Get rid of the Income tax?

That's what I said. They lower costs to gain market share. Altruism doesn't enter into it. Not dropping costs when competitors do means losing market share and getting muscled out as you put it.

I find your antipathy of corporations odd. The people running corporations are just like everyone else. They are no more or less good or evil.

We all have our quirks or as you assert delusions. Personally, I trust corporations that do not have a monopoly on the use of force more than governments that do have such a monopoly. A bigger threat don't ya know.

Annachie wrote:

PeterZ wrote:
I believe there is a hidden assumption here. Corporations that don't pass their saving to customers will operate under a disadvantage to those businesses that do pass their savings along.

You're delusional. You must be. If recent history shows us anything it's the opposite.

Companies, big companies especially, never pass on all their saving but do pass on all their costs and then some.
For easy evidence, track interest rates to the cash rate, or fuel prices to the cost of crude.
(I think you guys call it the bank rate or discount rate)

When they do drop prices without dropping costs, it's to try and muscle the smaller guy out.

Guys, from what I'm seeing, there seems to be an assumption that is not quite right.

That assumption seems to be that governments and corporations are functionally similar. As in, both get their funding from the public (us!), and will use as much of it as they can.
That correct, up to a point. But there are three fairly major differences that affect the outcome.

1. A corporation has to sell a product or service in order to raise money. A government simply taxes.

2. A corporation is always subject to competition. A government is a monopoly. (On the rare occasions where there are multiple governments, civil war tends to be the result. Call it monopoly by force.)

3. A Government will provide services and take your money whether you want or need it, or not.

Why is that important? Because without funding, either entity's ability to do anything is limited. A modern government will never run out of money, they have all sorts of options for raising it. But a corporation has to sell its products if it's going to survive. It will naturally try to charge as high a rate for it's products as it can get away with, but it cannot force it's customers to buy what it's selling.

When two companies compete for the same customers, they can't force their customer's to buy only from them. They have to attract them, offer them a better deal. So it is in the companies self interest, no matter how sociopathic it is, to provide the best service they can for the cheapest cost they can. Otherwise, the customer will go elsewhere.

A government, on the other hand, can force their customers to buy what their selling. If you try to opt out of paying for services you neither want nor require, they'll throw you in prison for tax evasion.

Bear in mind, and I know some of you are already thinking it, that there is a cheat in this system. That's when the company gets the government to pass legislation that favors either itself or it's industry as a whole.
Best example I can think of is Superannuation here in Australia. It is illegal to NOT pay a minimum of I think 9% of your wage into a superannuation fund. You cannot remove it until your 60, if you were born after 1964. You can change from fund to fund, but you cannot opt out.
This may be why our fund management fee's are among the highest in the world. Also, every cent of capital gain that isn't soaked up by fees is taxed.

Now while I happen to agree that saving a tenth of my income is a good idea, I'd much rather be able to remove it and purchase, say, a home for my family, or a business to provide for them, instead of having it sit there out of reach.
Sorry for getting off topic. Back to you folks!

PeterZ wrote:I find your antipathy of corporations odd. The people running corporations are just like everyone else. They are no more or less good or evil.

The people running them may be as decent or depraved as any random person on the streets. But as a collective entity, corporations are not defined by the actions of any single individual.

Meaning, no matter how well-meaning any single person in a corp may be, the total will still exhibit behaviour that in a single person would be called sociopathic.

We all have our quirks or as you assert delusions. Personally, I trust corporations that do not have a monopoly on the use of force more than governments that do have such a monopoly. A bigger threat don't ya know.

And we've seen just how well a corporation with a limited franchise in the application of force does when compared to a proper government. Private Military Contractors have a poor reputation among the people they act against for a reason.

The same can be said of "proper" governments. The US IRS targeting an administration's enemies come to mind. The Nixon, Clinton and Obama administrations have done it. At least when corporations do it, individuals can appeal to government or sue. Not an option if government crosses the line.

The E wrote:

PeterZ wrote:I find your antipathy of corporations odd. The people running corporations are just like everyone else. They are no more or less good or evil.

The people running them may be as decent or depraved as any random person on the streets. But as a collective entity, corporations are not defined by the actions of any single individual.

