View Full Version : Forget the Rich, Let's Increase the Tax Base!
BMT (RIP)
12-13-2010, 09:24
http://www.foxnews.com/opinion/2010/12/13/forget-rich-lets-increase-tax-base/
BMT
I'd would be inclined to agree, especially if we all paid the same percentage and no one was rewarded or penalized because of their income level.
1stindoor
12-13-2010, 11:16
And let's see...how can we increase our tax base?...I know, lets legalize all of those downtrodden illegal immigrants and make them US citizens!
And let's see...how can we increase our tax base?...I know, lets legalize all of those downtrodden illegal immigrants and make them US citizens!
...or better yet...keep downtrodden illegals illegal and institute the fair tax. That way we can have the best of both worlds. A plethora of cheap illegal labor...while Uncle Sugar still get his slice of the take! What a bargain! All that, and we can still be outraged over the lack of border security. It is a Win/Win.
Regarding bringing in more immigrants, legal or otherwise...
I wonder. True, if they're brought in, one gets more individuals earning money and presumably paying taxes. (Yes, I understand the "pink" signal.
But the other side of that is an increased supply of labor, which must surely drive down the price for other labor of similar skill levels. At the bottom levels, the individuals earn so little that they pay little or no income tax, although they do still pay Medicare and Social Security withholding. In addition, they may consume additional services such as subsidized housing, food stamps, and Medicaid.
If we sharply reduced immigration, particularly illegal immigration, I wonder if the wage scale would tend to move up, thus pushing people into higher brackets.
Would it increase labor costs and prices to consumers? Probably. But it might be a way to shift more of the population into a higher tax bracket.
Would a flat tax of 10% across the board work?
Be it, aluminum can collector, CEO/Pres., mail room worker, lawn care provider, pimp, whore, drug user, etc....
Would a flat tax of 10% across the board work?
Not a "flat tax" but a "consumption tax". You only pay taxes when you buy something, rather than trying to figure out "earned income". With earned income, a drug dealer, for example, will report no earned income...he would be a total nut case to try to do so...so he doesn't pay taxes. He does, however; go out and pimp his ride, buy some cop killas for his Glock fo-tay, and get some new bling every now and then. With the fair tax, he is paying taxes for each transaction.
Right now, almost half of the folks that file taxes don't actually pay taxes. They get back everything they paid in...and some get back more. If that isn't a classic example of redistribution of wealth...then there isn't such a thing.
1stindoor
12-14-2010, 07:44
Not a "flat tax" but a "consumption tax"....
I readily admit I'm fairly ignorant of a lot of the "tax issues," however, I contend that we already pay a consumption tax. Our products are taxed many times over during their production, import, shipping, etc...and then taxed again by the local and state at the point of sale.
I readily admit I'm fairly ignorant of a lot of the "tax issues," however, I contend that we already pay a consumption tax. Our products are taxed many times over during their production, import, shipping, etc...and then taxed again by the local and state at the point of sale.
A consumption tax would replace sales tax and income tax.
I am not an expert on the subject, but I have read the book, and I stayed at a Holiday Inn express last night. There are some very good points to instituting the fair tax. Not only does it make everyone pay taxes, it also would open the floodgates for corporations to move to the US, as well as US corporations to bring their overseas revenue home.
Estimates are somewhere in the 5 trillion dollar range in regards to US corporate earnings that are squirrelled away overseas due to tax implications if they are brought home. (I totally pulled that stat out of my a$$, but I think NMAP will confirm/deny the dollar amount).
This also would reduce the tax code fom over 20,000 unintelligible pages down to very few. I was going to say "smaller is better"...but I felt a dogpile coming on.
1stindoor
12-14-2010, 09:51
A consumption tax would replace sales tax and income tax.
I am not an expert on the subject, but I have read the book, and I stayed at a Holiday Inn express last night...
Those two qualifiers are enough for me. I probably should do more than a overlook at the consumtion tax issue. One of the biggest questions I can imagine would be how would the state and local governments get their "cut?"
I also don't understand why it would make US manufacturers move back to the U.S., afterall there's still the wage and benefits package for their employees to consider. What would entice the company to come back to the US? Seems to me this genie has already escaped. Originally I suggested heavily taxing their products upon return to US soil...but that too will just get passed down to the consumer. Honestly I don't see any real fix until the average American consumer is willing to spend more to have things made and produced in the U.S.
Those two qualifiers are enough for me. I probably should do more than a overlook at the consumtion tax issue. One of the biggest questions I can imagine would be how would the state and local governments get their "cut?"
I also don't understand why it would make US manufacturers move back to the U.S., afterall there's still the wage and benefits package for their employees to consider. What would entice the company to come back to the US? Seems to me this genie has already escaped. Originally I suggested heavily taxing their products upon return to US soil...but that too will just get passed down to the consumer. Honestly I don't see any real fix until the average American consumer is willing to spend more to have things made and produced in the U.S.
Right now the US has the second highest corporate tax rates in the world. Going from second highest to none, you would assume it would prompt a move to headquarter your corporation in the US. Again, the taxation only happens upon purchase of an item, not on earnings.
There are already sales taxes embedded in every level of manufature of a good. These would all be stripped out and replace with a tax rate of 20% (I think). This would actually not make the price of goods go up. It would be practically transparent due to the embedded sales taxes. It has been awhile since I read the book, so the info isn't exactly fresh in my mind, but there was practically none of the plan that didn't make perfect sense.
We drafted a document 4 pages long that established the greatest form of government on Earth...but can't reduce the tax code to a manageable level. Go figure...
1stindoor
12-14-2010, 10:49
We drafted a document 4 pages long that established the greatest form of government on Earth...
