Twenty-Three Percent for Nothing

David Weigel | November 2, 2006

Tim Russert took a breather from making middle-aged men cry to moderate a debate between Florida's U.S. Senate candidates, incumbent Democrat Bill Nelson and Republican Katherine Harris. (In the interest of balance, this is illustrated by a hideous photo of Nelson.) Because the race isn't even close - polls put Nelson 20-25 points ahead - Russert opted to spend a huge chunk of the hour grilling Harris on her support of a national 23 percent sales tax. (The Orlando Sentinel mistakenly labels this "the flat tax," but it's obviously the "fair tax" boosted by Neal Boortz.)

The resulting exchange was a calvalcade of chuckles, not least because Russert repeatedly mangled the facts of the fair tax and said "it taxes 23 cents on everything you buy." It'd be amusingly to watch the government run out of tax revenue 45 minutes into the fiscal year, but neither candidate seemed to notice Russert's flub. Harris, who looked (surprise!) incoherent and dizzy during most of the debate, actually showed signs of life defending the national sales tax. She simply rattled off the names of taxes that would (hypothetically) be swept aside by a sales tax; the hostile audience actually laughed with her. Nelson came back with a murky attack on the sales tax idea, citing mysterious "experts" who determined the whole crazy idea was, in fact, crazy. Prodded by Russert, the candidates argued tax reform for a solid five minutes, with Harris's defense of radical reform sounding surprisingly palatable. It was like a snapshot from an alternate universe where campaigns don't consist of non-stop meaningless jackassery.

(Headline explainer here.)

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Ron Hardin|11.2.06 @ 2:04AM|#

The ``fair tax'' instantly confiscates 23% of your savings, if you have any, which many older people do.

You already paid an income tax on the savings, and now they want to tax them again when you spend them.

The problem is that you can't move the point of tax collection later in the earn-spend cycle without taxing something twice.

There's already a fine flat tax in place. FICA. Just raise the rates to 23%, include all income, and eliminate the income tax.

There's surprising political agreement on the tax rate once everybody has to pay the same rate.

That doesn't eliminate the temptation to campaign on a program to ``fix'' it, however, offering lower rates to some majority at the expense of some other minority ; so it's an illusory gain.

|11.2.06 @ 2:49AM|#

Couldn't a lot of the double taxation be taken care of with rebates? IRA's are taxed when they are distributed, and with Roth IRA's, which should be withdrawn tax-free, couldn't you just report your distributions like you do now, and you would receive a tax rebate for the amount?
Even taxable savings could be dealt with. Now, you have to report gains on any asset you sell. You could file the same claim, but instead of paying tax on the gains, you would receive a rebate on the cost basis.

Over time, the number of claimed rebates would dwindle & be phased out.

|11.2.06 @ 2:55AM|#

Any video of this?

|11.2.06 @ 7:41AM|#

Does anybody seriously think that the institution of a national sales tax will be coupled with a repeal of the income tax?

$5 says we would end up saddled with both.

It certainly will not get rid of the IRS. They'll be auditing incomes, this time to verify adequate tax was collected rather than auditing incomes to verify adequate tax was collected.

I see many dangers for little benefit (if any)

|11.2.06 @ 7:49AM|#

Ron, where did you get the idea that the FairTax "instantly confiscates 23% of your savings"? It's a consumption tax, it gets charged with the price of services and new goods. The price with FairTax would be the same or less as it was before, but without the actual taxes on savings and investments that we have right now. Anyone who has considerable savings would actually be *increasing* their purchasing power.

|11.2.06 @ 7:50AM|#

tarran, considering the fact that you can't write a coherent sentence, I am not taking tax advise from you. There are no audits under the Fair Tax, because income doesn't have to be reported. The IRS will still exist to audit businesses to make sure they are complying with the sales tax.

If you love taking the time to tell the government how much you earn every year then go ahead and keep supporting the income tax.

|11.2.06 @ 8:07AM|#

So, James,

When you sell something (and earn an income from it) how will the government verify that you collected an adequate sales tax? Will they magically know? Will they trust people to give them the money "owed" on their own intitiative?

I think they'll still be auditing income.

BTW since taxation is a fancy word for theft, I do not support the income tax either.

Todd Frye|11.2.06 @ 8:15AM|#

Some quick points:

1. Hey, aren't Libertarians supposed to be against taxes all together, as Tarran pointed out?

2. Flat tax, graduated, or whatever, most Americans will still get screwed and the rich and powerful will still cheat the system to their advantage.

