View Full Version : Flat Tax- Yes or No?
http://en.wikipedia.org/wiki/Flat_tax
A little information on the idea and principals for flat taxes can be found above. I personally would love to a see a flat tax implemented in this country.
The Negative Income Tax (NIT) which Milton Friedman proposed in his 1962 book Capitalism and Freedom is a type of flat tax. The basic idea is the same as a flat tax with personal deductions, except that when deductions exceed income, the taxable income is allowed to become negative rather than being set to zero. The flat tax rate is then applied to the resulting "negative income," resulting in a "negative income tax" the government owes the household, unlike the usual "positive" income tax, which the household owes the government.
For example, let the flat rate be 20%, and let the deductions be $20,000 per adult and $7,000 per dependent. Under such a system, a family of four making $54,000 a year would owe no tax. A family of four making $74,000 a year would owe tax amounting to 0.2(74,000-54,000) = $4,000, as under a flat tax with deductions. But families of four earning less than $54,000 per year would owe a "negative" amount of tax (that is, it would receive money from the government). E.g., if it earned $34,000 a year, it would receive a check for $4,000.
The NIT is intended to replace not just the USA's income tax, but also many benefits low income American households receive, such as food stamps and Medicaid. The NIT is designed to avoid the welfare trap--effective high marginal tax rates arising from the rules reducing benefits as market income rises. An objection to the NIT is that it is welfare without a work requirement. Those who would owe negative tax would be receiving a form of welfare without having to make a try to obtain employment. Another objection is that the NIT subsidizes industries employing low cost labour, this objection can also be made against current systems of benefits for the for the working poor.
I like this system. It gives people an incentive to work harder (the government taxing them at the same rate regardless of income) and helps those in the economy who are working hard, and have a lot of dependents.
Marshal Murat
02-26-2007, 00:08
It takes money to make money.
However, the percentage rate and other variables need to be decided.
I like the idea of a flat tax though. It'll simplify things, but the 'negative tax' or whatever is going to make taxes more confusing.
Another source for the tax I'm referring to:
http://en.wikipedia.org/wiki/Negative_income_tax
A negative income tax (abbreviated NIT) is a method of tax reform that has been discussed among economists but never fully implemented. It was developed by Juliet Rhys-Williams in the 1940s and later by United States economist Milton Friedman in 1962. Negative income taxes can implement or supplement a guaranteed minimum income system.
A negative income tax would replace the current progressive income tax system used throughout most of the Western world. This would be replaced by a flat tax of, say, 25%, but each taxpayer would also be given $10,000 by the government. Thus a person earning only $4000 per year would pay $1000 in taxes for a net income of $13,000.
$10,000 + $4000 - $1000 = $13,000 net income (Overall, they would receive a net gain of $9,000 from the government.)
A person making $40,000 would be at the break-even point, essentially paying no taxes.
$10,000 + $40,000 - $10,000 = $40,000 net income
A person making $1,000,000 per year would pay close to the full 25% tax.
$10,000 + $1,000,000 - $250,000 = $760,000 net income
Contents
[hide]
* 1 Specific models
o 1.1 Proponents
o 1.2 Critics
o 1.3 Flat Tax with Negative Income Tax
* 2 Guaranteed minimum income
* 3 Implementation
* 4 See Also
* 5 External links
[edit] Specific models
Milton Friedman proposed a model in which a specified proportion of unused deductions or allowances would be refunded to the taxpayer. If, for a family of four the amount of allowances came out to $10,000, and the subsidy rate was 50% (the rate recommended by Friedman), and the family earned $6,000, the family would receive $2,000, because it left $4,000 of allowances unused, and therefore qualifies for $2,000, half that amount. Friedman feared high subsidy rates as those would lessen the incentive to obtain employment. He also warned that the negative income tax as an addition to the "ragbag" of welfare and assistance programs, would only worsen the problem of bureaucracy and waste. Instead, the negative income tax should immediately replace all other welfare and assistance programs on the way to a completely laissez-faire society where all welfare is privately administered.The negative income tax has come up in one form or another in Congress, but Friedman opposed it because it came packaged with other undesirable elements antithetical to the efficacy of the negative income tax. Source: Free to Choose.
[edit] Proponents
[edit] Critics
Its main drawback is the same as in almost any income-based tax system: it requires considerable reporting and supervision in order to avoid fraud. In fact, the incentive to commit fraud may be increased with an NIT since the monetary reward for fraud could be larger than a taxpayer's total tax liability. Critics claim that the added expense of policing fraud would more than offset the reduction in administration resulting from the cancellation of current welfare services.
Another criticism is that the NIT might reduce the incentive to work, since recipients of the NIT would receive a guaranteed minimum wage in the absence of employment.
[edit] Flat Tax with Negative Income Tax
The effort for reporting and supervision can be very significantly reduced. A flat rate income taxation with tax exemption implements a negative income tax as well as it maintains an actual tax rate progression at extremely low administrative cost: This is achieved by paying a tax on the tax exemption to all taxpayers, e.g. in monthly payments. The tax on the tax exemption is computed by applying the nominal flat tax rate to the exemption. The tax on the income is drawn directly from the source, e.g. from an employer. The tax on income is computed by applying the nominal flat tax rate to the income.
This simple method results in an effective progressive rate taxation (although the tax rate for the taxes drawn at the source is flat) which is positive once the income exeeds the tax exemption. If, however, the income is less than the tax exemption, the effective progressive rate actually becomes negative without any involvement by any tax authority. As for the positive progression, only very high incomes would lead to an actual tax rate which is close to the nominal flat tax rate.
The tax on tax exemption also can be understood as a tax credit, which is paid back once an income has reached the level of the tax exemption. This level marks the point where paid taxes and the tax credit are equal. Above that point the state earns taxes from the taxpayer. Below that point the state pays taxes to the taxpayer.
Flat tax implementations without the provision of a negative income tax actually need an additional effort in order to avoid negative taxation. For such a tax, the exemption only can be paid after knowing the earned income. Flat tax implementations with negative income tax allow to pay the tax on the tax exemption independent of the amount of the actual income.
[edit] Guaranteed minimum income
A negative income tax can be, but is not necessarily, a guaranteed minimum income (GMI; also known as a basic income). A GMI has to provide enough money to survive on; a NIT could be as low as few hundred dollars and a 2% tax rate implemented by a city government. GMI systems also often have other major reforms, such as the elimination of the minimum wage and the ending of most current social welfare programs.
[edit] Implementation
While the notion has long been popular in some circles, its implementation has never been politically feasible. This is partly because of the very complex and entrenched nature of most countries' current tax codes: they would have to be rewritten under any NIT system. However, some countries have seen the introduction of refundable (or non-wastable) tax credits which can be paid even when there is no tax liability to be offset, such as the Earned Income Tax Credit in the United States and working tax credit in the UK. Under Nixon, a NIT proposal almost made it though Congress. At first Friedman lobbied hard for it, but when the NIT proposal was going to be in addition to the current system, instead of in place of it, Friedman ended up fighting it.
Marshal Murat
02-26-2007, 00:27
Anything else other than wikipedia? As great as the site is and all, something more substantial would be appreciated.
If you can.
http://www.cis.org.au/policy/aut2001/polaut01-4.htm
Has to do with Australia especially, but can be applied to the United States too.
Reforming Wages and Welfare Policy: Six Advantages of a Negative Income Tax
by John Humphreys
Click here for PDF version
The replacement of all current welfare and wage provisions with a universal but minimal negative income tax would create jobs and reduce welfare dependency.
Current welfare policy is clearly inadequate. The cost to government has blown out, yet poverty continues and special interest groups continue to seek more money.
