Nation Building and the Origin of Government, Period 5, Class 6, Thursday, 2-10

[glasses-justice.livejournal.com]

Alex wasn't late. She was on time. But it felt as though she was late, because she prided herself on being punctual.

Blame the bizarre monkey-creature who had been humping her leg at the Perk.

"So," she began, briskly, as she walked into the room. "Last week, we picked a currency. This week, we're going to talk about taxes. You can decide to not have any taxes, but then the government will be broke, and a government without any money is a government that can't fund itself and therefore can't do anything. So if you're going the no-tax route, either explain why you've chosen to dissolve the government, or how you intend to pay for anything your government intends to do."

She pulled her coat off as she talked, switching the cup she was holding from one hand to the other so she didn't spill it while she slipped her arms out. Once her coat was off, it was going to be tossed haphazardly on the seat behind her desk.

"There are a number of ways to assign taxes," she continued. "Income is a popular option. You tax a percentage of what everyone makes this year. A few difficulties: number one, people will hide income from you by being paid 'under the table.' Number two, this leads to inequity. Someone who inherits several million from their parents, and therefore doesn't need to work, also won't pay any taxes, as they have no income. Should inheritances be considered income? There are difficulties with that, as well."

Alex was now leaning against the front of her desk, and dunking a bag of tea into her cup. Other people drank coffee, when they were in a rush; other people weren't Alex.

"We can also tax purchases," she continued. "Assign, for example, six percent on top of the price of anything, and that money goes to the state. Of course, that means we're getting the same six percent from a gallon of milk as we are a deluxe yacht. Do we want to exempt necessities, like food? Clothing? Do we want to increase the tax on luxury items? If so, how do we determine what is a luxury, and what isn't? Do we also want to institute 'sin' taxes, on items we'd like to discourage the purchase of? Alcohol, or cigarettes, for example?

"We can assign taxes based on properties, as well, although that may disincline people to purchase property, and that's generally something the government likes to encourage. In that case, we can introduce exemptions directly into the code itself. For example, the United States tax code is an income tax base, but you can claim deductions if you have dependent children, or if you've given to charity, or even on the payment of a mortgage."

Alex sipped her tea -- a little too hot, and the flavor hadn't fully dispersed yet, but it still was much nicer than having no tea at all, this morning. "It's far more complicated than that," she said, "as well it should be, if we'd like for a system to be fair. And fairness will get the greatest compliance out of people. Although non-compliance will be another thorn in our side, so we'll need a department to sort out taxes and enforce their payment -- yet another department to fund, which is why we need taxes in the first place. So. Let's discuss taxes."

Comments

Sign In - NAT06

[glasses-justice.livejournal.com]

With a drink!

Re: Sign In - NAT06

[child-of-rer.livejournal.com]

Sov Thade Tage em Ereb (who doesn't have a drink icon)

Re: Sign In - NAT06

[daventryprince.livejournal.com]

Prince Alexander of Daventry

Re: Sign In - NAT06

[anarchist-queen.livejournal.com]

Leda

During the Lecture - NAT06

[glasses-justice.livejournal.com]

Take notes, consider the issue of taxes, be glad I didn't earworm you with more songs this week.

Re: During the Lecture - NAT06

[daventryprince.livejournal.com]

Alexander coughed a little, wondering if it would be a bad idea or not to mention that his nation was actually funded by a magical never-ending chest of gold coins. Sometimes there were benefits of being from a backwards medieval society based in magic.

Discussion - How We Tax - NAT06

[glasses-justice.livejournal.com]

What is it we're going to tax? Income? Purchases? Property? What should be exempt, and what shouldn't? How do we handle inheritances? How do we tax fairly, without placing an undue burden on the poor, or penalizing the rich?

Re: Discussion - How We Tax - NAT06

[child-of-rer.livejournal.com]

"Combined wealth," Sov replied. "That should make sense, shouldn't it? Because it's the combined wealth that people live from. And if everyone pays a percentage, unless they're really poor, in which case the government shouldn't take their money and make them starve."

Sov wasn't even completely sure how this worked in Karhide. It was one of those things which people complained about but which was never explained in detail.

Re: Discussion - How We Tax - NAT06

[glasses-justice.livejournal.com]

"So we set a poverty line, and don't tax below it," she said. "Do we keep an income tax? And if so, are the poor to be exempt from that, as well?"

