Government sanctioned exploitation of a minority group.

[szh]

All good questions. Thanks for asking!

How does your theoretical proposal compare to current taxes? Since ultimately, it works out to a graduated tax anyways.

Yes, it does still do that to some degree, but the percentage above a certain point asymptotically levels out.

Most importantly, it corrects one major inequity: that the percentage rate increases with income!

Yes, it is at 38% now, but in the not too distant past, it was a lot higher ... and we could see a return to those days if some of our Socialist Congresspeople have their way! That is manifestly wrong, and should be called "theft" - the government dipping into your pocket call it "tax" to make it nice and clean! Let's walk the walk and get away from that absurd position to find ourselves in.

Further, and more importantly, what is the difference in tax revenue generated? If less money becomes generated then how do we make up the difference?

1. Studies show that a flat percentage tax system will be relatively revenue neutral, and may even generate a bit of extra money for the government from individual. So, no extra taxes are needed.

2. For higher income ranges, most would actually be paying a bit more in actual total percentages, as it turns out. Because, all deductions would be eliminated (with only the theoretical "poverty" level in place).

3. The burden on most people below $50,000 total income (assuming a $30,000 poverty deduction) would actually go down a bit, and for people below $30,000, there would be no "tax" at all.

4. The burden of calculations and maintaining an ever-increasing tax code could be reduced/eliminated - we waste too much time and money on taxation calculations.

Now, having said that, I realize that all "plans change after contact with the enemy". So, it would need re-evaluation later and the two controls/variables ("poverty level" and the "percentage rate") could be adjusted to correct for perceived revenue problems.

Ultimately, no matter the tax plan, we need to try and ensure a certain level of tax revenue.

Of course!

But, personal income taxes are not the only source ... not even the single largest source of revenue for the Federal government.

In order to do that with a pure flat tax, it would be so high that low earners would be crippled by it (Close to $7K per taxpayer by my estimates).

Understood and I do agree. Which is why a "pure" flat tax, without some support for the low-income folks who would be crippled by it, will never fly. Hence my proposal for a "poverty level" definition - termed so that people would find some pride in rising above it (I hope anyway).

Another way to solve that problem would be to declare that there would be no "poverty level" at all, and that the amount would be a flat 20% tax. To help the low-income people (below a threshold - adjusted for inflation), there would be financial money help equal to the amount of tax paid - this would not be termed a "refund" (I hate that word!), but would be termed a "credit" perhaps, or "assistance", or some other word where the connotation of inappropriate entitlement would be removed.

The plan you use is still biased against the higher earners.

Sure!

But less so than the current inequity ... which is likely to soon get worse if some Congresspeople have their way! The marginal tax rate may increased at the top end to even more than it is now because "rich people can afford it more" BS is applied.

And chances are, the actual tax rate would need to be higher than 20% to provide as much tax revenue as we get now (A little over 1 trillion in 2006).

I have shown the actual figures in another thread in this forum. The numbers for personal income tax is not that big a chunk of the total tax revenue ... corporate taxes account for a lot more than you would think!

The reason for this is that the 30,000 deduction would negate almost 26 billion in revenue from people making $30K and under. Not to mention it would also lower the Taxable income across the board by $30K per taxpayer. Once you get over the $500K adjusted gross income mark, those taxpayers are already paying more than 20% of their AGI in taxes.

1. Really well done studies - without an axe to grind against the "rich" - show otherwise!

2. And, the numbers can be adjusted accordingly to tweak things. So, change that 20% and make it larger if needed to make it revenue neutral.

BTW, I say this knowing that it could impact me adversely too - I make enough to be hit by it, rather than pay less.

I might argue they do get better benefits. Perhaps not on the order of 6 times more, but more affluent areas do indeed to tend to have better teachers, facilities and public services.

The problem is that the "rich" do pay 6 to 20 times more. So, still unjustified, IMHO.

Z

[C-Kwik]

Yes, it does still do that to some degree, but the percentage above a certain point asymptotically levels out.

