Do you really want a flat tax?

[PainTrain]

Say you've got a guy who makes 30k /year, and monthly brings in $2500 gross. Now instead of taxing this mans gross income, whaty would happen if you instead taxed his net after adjusting for only the most necessary and unavoidable of expenditures? This man has a rent he must pay worth $650/mo, has a family of three and pays close $400/mo in groceries (food, diapers, living essesntials...). Subtract those from his monthly gross income of $2500 and he's left w/ $1450.

Under the current system of taxation, this man's gross income falls (hypothetically) within a 25% tax bracket and must pay approximately $650 in taxes (I suppose just for the sake of simplifying the illustartion we will omit considerations like dependant deductions, etc..) on his gross income. But since the man cannot avoid the expense of living essentials , he is in effect being taxed at the rate of ~44% on his "usable" income. ($650/$1450net=~44%) If we were to discuss the application of a flat tax, the standard of taxation would most fairly be applied using the "guy" as the basis since wealthier individuals income far exceeds the metting of living essentials.

Now certainly this illustration could afford to be refined more and undoubdetdly scrutinized or criticized and I hope that's exactly what occurs. The point of the illustration was to point out how rediculous a notion of a flat tax would be since it so often hailed at the expense of the current, more progressive system. I appreciate all constructive debate!

John

 

[CADsortaGUY]

What about people who own their own homes - thus having no real monthly expenditures on "rent" or "mortgage"? Does the homeowner then get taxed at a higher rate than someone who makes similar income and has similar other living expenses?

CkG

 

[charrison]

Originally posted by: PainTrain
Say you've got a guy who makes 30k /year, and monthly brings in $2500 gross. Now instead of taxing this mans gross income, whaty would happen if you instead taxed his net after adjusting for only the most necessary and unavoidable of expenditures? This man has a rent he must pay worth $650/mo, has a family of three and pays close $400/mo in groceries (food, diapers, living essesntials...). Subtract those from his monthly gross income of $2500 and he's left w/ $1450.

Under the current system of taxation, this man's gross income falls (hypothetically) within a 25% tax bracket and must pay approximately $650 in taxes (I suppose just for the sake of simplifying the illustartion we will omit considerations like dependant deductions, etc..) on his gross income. But since the man cannot avoid the expense of living essentials , he is in effect being taxed at the rate of ~44% on his "usable" income. ($650/$1450net=~44%) If we were to discuss the application of a flat tax, the standard of taxation would most fairly be applied using the "guy" as the basis since wealthier individuals income far exceeds the metting of living essentials.

Now certainly this illustration could afford to be refined more and undoubdetdly scrutinized or criticized and I hope that's exactly what occurs. The point of the illustration was to point out how rediculous a notion of a flat tax would be since it so often hailed at the expense of the current, more progressive system. I appreciate all constructive debate!

John

MOst flat tax plans i have seen have no tax on the first 15-20k of earned income.

 

[Dissipate]

I don't believe in a flat tax because I do not believe the government has the right to know someone's income. However, I have come to realize that as long as your income is in U.S. Dollars the government will have your nuts in a vice in terms of taxation. It can literally tax anything it wants to and has since the economy adopted U.S. Dollars as the medium of exchange.

The process basically works like this:

1. The Federal Reserve prints the money.

2. The economy makes the money valuable by accepting it as payment for goods and services.

3. The IRS proceeds to extract the money after the economy adds value to it.

You see, it is quite simple, if someone has not been paid the money as wages it has no value, this is why the government issues the money to banks first and then waits for a business to pay it out in wages before it extracts it. This goes for fines as well.

The fact that the government controls the economy's medium of exchange makes it much much easier for the government to extract wealth from the citizens. Since the government has been bestowed so much power there is no way it is going to give it up. For not only does it use the tax code to generate revenue but it has also employed it in a social engineering scheme, giving tax breaks for people who have "positive" behaviors and penalties for "negative" behaviors.

I have said this so many times I am virtually blue in the face: all of this talk about changing the tax code is futile, the government will NEVER relinquish all the power it has gotten through taxation. It loves to use the tax code for social engineering, it can never get enough money for its programs and frankly it figures since you use and accept U.S. Dollars as your medium of exchange it figures there is nothing you can do about it.

