Define "Fair" Taxation & Spending

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Instead of whipping out widespread tax reform like consumption tax, flat tax and others to *try* avoiding taxes; people need to understand that tax incomes must in theory be equal to expenditures. Therefore to reduce taxes, spending reduction is the only option if this is your ultimate goal. Focusing on the tax code is like trying to make 2 + 2 = 5 or attepting to get 5 with 3 + 1...no matter how you cut it, it's not going to happen.

Being a somewhat compassionate conservative, I do advocate key areas where I feel we as a conscious, well informed and enlightened group, can offer those who are helpless not by any fault of their own.

I would like to hear what areas you feel government should be responsible for, how much is required to create respectable levels of funding for these programs and how you feel these should be paid for.

____
Now for my opinion: when it comes to fair taxation, progressive is often seen as "unfair" as it focuses on the rich the most relative to the middle and especially lower class. Flat tax attempts to address this so called problem with an *equal* tax rate. People somehow create this logic that flat tax is fair tax, when in actual fact, it is just another way in which the rich are taxed more. I start to wonder; if flat tax were implemented, how long would it take anti-tax people to say..."well 20% of 100k is far more than 20% of 50k...for the same services and benefits, how is that *fair*". Then there are the Dissipates of the world who talk of a no tax, anarchy/capitalist society. I would have to argue that in such a regime there would indeed be a group of people (large or small) who would be severly oppressed creating an "unfair" system. Then consider the inherent value of currency, those who are rich are more likely to save and have far more disposible income to invest in items that likely will raise their net worth (houses, stocks, bonds, education); unlike the mainstream citizen who buys declining investments (vacations, rent, clothes, electronics, computers)...making money *progressively* easier to grow with wealth. This leads me to the conclusion that progressive taxation is the only true *fair* taxation.

Just because I advocate progressive taxation, doesn't steer me away from my fiscally conservative values, I do look to minimal spending, focusing on a few key social safety net for those held back by no fault of their own, paid through taxation. My views in a nutshell:

I support small government, free trade, economic freedom, capitalism, large education and R&D funding, social safety net for poor with respect to healthcare, proven environmental concerns, deficit spending if investments are worth while, aggressive immigration.

I am against subsidies of all types, welfare (in current form), large military, government involvement in social issues, foriegn aid (economic aid much better).

...Discuss!
 

alchemize

Lifer
Mar 24, 2000
11,486
0
0
Balanced budget amendment. Everything else is details and will take care of it self, and will generally represent the will of the people.
 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: alchemize
Balanced budget amendment. Everything else is details and will take care of it self, and will generally represent the will of the people.
Horrible idea. Most economists are against such measures.
Economies tend to be cyclical and altering spending with bull and bear markets will create an 8 year (typical time between bull and bear markets) period of dumb, malnourished, unprotected people relative to bull times.

Imagine cuts to public protection (police, military) in times of recession where people are more despirate and more likely to commit crimes.

Or how bout less welfare for those who are more likely to be laid off. It is the duty of government to set and support a standard of living in slow times, then allow for the bull times to significantly raise our standard of living and wealth.
 

EatSpam

Diamond Member
May 1, 2005
6,423
0
0
Originally posted by: alchemize
Balanced budget amendment. Everything else is details and will take care of it self, and will generally represent the will of the people.

:thumbsup: I'd add the requirement of a "slush fund" for emergencies, which would encourage running a surplus.
 

alchemize

Lifer
Mar 24, 2000
11,486
0
0
Originally posted by: Stunt
Originally posted by: alchemize
Balanced budget amendment. Everything else is details and will take care of it self, and will generally represent the will of the people.
Horrible idea. Most economists are against such measures.
Economies tend to be cyclical and altering spending with bull and bear markets will create an 8 year (typical time between bull and bear markets) period of dumb, malnourished, unprotected people relative to bull times.

Imagine cuts to public protection (police, military) in times of recession where people are more despirate and more likely to commit crimes.

Or how bout less welfare for those who are more likely to be laid off. It is the duty of government to set and support a standard of living in slow times, then allow for the bull times to significantly raise our standard of living and wealth.
Bah - that's garbage. It's amazing how well you can manage your finances when you throw away your credit cards.

OK Balanced budget amendment, that requires the first 5 years to amass a 5% surplus per year that requires a super-majority to spend.

