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Forums - General - Why we need a flat tax.

That Guy on 24 July 2009

We should just have a 35% sales tax and be done with it. That's how much gets taken out of our paycheck anyways, right?

Though I can see how things can still get sticky with that. Ebay? What about me selling my car to my friend? How are things on the secondary market taxed?



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ManusJustus on 24 July 2009
HappySqurriel said:

The majority of the "Rich" are self employed or small business owners and they're entirely in control of how many employees they have, how much they are paid, what they charge for goods and services, how many goods or services they buy from other companies, and so on. When the government taxes them they are very likely to lay people off, reduce the salary and benefits of their employees, increase the price of their goods and services, and/or cut back on buying goods and services from other companies.

When "Rich" individuals end up recovering the additional money they need to pay the increase in their tax while maintaining there standard of living by decreasing the income of those who work for them or sell them goods and services, or by increasing the cost of anyone who buys goods and services from them, they have effectively passed on the tax to other people.

The people who have the lowest control over the ammount they earn, and the most limited ability to control their costs, are the poor and the middle class because they're (disproportionately) employees who spend the majority of their earnings on necessary expenses. When these poor and middle class people see lower income and higher costs because of higher taxes they have (effectively) paid the tax that was targeting the wealthy.

Again, you are arguing that when rich people are taxed less they are essentially going to write people who work for them a check saying, "Here's some money from you, I dont need it because I only want to make seven million dollars this year and after I got a huge tax break I figured I would give all of the extra money away."

Thats not how the world works.  In the real world, the market decides what income employees should make.  If the free market decides that a software engineer should make $60,000, thats how much his boss is going to pay him.  The boss isnt going to throw extra money at him if he doesnt have to.  Same goes for goods, businesses aren't going to take a cut in profit because they dont want any more money.



That Guy on 24 July 2009
ManusJustus said:
HappySqurriel said:

The majority of the "Rich" are self employed or small business owners and they're entirely in control of how many employees they have, how much they are paid, what they charge for goods and services, how many goods or services they buy from other companies, and so on. When the government taxes them they are very likely to lay people off, reduce the salary and benefits of their employees, increase the price of their goods and services, and/or cut back on buying goods and services from other companies.

When "Rich" individuals end up recovering the additional money they need to pay the increase in their tax while maintaining there standard of living by decreasing the income of those who work for them or sell them goods and services, or by increasing the cost of anyone who buys goods and services from them, they have effectively passed on the tax to other people.

The people who have the lowest control over the ammount they earn, and the most limited ability to control their costs, are the poor and the middle class because they're (disproportionately) employees who spend the majority of their earnings on necessary expenses. When these poor and middle class people see lower income and higher costs because of higher taxes they have (effectively) paid the tax that was targeting the wealthy.

Again, you are arguing that when rich people are taxed less they are essentially going to write people who work for them a check saying, "Here's some money from you, I dont need it because I only want to make seven million dollars this year and after I got a huge tax break I figured I would give all of the extra money away."

Thats not how the world works.  In the real world, the market decides what income employees should make.  If the free market decides that a software engineer should make $60,000, thats how much his boss is going to pay him.  The boss isnt going to throw extra money at him if he doesnt have to.  Same goes for goods, businesses aren't going to take a cut in profit because they dont want any more money.

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.

 

Well in doing those things, he just paid the paychecks of some factory workers in Detroit, some architects and construction workers in Beverly Hills, some stock brokers on Wall Street, and some software engineers at some start up somewhere in Silicon Valley; not to mention the hotel workers he is staying at in Hawaii, and the restaurant workers that he will be tipping when he goes and eats out.

 



That Guy on 24 July 2009

If rich people just sat on their money and did nothing, then yes, the system would fail. However, rich people like to spend money, and LOTS of it, so all us underlings get table scraps from the rich when they decide to pamper themselves



Slimebeast on 24 July 2009

^yeah, actually rich people buy luxury items which have a lot higher retail mark up (=profit) meaning they distribute that wealth back in a higher rate than the regular Joe who always searches for deals on Wal-mark.



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Kasz216 on 24 July 2009
ManusJustus said:
Kasz216 said:
ManusJustus said:

Their fair share doesn't necessary mean 20% and 20%.  Taxing 20% on someone who makes $15,000 a year is more hurtful to that person than taxing 20% on someone who makes $150,000. 

America's tax system is full of loop holes that rich are able to take advantage off.  I personally know of many instances of people getting tax breaks to for frivolous items or business owners not reporting income.

Actually it does mean 20% of 20%.  20% is 20%... that is fair.

If your being taxed 20% of your income your beign taxed 20% of the time you've worked.

 

Otherwise your penalizing people because what they do is seen as more valuable.  That's really quite stupid.

The only reason flat taxes don't work is because governments are full of corruption who like to spend money on pet projects and waste it.

Ideally a flat tax should work.  Of course you need to get rid of all deductions and lower wasteful government spending.


Progressive taxation is inherently unfair and only done because people can't think of a better way to do it.

I mean how does "You do something more valuable therefore you owe more to the country" make sense?

Obviously, you arent being taxed 20% of the time you've worked because people have differenty hourly wages.