The federal government will spend $66.3 billion on Social Security and Welfare in the financial year 2000-01. 1 This amounts to 40.9% of all Common-wealth government expenditure and is a major driver behind our heavy tax burden. Using data for 1995, it can be shown that if we gave all Government spending on Social Security and Welfare directly to those people below the Henderson Poverty Index (HPI), each family could receive some $55,520 per year (or $1067.68 per week), exceeding the HPI by 264%.2
Despite this gross over-expenditure, poverty levels in Australia have risen from 4% in 1966 to 10.7% in 1981-82 (including the Whitlam ‘anti-poverty’ Government), and to 16.9% in 1989-90. 3 A further irony is that welfare policies in Australia have entrenched some people in poverty cycles and perpetuated the marginalisation of certain sectors in society. For many low income families earning around $25,000 per year, the Effective Marginal Tax Rate (EMTR) is about 85%; for some families this rate exceeds 100%.4
Clearly, current welfare policy in Australia has led to the expansion of complex, inefficient and ineffective government expenditure and higher taxes while failing to address—and to some extent worsening—the position of the disadvantaged. It has also left us with a legacy of dependency, an entrenched reliance on government and incentives for individual irresponsibility.
Wages policy
Australia’s failed welfare system is supplemented by a failed wage system. Ever since the 1907 Harvester judgement, the concept of a minimum wage has been a cornerstone of government policy towards the working poor. But again, in an irony not yet understood by its socialist-minded supporters, the minimum wage has failed to help those most in need. It has also come at a considerable cost, and has relegated many Australians to unemployment and the failed processes of the welfare system.
A survey of recent studies shows the elasticity of labour demand in the range of –0.6 to –0.85. 5 This means that for every increase in wages by 10%, there will be a decrease in labour demand (i.e. employment) by between 6% and 8.5%. As this empirical evidence suggests, it is no coincidence that unskilled, young and rural workers, who rely most on the minimum wage, experience higher rates of unemployment.
The minimum wage acts as a price floor. This leads to an increased supply (of labour) and decreased demand (of labour), resulting in excess supply (unemployment). By removing the minimum wage and allowing people to work at a wage level representing their productivity, the supply of labour would equal the demand for labour, and unemployment would be significantly reduced.
A return to private philanthropy is one possible way out of the current mess. In the pre-welfare era, voluntary philanthropy tended to be more effective and had fewer negative side effects than its public cousin. When the government nationalised welfare and introduced ‘forced’ philanthropy, however, voluntary efforts largely stagnated.
Unfortunately, policies are easier to introduce than they are to abandon. There is a degree of hysteresis due to the government’s actions—that is, the negative effects on private philanthropy cannot be undone overnight—and current expectations and government dependence take time to reverse.
The abolition of the worst types of poverty could be considered in a public context if private philanthropy did not entirely succeed. Such public provision, however, would have to be implemented in a way that not only avoids the pitfalls of the current system, but also is sufficiently unobtrusive to encourage the growth of private philanthropy to achieve most redistribution. A better welfare system would involve the replacement of all current welfare and wage provisions with a universal, but minimal, negative income tax.
The Negative Income Tax (NIT)
When we earn above the tax-free threshold (TFT), we must pay a portion of our income to the government in tax. The NIT simply extends this principle so that people who earn less than the TFT receive tax.
Table 1 below illustrates how this would work with a TFT of $10,000 and a tax rate of 50%. The NIT provides an income guarantee for the unemployed (where gross income = $0), and supplements the incomes of the low paid while providing incentives to increase earnings through constant and low Effective Marginal Tax Rates.
A further rationale for the NIT is that it can accommodate fluctuating incomes.6 For example, if a person earns $20,000 a year for two years, that person pays $10,000 tax all up (using the above example). If, however, a person earns $40,000 in one year and nothing the next, then that person will pay $15,000 while having earned the same in aggregate. This is because the first person takes advantage of the TFT twice, while the second person cannot. If there was a NIT then the second person would receive $5,000 in the second year, and pay a total of $10,000 over the two-year period, equal to the amount the first person paid.
The NIT thus completes the logic of having an income tax with a TFT. Further, as the NIT supplements the incomes of the working poor it also substitutes for the current wages policies that are aimed at assisting them; this means that the minimum wage can be abolished.
It should be noted that the above example is indicative only of the logic of the NIT, and not of the actual preferred level. The proposal under discussion here is for a limited negative income tax. Given that the goal of welfare should be the abolition of absolute poverty,7 it seems inappropriate for the level of assistance to exceed an absolute poverty line.
The Henderson Poverty Index (HPI) is not an adequate poverty line as it is indexed to Average Weekly Earnings (AWE) and is subsequently a relative measure of income inequality, not an absolute measure of poverty. An alternative poverty measure is the Real Poverty Line.8 This measure takes the original finding of the Henderson report as a starting base, thus avoiding accusations of an overly conservative starting point, and then indexes this value for the Consumer Price Index to maintain the level in real terms.
The Real Poverty Line (RPL) is at 84% of the HPI, which would decrease the poverty line for a family of four from $404.90 per week to $339.07. To ensure benefits neutrality under the current system, $574.45 would have to be paid to a family of four.9 This amount could be decreased by some 40%, and would still ensure the eradication of all absolute poverty in Australia.
Consequences of the NIT
The consequences of moving towards the NIT can be categorised into six major issues. These are the effect on:
1. poverty and on the poor;
2. unemployment through the abolition of wage regulation;
3. the cost of welfare to government, and subsequently on our tax burden;
4. the administrative simplicity of welfare provision;
5. macroeconomic variables such as productivity and growth; and
6. social capital and individual responsibility.
Reduces poverty
A limited NIT, around 40% lower than the current level, ensures the eradication of absolute poverty in Australia, provided it is delivered universally and without restrictions. Further, the provision of the NIT to low income earners means the working poor are supported, although the greatest benefit to the poor from the NIT is a reduction in the size of the poverty trap.
The NIT also allows for a lower and more constant Effective Marginal Tax Rate (EMTR). As was previously mentioned, the current EMTR often approaches, and can sometimes exceed 100% (that is, for every $1 you earn, you lose $1 to the government). By reducing this rate, the NIT overcomes the current disincentive to work and earn, allowing people to escape the poverty cycle. In this way, it offers a real chance for individuals to improve their wellbeing by genuinely providing the opportunity for upward mobility.
Reduces unemployment
The NIT supplements the wages of low income earners, removing the need for wage regulations and the minimum wage. As already discussed, an elasticity of labour demand around –0.75 would provide an increase in employment of 7.5% for a decrease in wages of 10%. While it would be unlikely that the competitive pressures in the labour market would allow wages to drop by such a degree, there would be some adjust-ment, leading to some positive employment effect.
Taking advantage of this trade off has been proposed at various times in recent years. In 1997, Dawkins and Freebairn proposed a trade off between decreasing the real minimum wage and providing equivalent tax credits, and advocated an eventual extension of this system into a more complete negative income tax.10 This was echoed by a group of five prominent economists in an open letter to the federal government a year later.11 More recently, Des Moore, Director of the Institute of Private Enterprise, has suggested that the Government decrease the minimum wage rate (and introduce a tax credit scheme), with a possible outcome of creating 900,000 new jobs.12
Reduces Social Security and Welfare Spending
While welfare rates could be cut by around 40%, these savings must be adjusted for two important offsetting factors. First, the NIT is not only paid to the unemployed, but also the working poor. To be viable, it would require an increase in the tax-free threshold. This would increase the fiscal cost of the NIT vis-à-vis the current system.
Yet, as already discussed, the NIT would have positive effects on employment and upward mobility. It would be unlikely that many people would receive the complete payment, given the incentives to take on part-time work (that is, low EMTRs) and the fact that more work would be available. The cost of welfare policies is obviously highly dependent on the level of unemployment. With lower unemployment under the NIT, the fiscal saving would likely be significant.
Further, with increased employment and upward mobility it is likely that national income (and subsequently income tax) would increase under the NIT, decreasing the cost of its introduction. While the cost of current policies tends to rise over time, the NIT will remain constant in real terms, and will therefore decline as a percentage of GDP. The NIT will therefore have a lower cost in the short term, and will continue to decrease in the long term. This could be used to fund considerable tax cuts to return wealth to those who create it, further decreasing the EMTR and encouraging higher national growth and productivity.
