Originally Posted by Gilpesh
I will take this job of correcting your misconceptions about flat taxes.
So you say someone makes $20 will pay the same as someone with $20 billion.... which is your mistake. 20% of just $20 is a lot more than 20% of $20 billion. Because costs are still the same for both people. The guy making practically nothing already spends most of his paycheck to just survive whereas the guy making an obscene amount can't hope to spend that much unless he wants to buy a country. And adding an unfair tax burden on to the poor man while he is not benefitting nearly as much from society as the rich man is, would be a death sentence.
Also a flat tax would not sort out the deductions mess in the most constructive way possible as deductions also benefit the poor. You wouldn't cut an arm off to remove a splinter would you? This is why the IRS needs funding as any dollar spent on them leads to more dollars coming in.
How is it unfair if its equal? How is someone making more automatically mean someone else is making equally less? How is the economy a finite pie? Just because someone isn't going to spend their money that means they should have it taken away from them by force? Some higher tax advocates want top earners to part with 40% of their income. Some want 45%. Some 50%. Some 70%. Some 90%. How have you arrived at whatever number you desire? What is the concrete reasoning behind it? Or was the number simply plucked out of think air because it sounded nice?
What logic do we use to set the limits on this? If we're comfortable with a system in which just under half of the population pays no income tax, a portion pays 10%, another portion pays 15%, etc ......, and the top portion pays 40% - if we think it's equitable for a group to pay at 4X the rate of another group while almost half don't even have to pay that - then are we comfortable with a system in which one group pays 75% while others pay 10% and over half don't pay income taxes? How about a system where the top 10% pay income taxes at whatever rate is necessary for the government to balance it's budget and everyone else pays no income tax - is that fair?
What logic do you use - what decision rules do you apply to determine what is fair? And if the only rule is that you'll allow the rich to keep just enough of their earnings to keep the economy growing at a rate that the electorate desires, is my contention that property rights are under assault really so far off base?
Plainly put, what property right should individuals have? What should constrain government with respect to people's property?
I believe in a flat rate tax. I think that it's fair. I also think it makes everyone invested in the government and equally concerned about spending.
If you believe in assistance for the poor then you should believe in negative income taxes. Pick a number for the standard deduction. If you make above that number pay a percentage time the difference between your earnings and the deduction. If you make less, receive a subsidy in the amount of the difference between the deduction and your earnings times the rate. This would be the most efficient way to deliver assistance to the poor. It should replace a number of federal programs (each with their own overhead).
The tax system should be simplified. People who choose to buy homes shouldn't receive a benefit over people who choose to (or have to) rent. The tax code shouldn't be used so that Uncle Sam can give a cookie to all the good little drones who live the way he wants them to.
People want what someone else has, so they use force (government) to take it. That's pretty much exactly what progressive taxation is. The only reasons I've ever heard to justify this are a very vague argument that the rich benefit exponentially more from government (although no one can ever get at all specific about this one), or because they can.
My point in asking the question is not to get a mathematical answer, but rather a philosophical one. From the founding of the Republic, we've agreed that it is important to protect the rights of people who are in the minority. I happen to consider property an important right. Again, if nine people want my money, or 99 people want it, or 99 million people want it, it doesn't give them a right to it in my opinion. Now I recognize that there are people who don't believe in property rights. Supporters of the president and the current Republican congressional leadership may well be among them. If you are, then you shouldn't get so testy when people use terms like "socialism" and "assault on property rights."
I'm just really trying to figure out how a bunch of people who generally seem pretty decent think about this issue? When generally likable people advocate doing something that you find morally wrong, it makes you want to ask them why they think that way?