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Google
Maybe Maybe Not
Questions for debate:

Is the level of skill, talent, knowledge, and/or experience necessary to a particular rate of pay in a particular job more important (and therefore more worthy of consideration in the tax code) than the level of physical work in particualr jobs?

Should we tax based on:

Skill?
Talent?
Knowledge?
Experience?
Hard work?
Some other consideration?
Google
CruisingRam
You forgot possibly the most important one in the US management hierarchy- networking- "it is not what you know, but who you know"- one of the great reasons American management is so very awful and over-paid. Classic example is Waggoner from GM- horrible boss, totally incompetent, but he "came up through the ranks" of management at GM and networked the right relationships and did it through no real ability or hard work at all.

Look at GW Bush- total lack of brains or talent or leadership or anything- he went to the head of the line over 500 more qualified folks for his national guard appointment and flight status. He is white rich guy affirmative action.

But how do you tax untalented stupid leaders that are there simply because they are connected? rolleyes.gif
Dingo
Should we tax based on:

Skill?
Talent?
Knowledge?
Experience?
Hard work?
Some other consideration?


Some other consideration, namely a flat tax on assets. Taxes are to raise revenues not play under-the-table reward/punishment games. If somebody or group is perceived to need greater rewards then send them a government check for everyone to see. No more tax based subsidies that try to pretend to be just some tax "deduction." No, "government subsidy" is the correct expression so it should be handled in an explicit over-the-table way and not as some sort of tax exception.
Hobbes
Is the level of skill, talent, knowledge, and/or experience necessary to a particular rate of pay in a particular job more important (and therefore more worthy of consideration in the tax code) than the level of physical work in particualr jobs?

In general, yes, absolutely. Lots of people can work hard, therefore that is not a very discerning attribute. Migrant farm workers work VERY hard, yet they don't get paid much at all. Why? Because their work doesn't require much skill, talent, knowledge, or experience. The more of those other things one has, the more one is likely to be paid.

Should we tax based on:

Skill?
Talent?
Knowledge?
Experience?
Hard work?
Some other consideration?


No. Or maybe more appropriately, we already do, since those are the the attributes that determine one's pay. Probably in the very order listed. If you're the only one who has the skill to do something, you're going to get paid very very well for it. Same as you move down that list, probably to lesser and lesser degrees.

+1 to what Dingo said.
Bikerdad
QUOTE(Maybe Maybe Not @ Sep 22 2011, 04:25 PM) *
Questions for debate:

Is the level of skill, talent, knowledge, and/or experience necessary to a particular rate of pay in a particular job more important (and therefore more worthy of consideration in the tax code) than the level of physical work in particualr jobs?

Should we tax based on:

Skill?
Talent?
Knowledge?
Experience?
Hard work?
Some other consideration?


Other consideration. One problem with your options is it only taxes wages. Second, placing a higher tax on the specific characteristics that result in higher wages is simply going to be a disincentive for developing/maximizing those characteristics, especially since the tax isn't connected to OUTCOMES. What could possibly go wrong in such a situation? rolleyes.gif

So tax consumption.
Maybe Maybe Not
QUOTE(Bikerdad @ Sep 24 2011, 02:11 AM) *
So tax consumption.
I agree. Replace all income/investment/interest/capital gains/gift/estate taxes with a national sales tax on everything.

Simply send a check to every citizen at the start of the year in whatever amount we think is the poverty level (the FAIR Tax people call it a "prebate"), then tax sales at somewhere between 20-25%.

These debates over the worthiness of the way people earn money are irresolvable and basing a tax scheme on them is bad policy.
Dingo
QUOTE(Maybe Maybe Not @ Sep 24 2011, 03:35 AM) *
QUOTE(Bikerdad @ Sep 24 2011, 02:11 AM) *
So tax consumption.
I agree. Replace all income/investment/interest/capital gains/gift/estate taxes with a national sales tax on everything.

Simply send a check to every citizen at the start of the year in whatever amount we think is the poverty level (the FAIR Tax people call it a "prebate"), then tax sales at somewhere between 20-25%.

