Taxes

Philosophy Forums Society, Government, and Economics
1

Let’s talk about taxes, shall we?

In the US, taxes were first tried by the Federal Government (North) as a way to finance the War between the States. It was (excuse me) ‘shot’ down by the Northern States, probably because the Revolutionary War had been fought because the Colonies protested against English taxes being levied on them in order to finance England’s various wars.

Over the years, taxes have changed. They’ve gone from a flat tax on property to a progressive tax on earnings. The XVI amendment made income taxes the law of the land.

Our federal taxes are meant to be a ‘redistribution of wealth’ in that taxes are distributed among the states, based on Representatives’ definitions of ‘need.’ (See the Bridge to Nowhere debacle.) Our Federal taxes come from various sources; income, inheritance, use taxes, and others. Our State taxes are meant to do the same–distribute the wealth among the counties.

Income taxes are the big bug-a-boo, now. What is an income tax?

For most of us, it’s the tax taken out of our wages. The percentage taken depends on certain deductions. So far, so good.

But, there’s a loophole that says capital gains can’t be taxed until those gains have been realized, i.e., when you sell any investments. Even then, the percentage of taxable income on capital gains goes down the longer you maintain that investment.

This means the ‘super-rich’ can immediately turn any gains into investments and pay no taxes. The only income they need to declare is the marginal taxable income left over after their investments. That’s their taxable income.

Where does that leave the average tax payer? Some of them play the stock market the way the Big Boys do, betting on future returns that they can then reinvest, etc.

Most of us are like my husband and me. We’re retired, yet we must withdraw a percentage of our retirement funds every year so they can be taxed as personal income. The working people must dedicate a certain percentage of their income to taxes. Most of us just don’t have the money to continue to reinvest, and reinvest, and reinvest.

We don’t need tax relief, we need tax reform!

2

Taxes == “Pay us for protecting you from everyone else by controlling everyone else… oh and btw, you are one of everyone else”. :confused: :frowning:

It worked, so there you are. #-o
So what did you want to talk about? :-k

Are you suggesting that “they” change/“reform” that?
…yeah right… :laughing: :shifty:

3

Do you, then, advocate for no taxes at all or are you just against taxes being used for defense purposes? And does defense mean military defense or defense against personal offenses? In other words, would you deny the institutions that provide people protection–the court system, both criminal and civil; the fire departments; EMTs and rescue groups.

I’m not suggesting–yet–that taxation for those services be changed.

I’m talking about tax codes, rather than the use of tax monies. If I wasn’t clear in my OP, can you suggest ways for me to make myself more clear?

4
5

As nice as your potted history of taxation in the US might be, it isn’t particularly true.

I think trying to rationalise the state taking your money by force by ‘reforming’ the ‘tax code’ is absurd. The whole system is screwed, the US has been bankrupted by a debt-based money supply and a capitalist model of infinite growth. You could rejig exactly who pays how much tax all you like, it will not solve that problem.

6

It is not about the specific codes or rates or capital gains, but
the very philosophy behind taxation. GOPers believed and have done
so for over 30 years that taxes are evil, theft of private property,
a sin against man and god. The very idea of taxation is under attacked
and this is the first place we must start. The philosophy behind taxes.

Adam smith wrote in the wealth of nations, the bible of capitalism,
that he favored progressive taxation to keep the balance between
wealthy and poor from getting out of hand and tilting toward the wealthy.

Karl Marx, the founder of socialism favored progressive taxation for
pretty much the same reason.

Now this idea comes down to what is your vision of society
and what is the “goal” of society. This is reflected in ads against
Obama in which the GOP accuses Obama of creating an “Entitlement” state.
taxes and their redistribution are a reflection of what a society values.
If you redistributed taxes toward the wealthy, that is what you value.
you create a vision of society and then you tax accordingly.

Kropotkin

7

Excuse me Mr Kropotkin but aren’t you supposed to be an anarcho-communist?

In which case why do you believe in taxation? Why believe in a centrally planned economy at all? That runs contrary to the anarcho-communist philosophy.

8

if governments were like products we could go make a contract with one that we liked most.

I’d hope the crappiest governments wouldn’t sell.

It seems like almost every place where there is a large amount of money, there is a misuse of it.
Taxes give a large amount of money to the government.

