I hope the next President of the United States is OK.

not sure about their status, but hilary's not doing too well

im sure that if i put the energy and time in, i could actually calculate this, but instead, i'll just ask the question and maybe someone else can find an answer or calculate an answer. as a preface, im not saying this is the solution, because i dont know what the numbers look like, which is why im asking what the numbers would be.

marginal income tax rates in the US are 10%, 15%, 25%, 28%, 33% and 35% depending on income.

then you have tons of other taxes, like estate tax and property tax, and then you have sales tax.

if the current structure was changed and income tax went down drastically, while sales tax went up drastically, how would that impact the total bottom line in terms of tax dollars collected?

for instance, if the income tax rates were changed to: 5%, 9%, 14%, 18%, 24%, 27% and 28% but sales tax was bumped up by 50% in all states (in PA it would be 9% instead of 6%) how would that impact the overall bottom line?

i'm not really interested in digging in to things like property tax and inheritance tax right now, i'm more interested in sales tax and income tax.

math was never my strong suit, but i know some people here are mathematically gifted. help me understand this.

well, a shit ton less would go to the federal government, the poor would pay a shit ton more, and the rich would pay less. not sure of the hard numbers, but those are the broad strokes.

pacino wrote:well, a shit ton less would go to the federal government, the poor would pay a shit ton more, and the rich would pay less. not sure of the hard numbers, but those are the broad strokes.

yeah, see, the "broad strokes" really isn't what i'm looking for, i want to look at actual data.

i hear staples sells calculators

I'd lower income taxes to a 10/20/25 percentage rates - make it easy - and raise consumption/sin taxes through the roof. I'd keep the mortgage and property tax deductions as real estate is a foundational economic mover in the nation.

I'd raise the federal gasoline tax by five cents a gallon right off the bat. I'd look to add two dollars tax to each pack of cigarettes as another federal excise measure. Beers gets a 25 cent tax per six pack, wine gets a dollar tax per 750 bottle, hard liquor gets a two dollar tax per 750. Larger formats get larger increases. Soda gets a dime tax per two liter bottle. Not only would you raise taxes and get additional revenue, you'd lower medical costs over the long run because some folks would be hard pressed to keep paying increased prices on substances that are not good for them.

I'd seriously look to reform Medicare and Medicaid by all means necessary, including medical insurance reform. My wife quit being a Physician Assistant because the insurance cronies were so onerous - literally deciding over the phone what treatment would be approved on a patient by patient basis. I'd also start a nationwide preventive medicine campaign from the grade school level through adults. Medical insurance has to be reformed.

Defense spending would be reduced to a base budget of $450B per year. That's about $100B over the last Clinton year budgets. I'd seriously reduce the Active Army, probably to a force of 300,000 personnel. Air Force and Navy take limited cuts to their budgets, but I'd force the CNO and Chief of Staff of the Air Force to put their careers on the line by reforming their respective acquisition systems...modern equipment should not cost a quarter of a billion to put a plane in the air...carriers shouldn't have to cost five billion a ship. I'd keep the Marines at their current strength because they are always available quickly...plus my foreign policy would not place ground troops in harms way unless of a major attack on an ally or on our nation. I'd also pass policy that makes it next to impossible to hire defense contractors as in lieu of troops...they are not cheaper than military personnel any longer.

I'd keep the inheritance tax at the $5M level. No need to punish families who have worked hard for their wealth (or the few who have lucked into it).

I'd also pass another tax that establishes a 20% tax on all non-earned income, but only applicable to people who have over $1M in investments.

I expect to be assassinated within six months if I was in a position of power to make this happen.

When I talk about taxes here, Werthless usually bashes me for only being slightly more detailed than Paul Ryan. So I don't want to get too deeply into it. But there's probably a good case to be made that we're under-taxed, and that the code facilitates all kinds of unintended and adverse consequences.

Boosting the sales tax in some blunt way likely would do more of the same. If you want to offset rate reductions, probably better to start with a carbon tax (because you want to disincent emissions) and cutting the mortgage deduction for the rich (because there's little justification for it and the politics are feasible). How much that would raise of course would depend on the specifics.

Edit: LG, you've got my vote

Yeah, sales tax is horribly regressive.

