Flat Tax & VAT, Jack (Hudson)

[Sharky]

Re: Flat Tax & VAT, Jack (Hudson)

From roughly $2.0T tax revenue in 2000 to $2.1T tax revenue in 2009. If we take inflation/dollar devaluation into account, it looks like the Bush tax cuts didn't increase revenue one bit. In fact, overall tax revenues have actually fallen on a purchasing power basis.

Lovely how numbers can be used to distort. 2000 was basically the peak of the Internet boom, so revenues were inflated that year as a result, and 2009 was several years into the recession.

If you look at the period from 2003, when the major Bush tax package was actually passed, a steady revenue decline was reversed, and revenues continued to climb until 2007, which was the beginning of the recession.

[Milton Kuo]

Re: Flat Tax & VAT, Jack (Hudson)

Lovely how numbers can be used to distort. 2000 was basically the peak of the Internet boom, so revenues were inflated that year as a result, and 2009 was several years into the recession.

If you look at the period from 2003, when the major Bush tax package was actually passed, a steady revenue decline was reversed, and revenues continued to climb until 2007, which was the beginning of the recession.

If you check out the web site from where I extracted that data, you'll see that every decade since 1970 (I did not bother checking previous decades) resulted in meaningful increases in tax revenue. That is to say, after one decade, you will not see a mere 10% increase in tax revenue.

My posting is to provide some sort of data to my earlier posting where I asked if the tax revenue increases due to the Bush tax cuts were sustainable. Even if we use 2003 as a starting point, the nadir of tax revenue in the past decade, you'll see that up to 2009, the U.S. government has only seen a compounded 2.8% nominal gain in tax revenues. This does not even cover inflation! Also, you seem to be discounting the effects of the housing bubble on tax revenue. Bush's tax revenue gains were substantially, if not entirely, the result of the housing bubble. [Likewise, Clinton's balanced budget was the result of the tech stock bubble and has clearly proven to be unsustainable.]

Take a look at the data for tax revenue during the recessions that occurred in the 1970s and 1980s. They are nothing so dreadful as the data from this past decade.

[Milton Kuo]

Re: Flat Tax & VAT, Jack (Hudson)

Here are the tax revenue data from 1970 - 2009 inclusive. Note in particular how the recessions of the 1970s and 1980s did not result in a pathetic 10% increase in revenue gains over the course of a decade. In fact, tax revenue doubled from 1970 to 1980, it doubled again from 1980 to 1990, and doubled yet again from 1990 to 2000.

2000 to 2009? Looks pretty crappy to me.

Government Spending Chart
Fiscal Years 1970 to 2009

Year	GDP-US $ billion	Total Revenue -fed $ billion
1970	1038.3	192.81	a
1971	1126.8	187.14	a
1972	1237.9	207.31	a
1973	1382.3	230.80	a
1974	1499.5	263.22	a
1975	1637.7	279.09	a
1976	1824.6	298.06	a
1977	2030.1	355.56	a
1978	2293.8	399.56	a
1979	2562.2	463.30	a
1980	2788.1	517.11	a
1981	3126.8	599.27	a
1982	3253.2	617.77	a
1983	3534.6	600.56	a
1984	3930.9	666.49	a
1985	4217.5	734.09	a
1986	4460.1	769.22	a
1987	4736.4	854.35	a
1988	5100.4	909.30	a
1989	5482.1	991.19	a
1990	5800.5	1032.09	a
1991	5992.1	1055.09	a
1992	6342.3	1091.33	a
1993	6667.4	1154.47	a
1994	7085.2	1258.72	a
1995	7414.7	1351.93	a
1996	7838.5	1453.18	a
1997	8332.4	1579.42	a
1998	8793.5	1721.96	a
1999	9353.5	1827.64	a
2000	9951.5	2025.46	a
2001	10286.2	1991.43	a
2002	10642.3	1853.40	a
2003	11142.1	1782.53	a
2004	11867.8	1880.28	a
2005	12638.4	2153.86	a
2006	13398.9	2407.25	a
2007	14077.6	2568.00	a
2008	14441.4	2524.00	a
2009	14258.2	2105.00	a
Legend: a - actual reported i - interpolated between actual reported values g - 'guesstimated' projection by usgovernmentspending.com

[Chris Coles]

Re: Flat Tax & VAT, Jack (Hudson)

Just wanted to say I'm really enjoying this discussion. It's about time we had a really good VERBAL punch up here. The times demand it.

