Thread: The fairest tax system

I hear a lot people say nowadays that it's time for the rich to "pay their fair share," or some variation on that statement. I find that statement extremely ironic since rich people pay not only a higher dollar amount in taxes on earned income, but also a higher percentage. Many people say that because rich people have more, they should have to pay more, and they demand this in the name of "fairness."

Since we all have equal claim on government services, it seems to me that the absolute fairest system would be one where everyone contributes the same dollar amount. Or alternately, one where we are taxed proportional to how much we use in government services. Although either of these models is undoubtedly the fairest tax system, neither are practical since the poor would be unable to pair their fair share in either scenario.

So, the next fairest system is one where people are linearly taxed according to their income instead of consumption level of government services. Instead of paying an absolute dollar amount (which again, would be the most fair), everyone pays the same percentage of their income. That way, those who have more pay more. This is called a flat tax. Even a flat tax is a compromise on fairness since those who consume the most in government services are likely those who are contributing the least, but it's a practical compromise on fairness.

I am amazed that despite the fact that the rich pay a vastly disproportionately higher amount in taxes than everyone else (talking earned income here, not capital gains), many of those who benefit from this vilify the rich for not paying even more. Much more needs to be done to help the poor in this country, but our country has a severe problem of ingratitude. How about we pause for a moment to thank the rich for shouldering much of the tax burden that we all benefit from.

Taxing the rich at a higher rate has nothing to do with making the system more fair. Yes, such a tax structure benefits those at lower income levels, and there is certainly some merit to that. But call it for what it is: compassion, charity, or even welfare. Don't distort the issue by calling it a matter of "fairness."

Originally Posted by Santos Halper

I hear a lot people say nowadays that it's time for the rich to "pay their fair share," or some variation on that statement. I find that statement extremely ironic since rich people pay not only a higher dollar amount in taxes on earned income, but also a higher percentage. Many people say that because rich people have more, they should have to pay more, and they demand this in the name of "fairness."

"I hear people say..." "Studies say...." W/o a citation, save the anonymous rhetoric. I say it's about adopting a workable system over fair, worry about fair once things get fixed. The Census Bureau started tracking poverty in 1959 and we are now at peak poverty, the top 20% hold 93% of all wealth and we have enormous disparity is wealth, so who cares about fair, let's focus on what works and low taxes as we now have quite obviously do not.

Since we all have equal claim on government services, it seems to me that the absolute fairest system would be one where everyone contributes the same dollar amount. Or alternately, one where we are taxed proportional to how much we use in government services. Although either of these models is undoubtedly the fairest tax system, neither are practical since the poor would be unable to pair their fair share in either scenario.

That's right, so practical = workable; YOU'RE THE ONE BRINGING IN 'FAIR' AND TRYING TO PROJECT THAT ONTO THE POOR, SO QUIT BEING DISHONEST. I'm for a practical system that works, as in keeps people off of welfare, grows the economy, balances teh budget, allows for reasonable creation of wealth and promotes ingenuity. What we now have with the lowest taxes in 60 years is a system that creates poverty and multi-millionaires/billioniares and yet YOU bring in the fair word to projecct into everyone else.

So, the next fairest system is one where people are linearly taxed according to their income instead of consumption level of government services. Instead of paying an absolute dollar amount (which again, would be the most fair), everyone pays the same percentage of their income. That way, those who have more pay more. This is called a flat tax. Even a flat tax is a compromise on fairness since those who consume the most in government services are likely those who are contributing the least, but it's a practical compromise on fairness.

Flat taxes would require that teh rich pay even less, so social care would be cut even further and more people would be in poverty, not that you care. Then the rich would become even more rich, which makes you happy.

I am amazed that despite the fact that the rich pay a vastly disproportionately higher amount in taxes than everyone else (talking earned income here, not capital gains), many of those who benefit from this vilify the rich for not paying even more.

I villify the government for keeping taxes low, but don't let that stop you from continually speaking for me.

Much more needs to be done to help the poor in this country, but our country has a severe problem of ingratitude. How about we pause for a moment to thank the rich for shouldering much of the tax burden that we all benefit from.