I would bet that 40% of government is blubber, and that's probably a conservative estimate.

Most intelligent economists recognize that fiscal policy impact is *fractional* compared to monetary policy impact
 

Martin

Lifer
Jan 15, 2000
29,178
1
81
progressive taxation is fair, after all people are taxed the same rate on the same income. To be honest, I hardly notice the 20% or so that I pay now. any tax cuts would probably go towards me buying some trinket I don't really need.
 

Meuge

Banned
Nov 27, 2005
2,963
0
0
Originally posted by: alchemize
Originally posted by: Stunt
Originally posted by: alchemize
Balanced budget amendment. Everything else is details and will take care of it self, and will generally represent the will of the people.
Horrible idea. Most economists are against such measures.
Economies tend to be cyclical and altering spending with bull and bear markets will create an 8 year (typical time between bull and bear markets) period of dumb, malnourished, unprotected people relative to bull times.

Imagine cuts to public protection (police, military) in times of recession where people are more despirate and more likely to commit crimes.

Or how bout less welfare for those who are more likely to be laid off. It is the duty of government to set and support a standard of living in slow times, then allow for the bull times to significantly raise our standard of living and wealth.
Bah - that's garbage. It's amazing how well you can manage your finances when you throw away your credit cards.

OK Balanced budget amendment, that requires the first 5 years to amass a 5% surplus per year that requires a super-majority to spend.

I would bet that 40% of government is blubber, and that's probably a conservative estimate.

Most intelligent economists recognize that fiscal policy impact is *fractional* compared to monetary policy impact
I'm sorry to break it to you, but a country's economy is ever so slightly more complicated than your personal finances.
 

Hammer67

Member
Dec 12, 2005
25
0
0
Originally posted by: Stunt
Or how bout less welfare for those who are more likely to be laid off. It is the duty of government to set and support a standard of living in slow times, then allow for the bull times to significantly raise our standard of living and wealth.

Actually, the only true duties of the Federal government are "defense, foreign affairs, the issuing and management of currency, the management of trade and relations between the states, and the protection of human rights." Most other duties were technically supposed to be handled by the states. The welfare state was created during the great Depression by FDR and exists very close to it's original form. It was only intended to help the nation out of the Depression, not become a crutch that many people have sadly become dependant on...

In fact the The Federal Income tax system did not exist as we know it until the early to mid 1900's. The Fed only instituted tax & tariffs in times of war and generally survived by donations from states.

Regards,
Hammer
 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: Martin
progressive taxation is fair, after all people are taxed the same rate on the same income. To be honest, I hardly notice the 20% or so that I pay now. any tax cuts would probably go towards me buying some trinket I don't really need.
20%?

If you are Canadian, 37% of our gdp is taxed. You forget about the corporate taxation, sales tax and all the other compounding taxes. 20% isn't even close to what you pay in tax.

If you feel your taxes would be spent on something you don't need, donate it to a charity.
 

Hammer67

Member
Dec 12, 2005
25
0
0
Originally posted by: Martin
progressive taxation is fair, after all people are taxed the same rate on the same income. To be honest, I hardly notice the 20% or so that I pay now. any tax cuts would probably go towards me buying some trinket I don't really need.



Speak for yourself!!!
 

XZeroII

Lifer
Jun 30, 2001
12,572
0
0
There is no such thing as a fair tax unless you live in a communist society (in which case, everyone is taxed 100%). As you said, someone will always complain. If you tax the rich more, you are punishing people for being successful. But if you tax the rich as much as everyone else, then everyone else has to pay more to compensate. The best tax system that I can think of would be simply a local tax. You pay enough tax to your local community to do whatever it needs to do. If something is needed that spans multiple communities, then those communities work together to raise the money from each side. The tax heirarchy goes UP instead of DOWN. Rather than the federal gov't taking the largest lump and the rest just filtering down to the state level then community level, we should be giving the most to the community, then less to the state, and less to the fed. This gives people more control over their money and their money gets put to better use.

Just my 2 cents...
 

sandorski

No Lifer
Oct 10, 1999
70,642
6,209
126
Balancing Revenues and Spending is certainly a laudable goal, but making it the Law can lead to unforeseen issues. If Politicians lack discipline though it might be necessary to do just that, but it would be a good idea to not make such a requirement permanent. Let the schmucks learn how to do it and even the Wisdom in doing it, but allow future Politicians(hopefully they have learned the error of the schmucks') the leeway to run a deficit when necessary.
 

