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Very Hot Topic (More than 25 Replies) Fixing Federal Taxation (Read 9690 times)
nicole.davidson
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Re: Fixing Federal Taxation
Reply #70 - Dec 9th, 2013 at 3:23pm
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I'd like to see a flat tax. To me, it really seems to be the true fair tax.

Here's an article I found:
http://www.logicaladulthood.com/2013/11/08/fairest-tax-reform-land/

  
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Shiva_TD
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Re: Fixing Federal Taxation
Reply #71 - Dec 10th, 2013 at 8:20am
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Quote:
I'd like to see a flat tax. To me, it really seems to be the true fair tax.

Here's an article I found:
http://www.logicaladulthood.com/2013/11/08/fairest-tax-reform-land/


My proposal for federal taxation is a "flat tax" with an exemption. Of course I also hate ignorant sources which is what the linked opinion and Investopedia. Anyone actually reading and understanding what it says would reject the concept of no deductions or exemptions as well as unifying all taxation under a federal authority.

Quote:
What exactly is a flat tax? Investopedia defines a flat tax as such:
•The same tax rate is applied to every taxpayer no matter what your income bracket is. (Basically everyone pays around 20% of their income for city, state, and federal taxes)
•Deductions and exemptions are not allowed.

People will argue that the country’s wealthy should pay a higher percentage than someone earning minimum wage, because they can afford it. But is it fair? No. While most Americans pay over 30 percent in taxes, most wealthy pay less than 15 percent of their income because of deductions and exemptions.

Others may bring up the fact that a flat tax wouldn’t immediately solve the nation’s budget problems. This alone shouldn’t be seen as a reason NOT to have a flat tax, because it would force government to clean house and better spend our hard earned tax dollars.


Investopedia is wrong because deductions/exemptions must be allowed. If that were not the case then an enterprise would pay taxes on the gross income with no deductions for the costs of the enterprise. A company selling "salt" which is a low profit margin commodity would, in the example of Investopedia, paying a 20% tax on gross sales would lose money on every transaction.

The proposition of a. single tax rate for local, state, and federal taxation ignores the separate taxing authority in the United States. Even the US government has split it's taxation and spending into two categories of general taxation/expenditures and Social Security/Medicare taxation/spending.

The proposal would basically result in the abolition of the 'State' and the dual sovereignty of the United States. How many people on this forum actually support the abolition of the "States" in the United States?

We can also note that the "majority" of people don't pay an average of 30% in taxes. In 2011 47% of Americans paid no income taxes (or had a negative income tax) and only workers pay the 15.3% of in FICA/Payroll/Self-employment taxation with limitations on income as investors are exempt. Yes, the top 1% of income earners typically pay an average of 15% in Capital Gains taxes which is a tax loophole (that I abolish).

As also noted in my "Federal Tax Proposal" it does uses a "flat tax rate" with an exemption that also funds all government expenditures although the tax rate can vary from year to year based upon expenditures. 

Jeeze, don't people take the time to understand what they're reading. Take the time to read what I've proposed. It  is a FLAT TAX with an EXEMPTION and the wealthy don't pay a higher rate than anyone else and it also balances the US budget.

Every tax paying entity (person and enterprise) receives the exemption and all pay the identical flat federal income tax rate above the exemption level. Deductions are allowed for enterprise but only for the "cost of production" and all individual tax deductions and all tax credits are eliminated.
  
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Shiva_TD
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Re: Fixing Federal Taxation
Reply #72 - Dec 10th, 2013 at 8:44am
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Liberalterian wrote on Dec 9th, 2013 at 9:14am:
Oh my fault, I forgot that this is what you support.

I guess that could work but realistically it's not going to ever pass. Congress is obsessed with borrowing and spending. Not to mention, every Keynesian and Neo-Keynesian's head will explode if we don't borrow money so that we can effectively "set interest rates" and do other BS. So basically, we would need to somehow change the prevailing economic thinking as well as kick out the current bozos for your plan to ever come close to reality.

And even then, I guarantee you that eventually they will simply borrow money again. Or find some sort of loophole. And even if they don't, they'll probably just raise taxes in order to spend on domestic and war matters. After all - you do care about seniors don't you? And if we don't bomb Iran then they will get a nuke!  Grin

The point is, Washington is too corrupt for any plan like that to become reality or to somehow remain a good thing. The current tax code hasn't change in decades, I doubt it's going to have a real change like you or I are proposing.


True, it would probably never pass in Congress even if it was proposed but that wasn't really the point. From my perspective I tired of BS proposals such as the "Tea Party" or "Paul Ryan" proposals that were based upon myth as opposed to reality.