Simplifies administration
By combining the tax and welfare components of the public service, considerable efficiencies will be achieved. Providing assistance through the tax system provides informational economies of scale, and cuts back ongovernment waste and inefficiency. In addition, by reducing welfare policy to only one element—the NIT— it would be much easier for the recipient to understand and access than the complexities of the current benefits system.
Boosts productivity
By increasing employment Australia will produce a bigger bundle of goods and services to be shared around. Lower EMTRs will reduce previously dominant perverse incentives, which should lead to greater marginal labour productivity and subsequently national growth.
National growth will also be stimulated by the tax cuts made possible by the decreased cost of welfare under an NIT system. National growth is obviously a worthy goal in itself, but it should not be forgotten that it is also positively correlated with life expectancy, infant survival, education and other quality of life indicators.
Builds social capital
Social capital is positively affected by the return of individual responsibility and the reduction of welfare dependency. While any welfare programme will continue to have negative effects in this area (as does the NIT), a limited NIT as discussed here acts to minimise such negative consequences. The increase in employment and upward mobility will lead to higher self-esteem, greater social participation, more opportunities and less hopelessness among people.
Conclusion
The current welfare system is failing us. The alternative proposed here is a limited NIT. While private philanthropy should be considered a primary and effective vehicle for assistance, replacing current welfare and wages policy with a limited NIT would provide real poverty alleviation while increasing employment and decreasing the other negative effects of welfare.
This policy will not work, however, if the current bloated levels of public forced redistribution are maintained. Milton Friedman has long advocated an NIT, but has opposed such a policy as an addition to current welfare instead of a replacement. Charles Murray also outlines how an overly generous NIT can led to perverse outcomes, and simply reinforce the welfare state.13 Such warnings should not be dismissed lightly, and highlight the need to promote a minimal and simple NIT, against the pressures of the welfare lobby.
The benefits described above are dependent on a willingness to undertake fundamental reform of the welfare sector, challenging previously held beliefs in the welfare state and providing only a limited safety net to achieve real outcomes in a more efficient manner.
Seamus Fermanagh
02-26-2007, 01:36
Preferable to the current graduated system, and more honestly set up as a means of wealth distribution.
I prefer a sales tax/pay as you go system with uniform payments (designed to return all money below level X) to all taxpayers.
Randarkmaan
02-26-2007, 02:00
I'm for the welfare state, so no flat tax for me... Think about even though a guy who earns 500 000 dollars a year gets taxed at 50% his income he still has 250 000 left, which is a lot and more than enough to survive and it is more money than what a guy who earns 50 000 and is taxed 30% would have 35 000 left, which is not as much. But if the guy who earns 500 000 pays a higher percentage tax, then his (and everyone else who earns lots of money) tax money can be used to provide: Free health care, free schools and various welfare and other services. Still the guy who earns more money has more money after taxes even though he was taxed at a higher percentage, thus rewarding "hard" work.
EDIT: Corrected embarrasing math error...
I like the notion of a flat tax, but frankly, I like almost any system that's more streamlined than what we've got now. With our arcane systems of deductions and loopholes it gives too much discretion to politicians who use our tax system to buy votes.
We need to set up something that's fair and easily understandable- and then leave it the hell alone. :yes:
Marshal Murat
02-26-2007, 02:10
Well I was thinking about a modified tax.
X and below Y%
45,000 and below 20%
100,000 and below 30%
150,000 and below 40%
etc. etc.
More tax on richer people.
While not a flat tax, it would do something.
Sasaki Kojiro
02-26-2007, 02:12
Isn't it a lot less taxes than our current system? Where does the extra money come from?
I'm for the welfare state, so no flat tax for me... Think about even though a guy who earns 500 000 dollars a year gets taxed at 50% his income he still has 250 000 left, which is a lot and more than enough to survive and it is more money than what a guy who earns 50 000 and is taxed 30% would have 15 000 left, which is not as much. But if the guy who earns 500 000 pays a higher percentage tax, then his (and everyone else who earns lots of money) tax money can be used to provide: Free health care, free schools and various welfare and other services. Still the guy who earns more money has more money after taxes even though he was taxed at a higher percentage, thus rewarding "hard" work.
You are missing the point. Someone who earns 500,000 has earned that income. The government has no right to punish him for his success by taking a large share of his income away to give to someone else.
Marshal Murat
02-26-2007, 02:24
:china:
Sasaki Kojiro
02-26-2007, 02:29
You are missing the point. Someone who earns 500,000 has earned that income. The government has no right to punish him for his success by taking a large share of his income away to give to someone else.
It's not like they give him an electric shock for every $1,000 dollars more he earns.
Aye. A reduced reward is not a punishment.
It's not like they give him an electric shock for every $1,000 dollars more he earns.
I never implied they did. That comment wasn't really relevant.
Aye. A reduced reward is not a punishment.
I guess if you consider the government letting you keep your own money a reward, then I suppose yes.
Papewaio
02-26-2007, 03:51
I see myself as a capitalist.
I see waste not just with government but any large scale enterprise. With golden handshakes for corporate executives and larger retirement benefits for politician, it is a laugh to assume that corporations are any more efficient with my money as a user.
If we are in an economic war, then my money is my army. I see my taxes as my part in modern day conscription. Until my country has the ability to raise capital through its own investments then my money is at its service. If I don't like what it is doing then I can vote... which is easy since I have compulsory attendance at local, state and federal elections, once there I might as well cast my preferential vote. Sure I look forward to a time when I don't have to pay taxes, at the same time I worry about the consequences of living in a nation that neither needs my vote nor my money.
I guess if you consider the government letting you keep your own money a reward, then I suppose yes.Indeed. :dizzy2:
It's our money, we've earned it. The government isn't "rewarding" us by not taking away what we've earned.
It's not like they give him an electric shock for every $1,000 dollars more he earns.No, just progressively taking away more and more of what he's worked for and earned.
Marshal Murat
02-26-2007, 04:05
Working hard in that big leather plush chair, behind that top-of-the-line computer, in the big shiny building that everyone hates because it represents what they don't have.
Yep. see that hard work.
Well I was thinking about a modified tax.
X and below Y%
45,000 and below 20%
100,000 and below 30%
150,000 and below 40%
etc. etc.
More tax on richer people.
While not a flat tax, it would do something.
It's actually more a tax on poor, too. All you are doing is raising taxes.
$0 $7,300 10% of the amount over $0
$7,300 $29,700 $730 plus 15% of the amount over 7,300
$29,700 $71,950 $4,090.00 plus 25% of the amount over 29,700
$71,950 $150,150 $14,652.50 plus 28% of the amount over 71,950
$150,150 $326,450 $36,548.50 plus 33% of the amount over 150,150
$326,450 no limit $94,727.50 plus 35% of the amount over 326,450
http://www.irs.gov/formspubs/article/0,,id=133517,00.html
Working hard in that big leather plush chair, behind that top-of-the-line computer, in the big shiny building that everyone hates because it represents what they don't have.
Yep. see that hard work.
If it's easy, why aren't you doing it?
Please Gentlemen, the point of this thread wasn't to argue about higher tax rates, but would this plan actually work if implemented.
Marshal Murat
02-26-2007, 04:41
I think it'll work
Those figures were made up, so if the figures are lower, good!
They just don't recognize my potential!
Back on subject.
I think it might work, but the structure for it needs to be worked out and explained to everyone. How it is beneficial, helps those who haven't earned enough to get by. This is better than a minimum wage increase.
Back on subject.
I think it might work, but the structure for it needs to be worked out and explained to everyone. How it is beneficial, helps those who haven't earned enough to get by. This is better than a minimum wage increase.
Exactly. Social Welfare programs could be drastically cut or even eliminated. It benefits the lower class in society, while taxing the wealthy at a fair, even rate.
