Is a fair flat tax possible?

[ydoaPs]

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?

The math I just did shows that the middle class benefits almost as much as those at the poverty line. Or am I missing something?

 

A progressive system is an evil socialist communist stalinist plot hatched by Satan himself.....or something like that.

Edited February 8, 2011 by ydoaPs

[lemur]

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.

I understand that the floor has to be clean for the surgeon to perform surgery. What I don't understand is why these salaries have grown so much to promote high levels of consumption among such a large number of people that the resulting consumerism creates a standard of living that requires a great deal more labor hours that would be needed in a relatively simple economy where most labor is devoted to providing basic necessities like food, water, shelter, and clothing. For this reason, I don't see why people shouldn't have the choice to contribute only to a level of consumption that they find necessary, instead of to a level that is only normalized because so many people get caught up in the belief that it's better to live that way. So if the high-consumption economy is too unsustainable to survive without government intervention, why should government force people to contribute to it? If government wants everyone to contribute to an economy that generates a certain standard of living for everyone, then they should also have a say in what is produced AND people shouldn't have to economically contribute to particular forms of consumption if they have no interest in those. E.g. if I only eat fast food once every month or two and I'm fine to make my own lunch the rest of the time, why should I have to contribute to an economy of people who feel the need to go out to eat for breakfast, lunch, and dinner all the time? That costs a lot more money (and ultimately labor and other resources) that I personally wouldn't want to get stuck providing. So when the government is redistributing taxes to create jobs that pay a salary sufficient to keep loads of fast food restaurants and other consumption venues that not everyone uses operating, that ends up producing jobs that not everyone wants and it is not fair to people who are for economic reform and sustainability. I personally work with people who are trying to get better jobs than fast-food and having to go back to fast-food is their nightmare, but I have to tell them that as long as people have the income and desire to go out to lunch everyday, a LOT of people have to work in fast-food. So I don't think the government should be stimulating an economy that generates such high levels of income. Instead it should produce meager income for efficient methods of producing basic necessities and let people have some of their time back to make their own lunch so not as many people have to work in drive-thru's and other dead-end service jobs.

[D H]

The math I just did shows that the middle class benefits almost as much as those at the poverty line. Or am I missing something?

 

What you missed is the "everyone pays less" line, which how the flat tax is rigged by its proponents to make it look attractive. In a truly revenue-neutral flat tax everyone does not pay less. The rich pay less, by quite a bit. Almost everyone else who pays taxes now will pay more under a revenue-neutral flat tax.

 

Most flax tax proposals are anything but revenue neutral, even the ones that claim they are (which they are not). How is this any different from a congresscritter who tells its constituents that, thanks to the hard work of their representative, the district is receiving more in government spending than it pays in in the form of taxes? This wasn't the hard work of their representative. Almost every congresscritter can say this. It's not too hard when they don't (or didn't) care whether the budget was in line with receipts.

 

What is so wrong with a progressive tax system?

Edited February 9, 2011 by D H

[ydoaPs]

What you missed is the "everyone pays less" line, which how the flat tax is rigged by its proponents to make it look attractive. In a truly revenue-neutral flat tax everyone does not pay less. The rich pay less, by quite a bit. Almost everyone else who pays taxes now will pay more under a revenue-neutral flat tax.

I wasn't talking about a traditional flat tax. I was talking about a flat tax on surplus alone.

 

What is so wrong with a progressive tax system?

It was invented by the devil. And it's socialism and communism and stalinism and nazism.

[D H]

I wasn't talking about a traditional flat tax. I was talking about a flat tax on surplus alone.

What does that mean?

 

What is so wrong with a progressive tax system?

It was invented by the devil.

All taxes are evil. It is legalized armed robbery. Think of it this way: Should you evade paying your taxes and should the IRS find out, they will come after you. With guns.

 

Taxes are also very essential. Without government we would still be living in a world of stone knives and bearskins. However, because taxes are inherently evil, talking about "fairness" is a bit silly. To me, a better metric is to spread the inherent unfairness of taxation as evenly as possible. Minimize the pain. A regressive tax does exactly that.

 

 

And it's socialism and communism and stalinism and nazism.

Oh please. It's none of the above.

 

This is a scientific forum. Certainly you can do better than that.

[ydoaPs]

What does that mean?

 

Tax withheld=(Income-cost of basic needs)(flat tax rate)

 

 

I thought that was quite clear, but I'm often wrong about what I think is clear.

 

It is legalized armed robbery.

I thought it was payment for goods and services provided by the government.

[D H]

Tax withheld=(Income-cost of basic needs)(flat tax rate)

 

 

I thought that was quite clear, but I'm often wrong about what I think is clear.

