Nice, short piece on tax reform

Originally posted by Palynka
Try reading. This part for example:

Now [b]if a majority of Americans are still willing to pay, then the programs stay. That's democracy.[/b]

Oh yeah, democracy, that's where the minority that have the right to choose have that right trampled by the biggest gang.

1. Abolish the IRS
Abolish the IRS? Who's going to collect taxes?

2. Cancel all forms of tax currently in place
Okay. So no income taxes, corporate taxes, payroll taxes, sales taxes, property taxes, or excise taxes. Hmm . . . that doesn't leave many options.

3. Initiate a flat 10% tax on ALL new goods and ALL services
3. I thought we were eliminating sales taxes (see 2). Also, why would you put all the tax on the final end rather than use a VAT? The latter is generally thought to be far more efficient, and it distributes the tax burden more evenly between consumers and producers.

Also without the IRS, why wouldn't we all just tax evade?

4. Increase military spending
Aren't you supposed to be closing deficits? So far you've decreased your revenues massively and your expenses by next to nothing in comparison.

5. Take over ALL oil fields in the world
Well, that won't cost much . . .

6. Regulate oil distributions at one set price
Monopolize oil. This is starting to sound like the plot of a bad James Bond movie, or maybe more like a bad Austin Powers movie.

7. Upon establishment of the distribution system, reduce military spending
You're going to have to reduce military spending to near zero to close the deficit given your tax policy. Since you're basically proposing an imperialist solution, maybe you should research how much past empires have had to spend on their armies to maintain power.

8. Establishment of alternative energy solutions
Right, simple as that. While we're at it, let's design a magic production wand that supplies infinite goods with no input costs.

9. Mandated oil independent passenger vehicles within five years
Uh oh, the oil monopoly is shooting itself in the foot.

10. Mandatory subway systems for every major (350K+) city within ten years
And finish the whole silly thing off with the largest public works project since the interstate highway.

Tell me. Are you a member of the Tea Party? Then again, how could you be. Based on recommendations (4)-(10) you're clearly a socialist dictator.

Originally posted by FreakyKBH
It's about time someone had the good sense to ask me how to fix things. I commend your bravery, sir/ma'am/concerned and conscientious citizen. To wit (not to be confused with twit, mind you)...

If elected, I promise to initiate my 10-step road to recovery:
1. Abolish the IRS
2. Cancel all forms of tax currently in place
3. Initiate a flat 10% tax o ...[text shortened]... for every major (350K+) city within ten years

Thank you and God bless America.
Good night.

I like the idea of getting rid of the current tax system (and all of its complexities and loopholes) and replacing it with something simple. But it probably would have be a lot more than 10% - and there would be so many special interests howling that we'd all need to wear earplugs for the foreseeable future. But maybe we need a president who'll make such a proposal and tell all critics to "bring it on".

The idea of having the military take over all the oil fields might run into a few snags. I suspect a few members of Congress might raise objections. And I suspect that the nations holding those oil fields won't be greeting us as liberators.

Mandating oil-independent passenger vehicles and subway systems in every major city would be laughed at by everyone in the GOP (and probably most Dems as well) -- BUT it would probably still represent the best idea on alternative energy that either party has come up with so far to date. And perhaps your mere proposal would scare the private sector into getting serious about products that use alternative energy or conservation technologies.

Originally posted by Melanerpes
I like the idea of getting rid of the current tax system (and all of its complexities and loopholes) and replacing it with something simple. But it probably would have be a lot more than 10% - and there would be so many special interests howling that we'd all need to wear earplugs for the foreseeable future. But maybe we need a president who'll make such ...[text shortened]... to getting serious about products that use alternative energy or conservation technologies.

You're too nice, Mel.

Originally posted by Wajoma
Oh yeah, democracy, that's where the minority that have the right to choose have that right trampled by the biggest gang.

Pretty much what the founding fathers had in mind. Idea continues to be extremely popular, even among conservatives. If you want it to change, you'll need to persuade lots of people to change their views about this.

Originally posted by telerion
You're too nice, Mel.

He put forth more new ideas in one post than you'll hear from the GOP or conservatives in a year.

