Do Both Liberals and Conservatives Have Taxing and Spending All Wrong?

[applegrove]

Do Both Liberals and Conservatives Have Taxing and Spending All Wrong?

by Joshua Holland at Moyers & Company

http://billmoyers.com/2014/08/29/do-both-liberals-and-conservatives-have-taxing-and-spending-all-wrong/

"SNIP.....................


So if I want to do something about rising income inequality in America, which is real and very complicated, I shouldn’t fixate on the progressive income tax. I should ask what the consequences of both government taxing and spending are in the real world.

The US has a relatively progressive tax system. But when you look at our government from the perspective of what effect it has on people’s lives, then the United States scores very badly compared to other wealthy countries, because it turns out that we have a progressive tax system that is financing a very small government – a government that’s too small to do a lot to help people.

Because government spending is inherently progressive, a regressive tax can nonetheless have a progressive effect once you take into account what that tax is buying. So a billionaire tax that nobody else has to pay would be very progressive. Only the richest Americans would have to pay it. But it would raise bupkis by way of total revenue — it wouldn’t finance much.

Other countries have regressive sales taxes called value added taxes, but those revenues are then used to provide free health care to everybody, and to finance education and other public goods. So, yes, they take money from more pockets than we do, but they also give back far more to lower income people in the form of public benefits than they’re taking from them. And that helps level the playing field.




........................SNIP"

[applegrove]

1. We have a Value Added Tax in Canada

that pays for our health care. People who have a lower income get checks in the mail to make up for the sales tax they pay.

[laundry_queen]

2. Also

Our safety net is a lot less complex but we get a lot more. For instance, in the US if I'm low income and a single parent, I can qualify for food stamps and WIC, after I go through a process to get started. In Canada, I am low income and a single parent, and I automatically get a child tax benefit check every month based on my previous year's tax return. A lot less bureaucracy. Less morality judgments attached to poverty and thus less bureaucracy and a more efficient safety net.

[salib]

3. Very easily dismissed section you chose

Hardly interesting.

1. The US does not have a progressive tax system. Try before Reagan to see a real progressive income tax system, or during Eisenhauer.

2. The result of high marginal tax rates, e.g. 90plus percent, is not simply more revenue but is also income control. That is a hugely progressive effect. Also help with wealth control. We do not need a handful of families with most of the wealth and more of the income.

3. Sorry, regressive taxes are regressive no matter what they are spent on. Yes, fight the fight to get money spent progressively, but that does not excuse a high sales tax and low property tax. They are separate issues and ones does not excuse the other.

4. Even the size of government, if it is based upon regressive taxes,!is not the point. Vermont has a small government yet is very progressive. It has a progressive tax system and progressive policies. But still can be quite frugal. The US has a huge (basically larger than the rest of the world combined) defense budget (big govt) yet no one would say that is progressive.

Hope there are better things for billmoyers.com to talk about.