[besson3c]

I know it really sounds emotionally satisfying to say that we should treat everybody as equals and force people living in poverty to contribute to taxation, but when you think about this from a more rational perspective, it is a dumb idea IMHO.

Having a lot of people living in poverty is expensive. It puts a strain on our medical system, on our police force, and on many aspects of society in general - both economically, and culturally.

Now, before the very right leaning people in here whip off a very reactionary response about how much they hate government handouts, note that I'm not condoning this. However, the thing is, people are not all equal. Some are smarter than others, some are emotionally more mature than others, some are more driven than others. The same Republicans/Libertarians who seem to want a flat tax would probably get very reactionary about the thought of socialism. Isn't one of the central premises of socialism to treat everybody as equals?

If we are not all equal, why should our tax system try to treat us accordingly?

[BRussell]

Remember that most flat tax proposals have a large standard exemption, which protects the poor. A flat tax would probably hit the middle class hardest, and reduce taxes on the wealthy. But I don't really see how it would increase poverty.

[besson3c]

I guess I ought to learn more about how the standard exemption would work.

[mduell]

A flat national sales tax with an annual rebate would be progressive (heck, you'd even make money if you spent less than $rebate_amount divided by tax_rate%) and cheaper/easier to collect than any income tax scheme (nearly every merchant is already doing it for state sales taxes).

[mac128k-1984]

The problem with any tax laws now are special interests and lobbyiests. If we take the flat tax at its simplest form it does work. Provided that exceptions are not written into it. Just take a look at what congress did the last time it overhauled the tax laws. Way more complicated and less deductions for us middle class folks.

[Chuckit]

Originally Posted by besson3c 

Isn't one of the central premises of socialism to treat everybody as equals?

Actually, the central premise of socialism is that people are not equal, but ought to be. Socialism's response is to try and make people equal by redistributing wealth (e.g. taking more from the rich). There's a difference between treating people as equals (applies to both a flat tax and capitalism) and advocating harsher treatment for the more economically viable (applies to both a tiered tax system and socialism).

[ebuddy]

Originally Posted by besson3c 

I know it really sounds emotionally satisfying to say that we should treat everybody as equals and force people living in poverty to contribute to taxation, but when you think about this from a more rational perspective, it is a dumb idea IMHO.

... defer to Chuckits response.

Having a lot of people living in poverty is expensive. It puts a strain on our medical system, on our police force, and on many aspects of society in general - both economically, and culturally.

It doesn't help the fact that the average person in poverty is not suited to understand the 896 page tax code nor do they have a wealth of tax attorneys at their disposal to maximize deductions. The current tax code protects income to a little over $17,000.00 yet I've not seen a flat tax proposal that doesn't protect income to at least $33,000.00. Worse, the current number of loopholes allows a massive amount of hiding, sheltering, and/or reporting less income under the current tax structure.

Now, before the very right leaning people in here whip off a very reactionary response about how much they hate government handouts, note that I'm not condoning this. However, the thing is, people are not all equal. Some are smarter than others, some are emotionally more mature than others, some are more driven than others. The same Republicans/Libertarians who seem to want a flat tax would probably get very reactionary about the thought of socialism. Isn't one of the central premises of socialism to treat everybody as equals?

While I grant you socialism cannot work for the reasons you cite, flat taxes in fact do. They're spreading like wildfire throughout Europe and have had a profoundly positive affect. The difference is not necessarily attempting to equalize humanity so much as giving them all a little more of what they actually earn. It removes penalties for marriage, death, investing, and saving. Conversely, most of the arguments I've seen against it are; "it hurts the poor while helping the rich" which is a reactionary response often from the very left-leaning. Not to project on you, but I found the following curious;

"A flat tax is a dumb idea... poverty = bad..."
"I guess I ought to learn more about how the standard exemption would work."

If we are not all equal, why should our tax system try to treat us accordingly?

Because concepts like taxation without representation, double taxation, and assumed guilt are all contrary to what we'd consider ideal governance. In fact, I think these are mentioned somewhere for a good reason.

[Doofy]

A flat tax with no allowance/excemption is the only fair tax.

The bottom end of the market with relation to income vs cost of living would sort itself out very, very quickly to cater for the folks in relative poverty.

[ebuddy]

Originally Posted by Doofy 

A flat tax with no allowance/excemption is the only fair tax.

