4 ms·

I think it's a valid question though. In my mind, the closest thing to a fair tax law is one that applies evenly to everyone, like UBI. Consider a flat 10% inc

by umvi 6y ago

I think it's a valid question though. In my mind, the closest thing to a fair tax law is one that applies evenly to everyone, like UBI. Consider a flat 10% income tax applied evenly regardless of socio-economic status. If you made 1M, then you pay $100K. If you made $10K, you pay $1K. If you made $0 or less, you pay 0. That's it. In some senses that is very fair - everyone pays 10% of their income, no exceptions. It's this ultra-convoluted labyrinthine system of laws/exceptions that has allowed the wealthy people and companies to find so many loopholes. In my mind, just like simple software code is harder to exploit than spaghetti code, so simple laws are harder to exploit than spaghetti laws.

dlp211 6y ago
It only seems fair if you don't understand the marginal utility of dollars (some dollars are in fact far more valuable than others) and marginal propensity to spend.
metiscus 6y ago
Flat taxes are often criticized for failing to be progressive and that argument has some merit. As an example, 1 dollar in tax means more to someone making 10k than it does to someone making 100k.
- umvi 6y ago
  That's true, one drawback is that it isn't progressive, but I would argue that the massive simplification of the tax law would allow the government to bring in much more money than it currently does, which it can then divert to social services for those who most need it. As an example of a working implementation of this system, The Church of Jesus Christ of Latter Day Saints effectively taxes all their members at a flat 10% of their annual income, and I thought I read somewhere the church is both debt-free and has a crazy amount of money in the bank ($100B+). Even though the poorest members still pay 10% and it impacts them more than Mitt Romney-type members, the poor members can then go and receive assistance from the church (rent money, food, etc.) if they need it. Of course, with a church people voluntarily give their money whereas with the government people do everything they can to keep their money, so perhaps it wouldn't be as effective as I think it would be. However, what is very clear to me is that the current tax law needs to be much, much simpler.
  - t-writescode 6y ago
    Are you familiar with the "Rules for Rulers" video by CGP Grey on YouTube? [1] In this video, it is argued that complicated tax law is the method by which democracies reward their particular "keys to the kingdom" - so the complexity is a feature, not a bug, and will be very difficult to undo; so "would all the government to bring in much more money than it currently does" may not be the goal. [1] https://www.youtube.com/watch?v=rStL7niR7gs https://www.youtube.com/watch?v=rStL7niR7gs

by umvi 6y ago

dlp211 6y ago

It only seems fair if you don't understand the marginal utility of dollars (some dollars are in fact far more valuable than others) and marginal propensity to spend.

metiscus 6y ago

Flat taxes are often criticized for failing to be progressive and that argument has some merit. As an example, 1 dollar in tax means more to someone making 10k than it does to someone making 100k.

umvi 6y ago
That's true, one drawback is that it isn't progressive, but I would argue that the massive simplification of the tax law would allow the government to bring in much more money than it currently does, which it can then divert to social services for those who most need it. As an example of a working implementation of this system, The Church of Jesus Christ of Latter Day Saints effectively taxes all their members at a flat 10% of their annual income, and I thought I read somewhere the church is both debt-free and has a crazy amount of money in the bank ($100B+). Even though the poorest members still pay 10% and it impacts them more than Mitt Romney-type members, the poor members can then go and receive assistance from the church (rent money, food, etc.) if they need it. Of course, with a church people voluntarily give their money whereas with the government people do everything they can to keep their money, so perhaps it wouldn't be as effective as I think it would be. However, what is very clear to me is that the current tax law needs to be much, much simpler.
- t-writescode 6y ago
  Are you familiar with the "Rules for Rulers" video by CGP Grey on YouTube? [1] In this video, it is argued that complicated tax law is the method by which democracies reward their particular "keys to the kingdom" - so the complexity is a feature, not a bug, and will be very difficult to undo; so "would all the government to bring in much more money than it currently does" may not be the goal. [1] https://www.youtube.com/watch?v=rStL7niR7gs https://www.youtube.com/watch?v=rStL7niR7gs