Is a fair flat tax possible?

[ydoaPs]

The problem with a flat tax is that it disproportionately burdens the poor due to the fact that the cost of basic needs does not go up with your income. Could an overhaul of the tax system fix that?

 

What if by filing your taxes, you not only provide information for correcting last year's taxes, but also provide information to inform the next year's taxes?

 

Could gathering information like city of residence and number of children then using that information to calculate the actual needs of the household reduce the burden on the poor while maintaining a flat tax. If we take that amount of basic needed to live and make it non-taxable income then tax the rest, would that allow us to have a higher flat tax percentage with the majority of the people actually paying less in taxes?

 

Obviously data gathered by filing taxes would be used for corrections(like having a baby, paying for a funeral, moving, etc).

[John Cuthber]

Don't you have a taxable allowance system?

Anyway, it looks a bit communist to me- too much like a planned political economy.

[ydoaPs]

Anyway, it looks a bit communist to me- too much like a planned political economy.

Could you elaborate?

[Mr Skeptic]

It is close to something I suggested too. My suggestion is that the tax could be:

(Income - Deductions)*(Flat Tax Rate)

 

And if your deductions are more than your income then the tax is negative, so you get money. And for every dollar you earn, you always get (1 - Flat Tax Rate) extra dollars, no matter how rich or poor you are. However this will in no way guarantee that people would have the amount of money suggested that they should have by the deductions, but to prevent poverty it would work so long as (Deductions)*(Flat Tax Rate) > (Poverty Income Level). The income for the government would be (Gov. Income) = [(Average Income) - (Average Deduction)]*(Flat Tax Rate).

 

 

In my opinion however, the fairest tax system is a progressive tax system. Consider the sayings, "It takes money to make money" and "The rich get richer and the poor get poorer". Consider this thought experiment: Bob inherits 1 billion dollars from his dad. Bob is totally lazy, but isn't extravagant. Bob's friend Alex knows all about investment, so that Alex can invest money and get a return significantly larger than inflation, and given enough money can distribute the risk so that it is statistically insignificant. So Bob hires Alex to invest his money, with the understanding that Alex gets a percentage of the money earned over and above inflation, and Bob gets the rest. Since Bob is not extravagant, he doesn't spend more than he "earns" via this process. This means that Bob gets risk-free income by doing nothing more than having money and hiring someone to invest his money. Furthermore, Bob's amount of money and therefore his income increases, so that he can live his whole life without lifting a finger and end up richer for it. When Bob dies he leaves even more money than he started with to his son, and the cycle continues.

 

Now the above thought experiment is an exaggeration, but not so much that it would be implausible. But even when things are not taken to the extreme, people certainly do benefit economically from having more money, in various different ways from being able to buy things with huge down payments instead of payment plan, being able to start their own (not so small) business, investments, etc. -- benefits they gain simply from having money rather than from who they are as a person. Is this fair? I think not. And the only way to fix this would be to have a wealth tax, though a progressive income tax would more or less work and be easier to implement.

 

Thus, to be fair by this measure, the tax rate has to be progressive and this must be exactly by how much easier it is to earn/save money when you have more money. Any more progressive and it is unfair to the rich, and any less progressive and it is unfair to the poor.

[john5746]

I agree with Skeptic. If we measure wealth as a pyramid, with survival on the bottom and luxury towards the top, we will see that taxing a penny above the survival line at the same rate as a penny at the very top will burden the poor person much more. I would think that we would want to have more incentive for people in poverty to work and improve their station in life than for the very wealthy to make that extra stock profit.

 

Also, one aspect of the flat tax is to make it simple, so trying to collect all that data and then manipulating will remove that as a plus. Maybe we should make a simple flat tax for everyone making above 1 million. No loopholes, deductions, etc. Just a simple flat tax that even they can do with their limited time. See how it goes for them.

[ydoaPs]

In my opinion however, the fairest tax system is a progressive tax system.

