Thursday, February 23, 2006

Tax Reform Ideas

Since we're throwing around the merits of the Fair Tax and at least Pat is wanting to talk about tax reform, I'd like to hear everyone's thoughts on how to best reform our current tax codes both at the state and federal levels. I've included a link to a listing of tax reform and oversight groups. I haven't really looked over the list thoroughly yet but there are at least a few organizations I recognize at first glance. I'm sure the list isn't exhaustive. I'm not sure how tilted the list is on the political spectrum. If I find this link to be bunk or find a better list, I'll repost a link.

33 comments:

Dante said...

One of the things I'd like to see happen is a drastic simplification of the federal tax code. The tax code is used far too often as a tool to provide political favors and shower money on particular groups. While I certainly see the need for deductions on purely business expenses, I'd like to see them further limited. I'd also like to see tax credits eliminated entirely. At the very least, I'd like to see tax credits that cannot result in the taxpayer owing a negative sum in total taxes.

I'd like to see a system in place where once every 10 years, we don't withhold federal income taxes before they're due. It would be a needed rude awakening to the folks who actually think they get money from the federal government at the end of the year.

I'd like to see an end to corporate taxes. Taxing a corporation makes little sense. Corporations don't make money. I'm very serious here. In fact, corporations that end the year with large amounts of money that hasn't been distributed to shareholders is subject to some pretty nasty penalties unless they can justify the need for hoarding the money. Corporations get the money needed to pay taxes from the consumer. If you look up the "dead weight" issue mentioned in the fair tax thread, you'll see that it makes no difference whether this tax is imposed on the buyer or the seller. Placing this tax burden on the buyer is merely an attempt to hide taxes from the consumer.

It was actually a liberal who mention this next idea to me. I really like it. He proposed that the federal government give us an itemized receipt of exactly where our tax money went. If you paid $5000 to the feds this year, then you'll get a receipt showing where every penny of that $5000 went to. I'd really like to see that implemented at the state level in Georgia since I pay about 2/3 of the amount I pay the federal government in state income taxes. Seems to me like I'm really not getting my money's worth there.

Another more extreme idea I heard a long time ago that I find very interesting is a system where you owed you taxes as you normally would but spending programs would be categorized and you could choose how much of your tax bill went to each category. Don't like military spending? Put your money elsewhere. Don't want to pay for welfare? Then don't. I like it but I could certainly see that system being abused by creating bogus categories that merely channel the money directly back to the folks who put it there. I could also see some categories getting too much money proportionally.

Patrick Armstrong said...

I'll get to the agreements first.

One of the things I'd like to see happen is a drastic simplification of the federal tax code.

Hear, hear! Amen. And all that. Though there may still be a need to subsidize some businesses & necessary industries (cheap produce sure is nice), less exemptions to business and interest groups means more competition for consumer dollars & less corruption in handing out those favors and exemptions.

It was actually a liberal who mention this next idea to me. I really like it. He proposed that the federal government give us an itemized receipt of exactly where our tax money went. If you paid $5000 to the feds this year, then you'll get a receipt showing where every penny of that $5000 went to.

I'd love to get a copy of that when I'm sittin' down to do the taxes this year.

petallic said...

I only have two suggestions - one out of principle and one out of principled self-preservation.
#1. Lesbians and gays should not have to pay another dime in taxes until they're given their due right to be married. Until they're given their rights to life, liberty, and the pursuit of happiness, I don't think they owe the government a dime. (I don't see this one ever making it to the tax code.)

#2. Civil servants should pay fewer taxes. If your job serves the public good (firefighter, police officer, teacher, etc.), then you deserve to get something back...other than derision and condescending looks. Even one tax free year every five years would suit me just fine.

Patrick Armstrong said...

I believe simplification of the tax system and making expenditures more efficient will actually allow us to pay government employees at actual market prices for their jobs.

More transparency with where our money goes = less graft & waste.

There is no question in my mind that firefighters, teachers, soldiers, police, & paramedics deserve more pay raises than U.S. Congressmen & Women (who were probably already rich in the first place).

