A Flat Tax: Please help me understand how it is unfair to have a flat tax!

[Article 15]

Dave is hilariously stupid and obtuse on this issue.

 

[PLYMCO_PILGRIM]

Flat tax is just code for lowering taxes for the wealthy but not for most Americans, as most flat tax rate proposals have the majority of Americans paying the same exact rate or higher than what they currently pay, while considerably lowering the tax rate of the wealthiest Americans. No one with a straight face can claim that is fair.

I find it hard to claim that making one person pay 50% of their income in taxes while allowing someone else to only pay 5% is equitable treatement, regardless of income levels.

they pay the same marginal rate for their dollars earned as anyone else. if the poor person someday climbs the ladder and makes the same income dollars as the millionaire, they too would be taxed at the same rate for each marginal tax rate bracket for each dollar they earn.

progressive rates are equitable and or fair.....the irs 10ft high on paper tax deductions, exemptions, credits, etc, is what makes it 'unfair' so to say....a flat progressive tax, with no deductions other than the standard deduction could be fair as well, as long as all dollars earned, are taxed at the same flat rate in the marginal tax brackets. No one making 250k a year is paying any taxes on their first 10k, no one making a million is paying taxes on their first 10k and no one making 10k is taxed on their first 10k....

seems 'fair' to me....and no one would be paying a dime more than anyone else for every dollar earned....

I understand what you mean by fair and agree in that situation. Those in each progressive income bracket, without exemptions, would be paying the same rate so its fair within their own income brackets.

My issue comes to going outside the indvidual income bracket where things are no longer equitable.

 

[Article 15]

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

The wealthy would benefit enormously from a flat tax and without a decent floor it hammers the poor and middle class.

 

[PLYMCO_PILGRIM]

To go from progressive to flat, you HAVE to lower the share the Rich pay.

Someone else has to pay that share, or you lose revenue.

For all of you who are not rich enough to benefit from the flat tax's cut for the Rich,
but will instead have to pay some of the difference that the Rich will no longer pay,

how much of that share are you personally willing to pick up?

I am willing to pay whatever the number is, I make a 5 figure income.

 

[PLYMCO_PILGRIM]

Conservatives believe that one of the root causes of all our economic ills is that the poor are undertaxed and the rich are overtaxed.

It's amazing really.

Ok now that is just garbage and you know it.

The conservatives think govt is the root cause of all our economic woes. One of the fixes to these woes on the govts end, for conservatives is lower taxes for all americans from rich to poor. Another aspect where the govt causes problems in the economy is by getting involved in the first place....example fanny/freddy and the equal housing act which gave the banks the ability to screw us all with the housing market.

if conservatives believe in lowering taxes for the rich and the poor, why would you support a flat tax? a flat tax does raise the taxes of the poorest and the middle class and it lowers the taxes for the wealthiest....

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

I am a libertarian which means i'm a big guy on fairness through the govt. I don't like affirmative action either because i find it to be institutional racism much for the same reason a progressive tax rate bothers me. Sorry I was speaking for what I view the conservative position to be.

I do realize that a flat tax would make the poor pay income taxes they don't currently pay. However I disagree that, in the end, its a tax cut for the rich due to the fact that the rich would no longer be able to exempt their income like they can now.....i think that the dropping of the deductoins will actually make the rich pay more than they do now.

 

[PLYMCO_PILGRIM]

Your point that the poorer would pay a higher percentage in income under a flat tax is just wrong. I understand why you tried to make that connection but if you actually put it onto paper, in numbers, you find that everyone is paying the same percentages still. The sales tax will still be 5% for the guy making 5 figures and the guy making 8 figures, the excise taxes on things will still be the same percentage of their values, the sin taxes will still be $xx.x/bottle for things like booze for everyone.

It's not the rate he's talking about, it's the percentage to their total income earned that he's talking about. Agreed that the percentages they are paying are the same i.e. the same sales tax rate, the same sin tax rate.....the point is that nominal value of those taxes when compared to the total income of the individual is at a higher overall percentage of their income for the poor.