But that's redistribution of wealth, you commie socialist fascist anti-American traitor! I like a system like this, because they can't claim redistribution of wealth or whatever. Everyone is taxed the same; it's just that the only thing that is taxed is the surplus.

[A Tripolation]

I don't understand the difference between your's and Skeptic's plans. Could someone explain it to me?

[ydoaPs]

We might need to cover what these basic needs are. I think that the obvious ones are average rent for minimally sufficient(sufficient based on number and age of children) housing in the area, the cost of public school(based on number and age of children) including the cost of school lunches, heat, enough power to cover lights in the evening for a minimally sufficient house(assumes the existence of windows add half the same amount for daytime lights given a large enough family), and the cost of enough inexpensive food for the household. These would, imo, be the bulk of the pre-tax deductions. I do think that the cost of health insurance(if the people have it) should be in there as well, but some people don't think healthcare is a basic need.

 

After these deductions are taken from the income, the remaining income is taxed.

 

So, anyone beside Mr Skeptic and the Johns want to weigh on whether or not this type of plan for a flat tax that does not make the rich richer and the poor poorer would work?

 

Since basic needs take up a considerable portion of the income of a considerable portion of the population, would we not be able to increase the total tax percent and still have the effect of tax cuts for the majority of the people?

 

I don't understand the difference between your's and Skeptic's plans. Could someone explain it to me?

MrSkeptic's version has a sort of built-in welfare system explicated whereas mine does not.

Edited February 8, 2011 by ydoaPs

[lemur]

Progressive taxation is based on the idea that it is good for the economy to maximize productivity relative to the maximum level consumption possible. In this sense, you have to view all the money taxed and spent as essentially extra spending of those that are taxed, which then is used to benefit (supposedly at least) everyone equally. The pre-Keynesian social-economic "agreement" between the classes, at least as Keynes himself wrote, was that the wealthy would conserve their wealth by consuming very little and the poor accepted this as legitimation of class-differences, because the wealthy were assumed to be saving for the public good (i.e. they would never spend it on indulging themselves). To have this kind of economy, a flat tax would work because the government would be limited to what everyone could afford together equally. I would be like having a party with rich and poor people and since the only thing everyone could afford together by equal contributions would be, say, potato salad, everyone would contribute to the potato salad and eat it - only the rich would save a lot more money by doing so. I could accept a flat tax because I like the idea of wealthy and middle class people adopting more meager spending habits and lifestyles. However, since this is unlikely to occur with the modern triumph of consumerist lust, the best tax-scheme would be a progressive sales tax. That way, those who chose to live meager lifestyles and save money could do so whereas those who chose to live extravagantly would pay for the reverberations of their choices. You could see it as consumption impact fees.

[Pangloss]

The problem with a flat tax is that it disproportionately burdens the poor due to the fact that the cost of basic needs does not go up with your income. Could an overhaul of the tax system fix that?

 

Fulfilling "basic needs" is not a hardship for the average American living under the poverty line. They have a VCR, DVD, flat-screen TV, two cars, a mortgaged roof over their heads, and so on and so on and so on.

 

If we actually knew how many people in this country actually did live below a line that could reasonable by called "poverty" then we might be able to address that situation fairly in the tax system. But instead we find it more important to inflate the number for political reasons.

 

Fine. But the cost of that is that we don't know that a flat tax would be unfair to lower income earners.

 

 

It is close to something I suggested too. My suggestion is that the tax could be:

(Income - Deductions)*(Flat Tax Rate)

 

I agree, and I would enact laws limiting deductions to only those passed by majority vote on solo bills without ANY amendments.

[ydoaPs]

Fulfilling "basic needs" is not a hardship for the average American living under the poverty line. They have a VCR, DVD, flat-screen TV, two cars, a mortgaged roof over their heads, and so on and so on and so on.

 

If we actually knew how many people in this country actually did live below a line that could reasonable by called "poverty" then we might be able to address that situation fairly in the tax system. But instead we find it more important to inflate the number for political reasons.

