11% Sales tax proposed in Chicago

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Someone forgot to include the local cost of living, when they invented the progressive income tax. Someone living in Manhattan is not "rich" if they earn $80k a year. Someone living in rural AZ is not "poor" if they earn 40k a year. The guy in AZ probably grows his net worth much faster than the city guy, yet the city guy, who consumes less natural resources because he lives in a tiny box, is taxed more.

Don't worry, the proposed 11% sales tax will probably be rolled back to 10%.
 
oilyriser, you've a point...to a point.

In my industry we have a conundrum.

There's an established system of review of remuneration in the power industry. (we used to be a Govt owned coal to power point business, now we are about 20 state owned corporations, providing dividend to the Govt).

The system critically reviews the positions, responsibilities, accountabilities, and subordinates of every position description and prescribes a remuneration based on performance of functions.

Power Station personnel are dragged out of their beds all times of the day and night (can't count how many family events I've missed because of work). Head Orifice personnel are on call, only when they are specifically rostered onto call.

They get quite a few tens of thousands (on average) then the average power station workers.

Once heard a very senior manager state that this was due to cost of living.

However the state wide pay structure is still based on roles and responsibilities.

In society, I keep seeing that systems are manipulated rather than deciding one way or the other.

Income versus consumption taxes versus excises versus "levies" versus stamp duties...I don't care, just pick a system and structure it correctly.

Income taxes to provide societies infrastructure, versus road taxes (in vehicle registration) as a user pays system for the roads, versus fuel excise as a user pays system for the roads, versus private toll roads as a user pays system for the roads.

We are paying and paying for the same system.

They are playing a shell game at blinding speed, with a huge number of shells.

I've no idea where all the dough is going that's outside my immediate focus.

Thus they will never settle down to a single system that's transparent for all.
 
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The fact that the burden of proof is on the citizen to prove that they don't owe taxes is more than enough reason to close down the Income tax. I'm for an open, in your face, hit you in the wallet now consumption tax. That's the best way to keep the people interested and informed on exactly how much tax they are being charged.
The current system is a joke. What, 20000 pages I think it is? When someone is paying a 25% tax for groceries at the store, it's gonna make them pay attention.




Down here, we had a relatively simple system of income tax, excises, stamp duties, fringe benefits taxes and excises.

Sum total was 17 volumes of tax law.

Johnny vowed "never ever" to a consumption tax, gt re-elected, and decided that the unwritten mandate was a GST.

Which he introduced as a "simplification" of the taxation system" which was so complicated with its 17 volumes.

New "simplified system" now comprises 27 volumes.

GST was supposed to rule out the cash economy.

nothing is further from the truth.

If you run a business, 1/11 of your purchases is Tax. To avoid double taxation, 1/11 of your purchases is a tax deduction.

So If I buy $110 of Amsoil from a dealer, I get a $10 tax deduction.

If I on-sell that for $154 ($140, plus 10%GST), I only owe the Govt $4 ($14-$10) in additional tax, as the remainder of the tax has been paid in the transactions up to mine.

However, the system is not worked on an individual transaction, but on a quarter's worth of "business"

So if I have enough turnover in a fairly non-descript enterprise (say building, plumbing, electrics, auto repair), every single input garners an input tax credit (deduction), while every single LOGGED transaction earns a GST debit.

There are a lot of very small companies running cash books who are getting deductions on every business input while only paying tax on 60% of their sales.

Cash economy is thriving.
 
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Down here, we had a relatively simple system of income tax, excises, stamp duties, fringe benefits taxes and excises.

Sum total was 17 volumes of tax law.

Johnny vowed "never ever" to a consumption tax, gt re-elected, and decided that the unwritten mandate was a GST.

Which he introduced as a "simplification" of the taxation system" which was so complicated with its 17 volumes.

New "simplified system" now comprises 27 volumes.

GST was supposed to rule out the cash economy.

nothing is further from the truth.

If you run a business, 1/11 of your purchases is Tax. To avoid double taxation, 1/11 of your purchases is a tax deduction.

So If I buy $110 of Amsoil from a dealer, I get a $10 tax deduction.

If I on-sell that for $154 ($140, plus 10%GST), I only owe the Govt $4 ($14-$10) in additional tax, as the remainder of the tax has been paid in the transactions up to mine.

However, the system is not worked on an individual transaction, but on a quarter's worth of "business"

So if I have enough turnover in a fairly non-descript enterprise (say building, plumbing, electrics, auto repair), every single input garners an input tax credit (deduction), while every single LOGGED transaction earns a GST debit.

There are a lot of very small companies running cash books who are getting deductions on every business input while only paying tax on 60% of their sales.

Cash economy is thriving.




oops, I forgot Capital Gains tax as well in the above system. and also state payroll taxes.

the federal taxes were the only taxes in the 17 volumes.
 
