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Persuasive Argument for Progressive Taxes

drz-400

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I have noticed that some poeple, from my observation they are typically more partisan republicans, put forth two tax policies with justifications I feel are contradictory. Let me explain.

The first position goes as follows:

During a recession taxes should be lowered, to stimulate the economy.

The second position:

The flat tax is a more fair and equitable tax.

Lets inspect the first argument. What is being said? When an economy is in recession, by definition this means the GDP is falling. If GDP is falling, this means that by definition income is falling. So the argument goes, if income falls, taxes should be lowered to increase the disposable income in the economy, which will in turn be spent, invested, etc.

With this justification for lower taxes during a recession, why oppose progressive taxation?
 
I have noticed that some poeple, from my observation they are typically more partisan republicans, put forth two tax policies with justifications I feel are contradictory. Let me explain.

The first position goes as follows:

During a recession taxes should be lowered, to stimulate the economy.

The second position:

The flat tax is a more fair and equitable tax.

Lets inspect the first argument. What is being said? When an economy is in recession, by definition this means the GDP is falling. If GDP is falling, this means that by definition income is falling. So the argument goes, if income falls, taxes should be lowered to increase the disposable income in the economy, which will in turn be spent, invested, etc.

With this justification for lower taxes during a recession, why oppose progressive taxation?

Thread does not deliver what was advertised. This isn't an argument for progressive taxation, it's a sortof-kinda argument maybe against flat tax rates we're not sure yet we'll see. :D

Honestly, I don't think tax cuts during a recession stimulate the economy much. When things are already bad, people try to save, not spend. They use the tax cut money to pay down debt or stick it under the proverbial (or sometimes literal) mattress. To stimulate the economy, you need spending.

As far as progressive tax rates go, here's how I see it:
Adding $1000 to a poor person's income just makes them less poor. They'll spend the majority of that money just getting by, or paying down debt.

Adding $1000 to a rich person's income, on the other hand, is mostly disposable. They'll invest a large portion of that $1000, if not all of it, and earn a return on that income. In effect, that $1000 is worth more than $1000 because of the return it earns.

Also, taking 30% of income from someone earning 10k is a hugely different impact on quality of life than taking 30% of income from someone earning 100k.

Of course, this opinion will be extrapolated to mean I support 99.9% tax rates on rich people or something.
 
Thread does not deliver what was advertised. This isn't an argument for progressive taxation, it's a sortof-kinda argument maybe against flat tax rates we're not sure yet we'll see. :D

Honestly, I don't think tax cuts during a recession stimulate the economy much. When things are already bad, people try to save, not spend. They use the tax cut money to pay down debt or stick it under the proverbial (or sometimes literal) mattress. To stimulate the economy, you need spending.

As far as progressive tax rates go, here's how I see it:
Adding $1000 to a poor person's income just makes them less poor. They'll spend the majority of that money just getting by, or paying down debt.

Adding $1000 to a rich person's income, on the other hand, is mostly disposable. They'll invest a large portion of that $1000, if not all of it, and earn a return on that income. In effect, that $1000 is worth more than $1000 because of the return it earns.

Also, taking 30% of income from someone earning 10k is a hugely different impact on quality of life than taking 30% of income from someone earning 100k.

Of course, this opinion will be extrapolated to mean I support 99.9% tax rates on rich people or something.

Those things could all be things that support progressive taxation, but the point is if you think we should lower taxes when we are in a recession, when income falls, why would you be against progressive taxation when it already does that? If you think progressive taxation is unfair why are you in favor of lower taxes when income falls in a recession? The two contradict each other.
 
Those things could all be things that support progressive taxation, but the point is if you think we should lower taxes when we are in a recession, when income falls, why would you be against progressive taxation when it already does that? If you think progressive taxation is unfair why are you in favor of lower taxes when income falls in a recession? The two contradict each other.

Because a reduction in tax revenue from recession isn't a tax cut. You have a reversed cause-effect thing going on, I think.
 
Because a reduction in tax revenue from recession isn't a tax cut. You have a reversed cause-effect thing going on, I think.

Has nothing to do with revenue. If your income falls in a progressive tax scheme your tax rates will fall. This is why a progressive tax is known as a automatic stabilizer for those that know a little about macroeconomics. When a recession hits incomes are falling, so a progressive tax already achieve the desired effect of the first proposition. Yet the second proposition says this is unfair. So either you think that it really is unfair and we should not lower taxes in a recession, or it is fair and we should embrace a progressive tax scheme.
 
