The Progressive Income Tax: A Tale of Three Brothers

Non-sense.

We all benefit equally.

Are there some special roads only the rich are allowed to drive on? Is there a military that only protects a select class of people?

I would argue that it's the other way. The government has established many programs to fight poverty that the rich are not eligible to receive.

How exactly does society better serve the wealthy?

 

Not true. The problem is two fold. First, the risk of tax dodging increases with income. Second, given the electoral system, many government expenditures are targeted at the middle classes.

You put your foot in it somewhat with the military. Given they've historically been used as part of strike breaking, they can't really be used within the public good definition.

Which government are you referring to? Hopefully not the US. We know that their poverty alleviation policies are notoriously ineffective.

Strange question. Would you like to clarify? We do know that, within neoliberal 'society' (and I smiled there given Thatcher's 'no such thing as society), its structured to ensure wealth benefits wealth (magnifying social divides and harming sustainable growth)

 

Sorry man. I read your responses, and quite frankly, they just aren't worth resounding to in any format that attempts making debatable points.

We aren't going to be able to have a logical and thoughtful discussion when our perspectives are so far apart.

I'll just sit this is out.

 

Splendid! Use the time to actually come out with a workable counter

 

Now now. No need to start making cheap little snide comments.

Look, the fact is, I think your general perspective is so disjointed from my own, there is absolutely no possible way tho have an intelligent or enlightening conversation.

I mean, your first sentence that tax laws are inherently beneficial to the wealthy, because they are more capable for tax evading, there just isn't any logic nor rational thought that I think even warrants a retort.

 

A mere hope you can actually provide an argument. I know, I know, the idea of that on a forum is weird!

I merely referred to economic reality.

Working classes pay automatically. You think they have access to accountants enabling dodging behaviour? Be serious!

 

Fair is a subjective term. Is fair taxing everyone at the same amount? It is taxing the same percent? Or is it taxing according to the financial and life impact? The problem with the video is that it only looks at income taxes which is only 1/3 of all taxation. When you actually consider all taxes the rich get taxed at 35-40%, the middle class at about 25-30% and the poor is around 15-20%.

 

Alright. I'll play.

So they have an accountant, who finds deductions that are listed in the tax code, and you are calling that "dodging".

Let's start there.

 

You're not playing though are you? You're dodging yourself. I said "the risk of tax dodging increases with income". Deny that.

 

And that was said in response to the claim that taxes favor the wealthy.

Tax dodging...

Nope **** this. I'm not interested in playing your game. Find some other sucker to argue in circles with.

 

I referred to the obvious: "the risk of tax dodging increases with income". You can't dispute that. Find yourself someone to hug!

 

A good example of fair taxes are sales taxes. Income taxes calls for evading the law. Evading reporting. Lying about income.

Sales taxes which the FAIR tax is, removes all of those problems. Even crooks pay sales taxes.

 

According to who? Sales taxes are regressive

 

Again, it depends on what is fair. It could be by amount. For example a poor person pays a $5,000 tax and a rich person also pays $5,000 and it is reasoned that its unfair to charge someone a higher price for the same product and in this case the product is the government.

The second measure is by percentage which is the one you subscribe to and you understand it well enough.

The third is by impact. For example, if I have a family and earn $40,000 per year after a 20% tax I have to try to pay for rising housing costs, rising healthcare costs, food, children, cars and I would be lucky if I got to save $5,000 per year which is only about 1/8 of my income if I lived really frugally. But if I earn $10 million per year after I could easily just spend $2 million per year which would be an extravagant lifestyle and save $8 million which is a whopping 4/5 of my income and still live an amazing lifestyle. Not only that but that added $8 million per year will add to a huge nest egg that I can invest and earn millions more meaning that I can save all I earn and live off of the interest I collect. Lets say I am taxed at an extra 20%. The guy with $40,000 now only has $32,000 and will likely not be able to save any money for retirement and will probably start getting into financial trouble and start defaulting on housing and healthcare bills. The guy who had 10 million now has only 8 million but can still spend 2 million and save 6 million and still live off of interest and just get richer a bit slower. My point is that the same tax rate hits poor people a lot harder because they have less disposable income while richer people use their much larger disposable income to get more investments which just keeps increasing it. So maybe to have a tax that has the same impact the $40,000 guy is taxed at 10% and the rich fellow is taxed at 30% to factor in a bit for tax impact.

