Irrational X

iTrader: (1)

I did, but i dont agree with the argument that it will hit middle America harder than anyone else. the point of user based fees and taxes is to target the people who actually use a product or service.

lets just say for giggles that my tax burden is currently 30% of my income. i drive my car to work everyday about 60 miles round trip. should i pay more to maintain the roads than someone who walks to work? **** yes i should.

lets expand further:

you and i both make 100k a year. we have completely identical lifestyles, houses, and vehicles, with the only difference being that that you walk or bike to work and use the car for longer trips or errands and i drive everywhere.

Lets say that of that 100k you are able to save 50k a year. Due to my increased expenditures on gas, maintenance, etc I am only able to put away 40k a year.

Currently the amount you and I pay in taxes would be nearly identical despite the fact that I cost society significantly more in terms of pollution and health costs since you, by walking, are presumably more healthy than I am and don’t cost the gov. money in road maintenance.

I don’t think that’s fair to you.

Look, tax revenue will have to go up. It absolutely will, in order to pay off all this bull****. So why not put the burden on those who spent us into this mess instead of those who actually maintained fiscal responsibility?


And yet they think they can run the big 3 better than private enterprise....

LxJLthr

iTrader: (12)

If you read my first post, I have already stated that I understand taxes are important and necessary and that I do not mind paying my fair share. I am in full agreement with you there. However, the execution and logistics of it is where I am having problem. I will be repeating myself from other posts I made here before, but there are several issues at play here...

So, what if I am one of those people who actually did live within my means by having weekly budgets, running financial models to predict my future expenses and free cash flow, only using their cash/debit cards and only relying on the credit cards in a pinch? This means I did not do anything to contribute to this mess; and according to your statement does this mean I get a free pass and not have to pay no taxes? I highly doubt it...

According to the IRS, only 9% of all taxpayers make up my income bracket, yet that group pays a whopping 20% of all taxes...and it will only go up if the current income tax system remains. Fine, I understand we need to go through this, but I do not see the point if it will mean same frivolous government policies that got us here into the first place; wars we didn't need, educational cuts from a system that's already a laughing stock of the world, antiquated public aid system with no incentives to leave and bail outs to companies that do not deserve them to name a few prominent topics...Until there is reform about WHERE that money is going I will continue to have issues.

If you have not realized this, but VAT is a hidden regressive tax, where the rate decreases as the amount subject to taxation increases and is embedded into the price of goods. Therefore, it applies a greater burden, relative to resources, on lower and middle-income households as they spend a greater proportion of their incomes on consumption than higher-income households.

VAT can be applied on many levels, everything from individual payroll taxes, consumer goods or system wide. The article does not discuss every level of possible impact, which would be another big issue for me. What would prevent wealthy individuals and companies from [again] lobbying from having certain areas not taxed allowing for loop holes? And since it is a hidden tax, it would be that much harder to figure out who is getting properly tax. How is that fair to me?

LxJLthr

iTrader: (12)

Are you presuming that 50k going to be saved AFTER income tax? Please do not tell me you want to add VAT on TOP of regular income tax? So, you want to tax everyone MULTIPLE TIMES in US? The whole premise of VAT is that it would replace the current tax system from what I understood in that and other article I looked up. Which means both of us would start with $100,000. And if you use such a narrow example where everything else is equal, than yes, I supposed it can work.

However, the issue is that not everything in US makes the same amount of money and not everything else is equal. To elaborate further...

Say you and I make $100,000 and our boss makes $1,000,000. To keep things fair, it would mean that our boss would have to spend 10x more on everything in his life to keep taxes paid proportionate and fair. Therefore, if the VAT rate is 10% and we drive $30,000 STis, we would be paying $3,000 in tax...or...3% of our annual income. To keep things fair, our boss would have to drive a $300,000 Ferrari to pay $30,000 at 10%...or...the same 3% of his annual income. I highly doubt that will be the case; he will most likely have a $100,000 BMW which in the end will burden him 1%...That is the meaning of lower and middle-income households spending a greater proportion of their incomes on consumption than higher-income households.

In the progressive income tax system the tax rate would increase as the amount subject to taxation increases to keep things level and fair to prevent the above mentioned disproportion from occurring. To me personally it it a simple concept, if you are able to take advantage of the opportunities given to you and become successful, pay your fair share back in allowing other people to have the same opportunities. The more people that are able to take advantage the more will more up and less burden will be placed on you in the process. However, people become greedy and corrupted by money and refuse to share the wealth and opportunities and create barriers of entry for others...and this concept of course only works if the system wisely diverts money back into the system, which has been the root cause of the problem for the longest time. Therefore, getting back to my point, fix how that money is spent before asking for more.

Irrational X

iTrader: (1)

nope. i want no income tax. the EU VAT has a lot of issues, but the basic idea of user based taxes is a good one.

spend less, save more. americans aren't smart enough to do that on their own apparently.

Irrational X

iTrader: (1)

thats why i never once said "VAT" i said user based fees. toll roads, flat sales tax, or even one that scales higher based on price (but im not that much of a socialist).

we cant fix the issues with tax avoidance that the ultra-rich perform anyway so income tax reform is a moot point. taxing non-essential goods and services instead of stated income is the best way to ad some semblance of fairness to our tax system.

LxJLthr

iTrader: (12)

Oh okay...good...I got worried for a second. Unfortunately, there are a lot of good ideas out there that I agree on principal. Their execution, logistics and reality is a completely different matter. Hey, communism works on paper, but we all know how that concept turned out.

LxJLthr

iTrader: (12)

So who is going to decide what is non-essential? That is like playing financial God to me...To my female friends a $500 dress is essential, while I consider a gym membership to be a necessity for me. That's where things will break down, as I have already mentioned, when you apply the tax to only certain levels of society it is very hard not to avoid discriminating against someone and allowing for much easier avoidance of the tax. That is why with tax systems you need to have them system wide, which opens a new can of worms.

Irrational X

iTrader: (1)

ill elaborate.

i drive to work. oil changes are an essential service, so dont tax it. having a pool installed at my house is a luxury, so tax it. buying an M6 is a luxury and should be taxed accordingly when a civic can get me to work just as well.

also with user based taxes you have the ability to do a certain amount of price control and mitigate the impact of short term rises in price. Imagine if 10 years ago we started ramping up the gas tax so that 2 years ago gas was already $4. as the price of oil increased the rate of tax could be decreased to maintain stability.

now, thats to to say im in favor of those sorts of market interference, i just like to use the gas example since its a touchy subject.

the point is there are much better ways to generate revenue than income taxes.

Irrational X

iTrader: (1)

actually its worked for centuries for the Jesuits, but apparently Russians aren't saints.

sigma pi

iTrader: (6)

the bus would get you to work too