Why a flat tax is a bad idea

myp

Jan 2009
5,841
50
To continually place the tax burden on the high income group is disproportionate. Almost a penalty for doing well, IMO. Above and beyond paying more into the societal pool than any other group dollar for dollar, it is also the same group that builds hospitals, librarys, etc to the benefit of the other income groups.

The tax burden in a flat tax is on the poor. A progressive system attempts to place a more equal burden across income groups. How do you see a progressive tax system as a penalty for doing well when it is marginal? As for the group that builds libraries and hospitals? Not necessarily- libraries are usually public entities anyway...

But given the imperfect information and certain outliers on both sides, if you had the pick between accidentally overtaxing some poor or accidentally overtaxing some rich, which would you take? Seems like a no brainer to me...
 
Jan 2013
78
0
Sanity is relative
The tax burden in a flat tax is on the poor. A progressive system attempts to place a more equal burden across income groups. How do you see a progressive tax system as a penalty for doing well when it is marginal? As for the group that builds libraries and hospitals? Not necessarily- libraries are usually public entities anyway...

But given the imperfect information and certain outliers on both sides, if you had the pick between accidentally overtaxing some poor or accidentally overtaxing some rich, which would you take? Seems like a no brainer to me...

If the first '$25,000' is excluded from income tax, how is there a 'tax burden' on the poor? The majority if not all of their income is not taxed.

A great number of 'public facilities' are sponsored/donated/built by the higher income groups... Memorial library, hospital, girls/boys clubs, etc....

There is no 'accidentally' taxing someone. It is about as intentional an act as one could perceive.
 

myp

Jan 2009
5,841
50
If the first '$25,000' is excluded from income tax, how is there a 'tax burden' on the poor? The majority if not all of their income is not taxed.
Fine- a greater burden on the middle class than the rich. Doesn't make it better...

A great number of 'public facilities' are sponsored/donated/built by the higher income groups... Memorial library, hospital, girls/boys clubs, etc....
So what? Not all rich people donate to those groups and not all poor people use them. The incidence of tax is never going to be perfect.

There is no 'accidentally' taxing someone. It is about as intentional an act as one could perceive.
Read my bit on the incidence of tax above. Macroeconomics is far from a perfect science- it is far from intentional. Tax incidence can be a complicated thing as can the measurement of the usage of public services funded by said taxes.
 
Jan 2013
78
0
Sanity is relative
Fine- a greater burden on the middle class than the rich. Doesn't make it better...


So what? Not all rich people donate to those groups and not all poor people use them. The incidence of tax is never going to be perfect.


Read my bit on the incidence of tax above. Macroeconomics is far from a perfect science- it is far from intentional. Tax incidence can be a complicated thing as can the measurement of the usage of public services funded by said taxes.

You and I will never agree. I don't believe people should have to pay a disproportionate percentage of taxes as a 'punishment' for being successful.

What needs to happen is to force (and by that I mean monetarily penalize those who do not by cutting their assistance) those that CAN, but WON'T work into the public workforce after a limited time on assistance.

The permanent assistance users are the reason there is such an economic disparity... social mobility cannot be given to you, you must do it on your own.
 

myp

Jan 2009
5,841
50
You and I will never agree. I don't believe people should have to pay a disproportionate percentage of taxes as a 'punishment' for being successful.
It isn't punishment... Marginal rates mean you never make less after taxes for making more money...

The permanent assistance users are the reason there is such an economic disparity....
Do you have any data/studies to support this? I highly doubt people with so little market power have such a big impact on the disparity. The bottom 1% is not the reason the top 1% makes as much as it does. Not that I want to redistribute wealth, but just saying.
 
Jan 2013
78
0
Sanity is relative
It isn't punishment... Marginal rates mean you never make less after taxes for making more money...


Do you have any data/studies to support this? I highly doubt people with so little market power have such a big impact on the disparity. The bottom 1% is not the reason the top 1% makes as much as it does. Not that I want to redistribute wealth, but just saying.

They, as a group, have enormous 'market' power, depending on what you define as 'the market'.

The bottom income have no effect on what the upper income earn, they have an effect on what THEY earn. Too many people feel one influences the other, when in reality no one is holding the lower income group back, but themselves.
 

myp

Jan 2009
5,841
50
The bottom income have no effect on what the upper income earn, they have an effect on what THEY earn. Too many people feel one influences the other, when in reality no one is holding the lower income group back, but themselves.