No, 20% and 20% is not fair.  You've made up some idea of 'fair' that really doesnt exist.  You could argue fair would be taxing people the same amount (everyone pays a tax of $2,000), or you could sargue that fair is taxing people with respect to how much they can afford (poor pay less since they can afford less).  Those are two completely different ideas of 'what is fair' that are independent of each other, yet you are trying to put them together and calling them both unfair alone but somehow fair when combined.

Yeah... that's what percentages are for.

Taxing people an exact percentage of what they've worked.  For every 10 hours you work.  We tax you 2 hours etc.

It is fair.

When you tax on what you can afford you ignore the work spent to make that money and the value of what the people who work provide the country. 

 

That is why it is a flat percentage.  Rather then one way focusing only on total paid (everyone pays 2,000) or the other (Everyone pays based soley on income.)

 

 



HappySqurriel on 24 July 2009
ManusJustus said:
HappySqurriel said:

The majority of the "Rich" are self employed or small business owners and they're entirely in control of how many employees they have, how much they are paid, what they charge for goods and services, how many goods or services they buy from other companies, and so on. When the government taxes them they are very likely to lay people off, reduce the salary and benefits of their employees, increase the price of their goods and services, and/or cut back on buying goods and services from other companies.

When "Rich" individuals end up recovering the additional money they need to pay the increase in their tax while maintaining there standard of living by decreasing the income of those who work for them or sell them goods and services, or by increasing the cost of anyone who buys goods and services from them, they have effectively passed on the tax to other people.

The people who have the lowest control over the ammount they earn, and the most limited ability to control their costs, are the poor and the middle class because they're (disproportionately) employees who spend the majority of their earnings on necessary expenses. When these poor and middle class people see lower income and higher costs because of higher taxes they have (effectively) paid the tax that was targeting the wealthy.

Again, you are arguing that when rich people are taxed less they are essentially going to write people who work for them a check saying, "Here's some money from you, I dont need it because I only want to make seven million dollars this year and after I got a huge tax break I figured I would give all of the extra money away."

Thats not how the world works.  In the real world, the market decides what income employees should make.  If the free market decides that a software engineer should make $60,000, thats how much his boss is going to pay him.  The boss isnt going to throw extra money at him if he doesnt have to.  Same goes for goods, businesses aren't going to take a cut in profit because they dont want any more money.

The free market will protect people with valued skills that are in demand, but these tend to be people who are not being "protected" by a progressive tax system anyways. While not all engineers and software developers are high earners for their field, they tend to be in the top 25% of income earners and (generally speaking) pay a proportionate percentage of tax gathered.

Its the bottom 50% that suffer because their skillset is not rare or valued, and when enough people are laid off because of companies cutting costs to recover money to pay increased taxes, the company they work for has a lot of power to adjust their income as they see fit.

Now, when taxes are low enough that companies thrive and unemployment is low the low wage earners have far more power to demand more equatible incomes because the companies cannot operate without their work. The reason a flat tax helps with this is that when 100% of people become aware that they have a stake in the total tax rate there is an increased focus on controlling unnecessary spending.



mrstickball on 24 July 2009

HS -

Not only that, but under a flat tax system, companies should be able to better project costs and earnings in a way that will assure that they can afford to be more competitive in the labor field.



Back from the dead, I'm afraid.

ph4nt on 24 July 2009

taxes are good, we all hate them but they are 100% necesary.

That being said, if the government didn't waste all their money on stupid programs, taxes could be reduced by half and we would still have more than enough cash.

Our government has a certain way of thinking, if the budget gets really high, rather than focusing on cutting out the less important stuff they just raise taxes.

If you are in the middle class you feel it the worst, the middle class is supporting America, not the rich. We get taxed the most and receive the lest amount of benefits from government programs.

Now here is one thing that really pisses me off, welfare, my tax dollars are supposedly going to help poor people get back on their feet so they don't live on the street, so why are so many people on welfare FAT. If you are relying on government money to live, you should be barely getting enough to survive, I see people in the supermarket all the time weighing 300+ pounds buying beer and donuts with FOOD STAMPS, my tax dollars are going to people who dont need the money and are wasting it on excess food, disgusting. Where else are your tax dollars going to?

look at this.

http://www.youtube.com/watch?v=lvzNj0Vobss

and that's just the beginning of wasteful spending.

The government wastes so much money it's sickening, you think in a time where money is hard to come by we would be trying to conserve rather then spend.

Anyone else find it funny how to bring us out of a recession the government is firing billions of dollars at failing companies?

I would be much more comfortable if i knew my taxes were going to better use than the crap it's really used for.



Slimebeast on 24 July 2009

Obviously there's a lot more strong arguments for a flat tax than progressive, as has been shown in this thread, but politics and politicians don't work that way, they don't always choose what is best for the nation or the people. They don't prioritize the optimal and most effective solution.

In essence the majority of politicians want to play Sim City, and for that you need a lot of resources = taxes. And the more complicated you design the economical system and taxation methods, the easier it gets to collect a lot of taxes without people detecting that they're getting ripped off, or detecting that the authorities in power are using people's money on useless costly projects and so called reforms.