President Bush is insisting on more tax cuts in a time of war (and as we’re months away from hitting the debt limit). So expect to hear another round about how taxes are bad for the economy. And all things equal, I guess higher taxes are worse for the economy. But there are some things that are even worse for the economy than corporate taxes:
* Having a bridge fall into the Mississippi river, crippling traffic, and oh yeah, killing a dozen or so people.
* A massive structural debt owed in large part to foreign governments who are threatening to shut off the pipes.
* That power outage that hit the Eastern seaboard a few years ago.
* Sick employees.
* Their sick children.
* New Orleans drowning.
And this idea that tax cuts are the only good things for business is so silly. As if the best thing business could possibly hope for is a crumbling infrastructure, massive government debt, and exorbitant healthcare costs.
Now we can certainly talk about the bad, wasteful spending that goes on: The Iraq war, and our militarism in general. Sending non-violent criminals to prison for too long, and drug offenders there at all. The bridge to nowhere, and other pork.
But at the end of the day, our taxes are so low that bridges are collapsing. Our taxes are so low, that we refuse to help the sick unless they are elderly, very very poor, or children of the poor and working class (or in Washington State thanks to the Democratic legislature last session, children). Our taxes are so low, that an American city drown a few years ago, and we’ll only build the levies back to where they were before. Our taxes are so low that soldiers — American Soldiers, for God’s sake — are scavenging garbage dumps for armor for their vehicles. Our taxes are so low that public transit is pathetic in the Puget Sound region, and worse in the rest of the state.
Now, I don’t particularly like paying taxes, nobody does. But I also don’t like hitting potholes. I don’t like knowing that if the big one hits when I’m on the viaduct that I’ll probably die. I don’t like it when my sick friends and relatives without healthcare don’t see a doctor. I don’t like being in debt to China. I don’t like the fact that the bus system is a joke, especially outside of the city.
We’ve paid $2.4 billion in taxes to Sound Transit during the past ten years. How is your life better for that?
Only a miniscule percentage of the people living here use those services on a regular basis. We do not live in a healthier ecosystem because of what ST does, or what it possibly could do.
It isn’t that we need to pay more taxes, it is that our local government needs to prioritize what taxes get spent on much better than they have been doing. Moreover, our local government leaders need to do a far better job of delivering infrastructure and services efficiently and in a timely manner.
Have you noticed – the local government heads are copying moves verbatim from Bush & Co. They want to pile massive debt on us, our children, and our grandchildren. Vote no in November. Insist on good transit and road maintenance spending plans in advance of tax requests. And insist that the financing model be more along the lines of “pay as you go” as opposed to “sell piles of bonds, decide how to spend the cash later, and make our kids pay it off.” Some bonds, OK. But not on the scale that the proponents of RTID want. Even the light rail part of it would be far to heavily leveraged.
You DO understand it isn’t just taxing that makes up the means by which governments pay for stuff, right Carl?
1 XY
Bonds ensure steady long-term financing for large projects in a way that the variable revenue streams from direct taxation cannot. Just as you would (presumably) not halt work repairing the foundations of your house because little Molly gets sick, we must steadily and reliably invest on our infrastructure while taking care of transitory costs out of short-term revenue.
If Sound Transit work were posteponed due to funding variability and costs went up as a result you’d be screaming about that.
One thing is for sure, and that is that spending $10 billion a month in Iraq is a drain on our Treasury and a waste of tax dollars we should refuse to afford.
@ 1
We’ve paid $2.4 billion in taxes to Sound Transit during the past ten years. How is your life better for that?
Well, I can remember when the ST 522 replaced the Metro 307 and cut my commute by about half. When I lived down south, if I wanted to come up to Seattle, ST was a lifeline. And that’s just replacing buses with buses.
You DO understand it isn’t just taxing that makes up the means by which governments pay for stuff, right Carl?
Also magic? And user fees, I guess, that normal people would consider taxes.
The issue isn’t just the level of taxation or what our taxes get spent on. There also are problems with the allocation of the tax burden. Our tax code is designed to reward ownership and punish work. Wage earners are by far the most tax-disadvantaged group in American society. They don’t get a $2.5 million personal exemption like heirs do. They don’t get to deduct the rice burners they commute to work in, even though their bosses can write of personal jets and yachts as “business” expenses. They don’t get to pay capital gains tax rates on their earnings like hedge fund managers making billions of dollars a year. Congress has sent a clear message to the American people: Work will be punished! Therefore, I do no work. I get paid more for not working than I ever got paid when I was working. Fuck work! I’m a capitalist now.
