[Quantum_Wizard]

I ran across this very interesting webcast where they discuss 6 different economic proposals that economists across the political spectrum agree with, but aren't necessarily popular with the voters. What's your take on these?

[Xort]

Could you list those points maybe?

[PluggyRug]

Xort Xort:

Could you list those points maybe?

Just listen to the episode in the link.

[Brenda]

What if you don't want to look for your head phones?
(or, in my case, what if you don't want to rip them out of your kids ears?)

[andyt]

1 overhaul taxcode - eliminate mortgage interest tax deduction. Favors the rich.

2. Tax employer supplied health insurance. = costlier and more retrictive health plans for most Americans, but will lower cost of health care over all.

3. Cut corporate income tax to 0. (Always thought so myself) Tax dividends at a higher rate instead.

4. Eliminate income and payroll taxes. (Seems to me this contradicts point 2).

5. Bring in a consumption tax, but make it progressive. And Pigovian taxes - ie sin taxes, pollution taxes, energy taxes - ie tax what you want less of.

6. Make illegal drugs legal. Enriches gangs, wastes justice system resources.

[herbie]

1 Mortgage interest isn't deductible
2 You already are taxed for employer paid health insurance premiums
3,4 are absurd american ideas
5 we already have GST/HST
6 All drugs?

[Brenda]

Ah, we are supposed to fix the American problem.

Let them all pay 50% of their income/gains. Problem solved.

[andyt]

It's NPR, of course it's about the US. But, we have some of the same problems they do as far as what the best sources of govt revenue are. As they said, no politician would ever get elected on a platform like this.

Since #4 obviates # 1 & 2, I'm not sure how well they thought this through.

[Quantum_Wizard]

herbie herbie:

1 Mortgage interest isn't deductible
2 You already are taxed for employer paid health insurance premiums

I guess these two points are moot in the case of Canada. If you want to tackle these, you can say whether you'd want to change the policy on these issues in Canada to be more like in US. I suspect you wouldn't and therefore agree with the economists on these.

herbie herbie:

3,4 are absurd american ideas

What's wrong with item 3? It really seems like no-brainer to me.

herbie herbie:

5 we already have GST/HST

And even US has sales tax (in most states at least). I guess the point was to move even more to the direction of taxing consumption rather than income. I think this part was actually in item 4 and item 5 was about taxing bad things like pollution.

herbie herbie:

6 All drugs?

They only mentioned marijuana by name, so I guess that's what they meant.

PS. I guess this thread was too off-topic for Filibuster. Too bad I didn't find the webcast before the US election was over.

[Quantum_Wizard]

andyt andyt:

Since #4 obviates # 1 & 2, I'm not sure how well they thought this through.

It still makes sense to talk about 1 and 2, so long as 4 isn't already reality. 4 is much more ambitious idea anyway and would thus probably take longer to implement, if it were possible.

[kilroy]

I don't understand the concept of zero corporate taxes being a no-brainer. One comment following the op article wondered why corporations which are treated as citizens, in fact as supra citizens, should be exempted from income tax. I think that is a very valid point, so what are the economic arguments that support such a strategy?

It seems to me that the opposite should occur including removal of tax freedom for money spent avoiding taxes. The larger ie more income you have the less you should be allowed to spend on screwing the tax man. The big threat of course is that the multinationals will walk out if they are taxed according to their income, I say let them walk.

[Xort]

"Tax employer supplied health insurance"

I'm not sure I understand what that means. Do you count the employer supplied health care as person income, which is then taxed?

[andyt]

Xort Xort:

"Tax employer supplied health insurance"

I'm not sure I understand what that means. Do you count the employer supplied health care as person income, which is then taxed?

The insurance has a value, ie a benefit given to the employee that is currently not taxed. 20 years ago, the rate for a family to have full coverage was about $3000/month if bought privately. It can only have gone up since then. That's something that Americans don't understand, that if their employer didn't have to give them $3000 a month in insurance coverage, because the govt provides that, they would be able to pay their employees that money every month in wages instead. American employers have tried to make the argument that Canadian medical coverage is a govt subsidy under NAFTA.

[Quantum_Wizard]

Xort Xort:

"Tax employer supplied health insurance"

I'm not sure I understand what that means. Do you count the employer supplied health care as person income, which is then taxed?

Employers often provide compensation to their workers in forms other than wages, such as providing them with a car or an apartment which they can use. These benefits are taxed for their (estimated) value like wages, since otherwise these could be used to avoid a part of the employees' income taxes.

However, employer provided health care has a special exemption from this in the US.

[Quantum_Wizard]

kilroy kilroy:

I don't understand the concept of zero corporate taxes being a no-brainer. One comment following the op article wondered why corporations which are treated as citizens, in fact as supra citizens, should be exempted from income tax. I think that is a very valid point, so what are the economic arguments that support such a strategy?

It seems to me that the opposite should occur including removal of tax freedom for money spent avoiding taxes. The larger ie more income you have the less you should be allowed to spend on screwing the tax man. The big threat of course is that the multinationals will walk out if they are taxed according to their income, I say let them walk.

The corporate income tax is essentially a tax on the owners of the corporation, since the purpose of corporations is to generate income for their owners. The owners also face taxation, when they receive dividends from their company.

The argument is that the latter type taxation makes more sense and is less distortionary.

All taxes fall on people essentially. This includes corporate taxes, since corporations are just tools for their owners. The treatment of corporations as persons in the judicial system really has no bearing on this.