Yes. We had a tax on new, American-made yachts. Used yachts weren’t taxed. Foreign-built yachts weren’t taxed. Those were loopholes that you could have driven a, uhm, yacht through. That doesn’t mean that ALL yacht taxes are forever going to fail.
And I agree, taxes on diamond rings and Italian sportscars will not generate huge amounts of tax revenue. But as Everett Dirksen said, “A million here, a million there, pretty soon you’re talking about some real money.”
Larger GDP does not necessarily mean better jobs and incomes for workers. Surely we can look at many Third World economies with disturbingly unequal income distrubtions and see evidence of this fact. One shouldn’t put economic statistics ahead of the concerns of American workers, lest we continue the growing income distribution gap. That’s a point that many fiscal conservatives don’t seem to ponder very much.
Close all the loopholes and bury the underground economy: Define ‘whathaveyou’ as all goods and services (with the exception of food), raise your ‘10%’ to 19%, include ‘wealthy’ and non-wealthy persons and eliminate the federal income tax altogether.
But it works so well in principle, on paper and on the board game Monopoly!
Uhm, no? Doesn’t the fact that third world economies are, well, you know, third world mean that they are very small? Wouldn’t it be better to look at the history of some country or region which went from a small economy to a large one with no coresponding increase in a middle class? Care to provide an example?
And one should not put PC measurements of equality ahead of them either. No?
But again, this is only because you are not paying attention. I know of no conservatives who believe that growing the GDP without growing the wealth of all classes would be a good thing. You think they don’t support such things because the only way you beleive middle classes can gain economic improvement is through larger government. So, you equate a call for smaller government with a call for less wealth in the middle classes.
I am a business owner, but not an economist, but this (progressive tax system) would only work if it was a GLOBAL uniform economic policy. Too many other countries with too many other tax structures, some more advantageous for the wealthy, (some not so advantageous at all) would make it more appealing to relocate (immigrate) to other countries who would be more than happy to take them in…kind of like companies here in California relocating to better business/economic climates in other states/countries when our liberal lawmakers pass “job-killer” bills in the name of progressivity. Our recent elections (propositions) reversed some of this, but it may be too little, too late for a near term rebound in the economy. Even if California turns things around, those businesses that moved out are not coming back unless we drastically cut back further in detrimental legislation to make the state an obvious choice to relocate back to. Why do that when instead, you could make sound legislation to begin with? A luxury tax on certain items in a certain country is unsound plan to raise government revenue to begin with IMHO.
I don’t quite get what you’re getting at. Are you trying to argue about how underdeveloped countries become industrialized, or do you disagree with the idea that economic growth is not always shared equally? If it’s the former, then perhaps we should open a different thread, since that is getting way off the topic at hand here.
If it’s the latter, check out this page from the CIA about income distribution in various countries. A lower number indicates a more even income distribution (ie, Sweden’s Gini index is at 25, indicating a larger middle class and less extremes of poverty and wealth, whereas Sierra Leone’s 62 indicates huge disparities.) The US stands at 45 in this ranking, closer to Uruguay, Costa Rica, and Cameroon than to most other industrialized nations (which tend to rank in the high 20s and low-to-mid 30s.)
You’re trying to put words in my mouth. I ask you to stop it. If you find any statement I have ever made that “the only way” middle classes can gain “is through larger government,” then I’ll let you continue on your point, but I can tell you now that it’s not something that I have ever believed. What I have contended is that a tax system that shifts increasing amounts of the tax burden from the wealthy to the middle and lower classes is fundamentally unfair. To that extent, those who make more money should pay a gradually increasing rate of tax to fund the public services that everyone enjoys. I should pay my taxes at a slightly higher rate than your average blue collar worker, and the average CEO should pay taxes at a slightly higher rate than me.
Further, progressive taxation isn’t antithetical to small government. If one were to slice government spending in half, one could also slice the tax rates in half and maintain progressivity.
