Flat Tax Thread

Aimee Mann called, she wants her song back.
-- Jaap (nomenestome...), September 12th, 2003.
CYNDI LAUPER CALLED SHE WANTS HER INSTANT FASHION VICTIM KIT BACK
-- AaronHz (aaronh...) (webmail), October 8th, 2004 1:04 PM. (AaronHz) (link)
2001 called they want their thread back
-- JaXoN (jaso...), July 23rd, 2004.

I want my money back

Let's ignore taxes for a moment and just imagine two families.

The first one has two kids and brings home $2000 a month. The second has two kids and brings home $20000 a month.

Ok, so the first family has a bunch of expenses:

-$800/month in rent for their house.
-$350/month grocery bill
-$200/month car payment
-$100/month (average) energy/heating bill
-$150/month car insurance
-$150/month gasoline

Ok, we're already at $1750. We only have $250/month left for any health expenses, entertainment, clothing, furniture, appliances, not to speak of any savings or debt (and most families at that income level would realistically have debt and not be able to save much of anything.

You can quarrel with individual numbers here, but I think my overall estimate is within reason.
Now the second family:

Let's say they have a nice home, so:

-$6000/month mortgage and taxes
-$800/month grocery bill (they buy all kinds of nice organic and gourmet stuff)
-$600/month car payment (two nice cars)
-$300/month car insurance (two nice cars, kid on insurance too)
-$250/month average energy bill (home is bigger, more use, etc.)
-$500/month gasoline (maybe one is an SUV, they drive more, etc.)
-$1500/month private schools, two kids (not even really fair to include for comparison purposes, but doesn't matter)

You add all that up and you only get $9950 - not even half their income! Plenty left over for the other stuff, not to mention savings, investments, college accounts, etc.

So now what happens if you take 30% of each. Suddenly family one can't even pay its bills. Family two would still have a chunk of income left over totalling about double family one's entire income.

No, it's not a penalty. It's a recognition of the different difficulties one faces at a lower income level and an attempt to lessen the odds of becoming trapped in poverty.

and kudos for guessing i was born with money (incorrect) just because i believe in fairness.

1. cut taxes for the little guy and raise taxes for the big guy

or

2. cut taxes for the little guy THE END

2 seems a lot more fair.

But, out of curiosity, where would you draw the line for tax exemption? After all, right now a family of four with the income I cited would be, I think, in the 15% tax bracket. (I could be wrong about that though). I'd be all for exempting that family from taxes or reducing their rax rate.

Also, as you move up the income levels, the percentage differences become relatively small (25% vs. 28% vs. 33% vs. 35%) as it is. So it's not like it's a huge extra burden. And I'd be surprised if a lot of people in the highest income bracket aren't so good at avoiding taxes (through expert accountants and such) that they actually pay a LOWER perecent of their income as tax than some other brackets.

I say it's a good idea as long as it really IS a FLAT tax (ie. no loopholes for rich fukes who want to pay $1 on their prime Manhattan real estate).

-- Squirrel_Police (goblinatri...) (webmail), September 18th, 2006 9:25 PM. (Squirrel_Police) (link)

HI DERE HIGH SCHOOL ECONOMICS e.g. marginal propensity to save

I'm sure I've used an extremely simplistic argument mind you.

oh great, we got reaganite rugged individuals on here.

i'd say more kooky libertarian style is at play here.

-- Squirrel_Police (goblinatri...), September 18th, 2006.

i guess it's going into a broader discussion of redistribution of wealth which is a happy go lucky dream in theory but a tremendous scam and empty promise in practice

-- Squirrel_Police (goblinatri...), September 19th, 2006.

Oh shut up. Go dry hump Ayn Rand's corpse.