Flat Tax- Yes or No?
No. But being Canadian my tax brackets are much more fair, to my sensibilities, than US ones.
Ours
$0 - $8,839- 0%
$8,839 - $36,378- 15.25%
$36,378 - $72,756- 22%
$72,756 - $118,285- 26%
over $118,285- 29%
gunslinger
02-26-2007, 07:58
One of the advantages of this system seems to be that it eliminates a great deal of the overhead from welfare programs by "cutting a check" for the negative tax rate. Unfortunately, a great deal of that overhead is a necessary evil in order to prevent misuse. There is a good reason that most welfare systems don't hand out cash which can be taken to the nearest casino or bingo hall. Instead, they hand out stamps or debit cards which can only be used for food or other approved purposes or traded to the local crack dealer for 1/4 of face value.
I will also point out that in the U.S. it is already possible to have a negative tax rate due to the child tax credit and other tax credit schemes.
I am not completely swayed one way or the other about all the answers to tax issues, but I'm steadily leaning toward the people who suggest eliminating all of the income taxes and depending soley on a sales tax (which would not apply to basic necessities such as food).
ShadeHonestus
02-26-2007, 08:17
I am not completely swayed one way or the other about all the answers to tax issues, but I'm steadily leaning toward the people who suggest eliminating all of the income taxes...
Amen, we've been paying for the civil war for quite long enough, lawl.
yesdachi
02-26-2007, 18:08
I like the idea of a flater tax. I think everyone should be responsible to contribute x amount to society and then there should be exceptions for people and businesses that either need help or have given more than their share.
I think a graduated scale to rape people and businesses that are successful is very anti-American. I also think people and businesses that don’t share the wealth with those that help make them successful are anti-American. I encourage good pay, fair bonuses and open communication about the company’s financial standing (good or bad). With every company I have worked/consulted for. All the marketing in the world is not as valuable as a workforce that feels valued and appreciated.
Preferable to the current graduated system, and more honestly set up as a means of wealth distribution.
I prefer a sales tax/pay as you go system with uniform payments (designed to return all money below level X) to all taxpayers.
Ditto!
doc_bean
02-26-2007, 21:07
I'm sligthly pro, though I don't believe I'll end up paying less. There should be a certain amount of income that isn't taxed though.
Honestly it wouldn't make much of a difference here I believe, it will just simplify things a bit.
King Henry V
02-26-2007, 21:46
The main flaw I find for the graduated tax system is this:
Person A and Person B both earn £15/hour.
A works for 30 hours/week and B works for 60/week.
A's salary is 15x30x52 = £23400
B's salary is 15x60x52 = £46800
A is taxed at 15%. However, because B earns twice as much as A, his tax is at 25%.
In the end, A receives £19890. B, on the other hand, receives £35100, which, though he worked 100% more than is A, is only 76% larger than A's.
It doesn't matter that B probably leads a much more comfortable life than A, he should earn twice as much as A because he has worked twice as hard as him. However, this graduated tax penalisies his hard work.
In view of the above, I do support a flat tax rate as it is a greater incentive to hard work. However, there would be a bracket in which taxes would be very low or naught, and another two brackets (above 70000 and above 200 000 for example) in which taxes would be slightly higher. So, not exactly a flat income tax, but definitely flater than what we have now.
This negative income tax does not sound to be a brilliant idea to me. If I understand the principle, the government gives money to those whose income is under a certain level in place of a welfare system. However, this merely gives money to those with lower incomes, regardless of factors such as employment, family siize and other such matters.
I tend to favour more progressive taxation...
--> firstly tax benefits everyone in society, i feel that everyone should contribute to society financially, the problem with flat taxation is that although richer people pay more in actualy cash, the value of that cash in its overall effect to them is less (not well explained) - for a poorer person a tax of 30% can put them below the breadline, while for a richer person earning several times more can be taxed 60% and still live quite happily....
basically this, which i just saw :
I'm for the welfare state, so no flat tax for me... Think about even though a guy who earns 500 000 dollars a year gets taxed at 50% his income he still has 250 000 left, which is a lot and more than enough to survive and it is more money than what a guy who earns 50 000 and is taxed 30% would have 35 000 left, which is not as much.
i dont agree with the notion that the money has been "earned" through hard work, people in lucrative jobs (on average - there are some poor who are lazy, notably in Britain in 1900) work no harder than those in factory jobs, infact if i had a choice between physical labour, and mental labour, i think i would choose the latter... there are exceptions of those from lower income backgrounds succeeding, however those individuals tend to be exceptionally hard-working, and have some natural intelligence/capacity to be educated (something many people are not lucky enough to have). Many of those who are in good jobs are there because of their background and virtue of birth, not the amount of work they put in at the start (a horrible generalisation, but in many cases true)
I dont see why people can object to paying for health services and the country's running as a whole, it benefits everyone, the payments must be seen in terms of the amount each person is able to pay, not the percentage itself.
bit long :thumbsdown:
:2thumbsup:
Seamus Fermanagh
02-26-2007, 22:09
The main flaw I find for the graduated tax system is this:
Person A and Person B both earn £15/hour.
A works for 30 hours/week and B works for 60/week.
A's salary is 15x30x52 = £23400
B's salary is 15x60x52 = £46800
A is taxed at 15%. However, because B earns twice as much as A, his tax is at 25%.
In the end, A receives £19890. B, on the other hand, receives £35100, which, though he worked 100% more than is A, is only 76% larger than A's....
It doesn't matter that B probably leads a much more comfortable life than A, he should earn twice as much as A because he has worked twice as hard as him. [emphasis added, not in KHV's original post]... However, this graduated tax penalisies his hard work.
In view of the above, I do support a flat tax rate as it is a greater incentive to hard work. However, there would be a bracket in which taxes would be very low or naught, and another two brackets (above 70000 and above 200 000 for example) in which taxes would be slightly higher. So, not exactly a flat income tax, but definitely flater than what we have now.
This negative income tax does not sound to be a brilliant idea to me. If I understand the principle, the government gives money to those whose income is under a certain level in place of a welfare system. However, this merely gives money to those with lower incomes, regardless of factors such as employment, family siize and other such matters.
More time at work does not mean working harder. And, no, I'm not trying to cheap shot your point. If we have person Y working only 30 hours a week but generating a 10% return on investment for her clients while person Z works 60 hours a week cutting lawns for his clients, person Y is going to get a lot more money.
Most people work hard, but the dominant issue in earnings is what value does the market place on their product or service. Labor has zero value to the consumer. The consumer doesn't care if you take 20 minutes to cut their lawn or 7 hours as long as they don't have to spend 2 hours cutting and trimming themselves. It's VALUE is determined by how much those two hours are worth to the consumer and or the quality of the finished lawn, NOT how long it takes or how hard one labors to get there.
If we posit two precisely equivalent individuals doing the exact same work for the same wage, then your point about inequity becomes relevant. B is keeping less of what they earned than does A.
Even then, however, I view the inequity differently. I view both A & B as receiving the same government services, yet B is forced to pay a higher price for the same service. By this logic, it would be appropriate for my local grocer to charge me less for a loaf of bread than he would charge Bill Gates.
ShadeHonestus
02-26-2007, 22:18
When one says "earned" people forget that it means not only what they do as a job, but what they did to get there and the work they put in prior, not to mention the money they paid out for education. I love how people argue how comfortably a person who earns more can stand to pay and still live. Why is it up to a bureaucratic government to decide to what extent I can or cannot enjoy what I achieved. Redistribution of wealth beyond as a principle of punishment and class envy is vile.
When I hear posts about how generally people get where they are by birth or privilege, I swear they can't know many people. Everyone I know, got there as a direct result of what they chose to do and regardless of success will admit it. Maybe its just because I know a lot of honest people who face life honestly. I've even known a lot of people who have been genuine victims, but know that they control their lives outside of what may have happened to them.
