Is income tax necessary?

[wrs]

That is utterly false. If I have $50,000.00 and you have $5,000,000 and we both want them to be stored in the vault at the local bank, no on deposit mind you, but stored. You will pay many times more than I will based on storage space first and on insurance second.

We will both have our money in the same vault, but the one with more in it will pay more for it to be there. There is nothing wrong with that.

Man, you don't understand this at all do you? You just keep tripping yourself up. $5,000,000 in bonds doesn't take up any more room that $50,000 in cash. The content of safe deposit boxes is unknown to the bank and they only charge based on size. You just keep on trying to promote a baseless premise.

The vault itself doesn't cost anymore to buy whether or not the bank protects $50,000 with it or $5,000,000. That was my original point but you didn't get that so you took it to mean something else. The point is, the cost of the vault is the same to the bank no matter how much they have in it.

 

[wrs]

No, the government should not give you a tax break for having children. Having kids or not having kids should not be any business of the federal government.

Then kids are not a benefit to a civil society?

No, it has infinite utility. There is no practical limit on how much wealth one may accumulate in this country. Steve Jobs got far more from living in civil society than I did. Thus he paid more for it.

Totally false. What Steve Jobs gets out of a good doesn't make it more valuable than what a poor person does. If I pay for unlimited text and data but never use it, I still pay the same for it but get less utility from it than the guy who uses 10x what I do. The guy working at Walmart for minimum wage had the same opportunity given to him by society that Steve Jobs did. That guy dropped out of a community college and started his company out of his garage. How about Mark Cuban? There is another guy who didn't have anymore of what society gives than the guy at Walmart. This is supposed to be the big benefit of the society we live in, that it gives the little guy the same opportunity to do well as it does the high and mighty born. They just did more with what they had to work with.

God luck with that. The state governments exist within the federal system. Without the federal system the states would be in absolute turmoil. I would expect the state of Mississippi to last 4 months at the most as a governmental entity. Hawaii would likely be better off, just revert to kingdom status. Everything else would fall somewhere in-between. I'd love to see the local sherriff trying to evict someone in Texas if the federal government no longer existed. The words bath and blood come to mind.

I live in Texas and I could care less about Mississippi. Apparently you have never been to the Travis County Courthouse or any other for that matter, otherwise you would know how foreclosures proceed in Texas.

 

[sir drinks-a-lot]

That is certainly a discussion worth having. Which major expenditures (say greater than 10% of federal budget) do you contend don't help to provide for an environment that allows the rich to make money, aka civil society?

IMO, it's easier to answer which do: Defense, Judiciary branches, parts of department of energy, a few others.

Other than that, they're usually not getting their money's worth. Free people with free markets are usually pretty good at finding ways to better their situation.

Although, of course, with our current system of crony capitalism (which therefore is not really capitalism), lots of people are getting and staying rich off those very same tax dollars! (Politicians and their cronies)

 

[Border Reiver]

Totally false. What Steve Jobs gets out of a good doesn't make it more valuable than what a poor person does. If I pay for unlimited text and data but never use it, I still pay the same for it but get less utility from it than the guy who uses 10x what I do. The guy working at Walmart for minimum wage had the same opportunity given to him by society that Steve Jobs did. That guy dropped out of a community college and started his company out of his garage. How about Mark Cuban? There is another guy who didn't have anymore of what society gives than the guy at Walmart. This is supposed to be the big benefit of the society we live in, that it gives the little guy the same opportunity to do well as it does the high and mighty born. They just did more with what they had to work with.

You're missing the point - Steve Jobs, and the guy working at Walmart both benefit from a civil society:

A. Well maintained infrastructure;
B. A legal system that protects property rights;
C. A functioning criminal justice system;
D. National defence;
E. A well established system of foreign relations;
F. National system of weights and measures;
G. Food and drug safety;
H. Recognized currency;
I. Environmental protection;
J. Educational system;
Etc.

