tax

[Anonymous]

Is there any reason we do not have a flat tax other than it would hurt the rich? Seems very fair to me. Buy a Hummer, pay the tax, buy a Honda, pay the tax. Honda tax will be less, those making less money will spend less and therefore pay less taxes. Those that make the big $ buy more and more expensive items pay more tax. It seems so simple.

[jsteele]

It appears that you are confusing sales taxes and income taxes. In regard to income taxes, a flat tax tax while strictly not regressive, tends to be de facto regressive in application. If you assume a minimum income is required to pay for basic needs, any tax on that portion of income will make it impossible for the earner to meet basic needs. To avoid that, flat tax proposals tend to be applied only after a certain salary level so that the first "x" dollars are not taxed.

Personally, I think a properly-designed flat tax is worth considering. I supported Jerry Brown when he ran for President with such a proposal. However, it would probably be a huge hit to the accountant industry.

Also, keep in mind that the tax code, while exploited for loopholes by corporations and the wealthy, is also used to further social policy. Donations to charities are tax-deductible which helps them raise funds, mortgage interest deductions further home ownership, etc. All of that would disappear.

[Anonymous]

"Also, keep in mind that the tax code, while exploited for loopholes by corporations and the wealthy, is also used to further social policy. Donations to charities are tax-deductible which helps them raise funds, mortgage interest deductions further home ownership, etc. All of that would disappear."

Personally, I'd prefer much if not all of this to disappear. The tax code is not intended to promote social policy. Or, I should say, it should not be used in such way. It is simply government subsidizing of behaviors it deems good. And the government has a bad track record of deciding what is good and of properly incentivizing such behaviors.

[Anonymous]

Anonymous wrote:Is there any reason we do not have a flat tax other than it would hurt the rich? Seems very fair to me. Buy a Hummer, pay the tax, buy a Honda, pay the tax. Honda tax will be less, those making less money will spend less and therefore pay less taxes. Those that make the big $ buy more and more expensive items pay more tax. It seems so simple.

But it's not. The people who make huge $ don't spend all of those $. Everything they save and invest is tax free. In order to pay for that, the flat tax rate has to go up. Who takes it on the chin? The people who cannot save because they put all of their money into necessities. They will pay the highest effective rate.

[Anonymous]

Anonymous wrote:"Also, keep in mind that the tax code, while exploited for loopholes by corporations and the wealthy, is also used to further social policy. Donations to charities are tax-deductible which helps them raise funds, mortgage interest deductions further home ownership, etc. All of that would disappear."

Personally, I'd prefer much if not all of this to disappear. The tax code is not intended to promote social policy. Or, I should say, it should not be used in such way. It is simply government subsidizing of behaviors it deems good. And the government has a bad track record of deciding what is good and of properly incentivizing such behaviors.

Funding public schools is promoting social policy. You're opposed to public education? During the era of immigration in the late 1800s and early 1900s, public education was promoted as a way of assimilating millions of Eastern Europeans into our culture and language. You're opposed to assimilation? Don't you think we should have a common culture and common educational standards?

[Anonymous]

Anonymous wrote:

Anonymous wrote:"Also, keep in mind that the tax code, while exploited for loopholes by corporations and the wealthy, is also used to further social policy. Donations to charities are tax-deductible which helps them raise funds, mortgage interest deductions further home ownership, etc. All of that would disappear."

Personally, I'd prefer much if not all of this to disappear. The tax code is not intended to promote social policy. Or, I should say, it should not be used in such way. It is simply government subsidizing of behaviors it deems good. And the government has a bad track record of deciding what is good and of properly incentivizing such behaviors.

Funding public schools is promoting social policy. You're opposed to public education? During the era of immigration in the late 1800s and early 1900s, public education was promoted as a way of assimilating millions of Eastern Europeans into our culture and language. You're opposed to assimilation? Don't you think we should have a common culture and common educational standards?

Strawman much? First off, I was speaking about the use of the tax code to promote social policy. Tax credits for education and child care expenses actually promotes private education. Secondly, the government provides a public education, but does not promote it financially through the tax code.

[Anonymous]

Anonymous wrote:Personally, I'd prefer much if not all of this to disappear. The tax code is not intended to promote social policy. Or, I should say, it should not be used in such way. It is simply government subsidizing of behaviors it deems good. And the government has a bad track record of deciding what is good and of properly incentivizing such behaviors.

I may agree with your general proposal, but what's your evidence of the government's bad record in deciding what's good - i.e., their worse record than the private sector.?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there any reason we do not have a flat tax other than it would hurt the rich? Seems very fair to me. Buy a Hummer, pay the tax, buy a Honda, pay the tax. Honda tax will be less, those making less money will spend less and therefore pay less taxes. Those that make the big $ buy more and more expensive items pay more tax. It seems so simple.