The issues run a lot deeper than you make it seem. It isn't just a matter of break the cycle. There are different feedbacks, different cultures, different expectations, different opportunities, etc. For example, people of lower socioeconomic status tend to me more prone to substance abuse just because of their lower socioeconomic status and what comes with that. It isn't that these people are just "lazy"- perhaps some are, but you can't stereotype and say they all or even a majority are- that is just being unfair and unrealistic.
 
Jan 2013
78
0
Sanity is relative
The issues run a lot deeper than you make it seem. It isn't just a matter of break the cycle. There are different feedbacks, different cultures, different expectations, different opportunities, etc. For example, people of lower socioeconomic status tend to me more prone to substance abuse just because of their lower socioeconomic status and what comes with that. It isn't that these people are just "lazy"- perhaps some are, but you can't stereotype and say they all or even a majority are- that is just being unfair and unrealistic.

When you are paid more by the government to NOT work, than you would be to actually work, even the most motivated would hesitate.... it takes a special drive to move past that roadblock.

I don't stereotype. I know several wealthy druggies, and some lower income ones too. Just different drugs. I don't deny the issue is much larger in the lower income group. But as with a great number of things, personal motivation comes into play. Not all substance abusers want to shake it, but a good number can and will, given the motivation. If we keep petting them and telling them it's not their fault, what motivation is there?

They are responsible for who they are, and it takes serious motivation to climb up and out. The government is not providing that. Many other groups try, but there just isn't enough of them.

We've gone a bit OT here.

Nutshell is, until a 'perfect' tax system is found, and IMO the progressive tax isn't it, we are still using a system that penalizes two groups, to the benefit of one.
 

myp

Jan 2009
5,841
50
When you are paid more by the government to NOT work, than you would be to actually work, even the most motivated would hesitate.... it takes a special drive to move past that roadblock.

What does that have to do with progressive taxation? Furthermore, this is a known potential issue and one that has a lot of proposals to avert. Things like the EITC, like the negative income tax.

I don't stereotype. I know several wealthy druggies, and some lower income ones too. Just different drugs. I don't deny the issue is much larger in the lower income group. But as with a great number of things, personal motivation comes into play. Not all substance abusers want to shake it, but a good number can and will, given the motivation. If we keep petting them and telling them it's not their fault, what motivation is there?
No one is saying to pet them and say its not their fault. We aren't talking about what anyone should tell anyone here. It is about setting public policy.

They are responsible for who they are, and it takes serious motivation to climb up and out. The government is not providing that.
What proof do you have of this?

[/QUOTE]Nutshell is, until a 'perfect' tax system is found, and IMO the progressive tax isn't it, we are still using a system that penalizes two groups, to the benefit of one.[/QUOTE]
You will ALWAYS benefit some and penalize others. It is about optimal tax policy. Say what you will, but when the two options are giving the poor or middle class a fighting chance to get rich or making it harder on them while making it easier for the rich to get richer, I'll take the first one.
 

myp

Jan 2009
5,841
50
Let me put it another way: the rich have more capital. They can more easily invest their money to make money from that money. The poor generally don't have this option. The rich have more opportunities- it often becomes easier to make money when you have money. So if they can make money easier, then why not tax them at those higher margins, especially when the money means less to them at that margin anyway?
 
Jan 2013
78
0
Sanity is relative
Let me put it another way: the rich have more capital. They can more easily invest their money to make money from that money. The poor generally don't have this option. The rich have more opportunities- it often becomes easier to make money when you have money. So if they can make money easier, then why not tax them at those higher margins, especially when the money means less to them at that margin anyway?

Not skipping on you, office just came to a boil. BBL.
 
Jan 2013
16
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New Jersey
Basically, as you said, it is worse on poorer people. If you have a tiered flat tax, one for poorer peope and one for higher income people, it may work out better.
 

myp

Jan 2009
5,841
50
Basically, as you said, it is worse on poorer people. If you have a tiered flat tax, one for poorer peope and one for higher income people, it may work out better.

A tiered system is not a flat tax :p - it is progressive.
 
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