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/
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
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? 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: 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?/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 proposed the cut (lower increase) doesn’t receive
Re: Neutral taxation?/was Re: questions about dividend tax cut
Dear Dan, I actually do agree, which is part of why when my conservative friends would support a national sales tax instead of an income tax as though a national sales tax were a panacea I'd just shake my head and tell them, there's no such thing as an unburdensome tax. There's no unburdensome way for the federal government to confiscate a third of national income. Some taxes bear more heavily on some people than others, so shifting between them may change how much of the burden a particular individual shares. People naturally tend (and I do say tend) to support moving to a sytem that shifts some of the burden they bear to somebody else, or on keeping the status quo if the current system rests relatively little burden on themselves. (As a case in point, a farmer showed up to listent to Indiana Senator Dick Lugar, campaigning for president in Iowa, speak about replacing the income tax with a sales tax. 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.) I can't imagine any tax that would be neutral, but some might be less injurious to economic growth than others. I'm not persuaded, however, that taxing consumption more heavily than income will discourage economic growth any less than taxing income more heavily than consumption, since the ultimate goal of producing income is to consume it anyway. In a message dated 1/15/03 10:51:58 PM, [EMAIL PROTECTED] writes: On Wednesday, January 15, 2003 7:11 PM Fred Foldvary [EMAIL PROTECTED] wrote: To achieve neutrality, unrealized gains should be taxed annually, and then we can forget about capital gains. 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