What to tax is as important as how much to tax. Charitable trusts are a case in point.
Let’s go to a flat-rate icome tax or a national sales tax instead of this cumbersome income tax scheme. Get rid of all those “automobile expense” deductions for business owners and the earned income tax credit, too.
Also, let’s stop getting involved in these Middle Eastern foreign adventures.
@1 “Only a miniscule percentage of the people living here use those services on a regular basis.”
Bullshit! A flat-out lie.
Sound Transit says their 2nd quarter 2007 ridership was 3.5 million. http://tinyurl.com/2w79fl
Even if you assume 100% of their riders are commuters (not a safe assumption) that’s 58,000+ individuals riding ST every workday, which is over 5% of all Puget Sound region commuters (based on 1,131,000 commuters, http://tinyurl.com/3bomh9).
Only a liar would call 5% of all commutes “a miniscule percentage.” And that’s PRESENT ridership, not what it will be when the system is finished!
So how would you “prioritize” our transportation dollars “better”? Build more floating bridges costing $550,000 per lineal foot? Build another freeway east of Bellevue? Like people living in Ballard would use it for commuting to Harbor Island, yeah right.
You are a dolt.
The $2.4 billion dollars spent on ST over the last 10 years would buy half of a 6-lane floating bridge. Which carries more people, ST or 3 lanes across Lake Washington?
@10 Apparently the new wingnut argument against investing in transportation is that our transportation planners squander money like George W. Bush. I’m not sure this is a Rush Limbaugh-approved talking point.
@7 Yeah, I like the flat-rate tax idea, too. Everyone pays the same rate and gets the same deductions. No more $2.5 million exemptions for heirs or “business” write-offs for guys commuting by plane or helicopter.
A friend of a friend of mine just died because he was diabetic and making “too much” to qualify for assistance, but not enough to afford health insurance or insulin test strips.
So he died.
He was 25 years old, with his diabetic onset at age 18. We are not the greatest country in the world when shit like that happens regularly.
@12 We aren’t even the 30th-best country when it comes to providing health care to our citizens. We’re in the middle of the pack of the Third World countries. Another fucking failure of the free enterprise system.
When it comes to taxes, we have 3 options:
1) Spend less;
2) Borrow more; or
3) Reallocate the tax burden.
Republicans prefer option (3). They want to reallocate the tax burden so that only wages are taxed and heirs, investors, and owners pay nothing. That way, they get all their military spending and corporate subsidies at other people’s expense. They certainly don’t want to spend less on wars, military hardware, or corproate welfare. They only want to spend less on things that help people. They’d rather use taxes to kill people and put our money in their own pockets. They seem to like borrowing a lot, but only if they don’t have to pay back what they borrow. That’s why they changed the bankruptcy laws so companies don’t have to honor their pension obligations or union contracts. They also changed the bankruptcy laws so people who go broke because of high medical bills or the predatory lending practices of credit companies can’t get any legal relief. This is only the beginning because they’d like to amend the Constitution so they can bring back debtor’s prisons, to provide another source of cheap labor for CHEAP LABOR CONSERVATIVES to tap into.
Republicans = freeloaders and slave drivers
America needs the Republican Party. We need someplace to put all the stinking carcasses of morally-dead human beings because we sure as hell don’t want them in the Democratic Party. The GOP is a kind of mental institution for people who pose a threat to public health, welfare, and safety. We’re on the right track by ptting them all in the Republican Party, now all we have to do is build a fence around the Republican Party to protect ourselves from them.
We do not pay taxes NOW
There is a fallacy in the usual debate about taxes. The fallacy is simple, you can not pay taxes if you do not own whatever is being taxed. We tax “notes” we all use belong to the government, are created by the Fed Reserve, and have no physical value. The number of these we get to keep is determined by a government program.
Am I just being facetious? No. If I work for the govmint, they give me some money and then take some back. It wuld be easier just t decide what I was to keep. Even great investor
Warren BuffetRoger Rabbit gets a certain allowance of “dollars” based on a sloppy. Rube Goldbergish program that is as much a part of the govmint as the govmint’s ability to make war.Here is another way of looking at “taxes.” Take the govmint out of money. Close the Fed, stop supporting all govmint services, err ahhh what would your “money” be worth? Zilch.
So, unless you convert all but your walking around mioney into gold, ALL them numbers are part of a govmint program. You get t “keep” whatever the Goldberg machine allocates to you after it has put some here, some there, some elsewhere … alll a fiction created by the Fed.
