Fiscal Cliff -O- Rama!!

[Omerta+ 1,206]

Why is a flat tax not an option ? All across the board everybody, every purchase, every loan. everything equal for everybody.

[SteVo+ 3,702]

Why is a flat tax not an option ? All across the board everybody, every purchase, every loan. everything equal for everybody.

 

As a math major, I believe that's the fairest way to do it. But the reality is that increasing taxes affects the wealthy a lot less than it affects the middle class. Any flat tax that's easy on the middle class won't get enough revenue to cover government expenses, and any flat tax that generates enough revenue will cripple the middle class. So you've got to find that happy medium.

[Omerta+ 1,206]

As a math major, I believe that's the fairest way to do it. But the reality is that increasing taxes affects the wealthy a lot less than it affects the middle class. Any flat tax that's easy on the middle class won't get enough revenue to cover government expenses, and any flat tax that generates enough revenue will cripple the middle class. So you've got to find that happy medium.

 

I dont know I have thought about it before and that would be true if everybody bought the same thing. However dont you think the wealthy would buy more ? I mean the cost of a Maserati and a Toyota is quite a bit. The houses they buy, restaurants, hobbies, just about everything they do is more expensive. I think it would at least come close to evening out with a flat rate. I mean even income tax reporting 1,000,000 and taxing 10% and then doing it to 30,000 would not seem even but the middle class guy pays 3000 and the rich guy pays 100,000. I think it would probably be our best bet.

 

I am all for rebuilding the middle class but I think that punishing the wealthy for being wealthy is just as stupid as punishing the middle class for not being wealthy.

[Guest Phailadelphia]

A flat tax would cripple both the federal government and the economy.

[Omerta+ 1,206]

A flat tax would cripple both the federal government and the economy.

 

Care to elaborate. The Kennedy administration thought it was a good idea.

[OSUViking 505]

As a math major, I believe that's the fairest way to do it. But the reality is that increasing taxes affects the wealthy a lot less than it affects the middle class. Any flat tax that's easy on the middle class won't get enough revenue to cover government expenses, and any flat tax that generates enough revenue will cripple the middle class. So you've got to find that happy medium.

 

^This; you can charge a lesser rate at the expense of revenue or a higher rate at the expense of the Middle Class' well being.

Edited December 6, 2012 by Vikingfan465

[OSUViking 505]

However dont you think the wealthy would buy more ? I mean the cost of a Maserati and a Toyota is quite a bit. The houses they buy, restaurants, hobbies, just about everything they do is more expensive.

 

Trickle-down economics didn't work back in the 30s, and it won't work now (or ever).

[Omerta+ 1,206]

Trickle-down economics didn't work back in the 30s, and it won't work now (or ever).

 

That is not trickle down economics though. We are talking about personal spending not job creating.

[OSUViking 505]

Care to elaborate. The Kennedy administration thought it was a good idea.

 

This is purely a scenario. Assume that the income tax on the middle class is 23%, and the income tax on the upper class is 29%. With a flat tax rate, you can either move down to that 24% or you can move up to the 34%. The problem with moving down is that you generate far less revenue. Contrary to what modern Republicans think, levying less taxes does NOT lead to more revenue in the long run. Now, let's assume that the government decides to move up to 29%. If the majority of the middle class already spends close to 100% of their income to get by (mostly true), how will raising their income tax by six percentage points help out? The government will make the revenue it needs, but it will absolutely cripple the middle class. You can argue all you want that splitting it even would help, but you still run into the whole problem of not getting nearly as much revenue as you would receive with a progressive tax system.

[Omerta+ 1,206]

^This; you can charge a lesser rate at the expense of revenue or a higher rate at the expense of the Middle Class' well being.

 

This article really kind of says what I was thinking without me having to type. it. It is a flat tax solution that would work much better than what we have now and anything on the table imo.

 

Flat Tax

 

It is written by a libertarian so he thinks both parties have their head up their asses and knows his party is not getting the show so there really is not much of a bias in it.

[OSUViking 505]

That is not trickle down economics though. We are talking about personal spending not job creating.

