3 ms·

> But misreporting exceeds 50 percent for certain types of business income, like rental and proprietorship income. The current tax system thus benefits certain

> But misreporting exceeds 50 percent for certain types of business income, like rental and proprietorship income. The current tax system thus benefits certain high earners who accrue most of their income from sources where misreporting is common. This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. However, I seem to remember something about this very issue in history before, and for some reason this period is a theme this morning - something to do with wealthy peasants being an ongoing problematic resitance to policies that promise justice to everyone if they just give up everything. https://en.wikipedia.org/wiki/Dekulakization https://en.wikipedia.org/wiki/Dekulakization The window has not shifted and the crimes of the 20th century are still very much in the minds of people. These guys and the rest of the out of touch Davos crowd basically want to engineer a version of China for the rest of the world. You're never going to guess who won't be giving up their stuff. It is important to express contempt at these people. They show up in every generation, and the results are always the same.

deleted 5y ago
[deleted]
vajrabum 5y ago
How does a simple, flat tax fix not reporting income?
Thrymr 5y ago
> This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. How do simple flat taxes solve the underreporting problem? Surely there is still an incentive not to report rental & proprietorship income if it is not well tracked? Perhaps there is a lower incentive if these mostly affect wealthier people and the marginal rate was lower, but the incentive is still there.
sroussey 5y ago
We have flat taxes now. $1m/yr or $10m/yr makes no difference—same rate.
- eschaton 5y ago
  In fact, your effective rate goes down as you get wealthier, because progressively less of your income is treated as “ordinary income” with respect to the tax code, and there are more options available for paying high-end management firms to structure your wealth in ways that minimize taxation. So the wealthiest people have an effective tax rate of zero.
cogman10 5y ago
> This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. Flat taxes are too penalizing to the poor. They force you to set a rate that the poor can afford (or make tax exemptions for necessities like food) but they further force the government to cut back social programs due to a lack of funding, further harming primarily the poor. It's not about "making every country china". Modest progressive tax codes aren't "take everything" codes. Heck, even the most aggressive wealth taxes I've heard about amount to taking 3% of current networth for people with networths > $50 million. That's not "taking everything" or making everyone "poor". Yet those sorts of taxes would be able to fully fund programs like universal healthcare.
- yownie 5y ago
  >Heck, even the most aggressive wealth taxes I've heard about amount to taking 3% of current networth for people with networths > $50 million. I'd be curious if you could cite a source for this information.
  - cogman10 5y ago
    It was a major part of the Warren platform so easy to google, but here's one source. Let me know if you want more. https://www.cnbc.com/2021/03/01/elizabeth-warren-bernie-sanders-propose-3percent-wealth-tax-on-billionaires.html https://www.cnbc.com/2021/03/01/elizabeth-warren-bernie-sand... Also note this is a wealth and not income tax. When talking about federal taxes and progressive taxes we are generally talking about income tax. A wealth tax solves the problem of millionares/billionares using loop holes to avoid the income tax system/paying low income taxes.
dragonwriter 5y ago
> the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool Strange that flat taxes keep getting proposed by exactly the same people proposing other political social engineering tools designed to entrench the power of established economic elites, which, compared to status quo progressive taxes, is what flat tax proposals they make invariably also do. Every change in public policy is a “political social engineering” tool, and the only time people tell you theirs isn't is when they think you won't like what it is part of trying to engineer. (And its particularly amusing when the supposed reason its is different is that it “lacks flexibility”, when the flexibility in what it replaces doesn't come from the features it replaces, but higher-level features of the political system that are untouched by the proposal, leaving all of the flexibility in place.)
andylei 5y ago
> simple and flat taxes what is a flat tax? is it something like: "everyone pays 5%"? if so, how does that solve the problem of misreporting?
eschaton 5y ago
You say “fair and flat taxes” as if there’s no sort of contradiction there.

deleted 5y ago

[deleted]

vajrabum 5y ago

How does a simple, flat tax fix not reporting income?

Thrymr 5y ago

> This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. How do simple flat taxes solve the underreporting problem? Surely there is still an incentive not to report rental & proprietorship income if it is not well tracked? Perhaps there is a lower incentive if these mostly affect wealthier people and the marginal rate was lower, but the incentive is still there.

sroussey 5y ago

We have flat taxes now. $1m/yr or $10m/yr makes no difference—same rate.

eschaton 5y ago
In fact, your effective rate goes down as you get wealthier, because progressively less of your income is treated as “ordinary income” with respect to the tax code, and there are more options available for paying high-end management firms to structure your wealth in ways that minimize taxation. So the wealthiest people have an effective tax rate of zero.

cogman10 5y ago

> This would be trivially solved by simple and flat taxes, but the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool. Flat taxes are too penalizing to the poor. They force you to set a rate that the poor can afford (or make tax exemptions for necessities like food) but they further force the government to cut back social programs due to a lack of funding, further harming primarily the poor. It's not about "making every country china". Modest progressive tax codes aren't "take everything" codes. Heck, even the most aggressive wealth taxes I've heard about amount to taking 3% of current networth for people with networths > $50 million. That's not "taking everything" or making everyone "poor". Yet those sorts of taxes would be able to fully fund programs like universal healthcare.

yownie 5y ago
>Heck, even the most aggressive wealth taxes I've heard about amount to taking 3% of current networth for people with networths > $50 million. I'd be curious if you could cite a source for this information.
- cogman10 5y ago
  It was a major part of the Warren platform so easy to google, but here's one source. Let me know if you want more. https://www.cnbc.com/2021/03/01/elizabeth-warren-bernie-sanders-propose-3percent-wealth-tax-on-billionaires.html https://www.cnbc.com/2021/03/01/elizabeth-warren-bernie-sand... Also note this is a wealth and not income tax. When talking about federal taxes and progressive taxes we are generally talking about income tax. A wealth tax solves the problem of millionares/billionares using loop holes to avoid the income tax system/paying low income taxes.

dragonwriter 5y ago

> the main problem with fair and flat taxes is they lack the flexibility to be used as a political social engineering tool Strange that flat taxes keep getting proposed by exactly the same people proposing other political social engineering tools designed to entrench the power of established economic elites, which, compared to status quo progressive taxes, is what flat tax proposals they make invariably also do. Every change in public policy is a “political social engineering” tool, and the only time people tell you theirs isn't is when they think you won't like what it is part of trying to engineer. (And its particularly amusing when the supposed reason its is different is that it “lacks flexibility”, when the flexibility in what it replaces doesn't come from the features it replaces, but higher-level features of the political system that are untouched by the proposal, leaving all of the flexibility in place.)

andylei 5y ago

> simple and flat taxes what is a flat tax? is it something like: "everyone pays 5%"? if so, how does that solve the problem of misreporting?

eschaton 5y ago

You say “fair and flat taxes” as if there’s no sort of contradiction there.