Talk:Tax/Archive 1

Archive 1

Untitled

I'm not an expert on this subject, but the tax page really needs a discussion of severance taxes. Severance taxes are taxes on natural resources, usually applied by states. U.S. history is full of political controversies surrounding the imposition (or removal) of severance taxes. Some examples: Huey Long in Louisiana (oil taxes) comes to mind. Kansas abolished their oil severance taxes years ago.

Wiki does not have a definition of severance taxes, so a place to start is here: http://www.ncsl.org/programs/fiscal/severtax05.htm

Wiki does have a defintion of ecotaxes, which are related: http://en.wikipedia.org/wiki/Ecotax —Preceding unsigned comment added by 64.129.227.4 (talk) 20:54, 21 April 2009 (UTC)

Flat tax

"A flat tax would require the least amount of record-keeping."

Comment deleted as a non-sequitur. How the tax rate is applied ta a tax base has nothing to do with record-keeping. Record-keeping has more to do with determining the tax base. Eclecticology

For the record the comment was correct. The US tax system as an example is very convoluted and the paperwork, time, and expense to hire accountants to prepare tax returns in not small. It is estimated in the $50 billion range per year I believe. A simpler tax system such as a flat tax would require less record keeping, and reduce that cost. That is not immaterial. This is from somone in the industry and I make a lot of money because the tax system is complicated and I provide advice regarding it. - Taxman 15:44, Feb 17, 2005 (UTC)

A flat tax would not require the least amount of record-keeping. A poll tax would require even less since there is no "tax base" other than the existence of a person.

Land tax (or specifically, site-revenue) also requires very little record keeping. However there is an argument that this a flat tax on economic land rather than income. Lev Lafayette

Fuel excise

It's erroneous to state that "fuel excise is often used to pay for public transportation, especially roads and bridges and for the protection of the environment" and "alcohol excise is used to discourage alcohol consumption and to pay for the costs of treating illness caused by alcohol abuse". This (the collection of a tax, guaranteeing to spend that money only on a specified, related purpose, is called hypothecation and finance ministers often hate the idea. -- 80.192.64.123

False. Taxes are used to curb negative externalities all the time, it is called a pigouvaian tax ( http://www.amosweb.com/cgi-bin/gls.pl?fcd=dsp&key=Pigouvian+tax ). Inefficiencies of negative externalities resulting from transactions, such as your example of alcoholism from the sale of alcohol, can be taxed to reduce harm.

Taxation is one of the most powerful tools available to improve the public good by curbing harmful transactions or behaviour. The few other tools are regulation and the legal system, each of which has its own problems.

I can draw up an example and have who ever did these wonderful graphics in the article remake with the same fonts and style.--ShaunMacPherson 07:53, 17 Mar 2004 (UTC)

No, the first statement is correct. Money is fungible, and it's not correct to say that a fuel tax is used to pay for public transport, roads and bridges and for environmental protection. That is hypothecation.

However, saying that alcohol excise is used to discourage alcohol consumption is completely reasonable. That is a pigouvian tax. Shaun, what you've done is made a great argument for taxing carbon or cigarettes, but it's not relevant to the original point, which was that "It's erroneous to state that "fuel excise is often used to pay for public transportation, especially roads and bridges and for the protection of the environment"" —Preceding unsigned comment added by 220.233.226.180 (talk) 17:01, 18 July 2009 (UTC)

"Involuntary fee"

Annoying quibble time: Tax is not an "involuntary fee", it's a "compulsory fee". Unless I am confused about the precise meaning of the words,an "involuntary" action is one that you have to do and have no choice about, where tax is (generally speaking) something that you have to do and may or may not do willingly. Should I change it? Tannin

Involuntary and compulsory are very similiar words, www.m-w.com has each of them in eachothers' definitions. I myself prefer compulsory since it relays a tone of enforcement. In any event my public finance books use compulsory in their definitions, everyone check their own see what they say :). --ShaunMacPherson 07:53, 17 Mar 2004 (UTC)

It's actually not a fee at all, since nothing is specifically rendered to the payer. Even if the tax is hypothecated, so that it goes to a specific purpose, it still doesn't connect with the specific payer. The technical term for this is "unrequited payment". And that's actually why it is wrong to describe a tithe as a tax - it is merely like a tax, but it is too specific to be precisely a tax. (So I'll alter that reference.) Likewise obligations in kind are not - technically - taxes, although they have very similar effects; I'll let those references stand while I think how best to handle the distinction. PML.

actually, i think that it is both, only "compulsory fee" sounds nicer. —thesayerofing

Public finance

The public finance section, which deals largly with taxation, government spending, government revenue etc., could use your help. It shouldn't be that this branch of social science, of which taxation is a subset, is 1/20th the size of its subordinate topics :).

I have a public finance book, Public Finanace in Canada 2nd edition Hyman / Strick, that we look to its table of contents to segment the article.

Hope to see you there! --ShaunMacPherson 08:02, 17 Mar 2004 (UTC)

Is a tax on land neutral?

"A popular theory is that the most economically neutral tax is a tax on land." I removed this, because:

• the idea does not make much sense to me in current economies
• I cannot find anybody proposing this theory, let alone any hint as to why it should be "popular".

You've never heard of Georgism?

It is common knowledge that land tax does not distort markets relations.

• "Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry....Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them." (Adam Smith, The Wealth of Nations, Book I, Chapter 11 and Book 5, Chapter 2).
• "The striking result is that a tax on rent will lead to no distortions or economic inefficiencies. Why not? Because a tax on pure economic rent does not change anyone's behavior. Demanders are unaffected because their price is unchanged. The behavior of suppliers is unaffected because the supply of land is fixed and cannot react. Hence, the economy operates after the tax exactly as it did before the tax -- with no distortions or inefficiencies arising as a result of the land tax." (Paul Samuelson, Economics, 16th ed., p. 250)

• Espousing Georgist views is not NPOV. "It is common knowledge" is presumptuous and unverifiable. Besides which, the supply of land is not fixed, when considered in context of its primary usage. The effective supply of land, as used for housing, can be increased by constructing appropriate improvements, such as sewer systems and apartment buildings. The effective supply of land, as used for agriculture, can be increased by constructing appropriate improvements, such as terracing, irrigation, and greenhouses. Since there are competing alternative uses for land, the supply of land dedicated to any particular purpose is not fixed, and will therefore produce deadweight losses just as with any other good. The least distorting taxes are applied to the goods whose supply is least impacted by changes in money price, but as no good has yet been identified with a perfectly vertical supply curve, there is no tax that is perfectly neutral. Since land tax is clearly not in that class, any claim that it is the most neutral would required detailed econometrics to back that claim up. -- Logfromblammo 21:51, 7 September 2007 (UTC)

Unrequited payment?

The opening paragraph is not very neutral. "unrequited" is loading the topic; Government services are how the Government returns the fee. Referring to political parties rather than politics and economists rather than economics is misdirecting the arena of debate. Also, Tendentious is a $5 word. --Alexwcovington 04:25, 2 May 2004 (UTC)

Governments themselves use the term "unrequited payment" in relation to tax. A quick search of Google bears this out. Surely it is unrequited because you cannot expect anything specific in return: You certainly cannot sue for it. And if you do not pay it the services are usually still there for you. And some people pay more for the same service. And others pay more and do NOT qualify for the service because of a means test. Unrequited payment seems right to me. Paul Beardsell 00:59, 4 May 2004 (UTC)

In the use of the word today, "unrequited" most certainly does not fit the situation. It may be the case that it is used in law, but Wikipedia is not meant to be written in legalese. If you want to say you can't expect anything specific in return, say that. --Alexwcovington 15:14, 4 May 2004 (UTC)

That is the meaning of "unrequited". The phrase "unrequited payment" as it was used here is plainly a technical term. In what way does "unrequited" load the topic? Contradicting your first comment (and as you acknowledge in the most recent one) govt services do not necessarily arise from a tax. I think your edit should be undone. Paul Beardsell 16:37, 4 May 2004 (UTC)

"Tendentious" is not the same as "contentious". Replacing one by the other does not simply avoid an uncommon (to some) word: It changes the meaning. I will restore. If dumbing down is our aim then someone can replace "tendentious" with "characterised by biased argument" or similar.

Immorality

Taxes are immoral in that they are a form of legalized theft, they allow governments to take money from those who would unwillingly give. If asked the average person would not pay taxes, witness the social security maelstorm in the uS. Tithing, taxes its all the same. If everyone refused to pay taxes then all governments would fall. And good for them. --Tomtom 18:23, 26 Jan 2005 (UTC)

Then what do you call rent?

and interest? —The preceding unsigned comme

nt was added by 213.49.135.68 (talk) 13:58, 7 May 2007 (UTC).

Uhuh. Anarchist by any chance? Exile 14:08, 17 Feb 2005 (UTC)

Could anyone write a contribution under this heading that relates morality to the issue of consent to taxation? (Presumably taxation is less offensive the greater the degree to which those who are paying the taxes have voted to have those taxes levied on themselves. For example, we can think of local farmers in a river valley voting to levy themselves to fund a local public good, such as flood control. Given hold-out/free rider problems, there is arguably a case for a rule that falls short of requiring unanimous consent in really important situations.) [Bryce 2 August 2005]

POV in "morality" section

As a libertarian I think I'm in a good position to report that the statement "governments levy taxes through a system of coercion" is POV. "Coercion" itself is a loaded word and statements of this sort are made exclusively by libertarians, anarchists, and those with similar viewpoints. This statement has no purpose either - we already said taxes are not optional, why are we driving the point home with libertarian rhetoric?

As for the other reverts, I'm confused. Removing scare quotes such as those around "necessary evil" is almost always a good thing. The word "confiscated" is POV, especially in scare quotes. The slavery/rape example is confusing and pointless. It analogizes rape to taxation. I don't understand the comment about copyediting social contract. We don't remove links to articles simply because they're not copyedited. Rhobite 07:08, Feb 18, 2005 (UTC)

Yes, I meant the copyedit was needed here. Paul Beardsell 07:16, 18 Feb 2005 (UTC)

Thinking about it a little more, I think the "coercion" thing can go back in if it's clearly attributed as a libertarian opinion. The rest of my changes should go back in. Rhobite 07:12, Feb 18, 2005 (UTC)

Rhobite, I could possibly have done what I am doing in a better way. I misunderstood the difference listing as being you removing the social contract link. But you will see I am already on the way of remaking some of your changes. Paul Beardsell 07:16, 18 Feb 2005 (UTC)

Payroll/Income/FICA

I removed FICA and put a mention in Taxation in the United States, since this article shouldn't delve into specifics of the U.S. tax system too much. About "payroll tax", that term is not restricted to flat-rate taxes or social insurance taxes. In the U.S., the term "payroll tax" refers to all taxes employers are required to withhold, e.g. income, social security, medicare, state, local. Rhobite 07:13, Mar 8, 2005 (UTC)

FICA-type taxes aren't unique to the U.S. system. I've added a general section on "Retirement tax", with reference to FICA and to the similar NIC's in the U.K. The idea of a tax that generates revenue and helps determine the worker's retirement benefit deserves to be noted. JamesMLane 07:22, 8 Mar 2005 (UTC)

I defer to y'all's judgement on this. But I gotta tell ya, I'd loathe living in a world where a government -- say, for instance, the Federal Government of the United States -- is able to concoct a tax -- say, for instance, the FICA tax -- that defies capitulation in a general article on taxation in an encyclopedia.

It's progressive; it's regressive; it's capped; it crawls on its belly like a reptile while the employer pays half. Meanwhile, they're savin' for us it while they're spendin' it, like drunk midshipmen on a night on the town in Bancock.

I'm gonna kick my cat, cry in my beer, howl at the moon, and reload 7.62 x 39 whilst chain-smokin' Luckies 'till the sun comes up. ô¿ô Mar 8, 07:49 (UTC)

There's no doubt that the U.S. Social Security tax is regressive. I just don't think it should be mentioned too much in a general article on taxation. Feel free to expand in the proper articles: Taxation in the United States (needs some work anyway) and FICA tax. Rhobite 08:15, Mar 8, 2005 (UTC)

There's no doubt that the U.S. Social Security system resembles a Ponzi scheme; which article BTW, since my edits, is likely in dire need of serious POV work. ô¿ô Mar. 08, 08:46:51 UTC

As a footnote, as noted by Rhobite above, the term "payroll tax" includes all taxes employers are required to withhold, e.g. income, social security, medicare, state, local. I'd like to add that the term "payroll tax" also includes other taxes that the employer cannot legally withhold, but must pay out of the employer's own pocket -- in the USA, for example, the "employer half" of FICA taxes (i.e., employer Social Security tax and employer Medicare tax), as well as the Federal unemployment tax and the state unemployment tax if any. Famspear 05:00, 8 March 2006 (UTC)

In the section {The custom legal definitions of words or terms such as ... "United States", "State", "person", "United States person"...} I don't think "United States" or "United States person" should be included. This pertains specificly to the American tax system. Also "Title 26, the related subchapters and sections of The Internal Revenue Code." Is this an american tax document? —Preceding unsigned comment added by 142.239.254.19 (talk • contribs) 12:12, September 17, 2009

That entire paragraph is tax protester nonsense, and has now been, and should remain, deleted. Thank you for your concern. — Arthur Rubin (talk) 13:48, 17 September 2009 (UTC)

Morality section

The morality section serves no purpose. A person can decide for himself if taxation is immoral and the school of thought that taxation is morally wrong so small that the mere fact that it exists is not significant enough to include it for its own sake.

I disagree. The mere fact that a school of though is 'small' (by whose measures? in whose eyes? in whose opinion? I refuse to discuss the matter of size) doesn't deprive it of the right of being included in the article that is about the matter this school is related to. Otherwise, we could delete the articles on anarchocapitalism and some extreme leftist groups as well. The purpose of *any* encyclopedia should be to open the reader's mind to the facts, to let him or hear read about something new and surprising, and not to close in the circle of "most popular" views, beliefs, movements ideas, facts, etc. Also, to willingly avoid talking about some "unpopular" views is a well-known tactic of some politicized media and some commercial, printed encyclopedias as well. And it's a great advantage of wikipedia that almost all political movevements, including the minority movements as libertarians or Christian fundamentalists are being covered. Critto

It would be better to have a section on "Objections to taxation" There are many people who object to taxation without considering it immoral. And there are people who have some objections to taxations but do not oppose taxes because their objections are mitigated by the benefits. Also some people object to certain forms of taxation but not others.

Such a section would be OK; there, all forms of objection to taxation (including those based on morality and on other grounds, as economic efficiency), that means opposition to all or some forms of taxation could be gathered. However, no valid information about any movements, large or small, should be deleted. Critto

I'll agree and disagree. The general objections to taxation seems like a good plan and should really be done to NPOV this page. I would disagree however that the morality section serves no purpose. There is a substantial minority that do hold that view, and also those that don't care about the morality view, but simply are opposed to all taxes. So that proposed section would cover the whole concept much better I'd think, so the morality issue could be covered under that umbrella. So go ahead and take a stab at it, just don't remove any valid info. - Taxman 17:02, Apr 7, 2005 (UTC)

Adding another type of tax: Impost Tax

Whereas the excise tax is a per quantum assessed on purchase (consumption), the impost tax is a per quantum assessed on some measure or surrogate of production.

Impost taxes are fairly invisible in the United States, though not nonexistant. I'm personally aware of "license fees" for barber shops based on the number of barber chairs, and similar taxes on jukeboxes, coin operated video games, etc.

A friend from (South) Vietnam who was a tax collector described the impost tax they had for restaurants -- instead of an income tax, there was an impost assessed on each table and another on each chair in the restaurant.

The dynamics of this tax are interesting ... if you are a very successful restauranteur, you will pay the same tax as anyone else with the number of tables and chairs you have, but you will pay tax at a lower percentage of your profit. The moderately successful owner pays a higher percentage in tax. The incompetent business person is discouraged from continuing to be in business, since the tax stays the same; there is no subsidy for "losses".

(His stories were hilarious ... chairs and tables flying out of windows when the prep chef announced that the taxman was on his way ... )

I'd like to add a section on impost taxes and welcome any advice or comments; I am thinking I would add the new section immediately following Excises.

Mark 05:37, 22 October 2005 (UTC)

---

I had not heard the term "impost tax," but there is at least one interesting example of an impost tax in the United States. Early in the country's history, Congress imposed a tax on homes based on the number of doors in the house. In response, Thomas Jefferson designed a ceiling-to-floor window that, when opened, one could walk through. The device, called a "Jefferson window," was an attempt to avoid the door tax by transforming what, by definition, was a window into what, in practice, was a door.

Wikiant 13:08, 22 October 2005 (UTC)

---

In the USA, at the consitutional convention, the term "impost" was used exclusively to refer to customs duties/tariffs (to be the eclusive domain of the federal government, and states to have no right to impose taxes on imports.) I'd want to make sure there was appropriate clarification on the use of the term.

That story about Jefferson is brilliant! Always fun to lighten the mood in an article on taxes, heh!

Just yesterday ran across an impost in New Foundland .. a per hectare levy on mineral rights. And, it makes sense: if you exploit the mineral rights and produce income, the impost tax is a deduction (credit/offset) against the income tax. If you don't exploit the minerals, you must pay the tax anyway .. or, you lose the mineral rights! ... Which can be then granted to someone who, ostensibly, will use them productively.

Mark 22:45, 22 October 2005 (UTC)

Morality

Not a very great subsection, with a lot of weasel words and awkward phrasing, not to mention one-sentence arguments that certain are to be covered in far more detail under sections dealing with libertarianism. And plenty of bias. I've made some moderate modifications. I don't think it's appropriate to differentiate between the various schools of libertarianism, for example. It's like referencing every type of Green in a entry on economic development.

I've replaced the 'many say' and 'many maintain' with marginally less weasely phrasing - although I recognise that these are still not very informative. I've also added some links. --Nydas 21:27, 6 March 2006 (UTC)

Military and Income Taxes

I believe at one time in the United Starts members of the military did not pay federal income taxes. I think this changed after World War II. Does anyone of any evidence of this?

The chart comparing the differing tax rates in various countries says that, for a single person, no children, the tax rate in the UK is 33.5% while in the US it is 29.1%

This is a mistake. In the UK income tax for a single person with no children is not paid on the first £5225. [1]

So, for someone earning £20,000 they will only pay tax on £14775. 33% of 14775 is 4875.75

4875.75 / 20,000 = 24%

Therefore the actual rate of income tax for a single person without children in the UK is 24%

In the US and other countries, by contrast, tax is paid on every dollar.--Surfingus 21:38, 11 November 2007 (UTC)

Dog breed

Hey, isn't the tax a dog breed? --Shandris 12:35, 15 June 2006 (UTC)

not understood this post Sanjiv swarup 15:56, 29 March 2007 (UTC)

Tax=dachshound in some languages, e.g. Swedish.Sjö 13:47, 8 August 2007 (UTC)

The clear meaning of tax is explained in the article page which is in english, you can refer the article for more information Kalivd (talk) 14:15, 15 July 2008 (UTC)

Remove ACCA link

Removed the link because it was to a web-site not about taxes. The web-site is the home of a professional association. I saw no information at the site on taxes. It is improper to use Wikipedia to promote an organization. Please let me know if I'm wrong on this in which case I'll be happy to restore that link. SteveWolfer 17:02, 26 July 2006 (UTC)

clarification of the term "social insurance taxes"

I edited the "Who Pays" section to clarify that the phrase "social insurance taxes" was a euphenism used in the CBO report. Namely, it now reads (my addition is in bold):

Their numbers also show, that when broken down by quintile, the social insurance taxes (the label used by the CBO for taxes paid to the US's Social Security program) are regressive on an effective tax rate basis only for the highest quintile, though that quintile pays the largest share of social insurance taxes (44%). However, when returns to social insurance (in the form of retirement benefits) are accounted for, social insurance taxes are effectively progressive. (Table 1)

In the "table 1", I found this blurb:

The increase in the effective social insurance tax rate stems from two factors. In 2002 a larger share of wages fell below the Social Security taxable maximum, increasing payroll taxes relative to wage income. At the same time, wages made up a larger share of income in 2002 than in 2001, further pushing up the effective social insurance tax rate, which is measured as a percentage of total income.