Meaning, no matter how well-meaning any single person in a corp may be, the total will still exhibit behaviour that in a single person would be called sociopathic.

We all have our quirks or as you assert delusions. Personally, I trust corporations that do not have a monopoly on the use of force more than governments that do have such a monopoly. A bigger threat don't ya know.

And we've seen just how well a corporation with a limited franchise in the application of force does when compared to a proper government. Private Military Contractors have a poor reputation among the people they act against for a reason.

A very well stated case for the US federal system. The different States provide different statutory environments that compete for residents. The Federal Government is supposed to have limited functions and would rely on the States to carry out such functions as it is not empowered to perform. The Constitution defines what each level of government can and can't do.

That was how the system was originally designed any way. We are well off track at present.

Invictus wrote:Guys, from what I'm seeing, there seems to be an assumption that is not quite right.

That assumption seems to be that governments and corporations are functionally similar. As in, both get their funding from the public (us!), and will use as much of it as they can.
That correct, up to a point. But there are three fairly major differences that affect the outcome.

1. A corporation has to sell a product or service in order to raise money. A government simply taxes.

2. A corporation is always subject to competition. A government is a monopoly. (On the rare occasions where there are multiple governments, civil war tends to be the result. Call it monopoly by force.)

3. A Government will provide services and take your money whether you want or need it, or not.

Why is that important? Because without funding, either entity's ability to do anything is limited. A modern government will never run out of money, they have all sorts of options for raising it. But a corporation has to sell its products if it's going to survive. It will naturally try to charge as high a rate for it's products as it can get away with, but it cannot force it's customers to buy what it's selling.

When two companies compete for the same customers, they can't force their customer's to buy only from them. They have to attract them, offer them a better deal. So it is in the companies self interest, no matter how sociopathic it is, to provide the best service they can for the cheapest cost they can. Otherwise, the customer will go elsewhere.

A government, on the other hand, can force their customers to buy what their selling. If you try to opt out of paying for services you neither want nor require, they'll throw you in prison for tax evasion.

Bear in mind, and I know some of you are already thinking it, that there is a cheat in this system. That's when the company gets the government to pass legislation that favors either itself or it's industry as a whole.
Best example I can think of is Superannuation here in Australia. It is illegal to NOT pay a minimum of I think 9% of your wage into a superannuation fund. You cannot remove it until your 60, if you were born after 1964. You can change from fund to fund, but you cannot opt out.
This may be why our fund management fee's are among the highest in the world. Also, every cent of capital gain that isn't soaked up by fees is taxed.

Now while I happen to agree that saving a tenth of my income is a good idea, I'd much rather be able to remove it and purchase, say, a home for my family, or a business to provide for them, instead of having it sit there out of reach.
Sorry for getting off topic. Back to you folks!

PeterZ wrote:

Zakharra wrote:snip

One thing I do think though is that they should pay taxes, but it should be a fair tax because if that company isn't profitable it will either go out of business or leave; and no company should be looked at as a cash cow to be milked.

I see no problem with seeing companies as cash cows. The idea is to optimize the tax revenue from those cash cows. Businesses are better milk producers than meat animals. Treating businesses as a producer of milk is better than treating it as a steer to be slaughtered.

To that end a sales tax (set properly) increases production and income tax tends to suppress production. Tax revenues can easily be higher under a sales tax regime and tax payers would pay those higher taxes more willingly. If that is true and I believe it is, why keep the income tax when revenue could be increased under a sales tax? Does the philosophical desire to tax income offset the practical benefit of increased tax revenues? I would say, no.

Why keep the income tax under an increased sales tax? Simple: the government can never do with less revenue and just think of all the good things money raise from keeping the income taxes could be used for. Increased welfare benefits to the Dolists, more bribe money to campaign contributors, more funding to get the people dependent on the government, and more. The government and those that want as much of our money in governments hands will always find ethical and philosophical justification to do it. 'It's for the women and children/innocent/unfortunate illegal aliens... can't call them that.. undocumented immigrants and future Democrat voters' and what not. You're seriously underestimating the reaches politicians will go to to justify stealing money and power and using it to bribe you with.