3. It's not a cool pop culture reference if you have to explain where it came from.

|11.2.06 @ 8:18AM|#

"It was like a snapshot from an alternate universe where campaigns don't consist of non-stop meaningless jackassery."

I noticed the same thing while watching the Florida gubenatorial debate. High-minded, fair, centered around ideas.

Which is strange, because I was down there just before the primary elections, and every ad was about who got an unfair tax deduction and who has "ties" to child molesters and who hates da troops.

|11.2.06 @ 8:24AM|#

The states are already administering sales taxes. It seems to be working ok for them. Stiff penalties will go a long way toward keeping the "powerful" from cheating the system.

ChrisO|11.2.06 @ 8:42AM|#

It's not a cool pop culture reference if you have to explain where it came from.

I got it without the explanation. Prog rock is so uncool that it's cool. By the way, that "explanation" didn't really explain the song title, which was a reference to the level of service Yes believed they had received from their previous management. Actually, quite appropriate in the context of this thread.

thoreau|11.2.06 @ 8:45AM|#

I'm down with almost any kind of significant tax simplification. I personally think the flat income tax has a better chance of being passed and better chance of not becoming clogged with new complications, but I'm willing to be proven wrong on that point.

|11.2.06 @ 8:49AM|#

There's all sorts of problems with a sales/consumption tax that make it pretty much politically unviable.

I don't think that's even the place to start with tax reform. I'd start by getting rid of the difference between employer and personally provided health insurance which completely distorts the market. Try to roll the tax system back to the 1986 tax reform, and then some.

I don't think the problem with the IRS is that it audits people. I think the problem is that people are subject to a set of laws that is far too complex for any person to understand. My 2005 Internal Revenue Code has about 9500 pages.

In any event, I'd be worry that a national sales tax really would creat an insuperable wealth divide in this country. Politicians would probably reintroduce tax brackets (which would be easy if it was administered with taxable income = income - savings) and keep ratcheting up the tax on the higher brackets. People who make a lot today might find themselves facing taxes of a pre-Kennedy tax cut sort.

Thoreau, the flat tax would overwhelmingly benefit wealthy people, so there's no way in hell that kind of tax will ever fly.

Sandy|11.2.06 @ 8:51AM|#

I'm just glad that somebody's carrying on prog rock references.

And if it's unpopular, is it a "pop culture" reference?

|11.2.06 @ 8:52AM|#

I think he's had a little work done.

thoreau|11.2.06 @ 9:09AM|#

James-

If all deductions, loopholes, and exemptions were eliminated, that would at least partially rectify the problem. More importantly, keep in mind that right now Medicare and Social Security taxes cut off at a certain level. We give those taxes a separate name and pretend that they aren't really the "income tax" (which is done on a separate piece of paper) but we basically have an income tax that cuts off at high income. So our system is already a bit flatter than we like to think, just more complicated.

The great thing about a flat tax with absolutely no exemptions at all is that you could do it as a payroll tax. Employers are already set up to do that, so there would be no added administrative burdens. In fact it would be simpler for them because they wouldn't have to do W2 forms for each employee. The self-employed would still have to do tax forms, but that's already the case. Nobody would face any more paperwork, many would face far less paperwork, and some would do no paperwork at all.

|11.2.06 @ 9:20AM|#

I hope we're not getting into the problem that normally comes up with discussing flat tax and mistaking what politicians are talking about (a tax with one bracket on spending (income-savings = taxable income) for what most people think of (one bracket on income).

|11.2.06 @ 9:36AM|#

Am I the only one who thinks a large national sales tax promotes a black/grey market of under the table cash transactions? If you add federal, local, and state sales taxes together, people could save 30% of the purchase price just by keeping the transaction off the books, or underreporting the actual price.

|11.2.06 @ 9:47AM|#

thoreau|11.2.06 @ 9:50AM|#

joe-

You know, I actually have a lot of sympathy for that position. I know, I know, time to hand in a decoder ring. The problem is making the system work. The system we have has all sorts of effects that I'm sure you would deem unfair, they're just hidden a bit better in the tangle of paperwork. The complexity doesn't really get rid of unfair outcomes, it just makes the whole thing more expensive, more prone to abuse, and a greater drag on economic efficiency.

|11.2.06 @ 10:12AM|#

"I'm still liberal enough to think that someone who gets $2.5 million deposited in their account because a stock split, or because their great uncle Harvey gave up the ghost, should pay more taxes than someone who gets handed a check for $878.93 every other Friday afternoon, for digging ditches for 80 hours."

