Subject:
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Re: stuff (was: Art Debate Was: [Re: Swearing?])
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Tue, 18 Jan 2000 16:59:04 GMT
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Reply-To:
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lpieniazek@novera.STOPSPAMMERScom
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Viewed:
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2710 times
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Jasper Janssen wrote:
>
> On Sun, 16 Jan 2000 01:55:15 GMT, "Larry Pieniazek" <lar@voyager.net>
> wrote:
>
> > I'm interested in breakdowns... as I've said here before, some kinds of taxes
> > have a more pernicious distorting effect and therefore are worse than others.
>
> Which would those be?
Any tax, across the board, incents some behaviours and disincents
others. Broadly, there seem to be at least three classes of taxation,
although there may be others. These are:
Income - a tax on the production of wealth
Sales - a tax on the consumption of wealth
Property - a tax on the possession of wealth.
(VAT can be argued to be a 4th kind of tax, or one can argue that it is
a combination of Income and Sales. I haven't made up my mind. If it's a
4th kind, it seems to be taxing the adding of value to things, which I'd
argue is a kind of "production of wealth" but let's not get distracted)
Again, broadly, any of these tends to depress the thing they tax
(production, consumption, possession) and favor the other two
activities. (and other activities that don't fall into any of the three
categories... Is fornication production or consumption? :-) )
Now, when we examine taxes more closely, we often find that they apply
more specifically. That is, sales tax may apply only to certain goods,
or may exempt certain goods, property taxes may exempt things such as
churches, homesteads, only apply to industrial property, etc etc, income
taxes can only apply to certain income types, or may have different rate
levels at different income levels etc etc.
My claim is this: the more specific a tax is, or the more exemptions it
has, the more distortive it is, and the more it replaces pure economic
decisions with decisions that take into account the tax in effect.
To someone who thinks that government should properly incent certain
behaviours and disincent others, (without regard to whether they are
otherwise lawful) that's a good thing. To a free marketeer, tolerant of
all non rights infringing behaviours, that's a bad thing.
The US income tax, to this free marketeer, is particularly pernicious
because it is a maze of special cases, exemptions, credits and
penalties, and because the net result is that two people, making exactly
the same income, can arrange their affairs so that one pays a lot of tax
and the other hardly any.
One can make the argument that this is a desired outcome, we wish to
encourage certain behaviours (getting married, buying a house, investing
in solar energy or oil wells, giving all your money away in 10K/year
chunks to your kids while you are alive rather than in a big lump after
you die, owning a sunflower oil plant, keeping your income below certain
thresholds, and a bunch of other stuff all of which are, or have been in
the tax code at one point or another), and discourage others. I happen
to disagree.
But, broadly, if one MUST incent behaviours, what I would prefer to
incent would be production and what I would prefer to disincent would be
consumption.
So if one has to have taxes, I prefer as little as possible of the tax
base to be income, and what is, be applied uniformly to all income of
whatever source at the same percentage level no matter the amount of
income per person. I prefer as much as possible of the tax base to be on
consumption, with few or no exemptions.
For, if we want to have any non neutral effect, we wish to encourage
production and savings at the expense of consumption. At least that's my
view.
> The site is at http://www.cbs.nl/ . You're probably slightly more up
> on what you want to know than I am.
Thanks for the pointer. I may know what it is I want to know more than
you do, but I suspect, my Dutch being what it is(1), you know more of
what it says than I do. Is the english version complete? I did some
digging and I did not see anything that would answer the original
question about sources of government revenue by tax type. But I was just
browsing cursorily.
1 - nonexistent
--
Larry Pieniazek larryp@novera.com http://my.voyager.net/lar
- - - Web Application Integration! http://www.novera.com
fund Lugnet(tm): http://www.ebates.com/ ref: lar, 1/2 $$ to lugnet.
NOTE: Soon to be lpieniazek@tsisoft.com :-)
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Message has 2 Replies:
 | | Re: stuff (was: Art Debate Was: [Re: Swearing?])
|
| (...) VAT in practice, though, is more of a sales tax except that companies don't pay it. What happens is that everybody charges VAT on everything, which is to be transferred through to the government, but companies get any VAT they have paid back. (...) (25 years ago, 19-Jan-00, to lugnet.off-topic.debate)
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