Why does Government bother collecting "taxes"?

Discussion in 'Finance' started by Robert, May 14, 2016.

  1. Econ4Every1

    Econ4Every1 Well-Known Member

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    I'm not, I'm trying to get you to see the consequences of what you're asking.

    Of course

    Totally agree.


    Ok, so let's say I accept your premise. The government needs cleaning up. Let's say the government was able to eliminate "stupid spending".

    Let's say that it eliminated $500 billion in spending.

    What are the pros and cons (if any) of that?
     
  2. DennisTate

    DennisTate Well-Known Member Past Donor

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    Actually yes.... because a lowering of taxes... would put more money in the hands of
    individuals who would spend the money and create jobs.

    Individuals would tend to spend money more wisely than government does.... so
    a reduction of taxes would be an exceptionally good idea.

    I suspect it will have to be individuals, not government who come up with
    a true Unified Theory of Modern World Problems.

    Post #20 here shows how a small political party though may be willing to tackle questions that a large party would tend to avoid.

    http://www.politicalforum.com/index.php?threads/jamie-baillie-nova-scotia-israel-and-jordan.506627/
     
    Last edited: Jul 20, 2017
  3. DennisTate

    DennisTate Well-Known Member Past Donor

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    Good points.........
    it does seem that government messes up just about everything that they get involved in.........

    Enthusiastic sales people for massive companies like Monsanto, who have quite a few government officials in their pockets.... seem to be quite willing to destroy the North American agricultural industry, over the long term, with technology as dangerous as terminator seeds.

    Russia Says No to GMO Seeds
    http://www.politicalforum.com/index.php?threads/russia-says-no-to-gmo-seeds.466314/
     
  4. Econ4Every1

    Econ4Every1 Well-Known Member

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    Do you just make this stuff up? 1/3 of Americans save nothing for retirement and 2/3rds saving nothing into an employer sponsored 401k. I don't have numbers for IRA, but I doubt their much better.
     
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  5. Econ4Every1

    Econ4Every1 Well-Known Member

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    Under the current system...

    If the government repaid all of its obligations, it would have to tax $14 trillion out of the private sector economy (About $6 trillion it owes to itself). This would simply exchange US treasuries for US dollars. At that point, assuming the government didn't create any new debt, every dollar in existence will have been created as a bank debt. SInce the government can't create new debt, the economy would find itself $4 trillion dollars short, not to mention the near $600-$800b lost to the trade deficit.

    The lack of government created dollars would create a liquidity crisis and lending would stop. The economy would react by contracting and each day the amount of money repaid on loans would exceed money borrowed. Since repayment of loans effectively destroys currency, the amount of currency in circulation would shrink. Now the economy would crash and burn LONG before all currency vanished, but, if in theory currency changed hands just right, eventually all US government dollars would vanish.
     
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  6. squidward

    squidward Well-Known Member

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    You'd have to retire all of the private debt as well
     
  7. Econ4Every1

    Econ4Every1 Well-Known Member

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    Once the government repaid all US treasuries, all that would exist is private debt. All of the dollars that existed, would exist because someone somewhere borrowed them from a bank. So people would work to earn the dollars to repay those debts. Repayment of the debt would permanently "retire" those dollars and the number of dollars in circulation would steadily shrink.

    When I say that, I'm talking about private debt. There wouldn't be any government debt if the US government taxed away enough money to repay the debt.
     
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  8. Ronstar

    Ronstar Well-Known Member Past Donor

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    no, they spend our money
     
  9. Econ4Every1

    Econ4Every1 Well-Known Member

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    So, hypothetically, if we were to start the economy fresh, where would the Federal Government get money? Tax it? How could it tax it if it hasn't spent it into circulation yet?

    Why does the government spend first, then tax after the fact? If the government was spending tax money, shouldn't it be the other way around?
     
