Taxes, we don't need no stinkin' taxes!

[midwestyankee]

It's that time of year when a young man's interest turns to....taxes.

Following on a point made elsewhere, there appears to be some interest in talking about alternatives to the somewhat arcane and complicated tax code that we Americans live by (generally speaking, I'm assuming that none of us here live on self-sufficient compounds in the Wyoming wilderness). So let's have a place where, when the mood strikes us, we can yammer about taxes for our own amusement.

I begin with these propositions:

While no one in human history has ever liked taxes except the royalty (and those who function like royalty) who lived off them, Americans like to think that it's possible to create a tax system that will feel fair.

Everyone thinks that his or her own taxes are too high and that everyone else pays too little.

Not all tax plans that look good on paper will ever work well enough to pay for a government that is sufficient for a population of 300 million.

All discussions of taxation tend to devolve with side-plot rants about the size of government. That is a separate topic and to talk about it I suggest you set up shop at least three doors down the hall.

Now, with those propositions in place, let me present what I think is the fairest simplified taxation proposal that I've seen. Its author is Megan McArdle, who currently is a blogger at The Atlantic. She holds mostly libertarian political beliefs, earned an MBA from one of the Ivy League B School (I forget which one), and is several inches taller than I am. On this somewhat superficial basis I find her to be reasonably well qualified to talk about taxation. More accurately, her discussions of taxation and economics appeal to me because they are thorough, articulate, and well reasoned.

So, here's her tax plan, first proposed when she blogged under the name of Jane Galt.

Thoughts, comments?

 

[graceanne]

Looks good to me. *shrugs* Me and K think their should be a flat percent tax. No going around it, no deductions, etc. And we definitely think we should stop doing social security the way we're doing it right now.

 

[Bi_Kitty]

Looks good to me. *shrugs* Me and K think their should be a flat percent tax. No going around it, no deductions, etc. And we definitely think we should stop doing social security the way we're doing it right now.

I think if they are going to do social security it should be locked box so it would take some of the burden off the generation paying for the social security. But then again, everyone says 'social security is not going to be around when you get ready to retire.' Yes, it will be because the generation behind mine will be paying for my social security benefits.

If there was a flat tax it would make it so much easier on accountants. I don't ever see a flat tax anytime in the future.

 

[WriterDom]

It sounds like a plan. For as much as my little mind could comprehend it in one reading. Eliminating or at least reducing the corporate tax rate makes a lot of sense. Anything to make our corporations more competitive in the global marketplace makes sense to me. But then again I'm not one to get outraged at ExxonMobil's profits as long as their profit margins are reasonable.

 

[rigged4dive]

Taxes are simply the price of admition to a civilized society. A graduated income tax ensures that those who derive the most benifits from the common resources which taxes pay for, such as; a court system to regulate and enforce contracts, a public road system to transport their manufactured goods, a well educated work force created at public expense, etc., pay for a larger percentage of those commmon resources. It also provides a buffer, along with the inheritance tax, against the creation of an economic plutocracy that is the equivelent of the landed gentry class of fuedalistic societies of ages past.

Thirty years of massive tax cuts to those who need them least, deregulation of the economy, and blatant disregard for labor and anti-trust laws, have led us to the brink of the same precipice we faced in the late 1920's. Hopefully, history has taught us something.

Good book you might want to check out:
http://www.amazon.com/New-Golden-Ag...d_bbs_1?ie=UTF8&s=books&qid=1208372243&sr=8-1

 

[Netzach]

It's that time of year when a young man's interest turns to....taxes.

Following on a point made elsewhere, there appears to be some interest in talking about alternatives to the somewhat arcane and complicated tax code that we Americans live by (generally speaking, I'm assuming that none of us here live on self-sufficient compounds in the Wyoming wilderness). So let's have a place where, when the mood strikes us, we can yammer about taxes for our own amusement.

I begin with these propositions:

While no one in human history has ever liked taxes except the royalty (and those who function like royalty) who lived off them, Americans like to think that it's possible to create a tax system that will feel fair.

Everyone thinks that his or her own taxes are too high and that everyone else pays too little.

Not all tax plans that look good on paper will ever work well enough to pay for a government that is sufficient for a population of 300 million.

All discussions of taxation tend to devolve with side-plot rants about the size of government. That is a separate topic and to talk about it I suggest you set up shop at least three doors down the hall.

Now, with those propositions in place, let me present what I think is the fairest simplified taxation proposal that I've seen. Its author is Megan McArdle, who currently is a blogger at The Atlantic. She holds mostly libertarian political beliefs, earned an MBA from one of the Ivy League B School (I forget which one), and is several inches taller than I am. On this somewhat superficial basis I find her to be reasonably well qualified to talk about taxation. More accurately, her discussions of taxation and economics appeal to me because they are thorough, articulate, and well reasoned.

So, here's her tax plan, first proposed when she blogged under the name of Jane Galt.

Thoughts, comments?

Looks good, even though I'm the queen of deductions since I went self-employed. I'd trade those for a social system that didn't suck balls.

