Posted on 01/27/2012 4:48:26 AM PST by SeekAndFind
“The earnings of the back hoe inventor should be taxed at the same rate as the ditch digger who he just put out of work and the heavy equipment operator who replaced him.”
And the construction contractors who hire multiple crews to build the manufacturing plant, and the assembly workers he hires to build the equipment, and the suppliers who hire construction crews and then assembly workers and then the restaurants that open in the neighborhood of the new industry’s neighborhood, and the new teachers brought to the area to teach the children of all the new employees.
The inventor of the backhoe certianly benefits society to a much higher degree than a ditch digger. Besides, any ditch digger worth his weight is an apprentice and was in a temporary job anyway....
I do agree that there is way to much complexity in our tax code and I would favor aboloshing it all together in favor of the FairTax. However, this is limited to a discussion of why a tax rate is different for capital gains than labor related income.
1. Capital investments are not possible without some labor or intellectual earnings that were already taxed. The lower rate is already an admission that this situation creates a double taxation.
2. Once the capital is invested, it frees up beneficial activities that benefits society in a much broader sense than my daily earnings.
“IOWS....the working middle class....no big business expenses to claim, no golfing outings to deduct for “clients”..no superbowl tickets to deduct...no nothing...”
Go ahead and remove those deductions and you will either see leisure activity (golf courses, lunch eateries, etc.) business close up shop or your prices for the goods produced by the companies you reference increase. I do admit that you would not see a reduction in the super bowl ticket sales, but that comes to a town only once in awhile...
BTW, most of the beneficaries of those types of activities in my area are the working middle class. It is more likely the $100K gross wage sales person taking out the $90K union shop steward, line supervisor, crib supervisor, etc. to those events. The richest folks have their own gigs that we will never even fathom!
It wasn’t a loss. It was a purchase.
So the government should recognize that contribution by giving him a break on his taxes, while the guy in the ditch breaks his back.
There is a word for that kind of system. It is called CRONY CAPITALISM.
I think all Americans should pay the Mitt Romney rate. Romney should not have to pay more than 15% of his income in income taxes. Neither should anyone else!
I would favor aboloshing it all together in favor of the FairTax.
Define "a Fair Tax". Who gets to decide what is "Fair".
All men are created EQUAL, but life is not FAIR. Every man should be treated as an equal to other men. But our government picks and chooses who gets favorable treatment. You seem to want to continue that practice.
If I say that the Ditch Digger should pay the same favorable tax rate as the inventor of the back hoe (and vice versa), then I am arguing for equal treatment under the law.
If you argue that the inventor is of more value to society and therefore should pay a more favorable tax rate than the ditch digger, then you are arguing a socialist world view. That the individual is only valuable in relation to his contribution to society.
Now who's the Capitalist and who is the socialist?
I was thinking sales tax when I answered. I should have read your post a bit more carefully. You are on the income tax side of the discussion and not on the sales tax side.
If one person is permitted to deduct his $10 from his gambling, then every person should be able to. That is your point, if I understand it correctly.
Now, actually, I agree with that. In my opinion, every household should be treated as a corporation and have all the exclusions that corporations have. Since a gambler makes his living gambling, then the $10 would be a business expense for him. The two thousand would be taxable to the extent that other business expenses reduce it: transporation to and from the track, ticket to enter, any business-related lunch purchased, and of course food, clothing, shelter, etc.
I don’t expect that to happen.
In the meantime, we’re stuck with a system where 2000 of income is taxed one way for some and a different way for others. As Marlowe says, that 2000 is no different than the stableboy’s 2000 monthly income, and if he has to pay 15%, then so should the gambler.
All of which are reasons I prefer a sales tax only.
I was thinking sales tax when I answered. I should have read your post a bit more carefully. You are on the income tax side of the discussion and not on the sales tax side.
If one person is permitted to deduct his $10 from his gambling, then every person should be able to. That is your point, if I understand it correctly.
Now, actually, I agree with that. In my opinion, every household should be treated as a corporation and have all the exclusions that corporations have. Since a gambler makes his living gambling, then the $10 would be a business expense for him. The two thousand would be taxable to the extent that other business expenses reduce it: transporation to and from the track, ticket to enter, any business-related lunch purchased, and of course food, clothing, shelter, etc.
I don’t expect that to happen.
In the meantime, we’re stuck with a system where 2000 of income is taxed one way for some and a different way for others. As Marlowe says, that 2000 is no different than the stableboy’s 2000 monthly income, and if he has to pay 15%, then so should the gambler.
All of which are reasons I prefer a sales tax only.
By FairTax, I believe CSM is talking about the sales tax only plan. So, he, too, like me is saying we wouldn’t have these twisted arguments about equality if everyone paid a sales tax of X% on every purchase or transfer.
IMHO, we should be under a sales tax system, and he should pay the 20% on a 600,000 dollar purchase. What he gets on return is his money. If he spends any of it, then he'll pay that sales tax on it. It's the most fair system.
I don't like the idea of a Federal Income tax simply because it makes everyone an agent of the Federal Government. When you transfer title to any good, then you become the agent of the government and are required to collect the tax and then forward it to the Feds.
