells you what a welfare state is, and should be.

I highly recommend it!

Also, here are some other links of similar nature:


http://www.thirdworldtraveler.com/Economics/AmericanProsperityMyth.html

http://www.geocities.com/kew1788/SocialDemocracy.htm
http://www.geocities.com/kew1788/TakeBackNation.htm

http://maxspeak.org/gm/archives/00000791.html

http://geocities.com/aufheben2/stc_intro

http://faculty.insead.fr/fatas/econ/Articles/Chasing%20the%20Leader.htm

http://post.economics.harvard.edu/hier/2001papers/HIER1933.pdf

http://www.mylinuxisp.com/~cryofan/

The crux of the issue is, I think, this: there are appropriate limits on the forms by which government may, justly and properly, utilize its power to tax. If there were notsuch limits, there would be no justification for saying that the government could not tax the entirety of its people's income/wealth away, which is to most ideological sectors a repugnant notion. Are various modes of taxation appropriately tied to particular government endeavors or benefits (e.g. a fuel tax as you mentioned above), moreso than other forms of taxation? Perhaps so, perhaps even probably so, but this does not deny that every philosophy of political economy has philisophical underpinnings to support its belief of how far the government's power to tax, and in what manner, extends. So, what would you say are philisophically the appropriate limits, if any, on the government's ability to tax? I gather from your writings that you believe there are none, or at least very little; is this an appropriate interpretation of your writings? And if so, would you contend that there are any appropriate limitations on government action?

I am crafting a responce for you, and will post it soon. But I would like to know if you are aware of any of these philisophies.

And keep in mind that these are examples only, very brief, and only as accurate as I can be in these rushed conditions. Thanks for the patience.

By philisophical limits, I mean that various ideologies regard the role of government differently, and have corresponding views of what the extent of the powers that a government may justly wield.

Take, for example, a pure capitalist; they would take the position that a just government may only safeguard those rights of people that don't impose positive obligations on another--definitions of that are slightly lengthy, I mean that they wouldn't support a right to healthcare, a right to food, etc. They would support a government that safeguarded a purely capitalist market, and only such a government.

Then you have your libertarian socialists. That philosophy tends toward the view that economically, the government has an almost unlimited role to play, and should be omnipresent. At the same time, however, the libertarian socialist believes the government should not intervene in social areas, leaving those entirely to personal discretion.

Those are two brief examples that should help illustrate my point. I will reply further as you find it necessary to clarify my point.

I never said that there were no philosophies in taxation issues.
Indeed, I said, "the mistake is to incorrectly inject philosophy where it doesn't belong." Many philosophies do come into play. Such subjective things as ethics, culture, and even esthetics, all weigh into the thinking. A compelling reason why this should debated through a democratic process. Indeed, the American founding fathers focuses largely on taxation as a motive for rebelling against the East India Company. "No taxation, without representation," was a commonly sited war cry.

That said however. While I will agree there may be legitimate philosophical concerns, I have seen vary few that are legitimate. You presented a case in point in a previous point.

If there were notsuch limits, there would be no justification for saying that the government could not tax the entirety of its people's income/wealth away, which is to most ideological sectors a repugnant notion.

But a point of fact is that their ARE such limits in natural economics. My last post touched on the problems of the wealthy accumulating too much of the money supply. But over taxation produces the same result by artificially restricting the money supply. It also enforces a state of artificial poverty. But these are not philosophical concerns, but genuine economic ones.

But the other two that you gave me look a lot more legit, forgiving any socially dubious impositions. But that is outside our subject.

But here is a question. Do these philosophies confine economic/taxation policy? Or do they in fact, define economic/tax policy? Establish a kind of social reference point. The thing is that if a philosophy is a limiting factor for tax policy, than shouldn't that limiting factor be consistent? If so, than you can only have one correct philosophy, with all others being "false" as it were.

The danger here is that an "economic philosophy" will attempt to ever ride the economic reality, as it largely has with supply side. Taxation has become "wrong" or "evil" as a defining point of the supply mythology. The only thing that remains, is the relentless cutting of taxes, even as doing so only mounts the damage upon itself.

To paint an analogy, the first step to getting out of a hole that you have dug is to stop digging. But supply siders would have us continue to "dig our way out" arguing that you haven dug deep enough yet to be able to get out of your hole.

My point is this:
Philosophical arguments in regards of taxation and economics can at best give you a starting point. As a guide to shape the economy to best represent the communities cultural views. This of course means an economy can be diverse expressions of cultural values. And the economy and how it is structured may only be as limited by the imagination.

However. These philosophies do not negate natural economic realities. And by definition, if they are natural, than they universal, and will all be the same regardless of technology, scale, or cultural. Philosophies that respect these boundaries will thrive. Those that do not will eventually fail.

. . . a progressive income tax has been show to be one of the most powerful regulatory forces for macro-economics. . . . Both the poor and the rich will be regulated into a middle range, which has to be set by public policy. An ideal condition in a democracy that would treat "all persons equally."

The only problem with this "mathematically-obvious" logic, taking more from the rich than from the poorer, is that in the years since progressive taxation became a permanent fixture for the majority of citizens, the exact opposite appears to occurred in the longer term. This is no doubt because of the human factor within practice versus theory. The middle class is disappearing, and jobs are being lost to overseas production. The rich are doing better than they ever have. CEOs' salaries are one example.

I've read somewhere that some economists say that in the short term, progressive taxes hold down wages and boost employment, but in the longer term have the opposite effect, which is rising wages with lower employment. I believe it was during the WWII era that progressive taxes were expanded to include the majority of US citizens, with the exception of the poorest, and thereafter became a permanent fixture. Therefore, I use that as the timeline basis for my next concept, because prior to that income taxes were only applied to the wealthy, which was a type of progressive tax, but one much more limited in terms of the percentage of population that were subject to it.

This means we have had approximately 60 years of progressive taxation applied to the majority of the population in the US. I'm curious as to whether we're now at a short-term or long-term economic effect of it? My guess is the latter, based upon current observations about the economy, exporting of jobs overseas, and the salaries of professionals being increasingly out of relative relationship to their years spent in education versus those of only high-school education.

If the short term effect of the recent tax breaks to the richest entities, a decrease in the progression, then those cuts should represent an increase in the number of jobs coupled with wage restraint, but we're still looking for a boost in the employment numbers, i.e., we're still losing jobs coupled with continuing pressure on wages. This suggests to me that we're in the throws of the longer-term effect of progressive taxation than we necessarily were in prior decades where decreasing progressed rate differential boosted job creation and hence, the economy.

Poor working people need jobs that keep more than their heads barely above water, and all they appear to be getting now is Mcjobs. While it sounds great to take more from the rich than from the poor, more Mcjobs is what progressive taxation has brought us as a whole in the longer term.


Here's a few supporting references:
"show that a pure increase in tax progressivity reduces wages by reducing workers’ relative bargaining power."
http://www.frisch.uio.no/sammendrag/115.html

" The adjustment of gross wages to tax rates implies that a more progressive tax system raises the cost to firms of hiring more highly skilled employees and reduces the cost of lower skilled labor. A more progressive tax thus induces firms to hire fewer high skilled employees and to hire more low skilled employees."
http://ideas.repec.org/p/nbr/nberre/2203.html

" Thus, a high-yield proportional tax can have a far bigger equalizing impact than a low-yield progressive tax. Moreover, a simple model shows that the optimal tax system is biased against progressive taxes and towards proportional taxes, with a bias that grows with the degree of inequality of pre-tax incomes."
http://ideas.repec.org/p/edj/ceauch/41.html

" Using data from the Panel Study of Income Dynamics, we estimate that both higher tax rates and increased tax rate progressivity decrease the probability that a head of household will move to a better job during the coming year."
http://ideas.repec.org/p/nbr/nberwo/9226.html

" For the main middle-income groups (blue-collar men and moderate income earners among both male and female white-collar workers) an increase in progressivity reduces the pre-tax wages, whereas for the high- and low-income earners (male white collar and female workers, respectively) this is not the case."
http://ideas.repec.org/p/kud/epruwp/95-20.html

" It predicts major macroeconomic gains (including an 11 percent increase in long-run output) from replacing the federal tax system with a proportional consumption tax"
http://ideas.repec.org/p/nbr/nberwo/6248.html

on edit updated repeated hyperlink with correct link

. . . a progressive income tax has been show to be one of the most powerful regulatory forces for macro-economics. . . . Both the poor and the rich will be regulated into a middle range, which has to be set by public policy. An ideal condition in a democracy that would treat "all persons equally."

The only problem with this "mathematically-obvious" logic, taking more from the rich than from the poorer, is that in the years since progressive taxation became a permanent fixture for the majority of citizens, the exact opposite appears to occurred in the longer term. This is no doubt because of the human factor within practice versus theory. The middle class is disappearing, and jobs are being lost to overseas production. The rich are doing better than they ever have. CEOs' salaries are one example.

Your information is flawed and inaccurate. First off, progressive taxation was first incited with FDR's new deal. And is one of the forces responsible for turning around the great depression. And later had a great deal to do with the post war boom.

Second. Ronald Regan repealed the progressive taxation codes, dropping the high end from 90% to 40%. By definition, this no longer made it a progressive tax code, but a regressive. Subsequent tax cuts have lowered that bar even further. Currently the high end of the tax code is only 32%. Plus, numerous other loop holes have been spun into the tax code that gives even portions of this income a tax free status. Loop holes that the poor can not take advantage of. Mean while, FICA taxes have risen substantially, which are by definition oppressive taxation, further pulling the regressive tax structure closer to the oppressive spectrum.

There fore, the consequences which you site happened under a regressive tax structure.

If the short term effect of the recent tax breaks to the richest entities, a decrease in the progression, then those cuts should represent an increase in the number of jobs coupled with wage restraint, but we're still looking for a boost in the employment numbers, i.e., we're still losing jobs coupled with continuing pressure on wages. This suggests to me that we're in the throws of the longer-term effect of progressive taxation than we necessarily were in prior decades where decreasing progressed rate differential boosted job creation and hence, the economy.

Ah yes. The ever present "slide" theory, arguing that entrenched policies are still being felt despite reforms. Thus the current economic calamity is "not our fault."

Ironically, you are closer to the truth than you realize. Bush argues that his tax cuts results with an increase in jobs. This is what science commonly calls a prediction. Congress then gave him an opportunity to carry out his tax cuts. But if the new jobs have failed to materialize, than Bush's prediction was wrong, wasn't it. That in tern means that the school of theories Bush used to produce his predictions are flawed.

But here is the thing. Science allows us to make predictions retroactively. For example, we can say event X happened, resulting in event Y. Then look for history to look for X events, followed by Y events.

Genuine economics (which you have not sighted) predicts that progressive taxation insures an adequate money supply, among other things. It also relaxes the tax burden on the poor, allowing them to keep more of what they make, while also preventing the wealthy from hoarding wealthy, taking it out of the collective economy. Keeping it in the collective economy means wealth is available to finance loans used by both the poor (who can use the money to buy a house and stop renting) or by the wealthy (to build new plants, and thus creating new jobs.) And as the low end protect the poor's buying power, it helps to preserve their consumer buying power, from which springs demand, from which the rich will build their plants to fill that need. The high end also resist the plant owner from taking more than needed form his own factory's operations, such as forcing pay cuts to his workers, just so he can pad his own wallet.

This "mathematically-obvious logic" as you call it, is obvious because it is based on observation. And like wise, gives us a prediction. If true, than progressive taxation should coincide with high levels of growth.

And if you read this, you will find that this is so.
http://www.huppi.com/kangaroo/L-taxgrowth.htm

<snip>
During World War II (from 1940 to 1945), the size of the U.S. economy roughly doubled -- the fastest period of growth in U.S. history. And during this era, the top tax rate soared to 91 percent, and the bottom rate to 18 percent -- again, the highest in U.S. history. In 1944, federal taxes reached 21.7 percent of the GDP -- again, the highest in U.S. history.

The U.S. emerged from World War II as the world's only economic superpower. From 1947 to 1973, it experienced phenomenally high growth; the GDP grew at an average of 3.4 percent a year. The top tax rate remained between 88 and 91 percent until 1964; afterwards, the rate was reduced to 70 percent, still stratospheric by today's standards.

The economy slowed down after 1973, for reasons that economists are still debating. But what is not debatable is that taxes started falling for the rich in 1978 (with a capital gains tax cut). Reagan accelerated these cuts with a vengeance: the top income tax rate was slashed from 70 to 28 percent. Bush and Clinton raised them somewhat, to 39.6 percent today. But that is still roughly half of what it was during the 50s and 60s.
</snip>

First off, progressive taxation was first incited with FDR's new deal.

Not true, the Revenue Act of 1861 was its first Federal use. Anyway, there are plenty of sites to get the U.S. history of taxation. Usually, after most U.S. wars, Congress repealed and reduced taxes.

In the novel 1984, Orwell wrote of a 'continual war'. . . .

Social Security was enacted during the New Deal period, and provided for elders and handicapped financial security, among other things.

And is one of the forces responsible for turning around the great depression. And later had a great deal to do with the post war boom.

One of the correlated short-term effects: an expansion in jobs. There's another aspect of both Hoovers administration and FDRs that bears mentioning, although it's arguably outside of the topic of this discussion, the use of the Executive Order soared to new numerical heights, reaching its peak with FDR, but Hoover ran a close second. This was the beginning of the great expansion in Executive Branch power.

. . . repealed the progressive taxation codes, dropping the high end from 90% to 40%. By definition, this no longer made it a progressive tax code, but a regressive.

