So would you support a Roth IRA tax?

[cptacek]

Why would you even think that society has any claim on someone's savings? Good for society? I think that would be the downfall of society.

[KTP]

OK everyone, I wasn't SUGGESTING that we tax Roth IRA accounts

What I was doing was an indirect approach to try and get people to see that it isn't always right to tax someone extra because they have or make more money than you do.

In my other thread everyone seemed OK with the 5.4% additional tax levy proposal on people making more than 500k a year because it didn't have any negative effect on them. When I made this thread about the Roth IRA, you guys could relate to that, and have overwhelmingly said "No WAY!".

Are you starting to see my point in the other thread???

[savingmama]

KTP

I just read this thread today. As I read the thread I picked up on what you were doing. Great idea and I totally agree with you!

[Broken Arrow]

Originally Posted by KTP

OK everyone, I wasn't SUGGESTING that we tax Roth IRA accounts

OH! You lucky. I was about to go off like a rabid Picard Trekkie at someone who is suggesting that Kirk was the better Captain.

In my other thread everyone seemed OK with the 5.4% additional tax levy proposal on people making more than 500k a year because it didn't have any negative effect on them. When I made this thread about the Roth IRA, you guys could relate to that, and have overwhelmingly said "No WAY!".

Are you starting to see my point in the other thread???

Ok, I see what you did there.

I just want to clarify this first: I've always been a proponent of some kind of consumption tax rather than income tax. Don't tax someone if they really are worth $500k a year to a corporation. Rather, tax him for wanting to buy a bigger yacht than his fellow vice-presidents.

Here's the thing too. The Roth has already been taxed as income. To tax the account yet again is double dipping. To me, this isn't a fair comparison with a straight tax hike.

[cptacek]

I thought it was out of character for you. You sure sucked me in.

[cschin4]

Why would you even think that society has any claim on someone's savings? Good for society? I think that would be the downfall of society.
Reply With Quote

It is and will be the downfall of America. Ben Franklin said that "when the people learn they can vote themselves money, that is the end of the Republic". Nothing more than stealing. I am getting tired of those who are unwilling to work and be thrifty to support themselves. Hunger is a great motivator to those who won't get off of their own behinds.

[cschin4]

And, the whole notion of "because you have more than I do, I am somehow entitled to take from you for myself". What a pathetic bunch of people we have become.

[cschin4]

My parents generation actually had a sense of pride about themselves, their work, and their things. They would not accept a HANDOUT unless their very life depended on it. Shows that the character of the nation is now in question as we have lost our moral bearings.

[am_vanquish]

Originally Posted by Broken Arrow

I just want to clarify this first: I've always been a proponent of some kind of consumption tax rather than income tax. Don't tax someone if they really are worth $500k a year to a corporation. Rather, tax him for wanting to buy a bigger yacht than his fellow vice-presidents.

Best. Idea. Ever.

Now I have to go start working on the "BA for President" bumper stickers ...

[cschin4]

Best. Idea. Ever.

Um, no it isn't. Doesn't anyone hear remember history or recall the "luxury tax"? They tried that exact thing and whom did it hurt? Didn't hurt the rich guy but the yacht industry and things consumed by the rich went down the tubes and the WORKER who makes that stuff was the one who lost his job. Sheesh. You cannot tax people into prosperity. You can't make poor people rich by making rich people poor. If you allow people to prosper and enjoy their prosperity, then you open the door for others to do so as well. When you tax, tax, tax, you destroy the incentive to work, produce, and take risks with one's own capital. The exact opposite is the end result of taxation. Tax revenues to the govt actually DROP when taxes are raised. Doesn't anyone understand this? Ugh.

[Like2Plan]

Originally Posted by KTP

OK everyone, I wasn't SUGGESTING that we tax Roth IRA accounts

What I was doing was an indirect approach to try and get people to see that it isn't always right to tax someone extra because they have or make more money than you do.

In my other thread everyone seemed OK with the 5.4% additional tax levy proposal on people making more than 500k a year because it didn't have any negative effect on them. When I made this thread about the Roth IRA, you guys could relate to that, and have overwhelmingly said "No WAY!".

Are you starting to see my point in the other thread???

KTP,
Yep--I knew that was what you were up to.

I don't like additional tax levies, either. Folks seem to forget that the people making 500K are already paying more in taxes. Even if the tax rate was the same--say a straight 10% for example purposes, the 500K income would pay 50k in taxes vs the 50K income would pay 5k...And, as we all know the tax rate tables are not linear.
I think AMT is another case of an additional levy and it is so convoluted, it is nearly impossible to figure out. (It would really tickle me if AMT would tax the heck out of folks in congress... )

Just for the record: They are already doing income testing for SS. If you have saved and planned for your retirement and make a certain income, your SS is taxed. If you make a certain income, you will pay more for your part B medicare. Medicare Part B per person premiums 2010...

[Broken Arrow]

Originally Posted by cschin4

Um, no it isn't. Doesn't anyone hear remember history or recall the "luxury tax"? They tried that exact thing and whom did it hurt? Didn't hurt the rich guy but the yacht industry and things consumed by the rich went down the tubes and the WORKER who makes that stuff was the one who lost his job. Sheesh. You cannot tax people into prosperity. You can't make poor people rich by making rich people poor. If you allow people to prosper and enjoy their prosperity, then you open the door for others to do so as well. When you tax, tax, tax, you destroy the incentive to work, produce, and take risks with one's own capital. The exact opposite is the end result of taxation. Tax revenues to the govt actually DROP when taxes are raised. Doesn't anyone understand this? Ugh.

