say an MD (like me) would pay 1.5M in lifetime taxes. if I paid in a single payment at the beginning of my career (and borrowed the money at half prime rate from a tax-exempt mortgage company) I'd come out ahead in the end b/c the 30% yearly Bush inflation that's coming soon wouldnt affect my taxrate. similarly, Gates and GM could pay half a trillion and finance it with junk bond sales.
the govt would get ten trillion or so, enough to be solvent, build maglev amtrak and a Detroit subway, and finance healthcare and SSI!
Trump: "youre fired!!" lol-- drpoundsign, Mar 25 2004 Trump copyrighting 'You're Fired!' http://www.cnn.com/...8/trump.fired.reut/ [Mr Burns, Oct 04 2004] I thought this was an estate tax idea-- theircompetitor, Mar 25 2004 How would you predict exactly how much your income will change over your lifetime? Suppose you get smacked with a major malpractice suit and lose your medical license? Suppose there's a depression in the economy? Suppose your income doesn't go up as fast as you predict it will?
I see so many ways that this could go wrong. I certainly don't want to give the government money based on what they think I might earn in the future if the economy goes as they plan.-- Freefall, Mar 25 2004 Tell me more about this bank that will lend you $1500000 with no collateral.-- AO, Mar 25 2004 A better solution would be to just abolish the income tax altogether. There are numerous reasons why it is unacceptable in a "so called" free society.
1) The income tax system depends upon the payor involuntarily submitting his private papers under penalty of perjury. Compelling testimony against oneself violates the 5th amendment to the constitution. 2) Collecting taxes from earnings instead of consumption lowers the savings rate which keeps the American people in a constant state of indebtedness. 3) The income tax began in 1894, when Congress passed a bill imposing the first-ever peacetime income tax. Tied to a tariff-reduction measure, the bill required all citizens with incomes of more than $1,000 to pay a 1 percent tax. Only about one out of every 100 Americans was affected. -Now look where we are!-- hughiebaby, Mar 25 2004 So you pay taxes before you've actually earned any money, at the point in your career when banks are going to be less willing to lend you money. Good for those with rich parents, rubbish otherwise.
hughiebaby (1) all taxes require involuntary certification, whether you have to declare sales, imports, or the number of windows on your house. (2) Taxing consumption lowers consumer spending and weakens the economy. (3) Trying something out on a small group of people before expanding it is surely good practice. TAXES RULE! PAY MORE!-- kropotkin, Mar 25 2004 Actually it was 2% for incomes above $2000.-- bristolz, Mar 25 2004 Prepaid life taxes would disastrously depress already-low birthrates. Even beyond that, though, there is a more general problem with using one-time payments for unknown expenditures.
Imagine that a condo association decided to include homeowners' association fees in the purchase price of units when they were initially sold. The first owner would have to pay enough to the association when he bought the home to buy a perpetual annuity to cover association costs; that prepaid annuity would then be transfered to the new owner when the unit was sold (and its value thus included in the sale price). Might sound like a nice concept, except for a disastrous problem.
If anything happens which would require the association to spend more money than the annuities provide, the association would have no means whatsoever of getting the extra revenue. If it imposed fees upon residents, it would defeat the purpose of the prepaid HA fees. If it tried to make up for the shortfalls by increasing the HA fee cost of new developments, it would risk pricing itself out of the market. In short, it'd be stuck.
To be sure, that can happen sometimes with governments anyway. When the government makes what's called a "one million dollar tax increase", the harm to taxpayers is almost always worth more than $1,000,000 while the actual increase in revenue is almost always much less (and in some cases may even be negative). Governments do not have some magic ability to generate wealth out of nothing; sometimes local governments can get into a deathspiral that lands towns or cities in bankruptcy. Hasn't yet happened in California, though danger signs are present.-- supercat, Mar 26 2004 This is kind of what we do now: send in a % of our present income (praying) for the government to build our future, which is worth ____?-- dpsyplc, Mar 26 2004 If this idea was introduced, the government would need slightly less money in tax receipts, since they'd have the money up front and could then invest the money in banks*. The banks would then lend the money to people to pay their upfront tax payments. Therefore, it would be good for government and banks, but bad for taxpayers.
*or potentially in public infrastructure but assuming the govt will do good with the money is a little optimistic.-- kropotkin, Mar 26 2004 Give the World what it really needs, (I am Christian,...), :
Let the young couples have a 1 million credit, for each baby child, and let them have that money to be spend as a distribution over the first 18 years of the childs life.
On top of the joy of having a child, you have the society support and appreciate the new citizen, that has been brought to this earth.
No obligations to pay back, just the transistion to make, that after the 18.ieth year, a responsable citezen that has not been starving, hasn't been forced by circumstances to less-moral acts, and has had the equal share privilige to grow into an educated person, enacting and actuating notions, ideas, and modest wishes.-- sirau, Aug 23 2011 // let them have that money to be spend as a distribution over the first 18 years of the childs life. //
or on huge houses, plasma TVs, sports cars, and cigarettes, the stuff that most people buy when they win the lottery. The oversight infrastrucure required to ensure that this system wasn't abused would be emormously expensive.-- Alterother, Aug 23 2011 [+] C'mon! who cares about the details. Its a great idea.-- pashute, Aug 23 2011 random, halfbakery