Incomes up for upper class and rich, down for middle class...

[Kasz216]

Rath said:

sethnintendo said:

Rath said:
I don't understand the support for flat taxes in America, it would really screw the poor.

Well, it would only screw the poor if they weren't compensated for the necessities like food.  Basically, I like it because it is better than the government taking money out of my paycheck automatically and making me wait till the end of the year to get it back.  It would only screw the poor over who can't control their spending.  Don't want to pay tax on anything that isn't a necessity then don't buy it. 

I was talking about flat income tax. Sales taxes without exceptions are actually regressive as the poor need to spend a higher percentage of their income to survive. A sales tax with exceptions doesn't avoid the complexity that people complain about with progressive taxes anyway.

Wouldn't that mean a sales tax would be progressive?  If the poor are spending a higher precentage of their income to survive... neccessities being exempt from a sales tax... wouldn't they be paying a lower tax rate?

The arguement for it being Regressive, would be that the rich unlike the poor, are unlikely to spend all of their money in one year.  The poor spending what's left of their money on entertainment and non essential things.

Example.  Say you spend 70% of your income on needs, and 30% on non-needs.   At 20% tax your paying 6% of your income to the state.

While if your super rich and spend 1% of your income on needs and like... 10% on non needs your paying 3% of your income to the state.  While the rest is presumibly making you money somewhere.

 

Although LONGTERM it'd still end up being progressive because all that money has to be spent sometime, and little of it would go toawrds needs.