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Dr Strangelove
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quote:
Originally posted by Berzerker
Of taxes. Now, why do these liberals who keep saying this want some people to pay "their share" of taxes while exempting so many other people from paying their share?
Yeah, you make $100,000 a year so your " share" is ~$50,000 or more, but if you make $15,000, your share is $0. Hmm... so much for paying our "share"... |
This is a bogus, hypothetical situation. The tax on a $100,000 income is no where near $50,000.
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lightblue
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L'Boro, UK
Oct 2001
time: 05:30
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Considering that the distribution of wealth in most western countries consists of a very small hyper wealthy upper class, a slightly bigger rich class, a majority of people who can get by and significant number of people who struggle to provide their families with basic necessities.
This taxation proposal thing would result in the majority of the population being disadvantaged for the few compared to the current status. I'd suggest looking at what happened in the UK after the attempted introduction of the Poll Tax in 80's to see the probable outcome of any such action. And I'd wager this would be on a far greater scale. Chegitz might get his rise of the proletariat...
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Berzerker
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topeka, kansas,USA
May 1999
time: 23:30
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Strangelove - quote:
This is a bogus, hypothetical situation. The tax on a $100,000 income is no where near $50,000. |
And you have a medical degree?  Do you understand what the word "hypothetical" means? A "hypothetical" tax rate doesn't need to be the actual tax rate, just hypothetical. Besides, this was what Al Sharpton was advocating - a %50 tax rate for rich people, so the "hypothetical" is relevant once he defines "rich" to include people making $100,000. Furthermore, you obviously missed the symbol ~ which means "about" or "roughly". And you're wrong anyway, Federal, state, and local taxes are ~ %50 on most "rich" people now if not more.
edit: And Sharpton wants that %50 tax rate to be the federal income tax rate, so that doesn't even include state and local taxes, federal sales taxes, payroll taxes, etc...
Last edited by Berzerker on 06-08-2003 at 09:10
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Giant_Squid
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Fun Guy from Yuggoth
Jan 1970
time: 00:30
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David (in response to something way back on page two that you've probably forgotten by now):
quote:
And I agree. Which is why I don't insist that everyone should pay the same dollar amount in taxes (well, again, other than $0, anyway). What you are doing is looking at discretionary income, and trying to determine the effects of various tax rates on that income. But the problem is, not everyone has the same amount of discretionary income - that is, due to debts, etc., someone who makes $100,000/year could have less money to spend after expenses than someone who makes $30,000/year. What you are doing, though, is that saying "by definition", anyone who makes six figures is rich, and can afford a proportionally higher amount of income. Let's take an example.
Person A makes $120,000/year - call it $10,000/month. Person B makes $36,000/year, or $3,000/month.
Your system says that Person A is automatically richer, and thus can afford to pay more in taxes, and thus SHOULD pay more in taxes out of "fairness".
But wait. Let's say that Person A is divorced, and has to pay alimony and child support. Let's say that when he was married, he and his wife bought a house that they could afford easily on a dual income (say, ~$3000/month), but after the divorce he was stuck with the house, paying for it on only one income. Stick in a car payment and food, clothing, gas, etc., and the guy is looking at a huge amount of money, BEFORE we even factor in taxes.
Person B, on the other hand, is just out of college, which he worked his way through on scholarships, grants, and a job. He lives in a small single bedroom apartment which costs $450/month, is unmarried, and has an older car he paid cash for, with his parents' help. That is, other than his apartment payment and food/clothing/gas, he has no real expenses.
In this scenario, who is better off, financially speaking? I think that it's fairly clear that Person B is much better off, in that he has no debt and very few expenses. Person A, even though he makes 3 times as much money, is riddled with debt and expenses, and has little money left over.
Obviously, a 50% tax rate is going to hurt Person A MORE than Person B. Probably a LOT more. Which brings us to the biggest problem with your system - in order to make it "work", we would have to look at the exact financial/lifestyle situation of EVERY SINGLE TAXPAYER. Privacy issues aside, this is simply impractical.