I know many such people who have none of those things. Where's your evidence that the average person below the poverty line has a flat screen TV and two cars? Edited February 8, 2011 by ydoaPs

[lemur]

I know many such people who have none of those things. Where's your evidence that the average person below the poverty line has a flat screen TV and two cars?

It doesn't really matter. The question is whether someone whose (official) income is below the poverty line can afford such things with their budget. There are a lot of other factors. For one, some people are granted public housing and some have to pay exorbitant rent (more than 1/3 their monthly income). Second, poor people have differing access to social capital. Social capital means people's ability to secure resources through social networks without paying money. "Couch homelessness," for example, is a materially richer form of homelessness, as is living in a tent or a makeshift shelter instead of completely uncovered.

 

The issue really isn't averages. It comes down to the situation of a given individual and the specific barriers that individual faces to achieving improvements that s/he seeks.

[john5746]

So, anyone beside Mr Skeptic and the Johns want to weigh on whether or not this type of plan for a flat tax that does not make the rich richer and the poor poorer would work?

 

Since basic needs take up a considerable portion of the income of a considerable portion of the population, would we not be able to increase the total tax percent and still have the effect of tax cuts for the majority of the people?

 

 

Government is all about redistribution of wealth, in fact, I would argue that a successful society is redistribution of wealth. The rich get their money, not by growing it, but by leveraging society - they have maximized all the benefits of their society.

 

So any flat tax will result in the richer getting richer and the poorer getting poorer - unless there is some major revolt/catastrophe that results in the monopoly board being overturned. Having money that you don't need makes risk taking a game. So on the spare cash continuum, the opportunity costs for the middle class will include college money, improved housing, transportation, etc.

 

We don't need to just be concerned about the floor - it is important that basic needs are met, but also we should realize that the closer we are to that line, the more important it is to save every penny of that dollar, both for the individual and for society. Unless we think it is better for people like Bill Gates to decide where most of the wealth of a society is spent as opposed to government. Sometimes, I'm not sure which is best.

[lemur]

Government is all about redistribution of wealth, in fact, I would argue that a successful society is redistribution of wealth. The rich get their money, not by growing it, but by leveraging society - they have maximized all the benefits of their society.

I used to see things this way, but at some point it occurred to me that if the government helps the rich spending their money on the poor, it's still the rich making money to spend on controlling the people they pay the money to; just government acts a an intermediary and manages the poor in the interest of the rich. This seems like a very pro-capitalist form of government to me. Since I believe in free-capitalism more than control-capitalism, now I think it's better for the poor to be as independent of the rich or anyone else as possible because otherwise they are more subject to control. Have you ever thought about these issues or do you just assume that it's great for everyone to get as much money as they can by any means possible?

 

So any flat tax will result in the richer getting richer and the poorer getting poorer - unless there is some major revolt/catastrophe that results in the monopoly board being overturned. Having money that you don't need makes risk taking a game. So on the spare cash continuum, the opportunity costs for the middle class will include college money, improved housing, transportation, etc.

You don't think progressive taxation also increases the gap between rich and poor (perhaps even more so) because the more economic growth is created, the more the most prosperous will increase their income relative to people less prosperous. I don't think GDP growth usually gets distributed in favor of poor with less money going to the middle class and rich. I.e. GDP growth is not a distributed in a way that equalizes wealth-differences, is it?

 

We don't need to just be concerned about the floor - it is important that basic needs are met, but also we should realize that the closer we are to that line, the more important it is to save every penny of that dollar, both for the individual and for society. Unless we think it is better for people like Bill Gates to decide where most of the wealth of a society is spent as opposed to government. Sometimes, I'm not sure which is best.

