Do you believe a FLAT TAX is Fair? Why / Why not?

[Kolbjorn]

Well that can be true, but if you look at expenditures it doesn't make any sense to frame it like that. Over 50% of all spending in the US at least is Social Security or health care, which if you're rich gets you as much as you pay in, or if you're poor gets you much more than you pay into it. The military which is the next highest can get you more if you're rich, but it'd be a stretch to say the lions share of rich people are in the military industrial complex.

Next its interest on the debt, which is arguably financed by the rich since they pay proportionally higher in taxes to benefit the less wealthy, then education, which generally the wealthy exempt themselves from through private education.

So if you simply go through all the top expenditures, you see that the wealthy benefit as much as or less than the less wealthy categorically. I won't disagree that there are wealthy people that disproportionately benefit from public services, but the disproportionate costs by low income people far outweigh the wealthy on average.

You're trying too hard to directly assign value of government spending to individuals.

For example, how much of the U.S. current economic dominance was built by having a strong public education system? If the answer is not zero, then "the wealthy" gain a significant amount of indirect benefit from education spending. I'd personally rather hire workers that can read over workers that can't...

"The wealthy" don't need private security in the U.S. Would you rather make $500k in NYC, or in Hyderabad? Yeah, your cash theoretically would go further in Hyderabad, but you'd have to pay for quite a few things yourself that are just default in the U.S. The list of things we take for granted is long... talk to your colleagues from somewhere in the developing world about it some time.


My point here is that defining value based on individuals is wrong. You want to evaluate benefit to GDP growth, potentially growth of strategic industries, and so on, not get hung up on individuals.

[THE Bigzoman]

I thought part of the flat tax argument was to eliminate a lot, if not all, of the tax breaks and exceptions and have just a flat, simple, tax concept.

Not saying the flat tax idea is solid, I'm just questioning the point of addressing tax breaks and exceptions, which I thought was part of the core idea of the flat tax simplification.

It is.

Most Flat Tax proposals have also included provisions that scrap the entire tax code, or at least most of it.

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There is nothing saying you cannot have a basic exemption level with a flat tax. I specifically stated in my response that would be the only way I would see it viable.

The main argument for a flat tax aside from being the same for everyone is that it simplifies filing taxes. Adding a basic exemption for everyone doesn't add much in terms of complication.

One of the biggest drawbacks of progressive taxation is that most countries have enough ways to "reduce" your income that makes those higher brackets meaningless.

So have a higher flat tax, and a basic exemption at the poverty line (or wherever you want to put it), and it seems to be a good middle ground.

Thing is, that's what a good chunk of flat tax proposals already have to some degree. It's just that people who argue for and against the policy assume that taxes exist in a vacuum.

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You realize that the money going to accountants and tax professionals IS money in the economy, right?

Not all transactions are created equal.

Especially when they involve services whose existence relies on something that's unnecessarily complicated.

[downnola]

The progressive tax system is fine. If anything we could use another bracket or two at the top end. The economy is scaling upwards and so should the tax system.

[ShimmerSwirl]

No because low income means you pay more of your income relative to someone who is rich. Someone who has $1000 and pays $150 in tax is more affected than someone who has $10000 and pay $1500.

Wait I know what to do, lets raise minimum wage to $30/hr so everyone makes at least 60k a year. That way everyone has plenty of money to live on even after paying 15% tax. I honestly don't see any drawbacks to this plan, I guess that makes me a liberal.

[Hiricine]

You're trying too hard to directly assign value of government spending to individuals.

For example, how much of the U.S. current economic dominance was built by having a strong public education system? If the answer is not zero, then "the wealthy" gain a significant amount of indirect benefit from education spending. I'd personally rather hire workers that can read over workers that can't...

"The wealthy" don't need private security in the U.S. Would you rather make $500k in NYC, or in Hyderabad? Yeah, your cash theoretically would go further in Hyderabad, but you'd have to pay for quite a few things yourself that are just default in the U.S. The list of things we take for granted is long... talk to your colleagues from somewhere in the developing world about it some time.


My point here is that defining value based on individuals is wrong. You want to evaluate benefit to GDP growth, potentially growth of strategic industries, and so on, not get hung up on individuals.

Well in a thread titled "is a flat tax fair?" you made a utilitarian argument that doesn't address fairness. If the current system isn't fair to individuals in aggregate then its not fair to the group as a whole either. I made a point before that post that fairness isn't necessarily something to strive for, for its own sake, but you'd imagine that the fairest system would mean that the spending on individuals closely matches what the individuals put in, or at least the returns are equitable for each person relative to the amount taxed.

[Deleted]

The thing is, the binary choice between free market induced inequality and state enforced equality is a fairly recent phenomenon. For most of history, the norm was government power being applied to forcibly redistribute wealth from the poor to the rich, and many would argue that this process continues to the present day what with crony capitalism, regulatory capture, and the like.

Yes you are right. Docs like Requiem for the American Dream names some examples of ways that even a democratic government ensures that the power stays very un-even and favors the rich. The non-democratic countries are of course even more susceptible to corruption.

People think that just because they have a democracy then everything is fine, but it is truly the corruption that you gotta watch out for and combat. A corrupted democracy is no different than top power ruling.

[BuckSparkles]

Actually I like the idea of fair tax. People can STFU about taxes and trying to tax the rich heavily.

Everybody would pay their %. How about that equality, baby?

[Antiganon]

Actually I like the idea of fair tax. People can STFU about taxes and trying to tax the rich heavily.

