George Will's questions for John Kerry

On 21 Feb 2004 23:48:34 GMT, snipped-for-privacy@aol.com (Bray Haven) brought forth from the murky depths:

Excellent. Remind me to steal it soon.

----------------------------------------- Jack Kevorkian for Congressional physician!

Do a Google search on the 1986 Microsoft IPO and find the stock calculator. $1000 invested in Microsoft stock in the initial IPO price of $21/share is now worth $338,000 and change. Not bad for a college dropout, is it (Gates, that is)?

Mike Eberle> >

And if I had cashed my Cisco stock when I wanted to instead of waiting for the new tax year...... Damn taxes screwed me again.

James.

Yeah, except for the deductions and million dollar accountants taking care of his taxes.... Oh, and the how many BILLIONS of dollars he has?

There we agree for sure. He was able to do things - possibly because of unfair advantages - that you weren't but frankly, that doesn't matter much - life's unfair. I'm no fan of Bill, but I'm less of a fan of unfair taxes. Why should someone more successful pay more? Because they can? Sorry, don't think so.

But why should he pay more? Sure more for his mansion, cars, business property, etc., but personally? Nope. Does he really impose more on the heath system or education system or anything else than anyone else? Don't think so. So why charge him 1000x the amount to fill out the same paperwork? Because he can pay? Nice.

James.

Isn't the VAT European, not just German?

If paying the VAT on top of all the other taxes meant I'd have less money then I'd be against it.

And they should the first against the wall the revolution comes....

We just get screwed up here in Canuck-ville. We get the GST (aka the Gouge and Screw Tax) of 15% and also income tax (mine was about 40%). And that didn't include property tax. After taxes, mortgage, etc., I have about enough money for lunch. And I make a decent wage. How people survive at half the income I don't know.

Is it because of implementation or theory? This is really just a question to get to whether it's useful to have VAT and no income tax (the temporary war tax of the the 1940s) or to have an income tax.

James.

calculator.

Yup. He's the best damned software predator in the business. You can get rich riding on the coat tails of a guy like that, even if his products are crap.

Ed Huntress

Almost all of the developed and developing countries in the world have a VAT. Germany was just a specific example.

You'll note that we, who have no VAT, also have one of the highest per-capita incomes in the developed world, too.

It means you'll have the same amount of money. You can shuffle the cards any way you want, but they're still the same cards. The voodoo economists would have you believe that something magical happens when you replace our current tax structure with a VAT and that magic money appears from somewhere, but, hey, that's voodoo for you.

Send me a postcard when it happens, OK?

I've read very little about your GST but, if I understand correctly, it's a national sales tax, right? That's a consumption tax like a VAT, but it works somewhat differently. Of the two, I'd prefer a straight sales tax to a VAT.

But I'd rather have neither, thanks. d8-)

The big question you're asking is...well, a big question. I will duck out of that one. I've already expressed my disdain for VATs. Not that I like income taxes, but I think they're better than VATs.

Regarding Michigan's VAT, they initiated it some years ago to solve two problems: they needed more revenue than they could extort with a sales tax, which is too transparent and which whaps consumers on the side of the head with a little reminder every time they buy something; and they needed to stabilize state revenues, which were swinging wildly with the automobile industry's ups and downs.

One of the things governments like about VATs is that businesses have to pay them whether they make a profit or not. That's good for government tax stability and predictability but bad for business. In the recent downturn Michigan has been driving some businesses under with the VAT and it's been driving others out-of-state. So they're getting rid of it.

Having traveled in Europe for a world wide company for many years - I know the VAT - value added tax all to well.

The people in Europe largely have manual geared cars due to the VAT tax on an automatic transmission. Vat on out of country products. Vat is in France about 35%. So high that when they come over here to buy at Fry's or such they have the company ship it to the local office over there. e.g. smuggle it in.

A U.S. person buying something in a VAT country can, maybe if you risk it ..., get paid back for the taxes.

I bought a large knife set for my wife - I checked it naturally. And simply lost the money.

Martin

If you'd invested in cattle futures with Hillary, you could've retired in 6 months :o). Greg Sefton

Governments can do that, Germany did between the world wars. But that isn't the way they normally operate. It is a heavy tax on those living on a fixed income, or on savings. It can be a boon for those holding tangible assets, though, as witness the events of the 1970s in real estate, and among those hoarding gold.

Gary

Ah, as in Aesop's fable of the ant and the grasshopper. The prudent ant prospers while the indolent grasshopper perishes.

