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[Frumple]

I'd question whether it'd be enough to maintain many of the lovely social institutions taxation is currently funding, firstly (and yes, I'm aware that many aren't lovely, but the point would be to illustrate the other social costs involved, should they exist). Would 17% income tax be enough? The minutes from the (a?) hearing on the bill (at least as near as I can tell, that was a pain to find) you're talking about mentioned that the government would be looking to lose a good 130 and some change billion a year, on average, with a flat tax... back in '97. What about the rest of the taxes? And... more than that (that, really), would be better for a dedicated thread, probably. Which I'm... fairly sure we've had before? The ideological and practical basis for progressive over regressive taxation has been trod on a few times, at least.

Though the minor (very minor, ha) quibble would be probably a similar deduction match to married filing jointly for married filing separately. I'm fairly sure I know why filing jointly is so heavily incentivized (it's easier to get the money if one of the pair ditches), but it's been consistently annoying as I've been running into it. Filing separately is a lot... safer.

[Tack]

One of the members of Australian government was planning on putting a small tax (I think 0.2% or something) on money in bank accounts over 100k.

He got shut down.

[LordBucket]

Why a flat tax?

The primary reason is simplicity. Again, as linked several times, the present system requires six billion man hours of work per year.

Me personally, I'm advocating it because it would reduce the "net workload" of the country. Others have had other reasons. For example, eliminating the apparently 20 hours that the "average" person spends every year doing their taxes. Or the, from the link, the over $200/yr that the "average" person spends paying tax preparers to handle it for them.

It's altogether a bloated and bad system.

Why not a progressie tax that is a value of a function e.g.  ((y-10000)*2/1000)
where y is your income and the result is the percentage

(this function may suck, its an example)

...well, your specific example...if I'm interpreting it correctly, anyone with an income of $60,000/yr or more would pay 100% tax. So...yeah, I think I'd want to look at a different example.

If you would like to propose something with an inverse parabolic curve, I think that could work. I might question why you apparently want people who make more money to pay a higher rate, but I acknowledge that we already do and either way, it's probably not very relevant to the current discussion.

if you just tax monetery income, then it disproportionately affects the poor
(rich people tend to trade in assets/stocks etc, not money) and would be easy to circumvent.

I'm not very interested in engaging this "RICH PEOPLE ARE BAD!!!!" thing that bay12 has going on.

Honestly, if you want to specifically discuss taxes, I would propose we eliminate income tax altogether. Income taxes have only been around since 1913, and this idea of withholding from wages has only been around since 1943. Income tax was supposed to be a temporary measure to fund war, but somehow it's become something everyone just accepts as how things are done. Income tax at all is actually a fairly good example of what I'm talking about regarding inefficiency.

So, yeah...I'm in favor of eliminating it. This country got along just fine for nearly 150 years without it, but now that we have it, we have all the bloat that comes with it and it would be somewhat difficult to eliminate. It would be more complicated than simply cutting it off. As a practical matter, simplifying and increasing efficiency over time is more realistic.

So...all that said, if you have some specific model to consider, *shrug* ok, that's fine. My goal here is to reduce waste and unnecessary work. I'm willing to consider other methods that accomplish that. But I question why you apparently find the previously described flat tax undesireble.

Does anyone have a good reason to not use the flat tax system described above proposed to Congress in the 90s?

Also, the infastructure used in cities for water and sewage is quite efficient, it requires fairly little work versus the ammount of people it services. Once you build the infastructure, it needs very little matenance.

I've given lots of links supporting my position. You're making blind assertions. I'm going to favor the
links that support my position over your simply stating otherwise with no corroboration.

Like these:

San Antonio Agrees to $1.1 Billion Upgrade Sewer Systems
Expansion of County Sewer System Could Hit $3 Billion
Repair bill over $1 billion to fix crumbling Miami-Dade water, sewage system

I think sewer systems are not cheap and easy to maintain as you claim.

[LordBucket]

Would 17% income tax be enough?

I don't have the answer to that, and I'm guessing neither do you. Presumably the exact percentage would be set to whatever value it would need to be in order to generate similar revenue as we do now. 17% was the number that was proposed in the 90s. Possibly a different number would be required now.

