What should the top income tax rate be?

[Robert Minneman]

The OP had the subject as "What should the top income tax rate be?", so obviously in a perfect world, 0% of income would be taxed.

All taxation should be consumption based, with exceptions for essentials (food, utilities, housing, transportation, education, and healthcare).

Taxing based on "non-essentials" purchasing evens the playing field and is more "fair", as a person making 20k won't be taxed like a person making 2,000,000... This method would also end up taxing a lot of various criminal enterprises, where currently most criminal income is tax free anyway, a consumption based tax would certainly even that out as well.

[beppe]

Originally Posted by TGS

Does one have to accumulate a certain number of posts, or a certain number of karma points, before one receives the special key that enables one to unambiguously understand beppe's, undoubtedly brilliant, posts?

Are you provoking me? nahh
Are you trolling me ? nahh
Do you want to pick a fight? nahh
Are you making fun of me ? yeaah

Good. Let's have fun

[TGS]

Originally Posted by beppe

Are you provoking me? nahh
Are you trolling me ? nahh
Do you want to pick a fight? nahh
Are you making fun of me ? yeaah

Good. Let's have fun

salute

[Elfwreck]

Cut the military by 50%. Get rid of everything not focused on the option of defending our borders. (While I don't think we're particularly under threat of invasion, I'm willing to posit a need for a defensive force. We do not, however, need to be able to invade other countries.)

Cope with the fact that this will create ~10 years of chaos as the marketplace adjusts to the loss of huge sectors of industry. Encourage those industries to refocus on private uses: arms manufacturers could become science/tech manufacturers. Military uniform providers would need to find different customers to sell to, probably different styles to make.

Reduce government pensions to an amount tied to minimum wage. (By state for state officials, by federal level for federal officials.) Whether the pension is "three times minimum wage" or "ten times minimum wage" or "3x for state senators, 5x for governors, 10x fed min wage for presidents"--attach it to a metric based on the current economic situation, not an arbitrary number.

Drastically reduce income for elected government officials. Where appropriate, increase benefits to match: if the gov't provides your job with housing and a car, your income obviously doesn't need to support rent & gas money.

Reduce the amount spent guarding our southern border.

Shift laws to require that migrant farm workers are subject to the same labor laws as everyone else--minimum wage, overtime, whatever health benefits are required by law. This would remove the incentive to hire non-citizens.

Require registration for copyright past the first ~20 years. Increase cost of registration to actually cover the expense of database maintenance. Remove the ability to not file a copy in the archive.

Allocate school spending on a state level at the same amount per student, regardless of district. No more "rich districts get new buildings and good books; poor districts get leaky roofs and obsolete texts." (This is not, specifically, a money-saving measure, but it's doesn't cost money, either. Improving education helps *everyone*, and more kids staying in school longer & learning more & better means more tax revenue in the long run.)

Legalize several currently-illegal drugs and tax them like cigarettes. Stop wasting money incarcerating people for crimes that don't affect anyone but themselves & their social circle. Decriminalize prostitution, hand out licenses for sex workers (like food service licenses: basic health awareness & business registration is all it should take), and tax the business.

[beppe]

I cancel my post that was a silly joke and felt bad to have it right after th eone above. sorry Elfwreck

[Elfwreck]

Originally Posted by beppe

I cancel my post that was a silly joke and felt bad to have it right after th eone above. sorry Elfwreck

Jokes are fine, too. The government is very, very unlikely to take the tax-cutting measures that I think is reasonable, so I'm perfectly happy to discuss measures like "disband the DMV and give up on regulating automobiles - will save millions, first in paperwork, then in expenses as careless people remove themselves from the gene pool!"

[Greg Anos]

Originally Posted by DMcCunney

Everyone complains about how high taxes are. Part of the problem is there is no direct connection between revenue and expense. When a legislator proposes a bill that will require the government to spend money, it doesn't specify where the money will come from. I've wondered, on occasion, about a law that would require legislators to say how the government would get what they wanted to spend.

But the more interesting question isn't what the tax rate should be: it's what the government should be doing with the money. Reducing takes by any significant amount would require reducing government spending. What would you advocate the government not do to reduce spending, and why?
______
Dennis

scrap ag price supports, scrap ObamaCare, and let the money center banks fail the next time...

[beppe]

Originally Posted by Elfwreck

Jokes are fine, too. The government is very, very unlikely to take the tax-cutting measures that I think is reasonable, so I'm perfectly happy to discuss measures like "disband the DMV and give up on regulating automobiles - will save millions, first in paperwork, then in expenses as careless people remove themselves from the gene pool!"