The title says it all.

I think a flat tax on all americans is the only truly fair tax structure.

For all examples please use a 10% tax rate, I know its not realistic and would have to be higher but just for math purposes in any pro/anti flat tax examples lets use the easy number.


To me a person making $10,000/year paying $1,000 in taxes while a guy making $10,000,000/year paying $1,000,000 in taxes is fair.

I'm not sure how, under our current system at the end of the year, someone making $50,000/year being responsible for ~$12,500 in federal income tax while someone making $25,000/year is responsible to pay ~$3750 in federal income tax. After deductions its more like $8,000 and $0.00 which still doesn't sound fair to me.


So....now that my opinion is here please try to explain to me or convince me how a flat tax is less fair overall than our current tax system.

While a flat tax may sound fair and equitable, it is not. It also doesn't make sense if it were made to actually be fair and equitable. Those of you on the right get so hung up with those who pay no federal income taxes that you simply choose to ignore all the other taxes that are paid by those same people.

Anyway, here is the deal on a flat tax with no deductions for anyone. First of all, to be fair, all other taxes must be rescinded. That means no more excise taxes, no more state sales taxes, no more sin taxes, no more payroll taxes, no more property taxes, no taxes on anything, just a flat income tax for everyone. Let's first start with the necessary rate which would need to be between 30% and 35% based on current spending. That is just for the federal government. On the flipside, the state flat tax would need to be approximately 7% to 10%. Now remember, nobody gets any tax breaks and all income is taxed, capital gains, corporate profits, everything. Are you still liking this flat tax idea now? The rates may seem a bit high, but you must remember that all other taxes must be removed to be fair, and then we would need to account for some income slipping between the cracks and being unreported.

By making everything fair under such a flat tax, people who visit the US will no longer pay any taxes, illegals who work under the table will no longer pay any taxes either. At least now they pay some taxes through sales, sin, and excise taxes. The first thing I can think of is that it would also give great reason for many people to find ways to hide income. The truth is, such a system doesn't even begin to make any sense, and it would be terrible for everyone involved.

Now, you are probably going to tell me that you just meant making a flat tax for federal income taxes and leaving everything else alone. But since the lowest income earners pay the biggest percentage of their income in all those other taxes that the wealthy do not, all of a sudden, we would have the poorest Americans paying the highest percentage of taxes, and the wealthiest Americans paying the least. If this is your true agenda, then just say so. If you really think a flat tax on just federal income taxes is fair, then you haven't done the research or you've just been listening to those right wing nutjobs on the radio too much.

No I still disagree and I don't listen to rightwing nutjobs on the radio...Jim browdy and Margerie Eagan are not right wing nutjobs, look them up.

I did intend to replace ALL FEDERAL taxes with a flat tax rate that is the same for everyone.

Your point that the poorer would pay a higher percentage in income under a flat tax is just wrong. I understand why you tried to make that connection but if you actually put it onto paper, in numbers, you find that everyone is paying the same percentages still. The sales tax will still be 5% for the guy making 5 figures and the guy making 8 figures, the excise taxes on things will still be the same percentage of their values, the sin taxes will still be $xx.x/bottle for things like booze for everyone.

I get it...say someone makes 10,000 and someone makes 100,000 and both pay 10% income tax so thats 1,000 and 10,000 in taxes

Now one has 9,000 left and the other has 90,000. Now say they both spend the same amount on taxable goods.....for ease lets make that number of taxes on their annual taxable goods $1,000.00. Now one has 8,000 left and the other has 89,000 (obviously not including the money they spent to have to pay the sales tax)....this is where you view things as getting unfair because now the effective tax rate is 20% for 10k and 11% for 100k. Please don't nitpick the numbers I used, i understand that to pay 1,000 in sales tax the poor dude would probably have to make more than 10,000, i was just trying to provide an example for discussion value .

