NYC Wall Street Protests

[MrIndigo]

Quite frankly, I believe that America should run on a flat percent tax for everyone, no exceptions. We wouldn't need tax lawyers because we could actually understand the laws (and then they could end up doing practical work), and the tax money the government takes in would be slightly higher. Congress would never go for it, but I can dream.

Flat tax rates don't serve vertical equity efficiently, and empirical evidence shows that people prefer progressive rather than regressive rates anyway.

Flat tax rates don't increase the amount of revenue the Government takes in either; in fact, every tax+welfare system is equivalent to a particular lump sum universal transfer (i.e. a benefit payment given to everybody) and a particular structure of marginal tax rates, that is there are an infinite number of ways that you can structure the tax system without changing revenue taken in.

 

[Mr. Hadwick]

This is still happening, and I will keep posting about it

Observations of an arrested journalist

Blue collar police refuse to work in solidarity of the cause, also celebrities support protests ?_?

 

[Firestorm]

Quite frankly, I believe that America should run on a flat percent tax for everyone, no exceptions. We wouldn't need tax lawyers because we could actually understand the laws (and then they could end up doing practical work), and the tax money the government takes in would be slightly higher. Congress would never go for it, but I can dream.

$5000 from a family that makes $20,000 hurts a lot more than $500,000 from a family that makes $2,000,000.

 

[capefeather]

How much of the tax revenue comes from the lower 99%, anyway?

 

[His Eminence Lord Poppington II]

progressive tax da best

 

[NC]

$5000 from a family that makes $20,000 hurts a lot more than $500,000 from a family that makes $2,000,000.

There are a lot of good arguments for and against a flat tax (or really, what should drive tax amounts), but I really do not like this one. First, how are you in any position to know this? Do you have experience making these separate amounts of money [edit: This applies more to middle class vs. rich than poor vs. rich in terms of "hurtfulness"]? Secondly, taxes shouldn't be about how much they "hurt" the payer. Someone who makes 2 million but spends it very irresponsibly would be hurt more by paying $500,000 than someone who manages their money well. Should the irresponsible person pay less?

Personally, I think the current system is garbage because of all the complications. I would prefer a flat tax, with people making under some amount $x being exempted from the tax, eliminating the problem the Firestorm was referring to (even though I didn't like the argument). A model I think would work well would be the negative income tax, where people making nothing or less than some specified amount are subsidized up to a "minimum standard of living." Due to this subsidy, welfare is cut severely for only special cases. This would promote fairness while also eliminating the problem of welfare paying more than a job would, discouraging job searches or advancements from minimum wage jobs.


@capefeather: For some reason, I can only find biased sources on this, but I believe it is usually around 60-65%, depending on the year, for the "bottom 99%."

 

[His Eminence Lord Poppington II]

flat rate taxes affect those with lower incomes because they have to spend a larger proportion of theirs on necessities iirc

 

[NC]

Yeah, that would be the purpose of the exemption/subsidy for people making under a certain amount, for the necessities.

 

[His Eminence Lord Poppington II]

i was just responding to
"There are a lot of good arguments for and against a flat tax (or really, what should drive tax amounts), but I really do not like this one. First, how are you in any position to know this? Do you have experience making these separate amounts of money?"

but yes, i see your point

 

[MrIndigo]

There are a lot of good arguments for and against a flat tax (or really, what should drive tax amounts), but I really do not like this one. First, how are you in any position to know this? Do you have experience making these separate amounts of money [edit: This applies more to middle class vs. rich than poor vs. rich in terms of "hurtfulness"]? Secondly, taxes shouldn't be about how much they "hurt" the payer. Someone who makes 2 million but spends it very irresponsibly would be hurt more by paying $500,000 than someone who manages their money well. Should the irresponsible person pay less?

It's called diminishing marginal utility and it underlies almost everything in modern economics. It's empirically detectable and is related to risk aversion.

And in fact, efficiency dictates that the tax system DOES take into account "hurtfulness" in the sense of how much the person has available to give; if the government requires a certain amount of revenue, the optimal distribution without distorting work/consumption incentive structures taxes the wealthy at a higher rate than the poor.

The irresponsibility of spending doesn't factor into it because it's based around taxing the resources available.

 

[capefeather]

Personally, I think the current system is garbage because of all the complications. I would prefer a flat tax, with people making under some amount $x being exempted from the tax, eliminating the problem the Firestorm was referring to (even though I didn't like the argument). A model I think would work well would be the negative income tax, where people making nothing or less than some specified amount are subsidized up to a "minimum standard of living." Due to this subsidy, welfare is cut severely for only special cases. This would promote fairness while also eliminating the problem of welfare paying more than a job would, discouraging job searches or advancements from minimum wage jobs.

Actually, I was alluding to something like that, lol. I wouldn't suggest bottom 99% like my post could be interpreted to suggest, because lol that would be too high...

