Taxation systems

Article: The Battle in 64 bit Land, 2003 and Beyond
By: Alejandro Bellusco (baldusi.delete@this.hotmail.com), February 13, 2003 10:53 am
Room: Moderated Discussions
Interested in Illinois (@.com) on 2/13/03 wrote:
---------------------------
>Alejandro Belluscio (baldusi@hotmail.com) on 2/12/03 wrote:
>---------------------------
>So revenue tax would be good for a company like IBM ;-)
They are not so integrated as you think. Most of their production is outsourced and they buy a lot of thing from other's. They gave whole plants to their employees and then buy from them. But yes it would be good because they are a service company. And the usual problem with service companies is that salaries don't pay VAT. But services usually do. So it's effectivelly a revenue tax. It might depend on implementation. thou ;-)

>Here in the U.S. sales tax works at the state level and there are no political problems with it.
Becuase it's sales tax, not revenue tax. You only pay it on final sells. Anyway, the fact that something has been like that for decades don't make it a good system :-)

>Interesting, since China has recently imposed a high percentage tariff/duty/customs
>tax on imports of ICs to grow its young chip fab sector and give it a robust manufacturing
>ability. Some analysts thought this would be good for China in the long term as
>it would help its domestic chip producers.
A coumple of points. As a country their are certain cases where you should tariff. For example if your country has monopoly power on some product (and it's not likely to lose it by increasing prices) it actually should tariff the export. There's great discussion about developing industries. Some argue that if you let the companies grow while protected, then they can learn their trade and so be internationally competitive. Truth is this never really worked out. Companies with monopoly stay plumpy. They bribe their government stay that way (in fact China is seem as one of the Top 5 corrupted contries in the world.) And those tariff are seldom taken out. And also thay never take the cost to their consumers for those years of protection nor the increased cost to the rest of the industries that use that product as an input.
Regarding analysts, all I can say is that they are usually ignorant an lack the grasp of real economy to make mony doing business decitions. Ont to mention those that leter get favours out of good reports.

>Countries like the U.S. had high import tariffs in the 19th century to help its
>'in-house' manufacturing industries which were backward at the time, and this was
>a large part of the cause of the War Between the States here. Now that our industries
>are world leading we drop tariffs and advocate that other countries do the same.
Funny, but actually this administration has been imposing tariffs (or subsidies which are almost the same) at a higher rate than before. But you have to consider this part of the ongoing economic war with Europe and Japan. May be some other more local interesest, but let's not asume too much. But let's not lie to ourselves. USA as any other country tries to get tariff on the industries that are not competitive (because of lobby or nationalistic pride) and asks other countries to rise tarriff in those industries it is truly competitive. It's only that USA has a lot of 'negotiation power' and latly it's willing to use it all they way. I dont now if you are aware that you'd become one of the most hated countries of the world in just three years.
Regarding copyrights and patents, well, it's the same story. The US has the most stupidic, broad and unchecked patent law and office in the world. So also they have the most patents. And companies that profit out of those. It's been whidely accepted in the rest of the world that this single issue is responsible for the dearth of pharmaceutical innovation (since you can't do reseach without stepping on thousands of trivial patents that you don't even know that they exists.) I feel the same is true for many other industries. But the fact is that the only reasonable thing for the US to do is to impose it's system to the rest of the world. That way they get extended monopolies all over the world. HAve you even considered the fact that letting Microsoft be an unchecked monopoly have more effects in the rest of the world than in the US? I'm sure the consumer loss in the US is more than compensated for the monopoly benefit of MS un the rest of the world. That's also why US usally reports the GNP instead of the GDP. The former inludes how US companies did in the rest of the world, while the latter only how did the economy within US borders. So if you do better than the world, you report GDP, if you don't but your companies are storng abroad, you report GNP.


