Return-Path: <@OHSTVMA.ACS.OHIO-STATE.EDU:DEMON@DESIRE.WRIGHT.EDU>
X-Envelope-to: POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU
X-VMS-To: IN%"POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU"
MIME-version: 1.0
Content-transfer-encoding: 7BIT
Newsgroups: bit.listserv.politics
Date:         Thu, 28 Jan 1993 13:54:47 -0400
From:         The Integral Differential <DEMON@DESIRE.WRIGHT.EDU>
Subject:      Re: William Jefferson Clinton -- anagram
Comments: To: POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU

>>        For tax purposes, yes.  You should be encourage to put $10 and $10
>>together and come away with $25.
>>
>>:)
>
>Wait a second.  You cannot kid your way out of this.  Would you
>then recommend that the said $5 be taxed a lower rate than say
>the income of a simple wage earner?
>
>>Brett'
>
>--KAT

        Sorry, wasn't trying to kid.

        Basically, money left after taxes and expenses (nee "disposable") can
be put back into productive use by investing it, lent to the government (bonds
n such) stuffed under the matress, or given away.

        Optimally, which combination of the above should we do?  We like
charitable giving, so tax deductions for that (up to a point, and only after
exceeding 2% (?) AGI.
        Lending to the government is always nice (from the gov. point of view),
so that's tax free, albiet at a rate lower than other investments.
        Stuffing your house with it?  Not at all.  No breaks, no promises.
        So, what to do with investments?  If we tax them the same as income, we
are basically telling peole that the more they earn, the more we will tax their
disposable income that is invested.

        That seems to be the wrong message.  After all, the more we earn, the
more disposable income we have to begin with.  And investing it (aka providing
capital) facilitates economic growth.  So why use the stick when we should be
using the carrot?
        There is, of course risk involved.  And we can deduct losses just like
we tax gains.  But why tax the same rate as income?  It's been taxed once and
we're telling people that if they use it for most investments we'll tax it
again (at the same rate as if we worked for it).  So where's the incentive?
Let's just shelter our disposable income and work more hours.
        On the other hand if we ignore income and simply adjust the cap gains
tax rate until general government revenues seems to be maximized, then we have
an independently determined tax rate that we know most people are comfortable
with.  We let them invest, we take a slice off the top, business has access to
capital.
        But why should we care if it is a millionaire or busgirl who sold that
stock?  If we levy increasingly higher taxes, we'll shut down investment from
those with the most disposable income to invest.  They'll go back to shelters
and offshore investments.
        As Ross quoted, they'll "Run for the Border".

        The whole issue of progressive taxes seems to revolve around the
assumption that because "they" have it, we not only have the right to take it
(tax it) but to make it hard for them to keep it or get any more.
        Silly, nonsensical, *wrong*.

        The only "fair" income tax is a flat tax.  The best flat income tax is
no tax.

        Should we make all prices subject to income?  Poor people pay $1 for
something while middle income people pay $1.50 and rich people pay $3.75?
That's the reasoning behind progressive income taxes.  They have it, so let's
make them hand some of it over.

        I guess if we're going to stick the 80s with the label "decade of
greed" the 90s have to be "the decade of envy".

Brett'
Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU