09 Jun 14
Originally posted by KazetNagorra"I would favour a taxation system that maximizes utility."
I would favour a taxation system that maximizes utility. Given what we know about marginal utility this is likely to be some kind of progressive taxation system (like the one KellyJay proposed), although its details are up for debate.
Of course, if the goal is Constitution masturbation rather than effective government policies, the preferred taxation method might differ.
Would that not be a system which maximizes efficiency? Minimizes record keeping and enforcement? Eliminates the multiplicity of loopholes and special exemptions? The cost of accounting, record keeping, and advisory services is massive, for both the tax payer and tax collector.
Kelly's (and Steve Forbes'😉 flat rate tax does some of those things. A National Sales tax, and elimination of any personal income tax does them all, as well as all but eliminates fraud without a massive enforcement agency. It also has the advantage of being transparent, and would make all people more aware of how much taxes they pay, and perhaps make the more resistant to expansion of government.
09 Jun 14
Originally posted by normbenignWould that not be a system which maximizes efficiency? Minimizes record keeping and enforcement? Eliminates the multiplicity of loopholes and special exemptions? The cost of accounting, record keeping, and advisory services is massive, for both the tax payer and tax collector.
"I would favour a taxation system that maximizes utility."
Would that not be a system which maximizes efficiency? Minimizes record keeping and enforcement? Eliminates the multiplicity of loopholes and special exemptions? The cost of accounting, record keeping, and advisory services is massive, for both the tax payer and tax collector.
Kelly's (an ...[text shortened]... ware of how much taxes they pay, and perhaps make the more resistant to expansion of government.
It would maximize "efficiency" insofar that is equal to utility. As for your other points: yes, absolutely.
Kelly's (and Steve Forbes'😉 flat rate tax does some of those things. A National Sales tax, and elimination of any personal income tax does them all, as well as all but eliminates fraud without a massive enforcement agency.
I would favour a taxation system similar to KellyJay's proposal, although with a larger wedge and a larger percentage. This could be combined with a sales tax. Having just the sales tax would not be efficient because it is regressive.
09 Jun 14
Originally posted by KellyJayI must have been asleep when I wrote this.
If it is 10% after 30K than 30% and one dollar would be 10% of one dollar.
I'm sure there would be cheats, there are always cheats. Filling out a tax
form would be post card for everyone who earns through income. Seems
like a lot effort for that.
Kelly
I meant to say if it is 10% than 30K and 1 dollar would lose a dime in taxes.
Post cards would be required not hundreds of dollars going to pay someone
who knew how to find 10% of some total over 30K.
Kelly
09 Jun 14
Originally posted by normbenignYes, I forgot about Forbes I should have given him credit, thank you for
"I would favour a taxation system that maximizes utility."
Would that not be a system which maximizes efficiency? Minimizes record keeping and enforcement? Eliminates the multiplicity of loopholes and special exemptions? The cost of accounting, record keeping, and advisory services is massive, for both the tax payer and tax collector.
Kelly's (an ...[text shortened]... ware of how much taxes they pay, and perhaps make the more resistant to expansion of government.
spotting my error! When he first talked about it I didn't like the 30K part of
the system until I thought about the poor where every dime would matter.
The 30K seemed like a good way around that.
Kelly
09 Jun 14
Originally posted by KazetNagorraA sales tax would push a lot of transactions underground too. No one wants
[b]Would that not be a system which maximizes efficiency? Minimizes record keeping and enforcement? Eliminates the multiplicity of loopholes and special exemptions? The cost of accounting, record keeping, and advisory services is massive, for both the tax payer and tax collector.
It would maximize "efficiency" insofar that is equal to utility. ...[text shortened]... ned with a sales tax. Having just the sales tax would not be efficient because it is regressive.[/b]
to pay taxes.
Kelly
10 Jun 14
Originally posted by KellyJayDo you perhaps have access to some empirical studies assessing different types of tax evasion?
A sales tax to me seems like it would be easier to avoid than a flat tax.
Keeping books for earnings is easier to check than two people who are
swapping goods and services, for goods and services.