Most importantly, it corrects one major inequity: that the percentage rate increases with income!

Yes, it is at 38% now, but in the not too distant past, it was a lot higher ... and we could see a return to those days if some of our Socialist Congresspeople have their way! That is manifestly wrong, and should be called "theft" - the government dipping into your pocket call it "tax" to make it nice and clean! Let's walk the walk and get away from that absurd position to find ourselves in.

According to government estimates, even our top earners are only paying about 20-24% (on average) of their adjusted gross income in taxes. As your examples show, the more you make, the closer the actual overall tax as a percentage of one's income approaches 20%. Increases in this rate to compensate would merelyt push them to where they already are at the moment.

1. Studies show that a flat percentage tax system will be relatively revenue neutral, and may even generate a bit of extra money for the government from individual. So, no extra taxes are needed.

2. For higher income ranges, most would actually be paying a bit more in actual total percentages, as it turns out. Because, all deductions would be eliminated (with only the theoretical "poverty" level in place).

3. The burden on most people below $50,000 total income (assuming a $30,000 poverty deduction) would actually go down a bit, and for people below $30,000, there would be no "tax" at all.

4. The burden of calculations and maintaining an ever-increasing tax code could be reduced/eliminated - we waste too much time and money on taxation calculations.

Now, having said that, I realize that all "plans change after contact with the enemy". So, it would need re-evaluation later and the two controls/variables ("poverty level" and the "percentage rate") could be adjusted to correct for perceived revenue problems.

Sources please.

I like the idea of simplifying tax code but given the context of the discussion, I think the end results are what everyone is discussing.

But, personal income taxes are not the only source ... not even the single largest source of revenue for the Federal government.

Of course not. But I'm not even considering any tax revenue outside personal income taxes as none of the discussion thus far has been inclusive of taxes on businesses and corporations. So assuming no change to those, then the loss in tax revenue is not offset by anything else directly.

Another way to solve that problem would be to declare that there would be no "poverty level" at all, and that the amount would be a flat 20% tax. To help the low-income people (below a threshold - adjusted for inflation), there would be financial money help equal to the amount of tax paid - this would not be termed a "refund" (I hate that word!), but would be termed a "credit" perhaps, or "assistance", or some other word where the connotation of inappropriate entitlement would be removed.

Politically and socially, any percieved aid like that might not hold up so well. A person making a low-income but living comfortably doing so might not like to be classified as receiving help or aid. While a graduated tax could be seen the same way, its not as "insulting".

But less so than the current inequity ... which is likely to soon get worse if some Congresspeople have their way! The marginal tax rate may increased at the top end to even more than it is now because "rich people can afford it more" BS is applied.

Oddly, in 2006, people who made more than $10 Million paid less as a percentage of their AGI. Its a bit puzzling as its a full 3 percentage points less than the group from $5 Mil to $10Mil and more than 4 percentage points less than those earning $1 Mil to $5 Mil.

1. Really well done studies - without an axe to grind against the "rich" - show otherwise!

What studies?

2. And, the numbers can be adjusted accordingly to tweak things. So, change that 20% and make it larger if needed to make it revenue neutral.

BTW, I say this knowing that it could impact me adversely too - I make enough to be hit by it, rather than pay less.

The problem is that the "rich" do pay 6 to 20 times more. So, still unjustified, IMHO.

I think you misunderstand this part of what I was saying. To be fair, I may not have made my point clearly. But my point was simply that the idea of a flat tax percentage with a "poverty deduction" doesn't really change much of anything as far as I can tell (at least based on your numbers). So the net affect seems to be that there is very little change, especially if we raise the rate to try and match existing tax revenue levels. Ultimately, I have to wonder how you are arguing for fairness when the net effect is really not that big of a difference for those who would be most likely to complain about the tax share inequities...

Just so you know how I'm deriving some of my numbers, I got them here:

http://www.irs.gov/pub/irs-soi/06in11si.xls

I do realize that the actual results may be a bit more complicated to calculate, but I'm just trying to mek quick estimations to test the validity of your points...

