An Inconvenient Truth

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Re: An Inconvenient Truth

Postby Dalar » Thu Apr 24, 2008 12:42 am

Kifle wrote:
This post was made by teflor the ranger who is currently on your ignore list. Display this post.


I love the new message board.


That's how I be rollin' too.
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Re: An Inconvenient Truth

Postby Sarvis » Thu Apr 24, 2008 1:49 am

teflor the ranger wrote:
Sarvis wrote:
teflor the ranger wrote:edit: no satisfaction for you. read next post.



Oh I don't know, I found Corth's post very satisfying. :P


I told you he was that gullible, Corth. Btw, don't you think you took my quote a bit out of context? It is followed by "of Democrats."


Freudian slips are out of context by nature.
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Re: An Inconvenient Truth

Postby Kifle » Thu Apr 24, 2008 2:22 am

Dalar wrote:
Kifle wrote:
This post was made by teflor the ranger who is currently on your ignore list. Display this post.


I love the new message board.


That's how I be rollin' too.


Now if we could only find a way to block quotes of teflor :(
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Re: An Inconvenient Truth

Postby Ragorn » Thu Apr 24, 2008 3:58 am

Kifle wrote:
Dalar wrote:
Kifle wrote:
This post was made by teflor the ranger who is currently on your ignore list. Display this post.


I love the new message board.


That's how I be rollin' too.


Now if we could only find a way to block quotes of teflor :(

Just block Sarvis too, problem 95% solved.
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Re: An Inconvenient Truth

Postby Sarvis » Thu Apr 24, 2008 12:19 pm

Ragorn wrote:
Kifle wrote:
Dalar wrote:
Kifle wrote:
This post was made by teflor the ranger who is currently on your ignore list. Display this post.


I love the new message board.


That's how I be rollin' too.


Now if we could only find a way to block quotes of teflor :(

Just block Sarvis too, problem 95% solved.


Now now, I've been good lately. I just couldn't resist the easy pickings in this thread...
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Re: An Inconvenient Truth

Postby Ragorn » Thu Apr 24, 2008 6:58 pm

Corth wrote:I don't get it.. :)

By the way, for Corth:

Rich people get tax breaks, and the middle class get fucked because of it.
- Ragorn
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Re: An Inconvenient Truth

Postby Adriorn Darkcloak » Thu Apr 24, 2008 7:12 pm

Ragorn wrote:
Adriorn Darkcloak wrote:Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:


So you agree that the way we handle taxes is horrendous.

It would all be fine if we just paid for our own beer.
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Re: An Inconvenient Truth

Postby Sarvis » Thu Apr 24, 2008 7:52 pm

Well, I was going to refrain... but I think Adriorn needs my version of the beer story:



Suppose that every day, ten men decide to go out drinking. The bill comes to $100. If we used a "flat tax" system to pay for beer it would go like this:

1) The first four guys never go out, since they can't afford $10.
2) The fifth guy only goes out once every 10 days, since that is all he can afford.
3) The sixth goes out once every 3 days, since that is all he can afford
4) The seventh goes out every other day. He's spending a bit more than he'd like, but he can handle it.
5) The eigth, ninth and tenth go out every day because they can afford to.

So the bartender, instead of making $100/day, makes an average of ~$18/day and goes out of business.
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Re: An Inconvenient Truth

Postby teflor the ranger » Thu Apr 24, 2008 9:38 pm

Sarvis wrote:Now now, I've been good lately. I just couldn't resist the easy pickings in this thread...


Technically, Sarvis, targets for your shotgun of drivel and illogic are everywhere.

Sarvis wrote:Freudian slips are out of context by nature.


Your face is out of context by nature. And no.
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Re: An Inconvenient Truth

Postby Adriorn Darkcloak » Thu Apr 24, 2008 10:45 pm

Sarvis wrote:Well, I was going to refrain... but I think Adriorn needs my version of the beer story:

Suppose that every day, ten men decide to go out drinking. The bill comes to $100. If we used a "flat tax" system to pay for beer it would go like this



No, no Sarvis. Not a flat tax, a consumption tax. You buy it, you pay the high tax. Everyone pays the same tax. Food is excluded, beer isn't.
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Re: An Inconvenient Truth

Postby Sarvis » Thu Apr 24, 2008 10:48 pm

Adriorn Darkcloak wrote:
Sarvis wrote:Well, I was going to refrain... but I think Adriorn needs my version of the beer story:

Suppose that every day, ten men decide to go out drinking. The bill comes to $100. If we used a "flat tax" system to pay for beer it would go like this



No, no Sarvis. Not a flat tax, a consumption tax. You buy it, you pay the high tax. Everyone pays the same tax. Food is excluded, beer isn't.


Which still means the bar goes out of business, right? Are you going to tell us with a straight face that a consumption tax doesn't hurt commerce? That it doesn't unfairly target those with less money? That wealthier people couldn't just get around it by purchasing from other countries?

