Taxation

[FlyingCheeseSteak]

I am trying to form an opinion on income taxation so I need your help.
Please answer the following question and explain your reasoning:

"Which do you think is preferable as a best option or as a personal opinion: progressive taxation or flat-rate taxation?"

I shall go first. As I have already stated, I am still forming an opinion. I also do not believe any of the "studies" or reports out there that argue one way or the other as they are too political to be of any use, I think. Naturally, I would prefer zero taxation, but since we do need to be taxed the fair option is the flat-rate, but is this simply a "fair" option only on the surface? A progressive tax will, or may in the ideal situation, create a true fairness on the marginals where it counts. For example: a dollar is worth more to a poor person than to a richer one. So, even though, each person is charged an equal 10% under a flat rate there is still an incongruity between the value of that remaining dollar.

I did not explain that properly, but I am more interested in everyone else's thoughts.

Additionally, how can the government create its own income stream so as to decrease the burden placed on the citizens?

 

[playwithmemonkey]

There is always one rule to taxation.

Less is Better.

 

[shahmask]

if u say so monkey. that's until you want more/wider streets. a better trash system. you want potholes filled or street lights that sync. an ambulance service that doesn't take an hour to come get you when some drunk guy runs into your car. a system that will give you atleast a few benefits if you really get hurt at work. a decent school system. agencies to monitor air/water pollution and enforce rules. police. fire protection.

unfortunately, a progressive tax is the only one that works. someone that has millions of dollars will almost never touch all that money. it is absolutely not necesary for even the most lavish of lifestyles. so, people that make as much as or less than what is necesary to live get little taxed if any. those that make more than that pay more, and that is only on the money in excess of the first bracket. then those that make grosely more than that get taxed more on the money in excess of the first and second brackets.

flat tax sounds beautiful. but it would never work unless everything were on a scale. you can not tax a person makeing $30,000 a year the same percent as someone make $3,000,000 a year. just for arguments sake, 20%. the 30,000 then has 24,000 left. he has to pay $600/month for shelter and lets say another 900/month for true necessities. food, clothing, insurance, grooming needs, utilities(electric, water, gas, waste), and health needs. throw in another 300/month for a car which is a true necessity in most places. and im not talking a brand new car. im talking like a 2003 toyota corola that never dies. but it still needs fuel, insurance, regular maintanance, etc. that leaves $2400 a whole year to pay for that car breaking down. or to go out to eat a few times. to buy lube and condoms, etc.

that 3,000,000 person has 2,400,000 after taxes. then, after all basic necessities, the guy has 2,378,400 left. this guy can pay for basic necesities of 110 ppl and still have another 2400 left. that's after taxes. that's why a progressive tax is needed. to make sure city, country, state, and federal programs can be adequately funded without truly making most of the country not having enough money to live at all.

 

[playwithmemonkey]

People who want to pay little or no taxes are just plain greedy and selfish. Greed is ugly.

I would rather donate my money to more efficient charities, than give it to government, so that it can be put through the bureaucratic wringer. But I guess that makes me selfish and greedy .

 

[playwithmemonkey]

if u say so monkey. that's until you want more/wider streets. a better trash system. you want potholes filled or street lights that sync. an ambulance service that doesn't take an hour to come get you when some drunk guy runs into your car. a system that will give you atleast a few benefits if you really get hurt at work. a decent school system. agencies to monitor air/water pollution and enforce rules. police. fire protection.

The idea is that you lower taxes, so people spend more money and the economy grows. When the economy grows, more jobs are created and more people pay taxes and federal revenues go up and people are alot happier.

 

[sparky95]

I would rather donate my money to more efficient charities, than give it to government, so that it can be put through the bureaucratic wringer. But I guess that makes me selfish and greedy .

Why do you assume charities are more efficient? The larger the charity, the larger the bureaucracy attached!Progressive taxes are my preference.

 

[Kulindahr]

People who want to pay little or no taxes are just plain greedy and selfish. Greed is ugly.

Wrong.
I know lots of people who would love to pay little or no tax(es). They're called the poor. They already can't make ends meet, but the government still wants to take a chunk away.

A flat tax would put a lot of people I know onto the streets -- they have very good reason for not wanting to pay taxes.