Frankly the best method would be to have the Federal Government tax the States based on population. The government would determine it's annual budget and send the bill to the states to pay their pro-rata portion of the budget and the States could then figure out how to come up with the money.
But as long as the individual is responsible for paying his share of the tax burden, then each individual should be taxed at the same rate. No picking and choosing of winners and losers.
The Constitution reflected the concepts in the Declaration--hence the prohibition in Article I, Sec. 9, against anything but a per capita tax, as a direct tax on citizens. That means not a percentage of income but a flat amount, both on your inventor & your ditch digger. (Constitution.)
Under the Founders' precepts we throve as no people before or since.
William Flax
“I think all Americans should pay the Mitt Romney rate. Romney should not have to pay more than 15% of his income in income taxes. Neither should anyone else!”
You sure? Lets see, in order to get money to invest, person A (Romney) makes gross $100 and nets $65 in order to invest $65. Then over time he makes 10% a year for 10 years so that $65 grows to $176. Now $176 - $65 = $111 and now person A owes $111 x 0.15 = $17 more in taxes. So person A earned income of gross $100 and has paid $52 taxes or 52%.
If the investment is for only 1 year, then with a 10% return it is $6.50 x 0.15 or $0.975 owed in additional tax, so his effective rate on $100 earnings is $35+$1 or 36%.
Person B (average Joe) grosses $100 and does not invest anything, so he pays his 15% (according to Buffet’s secretary). He earned $100 and paid $15.
It should be all of our goals to invest enough over time that eventually our investments are making more in the market than we can make on the job.
“There is a word for that kind of system. It is called CRONY CAPITALISM.”
Your thinking is reversed. If I pay taxes on my earnings, and then invest it and still owe more taxes because my investments were successful, that is not crony capitalism. It is called self reliance.
“Define “a Fair Tax”. Who gets to decide what is “Fair”.”
Are you being purposely obtuse or are your emotions getting in the way? I said FairTax, as in the abolishment of the income tax, cap gains tax, soc security tax, etc, etc, to be replaced by a national sales tax.
“If I say that the Ditch Digger should pay the same favorable tax rate as the inventor of the back hoe (and vice versa), then I am arguing for equal treatment under the law.”
Go back and look at that “favorable” rate you are so upset about. Both earned an income of $100 and paid an income tax, at progressive rates, then the investor pays again...his true rate is about 52% over that 10 year example.
“If you argue that the inventor is of more value to society and therefore should pay a more favorable tax rate than the ditch digger, then you are arguing a socialist world view. That the individual is only valuable in relation to his contribution to society.”
That is not what I said at all. What I said is that the “second bite at the apple” by the government drives the total “rate” the inventor pays to be well above what you would find acceptable for the ditch digger. Both are already paying their different rates on their earnings, then they do different activities with their net wages. One spends it all and the other invests it all. The reality is that each is probably somewhere along that range and not completely at the “spend it all or invest it all” extremes of the range.
All I am doing is pointing out that the totality paid by one is already MUCH higher than the other. If you want to give in to the twisting of the leftist, then more power to you. Just don’t be shocked when Atlas Shrugs.
Then it is not a gain, it is a purchase.
“By FairTax, I believe CSM is talking about the sales tax only plan.”
True. But until we get there, we can not fall into the left’s traps. We need to keep in mind the totality of the “rates” being discussed.
“Frankly the best method would be to have the Federal Government tax the States based on population.”
Only if we repeal the 17th Ammendment. If I mixed that one up with womans suffrage, I apologize. I am referencing the direct election of State Senators. If we could repeal that one as well as the establishment of the income tax ammendment, then we would greatly diminish the fed monster.
In lieu of that, then I want the entirety of our citizenry smacked in the face every day, with every purchase, with the cost of their government largesse. How different would the Obamacare discussion have been if it could have been spoken in plain economics. Such as, “Sure, we can afford to have government provided ‘free’ health care. It will just mean a 15% increase in the sales tax rate.”
So you think it is the job of the government to punish the financially inept and reward the financially frugal?
Tell me, is FICA a tax or a retirement program?
Would that be on goods and services? Food and Medicine? Charitable contributions?
What if you don't use money? How do you tax barter?
What if I trade my gold or silver or wheat or corn for your goods and services? How are they going to tax that?
If the Feds instituted a 15% additional tax on goods and services, how much more of our economy would go underground?
The 19th was the women’s suffrage amendment,
and frankly, I don’t understand. Why in the world would we pass an amendment to make women suffer more? I mean, they got it hard enough with all the biological stuff and childbearing and stuff, and here we targeted them with a specific amendment to make things worse.
End women’s suffage now!
“So you think it is the job of the government to punish the financially inept and reward the financially frugal?”
That would be much preferable to the current situation of rewarding the financially inept and punishing the frugal. If you want more of something, tax it less. Now the discussion has shifted to further punishing the frugal to reward the inept. If you want less of something, tax it more.
“Tell me, is FICA a tax or a retirement program?”
It is most definitely at tax and a very detrimental one at that. Madoff couldn’t be more proud.
I should have also added that my comment of, “It should be all of our goals to invest enough over time that eventually our investments are making more in the market than we can make on the job......”
Is irrelevent of the tax code being discussed. If you want to remain empowered and free, then you need to position yourself to not have to count on the tax code to survive.
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