Is paying taxes a free market decision?

[blahface]

I hear libertarians and conservatives talk all the time about how taxes are theft and when tax money is going to a social service such as medicaid, they will say something along the lines of “I don't want to be forced to pay for someone else's heathcare.” I think this is analogous to a land lord buying a new television and the renters saying “I don't want to be forced to pay for someone else's television.”

They aren't paying for someone else's healthcare. They are paying to be members of society just like the tenant is paying to live in the land lord's apartment. If they value the amount they pay in taxes more than being a citizen of the country they live, they can leave the country and search for a better deal. If you can't find a society that you like or that will have you, you can get a raft and live in international waters for however long you can make that last.

[Broomstick]

The tax-whiners are immature and selfish.

Part of being a grown up is recognizing you should do certain things even if you don't particularly like or enjoy them, because it's part of what makes society work. Or, to put it another way, it's what makes us civilized.

You pay taxes so the poor who can't afford health care and die aren't simply thrown into the gutters to rot, because there's no municipal garbage pick up, either. It keeps the stench down.

No, no one likes to pay taxes, but we're all better off if we do. Now, corruption is a separate issue, if the tax revenues are being misused or diverted that's a bad thing, but tax collection is not inherently evil.

[Nephtys]

It's a very narrow view when someone goes 'Why should I pay for something I don't gain benefits from?!'. Well, that's because we DO gain benefits from a lot of that stuff. Welfare keeps the poorest part of the population from getting into even worse situations, increasing 'bad things' such as crime and drug use. It also pays for absolutely necessary services that be horrific in private hands, such as police or military.

[Sarevok]

I am curious to what anti healthcare folks say when they require a life saving treatment they can not afford. Do they stick up for their beliefs as they lay dying by an illness that could have been cured if only the state would pay for it ?

[CJvR]

Well they can always renounce their citizenship and move someplace without taxes, like Somalia.
I doubt they would be equally swift to apply the same principle to things they approve of, but others might not.

[Lonestar]

Let's see what Adam Smith has to say about taxes and the free market;

Every tax, however, is to the person who pays it a badge, not of slavery but of liberty. It denotes that he is a subject to government, indeed, but that, as he has some property, he cannot himself be the property of a master.

It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.

I name Adam Smith, father of modern free market thought....SOCIALIST.

[Napoleon the Clown]

I am curious to what anti healthcare folks say when they require a life saving treatment they can not afford. Do they stick up for their beliefs as they lay dying by an illness that could have been cured if only the state would pay for it ?

Shit, no. Check out Ayn Rand. They make a bullshit claim that they pay for it anyway, so they may as well get the service.

You don't even have to move out of country to not pay taxes. You can just not pay them and accept jail time. If you think a law is illegal and immoral, shouldn't you fight it?

[madd0ct0r]

Lonestar, you might know this already, but Adam Smith was Socialist, in the sense he was deeply concerned with society and poor people.

He actually mandates that while division of labour is efficient and selfish behavior can lead to mutual benefit, it also reduces the poor of society to little more then labour machines, factors in an equation.

he argued this was evil, and needed to be avoided through provision of education, culture and arts.

[Lonestar]

Lonestar, you might know this already, but Adam Smith was Socialist, in the sense he was deeply concerned with society and poor people.

You wouldn't know that from talking to American Conservatives. All most know of him is a half-remembered HS textbook section on him about the free-market.

Quote tags fixed - SCRawl

[bobalot]

Lonestar, you might know this already, but Adam Smith was Socialist, in the sense he was deeply concerned with society and poor people. [/quote[


You wouldn't know that from talking to American Conservatives. All most know of him is a half-remembered HS textbook section on him about the free-market.

I forgot where I read this, but Conservatives read Adam Smith's work like they read the bible, they pick and choose what fits into their prejudices.

[TheHammer]

The tax-whiners are immature and selfish.

Part of being a grown up is recognizing you should do certain things even if you don't particularly like or enjoy them, because it's part of what makes society work. Or, to put it another way, it's what makes us civilized.

You pay taxes so the poor who can't afford health care and die aren't simply thrown into the gutters to rot, because there's no municipal garbage pick up, either. It keeps the stench down.

