Trump vs Clinton vs Johnson on Taxes

[jonny5]

Ignore the spending issue for now. This is just a comparison of their philosophy on the purpose of taxation and how it should be collected. Also ignore whether any of them could accomplish any of them. Which one do you agree with and why?

Trump
-economic policy should be geared towards growth
-reduce the burden on the economy
-reduce brackets from 7 to 3
-exemption for child care
-lower corporate tax to 15%
-repeal estate tax

Clinton
-make sure wealthy, wall street and corporations pay more taxes
-surcharge on high wealth
-no deductions for high wealth
-no deductions for corporations profits outside country
-exit tax on companies leaving country
-tax deductions for businesses who employ people here at higher wages
-tax deductions for middle class healthcare expenses, childcare, college

Johnson
-purpose is to collect revenue
-taxation should minimize burden on business, savings, investment, be widely distributed
-replace all income tax with minimal sales tax
-100% subsidy to cover taxes paid on spending up to poverty level, for everyone
-no sales tax on used goods


Personally, I dont think any of them are the perfect way, but obviously support Johnson's the most. The purpose of taxes is to collect revenue to pay for spending, not to play social games, be used as tools of power, or even help the govt steer the economy. The simplest system that is as most equal for all and minimizes the burden on liberty is the best one.

 

[ttwtt78640]

Ignore the spending issue for now. This is just a comparison of their philosophy on the purpose of taxation and how it should be collected. Also ignore whether any of them could accomplish any of them. Which one do you agree with and why?

Trump
-economic policy should be geared towards growth
-reduce the burden on the economy
-reduce brackets from 7 to 3
-exemption for child care
-lower corporate tax to 15%
-repeal estate tax

Clinton
-make sure wealthy, wall street and corporations pay more taxes
-surcharge on high wealth
-no deductions for high wealth
-no deductions for corporations profits outside country
-exit tax on companies leaving country
-tax deductions for businesses who employ people here at higher wages
-tax deductions for middle class healthcare expenses, childcare, college

Johnson
-purpose is to collect revenue
-taxation should minimize burden on business, savings, investment, be widely distributed
-replace all income tax with minimal sales tax
-100% subsidy to cover taxes paid on spending up to poverty level, for everyone
-no sales tax on used goods


Personally, I dont think any of them are the perfect way, but obviously support Johnson's the most. The purpose of taxes is to collect revenue to pay for spending, not to play social games, be used as tools of power, or even help the govt steer the economy. The simplest system that is as most equal for all and minimizes the burden on liberty is the best one.

That social game (first bolded above) requires some explanation. How and when. exactly, does one get that subsidy?

 

[JohnfrmClevelan]

Ignore the spending issue for now. This is just a comparison of their philosophy on the purpose of taxation and how it should be collected. Also ignore whether any of them could accomplish any of them. Which one do you agree with and why?

Trump
-economic policy should be geared towards growth
-reduce the burden on the economy
-reduce brackets from 7 to 3
-exemption for child care
-lower corporate tax to 15%
-repeal estate tax

Clinton
-make sure wealthy, wall street and corporations pay more taxes
-surcharge on high wealth
-no deductions for high wealth
-no deductions for corporations profits outside country
-exit tax on companies leaving country
-tax deductions for businesses who employ people here at higher wages
-tax deductions for middle class healthcare expenses, childcare, college

Johnson
-purpose is to collect revenue
-taxation should minimize burden on business, savings, investment, be widely distributed
-replace all income tax with minimal sales tax
-100% subsidy to cover taxes paid on spending up to poverty level, for everyone
-no sales tax on used goods


Personally, I dont think any of them are the perfect way, but obviously support Johnson's the most. The purpose of taxes is to collect revenue to pay for spending, not to play social games, be used as tools of power, or even help the govt steer the economy. The simplest system that is as most equal for all and minimizes the burden on liberty is the best one.

What you don't seem to understand is that they are ALL pushing different social goals. Some favor the rich, some favor the poor. Who do you think needs more protection?

 

[Skeptic Bob]

I can find aspects I agree with and disagree with with all of them.

