Re: National sales tax (was: Re: Neutral taxation?)
In a message dated 1/16/03 8:47:15 PM, [EMAIL PROTECTED] writes: >This brings to mind an historical point which has been tugging at me - >perhaps someone here will know the answer offhand. Has there *ever* been >an instance where one type of tax has entirely replaced another, or even >replaced in some 'revenue-neutral' fashion for even a few years, the tax >it is proposed to 'replace'? Well I won't say "never," but I know of no such case in American history. Typically Congress passes some new tax or taxes during a war, then sometimes the new taxes persisted after the orginal justification for them had passed. During the Civil War Congress raised tarrifs drastically, and imposed an income tax and an inheritance tax. After the war it let the income and inheritance taxes lapse, but kept the higher tariffs. The new tax regime was weighted much more heavily toward tariffs than the previous system, which relied proportionately more on "internal" excises, but Congress had used both types to a fair degree before, and tariffs did not replace excises. Likewise during World War I the income tax of 1913, which had raised little revenue at its inception, replaced tariffs as the single largest source of federal revenue, but it didn't replace tariffs, and indeed, during the 1920s shrunk back below 50% of federal revenue. While the income tax burst onto the scene rather suddenly as a major source of revenue (as it had during the Civil War) it just didn't replace another source of revenue entirely. Even today the federal government still collects revenue from tariffs (and excises). So Susan raises an excellent historical point I hadn't really considered in discussing alternatives to the income tax: there's never been a sudden wholesale replacement of one major source of federal revenue for another. I've always thought it was an unlikely prospect anyway, and now I'm clearer as to why. DBL
Re: Neutral taxation?
<> I don't understand this. Could you expand it a bit, please? Susan Hogarth Triangle Beagle Rescue of NC www.tribeagles.org [EMAIL PROTECTED]
National sales tax (was: Re: Neutral taxation?)
DBL: <> This brings to mind an historical point which has been tugging at me - perhaps someone here will know the answer offhand. Has there *ever* been an instance where one type of tax has entirely replaced another, or even replaced in some 'revenue-neutral' fashion for even a few years, the tax it is proposed to 'replace'? I am curious because of all the talk of a national sales tax floating around. Besides the black market issue, I have a hard time believing any new tax would replace the federal income tax, and a harder time yet believing the combined burden of both would be lighter than that of one. I would like to see a healthy black market, though! :) I could really get behind a national sales tax if I really thought the feds would have the balls to try to extract 20-30% at the point of sale - especially in a 'progressive' fashion. Would poor people be issued tax-exemption cards? Susan Hogarth Triangle Beagle Rescue of NC www.tribeagles.org [EMAIL PROTECTED]
RE: Neutral taxation?
SH: > > I suppose there *could* be a neutral tax, but what would be the point? > > It would be something like taking five dollars from everyone and giving > > them back five dollars worth of 'services'. FF: > The whole point is to provide collective services. > If you join a club and pay dues to get some services, do you then > complain > that you paid money and got services? SH: <> FF: <> SH: Actually, no. I asked what the point was in collecting an amount of money whose only purpose was to provide 'services' equal to the amount of money collected. And then I reflected that a government never could do such a thing, anyway (that was the part you snipped out in your reply). A taxpayer could *never* get his five dollars' worth of services for his five dollars taxation - if only for the reason that he has to pay the overhead cost of having the money extracted from him, costs he would not incur when obtaining those services through a business. FF: <> SH: I'm not sure I understand this paragraph. Are you saying that we have taxes to give people 'services' they don't want? Or to keep people from obtaining services they *may*, in fact, want? FF: <> SH: My apologies for straying off with the 'what would be the point?' comment. I was thinking out-loud a bit and following the thought to the logical conclusion that in fact there *can* be no such thing as a neutral tax, unless of course the government could have perfect knowledge of what people wanted and could provide it - which is clearly impossible. Is my thinking off on that? I was simply agreeing with a previous statement that a truly neutral tax was an impossibility. It seems reasonable to me to make such a statement. Isn't the idea that there could be such a thing as a neutral tax simply a belief that central planning *can*, in fact, provide a better value on 'services' than the marketplace? But perhaps I don't understand the term 'neutral taxation'. I took it to mean a tax which would - in the end - produce no net loss (or gain, I suppose) for the entity being taxed. Is there some more technical sense of the term which I don't understand? Susan Hogarth Triangle Beagle Rescue of NC www.tribeagles.org [EMAIL PROTECTED]
Re: Neutral taxation?
