The points you list are all short-term demands that are supposed to eventually lead to a state of communism. Once you do away with private property entirely, then obviously there's no taxation to worry about at all. In the communist utopia there are no "sales" or "profits" or "paying" at all. The progressive income tax is only suggested as one part of a short-term strategy to create the conditions that would allow actual communism. Right, that's the idea - it's supposed to lead into the abolition of graduated income as part of the next stage. You don't seem to understand Marxism, or the Communist Manifesto, very clearly. These things are all explained on the very Wiki page you linked to.
Another neat factoid on the history of US income tax has to do with the bracket spread. I just did a little checking to discover that from 1913 to 1941 the lowest tax bracket paid an approx average of just 2 percent...while the highest tax bracket paid an average of 53 percent. So during that time period, low income people paid about 8 percentage points less than in 2011...while the wealthy paid about 18 percentage points more.
Thomas Paine endorsed a progressive tax long before Marx. I think he was rather influential among our founders.
Former Governor of New Mexico Gary Johnson came out recently as the Libertarian candidate for president, and gave a run down of his policy positions in this interview. http://www.youtube.com/watch?v=8qR8KTcsjY8&feature=g-all-f Of interest here is his support of ending corporate tax as a way of making US exports "23% more competitive"...thus balancing trade and stopping the flow of American wealth to foreign nations. Of course, this would also mean lower retail prices for US citizens on domestic goods and services...but this saving would be negated by a new consumption tax which would replace income tax.
Consumption taxes burden the poor, income taxes burden the rich. We currently have a glut of rich people's money piling up in the banks, so much that a couple of my local credit unions have announced they will no longer pay interest on accounts over 100k. They can't find anyone to lend to, is the problem. That's the kind of situation one creates by a failure to tax incomes of the wealthy - all those untaxed capital gains and stock option cashouts and bonuses for doing their jobs and huge pay raises the untaxed rich have acquired since 1980 are piling up, where in the past under Roosevelt's progressive income tax setup they would have been payroll or capital expenditure by either government or corporate agencies - either way, contributing to the creation of jobs and productivity and demand for goods and services.
I posted my tax ideas more than 4 years ago here: http://www.sciforums.com/showpost.php?p=1792841&postcount=1 Here are some of the highlight, necessarily precisely stated to not be vague hand waving, but read the original (and please note flaws): PURPOSE, PRINCIPLES and DEFINITIONS: Taxes, T, … pay only part of government expenses. Rest is from trade et.al. Duties, D; Bonds, B; Gifts, G; and Charges, C such as sale of postal stamps … I.e. Government Revenue, R = T+D+B+G+C is available for authorized expenditures. Three types of Government expenditures can be authorized: Operational, O, and Investment, I, and Security, S = Sp + Sw. (Peace time and in war limitation are different), which includes all military costs plus law enforcement expense except for salaries, which are O type expenses. Operation expenses cannot be paid by issue of bonds, B nor can S expenses, unless a state of war has been declared … Thus, to the extent D+G +C does not cover O+Sp, then T must be collected. {Pay as you go, not leave debts to the yet unborn} US corporations pay no taxes but must distribute all profits to US residents or citizens subject to tax laws; However, profits may be retained for expansion, adverse conditions, operational capital, etc. for a maximum of 10 years. … Any funds retained longer than this period … must be transfer to the Treasury within six month to avoid 20% annually applied penalty. Foreign corporations … {see original} Individuals, US residents and non-resident US citizens are subject to the US tax laws, and pay taxes in accordance with two progressive tax tables, one related to their income and the other to their accumulated net worth, … Income is ANY money received, except monetary gifts, plus the fair market value of all services or assets received; however only the net income is taxed. … Inheritance & Gifts: Transfer of wealth upon death is subject to taxation only via the receiving individual’s taxation on the corresponding increase of their net worth. … Monetary gifts are not income; they only directly add to the recipient’s net worth. … Deductibility of Gifts:Half of all annual monetary gifts to IRS or to qualified non-individuals (usually charities or political organizations) up to 100 times the prior year’s minimum wage may be used to reduce total of your income. … ”Qualified” Gifts Receivers: The IRS may qualify only US corporation and organizations, which are subject to the “10 year” maximum retention rule on all monetary gifts received and are not primarily religious in nature and purpose (Separation of Church and State). … TAX COMPUTATION: …Your income component of taxes is given by function I(i) where i is your gift-reduced income received … I(i) = {a very simple formula, but has annual changes so T is “pay as you go”, not debts to generations to come, except Sw may cause bonds to issue. Preservation of freedoms benefits the not yet born too.