Income tax

cavedave

"[Working] is a God-given fundamental right that is protected under the Constitution and can't be taxed any more than exercising freedom of speech."

The case revolves around the definitions of profit and what can be taxed under the American constitution.
However the quote above makes a more general point.

You should be allowed work to provide things for yourself, so why should this right be taxable unlike other rights you have?

Akrasia

cavedave wrote:

"[Working] is a God-given fundamental right that is protected under the Constitution and can't be taxed any more than exercising freedom of speech."

The case revolves around the definitions of profit and what can be taxed under the American constitution.
However the quote above makes a more general point.

You should be allowed work to provide things for yourself, so why should this right be taxable unlike other rights you have?

because there is a social contract.

Humans live in a society We're not isolated creatures who provide everything for ourselves individually and autonomously.

We pay taxes and in return we are supposed to receive services in return, whether it's insurance (social welfare, 'universal healthcare', education, roads, police and defence forces air sea rescue and fire services.

If we didn't pay any taxes then we would be forced to provide for all of these things ourselves on an individual basis (or do without them) and this is highly unsatisfactory for a number of reasons. (firstly, because it would be far more expensive for each individual, secondly, because not everyone will be able to afford essential services, and there are moral and social obligations not to mention direct consequences for the selfish individual in allowing large numbers of people to become poor, desperate and 'disorderly'.


So in a state, taxes must be paid. this can either be income based, or consumption based or a mix of the two. Income taxes are seen as progressive because they take into account an individuals ability to pay, consumption taxes are regressive because the poor have to pay a much higher proportion of their income for each purchase than rich people have to pay.

Akrasia

The court case you referred to is interesting if not terribly depressing. If america gets rid of all of their income taxes and instead places all the tax burdon onto consumption then it will thrust a hundred million Americans into deep deep poverty. It could spark a second american revolution. (it would also completely destroy the U.S. economy which is built on rampant over consumption)

cavedave

because there is a social contract.

Show me where i signed it and i will go along with it

No argument from me that you need tax money to pay for roads and such . In America these local issues are paid for with state taxes and this case is about federal taxes which mainly seem for interest and guns.

Income taxes are seen as progressive because they take into account an individuals ability to pay, consumption taxes are regressive because the poor have to pay a much higher proportion of their income for each purchase than rich people have to pay.

So essentials like food have no tax on them because you need to buy them. Are you then not taxed on your income up to the point where you can pay for all the essentials you need*?

You give a good practical argument for income tax being fairer then indirect tax. However the question remains of why this right (to work) is taxed and others are not?

* The figures is here http://www.ireland.com/focus/budget2007/news/news150.htm if you earned 20k a year (40 hours a week at ten euro an hour for 50 weeks) you would still pay 1,016 euro in tax.

seamus

Slightly OT, but I think the issue is that people look at income as a penalty for earning too much. The purpose of income tax is to provide money so that the country can continue to run and develop its economy. If income tax weren't paid, the ability to work in the first place would be massively diminished, and people would be begging to work.

In theory, it's circular - the more income tax that's paid, the more money is available to improve the economy, which means more people earn more, which means more income tax is paid, and so on.

I find the current system relatively fair - we define a certain minimum amount of money which someone can earn, on which they pay no tax. Essentially, you are allowed to earn enough money to provide for yourself and your family, and not get taxed on it. Anything above that is "profit", on which tax is payable.

So to answer your point - the right to work isn't taxed. You have a right to provide for yourself, and theoretically this isn't taxed - you *can* live on minimum wage.

sovtek

cavedave wrote:

Show me where i signed it and i will go along with it

No argument from me that you need tax money to pay for roads and such . In America these local issues are paid for with state taxes and this case is about federal taxes which mainly seem for interest and guns.

Texas does not have a state income tax. There is a mix of federal and local taxes that fund government services locally. The cutting of federal funds for the dikes in New Orleans is thought to have caused much of the damage associated with Katrina.

You give a good practical argument for income tax being fairer then indirect tax. However the question remains of why this right (to work) is taxed and others are not?

I think its arguable that there is a right to work. I never hear this stated when companies start laying people off.

cavedave

I think its arguable that there is a right to work. I never hear this stated when companies start laying people off.

