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Author Topic: Proportional taxation
Jeit
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posted 09 January 2005 02:39 AM      Profile for Jeit     Send New Private Message      Edit/Delete Post  Reply With Quote 
I suggest we tax goods based on how much they affect the cost of public service.

Cigarettes are currently taxed enough to just about pay for the cost of their effects on the healthcare system.

Hamburgers with x amount of fat contribute to x amount of heart disease should be similarly taxed to cover this.

Also, 60% of our tax dollars go to healthcare; when I buy a $1000 sofa, I pay $140 in tax. Why should 60% of that ($84) be going to healthcare when my sofa does nothing to harm anyone?


From: Vancouver | Registered: Dec 2004  |  IP: Logged
Papal Bull
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posted 09 January 2005 02:41 AM      Profile for Papal Bull   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Because that money going to healthcare pays for the worker whose back was wrecked when he had to carry and load your sofa?
From: Vatican's best darned ranch | Registered: Oct 2004  |  IP: Logged
Raos
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posted 09 January 2005 03:08 AM      Profile for Raos     Send New Private Message      Edit/Delete Post  Reply With Quote 
Blatantly that's an oversimplification of the situation. I'm far too lazy to look up the stats, but I think it's fair to say that x% of our tax dollars go towards paying the electricity for parliament. Why should x% of the taxes I pay for a book go towards electricity for parliament? They aren't even related! I think in this instance, you're trying to interpret the statistics in an entirely meaningless way.
From: Sweet home Alaberta | Registered: May 2004  |  IP: Logged
Mr. Magoo
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posted 09 January 2005 04:02 AM      Profile for Mr. Magoo   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
when I buy a $1000 sofa, I pay $140 in tax. Why should 60% of that ($84) be going to healthcare when my sofa does nothing to harm anyone?

Because you may very well die of an aneurysm, or get hit by lightning, or any other thing for which no 'causal agent' could be taxed. If we only taxed those things that could be shown to lead to death, we wouldn't actually have enough money in the health care coffers to cover all the illness that isn't really attributable to anything more than being human and alive.


From: ø¤°`°¤ø,¸_¸,ø¤°`°¤ø,¸_¸,ø¤°°¤ø,¸_¸,ø¤°°¤ø, | Registered: Dec 2002  |  IP: Logged
maestro
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posted 09 January 2005 05:21 AM      Profile for maestro     Send New Private Message      Edit/Delete Post  Reply With Quote 
How about this for a tax proposal.

Instead of the myriad taxes currrently collected, along with the enormous amount paperwork etc.( I guess we all know that costs plenty).

Instead we institute a flat tax on wealth, not income, not company income, not consumption.

Every person does a balance sheet at the end of the year, and pays a flat rate on the net credit balance. No loopholes, no deductions, no nothing.

I'll put in one qualification, the first 1 million in net balance will be tax free. After that, net balance will be taxed at a flat rate.

Fopr most people this would be a very simple calculation, certainly no more complicated than the current procedure. And for most people, they would pay no tax at all.

Because this tax is on wealth only, the wealthy cannot escape. They can fudge around their income, but they can't fudge their balance sheet.


From: Vancouver | Registered: Jan 2005  |  IP: Logged
Phonicidal
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posted 09 January 2005 05:29 AM      Profile for Phonicidal     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by maestro:
Because this tax is on wealth only, the wealthy cannot escape.
Why is it that you would extend equality to people in other sectors, but you would discriminate against some here?

From: Thornhill, Ontario, Canada | Registered: Dec 2004  |  IP: Logged
Crippled_Newsie
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posted 09 January 2005 09:32 AM      Profile for Crippled_Newsie     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Jeit:
Cigarettes are currently taxed enough to just about pay for the cost of their effects on the healthcare system.

In the US anyway, cigarettes are highly taxed mostly because smoking is widely unpopular, and the government can therefore tax them at high rates.

It's also a fine way to justify a regressive tax (given the demographics of smokers).

