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Thread: Federal Flat Tax, Why Not?

  1. #1

    Federal Flat Tax, Why Not?

    Say a Flat 20% for all income over a certain number (for arguments sake, lets say that number is a "poverty line", say $12,000 per year).

    Every dollar you make, regardless of source, gets taxed at this 22%. No excemptions, not tax breaks, no complicated multi-tiered tax levels, no Massive expensivbe IRS, no returns at all matter of fact, nothing but a dead flat 20% of every dollar earned over 12K.

    Why not? Reasons, and positions please.

  2. #2
    Not ONE opinion? Wow. :(

  3. #3
    i wonder what that would do for gov't revenues

  4. #4
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    sounds fair 2 me

  5. #5
    [QUOTE=Warfish]Not ONE opinion? Wow. :([/QUOTE]


    Okay, I'll bite.

    I don't mind a flat tax at all. Give me a tax code with zero deductions and tax everything including cap gains, dividends, income, inheritance, gifts, etc. at the same rate, sure I would mind that at all.

    Question-Do rates go up when the economy goes south to maintain revenue? Do we cut rates when the economy does well and revenue goes up? Do we allow supply side theory to be in play when ever a politician wants to cut rates?

    I like the idea I just don't know how we maintain descipline and it doesn't turn to crap like the current tax system. Worth a shot though.

  6. #6
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    I don't think it would work...


    a federal sales tax or VAT/consumption tax is a much better option imho... the only thing is the accounting/tax preparer and IRS lobbies/bureaucracy would fight it tooth and nail

  7. #7
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    Change 20% to 10% (or less) and you've got yourself a deal!

  8. #8
    [QUOTE=Winstonbiggs]Okay, I'll bite.

    I don't mind a flat tax at all. Give me a tax code with zero deductions and tax everything including cap gains, dividends, income, inheritance, gifts, etc. at the same rate, sure I would mind that at all.

    Question-Do rates go up when the economy goes south to maintain revenue? Do we cut rates when the economy does well and revenue goes up? Do we allow supply side theory to be in play when ever a politician wants to cut rates?

    I like the idea I just don't know how we maintain descipline and it doesn't turn to crap like the current tax system. Worth a shot though.[/QUOTE]

    In a perfect world, no, rates stay fixed and permanent. Unchanged by the whims of politicians looking for votes, or looking for pork money.

    Govt. works best when it's smaller, and less intrusive. If the economy goes down under such a system (which shouldn't be effected nearly as much by a flat tax anyway), then the Govt. (like all citizens) will have to simply cut spending. THAT is how a smart Govt. would work anyway, spending only what and when it had to, not cause it buys votes, or looks good on their state resume.

    Taxation should be the bare minimum possible in order to maintain vital services, i.e. defense etc. The rate could be set just above that point, so the Fed could save a little themselves, for times of need. But NOT to spend on more pork.

  9. #9
    [QUOTE=Tanginius]I don't think it would work...


    a federal sales tax or VAT/consumption tax is a much better option imho... the only thing is the accounting/tax preparer and IRS lobbies/bureaucracy would fight it tooth and nail[/QUOTE]

    So those who enjoy the fruits of their labor get taxed more, while those who save and don't spend anything (i.e. don't help the economy at all) benifit.....?

    And how do you make the poor immune to this kind of tax without massive beurocracy to manage it?

    No, this type of tax idea hurts the poor, costs vastly more to administer, is just as complex as the current system, and rewards those who don't help the economy. No thanks.

  10. #10
    I wouldn't mind a flat tax, but I think the poverty line should be higher, someone making 13K nets under 10K. Perhaps 0% up to 12K , and small percentage increases up to 25K or so.

  11. #11
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    [QUOTE=Warfish]So those who enjoy the fruits of their labor get taxed more, while those who save and don't spend anything (i.e. don't help the economy at all) benifit.....?

    And how do you make the poor immune to this kind of tax without massive beurocracy to manage it?

    No, this type of tax idea hurts the poor, costs vastly more to administer, is just as complex as the current system, and rewards those who don't help the economy. No thanks.[/QUOTE]


    People who save help the economy. People generally put their savings in a financial institution, like a bank. That bank invests those deposits. That spurs economic activity.

    I suppose people who hold cash under mattresses don't help at all, but those idiots aren't even earning interest and are investing in something that guarantees a negative return, since time dilutes the value of money.

  12. #12
    Ok I'll chip in and I know I will be bombarded for this. There is no way on this earth that for instance a CEO how makes 5Mil a year should pay the same rate of tax as a salaried worker like a teacher, fireman or cop.

  13. #13
    [QUOTE=Queens Jet Fan]Ok I'll chip in and I know I will be bombarded for this. There is no way on this earth that for instance a CEO how makes 5Mil a year should pay the same rate of tax as a salaried worker like a teacher, fireman or cop.[/QUOTE]

    Why not? He/she is still contributing a sh!t load more money to the fund.

  14. #14
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    [QUOTE=Queens Jet Fan]Ok I'll chip in and I know I will be bombarded for this. There is no way on this earth that for instance a CEO how makes 5Mil a year should pay the same rate of tax as a salaried worker like a teacher, fireman or cop.[/QUOTE]

    To summarize, treating people equally is unfair, in your opinion?

