U.S Income Tax

[Socrates]

Me and my bro Kuja were talking a while ago about Universal Healthcare, and it led to a discussion about our current income tax system, what do you guys think, too many loopholes, or working just fine?

~ Socrates the Great

 

[Sephiroth Crescent]

Me and my bro Kuja were talking a while ago about Universal Healthcare, and it led to a discussion about our current income tax system, what do you guys think, too many loopholes, or working just fine?

~ Socrates the Great

As we both agreed, its unfair for middle-class families that pay more in taxes then the really rich people like for example Al Gore.

This however isn't a tax problem its an exploit issue. We could re-do the tax system, but im sure those rich and corrupt politicians who enjoy their tax-less, or low tax lives will disagree, and as such invent B.S.

Something must be done whether its a new tax all-together or a complete loophole-less income tax.

- Kuja

 

[strifehart]

i believe the bracket systems is a collossal failure. we should be using percentage systems. where you pay a percentage of your earnings. i mean, with the current system, you could be up for a raise but you might not want it because it might mean jumping up a tax bracket. means you pay more and end up with less overall. how does that make sense?! i don't really know too much about the system and all, just what ive picked up from my dad.

 

[Ness]

Strife, are you suggesting a system where everyone, regardless of income, pays the same percentage of their income? Or where certain groups of people pay different percentages? Just looking to clarify.

 

[strifehart]

i'd say everyone pays the same percentage, but of course, if you make less than a certain amount, you'd be exempt from that rule. just like the lowest tax bracket doesn't really get taxed now?

 

[Donald Trump]

where you pay a percentage of your earnings. i mean, with the current system, you could be up for a raise but you might not want it because it might mean jumping up a tax bracket. means you pay more and end up with less overall. how does that make sense?! i don't really know too much about the system and all, just what ive picked up from my dad.

That's pretty much fiscal drag. Moving up a tax bracket will not result in a loss of earnings unless you are at the very top of the bracket and your income increases a little bit.
However as the person would know about this, they would be savvy enough to keep their income just in the tax bracket and then receive fringe benefits.

Flat tax rates(where people all pay the same percent eg 20%) don't work. One of jobs of the government is to allocate income evenly, which is why the rich people pay more tax than anyone else. Flat tax rates simply don't work. They may seem fairer, but they aren't.

 

[strifehart]

Moving up a tax bracket will not result in a loss of earnings unless you are at the very top of the bracket and your income increases a little bit.

that's exactly what i was talking about.

and why should the rich pay more in taxes? if they work harder, earn more and invest more intelligently, why should they have to support the nation more than anybody else?

 

[Ness]

Flat tax rates(where people all pay the same percent eg 20%) don't work. One of jobs of the government is to allocate income evenly, which is why the rich people pay more tax than anyone else. Flat tax rates simply don't work. They may seem fairer, but they aren't.

Since when has it been the government's job to allocate income evenly? It should not be government's role to have any business in the free market. Sure, their main stated purpose is to prevent injustice, I'm sure; but there is a fine line between preventing said injustice and meddling where they should not. Business owners should have a level of autonomy in determining how much their employees get paid.

So I guess my question is: Why do you say that it's the government's job to allocate income? Furthermore, why don't flat tax rates work? Do you have any examples?

 

[Donald Trump]

that's exactly what i was talking about.

and why should the rich pay more in taxes? if they work harder, earn more and invest more intelligently, why should they have to support the nation more than anybody else?

Because they don't. It's kind of naive to assume that the rich are rich because they work harder, or are smarter.

Also the rich need to pay the mos taxes so that the government has a lot of revenue. That means they they will have more to spend on healthcare, education, roads, infrastructure, then they would with a flat tax.

Furthermore if we tax the poor as the same as we tax the rich, how are they going to be able to afford to buy goods? Firstly is would be morally wrong to tax the poor at such a level that they can't afford to buy food, clothes etc. Secondly, if they aren't buying goods then any econom would collapse.

Edit:

Since when has it been the government's job to allocate income evenly? It should not be government's role to have any business in the free market. Sure, their main stated purpose is to prevent injustice, I'm sure; but there is a fine line between preventing said injustice and meddling where they should not. Business owners should have a level of autonomy in determining how much their employees get paid

Free markets don't exist. They can have very little government intervention, but they are still mixed markets. Also it has always been a goverment's duty to allocate money efficiently.

