JohnR

What is everyone bitching about? Paying taxes is completely voluntary. Don't pay if you don't wanna. Says so right here:
http://www.paynoincometax.com/
So fill out those W-4's and claim 10 no 20 deductions. Uncle Sam can't do a thing to you.

peacenik

The progressive income tax is the only fair tax because it taxes people in accordance with their ability to pay, and it places the heaviest burden on those who have benefited the most under our capitalist system. The Sales tax is regressive and places too heavy of a burden on the poor, who would be paying a much higher percentage of their income in taxes than a wealthy person with the ability to pay. Furthermore, the implementation of a national sales tax to replace the income tax would seriously dampen the economy by causing the demand for consumer goods to plummet. Similarly the property tax can be regressive since many, especially in rural America are land rich and cash poor. Families who have lived on the land for ages may be forced to sale if we implemented a national sales tax. As for a VAT tax, it also suffers from being to regressive, since the tax for goods will be reflected in the final price of the good.

Furthermore, what proponents of a flat income tax don't tell you is that by the time you include regressive state and local taxes as well as social security, which is also a regressive tax since you don't have to contribute any more to the system for income over a certian limit, taxes are virtually even as a percentage of income across the board.

As far as wanting less government, I agree with that on certain things like the waste of money on this Missile defense system that doesn't work, and the vast amount of pork that goes into the budget. However, I do believe that social improvement programs, industrial regulations, educational programs, and environmental regulations are all necessary in order to have a sustainable and viable society.

For those of you who want less government influence in the economy, perhaps you should try living in Mexico. The taxes are low there. There is very little environmental regulation, an extremely low minimum wage(if there even is one), no labor regulations, and no safety net. If libertarian economic ideals are so great and promote so much opportunity, then why are so many Mexicans literally risking their lives to cross the border into the United States, which is certainly far less libertarian in terms of economic principles than Mexico?

excreationist

Are there any countries that have no income tax?

That would mean that taxes would only be on things like properties, and goods and services - and tolls for bridges, etc.

It would mean that people would be taxed equally, so the poor would end up paying more in tax than before and get less stuff for their wages. And the rich (assuming they didn't previously dodge income taxes) would pay less tax and be able to buy even more stuff than before... or reinvest the extra money and become even richer. And maybe the rich would be able to use accountants to dodge most of the taxes in the new tax system - and say things are a business expense or something.

excreationist

What about government TV and radio stations like ABC and SBS (which has international shows)? Should people who don't watch those things have to pay for them? Should they become a PayTV channel or a commercial station filled with lots of ads?
Should the government's funding of local film and arts only come from the minority who watch those things?
Should people only pay for schooling if they're sending kids to school? (If someone is too poor then the kids would either be unschooled and homeschooled then)
Should only people who like to use the local parks and playgrounds have to pay for them?
If you make taxes depend on what individual people want to use it would be fairly expensive to ask every person what they want to pay for, and make sure they aren't using what they aren't paying for.

theyeti

Basically no one. Either Ron Paul knows something the rest of us don't or he's lying. The top marginal tax rate is 39.6% (or rather it was as of 2001; Bush has now lowered it.) Only 0.7% of Americans qualify for it, and these people have an average income of 1.17 million dollars. But due to the lower margins and lower rates for capital gains, they pay 27.4% of their income in taxes. (source) Keep in mind that payroll taxes are an insignificant percentage at higher income levels. The only way someone could be paying more than 1/3 of their income in federal income taxes is to make a shitload of money (many millions in one year) from something other than capital gains. In other words, maybe the CEO of a major corporation, but no one else (and I find it hard to believe that most CEOs wouldn't be tax-savvy enough to protect much of that income). I can see why Ron Paul's heart is bleeding for those poor devils.


:boohoo:

Consumption taxes are fraught with their own problems. Aside from their high regressivity, there would still be loopholes and tax cheats if we went to a national sales tax for instance. (Let's say we decided to exempt food from the 50% tax rate. Suddenly toothpaste and mouthwash are being sold as food.)

theyeti

Loren Pechtel

Yeah, that's the real problem with the current system--too many loopholes. Not only does it make for the rich often not paying what they should, it also makes a BIG business in avoiding taxes. That entire sector of the economy produces *NOTHING* of true value.

I favor an across-the-board consumption tax. EVERYTHING gets taxed, period. It also comes with an automatic check from the government to every citizen (and perhaps permanent residents also, but I'm not sure on that) equal to the tax on existence at the poverty line. In the case of minors the check goes to the custodial parent, or two checks for half the amount each in the case of shared custody (including the parents being married.)

No exemptions of any kind are permitted, the only possible changes are to the check amount. (ie, under the current system, blind people get a bigger standard deduction. Under a consumption tax you don't exempt blind equipment, if you feel the need you increase the check amount for blind people.)

Melkor

Big Business doesn't pay income tax. They just increase prices to maintain their profit margins, passing the added cost of tax onto the consumer. Ultimately WE are the only ones that really pay any income tax.

8of9

I like the sound of that. Do you propose VAT, or flat, or what?

elwoodblues

As per usual, Loren cuts through the crap. Damn find sounding plan.

Loren Pechtel

Flat is income based, not consumption based. It doesn't belong in the picture. Furthermore, I have never gotten a flat tax proponent to explain how it will work with businesses without causing disaster.

The choice is sales tax vs VAT. Personally, I think VAT is more resistant to evasion as it's collected a piece at a time instead of all at once.

It doesn't need to be a big pain to collect--it can be made basically self-enforcing. Have basically no government regulations of how a company handles a VAT, they can calculate it any reasonable way they choose. When stuff is sold business-to-business they simply provide a 1099-VAT to go with it. It shows how much VAT they paid on the goods. They owe that much tax. However, any 1099-VAT's they received can be used as a credit on this tax bill. All the IRS has to do is add up the #'s--if they issue more 1099's than they report the tax man comes knocking. Require it be submitted electronically and the computers can do the whole job other than following up on the cheats and the bad data that inevitably slips through.