Also, federal estate tax is fucking retarded. It's an inheritance - not a sale. "Oh, I'm so sorry your dad died, $250K plz." Fuck that.
Please explain to me why inheritance should be treated differently from every other kind of income. What is so magically special about it that, while any other income you make is taxed (whether worked for, gained through investment, or given to you), this particular income (which may as well have fucking fallen from the sky, as far as you're concerned) is so sacrosanct that the evil hand of government must never lay a finger upon it?
Inheritance in general shouldn't be taxed. My parents already paid taxes on the money that bought it, and they pay their property tax every year. Why should I get taxed for it again just because they died?
you have a fundamental misunderstanding of how taxes work
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
Also, federal estate tax is fucking retarded. It's an inheritance - not a sale. "Oh, I'm so sorry your dad died, $250K plz." Fuck that.
Please explain to me why inheritance should be treated differently from every other kind of income. What is so magically special about it that, while any other income you make is taxed (whether worked for, gained through investment, or given to you), this particular income (which may as well have fucking fallen from the sky, as far as you're concerned) is so sacrosanct that the evil hand of government must never lay a finger upon it?
Inheritance in general shouldn't be taxed. My parents already paid taxes on the money that bought it, and they pay their property tax every year. Why should I get taxed for it again just because they died?
Well, my company already paid taxes in the form of corporate taxes on the money they paid me before I got it; why should I have to pay taxes on it? And the people who bought from them already paid taxes on the money they gave them in the form of income taxes and sales taxes, so why should the corporation have to pay corporate taxes on it? And the corporation that paid the people that bought the stuff from my corporation already paid corporate taxes on that money, so why should the people who bought the stuff have to pay income taxes on that? Ad nauseum.
Are you implying that I don't do anything for my money and didn't have to work to get where I am? Because if you are, sir, then you are mistaken.
Oh, you expend calories and time and safety in order to recieve money, certainly.
The money you earn, however, is only partly due to your own doing, and generally to be earning more than McDonalds Guy, you probably had a lot more help.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
I hope it wasn't a land grant college. And I would also be interested in hearing how you managed to make it through college and on to a career without using any governmental assistance in any form whatsoever.
Also, federal estate tax is fucking retarded. It's an inheritance - not a sale. "Oh, I'm so sorry your dad died, $250K plz." Fuck that.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
So who pays the government?
We both do, but ideally we both pay the same percentage of our income.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
I hope it wasn't a land grant college. And I would also be interested in hearing how you managed to make it through college and on to a career without using any governmental assistance in any form whatsoever.
Combination of scholarships from the university and my own income due to working throughout university.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
So who pays the government?
We both do, but ideally we both pay the same percentage of our income.
Even though you receive more benefits from the government?
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
So who pays the government?
We both do, but ideally we both pay the same percentage of our income.
you have a fundamental misunderstanding of how taxes work
Disagreement =/= misunderstanding
Let me put it this way:
the same dollar gets taxed over and over, every time it changes hands or goes through a transaction - that is the way tax systems work. Asking "why should I pay taxes on something that taxes have already been paid on?" suggests a misunderstanding.
Are you implying that I don't do anything for my money and didn't have to work to get where I am? Because if you are, sir, then you are mistaken.
Oh, you expend calories and time and safety in order to recieve money, certainly.
The money you earn, however, is only partly due to your own doing, and generally to be earning more than McDonalds Guy, you probably had a lot more help.
I don't know about that. Attended public school, worked hard to get scholarships, and then worked through university. I guess I got more out of public school because I went to a decent one, but I sure as hell wasn't handed what I've got on some silver platter.
I thought we were talking personal income tax, not corporate taxes. And it is technically impossible to tax a business as it is not a real person, only a legal person. The costs will be borne out somewhere and most likely at the bottom due to the 1st rule of plumbing.
I have no idea how off-track the thread has gotten so far, but I saw you talking about "employers". And of course you can tax a business/corporation (I was just using "business" to keep things simple and consistent). The fact that it is a legal person is exactly what makes that possible - but yes, you would apply corporate taxes and not personal income taxes.
But you're absolutely right about the 1st rule of plumbing - the costs of taxes on businesses/corporations are passed along to others, since the owner will always ensure that they get their's.
