Dean's budget-balancing act left taxpayers in red

[Andrew J.]

A tax on income is not a tax on wealth, Mark--it's a tax on income. You can easily have tremendous wealth that is not coming in as income, and is thus not taxed by an income tax. In fact, I could be the richest person in the U.S., and, theoretically, receive money back from the IRS under the current system under the right conditions!

Furthermore, that is not due to "loopholes" -- but due to the simple fact that estates are, obviously, not taxed by an income tax! There is nothing equitable about a progressive income tax, nothing at all--some people have to pay bigger percentages than other, which is inherent unfair, while the real disparity of wealth is totally ignored.

So you're suggesting that on April 15th the government sees how much you have-as opposed to how much you made that year-and take a percentage of that? Interesting...

Also, I feel I must point out that although estates are not affected by income tax, they were affected by it before they BECAME estates.[/i]

[Howedar]

Frankly, I think we just ought to have a flat tax. X% right off the top. No deductions, no loopholes, none of that shit.

Whatever needs to be done with deductions and stuff, leave that to property.

[Darth Wong]

The only truly equitable tax is a sales tax. However, destroying the IRS and replacing it with a federal sales tax is about as likely as Josh Hartnett coming to Frank Hipper's house to suck his dick.

[Frank Hipper]

The only truly equitable tax is a sales tax. However, destroying the IRS and replacing it with a federal sales tax is about as likely as Josh Hartnett coming to Frank Hipper's house to suck his dick.

I'll start lobbying, instantly!

[The Duchess of Zeon]

So you're suggesting that on April 15th the government sees how much you have-as opposed to how much you made that year-and take a percentage of that? Interesting...

Also, I feel I must point out that although estates are not affected by income tax, they were affected by it before they BECAME estates.[/i]

I wasn't necessarily advocating large-scale estate taxes. A sales tax would catch the use of any money, including money that would not have been covered by an income tax. Thus it would indeed be the most equitable of taxes. An estate tax does indeed have the problems you hint at, and should not be implemented on a wide scale. The benefit of a sales tax is considerable--yes, you can hold money in your estate for as long as you want, but if you want to spend it to buy assets, you get taxed. (or, for that matter, to buy the assets that make up your estate in the first place.)

As for income tax having "already taxed assets in the estate" -- possibly. However, some of those assets among the very rich might easily have been from before the implementation of the income tax, and there are various methods to escape or circumvent taxation of interest. Not to mention that many of the assets might come from inheiritance, which brings us into an entirely different realm of taxation yet again (and, likewise, brings up the possibility of the assets actually being from pre-income tax days).

[Arthur_Tuxedo]

The only truly equitable tax is a sales tax.

Well, not really. The better someone's socio-economic status, the smaller amount of their income they spend and the more they save. That means the poor are hit harder by a sales tax than the rich.

[The Duchess of Zeon]

Well, not really. The better someone's socio-economic status, the smaller amount of their income they spend and the more they save. That means the poor are hit harder by a sales tax than the rich.

Where did you hear this, and where does it compare with the reality of the lifestyle of countless rich people who indulge in extravagance to the point of ridiculousness and sometimes even bankrupting themselves out of hundreds of millions of dollars? (Witness Mike Tyson, for example.)

[Howedar]

However, for every Mike Tyson there are probably a good many others who pass their money on without spending a sizable proportion of it (else wealth would never really be handed down through rich families).

[Darth Wong]

However, for every Mike Tyson there are probably a good many others who pass their money on without spending a sizable proportion of it (else wealth would never really be handed down through rich families).

True. But if you want a fair tax system, you must tax people on some even-handed basis, and taxing them for their voluntarily extravagant lifestyle or lack thereof is completely fair.

If we don't want "fair", and we instead want "forced asset redistribution between rich and poor", then that's a different argument.

[Howedar]

I do not disagree. I was merely responding to Marina's suggestion that a great many rich people are actually crazy spenders.

[Darth Wong]

I do not disagree. I was merely responding to Marina's suggestion that a great many rich people are actually crazy spenders.

Tyson is an extreme case, but it's obviously true that rich people are much more prolific spenders than poor people. The sales tax on a multi-million dollar mansion alone would be huge.

[Edi]

A sales tax works quite well, as long as basic necessities like food aren't taxed up the wazoo. The sales tax here is 22% on everything but food (8%), books (8%) and something that I don't remember right now, which had a sales tax of around 12%.

If food has a lower sales tax, it doesn't hit the poor people significantly, and the rest of it is, or should be, manageable.