} Most individuals may use the “Income Tax” table ... Your wealth component of your taxes is given by the function W(w) = …. But most individuals may use the “Wealth Tax” table and for many W(w) = 0. Your total taxes due this tax payment period, T, are: T = I(i) + W(w) – AP where AP is the amount Already Paid by withholding from salary or by other means, including any prior payments you made directly to the IRS during this tax year. … {High income or wealth people must pay more than once per year, and the "upper 1%" monthly. Others pay in the month of your birthday so Government has more steady revenue and IRS needs fewer employees.} PS in posts in the original thread I note (1) how plan is phased in, (2) great competitive advantage (and thus more jobs) corporations get both from more exports, and by firing all their tax department people, (3) That corporation´s annual report already report all the data IRS needs, (4) Congress must tax the current generation for the benefits it gives out, (5) and most importantly with no tax breaks for anyone, all decisions are based on their economic merit, not on how to play the IRS for greater deductions. (a "level playing field" economics system) Fair, rational and efficient* as this plan is, it will never be passed by Congress as they like the corporate lobbyist and their "donations" - That all ends if there can be no special advantages for some. * Do your taxes in five minutes using law written on a 3 by 5 index card, not 30,000 tax books only a few can exploit.
So, you propose to outlaw deficit spending, except for war expenses? That would prevent stimulus efforts, and in fact mandate pro-cyclical effects that would exaggerate downturns. I.e., suppose a recession hits. This causes tax revenue to fall below expectations. The government then is forced to either slash spending by the same amount (which makes the recession even worse) or raise taxes (which makes the recession even worse). Have you not noticed that your plan there is very similar to the ones that the Republican party likes to campaign on recently? But much of the stuff Congress spends on benefits subsequent generations (infrastructure, education). If the current generation has to pay for everything, then they'll never vote for anything that benefits future generations - you are mandating that the government adopt an artificially, destructively short planning horizon. Any tax code that does away with the mortgage interest deduction is DOA, and without invoking any spooky "corporate lobbyists" either. If you did away with the mortgage interest deduction today, a good percentage of the country's homeowners would be forced into default in short order, which would in turn crater the housing market, which would cause all manner of cascading negative effects. It would be chaos. Even if you think it's a good idea to do away with it, you'd have to phase in such a change over multiple decades. Why should we reasonably expect that the taxation policy appropriate for a huge, modern country ought to be able to fit on a 3x5 card? This sounds more like a pandering stump speech, than a serious economic analysis. Too much complexity is bad, but then so is too much simplicity, and you've given no bar by which we can guage what is the right amount.
I believe only citizens should be taxed...as only citizens vote. Taxing corporations is only an 'indirect' way of taxing citizens. But can you give an example of how your 'ten year' waiting period would work?
It certainly seems that it would be possible for the total tax bill to exceed a person's income, if they have large wealth but low income. Also seems to me that the wealth tax would have to be indexed to a person's age, or it's effectively a tax on being old. How could anyone retire, under such a scheme?
Strip corporations of the right to lobby, or otherwise engage in political speech, and I can agree with this.
The right to petition the government is guaranteed by the first amendment, but this refers to the right of 'the people'. I dont know if a corporate lobby is legally defined as 'people'. There has to be some communication between government and the corporate world, but it should happen in public hearings where business leaders are called to answer questions before a committee.
Corporations themselves are defined as "people" for the purposes of that law. See the famous Citizens United decision.
Your link is about petitioning the public through advertising. The first amendment is about petitioning the government. It states... "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." I suppose it could be argued that corporate lobbies represent organizations of 'persons' as shareholders...who's right to petition the government should not be restricted simply because they are represented as a group. Some amendment rights are NOT extended to corporations...such as 'pleading the fifth'.
Okay... which is a form of political speech, right? Uh, the first amendment is about free speech in general. Keying onto the word "petition" is a red herring here. You could argue that, but nobody would actually go for it. It is actually still illegal for corporations to donate to political campaigns - the Citizens United ruling only says that they can run as many ads they want in favor of their preferred candidate.
