Taxation, the Economy, Equality, and Fiscal Policy

What should it matter to the government how someone got their wealth, as long as they did so legally? It shouldn't matter whether a rich person got rich by paying their workers $9/hour instead of $10/hour, as long as those rate meet the legal requirements. The law has no further claim on those people's money, and should not treat them any different than anyone else. The government isn't there to pass moral judgment on how they got their money. It is only there to act in a legal capacity.

It depends on the rate.

One other thing to consider about a flat tax is that it removes many of the philosophical objections people have with welfare programs and progressive tax schemes. After all, if everyone pays 10% (number for illustration only), then it is a lot harder for anyone to claim that the poor aren't paying their share of the burden and reaping disproportionate benefits. (This would also limit the ability for politicians to buy votes by promising to tax someone else to pay for programs.)

Let's use some sample numbers from a dummy tax return. Let's say I make about $75k/year and file as single, with just a standard deduction. My taxable income would then be about $65650, and my taxes due would be about $12200. That comes to about 16.7% of my (hypothetical) income. If I am instead married filing jointly, the taxable income would drop to $56300, and the tax due would drop to $6810, or about 9.08%. These numbers would suggest that a flat tax rate (with nothing other than a standard deduction) on the order of 10-15% would not be unreasonable, and could even increase revenue.

Personally, I would be more supportive of social programs if they were paid for by a flat tax. I have a fundamental issue with charging people disproportionate taxes in order to give money or services to people paying little or not taxes. Everyone has a responsibility to contribute, even if it is only a small amount. Everyone should have access to the same services on the same terms, and everyone should have to pay taxes on the same terms. The government has no business favoring one group over another just because one group can afford to pay a higher percentage. It simply is not fair, nor is it just.

Kimball Kinnison

 

I'm an economic moron but I guess another argument in favour of a flat tax rate is that the wealthy pay more in indirect taxes, such as GST and VAT type taxes, not to mention duties on real estate etc, simply because the more they earn, the more they spend.

 

And why don't we have the falt tax going?

 

Actually most wealthy people, once they've earned a certain amount (usually in the millions), they just invest the rest of it so they can make more money. And they are only taxed 15 percent on their dividends.

KK: There are some practices which are perfectly legal as far as obtaining wealth but are IMO highly unethical. Heck, Obama even pointed out that these financial institutions that got into so much trouble by being loan sharks, weren't doing anything illegal. And this should probably be a topic for another thread but I think a minimum wage that keeps a person qualifying for food stamps and unable to pay rent is unethical. The $10 an hour figure I threw out was arbitrary, but the fact is that no one can support a family on $6 an hour. And I don't believe that a company CEO should be able to make more than 20 times what his lowest-wage worker makes. He probably bears 20 times the responsibility and maybe he even works 20 times harder, but not 200 times--the average CEO makes 200 times what the average worker does, whereas in the 50s, the average CEO made 10 times what the average worker made.

And before anyone asks "Who am I to decide what the average CEO should make?" I am an American citizen with an opinion who uses that opinion to vote, and uses that opinion to spend my money with companies that pay their employees decent wages and treat them decently. (Let's just say I don't shop at Wal-Mart.) The last time I brought this up, I got that question thrown at me but nobody could (or would) really explain why a CEO should make several hundred times more than the guy in the mailroom. Do CEOs really work 200 times as hard as the guy in the mailroom? Really???

 

Well, how else do you think small businesses get the capital to expand and grow? Someone has to be willing to risk the capital to do so, and those with the capital to risk tend to be rich.

They took the risks, therefore they are entitled to the rewards.

The problem is, you have the question 100% backwards. It is not, "Why should they make so much?" That's presuming them guilty and making them prove their innocence.

 

Bingo, even Adam Smith "The father of Capitalism" belived in progessive income tax. Is it far, no. But unfortunately 8% of the US population owe 90% of the wealth.

 

Again, though, since when is it the government's job to arbitrate what is ethical or moral? The government is supposed to define legality, not morality or ethics. As long as their actions are legal, it's no concern of the government's what they do.