I understand how you feel that is unfair because of that but, in the end, i still think this is far more equitable than taxing people at different rates. The income tax being equitable is not causing that imbalance, it is other taxes and individuals actual spending that does it.

the entire context of my post might help you understand what I said better

 

[Care4all]

the percentage would be the same....for the wealthiest and the poorest, but the value of what that percentage is to the payer goes way up for the person just trying to make ends meet on necessities.

the only way a flat tax could work is to give each person a standard deduction for necessities, include all federal taxes in the flat tax....so they would eliminate the social security tax, the medicare tax, the gas tax, the cigarette tax, capital gains tax etc etc etc, and all previous segments of taxes would be combined in to this one flat tax.....

also, if individuals are not allowed to deduct expenses, then what about corporations and businesses? will they be "flat taxed" as well on their total income and not just their profits?

 

[G.T.]

Ok now that is just garbage and you know it.

The conservatives think govt is the root cause of all our economic woes. One of the fixes to these woes on the govts end, for conservatives is lower taxes for all americans from rich to poor. Another aspect where the govt causes problems in the economy is by getting involved in the first place....example fanny/freddy and the equal housing act which gave the banks the ability to screw us all with the housing market.

if conservatives believe in lowering taxes for the rich and the poor, why would you support a flat tax? a flat tax does raise the taxes of the poorest and the middle class and it lowers the taxes for the wealthiest....

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

I am a libertarian which means i'm a big guy on fairness through the govt. I don't like affirmative action either because i find it to be institutional racism much for the same reason a progressive tax rate bothers me. Sorry I was speaking for what I view the conservative position to be.

I do realize that a flat tax would make the poor pay income taxes they don't currently pay. However I disagree that, in the end, its a tax cut for the rich due to the fact that the rich would no longer be able to exempt their income like they can now.....i think that the dropping of the deductoins will actually make the rich pay more than they do now.

So are you by proxy saying the rich don't pay enough?

 

[PLYMCO_PILGRIM]

I would exempt the first $30, 000.00 and have from there upward be taxed at a flat rate, including capital gains.

The $30, 000.00 exemption would, though, include a Millionnaire's first $30k as well.

And as you might be able to see... I have broken it down to show the inequity in that scenario as well... it is just another name for the same progressive bullshit

Yeah you did show that by exempting the first XXXXXX of income you end up, even if taxes are flat, creating a system that shows a bit of progressiveness in it.

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

The wealthy would benefit enormously from a flat tax and without a decent floor it hammers the poor and middle class.

you misquoted me (what i mean is i never typed that sentance and the other post i quoted is where you got your quote link from)

 

[PLYMCO_PILGRIM]

if conservatives believe in lowering taxes for the rich and the poor, why would you support a flat tax? a flat tax does raise the taxes of the poorest and the middle class and it lowers the taxes for the wealthiest....

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

I am a libertarian which means i'm a big guy on fairness through the govt. I don't like affirmative action either because i find it to be institutional racism much for the same reason a progressive tax rate bothers me. Sorry I was speaking for what I view the conservative position to be.

I do realize that a flat tax would make the poor pay income taxes they don't currently pay. However I disagree that, in the end, its a tax cut for the rich due to the fact that the rich would no longer be able to exempt their income like they can now.....i think that the dropping of the deductoins will actually make the rich pay more than they do now.

So are you by proxy saying the rich don't pay enough?

No I am saying that i think the dropping of the deductoins will actually make the rich pay more than they do now under a flat tax rate system due to the deductions and loopholes they have available now.

 

[Care4all]

Ok now that is just garbage and you know it.

The conservatives think govt is the root cause of all our economic woes. One of the fixes to these woes on the govts end, for conservatives is lower taxes for all americans from rich to poor. Another aspect where the govt causes problems in the economy is by getting involved in the first place....example fanny/freddy and the equal housing act which gave the banks the ability to screw us all with the housing market.

if conservatives believe in lowering taxes for the rich and the poor, why would you support a flat tax? a flat tax does raise the taxes of the poorest and the middle class and it lowers the taxes for the wealthiest....

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

I am a libertarian which means i'm a big guy on fairness through the govt. I don't like affirmative action either because i find it to be institutional racism much for the same reason a progressive tax rate bothers me. Sorry I was speaking for what I view the conservative position to be.

