Rather, “Taxation is how we get the money we need to run the country and to provide all the services we consume.”
We the people, muvvahfuggah. REPREZENT. <throws down mic>
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No - this particular cases holds particular inferences specifically because it is a dead citizen’s estate. By your description, any and all taxes the government may feel like imposing are, at core, good because those who are taxed are presumed to benefit from the State’s very existence.
I never at any point decried any and all taxation. In fact, I specifically supported either flat tax or VAT, right? Under those methods, the basis has no meaning. The sale of inherited property is no different from the sale of any other property, and capital gains goes bye-bye. Not nice for various CPAs - but excellent in terms of equality and parity. The fact that present system is incredibly arcane and inept doesn’t justify adding to the pile.
I became interested in the issue because I was one married to someone who had been audited. The audit was attended, and verbal assurance given that everything was ok. He then moved, and by the IRS’s own records, the mail never reached him which claimed he owed additional taxes. Then comes the penalties and interest. Several years later, unbeknownst to him or to me, I marry him, and several years after that, the IRS suddenly swipes MY personal income tax refund (filed separately) because they claimed HE owed some taxes.
What they did was counter to both the law and their own regulations - I had no liability for something he was involved with before I ever even knew him. The mess was years in the making, and years in the unraveling. But at the time, my employment relied on getting my car repaired, and that refund was the only way I had available to pay for the repairs. Even once I learned the deal and the IRS was informed and even admitted their error, their only response was, “Gee. Sorry about that. Better luck next time!” So, I took it very, very seriously indeed! And became interested in how taxation actually works (and doesn’t work) and how it is governed. And, with a decided bent toward how tax policies actually directly affect those taxed. It’s not enough to say, “Well, obviously it takes money to run the government.” Does it adhere to principles, and does it actually avoid harm to the people taxed as well as The People in general? If it can’t meet those tests, it’s by definition a bad tax.
There is ALWAYS another way. If there wasn’t, we wouldn’t even be talking about how some people avoid getting taxed at all, right?
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Thank you, Michael! Well said.
Dead people with large estates are also presumed to have benefited from the state. Evidence of this benefit would be the wealth they have been able to accumulate. Arguably it is more fair to tax these people who have already benefited than it is to tax people before they have benefited.
Flat taxes and VAT are good for equality and parity? Huh?
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regressive taxes = god’s work
progressive taxes = teh ebul
or sumfink.
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It is astonishingly hard to financially harm (or any other kind of harm, for that matter) dead people.
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121 billion is a significant amount of money to the global economy.
Actually, not really. That’s just under 13 days Federal spending at the current burn rate.
Source: http://www.usfederalbudget.us/federal_budget_estimate_vs_actual_2013 and then doing the math. . . .
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If I were to win a lottery jackpot of say $100,000, I would only get around $70,000 after taxes. Do I bitch and moan about this “winners tax” that “penalizes you for being a winner?” I realize that this is the argument people use against the graduated income tax-- the more you earn the more you pay, it “penalizes the successful”, except if you use that logic then shouldn’t we be penalizing the poor with higher taxes to encourage them to be successful? Why, if we tax the very poor at 100% then they’ll wise up quick and pretty soon they’ll be millionaires! Maybe this means the “death tax” is a good thing, if we penalize people for dying then we can encourage them not to die in the first place!
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So now you’re supporting State-mandated personal debt incursion? As if every breath we take racks up some kind of indebtedness to the State, such that by the time we croak, we’ve got a personal deficit to go with the federal deficit? Holy crap, man - you should work on Wall Street! They’d love that rationale! I can just see it now - personal indebtedness accounts being sold and repackaged and re-sold, until one day the Marshalls show up to evict you from your over-financed bottom-up body, lol.
I wouldn’t support flat taxes AND VAT. I prefer the flat tax idea. One or the other would do just fine. If I should acquire more stuff through inheritance under a flat tax, I just pay my personal taxes on it as income. Unfortunately, the last time anybody got serious about that, Ronald Reagan got elected instead, and we all still reek of what his economic philosophy was ‘trickling’…
Are you just making things up, now? I didn’t say anything even closely resembling this.
You still haven’t explained how either of these is “excellent in terms of equality and parity.”
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Of course not. You said it. I merely rephrased it, lol.
The equality and parity part is simple. At a flat percentage, one pays according to one’s ability to pay, period. No options. The SD thing wouldn’t exist, because it couldn’t. All shares of tax burden are distributed in parity with income, the porr do no assume a larger proportional burden, and the rich don’t get to escape their responsibility. Oh - and the dead don’t do anything at all, because they’re dead. (Sorry, graverobbers everywhere.) If the GNP grows, so does the tax base. What part of that do you not grasp?