Furthermore, all of a sudden, a company has no incentive to invest in themselves. Why? Because investing in yourself is expensive. Normally, you spend money on improving the company, and that money is tax-deductible; subtracted from your profits at the end of the year, meaning you don't pay taxes on it. This goes for everything from employees to equipment. So, if you get a $2,000/year raise, really, it probably only costs your company $1,300/year, because they pay $700 less in taxes. Under a tax regime with no corporate taxes, this is no longer true. Also no longer true is the fact that buying new things for the company not only won't be tax-deductible, it will be 30% more expensive on top of that. By doing this, you've created a marginal cost increase on employee pay of 54% (i.e. paying an employee will cost a company half again as much under this tax plan), and a marginal cost increase of over 100% on any equipment or physical product cost for use or expansion. This assumes a corporation with revenues in the tens of millions of dollars, so the effect on smaller corporations won't be as bad, but will still be quite significant. This is a fucking huge disincentive for investment in improving a company, when they can just pay out a tax-free dividend to their shareholders. The shareholders have no reason to want the company to reinvest in itself, since that's just going to mean them getting hit with taxes.
I think it would be a bizarre consumption tax that taxed you on employing people. I don't think that's a common feature of such taxes . . . assuming this is what you're saying here.
EDIT: scratching my own calculations and replacing them with those of someone who probably knows what they're doing.
An interesting example of the impacts of corporate, personal and consumption taxes. Not sure how much I agree, and it is slightly exaggerated because I know the author doesn't actually favour just one kind of tax as in the OP, but appears to create three (and only three) choices.
The basic idea comes down to the role of taxes in determining the rate of return on investment. If an economy has a large number of high-return investment projects, then it will have higher levels of investment and - as investment accumulates - higher levels of productive capacity. That increased capacity in turn generates higher output, employment and wages. These are assumed to be Good Things in what follows.
So consider an investment project - the sort of project that involves purchasing machinery and equipment, employing labour and producing something that people are willing to buy - that offers a rate of return of 20%. And let's also suppose that a 20% rate of return is enough for investors to fork over their savings and let the project go through.
Suppose now that there's a corporate income tax of (say) 30%. The gross return on an investment of $100 may be $20, but after applying 30% tax on those profits, the return sent to the investor is $20 - $20*0.3 = $14. Although the investment project is still paying out 20%, the return that the investor sees is now 14%.
The same story goes for the case in which investors pay a 40% tax in their income. A $100 investment (out of income after taxes) is a sacrifice of $100 of consumption goods. That investment may generate a return of $20, but only $20 - $20*0.4 = $12 will be available to spend. Again, the return that the investor sees is reduced from 20% to 12%.
And now suppose that both sorts of taxes are in force. After the corporate tax is applied, the $20 profit becomes $14 sent to the investor. After income taxes are applied, that $14 becomes $8.40 available for expenditure on consumption goods.
This example illustrates the problem with income taxes: they introduce a wedge between the rate of return that is generated by the investment project and the rate of return that the investor actually sees. If there are many investment projects, each with a different rate of return, income taxes can reduce net rates of return to the point where marginal projects are not carried out. Output, employment and wages will be lower than what they would otherwise have been.
Now suppose that instead of corporate or income taxes, the investor is faced with a consumption tax of - say - 100%. This means that the $100 the investor has burning in her pocket can purchase $50 worth of consumer goods. Since there are no taxes on profits or on income, the entire $20 return is remitted. That $20 can then be used to buy $10 worth of consumer goods. Since the sacrifice of $50 in consumer goods has generated a return of $10 of consumer goods, the effective rate of return is still 20%. Contrary to income taxes, consumption taxes do not introduce wedges between the rates of return generated by an investment project and the rates of return that the investor sees.
One criticism, I think, would be like Than alluded to - he doesn't account for the consumption tax the project would have to pay on its machinery and equipment.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
So who pays the government?
We both do, but ideally we both pay the same percentage of our income.
you have a fundamental misunderstanding of how taxes work
Disagreement =/= misunderstanding
Let me put it this way:
the same dollar gets taxed over and over, every time it changes hands or goes through a transaction - that is the way tax systems work. Asking "why should I pay taxes on something that taxes have already been paid on?" suggests a misunderstanding.