Here's how a group of three economists view the progressivity/regressivity of our taxes; the excerpt is from an economic working paper authored in 2002, published by the National Bureau of Economic Research:

"our fiscal system is highly progressive. Households earning the minimum wage receive 18 cents in benefits net of taxes for every dollar they earn. In contrast, households with million dollar salaries pay 54 cents in taxes net of benefits pe r dollar earned. Second, progressively is primarily restriced to the bottom end of the income distribution. Average net work tax rates of middle class households are relatively high compared with those of the rich. Third, while the poor face negative average taxes, they face significant positive marginal net taxes on working. Indeed, a minimum wage household that chooses to work is forced to surrender 34 cents of every dollar earned in net taxes. Those with earnings that exceed 1.5 times the minimum wage face marginal net taxes on full-time work above 50 percent."
http://papers.nber.org/papers/w9096
or
http://ideas.repec.org/p/nbr/nberwo/9096.html

This working paper's generalized ideas are confirmed by the table titled "Average Tax Rate (percentage of each group's total income paid in federal income taxes):"
http://education.gsu.edu/DCenter/other/taxes.htm
These statistics are not based upon "net of benefits per dollar earned," and they're restricted to Federal level taxes only, so one wouldn't expect the figures to be the same.

Clearly, the tax system is still progressive, the facts leading to your statement that the tax system 'is regressive' appears severely flawed.

Genuine economics (which you have not sighted) . . .

Looks pretty genuine to me, and RePEc is definitely not limited to the viewpoint or bias of any one author, political party, and/or country. It is simply a database for the dissemination of Economic Research. You may be able to contribute there, too.


. . . It also relaxes the tax burden on the poor, allowing them to keep more of what they make, while also preventing the wealthy from hoarding wealthy, taking it out of the collective economy.

The progressive tax does appear to reduce the tax burden on the poor, but the longer-term evidence suggests that the middle class pay for this in lower pretax income (wage restraint), the higher income brackets are not subject to wage restraint.

"In fact for the high-income earners an increase in progressivity increases the pre-tax wages."
http://ideas.repec.org/p/kud/epruwp/95-20.html

The Rich's pre-tax wages rise to a new equilibrium point to compensate for the higher taxes, meaning, that the progressive tax distributes income from the middle-class to the poor, The Rich are excepted, in practice; whereas in theory, The Rich appear to have the highest taxes. Therefore, the mathematically obvious conclusion that progressed taxes lead to more middle-class is wrong.

CEOs' current incomes are as good an example of pre-tax wages increasing to a new equilibrium as any. They make anywhere from 200-900 times what the "average salary" in a given geographic local is. I believe their meteoric rise began in the 70s, which may be a manifestation of the longer-term effect of progressive taxation.

Progressed taxes, in practice and long term, lead to less middle-class, not more. The middle classes only real weapon in the class war is the vote they cast at election time.

It might be fair to say the progressive tax results eventually in two classes: The Poor and The Rich. Once there are two groups, subsidies can be scaled back, the social contracts can be dissolved by future legislation, or even legislation such as is occurring with the Medicare bill right now. Have you heard of the coming nightmare of the bankruptcy of Social Security?

If that working paper's authors are correct, and I haven't yet seen any evidence to the contrary, then the group who does best under a progressed system are the high-income earners. Certainly, high-income earners wouldn't object to the implementation of a progressive tax, since their self-interest is protected by it.

Generally, the average U.S. citizens are forgotten, except at election time solely for our vote.

Repeating yourself is a poor substitue for argument.

First off, progressive taxation was first incited with FDR's new deal.

Not true, the Revenue Act of 1861 was its first Federal use. Anyway, there are plenty of sites to get the U.S. history of taxation. Usually, after most U.S. wars, Congress repealed and reduced taxes.

Pardon me? You are citing a 19th century law? I am sorry, I find it difficult to believe that something written one hundred forty two years ago? Dude, this predates the CIVIL WAR! I dare say a lot has changed senses then. Do you have any thing a little more current?

In the novel 1984, Orwell wrote of a 'continual war'. . . .

Social Security was enacted during the New Deal period, and provided for elders and handicapped financial security, among other things.

Irrelevant, and way off subject. Social Security is an entitlement program, not a taxation policy. And you have the whole of the Great Depression in between their dude. And do I understand you are quoting a novel?

And is one of the forces responsible for turning around the great depression. And later had a great deal to do with the post war boom.

One of the correlated short-term effects: an expansion in jobs.

That isn't even a complete thought. And isn't that what a boom happens to be, the expansion of jobs? Isn't that one of the promises Bush gave us with this tax cuts that have thus far failed to materialize? I notice than you through in "short-term" effect, as if that some how soils FDR's accomplishments in dealing with the Great Depression.

There's another aspect of both Hoovers administration and FDRs that bears mentioning, although it's arguably outside of the topic of this discussion, the use of the Executive Order soared to new numerical heights, reaching its peak with FDR, but Hoover ran a close second. This was the beginning of the great expansion in Executive Branch power.

And this mean………… nothing? We are talking about tax policy. Focus, dude, focus.

. . . repealed the progressive taxation codes, dropping the high end from 90% to 40%. By definition, this no longer made it a progressive tax code, but a regressive.

Here's how a group of three economists view the progressivity/regressivity of our taxes; the excerpt is from an economic working paper authored in 2002, published by the National Bureau of Economic Research:

But ever sense Ragan came into power, the tax codes has increasingly been made less progressive with each tax cut. So your argument that progressive taxation has caused our current economic problems is flawed. Making the tax code less progressive is the cause of the current problem. Continuing to reduce the progressively of the tax code will only deepen the problems.

"our fiscal system is highly progressive. Households earning the minimum wage receive 18 cents in benefits net of taxes for every dollar they earn. In contrast, households with million dollar salaries pay 54 cents in taxes net of benefits pe r dollar earned.

Oh that one is going to cost you. (All you lurkers out there? Pay attention, I am about to gut this guys argument.) First, the poor side of the equation:

Households earning the minimum wage receive 18 cents in benefits net of taxes for every dollar they earn.

Now the rich side of the equation:

households with million dollar salaries pay 54 cents in taxes net of benefits pe r dollar earned.

Notice any thing "different." Hay! We are comparing apples and oranges here be deliberately holding both to different standers. The first rule to comparing things is to compare LIKE things to the same standard. In fact, this is so confusing that I talked to my dad who doses taxes professionally. He tells me that "net tax" as used here is not ligament terminology. (Or at least he has never heard of it.) Most likely he is talking about taxable income or taxes computed after deductions. No clue about what he means by the rich formula. Only that the upper tax bracket hasn't been at 54% sense Carter.

The poor side of the formula, however, is pointing out that the first tax bracket is set at 18% of taxable income (net of taxes). What the author doesn’t tell us is that the million dollar salary is ALSO taxed at 18%. Both rich and poor pass through the first bracket, and pay their taxable income at the rate of that bracket.

First, both rich and poor get to take out their deductions. They have the option of computing against a standard deduction, or itemizing, and can deduct the greater sum from there gross income. But hole on a minute, Joe Millionaire gets to deduct his jet plane, his swimming pool, all six of his mansions, golf clubs, and those martinis he bought his congressmen. What is Joe McJob get to deduct? It doesn’t meter unless these deductions are worth more than the standard deduction.

Any way, Joe Millionaire man deducting his new Lexus. Mean while, Joe McJob chouses to take the standard deduction.

Now we move on to commuting our taxes, what tax rate do they pay? Joe McJob payees 18% and Joe Millionaire pays 54%? Eeeeee. Wrong. They both pay the exact same rate, on the first 30,000 of taxable income. Of course, senses Joe McJobs only makes minimum wage so we are looking at less than 26,000/yr gross income. And this is poverty subsistence. So our time with Joe McJob comes to an end.

Joe Millionaire however, still has some ways to go. After his first 30,000 is taxed at 18%, then next 40,000 is then taxed at 28%, any thing left over is then taxed at 32%. (The upper tax bracket has not been at 52% sense Carter. So your information is DATED. Than again, you seem to be stuck in the 19th century, so perhaps having current information is too much to ask for you.) FYI kids. Doubt this? Pull out last years tax filling instructions.

Oh but wait, our tax story is not over with yet. We have the FICA tax deductions, as well as Social Security deductions taken out of our pay checks BEFORE our gross income. So Joe McJob is paying taxes we are not seeing on our W2. Doubt that? Take a look at your pay slip. These pay roll deductions are capped, so both Joe McJob and Joe Millionaire have the same cap on wages. But Joe McJob will never ever see that cap because he will never ever make enough to reach the cap.

Mean while, Joe Millionaire doesn’t have to make his earnings through a salary. Joe Millionaire will go to his bodes on the board and ask for stock options. Income from these stock options is listed as capital gains, and IS NOT TAXED.

Congratulations SympleTrend, you have shown us that rich pay more in taxes. Thank you Mr. Obvious. But to you not think that this is so because Joe Millionaire MAKES MORE?

But you know this already, don't you. For you also posted the following:

Second, progressively is primarily restriced to the bottom end of the income distribution. Average net work tax rates of middle class households are relatively high compared with those of the rich.

Translation: The poor pay MORE taxes on there earned dollars than the wealthy do. This supports MY argument. Oh, but there is more.

Third, while the poor face negative average taxes, they face significant positive marginal net taxes on working. Indeed, a minimum wage household that chooses to work is forced to surrender 34 cents of every dollar earned in net taxes. Those with earnings that exceed 1.5 times the minimum wage face marginal net taxes on full-time work above 50 percent."

Hold on a second here. He JUST said, "Households earning the minimum wage receive 18 cents in benefits net of taxes for every dollar they earn." Now we have this, "a minimum wage household that chooses to work is forced to surrender 34 cents of every dollar earned in net taxes." Which is it? Is if 18% or 34%?

Clearly, the tax system is still progressive, the facts leading to your statement that the tax system 'is regressive' appears severely flawed.

But only just. The tax code is far less progressive now than what it was. And continued tax cuts for the wealthy will undo this. Which is your point, right? Am I to believe that having the poor pay the same (flat tax) is some how more equitable than a progressive system? Here is a clue for you. Rich folk do not need brakes on their taxes.

Looks pretty genuine to me, and RePEc is definitely not limited to the viewpoint or bias of any one author, political party, and/or country. It is simply a database for the dissemination of Economic Research. You may be able to contribute there, too.

That may be so. But you HAVE presented this information with a clear bias. And not with a great deal of command over the subject as well. And while this sight may not be politically biased, it dose not mean its information is legit or to be trusted. A bad sign is the fact that this sight is here to SELL papers. Real economist publishes publicly. Trying to sell economic papers probably means they are trying to pander to the status qoue.

And you STILL have not presented ANY economics what so ever. All you have done thus far is jabber on about 19th century tax law, social security, and then plagiarize a privet paper.

I have explained to you how progressive taxation insures an adequate money supply, and offers some protections against the top end from rapping the poor end for there own gains.

You have claimed the opposite, but as yet to present any argument or reasoning why this is so. In fact, you have not challenged my reasoning at all.

. . . It also relaxes the tax burden on the poor, allowing them to keep more of what they make, while also preventing the wealthy from hoarding wealthy, taking it out of the collective economy.

The progressive tax does appear to reduce the tax burden on the poor, but the longer-term evidence suggests that the middle class pay for this in lower pretax income (wage restraint), the higher income brackets are not subject to wage restraint.

Straw man. Progressive taxation has no effect on lower end wages. Only in reducing the taxation on those wages. Strawman, higher incomes are NOT subject to wage restraints, but they WILL pay more in taxes on that income. This established an optimum point where they will pay more taxes in wages. But that dose not mean they have to suddenly become poppers.

However, this safe guard was removed with the top end of the tax bracket was capped below 50%. The wealthy can now make incomes into infinity with no penalty. And greed is pushing them to cut the wages of the workers, just to line their own pocket, coinciding with the constant erosion of the progressive taxation. That is where your "lower pre-tax income" is coming from. Consistent with MY prediction.

The Rich's pre-tax wages rise to a new equilibrium point to compensate for the higher taxes,

Ridiculous. The taxes on the wealthy have NOT been going up, but in fact have been going down. If this were true, than we should be seeing top end incomes dropping. This is clearly NOT the case.

meaning, that the progressive tax distributes income from the middle-class to the poor, The Rich are excepted, in practice; whereas in theory, The Rich appear to have the highest taxes. Therefore, the mathematically obvious conclusion that progressed taxes lead to more middle-class is wrong.

No, this is just gibberish. The rich pay more in taxes, because they MAKE MORE INCOME. And the reasoning doses not follow.

CEOs' current incomes are as good an example of pre-tax wages increasing to a new equilibrium as any. They make anywhere from 200-900 times what the "average salary" in a given geographic local is. I believe their meteoric rise began in the 70s, which may be a manifestation of the longer-term effect of progressive taxation.

This despite the tax cuts they have received under Ragan, Bush, and under Bush Jr.

Now let me hit you with a response to this spasific myth.

A common supply-side argument is that tax cuts for the rich actually shift the tax burden upward. For example, during the 80s, the top federal income tax rate was cut from 70 to 28 percent. And during that time, the richest 1 percent increased their share of all income taxes paid from 17 to 28 percent. Supply-siders frequently cite this as evidence that tax cuts are beneficial to the poor, although this is a classic example of how to abuse statistics.

The first thing to note is that the tax bill of individual millionaires did not rise during the 80s. They went down. Over the whole decade, from 1980 to 1989, the average individual tax bill of those who made over $1 million a year fell from $980,869 to $634,196 -- a tax cut of 35 percent. (1)

Despite falling individual tax bills, the rich as a group paid a larger percentage of total federal tax collections in the 80s. That is because the group itself was rapidly expanding. Between 1980 and 1989, the number of people reporting annual incomes of $500,000 or more skyrocketed from 16,881 to 183,240 -- a tenfold increase. In 1980, this group paid $8.1 billion in taxes, or 3 percent of all federal income tax collections. By 1989, they paid $59.4 billion, or 14 percent of the total. (2) -- Steve Kangas
http://www.huppi.com/kangaroo/L-taxshare.htm

You have just presented a variation on the shifting tax burden argument, and is no more valid now, than it was then.

And you STILL have not presented ANY economics what so ever. All you have done thus far is jabber on about 19th century tax law, social security, and then plagiarize a privet paper.

