Use access key #2 to skip to page content.

ChrisGraley (29.75)

My opinions about taxes

Recs

16

March 01, 2010 – Comments (45) | RELATED TICKERS: AM.DL2 , CRIS

1) Only tax what you want to deter. 

2) A tax should not be regressive.

3) A tax should be simple to understand and easy to collect.

4) A tax should have a low cost of compliance.

5) Remember that all tax in the end is paid by the consumer.

6) Subsidizing good is never as effective as taxing bad.

7) In any redistribution of wealth, there is cost of government monitoring. This cost should be minimized.

OK, now imagine that you are starting a government from scratch. You currently have zero government spending, zero taxes and zero subsidies.

Obviously you want to build a government structure that helps your citizens, but where do you start?

Well you are going to need some income, so you need to come up with the fairest tax that you can find.

The best solution that I can come up with is a VAT on consumption of everything not needed for survival. I would exempt groceries, shelter, utilities, health care and gasoline. I am open to add more to keep this from becoming a regressive tax if anyone else can think of anything. I picked a VAT over a sales tax because it's easier to collect.

What would I spend it on first? Believe it or not, a redistribution of wealth. I would determine the VAT that I needed to collect to give everyone a weekly check that keeps them above the poverty line. This will be my only entitlement program and everyone gets it. Also everyone would be given a card that identifies their purchases at point of sale. They will also get 3% of the tax that they paid on those purchases. The reason why I do this is that it gives me a greater chance to collect the VAT as I can identify the end consumer in the VAT process and they have an incentive to tell me to get the money back.

In one step I have assured that everyone at least has the basics for survival. Those things will be cheaper because they are not taxed. I eliminated the big government of setting up a bunch of different entitlement programs. I didn't take away the incentive to work because any income a person makes is added to what the government gives them.

What other taxes would I have? Not much else. The only other taxes I would have are the double dividend taxes, provided they are not regressive. These taxes must be defined as special purpose taxes and designed to solve a problem. Such a tax would be like taxing smoking to pay for the related health care costs.

Would I tax Corporations? Sure, if they are the end user of a product.

Would I tax imports? Most definitely! VAT taxes would occur at the point of import. 

Would I tax exports? Most definitely not! Supplier VATs would be refunded at export to keep our goods more competitive globally.

What are some other benefits?

1) The tax is voluntary since it comes out of your descretionary income.

2) It encourages productivity and discourages consumption.

3) It gives us a trade advantage with imports vs exports. A big trade advantage.

4) It encourages saving discretionary income. 

5) It provides for a more equal division of labor.

I could give you more, but you get the point.

Would I have any other government spending other than entitlements? Sure, but all other government spending would be itemized as a percentage of VAT. Every citizen could see what percentage of VAT spending was for military for example. 

What about subsidies? I don't believe in them,They aren't as good at spurring good as taxes are at destroying bad. 

2 problems that I'm working on here and maybe someone else can help.

1) non-renewable fuels. Taxing those would be regressive and you know how I feel about subsidies. The only thing that I can think of is sort of an x-prize for coming up with cost effective alternatives.

2) The states would be fine with their own VAT, but I can't figure out a tax for localities. Property tax is how most do it now and it's regressive. The states could give the localities a percentage of their VAT, but it would have to be the same percentage to all towns and the towns lose their autonomy.

If anyone has a better solution for those 2 things, let me know. 

I know I'm leaving something out, so ask all the questions that you want and flame away. 

 

 

45 Comments – Post Your Own

#1) On March 02, 2010 at 2:32 AM, awallejr (83.97) wrote:

Whatever happened to your plan to skip the country and find a nice "tax free" place to live?

As for changing our tax structure, it simply won't happen.  It is too entrenched a system with too many lobbyists involved.

Report this comment
#2) On March 02, 2010 at 8:14 AM, ChrisGraley (29.75) wrote:

awallejr,

The plan is still in place. I can leave now if I need to.

I've got a boat, a place to go, and 3 passports.

I'm still working on a fourth passport and a few other tweaks.

I'm not really looking for a place that's "tax free". I'm looking more for a place that will leave me alone.

Report this comment
#3) On March 02, 2010 at 8:28 AM, devoish (98.52) wrote:

Ok, so let'smake this idea work, then we run for office under the "what are we crazy" party.

5) Remember that all tax in the end is paid by the consumer.

This is only true to a point. If a company has earnings $10.00/year on revenues of $40mil and is paying its executives/employees in the low six figures it will pass the costs on.

If a company has earnings of $10mil on revenues of $40mil and is paying its executives $18mil it has room to absorb a tax increase.

One of the better things about a minimum wage law, and/or taxing income to provide a safety net/above poverty level income is that has an equal affect upon all the companys being taxed. It does not give an advantage to GS over JPM who both have to pay their employees at least the same minimum amount, pay the same SSI unless you release earnings above $100k from it.

IMinimum wage does create an additional layer of Gov't to tax/restrict imports in order to keep that Gov't mandated cost from giving imports an advantage. And another layer to monitor compliance domestically.

With your VAT tax, if you based it upon a percentage of a products price, you would be giving any company, foreign or domestic that paid its employees below poverty levels a cost advantage. ex; a $1. employee plus a $1. product cost plus a $1.00 profit equals a $3.00 selling price times a 10% VAT equals a $.30 VAT tax on the product. A $.50 employee brings the product selling price brings the product cost down to $2.50, the VAT drops to $.25 conferring a $.05 price advantage to the company that pays its employees a lower wage and forces them on to the Gov't subsidy you provide, just as WalMart is accused of forcing their employees onto Gov't subsidized healthcare and gaining pricing advantage.