Define, "much more." Does that mean......nothing? I assume so since there was no enumerated list of things to fix. Gratitude? So the working stiff makes this money for the rich who pass it along to theur usually worthless kids and we shoudl feel grateful? Welcome to planet Earth.

Taxing the rich at a higher rate has nothing to do with making the system more fair.

And yet everything to do to make it more workable, more practical, yet you use the word, "practical" once and the word, "fair" or a version of that, 12 times. Look who really wants their version of a fair system.

Yes, such a tax structure benefits those at lower income levels, and there is certainly some merit to that.

Really? The botom 50% of all filers collecctively pay 2.25% of all fed income tax and yet a flat tax would have them pay even less? Better recheck your fuzzy math.

But call it for what it is: compassion, charity, or even welfare.

How about humanity, to use a word foreign to Republicans.

Don't distort the issue by calling it a matter of "fairness."

We're not, you are, you did so 12 times to one of a practical system. Is that a 'note-to-self?'

1. The rich pay a lower percentage of their income in tax than do the lower paid tax payers.

2. The rich, including corporations, enjoy more government services than the non-rich. The defense budget is mostly for the benefit of corporations. The police are there to protect the haves from the have nots.

When you take the false statements out of your post there isn't much left.

Originally Posted by stonehorse

1. The rich pay a lower percentage of their income in tax than do the lower paid tax payers.

2. The rich, including corporations, enjoy more government services than the non-rich. The defense budget is mostly for the benefit of corporations. The police are there to protect the haves from the have nots.

When you take the false statements out of your post there isn't much left.

+1 aaaaaaaaaaaaaaaaaaaaaa

Originally Posted by Santos Halper

I hear a lot people say nowadays that it's time for the rich to "pay their fair share," or some variation on that statement. I find that statement extremely ironic since rich people pay not only a higher dollar amount in taxes on earned income, but also a higher percentage. Many people say that because rich people have more, they should have to pay more, and they demand this in the name of "fairness."

Since we all have equal claim on government services, it seems to me that the absolute fairest system would be one where everyone contributes the same dollar amount. Or alternately, one where we are taxed proportional to how much we use in government services. Although either of these models is undoubtedly the fairest tax system, neither are practical since the poor would be unable to pair their fair share in either scenario.

So, the next fairest system is one where people are linearly taxed according to their income instead of consumption level of government services. Instead of paying an absolute dollar amount (which again, would be the most fair), everyone pays the same percentage of their income. That way, those who have more pay more. This is called a flat tax. Even a flat tax is a compromise on fairness since those who consume the most in government services are likely those who are contributing the least, but it's a practical compromise on fairness.

I am amazed that despite the fact that the rich pay a vastly disproportionately higher amount in taxes than everyone else (talking earned income here, not capital gains), many of those who benefit from this vilify the rich for not paying even more. Much more needs to be done to help the poor in this country, but our country has a severe problem of ingratitude. How about we pause for a moment to thank the rich for shouldering much of the tax burden that we all benefit from.

Taxing the rich at a higher rate has nothing to do with making the system more fair. Yes, such a tax structure benefits those at lower income levels, and there is certainly some merit to that. But call it for what it is: compassion, charity, or even welfare. Don't distort the issue by calling it a matter of "fairness."

I see that you are new to this forum and that this was your first post. Your post was very well thought-out (logical) and relayed a message that is difficult to disagree with.

Don't be discouraged by the trolls and their knee-jerk responses: They have nothing constructive to say, and it's usually best to ignore them.

Originally Posted by stonehorse

1. The rich pay a lower percentage of their income in tax than do the lower paid tax payers.

On capital gains, yes, and I'm all for raising the capital gains tax rate. On earned income, no way. The rich pay the lion's share of tax revenue in this country.

Originally Posted by stonehorse

2. The rich, including corporations, enjoy more government services than the non-rich. The defense budget is mostly for the benefit of corporations. The police are there to protect the haves from the have nots.

When you take the false statements out of your post there isn't much left.

We all benefit equally from defense spending.

Even if police services were exclusively for the benefit of the rich (which is a laughable statement), how much do you think our country spends on police department budgets compared to medicare?

