A Tax Theorem -or- "Why People are stupid when it comes to taxes."

[Deornwulf]

I have been doing a great deal of reading on the FairTax plan being proposed by www.fairtax.org and Neal Boortz. In my investigations of criticisms of the plan, I have come to the realization that people are clueless when it comes to understanding how taxes work. So I have come up with a simple theorum to explain how all taxes work. If others have posted similar ideas, please free to link them here.

My theorem is this - The government has a set budget. It will set any tax rates accordingly to meet this budget. Any tax exemptions will cause the tax rate to be elsewhere to make up the difference. Tax evasion, legal or illegal, causes the same thing to occur. These changes will always shift the tax burden in an unfair manner from the whole of a society to specific segments of that society.

Basically, no matter what, the government is going to get its pound of flesh. The question is whether or not that pound comes from everyone or a select few.

 

[5stringJeff]

I think your initial statement (the government has a set budget) is flawed. The government will take all it can get. We are running deficits, and have been for some time. The issue is that the percentage that lower income people get taxed is close to zero, while the percentage that the rich get taxed at is around 33%, which is inherently unfair. The government should tax all people at an equal percentage.

 

[Deornwulf]

When you speak of the rich paying 33%, I assume you are speaking of those who earned more than $50,000 in the past fiscal year and not the wealthy (many of whom make our tax laws) who can structure their income through OFC's and Trust Funds in such a manner to only pay 12% on their real income in taxes.

 

[5stringJeff]

When you speak of the rich paying 33%, I assume you are speaking of those who earned more than $50,000 in the past fiscal year and not the wealthy (many of whom make our tax laws) who can structure their income through OFC's and Trust Funds in such a manner to only pay 12% on their real income in taxes.

I'm all in favor of restructuring tax laws to close such loopholes.

 

[BaronVonBigmeat]

I'm all in favor of restructuring taxes to open similar loopholes to all.

In fact, I really just want to cut the various levels of government back to the point where their functions are paid for with user fees and charitable donations.

 

[Hobbit]

I'm in favor of scrapping income tax altogether and levying a tax on consumption, like in the FairTax book. You can't dodge a consumption tax without buying everything overseas. Everybody buys things.

 

[Bullypulpit]

Working people voting for Republicans because of tax-cuts is like mice voting for mouse-traps because of the cheese.

 

[rtwngAvngr]

Working people voting for Republicans because of tax-cuts is like mice voting for mouse-traps because of the cheese.

Here's my metaphor: you're like an idiot.

 

[Mr. P]

I'm all in favor of restructuring taxes to open similar loopholes to all.

In fact, I really just want to cut the various levels of government back to the point where their functions are paid for with user fees and charitable donations.

How about we cut er back to what the Constitution spells out?

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

Excise
excise n a tax on the manufacture, sale, or consumption of goods within a country

There's our fair tax, right there.

 

[Hobbit]

Working people voting for Republicans because of tax-cuts is like mice voting for mouse-traps because of the cheese.

You talking because you think you're right and on topic is like crap spewing out of somebody's mouth, only it smells worse.

 

[pegwinn]

This is my annual I hate income taxes rant.

Don't get me wrong I understand and support folks paying to make government run. But this tax code is sooooooo ignorant.

Let me share with you some of this years fun.

It took twenty-eight actual hours at the box, answering questions and such so it could tell me I owed a couple of hundred dollars.

My family has four jobs total.
Each job brings in five figures annually.
Each job was within a hundred dollars of each other.
Each job was withheld at Married and two dep and yet the amounts withheld from each are not even close. Job one (which didn't have the highest annual total) withheld twice as much as job four.

I would love to find the algebra and supporting instructions that made the above work out.

Just one average middle class horror story.

I would support a tax increase if it were a flat tax and paperless or as near paperless as technologically feasable. Then add in a national sales tax of about five percent. No deduction, no rebates, no prebates, no bullshit.

The President's Advisory Panel on Federal Tax Reform had a chance to do great things. It blew it. Here's the final report.

 

[Nienna]

I know nothing about taxes except, "I don't like them."

Oh, and I DO love that $4000 child tax credit every year!

Yay President Bush! :usa:

 

[LOki]

<blockquote><i>"Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole-with their common aim of legal plunder-constitute socialism."
--Frederic Bastiat</i></blockquote>Whenever someone makes a statement like, "Nowhere in our Constitution is there even a hint of authority for most of what Congress taxes and spends for today," there is always some socialist in the wings ready with:<blockquote>Section 1, Article 8 of the U.S. Constiution
Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;</blockquote>Rarely do these redistributionist ponzi schemers cite the remaining clauses, which describe the Debts, commonDefense and general Welfare the Taxes, Duties, Imposts and Excises are supposed to pay for,:<blockquote>Clause 2: To borrow Money on the credit of the United States;

Clause 3: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Clause 4: To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

Clause 5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Clause 6: To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

Clause 7: To establish Post Offices and post Roads;

Clause 8: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

Clause 9: To constitute Tribunals inferior to the supreme Court;

Clause 10: To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

Clause 11: To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

Clause 12: To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

Clause 13: To provide and maintain a Navy;

Clause 14: To make Rules for the Government and Regulation of the land and naval Forces;

Clause 15: To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

Clause 16: To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

Clause 17: To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, byCession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And

Clause 18: To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.</blockquote>When I discover that Americans work about 70 days year to cover our federal tax "obligation," I wonder what my "obligation" should be paying for. I think that the natural duty of government is to excercise force. I believe that is the root function of government. Each of us loans our violent potential to the government to use on our behalf in the case of invasion, assault or theft (while reserving the right in those cases where the government can't act timely or becomes despotic). Clauses 2 - 18 Section 1, Article 8 of the U.S. Constiution appear to affirm my opinion. Consequently, I still expect to pay for appropriate legislation, the maintenance of courts, and national defense. In Section 1, Article 8 of the U.S. Constiution, nowhere do you find:<blockquote>Non Existent Clause 19: The Congress shall have Power to take the money you would save for retirement, and subsidize someone else's retirement with it.