It is my personal belief that if we're going to condemn something then we have an obligation to address the issue and opposed to just bitching and whining about it. So I literally worked for years in addressing how could we have a tax that is fair for everyone, eliminate deficit spending (and pay down the national debt), and dramatically reduce the size of government responsibily where Americans are all better off.

By way of another example we can all say we "hate Obamacare" but I have yet to see a viable proposal for something that will ensure that tens of millions of Americans will receive adequate health care that would prevent tens of thousands from dying annually because they don't. Obamacare was designed to accomplish that goal but doesn't do it very well and we can all admit that. But if we want to eliminate "Obamacare" then we have a responsiblity to propose something that accomplishes the same goal. Simply leaving sick people on the street corner to die isn't really an alternative.

Of note we don't have Keynesian economic policies from what I understand. I have limited knowledge related to Keyne's proposals but from what I understand government was to save during years of properity so that it could spend on new public works during times of economic downturns to mitigate the effects of the downturn.

That spending should not be based upon "neglect" of infrastructure (which is the case we had in 2009) but instead on "new" projects that benefit society. Sort of like the CCC camps that built trails in our national parks during the Depression (but that inappropriately resorted to borrowing to fund).

There are other details of "Keynesianism" that I oppose but the fundamental foundation of "save during prosperty to spend during recession" actually makes sense. Unfortunately our government borrows during prosperity and borrows more during recession.
  
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Liberalterian
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Re: Fixing Federal Taxation
Reply #73 - Dec 10th, 2013 at 11:31am
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Shiva_TD wrote on Dec 10th, 2013 at 8:44am:
There are other details of "Keynesianism" that I oppose but the fundamental foundation of "save during prosperty to spend during recession" actually makes sense. Unfortunately our government borrows during prosperity and borrows more during recession.

That's true, that does make more sense. Since in this case the government isn't taking money out of the economy to spend it on other areas. Which obviously will only make a downturn worse. If they spend money that they have to borrow or print then they simply take money out of the private sector.
  
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Re: Fixing Federal Taxation
Reply #74 - Dec 11th, 2013 at 9:17am
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Liberalterian wrote on Dec 10th, 2013 at 11:31am:
That's true, that does make more sense. Since in this case the government isn't taking money out of the economy to spend it on other areas. Which obviously will only make a downturn worse. If they spend money that they have to borrow or print then they simply take money out of the private sector.


Of course there are a few fundamental problems with even this one proposal of Keynesianism.

First and foremost it is still economic interventionism by government to effect an outcome that Laissez Faire capitalism would oppose. Even though the spending would be for the public benefit, such as building trails through the national parks as was done during the 1930's, it is still interventionism.

Next is that some people are so rabid anti-tax that they would come unglued if the federal government actually collected surplus revenues during times of economic prosperity. We have the Tea Party movement today that represents this anti-tax position to the point that they don't even want enough taxes collected to pay for authorized expenditures much less enough collected to generate a surplus. The Tea Party movement does NOT represent fiscal conservatism (because they don't propose a balanced budger) but instead is simply an anti-tax movement that is irrational from a fiscal responsibility perspective.

Finally this "infrastructure" spending should not be a component of normal infrastructure projects that should be funded by dedicated taxation such as our national highway system. I mention the highway system because we have a dedicated "fuel tax" for federal funding but have been using "general" tax revenues to fund it.

In 2007, as I recall, the federal government collected $30 billion in fuel taxes but authorized $40 billion in spending on the highways. The additional $10 billion came from the "general fund" and that was wrong. The highway system unquestionably required the funding (and more as it is not being properly maintained) and the fuel tax needed to be increased to fund the necessary expenditures instead of using general tax revenues. In truth the federal fuel tax today should be about twice what it is to fund the necessary projects for our interstate highway system because we're under-spending on it.

.... and the rabid anti-tax fanatics would come unglued if we actually collected enough in the dedictated federal fuel tax required to maintain our interstate highway system.
  
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Re: Fixing Federal Taxation
Reply #75 - Dec 11th, 2013 at 5:53pm
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I agree with you on that Shiva. Though I also would like to see considerably less regulations on private companies which wish to build their own roads/highways.

Do some of both is what I would say. Have some increase in the fuel tax but at least attempt to move towards partial privatization of roads. Assuming that private companies wish to build their own roads, they should be allowed to do so with minimal regulations. I guarantee you that private roads and bridges would get more than enough funding to be in excellent shape. Since these roads and bridges would likely just be built in highly congested areas (thus be very profitable).

Such as if the public roads are not being expanded for one reason or another (for example due to the inability to raise taxes for expansion). This is a perfect area where the private sector could enter and build their own private lane or two next to the public road. People could use this private road (if they choose) and maybe pay tolls or monthly usage fees or some other payment option at the road company's discretion.

