Talk:Tax

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Contents

[edit] Quick notes

just quick notes, since i don't have the time or background to write well on it...

purpose: fund-raising vs control/social-engineering/behavior-modification

types: inheritance; custom/import/duty; reseller's; property

related/see also: bonds; notes

capital gains tax

personal property tax

business inventory tax (includes busines equipment)

import taxes vs farm subsidies

stamp duty

revenue stamp

revenue paper

imputed interest/income tax (on zero coupon bonds)

and just for humor, "The Microsoft Tax"

    thanks -- WP

[edit] "Distorts economies"?

The phrase 'It distorts economies because it punishes productive people for being productive' in relation to progressive taxation does rather assume that people who are more productive get paid more. This does not neccesarily hold true, even if production is defined as contribution to the creation of wealth. It is certainly not true if production is defined as the creation of value.

In addition, the adjectives distort and punish seem rather emotive. It can be argued that people paying higher rate taxes have a duty to contribute to the economy and nation more than others. (such as one-nation toryism)

Interested to discuss - Ddroar

In classical economics labor is paid its marginal product, the total value added it produces and so in this analytical framework workers that are more productive are indeed paid a higher wage. Taxes decrease the rewards for working and therefore distort the choice between work and leisure; a problem that becomes more important the higher the marginal tax rate. Because the marginal tax rate rises with income in progressive taxation, this distortion is indeed a problem.
The word "distort" is used quite correctly in this context and is standard economic lingo. You may have a case with the word punish. Maybe "discourage" or something similar would be better. I think another problem is that the sentence is meant to describe a tax's effect on economic efficiency, while your counterexample is a question of equity. - Tobias

>Other purposes might include redistribution >of income from the rich to the poor,

If the state appropriates money for the exact opposite purpose (enrichment of the rich at the expense of the poor), is it still tax money? - n8chz

... might include ... - think it´s not necessary.


[edit] Flat tax

"A flat tax would require the least amount of record-keeping."

Comment deleted as a non-sequitur. How the tax rate is applied ta a tax base has nothing to do with record-keeping. Record-keeping has more to do with determining the tax base. Eclecticology

For the record the comment was correct. The US tax system as an example is very convoluted and the paperwork, time, and expense to hire accountants to prepare tax returns in not small. It is estimated in the $50 billion range per year I believe. A simpler tax system such as a flat tax would require less record keeping, and reduce that cost. That is not immaterial. This is from somone in the industry and I make a lot of money because the tax system is complicated and I provide advice regarding it. - Taxman 15:44, Feb 17, 2005 (UTC)
A flat tax would not require the least amount of record-keeping. A poll tax would require even less since there is no "tax base" other than the existence of a person.
Land tax (or specifically, site-revenue) also requires very little record keeping. However there is an argument that this a flat tax on economic land rather than income. Lev Lafayette

[edit] Single rate with threshold

I believe that this page should at least mention the point that the combination of a single tax rate applied only on the excess of income/capital above a threshold will be result in a progressive tax in that the average rate of tax will increase with income/capital. An example is the income tax system which has operated in Sweden where a highly progressive tax is delivered by the combination of a high tax threshold and a single (high) tax rate. Alan Peakall 13:11 Oct 24, 2002 (UTC)

[edit] Fuel excise

It's erroneous to state that "fuel excise is often used to pay for public transportation, especially roads and bridges and for the protection of the environment" and "alcohol excise is used to discourage alcohol consumption and to pay for the costs of treating illness caused by alcohol abuse". This (the collection of a tax, guaranteeing to spend that money only on a specified, related purpose, is called hypothecation and finance ministers often hate the idea. -- 80.192.64.123

False. Taxes are used to curb negative externalities all the time, it is called a pigouvaian tax ( http://www.amosweb.com/cgi-bin/gls.pl?fcd=dsp&key=Pigouvian+tax ). Inefficiencies of negative externalities resulting from transactions, such as your example of alcoholism from the sale of alcohol, can be taxed to reduce harm.
Taxation is one of the most powerful tools available to improve the public good by curbing harmful transactions or behaviour. The few other tools are regulation and the legal system, each of which has its own problems.
I can draw up an example and have who ever did these wonderful graphics in the article remake with the same fonts and style.--ShaunMacPherson 07:53, 17 Mar 2004 (UTC)


[edit] "Involuntary fee"

Annoying quibble time: Tax is not an "involuntary fee", it's a "compulsory fee". Unless I am confused about the precise meaning of the words,an "involuntary" action is one that you have to do and have no choice about, where tax is (generally speaking) something that you have to do and may or may not do willingly. Should I change it? Tannin

Involuntary and compulsory are very similiar words, www.m-w.com has each of them in eachothers' definitions. I myself prefer compulsory since it relays a tone of enforcement. In any event my public finance books use compulsory in their definitions, everyone check their own see what they say :). --ShaunMacPherson 07:53, 17 Mar 2004 (UTC)
It's actually not a fee at all, since nothing is specifically rendered to the payer. Even if the tax is hypothecated, so that it goes to a specific purpose, it still doesn't connect with the specific payer. The technical term for this is "unrequited payment". And that's actually why it is wrong to describe a tithe as a tax - it is merely like a tax, but it is too specific to be precisely a tax. (So I'll alter that reference.) Likewise obligations in kind are not - technically - taxes, although they have very similar effects; I'll let those references stand while I think how best to handle the distinction. PML.

[edit] Inheritance taxes

"Inheritance taxes are extremely unpopular and many countries such as Canada and the United States have gotten rid of theirs or are in the process of doing so."

