What he said..
Your system is essentially saying that you will give a loan to taxpayers to pay over the course of the future. Any loan is subject to a lot of different risks, such as default risk, interest rate risk, and risk of someone dying early. There will no longer be any certainty in how much taxes the government can really collect. Is this really what you want?
I didn't say GM paid 37 billion in income tax. Read my post again. Here's what I said.
"Our current "income" tax system says they should pay 35% on the $17,285,000,000 they made in profit."
http://finance.google.com/finance?q=gm
Educate yourself on the US corporate tax system, then come back and tell me what will happen in GM's case.
_What does that mean? If the are paying tax on $17.2 billion, why did you list their income as negative? Is their income negative or positive?
of the top of my head how the hell would you account for paying taxes on money you already paid taxes on.
It's not really a loan, not anymore than any other tax being a loan. There is no interest, and if you lose your assets you don't pay tax on them.
Is there any certainty in how much taxes the government can really collect from income tax? People lose jobs, people retire, people die. Overall, for the country as a whole, income tax is probably fairly stable. And I believe an asset tax would be as well. Maybe some people suffer major losses due to natural disasters or theft, but over the entire population I think the income based on an asset tax would be just as "certain" as the income from income tax.
http://en.wikipedia.org/wiki/Property_tax
It already exists on the local tax levels. It's a working concept. You pay property tax one year. Then, next year you pay property tax again on the same property. Onward forever.
so if I paid my taxes this year and after taxes I have 1 billion left over in the bank. Next year do I pay taxes on that 1 billion again?
Property and liquid capital are not the same thing. I live in a town and I recieve services from the town I should pay taxes to the town. That makes sense.
Same total tax, paid by different people (or same people at different times).
I'm not really sure what you mean, can you put that in simple terms?
Are you saying $350k upfront is equal to $6500k over a 30 year period? When I do the calculation at 6% return, I get $2010k, not $6500k. Also that is without adding the same 6% return to the money collected from the asset tax, so it's not a totally fair comparison. Still, I see your point. Money today is a lot more valuable to the government than money in 30 years. But I don't think your 5% number is right either, I think you overestimated it because you ignored the possibility of the asset tax money maturing at the same 6% rate.
I gotta eat, I'll work out it out myself later.
They are both assets. If you choose to keep your money in cash rather than investing it you are harming the economy, so why should you be rewarded? Put your cash in a safe investment portfolio and you will make more interest than the asset tax would cost you anyway.
I earned my money fair and square why should I be allowed to keep it :roll: Look into communism and socialism I think its for you.
wealth is determined by assets (liquid and non-liquid). if you have 20 million dollars worth of property and tax is 10%, you will have to pay $2 million each year. and if u dont make $2 million each year, you are boned.
in short, the people wont stand for it and this tax system isnt sustainable in the long run
in short, the people wont stand for it and this tax system isnt sustainable in the long run
Please leave name calling out of it. Taxes are a part of capitalism.
Besides, I could say the exact same thing "I earned my money fair and square why shouldn't I be allowed to keep it" when 25% of it is taken away for income tax.
Either way the government is going to take your money, I'm just discussing an alternative way of doing it.
First of all, your 10% tax rate is way off. I calculated it out to be about 1%. If you have 20 million dollars in assets and can't even get a 1% return on investment, yes you will lose a bit each year. But it's pretty trivial to get better than a 1% return on investment.
It's perfectly sustainable.
oh thats where you are wrong. I pay the first time around. You want me to pay 25% over and over again until its gone.
THere was no name calling so put your peace pipe down.
How is this not a loan? If I made some income this year under your system, I owe taxes for it over the next 20 years. The income has already been earned and taxes need to be paid for it, but I do not have to pay until later. How is this situation different than taking out a loan from the government?
And if you're saying that this loan is interest free, you're essentially introducing a massive tax cut compared to the current system after adjusting for interest. Simple concept of time value of money.
Do you know why income needs to be withheld for taxes currently? Because if you don't most people will end up not putting enough money aside to pay for it by the end of ONE year. Imagine dragging this out over 20 years, how many people will have enough money set aside to pay for taxes? Yes, I understand that the amounts will be a lot smaller, but a lot of people live from paycheck to paycheck currently, and they will not have trouble spending more if the money is available to them.
Is there any certainty in how much taxes the government can really collect from annual income? A hell lot more certain than if you collect it over 30 years if you ask me.
After eating lunch I realized the flaw in your argument.
What you say about the value of money over time is 100% true. However, you are looking at the taxes collected from just one individual. You need to look at the whole.
Take a sample of 70 people aged 1-70, 1 person of each age.
1-22 are children or young adults still in school/college. They are not paying any income tax, and they don't really have any assets to speak of so they wouldn't pay any asset tax.
23-43 are working adults. They are paying full income tax in an income tax system, or they are paying asset tax based on their assets which are building during this period of their life.
44-70 are retired. They would be paying zero income tax, but with an asset tax system they would be paying for their full assets.
Based on Income Tax:
50k income, 20% income tax rate, 20 working adults = 200k total taxes collected.
Based on Asset Tax:
26 retiries, 500k in assets each, 1% tax rate= $130k
plus 20 working adults, 250k (averaged) assets each, 1% tax rate= $50k
$180k total taxes collected. So 1% would be too low, but that is not very far off. Increase the tax rate to 1.2% and the total taxes exceed those from income tax.
Your 5% required tax rate is *way off*.
It's different because it's not a loan. Just like renting an apartment is different from buying a condo. Both involve monthly payments but the end result is different.
If you lose your assets somehow, you don't have to pay tax on them. If they are destroyed, you don't have to pay tax on them. If they depreciate, you pay taxes based on the depreciated value rather than what you paid.
Of course, there is the "drawback" that your assets could increase in value and you would owe more taxes, but to me that is like complaining about getting a raise because you pay more income tax.
It might look like a loan, but there are very important differences.
See my previous post. Given one working person, it would be a loss based on the time value of money, but given an entire population the total tax income to the government would be the same.
I don't see this as a problem. Assets by definition have a value. If a person has 500k in assets, they can afford a 5k tax, it's simply a given. If a retired person has a $1million house and can't afford the asset tax, he can mortgage it and pay the tax.
If you are looking at a single person, maybe. But over an entire population total assets should be very stable. A disaster such as a bad hurricane would drastically destroy assets, but it would also destroy jobs and income so I don't see it being any worse.
consumptions tax
5-100 years old are always consuming = always paying tax. Consume more expensive things pay more expensive tax.
seems fair to me. Encourages success and wealth and doesn't protect the rich any more than it does the poor.
So the poor pay the exact same tax as the rich. I suspect some low income people would owe more taxes per year than their total income.
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