Tax policy -- effects and fairness

Forums: Politics, Taxes, U S Politics, U S Taxes, U S Tax Structure
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Foxfyre wrote:

If. . . .

The person earning 1,000,000 pays 100,000 in taxes.
The person earning 500,000 pays 50,000 in taxes
The person earning 100,000 pays 10,000 in taxes
The person earning 50,000 pays 5,000 in taxes
The person earning 10,000 pays 1,000 in taxes
The person earning 1,000 pays 100 in taxes . . . .

How is that not fair? How would each candidate answer that question?

If I only make $1,000 then $100 is a big hit for me. That's going to be coming out of my food, housing, or childcare budget, which I probably already can't afford. Because there is a baseline of income necessary just for survival, until a person surpasses that, the tax burden is especially heavy.

Now, you said something about people not knowing what works and doesn't work in government. Do you know for certain that, say, the Bush tax cuts are "working"? Here's how I see it: what works is highly dependent on a lot of factors. It is a complex economy and a complex government. There is a range of taxation that can be imposed without significantly harming the economy. If the money is spent wisely, it can even boost the economy. There is also a range of taxation that can be imposed on an individual without significantly burdening that individual. This is different depending on their income. These are my basic assumptions. I am happy if someone who knows more about it can verify. I don't know if anyone has ever figured out what that range is and I'm sure that it can change over time, but I don't see any reason to sustain a knee jerk opposition to any and all raising of taxes. Nor do I think cutting taxes is always good. Because of that, I am open to sensible tax proposals.

McCain is not proposing the flat tax you illustrate with your example. So maybe we can discuss the relative merits of the actual proposals from each candidate.

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Type: Discussion • Score: 5 • Views: 1,379 • Replies: 11

[+3] - H2O MAN - 09/10/2008[quote="cicerone imposter"] Oh, I see; the Fair Tax Plan does away with social security and those other safety nets for the middle class and the poor. [/quote] WTF did you read...

@FreeDuck,

I'll also repost my answer to Faux here.

Cycloptichorn wrote:

Quote:

So again, get us started here. What can we discuss. I did offer this before:

If. . . .

The person earning 1,000,000 pays 100,000 in taxes.
The person earning 500,000 pays 50,000 in taxes
The person earning 100,000 pays 10,000 in taxes
The person earning 50,000 pays 5,000 in taxes
The person earning 10,000 pays 1,000 in taxes
The person earning 1,000 pays 100 in taxes . . . .

How is that not fair? How would each candidate answer that question?

Easy answer. The smaller your overall income, the more of it you need to keep just to meet the basic needs of living in our society. The larger your income, the less of it you need to keep in order to meet the basic needs.

Let's double your amount on the top payer: 1 million, pays 200k in taxes, still has 800k left. You cry 'unfair!' But 800k is a shitload of money to be making per year. It means you can outright buy two 200k houses per year, two 50k cars per year, eat all the food you want, take all the vacations you want, have access to the best education and health care for your kids, and STILL be putting more then 100k per year in the bank for retirement.

On the other hand, as someone who makes 50k per year, 5k is a lot to take out! It's hard to make ends meet as it is, thanks to inflation, let alone have meaningful savings put away. Those at the upper end of the scale literally don't need their money as much as the lower end of the scale, and at the same time have more to protect; this necessitates more payments to support the system which gives them that money.

Think of taxes as insurance. You pay taxes to insure that the country doesn't fail. Like most insurance policies, the larger amount you have, the more you pay to insure it. The more you have to lose, the more it costs to protect it. Not a difficult concept. And at the end of the day, the rich are still rich under higher taxes, the poor are still poor even with lower taxes, and the middle class still has a hard time getting anywhere.

Cycloptichorn

1 Reply

The FairTax plan is a much better plan because it does not really matter how much you make, it's all about how much you spend.

1 Reply

@H2O MAN,

Oh? It doesn't matter how much one makes? Since when? What exactly is the "fair tax plan?"

1 Reply

@cicerone imposter,

You don't know about The FairTax plan?

1 Reply

@H2O MAN,

Oh, I see; the Fair Tax Plan does away with social security and those other safety nets for the middle class and the poor.

As our economy tanks, and more seniors continue to work longer after retirement age because they didn't or couldn't save enough for their own retirement because of children or unexpected health care costs, they must now live in abject poverty for the rest of their lives.

You know, America used to be a great place to live. The government made sure that our economy fell into recession by sloppy fiscal management, and now they want to share the pain with the majority of Americans who helped this country become the economic superpower of the world by continuing to take away any security they created and paid for.

1 Reply

@cicerone imposter,

cicerone imposter wrote:

Oh, I see; the Fair Tax Plan does away with social security and those other safety nets for the middle class and the poor.

WTF did you read that?
Go back and do your homework ci, you have no clue about what The FairTax is about.

It does away with the IRS.

2 Replies

@Cycloptichorn,

I have to agree that the so called fair tax would not work in this society. A progressive tax structure is necessary and important in this society.

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@H2O MAN,

Okay, I was wrong on the "assumption" about social security and "safety nets." However, the formula tells us it's not 23% but 30% federal tax rate on sales. What happens to the tax rate when state income and/or sales taxes are added to the federal rate?

Are you suggesting that it's a much better deal for the average middle class and poor? It sounds good on the surface, but what happens if a good majority of the citizens do not save for their retirement? Many do not save today, even when their retirement savings is tax deductible.

Will those become burdens to the state, or will social security be figured at a higher benefit rate? Who's going to pay for all this if it's not through payroll taxes? You think that the federal government will hold money in trust to pay for social security? Since when? It raises more questions than answers from my perspective, but I've been a pessimist about government's ability to manage money or anything else very well.

1 Reply

@cicerone imposter,

Now you're getting it!

Since the idea raises more questions I suggest that you
check out your local FairTax organization for answers.

I have hyper-linked you to the California chapter.

0 Replies

@FreeDuck,

I guess nobody wants to discuss tax policy after all.

0 Replies

@H2O MAN,

How does getting rid of the IRS make a tax fair?

Who makes sure everyone pays their taxes if we don't have the IRS?

Or is it "fair" when some people cheat on their taxes and no one from the government makes sure they ever have to pay for the services they use?

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Tax policy -- effects and fairness

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