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Posted on 10/19/2009 7:29:20 AM PDT by SeekAndFind
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Sounds like a fair trade, but who would expect the Govt to ever give up a tax...
Actually, no. A transaction tax of sufficient size to replace our current tax system would put enormous pressures on companies to integrate vertically as much as possible. A car company which owned everything from the iron mines and oil wells for steel and plastic, to electronics companies, to the assembly lines to the dealerships to employee housing and even the company stores for providing food to employees (and the farms for that food) would have a huge advantage to a car company which specialized in building cars so it bought steel from a steel company, molded plastic parts from another manufacturer, etc. Everything within a company would be outside of the transaction tax, so there would be a huge incentive for companies to grow.
Also, many of the transactions most of these people want to tax are financial money shuffling to take advantage of tenth of a percent advantages, so they will either go away if hit with a tax or (more likely) just move off shore so the only transaction is the initial money transfer. After that, buying and selling pork belly contracts can work just as well in London as Chicago.
Any transaction tax based on static analysis will ignore those two tendencies and the rate will have to be jacked up when suddenly 90% of the transactions they counted on taxing are removed from the tax base.
NY takes the cake...Over 90 new or increased tax items this year.
Sorry about the double post.
Yea, can't wait to see those IRS folks at the unemployment office...
Riiiight.
Sounds like the “Fair Tax” frauds are trying to reinvent themselves.
Here is a gimmee for editorial cartoonists. Obama as Al Capone, with his henchmen, all wearing cheap suits and fedoras, with some of his lieutenants carrying Tommy guns:
Obama - Al Capone
Joe Biden - Paul “The Waiter” Ricca
Rahm Emanuel - Meyer Lansky
Atty General Eric Holder - Frank Nitti
Timothy Geithner - Jake “Greasy Thumb” Guzik
Ben Bernanke - Tony “Joe Batters” Accardo
Murray “The Camel” Humphreys
Hillary Clinton, Janet Napolitano, and
Kathleen Sebelius - Various “Gun Molls”
Various Czars - Various Lieutenants
5% tax to cash my paycheck? Then 5% more if I want to buy something with it, or many times more than that built into the price of a domestically produced item because very rarely is something produced from company mined raw materials all the way through final shipping to the retail customer... there are middlemen and suppliers who all get hit for an extra 5% on top at each level. Since foreign production would only take one 5% hit at the time of import, you might as well kill our remaining domestic production of anything.
I think I would skip direct deposit and either take payment in a stack of hundreds every week or take payment in kind if I worked at a company which made/sold something I could use or barter with.
Either the tax would kill the economy, or else a side "bonding" businesses would start who would escrow payments until completion of contracts and charge far less than 5%.
If I understand this properly, the idea is to add a fee to contract drafting that then provides the payor with the ability to have the government enforce the terms of the contract. If you don’t pay the fee, you lose the ability to take the other party to court to enforce judgment in a contract dispute. The problems I have with this are that it further abrogates contract law, in that contracts are now voluntary. If the other party in the contract doesn’t have deep pockets, you can violate the contract to your heart’s content without fear of legal reprisal. Also, if you do have deep pockets and the other guy doesn’t, you can draw up contracts that are biased in your favor, and use the system to force judgement on the little guy. Essentially, you can buy government muscle to put the squeeze on anyone who gets into a contract with you. Further, this opens up the possibility of bribes further than it already is, with corrupt agencies willing to take a little extra to swing any judgment your way.
Also, if this goes through, any contract with the government option automatically becomes more valuable than a non-backed contract, thus changing the market; as non-backed contracts become second-class, fewer people will use them, causing a shift in the way people agree, and likely causing a suppression of commerce at the lower end of the economic spectrum.
That is exactly what it is....
Loony.
Income is not the problem. It’s a giant red herring that is brought out any time government starts to run low on funds. Spending is the problem. When government, at EVERY level, is forced to live by the same rules the family is when it comes to income and outgo then, and only then, will the problem be on its way to a solution.
Of course, that's also expensive and tends to promote inefficiencies of management due to bottlenecks in information flow (usually wrongly discounted, IMHO). So I don't think it's as simple as that. It seems likely to me that vertically integrated entities will run afoul of already existing monopoly rules. Any small player may avail themselves of the anti-trust laws by paying the tax. Perhaps to avoid the costs of enforcement other tactics might be used that are already used to avoid legal expense. For example one solution already in use is arbitration agreements. Only the arbitration contract needs to be enforced, and the enforcement tax could easily be limited to the matter at hand. In fact, to avoid losing out to the competition the gov't might simply require posting a tax bond to seek enforcement of a contract in court.
I am not going to foolishly insist there will be no perversion of the object of business by this form of taxation. OTOH, the current system happily perverts business for social and political causes anyway.
I do take exception to the author using the term "right" to describe government power. Government has authority, not a right, to exercise power.
I’m in favor of a flat tax-rate.
Doesn't matter how sorry you are, if you were in Great Britian, you'd still have to pay the 15% VAT on the second post. :-)
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We already have this tax. It's called "legal fees." Instead of being collected by the government, it goes into the pockets of the Trial Lawyers. The Trial Lawyers in turn donate a large chunk of it to Democratic politicians, who protect the right of the Trial Lawyers to operate this scheme.