No, no one likes to pay taxes, but we're all better off if we do. Now, corruption is a separate issue, if the tax revenues are being misused or diverted that's a bad thing, but tax collection is not inherently evil.

To further your point, when I hear people ask the question "Why should the rich shoulder more of the tax burden?" I always have to laugh a bit. In my mind, the rich benefit more from civilized society and have more to lose should society break down. They enjoy the roads and other government built infrastructure that allow their businesses to exist and thrive, and police and military protection that prevent their accumulated wealth from being pilfered by the poor for example.

[Napoleon the Clown]

Why should the rich pay more? They spend less than an equivalent number of regular people. Someone making $20k a year is going to spend almost all of it on the basics unless they're very good at penny pinching. A single person making $373k (about) isn't gonna spend as much as 18 people making $20k a year. The people making $20k will contribute more in total tax money simply because there's 18xs as many people to feed, clothe, and provide lodging for.

Things get even worse when you are into typical executive pay.

[Starglider]

The emotional impact of paying taxes is rather different at 20% (UK basic rate) vs 50% (UK additional rate). It's quite easy to say 'this is a perfectly reasonable charge to maintain the infrastructure around me' at one-fifth of your income (one quarter with national insurance). When the government is taking over half of your income the 'holy shit fucking government thieves are stealing all my money' factor is much more pronounced.

[someone_else]

You don't even have to move out of country to not pay taxes. You can just not pay them and accept jail time. If you think a law is illegal and immoral, shouldn't you fight it?

What about getting elected and remove laws punishing tax evasion with jail (and leave just some kind of fine), or fucking up the agency tasked to control everyone pays taxes? It's totally legal (trying) to do so.

[bobalot]

The emotional impact of paying taxes is rather different at 20% (UK basic rate) vs 50% (UK additional rate). It's quite easy to say 'this is a perfectly reasonable charge to maintain the infrastructure around me' at one-fifth of your income (one quarter with national insurance). When the government is taking over half of your income the 'holy shit fucking government thieves are stealing all my money' factor is much more pronounced.

What is the additional rate?

[Bakustra]

The emotional impact of paying taxes is rather different at 20% (UK basic rate) vs 50% (UK additional rate). It's quite easy to say 'this is a perfectly reasonable charge to maintain the infrastructure around me' at one-fifth of your income (one quarter with national insurance). When the government is taking over half of your income the 'holy shit fucking government thieves are stealing all my money' factor is much more pronounced.

But on the other hand, they don't and that's a product of ignorance. The British government will never take one-half of your income in income tax. It is mathematically impossible for them to do so. That that belief is supposedly prevalent amongst the upper class only suggests that the rich are largely clueless twits. In that case, I doubt they'd spend that money wisely anyways. Of course, I doubt that the upper class are really that stupid in the US or the UK.

What is the additional rate?

It starts at 150,000 pounds. That's significantly lower than the highest US bracket, though that one only goes up to 35%.

[kaeneth]

I see people talking about how the rich should be taxed more...

Do you guys not understand they (as a percentage of total wealth gain per year) are taxed less than everyone else?

"Why should the rich shoulder more of the tax burden?"

Anyone who asks that 'question' is a moron unworthy of being taken seriously for any reason. Long term Capital gains is lower than regular income tax by 20% in the US. It is a fucking swindle. Guess where most rich people get a large fraction of their income from? Dividends and long term capital gains.

There is a reason Warren Buffet argued he paid less taxes (as a percentage of income) than his secretary. :/

[Eulogy]

The rich should pay more tax because by definition they can afford to pay more tax. For example 10% of $200,000 is $20,000.
On the other hand, 30% of two million is $600,000, and 60% of two billion is 1.2 billion. But even though the richer guys are taxed a greater proportion of their income they still get to take home more than the poorer guys. The first guy only has $180,000 after taxes, but the second keeps $1,400,000 and the third guy, who is an asshole for complaining that he has to pay more tax than everybody else, rakes in an astounding eight hundred million dollars.

