Which tax system is most 'fair'

pbrauer said:

This is of course total BS. Your numbers obviously use income tax data which does not account for money hidden in various foundations that are only available to the very wealthy and of course off-shore accounts.
Also, note that working stiff is pay payroll taxes where the rich are paying none.

Oh yeah, there is only a 15% tax on capital gains.

Click to expand...

so tell me-how do the evil rich manage to make 22% of the income and pay almost 40% of the income tax with all those loopholes and off shore foundations

only clowns think most of those targeted for the tax hikes have off shore foundations.

cpwill said:

the two are often mutually exclusive.

Click to expand...

Luckily, they are not entirely so, and society determines what the best balance between the two is.

obvious Child said:

And many of them cheat right now with relatively low rates. When you jack up the sale tax to the often cited range of 15% to 23% sales will drop. To incentivize people to buy, they will switch to a cash basis and not collect the tax.



There is where you failed. You were not deliberately trying to cheat. Tax avoidance sales will entirely bypass the register. Citing the cash register is a sign you don't get how they are going to cheat. Chinatowns across the US are notorious for cash basis under the table transactions. Often the IRS will first watch the suspected business, make estimates on sales per entry and then confront them before sending in auditors. Auditors are expensive. Easier to intimidate them into admitting and paying. A full sales tax would incentivize every firm to act like a Chinatown firm. To enforce compliance, it's going to take a suped-up IRS.



So those who pay taxes to fund Medicare and Social Security are unproductive?

Click to expand...

so social security is now a tax-that was not what the dems said when they pushed it-its a forced retirement account-not a tax used to fund stuff like armies or the FBI or the department of education

and people cheat on income taxes now but if the number of people who are required to send in the tax are far less (merchants) the ability to police that is far easier

lets cut the crap-those who want progressive taxes do so because of class envy

Dezaad said:

additional necessary redistribution of wealth.

Click to expand...

Gotta love endorsing theft!

cpwill said:

you have any evidence that suggests that the states who use sales taxes have to maintain a significantly larger IRS in order to collect it than those who tack on additional income taxes?

Click to expand...

First, the IRS is federal. Second, state tax collection agencies are generally lazy people. Third, sales tax compared to income is generally relatively minor and most of the cheating happens with smaller firms where its not cost effective to constantly audit them. Usually when they get hit is when the individual owning doesn't report income from the company but manages to have large amounts of unaccountable assets.

switching to a consumption tax at the retail level would reduce the number of collection points, and make noncompliance more difficult. so i'm kind of left scratching my head at your claim here.

Click to expand...

Sure it would reduce the collection points, but that doesn't make it easier to force compliance. Raising sales taxes in some places from literally zero to 23% will drastically reduce sales. There's no sane question about that. And companies will offer under the table cash sales to make it more inviting to customers to buy. And I highly suspect that there will be two sets of books going on. Any time you raise taxes on business, business finds a way to avoid them. Corporations spends billions right now on tax avoidance. Start pushing every firm into high sales tax remittance, and they will push back.

The problem with a sales tax is that is relies on people being honest. That ain't going to happen.

Agent Ferris said:

Understood, you support collective tyranny. Me and my gang are in the majority too, so I expect no resistance when we show up at your front door to collect your car.

Click to expand...

No, I support an economic and taxation system that maximises prosperity balanced with some levelling of economic power. I don't recognize property rights as absolute and so I don't view taxation as theft. Almost no one (really) does, and so we are lucky enough to have a majority who knows that taxation isn't the same as thugs showing up at your front door to take your belongings.

If the majority did agree with you, it would lead to a society where only the few find any justice of any kind at all.

TurtleDude said:

so social security is now a tax

Click to expand...

Of course it is.

that was not what the dems said when they pushed it-its a forced retirement account-not a tax

Click to expand...

Have you read FICA or are you just so partisan you don't care?

used to fund stuff like armies or the FBI or the department of education

Click to expand...

And how presidents and congresses, Democratic and Republican alike raided it? Or are you again to partisan to look at facts? Bush HIMSELF raided it for huge amounts. Social Security is little more then a slush fund that both parties have used for all kinds of reasons. Stop being an overly partisan hack.

and people cheat on income taxes now but if the number of people who are required to send in the tax are far less (merchants) the ability to police that is far easier

Click to expand...