Or make some of the breaks more incentive based. Give people incentives NOT to sprawl drive giant cars everywhere live in townhomes on what was rural property use green materials in their manufacture build a sustainable house or building or hire a certain percentage of people in welfare-to-work programs that actually have educational job training and entrepreneurial components to them, not just pick up roadside trash in the rain or lose your house slavery. The problem is that so many incentives and breaks are off limits to mere mortals or only for the extremely poor who are reproducing. (?) The fact that I'd get a tax credit on a hybrid car and could write it off as a business expense in part still isn't putting the money or the good credit into my cash-strapped paws to actually DO it - this is what I mean. A credit for renting might help offset that - a substantial credit with teeth.

 

[Netzach]

total ignorant dumbassed question - if you are active military, do you pay in? Do you pay in the same rate as my cush protected ass at home?

If so, how messed up is that?
There should be some kind of a break for people doing military and helping professions. A sweat equity option. Americorps for the postcollege set.

 

[rigged4dive]

Yes ma'am, active military pays in at the same rate as civilian, although certain allowances are not taxable. Generally, anything that says "allowance", such as:

Basic allowance for quarters

is non-taxable.

Anything that says "Pay", such as:

Base Pay
Sea Pay
Submarine Pay
Proficiancy Pay
Hazardous duty pay
Combat Pay

are fully taxable.

 

[graceanne]

If there was a flat tax it would make it so much easier on accountants. I don't ever see a flat tax anytime in the future.

I didn't say I saw it happening, just that that's what I THINK should happen. Beyond that, even if it happened they'd keep trying to raise the percent. The only way it would work is if the misc agencies that our taxes are going to were made to keep to a budget.

LOL Silly me, living in dream land. MADE TO KEEP TO A BUDGET? HAHAHAHA I come up with the strangest things, sometimes.

total ignorant dumbassed question - if you are active military, do you pay in? Do you pay in the same rate as my cush protected ass at home?

If so, how messed up is that?
There should be some kind of a break for people doing military and helping professions. A sweat equity option. Americorps for the postcollege set.

I could be wrong, but I'm pretty sure that some of the pay made while in Iraq/Afghanistan is either not taxable or taxed less.

 

[midwestyankee]

Good to see some replies here.

My own take is pretty similar to Megan's: taxes are fair when they are simple and affect everyone more or less equally. Beyond a certain point, it's okay to let the rich get richer but there should be no penalty for choosing to rent rather than buy a home. The mortgage-interest deduction was, in essence, a bail-out of the banking industry and created all by its lonesome several nasty inequalities.

While simplicity in the tax code would cut down on the need for highly-trained accountants, I honestly believe that it would have an overall positive affect on productivity.

 

[caela]

Taxes are simply the price of admition to a civilized society. A graduated income tax ensures that those who derive the most benifits from the common resources which taxes pay for, such as; a court system to regulate and enforce contracts, a public road system to transport their manufactured goods, a well educated work force created at public expense, etc., pay for a larger percentage of those commmon resources.

The problem with a graduated tax system is that it is those at the top that create it and create it with so many loopholes (that while they could apply to anyone are really only feasible when applied to them) that those making the most are often those paying the least.

Personally I think a graduated system is inherantly unfair. If I bust my ass off to make a better than average living, for myself and my family, why should I be penelized for my hard work by being taxed at a higher rate than someone lazier than I am who makes less money?

Oh and just a personal quip...I think an inheratance tax is utter bullshit. If my parents work their asses off (or their parents did or someone down the line did whatever) to earn and buy nice things and save up money than that money and those items have already been taxed and should not be subject to further taxation simply because the original earner has died and that money, or those items, has traded hands.

 

[graceanne]

Oh and just a personal quip...I think an inheratance tax is utter bullshit. If my parents work their asses off (or their parents did or someone down the line did whatever) to earn and buy nice things and save up money than that money and those items have already been taxed and should not be subject to further taxation simply because the original earner has died and that money, or those items, has traded hands.

It's the govt's way of double taxing stuff. It gets taxed while your parents had it, and then they get to REtax it. How very like our govt.

 

[caela]

It's the govt's way of double taxing stuff. It gets taxed while your parents had it, and then they get to REtax it. How very like our govt.

lol...Oh I know why it gets done! It's just my own personal little gripe. If either of my folks actually had anything of real value that the gov't would want to re-tax when they died I'd probably be absolutely irate about it.

 

[Netzach]

I do disagree on the child/deduction issue, even as someone who doesn't have kids and feels pretty staunchly about it and doesn't particularly LOVE paying into a system for other people's children.

Children become adults. Duh. You need to look at them as citizens and not someone else's property.

I think educated, safe, fed, healthy next-round-of-adults is better than poor, desperate, uneducated, uncared for, isolated from society next-round-of-adults. Whether I particularly care for their parents or not. I think giving people education and opportunity and a strong foundation from which to flourish or screw up on their own merits is important. I think the children of the poor are especially punished in the current model.

 

[graceanne]

lol...Oh I know why it gets done! It's just my own personal little gripe. If either of my folks actually had anything of real value that the gov't would want to re-tax when they died I'd probably be absolutely irate about it.

