Which Tax Basis Best Balances Economic Goals?

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Discussion Overview

The discussion centers on the question of which tax basis best balances economic goals, exploring various taxation methods including income tax, property tax, and consumption tax. Participants examine the implications of these tax systems on consumption, savings, and overall economic impact, while also considering fairness and the perceived value of government services.

Discussion Character

  • Debate/contested
  • Conceptual clarification
  • Exploratory

Main Points Raised

  • Some participants argue that a consumption tax could lead to reduced consumption and increased savings, but they express uncertainty about its overall economic impact.
  • Others suggest that property and sales taxes are preferable, with one participant advocating for a sales tax cap of 7% and questioning the sustainability of abolishing income tax.
  • A proposal is made for a broader taxation approach that includes various forms of exchange and transfer, indicating a preference for a more comprehensive tax system.
  • Concerns are raised about the fairness of taxing the wealthy more than others, with discussions on whether a flat tax or a progressive tax system is more justifiable.
  • Some participants highlight the benefits that the wealthy receive from government services, questioning how much more they should pay compared to lower-income individuals.
  • There is a discussion on the potential risks of overhauling the current tax system, with some arguing that the existing system functions adequately despite its flaws.
  • Participants express differing views on the relationship between income, wealth, and tax burdens, particularly regarding small business owners and inherited wealth.

Areas of Agreement / Disagreement

Participants do not reach a consensus on the best taxation method, with multiple competing views and ongoing debate about fairness, effectiveness, and the implications of various tax systems.

Contextual Notes

Limitations include varying definitions of fairness, the complexity of measuring benefits received from government services, and the unresolved question of how to assess the appropriate level of taxation for different income groups.

  • #121
Generally, in a tribal setting, those who are more able... give more... it isn't legislated away from them... they give more because their catch needs processing and they can't do the processing themselves so they give a percentage to the people helping to process the catch (buffalo, fish, money (whathaveyou). As I said, a monetary system costs millions if not billions to maintain.
 
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  • #122
stewartcs said:
How does the airline industry not pass along cost again? Last time I flew I had to pay 15$ to check my bag and $5 for a "snack and drink". I didn't have to pay for that in years past.

For some years after Sept. 11 the airlines were able to pass along almost none of the cost increases. At the moment they still haven't been able to pass much along. Essentially the only increases have been the surchanges you mention. And there was a good period where they couldn't even manage that.

There's no law stopping them from charging more for fares, they just haven't been able to sell enough tickets when they do. The surcharges allow for second-degree price discrimination which makes raising prices somewhat easier.
 
  • #123
stewartcs said:
To take the approach that those more able have more to lose simply because they own more "stuff" (property, cars, boats, whatever) if the government falls into anarchy is, in my opinion, misguided.

Why?
 
  • #124
For an outside perspective:
http://gregmankiw.blogspot.com/2008/01/four-goals-of-tax-policy.html

1. Efficiency: The tax system should distort incentives as little as possible (and, in the case of externalities and Pigovian taxes, correct incentives when necessary).

2. Intergenerational equity: The tax system should raise enough revenue so current generations do not unduly burden future generations.

3. Egalitarianism: The tax system should try to achieve a more equal distribution of after-tax incomes.

4. Stabilization: The tax system should help maintain the economy at full employment.
 

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