    And why do people always default to the million-dollar CEO when "the rich" as defined by our tax codes includes people who don't even make close to $200k. People who earn like $125k are "rich" in many instances, even if they support a family and live in an area where the cost of living is quite high.

    People choose to be teachers and fireman and cops. Those guys get TONS of benefits and things that add up to tens of thousands of dollars ecah year. And, crucially, they CHOOSE to do this.

    People are obsessed with relative wealth in this country. The living standards of Americans have been rising steadily since our creation. Poor people today enjoy luxuries that even rich people didn't have only a few generations ago. But they obssess over "equality" in income as if productivity has nothing to do with income. As if the world's wealth and income is generated [I]somehow,[/I] and has nothing to do with highly productive people and a market environment and tax codes that reward risk-taking and entrepreneurship. It's like it's not good enough to drive a 98 Chevy if your neighbor drives a 2005 Benz. There's something "unfair" about that, even if the driver of the Benz is more productive than the Chevy driver and contributes more real dollars to the tax coffers. Truly poor people in this world get the real picture- that both people own cars, while they don't. Go to Peru and try to act like teachers and cops are kindred spirits to the poor and oppressed there, simply because, while they have plently, others have more. Hilarious.

    Hey, Steve Jobs DESERVES every penny he gets. Bill Gates DESERVES every penny he gets. Think about the wealth these guys have created and the incentives profits like that provide other smart, entrepreneurial people.

    Why do people think the US has kicked everyone's a$$ economically in such a short time? Why do people think the most capitalist, least-restrictive (basically) tax-wise country has been able to do this? Do you think it's a coincidence or that we're just luckier or smarter than everyone else? Hell no! We've simply been smart enough to recognize the value of human capital and how to best unleash it and benefit from it. We'd be wise to take steps like this to continue this trend. Absurd class-warfare and envy-whoring trickery isn't the way to go....
    Last edited by jets5ever; 01-10-2007 at 02:18 PM.

  15. #15
    [QUOTE=jets5ever]People who save help the economy. People generally put their savings in a financial institution, like a bank. That bank invests those deposits. That spurs economic activity.

    I suppose people who hold cash under mattresses don't help at all, but those idiots aren't even earning interest and are investing in something that guarantees a negative return, since time dilutes the value of money.[/QUOTE]

    Savings may help the economy just like current consumption helps the economy. It seems to me one of the key points to getting rid of deductions and having a simple flat tax is to get the government out of manipulating economic activity. Whether savings is better than investing is really a personal decision. It's that personal choice compounded over our entire population that gives our economy it's diversification and strength. Manipulation through the tax code to create behavior modification may in fact weaken the economy?

  16. #16
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    Problem is, this does not (again) bode well for the poor.

    !0 percent of 12,000 puts a much greater dent into a family than 10 percent of 150,000.

    The whole concept of a graduated tax system is to tax people with more to tax them more. The idea is if you are that successful, you should pay more into society to help it out.

    I can here the neo-lilberalist line of thinking on this. Why should I pay more because I worked harder to earn it? Depends on what you believe in. If you think its a great thing that 10 percent of the population holds 80 percent of the worlds wealth while more than 50 percent of the world lives on less than two dollars a day, then you would think that this is unfair.

    Personally, I come from the line of thinking that we got things wrong about one hundred and some odd years ago when John Locke misinterpreted the bible to prove his theory that would show private property is not only a good thing, but is a biblical right and responsiblity of people according to Genesis 1:28.

    It is through his theories on property that led to private property and the acquisition of wealth. Sorry to say, I am not much of a fan of the above example I mentioned.

  17. #17
    [QUOTE=CanadaSteve]Problem is, this does not (again) bode well for the poor.

    !0 percent of 12,000 puts a much greater dent into a family than 10 percent of 150,000.

    The whole concept of a graduated tax system is to tax people with more to tax them more. The idea is if you are that successful, you should pay more into society to help it out.

    I can here the neo-lilberalist line of thinking on this. Why should I pay more because I worked harder to earn it? Depends on what you believe in. If you think its a great thing that 10 percent of the population holds 80 percent of the worlds wealth while more than 50 percent of the world lives on less than two dollars a day, then you would think that this is unfair.

    Personally, I come from the line of thinking that we got things wrong about one hundred and some odd years ago when John Locke misinterpreted the bible to prove his theory that would show private property is not only a good thing, but is a biblical right and responsiblity of people according to Genesis 1:28.

    It is through his theories on property that led to private property and the acquisition of wealth. Sorry to say, I am not much of a fan of the above example I mentioned.[/QUOTE]


    Are you advocating Socialism run by the Church?

  18. #18
    I'll tell you what's unfair - gas taxes and cigarette taxes (non-smoker here) sales taxes, beer taxes - all examples of a tax that hits the "middle-class" right in the nads, particularly when compared to the wealthy.