 

The idea that the rich will spend their money at all for the benefit of the economy (which spending it personally would do) is essentially the philosophy of trickle-down economics. The sad truth is that they don't just spend their money; rather, they put it in banks and let the interest rates balloon their wealth or they invest it overseas, where they stand to gain even more money. In a world where the rich were nice people, it would work; however, we live in a world where the rich notice a big fat pay check and then drool at the thought of turning it into even more money.

[OSUViking 505]

 

It is written by a libertarian so he thinks both parties have their head up their asses and knows his party is not getting the show so there really is not much of a bias in it.

 

(I'll get to reading it in a second).

 

He's not biased because he's a libertarian? Literally everything written about politics or economics is biased in some way, and libertarians are not an exception.

 

EDIT: I don't think he's advocating a flat income tax. I think he's supporting the FairTax system; he repeatedly mentions a "flat consumption tax", which is basically what the FairTax system is.

Edited December 6, 2012 by Vikingfan465

[Omerta+ 1,206]

(I'll get to reading it in a second).

 

He's not biased because he's a libertarian? Literally everything written about politics or economics is biased in some way, and libertarians are not an exception.

 

EDIT: I don't think he's advocating a flat income tax. I think he's supporting the FairTax system; he repeatedly mentions a "flat consumption tax", which is basically what the FairTax system is.

 

True all are biased, but he is not advocating conservative versus liberal which is almost always where this train heads. F4E will say something then Phail will and it will turn into a big ball of entertaining so I wanted to throw this our before we get flooded with both. Oh how I love these threads.

 

That said flat tax is what he is advocating he is just focusing more on capital gains instead of breaking down into the actual economic impact on households but what he said is advocating for flat tax.

 

as to the trickle down economics. They may not spend it to benefit the middle class but when they spend it on themselves they are helping everyone anyway. And seeing as how almost half our tax revenue is from the rich I think they do spend at least a little here.

[OSUViking 505]

"Spend it on themselves" < They don't even do this, in the sense that you're talking about. They don't go out and buy luxurious products; they just go and put all of their money into a bank or do something with their money that will simply generate more. It doesn't help anyone but themselves.

 

Also, I see no mention of any flat tax rate other than a flat consumption tax in that link.

[Guest Phailadelphia]

As a general rule of thumb, libertarians are rarely correct in their economic theories and assessments.

 

Ngata, I'll elaborate more as soon as I get a few free minutes.

[Omerta+ 1,206]

As a general rule of thumb, libertarians are rarely correct in their economic theories and assessments.

 

Ngata, I'll elaborate more as soon as I get a few free minutes.

 

Being honest man, none of us know what is correct and is not. Unless you are about 60 years old you have never seen economic theories that work that are a product of legislation.

 

People love to throw Clinton out there. That is completely unrelated to anything he did. He had no war. He had the internet BOOM thought his entire term. And in general the world was at peace and the global economy was great. None of those are on him he just reaped the benefits. The last time legislation was passed that helped and our economy benefited was before any of us were born.

 

No one can say Liberatarian policies don't work for a few reasons. A.) We haven't tried them. B.) we have no baseline for successful policies. C.) Innovation is all but gone because we are stuck in a vacuum where those who have the power are happy and those who don't cant do anything about it.

[Omerta+ 1,206]

"Spend it on themselves" < They don't even do this, in the sense that you're talking about. They don't go out and buy luxurious products; they just go and put all of their money into a bank or do something with their money that will simply generate more. It doesn't help anyone but themselves.

 

Also, I see no mention of any flat tax rate other than a flat consumption tax in that link.

 

I will be honest with you, I dont know personally. I am not rich and have never been rich. The civilian contract I am no now is the most money I have ever made and am still not rich.

 

That said I do not see rich cats drive around in a Nissan. I mean they dont live in shitty houses or eat at Spangles. I just dont see how they sit on their money and live that lavish lifestyle.

[OSUViking 505]

I will be honest with you, I dont know personally. I am not rich and have never been rich. The civilian contract I am no now is the most money I have ever made and am still not rich.

