Flat TAX

[TurtleDude]

what evidence do you have that this is his, or any other person's agenda for raising taxes on the rich?

i don't expect the Democrats to get one more seat, simply due to a tax-hike on the rich. That's not the intention.

.....unlike other folks, the Dems put country over party.

you need to post that on the comedy thread

 

[Donc]

Quote TurtleDude

you cannot demonstrate that the vast majority of people in the top two percent use more of the "industrial military complex".

Not many poor have stock in Blackwater/Halliburton, Lockheed, and Boeing, whoever is making our bombs in China. Most of the poor make up the armed forces (many eligible for food stamps) that are using the product of the military industrial complex.

Seems to me if you had a sizable amount of stock in any of the above, you would want to feel all fuzzy and safe from furners storming the ramparts, while rolling in your dough in the vault. Why would you object to paying a few extra quid in taxes for the protection of our country?

The poor use "free medical care" far more than the rich

More and more middleclass have been knocking on the doors of Medicaid lately. Gasp...and an occasional top tier have been seen hiding under a hoodie waiting in line at the local clinic as well.:shock:

the poor use the prison system far more than the rich Do you know what it costs to keep someone a year in a federal prison. How many people with legal incomes over 200K a year are in federal prison vs those with incomes under 45K a year (legal incomes-ones subject to tax(

In 06 it was $60 billion a year, don’t imagine it went down much in spite of the rash of privatations.

Using the fox news standby “some say” that they are incarcerated not only to protect the poor and middleclass but upon occasion the rowdies manage to storm the fortifications/private gated communities and steal from the top tier as well.:2wave:

 

[Canell]

Wow, what I've read in this thread really stunned me. And that is America - the beacon of freedom, self-reliance and hard work. One can imagine how things has got out of hand in the world. :roll:

That pseudo-fair attitude of "let's take from the rich (they have plenty anyway) and give to the poor" is really sad to watch.

 

[Gargantuan]

Wow, what I've read in this thread really stunned me. And that is America - the beacon of freedom, self-reliance and hard work. One can imagine how things has got out of hand in the world. :roll:

That pseudo-fair attitude of "let's take from the rich (they have plenty anyway) and give to the poor" is really sad to watch.

That's not the idea at all. Some espouse that though.

On an unrelated note, why the Ray Mabus facebook?

 

[Canell]

That's not the idea at all. Some espouse that though.

So, why should I strive to be wealthy when I am going to pay more taxes (meaning progressive tax)? Isn't that discouraging?

On an unrelated note, why the Ray Mabus facebook?

See the info page.

 

[Gargantuan]

So, why should I strive to be wealthy when I am going to pay more taxes (meaning progressive tax)? Isn't that discouraging?



See the info page.

No it isn't. You don't pay more taxes. Everyone has a fair burden. 33% from someone earning 200k a year is fair. 10% from that same person is totally unfair when you take 10% from someone earning 30k a year.

That guy is ridiculously obsessed with using his "The Honorable" prefix.

 

[Canell]

No it isn't. You don't pay more taxes. Everyone has a fair burden. 33% from someone earning 200k a year is fair. 10% from that same person is totally unfair when you take 10% from someone earning 30k a year.

Sure. Now I would like to know how you calculated the numbers. Why 33% and not 30% or 37%? Why 10% and not 8% or 12%?
So, what is the state now, some charity?

That guy is ridiculously obsessed with using his "The Honorable" prefix.

That's right, I am. eace

 

[Gargantuan]

Sure. Now I would like to know how you calculated the numbers. Why 33% and not 30% or 37%? Why 10% and not 8% or 12%?
So, what is the state now, some charity?



That's right, I am. eace

Not at all, Mr. Secretary. I used 33% because it is one of our tax brackets.

 

[cpwill]

If it truly is a flat tax, how can it favor anybody?

the argument is that because the wealthier can 'more easily afford to part' with the rate, it favors them over the rich.

mind you, this takes tax policy out of the realm of objective measures, and puts it into the realm of subjective measures, where we battle each other in a never-ending search for "fairness"; while none of us agree on it's definition. I would think that a Flat Tax would have many notable benefits - not least of which is that it would engender a sense of "all of us in this together" rather than a seeking for "how can I get someone else to pay for X" or "how can I lower my tax burden which will screw over that other guy".

something I wrote a bit ago on our current ugly behemoth:


it's less the taxes, and more the structure. currently our tax system costs us $431 Billion annually - just to figure out how to comply with the damn thing. thats' $431 Billion wasted on paperwork. that's huge - it's fully 3% of GDP that could be plowed right back into growth instead wasted on compliance, avoidance, and paperwork. Our tax structure provides all kinds of incentives and tax loopholes for people to engage in economically unproductive behavior; shifting income, investment, wealth, and location around so as to minimize tax exposure rather than maximize productivity. To be blunt, it diverts massive amounts of wealth from productive to less (or straight up 'un') productive uses every year.