Originally posted by telerion
1. Abolish the IRS
Abolish the IRS? Who's going to collect taxes?

2. Cancel all forms of tax currently in place
Okay. So no income taxes, corporate taxes, payroll taxes, sales taxes, property taxes, or excise taxes. Hmm . . . that doesn't leave many options.

3. Initiate a flat 10% tax on ALL new goods and ALL services
3. I th ...[text shortened]... could you be. Based on recommendations (4)-(10) you're clearly a socialist dictator.[/b]

Abolish the IRS? Who's going to collect taxes?
The taxes are collected by the folks collecting the cash: the merchants and service providers.

Hmm . . . that doesn't leave many options.
Except for all those folks buying stuff.

I thought we were eliminating sales taxes (see 2).
Nope. We're throwing out the entire system and pushing the re-start button.

Also, why would you put all the tax on the final end rather than use a VAT?
Too easy to hide stuff: just like the current system.

Also without the IRS, why wouldn't we all just tax evade?
What: you're planning on not buying anything in the future?

Aren't you supposed to be closing deficits? So far you've decreased your revenues massively and your expenses by next to nothing in comparison.
One, a 10% tax on goods and services--- paid by every consumer--- would far outstrip the current collections underway.
Two, the temporary increase in spending would be the equivalent of sowing seeds for the future.

Well, that won't cost much . . .
Really? One punctuated military action instead of the current henpecking that's going on? What do you prefer: a drip-by-drip torture or overwhelming flood? I say flood them. The cost will be far less in the long run.

This is starting to sound like the plot of a bad James Bond movie, or maybe more like a bad Austin Powers movie.
Except no one has to shave their scrotum for this one.

You're going to have to reduce military spending to near zero to close the deficit given your tax policy.
You haven't looked at the numbers, apparently.

Right, simple as that. While we're at it, let's design a magic production wand that supplies infinite goods with no input costs.
You'd be amazed at what folks are capable of accomplishing, regardless of the obstacles.

Uh oh, the oil monopoly is shooting itself in the foot.
You're missing the point of our distribution system, as well as the five year remedy.

And finish the whole silly thing off with the largest public works project since the interstate highway.
Yeah: how'd that work out for us?

Originally posted by FreakyKBH
It's about time someone had the good sense to ask me how to fix things. I
4. Increase military spending in order to:
5. Take over ALL oil fields in the world
6. Regulate oil distributions at one set price
7. Upon establishment of the distribution system, reduce military spending, earmarking those funds for:
8. Establishment of alternative energy sol ...[text shortened]... for every major (350K+) city within ten years

Thank you and God bless America.
Good night.

You lost me here Freaky. Why not just take over the world in the name of "democracy"? This sounds more like a one world order than the US taking care of its own business. It seems you enjoy being in nasty places like Iraq but for the life of me I don't know who else does. It not only is expensive as "H-E-double toothpicks" to police the world but it also makes the US prone to wars around the globe and, worst of all, it costs lives. This failed policy no longer makes any sense, not that it ever did to begin with.

I would first propose converting cars to natural gas and then DRILL, DRILL, DRILL for both natural gas and oil in and around the US. The US is on recent discoveries of tons of natural gas. This would afford the US time in the short term energy needs. Long term the US should begin building nuclear power plants. Longer term goals perhaps should be the development of nuclear fusion energy sources.

Of course, the current administration is still caught in the whole cap and trade mode. It is then mind boggling how they have all but turned their backs on carbon free nuclear power. It almost seems as if they are after the revenue more than alternatives that will free us of carbon emissions. Crazy, huh? In fact, natural gas burns cleaner than oil yet all we here is about "clean coal". Although natural gas produces carbon emissions it is far better than burning oil or even crazier notion of "clean coal" which is the worst carbon emitting offender.

Instead of policing the entire world perhaps the troops can be brought home so that they can police their own BORDERS!! God forbid we ENFORCE the laws on the books and take care of business within their own borders. Yep, to get elected all one has to do is offer a sane energy plan, a sane immigration plan, and a sane fiscal policy to balance the books.

