This is insane. Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states? I'd love to spend less than half the year in any one state or be completely state-less.
The "this problem" that we are talking about here is the problem of the national government handling state taxes in addition to national taxes. For this problem the national government is dealing with states, not individuals, and so it is the number of states that it has to deal with that is the main factor affecting complexity and scaling.
Hence, each state collects levies, fines, rates, stamp duties, privatise public services and various other money grubbing exercises in order to raise capital for themselves so that they can waste/embezzle it according to their whims.
Then there's the problem of disproportionate tax distribution, which most states, particularly WA, seem to raise constantly.
[0] https://en.wikipedia.org/wiki/Constitutional_basis_of_taxati... [1] https://en.wikipedia.org/wiki/Section_90_of_the_Constitution...
The states gave up on the practicalities, but they still have the theoretical power to collect income tax.
Why? Because when the GST was introduced WA'S resource income was counted... During an unprecedented resources boom that has since collapsed. You know what doesn't get counted? Poker machine income, which is substantial in the three Eastern states.
Can it be changed? Technically, yes. Practically is incredibly difficult because no one wants to give up revenue and politicians are worried it'll be electoral suicide, which it may well be.
The fact that the government has proposed anything at all, however anemic, is kinda amazing.
This happens across the US political specturm, whether about their tax system, banking system, gun reform, electoral reform, and many other issues; it's a frequent refrain that the US is so different it can't learn from others.
As a US citizen who is resident elsewhere it is infuriating to watch.
Alternatively, it's a frequent refrain that the U.S. _should_ learn from others, which is e.g. why we should preserve our federal system, electoral system and rights.
I think it's a _good_ thing that the several states are separate sovereigns from the United States, and I think it's a good thing that the states are entirely reliant on the United States for their budgets (and in fact, those places where they are reliant, e.g. the highway budget, have led to anti-federal things like a uniform drinking age, something which is 100% not the business of the United States government).
If the United States looks only inwards, however, there's nobody left to learn from in terms of how to run a Union, since there is only one United States, and its powers and responsibilities are (because of federalism) quite different from those of the states.
It shifts the blame from the current politics which is something people can engage with to "reasons out of anyone's control", which just helps maintain status quo.
Most of the times it comes down to constitutional issues in which case they are technically not possible.
Case in hand; the federal government has no constitutional right to prevent the states from collecting taxes -- which would be required for there to be one official Collector of Taxes for all the states.
"Because the world is political, and any change will be bitterly fought by those who are impacted to the point of inventing whole national mythologies."
Really now, centralized collection of taxes, even in the face of different local rates, is a standard feature of the civilized world. It works in countries with gun rights, it works in socialist countries, in advanced and poor countries, it's not a cultural aspect.
A more useful response would be to give reasons why the "why can't we just" solution wouldn't work. (The GP indeed gave reasons)
What is the purpose of a forum if not discussion and getting (positive or negative) feedback on your views so you can improve them?
The problem I see is the following. The person who wrote the "why can't we just" has done next to no thinking of his own as to why the situation might be more complicated than his first thought suggests, but it goes beyond that. Someone who writes "why don't we just" is sending the signal that they're emotionally committed to the position that the solution _should_ be simple. If I take a deep breath and write a long, careful reply in response to the short, lazy "why don't we just" post, I'm not only taking on all the burden of thinking about the topic at hand, but there's every risk this will just be thrown back in my face by the poster who wants a shortcut to a simple answer. A "why don't we just" post has a poor chance of leading to a good discussion, and I think there will be overall more beneficial discussion on a forum if they are discouraged.
Some people are intellectually lazy. I think this is because it's easier to feel smarter when you think less. If there's a solution that seems obvious to Mr. A and he assumes everyone who missed it is a bozo, then Mr. A feels like a smart guy. If someone else comes along and starts telling Mr. A that actually it's not so simple, and there are reasons why the "obvious" solution isn't actually a full applicable solution, then Mr. A has to think harder, only to feel less smart as a result. A lot of people resist that. I don't know the full solution of how to inspire such people to start thinking more, but I think some push-back some of the time is part of the answer. A bit like when people come to stack overflow and ask for their homework to be done for them: it's good if they're prodded to try _something_ for themselves. Being "nice" and just doing their homework for them wouldn't be optimal.
