Author Topic: High Tax Rates Won’t Work in Today’s Economy  (Read 1894 times)

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Offline Sanguine

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High Tax Rates Won’t Work in Today’s Economy
« on: January 09, 2019, 09:48:01 PM »
Finally, an article from CATO that I agree with.

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By Chris Edwards
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Rep. Alexandria Ocasio-Cortez is making headlines calling for raising the top individual income tax rate to 70 percent to fund a Green New Deal. Sympathetic commentators are saying that such a high rate on the wealthy is no big deal because the top tax rate used to be 70 percent and above. Noah Smith at Bloomberg says the congresswomen’s plan would be “a return to the 20th century norm.”

The problem is that globalization has dramatically changed the economy over recent decades. High tax rates were not a good idea back then, but they would be disastrous now.

Before the 1980s, capital controls under fixed currency exchange rate regimes kept money bottled up within countries, keeping taxpayers in national economic prisons. That regime broke down, and today trillions of dollars flows over borders under flexible exchange rate systems, while industries and entrepreneurs have become highly mobile. Tax bases are far too movable these days for governments to sustain yesteryear’s excessive tax rates, as I discuss in Global Tax Revolution....

https://www.cato.org/blog/high-tax-rates-wont-work-todays-economy



Cui bono?

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Offline LMAO

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #1 on: January 10, 2019, 06:39:04 PM »
Plus in many cases there was enough deductions that you did not pay 70%. We see when taxes get too high for anyone’s comfort level there’s pushback. A perfect example of this is  people leaving high tax states to move to lower tax states
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Online Bigun

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #2 on: January 10, 2019, 06:43:10 PM »
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!

Http://fairtax.org
« Last Edit: January 10, 2019, 06:44:54 PM by Bigun »

Offline berdie

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #3 on: January 12, 2019, 05:57:57 PM »
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!

Http://fairtax.org



I agree.  I'm a big fan of a consumption tax. Then everyone would have some "skin in the game".  But how would it work?

Online roamer_1

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #4 on: January 12, 2019, 06:01:57 PM »
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!

Http://fairtax.org

That's right.

Online jmyrlefuller

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #5 on: January 14, 2019, 12:08:37 PM »


I agree.  I'm a big fan of a consumption tax. Then everyone would have some "skin in the game".  But how would it work?
A 30% tax on every consumer good in the country—which still probably wouldn't cover our federal budget—coupled with a basic income guarantee they like to call a "prebate."

Want to buy milk and bread? Tax.

Want to buy stock? No tax.

Offline Hoodat

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #6 on: January 14, 2019, 12:25:09 PM »
My problem with a consumption tax is that the incentive for the seller is to not report sales, whereas with an income tax, the incentive for an employer is to report income.
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Offline Sanguine

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #7 on: January 14, 2019, 12:58:16 PM »
A 30% tax on every consumer good in the country—which still probably wouldn't cover our federal budget—coupled with a basic income guarantee they like to call a "prebate."

Want to buy milk and bread? Tax.

Want to buy stock? No tax.

You don't have to tax some basic items, and we haven't covered our federal budget in a long time.
« Last Edit: January 14, 2019, 12:59:05 PM by Sanguine »
Cui bono?

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Offline GrouchoTex

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #8 on: January 14, 2019, 01:52:19 PM »
If we would stop taxing on the input end and start taxing on the consumption end instead our economy would take off like no one alive today has never seen!

Http://fairtax.org

No doubt.

Online roamer_1

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #9 on: January 14, 2019, 02:49:38 PM »
My problem with a consumption tax is that the incentive for the seller is to not report sales, whereas with an income tax, the incentive for an employer is to report income.

Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.

However, I am against a federal tax at all - If they want money, have em get it from the state, and let the state tax me.

Offline InHeavenThereIsNoBeer

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #10 on: January 14, 2019, 03:35:43 PM »


I agree.  I'm a big fan of a consumption tax. Then everyone would have some "skin in the game".  But how would it work?

And how do you implement it without screwing the people who already paid half their income under the income tax model?
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Offline InHeavenThereIsNoBeer

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #11 on: January 14, 2019, 03:37:52 PM »
Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.

However, I am against a federal tax at all - If they want money, have em get it from the state, and let the state tax me.

Yep.  Let the state get it's hands on our money (aka "their" money) and they'll have an incentive to see less go to DC.  Then repeal the 17th, increasing the power of the states.
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Online roamer_1

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #12 on: January 14, 2019, 03:41:03 PM »
Yep.  Let the state get it's hands on our money (aka "their" money) and they'll have an incentive to see less go to DC.  Then repeal the 17th, increasing the power of the states.

That's right - and legit.

And get rid of property tax too, btw... Straight up retail consumer tax only... that is te way it all stays transparent, and the whole government has skin in the game for keeping the economy roaring.

Offline Sanguine

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #13 on: January 14, 2019, 03:58:51 PM »
And how do you implement it without screwing the people who already paid half their income under the income tax model?

I don't understand the question.  @InHeavenThereIsNoBeer
Cui bono?