XZeroII

Lifer
Jun 30, 2001
12,572
0
0
Originally posted by: Stunt
Originally posted by: Martin
progressive taxation is fair, after all people are taxed the same rate on the same income. To be honest, I hardly notice the 20% or so that I pay now. any tax cuts would probably go towards me buying some trinket I don't really need.
20%?

If you are Canadian, 37% of our gdp is taxed. You forget about the corporate taxation, sales tax and all the other compounding taxes. 20% isn't even close to what you pay in tax.

If you feel your taxes would be spent on something you don't need, donate it to a charity.
Let us count the number of times a dollar is taxed...
 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: XZeroII
Originally posted by: Stunt
Originally posted by: Martin
progressive taxation is fair, after all people are taxed the same rate on the same income. To be honest, I hardly notice the 20% or so that I pay now. any tax cuts would probably go towards me buying some trinket I don't really need.
20%?

If you are Canadian, 37% of our gdp is taxed. You forget about the corporate taxation, sales tax and all the other compounding taxes. 20% isn't even close to what you pay in tax.

If you feel your taxes would be spent on something you don't need, donate it to a charity.
Let us count the number of times a dollar is taxed...
I don't think I even want to know!!...
 

Meuge

Banned
Nov 27, 2005
2,963
0
0
I don't think that "fair" is the word we want to apply to taxation systems. I think what we're looking for is "most efficient" or "the best balance between common good and individual welfare". Progressive tax is just that. If you think it's unfair, being in one of the higher brackets, think of it as the price you pay for a cohesive, efficient, economically successful, and safe society, which allowed you to have this income in the first place.
 

Hammer67

Member
Dec 12, 2005
25
0
0
Actually...I am a big fan of the theory fo eliminating the federal Income tax system and adopting a federal sales tax. A progressive income tax is unfair as it discriminates based on class. With a national sales tax, the people who spend the most money are still paying the majority of the taxes. Many economists believe this would create a economic surplus over time.

But, there are always politics involved!:disgust:


Interesting reading... http://www.fairtax.org/

 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: Hammer67
Actually...I am a big fan of the theory fo eliminating the federal Income tax system and adopting a federal sales tax. A progressive income tax is unfair as it discriminates based on class. With a national sales tax, the people who spend the most money are still paying the majority of the taxes. Many economists believe this would could create a economic surplus over time.

But, there are always politics involved!:disgust:


Interesting reading... http://www.fairtax.org/
The rich are more likely to save...the revenues of taxation will still need to be reached to fund spending. This tax system would put more burden on the middle class and poor.

In principle, tax cuts for the rich are technically more efficient as they are the ones more likely to make large capital investment in education, companies, etc; rather than a few more mass produced consumer items. For example. 1 person with a $50,000 tax cut will be far more productive than 500 people with a $100 tax cut. Therefore it is easy to see why economists would favour a regressive tax system like sales tax.

But in the end you are attempting to make 2 + 2 = 5. In the end you will need to make up for less tax revenues...if your intention is to pay less tax.
 

Hammer67

Member
Dec 12, 2005
25
0
0
Originally posted by: Stunt
The rich are more likely to save...the revenues of taxation will still need to be reached to fund spending. This tax system would put more burden on the middle class and poor.

In principle, tax cuts for the rich are technically more efficient as they are the ones more likely to make large capital investment in education, companies, etc; rather than a few more mass produced consumer items. For example. 1 person with a $50,000 tax cut will be far more productive than 500 people with a $100 tax cut. Therefore it is easy to see why economists would favour a regressive tax system like sales tax.

But in the end you are attempting to make 2 + 2 = 5. In the end you will need to make up for less tax revenues...if your intention is to pay less tax.

I suggest reading deeper into this link. Rich people save? Clearly you don't know the wealthy people I know! The rich spend!! Boats, cars, large homes, winter homes, jewelry, expensive meals, expensive clothes, tech gadgets, etc.

It's human nature. But the theory put forth by this site have answers and incentives for spending and investing. Anything is an improvement over the ridiculous BS that is the current US Federal Income tax system. But, this makes sense. I almost refused to believe it at first but as I read the theroy was more and more sound. It isn't a shot in the dark idea.