Originally posted by Melanerpes
[b]I like the idea of getting rid of the current tax system (and all of its complexities and loopholes) and replacing it with something simple. But it probably would have be a lot more than 10% - and there would be so many special interests howling that we'd all need to wear earplugs for the foreseeable future. But maybe we need a president who'll make such a proposal and tell all critics to "bring it on".

It most certainly can be done. To avoid hurting the "poor", however, what they can do is not impose taxes on food staples that people need to survive. I would also agree it would have to be a higher tax than 10%. Of course, the revenue saved from Americans not having to spend money to file their taxes, whether it be professional help or buying Turbo Tax software etc., would be enormous. It would also eliminate the IRS which would save literally billions of dollars a year as well as ending the looming IRS audit threats of insane penalties and/or imprisonment which the tax payers, once again, would have to flip the bill for in terms of IRS agents, court costs and incaceration.

The reasons the US does not adopt this flat tax, however, I think is because the powers that be have far to many perks with the current system. Take for example the fact that many of our leaders appear not to even pay their taxes and without reprocussions. With a flat tax, however, there is no avoiding taxation. Of course, those that do pay their taxes have endless loop holes, by design of course, that are intended to help evade taxation. Another reason I think it will not happen is control. The government becomes uneasy when people become financially independent. They then lose a certain degree of control over them and, in addition, they tend to have increased sway over their political leaders. And lastly, it is a pretty good scam to collect taxes throughout the year that over taxes the populace. They simply pocket the money and collect interst on it and during the course of the year before they mail it back on tax returns.

The taxes are collected by the folks collecting the cash: the merchants and service providers.

Sure, but these guys have an incentive to cheat the government just as much as anyone else. If nobody (e.g., the IRS) is looking over their books, why should they send any money to the government? In the end of the day, a government has to have some agency that monitors and collects taxes.

Nope. We're throwing out the entire system and pushing the re-start button.

Okay. I understand you now.

Too easy to hide stuff: just like the current system.

Well, first off, without a tax collecting agency any tax will be easy to evade, but to get to your point the VAT is actually much harder to evade than a sales tax that is collected only on final goods because in a VAT every stage in the chain of production has an incentive to monitor the tax reporting of the previous stage. If the previous stage underreports then the subsequent stage would get less credit against its taxes and would lose money. With a simple sales tax, if the merchant underreports its not like the customer is going go after them, especially if the merchants use the underreporting to lower prices.

What: you're planning on not buying anything in the future?

That's not what tax evasion means. Tax evasion is when you purposefully return less taxes to the government than law requires. What you're thinking of is called "tax avoidance" where one changes their behavior away from a higher taxed source to a lower taxed source. Even with the IRS auditing people every year, thousands still commit tax fraud. Get rid of the IRS and I don't know why anybody would take the time to give Uncle Sam money.

One, a 10% tax on goods and services--- paid by every consumer--- would far outstrip the current collections underway.
Two, the temporary increase in spending would be the equivalent of sowing seeds for the future.

I don't think you are correct at all on the first count. Even if you could manage to get every merchant to follow the rules and send in their taxes, aggregate consumption is still only 70% of GDP. Doing a quick back of the envelope partial equilibrium calculation, at 10% tax you would raise 7% of GDP in taxes. Historically, the federal government alone has collected about 18% of GDP each year. This year it's down to about 15% (Ironic, that the Tea Party is up in arms when tax collection is at its lowest in over half a century.). Even if we give your tax reform the benefit of the doubt and assume that it will lead to higher growth, GDP would have to more than double to raise the same revenue.

Really? One punctuated military action instead of the current henpecking that's going on? What do you prefer: a drip-by-drip torture or overwhelming flood? I say flood them. The cost will be far less in the long run.

I'm not arguing one military invasion strategy over another. I'm pointing out that if you wish to achieve massive deficit reductions, undertaking a campaign of world conquest is probably not the right way to start. Look at how much just the Iraq and Afghanistan wars are costing us now. Then multiply it by a factor of 100. There's no way we could pay for it ourselves, and nobody would lend us the money either for obvious reasons.

Except no one has to shave their scrotum for this one.
I will give you points for that.

You haven't looked at the numbers, apparently.
I'd love to see these numbers, whatever they are since you can't possibly be referring to the federal budget.

