Is there a moral basis for taxation?

The devil is in the details, but concisely:

The greatest good is served by people getting a fair chance to excel including but not limited to having their basic needs met. This motivates people to be productive while also minimizing suffering. Without taxation of some form there is no government. Without government people organize into tribes where the strong exploit the weak - increasing chaos, i.e. suffering and inefficiency.

A fair chance is determined partly by what society can offer. For example no rights can be enjoyed without basic health, e.g., and so access to a basic level of healthcare and public health is a right now while it was not before healthcare was effective. A fair chance along with progress towards better ideas and technology is promoted by free speech and assembly. A fair chance does not mean equality of outcomes (communism), but there are diminishing returns both for society and the individual when it comes to one successful person hoarding wealth, and so progressive income taxation is a positive thing in a utilitarian sense.

Tyranny of the majority​

 

I chose not to vote because the options in the poll are worded too confusingly and ambiguously.

Probably a lot of other people are going to not vote in this poll as well, but they are probably not going to bother posting here.

It would have been better to phrase the question a different way, like on a spectrum.

 

Too much money chasing too few goods is the standard metaphor for explaining inflation by the monetarists, Milton Friedman, Alan Greenspan, etc.

It's a metaphor, to arguing over 'too much' is, well, If I ask you about a law you made ( say you were a law maker ) and you had a sunset clause in it,
I wouldn't nitpick whether the sunset had lots of red and blue in it, or was it cloudy. We're not actually talking about a real sunset. That's kinda what you are doing, asserting that there is no 'should', it's a moot point, we're not actually talking about money actually physically chasing anything.

Money doesn't actually physically chase anything, it's just passed from hand to hand, but the metaphor helps us understand how inflation is caused.

The more money is pumped into the economy faster than goods and services are produced, people will naturally bid up the price of things as they compete for products, similar to what would happen if we doubled the bank accounts of all the bidders on Ebay, bids would rise, overall. But, if the sellers added more of the same products, increasing supply, then prices wouldn't rise.

But, scarcity, per se, isn't' inflation. Abundance of money, i.e., a government flooding the economy with more money than products or services can keep up with it, will result in inflation. That's when the dollar devalues. There no 'should' on the amount, the more money that floods, the more inflation. Those who can't hedge for that devaluation, are subsidizing those who do hedge, who are the rich and the government.

The way the government does this is by lowering interest rates on the rate they charge banks, called the 'discount rate'. The discount rate is the gas pedal. but, for a long time, the government lowered the rate to zero, and this is causing the money supply to increase, but the money isn't reaching the general public, it's going to the super rich, who are bidding up stocks, real estate, and their investments, and ( and bidding up raw materials, which causes everything to rise ) so they are making out like bandits and everyone else has to pay higher prices.

The bottom line is that those who can't hedge, who are not profiting from inflation, they are subsidizing the government and the rich. what government is literally doing by lowering the discount rate to zero, they are transferring wealth from the rest of us (who can't hedge) to the super rich and the government this scheme has been going on for some time now. This is why I said inflation is a tax on the poor and many in the middle class who cannot hedge like the rich can.

This is why Trump wants the discount rate to be zero, because he and his cronies make out like bandits. So do MMTers, but they don't understand how the discount rate is a gas pedal for inflation, they are nuts.

things that affect supply and demand affect prices, but do not affect inflation. i just explained what it is, there is no other cause.

You got to understand one fundamental point, that a price rising is not necessarily inflation. Supply and demand, by the many various reasons, affects price, prices go up, they go down, by many various supply and demand aspects but the aggregate trend line rising can only be caused by more fiat currency being pumped into the economy faster than the economy can keep up with it. THAT is inflation, the devaluing of the dollar. When the dollar was pegged to gold, the government was able to do it in a keystroke, by adjusting now many dollars are pegged to an ounce, but they can't do that now since Nixon unpegged the dollar to gold. Other countries can do it with respect to the dollar because the dollar is the world currency reserve ( we are doomed if that fact collapses on us ). But what they (the gov ) can do is QE ( quantitative easing, increasing the money supply, printing money, digital and paper) The book I mentioned, came out a year before Nixon 'devalued' the dollar, which he did in 1973 and the book, "How To Profit The Coming Devaluation" (Harry Browne) came out in 1972. That book explains inflation. Read it!

What find amazing is how many educated people fail to grasp this one point. All of the economists such as Milton Friedman, Harry Browne, etc., they understand it, but many economists do not, they ramble on about all those other factors, such as you are doing, but understand this one thing, in a swimming pool, lots of things cause the water to go up and down, up here, down there, but the rising tide in the pool will not go up, unless you pump more water in the pool. The economy is the same on this point. Trying to complicate it only addresses temporal factors of supply and demand, remember, a rising price isn't necessarily inflation. It's the rising trend that IS inflation and the dollar losing it's value. That's a tax.

Interest is just a price for a service, the service of loaning money. USURY is just overcharging, and these do not cause inflation, per se, no more than someone overcharges you for pizza because you weren't looking. These are problems that need addressing, but it misses my fundamental point.

