The Flat Tax debate thread

[aneeshm]

Seeing the amount of interest cgannon's post about the flat tax generated in another thread , this is the unofficially official thread for discussing the flat tax .

I'm in support of a flat tax , because the argument that the rich get more , thus must pay more , is patantly ridiculous to me .

A flat rate of tax , for all income above the poverty line , IMO , is the best solution that can be found for two problems . The first is the disgusting injustice towards the rich , who have their hard-earned money taken away at the point of a gun . The other is these crazy programs for supporting leeches and other miscellaneous unworthy individuals , and for violating the rights of the most capable to subsidize the least capable , which will have to go if the government has only a limited amount to spend .

There should also be an upper limit on the tax - it cannot exceed , say , 10 million dollars per individual or a hundred million per corporation . Because if you have to have a lower limit , then not having an upper limit is ridiculous .

 

[The Last Conformist]

Wow. A tax structure that screws the middle classes for the benefits of the rich and the poor. That's so never going to fly.

 

[JoeM]

I agree.

There should also be an upper limit on the tax - it cannot exceed , say , 10 million dollars per individual or a hundred million per corporation . Because if you have to have a lower limit , then not having an upper limit is ridiculous .

You'll have to argue harder than that to convince me. The lower limit is because they can't afford to pay - nobody can be too rich to pay.

One question though - what proportion should we pay?

 

[Scuffer]

Would it involve an increase in the tax rate? Or would it stay the same?

 

[Paradigne]

Solve all problems. Go to a straight sales tax. Drop income tax. Face it, we get double taxed anyway. This way, the rich will still pay more, because they BUY more. The poor will pay next to nothing because they buy next to nothing (comparitively)

 

[Hakim]

I support flat tax, mostly because of my emotions regarding marginal effects - when getting more income pushes you into some higher tax bracket or disqualifies you for some social benefit.

One could still have a welfare state, just raise the tax. It would'nt even require a large increase, since the state revenues from high income taxes is quite small.

 

[Hotpoint]

Solve all problems. Go to a straight sales tax. Drop income tax. Face it, we get double taxed anyway. This way, the rich will still pay more, because they BUY more. The poor will pay next to nothing because they buy next to nothing (comparitively)

Actually as a percentage of income, sales taxes hit the poor harder than the rich because the latter tends to use a higher percentage of their income for either savings or financial investments.

 

[Scuffer]

Solve all problems. Go to a straight sales tax. Drop income tax. Face it, we get double taxed anyway. This way, the rich will still pay more, because they BUY more. The poor will pay next to nothing because they buy next to nothing (comparitively)

The rich might buy more as a total amount, but less as a percentage of income. It's what makes them rich. A sales tax like this would therefore hit the poor harder.

If you made the tax only on expensive stuff it could work I guess, but you'd probably end up with a million lawyers arguing the toss.

 

[ferenginar]

Solve all problems. Go to a straight sales tax. Drop income tax

Far from it, drop all other taxes and only have income tax, no flat rate. If a flat rate were established it would be prohibative to the poor. There definately should not be an upper limit, tax should be banded, but the bandings should be more realistic.

The first is the disgusting injustice towards the rich , who have their hard-earned money taken away at the point of a gun

Rich and hard earned in the same sentence, are you being serious, isn't there enough furore about FAT CAT salaries as it is, now you want to let them off paying tax on it.

 

[stormbind]

Flat tax is immoral.

But even ignoring that, it is wrong, because flat tax wouldn't be able to raise enough funds to keep government afloat.

 

[stormbind]

Banded is wrong. Tax levels should be a smooth curve proportional to income.

 

[JoeM]

Flat tax is immoral.

?

Why?

I'm thinking we are talking about something along the lines of 'everyone pays n% Income tax' and that's it' no council/corporate/rates/sales/whatever taxes.

Correct me if I'm wrong here, but going further you then have to ensure no-one is escaping tax by using a 'company' car/jet and all the rest which is actually the hard part of getting cash out of the rich.

 

[JoeM]

Banded is wrong. Tax levels should be a smooth curve proportional to income.

curve? proportional?

If it's to be proportional, it would be a set percentage, - and that's a flat diagonal line.

 

[The Last Conformist]

He's saying the percentage should be proportional to you're income.

 

[amadeus]

It's not the progressive tax system I have a problem with, it's the height of the brackets.

Now, if the top federal bracket was 15%...

 

[The Last Conformist]

It's not the progressive tax system I have a problem with, it's the height of the brackets.

Now, if the top federal bracket was 15%...

A right-winger speaking sense on taxes. This needs to be celebrated.

 

[JoeM]

He's saying the percentage should be proportional to you're income.

Okay, but I still think think that is misrepresenting as the outcome is not a proportional - proportional income tax takes the same percentage of income from all income groups.

Next point - how do you eradicate all the other taxes and prevent evasion?

 

[The Last Conformist]

Okay, but I still think think that is misrepresenting as the outcome is not a proportional - proportional income tax takes the same percentage of income from all income groups.

stormbind did not say it would be a proportional income tax.

Next point - how do you eradicate all the other taxes and prevent evasion?

Eradicating all non-income taxes - if we for some reason would want to do that - is just a question of political will. Evasion will remain an issue under any tax regime.

 

[JoeM]

stormbind did not say it would be a proportional income tax.

Eradicating all non-income taxes - if we for some reason would want to do that - is just a question of political will. Evasion will remain an issue under any tax regime.

Yes but the other taxes catch people avoiding income tax.

 

[Illustrious]

Yes but the other taxes catch people avoiding income tax.

The problem is, they also catch people who aren't avoiding income tax.

It would be a lot easier to quantify the true cost of tax if there was only one type of taxation in effect. Instead, we have multiple, often overlapping tax regimes all hitting you at the same time.

For example, in the UK earned income (wages, salary, self-employed income etc) is charged to National Insurance (effectively an additional tax), while investment income isn't. Meanwhile, expenditure on adult's clothing is subject to Value Added Tax at 17.5% while children's clothing (broadly interpreted) is exempt.

So, someone who lives off investment income and is petite enough to wear child sizes pays considerably less tax overall than an employee who wears adult sizes. Given that sort of anomaly, how can you establish the true cost of tax?