The casual attitude towards income taxation

[Tyson]

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

[onlykelsey]

I'd rather have them on a border.  Manmade island might be ideal.

[Yaeger]

Again, you misunderstand.  Rights exist whether or not the majority agrees with them or not.  Rights may be regularly violated by a society, and many often are even in many nations today; but life is not always fair, and even that doesn't necesarily mean your rights are being violated.  If you would like to have a deeper discussion about what rights actually are, I'm willing.  But I get the impression that there are many in this thread for whom the concept is foreign to them; and they, instead, have come to believe that privileges and/or courtesies are rights.  Such a side topic would be lengthy, and likely difficult for many here to grok.

The missing link is that you (and winkeyman) keep failing to make is explaining why the right to your income (in dollars) is equally as unalienable/universal as something such as the right to live.

Right now, taxation on income occurs if you earn income with value reflected in a currency provided by some government. Currency has value because of a government and society. By choosing to accept payment in dollars you are accepting that your income is backed by the ability of the United States to maintain its value. You cannot separate your "earnings" from the fact that those earnings have meaningful value because of the society you live in. If I paid you 100,000 MMM bucks for a yearly salary, you would pay no taxes. But that would have no value, either...

This causes me to find it at the very least allow that it is ethical to tax income. The value of the labor I generate by definition does not exist outside the society where I live, when I am paid in dollars.

Normally the above will not apply when you generate value which has meaning separate from that currency too. If I, for example, garden intensively and grow $1,000 worth of vegetables and fruit for my family from $10 worth of supplies - I pay no income taxes on this. Nearly all DIY activities allow me to directly benefit from my labor without paying taxes, normally because this value is generated separate from the medium of dollars.

That's why socialist countries like Sweden and Denmark have large black market economies, but it's illegal to come up with another form of currency to use as tender. This is where you get into a value discussion about rights and where your argument goes wrong. It's not about the paper money if you force everyone under threat of force to use it, and make transactions involving other things illegal. You could pay employees in monopoly money, and they could accept that. It'd still be illegal. You exchanging labor for MMM bucks or turnips is illegal.

http://www.lexology.com/library/detail.aspx?g=f25b0a20-89ad-42b6-a156-21d97fa71a93

In a more realistic sense, that fiat currency has value everywhere as long as it's redeemable in trade. It's just a piece of paper. It's about the principle of taxing labor. Aside from the fact that no country in history has ever managed to tax itself into prosperity, it's a cheap ploy to exploit citizens that have more than you.

[Tyson]

The USA had a tax rate of 90% on top income earners after WWII until Kennedy lowered it.  So clearly the USA taxed itself into prosperity.  Unless you want to argue that the USA was not prosperous after WWII and before the downturn in the 70's?

[Yaeger]

The USA had a tax rate of 90% on top income earners after WWII until Kennedy lowered it.  So clearly the USA taxed itself into prosperity.  Unless you want to argue that the USA was not prosperous after WWII and before the downturn in the 70's?

Sure, they paid roughly the same effective tax rate they do now. There we so many deductions and exemptions. Also, income taxes are only part of overall taxes applied to workers. SS was 2% instead of 12.4% today. Unemployment, worker's comp, Medicare didn't exist. State taxes and local taxes were lower. So were property taxes. They didn't have the army of taxes added by the ACA. et cetera et cetera. Politician's love talking about that number. In general, most Americans are too stupid to really know (or care) what taxes they pay, it only matters if there's a perception of someone paying more or less than they do.

Kennedy lowering the high marginal tax rate from 91% to 70% (it really didn't happen until after his death), actually increased tax revenue. The real argument is why and that turned into an idea that economists call the Laffer Curve.

[Tyson]

The Laffer curve does make me laugh....

[Yaeger]

The Laffer curve does make me laugh....

This is no Laffing matter.

[Tyson]

You a punny guy!  :P

[MoonShadow]

Again, you misunderstand.  Rights exist whether or not the majority agrees with them or not.  Rights may be regularly violated by a society, and many often are even in many nations today; but life is not always fair, and even that doesn't necesarily mean your rights are being violated.  If you would like to have a deeper discussion about what rights actually are, I'm willing.  But I get the impression that there are many in this thread for whom the concept is foreign to them; and they, instead, have come to believe that privileges and/or courtesies are rights.  Such a side topic would be lengthy, and likely difficult for many here to grok.

The missing link is that you (and winkeyman) keep failing to make is explaining why the right to your income (in dollars) is equally as unalienable/universal as something such as the right to live.

Actually, Winkeyman has tried to do this several times in this thread, you just seem to have a hard time accepting the logic.  Let me try again.  I, exclusively, own myself.  Notice that I didn't ask you to accept that I own myself, because I own myself regardless of whether you accept that as true or not.  Furthermore, I recognize that you exclusively own yourself, whether or not you care.  It is based upon this simple premise that slavery is wrong.  There need not be any other justification for that position.  Yet, if claiming ownership over the entire life of another human being is wrong, so to is a claim to a portion of that life, thus temporary conscription is also wrong.  As I own myself, I also own portions of my lifespan.  Only I have the right to trade portions of my lifespan away in exchange for compensation, and if I do so, the compensation is also exclusively mine.  A claim by another; be it a slave-master, a sovereign monarch, or a democratically elected government; upon that any portion of that compensation is either theft or slavery, depending upon how you look at it.

Now lets look at an alternative method of taxation, 'sin' type excise taxes.  Specifically, lets look at a pair of taxes that were the primary support of the federal government prior to 1913; taxes on alcohol & tobacco.  After I have worked my 8 hours, trading a portion of my lifespan for my agreed upon compensation; I very much enjoy stopping at a bar on the walk home.  I know full well that the beer & cigar I want are heavily taxed, so I have a choice to either enjoy my vices & contribute a significant portion of my day's wages to the government I may despise, or forgo my vices & keep my wages.  The point here is, the choice is mine, and that makes all the difference.

Right now, taxation on income occurs if you earn income with value reflected in a currency provided by some government. Currency has value because of a government and society. By choosing to accept payment in dollars you are accepting that your income is backed by the ability of the United States to maintain its value. You cannot separate your "earnings" from the fact that those earnings have meaningful value because of the society you live in. If I paid you 100,000 MMM bucks for a yearly salary, you would pay no taxes. But that would have no value, either...

There is a lot wrong here, as you obviously don't know how fiat currencies actually work, nor how monies work (and probably not what they are); but I don't have time for that.  Suffice for now to say that the method of compensation is irrelevant to the above argument. 

This causes me to find it at the very least allow that it is ethical to tax income. The value of the labor I generate by definition does not exist outside the society where I live, when I am paid in dollars.

And by what logic do you claim that whatever value society may, or may not, add to my labors have any bearing whatever on the fact that I own myself?  Does society have a claim upon me, because I live within it?  If so, how?

Normally the above will not apply when you generate value which has meaning separate from that currency too. If I, for example, garden intensively and grow $1,000 worth of vegetables and fruit for my family from $10 worth of supplies - I pay no income taxes on this. Nearly all DIY activities allow me to directly benefit from my labor without paying taxes, normally because this value is generated separate from the medium of dollars.