If we instituted the line item taxation (picking what you pay for - the last thing in Dante's first post) the Education system & Military would get a bumper crop and we wouldn't pay Congressmen anything....

Dante said...

Petallic, I have to disagree with your #1. Giving someone an apple because you took away their orange is a bad, bad idea. The issue of marriage and civil unions has nothing to do with paying for the infrastructure of our federal government (or even state one for that matter). I could see cutting them a break for tax money taken in and being spent on the institution of marriage, but exempting them from taxation entirely because of a disagreement on natural rights is not a good precedent to set.

I do like your #2 idea though. I've never really seen the point of levying income tax against civil servants to begin with. It's government money they're making. Why are we taxing tax money?

dadvocate said...

One tax reform I'd like to see is no hidden taxes. Dante's right about corporate taxes. Corporations don't pay taxes, you do. The corporations pass the cost of the taxes on to the consumer.

There are also all sorts of taxes that add to the cost of the items. I just found this 47 page guide at the IRS on excise taxes. It would be laughable if it weren't true. Items that are subject to excise taxes include: fishing tackle boxes (virtually all sport fishing equipment), bows, arrow shafts and arrow components, local phone service, almost any sort of fuel, tires, vaccines, ship passengers and more. Pretty amazing. And this doesn't include the taxes on alcohol, tobacco, and God knows what else.

According to the Tax Foundation the tax burden of Americans has gone from 5.9% in 100 to 29.1% ins 2005.

S.A.W.B. said...

Petallic -
#1 is in no way a federal issue. It's a state issue. Right now, gays and lesbians have the same rights as the rest of the country when it comes to marriage, which is, in every state right now, marriage is defined as a civil, legal union between a single man and a single woman.

Want it changed? Go to the governor.

#2 has always intrigued me, for the same reason as Dante. It's tax money already, why tax it twice/thrice/etc. But, that's never stopped the government before, which is why your state overpayment refund gets taxed the next tax year.

petallic said...

I'm okay with either one of your suggestions concerning my #1. "Cut them a break for tax money taken in and being spent on the institution of marriage," or since it is the state denying them their rights, simply do not make them pay state taxes.

I do not understand requiring financial support from citizens you are not willing to recognize as human (which is the clear implication with Jim Crow laws denying marriage rights).

S.A.W.B. said...

No one is not being recognized as human. Equal protection under the law as it is currently written is being applied. Handing a group a handout because they don't agree with the current legality of something is preposterous. The same statutes apply to men and women who want to live in polygamous marriages.

Currently, there is no state that allows for a bigamous, or polygamous, marriage. The difference with that, however, is that the IS a federal statute that outlaws bigamy/polygamy.

The same rules also apply to those men and women, over the legal age of consent, who want to marry those under the age of consent. If the state that you are in does not recognize the marriage that you want to have, you have two choices. Find a state that does, or don't get married.

Do you think that either of those groups deserve the same handout that you are proposing for gays and lesbians who are disgruntled with the current marriage laws in their respective states? What about handing out handouts to pedophiles? How about to the marijuana activists? They don't agree with something that is applied in either federal or state statute. Shouldn't they get the same handouts?

petallic said...

I did not intend to hijack this thread, nor will I carry on doing so, especially when homosexuals have been compared to pedophiles.

On that note, I'm respectfully out.

S.A.W.B. said...

I didn't compare homosexuals to pedophiles in the interests of inferring that they are one and the same. I compared them because some members of both groups take issue with the language of current state and federal legal statutes, and if you want to give handouts to one group, you might as well open the gates to any other group that has issue with the language of a current federal and/or state statute.

We can talk about tax reform, the gay agenda, and anything else you'd like, on this forum. We can even combine the topics. However, if you're going to get offended at an argument that doesn't contain any inflamatory language, then perhaps you'd best turn your head when I post.

petallic said...

Settle down, Scooter. Take a deep breath. I am not offended; I simply recognize when two people are at an impasse, especially when I am one of the people involved. Being a participant in that impasse gives me the right to respectfully bow out, which I attempted to do. I even used the word "respectfully." Sheesh.

I can certainly see your point that interest groups should not get rewarded for being an interest group. I can understand your view that people should not get a handout just because they disagree with the government.

