Taxation and exemption policy

[Redleg]

Well it comes down to no matter what you do aren't you just pushing the beans around on the table? Companies ALREADY complain about business tax being too high. So, you cut property tax and replace it with business taxes, and businesses say they will take their marbles and go home, or open in other countries. You leave business taxes the same and cut property taxes, and schools close left and right. The fact is that we need taxes, no one likes to be the one paying them, and everyone thinks their end of the tax burden isn't fair. Whenever I see anything right of center talking abou tax reform, it always ultimately comes down to vastly decreasing taxes and not replacing them with anything else, or replacing them with things that will hit only lower classes and won't generate as much revenue anyway. And while the idea of "cut spending!" is very populist and appealing, there is simply no way to make any of the tax systems I've seen proposed by wealthy people and the ideological right work, without cutting things that people don't think of as wasteful spending, such as education and social security and police and fire. There are things we can cut yes but, as with McCain's tax policies, what we can cut without really sabotaging ourselves never adds up to as much as rich people want to cut in taxes.

Interesting - so do you support the Farm Bill - which pays a bit of money out, I will leave out the big ticket items such as defense and social security ( a farse now that the government has been robbing the kitty). There are many governmental programs that can be reduced or better yet let the redunant state agency handle it. Take out the huge bueraracy and one might find the ability to actually balance the budget, Now will taxes have to go up across the board, yes - since we just assumed as a nation an additional 700 billion in debt we can not afford. Which makes me wonder about both parties campaign on giving tax cuts, Obama also claims to want to give a tax cut which under the current economic condition is just as foolish as McCain's.

I didn't say the rich should pay more than they do now, but I do think thare are a gazillion loopholes and ways to minimize tax liability that are not options for lower income people. I think that if we closed a lot of these loopholes we would suddenly find ourselves dealing with a surplus again. Because I do not think it is a wily minority of the very wealthy finding tax loopholes. I think it's the stubborn or unwise minority of wealthy who are not using them. And I do think that everthing from white collar crime penalties vs. blue collar crime penalties, to conviction rates, to lobbying power in government, to influence in local government (such as the Malibu homeowners getting together and shoving through a law so that the state of California has to cover their homes with taxmoney when they burn down every so often, since insurance companies aren't stupid enough to cover them affordably) to reaping the "end reward fruit" of what tax dollars pay for, all benefit the wealthy. (For example, no personal liability on the wealthy when the corporations they own default on pension plans, yet those same wealthy people still don't believe the cap on social security tax should be raised. They don't want to take any financial responsibility either way, they seem to think these sorts of problems should just fall to individuals even if they helped create said problems for people who otherwise thought they were doing the responsible thing and sought a job with a pension plan, etc.)

Agreed close the loopholes - but I would go farther and restructure the tax code. A lot of money is wasted within the IRS which could be saved for the people by removing parts of that beueracy. Yes it would cost government jobs, and maybe the private sector will pick them up and then again maybe it wont.

In states where property tax is high often the tradeoff is that sales tax is lower. California is kind of an exception; both rates are somewhat high. But Oregon as an example, has very low sales tax and higher property tax. And businesses presumably benefit because they can sell things cheaper and more of the market can buy more things. Switch that around, high sales tax and low property tax, then more people can afford to buy houses, but rich people also can afford to tie up their money in property investments and such, but it costs a little more to buy things in the store. It's a tradeoff, and I fail to see where the wealthy are hurt in either scenario honestly.

One has to look into what the tax base and what it is used for. Now for instance how many counties have free medicial clinics available for the poor that is funded by a portion of property taxes. My point was not that they are hurt - but that they alreadly pay a significant portion of the public services for which everyone has benefit for. Futher the point is that one has to look at more then just straight income tax, because taxes come from many sources.

Of course. But that's kind of a distinction without meaning or vice-versa, isn't it? The fact that most Americans cannot afford to take a month off work for chemo (and a lot of pepole might need more than a month depending on whatever their medical condition is) hout defaulting on their mortgage is a reality. I don't see how it would be any more an individual's fault for getting sick.... I mean, I guess I am not sure what you are saying. Are you saying that if someone gets seriously sick then they deserve to lose their house even more? I don't see how that serves society.

Not at all - one has to look at the cause in total. For instance some studies point out the raising number of bankrupticies in socialized medicine countries because of the loss of income associated with illness even though the state takes care of the medical issues.

Now what I am saying that the causes of bankruptcy can be intertwined with each other - put the overwelming cause is the loss of income regardless if its from losing your job or getting sick.

This is not placing blame on the person getting sick - only demonstrating that the cause is the loss of income.

[Koga No Goshi]

Interesting - so do you support the Farm Bill - which pays a bit of money out, I will leave out the big ticket items such as defense and social security ( a farse now that the government has been robbing the kitty). There are many governmental programs that can be reduced or better yet let the redunant state agency handle it. Take out the huge bueraracy and one might find the ability to actually balance the budget, Now will taxes have to go up across the board, yes - since we just assumed as a nation an additional 700 billion in debt we can not afford. Which makes me wonder about both parties campaign on giving tax cuts, Obama also claims to want to give a tax cut which under the current economic condition is just as foolish as McCain's.

