Worst Idea on the planet: National Sales Tax!!!!

[tonton]

I am flabbergasted. I really, honestly don't know what to say about this. It makes me sick that the rich are so fucking greedy that they will do anything within their power to avoid supporting Uncle Sam.

http://www.foxnews.com/story/0,2933,131693,00.html

[Gon]

Originally posted by tonton
I am flabbergasted. I really, honestly don't know what to say about this. It makes me sick that the rich are so fucking greedy that they will do anything within their power to avoid supporting Uncle Sam.

http://www.foxnews.com/story/0,2933,131693,00.html I don't understand how your comment relates to the article, exactly. The rich pay the minimum they have to, just as everyone else. A tax system has to be built with the assumption that people will pay the minimum they can legally pay. In a complicated system with multiple cumulative deductions and exemptions, it's pretty much to be expected that some people can use all of them together and pay next to nothing.

There's no way to micromanage your consumption to optimize paid sales tax. There is also no way to pay it to another (typically tax haven) country like some so-called 'greedy rich' are able to do with other taxes.

I cannot endorse these suggestions as I don't know enough economics, and the article is reported by Fox so the facts in the article can be 'flexible', but there are definite upsides to the general principles of the suggestions.

[tonton]

An earner of $15000 a year:

$5000 a year goes to rent.
$5000 a year goews to transportation/other expenses.
$5000 a year goes to food/clothing/other taxable purchases.
$0 goes to savings.

They would pay 23% of 1/3 of their income under the proposed system.

An earner of $400000 a year:
They own their home and we're assuming their mortgage is paid.
Let's say $100000 a year goes to transportation/travel/entertainment.
They could easily limit their budget to $50000 a year for food/clothing/other taxable purchases.
Let's say the rest goes to savings/investment/non-taxable miscellany.

They're paying 23% on 1/8 of their income.

Gee that looks fair to me. :rolleyes:

Originally posted by Gon
I don't understand how your comment relates to the article, exactly. The rich pay the minimum they have to, just as everyone else. A tax system has to be built with the assumption that people will pay the minimum they can legally pay. In a complicated system with multiple cumulative deductions and exemptions, it's pretty much to be expected that some people can use all of them together and pay next to nothing.

There's no way to micromanage your consumption to optimize paid sales tax. There is also no way to pay it to another (typically tax haven) country like some so-called 'greedy rich' are able to do with other taxes.

I cannot endorse these suggestions as I don't know enough economics, and the article is reported by Fox so the facts in the article can be 'flexible', but there are definite upsides to the general principles of the suggestions.

[Gon]

Originally posted by tonton
An earner of $400000 a year:
They own their home and we're assuming their mortgage is paid.
Let's say $100000 a year goes to transportation/travel/entertainment.
They could easily limit their budget to $50000 a year for food/clothing/other taxable purchases.
Let's say the rest goes to savings/investment/non-taxable miscellany.Hm. I assumed this sales tax was the equivalent of the VAT (value added tax) in Europe, which is charged on absolutely *everything* you purchase, so also on transportation, travel and entertainment.

In fact, if I wanted to buy a new car, I would first pay for the car, just a tad less than people pay everywhere else in the world, because the manufacturers are compensating for the outrageous taxes. On top of that, roughly 28% car tax, then 22% VAT both for the buying price and for the car tax! (Yes, they tax for paying a tax. Just how idiotic is that?)

Anyway, assuming the sales tax would be like VAT, your example $400000 earner would pay $34500 tax and the $15000 earner would pay $2300 tax. The $34500 and $2300 fetch the same services from society. IMO the deal doesn't sound bad for the $15000 earner.

[SpcMs]

I've been thinking about something (i know very little about economics, but if someone could point me to an article or something about this i would be very grateful). How about you simply give all people, from birth until they die, a fixed amount of money (the 'living minimum'). To compensate for that you get rid of all unemployment fees, employment regulation, minimum wage, pensions, whatever.

How to reform taxes, i'm not so sure. There should be an easier system than the one we have today but...
I guess a differentiated sales tax (basic goods, luxery goods, ...), combined with a tax on speculative investments (some kind of Tobin tax) and a tax on production (in stead of profit), but the economic implications of that go way above my head.

Disclaimer: i realise my post i probably nonsense, but i think it's an interesting subject so if anybody would care to say anything about it, thank you :))

[Anders]

Originally posted by Gon
In fact, if I wanted to buy a new car, I would first pay for the car, just a tad less than people pay everywhere else in the world, because the manufacturers are compensating for the outrageous taxes. On top of that, roughly 28% car tax, then 22% VAT both for the buying price and for the car tax! (Yes, they tax for paying a tax. Just how idiotic is that?)

Ha. I can raise that.

First we buy the car. Then you pay 180% to able to use it. and then you pay 25% in VAT.