 

[Kulindahr]

My answer to the question:

a flat tax, with a standard deduction of $20,000 and a personal exemption of $10,000.
plus a credit for up to $5,000 a year for health insurance, covering premiums and deductibles.

 

[jackoroe]

if u say so monkey. that's until you want more/wider streets. a better trash system. you want potholes filled or street lights that sync. an ambulance service that doesn't take an hour to come get you when some drunk guy runs into your car. a system that will give you atleast a few benefits if you really get hurt at work. a decent school system. agencies to monitor air/water pollution and enforce rules. police. fire protection.

unfortunately, a progressive tax is the only one that works. someone that has millions of dollars will almost never touch all that money. it is absolutely not necesary for even the most lavish of lifestyles. so, people that make as much as or less than what is necesary to live get little taxed if any. those that make more than that pay more, and that is only on the money in excess of the first bracket. then those that make grosely more than that get taxed more on the money in excess of the first and second brackets.

flat tax sounds beautiful. but it would never work unless everything were on a scale. you can not tax a person makeing $30,000 a year the same percent as someone make $3,000,000 a year. just for arguments sake, 20%. the 30,000 then has 24,000 left. he has to pay $600/month for shelter and lets say another 900/month for true necessities. food, clothing, insurance, grooming needs, utilities(electric, water, gas, waste), and health needs. throw in another 300/month for a car which is a true necessity in most places. and im not talking a brand new car. im talking like a 2003 toyota corola that never dies. but it still needs fuel, insurance, regular maintanance, etc. that leaves $2400 a whole year to pay for that car breaking down. or to go out to eat a few times. to buy lube and condoms, etc.

that 3,000,000 person has 2,400,000 after taxes. then, after all basic necessities, the guy has 2,378,400 left. this guy can pay for basic necesities of 110 ppl and still have another 2400 left. that's after taxes. that's why a progressive tax is needed. to make sure city, country, state, and federal programs can be adequately funded without truly making most of the country not having enough money to live at all.

We are all paying a confiscatory tax rate and still have potholes and shitty schools. So throwing money at the problem does not alleviate it.

Taxing at a flat rate makes sense. It is not the governments place to dictate how an individual lives his or her life. Taxation should be to raise revneue for the govenment and not for social engineering. The individual you cited making $3,000,000 per year will pay 100 times the tax as the individual making $30,000 per year. Unless he gets 100 times the amount of government services for his additional taxation, he's not being treated equally. But it does work out fairly.

If you prefer taxation for purposes of social engineering, perhaps you might support a tax rate of 100% for everybody who makes less than the poverty level. This would discourage people from making less than the poverty rate, which is a good thing. Maybe you might support a tax on fat people. Obesity costs us all money in terms of health care, so tax fat people into being more healthy. A tax on stupidity would also benefit everybody in the long run. Most members of Congress would no longer be able to afford to be there! I think I'm onto something there!

 

[jackoroe]

People who want to pay little or no taxes are just plain greedy and selfish. Greed is ugly.

Or maybe we're sick and tired of the government pissing away our hard earned money!Some people are just funny that way.

 

[sparky95]

I would rather donate my money to more efficient charities, than give it to government, so that it can be put through the bureaucratic wringer. But I guess that makes me selfish and greedy .

Oh, BTW, I'm not sure about your tax laws, but here you can write off charitable donations against your income tax. The problem is to get people to donate to charities other than the most popular and fashionable. Lots of donations to animal shelters, not so many to homeless shelters.....

 

[Kulindahr]

Or maybe we're sick and tired of the government pissing away our hard earned money!Some people are just funny that way.

That, too.

 

[Kulindahr]

Kulin, seriously, though--the trouble with a flat tax is that it wouldn't be "revenue-neutral". Our deficit would skyrocket.

The studies I've seen of a flat tax show that the upper-income regions would pay more than they do now, with so many loopholes closing.
Our deficit is already skyrocketed. We need to eliminate completely all the social-engineering departments of the FedGov, especially since they aren't authorized at all by the Constitution. If the FedGov limited itself by the Constitution, we wouldn't have a deficit, and could pay off the debt.

