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Time to Retire Income Taxes?

Discussion in 'Economics, Business, and Taxes' started by georgephillip, Oct 10, 2015.

  1. georgephillip

    georgephillip Governor

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    David Kay Johnston teaches the history of taxation and tax laws, and he believes "(i)t's time to consider whether to get rid of income taxes, personal and corporate."
    "Times change. Tax systems must change with them or else their lubricating effect turns to sand, wearing down the gears of commerce.

    "Just as the Industrial Revolution transformed a nation of farmers and mechanics into a land of factory hands and office workers, so too the digital revolution and globalization are fundamentally remaking society.

    "We need for our tax system to serve our 21st century civilization and its needs, including the costs of aging infrastructure and an aging population, costs that will be borne one way or another..."

    "In ancient agrarian societies the ruler took a share of the crop. In the cash economies created by the Industrial Revolution the state taxed incomes. But is income the right tax base for the 21st century, when computer software makes it possible to wrap economic income in a cloak of tax invisibility?
    http://blogs.reuters.com/david-cay-johnston/2012/01/06/time-to-junk-income-taxes/
    "Reuters columnist David Cay Johnston is the president of Investigative Reporters & Editors (IRE), an education organization with 4,200 members. A 13-year veteran of The New York Times, David won the Pulitzer Prize in 2001 for enterprise reporting that uncovered loopholes and inequities in the U.S. tax code. He wrote the best selling tax books Perfectly Legal, which won an IRE medal, and Free Lunch. His latest book, The Fine Print: How Big Companies Use "Plain English" to Rob You Blind, will be published in September."
     
  2. Fast Eddy

    Fast Eddy Mayor

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    Ass less and less people work the tax codes become more and more out of whack. We need some out of the box thinking for our future no jobs structure.
     
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  3. georgephillip

    georgephillip Governor

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    I'm not really sure what Johnston means when he writes "...computer software makes it possible to wrap economic income in a cloak of tax invisibility". If it's true computers and globalization have the same potential to change tax rules as the Industrial Revolution, we will need some serious thinking about how to pay for government.
     
  4. Fast Eddy

    Fast Eddy Mayor

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    Computers allow complex accounting and complex business possibilities such as derivatives. Lobbyists have created a lot of deductions for those that have money, the rest of us have nothing, so taxes are our burden.
     
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  5. Woolleybugger

    Woolleybugger Mayor

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    In the era of fiat money, the government uses taxes as a means of forcing everyone to use state issued currency rather than other forms of currency. Fiat money also does not demand taxes in order to spend government dollars, there is nothing keeping the government from just issuing dollars to pay for what it needs. The fear of inflation is what keeps us from completely eliminating taxes and debt as a form of revenue for the government. If you are interested in another way of looking at this subject, check out Steve Keen, jubilees and MMT theory.
     
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  6. georgephillip

    georgephillip Governor

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    Johnston makes similar points in his 2012 Reuters blog:
    "Narrowly defining what constitutes income for tax purposes bloats the tax code. To the vast majority who earn a paycheck, defining income is simple.

    "For the very rich and for corporations, it is a game.

    "Too many of our most elegant and rigorous minds design techniques for tax avoidance and tax deferral instead of producing new wealth, imposing a huge cost on society.

    "In ancient agrarian societies the ruler took a share of the crop.

    "In the cash economies created by the Industrial Revolution the state taxed incomes.

    "But is income the right tax base for the 21st century, when computer software makes it possible to wrap economic income in a cloak of tax invisibility?

    "And why, in our digital era, must Americans file 140 million tax returns? Digital technology could eliminate 120 million of those tax forms, saving billions of dollars in both private and government spending."
    http://blogs.reuters.com/david-cay-johnston/2012/01/06/time-to-junk-income-taxes/

    It's also worth noting how tax havens increase the burden many Americans bear when it comes supporting the society that makes their earnings possible in the first place.

    According to Wiki, a 2012 report from the Tax Justice Network there's an estimated USD $21 trillion to $32 trillion sheltered from US taxes worldwide.
    https://en.wikipedia.org/wiki/Economic_globalization#Tax_havens
     
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  7. Woolleybugger

    Woolleybugger Mayor

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    Those off shore tax havens represent something akin to private kingdoms where plunder could be collected and stored out of the reach of kings and queens. All that is needed to correct this is to blockade them both physically and electronically and demand they release funds and names back to home countries. If they do not, invade them. While some think this is absurd think again. We invaded Kuwait did we not?
     
