Taxes

[The Sum of Awe]

How do you go about taxes:

Free market tax cuts
Flat tax
Rich pays more
Poor pays more
Middle class pays more
Other

 

[The Sum of Awe]

Well I was going to add a poll but I guess it didn't let me...

 

[somethingNiftyhere]

I don't quite understand the question in the OP. Would you please rephrase?

 

[Willamena]

How do you go about taxes

February comes and a T4 arrives in the mail. I download the Tax Express program for the current fiscal year and enter the data, then submit it via NetFile. The balance is direct deposited.

 

[Sunstone]

Like Adam Smith, I'm in favor of progressive taxation.

 

[Penumbra]

I'm in favor of a flat tax.

Here's the thing, though:

-A flat figure (like "everyone pays $5,000") is extremely regressive compared to other tax structures. In this scenario, a person with an income of $10,000 pays a 50% tax rate on their income while a person with an income of $1 billion pays a 0.000005% tax rate on their income.

-A flat consumption tax is more progressive than the flat figure but regressive compared to other tax structures.

-A flat income tax is more progressive than the flat figure and the consumption tax, but more regressive than a wealth tax.

-A flat wealth tax is more progressive than the previous tax structures.


So the way extreme-right fiscal conservatives throw around the phrase "flat tax" makes it sound fair when in reality, it can mean all sorts of things depending on what is being taxed.

In the United States, income tax is progressive for the lower/middle/upper-middle spectrum, but it is flatter than in most other developed countries and gets rather regressive towards the top. For example, if you make $1 billion in dividends and capital gains, then your income tax rate is only 15% on them. Also, statistically speaking, poorer people pay a greater percentage of their wealth in taxes than the top few percent of people, even though the richer people pay far more in total because they have more to pay from. The bottom 50% of people have practically no collective wealth. So in terms of a wealth tax, the U.S. system is regressive.

I have several opinions about taxes, but in general I think approximating a flat wealth tax is fair. I do not, however, think that taxing wealth directly is a good idea, and that tax should be placed on consumption and income in a progressive manner to approximate a flat tax on wealth in a statistically relevant manner. This would be more progressive than the current U.S. system.

 

[somethingNiftyhere]

Ah, OK. I'll go with the flow then.

I believe income tax should be repealed. No taxes on wage or salary earnings. Taxes on capital gains only.

And complete repeal of property tax. Which insures eminent domain has less chance of ripping one's family land out from under them, and America looks less like a Communist state in the process.

Replace property tax with school tax to be paid by those with children in school the same as they would if they were putting their children through on a private school tuition.

 

[Mr Spinkles]

Like Adam Smith, I'm in favor of progressive taxation.

:clap And like Thomas Paine and Winston Churchill, I'm in favor of reasonable taxation on inheritances of large estates.

 

[Willamena]

I believe income tax should be repealed. No taxes on wage or salary earnings. Taxes on capital gains only.

This sounds sensible to me. I assume you would also have the number of government programs drastically reduced.

 

[esmith]

Ah, OK. I'll go with the flow then.

I believe income tax should be repealed. No taxes on wage or salary earnings. Taxes on capital gains only.

And complete repeal of property tax. Which insures eminent domain has less chance of ripping one's family land out from under them, and America looks less like a Communist state in the process.

Replace property tax with school tax to be paid by those with children in school the same as they would if they were putting their children through on a private school tuition.

So,it appears that you want to do away with Medicare, Social Security, Unemployment Insurance, public schools,national defense, welfare, medicaid, food stamps, all Federal Employees, including the President, and Congress, basically the entire Federal Government structure.

 

[somethingNiftyhere]

This sounds sensible to me. I assume you would also have the number of government programs drastically reduced.

I'd suggest a review of Government programs, yes.

And an independent council of voters in the middle and lower class convened to review pork barrel programs specifically. Along with a mediator who would know the political inroads so as to guide that process.


[FONT=Courier New, Arial Rounded MT Bold, Comic Sans MS, Arial]Specific Examples of Pork Barrel Politics[/FONT]

 

[somethingNiftyhere]

So,it appears that you want to do away with Medicare, Social Security, Unemployment Insurance, public schools,national defense, welfare, medicaid, food stamps, all Federal Employees, including the President, and Congress, basically the entire Federal Government structure.

If that's how my statement appears to you, you'll have to live with thinking that's exactly what I said. Without writing it in my name of course. But sure, if that's what makes you happy.

 

[Shuddhasattva]

No taxes. No parasitical governance.

Government either makes its own money via the market place, or no government.

 

[esmith]

Ah, OK. I'll go with the flow then.

I believe income tax should be repealed. No taxes on wage or salary earnings. Taxes on capital gains only.

And complete repeal of property tax. Which insures eminent domain has less chance of ripping one's family land out from under them, and America looks less like a Communist state in the process.

Replace property tax with school tax to be paid by those with children in school the same as they would if they were putting their children through on a private school tuition.

So,it appears that you want to do away with Medicare, Social Security, Unemployment Insurance, public schools,national defense, welfare, medicaid, food stamps, all Federal Employees, including the President, and Congress, basically the entire Federal Government structure.

If that's how my statement appears to you, you'll have to live with thinking that's exactly what I said. Without writing it in my name of course. But sure, if that's what makes you happy.

Well you did say do away with all taxes on wages and salary earnings didn't you? Where are you going to get the money to support all of the programs that I mentioned. Also, I believe that property tax is the main source of income for public schools, correct? So if you do away with property tax and only have the people with children paying for schools, then basically no public schools. Only "charter" schools, correct? Which I am all for.

 

[4consideration]

I'm in favor of a flat tax.

