U.S Income Tax

July 21, 2008, 6:32 AM

Me and my bro Kuja were talking a while ago about Universal Healthcare, and it led to a discussion about our current income tax system, what do you guys think, too many loopholes, or working just fine?

~ Socrates the Great

July 21, 2008, 6:35 AM

Quote:

Originally Posted by Socrates

Me and my bro Kuja were talking a while ago about Universal Healthcare, and it led to a discussion about our current income tax system, what do you guys think, too many loopholes, or working just fine?

~ Socrates the Great

As we both agreed, its unfair for middle-class families that pay more in taxes then the really rich people like for example Al Gore.

This however isn't a tax problem its an exploit issue. We could re-do the tax system, but im sure those rich and corrupt politicians who enjoy their tax-less, or low tax lives will disagree, and as such invent B.S.

Something must be done whether its a new tax all-together or a complete loophole-less income tax.

- Kuja

August 8, 2008, 4:15 PM

i believe the bracket systems is a collossal failure. we should be using percentage systems. where you pay a percentage of your earnings. i mean, with the current system, you could be up for a raise but you might not want it because it might mean jumping up a tax bracket. means you pay more and end up with less overall. how does that make sense?! i don't really know too much about the system and all, just what ive picked up from my dad.

August 8, 2008, 4:20 PM

Strife, are you suggesting a system where everyone, regardless of income, pays the same percentage of their income? Or where certain groups of people pay different percentages? Just looking to clarify.

August 8, 2008, 11:33 PM

i'd say everyone pays the same percentage, but of course, if you make less than a certain amount, you'd be exempt from that rule. just like the lowest tax bracket doesn't really get taxed now?

August 8, 2008, 11:58 PM

Quote:

Originally Posted by strifehart

where you pay a percentage of your earnings. i mean, with the current system, you could be up for a raise but you might not want it because it might mean jumping up a tax bracket. means you pay more and end up with less overall. how does that make sense?! i don't really know too much about the system and all, just what ive picked up from my dad.

That's pretty much fiscal drag. Moving up a tax bracket will not result in a loss of earnings unless you are at the very top of the bracket and your income increases a little bit.
However as the person would know about this, they would be savvy enough to keep their income just in the tax bracket and then receive fringe benefits.

Flat tax rates(where people all pay the same percent eg 20%) don't work. One of jobs of the government is to allocate income evenly, which is why the rich people pay more tax than anyone else. Flat tax rates simply don't work. They may seem fairer, but they aren't.

August 9, 2008, 12:07 AM

Quote:

Originally Posted by Magic Dirt

Moving up a tax bracket will not result in a loss of earnings unless you are at the very top of the bracket and your income increases a little bit.

that's exactly what i was talking about.

and why should the rich pay more in taxes? if they work harder, earn more and invest more intelligently, why should they have to support the nation more than anybody else?

August 9, 2008, 12:21 AM

Quote:

Originally Posted by Magic Dirt

Flat tax rates(where people all pay the same percent eg 20%) don't work. One of jobs of the government is to allocate income evenly, which is why the rich people pay more tax than anyone else. Flat tax rates simply don't work. They may seem fairer, but they aren't.

Since when has it been the government's job to allocate income evenly? It should not be government's role to have any business in the free market. Sure, their main stated purpose is to prevent injustice, I'm sure; but there is a fine line between preventing said injustice and meddling where they should not. Business owners should have a level of autonomy in determining how much their employees get paid.

So I guess my question is: Why do you say that it's the government's job to allocate income? Furthermore, why don't flat tax rates work? Do you have any examples?

August 9, 2008, 1:09 AM

Quote:

Originally Posted by strifehart

that's exactly what i was talking about.

and why should the rich pay more in taxes? if they work harder, earn more and invest more intelligently, why should they have to support the nation more than anybody else?

Because they don't. It's kind of naive to assume that the rich are rich because they work harder, or are smarter.

Also the rich need to pay the mos taxes so that the government has a lot of revenue. That means they they will have more to spend on healthcare, education, roads, infrastructure, then they would with a flat tax.

Furthermore if we tax the poor as the same as we tax the rich, how are they going to be able to afford to buy goods? Firstly is would be morally wrong to tax the poor at such a level that they can't afford to buy food, clothes etc. Secondly, if they aren't buying goods then any econom would collapse.

Edit:

Quote:

Since when has it been the government's job to allocate income evenly? It should not be government's role to have any business in the free market. Sure, their main stated purpose is to prevent injustice, I'm sure; but there is a fine line between preventing said injustice and meddling where they should not. Business owners should have a level of autonomy in determining how much their employees get paid

Free markets don't exist. They can have very little government intervention, but they are still mixed markets. Also it has always been a goverment's duty to allocate money efficiently.

Quote:

So I guess my question is: Why do you say that it's the government's job to allocate income? Furthermore, why don't flat tax rates work? Do you have any examples

Yes. The list of countries with flat tax rates are pretty much all former soviet countries, whose economies don't work. Coupled with a couple of south American countires and a couple of African countries. Surely that fact that no countries with reasonable economies have a flat tax rates is proof that they don't work.
Flat taxes may sound like a nice idea on paper, a bit like communism. However communism can have positive effects, flat taxes don't. They simply don't work.