> I find some appeal in the notion of > having to pay some small poll tax in order to vote. > David B. Levenstam If there is no penalty in not paying the poll tax, and it is required for voting, then it is not really a poll tax but a tax on voting. Since the probability of my vote being decisive in large elections is epsilon, I would be very happy to have a voting tax and avoid voting. I just wonder how many people would pay the price of voting. Fred Foldvary = [EMAIL PROTECTED]
Re: Neutral taxation?
--- [EMAIL PROTECTED] wrote: >> A tax on economic rent is neutral, since by definition, economic rent >> is income not necessary in order to put a factor to its most >> productive use. >> Fred Foldvary >> > I'm not sure if I'm following this, but it sounds like you're saying > that it's okay to tax "non-productive" income because that's bad. I'm surprised that it "sounds" like this, because I see nothing in my statement that implies it. From what do you infer a "bad"? > That sounds > very much again like a Progressive notion of taxation, Do you mean progressive as in the tax rate increasing with income? The rationale for taxing rent has nothing to do with this, and the tax rate would be flat. > Incidentally, you talked earlier about taxing land value rather than rent Taxing land rent is the same as taxing land value. The price or value of land is based on the expected future rent. The simplified formula is: p = r / i, where p is the price of land, r the annual unchanging rent, and i the real interest rate. Given a tax rate t based on p, the equation is p = r / (i+t). The fraction f of rent taxed is thus f = t/(i+t) So for example if i=.05 and t=.20, the tax rate is 20% of the price of land, and the percent of rent taxed = .20/.25 or 80%. > which might, as sometimes happens with existing real > estate taxes, force the owner to sell his or her land just to pay the > tax. That seems like one of the greatest wrongs of all. If that happens, the title holder is underusing his land. Otherwise, it would fetch a market rental higher than the tax on the rent. If the user holds idle land, then it is socially efficient for him to transfer the site to someone who puts it to a more optimal use. Fred Foldvary = [EMAIL PROTECTED]
Re: Neutral taxation?/was Re: questions about dividend tax cut
In a message dated 1/16/03 11:57:03 AM, [EMAIL PROTECTED] writes: >AdmrlLocke wrote: > > > >> The farmer felt no compunction at all about complaining that while > >under the income tax system he pays no tax, under a sales tax he'd pay > > >a hefty tax. He pays nothing and he thinks he's entitled to pay > >nothing while everyone else pays something.) > > > >This kind of rhetoric never seizes to amaze me. Why do people get away > > >with it? I'm tempted to say that it's because America is dominated by WASP culture, and WASP culture promotes polite and confict-aversion over confrontational truth. I don't really think, however, that that fully explains why such people don't get confronted more, although it might explain much of that particular story, since I was sitting in a WASPy country club in small-town Iowa. :) I think that in America certain groups of people have gotten benefits because, deservedly so or not, many other Americans believed that the beneficiaries deserved the benefits. Much of the Great Society--occasional liberal protestations to the contrary notwithstanding--appealed to urban/suburban Northern white middle-income guilt over the treatment of blacks in America, particularly (but not exclusively) during slavery. These voters believed (rightfully so) that blacks had been oppressed (slavery, Jim Crow, etc.) and that therefore someone should pay them, or their descendants, something (a rather tenuous conclusion, I'll admit, and the one behind the 'reparations' movement these days). These voters also saw having the government make these payments as an easy, cost-free way (a decidedly false assumption) to expiate their guilt for evils perpetrated by other people. Until the Great Society's heavy costs (inflation, welfare-dependence, destruction of black neighborhoods and families) started to appear clearly in the 1970s, very few of these voters felt any desire to criticize the programs, or the recipients who developed an entitlement mentality, or feared to express such criticizms for fear of being branded "racist," as the Democrats routinely do and have done since the 1960s. In the farmer's case, there's a centuries'-long American love-affair with rurality and the famer. We start with the early colonial stories of America as a great garden, the Jeffersonian ideal of the sturdy yeoman farming his land, the American notion of the farmer as the "salt of the earth," the non-economic notion that the farmer "feeds us" (as though out of the goodness of his heart for us poor, starving urban dwellers). Indeed a hostility toward the sick, polluted, direct city and preference for the clean, growing countryside goes back to pre-colonial English (and Continental) roots. Farmers in America tried for decades starting in the late 19th century to get various types of government benefits, but only when their relative numbers had declined to less than half the population could they actually manage to