Flat Tax vs. Progressive Tax

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berzirk

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Discuss.

My opinion is that it's the only true, "fair tax". You make a bunch, your tax bill is higher. You make less, you pay less, but still at the same percent. There are other methods and proposals that would grant exemptions under certain amounts, or take into consideration investments and other assets/debts.

It makes a lot of sense to me, especially considering the State of Oregon is preparing to raise taxes to more than 50% for people making more than $100,000 (not a group I fall under). The usual line is that, "they're rich, they should pay their fair share!". I feel like they do pay their share, in fact they pay their fair share, while extremely low income people have access to a host of free social programs that are actually being financed by the the "wealthy taxpayers."

If you're poor in the State of Oregon, you get free medical care under the Oregon Health Plan. If you're rich, you will pay over 50% in taxes, have to pay for your own health care, and in essence, through higher taxes, be paying for someone else's health care too. Don't even get me started on social programs for illegal aliens that aren't paying a dime in taxes either.

I have trouble seeing how anyone is paying a fair share under this scheme. Help me out here.
 
I used to think the way you do. However, 10% from someone getting by at $30,000 has a lot more impact in that person's household finances than 10% from someone making a $300,000.

On the other hand, the top 1% of income earners pay more taxes than the rest of Americans combined. At some point, we have to realize that it's unfair to squeeze high income earners any further to bail out the government's fiscal irresponsibility.
 
I'm much more a fan of the flat tax but have an exemption for anybody X% above the poverty status for your local area where X is the % of the flat tax.

(ie: 10,000 poverty with 10% tax results in anyone less than 11,000 doesn't pay the flat tax).



If not a flat tax then I think there should be a federal law stating that no one individual should pay over 1/3 of their gross yearly monetary intake in ALL FORMS of taxes/fees/etc to all collective forms of gov't agencies. So if fed wants to raise taxes then the states must lower theirs to compensate. The ~10% sales + 10% income sucks for us in Kalifornia especially considering we can't balance a god damn budget.
 
We need to reform the tax system in this country but the flat/fair/whatever tax is perhaps the dumbest idea of the bunch when it comes to reform.

A more progressive tax system would be better or at the very least shut down a few more tax shelters and start enforcing tax laws on the books.

Try reading "Free Lunch" and "Perfectly Legal" by David Cay Johnson or "The Squandering of America" by Robert Kuttner.
 
The laws are being enforced, the problem is there are literally millions of them because the rich and powerful lobby to get benefiicial tax breaks, or have the money to be able to hire a CPA or have the education to pore over their finances and the tax system to gain the most legal benefit. (Of course there are tax frauds/cheats, and as much as I hate the current tax system, people who willfully break the law should still be punished.)
I think the actual Fairtax, including prebate, is the "fairest" tax mechanism we could have. IF it was enacted as its written - no exceptions, no loopholes. It would capture underground money, it would lessen consumption and drive recycling/reusing of goods, it would save billions of dollars in compliance costs, it would lessen the opportunities for politicians to commit class warfare and buy votes.
The fairtax is inherently progressive - people will get to make and keep and control more of their own money, and people with more money are more likely to spend more money on new goods, so the Rich are taxed more than the not-so-rich. Plus, and this is a what a lot of people who are entrenched in the current system don't like, people would be able to control their own money more, and how much of it they give to the government.
The only negative I can think of, apart from people beholden to the status quo power structure resisting it, is that older people who have saved their money over a lifetime, could potentially get taxed twice when they spend that savings. I don't have an answer for that, but I think there will be some sort of rough transition period for any change in the system.
 
I don't understand why people want to try to equalize taxation rates (which means reducing taxes for the top income earners and raising taxes for everyone else) when earnings have remained stagnant for the past decade, unemployment is the highest it's been since the Great Depression, and the value of the dollar is in the shitter (which means that stagnant earnings become an actual decline in the value of one's wages).

