The flat tax is a BAD idea

[derketchup]

Pulling this out of the Downsized thread since it will certainly drag it off topic

Didn't mean to insinuate, should have been clear. I think everyone should pay the same percentage, then at least everyone would be paying something. As it is now, some pay a lot, some pay a little and more than anyone cares to admit pay ZERO and even some pay ZERO and manage to get a refund

Let me break it down for you (current system, two individuals with no dependents living on their own):

$25,000 per year pre-tax income
$17,825 minimum standards living expenses
$7,175 left over
$3,844 taxes (current system)
$3,331 left over

$150,000 per year pre-tax income
$17,825 minimum standards living expenses
$132,175 left over
$22,372 taxes (current system)
$109,803 left over

flat tax system (20%):
$25,000 per year pre-tax income
$17,825 minimum standards living expenses
$7,175 left over
$5,000 taxes
$2,175 left over

$150,000 per year pre-tax income
$17,825 minimum standards living expenses
$132,175 left over
$30,000 taxes
$102,175 left over

Did you see that? $150,000 is paying 7% more of his excess, and $25,000 is paying 34.5% more of his excess.

And this is fair... how? Why would we even want to put the larger burden on the poor?

I'll gladly stop b*tching about the amount of taxes we pay when all those who are happy w/ it pay the same percentage.

This is not fair. This is unjust, actually. Taxing everyone at the same rate puts the larger burden on the poor and middle class, because they don't have as much excess. This helps the rich get richer and we're footing the bill. I think it makes much more sense for rich people to pay a higher overall tax level that is actually a smaller portion of their excess.

I don't want to live in a country where we have tons of poor people giving their proverbial "widows mites" to the government because that's all they had left over.

[justmama]

I will never understand how taking away more as you earn more will encourage people to earn more. The way the current system is people are benefited from staying stagnant in their current situation. I don't want a nation where everything is dumb downed. I don't want the government taking more of the money my DH earns to give to people who earn less so everyone is equal. I am all for helping the poor, but i will never be pro 'i didn't pay taxes and got earned income credit and am getting THOUSANDS of dollars in a refund' How is that ok. How is it ok for someone literally to get back more money than was taken out in a year? People have this attitude of as long as i get mine, i don't care how the government justifies given Jane $6K when she only paid if $1k (if anything).

If you pay in nothing, you should not get a refund. That is my BIGGEST complaint. At least if it was flat tax everyone would pay SOMETHING. I'm just not for only some contributing. I'd even consider being pro social healthcare, if i thought EVERYONE would contribute to it. I know in Australia everyone pays (i think) 10% of their income and they get medical, however if you do not pay your 10% you aren't covered. (it's been a while since i spoke w/ my friend, but numbers could be off, but that's the just of it). You can't always rely on the rich people taxes to cover the non-rich. Everyone should do their part. Again, what't eh point in bettering yourself if the more better you are off, the more that will be taken to give to someone who's farther down the monetary ladder.

Just like the YMCA, we have to pay full price, while friends pay less than 1/2, i KNOW their situation. They do not get food stamps because they said they'd feel guilty driving 2 cars, have a big screen tv, 3 video games systems, 2 laptop,s internet, cable, 2 cells phones, etc. They feel guilty about food stamps but not getting more than 1/2 off the Y membership? They also opted to get the free cell phone from WIC, in case they use all their minutes.

I will never be ok with people getting 'help' when they can pick and choose what luxuries they want.

[holiday1]

I disagree. I never hear people turn down lottery winnings or better paying jobs because their taxes will go up a little

[derketchup]

I will never understand how taking away more as you earn more will encourage people to earn more. The way the current system is people are benefited from staying stagnant in their current situation. I don't want a nation where everything is dumb downed. I don't want the government taking more of the money my DH earns to give to people who earn less so everyone is equal. I am all for helping the poor, but i will never be pro 'i didn't pay taxes and got earned income credit and am getting THOUSANDS of dollars in a refund' How is that ok. How is it ok for someone literally to get back more money than was taken out in a year? People have this attitude of as long as i get mine, i don't care how the government justifies given Jane $6K when she only paid if $1k (if anything).

If you pay in nothing, you should not get a refund. That is my BIGGEST complaint. At least if it was flat tax everyone would pay SOMETHING. I'm just not for only some contributing. I'd even consider being pro social healthcare, if i thought EVERYONE would contribute to it. I know in Australia everyone pays (i think) 10% of their income and they get medical, however if you do not pay your 10% you aren't covered. (it's been a while since i spoke w/ my friend, but numbers could be off, but that's the just of it). You can't always rely on the rich people taxes to cover the non-rich. Everyone should do their part. Again, what't eh point in bettering yourself if the more better you are off, the more that will be taken to give to someone who's farther down the monetary ladder.

