Les Jones

Who are you, and what have you done with Les?

A tax on the wealthy is less onerous than a tax on the poor and middle class.

And it's hard to get less onerous than a tax on really, really rich dead people.

The estate tax taxes a lot of already taxed money and taxed property. What more does the government/vampire want?

Progressive taxes are a slippery slope. Personally I'm for an absoulutely regressive tax system.

If you must tax income, I propose a minimum tax due of $2000/person/year. No exeptions, got a TID? You owe the tax. Besides the $2000 you would pay 10% of everything you earn over $10,000 per year.

I make a lot of friends with this idea.

Marc: progressive taxes are also a mighty decent thing for people who are barely making it, especially if they have kids. Some people would be in miserable shape without it.

I'm also in favor of the Earned Income Tax Credit, which is a negative income tax that provides help for working families with children - they get their taxes back and then some, but they have to have a job to earn it. The people I've known who have gotten it really needed it.

"The estate tax and minimum wage are in the news this week." -- LJ

Howdy! Do yourself a favor and visit Walter Williams' website to read this:

http://www.objectivistcenter.org/ct-1750-.aspx

It's long but *well* worth your time, and you'll never, ever be able to support the "minimum wage" again.

"I find it perfectly reasonable for the rich person to pay more taxes." -- LJ

Hmmm...seems oddly familiar. Ah, of course:

"From each according to his ability, to each according to his needs!"

-- Critique of the Gotha Program , 1875 - Karl Marx

I'm figuring that if the tax collector can force folks like you and me to sell some of our fancy grips and give that money [likely at a 20% or so pass-through rate] to the poor and deprived, they could buy a Lorcin or two to get them started on their own firearms collection.

"I'm also in favor of the Earned Income Tax Credit, which is a negative income tax that provides help for working families with children - they get their taxes back and then some, but they have to have a job to earn it. The people I've known who have gotten it really needed it." -LJ

The EITC is not a negative income tax; it is a redistribution-of-wealth program.

If you doubt me, check this URL:

http://www.taxfoundation.org/blog/show/341.html

Key quote:

***With the wealthiest 1 percent of taxpayers paying roughly 33.7 percent of income taxes and earning just 16.5 percent of income, it's hard to argue they're not paying a fair share by any reasonable definition of "fair."***

Since being posted in Oct. 2005 in reference to 2002 statistics [I believe the latest available are for 2004], the trend has strengthened; i.e., it's even more distinct. How much do the productive members of society have to bear? How fair is it for the lower half of taxpayers to pay less than 4% of all taxes and for the top half to pay over 96%?!?

There's 'progression' and then there's 'outright extortion' under penalty of prison...or worse.

"But double taxation occurs with some frequency."

As does circular reasoning. The death tax [your heirs have to pay it when you reach the end of your productive life] is not only morally reprehensible [it's legalized theft] but is a punishment to those people who have worked hard all their lives to provide for their families.

I'm not moving anywhere. I'll just continue to do my best to help clients send as few tax dollars to The Swamp as possible.

...Alex the CFP

Alex: I don't dispute that the wealthy pay a higher percentage of their income. What I'm saying is that it's less burdensome on them than it is on someone making much less. Taxes on the very rich (which is who we're talking about with the estate tax) lead to loss of luxuries. Taxes on the much less well off lead to loss of necessities.

This is all relative, of course, and depends on the levels of taxation, but I don't find a modest estate tax with big exemptions fundamentally objectionable.

For the EITC, everyone I've known who got it had at least two kids. I'm in favor of kids being on at least survival wages, no matter how little their parents can earn working. It's not a permanent payout, and it requires the parents to work.

As far as the minimum wage, I'm agin it (and I'm in favor of the EITC in part because I think it's a superior alternative to the minimum wage), but that's a post for another day.

"Alex: I don't dispute that the wealthy pay a higher percentage of their income. What I'm saying is that it's less burdensome on them than it is on someone making much less."

Your original contention is flawed.

As the numbers clearly show, it's much more burdensome on those who are productive members of society...the more you succeed [ain't that America at its finest?] the more you are punished. The bottom line is that there is a point where the curves must cross. On the date when those who vote and depend on a government check reaches 50% plus one, our society as we know it ceases to exist. This isn't a new interpretation...it has existed for millennia.

"Taxes on the very rich (which is who(m) we're talking about with the estate tax) lead to loss of luxuries. Taxes on the much less well off lead to loss of necessities."

Well...no. I suspect you'd be appalled at the current definition of "rich" in the IRS code. Further, real growth in our economy cannot possibly be funded by increasing taxes on those who produce...those who start companies, hire employees, and [as the last five years witness] *increase* tax revenues because of their successes and the success of their employees.

I've never known a person on the dole who had the wherewithal to start a company and pay competitive wages to employees. As the numbers clearly show, the lower 50% of taxpayers not only pay a tiny percentage of Caesar's tribute but actually get *rewarded* for it.

For all those folks who ride in the wagon, there must be a multiple of folks who actually pull the wagon. If near half the population of taxpayers contribute *negatively* [given the EITC] to funding the every-increasing burden of state and federal governments, what other conclusion can we reach?

The so-called 'Great Society' is a miserable failure; trillions of dollars of tax revenues have been squandered with no appreciable effect on the "poor of society". Despite the fact that the official "poverty line" has been consistently "adjusted" for political reasons, the percentage remains appallingly the same; i.e., the difference is less than one percentage point from 1969 to 2005.

The reason is simple: rewarding negative behavior results in increasing negative behavior.

If you pay people to do nothing, they're inclined to do nothing as long as the checks show up on the 1st of the month.

Basic human nature!

