Capitolism: Harnessing the Power of Stupid

[jsorens]

Jsorens,

I disagree with a great deal of what you posted, but as I said, we are well beyond the point where we are wasting each others time.

I will ask this though.

Do you care to confirm my suspicion that you either own a business or live off of income from investments?  You say that there is no moral or financial distinction between a sales tax and an income tax, I sincerely doubt that anyone working for a weekly or monthy paycheck would make that assertion.

Feel free to prove me wrong.

Heh, heh. Nope! Never assume bad faith on the part of your interlocutors.

[EthanAllen]

In essence you are attempting to distinguish a form of individual secession within the shell of "society" (this is the old anarchist dual power strategy). I am not sure you understand the dynamic of economic rent yet though and how exclusive use of land in an inelastic scarcity market forces costs on those being excluded but then again you don't seem to start from the premise of self-ownership and as it's natural extension labor as absolute either.

[jsorens]

In a realistic, modern-day society similar to the one we live in, having merely to subsist on the bare necessities of life is an unconscionable choice that no one would make. That's not a life worth living. And as I pointed out, the sales tax would still harm your ability to earn the money to buy those bare necessities of life. So this "choice" is not a meaningful one in the sense of increasing liberty. With an income tax rather than a sales tax, you could at least barter and trade for cash to avoid/evade taxes. This is what Russell does; his no-tax lifestyle would not be possible in a state that charged him sales taxes. So you could equally well make the case that income taxes harm liberty less than sales taxes.

But my point is not that income taxes are better than sales taxes. My point is that it depends. It is an empirical, scientific question that can only be resolved by evidence; it is not an a priori, philosophical question. We have to investigate empirically which kinds of taxes are less harmful for desiderata such as economic development, social mobility & opportunity, & sense of individual autonomy & freedom.

It is worth pointing out in this regard that all studies that I've ever seen on state taxes have shown that sales taxes are more regressive than income taxes, even the ones that exempt things like groceries. That is, sales taxes harm the poor more than the rich, while income taxes do the reverse. Now, this isn't the only or even most important thing to consider when putting together a tax policy proposal, but it is somewhere on the hierarchy of desiderata.

Perhaps my personal experience does have some bearing on this question. Growing up in an urban, single-parent family at or below the poverty line, we never paid income taxes, state or federal. But we paid sales taxes. Even though groceries were exempt, there are other things that a sales tax always hits that are essential to a minimally decent life: clothing, shoes, materials for home repair, an occasional prepared meal at the local burger joint. (States found out really quickly that they can't tax just luxury items like yachts and jewelry, because these things have very elastic demand, meaning that sales plummet if the price goes up too much. The Laffer Curve bites much harder on luxury sales taxes than on personal income taxes.)

However, I think that experience growing up actually matters less for my position here than my experience with libertarian types. Libertarians can be extraordinarily mulish, tightly holding onto their preconceptions and pet theories. I try to get people to be much more broad-minded and see the various ways of looking at things, even if they're not prototypically libertarian. Sometimes that gets me into trouble around here. But I'm just happy if people realize that things aren't always as they seem, and good, scientific investigation gets you a lot further than Ayn Rand-style knee-jerk reaction.

[jsorens]

My proposition is that a sales tax that exempts survival goods provides a means for an individual to opt out of the social fabric in protest, where an income tax does not provide that option.  No amount of empirical study will disprove that.

Wow. Be glad you're not one of my students! This is exactly the type of mentality I was talking about: "I'm right, and no amount of proof will ever dissuade me."