Here's another thing to consider--a flat tax would put accountants--100s of thousands of them--out of work. Moreover, homeowners, with their homeowners exemptions, would be devastated.

Let the accountants get honest work.

The double-whammy of ruin in the accounting and real estate field would create a domino effect that would be a real travesty to our economy.

So start the flat tax on incomes $120,00 and above.
Better yet, eliminate federal taxes altogether, and let the FedGov get by on 1/5 of what the states take in.

 

[Kulindahr]

To answer the question:

Our current tax system is progressive, but only mildly progressive; top tax rates are only 32%. Guys, that's very low, considering we're at war, and our top marginal tax rates are among the lowest in the First World.

I'm in favor of keeping the tax system as it is. It does need to be simplifed, but our tax system, I think, is based on common sense.

If we want to stick with progressive, the least we could do is raise the standard deduction to $20,000... and limit deductions at the top to charitable and homeowner.

 

[Kulindahr]

"Not enough revenue" is false -- you get the revenue you set the taxes to get.

Yes, I'm saying eliminate entitlements, especially the double-dipping where a person can accumulate a private pension, a military pension, another government pension, and also collect Social Security. Entitlements are what doom democracies -- it's the masses voting themselves goodies, without regard to anyone else. I often think that the greediest organization in the U.S. is AARP, because they don't seem to care about responsibility, only about getting their goodies -- and it's the richest retirees screaming most loudly about their checks being cut... not the checks of their much less well-off peers, but their own.

BTW, the one report I recall about a flat tax actually drawing more income from the upper-bracket folks wasn't Libertarian at all; it was done in cooperation with Forbes, and not liked by the readership since proposing that flat tax would have bitten them hard.

I'm also aware that the bottom 50% of taxpayers pay less than 5% of all FedGov taxes. Letting them off the hook, even enacting a reverse income tax for them, would barely scrape the deficit.

And yes, that was rather rambling, but sometimes I indulge myself in not composing so nicely.

 

[iman]

Progressive tax with appropriate deductions for most people and a flat tax for the wealthy and the large corporations to eliminate the loop holes and complications of the tax code.

Most people would not have a "hard earned income" if the government did not build and maintain the infrastructure that makes prosperity possible.

 

[Kulindahr]

Point 1) Huh? That didn't make sense. Are you denying that a "flat tax" is not revenue-neutral? Perhaps you should have investigated your source a little more closely. The flat-tax proposal proffered by Steve Forbes (daddy of Forbes magazine) exempted all income from trusts, annuities, etc. That's welfare for the rich. Steve Forbes, himself, who's worth 400$ million, wouldn't pay one red cent in tax.

Trust babies would pay no tax, while the working rich pay the highest amounts? That sounds real fair, Kulin.

Point 2) You're right about the AARP. What can we do, though? They have the votes. What you or I have to say about the matter just doeesn't count. They'll get their entitlements.

I know about Forbes' sleight-of-hand. The solution there is to define all money that comes to you from economic activity as income, and just lump it together; exempt only savings (on amounts up to the FDIC insured amount) interest.
Then you just start with how much money is needed, and define the percentage as what will bring that in -- et viola! it's revenue-neutral.

Yes, AARP will get their entitlements, and we'll have no one to fix that, and this Republic will go the way of Rome's (as it already is), and then the way of Rome, because those who don't labor or produce will suck the life out of everyone else.

I thank FDR, the father of entitlements, and his apostle LBJ, for this doom. Once the masses got the idea that the job of government was to provide goodies, and that votes would bring them goodies, liberty was doomed.

But if I didn't keep fighting for it, what would I be?

 

[FlyingCheeseSteak]

Wow, thanks guys...
I didn't think that taxation could extract so much emotion.
Kulindahr and JohanLarson - shoutout to you two!

 

[JayHawk]

Honey this is a gay forum. Where there are queens there are emotions. It could be over pumps or politics.

 

[seven_sins]

Regardless of one's opinion, this problem will never be solved, nor will it ever go away. If you are a "have," sit back and enjoy it. You won't live forever and it will make no difference to you after you die. And make no mistake, you will die. If you are a "have not," work hard. Someday, you might be lucky enough to be a "have." In the mean time, stay healthy. If you get sick, you will lower than peasant class in a Mexican slum.