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Equality 7-2521 View Drop Down
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Direct Link To This Post Posted: September 30 2010 at 09:44
Originally posted by Negoba Negoba wrote:

I'm not married to any particular tax scheme so I'm just working this out in my head.

We'd have to have local, state, and federal sales taxes which would increase some of the administrative costs.
 
We'd have to have some tiering of tax% based on "basic necessities" vs. luxury items like porn and heroin. (though MOM my argue those are basic necessities)
 
One of Dean's objections is that it shifts the administrative burden from the individual (earner) to the seller / business owner. But as most sellers are also are employers, they already have the administrative costs involved with witholding for those taxes. (One could argue they still would have much of this because of Social Security, Medicare) Rob's point seems to be that shifting to a consumption tax would not cause a significant increase in resource drain on businesses.
 
Prices would go up, but people would have more in their pockets to spend.
 
 
 
***I wonder what the effect on American Health would be if grocery store food was untaxed but restaurant food was. Even if you eat bad food, having to prepare it yourself in even a minimal way slows down the process.


Businesses already have to handle the withholding part of the income tax. I'm not sure it'd be any more of a burden.
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Direct Link To This Post Posted: September 30 2010 at 09:58
Originally posted by Equality 7-2521 Equality 7-2521 wrote:



Businesses already have to handle the withholding part of the income tax. I'm not sure it'd be any more of a burden.
 
Maybe my wordiness was in effect. I actually agree. The biggest thing if we shifted taxation completely to sales would be vendors having to route and track taxes to multiple sources.
 
What does the gallery think of property tax? It makes some sense theoretically but in practice is a convoluted mess, IMO.
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Direct Link To This Post Posted: September 30 2010 at 10:00
Originally posted by Negoba Negoba wrote:


 
What does the gallery think of property tax?

I wince when I have to write the check, that's what I think.  Particularly this year, when it went up 11%.
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Direct Link To This Post Posted: September 30 2010 at 10:09
Originally posted by Negoba Negoba wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:



Businesses already have to handle the withholding part of the income tax. I'm not sure it'd be any more of a burden.
 
Maybe my wordiness was in effect. I actually agree. The biggest thing if we shifted taxation completely to sales would be vendors having to route and track taxes to multiple sources.
 
What does the gallery think of property tax? It makes some sense theoretically but in practice is a convoluted mess, IMO.


Oh ok, sorry I misunderstood.

I don't agree with any tax. To give a scale I hate it less than the income tax and the estate tax, but more than the sales tax.
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Direct Link To This Post Posted: September 30 2010 at 12:13

So in response to a few older "what would that look like?" questions.

 
I've always thought of an individual's social connections as concentric circles. A traditional model would be individual, couple, nuclear family, extended family, neighborhood, village, state, country, world...etc.
 
Over time with increased mobility, the intermediate groupings have gotten less and less important in the life of the individual. In many cases, it's nuclear family and the world for all practical purposes. (obviously this is an exaggeration).
 
To me, two things would improve the way we work society.
 
A) restoration of roles of intermediate groupings of people. (this has to come bottom up, legislation might grease the wheels but it could never be enforced.)
 
One of the major benefits is an eloboration of the old "it takes a village to raise a child." We bemoan the fact that many children are born to single mothers. But we neglect the fact that those children (much of the time) are often raised not by the mother but by an entire extended family. Even in two adult households, readily available Aunts Uncles and Neighbors (multiple generations) makes child care less of a crisis than it is now. Similarly, care of the old can be naturally distributed rather than done badly by an industry that is under-resourced with low-skill workers.
 
B) whenever possible, decisions (power) should be relegated to the lowest possible level that is functional. Decentralization favors diversity which allows the new growth that makes any organism flourish. As such, the highest levels of organization should have only the power they absolutely must.
 
Money should also remain as close to the simplest structures as possible. If it can be done locally, it should. Pooled money and resources are necessary for some societal functions. But whether you call this taxes or whatever, it needs to be extremely transparent for those involved, but minimally transparent for those outside. Thus, I'm not opposed to taxes, but would prefer if most of it stayed local and I could personally look at the books and that the budget would be small enough I could actually get through it in a reasonable amount of time.
 
 
 
Right now our society is very top heavy. There are some advantages to division of labor and using the work of the many to achieve tasks. But the individual has been completely removed from decision making all too often, both in private business matters and in public representation.
 