I've yet to see anyone make a compelling argument regarding a non-progressive tax system because I have not encountered anyone who holds these positions and actually can articulate what "fair" is in their mind. Most often it's coupled with allusions to the amount the wealthy pay in taxes relative to everyone else - suggesting that it is unfair to shoulder that burden - while simultaneously disregarding any notion that earnings inequality more than compensate for tax inequality.

Besides, the wealthy do get a HUGE tax break this year, if they die anyway. There's a 1-year setback in the estate tax exemption threshold that moves it up $3.5 million higher than last year.

Marginal tax rates for the wealthy are still half of what they were before Reagan entered office - yet our policy discussion of tax systems still points to the wealthy as the primary people suffering under the current system (not the rest of us - virtually everyone posting here, I suspect).

Neal Boortz's consumption tax is oppressive and backwards. It will put working-class families into a standard of living similar to what one would find in the US during the Great Migration period. Which would be great for an ultra-liberal like me, as barring further manipulation from the power elite, it would lead to more people recognizing and executing the power of labor unions, joining them, and working together as a society to demand fair compensation of their hard labor in the great capitalist machine.
 
[quote name='dopa345']I used to think the way you do. However, 10% from someone getting by at $30,000 has a lot more impact in that person's household finances than 10% from someone making a $300,000.

On the other hand, the top 1% of income earners pay more taxes than the rest of Americans combined. At some point, we have to realize that it's unfair to squeeze high income earners any further to bail out the government's fiscal irresponsibility.[/QUOTE]

But why should we penalize people who make more money? And this is an honest question. I don't know much about taxes, but this always bugged me. If you took some initiative and started your own business, why should you be penalized for it? Just because you make more money than your neighbor who chose to be a bum and work at McDonald's.

I'm all for the rich paying their fair share, but that's exactly what it should be, a FAIR share. My family is pretty damn poor, but I don't blame the rich for it. (Well, I guess you could, but I don't.) But as I said, I don't know much about taxes, so maybe somebody wants to beat some sense into me.
 
[quote name='Access_Denied']But why should we penalize people who make more money?[/quote]

IMHO this isn't a poor people vs. the rich or middle class but of the super rich vs. everyone else.

Anyhoo...

"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

"the expense of defending the society, and that of supporting the dignity of the chief magistrate, are both laid out for the general benefit of the whole society. It is reasonable, therefore, that they should be defrayed by the general contribution of the whole society, all the different members contributing, as nearly as possible, in proportion to their respective abilities."

"When the toll upon carriages of luxury, upon coaches, post-chaises, &c. is made somewhat higher in proportion to their weight, than upon carriages of necessary use, such as carts, waggons, &c. the indolence and vanity of the rich is made to contribute in a very easy manner to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country."

"The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state ....[to] remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.'"

For fun:

Guess who wrote the above, no googling.
 
[quote name='mykevermin']Besides, the wealthy do get a HUGE tax break this year, if they die anyway. There's a 1-year setback in the estate tax exemption threshold that moves it up $3.5 million higher than last year.[/QUOTE]

A week ago I was reading a piece in the WSJ about the "heroic" efforts that rich people are undertaking to keep loved relatives alive for a few days longer so they can take advantage of this tax break.

Goddam liberal media.
 
[quote name='mykevermin']Neal Boortz's consumption tax is oppressive and backwards. It will put working-class families into a standard of living similar to what one would find in the US during the Great Migration period.[/QUOTE]

17239.jpg

Weird... I'd be paying less in Federal Taxes and still paying a much lower percentage than those evil rich billionaires...
 
The biggest problem is that raising taxes eventually becomes counter productive, and a lot of states don;t realize this. The higher the taxes go, the more likely your higher earners will be to either move out, or utilize tax shelters and creative accounting to reduce or negate any tax burdens they face. Corporate taxes are the same issue, you can't raise taxes on corporations and then wonder why all the jobs are moving overseas. Most of the time corporations just pass additional tax expenses on to the consumer, so it ends up being a tax on them.
 
IMO America's taxes aren't progressive enough -- but I'm no economist and we've been doing pretty well for the past couple centuries so fuck it we must be doing something right.

