Speckle-Tax - the final solution

[Tigger]

I think it's just the opposite of what you see. An absolutely open system.

Lets say you make $52K a year and you're paid by check. Deposit it, cost $520.00. Let's say you pay 100% of your bills by check. Cost $520.00. In the meantime, you earn another $20K on your investment in Solyndra bonds. Eventually, you decid to take out $20K of your money, income or principal. Tax $200.00. So your annual tax is $1240.00. How is this so complicated?

How many people are so extreme that they only use cash? Not many. If they do, OK, great, save the taxes. That money ill eventually wind up in a bank account and ther last owner of that money will pay the 1% tax.

So, what do you find so secretive about that?

Some of us do prefer to use cash, but you're right it isn't many of us anymore. I write, at most, 3 checks a month. Everything else gets paid in cash or via online payment. I get my check direct deposited. Most people do not think about checks and things like that as being the sort of transactions that this would pertain to. Remember, we truly do have people in society who say.... "I can't be out of money, I still have checks."

 

[specklebang]

OK, but bear in mind that you'll only pay the tax once, when you deposit the main check. Then, if you send ME a check for $500.00 as a Specklebang For President donation, I'll be the one who pays the $5 tax when I deposit the check, not you. When I buy campaign flyers, I'll send a check to Odinga Printing co., and they'll pay the 1% tax, not me. When Odinga pays their worker Ralph, he'll pay the 1% tax, when Ralph buys a toilet tank float at AllMart, they'll pay the 1% tax. Etc. etc. What's not to like?

I'm surprised at the lack of enthusiasm for my brilliant plan.

I may withdraw my candidacy and just let you choose between the two tax and spend candidates.

Humbug.

Some of us do prefer to use cash, but you're right it isn't many of us anymore. I write, at most, 3 checks a month. Everything else gets paid in cash or via online payment. I get my check direct deposited. Most people do not think about checks and things like that as being the sort of transactions that this would pertain to. Remember, we truly do have people in society who say.... "I can't be out of money, I still have checks."

 

[PirateMk1]

OK, but bear in mind that you'll only pay the tax once, when you deposit the main check. Then, if you send ME a check for $500.00 as a Specklebang For President donation, I'll be the one who pays the $5 tax when I deposit the check, not you. When I buy campaign flyers, I'll send a check to Odinga Printing co., and they'll pay the 1% tax, not me. When Odinga pays their worker Ralph, he'll pay the 1% tax, when Ralph buys a toilet tank float at AllMart, they'll pay the 1% tax. Etc. etc. What's not to like?

I'm surprised at the lack of enthusiasm for my brilliant plan.

I may withdraw my candidacy and just let you choose between the two tax and spend candidates.

Humbug.

I love your plan it would make my life so much easier. We should implement it today.

 

[Tigger]

OK, but bear in mind that you'll only pay the tax once, when you deposit the main check. Then, if you send ME a check for $500.00 as a Specklebang For President donation, I'll be the one who pays the $5 tax when I deposit the check, not you. When I buy campaign flyers, I'll send a check to Odinga Printing co., and they'll pay the 1% tax, not me. When Odinga pays their worker Ralph, he'll pay the 1% tax, when Ralph buys a toilet tank float at AllMart, they'll pay the 1% tax. Etc. etc. What's not to like?

You miss one major thing.... The companies are NOT going to pay that tax. The CONSUMER will. That $99.99 item will now be $101.99

 

[melons]

But why would a flat federal sales tax not be better and more simplistic? You make more, you spend more, so you pay more?

 

[Tigger]

But why would a flat federal sales tax not be better and more simplistic? You make more, you spend more, so you pay more?

How about this....

1. It would work to ensure that some of us spend less money than we do now.
2. It would set up a massive black market to avoid the tax.

 

[melons]

How about this....

1. It would work to ensure that some of us spend less money than we do now.
2. It would set up a massive black market to avoid the tax.

I see your point. But with today's tax system, paying with and getting paid by cash comes with great advantage as well. I'm not so sure the black market would get much bigger than it is, but you could be right. I don't think there is a way to tax all of the cash in this country that is passed from hand to hand but I certainly think that something more simplistic would be a better option for all of us.

 

[roughdraft274]

as a general rule of thumb, I'm not in favor of anything called "the final solution".

 

[Tigger]

I see your point. But with today's tax system, paying with and getting paid by cash comes with great advantage as well. I'm not so sure the black market would get much bigger than it is, but you could be right.

It would become massive, because many of us who don't use it now WOULD use it in that case.

I don't think there is a way to tax all of the cash in this country that is passed from hand to hand but I certainly think that something more simplistic would be a better option for all of us.

