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It sounds so simple to have a flat tax, but actually it hurts lower earners disproprotionately because they are using a higher percentage of their income for li
by Shinkei 12y ago
It sounds so simple to have a flat tax, but actually it hurts lower earners disproprotionately because they are using a higher percentage of their income for living expenses rather than luxury. In other words, 50% of 50,000 per year is more difficult to budget than 50% of 2,000,000 per year.
Plus this whole issue of 'companies returning money to shareholders' is again only favoring the rich. It will be a long time before any significant portion of my income comes from dividends and capital gains. To make money in this way, you have to have a huge amount of capital invested already. Just to prove this point, if you made a very nice 10% per year before taxes on your investments, you would have to have 100,000 invested to make an extra 10,000 per year. If you are only making 50,000 per year, that would take a 20% contribution to your pre-tax retirement account for TEN years before you reached that level of invested capital. Sure, it would happen a little faster because of compounded interest and reinvested earnings, but I think my point is clear.
- dllthomas 12y agoIf you read carefully, parent included a stipend ("cut everyone a check for the same amount each month based on the revenues/spending"). Flat tax plus a stipend produces a progressive overall tax rate. http://en.wikipedia.org/wiki/Negative_income_tax#Flat_tax_with_negative_income_tax http://en.wikipedia.org/wiki/Negative_income_tax#Flat_tax_wi... Edited to add: It's worth noting, though, that you can't produce every possible progressive tax rate curve with this method. It's certainly possible to prefer some curve that is unattainable this way. But a simplistic "a tax flat in dollars is regressive in utility" isn't applicable.
- spikels 12y agoI always liked the basic income plus flat tax combination - simple and fair. Due to the means testing of various aid programs the tax system if often regressive and always confusing for low income earners. Exactly the opposite of what we should all want.
- dllthomas 12y agoWell, different people mean things that are too different by "fair" to really treat it as an objective quality here without being more specific. But I agree that such a system has appeal.
- tracker1 12y agoFirst off, I mentioned a basic income (not by name, but implied by verbiage). Second The point of companies returning monies to share holders, is to simplify tax/business structures. The income given to shareholders as profit is then taxed at 50%.. not favoring anyone.. it's a straight across the board flat tax + basic income for every adult. I'm in favor of a much simplified structure, applied evenly, as fairly as possible, and much smaller government needed to operate it. A lot of spending comes down to complicated bureaucracies, reducing those is a big step. Another benefit of a basic income, is it would allow the revocation of a lot of welfare and stimulus programs, and their own layers of corruption and bureaucracy. I'm also in favor of cutting the overall defense and operations budgets by at least 2/3 ... There's a lot of ways the federal government could be much more effective, and reduce expenditures at the same time. And although I don't know how much I feel it is the government's place, a baseline healthcare system could even be funded in a much better way than Obamacare. I tend to lean libertarian, but I'm a pragmatist. I just want solutions that are responsible, and have a chance at making things better, while avoiding as much chance for corruption and bureaucracy as possible. Not to mention reducing the footprint of the federal government, and reducing the impact of corporate protectionism along the way.