[quote name='dopa345']On the other hand, the top 1% of income earners pay more taxes than the rest of Americans combined. At some point, we have to realize that it's unfair to squeeze high income earners any further to bail out the government's fiscal irresponsibility.[/QUOTE]

(a) I seem to recall the top 1% of earners paying less than half... it was a lot but not "more than the rest of America combined"... maybe top 10% was more than everyone else. But who knows, since there are a bazillion ways to twist such facts (some stats differentiate based on type of work, or salary vs hourly, excluding certain groups, etc).

(b) Even if your statement was true, what if the top 1% of earners also received more than everyone else combined? It's a meaningless statement without context. Even under a flat tax it'd be very possible for the top 1% to pay more than the other 99%.
 
I'd like a Flat Tax, but I honestly think politicians today incapable of doing such a thing without making it dramatically worse than it already is.
 
I'd like a simple progressive tax, with virtually no breaks that's lower than what we pay now combined with a national vat.
 
[quote name='Koggit']IMO America's taxes aren't progressive enough -- but I'm no economist and we've been doing pretty well for the past couple centuries so fuck it we must be doing something right.



(a) I seem to recall the top 1% of earners paying less than half... it was a lot but not "more than the rest of America combined"... maybe top 10% was more than everyone else. But who knows, since there are a bazillion ways to twist such facts (some stats differentiate based on type of work, or salary vs hourly, excluding certain groups, etc).

(b) Even if your statement was true, what if the top 1% of earners also received more than everyone else combined? It's a meaningless statement without context. Even under a flat tax it'd be very possible for the top 1% to pay more than the other 99%.[/QUOTE]

I will admit that I did misspeak. As of 2007, the top 1% paid more than the bottom 95% and account for abut 40% of total tax revenue. However, this has been a steadily growing trend, since about 20 years ago, it was 25%. I don't know if you read my whole post, but actually think a progressive tax is a fair method of taxation. The government's chief role is to protect the lives and property of its citizens so it's reasonable for me that the wealthy, with more to protect, should have to pay more taxes. But where do you draw the line? The government's goal should be to reduce taxes as much as possible to keep government functioning efficiently and to enact measures to promote economic opportunity to generate increased revenue from improving the tax base. However, it seems that the default mentality is the opposite, that the only solution for maintaining an inefficient government is to raise taxes. It is not the only solution, just the easiest.

I also think that everyone, regardless of income should pay at least some amount of tax, even a token amount of $5-10. If everyone had some skin in the game, it may at least promote a more engaged electorate.
 
[quote name='RAMSTORIA']I'd like a simple progressive tax, with virtually no breaks that's lower than what we pay now combined with a national vat.[/QUOTE]
That makes too much sense.
 
At some point, I'll contribute further to this thread, but I will say that I find it morally repugnant that people are taxed on wages they earn that allow them to barely scrape by and not drown. Living wages shouldn't be taxed; profitable income should be taxed. Tax loopholes should also be closed, many people who are wealthy don't pay all that much in taxes. A consumption tax in addition to a flat tax system would disproportionately harm the poor and middle class, and should be fought against. Ultimately, spending needs to be addressed first; until we're able to actually turn in a profitable budget (without excluding unfunded liabilities), we shouldn't be cutting taxes.

Msut:

The answer is Adam Smith. I don't remember where in "... Wealth of Nations" it was in, but it was in there. I'm almost 100% positive of that.
 
Flat tax and consumption tax can work, but you have to remove loopholes. A company buying a vehicle for an employee? No deductions. The company pays the consumption tax when buying the vehicle and the income used to buy the vehicle gets dinged beforehand by the flat tax.
 
[quote name='UncleBob']
17239.jpg

Weird... I'd be paying less in Federal Taxes and still paying a much lower percentage than those evil rich billionaires...[/QUOTE]

Of course someone who works for Neal Boortz's consumption tax think tank would assemble a table that makes it look enticing.

