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Some legislators in this great state are talking of a two step…..flat tax. Sound familiar Advisors? It would be 2.75% for a single person up to $26,000 per year or a couple at $56,000. 6.50% for those above $56,000. Some idea I had last week huh ? They propose higher taxes on certain business elements. This will gain ground and will be a way to normalize the fluctuations in taxes collected according to the experts. We need to balance this big old budget. Otherwise split the state into three parts.
More details to come. Remember things generally happen in California first. As hard as that is for you easterners to fathom.This commission was established by the Governor and the Democratic leaders charged with ways to end "years of topsy turvy budgeting that have left the state in a wreck" Key elements. The 2.75% income tax for wages up to $56,000 and 6.50% for incomes over that amount. A standard deduction of up to $45,000 allowing for a low income reduction on taxes. Personal deductions would be limited to mortgage interest , property taxes and charitable contributions. Phase out the state’s portion of the sales and use tax over five years at 1% per year.Eliminate the corporate levy tax on businesses.Create a business net receipts tax. This would be accomplished by subtracting a firm’s purchases from the total sales revenue.This probably would increase taxes on corporations doing business in California.Create a 12.5% rainy day fund which is now at 5% . Probably a good way to start the conversation. The biggest hurdle will be the tax on corporations which if set low enough will bring business back to California. I really think the commission should also look at ways to reduce six figure pensions for people and the excessive salaries for fireman , prison guards and school administrators who all exceed six figures. Should people make a decent wage ? Of course. Six figures for some of these jobs with pensions in the high five and six figures is fiscally irresponsible. Trust me when I say some of these unions have a truckers hold on politicians like Jimmy Hoffa and the teamsters.I’m a big believer in using the tax code to nudge us to goodness and virtue with deductions and rebates for investment in productive assets, environmental investments, health insurance for employees, and onerous taxes on the things we want to stop or reduce, (gasoline, alcohol, cigarettes, beating your dog).
Flat tax takes away all those useful tools. Is "Simple" better than "Useful"? I’m not convinced.
As for the details and percentages of the California plan…..no opinion.A tax is set to pay for neccessary items. Not to find a way to spend more. A flat tax should bring some responsibility to the spending done by the tax and spend creeps.Simple is better than useful and holds politicians accountable when they think they need more money. A very good program.Get used to spending less on self esteem programs for gang members my friend.A "Flat Tax" handcuffs the government to spending only what they can bring via tax revenue and in doing so put the onus on government to stimulate the economy so the "proletariat" earn more in order to pay more tax !!!
There’s the rub … Republicans believe in the wisdom of the people knowing what to do with their hard-earned income … versus the Democrats who believe government has all the answers !!!
The evil of our tax system is that it allows the government to deficit spend us into generational bankruptcy past our own !!!
I firmly believe that there are few true "entitlements" which should be intrinsic to Americans (i.e. health care, quiet enjoyment of a domain, safety of all types) and for which our tax dollar should be "hand-cuffed" to …
I also do not understand "sin tax" encumbrances to products for which we subsidize the base elements like tobacco & alcohol … take away the "pork" and become lean enough to cancel the allure of foreign companies who are taking away our manufacturing base !!!
Bringing the back to our Industry …
How can we ever expect to be able to compete with foreign companies if our manufacturers, distributors, retailers, sales associates, & delivery services are taxed into oblivion ???
Think of it, the vicious circle of American business is only broken by lower overhead … if the consumer base is taxed to the point where they can no longer afford what they produce the only answer is to go where the bottom line is well below what it is presently, but in doing so, that consumer base might very well have to lose their job !!!
Self-defeatism encarnate !!!
Advisor … while I may disagree with your earlier assersion that tax deductions should continue as a means of manipulating behavior, I completely agree that this is a dead issue that deserves even less debate than the proverbial chicken and egg.
