Why we need a flat tax.

[Final-Fan]

TheRealMafoo said:

Final-Fan said:

TheRealMafoo said:

Final-Fan said:
I don't feel like getting dragged into this debate at the moment (though I reserve the right to succumb to the urge), but there is one point I want to make:

Flat tax vs. progressive tax is a completely different subject from no loop holes vs. shitloads of loopholes. Saying we ought to junk progressive taxation in favor of flat taxation because of loopholes is just a bad argument.

I agree. Flat tax, no loopholes is what I think we should have.

And for all those who are worried about people not being able to eat with a flat tax system.. if everyone paid taxes, it would do two things...

One is it would mean every bill that needs to be paid for, is paid for by everyone. This means a lot less bills will be passed. Right now, 40% of the US doesn't pay taxes, so what do they care what something costs.

This would reduce the cost of government, thus reducing everyones taxes.

Also, if everyone paid taxes and took home 20% less, then what it cost for the poor to have the same standard of living they have today, would be 20% less. The market adjusts to such things.

40% don't pay taxes?? Evidence plz.

And I presume this means you disagree with the solution mrstickball favors, which essentially has a big tax credit to give a flat tax a progressive face.

Why don't you think that an absolutely flat tax would burden low earners much more, when they have much higher proportions of their income that are necessary expenditures (food, basic amenities, etc.)?

Also, I'm far from expert in economics, but I find it hard to believe that the market is as fluid as it seems to me that you suppose. Sometimes, I recall, it isn't fluid, and I'd like to hear why basic purchases are not one of those times. I would think that the cost of the materials that go into such things would make it less flexible than for other things.

Finally, why doesn't your last paragraph imply that the government can tax at an almost arbitrary rate with no impact on people's standard of living?

P.S. That was fast.

(1)http://www.taxfoundation.org/research/show/542.html

That's just a quick link. It's from 2004 and is up to 32% back then. As you can see however, it's growing. (/1)

And no, I do not agree with MrStickball's solution. Flat tax, no exceptions.

(2)and to comment on the burdening low earners much more, I think it would. It would also burden the guy who makes a million a year far more then the guy who makes 100 million a year. That doesn't mean it's not his responsibility. A poor person is far more burdened feeding his kids, then a rich man. That does not mean he doesn't need to do it.(/2)

This country belongs to all of us. We all have an obligation to pitch in the time to keep it running.

1. Zero income tax liability. Doesn't that mean they still pay payroll taxes and things? 

2. Well, if you think that it's right for us (by way of gov't) to inflict more hardship on the poor than on the rich (by way of taxes) ... I'm not sure what to say to that.  Your position as I understand it so far sounds an awful lot like, "Everyone needs to do their fair share, only the poor guy's fair share is harder than the rich guy's fair share."  I suppose you have a different concept of "fair".  Fair enough. 

3. And I noticed you didn't answer my final question.  While I'm at it I might as well expand on it.  This is the key thing I was reacting to:  "Also, if everyone paid taxes and took home 20% less, then what it cost for the poor to have the same standard of living they have today, would be 20% less. The market adjusts to such things." 

This says that you believe that if everyone made less money (take-home pay) then the market would adjust in such a way that their standard of living would stay the same.  So surely you can't also claim that (if everyone made less money due to increased taxes) this would not occur? 

(And for that matter, the inverse implied (by the initial claim) is that cutting taxes across the board would simply result in the market adjusting to erase any benefit to standard of living.)