The Glade 4.0

I take it as a given that the American people are unwilling to substantially reduce the amount of Federal government services and spending. Americans always talk about it, but no matter who's in office, they never actually do it. So, assuming the amount of spending remains roughly where it is (as a % of GDP), how do you think the tax system should be reformed in order to deal with the deficit?

The least rights infringing form of tyranny within these constraints is likely a national sales tax that excludes food, clothing, and shelter.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Nope. Because as long as you make exceptions based on categories, all you're doing is opening the door to corrupt bargaining with regard to categorizing things, and making new exemptions.

Fair tax, or at worst, flat tax.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

VAT

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In time, this too shall pass.

Assuming it stays at the same &of GDP (I don't believe it will) then I'd say flat income, and flat income only. No excemptions deductions or transfusions allowed.

No estate or property. If I used my after flat income tax to buy property don't penalize me for it year after year.

No sales tax, If I spend or my money, that's on me.

And it stops the tax code from being used as a weapon. Granted it kills all the IRS and
return preparation jobs, but I think it's good in the long run.

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I prefer to think of them as "Fighting evil in another dimension"

I don't like Fairtax and other consumption taxes as they're regressive taxes, which is just as unfair as progressive taxes. Flat income tax is IMHO the best solution.

Drop income tax completely and institute a Federal Sales Tax on all goods and services.

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Put up a website, with a sliding bar for the budget next to all federal programs. The public can go to this website to "vote" on spending, by adjusting the bars.

Oh, and the website calculates your projected tax burden based on where you put the program budgets.

You'll see where people want the reductions in spending.

Otherwise, consumption tax.

Fair Tax actually works out to be mildly progressive, when you factor in the prebate. It's a flat tax rate on point of sale spending, with a fixed $ amount prebated to you to cover the tax on baseline necessities. So the more you spend, the higher your effective tax rate gets. That's progressive, not regressive. If you spend at the poverty level, you get a tax rate of 0%.

In fact, I don't see how you consider consumption taxes regressive overall -- it's a flat tax rate on spent money. You can make the argument that people who save some of that money causes a regressive tax rate effect, but the purpose of saving money is to spend it later. Unspent money being untaxed isn't really a concern for me.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

Consumption taxes are not regressive.

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Well, the tax itself is (assuming we're talking about an across-the-board tax on all goods and services). The expenditures financed by the tax are usually progressive though, so overall it's still a progressive system.

Ok, technically it's not regressive on consumption, (obviously) but it is regressive on income as consumption as a percentage of income decreases as income increases. This is even admitted by the creators of FairTax.

But that's a huge technicality because unspent income gets spent someday.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

It's still not regressive, since those with larger incomes spend more money.

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I think the question is largely irrelevant; any increase in revenue will simply get spent on bigger and bigger programs, since an unlimited about of "improvement" in social services is possible. No matter how well-funded health services and th elike are, there will always be some "travesty" justifying more and more spending.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

No it doesn't. If you invest the money and those investments lose value, you've essentially spent some of your money without paying taxes on it.

And that's how it should be, Xequecal. The risk/reward for putting money into entrepreneurship is penalty/gain enough in itself.

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Okay, so you don't get taxed on losing investments. I don't have a problem with that. If the investment gains value, however, if you ever realize any of that value by spending it on something (in your retirement, on a mansion, whatever), you now pay tax on it.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

So a very wealthy person like Warren Buffet who has >95% of his net worth stashed in various investments only pays tax on 5% on his income. Meanwhile, the average lower middle class person is paying tax in 110% of their income because they spend more than they make. The tax is massively regressive.

Despite the popularity of sports cliches to the contrary, you can't give more than 100%.

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Ezekiel 23:19-20 

I know a guy whose life plan for the next two years is to (seriously) max out about $30,000 in various credit card and loan debt, stash all the **** he bought in a rented storage unit under a fake name, then declare bankruptcy to wipe his debt and keep all the stuff. It is very possible to spend more than 100% of what you make.

You judge his character to be strong enough to merit friendship?

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Ezekiel 23:19-20 

Why would you go through all that work? Credit cards are considered unsecured debt.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Not as a percentage of their income, Khross, which is what regressive/progressive refers to.

RangerDave:

Not at all, since we're no longer taxing income if we switch to a flat VAT. So, if you will, kindly stop defining arbitrary terms for political gain. Even assuming current debt loads, which are retarded, the average middle class family would at best spend 11% of 107% of income, or 12%. And they would be punishing themselves for fiscally imprudent behavior. But, either way, everyone would pay 11% of expenditures in taxes.

On the flip side, the tax paradigm you continue, and its associated entitlements, actually are regressive and negatively impact the poorest segments of society vastly more than a VAT vs. a negative savings rate household. In fact, it's rather amazing you can argue that current taxation is progressive when caps on SS and Medicare are in place. Payroll taxes as a climbing portion of withholding are devastating to the very entitlement recipients they fund. And they're even more devastating to the people who just barely don't qualify. Staffers at my University pay more in taxes relative to income than I do in the current system (out of my salary, that is).

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