From: john@anasazi.com (John R. Moore)
Newsgroups: alt.politics.clinton,talk.politics.misc,alt.politics.bush
Subject: Re: ==> Rhetoric Vs. Reality--The First Debate
Date: 16 Oct 92 03:46:41 GMT
Reply-To: john@anasazi.com
Organization: Anasazi Inc, Phoenix AZ USA

Keywords: 

In article <Bw4Jqt.F6J@apollo.hp.com> goykhman_a@apollo.hp.com (Alex Goykhman) writes:
]>  We could accomplish the same thing much more fairly by eliminating 
]>  those loopholes.  One problem with taxing wealth is that to merely
]>  maintain any reasonable standard of living, by the time we're retired
]>  we'll need to have assets in the $1-2 million range (5% interest on 
]>  $1 million dollars = $50,000).   Surely any attempt to tax "wealth"
]>  would call this "wealth" and end up taxing it despite the fact that
]>  a $50,000 income is quite middle class these days.   (Note also that
]>  the 5% interest is a bit optimistic at the moment, as well).
]
]    I suppose one would need to save more for retirement, but putting
]    money aside for retirement would be easier (no income/payroll/
]    capital gains tax).  All said, shifting tax burden completely from 
]    income to assets would be politically unfeasible, I realize that.

If you tax assets, then little old ladies with no income but who
were thrifty and saved for retirement will be paying the major
share of taxes. Taxing assets would be even worse at discouraging
savings than income taxes or capital gains taxes. Better would
be to tax consumption. That way, whatever you use, you pay taxes on;
whatever you save, you don't. The savings, of course, will go into
providing capital for private investment unless you are so stupid as
to stuff cash into your mattress.

If the rich live a high lifestyle, they'll pay for it. If they invest
their money in the economy, they'll pay less.
]
]    That point I am trying to make is this: the official Republican
]    party line has always been that raising taxes takes away incentives
]    to work, and does not raise revenues.  This is patently false, and 
]    they know it: it all depends on what we tax (i.e. they'd rather tax 
]    our paychecks).

Progressive taxes always discourage incentives to do whatever is taxed...
if they are income taxes, it is income; if it is wealth, they are savings;
if it is spending; they discourage consumption. The republicans are
quite correct about the disincentivizing effects of taxation. One reason
so many people invested in bad real estate in the late '70s and 'early
'80s (resulting in the S&L crisis) was that taxes disincentivized them
(gack, I sounds like a policy wonk using that word) from other investments.

]    I'd rather see goverment spending go down, and my taxes along
]    with it, but if we can't cut spending, the next best thing is to make
]    the rich pay their fair share of taxes, by taxing their assets.

If we can't cut spending, we are screwed. The rich already pay more than
their fair share of taxes. The news today said Ross Perot "only" paid
6% of his income in taxes - sounds like he isn't paying his full share
until you realize he is paying $16 million dollars a year - far more
than your share or mine. This whole business of "the rich not paying
their fair share" is the most demagagic class warfare nonsense that
I have seen in a long time.
]
]...
]>
]>>   Right now, we have the marginal income tax rate peaking up at ~46% for
]>>   families making ~$55,000 a year,
]>
]>  We do?  How do you figure?    You can't just add up SS, federal
]>  income tax and state income tax since the 31% marginal federal
]>  rates kick in above the upper limit on FICA income, and state
]>  income tax is deductible from the federal.
]    
]    Nor do the rich pay 31%, it is more like 24% (current AMT rate).
]    Those are, of course, ballpark numbers.  My point is that under the 
]    current tax code, middle-income wage earners are subject to higher 
]    tax rates than the rich folks.  This is unfair, and needs to be 
]    corrected.

The only way the rich pay AMT is if they invest in those items that the
tax writers decided was desirable, and thus provided tax breaks for
them. Look at the tax code sometime.... do you know what the biggest
tax break is? Municipal bonds.... the federal government encourages 
people to invest in local government through this "tax break." AMT is
sort of a "gotcha" that says that, if your gross income is over a certain
amount, the feds are gonna get some of it even if you are running at a net
loss.

If you don't like the rich taking advantage of "tax breaks" - get rid of
them and watch the mess that it causes.  Most of those tax breaks
are done for a social purpose. Yes, there are some that are done
specifically to aid one person or another, but they don't account for
that much money.

-- 
John Moore NJ7E, 7525 Clearwater Pkwy, Scottsdale, AZ 85253  (602-951-9326)
john@anasazi.com ncar!noao!asuvax!anasaz!john anasaz!john@asuvax.eas.asu.edu
"Modern liberals are the termites in the structure of our society."
  John Moore
Newsgroups: alt.politics.clinton