Cutting Taxes

[MyGodWearsAHoodie]

and by the way .. this is a tax on income .. not on wealth ..

There are two forms of taxes on wealth as opposed to income. 

Property tax - in many states the bulk of local tax revenues.  This is almost always flat and not progressive. 
Inheritance tax - only paid once per generation with multiple tricks for the superwealthy to avoid most of it.  This is progressive.

Personally I would like to see us move away from taxing income and instead tax spending by getting rid of income tax and instituting a nation VAT or sales tax.  I would exempt some items from the VAT such as food and clothing under a certain price point, medical care, residential rent, needed utilities such as electric (cable would be taxed), and some other items.

[crazy_scar_man]

What about taxing the things we buy instead of income? Spend less, pay less taxes.

[bsfins]

Ok, I'm not sure if this has been mentioned,or the ramifications, Reading a couple of posts...Why not...

If you make $350k,only the 100k,over the 250K threshhold..If you make 500K,then you're taxed at the higher rate for the 250k....

Does that make sense? So everyone gets the tax break,up to 250k.....People paying higher still get a break, just on the first 250k.....

[badger6]

Because they have more disposable income.

This nation has to pay for a lot of things like infrastructure, military, and, yes, social programs.  In order to be able to afford to pay for them, there needs to be a certain level of revenue.  Right now, the revenue isn't high enough, so that leaves us with one of three non-exclusive choices:

1) cut spending
2) tax the lower income earners more
3) tax the upper income earners more

You find me a politician that wants to make significant cuts to any of the top three government line-items (Medicare, Social Security, defense) and I'll show you a politician that's out of a job.  So already, we've eliminated 82% of the budget from scrutinization.

If you care about running a balanced budget, you need to increase taxes.  And sorry, but if you're going to tell me that a low-income family being unable to afford to send their kid to college so that a person making $10M can keep 2% more of his income is "more fair," you and I have drastically different definitions of what the word fair means.

I do not see a nation in which we have a tiny, super-rich aristocracy and a sprawling majority of poor serfs as "the American dream."

Revenue is not only taxes. There are plenty of things that the good ole' gubment could do to cut spending and increase revenue.

1. Repeal Obamacare. Not sure how much this would save, but I bet is substantial.

2. Quit the war on drugs. This alone would save $40 billion a year and generate another $20 billion in drug taxes. Not to mention the money you would save from locking up non-violent drug offenders and probably many more related savings.

Those are 2 examples of things that could be done to fix this train wreck. This problem is too big for tax revenue to fix. They may tax the rich more in the next year or two, but when that doesn't work (and it won't), who do you think is next for higher taxes ? It ain't gonna be our pets ! These problems can be solved but not with the same old tax and spend solutions that we have been using for the last 60 years.

Personally I would like to see us move away from taxing income and instead tax spending by getting rid of income tax and instituting a nation VAT or sales tax.  I would exempt some items from the VAT such as food and clothing under a certain price point, medical care, residential rent, needed utilities such as electric (cable would be taxed), and some other items.

^^^This. I would support this 1000%. But you have to realize that everyone is still paying the same percentage. Just on what they buy, not what they make. This would actually allow the rich to get even richer(not that that is a bad thing) as there would be no taxes on investment income.

[Dave Gray]

Ok, I'm not sure if this has been mentioned,or the ramifications, Reading a couple of posts...Why not...

If you make $350k,only the 100k,over the 250K threshhold..If you make 500K,then you're taxed at the higher rate for the 250k....

Does that make sense? So everyone gets the tax break,up to 250k.....People paying higher still get a break, just on the first 250k.....

That's a good idea.

[Dave Gray]

What about taxing the things we buy instead of income? Spend less, pay less taxes.

That's proposed, but I have a big fear with that.

1) It would greatly promote saving instead of spending.  (The sales tax would have to be very high...like 20%.)  That alone could really hurt the economy.  It would also promote buying taxless items, like black-market stuff, or person to person sales.  I think it might be too damaging.

[MyGodWearsAHoodie]

^^^This. I would support this 1000%. But you have to realize that everyone is still paying the same percentage. Just on what they buy, not what they make. This would actually allow the rich to get even richer(not that that is a bad thing) as there would be no taxes on investment income.

My reason for supporting the VAT has to do with how it helps us compete internationally not farness.

But it would not necessarily result in a flat tax, because of the way I would implement it.  I would not be taxing at all what a poor person spend 75%-95% of their income on...food, clothing, medicine, rent.  For the most part the only things poor people would be paying tax on would be the luxury's they purchase, such as booze, video games ect.  The purchase of used items (thing sold at a loss vs the original price) would not be taxed. (You only pay tax on the Value Added)  So a poor person’s car purchase would not be taxed but someone who buys a new one would be taxed.  Both would pay tax on gas.  I would exempt the use of public transportation (bus, subway) entirely.  But cabs and limos would be taxed. 

Also the plan might tax different things at different rate.  Food at a grocery store is exempt; food at a restaurant 20%.   Commercial passenger airline ticket 20%, private airplane 35%. 

Also I would be eliminating the income tax.  I would keep the inheritance tax. 

[badger6]

That's a good idea.

Yea, that's how they do state income taxes here. 3% up to XXX, then 4% on the next XXX, then 5% of the last XXX.