The only time the government will lose its power, is when it loses its power to tax. The only time it will lose its power to tax is when the economy rejects government issued currency and uses its own privately issued currency. I wrote an essay about this and posted it awhile back, of course no one listened to me. Ignorance is bliss, eh?

 

[AEB]

You do know that W-2 Forms show your income and we dont have a falt tax. Sot hat aspect wouldn't change flat tax wont pass because its fair and the Victicrats in this country arent about being fair

 

[Strk]

Originally posted by: CADkindaGUY
What about people who own their own homes - thus having no real monthly expenditures on "rent" or "mortgage"? Does the homeowner then get taxed at a higher rate than someone who makes similar income and has similar other living expenses?

CkG

It would be nice if you could really own a house

 

[Dufusyte]

Another way the gov "taxes" us is by printing excessive amounts of money: by inflation all our dollars become worth less.

The gov should abolish the income tax, sales tax, and every other tax, and just print dollars whenever it needs them, and that amounts to an "inflation tax" on everyone equally.

 

[PainTrain]

Originally posted by: CADkindaGUY
What about people who own their own homes - thus having no real monthly expenditures on "rent" or "mortgage"? Does the homeowner then get taxed at a higher rate than someone who makes similar income and has similar other living expenses?

CkG

Well if the homeowner doesn't have to worry about the added financial burden of a $1k+ house note then big deal if they can't "claim" it because they're not burdened as much to begin w/. Besides, don't get me mistaken, I'm not in any in support of a flat tax unless it were applied to net income after such expense considerations. But in that case it would be more of a lopsided burden on the upper class and less so that usual on the middle and lower.

 

[ElFenix]

Originally posted by: PainTrain

Originally posted by: CADkindaGUY
What about people who own their own homes - thus having no real monthly expenditures on "rent" or "mortgage"? Does the homeowner then get taxed at a higher rate than someone who makes similar income and has similar other living expenses?

CkG

Well if the homeowner doesn't have to worry about the added financial burden of a $1k+ house note then big deal if they can't "claim" it because they're not burdened as much to begin w/. Besides, don't get me mistaken, I'm not in any in support of a flat tax unless it were applied to net income after such expense considerations. But in that case it would be more of a lopsided burden on the upper class and less so that usual on the middle and lower.

i think very few people in any class, even the uppermost, actually own their own home.

 

[HeroOfPellinor]

1. A flat tax hits everyone in equal proportion == equality == good.
2. As I understand it, any plan involving a flat tax necessitates that tax loopholes be sewn up which would mean, among other things, a tax on the gross and not the net meaning no pretax investment shelters, etc. This, in turn, requires a major chopping of the tax rate since that rate will be getting applied to a much bigger number. The IRS virtually goes away as raw payroll numbers can be used to determine the vast majority of people's tax obligations. The overall effect would be everybody but the wealthiest 10% or so paying less and those in the top 10% paying more, BUT also having the bulk of their money free and useable before they're too old to enjoy it. It's more complicated when you consider sales of stock, a non-taxable limit, etc...but that's the gist. End result is a win for everyone and 100% equality of taxation so nobody can really b!tch.

 

[dirtboy]

Originally posted by: PainTrain
has a family of three and pays close $400/mo in groceries

I spend that much a month for myself. I must be doing something wrong! :Q

 

[Tripleshot]

The law of tything, an ancient tax if you will, is 10% of your first income(as apposed to the law of sacrifice of your first born of the flock or the best of your crop). I think that is a good enough tax and if everyone did it without trying to cheat one way or another, the government that is supposed to take care of the general population with services and governing would be held to that level, never to borrow against it, invest it or otherwise dispose of it for anything than its purpose, providing for the common good of the people, then that kind of flat tax I can support. Having a known quanity of my disposable income, even if it be 90% or even 80% is better for me to manage than this fiasco called April 15 every dang year.

 

[Orsorum]

Equality is good as long as you're screwing over the top 20%.

 

[Spencer278]

Originally posted by: Orsorum
Equality is good as long as you're screwing over the top 20%.

Equality and fair is always reality you may claim that a flat tax is fair for what ever reason, and I could claim that a 100% tax on all income over 20K is fair because that way every has the same amount of income.

 

[Orsorum]

Originally posted by: Spencer278

Originally posted by: Orsorum
Equality is good as long as you're screwing over the top 20%.