The bottom end of the market with relation to income vs cost of living would sort itself out very, very quickly to cater for the folks in relative poverty.

I'd like to take this moment to offer kudos for your auto-sig. I'm not sure I can handle this much stimuli @ 6:22am.

[Doofy]

.

Originally Posted by ebuddy 

I'd like to take this moment to offer kudos for your auto-sig. I'm not sure I can handle this much stimuli @ 6:22am.

[macintologist]

Fairtax is the best

Look it up on your favorite search engine

[smacintush]

A flat tax or FairTax don't have to be a panacea. Either are a far more fair choice than the absurdly complicated and unfair mess we have now.

And don't fool yourself, the poor and middle class pay LOTS of taxes now in the form of higher costs passed down from unfairly taxed who provide us with our products and services. They more you gouge them the more they gouge us. Also, historically it has been shown that more people feel they are being taxed fairly the likelier they are to not try to cheat their way out of them.

[Chuckit]

Originally Posted by smacintush 

And don't fool yourself, the poor and middle class pay LOTS of taxes now in the form of higher costs passed down from unfairly taxed who provide us with our products and services.

I don't believe this is anything but an urban myth. If people decide to charge $50 a pop for a product, it's because they think that's how much the market can bear, not because they'd really like to charge $35 but there are just so many darn taxes. Nobody is going to go, "Whoa, I got money from the government. Now, do I take this extra money and treat it as more revenue, or do I decide to basically give the money away to my customers out of the goodness of my heart? I think I'll do the second one!"

[smacintush]

Originally Posted by Chuckit 

I don't believe this is anything but an urban myth. If people decide to charge $50 a pop for a product, it's because they think that's how much the market can bear, not because they'd really like to charge $35 but there are just so many darn taxes. Nobody is going to go, "Whoa, I got money from the government. Now, do I take this extra money and treat it as more revenue, or do I decide to basically give the money away to my customers out of the goodness of my heart? I think I'll do the second one!"

(I'm not sure what the bolded sentence is referring to, can you help a brutha out?)

No, I think that what you say is true to a point, but I believe as the taxes get more ridiculous they start pushing prices up as much as they feel they can get away with. No one is going to go, "Whoa, my taxes have gone up AGAIN. I can either raise prices a percent or two to help offset that, or I can just bend over and take it. I think I'll do the second one!"

[tie]

Originally Posted by Doofy 

A flat tax with no allowance/excemption is the only fair tax.

I think this is right. Everyone, regardless of income, should have to pay say $20,000 -- no more and no less -- to the federal government every year. Flat. Simple. Fair.

[smacintush]

Originally Posted by tie 

I think this is right. Everyone, regardless of income, should have to pay say $20,000 -- no more and no less -- to the federal government every year. Flat. Simple. Fair.

Oh please, why must you twist it so?

A flat tax based on a percentage is perfectly fair.

[mac128k-1984]

Originally Posted by tie 

I think this is right. Everyone, regardless of income, should have to pay say $20,000 -- no more and no less -- to the federal government every year. Flat. Simple. Fair.

That's the dumbest thing I've heard all day. So if a poor soul is only making 21,000 annually they owe the fed 20,000 never mind state taxes and social security.

As smacintush stated its on a percentage, not a flat amount

[BRussell]

Originally Posted by smacintush 

A flat tax based on a percentage is perfectly fair.

But that's coddling the poor and unfair to the hard-working people of the world. Why should Paris Hilton have to pay more? I agree with tie, a flat amount, and off to the workcamps with you if you can't pay! It worked for hundreds of years in Europe before people started getting all uppity during the Renaissance, Reformation, and Enlightenment.

[Doofy]

Originally Posted by smacintush 

A flat tax based on a percentage is perfectly fair.

Yep, that's what I meant.

And what's more, there's no need for it to be above 20%.

And while you're at it, you should get rid of that thing where US citizens are charged federal income tax by the US if they live outside the US in a non-tax location (such as Monaco or Andorra).

[tie]

Originally Posted by smacintush 

A flat tax based on a percentage is perfectly fair.

And I suppose you think movie ticket prices should be set as a percentage of your income, too. That would be more fair.

[smacintush]

Originally Posted by tie 

And I suppose you think movie ticket prices should be set as a percentage of your income, too. That would be more fair.

