Tax Discrimination - It's that time again

[eran0004]

The conclusion was that you could compare a government that taxes a finite resource (like water) to a government that taxes a non-finite resource (like wealth). And you cannot.

I can. The finity of the resource is not relevant in the allegory. It's not an attempt to describe an economic system, it's just to show that when there's a situation where we have a group that has a lot of wealth, and a group that has little wealth, how should the expenses of the government be shared between them? For that purpose, the allegory works. The allegory also shows that everyone can't be wealthy at the same time, which is why we can't say that poor people will have to blame themselves for their situation, because such an idea would need to rely on the possibility that everyone can be wealthy at the same time.

Well... not right there, but I did establish that later in my post.

You didn't. All you demonstrated was that unequal laws are unequal. What makes a proportional or progressive tax less equal than other systems of tax? Why is a % more unequal than a fixed sum?

If you're paying for a service I can understand if it is. But not if you're paying to cover the costs of the government.

You're acting like the government simply exists and has its own wants and desires. The government exists to provide services - namely to protect rights. You pay tax for that service.

You don't pay for using the service. You pay to fund the services. You may only use a handful of the services, but your tax goes towards funding them all.

Why does "because they can afford it" constitute a reason? To my eyes, it's like you said "The reason why someone with a higher income should pay more taxes is because they wear a yellow shirt."

It constitutes a reason because a tax system that's been constructed so that people can't afford it doesn't work. So it has to be constructed in a way so that the people paying taxes can afford it. Since the amount of money that low income takers can afford to pay is not enough to fund the government (unless you slim down the government to a minimum), the amount needs to go up when the income goes up.

...not tax so much that poor people can't pay? Shift as much as possible to fees?

Poor people can't afford fees either. So unless only people with some wealth has to pay those fees, it means that poor people would lose government services.

I'm just establishing how a law that applies to everyone can still violate equal protection - you attempted to use this to justify unequal taxation.

You use "unequal" again, while we haven't established what equality is. Is it unequal to pay more because you have a different ethnicity? Yes it is. Is it unequal that an adult has to pay more than a child? I don't think it is, because the child doesn't have as much money as the adult, so the ticket price of the adult would have to cover the cost of his own bus ride + a portion of the child's bus ride, while the child's ticket price only covers a part of the cost of his bus ride. It could be considered equal to let the child pay as much as the adult, but the difference is that it wouldn't be fair, because the child can't afford it, and we can't expect from the child to be able to afford it. So if we want bus service for everyone, adults would have to pay more than childred.

This is totally beside the point. The fact that the state performs services that you may or may not want does not change the fact that they tax everyone regardless of services rendered and they tax everyone differently (especially in the US).

I'm no expert on the US tax system, but yeah, taxes are often disconnected from the use of services. There are some taxes that are linked to services, but an income tax or property tax isn't. So that's all correct.

You earlier claimed that ownership of human beings constitutes slavery - though, granted, you included "forced labor" in that, but the government fits that part of the description as well.

Well, it's a matter of semantics. The "slavery" when you're forced to do military service is different from what we usually call slavery. While taxes can be called "slavery" as well, it's an entirely different form of slavery and thus simply calling it slavery doesn't really mean anything. It certainly doesn't mean the same as when people ususally use the word "slavery" to describe something.

You keep jumping to this notion that without income taxes you don't have law, or without unequal taxation you have everyone in jail. Neither of these is true. You might want to ask myself or Famine how this is possible because we know.

Without government funding there is no law. Taxes is how the government is funded. Without taxes there is government and without government there is no law. As you can't ask of poor people to be able to pay as much taxes as rich people, having a system that does so leads to poor people not being able to pay their debts and as such the taxes needs to be raised for the rich in order to cover the costs. You can't take money from those who doesn't have money.

If it didn't become a right until it was enforced, the concept of a "right" would have no meaning. For "rights" to have meaning they have to be capable of being infringed or unenforced. How well society protects the rights that exist independent of them is a measure of that society's legitimacy.

If the right isn't enforced, all it means is that you should have the right. It relies on the good intent of all people, something we know isn't true. If others recognize your right they'll hopefully respect it so that it doesn't have to be enforced, but if someone choses not to respect your right, then you can't do anything about it.

Yes, the obligation to pay taxes is a concept that people can decide to enforce - just like any other concept regardless of how ethical it is.
No, the fact that people enforce a concept doesn't mean that that concept violates rights or that the enforcement does - it would depend on what is being enforced.
Property rights are not subject to interpretation (see signature). They exist independent of law. Law can either enforce rights or violate them (or neither I suppose).

It doesn't exist independent of law when it's the law that dictates the right. The right does not exist by nature, it has to be formulated by humans and agreed upon together. At that point it's an idea that you have a right, but it doesn't become a right that you can count on until it can be enforced. Enforcement is based on law.

Where? I did not sign such a contract.

It's not a contract that you sign. It's there when you're part of a society and as long as you're part of the society you're bound by the contract.

Law should only be enforced when it is consistent with human rights. When law violates human rights (and there are many such examples in human history and the present), those laws should not be enforced.

I agree, but that's a flaw with the laws. Rather than to not enforce those laws, those laws should be abolished. In a democratic system you can raise opinion and try and get those laws changed. If you're really into politics you can even become a politician yourself and run a campaign. After all, paying taxes is something the democracy has decided on, you can't chose to ignore a decision of a society that you're part of. There is the social contract again. Instead you should try and make the society come to a different decision.