A $20000 then costs $70000:wow: :wow:

[Powerdoc]

Originally posted by Anders
Ha. I can raise that.

First we buy the car. Then you pay 180% to able to use it. and then you pay 25% in VAT.

A $20000 then costs $70000:wow: :wow:

This is truly insane.

[bunge]

Originally posted by Gon
Anyway, assuming the sales tax would be like VAT, your example $400000 earner would pay $34500 tax and the $15000 earner would pay $2300 tax. The $34500 and $2300 fetch the same services from society. IMO the deal doesn't sound bad for the $15000 earner.

What is each paying now? I think if you compare you'll see that the $15,000 earner would get screwed.

[Scott]

One thing about sales tax is that it's really hard for the tax cheats for avoid. So your John Edwards and THK types would have a hard time rigging the system to their advantage.

[groverat]

One thing about sales tax is that it's really hard for the tax cheats for avoid.

:lol: :lol: :lol:

Oh yeah, it would be a NIGHTMARE!
A lot of America's rich own businesses. There would undoubtedly be tax breaks for these businesses.
2+2=?

And if they don't have a business to begin with, they can start one.

Oh, and they would try to keep the poor exempt?
Linder, a six-term representative, dismisses the central criticism of a national sales tax — that it would disproportionately tax the poor — by saying they would be exempted.

Yeah, sounds like this would be easy as pie.

The only reason to move away from the progressive income tax is to try and shift the tax burden off the rich and onto the middle and poor classes.

[Gon]

Originally posted by SpcMs
How to reform taxes, i'm not so sure. There should be an easier system than the one we have today but...
I guess a differentiated sales tax (basic goods, luxery goods, ...), combined with a tax on speculative investments (some kind of Tobin tax) and a tax on production (in stead of profit), but the economic implications of that go way above my head.[/i] We have it, but there is absolutely no good reason for a differentiated sales tax. It's the government's way of telling me what to buy, and I can decide by myself, thankyouverymuch. For example, the current VAT for food in Finland is 8%. Served food (restaurants, cafes etc) is taxed at 22%. That's a 14% percent direct price penalty for choosing the 'wrong' option instead of the one 'recommended' by the state.

'Speculation' is a key component of the market. Currencies are goods like any other. If their prices (aka exchange rates) are unstable, the market will take that into account, manage the risk, and undergo constant, small corrective action through trade. The Tobin tax would hurt the corrective action between currencies and probably lead to violent rate swings. Regulate enough and other, less risky currencies will outcompete the unstable one - to the user of the currency, the tax is a risk. Ideally the currency should be fully backed with concrete matter like gold or silver.

[Gon]

Originally posted by groverat
:lol: :lol: :lol:

Oh yeah, it would be a NIGHTMARE!
A lot of America's rich own businesses. There would undoubtedly be tax breaks for these businesses.
2+2=?

And if they don't have a business to begin with, they can start one.Business not equals person. No business, ever, pays VAT. It's not a 'tax break', the whole tax has nothing to do with companies. Think about it. If a company bought electronic components, paid VAT, manufactured a speaker and sold it to customer with VAT, that would mean the tax is collected twice for the same thing - or as many times as there were manufacturing steps in different companies.

I believe people don't really cheat much on VAT here in Finland. It would be too hard, the payoff too small, and risk (getting caught for tax fraud) too high. Whenever companies buy and sell without VAT, there is a paper trail. If you buy stuff for private use in the name of the company, you'd better have a bombproof explanation about the item's work uses for the tax inspector.

[SpcMs]

Originally posted by Gon
We have it, but there is absolutely no good reason for a differentiated sales tax. It's the government's way of telling me what to buy, and I can decide by myself, thankyouverymuch. For example, the current VAT for food in Finland is 8%. Served food (restaurants, cafes etc) is taxed at 22%. That's a 14% percent direct price penalty for choosing the 'wrong' option instead of the one 'recommended' by the state.

'Speculation' is a key component of the market. Currencies are goods like any other. If their prices (aka exchange rates) are unstable, the market will take that into account, manage the risk, and undergo constant, small corrective action through trade. The Tobin tax would hurt the corrective action between currencies and probably lead to violent rate swings. Regulate enough and other, less risky currencies will outcompete the unstable one - to the user of the currency, the tax is a risk. Ideally the currency should be fully backed with concrete matter like gold or silver.
Thank you for replying.
I still think it would make sense to have lower taxes on essentials. And higher taxes for a) goods that have hidden costs to society (cigarettes, alcohol, gaz, ...) or b) luxury goods (call it taxing the rich, if you want to. Price elasticity is close to zero anyway).
For the Tobin tax, i did read it would have disruptive effects, only i cannot see how. Well, i can for exchange rates since that's a special market, but not for other 'risk investments'. It would just be a slight increase in transaction costs, which are present anyway. Or am i missing something? :???:

[groverat]

I believe people don't really cheat much on VAT here in Finland. It would be too hard, the payoff too small, and risk (getting caught for tax fraud) too high. Whenever companies buy and sell without VAT, there is a paper trail. If you buy stuff for private use in the name of the company, you'd better have a bombproof explanation about the item's work uses for the tax inspector.