But it's incorrectly assembled in a way that's oversimplified and masks a whole hell of a lot of dirty secrets. First and foremost is that the income brackets aren't broken up by income quintiles. The middle bar in the chart ($116K earners) is already into the top 10% of all income earners - so over half the chart is displaying tax rates for fewer than the richest 10% of all Americans. They thus use three bars to cover the other 90+% of Americans, masking a remarkable amount of the variation in taxation rates.

But we don't even need to go there. One only needs to see that the "effective tax rate" in this bar chart is calculated under the premise that "annual income = annual spending." It says so right on the chart. But we know the spending habits of the wealthy are not done like that. Yes, they buy multiple homes, they buy exotic motor vehicles, and they buy stuff from "Neiman Marcus," and we don't. But the moment you consider these percentages are calculated with the assumption that every American has a *ZERO* percent savings rates, then you realize that the numbers are oversimplified, willfully deceptive, and they are presented to you with the same sincerity and authenticity of a mid-19th century traveling salesman pitching his magic cure-all tonic.

As statisticians say, "Garbage in, garbage out." If the numbers you put into caluclations are trash, or the underlying assumptions you insert into them are trash, then the results you get are trash. They can still be made into a bar chart, mind, and be made to look pretty and official and "real," as if they came from an "expert." But they're pretty audacious, IMO, to put up trash like that and think they would survive scrutiny. But, hey, in terms of people forming their opinions based on facts as opposed to ideology, facts always lose (consider the number of folks who believe the current Republican National Committee talking point that Obama is "afraid to call terrorism terrorism" versus text of speeches he's given since mid-December, and you'll see that we do live in a society where facts never interfere with a person's ability to believe something).
 
It's weird that you keep calling it Boortz' plan. You are aware that he did not have anything to do with the creation of this plan? It's about like the claims that the Church of Scientology created it...
 
He's penned no fewer than three books on the thing. His involvement catapulted it from fringe discussion to mainstream politics.

Nitpicking.

Back to the larger discussion - do you still have faith in the accuracy of the chart you provided?
 
[quote name='berzirk']Discuss.

My opinion is that it's the only true, "fair tax". You make a bunch, your tax bill is higher. You make less, you pay less, but still at the same percent. There are other methods and proposals that would grant exemptions under certain amounts, or take into consideration investments and other assets/debts.[/quote]

What is it about an equal percentage that makes it inherently fair? I don't think many people would say that en equal amount would be fair (say, $100 for everybody) though it is obviously an equal amount, so why is an equal percentage necessarily fair?

[quote name='berzirk']It makes a lot of sense to me, especially considering the State of Oregon is preparing to raise taxes to more than 50% for people making more than $100,000 (not a group I fall under). The usual line is that, "they're rich, they should pay their fair share!". I feel like they do pay their share, in fact they pay their fair share, while extremely low income people have access to a host of free social programs that are actually being financed by the the "wealthy taxpayers."[/quote]

Well, you know they obviously can't pay for them themselves.

[quote name='berzirk']If you're poor in the State of Oregon, you get free medical care under the Oregon Health Plan. If you're rich, you will pay over 50% in taxes, have to pay for your own health care, and in essence, through higher taxes, be paying for someone else's health care too. Don't even get me started on social programs for illegal aliens that aren't paying a dime in taxes either.

I have trouble seeing how anyone is paying a fair share under this scheme. Help me out here.[/QUOTE]

It looks like your problem is with social programs rather than the form of taxes. Either someone who can afford to pay for them will pay for them or they won't exist, so your choice is apparently to make them not exist. There's not really much more to it, if they could already afford to pay for what those government services do for them then they wouldn't have to be there in the first place.


As far as the actual taxes - rather than social services as the OP seems to really be discussing - I think a flat tax is pretty stupid and pointless. It would require exceptions because of its unfairness. You would have to choose a ridiculously low rate or either pick one that a decent amount of people can pay and exclude the rest, or exclude a good amount of money before beginning the tax.

