Raise income tax EXCEPT for the richest of the rich?

equity
1. the quality of being fair and impartial.
Is the above definition not accurate?

Consider the following, if average worker earns about $50,000 per year, about $25 per hour.
Government spends about $12,000 per person each year, or the equivalent of about 480 hours labour of the average worker, which would equate to about a 23% tax rate for ALL.
If the abouve was used as the basis of taxation, then eachindividual who has acquired income in some form would be given the option of paying a tax either in dollars equal to 480 hours of their earnings, [ total earnings / 2085 X 480 = tax owed ], or to perform 480 hours of labour as needed by government.
Unemployed persons would contributeto the operation of government which provides for them by performing 480 hours of labour, while those earning low incomes would have a choice of paying their tax in dollars, labour or a combination of both, and those earning more than the average income would be left to pay in dollars alone, equal to the formula shown above.

$0 to $50,000 = 480 hours of labour or a maximum tax in dollars of [ $50,000 / 2085 = $23.98 x 480 = $11,510 tax ]
For a minimum wage worker 480 hours would equate to about $3,480 or about 29% of what government spends per person, and slightly more than one work days labour each week.
>$50,000 = $11,510 minimum tax AND those earning more, examples shown below.
$1,000,000 = [ 1,000,000 / 2085 = $479.62 x 480 = $230,218 tax ]
$200,000,000 = [ 200,000,000 / 2085 = $95,923 x 480 = $46,043,040 tax ]

If you wish to view living as a game then ALL need to become participants, and the outcome of every game I have ever played ends as the result of one or some winning while another or others lose. Essentially what we are trying to accomplish as a result of government is more or less a game like chess where no matter how strong the opponent is the game always ends in a stalemate.

All that matters is the value of the dollar relative to the cost of the materials and labour on which it is spent.

I vehemently disagree. Those who earn more should pay more, but none should get something for nothing. (with the exception of those who are totally incapable of making any useful contribution)

 

equity
1. the quality of being fair and impartial.
Is the above definition not accurate?

Consider the following, if average worker earns about $50,000 per year, about $25 per hour.
Government spends about $12,000 per person each year, or the equivalent of about 480 hours labour of the average worker, which would equate to about a 23% tax rate for ALL.
If the abouve was used as the basis of taxation, then eachindividual who has acquired income in some form would be given the option of paying a tax either in dollars equal to 480 hours of their earnings, [ total earnings / 2085 X 480 = tax owed ], or to perform 480 hours of labour as needed by government.
Unemployed persons would contributeto the operation of government which provides for them by performing 480 hours of labour, while those earning low incomes would have a choice of paying their tax in dollars, labour or a combination of both, and those earning more than the average income would be left to pay in dollars alone, equal to the formula shown above.

$0 to $50,000 = 480 hours of labour or a maximum tax in dollars of [ $50,000 / 2085 = $23.98 x 480 = $11,510 tax ] (or a combination of both)
For a minimum wage worker 480 hours would equate to about $3,480 or about 29% of what government spends per person, and slightly more than one work days labour each week.
>$50,000 = $11,510 minimum tax AND those earning more, examples shown below.
$1,000,000 = [ 1,000,000 / 2085 = $479.62 x 480 = $230,218 tax ]
$200,000,000 = [ 200,000,000 / 2085 = $95,923 x 480 = $46,043,040 tax ]

If you wish to view living as a game then ALL need to become participants, and the outcome of every game I have ever played ends as the result of one or some winning while another or others lose. Essentially what we are trying to accomplish as a result of government is more or less a game like chess where no matter how strong the opponent is the game always ends in a stalemate.

All that matters is the value of the dollar relative to the cost of the materials and labour on which it is spent.

I vehemently disagree. Those who earn more should pay more, but none should get something for nothing. (with the exception of those who are totally incapable of making any useful contribution)


Note: I should have added, there would be no deductions at all which would greatly simplify our taxes.

 

Actually no. You need to go further and refer to an economic definition. For tax that definition separates into vertical and horizontal equity. The horizontal form focuses on how those with similar wealth or income should be taxed at the same rate. The vertical form, however, focuses on how those taxes increase with income/wealth. Its here that you necessarily fall down as you haven't factored in diminishing marginal utility of income and how that then implies, to take into account one's capability of paying tax, progressivity is required.

