Jump to content
Objectivism Online Forum
Guest RationalEgoist

Evidence Most Americans May Not Be Income-taxable

Rate this topic

Recommended Posts

And there in a nutshell is the state of the public's views on taxation.

EEEschh... That guy was bad. The problem is that you were debating Politics when you should be debating Ethics, when you should be debating Epistemology. I find that all such discussions eventually lead to Epistemology, and if the impasse is reached, its usually when someone says, "No one can know anything!" or "I can't explain it to you, you just have to feel it."

Anyhoo, I was thinking about this whole tax thing and trying to find loop holes and what it would mean if say, income tax was found to be unconstitutional. Given the current state of affairs, it would be catastrophic if that happened and the only result would be a consitutional ammendment making income tax constitutional, further entrenching itself into our law. We have to change the culture, before changing the society; just like in argument, where Politics is derivitive, so in practice, its changes are only as effective as the culture will absorb.

Share this post


Link to post
Share on other sites
Given the current state of affairs, it would be catastrophic if that happened and the only result would be a consitutional ammendment making income tax constitutional, further entrenching itself into our law.
Historically entirely correct. That was what happened in the case Pollock v. Farmers' Loan & Trust Co, and the 16th Amendment was ratified 18 years later.

Share this post


Link to post
Share on other sites
Anyhoo, I was thinking about this whole tax thing and trying to find loop holes and what it would mean if say, income tax was found to be unconstitutional. Given the current state of affairs, it would be catastrophic if that happened and the only result would be a consitutional ammendment making income tax constitutional, further entrenching itself into our law. We have to change the culture, before changing the society; just like in argument, where Politics is derivitive, so in practice, its changes are only as effective as the culture will absorb.

Absolutely. Tax policy is just one piece of politics which sits at the end of a long chain of metaphysical, epistemological and moral choices and assumptions. If the entire foundation is rotten, how can you possibly expect it to support a proper view of government and its relationship with the individual?

By the way, I work for an accounting firm, although I'm not an accountant. Nevertheless, I'm around this stuff enough to know that if you don't pay your taxes, they'll put you in jail. It's that simple.

Share this post


Link to post
Share on other sites
Nevertheless, I'm around this stuff enough to know that if you don't pay your taxes, they'll put you in jail. It's that simple.
So are they lightening up? I thought the SOP was to confiscate your stuff and put you in jail.

Share this post


Link to post
Share on other sites
So are they lightening up? I thought the SOP was to confiscate your stuff and put you in jail.

Oh they definitely do that as well. They have all sorts of penalties and interest charges that they tack on to the original amounts owed. There usually isn't much left when they're finished with you.

Share this post


Link to post
Share on other sites
Oh they definitely do that as well. They have all sorts of penalties and interest charges that they tack on to the original amounts owed. There usually isn't much left when they're finished with you.

Correct. And an alarming number of people emerge from prison after serving 5 years on 'tax evasion' charges, owing hundreds of thousands of dollars in interest on their taxes, on top of the original taxes. So they come out of prison with a felony record, unable to get a decent job, hundreds of thousands in debt, and when they can't pay, it's right back to prison. Nice, eh?

Share this post


Link to post
Share on other sites

I think the focus of this is all wrong. We should not try to remove the income tax yet, but go after Social Security. Society Security is much more evil then taxes. Some taxes go to the good, like military, and police. Social Security, on the other hand, is a straight monitory exchange from one individual to another (less the government fees). It should be much easier to remove society security, now, then it is to remove taxes.

Share this post


Link to post
Share on other sites
I think the focus of this is all wrong. We should not try to remove the income tax yet, but go after Social Security. Society Security is much more evil then taxes. Some taxes go to the good, like military, and police. Social Security, on the other hand, is a straight monitory exchange from one individual to another (less the government fees). It should be much easier to remove society security, now, then it is to remove taxes.
But a vastly higher percentage of the money taken under SS is eventually returned to its owner. Other forms of taxation are pure redistribution of wealth (not enforced savings) except for the small bit spent on the proper function of government. By your reasoning that we should eliminating the greater tax evil first before eliminating the lesser tax evil, you should advocate eliminating all taxes except SS.

Share this post


Link to post
Share on other sites
I think the focus of this is all wrong. We should not try to remove the income tax yet, but go after Social Security. Society Security is much more evil then taxes. Some taxes go to the good, like military, and police. Social Security, on the other hand, is a straight monitory exchange from one individual to another (less the government fees). It should be much easier to remove society security, now, then it is to remove taxes.

