Tax Reform Thread

[KrazyHorse]

I don't think you have this right.

That's because you have no understanding of economics.

[Kidlicious]

Why would I do something stupid like that? Given that the vast majority of federal spending goes to the military and transfer payments to seniors, only a **** would see increasing tax revenues flowing to the federal government as an efficient way to boost national savings (and therefore investment).

Federal spending has nothing to do with it when there is a federal deficit. Raising taxes means borrowing less money that comes from national savings anyway.

[KrazyHorse]

Income tax plus VAT is better than income tax for the same total amount collected. Cutting income taxes is better than cutting VAT. Ascribing movement is Canadian unemployment rates to the drop in GSTis silly.

[Kidlicious]

So what's the definition of a regressive tax, Kid?

Is the flat tax regressive?

Do you know what the word 'flat' means?

[Kidlicious]

What the **** do you think people ****ing save for, you twits? To roll around in giant stacks of money like Uncle ****ing Scrooge?

You seriously don't know why people save?

[Hauldren Collider]

What the **** do you think people ****ing save for, you twits? To roll around in giant stacks of money like Uncle ****ing Scrooge?

You seriously don't know why people save?

wut

Is this a new low for Kid or have I just not been around here long enough?

[KrazyHorse]

The latter.

[flash9286]

They pay an equal percentage of their consumption. Savings are deferred consumption. Eventually the rich person or their descendants will pay the tax.

Currently, there is a huge tax disadvantage to saving relative to consumption. Income which is saved (outside a retirement account) is taxed at regular rates, and then returns on these savings are also taxed (at various rates, depending on the type of returns, yet another unnecessary distortion). Let M be a given individual's marginal tax rate on earned income. This means that an individual has to choose, at the margin, between consuming (1-M) now and consuming some value in the future whose NPV is LESS than (1-M) (by an amount equal to the NPV of the taxes he pays on the appreciation of his savings).

Any tax on capital gains or interest distorts at the margin of intertemporal choice.

Is this true, if a income tax only taxed returns on capital that are above the the returns due to the time value of money, would there be a distortion?

[Drake Tungsten]

That's because you have no understanding of economics.

True, but he's sadly looking like a genius in this thread thanks to the contributions of Ben, Sloww, and Kiddy.

[Ben Kenobi]

Yes I get what flat tax means. Rich people pay more than poor people. You should be all over it kid since you are into this whole wealth-redistribution thing.

[giblets]

Yes I get what flat tax means. Rich people pay more than poor people. You should be all over it kid since you are into this whole wealth-redistribution thing.

Flat tax = everyone pays the same percentage.

Here's an example of a flat income tax:
Krazyhorse makes $200,000 and is taxed $20,000
Ben Kenobi makes $20,000 and is taxed $2000

As you can see, both are taxed 10% of their income. Therefore it is a flat income tax. If you made a graph with percentage on the y axis and income on the x axis there would be a flat line.

That's how the term is used. You can go by your own definition if you want but you'll look (more) retarded.

[Dauphin]

The only truly 'uniform' tax would have everyone pay the exact same amount.

Poll tax. Great idea.

[KrazyHorse]

Is this true, if a income tax only taxed returns on capital that are above the the returns due to the time value of money, would there be a distortion?

Yes, of course there would be. This would be a tax on risk-taking.

[KrazyHorse]

Poll tax. Great idea.

It is the least distortionary tax (even less than tax on unimproved land value)

[Dauphin]

It is the least distortionary tax (even less than tax on unimproved land value)

It also killed Maggie.