Score one for the voters

[d-ray657]

Originally Posted by whell

Wow, you and I can agree on this.

Where we may or may not agree is what the tax code should look like, or what the proper function of a tax code should be.

IMHO, it is impossible for a government to enact a tax system that influences economic or social policy without eroding individual freedom. Nor, do I think such a system is desirable for a host of reasons. Therefore, the simpler the system, and the more such a system encourages the efficient private sector use of capital, the better. A tax system that encourages economic growth, and is designed to benefit from that growth, is ideal.

The possible answer may be a system that balances taxes on both wealth creation and consumption, yet discourages neither. There will always be some level of tax that discourages a particular activity. However, if the threshold it both reasonable and predictable over the long term, demand will typically drive the ship. Currently, federal taxes on capital formation and utilization or high, and minimal on consumption. May be an area of opportunity.

Just a thought....

You are absolutely right. We will likely not agree on the function of the tax code. Actually, we probably agree on the function of the tax code - to raise funds for the operation of government. What we are unlikely to agree on are what government operations should be (and on whether those who have benefitted the most from the social contract should contribute to its maintenance to a higher degree). I am also less inclined toward a federal consumption tax. To me, that encroaches on the area in which local governments raise a substantial portion of their revenue. (Look at me, advocating to protect local governments from the feds.) I do think that you and I would agree that it is more honest governance to directly fund those things that government seeks to encourage rather than to hide such incentives in the tax system.

Obviously if there were no tax at all, there would theoretically be more funds available for everything. Of course, we all know that government provides essential services, and without such services we would likely fall into anarchy. Therefore, everyone should somehow share in the cost of such services. I believe that services for the less fortunate, services which protect the citizens from unbridled capitalism, and funding to provide the highest level of education attainable should be included in the essential services. I also believe that any tax reform should maintain the Social Security system, and fund it more honestly than we have for the past several decades. Medicare would become redundant, however, if we were able to implement a European/Canadian style health system.

Regards,

D-Ray