Budget Cut Protestors - Help Me Understand

[Egbert]

Yes, you. I see your post #76

"I'm firmly middle class and according to my last paystub, I had quite a bit taken out in federal taxes, Medicare, and some by some ******* named FICA. "

[giblets]

You're not just lowering the rates for the top earners, but also for people like me. As to how it helps, it generates additional tax revenue by closing loopholes and exemptions. Does this mean some people would be more in absolute terms in taxes? Yes. But those people aren't all poor - they fall in every socio-economic category. Same for the people who would pay less. Honest rich people and middle classers without a house and kids (ie, myself) would end up paying less, for instance.

Lowering the rate does not cause loopholes to go away. I don't see any good reason why the tax rate and closing loopholes shouldn't be treated as separate issues. If you're saying that closing loopholes would allow a reduction of the tax burden for honest people, that's true, but it doesn't have anything to do with whether the tax system should be flat or progressive.

Perhaps, but there's also nothing intrinsically fair about a third party (ie, the government) making blanket redistributive decisions, either.

So fairness has nothing to do with tax rates? Then shouldn't it be based on something else, like human welfare?

[David Floyd]

Lowering the rate does not cause loopholes to go away. I don't see any good reason why the tax rate and closing loopholes shouldn't be treated as separate issues. If you're saying that closing loopholes would allow a reduction of the tax burden for honest people, that's true, but it doesn't have anything to do with whether the tax system should be flat or progressive.

There's not a chance in hell of closing the loopholes under our current system. Too many highly influential people benefit from them. That said, there's little chance of closing them in any system, nor is there much chance of actually materially changing the current system. I admit to all of that.

My point is that a flat tax creates a fair system, and a method to keep tax revenue at our above current levels under a flat tax would be to eliminate loopholes and exemptions.

So fairness has nothing to do with tax rates? Then shouldn't it be based on something else, like human welfare?

Whoever said fairness has nothing to do with tax rates? The US government has an obligation to create fair systems, including tax systems. My argument is that a flat tax is fundamentally more fair than a "progressive", or graduated, tax system.

Your original point was that there is little fairness involved in income, when income is in many cases a result of things outside of my control, such as upbringing and genetics. My point was, fine, even if that's true (which I'm not sure I'm ready to concede, anyway), there is ALSO little fairness in the government attempting to redress those issues through redistributing the wealth. In other words, just because Person A is smarter than Person B, and thus has a higher income potential, doesn't make it fair to penalize Person A for Person B's relative stupidity through a higher tax rate.

[giblets]

There's not a chance in hell of closing the loopholes under our current system. Too many highly influential people benefit from them. That said, there's little chance of closing them in any system, nor is there much chance of actually materially changing the current system. I admit to all of that.

My point is that a flat tax creates a fair system, and a method to keep tax revenue at our above current levels under a flat tax would be to eliminate loopholes and exemptions.

When you say "flat tax" are you specifically referring to a general sales tax?

Whoever said fairness has nothing to do with tax rates? The US government has an obligation to create fair systems, including tax systems. My argument is that a flat tax is fundamentally more fair than a "progressive", or graduated, tax system.

Your original point was that there is little fairness involved in income, when income is in many cases a result of things outside of my control, such as upbringing and genetics. My point was, fine, even if that's true (which I'm not sure I'm ready to concede, anyway), there is ALSO little fairness in the government attempting to redress those issues through redistributing the wealth. In other words, just because Person A is smarter than Person B, and thus has a higher income potential, doesn't make it fair to penalize Person A for Person B's relative stupidity through a higher tax rate.

If someone receives a lot of income because they were born talented, in what sense do they deserve it? I think it's massively unfair to begin with, because I think the only thing that makes you deserve income is the effort you put in. If the after-tax distribution is generally more proportional to how hard people work than the before-tax distribution I would consider that a more fair distribution. I think a tax code can reasonably be called "fair" if the after-tax distribution is at least as fair as the before-tax distribution.

However I think it would be better to focus on human welfare, rather than fairness.

[David Floyd]

When you say "flat tax" are you specifically referring to a general sales tax?

No, I am referring to a flat income tax. The number generally bandied about in the US is a 17% rate across all incomes (and with loopholes and exemptions closed).

If someone receives a lot of income because they were born talented, in what sense do they deserve it?

False argument. No one receives a lot of income because they were born talented. Hell, we are all born talented at something. People receive large incomes when they leverage their talents into something marketable. Raw talent with no effort is worthless.

I think it's massively unfair to begin with, because I think the only thing that makes you deserve income is the effort you put in.

