Income Tax should be abolished

April 20, 2008 9:47am CST
Income Tax penalises the working poor. You crawl out of bed first thing in the morning, put in a full day's work in a job you probably don't enjoy very much, and at the end of the week or month you get your payslip - only to find that the government's raked of 25% or more of your measly earnings before you even see it. The usual justification for Income Tax is that the rich pay more - but if taxes are too high, the super-rich just move abroad, so how does that help? And lifelong dole scroungers don't pay anything, which is hardly fare. It's a system which penalises people for doing an honest job of work and trying to get ahead and provide for their families. A better alternative to Income Tax would be to replace it with a Sales Tax on non-essential goods (excluding things like food etc). This would be better for poor people because most of their income goes on necessary stuff like rent and groceries, therefore they'd hardly pay any tax at all. If you've got a bit of spare cash and you choose to spend it on booze and tobacco then you'd pay tax on that, or you could save the money - so that makes Sales Tax a bit less coercive than Income Tax and gives the working poor a chance to put a bit by for the future so they can improve their situation. The rich on the other hand would have to pay a bit of extra tax when they buy their sports cars or yachts, or they could re-invest their money - their choice. For those interested, the Libertarian Party has a fuller explanation of the benefits of abolishing Income Tax at: www.lpuk.org
3 people like this
11 responses
@bobmnu (8157)
• United States
20 Apr 08
I would favor a national Sales Tax but only if the Government could not raise the tax rate. If they need more money than they would have to cut some programs. We would also need to make every program would have to have a sun set date (none longer than 10 years). Specific taxes like the gasoline tax should be used only for roads and not to fund pet projects of the lawmakers. They would have a vested interest in seeing that the economy stayed strong. While we are at it lets abolish the Social Security Tax and instead require that that money be placed in a private account (like elected officials have) and could be withdrawn at age 57. The big thing is the government would not be able to borrow from this fund with out you making that choice.
2 people like this
• United States
20 Apr 08
Yeah but without raising the tax rate, the government would not have enough money to operate. Cutting programs just wont be enough. Funfing for programs is already decreased. I am a firefighter and our departments funding has been cut yet again. I agree we need to cut some programs, but the fact is the government needs the tax money.
@bobmnu (8157)
• United States
21 Apr 08
What the government needs to do is look at the Constitution and see what is the role of government. The the role of government to set the gas mileage for cars? Should the state or federal government be providing money for bus transportation to one city over another or should the local tax payers pay for it if they want it. Government needs to spend the money on only those things they are allowed, by the Constitution, they are required to provide the people.
1 person likes this
21 Apr 08
I don't know anything about this Social Security Tax, but in Britain we have what's known as National Insurance, which is a sort of second income tax that everyone has to pay and which will allegedly pay for your state pension. The trouble is, it's never enough to cover the costs of the state-administered pension scheme. A gradual move to privately-funded and administered pension and welfare schemes would probably be best, but that's a whole other argument. The important point to bear in mind is that the overall burden of taxation is too much (certainly in the UK, and probably in the USA as well), and governments don't tend to be very good at spending our money wisely.
1 person likes this
• United States
21 Apr 08
Oh how I wish this would work here in the states - I do not disagree with paying taxes for certain things such as road maintenance, police/firefighters, education, defense, etc., but the taxes here in the states are outrageous! This year alone: 38% income tax (basically for every 5 days worked, 2 go to pay taxes), 2.5% property tax - bought my home with my hard earned money, but have to pay every year, 8.25% sales tax on all items except food, no state income tax, but one of the few states without it, Capital gains tax 15% for things I held over a year, 38% for less than a year - in other words, I invest the money I earn and end up losing a portion of it because I'm intelligent enough to invest instead of spend Estate tax (not in effect currently, but several politicians are trying to bring in back) up to 50%, I work hard all my life, buy a home, make some investments - give 40% of everything I earn to the government, I die and the government gets up to 50% of whats left. This years taxes have hit very hard & I'm a little upset about all of it (obviously), we made some very good investments that paid off early, and ended up being penalized. You hear so many say the capital gains taxes only effect the rich, so why shouldn't we raise them, but who do they think stimulates the economy, invests in new businesses, allows them to get a loan on their home, etc. I tell ya, I'm about ready to start burying the money in the yard, even if I lose 2.5% a year in inflation, its still cheaper than paying taxes!!!
2 people like this
@gewcew23 (8007)
• United States
21 Apr 08
We are working for the government when that much goes to government. We are renting from the Government because if you do not pay your poperty taxes they take away your house. I live in a state that does have grocery tax so the government eats before I do. Capital gains tax nothing like getting punished for suscess. Then you die and they still tax you, AMAZING.
