Answer to a failing economy: FAIR TAX!

[Damocles]

I would prefer to tax corporations based on wealth or market value. This would have several impacts all of them, seemingly, beneficial.

It would be difficult to cheat, because if the corporation understates its value then someone could buy them at the understated value.

Corporations would also be discouraged from grossly overstating the value of junk assets as that would increase their tax liability.

Corporations would be encouraged to only grow to the point where the economy of scale created an actual market advantage or greater productivity. Our current system encourages them to just keep growing as dividends are taxed twice while income that increases owner's/stockholder's equity is taxed only once.

It is another form of usage taxation though. Taxes on corporations are paid by the consumer. Although it has many benefits and I approve of those, it is necessary to understand that usage tax, or solely taxing corporations, is regressive in nature.

I prefer a system using this and a form of flat tax with a standard deduction. It is progressive and accounts for those who are least likely to be able to pay. It creates a natural safety net. If we use both of these we should be able to get a rather substantially stable economy, simplify our lives and benefit ourselves.

 

[Timshel]

It is another form of usage taxation though. Taxes on corporations are paid by the consumer. Although it has many benefits and I approve of those, it is necessary to understand that usage tax, or solely taxing corporations, is regressive in nature.

I prefer a system using this and a form of flat tax with a standard deduction. It is progressive and accounts for those who are least likely to be able to pay. It creates a natural safety net. If we use both of these we should be able to get a rather substantially stable economy, simplify our lives and benefit ourselves.

I might be misunderstanding your point, but...

A large corporation would not be able to pass taxes paid on unproductive capital/value to the consumer, because smaller/leaner competitors would not pass that tax to consumers.

How is it regressive? I am not arguing that this should be the only method of raising revenue. There would, probably, still be a need to tax individuals.

 

[Damocles]

I might be misunderstanding your point, but...

A large corporation would not be able to pass taxes paid on unproductive capital/value to the consumer, because smaller/leaner competitors would not pass that tax to consumers.

How is it regressive? I am not arguing that this should be the only method of raising revenue. There would, probably, still be a need to tax individuals.

It is regressive if it is the only form of taxation, and small corporations have to pass off costs to consumers or they go out of business. Corporate taxes are always passed to the consumer or there is no profit. Too often people say, "Well, smaller corps couldn't because blah, blah." They have to in order to make money. Nobody is in business to lose money. Corporate taxation is simply hidden usage tax.

 

[FUCK THE POLICE]

Every foreign corporation in the WORLD would be coming HERE because NO TAX !

And Dixie, what happens when other countries eliminate their corporate income tax in response? Where does that leave us? Exactly where we were before, except with higher taxes on individuals to make up for it.

 

[FUCK THE POLICE]

This point is incorrect. People are still motivated to earn more because of the benefit of the extra income. They reap a tangible benefit in the extra cash they have to spend. An income tax only discourages earning that extra dollar if it is highly progressive. If it is flat then the motivation to earn dollar one would be the same as it is to earn dollar one million and one.

The effect isn't large until the tax goes above 50%.

 

[FUCK THE POLICE]

It is regressive if it is the only form of taxation, and small corporations have to pass off costs to consumers or they go out of business. Corporate taxes are always passed to the consumer or there is no profit. Too often people say, "Well, smaller corps couldn't because blah, blah." They have to in order to make money. Nobody is in business to lose money. Corporate taxation is simply hidden usage tax.

Individual taxes are passed on to corporations.

The difference is that by taxing individuals and not taxing corporations, you give corporations a lot of power over what to do that the individual doesn't have. That's why I think corps and individuals should be taxed equally.

 

[Damocles]

Individual taxes are passed on to corporations.

The difference is that by taxing individuals and not taxing corporations, you give corporations a lot of power over what to do that the individual doesn't have. That's why I think corps and individuals should be taxed equally.

Which is why I said we should implement both, I like RStrings form of corporate taxation, but it should be coupled with a flat tax with a standard deduction, a naturally progressive form of tax policy. I don't believe it should be the only form of taxation, nor does Strings, I just got that idea from him as it was the only form he mentioned.

