- comment
Vivian J. Paige - body
- What would you replace the property tax with?
- comment James A. Bacon
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- Shaun, I agree with your analysis, and I don't think it contradicts mine. Both phenomenon are true -- homeowners objecting to nearby housing for the poor and local governments optimizing their tax base. I merely focused on the former in my post because Lynchburg offered such a good example of it. If I come across good examples of the latter, I'll highlight them, too.
- comment ....
- body
- It's called the income tax... but Republicans hate it becuase it helps the poor and hurts the rich.
- comment Mike
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- Vivian,
The answer is not to replace the property tax, but to eliminate pork spending.
Taxes shouldn't be collected money intended to fund certain projects ... they should be bills for services rendered. That's why the precinct system in Ney York worked so well for so long. The same goes for volunteer fire and rescue. The government (federal, state or local) should NOT be in the business of utilities, but should be available to break up monopolies on such necessities.
Because of the way the system is set up now, any one of the things currently under the auspices of the government could be released to the public and a system of billing over taxing could very easily be established.
This would lower taxes considerably and eliminate any form of tax that is reliant upon your estimated "value".
- comment Mike
- body
- James,
Income tax hurts the poor as well as the rich. Most politicians and lobbyists are not also economists ... they are attached to an agenda based upon the stirring of emotions.
1) It is a fallacy that a graduated tax system based upon income benefits anyone but those doing the taxing. The graduated income tax is a means of centralizing wealth in order to perpetuate a need in centralized government. The larger the entity becomes, the more money it needs to feed it, and consequently, the more inefficient it becomes. That is simply a law of physics ... the most efficient machines have few moving parts. When you add more parts, it takes more energy to move it because more evergy is lost in the process (on an exponential level), until the machine eventually becomes untennable. The same is true in business efficiency. The larger it becomes, the more work is involved is keeping it afloat until eventually it starts taking in more than it puts out.
The graduated income tax system is designed specifically to feed such a beast because it sets the initial budgetary supply before it, allowing it to feast upon it at its own pace, without having to work for it's keep, and when it runs out, it will simply demand more.
Think of it this way. A farmer places a year's supply of food before one ox, and the other he makes work for its food. The first ox, operating without restrictions, will gorge itself on whatever is available until it is all gone, while the other is forced to feed on what is available at the time. The first ox will run out of food and demand more before it will work again, while the second ox, being used to living on a budgeted food supply will continue to work for just what it needs in order to live.
2) By taxing income, you place a burdon on businesses by making it impractical to give small raises. A man earning $61,300 per year has a 15% tax rate, but a man making $62,000 per year has a 25% tax rate. In order for the man allegedly earning the higher income to bring home MORE than the man seemingly earning less than he is, the business would have to increase his salary by $10,000. And for the raise to be a real raise, the company would actually have to increase his salary by at least $15,000, otherwise the raise doesn't exist and the man in the higher bracket has no incentive to work for that level of pay. Furthermore, the fact that the company has to pay more means that there is a greater strain on the company, which means that the company has to raise it's prices in order to keep it's hard working employees. Now, imagine how that tax burden is then transferred to the guy earning $10/hour. Pulling in only $20,000 per year, his tax rate is 15%, which nets him $17,000. However, his money won't go very far because that 25% tax rate is going to trickle down to him in the average cost of goods. The general effect is that it keeps the poor poor and prevents anyone from ever being capable of getting rich.
Imagine what would happen if the man earning $61,300 did so through his own business, but the following year earned a little more, propelling him into the 25% bracket. He would then suffer a significant loss, forcing him to fire the guy he was paying $10/hour becaus he could no longer afford him, while propelling his prices in an attempt to make up the difference. It's a lose-lose situation, and those who support taxes based upon value or earnings does so out of emotion rather than an understanding of economic principles.
- comment James Atticus Bowden
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- Mike: Thanks for the Econ 10. I've written basic facts on econ also. Amazing how much education is needed. Capitalism works. Capitalism liberates.
