Pretaxation

[Philosophy Explorer]

I've been thinking about the federal taxation system the way it's done in the US. We're on the pay-as-you-go system here in the US (which I think the federal rate is 17% on average for the federal government about every two weeks). We then file tax returns around April 15th to see if we overpaid or underpaid our taxes.

It's a lot of paper work to be sure. In this system people who don't file a tax return may get away with not paying their fair share of taxes.

I've been thinking about something I call pretaxation to replace the current system we have. Instead of basing it on income, I base it on money that's created. To see how this works, let's focus on the money that's printed up and say, for sake of example, the US government prints up 1 trillion dollars worth during a certain year. Let's say it's decided by Congress that the Treasury should set aside 15% or 15 billion dollars worth for use by the federal government with the remainder to be distributed throughout the US through the banks. Such a system can replace the current system where we would no longer have to file a tax return e.g. Offhand I don't know if such a system was ever proposed and the worst thing I can think about it is it putting accountants out of business, but I believe it to be feasible and more efficient plus there would be more privacy.

Any thoughts on this?

PhilX

[Hobbes' Choice]

I've been thinking about the federal taxation system the way it's done in the US. We're on the pay-as-you-go system here in the US (which I think the federal rate is 17% on average for the federal government about every two weeks). We then file tax returns around April 15th to see if we overpaid or underpaid our taxes.

It's a lot of paper work to be sure. In this system people who don't file a tax return may get away with not paying their fair share of taxes.

I've been thinking about something I call pretaxation to replace the current system we have. Instead of basing it on income, I base it on money that's created. To see how this works, let's focus on the money that's printed up and say, for sake of example, the US government prints up 1 trillion dollars worth during a certain year. Let's say it's decided by Congress that the Treasury should set aside 15% or 15 billion dollars worth for use by the federal government with the remainder to be distributed throughout the US through the banks. Such a system can replace the current system where we would no longer have to file a tax return e.g. Offhand I don't know if such a system was ever proposed and the worst thing I can think about it is it putting accountants out of business, but I believe it to be feasible and more efficient plus there would be more privacy.

Any thoughts on this?

PhilX

Maybe I am misreading what you are saying, but is this not 15% inflation, and no tax?

[Philosophy Explorer]

I've been thinking about the federal taxation system the way it's done in the US. We're on the pay-as-you-go system here in the US (which I think the federal rate is 17% on average for the federal government about every two weeks). We then file tax returns around April 15th to see if we overpaid or underpaid our taxes.

It's a lot of paper work to be sure. In this system people who don't file a tax return may get away with not paying their fair share of taxes.

I've been thinking about something I call pretaxation to replace the current system we have. Instead of basing it on income, I base it on money that's created. To see how this works, let's focus on the money that's printed up and say, for sake of example, the US government prints up 1 trillion dollars worth during a certain year. Let's say it's decided by Congress that the Treasury should set aside 15% or 15 billion dollars worth for use by the federal government with the remainder to be distributed throughout the US through the banks. Such a system can replace the current system where we would no longer have to file a tax return e.g. Offhand I don't know if such a system was ever proposed and the worst thing I can think about it is it putting accountants out of business, but I believe it to be feasible and more efficient plus there would be more privacy.

Any thoughts on this?

PhilX

Maybe I am misreading what you are saying, but is this not 15% inflation, and no tax?

You have it half right (the no taxation portion). No inflation involved. Congress would be charged with the ultimate responsibility as to how much would be set aside for the US government (through the US Treasury). The banking system through the Federal Reserve would distribute the remainder throughout the US.

The basis for how much money is printed up I don't know offhand except to say that a portion of it is replacement for worn-out bills. I forgot to explicitly mention another advantage to pretaxation is no more tax cheating.

PhilX

[thedoc]

I've been thinking about the federal taxation system the way it's done in the US. We're on the pay-as-you-go system here in the US (which I think the federal rate is 17% on average for the federal government about every two weeks). We then file tax returns around April 15th to see if we overpaid or underpaid our taxes.

It's a lot of paper work to be sure. In this system people who don't file a tax return may get away with not paying their fair share of taxes.

I've been thinking about something I call pretaxation to replace the current system we have. Instead of basing it on income, I base it on money that's created. To see how this works, let's focus on the money that's printed up and say, for sake of example, the US government prints up 1 trillion dollars worth during a certain year. Let's say it's decided by Congress that the Treasury should set aside 15% or 15 billion dollars worth for use by the federal government with the remainder to be distributed throughout the US through the banks. Such a system can replace the current system where we would no longer have to file a tax return e.g. Offhand I don't know if such a system was ever proposed and the worst thing I can think about it is it putting accountants out of business, but I believe it to be feasible and more efficient plus there would be more privacy.

Any thoughts on this?

PhilX

Maybe I am misreading what you are saying, but is this not 15% inflation, and no tax?

You have it half right (the no taxation portion). No inflation involved. Congress would be charged with the ultimate responsibility as to how much would be set aside for the US government (through the US Treasury). The banking system through the Federal Reserve would distribute the remainder throughout the US.

The basis for how much money is printed up I don't know offhand except to say that a portion of it is replacement for worn-out bills. I forgot to explicitly mention another advantage to pretaxation is no more tax cheating.

PhilX

The one problem I can see for now is that a lot of money is exchanged electronically and does not involve paper currency at all. This form of wealth would need to be accommodated for the system to work, otherwise everyone would shift to the electronic payments and avoid tax altogether.

