Senate Taxation: All I Ever Wanted (now discussing: relative tax burdens)

So to focus on this claim:

And yet again, QGM is actually arguing that we should raise taxes on lower and middle class people to lower it for the rich. And he wants to bring up what favors rich people, yet the things he argues for, flat taxes or consumption taxes, would be substantially more regressive than even the current system, to say nothing of his calls to get rid of the organization that is supposed to catch people using illegal dodges on their taxes.

I'll quote what I posted here earlier on the math of how flat taxes and consumption taxes would both lower taxes on the rich and raise them on everyone, because the math of how revenues can be met with a flat or consumption tax in a way that *doesn't* raise the taxes on the lower and middle classes still hasn't been provided. And that's fundamental to the repeated claims being made. And if the whole claim is "we could do this with flat taxes or consumption taxes", then you should be pretty able to show the numbers on that.

So again, provide a specific set of mathematical work that demonstrates how consumption taxes or flat taxes would do anything *other* than shift the tax burden to lower income people.

 

I'll put it this way: when you're rich, you can afford to count what percentage of your revenues may or may not end up being taxed. When you're poor, you count in dollars, not in percents.

 

Yes, if more money gets spent locally and such then that generates more sales for stuff. OK. Fair enough. But a huge chunk of economic stimulation comes from investments and risk taking. Once you start penalizing that and taking away incentive then things slow way down. Who decides how much is enough? Bernie Sanders? Please.

Of course, if we just could get access to Jeff Bezos bank account. Curing world hunger is going to take a lot more than just raiding Bezos wallet. Ironically the best thing for those places would be some capitalism & wealth infused to get things going. I think this too falls into the "give a man a fish he eats for a day...... " you know the saying. Once Bezos money is gone, then what? Move right down the Forbes list? I dunno - I just dont get into the concept of just taking something from someone else like these high-tax schemes appear to. Oh and when money is earned by someone then it is their money or "Muh Munneeee".

 

I'll let other people refute your verbatim conservative talking points. Instead, let's talk about tax cuts.
You understand that Republicans bypassed the 60 votes needed to pass their 2017 tax cuts by using reconciliation, i.e. making the bill 'revenue neutral'. And how did they do that? Well, in part by having the tax cuts for those that aren't corporations or the uber-rich expire. More importantly, while granting initial cuts, after a few years taxes would be raised on the middle class, higher than before the tax bill passed. Yes, the people you voted for and support increased your taxes. And yet, here you are, defending the poor $10 million a year elites, who in 365 days make more than you'll see in a lifetime.
They're laughing at you, Mike. They are picking your pocket and then distracting you because you'd rather "own the libs". You're nothing but a joke to them, because you'll keep returning them to office over and over despite not working in your best interests, let alone all the people you don't give a **** about. Whether it's DeSantis lowering business taxes and raising a consumption tax to make up for it, or Bush Jr. giving you a shiny one-time $300 check to cover up another permanent tax cut to the wealthy and corporations, you fall for it every damn time.

 

What are your sources for that, and is the definition of 'economic stimulation' one that has any actual value to quality of life or not? If wages and quality of life go down but the stock market goes up, for example, that is not a socially beneficial 'economic stimulation'.

It's not that hard to get, it's like your concept of raising taxes on poor people, except about the people who make enough money to be able to afford it.

 

This is somewhat misleading.

Economic stimulation comes from a variety of sources, including government spending on infrastructure. You get what's called a pull through stimulus effect - the government drops billions on a contract for a highway or new submarine, and industries outside the main deliverer benefit from getting adjacent contracts (i.e. I need a specialised system for the submarine, which I get from a subcontractor. And the people building it need to eat lunch, so someone sets up a business nearby that sells coffee and sandwiches, etc).

The most effective example of this in your realm would be Reagan's huge defence spending boost. The intent was to cripple the Soviets, and unintentionally set small-government conservative talk up for failure by growing the size of the govt. as well as its deficit. But, the outcome is the same.

Investment spending doesn't generate tax receipts, though, and tax receipts are important for providing social services. A healthy workforce with high economic participation rates is the best outcome, as you're not losing productivity to people too sick to get treated. And it also keeps a harmonious society without a lot of striking and rioting.

Whilst I agree Merk's comment about ending world hunger was misplaced - it's a day 1 solution, not a day 2 solution - Biden is not wrong to suggest that high income earners in that top of the top cohort could contribute more back to society. The simple reality is Mike that you could shave something off the top to shave something off the bottom of the socio-economic ladder, and it would drastically alleviate pressure on the middle class. Which is reason alone to do it. As someone whose tax burden is pretty high, I'm ok with that idea.

 

Just so we're clear on "investment" -- to back up @Lowbacca_1977 -- I don't think anyone can argue what happened during the pandemic was "growth" or "good economic positions" or "people getting jobs"...

... my retirement account in the stock market went up 29%.

 

Who can forget that when corporations got their massive tax cuts in 2017, they immediately moved to invest heavily in R&D and their own employees, with training and increased wages and bonuses....