The right to work is more of a right to be allowed work. The most famous European example is the Bosman ruling about a football player being allowed to go get another job.
http://www.liv.ac.uk/footballindustry/bosman.html
It is more to do with contracts not being allowed to say "you cannot work" rather then someone having to give you a job.

Akrasia

cavedave wrote:

Show me where i signed it and i will go along with it

Yeah, there is a big problem with the social contract in that acceptance is implied and there is no real opt out clause, But for the 'constitutionalists' who took the case against the IRS, using a 250 year old document drafted and signed by an elite set of 'founding fathers' as the definitive decider of what is acceptable or unacceptable, it's not very satisfactory either.

In theory, the social contract is validated through a robust democracy. The contract could validly be argued to be null and void in an undemocratic regime, and it can easily be argued that the federal government is undemocratic, but then, so is the U.S. constitution.

No argument from me that you need tax money to pay for roads and such . In America these local issues are paid for with state taxes and this case is about federal taxes which mainly seem for interest and guns.

The case was brought by a 'Libertarian' and the ultimate goal is to demolish all income taxes, local federal and state based. Their goal is do dismantle the state and privatise all public services, which is an absolutely terrible idea for the reasons I have already stated.

So essentials like food have no tax on them because you need to buy them. Are you then not taxed on your income up to the point where you can pay for all the essentials you need*?

Who decides what's an essential? Food is, but so are clothes, and so is electricity and water, and communication and transport. If you can't afford to leave your house because the bus costs too much and you can't afford to pay a toll to use the roads, is that freedom?

You give a good practical argument for income tax being fairer then indirect tax. However the question remains of why this right (to work) is taxed and others are not?

The social contract. The tax system didn't just emerge out of thin air. It was fought for over generations of political struggle.

* The figures is here http://www.ireland.com/focus/budget2007/news/news150.htm if you earned 20k a year (40 hours a week at ten euro an hour for 50 weeks) you would still pay 1,016 euro in tax.

All that means is that workers still have a lot more work to do to reform the tax system through political action. It doesn't mean that income taxes are inherently unjust or unfair

sovtek

cavedave wrote:

The right to work is more of a right to be allowed work. The most famous European example is the Bosman ruling about a football player being allowed to go get another job.
http://www.liv.ac.uk/footballindustry/bosman.html
It is more to do with contracts not being allowed to say "you cannot work" rather then someone having to give you a job.

In Texas there is a "right to work law"...it's AKA the "right to fire law". If a person has a right (something that cannot be taken away nor given) then they must have a job. No job...no work...therefore being denied your rights.
I'm all for it.

cavedave

The case was brought by a 'Libertarian' and the ultimate goal is to demolish all income taxes, local federal and state based. Their goal is do dismantle the state and privatise all public services, which is an absolutely terrible idea for the reasons I have already stated.

What someones ultimate goals are does not really effect whether they are legally correct on this question. Basing answers on the ultimate goals of people who ask the questions is pretty dubious.

Who decides what's an essential? Food is, but so are clothes, and so is electricity and water, and communication and transport.

Currently the government do. Electricity has Vat on it, as do your phone bills.

In theory, the social contract is validated through a robust democracy.

So if in the morning the majority decided to abandon the right to silence, or a trial by your peers, that would be ok as the majority can change the social contract? I would argue that you have certain inalienable rights that are not related to what the majority thinks.

The social contract. The tax system didn't just emerge out of thin air. It was fought for over generations of political struggle.

And is the tax system a purely practical issue or is it one based on principles of social justice?

All that means is that workers still have a lot more work to do to reform the tax system through political action. It doesn't mean that income taxes are inherently unjust or unfair

I have heard it argued that everyone who works should pay some income taxes on the grounds that then they can say "My work contributes to society". I am not sure I buy this argument though.

There is a mix of federal and local taxes that fund government services locally. The cutting of federal funds for the dikes in New Orleans is thought to have caused much of the damage associated with Katrina.

Much of the federal governments tax income is from property taxes. The argument could be made "I have the right to own property so in the same way you cannot tax my right to free speech you cannot tax my right to own property as well" could probably be made. If you remove taxes on income and property houses) you have very little income and you have to wonder who is going to pay for defense, highways etc.