I understand why they are doing it. I just happen to think that inheritance should be an exception regardless of the size of estate being inherited. Why? Because it's not like the inheritor bought the thing - his/her parents are dead. Inheriting that estate isn't a happy day, and much of the time it wasn't a planned thing. I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
I hope it wasn't a land grant college. And I would also be interested in hearing how you managed to make it through college and on to a career without using any governmental assistance in any form whatsoever.
Combination of scholarships from the university and my own income due to working throughout university.
Did that scholarship form get sent to you via the United States Postal Service? Did it get issued in dollars backed by the full faith and credit of the United States Government? Was it deposited into an FDIC insured bank account? And I'm talking about from birth, not just Freshman year. Public hospitals, doctors and/or nurses trained in public schools, FDA approved medications and inoculations, &c.
And even if we were to restrict it to your time at Uni, this is still ignoring any federal funding sent to your University for Research Grants &c. which reduces the total burden that tuition costs would otherwise need to bear.
I don't know about that. Attended public school, worked hard to get scholarships, and then worked through university. I guess I got more out of public school because I went to a decent one, but I sure as hell wasn't handed what I've got on some silver platter.
And no help via family of any kind?
I assume your parents never helped you with your schoolwork as a child?
I assume the scholarship was a purely private thing.
Private university with no public funding whatsoever?
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
What do you do for a living, jclast?
I'm a satellite engineer - not that it matters.
Really? You're a satellite engineer, and you don't think that you benefit more from the existance of those government services than the guy at McDonald's?
First of all, the guy working at McDonald's obviously makes way less money than you do, so by that metric alone has benefited far less from the current state of society than you. Furthermore, he owns fewer assets than you do; he therefore benefits less from police, fire, and military protection than you do (he has much less to lose). The existance of a literate populace means that your company can afford to pay you a lot more, since they can pay lower-level manufacturing people much less, secure in the knowledge that their public-school education has given them much of the necessary training needed for manufacturing satellite parts. Finally, the fact that your job exists at all is a function of the government space program. Yes, you, yourself may not be paid by the government (though there's a very good chance that you are), but satellites were invented in the first place by governments, funded by taxes. And I suppose you didn't have any government student loans, grants, or scholarships when going to school, right? Or any private loans regulated by the government? And you, of course, didn't go to an institution certified to uphold certain educational standards by the government, right? Didn't use the internet to find your job, which was invented by DARPA, a government agency? No private scholarships either, right, since those are strongly incentivized by the government making them tax-deductible? And of course, the school you went to received no government grant money of any sort, right?
We both do, but ideally we both pay the same percentage of our income.
Why should taxes be adjusted to meet your definition of fair?
Progressive is, by its very definition, unfair. Flat % is a much more fair proposition. You make $20K and are charged X%. I make $50K and am charged X%. That's fair.
You make more so you pay a higher % is not fair. It's effective, but it sure as hell isn't fair.
I understand why they are doing it. I just happen to think that inheritance should be an exception regardless of the size of estate being inherited. Why? Because it's not like the inheritor bought the thing - his/her parents are dead. Inheriting that estate isn't a happy day, and much of the time it wasn't a planned thing. I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
The means through which you attain income is completely immaterial to the simple fact that it is income.
I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
The government does not exist to make you feel better about your rich dad dying. There is no IRS form you can fill out that says "My job is really depressing, can I not pay taxes this year?"
I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
But you think the guy working for shit wages at McDonald's should pay a comparatively higher tax rate than he does now, even though there are others who can much better afford it?
We both do, but ideally we both pay the same percentage of our income.
Why should taxes be adjusted to meet your definition of fair?
Progressive is, by its very definition, unfair. Flat % is a much more fair proposition. You make $20K and are charged X%. I make $50K and am charged X%. That's fair.
You make more so you pay a higher % is not fair. It's effective, but it sure as hell isn't fair.
You didn't answer my question. You are claiming your definition of fair to be a desirable outcome. You have failed to establish why.
If I get cancer and die when I turn 30, it would be "fair" for you to be killed as well. This is more fair, is it not?
