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Junkyard Dawg - Any questions?!
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die with honor
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| Perhaps I'm wrong, but I prefer to test drive my vehicles before I buy them.
WOW !!!! What a neat idea ... we can implement the new tax over 10 years, only 4 states at a time in reverse order of admittance, then everyone gets it in year 11. Alaska, Arizona, Hawaii and New Mexico would be the first four the first year. You would get to test it on a high density state, 2 low density states and a retirement state. A bonus would be that two states have a huge illegal population.
We could adjust each year before we moved on to the next group of states.
For instance if we see the population of Arizona, drop by 50% as all the illegals head over to California, Nevada and Utah we can adjust.
If we see the population of Alaska triple as New Englanders move to take advantage of the new law ... we can adjust.
We can compare the taxes generated by these states, both pre and post, and make adjustments before the next four move to the new system.
Now the question is will Sean wait 11 years before he is able to take advantage of the new plan???  |
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Mine honor is my life; both grow in one:
Take honor from me, and my life is done:
Da Bard ... But something tosk would say.
Americans used to roar like lions for liberty; now they bleat like sheep for security.
~ Norman Vincent Peale~
We don't have to live in the kind of America the two Major parties have in store for us.
Together, let us lay the foundations for an America worthy of our Founding Fathers.
~Ron Paul~
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2 days ago @ 4:05 PM
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| Fascinating thread. A few observations
1) An early comment about getting less if you tax it, getting more if you don't- is a key concept. Taxing income- especially with rising marginal rates makes income less valuable and thus the effort to produce the income becomes less valuable.
2) A huge number of rich people pay next to nothing in income taxes- if you have wealth you can buy state tax exempt bonds and essentially pay not tax- not even FICA!!!
3) Most Americans do not pay income tax but darn near everyone that works pays FICA. At this time FICA is like 7.2% and matched by the employer (many illegals pay FICA and withholding- using a fake SS # but get nothing back) because they are afraid to file a tax return or apply for SS.)This FICA contribution nets out to almost 15%. Unless you are really low income this is a "flat tax"- except when you get above $80+ Grand at which point the
FICA disappears. Talk about a hit on the working class!!
4) The pundits are always complaining about America's poor saving rate and this would turn everything around. Likely saving would go up, consumption down and a recession would hit. Especially with the useless IRS and HR Block people on the street. The next problem is what to do with the money. The Japanese have a huge saving rate and without a big export surplus, Japan's economy goes in the toilet. What would happen in the US? If the increased savings were not channeled into investment, this switch would probably cause an economic hiccup. Incidentally, Milton Friedman pretty much proved that the Great Depression was a monetary phenomenon- that the money supply shrank precipitously from 1929 to 1936. The Federal Reserve Board did not now this because they were looking at the aggregate stock of money- which did go up. What they didn't realize was that the banking crisis scared people so much they hid their money in the mattress- while the stock of money increased, it's "velocity"- rate of circulation went down drastically. Federal Deposit insurance probably makes a Great Depression unlikely now.
5) Ricardo really invented marginal analysis and probably overestimated human rationality- but Friedman has restated the rationality proposition to "at the margin, people are economically rational"- that is, we may buy BMW sports cars but will haggle about the trim package cost.
I prefer the Forbes flat tax idea- I am of the opinion that the level of taxes is less important than the progressivity. I think the economy is hugely distorted by our progressive income tax- and it leads directly to "loop-hole" construction and tax evasion.
6) It is impossible to maximize two dependant variables- what confounds us is that we use the Income tax to raise money and redistribute wealth. The more you do of the latter, the less you get of the former. This also happens in government procurement- there is a perpetual war between efficiency and equity.
Anyhow, great subject. | --
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Grognard fantôme
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| WOW !!!! What a neat idea ... we can implement the new tax over 10 years, only 4 states at a time in reverse order of admittance, then everyone gets it in year 11.
Actually, I was talking with my wife about this tonight. In public health, or medicine, no way you'd "have a theory" or an idea of how to do something, and just try it out on a few thousand patients. You'd have to go through EXTREMELY rigorous and thorough steps to prove that the empirical model you are using to predict the outcome is reliable and valid. Even then, practices get changed when the way of doing things in the long-run proves to be less effective than initial evidence suggested. Strange that, people who tout economics as en empirical endeavour, don't show the same enthusiasm for such pilot testing when it comes to their pet economic intervention.
If it would work, great! If it would not, who stands to lose if it is "tested?" Only those special interests who would gain at the expense of others if it were implemented whole-hog in one fell-swoop. |
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"'The front' is wherever you stop running away. Get used to it. This is what modern warfare looks like." K T Cat | | | |
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huff huff
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die with honor
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