The tax code in America right now is a joke and needs to be completely rewritten. The fact that a multi-billion dollar industry exists to help people file their taxes indicates that something is seriously wrong.

Progressive taxes are a good idea, as long as they aren't too progressive. I love the simplicity of a flat tax though. So the best solution would be to have a flat tax on income above a certain threshold (chosen so that people who are already below the poverty line don't pay anything, and the tax won't force anyone below the poverty threshold). It's simple, it's fair, and it doesn't force people to choose between paying their taxes and feeding their kids.
 
I don't like progressive tax. I just see it as a necessary evil for the foreseeable future. Our gov't is far too bloated to be paid for by a flat-tax rate that wouldn't force the working-class to revolt or starve, and cutting THAT much out of the gov't bloat probably isn't going to happen anytime soon.

So in compromise, I say, just keep the progression modest and the top-end reasonable.
 
So in compromise, I say, just keep the progression modest and the top-end reasonable.

It seems ridiculous that a person who earns $600/year is taxed at the same rate as someone who earns $30 million/year.
 
It seems ridiculous that a person who earns $600/year is taxed at the same rate as someone who earns $30 million/year.

Seems perfectly reasonable to me. If everyone pays the same, then that is as fair as you can get.

Unless, of course you are an advocate of social justice. Then we must pay more, so that some don't have to pay at all....well I don't mean we pay more.... I mean, of course, you other people pay more.
 
Seems perfectly reasonable to me. If everyone pays the same, then that is as fair as you can get.

Unless, of course you are an advocate of social justice. Then we must pay more, so that some don't have to pay at all....well I don't mean we pay more.... I mean, of course, you other people pay more.

If you personally are faced with a rise or a fall in income, were would you prefer to see the lower rate?

Notice that when republicans advocate tax cuts to stimulate the economy they are stating they would prefer it when income is falling.

Strange how that is exactly what happens in a progressive tax scheme, w/out having to go through all the hooping and hollering in congress. It already happens.

Next question:

Is this unfair? If it is then both parties are guilty of the same "unfairness." Though that is strange, because fairness is usually described as something we all could agree to...
 
Has nothing to do with revenue. If your income falls in a progressive tax scheme your tax rates will fall. This is why a progressive tax is known as a automatic stabilizer for those that know a little about macroeconomics. When a recession hits incomes are falling, so a progressive tax already achieve the desired effect of the first proposition. Yet the second proposition says this is unfair. So either you think that it really is unfair and we should not lower taxes in a recession, or it is fair and we should embrace a progressive tax scheme.

False dichotomy.
 
Seems perfectly reasonable to me. If everyone pays the same, then that is as fair as you can get.

It kind of depends on how you define fair.

The poor tend to spend proportionally more of their income on basic necessities (food, shelter, clothes, etc.) than the rich do. So if they are taxed at the same rate, the poor are far more likely to be unable to meet their basic needs than the rich are. This is why a somewhat progressive tax will probably always be necessary. Like Goshin said, as long as it's reasonable, it's not really a big deal.
 
It seems ridiculous that a person who earns $600/year is taxed at the same rate as someone who earns $30 million/year.

its seems ridiculous that someone who doesn't use much government services pays 10,000 times more for what he uses over another person as well

it seems ridiculous that a majority of non tax paying voters can successfully vote into office those who want to raise the top rates on those who already pay most of the taxes
 
If you personally are faced with a rise or a fall in income, were would you prefer to see the lower rate?


I would, of course, prefer a lower rate in either case. I feel much more qualified to spend my money where I think it needs to be spent than any government employee.

Notice that when republicans advocate tax cuts to stimulate the economy they are stating they would prefer it when income is falling.

Now why would anyone advocate lower rates when income is falling and then want to increase taxes when their income is rising?

Strange how that is exactly what happens in a progressive tax scheme, w/out having to go through all the hooping and hollering in congress. It already happens.

Next question:

Is this unfair? If it is then both parties are guilty of the same "unfairness." Though that is strange, because fairness is usually described as something we all could agree to...

I didn't see that definition here Fairness - definition of Fairness by the Free Online Dictionary, Thesaurus and Encyclopedia.
 
