America's tax system is screwy

It is inherent in taxation of earned income. If you don't like it, advocate taxation of economic rent, which does not punish productive effort or reward failure. All other taxes do.

 

That would certainly be a step in the right direction. But best would be to tax wealth that takes the form of privileges, such as land titles, intellectual property monopolies, bank-issued debt money, etc.

 

Then you make it harder for people to prepare for retirement and force more of them to either keep working or go on the public dole.

 

No, that's just absurd, dishonest nonsense. Taking working people's wages in taxes when they have no money saved PREVENTS them from saving any in the first place. A wealth tax, by contrast, only kicks in AFTER they have some money saved up, and would be far lower than income tax because wealth is more unequally distributed than income.

The superiority of wealth taxes over income taxes in helping normal working people prepare for retirement is easily proved, repeat, PROVED by the fact that a billionaire will almost never pay more than 1% of his wealth in income tax (and usually more like 0.1%), while working people often pay 10% (and sometimes far more) of their wealth in income tax.

A 1% wealth tax would pay for all federal government spending, but a working person would have to have already accumulated about $1M before they would be paying more under a 1% wealth tax than they do under the current federal income tax.

The main purpose of income tax is to prevent the most productive of the poor from accumulating enough assets to offer competition to the least productive of the rich. The main purpose of lying that income tax taxes the rich is to pretend that working people aren't paying 100 times more of their wealth in tax than the rich.

 

A percentage tax on wealth reduces the effective interest rate of that investment. This effect will be compounded over time, which leads to a significant reduction in potential wealth.

Consider a simple $1,000 investment held for 30 years. At an average 8% growth, you'll end up with a little over $10,000. If you impose an annual 2% wealth tax on this person, that total is reduced to $5,700 - cutting the total that person is able to save for retirement nearly in half.

A 2% wealth tax will nearly double the amount a person would have to invest to be able to retire.

 

Perhaps. I've never seen any concrete plans, just class warfare attempts trying to stick it to the rich by taxing what has been accumulated. If you just exempt all real-estate, all retirement accounts, all education funds and put a good cutoff for extra retirement savings outside the funds, then I could accept a wealth tax.

But such a tax wouldn't bring much revenue, since most wealth would be excluded.

 

Every tax system has winners and losers and in every tax system rewarding one group will always take away from another group. Right now, the current tax system rewards long term transactions, not short term. Long term transactions are generally the residual incomes while short term are production and service industries. If we change the system to rewarding savings, then that will devasted production and services differently than the current system while rewarding income hordes and punishing the taxpayers who have to spend for various reasons. A flat tax will reward those who have simplier lifestyles while punishing the taxpayers that have a more complicated lifestyle.

 

It's a funny kind of class warfare where the only class that is ever accused of waging it is also the only class that ever takes any casualties.

Why exempt any of those things?

Who cares what you could accept, when you have shown you understand nothing about taxation or economics?

 

It's the government-created value of a government-issued and -enforced privilege. Recovering publicly created value to pay for public purposes and benefit is always better than confiscating privately created value. Taxing it would also encourage its holders to license it, increasing production and availability of the property, in order not to lose money to the tax.

The big issue is valuation. I don't have any simple solution to that, other than self-valuation with the proviso that the valuation is an offer to sell.

 

Real-estate is already taxed and shouldn't be considered for a wealth tax - which would be double taxation. Taxing retirement accounts punishes people for trying to be responsible and avoid the public dole, so retirement shouldn't be counted. Retirement accounts prevent people from retiring at will, and force them to wait until some bureaucrat decides it is the proper age for retirement. Taxing education savings makes it harder for people to afford to send their children to college, reducing their chances of bettering their station in life - so those funds shouldn't be taxed. Some allowance should be made for people who save for earlier retirement or for life's other emergencies that force unprepared people on the dole.

As for your attempt at a direct attack, a quick scan of your posts makes it clear who really doesn't understand economics - but blindly believes he does. . .

 

If you ignore the fact that the income they have available to save is no longer being taxed away before they can save it...

ROTFL!! Are you serious?

Consider the difference between an annual wealth tax of 2% and an annual income tax of 20%, which would raise roughly the same amount of revenue. Under the wealth tax, the taxpayer can save $1000 out of an income of $5000/month, and 30 years later that investment has grown to $5700. Under the income tax, the $1000 he was able to save under the wealth tax is taken by taxation before he ever sees it. He is consequently able to save $0/month, and 30 years later that investment has grown all the way to $0. The income tax multiplies by infinity the amount he would have to invest to be able to retire.

I invite you to run the numbers any way you like, the answer will be similar: the wealth tax makes it FAR EASIER to save for retirement than a revenue-equivalent income tax. But please, to avoid embarrassing yourself, don't just pretend the alternative to the wealth tax is no tax at all.

 

"Double taxation" is just a stupid and dishonest canard that begs the question by assuming the privately created value of production should be confiscated by taxing transactions, but the publicly created value of privileges should be given away to their owners as a welfare subsidy in return for nothing. As long as asset owners are appropriating any publicly created value whatever, that value should be double, triple, quadruple-taxed or more until it is all recovered, before any privately created value is considered for taxation.

