Let's Discuss Progressive vs. Flat Taxes

[jross]

Ah, taxes – Which system is better?  Progressive taxation with varying rates based on income or a flat tax system applying a uniform rate for all?

First, what are the considerations for choosing which system is better?

• Example: simplicity, economic growth, social impact, fairness, equity

Second, what is the appropriate threshold for each consideration?

• Example: Simplicity
  • Companies send a flat rate percentage from individual paychecks to the government.  No individual annual tax form is required.  No deductions, exemptions, or special considerations.

Finally, which system is better at addressing those considerations?

• Example: A flat tax rate is better for simplicity.

 

[mspart]

I can tell you that there is no income tax in the state of Washington due to the fact that they will not enact anything that is not progressive.  

The State Constitution prohibits the taxing of property (tangible or intangible) with anything other than a flat tax rate. 

ARTICLE VII - REVENUE AND TAXATION

SECTION 1 TAXATION.
The power of taxation shall never be suspended, surrendered or contracted away. All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word "property" as used herein shall mean and include everything, whether tangible or intangible, subject to ownership. All real estate shall constitute one class:

So the legislature passed a tax on capital gains.   The State Supreme Court upheld it saying capital gains is not income.   Yet every other state that has an income tax and the federal government define capital gains as income.   If capital gains is income, then it cannot be taxed without taxing everyone's income at the same rate.   When this passed the legislature, one legislator was heard to say that this is the first step to a state income tax.   This was long in the making as I mentioned about the CA wealth tax.   The WASC is full of progressives who decided to read the constitution in a different way that past SC decisions have.    There is an initiative that will go on the ballot this year to repeal this tax, and there will be another initiative to prohibit the state, county, or city from imposing an income tax.   NOTE:   Seattle enacted such a tax some years ago and it was eliminated by the courts.   

Just a little relevant history that is happening right now for y'all to consider. 

Now to the question:

1.  Now a flat tax has benefits because you know right away the tax you will pay.   There is at least some concreteness to that, something you can plan for easily.   Even a personal or couple exemption, you know pretty much how much you will pay.  

2.   A Progressive tax depends on your income and that can fluctuate so maybe not as much will you know how much your tax will be.    Does anyone know what their fed income tax liability will be before doing the taxes on April 14th?   I don't.   So that is a problem.   I don't have a huge philosophical reason to hate graduated income tax.   But I think it needs to be relevant and meaningful.   Having the top rate be 90% is ridiculous in my opinion.    That is legal robbery.   But no one would pay that because of all the tax loopholes that protect them.   So it is not relevant or meaningful.   There should never be a case where more than 50% of a person's income at any level should be required.   That again is legal robbery at the point of a gun or prison.   Not right in any sphere.   But I think there is an equitable way to do the progressive taxation so not a hard no on this form.   But I prefer something simpler. 

mspart

 

[jross]

Everyone should be treated equally, meaning everyone should be flat-taxed at the same rate regardless of income. 

I generally don't care that someone makes $30M annually and another makes $10K yearly. 

I do not care that some people have an easier path through generational wealth.

I care if the person making $10K a year lacks the opportunity to earn more for themself and their heirs.

Government intervention may be required to prevent monopolies of opportunity but not to swipe higher rates of one's money.

I recognize the same tax rate has a higher burden on low-income people... but this is countered through welfare services to meet basic needs.  If there is not enough tax revenue... then increase the flat tax on all people until it is.

Tax realized capital gains as income at the same flat tax rate.  

[Lipdrag]

5 hours ago, jross said:

Everyone should be treated equally

Crazy idea.  Where do you nutjobs come up with this stuff?!?  I suspect you think that "equal protection under the law" is a good idea?  Why the heck would anyone want to be a lawmaker if the laws could not be used for and against people as I see fit?  Tax laws are meant to nudge, cajole, punish, reward, and otherwise social engineer.  Taxes are certainly not meant to pay for the necessary and minimum duties of government as evidenced by our $30+ trillion dollar debt.

Sheesh, dude, grow up.

[Husker_Du]

i love you all.

but using your free time to discuss tax code is lunacy, i tell ya. 

[VakAttack]

39 minutes ago, Husker_Du said:

i love you all.

but using your free time to discuss tax code is lunacy, i tell ya. 

 

[GreatWhiteNorth]

[ThreePointTakedown]

20 hours ago, jross said:

Everyone should be treated equally, meaning everyone should be flat-taxed at the same rate regardless of income. 

I generally don't care that someone makes $30M annually and another makes $10K yearly. 

I do not care that some people have an easier path through generational wealth.

I care if the person making $10K a year lacks the opportunity to earn more for themself and their heirs.

Government intervention may be required to prevent monopolies of opportunity but not to swipe higher rates of one's money.

I recognize the same tax rate has a higher burden on low-income people... but this is countered through welfare services to meet basic needs.  If there is not enough tax revenue... then increase the flat tax on all people until it is.

Tax realized capital gains as income at the same flat tax rate.  

Any literature that advocates for your position? 

