I was having a discussion with someone in regards to tax. They kept insisting that it is unfair for the wealthy to pay more than the middle class. He insisted that a flat tax rate is the way to go and that is the only fair approach. Obviously the rich would pay more even with a flat tax rate so what do you guys think of the flat tax rate? Is it a fair approach and would all parties be satisfied?
Part of the reason the income tax is progressive (those who make more pay a higher rate) is because other taxes (sales tax, property tax, payroll tax, etc.) are regressive (those who make less have to spend a higher percentage of their income on those taxes than the wealthy). The idea is to even out the tax burden.
Some states have a flat tax, and nearly all localaties (possibly all) with income tax use a flat rate.
In a hypothetical world, we eliminated all non-income taxes, and taxed a flat rate, while exempting a specified amount ($15k for single, $30k for joint), would a flat income tax rate be amicable? I assume that the wealth gap in this country would grow wider.
That part makes sense but if you had a flat consumption tax rate as well as flat income wouldn't it all even out in the end? Considering even on a flat tax rate, the people that make more money pay more.
The flat tax or often called the "fair tax" is just another variation of spin because rich folks want to pay less tax. They apparently were not happy with the increase in the middle class after WW II.. The 'fair' and 'flat' spin tactic has worked pretty well as you have a lot folks at lower pay grades who probably have good middle class lives due to government help received by their parents' generation who support this latest anti-tax idea. You see many of them on this bbs for example.
Yes this is what I thought, but they have an interesting way of debating and promoting the flat tax. Once I brought up the wealth distribution and how the 1% have nearly 50% of the wealth in this country is where they really had no answers.
In a hypothetical world, here is what I would do. For those who are too lazy to click... Isn't it time for a consumption tax? In a recent discussion, a tangent regarding tax policy developed in which I stated that I would support a consumption tax, much like the FAIR Tax, but with a couple of caveats, changes that I would make. This post will describe the tax I would implement to replace the income tax. Basic Structure: The Consumption Tax (CT) that I would create would not have a set percentage rate, but would have a "base rate" set each year (automatically, no ability for politicians to interfere) to generate the amount of money spent by the federal government plus five percent. This implementation has a couple of goals, the first of which being a balanced budget and the second being a plan to retire the debt over time. In addition, setting the tax rate based on last year's spending would create a completely transparent system of taxation as everyone would be completely aware of government spending because the base rate would rise with increased spending. Exemptions: I would give every adult a $5000 annual tax exemption and the parents of dependent children $2500 for each child. This exemption would be implemented using the same infrastructure that currently exists for food stamps and flex accounts. I would exempt food and medicine from the tax and, after the debt is paid off, would give a CT holiday every year at back to school time, much like Texas does already. Application: The CT would apply to new goods and would not be charged on used items. Refurbished goods would only be taxed on the value of the new parts used to refurbish the item. Applying the tax only to new goods would give people a market in which they could avoid the tax altogether if they wanted. This application would also encourage the production of more durable goods as such products would hold their resale value. It is likely that such a system would encourage more recycling of products rather than the production of disposable goods that are so prevalent today. Optional component: It is my opinion that some goods should have higher tax rates applied to them than other goods due to the potential for societal damages or costs that are higher. The prime examples would be tobacco products (which cause cancer, leading to higher healthcare costs for people who use these products). For such products, I would allow for a "tax multiplier" to be applied. If the tax multiplier were 1.5, then the base tax rate would be multiplied by 1.5 to calculate the total tax rate for that product. This kind of system would ensure that tax rates would be completely transparent if the product in question was taxed at a higher rate than the base rate.
Color me shocked that conservative posters would think the worst about a known liberal poster without doing their research about conservative framing of the flat-tax as a "fair tax." http://www.forbes.com/2011/06/01/fair-tax-is-flat-tax.html http://online.wsj.com/article/SB10001424052970204138204576600760327683564.html http://www.heritage.org/research/fa...w-flat-tax-encourages-growth-and-job-creation
Refman, I hope you weren't too shocked when your hero Romney lost. Hey, "fair tax", "flat tax" both are both right wing spin imho. I'n sure they will come up with another scheme if necessary. The progressive income tax did well for the middle class. Both the "fair" and "flat" tax are libertarian, anti-tax the rich schemes that seek to undo the progressvism of the tax system we had prior to Reagan and the trickle down crowd. The progressive higher tax system did well for the middle class. IAre you telling me and your family never benefitted from things like cheaper state university tuition?
I am in favor of the "just tax". It increases the rates as income goes up. It raises taxes on incomes over $250,00 per year to the old pre-Dubya rates, the last time we had a blanced budget and then dramatically goes up to around 75% on marginal income over $ 10 million a year with no exception for capital gains or "carried income" or other types of income. It is just because it raises on those who can pay without impacting their health education or welfare.
