Income Tax

Great Debates
1

I sat at my kitchen table for almost 30 minutes this morning, signing papers, writing large checks and stuffing envelopes so that I could then go to the post office and stand in line for another half hour or so and mail my tax returns in.

It made me wonder…

Why do I need to pay taxes? I mean, I understand that it is my civic duty to support my government, but isn’t there any veracity to the claim that simple cost-cutting and better management could reduce government spending to the point that taxes could be eliminated?

If I ran my business the way the pentagon does, I’d be broke in no time!

(BTW, this isn’t a joke - I expect a long, thoughtful answer from Libertarian as well as a cynical, snide, wholy entertaining shot from Satan and something belly-achingly funny from Wally. Rather arrogant of me to expect them to answer, isn’t it?)

2

But first you’ll get an admonishment from me to stop posting GD topics in GQ.

3

Well, let us look at your premise.

Do we need a gov’t? There are many different levels of answers, but I think most will agree that we do need at least some amount of gov’t. If nothing more than to build roads and law enforcement, courts, etc.

Now, the gov’t has no means of making money, so therefore there must be some sort of tax to pay for these roads, law enforcement, courts, etc.

Now, I do believe that the gov’t could indeed be less wasteful in a number of areas. Also, there are areas of gov’t that could be argued that are really outside of what our founding fathers had in mind. But we still need some money to do the basic things that need to be done by the gov’t. So taxes it is.

Now, could our tax burden be lower? Sure, unless you are in the group that pays little to no taxes already. Could we have a different tax system that is not so complex? Almost definitely. See www.fairtax.org as an example.

But, in the end almost everybody agrees that there must be some level of taxing going on. Either they get you directly or they get you by taxing your purchased goods.

Jeffery

4

Sure it does! You’ve just been socialized into thinking a certain way. Approach the question from a business perspective:

All the government must do to break even is charge for the products and services it provides! It already does:
[list]
[li]Ever pay a toll?[/li][li]Sales Tax?[/li][li]Import taxes?[/li][li]Lotteries?[/li][li]etc etc etc[/li]
I should have been more clear in my OP, but I meant to ask if the gov’t could stay afloat without taxing my income. Sorry.

What d’ya think about that?

5

Let’s use sales tax as an example. I’m in Texas, where there is no state income tax. Our sales tax, however, is nearly 2 cents higher than neighboring states that have an income tax.

I’m not sure what tax bracket you’re in, so let’s just make up a number: how would you feel about a 20 cent-per-dollar sales tax, if it meant that you’d no longer have to pay income tax?

6

Are you saying that sales tax is 18 cents in Texas?!? :confused:

Your point is predicated on current government spending. Yes, if we eliminated income tax **today[/b[, we would need to raise all other forms of government income dramatically. But, you’ve forgotten the other half of the question - we need to reform government spending at the same time we cut their revenue.

This could work… couldn’t it?

7

Do you consider Social Security and Medicare taxes to be part of the “income taxes” you seek to reduce or eliminate?

8

tracer:
Short answer - I don’t know.

Longer answer - I haven’t thought that far ahead… but first - let me make something clear:

I don’t “seek to eliminate” taxes of any kind. I just want to know if it’s possible. I know that it sounded like a joke in the OP, but I was really hoping that Libertairan would pipe in on this one… he’s great at issues like these, and I could use his help.

I guess what I am really after is someone who can tell me why I should feel good and proud about all the money I sent off this morning.

9

This reminds me… Where the heck is Libertarian?

Yer pal,
Satan

http://www.raleighmusic.com/board/Images/devil.gif

TIME ELAPSED SINCE I QUIT SMOKING:
One week, two days, 7 minutes and 56 seconds.
360 cigarettes not smoked, saving $45.02.
Life saved: 1 day, 6 hours, 0 minutes.

10

For starters, Brian is new to this particular board, so you’ll forgive me if I’m not down with the all the etiquette just yet.

“Our” government oversteps the Constitution every day. I mean, look at Elian Gonzalez? Why is that kid still here? We’re breaking our own laws. That’s what’s funny (or at least unusual) about the income tax. It’s one of the few times our government has bothered to amend the constitution before overstepping it. However, just because it’s been added to the constitution doesn’t make it right. In fact, the income tax can be taken to contradict most everything politicians are standing for these days (which, by the way, isn’t much).