You make a valid point. And yet I still disagree with you.

I do not see homosexuality as comparable to polygamy. I do not see homosexuals as comparable to marijuana activists. I do not see homosexuals as an interest group. Full stop. We are at a stalemate of ethos.

petallic said...

As most of you know, I teach high school. Today we had our Black History program, and our keynote speaker was the woman who in her youth was the first of two students to integrate Walton County. She spoke of what she and her friend endured, and I was very moved. In addition, she spoke of a time when she and her mother were involved in a traffic accident, and the white woman in the other car came into her lane and struck her. When her mother told the policeman, "She crossed into my lane," he looked at her and said, "You don't have a lane." Her mother was deemed at fault for the accident.

Just because the law says something, SAWB, doesn't make it right. And if we have to stop paying taxes, or throw some tea in the damn harbor, then what's what must be done. I'm not going to agree to something just because the law says it's right.

I do not see homosexuals as a special interest group, just as I do not see African-Americans or women as special interest groups. I see them all as people who deserve the same rights. If the governement took away my right to vote today, I would stop paying taxes. If the government told me I couldn't own land, I would stop paying taxes. If the government told me that only white women could breed, I would stop paying taxes, despite the fact that I am indeed a white woman. No one American should have rights that another American doesn't also have.

This isn't about special interest groups for me. It's about human rights.

patsbrother said...

There actually is a federal law abridging homosexuals' right to marry. It's called the Defense of Marriage Act (DOMA), which says that states do not have to enforce a civil union or a gay marriage if such would be violative of the policies of that state. However, this, and the very many newly coined state constitutional amendments defining marriage as between one man and one woman and precluding the recognition of unions created in other states, are very likely violative of the United States Constitution. And not in the way the right to privacy was interpreted into the Constitution, but explicitly laid out in ink on parchment.

The Full Faith and Credit Clause requires the States to recognize unions created in other states. If you get married in Georgia and move to California, you married for the purposes of California. Get married at 16 in State X and move to where the legal age to marry is 18, you're still married.

The question becomes, when married couples from Conneticut or Massacheusetts or those joined by civil union in Vermont move to other states, will their unions be recognized? The strict legal answer is yeah. We will likely soon hear conservative pundits decrying liberal activist judges for upholding the clear letter of the Constitution. Yippee for us.

One final note: the dire end of the world, floodgates argument has been made before. In the primordeal time we call "a couple decades ago", when men and women of different races were forbidden to marry in some states but allowed to do so in others, this argument was made before. In violation of the Full Faith and Credit clause, courts would declare their marriage void. In Tenneessee, thankfully in a very long time ago, a court held that extending the Full Faith and Credit Clause to allow miscegenation would lead to father marrying daughter, polygamy, and Turkish Mohammadeans carrying on their harems on the courthouse steps, and leave the people of Tennessee no remedy for these ills. But that even the harem, and the polygamy, and the father marrying his daughter - none were so vile and repugnant as the union between a black and a white.

Anti-miscegenation laws were finally wiped off the face of the nation within my lifetime. The floodgates are open: where is the flood?

mikey said...

Ok, I know I haven't commented here for a while and it's clear that was a mistake. (see how silly the arguments get when I'm not around, Pat?)

First of all, let's talk a little about equal rights and taxes.

I hate to agree with a conservative, but S.A.W.B is right when it comes to marriage being a state issue. Sure, there is DOMA, but that's really an unenforcable law since, as Pat's Brother pointed out, state's have to abide by full faith and credit.

The crux of the issue is that the Federal did have something to say about marriage--in the first ammendment. Marriage is a RELIGIOUS ceremony, a sacrament, and as a result neither the states nor the federal government have a right to impede on its expression.

That being said...it has absolutely nothing to do with taxes and any attempt to equate the struggle for homosexual marriage rights with the civil rights struggle is absurd and downright insulting.

No one is saying that homosexuals don't have the right to vote and gay folks aren't getting lynched for wanting to ride in the front of the bus.