The thing is Steve benefits more than the guy at Walmart because frankly, he's got more at stake. The guy at Walmart doesn't care about intellectual property rules and the functioning legal system that protects them, but Steve does. Both benefit from a functioning criminal justice system, as it means neither need to worry as much about bandits coming and stealing all their stuff. Both get use out of the education system - the guy at Walmart because he can use his to get ahead and Steve gets that benefit, plus a educated workforce.

I live in Texas and I could care less about Mississippi.

Unless everything you use is produced locally or comes from west of that river, at some point the goods you use may be coming through there. Or alternately, if you still don't care, unstable states tend to be sources of unrest and destabilization in their neighbours.

Apparently you have never been to the Travis County Courthouse or any other for that matter, otherwise you would know how foreclosures proceed in Texas.

I believe the allusion that was being made was that, in the absence of a functioning legal system with the ability to call on state assistance for enforcement, that evictions will rely less on the force of law, and more on physical coercion for both parties to make their point.

 

[sir drinks-a-lot]

You're missing the point - Steve Jobs, and the guy working at Walmart both benefit from a civil society:

A. Well maintained infrastructure;
B. A legal system that protects property rights;
C. A functioning criminal justice system;
D. National defence;
E. A well established system of foreign relations;
F. National system of weights and measures;
G. Food and drug safety;
H. Recognized currency;
I. Environmental protection;
J. Educational system;
Etc.

More important than asking whether they benefit (which is only one side of the question) is asking whether or not they are getting their money's worth. THe government is unable to provide goods and services a no-one's expense!

I'd agree without hesitation on B, C & D, don't really know how F and H count as being funded by tax revenue, and, more or less, disagree with the rest.

Of course, it's well nigh impossible to completely evaluate the net benefits to all of the actors in this scenario. Steve Jobs has surely been responsible for much more wealth being generated than the guy working at Walmart (who likely benefits from the use of an iPhone).

 

[wrs]

You're missing the point - Steve Jobs, and the guy working at Walmart both benefit from a civil society:

No, you are.

The thing is Steve benefits more than the guy at Walmart because frankly, he's got more at stake. The guy at Walmart doesn't care about intellectual property rules and the functioning legal system that protects them, but Steve does. Both benefit from a functioning criminal justice system, as it means neither need to worry as much about bandits coming and stealing all their stuff. Both get use out of the education system - the guy at Walmart because he can use his to get ahead and Steve gets that benefit, plus a educated workforce.

When Steve started out, he was on the same footing with the Walmart employee. This other benefit of an educated workforce you claim as a benefit to Steve Jobs isn't. It's a benefit to those who have been educated. What kind of twisted logic do you follow? Those people gain their own benefit from the education and they contribute their taxes to gain the benefit. People don't get educated solely to work at Apple, what a strange notion.

I believe the allusion that was being made was that, in the absence of a functioning legal system with the ability to call on state assistance for enforcement, that evictions will rely less on the force of law, and more on physical coercion for both parties to make their point.

This discussion was about federal taxes and thus, the local and state functions are not affected.

 

[sir drinks-a-lot]

This other benefit of an educated workforce you claim as a benefit to Steve Jobs isn't. It's a benefit to those who have been educated. What kind of twisted logic do you follow?

I think it's a combination of Elizabeth Warren and the "you didn't build that" idea. Sort of an assertion that the main beneficiaries of education are the employers of those who received the education.

 

[The Don]

Do you know the difference in tax treatment for ordinary income and capital gains? How about the difference in earned income and corporate income?

In which tax jurisdiction ?

The U.K. handles these differently than the U.S. and European countries are as different again.

 

[Corsair 115]

That's why I am in favor of cutting certain government entitlement benefits. I'm not saying to leave the elderly and disabled homeless and starving, but surely there are entitlements that can be reduced or eliminated.

I'd suggest looking at the vast array of subsidies handed out to corporations.

 

[Border Reiver]

When Steve started out, he was on the same footing with the Walmart employee. This other benefit of an educated workforce you claim as a benefit to Steve Jobs isn't. It's a benefit to those who have been educated. What kind of twisted logic do you follow? Those people gain their own benefit from the education and they contribute their taxes to gain the benefit. People don't get educated solely to work at Apple, what a strange notion.