Try this one again:

Yeah, income tax is not paying for using a service though. It's paying to fund the government.

Or this one:

So what if the poor people uses more government than the rich people? Who should pay for that? What if they use the same amount of government, who should be paying? Or should poor people have less access to government services than rich people?

 

[Exorcet]

So what if the poor people uses more government than the rich people? Who should pay for that? What if they use the same amount of government, who should be paying? Or should poor people have less access to government services than rich people?

If the poor use more government, it's up to them to pay for it. If you use it, you pay for it. That seems the most fair. Keep in mind that the poor aren't doomed without government. You can have charities or something, where those with money willingly give it away to help others.

 

[Famine]

If the poor use more government, it's up to them to pay for it. If you use it, you pay for it. That seems the most fair. Keep in mind that the poor aren't doomed without government. You can have charities or something, where those with money willingly give it away to help others.

And since government's only valid role is protecting rights, they shouldn't use more of it than anyone else.

And everyone's happy. Except people who think government exists to rule and to serve itself.

 

[Danoff]

The allegory also shows that everyone can't be wealthy at the same time

Economics (and history) says otherwise.

Without government funding there is no law.

Note that I did not say there is no government funding, I said no income tax.

If the right isn't enforced, all it means is that you should have the right. It relies on the good intent of all people, something we know isn't true. If others recognize your right they'll hopefully respect it so that it doesn't have to be enforced, but if someone choses not to respect your right, then you can't do anything about it.

Rights are most important when they are infringed.

It doesn't exist independent of law when it's the law that dictates the right.

Laws don't dictate rights - even the notion assumes rights do not exist.

The right does not exist by nature, it has to be formulated by humans and agreed upon together.

This incorrectness has been covered in the human rights thread at length.

So what if the poor people uses more government than the rich people? Who should pay for that?

...the people who use it?

 

[FoolKiller]

What's the option of taxation? What other system could be used?
Not paying taxes is not an option, because the government still needs funding.
What happens in a country where the government have no funding?

And what about law enforcement? What happens if there's no law enforcement? Can there be laws without enforcement? What would happen? What alternative systems to taxation can there be that NOT uses law enforcement?

Would you believe that the United States went nearly 90 years without an income tax? The income tax was first implemented to cover Civil War costs.

What's a fair share? A percentage is fair, but fairness is only one criteria. You also need to look at what's reasonable. Is it reasonable for a poor family to give 10% of their income to the government, or do they have a hard time as it is getting food on the table and cover all other costs? Thus, it's reasonable that those with lowest income has a lower percentage than those with a higher income.

So, you take more from one man simply because he can afford it? That's like robbing a bank, knowing no one will be hurt because they are insured. The only problem is that it drives people out. We outsource, keep money made outside the US in offshore accounts, and even film companies keep filming in Canada.

In the end, taxes is required for government to get funding. Unless there are other suggestions of course?

It might be important to note that I am focusing on income tax. A sales tax is equal across the board. If a poor man buys gum he pays a percentage toward tax. A rich man buying that gum will pay the exact same amount in tax. If we must tax, as you proclaim, let's try taxing lifestyle choices and not the value of productive members of society.

@FamineThere are no rights other than those protected by law.

So, if government chose to tax poor people at a much higher rate then that is fine? That would be right, since law is right?

Of course you can claim the right of anything, but if that claim isn't supported by the law then you'll have a poor case in court. For instance, you can't go to court and claim human rights, if those human rights aren't law.

Actually, that is a good way to have laws struck down in the US. if you can prove a law violates a right in court then it will be overturned by the court because it is a violation of rights.

A government is the system by which a country is governed. So it's for governing the country. What exactly the government should do is up to the government to decide.

Wut? I've seen how well that works out. That is exactly why the US was founded as a democratic republican, where government is limited in scope and power, and is to be for the people by the people.

 

[eran0004]

Would you believe that the United States went nearly 90 years without an income tax? The income tax was first implemented to cover Civil War costs.

That's in the 1800's. A lot of things has happened since then.

So, you take more from one man simply because he can afford it? That's like robbing a bank, knowing no one will be hurt because they are insured. The only problem is that it drives people out. We outsource, keep money made outside the US in offshore accounts, and even film companies keep filming in Canada.

It is a problem that it drives people out. No systems will work perfect for everything. You have to decide what's most important and chose the system that fits that.

It might be important to note that I am focusing on income tax. A sales tax is equal across the board. If a poor man buys gum he pays a percentage toward tax. A rich man buying that gum will pay the exact same amount in tax. If we must tax, as you proclaim, let's try taxing lifestyle choices and not the value of productive members of society.

You'd probably have to raise the sales tax a lot to compensate for the loss of the income tax. I don't think shopkeepers would be happy.

So, if government chose to tax poor people at a much higher rate then that is fine? That would be right, since law is right?

It would be legal, but it wouldn't be fair.

Actually, that is a good way to have laws struck down in the US. if you can prove a law violates a right in court then it will be overturned by the court because it is a violation of rights.

If a law violates your rights that are protected in law. If a law violates rights that aren't protected in law you don't have a case.

Wut? I've seen how well that works out. That is exactly why the US was founded as a democratic republican, where government is limited in scope and power, and is to be for the people by the people.

The definition of what a government is doesn't say how it works. In a democracy, the government needs the support of the voters, through their representatives in the parliament, to make decisions.