Are there prejudices against homosexuals in this country? Sure. Should they be addressed? Absolutely. But when I turn on the TV I see more homosexual characters portrayed in a positive light than I do African-American and this is how long after King died?

But let’s get to the original point—TAXES.

Yes, the system does need to be simplified. But we need to do that in a way that retains the progressive tax structure. People who benefit more from the system should pay more back into it…simple as that.

Here’s an interesting note for all you folks irritated by “hidden taxes.” Right now in South Carolina, only about half of the sales taxes assessed are collected. Why? Because of a long, convoluted list of special interest sales tax exemptions. For instance, a person buying an airplane in SC pays the same dollar amount of taxes as a person buying a $10,000 automobile. Likewise, there are no sales taxes on newsprint or paper bought to use in mass mailings (i.e. junk mail is tax exempt.)

To make a long story short, SC gives away about a fourth of its budget to these special interest exemptions.

Am I in favor of making the tax code more transparent? YES!!!!!!!!

A couple more quick ideas then I’m done. How about a special tax levied on businesses that have fewer than 90% of their total employees (full-time and part time) insured. In other words guys like Wal-Mart with upwards of 40% of their employees drawing Medicaid pay an additional tax. (I bet we’d see this uninsured problem clear up pretty quick)

Also, there are a number of tax credits available to home owners to ease the burden of property tax. The idea is that it should be very difficult to kick someone out of the home they’ve lived in for 30 years because the property values around them shot up. I agree with this general principal. My problem is that these same exemptions are available on second, third, and fourth homes. I’m sorry, but a house you’re renting out to someone is not a residence. It’s a business and should be taxed as such.

petallic said...

"You can't compare gay rights with civil rights, they say. Dozens of no-name black ministers across the country have stepped in front of cameras in recent months to win their 15 minutes of fame by repeating this transparently ridiculous bumper sticker slogan.

Of course you can compare gay rights with civil rights. According to Webster's, to compare simply means "to examine the character or qualities" of something "in order to discover resemblances or differences."

Keith Boykin, former White House aide to Clinton

I will admit, however, that linking gay rights to taxes is silly. I was being flip in my original post about that, and I thought I conveyed that with the disclaimer tacked onto the end, but apparently not. If gays are to ever refuse to pay taxes, I would much rather it be as an act of protest, not a part of the actual tax code.

Oh well, will teach me not to attempt humor with a bunch of fellas.

mikey said...

"You can drive a car with your feet; that doesn't mean it's a good idea."

Chris Rock - comedian

Humor's one thing. What you expressed is a position I've actually heard before, that people are actually taking.

Humor is a good thing, and I support it. But even if a bad joke is just a joke, it's also just bad.

S.A.W.B. said...

Wait, what? Mikey agreed with me? I'ma go lie down somewhere with a cool cloth on my forehead...

Buzzzbee said...

If you guys are still taking Tax Reform Ideas, I've got one:

I would like to see a simple, graduated income tax system with no sales tax.

ex.
Top 0.5% pays w% of income
Next 1% pays x% of income
next3.5% pays y% of income
Next 45% pays z% of income
Etc.


I guess I'll start with the logic behind ending the sales tax:
I'll start with deadweight loss.

I think there is a little bit of a misunderstanding about deadweight loss and what it is. I think what Dante is thinking of is the tax-burden. Who actually pays sales tax is dependant on the elasticity of demand and elasticity of supply. Generally, the consumer pays part and the seller pays part.

Deadweight loss is something completely different. Deadweight loss is essentially the loss of business caused by sales taxes. Sales taxes essentially raise the price of goods causing demand for said goods to decrease. The loss of demand hurts businesses because

Lowered demand= Lowered sales

Plain and simple.
This hurts the consumer because his dollar won't buy as much anymore. This also, is pretty simple to understand.
If a pack of gum costs $.99, you have to pay $1.05 now with tax. $.99 doesn't buy you a pack of gum now.

Basic stuff. It may not seem like a big deal until you apply that lowered demand to essentially all trade in the country.