So Congress wants to bring back family values? And President Bill wants to fight poverty? Consider this: The government takes 25% of everything I earn and I’m a fulltime student. They take more than 40% of everything my father makes and that number will only be higher when I enter the work force full time. If they gave that 40% back and paid for their services and agencies with user fees (I know, that wouldn’t come near covering everything, but most of the governments programs are run wastefully or are unnecessary by nature) one parent in most families could stay home full time (and I don’t necessarily mean the mother, by the way). How’s THAT for family values. It seems that it would work a whole lot better than illegally posting the Ten Commandments in every school nation wide, that’s for sure. Want to talk poverty? How many poverty stricken families do you think we could help live easier if we didn’t take a quarter or more of their weekly income and (mostly) throw it away? I don’t know, but I’d like to think the number would be impressive.

So there. It might not have made you feel good about the money you sent away, but it is, at least, my spin on “the truth.” Hope I haven’t screwed up to much . . .

Brian

11

This may technically be a thread hijack, but why did you stand in line for a half hour at the PO to mail your returns in? I saw a lot of people standing in the line today holding a few normal envelopes, yet I was able to quickly zip in and buy stamps (I had run out) and drop them in the little slot. Even if my returns were larger than 1st class mail, I could just drop the envelope on the convenient electronic scale, put $5 in the stamp machine, and send them on their way. I really don’t understand why so many people wait in line to mail tax returns.

It’s certainly possible to eliminate the income tax, as there are many other ways for the government to get money. “Simple cost-cutting”, though, runs into a very complex debate where you first have to decide what can and can’t be cut.

Well, the pentagon doesn’t actually do anything to make a profit - if they hired themselves out as mercenaries, they’d have an income. But a lot of the inefficiency isn’t the Pentagon’s fault, it’s congress’s fault for mandating huge amounts of paperwork for anything bought by the military. Most of the time the $700 hammers and whatnot get that price because the cost of the simply incredible number of forms someone has to fill out to sell them is amortized over all of the items on the list. Not that the military is perfectly efficient or anything.

Kevin Allegood,

“At least one could get something through Trotsky’s skull.”

  • Joseph Michael Bay
12

Does Brian know that Brian is calling him by Brian, in the third person? Does Brian think that’s wierd? And who the hell is veruleika? :rolleyes:

Just kidding! Welcome to the SDMB, Brian! :slight_smile:

I don’t know either, Brian. But your point would have a better chance of surviving here if one of us had any idea. Got any sources?

13

[hijack]

Conventional Wisdom says its a good idea to get proof that you sent in your returns. That means you gotta send it registered or certified (or, this year, you can use what they call a "Proof of Mailing Form). Ergo, you need to stand in line.

I know it sounds like a waste of time and money, but consider if something gets lost…

14

If we replaced the Income Tax with a VAT or sales tax, the rate would have to be about 17%. This means, everyone in the under 100K TI bracket would pay MORE taxes (I’m assuming SS, FICA, FUTA, etc all stay, and are collected like they are now). I’m willing to bet you(or your father) paid less than 20% of your overall income on income taxes. I’m guessing you at about 10%. You see, it’s NOT the income tax that gets you, its all those other taxes, FICA, FUTA, Duties, State Sales/income, property, etc etc etc, That’s
where they get that 40% figure. Now they COULD replace the Fed Income Tax, by increasing the other taxes, but in every revenue neutral system Ive seen, the middle class pays MORE.

The big stuff in the Fed budget: Social security, Welfare/aid, and Military. Try to cut SS and the Sr citizens will be on you like a…umm, grey panther? The Military COULD be run and make some $, but everytime we do, people scream about warmongering & weapons dealing and training right-wing secret police.

You have 2 separate queries here. And, both cannot be discussed rationally at the same time. Otherwise, some moron will come up with a “pie in the sky” tax system, that cannot work, and claim it will come from “budget cuts”. So which do you want, budget cuts or tax reform?

15

??? If I stop asking you to pay your rent by check and start asking you to pay it by money order instead, you’re still paying the rent. The government switching from income taxes to user fees would have the same effect.