No, actually I think that you should have to file forms full of personal information at the theater to prove (under penalty of perjury) your income and those who have more should pay more and those who have less should pay less or get in free…cuz that's fair.

[olePigeon]

Taxes should be based on luxury purchases. Essential items such as groceries (not fast food), petrol, and basic housewares should be tax free. Your pay cheque should be relatively tax free up to $75,000. There should then be heavy taxes on luxury items such as fast food, TVs, third and fourth vehicles, sports cars, jewelry, cosmetics, inheritance, earnings on investments other than retirement, foreign accounts, bonuses, etc.

People in the poverty line really can save up money even if they can only hold a job at a McDonald's since their pay cheques would be untaxed. Basic needs such as groceries (bread, flour, meats, milk, cheese, etc.) would be tax free. If someone is frugal, they can still save money even at low wage jobs.

Middle Class citizens can also easily save money and invest for the future if they are also not so spendswift. Again, the basic needs are tax free. Since you can make up to $75,000 a year with little to no taxes taken out of your pay cheque (they'd still take out for health insurance, union dues, etc.), you can really save up that money without giving a good chunk of it to the government because you're just past that tax bracket.

Same goes for rich people. They can buy all the luxuries they want, but they'll be taxed for it. Careful management of your money would mean you wouldn't have to change your lifestyle. And as always, the first $75,000 is tax free as are your basic needs.

Works out for everyone.

[smacintush]

Originally Posted by BRussell 

But that's coddling the poor and unfair to the hard-working people of the world. Why should Paris Hilton have to pay more? I agree with tie, a flat amount, and off to the workcamps with you if you can't pay! It worked for hundreds of years in Europe before people started getting all uppity during the Renaissance, Reformation, and Enlightenment.

What are you on about?

[olePigeon]

Not to mention that more people with more money in their pockets, means more people can afford health insurance; which means cheaper health insurance for everyone.

[olePigeon]

Originally Posted by smacintush 

What are you on about?

He's making fun of the flat tax system.

[smacintush]

Originally Posted by olePigeon 

He's making fun of the flat tax system.

I got that part, I'm not THAT thick.

[Doofy]

Originally Posted by olePigeon 

Taxes should be based on luxury purchases. Essential items such as groceries (not fast food), petrol, and basic housewares should be tax free. Your pay cheque should be relatively tax free up to $75,000. There should then be heavy taxes on luxury items such as fast food, TVs, third and fourth vehicles, sports cars, jewelry, cosmetics, inheritance, earnings on investments other than retirement, foreign accounts, bonuses, etc.

People in the poverty line really can save up money even if they can only hold a job at a McDonald's since their pay cheques would be untaxed. Basic needs such as groceries (bread, flour, meats, milk, cheese, etc.) would be tax free. If someone is frugal, they can still save money even at low wage jobs.

Middle Class citizens can also easily save money and invest for the future if they are also not so spendswift. Again, the basic needs are tax free. Since you can make up to $75,000 a year with little to no taxes taken out of your pay cheque (they'd still take out for health insurance, union dues, etc.), you can really save up that money without giving a good chunk of it to the government because you're just past that tax bracket.

Same goes for rich people. They can buy all the luxuries they want, but they'll be taxed for it. Careful management of your money would mean you wouldn't have to change your lifestyle. And as always, the first $75,000 is tax free as are your basic needs.

Works out for everyone.

You have no clue.

All that will happen is that the rich folks will go live somewhere else, taking their jobs (employee positions they own and service positions they use) with them. It's called a "brain drain".

[BRussell]

Originally Posted by smacintush 

What are you on about?

Bit too much coffee this morning.

[tie]

It's not really a coincidence that many of the same people who were strongly in favor of the Iraq war are strongly in favor of a "flat" tax. Stupid people with poor judgement and no expertise.

The idea that one method of collecting taxes is intrinsically more "fair" than another is ridiculous. That's the point I was making in my earlier post. A flat percentage tax versus a flat fee tax versus a progressive percentage tax -- different Pareto-optimal ways of collecting revenue, but there is no way you can argue that the flat percentage is more fair than the other possibilities.

Originally Posted by Doofy

A flat tax with no allowance/excemption is the only fair tax.