True, which is what massively talented people who receive large incomes generally do - that is, put effort in. That said, I would add that your income should not be directed derived from effort - your effort has to be in a marketable area, and your income has to be driven by supply and demand. That's why baseball players make so much money - they are massively talented, worked hard to leverage their talent in a marketable way, and there aren't that many people who can perform at their level in a very in demand field.

If the after-tax distribution is generally more proportional to how hard people work than the before-tax distribution I would consider that a more fair distribution. I think a tax code can reasonably be called "fair" if the after-tax distribution is at least as fair as the before-tax distribution.

In other words, as long as everyone ends up making roughly the same, it's fair. That's not a system that I want to live in or have any part of, and I think history vindicates me on that one.

[MikeH]

Hell, I'm firmly middle class, and a 17% flat tax sounds pretty good to me.

17%?! I'm sure you would like that. Would need to be closer to 30% (maybe higher) in the UK/US to achieve similar tax yields I think.

[Egbert]

17%?! I'm sure you would like that. Would need to be closer to 30% (maybe higher) in the UK/US to achieve similar tax yields I think.

I would absolutely love to pay 17% flat tax, at least until the national treasury went broke and had to jack the tax rates right up.
I would also also like 30% but I much prefer 17%.

[Dauphin]

I find this "if tax loopholes were closed" caveat hilarious. In part because all tax systems will have inherent loopholes, and in part because a large chunk of the tax loopholes aren't a product of the (in this case US) tax system in isolation.

[giblets]

No, I am referring to a flat income tax. The number generally bandied about in the US is a 17% rate across all incomes (and with loopholes and exemptions closed).

Okay, that makes your "if loopholes are closed" caveat retarded. I thought you were bundling closing loopholes with a flat rate because you were claiming we needed a completely different system in order to effectively close loopholes. Closing loopholes in the current income tax system does not depend on slashing the rates paid by top earners.

False argument. No one receives a lot of income because they were born talented. Hell, we are all born talented at something. People receive large incomes when they leverage their talents into something marketable. Raw talent with no effort is worthless.

People are not born equally talented in any relevant sense, such as their ability to receive income. Genetics is a very big factor in the income people get.

True, which is what massively talented people who receive large incomes generally do - that is, put effort in. That said, I would add that your income should not be directed derived from effort - your effort has to be in a marketable area, and your income has to be driven by supply and demand. That's why baseball players make so much money - they are massively talented, worked hard to leverage their talent in a marketable way, and there aren't that many people who can perform at their level in a very in demand field.

Putting effort into something you want to do, rather than a marketable area, can't reasonably be called 'work' so I don't see the relevance of this comment.

In other words, as long as everyone ends up making roughly the same, it's fair. That's not a system that I want to live in or have any part of, and I think history vindicates me on that one.

That's not even remotely what I said.

[Hauldren Collider]

17%?! I'm sure you would like that. Would need to be closer to 30% (maybe higher) in the UK/US to achieve similar tax yields I think.

Around 20% in the US. Much less if you get rid of Medicare....

[Hauldren Collider]

I find this "if tax loopholes were closed" caveat hilarious. In part because all tax systems will have inherent loopholes, and in part because a large chunk of the tax loopholes aren't a product of the (in this case US) tax system in isolation.

Reagan managed to do it in the 80s. Since then, congress has added them back in at a rate of more than one per day.

[giblets]

Reagan managed to do it in the 80s. Since then, congress has added them back in at a rate of more than one per day.

How much have the Republicans controlled congress since then?

[Hauldren Collider]

How much have the Republicans controlled congress since then?

Every congressmen is guilty of it. They're a form of earmark. Republicans have banned them in the house now, however. Took them long enough.

[Fake Boris]

I could come up with a long, scathing rant about how retarded you are for thinking that anything in that paragraph even remotely resembles intelligent thought, but I already did that in English class last year and you are much less interesting to talk to than my classmates, so I'll summarize:

Please, post here what you wrote for your English class.

[MrFun]

I truly don't understand the violent and vehement protests to budget cuts throughout Europe and the United States.

Where were the protests during unsustainable spending and budget deficits? That's right, nowhere to be found. But I digress. I understand their anger may be directed at those they perceive to have gotten us into the economic mess - ie, the rich - although that anger is likely misdirected, as it was, in most cases, Big Government that allowed it to happen. But in any case, regardless of the CAUSE, don't these people understand that there has to be a SOLUTION? And don't they understand that the solution has to involve spending less money?

I just don't get it. Look at Portugal, where their legislature recently rejected the austerity budget. Don't they understand what will happen? Look at Britain, with the massive protests the other day over the budget cuts. Do they think continued deficit spending is sustainable at that level?

So please, someone, help me understand the mentality of these people, and what it is they think they are accomplishing.

Find a way to balance the budget without putting ALL of the burden on only the working and middle classes. It's been long past due for the upper class to finally take up their share of this burden.