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This is the typical counter-argument, and it SOUNDS like the person making a million a year is paying so much more (and of course in actual dollars he is). However, what it ignores is the fact that $2,500 to someone making $25,000 a year MEANS MORE (in terms of earning power, being able to afford "normal" things like living in a decent neighborhood, getting married, having kids, etc.) than does $100,000 to someone making $1,000,000 a year -- who is left with $900,000. (In other words, your kind of argument assumes that $1 has the same meaning to someone who is poor or working-class and someone who is much wealthier -- but that's not the case.)
'A regressive tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay. Though true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume, and travel.'
I hope that we do in fact go down the fiscal slope so that tax rates can AT LEAST go back to the anemic Clinton era levels.
'A regressive tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay. Though true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume, and travel.'
I hope that we do in fact go down the fiscal slope so that tax rates can AT LEAST go back to the anemic Clinton era levels.
It might just be the incentive to finally make a flat tax reality...
First I can't get into the head of someone to know how much they need without making a judgement call.
My criteria on what they need or what a dollar means to them is not relevant.
But Ultrarunner, you don't HAVE to "get inside someone's head" to see what a dollar means to them. This isn't personal, it's about economics. In terms of living in a decent neighborhood, being able to afford necessities (not luxuries) of everyday life, being able to get married and maybe even afford a child, etc., a dollar means more to someone making less money than it does to someone making a lot.
So to pay at the "same rate" is NOT "inherently fair" (even though it SOUNDS like it is!). A flat tax would normally be WAY more advantageous to those who make more money, because they can not only afford the "basics," they have a lot of expendable income on top of that. And BTW I'm not knocking them -- I would bet that I am in the top 3-5% of female income-earners my age, simply because of the type of job I have. But I recognize that it would definitely be advantageous to me (but NOT "inherently fair") to have to pay the same flat tax that someone making half my income would pay. (And I grew up in a working-class home -- my dad was enlisted Air Force and my mom worked as a waitress, factory worker, and food service worker for almost all the time I was growing up. So I am not speaking hypothetically when I say that a dollar means more to working-class people than it does to millionaires.)
Quote:
Originally Posted by artisan4
You are correct, Karen-a flat tax is regressive.
Yep. I don't know why people find this so hard to understand. You can disagree on whether a regressive tax (or a progressive tax) is fair or not, but a flat tax is regressive. (But it SOUNDS so fair, doesn't it? If only!!)
I think the part where I said the Flat Tax would have a threshold might have been missed.
A person born and raised in Tennessee could easily cover the basis with a fraction of the income as someone born and raised in New York.
People are different, we all have unique aspirations.
I remember taking my father to my employer's home for a holiday gathering a few years ago... Dad couldn't say enough negative things about the home... perched high on a cliff with stairs and steps going everywhere and parking a nightmare...
The point is my father wouldn't have lived in that home even if it was given to him for free... other co-workers said it was a dream home.
At one time I managed a number of Section 8 rentals... without fail, each home had the expensive cable package and most family members had cell phones... several tenants on Section 8 drove new cars... not under the table, it was all above board... as were the flat screen TV's in the living rooms
My dollars mean too much to waste... I have never lived in a home with cable or satellite... I have rabbit ears on my 25 year old Zenith.
Never owned a new car and still have the one I bought in school for $800...
Just because someone has more money doesn't mean "THEY" value it any less than someone that has less. Bank Robbers Bonney and Clyde enjoyed celebrity fame because they only robbed from Banks and Well to Do folks... I hope this isn't how people believe taxation should work?
One of the tenants worked part time as a bus driver... she turned down full time employment at 3 times what she was earning as part time... she turned it down because it meant she would no longer be eligible for the assistance programs... including Section 8.
I posted before and it bears repeating... there are many, some people I know, that have never filed a tax return in their life... no concept what April 15th is all about.
Is it fair that entire segments of the population are deprived from contributing or at least experiencing filing tax returns?
Assistance can be generational... knew quite a few families where no one ever held a job... typical scenario would be a teenage mom has a child and that child has a child and so on... too many are Grandmothers at age 32.
Is it fair that entire segments of the population are deprived from contributing or at least experiencing filing tax returns?
Assistance can be generational... knew quite a few families where no one ever held a job... typical scenario would be a teenage mom has a child and that child has a child and so on... too many are Grandmothers at age 32.
A flat tax would put everyone on the same page...
You can accomplish the same thing by extending tax relief based on WORK. I think someone earning N dollars with X hours of work should pay more tax than someone earning N dollars with 2X hours of work. Done right, you can effectively tax non-work and reward work. This is why I believe employers should be required to list employee hours worked on W-2 forms.
It might just be the incentive to finally make a flat tax reality...
One can only hope...
A flat tax would enable the United States to attain the Third World status that the Republican Party has sought for us for 37 years, for sure. If your party keeps having pro-poverty successes such as that in Michigan, you might be able to economically bomb the middle and working classes 'back to the Stone Age'. Quite an acheivement.