start squeezing out some small benefits in the 1920s. Now that less than half of a percent of the US population engages in full-time farming, taxpayers can afford to exempt farmers entirely from federal income taxation, pay then individually tens and sometimes hundreds of thousands of dollars, and yet barely notice. For decades it hardly seemed worth the effort to debunk the noble farming myth in order to cut agricultural price subsidies, although in the mid-1990s the Democrats' allies in the media made cutting ag subsidies the key test of whether Republians were really serious about cutting entitlements. (Note: Republicans did phase out the notorious ag price supports [though not all federal ag subsidies] but got not credit from the news media, whose members conveniently forgot they'd set up ag subsidies as the key test). Civil War veterans, however, stand out as the first group to create a sense among the voters that they deserved to feed at the federal trough, and for the next half-century or so got increasingly large and wide benefits. Eventually Congress passed what some have called a "Sneeze Clause" or something like that: if a Civil War veteran ever sneezed in your direction you got veteran benefits. I understand that veterans today still get substantial, wide-ranging federal benefits, thought I'm not at all sure that having a separate, completely-socialized medical system doesn't hurt them much more than it helps. > > > >Here in Denmark, we often hear similar rhetoric on welfare benefits. If > > >someone in the media is advocating a reduction (or more likely, > >advocating a lower increase) in welfare benefits, the interviewer will > > >gladly turn to someone, who will say: “I actually receive welfare > >benefits, and I think they are too low”. That’s it – end of > >discussion!! > > > >The general feeling is: “Well, this guy actually receives benefits, so > > >he’s gotta be the expert, right?” – “on the other hand, the idiot who >
Re: Neutral taxation?/was Re: questions about dividend tax cut
Dear Tom, I hope I got your definition of "neutral" right in the last post. As I indicated, I'd support a poll tax (so long as I'm an armchair intellectual and not running for office, which with my abrasive personality would be a joke anyway). I also support a flatter income tax. In fact I'd like to see something along the lines of the Forbes flat tax with a single rate above the exemption. I've got a master's degree in taxation and used to work as a tax practioner, and so saw first-hand some of the heavy cost of complying with the complex income tax. A simpler system would reduce the compliance costs. I don't really want to replace all the tax revenue generated by the current income tax; personally I'd like to see the federal government spend a fifth to a fourth of what it does now. I agree that much of the problem comes on the benefit side, with almost everyone (except Democratic politicians in the federal government--I wonder why they lost the Senate?) supporting some sort of tax cuts but nobody wanting their own benefits cut. I'd love to hear some good (or even some mediocre) suggestions on how to overcome the problem. Under Gramm-Rudman, which lasted basically covered Reagan's second term, discretionary federal non-defense spending grew at its slowest rate since the 1920s, so it may be that the threat of automatic across-the-board cuts have the most success by forcing competing interests to fight with each other rather than cooperate to raise federal spending in the aggregate. It didn't last very long and only happened under the threat of huge deficits and indeed broke down when the "automatic" cuts got large, so I'm not actually too optimistic about the success of such things. DBL In a message dated 1/16/03 5:20:18 AM, [EMAIL PROTECTED] writes: >Dan, > >even more than direct/indirect, you need to specify what is "neutral". > >Given democracy, one (adult) person, one vote, a strong case can be made > >for a "neutral" poll tax. > >Of course it is not "progressive" like most income taxes. Flat rate > >taxes, sales/VAT taxes, even land taxes, affect some more than others. > > > >My own preferences are more towards a flat(er) tax, with a large (poverty > >level) deduction, and rates tending down (to zero?); a land tax, split > > >between local, state, and federal (1/3 each? 50-25-25?); and ever increasing > >taxes on pollution. I am constantly annoyed at the greens wanting huge > >regulation but unwilling to support higher pollution taxes. > >Um, to get rid of the last 5% of income taxes, I'd even support deficit >spending > >printing money (inflation, another fairly "neutral" tax, > >of about 2-3% per year). > > > >But of the course the MAIN problem is on the benfit side -- so many voters > >want, claim, demand, and only-vote-for those politicos who offer their > >favorite benefits. The demand for benefits drives the demand for tax > >revenue. > > > >And the coming (2020) Social Security baby boomer elephant-sized funding >gap > >is gonna be a HUGE increase in benefit demand. > >Europe is even more vulnerable than the US or the UK. > >Sigh. "What is to be done?" (someone said that... I know, what's is name > >the commie!) > > > >Tom Grey
RE: Neutral taxation?