But the problem with enforcement at the retail level is that it interferes with business. You're tacking on a huge cost to them. Just because there are fewer doesn't make it easier. Especially when businesses often have more complex ways of hiding money then individuals. This is going to come down to auditing inventory to ensure that total goods sold matches the associated taxes.

lets cut the crap-those who want progressive taxes do so because of class envy

Click to expand...

How about you cut the partisan blinders?

Rightwingnutjob said:

Gotta love endorsing theft!

Click to expand...

Any non-voluntary tax system where anyone pays any dollar amount greater than anyone else is taking from one person and giving services to others. This, I believe, is what you consider to be theft.

So, the only non-voluntary tax system that is not theft is a head tax. Each and every person (of any age or status) residing in the nation must be assessed the exact same dollar amount tax. Otherwise someone is subsidizing someone else. Theft is theft, as you've chosen to define it.

samsmart said:

But a flat tax won't end it either. If you ask me, the reason why the middle class are getting hit hard and the poor are getting poorer is for a multitude of reasons.

One, if you ask me, is how necessary the use of living off of a debt is in this nation. We require debt to get a college education or professional training and we require debt to get shelter. On one hand, the flow of credit in the U.S. allows those who are poor a way to lift themselves out of their poverty but, on the other hand, free market forces causes the prices to rise higher because of that credit. Therefore, nothing is really gained. Except the amount interest people have to pay back to their creditors.

What is the ultimate solution to this? I don't know, and even if I did I doubt it would be something the majority of Americans would attempt to implement anyways.

Another reason is the sheer number of tax exemptions available to people. While conservative pundits like to blame Democrats for giving the poor for all these exemptions, Republicans are also to blame for giving exemptions to their poor supporters, most poor social conservatives who get tax breaks for children.

But why should people with children get more tax exemptions when they use more tax-provided government services, such as public education for their children? Maybe we should increase taxes on couples with children since they consume more government services than singles without children.

But that would be against the "family values" of social conservatives who love kids so much they despise birth control, and would call any Republican who supported it a RINO.

So the reason why the middle class is suffering and the reason why the poor stay poor can't be reduced to the system of taxes we use. There are many reasons, many more than I know of to list.

Click to expand...

I don't disagree with a lot of what you say.

I think most of it boils down to behavior, we aren't teaching people how to fish but merely giving them the fish.
Not to get all Biblical on you or anything.

There needs to be some serious behavior modification in order for tax changes to succeed, which is largely why any proactive tax system fails.

lizzie said:

We need people to be conscious of their consumption and where tax money is going. Consumption taxes would do just that. If you want to live a life of frivolity and excess, then do so. What we currently have is 50% of the working population not caring how tax dollars are being spent, because they have no personal stake in it.

Click to expand...

Well, we may have 50% of the working population not caring how tax dollars are being spent, but that may not necessarily be because they have no personal stake in it. Even if they had a personal stake in it does not mean they would care. Neither does it mean that they would no longer be ignorant on the subject.

Don't forget how much of the media requires a revenue stream in order to operate. We could have a news organization try to educate the people on all the ways our tax monies are being spent. However, such an endeavor would not be profitable as there is not enough demand for it compared to the demand for political punditry. Therefore, even if people were interested in educating themselves on the details of how tax funds are spent, there is no way to pay for an operation to provide such a service.

And a government funded operation to educate the people in such way is out of the question, as we all know what kind of calls for "state media" that would lead to. And the sad thing about it is that such accusations would probably be right, for both Democrats and Republicans.

Another thing to consider is that the pro-business interests of the Republican Party want consumption. Their businesses rely on consumer spending. They want people to spend as much money on their goods and services as they can get. Their profit margins depend on it.

That's why pro-business Republicans try to keep the price of oil down rather than make moves to increase oil dependence. It's also why the pro-business Republicans are against public transportation systems and instead want people to buy cars and gas. Most of the Republican politicians want consumption to be maintained, not lowered. Otherwise they would offer public solutions that increase the efficiency of use of our fuels.

