Two things have been swirling around in my head this week, and this morning the two of them connected.
First of all, was the idea of “Spread the wealth, “ you know that phrase that then Senator Obama uttered to “joe the Plumber” in Ohio. It was the idea that the wealthy need to be taxed to share with those who are poor or not as wealthy.
The second was the idea of sin taxes and government tax rebates. This is taxing or providing rebates for the purpose of shaping behavior. For example we tax cigarettes to make it more unattractive to smoke, or we offer a rebate to those who buy a greener car, while letting the SUV owner fend for himself.
So last night, I’m re-visiting a story about the state of New York getting ready to impose a new tax on every can of soda so that people will have to pay more to get fat on sugared drinks. Then it hit me! Bam! If the government is going to be in the business of shaping behavior with taxes and rebates, and spread the wealth since they obviously think that is the way to go, why not use the same concept , but in an additional way.
May I propose the “Spread the Responsibility” Concept. This is the idea that we really use taxing and rebates to spread the responsibility in this country. It could spur people to change their situations and behavior.
For example, we tax the poor more, because then they will want to change their situation and get a better job.
We tax the unemployed and homeless, so they will want to acquire a home and job.
We tax those with guns at an exhorbitant rate so they will put their guns away, and not buy them.
We tax rappers with swear words in songs so they will insert more responsible language.
We tax members of Congress when they don’t have budgets done on time.
We tax illegal immigrants more so they will leave or want to become legal.
We tax illegal employers who employ those illegal immigrants .
We tax those who don’t graduate at a higher rate.
We tax gangs.
We tax single family homes, so we’ll have two parents staying.
We tax those in jail, work release programs, and juvenile detention centers at a higher rate.
We tax parents higher who allow their kids on the street after 8:00 pm.
We tax drug dealers to make them stop dealing and selling drugs.
We tax people who have too many kids who can’t afford them.
We tax people who are on welfare too long.
We tax loiterers.
We tax porn at a higher rate so kids and adults won’t get addicted to it.
We tax members of Congress for staying longer than 2 terms.
Conversely, we’ll provide tax breaks for graduating, staying out of jail, getting a good job above $40,000, supporting their families, and a host of other things I haven’t thought about yet.
Since it looks like taxes and shaping behavior are the only two things most of our representatives want to do, let’s use the money to help all of us. Right now, the responsible reap nothing from the sin taxes and behavior-shaping, so let’s get something back for the money government wants to take from us and help people make the choices most of us have already made.
Hey, if you can beat, join and revise!
Friday, January 23, 2009
Taxation to Shape Behavior.
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16 comments:
It's all so taxing.
Until some elected poo-bah talks seriously about instituting a simple flat tax........no deductions, no credits, no exemptions, no need for expensive CPA's to interpret and calculate your personal taxes, no need for a monster size IRS (largest federal building in DC, by the way) I've made up mind not to even get into discussions about taxation.
A simple flat tax would cure alot of ills wouldn't it?
Let's tax RANTERS !
Fred,
Great idea about the flat tax. It certainly would make for "less unfairness" if they have to confiscate from us. In response to your idea of "not even wanting to get into a discussion about taxes," you have to if we are to create REAL CHANGE. That's the problem; that too many have thrown in the towel when it comes figuring this out.
For Anonymous, I'm not sure if you are being sarcastic or making an attempt to in some different way adding to the discussion of my post. I wasn't ranting as much as I was trying to take a point of view in how government should operate, and pose another side using those principles. That's all!
Hi Gary,
I guess I wasn't clear. I didn't mean I was dropping out of the taxation discussion completely. It's just that when somebody in the national political arena (Steve Forbes comes to mind) suggests a 'flat tax', he gets dismissed even by his own tribe as a kook.
I don't get it, and it's quite frustrating. Anyhow, when the taxation issue is brought up during a discussion, just mention the concept of a 'flat tax'. The silence is deafening as the conversation shifts to another topic.
Try it and you'll see what I mean.
