Taxation, progressive or otherwise
Apr. 28th, 2004 03:12 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
pluralSeveral recent posts have gotten me thinking about taxation in general, while most of the discussions have been focused on the income tax, there are a number of other taxes which one must take into account if one is to discuss the burden/fairness of the tax system.
I would posit that the core effect and duty of government is to prevent the have nots from forcibly taking the possessions (or lives) of the haves. Originally the necessity for possessing a military was to prevent a neighboring tribe from walking in and stealing your cattle and women. Police started as a way to prevent your neighbor from doing the same. Welfare keeps the impoverished masses fat and satiated on cable television so they do not revolt or otherwise fuck up the system.
There are widely varying degrees of have's in our society (by that I mean primarily the American society, but it holds true in most first world countries) from the comfortably middle class to the ultra-wealthy, pretty much anyone who has more than the most basic necessities of life, is invested in maintaining the status quo so that they can hold on to whatever it is they have managed to accumulate, and the poor are kept in line with fear of losing their handouts.
In raw dollar amounts, which I understand is not the best measure of tax burden, the rich pay by far more in taxes, however they receive far more services from government, so to me it seems fair. When I call the police, I know they will be there in less than five minutes and ending their sentences with "sir", and somehow I get the impression that someone in the ghetto doesn't get the same service. The wealthy get far more access, privilege and benefit from government than the poor ever will. So to me, sticking us with the majority of the burden seems entirely fair, after all the entire system is designed to protect that wealth and privilege.
However, there has to be an orderly way of going about it, with some sense of fairness to each class, not so much because I believe in fairness, but because it promotes stability across the system. Personally I am tired of hearing people bitching about getting a raw deal, when in fact, even the poor in this country have it pretty damn good by any worldwide standard.
For example, with regard to income tax, I have no problems paying the government a large chunk of change four times a year, because every time I pay them, it means my wallet got a little thicker that quarter. From my perspective, I do not look at taxes paid as money lost, but money gained. The only way I incur the tax is by making money, and I like making money. The death tax however rubs me the wrong way, for the same reasons. Instead of taking a cut whenever I make a profit, which means that I still end up better off than before, the death tax feels like kicking me when I amdown dead. Instead of the government taking a cut of profits they are taking away half of what I have built to leave to my family. (granted with proper estate planning much of that can be avoided, but my point is that it should not need to be avoided.)
Personally, I would like to see a system of taxation based on consumption. I would accomplish this through two mechanisms. The first being a sales tax, the rate being graduated in such a way to reflect the necessity of an item, for example groceries would not be taxed, gas and clothing would have a smaller tax, and that Ferrari would be heavily taxed. The second being property tax, also graduated in such a way that the tax rate for a small family home would be significantly smaller than a ten million dollar mansion. Even though such a system would probably increase my personal tax burden, it gives me the freedom to determine my tax obligation.
The problem with this sort of scheme is that in penalizes consumption, and encourages people to make do with less, which could be problematic for our economy. Secondly while the wealthy really wouldn't care, the middle class would never stand for it, because it would make those showy items they cant really afford like 60 inch televisions, that they buy on obscene credit terms, that much more expensive and harder to afford.
For Debate:
1) What advantages/disadvantages do you see with a consumption based taxation system similar to the one I have described above?
2) What in your mind would be method to fairly spread the tax burden over the socio-economic strata of society?
3) What core values should a tax system incorporate in order to promote stability and prosperity in a society?
I would posit that the core effect and duty of government is to prevent the have nots from forcibly taking the possessions (or lives) of the haves. Originally the necessity for possessing a military was to prevent a neighboring tribe from walking in and stealing your cattle and women. Police started as a way to prevent your neighbor from doing the same. Welfare keeps the impoverished masses fat and satiated on cable television so they do not revolt or otherwise fuck up the system.
There are widely varying degrees of have's in our society (by that I mean primarily the American society, but it holds true in most first world countries) from the comfortably middle class to the ultra-wealthy, pretty much anyone who has more than the most basic necessities of life, is invested in maintaining the status quo so that they can hold on to whatever it is they have managed to accumulate, and the poor are kept in line with fear of losing their handouts.
In raw dollar amounts, which I understand is not the best measure of tax burden, the rich pay by far more in taxes, however they receive far more services from government, so to me it seems fair. When I call the police, I know they will be there in less than five minutes and ending their sentences with "sir", and somehow I get the impression that someone in the ghetto doesn't get the same service. The wealthy get far more access, privilege and benefit from government than the poor ever will. So to me, sticking us with the majority of the burden seems entirely fair, after all the entire system is designed to protect that wealth and privilege.
