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Taxes: The Charged Rhetoric


chiefhogskin48

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Since the passing of the new Tax cut bill, the usual charges of "favoritism for the rich" have been used early and often. Ok, I understand that if you are openly advocating the redistribution of wealth, universal tax cuts would bother you. But for those who either honestly believe that the tax cuts are "unfair", or secretly favor wealth redistribution while never admitting to such, please explain how giving a certain percentage of ones income back is unfair.

Remember, income does not rightly belong to the government; at least not in this country's history. In fact, there was no federal income tax til the early 20th century--- a very controversial move at the time. The FedGov has ballooned to something that would make even Benjamin Franklin cringe and Jefferson jump off a bridge.

I used to be an advocate of wealth redistribution. After all, those rich folks were too damned rich, right? The poor deserve some of that money, I thought. But at the time (I was young), I did not realize that the poor do not pay federal taxes (except FICA), while the rich typically pay over 40% of their income. Thus, income redistribution is already in place, in a big way. I had a slow epiphany that one should not "deserve" another's hard-earned money just because they themselves lack it. Otherwise, we ought to subsidize the poor elsewhere, right?

To reverse the trend entirely would be dangerous, though, because of the status quo social instability it would cause, conjuring up images of the late 1800's. Bush's tax cuts, however, are a step in the right direction. The next step is to actually reduce spending on programs that are extraneous, counterproductive to the public, or provide little benefit for each dollar spent. Tops on the list would be agro-subsidies, steel subsidies, and pork-barrel projects (which have become federal welfare for states :puke: ). Essentially, if we can continue to whittle down the proportion of GDP used for the federal government (freezing the budget increases at the level of growth of the GDP), we can reduce the burden on our public and allow people to use the money as they see fit. It's a matter of trust. I trust the vast majority to use their money in a way that can benefit them more than the equivalent government dollars would, since bureaucracy likely turns that dollar into perhaps 70 cents of "benefit".

Also, by reducing the federal tax burden, it also allows states more leeway. Those states like Mass. and California whose populations tend to support large-scale redistribution can implement such policies on a focused, state-wide level, while the people of Wyoming or North Dakota are not forced into a national wealth redistribution scheme, and can choose their own course of action.

Just my observations and my .02 cents. For what it's worth, I think the founding fathers would agree. ;)

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I think Jefferson and Franklin would be happy that future generations in this country have flowing hot/clean water, indoor plumming and Professional Football. Plus, with the size of the nation being many times larger than they could ever dream...........they might understand the need for a federal building in every major city.

Oh yeah, we walked on the Moon!

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My biggest problem with "giving a certain percentage of ones income back" is that this isn't what this bill is.

Now, if W wanted to cut tax rates accross the board, and treat all income the same, I'd be in favor of it. (At least, I'd be in favor of it after a surplus. And I mean an actual surplus, not a defecit that's small enough so that the SS surplus can cover it. I don't even mind short-term defecit spending as a meanc of countering an economic downturn: I just think that when you have prosperity and a surplus, then you pay off your debt.)

Show me a tax plan that treats capital gains and dividend income the same as earned income, and cuts rates, and I'm all in favor of it.

(Although, I think that, if you want to make an accross-the-board tax cut and simplify people's taxes at the same time, then simply increasing the standard deduction would accomplish both. But now we're arguing whether taxes should be progressive, and if so, how much.)

But, the way our taxes are now, if, say, Dan Snyder decides to pay himself a $1M dividend (as opposed to his salary for his job), and LaVarr earns a $1M bonus, then LaVarr's going to pay twice the tax on his million that Dan pays on his, simply because "earned" income gets taxed higher. And W's decided that what's wrong with this picture is that Dan's taxes are too high, and should be cut to zero.

Now, in order to "earn" his million, LaVarr had to do something that somebody else thinks is worth a million. That's 'cause LaVarr has a boss. But element #1 in The Republican Philosophy is that "People who don't have bosses should never pay any taxes at all, because they're important."

What you're trying to do is to get people who're opposed to a tax cut who's main goal is to completely eliminate all taxes on one, specific form of income which is almost entirely used by an absolutley miniscule portion of society, and challenging them to explain why they're opposed to all tax cuts, ever.

I did not realize that the poor do not pay federal taxes (except FICA), while the rich typically pay over 40% of their income.