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I WANT a well funded school district.






Gary,

Who doesn't? The problem with school district funding, at least around here, is the heavy skew to property taxes for funding. This results in the "wealthy" or "rich" subsidising the less wealthy or less rich. And it's just a certain kind of wealthy or rich - those that own real property. Some rich guy with a stock brokerage account gets just as big a free ride at someone else's expense as the have nots. There is no other conclusion that can be drawn from this shakedown scheme.

It would be far more fair to make the people who actually have kids in public schools, pay the cost of public schools, would it not? They're the ones draining the environment. The parents might even become concerned about the actual performance of the public schools if they actually paid anything close to their cost of it.

That will, of course, never happen, because most people like having someone else pay for their schools. The public schools likely teach this shakedown mentality to their captive students.
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I WANT a well funded municipal government that gives me good roads ..adequate police protection and all the other things.





Again, who doesn't? Fuel taxes are supposed to pay the roads. Taxing commuters on the number of miles they drive in addition to the number of gallons of fuel they burn would more fairly allocate the actual costs of the road to their utilization by the individual and would be far more fair, but it will never happen, because it's more fun to tax the "rich" or "wealth" guy that owns a luxury car, or boat, or airplane.

BTW, what does it matter how many nanufacturers make luxury goods? Even if it's only one, why should it be taxed out of existence because of envy? Is it an economic benefit to unemploy people?

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All you anti-tax heads are convinced that someone else has to pay for it all. You're willing to live with the degradation and dysfunction that lack of proper funding allows.





The cold hard truth is that somebody else does pay for darn near all of it. And a lot of these people have not even been born yet, because as skewed as we are to taxing rich folks, we still spend way too much - we don't have enough rich folks.

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How many here are on the public dole on the tertiary level? Any government contractors here? Do you need more public assistance?




Well that would be me. The last real estate project I did has a potential tax credit associated with it of 10%, valid only against FIT going back one year, and forward 20 (when inflation will have dramatically decreased its value) and it only credits against certain types of income, blah, blah. I don't know whether it's a good deal or not. It was just one factor I considered in the overall project.

A consumption tax would be the best tax, but food, some level of housing, etc., should not be taxed.
 
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Who doesn't? The problem with school district funding, at least around here, is the heavy skew to property taxes for funding. This results in the "wealthy" or "rich" subsidising the less wealthy or less rich.




No ..not really. What is does is mask the health of the environment with the blind application of taxes upon real property. All of those homes may have been purchased/built in a healthier economic era ..where gainful employment was abundant. Now with retirement, downsizing, demanufacturing, service economy, ..etc..etc. ..the economic health of the community may be lower ..yet the school district gets an assured pathway into every wallet ..regardless of the ability to afford the tax. This is why reverse mortgages and some retired people, with paid for homes, are forced to sell them. Because the cost of education isn't tied to their ability to pay for them ..and is arbitrarily assessed against their tangible worth. Your school taxes will go up whether your property value climbs or retreats.

This is why the total income of the community is a MUCH FAIRER system. It protects your retired and lower income families. It INCLUDES RENTERS. It also, to those who are most effected (higher income earners) makes them VERY interested in controlling costs. It also indexes the available revenue to the school's ability to "spend". Most of the economically viable demand that teacher contracts are settled due to the most idiotic things. Vacations, graduations, college entrance. They're effectively leveraged out of convenience. School boards cave in to pressure ..and you pay another $200-$600/year to keep the train moving. With income as the source, there will be a few more people applying pressure to CONTAIN the costs and not "just get it over with" (aka- throw money at it - it will go away - an attitude that we can no longer afford).

You would have very little weight in any argument that a teacher's contract should advance beyond the growth (or recession) of the community's wealth or poverty. There would be no reason to give your administrator a raise when the community got poorer. There would be no reason to NOT contour the costs with the available revenues and EVERYONE would be in the same vested boat to make sure that it worked.

Right now you have a captive audience for continuing escalation with a Pontius Pilate attitude
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It would be far more fair to make the people who actually have kids in public schools, pay the cost of public schools, would it not? They're the ones draining the environment.




Okay ..can we figure out how many who support this notion already put their kids through school on the public dole? Can we calculate how much they took out of the system at a discount, offset for their contributions ...add interest ..with inflation factors ..and hand them a one time bill to put into the system for a lifetime exemption??

Anyone who used the public school system ..and is NOW without children in the system, is merely trying to prevent others from "getting away" with what they did. I got mine ..but I don't want you to get yours". I used society as a crutch when I needed it ..but now that I don't need it ...I don't want to be the crutch for anyone else.

Did you offer seniors, or others that were without children in your school district, exemptions from paying school taxes when you had kids in school?

This is nothing more than an attempted "escape".

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The parents might even become concerned about the actual performance of the public schools if they actually paid anything close to their cost of it.




