Economics Questions

Re: Delete the Income Tax

Clayton — Tue, 20 Jul 2010 19:15:05 GMT

The system is permanently broken. Just talk to your average person-on-the-street to get an idea of just how deeply the meme that the State must tax-and-spend is ingrained in people's heads. The only way forward is a gradual process of decentralization of power (through nullification and secession) and jurisdictional competition for population. This is the "race to the bottom" so dreaded by all State apologists. It's the only hope.

Clayton -

Re: Delete the Income Tax

scineram — Tue, 20 Jul 2010 18:59:18 GMT

I don't think they could get back the confiscated money. The president can only commute sentences.

And it could certainly lead to impeachment.

Re: Delete the Income Tax

bloomj31 — Tue, 20 Jul 2010 18:16:32 GMT

That's a very interesting question. Technically, the president's pardon power is absolute. But the scale of such a pardon is, as far as I know, unprecedented.

As far as impeachment goes, that's a complicated process.

Re: Delete the Income Tax

BrianAnderson — Tue, 20 Jul 2010 01:45:03 GMT

President issued a pardon to all tax resisters

Very interesting. I don't think they could really do anything about it. I'm sure Congress wouldn't be too happy with the President, but that's not really an impeachable offense by any means.

Re: Delete the Income Tax

Michelangelo — Tue, 20 Jul 2010 01:42:28 GMT

So long as we're on this topic, I have a small pet theory. Suppose that the President issued a pardon to all tax resisters (as far as federal taxes went). Could Congress do anything to collect taxes nontheless? 'Constituionally' speaking I mean.

Re: Delete the Income Tax

bloomj31 — Mon, 19 Jul 2010 19:31:46 GMT

"No, that is bs."

Yes, I suppose they could eliminate it today if they wanted to but formally the income tax was established by the 16th amendment.

I personally think Congress' Article 1 power to tax is broad enough to allow them to tax anything they want whether there's an amendment or not.

EDIT:

This is interesting I didn't know this,

"In Pollock v. Farmers' Loan & Trust Co. the Supreme Court declared certain taxes on incomes — such as those from property under the 1894 Act — to be unconstitutionally unapportioned direct taxes. The Court reasoned that a tax on income from property should be treated as a tax on "property by reason of its ownership" and so should be required to be apportioned. The reasoning was that taxes on the rents from land, the dividends from stocks and so on burdened the property generating the income in the same way that a tax on "property by reason of its ownership" burdened that property.

After Pollock, while income taxes on wages (as indirect taxes) were still not required to be apportioned by population, taxes on interest, dividends and rent income were required to be apportioned by population. The Pollock ruling made the source of the income (e.g., property versus labor, etc.) relevant in determining whether the tax imposed on that income was deemed to be "direct" (and thus required to be apportioned among the states according to population) or, alternatively, "indirect" (and thus required only to be imposed with geographical uniformity).^[15]

The Sixteenth Amendment overruled the effect of Pollock.^[25]^[26] That means the Congress may impose taxes on income from any source without having to apportion the total dollar amount of tax collected from each state according to each state's population in relation to the total national population.^[27] In Abrams v. Commissioner, the United States Tax Court stated:

Since the ratification of the Sixteenth Amendment, it is immaterial with respect to income taxes, whether the tax is a direct or indirect tax. The whole purpose of the Sixteenth Amendment was to relieve all income taxes when imposed from [the requirement of] apportionment and from [the requirement of] a consideration of the source whence the income was derived.^[28]"

http://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution

Re: Delete the Income Tax

scineram — Mon, 19 Jul 2010 19:27:40 GMT

bloomj31:

Eliminating the income tax would also require repealing the 16th amendment.

No, that is bs.

Re: Delete the Income Tax

bloomj31 — Mon, 19 Jul 2010 19:24:38 GMT

Eliminating the income tax would also require repealing the 16th amendment.

I haven't really thought about it is deeply as Kaju clearly has but it does seem like payroll and corporate are more vulnerable. However, SS and Medicare are absolutely untouchable.

"Can you eliminate the payroll and corporate tax with an executive order, or does something like that need to go through Congress?"