[Urabus GodofTraction]

Blah blah blah

And then...

Alright, so you rage at this suggested unfairness at the beginning and then close by admitting you don't give a damn about fair.Nice.

Find me were I once made a comment about fair. Just isn't always fair.

I'm unsure the point of your first Russia link. Yes, I already know that Russia has a flat-tax based system. That verifies that.

Your second Russian link shows you're just as guilty of correlation fallacies as strawmen. Russia's economy is tanking no matter the tax plan. Do we not know if Russia's economic system will be made worst with a graduated tax?

The term "rage" with the hip kids like myself doesn't involve the emotion, though I know how you enjoy the superiority from taking a detached, objective view.

I will now flood you with supporting evidence (I'm going to cheat a little and use databases you don't have access to, so you'll have to trust me):

A little light reading:

Not only would a flat tax dramatically simplify the tax system, it would also have a significant impact on the Canadian economy. First, a flat tax would replace the existing four federal income-tax rates with one low rate thereby eliminating the barrier that discourages Canadians from saving, investing or working harder to earn more money.

Research clearly shows that tax rates that increase as individuals earn more money through hard work act as a disincentive for such work.

A flat tax would also have a significant impact on investment in Canada. Since businesses are permitted to deduct the full value of capital investments (buildings, equipment and land) in the year of purchase, the tax burden on investments would be significantly reduced and would increase the amount of investment undertaken by businesses.

International evidence clearly shows that Canada would benefit greatly from a flat tax. In fact, more than 20 jurisdictions around the world, most notably Hong Kong and more recently a number of former Soviet republics, have implemented flat taxes. Hong Kong built itself into an economic giant using the flat tax as its fiscal anchor. Similarly, Slovakia, which adopted a flat tax in 2004, has since become Europe's fastest growing economy and a beacon for foreign investment.

At this time of year most Canadians become frustrated at just how unwieldy, complicated, and littered with exemptions for special interests our tax code has become. Replacing Canada's personal and business income-tax system with a flat tax will save money, make everyone's taxes easier to calculate, and strengthen the Canadian economy. A few key strokes on a calculator, a minute or two to fill out a postcard return, and voilà, off to Ottawa, with love.

No country that has adopted a flat tax has ever switched back - among them, Ireland (population: four million), the highest-income, lowest-taxed country in Europe; the Baltic countries of Latvia, Estonia and Lithuania (combined population: seven million), the three newly independent countries that set off the flat-tax revolution in former Soviet bloc countries in 1994; and Hong Kong, the eccentric jurisdiction that gives all taxpayers the choice of paying either a progressive tax (from 2 to 20 per cent) or a flat tax (16 per cent). And the list of countries preparing for flat-tax reform keeps growing. Greece (population 10.6 million) and Croatia (population: 4.5 million) will be next. Kuwait (population 2.9 million) and Mexico (population: 107.5 million) are considering it.

The bit about Ireland is very interesting. Please note that the previous two articles are Canadian. Flat-tax has been pushed to the wayside in the United States, thanks to Fair Tax and the thieves.

Just a few days before Geithner's embarrassing revelation, the Taxpayer Advocate Service issued its annual report to Congress. (The service is part of the IRS and was designed to help taxpayers resolve complaints with the agency that can't be resolved through normal channels.) The report was an eye-opener as to just how horrifically complicated the code has become. Americans spend 7.6 billion hours a year complying with tax-filing requirements, the equivalent of 3.8 million full-time jobs. The code gets ever more complicated, expanding by about 1,000 words a day--with 500 changes last year alone. Nothing is simple. One example: Congress passed a law allowing beleaguered homeowners to exclude from taxable income home-mortgage debt that is forgiven by lenders. But the form is utterly bewildering, and the law itself is full of nitpicking rules about how much of the forgiven debt can actually be excluded.

By the way, with a flat tax, Geithner couldn't have gotten into the trouble he did even if he'd wanted to.

