The only “problem” with this is, “the rich” in total pay fewer taxes than they do now, so “obviously it’s unfair.” (I tried calculating what would happen if the tax code were changed to “nobody who makes less than $100,000 pays any tax, and anybody who makes more than $100,000 pays a rate 1% lower than they do now,” and got something like “95% of the savings still goes to the richest 25%,” so anything short of “the rich need to pay the same, if not a higher, percentage than they do now” may be treated as a tax cut for the wealthy.)
I’ve tried to find information about the potential consequences of a ‘transaction tax’, but I haven’t successfully found anything, perhaps because I’m not searching for the right terms (I find it unlikely that I have come up with a completely new and novel idea that no one has ever commented on before, but all searches I find are more specific than my total, broad concept, generally limiting the tax to certain types of transactions).
But basically speaking, I would be interested in seeing how it works. Simply tax all transactions. Any time money (or really, ‘things of value’) changes hands, for any reason, it gets taxed. At a very low rate. No variations based on…well, anything. Every transaction gets taxed at the same rate. It would seem to eliminate loopholes - whether someone gets money, or stocks, or a pile of gold, or a house, it’s a transaction and it gets taxed. With every possible transaction being taxed, the actual rate from each transaction can likely be extremely low and still manage to fund all the necessary functionality of government.
The biggest flaw I can see is that things that are made from many individual parts would almost certainly become more expensive; the less transactions needed in order to bring a product to market, the less taxes would be paid, thus it would encourage business strategies that minimize number of transactions. I suspect that may not be the most efficient thing to encourage. I am not sure if this is a sufficiently large problem to make this plan a bad one, though.
Man this is great! :eek: Hey all of us working slobs have to move out money- more or less to spend it. And we have to do so in the uSA, by and large. But the ultra rich can either have their money sit and earn dividends, or move it around outside the USA. So, us working stiffs pay all the taxes while the multimillionairs pay taxes like Mitt supposedly did. I’m excited about this, can’t wait!!
:rolleyes::rolleyes:
Listen, all taxes are distortive but these economists make some good points and some horrible ones.
Mortgage interest deduction: I half agree. It is unnecessarily distorrtive but it must be phased out over a very long transition period (something like 30 years, slowly reducing the cap is probably the best way) otherwise it will have a significant adverse effect on the economy.
Deduction for employer contribution to health insurance premiums: I agree. More accurately, tax people for their employers contribution for health insurance, treat it like the compensation that it is. The cost of the premiums to the employer is a legitimate expense. This one is actually pretty easy to do in concert with the implementation of a single payer system. Any insurance the employer provides is going to be for supplemental insurance that gold plates the state provided insurance coverage.
Eliminate the corporate tax: Disagree. BUT, if you are going to eliminate the corporate tax (in the interests of eliminating double taxation), then you have to treat all corporations like partnerships and tax the owners for current income. The notion of letting people indefinitely defer income taxes as long as they keep it in a corporation is a bit silly. I could plan my way around a system like that so that I would never pay any taxes.
Replace the income tax and payroll taxes with a consumption tax. STRONGLY disagree. It is harder to make a consumption tax that can be as progressive as an income tax. The notion is that if you tax incomes, you will drive income offshore. Well, the same thing happens to consumption, you drive that consumption offshore, it is a lot easier to capture income than consumption. The medicare and social security tax is what makes our social security and medicare program entitlements and not welfare. I think we should actually INCREASE payroll taxes, lift the social security cap and increase the medicare contribution to whatever we need to fund a universal health care system (preferably a single payer system).
Tax carbon emissions. Agree. But we also have to tax the carbon emissions of imports. So if China is emitting a lot of net carbon, we tax China for that carbon by imposing a tax on Chinese imports.
Legalize marijuana. Agree. I like pot and I would like to buy it from the 7-11 instead of my paralegal.
The financial markets would screech to a halt. A tax of $0.001 for every dollar would eliminate a lot of the liquidity in the market especially currency trade and bond trading.
I was thinking the exact opposite. I thought it was tilted to the right.
first choice) Abolish the income tax and go back to running the federal government with indirect taxes of 1-2% and if needed for something in particular, a direct tax (approved by voters) for extra spending.
second choice) 10% with no deductions, no exemptions, no exceptions
third choice) first 15-20K (poverty level) untaxed for all (if Joe doesn’t have to pay on his 20K, then neither does Bob), then 10% with no deductions, no exemptions, no exceptions
The only fair tax system is one that taxes all citizens at the same rate. For every dollar of income, whatever the source, whatever the amount, pay 10%. Done!
The idea of a tiered tax rate practically begs for exemptions and exceptions and favors and corruption. 10% with none of that crap is fair, unambiguous, and transparent.
All these Federal programs that give money back to the states can be eliminated. There is absolutely no reason for the citizens to send money to Washington, to have strings attatched to it and then returned back to the states telling them how they must spend it. Just eliminate all those taxes and let the states tax their own citizens for the things they want or need.
