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A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequality.

Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Honestly none of this made any sense. First explain how it is a bad idea, instead of just stating it as such, then we could move onto other things.

It accounts to another form of monetary policy, where the Federal government (congress) has a piss-poor track record for reducing the budget deficit during good economic times and increasing it during economic downturns. I'm not entirely sold on the idea of California representatives X,Y, & Z calling for increased appropriations to help their state's economy when 2/3 of the country has less than 6% unemployment ficticious scenario.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Honestly none of this made any sense. First explain how it is a bad idea, instead of just stating it as such, then we could move onto other things.

The intent of our country was NOT to have a super strong federal government. That is why it is a bad idea. I like the idea that each state runs its own state, its own finances, and runs programs that are specific to its local needs. A federal government has a harder time caring about the needs of someone, say, in Nebraska, when most of the electoral votes and tax funds come from 5 or so high population states.

Our country wasn't meant to have a strong central government, and I think all funding being controlled by the Federal Government certainly qualifies as strong federal government. As, where the money lies, so does the power.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Providing police/fire protection in the case of sales tax, and road maintenance/patrols costs a certain amount per dollar spent/miles driven. The income of the person causing this damage to the commons (necessity of police/roads) is irrelevant to this cost. Thus, by simple math, lower income people pay a higher proportion of their income to cover these costs. This is eminently fair and reasonable, and explains the phrase "use the commons out of proportion to their income".
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

The intent of our country was NOT to have a super strong federal government. That is why it is a bad idea. I like the idea that each state runs its own state, its own finances, and runs programs that are specific to its local needs. A federal government has a harder time caring about the needs of someone, say, in Nebraska, when most of the electoral votes and tax funds come from 5 or so high population states.

Our country wasn't meant to have a strong central government, and I think all funding being controlled by the Federal Government certainly qualifies as strong federal government. As, where the money lies, so does the power.

States would still run their own state, the feds would just supply the funding. It doesn't make central government stronger, it makes states stronger.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

The intent of our country was NOT to have a super strong federal government. .

Leaving aside the hyperbole of "super," the intent of our country was that every generation was to decide that for themselves. We've decided. We want a strong federal government.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Providing police/fire protection in the case of sales tax, and road maintenance/patrols costs a certain amount per dollar spent/miles driven. The income of the person causing this damage to the commons (necessity of police/roads) is irrelevant to this cost. Thus, by simple math, lower income people pay a higher proportion of their income to cover these costs. This is eminently fair and reasonable, and explains the phrase "use the commons out of proportion to their income".

Just curious, but where did you get your phrase you quoted? I googled it an the only thing that came up was you.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Just curious, but where did you get your phrase you quoted? I googled it an the only thing that came up was you.

To the best of my knowledge, I just coined it. It seems that too many people claim some sort of unfairness about consumption taxes. It costs a certain amount per mile to build and maintain roads It strikes me that payment for this should be born by those who use it in proportion to their usage. Hence the fairness of the gas tax. Likewise for sales tax. This is independent of the income of the payer. His responsibility is for his usage. Hence, as one goes down in income, the usage of the commons is out of proportion to their income.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

To the best of my knowledge, I just coined it. It seems that too many people claim some sort of unfairness about consumption taxes. It costs a certain amount per mile to build and maintain roads It strikes me that payment for this should be born by those who use it in proportion to their usage. Hence the fairness of the gas tax. Likewise for sales tax. This is independent of the income of the payer. His responsibility is for his usage. Hence, as one goes down in income, the usage of the commons is out of proportion to their income.

Does the gas tax pay for the roads?
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

States would still run their own state, the feds would just supply the funding. It doesn't make central government stronger, it makes states stronger.

It certainly does not make states stronger. It gives over the power of the purse completely to the USFG. It is very naive to think that this wouldn't be used for leverage to implement laws or policies that wouldn't otherwise be politically viable in a given state. This has been done in the past. The feds forced states to raise the drinking age to 21 by withholding highway funds from those who didn't.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

."It may sound like a dream to live in the seven US states that have no income taxes: every dollar that doesn’t go to the tax man stays in your bank account, right?
Not quite. Taxes reinforce inequality, as it turns out. States with no income tax end up taxing the poor far more heavily than other classes.
Poor Americans pay more in state taxes than other income classes
A tax system with zero income tax and high sales tax may seem like the picture of equality, in that everybody pays nearly 10 cents of every dollar spent to the government.
Instead, it’s punishing to the poor. Taxing a tenth of every dollar paid at the corner store isn’t much when there’s millions in the bank, but it’s quite a lot for someone earning minimum wage.
So what’s fair in the eyes of Americans? High property and income taxes, because they shift the burden to higher earners and property owners. Montana and Oregon, which topped the rankings for fairness, have larger emphasis on property and income taxes, resulting in proportionally higher taxes for the wealthy – the progressive tax structure that Americans like most."

Want to live in a state with no income tax? Make sure you're super rich first | Money | theguardian.com

Weird. I live in a state with no income tax, and Im not super rich. It also cant be a very good article if it doesnt know that definition of flat or fair when speaking of tax rates.

Flat = even
Fair = equal

Flat Tax = everyone pays the same rate on income
Fair Tax = everyone pays the same rate on consumption

By definition, those are not regressive.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Leaving aside the hyperbole of "super," the intent of our country was that every generation was to decide that for themselves. We've decided. We want a strong federal government.

When did we decide? I dont remember voting on any amendments giving the federal govt the power it enforces. Or overturning the 9th and 10th amendments. I dont see where any previous ratification did so either.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Weird. I live in a state with no income tax, and Im not super rich. It also cant be a very good article if it doesnt know that definition of flat or fair when speaking of tax rates.

Flat = even
Fair = equal

Flat Tax = everyone pays the same rate on income
Fair Tax = everyone pays the same rate on consumption

By definition, those are not regressive.
Well.....they are regressive. Given that in general the higher the income, the lower the percent of that income is consumption, then in a flat tax, the poor pay a higher rate on consumption, and in a fair tax the poor pay a higher rate on income.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Well.....they are regressive. Given that in general the higher the income, the lower the percent of that income is consumption, then in a flat tax, the poor pay a higher rate on consumption, and in a fair tax the poor pay a higher rate on income.

Tax systems are expressed in terms of rates. Everyone pays the same rate, thus the tax is flat. Unlike our current system where the rate is progressive. If you want to redefine in terms of payments, then the flat and fair tax would be even MORE progressive as the rich would end up paying more tax than others, and more of the share of taxes.

10% of $10,000 = $1000
10% of $1,000,000 = $100,000

Which means the rich pay progressively more taxes, at a flat rate.
 
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Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Tax systems are expressed in terms of rates. Everyone pays the same rate, thus the tax is flat. Unlike our current system where the rate is progressive. If you want to redefine in terms of payments, then the flat and fair tax would be even MORE progressive as the rich would end up paying more tax than others, and more of the share of taxes.

10% of $10,000 = $1000
10% of $1,000,000 = $100,000

Which means the rich pay progressively more taxes, at a flat rate.

No.

Because it costs a person more than $10k a year to subsist. Assuming a 10% tax on $10k, only $9k remains.

The person earning $1 million will be able to save a couple hundred thousand dollars, to which paying $100k will have absolutely zero economic impact on their ability to pay for necessities.

Do you understand?
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

We all benefit from the services provided by government. It is our responsibility to pay for those services. That is a given.
The amount I pay is a lot but still less than the government gives to any one of my siblings who have almost always been on the dole in one way
or another.
I like the way Mexico does it, according to what a tour guide told me. If the government needs more money, they raise taxes on gasoline
and diesel fuels. It barely affects the poor, who don't have cars, but they may have to pay a bit more to ride the bus.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

We all benefit from the services provided by government. It is our responsibility to pay for those services. That is a given.
The amount I pay is a lot but still less than the government gives to any one of my siblings who have almost always been on the dole in one way
or another.
I like the way Mexico does it, according to what a tour guide told me. If the government needs more money, they raise taxes on gasoline
and diesel fuels. It barely affects the poor, who don't have cars, but they may have to pay a bit more to ride the bus.

We dont all benefit. Thats the problem. 80% of spending is on social welfare programs, which I dont use.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Tax systems are expressed in terms of rates. Everyone pays the same rate, thus the tax is flat. Unlike our current system where the rate is progressive. If you want to redefine in terms of payments, then the flat and fair tax would be even MORE progressive as the rich would end up paying more tax than others, and more of the share of taxes.

10% of $10,000 = $1000
10% of $1,000,000 = $100,000

Which means the rich pay progressively more taxes, at a flat rate.

Going by the Consumer Expenditure Survey, those with an income of around $10,000 spend about 157% of their gross income on food, housing, transportation, and healthcare (meaning they must receive assistance from friends/family/government).
Those with an income of around $100,000 spend about 50% of their gross income on those items.

Since those making $10,000 are already spending more than they earn, how much worse off would they be if they had to pay income taxes as well? Or more to the point....how much more welfare would the rest of us have to pay for?

At the same time, those making $100,000 would not be any worse off as far as necessities go.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

We dont all benefit. Thats the problem. 80% of spending is on social welfare programs, which I dont use.

That doesn't mean you don't benefit from it. How much worse would crime be there were no welfare programs?
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

When did we decide? I dont remember voting on any amendments giving the federal govt the power it enforces. Or overturning the 9th and 10th amendments. I dont see where any previous ratification did so either.