Just like the YMCA, we have to pay full price, while friends pay less than 1/2, i KNOW their situation. They do not get food stamps because they said they'd feel guilty driving 2 cars, have a big screen tv, 3 video games systems, 2 laptop,s internet, cable, 2 cells phones, etc. They feel guilty about food stamps but not getting more than 1/2 off the Y membership? They also opted to get the free cell phone from WIC, in case they use all their minutes.

I will never be ok with people getting 'help' when they can pick and choose what luxuries they want.

The reason there are tax credits is because we tax off the gross. If we taxed off the gross minus minimum standards of living, I might be amenable to a flat tax. But it's not fair to do a flat tax off the gross.

I'm not talking about government subsidies. I'm not talking about WIC or food stamps or tax credits. I'm talking about the flat tax. It's not fair when people are taxed on the gross, which is how the current tax system works. You can't just change our tax system to a flat tax system and expect it to be fair. It's not fair for someone who has a pittance in extra annual money to suddenly lose 34% of that. How do you survive if you have to have surgery, or have to go to the emergency room and pay a huge copayment? How do you survive?

[loaslaen]

I say do away with income tax period and tax the sales. Makes more sense to tax what you spend than what you earn.


"For example. If the system be established on basis of Income, and his just proportion on that scale has been already drawn from every one, to step into the field of Consumption, and tax special articles in that, as broadcloth or homespun, wine or whiskey, a coach or a wagon, is doubly taxing the same article. For that portion of Income with which these articles are purchased, having already paid its tax as Income, to pay another tax on the thing it purchased, is paying twice for the same thing; it is an aggrievance on the citizens who use these articles in exoneration of those who do not, contrary to the most sacred of the duties of a government, to do equal and impartial justice to all its citizens." - Thomas Jefferson

More people can get away with not paying taxes (drug dealers, prostitutes, illegal immigrants, tax-evaders, etc), but a sales tax would allow for ALL people who buy in America to pay taxes in America. Like the quote above, it makes no sense to DOUBLE tax everyone, tax on what they earn, then turn around and tax on what they buy.

A "Fair Tax" on spending also allows the taxpayer to pay fewer taxes by spending less. He will not be penalized by making more money, only by spending more money. So then there's not a burden when one begins making more money and falling into a higher tax bracket.

[tinky1966]

I'm not an expert, and I don't even play one on T.V. But if I understand correctly, the way Neil Boortz has it laid out, there would be a refund issued for basic cost of living items that get taxed.

[cbms]

I'm tiptoeing in and then running out...


Americans For Fair Taxation: Calculator

[billig]

I'm one of those people who earned so little last year, not only did I get back everything my employer paid in taxes, but I also got extra.

One thing both arguments are missing is how much the government needs to run no matter how you pay the tax.
Not getting into anything about government wasting tax dollars here, cuz that's beside the point.
The government needs XX amt of dollars to exist.
If you want it to be raised by sales taxes, then imagine everything you bought this year, and then add to that cost what you paid in income taxes.
So the person earning $25 K per year is going to to spend 21% more on their living expenses. (based on the first post).
The person earning $150K is going to spend 125% more on their living expenses...uh, but wait, how is the price going to know who earns what?
It doesn't.
It will be the same increase percentage for all, which means between the $25 K and the $150K earners have a different burden.
Let's just shrink down their government to the average of the two of them, the $25K earner and the $150K earner.
Together their tax burden is $ 26,216.
Together their incomes are $175,000
They now split the $26,216 evenly into $13,108.
Adding their minimum living expenses plus their tax burdens=
The earner making $25,000 now pays $30,933 for his living expenses.
The earner making $150,000 now pays $30,933 for his living expenses.
Ok, I'm going to post this, but maybe I got the numbers wrong.

[billig]

I disagree. I never hear people turn down lottery winnings or better paying jobs because their taxes will go up a little

I have known people who either marry or don't marry based on what it will do to their tax burden.

[justmama]

So your yearly income was subsidized by your tax 'refund'. Also if someone falls into that category a majority of the time they are already being subsidized throughout the year. They most likly qualify for discounted and/or free services, and the cherry on top is to get a bonus come Jan/Feb. I just don't understand the logic. How can one get a refund on something they never paid for. I liken it to walking in to Kroger and saying, 'i need a $100 GC, no i'm not returning anything i purchased yesterday, i just deserve a $100 GC because i only make X amount of money a year. Yes, i got FS but thats not enough, i need the $100 GC to cover anything the FS card won't cover'

We get a refund because we pay in more than we owe. If you pay in nothing, because you owe nothing (again don't understand how some people are required to owe nothing to help the government run), how can you get a refund?

They should change the terminology, if you over paid you get a refund, if you never paid, it needs to be called a paycheck, bonus, government assistance.

I have been known to get stuck on terminology.