If you can find the article "The “flat tax(es)”: principles and experience" by Michael Keen, it would be a worthy read. I've got nowhere to host the pdf I've got.

Also see "Growth effects of shifting from a graduated-rate tax system to a flat tax" by Cassou, S. I can't save or c&p that pdf. I'll type out the conclusion, though:

This article developed a simple theoretical framework to assess the growth effects of shifting from a graduated-rate tax system to a flat tax. The model captures the incentive effects of rising marginal tax rates on household decisions to consume, work, learn, and invest. These decisions, in turn, influence the rate of economic growth. Our baseline reform experiment predicts that a revenue-neutral flat tax can permanently increase per capita growth by 0.009 to 0.143 percentage points per year relative to a graduated-rate tax system calibrated to match features of the U.S. tax code. The flattening of the marginal tax schedule is the most important element of the reform for enhancing growth. Allowing full expensing of physical capital investment contributes only a small amount to the overall growth gain. The elimination of double taxation of business income is actually harmful for growth when combined with the full expensing provision.

I think that I have said enough to show the genuine uncertainties thatplague the overall case for progressive taxation. But in closing, it is importantto stress that this debate has continued for as long as it hasprecisely because no one has been able to conjure up a single knockdownargument either for or against that tax regime. But the case against theprogressive tax can be put in this form: Make the tax steep, and theincentive effects are likely to dominate the purported gains of redistribution.Make the progressivity shallow, and the administrative costs willundermine whatever gains the system promises. Rather than incur thepolitical costs of establishing and reestablishing the optimal tax structure,stick with a program that comes off as a robust second-best. Use the flattax because it advances the cause of tax simplification, avoids the pitfallsof regressive taxes, and offers a useful partial constraint on governmentbehavior that forces the state to articulate the reasons for its redistributivistprograms. The flat tax might perhaps be found inferior to the optimalsystem of progressive taxation, if we could determine what thatoptimal system is, but since no one can, the flat tax offers a robust secondbestchoice for public finance, which counts as first-best in an imperfectworld.

I saved the pdf of that excellent article, too.

Shall I go on? UF has 285+ articles on flat tax stored away, some even support your side!

[HashiriyaS14]

This thread is an irreparable clusterf**k.

Anyway, the wealthy should be careful what they wish for. Many wealthy people pay tiny taxes due to the system of deductions in place. I paid (legally) 5.2% on my gross in 2008, and my friend's Dad, who's worth about $45 million, paid less than that. A flat 10% tax rate with no deductions and no loopholes would NOT be a step in the right direction for any wealthy persion who's currently exploring all of their current legal tax-minimization options.

[WDRacing]

Which is why the tax code is over 3000 pages...

[szh]

Anyway, the wealthy should be careful what they wish for. Many wealthy people pay tiny taxes due to the system of deductions in place. I paid (legally) 5.2% on my gross in 2008, and my friend's Dad, who's worth about $45 million, paid less than that. A flat 10% tax rate with no deductions and no loopholes would NOT be a step in the right direction for any wealthy persion who's currently exploring all of their current legal tax-minimization options.

Under a flat percentage tax system, my total percentage would go up too, even though I make enough that my marginal tax rate is in the top bracket too.

And, yes, I am okay with that! Because, it would simplify life a lot for everybody, reduce the complexity of the tax system, keep a clear manadate for what is paid by everybody, etc. etc., etc. Our current tax system is more unwieldy than what existed before our so-called 1986 tax-simplificaiton act!

Z

[HashiriyaS14]

Under a flat percentage tax system, my total percentage would go up too, even though I make enough that my marginal tax rate is in the top bracket too.

And, yes, I am okay with that! Because, it would simplify life a lot for everybody, reduce the complexity of the tax system, keep a clear manadate for what is paid by everybody, etc. etc., etc. Our current tax system is more unwieldy than what existed before our so-called 1986 tax-simplificaiton act!

Z

Yeah, I have no doubt that you "get" the myriad implications of a flat tax.

