gross national hapiness index

[Jester]

But... All of this is why I liked Cain's plan for a national sales tax. You really can't jack up the investment tax to the income tax level without harming new venture investment in the US. You can't lower the income taxes to the investment level without skyrocketing the deficit. You can attempt to lower the cost of government through wise choices on services, but there is a point when the pain is unbearable. Cain's idea was to lower income taxes (to 9% flat), and investment taxes(to 9%) flat, and make up the difference with a 9% federal sales tax. It makes a good sound bite, and I'm pretty sure it was unworkable at those rates. But even a 15 - 15 - 5 plan would bring parity to income derived from work with income derived from investments. I like consumption side taxes rather than production side taxes as it encourages savings and investments, and discourages excess consumption.

And how would this tax not be sharply regressive, compared with what is currently in place?

-Jester

[kandrathe]

And how would this tax not be sharply regressive, compared with what is currently in place?

I think you could do that by providing a progressive tax credit based on number of dependents on the other income taxes they would pay.

You can pretty much model what a typical family spends per year per person on sustaining themselves, then figure what they'd pay in sales taxes on that sustenance. Adjust progressively as needed on their income taxes. Then, there are those who don't have any income... People on government support would have a "tax free" debit card they use to spend their government provided income.

It would help greatly if tax rates were tied to zip codes to balance regional issues.

[Jester]

I think you could do that by providing a progressive tax credit based on number of dependents on the other income taxes they would pay. People on government support would have a "tax free" debit card they use to spend their government provided income.

Or you could just make the income tax system progressive, which is the same thing with one less step, and no "card of shame".

-Jester

[kandrathe]

Or you could just make the income tax system progressive, which is the same thing with one less step, and no "card of shame".

Well, what are food stamps? The debit card wouldn't need to be neon red/white/blue and play the star spangled banner. And... I don't see it as the same. The idea would be that everyone pays the government the same lower tax rates, except those who are poor and need relief. The current scheme is to attempt to extract as much from the income side as possible, but because of special interests the laws eventually erode to exclude more and more of those with the money to buy influence. What ends up happening repeatedly is that the middle carries almost all the burden, since they don't have lobbyists in DC.

The problem I have with our current Progressive scheme is that our multi tiered system masks enough complexity to hide their intricate corruption. I'm in favor of making it really, really simple with only exceptions for poor people.

[Jester]

Well, what are food stamps?

An infantilizing device for controlling poor people, so that they don't spend their money on things the government doesn't like?

The debit card wouldn't need to be neon red/white/blue and play the star spangled banner. And... I don't see it as the same. The idea would be that everyone pays the government the same lower tax rates, except those who are poor and need relief. The current scheme is to attempt to extract as much from the income side as possible, but because of special interests the laws eventually erode to exclude more and more of those with the money to buy influence. What ends up happening repeatedly is that the middle carries almost all the burden, since they don't have lobbyists in DC.

Okay, so just don't charge the poor the taxes in the first place - progressivity. No middle class person is going to get a lobbyist in DC on the basis that we raised their taxes. What would change in the new system, that would prevent capitalists from just using it to their advantage all the same?

The problem I have with our current Progressive scheme is that our multi tiered system masks enough complexity to hide their intricate corruption. I'm in favor of making it really, really simple with only exceptions for poor people.

Simple, almost everyone can agree on. But, it's as Chomsky said about peace - everyone's for it, but nobody can agree on the conditions.

-Jester

[eppie]

To AngrieCommie's (Edit: whoops, Eppie's) original point, here in Canada we have an investment vehicle (they call it a "Tax-Free Savings Account" or TFSA) which allows for investment income to not be taxed at all. Granted, there is a limit to what you can contribute and withdraw from the TFSA, but in my experience it's been a fairly popular policy across most of the population, including myself. A lower tax rate on investment income, capped or progressive instead of flat, isn't necessarily a Rich-first policy. In my opinion it can provide significant benefit both at the individual and economy-wide levels.

I agree; investing (or basically saving) money should be a positive thing. It is much better than borrowing money right. SO I must say that I am in favour of non (or low) taxed investment opportunities.....up to a certain amount of course.....not to make it just something for the very rich.

[kandrathe]

An infantilizing device for controlling poor people, so that they don't spend their money on things the government doesn't like?

Like booze, heroin, hookers, and cigarettes? The government is no fun (unless you are in congress and put it on your expense account). I wonder how much our Presidents star studded exclusive Halloween party cost?

[Jester]

Like booze, heroin, hookers, and cigarettes? The government is no fun (unless you are in congress and put it on your expense account). I wonder how much our Presidents star studded exclusive Halloween party cost?

Nobody checks anyone else's tax deductions to see if they're spending it on booze, heroin, hookers and cigarettes. Did the government issue "banking stamps" when they bailed out the financial system? How much of that got spent on hookers and blow?

Paternalism is only for the poor. Everyone else, we trust to maximize their own utility.

-Jester

[kandrathe]

Nobody checks anyone else's tax deductions to see if they're spending it on booze, heroin, hookers and cigarettes.

The average person earning a living isn't asking the government for relief (ostensibly for food, clothing, shelter, medicine). But, I would bet that if the IRS found this stuff as deductions in an audit you'd be in a little hot water.

Did the government issue "banking stamps" when they bailed out the financial system? How much of that got spent on hookers and blow?

Paternalism is only for the poor. Everyone else, we trust to maximize their own utility.

It's more that the money is "The People's" money, before they give it away. So Congress feels those attached strings are appropriate.

[Jester]

The average person earning a living isn't asking the government for relief (ostensibly for food, clothing, shelter, medicine). But, I would bet that if the IRS found this stuff as deductions in an audit you'd be in a little hot water.

Remember that, in your tax plan (as you've described it) this is not relief. This is a fundamental feature of the tax system for anyone not earning over a certain threshold.

It's more that the money is "The People's" money, before they give it away. So Congress feels those attached strings are appropriate.

Obviously, the political system's decisions reflect the will of the congress. But that would be true no matter how smart or stupid the decisions.

The government gives away loads of free money, for all sorts of things. When the government tried putting strings on the free money they showered on the banking system, there was a great wailing and gnashing of teeth: Socialism! How dare the government dictate how we use their free money!

There are all sorts of redistributive channels. Almost everyone benefits from at least a handful of them. But some people have to jump through humiliating hoops, and other people get buckets of cash dumped on their doorstep, no questions asked.

-Jester

[kandrathe]

There are all sorts of redistributive channels. Almost everyone benefits from at least a handful of them. But some people have to jump through humiliating hoops, and other people get buckets of cash dumped on their doorstep, no questions asked.

Washington's cavalier attitude about our money is something that needs to end.

GSA Conference Video Shows Lavish Vegas Spending

[Jester]

There are all sorts of redistributive channels. Almost everyone benefits from at least a handful of them. But some people have to jump through humiliating hoops, and other people get buckets of cash dumped on their doorstep, no questions asked.

Washington's cavalier attitude about our money is something that needs to end.

GSA Conference Video Shows Lavish Vegas Spending

Appearances aside, it won't end. And, if it did, you wouldn't notice more than pennies off your tax bill. The overwhelming majority (like, 99%+) of Federal spending is on actual stuff, bombs and social security cheques and embassies and aircraft carriers and health care, not parties in Vegas and the like.

-Jester