So I guess my question is: Why do you say that it's the government's job to allocate income? Furthermore, why don't flat tax rates work? Do you have any examples

Yes. The list of countries with flat tax rates are pretty much all former soviet countries, whose economies don't work. Coupled with a couple of south American countires and a couple of African countries. Surely that fact that no countries with reasonable economies have a flat tax rates is proof that they don't work.
Flat taxes may sound like a nice idea on paper, a bit like communism. However communism can have positive effects, flat taxes don't. They simply don't work.

 

[strifehart]

a majority of people with higher incomes have made better choices with their money. the few you make reference to, like the ones who have money but are not intelligent or industrious are all very few in number. i'm talking about doctors and lawyers and businessmen who do work hard for their money.

you say that a flat tax doesn't work. you worry about the poor. that's why if people make lower than a certain amount annually, i said they should become exempt. so they can afford the bare necessities.

that being said, the rest of my post has nothing to do with flat tax, so don't take it that way. it's more on the system we have in place now.

you mention that the government has to tax people the way it does in order to have enough revenue to fund schools and relief programs and whatnot. the government spends ridiculous amounts of money on miscellaneous bureaucratic agencies that only satisfy a small margin of the population's needs if any. the corruption of government spending is out of control. if that's cleaned up, then maybe the government wouldn't need so much revenue.

37.7% of our taxes are income taxes as far as revenue goes. compared to canada at 35% (keeping in mind they have a much lower tax revenue per capita) and the UK at 29.8%. we tax people at an average of $1800 per capita as far as income is concerned. so why do we need to tax people so much?

oh and lets not forget the whole national debt...glad to see we're paying that sucker off using our tax money.

now i totally understand where you're coming from on income taxes. i find it hard to back any method as being the right one. i do believe however, that there are definitely problems with government spending. if those problems didn't exist, we wouldn't need such a convoluted taxing system with such a high revenue.

 

[Ness]

Because they don't. It's kind of naive to assume that the rich are rich because they work harder, or are smarter.

I don't see why that's so naïve. Now before I go sounding overly idealistic, I don't think that every single wealthy person got to where they are with good old-fashioned hard work. However, I think it's somewhat unfair to say that none of them really earned their income. Certainly there are plenty of example of people who took simple ideas and made them into piles of money.

Also the rich need to pay the mos taxes so that the government has a lot of revenue. That means they they will have more to spend on healthcare, education, roads, infrastructure, then they would with a flat tax.

Why is it the duty of the rich to provide the majority of the government's revenue? Besides, the government gets plenty of revenue as is. For instance (using the US as an example, it's what I know), if the government collected a mere $100 from even HALF of the U.S. population (~150 million) that would provide a raw revenue of $150 billion from income tax alone, not even counting the other taxes that we pay (Social Security, Medicare, etc). It's safe to say that most income tax payers actually pay more than this amount, so what's the problem with revenue? Also, education and roads should be a state-to-state issue, but that's another thread... =P
Furthermore if we tax the poor as the same as we tax the rich, how are they going to be able to afford to buy goods? Firstly is would be morally wrong to tax the poor at such a level that they can't afford to buy food, clothes etc. Secondly, if they aren't buying goods then any econom would collapse.

Free markets don't exist. They can have very little government intervention, but they are still mixed markets.

This is an unfortunate fact. Indeed, there probably will never be such a thing as a pure free market, because human beings will usually try to take shortcut to get what they want, hence the need for government regulation. I'm not claiming that a free market exists (quite the opposite actually), but that's no reason to hope for a better system. The less the government is involved with the economy, the better the economy can run.

Also it has always been a goverment's duty to allocate money efficiently.

I still don't fully understand why this is the case. You simply stating that this is a duty of government does not make it so. Also, "allocating money efficiently" and "allocating income evenly" are two very different concepts.

Yes. The list of countries with flat tax rates are pretty much all former soviet countries, whose economies don't work. Coupled with a couple of south American countires and a couple of African countries. Surely that fact that no countries with reasonable economies have a flat tax rates is proof that they don't work.

