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It's not a terrible solution. Ideally a flat tax (which pretty much always means a lower rate than high earners pay) simplifies the tax system, and makes high
by Mikeb85 11y ago
It's not a terrible solution. Ideally a flat tax (which pretty much always means a lower rate than high earners pay) simplifies the tax system, and makes high earners less likely to evade taxes. However it doesn't change the fact that really high earners get a lot of their wealth from investments, so in the end they'll still pay a lower total 'rate'. The highest tax burden will still be paid by upper middle-class professionals who have a high salary but few investments.
If governments really want to collect taxes from the ultra-rich, a wealth tax is what is necessary. However that alone poses problems because 'wealth' is not always liquid - do you tax the old lady whose house has appreciated significantly but who doesn't have an income? Do you tax an entrepreneur whose firm is worth several million but hasn't actually realized any significant income?
Anyhow, just a few musings, but the summary is that taxes are hard. Too high and people evade them, too low and the government has a shortfall...
- gnaritas 11y ago> It's not a terrible solution. It's precisely a terrible solution. Yes, taxes are hard, but a solution that punishes the poor (or the not rich) by not recognizing the marginal utility of money is terrible in any form.
- maratd 11y ago> punishes the poor by not recognizing the marginal utility of money What does this have to do with the poor? Are you under the impression your federal tax dollars get redistributed to the poor? Government contractors aren't poor. Do you have any idea what percentage of government proceeds are redistributed to the poor? Do not include social security. That money was taken from them to begin with.
- gnaritas 11y ago> What does this have to do with the poor? Look up what regressive means and what marginal utility means; nothing I'm saying has anything to do with how taxes are redistributed. Flat taxes are inherently unfair, they ignore the marginal utility of money; they are regressive.
- anigbrowl 11y agoAbout 20% goes to 'income support'. There's a slightly partisan-but-fair breakdown here: http://www.heritage.org/research/reports/2014/12/federal-spending-by-the-numbers-2014 http://www.heritage.org/research/reports/2014/12/federal-spe...
- Mikeb85 11y agoThere's pretty much always a minimum amount you need to make to pay taxes, most flat tax schemes are still progressive on the low end. Very few 'flat tax' proponents want to tax the poor (not much money in it anyway). The idea with a flat tax isn't to punish the poor, but to reduce tax evasion on the higher end, and to reduce to burden on the middle class.
- gnaritas 11y agoTaxes should be progressive at all levels, setting a floor to exclude the poor from the unfairness doesn't make it more fair for the guy in the middle income ranges. All flat tax solutions are bad as they are all inherently unfair.
- Mikeb85 11y agoDepends what your definition of 'fair' is. Conservatives think it's 'fair' that everyone pays the same rate. Progressives think it's 'fair' that everyone pays what they can afford. 'Fair' depends strongly upon one's beliefs, and can't be objectively defined.
- gnaritas 11y ago> Conservatives think it's 'fair' that everyone pays the same rate. Which is a position completely ignorant of the marginal utility of money. No, it isn't fair that for one guy 10% could be the difference between getting by and not getting by while for the other guy 10% means no change to his lifestyle all. No, progressives think it's fair that the burden is felt equally and that requires understanding how money works. > 'Fair' depends strongly upon one's beliefs, and can't be objectively defined. Fair does depend on beliefs, but some people's beliefs are objectively stupid. Anyone who denies the marginal utility of money and insists a flat percentage is fair, doesn't understand money and doesn't belong in the conversation just as anyone who believes vaccines cause autism is objective stupid and doesn't belong in that conversation. Everyone has opinions, that doesn't make them equal.
- 11y ago
- afarrell 11y ago> taxes should be progressive at all levels Are you proposing replacing the tax bracket system with an algebraic equation? I wonder if that would be more or less confusing. I guess if you just showed people "this is what the tax curve looks like", it would be obvious that: 1) They need to use a calculator or look up in the tax table. 2) You don't actually lose money when your income goes from $37,449 to $37,451.
- fweespeech 11y agoRegressive taxes are inherently economically destructive. I'm sorry but its just a terrible idea. You can get a 0 deductions system with a progressive tax system too, it isn't some magical property of a flat tax.
- Mikeb85 11y ago> Regressive taxes are inherently economically destructive. The current system, in practice, is progressive up to the upper middle class, and regressive after that. Flat tax rates aren't about taxing the poor (you can still build in income exemptions and most flat tax schemes do), but reducing tax evasion by the rich...
- muzz 11y agoIn theory, the AMT exists to prevent that
- fweespeech 11y ago1) That isn't how regressive taxes work. Stating its regressive on rich ppl is simply a failure to understand what the word means in context of taxation. 2) The proponents of flat tax schemes frequently set the exemptions low enough to raise the tax burden on the poor.
- gozur88 11y agoThe problem with the flat tax is it doesn't address the problem. What makes the tax code complicated is determining exactly what constitutes taxable income. Dealing with different tax brackets is simply a matter of looking a number up in a table.