response 82 of 113:

Jul 3 15:44 UTC 2003

Re: #80
Taxation *IS* social engineering.  You cannot apply a tax without changing
the way the economy works.  There is no option of doing taxation without doing
social engineering.  The only options are which kind of social engineering
you are going to do.  You can disagree with the goals the lawmakers have
pursued with the tax code, but you cannot demand a "neutral" tax code.  There
is no such thing.

response 84 of 113:

Jul 3 16:32 UTC 2003

The VAT is, in effect, a national sales tax.  It is passed along 
through the manufacturing/retail chain from seller to buyer and is 
eventually paid in total by the consumer.  As a tax on consumption, it 
would be expected to reduce consumer spending and increase consumer 
savings.

response 86 of 113:

Jul 4 02:05 UTC 2003

I found it interesting.  The individual tax in Michigan has already been cut
severely, which explains why state programs also got cut severely.

I read that houses in Louisiana were at one time taxed according to number
of rooms, and closets counted as rooms, so they stopped building closets. 
In England they taxed by number of windows, so people bricked up their
windows.  In the Netherlands they made one large window (whole wall).  Here
they tax according to what they think your house would sell for if you had
to move because the taxes are so high, not what it actually cost you to build.

response 88 of 113:

Jul 4 03:22 UTC 2003

Re #82:  You got your first fallacy in your first sentence.  Taxation
per se is NOT social engineering; any tax may have social effects,
but to be "social engineering" the effect has to have been a goal of
the tax policy rather than an unintended outcome (design is required
to have engineering).  A tax policy which treats things more equally
has fewer distorting effects, and is "engineered" to raise money
rather than achieve some other end.

While searching for something else, I found an example of social
engineering via taxation gone horribly wrong.  Turns out that Denmark
imposed a tax on fuel used for heating, but not on fuel used for other
purposes.  This caused industry, which often had low-pressure steam or
hot water as a byproduct of some other process, to dump the heat to
the environment rather than selling it for heating buildings; if they
dumped the heat, they didn't owe tax on their fuel.  The tax policy
effectively demanded waste.

The result of a carbon tax would have been the opposite, as well as
being a simpler and more direct way to accomplish the end.  (Carbon
taxes are social engineering, but much more direct and harder to
game [and with fewer unintended consequences] than complex schemes.)

Re #81:  <russ has nothing to say, but agrees 99.9% with Walter>

Re #83:  Taxing firms which have yet to make a profit is a good way
to keep firms from getting started.  This may be why the USA does
a much better job of it than the European economies.

response 90 of 113:

Jul 4 03:53 UTC 2003

Re: #88
Taxing firms based on profits is equivalent to social engineering taxes
which favor hiding profits via shell games, cooked accounting, etc.  A
firm which hasn't yet made a profit still has to pay rent, electric bills,
costs of supplies, etc.  Why is social overhead (expressed by taxes) any
different?  BTW, have you ever heard of payroll taxes?

Re: #83
Speaking as a small business beancounter who deals with Michigan's SBT,
the intent may have been good, but the execution is crap.  There are three
or four different ways to figure the tax - sometimes it's "follow these
rules to see which applies", more often it's "calculate your tax in every
way, then take the answer you like best".  Immediate capital write-off (vs.
taxing payroll) is a clear tax incentive to fire your workers & replace 'em
with robots.  The huge complexity of it (vs. 941, SUW, etc.) is a subsidy
of the tax guru profession.

response 92 of 113:

Jul 5 17:03 UTC 2003

Re #90:
    I'm in favor of replacing man-hours with robots - especially in those jobs
that people don't seem to really want, such as fast food. It is the *only*
way we can ever get anything like a successful socialist economy.

    The hard fact is that at present, *somebody* has to do the grunt work.
In fact *most* people have to. While "anyone" might be able to be an engineer
or a programmer or a lawyer, *everyone* can't. Automation is the only way to
change this.

    The worries about skyrocketing "unemployment" due to worker replacement
by machines could be addressed: shorter hours legislation with teeth in it.
But that might not even be necessary.

response 94 of 113:

Jul 5 22:06 UTC 2003

Re: #90
Russ, are you talking about taxing profits in the real world, or in some
fantasy world of yours, where you write the laws of every country and no
one on the planet can get a inappropriate valuation of a partially-
defaulted derivative security past your all-seeing eye?

