what is a fair tax?

[lildog]

I was listening to a tax discussion recently in which one person pointed out that the tax in question was an unfair tax for whatever reason and this got me thinking about different types of taxes and raised the question of what is a fair tax?

Like it or not along with government comes taxes.  Our constitution does justify taxation and while our government goes far beyond their constitutional roles, there are justified jobs for which they need to collect money.  So what they spend the money on aside, the question is what would be the fairest way to collect taxes.

The main types of taxes I can think of or income (I include any taxes on revenues, inheritance, capital gains etc in this category), sales taxes (including taxes such as gas, alcohol, cigarettes etc), property and flat tax.

After thinking this over I?d have to argue that sales tax would be the fairest form of tax (saying it was done on a national level) for a couple reasons.

First of all on a state by state level it doesn?t work.  Anyone on the Mass boarder can see that as people flock over to NH to purchase larger items.  But on a national level it would tax people on what they can afford.  If necessities were tax free those struggling to get by would be able to spend on what they need and wouldn?t have money they couldn?t spare be taken from them at the point of a gun.

Income tax doesn?t work because it rewards criminal behavior.  Illegally earned money or getting paid under the table allows people to avoid taxes.

Property taxes can fluctuate with the value of a home so an elderly person who?s lived in the same home 50 years may find the value of their home due to being in a ?prime? location has gone up such that they can no longer afford the taxes on a fixed income.

Same problem would go with a flat tax depending on how it was levied.   I?ve heard the argument that if you take the national budget and divide by every man woman and child it comes to be about $6,000 per person so we each should pay $6,000 for everyone in our homes.  Again, that $6,000 would be far less for the average single male but for an elderly person on a fixed income they may not be able to afford it.  Not to mention those struggling families would be pushed right over the edge.

So without getting into the discussion of what the government is spending money on what are your thoughts as far as what would be the fairest way to collect taxes?

[tracysaboe]

There really is no such thing as a fair tax. All methods of taxation hurt some people more then others.

We really shouldn't be worrying about fairness. It's overrated. Liberals will be worrying about fairness enough. It's our job to try and reduce them whenever and whereever we can.

Tracy

[Lex]

No tax is fair! All taxes require men with guns to come and rob you.

[Lex]

Like it or not along with government comes taxes.

Get rid of government and taxes go away. 

[GCG199]

Great points in response so far!

[GT]

"without getting into the discussion of what the government is spending money on"

There is no point to discussing what is "fair" if we have virtually no say in what is done with our money.

[Lex]

"without getting into the discussion of what the government is spending money on"

There is no point to discussing what is "fair" if we have virtually no say in what is done with our money.

And even if we did get to vote on it it would still be mob rule and we wouldn't be deciding what happens to our specific contribution.

I just don't understand what is the fetish of forcing people to pay taxes and then figuring out what to do with the money instead of having people pay directly. If you want police protection you pay the police if you want fire protection you pay the fire department. We are allowed to do this with insurance, why not other things?

[tracysaboe]

A free market in fire protection.

You would have competing companies that offer subscription services to people. Each service would probably be rated by independent consumer reports and papers and word of mouth etc. homeowner Insurence companies would charge lower premiums for people who had fire protection services that the insurence company deemed worthy -- the same way they charge lower premiums if you have fire alarms and things. You'd probably still have the all volentere fire depts that anybody could call providing charety services.

Tracy

[lildog]

If you want police protection you pay the police if you want fire protection you pay the fire department. We are allowed to do this with insurance, why not other things?

Sorry but that?s just absurd!

There are certain things that need to be done on a community level.  Police and fire are one of those things.

Let me give you a situation.  You?re a well off person.  Since you have expensive security alarms on you home, own a gun for self-protection, etc you see no reason to pay police for additional protection.

You?re only living relation is your wife.

She, knowing you don?t pay for the police, decides she wants to hook up with the hot pool guy and ditch you.  She also doesn?t want to give up the house, the pool, the bank accounts etc. so she offs you.

Who?s going to investigate your murder?  She sure as heck isn?t going to pay for police to look into what happened since she already knows.