Yes, "the world is complex" might not be ideal phrasing if you think it implies someone needs to grasp the entirety of that complexity. But I'm sure the poster who wrote that only meant to encourage Mr "why don't we just" to _start_ considering the complexity of the world.
> The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration
The power of taxation has rested with the federal government since the early 20th century.
> The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people
This makes filing taxes a nightmare on top of being horribly inefficient for local governments. The federal government could handle tax collection and refunds for everyone, and come up with a standard set of rules that apply across the US. It makes life easier and more efficient for everyone involved.
All sales tax revenue is 100% distributed back to the states - but it's done under a principle of "horizontal fiscal equalisation" (https://www.cgc.gov.au/index.php?option=com_content&view=art...) which means that richer states subsidise poorer states. Income tax is used to cover federal expenditure but also pays for a lot of federal grant money which is paid to the states.
In general, the Australian approach to federalism is a lot more federal-heavy than in the US, and some part of that is driven by how the feds have completely taken over most forms of taxation and thus control all the purse strings.
The municipalities can also levy taxes but usually only on common goods like sewage, water and on home ownership or equivalent for people who rent. The provinces do the same but it is far less than the central government does.
The EU should collect taxes for all the member states and then give it back to them in some equitable fashion. It would certainly stop all the bickering over tax havens and countries not collecting their "fair share".
That would give far too much power to a federal government that already far exceeds its constitutional mandate. I suggest the inverse: The federal government should get its funding only from the states. Each state can decide how much to contribute and how to raise the money. That would decentralize power significantly.
No, a stronger federal government was a solution that was proposed (and adopted) for it's manifest failure. It wasn't the idea that a strong federal government was good that led to the belief the Articles had failed, but exactly the reverse.
The formula used to calculate the level of revenue support changes, some would say that the changes are politically based.
My feeling is that, given the robust politics that appears to exist in the US, coupled with what again appears to be frequent recourse to litigation between levels of government, you don't want to go down that route.
I'm not sure of the specifics of how the tax money is doled out, but all my income tax and sales tax goes to the federal government, which then divvies it out to the states.
There are additional taxes in some states though, which are collected by the states, such as payroll tax, but I don't see that on my payslip.
There is a certain irony, seeing that bar outright dictatorships (China), the US state is and has been the strongest one for over half a century...
That system has been attacked from the beginning and the US is rapidly becoming a nation where government replaces the family as social structure. What is now will not always be - the trend is of far greater importance than momentary status.
Individuals are not able to do any of that when they're stuck working 3 jobs just to get by, or when they go bankrupt due to a simple medical procedure.
Multiple jobs just to get by sounds a lot like today yet plenty of people still grow, learn and create.
2. Several developed countries have "overwhelming taxation", yet quite high economic growth and are among the world's top 10 regarding human development.
3. Developing countries will have to increase their taxation. That's how development works: you get a bigger and more effective state that can offer advanced services reliably.
4. Almost all underdeveloped countries, on the contrary, have weak states that can barely collect taxes.
2. Name some countries - are they growing more than 10%?
3. Increasing taxation is how the strangulation of a population works, so in that sense you are correct. The state always fails. If it didn't, and taxation "worked", we would be living in a utopia.
4. Weak States that cannot enforce taxation are the ones where the population has freedom to grow without onerous tax burdens and corporate protectionism.
A static view of the world assumes taxation is necessary. A nonlinear view recognizes the destruction it causes.
2. Sustained growth at more than 10% is not realistic, especially for developed countries. I'm from a developing country and turning dirt farmers to office workers consistently will grow your economy by 10%. At some point you're going to run out of dirt farmers. This point is moot.
Regarding high, realistic growth (2-3%) for developed countries: Singapore, Sweden.
3. States tend to fail far more often due to external factors. In the modern era that's becoming rarer and rarer as the cost of destabilizing a foreign state generally outweighs the benefits.
4. I'd be very happy if you could show me some examples. Which "weak states" are developed states? I wouldn't call any state in a developed country a "weak state".
3. Yes, most states are not part of the core; peripheral nations fail long before the foundation does. Thankfully the cost of such failure has become much less likely to result in loss of life.
