From www.fairtax.org :
The FairTax:
Abolishes the IRS
Maintains our current Social Security and Medicare benefits
Brings transparency and accountability to tax policy
Allows American products to compete fairly
Reimburses the tax on purchases of basic necessities
Enables retirees to keep their entire pension
Enables workers to keep their entire paycheck
I have read a few things about this concept, and it sounds appealing and intriguing. Is this something that should be considered, or is it too radical a change to propose right now?
What about an underground economy, or barter system, or when offshore spending replaces offshore investments as the new trend?
I apologize for not getting around(as in navigating) this site too well, but - these seem to be the Critical Issues that stand out to me: Flat Tax (Universal Sales Tax), massive drive for alternative energy development, equally driven and encouraged from tax credits and incentives. Let's hear it for the Flat Tax!!!
I should clarify my initial post. These are just some bullets taken from the FairTax website, with which I have no affiliation. If you want more information on the concept, take a look at the site, www.fairtax.org
Like I said, sounds appealing, but is it realistic? Possible? Too radical?
Closing all the loopholes is realistic.
Closing all the loopholes as you have delineated is impossible to implement in today’s political climate.
Closing all the loopholes is not a radical idea. This was what our founding Fathers had intended for this country.
How about making the Standard Deduction equal to the federal minimum wage times forty hours per week. Since most minimum wage jobs don't include holidays lets make it 50 weeks times the current $5.15 or $10,300.
At the same time make the first $1000 worth of interest tax free to encourage Americans to save.
It sounds good at first glance, but the details aren't so pretty.
The rate would need to be in the 23-30% range, on top of local sales taxes -- ow.
Most proposals include a rebate to lower-income people, so the tax won't ruin them. Guess what? This involves filing proof of income for just about everyone, so the supposed advantage of getting rid of the IRS and the 1040 form are bogus.
Eliminate all deductions? Not hardly -- it will just create a whole new fight over what to tax at what rates and what to leave exempt, and what deductions can still be claimed on the income statements.
Government revenue/taxpayer loss is hard to predict with such a radical shift in policy.
The 16th amendment isn't repealed by the FairTax, so we could end up with both national sales and income taxes in the future.
Retirees who were taxed on their income all their lives are not going to stand for being taxed on their consumption now that they are not working any more.
Need I go on?
I believe it's too big of a jump right now. We have far too many pressing issues than all of these. The most would be Social Security. If the govt. would just pay the fund back the money they "borrowed" with the interest then we would not have any Social Security problems and everyone should know that by now.
We have a major problem with the environment. Energy reforms are 30 years or more late in getting started. Our foreign policy is TOTALLY disastrous. We are in danger because 1. I truly believe we are the reasons for terrorism in the world. If it hadn't been for our God awful policies for years I doubt terrorism would have happened. 2. We need to treat Palestine and Israel equally. All of those people need not be played by politics. Simple put but the truth. We have put our own selves in danger because we are the aggressive ones. 3. The world does not trust us so therefore we have a serious problem right there. We try to run the UN and bully the world into doing what we want. It won't work. Rome did not last that way. Nazis Germany did not last that way and America will not last that way.
These issues desperately need to be addressed. Not that the other above issues are not important.
One thing. I don't understand the statement. "Allows American products to compete fairly." It's my understanding we are on the losing end of NAFTA CAFTA right now. We do NOT want to end unions. The is the only thing standing in the way of us working in sweatshops right now as in the 20's and before. We are losing jobs because the cheap labor market overseas is taking over. They aren't playing fair and our politicians have sold us out.
Anyway, that's my opinion and I'm sticking to it.
However, I do want a tax transition over about 20 years to 100% consumption tax with no exceptions. I want governement to fund all programs on a straght up expenditure vote with no reconsideration of revenue source for any issue. But I know the plan and legislation to do so is monumental to develop.
Shae my friend, you are in a very enviable position. You have very solid grounds to form a massive law suite against whom ever was responsible for your education. Seldom is witnessed such a distructive force that was the cause of your lack of severe knowledge and reasoning power. Damage relief could potentially be in the millions for such a disturbed mind that could blog such nonsense. Fortunately for the rest of us it's not contagious.
I, on the other hand, had an excellent education. Your insults are not even thinly disguised. Please cease and desist. I would not expect you to apologize.
The problem with any and every "fair tax" proposal so far is that it sabotages both small business and individual achievement. I have yet to see a "fair tax" proposal that is not a socialist wolf in populist clothing.
I am a 58 year old female 1970 B-school graduate (until recently liberal 99.9% of the time) who has just this year been able to start her own business. Talk about a wake up call!
Business with less than 100 employees--mine has 3--make up the lion's share of employers in the United States. I am an LLC which means any profits automatically flow through my personal bank account (which constitutes my income after expenses such as office suplies, communications, HEALTH INSURANCE COSTING $10,800 PER YEAR PER EMPLOYEE PLUS MYSELF, not including dependents, and all my staff and their retirement benefits are paid.)These "profits" are taxed at 47.3%. Yes, you got that right-FORTY SEVEN AND THREE TENTHS OF ONE PERCENT GO TO GOVERNMENT.