Ciao, Fred
Flat tax is not a fair tax guys.
You'd tax the person working close to minimum wage at McDonalds or Wal-Mart the same rate as the CEOs of those companies?
Our economy creates many cheap, service type jobs. People can't make a living wage flipping a burger or ringing a register. But someone has to perform those tasks, we all depend on it. So is it really fair to expect people who give more of themselves than what they get in monetary return to also pay the same rate of tax?
I hope none of you really believe that they should.
Ken,
I think that your argument is interesting because somehow you seem to think that each of us is forced into a situation like some member of a caste system. (example: Burger flipper vs. corporate head.) You also seem to assume that somehow who has achieved on a higher level, or is making more money should be taxed at a higher rate. Why?
First of all, our country has a need to have workers on all levels, and our history is full of examples of people overcoming all odds to become incredible successes. But, success should not be measured only in money. I really love what I do even though I think I could do more money doing something else. I hope that I am successful to some degree, not because of wealth but because of the product I honestly try to produce. I believe most are like me.
Since no taxes are really fair, don't we look for the least unfair tax for ALL members of a society? Don't we ALL have a compact to give a percentage of what we make to provide services, infrastructure, and security that we cannot by ourselves supply? If we use your theory of wealthy paying more, and less wealthy paying less in TERMS OF PERCENTAGE, do they then receive a RETURN PERCENTAGE of those services, infrastructure and security?
The point Fred is making, and I agree, is that even if everyone pays the same percentage of their wealth, the wealthy will still pay more in real money. There will ever be a "Fair Tax." It doesn't exist. There needs to be "a least unfair tax" for ALL people. Your explanation bases itself on a class struggle that views burger flipping as forced labor into which a person is trapped, while the wealthy person should feel guilty about his or her financial good fortune. What if the person doing one of those jobs you seem to look down upon is really good at it, comfortable with it, and sees himself as a success.
The world is full of choices, and we become what we think about, it seems to me. Success is in the eye of the beholder, but responsibility for the betterment of society should be EQUAL for all of us.
Gary,
I'll try to answer all your questions. I can only go off of my personal experience. I make $9/hr., more than a dollar over minimum wage. I don't know if I was forced into my situation or not. Employment has always been a struggle for me, I have cerebral palsy, so I'm limited physically and consistently struggle w/ self confidence.
I think I've overcome a lot of odds and consider myself somewhat of a success.I know money doesn't equal success, because I don't really have any money. So we're in agreement on that.
I disagree, taxes are not unfair, they are an unfortunate necessity. It's true that I don't pay a lot of taxes, some, but not a lot. If I paid a higher level of taxes, I'd have to cut back on things like food and asthma medicine. Those w/ much higher amounts of disposable income should pay a higher rate than those who spend all their money just to get by. Besides I think I contribute to society by only making $9/hr. It enables my employer to sell its products and services at a cheap cost to consumers like yourself. Prices would drastically go up if my employer paid me $20/hr.
I don't understand your claims about class struggle and being trapped and forced labor. Maybe I am trapped and forced, I dont know what you mean? Finally, I dont know where you got the notion in my previous post that I look down on people?
All I can say is that a person's own unique circumstances dictate how they view the world around them.
I am a professional burger flipper and I do not want my income taxed more. I Love my job. I make enough to support my family. We might not have new cars but we live a good life under our means. I think if they are going to collect income tax they should make people write their own checks and send it to the government, instead of deducting it out of peoples paychecks.
Kenneth,
A flat tax -is- a fair tax. If you're making 15k/yr then you pay a lot less than the person making a million per year.
That's fair, and there's a cutoff for poverty/hardship in most of the flat tax plans I've seen.
You also mention that "a person's unique circumstances dictate how they view the world around them".
Mebbe strongly color their perceptions... but "dictate"? Perhaps to people who have given up hope, or simply won't expose themselves to alternatives.
If someone has lost all hope, then that's their problem to fix, no matter what handicaps or hardships they are facing. Same with those who won't risk trying to alter their circumstances.