I don't know, but I think many of the problems faced by poor and otherwise disenfranchized people are not that expensive to fix. I would say the most significant improvements in low-income lives are achieved by inexpensive, though often labor/discipline intensive efforts. Part of this is addressed by investing in education, but the problem is that education becomes its own fiscal stimulus project where students get more fixated on the relative prosperity of educators than on attaining the means to live well with relatively little, which is how many educators manage to live well in the first place.

 

 

[John Cuthber]

Can I just check on the definition of "fair" please?

For example someone born to poor parents who attends a poor school is unlikely to do as well as someone whose parents can afford a better school.

Is it fair that, no matter how hard he works, he is likely to be disadvantaged?

 

If so, is a progressive tax more likely, or less likely, than a flat tax to address this particular variety of unfairness?

[imatfaal]

A change to large tax-free allowance with a highish flat rate above that allowance from a progressive system tends to benefit the poorest and the richest, but those in the middle ground lose out. As floating voters tend to be those in the middle we tend not to see this pushed by many political parties who actually want to get elected.

[Pangloss]

Where's your evidence that the average person below the poverty line has a flat screen TV and two cars?

 

The U.S. Census Bureau.

 

http://www.scienceforums.net/index.php?showtopic=52710&view=findpost&p=581782

 

According to the Census Bureau:

- 43% of all "poor" households own an average 3-bedroom, 1.5-bath house

- Almost 75% of "poor" households own a car; 31% own 2 or more

- 97% of "poor" households have a color television; over half own 2 or more

- 78% have a VCR or DVD player; 62% have cable or satellite TV

- 89% have a microwave oven; over half have a stereo, more than a third have a dishwasher

- Only 6% of all "poor" households are overcrowded. More than 67% have more than two rooms per person.

- Average child dietary consumption of poor children is on par with children of middle and upper income parents

- 89% of poor families have "enough to eat"; only 2% report "often" not having enough

- 80% of all "poor" households have air conditioning

- The average American "poor" person has greater living space than the average person in Paris, London, Vienna, Athens, and many other European cities. (The average citizen there, not the average "poor" citizen.)

 

http://www.heritage....erty-in-america

 

Wups, guess I'll have to scratch the flat-screen TV. Gee.

[john5746]

I used to see things this way, but at some point it occurred to me that if the government helps the rich spending their money on the poor, it's still the rich making money to spend on controlling the people they pay the money to; just government acts a an intermediary and manages the poor in the interest of the rich. This seems like a very pro-capitalist form of government to me. Since I believe in free-capitalism more than control-capitalism, now I think it's better for the poor to be as independent of the rich or anyone else as possible because otherwise they are more subject to control. Have you ever thought about these issues or do you just assume that it's great for everyone to get as much money as they can by any means possible?

 

fap fap fap... think? why would... fap fap fap I think? fap fap fap.

 

I'm not advocating more welfare here. Two sides of the coin - spending and revenue. I am only talking about the revenue side.

 

I also want people to be self sufficient and strive to improve themselves. I think a progressive tax is the best method. Tell a guy making $20,000/year that half of every dollar he earns more than that by digging ditches will be taken. He might decide not to dig any more ditches above the minimum. Tell a guy making a million that any dollar over that will be taxed at 50%. Does he still want to make the money? probably, because it isn't that hard for him to make the extra $.

 

You don't think progressive taxation also increases the gap between rich and poor (perhaps even more so) because the more economic growth is created, the more the most prosperous will increase their income relative to people less prosperous. I don't think GDP growth usually gets distributed in favor of poor with less money going to the middle class and rich. I.e. GDP growth is not a distributed in a way that equalizes wealth-differences, is it?

 

Actually, one of the arguments against progressive tax is that it might slow growth. Taking money from the wealthy that they might have invested into a company or buying a nice boat and spending it on a road or a teacher might not be pro-growth. If it does increase growth, though, at least more revenue is coming from the wealthy. But, if growth is slowed, that isn't bad either - we are running a marathon, not a sprint.

[Pangloss]

"Couch homelessness," for example, is a materially richer form of homelessness, as is living in a tent or a makeshift shelter instead of completely uncovered.

