Raising Taxes

[Jayjay]

Tax the rich too much and you wreck the economy and people starve.

That didn't happen in the Nordic countries or England in the 1960s.

I don't know about England, but the Nordic model is that everyone pays rather high taxes. Sweden for example collects more taxes as percentage of GDP than the US, but the US tax code is more progressive.

 

[arkirk]

I am not arguing against "prudence" Loren. I am arguing against the notion your story relates to prudence at all. You just tell that story to keep the stiffs working and sober. Too much work makes Jack a dull boy....like needing to work 15 years to accrue $18,000. That is a pretty dull and dry idea, then you and Max complain this person has no sophistication. I am warning everybody...pay no attention to this story. It is inaccurate and brings early 20th century figures to the table.

What is likely evident to most who read the post, and paid minimal attention to the thread, is "slap your mother" obvious it was not intended to represent any historical era - it was, like the prior widgets example, a heuristic. It was a simplified thought experiment using two fictional individuals. Rather than a simplified example using 100 dollars, I used 10,000 dollars. Rather than widgets, I used beer and Cable TV.

Does it intend to represent 21st century average earnings, of course not (and I am more than a little stunned that you think it so).

Right Max it indeed is about WIDGETS! It also was simplified...ala simpleton. You threw in beer and Cable TV....good now try rent and medical bills, fuel, clothing, food, etc. etc. Your widgets idea is just that one big WIDGET that serves your highly skewed viewpoint. Also throw in savings accounts paying less that 1%. Also throw in unemployment and foreclosures and fees. WE DON'T NEED NO STINKIN' WIDGETS!

 

[maxparrish]

What is likely evident to most who read the post, and paid minimal attention to the thread, is "slap your mother" obvious it was not intended to represent any historical era - it was, like the prior widgets example, a heuristic. It was a simplified thought experiment using two fictional individuals. Rather than a simplified example using 100 dollars, I used 10,000 dollars. Rather than widgets, I used beer and Cable TV.

Does it intend to represent 21st century average earnings, of course not (and I am more than a little stunned that you think it so).

Right Max it indeed is about WIDGETS! It also was simplified...ala simpleton. You threw in beer and Cable TV....good now try rent and medical bills, fuel, clothing, food, etc. etc. Your widgets idea is just that one big WIDGET that serves your highly skewed viewpoint. Also throw in savings accounts paying less that 1%. Also throw in unemployment and foreclosures and fees. WE DON'T NEED NO STINKIN' WIDGETS!

 

[Medicine Man]

That didn't happen in the Nordic countries or England in the 1960s.

I don't know about England, but the Nordic model is that everyone pays rather high taxes. Sweden for example collects more taxes as percentage of GDP than the US.....

....And, it shows....
​

The Stockholm Syndrome I

The Stockholm Syndrome II


​

 

[KeepTalking]

I never said it was the reason for taxation. However, if we must tax, we should focus on the most undesirable things first. I never said anything about whether or not we should tax those who have more income more heavily. Rather, we should focus the taxes on the most undesirable behavior of those who make the most income: consumption. It is possible to have a progressive consumption tax and therefore raise the most revenue from the biggest hogs in society accordingly.

Taxing consumption is not progressive, as poor people use a larger percentage of their income buying things. Taxing things because someone thinks those things are undesirable is bullshit. Who gets to decide what is undesirable, and worthy of additional taxation?

I don't dislike people holding on to wealth. That is not what it is about. The problem is, if I make $100,000 a year, and end up paying out $25,000 a year in taxes, I would expect the guy making $100,000,000 a year to pay $25,000,000 a year in taxes, but he isn't paying anywhere near that. He is maybe paying $15,000,000 a year at most, more likely paying far less.

Except what you describe isn't holding onto wealth.

It very much is holding onto wealth when the rich pay a smaller percent of their income as their income rises.

What you are describing is income earned, which is different. I was specifically referring to people who save their income instead of spending it, which many posters have described as bad/undesirable.

When income is taxed at a lower, or even the same, rate as that income reaches the highest levels, then the people with the highest income have more money to save, and can therefor hold onto more wealth.

