Taxation systems

Article: The Battle in 64 bit Land, 2003 and Beyond
By: Aleajdnro G. Belluscio (baldusi.delete@this.hotmail.com), February 13, 2003 5:56 pm
Room: Moderated Discussions
Interested in Illinois (@.com) on 2/13/03 wrote:
---------------------------
>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.
Nope. Let's make it clear what Value Added Tax is. For product you sell you have to pay the government an x% amount, but you can deduct the y% you'd payed on taxes fro the inputs of that product. In other words, you have to pay x% of the revenue, minus x% of the inputs. So they only tax the value you added to your product.
The revenue is you pay y% of your revenue, period. So you're paying y% on what you added, y% on what your inputs added and y% on the taxes your input already payed. It's iterative taxtion if you want ;-)
The big confusion here is that both this schemes implies the intra companies comerce. But the sales tax is only for the final sell to the consumers. So has non of this considerations.
>Because you said that VAT/sales tax causes political problems if implemented at
>the state level (as opposed to the federal level).
Due to the above stated difference, you don't have discounts based on companies trade so you don't have polytical asymetries.

>>>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.
Have you even considered that the steps of research are patented. Besides, if what you develop has to pay royalties to a 100 patent holders it leaves very little even if they are willing to let you use their patent in reasonable terms. Which is harldly the case. Specially for IP companies.

>>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.
You're have a 10% distortion on how much you earn.

>>>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.
Yep. Taxing companies is easier. That's why they have now decided that payments of profits don's pay income taxes, they have already. This one actually makes sense

>>>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).
See above

>>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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TopicPosted ByDate
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
  larger cache for POWER4+?Anil Maliyekkel2003/02/03 05:08 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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