But it's not. The people who make huge $ don't spend all of those $. Everything they save and invest is tax free. In order to pay for that, the flat tax rate has to go up. Who takes it on the chin? The people who cannot save because they put all of their money into necessities. They will pay the highest effective rate.

Actually, I think a sales tax is usually expected to be progressive - maybe because it's assumed that groceries aren't included? You'd have to have a real cap gains tax, too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Personally, I'd prefer much if not all of this to disappear. The tax code is not intended to promote social policy. Or, I should say, it should not be used in such way. It is simply government subsidizing of behaviors it deems good. And the government has a bad track record of deciding what is good and of properly incentivizing such behaviors.

I may agree with your general proposal, but what's your evidence of the government's bad record in deciding what's good - i.e., their worse record than the private sector.?

I think, generally speaking, people should be free to decide what is best for them. If they fail, ideally the bear the brunt of their decision.

As for evidence of the government's record, how about the recent data that much of the government's nutrition information has contributed to childhood obesity issues? How about the government promotion of home ownership? By not taxing healthy insurance benefits as income, the government has promoted the coupling of benefits with employment and thus severely damaged the market for insurance for those who do not receive it through their work. Shall I go on?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there any reason we do not have a flat tax other than it would hurt the rich? Seems very fair to me. Buy a Hummer, pay the tax, buy a Honda, pay the tax. Honda tax will be less, those making less money will spend less and therefore pay less taxes. Those that make the big $ buy more and more expensive items pay more tax. It seems so simple.

But it's not. The people who make huge $ don't spend all of those $. Everything they save and invest is tax free. In order to pay for that, the flat tax rate has to go up. Who takes it on the chin? The people who cannot save because they put all of their money into necessities. They will pay the highest effective rate.

Actually, I think a sales tax is usually expected to be progressive - maybe because it's assumed that groceries aren't included? You'd have to have a real cap gains tax, too.

Because poorer people, generally, spend a higher proportion of their income. If I make $50,000 a year (pre-tax) and have a family of four, I may spend 80% of my income ($40K a year). If there is a flat consumption tax of 10%, I'm paying $4K in taxes or 8% of my income. If someone else makes $10M a year, they'd probably be hard pressed to spend even $5M of that. Tax them that same 10% and they are paying $500K in taxes. They are paying only 5% of their income in taxes. Yes, their total tax bill is more, but their tax bracket would effectively be lower. You'd need to create some sort of threshold below which consumption is not taxed and/or declare certain goods untaxed, which again leads to problems with who decides what should and should not be taxed.

[Anonymous]

Anonymous wrote:As for evidence of the government's record, how about the recent data that much of the government's nutrition information has contributed to childhood obesity issues? How about the government promotion of home ownership? By not taxing healthy insurance benefits as income, the government has promoted the coupling of benefits with employment and thus severely damaged the market for insurance for those who do not receive it through their work. Shall I go on?

Going on won't help. A handful of examples doesn't make the case that the government is generally bad at it.

Since bad is relative, I have to assume that you mean that it's bad at it as compared to the private sector. You need to show that. You happened to have picked areas in which the private sector does a particularly bad job. The private sector is obviously atrocious at nutrition (would you like some Chinese lead with that?). Real estate development is another area where the free market is particularly clumsy - a good reason for planning and zoning. And healthcare? Every rational and honest person acknowledges that government health insurance systems are much more efficient.

I understand your philosophical stance, but that's an entirely different issue. You said that the government is bad at deciding what's good. Historically, while our government has given us plenty of reason to be frustrated and irritated, it's made much better decisions in has the private sector in those areas in which the government has been active. That's less true in the last few decades, as private corporations have increasingly taken control of the government.

[Anonymous]

Anonymous wrote:

Anonymous wrote:As for evidence of the government's record, how about the recent data that much of the government's nutrition information has contributed to childhood obesity issues? How about the government promotion of home ownership? By not taxing healthy insurance benefits as income, the government has promoted the coupling of benefits with employment and thus severely damaged the market for insurance for those who do not receive it through their work. Shall I go on?

Going on won't help. A handful of examples doesn't make the case that the government is generally bad at it.

Since bad is relative, I have to assume that you mean that it's bad at it as compared to the private sector. You need to show that. You happened to have picked areas in which the private sector does a particularly bad job. The private sector is obviously atrocious at nutrition (would you like some Chinese lead with that?). Real estate development is another area where the free market is particularly clumsy - a good reason for planning and zoning. And healthcare? Every rational and honest person acknowledges that government health insurance systems are much more efficient.