The Laffer center estimates that if we could just cut our complexity in half, we would gain 0.5% of extra growth every year which means it would compound over time. That's why both the Bi-Partisan Bowles Simpson plan and the 2012 House Republican plan strip out all the corporate welfare, tax loopholes, and complexities in the tax code and replace it with flatter, lower rates with minimized compliance costs and minimized ability to avoid taxes as a necessary step in stimulating economic growth. That they are revenue neutral (IE: since they cut rates only enough to make up the gain given by the stripping of the loopholes) is an added bonus - though Bowles-Simpson estimates it will get us an extra $100 Billion a year, which it suggested we should automatically peg towards debt reduction. Both of those predictions, it should be noted, are (as i understand it) scored statically; given the likely growth following that significant reduction in complexity there is a strong argument to be made that revenues would rise by considerably more than that.

Our tax code punishes people for saving and investing (which is economically beneficial) and rewards them for going into debt in order to consume (which is economically harmful). It punishes people for getting married and forming stable families in which to raise children. It discourages new business formation and investment. It encourages malinvestment and helps to feed bubbles. On top of all that, it costs us a huge amount of money to maintain. We could fight four wars the size of Iraq and Afghanistan, and still have enough left to fund the Department of Education, the Department of Agriculture, the Department of Energy, NASA, and the EPA; just on the cost of compliance alone.

And instead we choose to waste it on a wealth-destroying labrynth of a tax code that nobody understands. Because it's politically easier to demagogue anyone who tries to fix the damn thing.

:sigh:

anywho, that's the first thing that comes to my mind, anywho, when someone asks me how damaging our tax system is to our country.


But I think perhaps the worst part is something a bit more insidious. It's been well-bandied about that 45% of households don't pay income taxes. Another figure - slightly less known - is that 6 out of 10 households now receive more money from the Federal Government than they pay in taxes, so the 45% actually understates the matter. The US has the most progressive tax structure in the industrialized world. (I know, it surprised me too.) Now, a progressive tax code is supposed to have the wealthy pay more than the middle class or the poor as a percent of their income. I get that, and I get the basic notion of fairness behind it. But it also strikes me that the basic "fairness" of such a system depends on the middle class and poor actually paying something. Not as much as the rich, but something. Even if it's just one percent, you should pay something on tax day rather than looking forward to it as a day when the government sends you a big ole fat check.

Instead we've allowed our politicians to turn our progressive tax structure into a weapon of class warfare, and rewarded them for encouraging us to use it to try to take from others. Not only should I not pay my fair share of government, I should have you cover my share, and then I think I should have you pay me a little something extra on the side. Our tax code encourages dependency on government rather than self-reliance. It encourages us to turn on each other and form opposing blocs seeking to suck each other dry rather than fostering a sense of national unity and a belief that we are each helping to pay for the necessary costs of government. Politicians can take advantage of people who are convinced that Someone Is Out To Get Them, and they can take advantage of people who think that They Can Get Something For Nothing; but it's harder for them to take advantage of people who are convinced that What We Need Is To Come Together To Have Responsible Governance. Our tax code doesn't just hurt our poor (who stand the most to lose from the economic losses it encourages), it doesn't just hurt our national pocketbook (see rant above), it hurts our soul. It encourages greed, grift, lying, and cheating in the average man and woman. People who would never steal from their neighbor's house are tempted and encouraged by the complexity and messaging of the system to steal from him by taking advantage of the complexity of the tax code to minimize their burden and increase his. It weakens what it means to be American, to be in something together, to take care of your own costs and be responsible for your own self. It weakens our sense of community by setting us against each other and putting us into a zero-sum game of I-win-You-lose; it harms our sense of ourselves as a unified nation even as it weakens our ability to project peace and stability in the world abroad.





Flattened, Flat, or Fair; I am willing to take any of these. If the President had backed his own Simpson-Bowles Commission that he picked and tasked I would have been writing my congresscritters and telling them that I expected them to support the Best Idea The President Had Ever Backed; that I would not accept Party Politics as an excuse for continuing to load down the nation with this behemoth-burden of a tax code.

Imagine a world where the economic news of the last 6 months was positive rather than negative. Imagine a world where capital was flooding in from overseas; where our entitlements weren't looming disasters threatening to sink our government into insolvency or hyperinflation. Imagine a world in which future policy was stable and bipartisan enough to where the businesses currently holding their trillions in reserve out of fear were more confidently able to invest.

That's the world that the President was offered when Bowles-Simpson surprised everyone and actually took their job (to be both Bi-Partisan and find a way to solve our fiscal nightmares) seriously. Had he decided to take them as seriously as they had taken him, he could have built a solid majority of centrist Democrats and Republicans; with the DeMints' and the Van Hollens both on the outside screaming.