This whole subject reminds me of a story told by my brother's former secretary. One day opposing counsel entered my brother's office to negotiate a settlement. The opposition was well put off because he basically had little legal ground to stand on. He proceeded to attempt a belittling of my brother for his privileged life as an attorney working for such a prestigious firm and how he was born of privilege. My brother just sat there and listened to him rant. After the settlement was finalized my brother just looked at him and stated the truth, "I shoveled hog s*** to pay for college and law school. Now if you'll excuse me I have a meeting."
Important to note that he did that, while being a security guard at the St. Louis Science Center, graduating in the top 2 of his class and being editor of the law review at the law school of Washington University in St. Louis. He also volunteered time to coach little league and middle school summer leagues in St. Louis. One of his teams made the city final, but they lost...
Redistribution of wealth beyond as a principle of punishment and class envy is vile.
only for those the wealth is being redistributed away from...
When I hear posts about how generally people get where they are by birth or privilege, I swear they can't know many people. / Important to note that he did that, while being a security guard at the St. Louis Science Center, graduating in the top 2 of his class and being editor of the law review at the law school of Washington University in St. Louis. He also volunteered time to coach little league and middle school summer leagues in St. Louis. One of his teams made the city final, but they lost...
is this representative of the whole "class", or just individuals, noone is saying that all middle class people are lazy etc. its just that some are, and those of lower classes who are equally hard working surely deserve the same living standards as (the equally hard working) middle class.
:2thumbsup:
yesdachi
02-26-2007, 22:42
only for those the wealth is being redistributed away from...
Why should someone get that which they haven’t worked for redistributed to them?
why would someone want that which they haven’t worked for at all?
Why should someone get that which they haven’t worked for redistributed to them?
those of "lower classes" who are equally hard working surely deserve the same living standards as (the equally hard working) middle class.
:2thumbsup:
ShadeHonestus
02-26-2007, 22:58
those of "lower classes" who are equally hard working surely deserve the same living standards as (the equally hard working) middle class.
So how do you quantify hard work being equal?
Blodrast
02-26-2007, 22:58
When I hear posts about how generally people get where they are by birth or privilege, I swear they can't know many people. Everyone I know, got there as a direct result of what they chose to do and regardless of success will admit it. Maybe its just because I know a lot of honest people who face life honestly. I've even known a lot of people who have been genuine victims, but know that they control their lives outside of what may have happened to them.
As a specific issue, I do know quite a few people (read: many, although that is relative) who got where they are, and will continue to have a good life, because of who their parents were, or what they could offer them.
Your pointing out your brother's example only shows that it is possible, in some cases, to rise through hard work and honesty. More power to him, and them, by all means. However, that doesn't mean that there aren't cases where the same goal is achieved by grace of having been born in the "right" family.
I would even venture as far as to say that from all the people I know, many more have risen through other means than hard, honest work. Most of the ones doing hard, honest work, have a moderately decent life, if that.
ShadeHonestus
02-26-2007, 23:12
I would even venture as far as to say that from all the people I know, many more have risen through other means than hard, honest work.
I would say that I know many who have tried to rise by means outside hard honest work and have fallen flat. Either lacking the substance of those of genuine work ethic and find themselves no longer supported by whatever elevated them to begin with or committing crime.
Most of the ones doing hard, honest work, have a moderately decent life, if that.
What is stopping them from achieving something more than a moderately decent life?
To purposely put a penalty once something reaches a certain level of achievement can only be to retard its growth.
To purposely reward something for lack of achievement is to reinforce the under achievement.
Randarkmaan
02-26-2007, 23:20
What is stopping them from achieving something more than a moderately decent life?
Their paychecks I would guess, there is no such thing as becoming rich solely through hard work, you become rich by picking a job that society feels is worth paying lots of money. Many factory workers work hard (or used to before machines, which has made it a little easier), but because so many are needed society can't afford to pay them lots of money. Which is why redistribution, at least partial redistribution, of wealth is important
ShadeHonestus
02-26-2007, 23:30
Their paychecks I would guess, there is no such thing as becoming rich solely through hard work, you become rich by picking a job that society feels is worth paying lots of money.
I guess I should have stated that when one says "hard work" people forget that it means not only what they do as a job, but what they did to get there and the work they put in prior, not to mention the money they paid out for education. Not to mention due diligence when considering their future.
Or I could just say "personal responsibility."
The market place sorts itself out to a large degree in labor available and the reward offered.
Which is why redistribution, at least partial redistribution, of wealth is important
I'm not saying sink or swim, however radical redistribution as we have in the States at the moment is obviously not the cure. A flat tax and sales tax mechanism would be much better imo.
[edit]Not to mention government has never been a very efficient entity for administering help to those in need. Private initiatives, taken by those of means, of business and ability is much more efficient. Unless you just can't wait until the next time big brother government steps up to the plate and strikes out and everyone is left asking what happens to me now? ala Katrina.
Randarkmaan
02-26-2007, 23:33
I haven't heard of a radical redistribution in the US, indeed I thought you had the opposite! But then I'm pretty ignorant about many things in the US I must admit. But you don't even have free healthcare! Redistribution shouldn't go into the pockets of people, but should be used to fund things which society as a whole can benefit from.
gunslinger
02-26-2007, 23:34
i dont agree with the notion that the money has been "earned" through hard work, people in lucrative jobs (on average - there are some poor who are lazy, notably in Britain in 1900) work no harder than those in factory jobs, infact if i had a choice between physical labour, and mental labour, i think i would choose the latter... there are exceptions of those from lower income backgrounds succeeding, however those individuals tend to be exceptionally hard-working, and have some natural intelligence/capacity to be educated (something many people are not lucky enough to have). Many of those who are in good jobs are there because of their background and virtue of birth, not the amount of work they put in at the start (a horrible generalisation, but in many cases true)
I would prefer a more physically demanding job - - Like second baseman for the St. Louis Cardinals. Unfortunately, due to my BACKGROUND AND VIRTUE OF BIRTH, I wasn't LUCKY ENOUGH TO HAVE parents who valued dedication to organized sports. Also, my parents failed to pass on genes which would give me the physical CAPACITY to play professional baseball. However, the simple fact that I was denied this opportunity in my youth isn't my fault, and I shouldn't be denied all of the benefits that professional baseball players receive. I want the money. I want the babes. I want a team medical staff with access to private MRI and X-RAY machines right at the stadium so I won't have to wait in line at the hospital when I twist my ankle or pull a hammie. After all, advanced medical care is a human right, and if they get it then I should too.
Ok, so this example may be a bit over the top, but let's face it. Some people have more of a capacity to do the top tier jobs than others. Aside from that, some people are always going to have a huge head start in life based on their circumstances. If your parents have the time and money to put you on youth baseball teams and send you to training camps, you'll have a better chance of making the majors than if they didn't. If your parents have the time and money to put you in an exclusive private school and then send you to an Ivy League college, you'll have a better chance of getting rich than if they didn't. If you're as dumb as a box of hammers, but your rich parents know the right people, you'll be more likely to get a comfortable do-nothing job than if they didn't. That's reality, and we can't change it.
The important thing to remember is that no matter how rich they get, we aren't getting any poorer. Whether Bill Gates makes one billion or ten billion dollars next year, my salary will still be the same and have the same buying power.
We have a moral obligation to provide food, shelter, and basic medical care to those who are disabled or unable to provide for themselves through no fault of their own. That is wellfare. Anything beyond that is socialism.
ShadeHonestus
02-26-2007, 23:49
I haven't heard of a radical redistribution in the US, indeed I thought you had the opposite! But then I'm pretty ignorant about many things in the US I must admit. But you don't even have free healthcare! Redistribution shouldn't go into the pockets of people, but should be used to fund things which society as a whole can benefit from.