Just because countries with reasonable economies do not use flat tax systems is absolutely NOT proof that they don't work. It's simply proof that their current system works acceptably.

Flat taxes may sound like a nice idea on paper, a bit like communism. However communism can have positive effects, flat taxes don't. They simply don't work.

What positive effects can Communism bring? Can you state positive things that Communism has done throughout history? I find the comparison between the flat tax and communism to be kind of ironic, since the current graduated income tax is actually a socialist measure...

Speaking of socialism vs. Communism: Socialism is an economic policy, Communism is a political system. They are related, but not the same; and Communism shouldn't play much of a role in this discussion.

 

[Donald Trump]

I don't see why that's so naïve. Now before I go sounding overly idealistic, I don't think that every single wealthy person got to where they are with good old-fashioned hard work. However, I think it's somewhat unfair to say that none of them really earned their income. Certainly there are plenty of example of people who took simple ideas and made them into piles of money.

And there are millions of people who work extremely hard, and still earn minimum wage. There is child labour, these people work harder than anyone else and het paid less. They have no opportunity for education, and sure one or two people do manage to make themselves rich. But that is the exception not the rule

Why is it the duty of the rich to provide the majority of the government's revenue? Besides, the government gets plenty of revenue as is. For instance (using the US as an example, it's what I know), if the government collected a mere $100 from even HALF of the U.S. population (~150 million) that would provide a raw revenue of $150 billion from income tax alone, not even counting the other taxes that we pay (Social Security, Medicare, etc). It's safe to say that most income tax payers actually pay more than this amount, so what's the problem with revenue?

There are 300 million people in the US. So if we have $150billion, that is 50 dollars to spend on everyone. A government needs a lot more. Education and healthcare cost a hell of a lot more. Governments also offer grants to businesses etc. Governments normally try to maximise their revenues.

This is an unfortunate fact. Indeed, there probably will never be such a thing as a pure free market, because human beings will usually try to take shortcut to get what they want, hence the need for government regulation. I'm not claiming that a free market exists (quite the opposite actually), but that's no reason to hope for a better system. The less the government is involved with the economy, the better the economy can run.

That's subjective. Some people would argue that government intervention is necessary, and can be beneficial. But that is neither here nor there.

I still don't fully understand why this is the case. You simply stating that this is a duty of government does not make it so. Also, "allocating money efficiently" and "allocating income evenly" are two very different concepts.

Evenly and efficientlty are the same here. It is more economically efficient to allocate money evenly.
It is the duty of the government because otherwise, the health of the poor will decrease, crime will increase as will social unrest.

Just because countries with reasonable economies do not use flat tax systems is absolutely NOT proof that they don't work. It's simply proof that their current system works acceptably.

If a flat tax works well, why do no economically strong countries(except for Russia, which is a mess) use flat tax rates? They just don't work.

What positive effects can Communism bring? Can you state positive things that Communism has done throughout history? I find the comparison between the flat tax and communism to be kind of ironic, since the current graduated income tax is actually a socialist measure...

Speaking of socialism vs. Communism: Socialism is an economic policy, Communism is a political system. They are related, but not the same; and Communism shouldn't play much of a role in this discussion.

Pre 1917 Russia was a pathetic excuse for a country no industry, just horrible. However 30 years of communism, and the USSR(not Russia yes, but mainly Russia) was one of the world's only two superpowers.
Also China, has the world's fastest growing GDP and will overtake the US soon.
Communism can have advantages, a flat tax just means the rich have to pay less taxes.

you say that a flat tax doesn't work. you worry about the poor. that's why if people make lower than a certain amount annually, i said they should become exempt. so they can afford the bare necessities

How can you justify that amount of income that people earn, so they that don't have to pay tax? It'll probably be an arbitrary decision. Also poor people need more money that just the bare minimum.

you mention that the government has to tax people the way it does in order to have enough revenue to fund schools and relief programs and whatnot. the government spends ridiculous amounts of money on miscellaneous bureaucratic agencies that only satisfy a small margin of the population's needs if any. the corruption of government spending is out of control. if that's cleaned up, then maybe the government wouldn't need so much revenue.

But that isn't the fault of a progressive tax system. It's the government being inefficient. Which I agree is a problem. However, a flat tax rate won't change that.

oh and lets not forget the whole national debt...glad to see we're paying that sucker off using our tax money.