 

[mattj]

I thought this was some kind of conspiracy where the media wasn't covering this story?

 

[NC]

And in fact, efficiency dictates that the tax system DOES take into account "hurtfulness" in the sense of how much the person has available to give; if the government requires a certain amount of revenue, the optimal distribution without distorting work/consumption incentive structures taxes the wealthy at a higher rate than the poor.

The irresponsibility of spending doesn't factor into it because it's based around taxing the resources available.

Wouldn't what you are saying only apply if we had a "wealth" tax, rather than an income tax? Income is not the greatest measure of resources available and I feel like if the goal of progressive income tax rates was based around "hurtfulness," it would not be accomplishing whatever the goal is very efficiently.

 

[MrIndigo]

Wouldn't what you are saying only apply if we had a "wealth" tax, rather than an income tax? Income is not the greatest measure of resources available and I feel like if the goal of progressive income tax rates was based around "hurtfulness," it would not be accomplishing whatever the goal is very efficiently.

That's why we have both - to reflect wealth you tax income and tax capital/savings. The reason for this is because it's very difficult to accurately measure how much 'wealth' someone has. Instead, we tax their income (comparitively easy to measure, especially when we make the people paying it to them account for it, e.g. PAYG for salary), and we tax their capital upon sale of the relevant property.

 

[Every1XplodeNOW]

If you want find more on why these people are so mad and how it all came to this, I suggest watching the documentary called Inside Job. That opened up my eyes to see how messed up this really is.

I actually didn't know about this until I saw this thread(though I only really have one source of news and they think nancy grace's nip slip was headline news >_>). Though this protest wasn't planned well, I'm glad to see some action taking place.

 

[Myzozoa]

There are a lot of good arguments for and against a flat tax (or really, what should drive tax amounts), but I really do not like this one. First, how are you in any position to know this? Do you have experience making these separate amounts of money [edit: This applies more to middle class vs. rich than poor vs. rich in terms of "hurtfulness"]? Secondly, taxes shouldn't be about how much they "hurt" the payer. Someone who makes 2 million but spends it very irresponsibly would be hurt more by paying $500,000 than someone who manages their money well. Should the irresponsible person pay less?

Ok first of all i understand how hard it is to be an upper class white male so im going to try to break this gently.


let me explain for you so that maybe you can learn to empathize with poor people (hint they arent all lazy).

Family A: 2 working parents, 2 children income of $50,000 a year

Family B: 2 working parents, 2 children $100,000

So lets say that we have a flat tax rate of 20% (for the purposes of me explaining this, dont shit yourself if you think 20% is ridiculous).

After taxes:

Family A: 40,000

Family B: 80,000

So next basic thing is housing/utilities and since housing is probably tax deductable we'll ignore it and just do utilities which are about $200 (more like $250 but whatever) per month in a standard living space for 4 people.

After Housing/utilities

Family A: 40000-(200x12)=37600

Family B: 80,000-2400=77600

Food Expenses (conservative estimates) i would guess it comes out to around 8k for a family of four, being as conservative as possible (i think when i did the math one time it was close to 750 per month).

Family A: 29,600

Family B: 69,600

Already we begin to see a huge disparity problem, but lets now add in health care costs. http://www.usatoday.com/money/industries/health/2009-09-15-insurance-costs_N.htm

Family A: 29,600-10,000=19,600

Family B: 69,600-10,000=59,600

Now the disparity is really obvious, and suffice to say that transportation and services (cell phones, internet, other things i didnt include in utilities) come out to a about another 10-12k, not to mention incidentals such as dental coverage, computer stuff, things breaking, life happening, hell clothing for 4 people in of itself is probably $500 because most people are too dumb to shop at thrift stores. And what about retirement for family A, what about vacations, what about books for their children, going to the movies, entertainment, saving for college, lessons for sports, babysitters to look after children when they get home from school and the parents work for another 2 hours?

I hope we dont get toooo caught up in my numbers, they arent perfect, but they do serve as a healthy model of why exactly a flat tax is injust. One could easily say that family A should just find a cheaper price for x, or simply go without y, but that in of itself is a testament to why the flat tax model is unfair. Now its easy to extrapolate that by asserting these things I am advocating a policy of 'take away all assets' or that i am asserting that the family that makes $100,000 and the family that makes $50,000 dollars should have equal access to equal quality services, which is not necessarily my conclusion. What I am attempting to get at is that a flat tax rate unfairly cuts into the standard of living of certain income groups in a way that is both unnecessary and unjust, when a progressive model would allow lower income groups to still maintain a standard of living and quality of life (with all the benefits of providing a college education or of saving for retirement) comparable to that of higher income groups.