No. If it is bad for society for people to use their wealth to do these things, you make it illegal for them to do these things.

That seems pretty totalitarian to cut off people from engaging in the political process that way. I don't think we need to go to such extremes. Especially when it potentially abridges people's freedoms.

You don't cut anyone off from participating in the political process, as participation in the political process is not what is undesirable. You make it illegal for people to spend obscene amounts of money to influence the political process, because it is the amount of money that is being spent to influence the political process that is undesirable.

 

[KeepTalking]

Wealth is potential income and it is certainly a form of income to the recipients.

What part of "already taxed" do you not get?

The part where the middle class has all of their income taxed, and then, because they spend most of that income on necessities, those dollars are taxed again when they buy things with that income.

 

[Jayjay]

Taxing consumption is not progressive, as poor people use a larger percentage of their income buying things. Taxing things because someone thinks those things are undesirable is bullshit. Who gets to decide what is undesirable, and worthy of additional taxation?

There is no tax that would tax everyone equally, so making a value judgment based on who should be taxed more is unavoidable, so we might as well try to target it in somewhat moral way. For example, by taxing the rich more than the poor.

As for consumption taxing not being progressive, that's not necessarily so. It may be harder to implement a progressive consumption tax than it is a similarly progressive income tax, but not impossible. For example, many countries have smaller VAT on food, which itself is a form of progression because poor people spend greater part of their income on food than other items.

You don't cut anyone off from participating in the political process, as participation in the political process is not what is undesirable. You make it illegal for people to spend obscene amounts of money to influence the political process, because it is the amount of money that is being spent to influence the political process that is undesirable.

Define "obscene". It seems hard to put an exact dollar amount on it, so some sort of progression in there would make sense, wouldn't it? Just make it prohibitively expensive to influence politics, rather than just outright prohibit it, because everyone influences politics anyway and drawing the line what is acceptable and what isn't is non-trivial. You don't necessarly need to ban political contributions, just make it so that the rich people aren't so disproportionately represented.

 

[KeepTalking]

There is no tax that would tax everyone equally, so making a value judgment based on who should be taxed more is unavoidable, so we might as well try to target it in somewhat moral way. For example, by taxing the rich more than the poor.

It should have been obvious that the type of moral value judgement to which I refer is not a reference to progressive taxation, but rather things like taxing alcohol, or video games more because someone thinks these things are undesirable.

As for consumption taxing not being progressive, that's not necessarily so. It may be harder to implement a progressive consumption tax than it is a similarly progressive income tax, but not impossible. For example, many countries have smaller VAT on food, which itself is a form of progression because poor people spend greater part of their income on food than other items.

I guess you can implement a consumption tax that is not regressive, but that is not the default state for a consumption tax. I do not, in general, favor consumption taxes over income taxes because of this.

You don't cut anyone off from participating in the political process, as participation in the political process is not what is undesirable. You make it illegal for people to spend obscene amounts of money to influence the political process, because it is the amount of money that is being spent to influence the political process that is undesirable.

Define "obscene". It seems hard to put an exact dollar amount on it, so some sort of progression in there would make sense, wouldn't it? Just make it prohibitively expensive to influence politics, rather than just outright prohibit it, because everyone influences politics anyway and drawing the line what is acceptable and what isn't is non-trivial. You don't necessarly need to ban political contributions, just make it so that the rich people aren't so disproportionately represented.

Prohibitively expensive for who? I'm not sure how you can make anything prohibitively expensive for billionaires. Just make it illegal for anyone to contribute more than a specific amount, and make that amount something that most anyone can reasonably afford. You can even tie that amount to inflation.

 

[Axulus]

Taxing consumption is not progressive, as poor people use a larger percentage of their income buying things. Taxing things because someone thinks those things are undesirable is bullshit. Who gets to decide what is undesirable, and worthy of additional taxation?