I do this too, but you do realize that your government does claim a portion of the value of your garden as well, right?  Again, the fact that federal reserve notes are not involved in this activity does not relive you from the obligation to pay taxes upon these gains.  The only reasons that the IRS doesn't make a big deal out of this type of activity are 1) the absence of a transaction in a currency makes the estimation of the value of the activity difficult, 2) to do so with any kind of vigor would highlight the absurdity of the tax regime that would lay claim to your tomatoes and 3) they would likely not net much or any actual tax revenue beyond the overhead of employing the additional tax agents that such a level of enforcement would require.  If you doubt that you owe taxes upon your DIY activities, just call the IRS, they will let you know.

[MoonShadow]

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

Have you ever heard of the Free State Project?

[Tyson]

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

Have you ever heard of the Free State Project?

I hope it happens.  I'm not kidding, that sounds like a great idea.

[josstache]

You could pay employees in monopoly money, and they could accept that. It'd still be illegal. You exchanging labor for MMM bucks or turnips is illegal.

http://www.lexology.com/library/detail.aspx?g=f25b0a20-89ad-42b6-a156-21d97fa71a93

You are free to compensate your employees however you like.  The compensation cannot be designed to defeat tax laws. Your employees must pay incomes taxes according to the economic value, denominated in US dollars, of whatever you have paid them.

Normally the above will not apply when you generate value which has meaning separate from that currency too. If I, for example, garden intensively and grow $1,000 worth of vegetables and fruit for my family from $10 worth of supplies - I pay no income taxes on this. Nearly all DIY activities allow me to directly benefit from my labor without paying taxes, normally because this value is generated separate from the medium of dollars.

I do this too, but you do realize that your government does claim a portion of the value of your garden as well, right?  Again, the fact that federal reserve notes are not involved in this activity does not relive you from the obligation to pay taxes upon these gains.  The only reasons that the IRS doesn't make a big deal out of this type of activity are 1) the absence of a transaction in a currency makes the estimation of the value of the activity difficult, 2) to do so with any kind of vigor would highlight the absurdity of the tax regime that would lay claim to your tomatoes and 3) they would likely not net much or any actual tax revenue beyond the overhead of employing the additional tax agents that such a level of enforcement would require.  If you doubt that you owe taxes upon your DIY activities, just call the IRS, they will let you know.

You are correct that transactions need not involve exchange of US dollars in order to be taxable, however, the value of vegetables grown in your home garden is not subject to income tax, so long as you do not exchange them for money or other value.  Similarly, the following are examples of things not subject to income tax: (i) the rental value of the home you own and live in, (ii) the value of the haircut you give yourself , (iii) the value of the cleaning up you do around the house.

[MoonShadow]

You could pay employees in monopoly money, and they could accept that. It'd still be illegal. You exchanging labor for MMM bucks or turnips is illegal.

http://www.lexology.com/library/detail.aspx?g=f25b0a20-89ad-42b6-a156-21d97fa71a93

You are free to compensate your employees however you like.  The compensation cannot be designed to defeat tax laws. Your employees must pay incomes taxes according to the economic value, denominated in US dollars, of whatever you have paid them.

Normally the above will not apply when you generate value which has meaning separate from that currency too. If I, for example, garden intensively and grow $1,000 worth of vegetables and fruit for my family from $10 worth of supplies - I pay no income taxes on this. Nearly all DIY activities allow me to directly benefit from my labor without paying taxes, normally because this value is generated separate from the medium of dollars.

I do this too, but you do realize that your government does claim a portion of the value of your garden as well, right?  Again, the fact that federal reserve notes are not involved in this activity does not relive you from the obligation to pay taxes upon these gains.  The only reasons that the IRS doesn't make a big deal out of this type of activity are 1) the absence of a transaction in a currency makes the estimation of the value of the activity difficult, 2) to do so with any kind of vigor would highlight the absurdity of the tax regime that would lay claim to your tomatoes and 3) they would likely not net much or any actual tax revenue beyond the overhead of employing the additional tax agents that such a level of enforcement would require.  If you doubt that you owe taxes upon your DIY activities, just call the IRS, they will let you know.

You are correct that transactions need not involve exchange of US dollars in order to be taxable, however, the value of vegetables grown in your home garden is not subject to income tax, so long as you do not exchange them for money or other value.  Similarly, the following are examples of things not subject to income tax: (i) the rental value of the home you own and live in, (ii) the value of the haircut you give yourself , (iii) the value of the cleaning up you do around the house.

Again, this is only because that would be absurd & incredibly difficult to calculate.  Not because the claim hasn't been made in the past.  That said, there certainly are DIY type activities that a tax would be required, but not usually paid. For example, a child's lemonade stand, the neighborhood kid cutting lawns for cash, yard sales.  Yes, they are all taxable because they involve a transaction; but that is because the transaction is what determines the taxable value, thus making the calculations possible; not because the taxing authority doesn't claim that other forms of value creation aren't taxable events.  They certainly have in the past.  Exchanges-in-kind, or labor-barter agreements not written down, are just next to impossible to prosecute; so the IRS agents have no leverage.  And even they know these kinds of events being taxed are absurd.  A bumper crop in the kitchen garden would likely be short-term capital gains; if they could determine what you actually drew from the garden, how much the market value for such things were in your area at that time, and how much your initial seed stock cost.

[josstache]

Although I am not a tax lawyer, and can't be bothered to look up a definitive answer after a quick google search was unproductive, my sense is that the tax code/IRS do not interpret any of the examples I posted as "income".  Income tax is, not surprisingly, only applied to "income" and I believe income only exists when you receive value from outside yourself.

Now, one could make the argument that this could always be reinterpreted if it became significantly more attractive for the government to tax generation of value that is purely internal to the taxpayer, but I want to make it clear that (I am relatively confident) current law doesn't create tax liability for the examples I gave -- it is not simply a matter of enforcement.  For example, it would be easy, relative to the addition revenue provided, for the government to tax the rental value of the home you own and live in.

[GuitarStv]

People have the right to defend themselves. So they have the right to delegate the power and responsibility for fighting a self-defensive war to a government that represents them

People do not have the right to steal land owned by other people. Therefor a government representing them has no right to wage a war to conquer and annex territory.

This is pretty simple stuff.

Since all property rights in the US are based on stealing the land from the original natives living in the area, are they null and void?

I'm not going to claim that this kind of thing never happened.  It did.  But for the most part, it's a myth.  There were very distinct cultural differences between the American Native 'Indians' East of the Mississippi River from those tribes West of the Plains.  Those West of the Plains didn't have a compatible belief in land ownership, while those along the Eastern coast mostly did.  The Iroquois nations were farmers, not nomadic hunter/gatherers.  However, the populations of the Eastern tribes were also rather sparse; so there were whole swaths of unclaimed country that early European settlers could homestead without conflicts, and later for which they traded for.  This is how the vast majority of real property was acquired by settlers of the original 13 colonies, not by conquest.

And don't forget, GuitarStv, we've had similar conversations about this before.  I have a greater claim to all of Ottawa, if it simply comes down to whomever's ancestors got to this continent first.

Land theft from Native Americans aside (I could have argued that nobody in Texas owns their land because it was stolen from Mexicans, which in turn was stolen from the Querechos and the Teyas).  My point was simply that rights (like the right to own your land) are rather subjective.  Most people in the world have deemed taking land by force to be normal and a natural way of doing things . . . provided enough years have gone by since the land was stolen.