Finally, I don’t buy for one second Mr Moto’s point that progressive taxation is a significant disincentive to the wealthy for greater wealth creation. (Provided that the taxation isn’t punative, like in the case of 70% or greater top rates.) If, as you argue, higher tax rates on the wealthy is a brake on job creation, than you must also concede that shifting the tax burden to the poor and the middle class is a brake on labor. That saw cuts both ways.
And so what? Now you’re gonna spend inspectors to read European classified ads to see how much I paid for my sailboat? IRS agents in the Chesapeake Bay looking for new registrations which might be more expensive than whatever number you’ve made up as “too” expensive for a respectable person to have? And you’re gonna do it for less than the tiny amount of revenue you’ll collect? Why?!?
I think you have a serious problem with yacht envy. You need to find a nice economist who realizes that it’s the not the size of the boat, it’s the motion of the ocean.
But seriously, I imagine that yachts – er, let’s start talking about aircraft here, lest I start feeling like I must wear dark glasses and a trenchcoat each time I enter this thread – I imagine that aircraft have to be inspected upon arrival by the Customs Service, registered with the proper authorities, and certainly there are various agents and other middlemen involved in the whole process. I simply don’t think enforcement need be any more difficult than importing and registering an exotic car in the US.
Of course, furs and jewelry are a different matter. I suppose if they were imported. they’d have to be declared to customs officials upon importation, just as is required under current law.
But after all that, why? It’s already been established that such a tax wouldn’t raise any real money and that it would throw people out of work. It would also cause people to make behavior changes in reaction to the tax code rather than real economic efficiencies (in your most recent example, people would lease rather than purchase aircraft as many people are already doing, endangering an industry that was just beginning to come back from years of litigation that all but put it out of business prior to a 9-11 related slowdown) and it would complicate an already-complicated tax code. And you know what comes next after such a complication – loopholes and further complications. Someone (maybe even a Democratic someone) would try to mitigate the damage done to American jobs with another provision. Someone else would try to exempt sailboats but not powerboats on environmental grounds. We’d have to go a few rounds with the WTO, which would argue that failing to subtract the selling country’s VAT from the luxury excise tax amounted to an unfair trade barrier. And on and on and on.
All that just to stick it to a few rich guys? Without even actually raising any moeny? This has been done before. It has turned out to be a poor idea every single time. Shit, just get a gun and rob some rich guys. Drop the loot off on the steps of the Treasury building. It’s more efficient and, frankly, more honest.
I’d rather have millionaires, as a group, chip in some extra taxes than require blue collar Americans to cough it up. Or worse yet, have the Treasury issue more instruments that will require future generations to pay even more taxes.
I’m not saying that resumption of the luxury tax should be a high priority issue for this country. It seems we both agree that it’s pretty small potatoes given all the issues that are out there. Increasing the top marginal tax rate by one or two percent is a much better and realistic policy prescription. A major simplication of the tax code to close loopholes and reconcile tax rates with exemptions and deductions would be even better, still.
Bringing this back around to the OP, however, I think an effort by government to redirect consumption simply for the purpose of compelling Americans to buy more modest items is unfair and mean-spirited.
I am suggesting that an unequal share of economic growth has little to do with government policies. Especially with reagards to the existence or not of luxury taxes.
You know what? You’re right. I appologize. In my own defence I can only say that I am a conservative bastard.
Ok, but this assumes that the tax burden was perfectly adjusted to the start. Otherwise such a shift is exactly fair. Now if you want to say that it is unfair for the middle class to pay more than the rich (per person) I think I could join you. I might even join you if you want to say that the rich should pay propotionally more. Assuming the proportional differences you are talking about are relatively minor.
Ah, but the rub, so to speak here, is that “everyone enjoys”. As services which only some enjoy become a larger and larger proportion of the federal (and state) budgets, this equation might have to change.
Of course. Again, has anyone suggested that we raise taxes on the middle class?
