A Flat Tax: Please help me understand how it is unfair to have a flat tax!

[Care4all]

our gvt can not tax all earnings as it stands now....

our gvt taxes, taxable income, not anyone's full income, just as our gvt taxes businesses on their profit, not their entire income.

this is why there is a standard deduction and personal exemption....the gvt can NOT tax you on necessities it can only tax you on your perceived profits.

someone making 10k being taxed $1000 bucks is taking food out of his mouth or a roof over their head.

I agree with a flat tax, but only if there is a personal deduction for everyone, where their immediate needs are not taxed.....

The title says it all.

I think a flat tax on all americans is the only truly fair tax structure.

For all examples please use a 10% tax rate, I know its not realistic and would have to be higher but just for math purposes in any pro/anti flat tax examples lets use the easy number.


To me a person making $10,000/year paying $1,000 in taxes while a guy making $10,000,000/year paying $1,000,000 in taxes is fair.

I'm not sure how, under our current system at the end of the year, someone making $50,000/year being responsible for ~$12,500 in federal income tax while someone making $25,000/year is responsible to pay ~$3750 in federal income tax. After deductions its more like $8,000 and $0.00 which still doesn't sound fair to me.


So....now that my opinion is here please try to explain to me or convince me how a flat tax is less fair overall than our current tax system.

Taking $1000 from a guy making 10,000 a year is taxing the money he needs to survive with any semblance of a decent way of life. Fairness, as it relates to taxes, can also be applied to the principle that it is unfair to tax a person's income that is to be used for one's basic needs the same as you would tax a person's income that is well beyond need.

So both of you are basically saying that at lower income levels the taxes are actually going to take away from money for basic needs while at higher income levels the taxes would not take from money the people need to survive, making a flat tax unfair. Correct?

Would either of you be able to support a flat tax that say taxed all income over $20,000 at XX percent and all income under $20,000 at zero percent. Basically a flat tax that doesn't start taxing income until some basic level of income is reached.

I agree that it is more hardship inducing to tax a person making barely enough to survie, i do agree with that completely and that it sucks and causes a real measureable hurt on their standard of living.


I still don't see it as being fair to exempt a certain class of people from taxes based on income. However, I do understand the difference in impact a XX% tax would have on someone making at or below the poverty line vs the same XX%'s impact on a person making $1,000,000. The impact would cause more hardship for the poor person than the rich person. With this knowledge I still don't find it unfair to charge everyone the same, but that doesn't mean I wouldn't be willing to look into what I suggested 2 paragraphs above.

yes, i already said, i could support a flat tax, if there was an exemption for the first "X" amount made, along with including all money earned, including capital gains etc.....on being taxed.

but i also would like to see the elimination of the social security/medicare tax, and put it in to the flat tax amount. One tax, for everyone and everything....

eliminate the gas tax and cigarette taxes and excise taxes too.....

one big ole flat tax for all that the gvt spends.

 

[RDD_1210]

Well what if we found a percentage that if applied equally to all americans brings in the revenue to cover all the bills?

Sure, but what would that number be? And that brings us back to the point that this would then exclude a good number of people from paying anything which is what the far right seem to have a big problem with.

No it wouldn't exlude everyone.

Say the percentage was found to be 25% to keep every program we have now without incuring and more debt as a nation. The person making 10,000/year is now going to pay 2500 in taxes and the person making 1,000,000 is going to pay 250,000. Everyone still pays.

I think you may have assumed something I wasn't thinking about.....maybe.

You do realize that 2500 taken away from someone making 10,000 is going to be extremely detrimental and difficult to overcome. That's actually going to have a direct impact on their quality of life.

 

[PLYMCO_PILGRIM]

I think the biggest problem is that a flat tax would not bring in nearly as much revenue as a progressive tax rate. This means that a tremendous amount of cutting would have to happen to not drive the deficit even higher. So if we're cutting programs and services, many of those would be programs/services used by the poor and middle class. So not only will they lose services that they depend on, but they will be paying more than they are now, only worsening their situation. That is, unless you implement some sort of exemption on the bottom end. But that puts us right back at a progressive system that people will surely not like, since "everyone isn't paying their fair share".

Well what if we found a percentage that if applied equally to all americans brings in the revenue to cover all the bills?

