xsited1
Agent P
Let's take two examples. And let's make a realistic comparison -- you'll need about a 30% tax rate to just get the same revenues as the current tax system.
Family A makes $20,000. They can't afford to save a dime, in fact they don't have enough to pay for basic things like health care and education.
They spend all their money. In effect they spend about 15,400, and pay about 4,600 (which is 30% of 15,400) in taxes, money they desparately need to pay for necessities they are doing without. That gives them an effective tax rate of about 23% (4600/20,000).
Family B makes $20,000 [edit: should be $20 million]. They save and invest $10 million and spend $10 million. Of that $10million they spend, about 2.3 million is taxes, the balance or 7.7 million is for products and services. Obviously Family B is not sacrifices health care or junior's education to pay the tax!
The effective tax rate for Family B is 2.3m/20m or 11.5%
Now, I personally don't think that a system in which a family making $20k and paying a higher tax rate with money they desparately need for necessities than a family making $20 million in any way is fair, and I really don't see how any one else could either.
Unless your goal is to make the rich richer at the expense of keeping the poor poorer, which IMO is exactly the goal of lots of folks who promote such tax plans.
How can Family B save $10 million if they only make $20,000? That would take 500 years if they saved every penny. And the tax numbers are just made up, so let's make up some numbers based on a consumption tax.
Typo, I'm sorry. Family B makes $20 million. Does it make more sense now?
Family A tax: $20,000 * 0.15 = $3,000
Family B tax: $10M * 0.15 = $1,500,000
15% is not a realistic replacement tax figure. A 15% tax on gross income of $12 million gives you $1.8T in revenues, well below the $2.5T the Govt took in last year. And since you are taxing only expenditures, the revenues will be lower than even that because not all income is spent, some is invested.
Same percentage, different tax amounts.
Oh, I see. You want to tax the rich at a greater rate because they make more money and you call that 'fair'. And obviously you want to redistribute the wealth so that the rich send their money to the poor. Well, your idea of 'fair' is different from mine. Not that there's anything wrong with it!
Of course.
IMO it is not fair to expect a family of 4 making $20,000 to pay an equal tax rate with monies they need for necessities, than a family of 4 making $20 million to pay a lower rate with money they have for luxuries.
A higher tax rate on the family making $20k means they do without basic necessities, like health care, education, transportion, etc. The higher rate on a family making $20 million means they might have to get a smaller yacht, but they are not doing without basics.
How is taxing them at the same rate possibly "fair"?
If you tax yachts at a higher rate, nobody will buy yachts and the yacht makers will fire all of their employees. We've already seen that happen.
We aren't going to get anywhere debating this issue. You don't think taxing people at the same rate is fair even though more wealthy people will pay more total dollars in taxes. I do. I believe that taxing people at different rates goes against the very fiber of our Nation. How can we be a free country if some people are taxed at a higher rate than others? Why should someone who works harder and makes more money be expected to pay a higher rate? That doesn't make logical sense to me and is at the very least oppressive.