You can advocate really low income taxes or flat taxes, but income tax makes up around 30% of total tax revenue and is the single largest contributer to tax revenue overall. The imposition of a flat tax or significantly reduced income tax would have a devastating effect on the provision of public goods, caused as a direct result of a reduction in revenue and leading to lower living standards for the poorest in society

Sales taxes raise a lot of revenue but cause massive price inflation for end consumers as a result of cascading, particularly in low-value basic goods, which would hit the poorest the most. Value added taxes are far more efficient than sales taxes because of their incremental nature, and in the EU/UK we use a VAT of 20% on most transactions which is only claimed/paid by businesses on a quarterly basis

Capital gains tax is something that should be talked about a lot more in terms of raising revenue IMO. That is a tax that would pretty much only affect high net worth individuals and if they tried to go through shell companies you could tax the profit on transactions originating from your jurisdiction

Corporation taxes should be the lowest out of the main taxes IMO. They don't raise as much revenue as you may think and it disincentivises transfer pricing shenanigans

If there's one thing that would make the suburbs riot, it's this. I am very opposed.

Let's use an example then. How often are the suburbs making $20,000+ profits on a single stock trade? This is unlikely to affect people with even above average net worths in the US, where share ownership is very high. Plus, it raises more revenue when stocks do well and less in times of recession, so it's efficient by not disincentivising market activity

I don't know what your policy is but in Canada a taxable capital gain is 50% of the realized gain. That 50% is then just taxed at whatever your individual marginal rate is.

Does the UK use safe income? For instance, I can't just move money via dividends in a tax-free manner via intercompany dividends anymore after CRA enacted anti-avoidence rules in 2015. I can only move dividends tax-free up to the safe income amount, which often retained earnings is a proxy for but you enter situations where someone with money will own a company that owns X % of a larger company but were not owners while that company accumulated retained earnings, and thus they cannot be paid dividends out of the safe income pool. Under the anti-avoidence rules those dividends result in some fairly hefty capital gains tax.

I might have just assumed you were from the UK for some reason.

This post was edited by SBD on Mar 10 2021 04:19pm

It's interesting to see this form of mindset. I'm curious, how is it Texas has no State Income Tax, yet operates on a budget surplus consistently?

See, in the private market, you need to sell a good or service that is desired in order to generate revenue. If you aren't providing something that people want, people don't buy your product. It's a simple matter. This is why in 2011 when Texas had a hard freeze, they didn't weatherproof their grid. The citizens said, "Nope, don't want a temporary raise in transactional taxes or power rates, not a big deal" and *gasp* the politicians listened. Now that the results of the citizens' choice is clear? They're willing to pay to weatherproof the grid. It's a fun thing, how markets correct themselves.

Everything in your post is talking about ways to generate revenue, yet exactly what product are you offering? Roads? Nah. If we're talking US federal government, a whopping $96 Billion is spent on roads annually. At the state and local levels, you have another $320 Billion. Between local, state, and federal levels combined, government spends in excess of $7 Trillion annually. So the roads account for less than 6% of overall spending, and less than 2.4% of federal spending specifically. And again, the people building and maintaining those roads aren't even government employees, they're private companies. So again, what product is the government selling? What service are they offering?

This post was edited by InsaneBobb on Mar 10 2021 04:24pm

Herman Cain, God rest his soul, started a national conversation with the 9/9/9 plan. The numbers need to be reworked, but having a VAT, national sales tax, and an income tax are absolutely necessary in this country. A VAT alone would raise substantial revenue from corporations and the rest of the world already has one.

It's similar in the UK. 100% of the gain is taxed starting from £12,000 and is taxed at the same rate as your income tax band (20%, 40% or 45%), but you get to deduct your personal allowance from the gain which is £12,500 for everyone

Looked up your safe income rule, makes sense to protect against paying dividends from cash not subject to tax yet, but I hadn't heard of it. There's no tax on inter-company dividends in the UK, we're very principles based and if there's an excuse to say something is tax neutral then we'll take it

You probably picked it up subconsciously from the way I type the word disincentivise, realise, etc



Thanks for the insight as usual

poor guy got so much crap for that by the racist media and political talking heads when it is a fairly sound basis for tax policy. the guy actually ran businesses for years and was chairman of the board of one district of the fed reserve before going into politics.

of course he started doing too well and was friendly with the original Tea Party (which wanted to actually clean up the twin terrors known as Wall Street and ridiculous government procedures) so the swamp me-too’d him before me-too was a thing

This post was edited by excellence on Mar 10 2021 05:10pm

No answer to the question? It was an honest question. What service or product is the government going to offer based on raised revenues?

Like, literally, if you're going to discuss raising revenues at the cost of additional money removed from people's paychecks, removing profits from successful capital investments, etc. then what additional goods or services will the government be providing?

A per transaction progressive rate will just result in micro-transactions.

If you're suggesting a progressive tax rate on cumulative capital gains, then it is going to impact everyone saving seriously for retirement.