Because if we adopt your magical flat tax of 30%, then cut taxes off entirely for any family making, say, $20,000 or under, then a guy who makes $20,000 who works really hard and gets a raise of $5,000 would suddenly be bringing home $17,500. If only there were some equally magical way we could arrange a tax system so that things like this didn't happen ... say, I dunno, a progressive graduated tax, like the one we have now?

i just don't understand why the richer family should SUFFER (and maybe it's not dire suffering but it's still a financial burden) in order to help out the poorer family

The idea here is that people are not all autonomous particles who have nothing whatsoever to do with one another. We live in a society, and whatever successes we have are made possible by everyone else in that society, including our government and its laws. The notion behind a progressive tax system is that the people who have benefited most from our society will make the biggest contribution to sustaining it. (For instance: if a trucking company makes millions shipping things on public roads and infrastructure, and it's then able to pay some of its employees handsomely, it makes sense that the company and its handsomely paid executives will take on an ever-so-slightly greater proportion of the cost of maintaining those roads. Same goes for an agricultural company that relies on cheap labor; same goes for a guy whose education was launched by a top-notch public school, a school whose existence was partly made possible by the shittier public school across town that some other folks went to.)

if you can't make ends meet, you can't make ends meet.

But just imagine the big-government bureaucracy in the Department of Disposing of the Bodies Piling Up in the Holding Pen Outside the Emergency Room!

In other words: those who are getting the best deal out of America should be most inclined to help keep America possible.

You can get round this by making $20,000 a tax free allowance so that only income over $20,000 would be taxed so your mans take home would be 23,500 after the raise.

There are far too many tax allowances and loopholes that make tax easy to legitimately avoid if you can hire the right advisers. However this doesn't mean that a progressive and redistributive isn't a good thing. One solution is two have a two layered tax system. In the UK everyone pays tax and national insurance tax is dodgeable in so many ways through the tax code, NI has no exemptions, admittedly only 1% is levied on the entirety of a persons income and it only applies to income earned from employment but if you were to change the system to one where you had a progressive tax system that furthered the aims of society (wealth redistribution, encouraging childbirth, marriage, the film industry, charitable giving, saving whatever you want to using the tax code) and then had a 5% rate on all income over $30,000, all income, no exceptions. That might be a more equitable system.

without a postal system, you cannot send your catalogs out to customers or ship your goods.

without an internet, you cannot build your dot-com empire.

without an SEC, you cannot have a trustworthy stock sytem.

without public funds, most universities would be too prohibitive for the vast majority of people.

without a system of federally insured banks, you cannot have investments or student loans.

without a patent office, you cannot have protections against others stealing your products.

without a federal treasury, you cannot have a currency nor credit on a mass scale with any proper backing.

all these public systems either require proper funding or are the result of proper funding. i wish that more americans would talk about things this way. Guys like Thom Hartmann and Warren Buffet do.

all people pay the exact same percentage up to a certain figure

anything earned above that figure is then taxed at a higher rate, yes, BUT, everyone pays the same amount on the same money. rich people dont pay a higher tax on all the money they earn, only on the amount above certain markers.

i find this totally mental actually. i'm obviously against a flat tax, but high taxes are a symptom of, not any solution to, a deeply fucked-up and anti-egalitarian social system.

One thing about sales taxes (which are obviously flat taxes) is that rich people do pay them as well. I don't know too many rich people, but the ones I do know are successful entrepreneurs who tend not to pay much more income tax than I do. They have bank accounts and companies in the Channel Islands or whatever. The poor pay very little income tax, the rich generally avoid income tax, so the income tax proportion of govt revenues falls most heavily on middle class people with salaried jobs. Quite apart from the fairness issue, that's not going to be tenable in the long term. As profit centres become increasingly fragmented and globalised, it will become increasingly easy to avoid paying income tax.

The line is "governing by state" vs. "governing by people." Which one is actually closer to democracy is a better question?

LOLZ HITLER WAS A VEGETARIAN

-- A-ron Hubbard (Hurtingchie...), September 19th, 2006.

Perhaps that is why they are becoming dictators.

-- IPSISSIMUS (joh...), September 19th, 2006.

"Societies" cannot "become dictators." Perhaps the problem here is language.

...but fantasies of purity of one kind or another in politics are always nasty, naive, or both.

http://www.fredaldous.co.uk/trolleyed/images/products/jl00279.jpg

No way are literacy rates here worse than they were in 1906, but if you want to convince me public education is a priori a bad thing well ok, try.

horseshit, son. check the latest stats out on that; charter school kids don't test any better than public kids. charter school instructors don't have the same certification requirements that public schools do. also, home-schooled kids have MASSIVE problems with socialization, but they're great if you don't wanting to learn any of that evil evolution.

after public schooling, draftees were more pliant and controllable, contributing to the viability war machines that demolished the earth in 1914 and 1939.

what the fuck are you talking about?

