Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.2 9/18/84 exptools; site whuxlm.UUCP
Path: utzoo!watmath!clyde!burl!ulysses!mhuxr!ihnp4!whuxlm!mag
From: mag@whuxlm.UUCP (Gray Michael A)
Newsgroups: net.legal,net.taxes
Subject: Re: Abuse of social contracts. (tax system)
Message-ID: <683@whuxlm.UUCP>
Date: Wed, 20-Feb-85 08:12:13 EST
Article-I.D.: whuxlm.683
Posted: Wed Feb 20 08:12:13 1985
Date-Received: Fri, 22-Feb-85 21:46:54 EST
References: <2748@dartvax.UUCP> <445@ahuta.UUCP> <399@lsuc.UUCP> <110@styx.UUCP> <319@mhuxm.UUCP>
Organization: AT&T Bell Laboratories, Whippany
Lines: 54
Xref: watmath net.legal:1424 net.taxes:692

> > I think there is even economic justification for a "regressive"
> > tax, e.g. 20% on the first $15,000, 15% on the next $30,000,
> > etc., on the grounds that higher-income people simply don't
> > consume government services at a linearly-proportional rate.
> > Does a person earning $100,000/yr consume FIVE TIMES as much
> > tax-supported public services (police/fire/school/defense/
> > environment/etc.) than a person earning $20,000? No way. Yet he
> > will pay (without cheating or abusive shelters) more than five
> > times as much tax.
> > 
> Consider the arguement that the person making 5 times as much income has
> 5 times as much to loose if his house burnt down (no fire department), if he
> was robbed (no police), or if the country was overtaken by a foreign power
> (no defense).  Besides, taking your arguement to an extreme, we would have to
>abolish all public welfare/service programs, since the family getting $10K/year
> in public assistance "owes" that much to the governmnet.

That argument is an argument for a wealth tax (such as a property tax),
not for a flat or progressive income tax.  It is perfectly possible
to earn $100,000/year and have nothing to show for it -- i.e. nothing
for the police, fire dept, or military to protect.  It is also possible
to have lots of possessions and pay very low or no taxes, especially
when income is mostly in the form of long-term gains or tax-free
investment dividends.

(Following paragraph somewhat tongue-in-cheek)
As long as we're talking regression, why not just have a head tax?
$4,000 from each of 250,000,000 Americans would cover the current
budget, and make a large payment on the national debt besides.
The marriage penalty would cease to exist, but population growth
would dramatically decline if children cost an extra $4,000/year each!
No one would be able to complain that someone else was pating lower taxes.
Corporations would not be taxed at all, so the cost of doing business
would decline, and so would prices.  Tax accountants would have to
find useful employment.  Those who failed to pay would simply be
drafted into the military or public service jobs until their $4,000
was worked off each year, and wouldn't be allowed to vote.
(End of tongue-in cheek part)

By the way, there's been a lot of criticism of corporate tax rates
in this group.  What good does taxing corporations do?  They pay
their taxes out of income, you know, which comes from the consumers
who buy their products.  Individuals pay all the taxes in the end.
Worse, these taxes are hidden and hard to guess at. Right now,
billions of dollars are spent needlessly in figuring ways to reduce
taxes and making business plans in the face of fluctuating tax
climates.  Hundreds of thousands of private and public sector jobs exist
that have no other purpose than shuffling paper related to paying
and collecting taxes.  These workers produce nothing consumable.
If corporations weren't taxed, most of these people could do something
productive, and the standard of living would rise.


Mike Gray, BTL, WH