If your argument that this theory would cause less tax revenue based on the assumption that the rich would save, then I will have to respectfully disagree with you there.

Goes against human nature and logic.
 

alchemize

Lifer
Mar 24, 2000
11,486
0
0
Originally posted by: Meuge
Originally posted by: alchemize
Originally posted by: Stunt
Originally posted by: alchemize
Balanced budget amendment. Everything else is details and will take care of it self, and will generally represent the will of the people.
Horrible idea. Most economists are against such measures.
Economies tend to be cyclical and altering spending with bull and bear markets will create an 8 year (typical time between bull and bear markets) period of dumb, malnourished, unprotected people relative to bull times.

Imagine cuts to public protection (police, military) in times of recession where people are more despirate and more likely to commit crimes.

Or how bout less welfare for those who are more likely to be laid off. It is the duty of government to set and support a standard of living in slow times, then allow for the bull times to significantly raise our standard of living and wealth.
Bah - that's garbage. It's amazing how well you can manage your finances when you throw away your credit cards.

OK Balanced budget amendment, that requires the first 5 years to amass a 5% surplus per year that requires a super-majority to spend.

I would bet that 40% of government is blubber, and that's probably a conservative estimate.

Most intelligent economists recognize that fiscal policy impact is *fractional* compared to monetary policy impact
I'm sorry to break it to you, but a country's economy is ever so slightly more complicated than your personal finances.

Oh feel free to enlighten me, med student :roll:

You can start with my fiscal versus monetary policy statement first.
 

Hammer67

Member
Dec 12, 2005
25
0
0
From one of the FAQ's on the site:

11# Why is the FairTax better than our current system?

Our present tax system is one of the reasons that people are finding it so difficult to get ahead these days. It is one of the reasons the next generation may not have a standard of living as high as this generation. Cars replaced the horse and buggy, the telephone replaced the telegraph, and the FairTax replaces the income tax. The income tax is holding us back and making it more difficult than it needs to be to improve our families? standard of living. It makes it needlessly difficult for our businesses to compete in international markets. It wastes vast resources on complying with needless paperwork. We can do better and we must.

12# Is the FairTax fair?

Yes, the FairTax is fair, and in fact, much fairer than the income tax. Wealthy people spend more money than other individuals. They buy expensive cars, big houses, and yachts. They buy filet mignon instead of hamburger, fine wine instead of beer, designer dresses and expensive jewelry. The FairTax taxes them on these purchases. If, however, they use their money to build job-creating factories, finance research and development to create new products, or fund charitable activities (all of which help improve the standard of living of others), then those activities are not taxed.

13# How does the FairTax protect low-income and lower middle-income families and individuals?

Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level will pay a tax of only 11.5 percent ? a rate much lower than the income and payroll tax burden they bear today.

Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. The FairTax dramatically improves economic growth and wage rates. Retaining the present tax system makes economic progress needlessly slow, thus harming low-income people the most.

In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more hidden taxes on goods (averaging 22 percent) or services (averaging 25 percent), and used goods are tax-free.
 

Meuge

Banned
Nov 27, 2005
2,963
0
0
Originally posted by: Hammer67
Originally posted by: Stunt
The rich are more likely to save...the revenues of taxation will still need to be reached to fund spending. This tax system would put more burden on the middle class and poor.

In principle, tax cuts for the rich are technically more efficient as they are the ones more likely to make large capital investment in education, companies, etc; rather than a few more mass produced consumer items. For example. 1 person with a $50,000 tax cut will be far more productive than 500 people with a $100 tax cut. Therefore it is easy to see why economists would favour a regressive tax system like sales tax.

But in the end you are attempting to make 2 + 2 = 5. In the end you will need to make up for less tax revenues...if your intention is to pay less tax.

I suggest reading deeper into this link. Rich people save? Clearly you don't know the wealthy people I know! The rich spend!! Boats, cars, large homes, winter homes, jewelry, expensive meals, expensive clothes, tech gadgets, etc.

It's human nature. But the theory put forth by this site have answers and incentives for spending and investing. Anything is an improvement over the ridiculous BS that is the current US Federal Income tax system. But, this makes sense. I almost refused to believe it at first but as I read the theroy was more and more sound. It isn't a shot in the dark idea.

