[quote]vroom wrote:
Well gee Zeb, if you have the answers to the worlds problems, why don’t you share them with us? What are those better solutions you speak of? Why are they better? What is wrong with a consumption tax?
All politics and kidding aside, as someone with a good background in economics, I would really like to know.
As for Kerry, he has stated he’d raise taxes for those earning over $200K. There might be a few folks in here that would be affected. Probably not many though.[/quote]
It affects the largest group of tax payers we have in this country. When 90% of the tax revenue is generated by only 10% of the moneymakers - Kerry’s basically putting everyone that pays income tax on notice that he wants more of your money.
A consumption tax isn’t a bad idea - we’ve had that for quite some time - tobacco, liquor, and gasoline taxes.
The problem occurs when you try to fund Social Security through a consumption/sales tax. Your Social Security benefits are based on how much you make - not how much you spend.
I don’t care what the income tax rate is - when you slap 15.3% on top of it - it’s punitive.
The best way to lower/change our tax code would be to do away with Social Security. And until we deal with that albatross, this whole discussion is pointless.
“The answers to the worlds problems?” Who said that? I wish I did have those answers.
As far as the consumption tax that you have suggested, I don’t think it’s the best choice. The main reason being that anything that punishes purchases of any kind has the potential to slow the economy, which is a bad thing.
I would rather see a flat tax with no loopholes of any kind!
I think it is better to let people decide how to spend their money, instead of taking it for the government and letting them decide.
With a consumption tax, I can invest all the money I earn, to earn more money, instead of only investing what I have left over after the government steals my wages.
I don’t think it matters where the tax is coming from in terms of whether or not people will spend. We are all going to keep spending.
However, the current rules really promote the formation of offshore strategies to hide income. I suspect this is a huge leak, but I don’t have numbers to prove it.
I wonder if having the ability to invest it before the government “steals it” would be enough to counter the loss you would incur when you are taxed at the point of consumption?
Don’t get me wrong I would far prefer a consumption tax over the horrible, oppressive system that we now have, and I understand Canada is even worse.
Income is taxed at the federal and provincial levels. Spending is taxed to a lessor degree at both of these levels, via sales tax, as well. It is similar to the US, with income tax deducations taken directly out of my pay by my employer.
Zeb,
If the tax rate was the same, for consumption versus income tax, then I’d surely be better off, as long as I didn’t lose money when investing. The government would generally earn more revenue, as I’d eventually be spending post-investment money, not just my raw earnings.
Alternately, if I (and others) held the money for long periods of time, then it would be encouraging savings and investment, which makes money available for economic growth which generates more income for the populace in general.
Obviously, nothing would force me to invest. I could simply spend all I earn and end up paying exactly the same amount of tax as I do via source deducted income tax. At least it would be my choice.
Hehe… I remember in history class a few years ago :), when we were talking about the beginnings of federal income tax. I remember how pissed off the conservative congressmen were at the time saying basically: “Oh my God! A 1% federal income tax? What is the world coming to? What if it’s 3% someday?!! How can we ask that of the citizens?”
Interesting, we have moved so far left in this country that John Kennedy would almost be considered a conservative by todays standards. What will forty more years bring? It’s sick…
Is that a trick question Zeb? I’d like it to be as low as possible…
Honestly, I don’t know what a realistic figure is going to be. Something that would keep the government from running a deficit if possible (and I know times of war can be an exception to that).
Maybe a general forumula could be devised based on the level of consumption during the previous year. Set the rate so that non-military spending was covered plus an additional X% to cover peacetime military spending.
Spending above peacetime levels, generally not done during peacetime, would be deficit spending.
Anyhow, we’d still have the problem of trying to keep government spending down, no matter how the tax was applied to us. Maybe spending gets set to acceptable percentages of the GDP, just like taxation.
Don’t know, just a wild idea at the moment, but it might change the nature of spending to one of deciding on the allocation of fixed money (how most of us spend money) instead of finding new ways to raise and spend money (how the government seems to spend money).
Heh, there, no answer at all, just some general ideas. A tax rate of 0% would be nice, but the government needs to be funded somehow…
[quote]ThaRealest wrote:
How much do you make that you pay 32-33% in federal income tax? I make ~85k and I pay ~21% right now, and that’s as a single filer. Or were you including social security tax and medicare?[/quote]
21% ? Why so high? I claim only 1 (myself) and im at 17%. If you’re at 21% I may be paying in next year. Hell, I think Im at 27% total. I guess I need to look into this
[quote]trailrash wrote:
ThaRealest wrote:
How much do you make that you pay 32-33% in federal income tax? I make ~85k and I pay ~21% right now, and that’s as a single filer. Or were you including social security tax and medicare?
21% ? Why so high? I claim only 1 (myself) and im at 17%. If you’re at 21% I may be paying in next year. Hell, I think Im at 27% total. I guess I need to look into this[/quote]
You’re right. I realized right after I submitted that I hadn’t factored in the standard deductions.
