Yet another Tax Reform /spending discussion

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Lithium381

Lifer
May 12, 2001
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Okay here goes I know we all have different ideas about taxes and revenue and how it's spent and all that and wanted to have a sounding board for a few ideas. That's why it's here in DC and not in P&N.

First off, let me say i'm still developing my pint of view on a lot of things so please be gentle. I'm going to lay out each sub-idea with a number, so if you reply, please reference and use that number in your reply so we can keep the subtopics separate.

1) I'd propose that congress doesn't get to vote on actual dollar amounts for the budget, they get to vote and decide on percentages. The percentage would be for the current(or subsequent) fiscal year and obviously couldn't exceed 100%. This would help us get back on board with out of control deficit spending. I suppose it doesn't matter if they vote per project or maybe just per department.

2) Stupidly simplify the federal personal income tax. No different categories for married/head of household/etc. You either earned money or you didn't. Make it a simple 10% from all sources derived. That's IT. No deductions, no games. Salary*.1 = your taxes. States are free to do their own thing still and give their citizens rebates for federal tax paid for people under the poverty line or something... But since everyone derives the same benefit from the federal government, it should be the same.
EDIT- i didn't make myself clear, this is a replacement for federal income tax, FICA, medicare, etc. Total federal revenue from income would be 10%

2a) Implement a federal sales tax of 1%. In state, intrastate, internet, whatever.

3) A lot of people don't like spending money because they feel it's wasted in the bureaucracy, or it goes to projects they think are pointless. If there were a way to have the citizens chose more directly where their tax dollars went I think people might feel better about contributing. We could find out which departments/projects the people really want or which ones are just pet projects of our politicians. Possibly a list of departments with checkboxes next to them of where they'd like to see their money go. Or just leave it blank and let congress decide. each citzen gets to choose where maybe 50% of the money goes and congress gets to decide the rest?


Take these ideas individual or together. I'm a self-described libertarian. I think taxes are theft. However, i do understand that we operate in a society and SOME revenue is required for the government to function. And while i'd love to see all "taxes"(government revenue) be voluntary, i'm trying to be realistic but move in that direction. This would obviously disrupt the federal budget and shrink it. The more local the government the better. Push the revenue to the states no the fed. Push the revenue to the counties, not the states. Push it to the localities so people can vote with their feet and we can experiment on a smaller scale.
 
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EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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To allow people to direct their taxes usage would be a disaster.

The government uses tax policy for social engineering.

A flat tax will have a higher impact on the low income.
 

Lithium381

Lifer
May 12, 2001
12,452
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To allow people to direct their taxes usage would be a disaster.
why?
The government uses tax policy for social engineering.
I think that's a bad thing, especially at the federal level. Was social engineering one of their enumerated powers? I know taxing in general was, to fund the State and such; but to manipulate behaviors through the tax code? Sounds seedy.
A flat tax will have a higher impact on the low income.

yes. which is why it would be up to the states to have something in place to mitigate that.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
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To allow people to direct their taxes usage would be a disaster.
why?
People most times will operate for their own self need; not for the general good. NIMBY syndrome.
The government uses tax policy for social engineering.
I think that's a bad thing, especially at the federal level. Was social engineering one of their enumerated powers? I know taxing in general was, to fund the State and such; but to manipulate behaviors through the tax code? Sounds seedy.
There is nothing wrong with a community pitching in to take care of people in need. When the government manipulates the system to do so; it also then encourages people to take advantage of such
A flat tax will have a higher impact on the low income.

yes. which is why it would be up to the states to have something in place to mitigate that.
Back to social engineering again. So the states say that below a certain income; you have no taxes owed. but the states themselves need a certain income from taxes to operate. For low income states; the two sides may not meet, let alone overlap..
See Bold responses
 

Lithium381

Lifer
May 12, 2001
12,452
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See Bold responses
Quote:
Originally Posted by Lithium381
Quote:
Originally Posted by EagleKeeper
To allow people to direct their taxes usage would be a disaster.

why?
People most times will operate for their own self need; not for the general good. NIMBY syndrome.