In a dictatorship, it doesn't. Both are governments though, so the definition of what a government is and does will have to fit both.

Edit: When it comes to "use of government", it can be argued that rich people "uses" more government than poor people. If a rich person owns property worth one million credits, and a poor person owns property worth one thousand credits, then the government is protecting the rich person to a greater value than the poor person. It protects both to the same rate (100%), but the sums are different. Thus, the tax should be in proportion to their wealth, rather than being an equal sum to both.

It can also be argued that the rich person has more to lose on a weak government than the poor person has (since it's the government that enforces your right to own property, and the rich person has more property to lose), and should be more interested in making sure that the government stays strong.

 

[Tornado]

Because it has expenses. No government can be run without expenses. Unless of course you propose that governments are to be dissolved and that people can live freely in anarchy. Which I suppose they can, but it wouldn't solve the issue for those who wants to keep their wealth, because their wealth would be worthless if the system collapsed.

No it hasn't. It doesn't tax you so that you can use its services, it taxes you so that it can fund the running of the country.

What's the option of taxation? What other system could be used?
Not paying taxes is not an option, because the government still needs funding.
What happens in a country where the government have no funding?

In the end, taxes is required for government to get funding. Unless there are other suggestions of course?

Taxation is the only way to finance a government to any greater scale. The other methods would only be able to fill in gaps here and there and it would be a short-term source of income. To have stability in a country you need stability in the government and for that you need sustainable resources. Selling lottery tickets or relying on voluntary contributions is not sustainable. "Oops, can't afford to pay the army this year. I hope they'll not be angry."

Somewhere you've got to weigh the pros versus the cons.

Pros: Wouldn't need to pay taxes anymore.
Cons: Would be the end of civilization as we know if.

Then:

"By the way, the country in question lasted nearly a century without that form of taxation."


Then:

That's in the 1800's. A lot of things has happened since then.

Speaking of intellectual dishonesty. The last and first quotes are the best ones regarding how quickly you're trying to sweep that entire crux of your argument under the rug.


Apparently one of things that happened is that American transitioned away from the lawless anarchy of before 1893, when the first permanent attempt at income tax was established (since the ones created during the Civil War were intentionally temporary to expire after the war funding was no longer needed)? Though the permanency even in that case is dubious, since it was struck down as illegal only two years later and America (presumably) immediately returned to anarchy until the system in use today was amended into the Constitution in 1913.

 

[Exorcet]

It would be legal, but it wouldn't be fair.

Then law can't say what is right or not.

 

[Danoff]

You'd probably have to raise the sales tax a lot to compensate for the loss of the income tax. I don't think shopkeepers would be happy.

Shopkeepers would probably not be happy, but not as unhappy as you think given that all shops everywhere would have the same burden applied. The income tax system creates an awful lot of unhappy right now though - and it creates a nasty black market for labor... and it creates outsourcing... and it's immoral... ...and ours involves turning over a lot of personal information to the government... lots of problems with the income tax.

It would be legal, but it wouldn't be fair.

...and suddenly those two aren't the same. I'm happy that you see this distinction.

If a law violates your rights that are protected in law. If a law violates rights that aren't protected in law you don't have a case.

It would be legal, but it wouldn't be fair.

Edit: When it comes to "use of government", it can be argued that rich people "uses" more government than poor people. If a rich person owns property worth one million credits, and a poor person owns property worth one thousand credits, then the government is protecting the rich person to a greater value than the poor person. It protects both to the same rate (100%), but the sums are different. Thus, the tax should be in proportion to their wealth, rather than being an equal sum to both.

Hey! Finally an argument! I did say "only if they use more government" did I not? Here you argue that they use more government. I'm very happy to see this discussion finally come all the way back around to addressing the very first post that started it.

Edit: Of course I don't agree with you, but I'll leave that for another post.

 

[eran0004]

Then law can't say what is right or not.

Not what's morally right, no. Just like a computer can't say what's morally right or not, it can just do what it's programmed to do.

Law is based on some kind of moral standpoint of the legislators though (which in a democracy should at least partially reflect the moral standpoint of the majority of people), but morality can be different from person to person so everyone doesn't agree with the government about what's right or not.

Shopkeepers would probably not be happy, but not as unhappy as you think given that all shops everywhere would have the same burden applied. The income tax system creates an awful lot of unhappy right now though - and it creates a nasty black market for labor... and it creates outsourcing... and it's immoral... ...and ours involves turning over a lot of personal information to the government... lots of problems with the income tax.

Arguably, more people would be unhappy with a lump sum tax, or no tax at all. In the last case not because they don't have to pay anything, but because of the service they would lose. In the former case because a lump sum tax places a heavier burden on those with low income, and those with low income are far more than those with high income. A high sales tax would be equal for all shops, but consumption would drop and the shops would not be doing well.

It would be legal, but it wouldn't be fair.

What's fair or not is down to opinion, so if someone are of the opinion that she shouldn't have to pay taxes, then she might think that paying taxes is unfair. Others may not agree with her and instead think that it's only fair that she contributes with her part of the burden.

Also, a tax system cannot be based only on what's fair. It will have to strike a balance between fairness and effectivity, because a completely fair system (according to a given perspective) will probably have some effectivity issues at some or several parts of the income range.

Hey! Finally an argument! I did say "only if they use more government" did I not? Here you argue that they use more government. I'm very happy to see this discussion finally come all the way back around to addressing the very first post that started it.