>One other tidbit: we were a 'pirate' nation for over a century that did not respect
>the copyrights and patents of other countries ;)
>
>>>What do you mean by saying that income tax is very efficient / 'incentive of economy intact'?
>>Well, the only non distorsive tax is the lump sum tax (i.e. everybody has to pay
>>$x(i) to the government).
>
>Can this x() function vary by income? And if so would it still be non-distortive?
Nope, i is each individual. If it depends on income than it affects your decision to earn more income (since it's not taxin the not having income)

>Or is the only non-distortive tax the transfer of an absolute amount of money /
>lump sum from each individual to the treasury? Would this even apply to babies
>as counting them out would perhaps be distortive?
I'm afraid that that is the only non distortive tax. You don't need to tax everybody. In fact you could tax just one guy. But you wouldn't get enough money levied. Usually you think only about adult citizens and companies, not babies because that distorts your decision of having children (watchthe chinese case).

>What about taking a page from income tax methods and having only sales tax (which
>would be best/most efficient) while giving the poor a 'rebate' check say every week
>from the treasury? This would be fair to the poor, and even some basic things would
>have no sales tax like water and milk and bread to help them out even further. What of this?
Well, then you're making the VAT (don't confuse with sales tax, that's for final sells) an income tax :-) Besides, the cost of the rebate might be higher than the benefits. Plus, the corruption and frauds that this generates.
Not taxing certain basic necesity items is a widely practiced technique. I won't defend it one way or the other, but IIRC rich people consume more of those things than the poor, even though it represents a higher expenditure for their income. This usually gives way to the luxury items taxes. but that usually is criticized with the fact that the rich will usually pay it anyway but the medium or poor will be excluded. So if you're not so well of and you want to buy a wedding ring, you can't afford the nice one because it has a luxury tax. It might be a much more important thing for you to be able to afford than to a rich man. But for your own good it's taxed as luxury.
As you seen in economics it's never a clear black and white thing.