 

[FUCK THE POLICE]

By having a multitude of small taxes, you can better balance there's flaws and benefits with each other and not have as much economic distortion in one part of the economy.

But a multitude of taxes is also complicated and could get frustrating, and it's more wasteful.

One idea I still rather like is the LVT.

 

[FUCK THE POLICE]

Also, a wealth tax on corporations would discourage them from keeping wealth inside the US.

 

[Sammy Jankis]

I actually believe the fair tax is a way to implement full traceability of every purchase to the human being who buys it, so if he disobeys his id can be x'ed out of the the retail system and he will no longer be able to buy and sell.

The mark of the beast shall determine who is allowed to buy and sell.

Say no to biochipping, please.

 

[FUCK THE POLICE]

Biochipping isn't in the bill and would obviously be unconstitutional. Although it may be an effective way to enforce the tax, it's also an effective way to enforce many other things, and it hasn't been implemented. Politicians don't seriously suggest it because it would be outrageous.

 

[FUCK THE POLICE]

And if they wanted to punish you for disobeying, I imagine they'd just throw you in prison rather than do some complicated scheme like that.

 

[Cypress]

DIXIE: Fair Tax would be a national sales tax, and estimates are, it would need to be about 23% to cover current expenditures of the Federal budget. This means, everything consumable would increase in price by 23%... but... it wouldn't stay there, because of competition and free enterprise!

Now here is the huge upside to this system. No income tax, no corporate tax, no capital gains tax! You would immediately be bringing home more on your paycheck, corporations would immediately be making more profit because of less corporate tax, and the incentive to make money is restored!

LOL, priceless!

Here’s my question for the libertarian extremists, hard rightwing teabaggers, and extreme conservatives:

When you all sit around dreaming up these theoretical libertarian exercises in mental masturbation, do you all actually have any real world examples where these nutjob rightwing tax schemes are actually used successfully in a large, modern, successful, rich and egalitarian developed country?

No?

Do you all have jobs where you can just present some nutjob ideas to your boss, but actually have no real world evidence or data to corroborate your cockamamie schemes?

Here’s the countries that have a flat tax (btw, why did you wingnuts abandon that name, in an attempt to rebrand it to "fair tax"). Pretty much all third world dictatorships, or former members of the Soviet Union.

Yeah, this doesn’t give me any confidence about employing your scheme in a modern, successful and rich country like the United States: Please man, these libertarian tax schemes for the United States are dreamed up in coffee houses, and on obscure libertarian blogs. There’s no substantial real world evidence that this scheme works. Unless you consider Russian, Mongolia, and Bulgaria to be role models for a rich, successful, and egalitarian democratic capitalist country.

 

[Dixie - In Memoriam]

Well I am still looking for the downsides to the Fair Tax. It would certainly generate more commerce and business, create more jobs for Americans, and bring in at least as much revenue as we now get. I guess the downsides would be, drug dealers and crooks who don't report an income, would then have to pay taxes... Democrat congressmen wouldn't be able to conveniently "forget" to pay their taxes for 10 years, then say... oops, forgot about that! And of course, the Libs wouldn't have a convenient "class envy" tool to use for idiots who are jealous of rich people. Other than that, there isn't really much of a downside.

 

[Timshel]

It is regressive if it is the only form of taxation, and small corporations have to pass off costs to consumers or they go out of business. Corporate taxes are always passed to the consumer or there is no profit. Too often people say, "Well, smaller corps couldn't because blah, blah." They have to in order to make money. Nobody is in business to lose money. Corporate taxation is simply hidden usage tax.

You are missing the point. You can no more pass on the extra taxes due to the accumulation of unproductive capital than you could pass on any other cost.

Corp A is worth $6 million and has a tax liability of, say, $120K.

Corp B is worth $5 million and has a tax liability of $100K.

They are in all other respects equal. They both produce a million widgets a year. All other costs are the same.