It's possible that I'm missing some extraneous taxes associated with this category (eg, unemployment insurance which IIRC is paid by the employer). The US Social Security program does have parts that are clearly insurance, eg, disability benefits. But the retirement entitlements are open to dispute yet clearly part of this category IMHO. I feel that the above clarification perhaps with some correction will sidestep this potential POV problem. -- 69.105.203.180 06:41, 9 August 2006 (UTC)

Tax Burden

This section seems to be a little bit original research at the moment. I think arguably 100% of the tax "burden" regarding sales taxes is always going to be on the consumer. The issue really is in how taxes impact the fair market value of a product. Just because a high tax means the retailer has to charge a lower price doesn't mean the burden has shifted to the retailer, it just means that higher taxes have depressed the value of the product. Peyna 14:23, 19 August 2006 (UTC)

There is no original research. Pick up any principles-level microeconomics text and you will see this discussion of the burden of taxation. No, 100% of the burden is virtually never on the consumer -- 100% burden on the consumer requires the (theoretical) case in which the price elasticity of demand is infinite. Please consult standard Economics 101 material before commenting. Wikiant 14:33, 19 August 2006 (UTC)

Subsidies transfer 100% of the tax to the consumer Check USDA Farm Service Bureau: The 2002 program known as MILC, for Milk Income Loss Compensation, guarantees farmers a price of $16.94 per 100 pounds of milk - about 12 gallons. "The program paid Maine farmers $9.9 million last year and $1.2 million this year." (2002 report). This does not include all the wheat (40+M) and other subsidies; Further "Standard Economics 101" does not recognize corporate strategies, that, though can be hindered by downtrend economic effects, is not entirely driven by it. A company would be foolish not to factor in tax to the final product for optimal profit. This burden is directly transferred to the consumer. The retailer that purchases the product for resale is at the greatest risk of market swings, but also factors what is needed to pay his tax and make a profit. The final purchaser who can no longer differ the tax ultimately pays the burden of taxation. Any attempt to relate those who pay the most tax as those that pay the burden is propaganda for big industry. This is a fact; The greatest burden of taxation comes from regulation of taxation itself, The Heritage Foundation (Executive Memorandum #459 September 10, 1996) has estimated it took 677 billion in and of regulation - almost one half of direct taxation, to collect the other est. 700 billion in taxes. Add compliance costs and trying offender and incarcerating offenders for a average of 48 months each including their dental and doctor while incarcerated and you have a greater burden that the tax payer is saddled with. If you look at the information from the IRS, Federal statistics and Heritage Foundation reports, you will find that this is no trivial burden. How (in which to minimize this burden without infringing on freedoms), and the reason of why we pay the tax is more important than who pays the tax; This because the burden of regulation exceeds the purpose of the tax. I think that these need to be presented in this article. I think your edit of my earlier article of "who pays the burden of tax" was fair, I just think that it needs more information with these issues in mind and woulkd like to dicuss this futher to stay in Wiki's guidlines and possiblly written in cooperation with several users. User Richard Taylor APP.

Your terminology is not entirely correct. A subsidy is the opposite of a tax -- instead of taking money from the transaction, the government pays money into the transaction. Hence, your statement that "Subsidies transfer 100% of the tax to the consumer" doesn't communicate anything. There is no sense in debating an issue that is non-controversial. See any of the following links. Wikiant 12:10, 20 August 2006 (UTC)

http://www.sussex.ac.uk/Units/economics/introec/ieoh_6.ppt

http://www.rri.wvu.edu/WebBook/Garrett/chapterthree.htm

http://rdc1.net/class/PublicFinance/ec330ho3.pdf#search=%22%22burden%20of%20taxation%22%20elasticity%22

http://spot.colorado.edu/~kaplan/econ2010/section4/section4-main.html

http://www.heritage.org/Research/Taxes/cda04-12.cfm

Your links proves my point, they do not disregard it in several areas, here is one from the heritage.org link you have provided:"Statutory or Legal Obligation of an Excise Tax: Who pays a selective excise tax? The legal obli­gation to pay would depend on the wording of the statute. It might be called either a consumer-level tax (e.g., the gasoline excise tax, collected at the pump) or a producer-level tax (e.g., the alcohol and tobacco taxes, collected from manufacturers).As the diagram shows, the distinction is eco­nomically meaningless and does not reflect the economic division of the tax burden. Consumers and producers are both affected to some degree, regardless of the statutory label. How they share the incidence of the tax depends entirely on their responsiveness to the price changes, the slopes of the supply and demand curves, not on whether the wording of the statute charges the consumer with the tax and it is merely collected by the seller and forwarded to the government, or whether the statute names the seller as being charged with the tax directly." Further they discuss Tax base destortion as a real factor: "The Perfect Non-Distorting Tax Base? Politicians eagerly seek these last two situations of perfectly inelastic sup­ply and demand in their quest for the perfect tax base. No matter how high they might push the tax on such a prod­uct, the tax base would not collapse and revenues would keep climbing. In particular, poli­ticians like to believe that the demand curves for cigarettes, liquor, and gambling are perfectly inelastic. They are wrong, but they keep pushing tobacco and alcohol tax rates higher, hoping for a miracle. They also get stingy with the payout ratios on state-sponsored lotteries. In this case, it is those who buy lottery tickets who are hoping for a mira­cle. In theory, governments could reduce eco­nomic distortions and minimize dead weight losses by putting the highest tax rates on the prod­ucts or inputs that are in most inelastic demand or supply. The ultimate example of a non-distorting tax would be a head tax or poll tax that is owed just for being alive and is totally unrelated to any incre­mental earnings or the amount of one’s economic activity. Such a tax, however, might not pass the “equity” test unless it could be shown that all parties would share in the resulting improvement in national output and income." (i.e. or toll tax - its not who pays the tax but how with the minimal amount of burden of bureacracy and why and for what it is collected it is collected). Much of the information you have linked to is based on the hypothitical and is established as such by them. "...The need to consider these economy-wide and long-term ramifications, called “general equilib­rium” "analysis", is not a new idea in tax theory"... "VI. Analysis of Some Specific Types of Taxes: The Corporate Income Tax: Initial Incidence of the Corporate Income Tax. No competent student of taxation believes that corporations pay the corporate income tax. Only people pay taxes. Things and abstractions do not pay taxes. A corporation is, in law, a legal per­son, but that is, in fact, a legal fiction. Therefore, corporations do not really pay the corporate income tax. Conservative Nobel Prize–winning economist Milton Friedman is well known for espousing that view, but liberal economists share it as well. The liberal Nobel economist Wassily Leon­tief told The New York Times 20 years ago: Corporate income taxes fall ultimately on people. Economists have tried but have never succeeded in finding out how the weight of these taxes is ultimately distributed among income groups. There can be little doubt that elimination of corporate income taxes would simplify our tax system and limit its abuse.[35] (end of Heritage report)". What you have here is a attempt to assume that all burden of taxes are miraculously paid by the wealthiest, who of course shoveled ditches for 500,000 man hours within the year to hand the great tax to the government. There is no use debating an issue for which one side refuses to see the facts. If the Heritage foundation feels that the issue is debatable,it can be debated here at the very least in the form of a alternative view. User Richard Taylor APP.

It appears that we're talking at cross purposes. You said, "As the diagram shows, the distinction is eco­nomically meaningless and does not reflect the economic division of the tax burden." That's precisely my point: The law can state from whom the tax is collected, but it cannot say who pays the tax. Who pays the tax (the tax burden) is determined by market forces. Wikiant 00:45, 21 August 2006 (UTC)

Correct. And like my earlier article that you edited, I stated "Paying, or handing tax money to the government, does 'not always' (not, not ever) establish who pays the "Burden" of taxation." We are on the same line here. Now after reviewing the Heritage foundation information above with regard to " Politicians eagerly seek these last two situations of perfectly inelastic sup­ply" and... "The ultimate example of a non-distorting tax would be a head tax or poll tax that is owed just for being alive and is totally unrelated to any incre­mental earnings or the amount of one’s economic activity."; Then read the post above edit described as "propaganda". Which is not propaganda, but real thought on the matter of tax burden, it does sound "nutsy at first" but it in fact has much thought behind it especially with regard to tax burden and where it comes from. The heritage foundation describes a poll tax as ideal, but a poll tax takes regulation also, and regulation is the problem. Now if you and the previous editor can humor the idea, read not only the information regarding a statewide automated toll tax, but also the FAQ page on it. I think you will find that a greater discussion on the tax burden needs to be presented regarding all aspects, causes and factors in this article. User Richard Taylor APP.

There needs to be a graph to compare with the graph presented that takes into consideration foreign goods and trade.

The graph presented incorrectly assumes a closed financial society without outside factors.

If even during a depression, when the cost of manufacture over seas can be lowered also. When an increased tax is levied against a manufacturer, the manufacturer can continue transfer the tax burden in full on the price of the goods to the individual that cannot write the tax off further. Such as it often does in an inflation - "Inflationary Tax"

This again presents that those who pay the tax (hand it via tax forms) to the government do not, in many instances) pay the burden of the tax. The Tax Burden laying heavily on those consumers unable to defer the tax attached to the merchandise further. User Richard Taylor APP

Is there a reason why this section is titled "Tax Burden" rather than "Tax Incidence," like the main article it references? "Tax Incidence" appears to be the preferred term of economists, whereas "Tax Burden" suggests POV. Does Wikipedia wish to assert as fact that a tax is a burden to some entity in addition to the fact that the tax is paid by some entity, or is the latter sufficient? --SoLeft (talk) 00:50, 8 September 2009 (UTC)

Inflationary Tax

Inflationary tax needs expanding. User Richard Taylor APP —Preceding unsigned comment added by 66.82.9.64 (talk) 16:20, 2 December 2007 (UTC)

External links

I belive there are too many links to american tax information, there should only be the IRS website I belive. The rest can go to a U.S.A tax page. Enlil Ninlil 07:20, 22 October 2006 (UTC)

Govt and property rights

I removed the following sentence from the section on the purpose of excise taxes: "The copyright holders' intellectual properties are also a government-issued privilege, not a natural right, and their economic and moral validity is thus open to question." There are two problems with the sentence. 1) Labeling intellectual properties as a government-issued privilege is POV and would certainly be disputed by many. 2) A statement on the nature of rights and their economic and moral validity belongs in an article on political philosophy - not taxation. SteveWolfer 16:45, 22 October 2006 (UTC)

Why do we need Tax?

Why can't the govt have the right to just create money out of nowhere?

The short answer is that governments have done this. Done on a large scale it collapses the economy after runaway inflation. On a smaller scale, it distorts economic planning, causes inflation, diminishes the value of the monetary unit, and finally results in recessions. It also hides the effects of the 'taxation' making it seem like tax payers are getting a free ride when in fact the economy (all of us) will bear the burdens of higher inflation, periodic recessions, a less predictable economic future, and higher costs of everything.

Here is the longer answer. Money, like all other things, has a price (what the market thinks a dollar is worth). And like all other things, that price is a product of supply and demand. When the government prints money the money supply increases faster than an increase in the goods and services it can buy - this makes the value of the dollar (its price) decrease. When it is seen that the government is printing money in great quantities, the market place uses other things to 'store value' - they invest in something that they expect to hold value (gold, real estate, etc.) and interest rates go up rapidly (people are expecting the money to be worth less when a loan is repaid). Interest rates (the cost of money) become part of the price of all goods and services - it becomes more expensive to live and to do business. The economy becomes shaky because there is uncertainty as to future prices which disrupts planning. More mistakes are made by businesses and the amount of liquidating and laying off that is needed often result in recessions. As government prints more and more money, people become less willing to accept it and use other monetary devices (e.g., foriegn currency) and this causes the value of the dollar to drop further. It turns into a vicious downward spiral that can result in runaway inflation (Austria before the war, Argentina not that long ago). A piece of paper has so little intrinsic worth that it counts on it's scarcity, authenticity, and a tradition of trustworthiness to hold a steady value, i.e., be a good 'money'. Fiat printing of money is a form of theft - as is forgery. It transfers value to the printer that is greater than those who will get stuck with the diminished value down the line. Steve 16:17, 25 November 2006 (UTC)

so if you would know how much money a govt creates, can you then calculate and plan the devaluation preventing recession? Inflation is not bad because you cant avoid to pax that 'tax' so everybody is treated equal. —The preceding unsigned comment was added by 213.49.135.68 (talk) 14:02, 7 May 2007 (UTC).

I just realised this doesnt apply to propreties —The preceding unsigned comment was added by 213.49.135.68 (talk) 14:03, 7 May 2007 (UTC).

21:28 UTC "If we didn't have to pay tax to governments, some one else would have to rob you... at gun point" Anon. 28th november 2008.

Image showing how compensation is distributed in an economy

File:Y C I G.jpg

Image showing how compensation is distributed in an economy

Kmarinas86 18:18, 12 December 2006 (UTC)

doingbusiness.org

This link: Paying Taxes: The Global Picture The World Bank Group study

Was added by an IP address registered to the World Bank Group (doingbusiness.org is a World Bank project). In keeping with our conflict of interest and external links guidelines I've moved it here for consideration by regular editors of this article who are unaffiliated with the site. -- Siobhan Hansa 20:34, 23 January 2007 (UTC)

Rebate Flat Tax

Image:EZtax.png Source: http://www.geocities.com/kmar86/EZtax.xls —The preceding unsigned comment was added by Kmarinas86 (talk • contribs) 05:12, 6 February 2007 (UTC).

This appears to be a U.S. plan, so such should be addressed to Taxation in the United States or flat tax. However, I'm not sure it is noteworthy enough to be included - I'm not finding anything in Google. Morphh ^(talk) 14:21, 6 February 2007 (UTC)

What is a property tax?

I made some changes to the section on property tax. I believe the relevant information is found elsewhere in Wikipedia, but the essential distinction between a property tax and all other taxes is that a property tax is imposed on property by reason of its ownership. Property tax is a "state of being" tax (such as, in the State of Texas, the "state of title" on January 1st of each year).

By contrast, almost all other taxes are, conceptually, event taxes. A sales tax taxes a event known as a "sale." An income tax relates only to the income event -- if no income is deemed to have been realized (an event), then no tax is imposed. In the United States, gift taxes and estate taxes are imposed on an event -- known as a "transfer." Some of these concepts also overlap.

Stay tuned. Yours, Famspear 15:38, 6 February 2007 (UTC)

It's analogous to a Wealth tax of the more restrictive definition (x% of networth per year for ex). I'll check if we link there. - Taxman ^Talk 15:43, 6 February 2007 (UTC)

Interesting comments on events tax vs state of being. The above discussion on Impost taxes are also probably based upon a state of being. Reading that discussion from last Oct and the example given of using a restaurant's tables and chairs to levy tax, instead of income, you can see immediately the likelihood of more compliance. Have Gun, Will Travel 17:24, 7 February 2007 (UTC)

In the UK, property taxes such as business rates and their predecesors are based on occupation, rather than ownership. I don't know enough about US tax to know if I'm making a hollow distinction here?

The event taxes are then covered in the later sections (Transfer tax, IHT), which makes me think the structure here needs rejigging. At the moment the property tax section is talking about both broad property taxes, and the more specific land/building taxes. The other property related taxes then get their own sections. I feel that either property tax should be a broad intro to further sections, including section(s) on land/property taxes, or it should be kept tighter, leaving the other taxes to their own sections. Any opinions? Winklethorpe 22:33, 17 February 2007 (UTC)

It is inaccurate to say that property tax is imposed on the basis of ownership when in fact a perpetual property tax clearly prohibits ownership. Ownership clearly infers that you do not have to pay any one to keep what you have. Further more in that property tax must be paid even if you have no income and carries with it the threat of being thrown out of your house one must conclude that this type of taxation is the state charging rent and that they are the owner.

You can own your pants and your shirt but that a perpetual property tax prohibits the ownership of property should be apparent. From the prospective of ownership it is intensely clear that the relationship you have with your shirt and pants is not logically equivalent to the one you have with your home. It is impossible for both to be ownership. If you doubt the state is the owner of your property how come they have the power to have you removed from your home for failure to make payment to them? Obviously a servant has no authority to evict the owner from his house, so obviously the state is the owner.

That government knows this to be true can also be confirmed and I will sight my evidence: February 2007 Representative Marco Rubio of Florida introduced a proposal to eliminate homestead property tax and replace it with sales tax. Senator Mike Haridopolos commented on this proposal and I quote: “It’s an intriguing idea. You would truly own your own home. You wouldn’t jeopardize losing your home because of taxes.” It would seem reasonable to ask the Senator, since when did the constitution say we don’t have the right to truly own our homes.

Like I said before ownership is a simple concept. It means you don’t have to pay anyone to keep it. You may own your shirt and your pants but as Senator Haridopolos implied and is apparently aware, property tax means you can never truly own your home. —Preceding unsigned comment added by 71.29.24.62 (talk • contribs)

Dear IP71.29.24.62: With all due respect, your theories about ownership, while somewhat interesting, are not legally sound. The imposition of a property tax, "perpetual" or otherwise, does not "prohibit" ownership. And "ownership" does not "infer" that "you do not have to pay any one to keep what you have." "Ownership" and "property" and "property tax" are legal concepts. I understand what Haridopolos is saying, but his "definition" of "true ownership" is not correct from a legal standpoint, and I doubt that he intended it as a legal definition anyway.

I personally hate the idea of real estate property taxes; they're a throwback to the past, when real estate property values did not change dramatically in relatively short periods of time. Nevertheless, a property tax -- such as a tax on real estate -- is indeed a tax on property by reason of its ownership. And your "pants and shirt" argument does not work; the government could just as well impose a property tax on your pants and shirt by reason of ownership, just as a tax is imposed on real estate by reason of ownership. The point that a property tax is not imposed on your pants and shirt (and on many other specific items of property) is a separate issue, and does not change the nature of the tax. But I'm not sure that this is the proper place to get into a long discussion of these legal concepts and their meanings. Famspear (talk) 13:01, 16 August 2008 (UTC)

Dear Winklethorpe: Regarding the comment you made -- to the effect that in the United Kingdom, certain property taxes are based on "occupation," rather than ownership" -- I don't know enough about the UK tax. Since, under English common law, possession (i.e., occupation) itself confers a certain level of property right -- a certain level of legal ownership -- I guess it's possible that there is no real distinction with respect to the UK property tax to which you refer. But I just don't know enough about that tax to say. Famspear (talk) 13:23, 16 August 2008 (UTC)

Dear Winklethorpe Who cares if what I say is not legally sound, when what I say is obviously true. There is no one I have every met who doesn’t understand that ownership means you don’t have to pay anyone to keep what you have. If this is contrary to what is legally sound then what is legally sound is obviously wrong.

You have not refuted my argument in any way and I would like you to use logic to show me why the ownership of ones property can not be in the same fashion as the way one owns their pants or shirt.

What law of physics prohibits this? Do you expect people to believe that it is impossible to have a society where we can own our homes? It was once considered legally sound for people to own slaves and if your argument were to be accepted we would still have slaves today. You can’t disprove something simply by declaring it is not legally sound. Who made you God?

I might add that when I brought this argument to the Marion County commission meeting, not only did every body in the assembly agree with me but so did all of the commissioners. They reluctantly added that they had no choice but to collect property tax. I might add that when I confronted the Senator about his comments he did not disagree with my interpretation of what he had said. Obviously if you were to put a property tax on your pants and shirt you would no longer own them. It seems like you are incapable of understanding this. —Preceding unsigned comment added by 71.29.24.62 (talk) 15:13, 16 August 2008 (UTC)

Dear IP 71.29.24.62: Thank you for sharing that with us. I would respectfully disagree with your assertion that what you are saying is "true." Considering the tenor of the comments, I do think that your use of the word "obliviously" is appropriate. Famspear (talk) 15:44, 16 August 2008 (UTC)

Wow, resorting to a grammatical error to make your point is very impressive. No doubt you have impeccable English. To bad you’re not as capable with logic. Your welcome to continue believing what you what and we will see who prevails in the end. It’s been fun —Preceding unsigned comment added by 71.29.24.62 (talk • contribs) on 16 August 2008.

The above comments posted which argue against the concept of property tax being a tax on ownership were written by Tomas Real  —Preceding unsigned comment added by 67.141.151.173 (talk) 12:16, 17 August 2008 (UTC) 

A while back I read some posts by Tomas Real in the Property Tax discussion section of Wikipedia. Now, after reading this post I must express my belief. He’s absolutely right when he says it’s absurd to call an owner someone who must make payments to another to keep what they own. If the principle of being forced to make payments to keep what you have doesn’t violate the principle of ownership, as Famspear states, then you could still be an owner if you had to pay 100 dollars an hour just to keep your pants. It doesn’t take a genius to realize that when you make an owner into the servant of the state you have destroyed the concept of ownership.

