What type of tax is best economicly?

[Mike AI]

Bush wants tax reform. I tend to lean towards the flat tax idea, though some kind of conumption tax would be ok as well. If its going to be real reform, its going to be very difficult to get past. The idea of closing the IRS is a major change.

http://www.foxnews.com/story/0,2933,137864,00.html

Alex I guess you are for more "progressive" taxs....

[Winetalk.com]

Mike,
how consumption tax will affect retirees like I am???

I paid all my income taxes already and now ON TOP OF IT,
I gotta pay "consumption tax"?

[RawAlex]

Mike, looking for "ONE TAX" to solve all the problems isn't going to work.

The IRS right now is a joke, eating up huge amounts of tax income just to keep itself going.

End user fees are a good place to start. Increase the costs for things like building permits, fishing licenses, etc. Basically, the government should make as many of it's own departments self supporting as possible. Paying $5 for a fishing license that cost $25 of manpower to produce is a waste. There would not be significantly less people with licenses if the price went up.

Increase the costs of license plates, drivers licenses, and such. Again, attempt to make the processes more self supporting. $10 or $25 for a driver's license that in itself takes $100 to produce is nuts.

Basically, make government services more expensive for the people who use them, and the turn around and cut everyone's tax rate.

(oh yeah, at the end of all of this, the fines for NOT having the right permit, license, whatever should go up accordingly. The risk / reward scenerio should always be adjusted to make sure people are not encouraged just to bypass things).

Flat taxes on income are nice. Simplification and removal of potential loopholes is another good step. Most loopholes exist because someone tried to write the rules to favor one group or another, political actions rather than good sense. Strip those things away and look at the basics, then start over.

Alex

[Almighty Colin]

Depends on what you mean by "economically". What is the goal? To maximize tax receipts? Minimize tax recipts? Have the most "fair" tax system?

[Opti]

tax credits for savings/investments, less tax on income and more tax on spending.

[RawAlex]

Opti, you have to be careful encouraging too much savings, that is one of the problems that has wrecked the economy of Japan... too much money taken out of real circulation each year.

Alex

[Vick]

Pssss ....

I've already given the solution at length some months ago right here at Oprano

National Sales Tax
- excluding grocery store food items and single clothing items under $50

The tax rate can be adjusted to ensure the national budget is balanced (think how that would effect thinking) and funds that are "hidden" will start to be taxed

It's beautiful and simple,
I don't know what fair is or means so forget fair

[Buff]

A tax raises the costs associated with the behavior being taxed.

An income tax raises the costs associated with generating income.
A sales tax raises the costs associated with engaging in trade.
A property tax raises the costs of owning property.
A luxury tax raises the costs associated with owning luxury items.
A capital gains tax raises the costs associated with investing.
A tariff raises the costs associated with imports.

And so on.

In this respect, taxes end up being a form of social engineering, as they distort people's incentive structures -- the benefits of engaging in behavior a, ceteris paribus, remain the same, but the costs are now higher -- people change their behavior accordingly.

Like Colin pointed out, do we want to maximize receipts or minimize them or what? As a libertarian, clearly I think the less government intervention we have in our lives, the better, so we should cut spending and tax very little.

So the question is what behavior is the best to tax? Well, since I pointed out that taxation amounts to social engineering, I think we should tax behaviors that we wish to discourage, and not tax behavior we wish to encourage.

I don't think it's a good idea to discourage income generation, investment, property ownership, importing, luxury, or trade.

I would rather tax poverty, illiteracy, practicing law, passing legislation, running for public office, or driving slow in the fast lane.

[*KK*]

Consumption taxes are so not the way to go. It punishes those who've got the power to consume in greater quantities at the expense of those who make the goods that don't get sold due to the consumption tax.

Frankly, the only tax I know of that works well (at least currently) is here in California, and its the tax imposed on boaters for the ownership and use of their boats.

All the money from the tax is spent by the Dept of Waterways and Harbors, I think it's called, so it's a self-contained little system.

[Almighty Colin]

Originally posted by Buff@Nov 8 2004, 12:58 PM
I would rather tax poverty

Buff,

How do you tax poverty?

[Buff]

Originally posted by *KK*@Nov 8 2004, 12:21 PM
Frankly, the only tax I know of that works well (at least currently) is here in California, and its the tax imposed on boaters for the ownership and use of their boats.

See above. I would tax poverty and illiteracy out of existence. It would be too costly to be poor or illiterate. Talk about encouraging a work ethic and a quest for knowledge.

[Buff]

Originally posted by Colin+Nov 8 2004, 12:24 PM-->