How, exactly, is that any different from any other so-called "fair" tax, and how, exactly, does that equate to "everyone pays less"?

 

If "everyone pays less" the tax system is not revenue neutral. If "everyone pays less" the government receives less. If everyone pays the same, why change? Any revenue-neutral change to the tax system means some people will be winners, others losers.

 

Your proposal is simple. However, just because its simple does not mean it is fair. It just means that it is simple.

 

 

 

It is legalized armed robbery.

I thought it was payment for goods and services provided by the government.

If that were the case, shouldn't I be receiving a balance statement from the government saying that my benefits were this and that, and therefore my taxes are such and such? Instead, all I get is a book telling me how to fill out my tax forms based on my income.

 

If taxes were based on goods and services the rich and the poor would pay a whole lot more in taxes than they do.

 

 

 

[ParanoiA]

I thought it was payment for goods and services provided by the government.

 

Yeah, the mafia uses a similar spin only they call it "protection".

 

It's not "payment for goods and services" when it's done with force. It's also the worst goods and services solution I've ever been a part of since my taxes are not the least bit proportional to the "goods and services" I received.

 

The government gets to coin money, make laws, execute them, put people in jail, roll out ponzi schemes for public retirement - these are all reasons why they should not get to do "business", ie...goods and services. In our government design we have quite obvious lines in the sand, like our three branches and the inherent conflict of interest and potential for corruption if we didn't respect the partitions between them. It's no different with the line between private and government.

 

You don't get to make the rules AND play in the game. You don't see football referrees make tackles and run back touchdowns for a reason. I reject any notion of "goods and services" forced on me by men with guns at fluctuating voodoo pricing - all based on what they claim to need, not what I got out of it.

Edited February 9, 2011 by ParanoiA

[D H]

It's also the worst goods and services solution I've ever been a part of since my taxes are not the least bit proportional to the "goods and services" I received.

How do you know this? Have you done a full accounting of the goods and services you receive, including the roads you drive on, the education you have received, the roads others drive on and the education that others have received to make your job possible?

 

I see this lack of accounting to be a huge part of the problem. I would love to see such an accounting.

 

 

 

[ParanoiA]

How do you know this? Have you done a full accounting of the goods and services you receive, including the roads you drive on, the education you have received, the roads others drive on and the education that others have received to make your job possible?

 

I see this lack of accounting to be a huge part of the problem. I would love to see such an accounting.

 

Me too. After all of the tax forms I've filled out, year after year, I've yet to see this accounting. Do you see this accounted in your tax bill? I didn't think so...

 

Like I said, my taxes are not proportional to the goods and services I receive, as I do not see the math on my tax forms that connects the two. I may be receiving way more than I deserve, or I may be receiving way less than I'm paying for, or it may vary from year to year. But it most certainly is not proportional to each other by any consistent pricing scheme - again, an exception to the rules that private business has to follow.

 

I believe that is a shitty way to do business. The worst solution I've seen yet for goods and services. I'm not sure if pricing by race or religion would be worse or better.

 

We need government to fill roles that private enterprise cannot and should not. Like protecting the citizenry. Private business doesn't get to police us and put us in jail with their own court system. Likewise, government should not get to play "business" and pretend to "compete" giving goods and services. Please. It's almost like we don't know that government power is corrupt as hell.

 

 

Taxes are also very essential. Without government we would still be living in a world of stone knives and bearskins. However, because taxes are inherently evil, talking about "fairness" is a bit silly. To me, a better metric is to spread the inherent unfairness of taxation as evenly as possible. Minimize the pain. A regressive tax does exactly that.

 

Semantics. It's still the same thing. You're applying the word "evenly" in place of "fairness" when they're both equally subjective terms that attempt the same end. Unless you're advocating a flat tax per capita then you're making exceptions to execute some form of "fairness" or "evenness".

 

Even basing it on a percentage of income alone, even at a flat rate, is still making an exception to "equal burden".

 

I don't deny the subjectivity of this exercise. What I deny is legally defining what makes someone "impoverished" and more of this cultural based judgment of such things. The standard of living here, in the US anyway, is phenomenal here for poor people. It requires the co-existence of affluence and economic ascension in comparison to create pity for the poor here in America.

 

If you exempt basic needs goods and services from all taxation, instead, then you still help the poor and avoid defining people with TV's, a house and an old cluncker as impoverished. I had all of those things, poor as we were and I made 9 bucks an hour at a door shop. Two kids and a wife on that salary. Do the math. It aint' easy. But it ain't third world either buddy. We ate fine, we drove everywhere, we enjoyed heat in the winter, cold in the summer, and we juggled which bills would get paid and which would kiss our ass, every paycheck. That's not impoverished. That's the working poor. I brought home about 1200 or less per month.