The Torah therefore warns the judge, "Do not give special consideration to the poor." A judge has no right to have pity on the poor. If there is a dispute between a wealthy person and a poor man, the judge should not think, "This one is wealthy and the other is poor. Let me decide in favor of the poor man since both I and the wealthy person must give him charity in any case. If I decide in favor of the poor person it would be the same as giving him secret charity and I will support him in an honorable manner."

|11.2.06 @ 10:19AM|#

Thoreau: The self-employed would still have it just as complicated as they do now, minus some exemptions.

Besides, giving tax breaks as incentives is a relatively low-maintenance way of encouraging beneficial activities. Sure, it complicated the tax code, but it's still more efficient than establishing programs to do the beneficial activities by the government's own hand. After many decades of this, the system may be overcomplicated and due for a simplification, but removing this tactic from the government's repertoire will just lead to substitution of worse ones.

ChrisO|11.2.06 @ 10:21AM|#

Once you start rigging the system with deductions, quite obviously most of those deductions are going to favor the folks with the most political pull--i.e., the rich.

|11.2.06 @ 10:23AM|#

joe:

I shouldn't have to point out that 15% of $2.5 million is a hell of a lot more than 15% of $878.93.

But what do I know... I hate the working class.

Larry A|11.2.06 @ 10:24AM|#

I'm still liberal enough to think that someone who gets $2.5 million deposited in their account because a stock split, or because their great uncle Harvey gave up the ghost, should pay more taxes than someone who gets handed a check for $878.93 every other Friday afternoon, for digging ditches for 80 hours.

So do I. Under a flat 23% income tax with no exceptions the stock split would be taxed $575,000, Uncle Harvey will already have paid $575,000 on his income, and the ditch digger would end up paying $2,628 per year. Even over a thirty-year career that totals only $78,840.

Once you start rigging the system with deductions, quite obviously most of those deductions are going to favor the folks with the most political pull--i.e., the rich.

Absolutely false. Every single one of the deductions benefits the poor. It says so on the label, and we know Congress wouldn't lie.

|11.2.06 @ 10:27AM|#

thoreau,

There are all kinds of tax reforms I'd like to see; lowering the FICA rate and eliminating the income cap, for example. I'm not a defender of the status quo.

But the poor spend all of their non-housing money on things that would be subject to a sales' tax; the middle class spend most of that money that way; and the rich spend a much smaller amount.

I cannot see a system that would tax 80% of a poor person's income at 23%; 60% of a middle class person's income at 23%; and 20 of a rich person's income at 23% as anything but grossly regressive.

And yes, I pulled those exact figures out of my butt.

|11.2.06 @ 10:28AM|#

Russ R,

I shouldn't have to point out that taking 15% of a ditch digger's income is going to hurt his family a lot more than than taking 15% of a multimillaire's income.

|11.2.06 @ 10:37AM|#

joe,

Oh right, I forgot... "from each according to his ability"

Pardon me for finding it unreasonable that more that 40% of my earnings go to the government (and I'm barely a multi-thousand-aire).

|11.2.06 @ 10:40AM|#

Sorry, I neglected to mention that I live in Canada... before anybody thinks I'm exaggerating about the 40% number.

|11.2.06 @ 10:51AM|#

"The complexity doesn't really get rid of unfair outcomes, it just makes the whole thing more expensive, more prone to abuse, and a greater drag on economic efficiency."

Nicely stated.

-------------

"Besides, giving tax breaks as incentives is a relatively low-maintenance way of encouraging beneficial activities. Sure, it complicated the tax code, but it's still more efficient than establishing programs to do the beneficial activities by the government's own hand. After many decades of this, the system may be overcomplicated and due for a simplification, but removing this tactic from the government's repertoire will just lead to substitution of worse ones."

Umm, nothing personal, but...
BULLSHIT!

|11.2.06 @ 10:58AM|#

"the flat tax would overwhelmingly benefit wealthy people"

Are we in bizarro land that "pay the same percentage" (whether on income, assets, or consumption) now equals "overwhelmingly benefit"?