Winkeyman's comment about land ownership rights turns out not to be something he actually believes (because he appears to support modern US property rights over the rights of the original land owners - otherwise none of the contracts and law regarding US property rights can be adhered to), and not at all as simple as he was claiming it was.

[ender]

Actually, Winkeyman has tried to do this several times in this thread, you just seem to have a hard time accepting the logic.  Let me try again.  I, exclusively, own myself.  Notice that I didn't ask you to accept that I own myself, because I own myself regardless of whether you accept that as true or not.  Furthermore, I recognize that you exclusively own yourself, whether or not you care.  It is based upon this simple premise that slavery is wrong.  There need not be any other justification for that position.  Yet, if claiming ownership over the entire life of another human being is wrong, so to is a claim to a portion of that life, thus temporary conscription is also wrong.  As I own myself, I also own portions of my lifespan.  Only I have the right to trade portions of my lifespan away in exchange for compensation, and if I do so, the compensation is also exclusively mine.  A claim by another; be it a slave-master, a sovereign monarch, or a democratically elected government; upon that any portion of that compensation is either theft or slavery, depending upon how you look at it.

The choice is yours to earn income significant enough to be taxed in whatever country you live in, and that makes all the difference.

Now lets look at an alternative method of taxation, 'sin' type excise taxes.  Specifically, lets look at a pair of taxes that were the primary support of the federal government prior to 1913; taxes on alcohol & tobacco.  After I have worked my 8 hours, trading a portion of my lifespan for my agreed upon compensation; I very much enjoy stopping at a bar on the walk home.  I know full well that the beer & cigar I want are heavily taxed, so I have a choice to either enjoy my vices & contribute a significant portion of my day's wages to the government I may despise, or forgo my vices & keep my wages.  The point here is, the choice is mine, and that makes all the difference.

Let's say the government reads this and decides, "you know what, MoonShadow is right. We should instead fund the federal government with 25% national sales tax and 25% tariff on everything and remove all income taxes." Or whatever the percentage would be, cursory google suggests about that percentage. Are you actually going to say this is somehow "the choice is [yours]" if everything purchased in the country has mandatory consumption taxes? Is this scenario really more ethical to you?

I see a government arbitrarily deciding what is a "sin" and what is not a "sin" and adjusting excise taxes as arguably less ethical than otherwise universally applied income taxes. Do you really think a government imposing variants of, "well we want people to have cars so we won't tax them. But trucks, we'll make nationally taxable because REASONS" is more ethical than universally applied income taxes? What if it's "just" a decision to not tax food? What if the government arbitrarily decides that <X> is a "sin" and taxes appropriately - is this fair or ethical? How is government regulation of what people spend their money on, through largely variable excise taxes, more ethical than flatly applied income taxes (which have their own share of government "encouraged" activities, such as 401k/IRAs/etc).

And the main part that is missing: why is the government taxing one voluntary transaction (exchanging goods earned through labor for compensation) somehow ethically different than taxing another voluntary transaction (exchanging compensation for labor)? If it is not ethical to tax one voluntary transaction I fail to see how it is somehow "ethical" (?) to tax the other because the exact same argument applies. Both scenarios are voluntary exchanges. Labor and consequentially compensation has value precisely because it can be exchanged for other services/goods.

Rewording your argument ever so slightly, "Only I have the right to sell the fruits of my labor away in exchange for compensation, and if I do so, the compensation is also exclusively mine." How is that scenario at all different from taxing income, ethically?

Excise taxes are not any less an act of theft or slavery philosophically and ethically than taxing income. You want to use your earned and untaxed compensation to buy <X>? The government will require you to pay a cost for that transaction. Excise taxes may be more palatable emotionally but the same moral principles apply in both scenarios. Both are compulsory taxation upon voluntary transactions and both have the net effect of requiring a percentage of the labor you used to generate the income to be given to the government.

There is a lot wrong here, as you obviously don't know how fiat currencies actually work, nor how monies work (and probably not what they are); but I don't have time for that.  Suffice for now to say that the method of compensation is irrelevant to the above argument. 

Perhaps you could try being helpful rather than condescending. It would get you much further, though admittedly I do not know what your goals in this discussion are, maybe your goal is to feel superior to others?

[onlykelsey]

The USA had a tax rate of 90% on top income earners after WWII until Kennedy lowered it.  So clearly the USA taxed itself into prosperity.  Unless you want to argue that the USA was not prosperous after WWII and before the downturn in the 70's?

Sure, they paid roughly the same effective tax rate they do now. There we so many deductions and exemptions. Also, income taxes are only part of overall taxes applied to workers. SS was 2% instead of 12.4% today. Unemployment, worker's comp, Medicare didn't exist. State taxes and local taxes were lower. So were property taxes. They didn't have the army of taxes added by the ACA. et cetera et cetera. Politician's love talking about that number. In general, most Americans are too stupid to really know (or care) what taxes they pay, it only matters if there's a perception of someone paying more or less than they do.

Kennedy lowering the high marginal tax rate from 91% to 70% (it really didn't happen until after his death), actually increased tax revenue. The real argument is why and that turned into an idea that economists call the Laffer Curve.

This is a good point. Tax rate alone doesn't tell the whole story. I'm still not particularly worried about our tax burden (even though I'll pay 100k this year) but it's sloppy to point at just the marginal rate without discussing the base.

[josstache]

There's also the fact that, when you have a top marginal rate of 90%, you won't see anyone actually paying that rate unless they are extremely ignorant of taxes, or make too much money by accident.  For example, when you are negotiating your compensation with an employer, you would not find much value in getting cash compensation taxed at 90%, so your salary would likely remain below that level.

It is for this very reason that Piketty suggests such extremely high marginal rates would be a good idea to constrain what he views as salaries that are uselessly high for "super managers".  In other words, paying someone a salary of $30 million probably doesn't encourage them to perform any better than a salary of $29 million, nor does it benefit shareholders, the economy or society (in his view).

This makes sense to me for company employees, but I do believe it would strongly encourage advanced tax planning strategies (which are economically unproductive).  Additionally, there may be, for instance, self-employed people who can effectively choose how much money they make depending on how much work they do, and this would discourage them from working as hard as they could.

[onlykelsey]

There's also the fact that, when you have a top marginal rate of 90%, you won't see anyone actually paying that rate unless they are extremely ignorant of taxes, or make too much money by accident.  For example, when you are negotiating your compensation with an employer, you would not find much value in getting cash compensation taxed at 90%, so your salary would likely remain below that level.

It is for this very reason that Piketty suggests such extremely high marginal rates would be a good idea to constrain what he views as salaries that are uselessly high for "super managers".  In other words, paying someone a salary of $30 million probably doesn't encourage them to perform any better than a salary of $29 million, nor does it benefit shareholders, the economy or society (in his view).

This makes sense to me for company employees, but I do believe it would strongly encourage advanced tax planning strategies (which are economically unproductive).  Additionally, there may be, for instance, self-employed people who can effectively choose how much money they make depending on how much work they do, and this would discourage them from working as hard as they could.

