A conversation about taxation

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A conversation on FB about levying a tax on all visitors to America led me to this rebuttal, which details the problem discussing almost anything online.
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The commentator wrote:

In 2012, I started contacting my Senator Johnny Isakson’s office about a revenue-generating idea I had to help defray the costs of Homeland Security. In a nutshell, I proposed that every NON US CITIZEN attempting to legally enter this country by foot, car, truck, train, plane or ship be required to pay a $100 security processing entry fee. For most, it could easily be built into the price of a plane, train or ship ticket. This multi-billion dollar revenue generator would have cost US taxpayers virtually nothing to implement and would have offset much of the cost of our border security. After months of no answers, and repeated written and phone re-requests, this is the answer I got from his office. I never once mentioned “immigration” in my messages to him. I have also included my final correspondence to him which, needless to say, never received a response.

To which I replied – well let’s see – in 2016, there were around 75.9 million international visitors to the U.S. If instead of a visitor tax we could have a FTT, “Financial Transaction Tax” which charges a fee of 0.01% of the value to transfers of stocks, bonds, etc. A well-designed financial transaction tax (FTT)—is a small levy placed on the sale of stocks, bonds, derivatives, and other investments—would be an efficient and progressive way to generate tax revenues. Gross revenues from a well-designed FTT would likely range from $110 billion to $403 billion. A levy on visitors would affect 76 million people per year, while the TFF would affect at most several thousand investors. While the FTT would be a BENEFIT to society by slowing down the frequency of trades and encouraging longer-term investing, the visitor levy would have ZERO positive effect on society.

He replying: “Another revenue generator for national security not placed on the backs of US citizens.

I said I prefer levies be attached to elements that do NOT directly benefit American citizens in general. Those policies that aid only a small portion of it are different, especially if they are of the “already privileged” variety. Or taxes that are counter-productive in a civil society. I’d much rather there be a few less billionaire hedge-fund manager, less volatility in the Stock Market, and greater emphasis on long-term investments. Whereas a tax on visitors runs counter to these principles. Every first-tier country in the World is trying to INCREASE tourism, not penalize it !!, We tax cigarettes, alcohol, even food; but hesitate to tax those with private jets, yachts, and billions in inherited wealth which they had no part in creating.

He said: “These visitors are utilizing US resources to enter this country. Why should they do this for free? I feel fair,y confident in saying that it costs our government well in excess of $100 to process through every citizen who enters our borders. I have gladly paid exit fees to be able to leave some of the hellholes on earth I have visited.”

As to why we should not add a “visitor tax” to all tourist visits, it is simply because they are already PAYING to visit here. Tourism is a $1.04 Trillion Dollar industry. Secondly, this notion of exploiting the “Other” for our own systemic failings is the root cause of much of our system’s dysfunctionality.

And he wrapped it up by saying: “Do you think they won’t come if it costs $100 more to be safe? Why should we pay for them? Ever go to Jamaica? You pay to get in, you pay to get out. This is not a novel idea. New Zealand has a departure tax. It used to be that you got to the airport and paid it. You didn’t pay, you didn’t get on your plane. Now it is built into the ticket.

Finally, after seeing the photo, I wanted ot close with this: “There already are taxes and in/out fees applied to most airline tickets for both domestic and international flights, generally about 7.5% of the ticket value. Jamaica, Egypt, the UK, and others already charge higher rates. My opposition is to the implementation of a regressive tax justifiable, as in your plan, only due to it being applied to “Others” visiting the US, since the domestic “Us” plays no part in it except potentially being an indirect beneficiary. An FTT is IMHO a far superior revenue source…and it’s clearly not easily perceivable as jingoistic or exploitative.

He replied: ” I’m tired of US taxes on US citizens. If foreigners want to come here they can pay the freight of all the security heaped on us since 9/11. It’s just that simple to me.”

And I’m “tired of” paying taxes while there are many who can’t, many who don’t want to, and many permitted to escape taxation entirely. I want equitable taxation where every entity that participates in our economy pays into it. That includes religious institutions, sports venues, “non-profits”, estate heirs, all domestic and foreign corporations doing business in America, and progressive taxation that matches taxation rates to public interest and utility. That means a private individual with a jet or yacht gets to pay MORE than the guy with a beat-up clunker and inner tube, or a hedge fund manager gets to pay MORE than a salaried man doing a similar job. We have computers running 2-5 hundred million code line applications, while our current Internal Revenue code is less than 50 million lines, so devising a system of responsible taxation for every entity is within our capability.

Another commentator wrote: “Sounds like income redistribution? Why not eliminate all taxes then create one federal sales tax with no exemptions?”

To which I replied: “The biggest problem with a “flat tax” based solely on consumption ignores the principle that basic living costs for food, housing, transportation, health care, dental care, et al can consume 90% of a wage earner’s income, and less than 0.01% of the income of a millionaire; but both are NOT equal users of the highways, electrical grid, military, Federal and State offices, Municipal services, et al. Taxing visitors based on “the threat they are to our security” is a bad joke. We would be better served to restrict any travel, or dealings with Saudi personnel, remembering that 19 men affiliated with al-Qaeda. 15 of the 19 were citizens of Saudi Arabia, and the others were from the United Arab Emirates (2), Egypt, and Lebanon. So if you were to argue we should restrict travel of young males from those countries I might be more inclined to agree with your premise. Remember there are 195 recognized countries in the World, and DOMESTIC terrorists have been MORE responsible for the death of American citizens than have foreign nationals…especially if we restrict the sample size to only during the past 50 years. Your plan would “punish” citizens of 190 countries for the one-time actions of citizens of five.

And to jump ahead of the pending rebuttal: – According to the State Department, there are 113,431,943 valid passports in circulation, which means 36% of Americans own a valid passport (and therefore 64% do not) And to fend off “too young to need one” argument – All children must present a valid U.S. passport for international air travel. This rule applies regardless of age, including infants and newborns. … If you’re traveling to Canada, minors 15 and younger may cross land or sea borders without a passport, but a certified copy of a birth certificate is necessary.

Further on the unequal use of National resources: the United States still maintains nearly 800 military bases in more than 70 countries and territories abroad, which are essentially meaningless to Joe SixPak; but very important to American corporations and wealthy individuals. Most international travelers are in the “top tax brackets” and will not feel any substantive pain from standard departure taxes; but they will respond to being treated with disdain.

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The End…Fini…No Mas…this train is at the station

 

 

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