We both do, but ideally we both pay the same percentage of our income.
Why should taxes be adjusted to meet your definition of fair?
Progressive is, by its very definition, unfair. Flat % is a much more fair proposition. You make $20K and are charged X%. I make $50K and am charged X%. That's fair.
You make more so you pay a higher % is not fair. It's effective, but it sure as hell isn't fair.
Because everyone benefits equally from governmental services. Nobody receives Y% or imparts Z% of cost for which they should be charged extra.
Also, federal estate tax is fucking retarded. It's an inheritance - not a sale. "Oh, I'm so sorry your dad died, $250K plz." Fuck that.
Please explain to me why inheritance should be treated differently from every other kind of income. What is so magically special about it that, while any other income you make is taxed (whether worked for, gained through investment, or given to you), this particular income (which may as well have fucking fallen from the sky, as far as you're concerned) is so sacrosanct that the evil hand of government must never lay a finger upon it?
It is different because it's a windfall - income without a source. Generally when income is taxed it is taxed because A: you're getting a bunch of money and B: you're going to keep getting that money, assuming the conditions remain the same (you keep working, you keep your money invested, your farm keeps growing apples, etc. etc. etc.).
We both do, but ideally we both pay the same percentage of our income.
Why should taxes be adjusted to meet your definition of fair?
Progressive is, by its very definition, unfair. Flat % is a much more fair proposition. You make $20K and are charged X%. I make $50K and am charged X%. That's fair.
You make more so you pay a higher % is not fair. It's effective, but it sure as hell isn't fair.
Suppose we tax two people at the same flat rate, 50%. One person makes $20,000 and the other makes $50 million.
The person who makes $20,000 goes from $20,000 to $10,000, and is now basically out on the street. On the other hand, the person with $50 million now has $25 million and is still sitting pretty. Would you say that the two people have suffered an equal burden, in real terms, from taxation? I would not.
For people who make almost nothing to have to contribute the same proportion of their income as Daddy Warbucks seems extremely unfair to me, since they already have so little to give.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
What do you do for a living, jclast?
I'm a satellite engineer - not that it matters.
Really? You're a satellite engineer, and you don't think that you benefit more from the existance of those government services than the guy at McDonald's?
First of all, the guy working at McDonald's obviously makes way less money than you do, so by that metric alone has benefited far less from the current state of society than you. Furthermore, he owns fewer assets than you do; he therefore benefits less from police, fire, and military protection than you do (he has much less to lose). The existance of a literate populace means that your company can afford to pay you a lot more, since they can pay lower-level manufacturing people much less, secure in the knowledge that their public-school education has given them much of the necessary training needed for manufacturing satellite parts. Finally, the fact that your job exists at all is a function of the government space program. Yes, you, yourself may not be paid by the government (though there's a very good chance that you are), but satellites were invented in the first place by governments, funded by taxes. And I suppose you didn't have any government student loans, grants, or scholarships when going to school, right? Or any private loans regulated by the government? And you, of course, didn't go to an institution certified to uphold certain educational standards by the government, right? Didn't use the internet to find your job, which was invented by DARPA, a government agency? No private scholarships either, right, since those are strongly incentivized by the government making them tax-deductible? And of course, the school you went to received no government grant money of any sort, right?
1) At least locally I already pay more for police/fire/etc as my community's safety forces are funded partially by sales tax. Usage taxes I like. Because they make sense.
2) No, I never got a student loan. I paid for college through scholarship and personal income. Where the college got their scholarship money I can't say, but I personally did not take out a loan. I don't know whether the scholarship was private or not (I assume not since I went to public uni and they were the issuer).
3) I am paid, indirectly, by the government - you've got me there.
If you're honestly arguiong that scaling taxes based on income is really as close to usage-based taxes as we can get then I agree with you.
