tag:blogger.com,1999:blog-4425587034622601550.post2319273859244313051..comments2023-09-15T04:27:57.129-04:00Comments on Commentarama: How Stimulating. . .AndrewPricehttp://www.blogger.com/profile/11312364467936820986noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-4425587034622601550.post-89927059017136334692009-11-25T15:31:36.481-05:002009-11-25T15:31:36.481-05:00P.S. What I meant by "hidden" in the Ge...P.S. What I meant by "hidden" in the German system is that you see the one price and you pay it, there is no visible add-on that the customer pays that is specially marked "tax."AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-91216332048307705012009-11-25T15:28:39.394-05:002009-11-25T15:28:39.394-05:00WillORNG, You're right about property taxes.
...WillORNG, You're right about property taxes.<br /><br />On the VAT tax, my experience is with the German system (visiting relatives), where the tax is entirely hidden. So when the cost of the product shoots up, they don't know if it was the government raising taxes or if it was the company raising prices.<br /><br />I don't know if it's the same in Britain or not?<br /><br />We have a similar experience with the gas tax. Few states break out the cost at the pump. So when the price of gas increases, people blame the oil companies -- even though the price hike is often the result of the gas tax.<br /><br />Also, my concern with the VAT is that "consumers" are a very hard group to organize in opposition to a tax increase because they are too diffuse. That makes it a very easy tax to hike.<br /><br />I want an efficient tax, but I also want one that politicians can't raise easily.<br /><br />If I was going to remake the tax system, I would probably look at a consumption tax or a property tax, but, sadly, I don't see much support in our country for any sort of major re-make of the system.<br /><br />Thanks for the comments. You think the Tories will raise it to 20%? Ouch!AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-41053862238866517462009-11-25T14:59:02.345-05:002009-11-25T14:59:02.345-05:00Andrew when our VAT rate goes back up from 15% to ...Andrew when our VAT rate goes back up from 15% to 17.5% everyone will know about it...and even more when the Tories put it up to 20%...<br /><br />Property taxes are unpopular but technically an efficient and effective way of raising taxes.WillORNGhttps://www.blogger.com/profile/03759801640058517521noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-1751820567710040782009-11-24T09:44:55.119-05:002009-11-24T09:44:55.119-05:00Will, Our tax system is horrible, not only does it...Will, Our tax system is horrible, not only does it cause massive distortions all over the place, but it's designed to let politicians hand out favors by tickering. And it's virtually impossible to understand. But there is no will (or widespread public desire) to change the system significantly.<br /><br />Despite our problems, I would not want to adopt the European models. The problem with the VAT tax is that it's a hidden tax that can be raised without anyone realizing it. I would rather have a sales tax than a VAT tax.<br /><br />But the idea of shifting to a sales tax (or any sort of consumption tax) has limited appeal because the left in this country doesn't want any tax that hits poor people. They only want to tax "the rich."<br /><br />In terms of alcohol and cigarettes, we do tax the heck out of those, and those taxes go up almost every budget cycle.AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-79326010586746004622009-11-24T08:54:35.120-05:002009-11-24T08:54:35.120-05:00The US has a lot to learn from Europe about tax re...The US has a lot to learn from Europe about tax revenue raising efficiency.<br /><br />Yes cut income taxes, cut distorting 'reliefs' these are spending and government economic behaviour distorting. But there should be higher property taxes and VAT/Sales as these dont distort productive behaviour and encourage good old fashioned conservative saving as opposed to Republicrat spenders like Bush and Johnson.<br /><br />It's not the greatest way to deal with demand loss though.<br /><br />Meddling with technical CGT arcana is borrowing from the future artificially and as 'bad' as cash for clunkers...plus its dry arcane accountant speak, to boot!