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>He agrees that the first $50,000 for a family of four shouldn't be taxed. I live in an expensive part of Chicago. $50k for me has nothing in common with some

>He agrees that the first $50,000 for a family of four shouldn't be taxed. I live in an expensive part of Chicago. $50k for me has nothing in common with some rural Alabama family making $50k. This is one of the reasons why the flat tax is wrong. It lacks the flexibility and subtlety of a more complex tax system. In a nation this large with so many different wealth levels, a non-progressive tax is just asinine. But it engages conservative low information voters who just want easy cowboy-ish answers to complex problems, especially if they're the ones in he rural south who will benefit from this kind of plan more than northern Democratic urban dwellers.

rconti 11y ago
How does our current (theoretically) progressive tax system factor in cost-of-living?
jessaustin 11y ago
The current federal system doesn't change thresholds based on where you live either, so that criticism seems a bit unfair? How would a system that did change the thresholds even work? If there were some tax benefit involved with owning or renting residential property in really expensive areas, prices for those areas would just increase even more to compensate. Keep in mind, the income tax rate would still be marginal, so you'd only be paying tax on your income beyond $50k. (I don't recall this specifically from TFA, but it did say Arthur Laffer helped out and I really doubt he'd approve a system with a $7250 discontinuity.) I think I speak for everyone in Alabama (which I'm not) when I say "if you want a cheaper apartment, move out of the Loop and ride the subway!"
- drzaiusapelord 11y ago
  >The current federal system doesn't change thresholds based on where you live either, so that criticism seems a bit unfair? It does, in a way. I submit my mortgage interest, what I paid in property taxes, etc and a million other things itemized specifically about me and my income/expense level. A flat tax removes those things for that 14% which is fine, but it shouldn't be after 50k, it should start at 1 dollar of income. Not to mention the rebates I get due to current law like adoption credit, electric car credit, home insulation credit, home office business expense, etc. Losing those incentives will have a non-trivial effect on society. It will, for example, make adoption financially impossible for most folks who current are able to do it and probably strangle the electric car in the cradle. For reference, our adoption was $40,000 out of pocket and x percentage will be returned to us over y years. How many people can drop that kind of money and not get any of it back? Its challenging for many as-is.
  - dnautics 11y ago
    So you're complaining because you'll lose privileges that have been granted to you, that you get to take advantage as a upper-middle class individual. Boo hoo. People in the bottom tier (making under 50k) are generally not taking adoption credits, electric car credits, home insulation credits, etc. It's doubtful that the electric car will be strangled. Tesla owners are not buying teslas for the credit. Likewise, Prius/Insight owners were not buying those for the credit (when that existed) either. The only electric cars that will die without the credit are the leaf and the volt.
    - drzaiusapelord 11y ago