[Philosophy Explorer]

Quoting thedoc:

"The one problem I can see for now is that a lot of money is exchanged electronically and does not involve paper currency at all. This form of wealth would need to be accommodated for the system to work, otherwise everyone would shift to the electronic payments and avoid tax altogether."

This can still happen under our current system (if it can work for the tax dodger). I wanted to keep the discussion simple, but I should now bring up loans created by a bank as another way of creating money. Should we pretax on this? If so, how?

PhilX

[David Handeye]

Actually it wouldn't work for a simple reason, as your federal government, doesn't print money, it asks Treasury. Treasury, doesn't print money, it asks printing to the FED. FED prints money. And then it loans money to Treasury. Treasury prints some paper, on which there is written U.S. Treasury Bond, and gives that to the FED. Then Treasury puts that money printed by the FED into private banks. When U.S. Treasury Bond expires, Treasury takes that bond to the federal government, that will pay interest on that bond picking from the taxes you pay. Interests to be returned to the FED. The more money your government asks to be printed, the more interests it has to return, the more taxes you have to pay.

[Philosophy Explorer]

Actually it wouldn't work for a simple reason, as your federal government, doesn't print money, it asks Treasury. Treasury, doesn't print money, it asks printing to the FED. FED prints money. And then it loans money to Treasury. Treasury prints some paper, on which there is written U.S. Treasury Bond, and gives that to the FED. Then Treasury puts that money printed by the FED into private banks. When U.S. Treasury Bond expires, Treasury takes that bond to the federal government, that will pay interest on that bond picking from the taxes you pay. Interests to be returned to the FED. The more money your government asks to be printed, the more interests it has to return, the more taxes you have to pay.

Sorry to be disagreeable. The Fed distributes the money which the Treasury Dept. prints:

http://www.newyorkfed.org/aboutthefed/f ... fed01.html

PhilX

[David Handeye]

I have my doubts. But, as you like.

[Philosophy Explorer]

I have my doubts. But, as you like.

What are your doubts based on?

PhilX

[David Handeye]

I have my doubts. But, as you like.

What are your doubts based on?

PhilX

Zeitgeist.

[Hobbes' Choice]

I've been thinking about the federal taxation system the way it's done in the US. We're on the pay-as-you-go system here in the US (which I think the federal rate is 17% on average for the federal government about every two weeks). We then file tax returns around April 15th to see if we overpaid or underpaid our taxes.

It's a lot of paper work to be sure. In this system people who don't file a tax return may get away with not paying their fair share of taxes.

I've been thinking about something I call pretaxation to replace the current system we have. Instead of basing it on income, I base it on money that's created. To see how this works, let's focus on the money that's printed up and say, for sake of example, the US government prints up 1 trillion dollars worth during a certain year. Let's say it's decided by Congress that the Treasury should set aside 15% or 15 billion dollars worth for use by the federal government with the remainder to be distributed throughout the US through the banks. Such a system can replace the current system where we would no longer have to file a tax return e.g. Offhand I don't know if such a system was ever proposed and the worst thing I can think about it is it putting accountants out of business, but I believe it to be feasible and more efficient plus there would be more privacy.

Any thoughts on this?

PhilX

Maybe I am misreading what you are saying, but is this not 15% inflation, and no tax?

You have it half right (the no taxation portion). No inflation involved. Congress would be charged with the ultimate responsibility as to how much would be set aside for the US government (through the US Treasury). The banking system through the Federal Reserve would distribute the remainder throughout the US.

The basis for how much money is printed up I don't know offhand except to say that a portion of it is replacement for worn-out bills. I forgot to explicitly mention another advantage to pretaxation is no more tax cheating.

PhilX

Your recipe is for disaster.
Tax free rampage and wildcat inflation.

Printing the tax budge instead of gathering it, would lead to the highest inflation in history.
You have no understanding of economics.

[Philosophy Explorer]

Quoting Hobbes Choice:

"Your recipe is for disaster.
Tax free rampage and wildcat inflation.

Printing the tax budge instead of gathering it, would lead to the highest inflation in history.
You have no understanding of economics."

False alarm

By tax budget, I presume you mean the printing of money and deficit spending.

Here, read this:

http://www.forbes.com/sites/johntharvey ... inflation/

PhilX

[Hobbes' Choice]

Quoting Hobbes Choice:

"Your recipe is for disaster.
Tax free rampage and wildcat inflation.

Printing the tax budge instead of gathering it, would lead to the highest inflation in history.
You have no understanding of economics."

False alarm

By tax budget, I presume you mean the printing of money and deficit spending.

Here, read this:

http://www.forbes.com/sites/johntharvey ... inflation/

PhilX

The linked article is not relevant.
Printing money is inflationary. The rare times it does not actually cause inflation is when the economy is in a state of deflation. In other words, printing money can be used to stem negative inflation - BECAUSE printing money is inflationary.

You plan is to gain the government budget by printing money rather than gather taxation.
It is hare-brained.
The Government spends 20% of GDP. If it could not pull money from taxation it would have to print that 20% every year. ANy economist will tell you how stupid that is.
For each year the $1 in your pocket would be worth 20% less.

[Philosophy Explorer]

Quoting Hobbes' Choice:

"...Printing money is inflationary. The rare times it does not actually cause inflation is when the economy is in a state of deflation...."

How do you define inflation and deflation?

PhilX

[Hobbes' Choice]

Quoting Hobbes' Choice:

"...Printing money is inflationary. The rare times it does not actually cause inflation is when the economy is in a state of deflation...."

How do you define inflation and deflation?

PhilX

Re: the comment I made about you not understanding economics......QED.