Only Congress.

Re: Delete the Income Tax

krazy kaju — Mon, 19 Jul 2010 19:20:35 GMT

Haha!

1. I'm not running for President. (: As a nerd, I just like to think about this kind of stuff.

2. There's no way anyone is going to eliminate over $1 trillion in taxes without Congress's approval.

Re: Delete the Income Tax

BrianAnderson — Sat, 17 Jul 2010 20:02:56 GMT

The bad news is... this is all politically impossible.

Thanks again for that information. I wish I were better at economics and budget stuff. You really should run for president. I really do hope Ron Paul wins in 2012 (assuming he runs). Can you eliminate the payroll and corporate tax with an executive order, or does something like that need to go through Congress?

Re: Delete the Income Tax

MaikU — Sat, 17 Jul 2010 19:20:15 GMT

krazy kaju:

The "income" tax takes in slightly over $1 trillion in revenue. "Payroll" taxes, which also tax income of individuals, takes in slightly under $1 trillion in revenue. Payroll taxes are also the taxes that are supposed to fund social programs like unemployment insurance, Medicare, and Social Security. On a side note, many lower and middle class households pay MORE in payroll taxes than they do in income taxes. Furthermore, payroll taxes also acts as a tax on employment. If you add a cost to something, you'll get less of it. Thus, eliminating the payroll tax would decrease involuntary employment, as businesses would be better able to afford to hire more workers. Therefore, if the federal government were to eliminate ALL social programs, it should start by eliminating payroll taxes.

you should run for president!

Re: Delete the Income Tax

krazy kaju — Sat, 17 Jul 2010 15:05:03 GMT

This should help you. The good news is that if we eliminated the payroll tax (- $940 bn) along with Social Security and Medicare (+ $1,148 bn), then we'd be shrinking the budget deficit. Instead of trying to shrink the deficit, I'd use the left over $200 bn to eliminate the corporate tax. That'd be a much more efficient tax cut than cutting the income tax. Without payroll and corporate taxes, the investment would boom, the economy would grow at a much quicker rate, and a significant portion of the lost revenue would be made up for in increased income, capital gains, and excise tax revenues (studies by economists have shown that between 50-100% of lost revenue from a corporate tax cut would be captured by government through other taxes). At the end of the day, I'd use the increased income tax revenue to eliminate all tariffs/customs duties, death taxes, and capital gains taxes. The bad news is... this is all politically impossible.

Re: Delete the Income Tax

BrianAnderson — Sat, 17 Jul 2010 06:42:45 GMT

it should start by eliminating payroll taxes.

That's interesting. Thank you. I hadn't known the real difference between those two taxes. I always assumed they were the same tax, only called two different things.

Re: Delete the Income Tax

krazy kaju — Sat, 17 Jul 2010 06:23:16 GMT

The "income" tax takes in slightly over $1 trillion in revenue. "Payroll" taxes, which also tax income of individuals, takes in slightly under $1 trillion in revenue. Payroll taxes are also the taxes that are supposed to fund social programs like unemployment insurance, Medicare, and Social Security. On a side note, many lower and middle class households pay MORE in payroll taxes than they do in income taxes. Furthermore, payroll taxes also acts as a tax on employment. If you add a cost to something, you'll get less of it. Thus, eliminating the payroll tax would decrease involuntary employment, as businesses would be better able to afford to hire more workers. Therefore, if the federal government were to eliminate ALL social programs, it should start by eliminating payroll taxes.

Delete the Income Tax

BrianAnderson — Sat, 17 Jul 2010 06:13:37 GMT

When Ron Paul was running in 2008, he said that by taking away the income tax we'd have to reduce the federal budget by $1 trillion. But, if I recall correctly, we spend $1 trillion on welfare each year. I know people say there will be riots in the streets if a president did away with all social programs (e.g. welfare, medicaid, medicare), but do you think people would still riot and be mad if they didn't have any of their income taken away by the government? Then they could buy their own healthcare and everything. Aside from people who are retired and didn't save any money for some reason. What do you think?

I feel like I may be making a mistake here since this replacement seems too obvious for the government to miss.