Also, if we define ownership within the realm of being forced to make monetary payments to the State then ownership only exists for those that have continual monetary income. Being poor would mean you’re incapable of ownership. The truth is, ownership is when the only obligation for what you have is to God and God doesn’t require you to make money to be the owner of something. When you claim to tax ownership you replace God with the State.

If taxing something can’t change what it is, why don’t we just tax the people’s freedom? Accordingly, if you had to pay a 100 dollar tax every day before you could leave your house, you would still be free. Of course the state would have a dilemma when someone couldn’t pay both their property tax and their freedom tax and had to confiscate the house of someone not allowed to leave. The truth is, the right to own property and freedom are inseparable. When you prohibit the ownership of property with property tax you’re denying the people their right to acquire liberty, and forcing them into endless monetary debt. —Preceding unsigned comment added by 75.89.29.71 (talk) 16:10, 26 March 2009 (UTC)

I would like to quote someone with more authority than Famspear. “Nothing is ours, which another may deprive us of.”- Thomas Jefferson. I believe Tomas Jefferson should be considered the authority when defining what ownership is. It is clear from what he said that ownership only exists when you don’t have to pay another to keep what you have. One must conclude that property tax prohibits the private ownership of property. I submit that no one on the planet can present a rational argument to the contrary. To quote Tomas Real, “Wikipedia should define property tax for what it is, the tax that prohibits the private ownership of property.” —Preceding unsigned comment added by 75.89.29.71 (talk) 16:14, 26 March 2009 (UTC)

Dear IP75.89.29.71: That's incorrect. I, Famspear, am not cited in the article as an authority for the definition, so the critique is misdirected.

Regarding this statement:

[ . . . .] it’s absurd to call an owner someone who must make payments to another to keep what they own. If the principle of being forced to make payments to keep what you have doesn’t violate the principle of ownership, as Famspear states, then you could still be an owner if you had to pay 100 dollars an hour just to keep your pants. It doesn’t take a genius to realize that when you make an owner into the servant of the state you have destroyed the concept of ownership.

Again, I understand that you have your strong feelings about "absurdity." Your argument is that "property tax prohibits the private ownership of property."

But property taxes are a reality of life in many countries, and yet the laws of those countries do indeed impose the tax on property by reason of that very ownership. Stating it another way: Those laws recognize both (A) the legality of property taxes, AND (B) the legality of the ownership of the property on which those taxes are imposed. So, whether you as a Wikipedia editor personally feel this setup is "absurd" under your legal philosophy is not determinative for purposes of editing a Wikipedia article. You and I don't make the laws, and you and I are not previously published third party sources. We are just Wikipedia editors.

Now, if you are proposing to use that quote by Thomas Jefferson to present an argument in the article itself that "property tax prohibits the private ownership of property" or something along that line, then that would be prohibited Original Research for purposes of Wikipedia. It would also violate the Wikipedia Verifiability rule, as Thomas Jefferson himself, of all people, was not trying to make the argument that a property tax itself destroys or "prohibits" the concept of property ownership. You would be taking Jefferson's words and trying to interpret those words to mean what you want them to mean. We as Wikipedia editors are not allowed to do that. That's prohibited Original Research.

This kind of argument by IP75.89.29.71 is an example of why Wikipedia has the rules about Verifiability and No Original Research. Famspear (talk) 20:39, 26 March 2009 (UTC)

OK, I have provided an actual formal definition in the article. Property tax can be defined as "generally, tax imposed by municipalities upon owners of property within their jurisdiction based on the value of such property." Steven H. Gifis, Law Dictionary (Barron's), p. 471 (2d ed. 1984). The key word here is "owners." If you own the property and I do not, the property tax is imposed on YOU as the OWNER of the property, not on me.

Again, whether you or I as Wikipedia editors happen to agree or disagree with the definition, based on our own personal philosophy, this is a previously published, third party source (a law dictionary actually used by American law students). Whether you or I as Wikipedia editors like property taxes or not, Wikipedia is not the place to debate the goodness or badness of property taxes.

I'll try to remember to check Black's Law Dictionary (it's at home, and I'm at work) for other legal definitions of "property tax."

Wikipedia is not the proper place to argue about the supposed "absurdity" of imposing property taxes. Famspear (talk) 21:03, 26 March 2009 (UTC)

Famspear, thank you for your prompt response, I see that arguing from the prospective of what is obvious to virtually everyone will give me no credibility so long as the law dictionary is considered the authority by Wikipedia. I maintain that what the law dictionary says about property tax is equivalent to insisting the earth is flat and its claim that property tax is the imposition of tax on property by reason of ownership is irrational. I apologize if I have offended you or misstated your role with Wikipedia. I have come to understand that I am incapable of changing your reality and it is pointless to continue this discussion. —Preceding unsigned comment added by 75.89.29.71 (talk) 23:14, 26 March 2009 (UTC)

Intro

From the intro:

• When taxes are not fully paid, civil penalties such as fines or forfeiture are carried out...

perhaps should read,

• may be carried out...

Also,

• In most modern industrialized countries, when an individual fails to pay his government the taxes, it will ultimately result in fines, in some cases imprisonment and death or grievious bodily harm if he resists arrest.

Wow. Capital punishment in the People's Republic of China says this is true, and the case of Gordon Kahl in the US wasn't determined by a Tax Court, so these really are notable exceptions in "modern industrialized countries". Language in the intro seems a little harsh and may need some clarification. Have Gun, Will Travel 18:42, 7 February 2007 (UTC)

Bullets

Any thoughts on removing the bullets in the section "Purposes and effects of taxation" and turning these into paragraphs. The MOS states not use bullets if the passage reads easily using plain paragraphs. I think this could be written well as paragraphs. Morphh ^(talk) 02:07, 14 February 2007 (UTC)

jail tax

Is there such thing as a jail tax, in which when you are proven guilty of a crime the government withdraws a sertain percentage of your money based on the crime commited? The money would then go to funding the jail. (and I don't mean a fine)—The preceding unsigned comment was added by 69.255.15.249 (talk) 00:24, 17 February 2007 (UTC).

Inheritance Tax

The inheritance tax section contained only a peice of criticism: Some believe that inheritance taxes do not have any harmful effect on the economy and may even be beneficial as they encourage consumer spending by the elderly. However, some also believe them to discourage productivity and to disrupt the continuity of family-owned businesses. I've taken it out and replaced it with the introduction from the main inheritance tax article for now. As the inheritance tax article is basicly a set of links to other articles, there's no section for the deleted piece to go in. Winklethorpe 20:42, 18 February 2007 (UTC)

Looks good - I don't think we need a criticism section in this article on the inheritance tax. The main point in this article is to describe what it is and then they can go to the main article to learn about the pros/cons. Morphh ^(talk) 22:00, 18 February 2007 (UTC)

internal Linking Error

in the introduction paragraphs the link to fines needs to be redirected to the fine page. it is currently leading to a article about a place in spain

nevermind figured out how to change it myself, it's fixed now --KalusK9 04:28, 19 February 2007 (UTC)

Toll

The Toll section is titled Toll tax, and starts with that usage. I've always thought that while a toll was a tax, "Toll Tax" is a redundant term. A quick look in the dictionary seems to bear out that toll is used on its own (and indeeds originates from a word for tax). However, it may be that it's the more common usage in the USA - could someone confirm what you use on your side of the water? On a related note, the two links are to related ideas, but would it be better to link to a single "Toll" article, and reference to toll road and toll bridges from there? Winklethorpe 21:42, 19 February 2007 (UTC)

I've only really heard it as "Toll" as well and agree that this sounds redundent. I'll make the change. Toll goes to a disambig page with Toll road, Toll bridge, and Toll tunnel being the articles that relate. Morphh ^(talk) 22:19, 19 February 2007 (UTC)

COTM

Great job on the Collaboration! Thanks to all who helped out. The COTM for March is Value added tax. Morphh ^(talk) 15:33, 1 March 2007 (UTC)

• February 2007 - Tax (171 edits - before / after / compare)

Comment on Good article candidacy

The article needs more references. The sources for the text must be given at the bottom in a reference section. You can either use a general reference section, or inline citations, or a mix of both.--DorisHノート 18:56, 24 March 2007 (UTC)

Agreed, this is the main reason why I've failed the article - will give detailed feedback shortly! The Land 10:23, 28 March 2007 (UTC)

GA Review

Unfortunately the article was a clear Fail against the good article criteria. The main reasons for this are:

• Referencing. There is only one reference and a small number of citations. There is no way this is sufficient to justify the content of the article. Any work used in the creation of the article should at very least be listed in the references section. Controversial material must have inline citation.
• Breadth. There is very little mention of the economics of taxation; a major part of this article should be devoted to economics theories of the impact of taxation, optimal taxation theory, methods of minimising deadweight costs, the role of pigovian taxes, optimal income taxation, and so on. I don't think there's a need to include the diagrams demonstrating a deadweight cost.
• Point of view. The article retains a US-centric point of view (lots of "In the US, this tax works this way: abroad, it might not" style material). I also get a general sense that the article gives undue weight to US Libertarian viewpoints, though I imagine this has been much worse in previous versions of the article.

I think this is a very important topic and I'd contribute to it myself, if I didn't have my next three wiki articles to work on already identified - so I might get roundto this one in a few months. Other comments which might help improve the article include:

• The lead section doesn't do its job very well at present - cut the stuff about types of quasi-state and include more on the economic debates
• The article is too 'listy', focusing on lists of types of tax. I would address this by consolidating the discussion of proportionality, burden, morality and historical impact in one section, and changing the alphabetic list of types of tax into a thematically ordered section, including historic examples of types of tax alongside current-day examples.

I hope these comments are useful and constructive - please feel free to ask if any of them are unclear. The Land 12:41, 28 March 2007 (UTC)

Thank you for a thorough explanation - I hope we can get to work on improving the article. I note you'd like to contribute in the future, which would be much appreciated. In the meantime, I intend to start a discussion of how best to proceed with the article below - perhaps you'd like to contribute to this planning stage? Winklethorpe 11:40, 29 March 2007 (UTC)

Looks promising - I'll see what I can do but no promises! The Land 16:08, 29 March 2007 (UTC)

Re: point of view - I don't think it should cover all the countries and all the taxation systems out there should it? —Preceding unsigned comment added by 92.112.162.204 (talk) 14:09, 28 March 2008 (UTC)

Improvement Drive

The failure to meet GA (see above) makes me think the article needs a major overhaul to work. A FA like Law is, to me, a good example of a complex overview article being well handled. The 3 major criticisms in the GA fail were breadth (little on economics theories), POV (US-centric), and references (hardly any). I'd like to start a discussion on how best to tackle this, and I'm throwing out the following, after The Land's suggestions, as a starting point:

Should the article begin by establishing the theoretical basis of taxation, without too quickly getting into real world details? This could be followed by the development of taxation in history (which should illustrate how we have arrived at current day systems), and then a treatment of taxes broken down thematically, with appropriate examples (from around the world).

On the references front, one of the causes is that most of the main articles summarised are reference-lite as well, which asks the question of whether it would be better to get those in shape first, before coming back to their entries here.

I have to admit at this point that I wouldn't know where to start with much of this. We need some good reference material to start with - are there any major/standard works to start with, or is it the usual story of 2 economists producing 3 viewpoints? Winklethorpe 12:24, 29 March 2007 (UTC)

This sounds like a plan. I thought the review provided some good information. I knew it was short on sources but I hadn't thought about these other areas. I would think it would be fairly easy to get some sources for this article since it is more a general overview article. Morphh ^(talk) 13:27, 29 March 2007 (UTC)

Equivalent taxes

I removed this bit from the article, because it's not true, or at least is being very misleading:

In economic terms, taxes which appear to be very different can prove to be identical. For instance, a tax on wages is equivalent to a tax on consumption, because all wages are ultimately spent on consumption.

First off, not everyone dies with a zero balance in their banking account, and unless you treat the passing on of wealth in a will to be consumption (an odd definition) then at least some wealth might never actually be consumed. Even more importantly, it's misleading (or downright incorrect) to use the term "equivalent" here, because even assuming that all wealth would be consumed at some point or another, it's not necessarily consumed by the same individual that earned it nor at the same time that it's earned. The timing of the tax matters, and the person to be taxed (who possibly inherited the wealth earned by an ancestor) certainly matters.

Anyway, if somebody can provide an example that actually works, or wants to clarify and expand the notion being discussed, please feel free to add it back. --Sapphic 00:22, 10 May 2007 (UTC)

I understand your thoughts and I have heard economists speak in this fashion. I'm not sure that they consider it important that taxes be paid in some cross-section time frame or even by the person that earned the wages. Wages are ultimately consumed or saved and consumed at a later point in time. I think you may be applying a political philosophy or principal to a matter of economics and math. From an economic perspective, such matters can be irrelevant and the two tax systems can function in similar ways. One uses income and wages earned and the other uses personal consumption. One may state that you only earn wages to consume and anything not consumed is consumed by another. Be it right or wrong is not a mater of economics but of political philosophy - should you tax the man and his production or tax the consumption under his control. Anyway.. could be way off but that's my thought at the moment. I find the sentence to be accurate and it should be easy to find a reference. Morphh ^(talk) 2:00, 10 May 2007 (UTC)

The way economists talk on this matter is what I meant by "misleading" since it only covers very specific properties of a tax. It leaves out other factors like temporal neutrality, which is important in comparing different kinds of taxes. In any event, I think what they're getting at is the issue of revenue neutrality, but income taxes and consumption taxes aren't even equivalent in that sense (though other taxes might be) because of progressive tax rates (it certainly matters revenue-wise who pays and when, if the tax rates can differ). I agree that there's a real point to be made about comparing different kinds of taxes, but the example chosen was overly simplistic. A better example might be more informative, and would warrant reintroducing the section I removed. If you think you can find one then by all means add it, otherwise I'll try to return to this issue when I have time to do the research myself. --Sapphic 22:02, 10 May 2007 (UTC)

Progressive taxation can be applied to any form of tax and is not exclusive to income taxation. In fact, consumption taxes in themselves are not limited to sales or B2B taxation. In the economic sense, you could have an income consumption tax by untaxing savings and investment. They use the term consumption tax in a very broad sense sometimes. Many flat tax proposals (which often do not have a single proportional rate) are considered a consumption tax. Sales taxes can be made progressive on consumption by using rebates, credits, exclusions, or excise on luxury items. Consumption taxes are considered by some to be a tax on wealth as apposed to taxing only income. There are many factors that go into tax incidence and distribution of a tax burden. Time-frames can work for an against depending on the example - most go in and out of poverty in their lifetime and comparisons on what is "fair" using a cross-section time frame may look very different when analyzed over a lifetime. From an economic perspective, savings and investment benefit the economy (and thus should not be taxed) until they are used for the purpose of individual consumption (or received as income for consumption). Such can be applied to both income and other forms of taxation to create a consumption tax effect. I'm not sure that completely applies to the statement and I now seem to be rambling.  :-) Sorry Anyway, I'm not trying to debate the points your making - I'm just saying that it may not be that black and white and what may be "misleading" is the perception we have on certain tax structures. Morphh ^(talk) 1:35, 11 May 2007 (UTC)

Actually I'm more confused that you seem to think you're disagreeing with me, but in fact I agree with pretty much everything you said. My point about progressive tax rates was that an income tax and a consumption tax would be revenue neutral if and only if both had the same (flat) tax rate for all individuals. I was assuming that any realistic consumption tax would be progressive (I'm not a supporter of flat taxes) but I see I didn't make that clear. Anyway, my point can probably be summed up by pointing out that taxes are on transactions, not on the money itself (except possibly a wealth tax). So I'm not sure that this sense of "equivalent" that the section was using even makes any sense. Most likely, somebody was trying to simplify some other concept like revenue neutrality, and made the mistake of over-simplifying. Since you (Morphh) and I basically seem to agree on all the points anyway, I'll end my part in this "debate" and trust you to do the right thing. Cheers, --Sapphic 13:59, 12 May 2007 (UTC)

Costs of taxation

Would it be inappropriate to note the cost of taxes -- that is, cost of creating and keeping records, cost of retaining CPA's, cost of the IRS, and so forth -- in the article? And, maybe such costs could be estimated among the various types of taxes, such as VAT, FAIR tax, the current multiple tax system (sales tax, state income tax, US income tax, and etc)...? Brian Pearson 00:54, 15 May 2007 (UTC)

I'd say if there are some generic numbers for tax systems then such a section may be good. More specific numbers should be addressed in thier respective articles, such as Taxation in the United States or Value added tax. Morphh ^(talk) 1:06, 15 May 2007 (UTC)

Don't forget that the apparent costs of taxes (the ones you list) are a small proportion of the economic cost of taxes. The Land 09:11, 15 May 2007 (UTC)

True, I know one study that I have seen that discusses both the tax complaince cost and the cost of making tax related business decisions, which is estimated at around $500 billion total in the U.S. ($250B for cost & $250B for decisions regarding taxes). Morphh ^(talk) 12:04, 15 May 2007 (UTC)

One reason I brought up the cost issue was because of the seemingly unending debate over changing to one or tax system or another. Brian Pearson 13:39, 15 May 2007 (UTC)

New forbes info

dont know if anybody wants to enter this info, way newer than the old 2004 info being used on the current table http://209.85.165.104/search?q=cache:xIDpfjWl7YcJ:members.forbes.com/forbes/2007/0521/048b.html+sego+versus+sarko+forbes&hl=en&ct=clnk&cd=1&gl=us&client=opera —Preceding unsigned comment added by 70.115.54.7 (talk • contribs)

Several charts that need to be looked at. We probably need to redo Tax rates around the world. Forbes misery data Morphh ^(talk) 13:56, 24 May 2007 (UTC)

Yes, taxes are "imposed"

An anonymous user added the phrase "by force" to the verbiage at the beginning of the article, in reference to taxes being "imposed." I removed the phrase.

To "impose" means "to establish or apply as compulsory [ . . . ] to establish or make prevail by force [ . . . ]" Webster's New Collegiate Dictionary, p. 576 (8th ed. 1976) (italics added).

The obligations to pay taxes are imposed -- by law. We all know that taxes are not voluntary. They're "forced." It would be somewhat nonsensical to talk about a tax in any other way.

For U.S. Federal income tax for individuals, see for example 26 U.S.C. § 1 which says "There is hereby imposed [ . . . ]" (italics added).

To say that a tax is "imposed" "by force" is a needlessly redundant, non-neutral emphasis. Yours, Famspear 04:55, 27 May 2007 (UTC)

False tax protester rhetoric regarding Brushaber

An anonymous user posted the following material in the article, which is being mvoed here:

However, in the Supreme Court case of BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916) , the opinion of the court was that the 16th Amendment was unconstitutional due to the fact that Article 4 had never been repealed.

This is totally false, and the falsity is blatant. The user even included a link to the findlaw web site for the text of the case.

There is no such thing as a court ruling a constitutional amendment "unconstitutional." For a detailed explanation of what the Court did rule, see Brushaber v. Union Pacific Railroad. Yours, Famspear 03:28, 14 June 2007 (UTC)

Also, for the record, Mr. Frank Brushaber LOST the case! The three main holdings in Brushaber were:

1. The Sixteenth Amendment removes the requirement that income taxes (whether considered to be direct taxes or indirect taxes) be apportioned among the states according to population. The Revenue Act of 1913, imposing income taxes that are not apportioned among the states according to each state's population, is not unconstitutional.

2. The Federal income tax statute does not violate the Fifth Amendment's prohibition against the government taking property without due process of law.

3. The Federal income tax statute does not violate the uniformity clause of Article I, section 8 of the U.S. Constitution.

The United States Supreme Court has never held a constitutional amendment to be "unconstitutional." Yours, Famspear 03:35, 14 June 2007 (UTC)

Oh, and the phony, nonsensical reference to "Article 4" should be noted as well. The Court in Brushaber never even mentioned Article 4. This is easily verifiable by simply doing a "find" search on the text at findlaw.com. Further, the repeal or nonrepeal of Article 4 would have nothing to do with the issues presented to the Court in the Brushaber case.