- comment Shaun Kenney
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- Vivian: In Virginia, the entire tax system needs to be overhauled. Abolishing the property tax would be a key component, but even if we did away with the property tax and replaced it with something else in Virginia, we're still dealing with a boatload of problems.
James: Republicans don't hate the income tax, nor does it benefit the poor and/or punish the rich. Thankfully, the economics department at UMW is pretty good, so please take a macro and micro economics class there.
Mike: ... to the rescue.
Jim: I think we do argue two different perspectives. I would argue that the decision is made by local governments as pure policy, but your line seems to argue that local governments are pressured into thinking that way by their consititency (fearful of devaluation in their homes).
I do agree we are arguing basically the same concept, but I don't see local governments bending on knee to one development over a developer with a "smart growth" solution.
Anything that improves the tax base is a net positive for a local government. My experience has been that it's more calculus than common sense, at least in the Fredericksburg area.
- comment Vivian J. Paige
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- Mike - just a quick point: you say "A man earning $61,300 per year has a 15% tax rate, but a man making $62,000 per year has a 25% tax rate." (For the sake of argument, I will assume that you mean taxable income, as opposed to earnings, which are two separate things. And, based on the tax rates, I will also assume that this person is married.) This statement is misleading. The 25% rate is a marginal one, only applying to the dollars in excess of the 15% bracket, which only applies after the application of the 10% bracket. Everyone gets the benefit of the lower rates.
When you take that into consideration, your $15,000 figure is a heck of a lot less.
The married guy with taxable income of $20,000 is barely in the 15% bracket, with the bulk of his income being taxed at 10%.
Such is the nature of the graduated income tax.
Back to my original question: localties rely heavily on the real estate tax. Unless you are willing to reduce services (and while there may be some pork in local budgets, it's not like there is a whole lot of fluff, so the bulk of the revenue would have to be replaced. So what are you going to replace it with?
- comment Shaun Kenney
- body
- I would raise three direct objections:
(1) There's plenty localities are doing that the private sector could perform.
(2) The relationship between the state and localities when it comes to taxation is broken beyond repair.
(3) The property tax system is a punative, regressive form of taxation that punishes the poor and working families -- with no concern for income or economic status.
Fixing these three issues is the key, and it should be approached from a bottom-up perspective (i.e. what should localities do, what should the state co-ordinate, and then how should we find an equitable way to fund the obligations of government without punishing the working families of Virginia).
Those are my brief thoughts, anyhow.
- comment Mike
- body
- Vivian,
Regardless of how the graduated income tax breaks down, the fact remains that it still punishes the individual for earning more money.
In any event, it's like I said before ... taxes should NOT be a means of acquiring an income for the government. It should be nothing more than a bill for services (that are to the purview of the government alone) rendered . All ense should be released to the free market.
10 Comments:
The answer is not to replace the property tax, but to eliminate pork spending.
Taxes shouldn't be collected money intended to fund certain projects ... they should be bills for services rendered. That's why the precinct system in Ney York worked so well for so long. The same goes for volunteer fire and rescue. The government (federal, state or local) should NOT be in the business of utilities, but should be available to break up monopolies on such necessities.
Because of the way the system is set up now, any one of the things currently under the auspices of the government could be released to the public and a system of billing over taxing could very easily be established.
This would lower taxes considerably and eliminate any form of tax that is reliant upon your estimated "value".
Income tax hurts the poor as well as the rich. Most politicians and lobbyists are not also economists ... they are attached to an agenda based upon the stirring of emotions.
1) It is a fallacy that a graduated tax system based upon income benefits anyone but those doing the taxing. The graduated income tax is a means of centralizing wealth in order to perpetuate a need in centralized government. The larger the entity becomes, the more money it needs to feed it, and consequently, the more inefficient it becomes. That is simply a law of physics ... the most efficient machines have few moving parts. When you add more parts, it takes more energy to move it because more evergy is lost in the process (on an exponential level), until the machine eventually becomes untennable. The same is true in business efficiency. The larger it becomes, the more work is involved is keeping it afloat until eventually it starts taking in more than it puts out.
