Fair Tax

[Skjellyfetti]

Alexander Hamilton, Federalist 36

and with this further advantage, that as far as there may be any real difficulty in the exercise of the power of internal taxation, it will impose a disposition to greater care in the choice and arrangement of the means; and must naturally tend to make it a fixed point of policy in the national administration to go as far as may be practicable in making the luxury of the rich tributary to the public treasury, in order to diminish the necessity of those impositions which might create dissatisfaction in the poorer and most numerous classes of the society. Happy it is when the interest which the government has in the preservation of its own power, coincides with a proper distribution of the public burdens, and tends to guard the least wealthy part of the community from oppression!

Thomas Jefferson, Letter to James Madison October 28, 1785

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.

[kalm]

Alexander Hamilton, Federalist 36

and with this further advantage, that as far as there may be any real difficulty in the exercise of the power of internal taxation, it will impose a disposition to greater care in the choice and arrangement of the means; and must naturally tend to make it a fixed point of policy in the national administration to go as far as may be practicable in making the luxury of the rich tributary to the public treasury, in order to diminish the necessity of those impositions which might create dissatisfaction in the poorer and most numerous classes of the society. Happy it is when the interest which the government has in the preservation of its own power, coincides with a proper distribution of the public burdens, and tends to guard the least wealthy part of the community from oppression!

Thomas Jefferson, Letter to James Madison October 28, 1785

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.

Uh oh!

Nice find SK. This will bring an onslaught!

[OL FU]

Been meaning to get back to this one. In the post to which you were responding "the productive" are those who contribute something close to or above their share of the cost of running the country. You've seen what I mean by "their share of the cost of running the country."

The question about moral codes is a good one. I supposed it's just the assumed common understanding. That's a paradox because there seems to be a "common understanding" that progressive taxation is fair. But what I'm talking about is that the common understanding seems to change when it comes to taxation. I don't think, for example, that anybody would suggest that movie theaters check patrons incomes and establish a "progressive" rate schedule based on income where one person would pay $10,000 to see the show while another pays $.50 or even nothing. But for some reason when it comes to taxation people see something like that as "fair."

Just as a practical matter progressive taxation is corrosive because, as I said, it creates a situation in which people voting for politicians who will develop public policy and spending plans do not experience the "pain" of paying for what results. One would expect that kind of system to result in wild acceleration in government spending and that's what's happened.

Buying a movie ticket does not equal paying taxes.

But this overall post has been nothing but

I was going to say the same thing but a little nicer

yes the movie ticket analogy is simply not comparable.

One problem with our current system is, while I don't have a problem with low incomes paying no taxes, we are now in a situation where almost half don't the population doesn't pay fed inc. taxes. That of course may have more to do with the types of jobs the economy is producing but it is way to many people not to have a financial stake in the country.

The problem with the tax per person is that we go from 50% owing no taxes to 70 or 80% of the people not being able ever to pay their taxes. So what penalties should the government impose on that % of the people

[OL FU]

Alexander Hamilton, Federalist 36

and with this further advantage, that as far as there may be any real difficulty in the exercise of the power of internal taxation, it will impose a disposition to greater care in the choice and arrangement of the means; and must naturally tend to make it a fixed point of policy in the national administration to go as far as may be practicable in making the luxury of the rich tributary to the public treasury, in order to diminish the necessity of those impositions which might create dissatisfaction in the poorer and most numerous classes of the society. Happy it is when the interest which the government has in the preservation of its own power, coincides with a proper distribution of the public burdens, and tends to guard the least wealthy part of the community from oppression!

Thomas Jefferson, Letter to James Madison October 28, 1785

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.

It would be interesting to see, even on this board, how many people actually oppose a progressive income tax. I could be wrong, but I would bet it would be a significant minority.

[Ibanez]

Buying a movie ticket does not equal paying taxes.

But this overall post has been nothing but

I was going to say the same thing but a little nicer

yes the movie ticket analogy is simply not comparable.

One problem with our current system is, while I don't have a problem with low incomes paying no taxes, we are now in a situation where almost half don't the population doesn't pay fed inc. taxes. That of course may have more to do with the types of jobs the economy is producing but it is way to many people not to have a financial stake in the country.

