FT 13-01: Commonwealth Budget for FY2020 (Debating)

[AustralianSwingVoter]

Passing this budget needs to be our biggest immediate priority. Starting debate on this now.

There's nothing to debate until all state expenditures have been calculated and tallied.

[AustralianSwingVoter]

Passing this budget needs to be our biggest immediate priority. Starting debate on this now.

There's nothing to debate until all state expenditures have been calculated and tallied.

Right, I spoke too soon. Still, we shouldn't leave something this important sitting around.

We have to, because there's literally nothing which can be done or debated about the budget until all 18 states' expenditures have been calculated and integrated into the budget. Which is precisely why the budget has been left sitting around for almost 3 months now.

[AustralianSwingVoter]

those income tax rates are too high, remembering they are on top of federal income tax. The top tax bracket would be paying about 110% in income tax under this proposal.

[AustralianSwingVoter]

those income tax rates are too high, remembering they are on top of federal income tax. The top tax bracket would be paying about 110% in income tax under this proposal.

The brunt of federal income tax brackets are focussed on the upper middle class, with the highest bracket covering everything from the low hundred thousands on up. There's really no reason anyone should be earning in excess of ten million dollars a year; I'm not going to raise taxes for working families holding down two jobs apiece so Rockefellers can continue to exist.

My point is, depending on how we calculate it, we may well be taxing people near 100% of their income in the highest tax bracket, which I personally would rather avoid.
What I would suggest is in addition a small Sales Tax, perhaps 4-5%. Such a Sales Tax would still be the same or less than is currently levied on Sales in all but 4 states. Such a Consumption Tax would still mean Fremont has by far the lowest Consumption Tax rate in the Western World, remembering the average rate in Europe is around 20%.

[AustralianSwingVoter]

☞   Income Taxes                                        
$0K–100K (0%)
$100–250K (5%)
$250K–1M (10%)
$1M–10M (20%)
$10M+ (30%)

☞   Corporate Taxes                                        
$0–100K (0%)            
$100K–1M (20%)              
$1M–10M (40%)                
$10M+ (60%)

☞   Sales Tax                                        
Value Added Tax upon Goods and Services (4%)            

☞   Excise Taxes                                        
Alcohol (10%)
Tobacco (30%)
Gas ($0.20/gallon)
Diesel ($0.00/gallon)

☞   Misc. Taxes
Estate Tax (50%)

Proposing an amendment. If we can get a rough idea of where this would leave us in surplus/deficit terms I'd then be happy to increase/decrease tax rates accordingly.

[AustralianSwingVoter]

Why has the estate tax been slashed? You can't justify that with the same argument re: income, and at present the tax only applies to inheritances after the first $10 million dollars. It's not a huge source of revenue, but if you're going to slash income tax rates for the uber-wealthy you are in no position to be turning away billions of dollars.

The estate rate was a typo. And I'm not slashing Income Tax rates for the uber wealthy. Under my brackets the rate levied is doubled for the high tax brackets (over 1m from 10% to 20%), the difference is that under your proposal the high tax bracket rates are tripled.

I am similarly perplexed as to why you are proposing a cut to the alcohol tax while raising the gasoline tax.

The Alcohol tax is a pure sin tax on bad behaviour, while the gas tax is to encourage manufacturers to produce more efficient cars and consumers to switch to more fuel efficient cars and move to electric cars.

For obvious reasons, I am not a fan of the sales tax, and I'd like to see the math to demonstrate that the original proposal would result in the top bracket forking over 100% of their incomes when combined with federal taxes. (At risk of appearing condescending, the member does realize the 60% rate only applies after the first $10 M?)

A small sales tax of a few percent is entirely reasonable. With a rate of 4% Fremont would still have by far the lowest Sales Tax rate in the OECD. And 90% of Fremonters are already paying state sales taxes that are levied at 4% minimum, with most being far higher. A balance of income taxes and consumption taxes is important in any nation to ensure that the tax system both works to reduce inequality while also incentivising economic growth.

