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Very Hot Topic (More than 25 Replies) Fixing Federal Taxation (Read 9213 times)
Shiva_TD
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Re: Fixing Federal Taxation
Reply #10 - Dec 1st, 2013 at 8:33am
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Liberalterian wrote on Nov 29th, 2013 at 5:02pm:
I prefer the Fair Tax.


I was once a proponent of a Consumption Tax with Prebates but not the Fair Tax proposal that has already been corrupted by politicians. I still support it at the state level but oppose it at the federal level for a few fundamental reasons.

First and foremost, as I mentioned, the FairTax.org proposal is deceptive and doesn't eliminate deficit spending so it is fiscally irresponsible. I don't support fiscal irresponsibility by government nor do I support corrupted tax laws. I won't go into the details here but would address it elsewhere if someone wants to know the details.

Next is the fact that a "federal sales tax" (consumption tax) is unconstitutional. It is a direct tax and the federal government cannot impose direct taxes that are not apportioned except for income taxes under the 16th Amendment. I'm a "Constitutional Conservative" and would oppose an extremely "progressive" Supreme Court decision (that would violate prior Constitutional precedent) that would allow a federal sales tax on all goods and services.

The FairTax.org proposal didn't address the fundamental problem with Social Security/Medicare because it didn't generate wealth for low income workers. My proposal generates wealth based upon "privatization" that would take about 40-45 years (i.e. the working life-time of most people). It doesn't reduce government where my proposal reduces government by at least 1/3rd over 40-45 years.

But I still support a consumption tax with prebates at the state level of government as state taxation in the United States is the most regressive tax we have imposing the highest tax burden relative to income on low income earners. I live in WA that has the most regressive state tax laws where a low income worker has 14-times the tax burden relative to income when compared to the top income earners in the state.

I like to see a clear separation in taxation and spending when addressing state and federal taxation and expenditures. My logic dictates that States should use the consumption tax with prebates and not tax income while the federal government should use income taxes and not tax goods and services with a sales tax.

Of note though my proposal did evolve from considerations based upon a consumption tax with prebates. My "exemption" is fundamentally a "prebate" on income taxes that doesn't first have to be paid to the government and then sent back to the individual households.

My proposal basically takes the government out of the loop which was a problem with the proposed federal consumption tax with prebates. I found it stupid to send money to the federal government so that the government could send it back to us. Why not just let us keep it further reducing the size of government?

My proposal also reduces the size and highly intrusive nature of the IRS as all individual deductions are eliminated and 99% of all enforcement of the tax codes by the IRS (i.e. IRS audits) of individual tax returns relate to claimed tax deductions. I personally know this because I've been audited four times by the IRS (and came out ahead on 3 out of the 4).
  
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Shiva_TD
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Re: Fixing Federal Taxation
Reply #11 - Dec 1st, 2013 at 9:14am
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keauxbi wrote on Nov 29th, 2013 at 4:56pm:
I would like to see the math and statistics he uses to come up with this.

        $50,000 exempted for every household
x 150,000,000 households
    $7.5 trillion exempted from taxation.  The federal overlords will not be pleased.


I didn't write my tax proposal to please the "federal overlords" but instead I wrote it for the American People.

We also need to remember that for this $7.5 trillion in gross income that is exempted that more than $7.5 trillion will be taxed. Currently we only tax a portion of the gross income of Americans because we only tax net income after deductions and we also allow tax credits.

Today 47% of American households have no net federal income tax burden with many having a negative tax burden because of tax credits. I only change that to 50% and eliminate "negative tax" burdens (all tax credits are eliminate as are all individual deductions). I don't actually anticipate any net change related to how much income is not taxed based upon my proposal. Lower income workers that don't have a net income tax liability today won't have it under my proposal either.

What does not get taxed today are incomes currently generated by paper corporations in off-shore tax havens that are dependent upon the "capital gains" tax loophole that disappears. This income is currently untaxed by anyone as the "host" country doesn't tax it (because it's a capital gain by a US citizen) nor does the US government tax it.

I don't know how much income is untaxed because it's channeled through paper corporations in off-shore tax havens and it is only related to a small percentage of very elite top of the top 1% of income earners but would estimate it to be over $1 trillion annually. This is a tax loophole that pragmatically can only be used by the very, very wealthy and they hide huge incomes using this tax loophole. Eliminating the Capital Gains tax loophole ends this income going untaxed by anyone and adds to the tax base for America.

