Net income = tax expenditure?

[stebo0728]

Ok this thread is to discuss the general principles beholden to capitalism, or more specifically, ownership of wealth. Who OWNS the weath in America? Who SHOULD own the wealth in America? Who is currently laying claim to ownership of the wealth in America? Consider your net income. Our government considers YOUR net income at "tax expenditure". What does this imply? This implies that the wealth of America is owned by the government, or more directly, owned by the populous as a whole. What income you are "allowed" to keep from your check is labeled an EXPENSE by our government. Other symptoms of this syndrome; when it became apparent that the economy was going to be in need of stimulation, what was the immediate government response. Kick up the government spending. A rival proposal was made, and completely disregarded. The amount of stimulus designated was roughly equivalent to 6 months worth of income tax and payroll tax withholdings. It was proposed that a 6 month moratorium be placed on these withholdings, allowing Americans to keep and spend this money for those six month. But no, instead the Federal government deemed themselves more competent to spend OUR money than WE are. The horror stories are only now starting to pour in on just how competently this money has been spent. When did it become the case that the money I MAKE is not mine but rather the PEOPLES, and that I will be graciously allowed to keep a nominal portion of it? Am I arguing that there is no grounds for taxation? Of course not! Anyone with any common sense would realize that taxation is required, but to be as bold as to hold a postion that my earnings are in fact NOT MINE?

Ok so lets get the discussion going.

[IBCoupe]

It's never been the case, and it isn't the case, that your money isn't yours. It just so happens that we have an income tax: a recognition of the fact that your earnings are only possible through the existence and functioning of society. The income taxes levied upon you are a debt you incur upon earning the money that you earn.

This jives well with the progressive tax system that we have - you make more money? You've relied a bit more than others on society, and so your debt is increased.

EDIT:
Your problem apparently arises from a quirk of semantics: if the government can see your money as its own when calculating its budget, how could it have been yours?

In the same way that a bank sees the money I owe them on my loan - it's still my money, though I owe them a certain amount of it. Many would point out that bank loans are perfectly voluntary endeavors. While it's true that they are voluntary, so are both your participation in this society (your citizenship in this country and all the benefits conferred thereupon), and your income. You don't have to have a job if you don't want one. You don't have to be an American, either.

[stebo0728]

I dont have a problem at all with the government calling the taxation I owe them theirs. But no that is not the understading. ALL the wealth is considered the governments, and the amount that I take home is labeled and "expenditure" of the state. Thats a lot different than just the money I OWE them in taxes.

Of course we have, and could once again go exhaustive rounds on whether an income tax is even logical for a capitalist society. Consumption based tax makes much more sense, but then that sort of makes the whole "nanny state" mentality a bit harder to swallow.

One unintended but GLORIOUS possible side effect of the 6 month withholding moratorium would be, what would people think when the withholdings start again? Woah wait a minute, I like keeping all my check and spending it. Perhaps it would give more viability to the Nation Retail Sales Tax idea.

[IBCoupe]

Who labels it as such? Where are you seeing this? Is there some public document that I haven't seen that does this?

[Encryptshun]

A 6-month moratorium on income tax witholding wouldn't work at all. Those smart enough wouldn't spend the money because they'd know it's still OWED, just not forcibly witheld. The rest of the idiots would blow that money and then default on their year-end tax bills in April because they hadn't reserved the cash necessary to write the check in April.

[stebo0728]

A 6-month moratorium on income tax witholding wouldn't work at all. Those smart enough wouldn't spend the money because they'd know it's still OWED, just not forcibly witheld. The rest of the idiots would blow that money and then default on their year-end tax bills in April because they hadn't reserved the cash necessary to write the check in April.

No no my mistake in not mentioning, the plan absolves the citizen of that tax burden, it doesnt just defer it to end of year. Your right if it was still OWED then that would be a problem.

IB - you know as well as I that no documentation is required to set a general consensus of thought in Washington

[heliochrome85]

IB - you know as well as I that no documentation is required to set a general consensus of thought in Washington

cmon you can do better than this. you cant possibly have an idealogicial disagreement with a position you assume those in washington have, but have no evidence of.

