AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.
In my ideal world a flat tax would be in place. But moving to a flat tax from where we are now would be catostrophic. The hurt it would put on the lower classes initially wouldn't be worth the long term 'fairness' that I think it creates. And in the long term, I think the lower classes would rise again. But again, the cost short-term is people starving and I understand that. We cannot just jump into a flat tax.
We can have a compromise and we must. If we take too much from the poor, they starve (if not literally, then figuratively). Too much from the rich and they will decrease costs (wages) to maintain income and the economy starves and the long term consequences will be dire. It needs to be balanced.
It won't please everyone, like you said and there will be some resistance. But this is the way of least resistance that I can think of to get to the same goal we all have: get out of debt!
In terms of the 'ideal world' which was the basis of this poll, I also believe those who benefit more should pay more (which are generally the wealthy). But I'm sure we disagree here: how to determine how much more. I say that if the poor man making $15k pays 20% ($3k) then the rich man making $1,500,000 pays 20% ($300,000). This is a debate that there is no answer to that I've ever found. I just can't understand how someone thinks that 'fair' is when the rich man pays 40% in the 'ideal' world and the poor man pays 20%. But I've also found that others don't understand why I think that the rich man should only pay 20%. I know their reasons (the rich have a superflous amount above what would be unreasonable amount necessary to live on and so they can better afford a higher income rate), but I don't see at all how this is fair. Simply because they are in a position to pay more without hurting themselves financially doesn't mean we should obligate them to. They are making more because they are producing more (generally) and so I feel the government has no right in taxing them at a higher rate, despite what they can afford.
The reason I'm telling you all of this is because I'm hoping you don't see me as an enemy by now and rather a person looking for the best solution. If you could shed any light on your way of thinking (and/or why you disagree with my way of thinking), I would appreciate it. As one person, I can't really do anything. But if we all keep trying to understand each other, maybe our leaders will follow OUR lead. This world is upside down.
We obviously have a deficit as well. This isn't getting into how we absolutely have to cut spending. But at the same time, a tax increase is in order for the short term to pay off this debt. And whose debt is this? the Nation's debt. So we ALL must get tax increases. Even those 48% paying $0 right now. They need to be paying something, even if it is a small amount of 8% (or even less).
So I suggest we break this down to 3 very basic, no loop hole brackets. I've read multiple numbers, but the most common is that the wealthiest pay only about 18% income tax after deductions and loopholes.
first bracket for earners from $0-poverty line: =/< 8%
second bracket for earners from poverty line to $XXX,XXX: 15%-17%
Third bracket for above $XXX,XXX: 20%
If everyone in the nation were paying 19% without loopholes, I've calculated that we would not be running a deficit (figures from bea.gov last year).
Even suggesting a progressive tax system is hard to type out. The idea of the unfairness and inefficiency for the long run is awful to suggest. But I really think it's what would be best from this point. And these rates seem incredibly low because we're used to loopholes and higher stated rates. But the net amount going to the government will drastically increase. The below poverty earners won't contribute much, but this debt problem is as much their problem as it is anyone's. They need to contribute. You don't get all the privileges of being an American for free.