Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktI don’t believe in moral arguments about taxation, except at the fringes.
This is a governmental function, burden, and necessity which we can choose or scrap, and the principles should be transparency and honesty, while raising only the revenue necessary to the functions we choose our government to perform. At the fringes, where I think an element of morality can be injected, we cannot have a tax system that destroys or seriously injures anyone, or that treats similarly situated taxpayers quite differently. No one likes taxes, but we all should be able to live with them, and the power to tax, abused, is the power to destroy.
Were I the God of Tax, I would scrap personal and corporate income taxes for a system that relied on:
1] V.A.T. – competitive rate with Canada
2] automated transfer payment tax – agreed rate by treaty among North America, EU, Japan, Australia and New Zealand, at a fraction of 1% on every single transfer in and out of a reporting institution
3] tariffs and excise taxes subject to change from time to time, as policy trade and commerce tools
4] leasing public land for private use at realistic economically viable rents
5] a carbon tax, but only if set by agreement among our trading partners and ourselves
I would scrap the Gift and Estate Tax.
I would keep the payroll tax and attempt to preserve the [partial] insurance nature of SS/Medicare.
———————————————————————-
The above will not occur in my lifetime. So I would tweak the current system as follows, in the interim.
———————————————————————
Corporate tax: flat rate 30% on net taxable income. I would allow the deduction of dividends in the calculation of net taxable income.
Personal income tax: No itemized personal deductions, but a standard deduction for all roughly equivalent to the minimum wage: say, $15K single, $30K married. Then a flat 30% rate above that. Dividends and interest would be taxed as ordinary income. CG holding period would be extended to 5 years as a prerequisite to get the benefit of 15% rate. Less than five year hold = short term CG, and taxed as ordinary income. No carried interest exception, and hedge fund managers would be treated like real estate investors.
Retain the current Gift and Estate tax scheme with $5M exclusion.
Tweak the payroll tax to produce more revenue for SS/Medicare AND raise the retirement age, but keep early retirement option, at reduced bennies, at 62.
No AMT. No EITC. No CTC.
I have tried here for minimal tweaks that lead to simplification and ease of computation and collection. It seems to me that almost everyone would be paying more tax than we do now under my interim proposal. If that is a function of the arbitrary rate I assigned, and if a lower rate would balance the budget at 7% unemployment and produce surplus below that number, I would be all for the lower rate.
Enjoy!
Filed under: taxes |
All Things in Moderation 
I had this discussion a long time ago and came up with a single formula that can set a progressive tax rate.
I would combine the payroll taxes and the income tax into a single tax based on total gross income including wages, capital gains, and interest/dividends. I would allow capital gains to be inflation adjusted for real household property only, not financial instruments. The effective tax rate would be continuously variable to a pre-determined maximum.
The tax rate would be infinitely variable subject to a maximum with a healthy exemption equal to a low living wage and an offset that give a refundable credit for people making less than the exemption.
The formula is
Tax Rate = Max Rate/[1+e^-(Gross Income-Deduction)/Scale]
Max Rate = Maximum Marginal Tax Rate
Adjusted Gross Income = Taxpayers Gross Income
Exemption = Personal Exemption
Deductible = Standard Deduction
Scale = Speed with which Effective Rate approaches Marginal Rate
Tax = Tax Rate x (Gross Income-Exemption)
All rates are for individuals only and would apply to all people 18 and older whether they had income or not. This creates a rather low minimum income. Dependents would be worth a half exemption each.
The deductible is different from the way it works in the current system in that it affects the effective rate but not the exemption. This means that it has declining value as Gross Income rises.
The Base Rate, Deductible, and Scale can all be adjusted to be revenue neutral from the current system. The Exemption would be adjusted annually for inflation and set to be approximately 150% of the poverty level. After Congress passes all spending bills the Base Rate and Scale would be set by the Federal Reserve to meet the needed government revenue. Congress can deficit spend or fund surpluses by setting up specific trust funds or bond issues.