A flat tax would enable the United States to attain the Third World status that the Republican Party has sought for us for 37 years, for sure. If your party keeps having pro-poverty successes such as that in Michigan, you might be able to economically bomb the middle and working classes 'back to the Stone Age'. Quite an acheivement.
How is closing loopholes and eliminating deductions and having a threshold before the flat-tax kicks in a problem?
Point of clarification that bears repeating...
I am not now or have I ever been a member of the Republican or Democrat parties...
If I had a party affiliation... it would be somewhere in the Libertarian camp... Live and Let Live...
I won't tell you what to do and would hope to be treated the same.
I guess we will just agree to disagree.
For the record... I have worked in a Union Shop. It was a tool and machine shop and we were building components for the Space Shuttle. Labor and management got along and many of the co-workers had more than 25 years there. The boss was the kind of guy that would open the shop on Saturday mornings to let employee's work on projects... things like go-carts for the kids or custom automotive stuff.
What I/we didn't like is the Union called a strike and we had to walk out and nobody in that shop wanted to go out on strike...
Right now, I work in a Hospital... the nurses have called dozens of strikes in the last 18 months... mostly one day strikes and then they are locked out for a week.
I've been in a union for years and we have never gone on strike-for the reason you mention, good, intelligent relations between labour and management. Some organizations are mis-managed and labour has to make a correction so that management is forced to behave in a civilized manner. I firmly believe in checks and balances. I'm glad the nurses have that tool available to fight for their rights.
There certainly is a strain of libertarianism in the United States, far more than in Canada, where I am from, and I have talked with some Americans who feel as you do. I am not a libertarian; I believe in the strength of unity and working together for a health society (or company, etc). I remember the 1960's, when my family members had solid union jobs and the economy was healthy and the income tax rate on the upper class was 70%. I think that the country lost its way by voting in people who reduced taxes for the rich while spending wildly on the military.
Yes, we agree to disagree. I have not told you what to do; I assumed we were all discussing the matter (taxation). A flat/regressive tax would be disasterous for the nation and further exacerbate the income inequality the OP is concerned about.
I like the idea of a flat tax... with a low threshold.
You don't want a Flat Tax. It would be grotesquely unfair.
If the cost-of-living was uniform throughout the US, then a Flat Tax would make sense, but the cost-of-living is not uniform.
Probably the most difficult thing is to get people to understand that Economics uses math, but it is not math.
In standard Applied Mathematics, $1 = $1. But in Applied Economics, $1 might equal $0.60 or $1 might equal $1.35, and in fact, more often than not, $1 will equal almost everything except $1. Seriously, in Economics, $1 is almost never equal to $1, although it might come very close: $1 = $0.997
What's the median income in the US? About $45,000 or so? $45,000 in Los Angeles, California equals $45,000 in Cincinnati, Ohio, right? Nope. $45,000 in Cincinnati is equal to $65,600 in Los Angeles. And then, what you're going to levy a Flat Tax on both of them? How is that "fair," because the person in Cincinnati is getting $20,600 tax-free.
So, you live in Los Angeles on salary or wages of $65,000/year and you're offered a job in Cincinnati at $50,000/year.
That's a $15,000 annual pay cut, right? Wrong, you're actually getting a pay raise.
Quit your $65,000/year job in Los Angeles and take a $50,000/year job in Cincinnati and you won't miss a beat --- your life-style, quality of life and standard of living will in no way, shape or form be negatively impacted. You will do all the things you used to do.....and more....because now you have a few $1,000 extra to play with, which means you can buy more clothes, go to the cinema show more often, eat out more often, burn up more gasoline, party more often, attend more sporting events and concerts.
What does that say about your present tax system?
It is fairer than any Flat Tax.
At least with your present system you can take some combination of income deductions and tax credits that will at least in part take into account the cost-of-living.
Quote:
Originally Posted by Ultrarunner
Everybody has to have skin in the game... the more you earn the more dollars you pay... everyone pays at the same rate so it is inherently fair and takes the guesswork out of income tax...
Okay, then what you want is a federal sales tax, a VAT or whatever you want to call it.
That automatically takes into account the cost-of-living and how it varies so dramatically across the US.
It always amuses me these people scream about fair taxation, while there are Millions of American households skating like fat rats and not paying their "fair share."
Nowhere is this more apparent in defining what is, um, you know, "rich."
Is $150,000 "rich?"
You live in Cincinnati earning $150,000 and you want to move to the NYC/New Jersey area.
You want to maintain your current standard of living. What salary will you need?
If you ain't getting job offers for $375,000 then don't put your house up for sale.
Here we have a case where $150,000 = $375,000. And also note that $60,000 = $150,000. I ask that because some people might think $150,000 is "rich" -- and it just might be -- depending on where in the US you are living.
Some of you might want to re-think your position on what is "rich" and also this idea of Flat Taxes.
At least with your present system you can take some combination of income deductions and tax credits that will at least in part take into account the cost-of-living.
This is the argument being used to say the 250k or alternative minimum tax penalizes people living in high cost areas... like New York City and San Francisco.
It does not seem to be getting much traction as the "Cliff" approaches.
The other thing is so much of what I read is how there are too many deductions and credits... actually calling them loopholes that need to be closed.
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