Tax the Rich

yep i was right you don't understand what he is saying

 

Log in or Sign up to hide all adverts.

I think you may be underestimating the amount of money and the things people are ready to go through to keep it

Please Register or Log in to view the hidden image!

After all, you are talking about the total amount of income taxes in the US, and although I do not have exact numbers, it will be a huge amount of money, just required to be given away. The highest tax rates are currently around 35%, leaving 65% to the taxpayer. If you doubled the tax rate, it would only leave 30% of the income to the taxpayer, and that, I think, would be too little for a lot of people.

Oh thank you for saying that Mr. Useless-Post-Man.

 

Log in or Sign up to hide all adverts.

No tax system is perfect.

In essence, the much maligned Poll Tax was the fairest tax. Everyone paid the same amount. You can't get fairer than that!

Why should one elderly old woman pay as much tax as a family of 6 living next door?

 

Log in or Sign up to hide all adverts.

Why should a family of 6 pay as little tax as one elderly old woman living next door?

 

Amen.

 

Ever heard of "inheritance tax?"

 

First of all, I wasn't "bitching." Second, I wasn't making any statement about wanting 99% taxes on the wealthy (you'd have to be hysterical to read any such thing into my post). My point was that taxes generate "disutility" and that, in my mind a perfectly "fair" tax would generate roughly comparable levels of disutility in everyone. Because of the law of diminishing marginal utility, though, you if you inflict pain X on the guy making $50K which you impose a $15,000 tax on him (a 30% tax), then in order to inflict something roughly akin to disutility X on someone earning $1 million, that tax rate will need to be much, much greater than 30%.

In other words "fair" to me means we set up a system where taxes are imposed only to the extent necessary to pay for essential government programs (as determined by the legislature) and levied in such a way that they are expected to cause everyone roughly equal levels of pain. Under that definition of fairness, and because of the law of diminishing marginal utility, only progressive tax schemes can be "fair" under my interpretation. Looking at the absolute amounts they pay is irrelevant, because they two taxpayers are likely to value money very differently.

Your point that flat taxes have a certain progressivity built into them is well taken, but I would suggest that at a deep level, it's because even flat tax advocates realize that only progressive taxes are fair. In effect the level of progressivity that is ideal would depend on the rate at which the marginal utility of money decreases at varying levels of income. In your flat tax example, the level of progressivity is very limited at higher incomes. The effective rate is 19.6% if you earn $1MM a year, and just 19.9996%—a scant 0.3996% difference—if you earn 100 times that amount. My intuition is that this would be "too flat" to account for the diminishing marginal utility of income at those levels. (Still, it may be perfectly appropriate to capture the difference between an income of $50K (effective tax at a 12% rate) and $100K (effective tax at a 16% rate).)

In any event, I am all for simplifying the tax code, but a simplified tax code need not be "flat", nor would flattening the tax rate structure make the code much simpler by itself (it would simplify Section 1 of the Internal Revenue Code, but only Section 1).

 

inheritance? tell me, you oppose racism because people are born into a race, they have no choice over it and therefore it promotes inequality, right? well is being born into wealth not the same thing? if you allow inheritance then why not other forms of discrimination?

 

Yup inheritance is the reason for a LOT of inequality in the world. Really, an ideal state would find a way for each person to have to make their own way in the world. Of course this is impossible...

 

What rate then? Apparently 99% is too high, but 30% is much, much too low. So what rate would, in your opinion, be fair?

In my opinion, the purpose of not taxing the first 10 or 20k of your salary is to not take money from people just barely making enough to survive. Not taxing everyone's first 20k makes it fair. And I also believe nothing is more fair than everyone paying the same %.

Also, how would eliminating all deductions and instituting a flat tax on all income not be simpler?

 

I think the reason you allow inheritance is not for the inheritors, as it is effectively a form of positive discrimination in their favor that greatly skews, in their favor, the opportunities available to them. (Paris Hilton, if you're lurking, I am looking at you here.)

I think the reason we allow it is because we have a tradition of respecting people's private property rights, and if someone wants to give property away, or spend it on philanthropy, or on a wild pre-death party followed by a kick-ass funeral, or have it buried with him, we view it as being his right to choose what to do with his property. If he decides he wants to leave it for the people he loves, so he can be sure they'll have the opportunity to live a certain sort of lifestyle, so be it. It's an understandable impulse, and been a part of the culture for so long that abandoning it would be difficult. certainly that impulse is absolutely understandable when it comes to one's spouse and dependents.