Removal of the SS tax would have to be phased in, since people who paid into it are expecting to get something back out when they retire.

This year's SS statement, on the front page, states that the fund may not be solvent by year 2040. A first for the government to admit.

Ultimately baby boomers will be responsible for their own retirement.

At last Saturday's training where I work in financial services, we had a guest speaker who related a shocking anecdote:

30 years ago, his parents bought a house for $38,000. Last year, HE bought a pickup truck for $42,000. This year a starter home is $250,000 (extreme lowball figure for around here). In thirty years, by projection, a new Honda Civic will cost $250,000. How much will you have saved up for retirement? In light of this, those age 35 now, who project having a million dollars by age 65, will find that they will have to go back to work by age 67. A million dollars won't buy much. A starter home will cost around $4,000,000. Scary thought indeed!

Share this post


Link to post
Share on other sites
Removal of the SS tax would have to be phased in, since people who paid into it are expecting to get something back out when they retire.
Well, although I disagree that SS should necessarily be the first to go, this isn't a valid argument for not eliminating SS instantly. First, that's an entirely irrational expectation. Second, that's an entirely irrelevant expectation, because we could instantly end SS and start processing proportional refunds. Third, the same logic says that we should keep taxing people for other services since people who pay tax money have come to expect to get all sorts of stuff back in the form of government entitlements.

Share this post


Link to post
Share on other sites
Well, although I disagree that SS should necessarily be the first to go, this isn't a valid argument for not eliminating SS instantly. First, that's an entirely irrational expectation. Second, that's an entirely irrelevant expectation, because we could instantly end SS and start processing proportional refunds. Third, the same logic says that we should keep taxing people for other services since people who pay tax money have come to expect to get all sorts of stuff back in the form of government entitlements.

I agree, up to a point. However, with SS, people specifically believe that this is a savings account for their retirement and many have no other retirement plan going. So if the government one day tells all of us seniors to go pound sand, I would imagine the people would have pretty good reason to take to the streets with pitchforks and shovels in a demonstration. We paid in, and we expect to get something back. It is a closed-loop agreement, albeit unilaterally enforced.

The issue with general taxation is different. Stopping of other government services is not going to stop the income of most people. But to a retiree who is 100% dependant on that check from Uncle Sam? Catastrophic!

I would phase it out over a generation by announcing that people born after such and such year will not pay into the system and will not receive benefits. Naturally, this will create a deficit, but the government has a moral obligation to support the elderly who paid into the system with the promise of a retirement income from SS. To stop that abruptly would be violating a promise and would cause untold strife for the elderly.

Share this post


Link to post
Share on other sites
But a vastly higher percentage of the money taken under SS is eventually returned to its owner.

It's not that much higher(if at all) if you factor in the time value of the money. They take 15% of your income. (Your employer "pays" 1/2 of that, but it really is coming from your pay) I calculated it out. At $40,000/year over 40 years, if you were to invest that with even an 8% return it comes out to $2 million($5 million if you get the 11% that the dow jones has averaged for 80 years) which would yield you an income of $160,000($550K at 11%) a year or $13k/month($46,000/month at 11%) and in all likelyhood leave some for your kids when you die. Social security, by comparison, pays out $1200/month-ish and steals everything else when you kick off. So essentially you get 10% or less of the income and loose the entirety of the principal. It's history's biggest ponzi scheme.

Share this post


Link to post
Share on other sites
It's history's biggest ponzi scheme.
Nevertheless, you get virtually nothing back from the huge sums that you pay in ordinary taxes. They take twice as much of your income, and do not even come close to returning an analogous portion. The point is not that SS is a good investment, bur rather that income taxes are no kind of investment at all, and that you get almost no return benefit whatsoever.

Share this post


Link to post
Share on other sites
Nevertheless, you get virtually nothing back from the huge sums that you pay in ordinary taxes. They take twice as much of your income, and do not even come close to returning an analogous portion. The point is not that SS is a good investment, bur rather that income taxes are no kind of investment at all, and that you get almost no return benefit whatsoever.