Isn't that how we do it now anyway? Attempting to vote for representatives? What do the representatives do? Certaintly not for the general good there. . . . i just think that people would feel less animosity towards paying taxes if they had more of a say how they're spent as opposed to a 1/400,000 vote for their guy in the house with 1/435 representation. . .
Quote:


The government uses tax policy for social engineering.
I think that's a bad thing, especially at the federal level. Was social engineering one of their enumerated powers? I know taxing in general was, to fund the State and such; but to manipulate behaviors through the tax code? Sounds seedy.
There is nothing wrong with a community pitching in to take care of people in need. When the government manipulates the system to do so; it also then encourages people to take advantage of such
. . . . not sure how this is relevant? just how much of the tax code is geared that way?

Quote:
A flat tax will have a higher impact on the low income.
yes. which is why it would be up to the states to have something in place to mitigate that.
Back to social engineering again. So the states say that below a certain income; you have no taxes owed. but the states themselves need a certain income from taxes to operate. For low income states; the two sides may not meet, let alone overlap..
then maybe the states are offering too many services and need to cut the budget?
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
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See Bold responses
Quote:
Originally Posted by Lithium381
Quote:
Originally Posted by EagleKeeper
To allow people to direct their taxes usage would be a disaster.

why?
People most times will operate for their own self need; not for the general good. NIMBY syndrome.

Isn't that how we do it now anyway? Attempting to vote for representatives? What do the representatives do? Certaintly not for the general good there. . . . i just think that people would feel less animosity towards paying taxes if they had more of a say how they're spent as opposed to a 1/400,000 vote for their guy in the house with 1/435 representation. . .
Quote:


The government uses tax policy for social engineering.
I think that's a bad thing, especially at the federal level. Was social engineering one of their enumerated powers? I know taxing in general was, to fund the State and such; but to manipulate behaviors through the tax code? Sounds seedy.
There is nothing wrong with a community pitching in to take care of people in need. When the government manipulates the system to do so; it also then encourages people to take advantage of such
. . . . not sure how this is relevant? just how much of the tax code is geared that way?

Quote:
A flat tax will have a higher impact on the low income.
yes. which is why it would be up to the states to have something in place to mitigate that.
Back to social engineering again. So the states say that below a certain income; you have no taxes owed. but the states themselves need a certain income from taxes to operate. For low income states; the two sides may not meet, let alone overlap..
then maybe the states are offering too many services and need to cut the budget?

Isn't that how we do it now anyway? Attempting to vote for representatives? What do the representatives do? Certaintly not for the general good there. . . . i just think that people would feel less animosity towards paying taxes if they had more of a say how they're spent as opposed to a 1/400,000 vote for their guy in the house with 1/435 representation. . .
Example:
Between WWI and WWII we were in the Great Depression. The war to end all wars had happened; Had people not forseen that new technology was needed; the Navy and Army Air Corp would not have been staffed and supporting new technology in ships and airplanes.

People would not have voted to pump $$ into nothing that was needed to combat a threat.


. . . . not sure how this is relevant? just how much of the tax code is geared that way?
Taxes go to fund the Dept of Education, HHS, Homeland Security.
For all three, given their bad publicity; people could request to not have their taxes go toward such groups. Yet within each Dept there are groups that are needed. OR would you expect that every item in the government budget be a line item veto on one's taxes.

then maybe the states are offering too many services and need to cut the budget?
People demand a certain level of services from their government and expect even more.
Example schools:
Buses uses to pick up students within a mile of their school. As expenses grew and no increase in budget, bus radius was increased to 2 miles. Now, some require students to pre-pay for the bus. As parents then deliver children to school; that increase the chance for an accident; it also increases congestion on the roads and air pollution.