The real issue for anyone ought not to be “how much taxes” but “how well off am I.”
@5:
I’m willing to cede that overall tax revenue (nationally) has gone up since the tax cuts but I agree with Roger that the investor class has been overwhelmingly rewarded at the expense of the middle class. This is a trend that started with Reagan, really didn’t slow down through the Clinton years, and has again accelerated with the Bushies.
This is a formula for disaster. Do we really want to end up like much of Central America with a tiny class of the super rich and everyone else living in dirt floored hovels? Or better yet, the same sort of worker upheaval that occurred with the early communists early in the previous century? That is where we’re headed.
On the expenditure side, we must get control of our spending. Entitlement programs have to be reined in (heresy, I know). Priorities have to be set, and stuck to.
It’s time to implement something like the UK’s VAT. It’s time to get our fiscal house in order. Otherwise, prepare to mourn more deaths as our infrastructure crumbles.
-OneMan’s opinion
National Sales Tax – Revenue neutral at 23 PERCENT, i.e. regressive!
Flat Tax – Revenue Neutral at 17 PERCENT, i.e. regressive!
Sorry progressive income taxation is the fairest system. Everyone contributes to the pot in proportion to their ability to do so. Just index the brackets for inflation and eliminate unfair breaks. Set the brackets so that each income bracket pays for their fair share of government services and entitlements.
@12
That’s terrible. I’m sorry to hear that. By believing that health care will be most efficient by trusting free market forces, we’ve ended up with a system that doesn’t really value those who develop illnesses that can be sustained for many years. There’s no way profit motives will ever address that in a way that you or I would recognize as being “moral”.
Morality doesn’t play the role we expect it to in free market forces. We’re often told that our own morality will “fix” the markets in these situations, but the reality is that the people whose morals compel them to do the right thing will eventually lose out to the person who will throw their grandmother under a bus for a dollar – unless society recognizes that the only counterbalance is smart government.
Tax wealth not work. A graduated rate starting at $250,000 in assets. It would not be very high. We would be taxing trust funds, and everything. No deductions, no exemptions. Zero. We could even lower taxes on the poor, and shift the burden to the people that have their assets making their money for them, so they don’t have to work.
I have nothing against the rich. In fact I make a lot of money, and would have to pay a tax like this. Since I have wealth, I can make $100,00 a year in interest on my investments without lifting a finger, and this income is taxed at a lower rate than the wages of someone making $50,000 working their asses off to support their families.
The more money you have, the easier it is to compound your wealth. You should have to pay more. I know everyone wants to pay less, but I don’t want the bridges I drive over falling into the Columbia, or the Sound.
How about some wasteful government spending for you?
So much for the fiscal responsiblity that the GOP preaches.
Call bullshit on them Carl.
20 – Good in principle but hard in practice. It’s easy to hide assets.
Still you can tax work a lot less than passive income.
I want to work hard in order to pay higher tax rates on passive income. Like RR says, the current system tells me don’t bother to work – it’s not worth it.
@20 Three stars ….
I also wonder why a wealth tax is not more commonly discussed? We already have the “property” tax, why would this be worse.
The usual anti income tax argument is that taxing income discourages the acquisition of income producing capital. A wealth tax changes that by maximizing rewards on earned income while taxing d0llars that have been r3emoved form cash flow.
At the extreme, much wealth now is simply not taxable … e.g. collectibles, foreign investments. Money ut there is only taxed when it generates income, in effect this means investor4s are encouraged to put their capital where it does NOT contribute to US productivity.
Wealth is also a rational reflection of the services one receives from society.
Finally, a wealth tax might rationalize the stock market and the real estate market by encouraging investments that earn money over tose that create evanescent capital.
I am all for it!
YLB @ 18 –
You’re confusing “fair” with “favorable.” The rich shouldn’t get favorable tax treatment and neither should the poor. “Fair” means everyone pays the same rate on income. “Favorable” means eveyone doesn’t pay the same rate on their income.
Heck, even Roger is starting to agree with a flat rate tax! Progress is being made!!
@24
But a flat tax is not necessarily a fair tax in all cases. A person who makes $30,000 a year values 15% of their income much more than a person who makes $300,000 a year because the former is much more likely to need that money for basic necessities.
That said, a flat tax _could_ be a fair tax if basic necessities are more guaranteed in our society.
24 – Nope. Regressive is not fair. 17 percent of a working poor family’s income is not fair. That high of a rate for that family means they sometimes go hungry or don’t make the rent or don’t visit the doctor.