But the concerns you expressed previously about flat tax having greater affect on low income families is apparently not valid, because the actual flat tax proposal had the same minimum taxable income that we have now. By my reading...a lot of low income families would probably end up paying a lot less. And I kind of wonder if that's the real reason it was rejected. Rich people who know enough to not pay any taxes anyway tricked people into believing that the proposed flat tax, which would take away all their deductions, would instead increase their taxes.

Clever move. Would have to do more research to confirm that, but that's my first impression on seeing the actual numbers from the 90s proposal.

EDIT:

the government would be looking to lose a good 130 and some change billion a year

That's a huge transcript you linked...but from what I can tell, the losses were supposed to be largely offset by the reduction of "compliance costs." Meaning, the reason the revenue after the flat tax was implemented was less was that we wouldn't need to generate as much tax money to pay for the IRS.

[Thecard]

I'm not very interested in engaging this "RICH PEOPLE ARE BAD!!!!" thing that bay12 has going on.

Often, people become rich through "bad" means --that's part of the capitalist system. Not all of them, though, and "Bad is subjective".

[Descan]

Also, people don't want to tax the rich more out of some hatred for people with more money (Though I can't say I like the people with billions of dollars who do nothing with it :v)

But because they can weather it more. :I

[Eagleon]

What I can see the flat tax doing is creating a plateau, where past that allowance you'd get a reduced incentive to work. That might create inflation as businesses adjust to keep their highest salaried workers happy, and drive middle-income families into a poverty class as a result. From my understanding it's effectively a softening of minimum wage, as there is little to no incentive when it first arrives to worry about how businesses are going to exploit your newfound love of cellphones and mountain bikes and push us further into the wealth == happiness mindset.

Not that it wouldn't make a difference for what I was talking about, short-term. Just that it might be sort of risky to make such a drastic change to the flow of money in an already fragile system.

[LordBucket]

What I can see the flat tax doing is creating a plateau, where
past that allowance you'd get a reduced incentive to work.

Why? Seems to me that it would be the reverse. With a progressive tax, the more money you make, the higher the rate of tax you pay. You're "punished" for making more money. With a flat tax, you're not[1]. Whether I make $50,000/yr or $150,000/yr, I still pay 17%. Whereas looking at 2012 numbers in our present system, if I make $50,000 I pay 25%, but if I make $150,000 I pay 33%. Either way, higher income means more tax, but with the progressive system, higher income means higher rates, whereas with the flat tax, it does not.



[1] That statement is literally correct speaking of the general case, but does not precisely describe the specific flat tax proposal from the 90s we've been discussing, which applies a base exemption before the flat rate is applied. If anybody really wants to get into the math we can, but it's all there in the links and discussion in previous pages, and I'd rather not repeat it if we don't have ot.

[Descan]

Wait, you're seriously one of those people who think a tax bracket means all your income is now shifted?

No, it doesn't work that way, and it's never worked that way. You never have a net loss on money to taxes by making more money, just any money above the tax bracket is taxed at that rate.

If you make 100k, and the tax brackets are 30k is 10 percent and 60k is 20 percent, then instead of paying 20k, you pay 17k. 30k gives up 3k, and the 70k remaining gives up 14k.

Never a net loss from taxes. Never.

[Eagleon]

Because there is a point where you aren't punished. Maybe it'll cause deflation. I'm not good with these kinds of numbers if I'm not pushing them into a graph, hell, that was my first stab at speculative economics, so it's probably completely wrong.

I still don't see how it would help the fact that a good portion of what we spend our money on is toys and junk food (lol old fogey alert except that I'm in my 20s) I understand why no one's taking up that 'fight' here, neutrality is difficult to maintain, but it's a criticism of capitalism that runs deeper than you can argue with numbers - can people function in a world where businesses are given the responsibility, even social expectation of generating our sense of self-worth?

I've done my best to avoid that trap, by living far, far beneath my means (in terms of time and sanity preserved by not taking a desk job and knowing that school is becoming more expensive than it's worth), regardless of the fact that I have no safety net to speak of, and I don't know if I'm happier or not because of it. But in my ample amounts of free time generated by not having a car, health insurance, cable TV, an apartment of my own, and the ability to take care of my family, I have started to get pretty good at programming and music.

