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US Flat Tax Rate

tytlyf

Not Religious
Any republican tax plan will benefit the 1% over the middle class (flat tax, etc). Any democratic tax plan will benefit the middle class over the 1%. It's that simple.
 

JerryL

Well-Known Member
Not disproven yet.
You've carefully avoided addressing why people would buy into such a venture.
it doesn't actually matter.

But Keynes answered that. They purchase it because they think others will purchase it for more in the future.

If you'd like to see another example: Might I suggest gold.

Gold pays no dividends. All you have is the gold. And mines keep diluting the stock by issuing more gold. Yet gold values go up (and down).

If that's not interesting enough: Art. Art pays no dividends; but people purchase it, and its value goes up and down.

Companies can actually appriciate real value... making more profits, buying more land, etc. How much more interesting they are than gold.

That is to miss the larger picture of why the crash occurred, & why the same problem looms again.
If you believe you are wiser than the worlds most renown economists. I've read their summaries already.
 

tytlyf

Not Religious
He really does. He believes that 9/11 caused the real estate bubble to burst, not a deregulated banking system.
Tom
Many people believe the disinformation put out by the usual suspects. When you work for the wealthiest corporations in existence, it's easy to take advantage of the 'little guy.' After all, the capitalistic model is known for destroying the middle class in almost every case. A pure capitalistic country doesn't have a middle class, it's the 1% and the suckers. All the money is funneled to the top. Mexico is a fine example. Won't find many 1st world capitalistic countries, if any.
 

Curious George

Veteran Member
"Bad" is a value judgement based upon our different values.
So we'll have to disagree about that.

You're not addressing the type of tax rate.

I don't propose that I pay less (in this thread).
Instead, I propose a different tax structure to get the same revenue.

To name just a few.....
- Disincentives to investment & productivity due to high marginal tax rates.
- Unfair treatment of capital gains, ie, taxing phantom gains due to currency devaluation.
- Unequal treatment of different classes of capital gains.
- Non-deductability of capital losses.
- Complexity of the code which creates costly research to address normal tax situations, & uncertainty about compliance.
- Market distortions due to subsidies which create bubbles, eg, primary residences.
- High taxes upon the poor.

Let me explain... since you think you are going to generate the same amount of funds.

Imagine we have peoples A, B, and C. Imagine that A, B, and C make 100, 1000, and 10000 respectively. Now imagine they are taxed in a similar fashion to that which we are taxed now such that they are taxed 10% on the first 100, 20% on the next 900, and 30% on the next 9000. so they all throw in 10 for the first 100, b and C throw in 180 for the next 900, and C throws in 2700 for the next 9000. In total they raise 3,090. Now, to charge a flat tax and generate the same number, we would need to charge them all at 27.83% So... we lowered C's marginal tax rate by a whopping 2.17%. In the meantime we have taken from A and B in order to do so. Now, if we allow deductions and credits, C has much more income to create the opportunity for deductions. So, we are probably going to have to bump up that flat tax a little higher.

You suggest you want to incentivize productivity? I don't see too many people trying to jump down a tax bracket... are there people who try to get deductions and move around income, so that it is taxed at a lower rate... sure. But, the simple truth is that people who go up a tax bracket are making more money. You say that their is unfair treatment of Capital gains. Well, why not get rid of Capital gains all together? We are going to land at a pretty high tax bracket to establish a tax that creates the same funds, so all capital gains might as well be taxed at that rate. Never mind that the whole purposes of capital gains not being taxed at the same rate is to encourage investment. We obviously need don't want to incentivize business or the investment therein.

Your line is complete and utter haggis. Flat tax benefits the rich at the cost of the poor and the middle class. The only potentially amelioration comes from the fact that capital gains would get the crap taxed out of them. This however, has a negative effect on business which isn't good. The benefit is to your pocketbook and you don't give a hoot who it effects if it saves you a buck.

But here is the best part. It won't save you a buck. It will cost you. Because unfortunately there are repercussions to making poor people poorer. And we all have to cover those costs. So, we will just have to increase the tax rate.

Bad idea.
 
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9-10ths_Penguin

1/10 Subway Stalinist
Premium Member
I don't appear to be up to the task of explaining why dividends matter,
even at times when companies aren't paying any.
If your goal is to explain why dividends matter, maybe you should have tried explaining that instead of arguing that companies that don't pay dividends have no value at all.

But perhaps you
could explain why an investor would buy a stock which is expected to
never pay dividends? There must be some quantifiable benefit which
justifies purchase, & a method of determining the price.
Present worth is a function of expected future worth. Future worth can be driven by any number of factors, from the potential for a future shareholder buy-out to net assets that a company has.

