Back to the subject, some percieved pros and cons of the flat tax.
Pros: simple, encourages investment, less bureaucracy, more money for the people, no more loopholes.
Cons: rich people keep getting richer, more burden on middle class, less money for charities & nonprofits, less tax revenue, where does social security fit in?, H&R Block goes out of business.
I don't know enough about the subject yet to deliver a policy, and if you have any evidence/opinions, please contribute.
Thursday, August 18, 2005
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Some more pros:
-higher revenues for the government, as it would eliminate gaping loopholes through with large corporations keep huge sums of money
-eliminates estate taxes, more money for survivers
-eliminates double taxation
-reduces the need for "tax shelters," due to the transparacy of the new, flat rate
it's not just theroy. the Baltic states, after forsaking socialism and adopting the flat tx system, have become some of the fastest growing economies in Europe. Same with Ireland, who joined the E.U. as one of the poorest nations, and now, due to a flat tax system, has a higher per-capital gpa the France, England, or Germany.
some cons as well:
-usually, savings and investment earnings arn't considered for flat taxes, usually paid wages, the rich earn more money (not really a con)
-race to the bottem effect
I think you've covered the other mian cons.
Sounds good...
I'm still skeptical on whether or not "increased income" would cover the revenues lost by double taxation, estate tax etc. And how are those included in a discussion on a flat tax? Doesn't a flat tax only cover income taxes?
Also, how do we know that Ireland's economy benefits solely from a flat tax, and not a variety of other factors?
The income gap also remains a very large problem. As previously mentioned, people get very upset when stuck in a system that screws them.
would anyone like to take a small vote for my debate class?
which is better
a flat tax?
or no flat tax?
A flat tax, or something using the flat rate as its base, just makes sense. The cons mentioned are presented under the assumption that the rich and super rich actually do end up paying what the brackets would indicate. We all know this not to be the case. I fail to see the logic in sustaining a system bloated with bureaucracy and riddled with loopholes, all built to serve those with the power to influence the policies, and merely divert the general public. The rich still get richer, they still don't pay their portion, and everyone else is still left holding the bag. Meanwhile, nobody who pays their share understands a bit of it.
Beyond any of this, though, is the simple fact that it's unjust to penalise a person simply because he or she makes enough money to fall into a higher bracket. Sure, our society may already be rife with all sorts of interclass injustice. But two wrongs do not make a right.
Why, of course we hold that all men are created equal! Apparently, they just shouldn't be taxed that way!
While a flat tax does seem like a good idea, I disagree entirely with it. As one other poster pointed out a flat tax usually doesn't include savings accounts or investments. So, to my understanding, if you were to take someone from the lower class, who works in a machine shop making twelve dollars an hour and tax his earnings at a flat ten percent and then do the same to a CEO of a large company that would be considered fair. However, the lower class guy only has one source of income, his job. While the two are being taxed at the same rate the CEO would have, probably, more than one other source of income. If the interest from a savings account or the returns on an investment would be ignored by a flat tax, how could I, as the lower class person, support such a thing? All that would do is keep me in the lower class and him in the higher class. Now, with all that being said when this country was first founded had they instituted a flat tax I believe it would have worked much better. No stock market, no investsments, and no savings account, and least not ones with such returns as we have today.
Actually - taxing the interest earned on the vast sums of money that the super rich recieve should also be fair game. It's still imcome afterall.
We think that the only fair way to tax is if everyone has the same tax rate. We justify this because everyone starts out with the same opportunity. As Americans, we are required to have schooling. Once a person reaches a certain age, he or she can legally drop out of school, but that is a personal choice. If someone can't afford an education, the government will help pay for it. Be that as it may, everyone has the same opportunity to get good grades, be involved in school, and earn scholarships. This way, poor people and rich people alike have the same possibilities of making good futures for themselves. Seems fair to us.
The only ones who would protest a true flat tax would be all those who have so many tax dives they pay no taxes. It would work and it would reduce the National Debt almost the first year if eveyone paid it.
We would have to redifine "Income" as any source which increased your overall Net Worth or something like that.
I guess the bottom line is what have we got to lose by trying it.
