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Thread: On Taxation and a Workable Strategy

  1. #1

    On Taxation and a Workable Strategy

    I'd like ideas on the elimination of taxation moving forward.


    Now, though of course I like the idea of elimination of taxes, the issues stand:

    Are we to still have a Federal Government?
    Are we to still have an America?

    I understand there will be anarchists out there who will simply say "no", and I understand that. But I don't think, for the life of me, that as a society, we're anywhere near the abolition of state. Why? We started out pretty decently with the advent of America, and were closer then. Most people were more independent, self-reliant, and quite frankly, more courageous and had more grit. We've moved further from "statelessness", not towards it.



    Also, taxation is theft. I get it.

    BUT, if the answer is "yes", which I believe it has to be, while we walk the social paradigm back from the brink of hopelessness, how could the federal government be funded?

    There is the Fair Tax, which seems like a top replacement strategy for the income tax, except that I think it would, perhaps, be more onerous than the current income tax for most of us. If you've never investigated:

    "It would require the repeal of the 16th Amendment, and it would disband and defund the Internal Revenue Service (IRS). A 23% sales tax is regressive because it impacts the poor the most. To make it more progressive, the Fair Tax Act proposes that all Americans receive a monthly “prebate," which would be equal to the 23% tax on the monthly cost of living at the poverty level. According to the Department of Health and Human Services, the poverty level for a family of four was $24,600 in 2018, so the prebate would be $5,658 a year."

    https://www.thebalance.com/what-is-t...effect-3305765

    My problem is this: This might seemingly backdoor something much more pernicious than even the Income Tax. It might just necessitate that the Feds track each and every purchase made by anyone in the US. Think about it.

    Now, some have proposed the simple elimination of the Income Tax, altogether.



    Those who advocate for the abolition of the income tax, yet still believe we can fund a Constitutional government (which is possible), say the revenue would come from other areas such as tariffs, property taxes, consumption taxes, such as what you see here:




    But I propose this: Within all of these taxes, something insidious stirs. That is, the Federal Government keeping a tally of everything you own, the transactions you make, and what you earn.

    I have a different idea.

    How about an actual flat income tax, and that's it. And not a flat rate, but a flat sum. I propose that anyone making more than poverty level pays, let's say, $2,500. That's regardless if you are a CEO or a waitress. Sound unfair? Well, a CEO pays the same as a waitress for a gallon of milk, a gallon of gasoline, and the same for any identical good or service. So, given that they should receive the same "protection" (military, etc) for their taxes, why don't they pay the same for this "service"?
    If there are 140 million employed Americans above the poverty line, this would bring the gov't a sum of $350 billion a year, which I would contend is enough to have a plenty powerful military, as well as provide for a Constitutional federal government.

    Paying down the national debt and making payments on the interest to that debt is quite another matter, of course. Many might suggest that the Fed "get bent", as it isn't "our" debt, as we didn't sign a damn thing. Fine plan, but good luck with that, of course. Jo Jorgensen has proposed selling off the governments assets to pay down the debt, which is an idea with merit.


    The most important ramification of the above plan is that the gov't no longer will have the power to meddle in the affairs of the populace using taxes as a weapon, or a "king-maker"
    . The only thing they would need to know is if an individual makes above or below what is considered "poverty level". For most people, this would save them thousands a year in taxes, and many people tens of thousands. Also, with zero in "corporate taxes", businesses the world over would flock here to do business. Want to level the field with China? Forget their endless subsidies. Those will only be their undoing. But I digress...


    Now, on to the lively discussion!



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  3. #2
    TL;DR:

    I propose an actual flat income tax, and that's it. No other taxes/tariffs. And not a flat rate, but a flat sum. I propose that anyone making more than poverty level pays, let's say, $2,500. That's regardless if you are a CEO or a waitress. Sound unfair? Well, a CEO pays the same as a waitress for a gallon of milk, a gallon of gasoline, and the same for any identical good or service. So, given that they should receive the same "protection" (military, etc) for their taxes, why don't they pay the same for this "service"?
    If there are 140 million employed Americans above the poverty line, this would bring the gov't a sum of $350 billion a year, which I would contend is enough to have a plenty powerful military, as well as provide for a Constitutional federal government.

  4. #3
    Quote Originally Posted by Badnon Wissenshaftler View Post
    If there are 140 million employed Americans above the poverty line, this would bring the gov't a sum of $350 billion a year, which I would contend is enough to have a plenty powerful military, as well as provide for a Constitutional federal government.
    Since interest on the national debt is $378 billion for FY 2021 you'd be in the hole from the start.
    We have long had death and taxes as the two standards of inevitability. But there are those who believe that death is the preferable of the two. "At least," as one man said, "there's one advantage about death; it doesn't get worse every time Congress meets."
    Erwin N. Griswold

    Taxes: Of life's two certainties, the only one for which you can get an automatic extension.
    Anonymous

  5. #4
    Quote Originally Posted by Badnon Wissenshaftler View Post
    TL;DR:

    I propose an actual flat income tax, and that's it. No other taxes/tariffs.
    And how do you intend to enforce such an edict?

