How does a FlatTax with an exemption hurt the poor?

[fskimospy]

No one here is advocating lower tax on the rich. So I honestly don't even understand why the subject was brought up. Is that all you can bicker about?

A given with a flat tax: Closure of all loopholes that allows people like ol' Barracky that paid < 19% this year. There is only one given answer to the taxation of rich people that have the wealth and can invest in the future jobs of America: Taxing them will be a great reason to jump ship to our enemy nations to start their investment for much less.

Or do we need to learn to slap ourselves with a bat too before we learn even though the examples are everywhere:
http://www.dailymail.co.uk/news/art...ax-rate-income-1million-euros-goes-ahead.html
http://www.zerohedge.com/news/2012-...exodus-what-obama-can-learn-uks-tax-rich-plan

Studies on high income migration in relation to tax hikes have disagreed on its effects, but the two sides generally come down between 'no effect' and 'small, but noticeable effect'.

Needless to say, that is more credible than a zerohedge entry. Then again, what isn't more credible than goldbug central?

 

[berzerker60]

How about the Fair Tax? As I understand it, it scraps income taxes all together and just makes a consumption tax. You can give people below the poverty line a rebate at the end of the year so that they still don't have to pay taxes. Spend more, pay more taxes. It seems "fair" to me. What are the flaws in this idea?

It's still extremely regressive, thus making it more difficult for the poor to work their way out and easier for the rich to stay rich without continuing to work hard or contribute to society.

Sure, for the people getting a rebate it's not bad, but that's true for any tax system that doesn't apply to the lowest tier, including reasonable, progressive taxation.

You would need an astronomically high consumption tax for it to be the only tax, which would be murder for those who are on the lower end of the tax-paying spectrum. Meanwhile, the very rich would be even LESS likely to spend their money, meaning even MORE accumulation of wealth by the very rich then sitting on it and doing nothing productive with it.

 

[Anarchist420]

Some people do not like the idea of a flat tax because the lower income will actually have to pay taxes. The progressive tax is felt allows justification soaking of those that have more income.

There would be an exemption which would actually be larger than the current exemption and the standard deduction combined.

EVERYBODY IN THIS COUNTRY SHOULD PAY FEDERAL TAXES.

Do you actually like the shit the federal govt provides? Or would you like free market choices?

 

[nextJin]

There is plenty, and it was in practice in this country except for three periods: FDR's "recovery" that doubled the length of the Great Depression, LBJ to Carter, and the past half decade.

Hell, even JFK knew this:

“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

​

​

JFK also said ask not what your country can do for you but what you can do for your country. That's about as far from current liberal ideology as one could possibly imagine.

 

[piasabird]

What rate is the flat tax? Most people pay less than a 5% tax rate based on their gross pay. This is mainly due to tax deductions and exemptions and credits. I think I figured out that I paid 3% tax based on my Gross last year.

I have a pet peeve about taxes. I think everytime a church or a charity gives person money they should have to report it to the federal govt and then the feds should count that as income at the end of the year. This it to prevent people who ask for money from everyone in 7 states from getting too much from the system.

 

[jackstar7]

JFK also said ask not what your country can do for you but what you can do for your country. That's about as far from current liberal ideology as one could possibly imagine.

I'd say no one's ideology is in line with that and that's a bad thing.

 

[piasabird]

I have been thinking we need some kind of hybrid system. Keep the income tax but also have a supplemental federal sales tax.

I also think if a company or corporation gets a tax abatement from the state that they should have to count the tax that they did not pay as a payment-in-kind and have to count that as income.

 

[shadow9d9]

The flat tax is much better than the current system and would be much more effective. It's these idiot phantom enemies that I've been told to blame who are screwing everything up.

Fixed.

 

[Polarhound]

JFK also said ask not what your country can do for you but what you can do for your country. That's about as far from current liberal ideology as one could possibly imagine.

That reinforces my earlier point there that Classical Liberalism was killled off completely by LBJ and his followers who thought that FDR didn't go far enough. Now, if you scratch the surface, you'll find a sickle... and many on the left aren't afraid to trumpet that either.

 

[Polarhound]

Do you actually like the shit the federal govt provides? Or would you like free market choices?

