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The same discouraging statistics keep coming up, year after year. And government keeps taxing people for the wrong thing: Levying taxes based on what they earn, instead of on how much government does for each of them. Though it has gone on for decades now, no one has yet been able to explain this nonsensical taxation
As a result, most tax statistics measure taxation by income groups rather than by how much government service people use. Gross disparities cannot help but turn up:
* In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent.
* The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
Did the upper half of taxpayers get 36 times as much government service than the lower half? Why should they pay virtually all the taxes, while the lower half pays nearly none?
It may be hard to measure exactly, but such a huge disparity is flatly impossible.
If some people pay less in taxes than they get from govt, while others pay for more than they get, how can the taxing system possibly be considered "fair"?
On the traditional flat tax proposal, those who pay less than 17% get a tax increase. For anyone making under about 60K as a single individual, you will face a tax increase of some sort. Conversely the rich making millions get a considerable tax cut. One that they don't need as wealth is not spent but accumulated. This is a flaw in the sales tax proposals.
In the sales tax proposals including the FairTax, the lower income individuals and families would pay far more than their fair share as needs are taxed just as wants and luxuries are. An individual making 25K a year, might have to spend 20k of it making their taxable income 80% of their income and at say 10%, they would spend an extra 8% of their income in federal sales taxes. This don't include SALT. A wealthier individual may make 100K a year and spend 70k or 70% while their total spending is only additional 7% of their income through federal sales taxes.
As I expected, some people are stuck on comparing taxes to how much you earn instead of how much govt does for you . It's been going on so long, that people have lost sight of how ridiculous and inane the comparison is.
Keep in mind that the purpose of taxes is to provide the govt enough money to do its basic job: government.
Shouldn't it charge people taxes for how much each person gets from government? Doesn't that make a lot more sense?
As I expected, some people are stuck on comparing taxes to how much you earn instead of how much govt does for you . It's been going on so long, that people have lost sight of how ridiculous and inane the comparison is.
Keep in mind that the purpose of taxes is to provide the govt enough money to do its basic job: government.
Shouldn't it charge people taxes for how much each person gets from government? Doesn't that make a lot more sense?
Well it is also much harder to quantify how much you get out from the taxes versus what you put in, especially considering the Obamacare era. This is regardless of your income level mind you.
I'm sure you'll hate this response but it is true.
On the traditional flat tax proposal, those who pay less than 17% get a tax increase. For anyone making under about 60K as a single individual, you will face a tax increase of some sort. Conversely the rich making millions get a considerable tax cut. One that they don't need as wealth is not spent but accumulated. This is a flaw in the sales tax proposals.
You are quite mistaken. Flat and VAT taxes yield more income/wealth equality. Just look at other developed countries which use both much more than the U.S. Economists know that. Here's how one explains it:
Quote:
[Economist Anatole] "Kaletsky argues that over-reliance on progressives taxes creates “a perverse incentive for governments to promote income inequality. If the solvency of the state and the ability to fund basic services for the poorest people in society depends on the rich getting even richer, it is tempting for even the most progressive politicians to support widening inequalities."
That's what's inherently wrong with a progressive tax system such as we have here in the US; it distorts and exacerbates inequality by necessity in order to maximize tax revenue. The Europeans and Scandinavians have figured that out, and therefore rely most heavily on regressive taxes such as a national VAT tax, and MUCH flatter income tax brackets (e.g., a middle class income is in the highest income tax bracket right there along with the top 1%).
You are quite mistaken. Flat and VAT taxes yield more income/wealth equality. Just look at other developed countries which use both much more than the U.S. Economists know that. Here's how one explains it:
That's what's inherently wrong with a progressive tax system such as we have here in the US; it distorts and exacerbates inequality by necessity in order to maximize tax revenue. The Europeans and Scandinavians have figured that out, and therefore rely most heavily on regressive taxes such as a national VAT tax, and MUCH flatter income tax brackets (e.g., a middle class income is in the highest income tax bracket right there along with the top 1%).
OK, here is what was stated in another thread about taxes. Some European countries with the VAT (I don't get calling it the VAT tax since the T in VAT is Tax) also have higher progressive income taxes I think it was some 26% for 50/60k rather than a flat tax. From what I also understand, the lower middle class and below are also fairly exempt from the high income tax rates. The writers that point to the VAT often forget Europe also has other income taxes as well that aren't regressive. It is a dishonest argument to not include that.
Well it is also much harder to quantify how much you get out from the taxes versus what you put in, especially considering the Obamacare era. This is regardless of your income level mind you.
I'm sure you'll hate this response but it is true.
Why would I "hate" it? Especially considering that I already agreed with it in the OP?
As I said, it's hard to measure. But does that mean that we should give up without trying, and use a completely inapplicable scale instead, that has little or nothing to do with what people get from government?
As I expected, some people are stuck on comparing taxes to how much you earn instead of how much govt does for you . It's been going on so long, that people have lost sight of how ridiculous and inane the comparison is.
Keep in mind that the purpose of taxes is to provide the govt enough money to do its basic job: government.
Shouldn't it charge people taxes for how much each person gets from government? Doesn't that make a lot more sense?
Quote:
Originally Posted by InformedConsent
Flat and VAT taxes yield more income/wealth equality.
That's what's inherently wrong with a progressive tax system ....
....and therefore rely most heavily on regressive taxes...
(NOTE: "Progressive" and "regressive" are misleading terms that actually refer to charging people higher or lower taxes depending on their incomes.)
Quote:
Originally Posted by mkpunk
the lower middle class and below are also fairly exempt from the high income tax rates.
Why would I "hate" it? Especially considering that I already agreed with it in the OP?
As I said, it's hard to measure. But does that mean that we should give up without trying, and use a completely inapplicable scale instead, that has little or nothing to do with what people get from government?
OK here's the muddy waters that I referred to with Obamacare. A middle class family might either get healthcare through the exchange or a parent's job (if they are full-time in a company of 50+.) If they get it through the exchange, they likely get a tax subsidy while they wouldn't through the employer plan. If the family is under the employer plan wouldn't get as much money from the government that a family who gets an exchange plan does.
I'm not saying to give up, but it is a bumpy windy road with no detours that will give you a faster route. This will take a very long and drawn out study.
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. It's been going on so long, that people have lost sight of how ridiculous and inane the comparison is.
