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UBI is just an excuse to do the real fix, and that's tax the wealthy and the corporations their fair share. It's ridiculous my tax rate is over 30% while wealt

UBI is just an excuse to do the real fix, and that's tax the wealthy and the corporations their fair share. It's ridiculous my tax rate is over 30% while wealthy people has it at 15%, and Amazon has it at 0%. That's the real problem! Yang wants to give people #1kBro so they can shut up about the real issue here is tax fairness.

gnarbarian 7y ago
Good idea. How about a flat tax with no loopholes? Seems fair to me.
- realtalk_sp 7y ago
  What's the rationale for a flat tax over progressive? I believe that an ideal tax system should properly reflect that the value of a marginal dollar is inversely correlated with income/wealth in a nonlinear fashion. But I'm open to having my mind changed.
  - gnarbarian 7y ago
    One point is that "fairness" is highly subjective. One can perform many contortions to justify their own definition of what they perceive as "fair". Personally I like a flat tax because it drastically simplifies the tax system and removes the loop holes that wealthy people who can afford accountants use to achieve the lower effective tax rate stated in the root comment. It also deletes the tax prep Industry and a significant majority of the IRS, these Ultimately act as drag in our economy for arguably a net negative benefit.
    - fzeroracer 7y ago
      $10,000 of a million is worth less to the millionaire than $10 to the poor person with only a thousand to their name. A flat tax isn't fair unless every other form of expense was flat as well. Which means rent would have to be some percent of your income and the same for power, healthcare and so forth.
      - gnarbarian 7y ago
        You aren't actually responding to my argument. I'm arguing for a more effective and efficient tax system which would ultimately result in outcomes you ostensibly support. I'm done here it's new year in an hour and I'm not going to spend it arguing. ;)
        xchaotic 7y ago
        I’m pretty sure flat tax was done before and people cheated on that too so it doesn’t remove the need for IRS and enforcement in general. Even if other forms of tax are not fair the immediate problems that causes are nicer problems to have than not enough revenue from flat tax.
    - atq2119 7y ago
      The loopholes and complexity you mention are completely orthogonal to the tax progression, though. The tax progression is pretty much the simplest part of any tax code anywhere in the world already, so targeting that as the thing to simplify is either stupid or hypocritical. The loopholes and complexity lies in the fact that, in order to account for people who are self-employed, you typically want to allow subtracting certain kinds of expenses from people's incomes for the purpose of tax computations. That's where the mess starts because then people start playing games with how those expenses are classified and structured, and wealthier people can afford to employ expert players of those games, making the whole game unfair from the very beginning. That in itself should be justification for a progressive tax code. It'd be awesome if we could remove those subtractions from the tax code, because that would be the way to really simplify things. Unfortunately, it's also a really bad idea because it would severely punish low-margin activities, and from a societal point of view, we actually want most economic activity to be low-margin (because that provides the highest value to the end-user/consumer). So we're stuck in a world where we'd like to simplify the tax code, but doing so requires diving deep into the nitty-gritty details of how it all works. And for people who have that knowledge, it's more profitable to play the game by selling their knowledge to the aforementioned rich people so most of them end up doing that instead of taking up the thankless political work of actually simplifying things. At least, that's how the incentives are playing out today.
- lalaland1125 7y ago
  It really depends on the metric you are using to measure fairness. Yes, a flat tax is fair on a purely dollar level, but it is completely unfair from utility standpoint in that the worse off suffer greater reductions in utility. The key thing to remember when thinking about the utility of money is that the utility of money is not linear. Going from $50,000 a year to $25,000 a year very significantly degrades your quality of life while going from $2,000,000 to $1,000,000 will have a much more minor impact. This is what causes the main issue with flat taxes. The problem is that at the end of the day, flat taxes are simply very inefficient in that they cause much more suffering for less revenue compared to progressive taxes.
thrower123 7y ago
Depends heavily on your state, which no federal tax is ever going to fix. I'm always going to be less taxed than in Maine, so long as NH has no income tax. Not to mention sales tax.
roenxi 7y ago
I agree with your overall point that this result is backwards to what people probably want. That being said the situation is hardly ridiculous. Eg, To a pretty reasonable first approximation, all of Amazon's income is either going to be (1) distributed to shareholders and trigger income/capital gains tax or (2) invested in making goods cheaper for amazon's customers. It isn't immediately obvious that it is a good idea to tax a system designed to get goods to people cheaply. The money Amazon reinvests in itself is in the short term all about making life better for its customers, not its owners. In the long term that reverses, but the reversal triggers additional tax events. > It's ridiculous my tax rate is over 30% while wealthy people has it at 15% The wealthy will be paying much more tax than you though. In raw amounts, the wealthy are doing much more to run the government financially than you are by orders of magnitude. It isn't immediately laughable. A billionaire is making an absurd contribution vs. other taxpayers even at a 5%. And again, that part of their money isn't going towards themselves, it is difficult to consume that much in real resources in a year. It is likely going to investing in things that other people want. There is no obviously-right or obviously-wrong with tax. Systems are complicated.
- mwilcox 7y ago
  In reality Amazon is accumulating cash faster than it can spend it, same as the rest of big tech. If it had things to reinvest it into it wouldn't be such a problem
  - throwno 7y ago
    Once your business is accumulating cash faster than it can spend it, it's time to pay a dividend.
- fzeroracer 7y ago
  > The wealthy will be paying much more tax than you though. In raw amounts, the wealthy are doing much more to run the government financially than you are by orders of magnitude This also has a disproportionate effect on the rest of the government, however. The wealthy clamor for tax cuts because they already pay more than everyone else (and as long as income disparity exists, this is going to be a fact, so it's not really much of an argument) which in turn means said tax cuts can break the bank so to speak. Which results in cuts to systems that the poor and less wealthy rely on to live, things such as basic schooling or financial aid. In turn, that money that they do get tends to go towards things that entrench their power. Politicians, mainstream media, things such as that. I personally have not heard a strong argument for not taxing the wealthy and corporations more, because for all the tax cuts we've seen we're still in dire straits when it comes to dealing with poverty and healthcare. So clearly something isn't trickling down here.
icelancer 7y ago
Amazon's tax rate is not 0%. Their payroll tax bill for any given month is more than any and all of the taxes you will pay in your lifetime. To say nothing of the many other taxes they pay.
- jacquesm 7y ago
  Payroll taxes are for the most part paid by the employer on behalf of the employee. That's not Amazon's tax bill. Amazon's tax bill is what they would pay over their profits at year end and they do what they can to pay nothing at all, like almost all other multi-nationals.
- dragonwriter 7y ago
  Payroll tax, including the nominally “employer” portion, is really a tax on worker pay (the employer portion just makes the rate seem lower; for an honest accounting, it would be counted in both employee pay and employee taxes) as it comes out of what the employer is willing to pay for the work.
  - maehwasu 7y ago
    It effectively raises the price the company has to pay and thus lowers profits.
    - PaulDavisThe1st 7y ago
      It's functionally shows up as a cost, but that doesn't make it a tax. Consider: if a company had no profits at all, then for some period of time it would still (1) pay its employees (2) pay the payroll tax on behalf of those employees. The amount of payroll tax is 100% determined by employee compensation, not corporate profit (even if those two are indirectly connected). You're more or less arguing that employee compensation is a tax too, since it also "raises the price the company has to pay and thus lowers profits".
      - maehwasu 7y ago
ubiopinion 7y ago
Downvoted to the max here wonder why which demographic l also. No problem #1kBro sigh...