Wouldn't pushing everything onto the states just increase state deficits? CA is already in deficit, as an example. This seems like just pushing the debt around, and I'm unconvinced that huge waste happens less at the state level than Federal. A state for instance would have less mass purchasing power or contract power for things like prescriptions than a nation wide purchaser does.

Agreed close the loopholes - but I would go farther and restructure the tax code. A lot of money is wasted within the IRS which could be saved for the people by removing parts of that beueracy. Yes it would cost government jobs, and maybe the private sector will pick them up and then again maybe it wont.

Could you mention what specifically is waste within the IRS? If you mean things like auditing, which yes is quite costly, it really is one of the very few things that scares a few skittish people into obeying the tax laws. I'm sure there are some wasteful branches of the IRS but I was just curious which ones you meant specifically.

One has to look into what the tax base and what it is used for. Now for instance how many counties have free medicial clinics available for the poor that is funded by a portion of property taxes. My point was not that they are hurt - but that they alreadly pay a significant portion of the public services for which everyone has benefit for. Futher the point is that one has to look at more then just straight income tax, because taxes come from many sources.

Correct, and my point is that it should stay that way. The argument I was responding against originally was the idea that the rich deserve to pay less tax, and have their tax burdens lightened. Basically the ideologically conservative mindset. I think that with loopholes, with staff lawyers and family financial planners and estate planners and such, the rich already get out of most of their on paper tax liability. So a suggestion of remove estate tax, remove graduated income tax, that floats around a lot... I just don't see where people expect the money would be coming from otherwise. I think it fits into this whole "make government" tiny thing, but I think people don't think 2 steps ahead and picture how that would look if we didn't have enough for defense or public education. Or, these are people who already use private schools and private healthcare entirely, and really don't care what effect it would have on the people who can't afford those things. My suspicion is that the people who lobby hardest for cutting taxes especially at the top end of the spectrum do it less out of a sincere belief that we will enter utopia of free market capitalist nirvana. I think it comes down more to individual wealthy people wanting to be wealthier and not liking money going to taxes. This is, of course, just a guess. But I don't see what else could be behind it when they seem unconcerned with being in a huge deficit and wanting to cut taxes on the portion of the economy fit to pay any serious tax revenue per capita.

Not at all - one has to look at the cause in total. For instance some studies point out the raising number of bankrupticies in socialized medicine countries because of the loss of income associated with illness even though the state takes care of the medical issues.

Now what I am saying that the causes of bankruptcy can be intertwined with each other - put the overwelming cause is the loss of income regardless if its from losing your job or getting sick.

This is not placing blame on the person getting sick - only demonstrating that the cause is the loss of income.

I agree, though it's a double whammy in the U.S., where you probably wind up fighting with the insurance company or having to cover large portions of your care out of pocket, while simultaneously unable to work, and still having bills and your mortgage due. I'm sure it's far from perfect in socialized medicine, but it's a double whammy for us in the present system. And that's not even mentioning the people who don't have any form of private healthcare.

[Seamus Fermanagh]

Koga:

It is simple mathematics to note that a person of modest income will pay a much higher proportion of that income in procuring necessities than would a person with a vast income -- I'm not attempting to deny reality. The idea behind the "Fair Tax" is to offset this by paying EVERY citizen a "prebate" in the amount determined to be needed for necessaries such as food and medicine. The person with a huge wage would receive the SAME amount (and think it a pittance) while the "average Jane" would receive the same (and find it financially useful). This sales tax would then be levied on ALL "retail" transactions at the same rate (c. 23%). This would mean that total tax burden in raw dollars would be much higher on the wealthy, and that actual federal tax paid by the underprivileged would be less in many instances. This system would punish spenders in favor of savings as well. To me, this seems fairer than what we have now, without placing an undue burden on those already facing steep economic challenge.

[Koga No Goshi]

Koga:

It is simple mathematics to note that a person of modest income will pay a much higher proportion of that income in procuring necessities than would a person with a vast income -- I'm not attempting to deny reality. The idea behind the "Fair Tax" is to offset this by paying EVERY citizen a "prebate" in the amount determined to be needed for necessaries such as food and medicine. The person with a huge wage would receive the SAME amount (and think it a pittance) while the "average Jane" would receive the same (and find it financially useful). This sales tax would then be levied on ALL "retail" transactions at the same rate (c. 23%). This would mean that total tax burden in raw dollars would be much higher on the wealthy, and that actual federal tax paid by the underprivileged would be less in many instances. This system would punish spenders in favor of savings as well. To me, this seems fairer than what we have now, without placing an undue burden on those already facing steep economic challenge.

I fail to see then how this would work out to be different than a graduated income tax in actual effect, except that rich people would be paying a lot less money. It's still graduated if your'e going to reimburse most of what people living check to check spend money buying and pay sales tax on. In fact, this sounds like a recipe for almost no tax revenue. So I'm back to what I said before, I see no "fair tax" proposals that wouldn't decimate tax revenue. I'd like to get into where we are supposed to make up that in terms of cutting spending. THe argument never seems to go that far.

[Redleg]

Wouldn't pushing everything onto the states just increase state deficits? CA is already in deficit, as an example. This seems like just pushing the debt around, and I'm unconvinced that huge waste happens less at the state level than Federal. A state for instance would have less mass purchasing power or contract power for things like prescriptions than a nation wide purchaser does.