I like this one particularly. It is very much in mother earth line. The snake starts to eat its tail (BTW, I have nothing against real snakes, condemned to represent evil, pobrecitos).

Thank you Elfwreck


PS, that ribbon I mentioned, it looks like is growing

[basilsands]

10% is a good general measure for federal taxes. Make it even though, every pays the same regardless of income. Dependents would be the only deduction I'd allow for, no business write offs and such. That way everyone knows how much they are going to pay.

A movie star making 5 million a year pays $500,000 taxes.
A busboy making 5k a year pays $500 taxes.

States should limit themselves to less than 3%, after deducting the federal income tax.

They key to an affordable individual tax rate is for the states and the federal government to budget wisely and not spend so wastefully. Will it happen?

Not likely.

[Elfwreck]

Originally Posted by basilsands

10% is a good general measure for federal taxes. Make it even though, every pays the same regardless of income. Dependents would be the only deduction I'd allow for, no business write offs and such. That way everyone knows how much they are going to pay.

That's my other crazy fix-the-tax-code notion. Deduction of $11,000 per person (based on 2010 poverty level for a single person); everyone pays 10% or 15% of everything past that. This means a family of four doesn't pay taxes until its income is over 44k for the year (but that's everyone in the family's income, not one person's).

Business deductions: Income, minus salaries (not expenses) which the employees will be paying taxes on: 10% or 15% goes to the government.

[Donnageddon]

Cancel all tax deductions for dependents and raise the tax rate for each dependent.

A family of four uses much more of the common infrastructure, and services than those without children. It makes absolutely no sense to have them pay less in taxes.

[desertgrandma]

First, you have to ask yourself what KIND of government you want.

If you want your government to meet all your needs, health, education, welfare, housing, entertainment, by all means we need the 80% plus catagory.

Then you have to ask yourself who is in charge of distributing fairly those taxes...and how waste and corruption will be eliminated.

Good luck with that.

[markbot]

In the US, I forgot the mention that the top federal tax rate will jump to 39.6% unless congress extends the prior admin's tax breaks...so I believe. They also raised the tax on dividends (which is double taxed to begin with).

So you are looking at a top income tax rate of close to 70%. the effective tax rate is obviously much lower than 70%...but still, the top earners will pay close to 70% to the government on their marginal dollars.

[markbot]

Originally Posted by Robert Minneman

The OP had the subject as "What should the top income tax rate be?", so obviously in a perfect world, 0% of income would be taxed.

All taxation should be consumption based, with exceptions for essentials (food, utilities, housing, transportation, education, and healthcare).

Taxing based on "non-essentials" purchasing evens the playing field and is more "fair", as a person making 20k won't be taxed like a person making 2,000,000... This method would also end up taxing a lot of various criminal enterprises, where currently most criminal income is tax free anyway, a consumption based tax would certainly even that out as well.

theoretically, economists say the best tax would be fixed and levied at the beginning of your life...assuming they knew your earnings power. consumption based taxes are actually among the worse types of taxes because they distort buying and selling decisions the most....creating a wedge between buyers and sellers.

fixed taxes are less distortive (think property taxes)

[markbot]

Originally Posted by Ralph Sir Edward

scrap ag price supports, scrap ObamaCare, and let the money center banks fail the next time...

Banks hold short term debt (savings deposits, etc) but invest in long-term assets (mortgages, etc) since liquidity is valued in the market place. This means that financial institutions are inherently prone to failure via a bank run (think of the movie It's a wonderful life).

a bank run is a self fulfilling prophecy as there is a dual nash equilibrium between "biz as usual" and bank run. if people think there is a bank run, this actually causes the bank run. this essentially means that only the government can coordinate the market place such that there is no bank run by effectively insuring deposits or giving the banks the power to prevent withdrawals.

the thing is that in the US only consumer deposits are insured. bear stearns et al all failed because the there was effectively a bank run in the wholesale market...where there is no insurance.

EVEN IN FREE MARKET CAPITALISM, the government must prevent banks from failing. think about the Great Depression and all prior recessions before deposit insurance. bank failures used to cause and extend very severe recessions.

to prevent moral hazard and the excessive risk taking that it can cause....the government should still prevent banks from failing...but they should also wipe out the equity holders. However, in the financial crisis, this didn't always happen....the equity holders were saved when they probably shouldn't have been.