why not flat tax? page 2

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By that logic, someone who makes $40,000 and $40,001 shouldn’t have the same marginal tax rate because it’s far easier for that person who makes $40,000 to shoulder his burden. There should be a different tax burden after every dollar!

My point was that there should exist tax brackets that handle the amount you have to pay in. If you feel that creates an issue with bureaucracy and that it’s difficult to set those without pissing a bunch of people off, then you’re right. Counterpoint, if we do a TRULY flat tax system, why can’t we just have everyone pay 10,000 dollars per year in taxes regardless of income?

Someone making $40,000 and someone making $80,000 in your beloved progressive tax structure pay the same marginal rate is ok, but someone making $2,000 a month and $3,000 a month paying the same rate isn’t? What’s “retarded” is opposing a system for a reason that exists in a system you’re defending.

I said that? Okay. Here I always thought that I, personally, think we need more tax brackets, but here you are telling me what I think and how I love the current system, even though I thought I didn’t.

 
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Counterpoint, if we do a TRULY flat tax system, why can’t we just have everyone pay 10,000 dollars per year in taxes regardless of income?

That isn’t a flat system – that’s a regressive tax system a la the payroll tax.

Okay. Here I always thought that I, personally, think we need more tax brackets, but here you are telling me what I think and how I love the current system, even though I thought I didn’t.

No, you said it’s retarded because people who make different amounts are paying the same rate. Even if you have 30 brackets, it’s still going to be retarded (your words) because someone is going to pay the same rate as someone who makes a higher amount. That was your lone argument against the flat tax. So, either we have a tax bracket at every penny or having people who make different amounts pay the same rate in fact isn’t retarded.

 
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Originally posted by issendorf:
Counterpoint, if we do a TRULY flat tax system, why can’t we just have everyone pay 10,000 dollars per year in taxes regardless of income?

That isn’t a flat system – that’s a regressive tax system a la the payroll tax.

It’s not even that, since the person would be paying this $10,000 irrespective of whether they are employed or not. That would as a flat tax, obviously include pensioners, the long-term infirm, and the jobless equally.

That would be a complete and utter disaster, but we have many on this forum, whom I doubt would understand why that would be a disaster without careful explanation.

 
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…so I’m a bit confused.
How, exactly, are cigarettes and lottery tickets analogous to a system of taxation imposed by the federal government?

Because last time I checked, cigarettes and lottery tickets are a choice, not a federal law.

 
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Originally posted by softest_voice:

…so I’m a bit confused.
How, exactly, are cigarettes and lottery tickets analogous to a system of taxation imposed by the federal government?

Because last time I checked, cigarettes and lottery tickets are a choice, not a federal law.

Because poor people are more likely to smoke and buy lottery tickets; if you’re in a shit situation, you’re probably going to try to gamble your way out of it or use some sort of drug to make it feel less shitty. Fix the social problems that cause people to smoke or gamble if you want to solve the problem, don’t punish them further for being in a shit situation.

(The social problems are wealth/income disparity, if you wanted to know)

 
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How, exactly, are cigarettes and lottery tickets analogous to a system of taxation imposed by the federal government?

They’re analogous if you’re going to argue that a flat tax is bad because it disproportionately affects the poor, then it’s hypocritical to also support governments having lotteries, gas taxes, cigarette taxes, and the like because those actually affect the poor more than the rich.


if you’re in a shit situation, you’re probably going to try to gamble your way out of it or use some sort of drug to make it feel less shitty. Fix the social problems that cause people to smoke or gamble if you want to solve the problem, don’t punish them further for being in a shit situation.

I agree with the drug thing (although wealthy people like their drugs too, but exceptions to every rule). I disagree with the gambling assertion. Every class gambles, it’s just that the lottery is such a suckers bet that the poor are either desperate enough to take part regularly.

(The social problems are wealth/income disparity, if you wanted to know)

I’m pretty damn certain if everyone made the same income, there would still be gambling and there would still be drug use and I have no reason to believe there would be a sizeable decrease in either.

 
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Originally posted by issendorf:

I agree with the drug thing (although wealthy people like their drugs too, but exceptions to every rule). I disagree with the gambling assertion. Every class gambles, it’s just that the lottery is such a suckers bet that the poor are either desperate enough to take part regularly.

