Wednesday, February 22, 2006
Income Tax, SSec Tax, Death Tax, Medicare Tax, Breathing Tax, Thumb Tax, Tax, Tax, Tax!
A tediously boring but comprehensive review from the Heritage Foundation of some of the myths of tax policy propagated in the last 30 years.
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7 comments:
My goodness America, is simple math for Allah's sake and I shouldn't even be explaining this. It's always a tax cut for the rich because they always pay the most morons. How the hell can you give a tax cut to the poor? They don't even pay!!!!!
Taxes are never the answer. Look at Canada. I don't even need to explain that, that's why you have this conservative "revolution" there now (although I don't think it'll last).
The problem is that feelings trumph logic every time when it comes to a mass of people (e.g. the voting public). Math is hard, calling Republicans evil is easy. Our last best hope would seem to be Bush ramrodding through a real tax change (e.g. flat tax, consumption tax). I'm afraid that by the time the lawmakers are through with any such plan, though, there would be enough exclusions and variations to require just as many lawyers and accountants as the current system. From the article, I'd actually like to see the absolute tax burden data as well as the relative data. Just from the data shown, it seems easy to make the argument that tax rates don't really matter that much. We've had some pretty broad economical swings between 1979 and 2003, but the relative tax burden has been a pretty steady slope.
I think the point we should take from the article is we really need to shape policy away from having the top 10% pay the majority of revenues, precisely because the volatility in annual income in the top bracket is much higher than in the middle 80%, transfering itself into the revenue stream (and the fact that it's just unfair). Beyond that, in reality of tax revenues, the actual tax rates don't really matter that much because of our healthy population -- it just hurts everyone who has to pay, then the economy following if rates are too high.
frankly put, a flat tax is simply unfair. For me personally and mathematically. I know that's probably rare for a conservative to say, but I'm simply weary of a flat tax. It really seems like the lower and middle class will pay a good amount and the rich will .... well, 10% really is nothing to them.
It seems like the popular choices today are either a) do progressive taxation...where the rich pay the most and use the ladder to decrease it to the point where the poor doesn't even pay at all or b) overall decrease the taxation rate where everyone is comfortable. This would also require government spending decreasage.
For me personally, a) reform the tax code...sure tax cuts are nice, but let's face it. Democrat or Republican, the tax code needs reform. Probably start off with b) eliminate all these little petty taxes, like the subject of this blog is (death tax, marriage tax, blah tax). c) decrease corporate income tax rate. Isn't it true we have one of the highest corporate income tax rates in the world? Ugh. It's no wonder US-based companies for the most part are at a competitive disadvantage. d) never increase the tax rate again. Period. The 1st President that does this anytime now, I don't care if it's Republican or Democrat, I will boo them. e) eliminate savings from taxation. And this leads to a reasoning of mine that supports privatization of Social Security. People should not be taxed for their investments and savings.
Even with a flat tax, the top 20% of earners would still pay the majority of taxes. They earn 52% of all income according to the article. Its not so much that I think a flat or consumption tax are magic answers. I just hope that if we start the tax code over with something new, it could be reasonablly simple. It seems to me that between the mass of tax code and the mass of laws we are throttling our economy. So much of it is make-work. We install this mass of bureaucracy, requiring armies of lawyers and accountants to wade through it so people and companies can function. Just imagine if all those intelligent people could do something productive.
In terms of relation to our current system, I think a flat-tax is cloud 9 vs. a traffic jam. Additionally, I think a national sales tax is heaven vs. a traffic jam. Either way, let's get rid of the traffic jam.
As the research shows, if you tax less, you actually get more revenue because you stimulate that much more investment and earnings in cycle. That's why Reagan will always be my hero. So, that said, why make the rich pay more than their fair share? Do they not deserve to keep what they earned, and if not, do they deserve it less than middle class or poorer folk? I prefer to check the Robin Hood mentality in at the door, because it's a gateway to believing they (upper tax bracket) deserve different treatment than everyone else...
Gotta love the Laffer Curve.
The biggest reason for not taxing the rich at a higher rate is that it lowers the incentive for upward mobility. No class envy here...
Dr. Walter "E" Williams wrote a good column a while back illustrating how taking the earnings of people by threat of force is robbery. Essentially, the government is robbing you. It was a good column in that it illustrated exactly what a right was. I think I linked to it, but if I didn't I'll link to it later.
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