LOL I hear that. My dad's a bit cranky right now. My grandma owned nice house in the hills of Hayward, CA. (Read cha-CHING) Right now it's going through 'probate' - in other words they're taking their sweet as time to REtax Grandma's property before it can be turned over to her children.

 

[WriterDom]

http://en.wikipedia.org/wiki/Image:Income_Taxes_By_Country.svg

In case you are wondering what others pay. Ireland would be a good place to start a corporation.

 

[Netzach]

http://en.wikipedia.org/wiki/Image:Income_Taxes_By_Country.svg

In case you are wondering what others pay. Ireland would be a good place to start a corporation.

It is, and a lot of corps have gone there. You have an educated workforce, a very corp-friendly structure...

AND a decent social welfare system.


All this in a place that, when I lived there for a few months in '89 and talked to my peers about plans they all were "get the feck out of here, and then..."

 

[caela]

LOL I hear that. My dad's a bit cranky right now. My grandma owned nice house in the hills of Hayward, CA. (Read cha-CHING) Right now it's going through 'probate' - in other words they're taking their sweet as time to REtax Grandma's property before it can be turned over to her children.

See that is bullshit. Your grandma paid for her house and land and they should transition to her children without all this crap. Now certainly if property taxes were outstanding or the place was mortgaged to the hilt then the bank and the state might have cause to step in and say "Umm, listent here are some unsettled issues here," but if her taxes were paid up and the place paid off then the gov't shouldn't get to do a damned thing other then do a background check to make sure that your dad is the correct person to be signing the new deed over to.

 

[graceanne]

It is, and a lot of corps have gone there. You have an educated workforce, a very corp-friendly structure...

AND a decent social welfare system.


All this in a place that, when I lived there for a few months in '89 and talked to my peers about plans they all were "get the feck out of here, and then..."

Doesn't Ireland also have one of the highest costs of living?

 

[graceanne]

See that is bullshit. Your grandma paid for her house and land and they should transition to her children without all this crap. Now certainly if property taxes were outstanding or the place was mortgaged to the hilt then the bank and the state might have cause to step in and say "Umm, listent here are some unsettled issues here," but if her taxes were paid up and the place paid off then the gov't shouldn't get to do a damned thing other then do a background check to make sure that your dad is the correct person to be signing the new deed over to.

My grandma bought that place back when it was farm country. It was paid off, and the taxes were up to date. Yeah, my dad and his siblings are a bit pissed that it's getting taxed AGAIN. Not to mention how long the govt is taking to fuck them over. Grandma died last June - it's STILL in probate. My sister's a bit stressed, too, cause my aunts promised to make sure to take out enough money to pay for her to get her phlebotomy license from the money from the house.

 

[Netzach]

Doesn't Ireland also have one of the highest costs of living?

It's up there, I'm sure, but I believe it's slightly lower than the UK, and as with all places, it depends where and how you live. Dublin felt pretty identical to NYC in terms of how my cash went, only with fewer people driving around and better more frequent bus service.

But the transformation is HUGE in the last decade plus, HUGE. To think that there's net immigration for the first time in well over, what 600 years? The tech boom really transformed the place. There's a lot of pharma there, too.

 

[graceanne]

It's up there, I'm sure, but I believe it's slightly lower than the UK, and as with all places, it depends where and how you live.

But the transformation is HUGE in the last decade plus, HUGE. To think that there's net immigration for the first time in well over, what 600 years? The tech boom really transformed the place.

Cool. I'll admit that the report I did on Ireland was over a decade ago (I was 16, so 14 years ago).

 

[Netzach]

Cool. I'll admit that the report I did on Ireland was over a decade ago (I was 16, so 14 years ago).

I think that's probably when everything was just beginning to change. It was very limited-outlook bleak and Trainspotting like when I was there in terms of how people felt about living there.

 

[graceanne]

I think that's probably when everything was just beginning to change. It was very limited-outlook bleak and Trainspotting like when I was there in terms of how people felt about living there.

I remember reading somewhere that Ireland's biggest export was people.

 

[Bi_Kitty]

Oh and just a personal quip...I think an inheratance tax is utter bullshit. If my parents work their asses off (or their parents did or someone down the line did whatever) to earn and buy nice things and save up money than that money and those items have already been taxed and should not be subject to further taxation simply because the original earner has died and that money, or those items, has traded hands.

I agree I think inheritance tax is a bunch of B/S. However, there are ways around it. One way that I'm thinking of right now is the elder person is allowed up to $12,000/year in gifts/person. The problem comes into play that older people want to hold onto their stuff as long as possible and then leave it all for a person at the end. When it ends up hurting everyone, really.

That's just like if a older person has a $200,000 house today (and they might have paid $30 or $40,000 when they bought it) and HAS to buy all their appliances at Sears or somewhere equally as high. That person might have $15,000 debt on a Sears card with a high end interest rate and pay on it for XX number of years. But heaven forbid you try to explain to an older person, if you take out a $15,000 home equity loan and pay off the high-end Sears card, you can save money because home equity loans have cheaper interest rates and deduct the interest on it. OH NO!!! You can't, I swear! They think the gov't will come get their $200,000 home if they miss one of their payments since they owe $15,000 on their home. *sigh*

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