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The Best Tax Proposal in the History of the World

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  • The Best Tax Proposal in the History of the World

    I just had to use that superlative, especially given my recent rant against superlatives.

    I have a proposal for the simplest tax system in the world, and was wondering what people think of it. I'll describe it and list my justification for each element:
    • Eliminate all sales taxes (they won't be necessary).
    • Eliminate all business taxes (if the profits of a company are taxed, and then they are taxed again when disbursed as dividends, it is double taxation - we don't need business taxes)
    • Tax ALL forms of income equally (there is no rational basis for taxing interest/dividend/investment income differently than other forms of income)
    • Eliminate ALL forms of deduction (that includes charities, mortgages, child credits, everything - they promarily serve as tools for people to avoid taxation)
    • Establish a single cost-of-living deduction for three types of return: individual, married, family (more on this below)
    • Tax the surplus above this deduction at the same rate for all income levels (this rate to be set based on the government budget for the tax year and must be set to avoid a deficit - it is adjusted annually)


    With this approach, we really could all file our taxes on a postcard. Most of the tax filing could be automated, and the IRS could be stripped to a shadow of itself. If state/local taxes used the same model, all taxation would be simplified.

    The single deduction is to allow each person/couple/family to be free of taxation for that part of their salary needed for basic cost of living (food, shelter, health, clothing, etc.). The deduction might need to be regionally adjusted to allow for the variations in cost of living in different parts of the country - or set to a single level that matches to the area with the highest cost of living. I prefer the latter (it will encourage people to relocate to areas with a lower cost of living). The indidividual and couple are simple: they are for a single person or a married couple. The family one is set to allow for a family of four. Two children is basically the replacement rate for population stabilization. Coupled with immigration, it ensures our country's health. If it looks like we need to encourage more births, it could be adjusted to five. If it looks like population growth is too aggressive, it could be adjusted to one. It provides an incentive for population adjustment without a law saying "one child only," etc. Bottom line, if someone wants a bigger family, they are free to, but the rest of us would no longer required to pay their tax bill because of that choice.

    As for tarriffs - take a very simple model: our import tarriffs for any given country are set to match their import tarrifs from us. Same with export tarriffs. All countries, no exceptions.

    So - comments?
    Last edited by carpedm9587; 01-03-2018, 05:53 PM.
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

    I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

  • #2

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    • #3
      Personally, I'm exactly the opposite. I would prefer to eliminate all Income Taxes both personal and Business and ONLY have Sales Tax. Unless I'm mistaken, all states already have a State Sales tax, so the system is already in place. They collect the National sales tax along with the state sales tax and forward the US portion to the Feds. We don't file ANY tax returns ever again!
      "What has the Church gained if it is popular, but there is no conviction, no repentance, no power?" - A.W. Tozer

      "... there are two parties in Washington, the stupid party and the evil party, who occasionally get together and do something both stupid and evil, and this is called bipartisanship." - Everett Dirksen

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      • #4
        Originally posted by carpedm9587 View Post
        As for tarriffs - take a very simple model: our import tarriffs for any given country are set to match their import tarrifs from us. Same with export tarriffs. All countries, no exceptions.

        So - comments?
        Pretty dumb tariff model. How many countries export the same thing they import? How does this solve the problem with third world countries skirting labour/environmental laws american producers cannot avoid (and the resulting drop in price)?

        I also oppose getting rid of double taxation. Dividends are taxed separately because corporations are their own legal entities. It's like saying your boss shouldn't be taxed because you got taxed already.
        "As for my people, children are their oppressors, and women rule over them. O my people, they which lead thee cause thee to err, and destroy the way of thy paths." Isaiah 3:12

        There is no such thing as innocence, only degrees of guilt.

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        • #5
          Originally posted by Littlejoe View Post
          Unless I'm mistaken, all states already have a State Sales tax, so the system is already in place.
          There are five states without a state sales tax: Delaware, Montana, Oregon, New Hampshire, and Alaska. Well, technically you can be charged a sales tax in Alaska, but it's individual municipalities that do it, so there is still no statewide tax.

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          • #6
            Fair Tax
            Micah 6:8 He has told you, O man, what is good; and what does the LORD require of you but to do justice, and to love kindness, and to walk humbly with your God?

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            • #7
              Originally posted by Littlejoe View Post
              Personally, I'm exactly the opposite. I would prefer to eliminate all Income Taxes both personal and Business and ONLY have Sales Tax. Unless I'm mistaken, all states already have a State Sales tax, so the system is already in place. They collect the National sales tax along with the state sales tax and forward the US portion to the Feds. We don't file ANY tax returns ever again!
              With the same tax exemptions for things like milk and groceries and stuff, I presume?
              The first to state his case seems right until another comes and cross-examines him.

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              • #8
                Originally posted by carpedm9587 View Post
                [*]Eliminate all sales taxes (they won't be necessary).
                I don't like sales taxes, so I'm with you on this. They are administratively complex to comply with, and they fall far more on the poor more than the rich (e.g. if a poor person lives paycheck to paycheck and spends 100% of their income weekly, then a 10% sales tax is equivalent to +10% income tax for them. But if a rich person saves 99% of what they earn and only spends 1% of their income weekly, the 10% sales tax is equivalent to +0.1% income tax for them). This is why the mega-rich would love to have only a sales tax (e.g. the "fair tax" system) so they basically don't have to pay any tax at all.

