Why only a "progressive" income tax?

[NYcarbineer]

Not to mention, most flat tax proposals I have read exempt a certain level of income, usually the federal poverty level. So, the tax doesn't kick in until about $20k or so.

I disagree with that

If we are going to tax an earned dollar then tax every earned dollar

Well, I respectfully disagree. I think levying an income tax on the working poor is counterproductive.

Then it's no longer a flat tax

no tax is fair. And that's why your OP is fail. That and it's argument is based on facts that don't exist.

But, there are valid argument for a simplified code

I see the need for taxes so if we are going to tax anything then each of those anythings should be taxed at the same rate for everyone

The progressive tax does tax everyone at the same rates, bracket by bracket.

 

[bendog]

And you fail right there.

explain

MArginal utility of money is based on the premise that after you have X dollars that every other dollar is worth less to you so therefore you don't need it

No, it's not. It's not that you don't need the money, but that the additional money doesn't carry the same usefulness. Giving $500 to a minimum wage worker gives him more benefit than giving $500 to someone who makes $100,000/year. He might still NEED the extra $500, but the impact will still be lesser than to the min wage worker.

It is known and demonstrable that the higher your income, the lower the percent of your income is spent on food, shelter, health care. So a poorer person who spends 90% of their salary on food, rent, clothes etc will be hurt more by a 15% tax than a richer person who only spends 75% on necesseties (though his necessities are nicer).

And the determination of that usefulness is purely subjective

No, it's not.
If person A is spending 90% of his income on Food, Clothing, Shelter, and Medical expenses, and person B is spending 75% of his income on those, and then saving 10% and investing 10%, then it is not subjective to say that a 20% tax will more adversely affect person A. That is NOT saying it won't affect B at all, but that the effect will be objectively less severe.

How useful something is is clearly a subjective assessment. Not sure how you can deny that.

I'm not sure why "useful" is any issue. Useful may be subjective, but maybe not. Making a dollar by providing some good or service is arguably more useful that making a dollar in a stock trade based upon timing a short term trade. But that may be irrelevant to the topic at hand.

However, there's no argument that a "pure" consumption tax is regressive and affects lower earners more proportionally than higher earners. But, there's no rule a consumption tax cannot be applied only to purchases beginning after some exempt amount.

 

[Agit8r]

Progressive income taxes are based on the subjective marginal utility analysis that basically says idiots in government can decide if you "need" all the money you make or not and that they are justified in taking the money they decide you don't "need"

Well all of you who love this type of blatantly unfair tax scheme I ask you why stop at income?

Why not use progressive tax schemes for everything that is taxed?

Let's say you own a 4 bedroom home but you and your wife have only 1 kid. You only "need" 2 bedrooms so some moron in your state government can decide that those 2 bedrooms must be taken from you and given to someone else and then inserts 2 people into your home because they "need" those rooms and you don't

What about a vacation home? Surely you don't "need" that if you only use it on occasion.

You and your wife have 2 cars and you have your dream car in the garage you don't need that classic 1969 GTO so why not let the government take it from you to give to someone who does "need" it

I bet that sounds like a great plan to some of you doesn't it?

As classical economist Adam Smith explains it in his Wealth of Nations:

"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."

So indeed, why is income the only thing we tax progressively?

 

[NYcarbineer]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

 

[Davros]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

Yes. If 20,000 is the standard deduction only income between 20,000 and 50,000 has a rate increase.

 

[Skull Pilot]

I'd rather we move away from taxes on production (income) and move toward taxes on consumption (sales).

It has its merits but the Fair ax proposal is way too complicated

It collects tax from everyone then gives some back every month

It makes no sense to do that just charge a lower rate and don't give anything back

The prebate mitigates the regressive nature of a sales tax. Not giving anything back and lowering the rate does not.

It's not efficient and will cost way too much to administer

 

[bendog]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

Yes. If 20,000 is the standard deduction only income between 20,000 and 50,000 has a rate increase.

But if there's a standard deduction, there's no pure flat tax. Not that I have a problem with that. And not that it doesn't destroy skull pilots assertion of inefficiency and difficulty to apply in post 146

 

[Skull Pilot]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

See what you're failing to factor in is that under a progressive tax like ours no one pays taxes on their entire income do they?