For all the talk in the US that the high costs to smokers are intended to discourage smoking-- and they have seen some success in that-- state governments still could not survive without the tax money generated by cigarette sales.

But then, I fully admit that I'm prejudiced on this issue.

[ 09 January 2005: Message edited by: Tape_342 ]


From: It's all about the thumpa thumpa. | Registered: Oct 2004  |  IP: Logged
skdadl
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posted 09 January 2005 09:46 AM      Profile for skdadl     Send New Private Message      Edit/Delete Post  Reply With Quote 
Neat answer, Papal Bull. And I like maestro's system. I think the answer to your question, Phonicidal, is that maestro is, with that proposal, aiming at achieving equality.
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robbie_dee
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posted 09 January 2005 11:55 AM      Profile for robbie_dee     Send New Private Message      Edit/Delete Post  Reply With Quote 
Taxation to fund redistributive governmental programs is only necessary in a system where the means of production remain primarily in private hands. If we are going to live in such a system, I would favour maestro's proposal, although I might consider raising the marginal rate on wealth over $1 million over time. That would progressively move more of that wealth into the public sphere.
From: Iron City | Registered: Apr 2001  |  IP: Logged
lonecat
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posted 09 January 2005 12:17 PM      Profile for lonecat   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I like Jeit's idea very much. This is an excellent way to promote health lifestyles, which are in short supply these days in North America.
From: Regina | Registered: Apr 2004  |  IP: Logged
skdadl
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posted 09 January 2005 12:32 PM      Profile for skdadl     Send New Private Message      Edit/Delete Post  Reply With Quote 
lonecat, it is an excellent way to punish anyone who gets sick for any reason. To kill them off quickly, actually.
From: gone | Registered: May 2001  |  IP: Logged
bikewench
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posted 09 January 2005 04:12 PM      Profile for bikewench        Edit/Delete Post  Reply With Quote 
Why not simply tax every single dollar that is made in Canada at the gross income level and leave it at that. That way.. every foreign corporation that is making money off of our natural resources will be paying it's fair share... while the mininum wage earner will be paying very little.
From: B.C. | Registered: Mar 2004  |  IP: Logged
maestro
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posted 09 January 2005 04:39 PM      Profile for maestro     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Why is it that you would extend equality to people in other sectors, but you would discriminate against some here?

Skdadl has already answered for me, but I'll throw in my two bits worth.

There is nothing inherently discriminatory in taxing wealth instead of income. In fact, it's a lot less discriminatory than the current system.

And of course, the right wing has always hammered away on the theme of flat taxes. They should be happy that a lefty proposes a flat tax system.

However, I will admit that a flat tax on wealth (instead of income) will hit the wealthy harder than they are being hit now.

In Canada, the top 10% (owners of wealth - not income) own 55.7 % of the total wealth of the country.

The bottom 10% own (-)o.6 % of the wealth.

Obviously the bottom 10% won't be paying any taxes under the flat rate wealth tax.

This is not an 'eat the rich' proposal. It just proposes a flat tax. After all, the current system goes after those with higher incomes.

All this system does is change the reference from income to wealth, and changes to a flat tax rate.

What could be fairer than that?


From: Vancouver | Registered: Jan 2005  |  IP: Logged
verbatim
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posted 09 January 2005 04:51 PM      Profile for verbatim   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm curious -- how is "wealth" to be defined in such a system?
From: The People's Republic of Cook Street | Registered: May 2001  |  IP: Logged
Lard Tunderin' Jeezus
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posted 09 January 2005 05:37 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
And how do you deal with high levels of foreign corporate ownership?
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Jeit
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posted 09 January 2005 06:39 PM      Profile for Jeit     Send New Private Message      Edit/Delete Post  Reply With Quote 
The proposition I made does not follow a “left” or “right” philosophy. I would encourage you all to think about it more closely before attempting to categorize it and drive this thread into a “left” vs. “right” debate.

Perhaps the example of my sofa detracted from my argument because it looked too much like a “right” philosophy complaining about high taxes.