Here you have a black/market compliance issue also, and need enough Gov't to monitor and for enforcement.

6) Subsidizing good is never as effective as taxing bad.

I'm not much of one for absolutes, and I think the opposite of #6 is more commonly true unless "taxing bad" reaches for extremes. "Taxing bad" encourages tax evasion, for instance, a tax on cigarettes encourages black market cigarette sales. Or think prohibition, taxing liquor would not have stopped liquor production or sales. In both cases Gov't has proven to small to enforce the tax. On the other hand, writing a check for $200. to every American whose blood test came back with no nicotine would have people lining up at the Doctor's office. It would also have some Doctors accepting $50 checks to send in samples from known non-smokers or for their buddy who smokes.

There are no easy answers.

I would determine the VAT that I needed to collect to give everyone a weekly check that keeps them above the poverty line. This will be my only entitlement program and everyone gets it.

The opportunity to 'keep everyone above the poverty line'  is much more achievable if you are not competing against low cost imports paying employees slave wages with no future, but the unions have been telling you this for decades. A VAT tax or import tarrifs help solve that issue as compared to "free trade" by reducing the competitive advantage of cheap foreign labor. It is also possible that it just causes foreign companys to treat their employees (slaves?) worse if possible, until the worst possible, survivable living conditions are achieved (American slaves?) at which point increasing the an import tax will no longer worsen their lot.

The poverty line.

Where exactly is that? Does Jimmy Carter decide or does Dick Cheney? If I walk into your house and see a Television do your benefits gets cut? Or only if it a 36" screen or larger? Or do we do a full blown investigation to see if that TV was purchased before you became sick, so it is ok for you to have it, but not replace it.

Does "above the poverty line" include healthcare? Is it going to be what you need as recommended by your Doctor, or are we deciding if you are poor you do not get kidney transplants but you can have dialysis? Should that decision be made by someone who is elected, appointed or neither? No cosmetic surgery is generally a concept we would all agree on, but sometimes people don't want to look at a cleft lip and won't hire somebody with one. Should that person with the cleft lip be required to be so much better than everyone else that the people prejudiced against his/her appearance are driven out of business because the value brought by the person with the cleft lip is an overwhelming competitive advantage? Or do we get someone - say a Doctor - to decide that cosmetic surgery will help this person and if the doctor says so it is included in "above poverty"?

I have to go now, but I will come back and revisit this thread and see what you think.

Report this comment
#4) On March 02, 2010 at 8:57 AM, russiangambit (29.27) wrote:

As long as you don't tax property I am ok with that. The property tax is the most destractive when it comes to productivity and capital. And is so loved here in the US.

I personally prefer a flat income tax , not VAT tax.

Report this comment
#5) On March 02, 2010 at 9:13 AM, catoismymotor (34.75) wrote:

Forgiving me for chiming in to endorse the Fair Tax (www.fairtax.com). Since I have devoted so much of my time to this idea it would be a shame not to bring it to the attention of others.

Before labeling me a "moonbat" or "wingnut" go to the link and read about it. Any flaming towards me or this idea will be met with silence on my part.

 

Chris,

In the past you have stated that you are entertaining the idea of writing a book about your experience with making your idea a reality. Have you made any progress?

All the best to you and yours,

Cato

Report this comment
#6) On March 02, 2010 at 9:13 AM, ChrisGraley (29.75) wrote:

devoish did you decide you were going to argue before you even read this?

#5 if they have room to absorb a tax increase then they have room to lower prices. If they don't, someone will move in that will. What makes you think that we still wouldn't have a minimum wage? Actually my idea would be a little different than a minimum wage and would be in my "Fair compensation" bill but I'm not diverging from sticking to talk about taxes in this thread.

As far as #6 goes you do realize that we already have taxes on both of your examples and they bring in a huge revenue.

As as solving the plight of the global workforce, I would prefer to fix our country first.

As far as the poverty line, I'll let you decide it devoish. It doesn't matter. I'm not creating money, just redisributing it.

You want it to be $30,000 a person? So be it. Just remember that the VAT has to be high enough to support it. In fact I'd love to see what number that come up with.

 

Report this comment
#7) On March 02, 2010 at 9:16 AM, ChrisGraley (29.75) wrote:

I have started one, but I have to wait until the whole thing plays out to publish it.

That and I'm a little behind. ;)

Thanks cato and endorse away. A fair tax is better than what we have.

Report this comment
#8) On March 02, 2010 at 1:16 PM, dargus (89.46) wrote:

I’m just running some rough numbers in my head, but I see a serious issue with your idea. How much would it cost per year to keep everyone at poverty? Let’s pretend everyone lives in families of four. The poverty line right now would be $22,000 per family. If we have 300 million people, divided by four, times $22,000, it works out to about $1.65 trillion. If we take our GDP as total sales, $14 trillion, then we’re talking about a 10% tax just to cover your poverty payment. This was a quick thought, so feel free to point out any gross errors in my thought process.

Report this comment
#9) On March 02, 2010 at 1:53 PM, ChrisGraley (29.75) wrote:

That's exactly right dargus, but that is without welfare, social security, and a bunch of other entitlements that will no longer be needed.

Report this comment
#10) On March 02, 2010 at 2:04 PM, devoish (98.52) wrote:

ChrisGrayley,

You didn't expect me to just jump on board without thinking about what you are really proposing did you? I was taking you seriously.

