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Yeah but a flat tax would be extremely regressive. If you had a simple equation like tax% = x/4 + 10, where x is your tax percentile, politicians could loudly s
by kenning 10y ago
Yeah but a flat tax would be extremely regressive. If you had a simple equation like tax% = x/4 + 10, where x is your tax percentile, politicians could loudly say that they wish to increase or decrease the slope of the line and people would know that increasing slope would mean a more progressive tax.
- jrs95 10y agoIf it had a standard deduction and all investment income was counted the same as wages, it might actually be more progressive than the current system, depending on the exact numbers. Payroll taxes are mainly what affects people at the lowest income levels.
- laughfactory 10y agoI like this. I think our democracy (or whatever we've got now) will continue to crumble until and unless "we, the people" get a sense, individually, of the cost of paying for what we pay for, and our share of the cost. Until that happens there will be no honest discussions about what we really value and prioritize. Your proposal would do that neatly. The system is way out of whack, lends itself to corruption, crony capitalism, rent seeking, and entitlement. We all have our favorite tax breaks (which is why it's been so hard to change), but we really need to get back to basics: every dollar you get is income taxed at some level, and everyone gets some standard deduction, and that's it. No weird industry tax breaks (because, arbitrarily, politicians decided we wanted more, or less, of a certain thing: cars, homes, solar, coal, etc...), just clear numbers we can grapple with.
- legolas2412 10y agoYeah, but the point is correct. Progressive tax rates are fine, but there are tons of weird deductions/tax breaks that can be applied
- rhino369 10y agoIt wouldn't be regressive, it just wouldn't be progressive either.
- barrkel 10y agoA flat tax hurts people with lower income more, because they have less disposable income to begin with - a lower proportion of their income is discretionary.
- Zelphyr 10y agoOne of the aspects of The Fair Tax, which is basically a flat tax, is the idea of a "prebate" - a sum of money (between $4-7K if I recall) that is paid to each taxpayer every year to help cover the basics like bread and milk.
- OrwellianChild 10y agoI mean, great, but now you're back to tax brackets... May as well stick with the graduated system.
- Zelphyr 10y agoI encourage you to read up on The Fair Tax. There are no brackets. There would be a single sales tax rate on all retail purchases. Nothing else. No deductions, no loopholes.
- OrwellianChild 10y agoI understand the concept but can't get behind it because it disproportionately taxes the poor (as a portion of their income). Taxing consumption gives the more wealthy a break since spending doesn't rise 1:1 with income.
- twblalock 10y agoSo it's not really a flat tax -- it's just a tax system with tax credits and fewer brackets than we have now. I'm sure there will be other popular proposals for tax credits and deductions: EITC? Charitable donations? Investment losses? Mortgage interest? If we adopt a flat tax, we will eventually turn it back into the same tax system we have now, for the same reasons we ended up with our current system in the first place -- people like all of the credits, deductions, and exclusions they get now, and they would vote to restore them in a heartbeat.
- paulddraper 10y agoI think you are confusing flat tax (proportional) with poll tax (constant).
- barrkel 10y agoNo, I don't think he is at all. Linearly proportional taxes are regressive both because of the declining marginal utility of income, and the lower proportion of income that's discretionary at the bottom end of the income distribution.
- paulddraper 10y agoI guess I don't know what regressive means anymore. It doesn't mean the poor pay more. It doesn't mean the poor pay more proportionally to income...
- frogpelt 10y agoA flat tax is called regressive because it drastically reduces discretionary income for the poor.
- paulddraper 10y agoBut isn't everything bigger to a small denominator? E.g. the poor recieve me government services relative to discretionary income?
- deleted 10y ago[deleted]
- mtgx 10y agoI understand your point, but it's not nearly as bad as an actual regressive tax. I would support a flat tax over the thousands of loophopes that exist now for rich and wealthy people any day. As the system works now they probably pay even less than what they would pay under a flat tax system.
- nsxwolf 10y agoLet's just have a 1% flat tax, and if government needs more, they can use lotteries.
- Kurtz79 10y agoLike the recent Obamacare repeal debacle has shown, a lot of people believe they have a simple solution to complex issues, until they actually try to implement it.
- nsxwolf 10y agoYour example doesn't make sense. That bill didn't represent a repeal or a simple solution of any kind, just some fairly meaningless modifications to Obamacare that nobody even wanted to vote on.
- a3n 10y ago> Yeah but a flat tax would be extremely regressive. Not really, because everyone who can afford to pay another human being to figure out how to not pay taxes, would now be actually paying N%, reducing the pressure on the rest of us. That they still would have lots of money left over, after paying their taxes, as opposed to most of the rest of us who spend close to every dollar, would not bother me at all. And if you like: 0% up to N$/year, 10% up to M$/year, 20, 30, 35.