What do you think about that?
  
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Shiva_TD
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Re: Fixing Federal Taxation
Reply #76 - Dec 13th, 2013 at 9:02am
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Liberalterian wrote on Dec 11th, 2013 at 5:53pm:
I agree with you on that Shiva. Though I also would like to see considerably less regulations on private companies which wish to build their own roads/highways.

Do some of both is what I would say. Have some increase in the fuel tax but at least attempt to move towards partial privatization of roads. Assuming that private companies wish to build their own roads, they should be allowed to do so with minimal regulations. I guarantee you that private roads and bridges would get more than enough funding to be in excellent shape. Since these roads and bridges would likely just be built in highly congested areas (thus be very profitable).

Such as if the public roads are not being expanded for one reason or another (for example due to the inability to raise taxes for expansion). This is a perfect area where the private sector could enter and build their own private lane or two next to the public road. People could use this private road (if they choose) and maybe pay tolls or monthly usage fees or some other payment option at the road company's discretion.

What do you think about that?


There are several considerations that I don't believe many consider when the put forward the proposition of "private roads" as if it's a fix to a problem.

First we must consider that many roads are already built by private enterprise but these tend to be small road projects associated with land development. Housing tracts and industrial developments often include the building of private roads that are turned over to the government upon completion (some are not). This are "affordable" projects as a part of the development.

Large interstate highway projects (that the federal government has Constitutional authority and responsibility to build) are generally unaffordable for private enterprise and with them come hidden costs of operation and results in a duplication of effort (i.e. a private company can build a road but the government still has to provide the interstate road for postal service and national defense).

We basically don't save anything because of the mandates for our government under the Constitution and simply end up with two roads going to and from the same locations.

To my knowledge all interstate highways are built by private enterprise today. They're just funded by the federal government because of the high costs of construction. In some cases where there are high maitenance costs (e.g. the Bay Bridge in California) have tolls to fund the costs of maintaining the structure.

Many complain about "regulation" but we need to understand that probably 99% of the regulations are necessary. They address worker safety, structural integrity, and environmental impact all of which are vitally important. In almost all cases these "regulations" were a result of prior problems where factors associated with the "project" were ignored.

We know, for example, that when private railroads built bridges without regulation the bridges often had the problem of simply collapsing because of use. The engineering standards were not embodied in the regulations and substandard engineering was generally to blame for the failures.

We often cite "bad" regulations but can only do so anecdotally as overwhelmingly most are legitimate and few actually impose unnecessary costs on enterprise. In many cases, such as OSHA regulations and engineering standards, they were actually developed by private enterprise.

Libertarains often refer to "private roads" as a solution but I don't believe it is a magical fix to anything. As I noted in 2007 the federal government authorized $40 billion in highway funding (and only funded $30 billion with the dedicated fuel tax) but based upon many reports the actual spending should have been about $60 billion (or more) because our interstate highway system is crumbling. The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel (semi-trucks cause the most damage to the highways because of weight) and those should probably be double what they are. If we doubled the fuel tax on gasoline it would only represent about a 9%-10% fuel tax (with an average price of $3.50 to $4.00 per gallon) and that is an "affordable" tax.

We can also note that even $60 billion in annual federal interstate highway expenditures only represents about 2.5% of the general expenditures of the federal government and it shouldn't be funded by income taxes at all but exclusively by the dedicated (user) fuel tax.

Every America benefits from the interstate highway system and with the "fuel tax" being a "consumption" tax it really does fit in with "libertarian" political beliefs more than many are willing to accept. In a very real sense it's not fundamentally different than a "toll" on the use of the roads.

The only problem is that we're not collecting nearly enough to fund the expenditures and rabid "anti-tax" advocates don't seem willing to budge an inch even when a "consumption" tax is used to fund the expenditures. They'd scream bloody murder if we proposed collecting enough in a "dedicated consumption tax" to fund our interstate highway system that is vital to the economic welfare of All Americans.


   

  
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Liberalterian
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Re: Fixing Federal Taxation
Reply #77 - Dec 13th, 2013 at 11:48am
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http://en.wikipedia.org/wiki/Private_highway

Yes there would be more than one road going to the same place.

That's sort of the point.

Do you ever go JUST to Walmart or are there plenty of alternative stores as well as Walmart? That's what the Free Market is all about, competition. It's not "inefficient" to have two, three, or more roads going in the same area. Rather, it is considerably MORE efficient since this way competitive forces force the roads which are bad to either improve or go out of business. Sure, they could have safety issues. Guess what happens? Everyone in the future uses the alternative bridges instead of the one which collapsed. This puts pressure on the other companies to make sure their bridges are kept in good shape - after all the other company is out of business due to their bridge collapsing and them having several lawsuits filed against them and no one using their bridges since there are plenty of alternative bridges provided by other companies.