So you still have tax inspectors. Which means you're still supporting a tax bureaucracy, which is what this madness is supposed to eliminate.

So in this idiotic proposed system we would still have the IRS (or some other tax-watching organization) checking out purchases and the rich would be paying even less than they do.

And anyone who thinks there wouldn't be ample loopholes for the rich to get through this new, extremely stupid, system might want to check out this bridge I have for sale in Brooklyn.

[Gon]

Originally posted by groverat
So you still have tax inspectors. Which means you're still supporting a tax bureaucracy, which is what this madness is supposed to eliminate.

So in this idiotic proposed system we would still have the IRS (or some other tax-watching organization) checking out purchases and the rich would be paying even less than they do.

And anyone who thinks there wouldn't be ample loopholes for the rich to get through this new, extremely stupid, system might want to check out this bridge I have for sale in Brooklyn. I never said our system is good.. and the VAT is not a replacement for income tax, which I understand is the purpose for this sales tax proposal.

I expect any system where taxes are collected needs tax inspectors, inspecting businesses. But in a pure VAT/sales tax system, that's the only thing they're inspecting. No personal taxkeeping is necessary since tax for everything is paid at time of sale. How is this an idiotic system?

[alex_kac]

Originally posted by tonton
An earner of $15000 a year:

$5000 a year goes to rent.
$5000 a year goews to transportation/other expenses.
$5000 a year goes to food/clothing/other taxable purchases.
$0 goes to savings.

They would pay 23% of 1/3 of their income under the proposed system.

An earner of $400000 a year:
They own their home and we're assuming their mortgage is paid.
Let's say $100000 a year goes to transportation/travel/entertainment.
They could easily limit their budget to $50000 a year for food/clothing/other taxable purchases.
Let's say the rest goes to savings/investment/non-taxable miscellany.

They're paying 23% on 1/8 of their income.

Gee that looks fair to me. :rolleyes:

Look at sales taxes now. Milk, bread, and other essentials aren't taxed. Add any clothing under $15 to that tax free zone and the poor would pay almost no tax at all for essentials.

[Gene Clean]

Originally posted by Scott
So your John Edwards and THK types would have a hard time rigging the system to their advantage.


Elections are over. Stop the FUD.

[Frank777]

I've lived in two countries while they implemented VATs.

It's an extremely bad system, which basically forces every small business to become the government's tax collectors for free. That's why governments like it.

It's also a system which is being pushed hard by the IMF, World Bank, Paris Club and other world monetary powers, which is enough to make me dislike it.

Canada's GST system is a shambles, though few will admit it openly.
It does penalize the poor, while sending billions to government coffers.

I think the best system would be a proportionate tax on individual and business income.

No deductions, and your tax form is the size of a postcard.

[Gon]

Originally posted by Frank777
I've lived in two countries while they implemented VATs.

It's an extremely bad system, which basically forces every small business to become the government's tax collectors for free. That's why governments like it.

It's also a system which is being pushed hard by the IMF, World Bank, Paris Club and other world monetary powers, which is enough to make me dislike it.If the VAT system is not the only or primary system of personal taxation, if you still have to fill forms, there is no point to it. I have no idea why there are all the different kinds of cumulative taxes.

I am also wary of anything pushed by the posse you mention who pretend to be free marketeers but in many cases are the polar opposite. Trade is more free when you strip away laws that regulate trade, not when you create new regulation and call it "free trade agreement".I think the best system would be a proportionate tax on individual and business income.

No deductions, and your tax form is the size of a postcard.That sounds pretty good too. Basically, I don't care what precisely is taxed as long as it's equal, you can explain the whole system one foot off the ground, and you are always better off by working than by not working.

[Towel]

There's a couple interesting things in that article. One is that the Congressman proposed replacing payroll taxes as well an income taxes. Since payroll taxes are so regressive (and, let's be honest, a sizable chunk of them goes to general spending anyway) there's potential there to keep the tax system reasonably progressive. Like all things, though, it all depends of how you do it.

You need to provide an exemption for low-income folk. There's two ways to do that: by exempting classes of consumption, or by sending out rebates. Either one, frankly, would be pretty darn distorting. There's no practical way to send rebates that cover actual purchases. So you end up, like this guy suggests, sending checks based on estimated purchases, which would seem to provide a huge incentive to game the system. And how do you decide who gets rebates, if we're not filing income tax returns any more? Or do we keep all that bureaucracy in place, just so we know who to send checks to?