[stebo0728]

IB - you know as well as I that no documentation is required to set a general consensus of thought in Washington

cmon you can do better than this. you cant possibly have an idealogicial disagreement with a position you assume those in washington have, but have no evidence of.

Well I thought that the fact that the term "tax expenditure" is used to describe OUR take home pay would be a large piece of evidence, word mean everything, but I shall do my due diligence and find some more.

[heliochrome85]

Well I thought that the fact that the term "tax expenditure" is used to describe OUR take home pay would be a large piece of evidence, word mean everything, but I shall do my due diligence and find some more.

well i hope you do find some information because it hink its a very interesting topic and a very valid point you make. i just dont know if anyone sees things the way you are portraying them to be. ive often wondered how the government sees private income relative to tax revenue. maybe your information will shed some light on this.

[IBCoupe]

When's that used, Stebo? I'm serious. The way you're describing it, if I'm reading you correctly, is that the government uses "tax expenditure" to mean any of our money that they don't collect.

When I google the phrase, I find this:

Tax expenditures are losses to the U.S. treasury from granting certain deductions, exemptions, or credits to specific categories of taxpayers.

So I'm seeing a definition that fits more in line with what we're saying: a tax expenditure is any time the government gives a "tax break" of some kind, which indicates a decrease in revenue.

[stebo0728]

Ok, did me some more research, I got my OP notion from a book I read a year of so ago, and I went back and read it, and I did have a bit of a flawed interpretation of tax expenditure. So I have a nice big bowl of Capn Crunch with Wordberries im munchin on, can you pass the milk?

But its interesting what you do find on the topic, basically spending programs under the guise of tax cuts or credits (there is a difference between the 2, who knows what it is?)

[IBCoupe]

The difference between which? Tax "relief" and spending or Tax cuts and credits?

[stebo0728]

The difference between which? Tax "relief" and spending or Tax cuts and credits?

Between tax cuts and tax credits.

[IBCoupe]

The latter isn't actually an expenditure on the Gov't's balance sheets, as it comes right back in next April.

[smockers83]

It's just an accounting thing is all. One is required to report all taxable income and in order to balance its books, the government has to create an expenditure so that it can document the complete transaction.

[stebo0728]

The difference I was referring to, is that a tax cut only absolves you of tax burden, only up to the point of what your tax burden is. A tax credit however, abolves you of your burden above and beyond the burden up to the full amount of the credit, often resulting in money coming back to you of a greater amount than what you paid. In other words, welfare programs hidden in the tax code.

[smockers83]

But no, instead the Federal government deemed themselves more competent to spend OUR money than WE are. The horror stories are only now starting to pour in on just how competently this money has been spent. When did it become the case that the money I MAKE is not mine but rather the PEOPLES, and that I will be graciously allowed to keep a nominal portion of it?

The difference I was referring to, is that a tax cut only absolves you of tax burden, only up to the point of what your tax burden is. A tax credit however, abolves you of your burden above and beyond the burden up to the full amount of the credit, often resulting in money coming back to you of a greater amount than what you paid. In other words, welfare programs hidden in the tax code.

How can you make both of these arguments within the same argument? You have to pick one or the other.

[stebo0728]

Im not quite sure I follow you there. In the first argument, I am discussing money that I have in fact earned. In argument number 2 I am discussing money that I in fact have NOT earned. For instance, if I paid 2500 total through the year into the tax system, but I get a 3000 tax credit for EIC for example, the EIC is a tax CREDIT, therefore not only does it absolve me of the 2500 but in fact I get to cash a check for an extra 500 I did not pay into the system at all. This is a redistribution of wealth at its purest form. Basically to tag it along with argument 1, not only has the government "allowed" me to keep all of my income, in fact I am also "allowed" to keep a bit of yours as well. Again speaks to the mentality that all wealth is a common asset and the government gets to decide how its distributed. Thats a bit of a loose explanation but fair I believe.