Here in the real world, no business with enough savvy to understand the
tax laws needs to show a profit, an a great many do not...*ever*.

response 96 of 113:

Jul 6 03:36 UTC 2003

Re: #95
Remember that companies are de facto legally required to keep seperate
sets of books for reporting results to shareholders/banks/management
and to each different tax authority (seperate Federal/state/local even
if they're nothing more than a gas station).  How much "profit" there
is can vary widely depending on which set of books you're reading.

response 98 of 113:

Jul 7 02:00 UTC 2003

Financial "deals" are as complicated or simple as the principals choose.
Some people *like* to receive their income spread over a 25 year
amortized basis, with a cap on earnings in any one year, and an option
to renew.

Accounting of any significant sized organization is guaranteed to be
complicated.  Here's a simple example of why it's hard: how much does it
cost to run your car per-mile?  Think carefully.  Besides the gasoline,
there is the cost of oil changes, replacement tires, and brake pads.
Then there is the insurance - which is generally by time rather than
miles, so the marginal cost of driving an extra mile insurance-wise is
nearly "0".  Then there is the initial cost of the automobile, cost of
any repairs done, and the current market value of the vehicle, which
itself isn't absolutely fixed since it really depends on the best value
you could get for the vehicle, which you can't know without actually
selling it, and depends on whether you sell to your neighbors, privately
via the newspaper, or to a car dealer.  If the car was bought on time,
or leased, then that too needs to be factored in, somehow.  And then
there are the imponderables -- if you bought your car more than several
years ago, the dollars you spent for it are worth more than the dollars
you earn today.  If the 2nd set of tires you bought wore out twice as
rapidly as the first, does that mean those tire miles were twice as
expensive? How about snow tires?  Spare tires?  How do you count mileage
from them? What period of time should the cost of repairs be spread out
over? &Etc.  The answer to a lot of these questions is more or less
arbitrary.  Your car isn't going to cost any different in total if you
count the cost of tires against the mileage you got from them, or all up
front as a lump sum.  Fortunately for the average person, most of these
account decisions are not only arbitrary, but unnecessary.  But, now,
for a taxi cab company...

response 100 of 113:

Jul 7 21:27 UTC 2003

Re #98:  If you check the IRS publications, there are detailed
instructions for expenses and depreciation related to vehicles.
You have (had) 3 choices for depreciation (now four, with the
option to immediately expense it), and precious little else.
Not at all complex as these things go.

response 102 of 113:

Jul 8 21:38 UTC 2003

Re #101:  As I am on record as favoring carbon taxes, you are quite
wrong; I think that far MORE thought should be given to the consequences
of tax schemes, especially loopholes and exemptions.  AAMOF I was on
record in 1990 or so opposing CAFE standards without fuel-tax increases
(perverse incentives, since borne out by data) and the CARB electric
vehicle mandate (no incentive for consumers to adopt EVs while fuel was
cheap and the subsidy of EVs via conventional vehicle sales amounted
to a hidden tax on new vehicles rather than on use of petroleum, which
was the behavior the policy was allegedly aimed at reducing).

Right now the US has a policy (not sure exactly what form it takes) of
encouraging natural gas-fired electric generation capacity but we have
drilling restrictions and import restrictions on natural gas.  The
result is that NG prices are heading up, up, up and it's going to be
very expensive to heat homes this coming winter (and cool many of them
this summer).  Again, this needed better consideration of tax policy
(I presume it is an investment tax credit or production credit or both,
thus it falls under tax policy) esp. as related to other policy.

Tax policy is a rather blunt instrument, and trying to "narrowly tailor"
parts of it to promote particular ends has proven to be a bad idea.  It
works much better for promoting or discouraging things on a large scale.

response 104 of 113:

Jul 10 04:01 UTC 2003

Re #103:  Oh, of course I do.  That's one situation where the size of
the problem is a decent match to a big, blunt instrument.  Anytime
you're trying to discourage something, a tax works amazingly well;
tobacco consumption, for example.  But you've got to be careful that
the tax isn't too easy and profitable to evade so you don't create
opportunities for organized crime, e.g. smuggling.

As long as we've got to have taxes, taxing things that people should
probably be doing less of seems better than the alternative.

response 106 of 113:

Jul 10 16:05 UTC 2003

There is currently a negative tax on having children.