National debt isn't necessarily bad. However when it had been used for consumption it is. Which is mostly the case, and since it is the consumers who create the debt, it makes sense that that some of the tax revenue is used to pay it off.

 

[Ness]

And there are millions of people who work extremely hard, and still earn minimum wage. There is child labour, these people work harder than anyone else and het paid less. They have no opportunity for education, and sure one or two people do manage to make themselves rich. But that is the exception not the rule

Where in the US does child labor take place? Perhaps you're describing a different country, but unless a parent refuses to enroll their child in school, public education is open to everyone. Furthermore, labor laws are quite strict regarding minimum working age. Sure, there are many people who work hard and earn minimum wage, but in the context of tax reform, what does that fact have to do with anything?

There are 300 million people in the US. So if we have $150billion, that is 50 dollars to spend on everyone. A government needs a lot more. Education and healthcare cost a hell of a lot more. Governments also offer grants to businesses etc. Governments normally try to maximise their revenues.

It would be $500 dollars per person. The point was that, based on the size of our population, the government does not need to collect that much from people to have plenty of money. A government's budget should not be measured on how much it has per capita, but how much it needs to run its basic functions. Yes, part of the problem is a bloated bureaucracy that needs serious spending reform, but that's not the issue here. Also, scratch "healthcare" off the list of things government should be paying for. We don't have socalized healthcare (not yet, at least).

That's subjective. Some people would argue that government intervention is necessary, and can be beneficial. But that is neither here nor there.

Of course it's subjective. But there's a fine example of overspending in government. The government could save a lot of money by not having the regulatory agencies that it has.

Evenly and efficientlty are the same here. It is more economically efficient to allocate money evenly.

That's not the difference I was referring to. You went from saying "allocate incomes evenly", which I took to mean personal incomes not governments' (if you meant something different, please let me know). Then you said "allocate money efficiently", which I agree, governments should be fiscally responsible.

It is the duty of the government because otherwise, the health of the poor will decrease, crime will increase as will social unrest.

So you're saying that crime will increase and the health of the poor will decrease if government utilizes a flat tax? (I know I'm drawing a connection that you haven't drawn yet, but that's the next logical step. That's why I'm asking you a question, not making a statement.)

If a flat tax works well, why do no economically strong countries(except for Russia, which is a mess) use flat tax rates? They just don't work.

You're saying the same thing that you said in the last post. All that this proves is that the systems in place work acceptably. You're drawing an unfair conclusion here.

Pre 1917 Russia was a pathetic excuse for a country no industry, just horrible. However 30 years of communism, and the USSR(not Russia yes, but mainly Russia) was one of the world's only two superpowers.
Also China, has the world's fastest growing GDP and will overtake the US soon.

The Soviet Union's economy was still garbage all through the 1900s. Just because it was a military superpower doesn't mean that it's economy was strong and robust (quite the contrary, in fact). This continuation of socialist economic policies and military hyper-spending actually led to the collapse of their economy.

China's economy is on the upswing because they are inacting capitalistic measure in their economy (they learned from USSR's mistakes). Furthermore, you also seem to be saying that the US's economy is weaker or weakining. Do you think that has anything to do with over-regulation domestically and higher tax rates?

Communism can have advantages...

And what would those advantages be?

...a flat tax just means the rich have to pay less taxes.

And what did the rich do to deserve such a punishment?

 

[Donald Trump]

Where in the US does child labor take place? Perhaps you're describing a different country, but unless a parent refuses to enroll their child in school, public education is open to everyone. Furthermore, labor laws are quite strict regarding minimum working age. Sure, there are many people who work hard and earn minimum wage, but in the context of tax reform, what does that fact have to do with anything?

Child labour, I was talking about generally. However the poorer people often have their children working when they can. At ages like 14.
Also technically speaking, education isn't a public good, as it can be excludable.

It would be $500 dollars per person. The point was that, based on the size of our population, the government does not need to collect that much from people to have plenty of money. A government's budget should not be measured on how much it has per capita, but how much it needs to run its basic functions. Yes, part of the problem is a bloated bureaucracy that needs serious spending reform, but that's not the issue here. Also, scratch "healthcare" off the list of things government should be paying for. We don't have socalized healthcare (not yet, at least).