And any complaint about sales taxes being inherently opposed to reducing inequality is utter nonsense. What nations in the world have the highest consumption tax rates? The nordic countries, with their 25% VAT. And as the Nordic economies have long proven, a balance of income taxes and consumption taxes is needed to balance the needs of reducing inequality with increasing economic growth.

[AustralianSwingVoter]

I much prefer the tax plan introduced by Harry Truman, they are much more progressive in their nature. An added VAT and sales tax is a regressive tax on the lower classes, something I won’t have.

It's not an additional sales tax. Almost every state already has a Sales Tax, and under my plan about 90% of Fremonters would see a decrease in their Sales Tax rate, most quite significantly.
And a VAT is not a regressive tax on the poor, that's just a moronic talking point with no basis in reality.

[AustralianSwingVoter]

The sales tax is a flat tax targeting consumption: its effects are thus obviously more keenly felt by the poor (who have little capital to spare) than the wealthy (who are essentially unaffected by it). Picking up the line with regard to behavior incentivized by the tax code, I would much rather discourage wealth inequality than consumer spending —but perhaps that's just me.

A 4% sales tax remains incredibly small. It will still be a significant tax cut for the vast majority of Fremonters. And it is accepted economic fact that consumption taxes boost economic growth. Consumption Taxes incentivise savings and investment, both behaviours that improve the economic welfare of all citizens. Why shouldn't we be encouraging people to save more of their earnings?

[AustralianSwingVoter]

I think that the idea of a regional sales tax is a little silly. I don't think that it's the responsibility of the region to implement sales taxes onto the people. Frémont is a vast region of people who live vastly different lives. I don't think a Californian, a Wyomingite, an Alaskan, an Iowan, and an American Samoan should have the same tax rate. Those five states are quite different when it comes to their economies, structure, and way of living. Be it either a VAT or a traditional sales tax, there isn't a simple one-size-fits-all rate, unless you want to have the states stack their sales taxes on top of the 4%, which defeats the purpose of having it so low. When I go to my local grocery store and buy a soft drink for $1, Black Hawk County and Iowa taxes could kick in and make that $1.04 cup of pop turn into a soft drink that would cost a little more, maybe $1.09 or something like that. Granted, economics and numbers aren't my number one skill, but I think that there could be a caliber of disaster indicated by the presence of a region-wide sales tax in our commonwealth.

We've absorbed all state revenue and expenditures. The entire region is going to have an identical tax structure, and separate states can no longer levy their own taxes. That's why I'm suggesting a small 4% VAT as a least change proposal. It will simply replace the existing sales taxes, and it will still be a sales tax cut for the vast majority of Fremonters.

[AustralianSwingVoter]

Instructions: The vote will last forty-eight (48) hours or until one option has the votes of a majority of sitting MFPs. Mark your ballot to indicate the plan you prefer for adoption with the commonwealth budget for the fiscal year of 2020.

[    ] Option 1: Truman Plan
[ X ] Option 2: Australian Plan

[AustralianSwingVoter]

Objection

[AustralianSwingVoter]

Okay, then, I guess we're voting on cloture. Not sure why an objection was necessary when we already know a majority support's this version of the budget and no new concerns were raised to justify shutting down the government for the first bit of 2020, but hey, I'm not your maker!

I am the opposition after all. My job is to provide opposition to some degree, at least.
There's many things you can criticise me for, but providing opposition as the only non-left member really shouldn't be one of them.

[AustralianSwingVoter]

Nay

[AustralianSwingVoter]

Objection

Withdrawing this because I forgot our budget term is the Calendar Year (rather than the financial year) so I forgot that we go into shutdown in four days time.

[AustralianSwingVoter]

Objection

Withdrawing this because I forgot our budget term is the Calendar Year (rather than the financial year) so I forgot that we go into shutdown in four days time.

No point withdrawing the objection actually, given all 5 members have voted anyway.

[AustralianSwingVoter]

Aye

And I would note that the Honourable First Minister may have been mildly hyperbolic in his fears of this cloture vote threatening a government shutdown, given we have resolved the matter in under 2 hours.