Should We Repeal the 16th and 17th Amendments to the United States Constitution

[michaelskis]

Mob mentality is when a bunch of people do something, or vote for something, only because it is what their friends are doing, or how they are voting. The larger the group, the more likely for it to occur. This also results in people doing something that they either know is wrong or would be uncomfortable doing by them selves. Examples include looting, dancing in public, or voting for someone because that is what all their friends are doing and they don't want to feel left out.

As for the 'fringe groups'. It is the only thing that has ever made any type of change in history. If you look at the population of the US at the time of creation, only 3% of the population actively took part in the events leading up to the war. Furthermore, according to the book Freedom Shift, history has shown that almost all major events were started by 1.5% to 2.5% if a population and an slightly less than equal population were active in opposing it.

Once the ball gets rolling, people get excited, that is where mob mentality gets in. People doing things because other people are doing things.

[mgk920]

What Gotta Speakup said.

Replacing the federal income tax would simply be a prelude to a national sales tax that would, essentially, raise the price of everything anywhere from 30 to 50%, except, of course, wages. That will work real well for the economy, right?

You forget that with the income tax repealed and replaced with a national sales tax, a VAT, or something similar, yes, you probably will be seeing higher 'list' prices for things (especially if the tax is included in the price and not assessed separately at the register), but you would be paying those prices with untaxed money. Also, without the corporate income tax being embedded in the price, and it is *always* passed on to someone else, either to consumers in the form of higher prices, employees as lower wages and/or investors, including pension funds and 401(k)s, as lower dividends, list prices could well also be a bit lower. Check your pay stubs to see just how much money is removed from your pay by government at all levels before you even have a chance to see it - it's an eye-opener!



Also, prior to WWII, there was no income tax withholding, you had to fill out the forms and then cut the check for the full bottom line amount of the tax at the end of the year (imagine repealing withholding!).



Mike

[Linda_D]

You forget that with the income tax repealed and replaced with a national sales tax, a VAT, or something similar, yes, you probably will be seeing higher 'list' prices for things (especially if the tax is included in the price and not assessed separately at the register), but you would be paying those prices with untaxed money. Also, without the corporate income tax being embedded in the price, and it is *always* passed on to someone else, either to consumers in the form of higher prices, employees as lower wages and/or investors, including pension funds and 401(k)s, as lower dividends, list prices could well also be a bit lower. Check your pay stubs to see just how much money is removed from your pay by government at all levels before you even have a chance to see it - it's an eye-opener!



Also, prior to WWII, there was no income tax withholding, you had to fill out the forms and then cut the check for the full bottom line amount of the tax at the end of the year (imagine repealing withholding!).



Mike

Whoopty-doo. You don't like paying taxes? Well, nobody does. Most people do like driving on paved roads, having police protection, being able to send their kids to public schools, feeling confident that the food they buy in stores or the meals they eat in restaurants is safe, however ... and those things cost money. As for corporations passing on lower tax costs to consumers in the form of lower prices ... ROTFLMAO.

Nothing is more regressive than taxes on the sales of goods and services. They hit the poorest people the hardest and the wealthiest the least because the poor spend all their money while the wealthy spend only a fraction of theirs. But that's the real "charm" of sales taxes versus income taxes, isn't it? Sales taxes sock it to the poor who are always "undeserving" simply because they aren't rich.

As for your wondrous "untaxed" income, it's NOT going to go all that far in covering increased prices. After deductions and exemptions (I'm single, no dependents, modest home mortgage interest), I paid about 13% of my gross income in federal income tax in 2011. Why would I be stupid enough to want to pay 25-30% more for everything I bought/used just so that I didn't have to fill out a few tax forms?

Just so you can see exact how a 25% federal sales tax on goods and services would raise prices ...

$100,000 house ... $125,000
$25,000 car ... $31,250
$ 5,000 cruise ... $6250
$75 concert/football ticket ... $93.75
$50 restaurant bill ... $62.50
$20 groceries ... $25

Keep in mind, too, that the more items/services that are exempted, the higher the tax rate would have to be to raise the same amount of revenue.

[Hink]

Whoopty-doo. You don't like paying taxes? Well, nobody does. Most people do like driving on paved roads, having police protection, being able to send their kids to public schools, feeling confident that the food they buy in stores or the meals they eat in restaurants is safe, however ... and those things cost money. As for corporations passing on lower tax costs to consumers in the form of lower prices ... ROTFLMAO.

Nothing is more regressive than taxes on the sales of goods and services. They hit the poorest people the hardest and the wealthiest the least because the poor spend all their money while the wealthy spend only a fraction of theirs. But that's the real "charm" of sales taxes versus income taxes, isn't it? Sales taxes sock it to the poor who are always "undeserving" simply because they aren't rich.