Agreed, but my understanding is that the tipping point around which people start thinking "Maybe I won't take that extra shift/promotion/etc" is more like 65% marginal.  I'm solidly in the 33% bracket and  can't imagine that pushing me to the 35% would have any effect on my decisions, especially given that it wouldn't change my payroll taxes much at all as I've passed the 117K or whatever the SS max is this year.

[Jeremy E.]

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

Why do I have to be the guinea pig...

[GuitarStv]

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

Wasn't Galt's Gulch enough?

[onlykelsey]

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

Wasn't Galt's Gulch enough?

Apparently not.  Maybe each generation needs to figure things out for themselves.

[radram]

In response to the comments from arbelspy and radrem along the lines of "taxes are the price we pay to live in society."

Ok, fine, let's say we take this for granted.

My question is, where does it end?

Here is the issue I have with your original post....  I CAN'T take this for granted, because the original post refuses to acknowledge  that it does exist and it fact implies that it can not exist, or at least does not provide for an ethical solution to the conflict regarding ethics and freedom.  We can not yet discuss where it ends because we have not yet agreed where it begins. 


If you agree that this conflict exists with no solution, then we can begin to discuss the "where does it end"... I am very much looking forward to that.  We could easily get another 9 pages of discussion. 

Otherwise, I am equally interested in your opinion as to why this conflict either does not exist or is ethically solved in a way that you can explain.

Actually, Winkeyman has tried to do this several times in this thread, you just seem to have a hard time accepting the logic.  Let me try again.  I, exclusively, own myself.  Notice that I didn't ask you to accept that I own myself, because I own myself regardless of whether you accept that as true or not.  Furthermore, I recognize that you exclusively own yourself, whether or not you care.  It is based upon this simple premise that slavery is wrong.  There need not be any other justification for that position.  Yet, if claiming ownership over the entire life of another human being is wrong, so to is a claim to a portion of that life, thus temporary conscription is also wrong.  As I own myself, I also own portions of my lifespan.  Only I have the right to trade portions of my lifespan away in exchange for compensation, and if I do so, the compensation is also exclusively mine.  A claim by another; be it a slave-master, a sovereign monarch, or a democratically elected government; upon that any portion of that compensation is either theft or slavery, depending upon how you look at it.

Moonshadow - Based on your premise that you and I own our entire selves, do you believe that freedom CAN indeed come with no responsibility?  Do you believe there is a "price" to pay, but it is unethical to do so?  Is there another solution?

Maybe we should just let these guys take over Idaho and implement their policies and see how they actually work out in real life....

I would also enjoy to see this experiment, but my same premise that with freedom comes responsibility makes it  impossible to even imagine a scenario to test, let alone implement.  This example would breakdown because: 

Idaho is landlocked and surrounded by the US and Canada.  It is impossible for 2 nations to protect their lands without lands contained within it also being protected.  As a result, "Idaholand" would have a clear advantage without responsibility. You could either refuse to support being protected or admit these is a cost simply being born an Idahoian (could we just call them 'hoes for short ... people of the STATE of Idaho, specifically Jeremy E, please don't hate me ).  Still an interesting example but not in the "I am free without responsibility" utopia we would be searching for.

[MoonShadow]

Moonshadow - Based on your premise that you and I own our entire selves, do you believe that [liberty] CAN indeed come with no responsibility?  Do you believe there is a "price" to pay, but it is unethical to do so?  Is there another solution?

No I do not.  As I said before, liberty is the right to do as you wish within the constraints of the rights of others.  And yes, I do agree that there is a "price to pay" to live within a free society; at least one that expects to remain free.  And yes, there is another solution.  Again, as I have mentioned several times, the United States managed to raise enough revenue for it's core government functions until 1913. It was also kept much smaller due to these constraints, which is also a good thing.  As Ender has pointed out, just about any tax can be regarded as unethical from a certain perspective, and to varying degrees. This alone should make you consider how libertarians would view taxation generally. However, for the reasons that I & Winkyman have presented, the direct personal income tax is the most egregious of tax schemes in our modern world; and if it is indeed necessary for the good and proper functions of government, then that same government need be kept as small as possible for the same reason.

[golden1]

This is kind of fascinating and sad at the same time.  We are looking at people at various stages of moral and ethical maturity debating each other in this thread and talking past each other.

There are a lot of assumptions being made that most people aren't even aware are being made.

Winkeyman appears to be a moral absolutist that holds individual human rights as being more important than societal benefit.  I know it isn't my business, but I honestly would be very interested in his age, career, and background (working class, college graduate) because a lot of people's moral code stems from this stuff, although not always.   It makes me wonder what shaped him into viewing the world in the way he does.  You cannot separate people's moral standards and outlooks from their upbringing and where they came from, what they have experienced.   

I used to feel similarly to Winkeyman.  When I was in college, I was also a moral absolutist.  The very idea that basic morals were at all fungible never really occurred to me.  Life experience has taught me differently.   

Many, many of these libertarian arguments hold personal liberty as something sacred and that people's rights can be argued and protected in isolation from their fellow man.  They view any act that a human imposes on another without their consent as a violation or unnatural.  It just isn't the truth and shows a fundamental misunderstanding of human nature. 

Every human being is a product of the genes of two other human beings and is here without their consent.  Two people have to work together to create a potential human being (embryo).  Pregnancy, which is necessary for each human to survive to birth, involves the usage of a mother's human body in order to grow another human to the stage of birth.  Once that human is born, a child won't survive to adulthood without the direct care of another human being.  This is basic biology.  Without humans working together, there are no humans.  Without people giving up part of their own bodies, their own lives, humans don't exist to even have rights.

Human rights and societal rights aren't really separate concepts because you can't, by definition, separate the individual from a society without the death of both the individual and the society.  These two competing forces intertwine in all sorts of ways that are complex and beautiful and sometimes terrible and heartbreaking.  We are eusocial in many respects, more similar to ants than to cats. 

This tension is at the root of many of our ethical dilemmas and political struggles.  And in a sense, Winkeyman is right, when we necessarily have to compel parts of society to act in ways that benefit the whole society, that should not be taken on "casually".  But I don't see that rules that benefit the society at the expense of the individual are always unethical.  Individual rights can't hold primacy over societal rights and vice versa because they are hopelessly entangled. 

[Tyson]

Part of why I'm so progressive now is that I used to be a staunch Libertarian/Objectivist when I was younger. 

Look, the net net is that we all have to pay in to the system, and then we get to decide where that money goes.  Whether it's a sales tax, an income tax, a capital gains tax, or property taxes, is secondary.  The main thing is what we decide to spend the money on. 

I think that the way things are set up in the USA is pretty sweet.  If it were really all that bad, you'd see a real flight of people away fro the USA to somewhere else.  But you don't.  Why not?  And don't say "family ties" or inertia or some other BS reason.  Clearly people from other countries overcome that stuff all the time in order to move here, so we should be at least as able to move as they are. 

[arebelspy]

I used to feel similarly to Winkeyman.

Part of why I'm so progressive now is that I used to be a staunch Libertarian/Objectivist when I was younger. 

It's interesting how many of us this is true for.  I definitely think there's an age correlation; most tend to "outgrow" it.  A few never do.

