Final-Fan said:
Superman4 said:
I get what you are saying however I dont agree with it. On a percentage basis everyone should be taxed the same. If you make more you pay more just based on the percentage. Generally people who make more spend more and have higher costs of living, a poor person isnt goping to have a 5k per month mortgage or a $600 month car payment. They will live within their means. Rent or mortgage will be lower and car/transportation will be lower. Most people live to their means and dont have savings, pay check to pay check is pretty normal unluss you are very rich. 100K a year for a 5 person houshold is not a lot of money. Even if both parents work and make 60K per year or 120K combined, having a house payment and 1 or two car payments would make it hard to save anything unless they ate top ramen every day and didnt have TV or internet. Increasing the tax burden based on income puts the middle class in the worst situation of the three especially if you are at the bottom of the top percentage. You will end up paying the most tax even though you barely met the tax bracket. Keep the tax rate the same for everyone, stop all write off of any kind, stop requiring people to buy insurance of any kind and let people spend their money how they please. It sounds great to have the rich fund the poor until you realize that if you are the rich person you are the one working while the poor person is getting a free ride. It may not be a nice ride but a lot of people in that situatiuon choose to stay their because they dont have to work.
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Well, I have to say, I feel exactly the same way about your post as you said about mine with your first sentence! So we sort of agree on something there, anyway 
The way I see it, your post covers three general arguments, summed below. If you feel I've mischaracterized any of them, or missed a major point, let me know and I'll have to go back to the drawing board on my reply to that particular point. Please respond to the parts I got right. If it's a minor difference between my understanding and what you meant, it can probably be covered as part of your response.
(You)
1. People with higher income have a higher cost of living and other expenditures, so the argument that their "survival tax" is much less burdensome than what poor people face is much less true than what you (Final-Fan) said, or maybe even completely equal between rich and poor (proportionally speaking).
2a. Progressive taxes actually hit middle income people [edit: so much] harder than poor people [edit: that they are actually worse off].
2b. "You will end up paying the most tax even though you barely met the tax bracket." This one I am directly quoting because I am not 100% sure that what I think it means is what you actually meant to communicate. I am going to make a very strong counterargument against what I think it means, so let me know if I am off base.
3. Poor people are getting a "free ride". Perhaps not very nice, and yet nice enough that many people choose to not work so they can stay poor and get the benefits.
(Me)
1. I agree that expenses tend to go up as income goes up; however, I would characterize most of this increased spending as "lifestyle choices", and not "survival costs". You do agree, I hope, that there is actually a MINIMUM level of expenditure for people to survive on? Shelter, food, clothing, basic transportation since they need a job, etc. I think in this modern era a phone and/or internet are also basic needs. About 15 years ago I didn't have a cell phone, until I got a job that made it very clear that a cell phone was strongly recommended as a job tool. I may be misremembering but I think they might have actually made getting a cell phone a condition of getting the job. (If so, I'm sure they pointed out that I could claim it as a business expense.) I think that's more common today than ever.
"A house" might be a survival need, but "a house that needs a $5,000 a month mortgage" is not. That is a lifestyle choice. Cable television and Netflix subscriptions and video games and movies and traveling on vacation and traveling to see relatives are lifestyle choices. I wouldn't want a lifestyle without most of these things (I only travel once per year) but that is the reality for many low income people.
The point is, a rich person being taxed on the things they spend $200,000 per year on is not the same as a poor person being taxed on the things they spend $20,000 per year on. One is a "survival tax", the other is a "lifestyle tax". That is my position. Let me know if you disagree.
I would add to the above that health care costs are sometimes survival costs in the most literal possible way. And clearly a person with high income is more able to find expenses to give up to shoulder those costs than a low income person who has nothing left to cut.
I will answer 2B before 2A because I think the post flows better that way.
2b. "You will end up paying the most tax even though you barely met the tax bracket." This sounds to me like you are suffering from a common misperception that goes like this: If you are at a certain income and get a small raise, you will hit a new tax bracket and suddenly pay much more in taxes and actually go DOWN in income. This is completely, 100% false. This goes completely against the way the U.S. tax code is designed and I would be very surprised if anything like this happens to anyone ever. If it does I can only imagine they are doing some very strange things with their taxes.
A progressive tax system is designed like this (numbers for example purposes only):
—You are taxed 0% on the first $10,000 you make.
—You are taxed 10% on the money you make between $10,000 and $20,000. If you make $10,001 you get taxed 10% on ONLY the $1 you made over 10K: the rest is still not taxed.
—You are taxed 20% on the money you make between $20,000 and $40,000. You are taxed at 20% ONLY on the money you make above $20K: you are only taxed 10% for the money between $10K and $20K (i.e. $1,000 in tax) and still nothing on your first $10K.
—And so on until the top bracket where everything higher is taxed at the highest rate (still not affecting the tax on the lower amounts you made).
Clearly, it is not possible for your income to ever go down in a system that operates this way. Was I right about what you were saying? Either way, let me know what you think of this.
2a. Now, we do have a pretty complicated tax system. I won't sit here and claim that I know for sure how hard taxes hit low-income people compared to lower-middle-income people when you factor in all the current tax breaks, credits, etc. And we also do have a welfare system (that you want to get rid of). But here is my basic position counter to what you are proposing. Your proposal obviously assumes that we can make a radical change to the tax code: flat percentage tax, no tax breaks, just the percentage. My counter-proposal would be: progressive tax (described above), no tax breaks, just the percentage. This would not hit lower-middle-income people harder than low-income people. [edit: in the sense of them being worse off.] They would still make more money. If they didn't, they wouldn't have to pay more taxes! What do you think of that counter-proposal?
3. While we do have many tax credits for the "working poor", and a welfare system that does support even people who are currently unemployed or perhaps unable to get a job, I think it's a pretty severe mischaracterization to paint a picture that they have it better than people making much more money. Some people might talk about how nice it would be to get money and not have to work, but at the end of the day if they were actually given the opportunity to trade their job and their nice house and their car that was manufactured in this century and their high speed internet for the life of a person on welfare, I feel confident they'd go running back to their job every time. After all, if you think about it that's what they've already done!
P.S. Some people even propose to replace the current welfare system with a "negative income tax" bottom tax bracket (instead of paying $0, you get whatever thousand dollars). It does seem like an interesting system to me—good in theory, but I'm concerned that it would be more susceptible to fraud than the current system, and you know how concerned we are about welfare abuse already! If you're not against the concept of progressive taxes (described above), I wonder what you think about this "negative tax" bottom bracket concept? (What some people proposing the idea call a "pre-bate".) Obviously, everyone would get the "prebate", just like everyone pays 0% in the current bottom bracket. Not just poor people.
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