The first half of this is definitely not true. Personally I hate inheritance taxes too, but it's incorrect to assign that view to a majority of the residents of the US and Canada, especially with no time limitation. Many people find great satisfaction in knowing that the estate tax will punish 'the rich' on the assumption that the rich must have aquired their assets in some illicit or immoral manner. Envy has always been popular. Others argue in good faith that the estate tax is valuable in a social sense because it prevents families from becoming too powerful. And some argue that the estate tax saves the children of the wealthy from lives of unhappy idleness. Whatever the objective merits of those arguments, it is an objective fact that many people subjectively approve of inheritance taxes, regardless of whether they are objectively correct in doing so.

The quote's second half is also suspect. I don't know about Canada's inheritance tax, but the situation on the US Estate Tax is quite unclear. Most of the cuts in the federal tax have not really been cuts in federal revenue at all. Until the recent legislation, a portion of the revenue from the federal tax went to the states. The immediate change to the federal tax was to squeeze down on that money. The time has not yet come when the federal government will see serious reductions in its revenue from its estate tax. And many states are already considering state-level inheritance taxes independent of the federal tax to make up for the revenue they lost in the federal law change.

So it's much too broad to claim that the US is in the process of getting rid of its estate tax. There are reductions scheduled at the federal level, but those have not yet begun to really take hold. There is a scheduled repeal of the federal tax, but that lasts for only one year under rules that practically guarantee that Congress will revisit the issue. And it's entirely likely that many states will impose their own inheritance taxes, as they did before the federal government invented one.

I hate to cut the whole sentence because I don't really know what's going on in Canada. But I don't know how to rewrite it to make it true. On balance it's probably better to cut what I know is false than to leave something that might be true.

---

Well, in my opinion inheritance tax is a perfect tax - because you never actually pay it yourself. I suppose I'd better get over to inheritance to discuss the morality of the institution itself but as far as I am concerned if I inherit anything it is a windfall so I don't see why I shouldn't pay tax on it, since I pay tax on income I have earned or gain from dividends or capital gains. What's "envy" got to do with it? If one accepts that taxes are necessary (and of course it is possible to argue they are not) it makes sense for those with more money to pay more.

Exile ---

[edit] Public finance

The public finance section, which deals largly with taxation, government spending, government revenue etc., could use your help. It shouldn't be that this branch of social science, of which taxation is a subset, is 1/20th the size of its subordinate topics :).

I have a public finance book, Public Finanace in Canada 2nd edition Hyman / Strick, that we look to its table of contents to segment the article.

Hope to see you there! --ShaunMacPherson 08:02, 17 Mar 2004 (UTC)


[edit] Is a tax on land neutral?

"A popular theory is that the most economically neutral tax is a tax on land." I removed this, because:

  • the idea does not make much sense to me in current economies
  • I cannot find anybody proposing this theory, let alone any hint as to why it should be "popular".
You've never heard of Georgism?
It is common knowledge that land tax does not distort markets relations.
  • "Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry....Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them." (Adam Smith, The Wealth of Nations, Book I, Chapter 11 and Book 5, Chapter 2).
  • "The striking result is that a tax on rent will lead to no distortions or economic inefficiencies. Why not? Because a tax on pure economic rent does not change anyone's behavior. Demanders are unaffected because their price is unchanged. The behavior of suppliers is unaffected because the supply of land is fixed and cannot react. Hence, the economy operates after the tax exactly as it did before the tax -- with no distortions or inefficiencies arising as a result of the land tax." (Paul Samuelson, Economics, 16th ed., p. 250)

[edit] Unrequited payment?

The opening paragraph is not very neutral. "unrequited" is loading the topic; Government services are how the Government returns the fee. Referring to political parties rather than politics and economists rather than economics is misdirecting the arena of debate. Also, Tendentious is a $5 word. --Alexwcovington 04:25, 2 May 2004 (UTC)

Governments themselves use the term "unrequited payment" in relation to tax. A quick search of Google bears this out. Surely it is unrequited because you cannot expect anything specific in return: You certainly cannot sue for it. And if you do not pay it the services are usually still there for you. And some people pay more for the same service. And others pay more and do NOT qualify for the service because of a means test. Unrequited payment seems right to me. Paul Beardsell 00:59, 4 May 2004 (UTC)

In the use of the word today, "unrequited" most certainly does not fit the situation. It may be the case that it is used in law, but Wikipedia is not meant to be written in legalese. If you want to say you can't expect anything specific in return, say that. --Alexwcovington 15:14, 4 May 2004 (UTC)

That is the meaning of "unrequited". The phrase "unrequited payment" as it was used here is plainly a technical term. In what way does "unrequited" load the topic? Contradicting your first comment (and as you acknowledge in the most recent one) govt services do not necessarily arise from a tax. I think your edit should be undone. Paul Beardsell 16:37, 4 May 2004 (UTC)

"Tendentious" is not the same as "contentious". Replacing one by the other does not simply avoid an uncommon (to some) word: It changes the meaning. I will restore. If dumbing down is our aim then someone can replace "tendentious" with "characterised by biased argument" or similar.

[edit] Immorality

Taxes are immoral in that they are a form of legalized theft, they allow governments to take money from those who would unwillingly give. If asked the average person would not pay taxes, witness the social security maelstorm in the uS. Tithing, taxes its all the same. If everyone refused to pay taxes then all governments would fall. And good for them. --Tomtom 18:23, 26 Jan 2005 (UTC)

Uhuh. Anarchist by any chance? Exile 14:08, 17 Feb 2005 (UTC)

Could anyone write a contribution under this heading that relates morality to the issue of consent to taxation? (Presumably taxation is less offensive the greater the degree to which those who are paying the taxes have voted to have those taxes levied on themselves. For example, we can think of local farmers in a river valley voting to levy themselves to fund a local public good, such as flood control. Given hold-out/free rider problems, there is arguably a case for a rule that falls short of requiring unanimous consent in really important situations.) [Bryce 2 August 2005]

[edit] POV in "morality" section

As a libertarian I think I'm in a good position to report that the statement "governments levy taxes through a system of coercion" is POV. "Coercion" itself is a loaded word and statements of this sort are made exclusively by libertarians, anarchists, and those with similar viewpoints. This statement has no purpose either - we already said taxes are not optional, why are we driving the point home with libertarian rhetoric?

