From: ZIMMERJ@WABASH.BITNET
Newsgroups: bit.listserv.politics
Subject: Re: new tax scheme
Date: 6 Oct 92 15:29:00 GMT
Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU
X-Envelope-to: politics@ohstvma.BITNET
X-VMS-To: IN%"politics@ohstvma"

>From: K=A*T <MEC038@UKCC.UKY.EDU>

>Now, you are not saying that "fair" is only a matter of definition
>and there are no reasoning behind it, are you?

Of course not. I said before that "fair" means that people are treated
equally.  In other words, a "fair" tax is one which takes an equal portion of
everyone's income and doesn't penalize some (or reward others) for other
characteristics of their lives.  Why should this be considered fair?
Ultimately, I don't know.  Sooner or later this boils down to some philosphical
absolute that is essentially pure dogmatism.  It seems to me, though, that
defining "fair" as treating people equally is pretty darn reasonable.

>But I think I suspect what you mean by "fair."  You see,
>I think the reasoning behind a flat tax being fair is not
>sound or on solid grounds.  The first loop-hole to that
>idea comes when you would propose deductions for the poor
>(zero brackets) and for individuals.  Why should the next
>guy who makes the same amount of money as I do pay less tax
>just because he has 10 kids and I have two?

Actaully, I don't recall ever proposing such exemptions.  In fact, I oppose
them partly for the reasons you provide.

>The second loop-hole is that if you want to push your idea
>of fairness just a bit more, then you should question the
>progressivity of the government spending.  I mean even a flat
>tax is progressive if most of the money is funneled back to
>the needy.

Yeah, ultimately I would agree with this, which is why the government should
tax people only to pay for public goods. True, many of these goods benefit the
poor more than the rich, but many also benefit the rich more than the poor
(actually, you could argue most of them both ways).  I'm willing to bet that
benefits on public goods more or less balance out across the population, or at
least come close enough.

>Now some people say we have to pay taxes according to our
>*abilities*.

Specifically, those who advocate progressive income taxes generally say
something like this.  In fact, many would say that its only "fair" that those
who earn more ought to contribute relatively more to society (the state).  Why
should this definition of "fair" be accepted as opposed to my own?  Again, I
can't see any ultimate reason why it should.

In fact, this definition of "fair" seems intrinsically bound into the conflict
behind classical liberalism and Marxism (or collectivism, if you prefer).
Needless to say, this goes FAR beyond the scope of a discussion on tax policy :)


> Well, let me say something about that.  I am
>a college professor and have two kids.  My wife works half-time.
>I cannot afford to send my daughter to the same school that
>I graduated from.  If our roof needs work, I have to borrow the
>money for it.  Yet I paid about $400 out of my last $1,000 in
>taxes.  Meanwhile Mr. Perot paid only $280 out of his last $1,000.
>(Two notes: 1. I doubt if Perot even paid that much considering
>all the CPAs who work for him, 2. I paid more than him because
>I figured out Social Security Taxes on it.  I willing to let the

Ideally, the two of you should have your taxes calculated at the same rate on
your total (not marginal) income.  This means eliminating the regressivity of
S.S. taxes (or abolishing them all together) as well as eliminating the tax
loopholes that let Perot get by paying fewer taxes than you do.

>Now
>what irritates me is that our government says Mr. Perot and I
>have the same ability to pay taxes on our respective last $1,000.
>Now THAT is not fair in my book.

Possibly.  It seems to me that you're focusing on the ends of this decision
while I'm focusing on the means.  Why should one be favored over the other? Who
knows?  Philosophers have argued about that for centuries, and I doubt that I
can make any significant contribution toward ariving at a generally acceptable
answer.

>Hold on.  That admission was done too hastily.  Fine, as in you are
>ambivalent, or fine as in I have a point?

Both.  You have a point; its just not one that I agree with due to my
definition of "fair."  I am ambivalent in that i have abosolutely no interest
in a lengthy discussion of "fairness," since there won't be any clash anyway.

>I have to disagree with you on that.  Are you saying property taxes
>are also double taxation?

Yes.

>Well, you paid income tax when you earned
>the money and now you have to pay property tax when you use that
>money to buy a house.

Precisely (really this is an example of a sales tax).

Let me illustrate why property (wealth, savings) taxes are double taxation if
income is also taxed.  You earn $100 and pay a 10% income tax on it.  That
leaves you with only $90, which you save all of (as wealth). Now, the gov't
forces you to pay a 10% wealth tax, which leaves you with only $81 from what
was originally $100.  That $100 stream was taxed twice, hence the lable double
taxation.  The fact that it is called something different the second time
doesn't change anything.

Another good example is the corporate profits tax coupled with a tax on
dividends.  Corporate profits are taxed once when they are received by the
firm, and then get taxed again when they're payed out to the owners as
dividends.  One way to avoid this would be to eliminate the corporate profits
tax and instead tax only retained earnings along with dividends so that the
same income stream is taxed only once.

>--KAT

Jason

>p.s.  Will you please leave about 1-12 characters right margin so that
>I can add quote signs to the beginning of your text?  Thank you.

Sorry, but I'm not sure how to do this :(
Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU