What type of tax plan do you support/want

[DemoCoder]

Flat tax will never happen because it would prevent the government from influencing behavior via the tax code.

If the government wants to, say, get people to upgrade their cars to more fuel efficient ones, they offer a tax credit and raise taxes on clunkers. If they want people to buy homes, they offer mortgage interest deduction. etc

The tax code is used as a carrot and a stick for social engineering. No way they will give that up. I predict shortly after a Flat Tax is implemented, "exceptions" will creep into it every session of congress.


As for sales tax, it's just another tool of manipulation. Want more saving and less consuming? Increase sales tax, raise interest, lower cap gain tax, etc.

Americans consume 40% more on average than Europeans because we lack a VAT, and the cost of capital is so low we can borrow into oblivion.

 

[cthellis42]

Congrats. You win this month's award for the biggest opinionated statement trying to pass for fact.

Hehe. Well, this is in and of itself another arguement as to whether it matters or how much, his spending figures pretty much speak for themselves even among conservatives.

With emphasis on comments from the conservative think-tank Heratige Foundation:

"The case that Bush is a big spender is irrefutable. Federal spending on Bush's watch has sky-rocketed. According to the Heritage Foundation, the years 2000 to 2003 marked the biggest spending spree in the history of the United States, except for WWII. Total spending has gone up nearly 14 percent in Bush's first three years, and discretionary spending has gone up nearly 20 percent. Bush spent a pile not only on guns, but on butter. Non-defense spending has gone up by almost the same amount as defense spending, and defense spending constitutes barely a fifth of the total increase in spending from 2000 to 2003...Bush has an annoying habit of opposing proposals on the grounds they're bad policy or too expensive only to end up supporting them when the pressure gets too intense...He hasn't vetoed any spending bills and he hasn't proposed any huge spending cuts the way Ronald Reagan or Newt Gingrich would have."

Passing that alone as fact isn't hard at all, you see. It's just that futher commentary will go on in the usual state of bickering.

The "draining our coffers" part is also wholly and enormously true, and most people would think that enormous tax cuts + enormous spending increases != common sense, I figure.

And for the end of my statement, what do YOU believe is better for short term economic boosts? Putting more money in the hands of those that live by their wallets and will spend it immediately, or putting a disproportionate percentage in the hands of those who are more likely to sit on it? Is it going to restore investor confidence? No, only time does that. Will it brace it up a bit? Sure, maybe... But we already learned the hard way that the market itself is finicky and can take the entire country down with it. Faster economic boosts come from faster movement of money, and that comes from the people who spend theirs constantly. (Let the SEC try to restore investor confidence first, then feed them more incentive perhaps. They seem to be bungling that job rather well, too.)

And now, let the usual bickering begin again! <claps>

 

[pax]

I think percentages are useless here... what is the gov share of gdp over the last 30-40 years? Is that going up or staying stable? Arguments over 'out of control' gov spending in health care was THE lie of the 1990's in Canada. Fact is in terms of gdp it barely changed hovering at around 12% and went down for most of the 1990's under severe cutbacks to the point it went under gdp rates in the late 1940's (11%)...

 

[cthellis42]

You'd think that the Heritage Foundation of all places, could they come up with more mitigating factors, would surely have mentioned them. Heh... I don't have those figured at my fingertips, but one might be able to abuse Google and find out.

(Not hard at all. Here's a spreadsheet of 29-02.) (Or check the NIPA interactive chart, which is easier to sort as you want.)

Can't make easy comparisons, but GDP went up 3.8% in 2000, only 0.3% in 2001, and 2.4% in "real" dollars in 2002. The WWII years had some amazing growth in the beginning--8 to 18%--and some slowdown towards the end. During most other years we've also enjoyed more growth with less spending increases.

So it seems this, too, is easy enough to put in perspective.

 

[covermye]

And for the end of my statement, what do YOU believe is better for short term economic boosts? Putting more money in the hands of those that live by their wallets and will spend it immediately, or putting a disproportionate percentage in the hands of those who are more likely to sit on it?

The obvious (and correct) answer is to put the money in the hands of those who will most likely spend it. Demographic wise, that means lower income people, right? Well guess what? This group pays little (and in a lot of cases, none at all) federal tax to start with. We've already put just about as much of their money into their hands as possible. The only thing left to do is hand out things like "child tax credits" to those that don't even pay enough federal tax to pay for the credit. Now we're talking re-distribution of capital to the extent that "Socialism" better describes the action rather than "Capitalism". You may like that idea. I don't.

Besides, I'm upper-middle income (to be descirbed accurately). I save a "responsible" amount for retirement. Guess what I did with my child tax credit (and my tax "refund" from last year)? You guessed it. I spent the living hell out of it on home improvement projects. A misconception is that most of the recent tax cut was "saved" rather than "spent" by upper-income earners because they "just don't need to spend it". Well guess what? Sometimes we do, and during the housing boom of the past couple of years, many more upper income members SPENT their tax rebates than you would be led to believe.

I speak this from experience and discussions with many friends in the same boat as mine... people that are usually frugal savers.

 

[epicstruggle]

ill state it again, if you make more than 100k you must have gotten it without working for it. Because if you work your poor.

later,

 

[MfA]

Personally I dont have that much trouble with a little wealth distribution ... but I understand the libertarian standpoint.

If I was forced to live in a libertarian society I would favour taxing ownership and use of natural resources. The tax being a straightforward percentage of the unimproved value of the resource in the case of something like land, in the case of pollution and exhaustible resources taxation would be trickier though.

Even under a libertarian mindset this to me seems the only fair solution, these things are not the fruits of anyones labour ... that I was born later than the peope who came before me should grant them no claim. From a pragmatic point of view some natural resources need to be owned, but then it is only just if the owners pay for that privilege.

Now wether this money should only be used to run government, or also to compensate those people who want to work but for which the economy has no place and who have been even denied the basic ability to labour the land ... well that is a tough one

 

[cthellis42]

And for the end of my statement, what do YOU believe is better for short term economic boosts? Putting more money in the hands of those that live by their wallets and will spend it immediately, or putting a disproportionate percentage in the hands of those who are more likely to sit on it?

The obvious (and correct) answer is to put the money in the hands of those who will most likely spend it. Demographic wise, that means lower income people, right? Well guess what? This group pays little (and in a lot of cases, none at all) federal tax to start with.

Lower and middle, and certainly you don't think the middle are untouched. Besides, what does a lower federal income tax have anything to do with their relationship to the whole economy? The point is to put money into the hands of people who spend it, and those are the ones that do, as it goes right INTO the economy. If you give them more, they spend more. Is the government trying to spur the economy by collecting more federal income tax? Er... no. They're trying to spur the economy by putting more money into it.

And overall you wouldn't see as much complaining if the tax cuts even provided an EQUAL distribution among taxpayers, but what we always get are disproportionate leanings towards the upper brackets who are the most likely to sit on it. Put more emphasis on the lower tiers (and that isn't even done at huge costs since overall they pay less of the taxes and own less of the wealth) and you'll get a bigger short term economic boost because that will immediately get SPENT.

WNow we're talking re-distribution of capital to the extent that "Socialism" better describes the action rather than "Capitalism". You may like that idea. I don't.

But tax cuts that go diproportionately to the higher brackets IS redistribution of wealth--just upwards. Why not at the very least start at a 100% even cut distribution and shift emphasis where one things will do the most good for a desired outcome. Does weighing the uppermost 1-10% bring the overall economy the short term boosts it needs?

Besides, I'm upper-middle income (to be descirbed accurately). I save a "responsible" amount for retirement. Guess what I did with my child tax credit (and my tax "refund" from last year)? You guessed it. I spent the living hell out of it on home improvement projects. A misconception is that most of the recent tax cut was "saved" rather than "spent" by upper-income earners because they "just don't need to spend it". Well guess what? Sometimes we do, and during the housing boom of the past couple of years, many more upper income members SPENT their tax rebates than you would be led to believe.

You're right. The middle classes would ALSO be prime candidates for better refunding. The problem is they're not getting their due either. A stronger middle class seems to have good correlation to overall prosperity, rather than stretching the disparity of wealth further. So why look kindly on refund policies that give less to these people as well?

I speak this from experience and discussions with many friends in the same boat as mine... people that are usually frugal savers.

That's fine and understandable, but it's a misconception to think that the only people being complained about are those who qualify as "poor". The extreme poverty end doesn't pay income tax anyway, so isn't a factor in tax cuts (and the non-taxed level and welfare issues are whole other arguements altogether), so what we're talking about is of those who PAY income tax, who should the cuts favor?

Since "quick economic turnaround" is a phrase being bandied about and striven towards, where do YOU think the emphasis should go? IMHO, weighing the classes from upper-middle to the lowest brackets is the quickest way to get that money spent and moving in our economy. Being that the "trickle down" theory is such a crock, why support cuts that mirror those traits? There is no reason at all in my mind to go with an upper-weighted cut breakdown, and the split isn't close to EVEN either. They'll still have plenty (and be given plenty more) to invest when they feel it's right to anyway (which depends on a hojillion other factors), so at this point for what we WANT, the methods are not being applied.

Bear in mind, of course, that Bush was campaigning on taking the surplus and re-investing 1/2 in Social Security (and not touch its surplus), and 1/4 in his first big tax cut, which he said was all we could afford. All we could afford... and this was back when our economy HADN'T crashed. So how is the answer to "all we can afford" tax cut upon tax cut with high-end distribution? (Bear in mind we have to spend $400+ billion to fix the Alternative Minimum Tax problems, which was obviously known but not mentioned. I guess "stealth cuts" are good too.) And what's the answer next year? Why, more upper-weighted tax cuts, of course!