> SH: > > I suppose there *could* be a neutral tax, but what would be the point? > > It would be something like taking five dollars from everyone and giving > > them back five dollars worth of 'services'. > > FF: > < If you join a club and pay dues to get some services, do you then > complain > that you paid money and got services?>> > > Of course not. How does that apply to governments and taxation, though? You asked what is the point in collecting taxes and providing services. For most services, voluntary action can do the job fine. But many folks would not want to have private armies around, so the point in having government collect taxes and providing defense is to prevent private parties from doing so. But the relevant issue was neutral taxation, not the desirability of government per se. The tax issue needs to be addressed GIVEN that government exists and takes revenue. Fred Foldvary = [EMAIL PROTECTED]
Re: Neutral taxation?
In a message dated 1/16/03 3:31:03 PM, [EMAIL PROTECTED] writes: << --- [EMAIL PROTECTED] wrote: > I can't imagine any tax that would be "neutral" A tax on economic rent is neutral, since by definition, economic rent is income not necessary in order to put a factor to its most productive use. Fred Foldvary >> I'm not sure if I'm following this, but it sounds like you're saying that it's okay to tax "non-productive" income because that's bad. That sounds very much again like a Progressive notion of taxation, and in any case doesn't seem neutral among different types of incomes/activities. I'm probably not understanding your argument fully, but I do think part of the confusion comes from the (at least) two different definitions of "neutrality." Maybe taxing rent is justified because rent is "bad" income, but that doesn't make it neutral across different types of income. Incidentally, you talked earlier about taxing land value rather than rent (I'm presuming because we expect the value of land in a free market to capitalize the rent), which might, as sometimes happens with existing real estate taxes, force the owner to sell his or her land just to pay the tax. That seems like one of the greatest wrongs of all. DBL
Re: Neutral taxation?
In a message dated 1/16/03 3:31:01 PM, [EMAIL PROTECTED] writes: << > Given democracy, one (adult) person, one vote, a strong case can be made > for a "neutral" poll tax. > Tom Grey Fred writes: <> It seems to me that we have a problem with the meaning of "neutrality" here. Tom seems to see it as meaning that we each pay the same amount regardless of circumstances, while Fred seems to see it as meaning that people in different circumstances should not pay the same amount. If I've come close with the apparent definitions here, it seems to me that Fred's meaning contains a value taken from Progressive thinking, which I find rather surprising. In colonial and early republican America, some colonies/states imposed poll taxes, and some made paying the poll tax a requirement for voting. I'm not sure what, if any, other penalties the states had for failure to pay the poll tax. Even though I've been relatively poor (by American standards) most of my adult life and yet have always voted, I find some appeal in the notion of having to pay some small poll tax in order to vote. If every adult had to pay a quarterly federal poll tax of merely $25, (an assuming for the sake of argument that most of them paid), the federal government would raise roughly $15 billion dollars. While that's only a percent of annual federal spending, it's still a sizable chunk of change (which I'd be happy to take if everybody else thinks it's too small). I couldn't replace the income tax of course, but it could be the keystone to a different, lighter federal tax system. Frankly I don't want to see the federal government take a third of the nation's income by any method. I do like the idea, however, that to vote for who runs the legal system you have to contribute at least something to the running of the system. I'm not sure that such a small tax would actually discourage net beneficiaries of government benefits from voting themselves more of other peoples' incomes, but it might discourage some of the core supports of socialist programs not to bother voting at all. It would also allow the libertarians (and independents) who don't want to vote to op out of paying for at least a share of the system they don't support (assuming no other penalty for non-payment besides not being able to vote). As I understand it, Thatcher allowed the local governments in the UK to impose the poll tax in the ways that they saw fit, and with Labour stronger in many of the local governments, they ensured that the poll tax got imposed in the nastiest possible way in order to discredit Thatcher. I do think, however, that the notion of poll taxes at least used to have a powerful negative connotation in American politics so that it might easily be a loser politically here, and of course if a Republican proposed it no doubt the Democrats and their allies in the news media would castigate it as another attempt to tax and disenfranchise the poor, etc. I think though that decades of liberal-dominated public education has so vitiated the historical education of most American students that by now almost nobody under the age of 40 even knows what a poll tax is, much less that, for instance, Southern racists once used it to disenfranchise blacks, so it might not receive as chilly a reception as it would have 20 or 25 years ago. Still, as an intellectual participating in a discussion with other intellectual I have some expectation that someone will bash me for saying I find some merit the idea of poll taxes; as a politician running for office I'd avoid it like the plague. :) David B. Levenstam
Re: Neutral taxation?