17 percent for a rich man IS A TAX CUT for him. That’s what the flat tax proposals are really all about.
A rich man paying that rate is saying he doesn’t want to pay for the fancy military that conservatives say we need, he doesn’t want to pay for veteran’s health care, he doesn’t want to pay for the court system that allows him to settle his differences with other rich people, he doesn’t want to pay for the infrastructure that allows the companies whose stocks he owns flourish.
A rich man paying a low flat tax rate is saying he has no interest in sustaining the system that made him wealthy in the first place.
He’s saying he has got his and everyone else can go to hell. He’s pulling up the draw bridge over the moat around his castle.
Steve Forbes LOVES the flat tax.
What? No mention of the wasteful, ridiculous, and irresponsible spending of the good ‘ole Washington State Dept. of Transportation?
How are we discussing flat tax? A flat tax is neither simple nor fair. I have three quick points to make.
1. MOST of the complexity in our tax system arises not out of tax rates, which are simple enough that simple calculation can be done (you know, look up the tax table entry). The compelxity is in figuring out what qualifies as income, and then what qualifies as taxable income. There may be proposals that address this, but the question is wholly separate from so-called “flat” taxation and could just as easily be addressed in a progressive system.
2. Whether a 17% tax could possibly be revenue-neutral is arguable and depends so much on the details of the plan that it is a ridiculous assumption. What deductions are eliminated? Wht so-called “loopholes ” are closed? Here’s a question: what does the “plan” look like when it gets through Congress?
3. And let’s face it, eliminating deductions, exemptions, credits, shelters, and loopholes is raising taxes on someone.
How conveniently that BDS kicked in for you to blame Bush and his engergized glowing economy and yet every single instance you and your sheep whined about are LOCAL and STATE responsibilities.
Why are there plenty of taxes to fund pet walkways (Seattle), team sport playgrounds (every major city) and parades celebrating perverted sexuality (hello New Orleans) yet no one notices they FAIL, FAIL, FAIL, at basic services until they do fail.
You want perv parades and pet crosswalk, dude, you got em! But know you got them at the expense of basic services none of us should be without.
In my view, flat taxers just want to eliminate the capital gains tax.
“…wasteful, ridiculous, and irresponsible spending of the good ‘ole Washington State Dept. of Transportation? “
Hmmm…wow. Wasteful, ridiculous, and irresponsible spending there? If only there were some way we could check up on them! Oh, that’s right:
http://www.wsdot.wa.gov/accountability/
@31
Why are there plenty of taxes to fund pet walkways (Seattle), team sport playgrounds (every major city) and parades celebrating perverted sexuality (hello New Orleans) yet no one notices they FAIL, FAIL, FAIL, at basic services until they do fail.
Why? Because when people start believing in ridiculous nonsense like “the free market fixes everything” and thinks that the government is inherently inefficient, you only end up with the things that people WANT, rather than the things that people NEED.
Flat taxers are simply deluded ‘useful idiots’ for the rich. Why do the rich overwhelmingly support a ‘flat’ tax?
Simple: As somebody stated earlier, it will REDUCE their taxes.
Given the truth of post 35, then if the flat tax is to be revenue ‘neutral’ the revenue burden has to be shifted somewhere (rich are paying less–remember?).
Now I wonder where that is?
Flat taxers: Liars or simpletons.
re 7: Would capital gains be taxed at the same rate as income in your plan?
re 23: For U.S. taxpsyers, profits on foreign investments are taxable — if the government can find them.
I think most people today either forget, or have never learned, that our founding fathers were wary of individuals acquiring great wealth without earning it.
This is why the Estate Tax makes so much sense because it prevents an aristocracy from developing which is determental to democracy itself. Look at Geroge W. Bush for example.
Ben Franklin was one of our country’s first leaders to argue for the fairness of the progressive tax system.
Here’s the long and the short of it; if Steve Forbes wants a flat tax you know it will benefit people in his economic stratosphere the most. Do you honestly believe people like him give a rat’s ass about middle class America? Grow up.
Do the math sometime and you’ll figure out a flat tax system shifts more of the tax burden to the middle and lower middle working class. Too few people control too much wealth in order for them to continue paying their fair share of America’s revenue requirements. The short fall would be made up on the backs of the LARGER, yet less wealthy classes of Americans.
Good luck with that fuzzy math, boys.