As for the other reverts, I'm confused. Removing scare quotes such as those around "necessary evil" is almost always a good thing. The word "confiscated" is POV, especially in scare quotes. The slavery/rape example is confusing and pointless. It analogizes rape to taxation. I don't understand the comment about copyediting social contract. We don't remove links to articles simply because they're not copyedited. Rhobite 07:08, Feb 18, 2005 (UTC)

Yes, I meant the copyedit was needed here. Paul Beardsell 07:16, 18 Feb 2005 (UTC)

Thinking about it a little more, I think the "coercion" thing can go back in if it's clearly attributed as a libertarian opinion. The rest of my changes should go back in. Rhobite 07:12, Feb 18, 2005 (UTC)

Rhobite, I could possibly have done what I am doing in a better way. I misunderstood the difference listing as being you removing the social contract link. But you will see I am already on the way of remaking some of your changes. Paul Beardsell 07:16, 18 Feb 2005 (UTC)

[edit] Payroll/Income/FICA

I removed FICA and put a mention in Taxation in the United States, since this article shouldn't delve into specifics of the U.S. tax system too much. About "payroll tax", that term is not restricted to flat-rate taxes or social insurance taxes. In the U.S., the term "payroll tax" refers to all taxes employers are required to withhold, e.g. income, social security, medicare, state, local. Rhobite 07:13, Mar 8, 2005 (UTC)

FICA-type taxes aren't unique to the U.S. system. I've added a general section on "Retirement tax", with reference to FICA and to the similar NIC's in the U.K. The idea of a tax that generates revenue and helps determine the worker's retirement benefit deserves to be noted. JamesMLane 07:22, 8 Mar 2005 (UTC)
I defer to y'all's judgement on this. But I gotta tell ya, I'd loathe living in a world where a government -- say, for instance, the Federal Government of the United States -- is able to concoct a tax -- say, for instance, the FICA tax -- that defies capitulation in a general article on taxation in an encyclopedia.
It's progressive; it's regressive; it's capped; it crawls on its belly like a reptile while the employer pays half. Meanwhile, they're savin' for us it while they're spendin' it, like drunk midshipmen on a night on the town in Bancock.
I'm gonna kick my cat, cry in my beer, howl at the moon, and reload 7.62 x 39 whilst chain-smokin' Luckies 'till the sun comes up. ô¿ô Mar 8, 07:49 (UTC)
There's no doubt that the U.S. Social Security tax is regressive. I just don't think it should be mentioned too much in a general article on taxation. Feel free to expand in the proper articles: Taxation in the United States (needs some work anyway) and FICA tax. Rhobite 08:15, Mar 8, 2005 (UTC)
There's no doubt that the U.S. Social Security system resembles a Ponzi scheme; which article BTW, since my edits, is likely in dire need of serious POV work. ô¿ô Mar. 08, 08:46:51 UTC

As a footnote, as noted by Rhobite above, the term "payroll tax" includes all taxes employers are required to withhold, e.g. income, social security, medicare, state, local. I'd like to add that the term "payroll tax" also includes other taxes that the employer cannot legally withhold, but must pay out of the employer's own pocket -- in the USA, for example, the "employer half" of FICA taxes (i.e., employer Social Security tax and employer Medicare tax), as well as the Federal unemployment tax and the state unemployment tax if any. Famspear 05:00, 8 March 2006 (UTC)

[edit] Morality section

The morality section serves no purpose. A person can decide for himself if taxation is immoral and the school of thought that taxation is morally wrong so small that the mere fact that it exists is not significant enough to include it for its own sake.

I disagree. The mere fact that a school of though is 'small' (by whose measures? in whose eyes? in whose opinion? I refuse to discuss the matter of size) doesn't deprive it of the right of being included in the article that is about the matter this school is related to. Otherwise, we could delete the articles on anarchocapitalism and some extreme leftist groups as well. The purpose of *any* encyclopedia should be to open the reader's mind to the facts, to let him or hear read about something new and surprising, and not to close in the circle of "most popular" views, beliefs, movements ideas, facts, etc. Also, to willingly avoid talking about some "unpopular" views is a well-known tactic of some politicized media and some commercial, printed encyclopedias as well. And it's a great advantage of wikipedia that almost all political movevements, including the minority movements as libertarians or Christian fundamentalists are being covered. Critto
It would be better to have a section on "Objections to taxation" There are many people who object to taxation without considering it immoral. And there are people who have some objections to taxations but do not oppose taxes because their objections are mitigated by the benefits. Also some people object to certain forms of taxation but not others.
Such a section would be OK; there, all forms of objection to taxation (including those based on morality and on other grounds, as economic efficiency), that means opposition to all or some forms of taxation could be gathered. However, no valid information about any movements, large or small, should be deleted. Critto
I'll agree and disagree. The general objections to taxation seems like a good plan and should really be done to NPOV this page. I would disagree however that the morality section serves no purpose. There is a substantial minority that do hold that view, and also those that don't care about the morality view, but simply are opposed to all taxes. So that proposed section would cover the whole concept much better I'd think, so the morality issue could be covered under that umbrella. So go ahead and take a stab at it, just don't remove any valid info. - Taxman 17:02, Apr 7, 2005 (UTC)

[edit] Adding another type of tax: Impost Tax

Whereas the excise tax is a per quantum assessed on purchase (consumption), the impost tax is a per quantum assessed on some measure or surrogate of production.