Now, let's apply my system to these same two people. In my system, there is a flat tax of, say, 15%. Person A is going to be fine with a 15% tax rate, and Person B not only won't starve, but will probably increase his financial stability, relative to Person A.
Of course, we'll run into issues where the 15% tax rate will be nothing more than peanuts to a billionaire, and will hurt him not in the slightest, while someone who makes only $20,000/year will be affected worse. However, this tax rate is designed so that no one starved - that is, the poorest of the poor can pay this tax rate, and still eat/live, as long as they are working. Granted, this system of taxation is not punitive towards rich people, and it doesn't redistribute wealth, but OTOH, it does not make unfounded assumptions and generalities about the financial status of people, based solely upon their income.
Now, which system sounds more fair to you, using any definition of fair you want?
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Isn't this sort of the basis of the current system where basically everything you do from donating to charity to divorcing to pretty much down to sneezing shifts your tax burden one way or the other? I don't support this system as is because it's gotten to the point of absurdity, but there is something to be said for modifying taxes a bit to take account of special circumstances, and I certainly wouldn't recommend a simple graduated income tax where everyone earning X pays Y%.
Every system has some exceptions and some people who slip through the cracks so that it ends up being unfair. If one can minimize these through intelligent policies, and if the gain in the majority of cases when the system works as planned is greater than the loss in the few cases where it fails, then I would call it a step forward. It's my educated guess (although I would have to be an economist with a specialty in tax theory to make it anything better) that the number of seemingly-rich-but-really-poor people harmed by this system is going to be less than the number of obviously-and-blatantly-poor people harmed in a flat tax system, especially if it this carried out intelligently (someday, somewhere, there WILL be a government program that gets carried out intelligently, mark my words)
quote:
I suppose that depends on a number of things. Rich people don't tend to be very liquid in terms of assets - I doubt there is any billionaire in the world who could pony up $500 million in cash at any given moment. And don't try to bring non-liquid assets into the game - the poor person has to pay cash. |
True, but this was a stupid example on my part (sorry!) since people don't actually pay from their savings, but rather from their income. So if a billionaire was earning $100 million per year, the government would withhold $50 million from their paycheck, which oughtn't to cause any trouble regarding liquid assets. Besides, if such a policy were to go into effect (actually, I don't know why I'm saying "if", we have a progressive income tax right now) the rich would make sure they had enough available assets to pay it.
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David Floyd
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The bottom of a large bottle of beer
Jan 1970
time: 05:30
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GS,
I'll respond more later, but:
quote:
It's my educated guess (although I would have to be an economist with a specialty in tax theory to make it anything better) that the number of seemingly-rich-but-really-poor people harmed by this system is going to be less than the number of obviously-and-blatantly-poor people harmed in a flat tax system, |
If we are setting the tax rate such that the person with the lowest income can survive, no one is really being harmed. We're simply applying the tax rate that we apply to the poorest person to everyone - what richer people pay in taxes doesn't harm the poorer people, after all.
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Albert Speer
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Puerile Polemic
Mar 1999
time: 00:30
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i dont know obi-wan... there's a billion muslims who would disagree and say that jesus never claimed to be God but that was added in by paul and others...
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Dr Strangelove
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quote:
Originally posted by Berzerker
Strangelove -
And you have a medical degree? Do you understand what the word "hypothetical" means? A "hypothetical" tax rate doesn't need to be the actual tax rate, just hypothetical. Besides, this was what Al Sharpton was advocating - a %50 tax rate for rich people, so the "hypothetical" is relevant once he defines "rich" to include people making $100,000. Furthermore, you obviously missed the symbol ~ which means "about" or "roughly". And you're wrong anyway, Federal, state, and local taxes are ~ %50 on most "rich" people now if not more.
edit: And Sharpton wants that %50 tax rate to be the federal income tax rate, so that doesn't even include state and local taxes, federal sales taxes, payroll taxes, etc... |
Where in your first post do you actually say that Al Sharpton proposed this particular tax rate?
The current maximum Federal tax rate is 37.5%. The state tax rate is 5%. Localities don't tax income. This doesn't add up to 50%.