You only get $500 per person if you taxed half the population $1000. As healthcare isn't completely private there are still healthcare costs. Education and infrastructure alone are going to cost a lot more than $50 or %500 per person.
The size of the population significantly effects the amount of tax needed. It works both ways having many citizens to take revenue from means a large budget. However having a large population means a lot of taxes are needed.

That's not the difference I was referring to. You went from saying "allocate incomes evenly", which I took to mean personal incomes not governments' (if you meant something different, please let me know). Then you said "allocate money efficiently", which I agree, governments should be fiscally responsible.

By efficiently, I meant personal incomes. It is more efficient for incomes to be equal.

So you're saying that crime will increase and the health of the poor will decrease if government utilizes a flat tax? (I know I'm drawing a connection that you haven't drawn yet, but that's the next logical step. That's why I'm asking you a question, not making a statement.)

Quite possibly, yes. I'm not saying it will happen, but it is more likely. A flat tax widens the gap between 'the haves' and 'the have nots'. No one can say with 100% accuracy that crime will increase and living and health standards will decrease. But it is the obvious cocnclusion to draw.

You're saying the same thing that you said in the last post. All that this proves is that the systems in place work acceptably. You're drawing an unfair conclusion here.

They aren't working acceptably though. Large numbers of these people are leaving, and the ones who can afford to, send their children overseas for an education.

The Soviet Union's economy was still garbage all through the 1900s. Just because it was a military superpower doesn't mean that it's economy was strong and robust (quite the contrary, in fact). This continuation of socialist economic policies and military hyper-spending actually led to the collapse of their economy.

China's economy is on the upswing because they are inacting capitalistic measure in their economy (they learned from USSR's mistakes).

I'm not arguing that. However it doesn't help that they were too stupid to realise collectivisation didn't work, and didn't do anything about it.
Yes Deng Xiaoping introduced economic reforms, but China still is a communist country. The point I was making was that Russia went from being a backwards country to a superpower. You didn't mention that the USSR was supporting Cuba, Eastern Europe, Angola and other assorted communist regimes across the world.
Also there was the pressure of the cold war.
But nevermind.

Do you think that has anything to do with over-regulation domestically and higher tax rates?

I see what you're trying to do.
No I wouldn't. I wouldn't say the US is weakening, It has a normal increase in GDP. China is just out preforming it.
Though I'm interested as to which parts of the domestic market are over-regulated in your opinion.

And what did the rich do to deserve such a punishment

This is also subjective. You could say it is a moral obligation. Those who made themselves rich most likely went to a public school, so really they are repaying a debt.

Others would say it is due to the fact that the rich have often exploited their workers etc.

 

[Ness]

Child labour, I was talking about generally. However the poorer people often have their children working when they can. At ages like 14.

Most labor laws require workers to be at least 15. If you work before that, it's under the table, which is not the norm by a good stretch. Policy should not be build on exceptions.

Also technically speaking, education isn't a public good, as it can be excludable.

What do you mean when you say 'excludable'?
No one can be rejected from a public school institution on the basis of their income. How is this not a public good? Besides, education funding comes from individual states, for the most part. Federal government doesn't have as much say in education.

You only get $500 per person if you taxed half the population $1000.

Check your math again.

As healthcare isn't completely private there are still healthcare costs. Education and infrastructure alone are going to cost a lot more than $50 or %500 per person.

You're missing my point. I'm not trying to quantify the amount of money a government needs to have per person. I'm saying that by taking a relatively small amount of money from only half of the population (tax base is more than likely larger than 50% of the population), a good deal of income can be provided.

The size of the population significantly effects the amount of tax needed. It works both ways having many citizens to take revenue from means a large budget. However having a large population means a lot of taxes are needed.

Sure, the larger a country is, the more money its government will need to run efficiently. However, the size of a population also increases the size of a tax base. The size of a nation has nothing to do with graduation of the tax rate.

By efficiently, I meant personal incomes. It is more efficient for incomes to be equal.

Can you expound on this further? Why is it more efficient for incomes to be equal? And if so, why use a bloated, inefficient tax code to equalize incomes? Why not use government edict? Wouldn't that be more...efficient?

