Would you support a flat tax?

Discussion in 'Politics, Religion, Social Issues' started by Frohickey, Mar 18, 2004.

  1. Frohickey macrumors 6502a

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    #1
    Okay. I could be swayed one way or another, and I'm certainly biased for it. So here goes.

    Do you agree that taxes should only be used for purposes that are used EQUALLY by all citizens? If so, do you agree that a flat tax is an equitable way of paying for these purposes? Flat tax, as in $x amount per person, regardless of income.

    For the federal government, that would mean, take the costs of running the court system, post roads, military, smelter for coins, printing press for paper money, administrative costs for Washington DC, add it all up, divide it by the number of people in the US, and thats your tax bill for the year.
     
  2. zimv20 macrumors 601

    zimv20

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    #2
    i'd consider it. the devil's in the details, though. a lot of how i felt would depend on how it interacted w/ other taxes -- i.e. i'd need to see the overall tax burden.
     
  3. IJ Reilly macrumors P6

    IJ Reilly

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    #3
    The devil's actually in the description. Read it again!
     
  4. numediaman macrumors 6502a

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    #4
    Well, let's see here . . . the Federal government spent 1.8 trillion dollars in expenditures in 2002, and there were 130 million income tax payers. That means everyone pays $13,750 per person.

    That means a family of four, with two working adults, who are currently earning $50,000 now must pay over 50% in tax.

    Of course, Steve Jobs, who earned $76.8 million in 2002 would pay the same amount, or 1.8%.

    Yep, sounds like a great system to me.


    source: http://www.census.gov/Press-Release/www/2003/cb03-ff05se.html
     
  5. bonehead macrumors regular

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    #5
  6. IJ Reilly macrumors P6

    IJ Reilly

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    #6
    Right. This is a "head tax," not a "flat tax."
     
  7. Dont Hurt Me macrumors 603

    Dont Hurt Me

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    #7
    A flat tax based on income sure i would support that but not what you propose. what that does is screw the poor,and working class and lets those Forbes millionaires pay near nothing. sorry cant do it. George is allready socking the middleclass and letting the rich get richer.
     
  8. zimv20 macrumors 601

    zimv20

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    #8
    that's not what i think of when i think flat tax. some years ago, jerry brown (iirc) was advocating a flat tax of 17%. so the $50k family would pay $8500, and jobs would pay some $13 million. the trick was to eliminate all those write-offs.

    i haven't done the research, but i bet a family of four making $50k would pay less than $8500 in federal income taxes today.
     
  9. numediaman macrumors 6502a

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    #9
    Zim, the idea was a head tax, not a flat tax. With a head tax everyone gets dinged the same amount, even if you earned a dollar, or a billion dollars.

    But concerning a flat tax: I'm dead set against it. What is everyone here advocating, revolution? Do you realize the social implications of moving the tax burden any further down the income chain?

    The progressive income came from day one. In 1913 income tax was instituted (but not withholding). The tax was 1% on the first $20,000 -- rising to 6% for income over $500,000.

    EDIT: the 17% flat tax would mean that anyone earning $70,000 would basically pay the same. Anyone making more than $70,000 would pay less. I am happy to report that a flat tax would benefit me -- but is the cost to others worth it? No.

    I believe everyone should be a tax payer -- even those earning less than $25K -- they should pay something, even if its a dollar. But don't buy into the crazy notion that the rich pay higher taxes than anyone else. It is not true!!!

    If you earn $1 million dollars you pay the same tax as someone who earns $25,000. What you say? The first $25k of a millionaires earnings are taxed at 15% -- the same rate as a someone who only earned $25K. It is not higher. (Its the amount over that amount that is taxed at a higher rate. Since the person earning $25K earned zero over $25K how can you say the rich pays more.)

    It is true that the richest Americans are paying a higher percentage of the total tax burden. Of course, they are also taking a higher and higher percentage of the income, as well. The only reason it appears like the rich are paying so much is that there are so many Americans who pay nothing at all. I would like every American to contribute something -- but I lose no sleep at all over the "unfair" burden of millionaires. They certainly don't seem to be losing any sleep over the growing number of people out of work.
     