#6 I know they are taxed. the point was that taxing cigarettes did not stop smoking so a "taxing bad" as you suggest works for some percentage of stopping smoking, but a nice advertising campaign about the perils of smoking, pressure in the schools and workplace did more. The same applies to liquor, "taxing bad" did not stop drinking, it just resulted in more crappy beer/wine to service the low income drinker. Once again, it did stop some drinking, but it would taker a much higher tax until you could finally affect the wealthy drunk.

I took your "this will be my only entitlement" comment to mean you would end minimum wage which some describe as an entitlement paid for by business. Sorry if I got that wrong.

As far as asking me what "the poverty level" should be set at, or what a poverty level income should be able to pay for... well it is your plan, I thought you had thought about it at least a little.

I have seen the "fair tax" and the "VAT" and like any other tax, the devil is in the details, not the talking points.

Russian - about the property tax. I am with you in principle about not taxing property, by which I mean land. But the real world bumps into that principle to. If i have 1/4 acre property should I be allowed to flush my toilet onto the ground on the side of my yard, which borders yours? Potentially you could have neighbors dumping crap onto three sides of your property. Cesspools are one answer and could be mandated when building, which is done. sewers are another and are required in NYCity where there is not enough land for cesspools. Those sewers have to paid for somehow. If you charge for each use of a sewer, some people are going to crap in abucket and throw it out a window. I believe that was done in your Russia, used to be done here, and led to dysentary among other problems. We are getting crowded. We need a war, a disease or enforced laws. I think I would prefer enforced laws to the first two.

Report this comment
#11) On March 02, 2010 at 2:29 PM, farmnut1985 (21.05) wrote:

How does your VAT tax apply to companies, corporations, businesses, ect. that have operating costs and such?  For example: purchasing supplies for manufacturing, crop supplies for farming, things that are currently write offs or you only pay tax on the net based on the income tax.  Do you pay VAT on the goods and raw materials needed to generate GDP or no tax at all?

RPM 

Report this comment
#12) On March 02, 2010 at 2:30 PM, dargus (89.46) wrote:

I understand what you are proposing, Chris. However, my calculation didn't take any other programs into account. With you poverty program only, I'm claiming you'll need a 10% tax. You'll also need money for administrative expenses, even with a small government. You can argue that GDP would rise under your system, or that it isn't really a good measuring stick for VAT revenue, but in roughly we're probably talking about a 20% tax. Had I assumed every household is one individual, the numbers shoot up. These numbers are 300 million times $10,000, which puts it at 3 trillion. We also have to consider how much of GDP will be considered necessities, which pushes the percentage up further. Then we get into even more sticky issues. Is caviar untaxed as food? How about plastic surgery? Stomach staples? Things don’t seem very clear cut to me. Even if you are able to get this tax through the legislature without a million payoffs to Congress people, the tax will eventually be used to target particular legislators' pet peeves. In fact, you endorse this in your system. Who is deciding what items are taxed? Perhaps we tax mansions, not small single family homes, because large homes are an inefficient (bad) use of space. While this idea might have merits on paper, once this tax becomes political, where does it stop?

Report this comment
#13) On March 02, 2010 at 2:32 PM, ChrisGraley (29.75) wrote:

I know you better than picking a number devoish, you wouldn't be happy with any number that I picked. :)

That's why I put it on you.

Report this comment
#14) On March 02, 2010 at 3:00 PM, ChrisGraley (29.75) wrote:

dargus since this tax will never happen it's a moot point, but you definately have valid points about the political asspects of the choices.

Can we avoid the politics in any tax system though?

Report this comment
#15) On March 02, 2010 at 3:25 PM, russiangambit (29.27) wrote:

#10 -  this is what utility bills are for. I don;t understand why you have to pay for utilities via taxes. Property taxes distort property values and cause all kinds of unhealthy behaviour on the appraisal side. In addition, property tax is nothing other than mortgage, only you can never pay it off and you can never predict how much you are going to owe next year of 5 years from now. You are at a mercy of appraisal boards, who as independent as the FED or corporate boards, that means not at all. You have to keep the beauracracy to enforce and administer the taxes. It is a nightmare. Put the tax on income, not wealth. By taxing wealth you ensure that the poor remain poor because they enver can accumulate the wealth fast enough, it gets all taxed away. If not this year, then the next and the next.

In addition, I 'd like to see the income stream be taxed only once to make the taxation apparent to an average person. Right now the same profit stream gets taxed 5-6 times before reaching its receiver. In the end government gets 70-80%  of it and then tells us that US taxes are low. BS.

 

 

Report this comment
#16) On March 02, 2010 at 3:28 PM, dargus (89.46) wrote:

No, and that is one of the essential problems with taxes, government in general really. Once you want the government to start providing services, some portion of the populace will be dissatisfied how “their” money is being spent. This is why I think government should get bigger the closer it is to you. It is difficult for the federal government to make policy that works in Oklahoma and California, yet they try this all the time.

 

Is your system of collecting taxes better than the current one? I’d say probably, but the redistribution creates a lot of issues. I like the idea of everyone having a basic standard of living, it is similar to how I feel about health care, but implementing it is hard. I haven’t even brought up inflation. If everyone gets a free $10,000 a year, will prices inflate? If so, the poverty line rises, handouts go up, more inflation. Plus, you’re going to piss off a lot of people who hate “Marxism”. :)

Report this comment
#17) On March 02, 2010 at 4:58 PM, ChrisGraley (29.75) wrote:

Russian, I agree on the property taxes, but I think that income taxes deter making an income. I'd rather deter unnecessary consumption. I agree on making the tax simple to see for the average person.

dargus, I'm not so sure on inflation. I think that spending will rise on non-taxed goods, but as you pointed out the VAT would need to be high on taxed goods so spending there would be less. dargus, you also hit the nail on the head that the more entitlements, the more people are unhappy. That's why I like the redistribution. People will always spend their own money more efficiently then the government.