Everybody would pay their %. How about that equality, baby?

To each according to his needs.

From each according to his ability.

THAT is the way a fair society operates.

[Karfal]

No because low income means you pay more of your income relative to someone who is rich. Someone who has $1000 and pays $150 in tax is more affected than someone who has $10000 and pay $1500.

No you're not. 15% is 15% you don't pay more or less relative to jack shit.

15% is 15%



And yes a flat tax would always be the best answer. Get rid if all the bulkshit rights offs and loopholes.

[BuckSparkles]

To each according to his needs.

From each according to his ability.

THAT is the way a fair society operates.

Get that commie garbage out of here. A CEO who works his whole life doesn't owe anything to some bum living with his mother in her basement.

[Deja Thoris]

How did this get to 24 pages? Flat tax rates are dumb in that they place undue hardship on low earners.

[Kujako]

How did this get to 24 pages? Flat tax rates are dumb in that they place undue hardship on low earners.

It's because poor dumb people who think they'll soon win the Loto don't want to pay high taxes once they're rich.

[Thepersona]

Actually I like the idea of fair tax. People can STFU about taxes and trying to tax the rich heavily.

Everybody would pay their %. How about that equality, baby?

Because it's been explained before that a flat tax is not fair, as it places more burdens on poor people (because they have a high percentage of their income dedicated to consumption).

[Yvaelle]

It is.

Most Flat Tax proposals have also included provisions that scrap the entire tax code, or at least most of it.

Ya I mean it really makes no sense to have a flat tax unless your goal is simplification of the tax code.
There is no other reason to do it, unless you want to reduce the tax code to the length of a tweet.

[Thepersona]

Get that commie garbage out of here. A CEO who works his whole life doesn't owe anything to some bum living with his mother in her basement.

The CEO owes more to society than the bum living with his mother.
For starters, without police/fire departments/governmental agencies/roads/etc. He wouldnt have his fortune, and he needs more of said infraestructure than the poor other guy

[Chapel]

That's what they claim, but they basically never talk about it other than in generic terms, and they focus on the tax brackets themselves for no reason.

The only difference between a flat tax system and a progressive tax system is that a flat tax system only has one tax bracket; a progressive system has multiple. They both have the same capacity to include breaks and exceptions, and if that's your real issue, you can (and should) address it by actually targeting those, not the brackets.

Another defense that crops up when you point out the hardship of making someone struggling to make rent on $10k/year pay 15% tax on top of everything else, is "well, what if we didn't tax people making less than $15k or something?" Congrats, that's a progressive tax system and you've revealed that you don't actually support a flat tax.

And you all never talk about the 'freebies at the expense of everyone else' portion. My middle class taxes go to giving them what they didn't earn while still taking it away from me and then demanding more. A flat tax (implied without the deductions and other taxbreak loopholes) is 'fair' because it taxes everyone equally proportional to their earnings. If you want everone to 'feel' the same effect, elliminate the income tax and make it a national sales tax of 10%. The rich, who buy more expensive things (like Lambos and yahts), will get taxed accordingly, and the less fortunate will make better purchases (ie. no gold teeth or tattoos). Yes, I'm an ass, so I choose to use that example...

[Thepersona]

And you all never talk about the 'freebies at the expense of everyone else' portion. My middle class taxes go to giving them what they didn't earn while still taking it away from me and then demanding more. A flat tax (implied without the deductions and other taxbreak loopholes) is 'fair' because it taxes everyone equally proportional to their earnings. If you want everone to 'feel' the same effect, elliminate the income tax and make it a national sales tax of 10%. The rich, who buy more expensive things (like Lambos and yahts), will get taxed accordingly, and the less fortunate will make better purchases (ie. no gold teeth or tattoos). Yes, I'm an ass, so I choose to use that example...

That's stupid. You have any econ or business background?
Rich people spend less money in consumption (as a percentage) compared to poor people. This type of tax that you're proposing burdens more the poor people than the rich.

[Chapel]

That's stupid. You have any econ or business background?
Rich people spend less money in consumption (as a percentage) compared to poor people. This type of tax that you're proposing burdens more the poor people than the rich.

I have both, and you are incorrect in your assumption. The rich will always spend greater amounts, and thereby get taxed in greater amounts, even if they purchase less frequently. And how is your use of percentage based consuption anymore relevent than my percentage based sales tax? The non-rich will buy 1000 things for a total of $500 in taxes, where the rich will buy one item for $20,000 in taxes. Consumption taxes will always affect the rich greater since whether they are income-based or inheritence based, they will be taxed on what they spend.

[Thepersona]

I have both, and you are incorrect in your assumption. The rich will always spend greater amounts, and thereby get taxed in greater amounts, even if they purchase less frequently. And how is your use of percentage based consuption anymore relevent than my percentage based sales tax? The non-rich will buy 1000 things for a total of $500 in taxes, where the rich will buy one item for $20,000 in taxes. Consumption taxes will always affect the rich greater since whether they are income-based or inheritence based, they will be taxed on what they spend.

Because they spend less money as a percentage, and then they're taxed less effectively. A flat tax is a burden on poor people, because they have less money to spend...
Come on, flat taxes as a regressive form of taxation is part of econ 101 and macro 101

[Antiganon]

Get that commie garbage out of here. A CEO who works his whole life doesn't owe anything to some bum living with his mother in her basement.

How was the CEO able to build a company?

Surely not because society provided the infrastructure, trained workforce, and consumers with available capital to spend?

No, he pulled his bootstraps so hard that the entire company just coalesced out of thin air.