That was quite possibly the best statement I've read in quite a long while.
Estimates are somewhere in the 5 trillion dollar range in regards to US corporate earnings that are squirrelled away overseas due to tax implications if they are brought home. (I totally pulled that stat out of my a$$, but I think NMAP will confirm/deny the dollar amount).
If we include high net-worth individuals, the amount may be twice that.
LINK (http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore.pdf)
The paper suggests about $11 trillion is offshore, and that the earnings could be on the order of $860 billion - which implies an uncollected tax (assuming 30% rate) of about $255 billion each year.
As a side-note, the tax revenue as a percentage of GDP is amazingly constant, ranging from 16.1% to 20.8%. This suggests that a 10% flat rate would require considerable spending cuts - but a 20% rate would put us where we are now. No doubt the fair tax rates could be adjusted for some suitable outcome.
LINK - Scroll down to table 2 at the bottom (http://www.cbpp.org/cms/index.cfm?fa=view&id=1324)
Would corporations come back if the tax rate were lowered? Perhaps. I suspect many regulations can be side-stepped (but not violated) with the right accounting tricks.
Would corporations come back if the tax rate were lowered? Perhaps. I suspect many regulations can be side-stepped (but not violated) with the right accounting tricks.
The question isn't would corporations come back if the tax rates were lowered...it is would they come back if the tax rates were GONE.
Federal tax revenue would be generated by consumption (purchase of goods) not earned income. Not sure how state taxes would play into this, but it is the federal tax system that chafes my a$$ anyway.
In reality, I wouldn't really care if it was a flat tax or the fair tax as long as it was less than 5 pages...and there were no exceptions. If everyone carries the same tax burden...that is a "fair" tax. As soon as you start throwing stipulations in there...special interest groups will be all over the legislators and we will be up to 20,000 pages and my ne'er-do-well brother in law getting back $5000 a year he never contributed in the first place.
ZonieDiver
12-14-2010, 13:37
I suspect many regulations can be side-stepped (but not violated) with the right accounting tricks.
Don't you mean "generally accepted accounting principles"? :D
Don't you mean "generally accepted accounting principles"? :D
By golly, you're right! GAAP all the way. :cool:
Buffalobob
12-14-2010, 16:00
We should tax fat Albert Haynesworth and the $26M he gets for not playing. The percentage of the tax should be based upon the inverse of his performance :D
mojaveman
12-14-2010, 17:08
Is it true that something like $20 billion goes back untaxed to Mexico and other South American countries every year from illegals who are working here?
Is it true that something like $20 billion goes back untaxed to Mexico and other South American countries every year from illegals who are working here?
Looks like. The Pew Hispanic Center has some figures from 2002, LINK (http://pewhispanic.org/reports/report.php?ReportID=13) and their projections suggest we could be at that level.
It could be that some of the money is earned in the conventional economy with taxes paid prior to transmission elsewhere - but tracking untaxed underground economy money is probably not easy.
The Reaper
12-16-2010, 14:47
Sadly I think taxes are going to have to go up and maybe even a VAT tax be implemented in order to close this deficit.
How about we curtail spending?
TR
I don't know if that's going to be enough is the thing. I think it may require a combination of very curtailed spending in combination with higher taxes.
Well...I wonder. Let's say we're talking something like education. Should we cut spending on education? The knee-jerk reaction may be negative, but truth be told their is a great deal of fat that could be cut from budgets.
How about health care? Should we pay for excellent care for everyone, even though there is no hope for recovery and precious little quality of life? Once again, the knee-jerk reaction is, perhaps, in the affirmative - but if the patient had more "skin in the game", might they not choose lower cost alternatives?
In area after area, high federal spending has distorted what we do and how we do it. Do we truly need all that spending? I confess that I wonder. And we might wish to reflect on the power that spending gives to faceless bureaucrats. If one controls all that money, one has lots of power. Might we be better off if the federal government did less, provided less - and local governments picked up the slack? And, if taxes weren't increased at the federal level, then there might be the possibility of doing so at a lower level.
I don't know if that's going to be enough is the thing. I think it may require a combination of very curtailed spending in combination with higher taxes.
Higher Taxes have never worked in the past. The politicians just figure they have more money to spend.
To get the horse to go faster you don't choke him out.
It's spending pure and simple. The government has got so many people hooked on "free money" it's going to hurt when reality sets in.
The "rich" do not have enough money to Tax our way out of the spending addiction.
1stindoor
12-16-2010, 15:26
I think it's a matter of curtailing spending...trimming the excess from all areas of government will do this. Then take a very hard look at the spending we have to do and make the hard decisions to cut back on those again.
The Reaper
12-16-2010, 16:12
True, I was being a little optimistic though. Maybe they can pull a first and do both (get some higher tax revenue and reduce spending).
I agree, however I don't mean any major tax increases that would starve the economy, just letting some of the Bush tax cuts expire perhaps, once the economy is healthy again; a VAT tax would be an emergency option I'd imagine.
Of course, once the economy is healthy again, we should see increasing revenues naturally, and then we can see if Congress continues to work to cut spending. If they do not cut spending with increased revenues from a healthy economy, then no tax increases.
Yes, but is it really possible to cut the wasteful forms of spending, to actually trim the fat? Is that literally doable, or impossible due to the bureaucracy. For example, we could reduce a lot of the military budget probably just by cutting fat in that too, while spending on the important stuff, at least theoretically, but in reality, it would probably be very difficult.
The Income Tax was a temporary measure, IIRC.
You can add the VAT, but the Income Tax will not go away. Instead, spending will rise to match new revenue.
Despite what he press and the Dims say, there is not that much fat in the military spending. This is going to require belt tightening from all, including those receiving entitlements.
TR