Tax question for you guys

[bilby]

They spend on the credit people extend to them based on the faith that their currency will maintain its value.

But tax liabilities are critical because without them there's no particular need for anyone to use the currency. Requiring taxes drives demand for the currency, which gives it value. That's one of its purposes.

Money is more convenient than gold or barter. Paying taxes is a one way it's useful.

Taxes also ensure that the govt can provision itself, by removing purchasing power, or creating "fiscal space".

I don't have the financial acumen to know, but it really seems to be over complicating the function of money and the need for government revenue to fund its operations.

Moody's Analytics provides monthly estimates of the fiscal space of many countries. They define it as the difference between an estimated upper limit of public debt (beyond which action would have to be taken to avoid default) and actual public debt, expressed as a percentage of GDP or equivalently as the difference between the debt-limit-to-GDP percentage and the actual-debt-to-GDP percentage.

Purchasing power and "fiscal space" is a matter of savings and/or cash flow.

So, to say "taxes don't fund anything" is an oversimplification, but it's not entirely untrue.

So its not entirely true either. Not to get nasty but it sounds like when Trump claims he's going to build a wall. There's less to it then it's made to seem.

The point is that you MUST pay taxes; and you may ONLY pay them in US Dollars. So everyone needs US Dollars.

If everybody decided to move to using gold instead, they would not be able to pay their taxes without buying US Dollars for that purpose. Which would render US Dollars valuable. Which would make using gold unnecessary.

 

[Horatio Parker]

They spend on the credit people extend to them based on the faith that their currency will maintain its value.

When colonial powers established a currency, they would send soldiers to tear down your house if you didn't pay.

Money is more convenient than gold or barter. Paying taxes is a one way it's useful.

But the US govt only accepts dollars. True, anyone can issue money. It's just a matter of getting people to accept it. Tax liabilities keep the currency in demand.

Taxes also ensure that the govt can provision itself, by removing purchasing power, or creating "fiscal space".

I don't have the financial acumen to know, but it really seems to be over complicating the function of money and the need for government revenue to fund its operations.

Moody's Analytics provides monthly estimates of the fiscal space of many countries. They define it as the difference between an estimated upper limit of public debt (beyond which action would have to be taken to avoid default) and actual public debt, expressed as a percentage of GDP or equivalently as the difference between the debt-limit-to-GDP percentage and the actual-debt-to-GDP percentage.

Purchasing power and "fiscal space" is a matter of savings and/or cash flow.

No, because we're talking about real goods and services, not money. The govt needs material goods and services to run. Removing purchasing power through taxes ensures there is enough for them to buy.

Offhand, the Moody's use sounds more like credit rating stuff. Purely financial.

So, to say "taxes don't fund anything" is an oversimplification, but it's not entirely untrue.

So its not entirely true either. Not to get nasty but it sounds like when Trump claims he's going to build a wall. There's less to it then it's made to seem.

I wouldn't say that either. In the case of taxes that are directly connected to something, like SS, it's obviously true that taxes fund spending. But in a larger sense, taxes don't fund anything in particular. There's no way, AFAIK, to say which funds are tax derived and which are deficit spent.

 

[bilby]

When colonial powers established a currency, they would send soldiers to tear down your house if you didn't pay.



But the US govt only accepts dollars. True, anyone can issue money. It's just a matter of getting people to accept it. Tax liabilities keep the currency in demand.

Taxes also ensure that the govt can provision itself, by removing purchasing power, or creating "fiscal space".

I don't have the financial acumen to know, but it really seems to be over complicating the function of money and the need for government revenue to fund its operations.

Moody's Analytics provides monthly estimates of the fiscal space of many countries. They define it as the difference between an estimated upper limit of public debt (beyond which action would have to be taken to avoid default) and actual public debt, expressed as a percentage of GDP or equivalently as the difference between the debt-limit-to-GDP percentage and the actual-debt-to-GDP percentage.

Purchasing power and "fiscal space" is a matter of savings and/or cash flow.