First off, you just accused me of plagiarism. That is a clear personal attack. There are other personal attacks in your posting, but that is arguably the most brazen. I haven't notified the moderators. Maybe someone else will.

To set the record straight, under fair use, I have committed no plagarism, all were quoted with relevant links to the source, with clear markup to show the quoted portions. For the articles that aren't available on the University of Connecticut's RePEc database for free, I believe that an enterprising individual, located near a large library, either a public or university one, can probably research them for free; at least, I would be surprised if they couldn't. But, yes, in those cases they probably will need to do a little more than 'just click' their mouse.

Regarding the novel I referenced, I believe I left just barely enough there for my meaning to be clear, but perhaps it's a little too subtle for some. Studying the history of US taxation does present some insight into how the current taxation code has grown so complex, loopholes for some, especially corporations; and how today's code is patched together from many years of congressional legislation.

You also attack my "short-term effect" terminology in response to your statement of FDR's New Deal. Perhaps I should look for that reference, I mentioned it earlier, oh yes, here it is:
" Balancing the Budget: Long-Run Adverse Effects of Progressive Taxation"
http://ideas.repec.org/p/aah/aarhec/1999-1.html

I also decided not to discuss Money Supply with you, as I felt that "credit" is a whole 'nuther subject. And, in this post, I'm deciding not to address many of your other points. You do make one good point, but the blather that one needs to get through in order to find it was truly overwhelming, at least to me.

Regarding the one link you did post, it was about overall tax cuts and increases, which is something entirely different from the points the economists I linked to were writing of.

I have achieved my objective here, which was to present some studies done by people more learned than myself that I believed was relevant to the discussion. My apologies to "you" for choosing "your" post to reply to.

Have a nice holiday season.

First off, you just accused me of plagiarism. That is a clear personal attack. There are other personal attacks in your posting, but that is arguably the most brazen. I haven't notified the moderators. Maybe someone else will.

I was not attacking you. I was mocking you. If the best you can do is cut and past, than you do not understand what it is you are posting here. You are in no position to defend any thing. Your "brittle ego" defense has been noted.

Regarding the novel I referenced, I believe I left just barely enough there for my meaning to be clear, but perhaps it's a little too subtle for some. Studying the history of US taxation does present some insight into how the current taxation code has grown so complex, loopholes for some, especially corporations; and how today's code is patched together from many years of congressional legislation.

Instead of shooting for subtlety, why not come out and say what you mean in as precise a manner as possible, Debating means NOT mincing your words.

But if you want to talk about the history of taxation. Then explain to me why times of greatest prosperity coincide with higher taxation. You have already recognized this fact by arguing the slid theory. And as far as the loop holds that find there way into the tax code, the loop holes were written in by the GOP, by the supply siders. Am I to believe you think that the Democrats should be given a shot? Naa, that would be arrogant presumption on my part, wouldn't it.

You also attack my "short-term effect" terminology in response to your statement of FDR's New Deal. Perhaps I should look for that reference, I mentioned it earlier, oh yes, here it is:
" Balancing the Budget: Long-Run Adverse Effects of Progressive Taxation"
http://ideas.repec.org/p/aah/aarhec/1999-1.html

Oh boy, more links. Yet still no response from you in regards to my last argument on the subject. Explain to me what changes from short term, to long term, to produce a different result? Your claim that progressive taxes may increase employment short them, but reduces it long term is non squatter. If progressive taxation is a causation, than your argument is not even possible, by definition. If your claim that employment is increased short term, but not long term is shown to be true, than progressive taxation is NOT causal to the effect, hinting an another out side force at work. Ether way, your assertion if false. Its false, because it CAN NOT be true. One link or a thousand links will not change this.

And it is still a straw man. I have not argued that progressive taxation influences wages, or employment. I have made the claim that progressive taxation insures an adequate money supply. But you know this as well, hence:

I also decided not to discuss Money Supply with you, as I felt that "credit" is a whole 'nuther subject.

So sir, I consider them linked, as I have argued. Progressive taxation extracts wealth from accumulated pools of wealth that have been taken from the economic flow of goods and recourses, and places it back into circulation. If you "decline" to disuse this, than is the room to under stand that you surrender the point?

Regarding the one link you did post, it was about overall tax cuts and increases, which is something entirely different from the points the economists I linked to were writing of.

I disagree. The reason why I posted it, was because it directly contradicted your claims that progressive taxation is some who detrimental to the economy. Steven Kangas argues against this position, which was why I posted his link.

you need to read up on some things before you debate tax issues. seriously. net of tax means earnings after paying taxes & the 54% is the effective tax rate for high income earners, which includes FICA taxes. and receiving 18 cents versus paying in 34 cents, you're not understanding...nevermind. just read up. for a while.

"Your information is flawed and inaccurate. First off, progressive taxation was first incited with FDR's new deal."

wrong. progressive taxation existed long before FDR. what was accomplished was reform of the Internal Rev. Code in 1934; among other things it brought taxes to the masses.

"Second. Ronald Regan repealed the progressive taxation codes, dropping the high end from 90% to 40%. By definition, this no longer made it a progressive tax code, but a regressive."

wrong again, but you later cite correct rates. the highest marginal rate was 70% before Reagan brought it down to 31% or around there. JFK proposed & LBJ pushed through a drop from 90% to 70%. by definition, any tax code that has progressively higher rates as income climbs, is progressive. this was still the case in the 80's.

"Currently the high end of the tax code is only 32%."

and, wrong again. Clinton increased the top rate to 39.6% with phase outs of exemptions thereby making the top rate a flat 40% for the rich. the latest tax bills will bring this rate down to 36%.

"Plus, numerous other loop holes have been spun into the tax code that gives even portions of this income a tax free status."

please elaborate on what loopholes you're talking about.

"The high end also resist the plant owner from taking more than needed form his own factory's operations, such as forcing pay cuts to his workers, just so he can pad his own wallet.'

as opposed to the government's fat wallet? and would we claim efficient use of funds?

Honestly, I wouldn't touch it with a ten foot pole. At least not just yet.

If we attempt to touch the tax code and fail, it could set a bad precedent. We can only do it if we have a majority both branches of government.

This is because if we even entice ourselves with messing with the tax code, the other party will want to do it.

But what about the theory? Why it may not be possible to change public policy at this point, if one could, how SHOULD it be changed? You've got some good opinions, let's hear them.

#1 comes the closest. in fact, i disagree that a sales tax is in proportion to the value derived from society. bill gates might purchase, say 100 times the stuff that i do, but he derives FAR more from society than i do. i work for a living, mister. the example would be even more obvious with someone who suckles at the government teat, like dick halliburton cheney.

personally, i think a wealth tax would be equitable and economically sound. it encourages people not to hoard, i.e., to put their assets into economic service. that's what moves an economy.

of course, it's political suicide to propose it, and even if it did pass, it would be too easy to conceal assets, far easier than concealing income.

I imagine one would accumulate wealth by saving/investing the unconsumed portion of one's income left after taxes and expenditures, so I'm not sure it would be appropriate to tax it anyway. After all, you have income A, it's taxed, you save portion of income A in amount B, then B is taxed in addition to next years income, and the cycle just repeats...Seems kinda harsh, don'tcha think? And wouldn't a wealth tax discourage capital investment as well, the kind businesses do to increase productivity? Wouldn't that completely shoot any industrialized society right in the foot? If it wouldn't, why wouldn't it?

"harsh" depends far more on the numbers rather than the form of the tax. an 80% sales tax is far harsher than a 0.2% wealth tax, to take it to a silly extreme.

anyway, i was suggesting a wealth tax in lieu of an income tax, not in addition to one. the idea is to make EARNING money attractive, and HOARDING assets less so.

so in fact, after a point, you have to invest all your wealth just to pay the tax. obviously this would have to be a very high amount to keep wealth somewhat attractive. beyond some high point, the ONLY way to accumulate more wealth would be to increase productivity, i.e., the return on your assets.

on the other hand, society would change to stop regarding those who hoard wealth as the pinnacle of success. due to the wealth tax, but no sales of income tax, the ideal tax avoidance strategy would be to earn a huge amount and to spend it all during the year. this would really keep the economy moving.

obviously there are tweaks, e.g., special care must be taken to ensure sufficient saving for retirement, etc., but you can see the broad strokes.

Investments in capital goods? What would qualify as wealth in this system? Would machinery, computers, etc., or are we talking about cash, savings, stocks, etc.? What about real estate?

just highlights the things that will occur if the tax code is reformed.

happen with our CURRENT tax code. Our current code is a gigantic mess that needs whole professions to interpret and deal with it. I'd hardly call it ideal or even necessarily tolerable or adequate. And nonetheless, it is not necessary to avoid debating a possible better alternative to a current system just because it might be a pain in the arse to alter the system. I personally am glad some battles were fought--for instance, I can think of various ethnicities which are probably quite glad the civil war was fought, don't you? Now, that's an extreme example, but it does prove the point, I hope.

no one ever questions the assertion that the current tax code is overly complex and unproductive.

well, ok, i'll bite.

convince me that the current code has SPECIFIC inefficiencies or stupidities, ABOVE AND BEYOND what we can reasonably, if cynically, expect from ANY form of taxation given that politicians will ALWAYS be at least comewhat corruptible.

i'll take the view that the current tax code is actually, by and large, carefully crafted to provide for a reasonable degree of fairness, equitability, justice, efficiency, and incentives where appropriate. yes, we all can find a few idiocies inserted by special interests (corporations, i mean) and we'd all like to tinker with it at the edges (adjusting marginal tax rates being the obvious favorite.

but i maintain that the current basic system ain't all that bad. the only reason we keep chatting up alternatives is because the grass is always greener. we loath our system because it's the one that currently exists. bring a 'better' system into existance and that will quickly become the one we all hate.

A few quick things before I get into this.

First, while I'll gladly focus on this for a while, when the grass looks greener on the other side, that's the first indication that it really is. :)

Second, I'll take some time and find as specific of examples as I can soon, but actual facts and figures will be a little while in coming. Thanks for your patience.

Let's start with a little thought exercise.
*Begin with the premise that the current system is quite complex, the result of decades, centuries, of tinkering and argument and compromise.
*Observe that it has grown so complex that whole industries have arisen to oversee the tax system and assist in compliance. Examples include the IRS--an industry in its own right, the vast number of tax lawyers we have, an incredibly large portion of the accounting industry, and many others besides.
*Note that the services of these industries cost billions, if not tens of billions of dollars a year. These costs must be borne by businesses and workers alike. The costs that the businesses incur will eventually trickle down to the workers.
*This money, which is spent on the services of tax-related industries, could be spent to increase production of business, invest in technological R&D, or spent on other goods.
*In other words, the vast externalities created by having an overly complex tax code create humongous financial ripples that affect every segment of society, and takes money that could otherwise be spent on improving the overall quality of life and sinks it into compliance with and overseeing of the tax system.
*Conclusion: The system is too damn complicated, and wastes money.
*Hypothesis: There exists another system which wouldn't be so damn complicated and would waste less money.

Thoughts?

I've begun pulling some statistics together.

"In addition to the $8 billion needed to operate the IRS, at least $250 billion (that is $850 for every man, woman, and child in this country) must be added to account for the cost of complying with the tax code. Massive amounts of our national wealth are consumed merely by measuring, tracking, sheltering, documenting, and filing our annual income." (http://www.fairtax.org/origins.asp)

Additionally, testimony before the House Ways and Means committee notes that compliance costs are around $300 billion dollars. (Testimony of James L. Payne, "Replace the Federal Income Tax," Hearings before the Commitee on Ways and Means, House of Representatives, June 6, 7, and 8, 1995, Serial 104-28, p. 183-187)

Further, estimates are that in 1995 American businesses spent 10.2 billion hours complying with tax codes, or the equivalent of 5.1 million full-time workers doing nothing but "tracking income and preparing tax returns." (http://www.fairtax.org/pdfs/currentsystem.pdf)

I'll give you more as I find it.

The current income tax concept of this country EXEMPTS criminals from paying ANY federal tax. These people, whether they be drug dealers or white collar criminals, derive their income from illegal activities. Obviously, they aren't going to report that income to the IRS. Heck, not paying income tax is a pretty good incentive to commit criminal activity.

Consider a national sales tax... EVERYBODY (criminal and law-abiding citizen alike) buys stuff and would, therefore, pay taxes. It seems pretty stupid to me to allow the worst among us to get a pass on federal taxes while those of us who work hard and keep our noses clean get stuck with the bill.

Criminals would not pay a sails tax for exactly the same resone they would not pay an income tax. That is the whole point of criminal activity to escape taxation. Vea a black market.

Do criminals pay sales tax on the drugs they sell on the street?

I disagree that "the whole point of criminal activity to escape taxation". I'm sure most criminals are in it for the money and to avoid having to work at a regular job. Avoiding income taxes is a "fringe benefit" not the prime motivation.

I am also sure that most criminals get their "stuff" (houses, cars, clothes, gasoline, etc., etc.) the same way the rest of us do. They go down to a legitimate store and buy what they want (with their illegally obtained money). When they do, they pay sales tax just like everybody else.

I disagree that "the whole point of criminal activity to escape taxation". I'm sure most criminals are in it for the money and to avoid having to work at a regular job. Avoiding income taxes is a "fringe benefit" not the prime motivation.

Actualy this was YOUR asertion. Not mine.

I am also sure that most criminals get their "stuff" (houses, cars, clothes, gasoline, etc., etc.) the same way the rest of us do. They go down to a legitimate store and buy what they want (with their illegally obtained money). When they do, they pay sales tax just like everybody else.

Not when these transactions attracts scrutiny, they do not. Asuming of course you are not Rush Limbaugh, than you can prieaty much do what ever you want.

"not paying income tax is a pretty good incentive" for criminal activity. This is not the same as a primary motivation.

You are right that when purchasing attracts scrutiny some criminal types may look to make off-the-books buys but I don't think this is the case for a large percentage of these people. Big-dollar criminal activity and/or well-recognized names (Martha Stewart, Rugh Limbaugh, etc.) will attract scrutiny, the corner crack dealer and local 'ho won't attract nearly as much.

