QUOTE (GySi @ May 12 2008, 08:56 AM)

I'm not American, so I'm too familar with the tax system but I have a question...
If no one pays tax, who is going to pay for: The army, the schools, police, fire servies and all the other things it goes towards?
That's a really excellent question GySi...
First of all, I don't think anyone reasonable is proposing eliminating taxes. It's not going to happen. What's being proposed is reducing taxes, sometimes substantially.
Now one would think that income tax is the government's sole source of revenue. It's not. In fact, it isn't the biggest piece of the governemt revenue pie and excessive taxes actually inhibit the biggest piece of the government revenue pie: Gross Domestic Product.
It's a simple economic law that has been proven every time its been done: reduce taxes = increase government revenues.
It is a proven, no-brainer methodology that resulted in economic booms in the early 1960's , the 1980's, and in the past 6 years...when Presidents Kennedy, Reagan, and Bush did just that.
If you cut taxes, GDP increases because people are spending, and businesses are investing. The mechanics involved in this paradigm are somewhat complicated, but the results are absolutely concrete. Cut taxes, and the government gets MORE MONEY, not less...thus, they have more to fund essential programs.
Now, realize that police and fire services are funded by state and local taxes, not federal funds (although I'm sure there are some subsidies in there for certain departments). Decreasing Federal tax will provide
more money for the military. As to schools...well, in America, government needs to get out of the business. The largely government-controlled educational system is one of the reasons America has many of the problems it has, and why the standards and quality of education have diminished in the past 4 decades...sometimes at alarming rates...
Allow schools to operate as businesses, and you'll see a hell of a change start pretty quick...but that's another topic for another time!
A thought experiment:
Suppose we cut the Fedearal income tax to a flat or fair level...reducing everyone's tax...including corporate rates(which Reagan did, to incredible benefit during his tenure).
Now, suppose we start drilling for our own oil?
Suppose we build the refineries we've needed for several decades to meet our demands. We create tens of thousands of jobs...we allow companies to invest in methodologies to produce oil and refine it efficiently, and we develop a surplus (which we can and would do). Costs are reduced, demand is met, and what do we do with the excess? We market it. We not only increase the GDP, we increase revenues through EXPORTS to the burgeoning market (China anyone?).
We increase profits, and we use that money to invest, finally, in the research necessary...industry wide (oil companies and auto makers) in alternative sources and technologies for future requirements.
...you see, no serious oil company can do that now...because they don't have the money, and they know where their bread and butter, and the econnomy's is...in oil! Wanna see them do that? Give them their money!Yet, some morons look at oil companies as evil (?), and certain Presidential candidates want to tax them more! These people, whose economic knowledge approximates that of a gnat, think the oil companies are making excessive profits because they're charging more for gasoline...without understanding that oil companies
make less than half of what the Federal Government makes on a gallon of gasoline (~ $0.18/gallon currently, as opposed to the $0.08 on average than an oil company makes(which is nominal at best, profit-margin wise, considering costs)...and the oil companies actually do the work to make the stuff...the government does nothing!). State and local governments make even more on a gallon of gas (You're paying 50 to 65 cents a gallon to people who've done nothing to earn it...!).
They also propose this windfall profits tax (a nonsensical idea in any generation) without realizing that OIL COMPANIES PAY NO TAXES, EVER! The consumer absorbs all taxes levied on oil companies.
Let these folks get into office and you'll see gas prices spike to unheard of levels as soon as they put their proposals for taxes out there. Cut the taxes, and watch the price go down...watch spending go up, watch investment go up, and GDP improve...with a concurrent increase in Federal revenues!
Magic stuff...but thoroughly proven basic economics...