That's enough for now. If anyone wants to talk about this great. If not just burp a "meh."
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Direct Link To This Post Posted: September 30 2010 at 12:22
Jay, I've been thinking about very similar things.  The thought occurred to me the other day:  we'd probably be better off if that local election that no one ever cares about was actually the most important election in our life, and the presidential/Congressional elections the least important.
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Direct Link To This Post Posted: September 30 2010 at 12:39
Bring back the Articles of Confederation. 
"One had to be a Newton to notice that the moon is falling, when everyone sees that it doesn't fall. "
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Direct Link To This Post Posted: September 30 2010 at 12:43
What I have noted here in the US is that same concept of "local" is diffuse, difficult to point at. I notice lack of of a sense of belonging to a town, to a city, to a place, where all that Jay said could be real. That has relationship with the nature of this country, its size, and its economy. People have less contact with their community and family as they move out to other places to get better jobs. I've never seen in other places what I see here in the US: people seldom, if ever, live all their lives in the same place they were born. What Jay is implying is a move towards collectivism (not economical, social) that I think is utterly impossible in the US which is going in the other direction, towards full-fledged individualism. I guess demographic changes can alter that (hispanics are different in that regard) but even them assimilate into the culture. 
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Direct Link To This Post Posted: September 30 2010 at 13:18
The US is further from individualistic than it has ever been

I don't get your notion that people are not community oriented in this country. I know being neighborhood conscious is a Philly-type thing, but I can't imagine it's that foreign to the rest of the country.
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Direct Link To This Post Posted: September 30 2010 at 13:24
Originally posted by Equality 7-2521 Equality 7-2521 wrote:

The US is further from individualistic than it has ever been

I don't get your notion that people are not community oriented in this country. I know being neighborhood conscious is a Philly-type thing, but I can't imagine it's that foreign to the rest of the country.
 
It is not common in the cities I have lived in (Chicago, Minn/St. Paul, St. Louis). There are pockets of neighborhood identification (and as Teo said that is often ethnic more than anything) but even then it's nothing compared to the rural communities I've lived in. But rural communities have limited job opportunities (especially for skilled workers) and the youth flight to the city is well documented.
 
I think that traditionally, when you say "individualistic" you may actually be talking about the smaller intermediate levels. "Keep it in the family," "We'll take care of this at home." etc. People were not traditionally as individualistic in terms of the single being.
 
 
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Direct Link To This Post Posted: September 30 2010 at 14:20
Originally posted by Equality 7-2521 Equality 7-2521 wrote:

Bring back the Articles of Confederation. 
 
Only half-joking? The Articles certainly conformed to some of the principles you hold dear. (No taxation, minimal Federal Power).
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Direct Link To This Post Posted: September 30 2010 at 14:47
Originally posted by Negoba Negoba wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:

The US is further from individualistic than it has ever been

I don't get your notion that people are not community oriented in this country. I know being neighborhood conscious is a Philly-type thing, but I can't imagine it's that foreign to the rest of the country.
 
It is not common in the cities I have lived in (Chicago, Minn/St. Paul, St. Louis). There are pockets of neighborhood identification (and as Teo said that is often ethnic more than anything) but even then it's nothing compared to the rural communities I've lived in. But rural communities have limited job opportunities (especially for skilled workers) and the youth flight to the city is well documented.
 
I think that traditionally, when you say "individualistic" you may actually be talking about the smaller intermediate levels. "Keep it in the family," "We'll take care of this at home." etc. People were not traditionally as individualistic in terms of the single being.
 
 


Correct that is what I meant. I don't think people are now either.
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Direct Link To This Post Posted: September 30 2010 at 14:47
Originally posted by Negoba Negoba wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:

Bring back the Articles of Confederation. 
 
Only half-joking? The Articles certainly conformed to some of the principles you hold dear. (No taxation, minimal Federal Power).


Not half-joking. I would fully support the AoC over the Constitution.
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Direct Link To This Post Posted: September 30 2010 at 15:03
There are things I like very much about the Articles of Confederation. And yet the country was failing under that model at that time. It would be interesting to see how it would work now. I suspect we are more centralized now than even the Federalists hoped for, but who knows.