Advisor, it is unlikely you and I will agree on economics and public policy. I support a flat tax for exactly the reasons you stated above. No person or group should have that type of power in this country. Make laws to punish to protect society and dogs. The tax system should never be used in this manner, but it is all the time. Consider these scenarios. Scenario 1: Cass Sunstein (our brand spanking new regulatory czar) has what I have stated in an earlier post some pretty radical views on Animal Rights. (Coincedently, he wrote a book titled Nudge that advocates just what you have said above which creeps me out that he is the regulatory czar. It sounds like you have read it). He believes animals should be able to bring suit against humans. My guess is he does not eat meat. My guess is that he would like it if I did not eat meat too. Outlawing meat is a pretty outrageous thing to do. Unlikley that you could get that passed, even through a congress that doesn’t read the bills they vote on. Well, as the regulatory czar, all I have to do is "nudge" the public in the right direction. Move that meat to "a higher shelf" if you will. After all, too much meat is "bad" for you right? It is for your own good. So I just Increase regulation on cattle farms. Increase taxes on meat. Increase taxes on supplies farmers would need to feed and care for cattle. Now, a crappy Ponderosa steak sells for $50.00 and the amount of meat eaten is greatly reduced. For what it’s worth, I believe this is the intent with healthcare. Start with a small harmless public option and regulate the competition to death. Scenario 2: Now suppose a few years down the road we have a fundamentalist christian administration that believes that business should not be done on Sundays. Outlawing business on a Sunday is pretty radical, but again, simply institute some special Sunday regulation, tax business or revenues collected on Sunday at a higher rate, charge a special operating fee (tax) similar to what is done to bars and restaurants in some states and you can greatly reduce the amount of business done on Sunday. After all, Sunday is the Lord’s day. it’s for your own good. I think you need the day off. Being that both our political parties are controlled by the fringes these days, the more dangerous our current system is. One mans virtue is another mans oppression. I should be the one to decide what is virtuous for my own life and so should you.
Hadn’t read his book. Just trying to be funny, not manipulative.
Outlawing business on Sunday? Have you been to Italy? Stores are closed in the mornings, 2 hours for lunch, closed at 8PM for the evening, on Saturdays after lunch, and all day Sunday. We should be so lucky as to be as oppressed as the Italians. Over turning the blue laws, and allowing shopping on Sunday, 24 hour stores, gas stations with food, supermarkets with alcohol, department stores with food, all of it, terrible, terrible. These changes wiped out one of the greatest things about America. They wiped out the small business owner, and destroyed small town centers across the country. They turned us into Big Box butt heads who feel the need to buy 57 rolls of toilet paper at a time. Mookie!!! If shopping on Sunday is freedom, I’ll take oppression.I’m pretty sure that wasn’t your point.
When you coax people to do things in the tax code not in regulation, people have a choice. That’s freedom. Freedom to make the change they want you to make or not to make the change they want you to make.
Don’t tax soda? Hell no! Tax the fat stubby legged tick children who drink it.I have long firmly believed that the relative abolition of the "Blue Laws" evolved because of the "Transactional Analysis" expressed in writings such as Thomas Harris’ 1969 book: "I’m OK, You’re OK" … and … the ancillary assumptions made by we enlightened "Baby Boomers" having endured and survived the Cold War, Vietnam, etc. …
"What the heck is he talking about ???" I’m sure you just asked … well, here goes …
You see, that generation is who makes decisions and installs them in today’s society … we no longer recognize the value and sanctity of a day off or even Saturday night off because we have so crammed our schedules with so many activities (some ridiculously inane) that we no longer have the time to shop for everything from groceries to domestics … and the result is an overworked, always exhausted, and tragically rude society !!!
Why is it necessary to have 24/7 grocery stores, home repair centers, and even fast food eateries (no, they are not restaurants !!!) ??? Simply because we need more time because we are pursuing so many activities that we are stretched for time that we have stolen it family, church, relaxation, and even sleep time … and rationalized our actions to justify it …
To man these enterprises we have created a new lower class who vapidly check us out @ the register, pump our gas, and stuff fast-food thru "after midnight" drive-up windows !!! All because we no longer take the time to stay home and cook for our families … and … spend valuable time with other family members …
Yes, we now have the technology to illegally conduct telephone conversations while driving from one venue to another because of cell technology … we can also eat @ the same time … and even gas the car !!! All to the detriment of our stomachs and sanity …
So, how does "I’m OK, You’re OK" factor into this ??? Simply by encouraging such conduct and never allowing anyone to criticize another for such detrimental lifestyles … it also creates the idea of anything goes as long as it does not affect oneself, when, in essence, it most certainly does !!!
I agree with Advisor who has correctly observed that we should covet the "oppression" the Italians endure in favour of a more grounded, gentile, family centered, and neighbourly pleasant society to live and work in !!!
In your comment from the above,
"Scenario 2: Now suppose a few years down the road we have a fundamentalist christian administration that believes that business should not be done on Sundays."
I believe you have overlooked one very rudimentary fact … that is that if such an administration were to be elected and duly installed, they would have been so by a majority of the citizens who actually vote !!! Therefore, their decisions would be made by and in the "representative republic" we live in … and … under which we derive our laws and many social mores … NOT the multiple microcasm we have had formulated for us by the "I’m OK, You’re OK" generation (please see my comments elsewhere in this topic to understand my contentions …) …
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