Below is what I think is a realistic sample scenario.
Base Rate: 40%
Exemption: $20,000
Deduction: $10,000
Scale: $100,000
Gross Income……..Rate………Tax…………Effective Rate
$1,000…………..19.10%……..-$3,629………-362.91%
$10,000………….20.00%……..-$2,000……….-20.00%
$20,000………… 21.00%……$0………………0.00%
$30,000 …………21.99%……$2,199…………..7.33%
$40,000 …………22.98%……$4,596………… 11.49%
$50,000 …………23.95%……$7,184………… 14.37%
$60,000 …………24.90%……$9,959………… 16.60%
$80,000 …………26.73%……$16,037…………20.05%
$100,000…………28.44%……$22,750…………22.75%
$200,000…………34.80%……$62,632…………31.32%
$500,000…………39.70%……$190,581………..38.12%
$1,000,000……….40.00%……$391,980………..39.20%
$10,000,000………40.00%……$3,992,000………39.92%
Feel free to tinker with it. The spreadsheet is available by link if you e-mail me a request.
Edit:Pardon the funky formatting.
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Thanks, YJ.
JNC, this is from my reading of Boortz’s book in 2008 for a discussion group. These were my notes. See the calculations at the end.
The national sales tax called “FairTax” by its proponents has two virtues on its face that I do not challenge.
One is that it would favor savings, a “good thing”; and the other is that its monthly “prebate” would keep it from being regressive with regard to the poor and the lower middle class.
There are other claimed benefits which I will describe, but criticize.
1] claim: The tax merely replaces the “embedded” taxes in everything that we buy.
My criticism: the only embedded federal taxes in what we buy are tariffs, which are not being replaced, and the employer’s share of withholding, at most a 3-4% saving, if labor is one-half of cost. I believe that federal income taxation of business is imposed only after a profit is determined and is therefore not a “cost” for this purpose. It cannot factor into pricing of American made goods and services because whatever the highest price the market will bear is the same price, whether the seller pays income taxes, or not.
2] claim: The 23% internal tax rate proposed is sufficient.
My criticism: First, that is a 30% external tax rate, which is how we think of sales taxes generally, as add-ons. [Boortz, Pp. 151-153].
Second, go look at retail sales in America and compare it with total budgetary needs and the numbers do not work at a 30% add-on. Not close. See at end.
3] claim: There is some benefit derived by taxing the Feds as consumers of retail goods, while businesses do not pay taxes even for retail items. [Boortz, P.55]. The plan seeks to move more services to private business.
My criticism: If there is any administrative cost to the system, and there is; for the collecting entity to pay taxes is a way to bleed administrative fees for no reason at all except to feather the nest of the administrator. Obviously, the Fed will increase its budget deficit by the difference between its taxes paid and its taxes collected. The exemption of businesses from paying tax is an invitation to me to purchase through my law firm; a loophole so big that an Abrams tank can be driven through it.
4] claim: Simplicity.
My criticism: To figure your prebate, after the first year, will require an annual informational income tax return, because the prebate is per family unit, based on family size. Theloophole for “business purchases” will require a complex set of regulations to define every way to close it and a huge team of auditors – or permit the breakdown of the entire system. The Fair Tax is only imposed on new items – thus there will be enormous pressure to devise rental schemes for newly built homes and cars and only sell them as “used” six months later – or the entire homebuilding and auto industries will collapse.
Fair Tax, my conclusions
A Lawyers Civil Relief Act.
A boon to state agencies that are paid to collect the tax.
Creates many more problems than it resolves, even if the theory of embedded taxes can be verified.
Not a populist scheme – but not pro-business either. Homebuilding and auto building are key industries in America – This would be deadly to both.
The numbers
Retail sales from Census Bureau include gasoline, all cars, but not homes: = about $4.4T in 2007.