This kind of nonsense has been tossed around tax protester web sites for years. Yours, Famspear

'Democratic Defence"

PROBLEM: "The same argument could be made from a monarchist perspective: since the King embodies the nation, the nation as a whole decides how the tax system should be organised. Similar arguments can be made to justify taxation under any form of government, including dictatorships and oligarchies."

Actually, the types of rule (or "government," if you must) mentioned are arguably not truly representative in the sense that the King/Dictator/Oligarchy is kept in power through use of military force, rather than the true expressed wishes of the populace. Because of this, I recommend removing the above-quoted text from the article. An 'argument' can be made, but that argument is not very intellectually rigorous and plays off of a misunderstanding behind the concept of "representative" as used in the phrase "No taxation without representation." —Preceding unsigned comment added by 167.219.0.140 (talk) on 14 June 2007

Whether the types of government are or are not truly representative, etc., has nothing to do with whether the material should be in the article. We don't delete material in Wikipedia for this kind of reason, regardless of whether the "argument" is "rigorous" or not, and regardless of whether it plays off a misunderstanding behind the concept of "representative."

The basic Wikipedia rules are: (1) Is the material presented from a neutral point of view; (2) Has the material actually been previously published somewhere outside Wikipedia (in other words, if it's merely original research by the person who contributed it, it's not proper for Wikipedia); and (3) Is the material properly sourced (Verifiability - is there a citation to a reliable third party source)?

There might be a problem with this material on the "Verifiability" and "No Original Research" rules. Any thoughts, anyone? Yours, Famspear 21:06, 14 June 2007 (UTC)

a new tax type

"environment affecting tax" which includes "natural resources consumption tax", "greenhouse gas tax" ("carbon tax", "sulfuric tax", etc), and others. Any government should change their tax sources to these sources gradually. And at the same time, encourage people to save and invest by eliminating "capital gain tax", "interest tax", etc. I believe any commercial activity affecting the environment should be taxed proportioned to the extent it affects the environment. At first, natural resources consumption tax should be implemented for all exhaustible natural resources. Jackzhp 19:21, 21 July 2007 (UTC)

natural resources consumption tax:

• tax on fish harvesting from sea except aquaculture & mariculture.

Representation as a purpose and benefit????

The article current says "A fourth purpose of taxation is representation", and later it says This ...is one of the most fundamental beneficial effects of taxation, but it is often forgotten."

From what planet does the author of this come from? Am I the only one who thinks that this is complete gibberish? Representation is a modern political requirement for obtaining general consent in the populace to taxation which is, after all, a form of legalised robbery. It is neither a purpose or a benefit as far as I can see. Your comments please before I dramatically re-word this. --Tom 11:48, 2 August 2007 (UTC)

Agreed. Representation is not the purpose of taxation. If it were, the colonists would have been happy to have the King tax the tea -- the tax would have provided the colonists with more representation. Wikiant 12:22, 2 August 2007 (UTC)

It certainly needs rewording and the last statement for it being one of the most fundamental beneficial effects is POV. Before it is completely reworded or removed though, we probably want to read the references provided for this "fourth purpose".[2][3] While it doesn't make much sense to me (as you've pointed out), there appears to be some research attached to it - so we should at least review this and consider its weight for inclusion. Morphh ^(talk) 13:18, 02 August 2007 (UTC)

Good point. The issue as described ín those papers is that historically, levies were often imposed by the powerful and as they increase the power shifts to more democratic bodies and finds that the higher the rate of taxation the higher the level of democratic control. However, it is clearly consequential rather a planned benefit. I'll think how to re-word it.--Tom 09:29, 4 August 2007 (UTC)

The representation/taxation link comes via special interests. The greater the number of elected officials, the greater the opportunity for special interests to influence the government. The more special interest influence the government, the greater the taxes. This occurs because the spending that results from the tax accrues to a small group (the special interest), hence each individual within the small group has a strong incentive to lobby in favor of the spending. Meanwhile, the cost of the tax is spread over a large group, hence each individual within the large group has a weak incentive to lobby against the spending. Wikiant 11:20, 4 August 2007 (UTC)

I agree with Tom about representation, and I see it more as a (perhaps unintended) consequence than a purpose. After all, even dictatorships tax their citizens and they are most unlikely to promote representation. However, something that is lacking in the section is the effect of taxes on the economy of a country, something that often is an explicit purpose of the fiscal policy. This is mentioned briefly somewhere else in the article, but should be repeated in the section about purposes. (As a minor nitpick, repricing is probably not a purpose, but the intended effect of the raised price of e.g. tobacco is (i.e. less smoking and the effects on public health.)Sjö 13:16, 8 August 2007 (UTC)

"Ned Netterville" commentary from user Ned Netterville, with citation and link to Ned Netterville website

A editor with the user name "Ned Netterville" has inserted this material into the article:

Ned Netterville, in a book-length essay entitled Jesus of Nazareth, Illegal-Tax Protester, argues that taxes violate the Eighth Commandment of the Decalogue, "Thou shall not steal," because taxes depend on force or coercion to collect them. The essay postulates that Jesus was crucified for advocating principles for righteous living that forbid taxation, which in essence was one of the charges against him in his trial before Pontius Pilate as recorded in the Gospel of Luke: (Luke 23:1-4):

Then the whole assembly rose and led him off to Pilate. And they began to accuse him, saying, “We have found this man subverting our nation. He opposes payment of taxes to Caesar and claims to be Christ/Messiah, a king."

I'm not sure whether this is appropriate in Wikipedia or not. Would this be considered prohibited original research? Does this violate any Wikipedia rule?

If not, may I set up my own web site and just publish my own book-length essays on a variety of topics, and then insert, into Wikipedia, quotes from (and citations and links to) my own book-length essays on my own web site? Yours, Famspear 21:02, 26 September 2007 (UTC)

Post-script: Oh, of course, if the consensus is that Ned Netterville and I can do this, I do not want to imply that I'll agree that just anyone else can do this. Heavens no. Otherwise, Wikipedia might become a massive "link farm" to self-published personal book-length essays. I guess we wouldn't want that. I think that only Ned Netterville and I should be allowed to do this. Is that OK? Famspear 21:11, 26 September 2007 (UTC)

This would violate Wikipedia:Verifiability regarding sources and would be the same as original research in my view. Morphh ^(talk) 21:19, 26 September 2007 (UTC)

Darn! I knew there might be a catch! Famspear 21:20, 26 September 2007 (UTC)

:-) Morphh ^(talk) 21:29, 26 September 2007 (UTC)

Rules! Rules! Rules! Oh well.  :- ( Famspear 21:38, 26 September 2007 (UTC)

Global warming

I deleted some statements about "global warming." The statements were very possibly correct, but the sourcing did not back up the statements. In fact, the sourcing did not even mention global warming, much less say that the carbon tax was imposed because of global warming.

The carbon tax may well have been imposed for the purpose of reducing the alleged effect of what is perceived to be global warming. Global warming may be real, or it may not be real (I'm not a scientist). However, if the carbon tax has been imposed to reduce the effect of global warming, a reliable source for that statement should be located, and the material may then be re-inserted in the article. Yours, Famspear 20:31, 17 October 2007 (UTC)

"majority" and "minority" in morality section

I removed the words "majority" and "minority" from this section since it denotes infantile and child like thinking. What we consider mainstream today was once a minority viewpoint. Think of the abolition of slavery or universal suffrage for women. Simply because something is "the majority" that doesn't make it inherently good. Was this section written by a nine year old or something? Lapafrax 21:10, 23 October 2007 (UTC)

Poll Tax Section

Poll tax was described as "regressive" because poorer people pay higher % of income. But a poll tax is not based on income, and relative to what is being taxed (individuals), isn't it "proportional"? 4 people pay 4x what 1 person pays.

This shifting of the "units" of the tax is a common issue. For example, some assert that tobacco taxes are "regressive" because they hit poor people more. The tax is typically proportional, based on the # of packs. Virtually any tax (sales, toll, gas, etc.), when the units are converted to income will become "regressive relative to income".

Tecsi (talk) 02:04, 19 November 2007 (UTC)Tecsi

I agree, the definition used there is an arbitrary correlation of using income to assess a consumption base. If you defined the base in the statement (as you did) "regressive relative to income" or regressive on income it could be semi-accurate (a somewhat common issue as you stated) but it is also (and more correctly) "proportional on consumption" as this is the taxable base. Using the terms progressive and regressive are relative to the tax burden, which is normally considered to be the effective tax rate. The effective tax rate is the amount of tax an individual or firm pays when all other government tax offsets or payments are included, divided by the tax base. If the tax base is consumption, then progressive, proportional, and regressive definitions should apply to the effective tax rate relative to increased or decreased consumption. Using income assumes a cross section time, so the assumption that you never spend any savings. Income also is limited as a measurement as it doesn't include wealth. Morphh ^(talk) 17:54, 21 November 2007 (UTC)

Contest

FYI - The Tax article is one of the core articles eligible for the Contest offering $100 prizes for the winners. Morphh ^(talk) 14:23, 25 November 2007 (UTC)

The Four "R"s

I think that the section Purposes and effects can be improved. Specifically, I see that the section The Four "R"s is based on a paper from Tax Justice Network, an organisation with a political goal and I question that the text is NPOV. I would rather see a reference to some well-known university-level textbook.

The section states the four main purposes or effects as Revenue, Redistribution, Repricing, and Representation. I agree that these are effects, but the macroeconomic effects and purposes are more important. Taxes are used to change consumtion, savings and/or investment patterns to stimulate or hold the economy back. Compared to this, representation is less important, at least in today´s society.

I also want to point out that in my (Swedish) textbooks representation isn't even mentioned as a purpose or effect. Other purposes/effects are mentioned, however, and I think they could be included in the article as less important or seldom used: Support for undeveloped regions and effect on family policy (such as the decision to tax husband and wife separately or jointly). Since the article seems to have found it's form I don't want to make any major changes without discussion.Sjö (talk) 06:05, 26 February 2008 (UTC)

I'm not sure some of the macroeconomic effects are really a purpose, more of a consequence of tax policies. I think representation also falls under this area of consequence and less purpose. Some areas such as consumption may fall under repricing. Representation will differ depending on where you go but it is one of the main points of U.S. elections and I expect most democracies - taxation, the finical burden to the citizen, is of primary importance to fund government functions or services (regarding what the politicians campaign). We also have to consider this in a historical sense, and not just in "today's society". I'd be fine with splitting purposes and effects, and moving representation into the area of effect. Textbooks would also be welcomed sources for additional material (though they might be a one sided source as well). As far as the Tax Justice Network, having a political goal or using a source that may be consider POV is fine. The point of the policy is that if there is another POV or contrasting POV, we should also represent the other view equally and present it without bias, providing appropriate weight. So the question is... is there some additional points of view that need to be included. I'm fine with including such... Support for undeveloped regions would fall under redistribution. I'm not sure I follow your point on family policy. Morphh ^(talk) 16:13, 26 February 2008 (UTC)

I see nothing has been done in the past 23 months. I've tagged the Tax Justice Network source with {{verification failed}}, rather than {{verify credibility}} (or the more precise {{verification failed credibility}}). I'm not sure about the other two references; they seem credible, but it's hard to tell whether they the authors or publishers have any reliability. — Arthur Rubin (talk) 18:03, 30 January 2010 (UTC)

References to the Bible

A new user deleted some verbiage referring to taxes in the Bible with the explanation that the "Bible (Old testament specifically) Is not a historic Document and therefore should not be used in an encyclopedia". I reverted.

There is no Wikipedia rule that says that a Wikipedia article cannot refer to something in the Bible -- regardless of whether the Bible is considered a "historical document" or not. There might be some valid reason to remove the material, but I would respectfully argue that this is not a valid reason.

If the article were to state or imply that Wikipedia is taking the position that the Bible is an accurate (or inaccurate) historical document etc., that would be a different situation. And there might be other situations where citing to the Bible might be inappropriate.

I think the article is just basically saying, "Look, taxes have been around a long time, and written references to taxation go way back in time -- people even wrote about taxes in Biblical passages -- stuff written a long time ago." I don't think any serious scholar questions the point that the Old Testament was written a long time ago. I don't see a major problem with "verifiability" or other Wikipedia rules on that basis. Any thoughts, anyone? Famspear (talk) 19:41, 28 April 2008 (UTC)

For the record, here's the verbiage:

Early taxation is also described in the Bible. In Genesis (chapter 47, verse 24 - the New International Version), it states "But when the crop comes in, give a fifth of it to Pharaoh. The other four-fifths you may keep as seed for the fields and as food for yourselves and your households and your children." Joseph was telling the people of Egypt how to divide their crop, providing a portion to the Pharaoh. A share (20%) of the crop was the tax. While not money, the idea is the same.

The very last sentence sounds a little OR-ish, but otherwise I would argue the material seems to be OK in the context of the article. Famspear (talk) 19:44, 28 April 2008 (UTC)

The veracity of the bible is well covered in other articles, providing a link to them in the context of Tax should be enough, it would be misleading if it had been used as a reference but by naming it in the article the reader is left to decide the implications. All that is being implicitly assumed here is that the Book of Genesis is describing a very ancient society, which the linked article's references suggest authorship was 500-2000BC, so it fits that bill.

Like you, I don't like the last sentence, but cannot think of a better one. Maybe remove it. GameKeeper (talk) 20:11, 28 April 2008 (UTC)

I agree Famspear and have no issue with it. In regard to the last sentence, we could remove it and maybe extend the second to last sentence to something like "A share (20%) of the crop (property) was the tax". Morphh ^(talk) 14:01, 29 April 2008 (UTC)

Taxation: A tool used by governments to achieve their macroeconomic objectives

If the govt. increases the tax rates, individuals will have to spend more of their income on taxes. This will leave them with lesser money to spend on domestically produced goods and services. Thus, demand for them will go down and so will their prices. The govt. keeps inflation in check in this way.

Higher interest rates will also prompt individuals to demand less of imported goods. Money flowing out of the country in the form of import expenditure goes down. The govt. can turn over a Balance of Payments (BoP) deficit in this way.Skand swarup (talk) 10:11, 22 May 2008 (UTC)

I'm not sure what you mean. Is this a suggested addition to the article?Sjö (talk) 13:03, 22 May 2008 (UTC)

Since most governments control the money supply, I"m not sure why they would use taxation to control macroeconomics and inflation. In the U.S., these are two distinct entities and Congress is likely not thinking of inflation measures as they impose or reduce taxes. I'm also not sure how interest rates would greatly effect imports over domestic products, since both would be subject to the same credit issue. Again but in reverse, the money supply can be expanded to reduce the value of government debt. Now I do agree that inflation in itself can be consider a tax (see inflation tax). Could you please provide a source to what you're describing? Thanks, Morphh ^(talk) 13:54, 22 May 2008 (UTC)

What I meant to say was that if interest rates are high, individuals have an incentive to save money. Thus, they would want to cut down on buying imported goods and services as well as domestic products. The reduced buying of domestic products would have no direct bearing on the BoP but the reduction in import expenditure would rectify a BoP deficit, if any. Also, please explain how the govt. can control inflation by a change in money supply. I am not sure what you exactly mean by saying "the money supply can be expanded to reduce the value of government debt". Inflation in itself can be considered a tax? Skand swarup (talk) 03:47, 25 May 2008 (UTC)

While balance of payments can have effects regarding taxation, this is completely dependent on the tax structure of the country. Most countries don't control interest rates through taxation; they do so through the monetary authority. When central banks print notes and issue credit, they increase the amount of money available in the economy, usually as a reaction to worsening economic conditions. Through a change in real money balances, this causes inflation (see causes of inflation). Financing expenditure in this way is called seignorage and the effect of increasing the money supply and causing the holders of money to pay an inflation tax is the most obvious cost of inflation. Governments are almost always net debtors (that is, most of the time a government owes more money than others owe to it). Inflation reduces the relative value of previous borrowing, and at the same time it increases the amount of revenue from taxes. Thus it follows that a government can improve the debt-to-revenue ratio by employing inflationary measures. Morphh ^(talk) 15:57, 27 May 2008 (UTC)

Opposition to taxation

I've removed 'Classical Liberal' from the bit about opposition to taxation, as classical liberals usually support limited taxation to maintain a minimal government. Also changed 'Anarcho-capitalism' to 'Anarchism', as all branches of Anarchism oppose taxation.

Also, is the 'citation needed' stamp on Objectivism really needed, when opposition to taxation is a basic aspect of Objectivism? Esspecially considering the sentence:

'Some people, however, argue that compulsory taxation itself is inherently immoral, as it is the theft of property by the government since people are forced to pay.'

is referenced with Atlas Shrugged. —Preceding unsigned comment added by Jh39 (talk • contribs) 23:54, 30 August 2008 (UTC)

This section has huge problems with WP:WEIGHT. Currently, the position of anarcho-capitalist opponents of taxation (perhaps 0.1 per cent of the US population, almost no-one outside the US, and no notable source given here - Robert Nozick would be better) gets a statement the same length as that of conservatives, liberals, social democrats, and the majority of libertarians put together. I've been trying to expand the latter, but a balanced treatment without cuts to the statement of the extreme position would require a massive increase. I restate the suggestion that this para needs to be cut to a couple of sentences, comparable to the statement of (much more notable but still minority) communist position. JQ (talk) 20:57, 18 September 2008 (UTC)

I think we have to take in to consideration the entire article as it promotes methods of taxation. Many of the different viewpoints are just the amount of taxation at a higher end, types of taxation, or the separate issue of spending (many of which are expanded upon in sub-articles). So it is important to contrast the overall morality in taxation itself, which is what they challenge. The other groups don't really do that (conservatives, liberals, social democrats) - so it's not really a matter of weight regarding different philosophies on taxation (which may merit it's own section), but the morality of taxation itself, which these smaller groups have a larger voice in that argument. Morphh ^(talk) 21:11, 18 September 2008 (UTC)

Actually, this only makes the WP:WEIGHT worse. The great bulk of the article is neutral descriptive material about kinds of tax, effects of tax and so on. The relevant contrast is with the section on optimal taxation which is considerably shorter than the section on whether tax is justified at all, and also shorter than the statement of anti-tax positions.JQ (talk) 07:13, 19 September 2008 (UTC)

"Because payment of tax is compulsory and enforced by the legal system, some political philosophies view taxation as theft, or tyranny, accusing the government of levying taxes via force and coercive means."

This statement should be changed to the following:

"Because payment of tax is compulsory and enforced by the legal system, some political philosophies view taxation as theft, or tyranny, as the government levies taxes via force and coercive means." This is not an "accusation". Taxation is collected by force or the threat of force. Is there any system where tax is NOT collected in this way? How is this an "accusation"? ALL VIOLATIONS of the law are enforced by violent, coercive means. If people don't pay taxes, they are fined, penalized, and sentenced to jail, correct? This is not about weight, it is about accuracy. If taxation is not collected by coercion and force, it is voluntary, and hence not taxation.