Don't FUD up the issue by playing the classenvy card. Yes, those with lower incomes spend a proportionally higher percentage of their income on "necessities". Problem is, however you try and compensate for that, it always ends up a complicated, hole-ridden mess. Like it is now.

|11.2.06 @ 10:59AM|#

Joe, I'm sure you know more about the Fair Tax than to claim the poor will pay taxes. The proposal allows for a rebate check up to the amount a poverty line income would spend on sales taxes. Please stop polluting the debate with lies.

|11.2.06 @ 11:03AM|#

Ironchef, I don't mind lowering rich people's rates from 39% to 23% or so. I just don't expect that kind of reform to pass. And the savings from not having to verify income with the Fair Tax would never accrue with a flat tax..

|11.2.06 @ 11:05AM|#

"Are we in bizarro land that "pay the same percentage" (whether on income, assets, or consumption) now equals "overwhelmingly benefit"?"

It's not about how much you pay, it's all about how much the government decides to permit you to retain. What this country needs is a Ministry of Income Equalization.

P Brooks: Nothing personal, but FISHSTICKS! YOU ARE AN ARMCHAIR! GO EAT AN ARTICHOKE!

|11.2.06 @ 11:22AM|#

That's "armchair economist" to you.

The beneficiaries of complexity in the tax code are accountants and attorneys; and, most importantly, politicians and their lobbyist spawn.
Think Schumpeter- how much might we benefit from destroying the industry which has arisen to preserve and interpret the mysteries encased in those 9500 pages of tax law, and allowing those assets to be reallocated into the econpomy?

|11.2.06 @ 11:25AM|#

Dratted keyboard- that's "economy"

The Wine Commonsewer|11.2.06 @ 11:39AM|#

All advocates of the fair tax are on drugs (or off their drugs). The idea is fine. The reality is this is modern America. You give those feds a sales tax and I guarantee that in short order you'll be paying both sales tax and income tax.

The other drawback to the fair tax is it hits the underground economy way too hard. :-)

|11.2.06 @ 11:49AM|#

I'm a fan of the Fair Tax, at least in theory. There are certainly huge hurdles to overcome, but once understood properly, the practical problems associated with the actual implementation are surmountable. The greatest resistance I found is the non-progressive nature of the tax. Regardless of the real benefits to low-income earners, the fact that it doesn't attempt soak the rich is a major block for some.

The fact that poor people spend a greater percentage of their earnings on basic necessities is a strength of the Fair Tax, imo, since they will not have to pay towards any taxes at all(including the ones now hidden in the price of every product)for the great majority of their purchases. Get more, spend less sounds like a good thing for the poor to me.

Meanwhile, evertime a rich person throws a party or buys a fur coat from their discretionary income, they pay. You could also make the argument that the rebates which everyone receives should go only to the poor, which I'm fine with, although you couldn't really call it the "Fair" tax anymore.

Of course, I don't believe the government will ever pass the Fair Tax as intended. It will never abolish income taxes or the IRS. Simply put, the true implementation of the Fair Tax would seriously undercut government power, and we all know that's not going to happen.

TWC is right, it's much more likely that we'll end up with both national sales and income taxes. Of course, we could always use the sales tax as our share that the UN wants us to pay. Then it would be an international sales tax, which sounds so sexy and continental.

|11.2.06 @ 11:51AM|#

"The beneficiaries of complexity in the tax code are accountants and attorneys."
So true.

The biggest beneficiary of our present income tax system is Big Brother, who, under the guise of tax collector, gets to snoop into every nook and cranny of every taxpayers life. Paying taxes is bad enough, but reporting every move you make and where the money came from makes us all less free.

The Wine Commonsewer|11.2.06 @ 11:51AM|#

P Brooks is right about who benefits from a complex tax code. Besides the government.

One major irritation to me as a tax guy is the 1031 exchange laws which were codified by a Supreme Court ruling. Here you have a complex set of rules that allow you to sell a commercial property and buy another one without paying any income tax and it is called a like-kind exchange. There is no exchange, you sell your apartment building and buy another one. As long as you don't touch the money it's cool and you don't pay tax.

The original law was intended to cover actual swaps where people physically traded one asset for another and had no cash to pay any tax that might result from the dispostion of an asset.

There is an entire industry that exists for the sole purpose of facilitating the facade of the 1031 exchange.

