Things we'd be talking about if the forum wasn't deadFollow

Go ahead. I need a quote for next time you repeat yourself and everyone dismisses you.

It's funny that every once in awhile someone talks about taxing net worth. Is that really something you think is a good idea? I'm honestly curious. Because it seems to me to be a horrifically bad idea, not just for the rich, but for everyone. What exactly is the virtue of taxing net worth? Are you assuming this would only hurt rich people? Because you'd also be taxing 3% of your car every year, and your home, and your furniture, and your TV, your computer, everything. That's "wealth" btw. That comic book collection you've owned since you were a child? You have to pay 3% of its value every year. The shoes you're wearing? 3%. Every year.

You can't really be that stupid to think this is a good idea. Can you?


For the record, I'm talking just about changing the current income tax system to a flat tax (everyone pays the same percent on every dollar earned). I'll even toss in the idea of eliminating all deductions and tax credits as well. Why not? You know, if you think you're getting a raw deal on taxes or something. Let's see who's in favor of such a thing.

Sigh. The question was about having a plan. Not implementing one. As i just said, it's about ideas.



Um... They are. WTF? Did you read the link I provided? It's a bill proposal that includes nearly all of the ideas they argued for back in 2009, but were ignored by the Dems. I'm not sure what magical process you think removes all the steps between having a plan and passing a law, but there are quite a few of them.



Um... There are a lot of steps involved? How long did it take the Dems to pass the ACA in the first place? The better part of a year, and they controlled both houses of congress and the white house, with a super majority in the senate. Did they not "have a plan" for that entire time? You've risen to new levels of absurdity with this one.



Huh? Seriously. Go back and read the exchange. I'm not going to hold your damn hand here.

Edited, Jun 3rd 2015 3:55pm by gbaji

Spoiler

Gbaji wrote:

Sigh. The question was about having a plan. Not implementing one. As i just said, it's about ideas.

Exactly. It's not a GOP plan if the set of ideas aren't supported by the party. If the ideas were supported by the party, then it would be in a bill.

Spoiler

Gbaji wrote:

Um... They are. WTF? Did you read the link I provided? It's a bill proposal that includes nearly all of the ideas they argued for back in 2009, but were ignored by the Dems. I'm not sure what magical process you think removes all the steps between having a plan and passing a law, but there are quite a few of them.

Gbaji wrote:

Um... There are a lot of steps involved? How long did it take the Dems to pass the ACA in the first place? The better part of a year, and they controlled both houses of congress and the white house, with a super majority in the senate. Did they not "have a plan" for that entire time? You've risen to new levels of absurdity with this one.

Gbaji wrote:

Um... There are a lot of steps involved? How long did it take the Dems to pass the ACA in the first place? The better part of a year, and they controlled both houses of congress and the white house, with a super majority in the senate. Did they not "have a plan" for that entire time? You've risen to new levels of absurdity with this one.

I literally watch the news all day and I have not once heard of this "bill" that you're talking about. So instead of spending all of this time trying to convince me of this "plan", why don't you just present the bill number/name and current location?

Spoiler

Gbaji wrote:

Huh? Seriously. Go back and read the exchange. I'm not going to hold your **** hand here.

See post 972. You can't out talk what is written.

So's capitalism. So's "I want a flat tax but only a flat tax that lowers my taxes while raising yours and excludes these things that would affect me!"

Well, I think our family does a good job of working, making a decent income and paying our taxes. And we support a single payer plan so... at least one?

I wonder how many people would cry about people not paying their share when they refuse to pay their own taxes because "it was too hard" and then spin a thousand excuses why it wasn't really their fault and everyone else in the world is a meanie-head for pointing it out. Just, you know, hypothetically while discussing paying your share and basic human greed.

I still trying to figure out why gbaji just can't accept that there are people in the world willing to be taxed a bit more if it means help for people who need the help. I can't help but to think he thinks we're making these people up.

Technically it hurts people who are drags on the economy, but yes it hurts the rich more.

Taxing 3% of my net worth would result in a significant tax decrease for me. And unless you're terrible at generating income on your assets, I suspect it'd result in a tax savings for you as well. For a median income of $52,000 one would need more than $208,000 in net worth before it would cost more in federal taxes (that's including the standard and personal deduction, it goes up much higher without those).

The primary value of taxing net worth over net income is that it encourages efficient use of resources. People who acquire assets that don't generate value at punished while people who acquire assets that do generate value are rewarded. It's entirely superior to taxing income in relation to incentives. They key problem is that it's difficult to objectively assess net worth, and difficult to verify. Income requires a transaction, which both parties involved generally have incentive to document accurately. No one else is directly involved in assessing my net worth, and I have reason to lie to the state were it taxed.

You've been suckered here. A flat tax by definition is entirely, well, flat. You're throwing deductions and tax credits in because when Republicans have floated the idea of a flat tax they tend to disingenuously remove those items. They're handing out free axes, but the head and the handle will cost extra.

Anyway, sure I'd support it, but Republicans would never let a flat tax pass.

Wrong, it's new income. When you buy $100,000 worth of stock (using capital that has already been taxed) and sell it for $150,000, the extra $50,000 above your basis is new income and consequently taxed. This is entirely consistent with our general method of taxing income. If I spend 100 dollars worth of labor and parts to build a bike, which I then sell for $150, then $50 in net income I earned is taxed.

It's easy to show the wealthy pay a greater percent of the nation's taxes than the percent of revenue they collect, but that's a fundamentally flawed measurement method.

It's flawed to compare direct income by someone making $10k a year and someone making $10 million a year. If we taxed businesses like we did people, airports would be bankrupt. We tax net income for businesses rather than income, because some industries have high proportional expenses.

The same metric should be applied to individuals, which is really what the standard deduction is about. There is a certain cost associated with me being able to work and generate revenue. I need to eat food and sleep somewhere. These costs are the same as expenses for businesses. Net income for me is what I earn beyond basic living costs.

If you remove the standard deduction by considering it as an expense to generate income rather than a arbitrary benefit, then it becomes much more evident how regressive the tax system is.

Yes I'm specifically talking, taxes on wealth, rather than taxes on economic activity. The primary barrier to implementation is capture rate, but let's ignore that for now. There is some merit to fixed inflation rate as a lever, but that's not solved science yet. This tax schema allows for increased economic throughput by increasing extra-entity asset liquidity, and reduces non-productive wealth calcification.

"Flat income tax" is an idiotic idea, sold to people who can't grasp the basics of our taxation system.

Amen!

I'm largely ignorant Timelord.

As stated before, I see the largest issues with taxing net worth being data integrity. Some assets have nebulous value until they are sold. And were individuals able to consistently, accurately assess their net worth, they have greater opportunity and incentive to lie.

I don't see how imposing a fixed rate of inflation alters that. If I'm misunderstanding terms or missing an important detail, let me know.

Some assets have nebulous value until they are sold

Meh. Price finding mechanisms for that sort of thing, while not perfect, are certainly sophisticated enough to approximate value for tax purposes, particularly when a mistake can be recovered when an asset is made liquid. Doesn't seem to be much of a hurdle, honestly.

That said, it's psychologically close to impossible to sell wealth taxation in the US. See also: the history of inheritance taxation.

What's your analysis of using the inflationary back door? It might be easier to sell it as a tax reduction as you'd no longer see it leaving your paycheck or at point of sale. Would it be possible without rampant capital flight of a different nature?

Oh, and if I wasn't clear ~3% is both state and federal, you can't really utilize this without them splitting that tap at some point.

Edited, Jun 5th 2015 11:13am by Timelordwho