If by “user fees” you really meant “tax something that I don’t purchase but everyone else does”, be aware that everyone else would be thinking the same thing and voting for the government to tax everything that veruleika buys but they don’t. :slight_smile:

If you’re thinking in terms of raising business taxes drastically, note that the end result of that is higher prices - the consumer is the final source of all revenue, and it all comes out of the consumer’s pocket one way or the other.

16

I remember a 60 Minutes segment aways back during the huge federal deficit period where they took a dozen or so everyday folks (all of whom firmly believed that eliminating the deficit would be a simple matter of eliminating waste), gave them a dollar breakdown of the federal budget, and told them to get together for a couple of weeks (at 60 Minutes’ expense) and come up with a federal budget that eliminated the deficit. The catch was that the 60 Minutes team selected several each of people with a wide variety of viewpoints and axes to grind (some students, some yuppies, some retirees - some private workers, some government workers, some in the military - things like that), so they couldn’t come up with answers that only affected folks who weren’t attending the meetings.

Those folks all came out of their meetings a couple of weeks later with a new respect for just how difficult that task was. And note that they were just attempting to eliminate the deficit, not eliminate income taxes.

17

Good posts, all! Thank you!

Is the implication here that the programs run by are government are not marketable?

By this I mean… Isn’t there anything that the government does that consumers would pay to support even if they weren’t forced to?

18

Does the government provide services I’d be willing to pay for if I weren’t forced to? Hell yeah, I think I’ll hang on to the police and fire departments. There are even things I’d pay for that some consider a waste, like the NEA…although I could probably do without the North Atlantic Cod Commission, and some other odd little bureaus.

19

Consider these governmental programs–would you be willing to do without them or pay enough fees to support them?

Bureau of Records–birth certificates, death certificates

Department of Human Services–nursing home inspections, hospital oversight, health care for the poor, immunizations for children, mental health care, services for the developmentally disabled. This means nursing home care, mental health care, medical care, and special education for the disabled would have to be funded by their families.

Highway Patrol

State Colleges and Universities

Research on diseases, including rare diseases that might not affect more than 1 person in 1,000,000.

Research on improved farming methods, environmental problems, space programs, basic science research in physics, evolutionary biology, paleontology, archaeology

Public water treatment systems

Public court systems–imagine the cost of a divorce or adoption if you had to pay the judges salary and overhead and record keeping fees (might be a good idea for some torts :))

Department of Wildlife/Forestry/Fisheries–Want to fight your own forest fires, keep hunters legal, monitor stream quality and fish habitat?

Prisons/juvenile corrections facilities–make the prisoners pay their own way? Is that feasible?

Public sports/recreation facilities. How much would it cost to hike in a wilderness area? How much would you pay to have a public swimming pool? Would there even be enough demand once the costs were distributed to users?

Want to pay real users fees to the Smithsonian or Library of Congress?

Would users fees fund state attorney general’s offices? Federal justice departments? FBI, CIA?

How about the FDA? Wouldn’t user fee funding eliminate the supposed impartiality of drug approval process? Same is true for EPA–let’s let heavy industry pay user fees for EPA inspections and see how well they protect the public.

Veteran’s hospitals and nursing homes–vets can pay for these services, right? How about the military cemetaries? Shouldn’t vets have to pay for the plot and permanent upkeep?

etc, etc, etc. It’s always easy to despise government when you label it as “government” When you start looking at individual services it gets a little harder to know what we would really be willing to give up. Too many of the services we take for granted could not really be funded just by the actual first users. Take for example services for people with disabilities. You can’t charge the ultimate consumer or most of them would not be able to afford physical therapy, occupational therapy, medicine for chronic conditions. Private insurance doesn’t cover it. So, we’d have to go back to the old days of letting the mentally retarded or physically disabled sit in the corner or wander the streets instead of giving them a chance to fill their potential.

20

Another thought –

If we could actually lower taxes - say instead of 40%, everyone only paid 25% - everyone would have more money in their pockets. Because everyone would have more money, inflation would rise (i.e. companies charge what the market will bear) especially for luxury and non-necessities. I’m not sure that most people would come out ahead in the end.

The class system in America grades on a curve - we all have more money, but an average income remains average and buys average things. (Oh, and you pay use fees for things that are free or subsidized now).