The alternative is to exempt things that the poor spend their money on. But given that rich people buy the same stuff as poor people, just better stuff, how do you keep it fair and simple? I don't think you can. If you exempt food, you exempt kraft cheese and caviar. Bologna and lobster. Unless you create a government office whose task is to decide what constitutes "luxury", and have every retailer register with them - what a nightmare! And poor people spend *most* of their income on things like rent/mortages, car payments, insurance, etc. - just like rich people. If you try to tax real estate 30%, the market will crash. But poor folks (like me) pay up to half their income on rent/mortage. How do you exempt only up to a certain level of expenses in these categories? It would be insanely complicated.

One interesting solution, as long as you're replacing payroll taxes anyway, might be to do the estimated rebates, but mandate that they must go into savings accounts - like IRAs or heath savings plans. That could be a good way to transition SS to private accounts, but it solves the transition-cost problem simply by enforcing higher effective taxes on the poor. The net result for the poor is that they see 30% of their income (much more than they pay in payroll + income taxes) forcibly diverted to savings that they can't use to pay the bills.

Then there's the basic issue that our economy is sputtering along purely on the basis of consumer spending, much of it driven by personal debt. Long-term, that's bad - and higher rates of saving coupled with lower rates of debt is a Very Good Thing(tm). But short term, taking that much consumer spending out of circulation could cause a Weimer-style meltdown of our economy and our currency.

So I don't dismiss the idea out of hand, but it's very hard to see how it can be done fairly, simply, and safely.

[groverat]

Here's a reform idea: tighten up loopholes and keep the progressive income tax. It's served us very well so far and it is obviously superior to national sales tax lunacy.

This is nothing more than the rich attempting to soak the poor. Don't be stupid enough to fall for this crap.

[Scott]

Here's a crazy idea. Let me know if it's too "out there". Get rid of the pork spending and government waste. Use the savings to give everyone a huge tax break.

[trick fall]

Here's a crazy idea. Let me know if it's too "out there". Get rid of the pork spending and government waste. Use the savings to give everyone a huge tax break.

Scott, we agree on something! :)

I don't think there's enough waste and pork barrel spending to make a huge, huge difference though.

[BR]

Originally posted by Scott
Here's a crazy idea. Let me know if it's too "out there". Get rid of the pork spending and government waste. Use the savings to give everyone a huge tax break.
After reading Blue Mars by Kim Stanley Robinson my views on a lot of economic issues have dramatically changed. Yes, cut spending and goverment waste. But also allow the poor and middle classes to save money and climb their way up the ladder. We need an unavoidable flat income tax on all making over $200k. They've made it. The system worked for them. Let them now work for the system. Nothing hugely outrageous. Not 50% or any some such nonsense like that. More like 20 ish and decreasing as the gov't cuts more wasteful spending.

[Aries 1B]

http://www.fairtax.org/

You'd be able to keep your entire paycheck (less state income taxes). Many links; still looking it over.

Aries 1B

[groverat]

Cut government pork/waste and adjust a rock-solid, highly progressive tax accordingly.

Simple. :)

[dmz]

Federal Sales tax is regressive, the poor will pay more as a percentage of their income on food, etc. -- it can also shift the tax hit on big-ticket items items back on the producers of those items.

Reform Idea:

Begin by finding out how far the Federal tentacles [read: money and the controls that come with it] extend into your local community and find out how strung out your local politicians are on it.

[bunge]

Originally posted by Scott
Here's a crazy idea. Let me know if it's too "out there". Get rid of the pork spending and government waste. Use the savings to give everyone a huge tax break.

Are the conservatives willing to drop defense spending to about 25% of what it is now?

[tonton]

Originally posted by dmz
Federal Sales tax is regressive, the poor will pay more as a percentage of their income on food, etc. -- it can also shift the tax hit on big-ticket items items back on the producers of those items.

Reform Idea:

Begin by finding out how far the Federal tentacles [read: money and the controls that come with it] extend into your local community and find out how strung out your local politicians are on it.

Hey, we agree on someting!

And we agree about Oscar Wilde. He's a real gay icon.

[addabox]

Originally posted by Scott
Here's a crazy idea. Let me know if it's too "out there". Get rid of the pork spending and government waste. Use the savings to give everyone a huge tax break.

You could simply eliminate every government program outside of Social Security, Medicare, Medicaid, debt servicing and the military and save about 15%.

No transit and highway programs, no post office, no Department of Education, no student loans, no Center for Disease Control, no Department of Homeland Security, no Forestry Service, no Federal Emergency Management Agency, no EPA, no PBS, no arts funding, no Department of Energy, no grants to promising technologies or worthy citizens, no nationally funded science or or agricultural or technology initiatives, etc, etc etc.

Now I realize that some things in that list you would consider wasteful, but I don't think even you, Scott, could blithely write them all off as pork.

