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Forums - General - Why we need a flat tax.

Kasz216 said:
akuma587 said:
For all the time some of you guys spend arguing about tax rates being raised 2% or 3% you could have made hundreds of thousands of dollars by now.

And isn't it your duty as a citizen to pay taxes? I guess everyone loves to be patriotic until it comes time to actually do something tangible to support your country, like pay your taxes. Some of you act like the government anally rapes you when it does what it has the constitutional authority to do, tax you.

 

That's a silly arguement.  "The government has the ability to do it therefore it's right."

I've seen Mafoo argue that raising taxes is unconstitutional.

And I agree with you that the government should use that power responsibly.  The government should tax us as little as it can to maintain fiscal solvency and the government should spend as little as it can for the same reason.  But currently we are getting hit on both ends.  Tax revenues when adjusted for inflation, natural population growth, and GDP growth have plummeted since the Clinton years.  Spending has risen dramatically, though anyone who tells you that it is possible to run a balanced budget during a recession even if you want to while still maintaining a functional national government is fooling themselves.

The solution is pretty simple.  We need to cut spending and control the growth of spending.  We also need to raise taxes. 

High tax rates help control the economy from getting out of hand as well.  Low taxes are good during times of economic contraction, but high tax rates during good economic years prevents bubbles in the economy that result in economic crashes like the ones we just went through.  It controls the money supply and prevents overleveraging.



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

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akuma587 said:
Kasz216 said:
akuma587 said:
For all the time some of you guys spend arguing about tax rates being raised 2% or 3% you could have made hundreds of thousands of dollars by now.

And isn't it your duty as a citizen to pay taxes? I guess everyone loves to be patriotic until it comes time to actually do something tangible to support your country, like pay your taxes. Some of you act like the government anally rapes you when it does what it has the constitutional authority to do, tax you.

 

That's a silly arguement.  "The government has the ability to do it therefore it's right."

I've seen Mafoo argue that raising taxes is unconstitutional.

And I agree with you that the government should use that power responsibly.  The government should tax us as little as it can to maintain fiscal solvency and the government should spend as little as it can for the same reason.  But currently we are getting hit on both ends.  Tax revenues when adjusted for inflation, natural population growth, and GDP growth have plummeted since the Clinton years.  Spending has risen dramatically, though anyone who tells you that it is possible to run a balanced budget during a recession even if you want to while still maintaining a functional national government is fooling themselves.

The solution is pretty simple.  We need to cut spending and control the growth of spending.  We also need to raise taxes. 

High tax rates help control the economy from getting out of hand as well.  Low taxes are good during times of economic contraction, but high tax rates during good economic years prevents bubbles in the economy that result in economic crashes like the ones we just went through.  It controls the money supply and prevents overleveraging.

Uh... what about that 19.5 graph that's show tax revenue consistant with GDP?

Aside from what you've stated... none of that has anything to do with a progressive vs flat tax arguement.

Nor does it explain why we don't even have a proportional tax system... but instead a "pick and choose" style taxation system that leads to abuse.

All programs should be paid for by all people.  Taxes shouldn't be raised on some to get new programs in play.  When new taxation is needed everyone should feel the hit in some form or another.

If they can't.  Well the government is spending way too much money.



akuma587 said:

I've seen Mafoo argue that raising taxes is unconstitutional.

I have said taxing a group of people for the sole purpose of giving it to another is unconstitutional.

That has nothing to do with if I think we need to pay taxes. Everyone needs to pay taxes to pay for the things government should be doing.



that's very keynesian of you, akuma



Kasz216 said:

Uh... what about that 19.5 graph that's show tax revenue consistant with GDP?

Aside from what you've stated... none of that has anything to do with a progressive vs flat tax arguement.

Nor does it explain why we don't even have a proportional tax system... but instead a "pick and choose" style taxation system that leads to abuse.

All programs should be paid for by all people.  Taxes shouldn't be raised on some to get new programs in play.  When new taxation is needed everyone should feel the hit in some form or another.

If they can't.  Well the government is spending way too much money.

I don't buy that graph for various reasons.  One of them has to do with government deficits spiking during the Reagan years and progressively getting worse, absent some years of surpluses in the Clinton years.  And frankly when adjusted for inflation government budgets have not grown to that degree, even though you love to hear people piss and moan about government spending.  If you compare the budget now to 1970 and adjust for inflation, the budget is about at the same level.  But deficits have skyrocketed.

Furthermore, if you look at real revenue growth for the government during different administrations, real revenue growth is higher when taxes on the rich are higher, in spite of what many claim.  This article explains it relatively well.

http://krugman.blogs.nytimes.com/2008/01/17/reagan-and-revenue/

January 17, 2008, 7:03 pm

Reagan and revenue

Ah - commenter Tom says, in response to my post on taxes and revenues:

Taxes were cut at the beginning of the Reagan administration.