Ever hear of Enron?

They are expected to report income and pay.
It's one of the back door ways to get high-end criminals.

Yes, they do convict some criminals on tax evasion charges instead of on their original criminal conduct (Al Capone comes to mind). But I don't think this happens that frequently and, as you say, I'm sure it is more common with "high-end" criminals who pull down a LOT of money.

I have a good friend who is a tax attorney. He has a great saying in his business: "Pigs get fat, hogs get slaughtered". Meaning, if you are a low-end crook, you can probably get away with it but if you are high-end, you will be noticed and taken down.

The point is, most criminals are of the low-end variety who can go on making illegal income (and not paying income tax) for a long time.

The IRS likes fat targets, so what?
There is no such exemption. Even if you are not prosecuted
for your crimes, the IRS still expects you to file and pay,
and they will go after you if they think it's worth the trouble.
Sometimes criminal prosecutors will go after "difficult" cases
this way when they cannot nail them otherwise, but their are
plenty that are just nailed for the money.

He was brought down for tax evasion for not paying taxes on his criminal activity.

I proposed collecting it from companies based on stock value. Every year a company turns over say 1% of it's stock, and Uncle Sam auctions it off like he does bonds in a Dutch auction. It can then buy the stuff back over the year.

This should:
* be efficent since the bookwork is done once per company not job.
* discourage execs from inflating their company's value
* not discourage hiring like payroll/income taxes
* tax intelectual property which gets a free ride compared with factories and land.
* discourage hoarding, since sitting on money costs money

I got to this idea by think hey how can we redistribute wealth in an orderly fasion, as opposed to Mugabee land reforms.


---------
As for the other taxes asked about:
1) Sales tax, or if possible usage fees. Drive the road pay the toll.
2) Head Tax. A family pays per head or we chop em off.
3) Flat Tax. A bit progressive.
4) Progressive Income Tax. What we have now. It's good but the rich still find lots of writeoffs and shelters.

>>Ideas for equitable tax burden distributions:
1)Tax people in proportion to the value they derive from society; this argument has generally been presented as equating to taxing the goods that a taxpayer consumes, e.g. a national sales tax.
Does not require an income tax, and is, in fact, antithetical to it, as it supposes that you only benefit from the money you spend, which will not by necessity be all that you earn.<<

We have a consumer based economy which should scratch any notion of a national sales tax. Inverably these are regressive.

>>2)Taxing everybody for the same absolute amount, i.e. the exact same amount of money. Everybody pays the same in this system, every shares the financial burden for the society "equally."
Does not require an income tax, and is diametrically opposed to it.<<

I am not sure I follow..Tax everyone 70K irrespective of earnings????

>>Taxing everybody for the same percentage of their wages. This says everybody owes the same portion of their work in exchange for the benefits of the society, not the same dollar amount, as the prior system means everyone contributes the same portion of their time and money to the system, and the latter does not.
Obviously requires an income tax.<<

I have no problem with a flat tax so long as it is revenue neutral, taxes both earned and unearned income equally, and has a deduction at least indexed to cost of living. For a family of four this would mean the first 34K or so of income is untaxed and a fixed revenue neutral rate thereafter. An additional advantage is that we could eliminate SS and simply set up a system indexed regressively by need. All in all it would make for a much more efficient system.

>>4)Distributing the burden of taxation equally; that is, recognize that (hypothetical numbers here) a 5% tax on a person making subsistence level wages might be equivalent in terms of affecting the taxpayer's ability to purchase goods and survive as a 45% tax on a person at a much higher income level. In this concept, equal discomfort due to taxation is the ideal, not equal dollar values or equal time, etc.
Obviously requires an income tax.<<

Equal discomfort??? If I make 10K and pay 5% I am equally discomforted as someone earning 10M and paying 45%? Do you really think so???


>>So what do you all think? What's the best system? Why? How do you convince someone (particularly someone that favors the first system) that they're wrong?<<

My personal preference would be a revenue neutral flat tax as discussed in question 3 but absent that our current progressive system would be the best.

We have a consumer based economy which should scratch any notion of a national sales tax. Inverably these are regressive.

I will make it a point to remeber that. Care to expand on it?

PS: Welcome to the DU. :hi:

1)That a sales tax is regressive (which I understand to mean that a person with a lower income tends to pay a greater portion of their income in taxes than someone with higher income) goes without question. At the point at which everyone spent 100% of their income it would be a flat tax, and that will likely never happen. Now, of course, if one is going to simply dismiss that fact as fatal for this method of taxation, one must say why...

2)Yes. If one looks at the original phrasing of the constitution, such flat (in absolute terms, not percentage based!) taxes were one of the few allowed (in addition to excises, tarriffs, etc.) by it. Does that make sense? Maybe not, but that is how it reads, and how many taxes were implemented.

3)Interesting idea. What part of this system you propose would be indexed regressively?

4)Those were randomly chosen example numbers; perhaps "sharing the burden" would mean a 1% tax rate at the low end and a 99.96423244233572832975720375572390232875023578% tax rate on the high end. The point remains the same, and is the idea behind a progressive system of taxation, which is what the 4th option I presented was; perhaps this needed to be made more clear than it was.
Nonetheless I would not expect the concept I presented to be bound so tightly to numbers I indicated were hypothetical in nature.

Nonetheless I would not expect the concept I presented to be bound so tightly to numbers I indicated were hypothetical in nature.

QS, why is it you think taxes should be equitable...or do you? The thing that wares me out about debates over tax structure is that there is no way for everyone to be satisfied...someone will always feel themselves overtaxes...even if the rate is 5% and someone one else paid 4%. If we are to break this down purely to philosophical terms than I would say that taxes should never reduce ones quality of life. I was a graduate student in 80-82 and had a TA position that payed a whopping 4 grand a year. Out of that I paid a small amount of federal personal and payroll taxes, property taxes as part of rent, plus any assortment of other state sales and ad-val taxes...In short, 100% of my income was subject to multiple layers of taxation which probably gave me a total effective rate of about 25%. Today, I am a partner in an property investment and management company and in a good year will make 100 times what I made as a grad student plus pay a total effective rate around 35%. At which point in my life was my quality of life most affected by the taxes I paid? When was I over taxed?

This is why I really don’t understand just what it is you are looking for. The vast majority of Americans are over taxed...in that taxes do degrade quality of life...but not for those of us lucky enough to be in the top 5 or 1%.

As I said before, I would prefer a flat tax that was revenue neutral and a hefty cost of living deduction. Roll both payroll and personal taxes together and get rid of the current structure of SS. Then for SS payouts do a cut off at about 70K and pay regressively down to zero. As such someone with 70K in other retirement earnings would get the lowest in SS and medicare payments and someone with no retirement earnings would get the maximum in SS and medicare payments. This would in effect eliminate the top 10% from SS benefits but it would also lower total SS payments and therefore lower the total effective tax rate.

But, this is fantasy land and I know it, so the second best is a progressive tax structure and I don’t think a millionaires tax of 50% would be too high nor do I think it would be at all unfair. As is, I thing the wealthy in this country are undertaxed based on the benefits they've gained.

I wanted to hear more about what you thought, and I was under the impression that you did not understand I meant those numbers as variable, hypothetical examples only. Thank you for offering further clarification of your position, this last post was very illuminating.

The only fair tax system, I believe, is a usage-based system. What would be more fair than a system that charges you for what you use or consume. If I own a house, why should I have to pay school taxes if I have no children? Why am I paying 25-30% income tax to fund social programs I don't use, don't agree with or don't even know exist? Why should my money be taken from me to pay for a war I don't believe in? I believe the tax system we have in place today is unfair, unjust and represents a form of State Socialism. Why do we only give a portion of our money to the government - why not give them ALL of our daily earinings and let them provide EVERYTHING for us?

Through a usage-based tax system, there would be no unecessary public spending since public spending would be based upon demand. Wouldn't this be a better system?

At least, this is the technique the Republicans here in CO are using to eliminate government.

Why should you pay school taxes when you don't have kids in school? The same reason you pay taxes for prisons even though you don't know any prisoners. It's a benefit to society as a whole to have an educated populace.

Why pay taxes to fund social programs that you don't agree with? That's what's called "representative government". Though you personally may not agree, enough people being represented by a government DO believe in them, so they are funded. I don't use Medicare - yet - but it would be idiotic for me to say I don't support it.

All of this ignores one of the biggest problems with fee-based taxation - that is, it makes most services and opportunities unavailable to those who cannot afford them. The actual cost of educating a child in my district is about $6,500/year (and that's just the operating expenses, not to mention capital costs). Most of our parents would not be able to pay this amount for one child, let alone two. This just goes against what I believe America is all about - the opportunity to rise above your circumstances to better yourself. Without access to education, the very first step on the ladder is missing.

So, no this would not be a better system. It would inevitably lead to a greater divide between the haves, and have-nots. I've been to countries where this gulf is great, and they are not pretty places to live.

I don't have time to read all of the posts on this thread and apologize if I am repeating someone else's post.

A flat tax works like this:
The first 'X' amount (say $20K) of a workers wages goes untaxed. Any amount over that is subject to 'T' percentage (say 15%). Someone making $20,100 would pay $15 in taxes. A wealthy person making $120K would pay $15,000 in taxes.

Notice that this tax is not regressive. $15 represents 1.5 hours of work (based on 2000 hour work year @ $10/hr.). To the rich guy this represents 250 hours of work (2000 hour work year @ $60/hr.).

There is also the added benefit that it gets rid of the massive tax code we have (last time I heard it was 40,000 pages long) so the rich won't be able to buy a politician to get them a special tax break. It is also more just because the current tax code contradicts itself, hence the need for a special court that virtually forces people to hire an expensive tax lawyer to defend themselves. Even if you win in tax court, you lose.

Flat taxes appear fair on the surface but all critical analysis demonstrates that they shift the burden for taxes to the middle class.

Article

The Treasury Department releases an extensive computer analysis of the Armey flat tax (relying heavily on Hall and Rabushka's 1983 book for details that are lacking in Armey's bill). In "An Analysis of a Flat-Rate Consumption Tax," Treasury finds that at a 17% rate, Armey's plan will lose $244 billion a year in revenues, assuming retention of the earned-income tax credit for the working poor, or $219 billion annually if the EITC is eliminated (as CTJ had assumed). Thus, despite a somewhat different estimating methodology, Treasury's finding is virtually identical to CTJ's September 1994 estimate.
Treasury notes that (obviously) it would take a much higher tax rate (25% to 26%) or much lower exemptions than Rep. Armey has proposed for his plan to break even. And under a revenue-neutral Armey flat tax, Treasury concludes, the vast majority of American families will pay much higher taxes, while the very rich will get enormous tax cuts.
Treasury's distributional findings match previous conclusions by the authors of the Armey plan, Hall and Rabushka. In their 1983 book, they had conceded that their flat tax would "be a tremendous boon to the economic elite" (p. 67), and admitted:
"Now for some bad news. . . . t is an obvious mathematical law that lower taxes on the successful will have to be made up by higher taxes on the average people." (p. 58)

Here are two definitions and then my (longwinded) thoughts:

Equitable: characterized by equity or fairness

Progressive: favoring or advocating progress, improvement or reform, especially in political matters.

Your question, how to make taxes equitable?

(disclaimer: I get no further with the following thoughts with my "Reagan was the best" friends than I do with my "LBJ was best" friends, so, if nothing else it challenges two orthodoxies!)

In my opinion there is no greater dis-enfranchisement of a citizen than for that person to not be paying their share of THEIR societies burdens. Where is their motivation to have the societies best interest at heart (and mind) if they have no vested interest? There is none.

It is my opinion that nothing exacerbates this disenfranchisement more than another citizen that pays more than their fair share. This person has every interest to seek disproportionate representation. And does.

When a policy says that one person can have a cheeseburger for free, another can buy one for $1 and another must pay $1,00,000 then that last person is going to buy the burger joint sooner or later and let's not be surprised about it.

There used to be no more equitable place in the country than the DMV. Everybody waited in line for the same thing and paid the same for it.

It is critical at this point to state what I see as progressive campaign finance reform: If it cannot vote, it cannot contribute to a party or candidate. Bye bye Union. Bye bye Exxon. If 'it' can vote (you or I or Bill Gates or Babs) then you can contribute every dime you see fit and it MUST be fully disclosed, publicly, the day the donation is made.

This would result in two things: One, corporations, Unions and any other interests appealing directly to you and I on issues, not through the pol they own, not veiled behind the DNC, RNC or any of the myriad 'pacs'. Two, we get candidates who not only must tell you who they take money from and how much, but they also owe NOTHING to Exxon or the NRA or the AFL-CIO or any other group.

I don't care where you stand on Howard Dean; he proves the point that politics and money are changing (the 'net). You CAN raise money from people to compete with the major donors of an opponent. Hell, if each person who voted for Al Gore (or Shrub) had contributed just $10 then they'd have $500 million to duke it out. If you knew that one person got $10 from 50 million people and one person got $500 million from one person...well.

So, the equitable solution; not a flat tax per se but a bill, monthly, from your state and federal government for your share. Didn't vote? Tough. You live here. Here's your bill. Everybody pays the same. And has the same influence. If the credit card company can find you, then the government can to.

Here's the part that'll send people for the Armageddon button (those who lasted this long!):

NO CORPORATE TAXES EITHER. Several posts in this thread mentioned the 'buy a pol to get a tax break' SOP in DC. Well. What the hell else is an entity gonna do, just pay more for the hamburger? If every one of us is paying a share of government then the only way Wal-mart comes to town is if the business is there from their viewpoint and the locals say it's OK from their viewpoint. They WILL be engaged.

Conversely, no town is going to lose a business either just because Corporation Z got a sweetheart tax deal from Yourtown, USA.

