The current taxation system distorts economic activity and creates bloated government agencies and paperwork. Taxing capital and labor distorts economic activity. Taxing investment gains discourages investments in new businesses and those existing ones that want to expand (as well as penalizing those who invest in securities to fund their retirements or children's college funds). Taxing employee wages and salaries contributes to labor shortages because they increase both employer and employee tax burdens, and for someone making only minimum wage, that definitely decreases the amount of money they could use to support themselves. The employer could use it's share of the employment taxes to either invest in the business or provide more benefits to the employee, and the employee could use their share to buy more goods and services, or invest for their future. The minimum wage is a price floor on labor costs. Any student of Econ 101 knows that price floors create surpluses, because not all of the supply can be bought, since the price can't go to equilibrium. If we eliminate both the minimum wage and employment taxes, employment should rise because all of the labor available can be used, and none of the wages are going to taxes, so the employee gets to keep more of their lower pay, and the employer has lower costs. Until automation takes over, which will eliminate some jobs and create others. We must always remember that the amount of work available is not static, it is dynamic. Outsourcing destroys some jobs and creates new ones. Also, Social Security is an incredibly stupid and fraudulent method of providing for retirement. Taxing current employee wages, putting those taxes into a fund to pay retired employees, and "investing" the excess receipts in US Treasuries will only work as long as people keep entering the workforce and the government doesn't default. If people stop entering the workforce or inflation destroys the value of the Treasury bonds, those poor retired people will be very upset. If a private employer ran their pension plan the way the government runs Social Security (use a portion of current employees wages to fund retired employees' pensions, and invest the excess receipts in their own bonds), the SEC would charge them with racketeering, because that is a Ponzi scheme, which is completely unsustainable. Employers should be required to have an independent financial advisor invest, in an individual trust account, a portion of their employees' wages in quality securities so the employees can fund their retirement, and this fund can be drawn on the employee at any time for any reason, and is turned over to the employee upon resignation, termination, or retirement. The employer should also be required to put a portion of their wages in a general trust account funded by every employee, which pays out non-cosmetic employee healthcare expenses that are above 10% of the employee's salary/employee/year, the excess receipts being invested by the trustee for the fund. Also, the board of directors of corporations should be split into two levels: a supervisory board that consists of representatives from the shareholders, creditors, employees, and outside experts, who appoints the management board, which oversees day-to-day operations. The only thing the government should tax are the things the government itself provides: land ownership rights and intellectual property rights, because these produce economic rent. Profit-seeking behavior should be encouraged, but not rent-seeking behavior, as those attempt to increase one's share of existing wealth without creating any new wealth. Taxing land values will encourage development of marginal areas and reduce real estate speculation and asset bubbles, as now people have to pay to hold land (the land tax can be deferred until the land is sold or is inherited). Taxing IP rights will deter patent trolls and submarine patents, and encourage people who apply for patents to make sure they are commercially viable and can provide an income from either being used in their business or by being licensed to those who can make use of them. And taxing imports through customs duties is protectionism, which limits consumer choice. Economies need to follow comparative advantage: specialize in producing only those things where you have it, and trade for things where you don't. The total value of land and IP in America is worth a combined $26.5 trillion (IP value from http://www.ecommercetimes.com/story/75527.html, land value from http://www.slate.com/blogs/moneybox/2013/12/20/value_of_all_land_in_the_united_states.html). Taxing those at 7.5% annually will create a annual tax revenue of $1.99 trillion. And we can eliminate the IRS, as well as most of customs, save for the border protection part. If we combine this with an electricity-backed currency (http://www.politicalforum.com/econo...d-transition-electricity-backed-currency.html), we will have a economic golden age because taxes will be borne only by those who are most able to pay, and the money supply will keep pace with economic activity, as interest and exchange rates will be free to go where the market determines they need to be.
The only way to remove tax distortions from the economy is to tax all economic activity at exactly the same rate, no exceptions. To think that some other scheme will accomplish the task is just rearranging deck chairs on the Titanic.