Edited by Negoba - September 30 2010 at 15:14
You are quite a fine person, and I am very fond of you. But you are only quite a little fellow, in a wide world, after all.
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Direct Link To This Post Posted: September 30 2010 at 18:42
Originally posted by Epignosis Epignosis wrote:

Originally posted by Negoba Negoba wrote:

 
 
 
***I wonder what the effect on American Health would be if grocery store food was untaxed but restaurant food was. Even if you eat bad food, having to prepare it yourself in even a minimal way slows down the process.


That's a good point.  Grocery store food here is untaxed, while restaurant food is taxed.
What is taxed is the value added to the food by the restaurant, not the raw materials themselves. A T-bone steak and fries costs the restaurant less than you can buy it at the grocery store if you want to cook it yourself - what you pay extra for is the service the restaurant provides in preparing, cooking, serving and clearing-up after you and that's what is taxed.

Edited by Dean - September 30 2010 at 18:43
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Direct Link To This Post Posted: September 30 2010 at 19:04
Originally posted by Epignosis Epignosis wrote:

Originally posted by Dean Dean wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:

It's amazing how people defend the income tax like it's their child. 
I'm not defending income tax - I'm trying to see why consumption tax is any better, and Rob's responses thus far haven't done that. All I get is we already have a consumption tax and that's not an answer that convinces me of anything.


I did give reasons why a consumption tax is better than an income tax, but you didn't get one of them, you said you weren't sure what I meant about another one, and a third one you conceded was a "plus" for consumption tax.

You "passing" on the good reasons I gave isn't the same as saying I didn't have good reasons.
Sorry, I didn't realise they were the main reasons, I thought they were just the icing on the cake - I was hoping for something more substantial.
 
I'm not getting involved in privacy of earnings discussions because I believe it is a divisive method of wage control that protects the empoyer more than the employee. I would imagine that no one else on this planet would have that view, so I don't see any point in discussing it wrt consumption tax. If that's being dismissive, then so be it.
 
Eventhough the venture capitalists who own the company I work for are American, I'm not in America and I don't have an American paycheque with the same deductions as you - my deductions are income-tax, pension and national insurance - eliminating income-tax only removes one of those deductions from my payslip - so when I say "Not sure what you mean by eliminating deductions" that's pretty much what I mean. If that's being dismissive, then so be it.
 
 
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Direct Link To This Post Posted: September 30 2010 at 19:23
 ^ Further, the whole line of "It's the business owners that provide employment and therefore shore-up the economy" may be true, but it's equally true that an owner almost always hires because they need help; they aren't doing it as a favor to society or their community, they're doing it cause they want to have a business and need employees.  Entrepreneurship is a great thing - I was self-employed for years and it had some very appealing aspects so I'm not knocking owners - but the Conservative stance that employers are somehow more important to the running of an economy than the people they hire is disingenuous.


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Direct Link To This Post Posted: September 30 2010 at 19:32
Originally posted by Dean Dean wrote:

Originally posted by Epignosis Epignosis wrote:

Originally posted by Dean Dean wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:

It's amazing how people defend the income tax like it's their child. 
I'm not defending income tax - I'm trying to see why consumption tax is any better, and Rob's responses thus far haven't done that. All I get is we already have a consumption tax and that's not an answer that convinces me of anything.


I did give reasons why a consumption tax is better than an income tax, but you didn't get one of them, you said you weren't sure what I meant about another one, and a third one you conceded was a "plus" for consumption tax.

You "passing" on the good reasons I gave isn't the same as saying I didn't have good reasons.
Sorry, I didn't realise they were the main reasons, I thought they were just the icing on the cake - I was hoping for something more substantial.
 
I'm not getting involved in privacy of earnings discussions because I believe it is a divisive method of wage control that protects the empoyer more than the employee. I would imagine that no one else on this planet would have that view, so I don't see any point in discussing it wrt consumption tax. If that's being dismissive, then so be it.
 
Eventhough the venture capitalists who own the company I work for are American, I'm not in America and I don't have an American paycheque with the same deductions as you - my deductions are income-tax, pension and national insurance - eliminating income-tax only removes one of those deductions from my payslip - so when I say "Not sure what you mean by eliminating deductions" that's pretty much what I mean. If that's being dismissive, then so be it.
 
 


Oh! Shocked

Cultural-linguistic interference here.  That's what we get for speaking English to each other! Embarrassed

When I talk of invasion of privacy, I mean that the government gets to know more about us than we should have to share with anybody, largely because we have to file a tax return and file deductions.