Citizens in our nation pay about 65% of the annual budget via income taxes. Corporations and other non-voter entities pay the rest. To over-simplify, that's somewhere around $700-800 billion dollars that would not go to government first (in the form of who bought who) but to we, the people first in the form of increased wages or where ever companies choose to spend it including increased benefits to keep now VERY interested VOTING employees happy.

Now, that’s my thoughts. ‘We, the people’ keeping an eye on the campaign promised that swayed us because we all have vested, equitable interest and no one has more power than what they can accrue through persuading their fellow citizen instead of buying their fellow citizen. No politician can long sustain themselves against their constituents if they have no one else to appeal to for support.

I think citizens’ self-interest is the best interest. A clean, healthy environment is in my interest. A good job for my neighbor is in my interest. A great education for our kids is in my interest. Vibrant arts, athletics and other community critical entities are in my best interest.

This is no ‘silver bullet’, no cornucopia. Tough choices are still what politics are about. I just think this is simply a good argument that if we are a representative republic, then the people who do the voting to send the representative should be the ones the representative has to answer to. Call it 'one vote one dollar'.

Now, sit back and let’s hear the arguments against…the arguments that what we have now is better.

Let me know what you think about those arguments.

Now then, here are some questions about your idea:

-A share per citizen, right? Assigned at birth?
-Would it be possible to purchase more shares?
-Would you agree this fits in the second category of taxation that I
mentioned in the original post?
-How do you address the objection that low-income people will simply
be unable to afford their 'bill?' It seems unquestionable that this
will redistribute the tax burden down the economic ladder, at least
from its current positions. How would you expect the poorer
segments to afford this?
-What penalties would accrue someone unable to afford their 'bill?'

Yep, you're #2 is what I am suggesting. Sorry, my post reads like I didn't even see what you wrote. I get caught up in the motivation behind the idea.

You raise THE great points that must be addressed. I'm glad somebody is interested!

Share per citizen: Yes. We're looking at about $7500 per year per man, woman and child not counting SS/Med based on a budget of some $2.2 trill or so, 300 million people.

At birth? That's a pretty powerful question. As it is now, it seems many people barely consider the cost of diapers let alone actual living costs of having a child. How about once you are no longer a full time student you are now a full time citizen with full rights and responsibilities including your tab? Now, we're looking at what, perhaps 140 million people in this category or something like $16,000 per person. Issues like the disabled, physically and/mentally, would need to be addressed as well, so there must be some transferability for many reasons. Hell, we got how many citizens in jail, 4 million or so?

It would seem to me that we now run things from a 'head of household' standpoint to address issues if liability and responsibility for everything from insurance to the phone bill. Maybe we stay that way?

I don't like 'purchase' more shares per se because that implies a right to that vote, at least to me. On the other hand, if you're 23 and want to roam Europe or the US for a summer or a year and your folks or uncle or best friend are willing to pay your share, why not? Forever? Why not? I just don't want a 'future world' where Wal-mart is offering to pay peoples shares in lieu of a raise or whatever. The tranferability must be limited. Otherwise, that could work away from the power I think people should really have and take seriously. It is one thing to be indebted to your uncle. It is another to owe a corporation.

On this note, if we are recieving a bill from our government, obviously, we eliminate all witholding.

As far as everybody being able to afford this system out of pocket, we are talking a major shock and change of mindset here for sure.

As I suggested earlier, if the 35% of receipts corporations pay goes to the people first then we are looking at across the board income increases putting a minimum wage earner from $5.25 (I think) to a bit over $7 an hour or about $15,000 a year less SS/med. Clearly, there is a problem here. For the average household of $40,000 or so, we're looking at VIOLA! right on the number for two adults, about $15,000 more. Coincidence? Fact can be stranger than fiction!

The point is that everybody, especially poor folks, already 'afford' what government spends now. They just don't ever see the money and they lose so much of the power of their vote due to sense of helplessness that is real given that their representative may(!) have greater allegiance to their employer than to them.

In terms of penalties I think the greatest harm is the very real disenfranchisement we have today and it's not hanging chads, it is voter apathy due to sense of helplessness.

As a practical matter, perhaps we offer an opt out plan? Your share is picked up by everybody else BUT your forfeit your vote. That is, in essence, what we have today.

I would prefer that it simply would take time to balance out our new
politics of people and for incomes to shake out and become bearable as voter awareness grows. Certainly we can share this load in terms of phasing all citizens in over perhaps as long as a decade, defering some monies as long term debt.

We do this now, in effect, don't we? And there is no real progress on the horizon, just a status quo with no dynamic to motivate change. At least that I see.

Thoughts?

So far we seem to be examining a system that:
-assigns everyone a 'share' in government based on the principles of
'1 vote to 1 person,' and 'equal responsibility for the government.'
-the 'share' consists of the: right to vote, and a bill for part of
the government's budget.
-the bill would be assigned in such a way that everyone, regardless of
income or wealth, would pay the same absolute dollar amount of money.
The amount of the bill is to be determined by some function similiar
to: (budget)/(taxpayers), fairly simple, that gives us a single
value.
-'Shares' are assigned at, not birth?, but rather the point at which
an individual becomes an adult? I gather this last is what you are
saying, please correct me if I am wrong. I shall operate under this
impression for now, however.

Here are some questions, then.
-When 'shares' are distributed, is the overall tax burden reduced at
that point, is the tax burden simply recalculated at certain
intervals--monthly, yearly, by the decade, etc.--or does the tax
burden ever decrease?
-When you talk about the transferability (sp?) of a 'share,' are you simply saying that one person could solicit from another, perhaps through a loan or grant, the funds to pay for their 'share'? Or are you saying that one could give, sell, or auction their 'share' to another? This area seems to be potentially quite problematic. If the responsiblity for one's share can be transferred, it very well may be, and it may be done quite frequently. Can we not imagine a contract whereby Wal-Mart (let's pick a popular target, and follow the crowd a ways) refuses to employ anyone who does not sign over their 'share?'
-related to the above question is this: would the 'share' be linked to access to other government services than voting? If it is not, and say, access to higher education at public universities, or medicare, or social security are not governed by possession of a share, why in God's name would anybody NOT attempt to trade or sell it away? And would access to these programs, in an attempt to compensate people equally for the amount they contribute, be reflected by the number of shares you possess? That is, would an individual (Let's go with Bill Gates) who may purchase 10,000 shares be eligible, assuming he maintains good standing with the bills from all those shares, to receive 10,000 times the government benefits of another individual?

If you could address these questions, I would appreciate it.

Thanks for your interest!

OK, call it a 'share' or whatever but in my mind I think of it as 'citizenship' or 'privelge and responsibility'. A 'share' makes me think of something you buy that sits there growing while you do nothing. I'm after an engaged citizenry, 'my vote counts'. The 'bill' is simply each citizens, uh... 'share' (guess I'm stuck with that word!) of the spending that was aproved by our representatives at the State Capitol and in DC.

Pretty much every society I know of have/had people pitch in doing what they can when they can, from South American jungles to a village in remote parts of Iraq. Then there is the pitching in, however it works out, collectively to care for those who can't help either by age or disability. We don't do that officially. The US says your are a minor, have little responsibility and limited rights until you are 18, so, I pick that age as a convenience. The 'heads of household' are responsible for the phone bill, rent, groceries etc, so yes, I am saying they pick up all 'shares' (damn) or 'expense' until the age you pick up your rights, 18. The vote itself does not even exist until you reach 18, but the government expense does and I am making the case better mom and dad than what we have now.

You: "When 'shares' are distributed, is the overall tax burden reduced at that point, is the tax burden simply recalculated at certain intervals--monthly, yearly, by the decade, etc.--or does the tax burden ever decrease"

No, the initial burden is what it is today. So, the examples I cited earlier hold here; total $'s divided by total number of voting citizens.

I envision annual budgets divided by 12 and a monthly bill. No more April 15th, no more company witholding. The burden decreases or increases depending on how much money our reps vote to spend.

Transferability: What I think here is a private, maybe just family, level type deal here, precisely to preclude the WalMart scenario you mention. If you daughter has graduated college and wants to spend a year at the beach and you are willing to foot the bill then, by all means but she retains her right to vote. It is a private affair, how someone votes and who or how their bills are being paid. So, you are right, terrible abuse could loom here but I think it could be addressed effectively. I do not want Rush Limbaugh 'buying up' peoples debts (and loyalty) any more than I want Streisand to.

"related to the above question is this: would the 'share' be linked to access to other government services than voting?"

Ah, damnable share! My point is that you are a CITIZEN first and foremost. Everything stays the same as it is now in terms of availability and eligibility to everyone, unemployment help, SS/Med, help with tuition, home loan programs, you name it.

Let's use 'right' instead of 'share' for a moment. Each citizen has the right to vote and the responsibility to help pay for what we vote for. The vote is NOT transferable nor are the benefits we choose to offer citizens, these things are for ONLY the specific individual.

The end goal here is my desire to see people actually vote and to be motivated by the responsibilities of citizenship, inlcuding paying for government, to become educated and informed.

Candidate X gets into office with your and my support because they said they were going to do "Y". Then, they get there, "Y" goes out the window and our guy gets re-elected and we can't get rid of him because now Enron (let's give WalMart a break) is his supporter and they don't like "Y".

Most people who consider themselves 'progressive' are not interested in anything having to do with the rich or corporations paying less taxes but they are very interested in reducing the power and influence
of the rich and of corporations. I'm sorry but as long as corporations and rich people pay the vast majority of the bills and have direct access to the people making the laws then this will be the way it is.

However, if Bill Gates is paying no more for government than you and can give no more to a politician than you then he has no more influence than you do.

If Exxon can give nothing to a PAC or pol then they are stuck appealing to you and me to get OUR politician to vote this way or that. They will have to be a rather responsible corporation to pull that off. Stewardship and taking very good care of their people will be awful important.

I hope I'm explaining this well because this is enjoyable to me and there damn well is a better way to do things that what we have now, agreed?!

Thoughts?

Thanks!

So there's not actually a link between the "share" and any access to government services, the ability to vote, etc. Rather, the "share" is a tax bill assessed to each citizen, starting at their coming of legal age, whatever that is, in recognition of their responsibility to pay for their share of the government's bill.

Payment of the bill is an individual responsibility, and an individual may choose to solicit assistance in payment of the bill from, at least, their family.
------------------------------------------------------------------
Questions based on this understanding:

1. How would neglecting or defaulting on your bill payments affect your ability to access government services or exercise the ability to vote?

2. What, if any, regulations would exist limiting who could assist you in the payment of, or take over the payment of, your bill? Would payment assistance be limited by statute to family members, or would you be able to take out loans for this purpose?

3. I'm noticing you're implying this would limit influence by the affluent over the government; would this program be accompanied by campaign finance reform?

4. If the tax burden owed on every bill is equal to something like the following: (Total Budget)/(Number of Taxpayers), what happens when the number of taxpayers increases? It would probably be impractical to calculate the change immediately; would recalculations on the bill be handled on a monthly, yearly, or other interval? The difference from one census to another can be QUITE large, in terms of population. Or would recalculation ever take place? What incentive would the government have to reduce taxes, ever? Or does that matter?

Message removed by moderator. Click here to review the message board rules.

Anyone know what they said?

there is such a disparity between the wages of CEOs and average employees. The average CEO makes on average 411 times more than the average employee. This is the highest in the industrialized world. In England the difference is somewhere around 50 or 60. I believe this progressive tax structure would force some moderation and fairness between salaries of the CEO and average worker.

I had a big long post on vertical and horizontal equity and how they applied to each example. But the stupid BB ate it because you can't have the same thread open in two windows. Stupid BB program.

I hate that. I know it's annoying, but could I impose upon you to attempt to recreate your points? They sound quite interesting.

In looking at the effects of taxes there are three issues, simplicity, efficiency and equity.

Equity has two sub components, vertical and horizontal equity. Vertical equity holds that people of different incomes should be taxed differently. Horizontal equity holds that people with the same income should be taxed the same. While these look simple it also depends on how income is measured. For example, two people Joe and Bob each live for two years and in the first year make $50,000 and in the second year live off whatever they save in the first year. If Bob saves $20,000 and Joe saves $10,000. Now yearly income is different than lifetime income.

1)Tax people in proportion to the value they derive from society; this argument has generally been presented as equating to taxing the goods that a taxpayer consumes, e.g. a national sales tax.
Does not require an income tax, and is, in fact, antithetical to it, as it supposes that you only benefit from the money you spend, which will not by necessity be all that you earn.


This one could quite possibly horizontal horizontal equity. A national sales would violate vertical equity.

2)Taxing everybody for the same absolute amount, i.e. the exact same amount of money. Everybody pays the same in this system, every shares the financial burden for the society "equally."
Does not require an income tax, and is diametrically opposed to it.

This one would violate vertical equity.

3)Taxing everybody for the same percentage of their wages. This says everybody owes the same portion of their work in exchange for the benefits of the society, not the same dollar amount, as the prior system means everyone contributes the same portion of their time and money to the system, and the latter does not.
Obviously requires an income tax.


This violates vertical equity.

4)Distributing the burden of taxation equally; that is, recognize that (hypothetical numbers here) a 5% tax on a person making subsistence level wages might be equivalent in terms of affecting the taxpayer's ability to purchase goods and survive as a 45% tax on a person at a much higher income level. In this concept, equal discomfort due to taxation is the ideal, not equal dollar values or equal time, etc.
Obviously requires an income tax.

A scheme like this has the best chance of not violating either standard, but without more detail it is hard to stay, and there is still the issue of how to measure income.

Your definitions:
Vertical equity holds that people of different incomes should be taxed differently
Horizontal equity holds that people with the same income should be taxed the same..

You then go into how certain forms of taxation schemes "violate" the concept vertical and horizontal taxation.

This looks like a straw man argument, setting up presumed positions, then establishing how the arguments violates the presumptions.

Take vertical equity for example. You assert that different incomes should be taxed differently. But how doses preserving this test establish a form of equity? One could tax income excessively while not taxing inheritances at all, favoring the rich while nailing it to the poor. Decidedly un-equitable, yet it is still true to vertical equity as you have defined it. Surly the quality of equity of a taxation system would depend on the nature of the difference in taxation in regards to the difference found in income structures.