Now, that's better. Just a little smidgin of decorum everyone

[mesyn191]

Re: Flat Tax & VAT, Jack (Hudson)

Correct. Taxation is theft because you are being denied the use of your property without your consent; it is therefore also immoral.

Taxes are part in parcel of any government since they need to get money in order to pay for things, even with your pre-1913 US example there were taxes back then too in the US. If you truly think taxes are immoral and theft then by default you have to be an anarchist.

[Chris Coles]

Re: Flat Tax & VAT, Jack (Hudson)

Hudson is predicting a return to Feudalism as labour/land renters (ie workers and home "owners") are paying all the taxes. A serial entrepreneur like EJ deciding that becoming a rentier is the best way of staying rich is solid evidence that Hudson is right. Buying land and houses does not create wealth only maintain and concentrate it.

The truth is we have been in a feudal economic environment all along. We NEARLY got free of it at the end of WW2, but then the slide back into a feudal economy set off with a vengeance. What to me is most interesting is that Germany and Japan, both had imposed upon them a new form of economy; devised by US Army Generals that have each turned out to be closer to free enterprise than any experienced in the US. In particular, Germany is the poster child for the rest of us as their economy is correctly centred upon an idea that industry is the primary focus for the economy.

If the average worker can't afford stuff because his outgoings on non-discretionaries (income-tax, sales tax, housing, food, health cover, transport, heating) use up all his income then capitalism breaks down because there is no market for your goods, hence no point in being an entrepreneur.

Absolutely bang on the button. No surplus prosperity, no market for the goods to be manufactured. And remember, it takes at least, at least, several years between establishing the new business and profit. Sometimes more than a decade. So the first stage has to be investment into the businesses. What we are trying to do at the moment is to place the money at the feet of the bankers who provide the credit for the purchase of the product. A total waste of time.

[ThePythonicCow]

Re: Flat Tax & VAT, Jack (Hudson)

Capitalists botched things compared to what? 100M+ murdered by the socialists / communists?

I agree that the "other" side has made a botch butchery of things at times.

So has the Anglo-American Capitalist Empire.

[mesyn191]

Re: Flat Tax & VAT, Jack (Hudson)

Capitalists botched things compared to what?

Just because our elites/gov. haven't screwed things up as badly as the hardline communists/despots of the 50's and 60's doesn't mean that they're good.

If you look at the period from 2003, when the major Bush tax package was actually passed, a steady revenue decline was reversed, and revenues continued to climb until 2007, which was the beginning of the recession.

So you don't think the early 00's are valid but you'll accept the later 00's as valid even though they cover the peak of the housing/credit bubble which was even bigger than the .com bubble?

Even with your own logic this is inconsistent. But Milton Kuo brings up an even bigger point: even if we play devil's advocate and accept your point the growth in tax income that we saw during those years doesn't even cover the rate of inflation.

[bpr]

Re: Flat Tax & VAT, Jack (Hudson)

Capitalists botched things compared to what? 100M+ murdered by the socialists / communists? More than a thousand years of stagnation under feudalism and theism?

The "Anglo-American Empire" is not a natural progression of capitalism; it's what happened when Americans abandoned capitalism in pursuit of progressivism, subjectivism and unprincipled pragmatism.

And I suppose all of the conveniences of modern life are also botched, along with the untold wealth that capitalism created, even in its corrupted mixed-economy form?

Collectivist economies have produced almost nothing in comparison; they are little more than leaches off of the productive economies of the world. For example, many would have starved had it not been for aid from the "evil" capitalists in the West.



Correct. Taxation is theft because you are being denied the use of your property without your consent; it is therefore also immoral.



Nonsense. Government can be funded in many ways other than by direct taxation. The US itself, before the creation of the income tax in 1913, is an example. Funding options include everything from user fees to uniform excise (indirect / avoidable) taxes.

The thugs that I worry about most today are not the ones roaming the streets; it's the ones in government, together with their corporatist friends, who are forever dreaming up new ways to pick my pockets and rob me of my liberties.

People like this are not worthy of reasoned debate.

[Chris Coles]

Re: Flat Tax & VAT, Jack (Hudson)

People like this are not worthy of reasoned debate.

I am not so sure about that. I surely does no harm to see the full extent of other peoples feelings write large?

[bpr]

Re: Flat Tax & VAT, Jack (Hudson)

I am not so sure about that. I surely does no harm to see the full extent of other peoples feelings write large?

I respectfully disagree. What you so quaintly refer to as "the full extent of other peoples feelings" are already laid out here. The underlying arguments are clear to see, and they are the result of brainwashing.