  10. DennisTate

    DennisTate Well-Known Member Past Donor

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    I do believe that there are a number of alternatives.........
    ...... One of them involves a Unified Field
    Theory of Modern World Problems......... (post #127 above)

    One of them involves a real estate boom in America's rural communities.......

    http://www.politicalforum.com/index...-fed-policy-pay-off-usa-national-debt.489825/

    One of them involves making war against the USA and her allies an astonishingly
    unwise thing to do........

    http://www.politicalforum.com/index.php?threads/can-the-f-35-play-a-role-in-world-peace.504246/
     
  11. Ronstar

    Ronstar Well-Known Member Past Donor

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    if we started at zero on Jan 1st 2018, the Feds would get a shitload of money on April 15th from income, corporate, payroll and capital gains taxes.

    the rest comes from bonds and Treasuries.
     
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  12. squidward

    squidward Well-Known Member

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    If we started from zero, there would be nothing to pay payroll or gains or associated taxes with
     
  13. Ronstar

    Ronstar Well-Known Member Past Donor

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    most income taxes, capital gains taxes, tarriffs and corporate taxes are in no way related to federal funding.
     
  14. wgabrie

    wgabrie Well-Known Member Donor

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    The Government doesn't have control of the central banking system. The Federal Reserve Bank is a private entity.

    Core thesis rejected.
     
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  15. Ronstar

    Ronstar Well-Known Member Past Donor

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    who selects the Board of Governors of the Federal Reserve?
     
  16. wgabrie

    wgabrie Well-Known Member Donor

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    According to the Wikipedia article:
    Federal Reserve Board of Governors
    Do you know what this means??? It means I've been watching too many doom and gloom YouTube videos about the coming economic collapse.

    But it also means that maybe private entities aren't cashing out of the system in a mad free-for-all dash for cash until the system collapses like a house of cards.
     
  17. wgabrie

    wgabrie Well-Known Member Donor

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    Anyway, as for the topic of the OP, I'm under the impression that the Government's budget is at the consumer part of the economy where they have to PAY private entities, not at the beginning of the economy where the magic money creation happens. Nor at the end where the money disappears.
     
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  18. Ronstar

    Ronstar Well-Known Member Past Donor

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    but...but....Project Prophecy!!! Jim Rickards!!!


    ;)
     
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  19. DennisTate

    DennisTate Well-Known Member Past Donor

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    Unless.........somebody came forward who could unite Jews, Christians.....and a high percentage of Muslims......
    around a central group of goals..... one of which would be the rebuilding of the Jerusalem Third Temple.

    http://www.politicalforum.com/index...on-could-bring-world-out-of-recession.406872/

    Artistic Hollywood style "Armageddon" could bring world out of recession?!
     
  20. DennisTate

    DennisTate Well-Known Member Past Donor

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    Within six months I predict that you will indeed be glad that we are living in a Jubilee year..... (or it begins on Yom Kippur 2017, assuming that Rabbi Judah ben Samuel is correct).

    We are all set up for a paradigm shift in thinking on economics.......
    this other writing that I did back in 2007.... is not such a terrible place to
    begin on this........


    http://www.politicalforum.com/index...for-25-million-virgin-earth-challenge.371794/

    My two somewhat humorous submissions for $25 million Virgin Earth Challenge.

    Anti-Armageddon Paradigm Shift Monetary Policy Theory The Introduction.
     
  21. Econ4Every1

    Econ4Every1 Well-Known Member

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    You don't understand what I'm asking.

    Let's say you started a brand new government on an island. The nation agrees to adopt the US system, they set up the Treasury and the Central Bank (on paper). Like the US government, your new nation only accepts the dollars it creates for taxes.

    If that's the case, how does the new nation begin? It can't take the people because they don't have any money and (according to you) the government only spends money it takes in taxes.....

    Now what?
     
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  22. Longshot

    Longshot Well-Known Member

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    This would be impossible. The new nation would need to, as the US did, accept the currently existing money being used by society. After it was up and running, it would be able to slowly transition, as the US did, from the money that had been chosen by society to it's government-mandated fiat dollars.
     
  23. squidward

    squidward Well-Known Member

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    The dollars in circulation are, which would be none
     
  24. tkolter

    tkolter Well-Known Member

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    It helps me fund SSI, Medicaid, Snap and other welfare programs I benefit from so taxation is important to me.
     
  25. squidward

    squidward Well-Known Member

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    Perhaps you weren't paying attention.
    All the leech programs can be funded without taxation
     

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