I'm beginning to see that taxing land will cause issues in valuation. There are four factors of production: 1. Capital, which are goods and services used in production (commonly termed "capital goods") of value 2. Labor, which is the ability to produce value, both in physical and intellectual terms 3. Land, which are natural and intellectual property rights from which value can be produced 4. Entrepreneurship: the ability to produce the most value from combining the above three factors Payment for the use of capital is called (economic) interest, payment for the use of labor is called wages, the payment for the use of land is called rent, and the payment for use of entrepreneurship is called profit. Taxing wages will increase the cost of labor at no benefit to the laborers, as the employer has to pay more for than the fair value of the labor, and the laborers receive less than the fair value of their labor, this will decrease production. Taxing interest will decrease the production and sales of capital goods, for much the same reason, also decreasing production. Taxing rent will tax something no individual or company had a hand in producing, as rents are derived from the community's assessment of land value, and this will decrease production as well, as it will decrease the value of land. Entrepreneurs are the engines of the economy, as they are critical in determining how to extract the most value from scarce resources. The only thing we can tax without lessening production is profit, as taxing everything else is basically taxing scarcity, as laborers and capital goods could be used for other things, and land could be used for building or farming instead of mining or drilling. The owner of a business or a shareholder in a corporation is an entrepreneur (and may also be a laborer as well). Their net profits should be taxed (no deductions allowed), and we should eliminate double-taxation for stock dividends. We should also eliminate the minimum wage, as price floors create labor surpluses, so eliminating it will raise employment. Now, only business owners are taxed, and taxed only on the profit from their business activities, and the laborers get to keep more of their wages.
Get rid of a debt based monetary system (which eliminates the need for the Federal Reserve) and you have no need to collect taxes at the federal level at all. Only state and local taxation would be necessary to fund those entities because they don't have monetary sovereignty like the federal government does. Force people to instead invest what used to be collected in federal taxes and they could sustain their own retirement without need to rely on the government.
Well, I have suggested that taxing entrepreneurial profits, and only entrepreneurial profits, would be the best system, followed by taxing only land, followed by taxing revenue. Either tax only profits, or tax only land values. Don't tax gross revenue and don't tax all economic activity, because a good amount of economic activity is just shuffling money around without actually creating wealth. If we switch to an electricity-backed currency, the money supply will keep pace with economic activity, as all economic activity requires electricity to proceed. http://www.politicalforum.com/econo...d-transition-electricity-backed-currency.html
Taxing economic rent is the most efficient way of raising public revenue, because it does not negatively affect the decisions of the laborers, capitalists, or entrepreneurs. For example, lets say there are three types of land to produce wheat: 1. Prime land, located next to clean river and the market, with good soil and sun. Cost to produce one bushel of wheat: $1. All this land is taken to provide wheat to the military, and only the military. 2. Ordinary land, located farther away from the river and the market, with okay soil and sun: Cost to produce one bushel of wheat: $1.10. All this land is taken as well to provide wheat to the city residents. 3. Bad land, next to a polluted river, far away from the market, soil needs much fertilizer. Cost to produce one bushel of wheat: $3. None of this land is used currently. 70,000 bushels of wheat are demanded by the city's one million residents at the current price of $1.10/bushel, and the market is in equilibrium. The following year, the population grows by 10%, and 80,000 bushels of wheat are now demanded. Since the market is in equilibrium, only 70,000 bushels of wheat can be produced if nothing changes, so the farmer has to use the bad land, where it will cost $3/bushel to produce. Two things will happen: 1. Although the total amount of wheat eaten would increase, each person would eat less wheat since it would cost more 2. Land that was uneconomical suddenly is usable Since wheat will now cost more, people will buy less to save money, so lets say the quantity demanded of the next year is only 76,000 bushels. The 6,000 bushels of wheat produced on the bad land would not make a profit, but it would break-even. Since the market is in equilibrium, all the wheat produced will sell at $3/bushel. The extra $1.90/bushel earned from wheat produced on the ordinary land is called scarcity rent, the profit earned solely through owning a more efficient piece of land. So the value of the ordinary land goes up quite a bit. This is why taxing land values will allow tax revenue to grow as the economy grows.
how about we reduce govt and military by 90%, do away with all welfare, of all types and fund things with voluntary payment for services and also with lotteries. if you have to FORCE people to pay you, you're wrong, and you're evil. It's obvious that if people won't voluntarily pay for a given good or service, they don't really want it. and they certainly dont deserve to have it.