Turnover Tax

I think it should be added, as it was the main budget source in the Soviet Union (may be other Socialist countries?) Maybe it is no longer used anywhere, but still it should be mentioned.79.98.91.71 (talk) 22:41, 28 November 2008 (UTC)

Interwiki

An edit from 20th february removed all th iw-links. I don't know if this was on purpose in order to clean up or if it was vandalism. Wikijens (talk) 10:00, 28 February 2009 (UTC)

I deleted Original Research re: Canegrati

For violations of the no original research policy; this edit shouldn't be controversial, but feel free to discuss here if there's any question about it. Canegrati has several other original research wikis in a self-citation loop. —Preceding unsigned comment added by 123.112.71.190 (talk) 06:04, 7 April 2009 (UTC)

Tax is compulsory

Is this always true? I can't think of any exceptions, but I just wanted to make sure. Would a state lottery be a tax? If so, it would seem to be a contradiction to the compulsory statement. Any other examples? Morphh ^(talk) 21:45, 12 May 2009 (UTC)

After thinking about this, such exceptions would likely fall into a tiny minority and would probably be undue weight. Morphh ^(talk) 10:52, 13 May 2009 (UTC)

Morpph, this is a definitional issue. Government charges may be fees in exchange for goods or services (e.g., road tolls), levies restricted to a class of users benefitted (e.g., water district assessments), or compulsory levies as a result of some action or inaction by the person subject to the levy (e.g., penalties, interest), or other compulsory levies. The latter are the only ones referred to as taxes. Thus, to be considered a "tax" the levy must be compulsory. Customs duties are taxes, but are more often referred to as "tariffs" or "duties". For a good discussion relating to income taxes, see 26 CFR 1.902-2(a)(2). Would a short clarification in the article be appropriate?Oldtaxguy (talk) 18:09, 10 March 2010 (UTC)

While individuals are free to choose whether or not to buy lottery tickets, if people stopped buying tickets, the state would be forced to raise "traditional" taxes in response. Hence, what is non-compulsory is the *mechanism* by which the tax is collected. The tax itself is compulsory. Wikiant (talk) 11:14, 13 May 2009 (UTC)

Taxes are, by definition, compulsory. A state lottery is not a tax any more than a postage stamp is a tax. In the case of lotteries and the post office, the government assumes the role of an operator of an enterprise. There are many private delivery services, but for some reason, the government insists on running one of its own. Lotteries are a little different, in the sense that the government bans private lotteries while running one of its own, but it is run as a business, paid for by its participants. Because it is voluntary, it is not a tax. Its monopoly status is what makes a state-run lottery profitable. But the price of lottery tickets are not taxes merely because the revenue goes to the government, any more than the price you pay at a courthouse cafeteria for a sandwich is a tax because the government ultimately gets at least some of that money. —Preceding unsigned comment added by 12.192.79.189 (talk) 20:47, 13 May 2009 (UTC)

There is a significant difference between the lottery and the post office. The post office is run with the intent of providing a service, not generating revenue (in fact, the post office operates at a loss). The lottery is run with the intent of generating revenue. Again, what is voluntary is the manner in which people choose to pay the tax (i.e., via playing the lottery or via a "standard" tax). If everyone voluntarily chose not to play the lottery, then the government would raise other taxes to make up for the lost revenue. Contrast this with what happens when people voluntarily choose not to play a private lottery. The casino does not raise the prices of milk and eggs to make up for its lost revenue -- the casino simply goes out of business. Wikiant (talk) 21:32, 13 May 2009 (UTC)

Wikiant, you are essentially arguing that participation in a lottery is not truly voluntary. That would only be true if the State enacted legislation providing that if the lottery fails to raise X dollars of revenue, then X dollars of tax increases will automatically go into effect. That situation would be no different than a mafioso's extortionate demand that a victim-shopkeeper pay "the easy way or the hard way." Any payments made under the threat that the money will eventually be taken forcibly anyway is simply not a voluntary payment. Plus, if a casino ran an unprofitable game, it would be forced to find a way to change the game to one that people would voluntarily play more eagerly. But when the State runs an unprofitable enterprise, it has no way of knowing how or why it should change, since it masks all of its revenue shortfalls with taxes. —Preceding unsigned comment added by 12.192.79.189 (talk) 14:22, 14 May 2009 (UTC)

No, that is not what I am arguing. Of course, participation in the lottery is voluntary. What I am arguing is that, (1) the purpose of the lottery is to generate revenue for the state, and (2) if people chose not to participate in the lottery, then the state would raise the revenue via some other means (e.g., a traditional tax). Thus, while participation in the lottery is voluntary, paying the money to the state is not. IOW, the people get to chose whether they pay via lottery or pay via traditional tax, but pay they will. Wikiant (talk) 18:28, 14 May 2009 (UTC)

This shows that taxation is coercion & slavery. From "When Corporations Rule the World": "One of the major challenges faced by colonial administrators was to force those who obtained their livelihoods from their own lands and common areas to give their lands and labor to plantation development, that is, to make them dependent on a money economy so that their resources, labor, and consumption might yield PROFITS to the colonizers..... "In many colonized countries, the imposition of TAXES payable only in cash was used to force people into the cash economy.....Taxes were imposed on whatever villagers would find it most difficult to do without. In Vietnam, the French imposed taxes on salt, opium, and alcohol. The British in Sudan taxed crops, animals, houses, and households. In their West African colonies, the French punished tax evasion by holding wives and children hostage, whipping men, burning huts, and leaving people tied up without food for several days....."

taxes in germany -> source

"Today, one of the most complicated taxation-systems worldwide is in Germany. Three quarters of the world's taxation-literature refers to the German system. There are 118 laws, 185 forms, and 96,000 regulations, spending €3.7 billion to collect the income tax."

uh any source?? otherwise it should be deleted —Preceding unsigned comment added by 92.252.122.208 (talk) 21:59, 1 March 2010 (UTC)

* List of taxes

I just put this into See Also. Maybe you can think of a way to integrate it better. List of taxes is currently an orphan but it has some potential. AConcernedChicken (talk) 09:07, 9 May 2010 (UTC)

4 R's of tax: propose removal or marking as disputed

Prior to reading the WP tax articles, I had never in my nearly 40 years of large CPA firm tax practice heard of the 4 R's of taxation. I have not been able to find cites on the web that are other than lobbyist (UK:campaigning) groups, those that quote WP, or the citations shown in this article. Is there any other support? If not, we should at least clarify that the section represents a minority viewpoint, or better, mark it as disputed. If there are cites, they should be put in the article. One cite from a theoretician in the UK does not make something notable or a widely held view. Oldtaxguy (talk) 20:08, 31 December 2010 (UTC)

I had searched the web for sources about a year ago when I marked the section as citation/etc. needed. I found a mention that did not credit Wikipedia, but searching the Internet Archive I saw that it was actually more recent than the addition of that material to Wikipedia and so it was not the source.

The only thing that stopped me from removing the material entirely is that is seems essentially accurate. I would not oppose its removal, though.

CRGreathouse (t | c) 21:07, 31 December 2010 (UTC)

Taxation Incidence

The article under taxation incidence is intended as a nice simple explanation of how, depending on market elasticities, the burden of a tax can be displaced onto other agents within an economy. Very straight forward and the conclusion is strictly correct but biased as it ignores the flow of tax revenue back into the economy as government spending.

If money were simply removed from an ecomomy it is self evident that there would be a general reduction in wealth or income and hardly needs stating. But if money is not removed but redirected or recirculated, it is no longer self evident that taxation results in a general reduction in wealth or income.

The danger of this section, then, is that a casual reader might conclude that taxation results in lower income and or wealth, period. To quote from the article...

"this includes workers (in the form of lower wages), capital investors (in the form of loss to shareholders), landowners (in the form of lower rents) and entrepreneurs (in the form of lower wages of superintendence)."

The aim of my edit was to alert the reader to think about what happens when tax revenue reappears in the economy when it is spent by the government. By deploying the same argument, but reversing the direction in which tax revenue flows, simply changes the word "loss" into "gain" when applied to those economic agents and their competitors who are the recipients of government spending.

Perhaps to put it in mathematical language, if I is income and T is tax revenue and S is government spending, the article is simply saying that

I - T < I (Income - Tax is less than Income)

But in reality S = T and all I am saying is for the economy as a whole

I - T + S = I - T + T = I.

Help refining this point will be most welcome. Paul Hield (talk) 07:05, 18 February 2011 (UTC)

I'm sorry, in reality, S has absolutely nothing to do with T, and you would need a reliable source for the assertion that the money "put back into the economy" has the same effect as the damage done by the money taken out. Your argument resembles that presented by "Keynesians", which might deserve a place in this article, but is not the predominant economic theory. — Arthur Rubin (talk) 16:20, 18 February 2011 (UTC)

Your [that is, Paul Hield's] theory is a common fallacy. The loss that's discussed is not the money that is taken by the government, which you correctly point out remains in the economy, but the deadweight loss, which is actually removed. Some taxes are efficient in that they cause low deadweight losses, others are less efficient. Some (for example, many punitive tarrifs) are so inefficient that no money is taken by the government; all goes to deadweight loss. Of course there are also Pigovian taxes, in which the *untaxed* condition effectively incurs a deadweight loss that can be removed through taxation.

CRGreathouse (t | c) 17:18, 18 February 2011 (UTC)

Both the above comments suggest that more is being read into the argument than the basic assumptions support. The argument does not hinge on whether or not "damage" is done by taxation or "good" is done by spending, these issues are beside the immediate point. The losses referred to in the article describe the way that the "tax burden" is redistributed as a function of market elasticities. Nor is my point asserting that "money put back into the economy has the same effect as the damage done by the money taken out" just that the flows are broadly the same size. Whilst it may be true that taxation damages an economy, that assertion cannot be deduced from the argument deployed in the article, though the wording suggests this. I believe that if this article is to seen as neutral, so that the arguments over the ill effects of taxation are properly understood, then the appearance of bias in these articles should be removed. In short, I do not dispute that taxation may damage an economy, just that the argument deployed does support the hypothesis and so should not be framed in a way which appears to suggest it does.

Furthermore, the argument deployed in this section is interesting in its own right, the essence being that an economic agent faced with an increase in costs caused either by taxation of for example an increase in fuel prices may not suffer the full cost of the increase, but may, depending on market elasticities, pass the increased cost to other economic agents such as employees or customers. Just as importantly when a government seeks to subsidise a sector of the economy, the benefits may not be enjoyed by those in receipt of the subsidy, but by the same argument, may be enjoyed by other agents. For example, subsidising accomodation rent puts up rents and increases the income of landlords.

I agree that my edits were provoked by the impression of lack of neutrality in the article and certainly need to be better put. Might I suggest the following...

"If the seller is a competitive firm, the tax burden is distributed over the factors of production depending on the elasticities thereof; this includes worker's wages, dividends on shares, landowner's rents and entrepreneur's wages of superintendence."

I believe this improves the article because it properly describes the way that the "tax burden" is redistributed, without making the suggestion that taxation results in a general reduction in wages, rent and capital returns, which may be the case but is not supported by this particular line of reasoning. It might be a good idea to point to the "deadweight" section which does explain how taxation leads to reduced market efficiency. — Preceding unsigned comment added by Paul Hield (talk • contribs) 22:46, 20 February 2011 (UTC)

I am usually able to understand the very complex: I advised clients on highly complex transactions for over 3 decades. Yet I find the above paragraphs by Paul Hield to be incomprehensible. Is it just me? Oldtaxguy (talk) 04:46, 21 February 2011 (UTC)

Fair point, I had tried several previous edits to make this section a little more neutral, but these were reversed and were certainly not well written. I tried to point out that taxes raised are also spent and using the same argument outlined in this section one could produce the same list of economic agents whose incomes would be raised by tax funded spending rather than lowered by tax raising. But any suggestion that taxation was anything other than a bad thing was quickly reversed.

I am curious to understand the arguments that taxation must be lowered, but in reading this Wiki I get the distinct impression that that it taken as a foregone conclusion and that subtle use of language is employed to support the hypothesis.

Oldtaxguy, I am intrigued why you found my edit so incomprehensible, as it would help with future edits. Had you read the discussion above and were still confused, or just confused by the wording in the edit?Paul Hield (talk) 07:22, 22 February 2011 (UTC)

Dear Paul Hield, I agree there is bias in some of the taxation articles. The bias runs both ways, to the right (e.g., Flat tax), and the left (e.g., Robin Hood Tax). However, I did not particularly agree with your edits. I could understand what you were saying in the article edits. I was confused by your paragraphs above, beginning "Both the above ..." and ending "... reduced market efficiency." It was unclear to me what you were trying to say in those paragraphs. The sentences were quite long. Some words may have been misused. There may have been typographical or other errors that rendered some sentences imcomplete.

There are some excellent guides available on writing more simply. George Orwell, in his essay "Politics and the English Language" suggested, among his 6 tips, "Never use a long word when a short one will do." Also, "If it is possible to cut a word out, cut it out." A fairly good guide is available from the U.S. Army, "Effective Writing for Army Leaders". It states as policy that "a. Effective Army writing is writing you can understand in a single rapid reading, and is generally free of errors in grammar, mechanics, and usage. b. Good Army writing is clear, concise, organized, and right to the point." Also, "Use short sentences" and "Use short words".

These are good thoughts for editing in Wikipedia, both for articles and discussions. You might also consider testing passages you write for readability. There are numerous tools available free online to determine the Flesch-Kincaid readability indexes.

I hope these suggestions are helpful. If not, then ignore them. Regards, Oldtaxguy (talk) 02:56, 23 February 2011 (UTC)

From the discussions of the other editors, it appears that they have confused two issues...

The first being how the tax burden is not born solely by the economic agent who is the immediate subject of the tax, but is shared over a number of economic agents so that the the economic agent who is the immediate subject of the tax may pay less of the imposed tax burden whilst others pick up some of the burden. This is the discussion about the effects of market elasticities.

The second issue is the "market inefficiency" induced by the imposition of a tax. Taxation inhibits the least valuable trades so that "market value" is lost because trades that would have added value do not take place.

These are two distinct economic concepts. The section on "Tax Incidence" deals only with the first of these, "how the tax burden is dispersed". If one were to maintain a strictly NPOV in this section then it is necessary to point out that tax raised is also spent. Otherwise section simply says that raising taxes leads, through the mechanism described, to lower incomes. This is only sustainable, within the terms of the mechanism described, if it is assumed that the tax is not subsequently spent.

If however, the section aims to demonstrate that taxation leads to loss of market efficiency, then that mechanism must either be described in this section or a link used to point to the section on "deadweight losses". Either way, the two mechanisms must not be conflated.Paul Hield (talk) 07:07, 25 February 2011 (UTC)

Your fundamental misunderstanding is in the sentence that begins "This is only sustainable". CRGreathouse (t | c) 00:10, 3 March 2011 (UTC)

Dear CRGreathouse, could you explain why you believe I have suffered a fundamental misunderstanding please as this may be of use in improving the article, even if it is to point to links that would enlighten readers such as myself who are liable to such such misunderstandings. Paul Hield (talk) 07:00, 3 March 2011 (UTC)

If a tax of size C is levied such that consumers pay A, suppliers pay B, and the deadweight loss is -D, and the government spends the entire proceeds C = A + B + D in hopes of stimulating the economy. If the tax C was entirely wasted (destroying the bills collected would have a different effect) then the economy would predictably decline by A + B, or if you're not normalizing it declines by M(A + B) where M > 1 is the multiplier (variously estimated between 1.5 and 3). Assuming min(A, B) > 0 -- that is, this is actually a tax not a refund or transfer -- society would be less well off.

Now if the government spends the money (e.g. to stimulate the economy) then the decline is A + B - C, or again M(A + B - C) if you prefer.

(So far you should be nodding your head.)

But if there are no externalities, or the externalities are net positive (i.e., the tax is not Pigovian), then D < 0 and so A + B - C > 0 and the economy as a whole shrinks.

Therefore the sentence I referred to is demonstrably false: we need not assume that the tax is not spent, in fact we specifically assume that is is spent.

CRGreathouse (t | c) 20:25, 3 March 2011 (UTC)

To put it differently: for your claim to hold it must be true that every person purchases at least as many items under the tax as after the tax (no one trades down or is priced out of the market), in which case the tax is a lossless transfer to the government. But this is not the case, so your suggestion is wrong. Your claim about what the article claims is likewise incorrect.

I will attempt an example, which perhaps will be more elucidating than my foregoing explanation. Suppose I buy a movie ticket every weekend for $10. The ticket-taker, the movie theatre owner, the studio, etc. all get a cut of the money, in turn spending a portion of their cut to buy, e.g., groceries. Let's say the total effect on the economy is an increase of $30 in income for various people. Now suppose the government puts a $10 tax on movie tickets. Were I to pay the tax, the government's $10 will produce the same $30 (the defense contractor buys groceries, or whatever). But I don't -- $20 to see a movie is too much. So not only am I less well off by some amount between $0 and $10 (the amount I valued the movie experience, less $10), but the ticket-taker, the grocer, etc. are all less well off in a more concrete way: their products aren't purchased, and so they directly make less money.

Your fable happens only in extreme cases like poll taxes ("pay $1000 or die") where presumably everyone pays. Of course even that example doesn't really work -- many people wouldn't (don't have $1000, suicidal, etc.). So your claim holds in essentially no cases.

CRGreathouse (t | c) 20:47, 3 March 2011 (UTC)

Dear CRGreatHouse, thank you for clarifying that. That is what I assumed you had in mind. And for the purposes of this discussion I do not dispute any of your argument. Clearly I had not explained well enough my objection to the way that the article on taxation incidence was put. All of what you say may be true, I do not dispute it here, all I am saying is that the specific concept of taxation incidence does not lead to anything more than that the tax burden is distributed beyond the immediate point of levy. The precise same argument would also yield that subsidies would be distributed away from the immediate point of subsidy, and also one could write a string of agents whose income rose due to subsidies. That in the process of taxing and subsidising economic value is lost, is sustained by other arguments as you have clearly explained, not taxation incidence. Most of what you describe above is the deadweight loss about which there is an article in a section below and also a main article.

Let me be clear about my POV, I am simply curious about how we have arrived at the view that taxation is always bad and should be minimised and in extremis eliminated. Now it appeared, as I said earlier, that too much was being read into the taxation incidence argument, and you have just confirmed that because you had to introduce other information in order to rebuff the corrolary of the immediate argument (subsidies raise incomes and cancel the losses due to taxes). I believe we should take these arguments in small steps one at a time in order to maintain a NPOV, but if at each step we draw a conclusion that does not agree with the ultimate final conclusion, that does not invalidate the conclusion of that step, rather it simply says that that step is not part of the total argument, or that there are some economic mechanisms which flow in the opposite direction and may be inconvenient in reaching the final conclusion. So returning to the origin of this whole debate, I wanted to clarify that the specific mechanism described has nothing to say about whether or not incomes are rasied or lowered in general when one also includes the recirculation of the tax as a subsidy elsewhere... it may be true that incomes are generally lowered but needs to be described by further arguments and information.

BTW, the deadweight loss D reffered to above is just lost, it cannot be spent by anybody. Just as subsidies create a deadweight loss which is not spent or enjoyed by anybody. In other words the Government raises and spends C = A + B and in the process destroys D.

One final point. CRGreatHouse's example above about the movie ticket suffers the same error as the original argument about tax incidence. In the story of the movie ticket, it is claimed that because the $10 was not spent on the ticket, all the subsequent economic activity which would have followed is also lost. But the story does not consider how the $10 was ultimately spent... you were clearly deterred from going to the movies because of the price rise due to the tax, you may have then instead chosen to go to a comedy show which was untaxed, the chain of subsequent economic activity would then be similar to the one following the movie purchase. So just as it is biased to write "tax is dispersed via the incidence argument and leads to a general lowering of income and increase in prices" nor can you conclude that because you were pushed from one preference to a second preference that a whole bunch of economic activity was destroyed. Both arguments fail because they are incomplete by not considering the totality.

The notion of deadweight loss, or induced economic inefficiency, concerns he way that a perfect market is pushed away from its Pareto optimal equilibrium by the imposition of taxes. In the example of the movie ticket, your preference was to spend $10 going to the movies but instead you went to a comedy show from which you derived less value than you would have from the movies... the difference in value between your first preferrence and the actual choice is the lost economic value, deadweight loss or loss of Pareto efficiency.Paul Hield (talk) 08:08, 5 March 2011 (UTC)

"we have arrived at the view that taxation is always bad and should be minimised and in extremis eliminated" -- who is we? The article correctly makes the point that taxes are distortionary and (except in unusual cases which are also discussed in the article) cause economic loss, but that certainly doesn't mean that they should be reduced or eliminated. A Rawlsian would argue that a $1000 tax on the rich that caused $999 of deadweight loss and $1 of transferable income is beneficial. Non-normative economics has no answer for questions of this sort.

Bravo on catching that point in my fable. I hoped (for simplicity's sake) not to go into that point. It should be clear that there is economic loss, because I am spending my $10 on some activity I value less than a movie, but the actual amount of the loss is harder to calculate a priori. It may be higher or lower than if my preferred use was to keep the money in the bank as in my example.

Oh, and a minor note: the "h" in my name is not capitalized as it is in the middle of my name. :)

CRGreathouse (t | c) 05:01, 7 March 2011 (UTC)

Appologies for the "H". Also applogies for using the term "we" which is ambiguous. By "we" I meant the "dominant view" referred to by (Arthur Rubin) not the you and I in this discussion.