Our system isn't ideal, but I haven't heard of an alternative that isn't full of holes...
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Re: An Inconvenient Truth

Postby Adriorn Darkcloak » Thu Apr 24, 2008 11:33 pm

Sarvis wrote:Which still means the bar goes out of business, right? Are you going to tell us with a straight face that a consumption tax doesn't hurt commerce?


I do not understand how having an extra $300-400 a month can hurt commerce. Don't think hypothetically, think practically. Instead of getting my normal $1000 check, I get $1300. In the minds of most people, that's now money that I did not have before. So whereas before I could not spend the $300 on a new lawnmower, now I can. So what if the lawnmower would have cost me $200 before? I didn't have that money before, now I do. Whereas before I couldn't go out to eat at any point during the week, now my wife and I can afford to go out with the family once a week and eat out.

Sarvis wrote:That it doesn't unfairly target those with less money? That wealthier people couldn't just get around it by purchasing from other countries?

Our system isn't ideal, but I haven't heard of an alternative that isn't full of holes...


A consumption tax doesn't "target" anyone. It taxes anyone buying anything. People with less money shouldn't be buying things that aren't necessities. By not buying such luxuries, they are in essence "exempt" from paying most taxes. Once they are able to save some money, they can then use the saved up money to purchase a luxury, like a nice sofa or a new microwave.

And hey, the consumption tax might not be the perfect system, who knows. But it's fairer towards a larger percentage of people than the current system. It treats more people like "equals".
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Re: An Inconvenient Truth

Postby Corth » Fri Apr 25, 2008 12:12 am

Ragorn wrote:
Corth wrote:I don't get it.. :)

By the way, for Corth:

Rich people get tax breaks, and the middle class get fucked because of it.


Oh!
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth

Goddamned slippery mage.
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Re: An Inconvenient Truth

Postby Lathander » Fri Apr 25, 2008 1:42 am

Middle class doesn't get tax breaks??? Come on Rags, you're just playing devil's advocate right?

Most of the tax breaks out there are for the middle class. I'll list just a few:

Nontaxable status of health insurance through your employer
Mortgage interest deduction
Retirement plan contribution deduction
Child Exemption
0% tax on capital gains

I could go on, but I hope you see my point. The middle class get lots of tax breaks.
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Re: An Inconvenient Truth

Postby Lathander » Fri Apr 25, 2008 1:46 am

A flat tax assumes you get rid of income tax. Therefore, people have alot more money in their pockets that they can spend as they want. Personally, I'm not a fan a consumption or value added taxes as they to some degree slow down the velocity of money. What I mean is if you tax consumption, you get less of it. A carbon tax is an example of a consumption tax. Also, for truly low income folks, you would need some kind of income transfer payment ala Brazil which I'm against as well.

Our tax system is a mess because it benefits everyone to keep it a mess. Loopholes steer money into particular areas. When they are closed, others are opened up and they go there. Changing the tax laws keeps people having to go to experts to change things to get the best tax planning.
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Re: An Inconvenient Truth

Postby teflor the ranger » Fri Apr 25, 2008 4:20 am

Flat Tax

Individuals are taxed a fixed amount per person. Also known as a 'headcount' tax.

Consumption Tax

Individuals pay taxes on goods and services purchased.

Income Tax

Individuals pay taxes whenever they earn or gain income.

Value Added Tax

Goods are taxed at each level of consumption/transfer. To explain, let us use a domestically produced car. The parts are taxed when the assembly company buys them, the car is taxed when the dealership buys inventory, and the individual is taxed when the individual purchases the car.

In other words, each system of taxation is just another method of collecting taxes.

If you want to talk about the effects of different taxation systems in our market economy, it's best to say "the end result of tax system x" rather than "tax system x" targets certain individuals, etc, etc.

Lathander: no system of tax assumes that all other taxation systems are removed. The majority of Americans already live under hybrid systems of taxation. We pay national income taxes, state sales taxes (a consumption tax), and land taxes (a consumption tax). We also indirectly pay a Value Added Tax on goods and services provided by overseas exporters should those exporters be VAT countries.

Adriorn: there are many individuals that make much more money than they do or can consume. If, in America, we do not tax savings income or investment income, the tax burden would shift towards those who spend all of their money. Lower and middle class would have an increased tax burden, while the rich would reap HUGE savings in investments.

Sarvis: your beer story and other beer stories are too simplified to impart any understanding of real-life taxation systems because no real-life taxation systems are ever implemented that simply. There is always some sort of tax relief for the poor and economic measures added in for fairness and growth.
Last edited by teflor the ranger on Fri Apr 25, 2008 5:02 am, edited 2 times in total.
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Re: An Inconvenient Truth

Postby Ragorn » Fri Apr 25, 2008 4:28 am

Lathander wrote:Middle class doesn't get tax breaks??? Come on Rags, you're just playing devil's advocate right?