    Government "workers" draw from the kitty instead of actually producing and marketing something and you'll most certainly need more of them in order to implement the collection of, and punishment for, non-payment of, your proposed tax....All this means an ever expanding pool of tax-ticks which as we're seeing only causes problems.

    Much better to cut spending, ALL spending! Then try to figure out how to pay for what's required.

    Wars overseas aren't required, social programs aren't required, the "Just-Us" system as it stands isn't required, subsidies and all of the associated "workers" who manage these programs are not required..

    Let's talk about fair.............Ask those who produce exactly which government services they are willing to provide financial support for and then make the support dependent on government providing said services at the agreed on price.

    When the tax-ticks wear suits-n-ties they're no better than those who languish in squalor.

    Government is too big and it doesn't represent any specific group of people well, so instead of trying to fund what's broken maybe try redesigning/shrinking government before funding.

  6. #5
    Quote Originally Posted by Badnon Wissenshaftler View Post
    I propose an actual flat income tax, and that's it. No other taxes/tariffs. And not a flat rate, but a flat sum.
    The cost to society of a tax is the revenue received plus public administrative costs (e.g. salaries of IRS employees) and private compliance costs (e.g. what a company pays its tax attorneys and accountants). The goal should be to make taxation as efficient as possible: i.e. reduce administrative and compliance costs as much as possible in relation to revenue generated. E.G. A tax that generates $100 billion and costs $1 billion is better than a tax that generates $100 billion and costs $5 billion, as it the overall cost to society is $4 less for the former than for the latter. That's $4 billion worth of land, labor, or capital which can be used for some other, more productive purpose: e.g. the people spending their days browsing the tax code are released for other, more productive work.

    What kind of tax is most efficient? It certainly isn't income tax, which has appallingly large administrative and especially compliance costs (hundreds of billions per year!). Your suggestion, a capitation tax, is vastly more efficient. There's no compliance costs at all, other than perhaps checking the .gov site to find out what the current year's sum is going to be, and the administrative cost should be low as well, especially is the sum is small and there's no much incentive for evasion. The only problem with capitation tax is that there's a pretty low limit to how much revenue it can generate and, depending on the particulars of the time and place, that limit might be too low to fund even a minarchist government. The limit is defined by how much the poorest people can pay. Now, there could be exemptions, e.g. for people without fixed residence, which would allow the sum to be increased, but that reintroduces some administrative and compliance costs (i.e. the cost of figuring out who does and does not get this exemption). Real estate tax is similar: extremely efficient so long as a fixed rate tax will generate enough revenue (less efficient if you have to introduce exemption or graduated rates). When neither real estate nor capitation in their pure forms alone can yield enough revenue, an option would be to combine them, allowing each to remain a lower rate, but overall generate the needed revenue.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  7. #6
    Quote Originally Posted by Sonny Tufts View Post
    Since interest on the national debt is $378 billion for FY 2021 you'd be in the hole from the start.
    That is part of the conundrum as addressed in the unabridged version of my post. Possible solutions, to summarize, are to tell the Fed to "get bent", which might turn out to be a bit uncivil?..

    Or, perhaps, the best idea is to sell off the governments assets to pay off the debt as well as can be done.

  8. #7
    Quote Originally Posted by tod evans View Post
    And how do you intend to enforce such an edict?

    Government "workers" draw from the kitty instead of actually producing and marketing something and you'll most certainly need more of them in order to implement the collection of, and punishment for, non-payment of, your proposed tax....All this means an ever expanding pool of tax-ticks which as we're seeing only causes problems.

    Much better to cut spending, ALL spending! Then try to figure out how to pay for what's required.

    Wars overseas aren't required, social programs aren't required, the "Just-Us" system as it stands isn't required, subsidies and all of the associated "workers" who manage these programs are not required..

    Let's talk about fair.............Ask those who produce exactly which government services they are willing to provide financial support for and then make the support dependent on government providing said services at the agreed on price.

    When the tax-ticks wear suits-n-ties they're no better than those who languish in squalor.

    Government is too big and it doesn't represent any specific group of people well, so instead of trying to fund what's broken maybe try redesigning/shrinking government before funding.
    Your concerns are also, at least somewhat addressed, in the unabridged version of my post.
    I happen to agree with your thinking. My proposed "solution" is only viable after a significant amount of redesign and shrinkage of the government.

  9. #8
    Quote Originally Posted by Badnon Wissenshaftler View Post
    Your concerns are also, at least somewhat addressed, in the unabridged version of my post.
    I happen to agree with your thinking. My proposed "solution" is only viable after a significant amount of redesign and shrinkage of the government.
    I'm in for redesigning and shrinking government so long as the redesign removes power and the shrinking involves both personnel and budget.



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  11. #9
    Quote Originally Posted by r3volution 3.0 View Post
    The cost to society of a tax is the revenue received plus public administrative costs (e.g. salaries of IRS employees) and private compliance costs (e.g. what a company pays its tax attorneys and accountants). The goal should be to make taxation as efficient as possible: i.e. reduce administrative and compliance costs as much as possible in relation to revenue generated. E.G. A tax that generates $100 billion and costs $1 billion is better than a tax that generates $100 billion and costs $5 billion, as it the overall cost to society is $4 less for the former than for the latter. That's $4 billion worth of land, labor, or capital which can be used for some other, more productive purpose: e.g. the people spending their days browsing the tax code are released for other, more productive work.

