Ok. Based on your claim: “Not all income is taxed” and “Olympic prizes should be not be taxed”, the conclusion follows that no income should be taxed. When do you suppose the Wage Earner Tax Elimination Act will be enacted? Soon, I hope.

“The argument that inheritance should not be taxed because one does not know how much one will get is not valid.”

I didn’t make that argument.

The argument that inheritance should not be taxed because one does not know how much one will get is not valid. When money is inherited, you know then how much you are receiving. Just like a bonus at work is taxed even if you don’t know how much the bonus will be until you receive it or even if you are going to receive it. And not doing anything to earn an inheritance is more of an argument to tax it than not to tax it. Bottom line, inheritance received is still income.

We will have to agree to disagree on this issue since neither one of us is going to moved by the other’s arguments and points.

Olympic prizes are not like inheritances.

If you win, you get $$$, very much like income earned at a job where if you do *whatever*, you get $$$.

An inheritance is not anything like this. You don’t know you’re going to get it until you get it. And you don’t necessarily have to do anything in particular to get it.

So no- Olympic prizes are not like inheritances.

I say go back to pre-1986 when taxing Olympic prize money was not done. The taxing of prize money is another power grab by the government.

What do tax rules regarding inheritances have to do with income earned by winning a sporting event?

That definitely looks better. Getting rid of the IRS can only be a good thing. Next step would be to get rid of the Federal Reserve.

“The real problem as I see it is the federal government is too big and does too much. If the federal government was held within its constitutional limits, we wouldn’t need taxes to be very high at all (in the early days, there wasn’t any tax at all; government was funded by duties and tariffs). Basically, all we really need the federal government for is for national defense (note: NOT nation building nor policing the world) and very little else. The states and territories ought to determine criminal and civil laws themselves for the most part.”

A national government can settle disputes between states or if a citizen of one state has a dispute with another state. A national government can also see to it that all citizens are treated equally throughout the nation. There is a few other things but it definitely needs to be limited. Something between the Articles of Confederation and the current Constitution would be better, IMHJO. The current Constitution gives the Executive branch too much power (the anti-Federalists appear to have been correct in this regard). I agree the Federal government is much too big and has been allowed to erode freedoms and person liberties. Also, the larger the Federal government, the easier it is for large corporations and wealthy individuals to rig the system even more in their favor.

“But as long as we have the enormous federal government we have, I think that everyone should have to pitch in one way or another. If the tax rates are not the same, at the very least, the federal government should be prohibited from raising taxes for one class while lowering it for another (i.e. if taxes are raised 1% on the poor, the same 1% raise should also apply to the middle class and the rich). Also, expand the base, lower the rate, and eliminate deductions. Businesses should be neither taxed nor subsidized. No taxes on investments either.”

I’m not entirely sold on proportionately raising or lowering taxes for all income classes. Investment income should be taxed since it is income, if income is going to be taxed (I prefer income not to be taxed).

“Politicians like this class warfare because it takes the attention off them and pits citizens against each other.”

Both sides and parties play this game but the Right, IMHJO, seem to be more diabolical in it.

Do you think it should be taxed as normal income or at a higher rate? Then shouldn’t money inherited be taxed since it is income?

Yes, I agree with that as long as income is to be taxed.

I agree that there is no truly equitable tax system but those who make less can only control so much. After all, they have to eat, have shelter and clothing. There is only so little they can spend on such things. Taxing necessities of life is wrong and regressive. Here in California, groceries are not taxed because to do so is unjust.

I’ve been trying to find a less worse solution but have not yet succeeded.

But as long as we have the enormous federal government we have, I think that everyone should have to pitch in one way or another. If the tax rates are not the same, at the very least, the federal government should be prohibited from raising taxes for one class while lowering it for another (i.e. if taxes are raised 1% on the poor, the same 1% raise should also apply to the middle class and the rich). Also, expand the base, lower the rate, and eliminate deductions. Businesses should be neither taxed nor subsidized. No taxes on investments either.

Politicians like this class warfare because it takes the attention off them and pits citizens against each other.

“Tips
All tips you receive are income, and subject to income tax. This includes tips customers give you directly, tips customers charge on credit cards that your employer gives you, and your share of tips split with other employees.”

I’m well aware that tips are considered income but I asked if you agreed with that.

If taxation is based on spending, the consumer has more control of how much s/he is taxed. Under the Fair Tax, only spending for new products at the retail level are taxed. Why should the government get a bite at the apple every time a good is sold? I think one time is quite enough.

Tips
All tips you receive are income, and subject to income tax. This includes tips customers give you directly, tips customers charge on credit cards that your employer gives you, and your share of tips split with other employees.

“Why tax income at all? IF taxes should exist at all, it should be in the form of a consumption tax. Taxing people on what they produce has never made sense to me.”

A consumption tax (which is a form of sales tax) is also regressive and disproportionately hurts those who make less. Those who make less have less or no disposable income and have very little control of what they have to consume. Even Adam Smith recognized that and felt taxing necessities of life was immoral and unfair.