How much Tax is too much?

[jazzboypro]

    Very interesting discussion. From the comments in this thread, it looks like we are all facing the same problems from our respective governments. I can’t help to wonder what will happen to the taxation schemes and all once AI puts millions of people out of work across the globe.

[Nevrknow]

9 hours ago, jazzboypro said:

    Very interesting discussion. From the comments in this thread, it looks like we are all facing the same problems from our respective governments. I can’t help to wonder what will happen to the taxation schemes and all once AI puts millions of people out of work across the globe.

It is very simple. Eliminate the non-payers and keep taxing those that can provide until they slowly become obsolete. Keep climbing the income ladder and eliminate those at the bottom. Machine logic will not allow human/humanist ideas to come into play. People may lie but the numbers never do. Nothing personal ( just get into the train car ) it is for the common good.

I'd like to think I'm wrong, but so far (in the US) I seem to batting 1000.

[LordAnubis]

The problem I have with tax is fairness. I’d pay 80% tax. If everyone paid equally. I think income tax should be abolished. GST set at 20% for non necessity goods, non gst on necessity goods, and luxury tax on any good higher than 10k at 30%. You always hear, “ohh but the rich will leave”. Well they’re not paying their fair share anyway so who cares?

My scenario is this. I have a daughter I want to put money aside for. You’d think the government would incentivise parents putting money aside for kids. Nope. Every dollar she gets is taxed at 66%. That’s right. 66%. So much for making good financial decisions for my family. 

[Chitmo]

8 hours ago, LordAnubis said:

The problem I have with tax is fairness. I’d pay 80% tax. If everyone paid equally. I think income tax should be abolished. GST set at 20% for non necessity goods, non gst on necessity goods, and luxury tax on any good higher than 10k at 30%. You always hear, “ohh but the rich will leave”. Well they’re not paying their fair share anyway so who cares?

My scenario is this. I have a daughter I want to put money aside for. You’d think the government would incentivise parents putting money aside for kids. Nope. Every dollar she gets is taxed at 66%. That’s right. 66%. So much for making good financial decisions for my family. 

66% is the inclusion rate on capital gains over $250k. Inheritance is not the same thing, if you don’t have a will already I strongly suggest you get one and talk to a lawyer about things like this you’re concerned about. You’re operating on bad information. 

[free85]

Any amount is too much, especially when it's combined taxation (income tax, then sales tax on good purchased, inheritance taxes, etc). 

[Fuzz]

8 hours ago, LordAnubis said:

I think income tax should be abolished. GST set at 20% for non necessity goods, non gst on necessity goods, and luxury tax on any good higher than 10k at 30%. 

Oooohhh...so what's a necessity item? What's considered non-necessity? What happens if I use a necessity item as part of the ingredients of a non-necessity item? What's a luxury item? Who gets to choose?!?!

[MountMandolin]

On 6/25/2024 at 2:22 PM, Jack said:

I'm sure I'll be corrected, if my memory has faded or things have changed, but the State of Alaska not only has no personal income tax, the corporate rates top out at something like 10%, there is generally only property tax in highly populated areas (sales tax instead in less dense places.)...and they pay each permanent resident (no matter age) each year to live there. Yearly rates vary but US$1,000-3,000 per year recently.

Of course you have to move to Alsaka, but there's nothing wrong with that!

There is always that pesky Federal tax to deal with, but I had a cousin who lived in Alaska for many years and simply forgot to file - didn't hurt that the majority of his income was in cash.

[I know I’m now taking this sorta off-topic since this thing I quoted was on the first page, but hey, feel free to ignore me all you want! Just saw an opportunity to run my mouth about Alaska and got excited!]

This is all basically right, per my memory of the massive reams of research I did while contemplating (and almost going ahead with) a move to Alaska. As for the tax stuff, the government doesn’t provide much in the way of services either, so yeah, the taxes had better be low unless services increase! But the people who live there aren’t generally “I want lots of government services” types anyway, so it works out. Thing is, Alaska is a very weird state: almost 3x the size of Texas but extremely isolated (just look at it on the map and imagine trying to travel anywhere in the “lower 48”, as they call the continental US, by land or even by air; it’s both expensive and time-consuming, to say the least), so you’d better really like it there, especially if you live anywhere outside of the two airport cities of Anchorage or (to a lesser degree) Fairbanks; very difficult to make a living unless you’re in medicine or oil & gas (and at this point medicine is the safer bet), and the permanent fund revenue you’re talking about doesn’t go that far in Alaska, which leads to my next item; very high cost of living (try heating a house to a comfortable temp when it’s -45°F outside for days and days on end!); everything is very far away from everything else, and there are only four real highways in the state, so quite a lot of places—fittingly including the state capital, Juneau—are “off the road system”, meaning you must fly there, or take a boat or snow machine if practicable. And all that just barely scratches the surface of the weirdness of the place.