Most of the tax breaks out there are for the middle class. I'll list just a few:

Nontaxable status of health insurance through your employer
Mortgage interest deduction
Retirement plan contribution deduction
Child Exemption
0% tax on capital gains

I could go on, but I hope you see my point. The middle class get lots of tax breaks.

Do you want to argue about the value of tax breaks under a republican government?

Really?

Do you really want me to link you to Buffet complaining that his secretary is in a higher tax bracket than he is?
- Ragorn
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Re: An Inconvenient Truth

Postby teflor the ranger » Fri Apr 25, 2008 4:33 am

Ragorn wrote:
Lathander wrote:Middle class doesn't get tax breaks??? Come on Rags, you're just playing devil's advocate right?

Most of the tax breaks out there are for the middle class. I'll list just a few:

Nontaxable status of health insurance through your employer
Mortgage interest deduction
Retirement plan contribution deduction
Child Exemption
0% tax on capital gains

I could go on, but I hope you see my point. The middle class get lots of tax breaks.

Do you want to argue about the value of tax breaks under a republican government?

Really?

Do you really want me to link you to Buffet complaining that his secretary is in a higher tax bracket than he is?


Anecdotes hardly ever refute systematic evidence. To counter your Buffet's secretary anecdote, I will offer this anecdote:

Middle class people don't understand how to take advantage of the government's taxation system as well as upper class people.
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Re: An Inconvenient Truth

Postby Corth » Fri Apr 25, 2008 5:05 am

"Progressive" taxes are just a means of dividing people by class for political reasons. The top 10% of earners are by definition in the minority. Its not a surprise that in a democracy, politicians would pander to the other 90% in order to get the bulk of votes. Ultimately, it is immoral for a government to treat its citizens in an unequal manner. Affirmative action was immoral for that reason. It sought to remedy inequality by creating more inequality. "Progressive" income taxes are in the same category. There is no moral reason why people who are smarter, have worked harder, or for that matter, are just plain luckier (yes, luckier), should pay more than others to support the government. Anyone who says otherwise is jealous, misguided, or both. That is why I endorse either a flat tax or a consumption tax.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



Goddamned slippery mage.
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Re: An Inconvenient Truth

Postby teflor the ranger » Fri Apr 25, 2008 1:19 pm

Corth wrote:"Progressive" taxes are just a means of dividing people by class for political reasons. The top 10% of earners are by definition in the minority. Its not a surprise that in a democracy, politicians would pander to the other 90% in order to get the bulk of votes. Ultimately, it is immoral for a government to treat its citizens in an unequal manner. Affirmative action was immoral for that reason. It sought to remedy inequality by creating more inequality. "Progressive" income taxes are in the same category. There is no moral reason why people who are smarter, have worked harder, or for that matter, are just plain luckier (yes, luckier), should pay more than others to support the government. Anyone who says otherwise is jealous, misguided, or both. That is why I endorse either a flat tax or a consumption tax.


Corth, progressive income taxes do not treat anyone unequally. The rules apply the same way to everyone, whether they are rich or poor, if two individuals have the same income and deductions, they will be taxed the same.

Just as any straight or gay individual can get married to someone of the opposite sex, people are all subject to the same rules of taxation.

Of course, I understand if you have a problem with this logic, but the Supreme Court appears to be bent on using it. As an aside, by your way of thinking, the value added tax is the most immoral tax of all.
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Re: An Inconvenient Truth

Postby Corth » Fri Apr 25, 2008 2:29 pm

I'm not sure if you are being sarcastic or not. Of course two people earning the same income will be taxed at the same rate. Two people being taxed at different rates is unequal. Its unequal because someone making 200k is taxed at a greater percentage rate than someone making 50k. If they were both being taxed at the same rate, but the person making 200k was still paying 4x as much in taxes, it would be better.. but imho, everyone should pay their exact share, no more, no less, and to that extent, the flat tax is ideal.

Im also a big fan of consumption taxes because you can control your tax liability. Saving money should be encouraged (although these days, its discouraged - no wonder the economy is going down the tubes). Someone making 200k who lives frugally with the goal of saving capital for productive uses, can actually have a smaller tax liability than someone making 100k who lives it up. Taxing income, on the other hand, actually has the effect of encouraging otherwise unnecessary spending as certain purchases make sense because you can write them off. Taxing, in general, causes misallocations of capital. Placing the tax on income instead of consumption is what leads over time to a country of debtors.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Sarvis » Fri Apr 25, 2008 4:43 pm

teflor the ranger wrote:Adriorn: there are many individuals that make much more money than they do or can consume. If, in America, we do not tax savings income or investment income, the tax burden would shift towards those who spend all of their money. Lower and middle class would have an increased tax burden, while the rich would reap HUGE savings in investments.