GBS
I support tax “reforms” that would potentially raise my taxes (as part of the top 5% or so, as I recently calculated). Not that this is here nor there, and I think it is fair to assume that a lot of rich people would prefer lower taxes, but I don’t think this leads us logically to the conclusion that Steve Forbes doesn’t believe his own bullshit. I think we can imagine it, but you’re just not creating a logical certainty,
@39
Ben Franklin was one of our country’s first leaders to argue for the fairness of the progressive tax system.
Thomas Paine’s essay Rights of Man actually lays out, with figures and tables, how to do progressive taxation in order to provide for the welfare of citizens. It’s a simplification to just say that our founding fathers were against taxes. They were against having to pay taxes to a government that WASN’T ELECTED BY THEM.
Progressive taxes are not “fair” to the poor: they’re “favorable” to the poor. My fine Neo-Socialist friends, you don’t understand the difference between the word “favorable” and the word “fair.” So, stop calling progressive taxation “fair” and start calling it “favorable.”
I want a flat rate system because:
1. It’s fair to everyone (not favorable to everyone).
2. It helps prevent professional politicians from using the tax code to reward friends and punish enemies.
3. It kills the cash cow that CPAs, lawyers and the tax preparation industry have used to make good livings by filling-out government forms. (What a waste of talent!)
@42
Progressive taxes are not “fair” to the poor: they’re “favorable” to the poor. My fine Neo-Socialist friends, you don’t understand the difference between the word “favorable” and the word “fair.” So, stop calling progressive taxation “fair” and start calling it “favorable.”
Not necessarily. It’s very difficult to measure what’s fair or favorable in that sense, but we do know that simply paying the exact same rate is NOT fair by anyone’s definition.
Let me try to explain why. To someone like Bill Gates, $1000 has much less value to him that it has to me. To someone whose life depends on $1000, it has way more value to them than it has to me. The value of a particular sum of money is not the same to every person.
Now when we’re talking about percentages of income, we get closer to having equitable values for each individual, but not quite. Let’s take the CEO of a corporation who makes $1.5 million per year and compare him to a person making $25,000 a year. Taxing each person at 20%, the CEO would pay $300,000 per year in taxes while the person making $25,000 a year would be paying $5,000. If the latter person needs that $5,000 for basic things in life (health care, family needs, housing, etc), then that $5,000 is MORE valuable than the $300,000 is to the CEO, who doesn’t need that money for basic things in life.
I want a flat rate system because:
1. It’s fair to everyone (not favorable to everyone).
But often it’s not. The incomes that people make are not on a straight scale in relation to the things we need. As I explained above, when people make far beyond what a person needs to survive, the value that they place on money diminishes a greater rate. That’s why progressive taxation was created. Thomas Paine (who I believe was as much of a “real” libertarian as our other founding fathers) believed very strongly that welfare for the poor was a human right and he recognized the necessity of progressive taxation.
2. It helps prevent professional politicians from using the tax code to reward friends and punish enemies.
How does a flat-tax alone prevent government from developing specific corporate tax breaks for their friends? There are certainly things that we can and should do to remove all the tax loopholes that exist, but implementing a flat-tax doesn’t get us any closer to that point.
3. It kills the cash cow that CPAs, lawyers and the tax preparation industry have used to make good livings by filling-out government forms. (What a waste of talent!)
I agree, but a flat-tax is not the solution to this. It’s completely tangential. Taxes can be simplified without getting rid of progressive taxation.
I like this one:
“It [a flat tax] helps prevent professional politicians from using the tax code to reward friends and punish enemies.
Yeah, they’ll just stop doing that, right?
This is what I think is misguided and or plain deceitful about our latter-day “flat tax” proselytizrs. They refuse to think about
(a) What happens to their proposal in the real Congress of the United States to even get to passage.
(b) What happens after that.
The auto is the chosen form of transit. Build out the freeways for safety and if someone wants higher business density let him pay for the horizontal elevators to bring people in. In the computer internet day, a high hise high rent office building is foolish, and money wasted to prop up those dinosaurs is wasted.
Daddy Love @ 40:
I’ll be the first to admit I didn’t spell out the logical certainty of Steve Forbes position of favoring the flat tax system, I’m just using him as metaphor because he’s so for the flat rate tax system and he’s an ultra conservative.
However, I did try to briefly address why the flat rate tax system will redistribute the tax burden to middle and lower income America.
In a nutshell this is how it breaks down:
These are 2001 figures and the scenario has only gotten better for the wealthy.
In the US, the top 1% owns 33.4% of the private wealth, the next 19% owns 51% of the wealth for a total of 84% of the private wealth being held by 20% of Americans. That only leaves 16% of the country’s wealth to be distributed to “bottom” 80% of Americans.