Yes it very well could - which would require the state to ask for money from the Federal Government by petetioning congress. Is there some Federal government buereracies that should remain - sure for the exact reason you stated. However I would have them controlled and limited in size to prevent huge waste and fraud.

Now corruption is also in the states, and this requires the states to get a handle on the corruption within their own systems.

Could you mention what specifically is waste within the IRS? If you mean things like auditing, which yes is quite costly, it really is one of the very few things that scares a few skittish people into obeying the tax laws. I'm sure there are some wasteful branches of the IRS but I was just curious which ones you meant specifically.

Interesting anadote - is that I worked for the IRS 20 odd years ago while in college and so did my mother before she passed. Audits are indeed useful, but the system itself is full of double bueraracy. Pre-audit, audit, review, notication of audit and so forth. Then there is the tax code itself which creates a bloated bueraracy just to inform the unspecting of what new law has just been made. Cumbersome tax codes for the most part cause the waste within the system

Correct, and my point is that it should stay that way. The argument I was responding against originally was the idea that the rich deserve to pay less tax, and have their tax burdens lightened. Basically the ideologically conservative mindset. I think that with loopholes, with staff lawyers and family financial planners and estate planners and such, the rich already get out of most of their on paper tax liability. So a suggestion of remove estate tax, remove graduated income tax, that floats around a lot... I just don't see where people expect the money would be coming from otherwise. I think it fits into this whole "make government" tiny thing, but I think people don't think 2 steps ahead and picture how that would look if we didn't have enough for defense or public education. Or, these are people who already use private schools and private healthcare entirely, and really don't care what effect it would have on the people who can't afford those things. My suspicion is that the people who lobby hardest for cutting taxes especially at the top end of the spectrum do it less out of a sincere belief that we will enter utopia of free market capitalist nirvana. I think it comes down more to individual wealthy people wanting to be wealthier and not liking money going to taxes. This is, of course, just a guess. But I don't see what else could be behind it when they seem unconcerned with being in a huge deficit and wanting to cut taxes on the portion of the economy fit to pay any serious tax revenue per capita.

My arguement is that the tax code needs to be restructured to prevent just the instance that you are speaking about. The graduated system we have installed is extremely prone to abuse by all groups that pay taxes. (the problem is that the rich have lawyers and accountants to get them off, where the middleclass and the poor get to pay the fines themselves). Any system as full of loopholes that we have in our tax code has to be overhauled from the base up. I dont have a problem with graduated taxes, what I have a problem with is the loopholes that have been created and the bueraracy that is supported because of those loopholes.

Now take for instance inherientance tax - a lot of people think it only applies to a certain income bracket - and that is true for Federal, but each state also has a inherientance tax and some of them are different then the Federal. Should a family loose its family property because of inheritance taxes? some would say this would not happen but I know of several instances where this actually happened so that the inheritance tax could be paid.

And yes loopholes within the inheritance taxes also need to be removed so that its a more fair and equitable distribution of assets between the estate and the government.

Congress has made a mess of the tax code in addressing special interests, primarily corporations but some toward all groups of wealth in the United States to include the poor.

I agree, though it's a double whammy in the U.S., where you probably wind up fighting with the insurance company or having to cover large portions of your care out of pocket, while simultaneously unable to work, and still having bills and your mortgage due. I'm sure it's far from perfect in socialized medicine, but it's a double whammy for us in the present system. And that's not even mentioning the people who don't have any form of private healthcare.

Well here is where personal responsiblity comes abit into the picture, you have to investigate your health insurance before purchase. I do this every year during the company open enrollment phase of paying for my insurance for a year. So those with the ability to pay for insurance owe it to themselves to probably research their policies. (and with a bi-polar wife who is hospitalized at least yearly, I make sure that they cover the condition before enrolling.) If the health insurance company refuses to pay for an agreed upon condition that is stated in their policy, then there are recourses that the consumer can take.

But I agree the current system has a severe flaw because insurance companies often do attempt not to cover something that was agreed upon in the policy in the first place.

For the un-insured this personal responsiblity does not apply, they only have the personal responsibility to attempt to insure they life as healthy as they can.

[Koga No Goshi]

Interesting anadote - is that I worked for the IRS 20 odd years ago while in college and so did my mother before she passed. Audits are indeed useful, but the system itself is full of double bueraracy. Pre-audit, audit, review, notication of audit and so forth. Then there is the tax code itself which creates a bloated bueraracy just to inform the unspecting of what new law has just been made. Cumbersome tax codes for the most part cause the waste within the system

I work in an accounting office so trust me I see it too. We get so many faxes from clients sending us in notices they don't understand that it's not even funny.

My arguement is that the tax code needs to be restructured to prevent just the instance that you are speaking about. The graduated system we have installed is extremely prone to abuse by all groups that pay taxes. (the problem is that the rich have lawyers and accountants to get them off, where the middleclass and the poor get to pay the fines themselves). Any system as full of loopholes that we have in our tax code has to be overhauled from the base up. I dont have a problem with graduated taxes, what I have a problem with is the loopholes that have been created and the bueraracy that is supported because of those loopholes.

I agree it's a mess. I don't disagree with what you seem to be saying. I just disagree when people, without worrying about the details of it, cry out for things like "cut taxes." Especially when they really just want to cut taxes on the rich. I would prefer a simple system that doesn't allow quite so many deductions and disallowments, but look at how things of that nature tend to be HIGHLY unpopular. AMT would be one example. A simpler system that closed all loopholes for the rich I would highly favor-- but I think the same crowds crying for conservative style tax cuts would suddenly not like you if you explained what you had in mind to them.

