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Author Topic: Are Low Taxes a Downside in Disguise?  (Read 4398 times)

ZuG

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Are Low Taxes a Downside in Disguise?
« on: July 07, 2003, 07:19:21 pm »

A kind of important thought occured to me:

The biggest thing that will unite regular citizens with the FSP is a common cause that all believe in. There are precious few of these causes, as libertarianism is at the far end of the political spectrum.

Reducing taxes is one of the best causes that will cause the regular citizenry to unite with us. They will willingly put us into office if we promise to lower taxes of all varieties, especially those that hurt individuals and small businesses, and then keep our promises.

Thus, is thinking about places that have already-low taxes as positive a misnomer? Without tax-reduction, what other near-universal unifying cause do with have with regular citizenry? In other words, if our first move isn't to reduce taxes, what would it be?

Drugs and sex? The religious right would be up in arms. Welfare? We would have "civil-rights" groups on us in a second. Guns? The gun-control lobby would nail us to the wall. City Planning? Those who benefit from such statist activities would unite against us.

How do we get our foot in the door if we can't promise to lower taxes?
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Adam Selene

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Re:Are Low Taxes a Downside in Disguise?
« Reply #1 on: July 07, 2003, 08:58:27 pm »

I mentioned this too.

However, libertarians aren't typically altruists; they're not likely to pay new taxes just "for the cause." Unless you have real likelihood of getting the income tax repealed in the first few years (perhaps even before 20,000 is reached), it will be a negative for membership.

The state income tax seems to already be a platform issue in Montana.

You can start straight off against federal income taxes (the real devil), but I'm not sure how you'll go about that.

Some states (Alaska and New Hampshire) have corporate but not personal income tax. You can rally for the elimination of corporate income taxes, but it's not quite as popular a cause.
« Last Edit: July 07, 2003, 09:28:29 pm by Adam Selene »
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Adam Selene

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Re:Are Low Taxes a Downside in Disguise?
« Reply #2 on: July 07, 2003, 08:59:03 pm »

State Individual Income Tax Rates
As of December 31, 2002

Alaska--
South Dakota--
Wyoming--
New Hampshire--*
North Dakota2.1% > $0
3.92% > $27,950
4.34% > $67,700
5.04% > $141,250
5.54% > $307,050
Delaware2.2% > $2K
3.9% > $5K
4.8% > $10K
5.2% > $20K
5.55% > $25K
5.95% > $60K
Idaho1.6% > $0
3.6% > $1,086
4.1% > $2,172
5.1% > $3,259
6.1% > $4,345
7.1% > $5,432
7.4% > $8,148
7.8% > $21,730
Maine2% > $0
4.5% > $4,149
7% > $8,249
8.5% > $16,499
Montana**2% > $0
3% > $2,200
4% > $4,400
5% > $8,700
6% > $13,100
7% > $17,400
8% > $21,800
9% > $30,500
10% > $43,500
11% > $76,200


* New Hampshire has a 5% tax on dividend & interest income (over $2400 threshold)

** Montana allows you to deduct your federal tax liability prior to calculating your state tax, reducing the effective rate.

Source: http://www.taxfoundation.org/individualincometaxrates.html



State Corporate Income Tax Rates
As of December 31, 2002


WyomingNone
South DakotaNone*
Montana6.75%
Idaho7.60%
Delaware8.70%
Maine3.5% > $0
7.93% > $25K
8.33% > $75K
8.93% > $250K
New Hampshire8.5% > $50K
9.25% > $150K
Alaska1.0% > $0
2.0% > $10K
3.0% > $20K
4.0% > $30K
5.0% > $40K
6.0% > $50K
7.0% > $60K
8.0% > $70K
9.0% > $80K
9.4% > $90K
Vermont7.0% > $0
8.1% > $10K
9.2% > $25K
9.75% > $250K
North Dakota3.0% > $0
4.5% > $3K
6.0% > $8K
7.5% > $20K
9.0% > $30K
10.5% > $50K

* South Dakota taxes banks only

** New Hampshire has two corporate taxes – the Business Profits Tax (BPT) and the Business Enterprise Tax (BET) – have different rates and bases. The BPT rate is 8.5% on gross income over $50K. The BET rate is either 0.75% on gross income over $150K, or 0.75% on total compensation paid out, including dividends and interest, over $75K, making 9.25% the top rate a corporation may face.


Source: http://www.taxfoundation.org/corporateincometaxrates.html



For FAQs and forms on personal and business income taxes, you can visit each of the following websites:

Delaware Division of Revenue
http://www.state.de.us/revenue/

Idaho State Tax Commission
http://www2.state.id.us/tax/

Maine Revenue Services
http://www.state.me.us/revenue/

Montana Department of Revenue
http://www.state.mt.us/revenue/

North Dakota State Tax Commissioner
http://www.state.nd.us/taxdpt/

Vermont Deparment of Taxes
http://www.state.vt.us/tax/


For information on business income taxes, you can visit each of the following websites:

Alaksa Department of Revenue - Tax Division
http://www.tax.state.ak.us

New Hampshire Department of Revenue Administration
http://www.state.nh.us/revenue/


The following States have neither personal nor business income tax, but I've included their links anyway:

South Dakota Department of Revenue
http://www.state.sd.us/drr/revenue.html

Wyoming Department of Revenue
http://revenue.state.wy.us/


Also, see this thread for more tax statistics:
http://forum.freestateproject.org/index.php?board=5;action=display;threadid=2315;start=0
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Adam Selene

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Re:Are Low Taxes a Downside in Disguise?
« Reply #3 on: July 07, 2003, 09:12:56 pm »

Also, keep in mind that while you may not be in the top tax bracket, the people we want to attract (the prime movers of Atlas Shrugged fame) are certainly. [Only North Dakota has a top tax bracket over $80k.]