Well, several people here have decided that certain things are undesirable. Wealth inequality is undesirable. Regressive taxes are undesirable. Influencing elections with lots of money is undesirable. Polluting the environment is undesirable. I think we pretty much all do this all the time. Not sure why you suddenly find the whole idea of who gets to decide what is undesirable a point worth making when you decide what is undesirable in this very post.

Additionally, you are describing a regressive consumption tax. I specifically said we could implement a _progressive_ version of it.

Also, a consumption tax could utilize progressive rates in order to maintain "fairness." The more that someone spends on consumption, the more that the person will be taxed. The rate structure could look like the current bracket system, or a new bracket system could be implemented.

http://en.wikipedia.org/wiki/Consumption_tax

Read more here:

http://www.forbes.com/sites/timwors...t-tax-system-the-progressive-consumption-tax/

I don't dislike people holding on to wealth. That is not what it is about. The problem is, if I make $100,000 a year, and end up paying out $25,000 a year in taxes, I would expect the guy making $100,000,000 a year to pay $25,000,000 a year in taxes, but he isn't paying anywhere near that. He is maybe paying $15,000,000 a year at most, more likely paying far less.

Except we know this is BS based on the tax data we have available. I've posted about this before.

Regardless, as mentioned previously, you can make my proposal, the progressive consumption tax, as progressive as your heart desires.

It very much is holding onto wealth when the rich pay a smaller percent of their income as their income rises.

Then why didn't you say so instead of just talking about incomes only in the part I responded to?

When income is taxed at a lower, or even the same, rate as that income reaches the highest levels, then the people with the highest income have more money to save, and can therefor hold onto more wealth.

And?

You don't cut anyone off from participating in the political process, as participation in the political process is not what is undesirable. You make it illegal for people to spend obscene amounts of money to influence the political process, because it is the amount of money that is being spent to influence the political process that is undesirable.

Well you'll have to get the constitution amended in that case. The SCOTUS has determined it to be an exercise of free speech. Besides, you'll have to also ban money entering politics the very same from the groups you agree with: unions (by far the biggest campaign funder of the Democratic party), environmental groups, consumer rights groups, anti-war groups, etc. You'll also have to ban people making political movies (these cost money, you know). I guess Michael Moore will be out a job unless he can get everyone to participate in this movie voluntarily. Sounds like you want to kill the patient to remove the cancer.

 

[laughing dog]

Well you'll have to get the constitution amended in that case. The SCOTUS has determined it to be an exercise of free speech.

Or get a better SCOTUS.

Besides, you'll have to also ban money entering politics the very same from the groups you agree with: unions (by far the biggest campaign funder of the Democratic party), environmental groups, consumer rights groups, anti-war groups, etc.

I would be fine with that.

You'll also have to ban people making political movies (these cost money, you know). ..

No you don't. Directly expressing an opinion that no one has to listen to or see is one thing. Giving money directly to politicians is another.

 

[fromderinside]

Well you'll have to get the constitution amended in that case. The SCOTUS has determined it to be an exercise of free speech. Besides, you'll have to also ban money entering politics the very same from the groups you agree with: unions (by far the biggest campaign funder of the Democratic party), environmental groups, consumer rights groups, anti-war groups, etc. You'll also have to ban people making political movies (these cost money, you know). I guess Michael Moore will be out a job unless he can get everyone to participate in this movie voluntarily. Sounds like you want to kill the patient to remove the cancer.

Wow. An abnormal switch from 100 years of constitutional law on a five to four decision requires the constitution to be rewritten. I have a better idea. Elect another democrat in 2016 and get another liberal or two on the court to rectify this business takeover of government. Much better solution.

As for getting groups out of politics all the congress has to do is agree on limiting campaigns to, say, 100 days, prohibiting politicians from doing other than legislative work, and with the aid of new campaign money controls thanks to a democrat's picking of someone other than a legal luddite as justice, we can set the stage for wiping out K street.

We obviously need an income neutral tax that takes into account our negative ownership situation brought on by our acceptance of capitalism. I'm partial to some sort of an assets tax although I don't see a way to make it transparent or for which one can easily comply.