Huh? I respect you and all, but this doesn't make any sense.

I'm proposing to offload some of the income tax in favor of some consumption tax. I'm not asking people to take on extra tax burdens on TOP of income tax.

Not taxing income means more in the pockets of those who work, especially ones who put in extra work. This helps to encourage productivity in our economy-- something that's badly needed-- and the extra money would not deter consumption and spending... because again, while you may pay more taxes for buying something, you also pay less when you make money.

The government has to get their revenue somehow.... But if you really want to stick with more income tax, that's fine too. That's where we are right now. Or do you mean you would prefer that taxes in general be like...abolished?

Eh, whatever. This is just a mere musing on my part anyway.

[cschin4]

Huh? I respect you and all, but this doesn't make any sense.


This makes complete sense. Less taxation means more money in the pockets of producers who in turn create more production and thus revenues to the govt go up because MORE is being produced at lower taxation rates. As taxation increases, businesses and entrepeneurs have less capital to work with and business rates shrink and ultimately the govt loses revenue. Then it becomes a vicsious cycle as govt raises rates to get more revenue while ultimately destroying the very thing that sustains it in the first place. This is why the "luxury tax" turned out to be a disaster for working people and for the govt as well.

[cschin4]

The government has to get their revenue somehow.... But if you really want to stick with more income tax, that's fine too. That's where we are right now. Or do you mean you would prefer that taxes in general be like...abolished?

The bloated ballooning govt doesn't need MORE revenue. It needs to learn to live on a budget and the word "no". No matter how much money you send the govt, it will NEVER be enough. They will spend every dime and more. They already spend more than a $1 for any $1 dollar you send now. How in the world do you really think we will sustain that? Are we immune to the laws of economics? Do you really think we can just go on and on spending whatever we want and squeezing the taxpayers.
The govt needs some money to operate. The govt can and should provide some BASIC services like the military, etc. Other than that, they need to get their noses out of people's lives.
I would favor a flat tax and that's it. I support NO new taxes period. Cut spending. live on less govt freebies. Ultimately that is what is going to happen anyway.

[am_vanquish]

I really had an idea of wear KTP was going with this, but it still doesn't change my mind. To me, there's a HUGE difference between taxing the lifetime savings of a person who scrimped together a million in savings based on a low salary (through hard work and living below their means) and a person who has a very high income. Maybe it's just me, but KTP's analogy is comparing apples to oranges ... not apples to apples.

The consumption tax goes along the same lines. I wasn't arguing the political merits of that philosophy (I'm not a huge fan of politics). Instead, I was expressing my appreciation for the moral principle it supports ... it would FINALLY be a government policy that gives people an INCENTIVE to save their money instead of spending every dime. I like that philosophy, no matter what you tell me about historical yacht company performance.

Now, another tax policy that doesn't make sense to me is the lack of cost-of-living adjustments. A 500k income in Mississippi is definitely NOT the same thing as a 500k income in NYC ... why pay the same taxes?

[disneysteve]

Originally Posted by cschin4

Doesn't anyone hear remember history or recall the "luxury tax"? They tried that exact thing and whom did it hurt?

Well, the luxury tax wasn't exactly the same as a general consumption tax because it didn't tax all purchases the same. It put a substantial extra tax on items over a certain price and vehicles over a certain weight as I recall. A straight consumption tax, like a national sales tax, would tax everything equally, like 1% on all purchases big or small, cheap or expensive. I'm not sure that would be as big a deterrent to spending as the luxury tax was.

Not saying I support such a tax. Just saying I don't think it is the same as the luxury tax.

[cschin4]

steve - The constant drumbeat about taxation is always "tax the rich" because they don't "need" it. First, we are missing the fundamental principle that one person is NOT entitled to the property of another.
And, in the real world, taking what belongs to another and "redistributing" it helps no one and hurts everyone.

[disneysteve]

Originally Posted by cschin4

steve - The constant drumbeat about taxation is always "tax the rich" because they don't "need" it. First, we are missing the fundamental principle that one person is NOT entitled to the property of another.
And, in the real world, taking what belongs to another and "redistributing" it helps no one and hurts everyone.

I agree. Again, I wasn't saying that I support one tax or the other. I was just saying the luxury tax a few years ago wasn't the same as what most consumption tax proponents support as far as I know.

[Broken Arrow]

I think, sometimes, you run into someone who is so strongly opinionated one way or another, that it's best that I just don't get involved. And somehow, I'm thinking this is one of those times.

Um, but I can't help but say this:

We have no choice over income tax, whereas we would have a choice in consumption tax.

That is, most of us have no choice but to work for a living. We have to, and that income WILL get taxed.

A consumption tax though? In the example of the yacht, you don't have to buy one. Or, you can and pay the taxes along with it. It's your choice, but at least you have a choice.

[Snodog]

Originally Posted by cschin4

Tax revenues to the govt actually DROP when taxes are raised. Doesn't anyone understand this? Ugh.

Does that mean revenues increase when you lower taxes? Excellent! Then lets decrease the tax rate to 0%.

Supply side economics may have worked in the 80's when tax rates were as high as 70%. Its doubtfull a tax raise today will decrease revenues with as low as tax rates currently are.

I agree with Broken Arrow that some form of consumption tax is the fairest way to collect revenue.