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Hypothetical Tax Proposal Needs Your Imput

Khaos_Mage
Posts: 23,214
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1/7/2013 1:40:39 AM
Posted: 3 years ago
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.
My work here is, finally, done.
Wnope
Posts: 6,924
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1/7/2013 1:49:55 PM
Posted: 3 years ago
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

Well, you've got to consider that tax revenue is directly dependent on how well businesses are doing, and inopportune tax increases can hurt businesses.

The issue is where precisely you'd find this new revenue. For instance, would it be an across-the-board rise numerically equalivalent, in which case you're putting a higher burden on the lower classes (since a larger proportion of their salary must be used on basic needs and cannot be used for investment/savings/luxury)?
tkubok
Posts: 5,044
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1/7/2013 2:07:34 PM
Posted: 3 years ago
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

Against it. WHY THE FVCK
Khaos_Mage
Posts: 23,214
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1/7/2013 2:46:15 PM
Posted: 3 years ago
At 1/7/2013 1:49:55 PM, Wnope wrote:
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

Well, you've got to consider that tax revenue is directly dependent on how well businesses are doing, and inopportune tax increases can hurt businesses.

The issue is where precisely you'd find this new revenue. For instance, would it be an across-the-board rise numerically equalivalent, in which case you're putting a higher burden on the lower classes (since a larger proportion of their salary must be used on basic needs and cannot be used for investment/savings/luxury)?

It would be an accross the board surtax, based on actual income, not taxable income. So, yes, it would burden the poor in this regard, but most of the poor pay no income taxes, so a $50 hit is not something to really compain about. Also, they are disproportionately benefitting from the deficit spending and debt increase, so they should be liable in paying the debt down.

Keep in mind the guy making $1 million, who'll pay about $200K in federal taxes, would pay an additional $2,500, as well.

The additional benefit to this, is if it really is a huge burden for the poor, then maybe they will tell their legislators to stop spending so much, so this burden is lifted. The idea is, everyone will have skin in the game: those that benefit most will pay for any shortfalls of the government, and those that can afford it will pay "slightly" more, but still benefit from the solvency of the country.
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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1/7/2013 2:49:33 PM
Posted: 3 years ago
At 1/7/2013 2:07:34 PM, tkubok wrote:
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

Against it. WHY THE FVCK

Why are you against it?
This would make everyone, including the poor, have skin in the game, and get the country back to solvency.
My work here is, finally, done.
innomen
Posts: 10,052
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1/7/2013 3:02:36 PM
Posted: 3 years ago
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

It's not a bad idea, it's just that we have a corrupt government, and congress cannot be trusted. I don't trust that it will remain a tax exclusively for the debt, just like social security taxes go into the general fund, they will do the same. It will go into the general fund, and be a fake label, like social security, and just be given to congress for more pork.
Khaos_Mage
Posts: 23,214
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1/7/2013 3:25:57 PM
Posted: 3 years ago
At 1/7/2013 3:02:36 PM, innomen wrote:
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

It's not a bad idea, it's just that we have a corrupt government, and congress cannot be trusted. I don't trust that it will remain a tax exclusively for the debt, just like social security taxes go into the general fund, they will do the same. It will go into the general fund, and be a fake label, like social security, and just be given to congress for more pork.

A valid concern; however, your example of social security is flawed. Social Security's excess holdings, by law, were to go into the general fund via treasury bills/bonds.

http://www.ssa.gov... (subsection/paragraph "d")
"It shall be the duty of the Managing Trustee to invest such portion of the Trust Funds as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States."
My work here is, finally, done.
innomen
Posts: 10,052
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1/7/2013 3:32:00 PM
Posted: 3 years ago
At 1/7/2013 3:25:57 PM, Khaos_Mage wrote:
At 1/7/2013 3:02:36 PM, innomen wrote:
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

It's not a bad idea, it's just that we have a corrupt government, and congress cannot be trusted. I don't trust that it will remain a tax exclusively for the debt, just like social security taxes go into the general fund, they will do the same. It will go into the general fund, and be a fake label, like social security, and just be given to congress for more pork.

A valid concern; however, your example of social security is flawed. Social Security's excess holdings, by law, were to go into the general fund via treasury bills/bonds.

http://www.ssa.gov... (subsection/paragraph "d")
"It shall be the duty of the Managing Trustee to invest such portion of the Trust Funds as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States."