Country's full of people who've failed multiple times, but succeeded in the end. And with bigger problems than you have.
Rats, I'm doing something I said I wouldn't do, but please forgive me becasue I've got to add two more cents to the conversation.
Let's suppose the flat tax rate is 10%........pick a number, but 10% is easy to understnad and work with.
Anyhow:
1. As Anonymous pointed out, even a flat tax has a minimum income level that could be exempt.
2. A guy making $100K would pay $10,000 in federal tax, while someone making $30K would pay $3,000. That's fair in my opinion. Someone making a million bucks kicks in with $100,000, a tax burden equal to the income of the guy making $100K.
3. Don't think for one moment that people in the "million-dollar and over" club pay the rate spelled out in the tax code. You wouldn't believe the deductions, subsidies, credits, etc. that a nifty accountant can find for them. In fact, an account once told me that if you are in that catagory and are paying the full rate, you need to find a new accountant.
Personal story: A couple of years ago I had three separate accountants calculate my taxes. I got three separate answers. Guess which one I chose?
Bottomline: A flat tax is fair. I'm not one of these guys that thinks taxation is completely unfair. I like the fact that I can drive interstate highways, visit National Parks, and that some of the money is even used to help out the less fortunate among us by providing food stamps when necessary.
The current tax code is so convoluted and complicated that even accountants struggle with it.
As I stated in my intial response.....no deductions, subsidies, credits, or exemptions, and best of all, no multi-gagillion dollar IRS to support.
I understand why people like the flat tax and believe that it is fair. It's much more straight forward than our current tax code, which is a complete mess.
But here's my problem, the way I understand it-a flat tax system would tax each person the same exact%, regardless if you make 100k or 20k a year. What it does not take into account is that the less money one makes the more value each individual dollar has to that person, simply because they have fewer dollars.
So in simple terms a poor person holding 1 dollar in his hand is taxed the same as a rich person holding 1 dollar in his hand even though that single dollar has more value to the poor person than the rich person. Just my perception but it seems like the poor guy is getting fleeced.
Maybe I'm over analyzing it?
A Flat Tax COULD work, given a few things.
1) There would have to be a gross minimum under which you would not be taxed at all. Pick a number.
2) Any earnings over the above would be taxed at 10%, no exceptions.
The problem with all of this are things like homeowners wanting their deduction for interest, charities for charitable donation, etc. etc. All of those would have to go by the wayside rather than having to pick and choose which ones to keep.
As Fred pointed out, the current progressive tax does NOT always mean that the rich pay more taxes. Warren Buffet for year has shown that he pays less federal tax percentage than ANY of his employees (down to the lowliest). He is not bragging but pointing out the inequities in the tax code. He says further that he does NOT use anyhing tricky, just the typical write-offs that are allowed to anyone (or at least anyone with his money and latitude in how to spend/invest it that is !)
Touchdown, Anonymous!
That's one of the points I was trying to make. Your entry concerning Warren Buffet hits the nail on the head. I'm telling you this example can be repeated over and over and over and over again across America with people making alot less than Buffet.
I pay my accountant 8 or 9 hundred bucks every year to calculate my taxes for a good reason. Neither his firm nor I do anything illegal.
The current tax system takes good care of the Warren Buffets' in this world. Don't feel compelled to weep for them.
Everyone is missing the point with taxes we need to figure out how to get government to cut its spending habits. The problem is they "cut" taxes like paying minimums on credit cards but then they keep on running up new debt. The issue is spending. What social program do they not keep adding to: Welfare, schooling, SSI, Farm Subsidies on and on. Spending cuts are what is needed now. We are borrowing money from China to pay for our daily existence.
There you go Karl. You've completed the picture.........a flat tax combined with fiscal responsibility. What a novel idea (sarcasm injection).
If I recall the ultimate nuttiness was the Bush Administration's decision to borrow money to give us tax rebates while at the same time waging a war and increasing spending at the same time. Thanks.
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