Further, a perfect analogy is the proposal that some small percentage of contributions to the mandatory social security system [what an oxymoron!] be placed in private accounts.

Instead of the default position which currently exists [confiscating all contributions when the contributor dies], private accounts would allow the contributor to gift those funds to their heirs. What could be more fair for those who have worked all their lives, under threat of felony penalties for non-compliance, to pass their retirement accumulations to their heirs?

How 'bout lunch one day? Should be fun!

...Alex the Radical

EITC isn't sitting around waiting for a check every month. You have to have a job to get it.

In this country most people aren't poor their whole lives or rich their whole lives. They move around in different tax brackets through the course of their lives. They can contribute more taxes when they're in higher brackets, and less when they're in lower brackets. Giving breaks to people when they're in the poor phase of their lives can help them break out of that phase.

"EITC isn't sitting around waiting for a check every month. You have to have a job to get it."

I have no problem whatsoever with EITC [or like programs such as WIC] as *temporary* help. I've had in-laws who accepted that help and they darn well earned it. There is, however, an entire subculture which knows to the penny how much a taxpayer can earn and still collect the EITC.

A colleague of mine manages an H&R Block office part-time. He was initially puzzled by how close the low incomes were for so many people. Until he checked the regs. Many of his customers worked until W-2 totals hit within literally dollars of the limit and then quit their jobs.

Start of the new tax year, they're back collecting paychecks again. Of course, these same people make most of their income in the underground economy. It's likely as hard for you to imagine people intentionally staying poor their entire lives as it is for me. But it happens...and truly productive taxpayers suffer for it.

Again, we're on the road to reaching that critical mass where the majority of adults will collect a gummint check each month. That's not the sort of future we want for our kids.

People often ask me if true revolution in the tax system such as THE FAIR TAX wouldn't hurt my business. Yes, initially...then we'd see a growth among investment and savings like nothing this country has experienced in modern times.

Alex, I have no doubt that there are people who abuse the system. That's not just EITC. That's farm subsidies and a heck of a lot of other government programs. Better controls are always good. But there are some people who desperately need some of those programs to survive, and I don't want to cut them off to spite the ones who are abusing them.

"But there are some people who desperately need some of those programs to survive, and I don't want to cut them off to spite the ones who are abusing them."

Neither do I. We're on the same page...but the point I've made is that the abuse of these programs cannot continue to grow unabated without the eventual collapse of same. The emergency net is admirable; there could hardly be a more disfunctional, ineffective and corrosive system, however, than that currently run by state and federal governmental entities.

There are solutions at hand but they require that citizens hire the representation needed to implement them. After all, we deserve the government provided by those we elect.

I don't like the trend...it worries me tremendously re: the future of our country and the lives of our children and grandchildren.

Thanks for the great thread, and my thanks for all the work it takes to maintain a successful forum like yours.

Offer for lunch still stands. :)

Lets try a different tact les...

"Those services are paid for by taxes and someone has to pay them."

True. I also think that they goverment should not tax things that are inheritant to existance. I belive it is immoral to tax work, houses, and the food we eat, and death. Shelter, food, and water take work to get.

"If you believe in the free market, why not set taxes at what the market will bear?"

You left out an important part of free market thought. Incentives....when the goverment taxes work, they provide a disincentive to work!

Look at the relative tax rate for consumption and work. You wonder why many americans are in debt, and some choose not to work at all. Why should the goverment put in disincentives for things like work, saving, and investing....it is illogical.

Though putting in place a consumption tax and removing taxes on income, investing, saving, and death, would discourage spending and encourage saving which is somthing that would be great for individuals and the country.

The goverment does not have a right to a half, a thrid, or even a quater of what I make!

Cube: yep, if I was going to get indignant about a tax I'd get indignant about a tax on the fruits of my labor, versus a tax on inherited wealth. There are lots of taxes more objectionable than an estate tax.

Here is something for you on "Tax Cuts"
Suppose that every day, ten men fo out for dinner 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.
The first 4 men (the poorest) would pay nothing.
The 5th would pay $1; The 6th would pay $3; The 7th would pay $7; The 8th would pay $12; The 9th would pay $18 and the 10th (the richest) would pay $59. The 10 men ate in same restaurant every day and were quite happy, until one day the owner threw them a curve. Since you are all such good customers, I'm going to reduce the cost of your daily meal by $20. Dinner for the 10 now cost just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still eat for free. But what about the other six men-- the paying customers?? How could they divide the $20 windfall so that everyone would get his fair share?? They realized that $20 divided by six is $3.33. But if they subtracted that from everyones share then the 5th and 6th man would each end up being paid to eat their meal. The restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. SO.. The 5th man, like the first 4 now pays nothing(100% savings); The 6th now paid $2 instad of $3 (33% savings) The 7th now paid $5 instead of $7 (28% savings); The 8th now paid $9 instead of $12 (25% savings); The 9th now paid $14 instead of $18 (22% savings) The 10th now paid $49 instead of $59 (16% savings) Each of the 6 was better off than before. And the first 4 continued to eat for free. But once outside the restaurant, the men began to compare their savings. I only got a dollar back out of the $20 declared tyhe 6th man. He pointed to the 10th man, he got back $10. Yeah, that's right, exclaimed the 5th man, I only saved a dollar too. It's unfair that he got ten times more than me!! That's true, shouted the 7th man. Why should he get $10 back when I got only 2. The wealthy get all the breaks. Wait a minute yelled the first 4 men in unison. "We didn't get anything at all. The system exploits the poor" The nine men surrounded the 19th and beat him up. The next night the 10th man didn't show up for dinner, so the nine sat dwon and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill. And that folks is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start eating wverseas where the atmosphere is somewhat friendlier.