That's why we repeal the income tax and IRS altogether. Leave the States as the tax collecting agents. If the feds set the sales tax rates too high they reduce their income. The incentives for the feds are in line with increased economic activity under a sales tax. This again assumes no income tax or IRS.

Zakharra wrote:

PeterZ wrote:
I see no problem with seeing companies as cash cows. The idea is to optimize the tax revenue from those cash cows. Businesses are better milk producers than meat animals. Treating businesses as a producer of milk is better than treating it as a steer to be slaughtered.

To that end a sales tax (set properly) increases production and income tax tends to suppress production. Tax revenues can easily be higher under a sales tax regime and tax payers would pay those higher taxes more willingly. If that is true and I believe it is, why keep the income tax when revenue could be increased under a sales tax? Does the philosophical desire to tax income offset the practical benefit of increased tax revenues? I would say, no.

Why keep the income tax under an increased sales tax? Simple: the government can never do with less revenue and just think of all the good things money raise from keeping the income taxes could be used for. Increased welfare benefits to the Dolists, more bribe money to campaign contributors, more funding to get the people dependent on the government, and more. The government and those that want as much of our money in governments hands will always find ethical and philosophical justification to do it. 'It's for the women and children/innocent/unfortunate illegal aliens... can't call them that.. undocumented immigrants and future Democrat voters' and what not. You're seriously underestimating the reaches politicians will go to to justify stealing money and power and using it to bribe you with.

PeterZ wrote:That's why we repeal the income tax and IRS altogether. Leave the States as the tax collecting agents. If the feds set the sales tax rates too high they reduce their income. The incentives for the feds are in line with increased economic activity under a sales tax. This again assumes no income tax or IRS.

The hard part of that is convincing the Congress and the President that it would work. Too many politicians would see it as reducing government revenue and they would not see it as generating that much extra revenue. It would mean, to them, that the government would be much more vulnerable to an economic downturn and that means less revenue. But if they were able to keep the income tax, they can make even more money. More is better to politicians, right? Remember that to these people, a reduction in the rate of budget growth is a cut even if the budget does grow, just less than they want. The Democrat party is famous for using that logic. The government can never do with less revenue. It must always have more; revenue neutral at the least. A tax cut somewhere must be balanced by a tax increase somewhere else. Replacing the income tax and reducing the IRS (you would still need the IRS as there are other forms of taxes out there and there does need to be accounting on who pays what and who isn't) with the sales tax would be seen as removing revenue, not growing it. Not to mention you would have damned near all of the Democrats, liberals and minority activists saying that 'the poor, women and children would be hardest hit' among things. There would be all sorts of studies by professional (take that how you will) proclaiming the economic damage that a national sales tax would do to the people and government, especially the welfare programs.

I agree that the income tax won't go away for all the reasons you cite. My point was that the income tax is less effective at generating revenue than a sales tax.

Zakharra wrote:

PeterZ wrote:That's why we repeal the income tax and IRS altogether. Leave the States as the tax collecting agents. If the feds set the sales tax rates too high they reduce their income. The incentives for the feds are in line with increased economic activity under a sales tax. This again assumes no income tax or IRS.

The hard part of that is convincing the Congress and the President that it would work. Too many politicians would see it as reducing government revenue and they would not see it as generating that much extra revenue. It would mean, to them, that the government would be much more vulnerable to an economic downturn and that means less revenue. But if they were able to keep the income tax, they can make even more money. More is better to politicians, right? Remember that to these people, a reduction in the rate of budget growth is a cut even if the budget does grow, just less than they want. The Democrat party is famous for using that logic. The government can never do with less revenue. It must always have more; revenue neutral at the least. A tax cut somewhere must be balanced by a tax increase somewhere else. Replacing the income tax and reducing the IRS (you would still need the IRS as there are other forms of taxes out there and there does need to be accounting on who pays what and who isn't) with the sales tax would be seen as removing revenue, not growing it. Not to mention you would have damned near all of the Democrats, liberals and minority activists saying that 'the poor, women and children would be hardest hit' among things. There would be all sorts of studies by professional (take that how you will) proclaiming the economic damage that a national sales tax would do to the people and government, especially the welfare programs.

Peter, are you an econimic theorist/teacher?