I do realize that a flat tax would make the poor pay income taxes they don't currently pay. However I disagree that, in the end, its a tax cut for the rich due to the fact that the rich would no longer be able to exempt their income like they can now.....i think that the dropping of the deductoins will actually make the rich pay more than they do now.

the wealthiest, according to the irs, pay about 21% in effective income taxes....if you make the rate 20% without a standard deduction, you are lowering it for them and you are raising the fed income tax effective rate for EVERY ONE ELSE...in some cases, you would be doubling the taxes owed by the average middle class person....that's a huge, huge tax hike on them PP.

 

[G.T.]

I am a libertarian which means i'm a big guy on fairness through the govt. I don't like affirmative action either because i find it to be institutional racism much for the same reason a progressive tax rate bothers me. Sorry I was speaking for what I view the conservative position to be.

I do realize that a flat tax would make the poor pay income taxes they don't currently pay. However I disagree that, in the end, its a tax cut for the rich due to the fact that the rich would no longer be able to exempt their income like they can now.....i think that the dropping of the deductoins will actually make the rich pay more than they do now.

So are you by proxy saying the rich don't pay enough?

No I am saying that i think the dropping of the deductoins will actually make the rich pay more than they do now under a flat tax rate system due to the deductions and loopholes they have available now.

Which is by proxy saying they don't currently pay enough.

 

[PLYMCO_PILGRIM]

the percentage would be the same....for the wealthiest and the poorest, but the value of what that percentage is to the payer goes way up for the person just trying to make ends meet on necessities.

the only way a flat tax could work is to give each person a standard deduction for necessities, include all federal taxes in the flat tax....so they would eliminate the social security tax, the medicare tax, the gas tax, the cigarette tax, capital gains tax etc etc etc, and all previous segments of taxes would be combined in to this one flat tax.....

also, if individuals are not allowed to deduct expenses, then what about corporations and businesses? will they be "flat taxed" as well on their total income and not just their profits?

Yeah I think everyone in the discussion understands that concept you are presenting in the first sentance.

I think our original compromise of making it so that the first $XX,XXX.XX income for all americans goes untaxed for the federal flat income tax rate is really the solution. That is if people want to try to get a flat tax actually passed.

I personally would like to see coroporate income tax rates go to 25% and they have ZERO exepmtions for anything. I would also like to eliminate all govt subsidies for businesses.

 

[Article 15]

Your point that the poorer would pay a higher percentage in income under a flat tax is just wrong. I understand why you tried to make that connection but if you actually put it onto paper, in numbers, you find that everyone is paying the same percentages still. The sales tax will still be 5% for the guy making 5 figures and the guy making 8 figures, the excise taxes on things will still be the same percentage of their values, the sin taxes will still be $xx.x/bottle for things like booze for everyone.

It's not the rate he's talking about, it's the percentage to their total income earned that he's talking about. Agreed that the percentages they are paying are the same i.e. the same sales tax rate, the same sin tax rate.....the point is that nominal value of those taxes when compared to the total income of the individual is at a higher overall percentage of their income for the poor.

While a flat tax may sound fair and equitable, it is not. It also doesn't make sense if it were made to actually be fair and equitable. Those of you on the right get so hung up with those who pay no federal income taxes that you simply choose to ignore all the other taxes that are paid by those same people.

Anyway, here is the deal on a flat tax with no deductions for anyone. First of all, to be fair, all other taxes must be rescinded. That means no more excise taxes, no more state sales taxes, no more sin taxes, no more payroll taxes, no more property taxes, no taxes on anything, just a flat income tax for everyone. Let's first start with the necessary rate which would need to be between 30% and 35% based on current spending. That is just for the federal government. On the flipside, the state flat tax would need to be approximately 7% to 10%. Now remember, nobody gets any tax breaks and all income is taxed, capital gains, corporate profits, everything. Are you still liking this flat tax idea now? The rates may seem a bit high, but you must remember that all other taxes must be removed to be fair, and then we would need to account for some income slipping between the cracks and being unreported.