The fact is, if poorer people got paid more and all forms of income got taxed more sanely - and the rich don't get tax cuts while poorer people don't - the US wouldn't be bleeding red ink. And do not assume the the rich will just move; once they have enough wealth it doesn't matter much where they live, and migrating takes work.

[Napoleon the Clown]

You don't even have to move out of country to not pay taxes. You can just not pay them and accept jail time. If you think a law is illegal and immoral, shouldn't you fight it?

What about getting elected and remove laws punishing tax evasion with jail (and leave just some kind of fine), or fucking up the agency tasked to control everyone pays taxes? It's totally legal (trying) to do so.

Also an option, but it lacks the benefit of the person shutting the hell up once they implement the plan.

[bobalot]

What is the additional rate?

It starts at 150,000 pounds. That's significantly lower than the highest US bracket, though that one only goes up to 35%.

How is that the "additional rate"? That's simply the top tax bracket.

The rich should pay more tax because by definition they can afford to pay more tax. For example 10% of $200,000 is $20,000.
On the other hand, 30% of two million is $600,000, and 60% of two billion is 1.2 billion. But even though the richer guys are taxed a greater proportion of their income they still get to take home more than the poorer guys. The first guy only has $180,000 after taxes, but the second keeps $1,400,000 and the third guy, who is an asshole for complaining that he has to pay more tax than everybody else, rakes in an astounding eight hundred million dollars.

The fact is, if poorer people got paid more and all forms of income got taxed more sanely - and the rich don't get tax cuts while poorer people don't - the US wouldn't be bleeding red ink. And do not assume the the rich will just move; once they have enough wealth it doesn't matter much where they live, and migrating takes work.

On top of that, the rich benefit far more from society than a poor person.

How much would a garbage cleaner benefits from an educated workforce? or interstate freight lines or highways to transport goods? government research and development? financial regulators? police business fraud divisions?

Poor people benefit far less than rich people or companies. It's the reason why you don't see the equivalent of Bill Gates in sub-Saharan Africa (legitimate billionaires). They need the social and economic infrastructure to build that type of wealth.

[Teebs]

What is the additional rate?

It starts at 150,000 pounds. That's significantly lower than the highest US bracket, though that one only goes up to 35%.

How is that the "additional rate"? That's simply the top tax bracket.

It's just what the government called it. We have basic, higher and additional rates of 20, 40 and 50%. I think the additional rate was seen as a temporary measure to help deal with deficit problems in the recession which might explain why it was called that.

[Starglider]

Anyone who asks that 'question' is a moron unworthy of being taken seriously for any reason. Long term Capital gains is lower than regular income tax by 20% in the US.

In the UK the difference is only 7.5%; the additional rate on investment income is 42.5%.

The very rich still pay much less taxes than the middle class, but this is primarily due to the ease with which they can employ complex tax avoidance scams.

The British government will never take one-half of your income in income tax.

Firstly, we have pervasive 20% VAT as well, plus local taxes, so the effective rax rate is 65% for high earners.

Secondly the UK income tax rate reached 83% in 1974, with a max dividend rate of 97%. This was the peak of Labour communist insanity; Thatcher cut it to 60% when elected and 40% in 1988. Still the UK demonstrably has and can tax income at over 50%, so your statement is factually incorrect (not to mention nonsensical).

The rich should pay more tax because by definition they can afford to pay more tax. For example 10% of $200,000 is $20,000.
On the other hand, 30% of two million is $600,000, and 60% of two billion is 1.2 billion. But even though the richer guys are taxed a greater proportion of their income they still get to take home more than the poorer guys. The first guy only has $180,000 after taxes, but the second keeps $1,400,000 and the third guy,

Taxing billionaries is effectively a separate issue; that wealth is always the result of investments and business ownership, not direct labour, and different moral arguments can reasonably be applied. So few individuals are affected that it is not terribly relevant, even on an incentive basis (very few people even have a realistic expectation of being billionaries). 150,000 GBP/year though is not that much and the vast majority of people in the top tax bracket of both the UK and the US do earn the money through direct labour.