I’m pretty damn certain if everyone made the same income, there would still be gambling and there would still be drug use and I have no reason to believe there would be a sizeable decrease in either.

why do poor people take more drugs and gamble more if it’s not a wealth thing? Your first paragraph disagrees with your second. please explain, or admit to your cognitive dissonance. tia.

 
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why do poor people take more drugs and gamble more if it’s not a wealth thing?

To the drug thing, I should have said I agreed to an extent. To the gambling thing, I can’t find any study that breaks down who gambles based on income. I will say when I go out to the casino or go to a nearby card room, generally speaking the people there are upper middle class – middle class at the lowest.

Your first paragraph disagrees with your second. please explain,

It really doesn’t. You implied that drugs and gambling are a byproduct of wealth inequality. I’m saying that is irrelevant. If it were, a nation like Denmark, which doesn’t have a ton of inequality wouldn’t be in the top third of all nations in terms of opiate use.

 
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Drug usage is typically escapism.

Escapism isn’t tied to financial means, just tied to a feeling that they cannot cope with whatever the current situation is, the life they’re living isn’t the one they wish for themselves, or they need to de-stress. A plethora of reasons really, which aren’t necessarily tied to income or cash-on-hand.

 
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But you can’t use optional items such as cigarettes and lottery tickets to rebut a point regarding required tax payments.

Ultimately, those things are choices, not a needed item.

I’m not saying that those things don’t affect the poor disproportionately, but you’re kind of moving the goal posts here.
It’s a bit of a straw man to call up those things and point to them and say
“OH well what about these things? They affect the poor? Why aren’t you mad about them?”

For one thing, those things are not the topic of discussion here.
For another, pointing to them is not addressing my point.

It’s a dodge.

 
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But you can’t use optional items such as cigarettes and lottery tickets to rebut a point regarding required tax payments.

I would question how much of a choice it is for someone who is addicted to tobacco to suddenly stop smoking because of a proposed cigarette tax. I also find it hypocritical for President Obama to claim Republicans hate the poor while at the same time proposing to hike up the cigarette tax. You honestly don’t see the complete double standard the left has for taxation?

Ultimately, those things are choices, not a needed item.

What about a gas tax? Is it a choice to drive your car to work when you live in rural America? What about a carbon tax on coal power plants? Is it your choice that’s the only power plant you live near? How about proposed fat and sugar taxes? How far do you want to stretch the choice argument?

I’m not saying that those things don’t affect the poor disproportionately, but you’re kind of moving the goal posts here.
It’s a bit of a straw man to call up those things and point to them and say
“OH well what about these things? They affect the poor? Why aren’t you mad about them?”

Not really moving the goal posts, more wondering how you deal with a thought that I view to be hypocritical to be completely justified in your mind.

For one thing, those things are not the topic of discussion here.
For another, pointing to them is not addressing my point.

I don’t think the flat tax does have a negative effect on the poor. I was operating under the hypothetical that a flat tax does have negative effect on the poor, and how that’s no good, but other taxes that affect the poor disproportionately are acceptable. The only argument anyone against a flat tax has is that someone who makes $50,000 hurts less than someone who makes $30,000 in a flat structure even though that same exact problem occurs in a progressive tax structure, but it’s suddenly acceptable.

 
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Technically, and yes I know it is splitting hairs, but nobody is addicted to tobacco. They’re addicted to nicotine. So if the cigarette tax goes too high, just get your nicotine from gum or another source unaffected by the tax.

Cars are a bit harder, but again, you can get a smaller car or a bike to offset how much fuel you are going to use. If you’re naughty, you can use aggrodiesel in it instead of normal, which is far, far cheaper. Still a tax, but you do at least have far more control over how much you pay if you use a little lateral thinking – as opposed to a flat tax with which you’ll pay a fixed amount regardless of what you do.

 
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Technically, and yes I know it is splitting hairs, but nobody is addicted to tobacco. They’re addicted to nicotine. So if the cigarette tax goes too high, just get your nicotine from gum or another source unaffected by the tax.

True enough, although I have a sneaking suspicion that if there is mass exodus of smokers to nicotine gum, the government will just implement an equally lucrative nicotine tax on the gums. Government tends to not overlook methods of taxing the public in any way, shape, or form that they can.