Furthermore, all of a sudden, a company has no incentive to invest in themselves. Why? Because investing in yourself is expensive. Normally, you spend money on improving the company, and that money is tax-deductible; subtracted from your profits at the end of the year, meaning you don't pay taxes on it. This goes for everything from employees to equipment. So, if you get a $2,000/year raise, really, it probably only costs your company $1,300/year, because they pay $700 less in taxes. Under a tax regime with no corporate taxes, this is no longer true. Also no longer true is the fact that buying new things for the company not only won't be tax-deductible, it will be 30% more expensive on top of that. By doing this, you've created a marginal cost increase on employee pay of 54% (i.e. paying an employee will cost a company half again as much under this tax plan), and a marginal cost increase of over 100% on any equipment or physical product cost for use or expansion. This assumes a corporation with revenues in the tens of millions of dollars, so the effect on smaller corporations won't be as bad, but will still be quite significant. This is a fucking huge disincentive for investment in improving a company, when they can just pay out a tax-free dividend to their shareholders. The shareholders have no reason to want the company to reinvest in itself, since that's just going to mean them getting hit with taxes.
I think it would be a bizarre consumption tax that taxed you on employing people. I don't think that's a common feature of such taxes . . . assuming this is what you're saying here.
Here's the numbers as I see them:
You have a corporation with $100,000 a year in revenues and $80,000 in costs (labour and other stuff). Let's a pick an easy to use tax rate of 20%, so 1/5 of $20,000 = $4,000 in taxes, $16,000 in profits.
If they increase wages by $2,000 (giving them costs of $82,000), now pay $3,600 in taxes (1/5 of $18,000) but also only make $14,400 in profits. So yes, they save on taxes but the increase still costs them $16,000.
Now without any taxes, there is a full $20,000 in profits in scenario A. In scenario B they would have $18,000 in profits. But (this is what I think you are ignoring) they could increase wages and otherwise invest in the business by a full $4,000 without decreasing their return (there will still be $16,000 in profits, same as in scenario A with 20% taxes) - and any future increase in profits will also be returned to the investors in full. No guarantee that they will use the surplus cash to do that, but there's also no guarantee that they'll invest in the first two, taxed, scenarios either, since they also cut into profits, though not as much since taxes have already done so.
There are other gains too - less distortion for investors who currently see their investment pass through two levels of taxation (first the corporate taxes before the dividend is paid, and then personal taxes when the dividend is received - I'm not saying they shouldn't pay taxes on their income though. Personal income taxes should be a part of any mix). It can also make the jurisdiction very attractive for businesses to set up shop and employ people, increasing employment and wages (then, when most people have a job and a decent income, you can get more out of them through personal income taxes).
But of course this is a little moot, since I'm not saying all taxes should be replaced with a consumption tax (and only a consumption tax). While I think consumption taxes can be useful, they are only one kind of tax that you need.
I'm not quite getting what you're saying with your numbers. But here is what I'm saying:
Currently, a company with profits in the tens of millions pays a 35% corporate tax rate. So, if they pay an employer $40,000 per year, it costs them $26,000. We get rid of corporate taxes altogether, and it will cost them $40,000 to pay the same employee the same amount, which is a marginal increase of $14,000 over the $26,000 they're currently spending, roughly 54%.
Re: B I don't rightly care if the impact on me is minimal. I worked for my money and I have just as much right o hang on to it as the dude working at McDonald's. I didn't go to college to contribute more to society. I went to college to contribute more to my wallet.
What makes you think that?
Because I'm not better than he is and he's not better than I am. We both worked for our money, and we both deserve to hang on to it.
What do you do for a living, jclast?
I'm a satellite engineer - not that it matters.
Really? You're a satellite engineer, and you don't think that you benefit more from the existance of those government services than the guy at McDonald's?
First of all, the guy working at McDonald's obviously makes way less money than you do, so by that metric alone has benefited far less from the current state of society than you. Furthermore, he owns fewer assets than you do; he therefore benefits less from police, fire, and military protection than you do (he has much less to lose). The existance of a literate populace means that your company can afford to pay you a lot more, since they can pay lower-level manufacturing people much less, secure in the knowledge that their public-school education has given them much of the necessary training needed for manufacturing satellite parts. Finally, the fact that your job exists at all is a function of the government space program. Yes, you, yourself may not be paid by the government (though there's a very good chance that you are), but satellites were invented in the first place by governments, funded by taxes. And I suppose you didn't have any government student loans, grants, or scholarships when going to school, right? Or any private loans regulated by the government? And you, of course, didn't go to an institution certified to uphold certain educational standards by the government, right? Didn't use the internet to find your job, which was invented by DARPA, a government agency? No private scholarships either, right, since those are strongly incentivized by the government making them tax-deductible? And of course, the school you went to received no government grant money of any sort, right?