Edit: Of course I don't agree with you, but I'll leave that for another post.

@Tornado: Running a modern state is very different from running a state in the 1800's. The infrastructure, economy and demographics doesn't look anywhere the same. Apply 1800's economy on a modern country and it will be in flames within weeks.

 

[Danoff]

Arguably, more people would be unhappy with a lump sum tax, or no tax at all. In the last case not because they don't have to pay anything, but because of the service they would lose.

I agree with you that people would be less happy under anarchy (which would then evolve into a dictatorship as anarchy does). Some people would be less happy with a lump sum tax - especially those that currently do not pay tax now.

In the US, almost half of the citizens pay no taxes whatsoever. These people are deemed "too poor" or it has been determined that the government likes their lifestyle choices - such as mortgaging a home or having children. Going from paying nothing to paying something is not going to make those people happy one bit... and yet, look at what we've created by not charging them. We have almost a majority of voters - people determining how big government gets and what handouts they get from it - who don't pay anything for it. The result? Ever increasing government.

In the former case because a lump sum tax places a heavier burden on those with low income, and those with low income are far more than those with high income.

As it should. Everyone uses their government - and nobody fundamentally uses it any more than anyone else (if the government is doing what it's supposed to do). That means everyone should pay the same value for those services. Equal service, equal cost - that's not just fair, it's the only thing that makes sense. This means that people with less income pay a larger percentage of their income for government just like they do for other necessities like food, shelter, and clothing. I quoted $7,250 per US adult as the equal share of government expenses. That could easily be cut down to $2000 or even $1000. Going to a lump sum tax system would save the economy hundreds of billions of dollars, the IRS reduction alone would be about $9 billion. Almost everything our government does is something it doesn't need to do.

Still, you do have the problem of people with zero income, who produce nothing, and cannot pay for the share of their government they need. Charity could help them for sure, but I prefer a sales tax to be honest - for other reasons.

A high sales tax would be equal for all shops, but consumption would drop and the shops would not be doing well.

A sales tax would penalize spending rather than penalizing income - which is precisely what you want to do for a robust economy. Penalizing income causes people to choose not to create value and grow the economy - that's bad. Penalizing spending causes people to save money, which slows growth in the short term, but creates a more resilient economy - which is good.

What's fair or not is down to opinion logic

FTFY

Also, a tax system cannot be based only on what's fair. It will have to strike a balance between fairness and effectivity, because a completely fair system (according to a given perspective) will probably have some effectivity issues at some or several parts of the income range.

How a government treats its citizens has to be based on what is fair and equal.

 

[eran0004]

I agree with you that people would be less happy under anarchy (which would then evolve into a dictatorship as anarchy does). Some people would be less happy with a lump sum tax - especially those that currently do not pay tax now.

In the US, almost half of the citizens pay no taxes whatsoever. These people are deemed "too poor" or it has been determined that the government likes their lifestyle choices - such as mortgaging a home or having children. Going from paying nothing to paying something is not going to make those people happy one bit... and yet, look at what we've created by not charging them. We have almost a majority of voters - people determining how big government gets and what handouts they get from it - who don't pay anything for it. The result? Ever increasing government.

I don't know anything about what kind of incomes they've got so it's hard for me to say anything about it. USA is also a bit different from Sweden in the sense that there are states and a federation, and there's a government on a state level as well as a government on a federal level. Are half of the population not paying any taxes at all, or are they just not paying federal tax (If there is such a thing? Is there a state tax? City council tax?)?

In Sweden very few people pay tax to the state, instead most of the income tax is regional (the regions are responsible for healthcare) or local (city council, which is responsible for schools and part of the welfare). So most of the income tax is something that the government doesn't control and I guess the idea for the de-centralisation is that the decisions on these things are to be brought closer to the people. To change the income tax in your city, you'd only need a fraction of the votes you'd need to change anything on national level.

A negative side effect is that local politicians generally are a little less competent than national politicians and are also less watched over by the media, so bringing decisions closer to the people is not just a good thing.

As it should. Everyone uses their government - and nobody fundamentally uses it any more than anyone else (if the government is doing what it's supposed to do). That means everyone should pay the same value for those services. Equal service, equal cost - that's not just fair, it's the only thing that makes sense. This means that people with less income pay a larger percentage of their income for government just like they do for other necessities like food, shelter, and clothing. I quoted $7,250 per US adult as the equal share of government expenses. That could easily be cut down to $2000 or even $1000. Going to a lump sum tax system would save the economy hundreds of billions of dollars, the IRS reduction alone would be about $9 billion. Almost everything our government does is something it doesn't need to do.

You can think of it as an insurance. The money you pay for insurance is relative to the value of what you have insured. But it's true that the most efficient tax is a lump sum tax. It doesn't work in practice though because it's not perceived as fair.

Still, you do have the problem of people with zero income, who produce nothing, and cannot pay for the share of their government they need. Charity could help them for sure, but I prefer a sales tax to be honest - for other reasons.

👍

A sales tax would penalize spending rather than penalizing income - which is precisely what you want to do for a robust economy. Penalizing income causes people to choose not to create value and grow the economy - that's bad. Penalizing spending causes people to save money, which slows growth in the short term, but creates a more resilient economy - which is good.

Well, it depends on how high the sales tax is, and that in turn depends on how big you want the government to be. A sales tax also doesn't have any vertical equity (lack of vertical equity: everyone pays the same tax, regardless of income) which means that it places a bigger burdon on the poor than on the rich.