So figure you could go absolutely ape-shit with a big-ass hatchet and save maybe 8-10%, predicated on a model that has absolutely zero chance of surviving politically.

The whole "all our money goes to fraud and waste and pork" may be a good slogan for rallying tax cutters, but unless you're willing to take on either enormously popular entitlement programs and/or military spending you'll never make a dent in the federal budget.

At some point you'll have to explain to people why cutting their taxes while you're taking away entitlements of equal or greater worth (not to mention government services that, you may be startled to hear, people actually like) is such a great idea.

[Jubelum]

We need a flat tax- so we can all get screwed EQUALLY.

Why is equality the ultimate good, unless it involves NOT punishing those who have the jack?

What a load of hypocrisy. :smokey:

[tonton]

Originally posted by Jubelum
We need a flat tax- so we can all get screwed EQUALLY.

Why is equality the ultimate good, unless it involves NOT punishing those who have the jack?

What a load of hypocrisy. :smokey:

Because it takes money to make money. If you don't have jack, you can't make jack. If you have it you're guaranteed for life because you're so well protected that even being convicted of large scale corporate fraud cannot put a dent in your wealth.

[Gon]

Originally posted by addabox
You could simply eliminate every government program outside of Social Security, Medicare, Medicaid, debt servicing and the military and save about 15%.

No transit and highway programs, no post office, no Department of Education, no student loans, no Center for Disease Control, no Department of Homeland Security, no Forestry Service, no Federal Emergency Management Agency, no EPA, no PBS, no arts funding, no Department of Energy, no grants to promising technologies or worthy citizens, no nationally funded science or or agricultural or technology initiatives, etc, etc etc.

So figure you could go absolutely ape-shit with a big-ass hatchet and save maybe 8-10%, predicated on a model that has absolutely zero chance of surviving politically.Why did you exclude the very best thing to cut, the military? You could go absolutely apeshit on the military funding and the only result would be fighting less useless wars abroad. The US is in no way threatened by any other country, has a great economy (big GDP) and it spends 3.3% of GDP in military. I believe that is only the running costs and not the discretionary spending. Finland, a country of six million people with a 1000+ km border with Russia and thus under a very real threat, spends 2% of GDP and light discretionary spending every few years for new weapons systems.

Most of the things you enumerated could be given the axe without thinking twice. They would be replaced by private enterprises doing risk management, research, insurance, sponsoring sports and arts for advertising purposes, delivering mail and packages, producing energy. Due to lower taxes there would be more wealthy private citizens putting their 'extra wealth' (only they themselves know how much is 'extra', not the gov't) into promoting something they think is good. Put simply, if you have the choice of deciding a recipient for money yourself, or giving the choice to a bureaucrat, why on earth would you choose the latter?

[Gon]

Originally posted by tonton
Because it takes money to make money. If you don't have jack, you can't make jack. If you have it you're guaranteed for life because you're so well protected that even being convicted of large scale corporate fraud cannot put a dent in your wealth. False. Most wealthy people are not investors who have inherited a pile of money to start with, they're just people who have a well paying job (think lawyer, doctor, etc) and have consumed modestly, choosing to save some of their pay. Constant saving in small amounts is the core of getting wealthy. The market does the rest by providing good interest.

edited to fix a typo

[jimmac]

I don't think it's a good idea. Here in Oregon a sales tax gets voted down has been every time they bring it up. This has been happening since I was a little boy. I'm 51 now so you can imagine how long this has been going on.

It might seem to some to be a good idea on the surface but once you start down that road......

[Gon]

Originally posted by jimmac
I don't think it's a good idea. Here in Oregon a sales tax gets voted down has been every time they bring it up. This has been happening since I was a little boy. I'm 51 now so you can imagine how long this has been going on.

It might seem to some to be a good idea on the surface but once you start down that road...... Democracy doesn't equal wisdom. That the tax has been voted down doesn't mean it's a bad one. Do you have a reason to be opposed to a sales tax?

Furthermore, how much is the proposed Oregon sales tax the same thing? Would it remove a large bureaucracy and replace a host of other taxes? Does Oregon have a tax bureaucracy problem?

I recommend checking out the link posted by Aries.

[addabox]

Originally posted by Gon
Why did you exclude the very best thing to cut, the military? You could go absolutely apeshit on the military funding and the only result would be fighting less useless wars abroad. The US is in no way threatened by any other country, has a great economy (big GDP) and it spends 3.3% of GDP in military. I believe that is only the running costs and not the discretionary spending. Finland, a country of six million people with a 1000+ km border with Russia and thus under a very real threat, spends 2% of GDP and light discretionary spending every few years for new weapons systems.

