Flat Income Tax

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Orsorum

Lifer
Dec 26, 2001
27,626
3
81
Originally posted by: cavemanmoron
the federal Sales tax makes more sense to me'

you buy something,you pay tax
the more you buy the mopre tax you pay,
if you buy a $50,000 Hummer 2
and i buy a $2,000 used rusty pickup, well who can afford to pay more tax
It's not about who can "afford" more, a person who lives in Southern California who makes $500,000 a year could be considered making the same amount as someone who makes $100,000 in south King County, near Seattle Washington.
 

Ferocious

Diamond Member
Feb 16, 2000
4,584
2
71
A flat income tax would effectively raise the tax on poor people and lower the income tax on upper class people.

There is no need for something like that.
 

Kaiynne

Member
Feb 23, 2003
74
0
0
i just did some quick calculations with the numbers in the posted article, and i worked out that if you were to increase the amount of tax paid by just those top 400 people to a little over pre Reagan levels, you would be able to abolish taxes for almost 50% of the country. And those top 400 people would still net over $20,000,000 a year each, which is still almost a thousand times more than someone making an average salary of $27,000 a year.

It makes those tax cuts that were recently passed seem slightly strange i think. Especially when you consider that those top 400 people are paying only around 20%-30% tax anyway.

But i still agree with all those people who say the tax system is too complicated, it gives too much leeway for people to skimp out on what they should be paying.

One way of simplifying taxes would be an exponential salary cap instituted at around 1 million a year. So you get to keep every penny of your first million and then your tax burden goes up exponentially from there, say at 50% per million. so you get $500,000 of your next million, and the $250,000 and then $125,000 and so on. I think that the limit would be somewhere around 20 million at which point you would be making less than a dollar for every million you earned.

Conversly you pay 0%on 1 million, 25% on 2 million, 42% on three million, 53% on four million etc.

i will try to work out what you would actually net on a $20,000,000 salary but i could be wrong.
i think it would be roughly $2,015,623 which is 89%.

So i would wager that tax revenues would increase, consumers would have more money almost all of which they put into the domestic economy in some form or other, which would lead to a stronger economy, without having to wait for the trickle down effect which is at about 200 years and counting by my clock.

I look forward to a heady debate of what will inevitably be called if not outright communist, then at least socialist. But really it is a very speedy and economical way of liberating all of the capital that is currently trapped in off shore banks and tax havens.

Godspeed little greenback, Godspeed.
 

Orsorum

Lifer
Dec 26, 2001
27,626
3
81
Nothing like a little healthy socialism. Who do you think helps fund innovation and investment in this country?
 
Feb 3, 2001
5,156
0
0
Orsorum, we call them Venture CAPITALISTS. It sure as hell isn't and never will be the Socialists funding such activity; Socialism is ALL ABOUT the "Stability" of society, and stability is NOT fostered by by new innovations that shake up markets.

In any case, the Flat Tax is the right thing to do because it treats everyone EQUALLY under the law, unlike the current Graduated tax. The question you should be asking isn't whether the $30,000 a year wage EARNER would be able to buy braces or whether the $300,000 a year wage EARNER would be able to buy his daughter a Mercedes. The questions are simply this:

1) Does one man have the right, for ANY reason, to use FORCE to steal the legally owned property of another?
2) Does the $30,000 a year wage earner's NEED give him the RIGHT to steal from the $300,000 a year earner?

Here's how you can support the current tax system:

Anser YES to the questions above.

Jason
 

magomago

Lifer
Sep 28, 2002
10,973
14
76
I think a flat tax is good because there are no loopholes.

The only problem is that I think charities would suffer and it would be enough to make me consider otherwise - people in general don't donate to charities because they are feeling altruistic...
 

KenGr

Senior member
Aug 22, 2002
725
0
0
Originally posted by: Kaiynne
i just did some quick calculations with the numbers in the posted article, and i worked out that if you were to increase the amount of tax paid by just those top 400 people to a little over pre Reagan levels, you would be able to abolish taxes for almost 50% of the country. And those top 400 people would still net over $20,000,000 a year each, which is still almost a thousand times more than someone making an average salary of $27,000 a year.

I'm not quite sure how you did your calculations, but close to 40% of the people in the US already pay no net income taxes in that, even if they file and show taxable income, the earned income credit more than makes up for it. Right now, the lower 50% pay only 3% or 4% of total income taxes. So it's obvioius that that could be eliminated with only a small increase in taxes on higher income citizens. They philosophical question here is whether it makes sense, in the wealthiest nation of the world, to create a system where only a minority pay income taxes.

The whole argument that the tax cuts were overly biased to the rich starts with an assumption that taxes on lower income tax payers were too high. I would dispute that since they were (and are) almost non-existent.