So a person making 30,000 after E&D would pay......

3% up to $5000 =  $150
4% from $5001-$10,000 = $200
5% from $10,000 and up = $1000   Total $1,350.00

[MyGodWearsAHoodie]

It would promote saving...and investing...which drives the economy.  And while it would raise prices it would also raise effective income as you would take home more money in your pay check.  That should off-set.  But we would no longer be taxing labor.  Which makes it more appealing to export items from the USA and less appealing to import items into the USA.  Helping domestic manufacturing compete with workers overseas.  

The blackmarket would not be that serious of a problem because the tax is collected at each stage of the distribution chain (like in Europe) not solely at the end purchase (like most state sales taxes)

That's proposed, but I have a big fear with that.

1) It would greatly promote saving instead of spending.  (The sales tax would have to be very high...like 20%.)  That alone could really hurt the economy.  It would also promote buying taxless items, like black-market stuff, or person to person sales.  I think it might be too damaging.

[Sunstroke]

My reason for supporting the VAT has to do with how it helps us compete internationally not farness.

But it would not necessarily result in a flat tax, because of the way I would implement it.  I would not be taxing at all what a poor person spend 75%-95% of their income on...food, clothing, medicine, rent.  For the most part the only things poor people would be paying tax on would be the luxury's they purchase, such as booze, video games ect.  The purchase of used items (thing sold at a loss vs the original price) would not be taxed. (You only pay tax on the Value Added)  So a poor person’s car purchase would not be taxed but someone who buys a new one would be taxed.  Both would pay tax on gas.  I would exempt the use of public transportation (bus, subway) entirely.  But cabs and limos would be taxed. 

Also the plan might tax different things at different rate.  Food at a grocery store is exempt; food at a restaurant 20%.   Commercial passenger airline ticket 20%, private airplane 35%. 

Also I would be eliminating the income tax.  I would keep the inheritance tax. 

I like most of this train of thought...but I think taxing restaurant-goers too much could be a problem.

It would also promote buying taxless items, like black-market stuff, or person to person sales.  I think it might be too damaging.

You increase the penalties for that sort of tax evasion to the point where it becomes a real risk...and, imo, people will pay the tax instead of risking a massive fine or jail time.

[badger6]

That's proposed, but I have a big fear with that.

1) It would greatly promote saving instead of spending.  (The sales tax would have to be very high...like 20%.)  That alone could really hurt the economy.  It would also promote buying taxless items, like black-market stuff, or person to person sales.  I think it might be too damaging.

Actually saving is what this country needs instead of spending. Spending got us into this problem to begin with, people buying shit they didn't need on credit. The powers that be want us to spend money and be in debt. If you do that you are a slave. If you save money, you have much more control of your life. Another problem is that we don't manufacture shit here anymore. In addition to getting rid of obamacare and the war on drugs. I would tax and tarrif the shit out of most imported items to level the playing field and get our industrial and manufacturing base back. Everyone wants to make good money and have cheap shit, you can't have both for too long before it backfires like it has in the last few years.

[MyGodWearsAHoodie]

I like most of this train of thought...but I think taxing restaurant-goers too much could be a problem.

Being we are getting most of the national revenue from this tax and getting rid of income tax...the standard rate for the tax would be 15-20%.  I would tax restaurants and commerical airlines at the standard rate, and things like private airplanes higher.  Vices items (smoking, booze, gambling) would also get the higher rate.  

[badger6]

It would promote saving...and investing...which drives the economy.  And while it would raise prices it would also raise effective income as you would take home more money in your pay check.  That should off-set.  But we would no longer be taxing labor.  Which makes it more appealing to export items from the USA and less appealing to import items into the USA.  Helping domestic manufacturing compete with workers overseas.  

The blackmarket would not be that serious of a problem because the tax is collected at each stage of the distribution chain (like in Europe) not solely at the end purchase (like most state sales taxes)

Sorry I missed this post, but you are exactly right. You would take home more money. But also it would directly help with unemployment by stimulating domestic manufacturing. I still think that an import tax would still be needed to an extent on imported goods. We all know you have to pay US workers more than the slave labor in different countries, so to offset that you need to take away the incentive to import all this Chinese bullshit. Not to mention that the import tax and tarrifs would increase the government revenue a good bit. Pay the government import tax or pay US workers to build that shit here, your choice. Either way it's good for the country !!!

[MyGodWearsAHoodie]

I still think that an import tax would still be needed to an extent on imported goods.

Import taxes violate our trade agreements.  And this does not fix all of the labor cost imbalance just makes the imbalance smaller.  Unlikely to result in the importation of many jobs...but will slow the exportation of jobs. 

Doesn't solve all our problems...just a step in the right direction. 

[Dave Gray]

I am with you on many things, Badger, but Obamacare hasn't even taken place yet.  It's designed to save money in the long term.  If you want to talk about deficit spending, you have to talk about the military.  That's the big, expendable income that can be cut the easiest.  There's a ton of room to cut, and it's something we wouldn't even miss.

While Obamacare will cost taxpayers, it's money they'd be spending privately anyway, so it's probably close to a wash, overall.  But we don't need to be building jets to occupy every corner of the Earth.  Our military model is unsustainable.