Not implying it's a negative thing, per se, just commenting on how in the majority of cases, that belief seems to change with age.

[onlykelsey]

I used to feel similarly to Winkeyman.

Part of why I'm so progressive now is that I used to be a staunch Libertarian/Objectivist when I was younger. 

It's interesting how many of us this is true for.  I definitely think there's an age correlation; most tend to "outgrow" it.  A few never do.

Not implying it's a negative thing, per se, just commenting on how in the majority of cases, that belief seems to change with age.

The world seemed a lot more black and white at 18 than now for most of us, I imagine. 

[arebelspy]

And in one's 20s.  Sliding scale.

[Tyson]

I used to feel similarly to Winkeyman.

Part of why I'm so progressive now is that I used to be a staunch Libertarian/Objectivist when I was younger. 

It's interesting how many of us this is true for.  I definitely think there's an age correlation; most tend to "outgrow" it.  A few never do.

Not implying it's a negative thing, per se, just commenting on how in the majority of cases, that belief seems to change with age.

Speaking for myself, when I was younger I always assumed that the playing field was more or less level, and the system was pretty much equal.  I also saw society as basically made up of a bunch of rugged individualists.  And if someone didn't make it, it was because that person was lazy, stupid, etc...

As I get older I see that the system is not fair at all, and in fact it is set up to actively screw over a large number of people.  So, a lot of my switch to being a progressive has revolved around simply wanting to address/fix issues of active unfairness in our current system.

I also started to understand that humans are social animals, we are tribal by nature.  So rather than fight against that reality and rail against it, I've come to accept it, and I now understand that any solutions we develop need to be good "for us" and not just "for me".

[GuitarStv]

I used to feel similarly to Winkeyman.

Part of why I'm so progressive now is that I used to be a staunch Libertarian/Objectivist when I was younger. 

It's interesting how many of us this is true for.  I definitely think there's an age correlation; most tend to "outgrow" it.  A few never do.

Not implying it's a negative thing, per se, just commenting on how in the majority of cases, that belief seems to change with age.

Maybe it's a tendency towards less extreme views?  I was quite enamored of communism at 16.

[winkeyman]

This is kind of fascinating and sad at the same time.  We are looking at people at various stages of moral and ethical maturity debating each other in this thread and talking past each other.

There are a lot of assumptions being made that most people aren't even aware are being made.

Winkeyman appears to be a moral absolutist that holds individual human rights as being more important than societal benefit.  I know it isn't my business, but I honestly would be very interested in his age, career, and background (working class, college graduate) because a lot of people's moral code stems from this stuff, although not always.   It makes me wonder what shaped him into viewing the world in the way he does.  You cannot separate people's moral standards and outlooks from their upbringing and where they came from, what they have experienced.   

I used to feel similarly to Winkeyman.  When I was in college, I was also a moral absolutist.  The very idea that basic morals were at all fungible never really occurred to me.  Life experience has taught me differently.   

Many, many of these libertarian arguments hold personal liberty as something sacred and that people's rights can be argued and protected in isolation from their fellow man.  They view any act that a human imposes on another without their consent as a violation or unnatural.  It just isn't the truth and shows a fundamental misunderstanding of human nature. 

Every human being is a product of the genes of two other human beings and is here without their consent.  Two people have to work together to create a potential human being (embryo).  Pregnancy, which is necessary for each human to survive to birth, involves the usage of a mother's human body in order to grow another human to the stage of birth.  Once that human is born, a child won't survive to adulthood without the direct care of another human being.  This is basic biology.  Without humans working together, there are no humans.  Without people giving up part of their own bodies, their own lives, humans don't exist to even have rights.

Human rights and societal rights aren't really separate concepts because you can't, by definition, separate the individual from a society without the death of both the individual and the society.  These two competing forces intertwine in all sorts of ways that are complex and beautiful and sometimes terrible and heartbreaking.  We are eusocial in many respects, more similar to ants than to cats. 

This tension is at the root of many of our ethical dilemmas and political struggles.  And in a sense, Winkeyman is right, when we necessarily have to compel parts of society to act in ways that benefit the whole society, that should not be taken on "casually".  But I don't see that rules that benefit the society at the expense of the individual are always unethical.  Individual rights can't hold primacy over societal rights and vice versa because they are hopelessly entangled.

I don't see anything wrong with giving you a general answer. White, male, early 30s, married. Work at a fortune 500 company in a salaried role that requires 75 percent intellectual labor and 25 percent physical labor. My family was lower middle class, blue collar. Mom didn't work outside the home until I was a teen. Older brother was the first person to start college, I was the first in my family to graduate. My household is in the upper end of the income spectrum for couples our age. Wife has no college degree but makes more money than me. I should also not that In Real Life I don't spend much time thinking or acting on most of this stuff. I know that I am hopelessly outnumbered by people who either enjoy government benefits so much they don't care how it impacts others. So even if I can convince them of the ethical problems I see with our current system, they wouldn't change their behavior anyway. It's outside my circle of control. The only political activism I participate in has to to with the 2nd Amendment because that is an arena where I feel we can actually win, and are winning. It's also critical to human rights.

Now, I love the conversation about income taxes being A - OK because the government provides the currency.

First of all, the government does everything possible to suppress alternative e currencies. Additionally, attempting to avoid paying taxes by obtaining alternative forms of compensation is also illegal.

It's the perfect example of how people rationalize anything and everything the government does.

I come taxes are legit because you use our currency.
You have to use our currency.
If you try to get creative and obtain compensation in some other way, that's tax evasion.
Awesome.

American Gold Eagles have a face value of $20. They are worth about $1000. So if I do a job in exchange for a $20 gold eagle and only claim $20 in income, I have broken the law and will be punished.

Hell, it doesn't even matter if it's a $20 eagle. I could do the same with a Krugerand and still be in legal trouble.

Why?

Because it has nothing to do with government currency. It has to do with the fact that the government thinks it has a right to some portion of my time, labor, and creativity. And that's wrong.

[onlykelsey]

And in one's 20s.  Sliding scale.

Until (it appears) you hit 60, begin consuming nothing but Fox News and railing against Muslim Mexicans coming for your jobs and atheist Muslim Black Christians being president.

It seems like the rule might be: the more engaged you are with society (which you generally are during traditional working years), the more complex and grayscale you see the world.  When you're surrounded by no one or only the like minded (think high school honors classes, retirement, liberal college campuses), things seem very simple.

[Jeremy E.]

I used to feel similarly to Winkeyman.

Part of why I'm so progressive now is that I used to be a staunch Libertarian/Objectivist when I was younger. 

It's interesting how many of us this is true for.  I definitely think there's an age correlation; most tend to "outgrow" it.  A few never do.

Not implying it's a negative thing, per se, just commenting on how in the majority of cases, that belief seems to change with age.

Speaking for myself, when I was younger I always assumed that the playing field was more or less level, and the system was pretty much equal.  I also saw society as basically made up of a bunch of rugged individualists.  And if someone didn't make it, it was because that person was lazy, stupid, etc...

As I get older I see that the system is not fair at all, and in fact it is set up to actively screw over a large number of people.  So, a lot of my switch to being a progressive has revolved around simply wanting to address/fix issues of active unfairness in our current system.