The federal government provides NOTHING on it's own. It only confiscates and redistributes citizen's money because it thinks you and the States are too incompetent to do so on your own.

 

[Apple Of Sodom]

But a flat tax isn't fair! Everyone should pay the same amount! Let's just divide up taxes evenly among everyone! At $1.1 trillion in tax collected last year, and 312 million people, that's just $3,500,000 per person per year! I heard this anecdote once about a person on welfare with a nice TV, so that must mean everyone on welfare is a cheat, so that shouldn't be a problem! It's the only fair way.

Hell, let's cut 90% of all federal taxes, then the tax burden is just $350,000/person/year! No problem!

You fucking suck at math. Why don't you divide that number again and let us know what you get?

 

[berzerker60]

You fucking suck at math. Why don't you divide that number again and let us know what you get?

You're right, I was wrong, I entered the numbers incorrectly in my calculator and didn't bother to check. $3525/person/year. So still months of income for the poor, while in this case being completely meaningless for even the upper-middle class.

 

[Apple Of Sodom]

You're right, I was wrong, I entered the numbers incorrectly in my calculator and didn't bother to check. $3525/person/year. So still months of income for the poor, while in this case being completely meaningless for even the upper-middle class.

I rather like this idea. Admission fee for living in America. I paid a bit over $120,000 this year alone in taxes and it sucked. Not that I mind paying...I mind that the money is wasted on such stupid shit and that nearly 50% of Americans pay no federal income tax. THAT is what chaps my ass.

 

[nextJin]

I rather like this idea. Admission fee for living in America. I paid a bit over $120,000 this year alone in taxes and it sucked. Not that I mind paying...I mind that the money is wasted on such stupid shit and that nearly 50% of Americans pay no federal income tax. THAT is what chaps my ass.

You need to pay more.

 

[thraashman]

I rather like this idea. Admission fee for living in America. I paid a bit over $120,000 this year alone in taxes and it sucked. Not that I mind paying...I mind that the money is wasted on such stupid shit and that nearly 50% of Americans pay no federal income tax. THAT is what chaps my ass.

The problem is that those 50% also only control 2.4% of the total wealth while the top 1% controls 43% of the total wealth. You see the lower 50% don't pay any federal taxes because if they did a large number of them would just die. They're barely scraping by enough to eat weekly and are completely unable to amass any wealth. You could double the tax rates on the top 1% and they'd still be very well off with no struggling. And the top 400 who control an insane amount of wealth could be taxed at 99% and they'd still be making a crap load more per year than anyone in the bottom 50%.

I personally am in the upper 20% of earners and honestly am ok with increasing the tax rate of my bracket because I can afford it and still live well within my means.

 

[ivwshane]

The federal government provides NOTHING on it's own. It only confiscates and redistributes citizen's money because it thinks you and the States are too incompetent to do so on your own.

Yes it's a matter of incompetence. Let's go back to the days where we had kings and queens and those with money were able to buy power/henchmen to confiscate the riches from those that aren't competent enough to form their own gang to fight off those that try to take their riches.

You along with a few other people have absolutely no clue what government does and it's impact on your life that you take for granted all while you sit in your house that was built adhering to government regulations that keep you and all your goods safe that you bought from stores that benefited from government built and maintained roads which helped keep costs down so that you can afford them with you salary you get from a company that can afford you thanks to the government and the protection and stability they provide in the market place. Of course, you being the competent person you are, you probably work from home utilizing that nice little invention government helped to create called the internet, to make your money that's kept safe by the government entity called the police.

But yes let's go back to the times when people only cared about getting theirs and fuck everyone else if they can't compete, survival of the fittest right? When was the last time humans had that mentality?

Take your caveman thinking and shove it up your ass! Go live on an island and create your own rules and culture, meanwhile, advanced thinking humans will continue evolving and creating and striving for a utopian society with the help of government that makes it all possible.

 

[Fern]

It's kind of difficult to have an intelligent discussion about a tax plan if it has no details....

But I assume most here think a flat tax has two primary characteristics: a single rate and no (non-business) deductions like itemized deductions and personal exemptions. If the latter is true the flat tax will never happen. It would require great discipline on behalf of Congress. They would have to stop using the tax system as a way to support preferred businesses/industries and stop using it as a system for engineering society (wealth redistribution etc.)