I think that a lot of conservatives support it because they think they're supposed to, or because Forbes supports it, or whatever.

I wasn't even necessarily trying to imply that it's a BAD idea, per se, I actually think that it's a good idea, so long as total revenues are unchanged, but I just wanted to caution wealthy conservatives that if they're supporting it solely out of self-interest, they should perhaps check the details first.

[Cold_Zero]

Can I ask have you considered what you paid out to earn the deductions that you claimed on your taxes to get a 5.2% rate?

I would think I would gladly give up my deductions to pay a flat 10% and have all the Federal Taxes removed from the products and services that I buy.

And with the added benefits that I always know what my rate would be from year to year and I could budget better. I wouldn't have to navigate the myriad of Schedule B's and DIV-INT forms. Have the government prying into my life and concerning themselves with my associations and what I am doing with them (AKA babysitter). I would also think that it would help keep politicians more accountable when your flat rate goes from 7% to 28% and people could see up front a rate hike will mean. Rather than embedding and hiding taxes.

But hey, I am not a tax guru.

[szh]

Yeah, I have no doubt that you "get" the myriad implications of a flat tax.

I think that a lot of conservatives support it because they think they're supposed to, or because Forbes supports it, or whatever.

I have to admit that I have no idea about their motives. I know mine though!

I wasn't even necessarily trying to imply that it's a BAD idea, per se, I actually think that it's a good idea, so long as total revenues are unchanged, but I just wanted to caution wealthy conservatives that if they're supporting it solely out of self-interest, they should perhaps check the details first.

That is indeed very important to do!

Remember that I am also the nut who believes that people need to be able to say where the money goes! Recall my thread on that topic? See here: zerothread/366111.

Z

[HashiriyaS14]

Can I ask have you considered what you paid out to earn the deductions that you claimed on your taxes to get a 5.2% rate?

I have an enormous mortgage interest deduction relative to my income. Additionally, I have a fair amount of out-of-pocket education costs (MBA).

[szh]

I have an enormous mortgage interest deduction relative to my income. Additionally, I have a fair amount of out-of-pocket education costs (MBA).

A mortgage deduction is something I get as well.

But, FWIW, I want that mortgage deduction from my taxes to be removed (anathema to many people, I know!) in favor of a flat percentage tax. Sorry it might hurt you too.

This is because I am a believer that home ownership is a choice, not a right! Certainly not one that we should support and endorse with an arbitrary tax deduction.

Z

[smockers83]

Holy crapola. Hash is right, clusterf***.

Tax in terms of nominal dollars. Lets put it this way. You're at the store. You have two items, both are $10 off. One item is $30 and the other is $60. Nominally, they are equally on sale, however, which one is the better sale? Percentages convey a lot of information. The rich pay a higher percentage in taxes relative to those who are not as rich. This takes more of their income away relative to those who aren't as rich. On the flip side, when analyzing the numbers in terms of revenue, the rich pay the majority of the taxes, both as a percentage and in nominal terms. But this is only due to the sheer amount of their income. Whether there is a progressive tax or a flat tax, in nominal terms, the rich are always going to be paying more when analyzing the revenue, even true in certain cases of a regressive tax.

There are two people in the economy, one who makes 30,000/year and another who makes 1,000,000/year. The effective tax rate on the 30,000 earner is 15% and the effective tax rate on the million dollar earner is 30%. Effectively, the million dollar earner has a twice as high tax burden, but in nominal terms he pays 66 2/3 times more. Analyzing the revenue, the 30,000 earner pays 1% of it and the million dollar earner pays 99% of it.

Now, if it were a flat tax of 22.5% (the average of the previous rates), we have a case where income is taken from them at the exact same rate, or penalty. Now, the million dollar earner pays 33 1/3 times more in nominal terms, even though they are taxed at the same rate. On the revenue side, the 30,000 earner makes up 3% while the million dollar earner makes up 97%.

There is no getting around the fact that rich people are going to make up the majority of the revenue unless you go to a ridiculously regressive system.