It also presumes that different forms of income should be treated differently from each other. This violates a definition of equity established by the supreme court that the mer act of separate, means they are not equal. Thus setting up the tax code to mirror, if not define, a social stratification. One class of people would benefit from the tax code, while the other would be punished in regards to their economic class. Indeed, this vary notion lends itself to an unquotable system.

Your second definition is a non-squatter. If there is no difference in incomes, than logically, there can be no difference in taxation. Unless other factors are taken into account. And once again, horizontal equity presumes that no such differences may exist. Like of Joe Hardhat and Joe Millionaire should both win 10,000 dollars in a lottery. Both incomes are exactly the same. But Joe Hardhat is in the 40,000 dollar tax bracket, while Joe Millionaire is in the 100,000 dollar tax bracket. But to preserve horizontal equity would effectively render moot the separation in tax brackets between the two, by definition. Is that truly equitable?

It would seem to be that your concepts of vertical and horizontal equity are nothing more than constructs to justify existing inequities in the current system. Buy trying to shift the definition of equity away from the human dimension, which is all to common with supply side mentality as it removes the human factor from an all too human economy. And instead to try and define equity in terms of dollars taxes, and taxed in what form, in regards to a corporate environment, and away from the impact that taxation has on the people, both rich and poor.

Also, both vertical and horizontal taxation concepts as you defined them, would ignore another vital function of taxation. It's regulatory effect on the economy in general. Taxation has the ability to resist the excessive accumulation of wealth, and returning it into circulation. Like wise, it has the ability to inject capital into capital poor sectors in the economy. Both in the forms of lessening taxation as well as the spending on public infrastructures.

Vertical and horizontal taxation also ignores an important point made by another poster. That in regards to taxation, equity can not always be measured in terms of dollars.

Screw the people who have the money.
Screw the corporations.
How else are you going to raise revenue for all the
necessary and proper public purposes?
If they don't like it let them move to the Bahamas and rot.

If you "screw the people who have the money" and "screw the corporations" and you succeed in making them "move to the Bahamas", who will be left to pay the taxes to support "all the
necessary and proper public purposes"?

I am very curious to know what you consider "necessary and proper public purposes". Please elaborate.

If you "screw the people who have the money" and "screw the corporations" and you succeed in making them "move to the Bahamas", who will be left to pay the taxes to support "all the
necessary and proper public purposes"?

But, who will 'pay the taxes to support "all the necessary and proper public purposes"?' as you put it, if you dismiss the corporations from there taxes? And besides, they seem to be moving to the Bahamas any way, thanks to a tax loop hole that lets them get out of paying there taxes. Do you support tax evasion?

Corporations should have the right to place there head quarters any where they want. But it they want any of the privileges of doing business in the US, they should first pay up there responsibilities, including the taxes. But instead, we virtually pay them for the privilege of taking money from us. With your assertion that we are "trying to screw" the corporations attempts to distract from the fact that cooperation's run government at all levels.

First, "screw the corporations" is not my assertion, it is bemildred's. Second, there is no attempt "to distract from the fact that cooperation's run government at all levels" because who runs government was never part of the discussion.

My comment was in response to bemildred who seems to be saying that it doesn't matter what method of taxation we use (remember this discussion started with the original post about which method is best) that we should just take as much as possible from those who have it. My apologies to bemildred if I misunderstand her comment, but I think her's is a very short-sighted approach.

I'll state my point again... if those with money (whether they be individuals or corporations) are "screwed" too much, there will come a point at which it is no longer worth it to stay here and they will leave. This begs the obvious question. If they leave, where does the money come from to support "all the necessary and proper public purposes"?

First, "screw the corporations" is not my assertion, it is bemildred's.

But this is YOUR wording and how YOU chose to fraze the debate.

Second, there is no attempt "to distract from the fact that cooperation's run government at all levels" because who runs government was never part of the discussion.

I do not beleive you. Care to try and deceve me again?

but I am not interested in talking about who (or what) runs government on this thread. That is a significantly different issue than where (and how) taxes revenue is obtained. Taxes are the topic of this thread.

"Screw the corporations" is bemildred's phrasing, quoted by me to keep the discussion focused.

but I am not interested in talking about who (or what) runs government on this thread. That is a significantly different issue than where (and how) taxes revenue is obtained. Taxes are the topic of this thread.

I could not disagree with you more. Who sets the taxes is even more inportant than how they are set. For it is the who that regulates the tax system, as well as makes changes to it. You may have an equitable system one day, but appoint the wrong person, and the best taxing sceam in the world will become irrlvent as some one elses agenda other than the peoples is brought to bare.

This is currently the situation. We have a government that is of the corperation, by the corperation, and for the corperation. Taxes are writen in such a way to directly benifit the corps and the expense of the people, shifting the tax burden away from thoe who are able to pay and those who benifit the most from taxes, to thoes who are least able to pay, and benifit the least. The poor citizens.

Your "Screw the corporations" is a clear example of trying to distract from this issue. It is a delibrity attempt to build sympathy for an endity that dose not exist, the corperations. They are nothing more than leagel constructs. A "nexuses of contracts" to use the right wing vernaculer.

In contrast, the common peaple feal real pain, real hunger, and real poverty from a direct conseqences ot writing the tax code in favor of the corperations. That isn't a democracy. That is in fact, Fashism. So you will forgive me if I contiue to call you on the sinister quality of your wording. Regardless of your oppinion to the contrary.

OK, I stipulate the "who" can affect the "what" (I'm sure this surprises no one). Would you like to respond to my question (twice-stated) now?

Would it help if I concede that corporate interests influence politicians to write tax code in their favor (I'm sure this surprises no one, either). Would you or bemildred like to respond to my question now?

How about instead of "screw the corporations" I use a more people-friendly phrase like "pay their fair share"? Can I get an answer to my question now?

For me to answer a question. You must first ask it. And going back to review your threds, I have seen no question, let alone one that you have asked of me twice.

Care to state this question for the room?

originally addressed to bemildred in my post #64. It was repeated in a response to you in my post #76.

I'll state my point again... if those with money (whether they be individuals or corporations) are "screwed" too much, there will come a point at which it is no longer worth it to stay here and they will leave. This begs the obvious question. If they leave, where does the money come from to support "all the necessary and proper public purposes"?

Here is anther example of the “were trying to screw the rich” line. For some one who claims to not have any sympathy for whiners, you sure do defend them and their wealth an awful lot.

As to your question. First, it is a loaded question presuming an extremist position. Sense no one here is advocating over taxation of the rich, your question is moot. And it has been answered because we pointed out to you that corporations have shown themselves to take advantage of any loophole to escape taxes, even when they have a favorable tax environment.

But even should a corporation chose to leave. I say let them. Sure, they will no longer be around to “pull their weight” but then again, there weight wouldn’t need to be pulled by any one, because they left in the first place. But no doubt you are working from the common supply side notion that we need corporations. That we the people some how can not take care of ourselves, that we can not govern ourselves.

But what do we have with the other shoe test? What if we tax the poor too much?

Your posts all run with a common theme. Defend the wealthy. Despite your apologies against this affect, that is all you have done thus far. You decry “over taxation of the wealthy” siting fears of consequences of we tax them too much. But isn’t wealth a mater of choose? Supply siders argue that the poor chose to be poor. Is it not so that the wealthy chose to be wealthy? If they feel that the wealth’s taxes are too high, they have a choice in the mater. Reduce their income down to an acceptable tax level.

Do the poor have that kind of choice? Do they have the option to pick up and move to Bermuda if they thing the tax burden is too high? Of course they don’t. They are poor because they have no options.

If the rich want to leave to except taxes, than they are privileged to do so. But so too do they leave behind all of the privileges and benefits of being a US citizen or a US corporation. The problem is that the wealthy today get to pick and chose. They keep all of the benefits of citizenship, while baring none of the burdens. By definition, those burdens fall to those least able to pay for them. And so long as the top end of the tax bracket remains low, there will be no incentive for the wealthy to stop stealing from the poor.

Here is anther example of the “were trying to screw the rich” line. For some one who claims to not have any sympathy for whiners, you sure do defend them and their wealth an awful lot.

My statements are less a defense of the wealthy than they are a defense of wealth. The distinction being I won’t defend the boorish behavior of some wealthy individuals but I will defend the concept of wealth because it represents one of the great freedoms in this country – the freedom each of us has to work to improve our situation in life. Pursuit of wealth is the fundamental driving force that makes this country the economic powerhouse that it is. The freedom to create wealth provides the citizens of this country one of the highest standards of living in the world and also provides the monetary resources to support those unable to support themselves. It is the opportunity to obtain wealth that makes this country a magnet for immigrants seeking a better life. In my opinion, wealth is not a bad thing and I don’t want to see a tax structure that discourages the pursuit of wealth.

As to your question. First, it is a loaded question presuming an extremist position. Sense no one here is advocating over taxation of the rich, your question is moot.

Well, actually, bemildred IS advocating over-taxation of the rich. She is in favor of “…a steep, progressive tax structure - that gets close to confiscation at the top…” (see her post #97). I take it you do not advocate such a thing but I’m sure she is not the only one in this country who thinks confiscatory tax rates would be a good thing so my question is a valid one. To her credit, she doesn’t want to punish those who built high incomes from scratch but, to the best of my knowledge, the IRS gives no consideration to HOW one obtains their income.

And it has been answered because we pointed out to you that corporations have shown themselves to take advantage of any loophole to escape taxes, even when they have a favorable tax environment.

Business is highly competitive. Why criticize a corporation for taking advantage of a perfectly legal opportunity? You can bet their competitors are. If the “loophole” is bad policy, petition the politicians to change it. In addition, “favorable” is a relative thing. US tax policy may be favorable compared to some countries but less so when compared to others. Much depends on exactly where a particular business’s competitors are located and the tax environment those companies operate in.

But even should a corporation chose to leave. I say let them. Sure, they will no longer be around to “pull their weight” but then again, there weight wouldn’t need to be pulled by any one, because they left in the first place. But no doubt you are working from the common supply side notion that we need corporations. That we the people some how can not take care of ourselves, that we can not govern ourselves.

It’s not about governance. It’s about economic survival both on an individual and national level. If a corporation leaves, the jobs they provide (and the associated tax revenue) leave with them. Many workers are concerned about the loss of jobs that occur when a company moves certain aspects of their business to other countries (Mexico, China, etc.). I have heard stories that some companies in California moved their operations to Nevada because the tax burden in California had become too high. If a corporation has a successful business in this country it is because they provide a product or service that people will pay for. If the corporation leaves, some other company will step in to provide the same product or service. Personally, I’d rather have US companies get that business than some foreign competitor.

But isn’t wealth a mater of choose? Supply siders argue that the poor chose to be poor. Is it not so that the wealthy chose to be wealthy? If they feel that the wealth’s taxes are too high, they have a choice in the mater. Reduce their income down to an acceptable tax level. Do the poor have that kind of choice? Do they have the option to pick up and move to Bermuda if they thing the tax burden is too high? Of course they don’t. They are poor because they have no options.

I agree, a person’s wealth IS a matter of choice or, more accurately, choices. It isn’t magic. I can’t just say, “I choose to be wealthy” and, cha-ching, a million dollars shows up in my checking account. I also don’t think many people declare, “I’m going to be poor.” Many people have found themselves poor through no fault of their own – I am thinking here of those with severe physical or mental problems. But for many others, their economic status is a result of the cumulative affect of the choices they made: Stay in school or drop out? Buy a car I can’t afford or a cheaper one? Buy a house or rent? Work hard at my job and get promoted or be lazy and get fired? Have children before I am financially able to support them or postpone that action until I can? Personally, my financial circumstances could have been significantly better today but, because of an investment decision I made a few years back, I lost a significant amount of hard-earned money. That was a choice I made – and it was a bad one.

Many of the poor do, indeed, have options. This is not to say their options will necessarily be easy but most of us can change our situation if we really want to. We can go back to school, we can drive a cheaper car, we can spend less money, we can think harder about important decisions, we can live in a smaller house, we can work harder. But most of all, we have the freedom of opportunity this country provides but, unless we hit the Lotto jackpot, we will have to work for it.

The problem is that the wealthy today get to pick and chose. They keep all of the benefits of citizenship, while baring none of the burdens. By definition, those burdens fall to those least able to pay for them. And so long as the top end of the tax bracket remains low, there will be no incentive for the wealthy to stop stealing from the poor.

The wealthy bear none of the burdens of citizenship and the burdens all fall to the poor?! The wealthy are stealing from the poor?! Please explain how you came to these conclusions. By law, a married couple making less than $12,000 per year (I consider that poor) pays $0.00 in federal income tax. Also, consider the following:


Household Income ..... % of Federal Income Tax Paid
Top 1% ....................... 36%
Top 2-5% ..................... 19%
Top 6-10% .................... 11%
Top 11-25% ................... 17%
Top 26-50% ................... 13%
Bottom 50% ................... 4%
Source: Internal Revenue Service, Table 99in05tr, at http://www.irs.gov/pub/irs-soi/99inrate.exe (July 2002).

In other words, the top 10% of income earners (I consider them wealthy) paid 66% (almost two-thirds) of the total amount of income tax collected by the US government in 1999 (the most recent data I could find). By contrast, the poorest 50% of income earners paid only 4% of the total amount of income tax collected by the US government in 1999. Clearly the wealthy are paying a disproportionately large share of income taxes but who is benefiting? I would argue that low income earners have available to them significantly more tax-supported programs than do the wealthy. So who is stealing from whom?

Here is anther example of the “were trying to screw the rich” line. For some one who claims to not have any sympathy for whiners, you sure do defend them and their wealth an awful lot.

