Taxes?

[vanilla]

I don't pay taxes (don't earn enough, unfortuantely)
My friend-A Bircher (and Libertarian) says taxes should be done away with.

I have questions: What would happen if we stopped taxes now?
How did we survive as a nation before we started paying them?

Ask Marilyn claims that the economy would tank if taxes were abolished. Maybe so.
Why?

Are taxes really that bad?
Please explain the pros of taxes so i may try to explain to my friend, BirchMan.

[Captain Amazing]

Ask your friend how the government would be funded without taxes.

[vanilla]

I can ask him Thursday, during the "meeting", but I think he thinks, as may others, that taxes should be raised on the things that are bought.
Which still doesn't answer my honest questions.

[vanilla]

How was it funded before taxes were imposed?

[DreadCthulhu]

So, basically, your friend wants to get rid of the income tax, but raise a sales tax to cover the expenses? Normally sales taxes are regressive, as they tend to effect the poor more than the rich(the poor spend a larger percentage of their income on goods). I have seen a couple sales tax plans that use standard reembursments to make the tax more progressive, however. Now, before the US had an income tax, most of the government money was raised by tarriffs, and excise or sales taxes on certain goods, like alcohol. Of course the US government was dramatically smaller back then, and didn't need all that much money.

[vanilla]

Okay.
He says we could support our government by the excise tax only (I don't know what that is).
Also, we could make a ton by selling the 30% of land that is owned by the Federal Government.

So...how did we survive before taxes, and why could we not now?

[ElJeffe]

First of all, I think we need to be more specific. No serious Libertarian can endorse the elimination of all taxes, unless he's promoting anarchy (ie, no government). The government needs some money to function, and taxes are the only way to do that. Even if you get rid of everything except the excise tax, that's still a tax, and it will still affect the American people, albeit less directly.

So, how did the federal govenment function before, when all it had was import/export duties? Simple - it didn't really do much. The federalist ideal of the founding fathers stated that the federal government was there just to oversee the workings of the states. Anything that could be handled by the states should be handled by the states. The FFs would have choked on their wooden teeth at the thought of things like a federal Department of Education, or Social Security, or Medicare, or just about anything the modern federal government does. All of these things, if they should be done at all, should be done by the states - at least as far as the FF were concerned.

Honestly, I'm no expert in the field, and I don't know what the exhaustive list of Acceptable Federal Duties would've been back then. I imagine it would've included interstate commerce, international commerce, and nation security (including the military), and that would be about all. Things like the Dept. of Immigration probably would've been okay by them, too. But I would estimate that roughly 50-60% of the current cost of the federal government is used to run things the federal government was never meant to handle. (I arrived at those figures by figuring that the cost of the military is 30-40% of the budget, and adding some small nominal amount to cover the other few things that would've gotten the FFs' stamp of approval.)

However, I believe that the FFs would've had little problem with state taxes. A state figures out what kind of services it would like to offer, then taxes accordingly. Some states would have Medicare, some wouldn't, some would offer SS, some wouldn't, and so on. If you don't like the smorgasbord of services you get in your state, move to a different one. There would be a broad range of variety in the states, going from fairly libertarian states to fairly socialist ones. The libertarian states would have lower taxes than the socialist ones. There'd be something for almost everyone.

But I think I've veered wildly off topic here. It's not that we couldn't survive without taxes now. It's that we couldn't get everything that people are demanding now without taxes. If you want to live somewhere where you can not work for long stretches and still get money; where you don't need to think about retirement planning; where the government pays for your kids to go to school; where you don't have to worry about an army of Canadians storming the capital; where you get to drive on nice, paved roads instead of four-wheeling across the naked plains... well, all that's gonna cost ya. Or rather, it's gonna cost someone.


Jeff

[Captain Amazing]

Originally posted by vanilla
Okay.
He says we could support our government by the excise tax only (I don't know what that is).
. . .

So...how did we survive before taxes, and why could we not now?

Excise taxes are taxes levied on goods or services. The tax the government puts on cigarettes is an excise tax, for example, and so are the taxes on your telephone bill.

As to how we survived before taxes, we didn't...taxes are probably the oldest function of govenment. Before income taxes, though, the US government relied on excise taxes, tarrifs, and things like that, in addition to going into debt and sometimes just printing up more money. However, even if we wanted to rely on that today(which we might not...excise and sales taxes are really regressive), we really couldn't. The national government does a lot more now than it did 100 or 200 years ago, from health and safety regulations, to keeping a large standing military, to providing social services for the poor, the elderly, and those unable to work. If we want all those things, we have to raise money for them.

[Captain Amazing]

Originally posted by ElJeffe
Honestly, I'm no expert in the field, and I don't know what the exhaustive list of Acceptable Federal Duties would've been back then. I imagine it would've included interstate commerce, international commerce, and nation security (including the military), and that would be about all. Things like the Dept. of Immigration probably would've been okay by them, too.