Gabriel said:

Well in terms of social cohesion.. lets look at the top 10 countries people report to be the most happy. If you look closely you will see countries with much higher degree of progressive taxation.. you will note currently the US is much lower on the chart placing 17th with very few social programs for the people.

Click to expand...

So you're arguing that people can be taxed into happiness?

obvious Child said:

Only the first one. A sales tax is too hard to realistically produce in our economy.

Click to expand...

interesting. how do the states survive?

cpwill said:

interesting. how do the states survive?

Click to expand...

Lots of federal governmen transfers

Harry Guerrilla said:

I don't disagree with a lot of what you say.

I think most of it boils down to behavior, we aren't teaching people how to fish but merely giving them the fish.
Not to get all Biblical on you or anything.

There needs to be some serious behavior modification in order for tax changes to succeed, which is largely why any proactive tax system fails.

Click to expand...

The "Give a man a fish, feed him for a lifetime; teach a man to fish, feed him for a lifetime" metaphor is often used to criticized social programs. However, we never talk about he metaphor for how people "get taught to fish."

Currently, I'd have to go to the fisherman and ask him to teach me. But he doesn't want to, because every minute he would spend teaching me is one minute he's not catching fish, which lowers the number of fish he catches.

So he makes a deal with me - every day he spends teaching me to catch fish, is one fish I have to pay him back later. I have to give him a minimum number of fish every month, and for every 10 fish I owe at the end of a month I have to give him an additional fish for interest.

So he teaches me how to fish and I learn all the basics but none of this actually gets me any fish. This means the number of fish I owe keeps increasing higher and higher by the time I'm capable enough to fish.

So I fish and try to give my teacher the number of fish he requires me. Not only that, but I have to trade fish for housing too just so I have shelter. I also have to give fish for paying off my boat, my net, my sail, and everything else I need that I bought with the promise of future fish.

So eventually the number of fish I owe to my teachers, my landlord, and is simply beyond my ability to catch in my lifetime. So what do I do?

Well, I find younger people who want to learn how to fish and teach them with the promise that they'll give me fishes with interest in the future. So I teach a number of them how to fish and wait for them to catch fish to pay me back. I try to do this enough times so I can pay back all my own debts while getting others indebted to me.

Only the number of fishermen we have trying to pay off the fish they owe has caused them to overfish the waters. Because of that, the number of fish demanded can't keep up with the number of fish available. But all the people who are owed don't care - they want their fishes.

So the fishes get overfished and there's no more fish to spawn in great numbers. There are too few fishes for all the fishermen out there.

Which means that instead of giving out fishes, those fisherman see if the people they owe fishes to want anything else instead. Come to find out, they need wood, which can be gotten from the nearby forests.

Only, those fishermen don't know how to cut down that much wood, which means they need to find a logger to teach them...

And so on and so on it goes.

TurtleDude said:

so tell me-how do the evil rich manage to make 22% of the income and pay almost 40% of the income tax with all those loopholes and off shore foundations

Click to expand...

Please show me where they only make 22% of the income?

Harry Guerrilla said:

I don't disagree with a lot of what you say.

I think most of it boils down to behavior, we aren't teaching people how to fish but merely giving them the fish.
Not to get all Biblical on you or anything.

There needs to be some serious behavior modification in order for tax changes to succeed, which is largely why any proactive tax system fails.

Click to expand...

I know I already replied to this post, but I want to make a reply concerning a different point.

I don't disagree with you in that we need some serious behavior modifications in this country. However, I think that the government could be used to make such necessary behavior modifications.

One is shelter for the poor. I've stated this several times in other threads. I am critical for the government having provided government-backed loans to the poor for houses they can't afford that were built for the middle class. That's just stupid.

Instead, I think the government should use the authority of law to mandate that housing developers cannot ignore the housing needs of the poor.

My position is this. Most housing developers focus on the people who are middle class or wealthier when they build houses. However there is a demand for shelter for people who earn minimum wage. But land is a commodity, so housing developers build housing only for the middle class or wealthier so they can get a better long term profit.

If I had my way, I would write a law requiring housing developers to build a certain percentage of low-income housing designed and built to be affordable to people earning a minimum wage. These could be very small, efficient multi-story homes. By forcing housing developers to dedicate to building these types of homes, they will use their ingenuity to create such homes.