Nancy Pelosi declared it dead on arrival.

 

[PeteEU]

Another major problem with flat tax is that during times of economic contraction the revenue will fall dramatically more than with a progressive tax system.

This happens because the first too loose their income are the poor and middle-class and the last is the upper classes. And since the poor and middle class account for a huge portion of the tax basis, then the the tax income will fall fast and harder during an economic contraction if you have a flat tax system.... and this is exactly what happened in many Eastern European countries who started to run massive deficits and had to be bailed out by the IMF and EU.

 

[Canell]

Wow, cpwill, I was just thinking of quoting "The Law" of Frederic Bastiat when I saw your signature. :thumbs:

 

[cpwill]

Another major problem with flat tax is that during times of economic contraction the revenue will fall dramatically more than with a progressive tax system.

This happens because the first too loose their income are the poor and middle-class and the last is the upper classes.

worth noting - this depends on whether or not you are taxing capital gains.

 

[Canell]

Another major problem with flat tax is that during times of economic contraction the revenue will fall dramatically more than with a progressive tax system.

So the taxes must be raised but for everyone. Fairness is far more important than the budget.

 

[PeteEU]

So the taxes must be raised but for everyone. Fairness is far more important than the budget.

LOL, so you are saying that during an economic contraction, then because there are a lot of people going out of work, then the over all tax rate has to go up on those that are working so that the revenue needed will still come in? Seriously? You do understand what that would do to the economic contraction, since the tax raising would not be minor?

 

[PeteEU]

worth noting - this depends on whether or not you are taxing capital gains.

Actually if you are not taxing capital gains then it would be even worse. Not only is a large part of the rich's income capital gains income, but if you leave it off the tax bill then that means the tax burden on the richest will next to nothing relative to now. It would be even worse than the present system where the poor pay next to nothing.. at least the poor cant afford to pay taxes... but in such a flat tax system with no taxes on capital gains, then the system would favour rich non working people big time and these people CAN afford to pay taxes.

This would mean of course that when there is a contraction then the basis incomes from where the tax income does come from would be fewer and far more on the lower and middle class areas, who as we know will loose their jobs first during a contraction.

If you then do tax capital gains then it would be slightly better on the income side during a contraction, but not by much since the tax rate is still flat. It would not be able to absorb the short fall in the lower and middle class loss of tax revenue since the upper class tax revenue would be pretty much (relatively speaking) unchanged. The short fall would not be as big though.. relatively speaking.

Basically as I have pointed out now in several replies... Flat tax = really stupid tax system.

 

[Canell]

LOL, so you are saying that during an economic contraction, then because there are a lot of people going out of work, then the over all tax rate has to go up on those that are working so that the revenue needed will still come in? Seriously? You do understand what that would do to the economic contraction, since the tax raising would not be minor?

I stand for what I wrote - justice/fairness first. Money are always deficient.

Economic growth/contaction? That's all crap rethoric within the bankers paradigm.

 

[cpwill]

Actually if you are not taxing capital gains then it would be even worse.

in a downturn capital gains are the first things to go. that's why it becomes a downturn.

Not only is a large part of the rich's income capital gains income, but if you leave it off the tax bill then that means the tax burden on the richest will next to nothing relative to now. It would be even worse than the present system where the poor pay next to nothing.. at least the poor cant afford to pay taxes... but in such a flat tax system with no taxes on capital gains, then the system would favour rich non working people big time and these people CAN afford to pay taxes.

you seem to be working from a different set of assumptions when it comes to the design of a proper tax code. The capital gains tax is the punishment that we impose on people for investing in our nation - if our goal is to produce economic growth (with all of the jobs, higher wages, and better standards of living that come along with it), then we need to encourage investment and production, not punish it.

This would mean of course that when there is a contraction then the basis incomes from where the tax income does come from would be fewer and far more on the lower and middle class areas, who as we know will loose their jobs first during a contraction.

If you then do tax capital gains then it would be slightly better on the income side during a contraction, but not by much since the tax rate is still flat. It would not be able to absorb the short fall in the lower and middle class loss of tax revenue since the upper class tax revenue would be pretty much (relatively speaking) unchanged. The short fall would not be as big though.. relatively speaking.

the "income" of the wealthy fell more rapidly during the recession due to the fact that (as you noted) they receive a larger percentage of their "income" from capital gains.

Basically as I have pointed out now in several replies... Flat tax = really stupid tax system.

yes, you have said that, but you haven't really made an effective argument for it. if we had a flat tax on income (for example) with no deductions, then we still wouldn't lose as much revenue as you are suggesting for the simple reason that our higher earners would still be paying more in gross. reductions in revenue could be met with reductions in spending which would have a stimulative effect on the economy, and there you have it - recovery.

