View Poll Results: Best possible tax system (if we were starting from scratch)?

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  • Progressive income tax, with deductions, credits, incentives, etc.

    2 7.41%
  • Progressive income tax, with no deductions, credits, incentives, etc.

    5 18.52%
  • Flat national sales tax ("necessities" excluded)

    7 25.93%
  • Progressive national sales tax ("luxuries" taxed at a higher rate, but "necessities" still excluded)

    3 11.11%
  • Flat income tax, no deductions, credits, incentives, etc.

    6 22.22%
  • Value-Added tax, i.e.: tax hidden in cost of goods and services

    0 0%
  • Other

    4 14.81%
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Thread: Best possible tax system (if we were starting from scratch)?

  1. #1
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    Best possible tax system (if we were starting from scratch)?

    Best possible tax system (if we were starting from scratch)?

    The question is intended as an intellectual discussion, as it is impossible to have a purely clean slate, but... if the country were to just plop down from the sky and begin today, and we had to set-up a tax system from scratch... with absolutely no pre-determined bias or anything... what would be the best tax system for the overall common good of society?

    1) Progressive income tax, with deductions, credits, incentives, etc.
    2) Progressive income tax, with no deductions, credits, incentives, etc.
    3) Flat national sales tax ("necessities" excluded)
    4) Progressive national sales tax ("luxuries" taxed at a higher rate, but "necessities" still excluded)
    5) Flat income tax, no deductions, credits, incentives, etc.
    6) Value-Added tax, i.e.: tax hidden in cost of goods and services
    7) Other

    Your reasons can be social, or economic, or a combination of both.

    Note #1: "Necessities" defined as basic food staples, etc.
    Note #2: I purposely am not including "no tax system at all" as an option. While there is some irrelevancy in the form of "starting from scratch" involved to facilitate discussion regarding the topic, I am not willing to entertain the fantasy that no tax system would be even remotely viable.

  2. #2
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    Re: Best possible tax system (if we were starting from scratch)?

    Replace all federal taxes on personal and corporate income with a broad national consumption tax on retail sales that is contingent upon income. In other words, the higher the amount of income you make the higher the percentage of consumption tax you pay. This could be tracked electronically. The percentages are based on a formula so there are no progressive stages of income as in our current system, but rather you pay an exact percentage based on your individual or family income. Those who are at the poverty line pay 0% and only pay a fraction of a percent more as they get above poverty, thereby not entirely demotivating them from seeking higher income or becoming reliant upon rebates. Those who are at the highest levels of income pay the highest consumption tax rate but it would still probably be lower than what they pay now and they could mitigate the cost simply by mitigating their consumption.

    This would also allow us to phase out hard currency entirely. It would make tracking money in and out of the system irrelevant so there would be no need for the IRS. If you are spending more than your employer reports paying you, then you are likely cheating the system. Transfers of money from one individual to another are tracked as changes in income, so wealthier people simply can't have poorer people go buy things for them at a lower tax rate. In essence, it takes the politics entirely out of the tax debate. If you are wealthier, you have to pay a higher rate, but given that consumption falls off, a progressive system is a necessity unless people wish to create a potential entitlement system of rebates. Furthermore, unlike the current system, the wealthier do have a choice in how much they are taxed because they can mitigate how much they consume.
    Quote Originally Posted by Bucky View Post
    The economy will improve under this bill. If a few people die, it will be for the betterament of this country.

  3. #3
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    Re: Best possible tax system (if we were starting from scratch)?

    Quote Originally Posted by CriticalThought View Post
    Replace all federal taxes on personal and corporate income with a broad national consumption tax on retail sales that is contingent upon income. In other words, the higher the amount of income you make the higher the percentage of consumption tax you pay. This could be tracked electronically. The percentages are based on a formula so there are no progressive stages of income as in our current system, but rather you pay an exact percentage based on your individual or family income. Those who are at the poverty line pay 0% and only pay a fraction of a percent more as they get above poverty, thereby not entirely demotivating them from seeking higher income or becoming reliant upon rebates. Those who are at the highest levels of income pay the highest consumption tax rate but it would still probably be lower than what they pay now and they could mitigate the cost simply by mitigating their consumption.