Quite possibly, yes. I'm not saying it will happen, but it is more likely. A flat tax widens the gap between 'the haves' and 'the have nots'. No one can say with 100% accuracy that crime will increase and living and health standards will decrease. But it is the obvious cocnclusion to draw.

Is there proof that a flat tax rate would widen this gap? Furthermore, even if there is such proof, is it the government's role to close this gap?
It's an unpleasant truth, but society will always be composed of "haves" and "have nots". No amount of government correction will ever change that. A country's economy would collapse before it could achieve this goal (Soviet Union!).

They aren't working acceptably though. Large numbers of these people are leaving, and the ones who can afford to, send their children overseas for an education.

I don't think that large numbers of people are emigrating from the United States. And if you're referring to other nations, I doubt it's the system of taxation that's drawing them away. Again, emigration isn't really an acceptable way of proving the success/failure of an economic policy.

I'm not arguing that. However it doesn't help that they were too stupid to realise collectivisation didn't work, and didn't do anything about it.

Well, you did argue that the Soviet Union was a great superpower for proof that Communism can have positive effects. Russia had plenty of problems before the Bolsheviks, no doubt about that. However, Communism certainly didn't help them.

Yes Deng Xiaoping introduced economic reforms, but China still is a communist country.

The point is that standard Communist economics (read: socialism) don't do anything but send a nation's economy into stagnation, at best.

The point I was making was that Russia went from being a backwards country to a superpower. You didn't mention that the USSR was supporting Cuba, Eastern Europe, Angola and other assorted communist regimes across the world.

You're right, I didn't. But if you want to provide more examples of socialist regimes that required economic backing from their ideological "mother country", then that is fine. Such examples are Cuba, Eastern Europe, Angola, and other assorted Communist regimes across the world.

Also there was the pressure of the cold war.
But nevermind.

The straw that broke the camel's back. The Cold War (specifically Reagan's foreign policy) turned a stagnant economy into a broken one.

I see what you're trying to do.

What's that? Argue against graduated income tax? You got it.

No I wouldn't. I wouldn't say the US is weakening, It has a normal increase in GDP. China is just out preforming it.

If that's the case, then what does a difference in economic performance have to do with anything? China wins because American businesses are outsourcing, nevermind the fact their population is about three times our size.

Though I'm interested as to which parts of the domestic market are over-regulated in your opinion.

The parts that lead American businesses to outsource to countries like China and India (causing their GDPs to skyrocket, how about that). Basically, just about everything. I certainly couldn't formulate a single list, it would be far too long.

This is also subjective. You could say it is a moral obligation. Those who made themselves rich most likely went to a public school, so really they are repaying a debt.

Saying it's a moral obligation is subjective. I'll agree that my point is subjective, but so is yours.
Also, you're saying now that rich people likely went to public schools? Wouldn't that mean that they worked hard and were smarter to earn their higher incomes? Odd, I thought that most rich didn't work any harder or better than anyone else...

Others would say it is due to the fact that the rich have often exploited their workers etc.[/quote]

 

[Contra Fates]

My father is an accountant, and my boyfriend is aiming to become one as well, so I know my way around taxes. I just wish to make a few additional comments to what was said so far, as well as what I think should be done with taxes.

1. It seems that everyone in this thread is only concerned with personal taxes, which is understandable since this is about the 'income tax.' But, I just want to mention that the money that the government receives from personal taxes is not that big of a number compared to what the government receives from small businesses, corporations, the lottery, etc.

2. As mentioned earlier, because the tax-money received from personal taxes is not entirely paramount, the arguments about 'why do the rich have to pay all the taxes?" is relatively minor when you consider the whole picture. It's really those wealthy person's companies that are dishing out the tax-money.

But, as an answer to this question...the answer is simple: the top 5% of the United States comprise 50% of the country's wealth. With such a small percentage having that much money, they should be taxed more heavily.

As for what I feel should be done about the U.S. Income Tax:

1. The taxes on labor-based income, should be much smaller. Instead, taxes for income that come from investments, gambling, and the stock-market...should be taxed more heavily. Simply put: the money you WORK for should not be taxed as much as the money you DO NOT work for.

