Swiss-cheese tax codeEdit
Over the years, we -- through the government -- have imposed taxes on certain activities for two purposes: to raise money to run the government, and to provide incentives and disincentives for activities taxed or not taxed. The income tax, for example, is not expressly intended to disincentivize people from earning money, while cigarette taxes are intended to incentivize people to smoke less. But there is a point at which taxes intended for one purpose may have effects more like taxes intended for the other: sin taxes become significant money-raisers for governments because people continue to smoke, drink, and gamble despite high taxes. Income taxes may not cause people to stop earning money, but they do provide strong incentives for tax avoidance (such as tax shelters, or moving offshore). One of the effects of the income tax (as well as other taxes originally intended solely for fundraising, such as property taxes) is that individuals and businesses lobby Congress and the state legislatures for exemptions, deductions, credits, and waivers to avoid tax. The result is a Swiss-cheese tax code that only a lawyer could love (and as an attorney, I can say that most of us detest it as well). The complexity of the code imposes direct costs on the economy for compliance, as well as indirect costs as actors try to fit their activities into the numerous, narrow exemptions, deductions, etc. I was never a big proponent of the flat tax as such, because I'm not convinced that multiple brackets are an evil in themselves. However, I do agree that the number of deductions and exemptions should be greatly curtailed, to reduce the direct costs of compliance and to ameliorate the warping of the economy that occurs when individuals and businesses try to squeeze themselves into those deductions. If doing so means that we can afford to lower marginal tax rates, so much the better. We should start by lowering the rates at the bottom -- not to zero, because everyone should bear some of the costs of operating the government, but a five percent bracket would be reasonable at the bottom. -jrcchicago, 7/6/06 9:30am.
National Sales TaxEdit
There are several groups, notably Americans for Fair Taxation (Fair Tax), that advocate a national sales tax to replace the income tax. A proposal pending in the House of Representatives (H.R.25) would enact such a tax structure if made into law.
Some of the ideas underlying the National Sales Tax are:
- One rate with no exclusions, instead of hundreds with hundreds of loopholes.
- A monthly refund on taxes paid for essentials.
- A simplified tax system.
- Curtailing tax corruption.
- Eliminating (Or dramatically weakening) an expensive, over-powerful, and abusive organization - the IRS.
- Relieving the strain of doing taxes, for business as well as individuals.
- The poor are totally untaxed (provided a refund for essential goods is established)
- Visitors to the US would fund our tax system
- Revenues illegally earned (by illegal aliens, "under the table" work, drug peddlers, etc.) would be subject to taxation when they purchase goods.
- Would encourage savings because the amount of taxation would be directly proportional to the amount of goods purchased.
- Corporate tax structure would increase jobs domestically, which could have an effect of decreased pollution because of the shift away from low regulation nations.
- Incentive for black markets
- Creation of the national sales tax does not preclude introducing new income tax legislation through a separate bill (see Great Britain).
Land Value TaxEdit
Land value taxation (LVT) (or site value taxation) is an ad valorem tax where only the value of land itself is taxed. This ignores buildings, improvements, and personal property. Because of this, LVT is different from other property taxes which generally tend to fall on real estate - the combination of land and improvements to land. (See Geolibertarian FAQ for more details)
In analyzing taxes, opinions vary on what services the government should provide, and how they should be funded. Some argue that people's taxes should corespond to the services they receive from the government, while others advocate more heavily taxing certain groups. However, it isn't always clear how to determine how much an individual benefits from a government's service. For instance, would poverty reduction programs more greatly benefit the poor through direct means, or the richer people through benefits to the overall economy.
According to libertarian ideology, the government should be a legalistic strongman. Taxes are a necessary evil for the costs of enforcing contracts. It is wrong for the government to forcefully take people's wealth, but it cannot be avoided. Thus, while a publicly funded military is okay because it is necessary to insure individual rights, most things should be left to private enterprise.
Using the words "Tax relief" makes you think of taxes as something to be relieved from, which is counter to progressive ideology. Under social liberalism, taxes are our the patriotic dues we pay to be Americans - they are the fees we pay to benefit from everything society gives us. Tax shelters aren't results of "incentives", they are a fraud, where anti-American corporations leeching off our society - if they use our patent office to our justice system, they should pay the taxes that support them.
- I'm liberal, but when economists talk about incentives, they're not making any statements one way or the other about character. It's possible for there to be an economic incentive for companies to cheat on their taxes, while at the same time remaing true that companies that exploit that incentive are doing something wrong. The incentive still exists, and it still creates problems. (Of course, you can't expect companies as wholes to do anything other than behave in their economic interest; corporations are chartered as such.) Tlogmer 08:42, 8 July 2006 (UTC)
- I think you missed the point, grandparent way saying that the title of this page is biased. Can I suggest changing it to "taxation"?--184.108.40.206 02:40, 9 July 2006 (UTC)
- In other words, talking about tax shelters as a result of bad incentives is like talking about muslim extremism as a result of bad incentives.--220.127.116.11 02:43, 9 July 2006 (UTC)
- Exactly. Tlogmer 08:49, 11 July 2006 (UTC)
- I signed up and moved the page accordingly. If we have a page dedicated to 'tax relief', someone should do a linguistic analysis, explaining exactly what the phrase means, who uses it, and when it came about.--AntiBias 02:46, 9 July 2006 (UTC)
Between the many forms, and the AMT, I have finally given up and paid to have someone do my taxes. When congress starts realizing too many people are having trouble calculating their estimated taxes - you know the spaghetti that is our tax code is too complicated. I believe taxes are the price we pay for a civil and safe society. I am well off, and I still believe the well off should pay a lot more than the poor. In a country with an $11 trillion GDP, no children should be hungry and government has a role in fixing that any many other issues that provide equality of opportunity
--Gil 07:00, 8 July 2006 (UTC)