I don't understand the flaw. The decision to lump them into the general fund (under Johnson) had the same effect of allowing that money to be used for purposes other than the original intent.
1Percenter
Posts: 781
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1/7/2013 3:37:37 PM
Posted: 3 years ago
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

Why should we implement a broad tax for the purpose of paying off debts? Treasury securities are automatically paid out to their holders as they expire. We must have a balanced budget, so we stop borrowing more than we are paying out, before we can expect the debt to decrease.

Another criticism is that it distracts from the real driver of the debt -- spending. Revenue is not the problem, excessive spending is. A tax for debt payments would invoke a mentality that American's aren't paying enough already.
CarefulNow
Posts: 780
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1/7/2013 3:58:02 PM
Posted: 3 years ago
Why should it end and restart at all? Shouldn't it adjust more smoothly, even turning into a subsidy at a certain point? And surely Pigovian or progressive taxes would be preferable to untargeted income taxes in the current context.
Contra
Posts: 3,941
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1/7/2013 7:35:02 PM
Posted: 3 years ago
If this tax was combined with fundamental entitlement reform, aka gradually privatizing these programs, I'd probably be okay with this minimal tax.

It's certainly not the end of our problem though, as gov't should massively cut spending and provide tax relief. The government should slim down to a smaller size and balance the budget so our fiscal health can return.
"The solution [for Republicans] is to admit that Bush was a bad president, stop this racist homophobic stuff, stop trying to give most of the tax cuts to the rich, propose a real alternative to Obamacare that actually works, and propose smart free market solutions to our economic problems." - Distraff

"Americans are better off in a dynamic, free-enterprise-based economy that fosters economic growth, opportunity and upward mobility." - Paul Ryan
Khaos_Mage
Posts: 23,214
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1/7/2013 8:54:44 PM
Posted: 3 years ago
At 1/7/2013 3:32:00 PM, innomen wrote:
At 1/7/2013 3:25:57 PM, Khaos_Mage wrote:
At 1/7/2013 3:02:36 PM, innomen wrote:
At 1/7/2013 1:40:39 AM, Khaos_Mage wrote:
I do not want this thread to be bogged down into "not enough" or "too high", but I am curious as to people's views on this hypothetical tax increase:

Starting at the beginning of any calendar year, on all income earned, unearned, and passive, a tax surcharge of 0.25% ($25/$10K) will be assessed and used for the express purpose of paying down outstanding debt. This will occur until the total debt reaches 30% of GDP, at which point the surtax will cease to be collected until at any year-end GDP is equal to or greater than 80% of GDP, at which time the tax will be collected in the same manner.

Forgive my lack of legalese, and I am not so concerned with the debatable figures of starting and stopping or amount collected.

Basically, I am wondering if people would be in support of a very small additional tax used exclusively to pay down the debt, until a certain level of debt occurs.

It's not a bad idea, it's just that we have a corrupt government, and congress cannot be trusted. I don't trust that it will remain a tax exclusively for the debt, just like social security taxes go into the general fund, they will do the same. It will go into the general fund, and be a fake label, like social security, and just be given to congress for more pork.

A valid concern; however, your example of social security is flawed. Social Security's excess holdings, by law, were to go into the general fund via treasury bills/bonds.

http://www.ssa.gov... (subsection/paragraph "d")
"It shall be the duty of the Managing Trustee to invest such portion of the Trust Funds as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States."

I don't understand the flaw. The decision to lump them into the general fund (under Johnson) had the same effect of allowing that money to be used for purposes other than the original intent.

What purpose was that?
To my understanding, the excess was, from the original law, to be invested in national debt, which probably fueled unneeded spending. But, if it wasn't spend, it would sit there and collect interest, at the cost of taxpayers who then have to pay the interest.

The argument was probably made that these excess funds will fuel spending (Kensyian), thus generate more tax revenue via a stronger economy, which would be used to pay the interest on the debt held by the SS trust.

I don't understand, or know, what Johnson did, but it seems more like an accounting issue than a means to access these funds. Please elaborate on this, if you would.
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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1/7/2013 8:57:27 PM
Posted: 3 years ago
At 1/7/2013 7:35:02 PM, Contra wrote:
If this tax was combined with fundamental entitlement reform, aka gradually privatizing these programs, I'd probably be okay with this minimal tax.

It's certainly not the end of our problem though, as gov't should massively cut spending and provide tax relief. The government should slim down to a smaller size and balance the budget so our fiscal health can return.

