A fair tax rate

[Spongebob]

@Spongebob I wouldn't say it's more fair, just better because it's simpler. I believe rich people should pay their fair share, just like us. With the parejto distribution the way it is, they just have more money to throw into loopholes and shelters to avert paying their fair share. If the law were followed in principle, rather than letter, to the effect of "Everyone should personally pay their fair share as citizens to your state and local gov't and we consider that to be 15% of your wealth". that would be simple and clear. But that's more of a wealth tax question rather than an income question. Personally I don't think we should have income taxes. I think it'd be better served using a wealth tax... but the logistics of that would be just as much a nightmare as the current income system probably.

Well you know they could fix what we have. Redefine taxable vs. nontaxable, remove caps and loopholes, etc. as a start

A flat tax would technically be more simple, but only slightly.  The progressive tax rate is NOT what makes our taxes complex.  This is because of deductions, single vs joint filings, child tax credits and all the other mumbo jumbo.  Making it a flat tax would simplify taxes by maybe 1% and that would only make it easier for the tax software anyway.  No one in their right mind does their taxes using pencil and paper anymore, not even a CPA!

A flat tax would also not necessarily shift the tax burden to the wealthy.  Not only do they employ loopholes, but many very wealthy people take very little in the form of an income.  Their money is handed out in ways that don't get defined that way.  So fixing the problem means changing the way very wealthy people are compensated and that's likely never going to happen.

Of course all of this is fixable, but the wealthy won't allow that and they have far more influence on government than we do.  I suppose you know of the recent revelation of how the rich are hiding most of their wealth in shell companies and off shore accounts.  We currently have no laws that can address this and with the current political atmosphere, half the country supports this sort of corruption.

[BrianSoddingBoru4]

Flat tax is a bad idea all the way round, loopholes, tax shelters, and deductions aside. 15% is more of a burden on Joe Smith who makes $30 000/year than it is on Jeff Bezos, who makes $30 000/week.

Boru

[Spongebob]

Flat tax is a bad idea all the way round, loopholes, tax shelters, and deductions aside. 15% is more of a burden on Joe Smith who makes $30 000/year than it is on Jeff Bezos, who makes $30 000/week.

Boru

Of course.  That's the reason for the progression.  There's nothing unfair or complex about it.

[Rev. Rye]

Not to mention that, under at the very least, America's tax system, there are some people who make so little (or have so many deductions, which is honestly the biggest reason the tax code can be so complicated) that they don't even make enough to pay taxes. Under a flat tax system, these people would have to pay quite a bit of money, while the obscenely rich, people like Bezos, Buffet, and Gates, who have more assets between them than half of America's population combined, suddenly find themselves needing to pay less. The more I look at a flat tax system, all I see is a massive tax burden on the poorer people, the richer ones paying even fewer taxes, and I can't see how this actually allows for more revenue. And if you argue that this helps starve the beast and forces the government to cut down on spending, I'd point out that, in practice, this doesn't actually happen and that every time it's tried, it leads to us borrowing money from other nations to fund our spending.

[brewer]

I only have jokes.

[Brian37]

Wow, what a topic.  Get your popcorn ready.

I believe the progressive tax system we have is adequate, though perhaps it could be tweaked a bit.  Current tax levels don't bother me.  What bothers me is how the government spends the money.  A lot of it is wasted and a lot of potential is never realized.  I also wouldn't mind a shift to more state taxation and less federal, but with the balance remaining about the same.

I'm sure someone will bring up the flat tax idea, which I consider ludicrous.

Sorry if that's more than you were asking for.

If one looks at the past 100 years of tax rates, at one point the top earners were paying around 90%, 50% after tax deductions. We most certainly are not taxing uber billionaires like Bezos enough.

[tackattack]

I'm open to changing my mind on it. I agree that a 15% on 30k/year is more impactful than 15% on 30k/week. However if we actually enforced a system holistically it could be easily reduced to 5%. If, instead of income + withholdings, inheritance, wealth, property, etc. taxes.... what if it was just everyone needs to pay their part, which is 5%, of what they have available for spending, no shelters or loopholes. That's the type of flat tax I would support. What if, all of your bank accounts (offshore or not), income sources, pay, dividends, etc. were factored in. All of your available spending monies, minus credit, were the factor of your 5%. Then the 5% of the billionaire and 5% of the coal miner was equivalently contributing, IMO. I don't think the laws could get there, I don't think the high end of the parejto distrib. would allow it either. Conceptually though I'd prefer equanimity of opportunity to contribute, rather than equanimity of outcome for the variable taxes based on brackets.

[BrianSoddingBoru4]

I'm open to changing my mind on it. I agree that a 15% on 30k/year is more impactful than 15% on 30k/week. However if we actually enforced a system holistically it could be easily reduced to 5%. If, instead of income + withholdings, inheritance, wealth, property, etc. taxes.... what if it was just everyone needs to pay their part, which is 5%, of what they have available for spending, no shelters or loopholes. That's the type of flat tax I would support. What if, all of your bank accounts (offshore or not), income sources, pay, dividends, etc. were factored in. All of your available spending monies, minus credit, were the factor of your 5%. Then the 5% of the billionaire and 5% of the coal miner was equivalently contributing, IMO. I don't think the laws could get there, I don't think the high end of the parejto distrib. would allow it either. Conceptually though I'd prefer equanimity of opportunity to contribute, rather than equanimity of outcome for the variable taxes based on brackets.

I respectfully disagree. 5% of a coal miner’s income may mean new shoes and school supplies for his kids. 5% of a billionaire’s income might mean he has to downgrade his solid gold toilets to gold plate.

The percentage (and hence the dollar amount paid) doesn’t matter. ANY flat tax will always be more of a burden on the working poor than on the rich. Since the wealthy are better able to access the benefits of a society, it makes sense that they should pay proportionately more to support that society.

Boru

[The Architect Of Fate]

Billionaires have no excuse not to pay higher taxes. They have been given an easy ride for decades and the poor and working-class have paid for it. That needs to stop.

[Brian37]

Billionaires have no excuse not to pay higher taxes. They have been given an easy ride for decades and the poor and working-class paid for it. That needs to stop.

^^^^^^ So much this!

I get so sick of the economic right or libertarians who falsely jump to the conclusion that we(liberals/progressives) want America to become Cuba. The same cries of "socialism or communism" were made when social security was made law, and when Medicare was made law. 

Saying that things are lopsided at this point in history does not mean I want America to become China or the Soviet Union.

If one can afford to make a rocket and go into space in the private sector, they can afford to pay more in taxes.