Either we are a functioning nation or a bank. If we are a functioning nation we need to risk debt to provide services people desire and businesses need. Otherwise we're a bank and people will become commodities. Is so so much for democracy.

 

[Axulus]

Or get a better SCOTUS.

Besides, you'll have to also ban money entering politics the very same from the groups you agree with: unions (by far the biggest campaign funder of the Democratic party), environmental groups, consumer rights groups, anti-war groups, etc.

I would be fine with that.

You'll also have to ban people making political movies (these cost money, you know). ..

No you don't. Directly expressing an opinion that no one has to listen to or see is one thing. Giving money directly to politicians is another.

The SCOTUS case didn't address the laws limiting amounts one is allowed to give to politicians directly. It is my understanding that these laws have already been determined to be constitutional. Since we already have such laws, what are people complaining about?

The SCOTUS case specifically referred to a group that made a political movie. The law prohibited it because it was released during a so-called "blackout" period. SCOTUS said no, the movie is protected under freedom of speech laws even though money was spent to make the movie.

 

[Axulus]

Well you'll have to get the constitution amended in that case. The SCOTUS has determined it to be an exercise of free speech. Besides, you'll have to also ban money entering politics the very same from the groups you agree with: unions (by far the biggest campaign funder of the Democratic party), environmental groups, consumer rights groups, anti-war groups, etc. You'll also have to ban people making political movies (these cost money, you know). I guess Michael Moore will be out a job unless he can get everyone to participate in this movie voluntarily. Sounds like you want to kill the patient to remove the cancer.

Wow. An abnormal switch from 100 years of constitutional law on a five to four decision requires the constitution to be rewritten. I have a better idea. Elect another democrat in 2016 and get another liberal or two on the court to rectify this business takeover of government. Much better solution.

As for getting groups out of politics all the congress has to do is agree on limiting campaigns to, say, 100 days, prohibiting politicians from doing other than legislative work, and with the aid of new campaign money controls thanks to a democrat's picking of someone other than a legal luddite as justice, we can set the stage for wiping out K street.

I think the production and release of political movies are exactly the kind of speech the first amendment was designed to protect. The law tried to prohibit the spending of money to make such movies which I think was rightly determined to abridge the freedom of speech of groups who wish to produce such movies.

 

[Trausti]

The SCOTUS case specifically referred to a group that made a political movie. The law prohibited it because it was released during a so-called "blackout" period. SCOTUS said no, the movie is protected under freedom of speech laws even though money was spent to make the movie.

It is striking how many hiss at that decision yet seem to know very little of what it was about.

 

[fromderinside]

Wow. An abnormal switch from 100 years of constitutional law on a five to four decision requires the constitution to be rewritten. I have a better idea. Elect another democrat in 2016 and get another liberal or two on the court to rectify this business takeover of government. Much better solution.

As for getting groups out of politics all the congress has to do is agree on limiting campaigns to, say, 100 days, prohibiting politicians from doing other than legislative work, and with the aid of new campaign money controls thanks to a democrat's picking of someone other than a legal luddite as justice, we can set the stage for wiping out K street.

I think the production and release of political movies are exactly the kind of speech the first amendment was designed to protect. The law tried to prohibit the spending of money to make such movies which I think was rightly determined to abridge the freedom of speech of groups who wish to produce such movies.

Political movies are one thing. Political movies in a political season are quite another. We do regulate political speech during political season quite rationally in order to keep the playing field level for those who want to participate, but, who don't have a dollar platform. Clearly the constitution provides for this contrary to what the five ruled.

The times, places and manner of holding elections for Senators and Representatives, shall be prescribed in each state by the legislature thereof; but the Congress may at any time by law make or alter such regulations, except as to the places of choosing Senators.

from Constitution Article 1 http://www.law.cornell.edu/constitution/articlei /point

 

[KeepTalking]

Well, several people here have decided that certain things are undesirable. Wealth inequality is undesirable. Regressive taxes are undesirable. Influencing elections with lots of money is undesirable. Polluting the environment is undesirable. I think we pretty much all do this all the time. Not sure why you suddenly find the whole idea of who gets to decide what is undesirable a point worth making when you decide what is undesirable in this very post.

