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The Graduated Income Tax

DGS49

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The purpose of the personal income tax is to raise money from the citizenry so that, when added with all the other money raised by the government, the government has sufficient money to do the things that the Constitution says that the Federal government ought to do. It is NOT to “level the playing field,” or to redistribute wealth, or to accomplish any other SOCIAL purpose.


The “fairest” personal income tax would be a PER CAPITA tax. That is to say, everyone who pays taxes pays the same amount. Just like in a club or an association. The amount would only vary according to the needs of the government, and one’s personal income would not be relevant to the calculation.


But it has been proposed that since people who have greater incomes can easily pay more (though what that has to do with anything, I don’t know), so one might contemplate a PERCENTAGE tax, with everyone paying the same percentage of their taxable income. So that Person Y, who makes twice as much as Person X, pays twice as much in tax as Person X. Well, this is not fair to Person Y, who derives no more benefit from his citizenship than person X…why should be pay twice as much in taxes? No good reason, actually.


Now before we go to the next step, imagine an economy where all of the “income” is pooled into a giant fund. The Central Government takes that pool of money and generates a large number of numbered balls, with one ball for each person in the society. Each ball has an amount written on it, corresponding to an annual income, from $10 thousand through $10 million. The total of the amounts printed on the balls is equal to the total available income in the society. Then each person blindly picks a ball out of the barrel, and his annual income for that year will be the amount printed on the ball – either $10 thousand, ten million, or any number in between, entirely by chance.


IN THAT SCENARIO, it would make perfect sense to have a GRADUATED PERCENTAGE income tax. Because the people who make the most did nothing to earn that exalted income; it came purely by chance, so OF COURSE they cannot complain if a higher percentage of their income is confiscated as personal income tax. In fact, the graduated income tax is entirely fair, in that scenario.


But that is not real life. In real life, most of the people making the top incomes have reached that income level by some combination of HARD WORK, raw talent, superior intelligence, and intelligent risk taking. There are some people who have high incomes due to extreme good fortune, nepotism, or nefarious schemes, successfully executed, but these are a minority and public policy should not be decided on the basis of abnormal situations. And of course there is no rule that requires that the activity or products or services that generate high income must be intrinsically valuable to society; much of what we pay dearly for has minimal intrinsic value…consider a latte at Starbucks. An entertaining video game. A tasty snack. A catchy tune. None of these has any intrinsic value, but they might generate enormous quantities of cash.


The political Left in the country constantly tries, overtly and covertly, to make the case that those with the highest incomes are either lucky or evil, hence astronomical income tax rates FOR THEM is entirely justified by the “needs” of others. But this is bullshit, peddled by a population (Leftists) of whom very few have ever experienced a truly productive or valuable moment in their pathetic little lives. It is not coincidence that the cars in the corporate parking lot at 8pm are high-end cars; for the most part, the people who can afford them are the very same people who work 50, 60, and more hours a week. It is not “luck" that enables them to buy those high-end cars.


Therefore, I submit to you that the graduated income tax is the least fair personal tax system imaginable. It punishes success in the same way as if high incomes were just randomly distributed among the population, through no merit at all on the part of the high earner. And the people who are advocating for marginal tax rates of 70-90% (not that they even understand what a “marginal tax rate” is) are evil, and don’t deserve serious consideration.

And don't forget, there is a word for any politician who tells you that he is being "compassionate." It starts with "T" and ends with "hief."
 

pinqy

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The “fairest” personal income tax would be a PER CAPITA tax. That is to say, everyone who pays taxes pays the same amount. Just like in a club or an association. The amount would only vary according to the needs of the government, and one’s personal income would not be relevant to the calculation.
That's not an income tax, that is a capitation or poll tax. The Constitution specifically mentions this as a direct tax that must be apportioned among the states.


But it has been proposed that since people who have greater incomes can easily pay more (though what that has to do with anything, I don’t know), so one might contemplate a PERCENTAGE tax, with everyone paying the same percentage of their taxable income. So that Person Y, who makes twice as much as Person X, pays twice as much in tax as Person X. Well, this is not fair to Person Y, who derives no more benefit from his citizenship than person X…why should be pay twice as much in taxes? No good reason, actually.
Because he can pay more while not suffering any more.
 