Nor SHOULD there be a way to tax all money in this country, whether it's passing from hand to hand, bank to bank, etc.... So far as I'm concerned taxation should be like the Legal System in that the Government gets ONE and only ONE bite at the apple. The moment they have taxed money once, it should not be able to ever be taxed again.

 

[Fisher]

The best way to get people from getting so upset about taxes they pay in a year is to hide the taxes from them as much as possible. Income taxes are such an issue because a lot of people can look at what they pay and know what others pay or don't pay. I have no problem with multiple taxes, even new taxes like a VAT or national sales tax, added into the income tax mix if and only if spending is greatly clamped down upon and/or personal income tax rates are brought down. I, for instance, think that the public should get a decent sized cut of the gross revenue of mining/timbering of public lands. I think there should be an bumped up tax for natural resources exported overseas (as to promote processing/conversion jobs in the US). I think that a lot of services like legal fees should have a sales tax. I think that disposable batteries should be assessed refundable a core fee to force people to recycle them. The list goes on, but won't ever happen.

 

[TacticalEvilDan]

Speckle, your idea is very interesting. I would, however, point out that this would add more fuel to the grey economy that trades in gold and silver coins rather than hard currency. The way it works is that participants trade coins minted of precious metals for their actual value, while reporting only the face value (I think $50 in the case of the gold coins used) for tax purposes. Your system, in short, doesn't address barter.

I do realize that the system we've got probably doesn't catch even a fraction of the barter that does go on now, but you'd be actively encouraging it by penalizing anyone who doesn't.

 

[PirateMk1]

You miss one major thing.... The companies are NOT going to pay that tax. The CONSUMER will. That $99.99 item will now be $101.99

And this is different from now, how? I am pretty sure EVERY cost is passed on otherwise they woudnt be in business.

 

[PirateMk1]

Speckle, your idea is very interesting. I would, however, point out that this would add more fuel to the grey economy that trades in gold and silver coins rather than hard currency. The way it works is that participants trade coins minted of precious metals for their actual value, while reporting only the face value (I think $50 in the case of the gold coins used) for tax purposes. Your system, in short, doesn't address barter.

I do realize that the system we've got probably doesn't catch even a fraction of the barter that does go on now, but you'd be actively encouraging it by penalizing anyone who doesn't.

I really do like speckles tax idea I came up with a similar idea myself he just beat me to the punch and he presents it a lot better than I could. That said a couple of modifications would be in order. One would be that the tax rate whatever it be, be locked via constitutional amendment and ALL other ferderal taxes banned in said amendment. Second since most states, and municpalities, already collect sales tax anyhow they should be the ones collecting. Thirdly I would seriously consider in that same amendment do away with any borrowing except under very very stringent circumstances and terms.

As far as blackmarkets graymarkets bartering ect., under this tax we should not worry about it those markets will alway be there. Heres a point of fact, the FOREX markets (foriegn currency exchange) every single day move 2 trillion dollors, much of that passes though our shores though brokerages. Heres another point of fact. If this tax were to be implemented then the effective corperate tax would be approximately 1% which would make it among the lowest tax rates in the world. We would stop hemoraging companies, very shortly thereafter.

This tax is in no way perfect and anytax is going to be gamed. That said the tax is very small compared to what we have now. Those that wish to avoid it can. It would probably end up starting back the trend of americans becoming more prosperous as a whole and individualing as compared to the rest of the world. which I think would be the best thing for this country.

 

[Tigger]

And this is different from now, how? I am pretty sure EVERY cost is passed on otherwise they woudnt be in business.

It isn't any different. My point was exact that.... the fact that NO the company would NOT be paying the tax, the Consumer would, one way or another. Which is why I have no use for the system that the OP has come up with.

 

[TacticalEvilDan]

You know, if you think about it, everybody is actually paying everybody else's taxes.

Every time you pay somebody for something (whether we're talking about a service, something off the shelf, a rental or lease property, or even a paycheck) they should be asking to enough to cover their taxes, personal expenses, and some cream on top.

I realize it doesn't always work that way with employees -- but then again, the same is true for businesses that go under.

 

[PirateMk1]

It isn't any different. My point was exact that.... the fact that NO the company would NOT be paying the tax, the Consumer would, one way or another. Which is why I have no use for the system that the OP has come up with.

Companies by their very nature pass on ALL COSTS, otherwise they cannot exist. The consumer NO MATTER the tax on a business, will ALWAYS pay. If you want no taxes I am with you, though I would be curious as to how you would pay for the govnment.

 

[Tigger]

Companies by their very nature pass on ALL COSTS, otherwise they cannot exist. The consumer NO MATTER the tax on a business, will ALWAYS pay. If you want no taxes I am with you, though I would be curious as to how you would pay for the govnment.