Ugh. I agree with something Teffie said. I feel dirty.

Sarvis: your beer story and other beer stories are too simplified to impart any understanding of real-life taxation systems because no real-life taxation systems are ever implemented that simply. There is always some sort of tax relief for the poor and economic measures added in for fairness and growth.


I know that, which is why I didn't post it originally and why I hate those kinds of stories. The one that pisses me off the most is when they pit a girl who worked hard in college vs. a girl who partied all the time to explain why one gets more money. Contrast that to the real world where the guy who partied all the time gets to be President, or to the kids who had to spend all their non-class time working just to stay fed but somehow still fall into the "partier" category because they aren't wealthy at the end.

Dammit I just agreed with him again didn't I? Ugh.
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Re: An Inconvenient Truth

Postby Sarvis » Fri Apr 25, 2008 4:49 pm

Corth wrote:"Progressive" taxes are just a means of dividing people by class for political reasons. The top 10% of earners are by definition in the minority. Its not a surprise that in a democracy, politicians would pander to the other 90% in order to get the bulk of votes.


"Some people call you the elite, I call you my base." - President George W. Bush

You're forgetting who pays for their campaigns, silly.

Ultimately, it is immoral for a government to treat its citizens in an unequal manner. Affirmative action was immoral for that reason. It sought to remedy inequality by creating more inequality. "Progressive" income taxes are in the same category. There is no moral reason why people who are smarter, have worked harder, or for that matter, are just plain luckier (yes, luckier), should pay more than others to support the government. Anyone who says otherwise is jealous, misguided, or both. That is why I endorse either a flat tax or a consumption tax.


Lucky for you you threw in luckier, or I'd have had to go on another rant. :P

Besides, yes there is a reason. First of all those who have more have benefited more from government services, highways to carry the goods they produce to consumers for instance. Second, there's a whole thing about the value of a dollar and how it decreases the more of them you have. If you're Bill Gates then paying $1 million in taxes (random number) is going to hurt a lot less than a guy who makes $50k paying $1k in taxes.

I guess to put it simply: how is it fair to reduce one person's spending power with taxes, and not everyone's?
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Re: An Inconvenient Truth

Postby Sarvis » Fri Apr 25, 2008 5:03 pm

Almost forgot about Adriorn... silly me.

Adriorn Darkcloak wrote:I do not understand how having an extra $300-400 a month can hurt commerce. Don't think hypothetically, think practically. Instead of getting my normal $1000 check, I get $1300. In the minds of most people, that's now money that I did not have before. So whereas before I could not spend the $300 on a new lawnmower, now I can. So what if the lawnmower would have cost me $200 before? I didn't have that money before, now I do. Whereas before I couldn't go out to eat at any point during the week, now my wife and I can afford to go out with the family once a week and eat out.


Really? So because you have an $300 you'd be willing to spend 1/3 of the surplus on one item? Oh, and what happened to "People with less money shouldn't be buying things that aren't necessities. By not buying such luxuries, they are in essence "exempt" from paying most taxes." You yourself state that a good portion of the population would stop buying (the same portion that doesn't pay taxes now anyway so wouldn't see a surplus by the way) but don't expect it to affect commerce?

Here's someone probably smarter than me to tell you the same thing: <a href="http://www.taxanalysts.com/THP/civilization/Documents/Sales/HST29008/hst29008.htm">8. General sales taxes reduce consumption expenditure more and saving less than any other form of major-revenue tax.</a>


A consumption tax doesn't "target" anyone. It taxes anyone buying anything. People with less money shouldn't be buying things that aren't necessities. By not buying such luxuries, they are in essence "exempt" from paying most taxes. Once they are able to save some money, they can then use the saved up money to purchase a luxury, like a nice sofa or a new microwave.


The wealthy save/invest most of their money, and frequently buy things out of country anyway. The poor by definition can't buy much, and will be able to buy less when prices increase. Just like the middle guys in Ragorn's story, the middle class will take out an extra dollar and grumble a little.

And hey, the consumption tax might not be the perfect system, who knows. But it's fairer towards a larger percentage of people than the current system. It treats more people like "equals".


Fair? Is it _really_ fair? It sounds fair, sure. Everyone pays x% on what they buy. Nevermind that people with kids have to buy more. Nevermind that the wealthy can shop elsewhere. Nevermind that the poor are expected to live a subsistence lifestyle. It's "fair."

Oh, and _definately_ ignore that a person with a million dollars can far more easily afford a $1300 lawnmower than a guy who makes $30k.
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Re: An Inconvenient Truth

Postby Adriorn Darkcloak » Fri Apr 25, 2008 7:10 pm

Sarvis wrote:8. General sales taxes reduce consumption expenditure more and saving less than any other form of major-revenue tax.