The last measure of fairness is by factoring in income growth. Lets say that the middle class is taxed at 25% and their incomes only grew by 10% in 20 years while the rich are taxed at 30% and their incomes grew by 150% and took 70% of the economic growth. Since the rich are doing so much better than they used to taxes are re-balanced so that the middle class sees some of that growth too. Maybe the rich is now taxed at 40% and the middle class at 20%. By this reasoning if we needed to lower taxes we would do so mostly for the groups that had seen the least growth and needed it the most and if we had to raise taxes we would do so for the groups that had the most growth and could afford it the most.

You seem to have this moral principal of fairness by same percentage tax and will follow it despite it leading to huge tax breaks to the super-wealthy who have already done so well and need it the least while doing almost nothing for the middle class and poor and exploding deficits and aggravating our debt problem. Should we really follow your principal even when it leads to sub-par economic results? If a principal leads to negative consequences isn't it a bad principal and not be followed? Should we really follow this principal of same percentage rates when there are other measures of fairness that achieve better results?

 

I will say it one more time. I do not judge fair according to how taxes impact the public. The purpose of taxes are to deliver to the government sufficient funds to take care of business. It is not some moral game.

You spent a lot of time typing your social needs. I speak of the needs of Government.

Sales taxes handles the entire problem. Eliminates our need to file tax returns. We also waste money on tax returns.

Best if you keep the government on a leash rather than force the public to wear the collar and leash. We should be the bosses, not the slaves.

Frankly, i applaud the wealthy. We have all had the chance to be wealthy. I do not blame others if they get wealthy while i am not. Not my problem.

There is this silly the rich must be punished and we should reap what we never earned.

 

That has become the Democrats rally cry. But it means nothing at all. I gave a more full reply to Distaff.

 

You do not judge by impact but never justify why judging by percentage is better than by impact? A flat sales that will lead to massive tax breaks for the rich who have already seen massively increased incomes and need it the least and we have not found any correlation between lowered taxes for the rich and improved economic growth. It would significantly raise taxes for the poor who have been hit by higher and higher healthcare, food, and housing costs and a tighter job market. It wouldn't lower taxes at all for the middle class and could even raise taxes for us. So if your proposal only helps 1% of people and the rest don't get anything out of it why should we believe in your principal of fair percentage tax rates instead of fair tax impact? You choose to ignore the effects your tax changes will have but they will be dramatic and can't be ignored. Republican efforts to equalize tax rates while lower taxes have led to huge deficits, increased income inequality and no benefit for 99% of the population.

One problem with your sales tax proposal is that it doesn't tax all income and only taxes spent income. The rich by far are able to save far more of their incomes and use these savings to generate even more free money for themselves in terms of interest and control almost all the wealth in the nation. So on top of that you want to tax spent income which ordinary people will of course fall under since they spend most of their incomes just to get by while the rich spend a much smaller percent and make profits from the rest. Your system isn't fair. Its regressive and is the result of propaganda fed to you by the rich who control and fund the Republican party to help themselves.

Before you call me a liberal or a class warrior here is my alternative. We eliminate almost all the thousands of loopholes in the income tax so that the rate reflects what you will be taxed. We also roll most of the thousands of other taxes into this simple income tax to greatly simplify our tax system eliminating all those business taxes and the like. We then adjust the income tax rates to reflect the effective tax rates each income group was already paying to keep it from being any more or less progressive than it already was. In addition we have the government calculate your taxes and send you the bill for proofing instead of you having to figure it out yourself and pay tax preparation agencies every year who have lobbyists trying to keep my proposal from happening. The benefit of all this is that US businesses will have a much lighter tax load and we will save 4 trillion in tax preparation costs every decade which is effectively a tax cut for everyone and businesses without opening up huge deficits.

With this greatly simplified tax system it will be a lot easier to enforce our existing laws and if we have a problem with this we will just beef up IRS funding because they tend to stop far more fraud than we pay the IRS which is only 10 billion per year.

 

That was quite a speech. Thing is, I am firmly committed to the FAIR tax.

 

The "fair" tax would have major negative economic consequences and I am glad your sellout to wall street isn't ever going to happen.

 

The Fairest method of Federal taxation was how Article 1 of the U.S. Constitution defined it to be done. The 16th Amendment along with the 17th Amendment fundamentally changed our form of Federal government from being representative of the people into representative of the agenda of a small number of people who use taxation and spending as the means of acquiring and retaining power and control primarily for their own benefit as well as those who actively and financially support them.