Social policies - after school programs are being cut do to lack of supplies. Students are now being billed and/or asked to provide school supplies for the general classroom.
 

DaveSimmons

Elite Member
Aug 12, 2001
40,730
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There was a story on Fark last week about a guy getting a $20,000 fire fighting bill because he was too cheap to pay the $500 / year for fire insurance in his rural area.

There was a long thread in ATOT last year about firefighters in a unincorporated area letting a house burn down because the owner had not paid the $75 / year fee for fire services. There was a lot of outrage about how the firefighters should have done the work anyway and then billed him later or something.

It's human nature for people to not want to pay for things they don't think they need . . . until they need them.

People with average kids complain about money going to gifted and special ed. People complain about FEMA aid until there is a disaster in their area. Young healthy people roll the dice and skip paying for medical insurance then show up in the ER. On and on.

There is a lot of federal government "waste" that exists because neither the magic of the free market nor local government nor local charities can pick up the slack.

There is also a portion of federal government (the "oppressive regulations" part :) ) that exists to protect citizens from state government being too easily influenced by corporate donations. Left to themselves, many states might compromise clean air and water, worker safety, food safety, drug safety etc. to gain the tax dollars and donations from large corporations.

It's not perfect, but having senators and congressmen from 50 states deciding on clean water regulations works better than a state deciding for itself (and being allowed to pollute neighbor states).
 

ThinClient

Diamond Member
Jan 28, 2013
3,977
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I just don't want to live on this planet anymore. It seems like we can't ever come to an agreement. It seems like neither side wants to operate for the good of the people but instead operates out of their own greed or want. There's no other country in the world where it's better to live, so I just want to eject myself into space. This shit is ridiculous. Why can't our government pull their heads out of their asses and why does this crap keep getting worse? Why can't we stop policing the world? We would have MOUNTAINS OF CASH if we'd trim the military budget. If we'd close bases all over the world where we don't need to be (there are FOURTEEN BASES around the boarder of Iran alone!) we'd be flush with cash.

I know there will be knee-jerk reactions to the above paragraph, calling me a Paultard or whatever the fad insult is these days, but regardless of what political party you belong to, that should be a budget cut that we can all get behind. Well, all of us except the fear mongers.
 

DaveSimmons

Elite Member
Aug 12, 2001
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670
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Yes, I don't think we should be providing free security services to the rest of the world.

We need to be able to project force around the world to protect our citizens and to some extent our national interests but at this point we should be spending a lot less on stationing troops and maintaining bases.

There is also still a lot of waste spent on redundant bases in the US that are kept open as bribes to each states' congresscritters. That money could at least be spent on other pork like roads and bridges.
 

Lithium381

Lifer
May 12, 2001
12,452
2
0
To allow people to direct their taxes usage would be a disaster.

The government uses tax policy for social engineering.

A flat tax will have a higher impact on the low income.

Trying to get back to the original premise of the thread. . . .

Why should the government get to use tax policy for social engineering? We all live here and supposedly receive the same set of benefits, why not just pay the same amount? If you're gay, you don't get tax breaks for being married. If you are blind, you don't pay as much because they get a tax break. Why? Blind people don't receive the security that a national military provides? They don't receive the benefits that international treaties have resulted in?

And EVERYTHING has a higher impact on the low income. But as you make more, you pay more, since "you have benefited more from" [the benefits of taxation]. If someone has a low income because they're simply content with a low[er] standard of living but they're happy, do they not also receive the benefits of the nation?

We're also talking about simplifying the code here. Simple flat rate. That means no paying someone to do your taxes. That means 20 minutes to fill out your tax return. That means fewer IRS agents meaning lower annual expenditures.

If we truly do live in a society. . i just think EVERYONE needs to contribute. EVERYONE needs skin in the game.
 

sm625

Diamond Member
May 6, 2011
8,172
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2a) Govt has a spending problem not a revenue problem. So what purpose does another tax serve?
 