I agree with your second point.
Do you think this minimal tax, without meeting your first criteria, would lead citizens to hold the government more accountable, thus allowing the spending cuts and privatization to materialize? After all, EVERYONE would have skin in the game, including the poor and the retired.
My work here is, finally, done.
socialpinko
Posts: 10,458
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1/7/2013 9:49:39 PM
Posted: 3 years ago
At 1/7/2013 8:57:27 PM, Khaos_Mage wrote:
At 1/7/2013 7:35:02 PM, Contra wrote:
If this tax was combined with fundamental entitlement reform, aka gradually privatizing these programs, I'd probably be okay with this minimal tax.

It's certainly not the end of our problem though, as gov't should massively cut spending and provide tax relief. The government should slim down to a smaller size and balance the budget so our fiscal health can return.

I agree with your second point.
Do you think this minimal tax, without meeting your first criteria, would lead citizens to hold the government more accountable, thus allowing the spending cuts and privatization to materialize? After all, EVERYONE would have skin in the game, including the poor and the retired.

You're overemphasizing the "skin" in the game though. 25$ out of every 10K is hardly a noticeable burden to anyone.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
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: I disagree.
RoyLatham
Posts: 4,488
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1/8/2013 12:50:07 AM
Posted: 3 years ago
The yearly added deficit is about $1.3 trillion. Total tax receipts are $2.3 trillion, with roughly half from income taxes. So collecting an extra $3 billion ($0.003 trillion) in taxes is pointless.

The principle is fine, but a balanced budget amendment is needed first in order to stop the deficit from increasing. There is an old joke about a Texan bringing his Cadillac into a gas station for a fill up. The attendant pumping gas says, "You have to shut off the engine. I'm losing." Old joke, sound principle.
Khaos_Mage
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1/8/2013 2:24:57 AM
Posted: 3 years ago
At 1/8/2013 12:50:07 AM, RoyLatham wrote:
The yearly added deficit is about $1.3 trillion. Total tax receipts are $2.3 trillion, with roughly half from income taxes. So collecting an extra $3 billion ($0.003 trillion) in taxes is pointless.

The principle is fine, but a balanced budget amendment is needed first in order to stop the deficit from increasing. There is an old joke about a Texan bringing his Cadillac into a gas station for a fill up. The attendant pumping gas says, "You have to shut off the engine. I'm losing." Old joke, sound principle.

Fair enough, but that yearly deficit is also the current/last few years. If it weren't for the recessions of 2001 and 2008, the deficits shouldn't have been too bad. Plus, once (hopefully) the wars end, the deficit should be closed once the stimulus is also shut off.

Also, my proposal is on all income, not taxable income. So, my estimates are $30 billion, which admittedly, is not a whole lot, but it's something. I like the idea of a balanced budget law, but I think it is moot in practice. Sure, the budget could be balanced, but then comes discretionary spending. If this is not allowed, there is no way to be sure the budget is truly balanced, as expenses/revenues may not be as expected. It is a pointless endeavor, as there will be ways around it.
My work here is, finally, done.
Contra
Posts: 3,941
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1/8/2013 3:12:00 PM
Posted: 3 years ago
At 1/7/2013 8:57:27 PM, Khaos_Mage wrote:
At 1/7/2013 7:35:02 PM, Contra wrote:
If this tax was combined with fundamental entitlement reform, aka gradually privatizing these programs, I'd probably be okay with this minimal tax.

It's certainly not the end of our problem though, as gov't should massively cut spending and provide tax relief. The government should slim down to a smaller size and balance the budget so our fiscal health can return.

I agree with your second point.
Do you think this minimal tax, without meeting your first criteria, would lead citizens to hold the government more accountable, thus allowing the spending cuts and privatization to materialize? After all, EVERYONE would have skin in the game, including the poor and the retired.

Maybe, but as others have already said, the tax would be minimal, so it would likely be unnoticed. Want people to hold government more accountable? It would unfortunately have to a be a higher tax for people to notice, but it might be worth it if it addresses our tax and spending problems.
"The solution [for Republicans] is to admit that Bush was a bad president, stop this racist homophobic stuff, stop trying to give most of the tax cuts to the rich, propose a real alternative to Obamacare that actually works, and propose smart free market solutions to our economic problems." - Distraff

"Americans are better off in a dynamic, free-enterprise-based economy that fosters economic growth, opportunity and upward mobility." - Paul Ryan
CarefulNow
Posts: 780
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1/8/2013 4:27:04 PM
Posted: 3 years ago
Everyone already has skin in the game--the poor and retired most of all, because the reduction in the value of goods and services provided by government consequence of inefficient government is all the more severe when those goods and services are of an essential nature.