Sunday's column on tax reform brought responses from several readers:
From Charlotte:
Just as important as the goal of ensuring that a new tax system will be less vulnerable to the vagaries of economic downturns is a goal of ensuring that it is also less vulnerable to budget creep during economic upturns. I hope our leaders are looking in both directions as they develop tax system revisions.
Another Charlotte reader:
I searched your Sunday article for come evidence of a call to examine the TOTAL tax rates of taxpayers at various income levels and am sad to say I found nothing. You might recall Warren Buffett's congressional testimony a year or so ago that his TOTAL tax rate was just over 17% while his receptionist's TOTAL tax rate was just over 34%. How can we set tax for various income levels and disregard what each income level is paying in TOTAL? It's unfair and ridiculous!
Before setting the tax rate on employees making $100,000 and less annually and those earning $1,000,000 and more annually we must in fairness realize that the first group is paying +7% payroll tax and that the latter group is paying one tenth or less of that rate, i. e., +0000.7%. That's a rate of 7.3 basis points more.
Then we also should consider the sales tax rate that lower income earners pay. Because they spend all they make, they pay as much 8.25%, compared to those who spend only half of the $1,000,000 they earn annually.
Please, I ask you, use your platform to help transparency!!!
Another reader:
Jack Betts' column this morning calls for state revenue reform, essentially the same call issued by an Observer editorial a couple of weeks ago. This is a good idea.
What I don't hear, however, is a call for reforming the state's spending. Let's don't squander a major advantage we have over other states -- like NY and CA -- less tax burden, an attraction to potential businesses and residents that will improve our economy, including our tax base.
Jack closes his piece with the observation that a new tax system should be less vulnerable to economic downturns. One way is to make sure services provided by government are necessary and really desirable.
In Mecklenburg a few months ago, Commissioner Robert led the charge for a new property tax appraisal to capture the property tax increases in the county since last evaluation. This was in the midst of a recession and business failure of one of our valued corporate citizens. Real estate values have not bottomed since. On the spending docket was the extension of health care benefits to partners of gay and lesbian county employees.
In Charlotte, falling sales tax revenues are hurting CATS. This will ultimately result in part of CATS operating expenses being off-loaded onto property owners. Yet, we are considering adding additional rail lines, even as much of the operating expenses are projected to be covered by increasing property values along the line projections. Will we have the residential base to back up the property utilization estimates? Looks doubtful.
The balance is this: In attracting new businesses and people, how much of the attraction is provided by government services, and how much of the attraction is provided by a low tax, pro business environment, located in the sun belt. Lawrence Summers, in an address Thursday carried on Bloomberg radio, stated that an integral part of the administration's economic plan is carbon emission restriction and limitation of foreign imports of oil and the expansion of non carbon energy sources, thereby helping to keep energy dollars in the country and creating new energy related jobs. This will raise energy prices, placing a premium on mobility and geography. Our warm winters, tolerable summers, keep home cooling and heating costs down, and our convenient location between the mountains and the seaside minimizes travel costs. Let's make sure we don't kill the goose with taxes?
Monday, April 13, 2009
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12 comments:
The purpose of the state collecting taxes is to attain revenue to pay for common government services.
Fast forward to where we are. You have credits for energy efficiency, kids, interest deductions that only encourage you NOT to pay down your mortgage, and dozens and dozens of other complicated codes that have turned to tax code into a measure to advance, reward and punish certain behavior. How did we get here?.
National Sales Tax: No matter how many ways you cut it, it will benefit the rich who only spend a fraction of the amount of the money they earn while punishing those who live at or slightly above their means (poor, lower middle class). Plus, it doesn't account for wealth spent overseas.
Flat Tax: The GOP took it hard (and maybe they should have) for lowering the tax rate on the rich by 2-3%. Forget the fact that all brackets got lowered at the same time. Do you really think there is a chance in H3LL of dropping the rate of top earners by 10-15% or more while increasing effective rate of lower earners to 20% for 5-10%?
The only reasonable way of doing this is a tiered flat tax. Good bye all credits, deductions, exclusions etc... Rates will be 0% for all income under 25k. 10% for 25K-100K. 15% for 100K to 250K and 25% for all income over 250K. With no deductions, that WILL be the effective tax rate. For record, I make around 100K and have a 10% effective rate.
There needs to be a flat tax system imposed. The US Gov needs to charge say 5% taxes on all transactions. With a GDP of over $13 Trillion, the US governments take annually will be approx $750 Billion annually. This will be fair to all, the more you spend the more you pay and on average, your tax bill will be 50% less because there will be no way for corporations and tax evaders to avoid paying.