The most time consuming part of most people's taxes is calculating their "net income". Your plan does not address that - and probably can't. Not yet, anyway. Ten years ago if someone had told me that the Supreme Court would soon declare corporations to possess the Constitutional right of free speech as people, and that their money used to pressure and bribe politicians was such protected speech, I would have appreciated the joke. Being governed by such jokes is less amusing. I can see the right to avoid self-incrimination extended to corporations, as people, by this Court. It's plausible, given the right case. Meanwhile, I think all legal people should pay Federal income tax, on a progressive scale.
Yes. I will admit that things like QE1 &2 (and soon 3 but with some other name) do make short term stimulation but also make long term economic disasters of un-payable debt accumulation. When youner I though Keynesian ideas were correct (and they probably are IN PRINCIPLE). In practice, several decades under both parties have show that when times are good, the government ignores the Keynesian concept of running surpluses that off set the stimulus deficits used when times were bad. No, I am not suggesting that. I am suggesting that the current generation should conduct it economy so as to benefit future generations, not burden them with ever growing debts. These benefits includes investments in infrastructure and schools etc. BUT ONLY TO THE EXTENT THE CURRENT GENERATION PAYS FOR THIS. People want their children to have a better life than they had and will support infrastructure and education to achieve that. Current system of issuing bonds often for not needed infrastructure, but for local make-work job creation does not benefit future generations (or even the current one sometimes). Can you say "bridge to no-where"? Current system of bond issue has gotten so bad that it has destroyed the opportunity for future generations to even live as well as their parents did. Ask any intelignet college student if he thinks he will be better off than his parents were, or if he will ever see a dime´s worth of benefit from the 10s of thousands of dollars he will pay into Social Security (which is helping fund current government expenses, not invested for him). They know the current generation of their parents has screwed them badly. I.e. my idea in my tax plan is this generation gives real net benefits to the future generation, not un-payable debts. Of course new tax plan is phased in. Some what arbitrarily, I suggested 10 years and a linear phase in (but perhaps a non-linear phase in is better?) A commission would be needed to chose the best phase in plan. I chose 10, linear as it is easiest to illustrate: I.e in first year you compute your tax as you do now and find you owe M and also compute with the new plan and find under it you owe N. Then what you pay is P = 0.9M + 0.1N and second year it is: P = 0.8M + 0.2N etc. A phase in of only 10 years would make the home mortgage deduction worth only about 90% of its value in the first year, and yes that would be some economic stress, but there are many benefits to Joe Homeowner, when the wealthy are not getting the tax breaks the lawyers discover in the 30,000 volumes of tax code. Recall that in my tax plan, the Congressional Budget Office, CBO, adjusts the tax computation formula each year to cover the expenditures of Congress and the "Fund as you go" legislation requirement operates 100% in year one. Also, the threshold for zero wealth tax, again set by commission study, is probably in the range of 50 million dollars net worth or more. Also note, that on average most stocks are owned by the well off. Corporations pass their profits mostly to them, and they tend to have higher marginal tax rates than the corporations were paying (This is the third of several more reasons I have just listed why LESS WILL BE COLLECTED from the typical home owner. (Others, not him are losing their tax loop holes; Congress is more reluctant to spend as they know the CBO will set the tax formula factor (for pay as you go) higher, and anger voters; income originating in corporations pays on average a higher tax rate (= equal marginal rate of the wealthy) Yes typical Joe Homeowner will get say 10% less interest deduction in the first years but still pay significantly LESS tax as the wealthy pay more and government builds no more "bridges to no where." Also note that this Sacred Cow benefits only a small part of the population - Nothing for renters and many, like the baby boomers, have paid off their mortgages. As under my plan the wealthy will pay much more I know the Plan will have strong well organized resistance. Rich Republicans etc. will call it "class warfare' "soak the rich" "destroy the job creating class" etc. (BTW, they never tell where those jobs were created - I will in China, with people like Buffett expanding the Chinese auto company BYD and now owning 10% of it. etc.) When Joe Homeowner with a mortgage understands that he will pay LESS, he will not be so concern that plan kills his scared cow along with the rest of the herd. I.e. ALL the sacred cows die! Because "Income is Income" -does not come in 30 or 40 different forms (like short term vs long term capital gains etc.) AND everyone pays on the same progressive schedule. There are "tax tables" like now for those who can not evaluate the two simple formula that are printed on the "3 by 5 index card". One is T(i) = ..... the tax on your income. & other is T(w) = ..... the tax on you accumulated net worth. Note for at least 85% of the population, T(w) = 0.
