How do we fix the economy???

PeterZ wrote:Let's discuss income taxes. Are they the best means to tax a sovereign people?

One argument against an unrestricted income tax is that the tax is a tacit assertion that the government owns all of the citizens' income and allow them to keep some of that income.

Nonsense. It is an assertion that if you wish to be a member of a society you have a responsibility to contribute to its upkeep as you are able.

The officials who set the tax at 100% would not be re-elected but they could do it.

Of course they could do it. And then of course they wouldn't get re-elected. And then of course their replacement would lower it again.

That's how an elected government works.

And?

I would prefer some sort to sales tax as opposed to the income tax.

Which is exactly backwards.

The poorest people with the least income must generally spend the highest proportion of that income. And so you are now taxing the poor at the highest rate. While the right simply park their cash in ever increasing massive amounts in some savings or investment instrument and you are on a path to runaway wealth inequality.

Taxing income is not responsive to the ebb and flow of the economy. A sales tax incents government to encourage economic activity. The more activity, the more tax revenue. Effectively people voluntarily pay their taxes. Sales tax rates can vary from 0% to some higher number for luxury goods. Let low income people get tax exempt cards. They need to be applied for every year.

If you are going to exempt the poor from being taxed on purchases, not tax income, and rely mainly on the purchase of luxury goods for any higher rates of taxation you are going to rapidly bankrupt your hypothetical country. (Or simply see it slide into ever deteriorating states of disrepair and neglect)

PeterZ wrote:Let's discuss income taxes. Are they the best means to tax a sovereign people?

One argument against an unrestricted income tax is that the tax is a tacit assertion that the government owns all of the citizens' income and allow them to keep some of that income. The officials who set the tax at 100% would not be re-elected but they could do it. To some of us the theoretical assertion that government owns all income is disturbing.

I would prefer some sort to sales tax as opposed to the income tax. Taxing income is not responsive to the ebb and flow of the economy. A sales tax incents government to encourage economic activity. The more activity, the more tax revenue. Effectively people voluntarily pay their taxes. Sales tax rates can vary from 0% to some higher number for luxury goods. Let low income people get tax exempt cards. They need to be applied for every year.

Bottom line is that this method is more consistent with voluntary exchange and so morally superior to a system based on compulsion.

C. O. Thompson wrote:Yes Peter... Taxes are necessary and they should go where they do the most good for the most people.
When I made reference to my town budget, there were two issues that I would rather not have had to pay... But I understood my responsibility and voted yes on all items.

You do know that, when the federal income tax was instated 1) it was intended to be temporary and 2) only people who made more than 1,000,000 / year paid it.
Congress was also part time job then but once they got the taste for it... worse than a heroin addict They couldn't get enough.
I am not proposing that the top earners pay 90% only that they pay the same rate as Joe six pac who is working two jobs to make ends meet.

Many have argued that a sales tax would be more equitable... certainly, if you can afford a $4.5 million Lamborghini you would be able to laugh at the 10% sales tax but if you are buying a $5,000. used car to get to and from work or school, the 10% would sting a bit but not so much as if you pay 33% on income tax while some investment banker or corporate CEO making many millions a year hides behind the Bush tax breaks.

Gcomeau,

If you agree that government as the authority to take possession of income, then by definition the own it. Whether taking possession is a practical matter is secondary. The legal president has been established.

An effective sales tax depends on what and who are exempt. Look at Minnesota's exemption for their sales tax. The remainder of what may be taxed will generate governmental revenue depending on the tax rate. Set it to a level that optimizes revenue. Once set our voluntary activity generates the revenue to fund government.

PeterZ wrote:Gcomeau,

If you agree that government as the authority to take possession of income, then by definition the own it. Whether taking possession is a practical matter is secondary. The legal president has been established.

An effective sales tax depends on what and who are exempt. Look at Minnesota's exemption for their sales tax. The remainder of what may be taxed will generate governmental revenue depending on the tax rate. Set it to a level that optimizes revenue. Once set our voluntary activity generates the revenue to fund government.

And if you don't agree... they take anything you have with value and could put you in jail.
I truly would rather designate my preference where the tax dollars go. In one way, we would be voting our priorities and in the process, helping to shape the national budget and the programs We the people think should be important.

PeterZ wrote:Gcomeau,

If you agree that government as the authority to take possession of income, then by definition the own it. Whether taking possession is a practical matter is secondary. The legal president has been established.

Let us apply your logic to your own proposed taxation method then and see how that works.

An effective sales tax depends on what and who are exempt. Look at Minnesota's exemption for their sales tax. The remainder of what may be taxed will generate governmental revenue depending on the tax rate. Set it to a level that optimizes revenue. Once set our voluntary activity generates the revenue to fund government.

If you agree the government has the authority to take any percentage of the money you spend on something then the government owns *all* money you use to buy anything, whether they take possession of it all or not.


So, if you think they own any and all money you ever actually USE... how is that different for any practical purposes from you thinking they own any and all money you are ever *paid*? Unless of course your only goal in life is to collect dollar bills and coins and such as a hobby rather than using them as currency?



