Sunday, April 10, 2005

Forms of Taxation

The Author once produced a book of that name( to be found at iUniverse), which shows his use of the same old dialogue. He had the miscreant thought, though, that he should express his beliefs on current Tax proposals:

Income Tax: A Flat Income Tax produces as much inequity as does excessively high percentage rates for Progressive taxation. The Author has proposed a Two-Rate form of Income Tax--15% and 25%. These rates of taxation would fully fund Government expenditures under certain conditions; complete elimination of reductive provisions except clear Business expense to produce the Income, the 25% Tax rate set where the additional 10% of taxation equals approximate same burden to both brackets, and all forms of Income(Personal Wages, Capital Gains, Rents, Royalties, etc.) are taxed equally as simple economic Income.

Sales Taxes: Most criticism of Sales taxation lies in their Regressive nature. This Author states the worst aspect of Sales taxation comes in the form of reduced Consumer Demand and Consumption. Sales taxes work well to raise State revenues, but fail drastically in funding of advanced Expenditure outlays. Sales taxes exceeding 22% have been modeled to cost a percentage point in Consumption reduction, for each percentage point increase in Sales tax rate. Federal Expenditures would require a Sales tax rate well in excess of 30%.

Value-Added Tax(VAT): Increases Production Costs at each stage of Production, and will decrease Consumption by a percentage point to percentage point basis, as the VAT rate increases Product price average above 31%. A VAT to pay the entirety of Federal Expenditures would increase Consumer Prices by almost 70%.

Capital (Property) Tax: Such taxation severely cuts long-term investment, as Taxation through the construction process destroys economic incentive. Property values adversely falls, as All seek to divest of non-Productive properties and investments.

Head Tax: The Author actually likes this Tax, but not for the reason Readers think. The Head Tax can be adjusted for the modern economy in a very efficient way: Taypayers could be made to pay $100 upfront for every $1000 received by any Means. Taxpayers could or could not file for a Rebate, citing listed Expenses above a certain amount for each total amount paid as Tax. The sheer existence of the Income assures Taxpayers of short-term credit to survive until Rebate. The Government is paid first, so Government expenses are offset by the interim Interest gained. Reduced Consumer Demand will retard Inflationary pressures, while actual Consumption reduction will be less than Any of the other forms of taxation discussed.

This Author marches to the beat of a different drum, but it is one you can dance to. lgl


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