Impost taxes are fairly invisible in the United States, though not nonexistant. I'm personally aware of "license fees" for barber shops based on the number of barber chairs, and similar taxes on jukeboxes, coin operated video games, etc.

A friend from (South) Vietnam who was a tax collector described the impost tax they had for restaurants -- instead of an income tax, there was an impost assessed on each table and another on each chair in the restaurant.

The dynamics of this tax are interesting ... if you are a very successful restauranteur, you will pay the same tax as anyone else with the number of tables and chairs you have, but you will pay tax at a lower percentage of your profit. The moderately successful owner pays a higher percentage in tax. The incompetent business person is discouraged from continuing to be in business, since the tax stays the same; there is no subsidy for "losses".

(His stories were hilarious ... chairs and tables flying out of windows when the prep chef announced that the taxman was on his way ... )

I'd like to add a section on impost taxes and welcome any advice or comments; I am thinking I would add the new section immediately following Excises.

Mark 05:37, 22 October 2005 (UTC)

I had not heard the term "impost tax," but there is at least one interesting example of an impost tax in the United States. Early in the country's history, Congress imposed a tax on homes based on the number of doors in the house. In response, Thomas Jefferson designed a ceiling-to-floor window that, when opened, one could walk through. The device, called a "Jefferson window," was an attempt to avoid the door tax by transforming what, by definition, was a window into what, in practice, was a door.

Wikiant 13:08, 22 October 2005 (UTC)

In the USA, at the consitutional convention, the term "impost" was used exclusively to refer to customs duties/tariffs (to be the eclusive domain of the federal government, and states to have no right to impose taxes on imports.) I'd want to make sure there was appropriate clarification on the use of the term.

That story about Jefferson is brilliant! Always fun to lighten the mood in an article on taxes, heh!

Just yesterday ran across an impost in New Foundland .. a per hectare levy on mineral rights. And, it makes sense: if you exploit the mineral rights and produce income, the impost tax is a deduction (credit/offset) against the income tax. If you don't exploit the minerals, you must pay the tax anyway .. or, you lose the mineral rights! ... Which can be then granted to someone who, ostensibly, will use them productively.

Mark 22:45, 22 October 2005 (UTC)

[edit] Fair Tax

Why is Fair Tax top of the list, and so blatantly propagandic (not to mention POV)...

I am removing the entire section; it is blatant propaganda and it doesn't even mention what "Fair Tax" does tax (it's a consumption tax)

[edit] Economics of Taxing a Good

I just finished making some large edits to this section. I think some of the language was technically confusing and a little inaccurate--for example "goods" don't have elasticities, curves do. Also, some of the previous text seemed to imply the graphs showed taxes on consumers, but the tax is clearly on producers in the diagrams.

How is it that taxing profits does not alter the structure of production? Entrepreneurs make production decisions based fundamentally on their profit calculation that the value (price) of the produced good will exceed the value (costs) of its factors. Any tax on profits must be included in this calculation, and therefore affect both the quantity and the structure of production. If this is the argument of a particular school of thought, it should be attributed.

Why does everyone have to pay taxes?...thats not fair

[edit] Morality

Not a very great subsection, with a lot of weasel words and awkward phrasing, not to mention one-sentence arguments that certain are to be covered in far more detail under sections dealing with libertarianism. And plenty of bias. I've made some moderate modifications. I don't think it's appropriate to differentiate between the various schools of libertarianism, for example. It's like referencing every type of Green in a entry on economic development.

I've replaced the 'many say' and 'many maintain' with marginally less weasely phrasing - although I recognise that these are still not very informative. I've also added some links. --Nydas 21:27, 6 March 2006 (UTC)

[edit] Today!

Today taxes are due! Yay! Give America all the money!

[edit] Military and Income Taxes

I believe at one time in the United Starts members of the military did not pay federal income taxes. I think this changed after World War II. Does anyone of any evidence of this?

[edit] sales tax

The headline 'sales tax' doesn't tell you which states don't have a sales tax.

[edit] Dog breed

Hey, isn't the tax a dog breed? --Shandris 12:35, 15 June 2006 (UTC)


not understood this post Sanjiv swarup 15:56, 29 March 2007 (UTC)

[edit] Remove ACCA link

Removed the link because it was to a web-site not about taxes. The web-site is the home of a professional association. I saw no information at the site on taxes. It is improper to use Wikipedia to promote an organization. Please let me know if I'm wrong on this in which case I'll be happy to restore that link. SteveWolfer 17:02, 26 July 2006 (UTC)

[edit] clarification of the term "social insurance taxes"

I edited the "Who Pays" section to clarify that the phrase "social insurance taxes" was a euphenism used in the CBO report. Namely, it now reads (my addition is in bold):

Their numbers also show, that when broken down by quintile, the social insurance taxes (the label used by the CBO for taxes paid to the US's Social Security program) are regressive on an effective tax rate basis only for the highest quintile, though that quintile pays the largest share of social insurance taxes (44%). However, when returns to social insurance (in the form of retirement benefits) are accounted for, social insurance taxes are effectively progressive. (Table 1)

In the "table 1", I found this blurb:

The increase in the effective social insurance tax rate stems from two factors. In 2002 a larger share of wages fell below the Social Security taxable maximum, increasing payroll taxes relative to wage income. At the same time, wages made up a larger share of income in 2002 than in 2001, further pushing up the effective social insurance tax rate, which is measured as a percentage of total income.