I'm calling BS. Every single thing I've read on the subject basically debunks this.

what I'm talking about is the question: "wars have been going on for thousands of years, why were the wars in 1914 and 1939 so disproportionately bloody? was it just because of technology?" according to john keegan, no.

I'm calling BS. Every single thing I've read on the subject basically debunks this.

LOLZ

The Education Resources Information Center (ERIC), a U.S. government agency, has published multiple articles on home education. Here are excerpts from one which examined several studies on home-educated children socialization:

According to the findings, children who were educated at home "gained the necessary skills, knowledge, and attitudes needed to function in society...at a rate similar to that of conventionally schooled children."
and;

The researcher found no difference in the self concept of children in the two groups, and maintains that "insofar as self concept is a reflector of socialization, it would appear that few home-schooled children are socially deprived, and that there may be sufficient evidence to indicate that some home-schooled children have a higher self concept than conventionally schooled children." [12]

http://en.wikipedia.org/wiki/Homeschooling

Ah who am I kidding, there was never anything serious about the thread's premise.

xpost

I lived in Boise four years and in East Idaho before that...maybe you met Rigby Libertarian Donovan Bramwell, one of the most entertaining candidates and homeless people I ever met. And a homeless guy ran for city council last year w/the $8.67 (approx.) budget, don't you remember?

Hint: affluence, parental interest, homeschooled Christians cracking the whip, homeschooled hippie kids getting to figure out why frogs etc. If you're so poor that two parents are working three or more jobs, there's no time.

Also, any study that claims homeschooled kids are socialized just as well is simply false. To wit:

insofar as self concept is a reflector of socialization, it would appear that few home-schooled children are socially deprived and that there may be sufficient evidence to indicate that some home-schooled children have a higher self concept than conventionally schooled children.

That's exactly the point! Alas, homeschoolers tend to be pompous asses who are completely out of touch with the interests and preoccupations of their peers, and who think they're better than everyone else because they've read Jane Eyre, built a habitat for efts, and have never played Nintendo. Self-concept is a lousy barometer of this kind of socialization, they'd do better to ask the public school kids who instinctively dislike the smugness that oozes from the homeschoolers.

http://www.census.gov/population/socdemo/education/p23-08.pdf

This report cites illiteracy rates in 1900 as being 11.3%. Today they're around 3%.

It's also funny that you mention charter school students, since studies have come out recently showing they actually score WORSE than their public school counterparts.

As for private schools, yeah, obviously if you compare Westchester private schools with public schools in poor immigrant neighborhoods, for example, the private schools are going to look better. Utterly specious bullshit.

This wasn't taken as a given?

http://www.vaiden.net/nestle_push-up.jpg

these are a timeless classic which are even better than bomb pops.

are UK bomb pops colored similarly?

Dave.....Rob Morrow
Bill.....Mike Myers
Beth.....Beth Cahill
Waitress.....Siobhan Fallon

[ open on three friends sitting at a table in a restaurant ]

Beth: So, I heard Jerry Brown say that nowadays we only have one party - the Incumbent Party! [ Bill laughs ] And I can see where he's coming from.

Bill: You know.. I don't know.. some of those Democrats make me appreciate Quayle!

Dave: That's right.

Bill: Hey, this is a good place. Have you been here before?

Beth: No, I have not. But I like it already.

Bill: I know, these chairs alone! [ chuckles ] Anyways, you know what's interesting...

Dave: It's outerspace. [ Bill and Beth are confused by the outburst ] Jerry Brown. I'm sorry.. you know, where Jerry Brown is coming from, probably.. I..

Beth: [ realizing Dave's answering an earlier comment ] Oh.. right..

Bill: Oh.. yeah, yeah.. okay.. So, you know what's good here, is the Yankee Pot Roast.

Beth: Oh?

Dave: Yeah, that is pretty good here.

Beth: That sounds enticing.

Bill: Yeah, you'll think you're in Boston, but without the crazy cabdrivers!

Beth: [ laughs ] I've heard about those crazy cabdrivers!

Bill: Yeah..

Dave: [ starts to say something, but doesn't ] I'm sorry.. go ahead..

Bill: Oh. Okay. Uh.. well, they'll anything you tell them, right? If you're in a hurry, it's like the Indy 500! [ Beth laughs ] I mean, I don't know what kind of training films they show these guys! [ Beth laughs ] And you know what else is great about Boston?