Subtract “used cars” at $80B.
Add new homes at $250B [Census Bureau, new homes].
Call the total $4.6T.
External Fair Tax rate = 30%.
30% of $4.6T = $1.4T.
Prebates reduce that number, but lets go with $1.4T.
The Prez’s submitted Budget is $2.9T.
No getting from “here” to “there”. Its silly.
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My beef against a value added/sales tax at the federal level is that this is the turf of the states. Furthermore, as markinaustin points out, the real rate has to be much higher than the proposed rate which makes it unlikely that the income tax would ever go away and it would just be an additional tax.
I really like the European method where taxes are internal. The liquor tax where I live is 9% and the food tax is 6%. It makes for a wildly confusing bill. All prices should be net inclusive of taxes like gasoline is.
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mark:
I don’t believe in moral arguments about taxation, except at the fringes.
I guess this is your way of saying “Don’t bother me, Scott.” Oh well. I don’t believe in any argument about any action of the government that pretends there is no moral dimension to it.
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I don’t believe in any argument about any action of the government that pretends there is no moral dimension to it.
Was that intentionally funny, Scott? Am I getting cynical? I think too much of government action pretends to be moral when it is merely expedient within the framework of the long established norms, at best, or party pandering politics, at worst.
I think taxation is a perfect example of a societal bargain roughly concluded by the debates within the society. Claiming moral ground for any tax system at its core sounds like idolatry of the mundane, to me. Not that you and YJ are idolators of the mundane. You are simply visionaries ahead of any system of government ever to be devised by man.
Nevertheless, you should argue that flat tax is “moral”, because you believe it, and because someone here will engage you on that ground either for or against, as YJ did. I wrote the post, but I am not the arbiter of the debate. I won’t be bothered. I may find it interesting, because you are capable of making a point clearly and well. Still, for me, you will have to get out of the mode of writing that it is self-evident, or of “assuming by assumption”.
What kind of tax system would you propose as a model? What moral value would it have? What would be the moral considerations, if any, of a tax that would cause undue hardship on a poor person but not on a rich one? What would be the moral considerations, if any, of treating all transfers alike? Would you, in the pursuit of a flat tax, treat death transfers as income, or perhaps as CG? I want to hear what it means to bring a moral judgment to bear on these problems and why, if that is a relevant consideration for you.
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mark:
Was that intentionally funny, Scott?
No. I’m not that clever.
I think too much of government action pretends to be moral when it is merely expedient within the framework of the long established norms, at best, or party pandering politics, at worst.
I agree. But that does not lead me to conclude, as you seem to, that therefore moral notions are not applicable or relevant. It just means that the people pretending are either confused or are liars. Moral notions are relevant to any act in which force is used to get someone to do something that they wouldn’t voluntarily do. Which means they are relevant to pretty much everything government does.
Still, for me, you will have to get out of the mode of writing that it is self-evident, or of “assuming by assumption”.
I truly don’t know what you mean by this.
What kind of tax system would you propose as a model?
A consumption tax, as I explained earlier. If it must be an income tax, then a flat tax much as jnc describes.
What moral value would it have?
Primarily it would treat all citizens equally. And, particularly with regard to the consumption tax, it bears some degree of a relationship to the benefits accrued from the services provided by the government, at least to the extent that those services are fundamental to a society which provides the goods consumed.
What would be the moral considerations, if any, of a tax that would cause undue hardship on a poor person but not on a rich one?
It is obviously immoral for the government to cause undue hardship on anyone, rich or poor. That’s what makes it “undue”. But I think all citizens, rich or poor, should bear in some equal measure the financial burden for the decisions made by the government on their behalf, and such a burden would not be “undue”. This is a separate issue from whether society should make provisions for those who cannot provide for themselves, what those provisions should be, and how they should be provided.
What would be the moral considerations, if any, of treating all transfers alike?
I don’t see any moral problems with that off the top of my head.
