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Let's do the math. Arbitrary Cost of Living of 42k for a family of six with a mortgage and two cars.
10% tax rate.
50*.9 - 42 = 3.
100*.9-42 = 53
Those people are still going to work for the extra money.
No one has ever ever ever quit a job because their taxes were too high. ever.
In your OP, you stated that a flat tax could never be fair unless those earning more paid proportionally more for all goods and services. A couple earning 100K would pay twice as much for everything that a couple earning 50K. That's the pie-in-the-sky idea you floated.
At a 10% flat tax and proportional expenses, the numbers would look like this for our fictional couples:
50*.9 - 42 = 3
100*.9 - 84 = 6
Clearly quitting one job has little downside. Of course, we both know that prices will never work this way. But, how about our couples as the tax code currently exists?
50*1.0 - 42 = 8
100*.8 - 42 = 38
Subtract daycare costs, work clothes, a second car, gas for commuting and how much of that 38 do you think is left at the end of the year? I'd guess all those add up to between 16 and 20k depending on where you live. That leaves 22-18k. If you don't believe that some couples choose to have one spouse quit a job based on those numbers, you'd be wrong. And if their 20% tax burden becomes 25% or 30%, you don't believe that will effect their decisions? People will quit jobs at some threshold of taxes vs. perceived additional benefit. And that will effect revenue, which will cause taxes to need to rise, which will cause people to quit jobs......and on and on it goes.
Taxes should not be based on behavior. They are for funding the government structure. How much people earn and what they can afford should not be part of the discussion. If you are cutting it close between affordability and taxes - work hard to earn more money if you can.
I am pretty much for a flat tax - but if there was a proposal for a rate above and below the poverty line, I would be OK with it.
Everyone should have to pay some amount into the system.
In your OP, you stated that a flat tax could never be fair unless those earning more paid proportionally more for all goods and services. A couple earning 100K would pay twice as much for everything that a couple earning 50K. That's the pie-in-the-sky idea you floated.
I'm not the OP, but mistakes happen. The response I posted is in terms of why flat-taxes don't work. The proportionality of cost that was presented does make paint a clear picture of what it "feels" like to have\not have X amount of money. The OP was saying that someone making 100x your amount of money buying a gallon of milk at $3 (which is what you pay and that millionaire pays) would be like you paying for it at $0.30 for the gallon. A pittance in your overall payment.
However, costs don't scale--i agree that's pie-in-the-sky, and because costs don't scale, taxes need to. Not proportionally, but progressively.
At a 10% flat tax and proportional expenses, the numbers would look like this for our fictional couples:
50*.9 - 42 = 3
100*.9 - 84 = 6
Clearly quitting one job has little downside. Of course, we both know that prices will never work this way. But, how about our couples as the tax code currently exists?
50*1.0 - 42 = 8
100*.8 - 42 = 38
Quote:
Subtract daycare costs, work clothes, a second car, gas for commuting and how much of that 38 do you think is left at the end of the year? I'd guess all those add up to between 16 and 20k depending on where you live. That leaves 22-18k. If you don't believe that some couples choose to have one spouse quit a job based on those numbers, you'd be wrong. And if their 20% tax burden becomes 25% or 30%, you don't believe that will effect their decisions? People will quit jobs at some threshold of taxes vs. perceived additional benefit. And that will effect revenue, which will cause taxes to need to rise, which will cause people to quit jobs......and on and on it goes.
Okay, you've got some incredibly fuzzy math here.
Why are you multiplying 50k by 0% tax rate?
Why are you multiplying 100k by 20% tax rate?
If you really want to have a discussion about how much more a family makes, we can break out some charts and do the research. You'd be rather pessimistic to say a couple costs an additional 20k for a second job. That means someone is buying an entire car in one year. 5k for a car, 5k for the day-care et al. You're still making working-poor, lower-middle class income--all of it discretionary income--because all of your other needs are already filled by the income of two people there.
So, 20k of discretionary income versus 8.
Like I said, nobody here is quitting their job because of high taxes. Nobody ever has taken a lower-paying job because they had too much being taken out in taxes, ever.
Taxes should not be based on behavior. They are for funding the government structure. How much people earn and what they can afford should not be part of the discussion. If you are cutting it close between affordability and taxes - work hard to earn more money if you can.
I am pretty much for a flat tax - but if there was a proposal for a rate above and below the poverty line, I would be OK with it.
Everyone should have to pay some amount into the system.
Unless you're not working, you pay into the system--and that doesn't include state\local taxes either, which include property taxes and sales taxes.
Based on your idea of taxing people in exact proportion to their earnings, why would anyone in their right mind want a high paying job? Jobs with higher pay come with additional soft costs: more working hours, loss of personal and/ or family time, increased stress, larger student loans. Why would anyone want to be, say a surgeon, if their disposable income (after basic living expenses) would be the same as a Walmart greeter?
The ASSumtion that those who succeed will continue to work hard without rewards for their hard work is incorrect. I'm not going to bust my butt so someone else can have more. Forget it. I'd rather kick back and just earn less.
I'm not the OP, but mistakes happen. The response I posted is in terms of why flat-taxes don't work. The proportionality of cost that was presented does make paint a clear picture of what it "feels" like to have\not have X amount of money. The OP was saying that someone making 100x your amount of money buying a gallon of milk at $3 (which is what you pay and that millionaire pays) would be like you paying for it at $0.30 for the gallon. A pittance in your overall payment.
However, costs don't scale--i agree that's pie-in-the-sky, and because costs don't scale, taxes need to. Not proportionally, but progressively.
At a 10% flat tax and proportional expenses, the numbers would look like this for our fictional couples:
50*.9 - 42 = 3
100*.9 - 84 = 6
Clearly quitting one job has little downside. Of course, we both know that prices will never work this way. But, how about our couples as the tax code currently exists?