And, BTW, normally, when using two stats in the same sentance (and trying to contrast them), it's usually considered more honest if you use the same stats on both sides of the comparason. (As opposed, say, to treating the "poor" as though income tax were the only tax that existed, while totalling all taxes paid by the "rich".)

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Originally posted by Soliloquy

Didn't Lincoln institute an income tax? (also controversial at the time)

Yes.

He imposed the first tax on the income of the US citizen as an emergency measure to help finance the Civil War.

3% of all incomes of $800 or more.

His tax was followed by a graduated tax that involved the taxing of incomes over $5,000 at a higher rate.

It wasn't suspended until 1872.

Father of the Republican Party huh? :rolleyes:

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Originally posted by Bufford T Justice

I think Jefferson and Franklin would be happy that future generations in this country have flowing hot/clean water, indoor plumming and Professional Football. Plus, with the size of the nation being many times larger than they could ever dream...........they might understand the need for a federal building in every major city.

Oh yeah, we walked on the Moon!

I agree Buffod, but the current size of the federal government is many times the size they would deem necessary. I don't think this is in the least bit inaccurate. Times change, I suppose.

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Originally posted by chiefhogskin48

I agree Buffod, but the current size of the federal government is many times the size they would deem necessary. I don't think this is in the least bit inaccurate. Times change, I suppose.

Maybe, maybe not. I am sure that they didnt envision over a quarter of a billion people in the US either.

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Originally posted by The Evil Genius

Maybe, maybe not. I am sure that they didnt envision over a quarter of a billion people in the US either.

Maybe, maybe not? The federal government has taken on a drastically different role than it was created to do, for better or worse. State and local governments were supposed to be the most important and visible appendage of "government". Let's be intellectually honest here and just concede that our current federal setup is not close to what was envisioned, for whatever it's worth.

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I think Jefferson and Franklin would be happy that future generations in this country have flowing hot/clean water, indoor plumming and Professional Football.

That's at least partially true. Jefferson probably would be happy since his Redskins would have several Super Bowls under their belt while Franklin's team (the Eagirls) would come up short in that department. :laugh: :laugh:

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Originally posted by panel

Are there any countries that have a simpile flat tax, I wonder If that would be better, It would probibly be more fair.

Yes, a flat tax is theoretically the fairest system, but it would create a much, much larger wealth gap between rich and poor. This may not be desirable unless phased in gradually, and even then the social instability might increase too much for my taste.

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The only moral obligation government has is to protect our rights, nothing more.

Are there any countries that have a simpile flat tax, I wonder If that would be better, It would probibly be more fair.

Yes Russia. To say it has been successful would be an understatement. In fact it is an economic miracle. The thing that scares me about a flat tax is it will create a tremendous amount of government revenue (much more than our current system). Revenue that could increase the size of government, hopefully it will be used to pay of the debt. With all that being said a flat tax would be a great improvement on what we have now. A flat tax will create growth and jobs. Hong Kong has had a flat tax for over 50 years (the freest market in the world). China is actually talking about a flat tax. Ironic isn’t it.

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Originally posted by luckydevi

The only moral obligation government has is to protect our rights, nothing more.

Yes Russia. To say it has been successful would be an understatement. In fact it is an economic miracle. The thing that scares me about a flat tax is it will create a tremendous amount of government revenue (much more than our current system). Revenue that could increase the size of government, hopefully it will be used to pay of the debt. With all that being said a flat tax would be a great improvement on what we have now. A flat tax will create growth and jobs. Hong Kong has had a flat tax for over 50 years (the freest market in the world). China is actually talking about a flat tax. Ironic isn’t it.

Please explain about Russia. Forgive my ignorance, but I don't keep up wth Russia much.

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Originally posted by panel

Are there any countries that have a simpile flat tax, I wonder If that would be better, It would probibly be more fair.

The best example of this is actually Hong Kong, which had a small flat tax (9%, I believe) and no tariffs, took in huge amounts of immigrants, and still went from being one of the poorest areas in the world to one of the richest (higher per capita income than most of the EC) within a generation

Cutting capital gains taxes is the most efficient way to stimulate long term economic growth. Furthermore, everytime the capital gains tax rate has been cut - the amount of revenue from the capital gains tax has actually increased substantially. It was the largest windfall of added tax revenue during the Clinton years.

