U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Great Debates
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 09-24-2008, 09:00 PM
 
702 posts, read 2,016,284 times
Reputation: 649

Advertisements

In Europe, one of the Scandinavian countries, not just taxes - but petty fines - are based on one's income.

While the average person might be fined a couple hundred for driving over the speed limit, a wealthier person will be fined a couple thousand. Same difference, right?
Reply With Quote Quick reply to this message

 
Old 09-25-2008, 06:56 AM
 
19,183 posts, read 27,737,865 times
Reputation: 4000
Quote:
Originally Posted by ParkTwain View Post
Does the word 'disingenuous' come to mind?
Yes, along with some others. The laughable nature of many of these self-reliant, self-made man arguments would make them prime material for an SNL skit if some of these people didn't actually take them seriously. We all stand on the shoulders of those who came before us. We all depend on each other simply to survive. But these evident facts seem somehow to escape the attention of those self-proclaimed lone wolves and wild stallions among us. In some cases, I don't think they realize what absurd caricatures they make of themselves in advancing their peculiar social views and philosophies...

Last edited by saganista; 09-25-2008 at 07:14 AM..
Reply With Quote Quick reply to this message
 
Old 09-25-2008, 07:11 AM
 
19,183 posts, read 27,737,865 times
Reputation: 4000
Quote:
Originally Posted by fnord View Post
In Europe, one of the Scandinavian countries, not just taxes - but petty fines - are based on one's income. While the average person might be fined a couple hundred for driving over the speed limit, a wealthier person will be fined a couple thousand. Same difference, right?
Same principle. To a wealthy person, getting say three speeding tickets per year at $200 a pop is no different from offering a permit to perpertually ignore and disobey all speed laws that comes with a $600 annual renewal fee. This is chump change to them. The impact of the fines is considerably less than that of the personal inconvenience involved in being pulled over for five minutes each time while the officer writes the ticket. If you want to "incentivize" or otherwise get the attention of a wealthy person, you have to start talking about some serious dollars...
Reply With Quote Quick reply to this message
 
Old 09-25-2008, 05:44 PM
 
Location: Texas
5,070 posts, read 8,765,860 times
Reputation: 1627
Quote:
Originally Posted by saganista View Post
As in being an incomplete pie-in-the-sky scheme dressed up in the great traditions of Creation Science to look like the real deal, but in actuality being so full of holes and inconsistencies as to be not at all acceptable as a plan that is ready for practical application. Have your people clean this idea up some, then we'll see if it can fly. As is, it's a non-starter...
Ah (light bulb coming on,) a Bruce Bartlett admirer. That answers a few questions.

If you have anything more specific, I'd be happy to reply.
Reply With Quote Quick reply to this message
 
Old 09-25-2008, 06:41 PM
 
19,183 posts, read 27,737,865 times
Reputation: 4000
Quote:
Originally Posted by Brian.Pearson View Post
Ah (light bulb coming on,) a Bruce Bartlett admirer. That answers a few questions. If you have anything more specific, I'd be happy to reply.
Don't care two hoots about Bartlett one way or the other. But various of his criticisms of the Fair Tax are well drawn, as we've discussed before. Meanwhile, the points below were posted earlier in the thread. They didn't draw much in the way of intelligent response back then...

First, the stated Fair Tax rate of 23% is deceptive because it is stated on an inclusive basis, whereas people are accustomed to speaking of sales tax rates on an exclusive basis. Under a 23% rate, people would expect to pay $123 in total for an item with a purchase price of $100. But they will actually pay $130 in total under the Fair Tax, because the 23% rate is calculated as 30/130, not 30/100. Thus the true Fair Tax rate, even as proposed, is 30%. Why is the Fair Tax rate stated this way? Because surveys showed that popular support for flat-tax proposals faded rapidly from substantial to zero as the rate moved beyond the low 20's.

Second, the calculations that purport to show that a Fair Tax rate of 30% will be revenue neutral are pie in the sky. They assume for instance that nearly 100% of the cost of preparing corporate tax returns can be recaptured. They assume that nearly 100% of the cost of operating the IRS can be recovered. What sort of offsets do you see included for the costs of unemployment, retraining, and other forms of assistance to the tens if not hundreds of thousands of tax lawyers, accountants, data-entry clerks, and computer operations staff who would all be thrown out of work on the day the Fair Tax went into effect? Where do you see the costs of the large new bureaucracy needed to track and verify the nature and location of every household in the country so that monthly prebate checks can be mailed to them figured in? What sort of offset do you see for the increased state and local taxes that will need to be imposed so that states and localities can afford to pay the new 30% tax on their own purchases of new goods and services?

Third, proponents of the Fair Tax assume that they can achieve at least close to 100% penetration into transactions in new goods and services, when existing state and local sales tax regimes barely reach a 50% penetration level. A part of that shortfall can be made up by taxing new services that state taxes currently exempt (such as the interest portion of your monthly mortgage payment to the extent that its stated rate exceeds the 10-year T-bill rate), but dreams of reaching anything approaching 100% are just that.

