Where is the US economy headed?

Cycloptichorn wrote:

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P.S. I notice you choose to shift the argument from progressive taxes vs regressive taxes because you have obviously lost that argument. Apparently you cannot bring yourself to eat the crow. Try it, everyone has to sometime in life.

No, I won that argument. Perhaps you could link to the area where you think I lost. I seem to remember that you dropped many of my points, which normally means that someone loses the argument.

Cycloptichorn

You lost several times, but when you claim that exemptions and deductions do not help make the income tax progressive and when you claim exemptions of food and other necessities would not make a sales tax progressive, you utterly showed total ignorance concerning a very, very simple concept. You lost big time. Eat the crow.

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okie wrote:

Cycloptichorn wrote:
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P.S. I notice you choose to shift the argument from progressive taxes vs regressive taxes because you have obviously lost that argument. Apparently you cannot bring yourself to eat the crow. Try it, everyone has to sometime in life.

No, I won that argument. Perhaps you could link to the area where you think I lost. I seem to remember that you dropped many of my points, which normally means that someone loses the argument.

Cycloptichorn

You lost several times, but when you claim that exemptions and deductions do not help make the income tax progressive and when you claim exemptions of food and other necessities would not make a sales tax progressive, you utterly showed total ignorance concerning a very, very simple concept. You lost big time. Eat the crow.

Sorry, but I've proven you wrong on this issue more than once. There is a real difference between the overall level of taxation and the individual levels of taxation. For example, the overall level of taxation that we currently face is Progressive, thanks to exemptions and inherently progressive taxation such as our income tax. But the individual taxes themselves don't change just because you exempt certain people from them.

Cycloptichorn

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The debate is over, but in an attempt to figure out why you are confused, when you mention overall level of taxation, are you referring to the income tax code, or all taxes? I notice also you just slipped in the observation that the overall level of taxation is progressive thanks to exemptions,.... Good grief, cyclops, how long have you been arguing that exemptions do not make a tax progressive? I keep saying I give up on you, but I keep coming back here to try to pin you down to something, anything.

Also, please explain what you mean by individual taxes not changing because you exempt certain people? Are you talking about income tax still? If you mean what I think, if the exemptions exempt a higher portion of the incomes of poor people than rich people, the tax does indeed become a progressive tax. This is a very simple concept.

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okie wrote:

The debate is over, but in an attempt to figure out why you are confused, when you mention overall level of taxation, are you referring to the income tax code, or all taxes?

Snort. I find it interesting that you assume that I am confused, yet it is you who are asking the question.

Overall level of taxation refers to all taxes a person is subject to. I have made this clear several times in my posts, which you apparently haven't been reading.

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I notice also you just slipped in the observation that the overall level of taxation is progressive thanks to exemptions,.... Good grief, cyclops, how long have you been arguing that exemptions do not make a tax progressive?

You are absolutely correct: exemptions from individual taxes can make an overall tax burden more progressive. But it doesn't change the progressivity of individual taxes, because you aren't actually changing those taxes or how they are calculated; just exempting certain people from having to pay them. The overall tax burden for those folks changes without changing the tax burden for everyone else who is not exempted. So the individual tax is not affected by an exemption.

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I keep saying I give up on you, but I keep coming back here to try to pin you down to something, anything.

Shrug. I've been consistent throughout.

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Also, please explain what you mean by individual taxes not changing because you exempt certain people? Are you talking about income tax still?

See above. Let us say that I fall in tax bracket x, which is up to 50k. I owe those taxes in that bracket and in fact thanks to collections by my employer, I pay those taxes every year.

At tax time, at the end of the year, when I calculate my taxes, I figure out how much I would pay under my tax bracket - in fact, how much I've already paid, usually - and then look for exemptions and deductions, which are modifications to my personal situation as decided upon by society to encourage behaviors we like. I might own a house (I don't) and get an exemption from certain taxes due to that. I might be a member of a non-profit organization, and can write off certain taxes for that. These are societal and governmental decisions which have nothing to do with my bracket and everything to do with individual behaviors which we are trying to encourage.