Beth: What?

Bill: The Clam Chowder.

Beth: Oh, I love Clam Chowder!

Dave: [ now responding to an earlier comment ] They probably show them "The French Connection"! [ laughs ]

Bill: [ confused ] Yeah.. yeah.. right..

Beth: Uh-huh..

Dave: The cabbies in Boston.. the training films they.. chase scenes..

Bill: Right.. Anyway, the clam chowder in Boston is truly great.

Beth: Yeah!

Bill: Hey, you know what else is great? Going to a Red Sox game.

Beth: Oh, sure!

Bill: Yeah. I was there in 1986 when they lost the World Series.

Beth: Oh, wow..

Dave: To the Mets?

Bill: Yeah.. to the Mets. So, anyways, I'll tell you what happened. I paid $100 to a guy, right? And it turned out it was a forged ticket.

Beth: [ stunned ] No way!

Dave: Clam Chowdah!

Bill: Uh..?

Dave: You know. I mean, just the way they're always with the Clam Chowdah! New Englandahs!

Beth: Yeah...

Bill: That's very true.. that's very true..

Waitress: [ approaches ] Did you folks need menus?

Beth: Uh, no. I'll just have the Yankee Pot Roast.

Waitress: Sir?

Bill: Uh.. does the French dip come with French fries?

Waitress: Pretty much everything comes with French fries.

Bill: Good. That's the only way I can eat French dip! [ he and Beth laugh ]

Waitress: [ to Dave ] Sir?

Dave: Oh, uh.. just a burger..

Waitress: Yeah. [ walks away ]

Bill: So, who's out there? Who you gonna vote for?

Beth: I know, it's scary.. There's that Clinton guy, he seems okay. Is he from Florida?

Bill: No.

Dave: He's from Arkansas.

Beth: Who's the one from Florida?

Bill: Pee Wee Herman! [ they laugh ]

Dave: [ near hysterical ] Could we get the waiter, please! Miss!

Waitress: [ returns ] Yeah?

Dave: Um.. what about coffee and French fries?

Waitress: What?

Dave: [ laughs ] Well, you said practically everything comes with fries..

Waitress: Yeah. Well.. actually, not practically everything comes with fries.

Dave: Yeah, I know, I..

Waitress: Yeah. [ walks away ]

Dave: [ tense ] So, uh.. huh.. those candidates are really something..

Beth: Yeah, they are. That Pat Buchanan guy..

Bill: Yeah. Pat Buchanan's got some interesting ideas. About as interesting as David Duke's!

Dave: Now that Steinbrenner's coming back, I don't know how it's gonna taste! [ laughs out loud ]

Beth: [ confused ] Who was that, Dave?

Bill: What are you talking about, Dave?

Dave: The.. Yankee Pot Roast.. I don't know if it's.. gonna taste good..

Beth: Steinbrenner..

Bill: Right. Well, that's a possibility, Dave.

Dave: Well, what does that mena?

Bill: Well, Dave, that was about five subjects ago.

Dave: Well, I'm sorry. I'm just not a subject counter.

Bill: [ to Beth ] Yeah, well, Dave's a ltitle behind. He's just now recently getting into rap! Hey, did you hear Prince's new album?

Beth: Prince?! That guy's still around?

Bill: Well, yeah, yeah. The new album's pretty good, the old man's got some life in ihim.

Beth: Well, I'm more a U2 gal.

Bill: Well, they're always doing something.

Dave: Bill's a little behind himself, when he's not being an ass!

Beth: What, Dave..?

Dave: It's just that thing you said about me being a little.. behind.. uh.. I've just gotta stand up for a minute..

Bill: Okay. Whatever. [ contunies talking to Beth ]

[ Dave exits to the bathroom, where he stares at himself reflectively in the mirror, wondering why he can't just get it together. He looks at the condom machine hanging on the wall, and turns away. He then notices a bathroom stall marked "Time Machine", and quickly enters, dispensing a few condoms before he goes. ]

[ the action returns to the table moments earlier, with Dave now in full swing with the conversation ]

Bill: So, these cabbies, if you're in a hurry, it's like the Indy 500! I don't know what kind of training films they show these guys..