Most of the things you enumerated could be given the axe without thinking twice. They would be replaced by private enterprises doing risk management, research, insurance, sponsoring sports and arts for advertising purposes, delivering mail and packages, producing energy. Due to lower taxes there would be more wealthy private citizens putting their 'extra wealth' (only they themselves know how much is 'extra', not the gov't) into promoting something they think is good. Put simply, if you have the choice of deciding a recipient for money yourself, or giving the choice to a bureaucrat, why on earth would you choose the latter?


I didn't forget the military, it's in the list of things that take up 85% of the federal budget.

If you would read my post, the point is that turning everything else over to the private sector results in minimal savings against likely large increases in the cost of paying for former government services.

You prefer a system of toll roads to the federal interstate system? OK, but your going to have to factor those tolls against whatever you saved in tax cuts.

Despite your rosy view of the vitality of the investor class, it's a fact that in the current capital system investors are looking for quick returns.

That means "innovation" with a pretty close horizon. It means profit now or shut it down. How is that a good way to run a country? It's like taking the block-buster mentality of hollywood and declaring it the model for all human endeavor.

Aren't we short sighted enough without making it the functional basis for how we approach the 21st century?

And yes, cutting the military could make a real difference in federal spending. Unfortunately, your fellow conservatives (the non-fiscal tribe) have made a fetish of "national strength", so if you're serious about federal frugality, your bone to pick is with the Republican party, not some liberal cabal of arts funders.

[Towel]

Originally posted by addabox
You could simply eliminate every government program outside of Social Security, Medicare, Medicaid, debt servicing and the military and save about 15%. It continues to astound me that more people don't get this. The current deficit is as large as *all* non-DoD discretionary spending. In other words, cutting that entire 15% won't even balance the budget. Base DoD spending is about the same size, until you add in the $80B/yr supplementals. So we could eliminate the entire DoD and barely balance the budget - and that's the total budget, not the "on-budget" budget. The on-budget deficit is substantially larger than all our defense spending. Debt financing alone is already almost as large as all non-DoD discretionary. Do most Americans realize that, thanks to Reagan and Bush, we spend more money on servicing our Chinese- and Japanese-held debt than we do on health, education, roads, NASA, etc.?

Given that SS is, for now, still raking in a significant surplus, our on-budget budget is a god-awful mess. We're literally running a 30% deficit. In 2003, $531B short on a budget of $1.8T. Try putting that into household terms - if you make $40k a year, how long could you get away with spending $60k a year before the debt collectors move in?

[SpcMs]

Originally posted by Gon
Put simply, if you have the choice of deciding a recipient for money yourself, or giving the choice to a bureaucrat, why on earth would you choose the latter?
Replied simply: because no one would be willing to pay for things in which they have no short term immediate interest (like a road across the desert), but recognise that society as a whole would benefit from it.
You know what would happen if governement programs were abolished? People would instantly reinstate them.

[Jubelum]

Originally posted by tonton
Because it takes money to make money. If you don't have jack, you can't make jack. If you have it you're guaranteed for life because you're so well protected that even being convicted of large scale corporate fraud cannot put a dent in your wealth.

Ohhh... so you are one of the leftists in this country that think that people do not earn what they have from their own hard work- they must screw others to get anywhere... and people who are down cannot rise because of "the Man". Bullshit. It happens daily in this nation.

I work for a company started with a dream- no clients, no money, just a person with a GED and a free public library in 1982. Last year we did over $75 million. I abhor your view of this nation that no one can make it unless the government helps or they were born wealthy. That is simply not true. The very Mac you own comes from a company that proves this is possible.

"Guaranteed for life"? WTF? - look a lotto winners. Many of them are bankrupt before they die. People who are irresponsible blow through fortunes all the time, and end up poor well before retirement.

What a warped view of American capitalism. Cynicism at it's most destructive.

:rolleyes:

[jimmac]

Originally posted by Gon
Democracy doesn't equal wisdom. That the tax has been voted down doesn't mean it's a bad one. Do you have a reason to be opposed to a sales tax?

Furthermore, how much is the proposed Oregon sales tax the same thing? Would it remove a large bureaucracy and replace a host of other taxes? Does Oregon have a tax bureaucracy problem?

I recommend checking out the link posted by Aries.

Most of the time when something like this is voted in it's billed as tax relief in some other area. In Oregon's case it's been billed as tax relief for our high property tax. We have some of the highest property tax in the nation. However most people feel that it would just turn out to be in addition to our already high property tax. As for a national sales tax it would be the same thing. I think in the end it would be just another additional tax.

[Frank777]

In Canada, we were told all about how prices would drop on many goods, because the 7% GST was replacing a 15% tax paid by manufacturers.

Never happened.

[Gon]

Originally posted by jimmac
Most of the time when something like this is voted in it's billed as tax relief in some other area. In Oregon's case it's been billed as tax relief for our high property tax. We have some of the highest property tax in the nation. However most people feel that it would just turn out to be in addition to our already high property tax. As for a national sales tax it would be the same thing. I think in the end it would be just another additional tax. Quote from www.fairtaxvolunteer.com FAQ:

"Exactly what taxes are abolished? The FairTax is replacement, not reform. It replaces federal income taxes including, personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes."