These debates over the worthiness of the way people earn money are irresolvable and basing a tax scheme on them is bad policy.

Not too bad in principle once you throw in the prebate to even the playing field. I just have to wonder whether the cheating to get around the sales tax won't be so massive as to neuter it as a tax source and criminalize a good part of the economy. What is the historical experience if any with that level of sales tax?

That's why I prefer my flat assets tax on everything that isn't public property. It's kind of hard to hide the bulk of your assets(houses, cars, boats, stocks, bank accounts etc.) and there is a good cure for the rest. The government at a minimum confiscates what you don't declare and if the tax is like maybe 3% hiding it is a very high risk play. I also include a small commons rental fee divided equally to all citizens, not to mention a carbon tax, also kicked back to the citizens which would have multiple win win effects.
Maybe Maybe Not
QUOTE(Dingo @ Sep 24 2011, 09:02 AM) *
I just have to wonder whether the cheating to get around the sales tax won't be so massive as to neuter it as a tax source and criminalize a good part of the economy.
What is our experience with cheating to get around the income tax?

Is it easier to avoid a sales tax when you buy an Escalade, or to avoid tax on the income you use to buy it?
Dingo
QUOTE(Maybe Maybe Not @ Sep 24 2011, 03:12 PM) *
QUOTE(Dingo @ Sep 24 2011, 09:02 AM) *
I just have to wonder whether the cheating to get around the sales tax won't be so massive as to neuter it as a tax source and criminalize a good part of the economy.
What is our experience with cheating to get around the income tax?

When you add off the books cheating and what I consider on the books cheating, ie deductions and credits, I would say huge.

QUOTE
Is it easier to avoid a sales tax when you buy an Escalade, or to avoid tax on the income you use to buy it?

It's more the smaller goods and services I see turning towards the black market. As far as cars I would imagine car parts as being part of that. How about buying your car in another country and shipping it in? Or an increase in car thefts which then feed chop shops to harvest for lucrative parts.

The point is I really don't know what the fallout is for that high a sales tax. I was curious if it had been tried before and what was the outcome.
akaCG
Is the level of skill, talent, knowledge, and/or experience necessary to a particular rate of pay in a particular job more important (and therefore more worthy of consideration in the tax code) than the level of physical work in particualr jobs?

No individual, group, or institution (secular or not) possesses the requisite knowledge to make such assessments in any but the most subjective manner. As such, no individual, group, or institution should be granted the power/authority to impose ANY policies (including tax rates) that purport to be based on such assessments on any individual/group/institution other than himself/itself/itself.

Should we tax based on:

Skill?
Talent?
Knowledge?
Experience?
Hard work?
Some other consideration?

[/quote]

Tongue-in-cheek answer:

Birth month. On average, people born in October, for example, have 10 months' worth of advantage (in terms of mental and physical development) over people born in August beginning with the 1st grade in school, and that advantage keeps on paying dividends for the remainder of their lives. On average. smile.gif

Serious answer:

For the reasons mentioned in my answer to the first debate question, no considerations other than "How much did you make?" (income tax) and/or "How much did you spend?" (sales tax) should ever be part of any tax code.

ps:
Good topic, "MMN".
Google
JohnfrmCleveland
QUOTE(Maybe Maybe Not @ Sep 24 2011, 06:35 AM) *
QUOTE(Bikerdad @ Sep 24 2011, 02:11 AM) *
So tax consumption.
I agree. Replace all income/investment/interest/capital gains/gift/estate taxes with a national sales tax on everything.


The problem with this proposal is that we are a consumption-driven economy, and taxing consumption is a disincentive on the very behavior that we need to promote. People will always strive to make more money, with or without an income tax. But when it comes to non-necessary consumption, cost will determine whether or not one makes that unnecessary purchase.

QUOTE(Maybe Maybe Not @ Sep 24 2011, 06:35 AM) *
These debates over the worthiness of the way people earn money are irresolvable and basing a tax scheme on them is bad policy.