Consider taxing unhealthy foods such as hamburgers and soda-pop. This is not simply taxing humans for getting sick; there is undoubtedly a cost to our health system associated with these foods. If each .99c hamburger cost an additional $1 in taxes, it would add to tax revenue or detract from hamburger purchases; either way reducing our collective health bill.

I would take this a step further. We should offer credit and incentive for people to exercise: We currently pay a relatively small fee for health incurrence when compared to the average overall cost of healthcare, the difference is made up from general tax revenues. Say for example’s sake that we had to each pay $100 per month in health premiums, but we could set up a system where this is reduced to $10 depending on the amount of exercise performed. Gyms, tracks, pools and other places of good exercise could be certified to give these credits to your health card. Since each person has different abilities, the scale of exercise required to receive benefit would have to be pre-determined by a doctor.

At the end of the day, someone has to pay for health care. A simple "pay as you go" system is not fair due to genetic and socio-economic differences. However, a "pay if you'd like to abuse" system seems completely fair.

[ 09 January 2005: Message edited by: Jeit ]


From: Vancouver | Registered: Dec 2004  |  IP: Logged
Lard Tunderin' Jeezus
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posted 09 January 2005 07:23 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
I would encourage you all to think about it more closely before attempting to categorize it and drive this thread into a “left” vs. “right” debate.
I was thinking more in terms of practical vs. impractical, or functional vs. dysfunctional.

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pebbles
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posted 09 January 2005 07:29 PM      Profile for pebbles     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Jeit:
I suggest we tax goods based on how much they affect the cost of public service.

How do you quantify that?


From: Canada | Registered: Jul 2004  |  IP: Logged
Jeit
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posted 09 January 2005 07:55 PM      Profile for Jeit     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by pebbles:

How do you quantify that?


If 25% of healthcare is devoted to lung cancer and 75% of lung cancer is caused by smoking then it's a simple calculation to see how much $ cigarettes cost those who do not smoke.

We can use regressional statistics to determine how much a certain variable, i.e. soda-pop, contributes to health and dental costs.


From: Vancouver | Registered: Dec 2004  |  IP: Logged
James
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posted 09 January 2005 08:34 PM      Profile for James        Edit/Delete Post  Reply With Quote 
The concept is ludicrous. Smoking does not "cause" deaths. Poor diet does not "cause" death. The sole automatic precursor of death is birth. WE WILL ALL DIE. Get used to it. The process will vary for each of us. For some, it will be unexpected and instantaneous; accident, brain aneurism, terrorist attack, whatever. For the less fortunate, it will be long and drawn out, be it by a slowle progressing cancer, congestive heart failure, or just plain old-age, where organs and functions leave us one by one.

All of the empifacle evidence says that smokers, due shorter lesser life expectancy, save the public purse money.


From: Windsor; ON | Registered: Mar 2004  |  IP: Logged
jeff house
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posted 09 January 2005 09:28 PM      Profile for jeff house     Send New Private Message      Edit/Delete Post  Reply With Quote 
I think I will use that concept in court, James. My client is charged with kicking someone to death. But I will simply argue that BIRTH is the culprit.

I think that should work.


From: toronto | Registered: May 2001  |  IP: Logged
James
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posted 09 January 2005 09:40 PM      Profile for James        Edit/Delete Post  Reply With Quote 
Jeff, that is disingenuous and you well know it. I am talking social health policy; you are talking criminal law. And we all know, (perhaps sadly) that directly precipitating the death of one who is dying at any event still attracts harsh criminal sanctions in this country.
That said, the analogy is not worthy of you.

[ 09 January 2005: Message edited by: James ]


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robbie_dee
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posted 10 January 2005 12:48 AM      Profile for robbie_dee     Send New Private Message      Edit/Delete Post  Reply With Quote 
I'm not opposed to making prices better reflect the social costs of products. And I think the best example of where this could help is not tobacco or fast food, but rather, cars/gasoline. The automobile has received enormous subsidies from our government in the form of highway building, preferential tax treatment and cheap gas. Even though personal autos are one of the single most environmentally damaging technologies that exist. Certainly the most damaging thats sold directly to the consumer market. If we were to jack up the price of driving through taxation, and take all the subsidies out as well, and plow all that money into public transit instead, we could have a transportation network that was the envy of the world.