Would you, in the pursuit of a flat tax, treat death transfers as income, or perhaps as CG?
I would not treat it as income.
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From the abstract Mike posted on the 47% thread:
Finally, we found that the association between more-progressive taxation and higher levels of subjective well-being was mediated by citizens’ satisfaction with public goods, such as education and public transportation.
What is the sense of the word “mediated” here? “Affected”? “Caused through the intervention”? “Moderated”?
I have to say that the main thrust of the argument against progressive tax rates for me is the complex gaming that is built around avoiding them.
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Finally, we found that the association between more-progressive taxation and higher levels of subjective well-being was mediated by citizens’ satisfaction with public goods, such as education and public transportation.
I only have to drive across the border to Pennsylvania to realize that I am getting my tax dollar’s worth in roadwork with my state taxes.
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if you’re still going to tax income, any reform has to eliminate automatic withholding.
have a bill sent every month. the feds can get in line like everyone else.
like this, expect in reverse.
http://www.whitehouse.gov/2011-taxreceipt
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“markinaustin, on September 19, 2012 at 2:11 pm said:
From the abstract Mike posted on the 47% thread:
Finally, we found that the association between more-progressive taxation and higher levels of subjective well-being was mediated by citizens’ satisfaction with public goods, such as education and public transportation. “
I continued to be annoyed by the conflation of public goods with entitlements when discussing tax policy. If all that the government was funding were true public goods, then the tax discussion would be much less contentious as the rates needed to fund just those services would be minimal compared to current rates.
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jnc:
If all that the government was funding were true public goods, then the tax discussion would be much less contentious as the rates needed to fund just those services would be minimal compared to current rates.
Absolutely correct. Which is why critiques of a particular tax reform idea on the grounds that it doesn’t raise enough money to fund current expenditures are not strong critiques, and why discussions of tax policy which deliberately eschew the question of what the government should be doing with funds raised are actually avoiding a huge part of the equation. We cannot have a sensible tax policy discussion without also, indeed first, agreeing on what it is the government should be funding. To say that it should fund whatever “we” decide it should is an evasion of the central issue.
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Support for making dividends deductible:
http://dealbook.nytimes.com/2012/09/19/distortion-in-tax-code-makes-debt-more-attractive-to-banks/?nl=business&emc=edit_dlbkpm_20120919
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I’ll restate my (presumably) well known version of the flat tax on income, after enumerating a few principles that I believe should guild tax policy:
1. The purposes of taxes is to fund the government, not to encourage or discourage individual behavior choices through the tax code.
2. Taxes should be collected in the most economically efficient way possible to minimize the drag on the economy. Note that this is not the same thing as collecting the maximum amount of revenue possible for the government (ala Krugman).
3. If you earn income, then you should have positive tax liability under an income tax system.
4. Everyone’s tax liability should rise or fall in tandem with government spending levels. If a war is started or a new entitlement is enacted, everyone pays more, not just select groups.
My version of a flat tax rolls in all payroll and income taxes into a single rate. No deductions or exemptions for anything. All income is taxed the same regardless of source. Thus there is no distinction between long term and short term capital gains, dividends or “earned” income (i.e. wages). Corporations pay the same rate as individuals. No tax exemptions for non-profits (good bye Warren Buffett & George Soros tax dodges). To be precise, I’d apply the same flat rate to line 11 (Total income) on the corporate 1120 and line 22 (total income) on the individual 1040. Everyone pays. No one rides for free.
I’m open to having disbursements to individuals from corporations (i.e. dividends) taxed at the individual level rather at the corporate level, provided that there’s no way to avoid it being taxed at some level, but in general I view double taxation of corporate profits as a price worth paying if there is no other way to avoid arbitrage of the tax code.