JTsyo

Lifer
Nov 18, 2007
11,817
952
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1. Revenue collected varies too much for percent to work. Budgets are made in dollars, converting it to percents would just add a layer that serves no purpose and might even hide the true cost.

2. The tax would have to be set to generate the current revenue. I don't think 10% would cut it. A flat tax hurts the lower end way more than the top end.

3. All the money would go to high profile departments (NASA, Dept Ed), the ones you don't even know about would be ignored. Each department needs what they budget to do their job, no sense in overpaying them and expecting more from them since you won't see good returns at those levels.
 

Lithium381

Lifer
May 12, 2001
12,452
2
0
2a) Govt has a spending problem not a revenue problem. So what purpose does another tax serve?
I agree, there is a large spending problem.
It was a possible attempt to somewhat offset point 2. 10% will hopefully be quite a bit lower than current levels, but its on income. Adding a 1% tax on consumption would balance it a bit better. I I'm just throwing it out there.
 

Lithium381

Lifer
May 12, 2001
12,452
2
0
1. Revenue collected varies too much for percent to work. Budgets are made in dollars, converting it to percents would just add a layer that serves no purpose and might even hide the true cost.

2. The tax would have to be set to generate the current revenue. I don't think 10% would cut it. A flat tax hurts the lower end way more than the top end.

3. All the money would go to high profile departments (NASA, Dept Ed), the ones you don't even know about would be ignored. Each department needs what they budget to do their job, no sense in overpaying them and expecting more from them since you won't see good returns at those levels.

1)It varies and isnt very predictable because its so complex. The budget itself wouldnt be in percentages just the allocation. If we cillected 10 trillion in taxes and they decided that the defense department gets 23% of it then the DD gets 2.3 trillion. After that its the same as now, they have to work within their budget. Having it expressed as a percentage can guarantee it doesnt exceed 100% so no deficit spending.
2) why? Current revenue is already too high and they spend even more! Yes.
3) true... hmm maybe 50% chosen allocation? I was just thinking people would be less unhappy paying taxes if they had a say.... a more direct say in where it's spent.
 

SMOGZINN

Lifer
Jun 17, 2005
14,221
4,452
136
1) I'd propose that congress doesn't get to vote on actual dollar amounts for the budget, they get to vote and decide on percentages. The percentage would be for the current(or subsequent) fiscal year and obviously couldn't exceed 100%. This would help us get back on board with out of control deficit spending. I suppose it doesn't matter if they vote per project or maybe just per department.

This isn't needed. We just need to pass a bill that says we have to have a yearly budget and that budget can't exceed income. Then let them put the dollars where they may.
The percent system you are proposing would quickly lead to important agencies being underfunded when their percentage does not equal enough money to preform essential duties. Underfunding the Federal Aviation Administration is a lot different then underfunding the Federal Forestry Service.

2) Make it a simple 10% from all sources derived. That's IT. No deductions, no games. Salary*.1 = your taxes. States are free to do their own thing still and give their citizens rebates for federal tax paid for people under the poverty line or something... But since everyone derives the same benefit from the federal government, it should be the same.

This sort of flat tax is very hard on the poor. They end up giving up a lot more of their lifestyle then the wealthy. A hundred thousand dollars will not drastically affect the life of a millionaire, but $1000 is literally the different between eating tonight and going hungry to someone that only makes $10k.

So, you then say that the states can make up the difference. So your goal is to transfer money away from the states and give it to the federal government? That is the outcome of this.

2a) Implement a federal sales tax of 1%. In state, intrastate, internet, whatever.

There are arguments for a federal sales tax, but none of them fit what you are wanting to do.
Once again sales taxes are really hard on the poor, who have to spend all of their money to live, as opposed to the wealthy who put a lot of their money into financial systems that would get around sales tax. So, in this system a poor family pays an additional 1% tax on 100% of their income, while a very wealthy family may only get taxed 1% on 2-3% of their income.