1 person likes this
• United States
21 Apr 08
Yep - this is one of my hot buttons (couldn't tell, could you - LOL). Basically in America you are punished for being a success. Capitalism is one of the things that made American one of the richest nations on this earth, but more and more often we are being led step by step into socialism. And socialist systems just do not produce the same amount of income for the nation as a whole. Let's face it, we're human, although we do somethings out of a charitable impulse, we do much more out of self interest, like working to get ahead, to make more money, to buy a bigger house, to have the things we want rather than need. Both my husband and I come from blue-collar backgrounds, both of us worked full time and put ourselves through college - he went on to get a Ph.D., yet some yahoo is always shouting that its not fair that we have more - well dang it, we worked for it! It wasn't given to us - but it sure is being taken away from us.
2 people like this
@Arkadus (895)
• Canada
21 Apr 08
Sure government needs the tax money, but so do the people working their backsides off to earn that money. Wouldn't mind giving it to them so much if they'd ask. But they force it on you all for the 'privelege of living in this country' Last time I checked taking something that didn't belong to you was stealing...
2 people like this
21 Apr 08
Exactly. There's a very simple moral point with taxation, in that it's your money, so governments should only take what they absolutely need, and the system needs to be structured so that no-one is taxed beyond their means.
1 person likes this
@p_vadla (1685)
• India
21 Apr 08
For me collection of income tax does seem like 'giving with one hand and taking with the other'.
2 people like this
21 Apr 08
Absolutely right. The situation got so bad for the working poor that a few years ago the government brought in a system of "tax credits" so if you're on a low income you can apply for benefit payments to top it up (although no-one seems to understand how the system works). But that's just giving you your own money back to you - why didn't they just cut everyone's taxes instead? I swear, there's something about politics that attracts kleptomaniacs.
1 person likes this
@lynettebyc (2416)
• China
21 Apr 08
yeah, basically i agree with yr point. it's unfair for those hardworking guys, let's say, if i deserve this ammount of money, cause i spent my time, money, vigor to earn this, why should government cut a quarter out of my pay? but government has to find a way to use, to compensate the poor, to build facities, where do they get all of thses? Tax, of course. but maybe not income tax. tax on goods sounds like a good alternative, but not that much. i'm reading principles of economies written by mankwin( i don't know if the name's right). we can impose a heavy tax on luxury goods. as a way of helping the poor, poor one don't need these luxuries. but things turned out to be that the tax on luxuries have been equally divided by producers and buyers. and then the producers will bring forward measures to reduce the pay of general workers. see, things will not go like we think. as a matter of fact, the rich will become richer,and the poor will become poorer. our poor guys need to find ways out and get out of this vicious cycle. change our destiny and try the best. wish all guys luck
21 Apr 08
I don't think it would be as hard on producers as you think, as they wouldn't have to administer Income Tax anymore. And if they tried cutting the workers' pay - whatever the excuse - I think the unions would have something to say about that.
1 person likes this
@lvaldean (1612)
• United States
21 Apr 08
So the problem you would have with a consumption tax is the amount of tax that would have to be collected on all non-essentials to make up for the loss of federal income taxes. It is not a small number, closer to 25% as a matter of fact. Then you have to look at what a non-essential really is, it would include the following; Housing Services (utilities included) Fuel Clothing Automobiles (purchase + servicing) The list goes on. Really the only break might be on food. Add to this that most states (all but four I believe) have Income Taxes as well that they would likely not abolish. Then add that all states also have consumption based taxes, even those with Income taxes. Finally add property taxes to the mix. You might read the above and believe that I don't think a consumption based tax is the right way to go. In fact I do. However, it is not as easy as it sounds to convert our current system. It cannot simply be changed at the Federal level. The entire system of taxation has to be changed if it is to work effectively and be fair to all tax payers. The way in which our system of government and taxation was originally designed was to allow the States to tax their citizens. The Federal government did not have a legal right to tax individual citizens only the state governments for services provided. Through changes to the Constitution individual taxes was made legal without changing the state system thus citizens are doubly taxed often for the same services. By converting to a consumption based tax at a federal level without the appropriate consideration for all other taxes paid by citizens today it would potentially create a greater burden rather than relief.
22 Apr 08
Taxation in Britain's mostly levied by the central government, with the exception of Council Tax. Clearly the American situation is a bit ore complex. As far as what would be exempt from Sales Tax goes - in the British context, we've got Value Added Tax, which funds our contribution to the European Union. This has quite a few exceptions to it, as well as a lower rate for some things (including gas and electricity, I think, going from memory). Libertarian Party policy is to replace VAT with the sales tax (since we'll need to leave the EU anyway) and keep more or less the same exceptions. Obviously the details need to be worked out when we're closer to being a serious political force, but there's certainly no show-stoppers. Income Tax itself is a fairly recent innovation, historically speaking.
