Originally posted by KazetNagorrawhat's wrong with that?
But this simply boils down to a combination of sales tax and income tax.
the idea is to reduce the income tax as much as possible. You still need to tax income for rich people if you want to have a progressive system of taxation because most studies show that rich people will not spend almost eveything they make like most poor and middle class people do.
If you didn't tax income for rich people under this system, you would be shifting the majority of the tax income the gov receives to the middle and lower classes. The income tax for the rich is just to move the tax burden more toward the rich
Originally posted by uzlessHmm, well I guess this is reasonable up to a point, the problem is you would arrive at 50%-ish or more VAT rates, which would make trying to evade it very tempting.
what's wrong with that?
the idea is to reduce the income tax as much as possible. You still need to tax income for rich people if you want to have a progressive system of taxation because most studies show that rich people will not spend almost eveything they make like most poor and middle class people do.
If you didn't tax income for rich people unde ...[text shortened]... ower classes. The income tax for the rich is just to move the tax burden more toward the rich
The economic rationale behind taxing the rich at a higher percentage is not just that the rich spend less and save more; it's also that they import more (though holidays and luxury goods) than the poor and middle class and their nominal welfare gains are lower.
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Originally posted by Sam The ShamActually no, they don't buy more stuff, they buy less, and save more.
Don't the rich buy a whoooole lot more stuff? that'd amount to the same thing.
A poor person makes $20k/yr and spends all of it. Assume the sales tax is 20%, that means $4k of tax, which is 20% of their income.
A rich person makes $2M/yr and spends... how much? maybe 500k?
That means they pay $100k in taxes, or 5% of their income.
Is this fair?
The rich person makes 100x more money but only pays 25x more taxes, that seems like a pretty sweet deal...for them
Originally posted by forkedknightIf we wanted to make it even more fair, we could just charge everyone a flat fee of $10k. That would be the fairest for everyone, right?
Actually no, they don't buy more stuff, they buy less, and save more.
A poor person makes $20k/yr and spends all of it. Assume the sales tax is 20%, that means $4k of tax, which is 20% of their income.
A rich person makes $2M/yr and spends... how much? maybe 500k?
That means they pay $100k in taxes, or 5% of their income.
Is this fair?
Th ...[text shortened]... es 100x more money but only pays 25x more taxes, that seems like a pretty sweet deal...for them
Originally posted by forkedknightlol, no.
If we wanted to make it even more fair, we could just charge everyone a flat fee of $10k. That would be the fairest for everyone, right?
Person A makes 10K and pays 10K in tax. 100% tax rate
Person B makes 50K and pays 10K in tax. 20% tax rate
Person C makes 100K and pays 10 K in tax. 10% tax rate.
Person D makes 1 Million and pays 10K in tax. 1% tax rate.
Is it fair for someone to only pay 1% of their income in tax, while someone else pays 100%??
The current system is designed to recognize that not all people are created equal and that some people are not able to make as much money as other (for more reasons than just hard work). A flat tax does not recognize this fact that some people just aren't able to make a lot of money no matter how hard they try.
Originally posted by uzlessPlease see my post immediately before the one you quoted.
lol, no.
Person A makes 10K and pays 10K in tax. 100% tax rate
Person B makes 50K and pays 10K in tax. 20% tax rate
Person C makes 100K and pays 10 K in tax. 10% tax rate.
Person D makes 1 Million and pays 10K in tax. 1% tax rate.
Is it fair for someone to only pay 1% of their income in tax, while someone else pays 100%??
The current s ...[text shortened]... this fact that some people just aren't able to make a lot of money no matter how hard they try.
Originally posted by forkedknightYou are forgetting that the income tax would be gone. I also said earliear that people below the poverty line would be tax exempt for things like food and clothing. The price of goods would, ideally speaking, stay level because of the drop in taxes to the manufacturers. I don't think it is fair to tax the rich more just because they make more money. Seems awful Harrison Bergeron to me.
Actually no, they don't buy more stuff, they buy less, and save more.
A poor person makes $20k/yr and spends all of it. Assume the sales tax is 20%, that means $4k of tax, which is 20% of their income.
A rich person makes $2M/yr and spends... how much? maybe 500k?
That means they pay $100k in taxes, or 5% of their income.
Is this fair?
Th ...[text shortened]... es 100x more money but only pays 25x more taxes, that seems like a pretty sweet deal...for them
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Originally posted by dryhumpBut "fair" is not a good criterion for sound government policy. The policy should be aimed at maximizing the wealth of a society. Inevitably, some freeloaders will profit, but that's the price the rest will have to pay.
You are forgetting that the income tax would be gone. I also said earliear that people below the poverty line would be tax exempt for things like food and clothing. The price of goods would, ideally speaking, stay level because of the drop in taxes to the manufacturers. I don't think it is fair to tax the rich more just because they make more money. Seems awful Harrison Bergeron to me.
Following the dominate line of thought in this thread, wouldn’t it be most equitable if these incremental steps were skipped and we dashed straight-away to the eventual conclusion:
Everyone would keep the part of their salary which would equal, as example, a dustman’s pay.
All others, such as: forkedknight, uzless, KasetNagorra, AthousandYoung, (as example) who earn, £100k, £150k or more, would have their surplus turned over to the treasury. I find that plan enticing – don’t you? 😕