A flat tax rate across the board would be much better. But the best of all would be user fees. Everyone pays for what they use. If you don't pay you don't use. If you don't use you don't pay. That would be the "fairest" possible system of all, wouldn't it? I mean why pay for someone else to use something.... that's not very "fair" at all. Its also not "fair" to take one person's money and give it to another person, just because they have less of it. Why work at all if you can't even prosper from the benefits of your labor, from your own property? This is exactly why socialism could never work. No incentive.... and with a welfare system... the same thing. Its exactly why so many welfare recipients refuse to go out and get jobs. Why work for the same amount you can mooch for?

I'll give you all the simplified version of why socialism does not work.

If a government heavily taxes the wealthy, it is much more than a "re-distributing" exercise than you may think. Society is based on incentive, you work hard, you earn money. You don't work hard, you don't earn money. It is simple, and it works. The problem with socialism, and wealth disdribution in general, is not in its intentions. It is with its inibility to carry on in the long term what it is designed to do. If working class people get money that they do not work for, why is it an incentive to work harder? And if the wealthy are taxed so heavily that no matter how much they work, their money gets taken away and re-distributed, why bother earning that money when it will only get taken away? This is the fundemental flaw in socialism, and by no means is it an exhaustive reason or explaination. But it is widely known that when the rich are taxed too heavily, and the poorer are given more than their due, it causes major problems in the economy. Workers are then not willing to work hard because they do not need to. The rich no longer have the money to invest, and the rich then no longer have the money to collect taxes from. It is a viscious cycle, and there are many examples in history to look at.

A couple of practical points from all the posts above:

1. Flat tax with government giving a base salary to everyone might work, except there are a lot more poor people than there are rich people. I'd be very curious if the math works out.

2. The "tax on success": While true in an absolute sense, there's no evidence I've ever seen that our tax system actually discourages work. That's because your MARGINAL rate goes up, not your overall rate. If you make $200,000, you pay the same amount on your first $30,000 in earnings as someone who earns $30,000 total. Very few people stop working because their NEXT dollar will have a bigger tax bite taken out of it.

3. Flat tax in general. The only thing that makes a flat tax attractive to me is the elimination of loopholes. Otherwise it's simply a transfer of the tax burden from those most able to pay to those least able to pay. And if you take steps to avoid that, what's the point of changing the system?

4. User fees. This won't work for two main reasons. One, broad programs such as defense where the benefit to all of us is clear, but none of us actually "use" it. So you'd need taxes to pay for that.

Two, there's a broad category of stuff that benefits society by being available to some even if you don't use it directly. Bus service is a great example. You don't ride the bus, so why should you subsidize bus service with your tax dollars? Simple. More buses mean fewer cars on the road and less pollution, for starters, as well as less need for expensive new roads. Also, you benefit from the work performed by people too poor to own a car who ride the bus to work every day. Such people wouldn't necessarily be able to afford the full cost if they had to pay user fees. Also, you benefit by the bus being there in case your car's in the shop — and it wouldn't necessarily be there if it had to rely on user fees, because you're not a regular rider.

Essentially, society benefits by creating various transportation options that allow goods and people to move efficiently from one place to another.

Finally, one way or another we'd have to help the poor and those unable to care for themselves. That's a pure cost that cannot be addressed by user fees.

The problem with a flat tax is that it treats labor, salary, and below-minimum tip wages as identical while leaving capital gains untaxed. That's not fair--it sucks.

Wages should be untaxed, salary flat-taxed, and capital gains indexed.

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I shall continue to be an impossible person as long as those who are now possible remain possible.
Hypercrites

Take 2001, as it is the most recent. What I see is the top 1% of wage earners paid 34% of the total income tax to the Government. And the top 50% of wage earners paid 96% of the total income tax to the government.

That means that the bottom 50% of wage earners only paid 4% of the total income tax to the government. Yet the bottom wage earners pull at least 50% of the government's resources, and arguably much more. I'm not a flat tax fan, but I think we've gone too far with these redistributions.

Any of our left leaning forum go'ers want to explain how 1/2 the population should enjoy greater than 50% of what the government provides and yet only put in 4% into the pot of $?

Yes, b/c the top 20% of the populations posesses approx. 83% of this nations wealth. The bottom 20% posess about .4%. The top can afford the tax burden, the bottom can't. I posted the link to this data on another thread. You can look it up if you want to.

-Demosthenes

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"A people that values its privileges above its principles soon loses both."
- Dwight D. Eisenhower

to spend what you earn or accumulate, then you will need to keep one hand on your wallet whenever a politician needs a scapegoat or some "painless" solution to everyone else's problems that involves large amounts of the money you earn.

No offense Dem or Spork. I like both of you guys a lot. I'm just having some fun here.

With Finnish taxes, frankly my government doesn't have much to take from me.

No wait...

But at least you guys have all of those beautiful nordic women to look at.....

Fine, even if I buy your theory that the people at the top should pay more because they have more, I still don't understand the strong imbalance. The bottom 50% are still getting 12+ times the amount of services back than what they paid for. I don't buy that.

Anyone else want to take a stab?