Why is there no Libertarian Party outside the United States?

[DrDeth]

Sure, Fica Futa & Midicare are “flat taxes”- but thet are not included in any flat tax program I have seen, thus you’d pay the flat (income) tax- AND, you’d pay the payroll taxes- and State incometax, excise tax, estate tax, property tax, sales tax, utility tax, parcel tax, ad nauseam . So, looking at one’s paycheck, seeing how much thay take out, then saying to your self- “boy, if all that was only 10% becuas eof that flat tax thing, that’d be great.” is delusional.

I am not arguing in favor of the current plan- it is the worst I have seen- except for eveything else, which is worse. There are indeed, scads od deuctions, credits, exclusions & other such fro-fra. But one can have a graduated, progressive tax rate and still get rid of nearly all those deductions. Knwing your tax rate is “17% less personal deduction” is no simpler than comparing your Taxable Income to a line on a schedule. So, changing the rate from progressive/graduated to flat does not make anything simpler.

And as for all those deductions and such- I am with you on that- but remember, most taxpayers file a short form or EZ from, so all that doesn’t concern them- all they need to do is subract a personal deduction/exemption (which every flat tax plan I have seen retains a form of) and that’s it. Since the Armey plan does allow for deductions for business expenses, there would still be a huge Code, as most of the code is concerned with business deductions.

“Since when is 17% ‘total crap’ when 20% is correct”? When the 17% is a tax only on a % of the total taxable income- ie wages only. The 20% assumed that what is taxable now is still taxable. Huge difference.

You do undertand that if you don’t tax “unearned income” the very rich won’t be taxed at all? Those millionaire CEO’s won’t owe a nickle, whereas you & I will owe more? How is that fair- some CEO earning 23 million a year pays 0, and I pay $10000? (and before you say it, a CEO would very quickly arrange that his renumeration comes in the from of unearned income, not wages- in fact, with stock options, that is generally the case now).

As to your last line- a flat tax can work, and if someone wants to suggest & debate one that is revenue neutral, I’ll argue the “fairness” of it. So, yes, you can beleive in a flat tax and not be stupid, ar “clueless”. But most dudes only know some soundbites about it, and think everything will go along as it was before, except that HE will pay a third of his current taxes- and a “flat tax” can magically make this happen. THAT is what I said was “clueless”, and it is.

[SlowMindThinking]

*Originally posted by DrDeth *
I am not arguing in favor of the current plan- it is the worst I have seen- except for eveything else, which is worse. There are indeed, scads od deuctions, credits, exclusions & other such fro-fra. But one can have a graduated, progressive tax rate and still get rid of nearly all those deductions. Knwing your tax rate is “17% less personal deduction” is no simpler than comparing your Taxable Income to a line on a schedule. So, changing the rate from progressive/graduated to flat does not make anything simpler.

Hmm, sure it is. Not much, but sure it is. Especially when doing a calculation in midyear. Let’s see, I make $xK - $yK deduction all x 0.17. As opposed to remember all of the gradations and their percentages and the deduction. Of course, with the current system it is impossible to judge, because you don’t know what bizarre things you qualify for ahead of time.

Since the Armey plan does allow for deductions for business expenses, there would still be a huge Code, as most of the code is concerned with business deductions.

One reason I think all forms of income tax are problematical.

“Since when is 17% ‘total crap’ when 20% is correct”? When the 17% is a tax only on a % of the total taxable income- ie wages only. The 20% assumed that what is taxable now is still taxable. Huge difference.

Got a cite that the 20% figure is without a deduction? I don’t know that anyone has proposed any such thing.

You do undertand that if you don’t tax “unearned income” the very rich won’t be taxed at all? Those millionaire CEO’s won’t owe a nickle, whereas you & I will owe more? How is that fair- some CEO earning 23 million a year pays 0, and I pay $10000? (and before you say it, a CEO would very quickly arrange that his renumeration comes in the from of unearned income, not wages- in fact, with stock options, that is generally the case now).

Again, the tax code shouldn’t be about being fair. Is it fair that blind people get an extra deduction, and left handed, one legged diabetics don’t? The tax code is about financing the government in a way that maximially benefits the most people, and weirdly that is not the same thing. News flash by the way, the problem with stock options as an income source, is that you can end up with a seriously negative income. Very few CEO’s would have made any money in the last four years if that was the case. And if you give them stock instead of options, that is earned income. The guys with no earned income are the guys who make enough off of their investments to not need a job. Is it fair that they pay no tax? No. Is it good for the rest of us? I dunno, could be. Is it fair that I get a huge deduction because I inherited enough money to buy a house and get that huge deduction, while some guy with the same income can get together the 10% necessary to pay the same house? No? Is it good for the rest of you? Probably not.

[John_Mace]

*Originally posted by DrDeth *
But one can have a graduated, progressive tax rate and still get rid of nearly all those deductions. Knwing your tax rate is “17% less personal deduction” is no simpler than comparing your Taxable Income to a line on a schedule. So, changing the rate from progressive/graduated to flat does not make anything simpler.

