Tax discrimination

Discussion in 'Budget & Taxes' started by jor, Feb 16, 2012.

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  1. squidward

    squidward Well-Known Member

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    so discrimination can be justified ?
     
  2. Anikdote

    Anikdote Well-Known Member

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    Well, that does make it possible, but more importantly it's done because it's more efficient and equitable.

    The entitlement programs we have now are completely unsustainable, but frankly tangential to the topic.

    Not at all, the transactions costs associated with finding the people/person who you wish to give said things to necessitates an intermediary. Private charity is wonderful, but insufficient.

    Silly question. This is analogous to saying that tax breaks on dividends is discriminatory... and frankly since you nor the OP is applying the term in any valid context, it's just moral blathering.

    Progressive taxation because it increases equitability by definition reduces discrimination.
     
  3. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    Not sure how efficient applies, but having one in twenty citizens pick up the bill for the other nineteen (half of whom are paying nothing at all for the federal services income tax provides)... you think that's equal? You can argue that it's necessary, constitutional or kind but it's hardly impartial or without favoritism. It's neither fair nor equal.


    eq·ui·ta·ble adj \ˈe-kwə-tə-bəl\
    Definition of EQUITABLE

    : dealing fairly and equally with all concerned ​
     
  4. Anikdote

    Anikdote Well-Known Member

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    The upper end of the labor supply curve is backward bending, in other words there are no work disincentives at the top, thereby meeting efficiency criteria. In short, no production is lost as a result, unlike the converse.

    Depends on how we look at it, from a % of total income then you can make this argument. If however we consider the impact then we cannot.

    Since you've been very civil, I'll try to explain a bit further.
    Just to toss out some hypothetical numbers. Let's assume a flat tax @ 10%

    Person A makes 100,000 and so pays 10,000.
    Person B makes 15,000 and pays 1,500.

    If we remove for the basic necessities and various fixed costs, the 1.5k accounts for a greater % of person B's income and will invariably have a greater affect on him because he has significantly less disposable income. This is why "flat" taxes aren't equitable.

    If you can get the full text of: http://oep.oxfordjournals.org/content/25/2/145.extract I'd read it, really helps to extrapolate over what my laymen words don't do justice.
     
  5. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    Economic efficiency; I think I understand why you mentioned it now.



    I believe I understand the basic argument of marginal utility (although I appreciate the link, I'm book marking it for reading when I have more time).

    I don't think a flat tax is all that more fair than a progressive one -- no tax using income as a basis will be fair or equal, because our incomes are not equal. While we're spending $3.6T to give 300 million people equal rights and privileges the only fair tax would be to either meter services or drop a $12,000 per person bill on each family. I realize that isn't practical... few families can handle that bill. So we do what we have to and ask the few of us who can still afford it to foot the bill for all our neighbors.

    It's ugly, but worse: we're dishonest about it. We use tricks like marginal utility or even a flat tax based on income to argue each of us is paying his fair share, when we know most of us aren't even coming close. We do that to keep folks invested emotionally in our government and promote feelings of unity and equality in the nation. It reduces the risk of revolution, keeps folks smiling, and keeps the wheels turning (efficiently).

    But the problem with that dishonesty is it tricks folks into a feeling of satisfaction with their meager or non-existent contributions, so they don't do more. And it creates an attitude of unreasonable entitlement that causes people to demand things they think they're paying for (but are not).

    It's like Dad taking little Timmy with him when he buys a new car. Timmy wants to help so he puts up half his allowance. Dad is proud of his 8 year old and puts in the rest of the money. Well everyone feels good about it because each felt an equal impact, each paid according to the "affect" of the cost. But things get a little dicey when Timmy, having paid his fair share, wants equal rights to drive the darn thing or feels entitled to an equal vote on whether the family buys another new car next year.

    Dad can always put his foot down and remind Timmy that he didn't really pay an equal amount. That Dad is the one actually picking up the bill and Dad will make the decisions about what 'we' spend next year. But America doesn't have that option. We've got a nation of almost 300 million spoiled brats with equal votes and no fatherly authority to reign them in when they want to buy a new healthcare entitlement or recognize everyone's "right" to own a home.

    We need to stop playing games with the idea that folks in this nation are paying their 'fair share' for the rights and privileges of U.S. citizenship and take a good hard look at what it's really costing us and who is providing it.
     
  6. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    Doesn't seem like I can, looks like it's only downloadable by subscribers. Appreciate the link anyway.
     
  7. Anikdote

    Anikdote Well-Known Member

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    It's getting late here, so this deserves a better response that I'm about to provide.

    The only tax that is 100% fair, is a usury tax. But it too has major issues. Tax reform is challenging, but I like to try and avoid emotional appeals like "fair share", taxes are levied to provide for the general welfare and public goods, whatever mechanism acquires the required revenue and has the least impact on aggregate demand, works for me.

    I think the majority of folks folly in regards to taxes is emotional responses to it that aren't grounded in logic or efficiency.
     
  8. squidward

    squidward Well-Known Member

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    which it is.


    so it is not discriminatory privilege ?

    are there any other forms of discriminatory privilege you approve of, or is this it ?

    can you say blathering again ? It ads such zest to your argument.
     
  9. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    You know, I don't think we disagree by much here. We both have a similar understanding of the concept of 'fair' and we'd both like to do right by folks in America. We both recognize there is a trade off between trying to accomplish good for the public as a group and being fair to individuals.

    It seems we just have different opinions as to how much public good is reasonable when paid for with unfairness to individuals. It's an old problem, commonly found in criminal legislation. For example, how much personal freedom should we sacrifice to insure public safety.