1) At least locally I already pay more for police/fire/etc as my community's safety forces are funded partially by sales tax. Usage taxes I like. Because they make sense.
Actually, even by your own analysis, sales taxes are grossly unfair because they overtax the poor as a % of gross income. Consider: there is a tax on spending, but no tax on saving. Since people with less money spend a higher percentage of their income, as opposed to saving, they are effectively taxed at a higher rate as a % of their gross income.
Also, federal estate tax is fucking retarded. It's an inheritance - not a sale. "Oh, I'm so sorry your dad died, $250K plz." Fuck that.
Please explain to me why inheritance should be treated differently from every other kind of income. What is so magically special about it that, while any other income you make is taxed (whether worked for, gained through investment, or given to you), this particular income (which may as well have fucking fallen from the sky, as far as you're concerned) is so sacrosanct that the evil hand of government must never lay a finger upon it?
It is different because it's a windfall - income without a source. Generally when income is taxed it is taxed because A: you're getting a bunch of money and B: you're going to keep getting that money, assuming the conditions remain the same (you keep working, you keep your money invested, your farm keeps growing apples, etc. etc. etc.).
Temporary work is taxed.
Lottery winnings are taxed.
Single one-time purchases pay sales tax.
Taxes are paid on all sorts of one-time or unpredictable transactions.
1) At least locally I already pay more for police/fire/etc as my community's safety forces are funded partially by sales tax. Usage taxes I like. Because they make sense.
You have more to lose, so you use police/fire/etc more. Remember, PREVENTION is better than SIRENS AT YOUR DOOR.
2) No, I never got a student loan. I paid for college through scholarship and personal income. Where the college got their scholarship money I can't say, but I personally did not take out a loan. I don't know whether the scholarship was private or not (I assume not since I went to public uni and they were the issuer).
So chances are taxes helped to pay your way through college. WHOOPS.
3) I am paid, indirectly, by the government - you've got me there.
I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
But you think the guy working for shit wages at McDonald's should pay a comparatively higher tax rate than he does now, even though there are others who can much better afford it?
The cognitive dissonance must be unsettling.
In all honesty I would give them a break. We all start on equal footing and then lessen the burden on the less fortunate instead of scaling it up continually to punish the successful.
I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
But you think the guy working for shit wages at McDonald's should pay a comparatively higher tax rate than he does now, even though there are others who can much better afford it?
The cognitive dissonance must be unsettling.
In all honesty I would give them a break. We all start on equal footing and then lessen the burden on the less fortunate instead of scaling it up continually to punish the successful.
Nobody is talking about punishing the successful. Where, exactly, does the marginal income tax rate in this country get over 100%? Because that would be the only way you could call it "punishing" the successful. All the progressive income tax says is that you benefit way more from the government than the dude making minimum wage at McDonald's, so you should have to pay a bit more.
1) At least locally I already pay more for police/fire/etc as my community's safety forces are funded partially by sales tax. Usage taxes I like. Because they make sense.
You have more to lose, so you use police/fire/etc more. Remember, PREVENTION is better than SIRENS AT YOUR DOOR.
2) No, I never got a student loan. I paid for college through scholarship and personal income. Where the college got their scholarship money I can't say, but I personally did not take out a loan. I don't know whether the scholarship was private or not (I assume not since I went to public uni and they were the issuer).
So chances are taxes helped to pay your way through college. WHOOPS.
3) I am paid, indirectly, by the government - you've got me there.
WHOOPS again.
They're not really WHOOPSs though. I'm so very sorry that I got good enough grades to qualify for a scholarship and did well enough in college to land a job with a defense contractor.
I benefit from people (including myself) who pay taxes. But by your logic every single person does.
I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
But you think the guy working for shit wages at McDonald's should pay a comparatively higher tax rate than he does now, even though there are others who can much better afford it?
The cognitive dissonance must be unsettling.
In all honesty I would give them a break. We all start on equal footing and then lessen the burden on the less fortunate instead of scaling it up continually to punish the successful.