Well, I assure you, if income was the basis for the public education system ..EVERYONE will be concerned about controlling the COSTS of public education.

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because it's more fun to tax the "rich" or "wealth" guy that owns a luxury car, or boat, or airplane.




I won't roll my eyes, but very little real revenue is generated by luxury taxes. It's more a PR thing. I really find it hard to believe that anyone spending 300k on a decent boat refused to buy it due to some luxury tax.

Now on the topic of road taxes, we see the same sorta "not my problem" shuffle. Those who don't use mass transit don't want to subsidize it ..yet every urban center pays billions in road use taxes in just the truck traffic that enters them ..daily. Urban citizens don't use highways much ..yet provide tons of revenue for them.

I don't have much trouble with highway taxes. Now controlling what they cost to maintain with the available revenue? That's another story. If we're "poorer" ..why does it cost me more to pave a mile of road aside from the higher costs of the concrete or asphalt? Does the laborer deserve "more" ..the project manager? The engineer? Did they get to elevate themselves in the hierarchy of the society ..with the society in decline? Put more space between where they were ..and the guy under them? Why?

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The cold hard truth is that somebody else does pay for darn near all of it. And a lot of these people have not even been born yet, because as skewed as we are to taxing rich folks, we still spend way too much - we don't have enough rich folks.





Funny. We never had a lot of rich folks. What we had was a solid middle class that carried all the weight. Now that we've allowed that to be gutted ...there's less money to pay the bills. But the bills are still coming for military, infrastructure, education, etc. Do you expect poorer people to pay more?


If you feel that taxation is corrupt ..income based taxes are the most assured way to reach into every corrupt individual's wallet. As they lie and manipulate ..play their games ..help their pals, they have to cut themselves in the bleeding process.

That's why you'll never see a fair tax system. A flat tax on income for all costs. It eliminates the manipulations and advantages that you can leverage to favor one over another.



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A consumption tax would be the best tax, but food, some level of housing, etc., should not be taxed.




Sales taxes would work ..with or without exemptions for food and clothing ..but you've probably seen the spin doctors ripping that to shreds. One rebuttal editorial managed to wiggle it up to a 90% tax to pay the bills ..when the cost of government was an almost even 21% of the GDP. Basically the guy was just an eloquent liar and con artist. Those in power and influence like the way it is. Why is that? They just give some people enough incentive to support them in the furthering of the unfair tax system.


Hey, I'm no Robin Hood ..but unless you can somehow detach yourself from being an American ...you (all of us) NOT paying the bills makes whatever the result is .. the default condition.
 
I agree with the premise that more should be paying, and I think that is what you are saying Gary.

As I ponder this while I should be working, for the middle class home owner, the property tax situation probably works itself out while they are buying the home.

If they itemize, what they save over the costs of renting probably cancels out their property taxes, not to mention that property taxes are deductible from your income. (Sales tax too, now, so at least some in Chicago may be able to deduct that 11% sales tax, LOL.)

Renters pay property taxes. It's built into the cost of rent. The landlord has to pay taxes on the house or apartment, so that cost is passed on to the renter.

So one cannot say that renters are getting out of paying property taxes. They just don't pay them directly.

(I'm a renter for the next 6-9 months and my rent is more than my former mortgage, escrows included for a smaller apartment 1300 square feet vs my 1600 square foot home, but better school district.)

Again, I have no problem with paying taxes. I just want to know that I'm getting good government and little waste, and I don't want to subsidize those who are unwilling to help themselves.

I agree, there are more and more manufacturing jobs leaving the US.

However, it seems that as a percentage of GNP, our imports are one of the lowest in the world. (I've posted the link before, so search for my User Id number and GNP or GDP for the link.

So while I don't think things are perfect, I do believe that things are not dire at this time.

Would I like to see more manufacturing here? Yes and no.

I like low priced goods, but I also recognize that we need to employ the citizens of our nation.

I do agree that if we keep losing high paying jobs at rates faster than workers are retiring, then we will have issues.

We are already faced with potential inflation, further spurred on by the ever weakening dollar.

However, the upside for manufacturing is that a weak dollar makes it harder to import and easier to export.

I certainly trust the market, in the long term, to make better decisions than the government.

That's why I'm against most government programs and in favor of letting the market place decide.
 
Income tax is a way for our government to gain revenue without earning it. If they need more revenue they do not have to perform better just change the rules. The threat of having to earn a living must scare every politician right down to his/her core.
 
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because it's more fun to tax the "rich" or "wealth" guy that owns a luxury car, or boat, or airplane.




I won't roll my eyes, but very little real revenue is generated by luxury taxes. It's more a PR thing. I really find it hard to believe that anyone spending 300k on a decent boat refused to buy it due to some luxury tax.





