The Least Harmful Tax?

[Carcano]

This is a thread about what YOU consider to be the least harmful form of taxation to your nation's prosperity.

Most on the left prefer a corporate tax...but considering companies taxed equally across the board will simply raise their prices to compensate, it seems clear that corporate tax is really just a sales tax in disguise.

A higher tax rate than foreign competitors will also put domestic companies at a disadvantage which will affect the trade balance.

Income tax is regarded as more compassionate to retired citizens who earn less but continue to spend their life savings.

But wait, is taxing spending more or less harmful overall than taxing earning?

According to this incredible historical review by Lacy Hunt, the traditional American preference goes back to the teachings of Thomas Hobbes and his famous book...Leviathan.

http://www.youtube.com/watch?v=Jc-w3...eature=g-all-u

[spidergoat]

Companies will price their products according to the market, not their tax rates. We could also just keep the same tax rate and eliminate corporate loopholes. We could also make it illegal to keep tax shelters offshore. We can raise the top marginal income tax rate to something like 90%.

[Carcano]

We could also just keep the same tax rate and eliminate corporate loopholes.

This is exactly one of the recommendations made in the video presentation I posted.

The evidence for its effectiveness is pointed out with historical statistics.

[Carcano]

We could also make it illegal to keep tax shelters offshore.

Completely agree!

[Buddha12]

Everyone pays a flat tax of 15 percent would be my idea of a fair tax. That is on the gross abount they make not the net amount by the way.

[spidergoat]

That would be grossly unfair to lower income earners.

[quadraphonics]

A higher tax rate than foreign competitors will also put domestic companies at a disadvantage which will affect the trade balance.

Not if you invest those tax proceeds in things that make your economy more competitive (better educated workforce, superior legal protections, better infrastructure, etc.) or provide services currently funded by corporations (universal healthcare), it won't.

[spidergoat]

How about we tax financial transactions? I think few average people would be upset by slightly higher prices on financial transactions like stock trades. And it would have an added benefit of reigning in automated trading.

[quadraphonics]

How about we tax financial transactions? I think few average people would be upset by slightly higher prices on financial transactions like stock trades. And it would have an added benefit of reigning in automated trading.

I think we should make things like capital gains taxes progressive. Why is income tax progressive, but not capital gains?

[spidergoat]

Because we reward people that do nothing for their money.

[Carcano]

Not if you invest those tax proceeds in things that make your economy more competitive (better educated workforce, superior legal protections, better infrastructure, etc.)

More scholarships for robotics might be a good competitiveness investment in some areas, but the government has no way of ensuring those graduates will stay in country.

In my country Canada graduating students who have benefited from public education leave the country in droves.

Generally Canada and the US are some of the most over-educated nations on the planet...with a desperate shortage of skilled tradesmen.

[Carcano]

I think we should make things like capital gains taxes progressive. Why is income tax progressive, but not capital gains?

How bout we have higher capital gains taxation on sectors that produce nothing, like banking shares...and ZERO capital gains on sectors that create real products.

[Carcano]

How about we tax financial transactions? I think few average people would be upset by slightly higher prices on financial transactions like stock trades. And it would have an added benefit of reigning in automated trading.

This is the best recommendation so far.

The biggest market is bonds, followed by stocks, followed by commodity futures.

A 1% transaction tax would bring in an ocean of revenue...while sparing low income earners.

[quadraphonics]

More scholarships for robotics might be a good competitiveness investment in some areas, but the government has no way of ensuring those graduates will stay in country.

Education in general is a good investment.

It's not about educating some small section of superstars (who might then leave) but about raising the overall level of education of the society. That way, workers in general can do more productive work, earn more money, and so provide more demand for more products and services.

In my country Canada graduating students who have benefited from public education leave the country in droves.

All students benefit from public education. Even the ones who never attend public school - they benefit from living in an economy with a higher productivity and so more money to spend, more jobs to do, etc.

If your country has a problem with people fleeing when they have a chance, then you have a more basic problem, and rendering your population less educated so that they can't get away as easily won't fix it.

Generally Canada and the US are some of the most over-educated nations on the planet...with a desperate shortage of skilled tradesmen.

That's because the high levels of education enable a level of demand for high-value products that is staggering. Educated people move into the USA (and Canada) at very high rates to meet that demand. This is an example of the approach working as it's supposed to.

How bout we have higher capital gains taxation on sectors that produce nothing, like banking shares...and ZERO capital gains on sectors that create real products.

The distinction in question is a figment of producerist imagination. Firms that don't produce anything of value also necessarily don't produce any gains on capital invested in them.

[quadraphonics]

A 1% transaction tax would bring in an ocean of revenue...while sparing low income earners.

That punishes people who trade frequently and rewards people who sit on financial instruments for a long period of time. It might make sense to incentivize long-term investment, but that isn't the same thing as sparing the little guy. Plenty of little guys need to make frequent transactions, and plenty of bif fish can structure their portfolios to hold investments for a long time.

Charging per-transaction is appropriate for a trading company handling the transactions, since they incur costs on a per-transaction basis. I don't see the justification for structuring taxes that way. Many of the investments you'd be taxing would be losing money anyhow - that's not fair.

[river]

capital gains from small busniess people should be raised too 1.5 million dollars

[Carcano]

Education in general is a good investment.

It's not about educating some small section of superstars, but about raising the overall level of education of the society. That way, workers in general can do more productive work, earn more money, and so provide more demand for more products and services.

Education is lost on a significant percentage of society who arent interested or smart enough to absorb it.

And still, most university education is economically useless.

There should never be any public money available for a degree in sociology, history, women's studies, music or theology.

[Carcano]

Firms that don't produce anything of value also necessarily don't produce any gains on capital invested in them.

Firms very often produce gains from concentrating wealth...as opposed to creating wealth.

[Carcano]

That's because the high levels of education enable a level of demand for high-value products that is staggering.

I dont think all the folks with master's degrees working fast food will be very impressed with this theory.

[Carcano]

That punishes people who trade frequently and rewards people who sit on financial instruments for a long period of time. It might make sense to incentivize long-term investment, but that isn't the same thing as sparing the little guy. Plenty of little guys need to make frequent transactions

Little guys dont participate in computerized high frequency trading.