As for your wondrous "untaxed" income, it's NOT going to go all that far in covering increased prices. After deductions and exemptions (I'm single, no dependents, modest home mortgage interest), I paid about 13% of my gross income in federal income tax in 2011. Why would I be stupid enough to want to pay 25-30% more for everything I bought/used just so that I didn't have to fill out a few tax forms?

Just so you can see exact how a 25% federal sales tax on goods and services would raise prices ...

$100,000 house ... $125,000
$25,000 car ... $31,250
$ 5,000 cruise ... $6250
$75 concert/football ticket ... $93.75
$50 restaurant bill ... $62.50
$20 groceries ... $25

Keep in mind, too, that the more items/services that are exempted, the higher the tax rate would have to be to raise the same amount of revenue.

So you think even if you pre-bated certain items/services to those who are needy, that it is still unreasonable? My confusion is how people don't think that those who buy more shouldn't be taxed more?

Sure a $100k house now costs $125k. But a $1m house now costs $1.25m. That is a huge difference. Sure it is all relative, but as long as you give services and pre-bates to those at some income threshold, that taxing structure is much more "fair". It will most likely bring in as much or more of the income we generate right now. My guess is that it will actually raise the overall amount of revenue for the government. It will also increase your self awareness and responsibility. If you don't buy a car, you don't have to pay the tax. If you want to save your entire life and only live on the essentials, then you will retire with all the money you earned in life.

I think the real issue for me is how you accomplish pre-bates and determining essential services without rampant abuse of the system. If it is anything like welfare, it probably wouldn't work. As someone who doesn't spend money on lots of random things, I like the idea of being able to keep my money until I want to spend it. I find it completely reasonable to be taxed when I buy something that I want. Now if you need it, that is a different story.

[giff57]

Whoopty-doo. You don't like paying taxes? Well, nobody does. Most people do like driving on paved roads, having police protection, being able to send their kids to public schools, feeling confident that the food they buy in stores or the meals they eat in restaurants is safe, however ... and those things cost money. As for corporations passing on lower tax costs to consumers in the form of lower prices ... ROTFLMAO.

That is awesome...

[Whose Yur Planner]

So you think even if you pre-bated certain items/services to those who are needy, that it is still unreasonable? My confusion is how people don't think that those who buy more shouldn't be taxed more?

Sure a $100k house now costs $125k. But a $1m house now costs $1.25m. That is a huge difference. Sure it is all relative, but as long as you give services and pre-bates to those at some income threshold, that taxing structure is much more "fair". It will most likely bring in as much or more of the income we generate right now. My guess is that it will actually raise the overall amount of revenue for the government. It will also increase your self awareness and responsibility. If you don't buy a car, you don't have to pay the tax. If you want to save your entire life and only live on the essentials, then you will retire with all the money you earned in life.

I think the real issue for me is how you accomplish pre-bates and determining essential services without rampant abuse of the system. If it is anything like welfare, it probably wouldn't work. As someone who doesn't spend money on lots of random things, I like the idea of being able to keep my money until I want to spend it. I find it completely reasonable to be taxed when I buy something that I want. Now if you need it, that is a different story.

Digging up some of my old public admin theory......the problem with sale taxes is the issue of tax fairness. Unless you exempt necessities, it cost the poor more as a percentage of their income and they can afford it less. They also have fewer options when coming to purchases. Essentially the middle and upper classes can afford it more and have more options. Further, they have the option of not making that purchase.

I also can't believe that someone made the statement the corporations would lower their prices as the taxes lowered with a straight face and without irony.

[Maister]

Digging up some of my old public admin theory......the problem with sale taxes is the issue of tax fairness. Unless you exempt necessities, it cost the poor more as a percentage of their income and they can afford it less. They also have fewer options when coming to purchases. Essentially the middle and upper classes can afford it more and have more options. Further, they have the option of not making that purchase.

That was my understanding as well. Sales taxes are considered regressive because everyone needs basic goods and services (food, water, shelter etc). Someone making $20k/ year for instance will end up having to spend virtually all their income on basic goods (and thereby taxing every dollar they make). Whereas someone who makes $200k/yr requires a much lower percentage of their income to obtain basic goods and can allocate the rest of their income towards building their portfolios and children's college funds.

[Hink]

Digging up some of my old public admin theory......the problem with sale taxes is the issue of tax fairness. Unless you exempt necessities, it cost the poor more as a percentage of their income and they can afford it less. They also have fewer options when coming to purchases. Essentially the middle and upper classes can afford it more and have more options. Further, they have the option of not making that purchase.

I agree that to keep it from being regressive you would have to have some system of pre-bates. I think that it would allow for a pretty reasonable system to be put in place. My concern is creating that system without rampant abuse. I would imagine you would just have to re-engineer the IRS....

