Flat Tax?

[ACPlayer]

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He does, however, support the taxing of money from one group of people for the benefit of another group of people

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Well, no.

I certainly do not support the rampant subsidization of the red states by the blue states. I am actually sick and tired of the red state yahoo's feeding on the trough of the superior work ethic and intellectual capacity of the blue states.

Unfortunately a side effect of a free democracy is that the representatives of the people have the legal right to tax -- see the American constitution as amended by the people of America.

FWIW, I have consistently argued for lower spending, lower taxes and balanced budgets. All three in tandem -- the best place to start is the spending. Simply lowering the taxes (a dubya-ious policy) leaves the long term economy unbalanced, IMO.

[ACPlayer]

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I have no problem with taxes, it's simply that they should be applied evenly

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Evenly. There lies the rub. The most socialist regressive taxer would argue that he is proposing an "even" tax structure. For example if every user of a national park pays an "even" percentage of his income to enter the park.

The flat tax is no more or less even than any other, it is a matter of how you see evenness.

[TaintedRogue]

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The reason we have illegal aliens is because we have people willing to hire them. Eliminate the Mexicans chance of improving their lifestyle, the same reason we came here, and you'll eliminate the aliens.

So, eliminate the U.S. citizens who are stabbing their fellow countrymen in the back, by hiring mexicans to hand drywall instead of an American.
Take those back stabbing Americans who hire illegals, strip them of their citizenship and ship them back to the country their ancestors came from, and, you'll eliminate illegal aliens.
Place the blame where the blame belongs.


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Sounds like you are advocating socialism

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How ya figure?

[natedogg]

Any rebuttals of his specific points?

Isn't he just talking about a flat tax *rate*? There would still exist many writeoffs and deductions, correct? Surely he's not suggesting we tax gross income? That would be a disaster for all self-employed and small-business owners...

I don't understand how a flat tax rate will simplify anything, it is just a tax cut, which I'm all in favor of but it's not a big change. Again, unless he's talking about a flat tax on gross income, which is insane.

Also, I have no idea why he supports a 17% tax on corporations. It makes me wonder how much he really understands about taxation, because he should understand that taxing corporation is a hidden tax on individuals anyway... The corporate tax rate should be 0.

So far, the most compelling drastic reform proposal (to me) is the consumption tax, but I'm not sold on it completely.

natedogg

[Cyrus]

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... please explain why the road built with one person's tax money cannot be used by that person but only by the others ...

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Those would be known as user fees, and while they resemble taxes they are for the most part applied evenly -- tax on fuel, excise taxes on tires, auto registration, etc.

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You did not understand.

You wrote that taxing amounts, roughly speaking, to taking money from one group of people and handing it over to another group. And, becasue I find this to be a laughably distorted idea of how taxes work, I directed your attention to this li'l point :

All the money collected from taxpayers is amassed in the governments' vaults, roughly sepaking again, and then the government, out of the total of this money, starts allocating expenditures. Agree?

So one of those expenditures goes to construct a road. A road which we ALL use, meaning both "groups of people" you referred to. And since, as I claim (and I challenge you to prove otherwise), most of taxation works that way (i.e. expenditure-wise), your claim that taxation means "taking from A and giving to B" is patent nonsense.

Roughly speaking.

[SheetWise]

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All the money collected from taxpayers is amassed in the governments' vaults, roughly sepaking again, and then the government, out of the total of this money, starts allocating expenditures. Agree?

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Agree.

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And since, as I claim (and I challenge you to prove otherwise), most of taxation works that way (i.e. expenditure-wise), your claim that taxation means "taking from A and giving to B" is patent nonsense.

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Patent nonsense? Here's how the federal income tax works.



(Data covers calendar year 2001, not fiscal year 2001 - and includes all income, not just wages, excluding Social Security.)

So half of the population is getting a free ride on federal taxes. Here's the link.

So if A is paying the taxes, and B gets to vote for expenditures, and it's "A road which we ALL use", as you claim -- how is that not one group of people benefiting at the expense of another? As I mentioned earlier, roads are a bad example because there are user taxes. This thread was about income taxes.