There are all sorts of deductions and giveaways in the system so that guy you say is paying 10% is really paying much less

So the solution is to tax ALL the income and then use a lower rate

And yes some people will see a tax increase and some will see a decrease but the percentage has to be chosen so the net revenue stays the same this makes an unfair tax system fair

After the flat tax is implemented we can get rid of 95% of the bloated IRS and then use that money saved to lower the tax rate even more

 

[Skull Pilot]

Progressive income taxes are based on the subjective marginal utility analysis that basically says idiots in government can decide if you "need" all the money you make or not and that they are justified in taking the money they decide you don't "need"

And you fail right there.

explain

MArginal utility of money is based on the premise that after you have X dollars that every other dollar is worth less to you so therefore you don't need it

No, it's not. It's not that you don't need the money, but that the additional money doesn't carry the same usefulness. Giving $500 to a minimum wage worker gives him more benefit than giving $500 to someone who makes $100,000/year. He might still NEED the extra $500, but the impact will still be lesser than to the min wage worker.

It is known and demonstrable that the higher your income, the lower the percent of your income is spent on food, shelter, health care. So a poorer person who spends 90% of their salary on food, rent, clothes etc will be hurt more by a 15% tax than a richer person who only spends 75% on necesseties (though his necessities are nicer).

And the determination of that usefulness is purely subjective

No, it's not.
If person A is spending 90% of his income on Food, Clothing, Shelter, and Medical expenses, and person B is spending 75% of his incom on those, and then saving 10% and investing 10%, then it is not subjective to say that a 20% tax will more adversely affect person A. That is NOT saying it won't affect B at all, but that the effect will be objectively less severe.

We don't worry about that with any other tax so income should be no different

 

[NYcarbineer]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

Yes. If 20,000 is the standard deduction only income between 20,000 and 50,000 has a rate increase.

Since I labeled it, specifically and intentionally, as 'taxable income', any of that has already been factored out.

 

[dblack]

I disagree with that

If we are going to tax an earned dollar then tax every earned dollar

Well, I respectfully disagree. I think levying an income tax on the working poor is counterproductive.

Then it's no longer a flat tax

no tax is fair. And that's why your OP is fail. That and it's argument is based on facts that don't exist.

But, there are valid argument for a simplified code

I see the need for taxes so if we are going to tax anything then each of those anythings should be taxed at the same rate for everyone

The progressive tax does tax everyone at the same rates, bracket by bracket.

Exactly. Some are more equal than others.

 

[NYcarbineer]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

See what you're failing to factor in is that under a progressive tax like ours no one pays taxes on their entire income do they?

There are all sorts of deductions and giveaways in the system so that guy you say is paying 10% is really paying much less

So the solution is to tax ALL the income and then use a lower rate

And yes some people will see a tax increase and some will see a decrease but the percentage has to be chosen so the net revenue stays the same this makes an unfair tax system fair

After the flat tax is implemented we can get rid of 95% of the bloated IRS and then use that money saved to lower the tax rate even more

If you tax gross income at 15% or even 10% then minimum wage earners get a HUGE tax increase.

 

[Ame®icano]

If you want to argue against imaginary scenarios you need to find some imaginary people to take the other side.

The progressive income tax started... on imaginary scenario, and you lefties still trying to expand your dreams.

 

[Skull Pilot]

You say the rich use attorneys to wring "every advantage" out of a progressive tax. What advantage does a progressive tax have for the rich that a flat tax does not?

In a flat tax system you cannot buy political favoritism to incorporate loop holes that benefit you directly, one would think that would be self evident given the monstrosity that the "progressive" tax system in the U.S. has become. It also doesn't allow for rampant experimentation in social engineering by the morons in Washington that can't even figure out how to balance their check book.

The hell you say. And exemption or a deduction is an exemption or deduction. It has nothing to do with the tax bracket structure. If you want exemptions for your employer sponsored health insurance like we have today, or a deduction for your mortgage interest like we have today, that would also be applied in a flat tax system.

What the tax accountants do is exploit the $1.2 trillion of tax expenditures in the tax code.

And those tax expenditures have NOTHING to do with the fact we have a progressive tax. Those very same tax expenditures would be carried right over into the flat tax system.

Even with a progressive income tax, you could fill out your taxes on a post card today if there were no such thing as tax expenditures.

It's tax expenditures which make our system so inequitable, not progressive taxation.