25% to Federal income tax, 7.65% to Employee Social Security/medicare. 7.65% to the Employer's portion of Social Security/Medicare, and 7% to South Carolina income tax.
I am working very, very hard--over 70 hours per week--to make sure my staff get a regular paycheck, whether or not I do.
Show me a "fair tax" proposal that allows me to keep enough of my profits to actually pay my staff what they are really worth and also make a decent income and contribute to my retirement and I will get on board in a heartbeat!
Do you have any idea how many of us there are out there who will NEVER be able to retire unless retirement involves a homeless shelter? Social Security won't pay for a two bedroom apartment in one of the worst neighborhoods in any city in South Carolina!
"Fair Tax' is an idea whose time has not now--and will possibly never--come. Using the same formula for calculating income tax as presently in force, a flat tax system MUST reduce taxes significantly below the current maximum for each tax level be it state, federal or social security. I just don't see this happening.
Lynn, thank you for all the useful information you provided and for your courage to publish. I wish you well in your endeavors. I hope this gets to the leadership of this group for there are many, many others like yourself that need a government that is responsive and responsible. Most on here are just "do gooders", want change for change sake .. and the same ole lapdog attitudes. Again, thank you for a stroke of reality.
Tax proposal:
Wage (Earned) Income
Establish a base individual living wage level. This would include basic needs: food, clothing, shelter, health, education, transportation plus state/local taxes and an allocation for quality of life (things like vacations). Wages up to the base individual living wage level would be non-taxable. All other wages would be considered personal income.
Investment (Unearned) Income
(my apologies in advance to those who might consider this a pejorative classification)
Any income derived from the investment of wage income would be non-taxable. All other investment income would be considered personal income.
The Federal Budget
All monies authorized by the congress and president to be spent in the next fiscal year, including social security and any other spending currently left off the books when discussing annual budgets, plus all monies authorized by the congress and the president to be collected as "national savings" (to be held by the government to deal with things like 9/11 and Katrina) or debt retirement plus any tax deficit from the previous year. Any tax surplus from the previous fiscal year must be designated to national savings, debt retirement or subtracted from the current year's budget to mitigate the taxes to be collected for that year.
Tax Calculation
The federal government would be authorized to collect taxes up to the amount of the federal budget. The amount of taxes each individual would pay would be equal a percentage of their personal income equal to the amount the federal budget divided by the gross national personal income.
Tax Credits
Only one type of tax credit would be allowed, to take into consideration those who depend on others for all or part of their base living wage income. First and foremost no one earning the base living wage could be claimed to be a dependent. The individual claiming the dependent would receive would receive a tax credit equal or less than the amount of taxes they paid less any wage, investment or personal income earned by the dependent.
Government Assistance
Any individual not making the base living wage may claim government assistance (under the current or revised rules pertaining to that assistance). Any individual claiming one or more dependents whose personal income is not greater than the base living wage times the number of dependents they claim, may claim government assistance on behalf of those dependents but must reimburse the government up to the amount of any tax credits earned.
This nation was founded on tarrifs. That is to say our federal govt. was funded by import taxes on ALL manufactured goods brought into this nation. Also the states were responsible for raising some $$ for federal govt. but most $$ came from import duties. This method also PROTECTED OUR MANUFACTURING BASE. If this nation is to prosper, even survive, we MUST tax ALL manufactured goods brought into this nation. I'm not suggesting we get rid of Internal Revenue. We must use $$ from import duties to invest in AMERICAN manufacturing and employee U.S. CITIZENS. Also we must pay down our national debt with $$ raised from tarrifs.
I stongly suspect Unity 08 is just another slave of the corporations, just like the Dems. and Repubs. Created by the Corps, to circumvent through deception, any REAL 3rd party from gaining power.
IMMIGRATION is the greatest ONGOING destruction of U.S. and 08 does not even mention it.
Although I have differences with American Independant Party/Constitution Party it is the only party I'm aware of that addresses this nations greatest destructive issues.
How would we: "Establish a base individual living wage level."
You say: "This would include basic needs: food, clothing, shelter, health, education, transportation plus state/local taxes and an allocation for quality of life (things like vacations)."
Some would give them a Slim Jim, trench coat, toothbrush and a one-way ticket out of town.
Taxes must be collected based on assest transfers and not on people directly. That puts all the social engineering on the expendture side of government where it belongs. That removes tax collecting from the "fairness" test and places it in an elective body that can be modified every two years without more paper work and regulations for you and me.
I keep hearing how they already pay too much.
http://articles.moneycentral.msn.com/Investing/Extra/CEOsNearRecordPayRatios.aspx
I feel a bit selfish because taxing the wealthy would reduce what Warren and Bill have to donate but I wouldn't mind a smaller federal deficit and debt.