Now take for instance inherientance tax - a lot of people think it only applies to a certain income bracket - and that is true for Federal, but each state also has a inherientance tax and some of them are different then the Federal. Should a family loose its family property because of inheritance taxes? some would say this would not happen but I know of several instances where this actually happened so that the inheritance tax could be paid.

I know of people who inherit something like 5 properties and, if they have no money, they wind up selling one to pay the taxes and keep the other four. I would be in favor of something along the lines of, people being able to name one property as a family property that can be passed along without estate tax liability. In fact to some degree this already happens in the sense that people get a $500,000 personal deduction for their primary residence. So in other words if you inherit the house from dad when he dies and you move in, you have no tax liability up to 500,000. But, if it's just a secondary property to you, and you don't want to live there... yeah, I'd have to say I see no reason why that person shouldn't pay tax on the new property. If they don't even want to live there it's hard to make the argument that it's a priceless family property with sentimental value.

And yes loopholes within the inheritance taxes also need to be removed so that its a more fair and equitable distribution of assets between the estate and the government.

Congress has made a mess of the tax code in addressing special interests, primarily corporations but some toward all groups of wealth in the United States to include the poor.

Agreed.

Well here is where personal responsiblity comes abit into the picture, you have to investigate your health insurance before purchase. I do this every year during the company open enrollment phase of paying for my insurance for a year. So those with the ability to pay for insurance owe it to themselves to probably research their policies. (and with a bi-polar wife who is hospitalized at least yearly, I make sure that they cover the condition before enrolling.) If the health insurance company refuses to pay for an agreed upon condition that is stated in their policy, then there are recourses that the consumer can take.

But I agree the current system has a severe flaw because insurance companies often do attempt not to cover something that was agreed upon in the policy in the first place.

For the un-insured this personal responsiblity does not apply, they only have the personal responsibility to attempt to insure they life as healthy as they can.

If you work for a big employer it is not my understanding that you really have a choice. And I don't think with things like healthcare it should just be a system of "well yes, there are some snakeoil salesman insurance companies out there, so don't be an idiot, do some research." It's really not cool to pay like a good little responsible person on what you believe to be a reliable, highly rated insurance company and just have them flatly deny you an operation when you are in a critical or agonized state. And, because of the "deals" that medical providers and hospitals have to make with insurance companies for the payment they actually receive for services, they have to submit these big inflated bills like $400,000 for the two week hospitalization of an elderly person, knowing that out of that amount, the insurance company pays them something like $57,000. But then what happens is someone uninsured gets a bill and.. whoa. It triple penalizes people without insurance, who end up saying screw it and flooding the ER instead.

I would consider insurance companies one of the perfect examples of how we should not put blind faith in the idea that some sort of universal service everyone will need or use is better off in private management, actually. Giving people a profit motive for not giving you a service that could later bankrupt or kill you is not a good idea. And look at doctors getting kickbacks not to do prescreening for things that are cheap and easy if treated early, but costly and much more life threatening if caught later, such as cancer testing. Or more likely insurance companies just not covering prescreenings so doctors don't aggressively push it and patients rarely ask for it or want to pay for it. It's a mess too. But it's a little OT.

[Redleg]

If you work for a big employer it is not my understanding that you really have a choice. And I don't think with things like healthcare it should just be a system of "well yes, there are some snakeoil salesman insurance companies out there, so don't be an idiot, do some research." It's really not cool to pay like a good little responsible person on what you believe to be a reliable, highly rated insurance company and just have them flatly deny you an operation when you are in a critical or agonized state. And, because of the "deals" that medical providers and hospitals have to make with insurance companies for the payment they actually receive for services, they have to submit these big inflated bills like $400,000 for the two week hospitalization of an elderly person, knowing that out of that amount, the insurance company pays them something like $57,000. But then what happens is someone uninsured gets a bill and.. whoa. It triple penalizes people without insurance, who end up saying screw it and flooding the ER instead.

After leaving the military iin 2000 I have worked for two compaines - one a mid size corporation and it had two different insurance policies with three or four options for each one, same insurance company however.

THe company I work for now is a Class 1 railroad and its insurance package consists of two insurance companies with each having at least 2 types of policies with options within that policy. Which requires me as the end user and consumer to pick the best one to suit my needs.

Now as for denying insurance that was agreed upon before payment began the legal system should hold that company liable for any resulting damage from their failure to pay.

And then as a consumer of a hospital bill that the insurance didnt want to pay, well I negoated with the hospital and the insurance company for them to pay a smaller amount with a portion at about 20% to come out of my pocket - which was my alreadly agreed upon rate.

So what am I saying - is that I agree that the insurance companies are often running a racket where the consumer gets the short end of the stick, and the system does need adjustment to be either more beneficial to the consumer or overhauled to a different system. But this goes to the arguement about taxes - nationalized health care requires that taxes be paid. Now a system that takes my insurance payments and puts it into a nationalized system is alright with me - but not if its an additional amount that I alreadly pay.