Non Existent Clause 20: The Congress shall have Power to take the money you would save for healthcare, and subsidize someone else's healthcare with it.

Non Existent Clause 21: The Congress shall have Power to take the money you would save for your dream of home ownership, and subsidize someone else's dream of home ownership with it.

Non Existent Clause 22: The Congress shall have Power to take your grocery money, and subsidize someone else's grocery bill with it.

Non Existent Clause 23: The Congress shall have Power to take the money you would save for children's education, and subsidize the education of someone else's children with it.

Non Existent Clause 24: The Congress shall have Power to take your wages, and subsidize someone else's wages with them.

Non Existent Clause 25: The Congress shall have Power to take the money you would save for an HDTV and home theater system to subsidize a trip for 4 dudes to the FREAKING MOON!!!!!!</blockquote>My gripe is that about 36% of the discretionary budget has nothing to do with the constitutional obligations of the government, nor does 97% of the mandatory spending portion of the budget, making $1.8 trillion of a $2.47 trillion budget, or nearly 73% of federal spending (or call it ~$6,000 per person) having nothing to do with national defense or running the courts, but rather redistributing wealth as our government sees fit. I often wonder why we tolerate these incursions upon our lives and liberty.<blockquote><i>"Good intentions will always be pleaded for any assumption of power. The Constitution was made to guard the people against the dangers of good intentions. There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters."
--Daniel Webster</i></blockquote>Yes. It seems that socialists, both Democrat and Republican, established new and spurious "rights" as entitlements--such as Social Security, Welfare, Medicare/Medicaid, Farm Subsidies, Corporate Bail-outs, Public Education, Space Travel and Art Endowments--and then use the argument from rights as rationale to provide those entitlements. Under the moral guise of freedom and prosperity are our elected representatives enslaving and stealing from us, and in doing so, making us slave owners and thieves as the beneficiaries of this action--and to what ends? Personal power is my guess. The power to compell people to their bidding.<blockquote><i>"The goal of the "liberals"-as it emerges from the record of the past decades-was to smuggle this country into welfare statism by means of single, concrete, specific measures, enlarging the power of the government a step at a time, never permitting these steps to be summed up into principles, never permitting their direction to be identified or the basic issue to be named. Thus, statism was to come, not by vote r by violence, but by slow rot-by a long process of evasion and epistemological corruption, leading to a fait accompli.(The goal of the "conservative" was only to retard that process.)"
--Ayn Rand</i></blockquote>

 

[LOki]

Related: How federal spending has climbed since 2001

 

[dmp]

I know nothing about taxes except, "I don't like them."

Oh, and I DO love that $4000 child tax credit every year!

Yay President Bush! :usa:

Ya might wanna thank your hubby too...w/o him...well...you wouldn't be eligable for the child credit.

 

[manu1959]

Ya might wanna thank your hubby too...w/o him...well...you wouldn't be eligable for the child credit.

can you say sperm bank? :wank:

 

[DimitroffVodka]

I would be in favor of a Flat Tax across all Income. It would stop the current Tax Cuts that only help people in Higher income brackets. With Tax Cuts on Capital Gains it only helps people with Capital Gains. The people with Capital Gains tend to be in better shape finacially.

But the current Tax Cuts are geared to the upper 2%.

 

[pegwinn]

Currently you get two choices.

Choice one is the annual revision to the current tax code. Lots more words, lots more pages, lots more confusion.

Choice two is HR25 Known as the fairtax. It is currently the only tax bill in congress related to the income tax that isn't part of choice one. HR25 isn't perfect. But, you can spot perfection in the neighborhood. With the current tax code you cannot find perfect with a 1:1,000,000 map and google directions. www.fairtax.org or you can get the fairtax book by linder/boortz in the public library.

Of course beginning April 16 the outrage will dim until January of next year.

 

[dmp]

I would be in favor of a Flat Tax across all Income. It would stop the current Tax Cuts that only help people in Higher income brackets. With Tax Cuts on Capital Gains it only helps people with Capital Gains. The people with Capital Gains tend to be in better shape finacially.

But the current Tax Cuts are geared to the upper 2%.

Welcome! I can see you need to read-up on how Taxes work, and who actually pays them.

I'm not in the upper 2%, I'm barely average, and the current tax cuts are saving me thousands yearly

 

[Deornwulf]

I'm glad to see that this thread is still kicking around. I hope that everyone can agree that the current tax code is broken.

Although many of us find the government to be irresponsible with our money, this has nothing to do with gubberment spending. It's how the money is being collected that is unfair and wasteful.

A consumption tax would fairly tax everyone, criminals and black marketeers included. No taxes on income, private or corporate, would make America the ultimate financial haven of the world. Such a tax structure would insure that the Liberals have enough money for their social reforms and the Conservatives would find that their savings always increasing.