Federal tax receipts increased by 50% by the end of the Reagan Administration.

Although correlation does not prove causation the tax cut must have accounted for some portion of this increase in federal tax receipts.

I couldn’t have asked for a better example of why it’s important to correct for inflation and population growth, both of which tend to make revenues grow regardless of tax policy.

Actually, federal revenues rose 80 percent in dollar terms from 1980 to 1988. And numbers like that (sometimes they play with the dates) are thrown around by Reagan hagiographers all the time.

But real revenues per capita grew only 19 percent over the same period — better than the likely Bush performance, but still nothing exciting. In fact, it’s less than revenue growth in the period 1972-1980 (24 percent) and much less than the amazing 41 percent gain from 1992 to 2000.

Is it really possible that all the triumphant declarations that the Reagan tax cuts led to a revenue boom — declarations that you see in highly respectable places — are based on nothing but a failure to make the most elementary corrections for inflation and population growth? Yes, it is. I know we’re supposed to pretend that we’re having a serious discussion in this country; but the truth is that we aren’t.

Update: For the econowonks out there: business cycles are an issue here — revenue growth from trough to peak will look better than the reverse. Unfortunately, business cycles don’t correspond to administrations. But looking at revenue changes peak to peak is still revealing. So here’s the annual rate of growth of real revenue per capita over some cycles:

1973-1979: 2.7%
1979-1990: 1.8%
1990-2000: 3.2%
2000-2007 (probable peak): approximately zero

Do you see the revenue booms from the Reagan and Bush tax cuts? Me neither.



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

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That didn't refute anything that has to do with that graph.



TheRealMafoo said:
Final-Fan said:

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. 

Sorry, having more money makes life less hard. I don't think I want to live in a world where that's not true. If it was easy to be poor, why would anyone put forth the effort not to be?

Without the effort, what would the world be like?

Basically, you want the world to be a nice place, and it's not.

I'm not complaining that the poor have it harder than the rich, I'm complaining that you think it's a good idea to make taxes more hard on the poor vs. the rich.  It's like you're saying, "They already have it bad, so why not make it a little worse?"

I also think it's very interesting that you chose to respond only to this part of my post.  I can only presume that means you agree with my first point.  Do you also concur about the implications of your earlier statement, which I laid out in my third point? 



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That Guy said:
ManusJustus said:
That Guy said:

they theory is more like the trickle down effect.

If a rich guy has more money, he's not going to "give the money away." Rather, with his extra 10 million dollars, he will probably buy some cars and maybe 3 more houses and maybe invest in some stocks and, iono, go to vacation in Hawaii.

If a poor guy has more money, he is also going to buy goods, which will improve the economy.  Your argument goes nowhere.

yeah where's the poor guy getting money? Probably from his JOB working for the rich guy. If the rich guy had less money, maybe he wouldnt' be living it up in Hawaii and the poor guy would thus be unemployed.

And thank you for bringing up the multiplier effect. Yes, in turn, after the poor guy gets a 20 dollar tip from the rich guy, the poor guy can turn around and buy milk and diapers for his kids, and the grocery store gets money, which in turn pays off the grocery store workers and etc. etc.

Where is the rich guy getting his money?  Selling stuff to poor people.

The logic of your argument is that rich people use money to boost the economy and poor people dont help the economy because they put money in a black hole somewhere.

Please understand this.  Rich and poor people spend money alike.  They both buy goods and services that increased the demand for jobs through the job multiplier effect.  Rich people spend money and poor people spend money, and the free market does not care who spends that money.  Wether it is rich people with money or poor people with money DOES NOT effect the supply and demand of jobs, it only effects what types goods and services are in demand.

The multiplier effect has nothing to do with who has more money.  Again, the only difference between a rich person with $100,000 and ten poor people wtih $10,000 is what goods they buy with it and what industry gains from those purchases.



Kasz216 said:
ManusJustus said:

 Is it fair for everyone to pay the same tax, where poor people pay $2,000 tax and rich people pay 2,000 tax?

I guess.  Wouldn't work with how much money the government currently spends though.

So the fair thing to do is to charge everyone the same amount of tax?

Then why are you arguing for arbitrary percentages then?



ManusJustus said:
Kasz216 said:
ManusJustus said:

 Is it fair for everyone to pay the same tax, where poor people pay $2,000 tax and rich people pay 2,000 tax?

I guess.  Wouldn't work with how much money the government currently spends though.

So the fair thing to do is to charge everyone the same amount of tax?

Then why are you arguing for arbitrary percentages then?

Answer my question first.

Even though I already gave you my answer in that actual post.

I've also argued for a proportional taxation model in this thread.