Forums - Politics Discussion - Flat Tax (Everyone Pays Equal %)

Is a Flat tax a good idea?

Yes 32 35.96%
 
No 55 61.80%
 
Haven't ever thought about it much 2 2.25%
 
Total:89

Income taxes are like walking up to a friend and trading $20 for a baseball glove. Then some guy walks up to each of you and demands you pay him $5 because this is his spot that you used to make the transaction. If you don't pay him, he kicks your ass and steals your stuff. Then he puts you in a cell.



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Mummelmann said:
SWORDF1SH said:

But how many jobs are created from something like soccer being big? I know soccer stars might not directly create a lot of jobs but indirectly they do.

Say you have two teams with lots of mega stars, Manchester City versus Real Madrid; even if I agree with you in principal, there's no way their performance is creating enough stimuliation on the job market to justify their salaries relative to societal value. Another thing that annoys me is that we tend to dote on athletes and actors and hate on entrepreneurs, for some strange reason.

Example above, quick maths; Manchester City's total wage expenses are around 2.680.000 £ weekly, that makes about 3.680.000 $, add bonuses that are quite common, and one can easily add another 5-10% on top. The yearly cost is s staggering 1.393.600.000 £, or roughly 1.910.000.000 $.

Real Madrid weekly wage expenses are around 2.173.000 £, that makes about 2.980.000 $, the same type of bonuses are just as common here, adding another 5-10% or more on top. Yearly cost is about 1.130.000.000 £, or roughly 1.780.000.000 $.

With bonues, let's say about 4.000.000.000 $ with bonuses, which is likely on the low side. Even when you factor in medical staff, training staff and facilities, maintenance on stadiums, transport, PR departments, ticket salesmen, waiting staff, cleaning staff and stadiums and all other related jobs, even the net sales of shirts and other effects and the ones working these stores (where shirts from all sorts of teams are sold), the outcome will always favor an entrepeneur, considering the relative low amount of working hours per person per team, they simply don't employ nearly enough people through their sport. Given, it's hard to put a price on entertainment, but it's still food for thought. The net gain from actors are even worse, someone like Tom Cruise, who could easily make 50-100 million $ on a big film that takes him about 1.5-2 years to take part in, in bouts separated by breaks and other projects, a similar generation of revenue across actual industry or similar positions to provide jobs would be massively advantageous over this.

I think sports is quite easily the most justiable high wage position in the world. They bring in far more money than their salary is, and have global impact. The wages of all La Liga don't match the TV dollars alone.



If the tax drops to a flat 17%, how much revenue would the federal government lose? If we include the exemption to people who make under $50k, every person in the country would see a decrease in taxes. With the government unable to break even with our current tax rates, I can't imagine they would be able to handle a massive drop in revenue.



I'd probably be OK with a combination of basic income and a flat tax rate, assuming the basic income was high enough. In fact, I've thought for a good while that's the way to go. That's two things that simplify the system a lot, of which the first is probably a necessity in a few decades thanks to improvements in automatization and robotization, and the second one is just more fair for everyone.



The flat fails on multiple fronts. For the FairTax and other national sales tax plans in specific, it ignores the fact that percentage of income spent on most goods and services does not increase proportionally with income. In fact, as incomes increase, household expenditures generally decrease. For example, somebody with an annual income of $10 million isn't going to spend 200 times as much money on food, which is not exempt from the FairTax, as someone who makes $50,000 a year (see Engel's Curve).

Also, flat taxes, be they a flat income tax or a national sales tax, ignores the fact that, as you approach the highest earners, the percentage of income subject to federal income taxes decreases greatly and income deriving from capital gains increases greatly. CBO data from 2013 suggests that for the bottom 95% of earners, capital gains average about 5% of all income, while income from "labor" ranges from 75-80%. But for the top 1% of earners, labor accounts for only 36% of income while capital gains account for 38% (most of the rest is business income). Since capital gains taxes are often eliminated in flat tax systems, this effectively makes flat taxes regressive since as incomes increase, mostly at the higher end, the amount of total income subject to taxation decreases. In fact, most of the taxes we do pay, including excise, sales, and various local & state taxes, are regressive, falling more heavily on lower earners. Our progressive federal income tax system offsets this a fair amount, but perhaps not entirely.

Finally, despite being billed as simpler, the FairTax (and presumably most other "flat" tax systems) already has exemptions and token attempts at progressiveness built into it. Eventually, as more and more exemptions are added and new brackets for "prebates" added, you'll have a system no less complex than what we have now.

Instead of fundamentally changing the nature of federal taxation, we simply need to focus on reforming and streamlining the current system.

https://www.uwgb.edu/dutchs/PSEUDOSC/FairTaxInnum.HTM
http://www.taxpolicycenter.org/taxvox/trouble-fairtax
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51361-HouseholdIncomeFedTaxes.pdf
https://www.washingtonpost.com/news/wonk/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/?utm_term=.b626be0aa0c2



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SkepticallyMinded said:
Income taxes are like walking up to a friend and trading $20 for a baseball glove. Then some guy walks up to each of you and demands you pay him $5 because this is his spot that you used to make the transaction. If you don't pay him, he kicks your ass and steals your stuff. Then he puts you in a cell.

More like trading $20 for fixing your car.
While the guy collecting the $5 of each of you builds the roads you used to get the car to the guy that fixes it for you.

Ofcourse you're free to live off-grid, catch your own food and barter with your neighbours. Income 0, taxes done.



Most flat taxes include a tax free amount which covers subsistence.

However a flat tax does not make things much easier as the complexity is caused by what constitute taxable income and deductions -- that is where you have to move the papers.



On a completely unrelated and off topic note, I feel dumb reading this thread. You all seem very smart



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Are those tax figures legit? If so... Americans pay so little tax! Lucky bastards!



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Ka-pi96 said:
Are those tax figures legit? If so... Americans pay so little tax! Lucky bastards!

Well, it makes sense considering how present the American military is globally: they just take the resources and labour of people from other countries so they can reap the rewards. While other countries are also guilty of this, the US is currently #1.