If you live in Fairbanks—the second-largest city, located in the harsh and unforgiving “interior” of the state—you’ll get like 3 hours of light in the winter and damn near constant sunlight for part of the summer, so get some really nice blackout curtains! And quite a lot of people in the interior do not have indoor plumbing; they use outhouses (some of which are quite nice, to be fair, but still, it’s an outhouse!). Also, the interior is known for its long stretches of -40°F and below, due to certain geographical and meteorological stuff that I don’t understand very well (in FBX, part of it is a phenomenon called an “inversion”, as it’s in a valley that traps the cold air). Oh, and you’re halfway between Anchorage and Point Barrow, the northernmost place in the US, which is WAY above the Arctic circle—FBX itself is pretty close to the Arctic circle, in fact.

I could go on for ages—I absolutely love Alaska and sometimes still fantasize about living there, which would be quite the change from my home here in New York City! I just can’t quite get myself to believe I could do it, though, and now that I have a wife it’s even less likely (though she, astonishingly, is not totally closed off to the idea; she’s a good ‘un!). But I will stop here. Suffice it to say, Alaska is an absolutely breath-taking place, and anyone who gets the chance to visit should do so! And take as much time as you can: the place is HUGE and you’ll wanna see as much of it as possible. And if you’re anything like me, you won’t wanna leave!

[Greenhorn2]

Before I threw the towel in, I  was getting my paycheck minus 41.5%. That was taxes and health insurance coming out, no 401K or anything. A car wreck broke both my legs and put me out of work (lost my insurance  because you can't  pay the premiums plus 10 grand deductible). I went to the local government office and tried to get help with my mortgage, light bill, phone bill, hospital bills groceries, etc. I was informed that I  didn't qualify, but they couldn't tell me why I didn't qualify. I worked in a local farmers greenhouses for 6 months on crutches just to make it. I went back to work for 5 years, working 70-80 hours a week, saved every dime, paid everything off and came on to the house. The only thing the government (whose main priority is throwing money at every other country in the world) is getting out of me is the taxes on what little I spend and property taxes. I'm done paying for a system that takes care of everyone but me. Yall have at it and I  wish you luck. I'll sit at home and smoke cigars.

[NSXCIGAR]

15 hours ago, 99call said:

Ultimately, I think any situation that has bread both a billionaire class, and record levels of child poverty, is doing something pretty messed up.

The west has the lowest levels of child poverty the world has ever seen. 

The west also has a nasty habit of moving the goalposts on what constitutes poverty (in the US it's $15,000/yr which is more than most countries' per capita income) and fail to take into account that it's not the same individuals that are at the bottom and that people are moving from the bottom to the middle and top all the time.

Anyway, at the end of the day you could take all of the billionaires' combined money and it would be a drop in the bucket for what's needed to run a major country for just one year. The vast majority of the wealth in any western country is found in the middle class. 

[Greenhorn2]

14 minutes ago, NSXCIGAR said:

The west has the lowest levels of child poverty the world has ever seen. 

The west also has a nasty habit of moving the goalposts on what constitutes poverty (in the US it's $15,000/yr which is more than most countries' per capita income) and fail to take into account that it's not the same individuals that are at the bottom and that people are moving from the bottom to the middle and top all the time.

Anyway, at the end of the day you could take all of the billionaires' combined money and it would be a drop in the bucket for what's needed to run a major country for just one year. The vast majority of the wealth in any western country is found in the middle class. 

I agree with this. Why would the government mess with a few billionaires when there's millions of middle class to pilfer. 

[Andy04]

21 hours ago, GerardMichaelTX said:

The American Revolution was started more or less over a .25% stamp tax. So I guess any percentage at a quarter-of-one-percent or above that should be considered too high.

As far as national taxes go, I believe in either a flat fee or no income tax at all and as minimal taxes on goods and property as possible. I do not believe that the public benefits from monolithic administration buildings and bloated government burecracy.

So you have never driven on a public road? You don't support government education?

[PuroDiario]

My two cents, quoting Von Misses, his thoughts on taxes are gold. 