That being said, several people on this thread have pointed out that not all products or services work the same way. The health care system, for example, takes care of far more things than "lifestyle" disease, and if you were to try and fund the health care system simply through sin taxes, you would quickly run short of money.

Frankly, I think oftentimes we beat up too much on people for choosing so-called "unhealthy lifestyles," anyway, instead of focusing on the systemic barriers that prevent those people from achieving healthier lifestyles (i.e. lack of education, lack of the time to actually cook a healthy meal and the money to afford quality ingredients, stopping the saturation marketing by the fast food/alcohol/tobacco peddlers, etc.) Doing the latter, however, brings you back to the fundamental problem of capitalism, namely, that certain large corporations are making a lot of money off of encouraging people to lead unhealthy lives.

[ 10 January 2005: Message edited by: robbie_dee ]


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maestro
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posted 10 January 2005 03:04 AM      Profile for maestro     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
verbatim

I'm curious -- how is "wealth" to be defined in such a system?


Wealth is simply real property. Houses, cars, stocks, bank accounts, cash on hand...etc.

There is no problem there, a balance sheet is simply what you own, and what you owe. Your net balance is the difference between those two figures.

quote:
Lard tunderin' jeesus

And how do you deal with high levels of foreign corporate ownership?


No problem, assets within the country are taxed at the same rate, regardless of ownership. Thus, a Morroccan may own stocks in some Canadian company, the wealth evidenced by those shares is taxed here in Canada. Every company keeps records of their stockholders, so it's no problem to find them.

If the shareholder felt hard done by and refused to pay up, the shares could be retrieved.

The wealth tax also takes care of the probem of corporate taxes. Corporations have myriad ways of disguising their profit, shielding it from the tax collector.

But shares in public companies reflect how well the company is doing. The level of profitability is built into the share value.

It's hard to think in terms of not worrying about income, but the wealth tax doesn't care about income levels. If you make a zillion dollars a year and blow it all on bubble gum, you don't have to pay tax.

However, the bubble gum company that you own shares in increases in value, elevating the value of your shares, and increasing the positive side of your balance sheet.

Remember that in a private economy, everything is owned by somebody, and the owners are damn careful to make sure that everyone knows it.

You can hide income, you can't hide real property.


From: Vancouver | Registered: Jan 2005  |  IP: Logged
maestro
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posted 10 January 2005 03:32 AM      Profile for maestro     Send New Private Message      Edit/Delete Post  Reply With Quote 
While conducting a different search, I stumbled across this document re: Wealth taxes.

The author is very much opposed to wealth taxes and presents a variety of objections.

quote:

http://tinyurl.com/5buwr

"A Primer On The Implementation Of Wealth Taxes"

by Robert D. Brown, Price-Waterhouse Canada


If you want a quick perspective on all the things that (could be) wrong with wealth taxes, this is a pretty good document. Because it was written by a Canadian it also sort of applies to Canada, although the author treats the subject as a whole.


From: Vancouver | Registered: Jan 2005  |  IP: Logged
Raos
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posted 10 January 2005 12:18 PM      Profile for Raos     Send New Private Message      Edit/Delete Post  Reply With Quote 
Don't you think that taxing net worth as opposed to income could discourage saving for retirement or other future expenses. If you set aside money for a child's education when they're born, even if the flat tax is as low as 5%, the entire portion of money set asside for that child will be gone by the time they're 20, whether they use it or not.
From: Sweet home Alaberta | Registered: May 2004  |  IP: Logged
Jeit
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posted 10 January 2005 05:22 PM      Profile for Jeit     Send New Private Message      Edit/Delete Post  Reply With Quote 
Not all health $ could come from unhealthy products, but is anyone against unhealthy products paying their fair share in accordance to the damage they do?
From: Vancouver | Registered: Dec 2004  |  IP: Logged
MacD
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posted 10 January 2005 06:18 PM      Profile for MacD     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Raos:
Don't you think that taxing net worth as opposed to income could discourage saving for retirement or other future expenses. If you set aside money for a child's education when they're born, even if the flat tax is as low as 5%, the entire portion of money set asside for that child will be gone by the time they're 20, whether they use it or not.

maestro suggested a $1 million exemption that would solve this problem.