Do you think that money has no value? It doesn't pay out annuities either, and similar factors apply.
 

Revoltingest

Pragmatic Libertarian
Premium Member
it doesn't actually matter.
But Keynes answered that. They purchase it because they think others will purchase it for more in the future.
Oh, but it does matter.
The only reason future buyers would pay more is the expectation of dividends.
Even if the future buyer doesn't plan to receive them (because his investment
vehicle reinvests them rather than immediately distributing them) he knows that
at some point they will be paid, & this drives value.
If you'd like to see another example: Might I suggest gold.
Gold pays no dividends. All you have is the gold. And mines keep diluting the stock by issuing more gold. Yet gold values go up (and down).
If that's not interesting enough: Art. Art pays no dividends; but people purchase it, and its value goes up and down.
In these cases, value is driven differently.
Art has only aesthetic value, & its market is driven by the expectation that whim & fancy will increase towards particular works.
Gold has intrinsic value in addition to aesthetic value. It's a great roofing material.

Few people....lunatics & degenerates....own stock for its aesthetic vale.
I have thousands & thousands of shares in US railroad companies from the early half of the 19th century.
They're only worth a tiny fraction of a cent per share.
Why?
They'll never issue a dividend.
(They produce no income.)
I just like the locomotive engravings on the certificates.
Companies can actually appriciate real value... making more profits, buying more land, etc. How much more interesting they are than gold.
If you believe you are wiser than the worlds most renown economists. I've read their summaries already.
Even world renowned economists can hold loopy views.
Ever read any of Krugman's op ed pieces?
But perhaps we each read them differently.[/QUOTE][/QUOTE]
 

Revoltingest

Pragmatic Libertarian
Premium Member
Let me explain... since you think you are going to generate the same amount of funds.

Imagine we have peoples A, B, and C. Imagine that A, B, and C make 100, 1000, and 10000 respectively. Now imagine they are taxed in a similar fashion to that which we are taxed now such that they are taxed 10% on the first 100, 20% on the next 900, and 30% on the next 9000. so they all throw in 10 for the first 100, b and C throw in 180 for the next 900, and C throws in 2700 for the next 9000. In total they raise 3,090. Now, to charge a flat tax and generate the same number, we would need to charge them all at 27.83% So... we lowered C's marginal tax rate by a whopping 2.17%. In the meantime we have taken from A and B in order to do so. Now, if we allow deductions and credits, C has much more income to create the opportunity for deductions. So, we are probably going to have to bump up that flat tax a little higher.

You suggest you want to incentivize productivity? I don't see too many people trying to jump down a tax bracket... are there people who try to get deductions and move around income, so that it is taxed at a lower rate... sure. But, the simple truth is that people who go up a tax bracket are making more money. You say that their is unfair treatment of Capital gains. Well, why not get rid of Capital gains all together? We are going to land at a pretty high tax bracket to establish a tax that creates the same funds, so all capital gains might as well be taxed at that rate. Never mind that the whole purposes of capital gains not being taxed at the same rate is to encourage investment. We obviously need don't want to incentivize business or the investment therein.

Your line is complete and utter haggis. Flat tax benefits the rich at the cost of the poor and the middle class. The only potentially amelioration comes from the fact that capital gains would get the crap taxed out of them. This however, has a negative effect on business which isn't good. The benefit is to your pocketbook and you don't give a hoot who it effects if it saves you a buck.

But here is the best part. It won't save you a buck. It will cost you. Because unfortunately there are repercussions to making poor people poorer. And we all have to cover those costs. So, we will just have to increase the tax rate.

Bad idea.
That's a daunting wall of text.
The underlined portion is unclear.
And your presumption of my motives is wrong.
(I don't expect to pay less tax.)
I like the "haggis" part though.
 

Revoltingest

Pragmatic Libertarian
Premium Member
If your goal is to explain why dividends matter, maybe you should have tried explaining that instead of arguing that companies that don't pay dividends have no value at all.
Your re-wording obscures my point.
It's the expectation of dividends which drives prices.
They needn't be paying any at the moment to have value.
If profits are reinvested instead of being disbursed, then
this portends greater dividends in the future.
Present worth is a function of expected future worth.
Exactly!
Future worth can be driven by any number of factors, from the potential for a future shareholder buy-out to net assets that a company has.
Profits re-invested are future dividends.
A company which would never issue dividends has no value....except in the dutch tulip sense.
Do you think that money has no value? It doesn't pay out annuities either, and similar factors apply.
The net present value of a Fiver is $5 because of the expectation that I can buy $5 worth of goods & services with it.
Stock isn't a form of currency, so we depend upon being able to generate cash with it.....if not today, then tomorrow.
 
