[Cartertonian]

Forgive me for getting tetchy, but I asked what I thought was a relatively straight-forward question on page one and, having read through all four of these pages, no-one has even come close to seriously addressing it.

I'll give you the short, short version:

Assuming a flat rate of tax - if I earn ten times more than you, I pay ten times more tax than you. How is that wrong?

I'm not interested in aiding any nest-feathering for the super-rich. I'm just being dispassionate and objective. If tax is (as it is pretty much everywhere) a percentage of your income, then the more you earn the more tax you pay. To try and get high earners to pay yet more tax on top, as some sort of pennance for earning lots of money, seems absurd, or at least motivated by 'the politics of envy' - which is the same thing.



.

[Korimyr the Rat]

Anyone that supports this bullshit is a traitor to freedom, and all that is good and pure.

Thank you for sparing me the effort of attempting to have a reasonable conversation with you. Good day, sir.

Assuming a flat rate of tax - if I earn ten times more than you, I pay ten times more tax than you. How is that wrong?

I'm not interested in aiding any nest-feathering for the super-rich. I'm just being dispassionate and objective. If tax is (as it is pretty much everywhere) a percentage of your income, then the more you earn the more tax you pay.

It is an issue of diminishing returns. With a flat tax of, say, 25% a person who makes $20,000 per year will pay $5,000 in taxes and a person who makes $200,000 per year will pay $50,000. The difference is, $5,000 is a much greater burden for a person attempting to live on $15,000 than $50,000 is for a person living on $150,000.

Worth remembering also that in the progressive income tax, you don't pay a single tax rate on all your earnings based upon your income-- you pay a percentage of the income for each tax bracket. Thus, noone pays taxes on their first $10,000 in annual earnings, 10% on their next bracket, and so forth. Thus noone is being "punished" for earning "too much money".

[Cartertonian]

Lots of stuff I didn't understand...

Thank you, at least, for directly addressing my question. It's just unfortunate that I couldn't follow your kind response.

I think you were suggesting that all the financial gobbledegookery being talked about in this thread relates to finding a way of making the tax a rich person pays feel to that person as much of a burden as it does to a poor person. I think

In which case, it still sounds like 'the politics of envy' to me.

Sorry. In matters economic, I freely confess to being a complete fuckwit

[Holding]

Why should each person be given the same burden when neither nature nor the market came to the conclusion that they should?

[filerba]

Yes, the tax the rich person pays is intended to feel like as much of a burden as the poor person's tax. This is not an envious desire to make some people feel more burdened, but an attempt to minimize to total burden felt by the citizenry. The money has to come from somewhere, and if the rate is flat, the poor must pay more.

Obviously there is a correct incline of progressivity to achieve this. We can all still debate whether the tax rates are too steep (right-wing theory) or not steep enough (left-wing theory).

[Rancid]

The money has to come from somewhere, and if the rate is flat, the poor must pay more.

how do the poor pay more?

If you have a flat rate of say 10%.

A poor person making 20,000 a year will pay 2000
a rich person making 1000000 will pay 100000.

How exactly did the poor person pay more?

[filerba]

Because the government could have collected the same amount of money from those two citizens by charging the poor person 0% and the rich person 10.2%

[Rancid]

unfortunately the trend is that everyone gets taxed more and more

[Cheesecake_Marmalade]

The constitution says we should tax everyone equally, and for a good reason.

You like Thomas Jefferson, right?

... legislators cannot invent too many devices for subdividing property... Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise. Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.

[liberty]

So, I change my mind about flat tax but, a 70% tax bracket is outrageous.

My tax laws would look something like this.

Poor : 0%

Middle Class : 2%

Rich : 5%

Then again, I wouldn't have 'inflation tax', charge people to drive, sales tax and etc.

Maybe I would only have a minimal import tax.

[Cheesecake_Marmalade]

You don't think it's useful to tax consumption in order to promote savings?

[liberty]

That's what interest rates are for and they should be set by the free market.