My statements are less a defense of the wealthy than they are a defense of wealth. The distinction being I won’t defend the boorish behavior of some wealthy individuals but I will defend the concept of wealth because it represents one of the great freedoms in this country – the freedom each of us has to work to improve our situation in life. Pursuit of wealth is the fundamental driving force that makes this country the economic powerhouse that it is. The freedom to create wealth provides the citizens of this country one of the highest standards of living in the world and also provides the monetary resources to support those unable to support themselves. It is the opportunity to obtain wealth that makes this country a magnet for immigrants seeking a better life. In my opinion, wealth is not a bad thing and I don’t want to see a tax structure that discourages the pursuit of wealth.

I just love reading these kinds of self contradicting statements. It clearly demonstrates the absolute lack of any moral clarity, as well as the absences of any self reflection, or intellectual command over that witch you say. You may consider yourself to be human, but that witch I see before me little more than the sum of preprogrammed responses.

You defensively claim that you are not defending the "wealthy", than in a futile, and silly attempt to argue semantics, claim to defend "the wealth" witch in and of itself is an inanimate object, baring no powers of verboten what so ever. How can any one defend an intimate object? But then launched into a defense in the "pursuit of wealth" calling it a "fundamental driving force that makes this country the economic power house that it is."

But even here. I find your "defense of wealth" to be morally abhorrent. Greed is not a virtue. And dressing up greed in the ribbons "opportunity." It is also arrogance of the highest order for you to assume man kind had no other "driving forces" other than greed. Than immigrants only come here "for the pursuit of wealth." Didn't many immigrants come here to escape poverty fostered upon them by the powerful land lords?

I also construed your argument, not as a "defenses of the wealth," or as "defense of the wealthy," but in sum as an argument that only the wealthy are entitled to their wealth. Most notable given the original topic of this thread was the restoration of equality in the tax code. And here you are, arguing for the very inequality of wealth.

I also reject your argument that greed was what built this country. Did men die by the thousands on the southern battle fields for the acquisition of wealth? Can you say General Robert E Lee was only motivated by his pay? Was Patrick Henry paid a royalty when he said "Give me liberty, or give me death?" Did Harriet Tubbmen collect ticket fairs as she conducted the underground rail road? Was John Brown counting on insurance payments when he was surrounded by Southern Troops as he attempts to free the slaves?

These figures in our history were great men and women of vision. They held a passion for life, and a drive for justice, and governed by the ideals of equality. America was perhaps the first modern nation to truly make Jesus vision of peace, and compassion a reality. Arguably, we became the first nation to enshrine the vary notion of life itself that Jesus so revered. It took the vision and intellect of all of our founding fathers to take Jesus unfinished works with the concept of liberty. I know and can see the true powers of man, and his capacity for good.

But I pity you, for the very concept of love itself must be alien to you, for wealth to be the only driving factor to exist within your knowing of mankind.

And isn't it interesting to note that while you "defend wealth," that Jesus, he whom has a very high probability of being your Lord & Savor, railed against this very thing. And he did so with complete and utter contempt as to say "for it is easier for a camel to pass through the eye of the needle, than it is for a rich man to pass into heaven." Jesus' argument was quite clear. To him, wealth is not only a corrupting force, creating poverty, but an effrontery to God himself to see a wealthy man in the sight of the poor. And his only path into salvation, is to consider his greed, to be a God given virtue.

As to your question. First, it is a loaded question presuming an extremist position. Sense no one here is advocating over taxation of the rich, your question is moot.

Well, actually, bemildred IS advocating over-taxation of the rich. She is in favor of “…a steep, progressive tax structure - that gets close to confiscation at the top…” (see her post #97).

You distort Bemilderd's argument. Again the "we are out to get the rich" line. And I have already addressed this point with you. The wealthy have the power to control their wealth. If they feel they are being over taxed, than it is within their power to moderate their income to an acceptable level of taxation. Over taxation is where you tax a people INTO poverty. By definition, progressive tax structure doses not allow this. And again we see you focusing only upon the plight of the rich. And ignoring even the vary existence of the poor.

I take it you do not advocate such a thing but I’m sure she is not the only one in this country who thinks confiscatory tax rates would be a good thing so my question is a valid one.

Ah yes. Again with the inflammatory wording. We are trying to "confiscate" their wealth. Class Warfare! Class Warfare!

To her credit, she doesn’t want to punish those who built high incomes from scratch but,

Contradicting your earlier claim to Bemilderd's argument.

to the best of my knowledge, the IRS gives no consideration to HOW one obtains their income.

False. Money that is earned tends to come from wages and compensation. Money that is NOT earned tends to be passed on through inheritance, stocks, and dividends. The tax code can and dose indeed make exactly this distinction. In fact, Bush recently argues for the repeal of the "death" tax. Witch is nothing more than income tax figured on inheritances.

Interesting to note that you claim to defend, "the freedom each of us has to work to improve our situation in life," when in reality you defend the right of the wealthy TO there wealth, despite the fact that they have NOT earned it.

And it has been answered because we pointed out to you that corporations have shown themselves to take advantage of any loophole to escape taxes, even when they have a favorable tax environment.

Business is highly competitive. Why criticize a corporation for taking advantage of a perfectly legal opportunity?

Because doing so may not be ethical, moral, or even harm others. The Bush administration recently relaxed certain regulations for mining operations, letting them farm out the survey work to competitive contractors. The argument for relaxing the regulations was that the surveying companies would compete through quality for the mining companies business. But the opposite was true, the mining corporations didn't higher the better survey crews who were prepared to tell them where not to dig, but with the companies who were little more than yes men on contract to let them dig where every they wanted. Directly resulting in a mining accident that happened in Iowa where they drilled into a lake bed.

Enron was permitted to higher there own auditors for the same reason. Where we then come to find out that the auditors were in fact in on the scam, and the CEO's of Arthur Andersen were profiting from the seam just as handsomely as the CEO's on Enron itself.

And while you are attempting to sing of the virtues of competition, you fail to realize that competing over loop holes defeats the very purpose of competition in the first place, competing in the marketplace through quality of product and service.

If the “loophole” is bad policy, petition the politicians to change it. In addition, “favorable” is a relative thing. US tax policy may be favorable compared to some countries but less so when compared to others. Much depends on exactly where a particular business’s competitors are located and the tax environment those companies operate in.

But how is this possible in a world where money is directly equated with free speech? How is this possible when Corporations have the power to dispatch hundreds of lobbyist to wine and dine congress, and where we have to be contented with voice mail. Where the energy companies are given such privilege as to enjoy the fruits of an energy policy that is classified to the rest of us? And how is this possible when an army of layers can sue into infinity, the disposition of laws they find unfavorable? Or are given special exception from the liabilities of there own actions?

You claim that you "won’t defend the boorish behavior of some wealthy individuals" but you do defend their use of loop holes?

But even should a corporation chose to leave. I say let them. Sure, they will no longer be around to “pull their weight” but then again, there weight wouldn’t need to be pulled by any one, because they left in the first place. But no doubt you are working from the common supply side notion that we need corporations. That we the people some how can not take care of ourselves, that we can not govern ourselves.

It’s not about governance. It’s about economic survival both on an individual and national level. If a corporation leaves, the jobs they provide (and the associated tax revenue) leave with them.

You do not speak of economic survival, but of an imperial tyranny. Where the fate of the poor is made one to the generosity of the corporation, they are doomed where that generosity fails to materialize. Man has lived and lived well, long before the corporations were ever conceived. And let us be clear as to the footing of your argument. Fascism. The power of the corporation to determine the fate of the poor. If you take offense to such a brand placed upon you, then jettison your argument, for this is where its root is planted.

The truth is that we do NOT need the corporations to survive. The alternative is capitalism. Where they people have the means to start, run, and live off of there own business, enterprises, and labors. It is the small businesses that produce many of the new jobs in America, the small business that produce the innovation that drives the evolutions in technology. Alas, corporations do no agree with such forms of competition, and would sooner compete through loop holes.

Many workers are concerned about the loss of jobs that occur when a company moves certain aspects of their business to other countries (Mexico, China, etc.). I have heard stories that some companies in California moved their operations to Nevada because the tax burden in California had become too high. If a corporation has a successful business in this country it is because they provide a product or service that people will pay for. If the corporation leaves, some other company will step in to provide the same product or service. Personally, I’d rather have US companies get that business than some foreign competitor.

But they are American companies in name only. While also enjoying all of the protections, and baring none of the burdens. You would not permit a drunkard to simply walk into your dinning room, seat himself at your table uninvited, eat your food, and then leave. But you would allow a corporation to eat at the government trough, while paying no taxes, nor providing no employment here in America? You defend their use of loop holes, even when this drives small business to bankruptcy, while fowling our air, land, and water? These are the companies you would wish to have? This is the quality of the competitive spirit you respect? But of course, where one sees greed as a virtue, it tends to be the only virtue he will ever see.

But isn’t wealth a mater of choose? Supply siders argue that the poor chose to be poor. Is it not so that the wealthy chose to be wealthy? If they feel that the wealth’s taxes are too high, they have a choice in the mater. Reduce their income down to an acceptable tax level. Do the poor have that kind of choice? Do they have the option to pick up and move to Bermuda if they thing the tax burden is too high? Of course they don’t. They are poor because they have no options.

But for many others, their economic status is a result of the cumulative affect of the choices they made: Stay in school or drop out? Buy a car I can’t afford or a cheaper one? Buy a house or rent? Work hard at my job and get promoted or be lazy and get fired? Have children before I am financially able to support them or postpone that action until I can?

I take great acceptation to this time of ignorance and callousness. It would seem that making these "correct" choices dose not avail the poor at all. I know many people who chosen wisely how they live, and I shall guarantee you that the poor are 1,000 times more frugal and efficient with their money. While the poor chouses an affordable car that must be parked out on the street, the wealthy get to splurge on a sports car that shall sheltered in a heated garage with twenty other vehicles. And while Joe Hardhat worries about being laid off, the CEO of his company has the power to order layoffs for the sole purpose of padding his own stock options. And mean while, wealthy sons, such as G. W. Bush himself, seems to have no shortage of friends or influence, ready to bail him out of the consequences of his own incompetence.

If your reasoning had any power in reality, my next door name, an honest and hard working man with a good family and a devoted wife, staying away from all manners of sin, be they moral, or chemical, should be living well. While Bush, who has failed at EVERY business venture he as ever attempted, let alone committed himself to, should be squalling in poverty. Well, it is my neighbor who toils 120 hour weeks from here to eternity, to pay for his daughters medical expenditures as she is a diabetic, and live in near squealer, while Bush lives in the lap of luxury, having never to answer to any thing, neither sin nor Sovran.

And who are you to say that the poor can not have the right to raise a family, simply because it is not economically expedient for them to do so. I see no wealthy man short of his own family, nor have to make similar sacrifices.

Your claim to the contrary offences me, Sir.

The problem is that the wealthy today get to pick and chose. They keep all of the benefits of citizenship, while baring none of the burdens. By definition, those burdens fall to those least able to pay for them. And so long as the top end of the tax bracket remains low, there will be no incentive for the wealthy to stop stealing from the poor.

By law, a married couple making less than $12,000 per year (I consider that poor) pays $0.00 in federal income tax.

But they pay 20% on their wages to the FICA taxes. And then there are sales taxes and property taxes that they will have to pay on any car or home they may own. They may not be spared taxes from their state, county, or city districts from witch they live. And their income STILL sees annual deductions taken from there pay checks for federal and state taxes they will not pay. And such an income is reducibly low, as a full time job at minimum wage for two is at $50,000/year. And they DO pay considerable federal income taxes as they are in 18% tax bracket, a consequences of the so called "marriage penalty."


Also, consider the following:

Household Income ..... % of Federal Income Tax Paid
Top 1% ....................... 36%
Top 2-5% ..................... 19%
Top 6-10% .................... 11%
Top 11-25% ................... 17%
Top 26-50% ................... 13%
Bottom 50% ................... 4%
Source: Internal Revenue Service, Table 99in05tr, at http://www.irs.gov/pub/irs-soi/99inrate.exe (July 2002).

In other words, the top 10% of income earners (I consider them wealthy) paid 66% (almost two-thirds) of the total amount of income tax collected by the US government in 1999 (the most recent data I could find). By contrast, the poorest 50% of income earners paid only 4% of the total amount of income tax collected by the US government in 1999. Clearly the wealthy are paying a disproportionately large share of income taxes but who is benefiting? I would argue that low income earners have available to them significantly more tax-supported programs than do the wealthy. So who is stealing from whom?

Oh please. Do you honestly think I have not seen this propaganda piece before? The top 1% pays 36% of the taxes is because they have 40% of the wealth. While the bottom 50% only 4% percent because they have less than 5% of the total wealth. Taxation natural follows the wealth, as one would expect. But your very use of this argument is hypocritical, for the reason why the top 1% controls 40% of the wealth, is because they have the power to take that wealth from the lower classes, the impoverished bottom 50%. Your positions would see these "thefts" increase for it is based upon the wealth you protect.

No other problems with your post.
I am not opposed to people being wealthy or making a lot of money.
I am opposed to such people being cheap, whining, self-centered
swine about it.

:evilgrin:

put up with their ungrateful whining any more. What can
you say about someone who takes in, say, $350K per year
and just doesn't know how he's going to make ends meet?
Is this some sort of economic genius? :puke:

I have a hard time relating to the "difficulties" of some folks who make a lot of money. Who can forget ome NBA star's comment, "Do you know how much it costs to insure a Ferrari?"! I should have such problems...

On the other hand, I don't begrudge people their wealth. We all have the opportunity to make as much money as we are able. Some people do exceptionally well for themselves. I don't have a problem with that.

I am still interested to know what you consider to be "necessary and proper public purposes".

I begrudge them their whining about paying for the upkeep
of the system they so greatly benefit from. Some people work
for it, and some inherit it, and some luck into it through
speculation. How about a little gratitude? The ones that want
to stay and work as part of the team to build America can stay.
The ungrateful pricks can go live in the bahamas.

I'm not willing to get into haggling about what we should pay
for. That is a diffent issue. However, first class free public
schools and an adequate public health system come to mind. We
could regain our place as the leaders of the developed world in
those departments.