Report this comment
#18) On March 02, 2010 at 6:27 PM, devoish (98.52) wrote:

Russian,

I don't think there is an easy answer. If you someone does not pay a sewer bill where does his crap go after you cut him off? I would suggest something along the lines of not taxing the first 3 acres for instance. But once again, if you do not force some people to not pollute their neighbors yards, they'll pollute. I understand 95% of us will try to respect property rights, but that number drops when you are trying to survive and you just don't have the money to build a cesspool. I am sure that it could be done through law and punishment outside of the tax system, but it is costly. The cost of sewer hookups could be included in Chris's VAT tax by raising whatever amount is needed.

Chris,

I won't agree with your first number, and I probably wouldn't finish in agreement with my first number either. Above poverty level to me would include a place to live, say 500 square ft/person, food, clothing, heat, police protection, and healthcare as a starting point.

Report this comment
#19) On March 02, 2010 at 8:35 PM, ChrisGraley (29.75) wrote:

Sorry farmnut, I initially overlooked your post. You pay VAT on pretty much everything. You pay a mark-up for the value that you add to a product. But when you sell the product, everything that you paid VAT on is refunded back to you. Now if you buy something that is not part of your product, (Let's say a desk and you are a farmer) you are the end-user and therefore don't get a refund of the tax. 

Report this comment
#20) On March 02, 2010 at 9:13 PM, tkell31 (23.45) wrote:

"What would I spend it on first? Believe it or not, a redistribution of wealth. I would determine the VAT that I needed to collect to give everyone a weekly check that keeps them above the poverty line."

I like the idea, but I think you would be much better off just providing the people food, shelter and clothing.  Much harder to get into trouble that way, and trust me most of the people on the dole dont want to be bothered with working, or taking care of personal property.  I think the govt would also need a form of population control so people who didnt want to work wouldnt be having large number of kids. 

Report this comment
#21) On March 02, 2010 at 9:29 PM, ChrisGraley (29.75) wrote:

devoish, thanks for still playing but I need a dollar amount. I understand that I'm hitting you from left field with this, so take your time and really think about it. If it doesn't work in this scenario, it won't work in any scenario, so it's important. If we give someone enough money to take care of themselves, they will always spend it better than the government, because they have the advantage of knowing their own situation. The government has to plan for everyone needing a breakfast nook and everyone needing a kidney.

500 sq ft a person? 

So a family of 4 needs a 2000 sq ft home to exist?

I am really trying to understand this from someone that doesn't believe that heat is a necessity.

That would exclude about 60% of the homes in existence.

Now before you think I'm attacking. I'm not.  

I'm just trying to fit the whole conservation thing with the give me everything thing.

I'm sure you have something that makes sense, I'm just missing it. I'll give you a chance to explain. 

 

Report this comment
#22) On March 03, 2010 at 1:11 PM, dargus (89.46) wrote:

Something you haven’t mentioned it how we determine what the handout is. My method for a quick number crunch was to use current poverty measures, and I just thought of some more unintended consequences of that approach. The flaw is the amount you receive would decrease on a per capita basis as the size of your family increases. So, for example, I would be incentivized to file for my money as an individual, as opposed to a family. Cohabitation can significantly reduce expenses, but how do we use this to determine benefits? If I’m married and live with my wife, is this the same as having a college roommate? Do we simplify this whole thing by giving everyone the same amount regardless of living status? This seems like the simplest way, but it also is probably the most costly.

Report this comment
#23) On March 03, 2010 at 2:10 PM, ChrisGraley (29.75) wrote:

I think that the simple way is to give everyone the same amount. The extra cost would be offset in the cohabitation scenario by the extra taxes gained from that person having more descretionary money. Also you could avoid people having extra kids to get more money by holding a portion of the child's money until he/she reaches the age of 18. If the amount is too high it will lead to an increase of discretionary spending resulting in more taxes received.

Report this comment
#24) On March 03, 2010 at 2:18 PM, devoish (98.52) wrote:

Chris,

You are correct about the 2000 square being more than I would I consider as needed to be above poverty level. I only thought about it in terms of the first person, not additional people in a household. And in retrospect, even the 500 for one person seems excessive. Let's try 300 square for the first person in a family group, and 150 square for each additional.

My first room was an 8x10 bedroom in a house with less than 300 square shared kitchen/living room. I shared it with two other men and a kid. We almost came to blows trying to accomodate different lifestyles.

If we give someone enough money to take care of themselves, they will always spend it better than the government, because they have the advantage of knowing their own situation.

I think I understand how you are looking at this statement, but it is not just true. (Maybe I do not understand you) Gamblers, drug addicts, drunks, depressed people, sick people, will spend the last dollar in their hand feeding their addictions or are just unable to function. It is better to pay the landlord directly, or just build and give them the place to stay. The same applies to healthcare. You are not talking about people with the ability to control their habits. The feel good story of reaching the gutter and recovering does not usually happen. It is usually the gutter becomes their home. So you have one group (yours) that you can help by letting them allocate the money given to them, and another that I describe, that cannot.

And all of these people are vunerable to fast talking banks with usurious credit card rates.