In any case the entire point seems to simply be to tax the rich less. You obviously can't tax the poor more and taxing the working/middle classes more would probably just end up making them poor/working class and nobody would support it because it's just stupid. Why would you change the tax system so that it made more people worse off? So at best you could tax everybody less, but you could do the same with a progressive tax system anyway, so again, the only goal of actually changing the system to a flat tax seems to be to tax the rich less than they are now while making sure it can't be raised independently (and if you can tax everybody else less too, then bonus, but it's not essential).

And the FairTax - seriously?
 
Certainly there would need to be some tinkering to make it work, but I think you could set a minimum income that would not be taxed (which isn't any different than the current model) based on household size, income, and spending (consumption). But for the lower middle class, to the filthy rich, if they paid 10%, yes the rich is still paying more money in taxes, but they don't get penalized for hard work and earnings in the sense that they will hit a point where they enter a new bracket, and have a disproportionate amount of their income taxed.

The equal percentage is fair and necessary. You need the rich to bankroll your country. In our country, we expect the haves to pay more than the have nots, but to me, it's not fair to assume that the highest earners should lose a larger percentage of their income because they're successful.

Yes, you need to close tax breaks on the rich, and no I'm not even thinking about applying this to corporations, in part because I'm not smart enough to think through the ramifications, and in part because taxing a company dry and taxing a household dry have different levels of fair.

I just think the lower to upper middle class gets hosed because (as a member) we get taxed heavier than is fair, don't have the money to afford things like health insurance, nice housing, college education which is provided to the poor for free, and the rich have the money to pay for.

Whether it's a decrease in the progressive tax, or the implementation of a flat tax, the goal should be to lower taxes. That unfortunately is not the same goal the federal and most state governments have. To me, still, the flat tax means everyone has to pay the same flat amount. You don't barter for less, you don't get screwed into more. Additionally, (again, I'm not very smart) it would seem that this is much easier to budget around for the government, if they know they'll be receiving exactly 10% from X million Americans in taxes. Makes filing taxes easier, reduces processing and paperwork, and saves the gov't a lot of money and time.

Dunno...the more I read about it, the more I fall in love with the idea. Someday when I'm making over $150k/yr I'll be trying to pay for 3 kids in college, health care, house and possibly car payment, while I'm forking over half my earnings in taxes. That seems very, very wrong.
 
[quote name='mykevermin']the ol' meritocratic fallacy never fails to rear its head in these arguments.[/QUOTE]

Does the removal of deductions help at all?
 
[quote name='berzirk']Certainly there would need to be some tinkering to make it work, but I think you could set a minimum income that would not be taxed (which isn't any different than the current model) based on household size, income, and spending (consumption). But for the lower middle class, to the filthy rich, if they paid 10%, yes the rich is still paying more money in taxes, but they don't get penalized for hard work and earnings in the sense that they will hit a point where they enter a new bracket, and have a disproportionate amount of their income taxed.[/QUOTE]

lol @ "penalized for hard work"

[quote name='berzirk']The equal percentage is fair and necessary. You need the rich to bankroll your country. In our country, we expect the haves to pay more than the have nots, but to me, it's not fair to assume that the highest earners should lose a larger percentage of their income because they're successful.[/QUOTE]

Why is an equal percentage fair?

You seem to be taking the option that X income is exempt, then the 10% (or whatever) starts. So a tax with two brackets - 0% and 10%. First, it's already progressive, too bad for you :p. But second, is your tax going to work the way current taxes do - the 10% tax is on income over the exempted amount - or is it just 10% from then on?

Say $20k is exempt and you make $30k, do you get 10% on your $30k - $3,000 in taxes, or 10% on $10k - $1,000?

The first would make an abrupt and stupid line so that if you make $20k you keep $20k, but if you make $20,001 you make just under $18k after taxes.

But the second would mean that at $30k you're only effectively taxed at 3.33% ($1,000 from $30,000), yet if you made $50k and paid 10% on $30k you'd effectively be taxed 6% ($3,000 from $50,000) making it both more progressive and, in your opinion on different percentages, inherently unfair.