If you’re naughty, you can use aggrodiesel in it instead of normal, which is far, far cheaper. Still a tax, but you do at least have far more control over how much you pay if you use a little lateral thinking – as opposed to a flat tax with which you’ll pay a fixed amount regardless of what you do.

You could get a smaller car, but take farmers for instance. They essentially have to drive trucks and gas guzzling farm equipment just as other people, especially in rural areas, need a truck. Also, the investment in a hybrid, which are far more expensive than a standard car, may prove to be too much of an initial investment for someone.

As for the agrodiesel, it is cheaper, but if I had my way with the federal budget, those luxurious subsidies for the ethanol industry would be completely eliminated and it wouldn’t really be an affordable alternative (not to mention the damage you would do to your engine – I imagine the maintenance costs would far surpass the savings in fuel costs).

 
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Flat tax would be good for the upper class, and sometimes middle class, but not for poverty class.

The problem that the “good” ole’ government has with their idea of progressive tax is they have upper class citizens pay more, which is good. But then they have middle and poverty classes paying more also, which is bad.

The US government really needs to get in better shape, or there wont be any citizens willingly living in the US.

 
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Flat tax would be good for the upper class, and sometimes middle class

Actually a flat tax would likely mean wealthy Americans who have all sorts of avenues to dodge taxes (legally in the quagmire that is the US tax code) would pay more in taxes.

but not for poverty class.

Why not?

 
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Originally posted by issendorf:
Technically, and yes I know it is splitting hairs, but nobody is addicted to tobacco. They’re addicted to nicotine. So if the cigarette tax goes too high, just get your nicotine from gum or another source unaffected by the tax.

True enough, although I have a sneaking suspicion that if there is mass exodus of smokers to nicotine gum, the government will just implement an equally lucrative nicotine tax on the gums. Government tends to not overlook methods of taxing the public in any way, shape, or form that they can.

Actually Governments commonly do overlook or perhaps better called forcibly ignore methods they could tax the public. Fact is the governments tend to want to get votes, as such taxes generally only end up being put on things they can tax without losing to many votes or even gain some (depending on their supporting voters).
Putting taxes on things like Smoking or Oil certainly hurts the poor more, but the Government can get support for this based on health or environmental issues. Many taxes actually started as bribes for society to look away, instead of a more restrictive and actually effective regulation.

Originally posted by issendorf:
Flat tax would be good for the upper class, and sometimes middle class

Actually a flat tax would likely mean wealthy Americans who have all sorts of avenues to dodge taxes (legally in the quagmire that is the US tax code) would pay more in taxes.

but not for poverty class.

Why not?

If your trying to get the same revenue as now, the tax rates for the richer Americans is not really going to drop with a flat tax. Most of the legal tax dodging will still work on a flat tax, since that is mostly done using foreign tax codes and international treaties on how and where taxes are paid.

Flat taxes are bad for those with middle and lower incomes relative to progressive taxes, because the flat taxes puts a greater part of the total tax burden on them. Without at least one progressive Step and a very big one at that it would even ruin the ability of many to actually live on the wages they get. Even those above such a progressive step will have to at least lower their lifestyle(which in many cases can have disastrous effects). This effect continues ever weaker to the flip point where taxes for the individual start being less. Because of the high difference in income that the USA has this point will be somewhere in the lower upper class.

 
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Actually Governments commonly do overlook or perhaps better called forcibly ignore methods they could tax the public. Fact is the governments tend to want to get votes, as such taxes generally only end up being put on things they can tax without losing to many votes or even gain some (depending on their supporting voters).

It’s hard to take this counter too seriously when governments are doing things like this.

Putting taxes on things like Smoking or Oil certainly hurts the poor more, but the Government can get support for this based on health or environmental issues.

I’m well aware about how politicians spin a new tax to garner support. My point is that it’s wildly hypocritical for liberals (who tend to hate a flat tax for the mythical reasoning that it hurts the poor more [citation needed]) to decry taxes that, allegedly, hurt the poor while at the same time supporting taxes that actually do hurt the poor.

If your trying to get the same revenue as now, the tax rates for the richer Americans is not really going to drop with a flat tax. Most of the legal tax dodging will still work on a flat tax, since that is mostly done using foreign tax codes and international treaties on how and where taxes are paid.

This is just completely wrong. A flat tax eliminates those loopholes. If an American citizen/corporation wants to try to evade their taxes, then they (should) go to jail. Just because the Isle of Man has lenient tax laws would have no bearing on the US tax code. For someone who evaded taxes to claim that, well, it was fine when I did it in Bermuda, would be laughed at by the feds.