I have to agree with Susan. Health clubs are voluntary organizations which, unlike governments, lack the ability to legitimately threaten or employ force to get me to join. I have seen, furthermore, members of my old health club in Iowa complain bitterly at the provision or increase of services they didn't want, or the cutting of or failure to provide or increase services they didn't want. I know that I didn't want them to raise my rate in order to refurbish the men's locker room, which seemed just fine to me as it was. Some people complained bitterly about the club renting out the pool, tennis courts or other areas for parties and thus cutting down the hours during which general members could use the pool or tennis courts, etc. In a message dated 1/16/03 3:30:34 PM, [EMAIL PROTECTED] writes: << SH: > I suppose there *could* be a neutral tax, but what would be the point? > It would be something like taking five dollars from everyone and giving > them back five dollars worth of 'services'. FF: <> <>
Fw: economic projections of the IPCC
http://www.webace.com.au/~wsh/cool4.htm Issue 4 November/ December 2002 Concise and comprehensive paper by Dr Chris de Freitas pointing out myths and fallacies in the entire IPCC position. Dowloadable pdf file just over 1 Mb. CSIRO and the greenhouse game: player yes, umpire no by Bob Foster1 bclim10, 14/12/2002 1. A REPUTATION WORTH PROTECTING A review by Paul Adam in The ANZAAS Mercury (September 2002, p 5) of “Fields of Discovery: Australia’s CSIRO” by Brad Collis (Allen & Unwin, 520 p) begins: The CSIRO is one of the jewels in Australia’s crown. It is an extraordinarily diverse and productive research organization, and the national public face of science. In many countries public statements from government scientists tend automatically to be regarded with suspicion and scepticism. In Australia CSIRO is a trusted umpire, and endorsement by the organization is a high accolade. It takes decades to earn a reputation like this. 2. CSIRO’S TEMPERATURE PROJECTIONS FOR AUSTRALIA CSIRO’s website www.dar.csiro.au/impacts/future tells us that: By 2070, annual average temperatures are increased by 1.0 to 6.0 OC over most of Australia ... because of human-caused greenhouse gas (GHG) emissions. For the “inland”, the new (8/5/2001) projection is an even-more-remarkable 1.0-6.8 OC – cf ‘only’ 0.7-3.8 OC in CSIRO’s last (1996) report. I promise I am not making this up: now, CSIRO has Darwin going from the present one December-February day per year over 35 OC on average, to a whopping 5-79 days by 2070. CSIRO could be quite right, of course; but no-one today has any way of knowing. Think the unthinkable: is CSIRO snowing us on future Australian warming? 3. CLIMATE CHANGE AND THE NATURAL SCIENCES 3.1 Did the ‘Greenhouse Effect’ cause 20th-Century warming? In the 20th Century, 0.6 OC of global-average surface warming from all causes occurred in two episodes: from the 1920s to the mid-40s, with the balance from 1976 onward - and with a return to slightly cooler conditions in the interim. Figure 1 compares world consumption of carbon-based fuels (a good surrogate for GHG emissions) with the observed increase of globally-averaged surface temperature. Clearly, the first warming episode from the 20s largely predates the growth of human-caused GHG emissions to the atmosphere. The Great Pacific Climate Shift of 1976/77 was the climatic event of the century. This Shift coincided with an abrupt reduction in the upwelling of cold water in the eastern Pacific, as recorded by the Pacific Decadal Oscillation (PDO) Index (Figure 2) - which shows reductions during the 1920s-40s and 1977-98. The impact of the 76/77 Shift extended far beyond PDO and the Pacific; and its global influence on atmosphere and oceans is illustrated in Figure 3. Selected examples of its physical and biological influence are given in Figure 4,---Figure 5,---Figure 6,---Figure 7,---Figure 8, and Figure 9. 1. Phone (61.3) 9525 6335, fax 6345, email [EMAIL PROTECTED] Bob is a director of the Lavoisier Group www.lavoisier.com.au which is putting a contrarian view on climate change to that of the UN’s IPCC. Like-minded Australian sites are www.webace.com.au/~wsh and the comprehensive www.john-daly.com. But could the renewed warming from the late 70s be the greenhouse effect? The human-caused ‘greenhouse effect’ is a phenomenon of the atmosphere. GHG emissions, of which carbon dioxide (CO2) from fossil fuels is by far the most influential constituent, are supposed to trap extra heat in the lower troposphere – which warms as a consequence. Instead of escaping to Space as before, some of this trapped heat should return to the earth’s surface – causing ‘greenhouse effect’ warming. Concurrently, less heat than before escapes to Space. We now have 23 years of global coverage from satellite-derived observations to supplement the weather balloon record (top graph in Figure 3), which is only adequate in the Northern Hemisphere - better over land, best over Europe and North America. There are two surprising findings. The lower troposphere is only warming a quarter as fast as is the surface, and (in the tropics, at least) more – not less – heat is leaving the top of the atmosphere for Space. The simplest explanation for these findings is that most of the measured surface temperature increase over the past 23 years is something other than ‘greenhouse effect’ warming. During this period, the lower troposphere of the Southern Hemisphere appears not to have warmed (Figure 10---Figure 11). In fact, most warming in the lower troposphere is north of 30ON; and south of 45 OS is cooling. Therefore, any human-caused greenhouse warming (i.e. at the surface) to date, would be largely confined to the extra-tropical Northern Hemisphere. And yet, CSIRO is warning us that Australia could warm ten times as much by
RE: Neutral taxation?