People gripe because SD has built a way around a federal tax. Why did SD do that? Because, people don’t like getting taxed very much, so there’s a market for their services. Why do some object to SD’s actions? Because, they’re not getting some of it themselves. Obviously, they also don’t like the fact that they pay, while others do not. The problem still isn’t SD. The rich don’t pay as much anyway, due to many other shelters and loopholes. I hear no one complaining about that, but if you think for 2 seconds those outs wouldn’t be used even more creatively… But, a flat tax solves the problem from those angles, as well.
What is your problem with that?
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If you want to claim you rephrased something, show me what you rephrased. Because from where I stand you’re just making things up.[quote=“AliceWeir, post:117, topic:17881”]
The equality and parity part is simple. At a flat percentage, one pays according to one’s ability to pay, period.
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Well, the poor have a much lower ability to pay, obviously, so you’re not really paying according to your ability to pay. There’s also the problem of the marginal utility of money, which basically says that $1 means a lot more to someone who has no money and is homeless than it does to someone like Bill Gates. Since money is economically useful only as a proxy for utility, why not tax according to the utility of money? Wouldn’t that also be consistent with equality and parity? I think so, and it would not look too much different from current graduated tax rates. Also note that under the current tax regime that if the GNP grows, so does the tax base. What part of that do you not grasp?
(I assume you are in favour of eliminating payroll taxes, etc., as otherwise the poor will actually end up paying a greater percentage of their income in taxes than the rich.)
And if you really want equality and parity, why not institute 0% tax during one’s life, but a 100% tax upon death? Combine that with a 100% gift tax and you would have the ultimate in equality: people start from a much more level playing field and cannot gain from the wealth of their relatives and friends. Parity + equality!
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Check back. You said it s was more fair to tax people who have already benefitted, not me. By your logic, the very fact that I accumulated anything at all automatically creates a ‘debt to society’.
I understand relative value just fine, thanks. So, we have to define ‘accumulate’. If I am living hand to mouth, I am accumulating nothing at all, if you don’t count contributions to the local sewage system. So no, a payroll tax wouldn’t work, short of a poverty-level cut off. You’re confusing ‘income’ wth ‘accumulation of income’.
I’ve heard the 100% reversion idea before. I could see a possible benefit in that people might like to give away what they have rather than have it trapped by the state at their death. But - level playing field? Not gonna happen. The offspring of that rich guy got a better education, and had the advantage of seeing other possibilities without having to wear a maid’s uniform. They’ll just do what they already know to do, and the poor will keep right on being poor. Nothing claimed to increase literacy rates or reduce the poverty levels in this country have worked - if anything, the reverse. Yet you guys keep right on arguing it as if it had, or will any second now.
Sure I said that. So how does that get “paraphrased” into the statement that “every breath we take racks up some kind of indebtedness to the State, such that by the time we croak, we’ve got a personal deficit”? It’s not the breathing that is taxed, but the accumulation of wealth. Wealth that is accumulated by transactions and appreciation—both of which are already taxed—and not by breathing.
And by your logic the act of getting income creates a debt to society which is taxed. I’m not sure I see the difference that you do.
Why do we have to do that? Marginal utility is a relevant concept whether you are taxing wealth or income. Yes, it’s best controlled for if you take wealth into account, but it’s still useful even if you don’t. Regardless, what marginal utility does show (and is the reason why I first brought it up) is that flat taxes have nothing to do with equality or parity, which was your claim.
100% estate taxes and 100% gift taxes will not completely level the playing field, but they will do a lot more for equality and parity than your flat-tax will. Large-scale inter-generational transfers of wealth will be eliminated, something which will likely require the development of more robust social welfare institutions, which will be used by the descendants of both formerly-poor and formerly-rich families.
And it’s good to know that things like universal free education and the New Deal did nothing to increase literacy rates or decrease poverty, though I’m not sure how this is relevant.
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You are semi-correct. I should probably have said ‘parodied’.
There’s nothing in your apparent support of the status quo that makes any difference to anything at all. There is no parity now - the wealthy simply escape the tax laws one way and another, while mainly the middle-class pays, and the government itself incurs mounting debt. Probably, no one still living or dead has acquired the kind of wealth that could pay for that, on any terms at all.
The only point to a flat tax is that it eliminates those loopholes, and the wealthy are prevented from using said wealth to avoid the burden of taxes at all. Gift taxes go away. Estate taxes go away. Breaks for creating foundations that do nothing but provide tax breaks go away. All of it.
The New Deal didn’t increase literacy rates, and didn’t erase poverty by a long shot. It’s arguable that it improved it not even a little. The cycle didn’t break because of the New Deal. It ended when WWII broke out and a booming defense industry provided all the employment and business opportunities that go with such events. (Of course, it also got an awful lot of otherwise-productive people killed, but that’s what happens when the government creates a draft and tells people they ‘owe’ their service.)