Say it often enough and it becomes true? Like, "Can't we all just agree that homosexuals should be discriminated against?" You can't argue this case at all. And appealing to trickle-down economics only discredits you.

[Chuckit]

Originally Posted by tie 

Say it often enough and it becomes true? Like, "Can't we all just agree that homosexuals should be discriminated against?" You can't argue this case at all. And appealing to trickle-down economics only discredits you.

Trickle-down economics really has nothing to do with the fairness of a flat tax. The question "Is this fair?" is entirely separate from "Does this screw me over?" In a fair system, people who fail to meet the mark do lose out. Somebody coddling me and giving me special benefits will always turn out better for me than a fair system where I'm treated the same as everyone else.

[shinji]

Originally Posted by olePigeon

Taxes should be based on luxury purchases. Essential items such as groceries (not fast food), petrol, and basic housewares should be tax free. Your pay cheque should be relatively tax free up to $75,000. There should then be heavy taxes on luxury items such as fast food, TVs, third and fourth vehicles, sports cars, jewelry, cosmetics, inheritance, earnings on investments other than retirement, foreign accounts, bonuses, etc.

The fast food industry is one of the nation's largest employers and has immense buying power. They have a significant effect on the local economies in many areas. You wouldn't want to abusively tax them.

Taxing inheritance is absurd. That is money that has ALREADY been taxed when the parent earned it, why should it be taxed again at a higher rate just because the parent dies? Offshore trusts would still get around the issue for the truly wealthy, but the upper middle class and mildly wealthy people would be affected.

And as far as investments "other than retirement" ...why would you want to make it more difficult for people to invest in American businesses?

Originally Posted by olePigeon

People in the poverty line really can save up money even if they can only hold a job at a McDonald's since their pay cheques would be untaxed. Basic needs such as groceries (bread, flour, meats, milk, cheese, etc.) would be tax free. If someone is frugal, they can still save money even at low wage jobs.

If there were a flat tax that protected the interests of the poor with exemptions, deductions, and what have you...then this would be a non-issue.

[shinji]

Originally Posted by tie

It's not really a coincidence that many of the same people who were strongly in favor of the Iraq war are strongly in favor of a "flat" tax. Stupid people with poor judgement and no expertise.

I was completely against the Iraq War and still am. I didn't vote for Bush either

But I do support a flat tax, or any tax system that results in me paying less money to the government. I just don't believe raising and creating new excise taxes, which are the gist of olePigeon's plan, are the way to achieve that.

[Doofy]

Originally Posted by tie 

It's not really a coincidence that many of the same people who were strongly in favor of the Iraq war are strongly in favor of a "flat" tax. Stupid people with poor judgement and no expertise.

So, you just called the finance ministers of the following countries "stupid people with poor judgement and no expertise":

Estonia, Lithuania, Latvia, Russia, Serbia, Ukraine, Slovakia, Georgia, Romania, Macedonia, The Czech Republic, Iceland, Kyrgyzstan, Mongolia, Hong Kong, Saudi Arabia, The United Arab Emirates, Bahrain, Somalia, Nigeria, Rwanda, Uruguay, Guyana, The Bahamas and Tonga.

Not to mention some folks over at The Economist:

http://www.economist.com/printeditio...ory_ID=3861190

I suppose your arguments are entirely based on so-called "social justice"? Yep, thought so.

If you don't realise that within a couple of weeks of a flat tax being implemented across the board the whole economic structure at the poor end of society would readjust itself to compensate then I suggest you go educate yourself.

Originally Posted by tie 

The idea that one method of collecting taxes is intrinsically more "fair" than another is ridiculous.

Right, so if we tax people according to hair colour it'd be no less fair than the current income-related progressive system? You're talking crap.

[Andy8]

Flat tax works very well here in Hong Kong thanks very much

[ebuddy]

Originally Posted by shinji 

I was completely against the Iraq War and still am. I didn't vote for Bush either

What?!? You mean you don't fit the neat little box tie has fashioned for you out of his infinite wisdom? Fear not my friend, if he doesn't like your argument he'll just not respond or respond as someone else entirely.

[Big Mac]

Originally Posted by besson3c 

I know it really sounds emotionally satisfying to say that we should treat everybody as equals and force people living in poverty to contribute to taxation, but when you think about this from a more rational perspective, it is a dumb idea IMHO. . . .