    Yet, Democrats would amp them all up. And Democrats would amp up income taxes on the wealthy. And Democrats would not support a flat tax in the interests of the less fortunate, but neither would they support sniffing out loopholes for tax breaks.

    Ah, tax breaks and tax shelters, another instrument unavailable to the 'working class', the 'less fortunate', the middle class, etc. WOULD THE DEMOCRATS end this inequity? Wouldn't dream of it, that would harm the superwealthy.

    AND neither would Republicans, but they're not nearly as hypocritical in these regards. They actually promote lesser tax rates. In fact, the only lawmakers who'd entertain the flat tax are Republicans. It would be, hands down, the most equitable thing our lawmakers could do.

  19. #19
    [QUOTE=CanadaSteve]Problem is, this does not (again) bode well for the poor.

    !0 percent of 12,000 puts a much greater dent into a family than 10 percent of 150,000.

    The whole concept of a graduated tax system is to tax people with more to tax them more. The idea is if you are that successful, you should pay more into society to help it out.

    I can here the neo-lilberalist line of thinking on this. Why should I pay more because I worked harder to earn it? Depends on what you believe in. If you think its a great thing that 10 percent of the population holds 80 percent of the worlds wealth while more than 50 percent of the world lives on less than two dollars a day, then you would think that this is unfair.

    Personally, I come from the line of thinking that we got things wrong about one hundred and some odd years ago when John Locke misinterpreted the bible to prove his theory that would show private property is not only a good thing, but is a biblical right and responsiblity of people according to Genesis 1:28.

    It is through his theories on property that led to private property and the acquisition of wealth. Sorry to say, I am not much of a fan of the above example I mentioned.[/QUOTE]

    There is nothing Liberal, Neo or otherwise, in what you posted Steve.

    What you seemingly support is Classical Socialism/Communism and Redistribution of Wealth. No private property (all State or, I suppose knowing you, Church owned). No wealth at all, merely absolute equallity regardless of effort/intelligence/motivation level.

    I find that concept absolutely abhorrant. The weak and lazy already live off the backs of those who work hard, think hard, and create and earn the money in America. Nowhere on Earth can the poor do so little to help themselves, and reap so much from it.

    I am a fan of equallity. But not the Socialist version. Every man or women owes the same percentage of his income to the State, a low percentage. If you don't like losing $120 of your $12,000 every year, here is a suggestion....work harder, work smarter, pout the effort in it takes to succeed. Don't cry to the Govt, and don't cry to me about how tough it is. Everyones life is tough, ammassing wealth is tough, saving is tough, living within your means is tough. But no one owes you a damn thing, so stop putting your hand out, and use that hand to WORK for a change.

    If you think human greed goes away with socialism Steve, you are sadly mistaken.

  20. #20
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    [QUOTE=CanadaSteve]Problem is, this does not (again) bode well for the poor.

    !0 percent of 12,000 puts a much greater dent into a family than 10 percent of 150,000.

    The whole concept of a graduated tax system is to tax people with more to tax them more. The idea is if you are that successful, you should pay more into society to help it out.

    I can here the neo-lilberalist line of thinking on this. Why should I pay more because I worked harder to earn it? Depends on what you believe in. If you think its a great thing that 10 percent of the population holds 80 percent of the worlds wealth while more than 50 percent of the world lives on less than two dollars a day, then you would think that this is unfair.

    Personally, I come from the line of thinking that we got things wrong about one hundred and some odd years ago when John Locke misinterpreted the bible to prove his theory that would show private property is not only a good thing, but is a biblical right and responsiblity of people according to Genesis 1:28.

    It is through his theories on property that led to private property and the acquisition of wealth. Sorry to say, I am not much of a fan of the above example I mentioned.[/QUOTE]


    What is the 'world's' wealth? Does wealth just appear from thin air or does it get created by productive people? Our workers earn more income than third world countries' workers because we are more productive then them, by far. Until this changes, our relative wealth will not change. We create the vast majority of the wealth in the world, it makes sense that we earn higher incomes because of it. This doens't mean we're better people or that people in third world countries don't work as hard or as many hours...it's just that they aren't as productive. People imagine that wealth is something that gets created [I]somehow[/I] and they always leave out the distribution of [I]productivity [/I] in conversations like this. If we had to give to everyone in the world to make things "equal" in income, there would be no incentive for us productive workers to create wealth and we'd all be poor together. Is that better?

    The two questions people always need to ask about anything are: At what cost? and Compared to What?

    Also, in my opinion, you couldn't possibly be more wrong about private property. There is no such thing as freedom without private property. Period. Individual freedom is linked to private property - there cannot be any freedom without it. There would also be hardly any incentive to create wealth.

    Where do you think wealth comes from? How do you think it is created?

    My God, I don't mean to sound like a jerk, but not only are you wrong, but you are dangerously wrong. Notions like private property being bad and that freedom needs to be subserviant to some subjective notion of what is the "greater good" is a disastrous and horrifying philosophy...one that has been tried many times with consistently disastrous results, both economically and in terms of individual liberty. I cannot believe such thinking still exists today...it shocks me.
    Last edited by jets5ever; 01-10-2007 at 04:11 PM.

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