Think about it this way: When you choose to buy a car is there only one car company? When you choose to buy a computer is there only one computer brand? No, there's plenty and this is precisely why these industries are innovating whilst roads have technologically not have much innovation at all. Introduce market forces and I guarantee you the roads would be safer, more well maintained, and cheaper to produce and maintain due to innovative strategies employed by the competing road/bridge companies. This is the opposite of inefficiency. Having a monopoly is the very definition of inefficiency.

Besides that, as I said, the roads could be built by the state. THEN we could add a lane or two right next to the state highway which is privately built and owned and operated. People could choose to use the crumbling and packed public roads or they could choose the state of the art privately owned and operated roads instead. It would be entirely voluntary and the interstates would still exist as they are now - simply they would be competing with private alternatives that people may choose from. As for OSHA - End the whole damn thing today. There's no need for OSHA whatsoever, as you said, private industries already established most of the OSHA regulations themselves. Self-Regulation is the key and is a natural market condition.

http://en.wikipedia.org/wiki/Private_highways_in_the_United_States

Please read up about the subject. Privatization of highways is certainly the key to having considerably better infrastructure. Notice how infrastructure in the U.S. is crumbling? As you said, people don't like paying more in taxes. This is why it is virtually impossible to have public roads with enough funding to be effective. Private roads would get enough funding and would be run more efficiently which would assure they would be better maintained and considerably safer than the public ones we see now.
  
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Re: Fixing Federal Taxation
Reply #78 - Dec 13th, 2013 at 1:03pm
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Liberalterian wrote on Dec 13th, 2013 at 11:48am:
http://en.wikipedia.org/wiki/Private_highway
Besides that, as I said, the roads could be built by the state. THEN we could add a lane or two right next to the state highway which is privately built and owned and operated. People could choose to use the crumbling and packed public roads or they could choose the state of the art privately owned and operated roads instead.


LOL I'm a "capitalist" so as the "government" if I was to lease the land for the right of way for the private enterprise the price would be high enough go cover all of the costs of the public highway. I oppose government subsidies for private enterprise and not charging enough for the right of way would be a government subsidy.

If I was the "government" and I sold the land to private enterprise then the cost would include the costs of the public highway and the property taxes would pay for the maitenance of the public highway.

Either way it places the costs so high that a private enterprise would be unlikely to purchase or lease the right of way.

I would also be opposed to duplicate roadways because of the environmental damages caused by two as opposed to one.

I would also oppose the government forcing property owners to sell their land for a private enterprise under "Eminent Domain" laws so they could build a road.

We really come down to numerous problems with private enterprise building highway systems.
  
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Re: Fixing Federal Taxation
Reply #79 - Dec 26th, 2013 at 9:33am
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I would like to continue to address a critique of my tax proposals by "libertarians" as I've already addressed the issues and concerns of "social conservatives" (i.e, Republicans) and "progressive liberals" (i.e. Democrats) on other forums.

What opinions, for example, do "libertarians" have about my proposal to privatize Social Security which will virtually elminate it and completely eliminate Medicare?

We've seen proposals for privatization by "Republicans" but they all were based upon converting at age 55 but to build the assets necessary to retire on requires the entire working career of the person. They also merely "replace" Social Security with the same piss-poor benefits that Social Security currently offers. My proposal results in the People being at least four-times better off at the end of the transition period than the current Social Security/Medicare programs (which is why Democrats eventually supported it).

As I noted on the "Local Government" thread a libertarian must come up with a "win-win-win" scenerio where it would garner support from Republicans, Democrats, and Libertarians based upon pragmatic libertarianism and that is what I attempted to achieve.

As a Libertarian I didn't especially like forcing people to invest in their future but historically about 1/2 of the workers in America won't unless they're forced to do so. If they don't then they end up being a burden on society as we cannot simply let them starve to death or be homeless. The best I could come up with is forcing them to invest in their future but where the money remained "theirs" and was not collected as taxation and "owned" by the government. I would much rather force a person to invest in their future than be taxed to support them when they're too old to work and can't afford to eat or have a roof over their heads.

A "responsible" person would invest on their own anyway so the "privatization" is really only addressing the "irresponsible" in society anyway. My proposal isn't "idealistic" but instead is based upon a pragmatic necessity to address the irresponsibility of about 1/2 of the American population when it comes to their own future.

So what are the "Libertarian" opinions on "privatization" of Social Security that I proposed?
   
  
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