You forget your basic economics, though. If you increase the minimum wage, it will speak an inflationary cycle. It will tend to increase the cost for businesses to hire (or retain) workers, which in turn will force those businesses to raise prices. That will make those business's goods and services more expensive for the people who buy them, who will in turn need higher wages to afford those services. That would lead to a need for an increase in the minimum wage to compensate, and the cycle will simply continue.

Also, it is possible to raise a family on a minimum wage. I know because I have watched people do it, without welfare and without credit card debt. Is it the most comfortable existence? No, but they were able to get by. Until I served my mission (most of the people I saw doing that were illegal immigrants in the Las Vegas area), I also thought it was impossible.

Except pay is not defined by how hard you work. Your employer doesn't care how hard you work, he only cares about how much value you bring to the company, and how hard it would be to replace you. By that criteria, many CEOs bring in easily 200x the value that their lowest wage employees bring in through their respective labors. It is also far easier to find a replacement for the mailroom than it is to find a new CEO.

Kimball Kinnison

 

Unless of course its gay marriage, abortion or the myriad of other social issues conservatives want to legislate.

 

I'm sorry, but what does any of that have to do with the arguments that I have made in this or other threads?

If you are going to complain about something that I post, then do so, but please do not ascribe positions to me that I do not hold or advocate. (My positions on both gay marriage and abortion are, and always have been, based completely in legal issues and not morality or ethics.)

Kimball Kinnison

 

My point is that we as a country legislate morality and ethics all the time. How do you distinguish between what is "legal" and what is "moral" or "ethical"? Laws have always included a moral and ethical component.

 

Gay marriage: There are people who have had issues with it being decided by courts. To be honest, looking at Roe v. Wade and its effect on American politics over the last 36 years, I can certainly see why people might have issues with it. But also, gay marriage opens a can of worms on the religious freedom front, and I fear that I will lose at least some of my religious freedom.

Abortion: Here we have two problems. The first is new scientific evidence that indicates that abortion may be killing a person. Heartbeats are now being detected 14 days after conception. Brainwaves are being picked up sometime in the first seven weeks after conception. Under medical standards, the absence of a heartbeat and brainwave activity usually means death. The presence of those, therefore, must indicate life.

The second problem is that thanks to Roe v. Wade, we cannot change the law to reflect the new evidence. Now, we have people feeling that a gross injustice is going on. I hope that Megan McArdle is dead wrong about where that is headed. That said, given what I have seen from liberal posters here on multiple issues, I have little confidence that we can avert new waves of political violence from both sides.

I increasingly despair of the possibility that any compromise can be reached on gay marriage and abortion. NO MATTER HOW THESE TWO ISSUES ARE RESOLVED, someone will win and feel the need to maintain that win at any cost, and the losers will feel as if someone has become a second-class citizen.

 

anakin girl
Actually most wealthy people, once they've earned a certain amount (usually in the millions), they just invest the rest of it so they can make more money.

Yes but those investments can lead to job creation and other economic benefits. Ans sometimes that's better than just going out and blowing your wad of cash on your 5th widescreen.

 

Absolutely. This is why the best way to help out the poor would be to keep inflation low, while enabling very slow wage adjustments so that the minimum wage would increase in real (adjusted for inflation) terms.

The more ideal scenario would be to eliminate the minimum wage altogther, while the government strives to keep inflation very low.

 

The Tax Foundation has studied how many states would have a top combined tax rate of over 50% if the new health care bill passes:
http://taxfoundation.org/publications/show/24863.html

Would anyone be willing to work for less than 50 cents on the dollar? ANYONE????

 

Would anyone be willing to work for less than 50 cents on the dollar? ANYONE????


Hi there. *raises hand*

If it meant basically free health care, great social services and excellent public transportation, I'd take that in an instant.

 

You are aware that countries like Sweden have had tax rates like this a while, yes? And people continue to work there?

 

I think the awareness some folks have of the world outside the United States is rather limited.

 

I'm in the top tax bracket these days which means I pay a fraction under 50 cents in the dollar in tax. I also have to pay for private healthcare or else get slugged with a medicare levy. If I earn a bonus, half of it is taken in tax before it hits my bank account. Somebody has to pay for a welfare state you know.