2. I do believe that the top 5% of the United States, personal-tax-wise, should be taxed more heavily than they are. Instead of buying 5 mansions, 4 yachts, and 2 private jets...those that are wealthy can suffer with having to pay a couple more million a year in taxes. Not to sound too cynical, but most of them are blowing their money away, anyway. If the rich do not wish to pay those taxes, then they are more than capable of moving to another country with their riches.

 

[Ness]

Before we continue any further with the give-and-take, I want to say a few other things.

First, I'm not entirely convinced that a flat tax is the best system. I don't want to come off as a rabid flat tax supporter. However, I do absolutely believe that the current system is rubbish. There is no need to have a graduated income tax, or any income tax at all.

In the U.S. Constitution, Congress is given the ability to post taxes however it sees fit. There is no provision forcing them to tax our incomes. The first income tax wasn't even set up until the Civil War. Before that, the rule of thumb was the "head tax", which you paid simply because you were a citizen. Poll taxes were also enacted, where you paid to vote (back then, voting was considered a public service to almost everyone). The country's economy did just fine then, before incomes were taxed AT ALL. This was the only time in our history when we retired the national debt.

Perhaps, now that bureaucracy has ballooned to what I would call grotesque proportions, government needs more money to run efficiently. Unfortunately, this is something of a self-defeating problem. Our bureaucracy will probably never run efficiently again, in fact, it's only getting worse and worse.

Bottom line, taxes should be used purely as revenue for government functions. The credit line into the federal budget, if you will. However, many proponents of graduated income tax tend to want to use it to decrease the gap between the "haves" and "have nots". I think it's unacceptable for a government to use taxation as a tool of social change. That's the problem with the current system, as I see it.

 

[Sephiroth Crescent]

Some of you guys are missing the point, This thread was made by my brother so we can discuss that U.S income tax is an unfair system because the rich DO NOT pay taxes. When I say rich I'm referring to the very rich, not those who make $200,000 which is if you earn this amount your considered rich I think...

Now..Placebo, or should I say Magic Dirt, Communism doesn't work any way you look at it, why? Because whether you work or not you get free stuff. Heres an example(read the example before replying)

Lets take Cuba for instance. A majority of the people there go hungry, they're given bread and coffee every month, and sometimes not even. So has alot of food? Farmers! Once its la siembra(harvest season) someone comes and demands some of his stuff so it can be "re-distributed" to everyone. That hardly seems fair, basically those who dont work get things, this creates a problem because then this creates less of an incentive for people to work, and creates this problem. Not everyone should be equally miserable, because after all a Yugo =/= Cadillac.

Now, I don't think flat tax is the best idea either, but its definately better than this income system we have now, because its corrupt. Mr Magic Dirt I fail to see how flat tax doesnt work. If everyone pays 20%, and those who earn $50,000 are exempted then plenty of money will be gathered, why? Because theres those who don't pay taxes ex: Ted Kennedy and Al Gore pay less in
taxes then my dad whos a doctor, imagine how much would be collected if they actually paid.


Contra this is a response to your idea:

Currently the government is having an issue because they're not collecting enough, as such some people feel the need that since there isn't enough we must raise taxes, this just puts more stress on the middle-class working man/woman. As such revenue goes down, and bussiness's have to fire employees. The rich are spending less, and this seems to worry some of those bureucrats in congress. What we really need to do, is get the really rich to spend more, because after all you need to spend $ to make $ .

Anyway, back on topic ppl!

- Kuja

 

[Ness]

I agree. One of the myriad problem with the current tax system is its sheer number of loopholes. Ironic that they created a system meant to receive more money from the rich, but they built a gigantic tax code which allows the rich to slip out?

The bloated tax code has spawned an entire industry (tax law) of people who do nothing but manage the rich's money with the reduction of taxes in mind. I suppose greed is a powerful force, and it only gets stronger the more that you get.

I don't particularly mind the idea of taxation of income, but it should be equal across the board IF we elect to keep a flat tax. At the very core of the problem, the tax code needs revising. As far as I'm concerned, every loophole should be thrown out. If you make money, you pay a percentage of that income (whatever percentage is another topic), and that's it. Game over, no excuses.