9

Yeah, rich people don’t pay enough tax. This is probably true in every country to some extent. There are always loopholes.

It would be easy for a government to pass a law saying that everyone earning over amount x has to pay a minimum of y % on their overall income in taxes, whatever the source of income. Or a provision that said that all people must pay an amount of tax that is ‘fair’ and ‘in proportion with their overall wealth’, which would make large scale tax evasion (like when Mitt Romney was paying 13% tax, which I’m guessing is partly what you are referring to) illegal by default.

They could pass such a law - but think of who they’d be upsetting if they did. Governments don’t generally want to pass laws which upset the rich and powerful. The normal (pathetic) argument is some odd proclamation that if we made rich people unhappy, they would all leave our country and go and live somewhere else (they wouldn’t because even they can’t just move businesses and investment portfolios like that, and frankly we wouldn’t care if they did anyway).

This world really needs some politicians with some real guts to sort this kind of thing out.

10

SIATD v2: Excuse me Mr Kropotkin but aren’t you supposed to be an anarcho-communist?

In which case why do you believe in taxation? Why believe in a centrally planned economy at all? That runs contrary to the anarcho-communist philosophy.:

K: Reread the post and notice I make no claim for or against taxes. I simple state that taxes are a vision of
society, nothing more. I have done the “not pay taxes” thing for several years. The only reason I went legit
was my then girlfriend and present wife, demanded that I go legit. I did and screwed myself badly which took
several years to straighten out. I was on IRS speed dial during that time over a fairly small amount of money.
I stopped paying and filing taxes to protest the Reagan years. I even went to the world anarchist convention in
San Francisco in 1989? 88? Fun times I must say. The convention was in a school in the mission district and
the government had several white vans out front taking pictures and film of everyone who entered and left
the convention. We would just wave at the van’s and pose so they would get a better picture. Anyway, back
at the ranch. I am still an anarchist however I realize that anarchism is decades if not centuries away from
fruition. So I could fight for a cause that has no chance of winning until long, long, long time after I am dead
or I can work with the system I have now and make changes with what I got. I am old enough to know change
rarely happens in the way one wants or with the speed needed but you make do.
the issue of taxation is no different. in a ideal world we wouldn’t need taxes but we don’t have
an ideal world, so we need taxes.

Kropotkin

11

So, PK, you’re actually a socialist, not an anarcho-communist. You still believe in a centrally planned economy, no?

12

Tax is necessary for the functioning of a tribe (or “a society”) as history has known it, but of course a tribes functioning isn’t necessarily beneficial for the individual. So taxes can be justified or not only in terms of the individuals relation to the tribe. At this point more and more people are being excluded from their tribal inner circles, and as is always the case, the heaviest taxation falls on the excluded ones.

First of all, it’s never been different. I’m not saying this is good, in fact I’d call for someone to invent a new structure. James is apparently someone who’s aware of this option. I’m not there yet, it’s going to be complicated, because two contradicting different logics (subjectivist (ethics) and inter-subjectivist (economics)) have to operate hand in hand on even more terrains than now.

Right now taxation is practically preferable to no taxation, but where tribal- and individual logics are combined, all tax must be income tax, be low and flat, and nothing should be deductible from it. In this way the poor is perfectly free to be poor and free, and the rich will automatically be a figure of standing and esteem no matter his habits or blood, which will in most cases curb desire to stand apart from “his people”.

13

There was a headline in our local newspaper: Boeing Pays CEO More in Salary Than Taxes.

That meant, to me, that the Boeing company paid less in Corporate taxes than it paid the CEO in salary. Will McNerney pay income taxes on his real income? No.

Why, because his salary is, in a large part, stock, and until he sells his stock, he has no monetary gain. But how is the value of his stock estimated? And is the value of the stock for small shareholders estimated at the same rate? Since we own shares of Boeing stock, I’d say, no.

What model is used to evaluate either corporate or individual income taxes? (Forgive me if I don’t go into a discussion of the philosophy behind income taxes–that’s a different thread topic.) I’d like to see if the evaluation is the same used for returns on investment given to the small share holder.

As I understand it, a corporation must set aside a percentage of its profits for shareholders. However, how profit is established is by subtracting overhead, reinvestment, the cost of capital improvements, R&D expenses, money held back for possible future re-tooling, etc., etc., etc.