They are talking about absolute removal of other taxes, and removing the 16th amendment of the constitution which gives congress the power for income taxation. Doesn't sound like "just another additional tax".

[Gon]

Originally posted by addabox
I didn't forget the military, it's in the list of things that take up 85% of the federal budget.

If you would read my post, the point is that turning everything else over to the private sector results in minimal savings against likely large increases in the cost of paying for former government services.

You prefer a system of toll roads to the federal interstate system? OK, but your going to have to factor those tolls against whatever you saved in tax cuts.

Despite your rosy view of the vitality of the investor class, it's a fact that in the current capital system investors are looking for quick returns.

That means "innovation" with a pretty close horizon. It means profit now or shut it down. How is that a good way to run a country? It's like taking the block-buster mentality of hollywood and declaring it the model for all human endeavor.

Aren't we short sighted enough without making it the functional basis for how we approach the 21st century?

And yes, cutting the military could make a real difference in federal spending. Unfortunately, your fellow conservatives (the non-fiscal tribe) have made a fetish of "national strength", so if you're serious about federal frugality, your bone to pick is with the Republican party, not some liberal cabal of arts funders. First time anyone's ever called me a conservative. I'm trying to fit that into my worldview but not sure I can. I think myself as a libertarian, but conservative... :embarrass I associate conservatives with status quo, tradition, religion, family, law.. I'm not like that at all.

Some things you can't privatize, because they are core functions of the state, police and military. Most others should be privatized. I've done some thinking on the subject but haven't thoroughly identified the conditions under which you should or shouldn't privatize. Infrastructure like roads might not be good candidates for privatizing due to the space constraint. At least on small scale, you can't realistically have two competing road networks. You'd have to use both to get to your destination probably half of the time. Highways, maybe. But grants and arts, those are clear cut cases of government misdeeds.

You say investors are not patient enough to allow long term improvement, and demand quick profits. I don't agree. Obviously the point of investing is to make profit, but with high short term goals, you get lots of risk. The average investor will want to avoid risk, so will be reluctant to go for short term profit.
On the point about long term improvement, large tech companies, pharmaceutical companies and many others do a tremendous amount of basic research, with absolutely no direct connection to their products. They are not doing that for the feel-good factor, but because they think it will profit them in very long term.

[addabox]

Originally posted by Gon
First time anyone's ever called me a conservative. I'm trying to fit that into my worldview but not sure I can. I think myself as a libertarian, but conservative... :embarrass I associate conservatives with status quo, tradition, religion, family, law.. I'm not like that at all.

Some things you can't privatize, because they are core functions of the state, police and military. Most others should be privatized. I've done some thinking on the subject but haven't thoroughly identified the conditions under which you should or shouldn't privatize. Infrastructure like roads might not be good candidates for privatizing due to the space constraint. At least on small scale, you can't realistically have two competing road networks. You'd have to use both to get to your destination probably half of the time. Highways, maybe. But grants and arts, those are clear cut cases of government misdeeds.

You say investors are not patient enough to allow long term improvement, and demand quick profits. I don't agree. Obviously the point of investing is to make profit, but with high short term goals, you get lots of risk. The average investor will want to avoid risk, so will be reluctant to go for short term profit.
On the point about long term improvement, large tech companies, pharmaceutical companies and many others do a tremendous amount of basic research, with absolutely no direct connection to their products. They are not doing that for the feel-good factor, but because they think it will profit them in very long term.

Yeah, I figured you considered yourself a libertarian, I just tossed you into the conservative pen because that's where the real resistance to military cuts are.

Again, you may not think much of cultural federal support, but it makes up such a tiny fraction of spending that eliminating all of it entirely would have no discernible impact on the federal budget.

Pharmaceutical companies may pour a lot of money into speculative research, but the speculation is all around the efficacy of the final product, not whether there will be a market for it or not.

In other words, they will certainly invest billions on hair loss cures or erectile disfunction treatments without knowing for sure if anything will really work, but are unlikely to spend as much on things like Parkinson's or multiple sclerosis, because the market isn't big enough. So the free market model means you better get a disease that is : a) frequent in the general population; and b) likely to remain frequent in the general population, as opposed to being eliminated by a "miracle drug" (once the disease is eliminated there is no market for a cure so why develop a drug that eliminates its own purpose?).

Drugs for non "blockbuster" diseases are actually a pretty good example of why leaving everything to profit motivation is a bad idea. There are a great many things that an affluent, progressive society might reasonably be expected to undertake that don't necessarily make sense from a market perspective.

