I agree with many of your statements.  Which I shy I dont understand why you would want to put a flat tax on everyone.  Surely a poor person who spends most of his money on basic essentials shouldnt pay the same rate as a rich person who spends much of their money on frivolous items.

Why?

So should everything work this way? Should I show my W2 to Burger King, so they can adjust accordingly how much to charge me for food?

Everything outside of essentials is luxuray and therefore should be taxed at the same rate.

Hence a flat tax.

No, if you are having trouble paying for food you should stick to Burger King and not visit high-end french restaurant.

Wage earners dont demand more income, their income is decided by the free market.  It doesnt matter if you tax a company $100,000 or $1, if the free market values a software engineer at $60,000 a year that is how much he is going to make.

The government has to provide Seattle's light rail system because it the free market would never provide such a service.  There are public goods and private goods, and it so happens that the government is more efficient at providing public goods and the market is more efficient at providing private goods.  This is a simple economic fact, and if you think otherwise I ask you how efficient do you think the army would be if they depended on the free market to provide them with finances, or if you'd like paying a toll booth at every street corner?

Your idea that making people pay more or less taxes will change how they view government spending is a huge and incorrect assumption.  If someone pays $4,000 in taxes and you increase that to $5,000, a light bulb isnt going to flash in their head and change their view on government spending.

I can eat for a week on what Burger King cost, so based on basic needs, it's like a high-end french restaurant.

It would be interesting to see what it cost to live a minimum life, without being a burden on anyone. I bet it's very little.

I would consider Burger King a luxury as well. 

If you wanted to find out how little someone could eat on, you should include things that constitue a healthy diet in your equation.  I could only eat 25 cent Ramen which would add up to $5 a week (not factoring water, electricity, etc.), but I would be horribly malnurished.

I would consider Burger King a luxury as well. 

If you wanted to find out how little someone could eat on, you should include things that constitue a healthy diet in your equation.  I could only eat 25 cent Ramen which would add up to $5 a week (not factoring water, electricity, etc.), but I would be horribly malnurished.

Actually in both relative and absolute terms the person earning $1,000,000 benefits more than the person who earns $50,000.

The government protects property rights, I.P., security etc and provides the stability for large scale industry to thrive in a country. Without the existance of the government its likely that the person earning $50k could earn no more than $5k and the person earning 1000k could earn no more than $10k.

The only way someone is able to earn and retain a $1M income is due to protection of I.P., property rights, security (police etc), the enforcement of contracts etc. The most libertarian countries in the world are also the poorest because they have governments too weak to function.

So who should pay more for the upkeep of the police force? Someone who has more to steal?

So who should pay for the court system? Someone who has property of value to protect? Contracts to enforce?

So who should pay for the hospitals? Someone who benefits from a healthy society more than poorer individuals?

So who should pay for the schools? The people who benefit the most from an educated and able workforce?

I think you have a massive lack of understanding how the free market works ...

If you have a certain number of companies, who each require a certain number of employees who have a certain skill set, then depending on the quantity of people with that skillset relative to the number demanded determines a person's wage...

If companies have more money on hand they tend to use this money to grow their business, which means they need more employees with a variety of skills to perform the research and development, production, distribution and marketing of their good; as well as a larger number of supporting staff to look after the running of their business. As the economy becomes better and better the number of jobs available becomes greater than the available workforce and companies are required to pay higher wages for the same job to attract potential employees.

Locally, I have seen this happen when companies had to put up (large) signs on the side of the road to inform people that they could earn $22 per hour to stock shelves after hours at stores. I have seen companies agressively promote low level employees from "The Mail Room" or "The Loading Docs" to take on higher paying office jobs without any (appropriate) experience because they needed someone to fill that position.

No private industry would build Seattle's light rail transit system because the ridership is awful because it is designed to fill a need that no-one has. Now, when you spend (at least) 10 times what a private company could produce something, and there is no interest in it because it offers such little value, why would you assume that it was delivered efficiently?