I agree that both taxation and subsidy will displace an economy from its Pareto optimum leading to a loss of "economic efficiency". That is the loss you suffer because you spend $10 on an activity you value less than the movie, against which you should balance the lower but not zero value you derive from your second preference, or indeed if you chose to save the $10 in a bank the economic value derived when $9.70 is borrowed. I do not agree that you should go on to claim that the loss to the economy was $30. That claim makes it appear that, rather than simplifying the argument which I believe was your intention, you are over burdening the analysis to justify sincerely held views, (which are not disputed but are derived from other considerations).

We need to return to the purpose of this discussion which was to examine whether or not the section on Taxation incidence is written in a NPOV. I believe this is important because for those of us who are curious about how the "dominant view" has arisen need to have each piece of the anaylsis expressed in a way which does not use language or examples which have been influenced by the final conclusion regardless of the correctness of the final conclusion. In this way it will be clear on which pieces of evidence or analysis the final conclusion rests and which are just incidental. From a NPOV, the article on taxation incidence, apart from the notion of "economic efficiency", is merely incidental and can say nothing about whether or not taxation results in a general lowering of incomes, that comes later in the chain of reasoning.

There was a strange point made above by OldTaxGuy, who said that whilst he agreed this article may contain some bias, so did many others and the bias went both ways. Not sure why he said that, because the aim should not be to ensure a balance of biases, but for all articles to be written from a NPOV.

So CRGreathouse and others, do you agree that there is a way to move the article, on Taxation Incidence, closer to a NPOV by making clear what can and cannot be derived from the mechanism of market elasticities dispersing the tax burden. I would suggest something along the lines of pointing out that both taxation and subsidy displace an economy from its Pareto equilibrium leading to a loss of efficiency and that whilst levying a tax inevitably leads to lower incomes of those affected through the elasticities this cannot yet be generalised to the whole economy because the subsequent spending has not yet been considered, but will be demonstrated later (or below or in links).Paul Hield (talk) 07:36, 7 March 2011 (UTC)

I'm not sure what you're suggesting. Would you be more concrete? CRGreathouse (t | c) 14:20, 7 March 2011 (UTC)

To all editors, I have tried to capture these ideas in an additional paragraph, which I hope will give the section a more NPOV feel. Please edit or comment to further improve the section, but don't just revert without comment or explanation.Paul Hield (talk) 07:21, 8 March 2011 (UTC)

Well this is an improvement from your previous edits. I think it's not appropriate in that section, though, and I don't think it improves the article. I certainly don't think it makes the article more NPOV. CRGreathouse (t | c) 16:10, 8 March 2011 (UTC)

I agree with CRG, including the reversion. I found the edit all but incomprehensible, and completely lacking verifiability or sources. Remember that WP is not about original writing or research, but covering what has been written by reliable sources. If there is a source that says this, then cite it and paraphrase it succinctly, or quote it. Oldtaxguy (talk) 00:10, 9 March 2011 (UTC)

Ok, I have added a link to deadweight and removed the mention of subsequent spending which, correct me if I am wrong, I suspect is the cause of Oldtaxguy's incomprehension. The rest of the paragraph I believe is essential as it makes a clear distinction between two of the mechanisms by which taxation causes economic loss and was shown in the attached figure. Again it would help the whole article if editors were able to explain their "incomprehension" as straightening out misunderstandings will improve clarity. Paul Hield (talk) 07:14, 9 March 2011 (UTC)

I understand the issue of original research. Though this is not original research just the re-expression of the same argument but with a change of sign in the flow of revenue between economy and state. This is a useful analytical technique in general (change of sign) since as as has been pointed out it yields a conclusion with which people do not agree and forces them to express reasons why there is an asymmetry in the argument. One such asymmetry is the generation of a deadweight loss in either direction... Not original reasearch just a clarification of thinking.Paul Hield (talk) 07:14, 9 March 2011 (UTC)

Whether or not it is comprehensible (and I don't find it such), it has no sourcing. Hence, it still qualifies as original research as defined on Wikipedia. — Arthur Rubin (talk) 08:29, 9 March 2011 (UTC)

Arthur, it appears that perhaps you did not read the latest edit as I had removed what I think you are calling original research. I.e. no mention of subsequent spending, just a description of the area of the illustration which is very widely referred to as "deadweight". If you read the latest edit you would notice the link to deadweight which provides more comprehensive explanation. Nothing original or incomprehensible there I trust. Kind regards - Paul.Paul Hield (talk) 06:58, 10 March 2011 (UTC)

I'm sorry, it's still incomprehensible and unsourced. — Arthur Rubin (talk) 11:18, 10 March 2011 (UTC)

It is not incomprehensble, that is an absolute statement. It may be true that you do not understand it, if that is the case try reading the link to deadweight loss. If you are still struggling to understand such a simple economic concept, by all means come back and ask for more help. It is difficult to provide help to you if you just keep saying it is incomprehensible. Say why it is incomprehensible. If you want to improve this article, why don't you take a more helpful approach by doing a bit of research yourself, you will find loads of illustrations of allocative inefficiency on the web and no doubt in plenty of introductory books on economics. — Preceding unsigned comment added by Paul Hield (talk • contribs) 19:16, 10 March 2011 (UTC)

Unless you can provide these alleged introductory books which support your thesis, it's WP:OR. — Arthur Rubin (talk) 19:44, 10 March 2011 (UTC)

Entirely aside from whether it's OR, I don't think it belongs in this section. CRGreathouse (t | c) 19:53, 10 March 2011 (UTC)

It belongs in this section because, the diagram attached which is commonly used the describe tax incidence has to include the triangular area which is the allocative inefficiency. Perhaps a link to the section in Wikipedia which desribes allocative inefficiency (or deadweight loss) would be sufficient but a few words must be necessary to help the flow? It seems worth properly describing the diagram so that the reader is properly acquainted with all of the implications of the diagram. In the mean time I will go ahead and dig out some references. Would the ones on the deadweight page be sufficient to satisfy you Arthur?Paul Hield (talk) 21:40, 10 March 2011 (UTC)

Dear Arthur, would you please help me and in so doing help clarify the article. The latest edit which I added was simply to clarify that the tax taken was sum of the losses suffered by each part of the economy impacted by the tax. This is the point made in the second paragraph of the article where the example of how a $0.50 tax on a $1 article is shared between the supplier and the buyer, the buyer pays an extra $0.20 and the seller loses $0.30, the sum being equal to the $0.50 tax imposed. To allow that example but delete my edit, where I state that the sum of the losses is equal to the tax taken, appears to be inconsistent as, so far as I can tell, they make the same point.

Do you agree with they way that the notion of tax incidence is depicted in the diagram attached to the article? If you do, you will see that it is self evident that tax + deadweight = total losses = (increase in prices) + (loss of income) + (deadweight loss of opportunity). If you do not agree, please explain why it is "false". If you do agree then explain why my edit is deleted.

I think your objection to my edit is that taxation causes greater loss in the economy than simply the sum of the losses as a direct result of the tax, which is true because there is also a deadweight loss of efficiency generated, but for some reason you object to that being pointed out. I'm just guessing here, so I may be quite wrong and be missing some other fundamental point. If that is your objection, then it would be helpful in the article to make that explicit and point to links which go on to expand the point.

On the point of references, the diagram appears on the Rochester University web site in one of the economics online tutorials, would that be adequate. The diagram itself is ubiquitous as a cursory search in google images for deadweight loss will quickly reveal. And in any case, the diagram has as long as I have been reading this article been always there. All I have done is to put into words what the diagram shows. — Preceding unsigned comment added by Paul Hield (talk • contribs) 19:38, 11 March 2011 (UTC)

Kind regards - PaulPaul Hield (talk) 07:07, 11 March 2011 (UTC)

Regarding your most recent addition:

We have a section about A and you added a false statement about B. A and B are related, but not closely enough to merit the comment, in my view. But since the statement is false, it has no place in Wikipedia at all.

Some of your recent edits have been correct but off-topic. Conceivably those could be modified to the point that they would be useful additions to the topic. But this is unsalvageable.

CRGreathouse (t | c) 15:02, 11 March 2011 (UTC)

What is A and B please? I don't know what you are calling false, A or B or both? And how on earth can the last edit be false, it is just the area of a parallelogram for goodness sake and is just another way of putting the story of the $.50 tax on a $1 item. I am really struggling to see your objection to a simple piece of geometry.19:47, 11 March 2011 (UTC) — Preceding unsigned comment added by Paul Hield (talk • contribs)

Archiving

The talk page is pretty long here, so I've setup archiving under a pretty conservative approach - only threads at least 120 days old will be archived. Ravensfire (talk) 16:33, 21 February 2011 (UTC)

You need to date the undated sections, or they won't be archived.... — Arthur Rubin (talk) 14:57, 22 May 2011 (UTC)

Financial repression

Not a tax. Well, it may be a "tax" in the same sense that inflation is considered a tax, but not in any sense as yet related to this article. It may be implemented by a tax on financial institutions, by requiring them to carry government debt (note, not sovereign debt; that's a mistake in the article.) — Arthur Rubin (talk) 14:50, 22 May 2011 (UTC)

This article lists the inflation tax, so it seems appropriate to also list the related financial repression tax. For a discussion of why financial repression constitutes a form of taxation please see page 143 of Reinhart's and Rogoff's (2008) This Time is Different. Ghileman (talk) 15:45, 22 May 2011 (UTC)

Only point 3 of the definition in the 2011 reference constitutes a tax in the extended sense, and that only on financial institutions; perhaps it should be incorporated into Tax#Financial services tax. The other regulations do not constitute taxes, even in an extended sense. — Arthur Rubin (talk) 15:50, 22 May 2011 (UTC)

Actually any bondholder or bank depositor is affected by the financial repression tax via inflation, lack of financial product alternatives, and capital controls. So the financial repression tax actually affects nearly everyone.

Perhaps we need to tighten the definition here a bit on this page to make it less focussed on describing financial repression, and more focussed on the taxation effects.Ghileman (talk) 15:56, 22 May 2011 (UTC)

I've updated the definition. How does it sound now?Ghileman (talk) 16:04, 22 May 2011 (UTC)

Better. I now think it should be mentioned in the "inflation tax" (which it makes worse) and the (indirect) "financial transaction tax" sections, rather than having a separate section, though. — Arthur Rubin (talk) 16:50, 22 May 2011 (UTC)

What is described in the article and the press as "financial repression tax" is not a tax at all. It may be effects of governmental policy, but fails to meet any of the meanings of "tax" as that term has been used in the English language. I propose to revert all of the changes shortly, absent a strong argument as to why "financial repression" meets the definitions of tax: "a pecuniary burden laid upon individuals, business entities, or property to support and carry on the legitimate functions of government" (per Black's law dictionary) or "to impose a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law" per the opening paragraph of this article.

The author confuses the legal term "indirect tax", which includes corporate franchise tax and transaction taxes, with the economic concept of indirect incidence of tax. Just because an economics professor calls something a "tax" does not make it a tax. The first sentence is, therefore, false, and contradicted many places in the remainder of the article.

This appears to be an economic theory regarding the effect on investment of certain government policy. It more properly belongs somewhere related to economic theory, not law, and should be moved. While there are some aspects of this Tax article that relate to economic theory and governmental social policy, they are minor aspects. When placed in this article, a three paragraph discussion of one economic theory with no coverage of opposing views violates the undue weight policy.

Again, I will revert soon absent strong arguments to the contrary. Oldtaxguy (talk) 04:11, 23 May 2011 (UTC)

How about the "inflation tax"? By the same arguments, that doesn't belong in the article.Sjö (talk) 05:01, 23 May 2011 (UTC)

Not quite fair. "Inflation tax" is a standard concept, and has been for some time. "Financial repression" seems to date to 2005 or so, and it being treated as a tax to 2008 or so. — Arthur Rubin (talk) 07:23, 23 May 2011 (UTC)

The term 'financial repression' was coined in 1973 by McKinnon and Shaw. However, the coining of the term simply gave name to an older set of policies which date back at least to the WWII period (see Reinhart and Sbrancia 2011) and arguably earlier still.Ghileman (talk) 13:13, 25 May 2011 (UTC)

Arthur, I think you hit the nail on the head.

Oldtaxguy, it would be inconsistent to include inflation tax in this article while excluding financial repression. Do you believe the inflation tax is not a real tax? Are you familiar with the ideas around nominal and real taxation? Please see Reinhart and Rogoff and the other sources cited for a further discussion of why financial repression constitutes a form of taxation. Best, GhilemanGhileman (talk) 19:17, 23 May 2011 (UTC)

At the risk of sounding ignorant, I can't say I recall ever using or hearing the term "financial repression". This seems like a minor topic, which might have an article of it's own, but may not have sufficient weight in mainstream publications to justify inclusion in this article. Morphh ^(talk) 16:21, 23 May 2011 (UTC)

You can Google recent articles, interviews from the FT, CNBC, Wall Street Journal, NBER, etc.Ghileman (talk) 19:17, 23 May 2011 (UTC)

Thanks, Arthur Rubin for pointing that out. I will add the section on inflation tax to the delete list. It is in no way a tax, either. To Ghileman, still waiting on arguments why you believe either belongs in an article on government levies (taxes) rather than economics. Oldtaxguy (talk) 22:33, 23 May 2011 (UTC)

Inflation tax is certainly a common enough term and theory, but this goes to the root definition of tax, inflation, and who is doing the inflating. Ultimately, a tax is an exchange of purchasing power from the citizen to the government. If inflation is caused by the devaluation of currency through monetary expansion and we attribute it to government, then it is a shift of purchasing power from the citizen to the government. Perhaps we could bundle all these concepts into a single section with some links to the main articles. Morphh ^(talk) 14:10, 24 May 2011 (UTC)

Oldtaxguy, This wikipedia page is titled 'Tax', and the term 'Taxation' also brings one to this page. Those are broad terms, and not as specific as the 'government levies' term you say this page only represents. The concept that inflation constitutes a tax is well established, and I've listed sources for you to peruse from very well respected academics on this topic. If this page is only meant to be about 'government levies', or 'nominal' rather than 'real' taxes, then it should be retitled accordingly. But if it is about the general concept of taxation then it is appropriate to cast a wider net, and both the inflation tax and financial repression belong on it. Financial repression meets the opening sentence definition of a tax: "a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law"Ghileman (talk) 18:52, 24 May 2011 (UTC)

I really don't think that it does meet that definition. Inflation tax is more debatable; perhaps it should be included as a section, perhaps only mentioned as a 'sometimes-considered-as-a-tax' but not otherwise discussed. CRGreathouse (t | c) 19:03, 24 May 2011 (UTC)

It would be helpful if you explained why you don't think it meets the definition rather than just stating your opinion, but to answer the point you raise financial repression does in fact result in a 'financial charge' in the form of the loss of real purchasing power/value. Further, financial repression is enforced through laws on reserve requirements, capital controls, etc., the violation of which (resulting in the failure to pay) would be punishable by law. These laws are enacted not just on businesses but at the individual level as well (e.g., restrictions on taking ___ amount of money out of the country).Ghileman (talk) 13:10, 25 May 2011 (UTC)

I suggest that Morpph and Ghileman consult their dictionaries for what "tax" means. I'm not the one trying to change a definition that has survived serveral centuries. My Websters defines tax, the noun, as: "1 a: a charge usu. of money imposed by authority on persons or property for public purposes b: a sum levied on members of an organization to defray expenses 2: a heavy demand." It defines levy, the noun, as: "1 a: the imposition or collection of an assessment b: an amount levied 2a: the enlistment or conscription of men for military service b: troops raised by levy." Black's Law Dictionary defines tax, the noun, as "A pecuniary burden laid upon individuals, business entities, or property to support or carry on the legitimate functions of government. Essential characteristics of a tax are that it is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority."

It MIGHT be argued that "inflation tax" is a tax to the extent the inflationary component of income is taxed. However, such tax is indistinguishable from tax on the noninflationary component of income, and certainly not imposed separately. Further, arguments in favor of enacting some tax preferences or reductions, such as the lower rate in many countries on capital gains, have often stressed that the reduction is appropriate to address the impact of inflation. Thus, if inflation tax is indeed a tax, these are negative taxes. Any distinction of such unstated and only vaguely measurable components, however, seems wholly artificial. I see no similar possible arguments for "repression tax", nor do the sources cited or any that I've been able to find suggest such.

I propose replacing both inflation tax and financial repression tax with the following sentence: Some writers have referred to some aspects of economic effects of government policies as taxes even where they do not result from any governmental levy. Then add the collective references, each with an explanatory phrase, as a footnote.

Again, the definition at the beginning of the Wiki page is not the Websters one you refer to here, but is "a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law". Financial repression meet this definition. It sounds like you would prefer to have a narrower 'nominal tax levy' wiki article, which I agree would meet your Websters definition. But a broad article title 'tax' or 'taxation' should be inclusive, not exclusive, of the various taxes or forms of taxation such as the inflation tax and financial repressionGhileman (talk) 13:03, 25 May 2011 (UTC)

Note that this article gets 1.5k to 4k hits per day. The article itself is not a good place to have highly dynamic text. Oldtaxguy (talk) 01:08, 25 May 2011 (UTC)

Take it easy guy. I never disputed or suggested an alternate definition for tax. No need for me to pull out a dictionary.. pretty condescending there. What I described was a common enough term "inflation tax" and how such a loss from the citizen is measured. There are certainly interpretations of such a definition though - on the other end, courts have stated that some governmental fees are not taxes. Never meant to get into the particulars of what constitutes a tax. I was just saying that if you took these particular interpretations, we could present the pov that it's a tax via the exchange of purchasing power from the citizen to the state. Morphh ^(talk) 16:50, 26 May 2011 (UTC)

My apologies to Morphh for being too harsh. I don't think any widespread definition of tax includes an exchange of purchasing power where there is no levy, though. Unless we are going to change the definition in the article of what "tax" means, inflation tax is outside the scope of the article. See my suggested replacement for these subsections, above. Oldtaxguy (talk) 23:30, 26 May 2011 (UTC)

Nor do I. An exchange of purchasing power is a measure of tax incidence, not the definition of a tax. I guess that is the point though - it's an opinion. They suggest it is a hidden tax, not directly levied but having the same net effect as if it were a levy. I tend to think we have too many sections of individual "types of tax" in this article and that we should group them. In that sense, I'd agree that inflation tax should not have it's own section. I think it should be mentioned in perhaps a couple sentences that are part of a larger topic on such tax types, where we could probably fit a one liner with wikilink to financial repression. For example, look at the US tax code structure. “Income taxes" (individual, corporate, etc.) are imposed under Subtitle A. Subtitle B imposes the estate and gift taxes as “transfer taxes" (taxes on some, but not all, transfers of ownership of property). FICA is an “employment tax" imposed under Subtitle C. You get the idea... Not sure what the best groupings would be, but I'm just thinking that listing specific tax terms as their own sections is probably not the best approach we could take. Morphh ^(talk) 02:50, 27 May 2011 (UTC)

Excellent suggestion, not just for these two items. That would make the article more useful to many readers. Possibilities for consideration: income based (including payroll), property based, transaction based (e.g., sales, VAT, excise), wealth based (e.g., net worth, estate & gift, capital), activity based (e.g., licenses, some environmental taxes). Some of the existing "types" are really multiple types or misnomers (e.g., corporate tax) and may need a rewrite. An intro sentence or two by type would be useful also. Oldtaxguy (talk) 04:59, 27 May 2011 (UTC)

Also, the Reinhart citations in the article do not support the statements other than those directly quoted. Oldtaxguy (talk) 02:30, 25 May 2011 (UTC)

Oldtaxguy, I encourage you to read not just the quoted text but the full article, as well as appropriate sections of the book This Time is Different (e.g., page 143, also cited) and Giovannini and de Melo, who calculate government revenue earned from financial repression for a 24 country sample (also cited). Here are some more additional highly cited articles on the the inflation tax and government revenue from the tax: http://www.jstor.org/stable/1827929 http://www.sciencedirect.com/science/article/pii/S1094202598900400 http://www.sciencedirect.com/science/article/pii/0165176585902526 http://www.jstor.org/stable/2109623.

Hopefully from these references you'll see that the inflation tax and financial repression tax are not fringe concepts, nor insignificant. For example, according to Giovannini and de Melo in the case of Mexico government revenue from financial repression was 6% of GDP, or 40% of nominal tax revenue. That's a pretty significant % of government tax revenue to exclude from an article on Taxation.

