OKAY, so let's fight about the "Flat Tax": a subject WORTH fighting about.

[Tyler Durden]

The Rich SHOULD pay higher taxes. This should not be negotiable and is a no-brainer.

The reason? Per Capita, they receive a higher percentage of the BENEFITS of society.

Take Police: In Grosse Point, a rich suburb of Detroit, the number of police per taxpayer is much higher per unit area/person than in the city of Detroit itself. Who has the higher crime rate? Is this equal?

Take streets: in Detroit you take a chance of losing a wheel just driving on surface streets. Don't even START about the Freeways. In Grosse Point you can really see your road repair tax dollars at work: we are talking miles and miles of streets smooth as a baby's ass.

Take services like water: Detroit OWNS the water system, but can they charge people outside of Detroit (Like Grosse Point) higher for water, or tax them for infrastructure maintenance? Nope. Here in Michigan, when you buy judges, they STAY bought.


I can keep listing things here, like the gated communities of Houston with city-maintained streets that you, a member of the "hoi polloi," CANNOT DRIVE ON, but have to pay for, or the expense of underground utilities, or the expense of having local water/sewer pipes that WORK.

So tell me again: why should these people be taxed at the same rate as some schmuck at McDonalds, and if you mention "life choices" ONE TIME, I will vomit on your shoes.

[LostinVA]

1. No argument from me

I believe the rich (not middle class) should pay a significantly higher taxes, and that a flat tax is immoral. It shocks me that there are people on DU who approve of such a tax.

[WCGreen]

2. Exactly....

Wealthy people also have more at stake in proteting the financial markets, funding the judicial system that protects property rights and maintains an infrastructure dedicated to moving stuff all over country in order to increase the profitability of thei companies...

Everyone of your arguements is based on local taxation issues...

[bleedingheart]

3. Amen!

I completely agree...no need to vomit on my crocs...

[1932]

4. Everyone agrees with overtime pay, right?

The less you have of something, the more valuable it is to you, right?

So, why treat someone's millionth dollar the same as you treat the 20,000th dollar of someone who only has 20,000 dollars?

A poor person's dollar is worth way more to them than a rich person's dollar and to tax both of them the same rate is to, by definition, shift the tax burden on to the poor person.

[mntleo2]

18. I Am Low Income ...

...and 10% of $8000.00 means I could not even buy the necessities and to me $800.00 is a lot of money, leaving my kids and I only $7200.00 to live on for a year, that would cause a great deal of suffering for my family if it were taken.

I do not think someone with $1,000,000.00 would miss much the $100,000.00 they would pay, because it would still leave $900,000.00 they have to live on. Since that is over 100 X what a low income person like my family and me live on, even if they had 8 kids, they would do fine.

This is why a flat tax is not a good idea to me, see?

Cat In Seattle

[MannyGoldstein]

5. An Honest Flat Tax Could Be Better Than The Status Quo

As long as there's an exemption for the poor, and if we include Social Security payments as a tax (which it effectively is today).

Currently, the wealthiest Americans pay roughly 17% of their income in federal taxes. The typical workin' stiff, by contrast, pays about 30% if you include Social Security. So the Middle Class now pay twice what the Rich pay.

[1932]

7. But a progressive tax would be the best of all.

[MannyGoldstein]

11. Absolutely - Let's Take It Back To Eisenhower's Time...

Dwight D. Eisenhower: Flaming Liberal

[Jeff In Milwaukee]

38. Cool Link

Thanks for the civics lesson!

[Joe Chi Minh]

31. In the UK, the word "rationalisation" is grossly misused to describe

processes for streamlining the enrichment of the already opulent, at the expense of everyone else - not least the bulk of the workforce, and indeed the unemployed, whose ranks they proliferate under the designation of this same weasel word.

Gravel got it half right about taxation. It needs to be simplified so that NONE of the latter, many of whom are sharks, if not downright crooked, and whom the MSM like to designate as cuddly "fat cats" in that folksy, down-home kind of way, can wriggle out of paying their allotted share. However, it should be in the form of a single tax on income, both personal and corporate.