@Tetchie (2932)
• Australia
20 Apr 08
One of the best tax systems I ever saw was a debits tax. Have a look at this site for a full run down on it. //www.nutech2000.com/webtext/upaussie/dtaxconcept.html It basically provided for a very very fair system of tax whereby the rich, particularly companies would not be able to avoid tax at all. It would abolish tax evasion when money went offshore which was a really good tempter for me. Also it meant that the average battler would not be disadvantaged at all. 0.33% of income is the rate and is much much less than what is being paid now. The paradoxical thing is that the Government would get MORE revenue than they are getting now. I doubt it will come in because it means those in power - the rich business people who seem to have a monopoly on what policies come into play in the world - would not be in favor of it. The other thing is that it would be so easy to administer. And even if you had people who evaded tax, it still would give more money than what is presently being raised through taxes. So I too think income tax should be replaced by a fairer system.
21 Apr 08
Thanks for the link, I'll have a look at that when I get the time.
@Taskr36 (13963)
• United States
22 Apr 08
Special taxes on luxuries like yachts and sports cars will fail. You can't levy special taxes like that on the rich because it is way too easy to evade them. You're dealing with rich people who are quite capable of getting their yachts from other countries and individual sellers who can simply lie about the purchase price. Seriously, even with regular cars people lie all the time about how much they spent on used cars just to avoid the taxes. I personally have no problem with that since I think it's wrong for the government to tax used car sales when they already collected taxes on the original sale. In my opinion income tax should be substantially lower for those who are not earning as much money. I couldn't believe it when I had my first job at $4.25 an hour and the government was stealing 25% of my paycheck. I mean, as if $.25 isn't bad enough, I was only taking home like $3.00 and hour after all the deductions and social security which goes to old people who didn't pay into it like I do.
@Taskr36 (13963)
• United States
24 Apr 08
Oh stop Ainge. Now you're just making me blush. I've never had a cyberstalker before. I feel so loved. :)
1 person likes this
• United States
24 Apr 08
Stuart, It is ok, taskr knows everything, he is perfect and lovely and not an antagonist. He is wonderful in bed, lovely, and amazing. Wise, brilliant, and well educated. He can absolutly do no wrong, especially since I seem to work at starbucks(never even drank his coffee) or Barns and Noble, not sure which. Aingealicia
1 person likes this
23 Apr 08
I think you misunderstood what I said. Sales Tax would be levied on all non-essential goods, I was just using sports cars etc as an example. Sure, rich people could evade it by buying big stuff like that overseas (although price isn't always the main factor in deciding what to buy - look at Rolls Royce), but that wouldn't apply to impulse purchases and day-to-day stuff. Yes, there'd be some evasion, but no more than happens with the current range of taxes. You're first job only paid $4.25 an hour and you still had to pay tax on that? That's criminal! You might have been better off on the dole. That's one of the problems with high taxation, it can discourage people from working altogether.
@mizrae (587)
• United States
21 Apr 08
Apparently, not enough Americans are educated with respect to the Constitution! Not only is the income tax system "un-constitutional" so is the Federal Reserve (which is really a European Central Bank) We need LESS involvement with the Federal government NOT MORE. While I believe some taxes are necessary, the outrageous salaries that go to pay government officials including their benefits are not necessary. Furthermore, the monies spent "socializing" our children into this "one world government" are not necessary either. According to the constitution, the states are responsible for education NOT the mandates of the federal government. And there is a lot of spending with respect to subsidies that are NOT necessary going to corporations that certainly do not need that money, including the big agricultural corporations that are producing (according to the documentary "King Korn") crap corn that has absolutely no nutritional value at all. Yet this crap is used to produce the corn fructose found in all our foods and given to the animals as feed that in turn in used in all our "cheap" fast food restaurants. As for the cost of our occupation in Iraq, all one has to do is watch the videos like "Loose Change" to realize this was a red flag affair and our "occupation" in Iraq is against our laws. If some of you would actually educate yourselves you'd realize just exactly how much your ignorance is costing you, mentally, physically and financially.
• United States
20 Apr 08
Sounds like you were/are a fan of Mike Huckabee. That sounds like the plan he had come up with. Well I was a big fan of him to, but I had some major questions for his taxation proposal. In order to get rid of the income tax you have to get the money lost from somewhere else. You would definately have to increase the sales tax dramatically in order to cover the expense of the lost income tax. I think we would have to slightly increase the sales tax we currently have on food and other essential items. Then, we would need to dramatically increase the sales tax on other nonessential items. The fact is that the government provides so much for us, from roads, to protection. It is ignorant to think that the government does not deserve a portion of our money. It is unfair that some don't pat taxes and some are illegal immigrants who are in the country completely under the government's radar. THis alternative method of taxation, I think, could be affective, but there would have to be some major revisions. Maybe we could set up a pilot program for a year or two and just see if the method works.
@chxjian (43)
• China
21 Apr 08
of course the government needs the tax income. and in most countries the income tax is the most important kind of tax. if we abolish the income tax, we may find that the government will be very weak, it just can't a responsible government.
21 Apr 08
I think you may very well be wrong about income tax being the most important tax in most countries. Certainly in the UK the bulk of government revenue comes from other sources. In any case, big governments don't necessarily equal responsible governments. Usually it's just the opposite, the smaller and least active governments tend to govern the most free countries, whereas the biggest and most active governments are running places like Red China.
1 person likes this