I also started to understand that humans are social animals, we are tribal by nature.  So rather than fight against that reality and rail against it, I've come to accept it, and I now understand that any solutions we develop need to be good "for us" and not just "for me".

One of the biggest reasons I don’t support a Medicare for all type system, is because to me, it seems many people are unhealthy by choice. I think 95% of people can spare an extra 20-30 minutes per day to go on a jog, and 95% of people are able to eat healthy, yet a majority of Americans do not do these things. It makes no sense to me, as for me it seems so simple. Investing to me is very simple as well, but I can understand how some people are not smart enough to invest, as investing is not common knowledge for everyone, and so I think Social Security is helpful, but eating healthy and exercising daily to stay healthy IS common knowledge, and if everyone did it, the cost of universal health care would be much less, and I’d support it fully. But alas, it seems people are too lazy to care about themselves. Maybe I, like you both were, am too young, and as I get older I might exercise less and I’ll get a better understanding, but as for now I just don’t get it.

[arebelspy]

Because it has nothing to do with government currency. It has to do with the fact that the government thinks it has a right to some portion of my time, labor, and creativity. And that's wrong.

Only if you are participating in that society, and gaining benefits from that society, while performing those activities.

There's a reason we have stuff like foreign earned income exclusion.  Outside the society and earned that money?  They don't take it.  They would, if there was a "right" to it, as you claim.  But there's not a right, just a debt incurred by you, to society.  An obligation you, and everyone else, need to make good on.

[sol]

the government thinks it has a right to some portion of my time, labor, and creativity. And that's wrong.

No, that's right.

You think you have a right to some portion of the governments infrastructure, defense, R&D, and market regulation.  Your time, labor, and creativity only have taxable value because the government provides those things for you.  Using those things without paying for them would make you a thief.

I like how we've been having this exact same exchange for nine pages now and you still think it is the government that is stealing.

[Metric Mouse]

Speaking for myself, when I was younger I always assumed that the playing field was more or less level, and the system was pretty much equal.  I also saw society as basically made up of a bunch of rugged individualists.  And if someone didn't make it, it was because that person was lazy, stupid, etc...

As I get older I see that the system is not fair at all, and in fact it is set up to actively screw over a large number of people.  So, a lot of my switch to being a progressive has revolved around simply wanting to address/fix issues of active unfairness in our current system.

I also started to understand that humans are social animals, we are tribal by nature.  So rather than fight against that reality and rail against it, I've come to accept it, and I now understand that any solutions we develop need to be good "for us" and not just "for me".

Perhaps the current slant of the playing field is indeed better for society? It's not perfect for all, but if it has to be slanted to make it 'more fair', does it matter which way it's slanted? If some win and some lose, how does one choose who wins?  Or is it a simple numbers game, where the plan that benefits the most number of people is the best?

[winkeyman]

Because it has nothing to do with government currency. It has to do with the fact that the government thinks it has a right to some portion of my time, labor, and creativity. And that's wrong.

Only if you are participating in that society, and gaining benefits from that society, while performing those activities.

There's a reason we have stuff like foreign earned income exclusion.  Outside the society and earned that money?  They don't take it.  They would, if there was a "right" to it, as you claim.  But there's not a right, just a debt incurred by you, to society.  An obligation you, and everyone else, need to make good on.

Are you American?

[golden1]

That's funny, because your background is almost exactly what I would expect someone with libertarian views to have, and representative of many people I know who are libertarian past the age of 25.  You probably figure that because you worked your way up from a lower class background to a Fortune 500 company that you bootstrapped your way with very little help, so your empathy for society and its role in your own personal success is very limited.  It is totally understandable btw, and I congratulate you on your success.  I just happen to believe that part of your success is due to this society that you believe is immoral and unethical. 

This is probably off base, but I almost wonder if maybe you would test on the Aspergers/autism spectrum or are just very logical/left brained in general.  I only say that because you have an affect to your writing style that is similar to my son who has ASD.  He is also a very black and white thinker and has a similar sense of moral outrage.  He lacks a capability for flexible social thinking and lacks something called "theory of mind" where he has difficulty understanding that other people exist in their own realities. 

Theory of mind (often abbreviated ToM) is the ability to attribute mental states—beliefs, intents, desires, pretending, knowledge, etc.—to oneself and others and to understand that others have beliefs, desires, intentions, and perspectives that are different from one's own. - wikipedia

 

[Metric Mouse]

the government thinks it has a right to some portion of my time, labor, and creativity. And that's wrong.

No, that's right.

You think you have a right to some portion of the governments infrastructure, defense, R&D, and market regulation.  Your time, labor, and creativity only have taxable value because the government provides those things for you.  Using those things without paying for them would make you a thief.

I like how we've been having this exact same exchange for nine pages now and you still think it is the government that is stealing.

This is exactly why so many citizens are angry that a not insignificant portion of the population pays no income taxes, and some corporations get away with greatly reduced (or no) tax liabilities. Since the benefits of society are so much greater than the average person's income, tax rates are far too low.

[sol]

This is exactly why so many citizens are angry that a not insignificant portion of the population pays no income taxes, and some corporations get away with greatly reduced (or no) tax liabilities. Since the benefits of society are so much greater than the average person's income, tax rates are far too low.

Do you think winky would prefer a flat tax?  Many conservatives and libertarians think the income tax is unfair because it is progressive and high earners pay a larger percentage of their income.  All three current GOP presidential candidates, for example, advocate for switching income taxes to a flat tax, despite the fact that flat taxes are effectively regressive and penalize poor people who spend a larger fraction of their income on bare necessities.

But this overlooks the fact that every other tax we pay is already a flat tax.  Your OASDI taxes are a flat tax.  All consumption taxes (sales tax, gas tax, liquor tax, property tax) are flat taxes, charged the same regardless of your income.  In total, most people pay more of their income as a flat tax than as progressive income tax until they earn boatloads of money (2-3 times median household income, depending on details), so from that perspective we already have a flat tax, for most of our revenue.

A scalable income tax is the fairest way I can think of to support our society.  I assure you that there are no billionaires who work 1000 times harder than an under the table Mexican gardner.  Their income is disproportionate to their effort, and so I support taxing the surplus.  I would never ask anyone to donate 100% of his time and effort to the State (except maybe in times of war, and even that is questionable) but I would gladly ask him to donate every singe dollar he earns (yes, a 100% tax rate) after his first billion.  What does a billionaire need with a second billion dollars?

Our society is full of hard luck cases.  People are born with crippling disabilities.  Veterans are disfigured and maimed.  Drug addicts destroy themselves.  These people should not be left to rot, and supporting them means collecting taxes from those of us who have been more fortunate.

[FIPurpose]

Are we at the point yet where we can throw out theoretical tax brackets that we want implemented?

Single - Married figures all doubled no deductions but credits for children/savings can stay. Tax advantaged accounts stay as is.
$0-$30k - 0%
$30k-$150k - 20%
$150k-$1mil - 30%
>$1mil - 40%

All income sources count the same, investment losses can roll over with less restriction. Adjust to inflation automatically every year.

Discuss!

[Metric Mouse]

This is exactly why so many citizens are angry that a not insignificant portion of the population pays no income taxes, and some corporations get away with greatly reduced (or no) tax liabilities. Since the benefits of society are so much greater than the average person's income, tax rates are far too low.