<br /><br />Oh, and tax alcohol, tobacco and social drugs heavily too, it's regressive but sure cuts those non-fiscally conservative deficits!WillORNGhttps://www.blogger.com/profile/03759801640058517521noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-43562555871264334182009-11-23T19:45:09.236-05:002009-11-23T19:45:09.236-05:00Whasatchmo, LOL! I'm sure they're impress...Whasatchmo, LOL! I'm sure they're impressed!<br /><br />Thanks, I think it's a good idea both economically as well as politically because it's much harder to attack a policy that would get people to sell their used equipment quicker than it would be to attack a policy that could be painted as relating mostly to stocks.<br /><br />You're right about the reduction in the write-off. It sounds good in principle, but if the write off can be recaptured, the stimulus effect is kind of light.<br /><br />Thanks for the comments!AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-56245655912888396292009-11-23T19:35:02.573-05:002009-11-23T19:35:02.573-05:00Yeah, I mainly wanted to show off my knowledge of ...Yeah, I mainly wanted to show off my knowledge of the tax code to impress the ladies.<br /><br />But I like the idea of repealing the effect of Sec. 1245 and 1250 as opposed to any more Sec. 168(k) stuff, of which GWB was so fond. That basically allowed businesses to write off up to 50% of new personal property in the year of acquisition, but it still left recapture in place.<br /><br />168(k) did stimulate some investment, but it effectively taxed any sale of that equipment at ordinary rates. I like your idea of taxing that sale at lower capital gain rates, which could be achieved by addressing just sections 1245 and 1250. No new capital gain rates required.wahsatchmohttps://www.blogger.com/profile/15990668466361072408noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-38634515601285191062009-11-23T18:56:50.966-05:002009-11-23T18:56:50.966-05:00Wahsatchmo, I haven't gone into specifics of i...Wahsatchmo, I haven't gone into specifics of implementation because that's a little beyond the broad sorts of policies we are talking about here.<br /><br />That said, I agree with your points (though I admit my knowledge of C corp tax is a little limited). Those two changes should be very beneficial to small businesses, which is where most jobs are created.AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-77210691412967351562009-11-23T18:45:22.111-05:002009-11-23T18:45:22.111-05:00Specifically, you could implement the reduction in...Specifically, you could implement the reduction in taxes on the sale of tangible personal property used in a business (Sec. 1231 property in the Internal Revenue Code) by getting rid of depreciation recapture (Sec. 1245 and Sec. 1250) as well as Sec. 179 recapture. Any time equipment is sold, the amount of the gain on the sale up to the extent of accumulated depreciation is taxed at ordinary tax rates (or at a high flat rate under Sec. 1250), which are higher than normal capital gain rates. C corporations don't even benefit from capital gain rates on the sale of any capital property, including the sale of non depreciable capital property. Why not extend capital gain tax rates to C corporations as well?wahsatchmohttps://www.blogger.com/profile/15990668466361072408noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-86930167641958571502009-11-23T10:49:48.831-05:002009-11-23T10:49:48.831-05:00Stan, We'll see desperate times (pre-reelectio...Stan, We'll see desperate times (pre-reelection) bring desperate measures.AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-83704839939911328362009-11-23T08:52:48.719-05:002009-11-23T08:52:48.719-05:00All good ideas Andrew, and would indeed stimulate ...All good ideas Andrew, and would indeed stimulate the economy. With Washington politicians it’s about the power, most especially the Marxist. Review the bidding, we have: C. Dodd, Barney Frank, Harry Reid, Nancy Pelosi, Barry Obozo, Joe BBBB…Biden, in charge of taxes, regulation, etc. We have a better chance of these clowns to start preaching personal responsibility as we do to have them lower taxes. Since we’re pissing in the wind; I like a more radical approach abolish the IRS and replace it with the “Fair Tax,” this is not a VAT Tax! You’d have to repeal the 16th Amendment, and so on, etc. Business would explode in this country, most industry would return. My favorite part is it would defang the Federal Government, even though at a fixed 23% it would be revenue neutral, they’ll never go for it right or left, because they lose the power. I love what you’re saying Andrew, and it would work, it’s far to sensible for our current ruling