Should the rich pay a higher tax rate?

[stratego]

The Why Kerry Won't Win thread is turning into a tax rate conversation, so I'm making it it's own thread.

Should the rich pay a higher tax rate than the poor?

 

[stratego]

Originally posted by Archer 007 in another thread
The more money you make, the more you have gotten from society, therefore you owe more.

Archer, you sound like like my 14 year old son, who claims I should pay a higher percentage of the rent because I earn more money. (here's the conversation)

Me: Sergio, time to pay your share of the rent
Sergio: But dad, with the allowance I have now, I can't afford to pay the same percent as you.
Me: I'm not asking you to pay the same amount as me, just the same percentage.
Sergio: I know, but the amount of money I have left over after paying everything is not enough for my living expense. I can't even afford lunch.
Me: Quit complaining, the only reason you have your allowance is because of me. If that's not enough, go and get a job you lazy ass.
Sergio: But I have school work and other things I'm involved in
Me: Not my problem. I'm not even your real dad.

 

[Xen]

of course the rich should pay more, they can afford it, somthimes no wanting to find a job isnt the actual reason people dont have them, that the case with 2 million people right now, and thats a estimate more to the benifit of the conservatives

no, just because people are greedy dosent excuse them from the fact that taxes should be based on what a person has mor eor less individually rather then one giat tax for every one that can be utterlly unfair to those who cannat afford to pay the same percentage as the richer people

 

[sysyphus]

Your 14 year old son pays rent?

 

[stormbind]

Ofcourse.

Below the bread line, the people cannot affort to pay 0.01%

Any country would go bankrupt if the rich paid 0.01%, and any state would be inhumane if it took money away from those that haven't enough to eat.

The only humane and fair solution is a perfect curve starting at -Y% (welfare) and increasing to +X% (tax).

 

[slothman]

They shouldn't pay more just because they are rich but because of how they made their money. Most rich people don't make money through work but through business and stock and such. I think income tax rates shouldn't be based on what you earn but where you get it from. That way Bill Gates can pay 50% or whatever from all the money he makes on interest and MS stock while Joe Factory Worker will only pay 10% on his factory income. If Joe does have a little bit of stock the income rate will be much higher on that small amount but won't end up increasing his net income tax amount by much. And no deriding me by saying investments are of equal worth to society as hard jobs. They may be but they are also easier and more biased towards the rich who have money in the first place to invest.

 

[sysyphus]

stormbind - I've been trying to put that point of view into words for years and could never manage it. Lo and behold, you did it in three simple lines!

 

[Hayek]

Definitely not. It's just wrong for a majority to impose a higher tax rate upon a minority. What's more, there's no stopping a progressive tax rate from going up to very unpleasant levels, except for what, at the moment, is considered economically viable.

If you tax the rich too high, you will have fewer people who can provide capital for new projects, fewer rich will want to live in your country and tax evasion will become rife.

No one should pay more than 15 per cent income tax, IMO.

 

[Ian Beale]

15% income tax??????? How would it be possible for a government to raise money, or fund public services? I think taxation should be based on ability to pay. The rich are more able so should make a more significant contribution. I don't however, propose the sort of tax rates we had in the UK when they reached unbelievably high levels. My opinion is that too higher taxes demotivate and can have a harmful effect on the economy but so can taxes that are too low. The correct balance has to be struck but no more than 15% for everyone- personally i don't think it's workable. (Hayek are you by any chance very wealthy )

 

[Achinz]

Redistribution of wealth is important to minimise social problems caused by the enormous difference between rich and poor. In any case, it doesn't seem difficult for the wealthy few % to avoid (not to mention evade) taxes by finding loopholes in the legislation through clever schemes and workarounds by tax lawyers.

 

[addiv]

I'd say the poor should pay a lower tax rate, but of course that basically means the same thing.
Main reason for this is that no one (at least in rich Western nations) should have to live in poverty. Everybody should be able to support a roof above one's head, decent food, and a few other things. In other words, be able to lead a decent life.
Another reason is that I think the capitalist system causes too large income differences. For example, I don't see why a dustman or a construction worker should make less money than a professor or a manager in a company. Not that I want to completely eliminate income variations, but cutting it back would be a good and fair thing to do.
I don't think high taxes are necessarily bad for the economy, since the rich spend a smaller percentage of their wealth to benefit the economy than the poor. And improvement of the economy is not the be-all end-all goal anyway, providing the highest quality of life to as many people as possible is.

 

[addiv]

Originally posted by stratego


Archer, you sound like like my 14 year old son, who claims I should pay a higher percentage of the rent because I earn more money. (here's the conversation)

Me: Sergio, time to pay your share of the rent
Sergio: But dad, with the allowance I have now, I can't afford to pay the same percent as you.
Me: I'm not asking you to pay the same amount as me, just the same percentage.
Sergio: I know, but the amount of money I have left over after paying everything is not enough for my living expense. I can't even afford lunch.
Me: Quit complaining, the only reason you have your allowance is because of me. If that's not enough, go and get a job you lazy ass.
Sergio: But I have school work and other things I'm involved in
Me: Not my problem. I'm not even your real dad.

Is this supposed to be a joke?