Exemptions don't change the level of my bracket; they don't make the Income Tax burden itself any more progressive. But they do make my overall tax burden less, because society/government has decided that because I am engaging in behaviors they wish to encourage, they will exempt me from paying the standard level of taxation. But the standard level itself is unchanged. That's what I mean when I say that Exemptions don't change the progressivity of a tax itself; they don't change the amount charged per dollar made.

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If you mean what I think, if the exemptions exempt a higher portion of the incomes of poor people than rich people, the tax does indeed become a progressive tax.

First, there is no real evidence that a higher percentage of income for the poor is exempted than the rich, as there are literally hundreds of tax tricks and shelters that the rich have access to, and the poor do not. But that's a different argument.

Second, the overall tax burden would be more progressive. Exemptions do not affect the basic tax code that we've decided to charge based upon income.

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The debate is over

You dropped all my points. You're right that it is over, but I doubt an objective judge would call you the winner. You even admitted to dropping the points, but never went back to pick them up.

Cycloptichorn Laughing

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Cycloptichorn wrote:

okie wrote:
The debate is over, but in an attempt to figure out why you are confused, when you mention overall level of taxation, are you referring to the income tax code, or all taxes?

Snort. I find it interesting that you assume that I am confused, yet it is you who are asking the question.

Overall level of taxation refers to all taxes a person is subject to. I have made this clear several times in my posts, which you apparently haven't been reading.

Yes, I've been reading it. You kept repeating it, but I did not figure it was worth trying to get you to clarify it because it was not pertiinent to the argument. Sure, overall taxes can be progressive when taken in aggregate, but specific taxes, such as the income tax, or even specific provisions in a tax code can be progressive.

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I notice also you just slipped in the observation that the overall level of taxation is progressive thanks to exemptions,.... Good grief, cyclops, how long have you been arguing that exemptions do not make a tax progressive?

You are absolutely correct: exemptions from individual taxes can make an overall tax burden more progressive. But it doesn't change the progressivity of individual taxes, because you aren't actually changing those taxes or how they are calculated; just exempting certain people from having to pay them. The overall tax burden for those folks changes without changing the tax burden for everyone else who is not exempted. So the individual tax is not affected by an exemption.

What????? Individual taxes are affected by provisions like exemptions and deductions. A poor person benefits percentage wise by these factors, thus these provisions are progressive. They obviously affect overall taxation, which when all added up, the taxes or tax could result in being progressive.

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I keep saying I give up on you, but I keep coming back here to try to pin you down to something, anything.

Shrug. I've been consistent throughout.

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Also, please explain what you mean by individual taxes not changing because you exempt certain people? Are you talking about income tax still?

See above. Let us say that I fall in tax bracket x, which is up to 50k. I owe those taxes in that bracket and in fact thanks to collections by my employer, I pay those taxes every year.

At tax time, at the end of the year, when I calculate my taxes, I figure out how much I would pay under my tax bracket - in fact, how much I've already paid, usually - and then look for exemptions and deductions, which are modifications to my personal situation as decided upon by society to encourage behaviors we like. I might own a house (I don't) and get an exemption from certain taxes due to that. I might be a member of a non-profit organization, and can write off certain taxes for that. These are societal and governmental decisions which have nothing to do with my bracket and everything to do with individual behaviors which we are trying to encourage.

Exemptions don't change the level of my bracket; they don't make the Income Tax burden itself any more progressive. But they do make my overall tax burden less, because society/government has decided that because I am engaging in behaviors they wish to encourage, they will exempt me from paying the standard level of taxation. But the standard level itself is unchanged. That's what I mean when I say that Exemptions don't change the progressivity of a tax itself; they don't change the amount charged per dollar made.

Wrong again. This is so plain and simple. Exemptions result in the same effect as applying a 0% tax to the first amount of income to a threshold, thus if such exemptions apply to all people, or even better, to poor people usually, then this amounts to a progressive provision in the code. So if because of these exemptions and deductions, lets say the first 15,000 becomes non-taxable, the people that only have an income of 15,000 or so, benefit much more percentage-wise than higher income people. Many exemptions, deductions, and credits, depending on the type, are progressive provisions by nature, and contribute to the the progressivity or lack thereof for the tax.

