A sensible tax policy

[IcarusAngel]

In economics, there is a principles called utility theory. That is to say, the greater a man's income the smaller is the marginal benefit of his dollar. The billionth dollar spent by the rich man brings a smaller marginal benefit to that person than the hundredth dollar spend by the poor person. In other words the dollar is more important to the poor person.

With this is mind, I think we should design a tax system that increases by 5% once it starts as your income increases incrementally. For example, Under 10,000 is 0%. Next 15,000 earned is .10 percent. Next 20,000 is .15%. Next 40,000 is .20%, and so on.

Here's a simple python run down of the above tax rates:




print "Simple income tax calculator."
amount = float(raw_input("Enter your annual income: "))

if amount <= 10000:
rate = 0
elif amount <= 25000:
subtotal = amount - 10000
rate = 0 + (subtotal) * .10
elif amount <= 45000:
subtotal = amount - 10000 - 15000
rate = 0 + (10000 * .10) + (subtotal * .15)
elif amount <= 85000:
subtotal = amount - 10000 - 15000 - 20000
rate = 0 + (10000 * .10) + (15000 * .15) + (subtotal * .20)
elif amount > 85000:
subtotal = amount - 10000 - 15000 - 20000 - 40000
rate = 0 + (10000 * .10) + (15000 * .15) + (20000 * .20) + (subtotal * .25)
print rate

The beauty of this system is its flexibility. You could continually up the tax rate for the next 60000, and the next 80000, so as to increase more revenue as is needed. You could make the gaps larger while remaining under say 40,000 with small increases, and then up the increases once you pass 40,000 while making the gaps smaller. Or you could go vice versa. Or, you could even start to decrease the tax rate, making it a "Libertarian" kind of tax (but still the person would pay more in taxes overall, it would just be regressive).

Such a system is simple, and yet can be modified in far more ways than a fair tax.

Unfortunately, most tax reformers want to move the US tax code to regressive taxation. One such example is the fair tax, which taxes consumption while eliminating payroll and income taxes. They claim the tax is 23%, but they are being dishonest from the get go:

"But that calculation appears, impressively, to be both wrong and misleading. When most of us hear 23 percent taxation, we imagine paying a dollar and then being asked for 23 additional pennies, for a total of $1.23. Not the FairTaxers. They run their calculations as "tax inclusive," which means they include the total tax in our hypothetical dollar. So they imagine the item costs 77 cents, then the shopkeep adds in their 23 cents of taxation, and then you divide that total dollar -- which includes the added tax -- by the tax rate, to get your 23 percent."
http://www.prospect.org/cs/articles?article=huckabees_magic_fair_tax
http://www.factcheck.org/taxes/unspinning_the_fairtax.html

Typical Libertarian math. If you purchase an item for a hundred dollars, it'll come to 130 at the checkstand. So, 23% of 130.00 = 29.9. But 30% of 100 is 30, which is the increase that you're paying. The wrong part is that it assumes shopkeepers and businessmen will accurately report their taxes in the first place.

There's also a "Flat Tax," which is even more regressive. At least the fair tax would benefit the extremely poor, and also the extreme rich, and it soaks the middleclass.
This is because rich person in the fair tax is defined as someone who makes 74,000 or greater. When 1% of the population owns a fifth of the wealth, this is clearly a regressive tax.

[danyboy27]

In economics, there is a principles called utility theory. That is to say, the greater a man's income the smaller is the marginal benefit of his dollar. The billionth dollar spent by the rich man brings a smaller marginal benefit to that person than the hundredth dollar spend by the poor person. In other words the dollar is more important to the poor person.

With this is mind, I think we should design a tax system that increases by 5% once it starts as your income increases incrementally. For example, Under 10,000 is 0%. Next 15,000 earned is .10 percent. Next 20,000 is .15%. Next 40,000 is .20%, and so on.

Here's a simple python run down of the above tax rates:




print "Simple income tax calculator."
amount = float(raw_input("Enter your annual income: "))

if amount <= 10000:
rate = 0
elif amount <= 25000:
subtotal = amount - 10000
rate = 0 + (subtotal) * .10
elif amount <= 45000:
subtotal = amount - 10000 - 15000
rate = 0 + (10000 * .10) + (subtotal * .15)
elif amount <= 85000:
subtotal = amount - 10000 - 15000 - 20000
rate = 0 + (10000 * .10) + (15000 * .15) + (subtotal * .20)
elif amount > 85000:
subtotal = amount - 10000 - 15000 - 20000 - 40000
rate = 0 + (10000 * .10) + (15000 * .15) + (20000 * .20) + (subtotal * .25)
print rateThe beauty of this system is its flexibility. You could continually up the tax rate for the next 60000, and the next 80000, so as to increase more revenue as is needed. You could make the gaps larger while remaining under say 40,000 with small increases, and then up the increases once you pass 40,000 while making the gaps smaller. Or you could go vice versa. Or, you could even start to decrease the tax rate, making it a "Libertarian" kind of tax (but still the person would pay more in taxes overall, it would just be regressive).

Such a system is simple, and yet can be modified in far more ways than a fair tax.

Unfortunately, most tax reformers want to move the US tax code to regressive taxation. One such example is the fair tax, which taxes consumption while eliminating payroll and income taxes. They claim the tax is 23%, but they are being dishonest from the get go:

"But that calculation appears, impressively, to be both wrong and misleading. When most of us hear 23 percent taxation, we imagine paying a dollar and then being asked for 23 additional pennies, for a total of $1.23. Not the FairTaxers. They run their calculations as "tax inclusive," which means they include the total tax in our hypothetical dollar. So they imagine the item costs 77 cents, then the shopkeep adds in their 23 cents of taxation, and then you divide that total dollar -- which includes the added tax -- by the tax rate, to get your 23 percent."
http://www.prospect.org/cs/articles?article=huckabees_magic_fair_tax
http://www.factcheck.org/taxes/unspinning_the_fairtax.html

Typical Libertarian math. If you purchase an item for a hundred dollars, it'll come to 130 at the checkstand. So, 23% of 130.00 = 29.9. But 30% of 100 is 30, which is the increase that you're paying. The wrong part is that it assumes shopkeepers and businessmen will accurately report their taxes in the first place.

There's also a "Flat Tax," which is even more regressive. At least the fair tax would benefit the extremely poor, and also the extreme rich, and it soaks the middleclass.
This is because rich person in the fair tax is defined as someone who makes 74,000 or greater. When 1% of the population owns a fifth of the wealth, this is clearly a regressive tax.

this system is partially implented in canada, or at least in quebec, the more you earn, the more you are taxed.
the day my revenue will excede 15 buck an hour i will pay taxes, below that level i receive money. right now, since i am in the level of povrety according to the revenues chart, i will receive around 1500 in a fews month, beccuse according to the chart, i am poor and i got a lot of useless deductions.

[Bud Struggle]

That's workable. Though I wouldn't tax below 50g.

The flat tax is a fair way to starve poor people to death. Tax need to be progressive.

[NecroCommie]

Your system is called progressive taxation. It is highly implemented in every nordic country, although conservatist governments have done a good job tearing it down. Progressive taxation is listed in the communist manifesto as one main character of socialist society, and I agree completely. Here in Finland we almost abolished poverty by implementing a very strongly progressive taxation in the late 80s.

The beauty of the system is that it drastically lowers the gap between the rich and the poor.

wikipedia has an article on the subject but I cannot link anything yet.

It seems you came to the same conclusion that Marx, and all on your own?

[apathy maybe]

http://en.wikipedia.org/wiki/Progressive_tax

It isn't a new idea, and if you want a reform, it isn't a bad one.

However, so far as it goes, there are other things I would reform first. Perhaps releasing all non-violent "criminals" from jail? Removing the prohibition on drugs? Eliminating corporations (if the company goes bankrupt, you lose everything above a certain amount, or something like that)?

Removing most legal avenues for fictitious trade (that is trade that has no real basis in the real world, for example, money markets, stock markets, and certain other things)? Eliminating the legality of charging interest and rent, and then make squatters laws very very favourable to squatters (assuming that the land/house isn't being used)?

There are lots of options, but, man, I want a revolution!

[TheCultofAbeLincoln]

I couldn't agree with you more IA. Unfortunately, we've had some real rich scum writing the tax laws recently, and thank god they're gone! Of course, it's still rich scum but at least these cater to poorer folk. What we need is Left-Democrats.

[danyboy27]

please everyone, Tomk and ABE said something that goes in your way of thinking, and i think its worth celebrating.

TOMK NO1 commie of the day!

[TheCultofAbeLincoln]

Jacob,

First, let me say that was a great, insightful read.

I like the idea of a land tax which doesn't measure what's been done on the land. It would force speculators out of the market and reward people who develop their land's productivity, as opposed to a property tax which punishes people who increase the 'worth' of their land. I think both should be used in conjunction with one another, with the exception of primary residences w/value up to $100k or so.

That said, we need to do more to conserve land for park use as it is and that would have to be doubled with any stimulus for development.

Despite this short response, let me say again that was a well written and thought provoking piece. You nailed it, however, one concern I may have is it'll reward those who use their land to maximize profit. For example, soy bean farmers and cattle ranchers would pay the same rate (if they are adjacent), despite the fact that the soy is, overall, a much more efficient producer. Though that is a small concern and is bound to happen with any tax under the capitalist system.

[Die Neue Zeit]

I apologize for the late coming, but why should property tax regimes continue? [I realize the concern you raised at the end, but there are other means to apply the maximized profit to public purposes, such as inheritance "taxation."]

[RGacky3]

I personally think that radical workers should'nt be bothering themselves with changing tax policy, getting government reforms or whatever, raising the minimum wage.

Workers should'nt be begging the state to 'give' them stuff, they should be taking it, from the Capitalists. Instead of fighting for a progressive tax, fight the Capitalists for more wages, more benefits. Instead of fighting for a higher minimum wage make your own minimum wage fight for that. Trying to win over the State to the workers side is a waste of time, if workers fight the Capitalists, the State will try and even the playing field, to keep it safe.

Solidarity is the answer, not begging the government.

[NecroCommie]

http://www.youtube.com/watch?v=lrVVQtU8Lug

[danyboy27]

I personally think that radical workers should'nt be bothering themselves with changing tax policy, getting government reforms or whatever, raising the minimum wage.

Workers should'nt be begging the state to 'give' them stuff, they should be taking it, from the Capitalists. Instead of fighting for a progressive tax, fight the Capitalists for more wages, more benefits. Instead of fighting for a higher minimum wage make your own minimum wage fight for that. Trying to win over the State to the workers side is a waste of time, if workers fight the Capitalists, the State will try and even the playing field, to keep it safe.

Solidarity is the answer, not begging the government.

i like that, but would it be possible without threatening the capitalist system?

if we dont go for armed resistance or total revolution, how this would be possible without having the bosses being threatened by that?

if tomorow i create a shitstorm at my job, we gonna get all fired, they gonna hire new person, all that in about a week, i dont know much place where its not the case, except for people with high studies, a lot of worker rely on their professional experiences to go on, and with 1 single shitstorm like that, i would be totally blacklisted for several year, condemned to look for really shitty burger king job or other low profile. for us, manual worker, its all about good term with our bosses, when we got experience, we move to another buisness, send references of the former place, get a higher wage for experience and references. you cant jus threaten them like that, unless you plan to do a total takeover of the system, and i dont think we are ready for that.

[RGacky3]

i like that, but would it be possible without threatening the capitalist system?

if we dont go for armed resistance or total revolution, how this would be possible without having the bosses being threatened by that?

Of coarse it will threaten the Capitalist system, and of coarse it will freak out the bosses. Why is that a Bad thing. I doubt it will turn violent until things get really bad for the bosses. Because until then the bosses are worried more about short term profit. Look at labor history and you'll see how it works :P.


if tomorow i create a shitstorm at my job, we gonna get all fired, they gonna hire new person, all that in about a week, i dont know much place where its not the case, except for people with high studies, a lot of worker rely on their professional experiences to go on, and with 1 single shitstorm like that, i would be totally blacklisted for several year, condemned to look for really shitty burger king job or other low profile. for us, manual worker, its all about good term with our bosses, when we got experience, we move to another buisness, send references of the former place, get a higher wage for experience and references. you cant jus threaten them like that, unless you plan to do a total takeover of the system, and i dont think we are ready for that.

Thats why your not a revolutionary :). You need a little bit of pride and valor.

[IcarusAngel]

I don't see why anybody would want to bargin with the bosses. I think the capitalist system should be destroyed immediately.

Of course, the problem with capitalism is a problem with government to begin with. If the bosses get overthrown tomorrow, new ones would take their place immediately. The system is structured that way. What needs to happen is an elimination of the entire capitalist system, which of course includes the government.

Workers aren't going to be interested in "revolution" if they are in jail because of drug charges, spending their time figuring out their tax policy or how they are going to make their next health care payment.

Slavery didn't end because of a confrontation with the bosses, it was a rearrangement of the structure of the system.

[danyboy27]

Thats why your not a revolutionary :). You need a little bit of pride and valor.

without being mean in any way, if you are such an hardcore revolutionarry, how do you pay your bill/get food for your living?

[RGacky3]

without being mean in any way, if you are such an hardcore revolutionarry, how do you pay your bill/get food for your living?

I work, I'm not such a hardcore revolutoinary, but I at least stand by my workmates in a dispute with the bosses and stand up to the boss if need be, and try and organize. I've suffered what you've talked about to a small degree for organizing. Not near what others have suffered, but you need a little bit of balls to be a worker with dignity.


I don't see why anybody would want to bargin with the bosses. I think the capitalist system should be destroyed immediately.

Of course, the problem with capitalism is a problem with government to begin with. If the bosses get overthrown tomorrow, new ones would take their place immediately. The system is structured that way. What needs to happen is an elimination of the entire capitalist system, which of course includes the government.

Its not gonna be destroyed "immediately" without creating a new ruling class, it has to be done organizing workers.

[danyboy27]

I work, I'm not such a hardcore revolutoinary, but I at least stand by my workmates in a dispute with the bosses and stand up to the boss if need be, and try and organize. I've suffered what you've talked about to a small degree for organizing. Not near what others have suffered, but you need a little bit of balls to be a worker with dignity.

its good, we are basicly doing the same thing basicly. i recently stand by my comrades with a DISCUSSION with a boss, wich ended up with a reduction of work on their shoulder.

its cool, you are not one of those people who call themselves hardcore revolutionary and dont work beccause they say they beat the system.

[TheCultofAbeLincoln]

I apologize for the late coming, but why should property tax regimes continue?

Because I live near suburban palaces and I think people should have to pay if they have all that land, and house, with no contribution to society outside of their own comfort. Farmers, Ranchers, and others who actually use the land would be exempt (as many are in my state, for instance).