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Not sure why you're getting downvoted. This is the system that works fantastically in Australia, and I assume other countries in the world.

by lachyg 15y ago

potatolicious 15y ago
The problem with this idea is that it's a regressive taxation system, as opposed to a progressive tax system. Which is to say, the poor are taxed disproportionately compared to the rich. A person who makes $10M a year spends a much lower percentage of his income than someone who makes $40K a year. So now we're taxing the $40K person heavily, while the $10M person pays comparatively almost nothing, even accounting for lavish and expensive lifestyles. It reinforces a negative cycle - the rich get richer, the poor get poorer, and social mobility is removed. When the poor lose all hope of improving their lot because the system is so stacked against them, instability and unrest results and... well, the rest of this story might get a little violent. This is probably a worse idea than, say, the flat-rate income tax that is practiced in Hong Kong and elsewhere.
- pagekalisedown 15y ago
  Several states have no income tax. Including Washington, which is fairly progressive. How do they make it work? A sales tax can vary depending on the type of good. Luxury goods can be more taxed than essential goods. Wouldn't this even the playing field?
  - aptwebapps 15y ago
    For most taxpayers in the US state taxes make up a much smaller portion of their total tax burden than federal taxes. So, overall, the tax burden in Washington isn't so much more regressive than a state with income tax. You can have luxury taxes, but it's hard to match income tax if your goal is to have a fairly progressive tax.
- danboarder 15y ago
  Perhaps counter intuitive, but regressive tax scaling provides better incentives: people will want to make _more_ money in order to take advantage of the lower effective tax rates. Tax policy can reward or dissuade achievement.
- megaman821 15y ago
  If there is a sales tax, an inheritance tax, and a property tax, who cares? If you are a millionaire that lives like you make minimum wage, those are the type of taxes you will pay. The rich secretly like the progressive tax code and all the exemptions. The thicker the tax code the more loop-holes for them.

Not sure why you're getting downvoted. This is the system that works fantastically in Australia, and I assume other countries in the world.

by lachyg 15y ago

Not sure why you're getting downvoted. This is the system that works fantastically in Australia, and I assume other countries in the world.

potatolicious 15y ago

The problem with this idea is that it's a regressive taxation system, as opposed to a progressive tax system. Which is to say, the poor are taxed disproportionately compared to the rich. A person who makes $10M a year spends a much lower percentage of his income than someone who makes $40K a year. So now we're taxing the $40K person heavily, while the $10M person pays comparatively almost nothing, even accounting for lavish and expensive lifestyles. It reinforces a negative cycle - the rich get richer, the poor get poorer, and social mobility is removed. When the poor lose all hope of improving their lot because the system is so stacked against them, instability and unrest results and... well, the rest of this story might get a little violent. This is probably a worse idea than, say, the flat-rate income tax that is practiced in Hong Kong and elsewhere.

pagekalisedown 15y ago
Several states have no income tax. Including Washington, which is fairly progressive. How do they make it work? A sales tax can vary depending on the type of good. Luxury goods can be more taxed than essential goods. Wouldn't this even the playing field?
- aptwebapps 15y ago
  For most taxpayers in the US state taxes make up a much smaller portion of their total tax burden than federal taxes. So, overall, the tax burden in Washington isn't so much more regressive than a state with income tax. You can have luxury taxes, but it's hard to match income tax if your goal is to have a fairly progressive tax.
danboarder 15y ago
Perhaps counter intuitive, but regressive tax scaling provides better incentives: people will want to make _more_ money in order to take advantage of the lower effective tax rates. Tax policy can reward or dissuade achievement.
megaman821 15y ago
If there is a sales tax, an inheritance tax, and a property tax, who cares? If you are a millionaire that lives like you make minimum wage, those are the type of taxes you will pay. The rich secretly like the progressive tax code and all the exemptions. The thicker the tax code the more loop-holes for them.