[quote name='berzirk']I just think the lower to upper middle class gets hosed because (as a member) we get taxed heavier than is fair, don't have the money to afford things like health insurance, nice housing, college education which is provided to the poor for free, and the rich have the money to pay for.[/QUOTE]

The poor don't get all that much awesome shit for free. If you think they do then just be poor, it's really easy.

[quote name='berzirk']Whether it's a decrease in the progressive tax, or the implementation of a flat tax, the goal should be to lower taxes. That unfortunately is not the same goal the federal and most state governments have. To me, still, the flat tax means everyone has to pay the same flat amount. You don't barter for less, you don't get screwed into more. Additionally, (again, I'm not very smart) it would seem that this is much easier to budget around for the government, if they know they'll be receiving exactly 10% from X million Americans in taxes. Makes filing taxes easier, reduces processing and paperwork, and saves the gov't a lot of money and time.[/QUOTE]

The paperwork wouldn't be too much different, the government would still have to keep up with your shit, and the budgeting doesn't seem like it would be too different either since you still don't know what that 10% is until people turn their shit in.

You've also fallen into the "lower taxes" trap. Lower taxes for what? What are you cutting? How much?

[quote name='berzirk']Dunno...the more I read about it, the more I fall in love with the idea. Someday when I'm making over $150k/yr I'll be trying to pay for 3 kids in college, health care, house and possibly car payment, while I'm forking over half my earnings in taxes. That seems very, very wrong.[/QUOTE]

Well then I hope you don't want to cut funding to public schools and universities then.
 
Sorry if you don't like the phrase penalized for hard work, but that's effectively what it does. My dad has busted his ass for 40 years. From paying his own way through college, having to stop halfway through to make more money to continue school, to working 70 hour weeks and holidays for decades. He's a chemical engineer. After years, and countless sacrifices, he finally started making a "high salary." Did that mean we could afford whatever we wanted, and lived in the lap of luxory? Far from it. He was losing about half his income in taxes. He didn't inherit his money. He didn't piss it away on booze, cigarettes, and fancy cars. He had a family to support, and did a damn fine job of it. Why should he support his family, and 20 other families because he's worked that hard?

I'm middle class. I work 3-4 jobs, about 65-70hrs per week. Not because I think that's the cool thing to do, it's so I can afford health care for my wife and kids, and pay my bills (and the occassional cheap ass video game). Why should I keep at it so some day I can give half my income to the government?

I've been dirt-ass poor, eligible for food stamps, probably eligible for other social programs, but I never pursued it. I was able bodied, I worked even if that literally meant borderline malnutrition. Parents offered help, but I wanted to stand on my own two feet, no matter how wobbly they were.

How is your example about $20k taxes vs. $20,001 taxes any different than the current model and the tax brackets? Simple. Once you get above the minimum threshold, you are paying a flat X%. Does it suck for you if you're the guy that makes $20,001? Yah, but not as bad as it would suck knowing that as you make more, a higher percentage of your income will go directly to the government. If it's a fixed percentage, you don't start entering these brackets where all of the sudden you go from 35% tax rate to 50. 50% taxation is excessive and disgusting. How people have been fooled into saying this is acceptable is truly beyond me.

I've read people say the processing of a flat tax would be much, much less than the current model. I suppose only dreamers and the IRS know the true answer, so we can merely speculate to give credence to our positions since neither of us have stats or insider info on it.

And if public schools and universities don't know how to budget their money (which overwhelmingly they don't) then they need people running the school districts that can. Not trying to be cut-throat, but if you can't stay in business because you mis-manage your funds grossly, who's problem should it be to fix it? Right now the political decision makers say it's the govt's problem. I'm in favor of a philosophical shift.
 