SH: > I suppose there *could* be a neutral tax, but what would be the point? > It would be something like taking five dollars from everyone and giving > them back five dollars worth of 'services'. FF: <> Of course not. How does that apply to governments and taxation, though? Susan Hogarth Triangle Beagle Rescue of NC www.tribeagles.org [EMAIL PROTECTED]
RE: Neutral taxation?
--- Grey Thomas <[EMAIL PROTECTED]> wrote: > My own preferences are more towards a flat(er) tax, with a large (poverty > level) deduction, and rates tending down (to zero?); a land tax, split > between local, state, and federal (1/3 each? 50-25-25?); and ever > increasing taxes on pollution. Given a tax on land value and on pollution, plus user fees, why would we also need a flat tax on income? It seems to me the former would be sufficient. Fred Foldvary = [EMAIL PROTECTED]
Re: Neutral taxation?
--- [EMAIL PROTECTED] wrote: > I can't imagine any tax that would be "neutral" A tax on economic rent is neutral, since by definition, economic rent is income not necessary in order to put a factor to its most productive use. Fred Foldvary = [EMAIL PROTECTED]
RE: Neutral taxation?
> Given democracy, one (adult) person, one vote, a strong case can be made > for a "neutral" poll tax. > Tom Grey The poll tax is what got Maggie Thatcher thrown out of office in the UK. The problem is that different people benefit differently from government services, and so the poll tax is not well correlated with benefits. The poll tax also amounts to forced labor. The poll tax is how the colonial governments in Africa got the natives to work in the fields. So the poll tax is not really neutral: 1) it is not related to benefits, hence it subsidizes some and penalizes others. 2) it forces workers to work extra to pay the tax in order to get some amount of net income. Fred Foldvary = [EMAIL PROTECTED]
RE: Neutral taxation
--- Susan Hogarth <[EMAIL PROTECTED]> wrote: > < Larry Sechrest here -- viz., there are no neutral taxes. (Sechrest's > position is laid out in his "Rand, Anarchy, and Taxes" in _The Journal > of Ayn Rand Studies_ 1(2).) > > Do any of you agree?>> > > I suppose there *could* be a neutral tax, but what would be the point? > It would be something like taking five dollars from everyone and giving > them back five dollars worth of 'services'. > > Hmm, I guess that's truly not possible, though. Yes, I agree :) > > Susan Hogarth > Triangle Beagle Rescue of NC > www.tribeagles.org [EMAIL PROTECTED] > > = [EMAIL PROTECTED]
RE: Neutral taxation?