It's possible that I'm missing some extraneous taxes associated with this category (eg, unemployment insurance which IIRC is paid by the employer). The US Social Security program does have parts that are clearly insurance, eg, disability benefits. But the retirement entitlements are open to dispute yet clearly part of this category IMHO. I feel that the above clarification perhaps with some correction will sidestep this potential POV problem. -- 69.105.203.180 06:41, 9 August 2006 (UTC)

[edit] NPOV edit of propaganda

The following was excised from the article because nutty ideas and biased assertions of opinion don't belong here:

Toll Tax

A Toll Tax is a tax that is collected anonymously and though this type of tax has been often used historically on roads and bridges, this type of tax has not been implemented as a sole or major revenue provider.

The greatest advantage to a toll tax being used as a sole provider of tax revenue that along with the anonymity it provides, the ability to automate allows for removal of the burden of tax regulation and collection.

The best example of this tax as a sole source tax is the: No Names No Numbers Tax which through such automation removes not only Internal Revenue Service and its huge tax burdens of regulation and bureaucracy; but removes both compliance costs a additional related tax burden that the people incur to comply with complicated tax regulations; and takes the crime of tax evasion which costs tax payers millions each year to incarcerate and keep such tax offenders; Turning the offense into a minimal traffic offense.

Through this tax all other taxes are abolished but for import which states collect for the federal government for it's operation, and use taxes which are limited to a particular use such as the gas tax for roads. Contribution by the American Patriot Party.

Taxation as a Political Pawn and Invasive Tool of Government

Taxation used for political posturing is often used to finance programs that will benefit the constituents of a particular political party.

Democrats and Republicans use taxes to finance social programs that benefit larger bureaucracies and to finance projects that benefit large constituent companies.

Both use the higher or lower tax stance to increase tax revenue ether by increased forced taxation or by increasing profitability through the greater economic growth. Neither has ever attempted to actually limit itself to tax based on the consent of the tax payer or to the minimal need of government to function. This is due to the 16th Amendment first deemed unconstitutional by the supreme court and later made as an amendment to make it so called "constitutional".

This gave the federal government a unlimited power to tax the general public and over throw the meanings of the 17th Grievance of the Declaration of Independence. With this power, Security of ones person, papers and effects became in jeopardy as the federal government through the use of income tax created a method to invade all affairs of business within the United States and that enters and leaves the United States. Contribution by the American Patriot Party.

Maybe we need a article regarding the politics of taxation...

[edit] Tax Burden

This section seems to be a little bit original research at the moment. I think arguably 100% of the tax "burden" regarding sales taxes is always going to be on the consumer. The issue really is in how taxes impact the fair market value of a product. Just because a high tax means the retailer has to charge a lower price doesn't mean the burden has shifted to the retailer, it just means that higher taxes have depressed the value of the product. Peyna 14:23, 19 August 2006 (UTC)

There is no original research. Pick up any principles-level microeconomics text and you will see this discussion of the burden of taxation. No, 100% of the burden is virtually never on the consumer -- 100% burden on the consumer requires the (theoretical) case in which the price elasticity of demand is infinite. Please consult standard Economics 101 material before commenting. Wikiant 14:33, 19 August 2006 (UTC)

Subsidies transfer 100% of the tax to the consumer Check USDA Farm Service Bureau: The 2002 program known as MILC, for Milk Income Loss Compensation, guarantees farmers a price of $16.94 per 100 pounds of milk - about 12 gallons. "The program paid Maine farmers $9.9 million last year and $1.2 million this year." (2002 report). This does not include all the wheat (40+M) and other subsidies; Further "Standard Economics 101" does not recognize corporate strategies, that, though can be hindered by downtrend economic effects, is not entirely driven by it. A company would be foolish not to factor in tax to the final product for optimal profit. This burden is directly transferred to the consumer. The retailer that purchases the product for resale is at the greatest risk of market swings, but also factors what is needed to pay his tax and make a profit. The final purchaser who can no longer differ the tax ultimately pays the burden of taxation. Any attempt to relate those who pay the most tax as those that pay the burden is propaganda for big industry. This is a fact; The greatest burden of taxation comes from regulation of taxation itself, The Heritage Foundation (Executive Memorandum #459 September 10, 1996) has estimated it took 677 billion in and of regulation - almost one half of direct taxation, to collect the other est. 700 billion in taxes. Add compliance costs and trying offender and incarcerating offenders for a average of 48 months each including their dental and doctor while incarcerated and you have a greater burden that the tax payer is saddled with. If you look at the information from the IRS, Federal statistics and Heritage Foundation reports, you will find that this is no trivial burden. How (in which to minimize this burden without infringing on freedoms), and the reason of why we pay the tax is more important than who pays the tax; This because the burden of regulation exceeds the purpose of the tax. I think that these need to be presented in this article. I think your edit of my earlier article of "who pays the burden of tax" was fair, I just think that it needs more information with these issues in mind and woulkd like to dicuss this futher to stay in Wiki's guidlines and possiblly written in cooperation with several users. User Richard Taylor APP.

Your terminology is not entirely correct. A subsidy is the opposite of a tax -- instead of taking money from the transaction, the government pays money into the transaction. Hence, your statement that "Subsidies transfer 100% of the tax to the consumer" doesn't communicate anything. There is no sense in debating an issue that is non-controversial. See any of the following links. Wikiant 12:10, 20 August 2006 (UTC)
http://www.sussex.ac.uk/Units/economics/introec/ieoh_6.ppt
http://www.rri.wvu.edu/WebBook/Garrett/chapterthree.htm
http://rdc1.net/class/PublicFinance/ec330ho3.pdf#search=%22%22burden%20of%20taxation%22%20elasticity%22
http://spot.colorado.edu/~kaplan/econ2010/section4/section4-main.html
http://www.heritage.org/Research/Taxes/cda04-12.cfm