 

Interesting term. Here are some other categories that no doubt exist:

 

"Playstation Poor"

"HDTV Healthcareless"

"Xbox Unemployed"

"BMW-leasing 99ers"

"iPad Homeless"

[zapatos]

But even when things are not taken to the extreme, people certainly do benefit economically from having more money, in various different ways from being able to buy things with huge down payments instead of payment plan, being able to start their own (not so small) business, investments, etc. -- benefits they gain simply from having money rather than from who they are as a person. Is this fair? I think not. And the only way to fix this would be to have a wealth tax, though a progressive income tax would more or less work and be easier to implement.

I don't think fair has anything to do with it.

 

Some people have more money, higher intelligence, better looks, cleaner air, a better view out their front door, nicer friends, etc., and all of the benefits that go along with those. All things are not equal for all people, and I don't think we have to try to even things out. I know I don't want to have to give some of my nicer friends to someone else because I have more of them than they do.

 

Now if you want to take some of my money from me because we need highways, and poor people cannot contirbute, that is fine. But don't take it away from me because you are trying to be fair to others. That is too subjective. Not unless you are going to even out all the other inequalities too.

[lemur]

fap fap fap... think? why would... fap fap fap I think? fap fap fap.

I think you're using insulting language because you are lumping me together with every other person who doesn't give a crap about the poor and wants to let the rich pay less taxes so they can get richer. That's really not who I am, though. I'm a person who deeply believed in the re-distributive logic of progressive taxes and social spending. The only thing that changed my perspective was when I started looking at the consumerism that generates jobs from the spending of employed people. This consumer economy creates dead-end job in retail and other services that people get stuck doing because no government is ever going to create good jobs for everyone. The reason is that jobs are created by what money is spent on. So if you raise the incomes of the middle-class, it creates more jobs but they are crappy, dead-end jobs. Now add that to the fact that the gap between rich and poor GROWS by stimulating consumerist job-creation and you get a really ugly economic system: i.e. one where the rich and middle class expand their own economic power by using redistributive-government to increase spending-dependency of the poor so that they have to accept undesirable jobs that service the indulgences of the middle and upper-classes while not getting any richer by doing it. Dead-end job = your stuck in it; and someone else is profiting off the sacrifice you're making not because of your own interest but because you got lured into by the spoils of consumerism you got a taste of because of the social programs that raised your spending levels above your means.

 

I'm not advocating more welfare here. Two sides of the coin - spending and revenue. I am only talking about the revenue side.

I have no problem with welfare if it was for things that would increase self-sufficiency instead of more consumerism and income-dependency. Draft people to spend a certain amount of their free time helping people build community farms that supplement their diets with fresh vegetables. Provide free basic low-cost ingredients like rice, pasta, oatmeal, etc. and draft people to teach cooking-classes using them. Why can't social services be performed by draft, with little or minimum monetary compensation? Is it really necessary to inject ever more money into circulation? Could people at least be paid in savings bonds instead of disposable income?

 

I also want people to be self sufficient and strive to improve themselves. I think a progressive tax is the best method. Tell a guy making $20,000/year that half of every dollar he earns more than that by digging ditches will be taken. He might decide not to dig any more ditches above the minimum. Tell a guy making a million that any dollar over that will be taxed at 50%. Does he still want to make the money? probably, because it isn't that hard for him to make the extra $.

Yes, but he does it by hiring more people to dig more ditches at minimum wage AND by promoting greater spending of existing incomes, which raises the cost of living and makes the poor poorer relative to the middle-class. Face it, GDP growth INCREASES the gap between rich and poor as the middle class gets more to spend, and the working class and poor get the least share of the growth.

 

Actually, one of the arguments against progressive tax is that it might slow growth. Taking money from the wealthy that they might have invested into a company or buying a nice boat and spending it on a road or a teacher might not be pro-growth. If it does increase growth, though, at least more revenue is coming from the wealthy. But, if growth is slowed, that isn't bad either - we are running a marathon, not a sprint.