Please see my response to JayJay, this is very obviously not what we were talking about, as none of these things would be covered by a consumption tax.

Additionally, you are describing a regressive consumption tax. I specifically said we could implement a _progressive_ version of it.

Consumption taxes are nearly always regressive. If you can come up with a consumption tax that is truly progressive, less byzantine than a progressive income tax, and still bring in the necessary amount of revenue, I would not be averse to it.

Also, a consumption tax could utilize progressive rates in order to maintain "fairness." The more that someone spends on consumption, the more that the person will be taxed. The rate structure could look like the current bracket system, or a new bracket system could be implemented.

Yeah, that's going to be an easy one to implement at the cash register.[/sarcasm]

http://en.wikipedia.org/wiki/Consumption_tax

Read more here:

http://www.forbes.com/sites/timwors...t-tax-system-the-progressive-consumption-tax/

But that’s not the only way to do it and the more advanced ideas for a progressive consumption tax become rather more interesting. What will happen is that everyone fills in a tax form, very similar to the 1040 of today. You record your income, as usual, but all of that income that you have saved is deducted before whatever the tax rate is is applied. You can think of this as being a little like all of your savings, of any type at all, as being in a tax-free 401 (k) if you like. However, all of the money that you’ve taken out of your savings that year is added to your taxable income. Any profits, capital gains, dividends, interest, any of these are treated exactly the same as any other income. If you’ve kept them in savings then they are not taxed: if you’ve taken them out of savings and spent them on consumption then they are added to your other income and taxed at whatever rate.

Seriously, that's your answer? How the fuck is that progressive? You realize that the less income one has, the less they are able to save. So, everyone at the lower end, who cannot afford any savings, and spend every last penny earned on necessities, get everything taxed. No, not this bullshit tax idea from the rich fuckers at Forbes, not ever this.

I don't dislike people holding on to wealth. That is not what it is about. The problem is, if I make $100,000 a year, and end up paying out $25,000 a year in taxes, I would expect the guy making $100,000,000 a year to pay $25,000,000 a year in taxes, but he isn't paying anywhere near that. He is maybe paying $15,000,000 a year at most, more likely paying far less.

Except we know this is BS based on the tax data we have available. I've posted about this before.

Rather than looking at rates, perhaps we should be looking at what the top 1% actually pays. Also, I think we should be taxing people who have incomes in the millions at a higher rate than those who are making $234,700/yr. As the millions they are making get bigger, we should be taxing them even more.

Regardless, as mentioned previously, you can make my proposal, the progressive consumption tax, as progressive as your heart desires.

Your proposal, if it is the one linked in Forbes, is quite honestly shit. I don't see how you can make that progressive in any way. Simply put, the poor do not have savings. The middle class struggles to keep savings.

It very much is holding onto wealth when the rich pay a smaller percent of their income as their income rises.

Then why didn't you say so instead of just talking about incomes only in the part I responded to?

I thought we were having a discussion. Discussions evolve as new thoughts and information are provided.

When income is taxed at a lower, or even the same, rate as that income reaches the highest levels, then the people with the highest income have more money to save, and can therefor hold onto more wealth.

And?

That is the situation we are in. We stop progressing the tax rate after $250,000, when there are people making millions. It is not working, so we need to tax people more as they make more.

You don't cut anyone off from participating in the political process, as participation in the political process is not what is undesirable. You make it illegal for people to spend obscene amounts of money to influence the political process, because it is the amount of money that is being spent to influence the political process that is undesirable.

Well you'll have to get the constitution amended in that case.

That effort is being made. Maybe some day it will happen. More likely the 1% will be hanging in the streets before they allow their pet politicians to let it happen, though.

The SCOTUS has determined it to be an exercise of free speech.

Yes, Citizens United was a travesty. Money is not speech, despite how those conservative justices decided to legislate it from the bench.