I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
But you think the guy working for shit wages at McDonald's should pay a comparatively higher tax rate than he does now, even though there are others who can much better afford it?
The cognitive dissonance must be unsettling.
In all honesty I would give them a break. We all start on equal footing and then lessen the burden on the less fortunate instead of scaling it up continually to punish the successful.
What's the difference between these alternatives?
Suppose we start with an equal footing of 35% and then lessen the burden on the less fortunate. Naturally, we're going to want to do it gradually. The least fortunate should have the least burden, etc. We eventually work out the following brackets:
Top 3rd: 35%
Middle 3rd: 20%
Bottom 3rd: 10%
Now suppose we do it the other way around, starting with an equal footing of 10% and scaling it up continually to punish the successful:
Bottom 3rd: 10%
Middle 3rd: 20%
Top 3rd: 35%
Posts
you have a fundamental misunderstanding of how taxes work
Yeah, I pulled a number out of the sky. There's no way my parents have $4,000,000 worth of estate. Hell, I'm not sure they break the $250K I made up.
Try again.
Oh, you expend calories and time and safety in order to recieve money, certainly.
The money you earn, however, is only partly due to your own doing, and generally to be earning more than McDonalds Guy, you probably had a lot more help.
I hope it wasn't a land grant college. And I would also be interested in hearing how you managed to make it through college and on to a career without using any governmental assistance in any form whatsoever.
It's income.
You are aware that there is a $3.5 million exemption on Estate Taxes right? If it's under that, you pay nothing.
Disagreement =/= misunderstanding
Even though you receive more benefits from the government?
Let me put it this way:
the same dollar gets taxed over and over, every time it changes hands or goes through a transaction - that is the way tax systems work. Asking "why should I pay taxes on something that taxes have already been paid on?" suggests a misunderstanding.
I don't know about that. Attended public school, worked hard to get scholarships, and then worked through university. I guess I got more out of public school because I went to a decent one, but I sure as hell wasn't handed what I've got on some silver platter.
Why should taxes be adjusted to meet your definition of fair?
But you're absolutely right about the 1st rule of plumbing - the costs of taxes on businesses/corporations are passed along to others, since the owner will always ensure that they get their's.
I think it would be a bizarre consumption tax that taxed you on employing people. I don't think that's a common feature of such taxes . . . assuming this is what you're saying here.
EDIT: scratching my own calculations and replacing them with those of someone who probably knows what they're doing.
An interesting example of the impacts of corporate, personal and consumption taxes. Not sure how much I agree, and it is slightly exaggerated because I know the author doesn't actually favour just one kind of tax as in the OP, but appears to create three (and only three) choices.
One criticism, I think, would be like Than alluded to - he doesn't account for the consumption tax the project would have to pay on its machinery and equipment.
I understand why they are doing it. I just happen to think that inheritance should be an exception regardless of the size of estate being inherited. Why? Because it's not like the inheritor bought the thing - his/her parents are dead. Inheriting that estate isn't a happy day, and much of the time it wasn't a planned thing. I can't put it better than that it rubs me the wrong way that the government cares so little for its citizens that we tax those mourning so great a loss.
Did that scholarship form get sent to you via the United States Postal Service? Did it get issued in dollars backed by the full faith and credit of the United States Government? Was it deposited into an FDIC insured bank account? And I'm talking about from birth, not just Freshman year. Public hospitals, doctors and/or nurses trained in public schools, FDA approved medications and inoculations, &c.
And even if we were to restrict it to your time at Uni, this is still ignoring any federal funding sent to your University for Research Grants &c. which reduces the total burden that tuition costs would otherwise need to bear.
And no help via family of any kind?
I assume your parents never helped you with your schoolwork as a child?
I assume the scholarship was a purely private thing.
Private university with no public funding whatsoever?