If you fear wealth-redistribution, then you'll be unhappy to know it's well underway already.

 

[DemoCoder]

But tax cuts that go diproportionately to the higher brackets IS redistribution of wealth--just upwards.

No it's not. Redistribution represents a transfer payment from one person to another. That's a tradgic confusion of whose money it is. If I make $100,000 a year and pay $30,000 in taxes, and the government cuts taxes so that I only pay $25,000 in taxes, there was NO redistribution of anyone else's income to me. Instead, I merely keep more of my original income.

A redistribution occurs when the government gives you someone else's money.

The only way a tax cut for a wealthy person could possibly be viewed as distribution of money from a poor person, is if the rich person is receiving government benefits that the poor person is paying for, and therefore the tax cut increases the amount of money the government distributes from the poor to the rich. But rich people consume less government services in general (private schools, travel, health insurance, etc), so it doesn't make sense.

Fact is, any tax cut will always disproportiately target the rich because the rich pay more. I paid I think $40k in taxes last year. Someone making $40k/yr paid alot less. If The government cut my taxes by 1% and the $40k/yr earner by 5%, I'd save $1000, he'd probably save far less, and leftists would be screaming about how I got $1000 and he got $100.


(and for the record, I make over $100k and I guarantee you I work harder than many 9-5 lower income people, at one point, 80+hr weeks)

 

[Lostman]

I like the idea of a flat tax rate. But with that, wipe out sales tax, gas tax and all the other taxes that hide in everything you do.

I'm bothered by how I'm hit with taxes for everything I do. Here's a general cycle:

1. Get paid. Loose close to 30% of pay to income tax for Federal AND state.

2. Buy food. Pay sales tax.

3. Try to invest some of my money so I can have more of it. Pay tax any money made there.

4. Buy gas. pay tax.

5. I smoke. So I pay extra taxes on that.

6. I pay my phone bill. I pay taxes on that. Same with my cable and other utilities.

7. I die. My estate gets taxed.

So they get me earning and spending. No matter what I buy, there's a tax for it. I don't get a say in where the money goes, but it goes. I say take a flat % from everybody. The rich will pay more, but they make more. The poor won't pay more because they're poor. Easy as that.

 

[Dr. Ffreeze]

DemoCoder,

(and for the record, I make over $100k and I guarantee you I work harder than many 9-5 lower income people, at one point, 80+hr weeks)

I make way under $100k. You work much harder than me, and make more scarifies than I do. I make as much as I do out of choice, I am not willing to make the same sacrifices. You make what you do out of choice. You have just as much right to keeping the money you make as I have a right to keep the money I make. Does anyone not agree with this?

Dr. Ffreeze

PS. I don't think you are evil or eat little babies because you make more than me DemoCoder. =P

 

[Joe DeFuria]

And overall you wouldn't see as much complaining if the tax cuts even provided an EQUAL distribution among taxpayers...

In fact, the lower tax payers got a disproportionally larger tax break than the higher tax payers. (Lower tax brackets get a larger percentage of their income tax reduced, than higher tax bracket payers.)

You're right, that's not equal...it's tipped in favor of the lower tax brackets. As a result of the tax packages, high income earners are paying an even HIGHER percentage of the total tax bill. You should be happy.

You seem to have an odd definition of "equal distribution." How do you define it?

 

[zidane1strife]

Well, I say whatever is done, they should increase taxes, particularly for those with the highest income.

Smart people like me, would just move to another country, while our fellow upper class citizens would just move down the ladder, allowing more at the bottom to rise up.

If I go to school, get a degree and then make $120,000 why should I give the government 36% on anything I earn above $100,000? I worked for it, I worked harder. Just make everyone pay the same percentage and let it be at that. In that way you don't find yourself working harder, and bringing home less of what you make.

Well, where I live I know people who paint a lot, and they can sell dozens of paintings a month at $100s on top of their salary, and they don't have to report it!!! They get $1000s in tax free income.

 

[Joe DeFuria]

Well, I say whatever is done, they should increase taxes, particularly for those with the highest income.

Smart people like me, would just move to another country, while our fellow upper class citizens would just move down the ladder, allowing more at the bottom to rise up.

I don't know what you're trying to say, or are you're being sarcastic?

Well, where I live I know people who paint a lot, and they can sell dozens of paintings a month at $100s on top of their salary, and they don't have to report it!!! They get $1000s in tax free income.

Well, where I live, (United States) it's illegal to not report the income.

 

[Legion]

i love a world where "free income" is only the biproduct of sinister plots.

 

[zidane1strife]

Well, where I live, (United States) it's illegal to not report the income.

Well, I'm sure all those bums/homeless people who ask for your money in the streets don't report, and some of'em have quite a nice income...