The largest, wealthiest demographic in the history of the world is getting old and ornery. After a lifetime of being catered to they're uncomfortable with giving up their power. They've never been dealt with reasonably in civic life: only by coersion and provocation and appeasement. They've never been dealt with as adults or citizens, only as consumers.

There is no reason to assume that they can be dealt with as adults or citizens in later life.

It is no coincidence that the first tax cuts (under Kennedy) were enacted as the oldest of them became of voting age.

[bpr]

Re: Flat Tax & VAT, Jack (Hudson)

When people are talking about other human beings as parasites it's time to call an end to the discussion. Take your chips and go home, folks. Nothing's going to get done here.

[Chris Coles]

Re: Flat Tax & VAT, Jack (Hudson)

I respectfully disagree. What you so quaintly refer to as "the full extent of other peoples feelings" are already laid out here. The underlying arguments are clear to see, and they are the result of brainwashing.

The largest, wealthiest demographic in the history of the world is getting old and ornery. After a lifetime of being catered to they're uncomfortable with giving up their power. They've never been dealt with reasonably in civic life: only by coersion and provocation and appeasement. They've never been dealt with as adults or citizens, only as consumers.

There is no reason to assume that they can be dealt with as adults or citizens in later life.

It is no coincidence that the first tax cuts (under Kennedy) were enacted as the oldest of them became of voting age.

You are quite wrong. But, in so expressing your own feelings, you give the chance to point to the nub of the debate.

As I see it, we are watching what one often sees described as a herd effect. How sheep will all follow the others in a crowd. Someone has, at some point in the past, discovered a way of making money that was easier than before and the majority have followed; just like sheep in a field. What we have to do is first recognise the mistakes they have made and then educate them as to the better direction to follow. You cannot get another's attention without at first opening a dialogue with them. An example I can relate is when working at night with a machine operator that was, at first, as confrontational an individual as I have ever seen depicted.... let alone met in person. He would stand and use mouthful after mouthful of expletives; standing right beside you calling you all the names under the sun - very difficult to deal with. But after a couple of years where he could see that we were not going to cause him any harm, and then, when at last we got his attention, gave him responsibility and an opportunity to better himself, he changed beyond any recognition to become a very competent, and friendly, member of our Little team.

The only worthwhile route out of this debate is via debate; and we have to stand our ground and keep at it.

[labasta]

Re: Flat Tax & VAT, Jack (Hudson)

Here are some ideas:

Depends what you mean by taxes.

Cash cows are also taxes.

Cash cows are tolls, all types of energy, water charges, (these days, communications), medical insurance, interest on debt, rent etc.

If some of these cash cows (perhaps the infrastructure kind) were owned by the state, would there be a need for regular taxes at all?
This reminds me of the comprehensive annual financial report.

Maybe this is a way to afford a flat tax (including corporate, income, sales etc.) at say 15%.

In fact, if the state already gets more income from its investment in business than it does taxes (see cafr), why bother with taxes at all.

Any extra income from a very low tax base and its business income would be used to offset charging payroll taxes on non-rentier businesses themselves, starting from the startups, then to small, medium and finally large businesses. Following Eric's tips on giving a free ride to startups for the first 3 years etc. sounds like good advice too. Any extra income saved could be used to increase social welfare on the few remaining unemployed. Not everybody wants to work and why should they lose their dignity? (I expect to be flamed by Americans for saying this).

All bankrupt banks could be temporarily nationalized, shareholders wiped. All existing mortgage debt annulled giving full title of ownership to the old mortgage holders. Bondholders would then be given shares in the bank equal to their old bonds and the bank would open for business again using its existing deposits.

Freddie and Fanny would be closed down and all existing mortgages annulled.

The government would look at its regulations and make sure that capital isn't flowing excessively in one area because of the government's own regulations. Make sure the playing field is level with the exception of government owning its businesses (cash cows) and all non-rentier businesses are subsidized by being given a free to low cost regulatory ride. The government funds could even go towards venture capital.

In fact, rentier businesses could be non-profit, low cost, semi-state bodies. I'm not sure if this is workable and may be too far of a stretch of our imaginations.

Flame away.

[ViC78]

Re: Flat Tax & VAT, Jack (Hudson)

When people are talking about other human beings as parasites it's time to call an end to the discussion. Take your chips and go home, folks. Nothing's going to get done here.

Has anybody ever changed someone's opinion on an internet message board?