I have been listening to the tax debate and have my own opinions about what should be done. That is the point of this blog.
I have blogged in the past about the need for some kind of "value added" tax similar to what Europe has that they call a VAT. Their's is about 20% on most goods. The problem with this debate is that most of the voters don't pay any income tax nor do they know very much about taxes. There is one very simple principle about taxes and that is, "if you want less of something, tax it". You will hear all kinds of ideas, but I don't think you will ever hear people saying that taxes are a penalty and damage what ever they apply too. Remember Newton? He made it clear that every thing has a cause. Think about it this way. When you drive your car, if you push on the gas, the car will go faster. If you take your foot off the gas, your car will stop going fast and slow down. It is the same with taxes. If you tax something, it will "hurt" what ever you are taxing and thus if you stop taxing some thing, it will hurt less or get better. I will return to this concept later.
Most of you don't know that the first significant tax law passed by the United States was done back in about 1790. It was the idea of Alexander Hamilton and it was to tax whiskey. That is what created the "Whiskey Rebellion" that President Washington is so famous for putting down. Think about this. If the tax was on "profit" from making whiskey, it would be much like our current income tax law that was passed over a 100 years later. Had they passed an income type tax, then Rum from Jamaica would be able to come in tax free. See how it works?
Now look at the gas tax that you pay on gas for your car. If that the tax on gas was on income for the oil companies rather than directly on the gas, gas from outside the United States would be cheaper than gas produced right here in the United States. That would put people who work in the oil industry out of business. How would that be? My point is that from the very beginning of the United States, we have had a form of "value added" tax rather than focusing only on "income". If you want less income the principle from above says, "tax it" and that is what we have been doing.
I blogged before about Social Security tax paid by both the worker and their employer and that it would be much more logical and better for our economy if that tax was applied as a "value added" tax so that items made outside the United States paid their fair share. I have no idea why a "value added" tax is referred to as a "border adjustment tax". In Europe they don't refer to their VAT as a "border adjustment tax".
Remember my blog about Obamacare where it "mandated" that employers had to provide health insurance to the children of their workers until they were age 26? This is clear example of hurting employers by putting an additional tax on them. If the "mandate" stated that they parents had to provide health insurance for their children until age 26, you would have a loud out cry. It was the parents who brought those children into the world and if anyone is responsible for them, it is the parents. There are a lot of parents after Obamacare who now do not have full time jobs that provide health care. How is that? It is clear that taxes and mandates hurt whatever they are applied too.
My final point is that almost 100% of countries that we have to deal with have some kind of tax on our goods that we sell the them. Why is it that so many of our stupid people are blind to this simple fact? Why are they so against us putting a tax on those country's goods and leveling the playing field? What we need is a much better debate where the players have some facts! The problem is that it is difficult to get and hold the attention of a mental 4 years old!!
PS--The more tax that is put onto business or mandates put onto businesses, like social security, the more it hurts employers. When you tax businesses, the less business you get. One of the main drivers of automation and the elimination of jobs is our tax policy on businesses. A value added type tax would be a first stem toward eliminating the penalties on businesses.
I have blogged in the past about the need for some kind of "value added" tax similar to what Europe has that they call a VAT. Their's is about 20% on most goods. The problem with this debate is that most of the voters don't pay any income tax nor do they know very much about taxes. There is one very simple principle about taxes and that is, "if you want less of something, tax it". You will hear all kinds of ideas, but I don't think you will ever hear people saying that taxes are a penalty and damage what ever they apply too. Remember Newton? He made it clear that every thing has a cause. Think about it this way. When you drive your car, if you push on the gas, the car will go faster. If you take your foot off the gas, your car will stop going fast and slow down. It is the same with taxes. If you tax something, it will "hurt" what ever you are taxing and thus if you stop taxing some thing, it will hurt less or get better. I will return to this concept later.
Most of you don't know that the first significant tax law passed by the United States was done back in about 1790. It was the idea of Alexander Hamilton and it was to tax whiskey. That is what created the "Whiskey Rebellion" that President Washington is so famous for putting down. Think about this. If the tax was on "profit" from making whiskey, it would be much like our current income tax law that was passed over a 100 years later. Had they passed an income type tax, then Rum from Jamaica would be able to come in tax free. See how it works?
Now look at the gas tax that you pay on gas for your car. If that the tax on gas was on income for the oil companies rather than directly on the gas, gas from outside the United States would be cheaper than gas produced right here in the United States. That would put people who work in the oil industry out of business. How would that be? My point is that from the very beginning of the United States, we have had a form of "value added" tax rather than focusing only on "income". If you want less income the principle from above says, "tax it" and that is what we have been doing.
I blogged before about Social Security tax paid by both the worker and their employer and that it would be much more logical and better for our economy if that tax was applied as a "value added" tax so that items made outside the United States paid their fair share. I have no idea why a "value added" tax is referred to as a "border adjustment tax". In Europe they don't refer to their VAT as a "border adjustment tax".
Remember my blog about Obamacare where it "mandated" that employers had to provide health insurance to the children of their workers until they were age 26? This is clear example of hurting employers by putting an additional tax on them. If the "mandate" stated that they parents had to provide health insurance for their children until age 26, you would have a loud out cry. It was the parents who brought those children into the world and if anyone is responsible for them, it is the parents. There are a lot of parents after Obamacare who now do not have full time jobs that provide health care. How is that? It is clear that taxes and mandates hurt whatever they are applied too.
My final point is that almost 100% of countries that we have to deal with have some kind of tax on our goods that we sell the them. Why is it that so many of our stupid people are blind to this simple fact? Why are they so against us putting a tax on those country's goods and leveling the playing field? What we need is a much better debate where the players have some facts! The problem is that it is difficult to get and hold the attention of a mental 4 years old!!
PS--The more tax that is put onto business or mandates put onto businesses, like social security, the more it hurts employers. When you tax businesses, the less business you get. One of the main drivers of automation and the elimination of jobs is our tax policy on businesses. A value added type tax would be a first stem toward eliminating the penalties on businesses.
