How hard is it for a Mexican to visit the US on vacation?

[Dr. Zaus]

I think it best not to make people dependent on a welfare-like pre-bate by not creating a pure sales tax to begin with.

Are we in OT.. darn..

I respect your right to have your opinion.

 

[chusteczka]

Are we in OT.. darn..

I respect your right to have your opinion.

I have heard that seasonal tourist areas may possibly refund sales tax to locals after the season is past.

I would not mind hearing the reasoning behind your opinion. Otherwise I will continue with my point of view without ever understanding yours.

 

[Dr. Zaus]

I have heard that seasonal tourist areas may possibly refund sales tax to locals after the season is past.

I would not mind hearing the reasoning behind your opinion. Otherwise I will continue with my point of view without ever understanding yours.

Cool.

It's a multi-faceted situation so I'll break it down; there are limitations to all of this, so nothing is 100%.

I think it best not to make people dependent on welfare

This refers to a serious representational problem. Everyone is dependent on some sort of "welfare" in that there are no federal expenditures that aren't justified by providing either for the common defense or the general welfare.

I understand that getting $1k "from the government" feels like something different than receiving $1k /person in your state for roads/education, but it is providing for the welfare of the individual through money from the government. More directly: if there is a tax 'deduction' for having kids then you are getting money from the government; a pre-bate for your annual income-tax.

I understand not wanting people to 'feel' like the government is providing for them, but with the tax-system as it is now the pre-bate is nearly all of taxes for the bottom 50%. Further, the truth is that we are all dependent on the government as those making greater than the 50% are beneficiaries of societal supports.

In short, the representational problem is that money from the government is welfare, when the truth is that all of us receive money from the government and we are all dependent upon each other.

... by not creating a pure sales tax to begin with.

Income tax has me receiving welfare to the tune of $500 / month because I make less than the poverty-level for my family; this isn't "TANIF" but "Earned income tax credit". This means that my suggestion is already being nearly half-implemented; the problem, though, is that if my wife dropped out of school and made $14k/y working minimum wage we would lose enough government support that we would have to pay for the honor of her working.

The point being, with the present system there are a lot of shenanigans. With the regressive sales tax system people pay for how much they purchase: which is directly related to how much they are taking from others in society. We can pre-bate everyone the first poverty level in taxes so that we're only taxing people who are consuming more of society's productive capability than is minimally needed.

What are the economics of economizing?

The problem typically brought-up with the situation is that taxing consumption would "destroy the economy"; this betrays a fundamental misunderstanding of the meaning, nature and entire point of an economy: economizing. The point of there being a price for things is to make people want to economize, not waste, and thus maximize production in those things people are most willing to part with money for.

From this perspective it is entirely acceptable and wanted that the price of medicine should skyrocket. This is because the more society puts into medicine the more people will allocate resources to the medical field and the more medical advancement and delivery will proliferate. Steve Jobs, spending every last penny he could to save his own life, has advanced medicine dramatically. But if we had twice the incentive to cook at home instead of eat-out we would have less of our overall pool of labor and resources allocated to fast food.

By increasing the price of things we force greater "economizing" with our money. This encourages investment in things that people may want and discourages purchasing things that people could do without. By taking money on the spending-side we encourage investment; unlike the present system that penalizes half of the population for being 'savers'. We don't "destroy the economy" because there's always another need to fill, it’s just a function of the dollar-votes what needs will be filled. When there are no longer legitimate needs to fill it's time to move past money and start thinking about a society that pays people to serve in volunteer positions.


What about the regressiveness of a sales tax?

The more you make the less you pay in taxes with an income tax. This is because the more you make the more likely you are to save instead of spend. But do we look down upon the millionaire that invests her money? Or do we dismiss as an asshole the guy that spends 17k on his dog? Money that isn't turned into goods or services may accumulate; this is the definition of economizing and is the theoretical underpinning of why money is a reasonable means of rationing society's goods and services.

We most dislike taxing people who honestly can't afford it; this is why the prebate is already reflected in the existing income-tax (earned income tax credit). But let's take this through a though experiment:

We have a family of four with an income of 24k, let's say this is the poverty line. Why is this the poverty line? Because the price of keeping-on-keeping-on for four people is 24k. We don't want these folk to have to pay taxes, and if present tax-system is true then we even want to help these folks out a bit. So everyone, no matter the income, will end up paying another $12k in taxes (at 50%) for the 24k that it takes to live. If we pre-bate the $12k in taxes then we are simply setting the tax-rate of someone at $24k to zero. If someone is making less then this then it might be 'welfare', except that this family is already making significantly less than they need. Unlike regular welfare, though, there is no loss of income from making more money and there is no cost to the family if they chose to live austerely and save money.

Let's look at someone making 36k/y. The poverty level is 24k, taxes are 12k and the pre-bate is 12k. The family making 36k has the option to live a 24k/y lifestyle and pay no taxes, saving the other 12k/y or up-grade to a 30k/y life style. Remember, what disgusts us about the top .01%. It isn't Granma that worked her whole life to save $2mill, it's ashole McCoy that spends 18k on his dog while people go without elsewhere. If the dog-expenses were 27k with 9k going to the benefit of everyone (the theoretical justification of taxation) then the social-ill of wasting money on (thus allocating societal resources to) the useless is counter-balanced by an allocation of societal resource (that is money) to something we thoughtfully choose.

Isn’t this Marxist class warfare?

Clearly they’re a benefit to agency on the part of money-makers, as long as failure is possible. When an organization can die then if it becomes overly inefficient then, by evolution, we get the most efficient companies. At the same time, individual allocation of funds is rarely done rationally. Years of listening to rush say in my head "there you go, they don’t like freedom"; this is false; it is simply irrational to think that people, en mass, will allocate resources in society in a way that is absolutely best. It is rational to think that the most impoverished will "economize" in society, this is because they have to scrape-by and will purchase through the most efficient means (though this will often trade long-term health for short-term wealth/satisfaction).

Unfortunately, once we get past what it takes to be not-impoverished then we see people spending in ways that move resource away from needs and move them toward wants. When too many of our societal resources are allocated to wants, the needs of those without such affluence suffer. We can only justify this by re-allocating some part of that money (resource allocation) back toward the needs of society OR by accepting that the wants of the rich are more important than the needs of the lower-class.

Few people want to allow people to starve. Unfortunately we use welfare, which creates dependence and a mindset of "how do I get mine"; if we pre-bated enough to make this no-longer an issue then the intrinsic motivation of people to be creative or have a better-than-minimal life will be why we do what we do. This will lead to maximum economization and it will remove the moral-problems with the tax-rate being regressive.

TLDR:

If it’s TLDR then ignore it; some ideas are complex, deal with it.