47% will pay no federal income tax (1 Viewer)

[BHM]

i am not very Conservative on most issues-- but one Conservative idea i am in favor of is the Flat Tax: whether you make $20k a yr., or $20 million a year, everyone pays the exact same % of their income in taxes... say, 17%, you do your taxes on the back of a postcard and mail it in with a check, no loopholes, no deductions, no exemptions... it'll never happen, b/c it would put the IRS and tax attorneys out of business.. But, IMO, what's more fair than everyone paying the exact same %?? Someone making a million dollars a yr will still be paying a whole lot more than someone who's middle-class, but the % will be the same... What's more fair- or more American-- than that??

I am all aboard the flat tax train. Finally, something we can agree on.

 

[KardiacKat]

i would imagine that the rich would actually be against the Flat Tax i am proposing b/c with all of their tax shelters and loopholes, they probably wind up paying a far lower percentage than they would pay under a Flat Tax... just a guess though.

i think you are correct.

 

[Mr. Blue Sky]

I am all aboard the flat tax train. Finally, something we can agree on.

oh come on-- we've agreed on stuff before.

 

[Mr. Blue Sky]

Abandoning a progressive tax system for a flat tax would increase the tax burden for most Americans. Lower income households would end up paying a higher percentage of their income in tax than others if you kept consumption taxes.

how ya figure?? at the risk of sounding like a broken record-- if you get rid of shelters and loopholes, you'd have the wealthy footing a larger burden, reducing said burden on the lower and middle class.

you're pretty good with the charts and graphs, so maybe you could show me otherwise.

 

[BHM]

oh come on-- we've agreed on stuff before.

I think we agreed to disagree a couple of times.

 

[LSSpam]

EVERY American should have SOME tax burden.

You know, I kind of wonder about this. I've been a huge proponent of the progressive tax system on this forum and remain so, but there is an ethical dimension in terms of how everyone votes, but not everyone has an equal "stake" in the consequences of their vote.

It was the same concept behind universal conscription.

However, universal conscription, in practice, is a generally recognized failure in terms of actual military performance nowdays, and ultimately tax policy is about "what works" before anything else as well.

Nonetheless, when people vote to increase the Federal Budget, that should mean something tangible to them right? And not just some nebulous Federal Deficit.

I mean how can we be rapidly expanding the Federal Budget and somehow even less people have a direct and observable stake in the consequences of that? How can we expect the people in a democracy to check that tendency unless there is some negative effect they can tangibly feel and relate back to the policies?

 

[Severum]

Gues I should have thrown in Federal Income to my statement. Imagine how it would lower the tax burden on those that do pay if the 47% that are not paying would pay even a little.

Here's more specific data from the TPC article that CNN used.

how ya figure?? at the risk of sounding like a broken record-- if you get rid of shelters and loopholes, you'd have the wealthy footing a larger burden, reducing said burden on the lower and middle class.

you're pretty good with the charts and graphs, so maybe you could show me otherwise.

Their liability can be reduced, but our federal tax system is still progressive after all the shelters and loopholes.

Here's the distribution of federal taxes by household income quintiles.



(click for more detailed analysis)

 

[LSSpam]

Also, and I don't want to derail this thread right as I introduce a point I'd like to discuss, but to illustrate what I'm talking about, during the Iraq war a lot of talk was brought up about re-introducing the draft, particularly by opponents of the war/occupation. The idea was that if everyone had an equal stake in the Iraq policy (or more equal at least) because of the consequences of the draft, opinions would be different about Iraq.

Which is entirely true and an excellent point.

And yet many of those same people would shrink from the same concept applied to economics, that if everyone had at least, let's say, a "more equal" stake in economic decisions being made, then feelings about things like the size of the Federal Deficit would change drastically. Why are these two concepts seemingly opposed? They appear to be entirely philosophically consistent from my standpoint and definantly merit discussion.

 

[BHM]

Abandoning a progressive tax system for a flat tax would increase the tax burden for most Americans. Lower income households would end up paying a higher percentage of their income in tax than others if you kept consumption taxes.

How can that be? 15% is 15%. It does not matter what the income is, you pay 15% of it. Now if you mean they would be paying a higher percentage of their disposable income, then I would agree. My response to many of those people would be to explain that they should not have dropped out of school and stop having kids you can not afford.

The upper rich people are not getting away with not paying taxes because of write offs. They may be lowing their tax rates but they are still paying a much higher % than most people. The middle class and upper class are the ones footing the bill for the 47% that are not paying federal income tax. Reduce the percentage in that group and the problem is solved.

I am not sure why people think that it is the job of the rich to pay for the uneducated family of five. And I am NOT saying that every low income person is uneducated and are spitting out babies. But we all see them out there and there are a lot of them. Stop by any Walmart if you do not think so.

 

[LSSpam]

My response to many of those people would be to explain that they should not have dropped out of school and stop having kids you can not afford.

That's an absurd and idiotic trivialization of what he's referring too. Take gas for instance. The amount of driving someone who makes 30,000 a year is not, on average, significantly less or less costly then the amount of driving someone who makes 150,000 a year does. Yet the price of gas is the same for both and therefore consumes a greater percentage of the disposable income of the 30k a year person.

This can be applied to numerous other things, such as most daycare, the majority of basic foodstuffs (like milk, bread, etc), electricity, water, sanitation, on and on.