I understand your philosophical stance, but that's an entirely different issue. You said that the government is bad at deciding what's good. Historically, while our government has given us plenty of reason to be frustrated and irritated, it's made much better decisions in has the private sector in those areas in which the government has been active. That's less true in the last few decades, as private corporations have increasingly taken control of the government.

You are setting up a false dilemma. Bad is not a relative term. Worse is. But bad isn't. Bad can just as easily be an objective measure, depending on the standard to which we aspire. I am not comparing public and private. I am evaluating the government. Which has the ability to incentivize things in a way that no private sector can. The private sector may encourage things through advertising, price setting, etc. But they can't incentivize it with tax breaks or credits the way they government can. It is an apples to oranges comparison, which is why I didn't make that comparison.

My largest issue with the government's track record is the illusion of objectiveness. When the Cornfarmers of America (or whatever group it was) puts out an ad explaining that HFCS has the same health effects of corn, I know that the messenger is not an unbiased observer. But when the government holds itself out to be unbiased and objective, contrary to the reality of the situation, a far more insidious conflict of interest arises. I know why the home lending industry encouraged home ownership. But why did/does the government? Do they genuinely believe it to be an objective good? Or were the wheels greased? Did they promote high-carb diets because the science backed it up? Or because of cushy relationships with those in the industries that would benefit from high-carb diets becoming the norm?

The private sector is not a monolith entity. The federal government is. When they give a tax break for home ownership, they are saying, "This is a social good that we are promoting. It is so good, in fact, that we will give you money to pursue it." That is an incredibly powerful endorsement. When Coke says, "Coke is great!" and Pepsi says, "Pepsi is delicious!" no consumer believes that they are looking out for the consumer's best interest... they are trying to sell soda.

Given the power and weight of the government's influence, their track record, regardless of the track record of their "competitor", is atrocious.

[Anonymous]

If you walk around with some private and unspoken standard, there's there's no point in using value judgments. "Michael Jordan was a bad basketball player." Maybe that would make some sense by some private standard of yours, but it's no use in conversation. You're just running from your statement.

Everything else you said is toward a different point, again. I happen to think it's a pretty good point. But it doesn't establish that the government can't make good decisions.

Before our government became so corrupted, it made lots of good decisions. It could do so again if we made the very simple change of prohibiting private money in campaigns. Right now, we're just where people like you (as far as I can tell) wanted us to be. As has often been observed, Republicans say that government's incompetent, and then they get into office and prove it.

Let's keep it up, and we'll go all the way back to the private sector making all the decisions about how we work, how we're educated, what we eat, the condition of the environment, who gets to vote, whether we hold slaves...

[Anonymous]

Anonymous wrote:If you walk around with some private and unspoken standard, there's there's no point in using value judgments. "Michael Jordan was a bad basketball player." Maybe that would make some sense by some private standard of yours, but it's no use in conversation. You're just running from your statement.

Everything else you said is toward a different point, again. I happen to think it's a pretty good point. But it doesn't establish that the government can't make good decisions.

Before our government became so corrupted, it made lots of good decisions. It could do so again if we made the very simple change of prohibiting private money in campaigns. Right now, we're just where people like you (as far as I can tell) wanted us to be. As has often been observed, Republicans say that government's incompetent, and then they get into office and prove it.

Let's keep it up, and we'll go all the way back to the private sector making all the decisions about how we work, how we're educated, what we eat, the condition of the environment, who gets to vote, whether we hold slaves...

People like me? Who do you think I am?

I am far from Republican, if that is your implication. I just don't think the government should be in the business of financial subsidizing "good behavior" through the tax code. Not only do I find this incompatible with what I believe the role of government and taxes to be, but even if I found this a sound function of government, I don't think the government has proven itself particularly competent at promoting the right things. I offered three huge examples of the government's failure to promote the right social goods: nutrition, home ownership, and insurance. Want more? Many "green" technologies have proven far less beneficial than was originally advertised and their impact is far outweighed by the cost in lost tax revenues. How successful was the DARE program?

Does the government get it right sometimes? Absolutely. But I think they should bat at a much higher percentage when they essentially have unlimited funds and access to the necessary information to make such decisions. Either they are incompetent, corrupt, or both. If you don't have near incontrovertible proof that something is a social good, it shouldn't be aggressively promoted or even required by the government because such is the power of their endorsements. There is obviously room for the occasional mistake. But the track record is littered with decisions that were overly haste, poorly informed, or out-and-out bought.

[Anonymous]

As Jeff indicated, if a flat tax were implemented, it could exempt the first 30,000 or 50,000 dollars. Further, if a sales tax were enacted (VAT or otherwise), it could exempt necessities like certain foods and medical basics.