[quote name='helava']A flat tax is a silly idea. Why? Because basic necessities, like food and shelter, have a minimum cost. If I earn minimum wage, and pay 10% of my wages in tax, then that is money that I might need to maintain a minumum standard of living that has been removed from my ability to spend. If I tax someone who makes 200K a year at the same percentage, they are easily able to meet the minumum standard of living, and then some. So, they're taxed the same percentage, but it's not really beneficial to us as a society, and it does handicap the poor.
On top of that, the middle and lower class also pay a substantial amount in payroll taxes, for services that are being gutted by this administration, whose benefits they will likely never see.
Regardless, a flat tax is a pretty poor idea, that really only seems fair on the surface, if you're not willing to give it any substantive thought.
seppo[/quote]
But part of that 'minimum cost' is merely taxation and regulation, passed the consumer. It is estimated that lawsuits cost every person about 2700$ a year in the form of higher prices; taxation and regulation, probably about that much again. So if there were a simpler tax plan, with *no* exceptions, then you wouldn't be taxed both on tax day and when buying products [both the sales tax and the hidden costs.] So in general, products would become cheaper, or at least, they would cost what the *product* costs, and not the governmental burdens.
I guess an important question about taxation is this: and it requires a little self-analysis:
What is the purpose of taxation? I believe it's to run the government, and the government [federal] is already biting off more than it's 'supposed' to. Many people see taxation as a way to redistribute wealth, or, worse imho, to 'punish' people who earn a lot of money. [And 'a lot' varies widely.'
Here's a couple interesting articles on what taxation costs us and the country/global economy.
http://www.fee.org/vnews.php?nid=4577
http://www.cato.org/pubs/pas/pa-302.html
http://www.kwcom.kwcom.net/2004_03_25_kwcom_archive.html
Rather than a 'flat tax', how about the Fair Tax?
"The FairTax allows Americans to keep 100 percent of their paychecks (minus any state income taxes)"
"No federal sales tax up to the poverty level means progressivity like today's tax system."
"With the FairTax, if you choose to buy any new good or service, the sales tax is charged just as state sales taxes are computed today....So, in deciding what to buy, you get to choose whether or not you pay the federal consumption tax"
"The FairTax plan is fairer because, much more than an income tax, it is based on "ability to pay."'
This way, if I happened to make 50k one year then 500k the next [legally]; under the current system I would be 'penalized' for making that extra money, thus reducing motivation to continue making it. maybe I wouldn't invent something again, or whatever. But under the Fair Tax, I could stick everything I didn't need to spend on 'essentials' in the bank, then the *next* year spend it on a house, trip, investment, whatever, and be taxed at that point. People don't earn money just to earn it, they earn it to spend it.
I agree, the government should help with a safety net. But people also need to be responsible--to me, the government should be like the parent of a 35 year old. If you *NEED* money, for an emergency or whatever, surely your parents will help you [if they can]. But by that point, you "should" be responsible enough to plan for the future, with the exception of some calamity [which does happen]. But the current view of government 'safety net' is more like the parent of a 13 or 14 year old. Yes, I can go mow lawns for money, but why not just go ask my parents if I'm not getting enough lawns? [And yes, those are two mass generalizations, I'm trying to make an example by exaggeration.]
If that business was more able to run its own business rather than comply with random gratuitous regulations, it might be able to afford to provide health insurance. Many small businesses do collapse; in fact, most. In many cases, that is due, again, to the burden of complying with government. But some cases are due to the marketplace--every big company was once a small company. Industries change. Amalgamated Buggy Whips is no longer in business; it either adapted or died. Should they be subsidized by the government for provided a 'product' no one uses any more?
Payouts for lawsuits may have been going down. If you mean the payout to the victim. The lawyers still get paid....just ask Mr Edwards. I don't think lawsuits are the *sole* reason malpractice insurance goes up, surely the stock market investments have something to do with it as well. But that also accounts only for actual court-directed verdicts. Don't forget, nowadays a lot of companies settle out of court, and I believe the judgements aren't public in that case. But they have to recoup that money somewhere.
jmcc: But I'm sure Eli Whitney used macaroni SOMETIME! It's a metaphor for the glittering life of the inventor of the macaroni gin. Or something like that...