I can only speak of the flat taxes in the UK, most notably the council tax, but also purchase taxes of all kinds, including VAT, motor vehicle tax (most of which is not even used to maintain the roads in an acceptable condition, but diverted elsewhere to get the GOVERNMENT out of a hole!), petrol tax, even parking charges, should all be abolished, in favour of this uniquely just system of taxation, INCOME TAX.

And absolutely no allowances, since the poorer folk would naturally be exempt. Sure, many lawyers and accountants would have to refocus some of their attention on more important matters, but I'm sure they would take a lot of comfort in the certain knowledge that we would all be feeling their pain.

[Progressive_In_NC]

10. Federal State and local; I pay 46% of my income in taxes

The guy up the street whose company made over a million a year on his business paid no taxes last year at the federal level. He created a business and pays himself 30K a year. He then per diems himself since he travels (that's tax free) the maximum allowed federal limit. All of his cars are business expenses too, and he leases new ones every other year.

Somehow, it just doesn't seem fair.

[rfranklin]

15. Everyone under $100,000 is exempt...after that tax is 40%

on every dollar.

[snooper2]

25. So how many people would simply just make 98,000 a year?

:eyes:

A flat tax of 8% on everybody who makes over 22,000 a year, period. 0 exemptions; not for kids, losses in the stock market, nothing. This is just for federal taxes. State taxes obviously would still be handled by the state.

[Progressive_In_NC]

6. I want a fair tax, a consumption tax.....not a stinking flat tax....

I spoke with my boss about this (we sell mail room equipment). He said that our price includes a 30% markup (roughly) to pay for tax overhead. That means all of the compliance and tax prep salaries, plus all of the social security, et al taxes he pays on his employees.

If you went to a consumption tax, he could cut his price by 25% he's figured (there would still be some costs); and then a 25% consumption tax could be added.

As long as you cover the poorest Americans by giving rebates up to say the first 24K a year (2K a month tax free for living expenses, adjusted by regional cost of living); you'd be fine. Then that guy next door to me with the aluminum six car garage in his back yard would have paid 45,000 in taxes on those six cars and trucks, rather than writing most of them off on his business taxes and allowing his teenage kids to drive them.

The current tax code is too complicated, and I think we should pay based on what we consume. I'm tired of watching rich folks create S corps and get everything for free tax wise.

If you buy a boat, you should pay taxes on the boat. If you but a SECOND or THIRD or FOURTH home, you should pay a LOT of taxes on that home. Instead of writing off the mortgage interest.

Then you could cut the IRS budget by 80% and we'd have MORE money in the coffers than comes in now. There are WAY too many loopholes. This would close those, in my opinion. You buy it, you pay to run the gov't as part of that.

[1932]

9. Check out the way you pay income tax in the UK

you can still have an income tax without having to fill out dozens of forms.

[jmowreader]

27. The "fair tax" isn't fair at all

Reason being, it doesn't cover used items.

Say I'm a builder. If my livelihood is based on selling new homes, it would be tough to maintain that livelihood if I were competing against equivalent homes that are 40 percent less expensive because someone's already lived in them.

You'd have a hard time moving new mailing equipment if the used equipment doesn't come with a 40-percent tax markup.

Your example of a boat? Is it fair that the taxes on a new 16-foot jon boat would be higher than the taxes on a five-year-old Hatteras?

Actually...I think I just figured out how to kill this useless idea dead:

New boat: $2400 FairTax*


Used boat: No FairTax*


* Boats pictured are Alumacraft 16-foot jon boat with outboard motor and Hatteras 64-foot motor yacht. Tax on new boat based on $6000 retail price for boat, motor and trailer at 40% FairTax new product rate. Tax on used boat based on $4.5 million retail price for yacht at 0% FairTax used product rate.

Is it really fair? I didn't think so.

Oh: Welcome to DU. Where do you live? I'm in Fayetteville.