4. Not weak states that are developed states - ones that are considered developing, yet experience growth largely due to lack of excessive taxation and regulation thanks to weak government. They are thus progressing toward becoming developed. Two examples are Georgia and Puerto Rico - the amount of growth and development in those locations are proportionally far greater than other nations in similar locations and situations. This is directly affected by investment capital, much of which has left high-tax jurisdictions.
Which country are you from?
3. I'm an optimist, I don't see any signs of the foundation falling. The counterargument is that the fall is rarely seen ahead of time. Still, I think we can just file this as a difference in perspective and call it a day :)
4. Georgia, the state, I assume? Assuming it's the state, ok. But how come the vast majority of high-flyers still don't move to these states? How come those "oppressive" taxation regimes keep producing heavy hitters? Same thing is happening in Europe. Sweden, Norway, Germany, France, the UK, etc. have high productivity and high taxation. You'd expect everything to leak over to the low taxation countries. Yet these countries to lose a percentage of the high productivity members but come up with new ones. There must be something at work here (such as high taxation, coupled with half-decent administration, creating a good overall environment for productivity).
Romania. Not sure it's relevant :)
3. The larger the trend, the easier to forecast. Historically, empires fail slowly and then enter a rapid final decline. Martin Armstrong may be of interest, as he has built an extensive database and system that has analyzed the set.
4. Georgia the country, although the US state is one that is doing better than others[1] in the nation. Residence is sticky since it's expensive to relocate, so the incentive to move must be particularly high. There are certainly perceptions that persist with a lag since a practical perspective depends heavily upon direct experience, e.g. NYC is not the same place depicted in movies from the 1980s. The magnitude of resources available to be redistributed within a highly dynamic system can be significant. It is almost impossible to pinpoint the exact breaking point but the trend can be much more easily observed.
Turkey is an interesting place - domestic production includes almost everything except higher technology, yet the economy is precarious due capital fearing the government.
Romania is on my travel list :)
[1] https://www.businessinsider.com/san-francisco-bay-area-resid...
What I'd personally favor is super high income tax brackets for the very rich (income > $1 billion puts you in a 95% tax bracket for everything above 1 billion) and the state getting a percentage of a corporation automatically after it goes above a certain scale (say 5% at 1 billion, 20% at 20 billion), with the restriction on the state's share usage. This should take care indirectly of the "robot production", via the owners. Once you'd do this universal basic income would be interesting.
This should only be implemented if there's some sort of global tax agreement, otherwise the state that does this will have its tax revenue slither away to other countries.
But this needs an attitude of "fixing the state", not "starving the beast". Treat the state as an unavoidable single point of failure and harden it. Checks and balances, more transparency, more direct democracy, etc.
3 & 4. This is already getting super philosophical. I need to follow this phenomenon more, can't really say anything super relevant. Intuitively I'm not sure I agree.
> Romania is on my travel list :)
Go to Bucharest for the night life (preferably with a somewhat reliable local guide). Go to Brașov, Sighișoara, Sibiu for the medieval monuments and buildings. Go to Bucovina for the great landscapes and the beautiful monasteries. Go to Maramureș for the same reasons, but with a different twist. Go to the Apuseni for the rural life, unchanged since centuries.
Avoid the Black Sea (Constanța, Mamaia), except for the Danube Delta, which is a nature reserve.
Thanks for the recommendations!
You value work too much, if anything.
One's economy tends to do well when one has intact factories & workforce while the rest of the civilised world has been levelled and much of its workforce slain. We'll never see something like the post-war boom again unless we see something as utterly, senselessly destructive as the war itself (note that the economy would ultimately have been better in the long term had there never been a war).
Much like signing up for Netflix, except more expensive and a slightly different collection mechanism.
And if you think that's weird, look at the British "Chancel repair liability"
It was particularly bad until recently, as the obligations were often hidden. They no longer are - if there's an obligation it's right there on the land register, just like covenants, and show up in the standard searches during the conveyancing process. It's effectively a land tax to support a local amenity -- churches are part of the cultural background of British villages. I'd rather a formal land tax system to support all local amenities.
A larger concern to me are faith schools.
Of course, as mentioned, you can not have that and just pretend you're not in any of the recognized religious organisations.
Or at least the states should have a double taxation treaty (but of course that would make sense so it's not going to be implemented)