I think that the middle and upper classes already can afford more options. To me it isn't an issue of fairness. But rather another way to get at real income and taxing those who spend. The poor should be given free access or reduced cost access to necessities and services. This would need to be tied to poverty level. I think though that this system would push a bit harder at spending patterns that currently are subsidized by the government and the lower and higher ends.

Mr. Romney can buy a jet with his income from dividends. He pays less on that income than I would and buys the same jet for the same cost. That isn't "fair" to the middle class. He is getting a tax break which he is using the money to purchase goods.

The same can be said for those who abuse the welfare system or other giving agencies. I don't believe that it is nearly as rampant as the R's will make it, but it is still a problem that someone on welfare can have a cell phone, LED tv, and other non-essential items that are generally subsidized by the government.

Both sides would be more evenly required to pay for "extras". You don't need a tv. You don't need a cell phone. They are very nice to have, but the government shouldn't be making it easier for any income bracket to buy non-essentials. We need to deal with our debt and continue to provide the services that are expected. That costs money. Everyone should be required to pay into that system at some level.

[Brocktoon]

Digging up some of my old public admin theory......the problem with sale taxes is the issue of tax fairness. Unless you exempt necessities, it cost the poor more as a percentage of their income and they can afford it less. They also have fewer options when coming to purchases. Essentially the middle and upper classes can afford it more and have more options. Further, they have the option of not making that purchase.

I also can't believe that someone made the statement the corporations would lower their prices as the taxes lowered with a straight face and without irony.

If we went to a national sales tax model you would probably see a large tax credit to those making under a certain amount either as a rebate or has Hink mentioned a pre-bate. One thing I am sure Mike would agree with is that is tax discourage consumption of a particular items. It also encourages black markets, fraud and people altering their consumption patterns from new to used items. In both instances less revenue is collected and in the case of the former you have to increase spending on law enforcement.

Mike is correct that taxes are ultimately paid by the consumer but prices are "sticky." For example Pepsi's taxes owed increased from 2010 to 2011 but the prices on their products did not increase. From 2009 to 2010 their tax liability decreased yet their prices did not go down. Since income tax is not a top 5 expense for most companies, for some it does not make the top 10 a large tax increase or decrease will no substantial alter their prices.

[Suburb Repairman]

If we went to a national sales tax model you would probably see a large tax credit to those making under a certain amount either as a rebate or has Hink mentioned a pre-bate. One thing I am sure Mike would agree with is that is tax discourage consumption of a particular items. It also encourages black markets, fraud and people altering their consumption patterns from new to used items. In both instances less revenue is collected and in the case of the former you have to increase spending on law enforcement.

This is why I would likely advocate a blend of tax methods--it diversifies & stabilizes the tax base and can help counter the negative aspects of each method. To do so would require a far simpler income tax program absent many of the credits & deductions.

Kind of like local governments that source revenue from enterprise funds (utilities), property tax (stable), income tax (not all states, but fairly stable) and consumption-based sales tax (much less stable, but often the biggest revenue generator for general revenue).

[mgk920]

IMHO, the most 'regressive' tax of all is called inflation. By 'printing' (virtually, today) money to cover government debts, it reduces the buying power of all existing money in circulation by the proportion that the supply was increased though that creation of new money. Any other method of reducing the buying power of one's personal fortune through government edict is called 'taxation', so why isn't money-printing?

(hint, hint, Mr. Bernanke...)



Mike

[ColoGI]

IMHO, the most 'regressive' tax of all is called inflation. By 'printing' (virtually, today) money to cover government debts, it reduces the buying power of all existing money in circulation by the proportion that the supply was increased though that creation of new money. Any other method of reducing the buying power of one's personal fortune through government edict is called 'taxation', so why isn't money-printing?

(hint, hint, Mr. Bernanke...)



Mike

Funny - Rmoney's advisors told the Fed the exact opposite - stimulus would work in recessions. And the last two stimuli did nothing to inflation. We know now that these fears are largely unfounded, and why Rmoney has flip-flopped on this too is instructive. That is: we know it is good policy because the Rs are against it now when they were for it in the recent past.

[Whose Yur Planner]

IMHO, the most 'regressive' tax of all is called inflation. By 'printing' (virtually, today) money to cover government debts, it reduces the buying power of all existing money in circulation by the proportion that the supply was increased though that creation of new money. Any other method of reducing the buying power of one's personal fortune through government edict is called 'taxation', so why isn't money-printing?

(hint, hint, Mr. Bernanke...)



Mike

So what programs would you cut and how much would you cut from these programs in order to get the government out of debt? Please don't give generalities. Further, how would you replace the services these programs provide?