The problem with the tax per person is that we go from 50% owing no taxes to 70 or 80% of the people not being able ever to pay their taxes. So what penalties should the government impose on that % of the people

How about we incarcerate people for failure to pay taxes. That seems like a good idea to recover money. Jail them so they can't work. Or, take what little money they do have, so they can't survive and increase the chances that they'll do something stupid (illegal).

[OL FU]

I was going to say the same thing but a little nicer

yes the movie ticket analogy is simply not comparable.

One problem with our current system is, while I don't have a problem with low incomes paying no taxes, we are now in a situation where almost half don't the population doesn't pay fed inc. taxes. That of course may have more to do with the types of jobs the economy is producing but it is way to many people not to have a financial stake in the country.

The problem with the tax per person is that we go from 50% owing no taxes to 70 or 80% of the people not being able ever to pay their taxes. So what penalties should the government impose on that % of the people

How about we incarcerate people for failure to pay taxes. That seems like a good idea to recover money. Jail them so they can't work. Or, take what little money they do have, so they can't survive and increase the chances that they'll do something stupid (illegal).

Sounds like a hell of a plan

[Ibanez]

How about we incarcerate people for failure to pay taxes. That seems like a good idea to recover money. Jail them so they can't work. Or, take what little money they do have, so they can't survive and increase the chances that they'll do something stupid (illegal).

Sounds like a hell of a plan

It's so crazy, it might just work!

[JoltinJoe]

Alexander Hamilton, Federalist 36


Thomas Jefferson, Letter to James Madison October 28, 1785

Uh oh!

Nice find SK. This will bring an onslaught!

Keep in mind that Jefferson was talking about tax on property, not federal income taxes. In fact, Jefferson opposed all direct federal taxation of individuals on the grounds it was unconstitutional and outlawed all such taxes when he became president. After some later enactments of congress imposed direct taxes, including income taxes, the US Supreme Court ruled in the 1890s these direct taxes were unconstitutional. It took an amendment to the Constitution in the early 20th century to legalize a federal income tax.

I doubt you will find any quotation from Jefferson in which he supports an income tax, even if levied by the state. Although it is a stretch to say Jefferson would have considered a state income tax impermissible, I think it is fair to say that Jefferson would have viewed state taxes on a man's labor, at varying rates, as morally questionable.

In fact, I think Jefferson would have considered it a tyranny for those with lower income to vote to impose a higher tax rate on those with greater income.

Finally, Jefferson would have no doubt despised the Internal Revenue Service.

[kalm]

Uh oh!

Nice find SK. This will bring an onslaught!

Keep in mind that Jefferson was talking about tax on property, not federal income taxes. In fact, Jefferson opposed all direct federal taxation of individuals on the grounds it was unconstitutional and outlawed all such taxes when he became president. After some later enactments of congress imposed direct taxes, including income taxes, the US Supreme Court ruled in the 1890s these direct taxes were unconstitutional. It took an amendment to the Constitution in the early 20th century to legalize a federal income tax.

I doubt you will find any quotation from Jefferson in which he supports an income tax, even if levied by the state. Although it is a stretch to say Jefferson would have considered a state income tax impermissible, I think it is fair to say that Jefferson would have viewed state taxes on a man's labor, at varying rates, as morally questionable.

In fact, I think Jefferson would have considered it a tyranny for those with lower income to vote to impose a higher tax rate on those with greater income.

Finally, Jefferson would have no doubt despised the Internal Revenue Service.

Ok, but he still apparently supported progressive taxation, right?

And what's the moral difference between taxing property and income?

[JoltinJoe]

Keep in mind that Jefferson was talking about tax on property, not federal income taxes. In fact, Jefferson opposed all direct federal taxation of individuals on the grounds it was unconstitutional and outlawed all such taxes when he became president. After some later enactments of congress imposed direct taxes, including income taxes, the US Supreme Court ruled in the 1890s these direct taxes were unconstitutional. It took an amendment to the Constitution in the early 20th century to legalize a federal income tax.

I doubt you will find any quotation from Jefferson in which he supports an income tax, even if levied by the state. Although it is a stretch to say Jefferson would have considered a state income tax impermissible, I think it is fair to say that Jefferson would have viewed state taxes on a man's labor, at varying rates, as morally questionable.