If that, even...The national government at the time of the FF didn't originally worry about immigration much, except by setting residency requirements before you could become a citizen. And they weren't all that keen about the military either. In fact, they were opposed to the idea of a large standing army. Smacked of tyranny or something, so military spending would have been small.

And you forgot spending for the patent office. :)

[tracer]

Originally posted by Captain Amazing
Before income taxes, though, the US government relied on excise taxes, tarrifs, and things like that, in addition to going into debt and sometimes just printing up more money.
And land grants. Don't forget land grants. That's pretty much how the Federal government got the transcontinental railroad built.

[vanilla]

Originally posted by Captain Amazing
Excise taxes are taxes levied on goods or services. The tax the government puts on cigarettes is an excise tax, for example, and so are the taxes on your telephone bill.

If we want all those things, we have to raise money for them.

Bake sale!
:)
Yes, as a Lib, he doesn't want to do away with all taxes.
What of his idea to sell Federal Land?

[yojimbo]

What of his idea to sell Federal Land? How much money would be actually raised this way and what would you do when it's spent. The US budget is quite large I would imagine ;)

[Jonathan Chance]

And don't forget that the Land Sale idea is a one-shot deal. What happens when the money runs out.

I'm practical for a reason.

[tracer]

Originally posted by Jonathan Chance
And don't forget that the Land Sale idea is a one-shot deal. What happens when the money runs out.
We'll just have to go take over other countries, then, so that we can sell their land!

[ElJeffe]

quote:
--------------------------------------------------------------------------------
Originally posted by Jonathan Chance
And don't forget that the Land Sale idea is a one-shot deal. What happens when the money runs out.
--------------------------------------------------------------------------------


We'll just have to go take over other countries, then, so that we can sell their land!


Or we can just do a Land Lease. We just have to resist the temptation to offer rent-to-own deals.


Jeff

[tracer]

Is that what the Federal Color of Title Act of 1927 was for?

[DanBlather]

Originally posted by tracer
We'll just have to go take over other countries, then, so that we can sell their land!

Dear Tracer:

Not funny.

Sincerly,

Mexcio

:)

[Northern Piper]

Originally posted by tracer
We'll just have to go take over other countries, then, so that we can sell their land! The Teeming Millions are already working on this option: Should the United States expand its territory? (http://boards.straightdope.com/sdmb/showthread.php?s=&threadid=177216&perpage=50&pagenumber=1)

[Northern Piper]

Originally posted by tracer
Is that what the Federal Color of Title Act of 1927 was for? From a quick skim of the Colour of Title Act (now found at USC, Title 43, s. 1068 (http://www4.law.cornell.edu/uscode/43/1068.html)), it looks like its purpose was to recognize adverse possession against the federal government. If you and your ancestors had been occupying a piece of federal land for more than 20 years, and you met various other conditions, the Secretary of the Interior had the authority to issue a land grant to you. But that's just from a quick skim - I don't know anything more.

[msmith537]

Originally posted by vanilla
I have questions: What would happen if we stopped taxes now?
How did we survive as a nation before we started paying them?


The the government would stop wasting them on things like schools, police, fire and defense.


Originally posted by vanilla
Ask Marilyn claims that the economy would tank if taxes were abolished. Maybe so.
Why?
[/B]

Well there would be several million unemployed government workers.

[C K Dexter Haven]

I think it'd be great to sell off all the Federal land. Yellowstone National Park, and all them other national parks, for instance, would be bought up in a minute by the oil companies and mining companies for a pretty penny. The White House, too, is prime property, and that big stretch of land around the Washington Monument would go for a fortune to developers who want to put up condominiums. And Arlington National Cemetary could be paved over for a shopping center, and we'd get millions for it.
Mount Rushmore, man, they'd sell that to advertising firms -- who would pay millions for the opportunity to put neon advertisements on George Washington's forehead. And to carve a huge Coca-Cola can on the empty space near Teddy Roosevelt.

What a great idea!

[tracer]

Originally posted by C K Dexter Haven
And Arlington National Cemetary could be paved over for a shopping center, and we'd get millions for it.
Although the shopping center developers might get out-bid by the Lee family or the Virginia Historical Society or some such, who'd want to put General Lee's house back where it originally stood.

[Severian]

Excise tax vs. income tax; what's the difference? Unless government spending is reduced we, as a population, will still have to pay the same amount.

[tracer]

Severian:

The difference is that rich people spend a much smaller fraction of their income buying the kinds of things that could be subjected to excise (or sales) tax than poor people do. The population as a whole would have to pay the same amount, but which members of the population would be shouldering the bulk of the burden would shift dramatically.