If added on top of the income tax that we have? Of course it will. If we nuke the income tax, no it won't. That's what most of these studies and theories have incredibly not taken into consideration. They base it on currently existing conditions to make it look like a bad idea.

Sarvis wrote:Really? So because you have an $300 you'd be willing to spend 1/3 of the surplus on one item? Oh, and what happened to "People with less money shouldn't be buying things that aren't necessities.


Someone making $1000 every paycheck is making almost as much money as I am. That is not poverty. By buying a lawnmower that I normally would not have been able to have had, I end up saving myself money in the long run.

Sarvis wrote:You yourself state that a good portion of the population would stop buying (the same portion that doesn't pay taxes now anyway so wouldn't see a surplus by the way) but don't expect it to affect commerce?


Where did I say that poor people would stop buying? What exactly would they stop buying? New TVs? They'll still be buying the same things they always have. If they wanna buy a new entertainment system, that's their fault however.

Sarvis wrote:Is it _really_ fair? Nevermind that people with kids have to buy more. Nevermind that the wealthy can shop elsewhere. Nevermind that the poor are expected to live a subsistence lifestyle. It's "fair." Oh, and _definately_ ignore that a person with a million dollars can far more easily afford a $1300 lawnmower than a guy who makes $30k.


Yes, I do not care that people with kids have to buy more. They chose to have more kids, just like I did. I also do not care that the wealthy can shop elsewhere, that is their choice. However, I think this is picking one point out of thousands. Can't the rich buy $10 million dollar homes? And jets? And pricier cars? And generally have more expensive tastes, therefore spending more money? Cause all this is also part of the "rich" idea. You're just sticking with the "buying things overseers" point as a generalized view. And yes, I will ignore that the rich can easily afford a $1300 lawnmower. It's the same thing Teflor was proclaiming (surprisingly), redistribution.

If the rich have the money, they can use the money to invest it or create private projects to help with different areas of the nation, be it poverty, education, or whatnot. Or they can donate huge amounts of money, like Bill Gates has done, to charitable institutions or research foundations. If they choose not to, that's their moral choice. If the poor decide to spend their money on non-essentials until they can improve their state, that's their choice too. The poor are not expected to live a subsistence lifestyle Sarvis. They are expected to not waste their money. Get over the idea that people want to "keep the poor down". I don't want to hurt anyone, but I do not want anyone taking advantage of my money.

So yes, I think it's fair. To restate, it might not be the perfect system, but it is "fairer" to a larger percentage of people. Some people will always get screwed, somehow. That's where I think it becomes our duty as human beings to do something to help them out, each in our own individual way. But don't tell me how I should do it or how much to "contribute".
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Re: An Inconvenient Truth

Postby Sarvis » Fri Apr 25, 2008 8:18 pm

Adriorn Darkcloak wrote:but I do not want anyone taking advantage of my money.



That's just too damn bad. Unless you keep all your money stuffed in your mattress someone is taking advantage of it. Hell, even then your wife is probably taking advantage of the added comfort of sleeping on money.

Oh, and get over the idea that you are being forced to do things with your money. You agree to live here, to participate in our political system and therefore you are agreeing to have these things done with your money. Argue against it, fine. That's one of the rights you have under our system. But claim it's being forced from you? Bullshit.

This is not taxation without representation.
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Re: An Inconvenient Truth

Postby Adriorn Darkcloak » Fri Apr 25, 2008 9:56 pm

Your response Sarvis focused on one line, completely out of context, from a somewhat long list of points and explanations I had made. At no point did you even mention, argue against (or for), or debate anything else I had mentioned.

No more replies from me.


This coming from one of the people who has consistently bashed the President and the war:

Sarvis wrote:Oh, and get over the idea that you are being forced to do things with your money. You agree to live here, to participate in our political system and therefore you are agreeing to have these things done with your money.
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Re: An Inconvenient Truth

Postby Lathander » Fri Apr 25, 2008 11:56 pm

Let's try this because we can argue the concepts and where the Laffer curve is. What would be your income tax % at different levels of income? Also, keep in mind, higher incomes don't mean you are wealthy. I know lots of folks in Montgomery County, MD with high incomes but low networth.

Also, while we're throwing in what your income tax rates would be, where would you put the rates and levels on estate tax?
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Re: An Inconvenient Truth

Postby Lathander » Sat Apr 26, 2008 12:03 am

In regard to Buffet, it is misleading to say his tax rate could be less than his secretary. We talked about this a months ago in the office. Buffet claims his secretary makes 60K and pays 30% taxes. At the most, she would pay 25%. Personally, I think Buffet is just playing politics. If he feels he doesn't pay enough taxes, he ought to pay extra, the IRS will accept it.
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Re: An Inconvenient Truth

Postby teflor the ranger » Sun Apr 27, 2008 5:09 am

Sarvis wrote:I know that, which is why I didn't post it originally and why I hate those kinds of stories.


