bank secrets

[kandrathe]

If ever there was an argument for a flat tax, it's Warren Buffett's rather simple empirical point that he, and those as wealthy as he, pay less % of their income in taxes than do their secretaries. I favour less flat tax systems, but step one would be to make it *at least* progressive enough to be flat!

Some people (like Mr. Buffet) like to compare tax as a percentage of income, but the top 10% still pay 65% of the tax. The top 50% pay 96.03% of the tax revenue.

How does reducing the number of brackets help? Also, this would be a *gigantic* tax cut. Like "whoops, where did our trillions go". At the very least, you'd need to deal with the debt first.

Maybe, and maybe not. I would try to shift the burden away from only income taxes. You are correct though, the debt is an obstacle now. During Bush, we could barely hope to grow our way out of the debt. But the last quarter of the Bush presidency put the debt beyond our ability to pay back through growth. We spend more than we collect in revenue, and now, we always will. You might say, "Raise taxes", but that has shown to be a way to cut jobs and reduce revenues.

Why no exception for food? Medicine? You're already making people below the poverty line pay 10% of their income. Why tax them on the basics?

If we keep things simple, we don't need to argue about whether twinkies and viagra should be taxed or not.

Right, because the individual States have proven themselves to be so much better guardians of the public trust than the Feds. (...)

If your State does not serve you well, then vote the bums out of office and choose better public servants.

On the basis of what? Economic geography suggests that some regions are going to be able to collect a hell of a lot more tax than others, simply on the basis of agglomeration effects. Is it really sensible to have no inter-regional tax movement? How is letting the rich areas keep their riches, and the poor keep their paltry tax incomes more or less fair than having the feds collect it?

The places with more people need their revenue to take care of their own people. What we get away from are the impetus for pork to make ourselves feel that federal tax is fairly distributed to the States. (e.g. South Dakota needs an interstate highway why? Leaving quickly?) Large states end up on the short end (per capita) of federal spending.

Why eliminate non-profit corporations, but preserve tax exemptions for churches? Wouldn't that just create a systemic bias in favour of religious charity, for no better reason than that it's religious?

To preserve establishment clause of the Constitution.

Why eliminate the estate tax, instead of just giving exemptions for businesses up to a certain size? Or just giving a blanket minimum exemption that would cover everyone up to a certain amount, regardless of its form? Estate taxes are one of the most efficient ways to tax enormous pools of accumulated wealth; they're just about the most progressive kind of tax you can get. Why not make them work by closing loopholes, rather than abolishing the tax and creating what amounts to a 100% loophole?

I want the system to be very clear. To start sloshing around with allowing some, and disallowing others becomes arbitrary. I don't think it is possible to allow people the freedom to spend their money, and also close the loopholes for inheritance. They move it into rare paintings, or other collectible goods that cannot be tracked, or can be tucked away in home safes or safety deposit boxes. Heck, the most popular vehicle for the ultra rich is to start a non-profit charitable foundation with your heirs in charge of the disbursements. They of course draw large salaries, and may not ever disperse any funds to charity.

Okay, so that would cost a lot. You'd keep a lot of corporations at home, for sure, but you'd lose a gigantic revenue stream. Adjusting for positives and negatives, as you say, plenty of corporations seem to find the US an attractive place to do business, despite relatively high corporate taxation. (Loopholes may have something to do with this, but still.)

You would more than make up for the loss of corporate tax with the revenue from the increase in GDP.

You would be wrecking what little incentive there is for exceptional (definitionally, not median) people to go into government. There would be no career in it (12 year maximum) and no money in it (median income is not a heck of a lot for the best and the brightest).

We need to get out of the mind set that serving as a representative of the people is a career. You can be a career public servant if you like, but your salary increases will come by raising the standard of living for everyone.

You would also drain the human capital pool in government automatically; as soon as people have learned the ropes, and are able to pass on knowledge to the next generation of politicians, or to move up the ranks to a higher post, you'd have booted them out forever. I'm economist enough to think this incentive system would be disastrous.

Our best and brightest grads need to be dynamic contributors to the economy, not feeding at the trough of government. Look at our politicians, look at the mess the USA is in, and tell me you need an IQ greater than 100 to do what they have done.

Wow. That's even more draconian than what I'd do. The 2008 prez candidates spent something like a billion dollars. You'd be restricting them to half a million, cutting them down to 0.05%! Needless to say, the race would look very different. They wouldn't be able to travel, to hire staff, or to buy a single commercial (not a problem, since those are banned anyway.) At that budget, lawn signs would probably be off the table.

Campaigns need to be shorter, not run over a 4 year period. Candidates need to communicate what their ideas are, rather than continuously drag down their opponents. I don't think it should take a billion dollars to run for President.

As for billionaires buying seats, I don't think they succeed too often at that. People tend to resent it, and no amount of money buys an election when the voters resent you.

They don't get caught doing it too often. But it is quite common for motivated wealthy people to fund the campaigns for the people they want in power, which is not representative democracy when they don't live in the geography of the candidate they are funding.

This really is going deep... you'd undo Alexander Hamilton's work? Go back to pre-presidential Jeffersonian ideas? Wow. The entire modern financial state would cease to exist, which might be a good thing, but it certainly would be a shock.

The alternative is to have what we have now, a USA that must choose now between printing money causing the regressive tax of inflation, raise more tax revenue further damaging the economy, or defaulting on its debt obligations which again will destroy the economy.

You seem to have a very definite way of using the term "fair". I'm not sure I understand what it is, or how you manage to escape the category of "what some people think" is fair, and place your beliefs in the category of what "is" fair.

My definition of fair puts the burden of paying for the federal government at everyones feet. This makes citizenship important, it makes voting important, and it makes participation important. Should their be a safety net, sure by all means implement and fund that at the State level. Fair to me, means that you get what you pay for, and you only pay for what you get.