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View Diary: Ways & Means chief David Camp wants to return to 1931 tax rate (110 comments)

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  •  Taxes Have Two Main Purposes (3+ / 0-)
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    Meteor Blades, OHknighty, trumpeter

    One is to raise revenues.

    But progressive taxation is about compressing the top half to keep it dependent on the long term welfare of society.

    We could solve numerous revenue problems by taxing fairly rich people up to say 50%, while still leaving the rich gaining the peoples' wealth indefinitely, and opportunity continuing to leave the country.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Mar 17, 2011 at 11:52:21 AM PDT

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    •  The other purpose is to (1+ / 0-)
      Recommended by:
      Radical def

      try to nudge businesses (and people) into desired behavior.

      If you get x for hiring somebody here, and you're right on the edge at hiring a person, that extra x might push you to hire now, rather than later.

      If you get y for putting in solar panels, and y is more than the cost of the solar panels (or brings the cost down to the replacement cost of what you were replacing, which gives you savings in electricity that just replacing with similar wouldn't), you get nudged into using solar panels.

      If you get z for offering reasonable health coverage that a certain percentage of your employees take, and z is equal to or greater than your cost of doing that, you offer health insurance.

      It's not forcing a business (or person) to do anything. It's making that choice a logical, maybe optimal, business decision.

      If I have to put a roof on my house, and the subsidy for installing a solar roof takes the cost down to what a regular roof would be - I'm installing the solar roof. But if there's nothing to help me with the cost, there's no way I can afford it.  

      •  I'm not sure I like a tax code (0+ / 0-)

        written to "nudge businesses (and people) into desired behavior".

        I think I understand your point that the tax code can make some investments look good that otherwise wouldn't - but why do we want to do that?  Solar panels, for example - if a cost/benefit analysis says there's only a 50 year payback on investment, why should the government (ie, me paying for your solar panels) want to drive that down to a 5 year payback so you'll do it?

        Or mortgage subsidies - if it doesn't otherwise make sense for you to buy instead of rent, why should I spend money to change your mind?

        It seems to me that this kind of "centralized economic planning" has caused more problems than it has solved - like the housing bubble and crash.

        Now, if we can determine what the governement really has to do and fund it with a simple, progressive tax code, then I think everything else will fall out in the "free market".  Solar panels, for example, may make sense for high energy users (or power plants) and will be installed.  They may not make sense on individual roof tops, and won't be put there.

        This may sound tea-baggish.  What makes it different, though, is I think the government does have a serious role to play in providing for social welfare - education, infrastructure, medical care, retirement plans, basic science research, environmental protection, and other basics that fall outside the scope of a normal profit motive in a free market.  So we identify those things and fund them with taxes (not deficits).

        I'm not really sure about all of this - I kinda like my mortgage deduction.  But it bears some serious thought by a cross section of politicians and economists.

        I still maintain that net taxes have to go up and they have to become more progressive if we are to address both the deficit and the growing income inequality in any serious way.

        •  Just for the record: (2+ / 0-)
          Recommended by:
          sethtriggs, wsexson

          Solar roofs ARE infrastructure. It means fewer utllity-sized power plants and fewer high voltage transmission lines.

          And they pay back what is invested in them much sooner than 50 years, even without a government tax credit: solar hot-water panels in about 8-10 years; PVs in about 15 (depending on where you live).

          Don't tell me what you believe. Tell me what you do and I'll tell you what you believe.

          by Meteor Blades on Thu Mar 17, 2011 at 01:16:01 PM PDT

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          •  OK - sounds like you have better facts (0+ / 0-)

            than the made-up example I used.  

            And every tax deduction, expemption and credit made sense to someone at some point in time.

            It still begs the question of why the government should collect taxes from everyone for a limited benefit to the few who install solar roofs (or buy houses, or Priuses, or earn capital gains, or, or, or......)

            As I said, I don't know the answers, but would love to see some serious policy discussions with experts who  might, or who might be able to stumble on the right answers together.

            •  Just one example of why this makes... (1+ / 0-)
              Recommended by:

              ...sense. If the nation took Bernie Sanders's proposal for 10 million solar roofs (or mine for 20 million) by 2020, it would not only build infrastructure, it would also reduce the price of solar roofing via economies of scale and innovation. In 10 years, those roofs might cost half as much, or a third, to install. We would all benefit from that (even if we didn't install of solar roof ourselves) because it would mean reduced CO2 in the atmosphere.

              Or, we could stop subsidizing people's gasoline prices via the $200 billion or so of the Defense budget that goes to protecting our access to foreign oil. That would send more people to buy hybrids or electric vehicles.

              Don't tell me what you believe. Tell me what you do and I'll tell you what you believe.

              by Meteor Blades on Thu Mar 17, 2011 at 02:14:30 PM PDT

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          •  When I was working in PV, (0+ / 0-)

            Payoff times, (including subsidies,) were running about 12 years. That was in 2005, I'd have to re-run the numbers with current panel and power prices to give an updated figure.

            Also, the payoff time didn't vary much with system size. People who needed larger arrays paid more upfront, but they also had higher power bills, and it pretty much balanced out.

            We sized systems at 80% of the customer's average usage over the previous year. This was chosen because of California's odd net-metering law, which only allows residential customers to offset their actual charges (not including connection fees and the like)... any excess power you generate is a free gift to your utility, they don't have to pay you for it. With a system sized at 80% of average usage, our customers were paying an annual bill of between 60 and 100 bucks.

            Add in extras like battery backup and the calculus changes, but for your basic residential system, 12 years was the typical payoff time.


            "It is better to die on your feet than to live on your knees." -- Emiliano Zapata Salazar
            "Dissent is patriotic. Blind obedience is treason." --me

            by Leftie Gunner on Thu Mar 17, 2011 at 04:23:10 PM PDT

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      •  Totally agree, incentives far better (0+ / 0-)

        than punitive measures.

        But strict suppression of practices that are against the public interest must also be implemented...

        And the rich must still pay, heh.

        Democracy is the most fundamental revolutionary principle. Information is the ultimate key.

        by Radical def on Thu Mar 17, 2011 at 01:38:09 PM PDT

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        •  So, this set of comments favors tax breaks, huh. (0+ / 0-)

          The result of providing these deductions and credits - all of which favor legitimate activities - is the kind of tax code we have today. These ideas are precisely what businesses advocate for ... and we call them loopholes.

          I'm just sayin'.

          Make things as simple as possible, but no simpler. Albert Einstein

          by TRPChicago on Thu Mar 17, 2011 at 04:55:55 PM PDT

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