In fact, I think Jefferson would have considered it a tyranny for those with lower income to vote to impose a higher tax rate on those with greater income.

Finally, Jefferson would have no doubt despised the Internal Revenue Service.

Ok, but he still apparently supported progressive taxation, right?

And what's the moral difference between taxing property and income?

Define progressive taxation and I'll answer that question.

And I didn't say Jefferson had a problem with a a state-levied income tax. I said (I think) he would have had a moral objection to an income tax system which taxed higher incomes at higher rates. Jefferson would have been a flat tax rate guy.

[Skjellyfetti]

Define progressive taxation and I'll answer that question.

And I didn't say Jefferson had a problem with a a state-levied income tax. I said (I think) he would have had a moral objection to an income tax system which taxed higher incomes at higher rates. Jefferson would have been a flat tax rate guy.

Meh. He was for it before he was against it.

When he was 73 he flip flopped.




I guess even some of the greatest minds succumb to the "crotchety old man" political views later in life.

[JoltinJoe]

Again, he's talking about a PROPERTY tax in that quote. I thought we made that point earlier.

If you truly understood Jefferson's views and concerns, and understand the historical context in which he wrote, you would understand that it is a pretty safe bet that Jefferson never would have approved of an income tax which taxed income at different rates.

[kalm]

Again, he's talking about a PROPERTY tax in that quote. I thought we made that point earlier.

If you truly understood Jefferson's views and concerns, and understand the historical context in which he wrote, you would understand that it is a pretty safe bet that Jefferson never would have approved of an income tax which taxed income at different rates.

So he viewed progressive property taxation as morally ok, but not progressive income taxation? Why?

[Skjellyfetti]

Did I say he wasn't talking about property tax? Did I say he was talking about income tax?

I was simply talking about progressive taxation.

And, no one knows how Jefferson would feel about an income tax.

He never wrote about an income tax... because income taxes were rare and of not much use before industrialization really took off. Many, many people didn't earn an income and in large parts of the country the "middle class" consisted of yeoman farmers. Yeah, Jefferson (and many of the other founding fathers) didn't have much of an opinion on income tax because the modern "income" wasn't common enough to make it effective.

[JoltinJoe]

Again, he's talking about a PROPERTY tax in that quote. I thought we made that point earlier.

If you truly understood Jefferson's views and concerns, and understand the historical context in which he wrote, you would understand that it is a pretty safe bet that Jefferson never would have approved of an income tax which taxed income at different rates.

So he viewed progressive property taxation as morally ok, but not progressive income taxation? Why?

In Jefferson's time, he and many of the other founders believed that significant property ownership was a source and cause of inequality. Most significant property holders had been given their property by the Crown or its representatives in the colonies. Jefferson's view of significant property ownership as an inequity is evident in this quote, and he expresses a willingness to address this inequality by permitting a higher tax rate on more valuable land holdings.

Jefferson generally, though, favored consistent tax rates on other potential means of taxation: on consumption, capital, or income.

[kalm]

So he viewed progressive property taxation as morally ok, but not progressive income taxation? Why?

In Jefferson's time, he and many of the other founders believed that significant property ownership was a source and cause of inequality. Most significant property holders had been given their property by the Crown or its representatives in the colonies. Jefferson's view of significant property ownership as an inequity is evident in this quote, and he expresses a willingness to address this inequality by permitting a higher tax rate on more valuable land holdings.

Jefferson generally, though, favored consistent tax rates on other potential means of taxation: on consumption, capital, or income.

But where's the moral basis you spoke to?

[JoltinJoe]

I did a quick google search on Jefferson, uniform "income tax" and found this quote:

"The government which steps out of the ranks of the ordinary articles of consumption to select and lay under disproportionate burdens a particular one because it is a comfort, pleasing to the taste or necessary to the health and will therefore be bought, is in that particular a tyranny. Taxes on consumption like those on capital or income, to be just, must be uniform." --Thomas Jefferson to Samuel Smith, 1823. ME 15:432

[Skjellyfetti]

When he was 80 years old.

I already said he shifted toward crotchety old man politics in his twilight years.

[OL FU]

When he was 80 years old.

I already said he shifted toward crotchety old man politics in his twilight years.

How dare you talk about Jefferson that way