 

The truly impoverished don't need to be compared to a convoluted flow chart invented by geeks and government blowhards to figure out if they're actually starving and suffering, or if all of their stuff is totally crappy and not brand new and shiny like those folks on the "nice" part of town. They need a simplified tax code that doesn't take precious funds out of their weekly paycheck so they can pay for their basic necessities. Redirecting the working poor to welfare offices and other government buildings to get "help" is exactly what they do NOT want and is incredibly wasteful - and I won't even start in on the psychological consequences of taking a proud man/woman and making them a dependent.

Edited February 9, 2011 by ParanoiA

[john5746]

I see this lack of accounting to be a huge part of the problem. I would love to see such an accounting.

 

yep, I agree. I wonder if it could be a little more like insurance - if you live in a certain place and have so much assets, you are likely to have more claims(use more resources), etc.

[ydoaPs]

The worst solution I've seen yet for goods and services.

Have fun paying the actual price for the government goods. Yay for all roads being toll roads!

[ParanoiA]

Have fun paying the actual price for the government goods. Yay for all roads being toll roads!

 

I see you're conflating the difference between my rejecting your characterization of government merely charging for goods and services with rejecting government goods and services. I'm not interested in toll roads. Not sure what you read that made you think so.

 

Just because I reject your market model interpretation that ignores government's execution of business-by-force, doesn't mean I don't agree with tax collection for business-by-force. I simply don't agree with pretending like it's a free trade exercise - it's not, it's confiscation of personal property. That doesn't mean it's auto-magically wrong and evil. It also doesn't mean it's a wonderful human invention of pure benevolent devices.

 

Enough with the swinging pendulums already. Government is an institution of force. That's what it is. Like Tigers, just respect what it is. Tigers aren't evil, but they'll probably damage your kids if you let them play together. Government is fine, as long as you respect what it is and don't import notions that don't reconcile with what it is.

 

Government has little interest in usage sensitive pricing, particularly the federal government, and that's why we are taxed based on our income levels. I'm ok with that. I'm *not* ok with then calling that fair payment for goods and services since the payment is not based on the goods and services I've used. I've made that point more than once now. And never, not even once have I stated I reject the concept of government operations.

Edited February 9, 2011 by ParanoiA

[imatfaal]

Paranoia - but we are the government, we exist as members of the state, our human identity is as part of the polis; to differentiate between the people and the government is make-believe. When a system of governance loses the support of the people it changes; sometimes slowly, sometimes rapidly, but it always changes. There is no 'us' and 'them'! You can set a "federal government" up as some sort of folk devil whom we can all hate and talk against, but at the end of the day we exist within the state, we are the state, the state is us.

[ParanoiA]

Paranoia - but we are the government, we exist as members of the state, our human identity is as part of the polis; to differentiate between the people and the government is make-believe. When a system of governance loses the support of the people it changes; sometimes slowly, sometimes rapidly, but it always changes. There is no 'us' and 'them'! You can set a "federal government" up as some sort of folk devil whom we can all hate and talk against, but at the end of the day we exist within the state, we are the state, the state is us.

 

It is not make believe unless you'd like to start mailing me your income tax payments. How about your local grocery store throw you in their jail in the back of the store and let's hear you lecture us on how this is all make believe?

 

Yes, we are the government, and that is a philosophical concept. We are as divided in respresentation in government as we are outside of it. At times, our government agents truly represent us, at times they do not. To pretend that we do *not* allocate power and force to a select few - an incredibly powerful minority - is the make believe here, imatfaal.

 

When we speak against the government in a republic, we are speaking against that institution of force. Perhaps that institution has received mandates by the people, in which case our grievances are with our fellow man, or perhaps that institution has grown to ignore the will of the people, in which case our grievances are with the agents we put in office. Most times, it's a mixture of both.

 

We can despise the federal government and love our fellow man - they are not the same thing, though our countrymen are responsible for it. We can easily despise each other when we are operating as government agents, perceived to be wielding power unfairly.

 

There is us and them, sir. The agents you put in office that you are powerless to remove and those of us who are subject to their power. The government is us, conceptually, to be sure. But in execution, it is a handful of powerful men.

 

You said it's the worst model ever. So, presumably, you'd rather pay the direct cost.

 

Well, to be clear, I said it's the worst solution for payment for goods and services. Economically speaking, it's true. The government method of confiscation without any connection to usage is a horrible model to manage scarcity.