Those things don't get cheaper just because you have less money, and being a "college dropout" or "having kids" doesn't factor into it. 30k a year is the starting salary in many states for single teachers with a college degree.

 

[KardiacKat]

I have a college degree and one child. Thank you.

 

[Danchrism]

30k a year is the starting salary in many states for single teachers with a college degree.

Don't remind me.

Of course, I don't expect this to change his specious advice any, aside from a shift in ideology from "don't have kids you can't afford" to "choose a better-paying career, then"

As though the demand for teachers is optional

 

[iron error]

You know, I kind of wonder about this. I've been a huge proponent of the progressive tax system on this forum and remain so, but there is an ethical dimension in terms of how everyone votes, but not everyone has an equal "stake" in the consequences of their vote.

It was the same concept behind universal conscription.

However, universal conscription, in practice, is a generally recognized failure in terms of actual military performance nowdays, and ultimately tax policy is about "what works" before anything else as well.

Nonetheless, when people vote to increase the Federal Budget, that should mean something tangible to them right? And not just some nebulous Federal Deficit.

I mean how can we be rapidly expanding the Federal Budget and somehow even less people have a direct and observable stake in the consequences of that? How can we expect the people in a democracy to check that tendency unless there is some negative effect they can tangibly feel and relate back to the policies?

We have talked about this before on the EE. Its a very important point, but hard to talk about without it turning into a sort of class-warfare thing.



I will be honest and transparent for the sake of the discussion.

Some of you may be aware my wife is a doctor and she just finished her first real year out of residency.

When we got her first monthly pay check we were blown away. We come from middle class backgrounds, had great upbringings that led us to make good choices regarding education, but we both never grew up rich by any means. Seeing a check that size was astonishing. However, just as astonishing is seeing how much was withheld for taxes each month. I will just say it was a huge number, lets just say what a lot of people work half a year to make she pays in taxes in one month. The equivalent of a lot of other wage earners combined. And yes, its a great problem to have, with the net amount being still huge. But you just begin to realize you are paying a whole whole whole whole lot more into the tax system than others are. So while it makes sense on one level, because you can afford it, on another level it just does not feel right. For example, the decisions the government makes in terms of crazy spending, MY household will be paying for, not other households, half this country possibly will have no personal tangible financial burden to carry in the future for what our politicians do today. Think about that for a second.

As far as this myth of loopholes and ways to get out of taxes for the rich, I wish it was true. We have the same opportunities as before when we made a lot less, deductions for charitable gifts (we still give away 10% to different charities its just now a huge amount), mortgage interest, student loan interest, child care credit, certain taxes paid, standard deductions for kids. That only goes so far towards lowering your tax liability. Certain cool things also phase out of existence once you make above a certain amount. No more Roth IRA for example.

That said, the real reason the rich get richer is because of capital gains taxes being low. THAT is the main issue. Yet again, its not that simple an issue. Some would say we should pay the same rate for all financial gain made in life, but if I use net dollars AFTER being taxed already to invest in an idea or product or property, should I have to pay the same tax rate I already paid earlier AGAIN? Its not very incentifying (sp) to face that, it better be a pretty good opportunity to overcome that double whammy.

 

[LKN H20Girl]

You know, I kind of wonder about this. I've been a huge proponent of the progressive tax system on this forum and remain so, but there is an ethical dimension in terms of how everyone votes, but not everyone has an equal "stake" in the consequences of their vote.

It was the same concept behind universal conscription.

However, universal conscription, in practice, is a generally recognized failure in terms of actual military performance nowdays, and ultimately tax policy is about "what works" before anything else as well.

Nonetheless, when people vote to increase the Federal Budget, that should mean something tangible to them right? And not just some nebulous Federal Deficit.

I mean how can we be rapidly expanding the Federal Budget and somehow even less people have a direct and observable stake in the consequences of that? How can we expect the people in a democracy to check that tendency unless there is some negative effect they can tangibly feel and relate back to the policies?

And the people voting for these people so they get the most benefits are the ones not contributing!

 

[Severum]

How can that be? 15% is 15%. It does not matter what the income is, you pay 15% of it. Now if you mean they would be paying a higher percentage of their disposable income, then I would agree. My response to many of those people would be to explain that they should not have dropped out of school and stop having kids you can not afford.

The upper rich people are not getting away with not paying taxes because of write offs. They may be lowing their tax rates but they are still paying a much higher % than most people. The middle class and upper class are the ones footing the bill for the 47% that are not paying federal income tax. Reduce the percentage in that group and the problem is solved.

I am not sure why people think that it is the job of the rich to pay for the uneducated family of five. And I am NOT saying that every low income person is uneducated and are spitting out babies. But we all see them out there and there are a lot of them. Stop by any Walmart if you do not think so.

Ignoring the fairness issues, a flat income tax with no exemptions would be regressive because those households also pay the same sales tax, gas tax, fees, etc which consumes a larger portion of their income. A flat consumption tax with no exemptions would be terribly regressive for all the reasons that LSSpam noted.

There's absolutely no chance of replacing our current progressive federal income taxes with a regressive pure flat tax because it would be political suicide for both parties. Even Forbes proposed exemptions in his 17% flat tax plan (which still had huge problems in other areas).