Where will inflation stop?

In reply to AngryCorvair (Forum Supporter) :

I understand. But all that does is shift the moment of taxation from the end to the beginning. It doesn't create more tax revenue. 
 

Frenchy keeps talking about stocks as if there is this vast untapped pool of untaxed basis waiting to relieve the masses of their unjust taxation. 

SV reX said:

In reply to frenchyd :

You realize we pay capital gains tax on stock now, right?

Not within tax sheltered accounts.

In reply to ProDarwin :

Since Frenchy never mentioned anything about tax sheltered accounts, let's skip that part. All he said was "let's tax stocks".  
 

We can always find exceptions. 

Changing how we tax will invariably be more harmful to "organized" people than it will be to "disorganized" people.

Why, because of entropy (S = k log W), the third law of thermodynamics, which essentially informs us that everything tends towards a lower state of order over time.

Person #1 carefully studies the tax code and lives their life making wise decisions (low entropy) while Person #2 has no plan and just staggers their way through life getting slammed (high entropy).

Basically, Person #1 has a long way to fall while Person #2 is already sprawled out on the ground.

Change is just an euphemism, a battle cry, for "let's switch the rules in the middle of the game to berk you organized people up"

SV reX said:

In reply to ProDarwin :

Since Frenchy never mentioned anything about tax sheltered accounts, let's skip that part. All he said was "let's tax stocks".  
 

We can always find exceptions. 

Yeah, I'm just saying he is assuming all transactions are taxed, but your reference to capital gains only applies to taxable accounts.

Exceptions are the thing I have an issue with - hence my possibly outlandish proposal several pages back.

RX Reven' said:

Changing how we tax will invariably be more harmful to "organized" people than it will be to "disorganized" people.

Why, because of entropy (S = k log W), the third law of thermodynamics, which essentially informs us that everything tends towards a lower state of order over time.

Person #1 carefully studies the tax code and lives their life making wise decisions (low entropy) while Person #2 has no plan and just staggers their way through life getting slammed (high entropy).

Basically, Person #1 has a long way to fall while Person #2 is already sprawled out on the ground.

Change is just an euphemism, a battle cry, for "let's switch the rules in the middle of the game to berk you organized people up"

There's nothing inherently good about being organized, often people make carefully organized efforts to exploit flaws in a system for malevolent purposes. The best cybercrime gangs are very organized.

It will correct when the government stops putting its thumb on the economic scales, contrary to what most of the people seem to think. 

In reply to GameboyRMH :

I didn't express an opinion on wether or not I thought organization was good...I was just sharing my observation that organized things are less resilient to change than disorganized things.

Back in the 70's there was a Sit Com called the Odd Couple which was about two divorced guys that were sharing an apartment (one was a neat freak and the other was a slob).  In one episode, the neat freak came home and immediate shouted "oh my god, we've been robbed, why didn't you tell me".  The slob just looked at him with a blank expression as he had no idea that they had been robbed...his things always looked like they had just been ransacked.

So, if you're organized, you're more likely to be harmed by change than those that aren't organized and knowledge of this can be used for subtle malevolent purposes.

You didn't ask but here's a picture of my garage to indicate where I am on the organized / disorganized spectrum:

It sounds like what you're describing is closer to optimization or specialization than organization. If you're organized but not optimized/specialized then you can be ready to adapt to change, vs. a person who is both organized and optimized who has their optimization horribly broken by changes. Systems can be set up in a way that optimization for it is unhealthy - we've seen this in F1 where optimizing for the rules produced unsafe or unsustainably expensive cars.

In reply to RX Reven' :

great looking garage  - I would make little wooden pallets so nothing sits on the ground (paint cans, fertilizer) and you can wash out the gargae.  

In reply to GameboyRMH :

Agreed.

I specifically used the term "organized" as the common phrase used to describe entropy is "going from a state of order to a state of disorder".

But yes, optimized better describes what I'm referring to.

Datsun310Guy said:

In reply to RX Reven' :

great looking garage  - I would make little wooden pallets so nothing sits on the ground (paint cans, fertilizer) and you can wash out the gargae.  

Thank you!

We now include a sixth "S" for safety which I couldn't give myself a good score for as I've got toxic chemicals within reach of small children and my water heater is just out of view to the left of the picture so my gas cans should be moved as far to the right as possible.

ProDarwin said:

SV reX said:

In reply to frenchyd :

You realize we pay capital gains tax on stock now, right?

Not within tax sheltered accounts.

SV reX said:

In reply to frenchyd :

You realize we pay capital gains tax on stock now, right?

I'm not trying to add to the tax.  I'm trading income tax for a 2% VAT.   
    To make this as simple as possible.  
  The tax revenue total per year is very nearly 2% of the GDP.  
   Doing this means no more income tax.  No more tax forms to be filled out.  Just  pay .02 with every purchase.   

SV reX said:

In reply to AngryCorvair (Forum Supporter) :

I understand. But all that does is shift the moment of taxation from the end to the beginning. It doesn't create more tax revenue. 
 

Frenchy keeps talking about stocks as if there is this vast untapped pool of untaxed basis waiting to relieve the masses of their unjust taxation. 