 

Half of US wage earners now drag home less than $30K per year in an economic system predicated upon mass consumption. First the Wall Street/donor/"job creator" class decided they no longer needed american workers for production in their march toward profit margin growth to infinity. Then they decided they no longer needed american workers for consumption with nations like China and India modernizing. The power structure understands full well it has lost all sense of legitimacy and has nothing left but authoritarianism and illusion; the jobs are not coming back and the economic system redistributes societal wealth into the hands of the ruling aristocracy. The power structure can now turn $40-50K per year per hominid in corporate for profit prisons with convict leasing and stocks traded on Wall Street. This is why police departments have been militarized, in preparation once a befuddled, incoherent, institutionally distracted public sees beyond the scape goating of the poor.

America is still a colonial wealth extraction paradigm. It is pursuing economic extraction and colonization both at home and across the globe, the latter coming at great expense to the unsubstantial people who serve in and pay for endless war and global occpuation. This is what we now leverage our military for; the occupation and economic colonization of others, including the unsubstantial people of america who can now be murdered with impunity on the streets of america while unarmed.

Privatized gains versus socialized losses for the Wall Street bankster class
Internalized profit versus externalized risk and expense for the “job creator” class
Socialism for the aristocracy versus laissez-faire capitalism for the masses

 

Sure, we must worship our aristocracy and await the refuse thrown over the castle walls for the peasants.

It is feudalism, humanity gave that a go, it didn't work out well. Humanity will evolve away from this system, it will not be here 100 years from now, and for much of the same reasons humanity abandoned classical feudalism.

The grand american experiment has morphed right back into what it allegedly overthrew.

 

If you look at my suggestion more closely, you might see that it does not require income to be liable for taxation. Instead it is based on what appears to have become more or less universally accepted as a work year in hours, or 2085 hours.
I posted a more detailed explanation in another thread, as shown below:

I'm all for changing our Federal tax system to something which would apply equally to ALL. A flat tax rate of 23% would be a good start, requiring each able body and mind adult to pay 23% of their total income produced each year, regardless of source and with NO tax deductions at all OR provide 23% of a full time work years labour, 480 hours, in government service. Those filing for government assistance would be required to perform 40 hours labour each month until a total of 480 hours each year in order to receive ANY government assistance.

Examples of application shown below:

Unemployed person
0.00
0.00 FICA tax
0.00
0.00 Fed income tax 480 hours of government service, 40 hours minimum per month to be eligible for ANY government assistance

MW worker $7.25/hr
15,116.25
-1,156.39 FICA tax (7.65%)
13,858.86
-3,210.77 Fed income tax (23%), 480 hour of government service or a combination of both
10,648.09 Take home pay

MC worker $25/hr
52,125.00
-3,987.56 FICA
48,137.44
-11,071.61 Fed income tax
37,065.83 Take home pay

150,000.00
-10,154.40 (SS: 128,700 x .062 = 7,979.40) + (MC= 150,000 x .0145 = 2,175)
139,845.60
-32,164.49 Fed income tax
107,681.11 Take home pay


500,000.00
-19,729.40 (SS: 128,700 x .062 = 7,979.40) + (MC= 500,000 x .0235 = 11,750)
480,270.60
-110,462.24 Fed income tax
369,808.36

10,000,000.00
-242,979.40 (SS: 128,700 x .062 = 7,979.40) + (MC= 10,000,000 x .0235 = 235,000)
9,757,020.60
-2,244,144,74 Fed income tax
7,512,905.86 Take home

100,000,000.00
-2,357,979.40 (SS: 128,700 x .062 = 7,979.40) + (MC= 100,000,000 x .0235 = 2,350,000)
97,642,020.60
-22,457,664.74 Fed income tax
75,184,355.86 Take home

 

That occurred in 1913, and as a result we now owe more than $20 trillion dollars of debt.

 

Your numbers are irrelevant. You've started from a position where you haven't understood vertical equity. Flat tax is inequitable unless the marginal utility of income is a constant (i.e. it doesn't differ as people move up their income/wealth profile).

Right wing economics has a history of forgetting the importance of progressivity. For example, Friedman tried to flog the negative income tax. Focused on supply side economics and efforts to eliminate work disincentive effects, it essentially forgot that progressive tax rates were needed to ensure the basic income is sufficiently high.

 

My numbers accomplish exactly what I set out to do, and vertical equity should not be something the Federal government should be trying to achieve.
A basic income varies depending on many things, and taxation should not be applied as the means of achieving a basic income, If a 40 hour work week does not produce a persons or a families basic income needs, perhaps a 50 hour or more work week is what is needed.