It's not that I want NO Taxes. Taxes are a necessity that none of us really like. On the order of Dentists. What I have a problem with is any system that appears to hide, or which does hide from the average citizen, the truth about who pays how much. That's why I'm a proponent of a 10% flat tax at the Federal Level, on all First Time Income; and a 0% rate on all Pre-Taxed Income. I would also cap State Income taxes at 5%.

As to how you pay for the Government.... very simple. You take the budget office's projected tax income for the next year. Let's use $1,000,000,000,000 for a nice round number. You subract 10% (leaving us with $900,000,000,000) and that would be the maximum expenditure of the Government for the year. The other 10% (which would be taken out as revenue came in), would be put in a "rainy day" fund for emergencies and could only be accessed by agreement of a super-majority of both houses, the POTUS, and the legislatures and governors of 35 of the 50 states.

 

[PirateMk1]

It's not that I want NO Taxes. Taxes are a necessity that none of us really like. On the order of Dentists. What I have a problem with is any system that appears to hide, or which does hide from the average citizen, the truth about who pays how much. That's why I'm a proponent of a 10% flat tax at the Federal Level, on all First Time Income; and a 0% rate on all Pre-Taxed Income. I would also cap State Income taxes at 5%.

As to how you pay for the Government.... very simple. You take the budget office's projected tax income for the next year. Let's use $1,000,000,000,000 for a nice round number. You subract 10% (leaving us with $900,000,000,000) and that would be the maximum expenditure of the Government for the year. The other 10% (which would be taken out as revenue came in), would be put in a "rainy day" fund for emergencies and could only be accessed by agreement of a super-majority of both houses, the POTUS, and the legislatures and governors of 35 of the 50 states.

You have a valid point, one of the reasons in the Speckle taxes case I would want Constitutional locks restricting borrowing and spending and locking the rate. The problem I see with any tax no matter which you look at, unless they are locked by the Constitution they will inevtiably be changed and most likely raised. So whatever we look at we must consider Constitutional locks on the spending and borrowing and income. Without which it doesnt matter much, no matter what it is.

 

[Tigger]

You have a valid point, one of the reasons in the Speckle taxes case I would want Constitutional locks restricting borrowing and spending and locking the rate. The problem I see with any tax no matter which you look at, unless they are locked by the Constitution they will inevtiably be changed and most likely raised. So whatever we look at we must consider Constitutional locks on the spending and borrowing and income. Without which it doesnt matter much, no matter what it is.

On that particular topic, we will agree completely.

 

[Fisher]

A constitutional rate lock???? If nobody is willing to lend at that rate, the government would have to shut down until the Constitution could be amended.

 

[Tigger]

A constitutional rate lock???? If nobody is willing to lend at that rate, the government would have to shut down until the Constitution could be amended.

A rate lock on the income tax percentage, Fisher. Say, 10% of your income would be what you owe; regardless of whether you made $10K or $110K or $1.1 million.

 

[PirateMk1]

A constitutional rate lock???? If nobody is willing to lend at that rate, the government would have to shut down until the Constitution could be amended.

Constitutional borrowing spending and taxing rate locks, yes. I dont know about you but I'm tired of the tax code changing every 2 seconds. The goverment in my ideal world wouldnt borrow one more penny and begin paying down existing bonds and obilgations which are already locked in. But then again if wishes were fishes the whole sea would be full.

 

[Fisher]

A rate lock on the income tax percentage, Fisher. Say, 10% of your income would be what you owe; regardless of whether you made $10K or $110K or $1.1 million.

Sorry I thought you were talking about a rate lock on borrowing i.e. bond yields

 

[specklebang]

That argument can be used for anything. Prices are based on market acceptance, not on taxation. If that $98 item could be sold for $110, it would be regardless of taxes.

You miss one major thing.... The companies are NOT going to pay that tax. The CONSUMER will. That $99.99 item will now be $101.99

 

[specklebang]

Easy to answer. Sales taxes are te most regressive orm of taxation there can be.

Let's say that Joe Poverty, Specklebang and Mitt Romney get together for dinner. We order the same thing, banana cream steak which is $24.95. We all pay the same tax of $5.00. $5.00 is 1/2 hour of Joe's wages, It's 1/100000000 of a second of Mitt's wages. How is this fair or plausible? All these consumption based taxes are very unfair.

OTOH, Joe deposits $20,000 in paychecks in his bank and pays his 1%. Specklebang deposit $96K in rent checks. and pays 1%. Mit moves 30 million around and pays 1%. Completely proportional. Even better is NO chance of cheating since all these tiny amounts are collected at the bank. Sales taxes are often collected but not paid in. Look at your local swap meet and you'll see what I mean.

But why would a flat federal sales tax not be better and more simplistic? You make more, you spend more, so you pay more?