[ThreePointTakedown]

15 hours ago, Lipdrag said:

Crazy idea.  Where do you nutjobs come up with this stuff?!?  I suspect you think that "equal protection under the law" is a good idea?  Why the heck would anyone want to be a lawmaker if the laws could not be used for and against people as I see fit?  Tax laws are meant to nudge, cajole, punish, reward, and otherwise social engineer.  Taxes are certainly not meant to pay for the necessary and minimum duties of government as evidenced by our $30+ trillion dollar debt.

Sheesh, dude, grow up.

Where do you come up with your stuff? Any scholarship behind your claims? 

[jross]

13 hours ago, Husker_Du said:

i love you all.

but using your free time to discuss tax code is lunacy, i tell ya. 

It is tax season and politics season.

My property taxes have increased 30%.  My insurance costs are significantly up.  My purchase power is down 25%.  Some folks on here want the government to take progressively more and more.

[Offthemat]

Would it be better if Election Day was April 15th?

[WrestlingRasta]

38 minutes ago, jross said:

It is tax season and politics season.

My property taxes have increased 30%.  My insurance costs are significantly up.  My purchase power is down 25%.  Some folks on here want the government to take progressively more and more.

That’s rough 

[mspart]

Yep, its rough.  

The government should not be making things rough on their citizens.  There is no reason for it.   But that is what is happening all over.   We need budgets cut and spending cut so that the government is not so onerous on it's own people.   Remember, we do this to ourselves because we are the government and have voted in these nut jobs that want ever more power.   That's what the tax code enables.   More power over the governed.   Not supposed to be that way.  

mspart

Edited January 17 by mspart

[jross]

1 hour ago, ThreePointTakedown said:

Any literature that advocates for your position? 

Who knows?  That is the literature for my opinion based on personal experience and critical thought.

[ThreePointTakedown]

4 hours ago, jross said:

It is tax season and politics season.

My property taxes have increased 30%.  My insurance costs are significantly up.  My purchase power is down 25%.  Some folks on here want the government to take progressively more and more.

What are they saying the money will be used for? 

[ThreePointTakedown]

2 hours ago, jross said:

Who knows?  That is the literature for my opinion based on personal experience and critical thought.

Your argument comes down to, "Old man yells at cloud!" 

 

[WrestlingRasta]

55 minutes ago, ThreePointTakedown said:

Your argument comes down to, "Old man yells at cloud!" 

 

Just curious, but how is that?  He’s literally talking about what his personal experience is/has been recently. I can’t say I share in the same experience, but how is he just yelling at cloud. I mean damn he’s done enough of the work to know the percentages he is up or down.  Kinda seems the opposite of “old man yells at cloud”

 

(sorry Jross don’t mean to speak for you….although I guess that’s exactly what I just did) 

[JimmyBT]

Flat tax is the way.  Simple and Everyone pays their fair share. 

[JimmyBT]

Plus you don’t need to waste money on the IRS then. 

[ThreePointTakedown]

16 hours ago, WrestlingRasta said:

Just curious, but how is that?  He’s literally talking about what his personal experience is/has been recently. I can’t say I share in the same experience, but how is he just yelling at cloud. I mean damn he’s done enough of the work to know the percentages he is up or down.  Kinda seems the opposite of “old man yells at cloud”

 

(sorry Jross don’t mean to speak for you….although I guess that’s exactly what I just did) 

I'm sorry. I really shouldn't have said anything. You don't really care about my opinion because I don't care about J's opinion either. It does nothing to help or aid a discussion. Especially one so beleaguered with trolls. I should've just left it alone instead of giving you and them an opportunity to pretend to be outraged. 

[WrestlingRasta]

33 minutes ago, ThreePointTakedown said:

I'm sorry. I really shouldn't have said anything. You don't really care about my opinion because I don't care about J's opinion either. It does nothing to help or aid a discussion. Especially one so beleaguered with trolls. I should've just left it alone instead of giving you and them an opportunity to pretend to be outraged. 

Pretend to be outraged? 

[mspart]

1 hour ago, ThreePointTakedown said:

I'm sorry. I really shouldn't have said anything. You don't really care about my opinion because I don't care about J's opinion either. It does nothing to help or aid a discussion. Especially one so beleaguered with trolls. I should've just left it alone instead of giving you and them an opportunity to pretend to be outraged. 

Like you are aiding the discussion?  

mspart

[ThreePointTakedown]

1 hour ago, mspart said:

Like you are aiding the discussion?  

mspart

Pot = black! Thanks.

Don't pull a muscle patting yourself on the back.  

[JimmyBT]

29 minutes ago, ThreePointTakedown said:

Pot = black! Thanks.

Don't pull a muscle patting yourself on the back.  

Look who’s back. The non rich, tax everyone more, whoa is me boy. 

[mspart]

47 minutes ago, ThreePointTakedown said:

Pot = black! Thanks.

Don't pull a muscle patting yourself on the back.  

I can't, got tendinitis in my shoulder.  But to my point that you dismissed, where are you aiding in this discussion?  jross and a few others are but you are not, yet you complain they are not aiding this discussion.   Projection is what they call that. 

mspart