[Progressive_In_NC]

28. I'd be for taxing it on resale as well....

It's about taxing the exchange of money in my opinion, not about whether or not the used boat has already been taxed.

I live in Wake Forest north of Raleigh. We did the dogwood festival thing to visit with friends of ours that work on base down there recently. Thanks for the welcome.

[jmowreader]

34. You might be, but Gravel and Boortz aren't

Go to http://www.fairtax.org and check the FAQ. First item: what is taxed? Answer: only new items sold to their end-user. Used items, and items which will enter a value-added process, are not taxable.

I can understand not wanting to tax ingredients, parts, materials, whatever you want to call products that will be used to produce higher-value products. That's the way they do it now. But not wanting to tax used items? There's a hell of a difference between a $15 used car part and Dale Jarrett's old house on Lake Norman, but under Boortz/Gravel's FairTax both are untaxable--because they're used.

[ProdigalJunkMail]

39. have you even read the Fair Tax proposals?

I would gather from your simplified explanation that you have not...and the current proposals on the table are nowhere near the 40% you quote.

sP

[mac56]

41. I sparred with someone about "fair tax" awhile back.

Take a look if you're interested.


http://journals.democraticunderground.com/mac56/1
http://journals.democraticunderground.com/mac56/2

[Rosemary2205]

8. At this point flat tax would probably be an IMPROVEMENT

I paid a total 37% of my total income in federal taxes of one sort or another. I also paid a total of 14% of my total income in state and local taxes of one sort or another.

Nearly all of Bill Gate's income comes from dividends which I do believe are taxed at 15%.

Not that I'm in favor of a flat tax (though a graduated flat tax in various progressive percentages with no loopholes and no deductions is appealing to me) but it seems to me if we pick, say a 30% tax on every penny of one's income to be shared between all governments, then I would instantly get a 21% raise and Bill Gates would pay twice as much as he's paying now.

[The2ndWheel]

12. Life choices

I triple dog dare you.

Obviously the wealthy should pay more, but the game will never end. If they ever do end up paying more taxes some day, the fight to lower them again will continue. Up, down, more, less, up, down, left, right, it'll just go on and on.

[Tyler Durden]

14. Oh you have to do more than MENTION it.

Heard a couple of folks compare the life choices of doctors to the life choices of a worker at McDonalds, as if everything was EQUAL and if every single poor person applied themselves then we'd all be doctors and rich.

Such horse hockey makes me nauseous.

[rfranklin]

16. And what about those born rich? Is that a life choice?

I think maybe not.

[Tyler Durden]

19. Exactly my point.

Starting to believe (as that old robber baron Carnegie did later in life) that inherited wealth is a form of evil.

But then I AM a socialist.

[The2ndWheel]

20. I had these big clown shoes ready and everything

I agree, the world we're born into is no longer ours to walk in. It's already been molded for us, and those who control the object which itself has no value get to determine who fits in where. Most of us see the world through their eyes, and so most of us are at their mercy.

[Tyler Durden]

22. Bastille Day is coming....

Read your history, it always does, eventually.

Seems the rich forget how to READ or something. One would think "enlightened self-interest" would keep them from exploiting the rest of us like we were less than cattle.

[donco6]

26. I saw that, too.

All I could think was :puke:

[trotsky]

13. You don't even have to go down to the level of police or water.

What makes people wealthy? Well, it's the value of their assets. A "duh" answer if there ever was one.

But why do their assets have value?

If it's cash, well that's controlled by the government.
Stocks? The gov't, via the SEC, helps ensure those are actually worth something.
Property? Without laws and a legal system, who's to stop someone from a bigger gun from just claiming your property?

All their assets have value only because government or its associated powers exist.

[Solo_in_MD]

17. Bad Choice of examples, property tax is an example of a flat tax that works.

Your argument has nothing to do with income, just property taxes. Gated communitys pay entirely for their on roads and the developer paid for the infrastrucutre that bring the services in. And since property tax is based on value, those who own those homes and live in those areas are already paying more. Property taxes are flat rate.