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Offline thackney

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #14 on: January 14, 2019, 04:31:19 PM »
I don't understand the question.  @InHeavenThereIsNoBeer

@Sanguine @InHeavenThereIsNoBeer

If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.
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Offline Sanguine

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #15 on: January 14, 2019, 04:36:12 PM »
@Sanguine @InHeavenThereIsNoBeer

If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.

Oh, I see.  Good point.  That would include me in the "screwed" category.  Sounds like it needs to be introduced on an age-adjusted basis.
Cui bono?

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Online Bigun

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #16 on: January 14, 2019, 04:37:03 PM »
And how do you implement it without screwing the people who already paid half their income under the income tax model?

@InHeavenThereIsNoBeer

Got to the link and read then get back to me.

http://fairtax.org/faq

Online Bigun

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #17 on: January 14, 2019, 04:37:52 PM »
@Sanguine @InHeavenThereIsNoBeer

If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.

@thackney

How so? 

Online roamer_1

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #18 on: January 14, 2019, 04:37:59 PM »
@Sanguine @InHeavenThereIsNoBeer

If you spend all of your income producing days in an income tax, you are screwed in your retirement when they switch to a consumption tax.

Not if food, or at least basic food is not taxed, same with medicines.
You might get whacked on house repairs and buying a motor home or whatnot, but the living part of it should not be taxed anyway.

Online Bigun

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #19 on: January 14, 2019, 04:39:45 PM »
Quite the other way around. Sellers are already used to taxes, a robust system already exists, and is far better off to report the sale as to leave it in inventory.

However, I am against a federal tax at all - If they want money, have em get it from the state, and let the state tax me.

Which is pretty much how the Fairtax would work.

https://fairtax-structure-psyclone.netdna-ssl.com/client_assets/fairtaxorg/media/attachments/56c4/aea2/6970/2d06/a71c/0000/56c4aea269702d06a71c0000.pdf?1455730338

Offline Sanguine

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #20 on: January 14, 2019, 04:40:14 PM »
Cui bono?

Walk in Wisdom
See then that you walk circumspectly, not as fools but as wise, redeeming the time, because the days are evil.

But the noble make noble plans, and by noble deeds they stand.

Online Bigun

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #21 on: January 14, 2019, 04:42:52 PM »
Oh, I see.  Good point.  That would include me in the "screwed" category.  Sounds like it needs to be introduced on an age-adjusted basis.

@Sanguine

Lots of people say things about this that are patently untrue in reality.  Lots of relevant papers that you should read:  https://fairtax.org/research-library/taxes-and-tax-reform

Offline thackney

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #22 on: January 14, 2019, 04:49:47 PM »
@thackney

How so?

Switching to a system that pays 30% tax at the retail counter will deplete the savings built up under a different system of taxing during the income producing days.

From http://fairtax.org/faq
Quote
I know the FAIRtax rate is 23 percent when compared to current income taxes. What will the rate of the sales tax be at the retail counter?

30 percent. This issue is often confusing, so we explain more here.

When income tax rates are quoted, economists call that a tax-inclusive quote: “I paid 23 percent last year.” For every $100 earned, $23 went to Uncle Sam. Or, “I had to make $130 to have $100 to spend.” That’s a 23-percent tax-inclusive rate.

We choose to compare the FairTax to income taxes, quoting the rate the same way, because the FairTax replaces such taxes. That rate is 23 percent.

Sales taxes, on the other hand, are generally quoted tax exclusive: “I bought a $77 shirt and had to pay that same $23 in sales tax.” This is a 30-percent sales tax. Or, “I spent a dollar, 77¢ for the product and 23¢ in tax.” This rate, when programmed into a point-of-purchase terminal, is 30 percent.

Note that no matter which way it is quoted, the amount of tax is the same. Under an income tax rate of 23 percent, you have to earn $130 to spend $100.

You earn your income in the first system then pay the tax again in the second system. 
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Online Bigun

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #23 on: January 14, 2019, 05:02:19 PM »
Switching to a system that pays 30% tax at the retail counter will deplete the savings built up under a different system of taxing during the income producing days.

From http://fairtax.org/faq
You earn your income in the first system then pay the tax again in the second system.

The problem with that is that you are already paying a consumption tax although they don't call it that. The Corporate income tax is a functional VAT! Every dollar that corporations spend to pay that tax, and ALL the costs associated with it winds up in the prices of every good and service manufactured in this country today. You pay in every loaf of bread or gallon of milk you buy whether or not you realize it. 

I worked all my life under the income tax system and now retired I would give anything to be free of the income tax and the IRS!

Offline thackney

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Re: High Tax Rates Won’t Work in Today’s Economy
« Reply #24 on: January 14, 2019, 05:13:04 PM »
The problem with that is that you are already paying a consumption tax although they don't call it that. The Corporate income tax is a functional VAT! Every dollar that corporations spend to pay that tax, and ALL the costs associated with it winds up in the prices of every good and service manufactured in this country today. You pay in every loaf of bread or gallon of milk you buy whether or not you realize it. 

I worked all my life under the income tax system and now retired I would give anything to be free of the income tax and the IRS!

You clearly don't working in Ranching as a side income like I do.  30% tax on tractor, no way.
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