Are you aware that Army’s so-called flat tax is actually progressive? The personal exemption builds in a certain progressivitiy. In fact, if you wanted to soak the rich, you could tweak his plan thusly:

• personal deduction of first $50k
• 25% tax on everything earned above that.

I simply don’t understand the attachement some folks have to multiple tax brackets. There is nothing inherently “fair” about multiple barackets. And, as I just showed, you can shift the burden more to “the rich” with the so-called flat tax if that is your goal.

[DrDeth]

But Slow- YOU don’t have to do a “calculation in mid year”. Your employer does it for you. But even so, Slow, you stil have the “personal deduction” to figure in. That 20% figure is what the Treasury, the OPM came up with, there is a published booklet around somewhere, I’ll try and find a link.

John, yes, you have a point. To some extent, Armeys plan is somehat progressive, and one could make a “flat tax” that was heavily progressive if one allowed a large personal deduction. I don’t undertand the attachment to a single tax bracket.

[John_Mace]

*Originally posted by DrDeth *
John, yes, you have a point. To some extent, Armeys plan is somehat progressive, and one could make a “flat tax” that was heavily progressive if one allowed a large personal deduction. I don’t undertand the attachment to a single tax bracket.

I’m glad you see the point. Now I don’t have to call you clueless.

I’ll explain my attachment to a single bracket. It’s simple fairness. If a code with 3 brackets is more “fair” than a code with 1 bracket, then why not have 4 brackets? Wouldn’t that be more “fair”? Why stop at 4, though-- why not 10? If it’s not one bracket, then any number you pick is inherenetly arbitrary. So, how can something that is ainherently arbitrary be said to be “fair”.

It seems that the mulitple bracket folks feel the need to not only sock it to the rich, but to sock it them extra hard.

[OliverH]

*Originally posted by John Mace *
**So, in summary, are you saying that M.F. can reasonably be called clueless wrt tax policy? Yes, his “Nobel” prize is given for specific achievements, but he is a well respected economist with a long academic career and many, many accomplishments. **

Which does not necessarily make him right on all cases. As pointed out, the efforts to try out some of his theses ended in economic disasters and while many elements survive to this day, the full-scale implementation has largely been dropped. There’s a difference between being respected and having suggested many new perspectives and being infallible.

**
And advocating a flat tax is not inherently inconsistent with the idea that “property imposes duties”. **

It is, however, difficult to reconcile with the limitation that the use of property should serve the public weal.

**
Your point on the Nobel prize is noted, but I would say it is much more than “coloquially” called a Nobel prize in Economics. Only in the most rarefied of academic circles will you hear it not referred to as such. But that’s neither here nor there. If you prefer, I’ll retract my statement and say that he has been awarded the highest level of recognition that an economist can achieve, worldwide. Doesn’t change the substance of the argument. **

The fact that he has achieved such recognition does not necessarily have any bearing on a given case. Especially not when the recognition is so dated. My point was that economics, just like social sciences, is linked in its ‘findings’ and guides of conduct to a set of socio-political goals the author considers worthy of pursuit, and as such is linked to the socio-political motivations of the author and his peers much more strongly than, say, in the natural sciences. Which is precisely why Friedman’s quote that his equation has “the same foundation-stone role in monetary theory that Einstein’s E=MC2 does in physics.” shows a gross misunderstanding of his field vs. others. Friedman has been wrong, disastrously so, on many issues.

My last point was that we are not talking about the US in isolation here. And we’re not talking about the 70s here. The OP was about libertarian position outside the US, and as such, before the findings of any economist, regardless how well respected he was at a given time, are applied to a situation, we need to look first at whether they are, at all, applicable in a meaningful way to the place and time we are talking about. If society in a given area has rejected the sociopolitical basis of a model, or has declared its side-effects to be too high a cost to warrant pursuit, then applying the model on that area is trying to fit a square frame on a round picture.

[OliverH]

*Originally posted by John Mace *
**I’m glad you see the point. Now I don’t have to call you clueless.

I’ll explain my attachment to a single bracket. It’s simple fairness. If a code with 3 brackets is more “fair” than a code with 1 bracket, then why not have 4 brackets? Wouldn’t that be more “fair”? Why stop at 4, though-- why not 10? If it’s not one bracket, then any number you pick is inherenetly arbitrary. So, how can something that is ainherently arbitrary be said to be “fair”.

It seems that the mulitple bracket folks feel the need to not only sock it to the rich, but to sock it them extra hard. **

No, it is merely a factor of a graduated perspective vs. a black-and-white perspective, and a cost-benefit analysis.

Inherent arbitrariness does not make a given model unfair. It can make specific comparisons within the model unfair, but that is the case in ANY model. Why not 10 as opposed to 3? Because fairness is meaningless if the cost of increased fairness eats up all benefits. The cutoff line is always arbitrary, that doesn’t make it either unfair or invalid in and of itself.