Report this comment
#25) On March 03, 2010 at 3:55 PM, farmnut1985 (21.05) wrote:

Chris,

How about we include drug screening to get the government money as well, seems only fair since a lot hard working people have to subject to it that someone on a handout should too.

 RPM

Report this comment
#26) On March 03, 2010 at 6:48 PM, ChrisGraley (29.75) wrote:

That's a valid point about the addictions, but that would be a minority of the population. 

On the other hand, if I divvy out for each individual program, there is money wasted. 

Lets pick 5 things needed to survive

Housing

Food

Health Care

Child Care

Gasoline

Now the Government can dole out a certain amount of money for each of these things, based on average use, but people are different.

A young single working mom may have a great need for child care and gasoline if she has a long commute, but if she and her child are healthy, she might not use healthcare at all in a given year.

On the other hand, her grandpa may have paid off his house years ago, and only drives to church, the supermarket and the doctor, but he needs a lot more for his health care costs. He may decide that if he is allowed gasoline money that he doesn't need, that he'll use it and go on a few road trips. 

Also if we decide that we have a bunch of different programs, we have to monitor each and every one of them for fraud and those dollars that would be going to the individual are being spent on monitors. Did you know the the average welfare recipient receives 10 cents of every dollar spent on welfare?

I think that alcoholism can be solved with a double dividend tax and proper law enforcement, but the rest are a bit tougher. 

You can't properly fund programs with a double dividend tax in things that are illegal and taxing gambling is almost impossible at the individual level.

Hmm, it could be possible to take control of a person's entitlement money if he/she is deemed to have addictive behavior or a mental disorder. We could assign a social services person to handle their money for them. If we went that route though, we would need to fund these people from money that doesn't belong to the individual. If we funded them with the individuals's money, they would have an incentive to keep them dependent. So I think we might have to raise the VAT to pay for this.

It is a good point devoish and i'm not sure if what I came up with is the best solution, but I think it's a more efficient solution than multiple programs.

Please chime in.

farmnut, I would have no problem taking a mandatory blood test,  but I don't think that it would be something that would go over with the public.

If everybody is getting a payment, then everybody would have to get the test. That's the only fair solution. So now we are paying for 300 million annual drug tests. Next in order for them to be effective, we would have to do them at random. That means that the government calls you up and tells you that you will be in this clinic on this date at this time. If they let you come up with reasons to stall, you just keep stalling until the bad stuff is out of your system. If they don't allow reasons to stall, you are going to miss the kids baseball game, an important business meeting and heck, depending how tough they want to be, maybe even the delivery of one of your children, to go down and take a test that you know is meaningless because you don't do drugs. Add the fact that every time you step foot in the medical facility you have a chance of becoming ill or getting MRSA and the protests will win the battle.

You did give me a chance to bring up another topic though farmnut. I am a huge supporter of maximum freedom, but  I think that some people may take that as freedom to break the law. It's not. If you think that camera that your town installed to take pictures of you running the red light is an infringement of your freedom, you are wrong! It's an enhancement of someone else's freedom. They have the freedom of not getting killed by some idiot that can't wait a few minutes for a red light. Same thing for the camera that gets you for speeding. I'm still amazed that people don't understand that freedom needs to be balanced with responsibilty.

all good points above, keep em coming. 

 

Report this comment
#27) On March 04, 2010 at 12:49 PM, dargus (89.46) wrote:

I have a better idea, let's legalize drugs. Now they will be part of your VAT and create income. If you attempt to implement a mandatory drug testing program, this country will be burned to the ground. Expect huge protests. Why can't people see what a huge failure the War on Drugs is? If the country did go the testing route, it should criminalize alcohol and tobacco to create a consistent policy.

I agree with you about traffic cameras, but your argument can be extended. Why not put cameras on every public street? Think of how many crimes we can detect, and how much this will protect the public. Protection and freedom/privacy are usually trade-offs. 

I find this statement completely bizarre. "I think that alcoholism can be solved with a double dividend tax and proper law enforcement." What? You mean the tax proceeds are used to fund anti-alcoholism programs? How exactly does law enforcement prevent alcoholism? It isn't illegal to be an alcoholic. If I sit at home and drink all day, what is the law going to do?

Report this comment
#28) On March 04, 2010 at 3:47 PM, farmnut1985 (21.05) wrote:

I'm not talking about nationwide random drug tests, I'm suggesting if you are on welfare/unemployment, you are subject to random drug testing.  Just seems fair since I have to take a piss test with somebody looking over my shoulder to get and keep a job, seems fair since they are being paid with my money as well as yours.  Don't government employees have to take random drug tests?

 RPM

Report this comment
#29) On March 05, 2010 at 10:53 PM, ChrisGraley (29.75) wrote:

dargus, tell me more about your plan. Is it all drugs that you want to legalize or certain ones? This tax structure will work well for the legalization of drugs, but I'm not sure I would endorse legalising something like heroine.

Is a camera on every corner any different than a cop? What kind of privacy should someone expect in public? 

I was referring to the scenario where someone else controls their money like a social worker. 

Law enforcement's role is to make sure that when they have an alcohol related arrest, that the person gets evaluated for alcoholism. Yes a DD tax is one where the revenue is used to fund a solution to the problem.

farmnut, in my tax plan, there isn't any welfare or unemployment. Everybody gets the same check. 