1. “Some experts have declared that it is necessary to tax the people until it hurts. I disagree with these sadists.” And,

2. “Progressive taxation of income and profits means that precisely those parts of the income which people would have saved and invested are taxed away“ 

I personally think taxes are net good (qualifying this statement because this is theory, and in practice sometimes gets diluted), even at a certain level of progressive taxation in context of a moral and ethical obligation and a level of social contract for which you are paying for the right to use the infrastructure, services and collective goods in society that contributed to your success. From there I stand yet to be convinced how tax on income, wealth, consumption, capital gains, property and death and all else in between is fair at all. And further, more difficult to be convinced of its fairness in the context of how the management of these taxes collected is often being done, if debt to gdp continues to climb, currency continues to be printed (which by the way is a major form of tax), and government continues to expand in number of heads and in $/head (during and after service) while many of these services erode or are rendered obsolete or are basically non fundable without additional debt / fiscal deficit / printing and while more hurdles are put in front of working families and entrepreneurs both successful, and not so successful.

[chutiste]

On 6/25/2024 at 5:25 AM, NSXCIGAR said:

I don't know but the American colonists fought a revolution over a 3% tea tax. 

A decrease in taxes, no less!

The reduction in tea tariff messed with the business model of the local smugglers. At the time of the Tea Act, wikipedia says 86% of tea in the US was contraband. Which might not have been so irksome except that the grey market vendors were mostly Dutch rather than English.

[Chitmo]

8 hours ago, Greenhorn2 said:

Before I threw the towel in, I  was getting my paycheck minus 41.5%. That was taxes and health insurance coming out, no 401K or anything. A car wreck broke both my legs and put me out of work (lost my insurance  because you can't  pay the premiums plus 10 grand deductible). I went to the local government office and tried to get help with my mortgage, light bill, phone bill, hospital bills groceries, etc. I was informed that I  didn't qualify, but they couldn't tell me why I didn't qualify. I worked in a local farmers greenhouses for 6 months on crutches just to make it. I went back to work for 5 years, working 70-80 hours a week, saved every dime, paid everything off and came on to the house. The only thing the government (whose main priority is throwing money at every other country in the world) is getting out of me is the taxes on what little I spend and property taxes. I'm done paying for a system that takes care of everyone but me. Yall have at it and I  wish you luck. I'll sit at home and smoke cigars.

That all sounds terrible. But foreign aide isn’t what you think it is. Whatever country you provide “aide” to has to pay that back via various means. Be it trade or whatever. I believe the UK just finished paying off its debt to the US for WW2  in 2006 or something. Help ain’t free, they just make it sound like that for the hippies. 

[BrightonCorgi]

10 hours ago, Greenhorn2 said:

I agree with this. Why would the government mess with a few billionaires when there's millions of middle class to pilfer. 

The government does go for the middle class as their main source of income. Messing with billionaires are smoke & mirrors, political theater. 

Sounds great to "take from the rich", but the rich are their source of election finance and anything underhanded that politicians do. 

In the US at least, a fair amount of Congressperson's time is spent calling donors for contributions. The more you can bring in for your party, the more the party gives you for your re-election campaign.

[Li Bai]

1 hour ago, BrightonCorgi said:

Sounds great to "take from the rich", but the rich are their source of election finance and anything underhanded that politicians do.

Yeah, same here. Same everywhere I guess.

[Chitmo]

3 hours ago, BrightonCorgi said:

The government does go for the middle class as their main source of income. Messing with billionaires are smoke & mirrors, political theater. 

Sounds great to "take from the rich", but the rich are their source of election finance and anything underhanded that politicians do. 

In the US at least, a fair amount of Congressperson's time is spent calling donors for contributions. The more you can bring in for your party, the more the party gives you for your re-election campaign.

What people always miss is rich isn’t really rich. Millionaires don’t keep millions in the banks. It’s invested in the market, which means it’s mostly working capital for various companies. Tax too much and you risk removing vast amounts of capital from the system and it stops working. You pull fruit off the tree to eat, so you can have more again later. You don’t cut the tree down to solve short term problems. 

[99call]

11 hours ago, NSXCIGAR said:

The west has the lowest levels of child poverty the world has ever seen. 

Approximately 30% of UK's children are growing up in poverty and that figure is growing.  These maybe better stats than a country like India, but that's hardly anything to be proud about.   In work poverty in also on the rise in the UK. A combination of crappy zero hours contract jobs, stagnant wages, cuts to benefits and the cost of living crisis. 

https://lordslibrary.parliament.uk/child-poverty-statistics-causes-and-the-uks-policy-response/#:~:text=It added that this meant,from 36% in 2011%2F12

Even Goldman Sachs have written articles detailing the UK's shitty social mobility

"The UK performs poorly on international comparisons for both social mobility and inequality. The poorest and the richest are the most socially immobile. This exacerbates inequality as disadvantaged individuals are less likely to climb the income ladder, and the economically advantaged tend to stay at the top."