I see. Your preferred tax alternative somehow eliminates all loopholes, because magic. But under anybody else’s proposed alternative the loopholes still exist for some reason. That’s certainly principled. And 0% taxes during life and 100% estate and gift taxes = the status quo? Right.
If you really wanted to eliminate loopholes, you could work to eliminate loopholes. There’s nothing that requires a regressive flat tax in order to eliminate loopholes, and under any realistic projection of how a flat tax would work there there would still be loopholes. For example, eliminating the tax-free status of certain institutions and tax deductibility of donations thereto would be very unpopular and difficult to pass, as would be mortgage interest deductions, etc.
First, I didn’t claim that the New Deal increased literacy, nor did I claim it erased poverty. I specifically mentioned universal free education and spoke of decreasing poverty. If you’re not willing to have an honest conversation (and being fundamentally dishonest in what you appear to regard as a serious conversation is very different than parodizing something), I’m not sure why anyone should give any weight to anything you say.
Right. Structural reforms like the Securities Acts of 1933 and 1934, the Social Security Act, the Fair Labor Standards Act and the NLRA have done absolutely nothing for the common man, act as a bulwark against the rich, nor helped reduce poverty.
And of course tangible and immediate programs like unemployment benefits, food stamps, crop insurance, and infrastructure investment did absolutely nothing to help people both then and in the future, either.
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Jeez - make up our mind already! Either loopholes disappear (requiring zero magic), or imaginary ‘anybody else’s’ does have loopholes, or else 100% death tax, which you now claim you support as the best-possible alternative, where before you mentioned it as purely argumentative. I have arrived at the conclusion that you don’t actually know what you think - you merely dislike what I think.
You rassertion regarding necessity for loopholes with a flat tax is patently and provably ridiculous. sales taxes are flat taxes, sans loopholes. They work just fine - no magic required. You say it would all be incredibly unpopular, but the last time a major candidacy espoused it, it was quite popular - simply not a majority.
‘fundamentally dishonest’ sounds just about exactly like you are calling me a liar. And you still think the New Deal created free education? Sorry - not on this planet. You are, however, personally offesive. Conversation over. Good day to you.
perspective noted. money is significant to the last digit… so 3,454.3 billion for 2013… the point three representing 300 million. that’s just the united states federal budget i agree, but it still seems like they consider a billion significant.
Where did I say the New Deal created free education? Show me where I said that. Learn to use the quote button or simply copy and paste. I’ll even do it for you—here’s what I said:
And it’s good to know that things like universal free education and the New Deal did nothing to increase literacy rates or decrease poverty, though I’m not sure how this is relevant.
This is an example of you being dishonest.[quote=“AliceWeir, post:123, topic:17881”]
You rassertion regarding necessity for loopholes with a flat tax is patently and provably ridiculous. sales taxes are flat taxes, sans loopholes.
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So your flat tax would be a flat tax imposed on every single dollar that is earned, from the first to the last? And capital gains would also count as income? And there would be no payroll taxes, etc (your last answer on this was very confusing)? And no sales taxes? And no property taxes? And absolutely no tax deductions, credits, or exemptions? And what about fees for government services? Are these differentiated from taxes? When will things like stock options and pension benefits be taxed: at the time they accrue or the time they are realized? Same question for capital appreciation? There are lots of other loopholes like this that would need to be addressed, and simply saying “flat tax” doesn’t address them…
So to close loopholes and accomplish these things you will have to rewrite the tax code. You may have to burn everything to the ground and start over in order to get rid of these loopholes you hate, but once you’re at the scorched-earth stage there there’s no reason to simply go with a flat tax. You could have a graduated tax without any loopholes, either.
Really? Last time I checked, sales taxes are not flat. Different product groups have different sales tax. Some things (like food) have no tax, while other things are taxed at different rates. Restaurant taxes, hotel taxes, clothing taxes, and junk food taxes may all be different. The tax rates themselves may differ depending on the price of the item being purchased (more expensive clothes may be taxed at higher rates in some places). And yet you don’t seem to think there are any loopholes with sales taxes: surely this shows you can have different tax rates without loopholes…
I don’t think that 100% estate and gift taxes are the best alternative from a practical perspective, mainly because of the incentives they create, but I do think they are a better theoretical alternative than what you are proposing. And yes, I guess that is a measure of how much I dislike what you think: it’s hugely regressive system being advocated in the name of a problem it is not itself the solution to.
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“[the dead] may as well give some of it back to the government who provided the opportunities and environment”
Amazing, “BACK”? No, the opportunities did not come from government - they came from one’s hard work and people one did business with.
The environment government provided for all that is worth something as far as enablement goes (though what of government measures that are actively hostile? what about non-governmental preconditions for modern life?). A de-facto price/value tag for those is, at most, the amount of taxes one pays, which is <100% even at the top end. (A real market price/value tag for government services is impossible because participation is compulsory.)