Report this comment
#30) On March 08, 2010 at 12:07 PM, dargus (89.46) wrote:

My plan, eh. That is a difficult one, because I am torn on this issue. My personal feeling is people should be able to ingest any substance they desire, although I do recognize this has repercussions. Do we treat them like alcohol where we only arrest for illegal behavior caused by ingesting a drug? I’m not sure this would be a doomsday scenario, but it would negatively affect some, but by their own choices. The drug most obviously misclassified is marijuana, so I’d certainly start there. I’d also be happy with a government policy that deals only with commerce. So, for example, the government could criminalize economic transactions involving certain drugs. This would make it difficult for people to acquire processed drugs like cocaine or heroin, but drugs like marijuana could be easily be grown and used in the privacy of one’s home. Granted people could grow and refine coca or poppies in their own home, but I suspect this wouldn’t be an epidemic. This would put marijuana on the level of home brewing, which, in my opinion, seems fair. However, we’re really only talking about federal level laws, so states would then have their own, probably more restrictive, laws in place. This would be good because people could move to the place most consistent with their own feelings on the issue.

Your stance on alcoholism disturbs me. It raises a myriad of individual freedom issues. How do you define alcoholism? Do we really want a bureaucrat handling people’s economic affairs? Being an alcoholic isn’t illegal, yet you are suggesting a punishment for it. Now you do have the stipulation of a crime being committed, but that can be abused. Public intoxication is technically a crime, so anyone intoxicated in public could be screened for alcoholism and have their assets taken over by the government. It seems like a bad idea to me. I want to see a history of dangerous, alcohol related crimes (DUI, assault, etc.) before the government moves in and says an individual has issues the government must help to correct. I hate this cliché, but this sounds very “nanny state” to me. In addition, if someone really is raging alcoholic, they will very likely find a way to drink anyway.

You don’t understand the extent of what I’m saying about cameras. The street in front of my house is a public street, so law enforcement could place a camera there pointing towards my private property. This is vastly different than traffic cameras, but it follows the same line of thinking. If you can’t tell, I’m not one of those people who thinks you have nothing to worry about it you aren’t breaking the law. And, in some cases, I believe civil disobedience is necessary. Privacy protects us from the government overstepping its bounds.

Report this comment
#31) On March 08, 2010 at 8:59 PM, ChrisGraley (29.75) wrote:

The problem with the plan dargus is that you haven't drawn the line with enough clarity. Crystal Meth is home brewed as well and I don't know anyone that wants to live within 500 yards of a Meth Lab. Rights or no rights I don't want anyone to blow up my house with me and my family still in it. Also I'm not gonna be to thrilled if Junior is playing with your kid and he comes home telling me that he stepped on a needle because you are a heroine addict. If the law is gray, bad things will happen in both directions. It needs to be black and white.

I'm not sure about your state, but in Ohio if you get a DUI, you are evaluated for alcoholism. You also take a class before you can get your license back. That alcohol evaluation stays in the court record in case you get another DUI.

There has to be a point where someone recognizes that you are a danger to yourself.  It's at that point and not before that some action needs to be taken. 

I'm not advocating taking any of your assets are taken away. I am advocating that someone makes sure that your food, rent, and treatment bills get paid before you have leftover beer money.

A camera that sees what anybody else outside can see is not invading your privacy. A camera that can see in your front window is.

You do know that the police car going around your block also has a camera inside it don't you?  That camera isn't turned off when it's in motion.

Report this comment
#32) On March 08, 2010 at 10:19 PM, devoish (98.52) wrote:

devoish, thanks for still playing but I need a dollar amount.

$105,000.00/year.

Report this comment
#33) On March 09, 2010 at 11:33 AM, dargus (89.46) wrote:

I live in the heartland of meth country, so you don’t need to tell me about it. Making meth is a dangerous endeavor, so making it illegal to produce seems to make sense. To continue my alcohol analogy, home brewing is legal and home distilling is not. Distilling can also be a dangerous endeavor. As for you not wanting you kid get stuck with a heroin needle, don’t let her play with the heroin kids. Your kid could come home from the neighbor’s drunk as a skunk, as it stands today, because your neighbor the alcoholic got drunk and left the alcohol cabinet unlocked. It is your responsibility to raise and protect your children. It isn’t the law’s job to protect you from things you personally find objectionable. Freedom is a frightening thing because it allows people to do things you don’t like. I don’t believe people should be punished for using drugs, they should be punished for infringing on the rights of others. We could expand your alcohol program. When drugs/alcohol are repeatedly the catalyst for illegal behavior, the state gets involved.

Report this comment
#34) On March 09, 2010 at 5:30 PM, dargus (89.46) wrote:

As I said earlier, we are also dealing with Federal regulations here. They shoud be the least restricitive. Your state and local governments can pass more stringent regulations to deal specifically with local issues. 

Report this comment
#35) On March 11, 2010 at 9:30 PM, ChrisGraley (29.75) wrote:

 

devoish wrote

$105,000.00/year.

 

It can be done. You won't like the resulting inflation or the tax rate, but it can be done. Since we are not consuming much money in the process, it's just a simple redistribution of wealth and the money stays in the system.

I agree with all of the above in your last post dargus, but this isn't about penalizing someone for using drugs, it's about supporting their habit with your tax dollars. Remember that with freedom comes responsibility. So if you are going to give someone money pursue their freedom, you have to consider the effects if they are irresponsible with that freedom. This isn't about what is objectionable. It's about the safety of you and your neighbors.

What about a drug that puts you in a rage like PCP?

What about someone that takes a drug like LSD and then gets behind the wheel of a car?

