MOVING TAX POLICY TO PARTICIPATORY DEMOCRACY
Introduction: Before delving into fun areas such as tax policy, we need to remember our basic founding belief of a limited government. The problem is politicians. So, what do we expect from various governing bodies at the federal, state, county and local level and how much are we willing to spend for that collectivism?
In addition, we all dislike taxes because our form of government is a republic. In the context of taxes, we elect officials (politicians) who then determine the limited purposes of governing bodies. That responsibility includes determining the allocation of tax revenues leaving you, the voter with no participation in the allocation of collective spending. Your only participation is your vote for a particular elected official.
This paper proposes a gradual shift of the purse strings of a representative government to a participatory democracy where you as the voter control the purse strings of government by direct participation of how taxes are used. The idea is basically if you control how your tax dollars are spent for projects you want; paying taxes will be more tolerable.
Finally, there are so many varied taxes, it is almost impossible to list all of them.
I. Three types of tax policy: progressive, regressive and proportional; or a combination
a) Progressive tax
A progressive tax is a tax by which the tax rate increases as the taxable amount increases.[1][2][3][4][5] The easiest to under is income taxes. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate.[6][7] It can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime. Progressive taxes attempt to reduce the tax incidence of people with a lower ability-to-pay, as they shift the incidence disproportionately to those with a higher ability-to-pay.
The term is frequently applied in reference to personal income taxes, where people with more disposable income pay a higher percentage of that income in tax than do those with less income. It can also apply to adjustment of the tax base by using tax exemptions, tax credits, or selective taxation that would create progressive distributional effects. For example, a sales tax on luxury goods or the exemption of basic necessities may be described as having progressive effects as it increases a tax burden on high end consumption or decreases a tax burden on low end consumption respectively.[8][9][10] The opposite of a progressive tax is a regressive tax, where the tax rate decreases as the amount subject to taxation increases.[11][12][13][14] In between is a proportional tax, where the tax rate is fixed as the amount subject to taxation increases.[5]
b) Regressive Tax
A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.[1][2][3][4][5] The easiest example is sales taxes. In simple terms, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich — there is an inverse relationship between the tax rate and the taxpayer's ability to pay as measured by assets, consumption, or income.
"Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the marginal tax rate.[6][7] It can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime. Regressive taxes attempt to reduce the tax incidence of people with higher ability-to-pay, as they shift the incidence disproportionately to those with lower ability-to-pay. The opposite of a regressive tax is a progressive tax, where the tax rate increases as the amount subject to taxation increases.[8][9][10][11]
c) Proportional tax
A proportional tax is a tax imposed so that the tax rate is fixed as the amount subject to taxation increases.[1] For example, fees on licenses or postage stamps. In simple terms, it imposes an equal burden (relative to resources) on the rich and poor. "Proportional" describes a distribution effect on income or expenditure, referring to the way the rate remains consistent (does not progress from "low to high" or "high to low" as income or consumption changes), where the marginal tax rate is equal to the average tax rate.[2][3] It can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime. Proportional taxes maintain equal tax incidence regardless of the ability-to-pay and do not shift the incidence disproportionately to those with a higher or lower economic well-being.
Proportional taxes are uncommon in advanced economies, whose nationwide taxes typically include a graduated tax on household incomes and corporate profits, such that the marginal tax rate rises as the income or profit of the taxed entity rises.[citation needed] Flat taxes, implemented as well as proposed, usually exempt from taxation household income below a statutorily determined level that is a function of the type and size of the household. As a result, such a flat marginal rate is consistent with a progressive average tax rate. A progressive tax is a tax imposed so that the tax rate increases as the amount subject to taxation increases.[4][5][6]
H.R. 25 is a horrible tax idea supported by several of the novice congressional candidates. I stand alone in opposition to the Fair Tax out of all the congressional candidates for good reason. This alleged "fair tax" was written in 2003 by John Linder. Another reason I do not support it is because it is horrible regressive tax. So, for every item you consume or purchase including all good and services, at the federal level you would pay 23 cents of the dollar. Now that is not the only consumption tax. So where I live, per this horrible tax idea, I would be forced to pay that 23 cents per dollar as well as the local municipal taxes. So 23 cents plus 7.5 cents=30.5 cent tax on every dollar; for all goods and services.
Some of the novice congressional candidates (Gilyeat, Lightner, and Rysavy) have clearly stated they support the Fair Tax. Not only is HR 25 not a fair tax, it is also a regressive tax. Merely refer to the legislation H.R. 25. I doubt they did. And even if they had read and understood it, they clearly want this unfair tax.
On one section alone, the Fair Tax would require all parents with children in public schools to pay the fair market value of a public education. In Kansas, the cost of a free and public accessible education is in excess of $11,000. So, for each child enrolled, a parent would be forced to pay an unfair tax of 23 cents on the dollar for a public education per child. So, per child, that equates to roughly $2, 530 per child per year attending K-12. Now college students would also have to pay a consumption tax on top of their outrageously high tuition. Once again, at 23 cents per dollar of tuition paid.
So, if you want to pay for this kind of fiscal nonsense (fair tax), vote for them. I am not.