gnarbarian 7y ago

Good idea. How about a flat tax with no loopholes? Seems fair to me.

realtalk_sp 7y ago
What's the rationale for a flat tax over progressive? I believe that an ideal tax system should properly reflect that the value of a marginal dollar is inversely correlated with income/wealth in a nonlinear fashion. But I'm open to having my mind changed.
- gnarbarian 7y ago
  One point is that "fairness" is highly subjective. One can perform many contortions to justify their own definition of what they perceive as "fair". Personally I like a flat tax because it drastically simplifies the tax system and removes the loop holes that wealthy people who can afford accountants use to achieve the lower effective tax rate stated in the root comment. It also deletes the tax prep Industry and a significant majority of the IRS, these Ultimately act as drag in our economy for arguably a net negative benefit.
  - fzeroracer 7y ago
    $10,000 of a million is worth less to the millionaire than $10 to the poor person with only a thousand to their name. A flat tax isn't fair unless every other form of expense was flat as well. Which means rent would have to be some percent of your income and the same for power, healthcare and so forth.
    - gnarbarian 7y ago
      You aren't actually responding to my argument. I'm arguing for a more effective and efficient tax system which would ultimately result in outcomes you ostensibly support. I'm done here it's new year in an hour and I'm not going to spend it arguing. ;)
      - xchaotic 7y ago
        I’m pretty sure flat tax was done before and people cheated on that too so it doesn’t remove the need for IRS and enforcement in general. Even if other forms of tax are not fair the immediate problems that causes are nicer problems to have than not enough revenue from flat tax.
  - atq2119 7y ago
    The loopholes and complexity you mention are completely orthogonal to the tax progression, though. The tax progression is pretty much the simplest part of any tax code anywhere in the world already, so targeting that as the thing to simplify is either stupid or hypocritical. The loopholes and complexity lies in the fact that, in order to account for people who are self-employed, you typically want to allow subtracting certain kinds of expenses from people's incomes for the purpose of tax computations. That's where the mess starts because then people start playing games with how those expenses are classified and structured, and wealthier people can afford to employ expert players of those games, making the whole game unfair from the very beginning. That in itself should be justification for a progressive tax code. It'd be awesome if we could remove those subtractions from the tax code, because that would be the way to really simplify things. Unfortunately, it's also a really bad idea because it would severely punish low-margin activities, and from a societal point of view, we actually want most economic activity to be low-margin (because that provides the highest value to the end-user/consumer). So we're stuck in a world where we'd like to simplify the tax code, but doing so requires diving deep into the nitty-gritty details of how it all works. And for people who have that knowledge, it's more profitable to play the game by selling their knowledge to the aforementioned rich people so most of them end up doing that instead of taking up the thankless political work of actually simplifying things. At least, that's how the incentives are playing out today.
lalaland1125 7y ago
It really depends on the metric you are using to measure fairness. Yes, a flat tax is fair on a purely dollar level, but it is completely unfair from utility standpoint in that the worse off suffer greater reductions in utility. The key thing to remember when thinking about the utility of money is that the utility of money is not linear. Going from $50,000 a year to $25,000 a year very significantly degrades your quality of life while going from $2,000,000 to $1,000,000 will have a much more minor impact. This is what causes the main issue with flat taxes. The problem is that at the end of the day, flat taxes are simply very inefficient in that they cause much more suffering for less revenue compared to progressive taxes.