When it comes to stick and carrot.  Carrot always seem to be the answer for the already wealthy to many on here, and stick always seems to be the answer for the poor.     It makes no sense whatsoever.  Let's take someone who is struggling and make their lives even harder by giving them the stick.  Lets take someone who has demonstrated they need no help whatsoever, and lavish them with leg-ups.          I'm in favour of encouraging both groups wealthy and poor, as long as it has a focus on improving social mobility across the board.            

One group should not look to take advantage of the other.   A classic example of this was the Queen of England having shares in a company called 'Brighthouse'.  A company which sold washing machines and TV's to poor people on hugely inflated monthly payments.  A sales trend called "The poverty premium"...... Utterly reprehensible.            

 

 

[joeypots]

Define rich. Around here one must be rich to be middle class. Say it’s a husband, wife, coupla kids, two cars and a steady income that pays the bills and provides a little leisure. Crazy how much money that takes and how much infrastructure is needed to make it sustainable.

Until someone has a better definition of rich I say it’s anyone who has more than I do.

 

[GerardMichaelTX]

13 hours ago, Andy04 said:

 You don't support government education?

I am absolutely 100% against federally instituted public education and government subsidized education. Leave it up to private businesses to provide technical expertise that actually adds economic value to their organization via certificates and craft organizations.

[99call]

On 6/25/2024 at 5:04 PM, Chitmo said:

Poor people tend to stay poor due to bad decisions, at least that’s the case with the ones in my family

LIke Rob said, there are shades of grey.    No doubt there will be poor people in society who are genuinely lazy, and deserve their lot in life. 

However, I think it's important to recognise the effects of poverty are generational, and someone suffering their own bad decisions shouldn't amount to their infant baby having to suffer those ramifications also, although thats sadly how it works.   Generational wealth works that way to obviously, that from day one a baby from a wealthy family, has high odds of one day being wealthy themselves.     We need to insure that there is some from of social mobility where those two babies fates aren't sealed from day one. 

I agree with you that bad decisions are a driver of poverty.  but what are a driver of poor decisions?  pressure? a lack of options? a lack of education? and lack of a family safety net? no line of credit with a bank? no car? no decent accommodation?.     I would suggest the majority of poor people do not choose to be poor, but for one reason or a combination of reasons thats where they have found themselves.     I would suggest from vaguely tough moments at the start of my working life, and others I know that are in genuine poverty.  Poverty is like being on tilt, one form of pressure creates another, and hems people in to a helter-skelter of poor decisions.  They may know all the options they are choosing are terrible, but those are the only options they feel they have. 

It's been very interesting in recent charity studies (done through Oxford University), suggest that instead of traditional forms of aid, like food, or voucher systems,  small cash grants can actually give people the breathing space they need, and actually exit poverty permanently, as opposed to systems that may keep people close to the bread line, and cost much more money in the long run.     I say these just to demonstrate,  I think sometimes people just need that pressure point relieving to clear their head, and try and form a corrective plan. 

Again, I'm sure it's not the case for all.  but i'm much more in favour of trying to help people out of poverty, and have them as tax contributing members of the work force,  than see them as helpless right-offs, or somehow genetically/intellectually destined to failure. 

 

[ubiquito]

Those of us who have the privilege of being in the "game" can remain quiet and, with reasonable expectation, learn how to play and become successful. The rub is that there are many who are denied a realistic opportunity to even enter the game, nevermind learn how to play. 

[Chibearsv]

My issue with this entire subject is the ridiculous inefficiencies and corruption involved in government management of tax allocation.  If government was rated similar to charities, based on percentage of revenue dollars that reach entitlement targets, what would that number be?  For charities, I pass if less than 80% of my donation reaches the target.  I'd guess government entitlement money is closer to 25% or maybe much less... if I wasn't forced to, I certainly wouldn't donate.  That's the worst part.  I agree there are people in need that should be helped, but there are too many snoots in the trough, even before the hungry get to eat.

 

[teamrandr]

2 minutes ago, Chibearsv said:

My issue with this entire subject is the ridiculous inefficiencies and corruption involved in government management of tax allocation.  If government was rated similar to charities, based on percentage of revenue dollars that reach entitlement targets, what would that number be?  For charities, I pass if less than 80% of my donation reaches the target.  I'd guess government entitlement money is closer to 25% or maybe much less... if I wasn't forced to, I certainly wouldn't donate.  That's the worst part.  I agree there are people in need that should be helped, but there are too money snoots in the trough, even before the hungry get to eat.

 

We all agree they need our tax money.   We are unable to come to an agreement on what it should be spent on.

[Chibearsv]

55 minutes ago, teamrandr said:

We all agree they need our tax money.   We are unable to come to an agreement on what it should be spent on.

Or the care that should be taken before spending it.  Those of us in business realize how precious our capital is and we take great care on creating efficiencies to utilize it effectively.  Otherwise, we're just pissing it away.