Originally Posted by stonehorse

1. The rich pay a lower percentage of their income in tax than do the lower paid tax payers.

Absolutely false.

2. The rich, including corporations, enjoy more government services than the non-rich...

It is quite unfair to lump individual "rich" people with corporations, which are taxed entirely differently than individuals. How about comparing apples to apples and oranges to oranges, okay?

The defense budget is mostly for the benefit of corporations.

Absurd. The defense budget is for the benefit of the nation as a whole.

The police are there to protect the haves from the have nots.

Also absolutely false: The police protect society as a whole, not merely certain classes of wealth.

When you take the false statements out of your post there isn't much left.

I agree with this. Your post was filled with untruths and absurdities, and once you remove these there is really nothing of substance left at all.

Originally Posted by Santos Halper

The rich pay the lion's share of tax revenue in this country.

We all benefit equally from defense spending.

Yes, the rich pay more income tax than the non-rich. But they take in a hell of a lot more money.

But when all taxes are counted the less you make (as long as you are above the poverty line) the greater percentage of your income goes for taxes.

We do not all benefit equally from defense spending.

The war in Iraq is a good example. When you take all the BS out of our reasons for invading it comes down to economic advantage for the oil industry and connected corporations.

Compare the cost of our military operations in Latin America since 1900 to the benefit of cheaper bananas for the masses.

Most of our military actions have been to enforce favorable trade deals, even though the public is quick to buy the fiction from the government that we are protecting the homeland.

Much of our government, including regulatory agencies is devoted to the well being of corporate America. And it is the rich who mostly benefit from corporations.

They should pay their fair share. But I see their advantage in making the general population subsidize their profits.

Originally Posted by Santos Halper

I hear a lot people say nowadays that it's time for the rich to "pay their fair share," or some variation on that statement. I find that statement extremely ironic since rich people pay not only a higher dollar amount in taxes on earned income, but also a higher percentage. Many people say that because rich people have more, they should have to pay more, and they demand this in the name of "fairness."

The rich should pay more because they invariably own government-issued privileges.

In economic speak, privilege is a special right. A privilege allows you to do what others or forbidden to do. Privileges are monopolistic, they discourage or eliminate competition; some privileges allow the holder to shift risks/costs to third parties (society). The unearned income from privilege is given a special name (rent) to help economists differentiate that type of income from earned incomes. Rent is by definition never earned, it is simply the result of having special rights (privileges). Because the bulk of the rich individuals income comes from this unearned monopolistic rent, it is indisputable that the rich should pay more taxes.

Since we all have equal claim on government services, it seems to me that the absolute fairest system would be one where everyone contributes the same dollar amount.

We don’t all have equal claim on government services…who told you that? That is a lie. The overwhelming beneficiary of government spending is the land title owner (land titles are special rights issued by government - aka, privileges). When government builds new infrastructure, such as a new highway, it is the nearby landowners who pocket the value of that spending. The efficiencies created by the new highway do not result in the minimum wage being increased, no, wage earners are no better off… but the nearby landowner very well could see his wealth increased a hundred fold, making him an instant millionaire…all thanks to that government spending.

So, the next fairest system is one where people are linearly taxed according to their income instead of consumption level of government services.

There is no next fairest system…the only fair system is to make the privileged pay for their special monopolistic rights they receive from government. Only the privileged benefit from government spending, they pocket all of the income generated by government infrastructure and services, they alone should pay taxes…they should pay for what they get from government.

I am amazed that despite the fact that the rich pay a vastly disproportionately higher amount in taxes than everyone else (talking earned income here, not capital gains), many of those who benefit from this vilify the rich for not paying even more.

Although the rich pay the bulk of income taxes, they have mechanisms by which they shift the burden of those taxes to those on the lower rungs of the economic ladder. Google “tax burden shifting” and start reading.

Taxing the rich at a higher rate has nothing to do with making the system more fair.

In a sense this is right. Even if privilege is abolished through the taxation of unearned rent income, there would still be those who would have more wealth, they would still be referred to as rich. That is why I don’t support taxing the “rich”. I only support taxing the privileged…it just so happens that under the current system, where privilege is so prevalent, it is only the privileged who are rich.