Taxes make us strong as a nation and are a good thing as long as the tax process does not violate the constitution... taxing us while making us pay privately for healthcare is wrong as it is wrong to tax the same transaction twice... and taxation of any minority group is called taxation without representation! So we can't tax the rich differently, can't tax immigrants differently, and we must fix the constitutional taxation violations currently in place... this means more sales based tax and far less of the bureaucracy we know today....
I want to know what Unity's founders intend as the overarching paradigm -- what the big picture issue for this movement and its relationship to the question of basic fairness in our society?
In the comment section under the shoutbox from the main Unity08 home page, I painted a picture of the way both I see this issue and how Theodore Roosevelt saw it. see http://unity08.com/node/94#comment
I spoke there of the need to revive TR's New Nationalism; I saw the need as TR did to bust up corporate lobbyists' corrupt, special interest control of our government, and I spoke, as TR did, to the need to put economic justice, fundamental fairness -- the Fair Deal, up front as our top priority.
If you look at the book Polarized America, you see what I'm saying and see it defined in detail and quantitively measured, too. http://mitpress.typepad.com/mitpresslog/
Almost all the specific issues listed by this movement's website are subsidiary issues, one or more levels down, from the issue I am asking about now.
How about some reaction to a little recent news to put this Mother of All Issues in sharper context? This is what we're quite literally up against today:
The nonpartisan Drum Major Institute for Public Policy (DMI) has issued its annual scorecard, Congress at the Midterm: Their 2024 Middle-Class Record
http://www.drummajorinstitute.com/congress/.
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For someone who posts a lot, I've got little right to insult the Uo8 boards and blogs. ( My wiki -- http://unity08ws.wikispaces.com -- reprints all my posts, and there are really far too many).
Yet the Fair Tax is a wonderful step forward -- simplification, getting away from criminalizing every citizen for poor records and cheap-skate habits (affecting compliance with unintelligible law that no law-maker understands when he votes for or against it.)
In the middle of thinking over the above, comes Seneca -- with Theodore Roosevelt and fairness TO you and me -- and unfairness BY those with money and political power.
we do not have a nice scatter diagram with an x axis going from equal incomes on the left and current inequality in income to the extreme right:
E----------0----------IE
The y axis from top to bottom, passing through 0 on the x axis, would measure at the top aristocracy (in physical and financial control of politics, business and the law,) and the bottom democracy (political and economic):
[imagine this as the y axis -- rotated 90 degrees to run from top to bottom]
A----------0----------D
Now into this scatter diagram we would plot fit links to arguments on, say, ten issues: Each diagram would cover a single issue. Now we could get a feel for what the universe of Unity08 supporters really wants.
As it is today, the Fair Tax -- which we should fully support -- lies buried beneath all the clutter and vanity publishing we have summoned to defeat ourselves.
Others here have called for better organization of the site with a view toward making clear what our people want.
I do that again -- and I would say comments on the Fair Tax, together with their scatter diagrams, might persuade me we were making progress.
John Gelles
http://unity08ws.wikispaces.com
http://www.tiea.us
Human rights and how to pay for them are key to a livable world.
MIDDLE CLASS TAX CUTS
If Americans who are old enough to remember the 1960’s, thought those were good economic years, or people, like myself, who recall the 1990’s, just wait and see what is coming. For once and for all, it is time for our government to give working class, middle class Americans a tax cut. The idea is at least fifteen years behind schedule. Because we have dragged our feet and played around the edges and the margins, today, middle class working America is being squeezed, and presently struggling.
They are the working majority; therefore, they deserve a large tax cut. I believe like many, that the more money working Americans have in their pockets, the more they will spend, growing the economy with that spending. If these Americans have more money they can also save more. When tax cuts are targeted at middle class America with a large tax reduction, we will see the greatest economic expansion in American history
This crazy idea of giving sharp tax relief to the wealthiest people in America is just that, crazy, and it is unfair to the point of obscene. The conservative-Republican ideology that the wealthy in America with huge tax breaks, are going to do anything to help Main Street America is a farce. Frankly, I can think of no wealthy person in America who ever directly or indirectly helped any American in the middle class or in the lower income groups climb the economic ladder.
Now, granted, it is true, that in the short term, with these tax cuts, the nation’s budget deficit would increase, but in the longer term, the deficit will decrease and disappear into another budget surplus. As I have said for years, our government is running a budget deficit because it spends too much of our money, not because it is taxing us too little.
More jobs will be created, thus, increasing the American tax base with more taxpayers. The more people who pay in the more money the federal government will take in. This is a no brainier. The nations middle class, who have led our economic march forward in the past, can do so again, if we give them their much-deserved tax cut.
Kirk Polizzi
Chillicothe, IL
The FairTax is anything but. The Sales Tax, to a degree, is regressive. Why? Because, if Tommy Richboy and Johnny Workaday have to buy the same Bread, Eggs, and Milk to keep body and soul togeather, then that tax makes a much bigger hole in the wallet of the prolitarian then it does in that of the wealthy mans.