In both of the above cases they could be taking it for the first time and not be addicts, but both cases would end in disastrous results.  There has to be some Federal regulation because there is no guarantee that once the drug is taken that they will stay within local or state borders.

Also the federal government is responsible to society that the money that it's handing out doesn't make their life worse. 

Again I'm not saying that you can't do it, I'm just saying that it needs to be very black and white if you do.

I can already see the defense attorney arguing that it's the government's fault that you killed someone because they gave money to an addict to buy drugs. 

Report this comment
#36) On March 12, 2010 at 12:41 PM, dargus (89.46) wrote:

This highlights the many problems with a collectivist society. In your system, since the government is so actively involved, it can assume much authority using the protection argument. And, if history is any guide, the government will take every opportunity to increase its control over your life.

 

I still say the drugs issue can be addressed by prosecuting crimes committed by drug users, not by prosecuting people for using drugs. Someone driving under the influence of LSD, this is clearly a crime. People drive under the influence of alcohol all the time and this isn’t any less dangerous. Do we ban alcohol to prevent this? No, we prosecute the people who attempt the dangerous act of driving while under the influence of alcohol. PCP sends someone into a rage? So what? If they try and attack their neighbor, they’ve committed a crime, otherwise who cares. I don’t know where you live, but do you honestly think your neighborhood would be overrun by dangerous drug users if it were to be made legal? Drug users aren’t even necessarily dangerous, it is drug abusers who are generally the problem, yet we tend to stereotype everyone who uses a drug into the latter category. I’m not against reasonable regulation, but just because a drug could cause a hypothetical person to commit a crime isn’t enough justification in my mind to ban its private use. I’d probably be willing to be more flexible if the laws weren’t already so lopsided. I feel like conceding this point of individual liberty will only lead back to the policies we have now.

 

Anyway, back to the government discussion. Perhaps the earlier poster who suggested limiting what the government money can be spent on is moving down the right track. Limit it to food, clothing and shelter only. Rather than giving everyone money, give them government credit that can be used to purchase approved items. Again, this gives the government a level of control I’m somewhat uncomfortable with, but it is only over the “free” money. I can still go out and earn my own money to spend as I please. A system set up like this would function in a similar manner to how I think health care should work. This seems like a reasonable hybrid between free market capitalism and pure socialism. Free market theory suggests this will lead to some inefficiencies, but, at least before years of this system going through the political grinder, it could be acceptable.

Report this comment
#37) On March 12, 2010 at 8:11 PM, ChrisGraley (29.75) wrote:

I totally agree with your last post, and I agree with your solution as well.

This would also eliminate the need for a social worker to manage an addicts money for them. I love when layers of government are eliminated.

It sounds like you have found an effective solution.

So together we just...

1) Made sure that the weakest of us are provided for.

2) Eliminated many layers of government with the entitlement programs.

3) Expanded personal freedoms.

4) Made something that we were spending money to try to prohibit and made it something that gave us tax revenue. 

 

Report this comment
#38) On March 12, 2010 at 8:52 PM, devoish (98.52) wrote:

I agree in principle with your last reply dargus, but in reality, I don't want to wait until some crack head wrecks my car with me in it. Some accident risks are slight, some (drunks) less so.

It seems you have created public housing assistance, food stamps and medicaid.

Report this comment
#39) On March 12, 2010 at 9:58 PM, ChrisGraley (29.75) wrote:

It seems you have created public housing assistance, food stamps and medicaid.

No we've actually eliminated all of those things and simply transferred the money directly to the people. They can allocate it themselves. 

Report this comment
#40) On March 12, 2010 at 10:18 PM, dargus (89.46) wrote:

devoish is pretty much correct. If the government is putting limits on what you can purchase, it is a very similar concept. The only major difference is the pool of money can be allocated across all three areas as the citizen sees fit. It would help in the instance that one area of costs is lower than average and another higher. I'm not sure how much of a difference this would make. I'm still skeptical about the total cost of such a program as well.

Report this comment
#41) On March 13, 2010 at 10:39 AM, ChrisGraley (29.75) wrote:

That's not the only difference dargus.

We've also eliminated several layers of government.

Your medical bills aren't submitted to the government for review. The government doesn't pre-arrange where you'll live.

You don't have to show up at a government office once a month to prove that you are looking for work.

The government does not have to employ a ton of people in all of these departments to implement all of the various programs so more of that money goes directly to you. There will be some cost in this area to prevent fraud, but basically the only fraud that we have to worry about is making sure that a person only gets 1 check and that person actually exists.

The more government that you eliminate, the more government control that you eliminate.

OK, so let's talk about your concern about costs. I think that the costs of proving you are you, and you are the only you and you still exist is pretty minimal in the age of biometrics. I think that 3% of the collected taxes is way too high as a cost, but for purposes of argument, I'll make it 10%. This means that the tax gives you 90 cents of every dollar collected compared to say Welfare which gives you 10 cents for every dollar collected.

OK, so lets pick something extreme for the VAT tax. Lets say that to make sure that everyone gets the money that they need to survive, they have to pay a 40% VAT on discretional spending.

What does that cost someone that is simply living off the government? Nothing unless they buy something that they don't need to survive. Let's say that you want to buy a modest $100 TV. Depending on how many suppliers are in the chain you might pay $140 to say $165 for the same TV. That is a big deal to someone that needs the money to survive, so you will limit those purchases and therefore limit your taxes.

On the other hand, while someone with a much higher income will still limit their consumption to minimize their taxes, they are given what they will probably consider a tax refund to pay for necessities. This actually increases their discretionary income and will help offset their tax burden. This is very important, because they carry a much higher tax burden.