 

The best, in my opinion, is the free market. I love how I get goods and services there. I can always see the value directly. I know why prices are high, or why they're low. I know how much each good and each service specifically impacts me, how much it costs and can manage scarcity far better, far more accurately for my happiness.

 

But I also respect the free market. It's not the solution for national defense. It's not the solution for law and order. The model of proportional confiscation of property to fund the government is necessary, not wonderful. And this why so many of us want government to do as little as possible - to take as little as possible by force, in favor of voluntary trade, mutual respect and free choice - the whole point of a free society.

Edited February 9, 2011 by ParanoiA

[ParanoiA]

The only thing I got out of those statistics is that apparently our average children consume just as many poor children as they do children of middle and upper income parents - perfectly fair if you ask me...

 

 

But seriously, even though no one is listening to me I have to continue to speak for my people. Some of which are very old. Do you feel sorry for the elderly poor too ydoaPs? If so, how about getting our grubby fingers off their fixed income and making them pay taxes for shit they bought decades ago? While this is a state level issue, everyone should fight it. To pay taxes on property you already own, over and over again is reason enough to do what the Egyptians are doing right now.

 

We never, ever, ever get away from a monthly allocation, a yearly obligation to raise funds for the government. An 80 year old couple can own their house out right and yet they still have to pay the government property taxes every year to live there. There is no way to truly PAY OFF your dwelling. Property taxes for my parents is 2500 dollars - that's 200 a month they have to come up with for something they already own. How are people supposed to make a fixed income last when we're nickle and diming them to death?

 

The future is just absolutely depressing. Taxes coming from every direction. No possible way to get imaginative and set yourself up for a low consumption retirement. To hell with that. Working or not, 20 or 90, healthy or about to die, no matter, you'll always have to produce currency on a regular basis.

 

I'll say again. If anyone gives a rat's ass about the working poor, then pay attention how you're screwing them with your tax code.

Edited February 10, 2011 by ParanoiA

[ParanoiA]

This is reminding me of pcollins - I think that's his name. Do I have that right Pangloss? He would "hide" the crux of his points with repeated appeals about how someone was wrong and never give away that precious nugget that made it so.

 

How about cut the shit and share that nugget, ydoaPs? Where is he wrong on his "sweet" math skills? This Sarah Palin method you're using is just as unsuccessful as when she uses it.

Edited February 10, 2011 by ParanoiA

[Pangloss]

Rofl, sure sure, I'm completely wrong.

 

This is reminding me of pcollins - I think that's his name. Do I have that right Pangloss? He would "hide" the crux of his points with repeated appeals about how someone was wrong and never give away that precious nugget that made it so.

Yes, I remember them (plural, multiple accounts iirc).

[swansont]

Me too. After all of the tax forms I've filled out, year after year, I've yet to see this accounting. Do you see this accounted in your tax bill? I didn't think so...

 

Here you go

 

http://www.npr.org/blogs/money/2010/09/30/130249425/thanks-for-paying-taxes-here-s-your-receipt?sc=fb&cc=fp

[ParanoiA]

Here you go

 

http://www.npr.org/blogs/money/2010/09/30/130249425/thanks-for-paying-taxes-here-s-your-receipt?sc=fb&cc=fp

 

Not even close to what we're talking about. D H is the one who brought up usage sensitive accounting. Let's review:

 

Have you done a full accounting of the goods and services you receive, including the roads you drive on, the education you have received, the roads others drive on and the education that others have received to make your job possible?

 

I see this lack of accounting to be a huge part of the problem. I would love to see such an accounting.

 

See? That's what my comment was referring to - that accounting. Not a break down itemization of what tax dollars go to per tax payer, but what each government provided good or service each specific tax payer has precisely used. I didn't drive on all of the federal highways in America. I didn't visit every national park in the country. We all use varying amounts of government goods and services and our individual taxes are *not* linked to our individual usage. (And to do so would be a nightmarish system, honestly. My imagination can't work around it any better than those before me).

 

The closest this model resembles is a command economy - a dismal failure (ie..former soviet union).

 

And just so I don't have to post 5 more times what I didn't say, I'll say again, the only point I was making with this is that it's only better than any alternative we've thought of so far. It's not a wonderful, benevolent system of paying for goods and services when it's done at gunpoint and it doesn't represent individual consumption whatsovever. You have to fool the citizenry and get them to forget about the gun behind your proverbial back to get them to cheer for it. A bang up job, there, for sure...

Edited February 11, 2011 by ParanoiA

[lemur]

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.)