Your links proves my point, they do not disregard it in several areas, here is one from the heritage.org link you have provided:"Statutory or Legal Obligation of an Excise Tax: Who pays a selective excise tax? The legal obli­gation to pay would depend on the wording of the statute. It might be called either a consumer-level tax (e.g., the gasoline excise tax, collected at the pump) or a producer-level tax (e.g., the alcohol and tobacco taxes, collected from manufacturers).As the diagram shows, the distinction is eco­nomically meaningless and does not reflect the economic division of the tax burden. Consumers and producers are both affected to some degree, regardless of the statutory label. How they share the incidence of the tax depends entirely on their responsiveness to the price changes, the slopes of the supply and demand curves, not on whether the wording of the statute charges the consumer with the tax and it is merely collected by the seller and forwarded to the government, or whether the statute names the seller as being charged with the tax directly." Further they discuss Tax base destortion as a real factor: "The Perfect Non-Distorting Tax Base? Politicians eagerly seek these last two situations of perfectly inelastic sup­ply and demand in their quest for the perfect tax base. No matter how high they might push the tax on such a prod­uct, the tax base would not collapse and revenues would keep climbing. In particular, poli­ticians like to believe that the demand curves for cigarettes, liquor, and gambling are perfectly inelastic. They are wrong, but they keep pushing tobacco and alcohol tax rates higher, hoping for a miracle. They also get stingy with the payout ratios on state-sponsored lotteries. In this case, it is those who buy lottery tickets who are hoping for a mira­cle. In theory, governments could reduce eco­nomic distortions and minimize dead weight losses by putting the highest tax rates on the prod­ucts or inputs that are in most inelastic demand or supply. The ultimate example of a non-distorting tax would be a head tax or poll tax that is owed just for being alive and is totally unrelated to any incre­mental earnings or the amount of one’s economic activity. Such a tax, however, might not pass the “equity” test unless it could be shown that all parties would share in the resulting improvement in national output and income." (i.e. or toll tax - its not who pays the tax but how with the minimal amount of burden of bureacracy and why and for what it is collected it is collected). Much of the information you have linked to is based on the hypothitical and is established as such by them. "...The need to consider these economy-wide and long-term ramifications, called “general equilib­rium” "analysis", is not a new idea in tax theory"... "VI. Analysis of Some Specific Types of Taxes: The Corporate Income Tax: Initial Incidence of the Corporate Income Tax. No competent student of taxation believes that corporations pay the corporate income tax. Only people pay taxes. Things and abstractions do not pay taxes. A corporation is, in law, a legal per­son, but that is, in fact, a legal fiction. Therefore, corporations do not really pay the corporate income tax. Conservative Nobel Prize–winning economist Milton Friedman is well known for espousing that view, but liberal economists share it as well. The liberal Nobel economist Wassily Leon­tief told The New York Times 20 years ago: Corporate income taxes fall ultimately on people. Economists have tried but have never succeeded in finding out how the weight of these taxes is ultimately distributed among income groups. There can be little doubt that elimination of corporate income taxes would simplify our tax system and limit its abuse.[35] (end of Heritage report)". What you have here is a attempt to assume that all burden of taxes are miraculously paid by the wealthiest, who of course shoveled ditches for 500,000 man hours within the year to hand the great tax to the government. There is no use debating an issue for which one side refuses to see the facts. If the Heritage foundation feels that the issue is debatable,it can be debated here at the very least in the form of a alternative view. User Richard Taylor APP.

It appears that we're talking at cross purposes. You said, "As the diagram shows, the distinction is eco­nomically meaningless and does not reflect the economic division of the tax burden." That's precisely my point: The law can state from whom the tax is collected, but it cannot say who pays the tax. Who pays the tax (the tax burden) is determined by market forces. Wikiant 00:45, 21 August 2006 (UTC)

Correct. And like my earlier article that you edited, I stated "Paying, or handing tax money to the government, does 'not always' (not, not ever) establish who pays the "Burden" of taxation." We are on the same line here. Now after reviewing the Heritage foundation information above with regard to " Politicians eagerly seek these last two situations of perfectly inelastic sup­ply" and... "The ultimate example of a non-distorting tax would be a head tax or poll tax that is owed just for being alive and is totally unrelated to any incre­mental earnings or the amount of one’s economic activity."; Then read the post above edit described as "propaganda". Which is not propaganda, but real thought on the matter of tax burden, it does sound "nutsy at first" but it in fact has much thought behind it especially with regard to tax burden and where it comes from. The heritage foundation describes a poll tax as ideal, but a poll tax takes regulation also, and regulation is the problem. Now if you and the previous editor can humor the idea, read not only the information regarding a statewide automated toll tax, but also the FAQ page on it. I think you will find that a greater discussion on the tax burden needs to be presented regarding all aspects, causes and factors in this article. User Richard Taylor APP.

[edit] Added Toll Tax and Use Tax (simple)

Needs expanding.

User: Richard Taylor APP

[edit] backward economies of India, Africa, et al

What exactly defines a "backward economy"? Isn't that more of an opinion? The world bank generally differentiates economies based on income. "Low income economies" might be more fitting.

[edit] External links

I belive there are too many links to american tax information, there should only be the IRS website I belive. The rest can go to a U.S.A tax page. Enlil Ninlil 07:20, 22 October 2006 (UTC)

[edit] Govt and property rights

I removed the following sentence from the section on the purpose of excise taxes: "The copyright holders' intellectual properties are also a government-issued privilege, not a natural right, and their economic and moral validity is thus open to question." There are two problems with the sentence. 1) Labeling intellectual properties as a government-issued privilege is POV and would certainly be disputed by many. 2) A statement on the nature of rights and their economic and moral validity belongs in an article on political philosophy - not taxation. SteveWolfer 16:45, 22 October 2006 (UTC)

[edit] Why do we need Tax?