I’d also eliminate the death/estate tax in conjunction with eliminating the stepped up basis for asset value on an inheritance. The same tax is paid when the asset is sold regardless of who sells it or whether it is sold before or after death. Conversely, there is no tax event if the asset is passed down without being sold. Thus you don’t have to sell the family farm, or the Pittsburgh Steelers football team to satisfy tax liability when someone dies, only when it’s cashed out.
In short, my approach to the existing tax code is:
“Take off and nuke the entire code from orbit”
http://www.imdb.com/title/tt0090605/quotes?qt0536681
From a political perspective I believe the appeal to conservatives and libertarians is self evident: It’s the flat tax.
By rolling in the payroll taxes and thus effectively removing the cap on income along with treating capital gains the same as earned income, I’d also argue that this proposal addresses two long standing liberal/progressive critiques of the current code. If you accept that the employer portion of the payroll tax is effectively paid by the employee, then I’d argue that the real, effective rates on lower income people are actually already close to what they would pay under this proposal. It also nicely addresses the 53% vs 47% meme and makes who is paying what much more transparent.
I’d argue that there are numerous other ancillary benefits for cleaning out the tax code, but perhaps a key one is to make business decisions that are marginally viable based on tax considerations no longer feasible. For example, if progressives and liberals have an issue with the way that Bain Capital has conducted leveraged buyouts consider this:
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YJ, I don’t understand why the Federal Reserve has any input in your system. It would be the Treasury Department who would do such a tweak, but the Congress would actually have to approve it by statute.
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JNC, are you bothered that a tax rate imposed on poor people might be confiscatory or destructive? Obviously, at some level, taxes can be destructive for anyone, but don’t you see some advantage to exempting the minimum wage earners?
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I’m not sure I have the language or mathematical skill to address all of your ideas so I’ll just say a few things. I agree with yello that sales/use (consumption) taxes should remain at the state level. In my opinion business owners already have enough burden collecting and paying these taxes in addition to payroll taxes and adding another level of collection and filing (another business expense) seems unreasonable to me. Some states don’t have sales tax so you would be adding an entirely new burden in those states. We’re used to paying payroll taxes so keep those in place and everyone pays a flat yearly amount or percentage of income (whichever works best) into the insurance fund of SS, M & M and a percentage based on income for other government funding. If we go to war everyone’s taxes go up, but simplify the tax code by getting rid of exemptions and deductions, all of them (I think). Keep the tax progressive but lower the rates and include all income including CG, dividends, interest, estate……………….all of it. Tax corporations as a separate entity at a low, internationally competitive rate for the privilege of incorporating, enjoying those benefits and becoming a person (hahahaha). I’m not quite sure I understand a VAT so maybe someone wants to explain to me if that could or should be incorporated into “my very simple tax system”. I know several economists I respect support it, one of them at least, in addition to a progressive income tax.
I agree with Mark that you can’t expect a family of four making minimum wage to pay much more than their insurance fund payments (SS, M & M) plus 1 or 2 percent and a family of four just over the minimum wage threshold cannot be expected to suddenly pay the same percentage as someone who makes considerably more. Most of the money is earned and held by the wealthiest so I don’t see why a progressive system isn’t equitable even though the burden is disproportionately shouldered by the wealthiest. Simply put, that’s where the money is. I agree, everyone who plays needs to be in the ball game but not punishingly so.
I’m sure there are at least a million reasons and consequences for why my ideas won’t work but if we want simple………………….that’s it. I don’t think a flat tax will work because in order to find the right percentage to fund the government, and it’s services, you will end up over-burdening the people who make the least amount of money. I believe in SS, M & M but agree we need to figure out a way to control costs (health care) and adjust benefits and even the tax burden to sustain them. I continue to think a basic care system just like Medicare for all that everyone buys into via the tax code will benefit us all. Parents will pay extra based on the number of children but get a tax break for a portion of that at the end of the year (the only exemption that I see as valid). Use the insurance industry for secondary coverage. There will always be people who can’t afford the costs of the insurance and or health care, or are unable to work and pay their own way, but that’s a fact of life and I don’t think as a society we can abandon them, hence, some shared financial burden on the rest of us.