The federal government’s 2006 budget was $2.6 trillion dollars. Nearly $1 Trillion of the receipts to the federal government were projected to come from income tax. If you believe that the bottom 80% coughs up $800 billion dollars in receipts you’re only fooling yourself. The bottom 80% contributes no where near that amount.
In a flat tax scenario the top 1% are not going to pay 34% of the tax burden although they control that much wealth. Nor is the top 20% going to pay 80% of the tax burden.
So what happens?
A higher overall flat tax rate sucking more dollars out of your pocket and my pocket so Paris Hilton can get another Jet Ranger helicopter and Britney Spears can go do rehab in Santa Monica, again.
No thanks.
@42 fair? Two proposals .. a Fairness Tax and the Free Lunch No Tax
How is it fair for Bill Gates and I to pay the same flat rate (of course Bill pays a lot lower rate than I do) when he receives so much more in services?
I have a better idea … a fairness tax. How would you feel about a fairness tax based on wealth. The more you got, the more you benefit form living in the US so you pay more taxes.
As for a flat tax, I have yet to hear how this is even possible, If the flat tax is 17%, it would devastate people near the poverty line. OK, so we fix this by having a cut off … but that is already progressive. Also, if we did have flat tax, how would you define income? That issue is a mess now. All that would happen is that rich folk would be paid in nontaxable ways .. services, capital gains, etc.
Here is a better idea. Since our money supply is a fiction created by the Fed Res, how about instead of distributing new dollars to banks for their use in investment, we just give it too poor people. Of course these folks would immediately spend it. We all know that a dollar spent 7 times is worth more than one stuck in a stock some place.
I call this idea “trickle up economics.” The cool t9ng abut TUE is that it gives the govmint a way to make $$ with no taxes at all! I call this a Free Lunch Tax.
OK so how much is this massive universal healthcare plan you are touting going to cost the government?
As of 8/18/07 there are 302,632,880 (and climbing 1 person every 10 seconds)
So lets assume it’s “Free” because that’s what everyone assumes they will get healthcare for under your plan,
and I will assume Good healthcare costs about $1,000 a month now.
I have to see you all cut this yearly check
$3,631,594,560,000
As I read through the arguments and counter arguments regarding the “flat rate” tax system, one thing stood out.
Nobody has actually defined how that system would work.
The arguments for it are impressive, and make a lot of sense, but in any taxing system, the devils are in the details, and there are precious few details here.
The arguments against it also make sense, given the assumptions that the opponents are making, but in any of the “flat tax” proposals I’ve read, some of those assumptions are invalid.
Most of the “flat tax” systems I’ve seen seriously proposed are not really flat, but have a base income that is not taxed, then a simple percentage above that amount, with no deductions whatsoever.
This deals with the issue of the poorest among us having to choose between paying taxes and eating. How well it deals with that issue is open for debate.
As to the complaint that the wealthiest will actually pay less under a flat tax system, it can be shown that the wealthiest currently pay less (as a percentage) because of the many tax avoidance methods in the current tax system.
Anyone care to bet with me that Paul Allen paid more than 17% of his total income in taxes last year? (I’m taking the side that he paid far less.)
(Total income defined as increase in net worth, plus amounts spent or donated by him or under his immediate direction.) I haven’t checked, but I’ll put up $100 to your favorite charity. (and I pay my gambling debts.)
Of course, therein lies one of the problems with the flat tax. Nobody really want it flat. We all have justification for our favorite deductions. Many of those justifications are perfectly valid.
Charitable donations? I’m not getting any personal benefit from the money, and it’s going to address a problem that otherwise might require tax dollars. Shouldn’t my donation to the local food bank be tax deductible?
Retirement accounts? Most of that money will be taxed eventually, but right now it’s a deduction.
How about benefits? If I make $50K a year, but my companies provide me with housing, cars, planes, travel, etc…, my standard of living is far higher than the folks trying to actually live on that same amount.
Side note. If we tax benefits, which ones do we tax? Housing? Transportation? How about medical and dental coverage? Again, if I make that same $50K, but have great medical and dental plans, my effective income is far greater than the person that has to pay for those things out of pocket.
(For those that haven’t priced them, even a very limited – $1,500 deductible health plan runs about $250 per month for a non-smoking 25YO. Get up over 50 with a family, and it gets really pricey.)
How about investment tax breaks? There’s an outfit in Grey’s Harbor that is churning out bio-diesel. We want private investors to do things like that, so we give them a tax break to encourage them.