No, because we're talking about real goods and services, not money. The govt needs material goods and services to run. Removing purchasing power through taxes ensures there is enough for them to buy.

Offhand, the Moody's use sounds more like credit rating stuff. Purely financial.

So, to say "taxes don't fund anything" is an oversimplification, but it's not entirely untrue.

So its not entirely true either. Not to get nasty but it sounds like when Trump claims he's going to build a wall. There's less to it then it's made to seem.

I wouldn't say that either. In the case of taxes that are directly connected to something, like SS, it's obviously true that taxes fund spending. But in a larger sense, taxes don't fund anything in particular. There's no way, AFAIK, to say which funds are tax derived and which are deficit spent.

Sure there is. Programs and services that I like are paid for by taxes; Programs and services that I dislike are paid for through deficits, and we therefore cannot afford them so they must stop.

 

[Loren Pechtel]

Since it is approaching tax season, I am curious if anyone on here calculates their tax bill to maximize the amount of taxes you have to pay? For example, do you calculate the difference between itemizing and standard deductions and then pay Uncle Sam the highest of the two?

Ah, another brilliant question from the "all taxation is theft" crowd. Follow up question: when are you going to move to a cabin in the woods and write a manifesto?

He's not saying all taxation is theft. He's saying taxation for the purpose of redistribution is theft. Tax the rich so they aren't rich is nothing but armed robbery.

Taxes should be levied to do what government needs to do and distributed with regard to people's ability to pay--low at low incomes (while many say the poor shouldn't pay tax I don't like that--I think everyone should pay some tax so they have skin in the game) and higher at higher incomes.

- - - Updated - - -

How is rent not productive? They are providing something that is valuable to other people? To get income you have to do something that other people in society consider productive.

Rent isn't productive because it doesn't add anything. Not a good or a service. Just a charge(beyond expenses of course).

Land is the classic example.

Land is a special case as it already exists. Everything else you rent has to be created--the rent is paying the creator of the item for creating it and the renter for keeping it up.

 

[bilby]

He's not saying all taxation is theft. He's saying taxation for the purpose of redistribution is theft. Tax the rich so they aren't rich is nothing but armed robbery.

No it's not. But even if it was, it doesn't happen, so we needn't worry about it.

Name ONE person who was rich, but who became not-rich due to taxation.

I can think of lots of people who became not-rich due to poor business decisions; or bad luck. But nobody who was taxed into poverty. Taxes don't work like that, they never have and they never will.

Taxes should be levied to do what government needs to do

No. Taxes are in no way required in order for government to do what it needs to do. You are basing your entire position on a false assumption.

and distributed with regard to people's ability to pay--low at low incomes (while many say the poor shouldn't pay tax I don't like that--I think everyone should pay some tax so they have skin in the game) and higher at higher incomes.

It is futile to levy taxes against people who receive an income directly from government. You can do it, if it makes you feel better, or where it improves efficiency, but it is ultimately meaningless.

 

[Treedbear]

... It is futile to levy taxes against people who receive an income directly from government. You can do it, if it makes you feel better, or where it improves efficiency, but it is ultimately meaningless.

It's necessary with a progressive tax system where the tax rate is based on annual income and/or when a person's income can come from many sources.

 

[Horatio Parker]

Rent isn't productive because it doesn't add anything. Not a good or a service. Just a charge(beyond expenses of course).

Land is the classic example.

Land is a special case as it already exists. Everything else you rent has to be created--the rent is paying the creator of the item for creating it and the renter for keeping it up.

So you argue that rent seeking is productive.

Say when a road is privatized, how is the owners profit, beyond upkeep of course, productive as opposed to a public road where no one collects rent?

 

[bilby]

... It is futile to levy taxes against people who receive an income directly from government. You can do it, if it makes you feel better, or where it improves efficiency, but it is ultimately meaningless.

It's necessary with a progressive tax system where the tax rate is based on annual income and/or when a person's income can come from many sources.