Do you think winky would prefer a flat tax?  Many conservatives and libertarians think the income tax is unfair because it is progressive and high earners pay a larger percentage of their income.  All three current GOP presidential candidates, for example, advocate for switching income taxes to a flat tax, despite the fact that flat taxes are effectively regressive and penalize poor people who spend a larger fraction of their income on bare necessities.

But this overlooks the fact that every other tax we pay is already a flat tax.  Your OASDI taxes are a flat tax.  All consumption taxes (sales tax, gas tax, liquor tax, property tax) are flat taxes, charged the same regardless of your income.  In total, most people pay more of their income as a flat tax than as progressive income tax until they earn boatloads of money (2-3 times median household income, depending on details), so from that perspective we already have a flat tax, for most of our revenue.

A scalable income tax is the fairest way I can think of to support our society.  I assure you that there are no billionaires who work 1000 times harder than an under the table Mexican gardner.  Their income is disproportionate to their effort, and so I support taxing the surplus.  I would never ask anyone to donate 100% of his time and effort to the State (except maybe in times of war, and even that is questionable) but I would gladly ask him to donate every singe dollar he earns (yes, a 100% tax rate) after his first billion.  What does a billionaire need with a second billion dollars?

Our society is full of hard luck cases.  People are born with crippling disabilities.  Veterans are disfigured and maimed.  Drug addicts destroy themselves.  These people should not be left to rot, and supporting them means collecting taxes from those of us who have been more fortunate.

I couldn't possibly imagine what kind of tax he would prefer.  I think arguing over what is 'fair' is not really the point of the debate. Since almost everyone gets out far, far, far more than they put in, I don't really see how it could be made 'fair.' Except to perhaps charge all people even more. Some parts of current tax law favor some people or some groups of people more than others, but flopping it around doesn't make it 'fair', just better for some and worse for others.  Since I don't believe it can be made 'fair', I don't worry about it. Tax law will fluctuate to a reasonable approximation of effectiveness, and benefits everyone so immensely no matter the specific rate they pay, so making it 'fair' is almost pointless.

None of this really argues that it's ethical, though. I think Radram pointed out pretty clearly that it's unethical. But I agree with his premise: in the end, since I personally am better off for taxes, as is everyone, ever, there's little reason to rectify the issue. It's unethical, but a very generous trade for what is given in return.

[Metric Mouse]

Are we at the point yet where we can throw out theoretical tax brackets that we want implemented?

Single - Married figures all doubled no deductions but credits for children/savings can stay. Tax advantaged accounts stay as is.
$0-$30k - 0%
$30k-$150k - 20%
$150k-$1mil - 30%
>$1mil - 40%

All income sources count the same, investment losses can roll over with less restriction. Adjust to inflation automatically every year.

Discuss!

Just to kick the cat - thoughts on business deductions?

[FIPurpose]

Are we at the point yet where we can throw out theoretical tax brackets that we want implemented?

Single - Married figures all doubled no deductions but credits for children/savings can stay. Tax advantaged accounts stay as is.
$0-$30k - 0%
$30k-$150k - 20%
$150k-$1mil - 30%
>$1mil - 40%

All income sources count the same, investment losses can roll over with less restriction. Adjust to inflation automatically every year.

Discuss!

Just to kick the cat - thoughts on business deductions?

Hmm I was only thinking of personal taxes since that's what the focus of this thread is. Business taxes I think have to be a bit more complex, and there is some give-and-take in business taxes especially in the issue of repatriating money.

[Papa bear]

I do this too, but you do realize that your government does claim a portion of the value of your garden as well, right?  Again, the fact that federal reserve notes are not involved in this activity does not relive you from the obligation to pay taxes upon these gains.  The only reasons that the IRS doesn't make a big deal out of this type of activity are 1) the absence of a transaction in a currency makes the estimation of the value of the activity difficult, 2) to do so with any kind of vigor would highlight the absurdity of the tax regime that would lay claim to your tomatoes and 3) they would likely not net much or any actual tax revenue beyond the overhead of employing the additional tax agents that such a level of enforcement would require.  If you doubt that you owe taxes upon your DIY activities, just call the IRS, they will let you know.

[/quote]



Ok, I can't let this slide. 

 There is no obligation to pay taxes on your tomato that you grow in your garden because it is an unrealized gain.   This is an arbitrary "gain" on the value of the capital good.  It's arbitrary because its value is only known when it has been transacted as you mention.   Maybe the transaction is for currency.  Maybe you traded it for a goat.  Doesn't matter, since now it has a known value.  As such, the current tax structure has no more right to collect taxes on the tomatoes in your garden than to tax the increase in wood that has grown on the tree in your backyard, a change in the value of a collectible car, or the piece of clothing you own that suddenly is desirable because it's back in style.  There is NO basis for taxation on these items without a transaction between two willing parties.   This transaction MUST be an exchange of a good or service with monetary value (consideration in contract terms).   A gift of a tomato to your neighbor is not a taxable event. 

If you sell these tomatoes or you sell the tree, the car, or your disco suit, this is a taxable event.   You have REALIZED the gain.   This is true of most of your assets.   It does not matter if it is "hard" for the IRS to derive the value of the tomato, the tree, your car, or that vintage disco suit; it will not be taxed until it is realized.   The same goes for your stocks.  You are NOT taxed on the change in value of a stock.   Although this can be readily calculated, and is calculated by everyone on this forum on a near daily basis, you do not pay taxes on the change in value.   This only becomes a taxable event when the gain (or loss) is realized. 

Hell, you aren't even taxed on the consumption of your tomato, tree, car, or dancin' disco suit.     What will that tomato be worth after it is consumed (in both a literal and economic sense)?  Nothing.  Was there a taxable event?  No.   Same can be said of that big tree in your backyard.   You can cut down that tree and use its wood for a fire.  It's consumed.   Taxable event?  No.   Turn that wood into boards and build yourself a table.   Wow, now there's real "value"!  I'm going to consume (in an economic sense) this table over 30 years until it rots away to nothing.   Taxable?  No.  Sell that table online after you built it?  Did you get something in exchange for it?  Yes? Taxable. 

In all of these instances, you must have a voluntary transaction between two willing parties for an exchange of "consideration". 

Does the government tax you on your labor, time, or creativity as Winkeyman proposes?  NO!  You think you are taxed on it?  Show me the line item on your 1040 that asks you to declare the amount of your creativity last year.  There isn't one.  They tax you on your income.  Your labor, time, or creativity hold NO value!  None at all!  They are not a store of value.  Do you want to pretend that they have some intrinsic value?  What is it?  Is all labor equal?  No.  You can't value it without a transaction.  Labor, time, or creativity only become a taxable event when two voluntary parties agree to a transaction to exchange the time, labor, or creativity for another good or service.  Hooray!  Your time, labor, or creativity now has value!  Congratulations!  Now pay your tax.  Let's take a real world example.   I am a business owner.   I work hard every day.   I use my time, labor, and creativity to build, create, or find a product.   In my business, I find people for jobs.  You can bake cakes, it doesn't matter.  Your labor had no value in the creation of your product and you are not taxed on the creation of a product.  (some exceptions may apply here, like alcohol above a certain ABV I believe)  My labor had no value until another entity is willing to exchange currency for the right to hire the person I am representing.   I am taxed not on my labor, but on the transaction that occurred. 