[Cyrus]

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Roads are a bad example because there are user taxes. This thread was about income taxes.

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I am not referring to road tolls or user taxes. Yes, This is about income tax. Read on.

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Patent nonsense? Here's how the federal income tax works:

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What was that for ?? I did not dispute that the people earning more money contribute more taxes! The point you made, however, was that taxation amounts to "taking from group A of people and giving to group B". But, this is so imprecise as to be nonsensical.

Citizens are taxed by the gov't. Those citizens earning more are taxed more, and those earning less are taxed less. There are even some who earn so little as not to be taxed at all. (No, this is not about offshore tax havens.)

After the tax money is collected, the gov't starts spending it. And the things the gov't spend the money on benefit in practice mostly everyone - rich as well as poor! The gov't, for instance, funds national defense (and NORAD protects rich and poor equally), infrastructure investment (and the roads built are used by both Porsches and Corollas), law enforcement (and the police are protecting and treating rich and poor the same -- I'm just sayin' now...), etc etc.

It is very much like going out to eat with friends, each with a different financial status, and the leader of the pack deciding that the bill is gonna be paid according to each friend's financial capacity.

Government expenditures are mostly allocated like that. Direct "hand-outs" (eg Welfare) are not the majority of the budget! Your assertion that taxation amounts to taking from the rich and giving to the poor is patently incorrect.

[Lottery Larry]

"The corporate tax rate should be 0"
I don't know how much they are paying now, but wouldn't this be a deficit-builder as well?

And are you saying ALL businesses shouldn't be taxed on profits, or just corporations?

[SheetWise]

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Government expenditures are mostly allocated like that. Direct "hand-outs" (eg Welfare) are not the majority of the budget! Your assertion that taxation amounts to taking from the rich and giving to the poor is patently incorrect.

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Wow. We agree on where the money comes from, and how it's spent -- and you can still come to this conclusion.

So -- the money comes from the rich (because they have it), half of the people pay nothing (because they don't have it), and it is spent for the benefit of all. But that's not wealth redistribution in your mind.

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It is very much like going out to eat with friends, each with a different financial status, ...

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You comment reminded me of a story -

Ten people have been going to lunch at a restaurant for several years. Each paid their own way, and each was frugal in their choices from the menu. One day the proprietor informed them that in the future there could only be one guest check per table -- and they all agreed that to simplify things they would simply calculate a tip for the entire table, and each diner would pay 10% of the check.

The arrangement worked out fine for several weeks -- until one day everyone noticed that a single diner had developed the habit of ordering steak for lunch. It seems that one diner realized that even though he could never afford to eat steak when he had to pay his own bill -- he could easily pay the 10% increase under the new arrangement. The other diners tired of eating cheese sandwiches while watching their friend eat steak -- started ordering steak as well. Some of them began ordering lobster. This is when the arrangement collapsed -- as they were all living well beyond their means.

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The problem with the revenue arrangement is that the population who pay virtually nothing in taxes still get to vote on what services will be offered -- and at what level. The current deficit spending is the result of everyone looking for a free lunch. Politics is the art of convincing everyone that someone else is picking up the check.

This system can work (albeit inefficiently) if the percentage difference is small and the penalty for non-compliance is huge. When the difference is great the system will collapse, fewer people will participate, and costs will shift downward. Participation is why revenues always increase when tax rates are cut -- and why Forbes plan makes sense.

[superleeds]

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So -- the money comes from the rich (because they have it), half of the people pay nothing (because they don't have it), and it is spent for the benefit of all. But that's not wealth redistribution in your mind.

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The problem with the revenue arrangement is that the population who pay virtually nothing in taxes still get to vote on what services will be offered -- and at what level. The current deficit spending is the result of everyone looking for a free lunch.

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You seem to be suggesting that all government taxes come from income. The half that pay nothing still pay to live somewhere, still eat and drink, still buy treats. They pay taxes just not income tax - they don't all get the free ride you believe.