I guess I most agree with Clinton because I do believe in progressive taxation. I believe those who have benefited disproportionately from living and working here should pay disproportionately. And I happen to be among those whose pocketbook would feel a bit lighter if Hillary gets her way.

I'm fine with taxing capital gains at a higher rate but am against property tax on a person's residence. I'm against an exit tax but am ok with tax deductions that employ people here at higher wages. If you pay your employees so little that a significant percentage of them need to go on government assistance your company shouldn't be getting any deductions.

 

[Gaea]

Johnson
-replace all income tax with minimal sales tax

That's misleading. He wants to impose a 28% consumption tax.

For someone like me, who already pays nearly 10% sales tax, that would cause prices for everything to skyrocket to obscene levels.

Want to buy a new car? Well, now you get to pay an extra $10,000 on that $35,000 car!

Honestly, Johnson's tax plan is the worst by far. It would destroy the economy.

 

[joG]

Ignore the spending issue for now. This is just a comparison of their philosophy on the purpose of taxation and how it should be collected. Also ignore whether any of them could accomplish any of them. Which one do you agree with and why?

Trump
-economic policy should be geared towards growth
-reduce the burden on the economy
-reduce brackets from 7 to 3
-exemption for child care
-lower corporate tax to 15%
-repeal estate tax

Clinton
-make sure wealthy, wall street and corporations pay more taxes
-surcharge on high wealth
-no deductions for high wealth
-no deductions for corporations profits outside country
-exit tax on companies leaving country
-tax deductions for businesses who employ people here at higher wages
-tax deductions for middle class healthcare expenses, childcare, college

Johnson
-purpose is to collect revenue
-taxation should minimize burden on business, savings, investment, be widely distributed
-replace all income tax with minimal sales tax
-100% subsidy to cover taxes paid on spending up to poverty level, for everyone
-no sales tax on used goods


Personally, I dont think any of them are the perfect way, but obviously support Johnson's the most. The purpose of taxes is to collect revenue to pay for spending, not to play social games, be used as tools of power, or even help the govt steer the economy. The simplest system that is as most equal for all and minimizes the burden on liberty is the best one.

None of those plans seems convincing. They do not target or tackle the major problems we have fiscally and indicate that we might even install more programs and bureaucracy.

 

[JohnfrmClevelan]

That's misleading. He wants to impose a 28% consumption tax.

For someone like me, who already pays nearly 10% sales tax, that would cause prices for everything to skyrocket to obscene levels.

Want to buy a new car? Well, now you get to pay an extra $10,000 on that $35,000 car!

Honestly, Johnson's tax plan is the worst by far. It would destroy the economy.

Yep. Johnson's platform would be a complete disaster. His only appeal is in not being Trump or Clinton.

 

[joG]

That's misleading. He wants to impose a 28% consumption tax.

For someone like me, who already pays nearly 10% sales tax, that would cause prices for everything to skyrocket to obscene levels.

Want to buy a new car? Well, now you get to pay an extra $10,000 on that $35,000 car!

Honestly, Johnson's tax plan is the worst by far. It would destroy the economy.

It would mean paying less income taxes. And it would improve savings relative to consumption and probably reduce merchandise trade deficits.

 

[Gaea]

It would mean paying less income taxes. And it would improve savings relative to consumption and probably reduce merchandise trade deficits.

Half of Americans don't pay anything in income tax as it is. The only people who benefit off Johnson's taxation system are the people who are obscenely rich.

 

[joG]

What you don't seem to understand is that they are ALL pushing different social goals. Some favor the rich, some favor the poor. Who do you think needs more protection?

That is certainly true. The first impact of the policy mixes as mentioned are very different on persons of different income and wealth. What second and later incidents would be is less trivial to tell. But they could easily be the opposite of what first glance gut feeling had one think.

 

[JohnfrmClevelan]

It would mean paying less income taxes. And it would improve savings relative to consumption and probably reduce merchandise trade deficits.

Has a heavy tax on consumption ever worked? And why would you want to "improve" savings relative to consumption?

 

[joG]

Half of Americans don't pay anything in income tax as it is. The only people who benefit off Johnson's taxation system are the people who are obscenely rich.