      Actually, the kinds of people who adopt are often not well off. They borrow from friends, family, church, etc. Then they pay it back using these credits. > electric car credits, Lets talk in 5 years when even the poorest will be driving EV's. They'd be stupid not to considering how cheap electricity is compared to gas. Not to mention in a country of high class mobility putting in "donut holes" in the tax code is just stupid. Now you'll be incentivized to not go past making $50,000 unless you suddenly want to be hit with taxes. Employers will cap salaries at arbitrarily $50,000 to avoid tax concerns. These kinds of "one fits all" caps are often economically destructive. Look at India, where if a company is larger than x employees, it is illegal to fire anyone. You need to petition the government to fire that person. That's why there are so many small companies there and why they struggle to compete with China and other nations in their development class who don't have weird one-size-fits all legislation.
      - dnautics 11y ago
        > Actually, the kinds of people who adopt are often not well off. They borrow from friends, family, church, etc. Then they pay it back using these credits. Yes, these people aren't helped by the process of taking deductions because they are basically covered by the standard deduction to have zero tax anyways. >Now you'll be incentivized to not go past making $50,000 unless you suddenly want to be hit with taxes. Huh? if you make 50,010 you're not going to be paying 14.5% of 50,010, you're going to be paying $1.45 in taxes. >These kinds of "one fits all" caps are often economically destructive. No doubt, and the US idiotically implements these, too, like in the ACA where small businesses are exempt below certain sizes, unless you are wal-mart and can obtain a backdoor administrative exemption. Now, if you want to rail against "donut holes" the american welfare system has plenty of those, but that's a separate debate. >Lets talk in 5 years when even the poorest will be driving EV's. They'd be stupid not to considering how cheap electricity is compared to gas. If the lowered expense of the cars is matched by the cheapness of the electricity to make it economical for 'the poorest', then there would be no need for a credit. As it is, the credit (like most tax credits) only helps rich people.
- drzaiusapelord 11y ago
  I dont want to move, what I don't want is some redneck senator proposing raising my taxes so his, largely under 50k making, constituents don't pay ANY taxes. There's enough red state welfare as is.
  - jessaustin 11y ago
    Earlier you said, "In a nation this large with so many different wealth levels, a non-progressive tax is just asinine." Have you changed your mind?
icebraining 11y ago
A flat tax is usually a percentage, not a fixed amount. Your 14.5% wouldn't be the same as the 14.5% for some rural Alabama family.
- drzaiusapelord 11y ago
  Yeah but that 50k income covers their entire mortgage, kids schooling, etc. 50k covers barely anything for us, so I'm being punished for living in and being part of a large economic engine (big city) that, frankly, makes the money this country runs on. So their entire lives are tax free(even while they are using resources paid by tax), but for me income for private school/daycare, mortgage, etc aren't. I don't see how anyone can see that as fair. If we all moved to rural Alabama then economy would collapse, so telling me to move is a non-starter. Regardless, flax tax is crackpot territory and Rand Paul's chances of becoming President are about the same as mine. I see that as a feature, not a bug in our system. Greece just voted in radicals hell bent of changing things, and now it looks like they're headed for financial doom. Just because the status quo has issues doesn't mean you're obligated to throw everything out. The nice part of our tax code is that its so complex, no one action can really ruin things. We can add/remove as needed without really breaking anything. Its congress-proof for the most part, under typical government gridlock (different parties holding power in different branches).
  - dnautics 11y ago
    > I'm being punished for living in and being part of a large economic engine (big city) that, frankly, makes the money this country runs on. "trickle down economics"