Oh, and did you see the comma in between the words "bogus" and "hypothetical"?
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Berzerker
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topeka, kansas,USA
May 1999
time: 23:30
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Strangelove - quote:
Where in your first post do you actually say that Al Sharpton proposed this particular tax rate? |
I didn't, the point of the thread was to call attention to the hypocrisy of liberals who say the "rich" need to pay even more in taxes to match their "share" while everyone else pays lower rates and far less in taxes (i.e., why is everyone else's "share" so much less?). But my following comment about paying $50,000 out of an income of $100,000 does reflect the rate Sharpton advocates.
quote:
The current maximum Federal tax rate is 37.5%. The state tax rate is 5%. Localities don't tax income. This doesn't add up to 50%. |
That's nice, but you're ignoring payroll, sales, property, and umpteen other taxes we already have. Sharpton wants the federal income tax bumped to %50 for "rich" people, and we know when a liberal democrat starts defining "rich", it'll include a bunch of middle class people because there aren't enough rich people to pay for what they want.
quote:
Oh, and did you see the comma in between the words "bogus" and "hypothetical"? |
Yes, "bogus" describes your perception of this "hypothetical situation" you claim I offered. So what's your point? How can a "hypothetical" situation qualify as "bogus", especially when the "hypothetical" reflects reality now? Even your numbers add up to %50 when you throw in the payroll tax, and above %50 for the self-employed. Throw in all the other taxes if you don't consider the payroll tax an actual tax and the "rich" are already paying ~%50 if not more.
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Felch
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Germantown, Maryland
Sep 2001
time: 00:30
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You need to calm down your libertarian extremism with a recognition of the destabilizing impact this sort of tax structure would cause.
Remember, first and foremost, that people are only willing to pay what they think is fair. Someone who derives little or no real benefit from the government (poor schools, worse policing, etc.) is not willing to pay 10% of their income to the state. People who derive a great deal of benefit, insured bank accounts, regulated stock market, polce protection of property, government contracts for their business, et cetera, are willing to pay whatever it takes to reasonably provide these services.
The problem arises because people who are poor and feel that their lot in life is bad are more willing to take extreme actions to change their position. Progressive taxes and a minimal welfare state provide the outlet for anger and resentment that prevents it from festering into Marxism.
The trick is to keep taxation at a local level, where people can be better sure that the money they pay is being used properly, and is not merely financing a new horde of government paper-pushers. If you really want to reform the federal tax code force the national government to derive its money from the states. Then the states will realize that the feds are just a sow that all the little porkers suck at for nickels and dimes, and they, the states, will enforce a limited national government.
Localizing government is the best way to limit it.
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Dr Strangelove
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quote:
Originally posted by Berzerker
Strangelove -
Yes, "bogus" describes your perception of this "hypothetical situation" you claim I offered. So what's your point? How can a "hypothetical" situation qualify as "bogus", especially when the "hypothetical" reflects reality now? Even your numbers add up to %50 when you throw in the payroll tax, and above %50 for the self-employed. Throw in all the other taxes if you don't consider the payroll tax an actual tax and the "rich" are already paying ~%50 if not more. |
The payroll tax has a maximum, so the more you make, the proportionally less you pay.
Anyway, I'm in no danger of making it to the $100,000/year bracket, because the bulk of the people I see are Sharpton's folks. You see, Medicaid and Medicare have this nasty habit of balancing their budget by taking five-fingered discounts from the people who provide services to them. They can even retroactively change the fees they pay for services and exact a refund from their providers. So let me tell you buddy, if you think you're going to get any sympathy from me, you're sadly mistaken.
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Berzerker
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topeka, kansas,USA
May 1999
time: 23:30
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quote:
Progressive taxes and a minimal welfare state provide the outlet for anger and resentment that prevents it from festering into Marxism. |
In other words, let them steal some so they won't steal it all.