Providing services to the indigent (and yes, any decent people ought to figure out how to provided services to the indigent, you can't just get 19th century on their ass an reopen poor houses), pursuing long range scientific research for the betterment of the country at large, nation wide systems of communication and transportation (the internet was a government program, you may recall), avenues of technology that may not be obvious money makers but that serve a broader societal agenda (alternative energy sources are a good example--any investment done by the big energy combines is within the context of "managing" the future of energy for maximum profitability, not what might actually best serve the security and prosperity of America), etc.

And to come full circle, I think it's a national disgrace that we think "the arts" are some kind of half-assed bastard step-child of show-business, and if a work of art can't pull 'em in like a summer movie then it has no reason to exist.

Every great culture knows how to imagine richly, and rich imagining involves more than making people twitch and shout with loud noises and bright colors. Some of the best artists America has produced in the last 50 years have had to ply their trade in Europe for lack of funding here.

It's not a coincidence that someone like Robert Wilson finds both audiences and money in Europe. A culture that promotes the arts creates an audience.
A culture that promotes only a quick adrenaline fix creates an audience to, but it is to our lasting detriment.

[Gon]

Originally posted by addabox
Again, you may not think much of cultural federal support, but it makes up such a tiny fraction of spending that eliminating all of it entirely would have no discernible impact on the federal budget.It's the principle that counts. If you leave one small item on the budget just on the basis that it's small, that opens the door for other, more costly and numerous things, that you cannot argue against unless you also argue against the first one - whereupon you get huge resistance, because each piece of pork already enacted has its own rabid lobby/support group.
Pharmaceutical companies may pour a lot of money into speculative research, but the speculation is all around the efficacy of the final product, not whether there will be a market for it or not.
...
Drugs for non "blockbuster" diseases are actually a pretty good example of why leaving everything to profit motivation is a bad idea. There are a great many things that an affluent, progressive society might reasonably be expected to undertake that don't necessarily make sense from a market perspective.I said "basic research", not "speculative research". There are lots of folks who work for Microsoft and IBM and do research on abstract math. Absolutely no direct connection to products. They are doing this to cultivate scientific and experimental culture and people, which is the sort of thing you claim the companies shouldn't be capable of. They are. Consider, if MS and IBM do work on something with zero direct profit, then aren't pharmaceutical companies likely to work on cures that someone would pay something for?
Also, I'd like to point to the absolutely massive regulation in the pharmaceutical industry. The regulation makes the cost of new drug development such that they need a lot of profit when it's done, otherwise they can take big losses, which you can't really expect them to do just for the hell of it.Providing services to the indigent (and yes, any decent people ought to figure out how to provided services to the indigent, you can't just get 19th century on their ass an reopen poor houses), pursuing long range scientific research for the betterment of the country at large, nation wide systems of communication and transportation (the internet was a government program, you may recall), avenues of technology that may not be obvious money makers but that serve a broader societal agenda (alternative energy sources are a good example--any investment done by the big energy combines is within the context of "managing" the future of energy for maximum profitability, not what might actually best serve the security and prosperity of America), etc.The reason business doesn't care about many environmental issues is that in the absence of suitable legislation, the true cost of the pollution is shared by everyone, and the business alone reaps the profit. This is best solved by heavy taxes on pollution and making the business pay damages in cases where the pollution directly affects others. The businesses will limit the pollution because they then have the full cost to factor in their decisions.

Government welfare is a thing I'm not completely decided about. In any case, the proper basis and the motivation for a welfare system must lie in the taxpayers' interests. There is not and cannot be a 'right' for anyone to others' property.
And to come full circle, I think it's a national disgrace that we think "the arts" are some kind of half-assed bastard step-child of show-business, and if a work of art can't pull 'em in like a summer movie then it has no reason to exist.

Every great culture knows how to imagine richly, and rich imagining involves more than making people twitch and shout with loud noises and bright colors. Some of the best artists America has produced in the last 50 years have had to ply their trade in Europe for lack of funding here.People are free to create art. Other people are free to see it or not. They should also be free to choose whether they support that particular artform or not. IMO it's disrespect both towards the artist and the audience to say art doesn't survive without government forcing the people to pay equal shares of it. Art is worth more than mere ticket fees. Artists recognize this, and create even as a hobby if for some reason they do not attract financial help from the audience. Viewers recognize this, and support artists not only directly through ticket fees and buying works of art, but patronizing specific artists, donating to organizations that support artists, and commissioning works. Finally, business also patronizes artists in exchange for positive publicity.

Most of the great classics have been born without government money. IMO it's fair to assume the artist's work hasn't at any point suddenly become dependent on the government. The only real reason argument one could offer for this point of view is that the taxes are so high, people don't have enough wealth to be able to spend it on art. The problem, then, is not with the art at all.

My aunt is a painter by the way. I think she doesn't really make any money with that, though she has had a few exhibitions. She also has a job that helps pay the bills - art therapy with kids.

Sport is art too. Do you agree?