Now, I bet you are thinking: 'myzozoa, youre dumb, we have financial aide and insurance vouchers and whole slews of other programs designed to help poorer families make ends meet, etc' Don't you see that its exactly this type of progressive idealism that is what brought about these programs in the first place? Its impractical and illogical to argue for progressivism in social programs (or ignore the benefits and practicality of such programs) and then turn around and say btw we are going to have a regressive taxation system. I know it seems like im anticipating this argument really hard, and i am and im just cutting it off so that no one except me looks foolish.


someones going to refute in all my shit in a really smart way. good luck have fun

 

[capefeather]

mattj can you not twist people's words please? The condescending attitude doesn't help the fact that a lot of those are laughably recent...

Myzozoa, what I think people are getting at with the flat tax is that at least it's fairer than what we have now, where Warren Buffet is paying proportionally less than his secretary. I mean, I agree, when only fairness is concerned, it's not that great, but when it comes to systems that the U.S. government might actually vote in, it probably stands a better chance than something like negative income tax...

(Sorry if this looks like minimodding because I'm really starting to get annoyed by this...)

 

[az]

I thought this was some kind of conspiracy where the media wasn't covering this story?

stop behaving like a moron, final warning

 

[billymills]

There are (more than) 2 things at play in how taxes are calculated, there's a rate but there's also deductions, money from other sources, etc. The tax rate itself is not the reason Buffet pays less than his secretary, it's all that a large portion of his income isn't taxed, he has deductions he can include, etc.

Changing to a flat tax would only help the richer people, and make it more difficult for those in the poorer... 60-80% (depending on the specific number chosen). Adding higher brackets (a different tax rate for income over 1million, 10 million, etc.) and actually taxing income from other sources are solutions we need to look into.

Also just wondering if anyone knows: why isn't the tax rate an exponential function or logistic function? Why do we have different 'brackets' rather than a smooth rate?

 

[cookie]

a white man can't even get a job these days. it's political correctness gone mad

 

[Atticus]

this has been an interesting thread to read and i'm surprised i haven't heard of this up until now. also, i just wanted to say that i cringe whenever mattj posts.

 

[capefeather]

Also just wondering if anyone knows: why isn't the tax rate an exponential function or logistic function? Why do we have different 'brackets' rather than a smooth rate?

My suspicion is that the tax code hasn't accounted for the existence of fast computers...

 

[cookie]

or that it would create a needless shitstorm among the mathematically illiterate masses

 

[NC]

Ok first of all i understand how hard it is to be an upper class white male so im going to try to break this gently.


let me explain for you so that maybe you can learn to empathize with poor people (hint they arent all lazy).

Could you link me to any post I made where I:
- Mentioned my race or wealthiness
- Bitched about how hard my life is
- Said poor people are lazy
- Anything even resembling any of the above?

[numbers/costs stuff]


I hope we dont get toooo caught up in my numbers, they arent perfect, but they do serve as a healthy model of why exactly a flat tax is injust. One could easily say that family A should just find a cheaper price for x, or simply go without y, but that in of itself is a testament to why the flat tax model is unfair. Now its easy to extrapolate that by asserting these things I am advocating a policy of 'take away all assets' or that i am asserting that the family that makes $100,000 and the family that makes $50,000 dollars should have equal access to equal quality services, which is not necessarily my conclusion. What I am attempting to get at is that a flat tax rate unfairly cuts into the standard of living of certain income groups in a way that is both unnecessary and unjust, when a progressive model would allow lower income groups to still maintain a standard of living and quality of life (with all the benefits of providing a college education or of saving for retirement) comparable to that of higher income groups.

What you are saying in the first bolded part seems to be heavily implying what you say in the second bolded pat (despite your denial), so where exactly are you saying we should draw the line? I made it clear that I would support a flat tax only if (to use your model) Family A is able to stay above 0 when paying for necessities and as long as they are able to make ends meet. As long as this is the case, what is the issue with family B having more to use on luxuries? Family A's jealousy? I don't want to put words in your mouth here, but significantly reducing or removing the benefit of family B higher paying job, which you seem like you want to do, would cause an extreme problem with incentives that would lead to a large dropoff in overall productivity, making everybody - rich or poor, much worse off.

Again, I would like to emphasize that I have no desire to leave the poorer people/families "out to dry" and I fully support them being provided with necessities. Once we get beyond necessities though, I think that the costs of heavily reducing the pay/benefits of more lucrative (and likely productive) jobs would be much greater than the benefits.

last part

By definition, a flat tax is not progressive or regressive. You could technically even call it progressive if there is an exemption below a certain income level.

 

[Myzozoa]

"Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the marginal tax rate. In terms of individual income and wealth, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich — there is an inverse relationship between the tax rate and the taxpayer's ability to pay as measured by assets, consumption, or income.

From wikipedia.

What I'm getting at: a flat tax (as a regressive tax) imposes a greater burden relative to resources on lower income groups.