Kelly
10 Jun 14
Originally posted by KazetNagorraNo, I was just thinking *writing* out loud. You can go to a pawn shop
Do you perhaps have access to some empirical studies assessing different types of tax evasion?
and swap items, trade food out of your garden, you can fix a roof, and
a million other things that could be taxable actions and if there isn't a
paper trail, who would know? If you employ 20 people and cannot come
up with paperwork on them, it seems to me it would be easier to spot.
Kelly
10 Jun 14
Originally posted by KellyJayThere are certain minor transactions in the informal economy that are quite difficult to regulate and tax; this applies to both the transaction of goods as well as the supply of labour (e.g. a handyman helping someone fix a roof). These transactions are a minor part of the economy and usually governments don't really care about them.
No, I was just thinking *writing* out loud. You can go to a pawn shop
and swap items, trade food out of your garden, you can fix a roof, and
a million other things that could be taxable actions and if there isn't a
paper trail, who would know? If you employ 20 people and cannot come
up with paperwork on them, it seems to me it would be easier to spot.
Kelly
10 Jun 14
Originally posted by KazetNagorraThe question as to utility then is what you hope to accomplish with tax policy. Its fundamental purpose. If it is social manipulation and engineering, then you may argue for the utility of a progressive system, either as it is, or as Kelly proposes.
[b]Would that not be a system which maximizes efficiency? Minimizes record keeping and enforcement? Eliminates the multiplicity of loopholes and special exemptions? The cost of accounting, record keeping, and advisory services is massive, for both the tax payer and tax collector.
It would maximize "efficiency" insofar that is equal to utility. ...[text shortened]... ned with a sales tax. Having just the sales tax would not be efficient because it is regressive.[/b]
If taxes are simply to raise revenue to finance government, then the sales tax does fine, and as pointed out it has the advantage to the taxpayers large and small of being transparent and not pitting one group against the other. Its being regressive may not be so much as is thought. Rich people do tend to buy expensive toys, and even the necessities of life as well.
10 Jun 14
Originally posted by KellyJayYou are right, but the majority of sales happen out in the open. Almost every State already has the system in place to collect sales taxes from retailers. No system can eliminate evasion altogether. People under a progressive income tax often seek means of hiding income to mitigate progressiveness. Barter, and fudging selling prices also are practiced to evade sales taxes.
A sales tax would push a lot of transactions underground too. No one wants
to pay taxes.
Kelly
In any case, there is not the necessity for a veritable "secret police" in the form of the IRS to enforce a sales tax, nor the cost to average tax payers of hiring tax-preparers, accountants, and lawyers.
I don't see a sales tax pushing more underground than is already there under the current system.
10 Jun 14
Originally posted by KazetNagorraI was watching a series on Discovery a few nights ago about a family in Alaska bartering with one guy for his DVD collection in exchange for 20 pounds of lake trout, and the DVD collection was exchanged for a portable generator. No paper trail, just people trading for what they want, and little in the way of government services either.
There are certain minor transactions in the informal economy that are quite difficult to regulate and tax; this applies to both the transaction of goods as well as the supply of labour (e.g. a handyman helping someone fix a roof). These transactions are a minor part of the economy and usually governments don't really care about them.
11 Jun 14
Originally posted by normbenignWhat's "social manipulation and engineering"? Every choice of taxation system will have an impact on society.
The question as to utility then is what you hope to accomplish with tax policy. Its fundamental purpose. If it is social manipulation and engineering, then you may argue for the utility of a progressive system, either as it is, or as Kelly proposes.
If taxes are simply to raise revenue to finance government, then the sales tax does fine, and as point ...[text shortened]... s thought. Rich people do tend to buy expensive toys, and even the necessities of life as well.
The goal of taxation is obviously to raise revenue for whatever government/public services are essential. The method of taxation should be such that it minimizes harm to others.
11 Jun 14
Originally posted by KazetNagorra"What's "social manipulation and engineering"? Every choice of taxation system will have an impact on society"
What's "social manipulation and engineering"? Every choice of taxation system will have an impact on society.
The goal of taxation is obviously to raise revenue for whatever government/public services are essential. The method of taxation should be such that it minimizes harm to others.
It is the purposeful creating of loopholes, in order to promote behaviours. For example the deduction of mortgage interest to encourage home buying. It involves doling out favors to support groups in politics. The result is an income tax code bigger than the Bible, and a feared agency running the enforcement of that confusing code.