Nearly impossible question on taxes

Okay, here is my scenario. You are in charge of setting the federal income tax. You have only one goal and that is to maximize the amount of money the government will collect in income taxes over the next year. (I don't care if you think it should be that way and I'm not saying it should. That's not the point of this. This is more of a thought experiment.) Here are some rules to boil this down to the simplest form:

1. Everyone pays the same rate of tax on their income, and that includes income from stock dividends and pretty much anything else.

2. There are no state taxes. Assume it isn't in the U.S. if that helps. I never said it had to be in a specific place anyway.

3. Operate under the assumption that nobody cheats on their taxes.

4. There are no deductions or anything. Like I said. I'm making an artificially simple scenario just to keep this focused on the point.

Okay, so you goal is to maximize the government's annual income tax. What is the optimal percentage and what is your basis for thinking that? (And no, it isn't 100%, because there wouldn't really be much point in anyone trying to make money then.)

0 %

0 %

-Austin-

Okay, so now that we've gotten the most illogical answer possible out of the way...

[QUOTE="-Austin-"]

0 %

SpaceMoose

Okay, so now that we've gotten the most illogical answer possible out of the way...

Income tax sucks. Ron Paul for President!

Income tax sucks. Ron Paul for President!

-Austin-

It's funny because I specifically stated that I don't care whether you agree with the goal or not and that wasn't the point...

Ummm..... Can I buy a vowel?

What i would do is decrease the need for the Federal Income Tax then put it at 6% (would prefer zero but you said we have to have it). This would make it so just a small amout of money would be needed to run the government (6% would probably still be huge though).hoola

Once again, I said the goal is to maximize tax revenue. It doesn't matter whether you think it should be the goal or not. Just, supposing it was your goal, what you think the optimal rate would be?...

You can't operate that way. Your rules are clearly wrong. No state taxes...:lol:LJS9502_basic

I said assume it isn't in the U.S. if that helps. Was that somehow not clear?

[QUOTE="LJS9502_basic"]You can't operate that way. Your rules are clearly wrong. No state taxes...:lol:SpaceMoose

I said assume it isn't in the U.S. if that helps. Was that somehow not clear?

Again.....you can't operate that way. Other countries have local taxes to pay. They have deductions I'm sure....I know it's impossible to say NO ONE cheats. LJS9502_basic

Yeah, that's why it's a though experiment. Okay, fine, assume the local taxes still apply if you want. Whatever. It's still a rather difficult question. I'm not claiming to have any good answer for it myself, because I don't.

[QUOTE="LJS9502_basic"]

Again.....you can't operate that way. Other countries have local taxes to pay. They have deductions I'm sure....I know it's impossible to say NO ONE cheats. SpaceMoose

Yeah, that's why it's a though experiment. Okay, fine, assume the local taxes still apply if you want. Whatever. It's still a rather difficult question. I'm not claiming to have any good answer for it myself, because I don't.

100%KG86

...and now we've gotten the second most illogical answer out of the way, even though I already said in the OP why it was illogical...

[QUOTE="KG86"]100%SpaceMoose

...and now we've gotten the second most illogical answer out of the way, even though I already said in the OP why it was illogical...

0% isn't illogical. The idea of the government essentially maximizing it's profit seems illogical to me.

To me Maximizing is to take just what is needed. I am taking the Max of what is needed. I suppose you could put it at 25% but that would hurt the poor people and they might not pay it so i would want lower. Are we supposed to take into account how we want the citizens of our country to like us? hoola

No, the only goal is to maximize the amount of money the government takes in from income taxes. The primary reason I made it a flat rate was to simplify the question down to its most basic elements.

[QUOTE="KG86"]100%SpaceMoose

...and now we've gotten the second most illogical answer out of the way, even though I already said in the OP why it was illogical...

Hey, you wanted to maximise tax revenue.

[QUOTE="SpaceMoose"]

[QUOTE="KG86"]100%-Austin-

...and now we've gotten the second most illogical answer out of the way, even though I already said in the OP why it was illogical...

0% isn't illogical. The idea of the government essentially maximizing it's profit seems illogical to me.

What part of this don't you get? I specifically stated that it doesn't matter if you think that should be the goal or not. I said if it was the goal, what is the solution? You're missing the point entirely.

Hey, you wanted to maximise tax revenue.

KG86

So...you would work if you knew you had to give it ALL to the government?

Okay then...

[QUOTE="-Austin-"][QUOTE="SpaceMoose"]

[QUOTE="KG86"]100%SpaceMoose

...and now we've gotten the second most illogical answer out of the way, even though I already said in the OP why it was illogical...

0% isn't illogical. The idea of the government essentially maximizing it's profit seems illogical to me.

What part of this don't you get? I specifically stated that it doesn't matter if you think that should be the goal or not. I said if it was the goal, what is the solution? You're missing the point entirely.

I'm not missing the point, it's just very stupid. Basically the question is "How high can the income tax possibly be before people just stop working?".

I'm not missing the point, it's just very stupid. Basically the question is "How high can the income tax possibly be before people just stop working?".

-Austin-

So the question is "stupid," so you change the thread into one about your political views instead of simply ignoring the thread, which I suppose is not stupid. Okay.

[QUOTE="KG86"]100%SpaceMoose

...and now we've gotten the second most illogical answer out of the way, even though I already said in the OP why it was illogical...

Actually 100% would be the best answer, then the government could dole out the necessary resources and services communist style.

Anyways, this sound to me like a homework question. A really crappy homework question, the likes of which you'd only see in summer school.

Actually 100% would be the best answer, then the government could dole out the necessary resources and services communist style.

guynamedbilly

:roll: Let's also assume no forced labor, okay?

Eventually 100%. As the tax rate is increased, military forces would become larger. At a certain point, you could force everyone into slave labor. Assuming your civilization didn't have access to firearms.Frattracide

See previous post. Also, that wouldn't technically be income from taxes at that point anyway.

[QUOTE="Frattracide"]Eventually 100%. As the tax rate is increased, military forces would become larger. At a certain point, you could force everyone into slave labor. Assuming your civilization didn't have access to firearms.SpaceMoose

See previous post. Also, that wouldn't technically be income from taxes at that point anyway.

99% would be pretty good too.

[QUOTE="Frattracide"]Eventually 100%. As the tax rate is increased, military forces would become larger. At a certain point, you could force everyone into slave labor. Assuming your civilization didn't have access to firearms.SpaceMoose

See previous post. Also, that wouldn't technically be income from taxes at that point anyway.

If you keep changing the rules, I'm taking my ball and going home. . .

20-25%. Though taxing stock earnings is kind of bogus since that's post tax money you are investing.sonicare

Well, I was kind of looking at the scenario this way: The company brings in X amount of dollars, and all of that money is taxed regardless of who it is paid to. Also, it reduces the loopholes for people who both work at a company and own most of the stock in it.

If you keep changing the rules, I'm taking my ball and going home. . .

Frattracide

It's not income tax at that point, so you changed them yourself.

[QUOTE="SpaceMoose"]

[QUOTE="Frattracide"]Eventually 100%. As the tax rate is increased, military forces would become larger. At a certain point, you could force everyone into slave labor. Assuming your civilization didn't have access to firearms.Frattracide

See previous post. Also, that wouldn't technically be income from taxes at that point anyway.

If you keep changing the rules, I'm taking my ball and going home. . .

Hehe, I laughed.