Oh. I thought it was a little uncharacteristic for you. Righty-o then.
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Re: An Inconvenient Truth

Postby teflor the ranger » Sun Apr 27, 2008 5:14 am

Lathander wrote:Let's try this because we can argue the concepts and where the Laffer curve is. What would be your income tax % at different levels of income? Also, keep in mind, higher incomes don't mean you are wealthy. I know lots of folks in Montgomery County, MD with high incomes but low networth.


Shaddup! :D
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Re: An Inconvenient Truth

Postby teflor the ranger » Sun Apr 27, 2008 5:38 am

Image

edit: line added to represent median US household income

Above is a graphic that represents US income taxes against a single in their own household. The red indicates the amount paid in taxes as income increases from left to right. Each pixel-width represents $1,000 in income. The red indicates taxes owed (before deductions) for a single individual that is the head of their own household that made approximately $500,000 this year.

All singles living in their own households, before deductions, must pay 0% on their first $7,825 of income. This represents the leftmost segment of the bar. On their next $24,025, they have to pay 15% (this is the next segment of the bar). So forth and so on. The rate bands are listed below.

$0 to $7,825 0% (far left vertical band)
$7,825 to $31,850 15%
$31,850 to $77,100 25%
$77,100 to $160,850 28%
$160,850 to $349,700 33%
$349,700 and Up 35% (far right vertical band)

So, to recap, a single household individual who earns $8,825 a year is considered to have made $1,000 in taxable income. He must pay $150 in taxes before deductions.

As you can see, those who earn more income get more money, however, they also pay far more in taxes.
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Re: An Inconvenient Truth

Postby teflor the ranger » Sun Apr 27, 2008 2:42 pm

Corth wrote:I'm not sure if you are being sarcastic or not. Of course two people earning the same income will be taxed at the same rate. Two people being taxed at different rates is unequal. Its unequal because someone making 200k is taxed at a greater percentage rate than someone making 50k. If they were both being taxed at the same rate, but the person making 200k was still paying 4x as much in taxes, it would be better.. but imho, everyone should pay their exact share, no more, no less, and to that extent, the flat tax is ideal.


It is equal because if next year, the 200k person only made 50k, and the 50k person made 200k, they would be taxed at the rate the other guy was taxed last year. Same rules = equality. People's incomes aren't something they were born with or will stay with them forever.

Corth wrote:Im also a big fan of consumption taxes because you can control your tax liability. Saving money should be encouraged (although these days, its discouraged - no wonder the economy is going down the tubes). Someone making 200k who lives frugally with the goal of saving capital for productive uses, can actually have a smaller tax liability than someone making 100k who lives it up. Taxing income, on the other hand, actually has the effect of encouraging otherwise unnecessary spending as certain purchases make sense because you can write them off. Taxing, in general, causes misallocations of capital. Placing the tax on income instead of consumption is what leads over time to a country of debtors.


Consumption taxes also shift the burden of funding the Federal Government away from the ultra-rich and towards households that have to spend all of their income. If we were to stop taxing capital gains and investment income, we would take a huge revenue drop unless we implement some sort of insanely high consumption tax. Such a high consumption tax would be hard to phase in, even over time, or even in a tiered system like essential goods / luxury goods consumption taxes. Additionally, it creates incentive for small businesses to cheat on their taxes. Bottom line is that it would be difficult and expensive to implement, it might crush lower-income households, and it would place a greater burden on already burdened lower, lower-middle, and middle class households.

While the concept seems 'fairer,' it turns out it's more fair to ask a millionaire to fork over a million, than it is to as a 50k'r to hand over 5k. (One will make it, the other one won't.)



Another thing to consider is that the Jones' spend approximately 98% of their income, while Bill Gates spends about 2%. This means the Jones' would be taxed against 98% of their income, whie Bill Gates would only be taxed against 2%. That's not exactly fair either.
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Re: An Inconvenient Truth

Postby Corth » Sun Apr 27, 2008 3:35 pm

See, your position is not surprisingly government-centric. You start with the assumption that the government absolutely requires $x trillion dollars in tax revenue, and then you figure out how we're going to fund it. Given that assumption, you come to the reasonable conclusion that there is no way our current government can be funded by a flat tax or consumption tax, as it would be impossible for our poorest citizens to feed, clothe, and shelter themselves in addition to paying that type of tax burden.

On the other hand, if you assume that individuals should be treated fairly vis a vis each other.. like for instance, no single individual should have to pay any more than any other individual towards the government they share (or even at minimum no two individuals should be taxed at different rates), well, you come to a different conclusion. If the government you want can't be funded while treating individuals absolutely equally... then the government you want isn't viable.

My opinion: too bad. Individuals first.. governments second.