 

[Shadylookin]

quite simply the rich have to pay more, you can't take money from those who don't have it. Of course the government should be more effecient with the money they get so that they don't have to pay extremly high rates

 

[Hayek]

Originally posted by Ian Beale
15% income tax??????? How would it be possible for a government to raise money, or fund public services? I think taxation should be based on ability to pay. The rich are more able so should make a more significant contribution. I don't however, propose the sort of tax rates we had in the UK when they reached unbelievably high levels. My opinion is that too higher taxes demotivate and can have a harmful effect on the economy but so can taxes that are too low. The correct balance has to be struck but no more than 15% for everyone- personally i don't think it's workable. (Hayek are you by any chance very wealthy )

The solution is privatisation and abolishing subsidies. Then there wouldn't be as many things to raise money to. I'm in favour of a negative income tax for the poor as well as vouchers for at least basic education and possibly health care as well. I don't know what these programmes would amount to, but as far as cutting taxes goes, it'd come quite a long way.

I'm not very wealthy, by the way.

Originally posted by addiv
Another reason is that I think the capitalist system causes too large income differences. For example, I don't see why a dustman or a construction worker should make less money than a professor or a manager in a company. Not that I want to completely eliminate income variations, but cutting it back would be a good and fair thing to do.

1. A carrot is needed or else fewer people would want to spend a lot of time, effort and money on their education

2. If you can't accumulate wealth, no new enterprises are going to be started.

3. Why does it matter if person A is a million times richer than person B? And is it any of anyone's business?

 

[Achinz]

Originally posted by Hayek
3. Why does it matter if person A is a million times richer than person B? And is it any of anyone's business?

I put the schism between rich and poor both within a country and between nations as the primary cause of unrest, instablility and crime (or war on the macro-level) not to mention the suffering and inhumanity inflicted on the destitute. Anyone who cares for fellow human beings and human values should not take a purely selfish and endlessly acquisitive attitude to life and living.

 

[Hayek]

Originally posted by Achinz
I put the schism between rich and poor both within a country and between nations as the primary cause of unrest, instablility and crime (or war on the macro-level) not to mention the suffering and inhumanity inflicted on the destitute. Anyone who cares for fellow human beings and human values should not take a purely selfish and endlessly acquisitive attitude to life and living.

If the rich are rich because of certain laws that the government has passed that give certain priviliges to the rich and make it awfully hard for the poor to change their situation, then the gap might cause unrest.

But if person A is a million times richer than person B in a fairly (classical) liberal country where people often can do something about their situations, then I fail to see how unrest is to arise. And if the poor still get by in that country, why would they cause any unrest?

 

[Achinz]

Originally posted by Hayek
But if person A is a million times richer than person B in a fairly (classical) liberal country where people often can do something about their situations, then I fail to see how unrest is to arise. And if the poor still get by in that country, why would they cause any unrest?

Just look at the US of A. When I visited parts of it for the first time in 1992, I was frankly horrified by the sheer misery of the poor. We don't have such visually graphic examples of indignity and deprivation in Oz although we're far from the "richest country in the world" - a classical liberal country in your terms".

This was aggravated by a sense of fear, the concern for personal safety in such areas as East LA (it was just after the race riots there) and the no-whiteman's land in Harlem, New York city.

Everywhere you go eg MacDonald's with their signs of "max time 30 minutes, no loitering" and the need to get a key from the servers before being able to use the toilet.

The bullet- proof tiny kiosk of a gasoline station in rundown Hollywood where you pay first and get the hell out of there.

If these are not signs of a major social dislocation in a "liberal society" I don't know what are!

 

[WillJ]

I'm with stormbind. For the most part the tax rate should be the same for everybody, but I think if you make less money than you can live on, you should get to keep all your money, and a tiny dent can be made in the rich people's pockets to make up for this.

Originally posted by stratego
Archer, you sound like like my 14 year old son, who claims I should pay a higher percentage of the rent because I earn more money. (here's the conversation)

Me: Sergio, time to pay your share of the rent
Sergio: But dad, with the allowance I have now, I can't afford to pay the same percent as you.
Me: I'm not asking you to pay the same amount as me, just the same percentage.
Sergio: I know, but the amount of money I have left over after paying everything is not enough for my living expense. I can't even afford lunch.
Me: Quit complaining, the only reason you have your allowance is because of me. If that's not enough, go and get a job you lazy ass.
Sergio: But I have school work and other things I'm involved in
Me: Not my problem. I'm not even your real dad.

Please tell me you're being satirical of capitalism.

 

[stratego]

Originally posted by WillJ
Please tell me you're being satirical of capitalism.

No, capitalism is great. When I was six, USSR fell and I was there to help break the Berlin Wall.

 

[EdwardTking]

Originally posted by Hayek

3. Why does it matter if person A is a million times richer than person B? And is it any of anyone's business?

Yes, it is other people's business because it affects them!

Let me gve you one (adverse) example.

The going rate in the UK for a first property is very nearly
£80,000 on average (there is some regional variation).

Only 1/4 of the young people can afford to buy (borrow for next 25 years on a mortgage) that property. 3/4 of the people
are priced out of the market.

Why is this. There are a number of reasons (e.g. excess demand due to immigration, limited land for new building) but the most important is too much money in the market. The point is that since the stock market decline at the turn of the millennium, the wealthier people in the UK have started speculating in property.
There has been a massive growth in buy to let or appreciate.

So how many rich people there are, how much money they have after tax and what they do with it are ordinary people's business.

There are of course other examples where having rich people about may be of benefit as mentioned in this thread.