Taxes, schmaxes who really cares.
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I'm no economist but no country is an island :-) You haven't taken into account the interplay between different countries. It doesn't take much to get into the top tax bracket here in Australia and once people get there, there is little incentive to work harder since *half* of your income goes to government. Companies can't afford to bump up the salaries to compensate since they need to compete with companies overseas. Also, people tend to leave for other countries where they *will* be rewarded for their efforts.
he he he. I like it in the kitchen! - Marc Clifton (on taking the heat when being flamed) Awasu v0.4a[^]: A free RSS reader with support for Code Project.
Taka Muraoka wrote: You haven't taken into account the interplay between different countries. Yes, I know.:-O I thought about limiting the idea to a closed system when I was writing the post. But considering that system would have to be global and tax rates vary all over, it gets pretty complicated. Saying that, the idea certainly doesn't apply as a "real world" model, but that doesn't mean that it is entirely useless (provided I can prove its even true :confused: ) After all, we predict weather (or try to), without taking into account the global system. Taka Muraoka wrote: It doesn't take much to get into the top tax bracket here in Australia and once people get there, there is little incentive to work harder since *half* of your income goes to government. That's a big issue I have against graduated income taxes. Those who are more productive, economically speaking, get punished for their efforts, while those on the other end get rewarded. I really don't agree with income tax at all, but if we are to have onee I am all in favor of a flat rate across the board. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
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I had a conversation today with a friend of mine about an economic theory we have. Basically, the idea is excluding the extremes of 0% and and 100%, the tax rate of a nation is irrelevant over time. The idea is that the market naturally progresses towards a price equilibrium, and the innate value of goods in relation to each other does not change in the short run. This means that the cost of living will find a way to be met within the confines of available cash flow of society. So if the overall tax rate went up to 80%, demand would initially decrease but eventually prices would find an equilibrium again via deflation, and you again have the same level of quality of life relative to others at different income levels. Likewise, if taxes dropped to 10% overall, the disposable income would eventually drive up demand, and logically prices, until an equilbrium was reached at a higher level. This is a very simple version of the concept, as it doesn't take much into consideration, for example what the taxes are used for. In any case, I thought it sounded interesting enough, and I was hoping to get some input before digging deeper. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
Intersting, IMHO: { I think you have made a leap from fiscal to monetary policy that is not normally allowed in macro economics. I can only think of two countries off hand who don't use "optimal taxation methedology." Their are so variables and paradoxes in economic modelling that it is impossible to predict much that is truly worthwhile. For instance a drop in interest rates of 1% could mean economic growth, but 2% could lead to a recession. Or underflation is considered to be more dangerous than inflation. (Although no one has experienced it properly) Lets say a govt using a mean 25% tax decided to increases taxes ny 8% but supply total health care, in effect they are just dollar swapping with the overall taxpaying public. Taxation policy is an important issue that is not understood by most politicians apparently. } Regardz Colin J Davies
Sonork ID 100.9197:Colin
You are the intrepid one, always willing to leap into the fray! A serious character flaw, I might add, but entertaining. Said by Roger Wright about me.
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Taka Muraoka wrote: You haven't taken into account the interplay between different countries. Yes, I know.:-O I thought about limiting the idea to a closed system when I was writing the post. But considering that system would have to be global and tax rates vary all over, it gets pretty complicated. Saying that, the idea certainly doesn't apply as a "real world" model, but that doesn't mean that it is entirely useless (provided I can prove its even true :confused: ) After all, we predict weather (or try to), without taking into account the global system. Taka Muraoka wrote: It doesn't take much to get into the top tax bracket here in Australia and once people get there, there is little incentive to work harder since *half* of your income goes to government. That's a big issue I have against graduated income taxes. Those who are more productive, economically speaking, get punished for their efforts, while those on the other end get rewarded. I really don't agree with income tax at all, but if we are to have onee I am all in favor of a flat rate across the board. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
brianwelsch wrote: while those on the other end get rewarded well... there's really not much glamour at the low end of the tax scale - there's probably a lot of living check-to-check, visiting those "cash your check in advance" places and general borderline poverty. that "reward" of not paying 50% federal taxes is probably a lot more meaningful to someone making $20K/yr than it is to someone making $200K. it's just simple human decency to let people at the bottom end of the scale keep more of what they earn. -c
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Intersting, IMHO: { I think you have made a leap from fiscal to monetary policy that is not normally allowed in macro economics. I can only think of two countries off hand who don't use "optimal taxation methedology." Their are so variables and paradoxes in economic modelling that it is impossible to predict much that is truly worthwhile. For instance a drop in interest rates of 1% could mean economic growth, but 2% could lead to a recession. Or underflation is considered to be more dangerous than inflation. (Although no one has experienced it properly) Lets say a govt using a mean 25% tax decided to increases taxes ny 8% but supply total health care, in effect they are just dollar swapping with the overall taxpaying public. Taxation policy is an important issue that is not understood by most politicians apparently. } Regardz Colin J Davies
Sonork ID 100.9197:Colin
You are the intrepid one, always willing to leap into the fray! A serious character flaw, I might add, but entertaining. Said by Roger Wright about me.