That being said, if we were to ever abandon it, I'm sure it would be on the grounds that it's decidedly unmeritocratic to inherit substantial wealth. Assuming there were a reasonable carve out for spouses, and some ability to provide for dependents until they are ready to support themselves, it would probably be a boon for society overall if everyone had to earn their own keep rather than wait to sponge off the folks post mortem.

 

On a side note, there are some countries (Finland, for example) where fines for minor crimes like traffic violations scale according to one's income. So a person who makes $25k/year might only get a speeding ticket for $100, while a person who makes $500k/year might be ticketed $2000 for the same violation. Whether or not that's fair is a subject of some controversy, since arguably the marginal utility of $100 for the person who only makes $25k might be much higher than the marginal utility of $2000 for the person who makes $500k.

 

Well said.

 

Eliminating deductions is not part and parcel of the tax being "flat." You can eliminate deductions and keep the rate wildly progressive. As I said, simplification is not a bad thing.

As for specific percentages I do not personally know. i would want to conduct very intricate econometric/psychometric studies before I would be ready to declare my personal vision of fairness (and even then compromises between perfect fairness and practicality would need to be made, as in theory there should be different tax rates for every different income, from $ up to $100 billion and beyond).

The other problem (actually the primary problem) with setting rates, apart from spreading the pain of taxes equally is getting enough revenue to run the government. If I determine that an 20% effective tax on the Bobs of the world and a 45% on the Sallys of the world inflicts comparable pain on both groups, but those rates leave me collecting too much or too little tax to pay for the operations of government, then it's back to the drawing board on rates.

My tax policy goals are really as follows (i) raise the revenue needed to run government, then (ii) spread the pain around so that everyone bears the burden roughly equally, then (iii) make it simple, to further reduce the pain.

On rates, my intuition having give from very poor to very wealthy and having seen the changes it's brought in my valuation of money, is that it would be very progressive. Flat taxes have always struck me as a way for the very wealthy to increase their overall satisfaction, because they know that flat rates will result in their paying what will seem to them to be trivial amounts of income as tax.

As for your personal, equal-rates, view of fairness, there's no way for me to gainsay it, but it does by its very nature suggest that the less money you make, the more painful paying taxes will be and the richer you are, the less painful it will be, because of the law of diminishing marginal utility.

 

Personally, I think the rates are fair, deductions and credits sound, and their is no reason to change the tax code or IRS regs. Lot of policy goes into income tax, and Congress will never let loose of its influence over society by a flat tax. In addition, a flat tax does not account for diminishing capital returns of a higher income bracket. So income tax, like the death tax, is a capitalistic means of spreading the wealth, and getting more money into the marketplace. Flat tax would cause those who are most wealthy to hoard, and the middle class to scrape by and be happy with the occasional marginal raise or bonus check.

You should audit a tax law course; it's truly unbelievable how much policy goes into shelters, deductions, capital gains, etc.

 

Not progressive enough.

 

This is what the liberals want, instead of a flat tax they want to tax to rich so that the rich pay for the poor, they say stealing money from the rich and giving to the poor is ok, they want to government to pay for everything, expand welfare, give free medicare, etc...like a socialist society

Why not have a fair tax, get rid of the IRS and income tax? Thats the best system, it doesn't jeapardize anyone

 

Oh, I know that Congress loves to micromanage our lives thru the incentives and disincentives it builds into the tax code. And I agree they would be loath to give up that power.

But I think their meddling distorts and disrupts the economy and causes people to behave in irrational ways. Not to mention the billions of dollars US taxpayers spend every year trying to comply with the complex tax code and avoid paying taxes.

Going to a flat tax would greatly decrease Congress' power to meddle in our lives (which would be great), and would free up billions of dollars now wasted on compliance with the insanely complex tax code.

 

A progressive tax is the fairest. The rich want to benefit from society, but they don't want to give anything back, it's human nature, I understand it, but it's not their money. I guarantee if the government didn't pay for roads, schools, courts, police, firefighters, the military...there would be little opportunity to get rich.

 

Why should a very productive and able individual be penalized more than someone who gets a big check from daddy?