From: Redmonton, Alberta | Registered: Apr 2002  |  IP: Logged
maestro
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posted 10 January 2005 07:07 PM      Profile for maestro     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
maestro suggested a $1 million exemption that would solve this problem.

Thanks...

It's also true, that the individual would have a lot more money to put into retirement savings because they wouldn't be paying income taxes. That would free up 15 - 25 % of their income.

I read pretty thoroughly the paper about all the problems with wealth taxes, and I wasn't that impressed. The author does present some issues, but at the same time avoids the real issue.

While incomes (for the most part) are not that wildy disparate in this country, the ownership of wealth is.

According to the Stats-Canada 1999 Survey of Financial Security,

quote:
There were substantial differences in the distribution of net worth among family units in 1999. The 10% of family units with the highest net worth held 53% of all personal wealth in 1999. The 10% at the low end of the net worth scale actually had negative net worth; they owed more than they owned.

And that's the real problem with wealth taxes. It prevents wealthy people with little or no income from avoiding taxes.

In the last hundred years in this country, there has been almost no change in the percentile ownership of wealth. The biggest change has been at the top and bottom of the scale, where wealth ownership has increased for the top ten percent, and decreased for the bottom ten percent (actually the bottoom thirty percent).

So for all the propaganda about taxes redistributing wealth, they have, but not in the direction of the poor. They have redistributed wealth from the poorest to the richest.

So maybe it is time for wealth taxes.

[ 10 January 2005: Message edited by: maestro ]


From: Vancouver | Registered: Jan 2005  |  IP: Logged
arborman
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posted 11 January 2005 02:17 AM      Profile for arborman     Send New Private Message      Edit/Delete Post  Reply With Quote 
Prices reflecting the social cost of products again leaves everything in the hands of unequal consumers. It may also create the social absurdity that results from dangerous things becoming expensive - people who have more money will buy it as a way of distinguishing themselves. Hot dogs for the rich and wannabes. Similar to 50s Newfoundland - the poor kids at school ate lobster, which was plentiful, while the rich kids ate bologna, which cost money.

The point being that consumer behaviour is difficult to direct and influence, and taxation is one of the least useful. Businesses are easier, with thoughful regulation.

How about profits reflecting the social costs of production instead? As in, a profit can be realized by a company, after it has accounted for the social and environmental (indirectly social) costs of the production of its goods. This could be done by either reducing damage, or remitting taxes. About as complex as taxing consumption, and far more progressive, in that it would not punish the poor for being unable to afford organic food (as an example).

As for taxation, anything progressive is fine. The big weakness we face is that wealth is more mobile than income - those with wealth can export it to more 'wealth friendly' climes, more easily. There's a reason the Swedish founder of Ikea (and richest man in the world) lives in Switzerland, and it isn't the coffee, skiing or schnitzel. Few of us can export our jobs with such ease.


By the way, as I understand it, the point of raising tobacco taxes is not to encourage adult smokers to quit. That depends largely on the person, more than the economics. The point is to discourage teenagers from starting. If a person gets to 20 without taking it up, they are pretty much clear of risk.

[ 11 January 2005: Message edited by: arborman ]


From: I'm a solipsist - isn't everyone? | Registered: Aug 2003  |  IP: Logged
Fidel
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posted 12 January 2005 04:27 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
Good one arbor man. Polanyi talked about "social capital." I agree that society does require a proper accounting for the production of all manner of plastic widgets and "stuff" in general.
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged

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