 

[molten_dragon]

I don't think that a completely flat tax is right. There are people in America (and always will be) who cannot bear any tax burden. I believe that no one should ever be forced to choose between paying their taxes and feeding their children (or paying their rent, or being able to afford bus fare to get to work tomorrow, etc.)

I would definitely support a flat tax with a single deduction for basic living expenses (based on family size, and probably geographical location). It would be far simpler, more fair, and still protect the poorest Americans.

 

[Geo Patric]

progressive tax is couched in high sounding arguments of fairness designed to serve as a facade for a vote buying appeal to class envy.

still have not replaced that scratched record, eh? envy was not good enough once it was pointed out that RICH folks with a social conscience support it too... now you gotta include 'vote buying' to account for Gates... who needs to buy votes? well, how do you account for Adam Smith's support?

well, it may surprise you that some conservatives that actually think about what it means to BE a conservative... disagree with you.

In his paper for the new England Law Review entitled THE CONSERVATIVE CASE FOR
PROGRESSIVE TAXATION, Mark S. Hoose (an international tax expert) takes a look at the issue:

Various interest groups, many laboring under the rubric of “conservative,” [are] intensifying their efforts to persuade the Administration and Congress to enact significant, if not radical, changes to the progressive federal income tax system in place since 1913 . . .these groups seem ready to take the next logical step for many—elimination of the progressive income tax altogether.

However, the question arises as to whether these reform proponents are in fact “conservatives.” In particular, it is questionable whether these groups represent what may be called “classical” conservative thought.

there follows a fascinating review of political conservatism... almost convinced me. very worth reading. he makes the point that the progressive income tax was actually a 'conservative' policy!

Following the Civil War and Reconstruction, conservatism made a bit of a comeback,
particularly in the “Gilded Age” of the 1890s, with its emphasis on economic liberty.

as i mentioned earlier.... he notes that there is really no such thing as a (legitimately) conservative ideology (as i believe i noted) but that it does have certain "“canons” of conservative thought and cites the thinking of RUSSELL KIRK, a leading conservative of the Goldwater era and author of THE CONSERVATIVE MIND: FROM BURKE TO ELIOT:

Importantly, Kirk emphasized that conservatives must accept some change, noting that “a body that has ceased to renew itself has begun to die.” Conservatives must accept some social improvement, but also must see to it that change and permanence are reconciled in society. The conservative, in Kirk’s view, “favors reasoned and temperate progress.”

now , see... THIS is conservatism as i understand it.. or as it should be. i will no trouble you further... he concludes:

progressive taxation can further voluntary community, provide restraints on power, and enhance social peace. Progressive income taxation is no more a taking of private property than any other form of taxation. Radical economists are the ones who wish to abandon progressive income taxation, in the name of an institution destroying “efficiency.” Those who wish to change have not met the high burden required by classical conservatives in overthrowing an established, workable institution. Retaining progressive income taxation would be a mark, instead, of prudence.

not a mention of 'vote buying' or 'envy' in the whole article!

glad to have given you the term 'Pimp' as metaphor... you are using it to good effect, though perhaps a little too often... overuse weakens the effect.

geo.

 

[TurtleDude]

rich folks who want to stay rich and kill of the less well funded competition support progressive income taxes. so do those who bank on the dems having power.

I have a great idea-if those wealthy people so love such a tax I suggest they pay extra

demanding others be forced to pay more is disgusting

 

[Thunder]

rich folks who want to stay rich and kill of the less well funded competition support progressive income taxes. so do those who bank on the dems having power.

do you know how many Republican Presidents have supported the progressive income tax?

 

[TurtleDude]

do you know how many Republican Presidents have supported the progressive income tax?

It makes sense if you want to win elections to support taking the money of the few to buy the votes of the many

 

[Thunder]

It makes sense if you want to win elections to support taking the money of the few to buy the votes of the many

please give examples of Reagen, Bush 1, or Bush 2, using the prospect of raising taxes on the rich, in order to win the election.

 

[apdst]

So then someone who earns 100k a year should send in 10,000, as should someone who earns 20k a year, and someone who earns 60 million a year? Is that really your belief?

That's what I think, except I think it should be 5% vice 10%. Every single wage earner--individual and corporate--in the country, regardless of income level should crap up 5%, no deductions, no credits, no breaks, no nothing. They have three payment options: weekly, quarterly, or annually.

Period! Straight up! It would stop all the cry baby bull**** about who pays whose fair share and inject truckloads of confidence into the private sector.

 

[cpwill]

Eh, I would still say "over the poverty line". American citizens should be able to feed, clothe, and house their families before the government starts F'ing with them. That way also the tax is just as progressive as the current payroll tax is regressive.



however, it's not politically feasible right now. the best we can hope for is something along the lines of the Simpson-Bowles/Ryan proposals.