OK, here's "reply # 2"
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Originally posted by blackmercedes
Why? Well, the abatement of poverty and the reduction of crime benefits rich people greatly. Safety is worth lots.
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You reduce crime by ENFORCING sensible laws, not by having the government play "Robin Hood", stealing from the rich and giving to the poor, just to appease them so they don't come steal from you themselves! The government steals it, or the bum down the street steals it, what's the difference?
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But, let's talk about flat taxes.
We take a flat tax rate of 15%. Wow! Sounds low to me!
But, is it fair that a single mom making $8000 a year has to pay $1,200 in taxes?
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YES, it is! If she was only capable of making $8,000 a year, then she had no business having a kid in the first place! Why would it be MY responsibility to support her kid? You should have no more children than you can AFFORD! Go ahead, call me insensitive...because when it comes to forced redistribution of MY money, I AM insensitive.
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Youch! Well, we need an income excemption to allow the lowest income working poor to keep the money they have. Why? Shouldn't they pair their fair share?
Yes. But, taxing them makes little sense. That $1,200 we collect from them isn't "wasted" money in the economic sense, as most working poor spend every dime they earn. Every single penny is returned into the economy. That's a good thing.
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A perfectly good reason to eliminate income tax altogether and have a national sales tax...That way EVERYONE'S money works this way!
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So, suppose we make an income excemption of $12,000. And tax everything at 15% above that. Do we have a flat tax? Nope. Take the Jones earning $30,000 a year, and the Smiths earning $50,000 a year.
The Jones' pay the 15% on a taxable income of $18,000, the amount above the cut-off. That's $2,700 or 9% of gross.
The Smiths pay the 15% on a taxable income of $38,000. Their tax bill is $5,700. That's 11.4%. Our flat tax became a progressive tax. And most think the scenario I just presented is perfectly fair, except possibly those earning in the top percentiles.
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That's why there should be NO CUTOFF!
Anyway, if you're above the cutoff, you're taxed on the WHOLE amount, not just the amount above the cutoff...
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A consumption based tax, with no income taxes? Well, it does make sense on many levels. It allows savings to be excempt from taxes until they are spent, allowing people with higher incomes to defer taxes until required. One problem is it's regressive nature. It hurts the working poor. Why? It's been said here...
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What's with this "working poor" term that you keep using, anyway? Is that to imply that "wealthy people" do not work for what they have? That's a favorite little catch-phrase among the "tax-the-rich, they can afford it" crowd, isn't it!
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Well, working poor people have no choice but to spend close to 100% of their income on goods and services. Under these models, generally the poor pay MORE tax based on a percentage of their income, and only a few people see that as fair at all. Most low income people cannot choose to consume less, as just existing takes all of what they make.
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I tend to have that problem myself, and I see it as great incentive to find a way to make MORE money! NOT to look for a "break" or a "handout"!
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Mike, do you know many working poor?
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Yes. Me. And I'm WORKING to change that! NOT BEGGING!
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I know hundreds of working poor families, and very few are "lazy." Many are recent immigrants and have barriers to "earning a higher income" that extend far beyond "just work harder." It will take a few generations for them to raise their incomes through better education for their children, etc. They need things like affordable post-secondary schooling and access to health care in order to raise themselves up. Not punishments for being poor.
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Educating oneself to be able to work SMARTER, not HARDER, is the key.
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Low income people are not failures. This comment really pisses me off.
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I consider it QUITE a failure on my part when I don't make enough money...and I seek a solution within MYSELF and MY ABILITIES, not from someone else.
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Some of the hardest working, most honourable people I know make little money.
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I know that to be 100% true...But does that mean someone else who works JUST AS HARD, or harder, or smarter, should be forced to give up money that they earned? Why the double standard?
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Tax reform, in favour of putting more money into the pockets of high income earners, is almost always presented as finally making low income families "pull their weight, get off their asses and work for a living, and stop sponging off the rest of us."
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Yes, actually! And who do you think provides the JOBS to the "working class" that politicians love to dangle the "tax-break" carrot in front of? High income earners do! Poor people certainly aren't' going to hire anyone! When high income people keep more of their money, they invest it in business ventures, expansion, stocks, etc....all of which creates MORE jobs! If all the wealth were redistributed and there were no rich people, who do you think would be able to afford to employ ANYONE?
Education solves poverty--Robin Hood tactics do not. If you redistributed ALL of the money in every capitalist country in the world, so that EVERYONE had EXACTLY the same amount of money, within 10 years or so, the situation would return to almost exacty the way it was before you did so. Almost all of those who are rich now, would be so again. Almost all of those who are poor now, would be so again. Some people are willing educate themselves and work to make a successful life for themselves and their family, some are not.
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Okay, there are people that take advantage of social programs. It's going to happen, no doubt. Just like corporate CEO's that steal from shareholders and pension funds. Playing the system is not unique to poor people.
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True, very true...So why do we send the CEOs to jail, while we keep giving the poor handouts, giving them little incentive to STOP abusing the system?!
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There needs to be balance. A progressive system that builds in fairness, while allowing some incentive is what we need in our capitalist-based society.
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A "progressive" tax system and "fairness" are oxymorons.
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And I agree with consumption taxes, but exclude the requirements of life, including things like food, children's clothing, books, home utility payments, etc. But wait!! By doing that, we just made our flat consumption tax progressive...
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No...NO exemptions to a consumtion-based tax!!...If you start giving exemptions, then it will end up right back where we are now, with MOUNTAINS of red tape and rules and deductions and allowances and loopholes and hundreds of thousands of pages of undecipherable tax code.
...to be continued....
:p
Mike