However, there has to be an orderly way of going about it, with some sense of fairness to each class, not so much because I believe in fairness, but because it promotes stability across the system. Personally I am tired of hearing people bitching about getting a raw deal, when in fact, even the poor in this country have it pretty damn good by any worldwide standard.
For example, with regard to income tax, I have no problems paying the government a large chunk of change four times a year, because every time I pay them, it means my wallet got a little thicker that quarter. From my perspective, I do not look at taxes paid as money lost, but money gained. The only way I incur the tax is by making money, and I like making money. The death tax however rubs me the wrong way, for the same reasons. Instead of taking a cut whenever I make a profit, which means that I still end up better off than before, the death tax feels like kicking me when I am
Personally, I would like to see a system of taxation based on consumption. I would accomplish this through two mechanisms. The first being a sales tax, the rate being graduated in such a way to reflect the necessity of an item, for example groceries would not be taxed, gas and clothing would have a smaller tax, and that Ferrari would be heavily taxed. The second being property tax, also graduated in such a way that the tax rate for a small family home would be significantly smaller than a ten million dollar mansion. Even though such a system would probably increase my personal tax burden, it gives me the freedom to determine my tax obligation.
The problem with this sort of scheme is that in penalizes consumption, and encourages people to make do with less, which could be problematic for our economy. Secondly while the wealthy really wouldn't care, the middle class would never stand for it, because it would make those showy items they cant really afford like 60 inch televisions, that they buy on obscene credit terms, that much more expensive and harder to afford.
For Debate:
1) What advantages/disadvantages do you see with a consumption based taxation system similar to the one I have described above?
2) What in your mind would be method to fairly spread the tax burden over the socio-economic strata of society?
3) What core values should a tax system incorporate in order to promote stability and prosperity in a society?
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no subject
Date: 2004-04-28 10:12 am (UTC)2) that is exactly what I was suggesting, getting rid of the income tax and other taxes and replacing them entirely with those two forms of graduated tax
3) not sure what you mean by spread it around thin?
I agree entirely that the building of roads, legals systems, and other overseers are to protect the wealth of the haves, while I didnt specifically cite them as examples, again they are items that the wealthy benefit more from than the average american. A factory owner gains wealth by having a proper road system to get his goods to market, the average joe doesnt.
no subject
Date: 2004-04-28 10:31 am (UTC)Q: So why is it that these duchebags support conservative candidates who undermine the system by placing a greater burden on the folks that ultimately buy their products by lowering the taxes on the rich, and (nearly) eliminating the corporate tax?
A: Liberal education. Had it not been for these dipshits to rise the ranks of a good liberal education and become 'cash rich' by landing a CEO job, or getting lucky by striking out on their own and being a successful entreprenur, they'd know better from hearing these arguements over and over again at family gatherings...
It's the freakin' hippies and their glories ideas of letting the 'little people' rise up with adequate education. Those fucksticks are going to ruin for the rest of us bubba.
no subject
Date: 2004-04-28 10:54 am (UTC)I have noticed [i.e. anecdotal observation] that it is the middle and upper middle class conservatives who are most likely to rail against the tax burden placed on the rich and insist on spreading out the tax burden over the strata. Forbes grand flat tax plan isnt designed to woo the rich to his side, but to appeal to the middle class's idea of fairness, even though it is most likely to their detriment.
I have thought on why this is, and I think is is because many of these people see themselves as "going to be rich some day" and idolizing the wealthy so feel like they have to support these ideals in order to justify their need to become wealthy and show their qualifications to join such a privileged class.
It is entirely amazing to me, having as you said heard these arguments growing up at family gatherings, how entirely ignorant our so called educated middle class is on the most basic economic and financial structures and practices. You get some cash rich middle class kid, who is spending his money nearly as fast as he earns it on status symbols to show off how successful he is, and of course he resents the tax burden placed on him. Of course if he was practicing sound financial discipline instead of blowing his wad on status symbols, he would be able to afford his toys without worrying about it.
no subject
Date: 2004-04-28 11:39 am (UTC)yup.
wealth isn't cashflow, and baubles aren't status.
no subject
Date: 2004-04-28 11:45 am (UTC)watching the new money
crash and burn
trying
is pretty damn amusing
no subject
Date: 2004-04-28 12:25 pm (UTC)