Certainly it is more efficient in such a system. It's not strictly necessary though.

 

[laughing dog]

He's not saying all taxation is theft. He's saying taxation for the purpose of redistribution is theft. Tax the rich so they aren't rich is nothing but armed robbery.

Please provide data on those countries that tax the rich so the rich are not rich after taxes.

Taxes should be levied to do what government needs to do

Many people think redistribution is something government needs to do.

 

[Politesse]

If the wealthy wish to avoid a higher tax burden, they could always pay their workers more directly, thus reducing the pressure to rely on the government for basic services. If the 15% the country weren't eligible for food stamps, there'd be less demand for the things. If they want to hold on to their bucks and live fabulous, depressing lives of luxury, Uncle Sam is going extract whatever is needed to keep his programs going.

 

[Loren Pechtel]

Rent isn't productive because it doesn't add anything. Not a good or a service. Just a charge(beyond expenses of course).

Land is the classic example.

Land is a special case as it already exists. Everything else you rent has to be created--the rent is paying the creator of the item for creating it and the renter for keeping it up.

So you argue that rent seeking is productive.

Say when a road is privatized, how is the owners profit, beyond upkeep of course, productive as opposed to a public road where no one collects rent?

Roads are pretty close to land.

 

[Horatio Parker]

So you argue that rent seeking is productive.

Say when a road is privatized, how is the owners profit, beyond upkeep of course, productive as opposed to a public road where no one collects rent?

Roads are pretty close to land.

Evasion noted.

How about monopolies charging excessive prices? Rent extraction yes or no.

 

[bilby]

So you argue that rent seeking is productive.

Say when a road is privatized, how is the owners profit, beyond upkeep of course, productive as opposed to a public road where no one collects rent?

Roads are pretty close to land.

As are houses, factories, factory equipment...

It's almost as though you didn't have a leg to stand on.

 

[Loren Pechtel]

No it's not. But even if it was, it doesn't happen, so we needn't worry about it.

There are many on the left that want to do it, though.

 

[Loren Pechtel]

So you argue that rent seeking is productive.

Say when a road is privatized, how is the owners profit, beyond upkeep of course, productive as opposed to a public road where no one collects rent?

Roads are pretty close to land.

As are houses, factories, factory equipment...

It's almost as though you didn't have a leg to stand on.

No. Most of the cost of a factory is the building and equipment, not the land.

 

[bilby]

No it's not. But even if it was, it doesn't happen, so we needn't worry about it.

There are many on the left that want to do it, though.

Only if you are living about a century ago. Or you have a VERY liberal definition for the word 'many'.

 

[Loren Pechtel]

No it's not. But even if it was, it doesn't happen, so we needn't worry about it.

There are many on the left that want to do it, though.

Only if you are living about a century ago. Or you have a VERY liberal definition for the word 'many'.

I've seen multiple people on here express the idea.

 

[Jason Harvestdancer]

Well, I don't go out of my way to set up a corporation in Bermuda to run my all of my income through, but generally I take the deductions to which I'm entitled.

When you buy a flat screen TV or iphone X do you throw in an extra $100 or do you pay what's on the price tag? (the question has the same relevance).

aa

With coloradoatheist's question you are sending it to that source of virtue the government. If you buy a flat screen TV you are giving your money to an evil corporation, in their corporation buildings, doing corporation stuff.

 

[Alcoholic Actuary]

Well, I don't go out of my way to set up a corporation in Bermuda to run my all of my income through, but generally I take the deductions to which I'm entitled.

When you buy a flat screen TV or iphone X do you throw in an extra $100 or do you pay what's on the price tag? (the question has the same relevance).

aa

With coloradoatheist's question you are sending it to that source of virtue the government. If you buy a flat screen TV you are giving your money to an evil corporation, in their corporation buildings, doing corporation stuff.

I don't consider the government a 'source of virtue'. I merely understand the need to be reimbursed for products/services rendered. When the bill comes, I pay it. I don't offer more - be it the government or corporation.

aa