Tax Reform is sooooo very important, but falling into the Flat Tax or National Sales Tax is dangerous. What we need to do is radically reform the Progressive Income Taxes, making it truly fair and cutting out the shelters. Add in a Value-Added Tax, keeping it off of the necessities of life and using it to limit State Sales Taxes. Along with this, we need to use common since and moderate spending. Throw in alternative forms of income, and you can pull off true Tax Reform.
If a small enterprise is in the business of investment in real estate rentals every Fair Tax proposal I have seen would immediately penalize that business to the point of extinction. I have communicated with the people at FairTax.org on this subject. Their response was that some few individuals/businesses would be harmed by their proposals, and real estate investment was one of them.
Real estate investment is one of the main economic underpinnings of this country. Unless you can come up with a way of taxing EVERY individual and business entity fairly, any revision of the present tax structure is doomed to failure.
All real estate investors and the National Association of Realtors have to do is point out that residential renters, who make up almost 50% of the residents in most large urban areas, will be taxed twice--once by the government and a second time by their landlords who will raise rents to cover their increased costs.
This principal, by the way, applies to every business, not just real estate. Increased costs of doing business are passed along to the consumer. Doing otherwise in a publicly held company could mean the stockholders could sue their Board of Directors for mismanagement.
Ladies and gentlemen, rent control doesn't work. Even threat of rent control causes residential real estate investors to abandon an area and rents to go sky high. Marginal properties are abandoned or left to disintegrate and eventually be torn down rather than renovated.
Any tax code revision must be highly respectful of business investment. If all an entrepreneur can hope for after putting in 70-80 hours per week and all their money for several years is the same income they could have made working 40 hours a week for The Man, business will come to a grinding, screeching halt. I believe they tried something like this in the USSR. Risk HAS to be rewarded!
Our present tax code was developed to encourage business and to be fair to the individual taxpayer. It may have gotten off course, but Fair Tax throws the baby out with the bathwater.
a bigger crock than partisan politics.They have their 6% monopoly. They will sell the dream and not the reality.
They will blame the lenders and borrowers. They will blame the buyers and sellers. They love a bubble but if it bursts don't blame them.
First some background - I am very interested in right and wrong and fairness. I believe in a supreme being and that life is both a test and a learning experience. Each of us has free will and is responsible for all the choices we make, that humankind is collectively responsible for managing our planet and the resources provided by the Supreme Being.
I also believe that people who receive a government service should pay for that service, that government should be limited and is responsible for setting the rules, and that most products and services should be provided by business rather than government.
I believe that the economy is just a way to organize our common work to provide efficiency, that the organization itself provides an opportunity for some people to gain great financial rewards only because they are at the right place at the right time. I believe that we each have an opportunity to be successful because of our God given abilities, our environmentally provide attitudes, skills and drive and just plain dumb luck.
I do not believe that some people need to be very rich for the economy to work. I do believe that large collections of money are required in order to establish the most efficient organization to both business and government.
I think that good, productive jobs are the key to a well run, productive society. Business and government both provide jobs. Because of the nature of politics, human nature and capitalism, I think we need to limit the numbers of jobs provided by government to the minimum number possible. Most jobs should be provided by business, both small and large. To encourage business and provide a level playing field globally, I think business should not be taxed to provide income for the government. There may be a need for some taxes to reward or punish business for decisions which produce social good or damage.
With that said, the biggest problem I have with the Fair Tax is the name itself. It is not fair to tax the rich at the same rate as the average. It is not fair for the rich to pass wealth on to their heirs. The stock market should provide the large collection of money needed to establish and run large businesses. Taxes should provide the money to run governments.
Individuals are the components of society. They receive rewards when they earn income for a job well done, and they receive rewards when they purchase the work product of other people. The actions of people are influenced by financial incentives greatly. Government should set the rules. People and businesses should carry them out.
People should be taxed on both the income side and the consumption side in order to provide government an opportunity to influence behavior. The income tax should be progressive to discourage excessive payments. There should be ample opportunity to reward those who take risks to provide society new technology and businesses; but, it need not be excessive. People should not be rewarded for being lazy.
Society (including government) needs to set the rules so as to provide a level playing field. It is then up to each of us to succeed to what ever level we desire without taking undue advantage of our fellow human beings.
To address Income Tax complexity, I propose the following:
- Everyone required to file a return [to gather statistical information]
- Progressive Income tax [to recover organizational benefits]
- No corporate Income tax [to level playing field globally]
- Corporate Income tax to be replaced by a national sales tax
- Tax code limited to one thousand words (on web) [keep it simple]
I would be interested in knowing if Edmond has children, and, if he does, how well he likes them. One of the prime reasons for amassing wealth, in whatever quantity, is to be able to make our children's and grandchildren's lives easier than ours was.
This is one of the motives that gets entrepreneurs out of bed early in the morning and keeps them at the grindstone late at night. It's not all about money. There is also a great deal of love in the matrix.
I resent any tax that will diminish my efforts to assure the financial security of my family. Why should my effort be highly taxed to improve the lot of someone else's family because they were improvident? Its the old ant vs grasshopper thing.