That's one big screwy term for us then: Deductions.  When I spoke of deductions, I meant the exemptions on our income we claim each year when we file taxes.  What you described as deductions, we call "withholdings."  We get social security withheld from our paychecks, but deductions are things like medical expenses, business expenses, gambling loses, charitable contributions, mortgage interest, etc. which make more of our income tax-exempt (and therefore we pay less income tax).



Edited by Epignosis - September 30 2010 at 19:33
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Direct Link To This Post Posted: September 30 2010 at 20:07
Originally posted by Epignosis Epignosis wrote:

Originally posted by Dean Dean wrote:


Your fifth and sixth words are the worst.
 
I love that minimum wage one. Heard it once, liked the sound of it, chuckled at it ever since. It was specious then it's specious now. The number of people on minimum wage is hard to ascertain to any degree of accuracy since the lower level incomes also include part-time workers, itinerant workers, people on welfare, pensions, etc. What we can say is that the overall figure for the low-paid sector is something like 14 million households earning a total of 1.4% of all earnings for the USA. Most of those will not be on minimum wage and those that are will be working in the food service sector, not in manufacturing and supply. Even if we generously assume that all those people are on minimum wage and they all contribute to the manufacture of widgets then a 10% hike in their pay is going to affect the overall wage bill by 0.14%, which will affect the retail price of widgets by whatever percentage of the retail price their wage contributes to multiplied by the percentage increase in their wage. Let's be doubly generous and assume that it is 50%, so the increase in retail price is now (0.14x0.5=)  0.07% - or 7¢ on $100. TheLlama has already drawn a nice supply and demand graph for that - a 0.07% increase in price may result in a 0.07% decrease in demand if the two slopes were unity, but to be honest 0.07% gets lost in the noise of normal retail demand fluctuations so we can say the effect is negligible. Now, all those assumptions were generous ones - the minimum wage does not affect manufacturing in the USA or Europe anything like as "dramatically" as the 0.07% of this illustration, so for all intents and purposes changing minimum wage doesn't affect demand because it doesn't affect retail pricing anything like as much as people would like you to believe. However, the supply and demand curves are real and they do work, just not for infinitesimally small increments. It has already been shown that the real curves are really curves and not straight lines - what this means is that for small changes they can be treated as linear, but for large changes, which is what a sudden imposition of consumption tax would be, then the effect is disproportionately larger. For example if we pretend that the curve is a square law, then a less than 1% change will result in a less than 1% decrease in demand, a 2% change will result in a 4% decrease in demand and a 8% change results in a 64% drop in demand. Now I don't know what the curve is - it probably isn't a square law, it's probably far more complex than that, (as Brian said: "Draw me up a parabolic curve or go away, dammit!" LOL), but whatever it is it won't be linear and it won't be unity - increase sales tax from 8% to 18% and demand will decrease disproportionately more.
 
...someone said something about the rich buying yachts ... firstly "the rich" are not people earning between $100K and $250K - a luxury yacht starts at around $100K so you are looking at the real rich people who earn millions - yup they'll still buy yachts, but perhaps only one every 2 years instead of one every year. Instantly the fair system is netting 50% less tax because of a 10% increase in yacht prices. Same for the middle earners - they'll still buy flat screen TVs and Lexus's, just not quite as frequently so the demand is the same, but the frequency has dropped and so the total tax revenue has dropped..


Pass! 

No just kidding. Wink  Let me tangle with some numbers though:

Let's say you are a small businessman (you can be 6'1", or whatever you are- I mean you own a small business!).  You make tabs for aluminum cans and zippers.  Okay, you have 10 employees in your company, all making minimum wage.  Congress passes a 50 cent rise in minimum wage.  Assuming everyone works every week, that's a $10,400 a year payout for your company.  Under our current minimum wage, that's about like hiring another 2/3 of a person, but your company doesn't benefit one bit.  This is another governmental attempt to transfer wealth from one group to another (and to themselves), yet it is disguised as something noble.

In other words, politicians get to say, "Hey, we never raised taxes!"  And for those who still pay taxes despite having minimum wage jobs (such as middle class teenagers working a summer job), the governments get a piece of that income.  For those who get a refund, it was an interest-free loan they gave to the government.  And over half of minimum wage workers are individuals still living with their parents.