How about my favorite tax break, the interest deduction on home loans? The lender will be paying taxes (theoretically) on that money as income. Why shouldn’t the borrower be able to deduct it? (I’ll spare everyone the official National Association of REALTORS(R) speech about the benefits to society of personal home ownership. You can thank me later.)
So, we all agree that the tax system is broken, but the specifics of fixing that system continue to evade us.
Oh, and just to play devil’s advocate with SeattleJew, who asked:
Mr. Gates’ use of government services may be higher than yours, but it doesn’t rise in direct proportion to income. He may use twice as much fire protection, police protection, etc…, but not 100 times as much, and that will be further reduced by the fact that he provides much of his own security.
So, an equally valid argument could be made that he should pay a smaller percentage of his income.
Be careful when using the “fairness” sword. It has two edges. “Fair” is a place to show off farm animals. I have yet to find a group of people larger than three that can agree on any other definition.
We’re not really looking for “fair”. We’re looking for a functional system that is acceptable to the majority and doesn’t cripple either the economy or the government. That’s a tall enough order. Add in “fair” and we’ll never get there.
Great points all. Just one question though:
Why do people deserve anything for free?
When the government hands out healthcare, welfare, reduced price school lunches etc…., it requires taking money from someone else to do so. Why is this “normal” or justified?
If I work hard for my money, the last thing I want to have happen is have someone take a portion from me and give to somebody else. Where is the fairness in that???
If I take money from someone and do with it as I see fit, thats called robbery and they put you in jail for that.
The government should pay for things that benefit all: roads, defense, law enforcement, fire fighting etc…
Why not come up with a national sales tax? That way you tax consumption and not production. All you have to do to keep the bleeding hearts from whining is exempt absolute necessities from the tax (food, shelter, etc..)
The benefits are twofold:
Congress no longer has a way to earmark monies in order to enrich themselves, friends or help them to get reelected in perpetuity, and the “evil” rich pay more as an effect of them buying more – no more just hiding there income as a form of capital gains.
Any negatives you can think of?
Ok, Miguel, fair questions. Let me try to supply a few answers.
Why should society supply health care? Because in other societies, we have found that without a good, overall health care system productivity suffers, diseases spread and the overall quality of life for everyone is reduced.
We currently have an overall health care system, but it is inefficient. More affluent people get preventative care, which is usually less expensive. Less affluent people get emergency care, which is costlier and less effective. We’re spending the money now, but not very effectively.
Why should society provide education? Again, because of the overall benefit to everyone, not just those being educated. An educated workforce is more productive and less expensive to train.
And while we’re talking about education, why should we give reduced price meals to financially poor students? Because it has been shown that they are more able to use the education available, hence making it more effective. More effective education means (as a rule) that the student will be a more productive adult, again, benefiting society as a whole.
A national sales tax has been proposed on any number of occasions and has some real advantages. Normally it is proposed as a “Value Added Tax”, and many nations use them, but as with any other tax system, the devil is still in the details.
Actually, local leaders’ spending priorities are so pathetically off base that they’ve been mored worried about building a lame slow-train system than they have been about actual bridges that far more people use. IT’S THE PRIORITIES, STUPID!
To answer John and some others….
But in other societies, they confiscate nearly half of your income to pay for that wonderful, overall health care system, in addition to the many other social programs.
This country was founded out of rugged individualism and IMO should not be striving to become like the near socialist states that exist in modern day Western Europe.
There has never been a country as great as ours….ever!
To say that we want to become Canada (in terms of Health care) is kind of a step down.
The bill that is coming due on the bloated social programs in our country is going to do one of two things:
Bankrupt our children/grandchildren or force us to turn over at least half of our hard-earned income to pay.
I think there is a better way.
1. There needs to be a social “safety net” to help those who cannot truly help themselves. It has to be means tested. In other words, only for those that can’t afford it. Why do the millions of well-to-do Americans need to get any kind of government assistance? The fact that EVERYONE gets Social Security and Medicare is insane!
2. Social Security needs to be phased out and market-based solutions need to be implemented in order to provide for your retirement. The facts are the facts: Used to be that for each person receiving benefits there were approx. 12 workers paying into the fund. Its now down to 3 and is dropping as we speak. This is untenable! Something new must be done. This new prescription drug benefit is only going to add to the mess.
3. We need to get back to being a people of self-reliance and responsibility!
4. We need to reward hard work and the American spirit, not punish achievers with higher, progressive tax rates. Make it easier for people to expand their business and hire more people and then make it easy for those workers to eventually set out on their own and create something that puts people to work.