[Tyler Durden]

21. AGAIN exactly my point is made.

Their property taxes in no way cover their services they receive from the Government. If you figure in all of those renters and city dwellers that own ZERO property, then the rich are getting an all time BARGAIN for what they pay.

[Solo_in_MD]

23. Not at all...

Property taxes have to cover local services since it is the primary source of income for local governments (at least where I have lived). Also upkeep of the private roads and security are paid for by HOA levies in addition to taxes.

You have an argument to make for a restructuring of taxes, but your choice of examples is counter productive to your goal. Take it out of a local context to State or Federal level and you will have more to work with.

[Matsubara]

24. Flat Tax = Giveaway to the Rich

No matter how you slice it.

[depakid]

29. Once again, people need to look at BASIC economics

Namely, the concept of diminishing marginal utility.

Failure to grasp that fundamental principle is the major reason why people get seduced by flat tax arguments.

The law of diminishing marginal utility refers to the marginal utility of each additional unit of a good (money is a good for this purpose) having less value than the previous unit. For example, the marginal utility of an additional slice of bread to a person with few slices will be great. But the marginal utility of an extra slice of bread to a person with many slices will be small.

A person with a $1,000,000 values each dollar far less than a person with a $1,000, and so on. Therefore, a tax of say, 60% on ever dollar over %1,000,000 is "worth" about the same as, say a tax of 10% on 1,000.

That's one reason why FAIR taxes are progressive and flat taxes (think sales taxes) are regressive, even if the person buying the more expensive goods pays "more" in terms of raw dollars.

[eridani]

30. Bingo

The "Unfair Tax" would BIG TIME screw the urban poor, while the poor in rural areas will get a slight boost. The transfers are based on a totally bogus calculation of poverty level, to wit, a calculation of a minimal food basket multiplied times three. What kind of idiot do you have to be to not know that rent and utilities are the real budget busters for the poor (and everyone else, for that matter)?

[greiner3]

32. TAX CHURCHES!

[Just-plain-Kathy]

40. Amen.

[tritsofme]

43. Yeah that's the ticket!

And tax all other non-profits like charities and such, that'll show 'em!

[133724]

33. Those who benefit the most should pay the most....

In short; those who receive the most benefits from society's infrastructure should pay the most for those benefits,

this concept goes back to the ancient greeks...

[krispos42]

35. Flat tax

50% on everything between 50 and 150 grand, 75% 150-300 grand, 90% over 300 grand.

A few deductions for kids and some misc. stuff, and you're done. Maybe throw in a marriage status thingy or sumptin, but you get the basic idea.

If you make $200,000 a year, you would pay $87,500 in taxes, leaving a paltry $112,500 a year to have fun with.

Lesson: stop the relentless pursuit of money. It's not good for the country.

[Jeff In Milwaukee]

37. Not a flat tax, by definition

Let's be clear with our terms here. A flat tax is a unitary tax rate applied to all taxpayers -- very much like the sales tax you pay at the mall. When you start applying higher rates to higher incomes, you're talking about progressive taxation.

My Take: We could have a flat tax that is reasonably fair ONLY IF it was levied on all types of income (interest and capital gains) and all types of taxpayers (individuals and corporations) and it replaced the taxes on income, social security and medicare with a single tax payment (and thus eliminated the income caps on Social Security).

I'm not saying I'd favor it, but I'd at least be willing to entertain the idea. The problem with most flat tax schemes is that they want the tax on individual income from wages ONLY. No tax on corporations and no tax on unearned income. These are flat non-starters as far as I'm concerned.

[krispos42]

45. So then we'd need something like like...

50% after 75,000 or something like that, for all people.

It really pissed me off when I learned that income from bonds and stocks is only taxed at 15% because I realized that all those wonderful bonds that the federal, state, and local governments were issuing to raise money (because we won't tax the rich) were being mostly bought BY the same rich people that were only paying that low tax rate on the interest monenies they recieved. BECASUSE they voted Republican and kept themselves from being taxed!