Why can't the govt have the right to just create money out of nowhere?

The short answer is that governments have done this. Done on a large scale it collapses the economy after runaway inflation. On a smaller scale, it distorts economic planning, causes inflation, diminishes the value of the monetary unit, and finally results in recessions. It also hides the effects of the 'taxation' making it seem like tax payers are getting a free ride when in fact the economy (all of us) will bear the burdens of higher inflation, periodic recessions, a less predictable economic future, and higher costs of everything.
Here is the longer answer. Money, like all other things, has a price (what the market thinks a dollar is worth). And like all other things, that price is a product of supply and demand. When the government prints money the money supply increases faster than an increase in the goods and services it can buy - this makes the value of the dollar (its price) decrease. When it is seen that the government is printing money in great quantities, the market place uses other things to 'store value' - they invest in something that they expect to hold value (gold, real estate, etc.) and interest rates go up rapidly (people are expecting the money to be worth less when a loan is repaid). Interest rates (the cost of money) become part of the price of all goods and services - it becomes more expensive to live and to do business. The economy becomes shaky because there is uncertainty as to future prices which disrupts planning. More mistakes are made by businesses and the amount of liquidating and laying off that is needed often result in recessions. As government prints more and more money, people become less willing to accept it and use other monetary devices (e.g., foriegn currency) and this causes the value of the dollar to drop further. It turns into a vicious downward spiral that can result in runaway inflation (Austria before the war, Argentina not that long ago). A piece of paper has so little intrinsic worth that it counts on it's scarcity, authenticity, and a tradition of trustworthiness to hold a steady value, i.e., be a good 'money'. Fiat printing of money is a form of theft - as is forgery. It transfers value to the printer that is greater than those who will get stuck with the diminished value down the line. Steve 16:17, 25 November 2006 (UTC)

[edit] Image showing how compensation is distributed in an economy

Image showing how compensation is distributed in an economy
Image showing how compensation is distributed in an economy

Kmarinas86 18:18, 12 December 2006 (UTC)

[edit] doingbusiness.org

This link: Paying Taxes: The Global Picture The World Bank Group study

Was added by an IP address registered to the World Bank Group (doingbusiness.org is a World Bank project). In keeping with our conflict of interest and external links guidelines I've moved it here for consideration by regular editors of this article who are unaffiliated with the site. -- Siobhan Hansa 20:34, 23 January 2007 (UTC)

[edit] Rebate Flat Tax

Image:EZtax.png Source: http://www.geocities.com/kmar86/EZtax.xls —The preceding unsigned comment was added by Kmarinas86 (talk • contribs) 05:12, 6 February 2007 (UTC).

This appears to be a U.S. plan, so such should be addressed to Taxation in the United States or flat tax. However, I'm not sure it is noteworthy enough to be included - I'm not finding anything in Google. Morphh (talk) 14:21, 6 February 2007 (UTC)

[edit] What is a property tax?

I made some changes to the section on property tax. I believe the relevant information is found elsewhere in Wikipedia, but the essential distinction between a property tax and all other taxes is that a property tax is imposed on property by reason of its ownership. Property tax is a "state of being" tax (such as, in the State of Texas, the "state of title" on January 1st of each year).

By contrast, almost all other taxes are, conceptually, event taxes. A sales tax taxes a event known as a "sale." An income tax relates only to the income event -- if no income is deemed to have been realized (an event), then no tax is imposed. In the United States, gift taxes and estate taxes are imposed on an event -- known as a "transfer." Some of these concepts also overlap.

Stay tuned. Yours, Famspear 15:38, 6 February 2007 (UTC)

It's analogous to a Wealth tax of the more restrictive definition (x% of networth per year for ex). I'll check if we link there. - Taxman Talk 15:43, 6 February 2007 (UTC)
Interesting comments on events tax vs state of being. The above discussion on Impost taxes are also probably based upon a state of being. Reading that discussion from last Oct and the example given of using a restaurant's tables and chairs to levy tax, instead of income, you can see immediately the likelihood of more compliance. Have Gun, Will Travel 17:24, 7 February 2007 (UTC)
In the UK, property taxes such as business rates and their predecesors are based on occupation, rather than ownership. I don't know enough about US tax to know if I'm making a hollow distinction here?
The event taxes are then covered in the later sections (Transfer tax, IHT), which makes me think the structure here needs rejigging. At the moment the property tax section is talking about both broad property taxes, and the more specific land/building taxes. The other property related taxes then get their own sections. I feel that either property tax should be a broad intro to further sections, including section(s) on land/property taxes, or it should be kept tighter, leaving the other taxes to their own sections. Any opinions? Winklethorpe 22:33, 17 February 2007 (UTC)

[edit] Intro

From the intro:

  • When taxes are not fully paid, civil penalties such as fines or forfeiture are carried out...

perhaps should read,

  • may be carried out...

Also,

  • In most modern industrialized countries, when an individual fails to pay his government the taxes, it will ultimately result in fines, in some cases imprisonment and death or grievious bodily harm if he resists arrest.

Wow. Capital punishment in the People's Republic of China says this is true, and the case of Gordon Kahl in the US wasn't determined by a Tax Court, so these really are notable exceptions in "modern industrialized countries". Language in the intro seems a little harsh and may need some clarification. Have Gun, Will Travel 18:42, 7 February 2007 (UTC)

[edit] Bullets

Any thoughts on removing the bullets in the section "Purposes and effects of taxation" and turning these into paragraphs. The MOS states not use bullets if the passage reads easily using plain paragraphs. I think this could be written well as paragraphs. Morphh (talk) 02:07, 14 February 2007 (UTC)

[edit] jail tax

Is there such thing as a jail tax, in which when you are proven guilty of a crime the government withdraws a sertain percentage of your money based on the crime commited? The money would then go to funding the jail. (and I don't mean a fine)—The preceding unsigned comment was added by 69.255.15.249 (talk) 00:24, 17 February 2007 (UTC).