You can learn more about the benefits of taxing privilege here: http://en.wikipedia.org/wiki/Geoist

Originally Posted by Santos Halper

I hear a lot people say nowadays that it's time for the rich to "pay their fair share," or some variation on that statement. I find that statement extremely ironic since rich people pay not only a higher dollar amount in taxes on earned income, but also a higher percentage. Many people say that because rich people have more, they should have to pay more, and they demand this in the name of "fairness."

Their percentage is lower than many middle class taxpayers. Most of the wealthy folks in this country pay at a rate of ~20%. Remember; no one actually pays at the top marginal rates, and capital gains rates are criminally low. This isn't even factoring in payroll taxes, which the very wealthy contribute almost nothing through.

Since we all have equal claim on government services,

In theory, in practice government services are skewed in favor of the wealthy. Welfare for the very poor does not even remotely compensate for the massive, massive wealthfare in this country.

it seems to me that the absolute fairest system would be one where everyone contributes the same dollar amount.

Even Adam Smith, father of the neoclassical school of economics, understood that wasn't fair at all. $5000 means a lot more to someone making $20,000 a year than it does to someone making $200,000 a year. Not only is it a larger portion of that person's income, it might also be the difference between eating three meals every day and going hungry sometimes. No such burden would be placed on the person making $200,000 a year.

Or alternately, one where we are taxed proportional to how much we use in government services. Although either of these models is undoubtedly the fairest tax system, neither are practical since the poor would be unable to pair their fair share in either scenario.

Actually they would probably be able to manage in the latter scenario, since the wealthy receive far more in government services than the poor. The problem with this is that there is no good way to do that. What's the point in charging the recipient of welfare for the welfare? It's as absurd as the present practice of taxing social security benefits.

So, the next fairest system is one where people are linearly taxed according to their income instead of consumption level of government services. Instead of paying an absolute dollar amount (which again, would be the most fair), everyone pays the same percentage of their income. That way, those who have more pay more. This is called a flat tax.

Again, it becomes a regressive tax because 15% of a person making very little may well prevent them from paying for the very essentials of life, while someone making huge amounts of money would merely have to delay additional luxuries.

Even a flat tax is a compromise on fairness since those who consume the most in government services are likely those who are contributing the least, but it's a practical compromise on fairness.

It is unfair in practice, because of differences in impact.

I am amazed that despite the fact that the rich pay a vastly disproportionately higher amount in taxes than everyone else (talking earned income here, not capital gains),

Why not talk capital gains? They receive a disproportionately larger portion of their income as capital gains. Are you proposing that people receive no benefit from income from capital gains? That they cannot spend that money as freely as any other sort of income? Why do you not make mention of payroll taxes?

In practice, the rich pay comparatively little as a percentage of their actual income; payroll taxes are an insignificant portion of their total income, capital gains rates are criminally low, and they get a whole pile of deductions that apply to most of them but to comparatively few people in the poorest of brackets. After all, if you're having trouble making ends meet on $20,000 a year, you probably aren't paying a mortgage on a house, buying energy efficient appliances, installing solar panels on the house, or making very many donations to charity, or any of a number of other easily exploitable deductions or credits. The person making $150,000 a year is in much worse shape for taxes than the person making $350,000 a year, who is in an even worse position than the person making $1.5 million a year. The person pulling in $100,000 a year in salary, for example, pays payroll taxes on almost all of that, has a relatively high top marginal rate, and probably isn't receiving most of that as long-term capital gains. He's got comparatively few tax shelters, and while he may be getting the mortgage deduction, he can't make best use of many other easily exploitable deductions.

Remember; no one pays the top marginal rate as their effective tax rate.

many of those who benefit from this vilify the rich for not paying even more.

A fair tax code would have the people who own 40% of the nation's wealth paying 40% of the nation's taxes. Anything other than that is unfair to either the rich or the poor. Right now, the wealthy do not even come close to paying their share.

Much more needs to be done to help the poor in this country, but our country has a severe problem of ingratitude. How about we pause for a moment to thank the rich for shouldering much of the tax burden that we all benefit from.

Why should anyone thank them for shoving the tax burden down the ladder onto the middle class?