By making everything fair under such a flat tax, people who visit the US will no longer pay any taxes, illegals who work under the table will no longer pay any taxes either. At least now they pay some taxes through sales, sin, and excise taxes. The first thing I can think of is that it would also give great reason for many people to find ways to hide income. The truth is, such a system doesn't even begin to make any sense, and it would be terrible for everyone involved.

Now, you are probably going to tell me that you just meant making a flat tax for federal income taxes and leaving everything else alone. But since the lowest income earners pay the biggest percentage of their income in all those other taxes that the wealthy do not, all of a sudden, we would have the poorest Americans paying the highest percentage of taxes, and the wealthiest Americans paying the least. If this is your true agenda, then just say so. If you really think a flat tax on just federal income taxes is fair, then you haven't done the research or you've just been listening to those right wing nutjobs on the radio too much.

No I still disagree and I don't listen to rightwing nutjobs on the radio...Jim browdy and Margerie Eagan are not right wing nutjobs, look them up.

I did intend to replace ALL FEDERAL taxes with a flat tax rate that is the same for everyone.

Your point that the poorer would pay a higher percentage in income under a flat tax is just wrong. I understand why you tried to make that connection but if you actually put it onto paper, in numbers, you find that everyone is paying the same percentages still. The sales tax will still be 5% for the guy making 5 figures and the guy making 8 figures, the excise taxes on things will still be the same percentage of their values, the sin taxes will still be $xx.x/bottle for things like booze for everyone.

I get it...say someone makes 10,000 and someone makes 100,000 and both pay 10% income tax so thats 1,000 and 10,000 in taxes

Now one has 9,000 left and the other has 90,000. Now say they both spend the same amount on taxable goods.....for ease lets make that number of taxes on their annual taxable goods $1,000.00. Now one has 8,000 left and the other has 89,000 (obviously not including the money they spent to have to pay the sales tax)....this is where you view things as getting unfair because now the effective tax rate is 20% for 10k and 11% for 100k. Please don't nitpick the numbers I used, i understand that to pay 1,000 in sales tax the poor dude would probably have to make more than 10,000, i was just trying to provide an example for discussion value .

I understand how you feel that is unfair because of that but, in the end, i still think this is far more equitable than taxing people at different rates. The income tax being equitable is not causing that imbalance, it is other taxes and individuals actual spending that does it.

the entire context of my post might help you understand what I said better

I got the entire context of it.

My point stands.

 

[Article 15]

And as you might be able to see... I have broken it down to show the inequity in that scenario as well... it is just another name for the same progressive bullshit

Yeah you did show that by exempting the first XXXXXX of income you end up, even if taxes are flat, creating a system that shows a bit of progressiveness in it.

only ONE GROUP, the wealthiest, would benefit with the lower taxes from a flat tax.????

The wealthy would benefit enormously from a flat tax and without a decent floor it hammers the poor and middle class.

you misquoted me (what i mean is i never typed that sentance and the other post i quoted is where you got your quote link from)

Yeah....my bad....I was trying to quote Care.

 

[PLYMCO_PILGRIM]

So are you by proxy saying the rich don't pay enough?

No I am saying that i think the dropping of the deductoins will actually make the rich pay more than they do now under a flat tax rate system due to the deductions and loopholes they have available now.

Which is by proxy saying they don't currently pay enough.

Let me be clear (tee hee) I am not saying the rich don't pay enough I am saying that under a flat tax system I would like to see all exemptions to taxes eliminated.

 

[G.T.]

No I am saying that i think the dropping of the deductoins will actually make the rich pay more than they do now under a flat tax rate system due to the deductions and loopholes they have available now.

Which is by proxy saying they don't currently pay enough.

Let me be clear (tee hee) I am not saying the rich don't pay enough I am saying that under a flat tax system I would like to see all exemptions to taxes eliminated.

That's an obfuscation.

You want a flat tax: check
You said the rich will see a tax increase, because it will drop their current plethora of exemptions: check
You still want a flat tax: check

So you do not see what they're paying now as adequate, one could only gather. You favor them paying more, as you said yourself.