So while a sales tax might have a good effectivity (?) it might be percieved as unfair by a lot of people, depending on how high it is.

How a government treats its citizens has to be based on what is fair and equal.

On an ideal level, perhaps. In reality, pragmatism is required. It should always strive for fairness, but in the choise between a fair system that doesn't work and a slightly less fair system that does work, the latter will should win. Of course, there's always room for blind idealism so legislators can pass whatever laws they want to, but a system that doesn't work will end itself after a while.

 

[Danoff]

Well, it depends on how high the sales tax is, and that in turn depends on how big you want the government to be. A sales tax also doesn't have any vertical equity (lack of vertical equity: everyone pays the same tax, regardless of income) which means that it places a bigger burdon on the poor than on the rich.

Yea everyone pays the same tax, but some people buy more stuff... and more expensive stuff.

 

[Famine]

Yea everyone pays the same tax, but some people buy more stuff... and more expensive stuff.

It's almost like a rich guy going out and buying a £250,000 Rolls Royce (for his chauffeur) pays more sales tax than a poorer guy HPing a £12k Fiesta with a flat rate sales tax, by a factor of 20. Or something.

 

[eran0004]

Yea everyone pays the same tax, but some people buy more stuff... and more expensive stuff.

If it's in combination with other taxes, then I wouldn't have a problem with it. But if it would be the only tax it would be problematic.

Here's poor person Bob of country A

. He has an annual income of 1000 credits. The income tax takes away 10%, so he's left with 900 credits for consumption. He buys food for 500 credits, clothes for 200 credits and the remaining 200 credits is for the rent of his apartment. He's got 0 credits remaining.

Here's poor person Steve

of country B. He also has an annual income of 1000 credits, but in his country there's no income tax so he gets to keep it all, he's got 1000 credits for consumption. However, instead there's a sales tax of 30% on all items. To buy the same products that Bob bought, he'd have to pay 650 credits for food, 260 credits for clothes and 260 credits for the rent of his apartment. He's got -170 credits remaining, but to fill in for the missing, the government provides for the poor people so that they're back at 0.

Here's rich person Rob

of country A. He has an annual income of 10 000 credits. The income tax takes away 40%, so he's left with 6000 credits for consumption. He likes more expensive stuff, so he buys food for 1000 credits, clothes for 500 credits and he pays 1000 credits for his house (he has a bank loan, or something). He's got 3500 credits remaining.

Here's rich person Eve

of country B. She lives in the same country as Steve, so there's no income tax. She gets to keep all of her 10 000 credits for consumption. So with the sales tax she spends 1300 credits on food, 650 credits on clothes and 1300 credits for her house. She's got 6750 credits remaining.

After this round, Bob has contributed with 100 credits in taxes. Steve has contributed with 270 credits in taxes, but he also got back 170 credits from the government. Rob has contributed with 4000 credits in taxes, Eve has contributed with 750 credits in taxes.

Country A has got 4100 credits from taxes. Country B has got 1020 credits in taxes, but 170 of those goes back to Steve so that he can afford his living. Country B can still get more if Eve decides to spend more money on shopping, but she can also decide to spend it elsewhere, buy things in other countries, invest it, or save it as a buffert.

Of course, you can't count on a country only having one of each, usually there are more poor people than rich people. With a ratio of 3:1 this is the outcome:

Country A: 1075,5 credits per taxpayer.
Country B: 262,5 credits per taxpayer (which can become more if the Eves decides to purchase more).

As country B can't afford to offer the same services as country A, each individual in country B would have to pay for the services that can't be provided. Either it has to be constructed so that everyone pays the same amount for the same service, in which case poor people can't afford the same services as the rich people, or the rich people would have to pay more to cover the cost of the poor. And then we're back at what's fair or not. We have replaced a tax system where rich pays more than poor with a purchase system where rich pays more than poor, in which case it's just as fair on unfair as the tax system. Alternatively, we have built a system where only the rich can afford service and for the poor to be able to afford service, they need to severely cut down on their other expenses, which puts a bigger burdon on them.

It can be argued that the rich carries a bigger burdon because the sum that they pay is larger (and even the rate that they pay, in country A), but that argument can be countered with the rich being so much stronger than the poorer so they're able to carry a much heavier burdon. It's not fair to put an equal weight on people of different strength.

 

[Famine]

Why does country B, with the smaller government, have a social security system that country A, with the larger government, not have?

We have replaced a tax system where rich pays more than poor

for working, creating wealth and giving poorer people jobs

with a purchase system where rich pays more than poor

for consuming things.

in which case it's just as fair or unfair as the tax system

if you ignore that one is a tax on production, stifling productivity, and the other is a tax on consumption, encouraging self-limited resource use.

Alternatively, we have built a system where only the rich can afford service and for the poor to be able to afford service, they need to severely cut down on their other expenses, which puts a bigger burdon on them.

It can be argued that the rich carries a bigger burdon because the sum that they pay is larger (and even the rate that they pay, in country A), but that argument can be countered with the rich being so much stronger than the poorer so they're able to carry a much heavier burdon. It's not fair to put an equal weight on people of different strength.

It's not fair to make people pay different amounts for the same service. Government is a service - the service of protecting rights.

 

[Danoff]

If it's in combination with other taxes, then I wouldn't have a problem with it. But if it would be the only tax it would be problematic.