Yet, if you compare the level of debt of these households to others among the global poor, who has more debt to pay off? Technically, debt is less possible for the poor because their credit would be worse, allowing them to borrow less. However, drowning in debt is maybe worse than sustainable poverty where you don't get much but you are able to make due with what you get. Also, these households that have TV, satellite/cable, internet, car(s), gas-money, etc. may be spending a lot on these things but they may at the same time be especially lacking in the ability to live-well without them. If you take a random developing-economy family and provide them with a source of clean water and decent food supply, many would live healthier and happier than a developed-economy poor person receiving the same basic necessities but losing their means of transit and media access/entertainment. So there is clearly some issues of dependency in addition to the problem of material deprivation. Part of it may be social/emotional deprivation that drives media-dependencies in the developed-economies.

[Pangloss]

If you take a random developing-economy family and provide them with a source of clean water and decent food supply, many would live healthier and happier than a developed-economy poor person receiving the same basic necessities

Or would they just go into debt from buying Playstations? Africa would certainly make a lovely new market for SE Asian electronics. The behavior so commonly identified as "American" isn't really a unique brand, it's just human behavior. There's a Starbucks and Kentucky Fried on every corner in NYC, but only every other corner in Cairo. Give 'em a little time and they'll be the same.

[lemur]

Or would they just go into debt from buying Playstations? Africa would certainly make a lovely new market for SE Asian electronics. The behavior so commonly identified as "American" isn't really a unique brand, it's just human behavior. There's a Starbucks and Kentucky Fried on every corner in NYC, but only every other corner in Cairo. Give 'em a little time and they'll be the same.

Good point. I was being romantically idealistic about developing-economy poverty. Maybe what I should have said is simply that meager material consumption combined with no debt might entail a lower level of social-economic stress than more extensive material consumption combined with debt and the pressure to avoid things like foreclosure (mortgage and/or tax), repossession, social-economic stigma, drug and theft related crime, etc. Likewise, the misery of working a dead-end job in fast-food or other undesired service labor is probably worse than making due with less but being relatively economically self-sustaining. E.g. when you listen to middle-class people romanticize about their origins in poverty they always say things like, "when I was a kid we didn't have much but we made due with what we had and there was a lot of love and strong values," etc. So it seems like the key to escaping poverty is to forego most material consumption and develop as much self-sustainment skills as possible; but of course the consumption economy is doing everything possible to seduce people away from that into a life of maximum spending funded by minimum income.

[Pangloss]

Makes sense.

 

There's been a lot of talk lately about how too much money and direct relief has been thrown at Africa over the years and it just ends up making them dependent on aid and even easier to rule by simple authoritarianism. But that doesn't mean they need a Starbucks on every street corner to drag their way out of poverty. They may find a more reasoned and self-sustaining path, bypassing our mistakes, especially if we help, and do so in a sincere manner (as opposed to just seeking franchise licensees).

 

The globalized economy and mediasphere may be annoying, but it should also be better at helping people learn from our mistakes.

[swansont]

Not even close to what we're talking about. D H is the one who brought up usage sensitive accounting. Let's review:

 

 

 

See? That's what my comment was referring to - that accounting. Not a break down itemization of what tax dollars go to per tax payer, but what each government provided good or service each specific tax payer has precisely used. I didn't drive on all of the federal highways in America. I didn't visit every national park in the country. We all use varying amounts of government goods and services and our individual taxes are *not* linked to our individual usage. (And to do so would be a nightmarish system, honestly. My imagination can't work around it any better than those before me).

 

That's not even close to how taxes work. It's a pretty obtuse view of the system, IMO.

 

The average worker pays (your amount scaled by the amount of income) $65 a year for the federal highway system; since money is fungible you can't tell if that went to the highway close to your home, or somewhere far away from home. It doesn't matter. What D H was referring to (AFAICT) was your accounting of the services you used. He asked "Have you done a full accounting of the goods and services you receive" IOW, did you actually think through all of the tax-funded details that you take for granted. e.g. compared to the common tolls we see on other highways, did you use $65 worth of the federal system? There's a local toll road that costs about 30 cents per mile, so you only need 220 miles of highway driving to have gotten your money's worth.

 

Do you have to pay a toll when you leave your county to a place where you don't pay property tax?

 

The closest this model resembles is a command economy - a dismal failure (ie..former soviet union).

 

And just so I don't have to post 5 more times what I didn't say, I'll say again, the only point I was making with this is that it's only better than any alternative we've thought of so far. It's not a wonderful, benevolent system of paying for goods and services when it's done at gunpoint and it doesn't represent individual consumption whatsovever. You have to fool the citizenry and get them to forget about the gun behind your proverbial back to get them to cheer for it. A bang up job, there, for sure...

 

You are, of course, free to move to a place that doesn't collect taxes at the figurative point of a gun.