class…yuk!StanHhttps://www.blogger.com/profile/07395708786509590321noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-43081601906685950832009-11-22T20:22:41.870-05:002009-11-22T20:22:41.870-05:00Mega, The Republicans have made proposals like thi...Mega, The Republicans have made proposals like this, but the media hasn't covered it. I think they need to make a big deal of creating their stimulus package -- this -- and then introducing it now, while Obama/Biden are claiming that the recession is over. That lets them argue later that they could have prevented the harm the recession does.AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-82956379517827212332009-11-22T20:18:10.334-05:002009-11-22T20:18:10.334-05:00Great ideas. I wonder if Obama will consider thes...Great ideas. I wonder if Obama will consider these ideas at his jobs conference? Do you think the Republicans will propose this?MegaTrollhttps://www.blogger.com/profile/03234420338804013858noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-5170147027642503312009-11-22T20:10:24.768-05:002009-11-22T20:10:24.768-05:00You've put your finger right on the problem La...You've put your finger right on the problem Lawhawk. The democrats know enough buzzwords that people think their plans sound good, even though they are utterly insane. And of course, they've always got a team of economists ready to back up whatever insane plan it is and declare it a great plan.<br /><br />At the same time, the Republicans always come across like accountants. If they could learn to put their ideas in normal English and drop the caveats and technical terms, they could do so much better!AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-46778531891820648642009-11-22T20:00:59.296-05:002009-11-22T20:00:59.296-05:00Andrew: The ability of the Democrats to explain t...Andrew: The ability of the Democrats to explain their crazy schemes and make them sound good is that they have no idea how economics work in the first place, and they know which buzzwords to spout to accomplish their destructive goals. And you are so right about the Republicans. Many truly seem to understand the underlying financial solutions, but come off sounding like robot accountants when they try to explain it. And until conservatives learn how to explain basic market concepts, we're going to continue to lose to the "what's in it for me?" leftist quick-fixes.LawHawkRFDhttps://www.blogger.com/profile/17800255923675295515noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-15701698369718531722009-11-22T19:52:28.470-05:002009-11-22T19:52:28.470-05:00Jed, The best part about these, besides the fact t...Jed, The best part about these, besides the fact that they actually work, is that they don't distort the market like government interference. These methods get people to work more, not just spend more or spend differently.AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-28435029782047531522009-11-22T19:51:23.232-05:002009-11-22T19:51:23.232-05:00Writer X, You're right. The Dems won't su...Writer X, You're right. The Dems won't support this because (1) they don't understand how it improves the economy and (2) they don't want to do anything that helps the evil rich.<br /><br />And you're right about the Republicans. Whenever they start talking about economics, they sound like accountants explaining the intricacies of the tax code. They need to learn to put these things into regular English.AndrewPricehttps://www.blogger.com/profile/11312364467936820986noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-59639670350804256132009-11-22T19:26:33.985-05:002009-11-22T19:26:33.985-05:00Unless the words "tax increase" and &quo...Unless the words "tax increase" and "new government program" are in the plan, I can't think of a single Democrat who would be in favor. Conversely, the Republicans really do a poor job of articulating economic ideas that work, even though the ideas are logical.Writer Xhttps://www.blogger.com/profile/16505411188186283813noreply@blogger.comtag:blogger.com,1999:blog-4425587034622601550.post-57395951737244673672009-11-22T19:21:22.395-05:002009-11-22T19:21:22.395-05:00Those are both proven methods to achieve stimulati...Those are both proven methods to achieve stimulating the job market, no doubt about it. Rather than have government take over industry, government needs to make the economic climate as easy as possible for private enterprise to flourish (the business of the nation is business!)Tennessee Jedhttps://www.blogger.com/profile/10604275115906776992noreply@blogger.com