I would just like to say in response to the poster who mentioned that, "If the interest from a savings account or the returns on an investment would be ignored by a flat tax, how could I, as the lower class person, support such a thing? All that would do is keep me in the lower class and him in the higher class"
The reasoning behind this is not to help the rich get richer and keep the poor in the poor house, but to encourage and promote savings. A person can always save a little and everything does not "need" to be spent on lavish things. Ever heard of The Duggars? http://www.duggarfamily.com/
They were debt free before their current show on TLC and that was with 15+ children. It can be done it is just a matter of choosing. I for one as a person who someday strives to be wealthy (I make under the national average yearly income right now) strongly agree with a flat tax proposal. It is fair because it is equal taxation across the board. However, the poor see it as unfair because it raises their current taxes. If you want to continue your current status of living in poverty and have no desire to gain wealth, then by all means support the current taxation, but if you wish to one day acquire and keep wealth, then you should seriously consider flat taxation and put as much in savings and other interest bearing accounts as possible.
I know this is an old post, but I hope someone on here reads it and has some resposes for me!
Thanks!
ok,my thoughts...No one has mentioned businesses in regard to a 'flat tax'.If a 'flat tax' is to be fair then businesses would have to included.I think a business should be taxed the same as the American individual taxpayer-on their gross and not their net.Once again simplification.Or vice versa,we should be taxed on our net after our expenses are deducted.After all,maintaining a family life is our 'business'(nice thought but will never happen)...As far as income is concerned I think the best definition would be all inclusive.For example,if a person were to win even $100 in a lottery it would be taxed.It is income.(the amount is arbitrary-anything less...well,who would care?)Any exemptions to taxation would be,or at the least should be,exempted are those monetary payments that are derived from insurance claims in regards to repairs or replacement values of properties lost due to accidents or acts of nature.I'm sure there are other exemptions,but I just can't think of any at the moment.
In the first post by Benton C. Glaze, he mentioned the per capita GPA increasing for Baltic states and for Ireland. I am unfamiliar with the term "GPA" and was wondering if it was something similar to GDP?
Hre is the way to fix ALL the problems witha flat tax... Make it a sales tax. If everyone has to pay 15% on everything they spend instead of everything they make then you garantee that ALL income will be taxed. This also means that people who are paid under the table i.e. illegal immigrants would be paying taxes as well as the rest of us. Companies will be paying the taxes on all the products that they have to purchase. This leaves no loopholes and no complications.
How about no income taxes? Like the good 'ol days.
For those that are stating that interest from accounts wouldn't count as income- why wouldn't it? It is now. When you have a bank account (and no, not just the rich do) and you acquire interest, you get a 1099R that is taxed as income, same as if it was from a job. Same goes with 401k, IRA, and pretty much anything else that aquires an increase over time. When you see that you contribute to a 401k and notice you don't pay taxes on it, well, you will when you retire. Why should all this change just because there is a flat tax? The only thing that would change regarding the interest-based taxes is the rate. Right now, there are often different rates for different kinds of accounts. If we were to enact a flat tax, you would no longer be penalized because you did the right thing and saved some money. To those that state a con is that the rich stay rich- well, a flat tax would more than likely make everyone that works richer. The rich worked for their money. We live in a country that (is supposed to) gives everyone the same opportunity. This shows in the guys that come here from 3rd world countries with $300 in their pocket and end up hedge fund billionaires. Equal opportunity does not equal the same outcomes for everyone. Some people just work harder than others. Unfortunately, we have a lot of people in this country who believe a career watching soaps should equal the same income as someone who works hard all their life. And no, I am not rich, but I am a hard working person, take the right steps, and should be compensated as such.
"We justify this because everyone starts out with the same opportunity."
This isn't entirely true. A person who is born in a lower class will have a more difficult time moving up than someone who is born into a higher class. Being born rich is a huge advantage. You are very likely to remain well off because of the people you know and because of better oppurtunities given to you.
The job market is an example. The best candidate does not always gets the job, it is often the one who is friends with those responsible for hiring.
There are exceptions, but the norm is for people to remain relatively close to the class they are born in to regardless of their intelligence and abilities.
Good day !.
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