It basically breaks down like this. 3 out of every 100 Americans pay the same or more than the other 97 combined and that money doesn't even go to a national healthcare system like you state. In reality it goes into the political machine. Through pork barrel spending, subsidies, and federal grants a large portion of what the 3 out of 100 pay in taxes goes to protect the votes of those other 97. This is why the party that prefers higher taxes also loves the fracturing of society into special interest groups of race, sexual preference, income, religion and "values." Why, because you get to keep the 97 votes by pandering to the special interest groups and you also keep them divided enough so they'll never produce a galvanized front for serious change. Its the ultimate in captive political audiences.
Randarkmaan
02-26-2007, 23:55
It basically breaks down like this. 3 out of every 100 Americans pay the same or more than the other 97 combined and that money doesn't even go to a national healthcare system like you state. In reality it goes into the political machine. Through pork barrel spending, subsidies, and federal grants a large portion of what the 3 out of 100 pay in taxes goes to protect the votes of those other 97. This is why the party that prefers higher taxes also loves the fracturing of society into special interest groups of race, sexual preference, income, religion and "values." Why, because you get to keep the 97 votes by pandering to the special interest groups and you also keep them divided enough so they'll never produce a galvanized front for serious change. Its the ultimate in captive political audiences.
That's pretty bad, I can't think of a solution to distribute it more fairly in the US though, beacause... Take free healthcare for an example, in order to obtain that you need public hospitals, or some really nice guy who owns the hospital, and I have this feeling that anyone in the US who suggests public takeovers of private property would be labelled a communist.
ShadeHonestus
02-27-2007, 00:03
That's pretty bad, I can't think of a solution to distribute it more fairly in the US though, beacause... Take free health care for an example, in order to obtain that you need public hospitals, or some really nice guy who owns the hospital, and I have this nagging doubt that anyone in the US who suggests public takeovers of private property would be labeled a communist.
Well yeah, public health care here would be hugely problematic not only politically, but culturaly and logistically. However there isn't even a national program that will provide for open enrollment and education vouchers(secular and parochial). Instead they leave education as massive federal and state spend parties that go to these local inept school boards and the bureaucracy that follows. Do you know that a school gets more money by claiming a child is of "special needs" then they do if they have children who excels? There is a huge issue with parents being upset nationally that their kids are classified as "special" when in reality they aren't. The school will classify them as such to get more funding to basically waste on tenured sacred cows, over paid admins with no performance accountability or worthless programs. On the flip side schools are reluctant to classify a child for "TAG" programs (talented and gifted) as then they'll have to support the increased cost for that student to get those classes yet get diminished returns from the governments.
yesdachi
02-27-2007, 00:10
Originally Posted by Scurvy
those of "lower classes" who are equally hard working surely deserve the same living standards as (the equally hard working) middle class.
:2thumbsup:
What incentive do I have to do anything outside ditch digging or lettuce picking if I am gifted with the same living standards of those who have been educated and worked their way to the top? I do not see how anyone who has not worked for something deserves anything more than what they receive.
I like the token society where the harder/smarter I work the more tokens I can earn and the more tokens I earn the better off my family will be. I am more than happy to loan some of my tokens to someone that would like to use them to attain the success I (or my family) have worked for, but I do not think I should give my tokens to someone that has not worked as hard or as smart as I have.
The rich kid that is given everything by his parents is an exception and only accounts for a very small percentage of the population (at least in the US, IMO). I think most of us work and get paid others have invested in an education and then worked and get paid and still others have made investments (time, money, entrepreneurial endeavors, etc) and are rewarded on their success or failure. For the most part I believe we are all given an equal opportunity to achieve relative success and a redistribution of ones successes or tokens is the most counterproductive thing that can be done.
If someone wants to redistribute their tokens thru charity or community involvement or whatever, that’s great, but it shouldn’t be forced. Forcing someone to give away their success goes against the sprit of America (IMO), as does expecting someone to give you a portion of their success without you actually working for it.
Papewaio
02-27-2007, 00:18
So all the following is maintained by private funds or volunteers and no government funds or regulations:
Roads
Hospitals
Police
Fire Engines
Firemen
Post
Trains
Buses
Planes
Shelters
Military
Teachers
Schools
Nurses
Sewers
Garbage collection
etc
ShadeHonestus
02-27-2007, 00:25
So all the following is maintained by private funds or volunteers and no government funds or regulations:
Roads
Hospitals
Police
Fire Engines
Firemen
Post
Trains
Buses
Planes
Shelters
Military
Teachers
Schools
Nurses
Sewers
Garbage collection
etc
Absolutely not, most of those are paid by state taxes and federal taxes, a number of them particularly state and a number of them local sales tax. However when you look at those things you mentioned you need to look at the percentage of income tax revenue spent on each.
Amtrak, our passenger rail, is the biggest money losing enterprise since, well...ever really. Sewage and garbage is largely paid for by direct fee to municipal or private company. Planes, bailed out by government, money pits except for Southwest Airlines. School construction is largely levied through increased sales tax initiatives.
[edit] If national open enrollment is not adopted with vouchers, you might as well make education an entirely private industry and force competition.
For those that don't know "open enrollment" refers to the ability of parents to choose the school their child goes to regardless of district of residence. In Iowa families were tied to the districts that they lived in, regardless of school quality...huge problems, poor performance, no accountability. Finally that changed...and I happen to have the pen that law was signed with :D
Their paychecks I would guess, there is no such thing as becoming rich solely through hard work, you become rich by picking a job that society feels is worth paying lots of money. Many factory workers work hard (or used to before machines, which has made it a little easier), but because so many are needed society can't afford to pay them lots of money. Which is why redistribution, at least partial redistribution, of wealth is important
Then don't work as a factory worker? :idea2:
It's simple supply and demand. The market pays you for what you are worth. There are an abundant amount of people who can be a factory worker, so their is usually an excess supply of workers, thus their wages isn't very high.
Now, when you have someone with an economics degree for the University of Chicago, and a masters in economics from Harvard, their demand by businesses is very high, while their actually supply is low. Thus, they receive a higher salary.
I'm not saying everyone has to the ability to gain a degree from Harvard, but that's how it works. Life isn't suppose to be fair.
By the way, the reason why society thinks you are worth paying a lot of money, is because you can make someone else a large amount of money. Simple, yes?
Randarkmaan
02-27-2007, 00:47
I'm not saying everyone has to the ability to gain a degree from Harvard, but that's how it works. Life isn't suppose to be fair.
No, but it's possible to make it fairer and still reward those who are able to take an impressive education and get a job to put that education to use.
No, but it's possible to make it fairer and still reward those who are able to take an impressive education and get a job to put that education to use.
You aren't rewarding the ones who work though. You are punishing them by taxing them at a higher rate. They are reaping the benefits of hard work themselves by getting an impressive job and excellent pay/benefits.
AntiochusIII
02-27-2007, 01:02
I'm not saying everyone has to the ability to gain a degree from Harvard, but that's how it works. Life isn't suppose to be fair.Thing is, society was meant to, you know, make in fairer.
________________________________________
Oh, and you people just come off it. Admit that you angered ones are angry because you will be the one to pay more, not out of some precious principles. And admit also that the you who will get more money are praising the redistribution of wealth to high heaven, not because you're honest-to-Marx communistas. Don't give me that work-hard-get-good-life American Dream carrot BS, though admittedly I won't be buying the do-gooders' arguments about how the strawberry picker has an equal strategic and market value to the tech genius and deserves the same in everything either, all respects to the strawberry picker.
Graduated tax doesn't anger me because I'm not the one paying anything just yet, and I think quite honestly the rich have enough leeway with their fancy tax evasion tactics already. It's not like the truly filthy rich and blue blood nobility scum and all that actually paid that much. Considering...wasn't it J.K. Rowling that paid the highest amount of taxes for any individual person in the UK some year back? A writer, even if a particularly popular one? What about all those billionaire CEOs?
Graduated tax kind of hurts the higher echelons of Middle Class, though, so I see why they're pissed off and want an "equal" flat tax.