Let's start with minimum wage. There is an optimum wage level that achieves full employment and higher wages that contrary to the good nature of angelic capitalists some how rarely happens in the real world which is why minimum wages are a good thing. This is advanced econ...beyond 101. Basically the US can raise the minimum wage to $15 an hour increase employment ando have no increase in price of goods because the US wages are way below this optimum level. Moving on to taxes. Capital needs to be taxed in slow growth economies to redistribute gains that would other wise become concentrated into an ever increasingly small elite group of capitalists. As long as the return on capital (historically 4 to 5 %) is greater than economic growth (in the US it is less tHan 2% or it is negative 3% if you subtract deficit spending ) then the owner of capital increases wealth. That wealth becomes concentrated. What about the wage laborer in a low growth economy? Do they get richer? No. So the wealth must be taxed and reredistributed. Will lower taxes produce more wealth? No because of over supply. Reagan's brilliant plan means now we have small businesses everywhere. We don't need more burger kings. We don't need more gas stations. We don't need more shoes. Over supply is so Perfidious as to potentially lead to a catastrophic great depression. We don't need more of anything. If all people in the world stopped working...we would have things for the next 3 to 5 years. That is the catastrophic reresult of supply side econimics. A total failure.
You're over complicating it. Just have a real capital gains tax at 30% instead of 15%. If you earn a historical return on capital of 4 to 5% then 30% tax means you still earn 2.74% to 3.5% At current GDP growth rates the Capitalist still becomes richer than everyone else in the economy by nature of owning a greater percentage of the capital than the economy is producing. So if growth rates are 1% a capitalist can be taxed against his historical immutable return of 4 to 5% aat a rate of up to 80%.... And still be gaining more share of total capital in the economy. If the goal of taxation were to keep the top 1% from owning more and more of all the available capital, then at a 1% growth rate 80% taxation is nowhere near enough. The rich will still get richer.
Who are you to speak for every single consumer and their needs? Redistributing wealth is morally wrong. It brings everyone down because it removes the incentive to invest or produce, look at what happened in the greatest experiment of wealth redistribution, Stalinist Russia. Do you really want to live like that? The rich getting richer is not a problem.
It's not morally wrong. When you literally make money without having to work that is MORALLY WRONG. A capitalist who owns capital receives 4% on return and generations later his family members owning that capital never had to work for it and make money solely off the profit of other people's labor. . By what right does the son of an innovator deserve to live without work and go to the best schools to ensure all the right connections? Not only is your world view morally bankrubankrupt and unjustifiable it is anti-christian. The rich getting richer is a problem because capital should be owned by the people who use it to give it value. John Locke said (or hobbes before him) that ownership comes from putting work into a thing. Thus a person who works land is justifiably the owner if that land. Such a system cannot justify capitalism. Stalinist Russia wasn't wealth redistribution your understanding of fascist Russian kleptocracy is an insulting result of your propaganda fed education. Why don't you compare the US to France when talking about socialism? Or Germany? Both are extremely socialist nations with high median incomes, wage caps, and large wealth taxes. You can't even pass wealth from father to first born in France it has to by law be evenly divided among all descendants.
No, taxing land (not real property like buildings, just the land) and IP values is the most economically fair way of taxation. The capitalist, by owning most of the land and IP, will pay the greatest percentage of taxes. All economic wealth is ultimately derived from land and IP. Without land, food, energy,and raw materials cannot be produced, and without IP, nobody has any incentive to innovate or research technology, and these are the foundations of any economy. People have a right to keep the economic profit they receive, because those economic profits came from their effort alone. They do not have the right to keep all of the economic rent they receive, because economic rents are a share of the community's wealth. Land and IP property rights are granted and enforced by the government. The government can only tax the things itself creates. Once again, the total land values in America as of 2014 are $14.5 trillion (http://www.slate.com/blogs/moneybox/2013/12/20/value_of_all_land_in_the_united_states.html), and the total value of all IP in America is $12 trillion (http://www.ecommercetimes.com/story/75527.html). If we tax these values at a base rate of 7.5%, we'd have just under $2 trillion in tax revenue, and we can eliminate the IRS and pare Customs down to it's border protection duty. And these taxes will be far easier to administer than income and capital gains and payroll tax, and require far less paperwork. There will be no ability to evade a land and IP value tax. Go read the works of Henry George.
Furthermore the early Republican party was more socialist than capitalistic. Theit argument against slavery was an economic one. The capitalist slave owner devalued labor. The Republicans were not capitalist because they did not represent the capitalist class. They represented the working class. They fought for dignity of work and higher wages and value of labor against capitalist interest. Against capitalist interest they gave away land nearly free to create the largest ownership class in history. Nearly 3/4ths of Americans owned their own property (land in farms or stocks in companiss) under Republican leadership until the gilded Era transformed capitalist power in America. You've been living a lie. You entire reality of what made America Great is a lie. What made America great and gave it the wealthiest middle class in history was socialism. Was political power of the working class. First in Republicans. Then in Democrats.. Now capitalists own both parties. Look at the result. $13/hr median wage. No growth economy. Richest capitalists in the world. Everyone else poor as hell. Pathetic. Lies. ThThats what YOU BELIEVE IN.