If you think a flat tax means everyone's taxed equal amounts, you don't understand the concept of a flat tax. Please read up on the concept before posting an ignorant opinion about it.

[Mithras]

Originally Posted by BRussell 

But that's coddling the poor and unfair to the hard-working people of the world. Why should Paris Hilton have to pay more? I agree with tie, a flat amount, and off to the workcamps with you if you can't pay! It worked for hundreds of years in Europe before people started getting all uppity during the Renaissance, Reformation, and Enlightenment.

I remember, sometime in high school, reading Marilyn vos Savant (the so-called genius with an idiotic column in an idiotic Sunday insert) claiming precisely this -- that the fairest tax would be a flat dollar amount. I can't find a reference to it (this excerpt is the closest), but I can still feel the raw amazement I felt upon reading it.

[Dork.]

One interesting thing about the tax system in America (maybe it's shared by other countries, I don't know) is that the tax code is used not just to generate revenue for the government, but also to enforce certain behaviors in the population. We give people an incentive to buy property, have children, buy hybrid cars, and give money to charities through the use of tax credits and deductions.

Any change to the tax code would have to preserve at least some of these programs, or else much of the population will never buy into it. The home mortgage deduction, in particular, would need to be preserved in some fashion. When buying a house, people are making decisions that they'll have to live with for a good chunk of their life -- if the beneficial tax treatment of mortgage interest were to go away, then all that planning essentially gets flushed down the toilet, but they're still stuck holding the 30-year mortgage.

Once you start adding these deductions and credits back into the tax system, could it really be considered flat anymore?

[dcmacdaddy]

I am somewhat conflicted over the issue. While I think a fixed-percentage income tax would be better than what we have now and easier for individuals to calculate--with everyone paying the same percentage rate and NO exemptions/deductions--I think a fixed-percentage consumption tax would be an easier "sell" to the American public as a whole--with every item subject to the consumption tax, even food and other necessities.

With a fixed-percentage income tax, I would want every revenue calculated as income and taxed accordingly--every transaction from selling a used car to selling Chrysler would require the "seller" to pay the fixed-percentage tax on the revenue derived from the sale. So, if the fixed-percentage tax rate is 15%, when you sell your used Honda, you would pay to the government 15% of the money received as the tax on the income from the sale of the car. Or, if your stock portfolio increases 10% in value, you would pay 15% of that 10% to the government. You would keep 85% of all the revenue you took in during that tax year. And, if make your payments throughout the year whenever you conduct revenue-generating transactions then you would owe nothing at the end of the tax year. Penalties for not filing the paperwork and paying the tax for every commercial transaction should be severe.

That's my preference. But, I would settle for a consumption tax if was applied universally--no items would be free from the tax--and if it could be implemented sooner rather than later.

[CRASH HARDDRIVE]

Originally Posted by dcmacdaddy 

With a fixed-percentage income tax, I would want every revenue calculated as income and taxed accordingly--every transaction from selling a used car to selling Chrysler would require the "seller" to pay the fixed-percentage tax on the revenue derived from the sale.

Terrible idea that would kill the poor. The rich would merely go elsewhere to buy things, and use their mobility to hide their income and avoid the taxes, especially as excessive taxes make it well worth their while to do so.

Businesses rely on tax-free transactions in order to purchase merchandise profitably. Will we eliminate that? That would kill small businesses. If not, why wouldn't the modestly well-off simply set up corporations and buy most of what they want tax free through them? Before you even think, "But some system would be in place to enforce against that..." stop. No it wouldn't.

So, if the fixed-percentage tax rate is 15%, when you sell your used Honda, you would pay to the government 15% of the money received as the tax on the income from the sale of the car.

It's absurd and laughable that anyone could effectively enforce taxation on all private transactions. Compliance would be close to nil.

You'd have to turn the entire country into an IRS- run police state to enforce such a mess, and do away with a lot of freedoms than can be used to effectively skirt the taxes.

People also talk a lot of smack about taxing investments willy-nilly, without a clue of the actual minefield that would be. You simply can't change all the rules mid-stream on people that have investments based on favorable tax advantages, without grossly undermining confidence in the entire market system.

[tie]

Originally Posted by Chuckit 

Trickle-down economics really has nothing to do with the fairness of a flat tax.