So you?d be find with her walking away from your murder free as a bird?

And let?s look at one additional situation? you?re no longer the guy she offed but the NEXT guy she hooks up with.  Had we a public police department they may have caught her but since the first guy didn?t think to hire them in advance they aren?t looking for her? now she hooks up with you and after a couple months gets board of you and offs you.  See the problem here.

[Lex]

Sorry but that?s just absurd!

There are certain things that need to be done on a community level.  Police and fire are one of those things.

Let me give you a situation.  You?re a well off person.  Since you have expensive security alarms on you home, own a gun for self-protection, etc you see no reason to pay police for additional protection.

You?re only living relation is your wife.

She, knowing you don?t pay for the police, decides she wants to hook up with the hot pool guy and ditch you.  She also doesn?t want to give up the house, the pool, the bank accounts etc. so she offs you.

Who?s going to investigate your murder?  She sure as heck isn?t going to pay for police to look into what happened since she already knows.

So you?d be find with her walking away from your murder free as a bird?

And let?s look at one additional situation? you?re no longer the guy she offed but the NEXT guy she hooks up with.  Had we a public police department they may have caught her but since the first guy didn?t think to hire them in advance they aren?t looking for her? now she hooks up with you and after a couple months gets board of you and offs you.  See the problem here.

Sorry but your arguments are very typical and have been torn apart many times in many different places. If you really want to learn how an anarcho-capitalist society works I suggest you read up on mises.org and lewrockwell.com they have a huge amount of work on this subject.

To get you started: http://www.mises.org/rothbard/newliberty11.asp

Excerpt:

"But how could a poor person afford private protection he would have to pay for instead of getting free protection, as he does now?" There are several answers to this question, one of the most common criticisms of the idea of totally private police protection. One is: that this problem of course applies to any commodity or service in the libertar?ian society, not just the police. But isn't protection necessary? Perhaps, but then so is food of many different kinds, clothing, shelter, etc. Surely these are at least as vital if not more so than police protection, and yet almost nobody says that therefore the government must nationalize food, clothing, shelter, etc., and supply these free as a compulsory monop?oly. Very poor people would be supplied, in general, by private charity, as we saw in our chapter on welfare. Furthermore, in the specific case of police there would undoubtedly be ways of voluntarily supplying free police protection to the indigent?either by the police companies themselves for goodwill (as hospitals and doctors do now) or by special "police aid" societies that would do work similar to "legal aid" societies today. (Legal aid societies voluntarily supply free legal counsel to the indigent in trouble with the authorities.)

There are important supplementary considerations. As we have seen, police service is not "free"; it is paid for by the taxpayer, and the taxpayer is very often the poor person himself. He may very well be paying more in taxes for police now than he would in fees to private, and far more efficient, police companies. Furthermore, the police companies would be tapping a mass market; with the economies of such a large-scale market, police protection would undoubtedly be much cheaper. No police company would wish to price itself out of a large chunk of its market, and the cost of protection would be no more prohibitively expensive than, say, the cost of insurance today. (In fact, it would tend to be much cheaper than current insurance, because the insurance indus?try today is heavily regulated by government to keep out low-cost com?petition.

[tracysaboe]

If you want police protection you pay the police if you want fire protection you pay the fire department. We are allowed to do this with insurance, why not other things?

Sorry but that?s just absurd!

There are certain things that need to be done on a community level.  Police and fire are one of those things.

Let me give you a situation.  You?re a well off person.  Since you have expensive security alarms on you home, own a gun for self-protection, etc you see no reason to pay police for additional protection.

You?re only living relation is your wife.

She, knowing you don?t pay for the police, decides she wants to hook up with the hot pool guy and ditch you.  She also doesn?t want to give up the house, the pool, the bank accounts etc. so she offs you.

Who?s going to investigate your murder?  She sure as heck isn?t going to pay for police to look into what happened since she already knows.

So you?d be find with her walking away from your murder free as a bird?

And let?s look at one additional situation? you?re no longer the guy she offed but the NEXT guy she hooks up with.  Had we a public police department they may have caught her but since the first guy didn?t think to hire them in advance they aren?t looking for her? now she hooks up with you and after a couple months gets board of you and offs you.  See the problem here.