I realize I have absolutely no numbers in here so consider it a fill in the blank framework.
Thanks for all the ideas everyone. Scott says we can’t vote because we’ll never all agree but perhaps we can find a majority?
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lms:
Scott says we can’t vote…
Nope. I said we’ll never settle on a tax reform plan because we do not agree on what the government should be spending money on.
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Scott
I said we’ll never settle on a tax reform plan because we do not agree on what the government should be spending money on
Still, majority rules right?
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“markinaustin, on September 19, 2012 at 4:01 pm said:
JNC, are you bothered that a tax rate imposed on poor people might be confiscatory or destructive? Obviously, at some level, taxes can be destructive for anyone, but don’t you see some advantage to exempting the minimum wage earners?”
No more so than the idea that the bills they pay for housing, electricity or gasoline are “confiscatory or destructive”. No reason to exempt them from paying at least some of the cost of the government, especially since many government spending programs are designed to benefit lower income people. The two primary things that are charged based “ability to pay” seem to be government and higher education. Everything else is priced the same whether you are wealthy or poor.
Keep in mind also that low income doesn’t necessarily equal low asset or impoverished. A simple example would be minor children living with their parents.
I’d also argue that under my approach of rolling in the payroll taxes, including the employer portion, there would be less of an increase in the burden on the lower income people than you may expect.
This was an interesting contrast on Wonkblog today between the European approach of regressive taxation and progressive spending vs U.S. and the U.K.’s approach of progressive taxation.
“Other countries don’t have a “47%”
Posted by Dylan Matthews on September 19, 2012 at 12:43 pm”
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/19/other-countries-dont-have-a-47/
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Getting back to Romney’s vision of a nation of takers this guy reminds us what was accomplished with welfare reform and that it’s the cost of health care that’s killing us.
Changing that system was not just a matter of imposing work requirements, but of smoothing the path into the workforce and toward self-sufficiency. Medicaid eligibility was delinked from welfare and linked instead to income, starting at 100 percent of the poverty level and reaching 185 percent in the Affordable Care Act. Together with the State Childrens’ Health Insurance Program, expansions of the Earned Income Tax Credit, the Child Tax Credit, the Refundable Additional Child Tax Credit, the Child and Dependent Care Credit, the Make Work Pay Credit, expansion of child care, the after-school and summer food programs, and others, we have created a safety net that extends well into the low-income working population. These individuals, too, are both takers and givers – they are working hard, contributing to the economy, and while some of them may not pay federal income taxes at the moment, they will as they move up.
This dramatic reorientation of the safety net didn’t just happen; most of these initiatives had significant bipartisan and cross-ideological support. Not only do they provide a ladder out of poverty and reward work, they also make possible the relatively low-wage, low-security labor market that gives employers enormous flexibility. Conservatives used to argue, for example, that raising the EITC was a better alternative to raising the minimum wage, and they mostly won that fight. The result is that low-wage employment is essentially subsidized, and businesses are able to hire at very low cost and low commitment, with none of the barriers to either hiring or firing that are common in Europe. Paul Ryan, Mitt Romney and others in the current wave of conservatism seem to have entirely forgotten the merits of these innovations, and in their promise to protect programs only for the very, very poor, they threaten to restore the hopeless poverty traps of the 1970s and 1980s.
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There appear to be coattails to the Romney mess. The Senate map has recently changed in favor of the Democrats.
Have a good day everyone, see you manana.
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Saw this over at National Review this morning. Nice to see some kindred spirits.
“Democratic pollster Peter Hart and Republican pollster Bill McInturff conducted the NBC News/Wall Street Journal survey and isolated the respondents whom they classified as “up for grabs” — either undecided or leaning only slightly to one of the candidates. Several demographic indicators suggest that the remaining voters are ripe for the picking for Romney: 68 percent are white, 57 percent are married, 53 percent are men, 70 percent think the country is headed in the wrong direction, and 60 percent disapprove of how Obama is doing his job.
