taxation

[glatt]

Originally Posted by henry quirk

Implement national and state point of purchase taxes...that is: at every purchase of a product or service there is a tax (say, **15%).

Everyone loses and wins.

In implementation this would amount to a huge increase in taxes for poor and middle class people and a huge decrease in taxes for the wealthy. That's because the poor and middle class live mostly paycheck to paycheck, spending everything that they earn, so they would be taxed on everything. But the rich have extra left over that they can save/invest. The rich wouldn't be taxed on the extra left over. The richer you are, the more you have left over, so you would be paying less and less in taxes as a percentage of your wealth the more wealthy you are.

Your plan would hurt you the poorer you are, and benefit you the richer you are.

[Happy Monkey]

A recipe for aristocracy.

[henry quirk]

"...plan would hurt you the poorer you are, and benefit you the richer you are."

"A recipe for aristocracy."


And this would be different than things are NOW in what way?

I get the whole 'regressive' thing of my proposal, but, consider...

Leave the income tax exactly as it (on all levels) with one crucial difference: anyone making $20,000 or below pays nothing; anyone making $1 million or above pays 90% (state and federal combined) (those folks in-between you can gradate as you like).

The million dollar earner (the lowest amount one can earn and legitimately be considered a 'millionaire') still walks away with $100,000 after taxes.

Changing nothing in the tax system and making it incredibly burdensome on the rich guy still nets the rich guy $80,000 more than the poor guy.

Bump it up to a fellow making 400,000,000 annually: paying 90% (state and federal combined) in taxes and he still walks away with $40,000,000.

*shrug*

My proposal isn't perfect (I never said it was). But -- if equity is the issue -- my proposal is much further down the road to putting the control of taxes in the hands of individuals (which, seems to me, to be the whole point of 'equity').

#

"The rich wouldn't be taxed on the extra left over."

That depends on what you mean by the 'extra left over'.

For example: every investment is a service rendered (pay the tax), the on-going service of a bank (or banks) watching over your money (pay the tax), etc.

Couple the taxes with no exemptions, loopholes, credits, cuts, lower rates based on kind of service or product, and the field gets evener.

Unless rich guy is taking his moola and burying (in many, many, many) coffee cans in his very large back yard, that money will be involved in transactions regularly and, therefore, taxed.

[Happy Monkey]

Originally Posted by henry quirk

"...plan would hurt you the poorer you are, and benefit you the richer you are."

"A recipe for aristocracy."


And this would be different than things are NOW in what way?

By being more so. It would hurt the poor and benefit the rich relative to the current situation.

[henry quirk]

I'm not seeing how it would be 'more so'.

[ZenGum]

Originally Posted by henry quirk

I get the whole 'regressive' thing of my proposal, but, consider...

Leave the income tax exactly as it (on all levels) with one crucial difference: anyone making $20,000 or below pays nothing; anyone making $1 million or above pays 90% (state and federal combined) (those folks in-between you can gradate as you like).

This would create a situation where someone on 990,000 has a strong disincentive to earn more. This should be avoided.

A tweak, if I may:
These numbers are just placholders, both the dollar values and the % rates, using round numbers for simplicity.

The first 20,000 is tax free.
From 20,000 to 100,000 is taxed at 25%
From 100,000 up is taxed at 50%.

Income .......... tax ....... keep ........... effective rate
10,000..............0 ............ 10,000......... 0%
50,000 ............. 7,500 ..... 42,500 ........ 15%
100,000 ........... 20,000 ..... 80,000 ....... 20%
200,000 ............ 70,000 ...... 130,000 ...... 35%


To explain, the guy on 200,000 pays nothing on the first 20,000 earned, then pays 25% on the next 80,000, then pays 50% for the next 100,000. You can tinker with the rates and threshholds to your satisfaction.
The trick is to have the tax rate apply only to the dollars earned above the minimum threshhold for that rate. This delivers a reasonably smooth increase in the effective rate as income increases, without creating a case where a person could earn more but keep less.

[Happy Monkey]

It would take more from the poor than the current system, and less from the rich than the current system.

When you say "the on-going service of a bank (or banks) watching over your money (pay the tax), ", do you mean that the government takes 15% of your savings each year? That would work, to an extent, against aristocracy, but it would also make it virtually impossible for the poor to save money for retirement. It's much easier for a millionaire to make a high rate of return on their money.

[henry quirk]

No. If the bank performs the service of saving your money for you (your savings account) then why *shouldn't the bank charge you for the service?

The cable provider charges you a monthly fee for cable service, doesn't it?

The *15% point of purchase tax is on the cost of the service (the savings account), not the money in the account.


*EDIT








*may be higher or lower...I pulled 15% out of my ass for conversation's sake

[Undertoad]

I still say we can work it out. Exempt food, clothing, rent and mortgage interest. Require a super majority to add exemptions.

Tax consumption, which is bad, rather than income, savings, or investments, which are good. If you create more than you consume, you "win" but more importantly, you automatically build more wealth for the rest of the pool.

[Griff]

Originally Posted by Undertoad

I still say we can work it out. Exempt food, clothing, rent and mortgage interest . Require a super majority to add exemptions.

Tax consumption, which is bad, rather than income, savings, or investments, which are good. If you create more than you consume, you "win" but more importantly, you automatically build more wealth for the rest of the pool.

Agreed except the bit that subsidizes banks... I think... but maybe it would be effective on the regressive taxation front... A consumption tax isn't a bad idea at all.

[TheMercenary]

Progressive taxation in this nation has failed us. Something else needs to be tried, starting with getting rid of most of the IRS and lowering the tax rates for all, including Corps, that WILL create jobs. So far, everyone who has looked at President Zero's Jobs Program, says it it more of the same and will create nothing more than a dent. He is fomenting class warfare in an effort to be re-elected, nothing more, nothing less.

[TheMercenary]

I agree, a limited VAT might need to be part of reform. I would support a minor increase in capital gains tax but not what President Zero is proposing.

[DanaC]

Isnt that how the tax system currently works?

[Aliantha]

Ours is fairly similar.

[Clodfobble]

Originally Posted by DanaC

Isnt that how the tax system currently works?

Not the American one, at least. In the American system, the end-count of your income determines which percentage bracket you're in, and that percentage applies to all of the dollars. So in a pure count with no other factors, a person making $99,900 a year would indeed take home more than the person making $100,000.

But of course there are tons and tons of deductions, which lower the end-count of what counts as your "income," and there are credits, where the government just gives you a certain amount back regardless of what percentage you are at, or whether you even owe that much in taxes in the first place, and there are deferred taxes, and certain types of money taxed at special rates, etc., etc....