I think CONgress leaves it in place for the same reason big corporations offer rebates instead of price discounts. Not everyone will remember to mail in the rebate and not everyone will take advantage of the exchange scam.

|11.2.06 @ 11:58AM|#

And if it's unpopular, is it a "pop culture" reference?

"Popular culture no longer applies to me."
-Art Brut
(The first two words are each spit out like they are dirty shameful things.)

The other drawback to the fair tax is it hits the underground economy way too hard. :-)

Doesn't it create a new underground economy? Rather than workers whose income is not reported, goods are sold in a black market akin to the illegal drug trade.

|11.2.06 @ 12:00PM|#

The whole point of a consumption tax is to tax what is consumed rather than what is earned. If the guy making $2.5mil this year only spends $500,000 this year, it's not like the $2mil is going to be untaxed forever. It's going to be taxed once it's spent. And while it's sitting in savings it will probably be collecting a high rate of return. Therefore, the time discounted amount taxed on the $2mil in savings is probably higher than if it were taxed immediately.

It's also a question of fairness. All the trust fund cases are essentially paying 15% or less on the earnings off their trust fund, while the working stiffs are paying a lot more on their earned income. A lot of the people in Congress are trust fund cases, and a lot of trust fund cases have little concern about the level of income taxes and FICA taxes because that's such a small amount of their income. (Of course, there is the transition problem mentioned earlier since all money in current trust funds has been taxed once.)

|11.2.06 @ 12:04PM|#

I teach tax theory, so to clear the record on a few things:

Joe: a stock split is just symbolic and administrative and does not represent an increase in wealth. Warren Buffet doesn't do it with Bershire, so its share price is now over $100,000.

James: If your uncle drops dead and gives you $2.5 million, you would pay zero taxes on that under the fair tax (no estate/death taxes) and zero on the future investments earnings. So Joe is right that the wage guy would pay more in taxes.

Sean: Ron is correct that the Fair Tax would double tax retirees on their IRAs, especially Roth IRAs. I pay taxes on income now to put the money into a Roth IRA, so that I can spend it tax free on stuff when I retire. If when I retire I have to pay 23% more for stuff, then I will be able to buy a lot fewer bags of stuff.

Finally, on the administrative costs and auditing of sales taxes, they are easily collected now, but that is in part because we have an income tax audit system in place that makes it fairly easy to keep people on the straight and narrow with sales taxes. Of course, plenty of economic activity currently takes place under the table, but the vast amount of our economic output is from large firms that could never hold together the conspiracy necessary to consistently cheat on taxes. Guys putting roofs on your garage over a weekend don't pay taxes on their income now and won't pay it on their sales if we switch to that. But Microsoft, Google, Toyota and Starbucks do and will continue to.

|11.2.06 @ 12:25PM|#

Russ R,

When you're a little more grown up, it might be possible to discuss these issues with you reasonably. I'll look forward to it. Buh bye.

Ironchef,

"Yes, those with lower incomes spend a proportionally higher percentage of their income on "necessities". Problem is, however you try and compensate for that, it always ends up a complicated, hole-ridden mess."

In other words, you don't actually have a principled rebuttal for the statement that equal tax rates hurt the poor more than the rich. You're just throwing up your hands and declaring that which you don't want done, impossible to do. How convenient.

James Ard, I know next to nothing about the "Fair Tax." I was responding to a comment about flat taxes.

thedifferentphil, I used the example of a stock split as a shorthand term for a great windfall from an investment. No, I didn't walk through every detail of how a stock split benefits an investor; nonetheless, I think my point was clear enough.

|11.2.06 @ 12:37PM|#

joe:

"When you're a little more grown up, it might be possible to discuss these issues with you reasonably. I'll look forward to it. Buh bye."

In other words, you don't actually have a principled rebuttal for the fact that people who aren't "multi-millionaires" are forced to cough up a disproportionate percentage of their earnings under the progressive taxation "income redistribution" system.

|11.2.06 @ 12:39PM|#

Why is it that Libertarians are so anti-tax? If we don't have high tax rates, the government can't afford to maintain a large military (which we need for conquering other nations and assimilating their population) and pay for the city improvements that help build wonders... and without these, how else can we score victory points?