Response to: Inheritance Tax
Lynn Robb on July 6, 2024 - 2:01am
Lynn, obviously you must have dumb children who have to rely on mommy or daddy to be successful. Perhaps if you weren't rushing to work in the morning and doing the midnight grind you would have time to nuture your children to be successful and responsible adults.
I am sure you are already gifting each of your children and grandchildren their $11,000 per year.
You apparently are a multimillionaire to be so concerned. In that case you already benefit from interest rates because you almost certainly get the highest rate when banks pay you and the lowest rate on what they charge you.
The vast majority of Americans don't share your burden of the Inheritance Tax.
And if Lynn is a highly successful person and even egads a millionaire then her opinion is somehow of less value?
I do not have to worry about the Estate Tax but am still opposed to it. If Lynn or anyone has accumulated the property it is thiers to distribute, they paid tax on it when they earned it and likely pay tax (real estate and others) on part of it while they hold it.
Not stealing it from them with the coercive power of the state is not giving them a darn thing nor does it endanger the liberties of the rest of us.
vry,
RET
You were off target and off base with your response. You bring dishonor on your own "mommy or daddy" and you give Anonymous a bad name.
Lynn Robb,
Yes, I do have children. That is one of the reasons I spend time thinking about what I should be doing to leave them a better world than I was born into.
Our children, like everyone else in the world deserve an opportunity to be what that want to be and what they can be. Making them wealthy (or ourselves for that matter) may not be in their best interest.
We do not take money with us when we die. We leave our works and our ideas (and our children if we are lucky, to carry on for us).
I think I already answered your question about taxes - to level the playing field. I want to be rewarded for working hard. I want everyone to also be rewarded for working hard and working smart. But give me a break - $400 million a year is a little over the top!
What do we think The Creator would want us to do? Love our fellow human beings as ourselves?
Improvident, isn’t that just plain luck? There for the grace of God go I. Yes, some people do not plan well for the future. But, some people were just in the wrong place at the wrong time with the wrong DNA.
First, you should look at the faq at http://www.fairtaxvolunteer.org/smart/faq-main.html and maybe read the text of the bill and other info at http://www.fairtaxvolunteer.org/smart/
You'd see that your statement of
"It is not fair to tax the rich at the same rate as the average."
is not applicable to the fair tax!
This issue is addressed in multiple ways by faq answers, including #14:
"Let’s look at a billionaire under the FairTax – if he spends $10,000,000 dollars he pays a tax of $2,300,000 and gets a rebate of $4,508 (assuming he is married and has no children). His effective tax rate as a percent of spending is 22.95 percent.
Now, let’s look at a middle-income married couple with no children under the FairTax – if they spend $40,000, they pay $4,692 net of their rebate for an effective tax rate of 11.7 percent."
I don't agree with you that hard-earned savings should be taxed multiple times if they're passed on to your children.
I also don't agree that a progressive tax would be more fair. The only reason the fair tax has a different effective rate as income increases, is because a standard amount of spending is exempted for necessities.
This is the most fair system I've seen proposed.
NJ,
It is not the tax rate that concerns me. It is the continuous accumulation of wealth which concerns me. The ole "The rich get richer." Wealth equals power and influence. I worry that money is subverting the political system. It is suppose to be one man, one vote; but, the rich get more votes than the rest of us because of the cost of running for office. This can not be good for the average citizen in the long run. And if it is good for us then we need not bother with voting in the first place. The master will take care of us!
The point is that some people are getting a greater share of the benefits of technological improvements than others.
Capitalism is an efficient system; but, it is not a fair system. We need to devise controls to establish balance in the economy. The Fair Tax may be a good thought model; but, I am unconvinced that it is the right solution.
Due to a glitch in this site I am now Anonymous formerly known as Lynn Robb, at least temporarily.
Great--we now have a real discussion going!
I am so far from rich I can't even see rich with a telescope, but I know where it is, and I have a road map of how to get there. I am a 58 year old Hispano/Celtic female, former stay-at-home Mom, with an MBA. This makes me a minority in oh so many ways.
My children are far from either dumb or parasitic. One is a teacher and the other is in the military. I believe their contribution to society warrants my contribution to their future.
What is it about wealth that elicits such hostility? There is no mystery here. I have yet to find a way to make money that does not involve a great deal of hard work. Does anyone in America have a problem with this?
Any tax code must reward hard work. If the consensus of moderate America is that wealth must be taxed into oblivion, it is time for serious entrepreneurs to emmigrate to Ireland (the Celtic Tiger) which is actively soliciting business leaders.
Our tax code must keep the money makers at home even at the cost of tossing them a bone or two. Otherwise the 21st Century will belong to --New Zealand? China? Ireland? India?
Well said Anon-Lynn Robb!
Tax policy should not have as a goal punishing the successful or limiting their options on they want to distribute their weatlth!
vry,
RET
Response to:Estate Tax
Anonymous on July 7, 2024 - 4:24pm
Lynn, I am the anonymous that inferred that your kids needed their mom for support. I did so not seeing the context or your other 2 messages. For that I apoligize.
