4 ms·

I think most people who advocate for flat tax advocate for a single bracket: a flat percentage with a single income deduction, which is asymptotically flat. So

I think most people who advocate for flat tax advocate for a single bracket: a flat percentage with a single income deduction, which is asymptotically flat. So e.g. take 15% of (your income - 40k). This would not hurt the poor.

kelseyfrog 5y ago
> This would not hurt the poor. Not sure I follow. I get the first order effects, but I'm hesitant to agree without an explanation of the second-order and systemic-level effects of such a policy.
- dnautics 5y ago
  There are other first order effects that government does (e.g Inflation, arraignments for infractions, vehicle infraction revenue cutting) that drown out those second order effects. Fix those first.
  - kelseyfrog 5y ago
    > that drown out those second order effects What are those?
    - dnautics 5y ago
      You suggested them. The only real one I can think of is price inflation, and that's like nothing next to the destructiveness of the fed. If you don't understand why arraignments for minor violations are awful for the working poor, you've probably never been poor. When I was poor I was lucky enough to not be hurt by arraignments (flexible work hours), but boy did I have sympathy for those people who were relentlessly fucked by that system. There was always at least one of them whenever I had to show up at court, and it wasn't hard to figure out how they got into those situations.
massinstall 5y ago
> This would not hurt the poor. I am always amazed by such statements. Are you sure you have thought this through? What do mean with “asymptotically flat”? As with the poorly understood correlation/causation relationship in statistics, there are many common misconceptions about how absolute and relative amounts influence the result of mathematical calculations. The following example may highlight this: Let’s say a person’s minimum financial need to simply stay alive and sane is $X. Now, take two almost identical people that only differ in their income: A’s income is bigger than B’s. If you tax them both at a flat 15% (or any other rate), the richer will always benefit more from this than the poorer! The reason is because living, eating, and taking part in a society do not come for free. Surprisingly, this is commonly not well understood and it also seems there are proclivities by some fellow rich and comfortable folk to intentionally avoid understanding this. Proof by example: Let’s see what their effective tax is after all the cost to stay alive has been deducted. Excess Income = Income * (1 - 15%) - X Let’s say A’s income is $150k and B’s is $40k, and the minimum amount X required to simply stay alive (not being homeless and having health insurance included) would be $25k. These figures are obviously simplified but anyone can feel free to use their own numbers and repeat the calculation. The general result will remain similar. Then, A’s excess income will be $102.5k and B’s $9k. Relatively speaking, A will have made almost 11.5 times the amount of excess income than B, despite making not even four times as much as B (3.75 to be exact). Excess income will be the only thing both of them can use to save and invest, purchase a house, or use it for all kinds of safety-net building and stress-reducing things.
- dnautics 5y ago
  Everything you wrote is mathematically true no matter how you arrange your tax brackets unless you want brackets with negative marginal post tax income. So what is your point?
  - massinstall 5y ago
    The point is (also mathematically speaking) that a flat tax is less fair to the poor than having a progressive tax with a zero marginal tax for incomes below what’s required for merely surviving (i.e. no tax for people without any excess income that can be saved). So there would be room for improvement but, as well-intended as it might be, a flat tax is not making things better for the poor.

kelseyfrog 5y ago

> This would not hurt the poor. Not sure I follow. I get the first order effects, but I'm hesitant to agree without an explanation of the second-order and systemic-level effects of such a policy.

dnautics 5y ago
There are other first order effects that government does (e.g Inflation, arraignments for infractions, vehicle infraction revenue cutting) that drown out those second order effects. Fix those first.
- kelseyfrog 5y ago
  > that drown out those second order effects What are those?
  - dnautics 5y ago
    You suggested them. The only real one I can think of is price inflation, and that's like nothing next to the destructiveness of the fed. If you don't understand why arraignments for minor violations are awful for the working poor, you've probably never been poor. When I was poor I was lucky enough to not be hurt by arraignments (flexible work hours), but boy did I have sympathy for those people who were relentlessly fucked by that system. There was always at least one of them whenever I had to show up at court, and it wasn't hard to figure out how they got into those situations.

massinstall 5y ago

> This would not hurt the poor. I am always amazed by such statements. Are you sure you have thought this through? What do mean with “asymptotically flat”? As with the poorly understood correlation/causation relationship in statistics, there are many common misconceptions about how absolute and relative amounts influence the result of mathematical calculations. The following example may highlight this: Let’s say a person’s minimum financial need to simply stay alive and sane is $X. Now, take two almost identical people that only differ in their income: A’s income is bigger than B’s. If you tax them both at a flat 15% (or any other rate), the richer will always benefit more from this than the poorer! The reason is because living, eating, and taking part in a society do not come for free. Surprisingly, this is commonly not well understood and it also seems there are proclivities by some fellow rich and comfortable folk to intentionally avoid understanding this. Proof by example: Let’s see what their effective tax is after all the cost to stay alive has been deducted. Excess Income = Income * (1 - 15%) - X Let’s say A’s income is $150k and B’s is $40k, and the minimum amount X required to simply stay alive (not being homeless and having health insurance included) would be $25k. These figures are obviously simplified but anyone can feel free to use their own numbers and repeat the calculation. The general result will remain similar. Then, A’s excess income will be $102.5k and B’s $9k. Relatively speaking, A will have made almost 11.5 times the amount of excess income than B, despite making not even four times as much as B (3.75 to be exact). Excess income will be the only thing both of them can use to save and invest, purchase a house, or use it for all kinds of safety-net building and stress-reducing things.

dnautics 5y ago
Everything you wrote is mathematically true no matter how you arrange your tax brackets unless you want brackets with negative marginal post tax income. So what is your point?
- massinstall 5y ago
  The point is (also mathematically speaking) that a flat tax is less fair to the poor than having a progressive tax with a zero marginal tax for incomes below what’s required for merely surviving (i.e. no tax for people without any excess income that can be saved). So there would be room for improvement but, as well-intended as it might be, a flat tax is not making things better for the poor.