[ColoGI]

Further, how would you replace the services these programs provide?

You know they wouldn't.

They want to turn the clock back two centuries and have social Darwinism take over, because they got theirs jack. And YOYO (you're on your own).

Nothing more than that.

[Whose Yur Planner]

You know they wouldn't.
.

Which is my point. When the automatic cuts kicked when the committee could not agree on what to cut, the cutters screamed like they had been scalded. The whole cut, cut, cut mantra is just an empty talking point devoid of details.

[Brocktoon]

So what programs would you cut and how much would you cut from these programs in order to get the government out of debt? Please don't give generalities. Further, how would you replace the services these programs provide?

With the deficit equal to approximately 23% of GDP you cannot cut that amount and leave defense and entitlements alone. With the economy improving the deficit will continue to shrink but not significantly.

I find it funny that those that constantly argue to cut government spending and those cuts will find inefficiencies do not believe that is true for the military. If you have spent anytime in or around the military you would realize how wasteful the military is when it comes to resources. You would be amazed how much training, flying, shooting etc is done in September.

However if the debt is your primary concern then you want inflation.

[michaelskis]

That was my understanding as well. Sales taxes are considered regressive because everyone needs basic goods and services (food, water, shelter etc). Someone making $20k/ year for instance will end up having to spend virtually all their income on basic goods (and thereby taxing every dollar they make). Whereas someone who makes $200k/yr requires a much lower percentage of their income to obtain basic goods and can allocate the rest of their income towards building their portfolios and children's college funds.

I am not sure how it is in other states, but I know when I go to Meijer to buy a loaf of bread, peanut butter, and other groceries, I pay no sales tax on those items. From what I understand, there are only two states that actually have full tax on groceries, and 31 of them have no tax at all. Some have a reduced rate and others have some sort of credit thing that I don't understand.

Right now, we are taxed on every dollar we make (now or later) and almost every dollar we spend.

[jresta]

I would repeal the 16th Amendment and replace with a combination income tax and value added tax. I don't like the fact that so much federal revenue is based upon what I earn. I'd rather it be based on what I consume, or contribute to the economy. If I choose to save all my money and live a quiet life, I shouldn't be penalized.

In a modern economy there's really no benefit to everyone saving every penny. The benefit to the economy is in investing it in productive capital (as opposed to speculative capital like "Wall St.") If you're depositing your money in a bank then that bank is probably investing your money - but those investments are probably split between productive (home loans, auto loans, etc) and speculative (stock purchases) investments.

I'm not opposed to a shift in taxes away from income but I definitely think that speculative investments should be taxed at a punitive rate and productive investments should be rewarded . . . and beyond a certain $ threshold savings should start to be taxed at a higher rate because banks can sit on money too. Encouraging the hoarding of capital can be pretty destructive to the creation of new wealth - witness the current regime where an obscene amount of wealth is concentrated at the top 0.1%.

I am not sure how it is in other states, but I know when I go to Meijer to buy a loaf of bread, peanut butter, and other groceries, I pay no sales tax on those items. From what I understand, there are only two states that actually have full tax on groceries, and 31 of them have no tax at all. Some have a reduced rate and others have some sort of credit thing that I don't understand.

Right now, we are taxed on every dollar we make (now or later) and almost every dollar we spend.

PA & NJ don't tax food or textiles. Former NJ Gov. Jim Florio was famously "flushed" by voters for taking toilet paper off of the textile list - and people in the state were driving around with rolls of toilet paper around their car antennae as a form of protest.

I can blame the various levels of government for mismanagement and waste - and I'd like to see it eliminated - so we can then spend that money on the things we need. With two income earners my household is comfortably middle-class (as comfortable as one can be in this economy) and I don't feel burdened by my taxes.

The federal gov't taxes my income. So does Pennsylvania (at a much lower but flat rate). I get a decent portion of both of those back. The Fed Gov't isn't really taxing all of my income. They're waiving a good chunk of it (mortgage interest, kids, etc). PA then taxes some of what I spend at 6%. Philadelphia then taxes some of what I spend at 2%. Philadelphia also taxes my property (at a laughably low rate) and my income at flat 3.9%. This wage tax is the most onerous - not because of how much it is but because of the way it's collected. I can write off most of my city wage tax against my state income tax.

Now, to live at the state/local level and pay ~$5000 per year in taxes and have roads, police, fire, subways, buses, libraries, parks, schools that are "free", etc. is a pretty good deal. Granted, most of those services are subpar but if I moved to the suburbs I'd be paying $1000-$2000 more per year. I'd be more than happy to pay an extra $1000 per year to stay where I am if it meant a serious improvement in services. I guess my point is - you get what you pay for - and right now I'm really not paying much.