I would consider insurance companies one of the perfect examples of how we should not put blind faith in the idea that some sort of universal service everyone will need or use is better off in private management, actually. Giving people a profit motive for not giving you a service that could later bankrupt or kill you is not a good idea. And look at doctors getting kickbacks not to do prescreening for things that are cheap and easy if treated early, but costly and much more life threatening if caught later, such as cancer testing. Or more likely insurance companies just not covering prescreenings so doctors don't aggressively push it and patients rarely ask for it or want to pay for it. It's a mess too. But it's a little OT.

Interesting and worth discussion - having lost several family members to cancer. For instance my mother's lymp node cancer was discovered when she went in for her regular check up and had an elevated white cell count. Regular medical checkups are a personal responsiblity and often do not require insurance to have done. Well except for the blood tests when you get over 40.

[Koga No Goshi]

After leaving the military iin 2000 I have worked for two compaines - one a mid size corporation and it had two different insurance policies with three or four options for each one, same insurance company however.

THe company I work for now is a Class 1 railroad and its insurance package consists of two insurance companies with each having at least 2 types of policies with options within that policy. Which requires me as the end user and consumer to pick the best one to suit my needs.

Now as for denying insurance that was agreed upon before payment began the legal system should hold that company liable for any resulting damage from their failure to pay.

And then as a consumer of a hospital bill that the insurance didnt want to pay, well I negoated with the hospital and the insurance company for them to pay a smaller amount with a portion at about 20% to come out of my pocket - which was my alreadly agreed upon rate.

So what am I saying - is that I agree that the insurance companies are often running a racket where the consumer gets the short end of the stick, and the system does need adjustment to be either more beneficial to the consumer or overhauled to a different system. But this goes to the arguement about taxes - nationalized health care requires that taxes be paid. Now a system that takes my insurance payments and puts it into a nationalized system is alright with me - but not if its an additional amount that I alreadly pay.

Well most people work for small companies/businesses, as I do. There is one plan and you either take that or you are offered a very small (we're talking works out to like 1/hour) extra increase in pay if you opt not to take the health insurance. While I know that BIG employers probably have a couple of options, I do not have the good fortune to know a lot of people who work at big places like Sony or Microsoft or places that have a lot of options. It's nice that you have options but if the small companies I have worked for are any indication then single policies or PPO's are pretty usual.

Interesting and worth discussion - having lost several family members to cancer. For instance my mother's lymp node cancer was discovered when she went in for her regular check up and had an elevated white cell count. Regular medical checkups are a personal responsiblity and often do not require insurance to have done. Well except for the blood tests when you get over 40.

I'm sorry to hear that. But there are always going to be instances of someone who's 30 never dreaming they need to go in and specifically ask for regular prescreenings for something like I dunno, liver cancer or lung cancer. And then get it. Part of the disgust I think people have for the private healthcare industry is the glaringly obvious point that most of the hands involved are there for profit, and profit can frequently mean not putting the patient's well being first. If insurance companies offered deductions or cheaper rates or in some way showed a proactive interest (and it would even help them!!!) for people to get prescreened for things that are easily treated if caught early, that would be something very much in their favor. But of course in general they don't, and scandals of doctors being paid not to offer proactive testing or screening are well documented. Bottom line is, unfortunately, you really have absolutely no way to know what is going to happen until you get sick. Then, when you do, you can wind up thinking your insurance company is great, or wind up in a legal battle. I think the very low confidence in the private health insurance industry is not all just.. psychological whiner-ism. :) Most people have personal accounts, or at least 2ndhand accounts, of why they think insurance companies are scum. I think we can do better.

[Seamus Fermanagh]

I fail to see then how this would work out to be different than a graduated income tax in actual effect, except that rich people would be paying a lot less money. It's still graduated if your'e going to reimburse most of what people living check to check spend money buying and pay sales tax on. In fact, this sounds like a recipe for almost no tax revenue. So I'm back to what I said before, I see no "fair tax" proposals that wouldn't decimate tax revenue. I'd like to get into where we are supposed to make up that in terms of cutting spending. THe argument never seems to go that far.

It's designed to be revenue neutral. Though I'm all for decreasing federal spending where possible.

All "embedded" taxes would be knocked off, leaving just the sales tax a point of sale. People spending for big ticket items would be taxed the most (e.g. I buy a 20k car and shell out 24.6k; scion of wealth buys his electric roadster for 109k and pays 134+k; we both get the same 1k check each month from the government) No item/service would be exempt from taxation save for illegal items/services. Revenue would also be enhanced by tapping into the monies that currently go untaxed in the gray market or those monies used by criminals to make legitimate purchases. Moreover, it would serve as a disincentive to illegal immigration since they'd end up paying taxes without receiving services (which is the reverse of current practice in some instances).

As to cutting spending, I agree it needs to be done. Slowing growth across the board should be doable, though actual "cuts" would be far mor difficult politically. As a conservative, I can think of several programs/portions of government that could be cut away entirely -- though i suspect that some would disagree.

[Koga No Goshi]

It's designed to be revenue neutral. Though I'm all for decreasing federal spending where possible.

All "embedded" taxes would be knocked off, leaving just the sales tax a point of sale. People spending for big ticket items would be taxed the most (e.g. I buy a 20k car and shell out 24.6k; scion of wealth buys his electric roadster for 109k and pays 134+k; we both get the same 1k check each month from the government) No item/service would be exempt from taxation save for illegal items/services. Revenue would also be enhanced by tapping into the monies that currently go untaxed in the gray market or those monies used by criminals to make legitimate purchases. Moreover, it would serve as a disincentive to illegal immigration since they'd end up paying taxes without receiving services (which is the reverse of current practice in some instances).

