Why we need a flat tax.

[Sardauk]

SamuelRSmith said:
My problem with a flat tax rate is that the rich spend less of their money proportionally than the poor.

It's called the marginal propensity to consume, and it essentially means that the more money you have, the lower percentage of it that you spend.

Let's just say you have one guy who earns £100,000 per year, of that £100,000 he spends £80,000, and saves £20,000. Or, we could have two guys who earn £50,000 and they spend £45,000 a year, and save £5,000 - totaling £10,000 a year saved.

The economy benefits more from people spending their money, than it does by people saving it. And if people aren't spending their money because they have nothing that they need, then the money is essentially being wasted.

I'm talking about the vastly wealthy, now. The people that have millions in the bank, and no matter how much of it they spend, they will always have millions in the bank.

So rather than letting this money sit around, the rich get a higher proportion of their wages taken away so that the Government can spend the money, and help improve the economy.

Sure, it's not fair. But, fuck it, life's not fair.

This !

/thread