Corp A can not pass on the extra $20k because it is not a cost shared by Corp B. If they raise their price over that of Corp B they lose sales. They can only pass on accumulations of wealth that make them more productive or efficient.

 

[Dixie - In Memoriam]

I would prefer to tax corporations based on wealth or market value. This would have several impacts all of them, seemingly, beneficial.

It would be difficult to cheat, because if the corporation understates its value then someone could buy them at the understated value.

Corporations would also be discouraged from grossly overstating the value of junk assets as that would increase their tax liability.

Corporations would be encouraged to only grow to the point where the economy of scale created an actual market advantage or greater productivity. Our current system encourages them to just keep growing as dividends are taxed twice while income that increases owner's/stockholder's equity is taxed only once.

Taxing corporations more, is NOT going to create or encourage new business, it will continue to DISCOURAGE it! Repeating the same mistakes with the same results is the textbook definition of INSANITY! What we are presently doing is simply NOT working, and it's time to change. I believe it is much better to tax consumerism as opposed to production. Particularly since we live in a consumer-based society that is declining in production. It just makes sense to me.

Think about the sheer number of international corporations who would LOVE to come to the US and open up shop, IF we didn't have corporate tax? The floodgates would be open, and jobs would abound! In a few years, everyone would have a decent paying job who wanted one, and the market would start to command higher wages to get good employees, putting more money in our pockets. SF says, what about when the economy tanks and people stop spending... but why would people who are making MORE money and have better jobs, suddenly stop spending? That makes absolutely no sense, and it defies logic to think that would be the case. We'll have more money in our pockets, and Americans would indeed spend it! The more we spend, the more tax we generate, and the more liberal shit we can pay for!

 

[Timshel]

LOL, priceless!

Fail! Dixie is talking about the "fair" tax not a flat tax.

 

[Sammy Jankis]

And if they wanted to punish you for disobeying, I imagine they'd just throw you in prison rather than do some complicated scheme like that.

That's expensive. Cutting you off from the ability to buy things by remote control is pretty much being fucked and it's zero cost to the state.

 

[Timshel]

Taxing corporations more, is NOT going to create or encourage new business, it will continue to DISCOURAGE it!

A corporate tax on wealth could be at a very small rate. Somewhere around 2% would produce the same revenue as current corporate taxes.

Repeating the same mistakes with the same results is the textbook definition of INSANITY! What we are presently doing is simply NOT working, and it's time to change.

We are not currently taxing corporations based on wealth or market value.

I believe it is much better to tax consumerism as opposed to production. Particularly since we live in a consumer-based society that is declining in production. It just makes sense to me.

A tax on wealth is not a tax on production. In fact, it would encourage greater productivity, because accumulating unproductive wealth would be discouraged.

 

[FUCK THE POLICE]

LOL, priceless!

Here’s my question for the libertarian extremists, hard rightwing teabaggers, and extreme conservatives:

When you all sit around dreaming up these theoretical libertarian exercises in mental masturbation, do you all actually have any real world examples where these nutjob rightwing tax schemes are actually used successfully in a large, modern, successful, rich and egalitarian developed country?

No?

Do you all have jobs where you can just present some nutjob ideas to your boss, but actually have no real world evidence or data to corroborate your cockamamie schemes?

Here’s the countries that have a flat tax (btw, why did you wingnuts abandon that name, in an attempt to rebrand it to "fair tax"). Pretty much all third world dictatorships, or former members of the Soviet Union.

Yeah, this doesn’t give me any confidence about employing your scheme in a modern, successful and rich country like the United States: Please man, these libertarian tax schemes for the United States are dreamed up in coffee houses, and on obscure libertarian blogs. There’s no substantial real world evidence that this scheme works. Unless you consider Russian, Mongolia, and Bulgaria to be role models for a rich, successful, and egalitarian democratic capitalist country.

A flat tax is a good scheme. It's not an economic panacea. And I doubt that it's any better at all than a progressive tax, economically.

And if I'm designing a system and have a choice between putting a higher rate for the middle class in there or throwing in a 30% bracket, I find going flat difficult to justify.