50*1.0 - 42 = 8
100*.8 - 42 = 38
Okay, you've got some incredibly fuzzy math here.
Why are you multiplying 50k by 0% tax rate?
Why are you multiplying 100k by 20% tax rate?
If you really want to have a discussion about how much more a family makes, we can break out some charts and do the research. You'd be rather pessimistic to say a couple costs an additional 20k for a second job. That means someone is buying an entire car in one year. 5k for a car, 5k for the day-care et al. You're still making working-poor, lower-middle class income--all of it discretionary income--because all of your other needs are already filled by the income of two people there.
So, 20k of discretionary income versus 8.
Like I said, nobody here is quitting their job because of high taxes. Nobody ever has taken a lower-paying job because they had too much being taken out in taxes, ever.
I looked up the average percent of Federal taxes paid for those 2 incomes. 0 and 20 were the result. And I looked up the yearly average cost of day care for 2 children. It's $10,400. Add in a car payment of $1800 a year plus $500 for insurance and another $2500 for gas (1 tank a week) and maintenance and you're already up to $15,200.
And while nobody may specifically say they're quitting due to high taxes, many do say they're quitting because the amount they take home after taxes and working expenses make the difference not worth It. And believe it or not, some people have the good sense to live below their means making 2 incomes nice, but not necessary. Those smart folks can ditch a job at any time.
The ASSumtion that those who succeed will continue to work hard without rewards for their hard work is incorrect. I'm not going to bust my butt so someone else can have more. Forget it. I'd rather kick back and just earn less.
I looked up the average percent of Federal taxes paid for those 2 incomes. 0 and 20 were the result.
We were discussing why flat-taxes don't work. I think you're trying to argue something that isn't be proposed. Proportional taxes only makes sense if you were to have proportional costs. But because we don't have proportional costs, and we apply proportional taxes, you can see what happens. (Which is what the reverse-proportional cost showed--the .38 gallon of milk, $500 car, etc).
Which actually makes your argument even more ridiculous...
Quote:
And I looked up the yearly average cost of day care for 2 children. It's $10,400.
Add in a car payment of $1800 a year plus $500 for insurance and another $2500 for gas (1 tank a week) and maintenance and you're already up to $15,200.
And while nobody may specifically say they're quitting due to high taxes, many do say they're quitting because the amount they take home after taxes and working expenses make the difference not worth It. And believe it or not, some people have the good sense to live below their means making 2 incomes nice, but not necessary. Those smart folks can ditch a job at any time.[/quote]
50k is actually representative of middle-class incomes per person. I believe median household income is that much, which means you're talking about two people making 25k, or more likely 30k+20k.
But let's get back to the point: Flat taxes don't work here. They're supposed to be progressive.
Based on your idea of taxing people in exact proportion to their earnings, why would anyone in their right mind want a high paying job? Jobs with higher pay come with additional soft costs: more working hours, loss of personal and/ or family time, increased stress, larger student loans. Why would anyone want to be, say a surgeon, if their disposable income (after basic living expenses) would be the same as a Walmart greeter?
Jobs with higher pay do NOT come with any of that stuff. Pay and that stuff is completely unrelated. Try working as a police officer or an enlisted marine stationed in Afghanistan or a therapist who works with the criminally insane, none of those jobs pays well (and are all jobs that friends of mine have) and they are all jobs which essentially eliminate free time, increase stress a ton and they carry many other problems. However, I have a friend whose father is one of the 200 richest people in America and she "earns" about $5,000,000 a year as an employee of his company. She has no stress and essentially does not have to work at all. Meanwhile, my girlfriend's mother is a hospice nurse and she works crazy hours and gets very little pay...her husband sells mid-level houses (350k-900k) and has a basically stress-free working life and he earns a much better living.
I don't believe the OP is right, but the idea that pay is in any way related to the stress or difficulty of a job is very far-fetched. My friends who are teachers are far more stressed than the people I work with in Finance who are paid far more. In fact, the extra pay makes everything easier and therefore, less stressful.
We were discussing why flat-taxes don't work. I think you're trying to argue something that isn't be proposed. Proportional taxes only makes sense if you were to have proportional costs. But because we don't have proportional costs, and we apply proportional taxes, you can see what happens. (Which is what the reverse-proportional cost showed--the .38 gallon of milk, $500 car, etc).
Which actually makes your argument even more ridiculous...
Add in a car payment of $1800 a year plus $500 for insurance and another $2500 for gas (1 tank a week) and maintenance and you're already up to $15,200.
And while nobody may specifically say they're quitting due to high taxes, many do say they're quitting because the amount they take home after taxes and working expenses make the difference not worth It. And believe it or not, some people have the good sense to live below their means making 2 incomes nice, but not necessary. Those smart folks can ditch a job at any time.
50k is actually representative of middle-class incomes per person. I believe median household income is that much, which means you're talking about two people making 25k, or more likely 30k+20k.
But let's get back to the point: Flat taxes don't work here. They're supposed to be progressive.[/quote]
The example was 2 couples where both partners work. One couple makes 25k each and the other makes 50k each. I never said the couple making 50k total would consider dropping a job. Don't know where you got that. What I did say is that the couple making 100k, could find dropping a job to be a choice they would make. Not solely based on their taxes, but based on their taxes and their expenses directly related to the second job and the soft costs associated with having both partners work. As taxes rise, the amount of benefit gained from the second job falls.
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The ASSumtion that those who succeed will continue to work hard without rewards for their hard work is incorrect. I'm not going to bust my butt so someone else can have more. Forget it. I'd rather kick back and just earn less.