Lildog, ultimately your responce is a socialist one. You say poor people wouldn't be able to afford basic protection. In principle this argument isn't any different from the arument that poor people couldn't afford food. But we all know that the freer the food markets the cheeper food is and the easier it is forpoor people to have it and the cheeper it is the run charities to help the feew that truly can't.

The fact is their are already private charaties that help provide protection because the cops are incompetant or if they're not, care more about protecting their turf then actually protecting people. Many churches and charities offer shelters for instance funded by donations and their are many organizations that donate legal services to help people sho can't afford it, from the ACLU to the NRA, and the Ruthaford foundation.  How much more money would be availible to these organizations who provide these sorts of charities if money wasn't diverted by force into protection and legal socialism.

That really wasn't your question though. It was "what is a fair tax." And the fact is, the only way for a tax to be fair is for it to be nonexistant. So if you want socialised protection and legal services, unfair taxes are something that you're going to need to live with.

Tracy

[Russell Kanning]

You?re only living relation is your wife.

She, knowing you don?t pay for the police, decides she wants to hook up with the hot pool guy and ditch you.  She also doesn?t want to give up the house, the pool, the bank accounts etc. so she offs you.

Who?s going to investigate your murder?  She sure as heck isn?t going to pay for police to look into what happened since she already knows.

Your drinking buddies can avenge your murder.

What happens if your wife kills you and pays off the cops to not do anything?
What if your wife kicks you out of the house and uses the courts and the cops to keep you away from your kids and possessions? Oh yea ..... then you would be me.

I can think of very little situations where I wished I could use the governments power but many where I wished noone else could use it.

[vermass]

        "What if your wife kicks you out of the house and uses the courts and the cops to keep you away from your kids and possessions? Oh yea ..... then you would be me."
       That sucks Russell.
       About fifteen years ago I had something similar happen to me. I decided I didn't like my (first) wife so I separated from her. She came to where I was living while we were separated and started a fight (verbal). When it was over she got very mad at me and said "if I wanted to I could get a restraining order on you and you'd never see your kids!" I responded by saying she couldn't because I'd never "laid a hand on you or the kids". She responded by saying I can, my lawer said I could but I said no, now watch me. The next day I got a call from my lawyer. It was done. Without me ever steping into a courtroom I was convicted of the crime of stupidity believing that our justice system has anything to do with justice. My lawyer explained that the restraining order was "mutual" and niether of us was to be within 1000' of the other. I than explained that when she came home from getting said restraining order she so badly needed, she'd violated it because we lived within 1000' of each other! Didn't matter, that's not really what it means. Huh? Honestly even if my house was broken into or car stolen, I'd only report such events as a pre-emptive strike to keep ME from being somehow incriminated in something R/T the theft or the goods stolen from me. I've absolutly no faith in our crminal justice system! It's an us against them mentality and THEY started that. The cops and judges are part of an organized crime syndicate known as the US government. I feel safer around gangsters than cops.

[Russell Kanning]

So I guess Vermass doesn't like paying taxes either.

[Ron Helwig]

My answer to the question...

Assuming you actually need taxes and government, I would be most in favor of the land tax, as I believe it is the most fair and most moral.

The income tax is essentially a tax on the sale of your labor, so everything wrong with a sales tax is also wrong with an income tax.

A sales tax requires the government to inject itself into what would otherwise be voluntary transactions. It requires recordkeeping and puts you in the position of proving your innocence (as opposed to them proving your guilt).

A sales tax also requires a police state, since the very existance of the sales tax creates a "black market" (which should be called a white market) that must be combatted.

A tax on property can be considered a retroactive, and continuing, tax on your labor. (Your labor was required to earn the property)

I agree that it is more important to try to keep taxes low than it is to find a "fair" tax. That's why its important to try to have as few types of taxes as possible. Fewer tax types makes it easier to watch the bastards.

A general sales tax is hard to keep low because at any particular time the "bite" is small. That's an advantage of a land tax - you typically see just how large the bite is.