As to cutting spending, I agree it needs to be done. Slowing growth across the board should be doable, though actual "cuts" would be far mor difficult politically. As a conservative, I can think of several programs/portions of government that could be cut away entirely -- though i suspect that some would disagree.

That's PRECISELY the problem. "Cut taxes" sounds great just as a cry in a vaccuum. So, politicians cut taxes. But cutting spending? Well, there's not nearly as much sheer waste as people tend to imagine, at least, there is very little that would be widely agreed to be nothing but waste. A few billion here or there. Nothing in the grand national budget overall. Make a few programs a little more streamlined and less wasteful, okay, that might make some services slower and less responsive but maybe you save a little money there too. But when it comes right down to it, the sort of absolute hatchet to tax revenue that rich people in the U.S. propose will not entail little cuts. It will entail cutting things like SS, education or medicare. And no matter how much cut taxes may sound good, the idea of going back to a society where old people die in rags on the street of some curable disease is not something the public truly wants to stomach. That's why I think the debate is always kept at "cut taxes" , the part that sounds good, and never gets into what programs would be cut to balance the new budget. Like McCain, who refuses to give any details on what he'd cut other than "pork", which is chumpchange next to the tax cuts he proposes.

[Seamus Fermanagh]

...But when it comes right down to it, the sort of absolute hatchet to tax revenue that rich people in the U.S. propose will not entail little cuts. It will entail cutting things like SS, education or medicare. And no matter how much cut taxes may sound good, the idea of going back to a society where old people die in rags on the street of some curable disease is not something the public truly wants to stomach. That's why I think the debate is always kept at "cut taxes" , the part that sounds good, and never gets into what programs would be cut to balance the new budget. Like McCain, who refuses to give any details on what he'd cut other than "pork", which is chumpchange next to the tax cuts he proposes.

I think chump-change is hyphenated....

Actually, on this last post of yours, you and I more or less agree. I want lower taxes, will settle for neutral, but ALL of it will come for nought unless spending is seriously curtailed and you and I are in agreement as to how difficult that would be politically.

I want the feds out of education entirely. I'd like to see social security and medical coverage privatized (a phase out, not a cut-and-run), while reluctantly accepting that some federal role mandating retirement savings is necessary as there are those who simply will not save unless forced to do so. I accept that some welfare/medicaid program will be necessary for the truly indigent -- but would prefer the federal government to be out of it (I'm a big proponent of government decision-making at the lowest possible level).

Such changes would be politically difficult at best.

The only way to cut spending down to a "balanced budget" without offending too many "sacred cows" that has been demonstrated recently is the approach used by the Clinton and to a lesser extent the Carter administration. Tighten up a bit on the growth rate of most programs, limit federal hiring a notch, and pull the military back to about 50% of its current expenditure. This necessitates a far more passive foreign policy, however, and the effective abandonment of lengthy (and slightly nebulous) conflicts such as the War on Terror. Since this military reduction wasn't coupled with a more strongly isolationist foppo, however, it created its own problems.

[Koga No Goshi]

Seamus,

Well thought out post. And yes chump-change looks better hyphenated, but I wasn't even sure if it was a "real word" so I didn't bother about it. ;)

I think that the battle over taxes is a proxy battle, because the real issue is the one almost never discussed, the fact that what a lot of ideological conservatives and/or The Wealthy want to get at is huge spending cuts. They have managed to put some icing on this and make it sound great in public discourse like Governor Palin or McCain talking about pet programs to do DNA testing on polar bears, but we know that's not where the bulk of tax money goes and it's dishonest to pretend that we can just cut a bunch of things that no one will ever miss. You seem to agree with me there.

But, to get straight to the point, I think there are two Americas. There's rich America, which includes people who for various reasons defend the rich, hope to be rich one day, or simply identify themselves with the interests of the rich. And there's everyone else America. I'm everyone else America. That doesn't mean I want a free ride, but it means that I think a system that says earn everything yourself, pay for private education, private healthcare, private retirement, private this, private that, the only thing you should have from government is fighter jets over your head, is a luck system. That's the kind interpretation, it says everyone gets to take their chances at not being poor, not getting a serious illness, not being laid off at a really bad time when the mortgage is due. And in such a proposal it's hard to say that those who will wind up homeless or penniless were just personally irresponsible because it is unrealistic given the pay structure and the distribution of wealth in the United States to expect that even the most anal-retentive savers will have enough onhand at any given moment to cover a layoff, a bout with cancer, or a natural disaster.

The less kind interpretation, and probably the one I lean more towards, is that this simply sets up a scenario where those who already have wealth will maintain nearly exclusive access to all the avenues of future wealth and success, while everyone else will struggle over generations to try to move up, afford better schools than their parents had, survive a bout with cancer without going bankrupt, etc. I think given the distribution of wealth reality presently in the U.S. to say we are all even, now go make your fortunes and take care of yourselves is beyond any sort of ethical or moral comprehension. If we were talking about doubling or tripling the pay that Americans in the lower and middle classes earn, that would be one thing, but we know that wouldn't be the case, nor are taxes so insanely high on businesses that it is an amount equivalent to doubling or tripling their employees' pay. So, I think telling people save up 20-30,000 dollars per year to send your kid to school (including primary and middle and high school, not just college) and pay for all your own healthcare needs, etc., is little short of calling for a modern incarnation of feudalism.