That doesn't fit the information I have seen concerning the numbers that pay income tax. But maybe you have some?
As to the immediate benificiaries of a switch to sales taxes ( why not VAT?) You are certainly right. But it would probably shift money away from consumption to savings giving the economy a push.
Whether this is the best time for such a switch is questionable and would certainly have been a good move in the early 1990s. Probably we should wait till we are not on monetary life support from the Fed.

 

[joG]

Has a heavy tax on consumption ever worked? And why would you want to "improve" savings relative to consumption?

It is always a tight walk between too high and too low taxes on consumption. As a probably reasonable rule of thumb, if your merchandise trade ballance is chronically deeply in surplus, you are possibly taxing your consumption too much.

 

[Gaea]

That doesn't fit the information I have seen concerning the numbers that pay income tax. But maybe you have some?

45% of Americans pay no federal income tax - MarketWatch

An estimated 45.3% of American households — roughly 77.5 million — will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)

Roughly half pay no federal income tax because they have no taxable income, and the other roughly half get enough tax breaks to erase their tax liability, explains Roberton Williams, a senior fellow at the Tax Policy Center.

But it would probably shift money away from consumption to savings giving the economy a push.

I agree that it would shift money away from consumption to savings. But that doesn't give the economy a push. It would trigger a deflation + a major recession.

The economy is dependent on consumption. Reducing consumption hurts business revenue, which results in cutting production, which results in fewer jobs, which results in higher unemployment.

I really don't see how increased savings helps the economy either.

 

[JohnfrmClevelan]

It is always a tight walk between too high and too low taxes on consumption. As a probably reasonable rule of thumb, if your merchandise trade ballance is chronically deeply in surplus, you are possibly taxing your consumption too much.

You are going to have to explain your reasoning on that one.

 

[jonny5]

That social game (first bolded above) requires some explanation. How and when. exactly, does one get that subsidy?

Everyone gets it, rich and poor.

 

[jonny5]

What you don't seem to understand is that they are ALL pushing different social goals. Some favor the rich, some favor the poor. Who do you think needs more protection?

Neither. Every individual is equal.

 

[jonny5]

That's misleading. He wants to impose a 28% consumption tax.

For someone like me, who already pays nearly 10% sales tax, that would cause prices for everything to skyrocket to obscene levels.

Want to buy a new car? Well, now you get to pay an extra $10,000 on that $35,000 car!

Honestly, Johnson's tax plan is the worst by far. It would destroy the economy.

Actually, the statutory rate would be 23% at current spending levels. And you already pay it. When you earn a dollar the govt takes 15%-25% directly, then when you spend your left overs you pay your 10% local plus the corporate and compliance taxes embedded in every good.

 

[Gaea]

Actually, the statutory rate would be 23% at current spending levels. And you already pay it. When you earn a dollar the govt takes 15%-25% directly, then when you spend your left overs you pay your 10% local plus the corporate and compliance taxes embedded in every good.

You've read 23%. I've read 28%. But even 28% is misleading - it's actually 39%.

Here's one article on the subject:
Gary Johnson's Unfair, Expensive National Sales Tax

But the tax rate is higher than it appears to be. Let’s say Johnson’s tax ideas prevailed, and a Kindle sold for $139 -- with $100 going to Amazon and $39 to the new federal sales tax. Advocates of a national sales tax would say that’s a 28 percent tax rate, because 39 is 28 percent of 139. That method makes for a clean comparison to the income-tax rates that the sales tax would replace. (Income tax rates are “tax inclusive,” too, if you stop and think about it.) But state sales tax rates aren’t calculated that way, and most people will get the wrong idea when they hear Johnson say he’s for a 28 percent tax, and when reporters repeat it.

That 39% sales tax would cost me far more than I pay in FICA, income tax, etc. And I don't see any reason to assume corporations will cut costs by 35% just because they no longer have to pay corporate taxes.

His plan is disastrous - and it would end social security, medicare, and disability.

 

[ttwtt78640]

Everyone gets it, rich and poor.