If I were to tax sales, I would make it the only tax people would have to pay.

[Korimyr the Rat]

No, because first, consumption taxes are regressive and second, discouraging consumption destroys jobs.

[Rancid]

discouraging consumption destroys useless jobs.

fixed

promoting artificial spending will have the same effect. It will also prolong how long people are unemployed once they do get fired.

[liberty]

If I were to tax sales, I would make it the only tax people would have to pay.

Please don't get me wrong. My sales tax would only be 3 %. Not enough to discourage spending. Besides, the more money you let your people keep, the better off the economy will be.

[Dr House]

discouraging consumption destroys jobs.

No, discouraging consumption destroys distribution jobs, which is quite different. Discouraging consumption is essential to promoting savings, which is how the nation's pool of capital is formed. Otherwise we'll just consume more than we produce and just start sourcing our consumption to China, which is what's happening now.

[Rancid]

don't bother house.

He can't reasonably justify higher taxes. It's all based on feelings. It's about how you feel.

[Korimyr the Rat]

He can't reasonably justify higher taxes. It's all based on feelings. It's about how you feel.

I have already done so in a fashion that does not involve my feelings in the slightest. Disagreeing with me neither invalidates my argument nor negates the fact that I have made it, and you have made no effort to "reasonably justify" your position, except to cry and stamp your foot about how taxes are "unfair" and accuse everyone who disagrees with you of being a "traitor" and "hating freedom".

Either start talking like a grownup or go play in traffic while the grownups are talking.

No, discouraging consumption destroys distribution jobs, which is quite different. Discouraging consumption is essential to promoting savings, which is how the nation's pool of capital is formed. Otherwise we'll just consume more than we produce and just start sourcing our consumption to China, which is what's happening now.

Your point concerning savings is taken, but unless there is already a robust export market, discouraging spending also destroys production jobs. As long as labor is cheaper in other countries and imported products are cheaper than domestic products, consumption taxes are not going to prevent the outsourcing of production jobs to those other countries.

Besides, consumption taxes can't promote savings among the people who are already spending the bulk of their income on necessities. In order to encourage them to save-- and alleviate the impoverishing effects of sales taxes-- we would either have to offer them tax rebates or exempt products such as groceries and fuel from taxation, which I am certain would quickly be met with cries that such measures are unfair and irrationally biased against the rich.

[Rancid]

I have already done so in a fashion that does not involve my feelings in the slightest. Disagreeing with me neither invalidates my argument nor negates the fact that I have made it, and you have made no effort to "reasonably justify" your position, except to cry and stamp your foot about how taxes are "unfair" and accuse everyone who disagrees with you of being a "traitor" and "hating freedom".

Either start talking like a grownup or go play in traffic while the grownups are talking.

so, what's an appropriate tax rate, and why?

i am grown up, and you are a traitor to freedom.

[Dr House]

Your point concerning savings is taken, but unless there is already a robust export market, discouraging spending also destroys production jobs. As long as labor is cheaper in other countries and imported products are cheaper than domestic products, consumption taxes are not going to prevent the outsourcing of production jobs to those other countries.

Why does everybody assume that labor is the only cost variable to production? Logistics, research & development, capital plant and equipment, and productivity of labor are all production costs at least as important to manufacturing as the cost of labor. For heavy and high-tech industries, which is what this country mostly specializes in (as well as any industrialized nation should), labor is only 30% of manufacturing costs. It's not difficult at all to remain competitive against poor countries by having a more skilled labor force, a higher-quality stock of capital plant and machinery, and a better-maintained and more dense infrastructure network.

And there are six billion people in the World. As long as our production cosats remain competitive there will always be a robust export market. Granted, some demand stabilization is necessary when the export market dries up, but in a country like ours that specializes in capital goods production, it isn't stabilizing consumer demand that's necessary: It's stabilizing producer demand. The way to do that is to ramp up investment in non-tradeables, such as infrastructure and construction. Accelerating infrastructure projects are what kept China growing at a fast clip during the East Asian financial crisis.