 

kaizersose

Golden Member
May 15, 2003
1,196
0
76
Originally posted by: sandorski
Originally posted by: kaizersose
Originally posted by: sandorski
I don't understand the romanticism with the Flat Tax. Sure, it appears to be "fair", but is the Graduated Tax "unfair"?

Before you answer that, are the rich getting poorer? Are they not in fact getting richer and the poor getting poorer? Wouldn't a Flat Tax without other significant changes just accelerate current trends?
it is not the responsibility of the governement to redistribute wealth in this country. that is called socialism. the entire basis of the "american way" is that everyone is guaranteed an opportunity at success. that does not guarantee success nor does it mean someone will take care of you if you fail--just that the possibility exists..

while some people in this country are lucky enough to inherit their livelyhood, a majority of the rich have, and continue to work extremely hard for their income
Government is what the people make it be. The "American Way" is first and foremost the "People", not an economic system. Though, over time the economic system has adopted the "American Way" as it's own.
and we dont want to make our government socialist. this country was founed on the basis of opportunity and at the risk of sounding like an old windbag, thats how it should stay. why do you think so many immigrants still want to come to the united states? europe is much more socialist than we are, and last time i checked, their immigration rates arent close to ours. the united states is the most politically and economically free country on the planet and that has made it the most successful.
 

Zebo

Elite Member
Jul 29, 2001
39,398
19
81
Originally posted by: DragonMasterAlex
Orsorum, we call them Venture CAPITALISTS. It sure as hell isn't and never will be the Socialists funding such activity; Socialism is ALL ABOUT the "Stability" of society, and stability is NOT fostered by by new innovations that shake up markets.

In any case, the Flat Tax is the right thing to do because it treats everyone EQUALLY under the law, unlike the current Graduated tax. The question you should be asking isn't whether the $30,000 a year wage EARNER would be able to buy braces or whether the $300,000 a year wage EARNER would be able to buy his daughter a Mercedes. The questions are simply this:

1) Does one man have the right, for ANY reason, to use FORCE to steal the legally owned property of another?
2) Does the $30,000 a year wage earner's NEED give him the RIGHT to steal from the $300,000 a year earner?

Here's how you can support the current tax system:

Anser YES to the questions above.

Jason

BS learn what the "discount rate" means then come talk.


1) Does one man have the right, for ANY reason, to use FORCE to steal the legally owned property of another?
Yes. Because that one man could not have made a dime on the free market without any of the following government supports of the free market which costs MONEY: And you using any of these services without what has been democratically judged you should be paying is theft from the other payees who democratically elected to have these services. Whos the thief?

Printing the very dollar bills with which people trade.
Public roads.
Rural electrification.
Government subsidized telephone wiring.
Satellite communications.
Police protection.
Military protection.
A criminal justice system.
Fire protection.
Paramedic protection.
An educated workforce.
An immunized workforce.
Protection against plagues by the Centers for Disease Control.
Public-funded business loans, foreclosure loans and subsidies.
Protection from business fraud and unfair business practices.
The protection of intellectual property through patents and copyrights.
Student loans.
Government funded research and development.
National Academy of Sciences.
Economic data collected and analyzed by the Bureau of Economic Analysis.
Prevention of depressions by Keynesian policies at the Fed (successful for six decades now).
Dollars protected from inflation by the Fed.
Federal Emergency Management Agency.
Public libraries.
Cooperative Extension Service (vital for agriculture)
National Biological Service.
National Weather Service
Public job training.

Don't believe me? Move to Angola, a tax free haven, and let me know how you like thier free market. If you survive the first week, take your so called "venture capital" and open a silicon production facility there or a software engineering firm, and see how well you do. Jez you arn't really so simple minded to be an anarchist are you? You are nothing without the collective.

In any case, the Flat Tax is the right thing to do because it treats everyone EQUALLY under the law, unlike the current Graduated tax. The question you should be asking isn't whether the $30,000 a year wage EARNER would be able to buy braces or whether the $300,000 a year wage EARNER would be able to buy his daughter a Mercedes. The questions are simply this:
We don't tax people we tax dollars. Bill Gates and I pay the same tax on every level of dollars we earn. How is this not fair?
 

PlatinumGold

Lifer
Aug 11, 2000
23,168
0
71
here are the keys to a good tax code.

easily enforceable.
easily calculated.

unfortunately our system of government does not allow for this. our collection of taxes, income tax, Social Security, property tax, "sin" taxes, Gas taxes, sales taxes, state taxes, city taxes makes it difficult to make it simple.

IF you want a truly flat tax, all states and municipalities will give up all of their tax powers and allow one central government to do all the taxing and then distribute it to the states based on population.

a flat federal tax would be beneficial because it would simplify the federal income tax (single largest part) of our taxes.

