Tax return money: How will you spend it?

[archibaldcrane]

I'm not sure if I understand this right. The supreme court in the first case stated that in order for a tax to not be a direct tax it has to be apportioned according to a states population? (That's the reason they said the tax was unconstitutional right?) Then it was alright to tax income? I think they basically said the same thing in the second case?

So what I'm getting from this is that the 16th amendment allowed the government to tax incomes without them having having to do with a states population?

Regardless, avoiding overpaying, why is that not a reason to support the Fairtax?

If we admit that avoiding overpaying is a good thing about the Fair Tax, will you stop saying that the income tax is or was unconstitutional?

[aurik]

Wrong. The government could always levy income taxes.

http://en.wikipedia.org/wiki/Pollock_v. ... 6_Trust_Co.

"Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429,[1] aff'd on reh'g, 158 U.S. 601[2] (1895) was an important United States Supreme Court case in which the court ruled that a particular type of income tax—specifically, a tax on income derived from property—was a direct tax under the United States Constitution, and consequently had to be levied in proportion to each state's population."

The Supreme Court found that prior to the 16th amendment, direct taxes (for example, income tax) could be levied, but only if in apportioned by each state's population.

The 16th amendment removed this constraint, but did not affect the government's power to actually levy income taxes.

Here's another resource for you to enlighten yourself with:
http://en.wikipedia.org/wiki/Brushaber_ ... c_Railroad
"In Brushaber the Court noted that even before the Sixteenth Amendment was passed, the Congress had authority to tax income."

I'm not sure if I understand this right. The supreme court in the first case stated that in order for a tax to not be a direct tax it has to be apportioned according to a states population? (That's the reason they said the tax was unconstitutional right?) Then it was alright to tax income? I think they basically said the same thing in the second case?

So what I'm getting from this is that the 16th amendment allowed the government to tax incomes without them having having to do with a states population?

Regardless, avoiding overpaying, why is that not a reason to support the Fairtax?

The constitution gives the government the ability to levy taxes, both indirect and direct. The founders were scared that larger states with more representation would vote for a disproportionate tax burden on the smaller states. Hence, the initial provision that taxes be proportionate to population.

This later was amended because it's much more effective to apportion based on affluence rather than population, as having a large population doesn't necessarily mean the affluence of the population is higher--or even equivalent. Which means apportionment is inherently unfair because it makes the assumption that everyone has equal earning power, and hence punishing states with large but poor populations.

The government makes the current garnish-style tax system extremely easy to underpay. The last few years, because I switched jobs and then got a sizable raise, I underpaid by several thousand dollars. And they don't even get on you about it unless you systematically and repeatedly make large underpayments in attempt to "game" the system. So in essence, tax underpayment is like a zero-interest 12-month float. So, Tyche getting burned by mis-estimating (or as The Command Guy would say, mis-underestimating) was really just his own oversight, and not a good reason to support the so-called FairTax.

After all, if I accidentally run a stop sign and get in an accident, that's no reason to say the stop sign should be removed.

[SwampdonkeyPLD]

Ah, understood. I guess there is one positive to the income tax though, underpaying.

[evilbau]

ugh how many times are we going to go over this lol

i'll keep out of this one

[Chicomagiko]

going to spend my refund enlarging my e-peen with some computer parts.


ENLARGE!

[Meat]

Why would anyone get a tax return?

[Jefe]

I won't get squat, then again, I don't pay anything either, I'm exempted :bagel:

[SwampdonkeyPLD]

ugh how many times are we going to go over this lol

i'll keep out of this one

I have 3 hours in between classes today with nothing to do, jump in!

[Fhqwghads]

Paying credit card bill, or maybe a big payment on my home equity line of credit bill, depending on how large my credit card bill is and how much I get back. Yeah... boring.

[Dolmen]

This tax refund to stimulate the economy is probably one of the dumbest ideas ever thought up. Give money to people that will generally use it on obligations or saving, yeah... If you want to stimulate the economy then give a refund to people that will actually be consumers.

As for my refund, I'll save it. Hoping to take a vacation out of country during the summer, so it will go towards that. So basically, the government is giving me a refund which I will spend in another country.

Also, the "Fairtax" is pointless and the problems it would cause would be insane. Also not to mention all of the jobs that would be lost due to CPA/accounting firms going under, the IRS workers losing their jobs, etc..., would be horrible.

[archibaldcrane]

Also not to mention all of the jobs that would be lost due to CPA/accounting firms going under, the IRS workers losing their jobs, etc..., would be horrible.

This is a terrible argument for keeping the current taxation system. There are plenty of others, use those instead.

[ASG]

Buying a PS3.

[AzazaelFenrir]

weeeeeeeee for extra money

boo for it being in June.

http://www.foxnews.com/story/0,2933,325192,00.html

[aurik]

This tax refund to stimulate the economy is probably one of the dumbest ideas ever thought up. Give money to people that will generally use it on obligations or saving, yeah... If you want to stimulate the economy then give a refund to people that will actually be consumers.

