Reviews for Raising Money For Education

The average rating for Raising Money For Education based on 2 reviews is 4 stars.

Review # 1 was written on 2014-11-27 00:00:00 Benjamin Watts totally stressful to read. I thought it would be so easy to disagree with his premise that it is more fair to tax consumption than income, but he's got some really sound arguments that point to how little I understand the accumulation and maintenance of wealth. The key that I never understood was the process of borrowing against appreciating assets to have a source of cash that is untaxed. Also somewhat interesting, of the 36 authors that he recommended books by, only one was a woman. Yikes. The recurring criticism of taxing spending and not savings is addressed here: (p. 40) "only the rich save to a large extent. Those of us who are not rich consume a high percentage of our income - approaching 100 percent or even more for those who live off of credit cards. Some people therefore argue that a consumption tax is regressive: the poor and middle classes will pay a higher percentage of their income in tax, because the savings of the upper classes won't be taxed at all. But this argument ignores the attractive possibility of a progressive consumption tax like the Fair Not Flat Tax." My initial assumption that by progressive consumption tax he would tie the sales rate to the value of the object purchased, whether through brackets that focus on luxury items, or through some fancier assessment of tax - like instead of value x 1.07 = cost to consumer, it becomes something like value^1.07. Instead, McCaffrey proposes consumption be summed over an annual period, then assigned a bracket, in the same way income tax is assessed today. The two barriers to implementation that I would like to see him are (1) the sense that what we spend is more private than what we earn, and (2) how on earth do you total consumption over a year? Sales tax would have to be collected rather than at POS, something like total withdrawals from bank account. The mechanism McCaffrey recommends is remarkably similar to the current collection of personal income tax. p. 98 "On a Fair Tax form you will start with the W-2s that you already receive each January telling you what your wages were for the year before. You will also have D-2 forms to reflect your net borrowing for the year; you would get these from credit card companies and banks. Finally you will have S-2 forms for your savings accounts... Contributions to Trust Accounts will appear as positive numbers on S-2s; withdrawals will appear as negative numbers... W-2s (Wages) + D-2s (Debts) - S-2s (Savings) = Taxable Consumption." A passage on Roth IRAs is particularly confusing - p. 50 "Roth IRAs are funded with after-tax dollars, but the return on the savings is then tax free." That's just not true. The other part that I struggle with is the assumption that "savings is good for us all," for individuals and for societies. Yes, savings creates jobs indirectly via the expectation that it tugs down interest rates and opens up access to capital. But an increase in spending is a far more immediate economic catalyst. It's odd that the author and I start from the same position ideologically - that growing inequalities of wealth in our society are bad and tax policy is the best tool to curb that - but he can be so off-message - with the "death tax," etc. There's somewhere where we just don't sync, and I'm having trouble putting a finger on it. p. 85 "Recall from our brief tour of tax history in chapter 1 that the top marginal income tax bracket in America has been as high as 94 percent. The top bracket stayed at or above 90 percent throughout the 1950s and lingered at 70 percent following John F. Kennedy's 1963 tax cut all the way to Ronald Reagan's presidency. It doesn't take a rocket scientist to to see that there is something wrong with rates that high: many Americans would rather stay home at the margin (or go bowling) than see ninety or seventy cents out of every additional dollar they earn go to the government. "If we aim for fairness by having high marginal rates under an income tax, we have to live with these distorting effects. Those citizens capable of earning the highest wages or reaping the greatest returns to capital would be the most discouraged from working overtime or taking on a second job to help their families get ahead. In many two-parent households a second wage earner, most often the wife, would face heavy tax rates on paid work outside the home> It seems as though we are in the grip of a fatal trade-off between fairness and efficiency. Fairness suggests higher tax rates; efficiency counsels against them." So what? Are we incentivizing leisure time? spending time with family? volunteer work? single-income households? evening the pay grade between CEOs and front-line workers? He has far from sold me on this point. and let's talk about debt. p. 132 "Debt is taxed when, but only when, it is used to consume things... You are not taxed again when you pay off your debts, and you are also not taxed on the interest you pay on them. All interest ought to be deductible, and certainly home mortgage interest will be." hmmmm It was great to have this conversation with someone who also obsesses about fairness in the tax code - and learn how it was that income via capital gains came to be privileged, and the ongoing discussion around exemption levels in the gift and estate taxes. In reading this I was grateful to have spent the time I have studying the federal personal income tax so that I didn't get tripped up over the discussions about basis, etc. a beautiful quote from former IRS Commissioner Sheldon Cohen p.112 "If you know the position a person takes on taxes, you can tell their whole philosophy. The tax code, once you get to know it, embodies all the essence of life: greed, politics, power, goodness, charity. Everything's in there. That's why it's so hard to get a simplified tax code. Life just isn't simple."

Review # 2 was written on 2019-04-07 00:00:00 Dewijanti Hardi I can feel where he's trying to get at with this, and his idea of a consumption tax based on what is not saved rather than saved is a unique way of approaching it. But he seems to worship the idea of savings being moral, right, and just. How rich people saving will naturally lead to inequality being broken. His opposition to estate taxes because he thinks that unlimited donations to children is fine so long as we tax their consumption misses the point of wealth. He worries about inequality of spending, inequality of lifestyle, that if we curb the extravagance of the rich they'll make less and the poor will make more. He doesn't factor in that after a million dollars or so, all that money is just status. People get money to have it and hold it. The specious argument that saving is a moral good is weak at best, and all the more amusing in his mention of how the last time we had that problem was the Great Depression.... The bottom line is some parts of his concept make sense for a better alternative to the income tax, albeit the implementation to make things fair to the poor will be more difficult. But his blind faith in frugal rich people lowering inequality and the elimination of an estate tax is just...no.