No, go ahead and roll your eyes, you're right. Luxury taxes are a roll your eyes kind of thing. They don't raise any real revenue, they just ---- off the people paying them, and are a ploy to make the pols look like they have stuck it to the evil rich. The problem with silliness like this is that a rich guy can just wait it out until the tax is dropped, but if you are a light plane manufacturer or a boat maker that has a payroll to meet, you might not be able to wait out that drop in orders until the tax goes away. That's why I say taxes like this don't hurt wealthy people at all, they just run off more jobs we can't afford to lose.


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The cold hard truth is that somebody else does pay for darn near all of it. And a lot of these people have not even been born yet, because as skewed as we are to taxing rich folks, we still spend way too much - we don't have enough rich folks.





Funny. We never had a lot of rich folks. What we had was a solid middle class that carried all the weight. Now that we've allowed that to be gutted ...there's less money to pay the bills. But the bills are still coming for military, infrastructure, education, etc. Do you expect poorer people to pay more?






We still don't have a lot of rich folks - we've downgraded what it means to be rich, to make it pc to soak a larger number of people, because, as you correctly point out, the middle class is being killed off. Of course we can't soak the poor - there is nothing much there to be had, but they have to pay something, and it has to be enough to make them take interest in whatever they are being made to pay for.

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... is corrupt ..income based taxes are the most assured way to reach into every corrupt individual's wallet. As they lie and manipulate ..play their games ..help their pals, they have to cut themselves in the bleeding process.




I do think taxation has been corrupted for political ends, but I strongly disagree that the way to tax income or wealth is from an income tax. It's too hard to track and too easily manipulated. There may not even be taxable income, but a tax on consumption can't be avoided if it's collected with the purchase price. It's the low hanging fruit of taxes, the same way real property is nailed, but a stock brokerage account isn't. One is easy to see and assess a levy against it, the other just isn't.

A consumption tax would be fair, because once you take out food and housing, everyone can choose whether or not to spend. We won't see a fair tax because you can't buy votes with it.

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Hey, I'm no Robin Hood ..






Not trying to suggest that you are. I agree that allowing the destruction of the vast middle class has killed the goose that was laying the golden eggs.
 
The closer knit a community is, the less tax can be collected, since more barter of services occurs. The closer a community is, the less government it needed. The natural goal of government, therefore, is to make people afraid of one another, and keep them separate and living each in their own little boxes, interacting only through a taxable money system.
 
oilyriser,
I sat down with my parents and worked that one out a few years ago.

Three families could live comfortably on two incomes, provided that the non rat racers grew fruit and vegetables, provided child care, provided education and aged care services.

If you barter down under, you are supposed to declare it as part of your taxable income.

http://www.ato.gov.au/businesses/content.asp?doc=/content/42198.htm

I'm a renegade for mowing my elderly neighbour's grass and receiving an occasional bottle of wine for my efforts.
 
"The closer knit a community is, the less tax can be collected, since more barter of services occurs. "
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Communities provided the original social programs and people were embarrased and had too much pride to continually take from their neighbors. It now has become a part of some cultures with a third or fourth generation of charity cases living off the government dole.
 
I dont know Alabama tax code, but when I was down there for a fewmonths, I came to learn that tax was 8 or 8.8 (I forget) percent on EVERYTHING, including food. Made our then recent tax increase in NJ from 6-7% on non necessities (no tax on necessary items) more palatable.

The thing is, it worked in Auburn because people wanted to live and exist in Auburn. It worked in NJ because (despite the jokes), NJ is one of the best states to live in, all things considered, and people want to live there. Ditto the Philadelphia tax bit, and NYC...

From visiting my brother twice last year, it seems that Chicago is in the same situation... people want to live there. If they want to be there, and havethe dimes, then they will live there, 0% tax or 11% tax. For big items theyll make a trip somewhere else (heck, for big items I buy in Delaware at 0%), or use the internet - that is the nature of the modern, connected world.

So, all in all, if it is government paying itself back (via the welfare folks buying at a higher tax rate, per Al's mention), then so be it. If it is a method of squeezing out the people who are the so-called riff-raff from the sities, so that more well to do people will want to re-inhabit these areas, so be it.

And if cities still have growth despite higher taxes, then there is a natural economc demand, and if the growth of the city is high, then it is an indicator that the 'price' is not high enough!

Not that I want to pay a higher tax rate, but Im in London right now, where everything is double the cost of the US, and taxed at 17.5%, and people love it... I guess the opportunity cost of the goods and taxes dont outweigh the ability to live there and consume... and the problem with this is what?????

Im all for reasonable taxes, and Im more for reasonable use of these taxes. I have no problem using things like welfare for keeping the riff raff from robbing my home (essentially its purpose), and no problem letting the government try to recoup some of its funds via a higher tax of the collectors. Unsustainable because of the nature of the program? Perhaps. but so are most of the behaviors of ALL of the population and government...

JMH
 
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