I do not have a set opinion on this issue i am just trying to pass it around for a while to see what comes out.

Akrasia

cavedave wrote:

What someones ultimate goals are does not really effect whether they are legally correct on this question. Basing answers on the ultimate goals of people who ask the questions is pretty dubious.

And legally correct does not mean that it is the socially or morally correct course of action. I would support a movement to withhold income taxes in protest with the way the money is being spent on pursuing imperial wars around the world, but I will not support the same action if the intention is to dismantle public services and fully privatise education, healthcare, rescue services etc etc while still supporting the excessive armed forces.

Currently the government do. Electricity has Vat on it, as do your phone bills.

Yeah, but the government also has safety net programs to help the most vulnerable people to pay for these services. Libertarians want to remove all of these safety nets when I think they should be strengthened.

So if in the morning the majority decided to abandon the right to silence, or a trial by your peers, that would be ok as the majority can change the social contract? I would argue that you have certain inalienable rights that are not related to what the majority thinks.

There's more to democracy than majority rules.

And is the tax system a purely practical issue or is it one based on principles of social justice?

It's both

I have heard it argued that everyone who works should pay some income taxes on the grounds that then they can say "My work contributes to society". I am not sure I buy this argument though.

I don't think many other people buy it either. At least not enough to fight for.

is_that_so

I don't think a document written so long ago can genuinely be applied to a complex modern world. I think it stands up in the defence of liberty and other areas. But a right can only be justified if you are prepared to respect the right of another to make their choices. In other words that you can show enough responsibility to recognise that right. This is where the implied social contract comes in.

Rights also seem to show up without the required responsibility that goes with them; to exercise that right responsibly. In an ideal world we would do this. However altruistic we may be, it's still a WII FM (What's in it for me) world.

Income tax as long as it is not massively punitive is an equitable method of enforcing that responsibility. It might be argued that government may not have a right to tax but they do have a responsibility to all of the people. By electing them we give them that responsibility.

We may not want income tax but we would like the road that takes to and from that job along with the rest of the infrastructure. JFK springs to mind here.

"Ask not what your country can do for you etc ...."

Europe has always had a much stronger and in my mind fairer system of social justice than the US.
It attempts, badly at times, to protect the weakest and provide support for them. I see that as a much better approach.

As regards the court case it sounds like an interesting intellectual argument that would end up as seriously bad law. It also sounds like an attempt to impose a particular view on others. That does not sit too squarely with mutual respect of rights.

K-9

Akrasia wrote:

Quote:
* The figures is here http://www.ireland.com/focus/budget2...ws/news150.htm if you earned 20k a year (40 hours a week at ten euro an hour for 50 weeks) you would still pay 1,016 euro in tax.

All that means is that workers still have a lot more work to do to reform the tax system through political action. It doesn't mean that income taxes are inherently unjust or unfair

Income tax is limited as a tool for fairness. E.g. if you are on Minimum wage you don't pay tax, so tax reductions aren't going to affect you. I do think the current system isn't too bad. I think if you earn over the minimum wage you should pay some tax. In fairness on €20k you only pay 5% of your income or about €20 a week and half of that is stamp which pays for pensions, sick pay etc. etc.

The cutoff point for no income tax is subjective. If you had no tax on the above example, then people on €24k would feel hard done by and so on.

is_that_so wrote:

We may not want income tax but we would like the road that takes to and from that job along with the rest of the infrastructure.

Very true and political parties are not leading by example here. Most promised more tax cuts yet better health, education, roads etc.

At the moment, the top 10% pay 90% of the income tax which is quite fair, tho off course there are anomalies. Off course there is the arguement that just because somebody earns €100k why should they pay say 35/40k of their income over.

In Germany, I think about 14% of income is taken off everybody and paid directly into health. Here, people on the doorsteps;) would probably say they would agree with it but then vote against it

Liam Byrne

is_that_so wrote:

We may not want income tax but we would like the road that takes to and from that job along with the rest of the infrastructure.