We could significantly reduce the IRS as taxes would be easier to calculate and fewer "Loopholes" and here is the problem.

neither democrats or republicans are truly willing to give up their loopholes.

that's why you don't get support for a flat tax from either party.
 

dexvx

Diamond Member
Feb 2, 2000
3,899
0
0
While I was for the flat tax at first, I have come to go against it. On the outside, it seems fair that a person would pay an equal percentage across all fronts. However, the usage of taxes is very arbitrary by nature. While a rich person gets the shaft on health care (especially medicare) versus poorer people, he gets overwhelming advantages in other areas. Wealth people should pay more based on the following premises

Wealthy citizens use more taxation money, on AVERAGE, spent by the Federal and State governments, by porportion to the poor people. United States business owners enjoy the fruits of American military power to enforce international copyright laws and gain bargaining power in economic deals with foreign nations and economic incentives in foreign nations. Businesses, as well as people, enjoy the highway and other critical infrastructure (police, fire, education, etc) set up by the municipalities.

While it is impossible to measure just how much Federal money each individual spends, it is a fact that wealthy entrepeneurs use more as a percentage than someone flipping burgers at McDonalds. That is why they have to pay more as a percent.
 

zephyrprime

Diamond Member
Feb 18, 2001
7,510
2
81
How much manpower is wasted finding loopholes through thousands of pages of tax codes?

I see it as eliminating that waste and reducing a burden on the economy.

It would reduce Congress?s ability to use the tax code as a social welfare tool and return it to its main purpose which is gathering revenue for the government?s operation.
But what would keep congress from making a bunch of deductions and stuff for the new tax system too? Law could prevent them...but wait...Congress can change the law.

The graduated system is simple enough if you only consider the graduated part. But then consider all the deductions and the fact that capital gains are taxed differently and you've got a mess.
 

PlatinumGold

Lifer
Aug 11, 2000
23,168
0
71
Originally posted by: zephyrprime
How much manpower is wasted finding loopholes through thousands of pages of tax codes?

I see it as eliminating that waste and reducing a burden on the economy.

It would reduce Congress?s ability to use the tax code as a social welfare tool and return it to its main purpose which is gathering revenue for the government?s operation.
But what would keep congress from making a bunch of deductions and stuff for the new tax system too? Law could prevent them...but wait...Congress can change the law.

The graduated system is simple enough if you only consider the graduated part. But then consider all the deductions and the fact that capital gains are taxed differently and you've got a mess.
that's where a VAT would avoid that issue. vat is more or less a national sales tax.
 

Zebo

Elite Member
Jul 29, 2001
39,398
19
81
Originally posted by: zephyrprime
How much manpower is wasted finding loopholes through thousands of pages of tax codes?

I see it as eliminating that waste and reducing a burden on the economy.

It would reduce Congress?s ability to use the tax code as a social welfare tool and return it to its main purpose which is gathering revenue for the government?s operation.
But what would keep congress from making a bunch of deductions and stuff for the new tax system too? Law could prevent them...but wait...Congress can change the law.

The graduated system is simple enough if you only consider the graduated part. But then consider all the deductions and the fact that capital gains are taxed differently and you've got a mess.
I have a feeling many people here have never been around people with real money is thier problem. Sure your small business owner and wage earner is getting screwed but people without "income" perse pay little to nothing. Hell just bury your investment corp in an offshore shell and reinvest here and pay nothing.. There are thousands of loopholes for the creative.
 

sandorski

No Lifer
Oct 10, 1999
69,422
4,805
126
Originally posted by: kaizersose
Originally posted by: sandorski
Originally posted by: kaizersose
Originally posted by: sandorski
I don't understand the romanticism with the Flat Tax. Sure, it appears to be "fair", but is the Graduated Tax "unfair"?

Before you answer that, are the rich getting poorer? Are they not in fact getting richer and the poor getting poorer? Wouldn't a Flat Tax without other significant changes just accelerate current trends?
it is not the responsibility of the governement to redistribute wealth in this country. that is called socialism. the entire basis of the "american way" is that everyone is guaranteed an opportunity at success. that does not guarantee success nor does it mean someone will take care of you if you fail--just that the possibility exists..

while some people in this country are lucky enough to inherit their livelyhood, a majority of the rich have, and continue to work extremely hard for their income
Government is what the people make it be. The "American Way" is first and foremost the "People", not an economic system. Though, over time the economic system has adopted the "American Way" as it's own.
and we dont want to make our government socialist. this country was founed on the basis of opportunity and at the risk of sounding like an old windbag, thats how it should stay. why do you think so many immigrants still want to come to the united states? europe is much more socialist than we are, and last time i checked, their immigration rates arent close to ours. the united states is the most politically and economically free country on the planet and that has made it the most successful.
Freedom and gaurantees of freedom are the main reasons people emigrate to the US, not Capitalism.

There is also the issue of Immigration policy. The US has traditionally been very open while Europe very closed to immigration. Europe has only recently(last few decades) began opening themselves to immigration. Socialism/Capitalism is not the reason why people choose one over the other, for most it's just the opportunity and who provides that opportunity to escape from a dire situation.
 

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