                [*]Eliminate all business taxes (if the profits of a company are taxed, and then they are taxed again when disbursed as dividends, it is double taxation - we don't need business taxes)
                Disagree. For one, rich people and companies are very good at avoiding taxes, so if the government tries to tax the same money twice they are more likely to actually get some of it at least one. Also companies can do a number of complex things with profits (stock buy-backs etc) that differ from dividends but which have the effect of transferring wealth to their shareholders. Also companies can have overseas shareholders who's dividends aren't taxed so if you are going to tax the money you need to do it when the company makes it. Also company taxes (on larger companies anyway) are a nifty source of government revenue because it doesn't upset people as much as income taxes do where they can see you taking it from them.

                [*]Tax ALL forms of income equally (there is no rational basis for taxing interest/dividend/investment income differently than other forms of income)
                I used to think that, so I thought capital gains taxes should be equal to income taxes. Now I have come to think they should be a lot higher than income taxes. Consider it this way: If a person works hard all day at their job and earns an income from their employer, did their efforts have the same social value as if they'd sat on their behind and twiddled their thumbs all day while assets they happened to own increased in value by the same amount as the stock market went up? Why should the government tax a person's hard work as highly as they tax a person who gains the same amount of money by not working at all? One is contributing to society and the other is a parasite on society. I see no reason not to put capital gains / interest / dividends / investment taxes up to ~90%. They certainly should be higher than income taxes.

                [*]Eliminate ALL forms of deduction (that includes charities, mortgages, child credits, everything - they promarily serve as tools for people to avoid taxation)
                Agreed. The tax system here has very very few deductions (like literally three), and it makes everything soooo much easier. The US tax system seems absurdly complex to me primarily because of deductions and loopholes.

                [*]Establish a single cost-of-living deduction for three types of return: individual, married, family (more on this below)
                This seems to make sense primarily in terms of your proposed fixed rate of taxation for all income levels. I am quite happy with the idea of 0% tax paid below a certain income threshold calculated based on cost-of-living.

                [*]Tax the surplus above this deduction at the same rate for all income levels (this rate to be set based on the government budget for the tax year and must be set to avoid a deficit - it is adjusted annually)
                1000% nope. The same rate for all income levels, rather than a progressively increasing rate based on income like all Western countries currently have? That would just pour money into the hands of the rich. The wealthy mega-donors would looooove it, everyone else not so much because everyone else's tax rates would have to go up massively to compensate for your removal of high-income tax brackets. People complain about income inequality/wealth inequality now, but your system would increase it by an order of magnitude or more.

                What is wrong with the existing progressive tax brackets (i.e. on the first ~$10k you pay 10%, on the next ~$30k you pay 12%... etc and the money you earn over $500k you pay 37%)? I mean you could adjust the brackets and the numbers to your heart's content (personally I would have 0% on the first ~$15k and ~90% on earnings over $500k) but what is wrong with having brackets and different percentages? If there is a Western country that doesn't do it this way, I'm not aware of it.
                "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
                "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
                "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

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                • #9
                  Well, you have Starlight arguing intensely against your proposal, so that's got to be worth at least a few points in your favor.


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                  • #10
                    Even easier:

                    funny-tax-form.jpg

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                    • #11
                      Flat tax on income only, everybody pays the same percentage across the board, no deductions, no loopholes, and no "refunds" to those who don't pay taxes. That would be a good start.
                      Some may call me foolish, and some may call me odd
                      But I'd rather be a fool in the eyes of man
                      Than a fool in the eyes of God


                      From "Fools Gold" by Petra

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                      • #12
                        Originally posted by Cow Poke View Post
                        With the same tax exemptions for things like milk and groceries and stuff, I presume?
                        I would prefer a nominal tax on necessities so everyone contributes a little bit.
                        Enter the Church and wash away your sins. For here there is a hospital and not a court of law. Do not be ashamed to enter the Church; be ashamed when you sin, but not when you repent. – St. John Chrysostom

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                        • #13
                          Originally posted by One Bad Pig View Post
                          I would prefer a nominal tax on necessities so everyone contributes a little bit.
                          And that shouldn't be hard to implement at all.
                          The first to state his case seems right until another comes and cross-examines him.

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                          • #14
                            Originally posted by carpedm9587 View Post
                            I just had to use that superlative, especially given my recent rant against superlatives.
                            Not bad, better than what we have now. Of course rationality doesn't often play into the tax code these days...
                            Atheism is the cult of death, the death of hope. The universe is doomed, you are doomed, the only thing that remains is to await your execution...

                            https://www.youtube.com/watch?v=Jbnueb2OI4o&t=3s

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                            • #15
                              Originally posted by Littlejoe View Post
                              Personally, I'm exactly the opposite. I would prefer to eliminate all Income Taxes both personal and Business and ONLY have Sales Tax. Unless I'm mistaken, all states already have a State Sales tax, so the system is already in place. They collect the National sales tax along with the state sales tax and forward the US portion to the Feds. We don't file ANY tax returns ever again!
                              Unfortunately, that does not safeguard "cost of living" income. The extremely poor would be taxed at the same effective rate as the extremely rich. I think we have to have a system that allows each person to earn and keep a "living wage" without fear of taxation, and run our country on the excess - the "nice to haves" rather than the "have to haves."
                              The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                              I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

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