Amendments to the Constitution (there have been 27). Elections. Supreme Court decisions.

Sorry, you really should pay more attention to history before making extremist claims about what the founders did or didn't intend.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

So you who use the term regressive do not want equal protection under the law.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Im all for eliminating income and sales tax.

actually there is nothing wrong with sales taxes, because it is a voluntary exchange, where as income tax is not voluntary, but by force.

getting rid of income tax and going to a consumption tax IMO, is the better way to go, because when governments raise taxes on consumption ALL the people feel the increase immediately, this makes raising taxes on that consumption something that the politicians have to be careful of and are not prone to raise very often.
 
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Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Well I am not arguing for other forms of taxation. I am in support of relieving tax duties from the states and having the federal government supply the funding states need. It would eliminate a large tax burden and help the economy.

Um, where do you think the money from the federal government comes from? There really isn't a goose that lays golden eggs, no Midas factor, no pennies from heaven. Every dollar distributed from the federal government had to be earned by some citizen somewhere - or - borrowed from somebody and will have to be paid back with interest also earned by some citizen somewhere - or - will be printed with no value behind it which erodes the value of the dollars we earned and hurts everybody.

Further when the state collects income tax, the money is filtered through a large bureaucracy that siphons off a percentage of it to feed that bureaucracy before returning it to the economy. How much better just to leave the money at full value in the economy to begin with? But if the federal government collects the money, now you have an enormous, monstrous, bloated, and ever more needy bureaucracy that will need a huge portion of that money just to sustain itself plus siphon off enough to use to bribe/coerce/buy votes and for other uses elsewhere. Whatever is left, if anything, is returned to the states where those bureaucracies siphon off more of it just to process it.

You want to help the poor? They aren't paying income taxes at the state or federal levels anyway though they should be. Eliminate taxes on food, shelter, fuel and the people helped most will be the poor. Then let the federal and state governments take just enough money to finance what they are constitutionally required to do and then let the people keep the money they earn and spend it as advantages them the most. You'll see the economy take off in a way that will best enable the poor to become less poor or unpoor.
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Um, where do you think the money from the federal government comes from? There really isn't a goose that lays golden eggs, no Midas factor, no pennies from heaven. Every dollar distributed from the federal government had to be earned by some citizen somewhere - or - borrowed from somebody and will have to be paid back with interest also earned by some citizen somewhere - or - will be printed with no value behind it which erodes the value of the dollars we earned and hurts everybody.
Incorrect, that is pre-1971 gold standard thinking.

"As Ruml's stated, with an "...inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue... It follows that our Federal Government has final freedom from the money market in meeting its financial requirements... All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue."

Taxes For Revenue Are Obsolete | Warren Mosler
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

actually there is nothing wrong with sales taxes, because it is a voluntary exchange, where as income tax is not voluntary, but by force.

getting rid of income tax and going to a consumption tax IMO, is the better way to go, because when governments raise taxes on consumption ALL the people feel the increase immediately, this makes raising taxes on that consumption something that the politicians have to be careful of and are not prone to raise very often.

Sales tax is not really voluntary if you have to spend all your income to eat, shelter yourself, clothe yourself etc...
 
Re: A good piece on why Flat Taxes or the Fair Tax is regressive, and raises inequali

Um, where do you think the money from the federal government comes from? There really isn't a goose that lays golden eggs, no Midas factor, no pennies from heaven. Every dollar distributed from the federal government had to be earned by some citizen somewhere - or - borrowed from somebody and will have to be paid back with interest also earned by some citizen somewhere - or - will be printed with no value behind it which erodes the value of the dollars we earned and hurts everybody.

Further when the state collects income tax, the money is filtered through a large bureaucracy that siphons off a percentage of it to feed that bureaucracy before returning it to the economy. How much better just to leave the money at full value in the economy to begin with? But if the federal government collects the money, now you have an enormous, monstrous, bloated, and ever more needy bureaucracy that will need a huge portion of that money just to sustain itself plus siphon off enough to use to bribe/coerce/buy votes and for other uses elsewhere. Whatever is left, if anything, is returned to the states where those bureaucracies siphon off more of it just to process it.

You want to help the poor? They aren't paying income taxes at the state or federal levels anyway though they should be. Eliminate taxes on food, shelter, fuel and the people helped most will be the poor. Then let the federal and state governments take just enough money to finance what they are constitutionally required to do and then let the people keep the money they earn and spend it as advantages them the most. You'll see the economy take off in a way that will best enable the poor to become less poor or unpoor.
I see a problem......we would be putting a lot of people out of work, mostly government employees.
and I disagree with not taxing fuel for vehicles. The truly poor cannot afford cars.
 
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