Economically this is the best tax scenario that I can think of.

1) You reduce unneeded consumption, so you become a net exporter.

2) You encourage savings because a saved dollar is an un-taxed dollar.

3) You encourage investment and small business because even if an individual fails, he has a guarantee of still having enough to survive.

4) By reducing consumption, you help the environment.

5) You allow more personal freedom and less government interference.

I could go on and on,  but you get the point.

The government is not putting limits on what you can purchase. You can purchase whatever you want if you can come up with the money yourself. I think the public does have the right to say that you can't buy drugs with money that we give you. I also think that it's a fair trade, given that you now have the freedom to buy drugs.

The alternative is that you can buy drugs with our money if you play by our rules and it can be just like borrowing money from your parents. 

I don't want government to be my daddy and I don't want it to be your daddy. 

dargus you actually sound perplexed. That's not a bad thing because you are equally open-minded. I suggest that you write down everything that you want and then write down everything that you think is fair. Then work your way backwards from what that reality is like to where we are now. That will give you a game plan. The biggest hurdle that you will have is to think about the people that are hurt in your Utopia. If you can objectively make sure that those people are respected you might be on to something. There is no perfect answer, so you just have to try to get as perfect as you can.

 

Report this comment
#42) On March 15, 2010 at 12:09 PM, dargus (89.46) wrote:

If the government isn't going to let you buy certain things with the government allowance, there will have to be an administrative cost to enforce this rule. Before you can even incur this cost, you have to determine what can and can not be purchased. This is a layer of bureaucracy you didn't address in your last post. I’d suggest setting it up on the supply-side. Sellers need to have their goods and services approved by a government office. I suspect this bureaucracy, like most of them, will tend to increase in size. As we find fraud in the system, people will clamor for solutions. I suspect the solution will be to increase the budget for administering the program. Would this be better than what we have now? This depends entirely on how you choose to define better. I’m inclined to say yes, at least at the program’s inception, but what if we compared this program to the “layers of government” we have now at their inception. Would the picture look different? Again, I’m not sure since I’m not looking at any data, but I suspect it might look a bit less clear which is “better”. At any rate, after half a century, this new system will probably have a lot of layers added to it.

 

This system will also encourage business to lobby to have their own goods and services approved, and competitors rejected. We can come up with simple rules for approval in an attempt to prevent this, but to think pressure won’t be applied by those who have the means would be a bit naïve, in my opinion. I also see this moving towards more complexity (i.e. easier to lobby) as time progresses. The system may sound great on paper, compared to what we have now, but what will it become?

Report this comment
#43) On March 15, 2010 at 11:27 PM, ChrisGraley (29.75) wrote:

Another good post dargus,

There will be fraud no matter what, but remember that with a VAT there is a paper trail. Not only does your company have to commit fraud, but you have to convince everyone in the supply to back you up. It's hard to convince the world that your selling Cornflakes when your biggest supplier is the maker of the wonderbra. It's hard to prove that your are supplying corn to a cornflake manufacturer when your own suppliers are selling you cotton and silk. The kickback line starts to get awfully long in this scenario.

As far as determining what can and can't be bought with government funds, I suggest that you concentrate on what can't be bought through the legislative process. 

Will lobbying still exist? Yes. But concessions still have to be sold to the public. It's hard to ban something and then sell a loophole to the same public. It's also more expensive to bribe a congressman than the chief of the cornflake commission.

As far as what it will become, I don't have an honest, objective opinion on that one. Subjectively, I think that at it's best, it would be much better than we have now and at it's worst it can't be worse than we have now.

That just me though. I just don't see these extra layers and the cornflake commissions taking shape.

Maybe you could add more details to convince me?!? 

Report this comment
#44) On March 16, 2010 at 12:33 PM, dargus (89.46) wrote:

Large, public corporations have been able to defraud the public, even in the recent past. How much easier do you think it would be for a small, private business? I know it seems like a simple system, but it is still difficult to enforce. You need to verify every store that sells government approved goods. I can buy corn, dump it in the land fill, and sell you a bunch of drugs paid for by the government, or to look less suspicious sell the corn and the drugs. One thing I can be sure of is this will happen somewhere, if not many places, under this system if proper verification is not done. Once fraud is uncovered, you can bet if it is of any great size, a media firestorm would ensure and the rabble would be roused. My assumption is this would lead to the public demanding tougher regulation, which means more cost. I guess I'm just a cynic who believes committing fraud is relatively easy, at least in the short term.

Report this comment
#45) On March 16, 2010 at 7:07 PM, ChrisGraley (29.75) wrote:

That's the beauty of the VAT tax dargus. The guy that sold you the corn wants his VAT tax back so he's gonna report that he sold it to you and what he sold it for.

Your store then has to report that it marked up the corn 8000% or you have to sell drugs at the price of corn.

How are you going to advertise the VAT free drugs? Are you gonna put up a sign in your store? Do you plan on never having any disgruntled employees? At least the ones at the cash register would need to know what's going on.

If your revenues don't match your receipts you'll need to launder the money somehow. Also, the States are dependent on a VAT too and law enforcement still deals with drug abusers. Are you sure that they wouldn't turn you in if they could get a reduced sentence?

Will there still be fraud? Yes, Will it be any easier to pull off? No, in fact it would be harder. You have increased the number of people that have to be in on the fraud and a chain is only as strong as it's weakest link.

 

 

Report this comment

Featured Broker Partners


Advertisement