It kind of depends on how you define fair.

I define it as 'the same for everyone, a level playing field',

The poor tend to spend proportionally more of their income on basic necessities (food, shelter, clothes, etc.) than the rich do. So if they are taxed at the same rate, the poor are far more likely to be unable to meet their basic needs than the rich are. This is why a somewhat progressive tax will probably always be necessary. Like Goshin said, as long as it's reasonable, it's not really a big deal.

To each according to his needs, from each according...... where have I heard this before?
 
To each according to his needs, from each according...... where have I heard this before?

probably DP-there are at least a handful that spout that line or something based on it constantly
 
To each according to his needs, from each according...... where have I heard this before?

Certainly not in this thread.

probably DP-there are at least a handful that spout that line or something based on it constantly

Yeah. All of them are conservatives.
 
Certainly not in this thread.



Yeah. All of them are conservatives.
any proof of that? but you might be confused-there are a couple people who claim to be libertarians that would say that. Maybe that is what you meant.
 
I have noticed that some poeple, from my observation they are typically more partisan republicans, put forth two tax policies with justifications I feel are contradictory. Let me explain.

The first position goes as follows:

During a recession taxes should be lowered, to stimulate the economy.

The second position:

The flat tax is a more fair and equitable tax.

Lets inspect the first argument. What is being said? When an economy is in recession, by definition this means the GDP is falling. If GDP is falling, this means that by definition income is falling. So the argument goes, if income falls, taxes should be lowered to increase the disposable income in the economy, which will in turn be spent, invested, etc.

With this justification for lower taxes during a recession, why oppose progressive taxation?
I'd never thought of that before. It's a good point.

molten_dragon said:
The poor tend to spend proportionally more of their income on basic necessities (food, shelter, clothes, etc.) than the rich do. So if they are taxed at the same rate, the poor are far more likely to be unable to meet their basic needs than the rich are. This is why a somewhat progressive tax will probably always be necessary.
I think that mischaracterizes the idea of a flat tax. A flat tax usually only applies to income over a certain level, and then kicks in. So it would be possible to make a highly progressive flat tax which gave everyone $20,000 annual income and taxed everything above this at a flat rate of, say, 80%.
 
The government provides us with certain services. Some of which, most would agree are necessary, like military, police, fire department, road repairs, etc., while others are a bit more controversial, such as public schools, social security, welfare, and soon, healthcare. However, whether we want them all or not, we're being treated to these services, and we do have to pay for them. Why should someone pay more for a service just because he has more money? Imagine going to buy a car, and when you ask the dealer how much he wants for a car, he replies, "depends, what is your annual income?" If the standard of living for a rich person winds up being the same as the standard of living for some bum on welfare, why would anyone work hard to make money? And if no one is making money, the government isn't making money, and if the government isn't making money, they can't provide those essential (or unessential) services, including welfare. So now everyone's standard of living goes down. That's socialism's #1 flaw. That's why I think we should have a simple flat tax rate. No, it wouldn't be a tax rate carved in blood on a sheet of granite, but it wouldn't get to be something that punishes people for being successful in their business as a progressive tax policy would do.
 
I'd never thought of that before. It's a good point.


I think that mischaracterizes the idea of a flat tax. A flat tax usually only applies to income over a certain level, and then kicks in. So it would be possible to make a highly progressive flat tax which gave everyone $20,000 annual income and taxed everything above this at a flat rate of, say, 80%.

any politician who voted for that would be toast
 
Actually it is in there:

6.
a. Having or exhibiting a disposition that is free of favoritism or bias; impartial: a fair mediator.
b. Just to all parties; equitable: a compromise that is fair to both factions.

ie everyone paying the same amount of tax for the same service
 
Sorry, did not see the reply initially in the quote box:

Cholla said:
I would, of course, prefer a lower rate in either case. I feel much more qualified to spend my money where I think it needs to be spent than any government employee.

A bit of a red herring. The government has spent money and must spend money to operate. We must raise revenues. We must levy taxes. How shall we structure our tax? Would you prefer to see the lower taxes at a loss or a gain? Maybe you would prefer to see the same tax rate for both, I address this along with your other reply below.

Now why would anyone advocate lower rates when income is falling and then want to increase taxes when their income is rising?
Risk aversion. After tax income will be lower if you do well, but higher if you do badly. This is important to a risk averse individual.
 
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