    I would toss out a couple of thoughts though. Machines are efficient, in that there is no wasteful profit. Each piece does as it's instructed without question or concern for fair compensation. While some efficiency is desirable in an economy most of us don't want to live in a society that is completely efficient. And I think some emotional response is unavoidable and reasonable when, in trying to be more efficient, we stray too far from finding an equitable solution to a shared problem.
     
  10. Taxpayer

    Taxpayer Well-Known Member Past Donor

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    Of course it is. And yes, many of us approve of discriminating against (for example) minors with regard to the privileges of driving, drinking, or voting.

    I think the point we need to consider is not whether we are discriminating against folks with higher income -- that question is resolved simply by considering the definitions. We are. Betters questions are what level of discriminatory privilege is necessary, constitutional, and reasonable.

    Harder questions. In my opinion, we've pushed those limits too far already and look to be stretching them more in the future. But, as long as we have so many doing so little while spending so much... well, I don't see a good solution. I think we have some ugly times ahead of us.
     
  11. Anikdote

    Anikdote Well-Known Member

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    Of course, no one is suggesting taxation that is purely punitive towards the high achievers in our society. After all, they're net contributors and we want to encourage this type of behavior.

    We're probably not as far apart as you think. Public good provision is done so horribly and with so little efficiency that it costs far more than it should. Unsurprising considering there's little incentive for government to provide a cheap, effective, or simple solution.

    Profit represents monies made above operating expenses, it can be used wastefully, but cannot in and of itself be wasteful. (I realize this is completely tangential to your point)

    Disagree, if we take a look at some of the most efficient economies in the world we also find very high levels of happiness among the citizens. Emotional response are unavoidable, but we shouldn't allow it to cloud our logic, efficiency and equality are far from mutually exclusive.
     
  12. Iriemon

    Iriemon Well-Known Member Past Donor

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    Or maybe as likely in this forum, are trust fund babies that don't want to share their toys with the less fortunate.
     
  13. Anikdote

    Anikdote Well-Known Member

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    Well, it's always either one of two things; malicious or ignorant. Which you chose to believe it is, is up to you.

    I elect for the latter because there's also a strand of anti-intellectualism always embedded in the argument.
     
  14. Iriemon

    Iriemon Well-Known Member Past Donor

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    No doubt.

    ..........
     
  15. Roy L

    Roy L Banned

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    Because the two most fundamental and widely accepted principles of taxation are, "ability to pay" and "beneficiary pay." As the rich are both more able to pay and get more benefits from government spending, they should pay more tax.
    ?? Are you serious? The difference is that race is irrelevant to both ability to pay taxes and benefits received from government spending. Wealth isn't. You could with equal "logic" complain that it's "discrimination" that 220-lb boxers are not allowed to compete in the welterweight division. It's just stupid.
    Same % of what? Assets, income, consumption, net worth, what?
    Taxing everyone the same $ amount is self-evidently idiotic. The government SHOULD discriminate based on taxpayers' wealth, as proved above.
     
  16. unrealist42

    unrealist42 New Member

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    The history of taxation is a history of expedience and convenience. Tax that which is most easy to collect and difficult to avoid.

    We should return to first principles. What is taxation all about?
    The purpose of taxation is to elicit funds from the economy. It is desirable that it do so in a manner that impedes economic and social advance the least.

    Since there is no way to know without hindsight which economic activity is more beneficial it might be best if all economic activity was taxed the same and the decision of benefit left to other, more social arbiters.

    No tax fits the bill better than a transaction tax since it taxes all economic activity at the same rate. Since there are no technological impediments to collecting such a tax there is really nothing but the inertia of the venal and grossly corrupt political system to impede its implementation.
     
  17. Roy L

    Roy L Banned

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    Land taxes are so easy to collect and difficult to avoid that they were used successfully even in ancient societies where hardly anyone could read.
    The two most fundamental and widely accepted criteria of sound tax design: ability to pay, and beneficiary pay.
    Why assume you can only tax economic activity? Why not tax idle ownership?
    But taxing economic activity discourages economic activity. Duh.
    Joke, right?
    That and the fact that it is a stupid idea.
     
  18. Reiver

    Reiver Well-Known Member

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    Ancient societies? Excellent point. Of course in modern societies land taxes just aren't that important and they shouldn't be exaggerated
     
  19. Roy L

    Roy L Banned

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    Actually, quite modest land taxes have had very large beneficial effects in modern economies as well. And it would be difficult to exaggerate the importance of the concept of recovering publicly created value for public purposes and benefit rather than confiscating privately created value and giving the publicly created value away as a welfare subsidy.
     
  20. Reiver

    Reiver Well-Known Member

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    Evidence for that? Please make sure you provide the full reference. Cheers!
     
  21. Roy L

    Roy L Banned

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    I've done that before, as you know; no matter what kind of evidence or "reference" I provide you, it's never good enough to "count." I've provided full references to papers in peer-reviewed academic journals, and they weren't good enough for you because I didn't put them in some sort of double-reverse-overhand-Oxbridge-canonical-citation format. I'm not going around that carousel with you again.
     
  22. Reiver

    Reiver Well-Known Member

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    No you haven't. Indeed, we both know that you cannot support your previous comment with any credible evidence. Your stance could just as well come from David Icke
     
  23. Roy L

    Roy L Banned

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    That is a lie.
    No, we both know that I have already done so many times, and you simply concoct excuses to ignore and dismiss all evidence presented.
    Beneath all contempt.
     
  24. Reiver

    Reiver Well-Known Member

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    Provide one reference that supports "land taxes have had very large beneficial effects in modern economies as well". Don't go back to your "you fib, you liar" routine designed only to ignore content
     
  25. danielpalos

    danielpalos Banned

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    Why should anyone have a problem with economic forms of discrimination, under any form of Capitalism?
     
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