That's my whole point that growth should be slowed, or at least not stimulated. Allow the wealthy to keep their wealth IN SAVINGS. Discourage spending by raising sales tax. Then use government to stimulate LABOR practices that are as accessible to the poor as to other classes. Gardening, cooking, and many other basic services can be performed with relatively little skill and minimal tools. The more people can do for themselves, the less they need to cry for constant economic growth to provide them with more income. Ideally, people should be immune from recession. Making money should be a voluntary activity for personal enrichment; it should not be a necessity of basic survival.

 

 

[Marat]

Everyone who works contributes to the net social product of the entire society, and no one can ever trace out all the entanglements, multipliers, discounts, interactions, and cross-currents involved in each person's contribution to determine who has really 'individually' produced what, and so we can never rigorously determine who deserves what in terms of income. The brain surgeon cannot make his $400,000 a year by turning up at the hospital to operate if the $20,000-a-year floor cleaner has not been though the hospital first to ensure that it is adequately clean. So since neither person would have a job or a salary without the other, how can we draw a clear line between what each person 'deserves'?

 

Is desert based on effort, for if it is, probably ditch diggers should be the highest paid people in society. Is it based on the dangers faced in the working environment, for if it is, then coal miners might have a good claim to be the highest paid people. If it is based on the endurance of disgusting conditions, then perhaps toilet cleaners deserve the highest salaries. If it is based on years of education required, then archeologists who have to learn Ancient Greek, Latin, Hebrew, Hieroglyphics, plus several other obscure semitic languages deserve the highest pay, though in fact among academics they are quite poorly paid. So we can see that all these measures of 'desert' are arbitrary, and how they should be weighted and combined in some calculus of what each worker would ideally merit as a salary can never be clearly settled.

 

So from the inextricably composite nature of the social product (Bill Gates would have been poor if he had lived alone without the whole matrix of social cooperation around him) and from the arbitrary nature of any measure of individual desert for one level of salary or another, we can see that any distribution of wealth is artificial, and no distribution can claim to be fair.

 

So since our society recognizes human equality as a high moral value, and sets a high moral value on social solidarity, respect for other persons' needs, humanity, mercy, and friendship, there is a strong argument for saying that since the present wealth distribution has no rigorous claim to be just, we should revise it by having a redistributive tax policy which represents the force of our moral commitment to human equality and evens out the wealth between the rich and the poor.

[D H]

The problem with a flat tax is that it disproportionately burdens the poor due to the fact that the cost of basic needs does not go up with your income.

The problem with a flat tax is that it disproportionately burdens the middle class, not the poor. This is why a flat tax is an insane idea. If Congress did put this through, the political makeup of the next Congress would be, oh, a bit different than the Congress that created the flat tax. The tax structure would be restored to being progressive, with a vengeance.

 

But that's redistribution of wealth, you commie socialist fascist anti-American traitor! I like a system like this, because they can't claim redistribution of wealth or whatever. Everyone is taxed the same; it's just that the only thing that is taxed is the surplus.

The redistribution of wealth boat started sailing before the American Revolution with public schools, toll-free roads, etc. The sails were changed to modern diesel engines in the 1930s and then to nuclear powered engines in the 1960s.

 

 

Can I just check on the definition of "fair" please?

To the fairness crowd, "fair" apparently means paying less in taxes but not losing any benefits. Or perhaps it means that suckering the middle class into paying more taxes and getting less in benefits is "fair" because "all's fair in love and war".

 

 

I would really like to see a study of benefits received less taxes paid as a function of income (and as a function of wealth). Being a nerdy scientist/engineer, I would like to see

 

[math]f(\mbox{income}) = \frac{\mbox{benefits received} - \mbox{taxes paid}}{\mbox{income}}[/math]

 

with a full characterization of "benefits received".