If your argument that this theory would cause less tax revenue based on the assumption that the rich would save, then I will have to respectfully disagree with you there.

Goes against human nature and logic.

Incorrect.

On average, wealthy people invest or save much greater percentage of their income than the middle class and even more so compared to the poor. Therefore, tax cuts that primarily affect them are less effective in boosting the economy.

Simply speaking - if you give $500/year in tax cuts to the middle class, they'll use it to buy stuff. If you give $50'000/year to the wealthy, a large percentage of it will be removed from the consumer cycle.
 

EatSpam

Diamond Member
May 1, 2005
6,423
0
0
Originally posted by: Meuge
Originally posted by: Hammer67
Originally posted by: Stunt
The rich are more likely to save...the revenues of taxation will still need to be reached to fund spending. This tax system would put more burden on the middle class and poor.

In principle, tax cuts for the rich are technically more efficient as they are the ones more likely to make large capital investment in education, companies, etc; rather than a few more mass produced consumer items. For example. 1 person with a $50,000 tax cut will be far more productive than 500 people with a $100 tax cut. Therefore it is easy to see why economists would favour a regressive tax system like sales tax.

But in the end you are attempting to make 2 + 2 = 5. In the end you will need to make up for less tax revenues...if your intention is to pay less tax.

I suggest reading deeper into this link. Rich people save? Clearly you don't know the wealthy people I know! The rich spend!! Boats, cars, large homes, winter homes, jewelry, expensive meals, expensive clothes, tech gadgets, etc.

It's human nature. But the theory put forth by this site have answers and incentives for spending and investing. Anything is an improvement over the ridiculous BS that is the current US Federal Income tax system. But, this makes sense. I almost refused to believe it at first but as I read the theroy was more and more sound. It isn't a shot in the dark idea.

If your argument that this theory would cause less tax revenue based on the assumption that the rich would save, then I will have to respectfully disagree with you there.

Goes against human nature and logic.

Incorrect.

On average, wealthy people invest or save much greater percentage of their income than the middle class and even more so compared to the poor. Therefore, tax cuts that primarily affect them are less effective in boosting the economy.

Simply speaking - if you give $500/year in tax cuts to the middle class, they'll use it to buy stuff. If you give $50'000/year to the wealthy, a large percentage of it will be removed from the consumer cycle.

Ah, the trickled on theory of economics. Its worked great in the 1980s (for the rich) and its working great now (for the rich.)
 

Meuge

Banned
Nov 27, 2005
2,963
0
0
Originally posted by: EatSpam
Ah, the trickled on theory of economics. Its worked great in the 1980s (for the rich) and its working great now (for the rich.)

I think you mean "trickle-down" economy... which confuses me, since my post is against it.
 

EatSpam

Diamond Member
May 1, 2005
6,423
0
0
Originally posted by: Meuge
Originally posted by: EatSpam
Ah, the trickled on theory of economics. Its worked great in the 1980s (for the rich) and its working great now (for the rich.)

I think you mean "trickle-down" economy... which confuses me, since my post is against it.

My mistake. I didn't read the second part of your post correctly. I should direct the "trickled on" comment to Hammer67.
 

Hammer67

Member
Dec 12, 2005
25
0
0
Originally posted by: Meuge
Incorrect.

On average, wealthy people invest or save much greater percentage of their income than the middle class and even more so compared to the poor. Therefore, tax cuts that primarily affect them are less effective in boosting the economy.

Simply speaking - if you give $500/year in tax cuts to the middle class, they'll use it to buy stuff. If you give $50'000/year to the wealthy, a large percentage of it will be removed from the consumer cycle.

Well, not really, if you think about it. Not that I am arguing for tax cuts for the rich, or anything. Going with your theory and assuming you are correct, yes, so the wealthy person who gets a $50,000 break (whatever it is) may be more accustomed to save it, but, on average a wealthy individual spends in their range for common consumer goods. This includes homes. That middle class guy probably paid $100k to $200k for his house while the wealthy person may have paid $500k - $1,000,000. Same thing for automobiles, leisure spending, etc. You have to take into account the purchasing ratio if you are going to include the savings ratio. So, in theory, the tax break for the wealthy individual is proportionate to his spending compared to the middle class person.
 
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