  10. wordmunger macrumors 603

    wordmunger

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    #10
    A flat tax is a gimmick. What makes the tax code complicated is not the rate tables, but all the write-offs and loopholes. For example, you could make the tax rate 1 percent per $2000 of income, up to a maximum of, say 30 percent. This is about as far from a "flat tax" as you could get, but it would still be very simple to file your taxes, as long as there were no write-offs. Or alternately you could have a flat tax rate--15 percent for everyone, but if you kept all the write offs and loopholes, it wouldn't be any easier to file your taxes than it is now.

    The head tax as originally proposed is even more ridiculous. Why should a struggling graduate, just starting out on a job, pay the same dollar amount as Bill Gates and Warren Buffett? She doesn't get paid as much. If she's unemployed for any length of time, she might not even make enough to pay her tax bill. So, what, if you can't find a job, you get thrown in debtor's prison? It makes no sense.
     
  11. IJ Reilly macrumors P6

    IJ Reilly

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    #11
    It depends. If that income was derived from self-employment, the self-employment tax alone would be over $7,500. Anyway, this is a bogus proposal from word go. It's probably nothing more than an effort to draw us into a shallow, pointless debate where he can accuse us of wanting to "stick it to the rich." I'm out.
     
  12. DavisBAnimal macrumors member

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    #12
    That's not the type of tax inititally proposed in this thread - look carefully, and he's proposing a flat tax as in flat dollar amount, not percentage.

    I don't support a flat tax (dollar or percentage). I think the tax rates of the lower-income earners should be less to encourage them to invest their money into the economy to encourage growth. Those income-brackters who would be more tempted to take their money and put it into foreign bank accounts and spend it on far away islands and French riviera country clubs should be taxed higher. Same for corporations - lower rates for small-businesses and companies boosting the economy here at home, and higher for those taking their jobs overseas to exploit cheap labor and inhumane labor/environmental practices.

    The way it is now, the tax burden is on the working and the productive. Whereas a modest-income making nurse will be taxed upwards of 30% of his hard-earned money for his hourly job, a prissy hotel heiress making millions off of interest from her imherited daddy's investments gets taxed at half that rate. You know what? she should be getting taxed AT LEAST 30% on her dividend returns, etc, while that nurse should be taxed less, so he can go on using his money to grow the economy.

    The tax structure shouldn't be about "fairness" - we're past fairness in this country when not everyone gets access to proper education or medical coverage, etc. etc. The tax structure is all about strategic ways to grow our economy in ways that are benefitial to everyone. This is why the subsidy system has so much potential, though it is used so poorly (we should subsidize organic foods and small farmers, not mass factory-farms, not to mention renewable energies - wind, solar - not fossil fuels). The free-market is a great idea, but laissez-faire is far from the answer - markets don't always work out in ways that are benefitial to the people (maybe good for the bottom line, but not good for our populace). The tax structure is a great way to promote social responsibility and the growth of economy without the creation of totalitarian coercive laws, etc.

    "Fair" should be what benefits everyone, not who-pays-what.

    Davis
     
  13. Sun Baked macrumors G5

    Sun Baked

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    #13
    Flat tax -- NO

    Head tax -- NO

    Current progressive tax -- NO

    Simple Progressive Tax -- YES (As in everybody has the same tax form, in each tax bracket)

    ---

    But it's not just high earners that take advantage of write-offs, it's corporate America that gets away with it big time.

    And remember if you simplify the tax system for everybody, you will no longer be playing the Lotto with stock options -- because your ass would be taxed big time for getting them.
     
  14. zimv20 macrumors 601

    zimv20

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    #14
    ah, i see that now. i agree that such a tax could not possibly work.
     
  15. numediaman macrumors 6502a

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    #15
    I agree -- though I guess everyone could still argue about the details.

    I mentioned this elsewhere -- why do families pay income tax based on revenue, and businesses pay on profit. In other words, a family of four who earn $25,000 pay a 15% income tax. But Microsoft, who said they earned $12.3 billion in profit in 1999, paid zero in taxes. (I have no figures for other years). the reason is the system is different. Microsoft can work the system to show they actually earned zero profit.