Are there countries with zero tax??? I guess there must be, and I bet it'd be fun to live there too Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
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Are there countries with zero tax??? I guess there must be, and I bet it'd be fun to live there too Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
Nishant S wrote: and I bet it'd be fun to live there too as long as you don't like roads, i bet it's great :)
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Taka Muraoka wrote: You haven't taken into account the interplay between different countries. Yes, I know.:-O I thought about limiting the idea to a closed system when I was writing the post. But considering that system would have to be global and tax rates vary all over, it gets pretty complicated. Saying that, the idea certainly doesn't apply as a "real world" model, but that doesn't mean that it is entirely useless (provided I can prove its even true :confused: ) After all, we predict weather (or try to), without taking into account the global system. Taka Muraoka wrote: It doesn't take much to get into the top tax bracket here in Australia and once people get there, there is little incentive to work harder since *half* of your income goes to government. That's a big issue I have against graduated income taxes. Those who are more productive, economically speaking, get punished for their efforts, while those on the other end get rewarded. I really don't agree with income tax at all, but if we are to have onee I am all in favor of a flat rate across the board. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
brianwelsch wrote: the idea certainly doesn't apply as a "real world" model, but that doesn't mean that it is entirely useless Then it just becomes so much academic masturbation (apologies for the metaphor :-) ). Even the most hard core of theoretical pondering needs to have some practical application otherwise it becomes akin to wondering how many angels can dance on the head of a pin. brianwelsch wrote: After all, we predict weather (or try to), without taking into account the global system. I'm no meteorologist either but I suspect that this is not a good analogy. When predicting the weather, the dominating influence would be the weather patterns in our immediate surroundings so we don't neeed to put so much weight on to what is happening on the other side of the world. This differs from job mobility where I can be anywhere else on the planet in 24 hours and start work the next day. But I would be surprised if these guys didn't look at global weather patterns at least some of the time. brianwelsch wrote: am all in favor of a flat rate across the board I lived and worked in Hong Kong for a while where everyone (individuals and companies) pay a flat 17.5% tax across the board. I'm not sure what the social or economic implications of such a thing are but it was certainly great, financially! BTW, isn't sad how quiet things are around here right now :(( I have friend who used to log into chat rooms several times, start an argument with himself and try to draw people into it. Sad sack (hi Bill!)...
he he he. I like it in the kitchen! - Marc Clifton (on taking the heat when being flamed) Awasu v0.4a[^]: A free RSS reader with support for Code Project.
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Nishant S wrote: and I bet it'd be fun to live there too as long as you don't like roads, i bet it's great :)
Chris Losinger wrote: as long as you don't like roads, i bet it's great If a country is wealthy enough to afford zero tax, wouldn't there be enough money for roads and stuff? :confused: Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
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Are there countries with zero tax??? I guess there must be, and I bet it'd be fun to live there too Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
I think there are. Some of the smaller mega-wealthy oil-producing countries (can't remember which, off-hand) have 0 tax, free university education, medical cover, etc. Just wait 'til the oil runs out, though... :-)
he he he. I like it in the kitchen! - Marc Clifton (on taking the heat when being flamed) Awasu v0.4a[^]: A free RSS reader with support for Code Project.
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Chris Losinger wrote: as long as you don't like roads, i bet it's great If a country is wealthy enough to afford zero tax, wouldn't there be enough money for roads and stuff? :confused: Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
Nishant S wrote: If a country is wealthy enough to afford zero tax, wouldn't there be enough money for roads and stuff? where would the money come from? (assuming it's not a state full of slaves)
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Nishant S wrote: If a country is wealthy enough to afford zero tax, wouldn't there be enough money for roads and stuff? where would the money come from? (assuming it's not a state full of slaves)
Chris Losinger wrote: where would the money come from? (assuming it's not a state full of slaves) Oil, I guess. I think some of the Gulf countries dont take tax. Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
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I think there are. Some of the smaller mega-wealthy oil-producing countries (can't remember which, off-hand) have 0 tax, free university education, medical cover, etc. Just wait 'til the oil runs out, though... :-)
he he he. I like it in the kitchen! - Marc Clifton (on taking the heat when being flamed) Awasu v0.4a[^]: A free RSS reader with support for Code Project.