5. The minimum wage laws, especially in this state, are a joke! Does anyone really think that there are a whole bunch of struggling families out there, earning minimum wage, desperate to feed their families? The VAST majority of people earning minimum wage are young people just entering the workforce. As it should be! Their day will come if they work hard, save and gain the experience and knowledge to work their way up the proverbial ladder.
I guess i’ve started rambling on but i’m just tired of everyone expecting a hand out. When are people going to stop complaining and start working hard to earn their way up?
To answer Dewey,
Amen brother!
Why have we not, as a people, stood up and demand that our elected officials come up with a comprehensive, prioritization of all government spending? The fact that the D’s that control this region are spending like drunken sailors in order to build a ridiculously outdated, 19th century, non-adaptable transit system is absolutely the most idiotic waste of taxpayer money I have ever witnessed!
Three words for ya: BUILD MORE ROADS!!!!!!
Very few people want to ride a train to work and then be stuck and unable to run errands at lunch because your car is parked comfortably in your garage at home. Build the roads out so that we have the freedom of choice to do as we please! That’s the AMERICAN way!!!
It should be:
Military Defense
Roads
Police and Fire services
Education
and only after that should we consider all of the politicians pet projects.
Instead, we do it in reverse!
/rant
The calls for more taxes are mind boggling to me. The idea that our state doesn’t have enough money to take care of most important responsibilities is ludicrous. The problem is waste and lack of accountability.
Miguel has it exactly right.
Sending Olympia more money only enables their dysfunctional behavior. Whether you’re talking about roads, schools, or whatever, simply handing more of our money to state agencies doesn’t by itself solve any problems. We’ve seen that over and over and over again.
Olympia needs to convince me that they’re priorities and performance is in order before I’ll ever vote for any type of tax increase. Good luck with that.
Thank you Chaz.
I’m am always amazed at the way they say a program was cut when in actuality the rate of increase was just cut or held constant.
We should have an initiative that simply states that all spending must be prioritized in an order that we can agree takes care of the most important things first. Things/projects that help the masses (taxpayers).
Man, the ensuing chaos from the leftislature would be rather entertaining, don’t you think?
“But in other societies, they confiscate nearly half of your income to pay for that wonderful, overall health care system, in addition to the many other social programs.
This country was founded out of rugged individualism and IMO should not be striving to become like the near socialist states that exist in modern day Western Europe.”
According to a 2001 article in The Wall Street Journal, Germans paid less per capita for their health care than did Americans, yet they received far more benefits. Sounds like they’re getting a good deal for their money, more than we are for ours. That’s right, their government is MORE EFFICIENT than our systems at delivering this necessary service. To answer your larger point, the highly-educated electorates of those other industrialized democracies decided to pay those taxes, and they receive benefits they judge as worth it. If you can have a higher quality of life by paying higher taxes, then why not?
“There has never been a country as great as ours….ever!
To say that we want to become Canada (in terms of Health care) is kind of a step down.”
Canada is also known for a very high quality of life. Have you any examples of how their health care is “a step down”? Since they pay less per capita than Americans do, it can deliver less and yet still might be more efficient.
“The bill that is coming due on the bloated social programs in our country is going to do one of two things:
Bankrupt our children/grandchildren or force us to turn over at least half of our hard-earned income to pay.”
“A bloated social program” certainly is an odd way to describe our failed occupation of Iraq.
Wow.
This article, and it’s posts of affermation, really underline the glaring fact that the collective stupidity of the liberal Democrat Party is overshadowed only by their mind numbing intellectual dishonesty…
Do an audit that shows where all of the money is being wasted and hold the poor decision makers responsible. Oh wait…that would take tax money too.
21 Ken Camp: Please help me determine what Charlene Corley’s politics are. I don’t see her political contributions in the standard locations.
Lee@34: An epiphany?
It’s the Democrats who tell everyone the need this and they need that and the Democrats will provide for their needs!
Darcy likely wants universal health care like Britain’s. But wait: This just in from the London Telegraph—“Stroke victims are ‘dying unnecessarily’ because Britain provides some of the worst treatment in Europe.”
“Despite spending just as much if not more on stroke services” more patients die and suffer serious disability than elsewhere”
Even though patients have a much better chance at recovery if given a scan and clot-busting drugs within the first three hours, “many hospitals struggle to carry out a scan within 24 hours.”
No the heck thank you! And no to Burner.