Yes, the person who is educated is the primary beneficiary of said education. However, there are these little things called side benefits:

Employers tend to get a more dynamic work force requiring only some specific task related training to function. It is also easier for employers to find employees that have the background and training to do the necessary jobs. And of course, the better educated workforce tend to get better paying jobs, which translates into more money being spent in the economy and the ability to buy what is produced.

This discussion was about federal taxes and thus, the local and state functions are not affected.

Doubtful. If you were to remove a layer of government entirely you would end up with a fair amount of problems for the other layers. The economic effects would be felt first, as investors start looking for someplace stable to put their money. Then you are going to get the rather inevitable expansion of the local and state governments to try and do what the federal government no longer can.

What you have is a system - removal of a major part is going to have a substantial and very likely negative effect on the remainder.

 

[wrs]

In which tax jurisdiction ?

The U.K. handles these differently than the U.S. and European countries are as different again.

The US.

 

[wrs]

Doubtful. If you were to remove a layer of government entirely you would end up with a fair amount of problems for the other layers. The economic effects would be felt first, as investors start looking for someplace stable to put their money. Then you are going to get the rather inevitable expansion of the local and state governments to try and do what the federal government no longer can.

What you have is a system - removal of a major part is going to have a substantial and very likely negative effect on the remainder.

Why do people keep up with the implication that elimination of income tax eliminates govt? I don't get this, stay on topic, this is about the income tax, not the elimination of govt. Maybe a big cutback on govt but any 400lb fat slob can afford to lose a couple hundred pounds, it just depends on how bad they want to do it. Maybe they die of a heart attack because they don't lose it, that is also a possibility. The govt fails of it's own weight.

 

[Corsair 115]

According to this CBO document (PDF), in 2011 U.S. federal government revenue broke down this way:

$1,091 billion from income taxes (47.4%)
$819 billion from social insurance (payroll) taxes (35.6%)
$181 billion from corporate income taxes (7.9%)
$83 billion from federal reserve earnings (3.6%)
$72 billion from excise taxes (3.1%)
$30 billion from customs duties (1.3%)
$20 billion from miscellaneous fees and fines (0.9%)
$7 billion from estate and gift taxes (0.3%)

 

[Border Reiver]

According to this CBO document (PDF), in 2011 U.S. federal government revenue broke down this way:

$1,091 billion from income taxes (47.4%)
$819 billion from social insurance (payroll) taxes (35.6%)
$181 billion from corporate income taxes (7.9%)
$83 billion from federal reserve earnings (3.6%)
$72 billion from excise taxes (3.1%)
$30 billion from customs duties (1.3%)
$20 billion from miscellaneous fees and fines (0.9%)
$7 billion from estate and gift taxes (0.3%)

In other words, to maintain the same level of service available presently, American would need to raise other taxes a considerable amount to cover the elimination of the income tax, or will need to get by with considerably fewer government services. So, what to cut, how much to cut , why to cut it, and how to deal loss of services?

 

[3point14]

The government owns the land. Only the land, not what's on it, but definitely what's in it.

Charges rent.

 

[barehl]

The wasted money was paying for people to be on furlough. Real businesses shut down and don't pay any expenses other than unavoidable fixed costs. Govt can do the same.

You really don't grasp this, do you. This isn't some kind of big joke. When essential offices are closed without warning, there are real consequences. Contracts get suspended, workers get laid off, and things get delayed. Delays cost money. The estimated cost of the government shutdown for the entire economy was 0.15% of GDP. That doesn't sound like much, does it? The GDP is $16 Trillion so that tiny bit is $24 billion.

I have no idea what the costs were

I believe you, completely.

Govt is inefficient by definition.

I realize that this is a convenient trope for many--but wouldn't it be nice if it were true? The reality of the matter is that many government agencies are efficient and there are many private companies that are not. By definition? Seriously??

 

[barehl]

I'd suggest looking at the vast array of subsidies handed out to corporations.

And these would be the same corporations that are not currently paying any taxes.