    Individuals can't do that. If an individual said the they earned $25K, but that after expenses they were left with zero, they would still have to pay tax based on their "revenue" of $25k.

    If people paid taxes like businesses, very few would pay anything.

    Now I'm not advocating sticking it to business. But there needs to be some logic. Last year my business paid more taxes than Cisco (who paid zero). That pisses me off -- my business would not be on the Fortune 100,000 list!
     
  16. wordmunger macrumors 603

    wordmunger

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    #16
    The business tax code is insane. Back when I used to own a business, there would be years when we were just scraping by and we owed thousands in taxes. Other years, when the money was rolling in, we'd owe practically nothing. I couldn't figure it out--I just paid what the accountant told me to.
     
  17. Frohickey thread starter macrumors 6502a

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    #17
    I think the posts have missed the purpose to which this flat tax is used for, and have instead focused on the burden to the taxpayer.

    If the purpose of the tax is equally beneficial to all taxpayers, meaning that each taxpayer gets the same benefit from the government program, shouldn't the tax paid in order to fund the program be the same as well?

    This is assuming that the benefit of a court system, post roads, national defense, coining of money is of equal benefit to all taxpayers.
     
  18. pseudobrit macrumors 68040

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    #18
    This is ridiculous.

    You are not advocating an income tax.

    The government does not have to power to levy the head tax you are proposing.
     
  19. pseudobrit macrumors 68040

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    #19
    The biggest problem I see with taxes today is the unfairness of how FICA taxes are collected and used.

    FICA is collected on the first dollar, even the dollars earned below the poverty line, and because Congress can't help itself when there's cash lying around and laughed at the "lockbox," Social Security taxes are being spent like general funds. Which means the poor are in effect paying insanely high rates of tax.
     
  20. skunk macrumors G4

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    #20
    The burden of putting out a fire, preventing a burglary, picking up the garbage, etc., of a rich household is going to be far greater than that of a poor household. And the court system is definitely more to the benefit of the rich than the poor. So why should they pay the same? This is a tax system designed by the filthy rich to defraud the people they exploit already even more. It's regressive in the extreme.
     
  21. numediaman macrumors 6502a

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    #21
    The system you outlined in your initial post is not a "flat tax", its a head tax. A head tax would force every person, not matter what their income, to pay the same amount. If you earn a dollar, you still owe $15,000, or whatever. Clearly, it doesn't work.

    Now a flat tax is something else -- it's based on income, not benefits. I'm still very much against a flat tax. The people who can afford it least get their taxes raised, those at the top pay less.

    In the U.S. the top tax rate has fallen from 72% in 1962, to 35% now. So, you would like them lowered? Then whose taxes do you want raised?
     
  22. Frohickey thread starter macrumors 6502a

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    #22
    Never said it was an income tax. As to the power to levy this type of tax...
    Clause 1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    A $x amount of tax for each person is pretty dang uniform.
     
  23. Frohickey thread starter macrumors 6502a

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    #23
    Putting out a fire is done by a fire department, which is usually paid for via property taxes.
    Solving burglaries is done by a police department, which is usually paid for via property taxes.
    Picking up garbage is done by the garbage company, and this is done via a fee for how many containers a week of garbage you generate.

    How is a court system more to the benefit of the rich? Are the rich more likely to be victimized?
     
  24. Frohickey thread starter macrumors 6502a

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    #24
    Head tax... as in a fixed amount of tax per head (person).
    Flat tax... as in a (flat) fixed amount of tax per person... how is this different.

    I think you mean a Flat tax RATE ... with the amount paid based on something else, probably income.

    Wouldn't a flat tax get rid of class envy. Each citizen is treated equal. Each citizen pays equal. Every citizen shoulders the same burden. Wouldn't this be a good thing?
     
  25. Frohickey thread starter macrumors 6502a

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    #25
    Why not just eliminate the FICA tax then?

    Or, if not eliminated, the FICA tax each person gets is tallied up. At the end of the year, the total of all the FICA tax paid by the person is added together, along with whatever interest that part of it got when all the other FICA tax paid by other people are invested.
     

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