.... is what didn't happen at all, and instead the savings all went to massive stock buybacks and CEO bonuses?

 

Stock buybacks were incredibly smart moves given the cost of wholesale capital. There's nothing wrong with buybacks, and if there's been any form of relief - tax, government bailouts, you name it - it's a sensible way to spend the money.

 

Well I wouldn't say that's true; the buyback means cash goes to shareholders for the shares, and also signifies an optimistic view of balance sheet so it's actually a smart, beneficial move...

Also, given Mike likes to complain about land tax, I thought I'd address another issue around income which is rent. Does anyone here think rent control is a good idea, and how gently would you like to be proven wrong?

 

Shifting the focus to another favourite topic, corporate tax:

https://www.economist.com/finance-a...untries-benefit-from-international-tax-reform

[/quote]Fighting for the scraps |
Will poorer countries benefit from international tax reform?
Yes, but not by as much as they want



International tax reform pits tax-hungry governments against giant multinational companies and their armies of tax advisers. It sets high-tax jurisdictions against low-tax havens. And it requires rich- and poor-country governments to somehow reach agreement. The 139 countries haggling at a forum run by the oecd, a club of mostly rich countries, have yet to reach a consensus. Poorer countries worry that the proposals on the table discussed are too complicated, inflexible and unfair.

Developing countries are thirsty for revenue in general, and reliant on corporate tax in particular. In 2017 African countries raised 19% of their overall revenue from corporation tax, compared with an average of just 9% for oecd members. That is partly because large informal sectors mean that they raise less in, say, personal-income tax.

The current system for global tax dings poor countries in two ways. For a start, multinational companies shift their reported profits to low-tax havens, depriving them of revenue. Then the rules allocate taxing rights to countries that are home to company headquarters, which tend to be rich. Poor countries’ tax revenues are depressed by as much as 5% relative to an alternative system in which profits are taxed based on the current location of companies’ revenues, their employees and their wage bills, according to an estimate by Petr Jansky of Charles University and Javier Garcia-Bernardo of the Tax Justice Network, an advocacy group. By contrast, those in rich countries are only 1% lower.

The reforms being discussed, and supported by America’s Biden administration, would reallocate the right to tax a slice of some companies’ profits, and agree on a global minimum corporate-tax rate, perhaps of 15%. Poor countries want to crack down on tax avoidance as much as rich ones. But a lack of cash and personnel makes it harder for them to engage in negotiations. Though low-income countries represent 22% of negotiating members, they make up only 5% of those attending important working-party meetings. Those constraints apply to the ability to administer tax and police evasion, too. On May 12th the African Tax Administration Forum (ataf), a group of national agencies, criticised the idea of reallocating the right to tax the portion of multinationals’ profits above some “routine” level, as “far too complex”, suggesting that a share of total profits be reallocated instead.

Another worry is that the new deal will become a straitjacket. The Biden administration has proposed a “binding, non-optional” dispute-resolution process as a way of reassuring anxious companies that they will not be taxed several times over. But some poor countries fear being on the wrong end of rulings too often, and see broadly applied binding arbitration as a “red line”. (A process applying to a narrower set of disputes could fly, however.) Another concern is that a minimum tax could threaten poorer countries’ use of tax incentives to reel in investment. But a minimum rate of 15% is still well below most poor countries’ statutory tax rate, leaving room for enticement. A global floor might encourage some countries to go the other way, by emboldening them to raise taxes on profits that are reported at home.

Perhaps the biggest complaint is that rich countries may get the bulk of taxable profits being grabbed back from havens, while poor ones are left with the scraps. In October the oecd estimated that a reallocation of taxing rights on some companies might help raise corporate-tax revenues in poor countries by around 1% (a newer proposal from the Biden administration should yield a similar sum). One negotiator for an African country called that a “disaster for developing countries”. ataf suggested that more companies be included, by drastically lowering the revenue threshold from €20bn ($24bn) to €250m. It is hard to imagine rich countries agreeing to that. The complex knock-on effects of a proposed minimum tax of 15% could raise poor countries’ corporate-tax take by another 2-4%. Even so, rich countries will probably make bigger gains still.[/quote]

 

How does that play into your past comments about ideal corporate tax rates?

 

Given the article:

I think Ender (and I) peg proper corporate tax rates closer to 18 - 25% (and much, much lower than the 35 - 45% of the US proposals) so that's probably more roughly in line?

PLEASE NOTE: This assumes both a) a functional social safety net (with additional corporate taxes, not passed to the employee), and b) elimination of certain loopholes that exist (particularly in the US) for the lower rate to be correct.

 

I'm preemptively requoting this part, to highlight that QGM has repeatedly argued for consumption taxes because they would be more fair, and will further note that one of the best examples of a consumption tax is the gas taxes that motorists pay, so if consumption taxes are really better for lower income classes, then one should hold that gas taxes are *good* for the lower income classes and not a problem.