As long as the money goes to where it's required.......the tax on new and second-hand cars, as well as the annual road tax is WAY over the odds in this country, and even though there is no alternative for most people cars are (a) taxed as a luxury and (b) subject to a VRT tax, which was substituted for Excise Duty completely against the spirit of the EU.

The problem in Ireland isn't income tax, it's the across-the-board taxes:

1) income tax, before you get the cash
2) other taxes (road tax, fees, licences, etc)
3) stupid and devious taxes like €40 on credit cards, even though everyone would be safer if there was less cash around
4) VAT, VRT & Excise Duty
5) stealth taxes and charges for services that the Government couldn't be arsed providing anymore
6) The National Lottery, which is used to fund projects that the Government should be funding
If there were one or two of those categories, no-one would bitch, but having ALL of them landed on you means that your cash doesn't go far.

And the fact that some fat-cats get away with paying none is a pain.....as well as the fact that the Government grants themselves pay-rises and ongoing pensions willy-nilly.......since WE hire them via elections, WE should dictate their pay rate according to their abilities (which, to be honest, is usually pretty lacking).

Akrasia

Liam Byrne wrote:

As long as the money goes to where it's required.......the tax on new and second-hand cars, as well as the annual road tax is WAY over the odds in this country, and even though there is no alternative for most people cars are (a) taxed as a luxury and (b) subject to a VRT tax, which was substituted for Excise Duty completely against the spirit of the EU.

The problem in Ireland isn't income tax, it's the across-the-board taxes:

1) income tax, before you get the cash
2) other taxes (road tax, fees, licences, etc)
3) stupid and devious taxes like €40 on credit cards, even though everyone would be safer if there was less cash around
4) VAT, VRT & Excise Duty
5) stealth taxes and charges for services that the Government couldn't be arsed providing anymore
6) The National Lottery, which is used to fund projects that the Government should be funding
If there were one or two of those categories, no-one would bitch, but having ALL of them landed on you means that your cash doesn't go far.

And the fact that some fat-cats get away with paying none is a pain.....as well as the fact that the Government grants themselves pay-rises and ongoing pensions willy-nilly.......since WE hire them via elections, WE should dictate their pay rate according to their abilities (which, to be honest, is usually pretty lacking).

All of these things are just Public relations tools that right wing 'Low tax' advocates use so they can pretend that they are reducing taxation when in reality they're just reducing the progressive parts of the tax system and massively increasing the regressive taxes, thereby placing far more of the tax burden onto lower and middle income earners.

Houston Griffin

Akrasia wrote:

The court case you referred to is interesting if not terribly depressing. If america gets rid of all of their income taxes....

Mr. Cryer did not convince the jury that federal income taxes are not applicable to wages, he just convinced the jury that he sincerely believed the federal tax laws do not apply to him, thus he was not guilty of willfully refusing to file. That gets him out of the criminal charges of evading taxes, but he will still have to pay the taxes. If he does not, the feds will eventually seize his assets and arrest him.

silverharp

from my understanding the Founding Fathers in the US had a fear of a large central gov. they were also against the idea of a central bank so it could be said the FED is unconstitutional as well as it was never amended.


I posted this comment on another thread but it seems apt here.


n the year 1787, Alexander Tyler (a Scottish history professor at The University of Edinborough) had this to say about "The Fall of The Athenian Republic" some 2,000 years prior:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

"The average age of the worlds greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From Bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage."

Akrasia

silverharp wrote:

from my understanding the Founding Fathers in the US had a fear of a large central gov. they were also against the idea of a central bank so it could be said the FED is unconstitutional as well as it was never amended.


I posted this comment on another thread but it seems apt here.


n the year 1787, Alexander Tyler (a Scottish history professor at The University of Edinborough) had this to say about "The Fall of The Athenian Republic" some 2,000 years prior:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

"The average age of the worlds greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From Bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage."

that only refers to a particular kind of democracy, the 'representative' kind which is designed to eliminate personal responsibility.

We need to evolve past this democratic facade and adopt true democratic ideals. (of course that requires and end of capitalism which is a plutocracy.... how on earth can anyone say that we are living in a democracy when 99% of our relationships are dictated by whoever controls the money