Strangelove - quote:
The payroll tax has a maximum, so the more you make, the proportionally less you pay. |
That max is ~$65,000, so someone making $100,000 will still get nailed with most of the tax.
quote:
Anyway, I'm in no danger of making it to the $100,000/year bracket, because the bulk of the people I see are Sharpton's folks. |
And you plan on making less than that for the rest of your life?
I don't base my ideas about taxes on what I or you make, but on what is moral. You apparently base your ideas on not being one of the people getting screwed.
quote:
You see, Medicaid and Medicare have this nasty habit of balancing their budget by taking five-fingered discounts from the people who provide services to them. They can even retroactively change the fees they pay for services and exact a refund from their providers. |
And then the medical profession tries to make up for that loss by over-charging the people who do pay; I do see, I understand what socialised medicine in one sector of the economy does to the marketplace.
quote:
So let me tell you buddy, if you think you're going to get any sympathy from me, you're sadly mistaken. |
That's a weird comment, you complain about what Medicare and Medicaid are doing to your profession and think I'm asking for your sympathy? Btw, why do you keep avoiding questions?
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Adam Smith
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Maryland, USA
Jan 1970
time: 00:30
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I don't think much of Sharpton's argument that rich people have benefitted more from government services and therefore need to pay their "fair" share. The government provides public goods which everyone has access to - national defense, clean air, court system, etc. . But differences in outcomes have to depend on differences in inputs. That leaves things like amount of work, education, and luck. If luck had a big effect, there would be little or no relation between work, education, and earnings. If the amount of work matters it is hard to see how anyone could object to the result. If the complaint is about access to education, then Sharpton should have talked about that, not about the "fair" share of taxes.
All that said, I think you can make a pretty good economic case for a progressive income tax. People tend to work less as their income rises because leisure becomes increasingly valuable. This results in an inelastic or even backward bending supply of labor. By taxing higher earners at higher rates a progressive income tax causes less loss in the amount of time people are willing to work. The converse of this is that we should adopt a negative income tax for low income workers to encourage them to work.
There are several long run considerations. If taxes are high enough people are less likely to enter high income professions or take additional risks. Why give up years of income to go through medical school if you won't earn anything more? Why launch a new product if you could spend the time sitting on the beach? In the long run skilled workers might also emigrate. (England's famously confiscatory tax rates caused the Beatles to flee the country. "Let me tell you how it will be There's one for you, nineteen for me...") Despite Arthur Laffer's unsupported claims, it does not appear that we are at this point in the US. Progressive taxes might also be seen as a remedy for economically harmful wealth transfers such as gains from insider trading. But in this case the best approach is to fix the root problem, rather than rely on the tax system to help even accounts.
edit: typos
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Dr Strangelove
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quote:
Originally posted by Berzerker
In other words, let them steal some so they won't steal it all.
Strangelove -
That max is ~$65,000, so someone making $100,000 will still get nailed with most of the tax.
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Yes, but if you make 5 million the payroll tax is peanuts.quote:
And you plan on making less than that for the rest of your life?
I don't base my ideas about taxes on what I or you make, but on what is moral. You apparently base your ideas on not being one of the people getting screwed. |
Medical ethics dictates that I can't abandon people just because they change from private insurance to public. In some instances that would be virtually manslaughter. Even if that weren't the case I would not refuse to treat a person based on the type of insurance they have. Can you understand that?quote:
And then the medical profession tries to make up for that loss by over-charging the people who do pay; I do see, I understand what socialised medicine in one sector of the economy does to the marketplace. |
Well, I can't ask my office staff to work for free, can I? Anyway I don't think I overcharge, particularly when you consider what lawyers ask for an hour's work.
quote:
That's a weird comment, you complain about what Medicare and Medicaid are doing to your profession and think I'm asking for your sympathy? |
No, you complain about the progressive tax rate, then I inform you of the burden the government places on one particular group that provides services to them. The progressive tax is at least distributed and legally mandated. The retroactive fee adjustments enforced by Medicare are focused on one small group, and probably have no legal precident. quote:
Btw, why do you keep avoiding questions? |
I have a life.
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06-08-2003 02:22
to the idea of a flat tax.
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