Maybe you know what that means but I do not. Let's say that the national sales tax is 10% and that the (individual?) poverty level is $20K. Does that mean that each US person (about 321 million folks) gets handed $2K as a "prebate"?

That alone puts the federal government in the hole for $642 billion off the bat. With total US retail sales at just over $400 billion/month (maybe $5 trillion annually?) which yeilds $500 billion with a 10% sales tax rate.

That means nobody but those spending more than $20K (per person poverty level) annually on "new goods" would pay any net federal (sales) tax at all.

Such a tax system would not generate near enough federal revenue even to pay.for the sales tax "prebates".

 

[jonny5]

You've read 23%. I've read 28%. But even 28% is misleading - it's actually 39%.

Here's one article on the subject:
Gary Johnson's Unfair, Expensive National Sales Tax



That 39% sales tax would cost me far more than I pay in FICA, income tax, etc. And I don't see any reason to assume corporations will cut costs by 35% just because they no longer have to pay corporate taxes.

His plan is disastrous - and it would end social security, medicare, and disability.

No, its literally 23% if you read the bill thats submitted. But even if its 39%, so what? Thats the cost of all that social spending you like. Obvisouly if Johnson has his way he would significantly cut spending, which would keep the rate as low as possible.

 

[jonny5]

Maybe you know what that means but I do not. Let's say that the national sales tax is 10% and that the (individual?) poverty level is $20K. Does that mean that each US person (about 321 million folks) gets handed $2K as a "prebate"?

That alone puts the federal government in the hole for $642 billion off the bat. With total US retail sales at just over $400 billion/month (maybe $5 trillion annually?) which yeilds $500 billion with a 10% sales tax rate.

That means nobody but those spending more than $20K (per person poverty level) annually on "new goods" would pay any net federal (sales) tax at all.

Such a tax system would not generate near enough federal revenue even to pay.for the sales tax "prebates".

As the bill is written, every citizen would get a check every month for about $200. I dont want this to become yet another FairTax thread though, so the rest of the math you can see here.

https://fairtax-structure-psyclone..../0000/56c4af2369702d7c197c0000.pdf?1455730467

 

[ttwtt78640]

As the bill is written, every citizen would get a check every month for about $200. I dont want this to become yet another FairTax thread though, so the rest of the math you can see here.

https://fairtax-structure-psyclone..../0000/56c4af2369702d7c197c0000.pdf?1455730467

The "fair tax" is applied to new goods and services (except education and training services) so that is a different animal entirely.

 

[chuckiechan]

I can find aspects I agree with and disagree with with all of them.

I guess I most agree with Clinton because I do believe in progressive taxation. I believe those who have benefited disproportionately from living and working here should pay disproportionately. And I happen to be among those whose pocketbook would feel a bit lighter if Hillary gets her way.

I'm fine with taxing capital gains at a higher rate but am against property tax on a person's residence. I'm against an exit tax but am ok with tax deductions that employ people here at higher wages. If you pay your employees so little that a significant percentage of them need to go on government assistance your company shouldn't be getting any deductions.

The issue really is simple: the more the government takes, the less money is available for spending in the private sector. The private sector is the original source for all tax income. As money is redirected to the government furnace, less is spent doing profitable work, and profits are what are ultimately taxed.

 

[ttwtt78640]

You've read 23%. I've read 28%. But even 28% is misleading - it's actually 39%.

Here's one article on the subject:
Gary Johnson's Unfair, Expensive National Sales Tax



That 39% sales tax would cost me far more than I pay in FICA, income tax, etc. And I don't see any reason to assume corporations will cut costs by 35% just because they no longer have to pay corporate taxes.

His plan is disastrous - and it would end social security, medicare, and disability.

Not only that but it is never explained how service "consumption" (labor?) would be taxed. The taxation of services makes the "fair tax" serve as an income tax (yet simply being called "consumption" tax). For example if you pay me $100 (for labor that you "consumed") to fix your fence, maintain your lawn or paint your house - who collects (and pays the federal government) that $23 (or whatever) in tax? Since I have no duty to report my income (IRS no longer exists) and you might "forget" to keep labor "consumption" records for your personal living expenses then who plays "fair tax" collector for service labor?