(Or, maybe it is just silly to think that saying that the government has the power to tax something means they own all of that something that exists in the nation and are just allowing you to have some for the moment. And on a conceptual level the distinction between taxing money exchanged for labor and money exchanged for products is purely semantic. The only difference is in practical effect. I mean, if you're some self employed salesman a sales tax basically IS an income tax...)

You can't. They decide how to spend your money. The most control we get in the process is through a sales tax. We spend, they tax. We don't spend, they don't tax.

I would actually disagree with forcing our government to spend on specific items. Our reps have better information to devise.....if they are honest.

C. O. Thompson wrote:

PeterZ wrote:Gcomeau,

If you agree that government as the authority to take possession of income, then by definition the own it. Whether taking possession is a practical matter is secondary. The legal president has been established.

An effective sales tax depends on what and who are exempt. Look at Minnesota's exemption for their sales tax. The remainder of what may be taxed will generate governmental revenue depending on the tax rate. Set it to a level that optimizes revenue. Once set our voluntary activity generates the revenue to fund government.

And if you don't agree... they take anything you have with value and could put you in jail.
I truly would rather designate my preference where the tax dollars go. In one way, we would be voting our priorities and in the process, helping to shape the national budget and the programs We the people think should be important.

Can government raise income taxes to 100%? Yes? Then they own our income. Do we have recourse for their attempting to take possession of our income? Yes, we do. Would I prefer that president did not exist? Yes, I would.

An unrestricted power to tax is tantamount to saying government CAN tax at 100%. Legally. The same applies to unrestricted sales taxes. The key difference is that sales taxes only apply when we spend. Spend less and government taxes less even when sales taxes are at 100%.

gcomeau wrote:

PeterZ wrote:Gcomeau,

If you agree that government as the authority to take possession of income, then by definition the own it. Whether taking possession is a practical matter is secondary. The legal president has been established.

Let us apply your logic to your own proposed taxation method then and see how that works.

An effective sales tax depends on what and who are exempt. Look at Minnesota's exemption for their sales tax. The remainder of what may be taxed will generate governmental revenue depending on the tax rate. Set it to a level that optimizes revenue. Once set our voluntary activity generates the revenue to fund government.

If you agree the government has the authority to take any percentage of the money you spend on something then the government owns *all* money you use to buy anything, whether they take possession of it all or not.


So, if you think they own any and all money you ever actually USE... how is that different for any practical purposes from you thinking they own any and all money you are ever *paid*? Unless of course your only goal in life is to collect dollar bills and coins and such as a hobby rather than using them as currency?



(Or, maybe it is just silly to think that saying that the government has the power to tax something means they own all of that something that exists in the nation and are just allowing you to have some for the moment. And on a conceptual level the distinction between taxing money exchanged for labor and money exchanged for products is purely semantic. The only difference is in practical effect. I mean, if you're some self employed salesman a sales tax basically IS an income tax...)

PeterZ wrote:Can government raise income taxes to 100%? Yes? Then they own our income.

No they do not. That's like saying "could I buy that car? Yes I could. Oh then I already own it!"

If they DID raise every single income tax bracket to 100% then in that ridiculous hypothetical fantasy world they would own all income. Here in reality however they own exact the percentage the tax rate is set at. No more and no less. So says the law, that thing that society uses to lay out the rules of ownership among other things.

If the government tried to raise all brackets to 100% of the income... they would last about three days!
The wealthy who object to any tax increase now would pull the strings and there would be revolution in the streets of DC, NYC and half a dozen other places (oh) and the bunkers intended to keep the government safe in the event of war... the contractors and work crews who built them and installed the posh furnishings know where they are.

Any way, it is ludicrous to think that 100% tax is necessary or beneficial.
One of the recent posts on this thread included a comment that 'they know what to spend our tax dollars on... if they are honest'
There in lies much of the problem. We all can find the evidence of senators who supported programs from development of aircraft to fighting the upgrading of coal fired power plants that benefited either their state or campaign contributors (who are not necessarily in their states but rather from a sector they have oversight of)...
Sadly, not all of our elected officials are concerned about We the people...
It has become all about gaining and maintaining power so, whatever the best way to fix the economy might be, it has to be approved by the very people and agencies that created the problem...
We cannot solve our problems with the same thinking we used when we created them. - Albert Einstein

gcomeau wrote:

PeterZ wrote:Can government raise income taxes to 100%? Yes? Then they own our income.

No they do not. That's like saying "could I buy that car? Yes I could. Oh then I already own it!"

If they DID raise every single income tax bracket to 100% then in that ridiculous hypothetical fantasy world they would own all income. Here in reality however they own exact the percentage the tax rate is set at. No more and no less. So says the law, that thing that society uses to lay out the rules of ownership among other things.

C.O. Thompson,

What do you think I am trying to say? That I support 100% income tax or even that it is likely? No. My assertion is that income taxes are not only less efficient but also morally inferior to sales taxes.

Government facilitates economic activity, yes? Then their income should be tied to the effectiveness of that facilitation. The more activity they encourage the more voluntary activity they may tax and the more revenue they generate. Since a sales tax applies to imports just it does domestically produced goods, it offsets the impact of trade deficits. As for exports the income from producing goods domestically remains here to engage in economic activity.

There are ways to provide subsidies for the poor just as is done now.