 

My thoughts:

 

This function ideally should be positive for almost everyone, and much higher than nominal for the poor. We have governments because they are (or should be) a net benefit for almost everyone. The poor need some help, and they are getting some.

 

This function in reality follows a bathtub curve (it curves upward at both ends). Both the rich and poor benefit from government out of proportion to income, to the detriment of the middle class. A fair tax would turn this bathtub into a steep-walled jacuzzi.

[ParanoiA]

We might need to cover what these basic needs are. I think that the obvious ones are average rent for minimally sufficient(sufficient based on number and age of children) housing in the area, the cost of public school(based on number and age of children) including the cost of school lunches, heat, enough power to cover lights in the evening for a minimally sufficient house(assumes the existence of windows add half the same amount for daytime lights given a large enough family), and the cost of enough inexpensive food for the household. These would, imo, be the bulk of the pre-tax deductions. I do think that the cost of health insurance(if the people have it) should be in there as well, but some people don't think healthcare is a basic need.

 

It doesn't really matter. The question is whether someone whose (official) income is below the poverty line can afford such things with their budget. There are a lot of other factors. For one, some people are granted public housing and some have to pay exorbitant rent (more than 1/3 their monthly income). Second, poor people have differing access to social capital. Social capital means people's ability to secure resources through social networks without paying money. "Couch homelessness," for example, is a materially richer form of homelessness, as is living in a tent or a makeshift shelter instead of completely uncovered.

 

Fulfilling "basic needs" is not a hardship for the average American living under the poverty line. They have a VCR, DVD, flat-screen TV, two cars, a mortgaged roof over their heads, and so on and so on and so on.

 

If we actually knew how many people in this country actually did live below a line that could reasonable by called "poverty" then we might be able to address that situation fairly in the tax system. But instead we find it more important to inflate the number for political reasons.

 

Those quotes are just a sampling of the range of subjectivity concerning poverty. This is why I like a consumption tax system better, because you can neutralize, by exemptions, the goods and services deemed “basic need” for everyone, not just the poor (though the poor will receive the most advantage since, presumably more of their income goes to “basic need”).

 

So why not a flat sales tax? Eliminate all other federal taxes. Exemptions could be food and water, clothing, shelter and healthcare (threw that last one in there last minute). The basic necessities could be tax free for all of us, and we’ll just pay taxes when we can afford to look beyond basic survival.

 

As a former poor person, I have to speak for my people and inform you that what the working poor really want is for you to leave them alone and stop complicating their lives with residual taxes and fees coming from every direction they aren’t looking. They want common freakin’ sense. They want you to stop taking their money paycheck after paycheck, just to hand large clumps of it back to them at the end of the year….after the defaults and interest accruals. They really get pissed when they work a couple double shifts and start planning to buy something for themselves with the extra money – a rare event for the poor – and then get ripped at a higher withholding rate and lose most of it. When that happens to me now, I just say a cuss word and kick my dog. But when that happens to the poor it can set them back, mentally, and it’s hard to recover and resume the grind while enjoying life at all.

 

This tax plan also eliminates the need for so much sensitive and private information, problematic flow charts of income analysis; marginalizing each citizen to data in a spreadsheet - not to mention the possible efficiency savings of a one direction revenue stream. This business of giving it up each paycheck and then getting some back has got to stop...

 

Anyway, I like a flat tax, only I like a flat sales tax. And look at it this way, with a flat rate even the Tea Party will know if Obama lowered taxes or not.

[D H]

Everyone is taxed less, but the effect diminishes as income increases; that means everyone's surplus is taxed the same, but it results in help for those who need it. The obscenely rich aren't really affected by the change at all, but they don't need any extra help; the upper class are helped a little; the middle class more; and those below the poverty line most.

That "everyone is taxed less" is the lie that belies the flat tax. To keep the receipts to the government the same the taxes on the middle class go up, and go up by a huge amount. Why not just fix the existing system, and what is so wrong with a progressive system?