This way, the poor can actually get housing they can afford and the government isn't making risky mortgages, and housing developers will earn a profit.

The only thing that inhibits this is housing developers' desire to earn even more of a profit to cater to the demands of the middle class. But in doing so, they ignore the needs of the poor.

So there's a lot of ways to look at the scenario.

Progressive.

If faced with either a rise or fall in income, I think the benefit should go to the person who is least well off.

If we divided the income of the US into thirds, we find that the top ten percent of the population gets a third, the next thirty percent gets another third, and the bottom sixty percent get the last third. If we divide the wealth of the US into thirds, we find that the top one percent own a third, the next nine percent own another third, and the bottom ninety percent claim the rest. (Actually, these percentages, true a decade ago, are now out of date. The top one percent are now estimated to own between forty and fifty percent of the nation's wealth, more than the combined wealth of the bottom 95%.)

Click to expand...

The L-Curve: A Graph of the US Income Distribution

samsmart said:

I know I already replied to this post, but I want to make a reply concerning a different point.

I don't disagree with you in that we need some serious behavior modifications in this country. However, I think that the government could be used to make such necessary behavior modifications.

One is shelter for the poor. I've stated this several times in other threads. I am critical for the government having provided government-backed loans to the poor for houses they can't afford that were built for the middle class. That's just stupid.

Instead, I think the government should use the authority of law to mandate that housing developers cannot ignore the housing needs of the poor.

My position is this. Most housing developers focus on the people who are middle class or wealthier when they build houses. However there is a demand for shelter for people who earn minimum wage. But land is a commodity, so housing developers build housing only for the middle class or wealthier so they can get a better long term profit.

If I had my way, I would write a law requiring housing developers to build a certain percentage of low-income housing designed and built to be affordable to people earning a minimum wage. These could be very small, efficient multi-story homes. By forcing housing developers to dedicate to building these types of homes, they will use their ingenuity to create such homes.

This way, the poor can actually get housing they can afford and the government isn't making risky mortgages, and housing developers will earn a profit.

The only thing that inhibits this is housing developers' desire to earn even more of a profit to cater to the demands of the middle class. But in doing so, they ignore the needs of the poor.

So there's a lot of ways to look at the scenario.

Click to expand...

There are a lot of houses in my area that are incredibly affordable.
So much so, that I almost bought one.
They are a bit old & smaller in square feet but affordable and livable.

Of course this really depends on the person, a lot of lower income people tend to try to mimic wealthier people.
Buying luxury things, up to and including expensive homes (expensive for them at least).
I'd love to see a wave of frugality in the lower income classes but that would require an education and commitment that I think is not well received by those people.

I'm really not sure how to approach this group of people in educating them on how to live within their means.
I've tried to mentor a younger guy I work with and he has done some good things but it's like he's begging for failure sometimes.

samsmart said:

But a flat tax won't end it either. If you ask me, the reason why the middle class are getting hit hard and the poor are getting poorer is for a multitude of reasons.

Click to expand...

'the poor are getting poorer' is a myth. the poor are merely getting richer slower.

One, if you ask me, is how necessary the use of living off of a debt is in this nation. We require debt to get a college education or professional training and we require debt to get shelter.

Click to expand...

i could see the argument for purchasing a house (though not renting); but we certainly do not require debt to go to college or get professional training. i'm 2/3rds through a Masters degree, and i've never taken a student loan. nor do we need debt to purchase cars, or furniture, or groceries, or any of the myriad items that we foolishly use it for. I had a guy a couple of days ago tell me how great his credit card was because it only charged 13%, and that's why he used it instead of cash. I tried to explain to him that he was paying for the priviledge of using his own money; but he just sort of looked at me like i'd wacked him in the head with a 2x4. then he mumbled something about a FICO score..... oie :doh

On one hand, the flow of credit in the U.S. allows those who are poor a way to lift themselves out of their poverty

Click to expand...

unless they are getting investment for a small business, then no, it isn't; it is a trap. there is a reason that payday loan type establishments target poorer neighborhoods; because the poor are stupid enough to use them.