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This topic is quite full of good advice -- so full it boggles the mind to try to read it.
On another topic (you can find on Gelles'wiki I (and Tony C) have asked for persistence and coherence to keep things like TAXES front and center and able to make sense in the end.
In all events, Edmond wrote: First some background * on July 5, 2024 - 10:08am. He said wise things and my comment COMES AFTER each:
"I think that good, productive jobs are the key to a well run, productive society. Business and government both provide jobs. COMMENT IS YES.
"Because of the nature of politics, human nature and capitalism, I think we need to limit the numbers of jobs provided by government to the minimum number possible. COMMENT IS YES -- BUT THE AMOUNT OF GOVERNMENT CAPITAL PROVIDED CAN BE VERY HIGH IF CONTRACTS LIKE THOSE THAT CREATED LEND LEASE, MARSHALL PLAN, MANHATTAN PROJECT, MOON LANDING, ARE MADE BY GOV'T WITH OPERATING BUSINESS FIRMS. WITH CONTRACTS, JOBS ARE NOT GOV'T JOBS (LIKE OUR SOLDIERS HAVE) BUT CAPITAL IS FROM GOV'T.
"To encourage business and provide a level playing field globally, I think business should not be taxed to provide income for the government. COMMENT: SUPER-YES. TAXES SHOULD ONLY BE ASSESSED TO PREVENT UPWARD SPIRALING INFLATION.
"There may be a need for some taxes to reward or punish business for decisions which produce social good or damage."COMMENT: YES, THAT TOO.
----- end of Edmond's advice -----
Now if we need only inflation preventing taxes, we need no estate or income taxes.
The radical inequality that capitalism invites is age old. What is new and should be done today is poverty prevention.
If we have no taxes (but have government spend some money into circulation it gets from its central bank) and gov't borrow only what makes sense to the bond market for certain financial industries and spend tax revenues only where the tax was necessary, as stated above, to prevent inflation, then gov't can afford to lend money for full employment, new energy systems, better health care, etc., etc.
In due course, poverty prevention will mean no one will be in debt but Uncle Sam. He will owe all of us what we've saved. That will be perfect. Gates and Buffet will give to charity. Trump will build a yacht. But the yacht may be taxed as a luxury item whose resources were needed to make the things people now buy because no one is poor.
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John Gelles
Human rights and how to pay for them are key to a livable world.
johngelles on July 7, 2024 - 6:09pm,
I agree with your comments in response to mine which were cited. Except I would change "TAXES SHOULD ONLY BE ASSESSED TO PREVENT UPWARD SPIRALING INFLATION" to "Taxes should be assessed against personal income to prevent upward spiraling inflation" I like the concept of using taxes to control inflation and the goal of keeping inflation to a very low level.
I like the concept of poverty prevention. I have a problem when the national debt becomes too high. When the interest payments approach ten percent of the annual budget, we have a system at risk of going out of control in my opinion. High national debts will cause inflation. We have a bad habit of borrowing in bad times and not paying back in the good times.
I also have a concern about the continuous accumulation of wealth which I brought up at unity08.com/node/107#comment-5619. Some people have tremendous leverage over the rest of us to gain very high incomes. Until there are controls by rule of law we should at least recover some of this excessive payment by a progressive income tax.
And yes, I do agree with Lynn Robb about keeping the money makers and the money in our economy. But the statement that "I have yet to find a way to make money that does not involve a great deal of hard work" does not seem to apply to CEO's.
I think being the CEO of a major oil company today involves a bit of luck, the fact that there only a few major oil companies and the fact that most of the employees are not the CEO. I think the stock holders should be getting more of the rewards (that is you and me) and the CEO should be getting less. I believe in rewarding working hard and working smart; but, not to an excess.
So, I think a fair tax system should include a sales tax, an income tax, an inflation tax, a property tax and several service fees where the government is providing a service which could just as easily be provided by business. These taxes would be spread over the local, state and national level as I have described elsewhere.
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Edmond offers conversation. It will pass into the blogosphere just as monologue does -- but for a while it persists.
On My Wiki I reprint all my posts -- so there is some persistence -- but not nearly enough.
Anyway this is the Tony C. issue, not Edmond's.
Edmond writes, "Taxes should be assessed against personal income to prevent upward spiraling inflation."
This is a NO-NO. Income never causes inflation. It helps (in strange ways) to prevent it. When the rich take more than they earn, it can do no harm to the value of fiat money -- IF the rich save or invest it.
Yet I do not favor taking by the rich of more than the rich earn.
To prevent it I favor labor unions who will demand higher wages and government who will pay wage subsidies to give the not-rich a lot more purchasing power.
But the not-rich will also be offered indexed savings accounts so they can save money until the price is right for them to want to buy what they've waited for.
(We all can't buy at once. Supply has to catch up with need and demand.)
I do not favor taxes against what I say the rich do -- take more than they earn -- because to prove this and calculate their theft is too subjective.
Leave it alone, it hurts no one IF we end poverty, pollution, corruption, crime and war -- all by means other than taxes.