Papewaio
02-27-2007, 01:54
I agree with a graduated tax. And I hit >40% income tax for my overtime.
The tax rate by itself doesn't say much.
You have to consider where the taxes go... direct and indirect benefits of having better infrastructure. 'Free' Healthcare, 'Free' University Education etc
Cost of Living. To live I need X amount, above X supplies wants. So above the need to live threshold what tax rate should be used?
Buying power of the money left over. My tax could halve, but so what if inflation is rampant and I can only buy a tenth of what I could before.
Also all this is revolving around income worked for... what about passive income?
Blodrast
02-27-2007, 05:14
I would say that I know many who have tried to rise by means outside hard honest work and have fallen flat. Either lacking the substance of those of genuine work ethic and find themselves no longer supported by whatever elevated them to begin with or committing crime.
What is stopping them from achieving something more than a moderately decent life?
Like Randarkmaan said, their paycheck.
(Sorry for coming back to the discussion after quite a while.)
Then don't work as a factory worker?
It's simple supply and demand. The market pays you for what you are worth. There are an abundant amount of people who can be a factory worker, so their is usually an excess supply of workers, thus their wages isn't very high.
Now, when you have someone with an economics degree for the University of Chicago, and a masters in economics from Harvard, their demand by businesses is very high, while their actually supply is low. Thus, they receive a higher salary.
I'm not saying everyone has to the ability to gain a degree from Harvard, but that's how it works. Life isn't suppose to be fair.
By the way, the reason why society thinks you are worth paying a lot of money, is because you can make someone else a large amount of money. Simple, yes?
Ok, I didn't make myself clear, perhaps. Naturally, I was not referring to people who work hard in blue-collar jobs, and wondering myself like an idiot why they can't afford Rolls Royce's. ~:)
No, that's self implied - if you pick strawberries, it goes without saying, you'll consequently have a rather crappy income.
No, what I was referring to was people with a university education and degree, and not in liberal arts or something like that, which are not exactly money-makers for most people (excluding really talented folks, etc).
I was talking about engineers and economists, for example.
They can work hard all their life, and they'll never be more than a desk-hugger, and make enough maybe to go on a short holiday with the wife once a year, if that. And not to some deluxe resort, either.
On the other hand, I know people who got really well-paying jobs (and I mean really-well paying, with prospects of making some on the side, as well, whether legally or not, that's a different story), in the government, working as counselors to some ministers and such. The ONLY reason they got them jobs is because they knew people. Through relatives, and friends - it had nothing to do with their qualifications, or credentials. It was pure, unadulterated nepotism. And then one of them got another job to a friend, and so on.
I know another example who again, came to work as a counselor in the gov't because he had good relationships within the party in power at that time.
I could go on. All of these people have "succeeded", if you want to put it that way. They have relations, power, influence, and, consequently, money. Lots of it. Through hard work ? Pffffft. Puhleeeze. No friggin way.
I know hundreds and hundreds of people who are honest-to-God, conscientious workers (and, again, I DON'T mean gravediggers, or strawberry pickers, or any of that crap), who will meticulously do their job for the rest of their life, and the most they will get out of it is a couple of meaningless promotions, which won't mean squat in terms of money. They'll never "make it", per se.
That's what I was talking about.
Sure, exceptions exist everywhere. Nothing is absolute. But as a rule, the balance, among the people I know, leans very, very much in the favor of relations, cheating, stealing, rather than the poor honest bastard.
I would never be unscrupulous and shameless enough to be one of the former, and I despise the former, but I pity the latter.
Seamus Fermanagh
02-27-2007, 06:37
Thing is, society was meant to, you know, make in fairer.
"Society" is a tool for enhancing survival of the individual, and by extension, the group.
Numerous societies have successfully fulfilled this basic purpose without being remotely "fair."
A "fair" society may well be something to strive for, but history suggests it is the exception and not a requirement.
Like Randarkmaan said, their paycheck.
(Sorry for coming back to the discussion after quite a while.)
Ok, I didn't make myself clear, perhaps. Naturally, I was not referring to people who work hard in blue-collar jobs, and wondering myself like an idiot why they can't afford Rolls Royce's. ~:)
No, that's self implied - if you pick strawberries, it goes without saying, you'll consequently have a rather crappy income.
No, what I was referring to was people with a university education and degree, and not in liberal arts or something like that, which are not exactly money-makers for most people (excluding really talented folks, etc).
I was talking about engineers and economists, for example.
They can work hard all their life, and they'll never be more than a desk-hugger, and make enough maybe to go on a short holiday with the wife once a year, if that. And not to some deluxe resort, either.
On the other hand, I know people who got really well-paying jobs (and I mean really-well paying, with prospects of making some on the side, as well, whether legally or not, that's a different story), in the government, working as counselors to some ministers and such. The ONLY reason they got them jobs is because they knew people. Through relatives, and friends - it had nothing to do with their qualifications, or credentials. It was pure, unadulterated nepotism. And then one of them got another job to a friend, and so on.
I know another example who again, came to work as a counselor in the gov't because he had good relationships within the party in power at that time.
I could go on. All of these people have "succeeded", if you want to put it that way. They have relations, power, influence, and, consequently, money. Lots of it. Through hard work ? Pffffft. Puhleeeze. No friggin way.
I know hundreds and hundreds of people who are honest-to-God, conscientious workers (and, again, I DON'T mean gravediggers, or strawberry pickers, or any of that crap), who will meticulously do their job for the rest of their life, and the most they will get out of it is a couple of meaningless promotions, which won't mean squat in terms of money. They'll never "make it", per se.
That's what I was talking about.
Sure, exceptions exist everywhere. Nothing is absolute. But as a rule, the balance, among the people I know, leans very, very much in the favor of relations, cheating, stealing, rather than the poor honest bastard.
I would never be unscrupulous and shameless enough to be one of the former, and I despise the former, but I pity the latter.
Oh I agree, blood. It's nice to have a discussion with someone who realizes that Ed who mines coal isn't ever going to make the same amount of cash as Mike who runs a fortune 500 company.
I also agree about the degree part. I never said the society we live in was fair, but there are a vast majority of people who work hard and do end up earning a lot of money. My father for an example. I'll discuss that per request, but I'll leave that aside for now.
In short, I do realize many job positions revolve around who you know, rather than what degree you graduated with, but it still isn't fair to punish those who got through the process the correct way. Those people receiving degrees in economics and engineering also do realize the decision they are making by doing so. Common statistics are always available to the see the earnings and advancement chances of a particular profession.
Sorry, if I missed anything. I tried to address your entire post.
CountArach
02-27-2007, 07:49
Gah! Flat tax is something I just don't want to see. I am all for a Socialist Welfare state. This just can't be achieved with Flat Tax.
Fisherking
02-27-2007, 09:15
Gah! Flat tax is something I just don't want to see. I am all for a Socialist Welfare state. This just can't be achieved with Flat Tax.
Why not? Do we need to punish those who succeed or tax the dead for not spending it all when they were alive? How would you feel about it if a rich aunt died and left you $1000000.00 and then have the government take 90% of it? What happens when the rich are poor and you become the new rich?
Have you ever noticed that the government takes in a lot more money then they give out? Is government really your best friend? :inquisitive:
:laugh4:
doc_bean
02-27-2007, 09:46
One of the reason why I`d prefer a simpler tax system is so the rich won`t be able get out from under their taxes so easily.
Stop acting like the rich are such worthy beings, most of them just got lucky. Besides, if they were taxed less they might get payed less (gross).
Fisherking
02-27-2007, 10:34
One of the reason why I`d prefer a simpler tax system is so the rich won`t be able get out from under their taxes so easily.
Stop acting like the rich are such worthy beings, most of them just got lucky. Besides, if they were taxed less they might get payed less (gross).
Why is it about luck or deservedness? Wealth is mostly created. I don't want to see people limited in their creativity or see limits placed upon them. I would like to see you as successful as you choose to be.