This, I agree with.
Maybe Maybe Not
QUOTE(JohnfrmCleveland @ Sep 24 2011, 07:37 PM) *
The problem with this proposal is that we are a consumption-driven economy, and taxing consumption is a disincentive on the very behavior that we need to promote. People will always strive to make more money, with or without an income tax.
But people WON'T spend, with or without a sales tax?

Why do people strive to make money (even if that money is taxed) if not to spend it for things they want?


Bikerdad
QUOTE(Dingo @ Sep 24 2011, 07:02 AM) *
I just have to wonder whether the cheating to get around the sales tax won't be so massive as to neuter it as a tax source and criminalize a good part of the economy. What is the historical experience if any with that level of sales tax?

We know that as the tax on tobacco products has skyrocketed in various jurisdictions, smuggling (i.e. tax evasion) of smokes into those jurisdictions has likewise gone stratospheric. (yes, hyperbole). So, your assessment of the increased likelihood of cheating is accurate.

HOWEVER, and this is a really big HOWEVER: the prevalence of cheating is correlated to the tax rate. This is true without regard to what is being taxed.

A 20-25% national sales tax will fail, even though it is equal or equivalent to the total current federal taxation level. The reason it will fail is simply because people will balk at paying that big of a chunk at once. Which is why past and current political leaders have opted to nickle and dime us, to take as much money BEFORE we even get it, as possible. Of course, the option of simply reducing spending is anathema to most politicos. Note: I would support such a tax, simply because it will clarify the relationship between us and the government. After a short time, it will be clear that the gov't serves us (and the spending and taxes will be greatly reduced) or that we are slaves, not citizens.
Julian
QUOTE(Maybe Maybe Not @ Sep 25 2011, 01:12 AM) *
QUOTE(JohnfrmCleveland @ Sep 24 2011, 07:37 PM) *
The problem with this proposal is that we are a consumption-driven economy, and taxing consumption is a disincentive on the very behavior that we need to promote. People will always strive to make more money, with or without an income tax.
But people WON'T spend, with or without a sales tax?

Why do people strive to make money (even if that money is taxed) if not to spend it for things they want?


Well, the most obvious answer to your question is that they strive to make money to pay off the debts they ran up during the last boom which the borrowed to spend on the things they wanted back then. A roof over their heads, mostly.

Which is why there's now a global slump in growth - consumers aren't consuming the way they used to, and the fiscal stimuli that have been tried so far (variants of printing money e.g. "quantitative easing") are simply being pocketed to pay off debts (most notably by big banks trying to recapitalise after having most of their debts nationalised, er, sorry, paid off by the taxpayer).

Nobody has any real idea of how to get out of the current economic crisis. Everybody fights shy of direct public investment in infrastructure - it's either contracted out to businesses that have their own reasons for participating (i.e. debts to pay), as in the USA, or it's left to the much-vaunted markets to decide what to do with the extra money (i.e. pay off debts) as in the Eurozone & UK, all for fear of what The Great God Markets might do. Meanwhile the Chinese and Germans either can't or won't stimulate their own domestic economy to make themselves into consumer markets that might draw in imports from Europe and North America and get us off the hook.

Even the Austrian School, whose analysis of the problem was closest to the mark, are clueless as to the solution - they're halfway between the annoying temperance leaguer the morning after the big beer festival "Well, you'll just have to suffer. It's your own fault" - we know it's our own fault, just give us the bloody Alka Seltzer!! - and the unhelpful joke Irishman - "How to get to Dublin? Well, I wouldn't start from here..." Thanks a lot.

All because the orthodox paradigm for the past 30 years has been Don't Upset The Markets. Do what you like, socialism-lite or aggressive conservatism, just so long as you either pander to The Markets (or hide it from them, like Greece tried and the British PFI programme still does) . Democracy has ceded superiority to The Markets, and is now reaping the consequence of doing so.