Penelope

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We have always had a progressive income tax and its fair. Like it or not the elites have to pay more, but in reality they can certainty make a hell of a lot less money and pay less. We have multimillionaires and billionaires and how do they make so much money , off the working man. They obviously do not spend it either as they wouldn't be multimillionaires,

so yes they can pay more, and if the lower the top bracket 15% to 25% then the 15% should be to 0. We do not need a tax overhaul.
 

Econ4Every1

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DGS49,

Thank you for taking the time to put together the interesting post. this is likely to become a heated debate. I for one just look forward to another good conversation.

-Cheers


The purpose of the personal income tax is to raise money from the citizenry so that, when added with all the other money raised by the government, the government has sufficient money to do the things that the Constitution says that the Federal government ought to do. It is NOT to “level the playing field,” or to redistribute wealth, or to accomplish any other SOCIAL purpose.

Not that I think you're wrong, but I don't like to assume. Can you quote something from the Constitution that supports this view?

The “fairest” personal income tax would be a PER CAPITA tax. That is to say, everyone who pays taxes pays the same amount. Just like in a club or an association. The amount would only vary according to the needs of the government, and one’s personal income would not be relevant to the calculation.

Define fair in this context?

Ever seen an Olympic race track?

When runners have to turn corners it becomes obvious that the inner lane is much shorter than the other lanes.

If one runner were on the inner most track and the other was on the outer most track, would it be fair to stage them so they both start across from each other, or would you help the runner on the inner track by moving him forward so that he has the same distance to run?

If the runner on the inner track were to insist that it was his hard work that makes the race easier and that it's unfair that the runner on the outer track get's help.

Now without that help, how many people would even bother running that race?

Now in the real world, you make it sound as if people who acquire wealth literally do it all on their own. That the people who make up employees of local, state and national government didn't help to create the country that gives the wealthy the opportunity for free people to rise up based on their own hard work and succeed.

The "club" metaphor does not apply because clubs don't provide you with the resources when you are growing up to succeed. The "club" you belong to is the society you live in.

But it has been proposed that since people who have greater incomes can easily pay more (though what that has to do with anything, I don’t know), so one might contemplate a PERCENTAGE tax, with everyone paying the same percentage of their taxable income. So that Person Y, who makes twice as much as Person X, pays twice as much in tax as Person X. Well, this is not fair to Person Y, who derives no more benefit from his citizenship than person X…why should be pay twice as much in taxes? No good reason, actually.

So you believe everyone should pay a flat tax?

Humor us all and tell us what that tax should be?

But that is not real life. In real life, most of the people making the top incomes have reached that income level by some combination of HARD WORK, raw talent, superior intelligence, and intelligent risk taking. There are some people who have high incomes due to extreme good fortune, nepotism, or nefarious schemes, successfully executed, but these are a minority and public policy should not be decided on the basis of abnormal situations. And of course there is no rule that requires that the activity or products or services that generate high income must be intrinsically valuable to society; much of what we pay dearly for has minimal intrinsic value…consider a latte at Starbucks. An entertaining video game. A tasty snack. A catchy tune. None of these has any intrinsic value, but they might generate enormous quantities of cash.

It's nice that you can brush away the 14-17% (depending on the source) of people in the top 1% that inherited their wealth. Then there is the top 400 of which 22% inherited their wealth. But this doesn't take into account kids that grow up, put through college who never have to worry about failure. About being homeless or paying for heat or food. Those fears prevent people from living up to their full potential. I would hazard a guess that most people with incomes over $150k come from homes where their parents don't live check to check, who lived in houses not apartments, who, even if they didn't have "help" knew that if they failed, they had people that would be there if they needed them

I know many people who are very successful and many of them tell stories about their hard work and how their accomplishments got them to where they are, most agree that they took chances that might not have been possible without a strong family structure.