When everything is accounted for actually more income will be taxed under the income tax laws than what is being taxed today while at the same time it will dramatically increase the economy as the first $50,000 in income is not taxed at all, increasing the paychecks for people earning up to $50,000 and that will increase consumption that fuels economic growth.

The exemption also reduces poverty, reducing the need for welfare assistance to mitigate the effects of poverty, as even low income workers generally have income taxes withheld from their paychecks which reduces their disposable income.   

Of course my privatization of Social Security/Medicare proposal dramatically reduces poverty in the United States over time as it build personal wealth for both the person and their families. 
  
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Shiva_TD
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Re: Fixing Federal Taxation
Reply #12 - Dec 1st, 2013 at 9:24am
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keauxbi wrote on Nov 29th, 2013 at 6:31pm:


I seriously doubt that Ron Paul every advocated a zero tax rate as that could only be accomplished by abolishing government completely.

With that noted my proposal is for a FLAT TAX RATE.
  
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Shiva_TD
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Re: Fixing Federal Taxation
Reply #13 - Dec 1st, 2013 at 9:39am
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I believe I've address everyone's comments so far.

On Income taxes:

Actually taxing to pay for expenditures would place a burden on Congress to reduce spending but those that fund their political campaigns.

The proposal doesn't change the actual income that is not being taxed today but does add income that would be taxed that is currently untaxed by any nation.

It is a flat tax rate proposal that imposes the same tax rate on all income (above the exemption level).

The "exemption" for income is virtually identical to the concept of "prebates" under a consumption tax but removes the government from the loop.

Like the "consumption tax with prebates" it is fair as every individual household (depending on size) and every enterprise receives the same exemption and pays the same tax rate. 

It reduces poverty by increasing the disposable income of households.

It does not negatively impact the life styles of anyone (high income households do not spend all of their income on living expenses) but does improve the life styles of low income families.

It improves the economy by increasing consumption and that will create jobs (unlike investments that don't actually create jobs).

With all of that said no one has commented on my proposal to privatize Social Security (except for a very small safety net) that will ultimately eliminate Medicare.
  
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Josh
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Re: Fixing Federal Taxation
Reply #14 - Dec 1st, 2013 at 11:45am
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Shiva_TD wrote on Dec 1st, 2013 at 9:24am:
I seriously doubt that Ron Paul every advocated a zero tax rate as that could only be accomplished by abolishing government completely.

  

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Bourgeois
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Re: Fixing Federal Taxation
Reply #15 - Dec 1st, 2013 at 12:18pm
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"The government is a greedy piglet that suckles on a taxpayer's teet until they have sore, chapped nipples."

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keauxbi
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Re: Fixing Federal Taxation
Reply #16 - Dec 1st, 2013 at 12:53pm
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So you propose violating the 14th amendment to squeeze the rich for every last penny? 

Also you're acknowledging that the wealthiest among us are the political financiers of our political ruling class and somehow you expect that political ruling class to pass your tax proposal.  The federal overlords laugh at your proposal.

Moving on...


  

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Josh
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Re: Fixing Federal Taxation
Reply #17 - Dec 1st, 2013 at 1:51pm
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Bourgeois wrote on Dec 1st, 2013 at 12:18pm:

This is what a large number of libertarians say... anarcho-capitalism as an ultimate goal, but for now, we need to focus on minimizing government. I can sympathize with that position. But point is that he doesn't support taxation -- he's said this many times.
  

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Liberalterian
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Re: Fixing Federal Taxation
Reply #18 - Dec 1st, 2013 at 1:58pm
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Josh wrote on Dec 1st, 2013 at 1:51pm:
This is what a large number of libertarians say... anarcho-capitalism as an ultimate goal, but for now, we need to focus on minimizing government. I can sympathize with that position. But point is that he doesn't support taxation -- he's said this many times.

He does, he simply supports a tax rate that approaches zero.
  
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Bourgeois
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Re: Fixing Federal Taxation
Reply #19 - Dec 1st, 2013 at 2:13pm
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Josh wrote on Dec 1st, 2013 at 1:51pm:
This is what a large number of libertarians say... anarcho-capitalism as an ultimate goal, but for now, we need to focus on minimizing government. I can sympathize with that position. But point is that he doesn't support taxation -- he's said this many times.

No, the point of that article is that Ron Paul supports the idea of a minimum gov, in itself. He supports minarchism, not anarchism.
  

"The government is a greedy piglet that suckles on a taxpayer's teet until they have sore, chapped nipples."

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