If I have numbers right it brings in 490 Billion. 
       Bottom line. Instead of collecting taxes after a lot of calculation, collect it when the discussion is made to buy things. 
  The amount of revenue should come out nearly the same. Any extra can be dedicated to paying down the national debt. 

In reply to frenchyd :

So at the grocery store am I'm paying 2% on the entire purchase or 2% of the price of each individual item? 

In reply to frenchyd :

Congrats, You have now just fed the Bitcoin market. Very easy work around and now the rich will pay even less in taxes than they do today. Moving to a VAT system would only harm the overall tax proceeds and not help. 

Why do you think most of the major tax avoiders have a Portuguese Visa by investment? Because they didn't tax Crypto and the gains. They are working on changing it now but still not yet. 

Here is the overall issue with everything said here, The rich have mobility and there will always be a country that will be lower/easier/cheaper tax structure. Shoot, this floated the Irish economy for years. They had a cheaper corporate tax rate.  

So until every place is taxed the exact same and there is no incentive to hold your money in XYZ state or country, we will always have people with mobility taking advantage of the cheapest COL and taxes that their situation will allow. 

yupididit said:

In reply to frenchyd :

So at the grocery store am I'm paying 2% on the entire purchase or 2% of the price of each individual item? 

That would be the same amount, so I'm confused. 

bmw88rider said:

So until every place is taxed the exact same and there is no incentive to hold your money in XYZ state or country, we will always have people with mobility taking advantage of the cheapest COL and taxes that their situation will allow. 

And sales-tax-based or transfer-tax-based systems create an incentive to hold and spend your money *outside* of the state or country where they're implemented, so those would only add that incentive to whatever incentives other jurisdictions may offer to hold money *in* them. If you look at foreign tax shelters as a leak in the local tax system, they're like trying to fight that leak by pressurizing your container.

In reply to Steve_Jones :

But he said every item... this is the basis of my question lol

bmw88rider said:

In reply to frenchyd :

Congrats, You have now just fed the Bitcoin market. Very easy work around and now the rich will pay even less in taxes than they do today. Moving to a VAT system would only harm the overall tax proceeds and not help. 

Why do you think most of the major tax avoiders have a Portuguese Visa by investment? Because they didn't tax Crypto and the gains. They are working on changing it now but still not yet. 

Here is the overall issue with everything said here, The rich have mobility and there will always be a country that will be lower/easier/cheaper tax structure. Shoot, this floated the Irish economy for years. They had a cheaper corporate tax rate.  

So until every place is taxed the exact same and there is no incentive to hold your money in XYZ state or country, we will always have people with mobility taking advantage of the cheapest COL and taxes that their situation will allow. 

Wouldn't that be a great job for the IRS? Find every leak and plug it?   Buying bit coins?  OK pay 2% when you do. Sending money out of the country ? OK pay 2% 

     Has everyone missed the benefit of a 2% VAT ?   It will bring jobs and investment back to the US 

   Look at Air Bags. Made in Finland and Japan. Not cheap labor places yet that's where they come from.  Why?  Cheaper to buy a finished good than build a factory.  However with shipping, import duty and a 2% VAT to avoid that calculation  changes. 
      With regard to labor rates?  Are you kidding? Robots cost about the same all over the world.   It would take very low volume not to use robots. And air bags and seatbelts aren't low volume.  
  

frenchyd said:

If I have numbers right it brings in 490 Billion. 
       

Hey my friend, I'm not your enemy but 2% won't provide acceptable revenue, total taxes (Federal + State + Local) are an order of magnitude higher...20% not 2%.

I'm not sure what's going on, are you not reading my posts...are you not getting my point...am I not getting your point...I'm confused.

"Government" pulls very ruffly 20%  out of the economy...what am I missing?

490 billon is a rounding error, the government needs FOUR TRILLION per year plus to continue providing their existing services....I admire you, I'm glad you're here, please read my posts and tell me where I'm getting your point wrong.

In reply to RX Reven' :

Total revenue for the US government in 2019  3.839 trillion. ( sorry I can't find 2021 revenue) 
 

GDP for this year is expected to be  between 20.9  and 25.6 Trillion.       According to various sources. 
   That's around 510 billion plus revenue from stock sales,   plus FET, plus import duty,  Plus other revenue streams.  And the one I'm really having a tough time with,  non taxed  sales of goods, materials and services.  
      
Here's the reason I picked 2 % rather than some higher number.   First to achieve full  compliance taxes have to be simple, easily understood,  and fair.  Current system has none of those features.  
 Second taxes must be trivial.  So when you sell your lawn mower for $100  to a friend you send in $2  with your deposit to comply.  
    Given a choice of 2% VAT  or the current system which would you agree with? 
 

     I'm not calculating state revenue.  Too complex.  A lot of state revenue can come from the federal government. Some states are net gainers.  While some are losers.  Really seems to depend on seniority of the Senators and congressmen.  ( so much for term limitations) 

frenchyd said:

In reply to RX Reven' :

Total revenue for the US government in 2019  3.839 trillion. 
2% of the GDP is a shade over 4 trillion. 4.089 ( 2021 ).  Sorry I can't find 2021 revenue. 

My friend (and I mean that) it's not two percent, it's twenty percent....do the math and get back to me.

US GDP is a little over 20 Trillion Dollars. 2% of that is $400 Billion dollars. That is not up for debate, it's math.