Also, to create a federal sales tax will require the creation of a new bureaucracy to handle that tax and I&#8217;m under the impression that you want to reduce government not grow it.


3)If there were a way to have the citizens chose more directly where their tax dollars went I think people might feel better about contributing. We could find out which departments/projects the people really want or which ones are just pet projects of our politicians.

This would only work for well educated populations. Our population is particularly poorly educated in what their government does. For example, there is a agency called the 'Institute of Peace'. Are they important? What do they do? How about the Veterans Benefits Administration are they more or less important then the Veterans Affairs Department? Does the Grain Inspection, Packers and Stockyards Administration do anything the Food Safety and Inspection Service does not?
 
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Lithium381

Lifer
May 12, 2001
12,452
2
0
This isn't needed. We just need to pass a bill that says we have to have a yearly budget and that budget can't exceed income. Then let them put the dollars where they may.
The percent system you are proposing would quickly lead to important agencies being underfunded when their percentage does not equal enough money to preform essential duties. Underfunding the Federal Aviation Administration is a lot different then underfunding the Federal Forestry Service.
How would it lead to agencies being underfunded? It's not just setting the percentages and leaving them. They'd be able to adjust them annually. It was an attempt to limit the spending to 100% of revenues.
This sort of flat tax is very hard on the poor. They end up giving up a lot more of their lifestyle then the wealthy. A hundred thousand dollars will not drastically affect the life of a millionaire, but $1000 is literally the different between eating tonight and going hungry to someone that only makes $10k.

So, you then say that the states can make up the difference. So your goal is to transfer money away from the states and give it to the federal government? That is the outcome of this.
The goal would be to simplify the personal income tax. And hopefully in the proccess reduce the federal revenue, as it's bloated as it is now. Everyone benefits from the services provided by the federal government, right? some more than others. but everyone benefits. I suppose I didn't make myself clear in the OP, and you guys can't read my mind. . . but the 10% would be the ENTIRE revenue the Fed gets from a worker. That's taking the current 7.65% paid by the employee for FICA and medicare(combined) out of play. So it's not 7.65 + 10%. . . . it's just 10% so in this case an increase of 2.35% to the employee.
if the states choose to not tax a particular income level, then that would be left to them to decide. But a simple flat rate would serve the federal government. (there are scary implications in this though such as the fed trying to push for a much higher minimum wage to inflate their own budget!)
There are arguments for a federal sales tax, but none of them fit what you are wanting to do.
Once again sales taxes are really hard on the poor, who have to spend all of their money to live, as opposed to the wealthy who put a lot of their money into financial systems that would get around sales tax. So, in this system a poor family pays an additional 1% tax on 100% of their income, while a very wealthy family may only get taxed 1% on 2-3% of their income.
The 1% could have similar exemptions as state sales taxes have. grocery items, for example aren't taxed. "fit what you are wanting to do" is to have a reduced, simplified income tax, and part of the revenue lost can be captured by a consumption tax.
Also, to create a federal sales tax will require the creation of a new bureaucracy to handle that tax and I’m under the impression that you want to reduce government not grow it.
a new bureaucracy? with the implemtation of the simplified personal income tax, those IRS agents will have lots of free time. "dear mr retailer, please send us 1% thanks." While i want to reduce the government, the suggestion in point 2 would undoubtedly(hopefully!) reduce the federal revenue. this in conjunction with the income tax would smooth out revenue. both on the income and consumption side.
This would only work for well educated populations. Our population is particularly poorly educated in what their government does. For example, there is a agency called the 'Institute of Peace'. Are they important? What do they do? How about the Veterans Benefits Administration are they more or less important then the Veterans Affairs Department? Does the Grain Inspection, Packers and Stockyards Administration do anything the Food Safety and Inspection Service does not?
why is the government so complex!!!! why do we have redundant agencies? anyway, there are only 15 departments. . . do it that way and not worry about the individual sub-agencies.
 
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