Another reason I prefer an income tax only system, is because it places more of the tax-burden on the wealthy. I'm sure there will be a lot of talk about the poor, pitiful wealthy, and how they pay too much, but you aren't going to pull any pity out of me. The reasons are many and I don't intend to go into them here, but they range from philosophical (ex. how earned is their money) to common sense (ex. They get more out of this country they should pay more). If you insist on trying to counter those examples feel free, I won't fight you over it and thus you'll get the last word. I'm just trying to shed some light on where I stand and why I would favor this system.

And don't say income taxes are a disincentive to try and be successful in business. That's the biggest load of crap I think I've ever heard. You show me a businessman who tries to make less money in order to pay less in taxes, and I'll show you a man in the wrong profession.

Lastly, wouldn't it be nice to go into a store and pickup some items and know exactly what you're going to pay at the register? Imagine you pickup something that costs $19.99. You get to the register and you only pay $19.99. You don't have to break that second $20. Your already overly complicated life just got a little bit simpler.

In closing, I'll say this:
We enjoy many services provided to us by our gov't. From roads to schools to police to coast guard to fire and rescue, most of us couldn't imagine life without these services and the convenience and security they provide. Unfortunately these things cost money. Regardless of what kind of taxes we use, we have to pay for them eventually. Sale taxes hurt business. It's time we get away from them. God knows we're going to need a helluva revenue service and as strong an economy as we can get when it comes time to pay for this debt Jr made.

Patrick Armstrong said...

But I was only gone for three days...

1. As far as I'm concerned, as long as single, white men with really real jobs have to pay taxes, everybody's paying taxes. Membership has its priviliges - like the Interstate, which I am on a first name basis with after this weekend.

I admit that may not the best attitude towards either the tax situation or the current thread.

Wait a minnit, I know how to fix this....

Patrick Armstrong said...

2. There's a marriage based thread we all can enjoy.

Now, back to this tax issue...

BTW, Buzzbee, "God knows we're going to need a helluva revenue service and as strong an economy as we can get when it comes time to pay for this debt Jr made." Man, we used to say the same things about Reagan and Bush 1, then a Democrat named Bill Clinton showed up and fixed the whole thing in, what, five years? Out of debt and into the money in no time at all.

That's right folks, the way to financial security is to Elect rakish Southern Democrats!



Hi, my name's Patrick....

Buzzzbee said...

I couldn't of said it better myself.

Patrick Armstrong said...

I know. That's why they pay me the big bucks, right?

(Politics 101: Some issues are more attention grabbing than others. I wonder how long it will take the likes of SAWB and Dante to find out we're talking about a Clintonian economy down here on the tax thread whist they're reading Mikey's talk about marriage and religion up above...)

Dante said...

Pat, rest assured I've been keeping an eye but I've been a little busy to say anything. Your views on the "Clintonian" economics are technically correct even if they are incredibly naieve. If it weren't for the Republican takeover of Congress on Clinton's watch, there never would've been a Contract with America for Clinton to take campaign ideas from in 96. Of course, I do give Clinton a lot of credit for stepping up and being the fiscal conservative in 96 since the Republicans decided it would be a good idea to run a candidate who's not much of a conservative in the middle of a conservative uprising in America. I even give Clinton credit for following through with some of his more conservative campaign promises.

Laddi said...

Dante, I truly think the only reason the Contract on America worked is due to the gridlock between Legislative and Executive branch. Giving a party free reign surely isn't working now for the long-term. I wish they'd just pass a Constitutional amendment requiring Legislative/Executive gridlock.

patsbrother said...

FYI: Clinton and Gore reduced the federal deficit by half in the two years before the Contract with America.

And Clinton did not get us out of debt. He just stemmed the flow.

Dante said...

Umm, the Contract with America was introduced in 1994. Here's the Wiki but I'll look for a better source: http://en.wikipedia.org/wiki/Contract_With_America Two years before that would be 1992. Clinton wasn't President in 1992.

And Clinton definately did not get us out of debt. I'm pretty sure Andrew Jackson is the only President who can claim that (and given the situation, staying in debt was probably the wiser course of action at the time).

patsbrother said...

Alright: before the Republican takeover (election in 1994, swearing in in 1995), Clinton's administration (election in 1992, swearing in in 1993). There were two years between the advent of the Clinton administration and the influx of the Republicans takeover of Congress.