> I suppose there *could* be a neutral tax, but what would be the point? > It would be something like taking five dollars from everyone and giving > them back five dollars worth of 'services'. > Susan Hogarth The whole point is to provide collective services. If you join a club and pay dues to get some services, do you then complain that you paid money and got services? Fred Foldvary = [EMAIL PROTECTED]
Re: questions about dividend tax cut
--- Jacob W Braestrup <[EMAIL PROTECTED]> wrote: > an income is a certain payment at a certain date, subject to a > formal or informal contract, That is income from an accounting view, but not from the economic perspective. Economic income has no regard for contracts. In economics, income equals consumption plus the change in net worth during some time. > while a capital gain is uncertain and not guaranteed to be positive. The ex-ante uncertainty is irrelevant. Dividends are also uncertain ex-ante. For income, we take some time period, such as a year, and calculate the change in actual net worth. If the change in net worth is negative, it gets subtracted from consumption. It is possible for income to be negative. Fred Foldvary = [EMAIL PROTECTED]
Re: Neutral taxation?/was Re: questions about dividend tax cut
AdmrlLocke wrote: > The farmer felt no compunction at all about complaining that while under the income tax system he pays no tax, under a sales tax he'd pay a hefty tax. He pays nothing and he thinks he's entitled to pay nothing while everyone else pays something.) This kind of rhetoric never seizes to amaze me. Why do people get away with it? Here in Denmark, we often hear similar rhetoric on welfare benefits. If someone in the media is advocating a reduction (or more likely, advocating a lower increase) in welfare benefits, the interviewer will gladly turn to someone, who will say: I actually receive welfare benefits, and I think they are too low. Thats it end of discussion!! The general feeling is: Well, this guy actually receives benefits, so hes gotta be the expert, right? on the other hand, the idiot who proposed the cut (lower increase) doesnt receive them, so who is he to say anything about how high they should be Whenever the similar line of argumentation is presented in tax matters: Hey, lets ask the top income earners whether they think rates are too high (63 percent at the moment here) the opinion of such fascist pigs is dismissed out of hand as biased Is this experience shared by people outside the Scandinavian countries? how about the US? sorry if this is off-topic Jacob Braestrup Danish Taxpayers Association
RE: Neutral taxation?/was Re: questions about dividend tax cut
<> I suppose there *could* be a neutral tax, but what would be the point? It would be something like taking five dollars from everyone and giving them back five dollars worth of 'services'. Hmm, I guess that's truly not possible, though. Yes, I agree :) Susan Hogarth Triangle Beagle Rescue of NC www.tribeagles.org [EMAIL PROTECTED]
Re: questions about dividend tax cut
Fred Foldvary wrote: > If there are zero taxes on corporate profits, but taxes on dividends, then the incentive is to retain earnings rather than pay dividends, and the shareholders get the profits tax-free until the shares are sold for capital gains. The shares might never be sold, but passed on to heirs. > > For tax fairness, given the income tax, all income should be taxed equally, and for efficiency, the tax system should minimize the impact on decisions. > So it is better to tax corporate profits and then credit that against tax liabilities of dividend income. To achieve neutrality, unrealized gains should be taxed annually, and then we can forget about capital gains. > > That being said, the income tax is inherently unjust, complex, and > burdensome, but that is another story. I disagree (not with your last point of course ¡V and it is partly because I agree with you on this point, I disagree with you on the rest) Below is an extract (rather lengthy, sorry) from my publication "Simpler Taxes - A guide to the simplification of the british tax system" (the whole publication may be downloaded free of charge here: http://www.adamsmith.org/policy/publications/pdf-files/simpler- taxes.pdf) ¡§The first problem when taxing personal income is determining what it is, most importantly distinguishing it from capital gains. Some will find such a distinction impossible and even unwanted, believing that any capital gain should be taxed as income. To those it could be argued that: h There is a big difference between income and capital gains, and h While the former is easily identified and taxed, the latter is not. The difference between income and capital gains is, in theory, clear enough: an income is a certain payment at a certain date, subject to a formal or informal contract, while a capital gain is uncertain and not guaranteed to be positive. Thus work wages or interests on bank deposits are clearly incomes, while increases in house prices or shares are clearly capital gains. The former are certain and guarantied by contracts, while the latter are uncertain and could just as well be negative. Dr. Barry Bracewell-Milnes described the difference thus : ¡§It is rather like the difference between night and day. Certainly there is a dusky time in the evening where it is difficult to say confidently whether night has fallen or not. But at most moments within any 24-hour period, everyone is perfectly well aware whether it is night or day¡K If the otherwise insignificant boundary becomes important in some context, then we set an arbitrary cut-off point ¡V as we do with ¡§lighting up time¡¨, a convention to prevent people driving unsafely while the night is still deepening¡¨ But what about these borderline cases? Clearly the problem of separating income from capital gains, and the possibility of transforming the first to the latter, have been the main driving forces behind treating capital gains as personal incomes subject to taxation. The problem overlooked by those who find the