Edi

[Joe]

The only truly equitable tax is a sales tax.

Well, not really. The better someone's socio-economic status, the smaller amount of their income they spend and the more they save. That means the poor are hit harder by a sales tax than the rich.

Most national sales tax proposals do not include taxation of commodities like food.

[Worlds Spanner]

Oh my God.

Is everyone agreeing on something here, or am I imagining it?

[The Duchess of Zeon]

A sales tax works quite well, as long as basic necessities like food aren't taxed up the wazoo. The sales tax here is 22% on everything but food (8%), books (8%) and something that I don't remember right now, which had a sales tax of around 12%.

If food has a lower sales tax, it doesn't hit the poor people significantly, and the rest of it is, or should be, manageable.

Edi

The plan the Cato Institute floated a while back taxes everything at the same percentage, but allowed people (everyone, mind you, regardless of their income) to receive a discount back from the government to cover the percentage the tax took out of everyone's basic living expenses. This would have the effect of eliminating taxation on those who do not make more than basic living expenses, while not stinting in the taxation on food and other commodity items of those who make more than basic living expenses--while at the same time, fairly giving the same discount back to everyone, even if they don't technically need it, on the principle of equality. I support that plan.

[Dahak]

In Germany, food is taex with half the normal tax, 8%. Books, and other stuff, as well. Apart from that, everything is taxed with 16%.

Added all taxes up, a normal German pays quite more than 50% in taxes, health-, pension-, nursing care insurances.

[Peregrin Toker]

What he's leaving out is that 1% of the population also controls 50% of the wealth.

When you've got half the money, you pay half the tax. Fair's fair.

A tax on income is not a tax on wealth, Mark--it's a tax on income. You can easily have tremendous wealth that is not coming in as income, and is thus not taxed by an income tax. In fact, I could be the richest person in the U.S., and, theoretically, receive money back from the IRS under the current system under the right conditions!

I'm starting to wonder - if a wealthy person can be lowly taxed under a gov't with high income tax, why haven't more "advocates of equality" suggested replacing income tax with tax on wealth?

Ignorance? Hidden agendae? Or is a "tax on wealth" just hideously difficult to implement??

[Arthur_Tuxedo]

Well, not really. The better someone's socio-economic status, the smaller amount of their income they spend and the more they save. That means the poor are hit harder by a sales tax than the rich.

Most national sales tax proposals do not include taxation of commodities like food.

True, but don't forget that numerous sociological studies have found that the poor tend to spend more for the same products as wealthier people. We've had this argument before, but the best solution is a tax on total wealth.

[LadyTevar]

Well, not really. The better someone's socio-economic status, the smaller amount of their income they spend and the more they save. That means the poor are hit harder by a sales tax than the rich.

Most national sales tax proposals do not include taxation of commodities like food.

True, but don't forget that numerous sociological studies have found that the poor tend to spend more for the same products as wealthier people. We've had this argument before, but the best solution is a tax on total wealth.

This discussion came up recently in the local news. Following a 'tax free weekend" that our state offers once a year for families with school-age children, one possible gubanatorial candidate was suggesting getting rid of the sales tax (6% on EVERYTHING).
It was then pointed out to the gentleman (by about 20 different elected officials) that 30% of the State's Income is from that tax. So where would the State make up the money?

Personally, I say stop the tax breaks for the wealthy, and give the middle-class a break. These tax shelters for investment dividends and the like does nothing for the average blue-collar 2-working-parents family, because they're too busy trying to save money to keep food on the table and a roof overhead to spend that hard-earned money gambling on stocks.

[Arthur_Tuxedo]

This discussion came up recently in the local news. Following a 'tax free weekend" that our state offers once a year for families with school-age children, one possible gubanatorial candidate was suggesting getting rid of the sales tax (6% on EVERYTHING).
It was then pointed out to the gentleman (by about 20 different elected officials) that 30% of the State's Income is from that tax. So where would the State make up the money?

Personally, I say stop the tax breaks for the wealthy, and give the middle-class a break. These tax shelters for investment dividends and the like does nothing for the average blue-collar 2-working-parents family, because they're too busy trying to save money to keep food on the table and a roof overhead to spend that hard-earned money gambling on stocks.

Yes, but stocks and investment prop the economy up. Reduce incentives to invest, and you risk turning this recession into a full-blown depression. Investment = expenditure = GDP. As far as fairness goes, I agree with you, but sometimes the tradeoff is too high.