What angers me most is that the people who are holier than us are the ones placing this burden on those who can least afford it.

PS: Thanks for the update!

I think the property tax is something that needs to be worked on so that people better understand its components and have a separate say on each one.

I like your default position. :–>

If I remember correctly, half of the money we make goes to food and housing? That leaves well over half taxed, though I understand your point. Income taxes AND sales taxes? How about one or the other?

Fees & gas tax: We agree quite a bit. Stop hiding them. Make them a true tax and stop playing around. Eliminate most trips to the BMV, standing in line to “renew” my plate when I haven’t moved in over a decade! Also, we have a state gas tax, a federal gas tax, title transfer fees, liscense renewals, plate renewals. How much money do they need? I don’t know about where you live, but Columbus’ roads suck. (I’d eliminate the property tax except at the point of sale and create a seperate tax for what is needed: schools, etc…it’s more up front and honest)

As for Social Security and Medicare, I see your points and will go back to the drawing board. In the mean time, I’ll fall back on my “default” position — it’s my money! :)

And of course I acknowledge that a flat tax that starts at the first dollar hurts a poor person much more than a rich one.

Other points on taxes, and perhaps how to change them to accommodate your point that the poor sometimes get the shaft:

- Local income taxes are flat and probably “shouldn’t” be. You would think they shouldn’t kick in until maybe $10,000 or so of income, but in the name of simplicity (i.e., not having to fill out yet another complex tax form) that probably won’t change.

- Sales tax — I think the Ohio exemption for food and takeaway food does a half-decent job of exempting more spending by the poor as a percentage of their income vs. the rich. But in an ideal setting, maybe the first few thousand dollars of other purchases might be exempt too, and could carry through as a credit (refundable if necessary) in a line on the state income tax return form.

- On real estate taxes, you misunderstood my point. Of course I know they’re built into rents, but the amount built in as a percentage of a renter’s income is probably lower than the percentage of income a typical homeowner pays in real estate taxes.

- Personal property IS a regressive tax, no way around it. What’s ironic is that one of the biggest contributors to the recall of Davis in California was the Democrats increasing this regressive tax, hurting “their” constituency more, and sealing the deal on Davis’s departure. Democrats in other states where reducing or eliminating car taxes has been proposed have usually been opposed to them as well. Go figure.

- Fees. I’m less troubled by this. Shouldn’t everyone have to pay $40 or so to be able to drive their car? Do we really want to means test that? We could take that to absurd levels and means test things like national park admissions, etc., or even go into private items like means-testing car insurance, etc.

- Gas Tax — to the extent that there’s a correlation between road repair and maintenance needs and gas taxes paid, it seems that it’s fair that it should be paid regardless of your income. To the extent that gas taxes fund other things, it’s definitely a regressive tax, and gas taxes should be reduced to only what’s needed to repair and maintain existing roads and build clearly required new ones.

- The other nuisance taxes (telephone, cable, etc.) - they are clearly regressive and I believe have no correlation with any specific government service rendered. I would support ditching them all.

- The corporate income tax, dividends, cap gains — To the extent that companies price the corporate income tax into their products, which of course they have to, it’s a very regressive tax. In an ideal world, owners would pay pass-through tax on their share of corporate income, just like Sub-S’s and partnerships do now, and there would be no corporate income tax. That would also mean that taxation of dividends would end, as companies would normally have to issue big “distributions” instead of “dividends” to enable their shareholders to pay the pro rata income tax I just described. As a nice side benefit, companies would also have to justify why they are keeping their profits and not distributing them in their entirety, perhaps forcing more shareholder interest and activism than exists today. Cap gains would still get taxed, though at the curent lower rates, to encourage capital flows to the best investment opportunities, and as we have seen with previous lower cap gains rates, to generate more revenue to the treasury in the process.

Regulation is fairly seen as a regressive, virtually flat-dollar tax on everyone. I looked around for some reliable figures for the costs companies and people assume as a result of regulation, but couldn’t find anything right away. I believe it works out to several thousand dollars per either person or family per year. Another irony — The people who complain most about how “unfair” the current tax system to the poor tend not to be in the camp that wants to radically cut back regulations that hurt poorer people didproportionately by adding to the cost of everything they buy, most of which as you noted, are needs and not wants.

I disagree with you on Social Security and Medicare, as I think their fairness has to be evaluated in terms of what a person gets in return for the taxes they pay in. The poor do very well by Medicare, while a person earning $1 million pays $29,000 a year into the system and will only in rare instances get anything resembling that level of benefit from it. For all practical purposes, that 2.9% should be seen an as additional income tax on the rich, and as an inadequate user fee paid by the poor.

On Social Security, the argument is simlar — lower earners get a huge payback relative to what they put into the system vs. upper middle-income earners (plus the federal income taxation of most benefits that upper-income earners receive).

As to the ability to save for retirement, which I believe is your sole remaining objection, I think the way that Social Security is skewed towards lower incomes makes up for a lot of that, but doesn’t solve the problem by any stretch, especially given that the SocSec system as it currently operates isn’t sustainable.

I propose to you that unless the government raises rates to confiscatory levels, taxes hurt poor people MORE than they do rich.

As such:

Local income tax, Sales tax, Medicare tax and such hurt the poor worse as they are less able to afford it. The government takes from the poor money that they can not afford to pay — giving back little.

Social Security: the rich can afford to set aside their own money above SS, the poor have less disposable income, making them more dependent on a system that everybody agrees needs to be fix. If SS is so good, why the need to fix it?

Real estate tax: Somebody has to pay those property taxes and let me tell you — it ain’t the property owner. I read that rents in Ohio are among the highest in the nation for this very reason. We’re not a New York yet, but it is hard.

Personal property tax: In Ohio, the poor are not as much effected by these taxes, but a sudden increase in income can be quickly gobbled up.

Taxes on dividends and capital gains: Trying to get ahead? The tax man is waiting. I have only owned stock once, but when I cashed in — so did the tax man.

OK, now let’s count the cost of the taxes that you did not cover:

Taxes hiding as “fees”: Driver’s liscense, tags etc… Don’t tell me they are fees, they are taxes and the poor are hurt more as they can less afford it.

Corporate taxes: yes, the poor pay these as well. While some are absorbed by the company, most are passed on to the consumer, poor ones again being less able to pay.

“Other”: gas taxes, the Gore telephone tax, the telephone tax still “paying” for the Spanish/American War (yep, true), damn…there’s too many to name!

The “hidden hand” of big government: The federal regulation on selling lettuce contains a half of a million words to it. Every mandate to a corporation, whatever it’s purpose, increases the cost of doing business, thus raising prices.

Bottom Line? Taxes suck — cut them!