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by bingoboingo33 2932 days ago
"If we are going to massively simplify taxes, then it needs to be done on the richest"

Why? This is a built-in assumption most people seem to be operating with and I've never understood the rationale that the rich should pay more.

Does a rich person wear roads out more than a poor one? And if they do, wouldn't it be better if they paid for how much they wear the road down? As in: a percentages of miles driven on it? As in: a consumption-based tax?

Anyhow, even if you decide to work with that flawed premise, to me, if we're going to tax revenue, then "fair" translate to a very simple mathematical concept: fixed-rate.

Everyone pays 10% tax on their income. This way, the "rich" pay more, and the "poor" pay less. Because 10% of 1M is 100k and 10% of 100k is 10k.

Fairness handled.

3 comments

If you pay 10% on $100,000 a year, you have 90,000 left over. Plenty of money to live comfortably and have your needs met.

If you pay 10% on $20,000, you have $18,000. It was already hard to live on 20k, living on 18k and having your needs met is even harder.

Your examples reveal your bias. Most people don't make $100,000. And it's the "most people" that you would impact hardest with the flat tax scheme.

If you looked at the Ted Cruz tax plan from the 2016 campaign, he advocated for a 10% tax on individuals with a high standard dedication and a 16% tax on business income. Taxpayers making under $50k would have paid zero under his plan.

It is possible to do a flat tax while protecting the poor.

But, as Milton Friedman said, the tax code is complex for a reason — it gives politicians a means to exert power and reward or punish. With a simple tax code, the incentive to donate to campaigns would be reduced. The Democrat and Republican establishment both oppose simplifying the tax code because they would be killing the golden geese that keep getting them re-elected. It’s no accident that the tax code changes literally every year. Politicians are busy rewarding or punishing constituencies.

$50k -> $45k is still a much bigger impact than $1M to $900k.
It's fundamentally because:

a) most people are along for the ride that it's a moral imperative to keep all of the population happy b) the more money you have, the easier it is to make money. If you don't even that out at all you end up in a feudal society where some dude owns all the land, air, water and you're effectively his slave. Which is broadly the direction America has been going to for the last (30?) years

Fairness is very motivating for people but I don't think it's how you should base your society, I don't really think there's such a thing as fairness as a useful concept.

The real fix is a wealth tax but that is hated by both the old and the rich (look at how mansion tax policy was received in the UK). It's also kind of harder to measure than income.

If we are talking about fairness, what I described is more fair. 10% of income for a poor person can mean the difference between buying prescription drugs or going without as one example. However a rich person is going to have enough money to buy prescription drugs whether they pay 10% or not. In other words, the poor person is already at a significant financial disadvantage. So not asking them to pay taxes helps level the playing field some.