ext_70363 ([identity profile] jon-leonard.livejournal.com) wrote in [personal profile] steuard 2009-04-23 10:36 pm (UTC)

Or maybe the problem is that taxes are too low in Nevada, that he was tempted to move?

Clearly the outcome is suboptimal, in that he'd have rather not moved, and California would rather have had the tax revenue. But the structure of taxes doesn't have that degree of moral clarity.

Consider 3 cases:

There's a tax on cigarettes: Am I denying California its just due by not smoking? That's a punitive tax, and as citizens we're supposed to avoid the taxed behavior (mostly).

The income tax: This is a revenue tax, and we're supposed to keep earning (mostly).

The gas tax: This is a proxy for a usage tax to maintain the roads. It seems silly to say I'm evading this tax by (for example) walking to the high school to volunteer, but the intent really is a mixture of adjusting usage habits and raising revenue.

In some cases the intent is unclear, and even the law itself: There's a derivatives trade that I'd consider, but the IRS's position on it is, more or less, that Congress was unclear when they made the law: Until a court clarifies it, no one knows how it should be taxed.

It sounds like you have a theory of the social contract which includes a moral obligation to pay taxes (beyond the legal obligation), and, opportunity permitting, I'd enjoy discussing that with you. (There's a line in the tax form for "I'd like to pay this much more tax than required." Do you do so? Why or why not?)

I take something resembling a pragmatic view: The tax code is what it is, and we should comply with the law as it is, and at the same time consider how the law should be changed to improve things. That includes a pragmatic view as to how society as a whole will react to the changes: Many emotionally appealing alternatives turn out not to work well in practice.

In terms of this example: If the money "belongs" to California, why was it not taxed when the stock was obtained? Or maybe the taxes should have come out of the corporate earnings that justified the stock price (that tax was paid). Or maybe the earnings of whoever bought the stock? Presumably those taxes were paid too.

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