It doesn't sound like you're very familiar with the notion of real vs. nominal measurement, or perhaps accounting concepts of revenue, and so I hope these articles are helpful.Ghileman (talk) 13:03, 25 May 2011 (UTC)

I did not suggest that the economic concepts are fringe. And I did read the full chapter of the e-book you had cited (it is not an article; the article of the same title and date was only 124 pages long). Rather, I stated that the phenomena described are not taxes. See the first paragraph of this article. If you desire to change the definition of "tax" in the article, please propose changes on this talk page. Also, I believe you are misunderstanding and misusing various words in your discussion above. Note that the 4 articles you mention are available only by purchase for a price of USD88. My local library does not have them. Any alternative sources? Oldtaxguy (talk) 04:15, 26 May 2011 (UTC)

Most academic libraries should have the journal subscriptions and allow access to those article. And again as noted above, the financial repression tax meets the existing article definition.Ghileman (talk) 09:20, 27 May 2011 (UTC)

I don't think those articles are worth your time -- they're just talking about the inflation tax, on which everyone in the discussion seems to basically agree (other than on classification). The disagreement is on "financial repression" as a tax, which is far more controversial. But glancing through the papers I don't see anything on financial repression at all, let alone as-a-tax. CRGreathouse (t | c) 14:10, 26 May 2011 (UTC)

If you read Oldtaxguy's earlier entries above you'll see that he previously did not agree that the inflation tax was an actual tax, and he said he was going to delete it from the taxation page ("Thanks, Arthur Rubin for pointing that out. I will add the section on inflation tax to the delete list."). Hence all the references to inflation tax. For references to the financial repression tax please see the financial repression wiki page.

If you understand how the inflation tax represents a financial transfer of value from the taxpayer to the tax authority (government), then you have a grasp of the gist behind the financial repression tax. Inflation often accompanies financial repression, but it does not have to exist for the financial repression tax to be in effect. See the Giovannini and de Melo (1993) article for more on this particular point.Ghileman (talk) 09:20, 27 May 2011 (UTC)

I get the concept of both, it's just not obvious which should be considered taxes for the purpose of this article. I'm essentially with oldtaxguy here -- "financial repression" is not a tax any more than, say, regulatory capture or simple mismanagement. It seems to deserve an article, just like those other concepts I mentioned, but that doesn't mean it should be here. As to whether inflation should be in the list or in the article at all, I favor the latter and am undecided on the former. But I don't really think that's relevant here, we have our hands full just discussing your addition of a "financial repression tax". CRGreathouse (t | c) 13:34, 27 May 2011 (UTC)

I don't mean the following to sound condescending, but if you understood the concept of both then you would understand that the inflation tax is severely compromised without the financial repression tax. In other words, to talk about one without the other doesn't make much sense. The reason has to do with the components of financial repression (e.g., capital controls) which allow the inflation tax to have an effect. Without capital controls people and institutions can move their money around to avoid the inflation tax. It's true that an inflation tax can still occur without financial repression as some people won't recognize the inflation tax, know how to avoid it, or have the means to avoid it. But it's effects can be significantly diminished without financial repression.

In contrast, as Giovannini and de Melo showed you don't need inflation for the effects of the financial repression tax to be significant (e.g., equivalent of 40% of tax revenue in the case of Mexico). Reinhart and Sbrancia showed that the financial repression tax for the U.S. and U.K. was around 25% of tax revenue. These are HUGE numbers, and it would seem logical to me to include the biggest taxes on the 'Taxation' page, even if the concept of inflation tax and financial repression tax are relatively unknown. The effects of these two taxes can be certainly much greater than some of the comparatively de minimis taxes listed on this page, such as the Expatriation Tax.Ghileman (talk) 20:00, 28 May 2011 (UTC)

That's neither here nor there. The issue is not "is the effect real" nor "how does it impact inflation" but whether it should be included in this article. CRGreathouse (t | c) 20:21, 28 May 2011 (UTC)

Cleanup of Types of tax

Per discussion above, I have reorganized the major section on types of taxes according to the OECD categories that have long been cited in the section, but unused. (I fixed the link, also.) In addition, I have expanded some items a little, and condensed the non-tax items, retaining references. Note that this entire section needs a lot of work. Oldtaxguy (talk) 03:07, 1 June 2011 (UTC)

Looks great! Thanks for taking the reins on this.. I haven't had time to follow up. I'll try to make some time to help clean it up. Morphh ^(talk) 12:50, 1 June 2011 (UTC)

It's a good cleanup, but you're right -- it still needs work. I'll see what I can do. CRGreathouse (t | c) 18:22, 1 June 2011 (UTC)

Thanks, both; I'll be time constrained for a bit. Oldtaxguy (talk) 21:46, 1 June 2011 (UTC)

I did some word-smithing in the "non-tax" section. I'd also like to make another attempt to explain more clearly my main point in the above discussion: purchasing power, real vs. nominal, and other related concepts are well established and not controversial. This is why I'm struggling to understand why these concepts are having so much trouble gaining acceptance on this Talk page?

It sounds like one or more people feel a certain pride of ownership for this page, which is understandable given the considerable work that has gone into it and the traffic it receives. But given the breadth implied by the page's name I would encourage an accurate and inclusive definition, as opposed to the current misleading, narrow and incomplete definition of taxation, to be the goal.

With respect to inflation and financial repression taxes, perpetuating ignorance is not a Wikipedia goal. However, calling these two taxes 'non-taxes' will only serve to do just that. I really think the title of this section ("non-tax") needs to be reconsidered as it is unhelpful to anyone seeking to fully understand taxation.

If changing the title is not an option, then another possibility would be to place them in another section with a more appropriate title. Unfortunately I don't have a good suggestion at hand. A meta or umbrella term under which both inflation and financial repression taxes could sit, perhaps something like 'Real Value Taxes'. Thoughts?Ghileman (talk) 23:41, 7 June 2011 (UTC)

We are not arguing the economic concepts, but rather the definition of the word "tax", which you seem intent on misusing. Please find a dictionary definition that supports your interpretation of the word and cite it. Until then, I'll revert changes that call something a tax that does not meet the accepted definition of the word and concept. Oldtaxguy (talk) 05:13, 8 June 2011 (UTC)

Actually, you appear to be arguing the accounting definition of tax versus the economic definition of tax. If the title of the article remains, "Tax" then it makes sense to include and distinguish between both definitions. If we want to leave out the economic definition, then the article should be retitled something like "Accounting Tax". Wikiant (talk) 16:30, 8 June 2011 (UTC)

I am not arguing for an accounting definition, merely that "inflation tax" and "financial repression tax" do not fit the definition contained in this article. The economic definition is covered in a separate paragraph that clearly differentiates it from the accounting/legal/dictionary definition. That paragraph states that a tax is a "compulsory transfer of resources from the private to the public sector levied on a basis of predetermined criteria". This is only slightly broader than most dictionary definitions. By contrast, "inflation tax" is that component of any tax, but primarily connoting income tax, that arises due to increasing prices due to inflation. It is not a separate component of any tax, but rather an inherent feature of any tax that eventually taxes income, property, or gains with respect to assets held during inflationary periods. It is not a tax because it is not "levied" and not "on a basis of predetermined criteria". Similarly, "financial repression tax" is not even a transfer from the private to public sector. It is merely the perceived economic advantage to government arising as a result of government banking regulation. Both fail the economic definition as well as the accepted definitions in dictionaries.

If you have sources that support the idea that these actually are taxes and not just something for which some economists or politicians have used the term "tax" as a term of convenience or prejudice, please provide citations, and they can be discussed. If you believe the introductory paragraphs to this article are inadequate, propose changes, WITH CITATIONS. Oldtaxguy (talk) 02:30, 9 June 2011 (UTC)

I agree with Wikiant. Either the article title should be changed, or the subjects allowed under the current broad title should include 'effective' taxes, or tax 'equivalents' (if either of those terms are more acceptable?), like the inflation or financial repression taxes.

Oldtaxguy, I just don't understand your repeated threats to revert changes, nor your logic on continuing to argue that these do not represent a transfer of value from savers (creditors) to government. How can you not see that this meets the definition of a tax??

Just so I understand your role here, are you the owner of the page, or is there another party that we can appeal this issue to? Ghileman (talk) 11:28, 9 June 2011 (UTC)

No one owns wikipedia pages. Having said that, oldtaxguy raises an important issue. I don't have time to do this, but if Ghileman does, I suggest you go ahead and make the changes you have in mind but also include citations on inflation tax, etc. Then we can discuss the change. Wikiant (talk) 14:04, 10 June 2011 (UTC)

Changes (re)made to body. The previous definition of financial repression was not accurate. I also updated the section heading in question by striking 'Non' and replacing it with 'Other'.Ghileman (talk) 16:50, 10 June 2011 (UTC)

I like the new wording, that's a great improvement. CRGreathouse (t | c) 18:59, 10 June 2011 (UTC)

Thanks. Btw, here's a recent quote from outgoing Fed governor Kevin Warsh "inflation hits the most disadvantaged in our society the hardest. It is the cruelest tax of all". Full interview here: http://www.realclearpolitics.com/docs/2011/TIE_Warsh.pdfGhileman (talk) 23:04, 10 June 2011 (UTC)

Theory of taxation merger discussion

• Merge. Clear overlap - move new material into the main article. --Legis (talk - contribs) 05:39, 14 December 2011 (UTC)

Removed the "Four R's" section

I removed the section because it has been flagged for citations for more than two years. There were two ref tags at the end of the last sentence -- one was a dead link and the other did not mention "Four R's" at all. I'm putting the references here just in case they may be useful for something else. If the "Four R's" and the rest of that content is actually associated with a scholarly source then it can be put back as a concept attributed to the source, e.g., "according to X the purpose of taxes are..." Sparkie82 (t•c) 16:32, 2 March 2012 (UTC)

As far as I can tell, the section was written and a mirror site copied it, and a link to the mirror was added as a reference in classic citogenesis form. I think removing it is the right thing to do. CRGreathouse (t | c) 21:48, 2 March 2012 (UTC)

I agree completely with removal. Oldtaxguy (talk) 02:41, 3 March 2012 (UTC)

"Distorts economies"?

The phrase 'It distorts economies because it punishes productive people for being productive' in relation to progressive taxation does rather assume that people who are more productive get paid more. This does not neccesarily hold true, even if production is defined as contribution to the creation of wealth. It is certainly not true if production is defined as the creation of value.

In addition, the adjectives distort and punish seem rather emotive. It can be argued that people paying higher rate taxes have a duty to contribute to the economy and nation more than others. (such as one-nation toryism)

Interested to discuss - Ddroar

In classical economics labor is paid its marginal product, the total value added it produces and so in this analytical framework workers that are more productive are indeed paid a higher wage. Taxes decrease the rewards for working and therefore distort the choice between work and leisure; a problem that becomes more important the higher the marginal tax rate. Because the marginal tax rate rises with income in progressive taxation, this distortion is indeed a problem.

The word "distort" is used quite correctly in this context and is standard economic lingo. You may have a case with the word punish. Maybe "discourage" or something similar would be better. I think another problem is that the sentence is meant to describe a tax's effect on economic efficiency, while your counterexample is a question of equity. - Tobias

hi, neutral taxes do not cause any distortion — Preceding unsigned comment added by 81.37.38.205 (talk) 20:00, 24 May 2012 (UTC)

What is a neutral tax and how can it not cause distortion? Morphh ^(talk) 20:32, 24 May 2012 (UTC)

---

>Other purposes might include redistribution >of income from the rich to the poor,

If the state appropriates money for the exact opposite purpose (enrichment of the rich at the expense of the poor), is it still tax money? - n8chz

... might include ... - think it´s not necessary.

"Purposes and effects" versus "Economic effects"

Should "Purposes and effects" be a separate section from "Economic effects"? Paum89 (talk) 18:08, 13 October 2012 (UTC)

Tax choice

In addition to the section lacking sources, it might be even more difficult to find a source that this is a non-FRINGE view. — Arthur Rubin (talk) 08:11, 9 November 2012 (UTC)

It's been featured twice in Forbes (1, 2), once in the Atlantic (1)...and featured in other credible publications. It's obviously not a mainstream view but it certainly merits at least one paragraph in this article. --Xerographica (talk) 08:32, 9 November 2012 (UTC)

All the sources you list here seem to be columns (representing only the opinion of the author) or Op-Ed pieces. Any notability is at first remove; the publication thinks the author is "notable" (or interesting), and the author thinks the concept is notable (or interesting). Still, that problem relates to the article Tax choice, as well. The tag should remain until (at least one) WP:RS is found. — Arthur Rubin (talk) 15:08, 10 November 2012 (UTC)

I don't think this topic merits a subsection here. While notable, I think it falls into a very small minority when considering the broad topic of taxation and thus likely constitutes undue weight in this article. I do think it is fine for an article of its own and would be alright for a section in a sub-tax article like tax reform. If the content does stay, I'd suggest the sub-topic be changed to "tax reform" to make it a bit broader, with tax choice being a couple sentences of a larger point. Morphh ^(talk) 14:11, 3 January 2013 (UTC)

I agree with Morphh. There are a whole lot of ideas about better tax systems, but many of them are never put to use. I think that this article should cover the types of taxes and tax systems that are commonly used. Sjö (talk) 09:39, 6 January 2013 (UTC)

Sorry for the delayed reply, I was blocked for a week. Our entire tax system is based on the preference revelation problem...a problem which tax choice effectively solves. I think that's worth a paragraph or two. Please review all the references that I added to the benefit principle entry. --Xerographica (talk) 20:45, 6 January 2013 (UTC)

Theory of taxation

The following sentence does not belong in the lead of the article and has been removed:

"The two main theories of taxation are the benefit theory and the ability to pay theory."

The reason for not including this sentence in the lead is that the lead is meant to be a summary of the article. I have done a search of the article and I have found nowhere in the article "benefit theory" or "ability to pay theory". For the sentence to be included in the lead there should be at least a paragraph on this topic somewhere in the article. Without support of a second editor consensus at the moment is not to include. Guest2625 (talk) 10:22, 7 January 2013 (UTC)

Theoretical justification for our tax system?

I added this sentence to the lede...

"The two main theories of taxation are the benefit theory and the ability to pay theory."

...which ‎Guest2625 removed with the explanation that this entry doesn't contain the "terms" used in my sentence.

There's a theoretical explanation for the world's current tax system...either that or we're all crazy. If you're saying that this entry doesn't at all discuss the theoretical basis for our tax system...then clearly that's a problem. You don't solve that problem by removing the one sentence that does mention the justification for our tax system...you solve it by creating the section that does provide the justification. In order to do that...you first have to review all the references that I added to the benefit principle entry. If you're not willing to make that effort...then please don't edit this entry.

Having already read through all those reliable sources and many many many more...here's my take. This paper...The Pure Theory of Public Expenditure...by Paul Samuelson has been cited over 5,000 times. It provides the definitive theoretical justification for our tax system. Samuelson's argument was that the benefit principle had a very limited scope because of the preference revelation problem...a problem which tax choice effectively solves. That's it...that's our tax system in a nutshell. That's the bottom line that readers should not have to wade through miles of minor details to find. --Xerographica (talk) 11:12, 7 January 2013 (UTC)

In wikipedia articles the lead is meant to summarise the article. At the moment there is nothing in the article discussing benefit theory or ability to pay theory. If you want to include such information then create a subsection in the theories of taxation section. That's the appropriate place in the article for such information. Once that subsection is created, then it can be determined what weight that material should be given in the lead. Guest2625 (talk) 11:31, 7 January 2013 (UTC)

In other words...two deficiencies are better than one deficiency. How about you read through the reliable sources...so that we can have an informed discussion on what the RS say. --Xerographica (talk) 11:43, 7 January 2013 (UTC)

(ec)

@Xerographica: That's not what you said. Neither what you said nor the quasi-quote is consistent with what our article theory of taxation states. What you said probably has a reference, but it isn't Samuelson.

@Guest2625: Not exactly correct. While working on an article, a sourced (not just sourcable) statement can be placed in the lead before the supporting section is written.

@Xerographica. Yes. Deficiencies are better than inconsistency within an article. — Arthur Rubin (talk) 11:47, 7 January 2013 (UTC)

Seriously? You're saying that the Wikipedia entry is more of a reliable source than the reliable sources themselves? Here's a novel idea. How about for once you actually find, read and cite a RS. Give it a try. You know why you won't do it? Because it will require you to actually research the topic. It will require more effort than you're willing to make. --Xerographica (talk) 19:39, 7 January 2013 (UTC)

Given that it's been two weeks and no editors have offered any reliable sources to support their objections, I will be re-adding the sentence to the lead. --Xerographica (talk) 06:33, 23 January 2013 (UTC)

I'm not removing it, but it needs a specific citation. "Theory of taxation" has more types of theories than that. — Arthur Rubin (talk) 06:46, 23 January 2013 (UTC)

Here's one of many... Handbook on Taxation by W. Bartley Hildreth. --Xerographica (talk) 07:15, 23 January 2013 (UTC)

Since this is an article about taxation in general, who is the "our tax system" that is being discussed? Are we saying all taxation falls into these justifications? They don't appear to be the base justification for a tax system, such as raise revenue for the state, economic equality, and punish/reward behavior. It appears to better describe the structure or type of tax system, such as motives for progressive structure or the collection/spending like the tax choice model that's been included (which this benefit theory seems to closely match). I have to agree with Guest2625 comment regarding including it in the lead without sufficient body content and weight. I'm not even sure the Theory of taxation article is up to snuff to use it as a measure and how much theory actually reflects practice - seems at times my tax system neither reflects benefit theory or ability to pay. Morphh ^(talk) 15:50, 23 January 2013 (UTC)

Have you read through all the reliable sources on the benefit principle entry? --Xerographica (talk) 18:20, 23 January 2013 (UTC)

I glanced at them... I'm not sure that answers any of my comments. In fact, it seemed to support my initial thought. Morphh ^(talk) 22:49, 23 January 2013 (UTC)

Let me know when you thoroughly read them so that we can have an informed discussion on the topic. --Xerographica (talk) 23:09, 23 January 2013 (UTC)

Why don't you just proceed and provide supporting evidence for the statements included. There is no need for me to spend hours reading in these various publications, nor do I have time. Just offer several secondary sources that support the claim, which should be easy if they are the two main theories of taxation. Morphh ^(talk) 16:00, 29 January 2013 (UTC)

I also thought the citation failed verification. The focus of the source is "concepts of distribution" and theories on the "optimum allocation of societies resources". I do not see that it supports the statement that they are the two main theories of taxation. The focus is expenditure, and these theories appear to play into the concept of using a tax system as social welfare. Morphh ^(talk) 16:00, 29 January 2013 (UTC)

Ability to pay vs benefit – aspects of theory

Here are the requested sources...User:Xerographica/Principles of taxation. Now, I really grasp the concept of wp:burden...but it would seem that, if you're going to edit this entry, then you too should have a reasonable burden. Or else we end up with an extremely unbalanced burden...which misses the entire point of a collaborative project. So if you dispute a point or argument that I make...then please bring your own reliable sources to the table. Show me the evidence that you've actually spent your own time researching the topic. Thanks. --Xerographica (talk) 02:56, 30 January 2013 (UTC)

Nicely done - I'm reviewing them now, but a quick review of the sources would gain my support of rephrasing "theories of taxation" to "principles of taxation fairness" / "equality" (plenty of sources) or perhaps being descriptive in the application, such as "the structure of a tax is influenced by these principles". We should create a section/subsection in the article, maybe under "Views on taxation" or "Theories of taxation" that expands on the topic. We really should have content in the body of the article before including it in the lead, as the lead is meant to be a summary of the article. It would also be nice to also include examples, maybe something like "an excise tax on gas, often intended for maintaining roads and bridges (those that use the road more will pay more to maintain it), is an example of the benefit principle." I also like some of the more plain language that describes the basis of the principles, such as providing public goods and redistributing income to satisfy the ethical norms of fairness.[4] In the body of the article, we shouldn't have to follow the links to understand the basic premise for the principles. Morphh ^(talk) 14:34, 30 January 2013 (UTC)

Thanks. You're correct that "principles" is more accurate than "theories"...but the Theory of taxation article contains the greatest amount of relevant material. So I kind of just went with it...but these two "opposing viewpoints" do need to be rewritten and expanded in the lede. I disagree though that it's necessary to have content in the body before we have the same content in the lede. If we operated under some definite timeline then that would be one thing...but who knows when or if any of us would have the time to develop the relevant content in the body. So in the meantime...it's better than nothing. I'm far more concerned with substance than style. In other words, I'm far more concerned with getting important (as determined by coverage in reliable sources) information out there than sacrificing that information in order to rigidly adhere to style guidelines. --Xerographica (talk) 21:46, 30 January 2013 (UTC)