Fourth, by collecting 100% of all taxes at a single point in the production process (the point of final sale), Fair Tax plans create a huge incentive for fraud. Similar plans such as Euro-style VAT schemes get by with significant but tolerable rates of fraud only because taxation is imposed at each step in the production process, thereby limiting the degree to which any individual scheme can have an impact on revenues.
Reply With Quote Quick reply to this message
 
Old 09-28-2008, 12:02 AM
 
Location: The Netherlands
8,567 posts, read 14,516,394 times
Reputation: 1573
Who cares if it is fair that the top 5-10% pay the majority of the taxes when life in general isn't fair?
The extremely wealthy should just stop whining about paying more taxes and woman up ( instead of man up, since men are generally more inclined to be egocentric than women).
Reply With Quote Quick reply to this message
 
Old 09-28-2008, 01:04 AM
 
4,268 posts, read 13,712,106 times
Reputation: 3338
Quote:
Originally Posted by walidm View Post
[b]Is it fair that the top 5-10% pay the majority of taxes?
Great question and I see that we have many responses. What you are asking is actually one of the four standards for a good tax. Adam Smith's The Wealth of Nations was one of first books to introduce this concept. The qualities are that a good tax should be sufficient, convenient, efficient, and lastly, fair.

As the 25 pages of responses prove, many of us essentially believe that our own tax burden is too heavy while everyone else's is too light. That idea is just the nature of "tax equity". We, as citizens, all have an obligation to contirubute to the support of government and this support reflects a person's ability to pay. In tax terms, this is in reference to the monetary or economic resources under a person's control. You see this concept at work every day. Income tax represents an individuals cash inflow; excise and sales tax represents consumption of resources. You get the idea.

We also need to look at what is equitable? Are talking about from a horizontal or vertical perspective? What I mean by that is are we saying a fair tax is 1.) everyone with the same ability to pay owe the same amount of tax (horizontal equity) or 2.) people with a greater ability to pay owe more taxes than persons with a lesser ability to pay (vertical equity)?

Horizontal equity

Inevitably, tax preferences will distort any kind of horizontal equity of an income tax. For example, you've got 2 different businesses that both make $20,000/year. Given that all things are equal exept one thing: one business qualifies for $6,000 in tax preferences. Now the horizontal equity is distorted. One business has to pay taxes on the entire $20,000, while the other who also made $20,000 can benefit from the tax preference and only need to report $14,000 in taxable income. Fair?

Or, you've got individual A and individual B both making $50,000/year. Sounds horizontally equitable to me. However, Individual A has a host of health problems and spends close to $10,000/year on medical expenses. Individual B pays alimony but under no legal obligation. So do both inviduals have the same ability to pay?

Vertical Equity

This gets even more complicated because of the various rate structures out there: regressive, proportionate, progressive. Just in case there are those unaware, the American tax system is vertically progressive. That means tax rates go up as one's income increases.

Regressive means that the more income tax you have, the less you pay, even though it looks like you pay more. For example, Individual A owns a property worth $500,000 and his tax is $10,000 (2% of $500,000). Individual B owns a property worth $1.5 million and her property tax is $25,000 (2% of $1Million + 1% of $500,000). It looks like individual B is paying more taxes but in actuality, she is not. On the outside both taxes are horizontally and vertically equitable but check out the average rate: Individual B is paying an average tax rate of 1.67% ($25,000/$1.5million) and Individual A is paying an average tax rate of 2% ($10,000/$500,000). This type of structure actually puts a heavier burden on the persons with the smaller tax base.

Proportional rate structure is pretty easy to understand. Basically, everybody pays the same % regardless of income. State sales taxes usually follow this structure.

So is our current tax rate structure really fair? I guess it depends on who you are asking!

I hope I was able to add to this discussion and bring new perspective to what everybody has discussed! My source is from the textbook Principles of Taxation for Business and Investment Planning 2009. Pretty interesting stuff because I never really thought about how truly complicated and depth taxes can be. It's mind boggling!
Reply With Quote Quick reply to this message
 
Old 09-28-2008, 10:31 AM
 
19,183 posts, read 27,737,865 times
Reputation: 4000
No, tax policy is not at all as easy as it looks or sounds, but at least to me it's seemed more a matter of being complex than complicated, complexity being usually easier to get a grip on than complication. Have fun with it. As sandboxes go, this can be a pretty intriguing one to mess around in...
Reply With Quote Quick reply to this message
 
Old 09-28-2008, 10:35 AM
 
Location: Pinal County, Arizona
25,107 posts, read 34,361,805 times
Reputation: 4893
Quote:
Originally Posted by Tricky D View Post
Who cares if it is fair that the top 5-10% pay the majority of the taxes when life in general isn't fair?
You are out of your league here - and your country
Reply With Quote Quick reply to this message
 
Old 09-28-2008, 11:48 AM
 
Location: The Netherlands
8,567 posts, read 14,516,394 times
Reputation: 1573
Originally Posted by Greatday
Quote:
You are out of your league here - and your country
LoL our rich already pay the most taxes, since we believe that everyone, whether they are young or old, rich or poor deserve proper health care and our 'socialistic' ideals guarantee that we, the Dutch citizens, get it.

FYI our Dutch economy (read: our Dutch banks) is more solid than yours; just take a look at our Euro and your $.
Besidez, our government doesn't encourage the exorbitant bonuses and golden parachutes most CEOs in America get for taking great risks.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Great Debates
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top