Besides, you'll have to also ban money entering politics the very same from the groups you agree with: unions (by far the biggest campaign funder of the Democratic party), environmental groups, consumer rights groups, anti-war groups, etc.

This is where you will need to link to the posts I have made that say that the above groups should be exempt from the same laws (hint: you won't find them).

You'll also have to ban people making political movies (these cost money, you know). I guess Michael Moore will be out a job unless he can get everyone to participate in this movie voluntarily. Sounds like you want to kill the patient to remove the cancer.

I think political movies can still be made, just not those that are supporting or attacking a current candidate for office, and that are actually campaign contributions in disguise.

 

[Axulus]

Seriously, that's your answer? How the fuck is that progressive? You realize that the less income one has, the less they are able to save. So, everyone at the lower end, who cannot afford any savings, and spend every last penny earned on necessities, get everything taxed. No, not this bullshit tax idea from the rich fuckers at Forbes, not ever this.

Only responding to this because I'm short on time (will respond to the rest later). I have to do a huge Picard face palm here. You completely missed the part about brackets, didn't you? You could tax a certain low level of consumption at 0% if you want and any consumption beyond $1M at 99% if you wanted. Come on, at least try to understand the very basics of what you are attacking before you attack it.

 

[KeepTalking]

Seriously, that's your answer? How the fuck is that progressive? You realize that the less income one has, the less they are able to save. So, everyone at the lower end, who cannot afford any savings, and spend every last penny earned on necessities, get everything taxed. No, not this bullshit tax idea from the rich fuckers at Forbes, not ever this.

Only responding to this because I'm short on time (will respond to the rest later). I have to do a huge Picard face palm here. You completely missed the part about brackets, didn't you?

No, I responded to that one separately, as it was a different idea than the one expressed in the Forbes article. Perhaps my use of sarcasm confused you despite my having used the sarcasm tag.

You could tax a certain low level of consumption at 0% if you want and any consumption beyond $1M at 99% if you wanted. Come on, at least try to understand the very basics of what you are attacking before you attack it.

That bears no relation to what was in the Forbes article. If you did not want to talk about what was in the Forbes article, you probably should not have linked to it.

 

[Axulus]

Only responding to this because I'm short on time (will respond to the rest later). I have to do a huge Picard face palm here. You completely missed the part about brackets, didn't you?

No, I responded to that one separately, as it was a different idea than the one expressed in the Forbes article. Perhaps my use of sarcasm confused you despite my having used the sarcasm tag.

You could tax a certain low level of consumption at 0% if you want and any consumption beyond $1M at 99% if you wanted. Come on, at least try to understand the very basics of what you are attacking before you attack it.

That bears no relation to what was in the Forbes article. If you did not want to talk about what was in the Forbes article, you probably should not have linked to it.

Ok, I missed the part about it discussing flat rates. However, it does talk about a certain segment of consumption having a zero rate and then the amount above that taxed at that flat rate. Still possible to have a progressive system with this method, but much more difficult and much less flexible on the magnitude of progressivity.

Regardless, I'm talking about the same proposal except using different rates. I referenced the Forbes article mainly for the conceptual basis. We could play with whatever rates we want with as many brackets as we want and make it as progressive as your bleeding-heart desires.

 

[ksen]

Seriously, that's your answer? How the fuck is that progressive? You realize that the less income one has, the less they are able to save. So, everyone at the lower end, who cannot afford any savings, and spend every last penny earned on necessities, get everything taxed. No, not this bullshit tax idea from the rich fuckers at Forbes, not ever this.

Only responding to this because I'm short on time (will respond to the rest later). I have to do a huge Picard face palm here. You completely missed the part about brackets, didn't you? You could tax a certain low level of consumption at 0% if you want and any consumption beyond $1M at 99% if you wanted. Come on, at least try to understand the very basics of what you are attacking before you attack it.

Unless you have a system that tracks your consumption as you go and has that data available at cash registers when you check out how would the appropriate tax rate get applied as you made purchases throughout the year?

If I buy that $750,000 house I've had my eye on does that count as $750,000 in consumption at the time of sale or would it get prorated over the life of the asset?