What is the ultimate solution to this?

Click to expand...

get Americans unhooked from living in debt; become a nation of savers rather than a nation of consumers. maintain a small federal government with a balanced budget funded by a tax scheme that is at once simple and light.

Another reason is the sheer number of tax exemptions available to people. While conservative pundits like to blame Democrats for giving the poor for all these exemptions, Republicans are also to blame for giving exemptions to their poor supporters, most poor social conservatives who get tax breaks for children.

Click to expand...

if there is one thing we should give a tax exemption for, taking care of American citizens who as of yet cannot support themselves is it. but yes, the vast majority of exemptions need to go; one of the reasons i'm a fairtax fan is that it reduces the huge amount of pork that is represented by the current tax code.

But why should people with children get more tax exemptions when they use more tax-provided government services, such as public education for their children?

Click to expand...

because of the myriad costs associated with raising children; costs those parents incur when they provide for American citizens who cannot provide for themselves.

Maybe we should increase taxes on couples with children since they consume more government services than singles without children.

Click to expand...

well if you want to reduce the number of children born in America and ensure our collapse as a society, that would be one way to do it.

But that would be against the "family values" of social conservatives who love kids so much they despise birth control, and would call any Republican who supported it a RINO.

Click to expand...

:shrug: i'ma social conservative, me and my wife use birth control. I have no beef with folks who don't, but i think you are misrepresenting the right here. what we hate is using abortion as birth control

So the reason why the middle class is suffering and the reason why the poor stay poor can't be reduced to the system of taxes we use.

Click to expand...

it is a cause, especially inasmuch as it inhibits growth.

but directly as well. if you are bringing in 20K a year, you are getting taxed at a 15% rate from federal income taxes. but you are also paying payroll; economists are pretty much unanimous that employer matches come out of compensation, so that comes out to an additional 14.7%. you're paying almost 30% of your income to the Federal Government on those two alone, before you try to save/invest the money you've already paid taxes on, purchase gasoline, or any other of the myriad things the government now taxes. The Fair Tax is - if anything - more progressive than the current tax structure, you pay no tax whatsoever if you spend at the poverty level; if you spend (which means that you have made more than) twice the poverty level, you are still only paying 11.5%; a little over a third of the amount paid above.

fredmertz said:

What's the most 'fair' tax system? (not asking which is most sustainable, just which would be most 'fair', in a morality sort of way)

Click to expand...

A say a national sales tax is the most fair system. seeing how you pay taxes anytime you buy stuff and the more you buy the more taxes you pay. Then a flat percentage tax on income is the 2nd most fair seeing how everyone would be paying the same percentage of their income in taxes. I am curious as to how anyone can say the progressive tax is the most fair.The government taking more of your money solely just because you make more is not in any shape or form fair. This is why I check the always allow others to see who voted" option because I have to wonder members are cheating at the poll question.

samsmart said:

But a flat tax won't end it either. If you ask me, the reason why the middle class are getting hit hard and the poor are getting poorer is for a multitude of reasons.

Click to expand...

How are the poor getting poorer? The poor now have vehicles,telephones/cellphones, color tv in more than one room, cable, computers.Sure alot of those things are either used, paid for on lay away or rent to own and or given to them, but to say the poor is getting poorer is an absurd statement. Poor people in other countries would sell their left testicle to be a poor man in the USA.

Harry Guerrilla said:

We've had a progressive tax system for near on 100 years.
In the minds of many, prosperity hasn't been spread and the wealth has continued to accumulate at the top.

Is that a failing at the implementation of the progressive tax?

Click to expand...

I would say yes. There are too many loopholes for tax evasion.

I think to totally summarize my point here.

We've had some sort of progressive taxation for the better part of 100 years and the amount of relative poverty is more or less the same (over the past 40 years at least).
We've increased regulations from 1 book of approximately 1,000 pages to multiple volumes compromising approximately 70,000 pages.

Is there a point when you ask yourself, when is it enough? What have we really accomplished?

Orion said:

I would say yes. There are too many loopholes for tax evasion.

Click to expand...

I know you're not particularly familiar with the U.S. tax code but the poor here get very generous tax benefits.
They essentially have a negative tax rate.