I agree, I was responding to Doofy's trickle-down arguments.

Originally Posted by Doofy 

So, you just called the finance ministers of the following countries "stupid people with poor judgement and no expertise":

Estonia, Lithuania, Latvia, Russia, Serbia, Ukraine, Slovakia, Georgia, Romania, Macedonia, The Czech Republic, Iceland, Kyrgyzstan, Mongolia, Hong Kong, Saudi Arabia, The United Arab Emirates, Bahrain, Somalia, Nigeria, Rwanda, Uruguay, Guyana, The Bahamas and Tonga.

That's right, I called the finance minister of Rwanda a stupid person. I hope that doesn't offend you!

Originally Posted by ebuddy 

What?!? You mean you don't fit the neat little box tie has fashioned for you out of his infinite wisdom? Fear not my friend, if he doesn't like your argument he'll just not respond or respond as someone else entirely.

Amazing how neat little boxes don't fit everybody inside; my worldview is flipped upside down. But don't you fit in that box?

[Doofy]

Originally Posted by dcmacdaddy 

With a fixed-percentage income tax, I would want every revenue calculated as income and taxed accordingly--every transaction from selling a used car to selling Chrysler would require the "seller" to pay the fixed-percentage tax on the revenue derived from the sale. So, if the fixed-percentage tax rate is 15%, when you sell your used Honda, you would pay to the government 15% of the money received as the tax on the income from the sale of the car.

But you've already paid tax on that money when you earned it to buy the Honda in the first place.

Plus, this would eliminate one of the main advantages of flat tax - simplicity. You wouldn't be able to eliminate all those IRS workers whose salaries are sucking up your tax dollar.

[dcmacdaddy]

Originally Posted by Doofy 

But you've already paid tax on that money when you earned it to buy the Honda in the first place.

Plus, this would eliminate one of the main advantages of flat tax - simplicity. You wouldn't be able to eliminate all those IRS workers whose salaries are sucking up your tax dollar.

You paid tax on the money you earned to buy the car. NOw you would be paying tax on the money earned when selling it to someone else.

As for complexity, my suggestions would still require some tax workers but there would be a need for whole lot less tax workers. I don't think there is any tax plan that can eliminate the government infrastructure necessary to oversee/administer the tax system.

[Doofy]

Originally Posted by dcmacdaddy 

You paid tax on the money you earned to buy the car. NOw you would be paying tax on the money earned when selling it to someone else.

Unless it's a rare Ferrari which actually appreciates, you don't earn money when you sell your car - you get back some of the money you put into it.

I suppose a discussion about depreciation and fixed assets would be lost on you?

[dcmacdaddy]

Originally Posted by Doofy 

Unless it's a rare Ferrari which actually appreciates, you don't earn money when you sell your car - you get back some of the money you put into it.

I suppose a discussion about depreciation and fixed assets would be lost on you?

No, it would not be lost on me. But depreciation and fixed assets are accounting concepts not relevant to a discussion on flat taxes. If I am going to support an implementation of flat taxes then, as I said previously, I would want it to apply to persons and corporation and I would want all deductions/exemptions to be done away with. That includes deductions/exemptions for depreciation of capital goods. So, from a stand-point of valuing one's assets depreciation of fixed assets is relevant. But, from the stand-point of revenue taxation--with revenue equaling funds being received in exchange for a good or service--the idea of depreciation is not relevant.

In essence, every time a financial transaction takes place I want the "seller" in the transaction to be taxed on the monies (or value of the goods) received in exchange for the item "sold". So, in my example above, the person selling the Honda has received monies that should be taxed at the flat-tax rate. If they received five donkeys instead they should be taxed at a going rate that estimates the value of what five donkeys are worth.

[Doofy]

Originally Posted by dcmacdaddy 

In essence, every time a financial transaction takes place I want the "seller" in the transaction to be taxed on the monies (or value of the goods) received in exchange for the item "sold". So, in my example above, the person selling the Honda has received monies that should be taxed at the flat-tax rate. If they received five donkeys instead they should be taxed at a going rate that estimates the value of what five donkeys are worth.

But any money they get for selling something they've already paid for isn't income (unless they make a profit on the item).

Sounds like you want a sales tax, not an income-related flat tax.

What you're proposing would seriously screw up all sorts of things. Like the housing market, for starters - nobody would ever move house.