Edmond says to keep inflation to a low level.
I agree. But more important than a numerical goal like single digit inflation, is a DEMAND that unemployment be zeroed out and poverty eliminated completely. Technology has made this possible only in the 21st Century as China and India prove it can be done.
Edmond says, "I have a problem when the national debt becomes too high. When the interest payments approach ten percent of the annual budget, we have a system at risk of going out of control."
Gelles says the national debt can be thought of as the national savings and money supply. Forget it completely. Look at only PRICES, SUPPLY, and UNMET NEED.
Edmond says, "We have a bad habit of borrowing in bad times and not paying back in the good times."
Gelles says, the opposite is the case. In either case, borrowing is never the problem -- nor is unpaid debt IF government keeps watch and prevents unemployment and shortages of supply. Debt can always be re-organized.
Edmonds says," I also have a concern about the continuous accumulation of wealth."
Gelles says, FORGET IT. Let us have the formerly poor accumulate some wealth, and the stinking rich accumulate endless wealth.
Gates and Buffet will give it away. Many will lose it, some will waste it.
It hurts no one IF our unions GET the highest fair wages possible. This will reward all of the middle class.
In the old days, in Russia, Popov the circus clown had millions -- it made no difference to anyone but him.
However, we must not let the rich buy the law!! Elections must be kept clean, etc.
Incidentally, union dues must be free to the members -- so all will join. Government can finance unions just as it finances bank audits and restaurant food inspections.
Union officers must be held to account and any crooks put in jail.
As to crazy rewards for corporate management, if we can get investors, employees, suppliers and communities to have seats on boards of directors, as other countries require, that will cure the problem.
Edmonds concludes, "So, I think a fair tax system should include a sales tax, an income tax, an inflation tax, a property tax and several service fees where the government is providing a service which could just as easily be provided by business. These taxes would be spread over the local, state and national level as I have described elsewhere."
OK. I agree a final tax system and structure may evolve into one that is more complicated than perfect. Our bottom line ought to be no more taxes than necessary. No unemployment. No poverty. No kidding, No shit.
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John Gelles
Human rights and how to pay for them are key to a livable world.
I appear to still be Lynn Robb, the Anonymous.
At the risk of sounding simplistic, there are only two uses for tax receipts sanctioned by the Constitution: Provide for the common defense and promote the general welfare. Admittedly, this gives government a fairly wide latitude.
A redistribution of wealth will only eliminate poverty if it teaches people to fish rather than providing a fish dinner. This discussion, as well as the relative merits of labor unions, is best left to other areas of this web site.
The question here is the benefit of a simplified method of taxation. The government recently commissioned a study of the tax system and the possibility of simplification. Flat tax was analyzed, as well as VAT. The conclusion, after 264 pages, was that we should just simplify the existing code because anything else would do far more harm than good to the economy.
Whatever method of taxation Unity08 supports, its hallmark must be consistency. Individuals and businesses must be able to make five, ten and fifteen year financial plans knowing that they are not going to be thrown a wild card in year 2.
As an example, right now it makes good sense to refinance one's primary residence to pay off home equity loans and credit card debt because the interest paid on the home mortgage is tax deductable. People are tapping the equity in their homes right and left and keeping the economy humming along thereby.
What would happen if suddenly this interest is not deductable? What happens to the banking, construction and real estate industries? People saddled with high mortgage debt who are also hit with a high sales tax may simply stop spending. Forget saving because it may not be possible.
The problem with doing anything to the basic premises of our tax code is the unintended consequences which may result.
Provide does not mean the same thing as promote. "Provide for the common defense" means fund it. "Promote the general welfare" means to encourage existence, not to finance. Look it up in the dictionary.
The sole purpose of our gov't is to protect our rights, instead it is the largest danger to liberty.
How do you encourage? Just saying it? Freedom of speech is enough to encourage it. Obviously this is added because there is more to it. There are many definitions of promote. You are selecting the one you want. Here's another one right off the internet: "contribute to the progress or growth of."
We all know what contribute means.
Look it up: PROMOTE
Word Games.
Phil
Join the Unity08 Delegate wiki today! http://unity-usa.org
While good leaders are hard to find, great leaders know how to serve.
The gov't could "promote the general welfare" by staying out of the way, preventing monopolistic powers from getting in the way, building infrastructure, offering loans for projects beneficial to the GENERAL population , and yes, simple encouragement. There are instances where expenditure would be promotion of the GENERAL welfare (the Louisiana Purchase increased the general welfare of the nation, an increase in GDP). Simply handing out "free money" to specific entities (15% that don't, or can't, buy health insurance for example, or cotton subsidies left over from WWII) in order to buy votes isn't one of them. If the document had meant "provide" and "promote" to mean the same thing, It would read "to provide for the general welfare and the common defense".
The Purpose of Taxation
Anonymous on July 8, 2024 - 9:11am
I take your point Lynn. For the record, interest on credits cards used to be deductable but congress removed this loophole in october of 1989. Does Black Friday/89 ring any bells, that was the week after the legislation took effect.