Here's the thing, though:

-A flat figure (like "everyone pays $5,000") is extremely regressive compared to other tax structures. In this scenario, a person with an income of $10,000 pays a 50% tax rate on their income while a person with an income of $1 billion pays a 0.000005% tax rate on their income.

-A flat consumption tax is more progressive than the flat figure but regressive compared to other tax structures.

-A flat income tax is more progressive than the flat figure and the consumption tax, but more regressive than a wealth tax.

-A flat wealth tax is more progressive than the previous tax structures.


So the way extreme-right fiscal conservatives throw around the phrase "flat tax" makes it sound fair when in reality, it can mean all sorts of things depending on what is being taxed.

I haven't really heard anyone talking about a flat tax, like a flat dollar amount, on income taxes -- although there may be some, and I simply missed it.

I have heard discussion about a flat tax rate. What do you think about a flat tax rate, like 10% or 15%?

While that is not progressive, it still does not produce the same kind of extreme difference as shows up in your example.

With a flat tax rate of 15%, a person making $10,000 pays $1,500 (provided there is no allowance in the tax code for basic living expenses) and a person making a billion dollars pays $150,000,000.00.

 

[4consideration]

:clap And like Thomas Paine and Winston Churchill, I'm in favor of reasonable taxation on inheritances of large estates.

Are you in favor of the estate tax as it stands for 2012, and are you in favor of the estate tax as it now stands for 2013?

Why, or why not?

 

[Penumbra]

I haven't really heard anyone talking about a flat tax, like a flat dollar amount, on income taxes -- although there may be some, and I simply missed it.

Nobody's talking about a flat tax or a flat wealth tax; I put those into show the large spectrum of things that you can potentially flatly tax. Most people hear the term "flat" and think of it only in terms of income as though that would be the default one, even though it's just one of many things to potentially tax. (The existence of income tax in this country doesn't go as far back as the founding of the country, for example.)

Whenever people use the term "flat tax", they are usually talking about a flat tax on income. But this is arbitrarily asserted as the fair thing to tax flatly. Why not wealth? Because currently, we're just used to income taxes.

One variant is the proposed "Fairtax", supported by libertarian Gary Johnson and some other fiscal conservatives, which is a flat consumption tax (a federal sales tax, basically) that is made into a slightly progressive consumption tax with a prebate. It would be less progressive in terms of income taxation than the current system, and highly regressive in terms of tax on wealth.

I have heard discussion about a flat tax rate. What do you think about a flat tax rate, like 10% or 15%?

While that is not progressive, it still does not produce the same kind of extreme difference as shows up in your example.

With a flat tax rate of 15%, a person making $10,000 pays $1,500 (provided there is no allowance in the tax code for basic living expenses) and a person making a billion dollars pays $150,000,000.00.

A flat tax rate on income does produce exactly the extreme difference as I showed in my example, because it would be a regressive tax on wealth. In other words, on average, the more wealth you have, the smaller percentage of your wealth you'd be asked to pay in taxes each year.

In your example, a person making $1 billion in income would almost certainly have a financial net worth of billions of dollars, while a person making $10k would likely have a zero or negative financial net worth. So one person would be paying more money in taxes than their entire net worth, while the other person would be paying a tiny fraction of their large net worth in taxes.

Even with the currently somewhat progressive tax on income in the U.S. (with loopholes for millionaires, primarily in the form of low dividend and capital gains taxes), tax on wealth is currently regressive. So, right now, the bottom 50% of people are paying a larger share of their wealth in taxes each year than the top 1% are paying as a percentage of their wealth in taxes each year. Even using myself as an example, I paid a smaller percentage of my wealth in taxes in the last year than I did the year before that, as my income and wealth have grown.

The reason is that people on the lower half of the income spectrum have little ability to build wealth, since their income goes primarily towards the basics of living and they're taxed on it. People on the higher half of the income spectrum have disposable income that they can use to compound and grow into larger and larger wealth. So we have a situation where the entire bottom 50% of the population collectively owns only 3% of the wealth, and the top 1% has over 30% of it. Since we're taxing wealth regressively.

A flat income tax would be far more regressive than even the current system (and the current system has led America to have among the highest of wealth and income inequalities in the developed world), which is why developed countries do not do it. The only way to turn a flat income tax into a tax that isn't regressive on wealth would be to have a very large tax credit: like 40% of all income over $100k is taxed. But that would be a progressive income tax disguised as a "flat" tax.

 

[Alceste]

I'm in favour of a progressive tax rate on all forms of personal income, with a relatively low business tax rate. I dislike consumption taxes because they are regressive by nature - the greater the portion of your income you need to spend to survive, the higher a percentage of your income you are taxed.

On the other hand, I support taxes on particular items with costly consequences, such as fossil fuels and cigarettes. (I would add food containing high fructose corn syrup to the mix).

I think our system is fine. I don't feel like I'm paying too much or too little, and I appreciate the public services I receive in exchange for my contribution.

 

[9-10ths_Penguin]

I'm in favour of a progressive tax rate on all forms of personal income, with a relatively low business tax rate. I dislike consumption taxes because they are regressive by nature - the greater the portion of your income you need to spend to survive, the higher a percentage of your income you are taxed.

I don't think they are. That can be dealt with by handling consumption taxes the same way that sales taxes are handled now (at least here): make the tax rate for necessities like groceries or clothes up to a certain dollar value tax-free or taxed at a reduced rate. Tax luxury goods at a higher rate.

 

[Penumbra]

I'm in favour of a progressive tax rate on all forms of personal income, with a relatively low business tax rate. I dislike consumption taxes because they are regressive by nature - the greater the portion of your income you need to spend to survive, the higher a percentage of your income you are taxed.

To make a consumption tax progressive, you just couple it with a prebate or exclude several types of items.