Huh? How do you propose we pay for stuff with a 1 or 2% sales tax? Even the FAIR tax (effectively a national sales tax) is over 20%.
Once again too low and regressive.
I am starting to get the impression that you think that the problem with the tax code is its progressivity.
Patently untrue. Ever hear of marginal utility?
Once again patently untrue. Progressivity has little to do with it.
States like Mississippi wouldn’t be able to afford a medicaid program or keep their roads covered with asphalt without the subsidy from states like California.
It is not my responsibility to pave the roads or pay for the health care of Mississippians. And California is on the brink of declaring bankruptcy, so great example btw. It is almost like the connection with reality is severed.
Yeah but the NATION has an interest in having the nations roads paved so congress is going to do it and make everyone pay for it.
What does California’s state fiscal situation have to do with the fact that California contribues a lot more in federal revenue than they receive in federal funds? Do you read for content or do you simply say “California is almost bankrupt, so everything you say makes no sense” whenever someone mentions them?
Like I said before, NONE of your math works. We can’t pay for government with a 1 or 2% sales tax, heck we can’t do it with a 20% sales tax. So I’m wondering what reality YOU live in.
YOU said a sales tax. I said indirect taxes, imports, exports, etc.
Like I said before, we paid for government with these for a century or more. So the fact that it has happened fairly negates “we can’t do it with a 20% sales tax”.
Well, no of course I couldn’t make ends meet with a 1 million dollar income if I’m spending 2 million a year. That doesn’t indicate that I have an income problem, though.
So, my very 1st question was: What stuff are you trying to pay for? The government was run for quite some time without all these taxes.
2nd was: What is regressive about if I earn 40,000 and you earn 2 x 40,000. On my 40, I pay 4 and on each of your 40s you pay 4, meaning 8.
You didn’t address the whole regressive error you made.
Nor did you respond to: I’m sure everyone agrees that the effort to avoid a tax is directly proportional to the rate that the tax is…so, progressivity has everything to do with it.
A progressive tax structure is unfair, plain and simple. They knew that over 200 years ago…America’s founders rejected the income tax entirely, but when they spoke of taxes they recognized the need for uniformity and equal protection to all citizens. “[A]ll duties, imposts and excises shall be uniform throughout the United States,” reads the U.S. Constitution. And 80 years later, in the same spirit, the Fourteenth Amendment promised “equal protection of the laws” to all citizens.
from thefreemanonline.org
Landlord implies they own something and they are permitting us to do something. It seems you have the boss/servant relationship bassackwards.
I’m sure you meant something like we are like the homeowners and government is our servant to enact our will with what we allow and direct them to do.
Yeah, I’m sure that is what you meant.
Yes, the problem is that when the wealthy pay the vast majority of the tax burden, any fair cut to taxes will benefit them. Politically, the Dems will make any idea like that toxic. We really do need more people paying something, even if they pay it with their time and labor. We need to then etch into stone the relationship between what different economic groups pay. When we do that and need more money, a tiny increase in the rate—which would apply to everyone—would generate the most revenue. I talked about this on Page 1.
Please find below my suggestion for fixing America 's economy. Instead of giving billions of dollars to companies that will squander the money on lavish parties and unearned bonuses, use the following plan.
You can call it the “Patriotic Retirement Plan”:
There are about 40 million people over 50 in the work force. Pay them $1 or $2 million apiece severance for early retirement with the following stipulations:
They MUST retire. Forty million job openings - Unemployment fixed.
They MUST buy a new AMERICAN Car. Forty million cars ordered - Auto Industry fixed.
They MUST either buy a house or pay off their mortgage - Housing Crisis fixed.
It can’t get any easier than that!!
P.S. If more money is needed, have all members in Congress pay their taxes…
Mr. President, while you’re at it, make Congress retire on Social Security and Medicare. I’ll bet both programs would be fixed pronto!
What’s with “etching into stone” rates (or ratios of rates)? What do conservatives have against reflectiveness and adaptability?
I remember the right wing talking about tax reform, the “hope and change” of its day. Should they have left well enough alone? Maybe so; they just grew deficits faster.
Maybe the right wing just don’t do well with government budgets.
ETA: BillJ, I like the general idea here. Could work? Starting point, anyway.
I’m not talking about etching in any particular rate, but rather the relationship in rates between the highest bracket and the lowest. As I’ve stated, my preference is not for progressive rates at all, but rather a flat tax or fair tax. But if it’s going to be progressive, let’s just lock it in so if we do really need to raise rates, everyone feels it. This, of course, is a way to make sure that raising taxes is done only when its really necessary.
Where does this $40 - 80 trillion dollars come from?
Massive labor and skills shortage ensues.
Social Security goes into crisis mode as contributions fall massively owing to taking millions of people in their peak-earning years out of paying payroll taxes.
Governement and state revenue from personal taxation plummets.