You'd think libertarians had never played Civilization... I tell you...

|11.2.06 @ 12:40PM|#

All realistic flat tax proposals I have seen have carried an exemption on the first X thousand of income ($20,000, for example). Under a $20,000 exemption, if the flat tax was 17%, you would have the various rates:

Earn $20,000 - pay $0 (0%)
Earn $25,000 - pay $850 (3.4%)
Earn $30,000 - pay $1700 (5.7%)
Earn $40,000 - pay $3400 (8.5%)
Earn $100,000 - pay $13,600 (13.6%)
By the time you get to $1 million, the rate would 16.7% and would continue to inch up to 17%.

I am not arguing that a $20,000 exemption and a 17% rate are the "right" numbers. I'm just trying to demonstrate that by controlling those two numbers, the flat tax can indeed be progressive, not overbearing on the poor, and once the code is simplified, probably more effective at bringing in as much revenue as the current system with considerably less complexity.

I haven't thought deeply about these issues, but this makes a certain amount of sense to me. And in the spirit of virtually always agreeing with Thoreau, I'm willing to be proven wrong...

|11.2.06 @ 12:57PM|#

mccleary-

Are you trying to wreck the "debate" by providing a simple, sensible example?

To what depths will these crafty Empiricists not sink?

Paul|11.2.06 @ 1:18PM|#

debate, actually showed signs of life defending the national sales tax.

I don't know much about this particular plan or Harris' defense of it, but speaking in general for a national sales tax, it's very easy to defend, because it's the near silver bullet answer in making a tax system which is fair, can be easily adjusted to avoid being regressive, keeps government busy bodies out of our private business, preserves freedom of association, and allows the government to actually make revenue on black market earnings when black market earners make legitimate purchases.

Income taxes are immoral, period.

Paul|11.2.06 @ 1:21PM|#

I am not arguing that a $20,000 exemption and a 17% rate are the "right" numbers. I'm just trying to demonstrate that by controlling those two numbers, the flat tax can indeed be progressive, not[..]

The problem with a 'flat tax' is that it's still an income tax. It still allows the Government to pry into your associations and free dealings with other members of society. It also allows the government to monitor the dizzyingly complex sources of incomes, and define them as such. In addition, loopholes will still abound and the wealthiest people will still be able to take advantage of these loopholes by simply benefitting from streams of "income" which can be defined as "non-income".

|11.2.06 @ 1:24PM|#

My idea of a fair tax is this: On April 15 of each year, I sit at my desk and decide what portion of my income it would be fair for the government to have. Then I write a check for that amount and send it to a little old lady in Washington who processes it for the Treasury.

I like the idea of a flat tax but with no payroll withholding. Just a nice big check to remind the taxpayer exactly what it is he's giving up.

|11.2.06 @ 2:07PM|#

Russ, you must be in Alberta, here we're paying 49% on every dollar of income over about $100g US, plus 14% of sales tax.

Paul|11.2.06 @ 2:07PM|#

I like the idea of a flat tax but with no payroll withholding. Just a nice big check to remind the taxpayer exactly what it is he's giving up.

Progressives hate that because it has been proven that the electorate becomes decidedly unhappy when they're made directly aware of their total tax liability, so don't expect that to ever happen.

|11.2.06 @ 2:10PM|#

Pity the poor Floridians. They really have a great choice here.

Bill Nelson is a likeable doofus who seems to be an economic illiterate. There is no populist scheme that is so nutty that he will not get behind it.

On the other hand the Senate is probably a good place for him. He certainly can't do as much harm there as he did when he was Florida's Insurance Commissioner.

Any number of Republicans probably could have beaten him. Bill McCollum or Jeb* himself come to mind.

But the party chose Katherine Harris once again proven that its followers are batshit insane.

*Yes I know Jeb doesn't really want it but his name was mentioned at one point as a "stop Crazy Katherine" move.

|11.2.06 @ 2:11PM|#

Or, perhaps, we're going about this all wrong. Maybe each year we should have, say, an Americathon, when our public officials entertain us and beg us for money. If we're moved by their pleas and pleased by their movements, then we'll give. Sounds fair to me.

You know, is Americathon available on DVD? It should be.

|11.2.06 @ 2:22PM|#

Nope, I'm in Ontario, though that may change as my income grows.

What the tax progressives forget is that the individuals with the highest incomes are also the ones with the greatest ability to relocate to lower tax jurisdictions.

As luck would have it, my employer is a global firm with offices in countries that don't impose personal income taxes.

|11.2.06 @ 3:13PM|#

Aren't fairs taxed already? Would the tax apply to county fairs, state fairs, or what?

|11.2.06 @ 3:24PM|#

"... no payroll withholding. Just a nice big check to remind the taxpayer exactly what it is he's giving up."