In any case, different methods of taxation wont change the fundamental problem .. only less spending will.
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SMH says, "In any case, different methods of taxation wont change the fundamental problem .. only less spending will."
Lynn Robb says, "The problem with doing anything to the basic premises of our tax code is the unintended consequences which may result." [Lynn implies that we must keep the crazy code, suffer with current trends, and beware of change. Things could be worse -- and likely they will be worse, if ideas like Gelles harbors ever did get traction.]
To SMH: Has it occurred to you that as government spends less, employees and contractors earn less: these leeches spend less; private good guys like you have fewer paying customers; everything contracts; and America continues down the toilet?
To SMH: Has it ever occurred to you that the freikin economy is connected to itself at both ends. If we return to the good old days, China will be America and America will be working for Wal-mart and Burger King, unhinged, uneasy, and undressed like the naked taxpayer used to be depicted in the funny papers?
To SMH and LR (anonymous): The fair tax is not a bad compromise. It's not all the way to "NONE but anti-inflation TAXES" (the system that represents my desire), but is half-way to meeting me:
It rids us of (1) the insanity of the tax code, (2) the corruption of congress directly caused by corporate bribery for tax advantage, and (3) screwing up capitalism by making people chase after-tax profit instead of traditional profit.
Now chasing traditional profit ONLY -- is also NFG. But a system to "provide for the common defense and promote the general welfare" necessarily involves more than tax reform.
It requires fundamental reform of political economy -- to return to the mixed (command plus the equilibrium-type) economy with which nations can, in fact, provide for their defense of freedom and promote the general welfare of men and women -- not wage slaves -- that is, slaves to incomplete accounting, banking, loops, and understanding of monetary systems of production.
A monetary system of PRODUCTION is what we have -- bad as it is -- but does NOT have to be.
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John Gelles
Unity-now wiki
My Website
mailto:john.gelles@gmail.com
Human rights and how to pay for them are key to a livable world.
Response to: johngelles on July 8, 2024 - 12:42pm
Of course economies are holistic, but it's still a zero sum game. Every spending bill has winners and losers. The tax code no matter how conceived will be unfair .. but never, never so unfair as the spending side. Its only a recent turn of events that the government believes that it must prop up segments of the economy with artificial spending and tax loop holes. HOw many times has a spending bill been justified by saying "it will create jobs". Unproductive jobs are a drain on a healthly economy. It diverts productive resources to unproductive activities.
You said, "The tax code no matter how conceived will be unfair ..
An asset tranfer tax, as mentioned previously, has no fairness issue.
Of course, expenditures do and will be unfair from one veiwpoint or another. But with all the issues on the expenditures side,they become more transparent, debatable, and accountable.
We can't get a clean pig playing in the same ol slop.
Bill"for what we are together"
Lynn Robb here:
All this conceptualizing, postulating and hypothesizing is lovely, but it doesn't get us any closer to a system of taxation Unity08 can get behind as a litmus test for candidates.
I agree, any tax code revision MUST have as a basic tenant the elimination of poverty. So must every other proposal from education to defense to free trade. There is no excuse for the pre-eminent nation in the areas of technology, medicine and military science to also have one of the worst infant mortality and school graduation rates in the civilized world.
So far, everything I have read is within a fairly regimented economic box. Let's get outside the box!
What would happen if our federal government were required by law to adhere to the same principles which govern business? Talk about transparency! Every department should have to submit to an annual or bi-annual audit with standards set by the AICPA, and no department, no matter how *black ops* should be exempt. (Believe me, accountants are the most discrete individuals I know. Any time they can't mention the actual product or service, they will just substitute the word *widget*.)
The citizens of the US are owed no less than the stockholders of a corporation. What do you think the result would be if taxes were pegged to expenditures, and expenditures were subject to independent oversight?
If I ran my business like the federal government, I would have declared bankruptcy after the first quarter.
Response to:Concrete Proposals for Tax Code Revision
Anonymous on July 9, 2024 - 11:12pm
I'm still evaluating your suggestion of an IACPA audit for our governmental segments. It may be a needed reform. However, I am certain that all NGO's and charities receiving special federal and IRS recognition MUST be subject to a AICPA audit. This might be a problem for most religious institutions (the catholic church never has been audited) and would expose massive abuse in others. But it would be a very healthy reform to let the sunlight into these dark organizations.
I have put one on the table and FairTax is already drafted for legislation.
What did I say???? An asset transfer tax migration at 5% per year to removal all social engineering and class warfare from the revenue collection method over a 20 year period. Place all such issues in the legislature for debate and expenditure control.
FairTax could help if it were incrementally deployed over the first 10 years of the migration I propose. The single biggest problem with FairTax as drafted is that it is too far too fast and does not terminate at a fair tax position.
We won't get anywhere as long as the issues are how one party (or person) or another can "win" a class war through taxation. WE may all be "poor" someday; we may all be "rich" someday;, but we should be able to do our best everyday without being tilted this way or that by the method of revenue collection.
Bill"for what we are together"