  8. georgephillip

    georgephillip Governor

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    Remember Grenada?

    "Operation Urgent Fury was a 1983 United States–led invasion of Grenada, a Caribbean island nation with a population of about 91,000 located 160 kilometres (99 mi) north of Venezuela, that resulted in a U.S. victory within a matter of weeks."
    https://en.wikipedia.org/wiki/Invasion_of_Grenada

    Your suggestion to blockade and/or invade tax havens makes more sense to me than anything I've read lately. IMHO, that would be a perfect use for the most powerful military in history.
    "The tax shelter benefits result in a tax incidence disadvantaging the poor.[45] Many tax havens are thought to have connections to 'fraud, money laundering and terrorism.'[46]Ongoing investigations of illegal tax haven abuse have produced few convictions.[47][48]

    "Accountants' opinions on the propriety of tax havens have been evolving,[49] as have the opinions of their corporate users,[50] governments,[51][52] and politicians,[53][54] although their use by Fortune 500 companies[55] and others remains widespread.[56]

    "Reform proposals centering on the Big Four accountancy firms have been advanced.[57]

    "Some governments appear to be using computer spyware to scrutinize corporations' finances."
    https://en.wikipedia.org/wiki/Economic_globalization#Tax_havens
     
  9. Woolleybugger

    Woolleybugger Mayor

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    I really don't know why we don't throw this out as a policy statement backed by all the industrialized nations that suffer from this stuff. It would take about 1 hour to overtake the Caymans. Just shut them down, period.
     
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  10. georgephillip

    georgephillip Governor

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    I think 90%-99% of all citizens of all industrialized nations would cheer; unfortunately, they don't have the same political influence as the one percent who use tax havens to provide the resources to manipulate their governments. If the US economy craters next fall as it did in 2008, that may be enough for US voters to begin demanding more from those they elect, but it is really hard for me to see how you do that by "choosing" between Democrat OR Republican in the voting booth:eek:
     
  11. georgephillip

    georgephillip Governor

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    “'The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.' -Abraham Lincoln"
    Private central bankers obviously have no reason to care who writes the laws in any country where they control the money supply. North Dakota has had a state bank for nearly a century; if a similar institution arose in a large state, it could offer mortgages for 2% with credit cards capped at 6%. I suspect market force would do the rest.
    http://www.themoneymasters.com/the-money-masters/famous-quotations-on-banking/
     
  12. Jen

    Jen meh

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    I believe that there is plenty of tax money taken in to cover the cost of repairing the decaying infrastructure. Tax money, plainly and simply, is being misspent.

    If what you say here is true, then maybe we need to move to a consumption tax. Everyone pays it and the rich, by buying huge homes and boats, pay more.
     
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  13. georgephillip

    georgephillip Governor

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    There is a progressive element to taxing consumption. The following was published in late 2010:
    "Why not recommend replacing the income tax with a progressive consumption tax? This could either be of two models:

    "(a) the David Bradford X-tax model, which is essentially a VAT with wages being deducted and included so that you can build in lower rates for lower-income individuals. The flat tax is a version of this, except with only 2 brackets. So individuals (in addition to businesses) file tax returns, but individuals only include wages.

    "(b) a consumed income tax in which all saving is deducted and all borrowing included in 'income.'

    "One advantage of a new and untried system is that at least it doesn't have all the barnacles. Preferences are still being effectively repealed, but the optics are different when you're eliminating one system altogether and announcing the creation of a new one.

    "And I really don't see why the X-tax should be considered a radical experiment set in uncharted waters, when we have VATs all over the world and are also used to having wages deducted and included.

    "It's hard to see how good faith Republicans could fail to be intrigued by the idea of switching to a consumption tax.

    "But the thing can be distribution-neutral, except perhaps at the very top (where income tax planning is often very effective anyway).

    "And while Obama is already on thin ice with the liberal base, there are a number of people relatively on the left (academics, bloggers, etcetera) who like the progressive consumption tax. We're not exactly powerful politically, but in this setting we might offer a bit of cover.

    "Enacting a consumption tax can also function as a transition hit on old wealth, adding to progressivity on a one-time basis. And deferred enactment can be stimulative by suggesting that consumer prices will rise when it takes effect (creating an incentive to consume now)."
    http://danshaviro.blogspot.com/2010/12/should-obama-consider-proposing.html
     

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