You're missing the point of our distribution system, as well as the five year remedy.
I must be because I had thought that you were going to finance the unprecedented military expenditures in your plan by repaying with oil revenue. The problem is that you need a lender for that scheme to work, and nobody would lend that kind of money to the US on a good day, much less if we are about to fight them.

Yeah: how'd that work out for us?

The highway system has been fine, but you can't argue that it's been deficit reducing. Besides don't you think that if installing subways in every 350K+ city were cost effective, you'd already see that happening regularly? Rails are expensive and require many commuters like in large cities to support them. Even in those cases they are usually heavily subsidized.

Originally posted by telerion
[b]The taxes are collected by the folks collecting the cash: the merchants and service providers.

Sure, but these guys have an incentive to cheat the government just as much as anyone else. If nobody (e.g., the IRS) is looking over their books, why should they send any money to the government? In the end of the day, a government has to have some a ...[text shortened]... to support them. Even in those cases they are usually heavily subsidized.[/b]

Ok, now YOU'RE being too nice by responding...

Originally posted by telerion
He very much acknowledges that both in the interview and elsewhere. Gale's opinion is that cutting spending on the big programs is going to be politically infeasible so we have to turn to the only other choice available: increase taxes.

My opinion: They should raise taxes. Econ 101: demand is downward sloping. Raise the price of government services ( ...[text shortened]... giving ourselves a free lunch (*shoots a wicked glare at all the Baby Boomers in the room).

Do not forget the disconnect between who gets taxed and who pays on-site at the point-of-sale for government services. Demand being downward sloping would matter more in a free market than in a government-distorted "tax here" and "subsidize there" scenario. Pay-as-you-go would tie political costs to political benefits. There should also be a requirement that in a deficit over a certain percent where there is at least a certain level of growth (or above a certain level of gdp decline) that we also legislate movement towards balanced budgets.

I heard a great quote once:

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. "

Originally posted by Melanerpes
I like the idea of getting rid of the current tax system (and all of its complexities and loopholes) and replacing it with something simple. But it probably would have be a lot more than 10% - and there would be so many special interests howling that we'd all need to wear earplugs for the foreseeable future. But maybe we need a president who'll make such ...[text shortened]... to getting serious about products that use alternative energy or conservation technologies.

Didn't forbes have a 15% idea? I think that included income taxes only. I think with a 15% flat income tax and flat value-added-tax we could vastly limite distortions and increase collections.

On the other side of the equation, we have baby boomers set to retire and increasingly needing medicare benefits. Another problem is of course that we are still spending trilliongs in Iraq and Afghanistan, prior political promises notwithstanding. Raise that retirement/medicare age. Reduce involment in Iraq.

I don't think there's too much need for additional comments on my part about the whole taking over all oil fields or mandating instant gas-free vehicles... I don't like rolling my eyes. I'll just leave it at the fact that we have plenty of excessive subsidies and incentives for fuel-independent transportation as it is.

Originally posted by whodey
You lost me here Freaky. Why not just take over the world in the name of "democracy"? This sounds more like a one world order than the US taking care of its own business. It seems you enjoy being in nasty places like Iraq but for the life of me I don't know who else does. It not only is expensive as "H-E-double toothpicks" to police the world but it also ...[text shortened]... ne energy plan, a sane immigration plan, and a sane fiscal policy to balance the books.

This sounds more like a one world order than the US taking care of its own business. It seems you enjoy being in nasty places like Iraq but for the life of me I don't know who else does. It not only is expensive as "H-E-double toothpicks" to police the world but it also makes the US prone to wars around the globe and, worst of all, it costs lives. This failed policy no longer makes any sense, not that it ever did to begin with.
Essentially, we are the world police. Every where NATO sends us, we go--- bigger than anyone else. We are paid mercenaries, not necessarily protectors of freedom.

While we still have some remnants of strength, why not put it to good use?

Originally posted by Melanerpes
Pretty much what the founding fathers had in mind. Idea continues to be extremely popular, even among conservatives. If you want it to change, you'll need to persuade lots of people to change their views about this.

Really? Do yourself a favor and actually read what they had to say.