First of all, the guy working at McDonald's obviously makes way less money than you do, so by that metric alone has benefited far less from the current state of society than you. Furthermore, he owns fewer assets than you do; he therefore benefits less from police, fire, and military protection than you do (he has much less to lose). The existance of a literate populace means that your company can afford to pay you a lot more, since they can pay lower-level manufacturing people much less, secure in the knowledge that their public-school education has given them much of the necessary training needed for manufacturing satellite parts. Finally, the fact that your job exists at all is a function of the government space program. Yes, you, yourself may not be paid by the government (though there's a very good chance that you are), but satellites were invented in the first place by governments, funded by taxes. And I suppose you didn't have any government student loans, grants, or scholarships when going to school, right? Or any private loans regulated by the government? And you, of course, didn't go to an institution certified to uphold certain educational standards by the government, right? Didn't use the internet to find your job, which was invented by DARPA, a government agency? No private scholarships either, right, since those are strongly incentivized by the government making them tax-deductible? And of course, the school you went to received no government grant money of any sort, right?
You make more so you pay a higher % is not fair. It's effective, but it sure as hell isn't fair.
The means through which you attain income is completely immaterial to the simple fact that it is income.
The government does not exist to make you feel better about your rich dad dying. There is no IRS form you can fill out that says "My job is really depressing, can I not pay taxes this year?"
But you think the guy working for shit wages at McDonald's should pay a comparatively higher tax rate than he does now, even though there are others who can much better afford it?
The cognitive dissonance must be unsettling.
You didn't answer my question. You are claiming your definition of fair to be a desirable outcome. You have failed to establish why.
If I get cancer and die when I turn 30, it would be "fair" for you to be killed as well. This is more fair, is it not?
Because everyone benefits equally from governmental services. Nobody receives Y% or imparts Z% of cost for which they should be charged extra.
Suppose we tax two people at the same flat rate, 50%. One person makes $20,000 and the other makes $50 million.
The person who makes $20,000 goes from $20,000 to $10,000, and is now basically out on the street. On the other hand, the person with $50 million now has $25 million and is still sitting pretty. Would you say that the two people have suffered an equal burden, in real terms, from taxation? I would not.
1) At least locally I already pay more for police/fire/etc as my community's safety forces are funded partially by sales tax. Usage taxes I like. Because they make sense.
2) No, I never got a student loan. I paid for college through scholarship and personal income. Where the college got their scholarship money I can't say, but I personally did not take out a loan. I don't know whether the scholarship was private or not (I assume not since I went to public uni and they were the issuer).
3) I am paid, indirectly, by the government - you've got me there.
If you're honestly arguiong that scaling taxes based on income is really as close to usage-based taxes as we can get then I agree with you.
Currently, a company with profits in the tens of millions pays a 35% corporate tax rate. So, if they pay an employer $40,000 per year, it costs them $26,000. We get rid of corporate taxes altogether, and it will cost them $40,000 to pay the same employee the same amount, which is a marginal increase of $14,000 over the $26,000 they're currently spending, roughly 54%.
Actually, even by your own analysis, sales taxes are grossly unfair because they overtax the poor as a % of gross income. Consider: there is a tax on spending, but no tax on saving. Since people with less money spend a higher percentage of their income, as opposed to saving, they are effectively taxed at a higher rate as a % of their gross income.
Temporary work is taxed.
Lottery winnings are taxed.
Single one-time purchases pay sales tax.
Taxes are paid on all sorts of one-time or unpredictable transactions.
You seem to be remarkably wrong here.
You have more to lose, so you use police/fire/etc more. Remember, PREVENTION is better than SIRENS AT YOUR DOOR.
So chances are taxes helped to pay your way through college. WHOOPS.
WHOOPS again.
They're not really WHOOPSs though. I'm so very sorry that I got good enough grades to qualify for a scholarship and did well enough in college to land a job with a defense contractor.
I benefit from people (including myself) who pay taxes. But by your logic every single person does.
How is that any different in practice?
Heat death of the universe?
What's the difference between these alternatives?
Suppose we start with an equal footing of 35% and then lessen the burden on the less fortunate. Naturally, we're going to want to do it gradually. The least fortunate should have the least burden, etc. We eventually work out the following brackets:
Top 3rd: 35%
Middle 3rd: 20%
Bottom 3rd: 10%
Now suppose we do it the other way around, starting with an equal footing of 10% and scaling it up continually to punish the successful:
Bottom 3rd: 10%
Middle 3rd: 20%
Top 3rd: 35%
What's the difference?