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Curious George

Veteran Member
"Bad" is a value judgement based upon our different values.
So we'll have to disagree about that.

You're not addressing the type of tax rate.

I don't propose that I pay less (in this thread).
Instead, I propose a different tax structure to get the same revenue.

To name just a few.....
- Disincentives to investment & productivity due to high marginal tax rates.
- Unfair treatment of capital gains, ie, taxing phantom gains due to currency devaluation.
- Unequal treatment of different classes of capital gains.
- Non-deductability of capital losses.
- Complexity of the code which creates costly research to address normal tax situations, & uncertainty about compliance.
- Market distortions due to subsidies which create bubbles, eg, primary residences.
- High taxes upon the poor.
That's a daunting wall of text.
The underlined portion is unclear.
And your presumption of my motives is wrong.
(I don't expect to pay less tax.)
I like the "haggis" part though.
It's simple math. A flat tax goes against the people who make less and favors the people who make more. You cannot change the numbers, or make them read something that is not there . A flat tax does worse for business if you do away with capital gains.
 

Milton Platt

Well-Known Member
I have seen the idea of a flat tax tossed around over the years, and I like the idea. This would only be for personal federal income tax. State and local taxes are a different subject, as are corporate taxes.

For example. instead of having different tax brackets based on income, everyone would pay 10%. Using the 10% example, the breakdown is easy. I would advise an exemption clause for any household making under $25,000 per year.

Under $25,000 and pay $0
Make $50,000 and pay $5,000
Make $500,000 and pay $50,000
Make $5,000,000 and pay $500,000
Make $50,000,000 and pay $5,000,000

It does not matter how much you make, the rate is always 10%. Yes the wealthy will pay more in taxes, but they should. They have a MUCH easier life than someone making under $50,000 per year, so they can live off their remaining $45,000,000 after taxes. If they can't live off that, they have some serious issues.

I would see a 15% increase in my paychecks based off my current tax bracket (2017) of $75,900 - $153,100, not including the elimination of the 25% excess tax over $75,900.

The downside is that the lower your total income, the greater percentage you have to spend for day to day living expenses, and that makes the flat tax unfair. Someone making 50 million will not miss 5 million as much as someone making 50,000 will miss 5,000. Not to say that I like the current state of affairs....I don't.
 

Revoltingest

Pragmatic Libertarian
Premium Member
It's simple math. A flat tax goes against the people who make less and favors the people who make more. You cannot change the numbers, or make them read something that is not there . A flat tax does worse for business if you do away with capital gains.
Not all flat taxes are the same.
I proposed exempting the poor entirely.
 

Curious George

Veteran Member
Not all flat taxes are the same.
I proposed exempting the poor entirely.
You propose exempting 25K for everyone. This still means the numbers are shifted and the brunt is born by the people making less than the top earners. Even some of those will take a hit. It is simple math, man!
 

Revoltingest

Pragmatic Libertarian
Premium Member
You propose exempting 25K for everyone. This still means the numbers are shifted and the brunt is born by the people making less than the top earners. Even some of those will take a hit. It is simple math, man!
In applying "simple math", it seems you forgot to carry the one.
The average tax rate increases with income asymptotically.

Earning level.....
25K: Average rate = 0%
50K: Average rate = 5%
100K: Average rate = 7.5%
100M: Average rate = 10%

It's about the concept, rather than specific numbers.
If you don't like these results, the adjust them.
Taxes could start at $40K.
The marginal rate could be 13% above that.
Whatever works is better than what we have now.
 
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Onyx

Active Member
Premium Member
You mean we won't have people dressed up as the statue of liberty waving to us from the side of the road anymore?

There are a lot of jobs at stake when it comes to the tax system, so I vote for slow, cautious changes over time rather than drastic ones. Perhaps there is a compromise in there somewhere.
 

Curious George

Veteran Member
In applying "simple math", it seems you forgot to carry the one.
The average tax rate increases with income asymptotically.

Earning level.....
25K: Average rate = 0%
50K: Average rate = 5%
100K: Average rate = 7.5%
100M: Average rate = 10%

It's about the concept, rather than specific numbers.
If you don't like these results, the adjust them.
Taxes could start at $40K.
The marginal rate could be 13% above that.
Whatever works is better than what we have now.

No, I didn't forget. And because the average tax rate increases toward the flat rate doesn't change how the numbers work. You are taking X% of all income over 25K. The decrease to the marginal tax rate of the current higher tax brackets is being paid for by the people closest to the 25K line. Do you really not understand? You were an engineer...you understand math. You have to know what you are suggesting! How could you not. It is a BAD idea.
 
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