    This would also allow us to phase out hard currency entirely. It would make tracking money in and out of the system irrelevant so there would be no need for the IRS. If you are spending more than your employer reports paying you, then you are likely cheating the system. Transfers of money from one individual to another are tracked as changes in income, so wealthier people simply can't have poorer people go buy things for them at a lower tax rate. In essence, it takes the politics entirely out of the tax debate. If you are wealthier, you have to pay a higher rate, but given that consumption falls off, a progressive system is a necessity unless people wish to create a potential entitlement system of rebates. Furthermore, unlike the current system, the wealthier do have a choice in how much they are taxed because they can mitigate how much they consume.
    That was interesting.

    Not sure I fully understand it, but it was interesting.
    Education.

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    Re: Best possible tax system (if we were starting from scratch)?

    We need a system that prevents congress from pandering by telling the masses that OTHERS will be taxed more to pay for what the masses want if the masses vote for that Politician

    a tax system must make everyone pay the same increase if taxes are raised

    only that type of system will start getting rid of the deficit by getting rid of the incentive of politicians to pander with spending on voters that the voters aren't taxed for

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    Re: Best possible tax system (if we were starting from scratch)?

    Quote Originally Posted by TurtleDude View Post
    We need a system that prevents congress from pandering by telling the masses that OTHERS will be taxed more to pay for what the masses want if the masses vote for that Politician

    a tax system must make everyone pay the same increase if taxes are raised

    only that type of system will start getting rid of the deficit by getting rid of the incentive of politicians to pander with spending on voters that the voters aren't taxed for
    And yet, politicians are in charge of changing the system, atm.

    And IMO, they'll hang on to that tool.
    Education.

    Sometimes I think we're alone. Sometimes I think we're not. In either case, the thought is staggering. ~ R. Buckminster Fuller

  6. #6
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    Re: Best possible tax system (if we were starting from scratch)?

    If our current progressive system stayed in place, lower rates, no deductions EXCEPT for mortgage interest up to $10K and Charity (but no trusts), all income treated equally and a moderated inheritance tax, we'd be in good shape. However, the tax system is designed to screw some and facilitate others so don't look for modification anytime soon.

  7. #7
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    Re: Best possible tax system (if we were starting from scratch)?

    Quote Originally Posted by The Mark View Post
    That was interesting.

    Not sure I fully understand it, but it was interesting.
    If there is anything you need clarification on, then please let me know.

    The system proposed is a collaborative effort which compromises and seeks to mitigate the problems inherent in taxation. There is no perfect system, but I do believe this would be a major step towards the least imperfect system obtainable.

    Quote Originally Posted by TurtleDude View Post
    We need a system that prevents congress from pandering by telling the masses that OTHERS will be taxed more to pay for what the masses want if the masses vote for that Politician

    a tax system must make everyone pay the same increase if taxes are raised

    only that type of system will start getting rid of the deficit by getting rid of the incentive of politicians to pander with spending on voters that the voters aren't taxed for
    The system I proposed would be the only system that could reliably accomplish that task.
    Quote Originally Posted by Bucky View Post
    The economy will improve under this bill. If a few people die, it will be for the betterament of this country.

  8. #8
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    Re: Best possible tax system (if we were starting from scratch)?

    you tax what you want less of, and you subsidize what you want more of.

    for this and many other reasons, in a magical land where such was possible, we should have a broad sales tax, and get rid of the income, capital gains, and estate taxes. In this way we encourage hard work and thrift, but discourage wasteful consumption. We also (as Turtle alludes to) make it more difficult for politicians to give favors to preferred campaign donors interest groups, thereby reducing the power and corruption in our federal government.


    however, as that's unlikely to happen, we should instead strip out the vast majority of our current deductions and loopholes, and lower the nominal rates to keep effective ones the same. the only credit I can think of offhand that we should definitely keep or expand is the child-tax-credit.

  9. #9
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    Re: Best possible tax system (if we were starting from scratch)?

    I say option three. That way you can opt out at will.

  10. #10
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    Re: Best possible tax system (if we were starting from scratch)?

    Quote Originally Posted by The Mark View Post
    And yet, politicians are in charge of changing the system, atm.

    And IMO, they'll hang on to that tool.
    you make an excellent point. Congress will never give up power and the ability to play one group against another is a huge amount of extraconstitutional power

    indeed when the Income tax was being debated, one senator noted a NST would be more efficient in raising revenue but a proponent noted that such a NST wouldn't give congress near as much power

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