The political Left in the country constantly tries, overtly and covertly, to make the case that those with the highest incomes are either lucky or evil, hence astronomical income tax rates FOR THEM is entirely justified by the “needs” of others. But this is bullshit, peddled by a population (Leftists) of whom very few have ever experienced a truly productive or valuable moment in their pathetic little lives. It is not a coincidence that the cars in the corporate parking lot at 8pm are high-end cars; for the most part, the people who can afford them are the very same people who work 50, 60, and more hours a week. It is not “luck" that enables them to buy those high-end cars.

Give me a break. I work in IT sales, with people making $150k-$350k and I have to be honest, compared to my brother who drove a truch for 25 years and now runs a small carpentry business. Those sales guys have never worked a day in their lives (this goes for me).

Sometimes I'm embarrassed how hard people like my brother work how little they make and how poorly they can be treated compared to men I work with in my personal life. Again, almost every one of the high-end sales people I work with is trust fund babies who will never know what it was like waiting for mom to come home at 7pm after her second shift so you can finally eat at the age of 12.

That was me, I've lived on both sides of the fence. I grew up with a single mom in the 1970's. Who worked as hard as any of the sales and technical people I work with today, but the big difference is at the starting line.

So don't hand me this crap about how hard work is all it takes and the few people that are given what they have are insignificant. It's not just inheriting money, but the ability to live up to your potential, which often is more than just money.

In the end, it's about building strong societies, not just societies where individuals can succeed, but where the greatest number of people have the opportunity to succeed.
 

Econ4Every1

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Edit to the above (I wrote this without a good proof read, which is probably obvious)

This:

"If one runner were on the inner most track and the other was on the outer most track, would it be fair to stage them so they both start across from each other, or would you help the runner on the inner track by moving him forward so that he has the same distance to run?"

Should be this:

If one runner was on the inner most track and the other was on the outer most track, would it be fair to stage them so they both start across from each other equal at the start, or would you help the runner on the outer track by moving him forward so that he has the same distance to run to the finish?

Made a few word changes to clear it up a bit.
 

Penelope

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how do they make so much money , off the working man

Of course they gave the "working man" a job in the first place, but don't let that enter your feeble brain.

No the ones who wanted jobs, gave the corps tax cuts to get jobs. First we subsidize the corps and have a state war to get them by offering huge tax cuts, then they make lots of money, pay the CEO's mega bucks , and now they want a tax cut and lower regulations, then they file bankruptcy. (Darn sounds like Trump)
 

Econ4Every1

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how do they make so much money , off the working man

Of course they gave the "working man" a job in the first place, but don't let that enter your feeble brain.


No one "gives" you a job. I know that how we say it in the common lexicon, but the reality is if an employer has a need that employer has a shortage of labor. In order for the employer to meet their full potential, they desire to have someone come and do work for them so they can increase the size, scale, and profits of the company.

So please, don't make it sound like employers offer people jobs out of the goodness of their hearts. If I get a job, it's because I worked my ass off to become good enough at what I do, that an employer wants to so badly he's willing to pay me the salary I make. I earn my job being good at what I do and the relationship between my employer and I are as peers, not as owner - lackey. If my employer doesn't treat me with respect and pay me what I'm worth, I'll go and work for his/ her competition.
 

pinqy

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But it has been proposed that since people who have greater incomes can easily pay more (though what that has to do with anything, I don’t know), so one might contemplate a PERCENTAGE tax, with everyone paying the same percentage of their taxable income. So that Person Y, who makes twice as much as Person X, pays twice as much in tax as Person X. Well, this is not fair to Person Y, who derives no more benefit from his citizenship than person X…why should be pay twice as much in taxes? No good reason, actually.
Average Expenditures by income before taxes

In 2015, the percent of pre-tax income spent only on food and housing was as follows:
Income less than $15,000: 162.3%
$15,000 - $29,999: 72.8%
$30,000 - $39,999: 55.4%
$40,000 - $49,999: 45.6%
$50,000 - $69,999: 40.2%
$70,000 - $99,999: 35.2%
$100,000 - $149,999: 30.4%
$150,000 - $199,999: 27.4%
$200,000 and over: 20.1%

So who would be more adversely affected by a capitation tax or a flat income tax?
 

hunarcy

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The “fairest” personal income tax would be a PER CAPITA tax. That is to say, everyone who pays taxes pays the same amount. Just like in a club or an association. The amount would only vary according to the needs of the government, and one’s personal income would not be relevant to the calculation.
That's not an income tax, that is a capitation or poll tax. The Constitution specifically mentions this as a direct tax that must be apportioned among the states.