According to that same report, "
A single parent with two children living in California would gain only 26 cents from a 90 cent increase in the minimum wage. "

This sounds to me like a decrease in taxes would benefit the working poor rather than a hike in minimum wage.

Minimum wage is an insidious and terrible idea period.

By the way, I'm not opposed to revenue dropping in case you didn't notice.  I want the government to stop spending so much of our damn money first anyway.
Your example isn't realistic enough for me: a 50% increase in minimum wage is not going to happen unless it fails to track inflation and/or median wages again [many US states, (eg Florida), have indirectly linked minimum wage to inflation now so this should never happen]; the company doesn't employ 15 people because it only needs 10 but it does pay minimum wage because it can not because it needs to; it costs more to employ an extra person than just the wage costs, so it a 50% increase isn't the equivalent of employing 5 more people - it's more like 2-3 people; you haven't shown how the 10x$10K payout affects the company's finances or how that affects the selling price of a can of Coke or a pair of Levi's (which is what this was all about) - if 10 people are producing billions of pull-tabs each year worth 10s of millions of dollars, then $100K is easily absorbed, [one operator on a machine stamping out 100 ring-pulls a second can produce 1 billion a year]; the number of people on minimum wage working in manufacturing in the USA is negligible, (possibly  zero), so probably no one is making pull-tabs on minimum wage in the USA since most work in food services - if ring-pull tabs are being made in the USA then the machine operators producing them are earning more than minimum wage; the report you cited claims that increases in minimum wage result in a loss of welfare benefits for the employee, (but isn't that what you want?), however they still "earn" more as a result but not through hand-outs - the "missing" 64¢/hr in the report is paid for by your taxes, not from the employer's payroll - (so welfare benefits the employer as much as it does the employee) - the 90¢  of your example is still 90¢ and they still earn more as a result, but they claim less welfare (sounds like a good scheme to me); as you say, most of those on minimum wage are young people living with parents, so they do not qualify for welfare handouts and their parents don't either because they are no longer dependent children - for them a 90¢ increase would net 81¢ in they pay-packet after tax.
 
Minimum wage is terrible because it shouldn't be necessary at all.
 
The USA taxes people on minimum wage? what is the point of that when you are going to give some of it back as Aid to Families with Dependent Children (AFDC), Food Stamps, and the Earned Income Tax Credit (EITC)? (I know you made this point too, I'm agreeing with you). The solution is (again as you say) to decrease income tax (I say to zero), but only for those on minimum wage - but don't apply a fix for 12% of the population across the remaining 88% (or apply a fix for 1.4% of earnings to the remaining 98.6%). Of course it could be applied to everyone by raising the lower threshold and applying a zero percent rate on earnings below that threshold and it would benefit everyone and it would decrease tax revenue, but at least it benefits those who need it by reducing the poverty trap.
 
If you want to eliminate welfare then you have to provide the people who claim it a valid and legitimate means of earning their way out of it - this is one area where I do not believe the free market will do anything to alleviate this problem. Minimum wage isn't a great system or a perfect solution, principally because it is an easy system to attack ideologically (because it is inherently socialist) and with convincing looking numbers (convincing until you analyse them closely), but it is a necessary system when you do not have a viable alternative.


Edited by Dean - September 30 2010 at 20:50
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Direct Link To This Post Posted: September 30 2010 at 20:13
Originally posted by Epignosis Epignosis wrote:



Oh! Shocked

Cultural-linguistic interference here.  That's what we get for speaking English to each other! Embarrassed

When I talk of invasion of privacy, I mean that the government gets to know more about us than we should have to share with anybody, largely because we have to file a tax return and file deductions.

That's one big screwy term for us then: Deductions.  When I spoke of deductions, I meant the exemptions on our income we claim each year when we file taxes.  What you described as deductions, we call "withholdings."  We get social security withheld from our paychecks, but deductions are things like medical expenses, business expenses, gambling loses, charitable contributions, mortgage interest, etc. which make more of our income tax-exempt (and therefore we pay less income tax).

I do strive to be either general or USA-centric in my replies and I don't cite the UK system by way of example because it is not widely known (or understood)  (or that greatWink), but there are differences that leave me scratching my head as to what you mean by certain terms and references. I'm not going to pretend to understand something I don't or deliberately misrepresent what you are saying by equating it with the UK near-equivalent when it patently isn't equivalent.
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