A flat tax system penalizes everyone the same. A progressive system penalizes the rich and a regressive system penalizes the poor.

Hopefully that clears some stuff up for people.
Modified by smockers83 at 11:55 PM 4/28/2009

[WDRacing]

So a flat tax is fair or no? Just answer...no explanation needed. I want a yes or no in your opinion.

[szh]

Yes, IMHO, a flat percentage tax is fairer than the current system we have.

(More than a simple yes or no ... sorry! )

Z

[szh]

There are two people in the economy, one who makes 30,000/year and another who makes 1,000,000/year. The effective tax rate on the 30,000 earner is 15% and the effective tax rate on the million dollar earner is 30%. Effectively, the million dollar earner has a twice as high tax burden, but in nominal terms he pays 66 2/3 times more. Analyzing the revenue, the 30,000 earner pays 1% of it and the million dollar earner pays 99% of it.

Now, if it were a flat tax of 22.5% (the average of the previous rates), we have a case where income is taken from them at the exact same rate, or penalty. Now, the million dollar earner pays 33 1/3 times more in nominal terms, even though they are taxed at the same rate. On the revenue side, the 30,000 earner makes up 3% while the million dollar earner makes up 97%.

There is a simple fix to the 99:1 ratio you mention becoming 97:3 if that is such a concern (not that I agree): Add in a lower-end "poverty threshold" exclusion like I have described earlier.

A flat tax system penalizes everyone the same.

That is why I prefer it - it is "fairer".

Z

[HashiriyaS14]

A mortgage deduction is something I get as well.

But, FWIW, I want that mortgage deduction from my taxes to be removed (anathema to many people, I know!) in favor of a flat percentage tax. Sorry it might hurt you too.

This is because I am a believer that home ownership is a choice, not a right! Certainly not one that we should support and endorse with an arbitrary tax deduction.

Z

You'll notice from my posts in the last page that I was careful to say that I am not necessarily opposed to a flat tax, I was just trying to illustrate how it would not constitute a huge decrease in the tax liability of America's wealthy in aggregate.

[szh]

You'll notice from my posts in the last page that I was careful to say that I am not necessarily opposed to a flat tax, I was just trying to illustrate how it would not constitute a huge decrease in the tax liability of America's wealthy in aggregate.

Yup, I understood your position.

(The rest is not a comment on your post ...)

I like the flat tax approach for simplicity and better fairness, since a decrease in tax (as a total percentage of the intake) is not what I am after. Paying more fairly and making people understand that only using/discussing percentage makes it too easy to rationalize how we do it today, and that leads to also easily rationalize increasing the top marginal tax brackets (or adding more) "because the rich can afford it". That is what I call theft!

[smockers83]

Yes, a flat tax across the board is more fair, it penalizes everyone the same.

There can be no claim of income redistribution or whatever.

Another thing people always ask when talking tax policy, is, how do we replace lost revenue, if there is lost revenue? This question gets asked from both sides of the political spectrum. One question I would like to pose is, why do we need to replace lost revenue? This mentality of replacing lost revenue adds to mentality that government is to be bigger, regardless of whether the person believes in small government or big government. If one is for smaller government, a loss in revenue shouldn't be an issue. If you want to contract a government, you contract its source of revenue. If we keep trying to find ways to replace revenue, it's only going to get bigger.

[szh]

Good points!

Z

[themadscientist]

The flat tax is back in the conversation Zombie thread activate!

[IBCoupe]

Here's the theories:
Flat Tax: Takes away the same percentage from everybody.
Progressive Tax: Leaves behind the same percentage from everybody.
Fairtax: Would probably cost more to institute than everything else, so why not fix the system we have, instead?

[themadscientist]

Whatever theory is used, part of reform should focus on simplification of the tax code. A convoluted rube goldbergian behemoth of a set of instructions only serves those who have the professional assistants to identify loopholes and mechanisms to exploit them. That is not the average American.