The whole concept of 'get to take home' is a fascist one. In a free country the government should not be dictating the terms under which people can exist and do business, it should be taking the minimum necessary to maintain general welfare and security. The amount of government necessary to do that is debatable but the concept of a government permitting people a little pocket money while taking the lions share of all labour to feed itself inevitably produces statist hellholes.

The fact is, if poorer people got paid more and all forms of income got taxed more sanely

This is the crux of the issue. Income inequality has been spiralling fundamentally due to stagnant pay and falling benefits. Government redistribution via taxation plus benefits is a spectacularly inefficient way to rectify this; it feeds massive legions of worthless government administrators, it pits public sector workers against private sector ones, it institutionalises effective vote-buying by populist parties, and it fosters dependence on central government to fix everyone's problems. Worst of all it does not actually fix the wealth inequality problem, because the burden falls almost entirely on the middle class ($200k/year would be solid middle class if incomes hadn't stagnated so badly), due to the effectiveness of super-wealthy tax avoidance schemes.

Incentivising or if necessary even forcing companies to pay higher wages would be preferable to taxation to fund individual handouts. Collective healthcare has its issues but is preferable to massive corporate subsidies to yet more worthless beurecrats.

On top of that, the rich benefit far more from society than a poor person.

They already pay far more. Income tax is a percentage of income, even with a flat percentage you earn twice as much, you pay twice as much. Socialists constantly try to muddy the waters by outright equating 'pay twice as much' with 'pay the same'. Higher earners pay proportionally the same on the assumption that they receive benefits from society proportional to their salary. This is a bit dubious but fairly reasonable. Not taxing people who are clearly in dire straits is also reasonable; even a Randian should agree that it would be better for them to recover and become a productive member of society again than be driven into depression, bankruptcy and crime or suicide (I know, Randroids wouldn't agree, but they should). Where the argument falls apart is saying that when someone goes from $100k to $200k their taxes should increase from $30k to $80k; a claim that the benefits received from society are super-linear when clearly they aren't (the actual cost to society is declining).

Incidentally I would be more accepting of this position if those advocating it said 'we feel justified in imposing 60% taxation, but we appreciate all the people who pay it (and don't tax dodge etc), giving up your incomes to the state is what makes all our welfare programs possible, we salute you for your support of society'. Of course the actual attitude is 'those rich bastards, how dare they actually earn money, let's take it all and jeer at them'.

[bobalot]

Those additional taxes also apply to poor people as well. Do you honestly think that poor people don't get effected by VAT? In fact, they would spend a far greater proportion of their income on essential goods that attract VAT. One of the criticisms of sales taxes like GST and VAT is that they are regressive taxes.

[Starglider]

Those additional taxes also apply to poor people as well. Do you honestly think that poor people don't get effected by VAT? In fact, they would spend a far greater proportion of their income on essential goods that attract VAT.

In the UK, VAT is not applicable on food, which makes it substantially less regressive than it otherwise would be. On the other hand we have massive taxation on fuel, which primarily hits - guess who - the middle class (particularly the lower half, who have mediocre-paying jobs with long car commutes). Are liberals allowed to admitt that something is regressive if it is middle -> upper class regressive, rather than poor -> middle class regressive?

The other issue with VAT is that dodging it (via expensing everything possible to a personal company) is relatively straightforward; unlike complex income tax avoidance schemes involving offshore tax havens, which are packaged and sold by wealth management companies to the 1M/year+ bracket, this kind of tax avoidance is quite accessible to the medium earners. Whether this is a good or bad thing is debatable; I don't like the excessive tax but I also hate accounting bullshit workarounds that just create yet more work for paper pushers.

[kaeneth]

Anyone who asks that 'question' is a moron unworthy of being taken seriously for any reason. Long term Capital gains is lower than regular income tax by 20% in the US.

In the UK the difference is only 7.5%; the additional rate on investment income is 42.5%.

The very rich still pay much less taxes than the middle class, but this is primarily due to the ease with which they can employ complex tax avoidance scams.

I'm not sure what your point was other than to agree with me and provide a new example that isn't as obvious as the US one?

I'm not an expert on tax codes the world over so I just used the country I live in as an example. That, and it is a blindingly fucking obvious example.