[quote name='berzirk']Sorry if you don't like the phrase penalized for hard work, but that's effectively what it does. My dad has busted his ass for 40 years. From paying his own way through college, having to stop halfway through to make more money to continue school, to working 70 hour weeks and holidays for decades. He's a chemical engineer. After years, and countless sacrifices, he finally started making a "high salary." Did that mean we could afford whatever we wanted, and lived in the lap of luxory? Far from it. He was losing about half his income in taxes. He didn't inherit his money. He didn't piss it away on booze, cigarettes, and fancy cars. He had a family to support, and did a damn fine job of it. Why should he support his family, and 20 other families because he's worked that hard?[/QUOTE]

First, you didn't live in the "lap of luxury" because it doesn't work that way, that's the point - harder work doesn't imply higher pay. I'm sure he worked hard, lots of people probably worked as hard or harder than him and were paid less. But regardless of how much he was taxed he still made more money when his salary increased (since I know it was never anywhere near 100% taxed), so why would you be discouraged from making more money because you have to pay a slightly higher percentage of it in taxes, but you're still making more money?

[quote name='berzirk']I'm middle class. I work 3-4 jobs, about 65-70hrs per week. Not because I think that's the cool thing to do, it's so I can afford health care for my wife and kids, and pay my bills (and the occassional cheap ass video game). Why should I keep at it so some day I can give half my income to the government?[/QUOTE]

I'd say that's working class, but whatever, I guess it depends on how much you're getting.

[quote name='berzirk']I've been dirt-ass poor, eligible for food stamps, probably eligible for other social programs, but I never pursued it. I was able bodied, I worked even if that literally meant borderline malnutrition. Parents offered help, but I wanted to stand on my own two feet, no matter how wobbly they were.[/QUOTE]

A lot of people go through that kind of pride before they finally break down and take the help as well, but fuck em, right?

[quote name='berzirk']How is your example about $20k taxes vs. $20,001 taxes any different than the current model and the tax brackets? Simple. Once you get above the minimum threshold, you are paying a flat X%. Does it suck for you if you're the guy that makes $20,001? Yah, but not as bad as it would suck knowing that as you make more, a higher percentage of your income will go directly to the government. If it's a fixed percentage, you don't start entering these brackets where all of the sudden you go from 35% tax rate to 50. 50% taxation is excessive and disgusting. How people have been fooled into saying this is acceptable is truly beyond me.[/QUOTE]

Oregon, right? In Oregon unless you're poor you're paying 9% income tax (apparently changing this year). In the highest federal tax bracket (over ~$373k a year) you'd be paying 35%. Even adding them both together that's not 50%, it's 43% (will be 48.6% when the federal goes back to 93-00 levels). But, that's not how it works.

You'll be giving 9% to Oregon anyway (or more, some wonky brackets this year, then 9.9% if over $125,000 after 2011), but the federal tax builds like my second example. In each bracket you're taxed on the income between the brackets. For example, if you make that $150k (say that's after all deductions, etc.) you're going for you'll be in the 28% federal tax bracket (unless you're married and filing separately, I'll take you as married filing jointly for this), but your tax will effectively be 20.18%, plus the new 10.8% if it's this year that you got it (I'm assuming they're on the same total income, I think that's right), making 30.98% tax. So you'd be left with just over $100k. You poor bastard. And you don't even have a sales tax!


[quote name='berzirk']I've read people say the processing of a flat tax would be much, much less than the current model. I suppose only dreamers and the IRS know the true answer, so we can merely speculate to give credence to our positions since neither of us have stats or insider info on it.[/QUOTE]

If it was a flat tax with no exemptions, deductions, etc. then it might be easier, but it's not the different tax brackets that make federal income taxes complicated, and you're already talking about at least one initial exemption.

[quote name='berzirk']And if public schools and universities don't know how to budget their money (which overwhelmingly they don't) then they need people running the school districts that can. Not trying to be cut-throat, but if you can't stay in business because you mis-manage your funds grossly, who's problem should it be to fix it? Right now the political decision makers say it's the govt's problem. I'm in favor of a philosophical shift.[/QUOTE]

Sure, whatever, what I'm saying is that if there were no public universities the chances that your kids would go to college are pretty much nil unless they get scholarships or you make a ton of money (and know the right people).
 
