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Thread: California Considers Flat Tax and Completely Eliminating Welfare

  1. #11
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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by Don't Tase Me Bro View Post
    I guess the people they serve will just have to try harder to take care of themselves like they should be in the first place. As for those that literally can't because of a true disability or condition, the Feds are still there to provide support and their families will have to step up their own support. California's astronomical debt is partly due to their overly generous spending on the welfare state in the first place.

    A flat tax isn't a bad idea either. Several of the Eastern Bloc nations that were once part of the Soviet Union or controlled by Communist governments have gone to a flat tax and their economies have boomed ever since. 15% seems rather high, however, for a state, so I would have to think this flat tax would replace more than just the state income tax.

    One thing is for certain. California can no longer function the way it is today and the people there had better get it through their heads. Ironically, this budget crisis might be the best that ever happened to them. I do have my doubts, however, that either of the above will actually come to fruition.
    I would not hold my breath that the idiots who run California Government will pass a flat tax nor that they will not continue their idiotic partisan philosophy of failures.

  2. #12
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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by Lerxst View Post
    I've not studied much on "flat tax" or "fair tax" or whatever it's called. Mainly because I just don't see it having a realistic chance at ever seeing the light of day. Not because it is or isn't a good idea, but because the IRS is too much of an institution and will probably not go away in my life time.
    I'd read the Fair Tax book anyway, whether you agree with the premise or not it is a good read, I agree with you that it has little chance of being implemented for two reasons, one, as you mentioned the IRS doesn't want to give up it's power, and also the CPA lobby enjoys the easy way of "big hitting" around April 15, i.e., the bulk of their incomes comes between Jan.-Apr. with late filers allowing them to basically coast the rest of the year, with a flat tax these CPAs would actually have to find employment with companies and *gasp* work year round like the rest of us. I'll say this though, the fair tax is so simple it's brilliant.

    Wouldn't it generate less revenue for government? And I'm not saying this is bad because it will force government to cut waste, but couldn't it also threaten to cripple many programs? Especially during troubled times when people just aren't buying?
    The idea is to implement the tax first, it is weighted to provide sufficient operating funds for existing programs with the idea of weening the government off of spending and waste in an economically viable timeframe, the concept involves a trimming effect on overspending, forcing programs to lean down through the natural progression of legislative law, not by shock and awe economic leveraging

    And I don't think California will ever just turn off welfare. As has been pointed out, the state would erupt in riots.
    Most fair minded conservatives would state that we have too many entitlements, but we have so much at the moment that immediate elimination would damage the economy past the benefit of the reductions, many of us advocate a strategic roll back of programs to what is necessary, but to eliminate the fat, we would use a scalpel, not a hatchet.
    It would have to be a multi-year, progressive reduction in benefits. If even then. I think you see a turnover in legislators who would fight the plan.
    I agree, but I would also commend those that put their position at risk to do what needs to be done towards solvency.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

  3. #13
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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by Truth Detector View Post
    Do you have any links or FACTS to back up your assertions?
    Lets see, as I guess it is the highlighted bits you disagree with.

    Flat tax is a horrible idea and will only benefit the rich
    Basic maths shows this.

    3 people.

    Person 1 earns 10 dollars a year
    Person 2 earns 100 dollars a year
    Person 3 earns 10000 dollars a year.

    Flat tax system of say 20% since you yanks love low numbers.

    Person 1 pays 2 dollars in tax, leaving 8 dollars to live on
    Person 2 pays 20 dollars in tax, leaving 80 dollars to live on
    Person 3 pays 2000 dollars in tax, leaving 8000 dollars to live on.

    Which person would have a more "comfortable" life?

    In a proportional system it could be like this. 50 dollar deductible. First 1000 dollars is taxed by 10%, 1001 to 5000 is taxed 20% and anything over 5000 is taxed by 30%.

    Person 1 earns 10 dollars a year but since there is a 50 dollar a year deductible he will pay no tax. 10 dollars to live on.
    Person 2 earns 100 dollars a year, has a 50 dollar deductible leaving only the 50 dollars to be taxed by 10% which is a tax of 5 dollars. That gives 95 dollars to live on.
    Person 3 earns 10000 dollars a year, has a 50 dollar deductible. the 10000 dollars are taxed the following. The first 1000 by 10% which is 100 dollars, then next 4000 is taxed by 20% which is 800 dollars and the remaining income of 5000 dollars is taxed by 30% which is 1500 dollars. This is a grand total of 2350 dollars in tax (with the 50 dollar deductible.. even though it dont matter jack for this person). That will leave the person 7650 dollars to live off.. ohh poor rich people have less to live off.. boo hoo... will have to skip one weekly botox treatment.

    The tax income from the flat tax is 2022 dollars. The tax income from the progressive tax system is 2455 dollars. The tax burden on person 1 and 2 is considerably lower where as the burden on person 3 is increased but then again said person can afford it.

    Now I know tax systems are never so simple, but the whole idea of a flat tax system is to make it simple with no deductions. The drop in revenue for the government will be considerable and the burden on low and middle class earners will increase. The rich will get a lower tax burden and considering they already have money to avoid paying their full share of tax under the present system (regardless of country) then well. My maths above might be off a bit (cant be bothered to check it tbh), but the idea behind it is right.

