Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version nyu B notes v1.5 12/10/84; site acf4.UUCP
Path: utzoo!watmath!clyde!bonnie!akgua!whuxlm!harpo!decvax!genrad!panda!talcott!harvard!seismo!cmcl2!acf4!mms1646
From: mms1646@acf4.UUCP (Michael M. Sykora)
Newsgroups: net.politics
Subject: Re: State Tax Dedudction
Message-ID: <1340181@acf4.UUCP>
Date: Fri, 7-Jun-85 14:51:00 EDT
Article-I.D.: acf4.1340181
Posted: Fri Jun  7 14:51:00 1985
Date-Received: Mon, 10-Jun-85 21:13:42 EDT
References: <735@mtuxo.UUCP>
Organization: New York University
Lines: 87

>/* mrh@cybvax0.UUCP (Mike Huybensz) / 12:23 pm  Jun  6, 1985 */

>People have not been
>significantly more generous with their reduced taxes.

Whose taxes have been reduced?  I'm not sure that mine have been, but if they
have, it was only by a a slight amount.

>To date, the
>largest incentive ever seen for generosity has been direct deductions
>from taxes, on the grounds that if you have to lose money, it might as
>well be lost to something you want to support (and may get kickbacks of
>honor, social connections, etc. from.)

In theory, if A donates $20,000 to charity, he pays no taxes on this amount.
If he spends the $20,000 on a car for personal use instead, he pays
$10,000 in taxes (assuming a 50% rate).  Thus, in the first case A
gives up $20,000 and receives the benefits you describe.  One can only
speculate about how large a fraction of $20,000 these benefits are
worth to A (excluding the "good feeling" A gets from giving to charity).
In the 2nd case, A gives up $30,000, and gets a car worth 20,000.
It is not clear that A has not in fact been generous.  It seems likely to
me that he HAS been generous.

Of course, tax deductions do provide greater incentives to give to charity
than there would be without the tax deductions.  However, given that
people won't have to pay taxes on this money anyway, it is not clear
that they won't be generous, albeit, to a lesser percentage than
when there are tax deductions for charitable contributions.  But this
is a lesser percentage of a greater sum, and thus it is not clear that
the amount contributed will not be much greater than when there are
taxes and tax deductions for charitable contributions.

MOREOVER, we're not really talking about charity here, since every one
of us has a lot to lose if we don't have an adequate defense.  Rich people
have the most to lose in such a situation (at least materially), and they
are also the one's who can do the most to prevent losses.

>> In addition, I believe it is likely,
>> given that the system will be financed by contributions, that there will
>> be less waste and fraud because people will have more control over how
>> their money is spent.  Also, defense of other countries will not have to
>> be financed by Americans, unless they want to finance it.

>Will people have more control how their money is spent?  If so, I'm
>reminded of the lament of a Cornell U. administrator: "No donor wants
>a new steam line named after him."  There are lots of government
>expenses that are major but not sexy enough to be contributed to.

I'll have to do some more thinking about that one.

>As for defense of other countries, what will you have?  Will we donate
>to both sides in Nicaragua, because some of us like the contras and
>others like the Sandanistas?

I suspect it's unlikely that many will be contributing to the Sandinistas,
and slightly more likely that people will be contributing to the contras.

>And what about the free-market in world domination?  It is the wealth
>we can rally for our defense (more than anyone else) that keeps us and
>our interests safe and dominating the world.  If we abandon our means of
>efficiently channeling wealth into defense, someone else who still uses
>those means will be able to outcompete us.

I don't believe we should be trying to dominate the world!

>> If such a system doesn't work, we can always go back to the old one.
>> In the meantime, the government can finance defense by selling
>> its vast holdings (in areas other than defense).

>With current defense costs in the hundreds of billions of dollars, how
>long do you think the government can finance anything with this non-
>renewable source of income?

It is not necessary that we eliminate taxes for defense right away.
We can cut it gradually and see what happens.

>Frankly, I consider this idea to be part
>of the hidden agenda of many groups to buy undervalued government
>resources for their own profits (ignoring any benefits to the rest of
>us from the current state of those resources.)

Why?

>Mike Huybensz		...decvax!genrad!mit-eddie!cybvax0!mrh

					Mike Sykora