The graduated income tax system is designed specifically to feed such a beast because it sets the initial budgetary supply before it, allowing it to feast upon it at its own pace, without having to work for it's keep, and when it runs out, it will simply demand more.
Think of it this way. A farmer places a year's supply of food before one ox, and the other he makes work for its food. The first ox, operating without restrictions, will gorge itself on whatever is available until it is all gone, while the other is forced to feed on what is available at the time. The first ox will run out of food and demand more before it will work again, while the second ox, being used to living on a budgeted food supply will continue to work for just what it needs in order to live.
2) By taxing income, you place a burdon on businesses by making it impractical to give small raises. A man earning $61,300 per year has a 15% tax rate, but a man making $62,000 per year has a 25% tax rate. In order for the man allegedly earning the higher income to bring home MORE than the man seemingly earning less than he is, the business would have to increase his salary by $10,000. And for the raise to be a real raise, the company would actually have to increase his salary by at least $15,000, otherwise the raise doesn't exist and the man in the higher bracket has no incentive to work for that level of pay. Furthermore, the fact that the company has to pay more means that there is a greater strain on the company, which means that the company has to raise it's prices in order to keep it's hard working employees. Now, imagine how that tax burden is then transferred to the guy earning $10/hour. Pulling in only $20,000 per year, his tax rate is 15%, which nets him $17,000. However, his money won't go very far because that 25% tax rate is going to trickle down to him in the average cost of goods. The general effect is that it keeps the poor poor and prevents anyone from ever being capable of getting rich.
Imagine what would happen if the man earning $61,300 did so through his own business, but the following year earned a little more, propelling him into the 25% bracket. He would then suffer a significant loss, forcing him to fire the guy he was paying $10/hour becaus he could no longer afford him, while propelling his prices in an attempt to make up the difference. It's a lose-lose situation, and those who support taxes based upon value or earnings does so out of emotion rather than an understanding of economic principles.
James: Republicans don't hate the income tax, nor does it benefit the poor and/or punish the rich. Thankfully, the economics department at UMW is pretty good, so please take a macro and micro economics class there.
Mike: ... to the rescue.
Jim: I think we do argue two different perspectives. I would argue that the decision is made by local governments as pure policy, but your line seems to argue that local governments are pressured into thinking that way by their consititency (fearful of devaluation in their homes).
I do agree we are arguing basically the same concept, but I don't see local governments bending on knee to one development over a developer with a "smart growth" solution.
Anything that improves the tax base is a net positive for a local government. My experience has been that it's more calculus than common sense, at least in the Fredericksburg area.
When you take that into consideration, your $15,000 figure is a heck of a lot less.
The married guy with taxable income of $20,000 is barely in the 15% bracket, with the bulk of his income being taxed at 10%.
Such is the nature of the graduated income tax.
Back to my original question: localties rely heavily on the real estate tax. Unless you are willing to reduce services (and while there may be some pork in local budgets, it's not like there is a whole lot of fluff, so the bulk of the revenue would have to be replaced. So what are you going to replace it with?
(1) There's plenty localities are doing that the private sector could perform.
(2) The relationship between the state and localities when it comes to taxation is broken beyond repair.
(3) The property tax system is a punative, regressive form of taxation that punishes the poor and working families -- with no concern for income or economic status.
Fixing these three issues is the key, and it should be approached from a bottom-up perspective (i.e. what should localities do, what should the state co-ordinate, and then how should we find an equitable way to fund the obligations of government without punishing the working families of Virginia).
Those are my brief thoughts, anyhow.
Regardless of how the graduated income tax breaks down, the fact remains that it still punishes the individual for earning more money.
In any event, it's like I said before ... taxes should NOT be a means of acquiring an income for the government. It should be nothing more than a bill for services (that are to the purview of the government alone) rendered . All ense should be released to the free market.
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