Here's poor person Bob of country A

. He has an annual income of 1000 credits. The income tax takes away 10%, so he's left with 900 credits for consumption. He buys food for 500 credits, clothes for 200 credits and the remaining 200 credits is for the rent of his apartment. He's got 0 credits remaining.

Here's poor person Steve

of country B. He also has an annual income of 1000 credits, but in his country there's no income tax so he gets to keep it all, he's got 1000 credits for consumption. However, instead there's a sales tax of 30% on all items. To buy the same products that Bob bought, he'd have to pay 650 credits for food, 260 credits for clothes and 260 credits for the rent of his apartment. He's got -170 credits remaining, but to fill in for the missing, the government provides for the poor people so that they're back at 0.

Here's rich person Rob

of country A. He has an annual income of 10 000 credits. The income tax takes away 40%, so he's left with 6000 credits for consumption. He likes more expensive stuff, so he buys food for 1000 credits, clothes for 500 credits and he pays 1000 credits for his house (he has a bank loan, or something). He's got 3500 credits remaining.

Here's rich person Eve

of country B. She lives in the same country as Steve, so there's no income tax. She gets to keep all of her 10 000 credits for consumption. So with the sales tax she spends 1300 credits on food, 650 credits on clothes and 1300 credits for her house. She's got 6750 credits remaining.

After this round, Bob has contributed with 100 credits in taxes. Steve has contributed with 270 credits in taxes, but he also got back 170 credits from the government. Rob has contributed with 4000 credits in taxes, Eve has contributed with 750 credits in taxes.

Country A has got 4100 credits from taxes. Country B has got 1020 credits in taxes, but 170 of those goes back to Steve so that he can afford his living. Country B can still get more if Eve decides to spend more money on shopping, but she can also decide to spend it elsewhere, buy things in other countries, invest it, or save it as a buffert.

Of course, you can't count on a country only having one of each, usually there are more poor people than rich people. With a ratio of 3:1 this is the outcome:

Country A: 1075,5 credits per taxpayer.
Country B: 262,5 credits per taxpayer (which can become more if the Eves decides to purchase more).

As country B can't afford to offer the same services as country A, each individual in country B would have to pay for the services that can't be provided. Either it has to be constructed so that everyone pays the same amount for the same service, in which case poor people can't afford the same services as the rich people, or the rich people would have to pay more to cover the cost of the poor. And then we're back at what's fair or not. We have replaced a tax system where rich pays more than poor with a purchase system where rich pays more than poor, in which case it's just as fair on unfair as the tax system. Alternatively, we have built a system where only the rich can afford service and for the poor to be able to afford service, they need to severely cut down on their other expenses, which puts a bigger burdon on them.

It can be argued that the rich carries a bigger burdon because the sum that they pay is larger (and even the rate that they pay, in country A), but that argument can be countered with the rich being so much stronger than the poorer so they're able to carry a much heavier burdon. It's not fair to put an equal weight on people of different strength.

Wow... those numbers are not comparable across tax systems, or somehow realistic when it comes to spending or earning... I actually didn't get anything out of it. Which is a shame because it looks like it took a while. But the numbers are from thin air, and with numbers picked as you like, you can make whatever you want fall out the other end.

Yes, the rich pay more with sales tax - but it's more fair because they choose to pay more. You have much more discretionary control over your spending than you do over your income.

The misleading thing about my breakdown of the government - and the thing you have yet to pick on - is that I allocated equal share of the government to the elderly too. Retirees in my country by-in-large pay nothing in income tax (they vote too - for senior citizen handouts). That's because taxes are linked with income and retirees often have no income that they don't get from the government. And that's the real reason I like the sales tax. I want everyone to pay for their government, because they all vote - and voters need to experience the effects of the policies they support. We have a government burden problem in this country. We don't really expect people in their 20s to pay tax because, they're young and poor. And we don't really expect people over about 60 to pay tax because, they're old and can't work. So what we end up with is the expectation that about a 30 year range of individuals - from age 30 to age 60 - are supposed to support everyone else (0-30 and 60-90)... how's that working out?

So the sales tax is more fair because individuals have control over it. It's simpler than the income tax because you won't get into all of these lifestyle preferences that our government is so fond of. And the incentives are more direct, a more clear signal to voters of the effects of the policies they vote for. Also, and you'll like this part, it hits the rich (who will still choose to spend more than the poor) harder than the poor.

Basically, it's better.

 

[eran0004]

Wow... those numbers are not comparable across tax systems, or somehow realistic when it comes to spending or earning... I actually didn't get anything out of it. Which is a shame because it looks like it took a while. But the numbers are from thin air, and with numbers picked as you like, you can make whatever you want fall out the other end.

Yes, the rich pay more with sales tax - but it's more fair because they choose to pay more. You have much more discretionary control over your spending than you do over your income.

The misleading thing about my breakdown of the government - and the thing you have yet to pick on - is that I allocated equal share of the government to the elderly too. Retirees in my country by-in-large pay nothing in income tax (they vote too - for senior citizen handouts). That's because taxes are linked with income and retirees often have no income that they don't get from the government. And that's the real reason I like the sales tax. I want everyone to pay for their government, because they all vote - and voters need to experience the effects of the policies they support. We have a government burden problem in this country. We don't really expect people in their 20s to pay tax because, they're young and poor. And we don't really expect people over about 60 to pay tax because, they're old and can't work. So what we end up with is the expectation that about a 30 year range of individuals - from age 30 to age 60 - are supposed to support everyone else (0-30 and 60-90)... how's that working out?