As for my refund, I'll save it. Hoping to take a vacation out of country during the summer, so it will go towards that. So basically, the government is giving me a refund which I will spend in another country.

Also, the "Fairtax" is pointless and the problems it would cause would be insane. Also not to mention all of the jobs that would be lost due to CPA/accounting firms going under, the IRS workers losing their jobs, etc..., would be horrible.

A few comments:

Giving a rebate to people that use the money simply to pay off an old debt, or save it, doesn't stimulate the economy. However, lots of people will pay off their old debt and then proceed to build a new debt by spending again, which essentially is the same as spending the rebate.

I'm not a proponent of the so-called FairTax, but a tax system which would eliminate the need for IRS/CPA/professional tax preparers would actually be a great reason to move to that tax system. The cost that is incurred in calculating tax burdens is an inefficiency in the system.

Let me set up a hypothetical:

Tax System A generates $20b in revenue, but costs $3b for tax preparation / auditors / collection
Tax System B generates $18b in revenue, but costs $1b for tax preparation / auditors / collection

In both cases, the government gets $17b. But in the second case, the population has essentially received a $2b rebate on their taxes. The question becomes, does Tax System B distribute the tax burden in a sensible manner?

[SwampdonkeyPLD]

This tax refund to stimulate the economy is probably one of the dumbest ideas ever thought up. Give money to people that will generally use it on obligations or saving, yeah... If you want to stimulate the economy then give a refund to people that will actually be consumers.

As for my refund, I'll save it. Hoping to take a vacation out of country during the summer, so it will go towards that. So basically, the government is giving me a refund which I will spend in another country.

Also, the "Fairtax" is pointless and the problems it would cause would be insane. Also not to mention all of the jobs that would be lost due to CPA/accounting firms going under, the IRS workers losing their jobs, etc..., would be horrible.

What problems would it cause? And are cars a bad thing because the people that produced buggies lost their jobs? Is air travel a bad thing because (I'm just guessing on this one) some people in the railroad industry lost their jobs?

Edit for Aurik: Yes it does.

[Howard Roark]

This tax refund to stimulate the economy is probably one of the dumbest ideas ever thought up. Give money to people that will generally use it on obligations or saving, yeah... If you want to stimulate the economy then give a refund to people that will actually be consumers.

As for my refund, I'll save it. Hoping to take a vacation out of country during the summer, so it will go towards that. So basically, the government is giving me a refund which I will spend in another country.

Also, the "Fairtax" is pointless and the problems it would cause would be insane. Also not to mention all of the jobs that would be lost due to CPA/accounting firms going under, the IRS workers losing their jobs, etc..., would be horrible.

A few comments:

Giving a rebate to people that use the money simply to pay off an old debt, or save it, doesn't stimulate the economy. However, lots of people will pay off their old debt and then proceed to build a new debt by spending again, which essentially is the same as spending the rebate.

I'm not a proponent of the so-called FairTax, but a tax system which would eliminate the need for IRS/CPA/professional tax preparers would actually be a great reason to move to that tax system. The cost that is incurred in calculating tax burdens is an inefficiency in the system.

Let me set up a hypothetical:

Tax System A generates $20b in revenue, but costs $3b for tax preparation / auditors / collection
Tax System B generates $18b in revenue, but costs $1b for tax preparation / auditors / collection

In both cases, the government gets $17b. But in the second case, the population has essentially received a $2b rebate on their taxes. The question becomes, does Tax System B distribute the tax burden in a sensible manner?

aurik, i cant help wonderin what you do for a living/educational background, i've always found you to break down pDif stuff with ease (which still boggles me from time to time haha) and your arguments here are very lucid with great examples

just wondering lol cuz i tend to ramble and it drives my friends nuts

[aurik]

Edit for Aurik: Yes it does.

And I disagree with you, taxing consumption instead of taxing income has the effect of shifting the burden away from people with large incomes (ie, the people benefiting from the current system), to people with large consumption (who drive the economy). In essence, it favors people with lots of income but little or no local consumption, which is hardly fair at all.

aurik, i cant help wonderin what you do for a living/educational background, i've always found you to break down pDif stuff with ease (which still boggles me from time to time haha) and your arguments here are very lucid with great examples

I work in hi-tech industry, and have a bachelors degree in mathematics.

[Howard Roark]

I work in hi-tech industry, and have a bachelors degree in mathematics.

cool, damn this artsy fartsy mind of mine heh

[Tyche]

weeeeeeeee for extra money

boo for it being in June.

http://www.foxnews.com/story/0,2933,325192,00.html

As much as I hate this idea from a national standpoint, I'm happy that i'll have more money for the wedding.

[Intense]

weeeeeeeee for extra money

boo for it being in June.

http://www.foxnews.com/story/0,2933,325192,00.html

As much as I hate this idea from a national standpoint, I'm happy that i'll have more money for the wedding.

So wait, this is EXTRA money on top of your return?