Regards,
Alejandro Belluscio
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New Article AvailableDavid Kanter2003/02/02 02:44 AM
  Excellent Article, Paul (NT)Arcadian2003/02/02 04:57 PM
  Yikes! Slashdotted!Dean Kent2003/02/02 07:53 PM
    Yikes! Slashdotted!Singh, S.R.2003/02/03 12:38 AM
      Yikes! Slashdotted!Dean Kent2003/02/03 12:53 AM
        Yikes! Slashdotted!Anonymous2003/02/03 07:03 AM
          Yikes! Slashdotted!Dean Kent2003/02/03 09:13 AM
  FYI, Paul:Peter Gerassimoff2003/02/03 01:38 AM
    FYI, Paul:Bill Todd2003/02/03 03:18 AM
      FYI, Paul:Marc M.2003/02/03 10:08 AM
        Opteron SPEC PerformanceArcadian2003/02/03 12:15 PM
          Opteron SPEC PerformanceMarc M.2003/02/03 12:18 PM
      i want to see those links pls!! (NT)waitressInGaza2003/02/03 01:15 PM
        i want to see those links pls!! (NT)José Javier Zarate2003/02/05 09:23 AM
          i want to see those links pls!! (NT)waitressInGaza2003/02/05 02:50 PM
            i want to see those links pls!! (NT)tecate2003/02/05 05:09 PM
              gender should be irrelevantwaitressInGaza2003/02/05 06:36 PM
                gender should be irrelevantDean Kent2003/02/05 07:03 PM
                gender should be irrelevanttecate2003/02/05 09:27 PM
                  well it is all about your viewpointwaitressInGaza2003/02/06 12:44 AM
                    well it is all about your viewpointdoriangrey2003/02/07 12:39 AM
                Please be a girl. :pNIKOLAS2003/02/06 06:28 AM
    FYI, Paul:Paul DeMone2003/02/03 08:43 AM
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  well written indeedhobold2003/02/03 07:41 AM
    well written indeedtecate2003/02/03 09:05 AM
      well written indeedhobold2003/02/03 09:12 AM
    well written indeedPaul DeMone2003/02/03 09:15 AM
      well written indeedhobold2003/02/03 12:04 PM
        well written indeedPaul DeMone2003/02/03 12:58 PM
          about Jim KellerMarc M.2003/02/03 01:50 PM
            about Jim KellerPaul DeMone2003/02/03 02:22 PM
              Nope but will now (NT)Marc M.2003/02/03 02:50 PM
              patent info...Marc M.2003/02/03 02:52 PM
              about the article...Dean Kent2003/02/03 04:49 PM
              Er, I just have to point something out.Anonymous2003/02/04 10:19 PM
                Next time check the date.Paul DeMone2003/02/05 01:10 AM
                  Yes, I know it was written in 2000.Anonymous2003/02/05 12:42 PM
                    Yes, I know it was written in 2000.Paul DeMone2003/02/05 01:20 PM
              about Jim KellerAlejandro G. Belluscio2003/02/09 01:09 PM
                about Jim KellerDean Kent2003/02/09 01:40 PM
                  about Jim KellerPaul DeMone2003/02/09 02:00 PM
                  about Jim KellerDavid Wang2003/02/09 02:18 PM
                    about Jim KellerPaul DeMone2003/02/09 03:47 PM
                  about Jim KellerInterested in Illinois2003/02/10 11:11 AM
                    about Jim KellerDean Kent2003/02/10 12:06 PM
                      about Jim KellerAlejandro Belluscio2003/02/11 06:53 PM
                        about Jim KellerDean Kent2003/02/11 09:52 PM
                          about Jim KellerAlejandro Belluscio2003/02/12 11:06 AM
                            about Jim KellerInterested in Illinois2003/02/13 04:19 PM
                        about Jim KellerInterested in Illinois2003/02/11 11:35 PM
                          about Jim KellerDavid Kanter2003/02/12 12:24 AM
                          Taxation systemsAlejandro Belluscio2003/02/12 10:54 AM
                            Taxation systemsInterested in Illinois2003/02/13 07:23 AM
                              Taxation systemsAlejandro Bellusco2003/02/13 10:53 AM
                                Taxation systemsInterested in Illinois2003/02/13 03:47 PM
                                  Taxation systemsAleajdnro G. Belluscio2003/02/13 05:56 PM
                                    Taxation systemsJouni Osmala2003/02/14 08:03 AM
                                      Taxation systemsAlejandro G. Belluscio2003/02/14 06:13 PM
                                  Taxation systemsDavid Kanter2003/02/15 12:18 AM
                                    Taxation systemsAlejandro Belluscio2003/02/15 08:36 AM
          well written indeedhobold2003/02/03 02:40 PM
          E8870 ChipsetJosé Javier Zarate2003/02/04 03:19 PM
            E8870 ChipsetArcadian2003/02/05 01:54 AM
              E8870 ChipsetJosé Javier Zarate2003/02/05 09:13 AM
                E8870 ChipsetArcadian2003/02/05 12:49 PM
      Minor questionJosé Javier Zarate2003/02/04 03:24 PM
    well written indeedDean Kent2003/02/03 09:18 AM
      well written indeedhobold2003/02/03 09:36 AM
        well written indeedDean Kent2003/02/03 10:33 AM
          hear hear...Marc M.2003/02/03 12:16 PM
          well written indeedhobold2003/02/03 03:02 PM
            well written indeedDean Kent2003/02/03 04:48 PM
              well written indeedhobold2003/02/04 01:56 PM
    well written indeedMarc M.2003/02/03 10:19 AM
      BTW Paul, it was VERY well written... BUT... =)Marc M.2003/02/03 10:25 AM
        Ditto (NT)William L.2003/02/10 08:28 PM
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          Watch thisSingh, S.R.2003/02/10 10:42 PM
  excellent article, just a nit or twomulp2003/02/16 12:11 AM
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