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If you mean what I think, if the exemptions exempt a higher portion of the incomes of poor people than rich people, the tax does indeed become a progressive tax.

First, there is no real evidence that a higher percentage of income for the poor is exempted than the rich, as there are literally hundreds of tax tricks and shelters that the rich have access to, and the poor do not. But that's a different argument.

What you say is of course nonsense as applied to income tax, as anyone that knows anything about this knows that some of the most common exemptions, deductions, and credits, allow low income people to pay no income tax whatever, and in fact they can receive a considerable amount back that they never even paid, so anything that is 0 or less than 0 divided by their income is 0 or less than 0, so if anyone with a higher income pays even 1% of their income, but we know they usually pay far more than that, then the tax is progressive. Your tax tricks and shelters to one man is to another man, an incentive placed there by your beloved congressmen to stimulate and control economic behavior. Not all of those provisions are progressive, but overall, the income tax is progressive because of the provisions that are.

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Second, the overall tax burden would be more progressive. Exemptions do not affect the basic tax code that we've decided to charge based upon income.

They obviously do affect the code. Your statement is ludicrous.

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The debate is over

You dropped all my points. You're right that it is over, but I doubt an objective judge would call you the winner. You even admitted to dropping the points, but never went back to pick them up.

Cycloptichorn

I'm waiting for Thomas or somebody that you consider to be informed on this to confirm the obvious. You think old okie is a hick and a dumbie. Get over it and have the honor to admit it when you are plain wrong.

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To cut to the chase, would a sales tax that exempts shelter to a certain threshold, food, and perhaps a few other basics like medicine, so that a larger percentage of spending by lower incomes are exempt from sales tax as compared to higher income people, would the sales tax be "progressive?" Yes or No.

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okie wrote:

To cut to the chase, would a sales tax that exempts shelter to a certain threshold, food, and perhaps a few other basics like medicine, so that a larger percentage of spending by lower incomes are exempt from sales tax as compared to higher income people, would the sales tax be "progressive?" Yes or No.

No, because the same tax rate cuts would apply to the rich as well.

For example, Let's say we exempt housing, food, and medicine from everyone's sales taxes.

A poor person with and income of 25k per year spends 15k per year on these items; this is roughly 3/5ths of his income.

A rich person, who makes 250k per year, who has a nicer house, nicer food, and more expensive medicine, pays 150k per year on these items; this is roughly 3/5ths of his income.

Inherently the fact that more expensive things can be purchased by the rich gives the lie to this idea. But you did have an important concept:

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that exempts shelter to a certain threshold

If we charge a different sales tax rate to the rich then we do the poor - that's progressive, man!

If you change a basic law, you don't have to provide 'exemptions' to that law. You don't exempt those who are over 18 from the rule against buying cigarrettes; that's the law. We call things exemptions precisely because the underlying rules do NOT change. That's why I say that the individual taxes themselves do not change due to the exemptions or deductions, but the overall tax burden does.

All that really seperates us is semantics, you know? I don't know why you would say this:

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You think old okie is a hick and a dumbie.

I don't think this is true at all. I wouldn't waste my time if I did. I just think that you are stubborn, a quality that I share myself.

Cycloptichorn

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okie wrote:

To cut to the chase, would a sales tax that exempts shelter to a certain threshold, food, and perhaps a few other basics like medicine, so that a larger percentage of spending by lower incomes are exempt from sales tax as compared to higher income people, would the sales tax be "progressive?" Yes or No.

No because progressivity is based on the tax vs the income.

One can always envision an income so large that it can't be spent at a high enough rate to equal what someone with a lower income must spend.

Assume the exemption is on $15,000 of spending. Someone makes $100,000 and the sales tax is 10%. That person spends all their money. Their tax bill would be $8,500 or 8.5% of their income.

Now assume someone makes $100,000,000. It would be extremely unlikely if not impossible for them to spend $85 million on taxable goods.

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Cycloptichorn wrote:

okie wrote:
To cut to the chase, would a sales tax that exempts shelter to a certain threshold, food, and perhaps a few other basics like medicine, so that a larger percentage of spending by lower incomes are exempt from sales tax as compared to higher income people, would the sales tax be "progressive?" Yes or No.