Happiness is also created. No one and nothing can make you happy, only you can decide if you are happy.
If someone else has more of something than I have, I don't see why I should take it from them so I can have some of it. It should be a matter of finding a way of acquiring some of what ever it is for myself than robbing someone else. Taxation is only legalised robbery after all.
Wealth is not the answer to all things and depriving people of what they have acquired by any means other than praying upon the weak is not what most of us need to be worrying about.
Just because someone seems to be blessed with abundance is no proof that they have stolen from someone else.
If someone else is happier than you, shall we find some way of taxing him…even though there is no way to transfer that to anyone else?
Let everyone keep as much of what they have as possible and let government find a way to do without it.
And just so you know, I have very limited means, monetarily and have been unable to work for more than 3 years. But I am still happy.
One of the reason why I`d prefer a simpler tax system is so the rich won`t be able get out from under their taxes so easily. Stop acting like the rich are such worthy beings
:2thumbsup:
, most of them just got lucky.
not entirely true, i dislike inherited wealth, but a hard working farther who succeeded in life deserves to give his son a head-start, the problem is really that many of them are not brought up to be as hard-working as their parents
I never said the society we live in was fair, but there are a vast majority of people who work hard and do end up earning a lot of money.
its hardly the vast majority, it would be fair to say that the vast majority of educated hard working people do earn a lot in the end, the problem is many people don't get the educational opportunities they are entitled too
Why not? Do we need to punish those who succeed or tax the dead for not spending it all when they were alive? How would you feel about it if a rich aunt died and left you $1000000.00 and then have the government take 90% of it?
85% would be about right
What happens when the rich are poor and you become the new rich?
it doesnt happen, even when taxed heavily the "rich" live a much "better" life than the "poor" - the money gap is too vast
:2thumbsup:
Fisherking
02-27-2007, 13:43
:
it doesnt happen, even when taxed heavily the "rich" live a much "better" life than the "poor" - the money gap is too vast
:2thumbsup:
Does rhetorical have any meaning for you…besides, wouldn't that depend on the policies and the way they were implemented. Many people find out they are rich by filling in their tax forms you know…so it can happen to anyone, even thought most of what the government considers assets are still owned by the banks.
Some day they may come for you:yes:
Randarkmaan
02-27-2007, 13:46
What happens when the rich are poor and you become the new rich?
To answer your rhetorical question.
Then the new rich will be like the old rich and the old rich will be like the old poor, just as before. Redistributing is not about making the poor richer than the rich it's about trying to even the gap between rich and poor so as to make society seem a bit more fair.
ShadeHonestus
02-27-2007, 14:08
it doesn't happen, even when taxed heavily the "rich" live a much "better" life than the "poor" - the money gap is too vast
:2thumbsup:
Actually the gap between what is considered for those who want to tax the rich is much less than you'd think.
Lets take a look at two incomes not that far apart but at the max and minimum of tax brackets. Think of somebody who makes $61,849 and somebody who makes $94,226 a year. Thats a difference of a little over 30k and it can reasonably be argued that the 94k a year job is more desirable and is worked hard toward just as the 61k job is, however the effort in extra education, diligence, and all around effort is probably greater when it comes to achieving the 94k job, generally speaking.
After federal income taxes only, the person making $61,849 is taking home $46,387 after paying $15,462 in takes. The individual who makes $94,226 takes home $63,131 after paying $31,094 in taxes. So a person who makes 50% more of an income than the other pays twice as much in actual tax dollars. Rember this is just Federal income tax and doesn't take into account further penalties that the higher bracket faces via capital gains taxes which factors in your Federal Income tax bracket to assign that penalty. A person in my state(state tax rate factors as well as federal brackets) that earns 94k is paying an extra $500 for every 5k of capital gains than the 61k income person. The penalty's/taxes are furthered in most states, however as an example, my state of Iowa takes an equal amount for anyone making over 58k, which is an additional 8.98%.
In the end, taking Iowa as an example the end income for the 94k income would be $54,670 while the person making the 61k income takes home $40,833.
The injustice is in the bracketing of penalties for achievement and its effect via capital gains and other taxes, flat tax...only way to go.
Fisherking
02-27-2007, 14:30
To answer your rhetorical question.
Then the new rich will be like the old rich and the old rich will be like the old poor, just as before. Redistributing is not about making the poor richer than the rich it's about trying to even the gap between rich and poor so as to make society seem a bit more fair.
Ah yes! But fairness is about opportunity and not income… is it fair to rob one to pay another?
Edit:
Just back to fairness for a moment, it is mostly a matter of prospective. While most of us might agree that it is wrong to amass much more of something than we can use and it is fair to shear it with the less fortunate, it does not mean that it is fair to take what someone has to satisfy someone else's lust for it, does it?
The Rothschild's and the Kennedy's may have more money than they can seemingly use and because the money is already amassed it can only be taxed on interest and at the death of the owner. But the system also prevents you from passing on what you have earned to your children who are likely not among the rich and powerful…is this fair?
It is still legalised robbery any way you look at it and still a punishment of success. I see nothing fair in demanding more from some than from others. I think it is much fairer to insure everyone have the opportunity to achieve all that he can so long as it is not at the expense of others.
Seamus Fermanagh
02-27-2007, 15:16
If your target is inherited wealth then ANY form of income tax is the wrong tool.
Income is something people work for, what they receive for their labor/skills/reputation etc.
Only some form of direct tax on wealth is going to get at the "old money" for redistribution.
An income tax actually serves to protect the existing members of the old money club from having to cope with too many upstarts.
Wealth redistribution is really the basic disconnect. I simply do not view "evening things out for all" as a desirable goal.
I have nothing against levying taxes for needed services that an individual or small community cannot adequately provide for themselves (foreign policy management, military defense, regulations to prevent fraud and protect basic rights, some transportation infrastructure, etc.).
Since the services provided are provided to all or an effectively equal basis, I have trouble with a financing system that charges some more than others for the same services.
Some few will never be in a position to pay and still provide basic necessities, so the system must be designed to accept this fact and account for it, but I continue to disagree with efforts at wealth redistribution.
Some people in this thread give me the creeps. 85% tax on inheritance? Ha.. ha...ha...
I'm starting to agree with CR in the right to bear arms to keep these nasty socialists away from my money. :yes:
Hosakawa Tito
02-28-2007, 00:18
Should investment income be taxed at the same rate as wages?
ShadeHonestus
02-28-2007, 04:07
Should investment income be taxed at the same rate as wages?
No, suspension or lowering of capital gains taxation always spells growth. Well, if your country has a market economy. The double wammy of capital gains in the states is that the higher you're income the more you're taxed on capital gains as well.
King Henry V
02-28-2007, 16:27
More time at work does not mean working harder. And, no, I'm not trying to cheap shot your point. If we have person Y working only 30 hours a week but generating a 10% return on investment for her clients while person Z works 60 hours a week cutting lawns for his clients, person Y is going to get a lot more money.
Most people work hard, but the dominant issue in earnings is what value does the market place on their product or service. Labor has zero value to the consumer. The consumer doesn't care if you take 20 minutes to cut their lawn or 7 hours as long as they don't have to spend 2 hours cutting and trimming themselves. It's VALUE is determined by how much those two hours are worth to the consumer and or the quality of the finished lawn, NOT how long it takes or how hard one labors to get there.
If we posit two precisely equivalent individuals doing the exact same work for the same wage, then your point about inequity becomes relevant. B is keeping less of what they earned than does A.
Even then, however, I view the inequity differently. I view both A & B as receiving the same government services, yet B is forced to pay a higher price for the same service. By this logic, it would be appropriate for my local grocer to charge me less for a loaf of bread than he would charge Bill Gates.
The example I gave was of course, in ceteris paribum, i.e. all other factors considered as equal, which is how the government views it. They care little whether an employee generates a 500% return on investment or is a huge loss for his employer, they'll tax him according to their rates.
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