I put bold around my favorite part.
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“lmsinca, on September 20, 2012 at 6:13 am said:
Getting back to Romney’s vision of a nation of takers this guy reminds us what was accomplished with welfare reform and that it’s the cost of health care that’s killing us.”
Hence the apparent need to add another health care entitlement to the existing batch.
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Andrew Sullivan has a graph showing that when total tax burden is evaluated our system is just ever so slightly progressive.
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should pay roll taxes count? if they’re sold as insurance premiums and we can’t cut benefits because of some sort of scared bond. then they’re not taxes and should not count.
or, if they’re taxes and there’s no link to benefits, it’s just a simple transfer that can be changed at any time. you can’t say “taxes” when it’s time to pay and “i paid in, I’m due” on the other.
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Banned & I had a long running debate over this and he successfully convinced me that Social Security was welfare, not insurance, based on the actual statutes and court cases.
It’s definitely not a “sacred bond”.
See also the cuts in the FICA taxes as a stimulative measure by President Obama without corresponding cuts in benefits.
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Banned & I had a long running debate over this and he successfully convinced me that Social Security was welfare, not insurance, based on the actual statutes and court cases.
Yes. It’s a tax/entitlement. Money is fungible and there is no right to your FICA contributions other than what Congress mandates.
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I think the tax reform argument is independent from the spending argument.
If we spend less we can reduce the arithmetical rates on any tax structure we choose. If we spend more we can increase them.
Once we assume that substantial revenue is needed for anything at all we must have a taxation system.
For example, JNC, NoVA, George and Scott think education and health are not public goods, and I think they are. So does YJ, but he thinks that public good necessitates federal involvement and I do not, wrt education. We make the same arguments to each other to no avail. But that has nothing to do with the system of taxation we use. It only has to do with the quantity of revenue required.
I can accept JNC’s plan as better than what we have, as I have stated. I don’t agree with NoVA and presumably JNC that the taxing authority has to get in line with other trade creditors, or that it should have to. It steps to the front under all legal systems of which I am aware. That is an incident of sovereignty. The taxing authority singularly has the power to destroy, and it should be [my moral argument at the fringe] limited to non-destructive taxation [with which I know Scott agrees]. It is with that in mind that I would exempt the minimum wage level people and use that large standard deduction in lieu of all or any itemized personal deductions.
Rs gave us the EITC and RWR favored it. I have to say I never liked it. The only benefits to tax expenditures are that they are administratively cheaper than paying traditional welfare to people who are working, and they reduce political pressure to raise the minimum wage. These benefits do not, for me, justify the cost, and I would rather divorce that from the taxation system and have the other fights.
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“markinaustin, on September 20, 2012 at 8:35 am said:
“For example, JNC, NoVA, George and Scott think education and health are not public goods, and I think they are. “”
If some people qualify for the subsidies and others don’t it’s not a public good. It’s a benefit for some people being paid for by other people. Note that you can make an argument that single payer health insurance, provided that everyone, not just some people, are taxed to pay for it is more of a public good than the PPACA. The same thing applies to public schools, but not the various subsidies for college.
“I can accept JNC’s plan as better than what we have, as I have stated. I don’t agree with NoVA and presumably JNC that the taxing authority has to get in line with other trade creditors, or that it should have to.”
I haven’t made an argument about getting rid of withholding. Throughout history, the sovereign has typically had higher priority than other interests. I do think that the tax payer “receipt” is a good idea and I’d attach it to the annual Social Security statement that everyone receives in August.
http://www.thirdway.org/publications/335
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I prefer the bill to receipt simply because it forces the taxpayer to write a monthly check. Let’s see how popular these things are if they’re not auto funded and it’s a line item in a household budget. car payment, rent, social security, day care,
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