[edit] Inheritance Tax

The inheritance tax section contained only a peice of criticism: Some believe that inheritance taxes do not have any harmful effect on the economy and may even be beneficial as they encourage consumer spending by the elderly. However, some also believe them to discourage productivity and to disrupt the continuity of family-owned businesses. I've taken it out and replaced it with the introduction from the main inheritance tax article for now. As the inheritance tax article is basicly a set of links to other articles, there's no section for the deleted piece to go in. Winklethorpe 20:42, 18 February 2007 (UTC)

Looks good - I don't think we need a criticism section in this article on the inheritance tax. The main point in this article is to describe what it is and then they can go to the main article to learn about the pros/cons. Morphh (talk) 22:00, 18 February 2007 (UTC)

[edit] internal Linking Error

in the introduction paragraphs the link to fines needs to be redirected to the fine page. it is currently leading to a article about a place in spain

nevermind figured out how to change it myself, it's fixed now --KalusK9 04:28, 19 February 2007 (UTC)

[edit] Toll

The Toll section is titled Toll tax, and starts with that usage. I've always thought that while a toll was a tax, "Toll Tax" is a redundant term. A quick look in the dictionary seems to bear out that toll is used on its own (and indeeds originates from a word for tax). However, it may be that it's the more common usage in the USA - could someone confirm what you use on your side of the water? On a related note, the two links are to related ideas, but would it be better to link to a single "Toll" article, and reference to toll road and toll bridges from there? Winklethorpe 21:42, 19 February 2007 (UTC)

I've only really heard it as "Toll" as well and agree that this sounds redundent. I'll make the change. Toll goes to a disambig page with Toll road, Toll bridge, and Toll tunnel being the articles that relate. Morphh (talk) 22:19, 19 February 2007 (UTC)

[edit] COTM

Great job on the Collaboration! Thanks to all who helped out. The COTM for March is Value added tax. Morphh (talk) 15:33, 1 March 2007 (UTC)

[edit] Comment on Good article candidacy

The article needs more references. The sources for the text must be given at the bottom in a reference section. You can either use a general reference section, or inline citations, or a mix of both.--DorisHノート 18:56, 24 March 2007 (UTC)

Agreed, this is the main reason why I've failed the article - will give detailed feedback shortly! The Land 10:23, 28 March 2007 (UTC)

[edit] GA Review

Unfortunately the article was a clear Fail against the good article criteria. The main reasons for this are:

  • Referencing. There is only one reference and a small number of citations. There is no way this is sufficient to justify the content of the article. Any work used in the creation of the article should at very least be listed in the references section. Controversial material must have inline citation.
  • Breadth. There is very little mention of the economics of taxation; a major part of this article should be devoted to economics theories of the impact of taxation, optimal taxation theory, methods of minimising deadweight costs, the role of pigovian taxes, optimal income taxation, and so on. I don't think there's a need to include the diagrams demonstrating a deadweight cost.
  • Point of view. The article retains a US-centric point of view (lots of "In the US, this tax works this way: abroad, it might not" style material). I also get a general sense that the article gives undue weight to US Libertarian viewpoints, though I imagine this has been much worse in previous versions of the article.

I think this is a very important topic and I'd contribute to it myself, if I didn't have my next three wiki articles to work on already identified - so I might get roundto this one in a few months. Other comments which might help improve the article include:

  • The lead section doesn't do its job very well at present - cut the stuff about types of quasi-state and include more on the economic debates
  • The article is too 'listy', focusing on lists of types of tax. I would address this by consolidating the discussion of proportionality, burden, morality and historical impact in one section, and changing the alphabetic list of types of tax into a thematically ordered section, including historic examples of types of tax alongside current-day examples.

I hope these comments are useful and constructive - please feel free to ask if any of them are unclear. The Land 12:41, 28 March 2007 (UTC)

Thank you for a thorough explanation - I hope we can get to work on improving the article. I note you'd like to contribute in the future, which would be much appreciated. In the meantime, I intend to start a discussion of how best to proceed with the article below - perhaps you'd like to contribute to this planning stage? Winklethorpe 11:40, 29 March 2007 (UTC)
Looks promising - I'll see what I can do but no promises! The Land 16:08, 29 March 2007 (UTC)

[edit] Improvement Drive

The failure to meet GA (see above) makes me think the article needs a major overhaul to work. A FA like Law is, to me, a good example of a complex overview article being well handled. The 3 major criticisms in the GA fail were breadth (little on economics theories), POV (US-centric), and references (hardly any). I'd like to start a discussion on how best to tackle this, and I'm throwing out the following, after The Land's suggestions, as a starting point:

Should the article begin by establishing the theoretical basis of taxation, without too quickly getting into real world details? This could be followed by the development of taxation in history (which should illustrate how we have arrived at current day systems), and then a treatment of taxes broken down thematically, with appropriate examples (from around the world).

On the references front, one of the causes is that most of the main articles summarised are reference-lite as well, which asks the question of whether it would be better to get those in shape first, before coming back to their entries here.

I have to admit at this point that I wouldn't know where to start with much of this. We need some good reference material to start with - are there any major/standard works to start with, or is it the usual story of 2 economists producing 3 viewpoints? Winklethorpe 12:24, 29 March 2007 (UTC)

This sounds like a plan. I thought the review provided some good information. I knew it was short on sources but I hadn't thought about these other areas. I would think it would be fairly easy to get some sources for this article since it is more a general overview article. Morphh (talk) 13:27, 29 March 2007 (UTC)
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