You, on the other hand, consider yourself a conservative, and yet every single time that we get into specifics, you again demonstrate that you are drinking the big-government kool-aid.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Kifle » Sun Apr 27, 2008 5:05 pm

It's been a while since I actually payed attention to taxes. Could one of you guys explain the current tax system and these different alternative tax systems (flat, consumption,etc.). I have a vague idea of them all, but I never honestly cared that much to learn them (you pay taxes regardless of whether you like or agree with the system).
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Re: An Inconvenient Truth

Postby Ragorn » Sun Apr 27, 2008 9:28 pm

Current system: Tax rate scales up with income.

$15k: 12%
$25k: 17%
$40k: 21%
$75k: 25%
$200k: 28%
(numbers completely ficticious)

Flat tax: Everyone pays the same percentage.

$15k: 21%
$25k: 21%
$40k: 21%
$75k: 21%
$200k: 21%

Guess which system the lawyer prefers *roll*
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Re: An Inconvenient Truth

Postby Lathander » Sun Apr 27, 2008 9:56 pm

There are far too many entrenched interests to have our tiered income tax system go to a system such as flat tax, national sales tax, consumption tax, etc. The states have no interest in it because of municipal securities. Charities hate it because under a simplified tax system, the tax deduction would go away. Financial and real estate companies would hate it because the mortgage interest deduction would go away. Heck, the tax prep business is a 14 billion dollar industry that would disappear if you went to a flat tax. Will never happen. The flat tax would have been a good system to start with but we're too far along to go back.

What should happen is I'd like to see withholding from salary go away. If people saw what they actually spend on their taxes, they would actually start to question why they pay so much. Right now, you get far too many people that think they get a gift from the government when they get a refund. They don't realize they are usually just getting their own money back.
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Re: An Inconvenient Truth

Postby teflor the ranger » Sun Apr 27, 2008 10:13 pm

Corth wrote:See, your position is not surprisingly government-centric. You start with the assumption that the government absolutely requires $x trillion dollars in tax revenue, and then you figure out how we're going to fund it. Given that assumption, you come to the reasonable conclusion that there is no way our current government can be funded by a flat tax or consumption tax, as it would be impossible for our poorest citizens to feed, clothe, and shelter themselves in addition to paying that type of tax burden.


I presented no position of my own. It is the most likely position that most individuals and the government would take with any serious tax code changes.

Corth wrote:On the other hand, if you assume that individuals should be treated fairly vis a vis each other.. like for instance, no single individual should have to pay any more than any other individual towards the government they share (or even at minimum no two individuals should be taxed at different rates), well, you come to a different conclusion. If the government you want can't be funded while treating individuals absolutely equally... then the government you want isn't viable.


The Supreme Court has ruled that the current income tax is not only legal but equal.

Corth wrote:My opinion: too bad. Individuals first.. governments second.


The individuals don't need no government or anything *roll*.

Corth wrote:You, on the other hand, consider yourself a conservative, and yet every single time that we get into specifics, you again demonstrate that you are drinking the big-government kool-aid.


FYI, I have personally, in academic forum have promoted a hybrid consumption/income taxation system, as well as a reduction in government services. I presented the most likely view that most individuals and the government would take in considering long term changes to the tax code. I'm sorry Corth, but you're not exactly doing the little man any better by blowing smoke...
Last edited by teflor the ranger on Sun Apr 27, 2008 10:20 pm, edited 1 time in total.
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Re: An Inconvenient Truth

Postby teflor the ranger » Sun Apr 27, 2008 10:17 pm

Kifle wrote:It's been a while since I actually payed attention to taxes. Could one of you guys explain the current tax system and these different alternative tax systems (flat, consumption,etc.). I have a vague idea of them all, but I never honestly cared that much to learn them (you pay taxes regardless of whether you like or agree with the system).


viewtopic.php?p=187766#p187766
viewtopic.php?p=187714#p187714

Of course, if he's ignoring my posts, it's his ignorance.
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Re: An Inconvenient Truth

Postby Sarvis » Sun Apr 27, 2008 11:49 pm

Ragorn wrote:Current system: Tax rate scales up with income.

$15k: 12%
$25k: 17%
$40k: 21%
$75k: 25%
$200k: 28%
(numbers completely ficticious)

Flat tax: Everyone pays the same percentage.

$15k: 21%
$25k: 21%
$40k: 21%
$75k: 21%
$200k: 21%

Guess which system the lawyer prefers *roll*


Guess which system anyone making less than $40k prefers?

Lathander wrote:. If people saw what they actually spend on their taxes, they would actually start to question why they pay so much.


I dunno about you, but my federal and state witholding are listed clearly on my paystub. I cry a little every 2 weeks, then realize that I probably wouldn't be here today without some of the programs those taxes pay for.