As such, I find NO distinction between the ethical or moral implications of an income tax.  It is a tax on the transaction between two voluntary willful parties.  It is no different than a sales tax, use tax, consumption tax, VAT tariff, toll, etc.  Either they are all ethical, or they all aren't.  So go ahead and argue about the current level of tax, the fairness of tax, or what the hell we are spending it on.   But to take a word out of Winkeyman's rhetoric, if you think about it "rationally", there is no distinction on arguing the ethics of income tax vs sales/use/tariff/tolls. 

Going back to an original point that I made pages ago, I DO have the greatest moral or ethical dilemma that occurs with a property tax (as opposed to income, sales and use, etc.)  With a property tax, you are taxed in perpetuity on the value of your property.  What?  The value of my property?  How can we assess the value without a transaction?  You don't.  It's arbitrarily created by an appraisal.  Nothing more than an educated guess.  Much like you would guess the cost of an antique clock.   It's all a guess until there is a transaction.   (yes there was a transaction on the exchange of real property for consideration, but it's a one time event, and over time it is less and less relevant.   Stick with me here.)

As such, there is a tax on a guess of the value of your property.   This tax is in perpetuity.   Pay it forever, peasant!  Let's say I own a large tract of land that is covered in rocks.   It was valued at an arbitrary 100,000.  I pay taxes on that 100,000 value of land.  Now, I am going to take my labor and time to pick up and neatly stack all of those rocks along the perimeter of my land.   Great!  Now I can farm this land.   Fantastic.   I did not have a transaction with any party to clear my land of rocks.   I will not pay any tax on my labor, time, or creativity.   But wait!  My land has been reassessed.   It is now worth more due to the result of my labor, time, and creativity stacking those rocks.  It has been appraised for 150,000 and I will now be taxed on that value.   Did I realize a gain?  NO.  Did I have a transaction where I entered into an agreement with another party?  No.   I derived no realized gain or loss on this.   But now I will be taxed 50% higher.  That to me is worth arguing about the ethics. 

[winkeyman]

That's funny, because your background is almost exactly what I would expect someone with libertarian views to have, and representative of many people I know who are libertarian past the age of 25.  You probably figure that because you worked your way up from a lower class background to a Fortune 500 company that you bootstrapped your way with very little help, so your empathy for society and its role in your own personal success is very limited.  It is totally understandable btw, and I congratulate you on your success.  I just happen to believe that part of your success is due to this society that you believe is immoral and unethical. 

This is probably off base, but I almost wonder if maybe you would test on the Aspergers/autism spectrum or are just very logical/left brained in general.  I only say that because you have an affect to your writing style that is similar to my son who has ASD.  He is also a very black and white thinker and has a similar sense of moral outrage.  He lacks a capability for flexible social thinking and lacks something called "theory of mind" where he has difficulty understanding that other people exist in their own realities. 

Theory of mind (often abbreviated ToM) is the ability to attribute mental states—beliefs, intents, desires, pretending, knowledge, etc.—to oneself and others and to understand that others have beliefs, desires, intentions, and perspectives that are different from one's own. - wikipedia

So, I think the point at which the forum opens up to speculation on the existence and extent of mental disabilities I may suffer from is the point at which I should probably excuse myself from this conversation.

[arebelspy]

Because it has nothing to do with government currency. It has to do with the fact that the government thinks it has a right to some portion of my time, labor, and creativity. And that's wrong.

Only if you are participating in that society, and gaining benefits from that society, while performing those activities.

There's a reason we have stuff like foreign earned income exclusion.  Outside the society and earned that money?  They don't take it.  They would, if there was a "right" to it, as you claim.  But there's not a right, just a debt incurred by you, to society.  An obligation you, and everyone else, need to make good on.

Are you American?

I sure am!  And I'm well aware that we collect taxes from those abroad (as I'm abroad right now, and working on taxes).  But I'm also well aware of foreign earned income exclusion, which wouldn't exist if the US thought they had an unequivocal right to my labor.

[mr_orange]

I should also not that In Real Life I don't spend much time thinking or acting on most of this stuff. I know that I am hopelessly outnumbered by people who either enjoy government benefits so much they don't care how it impacts others. So even if I can convince them of the ethical problems I see with our current system, they wouldn't change their behavior anyway. It's outside my circle of control.

This passage is masterful and pretty much sums up my feeling about much of the debate on taxes. 

Earlier in the thread there was discussion about being able to select from various taxation regimes and how this used to be more of an option prior to income taxes being the dominant way that our federal government collected the money needed to fund various programs.  Several responses since then speak about how the national defense, regulation regimes, etc. add value for being able to transform one's labor into money.  These responses also noticeably fail to mention the bloat and waste that the government manufacturers in the course of functioning.  Anyone that has not worked for a prime government contractor or agency probably lacks the perspective needed here. 

In a situation where the bulk of the power resides within the states and the federal government provides far less citizens of the country are free to move to where they find the optimal level of government that aligns with their view of what role it should play without needing to move to another country.  It is hard for me to see why those that make claims about one benefiting from the construct provided by the government have an issue with a situation like this.  If the bulk of the power resides within the states people can move to where they can optimally take advantage of the construct the government forms AND have freedom to choose where to reside within their country.  So it seems to me that the proposal by most conservatives should be adopted by those making these claims if that is their true intent.  Why do we need a centralized taxing authority to provide for the conditions precedent to being able to optimally transform labor into currency? 

[Jeremy E.]

I do this too, but you do realize that your government does claim a portion of the value of your garden as well, right?  Again, the fact that federal reserve notes are not involved in this activity does not relive you from the obligation to pay taxes upon these gains.  The only reasons that the IRS doesn't make a big deal out of this type of activity are 1) the absence of a transaction in a currency makes the estimation of the value of the activity difficult, 2) to do so with any kind of vigor would highlight the absurdity of the tax regime that would lay claim to your tomatoes and 3) they would likely not net much or any actual tax revenue beyond the overhead of employing the additional tax agents that such a level of enforcement would require.  If you doubt that you owe taxes upon your DIY activities, just call the IRS, they will let you know.

Ok, I can't let this slide. 

 There is no obligation to pay taxes on your tomato that you grow in your garden because it is an unrealized gain.   This is an arbitrary "gain" on the value of the capital good.  It's arbitrary because its value is only known when it has been transacted as you mention.   Maybe the transaction is for currency.  Maybe you traded it for a goat.  Doesn't matter, since now it has a known value.  As such, the current tax structure has no more right to collect taxes on the tomatoes in your garden than to tax the increase in wood that has grown on the tree in your backyard, a change in the value of a collectible car, or the piece of clothing you own that suddenly is desirable because it's back in style.  There is NO basis for taxation on these items without a transaction between two willing parties.   This transaction MUST be an exchange of a good or service with monetary value (consideration in contract terms).   A gift of a tomato to your neighbor is not a taxable event. 

What if two of your neighbors demolish their houses and build much nicer houses, and then the government asseses your house as more valuable and taxes you more property tax? This is not federal, nor income, but either way