It's called providing for future generations. If I work my ass off during my life to ensure my children will have the best life possible when I die, and he adds more wealth to it for his children, and so on and so on, how is that wrong? Entrepreneurship is work. It is intangible, intellectual work, but it is work. I take land, labor, and capital and turn them into something that creates wealth. If you've never run a business before, you should shut up immediately. Running a business is incredibly hard work. How is government taxation of someone's efforts to create wealth, and someone's maintenance and improvement of the wealth created by their predecessor not a kleptocracy? We're not dealing with what philosophers say constitutes ownership, we're dealing with what centuries of legal precedent say about what constitutes ownership. Employees can easily buy shares in their employer, nobody's preventing that. Many do. Also, the purchasing power of wages varies depends on where you live! $13/hr can buy a lot if you're in West Virginia!
I applaud creative ideas. I just fear the medicine will be worse than the sickness. The first thing the government needs to do is think much much more carefully about where they allocate the money they spend. Addressing the immigration issue would not hurt either. When it comes to the economy, it's the huge elephant in the room no one is talking about.
If the medicine has a 50% risk of death and a 50% chance of cure, and the disease is 100% fatal, take the medicine. We need to stop illegal immigration. We should be all for legal immigration and free international trade, for that is how economies benefit. Protectionism is rent-seeking behavior designed to increase someone's share of existing wealth without creating any new wealth. Labor unions contribute to unemployment by creating artificial shortages in the labor market. Trade tariffs allow inefficient domestic producers to continue to be inefficient since they are protected from foreign competition, so labor unions and trade tariffs cause misallocation of resources. The government should spend more on healthcare and welfare and education. Taxing land and IP values, and eliminating all other taxes and tariffs will raise just about $2 trillion in taxes, and lower the government's costs. Radical feminism is disgusting. Normal feminists are fine. Oh, and btw, in equine herds, the mares are the natural leaders, not the stallions.
I do not trust those Keynesians. They take huge amounts of money and just throw it out there, hoping it will make a difference. Maybe Keynesianism is something to take into account, but the theory is often used to justify reckless waste of money. If the government wants to "stimulate" the economy, they should just give poor people money. If we lived in a world with land value taxation and highly controlled immigration, I might actually agree with you, that protectionism would not be the most economically ideal, theoretically. However, as things are now, protectionism plays an important role. Workers in developed countries just cannot all compete with workers in other countries with lower standards of living. I suppose it is a sort of "rent seeking" but it helps counteract the "rent seeking" of land ownership, giving some balance between workers and owners of capital. Domestic producers still have to compete with each other within the country. If the country is large enough, there is no real reason why they should have to compete with outside producers. Unless it involves tropical fruit or some type of ore that the country has difficulty producing. When we talk about competition, usually we are talking about labor costs. If there is plenty of work for everyone and good wages in your country, then yes competition makes sense. But why try to find cheaper labor elsewhere when there are not enough decent jobs for all your citizens?
You have failed to 1) morally justify inherited wealth and 2) answer my questions economically. I frankly don't give a damn if you call it "providing for future generations". You're not dealing with legal precedent either. Frankly you don't know what you're talking about. Why is France and Germany doing so well? Employees can buy shares in their company? They can save that much money? Bull crap.
All rent-seeking is morally wrong, because it is effectively confiscating the efforts of another. If we do have trade tariffs, they should only be on inferior goods, because this will encourage domestic producers to be as efficient as possible before they need to rely on imports. The amount of labor available is dynamic. Some types of jobs disappear, new ones are created every day due to technology. All economic stimulus need to be given to the poor and those in disadvantaged industries.
this is just idiotic. food has to be produced, EVERY day. so does fuel, parts for transportation, etc. you'd have a complete disaster on your hands in less than a week if everyone stopped working.
The politician. Financial speculators provide a service of generating liquidity. - - - Updated - - - Where did I ever say people would stop working?
No, financial speculators do not do that, financiers do that. There is a difference, subtle but critical. Financiers make liquidity available, i.e. they rent money. Financial speculators do not rent money, they borrow other people's money to collect rent. Financial speculators deploy money to collect rent by buying and selling stocks, bonds, commodities, debt, currency and all the derivatives of these things. Politicians are gutter snipes compared to financial speculators, not even worth considering as true rent seekers.