[Seamus Fermanagh]

...but we know that's not where the bulk of tax money goes and it's dishonest to pretend that we can just cut a bunch of things that no one will ever miss. You seem to agree with me there.

Yes.

But, to get straight to the point, I think there are two Americas. There's rich America, which includes people who for various reasons defend the rich, hope to be rich one day, or simply identify themselves with the interests of the rich. And there's everyone else America. I'm everyone else America. That doesn't mean I want a free ride, but it means that I think a system that says earn everything yourself, pay for private education, private healthcare, private retirement, private this, private that, the only thing you should have from government is fighter jets over your head, is a luck system. That's the kind interpretation, it says everyone gets to take their chances at not being poor, not getting a serious illness, not being laid off at a really bad time when the mortgage is due. And in such a proposal it's hard to say that those who will wind up homeless or penniless were just personally irresponsible because it is unrealistic given the pay structure and the distribution of wealth in the United States to expect that even the most anal-retentive savers will have enough onhand at any given moment to cover a layoff, a bout with cancer, or a natural disaster.

The less kind interpretation, and probably the one I lean more towards, is that this simply sets up a scenario where those who already have wealth will maintain nearly exclusive access to all the avenues of future wealth and success, while everyone else will struggle over generations to try to move up, afford better schools than their parents had, survive a bout with cancer without going bankrupt, etc. I think given the distribution of wealth reality presently in the U.S. to say we are all even, now go make your fortunes and take care of yourselves is beyond any sort of ethical or moral comprehension. If we were talking about doubling or tripling the pay that Americans in the lower and middle classes earn, that would be one thing, but we know that wouldn't be the case, nor are taxes so insanely high on businesses that it is an amount equivalent to doubling or tripling their employees' pay. So, I think telling people save up 20-30,000 dollars per year to send your kid to school (including primary and middle and high school, not just college) and pay for all your own healthcare needs, etc., is little short of calling for a modern incarnation of feudalism.

Wow, for a moment I was hearing John Edwards, but then I noted that the stuff following "two Americas" was coherent.

Re: layoffs, cancer, disasters and the like. I'm a believer in insurance as a means of transferring risk. Nobody can completely predict and prepare for all things. If the government ends up serving as the insurer of final resort for the 2-3% who can't get any coverage at all under any circumstances because their risk level is so high, then that will probably need to happen. As it is, the federal government is too much involved in disasters etc. as the FIRST insurer. Trying to be supportive of everyone for everything is a chimera.

Of course we're not all "even." Never occurred to me that we would or could be. Those who have wealth will maintain that advantage until you steal their wealth from them at the point of a gun. Most of them worked hard to earn it. Those who simply inherited did get "lucky" but how does that subtract from your chance at success?

Also, I said I wanted the FEDERAL government out of education. County and City governments -- a level we're more than willing to kick out of office and who are, therefore, more responsive to the electorate -- are the appropriate venue for this. The Founders knew that taxation was part of government, but they very much tried to craft a system where that taxation was occurring on a local level whenever possible. It matters.

[Koga No Goshi]

Seamus,

I'm at work, so I will have to respond in more length later. But in the meanwhile I just wanted to put up this link since I am sure I will lose it later.

http://blogs.wsj.com/wealth/2007/05/...r-family-made/

It mentions both of our "theories" about wealth, though I think the analysis left out of this article by the author is included in the reader comments below. I think the first or second comment is a reader post that, even when the rich did not directly inherit their wealth in a straight transfer or inheritance from the parents, they received it indirectly by the ability to choose any school they wanted to attend, regardless of cost, as well as other factors.

Additionally, legacy programs almost universally reward spots in prestigious schools to the children of frequently rich or well off alumni, regardless of their merit in many cases. And this has become such a huge part of incoming student bodies for some of the most prestigious universities that the level of competition for anyone else to get in on merit becomes skyhigh. One of many ways that people from middle or moderate backgrounds, regardless of talent and effort, become bottlenecked and start at a disadvantage compared to even mediocre peers from richer families.

[Koga No Goshi]

Wow, for a moment I was hearing John Edwards, but then I noted that the stuff following "two Americas" was coherent.

The baby isn't mine.

Re: layoffs, cancer, disasters and the like. I'm a believer in insurance as a means of transferring risk. Nobody can completely predict and prepare for all things. If the government ends up serving as the insurer of final resort for the 2-3% who can't get any coverage at all under any circumstances because their risk level is so high, then that will probably need to happen. As it is, the federal government is too much involved in disasters etc. as the FIRST insurer. Trying to be supportive of everyone for everything is a chimera.

