Not so fast you tofu-eatin' organic hippie hipster, y'all need to pull over...

[Occasionally6]

Originally Posted by P-hack

road infrastructure tax should be based on usage, vehicle weight, # of tires, that sort of thing. People have gotten into trouble for making their own biodiesel/ethanol and not paying a fuel tax. The tax laws are pretty ridiculous all around, but the sophistication to make it simple is a long way off. So they generalize a lot.

I suppose they can check when you sell or junk a vehicle to see if you have been honest about your miles, or during annual inspections. Plus some form to replace an odo/dashboard.

These days it would be very easy to have a GPS based system of taxing road use. Even basic cell phones include the required technology. If it was linked to a particular vehicle, it could take into account the effect of vehicle weight. Varying the usage charges with time of day, to reduce congestion, could be added.

I suspect it would be very difficult to implement due to concerns about privacy and governments being able to monitor people's movements.

Originally Posted by MPGranger

A very simple universal flat tax on all goods and all services taxes everyone from the poorest individual to the richest corporation equally and impartially. But at the same time the poor do not contribute as much as the rich because the rich buy more things that are more expensive.

The problem with flat taxes, including goods and services taxes, is that they are highly regressive. Low income earners spend a much greater proportion of their income (often all of it) than do those on higher incomes.

[cbaber]

Originally Posted by Occasionally6

The problem with flat taxes, including goods and services taxes, is that they are highly regressive. Low income earners spend a much greater proportion of their income (often all of it) than do those on higher incomes.

A regressive tax system is when the tax rate decreases as the amount subject to taxation increases. A progressive tax system is the opposite, which is what we have now. A flat tax is the proportional tax policy. The poor group and the rich group have the same 90% of their income to spend after taxes.

If you ask a libertarian like me, its not up to any government to tell someone, "Hey, you make a lot of money and we don't think you need it all, so we are going to take more of a percentage of your income, simply because of the amount of money you make". It's not any of the governments business what we spend our money on and they don't have the authority to tell us how much we should have or need to have.

[Occasionally6]

A GST is regressive because different proportions of high and low incomes are spent. An individual on, say, $100K/yr has significant discretion over how much to spend. An individual on, say, $25K/yr is likely to spend all of that just to survive.

If we arbitrarily set the GST at 20% with no other taxes:

Assuming 100% spending, the $25K/yr individual would pay $5K/yr in tax.

With an income of $100K/yr an individual might spend, and so pay tax on, $50k/yr (twice as much as the $25K/yr household) and then pay $10K/yr tax.

If those same taxes were assessed as income tax the $25K/yr individual would pay at a rate of 20% and the $100K/yr individual at 10%.

A flat rate of income tax is a bit fairer but is still regressive in effect because the unspent income is available for investment. It still tends to widen the gap between rich and poor and trap people in poverty.

[shovel]

Originally Posted by MPGranger

ok Karl, calm down. Have you ever thought that the big old truck that brought your groceries paid the taxes on the way over. Or how about the employees paying the taxes that are set up. And that the store will be passing those taxes to you by the way of price inflation? Finding a way to tax people who are not significantly contributing to the problem is the topic of this thread.

The "big old truck" that brings food to your store today will be electric tomorrow. The time to address this situation is now, to ensure that safe and well-maintained roads are in place tomorrow and that the burden of paying for them is shared by everyone who uses them. It absolutely blows my mind that this is even a topic of discussion.

Originally Posted by MPGranger

And if you are annoyed by tax dodgers, what is your feeling on international corporations? .

I am much more concerned about big dollar tax evaders than by those who exploit welfare. Those who attain wealth by leveraging the American commerce & education system, then shuffle the money they earned on the public's back through tax loopholes and into shelters so they don't bear the burden of keeping the same system running, that made their wealth possible in the first place.

I have a relative who spends a lot of her time whining about those who exploit welfare, but has no problem dropping off a car full of garbage at Goodwill, getting a blank donation receipt from them and filling it out for $1000 so she can write it off her taxes. I've tried to force her to reconcile those behaviors in her head, and she lacks the circuitry to process it.

Meanwhile I pay full rate taxes, and don't even mind them. I mind that a-holes dodge taxes, wealthy and poor. If you don't like paying your share, GTFO my roads and die of food poisoning or a fire or get mugged or something, since the FDA and FD and police and military are all paid for with taxes.

[cbaber]

Originally Posted by Occasionally6

A GST is regressive because different proportions of high and low incomes are spent. An individual on, say, $100K/yr has significant discretion over how much to spend. An individual on, say, $25K/yr is likely to spend all of that just to survive.

If we arbitrarily set the GST at 20% with no other taxes:

Assuming 100% spending, the $25K/yr individual would pay $5K/yr in tax.

With an income of $100K/yr an individual might spend, and so pay tax on, $50k/yr (twice as much as the $25K/yr household) and then pay $10K/yr tax.