It would be hilarious if it weren't so depressing.
Hobbes
QUOTE(Julian @ Sep 26 2011, 06:57 AM) *
Even the Austrian School, whose analysis of the problem was closest to the mark, are clueless as to the solution - they're halfway between the annoying temperance leaguer the morning after the big beer festival "Well, you'll just have to suffer. It's your own fault" - we know it's our own fault, just give us the bloody Alka Seltzer!! - and the unhelpful joke Irishman - "How to get to Dublin? Well, I wouldn't start from here..." Thanks a lot.


Actually, quite often that IS the solution. Governments continue to operate under the fallacy that they're in control of the economy...when they're not. Almost always, what they do to try and help just makes things worse. Housing here is a perfect example. The housing market is going to continue to flounder until there is a general feeling that we're at the bottom. Everything the government does to try to prop it up until then is just extending the process, making people more uncertain. In short, not only is it not helping, it's hurting.

So, yes, I think the solution is for the government to stop trying to find a solution, and let everything work its way out. That's what is going to end up happening no matter what the government tries to do, anyway.

To work this back to the debate question,this will then allow all the workers to figure out how to use their skills, talents, knowledge, experience, and hard work in new venues better suited to the current climate...which will then also be better suited for the long term.
akaCG
QUOTE(Julian @ Sep 26 2011, 07:57 AM) *
...
Even the Austrian School, whose analysis of the problem was closest to the mark, are clueless as to the solution ...
...

Wrong. They aren't in the least bit clueless about the solution, for the simple reason that their solution employs the very same fundamental principle that resulted in their analysis being closer to the mark than that of any other "school":

The more that government, in its "infinite wisdom", tries to steer economic activity into "desirable" directions and/or away from "undesirable" ones, the more resource allocation distortions/imbalances it introduces into the economy.

Solution: Limit the government's role strictly to that of "referee", and keep it the heck away from "play-calling" ever again.

Dingo
Funny that we keep getting back to this economic religion that tells us that a transaction between a dealer and a junkie represents the apex of sound economics. Apparently giving samples to the uninitiated is also good free market promotion. wacko.gif hmmm.gif
Ted
QUOTE
Should we tax based on:

Skill?
Talent?
Knowledge?
Experience?
Hard work?
Some other consideration?




There is always some luck involved and even connections in some cases but generally the market determines what any particular worker is worth.

And generally all listed above play into it. One may have it all and be unwilling to work hard and never make it……

The tax code is far too complicated now and would be made incomprehensible if we tried to tie it to any particular criteria. Esp. since different jobs may require a different mix of the criteria…

Maybe Maybe Not
QUOTE(akaCG @ Sep 26 2011, 12:46 PM) *
Solution: Limit the government's role strictly to that of "referee", and keep it the heck away from "play-calling" ever again.

Doesn't the referee "call 'em as he sees 'em" based on a set of rules?
What are those rules? Who determines the rules?

akaCG
QUOTE(Maybe Maybe Not @ Sep 26 2011, 05:58 PM) *
QUOTE(akaCG @ Sep 26 2011, 12:46 PM) *
Solution: Limit the government's role strictly to that of "referee", and keep it the heck away from "play-calling" ever again.

Doesn't the referee "call 'em as he sees 'em" based on a set of rules?
What are those rules? Who determines the rules?

The game and its rules are agreed upon by the players. Those rules include not only the boundaries within which all the players must stay lest they be penalized, but also the boundaries within which the referee must stay lest he be replaced.

Ted
QUOTE(Maybe Maybe Not @ Sep 26 2011, 05:58 PM) *
QUOTE(akaCG @ Sep 26 2011, 12:46 PM) *
Solution: Limit the government's role strictly to that of "referee", and keep it the heck away from "play-calling" ever again.

Doesn't the referee "call 'em as he sees 'em" based on a set of rules?
What are those rules? Who determines the rules?

those would be the rules that level the playing field and stop cheaters. beyond that is what we see far too much of today - big players buying special tax treatment or a government picking winners and losers because of political connections
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