Well remember that private insurance is the reason that the Federal Government HAS to be involved as a "first insurer" for a lot of things. Even rich people don't want to pay the premiums for things like wildfire or earthquake or hurricane, let alone everyone else! As I've mentioned before, here the rich people with their lawyers and political connections all got together, all the people who had multimillion dollar homes in Malibu, and shoved through a bill where the state now has to cover reimbursing them when their houses collapse or burn down in wildfires, because they didn't want to pay the high private insurance premiums. (And of course, because they keep insisting on rebuilding luxury homes in an area which will just naturally be devastated by wildfires every so often.) The fact that private insurance companies are deregulated sufficiently to the point where, they operate on a "no loss" philosophy where they only want to cover for conditions, or cover individuals, who will never need insurance payouts in the first place, and modify premiums accordingly if the person has ANY risk of ever needing to file a claim to the point where it gets prohibitive, is a big part of the problem and why the Federal Government has to step in when a natural disaster strikes or State and/or Federal governments get stuck with the bill when there is a serious health problem in an area. (Sometimes the "serious health problem" is just the fact that no one in a considerable area can afford private insurance, so they are overburdening the emergency rooms of state-funded hospitals.) So any discussion of replacing "Big government" with "private insurance" will entail massive reform and regulation of insurance industries, and that kinda goes against the largesse and philosophy of small government pro-private business change doesn't it?

Even if we say "people should take personal repsonsibility and not build or buy homes in areas prone to disaster", and advocate for NO insurance whatsoever for said people, then you still have to deal with the fact that there are millions of people who live in areas where, once every century, there is a major earthquake, but otherwise people never even think about natural disaster. Or places where the unexpected can and will eventually happen, out of the routine. The current private insurance system would not and does not cover for such things anymore than it covers people living in disaster prone regions where it could be argued that people might be expected to "know better."

Of course we're not all "even." Never occurred to me that we would or could be. Those who have wealth will maintain that advantage until you steal their wealth from them at the point of a gun. Most of them worked hard to earn it. Those who simply inherited did get "lucky" but how does that subtract from your chance at success?

Also, I said I wanted the FEDERAL government out of education. County and City governments -- a level we're more than willing to kick out of office and who are, therefore, more responsive to the electorate -- are the appropriate venue for this. The Founders knew that taxation was part of government, but they very much tried to craft a system where that taxation was occurring on a local level whenever possible. It matters.

Alright first off let me dispel the idea that I'm proposing 100% pure socialism and 100% equal distribution of everything. That is a common straw man (I know you weren't making it, I'm just addressing this point generally) when people talk about the enormous disparities of wealth and access to resources in the U.S. I find these disparities largely unjustifiable in the richest nation on earth, and with how much of our wealth is concentrated in so few hands. To me "Communism" and "90% of the wealth in the top 10%, and 30% of the wealth in the top 1%" (Source: CIA World Factbook) is an ENORMOUS continuum and there is a lot more middle ground than "free market or Communism, take your choice."

I am not, nor would I, propose that someone making $110,000 should have to hand over $30,000 in taxes to cover the medical bills of someone making $50,000 and thus make them even. And I think that is so far out of what I am proposing in fact and so out of proportion with the wealth disparities we are talking about in the case of the U.S. that when people start to make that criticism I sense I must be winning. :) We're not talking about that, even with the Obama tax structure we're not talking about anything like that whatsoever, and people who posture otherwise are being dishonest. (Let me say again I know you have not suggested any such thing.) I am proposing that saying that someone with 60 million is more entitled to their tax cut than someone working and making $38,000 needs chemotherapy or help when a tornado takes their roof off is inexcusable with the wealth available in the U.S. I think that's a highly immoral proposition in fact, and I think that to say that the rich earned their money so they are entitled to keep more of their money for further wealth acquisition or luxury while saying that someone less well off who also earned their money doesn't deserve things that can keep them alive and working, and teaching, or contributing to society in some fashion, unless they can pay for it themselves, doesn't serve society. I think this is an "I got mine, it's all about me, and I'm closing the door behind me" proposition in the face of the wealth distribution in the United States.

I do think it's patriotic to pay your fair share. And I think that paying more out of loads of money you never need to ensure your wealth and that of another generation is fair, if it helps the nation overall "keep up", maintain standards of quality of life and opportunity, access to necessary healthcare, adequate education, and get out of staggering debts. The wealthiest, who benefitted most from being a member of our society, somehow bearing less responsibility when that same society digs deeply into debt or can't afford the wars it is waging, is an argument I do not understand. I do not understand a mindset of special privilege wealthy have over their money that never seems to extend to people with less, and that tax is somehow more evil when applied to a rich person than a poor person. I am by no means poverty stricken but I make considerably less than six figures and I pay my fair share of taxes, perhaps a bit more being a single male without a mortgage or other large deduction on my taxes. And I do not feel a special right to get out of my tax burden just because I work for what I earn, because there's some kid out there from Appalachia with leukemia. And there's some family out there with 8 people living in one house who are about to send the first member of their family to college. And there is a single mom out there with breast cancer. And I will not improve our society more by getting back the money I pay in taxes and spending it on a better car than what I drive, or a plasma TV and newer cellphone, than keeping that mom alive will. View it in terms of cost:effectiveness if you want to get really er, calculated about it. I can work for a few days to earn the equivalent of a nice plasma TV. I couldn't earn enough in five years to contribute into society more than what kids having their mom, or a family not being homeless, or a veteran having the care he needs instead of holding a sign on the freeway onramp, is worth. IMHO.

Given what faces the typical American family over a lifetime of work, I think the idea that what must take precedence in our policy is how to return the maximum amount possible to the rich from their tax burdens, is very uncivic.