If those same taxes were assessed as income tax the $25K/yr individual would pay at a rate of 20% and the $100K/yr individual at 10%.

A flat rate of income tax is a bit fairer but is still regressive in effect because the unspent income is available for investment. It still tends to widen the gap between rich and poor and trap people in poverty.

Assuming we are only talking about federal income tax, the person making $25k would pay $5k, and the person making $100k would pay $20k. If you make more money you pay more money. At the end of the day everyone pays the same proportion of their income as taxes. As far as goods and services, that is a separate state and local tax and is also a flat rate, so once again completely fair.

How did we get into tax policy again? lol


Investment should be encouraged, instead of discouraged as you seem to believe. The rich don't hold people in poverty. Everyone should be investing, no matter how much you make. If you plan to retire on social security alone you are in for a big surprise. The benefits of investing are available to everyone, not just the wealthy. Furthermore, it isn't up to the government to ensure people live the lives they want. If a person making $25k wants more money to spend after taxes they need to make more money or spend less.

[Occasionally6]

Originally Posted by cbaber

Assuming we are only talking about federal income tax, the person making $25k would pay $5k, and the person making $100k would pay $20k. If you make more money you pay more money. At the end of the day everyone pays the same proportion of their income as taxes. As far as goods and services, that is a separate state and local tax and is also a flat rate, so once again completely fair.

But the low ($25k) income doesn't leave the same option of investing. The effects of that are cumulative. Figure it out over 25 years, assuming the (arbitrary) $50k/yr investment. You can ignore inflation and assume average economic growth = investment income of ~3%. Work out how much difference in wealth is due to the unearned income. Then figure out the tax rate to correct the difference so that the after tax incomes are proportional to the pre-tax incomes. You can tax the 3% at 20%.

Re a GST: It doesn't matter at what level of government the tax is levied. The effect is the same.

There is another argument against a flat tax and that is that the same numerical amount of money has less value the more you have. Take $50 from someone who has $100 and it is very noticeable (they may starve). Take $50 (or even $5million) from someone with $10 million and it is much less noticeable (they won't starve).

At the very top end you could take all income over a certain amount and the life those income earners lead would not change in the slightest. (I'm not suggesting that be done).

Investment should be encouraged, instead of discouraged as you seem to believe.

Investment is fine it's just that the effects of it need to be, indeed are, acknowledged in the tax system.

The art of designing a tax system is allowing sufficient incentive to encourage effort while not locking significant human potential out of opportunity.

Everyone should be investing, no matter how much you make.

The benefits of investing are available to everyone, not just the wealthy.

If a person making $25k wants more money to spend after taxes they need to make more money or spend less.

Doing either is not always a choice.

[wdb]

Originally Posted by cbaber

Assuming we are only talking about federal income tax, the person making $25k would pay $5k, and the person making $100k would pay $20k. If you make more money you pay more money. At the end of the day everyone pays the same proportion of their income as taxes. As far as goods and services, that is a separate state and local tax and is also a flat rate, so once again completely fair.

You're going in circles. Are we talking about goods and services taxes, or income taxes? They're vastly different in their impact on poor vs. rich.

GST is regressive not because rich people pay a different percentage on purchases than poor people. It's regressive because poor people spend a much larger percentage of their income on necessities such as food, transportation, and shelter.

For the sake of argument: let's say that with $25K income, virtually all of it goes to purchasing necessities. GST of 20%, $5K paid in taxes, for a net tax rate of 20%.

Now take $100K income, $25K of which is spent on necessities. $5K paid in taxes, for a net tax rate of 5%. So now the amount of discretionary spending determines the actual net tax rate on the $100K. It's a nice problem to have.

A truly "flat" income tax is regressive because, again, the lower income must all be spent on necessities and, by taking taxes out, there is less money to spend on them. Even Ronald Reagan's proposed 17% "flat" tax had a floor, an amount of income that was not taxed.

My biggest problem with Reagan's plan, Steve Forbes' plan, and other "flat" tax plans I've seen is that their true objective is to totally eliminate capital gains taxes on individuals. Talk about punishing people who work hard for their money! If my neighbor makes $50K/year on investments, and I make $50K/year via a paycheck, what in the world is fair about him paying no tax and me carrying 100% of the burden?

[MPGranger]

Originally Posted by Occasionally6

A flat rate of income tax is a bit fairer but is still regressive in effect because the unspent income is available for investment. It still tends to widen the gap between rich and poor and trap people in poverty.

I think all income taxes are stupid. A federal inclusive sales tax on all goods and services is best. It's a tax on consumption, which is what America is known for. How would you like to take home 25% more money today? That is what the flat sales tax would do. And then you would voluntarily pay the tax when you decide to consume. Are you poor? Maybe you should plant a garden or raise some chickens so you have a source of reoccurring product.