Flat taxes are bad for those with middle and lower incomes relative to progressive taxes, because the flat taxes puts a greater part of the total tax burden on them. Without at least one progressive Step and a very big one at that it would even ruin the ability of many to actually live on the wages they get.

You ignored the fact that a flat tax comes with a negative income tax to alleviate the burden of the poorest people – essentially that’s your massive progressive aspect. It goes from 0% (or possible +%) to whatever the rate is.

Even those above such a progressive step will have to at least lower their lifestyle(which in many cases can have disastrous effects). This effect continues ever weaker to the flip point where taxes for the individual start being less. Because of the high difference in income that the USA has this point will be somewhere in the lower upper class.

Most people are already paying close to 15% just from payroll taxes, not even counting all the other faxes and fees the government throws at you on a daily basis. It’s very likely that lower income workers would pay a lower rate than they do now not to mention you aren’t taxed until you exceed the needed amount to live that the government puts forth.

 
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Originally posted by issendorf:

Most people are already paying close to 15% just from payroll taxes, not even counting all the other faxes and fees the government throws at you on a daily basis.

I like that idea. Originally when I started working here, I was paying 25% UK payroll tax, and then I think it was 12% as a US citizen working abroad. Local tax is now just 20%, so that’s a far better situation.

 
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Hmm…maybe a flat tax is feasible as an alternative.

Are there working models up and running anywhere?

 
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Are there working models up and running anywhere?

These are the ones that Wikipedia says. There have also been a bit of research done on former USSR nations that adopted a flat tax that I read about while I was still in school. I haven’t found any good ones that are free, although I’ll look again tomorrow and post them if I can find one that doesn’t require a Jstore account.

Here is an article from CATO talking about the positives. CATO as a libertarian think tank is one of the foremost advocates for the flat tax and it’s pretty slanted in its coverage, but I love CATO and thought I’d put it out there for what it’s worth.

Perry and Cain sort of had flat tax proposals, and those were largely ripped (Cain’s was especially terrible). Perry’s would have resulted in a sharp decrease in revenues, largely because he kept in the big deductions like mortgage and charitable deductions. I think as long as you make sure the poor aren’t overly burdened (which is why a smart NIT is absolutely essential), I think it would be great economically. Tax reform spurring economic growth isn’t exactly a controversial thought. Tax reform consists of eliminating/lessening deductions while flattening rates. The ultimate instance of that would be a flat tax with no deductions. It probably wouldn’t be prudent to go there all at once, but I think measured tax reform every 5 years that slowly trims back deductions and flattens rates would be a possible method of implementation in the US. If us flat tax proponents are wrong, the warning signs would be obvious and it wouldn’t be too hard to reverse course and concede that a progressive tax is necessary.

EDIT:

I should mention that while I generally do abhor deductions, I would probably remain in favor of one: the charitable. I think if that is eliminated, charitable donations would plummet as simply donating for helping humanity isn’t enough for a lot of extraordinarily wealthy people – that write off is needed as well.

 
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Originally posted by issendorf:

I should mention that while I generally do abhor deductions, I would probably remain in favor of one: the charitable. I think if that is eliminated, charitable donations would plummet as simply donating for helping humanity isn’t enough for a lot of extraordinarily wealthy people – that write off is needed as well.

please explain why you believe charity to be a good thing.

 
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please explain why you believe charity to be a good thing.

Do you not think charity is a good thing?

 
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Originally posted by issendorf:
please explain why you believe charity to be a good thing.

Do you not think charity is a good thing?

just answer the question, thanks.

 
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Originally posted by urine420:
Originally posted by issendorf:
please explain why you believe charity to be a good thing.

Do you not think charity is a good thing?

just answer the question, thanks.

I could say the same to you.

Ignoring the fact that the definition of what a charity is has become wildly perverted by the US tax code, charities generally work to make the world a better place or to help those less fortunate and do so more efficiently and more effectively than a national government can.

 
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Originally posted by issendorf:

Ignoring the fact that the definition of what a charity is has become wildly perverted by the US tax code, charities generally work to make the world a better place or to help those less fortunate and do so more efficiently and more effectively than a national government can.

why is charity necessary?