[LordBucket]

@Descan:
I'll asume you were responding to Eaglon and I ninja'd you.

@Eaglon:

Because there is a point where you aren't punished.

Yes, but that point is very low. Using the 90s flat tax proposal numbers, for an individual filling singly, that point is $11,600. Using 2013 real life numbers, for an individual filling singlely (not head of household) it's $5950. Below those values you pay no taxes, and above them you do, but either way, the numbers are low enough that I suspect very few people will try to "make less than that" solely for the purpose of avoiding paying taxes.

Technically you're correct...but I think it's not a huge issue.

[Descan]

No, it was at you, but I suspect I was confused on what exactly you were talking about. Most people when they say "Progressive taxes are punishing!" and "The more money you make, the higher your taxes!", mean what I said you were saying, with one tax rate for all your income that gets "upgraded".

Your post just there ... doesn't seem to be from the same person? Now I'm really confused.

S'like you're arguing two different sides there...

[Urist McScoopbeard]

One of the members of Australian government was planning on putting a small tax (I think 0.2% or something) on money in bank accounts over 100k.

He got shut down.

"To the leader of the opposition, let me just say this; you want to fight cunt?"
http://m.youtube.com/watch?v=1WjyvFikJZc&desktop_uri=%2Fwatch%3Fv%3D1WjyvFikJZc

[LordBucket]

No, it was at you, but I suspect I was confused on what exactly you were talking about. Most people when they say "Progressive taxes are punishing!" and "The more money you make, the higher your taxes!", mean what I said you were saying, with one tax rate for all your income that gets "upgraded".

I think this is an issue of phrasing and interpretation.

"The more money you make, the higher your taxes!"

That's literally true regardless of whether we're discussing flat or progressive systems. For example, let's assume the tax rate is 10%. If you make $100, then you pay $10 in tax. If you make $200, you pay $20 in tax. $20 is more than $10. So, yes...the more money you make, the higher your taxes.

"Progressive taxes are punishing!"

By which I mean that, the higher your income, the higher the rate at which you are taxed. I gave examples in my this post, in which I linked real life, actually 2013 income tax bracket percentages. Here's that link again. Go ahead and take a look. Under our current tax system, because it is a progressive tax system, the higher your income, the larger the percentage rate of tax you pay.

If you're referring to what you said in this post:

You never have a net loss on money to taxes by making more money, just any money above the tax bracket is taxed at that rate.

...you're actually incorrect. That can happen. You can have a net loss by making more money. But that's not a function of progressive tax in general, and I haven't intentionally made reference to that at any point in this thread up until now. It can happen in some cases in real life because our specific implementation of a progressive tax system here in the US isn't actually percentage based. It works off of needlessly complicated tables which say "if you make between X and Y your tax is Z."

Here's the 2012 tables from the IRS:

http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

So, for example, looking at the second column, assuming you're applying singly, if you make between $1000 and $1025, your tax is $101. If you make between $1025 and $1050, your tax is $104.

So...if you make $1024 dollars, then pay $101, your net take-home is $923.

Whereas if you make $1026 dollars, then pay $104, your net take-home is $922.

You actually took home less, making more money. So yes, that can happen. But...so far as I know, none of us were actually talking about that relatively minor and obscure phenomenon. It certainly wasn't what I was talking about. I was talking about increased rates at higher income levels.

[alexandertnt]

...well, your specific example...if I'm interpreting it correctly, anyone with an income of $60,000/yr or more would pay 100% tax. So...yeah, I think I'd want to look at a different example.

If you would like to propose something with an inverse parabolic curve, I think that could work. I might question why you apparently want people who make more money to pay a higher rate, but I acknowledge that we already do and either way, it's probably not very relevant to the current discussion.

Yeah, that example was pretty terrable, it was just put together quickly to seem semi-plausable.

20% tax on poor hurs more (taking food off the table) then it does on the rich (smaller sports car).

I'm not very interested in engaging this "RICH PEOPLE ARE BAD!!!!" thing that bay12 has going on.

I did no such thing...