Taka Muraoka wrote: Some of the smaller mega-wealthy oil-producing countries (can't remember which, off-hand) have 0 tax, free university education, medical cover, etc. Yup, thats what I think too. maybe Kuwait... Not very sure though Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
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brianwelsch wrote: while those on the other end get rewarded well... there's really not much glamour at the low end of the tax scale - there's probably a lot of living check-to-check, visiting those "cash your check in advance" places and general borderline poverty. that "reward" of not paying 50% federal taxes is probably a lot more meaningful to someone making $20K/yr than it is to someone making $200K. it's just simple human decency to let people at the bottom end of the scale keep more of what they earn. -c
Chris Losinger wrote: it's just simple human decency to let people at the bottom end of the scale keep more of what they earn. I agree that it is a decent thing to do. But, I do think there is something inherently wrong with the graduated system. It is very discouraging to see your hard work being pissed away. Not to mention the loopholes. I know from personal experiance it's not too difficult to evade a large portion of your taxes through perfectly legal tax shelters. Chris Losinger wrote: well... there's really not much glamour at the low end of the tax scale There isn't much glamour in the middle either. In fact that is where people get screwed the most. God forbid if you are a married couple. I know it may not seem to others that it hurts much but, for a young couple trying to plan and save for the furture it is outright depressing. We realy need a comprimise, and something to simplify the tax laws and reduce the loopholes. A simple flat-tax may not be answer but the current system is broken and needs to be fixed. Fill me with your knowledge, your wisdom, your coffee.
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Taka Muraoka wrote: Some of the smaller mega-wealthy oil-producing countries (can't remember which, off-hand) have 0 tax, free university education, medical cover, etc. Yup, thats what I think too. maybe Kuwait... Not very sure though Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
Nishant S wrote: maybe Kuwait Probably. I was thinking Brunei.
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Chris Losinger wrote: where would the money come from? (assuming it's not a state full of slaves) Oil, I guess. I think some of the Gulf countries dont take tax. Nish
Author of the romantic comedy Summer Love and Some more Cricket [New Win] Review by Shog9 Click here for review[NW]
hmm. yeah. that's a pretty special case, tho - and they don't have much of anything else going on there. it's oil and oil accessories. there's no way a normal country could do that and still build roads. -c
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Chris Losinger wrote: it's just simple human decency to let people at the bottom end of the scale keep more of what they earn. I agree that it is a decent thing to do. But, I do think there is something inherently wrong with the graduated system. It is very discouraging to see your hard work being pissed away. Not to mention the loopholes. I know from personal experiance it's not too difficult to evade a large portion of your taxes through perfectly legal tax shelters. Chris Losinger wrote: well... there's really not much glamour at the low end of the tax scale There isn't much glamour in the middle either. In fact that is where people get screwed the most. God forbid if you are a married couple. I know it may not seem to others that it hurts much but, for a young couple trying to plan and save for the furture it is outright depressing. We realy need a comprimise, and something to simplify the tax laws and reduce the loopholes. A simple flat-tax may not be answer but the current system is broken and needs to be fixed. Fill me with your knowledge, your wisdom, your coffee.