[AZhitman]

Our taxes this year took Bex and I approximately 12 hours total to complete. It generated a stack of paper approximately one foot thick. Most of our "deductions" were laughable, thank God we can carry forward some capitol losses, and the end result is, it gets more complex and messy every year.

My gripe is with the double taxation. Simplistic complaint, but when every dime I earn is taxed, then every dime remaining that I spend is taxed, then that income is taxed for some other poor bastard... It's disheartening.

EDIT: You guys are WAY over my head with the math. I stand in awe.

[stebo0728]

Here's the theories:
Flat Tax: Takes away the same percentage from everybody.
Progressive Tax: Leaves behind the same percentage from everybody.

Pretty nice generalization there. Begs the question of just who "they" think they are, and whether "we" allow "them" to think they have a right to "leave behind". Taxation should not work in a way that "leaves behind" that endears a notion that the wealth does not belong to the individual but to the collective, even though no wealth would exist without the individual. Nah, the collective can only morally seek to take evenly, and not be concerned with what remains. If all that remains will be equal, whats the incentive to generate any more wealth than the slum dog?

Fairtax: Would probably cost more to institute than everything else, so why not fix the system we have, instead?

I find this statement inaccurate, we already do everything, or just about everything, that the FairTax would require for collection. Set up costs are exaggerated as opposition.

[stebo0728]

Oh and .... we already did the Flat tax fellas ... but without protections, and it became what we have now. Show me some portion of the Flat Tax that ensures that it wont become the same ol thing once again, and you MIGHT have another supporter. The FairTax does this, in 2 ways. For one, a supermajority is required to pass any rate hike. Two, and a bit less effective perhaps, is that the FairTax is right there on every receipt, you know what the rate is, theres no mucking it up in pages of tax code, it is what it is, and if you hike it, it will be painfully obvious. If a hike is required, and you can pass it off to the masses as necessary, then it succeeds, if its intended for more pork, it fails.

[IBCoupe]

Taxation should not work in a way that "leaves behind" that endears a notion that the wealth does not belong to the individual but to the collective, even though no wealth would exist without the individual.

Stebo, in what universe do you take away from something and not leave behind something else?

I realize that you have a different definition of "fair" than some others, but do you think maybe you could not go around pretending to know how they think?

Oh, and psst! Wealth wouldn't exist without the collective, either.

[stebo0728]

My objection did not indicate that we dont leave behind, or rather, it was not intended to if it did, my objection is basing tax policy ON what is left behind, which gets alot closer to "to each according to their need", I mean, how could it NOT sound like that?

[R/T Hemi]

From an older post of mine:

The problem is that people conveniently forget that when taxes are based on percentage, the person making more actually does pay more in absolute dollars in taxes. And does not get the same benefits in return, by the way (no extra voting rights, no extra schools for kids, or road improvements in front of their house, no better response from fire-fighters, etc., etc., etc.)!

We sugar-coat taxes as a percentage - even in flat tax proposals - to make it more palatable and feel less guilty about it! My problem is that we then take the additional steps and say "oh, the rich can afford it, so let's tax them at a higher percentage!"

That is where the unfairness occurs!

BTW, in many other taxes and fees and things, we do not make people pay more ... based on their income. Think about these:

- Should you pay more in property tax than your neighbor if you make more money, even if your houses are identical?

- Is your car excise tax based on your income?

- Is your sales tax percentage higher or lower than somebody else who makes more or less than you do?

- Your fishing license does not cost more based on your income!

Etc, etc., etc.

The fact is that we have become so inured to using percentage as a means of calculating personal income tax, that we are not likely to change that at all. So, all my (and others) flat tax proposals are still based on percentages - but I think that people opposed to flat tax don't realize that or "get it".

My suggestion: create a threshold to accommodate the "poor" (even if I think this is somewhat unfair, but I will play along with the libbies here) and then charge a flat tax on everything about that. No deductions (even for mortgage or number of kids, etc. ... those are choices, not privileges), no loopholes, including capital gains, etc.