And you're effectively taxing people twice:

I earn money (let's say $100k), government takes cut. Say 20%.
So, 80k to me, 20k to government. Fair enough.
I buy a Porsche for 80k.
I later sell the Porsche for 50k. Government takes 20%.
So, 40k for me, 10k for government. No thanks!

The 50k I receive from the sale of the Porsche is still part of the original 100k. But since you've taxed me twice on it, you've effectively had 30% instead of 20%.

I say: Once the government has had their original cut, they can keep their grubby hands off the rest. Giving them money only encourages them.

[dcmacdaddy]

Originally Posted by Doofy 

But any money they get for selling something they've already paid for isn't income (unless they make a profit on the item).

Sounds like you want a sales tax, not an income-related flat tax.

What you're proposing would seriously screw up all sorts of things. Like the housing market, for starters - nobody would ever move house.

And you're effectively taxing people twice:

I earn money (let's say $100k), government takes cut. Say 20%.
So, 80k to me, 20k to government. Fair enough.
I buy a Porsche for 80k.
I later sell the Porsche for 50k. Government takes 20%.
So, 40k for me, 10k for government. No thanks!

The 50k I receive from the sale of the Porsche is still part of the original 100k. But since you've taxed me twice on it, you've effectively had 30% instead of 20%.

I say: Once the government has had their original cut, they can keep their grubby hands off the rest. Giving them money only encourages them.

That's why I keep using the term revenue and not income. I don't want an income tax with all the associated accounting burdens of calculating what is or is not income. Revenue is anything financial that is received by another person. So, yes, the person who paid a flat tax on their income (salary) then has to pay a tax on the monies received when they sell an item purchased with funds from the taxed income.

And plenty of people would move houses. If you buy a house for $300,000 and five years later you sell it for $350,000 you would get taked the fixed percentage of that $350,000 that comes in (or whatever the gorss sum is after paying fees, etc). The problem is if you try to buy and sell a property in a short period of time, or in an economically depressed location, where the value of the property has not increased more than the fixed-percentage tax rate; Then yes, someone would be taking a loss to sell a house. Which means more people might stay where they are if they live in homes that do not appreciate. But this proposal would not bring an end to the housing market.

[dcmacdaddy]

Ultimately, I see this discussion as away to come up with a simplified funding solution for the government that is identical for ALL individuals with a corresponding system that is identical for ALL businesses. I am more interested in an equal tax rate being applied to everyone than how specifically that tax is applied (as an income/revenue tax, sales/consumption tax, financial transaction tax). What is most important to me is that every person pays the same amount as every other person to fund the government services they want/need and every business pays the same amount as every other business to fund the government services they want/need.

Certainly, there are ways to avoid paying taxes in the various plans--for a sales/consumption task one could buy products oversees--but there are also ways to remedy that; We already have a Customs division at immigration that checks to see what items and type of financial instrument are brought into the country by those arriving for a visit or returning home. Plus, the government could require that any business shipping items into the United States from overseas include the sales/consumption tax into the price of the item. No addition of tax = no right to conduct business in the United States. Will there be some transactions that that slip through the cracks and go un-taxed, certainly. But it can be kept to a minimum.

[Graviton]

A flax tax however is a brilliant idea.

Linseed f***s people up.

[Doofy]

Originally Posted by dcmacdaddy 

And plenty of people would move houses. If you buy a house for $300,000 and five years later you sell it for $350,000 you would get taked the fixed percentage of that $350,000 that comes in (or whatever the gorss sum is after paying fees, etc). The problem is if you try to buy and sell a property in a short period of time, or in an economically depressed location, where the value of the property has not increased more than the fixed-percentage tax rate

No, the problem is that by the time the government has taken their cut of the proceeds of the old house, you won't have enough cash to upgrade to the new house. It'd skew the housing market something stupid.

Plus, of course, you'd have all house prices jump by the tax amount instantly (i.e. $100k to $125k @ 20%), further pushing them out of the reaches of first-time buyers.

Not to mention that a tax on revenue instead of profit would dramatically slow business expansion. A business currently avoids taxes by popping the profits into expansion... ...which sees more jobs available, which in turn generates more taxes (income-related). You tax on revenue and this expansion would go away.

Basically, the whole economy would go tits-up.