These are all factors and problems that need to be addressed, but none of them as anything to do with my overall point.

Inflation causes wealth to transfer from the poor to the super rich, and to the government.

Those who benefit from inflation are the super rich and the government. the poor are subsidizing both.

Those who say the rich are paying all the taxes, no, their wealth grows faster than the rate they are taxed, because of inflation, and therefore, they pay no tax at all. Their wealth ultimately comes from the rest of us, collectively, via inflation. They pay taxes in the de jure sense, but not in the de facto sense.

This is why the rich are getting richer and the poor are getting poorer.

When I got out of high school, rent was $80 for a single apartment. Today, it is $1000 - 1500 or so ( avg most big cities) . one pay check from a low wage job ( if you are paid weekly ) would pay the rent for a studio apartment in 1969. Today, name one low wage job that pays $1000 - 1500 per week.

The rich are getting richer, the poor are getting poor, and the mechanism that drives this disparity are two factors:

1. The discount rate is much lower than it was when I was in high school.
2. The progressive tax that existed when I was in high school no longer exits. It's much flatter now.

These two factors are because of neoliberal economists influencing policy.

The assumption by the neoliberals is that, as Reagan said, "a rising tide lifts all boats". In other words, helping the rich helps everyone else.

History proves this false, and, all it does is transfer wealth from you and me to them and the government.

This is why I, as a progressive, recommend four things:

1. Raising the discount rate to what it was in 1962 ( 3.125% )
2. Install a progressive tax policy ( much more than now similar to waht it was in the 50s, but easier on the middle and low wage earners)
3. Instead of Warren's wealth tax, I favor a tax on religion, but keeping charities tax free. When they don't pay taxes, everyone else pays their share, and that amounts to a subsidy by the tax payer, which is, in point of fact, a violation of the constitution, a violation of the first amendment.
4. Install universal health care.

These will reverse the wealth gap, fill the nation's coffers with plenty of money for social programs, everyone will be stress free because everyone will have health care and no insurance company can drop you.

As for insurers, since medicare or all pays only 80%, private insurance will take up that slack. Or we eliminate private insurance and do medicare for all, 100% ( boutique items excluded, like cosmetic surgery, dental implants, that sort of thing ).

Nothing else will fix the problem of the rich getting richer and the poor getting poorer, this is the solution that will do it more than anything else.

There are other things that can be done, but they are window dressing to the real problem.

 

I simplified it because, in other debates, some are implying that taxes are immoral, and when I pinned them down, they admitted they are okay with taxes they think are just.

It can't work that way. Either taxes are moral and just or they are not. There is no middle ground ( which is why I took it out of the poll )

You can't say "only taxes I approve of are moral". If an individual can say that, so can everyone else who disagrees, and then we have chaos.

The debate isn't is about the morality of taxes, they are moral ( I believe they are, but I wanted to find those who thought they weren't, if they are out there )
the debate is about what taxes should be collected, how they are collected , and what they should be spent on.

Taxation, in principle, is a just and moral thing.

 

I like what you said, but 'tyranny of the majority' ? As opposed to what, tyranny of the minority ?

 

I take issue with the 'moral/just' description. Taxes are necessary for society to function. Property taxes specifically undermine the concept of property ownership, a fundamental concept of capitalism. Everything property taxes pay for could be paid for by other taxes without effectively making the govt our landlord renting our property to us.

Its not moral or immoral and its not just or unjust. But it is unnecessarily authoritarian.

 

You think voluntary taxation would work? I don't.

 

Technically the income tax is voluntary. Its effectively a tax on the use of a state-issued currency. Limiting oneself to barter (ie- gold) is one method of avoiding tax liability. Its not exactly feasible for the average American, merely possible. But it is a demonstration of, perhaps in the extreme, voluntary taxation supporting the needs of society.

Do you think it could be workable to replace property taxes with an increase in, for example, income taxes?

 

Historical evidence is only evidence of past automation and replacement. It's not necessarily indicative of what's going to happen for the simple fact that times are different.

For instance, the work ethic of today is much different than it was even just 30 years ago. Additionally the jobs of today are far more complex than they were even just 20 years ago. Also the replacement rate of the past is just about new jobs being taken, not who was taken them or thier previous occupations or thier age. As Yang noted when the older generation, in thier 40s, was replaced due to advancing technology and re-education programs that were established for them had an abysmal failure rate. Meaning those people dropped either out of the work force because they could not get another job or had to work for a much lower paying job greatly impacting thier quality of life...even at times losing thier homes.

 

Voluntary taxation was tried once before. When we had the Articles of Confederation. The federal government not getting enough money was one of the main reason we now have the current Constitution.

 

Yes, the Constitution, in part, came into being because of the need for forced taxation.

 

We have a common infrastructure we need to support. Debating what that infrastructure should be is healthy.

Personally I believe a healthy, educated, and secure citizenry is essential for a flourishing state. Therefore those three broad categories are the priority's. How we efficiently and effectively deliver that state of being should be a perpetual debate.

There is a myriad of antiquated systems and ideas that need to be challenged in this country.

 

Yang is a smart guy, he brings up very good points.