rconti 11y ago

How does our current (theoretically) progressive tax system factor in cost-of-living?

jessaustin 11y ago

The current federal system doesn't change thresholds based on where you live either, so that criticism seems a bit unfair? How would a system that did change the thresholds even work? If there were some tax benefit involved with owning or renting residential property in really expensive areas, prices for those areas would just increase even more to compensate. Keep in mind, the income tax rate would still be marginal, so you'd only be paying tax on your income beyond $50k. (I don't recall this specifically from TFA, but it did say Arthur Laffer helped out and I really doubt he'd approve a system with a $7250 discontinuity.) I think I speak for everyone in Alabama (which I'm not) when I say "if you want a cheaper apartment, move out of the Loop and ride the subway!"

drzaiusapelord 11y ago
>The current federal system doesn't change thresholds based on where you live either, so that criticism seems a bit unfair? It does, in a way. I submit my mortgage interest, what I paid in property taxes, etc and a million other things itemized specifically about me and my income/expense level. A flat tax removes those things for that 14% which is fine, but it shouldn't be after 50k, it should start at 1 dollar of income. Not to mention the rebates I get due to current law like adoption credit, electric car credit, home insulation credit, home office business expense, etc. Losing those incentives will have a non-trivial effect on society. It will, for example, make adoption financially impossible for most folks who current are able to do it and probably strangle the electric car in the cradle. For reference, our adoption was $40,000 out of pocket and x percentage will be returned to us over y years. How many people can drop that kind of money and not get any of it back? Its challenging for many as-is.
- dnautics 11y ago
  So you're complaining because you'll lose privileges that have been granted to you, that you get to take advantage as a upper-middle class individual. Boo hoo. People in the bottom tier (making under 50k) are generally not taking adoption credits, electric car credits, home insulation credits, etc. It's doubtful that the electric car will be strangled. Tesla owners are not buying teslas for the credit. Likewise, Prius/Insight owners were not buying those for the credit (when that existed) either. The only electric cars that will die without the credit are the leaf and the volt.
  - drzaiusapelord 11y ago
    Actually, the kinds of people who adopt are often not well off. They borrow from friends, family, church, etc. Then they pay it back using these credits. > electric car credits, Lets talk in 5 years when even the poorest will be driving EV's. They'd be stupid not to considering how cheap electricity is compared to gas. Not to mention in a country of high class mobility putting in "donut holes" in the tax code is just stupid. Now you'll be incentivized to not go past making $50,000 unless you suddenly want to be hit with taxes. Employers will cap salaries at arbitrarily $50,000 to avoid tax concerns. These kinds of "one fits all" caps are often economically destructive. Look at India, where if a company is larger than x employees, it is illegal to fire anyone. You need to petition the government to fire that person. That's why there are so many small companies there and why they struggle to compete with China and other nations in their development class who don't have weird one-size-fits all legislation.
    - dnautics 11y ago
      > Actually, the kinds of people who adopt are often not well off. They borrow from friends, family, church, etc. Then they pay it back using these credits. Yes, these people aren't helped by the process of taking deductions because they are basically covered by the standard deduction to have zero tax anyways. >Now you'll be incentivized to not go past making $50,000 unless you suddenly want to be hit with taxes. Huh? if you make 50,010 you're not going to be paying 14.5% of 50,010, you're going to be paying $1.45 in taxes. >These kinds of "one fits all" caps are often economically destructive. No doubt, and the US idiotically implements these, too, like in the ACA where small businesses are exempt below certain sizes, unless you are wal-mart and can obtain a backdoor administrative exemption. Now, if you want to rail against "donut holes" the american welfare system has plenty of those, but that's a separate debate. >Lets talk in 5 years when even the poorest will be driving EV's. They'd be stupid not to considering how cheap electricity is compared to gas. If the lowered expense of the cars is matched by the cheapness of the electricity to make it economical for 'the poorest', then there would be no need for a credit. As it is, the credit (like most tax credits) only helps rich people.
drzaiusapelord 11y ago
I dont want to move, what I don't want is some redneck senator proposing raising my taxes so his, largely under 50k making, constituents don't pay ANY taxes. There's enough red state welfare as is.
- jessaustin 11y ago
  Earlier you said, "In a nation this large with so many different wealth levels, a non-progressive tax is just asinine." Have you changed your mind?

icebraining 11y ago

A flat tax is usually a percentage, not a fixed amount. Your 14.5% wouldn't be the same as the 14.5% for some rural Alabama family.

drzaiusapelord 11y ago
Yeah but that 50k income covers their entire mortgage, kids schooling, etc. 50k covers barely anything for us, so I'm being punished for living in and being part of a large economic engine (big city) that, frankly, makes the money this country runs on. So their entire lives are tax free(even while they are using resources paid by tax), but for me income for private school/daycare, mortgage, etc aren't. I don't see how anyone can see that as fair. If we all moved to rural Alabama then economy would collapse, so telling me to move is a non-starter. Regardless, flax tax is crackpot territory and Rand Paul's chances of becoming President are about the same as mine. I see that as a feature, not a bug in our system. Greece just voted in radicals hell bent of changing things, and now it looks like they're headed for financial doom. Just because the status quo has issues doesn't mean you're obligated to throw everything out. The nice part of our tax code is that its so complex, no one action can really ruin things. We can add/remove as needed without really breaking anything. Its congress-proof for the most part, under typical government gridlock (different parties holding power in different branches).
- dnautics 11y ago
  > I'm being punished for living in and being part of a large economic engine (big city) that, frankly, makes the money this country runs on. "trickle down economics"