From: Technotranscendence (neptune@mars.superlink.net)
Date: Thu Jan 03 2002 - 10:30:23 MST
On Wednesday, January 02, 2002 11:02 PM James Rogers jamesr@best.com
wrote:
> I just had an interesting thought on an alternative to progressive
income
> taxes, which always had anti-progressive consequences in my opinion.
That depends on who you ask, of course.:)
> Suppose income taxes were eliminated altogether and replaced with a
> marginally higher tax on capital gains (not more than 30%). The
government
> would have to tighten its belt for a few years, but the net effect may
> actually be what the progressive income tax claims to be and isn't.
There
> are a number of apparent consequences to this. Overall, this looks
like a
> more promising way of bootstrapping people from low affluence to
moderately
> high levels of affluence.
Aside from the fact that capital gains are already above that -- I
believe they are 36% -- this would represent a tax on investment. An
income tax impacts both investment and consumption, but generally, if
you want an economy to grow, you'd prefer consumption to be taxed over
investment. (Of course, ultimately, all investment is consumption -- in
the sense that people save and invest today so they can consume in the
future.) As Mike Linksvayer points out, this would punish investment at
the sake of consumption.
Also, regarding Georgism, I believe the basic belief is that land -- and
presumably all natural resources -- are owned by society, so the tax on
them is, for Georgists, not a tax in the sense of the government taking
your stuff for whatever reason. Instead, it's more like a rental fee
for your use of the resource that's not owned by you. (I'm not sure how
accurate this is and discussions of Georgism seem mostly utopian to me.)
I still advocate getting rid of taxes completely. The problem with
advocating some sort of interim tax system for now is that this not only
distracts from abolishing taxation, but it often leads to hybrid
systems. In this case, by the time James Rogers's idea got through the
Congress or any Parliament, it would most likely just increase capital
gains taxes and maybe reduce some income taxes. It would probably not
fundamentally change the system. (This is very important, since the
system being much intact or even just a little diminished would just
continue to grow.) Add to this, the effort used up in lobbying,
campaigning, advertizing the plan would be unrecoverable. Maybe taxes
might be a little lower, maybe not.
We see this with the idea of a national sales tax in America. The idea
pops up now and again and many libertarians are pulled into the reform
movement only to see the reform fail. (Which might be good because I
fear what will happen is we'll get both the national sales tax and keep
the income tax.) Such has happened to with many efforts to simplify the
tax code in the US. (Not that simplification is always good. The
loopholes allow at least some room for people to keep their wealth. The
thing to do should be to expand them.)
Also, anything that raises government revenues is also, IMO, suspect,
since this will only make for more government -- unless there's are
strict and strictly enforced limits on spending, such as laws where any
surplus must be refunded. (I fear even strict limits will be kept only
so long as they are politically fashionable. As soon as an emergency
arises, I fear the government would seek to get around them. It might
not at the first emergency, but it will eventually.) Not taking, too,
IMHO, is better than refunding, especially since there's less of a
chance of someone getting a refund they don't deserve. (E.g., should
people on the public dole in the US, e.g., get a tax refund for their
mortgages? After all, they really aren't paying the mortgage with their
money. They're paying it with money they got from the government which
got it from real taxpayers. In other words, they are net tax
consumers.)
Back into lurk mode!
Daniel Ust
http://uweb.superlink.net/neptune/
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