Ah, the updated Aesop fable where the government seizes the ant's hard earned provender and distributes it to the grasshoppers, thus buying their votes and assuring jobs for government bureaucrats.

Gary

The people who they penalize are the ones who have an uneven income. If person A makes $100K over four years, $25K each year, he is taxed more than person B, who makes $100K over four years, $10K for three years and $70K in the fourth.

This penalizes doctors, who make little money during their decade or so of training, then make it up by earning a lot later. It also penalizes people like actors and musicians, who often hit it big only a couple of times in their life. Small businessmen, too; they normally have uneven incomes.

The point of what I said is that progressive income taxes don't seem to discourage acquisitive people from trying, and succeeding, at acquiring more money.

But, as for people with up-and-down incomes, I've been there most of my life, and tax-averaging has pretty well taken care of it. In fact, I'm surprised at how little better I make out when I tax-average. That's because the tax structure in this country isn't very progressive anymore.

Doctors, though, are not a good example. When they start their careers and have low incomes, they're taxed like low-income people. When they start making a lot more money, they're taxed accordingly. Their incomes tend to be a progression rather than an up-and-down, and the tax structure deals with that without any particular unfairness that I can see.

Ed Huntress

Unless they are farmers Income averaging allows farmers and ranchers to equalize their tax rate over several years income, including losses.

It used to be available to everyone (one time per taxpayer) but apparently not any more.

Glad I used it when I could.

Paul K. Dickman

In general, and in the current US tax environment, I'd agree. Of course, a tax that reduced everyone's after tax income to the same amount would necessarily be a progressive tax. Luckily, our current progressive taxes don't approach that extreme.

What about people that don't aspire to a great deal more income, but are approaching a higher rate tax bracket? Are they discouraged from earning more?

Should people who a pay a higher rate income tax have more say in how the government is run? What about the people that pay no income tax? Should they have any say in how tax dollars are spent?

I know it looks like I'm picking on you, Ed, but that's only because I am.

Seriously, I don't have any good answers to those questions, myself. I'm just wondering if anyone else does.

R, Tom Q.

Somebody chime in here and point out the error of my thoughts, but isn't this how it's *done* right now?

Rich folks purchase politicians, they get elected, and then do what the rich folks want. Makes sense to me.

We have the best politicans money can buy here in the US.

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Actually, our income tax structure is one of the LEAST progressive in the world.

I doubt it. Tax rates are set at the margins. You don't suddenly jump from paying 20% of your income to 25%. If you go over the bracket limit by $100, you only pay the 25% on the $100. That's not a noticable difference.

Are you suggesting that your political rights should be based on how much money you make? I'm not a big fan of aristocracies of wealth. It's a philosophical point, but I tend to agree with the idea that we all should have equal rights.

Ed Huntress

I certainly wouldn't argue against the "money talks" premise, but it seems to me that that would be more or less independent of the tax rate that the "money" pays. Also, my question was fairly ideological - _should_ higher tax rates entitle someone to more say in government? I think that money will continue to talk, regardless of the tax structure.

R, Tom Q.

Good point. I knew that, but I'll admit, it didn't occur to me when I wrote my post.

I didn't intend to suggest anything, only pose a question. I suppose that if that particular point of view hadn't previously occurred to you, then, yes, I'm responsible for planting it in your brain. Or did you misunderstand my question, thinking that I was promoting democracy/dollar? That isn't the case.

I do wonder, though, how paying no taxes would affect someone's vote, or even their propensity _to_ vote.

R, Tom Q.

I'm not sure I even see the distinction now, Tom, but the sublety of your point may well have gone over my head. If you start including or excluding people from the political process based on how much they earn, you've created an exclusionary system that allows one group to make political decisions for another. We had a revolution once upon a time when someone tried to do that to us.

There's plenty of evidence to tell us what the effect is. The 18th-century fear that allowing the poor to vote would result in the poor voting themselves all the wealth never happened. As for their voting tendencies, firstly, they tend not to vote. When they do vote, they tend to vote for candidates who express a desire to help lift them out of poverty.

People who object to our two-party system should take note that a system that drives parties to split the mass vote -- the exact thing that happens with two parties -- also tends to blunt any tendency for one group to exploit the other. When both parties are trying to overlap the center, the fringes tend to be ignored.

So part of the reason we don't have a strong economic-class split in our politics is that a two-party system defuses it.

Poli Sci 301, IIRC.

Ed Huntress