And without tax expenditures, almost every tax attorney and accountant in the country would be out of business. As would legions and legions of lobbyists.

There is no such thing as a "tax expenditure" it's a fairy tale invented by people that think government has rightful claim to the entirety of every citizens income, thus your entire premise is invalid.

Tax expenditures are very real. They are a means for redistributing wealth up the income ladder. They are theft. They take from one taxpayer and give to another. I have demonstrated this countless times.

Income redistribution is not illegal, nor theft. It is very bad policy.

However, the estate tax, or not allowing generational accumulation of wealth from capital rather than increased production of goods or services, is not redistribution that takes from a citizen who earned money simply to give to a citizen who hasn't earned money.

I disagree with that

If we are going to tax an earned dollar then tax every earned dollar

Well, I respectfully disagree. I think levying an income tax on the working poor is counterproductive.

Then it's no longer a flat tax

no tax is fair. And that's why your OP is fail. That and it's argument is based on facts that don't exist.

But, there are valid argument for a simplified code

I see the need for taxes so if we are going to tax anything then each of those anythings should be taxed at the same rate for everyone

The progressive tax does tax everyone at the same rates, bracket by bracket.

Not the point but keep trying

I have said that why is one earned dollar different from another other than the fact that some politician says it is?

If we are going to tax an earned dollar then ALL earned dollars should be taxed the same they aren't now

 

[Skull Pilot]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

See what you're failing to factor in is that under a progressive tax like ours no one pays taxes on their entire income do they?

There are all sorts of deductions and giveaways in the system so that guy you say is paying 10% is really paying much less

So the solution is to tax ALL the income and then use a lower rate

And yes some people will see a tax increase and some will see a decrease but the percentage has to be chosen so the net revenue stays the same this makes an unfair tax system fair

After the flat tax is implemented we can get rid of 95% of the bloated IRS and then use that money saved to lower the tax rate even more

If you tax gross income at 15% or even 10% then minimum wage earners get a HUGE tax increase.

I already said I don't know what the percentage would have to be but so what if some people finally pay their fair share?

 

[NYcarbineer]

Well, I respectfully disagree. I think levying an income tax on the working poor is counterproductive.

Then it's no longer a flat tax

no tax is fair. And that's why your OP is fail. That and it's argument is based on facts that don't exist.

But, there are valid argument for a simplified code

I see the need for taxes so if we are going to tax anything then each of those anythings should be taxed at the same rate for everyone

The progressive tax does tax everyone at the same rates, bracket by bracket.

Exactly. Some are more equal than others.

The guy making 30,000 a year is not going to pay a 39% rate on the money he made over 100,000 or whatever the figure is,

because he didn't make that money.

Just like the guy who won't pay sales tax on new car if he didn't buy one.

 

[Skull Pilot]

Here's what happens if you go from a progressive to a flat tax, put into easy to understand terms.

Example:

A 2 bracket progressive tax system:

1. Taxable income below 50,000 taxed at 10%
2. Taxable income above 50,000 taxed at 20%

Replace with 15% flat tax:

1. all taxable income below 50,000 gets a 50% tax increase.
2. all taxable income above 50,000 gets a 35% tax cut.

...anyone dispute those calculations?

Yes. If 20,000 is the standard deduction only income between 20,000 and 50,000 has a rate increase.

Since I labeled it, specifically and intentionally, as 'taxable income', any of that has already been factored out.

the flat tax doesn't tax what is defined as "taxable income" in the progressive system it taxes ALL income therefore the rate can be lower but people will still pay near what they are paying now

 

[Wry Catcher]

Well, I respectfully disagree. I think levying an income tax on the working poor is counterproductive.

Then it's no longer a flat tax

no tax is fair. And that's why your OP is fail. That and it's argument is based on facts that don't exist.

But, there are valid argument for a simplified code

I see the need for taxes so if we are going to tax anything then each of those anythings should be taxed at the same rate for everyone

Why? By your logic everyone should be paid the same hourly rate no matter the job they do. The guy who hits 40 home runs and drives in 100 or more should be paid the same as the guy who hits 250 and drives in less than 20?

How do you get that?

Obviously some skills are worth more than others in the market but each dollar paid to the people with those skills are all exactly the same value even though one person might earn more than another

Good point ^^^

However, I was speaking to fairness. Let me give a personal experience example:

I lived in an apt. in SF and worked in an area of blue collar apts. and public housing. I shopped at Cala Food Stores, a number of supermarkets that once were common in The City, one by my home and one by my work.

