Taxation systems

Article: The Battle in 64 bit Land, 2003 and Beyond
By: Interested in Illinois (.delete@this..com), February 13, 2003 2:47 pm
Room: Moderated Discussions
Alejandro Bellusco (baldusi@hotmail.com) on 2/13/03 wrote:
---------------------------
>>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.

Didn't you say sales tax is the same/equivalent to value added tax, and that it (final sales method) is different than revenue tax? In other words VAT is just a nice term to make sales tax seem more worthwhile to the populace. That term is used in Europe I think.

Because you said that VAT/sales tax causes political problems if implemented at the state level (as opposed to the federal level).

>>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.

In the U.S. the military budget is approaching 4% of GDP and 20% of federal government spending. Part of the cost of maintaining an imperium. Europe and Japan don't have these problems, and for example Japan's military budget is about 40 billion USD, about a tenth of what it is here, yet their economy is much bigger than a tenth of ours. When we complain about Europe and Japan subsidizing some of their industries more than we do we don't factor in the subsidies we indirectly give to those companies in the military-industrial complex which we should.

>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

Some sectors like agriculture should be protected to some extent I believe since it can be thought of as part of a nation's food supply security.

>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.

Well anyway, the old order is crumbling as we speak: NATO (and perhaps the UN?) is a relic of the twentieth century.

>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

I thought research is just that and you can't break patents if you engage in it - only if you sell a product based on another's patent.

>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.

All I've heard is GDP from business and economic reports and articles. GNP is considered obsolete.

>>>>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)

I was thinking of a 'flat tax' where everybody pays say ten percent of income regadless of their income level. Perhaps this is non-distortive in that the same percent amount is extracted from each individual.

>>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

Another thing, why are companies' incomes taxed? If every employee of that company is taxed based on their income then isn't this enough? Having the company pay income tax as well seems like 'double taxation' to me.

>>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

I thought VAT _is_ sales tax?? They are for final sales only (as opposed to revenue tax like you said).

>sells) an income tax :-) Besides, the cost of the rebate might be higher than the
>benefits. Plus, the corruption and frauds that this generates.

Well, above a cetain income level there would be no rebate, and for those above that level wouldn't this scheme perhaps be equivalent to a flat rate income tax?

Anyway, corruption is found in every system.

>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

That's alright; they have to enjoy their money.

>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

No I don't like luxury taxes.

>As you seen in economics it's never a clear black and white thing.

Similar to computing!

Sincerely,
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                              Taxation systemsAlejandro Bellusco2003/02/13 09:53 AM
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