Stop Taxing Profits And Incomes?

Thu Feb 14, 2002 1:10 pm

Here's something to test out what Matt D was mentioning about vapid topics.


Abolish all income and profit taxes and replace them with flat-rate consumption taxes.


- Profit taxes essentially penalize people for doing something socially useful. Profitable businesses generally offer more secure employment than unprofitable ones, and can expand to create more employment, which in turn cuts a government's welfare and assistance costs.

- Income taxes are easier to evade than consumption taxes. It's easier to make money under the table than it is to go out and spend it tax-free.

- Consumption taxes have an element of fairness: the more you consume, the more you pay.

- A single tax involves less paperwork (and hence fewer hours lost to attending to that paperwork, and less aggravation) than the plethora of taxes that most countries have.


- Too explosive politically.

Now, let's see if the topic sinks or swims.

Posts: 835
Joined: Fri May 05, 2000 2:08 am

RE: Stop Taxing Profits And Incomes?

Thu Feb 14, 2002 1:50 pm

I love this idea. The problem is that it would never work.

1) It's regressive. You'd have to make up a "basket" of goods that weren't taxed in order to ensure that poor families didn't pay a ton in taxes since they consume more

2) Doing this inevitably involves some choices that are politically driven. For instance, tobacco farmers would lobby the crap out of congress to get their goods marked as "neccesary". Why not? The schmucks are addicted to the cancer sticks.

3) Given the breaking up of the supply chain among firms, selling and reselling goods involves big costs. You'd have to levy the tax only on final goods, but what then? How do you tax groceries vs. restaurant meals without distorting the economic system?

Here's my favorite tax plan:

1) Income taxes are pegged at 23% marginal on top of your wages.

Standard deductions:

a) Education
b) Mortgage Interest (50% of Rental cost for primary residence)
c) Health Insurance
d) Business Expenses

2) No capital gains tax. No tax on interest income. Investment should be encouraged by everyone.

3) A MAJOR luxury excise tax determined by ordinal relationships between goods at unit cost.

For instance, if you bought a car that was more expensive than 20% of all the cars sold in the U.S, you'd get taxed 40% on the cost. If you bought a car that was more expensive than 90% of all the cars sold in the U.S, then you'd get taxed 50% on that.

If you bought restaurant meals at places which served food that was more expensive than 50% of the other restaurants by average cost per meal, then you'd pay a 5% tax. If you ate at places like La Beck Fin where it's like $70 a plate, you'd pay a tax of 50%.

Buying garments that were more expensive than 50% of the comparable garments sold that year would have a 5% tax. Buying garments that were more expensive than 90% of comprables? 40% taxation on that, sucker!

This makes it so that people don't buy expensive, useless things and encourages firms to compete for the average person - since the average person's spending isn't taxed, the average person becomes a sweet spot.

Too much luxury is wasteful in terms of utility.
Matt D
Posts: 8907
Joined: Fri Nov 19, 1999 6:00 am

RE: Stop Taxing Profits And Incomes?

Thu Feb 14, 2002 1:59 pm

Interesting topic (for a change).

It sounds dynamite on paper, but FlyBoeing is correct:

It would NEVER work. Income taxes are the bread and butter of our Government. If income taxes were to be eliminated, then sales taxes on goods and services would be raised to the moon just to make up for the loast revenue.

Part of the problem is not just the tax rates per se, but also with what the taxes are used for.

Our government is such a hopelessly bloated monstrosity of inefficency and waste that it's criminal.

I think that if we were to trim some fat there (and I do mean a lot of fat), then income taxes could be lowered to where they would be more fair and equitable.

And why not simplify it while we're at it?

Just a straight across the board 20% tax. If you make $100,000 a year gross, your tax liability is $20,000.

If you make $20,000 a year, then your tax liability is the same 20%, or $4000.

Of course it's these figures that the Dems screamed about with Dubyas tax plan.
No deductions, loopholes, or complex forms with names like "10W-40.B-6 v.8" to fill out.

Just my $.02
Posts: 835
Joined: Fri May 05, 2000 2:08 am

RE: Stop Taxing Profits And Incomes?

Thu Feb 14, 2002 2:25 pm

What do you think of my luxury tax idea?

Who is online

Users browsing this forum: JJJ, lugie, rfields5421 and 34 guests

Popular Searches On

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos