[IamIan]

Originally Posted by PhantomPholly

Your key point, however, is taken - "WE DON'T KNOW."...

That was half of my key point ... the other half is that we do know some things ... we know more than some people might like ... and we know less than others might like.

Or I guess another way to say it is ... It is usually wise to keep the limits , upper and lower limits , of ones knowledge in perspective when making some type of claim.

Originally Posted by PhantomPholly

and those on "either side," as you put it, are those who are either demanding that change will be catastrophic or there will be no change at all - all but drowning out the voices of us in the middle who say, "don't pass stupid government regulations when you don't even know what the problem is."

I don't personally mind individual people investing in anything they like with their own money ... be it NFL tickets , Movies, or whatever they want to spend it on.

But when society as a whole makes choices about spending resources , that is always more complicated ... any possible choice the society as a whole makes is bound to have some people against it ... pretty much no matter what it is ... So it is always a bit of a battle between different people pulling in different directions... because society as a whole is not just one person.

That isn't to say that societies shouldn't make any choices or use any resources just because there will pretty much always be someone in that society against it ... societies need to make choices and spend resources in order to function ... but it is always a tricky / difficult thing.

- - - - -

And as you suggested ... I don't like either extreme ... ideally I prefer people to be able to engage in a more open civil dialogue without getting defensive , hostile, or rude with each other ... but , that isn't always possible ... and even when it is , people will still sometimes just disagree.

- - - - - -

More Specifically on the issue of Climate Change and government action ... There are some things I think are reasonable steps to take.

But I also do not think it is the government's job to do everything for us ... 'big brother' ... and I think some well intentioned people ... with nothing but the best of intentions ... can sometimes go too far to the extreme ... either extreme.

Even those things we might agree in general are good for society to take action on ... discouraging murder for example ... different people can very much disagree on the specific details of how to go about that social task.

[PhantomPholly]

Originally Posted by IamIan

But I also do not think it is the government's job to do everything for us ... 'big brother' ... and I think some well intentioned people ... with nothing but the best of intentions ... can sometimes go too far to the extreme ... either extreme.

Well, government world-wide including the U.S. accounts for around 50% of world GDP now. Extreme has come and gone, and is apparently the new normal.

[IamIan]

Originally Posted by PhantomPholly

Well, government world-wide including the U.S. accounts for around 50% of world GDP now. Extreme has come and gone, and is apparently the new normal.

That's an interesting statistic ... where did you get that kind of statistic from?

[PhantomPholly]

Originally Posted by IamIan

That's an interesting statistic ... where did you get that kind of statistic from?

Governments do not exactly publish that information; however, you can deduce it from a number of sources if you are willing to do the work. I understand it (and have for several years) because I have been active in supporting a different tax plan in the U.S. called the FairTax, which calls for eliminating virtually all Federal taxes and replacing it with a straight sales tax. Government hates this idea because it makes all of their taxation visible, which in turn makes it impossible to lie about tax levels.

Anyway, the way to the understanding is to look at the big numbers and then carve out some things that government wants to hide from you.

The first thing you need to understand when uncovering the layers of deception that governments have put down to hide the truth is that "taxation" is not simply the dollars you pay to tax collectors. Instead, think of "taxation" as being the sum of all of the purchasing power you LOSE plus the mandatory hours of your life you must GIVE UP as a result of government activities. Once you understand that government is a "drag" or "handicap" on your ability to prosper, it becomes clearer.

And of course, some people are net beneficiaries of government; they of course all cheer for new taxes.

So some examples of things that are taxes. This is not to judge the "goodness or badness" of the load imposed - you know my views on that pretty well already - but simply facts. You cannot judge reality fairly if you are unwilling to look at "what is" and face it instead of pretending it doesn't exist.

First - Tax Compliance Costs. If the purpose of taxation is simply to collect revenues, we have perhaps contrived the most inefficient system in history. Direct costs of tax compliance can be calculated quite accurately, and in our country the Income Tax alone imposes direct costs of nearly 5% of GDP. That means that every good and service sold in the United States costs 5% more than it would in a "costless" tax system, and so you have a hidden 5% reduction in your purchasing power. Direct costs include the salaries for IRS employees and affiliated auditors, etc., as well as the money for lawyers and accountants to perform the paperwork and payments necessary for businesses and individuals to keep out of jail.

However, DIRECT costs are not the whole story. There are, additionally indirect costs associated with the Income Tax, capital gains, etc. Those include the cost of business decisions made in the name of avoiding excessive taxation. The most radical left wingers will tell you there is no such thing; most other economists will tell you that businesses suffer about another 5% reduction in profitability because businesses make short term decisions to avoid tax liability that hurt their long term business. The other big indirect cost is the employers portion of employment taxes. Like direct compliance costs, these go straight to the selling price and make our goods and services an additional 5% less competitive as compared to imports which do not have the same costs. The third major indirect cost is business regulations. Right or wrong, our regulatory environment is more expensive to comply with than any other country on earth. Just for grins, lets say that that's another 5% penalty to the prices of goods and services, further making us less competitive with global trade. These are the sorts of things that drive business off shore, and the trade imbalance has a further degrading influence on our GDP. The more competitive foreign goods are, the more it hurts our balance of trade - and that reduces purchasing power further on a national level (although that does not necessarily act as part of the 50% + global level of taxation).

In general, embedded taxes are the worst for business (and the best for government, giving the ability to lie to your face and tell you taxes are not really as high as you know they are).

In addition to the fact that we have all of these hidden taxes, there is another. When governments spend more than they take in in taxes (almost universally true now), they do one of two things (and usually both). They either borrow more money, or print more money. When borrowing money, the money is repaid with interest. That means that anything Government buys with that money costs more than sticker price - an additional tax to you, the citizen. That interest money is paid to a very small group of individuals or countries, and so helps exaggerate the class differences globally - our Founding Fathers understood this scam well, and in their day most people understood that to be "indebted" to another was simply a form of slavery. In any event, government debt reduces your FUTURE purchasing power because it is a certainty that it will cause future taxes to be higher than otherwise necessary.

Printing money, on the other hand, has its own wonderful side effects. It causes inflation, which reduces your purchasing power. In extreme cases it causes economic collapse - something we may all get to experience soon.

When you consider all of the factors that reduce our purchasing power, including the fact that high levels of government spending reduce "normal" profitability so much that it destroys employment levels, you will understand that the sum of our handicap is far greater than 50%.

But don't believe me - go figure it out. Add up all government spending (not taxes); add up all compliance costs; add up the penalties to business caused by government inefficiency and interference. When you add it all together you will realize that, absent our monstrous governments (which dwarf all other organized crime) most normal, healthy people could work hard and save enough to retire by 50.

[IamIan]

Originally Posted by PhantomPholly

The first thing you need to understand when uncovering the layers of deception that governments have put down to hide the truth is that "taxation" is not simply the dollars you pay to tax collectors. Instead, think of "taxation" as being the sum of all of the purchasing power you LOSE plus the mandatory hours of your life you must GIVE UP as a result of government activities. Once you understand that government is a "drag" or "handicap" on your ability to prosper, it becomes clearer.

Government is not a one sided effect.
You described several aspects of the drag ... If you are going out to this much broader view ... Where and how do you then compensate for the benefits?

Originally Posted by PhantomPholly

When you consider all of the factors that reduce our purchasing power, including the fact that high levels of government spending reduce "normal" profitability so much that it destroys employment levels, you will understand that the sum of our handicap is far greater than 50%.

But don't believe me - go figure it out. Add up all government spending (not taxes); add up all compliance costs; add up the penalties to business caused by government inefficiency and interference. When you add it all together you will realize that, absent our monstrous governments (which dwarf all other organized crime) most normal, healthy people could work hard and save enough to retire by 50.

You mentioned several times about effects on business and then conclude in the end a impact on people ... I'm not so sure changes that benefit businesses always equally benefit people.

I'm sure not all system designs and structures will benefit everyone equally ... If we are to design a system ... I think we should honestly look at who we want the primary beneficiary of that design to be.

I do agree with the concept of the more open tax rate ... as a general concept ... I am not sold on any one direction / form as of yet ... I see some different pros and cons to different forms of it ... be it a single sales tax as you described ... or a single income tax as others have described... or some hybrids others describe.

One of the potentially larger cons I see , that would have to be dealt with for a society to enact the only a sales tax idea is that :
A person or company earning income in country A that has no income tax ( only sales tax ) ... and then spends it buying goods and services in country B ... That person or company is effectively benefiting from all the government services in country A that others in Country A are paying for ... but they are not themselves paying their fair share for.

Perhaps not a deal breaker in itself ... that system system has other pros and other types of systems have their own fair share of cons ... but that is something I see as a significant Con of that sales tax only style system.

[Duncan]

The only problem with Phantom's vision is we have examples - Somalia anybody?

People exist in society -

Without our society we are much less

The anthropological term for a single human being in the wild is
- Cat Food -

[Salty9]

Originally Posted by Duncan

The only problem with Phantom's vision is we have examples - Somalia anybody?

People exist in society -

Without our society we are much less

The anthropological term for a single human being in the wild is
- Cat Food -

[Duncan]

Originally Posted by Salty9

Hi Salty

Phantom believes that all government is totally useless -

he does not understand that without a society humans are defenseless spare parts

Ever since the stone age (or before) people have existed as part of a tribe or society

Even back then there were trading paths so that individual tribes had acces to resources from hundreds of miles away

We now exist as lords of creation as a society - without that society we are "cat food" (as we were before we became cat hunters)

Government is the construct that keeps our society together - take it away and you get Somalia

YES - it costs money, roads, water, education, law - all cost money
And you can argue about how much - but without it we would have nothing

[Salty9]

Duncan,

We are seeing the results of this devolution in a neighboring county. They failed to pass a tax levy and are essentially disbanding the sheriff's office. The NRA are cheering. I don't go there.

Chuck

[PhantomPholly]

Originally Posted by IamIan

Government is not a one sided effect.
You described several aspects of the drag ... If you are going out to this much broader view ... Where and how do you then compensate for the benefits?

Government does not add any value to any process. Therefore, the best possible outcome to government provided services is that they cost "only a little more" than if the government were not involved.

You also have to step back and accept that there is a fundamental difference between services provided to a person who is financially self-sufficient and services provided to "beneficiaries." (I'll refrain from incendiary words.. ) While you might receive 90 cents on your dollar in terms of services you receive if you are a net supporter of the system, the flip side is that if you ARE one of the productive you are supporting 5 - repeat 5 - other people for those services. So the theory that you "get it back" is statistically absurd.

You mentioned several times about effects on business and then conclude in the end a impact on people ... I'm not so sure changes that benefit businesses always equally benefit people.

Profitable businesses hire people. Unprofitable businesses do not. Anything that adds to the cost of a delivered product or service must be added to the price or that product / service becomes unprofitable. The more "load" there is on the business, the less likely it is to be profitable - and the fewer people it employs. Statistically, each government job comes at the expense of anywhere between one (if you are an economic rabid liberal) and five (if you are an economic rabid anarchist) private sector jobs. The truth, of course, lies somewhere in between - but it is at least more than 1. Regulations are pure drag, adding no government jobs but reducing profitability - causing some businesses to shed labor and others to fold completely.

Just remember: TANSSAAFL. (There ain't no such thing as a free lunch).

I'm sure not all system designs and structures will benefit everyone equally ...

True, but there is a fundamental question of whether or not that is even a desirable goal for government to interfere in. If you really want "equality," you have to treat everyone the same - meaning if you give to one you must give to all (obviously impossible, someone somewhere has to do actual work). Giving money to those who are, for whatever reason, not fiscally responsible is inherently corrupt; if the goal were to have equal people, wouldn't it be better to have a program ensuring everyone has the same genes? (Note: Being purposely provocative to promote thought).

America was founded on the principles of Freedom - free people from oppressive taxation and give them equal opportunity (and note that the Boston Tea Party was about a 3% tax on tea). Money is an exchange medium for labor - and if our real tax rate is over 50% then what that means is that freedom left the station 100 years ago.

If we are to design a system ... I think we should honestly look at who we want the primary beneficiary of that design to be.

If you design a system with the goal of picking winners and losers, you are a totalitarian and, quite frankly, I would not help you if you were bleeding on the side of the road. Unless it was to back up and finish the job....

Government is force. The idea of the Rule of Law was to prevent government from picking winners and losers. All people were to be treated equally under the law. Instead, now we have laws specifying exactly who may or may not do what to whom based on race, sex, religion - we have codified racism and sexism into our very laws.

If you want a better system, start with the underlying principles of America's Constitution. They were brilliant men, but no one had ever tried that particular experiment and so they made the mistake of trying to express principles through rules. Every 5 year old knows "rules can be changed or broken."

I do agree with the concept of the more open tax rate ... as a general concept ... I am not sold on any one direction / form as of yet ... I see some different pros and cons to different forms of it ... be it a single sales tax as you described ... or a single income tax as others have described... or some hybrids others describe.

The advantage of doing some kind of sales tax rather than our current system are numerous. I won't say that the FairTax is the be-all end-all, and in fact I see two problems with it, but it is a million times better than what we have.

To understand why it is better not just as a tax system, but for We the People, you must understand why Marx wanted an Income Tax. It is not about collecting necessary revenues. It is about CONTROL - which is antithetical to the principles our country was founded upon.

Do you know which of the many intelligence gathering agencies in the United States is the largest? CIA? NSA? FBI? If you guessed one of those, you would be wrong. The largest intelligence gathering agency in the United States is the IRS. It's stated purpose is to collect tax revenues; however, its real purpose is an excuse for the government to demand every piece of personal financial information from every business and individual in the land worth more than a few pennies. They then use that information to create sound-bytes to divide us, saying, "20% of Americans are POOR!!!!!" It is utter B.S., of course - "poverty" is far and away simply an age thing. 90% of people in the bottom 10% of income earners today will, later in their lives, be in the top 10% of income earners. If you wanted a system to collect revenues efficiently, it is hard to imagine a worse system - even official figures say that it costs twenty five cents for each dollar they manage to collect.

So, the benefits of a flat rate Sales Tax vs. Income Tax, Employment Taxes, what have you:

• Requires no personal information - from anyone.
• Costs less than 10% (direct costs) to collect the same revenues
• Eliminates most of the indirect costs of tax collection
• Provides a level playing field for domestic goods (today burdened with all of those embedded costs and taxes) and foreign goods (free to be sold without the burden of our tax system to our citizens)
• Makes our goods and services more competitive abroad (again, not pre-loaded with taxes)
• Makes our labor more competitive internationally, drawing international investment into our economy
• Makes America a tax haven for the estimated $30 trillion in assets that have been secretly, and not so secretly, taken abroad due to our punative tax rates
• Treats everyone the same in the market place - no playing favorites (Congress might actually have to work on solving some problems if they aren't busy granting tax favors to cronies)
• The entire level of direct taxation is visible to every American every day, enabling us to effectively combat "requests" from Congress to "raise the rate" (because they can no longer play us against each other, saying "we're only going to take it from the RICH!!!")
• People would no longer be punished for a few brief years of success (most people only make a LOT of money for a few years, and much of it is taken away in taxes). Instead, people would be rewarded for saving (no capital gains, no taxes paid until you purchase new goods and services).

Those are just a few of the more salient reasons. If, as a society, we truly believe that there should be a special tax on the rich - THEN MAKE ONE. Stop trying to have 70,000 pages of indecipherable rules that no one, not even the head of the IRS, understands. But if you do that, realize that everyone approaching whatever is defined as "rich" will want to leave the country just before reaching that threshold - a stupid way to run a country.

One of the potentially larger cons I see , that would have to be dealt with for a society to enact the only a sales tax idea is that :
A person or company earning income in country A that has no income tax ( only sales tax ) ... and then spends it buying goods and services in country B ... That person or company is effectively benefiting from all the government services in country A that others in Country A are paying for ... but they are not themselves paying their fair share for.

True, but they bear the import costs and, if the U.S. switched to a Sales Tax you can bet your bottom dollar others would have to follow suit - negating the advantage. Self adjusting in short order.

Perhaps not a deal breaker in itself ... that system system has other pros and other types of systems have their own fair share of cons ... but that is something I see as a significant Con of that sales tax only style system.

Think of it in terms of ethical principles and it becomes obvious. What we purchase abroad is, in some abstract sense, almost irrelevant - we are still the world's largest MARKET. With a Sales Tax, people are taxed for the opportunity to sell to the MARKET, rather than on their PRODUCTIVITY. Everyone is treated equally - and if other countries keep income and other unethical taxes that get loaded into their prices, they will lose market share.