No, because the same tax rate cuts would apply to the rich as well.

Wrong, wrong, wrong. If you were correct, then no tax could possibly be progressive then, as you define it.

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For example, Let's say we exempt housing, food, and medicine from everyone's sales taxes.

A poor person with and income of 25k per year spends 15k per year on these items; this is roughly 3/5ths of his income.

A rich person, who makes 250k per year, who has a nicer house, nicer food, and more expensive medicine, pays 150k per year on these items; this is roughly 3/5ths of his income.

Wrong, and obviously you did not read the question carefully. You continue to perpetuate your ignorance day after day on this issue. Further, you forgot that other basic necessity types of expenses, such as insurance, gasoline, various non-taxable services, etc, and utility bills are not subject to conventional sales taxes, so it is highly doubtful that a person that makes 25 grand per year would buy the same percentage of goods subject to sales tax as the person that makes 250 k per year. Thus, in my question, the sales tax as asked, would clearly be a progressive tax. This should be obvious to anyone but an ignoramus. Do you wish to be one of those? You can still start to escape by putting on the bib and place the crow in your plate, cyclops.

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Inherently the fact that more expensive things can be purchased by the rich gives the lie to this idea. But you did have an important concept:

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that exempts shelter to a certain threshold

If we charge a different sales tax rate to the rich then we do the poor - that's progressive, man!
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Please get over one big misconception. It does not have to be a different rate, based on rich or poor. No tax charges different rates based on who you are. Taxes only charge different rates based not on who you are, and the wealth you possess, but in the case of income tax, on different incomes, and in the case of a progressive sales tax, on what you buy. In the case of possibly charging sales tax on shelter above a threshold, that would not be according to who you are or your income, it would be based on the cost of the house you purchase, or the cost of the rent you pay for your housing, not much different than not taxing food, but taxing other retail items instead.

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If you change a basic law, you don't have to provide 'exemptions' to that law. You don't exempt those who are over 18 from the rule against buying cigarrettes; that's the law. We call things exemptions precisely because the underlying rules do NOT change. That's why I say that the individual taxes themselves do not change due to the exemptions or deductions, but the overall tax burden does.
Exemptions, depending on which ones, can be and often are progressive in nature and greatly contribute to making a tax progressive, and this can apply to more than income tax, such as a sales tax. For example, exemptions commonly exempt the lower incomes from tax, for both low income earners and high income earners, but because this affects lower income earners more than high income earners percentage wise, it is progressive in nature.

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All that really seperates us is semantics, you know?

Do not try to wiggle out of this and say it is nothing more than semantics.

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I don't know why you would say this:

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You think old okie is a hick and a dumbie.

I don't think this is true at all. I wouldn't waste my time if I did. I just think that you are stubborn, a quality that I share myself.

Cycloptichorn

Being stubborn can either be a good trait or a bad trait, depending on how it is applied, and I would suggest you are mis-applying it to yourself in this argument. You should cut your losses and eat the crow.

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okie,

I suggest you stop digging.

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parados wrote:

okie wrote:
To cut to the chase, would a sales tax that exempts shelter to a certain threshold, food, and perhaps a few other basics like medicine, so that a larger percentage of spending by lower incomes are exempt from sales tax as compared to higher income people, would the sales tax be "progressive?" Yes or No.

No because progressivity is based on the tax vs the income.

One can always envision an income so large that it can't be spent at a high enough rate to equal what someone with a lower income must spend.

Assume the exemption is on $15,000 of spending. Someone makes $100,000 and the sales tax is 10%. That person spends all their money. Their tax bill would be $8,500 or 8.5% of their income.

Now assume someone makes $100,000,000. It would be extremely unlikely if not impossible for them to spend $85 million on taxable goods.

You are wrong. In general, the sales tax would be considered as a progressive tax. You can find exceptions, or make them up as you did, just as you can with the income tax system. Just because someone that makes $110,000, for example, might easily pay less income tax than someone that makes $100,000, simply by virtue of loopholes and differences in investments, does not change the fact that the income tax code is now considered to be a progressive tax. Of course there will be exceptions, especially at higher incomes, but if sales tax exemptions result in the poorest people paying less percentage of their income on sales tax than those with higher incomes, I believe it is very clear that the tax would be considered to be a progressive form of tax.