No, the lede isn't for adding "important" information not found elsewhere in the article, it is a summary of the article as Morphh says. I also disagree that these are the two most important theories (or principles). I have studied taxation law and those were presented as two principles among others used to choose taxation objects, subjects and rates. Important, yes, but nowhere singled out as the two most important. Sjö (talk) 05:47, 31 January 2013 (UTC)

I copied the relevant content from theories of taxation and pasted it into this article...but Rich deleted it because it was "original research". How could objects, subjects or rates possibly be more important than the principles? Clearly the rest is entirely dependent on the principle that is selected. In other words...the rest is entirely subordinate. First you select the foundation...and then you build on it. --Xerographica (talk) 07:04, 31 January 2013 (UTC)

It's still not in the source. If you copied it, we need to fix the article theory of taxation, also. — Arthur Rubin (talk) 14:03, 31 January 2013 (UTC)

Have you read the reliable sources? --Xerographica (talk) 20:26, 31 January 2013 (UTC)

I read the sources you referenced. That's not what they say. They do say that those are two (of the) principles of (just) taxation. They do not say there are only two, nor that those are "principles of taxation". — Arthur Rubin (talk) 02:11, 1 February 2013 (UTC)

Great, so contribute the reliably sourced content. --Xerographica (talk) 02:23, 1 February 2013 (UTC)

It is nice to see that you agree with Rubin. But I don't think that taunting him like this will be effective in achieving WP:CON. – S. Rich (talk) 02:35, 1 February 2013 (UTC)

Can you link to a single article where you and Rubin have contributed actual content? As I've told you countless times...if you disagree with my meager efforts to build an article...then please show me how it's supposed to be done. Clearly, based on numerous reliable sources, the benefit principle and the ability-to-pay are significant tax concepts. Clearly they are missing from this article. Clearly I've made an effort to include them. Clearly you've disagreed with my effort. So please, for once, show me how it's supposed to be done. --Xerographica (talk) 02:45, 1 February 2013 (UTC)

Morphh, I created a section in the body for the Principles of taxation but, as usual, Rich and Rubin removed it. I moved the section over to my subpage...User:Xerographica/Principles_of_taxation. Rich and Rubin arbitrarily remove any content that I add to a page...so you'll have to add it yourself. Of course, given that you've read the reliable sources, you're welcome to improve it. --Xerographica (talk) 20:40, 31 January 2013 (UTC)

definition

The definition of the word tax - aside from the Latin derivation - as it currently stands, is incomplete. Not all tax delinquencies are punishable by law. A tax is an instrument of financial engineering that is levied against some asset in order to deduct a reasonable percentage of money from a populace, which may be later used to subsidize an economy. — Preceding unsigned comment added by 69.145.154.120 (talk) 05:56, 20 April 2013 (UTC)

Cite? — Arthur Rubin (talk) 07:43, 20 April 2013 (UTC)

Purpose of Taxation in Monetary Economies

For the Federal Government of a sovereign nation, that issues its own floating rate currency, denominating all debts in that currency, taxes serve two main purposes;

1) Taxes create demand for the national currency 2) Taxes regulate aggregate demand

But they do NOT fund Federal spending. The Federal Government of a sovereign nation (US, Canada, Japan, note: this does not include EU nations who do NOT issue their own currencies) does not need to collect dollars before it can spend. It is the source and the monopoly issuer of dollars. It must spend dollars into existence before it can even think of taxing them back. It is not a user of a currency like a household or firm, where income does precedes spending. Vilhelmo (talk) 05:28, 28 April 2013 (UTC)

Economic Rent Tax - Errors & Omissions

The issue of Economic Rent, it's taxation and effects of such taxation, have receive short shrift in this article. Where it is mentioned, it is associated with the Georgists which is in fact not true. Georgists advocated a Single Tax on LAND Rents but they do NOT advocate taxing other forms of Economic Rent (monopolies, resources, credit creation, etc). Also, the fact that Economic Rent Taxation, unlike others forms of taxation, does NOT add to price, has received no mention. Vilhelmo (talk) 05:39, 28 April 2013 (UTC)

Definition: fine vs tax

The definition of tax in the lead section seems to include fines. Looking at the online edition of Black's (which I can't bring myself to cite because I can't identify who runs it), I see that some of the words omitted here refer to the purpose of a tax, namely "for the use and service of the state". This would exclude fines, which have the purpose of punishment for a crime etc., though they are also a revenue source. Hairy Dude (talk) 23:17, 28 May 2013 (UTC)

External links

Hi, I am working for the International Trade Centre (ITC), a UN/WTO agency that aims to promote sustainable economic development through trade promotion. I would like to propose the addition of an external link that leads directly to the tariffs section ITC's online market access database. I would like you to consider this link under the WP:ELYES #3 prescriptions. Moreover, the reliability and the pertinence of this link can be supported by the following: 1) ITC is part of the United Nations 2) No registration is required to search for tariffs 3) Market access data (Tariffs and non-tariff measures) are regularly updated 4) The link gives direct access to the market access database 5) A link to up-to-date international tariff information could provide an appropriate contribution to this article on taxes. Thank you, Divoc (talk) 07:41, 8 May 2014 (UTC)

Quick notes

just quick notes, since i don't have the time or background to write well on it...

purpose: fund-raising vs control/social-engineering/behavior-modification

types: inheritance; custom/import/duty; reseller's; property

related/see also: bonds; notes

capital gains tax

personal property tax

business inventory tax (includes busines equipment)

import taxes vs farm subsidies

stamp duty

revenue stamp

revenue paper

imputed interest/income tax (on zero coupon bonds)

and just for humor, "The Microsoft Tax"

---

thanks -- WP

Single rate with threshold

I believe that this page should at least mention the point that the combination of a single tax rate applied only on the excess of income/capital above a threshold will be result in a progressive tax in that the average rate of tax will increase with income/capital. An example is the income tax system which has operated in Sweden where a highly progressive tax is delivered by the combination of a high tax threshold and a single (high) tax rate. Alan Peakall 13:11 Oct 24, 2002 (UTC)

Inheritance taxes

"Inheritance taxes are extremely unpopular and many countries such as Canada and the United States have gotten rid of theirs or are in the process of doing so."

The first half of this is definitely not true. Personally I hate inheritance taxes too, but it's incorrect to assign that view to a majority of the residents of the US and Canada, especially with no time limitation. Many people find great satisfaction in knowing that the estate tax will punish 'the rich' on the assumption that the rich must have aquired their assets in some illicit or immoral manner. Envy has always been popular. Others argue in good faith that the estate tax is valuable in a social sense because it prevents families from becoming too powerful. And some argue that the estate tax saves the children of the wealthy from lives of unhappy idleness. Whatever the objective merits of those arguments, it is an objective fact that many people subjectively approve of inheritance taxes, regardless of whether they are objectively correct in doing so.

The quote's second half is also suspect. I don't know about Canada's inheritance tax, but the situation on the US Estate Tax is quite unclear. Most of the cuts in the federal tax have not really been cuts in federal revenue at all. Until the recent legislation, a portion of the revenue from the federal tax went to the states. The immediate change to the federal tax was to squeeze down on that money. The time has not yet come when the federal government will see serious reductions in its revenue from its estate tax. And many states are already considering state-level inheritance taxes independent of the federal tax to make up for the revenue they lost in the federal law change.

So it's much too broad to claim that the US is in the process of getting rid of its estate tax. There are reductions scheduled at the federal level, but those have not yet begun to really take hold. There is a scheduled repeal of the federal tax, but that lasts for only one year under rules that practically guarantee that Congress will revisit the issue. And it's entirely likely that many states will impose their own inheritance taxes, as they did before the federal government invented one.

I hate to cut the whole sentence because I don't really know what's going on in Canada. But I don't know how to rewrite it to make it true. On balance it's probably better to cut what I know is false than to leave something that might be true.

---

Well, in my opinion inheritance tax is a perfect tax - because you never actually pay it yourself. I suppose I'd better get over to inheritance to discuss the morality of the institution itself but as far as I am concerned if I inherit anything it is a windfall so I don't see why I shouldn't pay tax on it, since I pay tax on income I have earned or gain from dividends or capital gains. What's "envy" got to do with it? If one accepts that taxes are necessary (and of course it is possible to argue they are not) it makes sense for those with more money to pay more.

Exile ---

Fair Tax

Why is Fair Tax top of the list, and so blatantly propagandic (not to mention POV)...

I am removing the entire section; it is blatant propaganda and it doesn't even mention what "Fair Tax" does tax (it's a consumption tax)

Economics of Taxing a Good

I just finished making some large edits to this section. I think some of the language was technically confusing and a little inaccurate--for example "goods" don't have elasticities, curves do. Also, some of the previous text seemed to imply the graphs showed taxes on consumers, but the tax is clearly on producers in the diagrams.

How is it that taxing profits does not alter the structure of production? Entrepreneurs make production decisions based fundamentally on their profit calculation that the value (price) of the produced good will exceed the value (costs) of its factors. Any tax on profits must be included in this calculation, and therefore affect both the quantity and the structure of production. If this is the argument of a particular school of thought, it should be attributed.

Why does everyone have to pay taxes?...thats not fair

NPOV edit of propaganda

The following was excised from the article because nutty ideas and biased assertions of opinion don't belong here:

Toll Tax

A Toll Tax is a tax that is collected anonymously and though this type of tax has been often used historically on roads and bridges, this type of tax has not been implemented as a sole or major revenue provider.

The greatest advantage to a toll tax being used as a sole provider of tax revenue that along with the anonymity it provides, the ability to automate allows for removal of the burden of tax regulation and collection.

The best example of this tax as a sole source tax is the: No Names No Numbers Tax which through such automation removes not only Internal Revenue Service and its huge tax burdens of regulation and bureaucracy; but removes both compliance costs a additional related tax burden that the people incur to comply with complicated tax regulations; and takes the crime of tax evasion which costs tax payers millions each year to incarcerate and keep such tax offenders; Turning the offense into a minimal traffic offense.

Through this tax all other taxes are abolished but for import which states collect for the federal government for it's operation, and use taxes which are limited to a particular use such as the gas tax for roads. Contribution by the American Patriot Party.

Taxation as a Political Pawn and Invasive Tool of Government

Taxation used for political posturing is often used to finance programs that will benefit the constituents of a particular political party.

Democrats and Republicans use taxes to finance social programs that benefit larger bureaucracies and to finance projects that benefit large constituent companies.

Both use the higher or lower tax stance to increase tax revenue ether by increased forced taxation or by increasing profitability through the greater economic growth. Neither has ever attempted to actually limit itself to tax based on the consent of the tax payer or to the minimal need of government to function. This is due to the 16th Amendment first deemed unconstitutional by the supreme court and later made as an amendment to make it so called "constitutional".

This gave the federal government a unlimited power to tax the general public and over throw the meanings of the 17th Grievance of the Declaration of Independence. With this power, Security of ones person, papers and effects became in jeopardy as the federal government through the use of income tax created a method to invade all affairs of business within the United States and that enters and leaves the United States. Contribution by the American Patriot Party.

Maybe we need a article regarding the politics of taxation...

Added Toll Tax and Use Tax (simple)

Needs expanding.

User: Richard Taylor APP

backward economies of India, Africa, et al

What exactly defines a "backward economy"? Isn't that more of an opinion? The world bank generally differentiates economies based on income. "Low income economies" might be more fitting.

Taxation As Coercion

This is where I'm supposed to contend issues, right? I have reverted the link to the word "imposition" to coercion several times and have commented on this on my user page, where my explanation for taxation bring coercive is. I'm suspecting that I'm probably being disruptive, and seek to maintain civility and consensus, rather than having an editing war, which is inherently unproductive. To this end, please visit my user page and review my argument. Shyguy76767 (talk) 02:31, 27 January 2015 (UTC)

Place any argument on an appropriate talk page, not on your user page. Although I, personally, agree that taxation is coercive, it's not a mainstream view, so not appear on Wikipedia except as an alternative view. — Arthur Rubin (talk) 02:57, 27 January 2015 (UTC)

New Section or Relevant Page: Fiscal Capacity

Hello! I am a student editor that is thinking of starting a new page for Fiscal Capacity. I am posting a bibliography on this page, as State-building and Tax are perhaps the best pages to ask for feedback. I plan on approaching Fiscal Capacity in within the arguments of two strains of literature: One is about state capacity (Tilly, Herbst, Schumpeter) and the other is from the more recent and emerging public finance literature. I would appreciate any feedback! Thanks. ----Vivianliu94 (talk) 04:12, 5 March 2016 (UTC)

Bibliography: What I'll read first:

• Gordon, Roger; Wei, Li. 2005. "Tax Structures in Developing Countries: Many Puzzles and a Possible Explanation".
• Besley, Tim. Persson, Torsten. "Public Finance and Development" 2011. WORKING PAPER
• Besley, Timothy and Torsten Persson. 2007. The Origins of State Capacity: Property Rights, Taxation and Politics. NBER working paper No. 13028
• Johnson, Noel D.; Koyama, Mark. 2015. States and Economic Growth: Capacity and Constraints.
• Cukierman, Alex, Sebastian Edwards and Guido Tabellini. 1992. "Seignorage and political Instability". American Economic Review, vol 82, 537-555.
• Herbst, Jeffrey I. 2000. "State and Power in Africa: Comparative Lessons in Authority and Control" Comparative Lessons in Authority and Control, Princeton, NJ: Princeton University Press.
• Levi, Margaret. 1988. "Of Rule and Revenue", Berkeley: University of California Press.
• Migdal, Joel S. 1998. "Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World". Princeton NJ: Princeton University Press.
• Schumpeter, Joseph A. 1918. "The Crisis of the Tax State" International Economic Papers, vol. 4, 5-38.
• Tilly, Charles. 1985. "Warmaking and State Making as Organized Crime" in Evans Peter, Dietrich Rueschemeyer and Theda Skocpol (eds.), "Bringing the State Back In". Cambridge: Cambridge University Press.

Then:

• Besley, Timothy and Torsten Persson, 2013, “Taxation and development”, Chapter 2 in Auerbach, A, R. Chetty, M. Feldstein, and E. Saez (eds.) Handbook of Public Economics.
• Besley, Timothy and Torsten Persson, 2014, “The causes and consequences of development clusters: State capacity, peace and income”, Annual Review of Economics 6, 927-949.
• Besley, Timothy, and Torsten Persson. 2014. “Why Do Developing Countries Tax So Little?” Journal of Economic Perspectives 28 (4): 99–120. doi:10.1257/jep.28.4.99.
• Gennaioli, Nicola, and Hans-Joachim Voth. 2015. “State Capacity and Military Conflict.” The Review of Economic Studies 82 (4): 1409–48. doi:10.1093/restud/rdv019.
• Gordon, Roger, and Wei Li. 2009. “Tax Structures in Developing Countries: Many Puzzles and a Possible Explanation.” Journal of Public Economics 93 (7–8): 855–66. doi:10.1016/j.jpubeco.2009.04.001.
• Fisman, Raymond, and Shang‐Jin Wei. 2004. “Tax Rates and Tax Evasion: Evidence from ‘Missing Imports’ in China.” Journal of Political Economy 112 (2): 471–96. doi:10.1086/381476.
• Olken, Benjamin A, and Monica Singhal. 2011. “Informal Taxation.” American Economic Journal: Applied Economics 3 (4): 1–28. doi:10.1257/app.3.4.1.
• Best, Michael Carlos, Anne Brockmeyer, Henrik Jacobsen Kleven, Johannes Spinnewijn, and Mazhar Waseem. 2015. “Production versus Revenue Efficiency with Limited Tax Capacity: Theory and Evidence from Pakistan.” Journal of Political Economy 123 (6): 1311–55. doi:10.1086/683849.
• Piketty, Thomas, and Nancy Qian. 2009. “Income Inequality and Progressive Income Taxation in China and India, 1986–2015.” American Economic Journal: Applied Economics 1 (2): 53–63. doi:10.1257/app.1.2.53.
• Pomeranz, Dina. 2015. “No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax †.” American Economic Review 105 (8): 2539–69. doi:10.1257/aer.20130393.

External links

Hello everyone, I am working for the International Trade Centre (ITC), a UN/WTO agency that aims to promote sustainable economic development through trade promotion. I would like to propose the addition of an external link (www.macmap.org) that could lead directly to the online database of customs tariffs and non-tariff market requirements, including Rules of Origin, held by ITC. I would like you to consider this link http://www.macmap.org under theWP:ELYES #3 prescriptions. Moreover, the reliability and the pertinence of this link can be supported by the following facts 1) ITC is part of the United Nations 2) No registration is required to access the tool 3) Market access data (Tariffs, non-tariff measures trade agreements and rules of origin) are regularly updated 4) Market Access Map contains up-to date information on rules of origin under preferential trade agreements, including certificates of origin when available. Thank you, Divoc (talk) 15:13, 21 March 2016 (UTC)

A nice link, but what does it have to do with taxation? – S. Rich (talk) 17:41, 21 March 2016 (UTC)

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errors

"The purpose of taxes is to raise revenue to fund government. Money provided by taxation has been used by states and their functional equivalents throughout history to carry out many functions." this is all wrong, see http://www.epicoalition.org/docs/soft0004.htm 62.178.89.78 (talk) 19:04, 28 February 2016 (UTC)

Dear IP 62.178.89.78: No, the quote you provided is not "all wrong." And, please study Wikipedia's rules and guidelines. Famspear (talk) 23:36, 28 February 2016 (UTC)

If the purpose of taxation were merely to finance core public services, a Poll Tax would suffice. Taxes are on the whole progressive and most spending for redistributive. Thus the tax system primary purpose is to ensure a fair distribution of the factors of production ie economic justice. As are Pigouvian Taxes such as those on pollution. — Preceding unsigned comment added by 77.102.67.217 (talk) 00:50, 27 June 2016 (UTC)

And, your point is what, exactly? The article says nothing about the purpose of taxation being limited to financing "core public services". Indeed, the phrase "core public services" isn't even found in the article. The article says that taxation is used to fund expenditures. Redistributive expenditures, etc., are examples of expenditures, just as are expenditures for what you are calling "core public services."

So, what is it that you want to change in the article? Famspear (talk) 11:21, 27 June 2016 (UTC)

Dr. Baskaran's comment on this article

Dr. Baskaran has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

I would delete this sentence:

" Recent scholarship suggests that in the United States, the federal government effectively taxes investments in higher education more heavily than it subsidizes higher education, thereby contributing to a shortage of skilled workers and unusually high differences in pre-tax earnings between highly educated and less educated workers.[5]"

I think this statement is too specific for a general overview (refers only to the US and only to taxes on higher education). Also, the underlying research on this issue is probably not settled yet.

"Historically, the nobility were supported by taxes on the poor; "

This statement is also too general. The nobility also relied on land holdings etc. In fact, a strand of literature argues that one reason why medieval societies were not democratic was that the feudal state did not rely on taxation to fund itself (Tilly 2009, Baskaran 2014).

• References*

Baskaran, T. (2014). Taxation and democratization, World Development 56, p. 287-301, 2014.

Tilly, C., 2009. Extraction and democracy. In: Martin, I. W. , Mehrotra, A. K., Prasad, M. (Eds.), The new fiscal sociology. Cambridge University Pres

s, Cambridge.

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

Dr. Baskaran has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference : Baskaran, Thushyanthan, 2015. "Tax mimicking in the short- and long-run: Evidence from German reunification," Center for European, Governance and Economic Development Research Discussion Papers 230, University of Goettingen, Department of Economics.

ExpertIdeasBot (talk) 18:41, 27 June 2016 (UTC)

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External links modified

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I have just modified 2 external links on Tax. Please take a moment to review my edit. If you have any questions, or need the bot to ignore the links, or the page altogether, please visit this simple FaQ for additional information. I made the following changes:

• Added archive https://web.archive.org/web/20121008032841/http://www.ncsu.edu/project/calscommblogs/economic/archives/2007/05/the_difference.html to http://www.ncsu.edu/project/calscommblogs/economic/archives/2007/05/the_difference.html
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