Korean Job Discussion Forums

ontheway · Posted: Fri Apr 17, 2009 8:08 am Post subject:

Now the solution.

As I've posted previously, we need to repeal ALL taxes on income and property in the United States.

Income and property taxes can never be fixed, overhauled or repaired. There is no way to make them fair. There is no way to use these taxes without severely distorting the economy, imparing productivity growth, hampering economic growth and hurting the lower income and middle income groups the most.

We also get massive malinvestment and misallocation of resources that amount to tens of trillions of dollars already.

Further, income taxes (including the horrible, regressive socialist security tax) are complicated and unfair. They are most easily avoided by the politically powerful classes (politicians like the Kennedys that have hundreds of millions of dollars in assets hidden away in trusts, tax free.)

The answer is to abolish all taxes on income and property and institute a simple, across the board consumption tax.

A consumption tax would be a sales tax, VAT, or some variant. There is a big movement to make such a swap on a revenue neutral basis. This would be much too great of a burden for the economy, of course, as the total tax level is already much too high. But the switch needs to be made. We just have to drastically cut the size and scope of the government at the same time. Given the current state of the economy, the need for massive reduction in the size of government is apparent to every real expert on the economy.

ontheway · Posted: Fri Apr 17, 2009 8:11 am Post subject:

ontheway · Posted: Fri Apr 17, 2009 8:29 am Post subject:

The reason we need to make the switch to a single, consumption tax is to make the system fair, friendly and promote maximum savings, investment and economic growth.

The income tax was one of the primary goals of the socialist and communist movements. The various forms of income taxation have cost the world hundreds of trillions of dollars in lost investment or malinvestment and has cost the world at least 1 billion good jobs.

There are ways to shelter investment funds for certain groups. You can start a corporation when you are young and leave your earnings inside the business entity. You can use one of the sheltered retirement accounts for investments. The wealthy can set up very clever trust funds that let them live a good life, tax free, or nearly so.

These options are not available to most poor and middle class workers who want to climb the ladder to the American dream.

The solution is, of course, to abolish income and property taxes. Let the people who are consuming their money pay for the consumption of government. Let everyone who is investing do so tax free, without the complication of legal forms that are impossibly difficult for ordinary Americans to utilize.

Those Americans who are saving and investing will be able to do so tax free, whether they save $10 or $10 billion. These are the productive people who make the country grow.

They will be able to save for short periods or long periods. They will be able to do so without the current fear of being locked-in to some investment when they might need the money for some major life event such as a home purchase, educational expenses for a child, major health payment or whatever. This element of being a freely available option that can be chosen without any paperwork whatsoever is absolutely essential to allow the lowest income Americans the option to save, invest and build their personal and family portfolios.

Those Americans who choose to spend everything will pay the maximum consumption tax rate.

Those Americans who save, invest and build the economy will pay less according to how much they save.

Finally, eliminating the paperwork burden of the income and property taxes, will save tens of billions of dollars annually, and relieve a major contributor to personal and family stress in America.

There is, in fact, no benefit to continuing the use of income taxes or property taxes in any form.

Kuros · Joined: 27 Apr 2004

Leslie Cheswyck · Joined: 31 May 2003 Location: University of Western Chile

Abolish all payroll taxes. Hello? Jobs?

mises · Joined: 05 Nov 2007 Location: retired

It is very irresponsible. It is also generational theft, but the boomers have screwed the next two generations already.

There is a second stimulus in the works, apparently will be 600-700b. There is no way this kind of budget will get financed for several years.

Tough choices are just around the corner. Obama doesn't have what it takes. So we have to hope the Republicans can do better? Good grief.

mises · Joined: 05 Nov 2007 Location: retired

Hater Depot · Joined: 29 Mar 2005

I worry about falling into a liquidity trap and our own lost decade or worse. If that is inevitable then the budget and the stimulus and the fed's actions are indeed wasteful. But we don't know that, and it's probably worth taking the chance.