Chris Austin wrote: A simple flat-tax may not be answer but the current system is broken and needs to be fixed. i agree. i don't think the problem is with the poor paying too little, though. there's really not much to be gained from taking more money from people who need every cent just to survive. i agree with the idea of 'reducing spending' that i hear the republicans talk so much about. now if they would just do that, we might be able to actually afford a tax cut or two. personally, i'd prefer if they started with defense-welfare programs like missile defense and GulfWar II : that's $200B+ right there. -c
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brianwelsch wrote: while those on the other end get rewarded well... there's really not much glamour at the low end of the tax scale - there's probably a lot of living check-to-check, visiting those "cash your check in advance" places and general borderline poverty. that "reward" of not paying 50% federal taxes is probably a lot more meaningful to someone making $20K/yr than it is to someone making $200K. it's just simple human decency to let people at the bottom end of the scale keep more of what they earn. -c
It's not matter of who lives better at all, but rather whats fair. Does someone making 100K use more government services, than someone making 20K? With the exception of possibly using transportation routes more due to inheritly more consumption of goods, I would say 'No'. So why then should someone pay more in taxes, percentage-wise, simply because they make more money? I realize that people get on hard times, and some type limited government assistance is fine in those cases, but our current system is beyond rediculous. Reduced spending is also a means of flattening the scale. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
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Intersting, IMHO: { I think you have made a leap from fiscal to monetary policy that is not normally allowed in macro economics. I can only think of two countries off hand who don't use "optimal taxation methedology." Their are so variables and paradoxes in economic modelling that it is impossible to predict much that is truly worthwhile. For instance a drop in interest rates of 1% could mean economic growth, but 2% could lead to a recession. Or underflation is considered to be more dangerous than inflation. (Although no one has experienced it properly) Lets say a govt using a mean 25% tax decided to increases taxes ny 8% but supply total health care, in effect they are just dollar swapping with the overall taxpaying public. Taxation policy is an important issue that is not understood by most politicians apparently. } Regardz Colin J Davies
Sonork ID 100.9197:Colin
You are the intrepid one, always willing to leap into the fray! A serious character flaw, I might add, but entertaining. Said by Roger Wright about me.
Colin Davies wrote: Their are so variables and paradoxes in economic modelling that it is impossible to predict much that is truly worthwhile. True enough. Especially when considering an increasingly global market. It's still fun to contemplate how it really works, and propose "what ifs". Colin Davies wrote: Taxation policy is an important issue that is not understood by most politicians apparently. That is a flaw in democracy I suppose. Those that get elected do not have any required knowledge regarding economics, history, law, .... Yet, they make all policies. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
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It's not matter of who lives better at all, but rather whats fair. Does someone making 100K use more government services, than someone making 20K? With the exception of possibly using transportation routes more due to inheritly more consumption of goods, I would say 'No'. So why then should someone pay more in taxes, percentage-wise, simply because they make more money? I realize that people get on hard times, and some type limited government assistance is fine in those cases, but our current system is beyond rediculous. Reduced spending is also a means of flattening the scale. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
brianwelsch wrote: So why then should someone pay more in taxes, percentage-wise, simply because they make more money? because the govt requires money (our precious 'way of life' doesn't come free), and you can't get money from the poor, the govt has to get the money where it can. brianwelsch wrote: Reduced spending is also a means of flattening the scale yep. too bad that will never happen. -c
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I had a conversation today with a friend of mine about an economic theory we have. Basically, the idea is excluding the extremes of 0% and and 100%, the tax rate of a nation is irrelevant over time. The idea is that the market naturally progresses towards a price equilibrium, and the innate value of goods in relation to each other does not change in the short run. This means that the cost of living will find a way to be met within the confines of available cash flow of society. So if the overall tax rate went up to 80%, demand would initially decrease but eventually prices would find an equilibrium again via deflation, and you again have the same level of quality of life relative to others at different income levels. Likewise, if taxes dropped to 10% overall, the disposable income would eventually drive up demand, and logically prices, until an equilbrium was reached at a higher level. This is a very simple version of the concept, as it doesn't take much into consideration, for example what the taxes are used for. In any case, I thought it sounded interesting enough, and I was hoping to get some input before digging deeper. BW "If you enjoy what you do, you'll never work another day in your life." - Confucius
A more significant issue might be taxation on consumption versus income. IMHO a consumption tax on all non vital (food, medicine, fuel/electricity, etc.) items is inherently fairer than any income tax (flat or graduated). Income taxation is fatally flawed for all the many reasons mentioned in the posts so far. It is intended by most states that use graduated income taxation to act in large part as a mechanism for redistributing wealth...at which it rarely succeeds. Some ideas are so stupid that only an intellectual could have thought of them - George Orwell
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A more significant issue might be taxation on consumption versus income. IMHO a consumption tax on all non vital (food, medicine, fuel/electricity, etc.) items is inherently fairer than any income tax (flat or graduated). Income taxation is fatally flawed for all the many reasons mentioned in the posts so far. It is intended by most states that use graduated income taxation to act in large part as a mechanism for redistributing wealth...at which it rarely succeeds. Some ideas are so stupid that only an intellectual could have thought of them - George Orwell
i agree. sales tax is definitely the most fair. and there should be very clearly defined execptions and no loopholes or special cases for business vs personal. but, it'll never happen - not even the most strident republican would dare drop the income tax altogether. -c