I have no knowledge of the US budget and cannot claim anything with authority, but I would think that there is significant cost related to military,police, and courts, plus roads and subsidies to farmers, etc which all "benefit" me to some extent. I really don't mean to defend the federal income tax in anyway. It just seems to me that since, if you live 10 years past retirement you get maybe 1% back from social security. By comparison, I could concievably be getting 1% back from the use of roads and what not. So to clarify, I'm not saying that Fed Income Tax is good...just that from a % return on investment view, I doubt it's worse. -Except that it is twice as much that they steal in that instance. Social Security and medicare should catch up though within the next 20-40 years.

Share this post


Link to post
Share on other sites
I agree, up to a point. However, with SS, people specifically believe that this is a savings account for their retirement and many have no other retirement plan going. So if the government one day tells all of us seniors to go pound sand, I would imagine the people would have pretty good reason to take to the streets with pitchforks and shovels in a demonstration. We paid in, and we expect to get something back. It is a closed-loop agreement, albeit unilaterally enforced.

The issue with general taxation is different. Stopping of other government services is not going to stop the income of most people. But to a retiree who is 100% dependant on that check from Uncle Sam? Catastrophic!

I would phase it out over a generation by announcing that people born after such and such year will not pay into the system and will not receive benefits. Naturally, this will create a deficit, but the government has a moral obligation to support the elderly who paid into the system with the promise of a retirement income from SS. To stop that abruptly would be violating a promise and would cause untold strife for the elderly.

What people wrongly believe does not give them a claim on others productivity. When they started it, the average lifespan was 65. Coincidentally, the same age as retirement. The 1% people had to pay for the elderly in 1935 was a welfare program that that generation started and now feel a sense of entitlement to 15% of my income and probably 30% of my childrens. So let em grab their pitchforks...its what they should have done in 1935 anyway.

But you don't have to worry. Old people love to vote, so the only changes that occur to it are going to be increases in the % of taxation, until it bankrupts the country or itself.

Share this post


Link to post
Share on other sites
It just seems to me that since, if you live 10 years past retirement you get maybe 1% back from social security. By comparison, I could concievably be getting 1% back from the use of roads and what not.
Another point of comparison is that you "get" from generic welfare state largesse regardless of and sometimes inversely in regards to what you pay in, but with SS if you don't pay in you don't get anything back). Thus there is a real free rider problem with most tax funded programs.

You see, the only rational solution is to end all coercive taxation, and not try to prolong the taxation for certain ill-computed kinds of "more beneficial" taxes.

Share this post


Link to post
Share on other sites

Why do people pay income tax? It's unconstitutional. What would happen if not a single American filed this year? They'd try to jail 300 million people?

Share this post


Link to post
Share on other sites
Why do people pay income tax? It's unconstitutional. What would happen if not a single American filed this year? They'd try to jail 300 million people?

The 16th amendment only exists for one reason: to circumvent a Supreme Court ruling (Pollack).

The Penn Mutual case

Although the Sixteenth Amendment is often cited as the "source" of the Congressional power to tax incomes, at least one court has reiterated the point made in Brushaber and other cases that the Sixteenth Amendment itself did not grant the Congress the power to tax incomes (a power the Congress has had since 1789), but only removed the requirement, if any, that any income tax be apportioned among the states according to their respective populations. In the Penn Mutual Indemnity case, the United States Tax Court stated:

In dealing with the scope of the taxing power the question has sometimes been framed in terms of whether something can be taxed as income under the Sixteenth Amendment. This is an inaccurate formulation [ . . . ] and has led to much loose thinking on the subject. The source of the taxing power is not the Sixteenth Amendment; it is Article I, Section 8, of the Constitution.[31]

And Article I, Section 8, of the Constitution reads as follows:

Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

I don't want to try to imagine the consequences of 300 million people not paying their income taxes, and the US then either defaulting on its debt or printing up fiat money. It would be a disaster. The trouble would be far worse than the cost of the taxes.

Share this post


Link to post
Share on other sites
I don't want to try to imagine the consequences of 300 million people not paying their income taxes, and the US then either defaulting on its debt or printing up fiat money. It would be a disaster. The trouble would be far worse than the cost of the taxes.

The US existed and managed long before there was income tax. Printing fiat money is already happening.

I didn't know my post had been moved. Just found out.

-PKD

Share this post


Link to post
Share on other sites
The US existed and managed long before there was income tax. Printing fiat money is already happening.

The problem is that going "cold turkey" would cause an economic collapse. Government debt would have to be retired over time and taxes lowered as non-essential services were eliminated. As Grames said, the consequences of a general default on US Government obligations would be disasterous.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...