[Jeff In Milwaukee]

46. Most estimates I've seen...

show that under the conservative definition of "taxable income" which excludes everything but hourly wages, the tax rate would have to be about 25% to avoid deficits. If you're wealthy, you're already paying that much anyway, except that under the flat tax, you wouldn't be paying any tax at all on capital gains. It's basically a tax cut for the wealthy, paid for by a massive tax increase on the middle class.

As a partisan Democrat, sometimes I almost wish the conservatives would get their way. Because on the first April 15th after the flat tax is enacted, when the people realize just how badly they'd been hosed, it would probably spell the end of the Republican Party in America.

[FredMertz]

36. How about a maximum wage?

Let's tax all income above $1,000,000 a year at 95% and make people pay social security tax on all their income (not just the first $90,000). Who's family couldn't get by on a measly 900K per year?

-edited for spelling

[chaska]

42. So are you for it or against? I know rich people who are massive tax cheats....

A progressive flat tax *could* fix that.

I'm not advocating for it, just playing devil's advocate.


Edited to add the word 'progressive'. It's very important that it should be progressive.

[hughee99]

44. I agree with you, but I'm not sure about your examples...

The "Flat Tax" is a federal income tax plan, but the Police, Highway, and Water departments are paid for with local taxes. Even if a flat tax were adopted as a national plan, localities like Grosse Point would still continue to charge higher property taxes to pay for more police, better streets and water service. A federal flat tax has no effect on these things.

[bobbolink]

47. "The rich SHOULD pay higher taxes"

But, but but.... so many people think that their ship is gonna come in any day now, and *they'll* be rich!!!

Besides, who gives a shit about poor folk, anyway? That's sooo 70's!

[DFW]

48. I'd probably do better with a flat tax

Say 30% of everything above $35,000 or whatever the poverty level is,
(and no one pays tax below that), but I'm for a progressive tax, because
some people who make a lot of money pump money back into economy, and some
people (like me) dump a lot back into charity and non-profits (community
radio stations, cancer research, etc.).

Besides, if you make, say $270,000, pay out $110,000 in taxes, have two kids in
college int the States and did not request financial aid (and how are you gonna
do that with a straight face if you gross $270K?), pay all the other taxes and
donate to charity, you could be looking at a net of $2500 a month left over for
food, gas and rent. That's a lot to some, but no life of luxury, especially if
you're paid in dollars, but have to support a family in Euros.

I find there's nothing particularly noble about wealth or poverty (unless you're
Gandhi or a Buddhist monk), but I don't see taxing a $10 million income at the same
rate as a $75,000 income.

Also, being stationed as long as I have in Europe, it's clear that any tax of over 50%
comes across as confiscatory, and will be avoided somehow by anyone subject to it. If
a state can't get by without taking more than 50% of ANYONE's income, then it needs to
readjust its finances. If there is no incentive to trying to earn money, then no one will
do it, at least not honestly. I see my 36% tax rate as a reasonable price to pay for
public schools, cops on the beat, roads to be built, sewers to be upkept, a federal
government to conduct the affairs of state, and as basic insurance that people are not
driven into such poverty that they will want to take what I have by force because they
have nothing left to lose (i.e. a reasonable welfare safety net).

I have also seen from Europe that a Value Added Tax (consumption tax) is NOT a good
idea, and just becomes a game of hide and seek between the people and the corporations
on one side and the government on the other. The governments treat it like a heroin
addict treats his addiction, taking ever more just to maintain the same level of
comfort. Better not to get started at all with that one, not to mention the fact that
it is like a mandatory flat tax that hurts the poor way more than it hurts the rich.

Of course, if you're looking at this from someone stateside who earns $20K and lives
in an area where the cost of living is high, things could look very different. Mine is
just one take on things. Someone who earns $10 million and can pay some fancy accountant
$20,000 to make 90% of his income invisible sees it differently, too, no doubt.