Also, as I understand it, the corporation can set the amount of overhead, etc. at what it says is needed. Who’s to question?

The corporate deducts, plus probably loop-holes, allow the corps to legally reduce its corporate taxes.

The normal income tax payer doesn’t have that ability.I can think of a lot of ways to legally increase charges for corporate taxes, if people got angry enough to do so.

14

Well, overheads are things like rent, electricity, staff lunches, staff cars etc. For tax purposes, businesses have to proved receipts/bills for all of these expenses and all businesses get audited by the tax office on occasion.

However, there are obviously loopholes here. Most large corporations try to remunerate higher up employees by giving them large lunch allowances, nice company cars, houses away from home to stay in if they have offices in two places etc. I have a few friends working for large corporations (including a major car company and a major fast food chain, among others) and the benefits they get on top of their salaries are clearly unnecessary. One person I know gets a $100 lunch allowance and $150 dinner allowance if she has to work late, and she isn’t even that high up in the company. This is a method of giving employees tax-free benefits which could be seen as cheating the tax system.

That said, increasing corporation tax is different to increasing personal income tax for the super wealthy. I’m for the latter but against the former, in general, because profitable companies employ people from all levels of society, and many companies are already struggling to make enough money as it is, and when they stop making money, it’s never the upper management that gets laid off.

15

Overhead isn’t just what you’ve described, brev, that’s what I was trying to say. Overhead includes monies set aside for future possibilities–geared to the possible future success of the corporation. This includes, now the corps have been given ‘personhood’ by the SCOTUS. setting aside money for lobbying.

Yet corporations are exporting work and importing minds in the name of profit.

Profit for whom?

16

Well, these aren’t ‘overheads’, but they are tax free. Still, if they are setting the money aside, then they aren’t spending it or banking it as profit, which acts as a natural limitation on how much money they will set aside (the more they set aside, obviously, the less money they make that year).

I thought that corporations in the U.S.A, like in most Western countries, had pretty much always had the status of personhood (At least for a few hundred years, right?) - it’s certainly something that’s been entrenched in British law since the industrial revolution.

Are you arguing that corporations should be taxed on all such expenses?

17

The government here in the UK is making a right mess of things - supposedly trying to cut the deficit via ‘austerity’, it has found that all this does is cause a recession and high inflation. The last budget was particularly absurd - they introduced, and then got rid of, a tax on pasties (hot and sometimes cold food enclosed in pastry), a tax on caravans, a tax on charitable donations, some sort of tax on churches. They all proved massively unpopular and were scrapped before they were ever implemented.

They also postponed a planned rise in fuel duty, i.e. petrol tax. This decision was made in the face of enormous public pressure, obviously in a pretty rushed fashion. The Newsnight (BBC2 nightly news analysis/discussion show) interview was priceless:

[youtube]http://www.youtube.com/watch?v=R4wGp9UoXLc[/youtube]

18

I think its optimistic to think that the coalition have ‘found this out’. They are still making cuts: they don’t seem to have realized the effects of what they are doing at all.

‘Austerity’ is a plague that’s sweeping the whole of Europe. Suddenly, because there’s an economic crisis, everyone has to stop spending money. Because obviouly that’s not going to make the situation any worse or anything :confused:

19

Yes, they do. This is exactly what they want to happen. The rich continue to get richer, while the vast number of ordinary people take a hit to their material quality of life.

Depends on what you’re trying to accomplish. Whether it is true or not, most current governments believe that we have hit the ceiling of globalised trade - peak oil, peak food, peak water, peak credit, etc. They think that sustaining a global population of 7 billion is impossible, and indeed sustaining a global economy of the size we currently have is also impossible.

What we are seeing is what in Thatcher’s government was called ‘managed decline’ but I would call the controlled demolition of world trade. The idea is to make the economy smaller, and to do that by forcibly reducing the consumption levels of ordinary people while the rich maintain or even enhance their position. Hence, bailouts for big corporations and banks and ‘austerity’ for the rest of us. Don’t kid yourself that this is the result of incompetence.

20

Tax lawyers and tax definitions. Have any of you gone to the .gov IRS site? Find the definitions of taxable income then find the definition of income and whatever other items that might pique your curiosity.
What you are told that you have to do is not the same as what you have to do. Think about it, why else would lawyers so specialize? Have you never thought about it?