Dave: They probably show them "The French Connection"! [ everyone laughs ]

Bill: Right! Hey, you know what else is great in Boston? The clam chowder.

Dave: Clam Chowdah! [ everyone laughs ]

[ fade ]

I mean how can it "disproportionally" affect anyone? that's the point of a flat tax. 10% is 10% is 10%.

Ignoring the fact that this question has been reasonably answered already, and that Squirrel Police was probably being disingenuous, and also overlooking the fact that he will almost certainly never see my answer, yet I feel strangely compelled to waste some minutes of my Saturday morning on this question.

Imagine this analogy, Mr. Police. God declares that all creatures on earth have sinned and must undergo a "flat punishment". The punishment consists of being struck on the head by a one pound iron weight, dropped from a height of 10 feet.

A mouse complains that this is not a fair punishment, since small creatures will suffer from it disproportionately. An elephant (appropriately enough) asks: "How can the effects be disproportionate? A one pound weight is a one pound weight."

This argument (irrationally) convinces the mouse, who very soon ends up dead, much to the amusement of the elephant, who ends up with a minor bruise.

IOW, "equal" causes can have unequal effects, and very often do in real life.

- Most if not all flat tax proposals eliminate capital gains tax completely. So while they claim they would rid the tax system of the loopholes that the rich exploit, they really shift the entire tax burden onto the middle class (who earn their money primarily through wages) and off of the wealthy (who don't really make any wages but get the bulk of their income from investments).

- The wealthy should carry the greatest tax burden since they have by far reaped the greatest benefit from our society. They benefit the most from fire and police protection since they have the most property to protect. Their businesses couldn't survive without publicly funded roads, an inexpensive federal postal service, an educated public to serve as a labor force, a federally subsidized airline industry, publically funded technologies like the internet, health research, etc. The list goes on and on. Contrary to the libertarian fantasy of some kind of "natural" free market, the wealthy are only wealthy by permission of the government who allows people to do business, creates and regulates money, protects property and just generally creates a society in which the accumulation of wealth is possible.

- There is no way that the flat tax percentages which are generally proposed would provide enough revenue to run the government -- which is fine if you want to drown the federal government in the bathtub but not so much if you actually want to live in a functioning society.

OK. Then we just switch animals to a ram and a condor, whose skulls are rather differently protected from the effects of blows proportioned to their body weight. No matter how you slice it, a 10% tax will not have equal effects on every taxpayer, and would have negligible effects in some cases and disasterous effects in others.

i've heard this argument before, it doesn't completely convince me because the amount more the rich pay is more than the extra protection would cost (because the poor definitely get more than they pay in taxes (and correctly so) and that money needs to come from somewhere).

if rich people value marginal income less than poor people value them, then if we are setting up a tax system to a) maximise revenue; and b) maximise utility, then we should tax rich people at a higher rate than poor people.

HOW IS THIS SO HARD FOR PEOPLE TO UNDERSTAND?

The poor don't really get more than they pay for. Free market-ers make the mistake of trying to view government functions as an exchange of cash for services but that's not quite how our society works. I have never called the police in my life but that doesn't mean I'm owed a refund. It's a question of whether or not we as a society want to have police service (and by extension private property) at all. Since it was decided that the protection of private property is a basic goal of our government, it stands to reason that the people who benefit the most from it (the people with the most private property) should pay the largest share of the burden.

the comically exaggerated position you describe here is literally believed by most libertarian flat tax assholes

So, fully expect this 'movement' to take off again soon w/ the current debt crisis what it is. *sigh*

Steve Forbes, you ran in the wrong decade, man...

according to ctj, the US system is almost flat as it is, taking payroll, state, property, sales along with federal income tax

http://www.tinyrevolution.com/mt/archives/tax1.jpg
http://www.tinyrevolution.com/mt/archives/tax2.jpg

http://www.ctj.org/pdf/taxday2011.pdf

Also the better off you are, the more likely you are to cash in using itemized deductions. And sticking to tax on income alone, the very richest make more than half their income in investments, which are taxed at 15%.

http://www.ctj.org/pdf/irstop400may2011.pdf

errm

http://www.tinyrevolution.com/mt/archives/tax1.jpg
http://www.tinyrevolution.com/mt/archives/tax2.jpg

it's been a while

School me, brothers.