 

[PLYMCO_PILGRIM]

It's not the rate he's talking about, it's the percentage to their total income earned that he's talking about. Agreed that the percentages they are paying are the same i.e. the same sales tax rate, the same sin tax rate.....the point is that nominal value of those taxes when compared to the total income of the individual is at a higher overall percentage of their income for the poor.

No I still disagree and I don't listen to rightwing nutjobs on the radio...Jim browdy and Margerie Eagan are not right wing nutjobs, look them up.

I did intend to replace ALL FEDERAL taxes with a flat tax rate that is the same for everyone.

Your point that the poorer would pay a higher percentage in income under a flat tax is just wrong. I understand why you tried to make that connection but if you actually put it onto paper, in numbers, you find that everyone is paying the same percentages still. The sales tax will still be 5% for the guy making 5 figures and the guy making 8 figures, the excise taxes on things will still be the same percentage of their values, the sin taxes will still be $xx.x/bottle for things like booze for everyone.

I get it...say someone makes 10,000 and someone makes 100,000 and both pay 10% income tax so thats 1,000 and 10,000 in taxes

Now one has 9,000 left and the other has 90,000. Now say they both spend the same amount on taxable goods.....for ease lets make that number of taxes on their annual taxable goods $1,000.00. Now one has 8,000 left and the other has 89,000 (obviously not including the money they spent to have to pay the sales tax)....this is where you view things as getting unfair because now the effective tax rate is 20% for 10k and 11% for 100k. Please don't nitpick the numbers I used, i understand that to pay 1,000 in sales tax the poor dude would probably have to make more than 10,000, i was just trying to provide an example for discussion value .

I understand how you feel that is unfair because of that but, in the end, i still think this is far more equitable than taxing people at different rates. The income tax being equitable is not causing that imbalance, it is other taxes and individuals actual spending that does it.

the entire context of my post might help you understand what I said better

I got the entire context of it.

My point stands.

yes and i said your point in my long response

 

[Care4all]

the percentage would be the same....for the wealthiest and the poorest, but the value of what that percentage is to the payer goes way up for the person just trying to make ends meet on necessities.

the only way a flat tax could work is to give each person a standard deduction for necessities, include all federal taxes in the flat tax....so they would eliminate the social security tax, the medicare tax, the gas tax, the cigarette tax, capital gains tax etc etc etc, and all previous segments of taxes would be combined in to this one flat tax.....

also, if individuals are not allowed to deduct expenses, then what about corporations and businesses? will they be "flat taxed" as well on their total income and not just their profits?

Yeah I think everyone in the discussion understands that concept you are presenting in the first sentance.

I think our original compromise of making it so that the first $XX,XXX.XX income for all americans goes untaxed for the federal flat income tax rate is really the solution. That is if people want to try to get a flat tax actually passed.

I personally would like to see coroporate income tax rates go to 25% and they have ZERO exepmtions for anything. I would also like to eliminate all govt subsidies for businesses.

we got a lot more in common PP....

a flat tax with a standard deduction is acceptable and makes it less of a regressive tax....but ONLY if all other taxes are incorporated in to this flat tax...like i said, no ss tax, no gas tax no ciggie tax, etc....

I could accept corporate flat tax of 20%...i think 25% is too high....especially with no expenses being able to be deducted....even a 15% flat corporate tax, i could accept....unless some one else has a good argument against such, and convinces me otherwise!

 

[Wiseacre]

Most flat tax proposals do not start at zero, they start at the poverty level, or they have an exemption for each individual and go from there. So, married with 2 kids, you only pay the flat tax on the money you make over $40,000. No other deductions, breaks, loopholes, although maybe the handicapped deserve some extra help.

I'm okay with something along these lines, although I would be open to a lower tax rate for capital gains to spur investments and economic growth. No hiding money in tax shelters or tax free foundations either.

Same deal for corporate taxes, no breaks, no exemptions, no deductions. And any tax credits you have up to now get wiped out. Profits made overseas would not be taxed here, same as every other country does.