    Flat tax nations in Europe are the worst off at the moment
    Lets see. The list of flat tax nations in Europe are the following.

    Bosnia, Bulgaria, Albania, Czech Republic, Estonia, Iceland, Latvia, Lithuania, Macedonia, Montenegro, Romania, Russia, Serbia, Slovakia, Ukraine.

    Now what do we have there. Iceland has had to be bailed out and expects 20+% economic contraction. The Baltic states have the largest economic downturn in Europe proper and are on the verge of default. They have also received bailouts. Serbia and Romania got IMF bail-out money. Albania has always been a basket case and remains so. Ukraine cant pay its gas bills and was one of the first to get a bail-out from the IMF. If you dont believe me, google it.... for Ukraine

    Ukraine Gets an IMF Bailout - BusinessWeek

    That leaves the Czech Republic, Slovakia, Russia, Macedonia, Montenegro and Bosnia as "shining examples" right? well...

    If you google Russia and economic crisis, then you will probably be shocked....

    The Czech Republic is in a relative good economic situation compared to the rest. However even here the crisis has hit hard. Same goes for Slovakia, where the crisis has hit even harder. But compared to the rest yea these have a great economy....

    The other nations.. get real, they barely have economies to begin with.

    It is a egotists dream, and all are basicly ruled by the gun and the rich
    Not sure what you want here soo.
    PeteEU

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by PeteEU View Post
    If it is not a swipe against the euro, then why mention it at all? It has zero relevance if the debt is in dollars, swiss franc, yen, bananas or hot latin strippers. The fact remains regardless of the currency they borrowed in, they are now screwed because of the credit crisis. They cant get new loans or refinance their existing loans regardless if it is Euros, Dollars or latin strippers.
    First off, where can I get some debt denominated in Latin Strippers--sounds like my kind of currency!

    Second, the relevance is the steep increase in the quantity of debt in local currency terms due to the plunging currency valuations. When you borrow in Euros when your currency is trading at 2:1, then your currency drops to 4:1, you've just seen your debt load double. Only way to avoid that trap would be if GDP doubled at the same time, so that the relative debt load remained the same. In a worldwide economic contraction, that obviously is not happening.

    The reason I mention the Euros should be patently obvious: that is the denomination of the debt.

    There is another reason for mentioning the Euro: the European banks and countries holding the paper on all this debt are jammed up by this as well, for the simple reason that a default by Eastern Europe will unleash a banking crisis in Germany and Austria that will make the Anglo-American travails seem mild by comparison.

    Quote Originally Posted by PeteEU View Post
    They will have to draw down on their currency reserves to pay back their debts and that is gonna hurt their domestic spending because they cant buy crap from other countries. This in turn means that they are much more dependant on tax income to finance even basic things, and since they have a flat tax system in an economy that is flat-lining, then yes it is a double whammy.
    Ok, so you're just miffed that I dared mention the Euro and are spewing because you don't like the flat tax. Economics and finance are of no relevance to your position.

    Guess that bring this little non-discussion to a close. Moving right along.....

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by PeteEU View Post
    As for completely eliminate welfare.. move to Somalia and see how that is. Countries without any safety net rank as some of the poorest and worst off on the planet.
    And yet, before the saftey net, the US was the richest and best off in world. How is that?

    It is a egotists dream, and all are basicly ruled by the gun and the rich.
    False premise -- eliminating the welfare state in no way eliminates all the other laws.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    It all comes back to this argument. PeteEU is arguing that because the nations that have Flat Tax are doing the worst, that Flat Tax must be the reason. Unfortunately for PeteEU, you can't just demonstrate correlation and imply causation. He needs to prove that the Flat Tax is the reason for those nations doing so poorly. Until he does that, all you need to say is "Post Hoc Ergo Propter Hoc."

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by phattonez View Post
    It all comes back to this argument. PeteEU is arguing that because the nations that have Flat Tax are doing the worst, that Flat Tax must be the reason. Unfortunately for PeteEU, you can't just demonstrate correlation and imply causation. He needs to prove that the Flat Tax is the reason for those nations doing so poorly. Until he does that, all you need to say is "Post Hoc Ergo Propter Hoc."
    You have to understand that when Liberal Socialists debate, reality and FACTS seldom enter into their false assertions.

    After all, being a Liberal Socialist is quite easy; you just have to SAY you care and redefine the meaning of words.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    California cant elimate welfare. The Democrats voter base would dry up, along with the Mexican vote.

    Although, it would be sweet poetic justice to hear Democrats have to come to terms with their ridiculous notion that the government can provide all aspects of daily life on the taxpayer's dime. For them to totally reject that, would be a day of revolution in this country.

    80 years of welfare reform, down the tubes and finally admitted to being worthless and bad policy. That would be a sweet day.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by TheHat View Post
    California cant elimate welfare. The Democrats voter base would dry up, along with the Mexican vote.
    People just don't realize what's best for them, and it's a shame. People vote themselves into poverty.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    If somehow this passed, I would wallow in the irony for months. California of all places. LOL

    What's next? Illinois going to ban worker's unions?

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