Corth wrote:On the other hand, if you assume that individuals should be treated fairly vis a vis each other.. like for instance, no single individual should have to pay any more than any other individual towards the government they share (or even at minimum no two individuals should be taxed at different rates), well, you come to a different conclusion. If the government you want can't be funded while treating individuals absolutely equally... then the government you want isn't viable.


I think we need a hypothetical. Let's pretend that, for whatever reason, the government needed a flat tax rate of 50%. Maybe they cut all the government programs and are actually trying to pay off the national debt or something.

Does it still sound "fair" to take half the income of a person who makes $10k compared to taking half the income of someone who makes $100k?

Now, I know the response you want is that such a government is therefore not viable, but that's not the point here. The point is whether X% really has the same effects on people with vastly different incomes. The 50% number simply shows clearly that it does not.
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Re: An Inconvenient Truth

Postby Corth » Mon Apr 28, 2008 12:30 am

Sarvis,

Yes, its fairer (but not absolutely fair) to take 50% of everyone's income than to take 10% of one person's and 50% of someone elses. Better yet, make everyone pay the same amount every year.. $5,000 or whatever arbitrary number they come up with. Thats absolute equality. You will point out that its 25% from the person making 20k, and only 1% from the person making $500,000. Of course, your right. And I support that idea because its immoral for government to discriminate against the rich person. If people were treated equally, instead of the masses gouging the rich, then maybe the masses wouldn't elect leaders so happy to spend the rich people's tax dollars on bloated inefficient crap in the first place.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Corth » Mon Apr 28, 2008 12:33 am

Teflor,

And the Supreme Court is the end all and be all of what is correct? Tell that to Dred Scott. Heh. What are your thoughts on Roe v. Wade again?

Its just common sense. The government takes 25% of my income, and 10% of yours. Are we being treated equally? Hah! 25% from both of us.. We're getting there. $5,000 from both of us.. now we are being treated equally.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Sarvis » Mon Apr 28, 2008 12:52 am

Corth, define equal. If you take $5k from large segments of our population they will starve. That's equal? Causing the death of one group while another doesn't even notice the loss is... equal?
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Re: An Inconvenient Truth

Postby Corth » Mon Apr 28, 2008 1:33 am

If 5k doesn't work, then make it 2k, or whatever it is that will not starve people. If they can't even pay that nominal amount, then they should be required to work for the shortfall. Pick up crap on the side of the highway or something. Say, at $10 per hour.


$2k per year is not enough money to fund the government? Oh well! :)
Last edited by Corth on Mon Apr 28, 2008 1:37 am, edited 1 time in total.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Sarvis » Mon Apr 28, 2008 1:37 am

That logic quickly reduces to no taxation at all, as you can probably always find someone too poor to pay any tax. So unless you're arguing for anarchy I don't think there's any reasonable argument for a flat tax based on fairness.

The progressive tax has the fun benefit of not taxing anyone below a certain income level.
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Re: An Inconvenient Truth

Postby Corth » Mon Apr 28, 2008 1:39 am

I edited while you were posting. Added something about people having to work for the government to make up the shortfall. If we go with the $5k per year number, at $10 an hour, you would have to give the government 500 hours. I give well more than 500 hours a year worth of money to the government right now.. so I don't want to hear any complaining.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Sarvis » Mon Apr 28, 2008 1:42 am

So now you're advocating slave labor or indentured servants?
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Re: An Inconvenient Truth

Postby Corth » Mon Apr 28, 2008 2:07 am

Well.. if you work 40 hours a week, you are doing about 2000 a year. I'm not sure that spending 25% of those hours working for the government constitutes indentured servitude. Especially since the vast majority of people that work are already doing just that. I just think its a fair way to allow people to participate equally in funding their government. If you think its too much, then perhaps the answer is to have less government. Then people don't have to work so much for it! :)
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



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Re: An Inconvenient Truth

Postby Sarvis » Mon Apr 28, 2008 2:11 am

To work for the government would mean working over and above your other jobs for no pay. Not at all sure how that wouldn't count as indentured servitude.

We already covered "less government" and you haven't suggested anarchy yet....
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Re: An Inconvenient Truth

Postby Ragorn » Mon Apr 28, 2008 2:14 am

Corth wrote:Teflor,

And the Supreme Court is the end all and be all of what is correct? Tell that to Dred Scott. Heh. What are your thoughts on Roe v. Wade again?

Its just common sense. The government takes 25% of my income, and 10% of yours. Are we being treated equally? Hah! 25% from both of us.. We're getting there. $5,000 from both of us.. now we are being treated equally.

How about we just take enough money from every person in the country until each person has exactly $40,000 of income remaining?

Wouldn't that be the MOST equal way of doing it?

You don't need to worry about silly tax rates or loopholes. And everyone is completely equal because they have the same amount of money at the end!

Translation: Making everything equal is not always fair.
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