 

[Donald Trump]

Now..Placebo, or should I say Magic Dirt, Communism doesn't work any way you look at it, why? Because whether you work or not you get free stuff. Heres an example(read the example before replying)

Lets take Cuba for instance. A majority of the people there go hungry, they're given bread and coffee every month, and sometimes not even. So has alot of food? Farmers! Once its la siembra(harvest season) someone comes and demands some of his stuff so it can be "re-distributed" to everyone. That hardly seems fair, basically those who dont work get things, this creates a problem because then this creates less of an incentive for people to work, and creates this problem. Not everyone should be equally miserable, because after all a Yugo =/= Cadillac.

ololol Cuba.
I'd much rather be a Cuban under Castro then Batista.
Cuba was little more than an American state, Castro freed them. The people who didn't like Castro were the people that participated in the Bay of Pigs. Rich idiots who got rich by exploiting the workers.
So far, in reality, Communism hasn't worked. But I'll apply that realism to a flat tax.
No politician in America is going to allow people earning under $50,000 pa exemption from income tax.

Now, I don't think flat tax is the best idea either, but its definately better than this income system we have now, because its corrupt. Mr Magic Dirt I fail to see how flat tax doesnt work. If everyone pays 20%, and those who earn $50,000 are exempted then plenty of money will be gathered, why? Because theres those who don't pay taxes ex: Ted Kennedy and Al Gore pay less in
taxes then my dad whos a doctor, imagine how much would be collected if they actually paid

That's a problem with the US tax system, not with a progressive tax. Congress IMO is plutocratic, and they like their wealth. Now obviously Ted and Al shouldn't being pay less than your father, but neither should they be paying the same. It's quite frankly insane to tax billionaires at the same rate doctors or any other profession.

Currently the government is having an issue because they're not collecting enough, as such some people feel the need that since there isn't enough we must raise taxes, this just puts more stress on the middle-class working man/woman. As such revenue goes down, and bussiness's have to fire employees. The rich are spending less, and this seems to worry some of those bureucrats in congress. What we really need to do, is get the really rich to spend more, because after all you need to spend $ to make $ .

When people start spending less it should worry Congress. That is a sign of recession, in the US they measure it in terms of goods produced, but it means the same. What you are describing is a recession. They are perfectly natural things, especially with America's very close to free market economy. It's more the fault of the credit crunch then tax. If your business can't survive with paying taxes, it isn't being competitive and therefore should close.

In the U.S. Constitution, Congress is given the ability to post taxes however it sees fit. There is no provision forcing them to tax our incomes. The first income tax wasn't even set up until the Civil War. Before that, the rule of thumb was the "head tax", which you paid simply because you were a citizen. Poll taxes were also enacted, where you paid to vote (back then, voting was considered a public service to almost everyone). The country's economy did just fine then, before incomes were taxed AT ALL. This was the only time in our history when we retired the national debt.

Ahh poll taxes, that'll keep them uppity negroes down. Rich plantation owners pay for the poor white folk, and them negroes can't vote. Clearly politicians pre civil war weren't the best economists, and their outdated ideas of taxation are moronic. Even in the 1930s politicians had no idea about economics. Hawley-smoot tariff ftw amirite?
The economy did fine then? THEY USED SLAVES.

Is there proof that a flat tax rate would widen this gap? Furthermore, even if there is such proof, is it the government's role to close this gap?
It's an unpleasant truth, but society will always be composed of "haves" and "have nots". No amount of government correction will ever change that. A country's economy would collapse before it could achieve this goal (Soviet Union!).

No, however saying that there is no proof is ridiculous. Economics differs from science, in that economists can't experiment with an economy to get answers. It's like asking for proof that the meaning of life is 42.
However I don't see how anyone can fail to recognise that taxing everyone the same would widen the gap between the rich and the poor. Unless everyone were paid the same, Soviet Union!
You're missing the point, it is make everyone equally wealthy, but to make the wealth gap decrease.

I agree. One of the myriad problem with the current tax system is its sheer number of loopholes. Ironic that they created a system meant to receive more money from the rich, but they built a gigantic tax code which allows the rich to slip out?

And that is the fault of a progressive tax, how exactly?
They aren't.
It's like making a bike with square wheelsand instead of just changing the shape of the wheels. You're getting rid of the whole design.