 

That said I do not see rich cats drive around in a Nissan. I mean they dont live in shitty houses or eat at Spangles. I just dont see how they sit on their money and live that lavish lifestyle.

 

They obviously buy lavish items, big houses, fancy cars, and the like. My point is this: we're not going to get the majority of the big income earners in the US to just stop what they are doing (*cough* not spending it as much as it'd be needed for the benefits to shine through*cough*), ever. Believing that the rich will suddenly learn the general ethical code of helping out the less fortunate is frankly believing in the impossible.

[Guest Phailadelphia]

Being honest man, none of us know what is correct and is not. Unless you are about 60 years old you have never seen economic theories that work that are a product of legislation.

 

People love to throw Clinton out there. That is completely unrelated to anything he did. He had no war. He had the internet BOOM thought his entire term. And in general the world was at peace and the global economy was great. None of those are on him he just reaped the benefits. The last time legislation was passed that helped and our economy benefited was before any of us were born.

 

No one can say Liberatarian policies don't work for a few reasons. A.) We haven't tried them. B.) we have no baseline for successful policies. C.) Innovation is all but gone because we are stuck in a vacuum where those who have the power are happy and those who don't cant do anything about it.

 

Libertarian economic theory usually lends itself to the Austrian theory of economics, which dismisses central banks, fiat money, and government intervention into the economy. All this despite the fact we have solid evidence that no central bank and the gold standard are much more harmful in a capitalist economy. That's why I say they are generally incorrect.

 

I'm still reading up on this flat tax stuff, and I my have been wrong. I made a couple of incorrect assumptions about it, though from what I can tell so far it really wouldn't change much aside from creating further income inequality.

 

But I will say this: a flat tax combined with the elimination of tax deductions and mortgage deductions would probably adversely affect the middle class. The elimination of the mortgage tax deduction is particularly notable because housing is one of the primary drivers of our economy. It also reduces after-tax income of the middle class, who do the majority of the consumption in the economy. The extremely wealthy are more prone to sitting on or investing their money rather than spending it. Middle class earners don't have that privilege.

Edited December 7, 2012 by Phailadelphia

[OSUViking 505]

I will be honest with you, I dont know personally. I am not rich and have never been rich. The civilian contract I am no now is the most money I have ever made and am still not rich.

 

That said I do not see rich cats drive around in a Nissan. I mean they dont live in shitty houses or eat at Spangles. I just dont see how they sit on their money and live that lavish lifestyle.

 

They obviously buy lavish items, big houses, fancy cars, and the like. My point is this: we're not going to get the majority of the big income earners in the US to just stop what they are doing (*cough* not spending it as much as it'd be needed for the benefits to shine through*cough*), ever. Believing that the rich will suddenly learn the general ethical code of helping out the less fortunate is frankly believing in the impossible.

[blotsfan 2,112]

Rich people aren't bad for not spending all their money. They're smart. Do you try to blow through everything you have, or do you save it up?

[Omerta+ 1,206]

Rich people aren't bad for not spending all their money. They're smart. Do you try to blow through everything you have, or do you save it up?

 

Yet people act like they should be penalized for being successful. I dont get it.

[OSUViking 505]

Rich people aren't bad for not spending all their money. They're smart. Do you try to blow through everything you have, or do you save it up?

 

There's a huge difference between the rich and the middle class. The middle class can't save up their money, because they need to spend large portions of their income to sustain their families. The rich? They can spend only fractions of their income and still have an insane amount left over. Also, I'm not trying to say what they are doing is stupid; rather, I'm simply saying the rich [in unison] have never and will never be as generous with their money that trickle-down economics is actually a feasible plan.

[OSUViking 505]

Yet people act like they should be penalized for being successful. I dont get it.

 

It's really just for fairness. Why put the tax burden on the income brackets that need their money the most? It makes complete sense to shift a bit of the weight over the rich, who have large stockpiles of money and the ability to pay a little bit more in taxes without suffering at all.

 

Note: I'm not advocating Europe-level upper class income rates.

Edited December 7, 2012 by Vikingfan465

[Maverick 791]