Corporate income taxes are not so much an issue for me, given I've already solved that devil. [It's really quite simple -- profit centers in low-tax jurisdictions, cost centers of high-tax jurisdictions]

The New Hampshire tax on wages is an annoyance, but not high enough (0.5%) to become a burden.

North Dakota seems to have the most reasonable personal tax rates (with large brackets) if you really want to have this issue available to your platform.

BTW, rather than emphasizing income tax as a financial burden, I prefer to argue that income tax is a gross violation of privacy and due process, and an enormous accounting expense funding a whole sector of the economy (tax accounting/law) that does nothing but suck money and talent away from more productive sectors.
« Last Edit: July 07, 2003, 09:16:29 pm by Adam Selene »
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alecmuller

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Re:Are Low Taxes a Downside in Disguise?
« Reply #4 on: July 07, 2003, 10:16:13 pm »

<I took too long to write and libertarian40 beat me to the punch :P>

Personally, I believe that the fight to reduce taxes will be the toughest part of our project, and that the lower they are to start off with the easier the challenge will be.  Lower current taxes mean a smaller current government and less involuntary socialism for us to roll back.

Given the (huge) benefit of lower taxes, how does it compare with the possible downsides?  I'm asking earnestly here - would we really lose taxation as a rallying cry?

Even if we do pick a low-tax state we can still make taxation one of our biggest issues because there isn't a state in existence where people actually like paying taxes (assuming Slick Willy and other vote chasers are few and far between).  If we can provide viable alternatives to involuntary socialism (and we can), then we'll always be able to strike a chord with anyone who pays taxes.
« Last Edit: July 07, 2003, 10:17:37 pm by alecmuller »
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William Bryan

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Re:Are Low Taxes a Downside in Disguise?
« Reply #5 on: July 07, 2003, 11:43:45 pm »

How do we get our foot in the door if we can't promise to lower taxes?

Naturally, if we're to come in slashing taxes, something's got to go.  As everyone here already knows all too well, taxes cannot be cut without cutting benefits, programs, jobs, or any and maybe all three.  There's no getting around the fact that we're going to make some enemies right off the bat.
Like you said, ZuG,
Drugs and sex? The religious right would be up in arms. Welfare? We would have "civil-rights" groups on us in a second. Guns? The gun-control lobby would nail us to the wall. City Planning? Those who benefit from such statist activities would unite against us.
One or all of them will be affected; we just have to plan it correctly.  We have an advantage in that we can be prepared for the backlash because we will already know which group will be gunning for us.  It is all very delicate... I do not forsee any changes in the first few years after the migration is complete.
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Kelton Baker

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Re:Are Low Taxes a Downside in Disguise?
« Reply #6 on: July 07, 2003, 11:47:36 pm »

A kind of important thought occured to me:

...

ZuG,
you may actually be on to something here...

I just watched Sen. John Edwards D-North Carolina speak on C-Span this evening (9:05-9:45 pacific time) it was at a local town meeting in New Hampshire.   Someone just asked Sen. Edwards what he was going to do to help "alleviate the property tax burden in New Hampshire if he was elected  (elected POTUS, mind you)"

His response?  He first droned-on about how he understands how important New Hampshire residents feel about cutting property taxes and how important that is for working families, he then stated,  "we need to promote responsibility... you wouldn't have such a high tax burden if there was more corporate responsibility... George Bush supports the wealthy interests, I want to support the American people".

--Loud cheers and applause.

I'm not ready to come to any real conclusions about this little sample of New Hampshire politics, and it should be stressed that this is mere anecdotal observation, but I'm starting to re-think the lavish use of the word "libertarian" every time someone describes a desire to cut taxes, if a corresponding desire to cut government goods and services doesn't follow.
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« Last Edit: July 07, 2003, 11:48:20 pm by exitus... »
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Leonard

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Re:Are Low Taxes a Downside in Disguise?
« Reply #7 on: July 08, 2003, 11:04:32 am »

Seems to me that there are plenty of battles to fight without needing one more.  And since taxation is such an important issue, it would be nice to have that fight already won, or at least, to be in a strong position.  But even just the fight to separate school and state could take all of our energy for years.  

In the Free State we can say: "we really won't raise your taxes - for any reason - because we don't believe in taxation".  The R candidate can only say that he doesn't think more taxes are needed right now - but he won't rule them out "if needed" - unless, of course, he becomes one of us.

Taxation is, in a sense, the only/i] issue.  Everything else depends on it.   Socialist school funding.  Law enforcement of victimless crimes.  Regulatory bureaucrats.

I don't think it is a downside.  It's an upside.
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