As a citizen who is taxed to the hilt I am sick of paying for everyone else. My husband and I have no children that use the system yet we pay a lot more in income tax for that "privilege". We are healthy and hardworking requiring very little in government services-of course our taxes should pay for support services such as police, fire, roads, etc. but why should we, in effect, pay more to educate children than their parents?
Let's have a system that supports families but not give them an incentive like the one where we taxpayers literally pay for these children-example; I have a family member whose tax refund exceeded what they had paid in tax by several thousand dollars. What?!?! How is that fair?
I support a flat tax.
1-The IRS stops being a burden on the system. Of course they would have a limited roll to play for those with investment accounts and such but most people would not have to incur tax prep fees, prep time etc. Lots of $$$'s saved
2-I, personally, would still be paying more in tax then most but there would be no surprises.
3-While I think Anon.@ 12:56 has some reasonable arguments for a flat tax, I feel it burdens high income earners who WORK for their money. Perhaps an additional tier for those earning over $250K, if it is income from inheritance investments(not the inheritance itself). These should be the ones hit with 25% or more. Leave the people working hard to earn THEIR money at a lower level.
The rates on the "Tiered Flat Tax" plan was arbitrary. The main point was that a "True" flat tax, while "fair" is never going to succeed in the current, and really any political environment.
It is time for the tax plan to return to the purpose of the tax plan and for it to stop being used as a means to reward or punish behavior.
As far as the use of taxes, I see education as an effective community government service. While it may not benefit "everyone" immediately, and it definately benefits the individual receiving the education more, our society benefits hugely from a public education system. I wish it was more effective and more effecient. I hate reading things that say that the average public school child costs as much as the tuition to Charlotte Latin, but as far as the need, I personally believe it serves a purpose. And as far as your relitive who is getting a huge rebate. He/she is an idiot for giving a the government such a nice interest free loan.
Anon@2:23 I think you misunderstand. Schools are a valid use of my taxes, me paying higher taxes while parents get a write-off for having a child is what I find wrong. Also, when you work (as my relative did)there are these lovely things called mandatory payroll deductions.
I really did not expect such vitriol from someone who appeared to form such an intelligent post.
How about ending the tax exempt status for religious entities. Just because a group CHOOSES to believe in a particular mythology should in no way mean their organizations should be granted any tax exemptions.
Amen Anon@2:45! No more Mega churches, pink palaces and all that tripe!
I'm afraid implicit in all this "tax reform" talk -- at least as it applies to the on-going criminal conspiracy in Raleigh -- is the assumption that taxpayers' wallets need to be "reformed" so that they might supply MORE money to the pols in the General Assembly to dole out to their buddies and buddettes.
The state of North Carolina (along with Mecklenburg County and the city of Charlotte) was positively FLOODED with revenue during the past decade, quite over and above the rate of inflation and population growth.
What did the status quo pols who now have the gall to stand for "reform" do with every cent of that money plus several BILLION more in debt obligations? They SPENT IT. All of it.
Now they want more. The state, the county, and the city. All will come crying for more.
Contrary to Jack's unsupported assertions, the current system did not fail. In succeed all too well in supplying buckets of cash to amoral operators. There was -- and is -- no revenue shortage. There is, however, virtually no honor among elected officials, let alone rapacious profession staff.
This is the root of the problem. That Jack plays along with the status quo -- it is obscene to attribute the phrase "educate the public" to policymakers in this state -- should tell you where his true allegiances lie.
Anon @ 2:43, I misread your statement. I thought you were upset about funding for education, which can be annoying for some who don't have kids - or those who send there kids to private or homeschool (like we do). Public Education does benefit everyone.
As far as the Child Tax Credit or Dependencies deductions, they should be eliminated as they are neither fair, nor do they meet the "primary" goal of collecting taxes, which is to collect revenue to pay for common services. Instead they are rewarding or punishing behavior.
JAT, I couldn't agree with you more. I do believe congressional term limits (state, local and national) are necessary to prevent corruption. As long as our legislatures are elected every few years, they need to do what they can to "reward" constituents who supported them and friends who fund them...none of this have anything to do with the common government.
It's get to the point where the productive people should just say screw it. Why work hard to have most of it taken away?
If only our pols had the brains and thoughtfulness as those who wrote to Jack and posted here...but that would require putting the country first instead of the lobbyist and special interests who greae their palms and pay for their re-election campaigns.
TEA PARTY PROTEST DOWNTOWN CHARLOTTE ON APRIL 15TH. NO MORE TAXES!!!!!
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