Sheesh, leave it to Parados to start splitting hairs!

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Leave it to okie to ignore the math.

Do the math okie. Tell us how someone that makes $100,000,000 is forced to pay a larger % of their income on sales taxes. The ONLY way it is progressive is based on tax/income in which ALL those with a higher income pay more. Let me repeat.. ALL those with a higher income MUST pay more.

Sales taxes are not progressive unless ALL the rich buy more as a % of their income. If one rich person can buy less as a % then it is NOT progressive and can never be progressive. No one is forced to spend their income. People must buy necessities however. Adam Smith wrote about this almost 250 years ago.

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Again, I would think this would be as simple a concept, and I would have thought this could have been explained in one paragraph, but I guess not for you, cyclops, and now even Parados. Simply do a search of the internet by typing in "description of progressive sales tax," and you will have more information than needed to understand the simplest of concepts.

Here is a good description from this site:
http://www.proaxis.com/~randau2/taxes/progress.htm

What's a Progressive Consumption Tax:

A progressive consumption tax is one that taxes the sale of all goods and services except those goods and services that are considered to be necessities readily purchased by those living at the lower end of the economic spectrum and/or increased tax rates on discretionary and luxury goods and services.
Exempting taxes on necessities is analogous to the standard deduction in income taxes (tax-free income threshold) and increased tax rates on luxuries is analogous to increased income tax brackets for higher incomes (progressive tax rate schedules).

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Wow.. Some other idiot misused the term "progressive". Gee, that doesn't make a sales tax progressive. It only means someone proposed something that doesn't meet the meaning of the word.

I'll stick with Adam Smith on this one.

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parados wrote:

Leave it to okie to ignore the math.

Do the math okie. Tell us how someone that makes $100,000,000 is forced to pay a larger % of their income on sales taxes. The ONLY way it is progressive is based on tax/income in which ALL those with a higher income pay more. Let me repeat.. ALL those with a higher income MUST pay more.

Sales taxes are not progressive unless ALL the rich buy more as a % of their income. If one rich person can buy less as a % then it is NOT progressive and can never be progressive. No one is forced to spend their income. People must buy necessities however. Adam Smith wrote about this almost 250 years ago.

No, a progressive tax does not require that every single taxpayer pays the amount of tax according to their wealth, or in the case of income tax, not even according to their income. It is only true in a general sense. Higher income earners USUALLY pay more income tax, but not always. However, the income tax code is generally progressive. I hope you will not start arguing about that too?

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This should be obvious to anyone but an ignoramus. Do you wish to be one of those? You can still start to escape by putting on the bib and place the crow in your plate, cyclops.

I've been nothing but polite to you as you fail to answer my points, Okie. You can't skip all the math, just rely upon theories (which don't work in real life) and then say things like this, I'm sorry.

You linked to this:

http://www.proaxis.com/~randau2/taxes/progress.htm

But this is not exactly what I would call a 'definitive source,' my friend. It's like I told you before: just because other people are also wrong, doesn't make you both right.

You are making my argument for me here, to Parados:

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Just because someone that makes $110,000, for example, might easily pay less income tax than someone that makes $100,000, simply by virtue of loopholes and differences in investments, does not change the fact that the income tax code is now considered to be a progressive tax.

That's right - because it is the level of taxation, not the exemptions that people happen to claim, which defines progressivity of a tax. The individual situation does not define the progressivity of the individual tax itself. I appreciate that you are coming around to reason.

Cycloptichorn

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I will continue to stick with Adam Smith.

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Cycloptichorn wrote:

I appreciate that you are coming around to reason.

Cycloptichorn

I have never changed my opinion on this, so I have no clue why you claim I am coming around. My description of this has been consistent throughout, so do not try to skew it to make it look like your blatantly arguments were always right. Disagreement is fine, but dishonesty is worse.

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parados wrote:

I will continue to stick with Adam Smith.

Please provide a link to his description of progressive, regressive, and flat taxes that you are using.

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A link to Adam Smith? ha ha ha....

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Where is the US economy headed?

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