Equality and fair is always reality you may claim that a flat tax is fair for what ever reason, and I could claim that a 100% tax on all income over 20K is fair because that way every has the same amount of income.

No, you couldn't, because people doing unequal work would be getting equal pay. That's not equality.

 

[HeroOfPellinor]

Originally posted by: Orsorum

Originally posted by: Spencer278

Originally posted by: Orsorum
Equality is good as long as you're screwing over the top 20%.

Equality and fair is always reality you may claim that a flat tax is fair for what ever reason, and I could claim that a 100% tax on all income over 20K is fair because that way every has the same amount of income.

No, you couldn't, because people doing unequal work would be getting equal pay. That's not equality.

Pay is the reward for your value. Some people are paid 100x for doing 1/100th the work of other people because their value is higher. Want more pay...increase your value...not your work.

 

[Orsorum]

Originally posted by: HeroOfPellinor

Originally posted by: Orsorum

Originally posted by: Spencer278

Originally posted by: Orsorum
Equality is good as long as you're screwing over the top 20%.

Equality and fair is always reality you may claim that a flat tax is fair for what ever reason, and I could claim that a 100% tax on all income over 20K is fair because that way every has the same amount of income.

No, you couldn't, because people doing unequal work would be getting equal pay. That's not equality.

Pay is the reward for your value. Some people are paid 100x for doing 1/100th the work of other people because their value is higher. Want more pay...increase your value...not your work.

(bad phrasing on my part, and I thought about it after I wrote it; intellectual as well as physical skill and exertion is to be considered part of "work")

 

[HeroOfPellinor]

Originally posted by: Orsorum

Originally posted by: HeroOfPellinor

Originally posted by: Orsorum

Originally posted by: Spencer278

Originally posted by: Orsorum
Equality is good as long as you're screwing over the top 20%.

Equality and fair is always reality you may claim that a flat tax is fair for what ever reason, and I could claim that a 100% tax on all income over 20K is fair because that way every has the same amount of income.

No, you couldn't, because people doing unequal work would be getting equal pay. That's not equality.

Pay is the reward for your value. Some people are paid 100x for doing 1/100th the work of other people because their value is higher. Want more pay...increase your value...not your work.

(bad phrasing on my part, and I thought about it after I wrote it; intellectual as well as physical skill and exertion is to be considered part of "work")

Na, I just read wrong...what you wrote makes sense.

 

[PainTrain]

Scarcity of resource, in this case a particular skill or credential, is what creates value. You suggest that if "one" isn't pleased with their lot in life, then "one" should simply drop what they're doing and pursue self enrichment through education and training. You can't claim "one" isn't working hard, likely they're working much "harder" than the other "one" who's value is greater. Now if this "one" you refer is as generalized as it appears, then you suggest that everyone should acquire "the" skillset that the "other one" has and therefore enrich their standard of living. Although if everyone actually did this, the skill set would lose its scarcity and therefore its value. No patter how you parse it, value is going to be determined by scarcity and scarcity may be shifted but never removed. What I'm trying to say is no matter the circumstance, there's always going to be many more people of lesser "value" than those of greater value earning more and doing less. So naturally in the interest of the much more burdened majority, the tax code should favor these individuals to help equalize the disparity of burden.

 

[Orsorum]

Originally posted by: PainTrain
Scarcity of resource, in this case a particular skill or credential, is what creates value. You suggest that if "one" isn't pleased with their lot in life, then "one" should simply drop what they're doing and pursue self enrichment through education and training. You can't claim "one" isn't working hard, likely they're working much "harder" than the other "one" who's value is greater. Now if this "one" you refer is as generalized as it appears, then you suggest that everyone should acquire "the" skillset that the "other one" has and therefore enrich their standard of living. Although if everyone actually did this, the skill set would lose its scarcity and therefore its value. No patter how you parse it, value is going to be determined by scarcity and scarcity may be shifted but never removed. What I'm trying to say is no matter the circumstance, there's always going to be many more people of lesser "value" than those of greater value earning more and doing less. So naturally in the interest of the much more burdened majority, the tax code should favor these individuals to help equalize the disparity of burden.

What is a burden, exactly? What is the incentive to bring oneself to that higher standard if they don't get a reward?