 

Putting thousands of dollars of taxes on a person struggling to get by so you can cut millions in taxes for the m/billionaires so they can buy a bigger mega-yacht is only fair to those whose goal it is to make the richest richer and the poorest poorer.

Which is your goal, isn't it?

 

Your view of "fairness" completely ignores the fact that people have different incomes, and that for a very poor person, 100% is needed to obtain basic necessities, while for a super rich person, virtually 100% is available for luxuries.

If you want to start with a precondition that all incomes will be equalized, then I have no problem with taxing all incomes the same.

 

Except for two points. One the Laffer curve is theoretical and unverified in practice. Second the GDP growth rate and federal budget were in much better condition in the past when the top tax rate was much higher. The top tax bracket has been coming down for decades at the same time as the defecit has increased and the Rate of GDP growth was much higher

 

Right. Under the Laffer theory, the lower taxes are to start out with the less marginal value in cutting the tax.

A 20 percentage point tax cut when the top rate is 90% means after tax income triples, while government revenues drop 22% per unit of income.

A 20 percentage point tax cut when the top rate is 30% means that after tax income increases 28%, while revenues drop 2/3 per unit of income.

 

Yes but regarding GDP we used to manufacture stuff to produce goods. That was REAL GDP. But our system has changed to a technological, service sector economy. Now we call services GDP, but if we used historic measures our GDP would be about zero.

My point is that the definition of GDP has changed and we can't compare it to historical highs.

 

Vertical equity is one of the most important principles of effective tax policy. To ignore it guarantees poor policy.

You miss the point. The basic income requirements in the negative income tax ensured its failure. They either needed to employ a high marginal tax rate or ensure severe poverty. This is what happens when you ignore vertical equity!

 

The very poor person would pay the same flat tax rate as the richest would pay, but the poor have access to a large number of social welfare programs that would more than offset the taxes paid and gradually be phased out completely as their income increased beyond a predetermined amount based on various determinations.
There's not enough hours in a year to equalize all incomes as many people would have to work thousands of hours at the value of their work to earn the same as the value of an hours work by some others.
I might be tempted more to retain the progressive tax rate system we currently use, except for the fact that all it actually accomplishes is making it more difficult for others to acquire wealth while assuring the wealthiest a source of increasing theirs regardless of the tax rates.

 

Your argument is that the poor/middle class should pay more taxes but we should have more social welfare programs to make up for it?

Why not tax them less so they won't need more government programs?

So what? If treating people the same is your view of fairness, then what difference does it make how much they earn?

How does a lower tax rate on working poor/middle class persons make it more difficult for them to acquire wealth?

 

Except that vertical equity is not ignored in what I had suggested. Everyone would pay the same flat tax rate on all income regardless of how it was acquired. Someone who was unemployed the entire year but received $100 interest from a savings account would pay the flat tax rate on that interest just like everyone else. But the unemployed person would have access to Social Welfare programs unlike most everyone else, and if that person became employed in a MW job the same flat tax rate would continue to be applied to all earnings, but the availability of Social Welfare programs would still continue although lowered as a result of the income increase. The flat tax rate applied to all income sources equally would simplify taxation greatly, eliminating completely for some a need to file a tax return, and allow for a tax rate change to be made whenever necessary raising or lowering the rate.
Primarily it would be the Social Welfare spending programs that would be where most changes would need to occur determining eligibility and the amount payable.

 

My argument is that everyone should pay taxes, period. As for social welfare programs, their purpose should be to help people eliminate their need of them, NOT eliminate the need to try and become a productive/more productive member of society.

How much less can you tax someone who pays no taxes? And don't bother mentioning FICA, sales tax, sin taxes, etc. Those can be easily eliminated by not working at all.

It makes no difference what another earns, simply that they pay the same rate as everyone else is not unfair.

As ones income increases the progressive tax rates reduce what remains to be invested.
Remaining in the lower tax rate usually doesn't promote the acquisition of wealth.
The more you earn the more of it government takes.

 

You're asking for repetition. As you've ignored diminishing marginal utility of income, you have also ignored vertical equity. The problem with the flat tax is that its based on ideological grounds and fails to embrace either efficiency or equity.

 

We actually don't compare the GDP. We compare the growth rate of the GDP.

 

I disagree.

 

That's nice. Irrelevant mind you. This isn't about opinion after all

 

A 100% ?

 

It can be over 100% mind you. See, for example, 'fuel poverty' where income is insufficient to ensure adequate housing standards.