 

Yep.

 

If you don't have to buy a car, pay car insurance, don't have to pay for gas and don't have to pay health insurance, that's an enormous savings for a lot of people. Either you pay for it in taxes or you pay for it piecemeal, a bit at a time. At the end of the month, is there really much difference?

 

Other then the fact that it's not my job to pay for you're health insurance, car insurance, gas, etc etc.

If you want that so much the just move to a different country that does not. NOTHING IS FREE someone always has to pay for it.

 

AMEN TO THAT!!!

I'm tired of picking up someone else's tab!

 

You missed the point. This isn't about paying for "someone else's" health care. It's about paying for your own. You are already doing that if you have insurance. If you get insurance through your employer, that is an expense your employer has to pay--an expense which, if your employer didn't have to pay it, could come to you in higher wages. (Unless your employer is a total ******* in which case he might use it to buy himself a bigger yacht or another vacation home, but I'm going to give employers the benefit of the doubt and assume that most of them aren't so greedy. )

And if you don't have insurance, you should probably hope you don't get sick, because you will definitely be paying for your own health care then, and at five-figure or even six-figure rates.

Do you all want to come up with evidence as to how health care is so much cheaper here than it is in other countries, or would you rather default to the same tired old "You all are stealing from me!" arguments?

As far as health care being cheaper here, it isn't.

 

You missed the point. This isn't about paying for "someone else's" health care.

Really? This whole health care plan will be forcing people to pay for other people's insurance.

It's about paying for your own.

I do just that and I have no problem with it. In fact to be honest I don't need it I have been to the doctors two times sense 2000. I'm just wasting money.

could come to you in higher wages.

You did read ever thing KK posted right? He went over that whole thing about wages. Ever thing he said was spot on.

And if you don't have insurance, you should probably hope you don't get sick, because you will definitely be paying for your own health care then, and at five-figure or even six-figure rates.

You don't need the health insurance. A guy at my work who is in his 20's and has good vision wanted to get insurance to go to the eye doctor ever three to four years. Yeah way to waste money there. I go to the dentist two times out of the year and to be really honest it would not cost me that much if I did not have insurance.

The problemis not what they are paying at lest that's the case if you are in you're 20's NO NO NO it's that people spend there money on things they don't need. Oh let me just go out and buy that flat screen TV and that new boat and the house I don't really have the money for.

Do you all want to come up with evidence as to how health care is so much cheaper here than it is in other countries, or would you rather default to the same tired old "You all are stealing from me!" arguments?]/i\

When you call it FREE HEALTH CARE yes yes I will keep saying that. Becasue there is no such thing as FREE HEALTH CARE.

 

Yes, I read what he posted, but I'm not sure what that has to do with health insurance. We weren't discussing health insurance, we were discussing minimum wage laws. Different topics altogether. I'm fact, just in case, I'm going to see if the words "health insurance" were in his post. If they weren't, you're stretching his post to make it mean something that it doesn't.

Nope, nothing in there about health insurance, not even close.

I'm glad you don't mind paying for your own health insurance and you haven't had to go to the doctor, but are you saying that an uninsured person who has cancer should just go bankrupt or die? What is your solution for those people? You are aware that not everyone can get health insurance right now, right? And someone who has a "pre-existing condition" or even a black mark on their health record--for example, cancer survivors--either cannot get insured at all or can only get it at a ridiculous rate? What is your solution for those people?

I'll give you the benefit of the doubt for a minute before assuming that your answer is "Let them eat cake."

EDITED: Since you are making the assumption that everyone who doesn't have health insurance is in that position because they are buying a flat-screen TV and a boat , I am assuming that your solution to the health care crisis is "let them eat cake."

Not all of us are in our 20s, young whippersnapper.

I have good health insurance through my husband's employer, but my point still stands. Your assumption that everyone in America is in their 20s and healthy is about as idiotic as your assumption that all uninsured and underinsured people are in that position because they bought a flat-screen and a boat. Many people in America have neither, including yours truly.