What's your definition of rich?

reasonable approaches to ridding the tax code of deductions are, of course, worthy. disregarding the deduction above a certain amount over median sale for your area plus disregarding any secondary home sale would be wise, in my view. but most of the deductions that are currently being targeted simply hit the lower-middle classes. this is why I balk at the idea of 'cutting rates and simplifying the tax code', because that won't happen. deductions just get reintroduced anyway, and then we are receiving less and less tax to properly fund our government, while money further pools at the top. growth is useless if the wealth created from it just gets vacuumed to the top.

Isn't jacking up the sales tax horribly regressive? I'm a pretty big dummy when it comes to economics, but that's what I always felt. Seems like it's a deterrent for people who have extra money to spend it while pricing lower income people out of certain products.

JFLNYC wrote:Yeah, sales tax is horribly regressive.

Thanks for answering before I got done typing.

I mainly asked because sales tax in WA is 10% and even though I'm making 10K more than what I was making in ND, I'm not saving any more money than I was there. Sure some of that is cost of living, but pure cost of living wasn't that big of a difference. My rent right now is only $100 higher than it was in ND.

of course it is. there is a certain minimum that everyone must purchase. taxing those goods at a higher percentage hits the very poor and the middle class, taking a higher percentage of their money and earnings to simply get by, while the richer of us hit that and then are living on easier streets because there is simply so much that any one family can reasonably consume.

Luzinski's Gut wrote:What's your definition of rich?

Good question. I'm not sure. My instinct is to say you can only deduct mortgage interest on one home, or up to a certain level. But this too would have distorting effects.

The philosophical question to me has always been: how much government is enough? I am wired to believe the government that governs least governs best...the costs of government have gone through the roof since the 1940s. I believe we don't need to be taxed highly to properly fund the government if the government is sized correctly...but that's such a loaded question...I mean, to me, HUD does zero for me. I see it as a massive sump of money with no results emerging from the other side. Department of Education could easily be revoked and have each state run their schools....but it's just my political philosophy and I can respect opposing views if the logic and evidence are there.

fwiw, i think HUD does a ton.

And it very well might. But it does zero to me - I cannot think of any first order much less second or third order effect that HUD has on me...but I admit that I am ignorant of probably most of HUDs programs...

Luzinski's Gut wrote:The philosophical question to me has always been: how much government is enough? I am wired to believe the government that governs least governs best...the costs of government have gone through the roof since the 1940s. I believe we don't need to be taxed highly to properly fund the government if the government is sized correctly...but that's such a loaded question...I mean, to me, HUD does zero for me. I see it as a massive sump of money with no results emerging from the other side. Department of Education could easily be revoked and have each state run their schools....but it's just my political philosophy and I can respect opposing views if the logic and evidence are there.

I'm sympathetic to federalist arguments, and having spent the last three years working in city government--probably one of the most efficient and least corrupt, at that--I have few illusions left that more is always better. But if you accept the premises that individuals now compete in a global economy, that the quality of their educational experience is the biggest determinant of how well they'll do, and that the national community has an economic and cultural stake in their success, you probably want to make sure their education reaches at least some decent minimal standard. The countries that are eating our lunch in education are pretty much all more centralized than we are in terms of how they regulate, set curriculum et al. That's only part of the story, but it's an important part.

As I get older, my liberalism seems to be turning more libertarian and laissez-faire in some respects--maybe it's just more confidence in collective small-d democratic opinion, and less in my own. With that in mind, I'm more and more okay with different communities choosing different levels of taxation and services. Part of the reason I admire Bloomberg is that he's more explicit than any elected official I can remember in talking about the link between taxes and the quality of life and services in NYC. While I find Rick Perry personally abhorrent, one can read him as making the opposite but equally logical case, and the Texans keep electing him so clearly it's a winning argument there.

But education does strike me as a national issue, and the USDOE has an important and helpful role IMO. One could argue its as much or more a civil right than a service of government.

While I find Rick Perry personally abhorrent, one can read him as making the opposite but equally logical case, and the Texans keep electing him so clearly it's a winning argument there. But education does strike me as a national issue, and the USDOE has an important and helpful role IMO.

It may be a winning argument, but it doesn't mean it's working. By almost any measure, the citizens of Texas are in terrible straits right now.

I'm all for idealogical arguments, but show me where they've worked, you know.