But it has been proposed that since people who have greater incomes can easily pay more (though what that has to do with anything, I don’t know), so one might contemplate a PERCENTAGE tax, with everyone paying the same percentage of their taxable income. So that Person Y, who makes twice as much as Person X, pays twice as much in tax as Person X. Well, this is not fair to Person Y, who derives no more benefit from his citizenship than person X…why should be pay twice as much in taxes? No good reason, actually.
Because he can pay more while not suffering any more.

That is your rationale, but the Constitution also talks about equal protection which you seem happy to ignore.
 

EdwardBaiamonte

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We have always had a progressive income tax and its fair.

fair is a supermarket where everyone pays the same price. When the poor free ride leech off the rich they are reversing evolution and only increasing their dependency and ultimate doom.
 

EdwardBaiamonte

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The "club" you belong to is the society you live in.
right and in most clubs leeches are not liked. Leeches in a society reverse evolution thus they and their supporters are anti-science and ultimately doom a society. Were it not for saintly Republicans holding back the Red Tide we would have met our soviet doom already.
 

EdwardBaiamonte

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That is your rationale, but the Constitution also talks about equal protection which you seem happy to ignore.

equal protection does not mean equal protection from your lazyness and inability to earn a living. The Constitution does not vaguely contemplate welfare. Our founders came to be free not to collect welfare and they came with no protection whatsoever,
 

EdwardBaiamonte

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But it has been proposed that since people who have greater incomes can easily pay more (though what that has to do with anything, I don’t know), so one might contemplate a PERCENTAGE tax, with everyone paying the same percentage of their taxable income. So that Person Y, who makes twice as much as Person X, pays twice as much in tax as Person X. Well, this is not fair to Person Y, who derives no more benefit from his citizenship than person X…why should be pay twice as much in taxes? No good reason, actually.
Average Expenditures by income before taxes

In 2015, the percent of pre-tax income spent only on food and housing was as follows:
Income less than $15,000: 162.3%
$15,000 - $29,999: 72.8%
$30,000 - $39,999: 55.4%
$40,000 - $49,999: 45.6%
$50,000 - $69,999: 40.2%
$70,000 - $99,999: 35.2%
$100,000 - $149,999: 30.4%
$150,000 - $199,999: 27.4%
$200,000 and over: 20.1%

So who would be more adversely affected by a capitation tax or a flat income tax?

Constitution is about freedom, not taxing less those adversely affected by pulling their own weight. Redistribution is Marxist, and it killed 120 million because nobody wanted to work. In fact most communist countries had a leechers tax
 

EdwardBaiamonte

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how do they make so much money , off the working man

Of course they gave the "working man" a job in the first place, but don't let that enter your feeble brain.


No one "gives" you a job. I know that how we say it in the common lexicon, but the reality is if an employer has a need that employer has a shortage of labor. In order for the employer to meet their full potential, they desire to have someone come and do work for them so they can increase the size, scale, and profits of the company.

So please, don't make it sound like employers offer people jobs out of the goodness of their hearts. If I get a job, it's because I worked my ass off to become good enough at what I do, that an employer wants to so badly he's willing to pay me the salary I make. I earn my job being good at what I do and the relationship between my employer and I are as peers, not as owner - lackey. If my employer doesn't treat me with respect and pay me what I'm worth, I'll go and work for his/ her competition.

the point is some people create new jobs and products and some don't. Those who do should pay little or no tax in recognition of the their huge contribution to our survival and to encourage them to do more of what they do ie, provide the jobs and products we need to survive rather than perish as lowly libcommunists.
 

EdwardBaiamonte

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would you help the runner on the outer track by moving him forward.
stop clowning!!! crippling successive generations with welfare in not helping!! Its subverting democracy in a cruel way to buy votes and maintain power!!
 

EdwardBaiamonte

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That's not an income tax, that is a capitation or poll tax. The Constitution specifically mentions this as a direct tax that must be apportioned among the states.

and do you favor the Constitution's tax?
 

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