The Contract with America was a political election strategy, so I consider it beholden to the election schedule.

Patrick Armstrong said...

The point is, it is still hyperbole to say that Bill Clinton alone was responsible for the surplus. I like to think he had a pretty big role, (and evidence suggests that he did) but not one man can control everything in an economic cycle.

I just like pointing it out.

Another thing I like pointing out, which I didn't have to, because Dante did it for me, is that the GOP has controled the US House of Representatives since 1994-95.

That's eleven years of Republican control.

Tax law and budget bills do originate in the US House of Representatives, do they not?

So where's my smaller government? Where's my tax relief? Where's my simplification?

If Republicans really cared for these things (as opposed to just saying them to get elected) they would have fixed them by now.

Dante said...

Clinton did have a big role and even Gore had a bigger role than he'll probably ever get credit for thanks to his work on that red tape comission.

"So where's my smaller government? Where's my tax relief? Where's my simplification?"

Fiscal responsibility is hard work. As long as they don't have to worry about it, they won't. The Democrats are just keeling over and giving Repulicans ample head room in other areas (primarily the war on terror and national security) that are a lot easier to campaign on. Why should the Republicans bother? Democrats are going to have to take away the easy issues from the Republicans so that the Republicans will tackle the hard issues like fiscal responsibility again.

It doesn't help that the Republicans elected a "Compassionate Conservative" President who they are afraid to oppose.

Buzzzbee said...

Actually, unless I'm mistaken, the end of '95- beginning of '96 saw the federal gov't shutdown. After which, the Republicans drew a lot of heat and had to concede to Clinton's budget proposal. So, if that's when you guys feel the economy turned around, you're gonna have to give Bill the credit for that one. I believe the Republicans washed their hands of the whole thing and foretold of impending doom and economic crash that would be the result of Clinton's budget.

Seems like if he was just stealing their ideas, they'd wouldn't have made such a fuss over it.

Dante said...

"I believe the Republicans washed their hands of the whole thing and foretold of impending doom and economic crash that would be the result of Clinton's budget."

That's because Clinton was on the "spend more" side of the equation. Given the same economic circumstances and a budget that spent less (the Republican-backed budget), the yield would've been even higher. In hindsight, we can all see that the extra money Clinton spent was not enough to matter.

patsbrother said...

Mistress Mikey, Quite Contrary: how does your ego grow?

To compare gay rights and civil rights is not offensive unless (to use a word you seem to like) you're dumb. Civil rights do not mean black rights. It means those rights granted by the government to one group are shared by all, barring a significant state policy to reasonably and justifiably exclude another group or groups. You can distinguish gay marriage from the civil rights issues of the past; that doesn't mean that analogies to modern issues are in some way offensive to your sensitive emotions.

If you characterize the historical fight against anti-miscegenation laws as a civil rights issue (and I do), then there is clear precedent for classifying a movement to expand the institution of marriage to include a group that has been denied marriage rights as a civil rights movement.

You can distinguish this by saying homosexuals are allowed to marry members of the opposite sex just the same as heterosexuals, and thus are accorded the same rights as other Americans. And I can analogize that argument to the distinction that, under the old laws, no one was denied the right to marry within their own race, and that a gay marriage ban is just as niggardly and aribitrary a line as the other. Both arguments are reasonable; argree with one, the other, or neither: don't cry your crocodile tears of offense. The issue of civil rights is not a shrine encased in glass, and it is appropriate still today, in areas outside those we associate most with the third quarter of the last century.

And outside the issue of marriage: I know you're from South Carolina, but surely even you can see that hospital visitation rights, inheritence rights, adoption rights, child custody rights, exemptions, and the rest are issues of civil rights. Do you expect me to believe that denying someone the opportunity to sit at their partner's deathbed is not a civil right? Or, if after that partner dies, you have no legal right to your children, because only your partner was allowed to adopt them? Analogizing these deficiencies within the law to civil rights is offensive?

I suppose what we've learned from the comments to the past few posts is this: paT's dumb; I'm dumber; petallic's not allowed to make a joke; and you're retarded.