FROM SHOVEL (I don't know how to add a second quote)
Meanwhile I pay full rate taxes, and don't even mind them. I mind that a-holes dodge taxes, wealthy and poor. If you don't like paying your share, GTFO my roads and die of food poisoning or a fire or get mugged or something, since the FDA and FD and police and military are all paid for with taxes.

I am currently 26 and have been in the military since shortly after turning 17. I have spent a quarter of my adult life in Iraq/Afghanistan. I haven't paid federal taxes since going to Active Duty, and the Commonwealth of Pennsylvania also gives me my income tax back. So I financially have not paid into the system, but most would say that I have contributed more to our way of life than the average joe. I have seen how truly poor and destitute people live, I have yet to see that in America. Sure, we have people who do not live in the same standard of living, but there are many outside our country who have it much worse. My point about the Flat and universal sales tax is that the rich couldn't pay an accountant to figure out how to dodge it. And thus, it is extremely fair because they will actually pay it, and the less fortunate get an edge by an immediate increase in take home pay if we abolished the federal income tax.

[Occasionally6]

Originally Posted by MPGranger

I think all income taxes are stupid. A federal inclusive sales tax on all goods and services is best. It's a tax on consumption, which is what America is known for.

Consumption taxes can be used to shape consumer behavior, such as (on topic) road use. If you tax the use of a road directly you can encourage options that may be less convenient but may have a lower overall cost of provision eg. public transport.

Time of use charges could be used to lower the maximum traffic load, so increasing travel speeds (and reducing fuel consumption), or reduce the number of lanes that have to be provided for a given number of journeys.

It depends very much on what the goal is as to where the tax should be applied. If the goal is to reduce reliance on imported energy, conserve a finite resource or reduce exhaust emissions, then fuel taxation is appropriate. If it is to lower the cost of road construction, then direct road use taxes will be more effective, regardless of the energy source propelling the vehicles.

How would you like to take home 25% more money today? That is what the flat sales tax would do. And then you would voluntarily pay the tax when you decide to consume.

It sounds good until you realize that everything also costs 25% more and, assuming you spend everything you earn (as some people are forced to do), you are back where you started from.

There are ways to adjust tax systems that have consumption taxes as a part of them so as to minimise the regressive effects. For example you could omit taxing essentials, such as fresh foods, only tax items (of a particular type) that are above a certain value or compensate via income tax rates, with a tax free portion or higher taxation rates at higher income levels.

Are you poor? Maybe you should plant a garden or raise some chickens so you have a source of reoccurring product.

I don't know if that is a rhetorical question or not but if it not, no I am not "poor". Not everyone supports social policies that are in their own (financial) self interest. Just ask Warren Buffett.

[MPGranger]

But with a product, like a tomato plant, that has little initial value you can get many beneficial items, tons of tomatoes. Something about give a man a fish and he eats for a day but teach a man to fish and feed him for his life. Is is not in the spirit of ecomodder to maximize the economics of your personal fuel situation? Maybe I am not communicating the thrift concept right. I am, by no means, rich. I plant a garden every year, I have kids and go to a infant/toddler thrift shop in town instead of babiesRus. I just bought a used sedan to replace the Ranger instead of a brand new one. Personal wealth is based of the initial hand in life that you are given and, in time, what you did with that hand to leverage yourself into a better situation.

Saying that someone who has more should support those who have less is unfair and marxist. The American dream is about having a goal and working hard to obtain that goal. No where in the American dream does the government descend from heaven and lift you up out of your squalor to initiate that goal. Why should you give someone who has wasted what they had, something that someone else has worked hard for? I am not saying all that benefit from government programs waste it, but these programs makes our money worth less every cent that is just given away. We need a society of many people that work hard to contribute, not hold their hands out and beg.

Where does the idea that something from nothing is good for people? From people who do not want to contribute, but want what the contributors have. I'm thinking about the fable of the ant and the grasshopper. But our political system rewards the politicians that successfully get their constituents "free" money. Not for the good of our society, but to perpetuate one man/groups personal power. And by enslaving people to the need to get slightly ahead of their fellows. Our political system has been performing a steady downward spiral.

And saying that products would cost 25% more because we now tax goods and services is simple to say the least. With a consistent taxation plan, business can spend more time conducting business than plotting their tax strategy. Plus many states already have a sales tax.

on another note I believe in an inclusive sales tax, so that a $1 stick of gum costs the consumer $1 and the percentage of that dollar goes to the federal government. Prices would likely spike initially, but then this wonderful free market of many businesses, back stabbing each other, will begin to cut prices to compete with rivals. My belief is that human greed is the best motivator in business. And they will whittle each other down. Does anybody remember what the price of a Kindle was the day the iPad was released? They where both about $500. And what was the price of the same Kindle 6 months later? a little under $200. Why? did the government tell amazon to lower the price? no How about no person with a eye on value would buy such a lesser product for the same price? I had a friend that really liked his kindle he bought his second one a few months before the iPad came out, Amazon made quite a tidy profit off of him.