Re: Discussion - How We Tax - NAT06

[whateverknight.livejournal.com]

Squall thought about it. It was a thorny issue, and no matter what you decided to do, there would always be loopholes.

"No tax for the poor," Squall decided. "Income tax for the middle class. And a tax on total net worth for the wealthy." That... seemed fair, didn't it? "I'll assign someone smarter than me to pick percentages."

Re: Discussion - How We Tax - NAT06

[glasses-justice.livejournal.com]

"How do we delineate between middle class and wealthy?" Alex said. "If there are loopholes for creative accounting -- someone getting themselves declared middle class so they don't have to pay taxes on their houses -- they'll do it."

Re: Discussion - How We Tax - NAT06

[glacial_queen]

"In my world, we currently work on a system of tithes," Karla offered. "Tithes are paid quarterly, after the season has ended, and are based mostly on income and net worth, I think." She wasn't entirely sure, something to talk to her Steward about. When she got one. "It can be paid in either coins, goods, or services. The inhabitants of a village or city pay their tithes to their direct Queen, who then turns around and pays her tithes to her direct Queen on up to the Territory Queen."

Re: Discussion - How We Tax - NAT06

[glasses-justice.livejournal.com]

"Tithe in the classical sense?" Alex asked. "A straight 10%? Is that of earnings, or of total wealth? Are the poor exempt?"

Re: Discussion - How We Tax - NAT06

[daventryprince.livejournal.com]

"Where I'm from," Alexander offered, "people work hard for what they have. To add extra restraints on those things by taxing them just seems unjust."

Re: Discussion - How We Tax - NAT06

[glasses-justice.livejournal.com]

"Are you talking about luxury taxes, or sales taxes altogether?" Alex asked. "The former aren't intended to punish the wealthy, but to ask them to support more of the burden than the poor."

Re: Discussion - How We Tax - NAT06

[thegirl-onfire.livejournal.com]

"I'm curious," Katniss said, listening to Alexander's views. "Do you really think that people will just work for the love of government? Not a single person would resent that opinion?"

Because she had some practical experience here, and she deeply resented the way her district worked for the Capitol, and the way she, personally, had acted as a sacrifice for that same government, just by their mandate.

Re: Discussion - How We Tax - NAT06

[thegirl-onfire.livejournal.com]

"Luxury," Katniss said simply. "People should be taxed fairly, though those who fall below an established poverty level, and who have a certain number of children or invalid people depending on them may be exempt. The rich shouldn't be penalized -- they've worked hard for their riches -- but it could be a set percentage." She made a slight face, and added, "This is something to be worked out by one of my advisers, I think. One good at math."

Re: Discussion - How We Tax - NAT06

[glasses-justice.livejournal.com]

"A few lawyers can't hurt," Alex added. "People trained to look for exclusions and loopholes, and ways to exploit them. Would you tax income, purchases, holdings, or all of the above?"

Discussion - Exceptions, Deductions, and Additional Taxes - NAT06

[glasses-justice.livejournal.com]

Do we want to increase the tax on luxury items? Items which we would like to discourage? What items should be exempt from a sales tax, should we choose to levy one? What sort of deductions should we allow -- for dependents? For houses? For charitable giving?

Re: Discussion - Exceptions, Deductions, and Additional Taxes - NAT06

[whateverknight.livejournal.com]

Squall considered. "If you already have an income tax, isn't a tax on sales really just taxing the same money twice? That doesn't seem fair."

"And deductions sound... complicated. Make the taxes as simple as possible, and then give grants to encourage whatever."

Re: Discussion - Exceptions, Deductions, and Additional Taxes - NAT06

[glasses-justice.livejournal.com]

"Deductions are generally a way of encouraging things that are too commonplace to allow for grants," Alex explained. "For example, a couple with children will need more income to support those children, so they receive deductions."

And on to sales tax in a minute.

Talk to the TA - NAT06

[glasses-justice.livejournal.com]

If she's here!

Re: Talk to the TA - NAT06

[glacial_queen]

Karla was here, and thinking how nicely this dovetailed with the discussion of budgets yesterday in home ec.

Talk to Alex - NAT06

[glasses-justice.livejournal.com]

She's here, but she's not sharing her tea.

OOC - NAT06

[glasses-justice.livejournal.com]

Sorry this is almost late-ish. My sleep schedule is wonky as hell.