Yes that is exactly what I am saying. Which is why the $5K in your example is worth more to guy A than the $100,000 is to guy B. Not understanding your exclusion policy though...
Yes that is exactly what I am saying. Which is why the $5K in your example is worth more to guy A than the $100,000 is to guy B. Not understanding your exclusion policy though...
A progressive tax and consumption tax are not mutually exclusive. A consumption tax can be progressive or flat just as an income tax can be progressive or flat.
That is a huge burden on the poor, probably worse than a flat income tax (imagine someone who has trouble paying for milk and eggs at current prices being charged 25% more).
Our progressive and complex tax system is proof that progressive taxation does not improve the conditions of the poor. A flat tax would be more equitable especially if the embedded taxes we do not see are removed from the production process. Read the book, "The Fair Tax" by Linder and Boortz for information about the embedded taxation we currently pay (but never hear about or see on any receipt) in addition to the high progressive income tax rates. The whole system needs reworking and there is no easy answer, but I think a consumption tax is the best idea I have seen.
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It is all relative first of all. Do you have a study that supports that a LOWER tax does not help someone with money troubles? Sounds, very counterintuitive. In fact, a lot of literature already contradicts that claim.
The exclusion removes the low income from paying income tax, and takes the place of the standard and itemized deductions. Everyone, equally.
I completely disagree with your statement regarding the value of the dollar, then. It seems you are allowing someone else to judge who 'deserves' it and who doesn't, no matter the work, time, or personal investment put into earning it.
I believe a flat tax will remove some of the class warfare that has developed in recent decades and equalize the system. With the understanding that the people who are paying in the most, are the people least likely to use the programs they are paying for, people who get the most from the system are paying in the least, if at all. As with my brief discussion with Protectionist, that doesn't include military, infrastructure or the like. It's programs, as in assistance (welfare, unemployment, medicaid, food stamps, etc.)
Herein lies the root of our disagreement. I am not allowing anyone to judge someone else's value- I am the one that is taking into account the subjective theory of value and the diminishing returns of money. An equal rate means the people who value money more (and yes people who have less generally value it more- you can see study after study on this; look at the economics on marginal utility) are hit with a higher burden.
But really I can frame this in a way where I show that you are the one who is determining who "deserves" what because you think the rich should pay the same as the middle class despite not caring about the money. But there is no perfect framework either way- it is about taking what we know and applying it the best we can to improve outcomes. Some people will always use more government services than others for example, but you can't correct everyone's taxes to account for that.
The whole "class warfare" thing is the root of misunderstanding the marginal utility of money in my opinion. As for people who pay the most using the least- this is no necessarily true. In fact, in the case of people who own corporation stock, etc. the opposite might be true. Your average poor guy isn't using Federally funded public goods such as utilities, infrastructure, etc. nearly as much as the rich guy.
And what about other things poor people buy? Should a poor person have a greater tax burden on buying a TV than a rich person just because they are poor? Doesn't seem quite fair...
You don't think poor people should have TVs? And even if you don't, if THEY feel like that's where they want to spend their money, they should carry a larger burden than a rich guy to pay for it?
But forget the TV- let's say pencils for school supplies.
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