So the sales tax is more fair because individuals have control over it. It's simpler than the income tax because you won't get into all of these lifestyle preferences that our government is so fond of. And the incentives are more direct, a more clear signal to voters of the effects of the policies they vote for. Also, and you'll like this part, it hits the rich (who will still choose to spend more than the poor) harder than the poor.

Basically, it's better.

The numbers are all made up, but they illustrate the point, that replacing income tax with sales tax puts a bigger burdon on the poor. For sales tax to be efficient, it relies on rich people spending their money on consumption and in their own country.

If I had a high income in a country where there's a high sales tax but no income tax, I'd take my money and go abroad to buy the stuff that I want. If I had a low income and lived near the border I'd do the same.

The reason why working people needs to support those who can't work (or who do work, but doesn't earn as much) is because they are the ones who have the resources. For the same reason, you can't ask of a young child or an old lady to carry as much weight as a strong and healthy man.

 

[Famine]

The numbers are all made up, but they illustrate the point, that replacing income tax with sales tax puts a bigger burdon on the poor. For sales tax to be efficient, it relies on rich people spending their money on consumption and in their own country.

For income tax to be efficient, it relies on rich people being paid in money and remaining in a country where they're punished for earning or creating wealth. If they're paid in goods or stock options, or given low wages and high bonuses, or move their factories to foreign countries, or pay for accountants (who they can afford, being rich) to move their money around and minimise their tax burden, it's not efficient.

This actually happens.

The reason why working people needs to support those who can't work (or who do work, but doesn't earn as much) is because they are the ones who have the resources. For the same reason, you can't ask of a young child or an old lady to carry as much weight as a strong and healthy man.

You can't ask a strong healthy man to carry his own weight and two other people's and two other people.

Well you can ask, but if he can carry enough weight for three people and carry those people at the same time, he'll beat you up with the remnants of your own limbs.

 

[Azuremen]

The reason why working people needs to support those who can't work (or who do work, but doesn't earn as much) is because they are the ones who have the resources. For the same reason, you can't ask of a young child or an old lady to carry as much weight as a strong and healthy man.

So charity at gunpoint?

Sounds lovely to me.

That brain washing over there must be good to get these kind of results, Obama should look into it. Of course, it is way more effective when you live in a country with virtually no diversity.

 

[Danoff]

If I had a high income in a country where there's a high sales tax but no income tax, I'd take my money and go abroad to buy the stuff that I want. If I had a low income and lived near the border I'd do the same.

Yea, a high sales tax would cause a black market for goods. As @Famine has pointed out, a high income tax creates a black market for labor. In the US, there are buzzwords like "illegal immigration", "outsourcing", and "tax havens", all of these are people trying to skirt the income tax issue. I discovered the other day (I think this is the second time I've discovered this actually), that if you hold stock that has gone up, and you're a US citizen, you should never donate money from your pocket - you should always donate stock. Reason being when you donate a stock you don't have to pay long or short term capital gains on the stock that you're donating, but if you donate that same dollar from your pocket, you will have to eventually pay the long or short term gains on the stock.

So the optimal thing to do if you want to donate $100 in the US and hold at least $100 in stock that has increased in value, is to donate $100 of stock, and take $100 from your bank account and buy stock.

^ That, is just about the tiniest example of the absolutely stupid weird behavior that goes on in the US as a result of income tax.

Sales tax, because it's inherently impersonal, is less likely to be laden with the legislative loopholes that congress has put in place for income tax. If it applies to the young and the elderly alike, they're less likely to vote for handouts. Consider who votes for handouts... the young and the old. It's no coincidence that these people have no income and that income is the primary thing that is taxed in the US. Less handouts means smaller government, smaller government means lower sales tax, lower sales tax means reduced black market.

 

[FoolKiller]

That's in the 1800's. A lot of things has happened since then.

So, the US government didn't function in a way that required money before the Civil War?

It is a problem that it drives people out. No systems will work perfect for everything. You have to decide what's most important and chose the system that fits that.

Well, right now it causes jobs to not be in the country and thus lost jobs for the people who you think shouldn't pay as much tax. Now they can't pay for anything.

It would be legal, but it wouldn't be fair.

So, you admit that law does not determine right? Or are fair and right different? If they are different then you avoided my question and didn't answer it.

If a law violates your rights that are protected in law. If a law violates rights that aren't protected in law you don't have a case.

Wrong. Juries are allowed to determine the injustice of a law and vote not guilty in a process known as jury nullification.

The definition of what a government is doesn't say how it works. In a democracy, the government needs the support of the voters, through their representatives in the parliament, to make decisions.

In a dictatorship, it doesn't. Both are governments though, so the definition of what a government is and does will have to fit both.

But the definition does not mean that a government gets to choose what government can do. That is how a tyranny is formed. In a legitimate democracy a government that tries that outside the will of the people will be kicked out of office, or worse. Some places even have systems to recall elected leaders that do not act as the people wish.

Edit: When it comes to "use of government", it can be argued that rich people "uses" more government than poor people. If a rich person owns property worth one million credits, and a poor person owns property worth one thousand credits, then the government is protecting the rich person to a greater value than the poor person. It protects both to the same rate (100%), but the sums are different. Thus, the tax should be in proportion to their wealth, rather than being an equal sum to both.