So what if some low income household is getting $300 a month in food stamps? You want to raise their taxes? Why not just take away their food stamps? Wouldn't that be more efficient and achieve the same effect?

I want that household to have the same tax burden, as a percentage of their income, as someone who doens't get food stamps. I dont want to raise or lower their taxes relative to anyone else I want everyone to pay the same percentage, no exemptions.

 

[DiamondDave]

Sure, but what would that number be? And that brings us back to the point that this would then exclude a good number of people from paying anything which is what the far right seem to have a big problem with.

No it wouldn't exlude everyone.

Say the percentage was found to be 25% to keep every program we have now without incuring and more debt as a nation. The person making 10,000/year is now going to pay 2500 in taxes and the person making 1,000,000 is going to pay 250,000. Everyone still pays.

I think you may have assumed something I wasn't thinking about.....maybe.

You do realize that 2500 taken away from someone making 10,000 is going to be extremely detrimental and difficult to overcome. That's actually going to have a direct impact on their quality of life.

unless the person making 10K has a rent free situation, a garden that provides lots of food, no real want for expensive toys etc..... HENCE THE SUBJECTIVE BULLSHIT IN YOUR ARGUMENT FOR UNEQUAL TREATMENT BASED ON PERCEPTION...

Your quality of life is something personal to you... and not the responsibility of anyone else, the government, big business, or the tooth fairy

 

[PLYMCO_PILGRIM]

our gvt can not tax all earnings as it stands now....

our gvt taxes, taxable income, not anyone's full income, just as our gvt taxes businesses on their profit, not their entire income.

this is why there is a standard deduction and personal exemption....the gvt can NOT tax you on necessities it can only tax you on your perceived profits.

someone making 10k being taxed $1000 bucks is taking food out of his mouth or a roof over their head.

I agree with a flat tax, but only if there is a personal deduction for everyone, where their immediate needs are not taxed.....

Taking $1000 from a guy making 10,000 a year is taxing the money he needs to survive with any semblance of a decent way of life. Fairness, as it relates to taxes, can also be applied to the principle that it is unfair to tax a person's income that is to be used for one's basic needs the same as you would tax a person's income that is well beyond need.

So both of you are basically saying that at lower income levels the taxes are actually going to take away from money for basic needs while at higher income levels the taxes would not take from money the people need to survive, making a flat tax unfair. Correct?

Would either of you be able to support a flat tax that say taxed all income over $20,000 at XX percent and all income under $20,000 at zero percent. Basically a flat tax that doesn't start taxing income until some basic level of income is reached.

I agree that it is more hardship inducing to tax a person making barely enough to survie, i do agree with that completely and that it sucks and causes a real measureable hurt on their standard of living.


I still don't see it as being fair to exempt a certain class of people from taxes based on income. However, I do understand the difference in impact a XX% tax would have on someone making at or below the poverty line vs the same XX%'s impact on a person making $1,000,000. The impact would cause more hardship for the poor person than the rich person. With this knowledge I still don't find it unfair to charge everyone the same, but that doesn't mean I wouldn't be willing to look into what I suggested 2 paragraphs above.

See as soon as you have two tiers, people like DiamondDave says no good, you now have a progressive system. He's right, that is a progressive system, but that doesn't mean what he wants is a better option. Basically, his system would completely shit on the poorest among us in the name of "fairness".

To be fair to dave, I agree with him as I stated in the last paragraph.

However, I'm just trying to discuss it so being open to the idea helps the discussion continue

 

[RDD_1210]

So both of you are basically saying that at lower income levels the taxes are actually going to take away from money for basic needs while at higher income levels the taxes would not take from money the people need to survive, making a flat tax unfair. Correct?

Would either of you be able to support a flat tax that say taxed all income over $20,000 at XX percent and all income under $20,000 at zero percent. Basically a flat tax that doesn't start taxing income until some basic level of income is reached.

I agree that it is more hardship inducing to tax a person making barely enough to survie, i do agree with that completely and that it sucks and causes a real measureable hurt on their standard of living.


I still don't see it as being fair to exempt a certain class of people from taxes based on income. However, I do understand the difference in impact a XX% tax would have on someone making at or below the poverty line vs the same XX%'s impact on a person making $1,000,000. The impact would cause more hardship for the poor person than the rich person. With this knowledge I still don't find it unfair to charge everyone the same, but that doesn't mean I wouldn't be willing to look into what I suggested 2 paragraphs above.