General rate Top rate
(percent of GDP) (percent of income)
Sweden 53.2% 45.0
Denmark 48.3 40.0
Norway 47.1 23.0
Netherlands 47.0 72.0
Germany 39.2 56.0
Finland 37.7 51.0
Canada 37.3 29.0
Japan 30.9 60.0
United States 29.8 34.0

You might be surprised to learn that the United States has long had the lowest tax rates of any industrialized nation.

http://www.huppi.com/kangaroo/8Comparison.htm

Arguably the two biggest economic powers in the world, Japan and the U.S., have the lowest tax rates in the list you provided. Could there be a correlation?

Taxes would be more equitable if income was more equitable.


Tax policies favoring 'investment' have resulted in tax penalties on work. The result has been a gigantic skewing of assets and income to those who 'invest' (which should be read as speculate), and a concomitant drop in the returns for work.

Little wonder that the future looks dim to anyone who doesn't own financial assets because the possibilty of gaining security thru income from work shrinks daily just as vast fortunes are made daily thru 'trading' financial assets and by those who can manipulate the numbers with no 'work' at all.

There is NO political solution to this as long as the corrupt world of finance can contine to inflate assets. Only a financial and economic disaster could possibly change things and as time goes on it appears that even that would not bring desireable change but rather would bring with it authoritarian oppression.

(Sorry to be so glum)

Taxes would be more equitable if income was more equitable.

Tax policies favoring 'investment' have resulted in tax penalties
on work. The result has been a gigantic skewing of assets and income
to those who 'invest' (which should be read as speculate), and a
concomitant drop in the returns for work.

Could not be said better. All of these well-off people whining
loudly about how unfair everything is just make me want to laugh.
Spend a week or two as a greeter at WalMart and then we can talk
about what is "equitable".

I didn't start that way. Over the years I have worked as a bag boy in a grocery store, a bus boy in a restaurant, a pizza delivery driver, a janitor, an entry-level UAW worker in an aluminum extrusion mill, a stock man in a mobile home manufacturing plant, a well driller's helper, and several other equally glamourous positions. I can relate to a Wal-Mart greeter. What do you consider "equitable" income for someone like myself and a Wal-Mart greeter or a well driller's helper.

When everyone has plenty to eat, safe shelter,
reasonable medical care, afforable educational opportunities
to better themselves, and some sense of security, then I will
be willing to discuss how to equitably divide up the excess.

Generally I would think that those that work the hardest or
contribute the most, leaving the question of how you measure
that vague for now, should get a proportionately better share.
I am all for incentives to work hard. I generally favor
capitalist solutions to things, but I see little need for the
capitalists themselves, they tend to be be pigs about it. I
like workplace democracy and employee owned enterprises. I
generally dislike state ownership of things, but I think the state
has an important role to play in regulating the parts of the
economy.

I've done plenty of blue-collar work too. Some of it paid well,
and some did not. Times were easier back then.

For everyone to have "plenty to eat, safe shelter,
reasonable medical care, afforable educational opportunities
to better themselves, and some sense of security", won't this require a significant increase in revenue to the government? If the answer to this question is "yes", don't you then bump right back into the issue of equitable division of income?

I agree there are some arrogant S.O.B.s among the wealthy. I also agree that there are certain industries where some level of government involvement are appropriate. What I don't understand is how can you have "capitalist solutions" with capitalists?

you mean "equitable taxation". So it's the redistribution
question again. Underlying that is the notion that all those
rich people earned all that money, which is poppycock.

One of the reasons I like a steep, progressive tax structure -
that gets close to confiscation at the top - is that it takes
care of this automatically. When the CEOs cannot extract large
sums of capital from the business into their own pockets without
paying most of it to the government, they stop trying, and work
instead on other ways of being a big-shot, like building up the
business and paying the help well.

My point however, was that questions of "equity" which ignore the
basic human needs of the population are morally vacuous, there is
no equity to be had in letting people sleep under bridges and
starve when one has the means to remedy it, and there is no equity
in giving money to people who do not need it while refusing to
help people who do need it. One can argue that this should be left
to private charity, and one can ask why I am not out there in the
streets helping, but that is simply a diversion from the notion that
society can and should take care of it's members. Is society
simply a collection of predators busy feeding on each other, or are
we all supposed to care about each other and work together?

What annoys me is the notion that one should be able to enjoy the
benefits of living in American society, and extract as big a helping
as possible of the economic pie for oneself, while all the time
whining about how abused one is by the system. But I repeat myself.

I agree with you that it is unconscionable for a CEO to loot a company’s wealth for his own personal benefit – especially if the company is not doing well. There have been some well-publicized, egregious examples of this kind of behavior. Such people deserve scorn and prosecution. But what about the guy who starts a new business, is very successful, hires a lot of people to help his business grow, and makes the same salary as the looting CEO? Or how about the turnaround specialist, making the same salary as the looting CEO, who rescues a nearly bankrupt company thereby saving several thousand people’s jobs? Should these people be punished for success?

Regarding providing for the needs of the population, there is no question certain individuals in this country cannot adequately fend for themselves and I think it is an appropriate use of tax money to see to it that these people are provided the means of survival. There is also no question that some individuals will go to great lengths to access these funds (or the services supported by these funds) even though they are capable of supporting themselves. The same question applies – how to distinguish one from the other, the looter from the hard-worker, the freeloader from the truly needy?

For me, it boils down to questions of how much the government takes (and from whom) and how much the government provides (and to whom). There is wide disagreement among reasonable people on the answers to these questions. Personally, I don’t think there is a perfect solution. I don’t think there is ANY taxing method that will solve all of these problems at the same time. I think the best we can hope for is endless debate about the appropriate level of taxation and the appropriate amount and use of the resulting revenue. If either end of this equation gets too far out of balance, opposing political forces will eventually act to bring things back to a dynamic equilibrium.

By the way, like you I don't have much sympathy for whiners either - on either end of the economic spectrum.

is admittedly a great fellow, doing extremely well, and
not being singled out from his peers.

Whining is always unseemly, but it is more understandable in
those that have something of substance to whine about.

I will concede that a person who has built up his own business
and retains ownership deserves more generous treatment than
a hired manager, and that corporations require much more
stringent regulation than privately held businesses.

Regarding your statement, "Tax policies favoring 'investment' have resulted in tax penalties on work."... There may well be tax policies favoring investment but how does this CAUSE tax penalties on work?

When you speak of "investing" you seem to be referring primarily to short-term stock traders. Am I correct in this assumption or are you referring to other types of investment as well?

The connections are many but for the most part indirect so they remain invisible or unappreciated. Before addrerssing the causes let's look at the results which speak for themselves in income distribution and tax receipts, Strangely the results are cited by 'conservatives' to urge greater and greater tax cuts for those with the high incomes and assets.

The arugement for Reagan's and all of the various tax cuts since, always start by pointing out that the upper decile, or some other section of top income/asset class holders are paying a hugely disproportionate share of all taxes. Then, when the cuts are made their share of the total rises so back to the congress they come again.

After 25 years of this logic insists we consider that the tax cuts themselves have been a big factor CAUSING incomes and assets to skew to the top. Americas wealth distribution is now the most unequal of any developed nation, and growing relentlessly. Little wonder that top section pays such a disproportionate share of taxes. It's because they receive such a disproportionate share of all income. (essentially taxes are still approximately fairly equally shared if one looks at income. THe top gets the most and pay the most.)

A recent report said 90% of earners are now making less than they did in 1970. The top 1/10% making 500% more, or something like it.

It's a big topic why the tax cuts have caused this skewing but in a nutshell it is because tax policies favoring 'investment' by individuals and on corporate income has inflated financial asset values which has led to more 'investment' in said assets but the fact is that this 'investment' has been hugely wastefull. Malinvestment is the order of the day. The best example was the dotcom thing, where several trillion dollars were thrown down a rathole, never producing on bit of profit.

There are certainly other factors involved in these trends as well. Ultimately politics and economics are the same and as the wealthy have regained the upperhand in politics they have also gained all those special favors from government that boosts their income, apart from tax savings. The cronyism and corruption now rampant under Bush goes virtually unremarked upon which reflects a cultural reality that goes beyond economics.

---------

I was speaking of all 'investing'. Stocks are ALWYAYS a speculation, setting 25 years of propoganda saying otherwise aside. It's silly to talk of short or long term stock trading when every day the dollar volume of stock trading averages 3 times more than transactions in the real economy. Stocks are a mania, still, after the crash. The propoganda touting stocks never faltered. So billions and billions go into the market daily, and inflate stocks, while millions of jobs have been lost, forever, replaced if replaced at all by lower paying ones.

My special oft repeated rants here deal with the credit binge we are now living thru. This is a root cause as well of the inflation of financial assets. It also drives the inflation of those assets as leveraged players pile into hot areas. For the most part again, this 'investment' is malinvestment.

A special place must be made for residential real estate inflation, which is fueled by easy ultra cheap credit. Here the average person thinks they are profiting from 'investment'. I always put investment in quotes because in capitalism the term has a specific meaning. It means commitment of capital based upon an expected return of income. Lacking any positive cash flow or return of capital from ongoing earnings you don't have an investment, you have a speculation.

In almost no part of America can you generate a reasonable return, or any positive return, by renting a residence. What makes money in homes is price inflation. Again, this isn't investment it is speculation. The trillion new dollars going into homes this year will produce no income. It will produce enourmous claims on future income, from some other source, for the holders thru interest payments but it does not produce real profit.

The entire financial word including real estate is based upon inflation of asset values. This isn't capitalism. It is something else.


And getting back to the treads topic. Income generated thru speculation has been institutionalized as THE way to make money. Working, more than ever, is for poor suckers. Wage slaves who are told we have to send your job to China, you ask too much. Yet again and again tax policies will encourage more speculation and perhaps continue to inflate financial assets in a vicious circle. Well a virtuous circle for those profiting. And income will continue to skew to the top and more tax cuts will go to the speculators, till something gives.

The class war has been fought and won by the top. The biggest wealth transfer in history is now almost complete. Yet against all logic the top is able to maintain the bottom is attacking them with taxes. In the 40's 50's and much of the 60's income in America reached its most equal distribution. Not coincidentally I maintain we also had the highest GNP growth rates. Under those conditions the top maintains they suffered. Now they are set to get almost all of the governments spending directly into their pockets. Yet they still whine and whine. Go figure.

RE: Regarding your statement, "Tax policies favoring 'investment' have resulted in tax penalties on work."... There may well be tax policies favoring investment but how does this CAUSE tax penalties on work?

In many ways. For instance it is well documented that executives who use an ax to cut employees and wages received the most pay and those stocks did the best. This may not be an exact reason why but the results and the picture it gives of the way incentives are given to lower the income of the majority contain a big clue. Figure it out.

Corporations pay about 12% of all Federal taxes, down from 25% in the 50's. This despite the fact that corporations have gained huge amounts of the total bussiness cash flow over that time. (and despite the fact that corporate earnings were much higher then, and so were dividends, which returned real income to real investors)

WallMart has driven tens of thousands of small retailers, often individual propriators out of bussiness. THey knowingly drive their suppliers offshore. In essence they DEMAND production offshore. The money and profit flow to the top. I suppose this goes beyond the tax question but the hollowing out of heart of the middle class by corporations, aided without question by tax advantages, gets to the heart of the issue.


The tax penalty is contained not in the tax rate nor tax share of the middle and lower class but rather contained in the lowering of their income by the tax incentives given to the top. Again, I maintain logic insists that a 25 year trend of lowering incomes of all but the top while their tax rates have fallen suggests a causal relationship. Further tax cuts will cause further income disparities. You can bet on it.

It is difficult to describe these things and not fall into rote corporation or bussiness bashing and thus render any logic in the arguements defenseless against ideological attack from the usual conservative side. So many of these issues are essentially cultural. Culture being all those things we know and do without thought, being totally inculcated into our perceptions.

The 'supply side', increase 'investment' arguements are now unassailable by even a huge majority of skeptics. There is no longer any understanding or even language to use against it. This despite the fact that Adam Smith would scoff at supply side theory. Supply side theory is dependent upon a debunked (mostly, he has new adherents among the crowd now) earlier eonomomist, Say, who said demand will rise to meet any supply. Smith would say skewing incentives to the suppliers distorts the market. It used to be gospel that the buyer was the determining factor in the market. Now unlimited amounts of money are 'printed' thru ultra easy credit in order to induce silly wastefull spending, and they have the gall to call it growth...........

ranting on, sorry

Supply side economics has fostered the total decimation of huge swaths of American manufactruing. On its face a bizzare result. Yet still, the drumbeat of 'we must increase investment' persists. What does 'investment' mean seen in that light? Disivestment is now investment. Is that it?


Or how about this absurdity. We are urged, begged and prodded to buy and consume. Yet suggesting any tax cuts to consumers so they would have more cash to spend is discounted. No, we must give bussiness and 'investorts' the money it is said. People after all will just waste the money on silly things, beer and porno probably. But here citizen, I'll lend you money at zero interest to buy a big TV and a 6000 pound gas hog. Simply bizzare.

option one(1) seems to be another plan generated by the rich to afford themselves greater flexiblity in avoiding taxes. This method seems to be on the rise. I suggest everyone rail against it. Last time i saw it was on http://www.slantright.com . Troll those bastards good please

option two(2) is crazy. the more you benifit from the system the more you contribute.

option three(3) might be fine with me as long as all monies are taxed regardless of where the come fromand zero percent for the poor. no loop holes and no avoidance.

option four(4)soudns liek the current system to me. This is the one i prefer. The idea here is that everyone REQUIRES a certain amount to survive. amounts above this level get increasingly taxed as the level rises. It makes me laugh when i hear people complain about getting taxed at 40% when in truth, they are getting taxed just like everyone else, their excess income is whats getting hit for 40%

That way they have less money to manipulate our govt and our country, and the govt has more money to provide healthcare, welfare, unemployment, subsidized housing, so that we citizens can enjoy more time off and not have to work so much of our lives. Imagine that!