Ahh, it would appear I'm wrong on the tax percentage then. I thought it was 45% from Federal. I suppose if you combined Federal and State (depending on your state), it gets right around 50% though. (while it's true, we don't have sales tax (yay) we have unbelievably high property taxes, so they balance it all out)

In terms of discouraged from making money, you're having more of your money withheld by the government, as you make more. That's demoralizing as hell. You come home all excited because you got your big raise, only to find out it puts you into a new tax bracket, effectively taking away that take home raise. I'm not saying people will intentionally tank it at work because taxes are destroying their lives, but seeing how tax dollars are so terribly mismanaged by the feds and state politicians, it's even more offensive.

RE: being poor and taking benefits, I think you should have to show that you've worked some amount of time over the course of the week, month, etc. If it means you clean some old ladies bathroom twice a week for $20 a day, so be it. At least you're trying. There are people that look at government aid as an entitlement. It shouldn't be. We all go through periods where we're down on our luck, but if you can't even find a couple hours of work in odd jobs a week, you're not trying very hard, and are chosing to be miserable.

Anyhoo, regardless of the exact percentages state by state, I think people are over-taxed, and the wealthy, while I'm most certainly not a member of that party, are so disproportionately taxed, that I feel the tax system needs a complete overhaul. I hate this mentality that because someone is rich, they should be forced to bankroll programs for poor (and occasionally lazy), non-tax payers, and should sit there and take it as they lose a large percentage of their income. I think people that feel that's OK come from this mentality as working class, middle class, whatever class you want to call it, and think that everyone rich just fell into their money. Most people had to work exceptionally hard to make that.

Why should others be entitled to their money because they either don't work as hard, or don't make as much?
 
[quote name='dopa345']I will admit that I did misspeak. As of 2007, the top 1% paid more than the bottom 95% and account for abut 40% of total tax revenue. However, this has been a steadily growing trend, since about 20 years ago, it was 25%. I don't know if you read my whole post, but actually think a progressive tax is a fair method of taxation. The government's chief role is to protect the lives and property of its citizens so it's reasonable for me that the wealthy, with more to protect, should have to pay more taxes. But where do you draw the line? The government's goal should be to reduce taxes as much as possible to keep government functioning efficiently and to enact measures to promote economic opportunity to generate increased revenue from improving the tax base. However, it seems that the default mentality is the opposite, that the only solution for maintaining an inefficient government is to raise taxes. It is not the only solution, just the easiest.

I also think that everyone, regardless of income should pay at least some amount of tax, even a token amount of $5-10. If everyone had some skin in the game, it may at least promote a more engaged electorate.[/QUOTE]

The $5 - $10 token amount is interesting.

I didn't mean to come off as if I opposed your opinion -- I don't feel informed enough about the effects of taxation to argue for or against changing the way we do things. My post was just against the particular statement you made, the one about the top 1% bearing a disproportionate burden, because it's mentioned often in political debate and yet so rarely presented in context (despite how meaningless it is without context). I just Googled it: the top 1% make a little more than 20% of the nation's money and pay a little less than 40% of the nation's taxes. I find that to be a far more honest way of framing their tax burden. If anything, I think the more appalling fact of the two would be that the top 1% "earn" 20% of the nation's money.
 
[quote name='berzirk']I've been dirt-ass poor, eligible for food stamps, probably eligible for other social programs, but I never pursued it. I was able bodied, I worked even if that literally meant borderline malnutrition. Parents offered help, but I wanted to stand on my own two feet, no matter how wobbly they were.[/QUOTE]

You're an able-bodied adult who actually went out and worked for a paycheck instead of scamming social programs for free dough you didn't need?

Sorry, didn't realize we were talking to Captain America.
 
[quote name='camoor']You're an able-bodied adult who actually went out and worked for a paycheck instead of scamming social programs for free dough you didn't need?

Sorry, didn't realize we were talking to Captain America.[/QUOTE]

I dig spandex and masks. What can I say?
 
[quote name='mykevermin']We've reached terminal tautology, ladies and gentlemen![/QUOTE]
Obama needs a war. That'll get all the suddenly-rediscovered-tax-policy nattering nabobs of negativitiy off his nutz.
 
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