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What would happen if we throw out the entire tax code, replace it with a single, flat tax rate for every adult citizen, with zero loopholes, and then institute

by hliyan 8y ago

What would happen if we throw out the entire tax code, replace it with a single, flat tax rate for every adult citizen, with zero loopholes, and then institute some sort of welfare mechanism for those who can't afford to pay?

jacobush 8y ago
That sounds like a recipe for a dystopian future where more and more people are pushed over the edge where they become dependent on the welfare. Then the corporations and the state would together dictate what you had to do to be eligible for the welfare.
CPLX 8y ago
Ok deal. Let’s say 25% flat tax, to pick a random number. Now, 25% of what? Oh wait that’s the problem ain’t it. As the article notes in extreme detail there’s a lot of ways to argue about what is and isn’t income.
PorterDuff 8y ago
The tax rates are probably the simplest part of a tax code. Defining what 'income' really is or what an allowable 'expense' is, not so easy. Should two farmers helping each other out 1099 each other? Can a wealthy but chronically ill executive write off his RN wife's presence on a business trip?
- hliyan 8y ago
  There has to be some way to reduce these scenarios to a set of principles, rather than defining a rule for every single scenario...
  - PorterDuff 8y ago
    It's called tax code. ...and then all the corner cases go to tax court. Thing is, life is more complicated than law.
- abecedarius 8y ago
  This is a big part of why land-value tax sounds like a better idea to me. It wouldn't be immune to complication either, but the scope of required nosiness seems at least less incredibly intrusive. But most of the time, in the course of getting passed, proposed simplifications become additions instead of replacements. It's depressing.
  - PorterDuff 8y ago
    It seems like simplifications don't last long anyway as the real world impinges...plus, the rats always head right for the cheese. To me, it's like the handwaving you hear about simply using a consumption tax. No doubt, people would find an infinite number of ways to game the system toot sweet. Of course, implementing socially desirable behavior via tax law just throws even more complexity in the mix. Generally, I'd say that the larger the government share of GDP, the more opportunity for craziness. If your underlying culture doesn't reign anything in, mayhem results.

by hliyan 8y ago

jacobush 8y ago

That sounds like a recipe for a dystopian future where more and more people are pushed over the edge where they become dependent on the welfare. Then the corporations and the state would together dictate what you had to do to be eligible for the welfare.

CPLX 8y ago

Ok deal. Let’s say 25% flat tax, to pick a random number. Now, 25% of what? Oh wait that’s the problem ain’t it. As the article notes in extreme detail there’s a lot of ways to argue about what is and isn’t income.

PorterDuff 8y ago

The tax rates are probably the simplest part of a tax code. Defining what 'income' really is or what an allowable 'expense' is, not so easy. Should two farmers helping each other out 1099 each other? Can a wealthy but chronically ill executive write off his RN wife's presence on a business trip?

hliyan 8y ago
There has to be some way to reduce these scenarios to a set of principles, rather than defining a rule for every single scenario...
- PorterDuff 8y ago
  It's called tax code. ...and then all the corner cases go to tax court. Thing is, life is more complicated than law.
abecedarius 8y ago
This is a big part of why land-value tax sounds like a better idea to me. It wouldn't be immune to complication either, but the scope of required nosiness seems at least less incredibly intrusive. But most of the time, in the course of getting passed, proposed simplifications become additions instead of replacements. It's depressing.
- PorterDuff 8y ago
  It seems like simplifications don't last long anyway as the real world impinges...plus, the rats always head right for the cheese. To me, it's like the handwaving you hear about simply using a consumption tax. No doubt, people would find an infinite number of ways to game the system toot sweet. Of course, implementing socially desirable behavior via tax law just throws even more complexity in the mix. Generally, I'd say that the larger the government share of GDP, the more opportunity for craziness. If your underlying culture doesn't reign anything in, mayhem results.