See as soon as you have two tiers, people like DiamondDave says no good, you now have a progressive system. He's right, that is a progressive system, but that doesn't mean what he wants is a better option. Basically, his system would completely shit on the poorest among us in the name of "fairness".

To be fair to dave, I agree with him as I stated in the last paragraph.

However, I'm just trying to discuss it so being open to the idea helps the discussion continue

Yeah, I figured you did. At least you're trying to have a discussion about it. More then can be said for most people on this site.

 

[pgm]

A flat tax is only fair if you eliminate deductions. And even then, it's only fair in one sense of the word.

 

[Care4all]

all of our income can NOT be income taxed....it is against the law, as the law is writen now.

if you do not give people exemptions or a standard deduction on necessities, gvt income taxing is illegal.

 

[Care4all]

as with ALL businesses and corporations, our full income can not be taxed....

 

[DiamondDave]

So both of you are basically saying that at lower income levels the taxes are actually going to take away from money for basic needs while at higher income levels the taxes would not take from money the people need to survive, making a flat tax unfair. Correct?

Would either of you be able to support a flat tax that say taxed all income over $20,000 at XX percent and all income under $20,000 at zero percent. Basically a flat tax that doesn't start taxing income until some basic level of income is reached.

I agree that it is more hardship inducing to tax a person making barely enough to survie, i do agree with that completely and that it sucks and causes a real measureable hurt on their standard of living.


I still don't see it as being fair to exempt a certain class of people from taxes based on income. However, I do understand the difference in impact a XX% tax would have on someone making at or below the poverty line vs the same XX%'s impact on a person making $1,000,000. The impact would cause more hardship for the poor person than the rich person. With this knowledge I still don't find it unfair to charge everyone the same, but that doesn't mean I wouldn't be willing to look into what I suggested 2 paragraphs above.

See as soon as you have two tiers, people like DiamondDave says no good, you now have a progressive system. He's right, that is a progressive system, but that doesn't mean what he wants is a better option. Basically, his system would completely shit on the poorest among us in the name of "fairness".

To be fair to dave, I agree with him as I stated in the last paragraph.

However, I'm just trying to discuss it so being open to the idea helps the discussion continue

What he don't understand is equality does not inherently mean end income "better situations" for all... but I will take equality in treatment that more resembles the sales tax system than I will a system where personal perceptions create a shifting playing field

 

[Care4all]

i am fine with a consumption tax, as long as food and clothing are not taxed....

 

[DiamondDave]

A flat tax is only fair if you eliminate deductions. And even then, it's only fair in one sense of the word.

Fuck this use of "fair".. what one person deems as fair is not what another would deem as fair... and situations are different for all people in all income brackets and different for people within those subjective brackets...

And this is where the politicians get you all... pulling at heart strings, shifting the playing field so that someone can always be coddled for votes... equality scares them, just as it scares the lazy, and just as it scares those who want something at the expanse of others

 

[DiamondDave]

i am fine with a consumption tax, as long as food and clothing are not taxed....

But why do I have a feeling you would take exception to 30K caviar and 100K suits not having that exception...??

 

[MiddleClass]

Flat tax is just code for lowering taxes for the wealthy but not for most Americans, as most flat tax rate proposals have the majority of Americans paying the same exact rate or higher than what they currently pay, while considerably lowering the tax rate of the wealthiest Americans. No one with a straight face can claim that is fair.

 

[DiamondDave]

Flat tax is just code for lowering taxes for the wealthy but not for most Americans, as most flat tax rate proposals have the majority of Americans paying the same exact rate or higher than what they currently pay, while considerably lowering the tax rate of the wealthiest Americans. No one with a straight face can claim that is fair.

OK.. 2 can play that game...

Progressive tax only means support of equal treatment when it benefits you and unequal treatment of others when it benefits you... it supports something for you at the expense of others... it means having no stake in the game with the ability to vote for continuing to receive benefits for having no stake in the game

And again, you FUCKING MORON.... it is not about FAIR.. FAIR is SUBJECTIVE and BASED ON PERCEPTION... it is about EQUAL TREATMENT BY GOVERNMENT UNDER LAW....