It can also be argued that the rich person has more to lose on a weak government than the poor person has (since it's the government that enforces your right to own property, and the rich person has more property to lose), and should be more interested in making sure that the government stays strong.

You realize you just created an argument for a consumption (sales) tax, right?

 

[eran0004]

So, the US government didn't function in a way that required money before the Civil War?

The US government didn't function in a way that would be able to sustain the economic and legal infrastructure of modern society, no. Neither did it have a strong defense. How many billions does the US spend on military expenses every year?

Well, right now it causes jobs to not be in the country and thus lost jobs for the people who you think shouldn't pay as much tax. Now they can't pay for anything.

No solution is perfect. Sales tax would be less perfect than income tax.

So, you admit that law does not determine right? Or are fair and right different? If they are different then you avoided my question and didn't answer it.

Law does not say what is morally right, no. What's morally right is down to opinion.

Wrong. Juries are allowed to determine the injustice of a law and vote not guilty in a process known as jury nullification.

Okay.

But the definition does not mean that a government gets to choose what government can do. That is how a tyranny is formed. In a legitimate democracy a government that tries that outside the will of the people will be kicked out of office, or worse. Some places even have systems to recall elected leaders that do not act as the people wish.

It's the legislator who gets to decide what the government can and can't do. The legislator is usually a parliament and the government can propose laws that the parliament votes for. The parliament is elected by the people, it's democracy by representation.

You realize you just created an argument for a consumption (sales) tax, right?

It works for both. It doesn't work for lump sum tax. Lump sum tax is what it was designed to argue against.

 

[Famine]

Law does not say what is morally right, no. What's morally right is down to opinion.

If it's my opinion you should die, it's morally right for me to kill you?

 

[eran0004]

If it's my opinion you should die, it's morally right for me to kill you?

If it's your opinion that it's morally right to kill me, then you would consider it being morally right to do so. Wether or not other people agree depends on your ability to persuade them.

Some religious texts, for instance, consider it morally right to kill someone if they commit certain crimes. The Torah considers these crimes punishable by stoning:

• Touching Mount Sinai while God was giving Moses the Ten Commandments (Exodus 19:13)
• An ox that gores someone to death should be stoned (Exodus 21:28)
• Breaking Sabbath (Numbers 15:32–36)
• An engaged virgin and the man who lies with her, together, since she did not cry out (Deuteronomy 22:24)
• Giving one's "seed" (presumably one's offspring) "to Molech" (Leviticus 20:2–5)
• Having a "familiar spirit" (or being a necromancer) or being a "wizard" (Lev. 20:27)
• Cursing God (Lev. 24:10–16)
• Engaging in idolatry (Deuteronomy 17:2–7) or seducing others to do so (Deut. 13:7–12)
• "Rebellion" against parents (Deut. 21,18–21)
• Getting married as though a virgin, when not a virgin (Deut. 22:13–21)
• Sexual intercourse between a man and a woman engaged to another man (both should be stoned, Deut. 22:23–24)

Death penalty law is based on the opinion that it's morally right to kill someone if he has committed certain crimes.

 

[Famine]

If it's your opinion that it's morally right to kill me, then you would consider it being morally right to do so. Wether or not other people agree depends on your ability to persuade them.

Some religious texts, for instance, consider it morally right to kill someone if they commit certain crimes. The Torah considers these crimes punishable by stoning:

• Touching Mount Sinai while God was giving Moses the Ten Commandments (Exodus 19:13)
• An ox that gores someone to death should be stoned (Exodus 21:28)
• Breaking Sabbath (Numbers 15:32–36)
• An engaged virgin and the man who lies with her, together, since she did not cry out (Deuteronomy 22:24)
• Giving one's "seed" (presumably one's offspring) "to Molech" (Leviticus 20:2–5)
• Having a "familiar spirit" (or being a necromancer) or being a "wizard" (Lev. 20:27)
• Cursing God (Lev. 24:10–16)
• Engaging in idolatry (Deuteronomy 17:2–7) or seducing others to do so (Deut. 13:7–12)
• "Rebellion" against parents (Deut. 21,18–21)
• Getting married as though a virgin, when not a virgin (Deut. 22:13–21)
• Sexual intercourse between a man and a woman engaged to another man (both should be stoned, Deut. 22:23–24)

Death penalty law is based on the opinion that it's morally right to kill someone if he has committed certain crimes.

If it's a matter of opinion alone, why do I need other people, law or religious texts to agree with me?

It's morally right to kill someone if you think they should die. I've never heard such utter tripe. I'd love to see you telling folk it was morally right that their ancestors were kept as slaves, or executed en masse for believing in a different God, being gay or being disabled.

"What's morally right is down to opinion"

 

[eran0004]

If it's a matter of opinion alone, why do I need other people, law or religious texts to agree with me?

It's morally right to kill someone if you think they should die. I've never heard such utter tripe.

You need other people's opinion if you don't want to be hanged for the murder.

 

[Famine]

You need other people's opinion if you don't want to be hanged for the murder.

But if I don't agree to that, it's morally wrong.

 

[eran0004]

But if I don't agree to that, it's morally wrong.

It is. But it wouldn't help you if others didn't agree with you.

 

[Famine]

But of course.

Just one thing. If you say what is morally right is simply a matter of opinion and that law exists to protect rights, what use is law when it hangs a man for doing what he thinks is morally right? How is the law protecting his rights?

If you weren't ignoring me for the last page, you'd have gone to the Human Rights thread by now and learned why the above is nonsense.