    What kind of tax is most efficient? It certainly isn't income tax, which has appallingly large administrative and especially compliance costs (hundreds of billions per year!). Your suggestion, a capitation tax, is vastly more efficient. There's no compliance costs at all, other than perhaps checking the .gov site to find out what the current year's sum is going to be, and the administrative cost should be low as well, especially is the sum is small and there's no much incentive for evasion. The only problem with capitation tax is that there's a pretty low limit to how much revenue it can generate and, depending on the particulars of the time and place, that limit might be too low to fund even a minarchist government. The limit is defined by how much the poorest people can pay. Now, there could be exemptions, e.g. for people without fixed residence, which would allow the sum to be increased, but that reintroduces some administrative and compliance costs (i.e. the cost of figuring out who does and does not get this exemption). Real estate tax is similar: extremely efficient so long as a fixed rate tax will generate enough revenue (less efficient if you have to introduce exemption or graduated rates). When neither real estate nor capitation in their pure forms alone can yield enough revenue, an option would be to combine them, allowing each to remain a lower rate, but overall generate the needed revenue.
    Thank you for your insight and for giving the idea a name in "capitization tax". I'm a scientist, not a political theorist, so I don't know a great deal of this nomenclature.

    As far as funding a minarchist government: Russia's tax revenue for 2020 stands to be around $365 billion, and they plan to spend around $314 billion, according to this:

    https://www.rbth.com/business/331534...an-budget-2020

    Now, I know we have roughly twice the population, but much of what Russia's government is doing probably would not be considered "Constitutional" by our standards. To summarize, I think $250 billion for a military is quite adequate (excessive), which leaves $100 billion for "other", in my example. Also, this is simply the Federal Gov't I speak of here, which leaves the states to collect their own revenue.

  12. #10
    Quote Originally Posted by Badnon Wissenshaftler View Post
    Thank you for your insight and for giving the idea a name in "capitization tax". I'm a scientist, not a political theorist, so I don't know a great deal of this nomenclature.

    As far as funding a minarchist government: Russia's tax revenue for 2020 stands to be around $365 billion, and they plan to spend around $314 billion, according to this:

    https://www.rbth.com/business/331534...an-budget-2020

    Now, I know we have roughly twice the population, but much of what Russia's government is doing probably would not be considered "Constitutional" by our standards. To summarize, I think $250 billion for a military is quite adequate (excessive), which leaves $100 billion for "other", in my example. Also, this is simply the Federal Gov't I speak of here, which leaves the states to collect their own revenue.
    I'd say that's about right.

    Here's an estimate for "other" that you might find interesting:

    The grand total is then $171 billion per year, which is a 97.5% reduction from current non-defense spending, or about half of what is spent annually on interest on just the federal debt. What does this mean in term of taxes? The value of all residential and commercial real estate in the US is estimated at $33 trillion and $16 trillion, resp. A real estate tax of slightly more than one-third of one percent would fund this minarchist government. That would be comparable to the lowest property tax rates in the country at present. Alternatively, a capitation tax of about $522 per year would suffice.
    http://www.ronpaulforums.com/showthr...all-Government
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  13. #11
    Quote Originally Posted by r3volution 3.0 View Post
    Real estate tax is similar: extremely efficient so long as a fixed rate tax will generate enough revenue (less efficient if you have to introduce exemption or graduated rates).
    A federal real estate tax would be a direct tax that under the Constitution would have to be apportioned -- i.e., the revenue collected from each state would have to be in proportion to its population. But since real estate values aren't distributed among the states by population, the result would be different rates in each state, with landowners in value-poorer states paying a higher rate than those in higher-value states. This would make such a tax politically difficult if not impossible to enact.
    We have long had death and taxes as the two standards of inevitability. But there are those who believe that death is the preferable of the two. "At least," as one man said, "there's one advantage about death; it doesn't get worse every time Congress meets."
    Erwin N. Griswold

    Taxes: Of life's two certainties, the only one for which you can get an automatic extension.
    Anonymous

  14. #12
    Quote Originally Posted by r3volution 3.0 View Post
    I'd say that's about right.

    Here's an estimate for "other" that you might find interesting:



    http://www.ronpaulforums.com/showthr...all-Government
    So, I was wrong. You said 'capitation' not 'capitization'. Whoops.

    I discovered through the omniscient Wikipedia that capitation taxes are both a biblical phenomenon and mentioned in the original Constitution, unlike the income tax:

    Article 1, Section 9: "No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken".

    Also, I discovered that another somewhat equivalent name for this is a "poll tax", though that seems to be used for other schemes, such as actually making people pay the tax AT the polls, before you vote. Why this reminds me of a song from my youth, and look, this video is a bit reminiscent of recent times:



    Looks like they weren't following the "captitation-tax-only plan", haha. Also, possibly not excluding sub-poverty citizens, though I'd have to check on that.



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