10.02 - I. Taxes a. Mentioned property taxes b. Cutting...

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I. Taxes a. Mentioned property taxes b. Cutting taxes are extremely popular with Americans… Around the world the people who groan about taxes are the peasants and poor who are financially burdened. However our politicians promise tax cuts to middle and wealthy classes i. Taxes are progressive when richer people pay a higher tax than poorer people ii. Taxes are regressive if you pay a larger part of your income when you’re poor iii. Taxes are proportional if everyone pretty much pays the same fraction of their income iv. Throughout the history of USA, most taxes have been sharply regressive 1. Which is why most tax revolts in world history has been by the poor c. Different in USA i. When we talk about tax cuts we are not talking about regressive taxes 1. IE: sales taxes – take a larger portion of poor ppl’s income 2. Payroll Tax: the richer you are more of your income is exempt from payroll tax 3. We are talking primarily about federal income tax, inheritance tax 4. It’s a rhetoric about cutting taxes that mainly fall on the rich 5. We can reduce progressive federal income tax and increase the regressive payroll tax 6. Proposition 13: the Revolt of the Haves ii. Peculiar kind of tax politics 1. Legacy of the American Revolution 2. Suggested that the American response to the stamp act seemed out of scale than the stamp act itself. It seemed out of scale. a. Republican ideology was one reason of this. b. First step down a slippery slope 3. Slippery slope toward the modern state a. During the 18 th century the government got the power to tax the rich for the first time. b. Britain and France were developing as a series of very expensive wars i. Americans wanted to keep power in the local elites to exert local ii. They did not want the extension over them of the modern bureaucracy developed to collect taxes in Britain
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d. One British tax collected in the colonies Navigation Act e. There were taxes in each colony, some more sophisticated than others i. New England: lots of stuff including paper ii. Virginia tobacco f. Key : compared to taxes from Britain, colonial taxes were very low. The taxes were meant to pay for public buildings, officials, paid for the religion, roads, (N.E. school) i. But colony taxes paid a small fraction of the cost of wars ( the really expensive things) 1. Parliament reimbursed the colonies for their spending on the French and Indian War 2. Taxes are low b/c they are only paying for less expensive things g. Britain taxes were much higher i. Land tax on gentry ii. Tax on imports and exports Navigation Acts iii. Excise Tax (Brought most money) Highly regressive, levied on alcoholic beverages, tea, coffee, leather, salt, soap, candles, starch, (basically on a lot of things both luxuries and necessities) 1. Producers passed it on to the consumers 2. After 1817, this tax raised 40% of GB tax revenue, some years it raised as much as 55% 3. Collection by bureaucratic agency—Excise Office— most modern and efficient gov bureaucracy in 18
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10.02 - I. Taxes a. Mentioned property taxes b. Cutting...

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