border between the two hard to police is, however, that the inclusion of capital gains as an income opens up a host of other boundaries to be policed. To what extent should capital losses be deductible, if at all? Should all capital losses in one¡¦s entire lifetime be deductible from any capital gains, or only those from within the same year as any gains? What about inflation in that period? To what extent should running investments in physical capital, or the opposite as the case might be, be included in calculations of capital gains? If a house is sold after 20 years of decay for the same price as it was bought, indexed for inflation, then surely some capital gain must have been materialised along the way by the owner. Should this gain be taxed? How is it calculated? If the same house is sold for twice the original price after being vigorously kept and refurbished, should this investment not be deductible? What if the bottom has gone out of the housing market and the house, despite investments, is still only worth the original price? Should the investments still be deductible? The list of questions is never-ending, and I shall not attempt to answer any of them. Neither shall I attempt to answer the other question faced when including capital gains as taxable incomes: which capital gains should be taxed and which should not. If policing the boundary between income and capital gains is difficult, this new boundary is even more so. As interns or trainees, many young people work for low wages in the anticipation that their value as workers will rise from the experience, and other young people spend years in universities hoping the same. Clearly these increases in ¡§personal¡¨ values are capital gains, but neither are taxed. Only the part of personal values actually materialised as income (if any) is being taxed. The capital gain itself is not, a
RE: Neutral taxation?/was Re: questions about dividend tax cut
To Tom Grey (and others) 2 points: 1: why not retain land tax as a local tax, as this would ensure tax- payers the possibility of voting with ther feet, end thus ensure some degree of fiscal competition between neigbouring counties / municipalities? 2: I believe Austrain Economic Theory does noit regard inflation as a neutral tax, as one of it's main beliefs is that the earlier you get your hands on new money, the more you benefit - and vice-versa. I don't know whether this holds true for constant (that is: expected) inflation as you are descibing as well - anyone? Jacob Braestrup Danish Taxpayers Association > Dan, > even more than direct/indirect, you need to specify what is "neutral". > Given democracy, one (adult) person, one vote, a strong case can be made > for a "neutral" poll tax. > Of course it is not "progressive" like most income taxes. Flat rate > taxes, sales/VAT taxes, even land taxes, affect some more than others. > > My own preferences are more towards a flat(er) tax, with a large (poverty > level) deduction, and rates tending down (to zero?); a land tax, split > between local, state, and federal (1/3 each? 50-25-25?); and ever increasing > taxes on pollution. I am constantly annoyed at the greens wanting huge > regulation but unwilling to support higher pollution taxes. > Um, to get rid of the last 5% of income taxes, I'd even support deficit spending > printing money (inflation, another fairly "neutral" tax, > of about 2-3% per year). > > But of the course the MAIN problem is on the benfit side -- so many voters > want, claim, demand, and only-vote-for those politicos who offer their > favorite benefits. The demand for benefits drives the demand for tax > revenue. > > And the coming (2020) Social Security baby boomer elephant-sized funding gap > is gonna be a HUGE increase in benefit demand. > Europe is even more vulnerable than the US or the UK. > Sigh. "What is to be done?" (someone said that... I know, what's is name > the commie!) > > Tom Grey > > > > But this assumes that taxes can be neutral. I would tend to > > agree with > > Larry Sechrest here -- viz., there are no neutral taxes. (Sechrest's > > position is laid out in his "Rand, Anarchy, and Taxes" in _The Journal > > of Ayn Rand Studies_ 1(2).) > > > > Do any of you agree? > > > > Cheers! > > > > Dan > > http://uweb.superlink.net/neptune/ > > > > > > > > -- NeoMail - Webmail
RE: Neutral taxation?/was Re: questions about dividend tax cut
Dan, even more than direct/indirect, you need to specify what is "neutral". Given democracy, one (adult) person, one vote, a strong case can be made for a "neutral" poll tax. Of course it is not "progressive" like most income taxes. Flat rate taxes, sales/VAT taxes, even land taxes, affect some more than others. My own preferences are more towards a flat(er) tax, with a large (poverty level) deduction, and rates tending down (to zero?); a land tax, split between local, state, and federal (1/3 each? 50-25-25?); and ever increasing taxes on pollution. I am constantly annoyed at the greens wanting huge regulation but unwilling to support higher pollution taxes. Um, to get rid of the last 5% of income taxes, I'd even support deficit spending printing money (inflation, another fairly "neutral" tax, of about 2-3% per year). But of the course the MAIN problem is on the benfit side -- so many voters want, claim, demand, and only-vote-for those politicos who offer their favorite benefits. The demand for benefits drives the demand for tax revenue. And the coming (2020) Social Security baby boomer elephant-sized funding gap is gonna be a HUGE increase in benefit demand. Europe is even more vulnerable than the US or the UK. Sigh. "What is to be done?" (someone said that... I know, what's is name the commie!) Tom Grey > But this assumes that taxes can be neutral. I would tend to > agree with > Larry Sechrest here -- viz., there are no neutral taxes. (Sechrest's > position is laid out in his "Rand, Anarchy, and Taxes" in _The Journal > of Ayn Rand Studies_ 1(2).) > > Do any of you agree? > > Cheers! > > Dan > http://uweb.superlink.net/neptune/ > > >
