As you point out, the rich already have plenty of advantages. So why do they need preferential tax rates?
Indeed, if the taxes are so onerous for the rich, they do have the option of refusing to accept any more money.
This is my view. Life isn’t fair, rich people tell poor people that all the time. Goose, gander, and all that.
No it’s not “something”, it’s one of the dumbest sites I have ever seen. A flat tax is one with a single tax rate. Once you figure out what your income is, looking up your tax in a table is easy even if it there are graduated rates.
What’s hard is determining your income. If you own a rental property to you just add count all the rent as Income? of course not, you deduct the cost of improvements, and depreciation of the building, and a bunch of other stuff. For companies with employees, and capital equipment, and accounts receivable, and other actual real world things there is a lot of work that needs to be done to get at that figure you plug into that inane calculator.
The basic idea would have to be like this:
- Income up to $A is not taxed.
- Income after $B is taxed at the flat-tax amount of X%
- From $A to $B, the tax rate increases linearly from 0% to X% but cumulative (think calculus)
So lets assume A is 20K, B is 50K and X is 30%
$0 - $20,000 no tax
$30,000 tax = $500
$40,000 tax = $2000
$50,000 tax = $4500
$50,000+ tax = $4500 + 0.3(salary - 50000) eg $100,000 has tax of $19,500
Unfortunately, that’s less than a third of what the actual figures would have to be. Good idea, tho.
Cecil Adams on the “flat tax”:
“Do the rich pay very little tax? Wouldn’t a flat tax be fairer?”
I just came up with the numbers to illustrate the point. Real tax-rate grows asymptotically to the nominal tax-rate so let’s say we think it’s “fair” to charge the rich 40% of their income and due to the gradual rise of the tax rate we start it earlier. We now have A=10K, B=50K and X=40. The rich would pay $8000 plus 40% of their income over $50K. $100,000 would pay $28000 in taxes and $200,000 would pay $68,000 in taxes.
Great cite!
"The flat-tax scam is more of the same. Nobody’s sure what the actual flat-tax rate would be, but let’s suppose it was 20 percent. Based on the 1992 returns, if this inane proposal were implemented, taxes on everybody making $200,000-plus will go down and those on everybody else will go up. Malcolm Forbes Jr., one of the richest men in America, was the leading backer of the flat tax during the 1996 presidential campaign. Now do you see why?"
Maybe I’m not grasping your idea. But aren’t you basically describing the existing tax rate system?
A person in the 35% bracket doesn’t pay 35% of all of his income. He pays 35% of his income above $373,651. His income below $373,651 is taxed at a lower rate.
I guess you missed my point, as did others.
The point is, there’s the same set of tax rules for everyone, but you have to be rich to take advantage of some of the rules. Lemur is crying about the McDonalds worker who can’t take advantage of dividend income tax breaks; notwithstanding the fact that I agree that dividend income shouldn’t be taxed at advantaged rates.
By the way, how much income tax is that McDonalds worker paying, anyway, Lemur?
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. " –Anatole France
I would note that currently the tax rates are the same for everyone as well, isn’t it? Everyone is taxed the same amount for each bracket. Some people just reach the higher brackets.
A guy making 100k and a guy making 30k are charged the same rate on the first 30k. I honestly think most flat-taxers simply don’t understand that.
What is the fascination with comparing the relative levels of one type of taxation for one level of the government as proof that certain segments of society don’t carry their weight? Every level of government is necessary for the successful management of this country, and they are funded by a number of different types of taxes.
Once you factor in ALL taxes to fund ALL government it’s a hell of a lot flatter than the federal income tax alone. It’s basically, the dirt poor pay somewhat less than the poor/middle/wealthy who pay somewhat less than the really wealthy.
Flatten out one tax rate for one segment of government and it will rapidly become, dirt poor pay somewhat more than the poor/middle/wealthy who pay somewhat more than the really wealthy.
Go that way if you want, but we’ll be talking revolution long before we talk about a balanced budget.
Maybe so, but Col Mustard 
in his OP talked about income tax in the title of the thread, so I’ve tried to focus on that.
Not sure what you mean by ‘levels of government’.
Federal, State, Local. Three levels of government funded different ways. State and Local are hard to avoid and are much flatter than Federal, even regressive at times. While I appreciate following the OP’s lead, he is misguided in focusing on Federal Income Tax alone, as are all the folks complaining these days about free riding poor and illegal immigrants. Those people pay taxes, even though they have little to begin with.
The term you’re looking for is lucky duckies.
The Wall Street Journal wrote some ill-advised editorials in 2002 and 2003. They were talking about tax laws and described how a person earning $12,000 a year would pay a very low tax rate and referred to such a person as a “lucky duckie” because his taxes were so low.
Their intent was to generate sympathy for the people (such as their readers) who had to pay higher tax rates. But it blew up in their face. It turned out there was not a lot of popular support for rich people whining about how other people are too poor to owe as much taxes as they did.
No, I was responding to Lemur’s foolishness, with regard to the topic of the OP. Not threadjacking, and not trying to generate any sympathy for sure. Let’s look at what Lemur said, in his rant against advantaged-tax policies for dividends
Since we’re only talking about income taxes in the OP’s title, my question is a fair one: how much tax is that McDonalds kid paying? Answer of course: probably none. In fact, depending on circumstances, he may very well be getting money back through the EITC. Yet the eternally aggrieved among the liberati and class warriors on this board always think the rich are getting away with murder, and not paying their ‘fair share’.
I was thinking of that quote since the beginning of the thread, and couldn’t remember the precise wording. Well done.
My question is a fair one as well: What relevance does a person’s federal income tax rate have when it is only one of many sources of government funding?