I see. So, people who work to earn a living aren't trying to be responsible and avoid the public dole, so their earnings should be taxed away, leaving them with nothing to put away for their retirement, in order to leave the "retirement accounts" of the rich untouched by taxation...?

Somehow, I kinda figured it'd be something like that...

Right. Only the children of those who can afford to sock away a few hundred grand deserve a chance of bettering their station in life. The rabble should have their wages taxed away so they don't waste their money saving for their worthless kids' education....

How about... NOT TAXING AWAY THEIR WAGES BEFORE THEY EVEN SEE THE MONEY?

LOL! I refute others' mistaken economic views with fact and logic. They are not able to refute my views. That shows who doesn't understand economics.

 

Once your person has saved $50,000, every penny of that $1,000 goes toward paying that 2% wealth tax, stopping all benefit of contributions from that point forward. $50,000 isn't nearly enough for anyone to retire on for long.

I'm not a fan of income tax either, but the myopic view of everyone I've seen who proposed a wealth tax always ignores the reduced benefits of saving that such a tax creates. It rewards people for spending now and punishes them for saving for the future. It will only increase the number of people who don't bother to save for retirement or for big purchases and increase the number of people who live paycheck to paycheck.

 

The tone of this post makes it clear how emotional your perspective is. Decisions based on emotion are rarely well reasoned.

This is made quite clear by your implication that only rich people have retirement accounts. Over 2/3 of all Americans have retirement accounts, not just rich people. Implying that only rich people have retirement savings is a clear sign of an emotional - not a reasoned response.

The assumption that I am a supporter of an income tax is another example of emotional, rather than reasoned thinking. Not one of my posts in this thread supported an income tax, and any of my posts speaking of income tax support it as a necessary evil - at least until we get our government down to a reasonable size. You suddenly attack me as if I have been supporting massive income taxes - which makes it clear you are making emotional, not reasoned responses.

Step away from your computer. Take a walk, listen to some music and calm down. Then consider a logical and reasonable response and try again. I enjoy calm discourse - emotional outbursts have no place in civilized discussions such as these.

 

No, that claim is false and absurd. The $1000 contribution was per MONTH, not per YEAR, because that is how much INCOME tax is taking from him. So he would have to have $600,000 saved before the wealth tax equaled his contributions. But even that just means that if you want to think of his contributions as being cancelled, then you have to stop claiming his return is being reduced. So it's back up to 8%. You are double counting the wealth tax, and zero-counting the income tax that is the alternative. IOW, and not to put too fine a point on it, you are making a fool of yourself because you refuse to do arithmetic -- indeed, you refuse even to let a spreadsheet program do the arithmetic for you. RUN THE NUMBERS.

It's more than the $0 they would have under income tax.

I don't. I simply ask you to consider the effect of income tax on people's opportunities to save. And you blankly refuse to do so.

Nonsense. It will give people far more opportunity to save, by not taking their wages from them before they have a chance to save them.

 

I have stated the facts that prove me right and you wrong, and have demolished and humiliated you. You have no answers, so you have to change the subject and engage in some stupid ad hominem fallacies. Simple.

You missed the point, which was that very few Americans have any significant amount of money in their retirement accounts for a wealth tax to tax (unlike the rich, who have lots of wealth in many different forms for a wealth tax to tax), while they do have significant earned income to pay tax on, unlike the rich who take their incomes in tax-favored forms like capital gains that allow them to pay little or no income tax.

Garbage. A wealth tax is an alternative to income tax. If you oppose a wealth tax, you have to show how it is no better than income tax. And you can't.

<yawn> Just because an argument proves you wrong does not make it an emotional outburst, sorry.

 

And in America the losers are Gentiles. The "jewish" rich aren't taxed to death, the Gentile rich are pillaged on a daily basis. Don't kneejerk, if some other group actually controls taxation in America and throughout the entire West, provide proof who they are.

 

REAL CHRISTIANS and REAL AMERICA CONSERVATIVES don't even discuss the income tax as if it's legitimate, WE WANT INCOME TAXES ABOLISHED! and replaced by a national sales tax, the fairest tax of all. Under such a system, those who are the wealthiest and who engage the most in conspicuous consumption pay the most; the rate is the same for everybody. But best of all, that revenue wouldn't find its way into the "jewish" bankers' pockets so they could use it to bailout their comrades (and I do mean comrades - "jews" founded communism) in Europe. WHICH IS WHAT THEY'RE DOING AS WE SPEAK: http://tinyurl.com/AmericanIdiotBailingOutEurope.

NOW WHAT ARE YOU DOING TO SEND AMERICA IN THAT DIRECTION? ARE YOU VOTING FOR RON PAUL AND THOSE LIKE HIM? YOU BETTER BE. OR DON'T COMPLAIN WHEN AMERICA BECOMES JUST ANOTHER COMMUNIST COUNTRY. WE'RE WELL ON OUR WAY.