There are apparently a vast number of people who believe the income tax is just a great big, wonderful Christmas Club scheme.

A monthly bill for Government Services might demonstrate the elasticity of demand for the nanny state.

|11.2.06 @ 3:44PM|#

Would Libertarians PLEASE get off the "taxation equals theft" schtick? Look, there has NEVER EVER been any society/culture/whatever in recorded history where you are not ending up paying taxes in some form. If you're not paying taxes to the official government, you're paying protection money to the Mafia. Or the warlords come by and say "nice goat you've got there, think I'll take it." If you don't like taxes, move to Somalia.

|11.2.06 @ 4:18PM|#

"My idea of a fair tax is this: On April 15 of each year, I sit at my desk and decide what portion of my income it would be fair for the government to have. Then I write a check for that amount and send it to a little old lady in Washington who processes it for the Treasury."

Or we could come up with some way to assess how much the services the government provided you over the previous year actually costs...and base your payment on a more or less realistic estimate of your use of those services. Your system is like me getting to decide how much I pay the mechanic after he fixes my car without taking his labor or material costs into account. I wanted the car fixed, I used his service, I am not the only party involved in determining the fair price.

|11.2.06 @ 4:41PM|#

MainstreamMan,

My system doesn't allow my money to be spent by crazy people, either. Or, if it is spent by crazy people, I can withhold it the next year as punishment. This year, for instance, I don't plan to pay for the war. I don't feel that I'm getting enough value out of that investment.

All in all, I like the Telethon for America idea the best. If the things that need money are worthy, I'm sure they could raise enough money to fund a moderate-sized government. Assuming the singing and dancing talent is good enough, that is. But who should host it? Hmmm. . . . "Send in the Clowns" would be a good song for that event, too, now that I think about it.

|11.2.06 @ 5:00PM|#

"My system doesn't allow my money to be spent by crazy people..."

ProL: The solipsist who accuses others of being crazy and spending his money...

;^)

|11.2.06 @ 5:28PM|#

My hallowed, solely existing self, you're right! This is all my fault! How will I live with my all-encompassing oneness?

You know, there's a fine line between solipsism and narcissism.

We could just get a fifty-page list of things to allocate our money to, I suppose. If I had to pick something beyond roads and defense, I guess I could opt for flying car research or something of particular interest to me. If I have to give the government my money, anyway.

|11.2.06 @ 5:45PM|#

I want to designate my tax contribution toward research on auto-eroticism in teenage girls. And I want prompt and detailed reportage.

|11.2.06 @ 7:21PM|#

Screw all of you so-called libertarian idealists. The Sales tax is a real option that would result in less government. If the posters here were in charge in 1774 we'd be speaking english today. John Linder is an unlikely revolutionary, but damnit, scoffing at his plan is a chicken-shit thing to do.

|11.2.06 @ 8:26PM|#

"Sales tax is a real option that would result in less government."

Seems obvious to me.

|11.2.06 @ 8:40PM|#

I have a cunning plan. Instead of taxing each of us, let's just gang up on a big company and force it to fund the U.S. government. Say, Coca-Cola. Yeah, that would be wrong, but it gets all of us out of paying our taxes. Though I daresay that Coke consumption would likely become mandatory as a consequence. But that's a quibble.

|11.2.06 @ 9:08PM|#

James Ard:

"If the posters here were in charge in 1774 we'd be speaking english today."

Huh?

|11.3.06 @ 5:31PM|#

thedifferentphil, I used the example of a stock split as a shorthand term for a great windfall from an investment. No, I didn't walk through every detail of how a stock split benefits an investor; nonetheless, I think my point was clear enough.

Well, no, joe-- that "shorthand" bespeaks a damning ignorance of finance.

|11.4.06 @ 10:56PM|#

The comment that if we had a national sales tax then a lot of economic activity would move under the table is on target if the national sales tax becomes too high. But a national sales tax small enough would not necessarily induce this effect, just as state sales tax don't seem to shift that much activity under the table. Generally speaking, and the principled arguments aside from both sides, keeping taxes low enough actually leads to more taxes collected and higher tax revenues. This was the lesson Andrew Mellon taught us when his slashing of taxes in the 1920's led to a 300 million increase in tax revenues.

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