For a hypothetical calculation, keep a floor of, oh, let's say $30,000 (change this to suit, if you think it needs to be different, or even add in a few thousand per dependent like we do today - I disagree with this, but I'll go along) and make the flat tax percentage be 20% (change that if you think it needs to be different) on everything above that.

Then - taxes could be done with a simple calculator (imagine the savings on tax professionals and the IRS alone!):

1. A person making $ 30,000 a year pays $ 0.2. A person making $ 40,000 a year pays $ 2,000.3. A person making $ 75,000 a year pays $ 9,000.4. A person making $ 100,000 a year pays $ 14,000.5. A person making $ 250,000 a year pays $ 44,000.6. A person making $ 500,000 a year pays $ 94,000.7. A person making $ 1,000,000 a year pays $ $ 194,000.

And so on.

Fair? I believe so!! Totally!!

Z

P.S. I have posted statistics from a site in other posts here, about the actual total tax revenue collected from the people who pay taxes. Not surprisingly, the large portion of taxes is, indeed, already paid by the so-called "rich".

That's right on Z, except for one very big thing. The rich hide money in deductions the poor can never afford. The guy making 500k a year has paid an accountant to help him bury his money in losses, like the new 370Z his business leased for the sexy new secretary with the giant hooters. Then there's the business trips out of town for the weekend, and the expense of taking the new secretary along in the company jet. Of course, he doesn't own the jet, it's a time share thing he writes off as, yep, another business expense. Then, because she's not cheap, he's provides a fine dining experience of Kobe steak, Chateaubriand, @ $199,95 and Chateau Mouton Rothschild 1982, a $700.00/bottle and he, of course, writes if off.

Yep. I pity the rich and the idea that they might pay more taxes.

Moral:
If you ain't blonde and well endowed, trickle down economics will never work for you.

[IBCoupe]

My objection did not indicate that we dont leave behind, or rather, it was not intended to if it did, my objection is basing tax policy ON what is left behind, which gets alot closer to "to each according to their need", I mean, how could it NOT sound like that?

Because that's not was it is. "We're going to set up a tax system that leaves you with the same dollar amount as everybody else" would sound like that.

"We're going to set up a tax system that leaves you at the end of the day with the same percentage of your income as everybody else" is just a slightly different form of "fairness" as you probably have - fairness meaning that everybody is treated the same.

[AZhitman]

The rich hide money in deductions the poor can never afford.

The poor [statistically] spend a lot of money on alcohol, cigarettes, payday loans and lottery tickets - I'm unsympathetic.

The guy making 500k a year has paid an accountant to help him bury his money in losses

The tax code applies to everyone. Example: I'm carrying forward capitol losses - no accountant required.

...like the new 370Z his business leased for the sexy new secretary with the giant hooters.

Something tells me you have an issue with that. What business of yours is it how he spends his money? He's stimulating the economy, so what's your gripe? Is it misogyny or jealousy?

Then there's the business trips out of town for the weekend, and the expense of taking the new secretary along in the company jet. Of course, he doesn't own the jet, it's a time share thing he writes off as, yep, another business expense.

What business of yours is it how he spends his money? He's stimulating the economy, so what's your gripe?

Then, because she's not cheap, he's provides a fine dining experience of Kobe steak, Chateaubriand, @ $199,95 and Chateau Mouton Rothschild 1982, a $700.00/bottle and he, of course, writes if off.

What business of yours is it.... Wait. OH, damn... I think I get it now - Is this your wife he's squiring around? Yeah, I guess I'd be cranky too.

If not, see above.

If you ain't blonde and well endowed, trickle down economics will never work for you.

More misogyny? Or did you overlook her MBA? I simply can't figure out what it is you're fussing about... unless you're wishing you were slugging Chateaubriand on a G6 with a sexy blonde... but that usually requires rugged determination, strong work ethic and self-sacrifice.

p.s. You're not a very good Liberal, getting into someone's personal business like that. You might want to find someone with a stronger lefty compass to "sway my position".