I noticed the cost of nearly every item in the store by my home was a lower cost than the same item at the Cala Food Store where I worked. me had cars and could go to stores which had better prices, people who needed to walk to the People like

If you want to argue against imaginary scenarios you need to find some imaginary people to take the other side?

A lefty talking about "imaginary" Classic.

Compared to the idiot in the thread who thinks the progressive income tax is Marxism ?

Let's say you own a 4 bedroom home but you and your wife have only 1 kid. You only "need" 2 bedrooms so some moron in your state government can decide that those 2 bedrooms must be taken from you and given to someone else and then inserts 2 people into your home because they "need" those rooms and you don't
What about a vacation home? Surely you don't "need" that if you only use it on occasion.
You and your wife have 2 cars and you have your dream car in the garage you don't need that classic 1969 GTO so why not let the government take it from you to give to someone who does "need" it
I bet that sounds like a great plan to some of you doesn't it?

Marxism 101
Abolishment of private property and only using what you need. Marx didn't appreciate people making/receiving frivolous things that put people in a different class from those who cant afford them.
Such as a 4 bedroom home for 3 people..

EDIT : Credit to fox for reminding me. Progressive taxes are one of the 10 planks of the communist manifesto.

Gee, let's all give three cheers for Plutocracy, when the 1% make all the laws won't this be a great and wonderful utopia?

Isn't that what you say we already have?

I have, when the five members of the Supreme Court legislated that money in politics was free speech, I have written that might be the final nail in the coffin for democracy in America.

 

[dblack]

I may have missed a post or three in this thread, but has anyone actually tried to answer the question yet? If it makes sense to tax higher incomes at a higher rate, why not makes sales tax and property taxes progressive as well?

 

[NYcarbineer]

You say the rich use attorneys to wring "every advantage" out of a progressive tax. What advantage does a progressive tax have for the rich that a flat tax does not?

In a flat tax system you cannot buy political favoritism to incorporate loop holes that benefit you directly, one would think that would be self evident given the monstrosity that the "progressive" tax system in the U.S. has become. It also doesn't allow for rampant experimentation in social engineering by the morons in Washington that can't even figure out how to balance their check book.

The hell you say. And exemption or a deduction is an exemption or deduction. It has nothing to do with the tax bracket structure. If you want exemptions for your employer sponsored health insurance like we have today, or a deduction for your mortgage interest like we have today, that would also be applied in a flat tax system.

What the tax accountants do is exploit the $1.2 trillion of tax expenditures in the tax code.

And those tax expenditures have NOTHING to do with the fact we have a progressive tax. Those very same tax expenditures would be carried right over into the flat tax system.

Even with a progressive income tax, you could fill out your taxes on a post card today if there were no such thing as tax expenditures.

It's tax expenditures which make our system so inequitable, not progressive taxation.

And without tax expenditures, almost every tax attorney and accountant in the country would be out of business. As would legions and legions of lobbyists.

There is no such thing as a "tax expenditure" it's a fairy tale invented by people that think government has rightful claim to the entirety of every citizens income, thus your entire premise is invalid.

Tax expenditures are very real. They are a means for redistributing wealth up the income ladder. They are theft. They take from one taxpayer and give to another. I have demonstrated this countless times.

Income redistribution is not illegal, nor theft. It is very bad policy.

However, the estate tax, or not allowing generational accumulation of wealth from capital rather than increased production of goods or services, is not redistribution that takes from a citizen who earned money simply to give to a citizen who hasn't earned money.

Just because government can pass a law

Well, I respectfully disagree. I think levying an income tax on the working poor is counterproductive.

Then it's no longer a flat tax

no tax is fair. And that's why your OP is fail. That and it's argument is based on facts that don't exist.

But, there are valid argument for a simplified code

I see the need for taxes so if we are going to tax anything then each of those anythings should be taxed at the same rate for everyone

The progressive tax does tax everyone at the same rates, bracket by bracket.

Not the point but keep trying

I have said that why is one earned dollar different from another other than the fact that some politician says it is?

If we are going to tax an earned dollar then ALL earned dollars should be taxed the same they aren't now

We have a government of the People. Does your plan include a way of getting rid of that, too?