thrower123 7y ago

Depends heavily on your state, which no federal tax is ever going to fix. I'm always going to be less taxed than in Maine, so long as NH has no income tax. Not to mention sales tax.

roenxi 7y ago

I agree with your overall point that this result is backwards to what people probably want. That being said the situation is hardly ridiculous. Eg, To a pretty reasonable first approximation, all of Amazon's income is either going to be (1) distributed to shareholders and trigger income/capital gains tax or (2) invested in making goods cheaper for amazon's customers. It isn't immediately obvious that it is a good idea to tax a system designed to get goods to people cheaply. The money Amazon reinvests in itself is in the short term all about making life better for its customers, not its owners. In the long term that reverses, but the reversal triggers additional tax events. > It's ridiculous my tax rate is over 30% while wealthy people has it at 15% The wealthy will be paying much more tax than you though. In raw amounts, the wealthy are doing much more to run the government financially than you are by orders of magnitude. It isn't immediately laughable. A billionaire is making an absurd contribution vs. other taxpayers even at a 5%. And again, that part of their money isn't going towards themselves, it is difficult to consume that much in real resources in a year. It is likely going to investing in things that other people want. There is no obviously-right or obviously-wrong with tax. Systems are complicated.

mwilcox 7y ago
In reality Amazon is accumulating cash faster than it can spend it, same as the rest of big tech. If it had things to reinvest it into it wouldn't be such a problem
- throwno 7y ago
  Once your business is accumulating cash faster than it can spend it, it's time to pay a dividend.
fzeroracer 7y ago
> The wealthy will be paying much more tax than you though. In raw amounts, the wealthy are doing much more to run the government financially than you are by orders of magnitude This also has a disproportionate effect on the rest of the government, however. The wealthy clamor for tax cuts because they already pay more than everyone else (and as long as income disparity exists, this is going to be a fact, so it's not really much of an argument) which in turn means said tax cuts can break the bank so to speak. Which results in cuts to systems that the poor and less wealthy rely on to live, things such as basic schooling or financial aid. In turn, that money that they do get tends to go towards things that entrench their power. Politicians, mainstream media, things such as that. I personally have not heard a strong argument for not taxing the wealthy and corporations more, because for all the tax cuts we've seen we're still in dire straits when it comes to dealing with poverty and healthcare. So clearly something isn't trickling down here.

icelancer 7y ago

Amazon's tax rate is not 0%. Their payroll tax bill for any given month is more than any and all of the taxes you will pay in your lifetime. To say nothing of the many other taxes they pay.

jacquesm 7y ago
Payroll taxes are for the most part paid by the employer on behalf of the employee. That's not Amazon's tax bill. Amazon's tax bill is what they would pay over their profits at year end and they do what they can to pay nothing at all, like almost all other multi-nationals.
dragonwriter 7y ago
Payroll tax, including the nominally “employer” portion, is really a tax on worker pay (the employer portion just makes the rate seem lower; for an honest accounting, it would be counted in both employee pay and employee taxes) as it comes out of what the employer is willing to pay for the work.
- maehwasu 7y ago
  It effectively raises the price the company has to pay and thus lowers profits.
  - PaulDavisThe1st 7y ago
    It's functionally shows up as a cost, but that doesn't make it a tax. Consider: if a company had no profits at all, then for some period of time it would still (1) pay its employees (2) pay the payroll tax on behalf of those employees. The amount of payroll tax is 100% determined by employee compensation, not corporate profit (even if those two are indirectly connected). You're more or less arguing that employee compensation is a tax too, since it also "raises the price the company has to pay and thus lowers profits".
    - maehwasu 7y ago

ubiopinion 7y ago

Downvoted to the max here wonder why which demographic l also. No problem #1kBro sigh...