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Old 01-10-2019, 06:32 PM
 
Location: Aurora Denveralis
4,554 posts, read 1,512,692 times
Reputation: 6528

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Quote:
Originally Posted by jackmccullough View Post
You're just wrong. As you said in Post #4, a tax that charges a higher rate to people with lower income, as I described, is the definition of a regressive tax.
You are absolutely, 100% wrong:
Quote:
What is a Regressive Tax
A regressive tax is a tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners. It is in opposition to a progressive tax, which takes a larger percentage from high-income earners.

— Investopedia
The two are not mirror image implementations, as you stubbornly insist. They are tax models that have opposite effects.
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Old 01-10-2019, 07:25 PM
 
153 posts, read 23,337 times
Reputation: 209
Quote:
Originally Posted by Quietude View Post
We're beyond Econ 101 here, where all problems fit on a whiteboard.
Actually, we're in high school economics here. Nothing interesting in the thread so far.
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Old 01-10-2019, 07:29 PM
 
153 posts, read 23,337 times
Reputation: 209
Quote:
Originally Posted by jackmccullough View Post
If you're talking about a flat income tax there is an argument that it is not regressive, although I think it's clear that the various "fair tax" and "flat tax" schemes are actually engineered to put a disproportionate burden on lower income people.
Do you mean the lower income people who've been given a free pass on federal income taxes?

The 47% who unfairly pay no federal income tax whatsoever?

No, fair tax & flat tax systems are not engineered to put a disproportionate burden on lower income people. That's just a talking point of the deranged progressive SJWs.
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Old 01-10-2019, 07:34 PM
 
153 posts, read 23,337 times
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Quote:
Originally Posted by jnojr View Post
How so?

Let's take an income tax. Let's say you make $100K per year, and I make $50K, and we have a 10% flat tax. You pay $10K and have $90K left. I pay $5K and have $45K left. How, precisely, am I "disproportionately affected"... other than my envy and resentment of the fact that you still have twice as much as me, despite your paying twice as much in taxes?

You are not disproportionately affected. But you already know that.
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Old 01-10-2019, 08:13 PM
 
2,364 posts, read 1,503,832 times
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Quote:
Originally Posted by jnojr View Post
How so?

Let's take an income tax. Let's say you make $100K per year, and I make $50K, and we have a 10% flat tax. You pay $10K and have $90K left. I pay $5K and have $45K left. How, precisely, am I "disproportionately affected"... other than my envy and resentment of the fact that you still have twice as much as me, despite your paying twice as much in taxes?
Because the perception of the value of each additional dollar we have is effected by the amount of dollars we already have. It should be pretty easy to see that $5,000 to someone making $100,000 maybe as simple as them giving up a vacation or not eating out as often. Whereas, $5,000 to someone making 50k, could be the difference between not being able to afford gas or school clothes for their children. It’s why the federal income tax system isn’t flat. There was never a chance it was going to be.

The positive effect on a person getting more income is huge in the lower 20 percentiles of income. By about the 80th percentile, the effect of getting more money on your happiness begins to wear thin so as to be irrelevent. It’s why people start to use their money to buy back time with housecleaners, lawn care, and services like Shipt. It’s why your risk tolerance changes. For example, someone who has $400,000 in the bank might take a 1 time bet to either win or lose 25k at the flip of a coin. Would someone who only makes 25,000 in a year be willing to do the same? $25,000 has two completely different meanings to these two sets of people.

It’s more than just “envy”. It’s the marginal utility of money.
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Old 01-10-2019, 10:47 PM
Status: "Loving the hilarity of CD." (set 52 minutes ago)
 
5,390 posts, read 2,502,925 times
Reputation: 5280
Quote:
Originally Posted by Quietude View Post
You are absolutely, 100% wrong:

The two are not mirror image implementations, as you stubbornly insist. They are tax models that have opposite effects.
As I stated on the first page of the thread, there has been some definition creep over time. Investopedia is guilty of it as well.

Look, I can come up with some internet sources that agree with me as well.

From the Economic Times:

Quote:
Definition of 'Regressive Tax'

Definition: Under this system of taxation, the tax rate diminishes as the taxable amount increases. In other words, there is an inverse relationship between the tax rate and taxable income. The rate of taxation decreases as the income of taxpayers increases.
From CFI (Corporate Finance Institute):

Quote:
What is a Regressive Tax?
A regressive tax is a tax applied in a way that the tax rate decreases with the increase of the taxpayer’s income.
Words have meaning. The only way “regressive” means what you claim is if you change the definition of the word.

If “regressive tax” really means “disparate impact,” what do you call a tax where the rate decreases as the base upon which the tax is assessed increases?
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Old 01-10-2019, 11:12 PM
 
Location: Aurora Denveralis
4,554 posts, read 1,512,692 times
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Quote:
Originally Posted by RationalExpectations View Post
Actually, we're in high school economics here. Nothing interesting in the thread so far.
Econ hasn't been on primary HS curricula in forever. We have to start somewhere.

Quote:
Originally Posted by RationalExpectations View Post
The 47% who unfairly pay no federal income tax whatsoever?
Ah. Your dogma just ate your homework, so you're excused.
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Old 01-10-2019, 11:21 PM
 
Location: Holly Neighborhood, AUSTINtx
3,487 posts, read 5,162,690 times
Reputation: 2066
I did read every reply to my original post and have come to the conclusion that whether a tax is deemed progressive, regressive or flat only relates to the rate curve and what is being taxed and not extraneous factors, e.g. the income/wealth of a person versus what property tax rate they pay. Wiki seems to agree except that they refer to flat taxes as proportional:

  • A progressive tax is a tax imposed so that the effective tax rate increases as the amount to which the rate is applied increases.
  • The opposite of a progressive tax is a regressive tax, where the effective tax rate decreases as the amount to which the rate is applied increases. This effect is commonly produced where means testing is used to withdraw tax allowances or state benefits.
  • In between is a proportional tax, where the effective tax rate is fixed, while the amount to which the rate is applied increases.
You can still have steeply progressive or regressive taxes versus more gradual ones, but that is probably a topic for another thread.
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Old 01-10-2019, 11:29 PM
 
Location: Aurora Denveralis
4,554 posts, read 1,512,692 times
Reputation: 6528
I wouldn't argue any of those except in details except to say the whole debate is subject to semantic interpretation, and defining only a base tax model is only one facet of many, even in "simple" taxes like sales tax.
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Old Yesterday, 02:34 AM
 
Location: Cebu, Philippines
2,896 posts, read 1,054,402 times
Reputation: 5551
Depends. If every household gets a $100,000 exemption and pays a flat percentage rate after that, I'd call it nicely progressive.
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