 

[uscitizen]

Actually, a progressive tax rate structure is fair, because the marginal rates apply to everyone who makes money within each rate.

If the marginal rate on the first 20,000 is 10%, the millionaire pays 10% on that 20,000 just like the guy who only makes 20,000 pays.

No.. it is not 'fair' in the eyes of many... and it is definitely not equal treatment.... as stated... when you treat dollars earned differently because of situation and subjective exclusion, by DEFINITION it is unequal treatment.... the dollar #$125K I make now should not be any different as dollar #$20K that the beer vendor is making now... to state or support otherwise is to support unequal treatment by government under law...

Equal treatment would eliminate any tax breaks for religious institutions and that will never happen,

so it's really not useful to try to structure a real world argument around some lofty notion of 'equal treatment'.

Tax exempt institutions need not be thouched by a real flat 10% income tax.

Although I think churches should pay income tax just like anyone else.

And I do not think corporations should be allowed an income tax credit either.
No taxes should be the best that they should be able to go if they have enough legitimate write offs.
Australia has a flat 30% tax on businesses and they are rated very business friendly.

 

[Care4all]

i am fine with a consumption tax, as long as food and clothing are not taxed....

But why do I have a feeling you would take exception to 30K caviar and 100K suits not having that exception...??

no, i am fine with all clothes and all food being exempt for everyone, from tax. besides, it would be impossible to have it any other way...

 

[Dragon]

So both of you are basically saying that at lower income levels the taxes are actually going to take away from money for basic needs while at higher income levels the taxes would not take from money the people need to survive, making a flat tax unfair. Correct?

Would either of you be able to support a flat tax that say taxed all income over $20,000 at XX percent and all income under $20,000 at zero percent. Basically a flat tax that doesn't start taxing income until some basic level of income is reached.

While that would obviously be better than a flat tax with no exemptions, the answer is no. That a tax on the very poor is taking survival money is only part of the picture. Remember, I listed four ascending uses of money: survival, luxury, savings/investment, and gambling. While we obviously don't want to tax away survival money, luxury and savings/investment also serve useful purposes in the economy and taxing those is not as acceptable as taxing gambling money (but acceptable if gambling money won't yield enough revenue by itself, which is the case).

I would have:

The first $20k of income be untaxed, as you said.
A confiscatory tax on income above $1 million, on the order of at least 50% and probably more like 70+. This would discourage accumulation of vast fortunes and serve to drive more investment into the real economy instead of into gambling, particularly if all such investment was fully tax-deductible (as it should be).
Taxes set on all income in between the two at whatever rate is necessary to meet government expenses.

The middle bracket could probably be a single rate without any problem.

 

[DiamondDave]

No.. it is not 'fair' in the eyes of many... and it is definitely not equal treatment.... as stated... when you treat dollars earned differently because of situation and subjective exclusion, by DEFINITION it is unequal treatment.... the dollar #$125K I make now should not be any different as dollar #$20K that the beer vendor is making now... to state or support otherwise is to support unequal treatment by government under law...

Equal treatment would eliminate any tax breaks for religious institutions and that will never happen,

so it's really not useful to try to structure a real world argument around some lofty notion of 'equal treatment'.

Tax exempt institutions need not be thouched by a real flat 10% income tax.

Although I think churches should pay income tax just like anyone else.

Agreed.. I would support eliminating it on churches etc for the sake of equal treatment...because unlike ones like Carby, I really do support equal treatment and all the positives and negatives that come along with it... not just preaching for unequal treatment when it benefits you and punishes those who you think owe you something because of your petty jealousy and envy

 

[uscitizen]

i am fine with a consumption tax, as long as food and clothing are not taxed....

But why do I have a feeling you would take exception to 30K caviar and 100K suits not having that exception...??

no, i am fine with all clothes and all food being exempt for everyone, from tax. besides, it would be impossible to have it any other way...

But that is a sales tax not an income tax.
Unless you are a corporation. I thought this thread was about personal income tax?
If not I am for a flat 20-30% corporate tax rate. And that would be total burden as they could deduct state/local taxes from their federal ones. But that would be their only deductions from federal tax.
this would help move things back to the states as far as tax income.
but even if they located in a tax free state they would still pay the same total amount in federal taxes.