4 ms·

I couldn't disagree more. In my experience, complexity breeds corruption whereas simplicity exposes it. For example, how would you game a flat tax?

by rapind 9y ago

mschuster91 9y ago
> For example, how would you game a flat tax? Imagine a car manufacturer, headquartered in Germany where all of the R&D happens, and most sales outside of Germany. Germany has invested lots of money into its education system so that the car manufacturer has a very large pool of talented and qualified personnel, but with a cash flow tax the manufacturer pays the most of his taxes in the respective countries, thus depriving the German state of the resources it needs to provide the companies in Germany with qualified personnel. In the current scenario Germany loses tax money due to evasion, in the flow tax scenario it would lose tax money because it's paid where the cars get sold. edit: whoops, I misread you - flat tax, not flow tax. A flat tax scheme would still put an inadequate load of taxes on poor-ish people. With a 20% tax, someone with 1M $ of yearly income has to pay 200.000 $ in taxes and takes home 800.000 $ while a poor person with 20.000 $ income pays 4.000 $ in taxes and takes home 16.000 $. The rich person most likely won't notice the 200.000 $ being gone, but the poor person will immediately notice it. It's not a question of gaming the system here, but of social fairness.
- rapind 9y ago
  Whereas I think charging one person 20% and another person 50% is unfair. Is the person paying 50% using public services that much more? Maybe there's an argument to be had for a forced charity fee, but that can be accomplished with one flat deduction across the board (say 50k). Again a simple rule that applies to everyone equally. H&R Block will hate it. A flat tax is simple, more fair, and efficient. Plus it's pretty hard to dodge when there are no loopholes / 50 different forms to fill out and process.

I couldn't disagree more. In my experience, complexity breeds corruption whereas simplicity exposes it. For example, how would you game a flat tax?

by rapind 9y ago

I couldn't disagree more. In my experience, complexity breeds corruption whereas simplicity exposes it. For example, how would you game a flat tax?

mschuster91 9y ago

> For example, how would you game a flat tax? Imagine a car manufacturer, headquartered in Germany where all of the R&D happens, and most sales outside of Germany. Germany has invested lots of money into its education system so that the car manufacturer has a very large pool of talented and qualified personnel, but with a cash flow tax the manufacturer pays the most of his taxes in the respective countries, thus depriving the German state of the resources it needs to provide the companies in Germany with qualified personnel. In the current scenario Germany loses tax money due to evasion, in the flow tax scenario it would lose tax money because it's paid where the cars get sold. edit: whoops, I misread you - flat tax, not flow tax. A flat tax scheme would still put an inadequate load of taxes on poor-ish people. With a 20% tax, someone with 1M $ of yearly income has to pay 200.000 $ in taxes and takes home 800.000 $ while a poor person with 20.000 $ income pays 4.000 $ in taxes and takes home 16.000 $. The rich person most likely won't notice the 200.000 $ being gone, but the poor person will immediately notice it. It's not a question of gaming the system here, but of social fairness.

rapind 9y ago
Whereas I think charging one person 20% and another person 50% is unfair. Is the person paying 50% using public services that much more? Maybe there's an argument to be had for a forced charity fee, but that can be accomplished with one flat deduction across the board (say 50k). Again a simple rule that applies to everyone equally. H&R Block will hate it. A flat tax is simple, more fair, and efficient. Plus it's pretty hard to dodge when there are no loopholes / 50 different forms to fill out and process.