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"A flat tax would only make rich people happy, maybe thats why a while back Steve Forbes (billionaire who owns Forbes magazine) used his flat tax idea to run for President which would be good if most people were rich."

There is a reason why some leftists actually support a flat tax. A flat tax will create a tremendous amount of revenue, revenue which could support your leftist social programs. I support it, because it is fair. But what should I expect from a group of people who actually believe socialism can still work

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Originally posted by luckydevi

There is a reason why some leftists actually support a flat tax. A flat tax will create a tremendous amount of revenue, revenue which could support your leftist social programs. I support it, because it is fair. But what should I expect from a group of people who actually believe socialism can still work

But is this really a good thing? If I don't want leftist social programs now, I sure as hell don't want them under the guise of a fair "flat tax".

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But is this really a good thing? If I don't want leftist social programs now, I sure as hell don't want them under the guise of a fair "flat tax".

You make a good point, but a flat tax will do more than creating revenue. It will create economic growth which therefore creates jobs. I would use the revenue to pay of the debt.

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Originally posted by riggo-toni

Cutting capital gains taxes is the most efficient way to stimulate long term economic growth. Furthermore, everytime the capital gains tax rate has been cut - the amount of revenue from the capital gains tax has actually increased substantially. It was the largest windfall of added tax revenue during the Clinton years.

Riggo, the capital-gains tax windfall from the Clinton years was primarily the result of a punch-drunk stock market stoked by vastly overvalued tech companies (especially dot-coms). This also rippled out to other segments of investment, such as real estate, as people diversified profits from stock gains.

Maybe it's true that cutting capital-gains taxes is the most effective way to stimulate long-term growth. But I wouldn't base that conclusion on the Clinton years. You need a broader set of data, and even then I suspect your conclusion will be somewhat speculative, as there are always many variables in play at any given moment in studying the economy.

Speaking as a small-business owner, let me list some things that actually have real-world effects on my ability to grow my business. Notice that none of these involves cutting capital-gains taxes:

  • Mandates surrounding the hiring of employees, requiring me to withhold taxes and bury myself in paperwork for every employee. Easily the #1 reason I try to avoid hiring real employees (not contractors) at all costs. Even though I know it would be good for my business to hire, I hate HATE doing it.
  • Income tax law, requiring me to pay taxes on profit. I waste an enormous amount of time trying to figure out how to pay less income tax, through all the legal means. All this has nothing to do with running my business and has a huge detrimental effect on making the best decisions for that business. To the extent that I and other business owners make stupid business decisions for tax reasons, we are markedly hurting the economy. Tax law also takes away much of the fun from running a business -- raising a kind of psychological barrier to starting and running businesses.
  • Income tax law that punishes me for investing in my business. Major capital purchases have to be depreciated over a number of years, even sh!t I know I won't be using in two years. As a result, I get taxed as if I still have the cash, when I don't: I spent it on equipment. What a completing fvcking joke. (Credit to Bush for raising the threshhold for expensing equipment to $100K per year.)
  • Import/Export laws. I've got people all over the world who want to buy my crap. I figure whatever I try to do, I'm breaking some kind of law.
  • Lack of cash/external investment. OK, maybe capital gains taxes have a marginal effect here. But the other issues on this list are MUCH more important to me in growing my business.

Notice all the tax issues on my list. I'm a huge proponent of replacing the personal and corporate income tax with a consumption tax on goods and services. It's a much simpler and fairer system, and would be much less of a drag on business in terms of distorting a company's ability to conduct business efficiently.

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holy dreadlocks batman!!!...the best ASF post I have read to date......

during the 90s....don't forget that productivity growth was moving along at a phenomenal 2% annually........yea, speculation propelled the dot coms and carried some others....but the fundamentals were there also.......

funny....my Uncle (a 1960s Ivy League graduate who ventured into professional life from the far left) moved to the center and then to the right as he struggled with an Almond farm in Sonoma Valley, CA.....he would rail for hours about how difficult it was to run a small business due to confusing and burdensome tax laws and other federal/state regulations....he eventually gave it up and went into real estate....too bad: he had a masters in eonology from UCAL Davis....supposedly the best....and worked in Napa Valley for years before his purest instincts got the better of him.......

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