Won't happen. Congress will never let anyone take away its favorite toy (or tool).

Fern

 

[Incorruptible]

Yes it's a matter of incompetence. Let's go back to the days where we had kings and queens and those with money were able to buy power/henchmen to confiscate the riches from those that aren't competent enough to form their own gang to fight off those that try to take their riches.

You along with a few other people have absolutely no clue what government does and it's impact on your life that you take for granted all while you sit in your house that was built adhering to government regulations that keep you and all your goods safe that you bought from stores that benefited from government built and maintained roads which helped keep costs down so that you can afford them with you salary you get from a company that can afford you thanks to the government and the protection and stability they provide in the market place. Of course, you being the competent person you are, you probably work from home utilizing that nice little invention government helped to create called the internet, to make your money that's kept safe by the government entity called the police.

But yes let's go back to the times when people only cared about getting theirs and fuck everyone else if they can't compete, survival of the fittest right? When was the last time humans had that mentality?

Take your caveman thinking and shove it up your ass! Go live on an island and create your own rules and culture, meanwhile, advanced thinking humans will continue evolving and creating and striving for a utopian society with the help of government that makes it all possible.

Take your idiotic socialist thinking and shove it up your ass!

 

[brycejones]

Take your idiotic socialist thinking and shove it up your ass!

That is very well reasoned, and detailed response. Thank you for your informative contribution to the discussion of this topic. With all the evidence you have presented to support your position there is no way anyone will be able refute your logic.

 

[BoberFett]

It's kind of difficult to have an intelligent discussion about a tax plan if it has no details....

But I assume most here think a flat tax has two primary characteristics: a single rate and no (non-business) deductions like itemized deductions and personal exemptions. If the latter is true the flat tax will never happen. It would require great discipline on behalf of Congress. They would have to stop using the tax system as a way to support preferred businesses/industries and stop using it as a system for engineering society (wealth redistribution etc.)

Won't happen. Congress will never let anyone take away its favorite toy (or tool).

Fern

Exactly. I've said it many times. The same group that howls about how the rich use loopholes would never allow us to move to a system with no loopholes. Those loopholes are how they accomplish their social engineering.

Want to push people to electric cars? Add a loophole! Want to push people to use CFL bulbs? Add a loophole! OH MY GOD THE WEALTHY ARE USING THE LOOPHOLES TO GET RICH!!!

Unintended consequences are a bitch.

 

[berzerker60]

That's every politician, which is a tiny subset of "the same group" who want to end loopholes for the rich, which is most of American society. It's not limited to "liberals" or "conservatives" who want to use the tax code to influence society. (It's more hypocritical for "small government conservatives" to do so, though they do it with glee, with tax breaks for marriage, home ownership, subsidies for oil companies, etc., but that's irrelevant to the fact that it's about politicians having power, not your partisan bullshit point).

 

[jackstar7]

With the Flat Tax are investments counted as income?

Seems like the right day to ask...

 

[BoberFett]

That's every politician, which is a tiny subset of "the same group" who want to end loopholes for the rich, which is most of American society. It's not limited to "liberals" or "conservatives" who want to use the tax code to influence society. (It's more hypocritical for "small government conservatives" to do so, though they do it with glee, with tax breaks for marriage, home ownership, subsidies for oil companies, etc., but that's irrelevant to the fact that it's about politicians having power, not your partisan bullshit point).

They have different aims. "Conservatives" use loopholes shamelessly to make themselves and their friends richer. "Liberals" use loopholes to force the average person to do things they don't want to do, and as a side benefit it makes them and their friends richer.

The end result and the general level of douchebaggery exhibited by both sides is roughly the same, but the goals are different.

 

[BoberFett]

With the Flat Tax are investments counted as income?

Seems like the right day to ask...

For me, I'd say yes. Capital gains should be taxed at the same rate as income.

However the gains still needs to be indexed against inflation. Any scenario (regardless of the tax ideology) which doesn't address inflation in it's capital gains calculations will destroy long term investment, and everything will be driven quarter to quarter with disastrous results.

 

[piasabird]

Usually these flat tax jerks suggest something like a 15% tax which is more than most people pay now.